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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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FORM U5B
REGISTRATION STATEMENT
Filed Pursuant to Section 5 of the
Public Utility Holding Company Act of 1935
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Dominion Resources, Inc.
Name of Registrant
----------------
Patricia A. Wilkerson
Vice President and Corporate Secretary
Dominion Resources, Inc.
120 Tredegar Street
Richmond, VA 23219
Name, Title and Address of Officer to whom Notices
and Correspondence concerning this Statement
should be Addressed
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Glossary of Defined Terms
When used herein, the following terms shall have the meanings set forth
below:
Act........................ Public Utility Holding Company Act of 1935, as
amended
CNG........................ Consolidated Natural Gas Company
CNG Svc.................... Consolidated Natural Gas Service Company, Inc.
CNG Transmission or
Dominion Transmission ..... Dominion Transmission, Inc. (formerly CNG
Transmission Corporation)
CNG Iroquois............... CNG Iroquois, Inc.
CNG Producing or Dominion Dominion Exploration & Production, Inc. (formerly
E&P........................ CNG Producing Company)
CNG Pipeline............... CNG Pipeline Company
CNG Main Pass.............. CNG Main Pass Gas Gathering Corporation
CNG Oil Gathering.......... CNG Oil Gathering Corporation
CNG Retail................. CNG Retail Services Corporation
CNG Power.................. CNG Power Company
CNG MCS.................... CNG Market Center Services, Inc.
CNG Kauai.................. CNG Kauai Corporation
CNG Bear Mountain.......... CNG Bear Mountain, Inc.
CNG Products & Services.... CNG Products and Services, Inc.
CNG Technologies........... CNG Technologies, Inc.
CNG FS or Dominion FS...... Dominion Field Services, Inc. (formerly CNG Field
Services Company)
CNG PSC.................... CNG Power Services Corporation
CNGI....................... CNG International Corporation
CNG Cayman One............. CNG Cayman One Ltd.
CNGI Australia............. CNGI Australia Pty Limited
CNG Cayman Three........... CNG Cayman Three Ltd.
CNG Argentina.............. CNG Argentina SA
CNG Research............... CNG Research Company
CNG Coal...................
CNG Coal Company
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CNG Financial..............
CNG Financial Services, Inc.
DCI/Dominion Capital....... Dominion Capital Inc.
DEI........................ Dominion Energy, Inc.
DOE........................ Department of Energy
Dominion/DRI............... Dominion Resources, Inc.
East Ohio Gas.............. The East Ohio Gas Company
EPA........................ Environmental Protection Agency
EPACT...................... Energy Policy Act of 1992
Evantage................... Evantage, Inc.
FERC....................... Federal Energy Regulatory Commission
Granite Road............... Granite Road CoGen, Inc.
Hope Gas................... Hope Gas, Inc.
ISO........................ Independent system operators
LNG........................ Consolidated System LNG Company
Merger..................... The consolidation of business partners, CNG and
DRI
Merger U-1................. The Form U-1 Application/Declaration filed by
DRI, File No. 70-09477.
NRC........................ Nuclear Regulatory Commission
NWF........................ Nuclear Waste Fund
North Carolina North Carolina Utilities Commission
Commission.................
OASIS...................... Open access same-time information system
Peoples Natural Gas........ The Peoples Natural Gas Company
RPX........................ Regional Power Exchanges
RTE........................ Regional Transmission Entity
SEC/Commission............. Securities and Exchange Commission
SNF........................ Spent Nuclear Fuel
Virginia Commission........ Virginia State Corporation Commission
Virginia Power/VP.......... Virginia Electric and Power Company
VPEM....................... Virginia Power Energy Marketing
VPNS....................... Virginia Power Nuclear Services Company
VPSC....................... VPS Communications, Inc.
VPSE....................... Virginia Power Services Energy Corp., Inc.
VP Property................ VP Property, Inc.
VP Services/VPS, Inc. ..... Virginia Power Services, Inc.
VNG........................
Virginia Natural Gas, Inc.
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REGISTRATION STATEMENT
The undersigned holding company hereby submits its registration statement to
the Commission pursuant to Section 5 of the Act.
1. Exact name of registrant: Dominion Resources, Inc.
2. Address of principle executive offices: 120 Tredegar Street, Richmond,
Virginia 23219
3. Name and address of chief accounting officer:
James L. Trueheart
Group Vice President and Controller
120 Tredegar Street
Richmond, VA 23219
4. Certain information as to the registrant and each subsidiary company
thereof:
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<CAPTION>
State of Location of
Name of Company Organization Organization Type of Business Business
--------------- ------------ ------------ ------------------------ ---------------
<C> <C> <C> <S> <C>
Dominion Resources, Inc............................ Corp. Virginia Holding Company Richmond, VA
Consolidated Natural Gas Company.................. Corp. Delaware Holding Company Pittsburgh, PA
CNG Coal Company................................ Corp. Delaware Held Coal Properties New Orleans, LA
CNG Financial Services, Inc. ................... Corp. Delaware Finances gas powered Pittsburgh, PA
equipment
CNG International Corporation................... Corp. Delaware Energy-related Reston, VA
activities outside US
CNG Cayman One Ltd. .......................... Corp. Cayman Is. Interests in Australian Cayman Islands
gas Investments
CNGI Australia Pty. Limited................. Corp. Australia Interests in natural gas Australia
pipelines
Epic Energy Pty. ......................... Corp. Australia Owns gas pipelines in Australia
eastern Australia
CNG Cayman Three Ltd. ........................ Corp. Cayman Is. Utility interests in Cayman Islands
South America
CNG Argentina............................... Corp. Argentina Intermediate Holding Argentina
Company
Sodigas Pampeana............................ Corp. Argentina Intermediate Holding Argentina
Company
Camuzzi Gas Pampeana S.A. ................ Corp. Argentina Owns & operates gas Argentina
distribution concession
Sodigas Sur S.A. ........................... Corp. Argentina Intermediate holding Argentina
company
Camuzzi Gas Del Sur S.A. ................. Corp. Argentina Owns & operates gas Argentina
distribution concession
Buenos Aires Energy......................... Corp. Argentina Intermediate holding Argentina
company
Invesora Electria de Buenos Aires S.A. ... Corp. Argentina Intermediate holding Argentina
company
Empresa Distribuidora de Energia
Atlantica S.A. .......................... Corp. Argentina Electric distribution Argentina
company
DBNGP Finance Co. LLC......................... Corp. Delaware Financing facility Australia
CNG Cayman Two Ltd. ........................ Corp. Cayman Is. Interests in Australian Cayman Islands
investments
CNG Labuan One Limited.................... Corp. Malaysia Equity interest in Trust Malaysia
Epic Energy Australia Nominees Pty Ltd.. Trust Australia Owns gas pipelines in Australia
western Australia
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<CAPTION>
State of
Name of Company Organization Organization Type of Business Location of Business
--------------- ------------ ------------- ----------------------------------- ---------------------
<S> <C> <C> <C> <C>
CNG Kauai, Inc. ..... Corp. Delaware Develop elect. generation--Hawaii Reston, VA
CNG Main Pass Gas Corp. Delaware Partnership interest--gas gathering New Orleans, LA
Gathering
Corporation...........
CNG Oil Gathering Corp. Delaware New Orleans, LA
Corporation........... Partnership interest--oil gathering
CNG Power Company..... Corp. Delaware Co-generation facility Pittsburgh, PA
CNG Market Center
Services, Inc. ...... Corp. Delaware Interest in gas hub services Pittsburgh, PA
CNG Bear Mountain,
Inc. ................ Corp. Delaware (inactive) Pittsburgh, PA
Granite Road Cogen, Corp. Texas
Inc. ............... (inactive) Pittsburgh, PA
CNG Power Services Corp. Delaware Pittsburgh, PA
Corporation.......... Electric power marketing
CNG Producing Corp. Delaware Oil & gas exploration/ New Orleans, LA
Company.............. production
CNG Pipeline Co. .... Corp. Texas Holds a 3.3% interest in a New Orleans, LA
pipeline
CNG Products and Corp. Delaware Markets energy related Pittsburgh, PA
Services, Inc........ services
CNG Technologies, Corp. Delaware Develops gas Pittsburgh, PA
Inc. ............... technologies
CNG Research Company.. Corp. Delaware Administers research Pittsburgh, PA
CNG Retail Services
Corporation.......... Corp. Delaware Energy marketing Pittsburgh, PA
CNG Transmission
Corporation.......... Corp. Delaware Gas transmission Clarksburg, WV
CNG Iroquois, Inc. .. Corp. Delaware Owns general partnership Clarksburg, WV
interest
CNG Telecom, Inc. .... Corp. Delaware Inactive Pittsburgh, PA
Consolidated Natural
Gas Service
Company, Inc.......... Corp. Delaware Service company Pittsburgh, PA
Consolidated System Corp. Delaware Inactive--Liquified natural Pittsburgh, PA
LNG Company........... gas
Dominion Field
Services, Inc. ...... Corp. Delaware Gas storage Clarksburg, WV
Hope Gas, Inc. ....... Corp. West Virginia Gas Utility Clarksburg, WV
The East Ohio Gas
Company.............. Corp. Ohio Gas Utility Cleveland, OH
The Peoples Natural
Gas Company.......... Corp. Pennsylvania Gas Utility Pittsburgh, PA
Virginia Natural Gas,
Inc. ................ Corp. Virginia Gas Utility Norfolk, VA
Dominion Capital, Corp. Virginia Financial services/Land Richmond, VA
Inc. ................. Development
Catalyst Old River
Hydroelectric
Limited Partnership... Part. Louisiana Electric Power Production Vidalia, LA
Dominion Capital
Financial, Inc....... Corp. Virginia Financial Services Richmond, VA
Dominion Capital Corp. Virginia Middle Market Richmond, VA
Ventures Corporation.. Commercial Lending
First Dominion LLC Delaware Middle Market New York, NY
Capital, LLC........ Commercial Lending
First Dominion
Securities, LLC..... LLC Delaware Registered Broker/Dealer New York, NY
Dominion Financing Corp. Virginia Medium Term Note Richmond, VA
Services, Inc. ...... Financing Subsidiary
Dominion Land
Management Company... Corp. Virginia Real Estate Management Richmond, VA
Bridgeway Management
Company.............. Corp. Virginia Real Estate Management Suffolk, VA
Dominion Land
Management Company--
Williamsburg......... Corp. Virginia Real Estate Management James City County, VA
Old North State
Management Company... Corp. Virginia Real Estate Management New London, NC
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<CAPTION>
State of
Name of Company Organization Organization Type of Business Location of Business
--------------- ------------ -------------- -------------------------- -----------------------
<S> <C> <C> <C> <C>
Stonehouse Management
Company (Inactive).......... Corp. Virginia Real Estate Management Toano, VA
Waterford Management
Company..................... Corp. Virginia Real Estate Management Houston, TX
Dominion Lands, Inc. ........ Corp. Virginia Land Development Richmond, VA
Chesterfield Land, Inc. .... Corp. Virginia Land Development Chesterfield, VA
Chesterfield Land
Associates................ Part. Virginia Land Development Chesterfield County, VA
Dominion Lands--
Williamsburg, Inc. ......... Corp. Virginia Land Development James City County, VA
Governor's Land
Associates................ Part. Virginia Land Development Williamsburg, VA
Dominion Construction
Management Company, LLC .. LLC Virginia Construction Company Williamsburg, VA
The Governor's Land
Foundation................ Corp. Virginia Homeowners Association Williamsburg, VA
Two Rivers Club at The
Governor's Land........... Corp. Delaware Country Club Williamsburg, VA
Old North, Inc. ............ Corp. Virginia Land Development New London, NC
Lake Badin Associates...... Part. Virginia Land Development Montgomery County, NC
Uwharrie Point Building
Company, LLC.............. LLC Virginia Construction Management New London, NC
Uwharrie Point Community
Association, Inc. ........ Corp. North Carolina Homeowners Association New London, NC
Stonehouse Development
Company, LLC................ LLC Virginia Land Development James City County, VA
Widewater Associates........ Part. Virginia Land Development Stafford County, VA
Dominion Mortgage Services,
Inc. ....................... Corp. Virginia Mortgage Services Richmond, VA
America's MoneyLine, Inc. .. Corp. Virginia Direct Marketing of Home Glen Allen, VA
Mortgages and Home
Equity Lines
Meritech Mortgage Services, Corp. Texas Ft. Worth, TX
Inc. ...................... Services Mortgage Loans
Mortgage Finance, Inc. ..... Corp. Virginia Broker/Lender Services Glen Allen, VA
Saxon Mortgage, Inc. ....... Corp. Virginia Originates Mortgages Glen Allen, VA
Saxon Asset Allocation
Corporation................ Corp. Virginia Special Purpose Entity for Glen Allen, VA
Transfer of Financial
Assets
Saxon Asset Securities
Company.................... Corp. Virginia Performs Securitization of Glen Allen, VA
Mortgages & Home Equity
Products
Saxon Capital Corporation.. Corp. Virginia Special Purpose Entity for Glen Allen, VA
Transfer of Financial
Assets
Saxon Loan Investment
Corporation................ Corp. Virginia Owns Loans Glen Allen, VA
Dominion Venture Investments, Corp. Virginia Middle Market Richmond, VA
Inc. ....................... Commercial Lending
Cambrian Capital
Corporation................ Corp. Delaware Oil/Gas Financial Lending Houston, TX
Triassic Energy
Corporation............... Corp. Delaware Oil/Gas Financial Lending Houston, TX
Cambrian Capital Partners
LP ........................ Part. Delaware Oil/Gas Financial Lending Houston, TX
Triassic Energy Partners,
LP ....................... Part. Delaware Oil/Gas Financial Lending Houston, TX
Edgen, Inc. ................. Corp. Delaware Real Estate Holding Richmond, VA
Company
H-W Properties, Inc. ....... Corp. Delaware Real Estate Investment Houston, TX
Waterford Harbor Realty,
Inc. ..................... Corp. Texas Real Estate Development Houston, TX
Electronic Lighting, Inc. ... Corp. Delaware Lighting Control Systems Newark, CA
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<CAPTION>
State of
Name of Company Organization Organization Type of Business Location of Business
--------------- ------------ ------------ ----------------------- --------------------
<S> <C> <C> <C> <C>
First Source Equity
Holdings, Inc........ Corp. Virginia Holding Company Prospect Heights, IL
FS Warrant, LP....... LP Virginia Equity Holding Company Prospect Heights, IL
First Source Corp. Delaware Middle Market Prospect Heights, IL
Financial, Inc. ..... Commercial Lending
FSFI/Dakotah Direct,
Inc.................. Corp. Virginia Holding Company Prospect Heights, IL
Dakotah Direct II,
LLC ................ LLC Delaware Telemarketing Company Spokane, WA
Louisiana
Hydroelectric Capital
Corporation........... Corp. Virginia Investment Company Richmond, VA
NH Capital, Inc....... Corp. Delaware Shell Company Richmond, VA
OptaCor Financial Corp. Virginia Direct Mail Unsecured Linthieum, MD
Services Company..... Consumer Loans
Rincon Securities,
Inc. ................ Corp. New York Investment Company Richmond, VA
Shoulders Hill/DCI
Properties, Inc. .... Corp. Virginia Real Estate Investment Richmond, VA
Stanton Associates, Corp. Virginia Real Estate Holding Norfolk, VA
Inc. ................ Company
Goodman Segar Hogan,
Inc. ............... Corp. Virginia Real Estate Company Norfolk, VA
Air Cargo Part. Virginia Operating Partnership-- Norfolk, VA
Associates......... Real Estate
Baxter Road Part. Virginia Operating Partnership-- Norfolk, VA
Associates......... Real Estate
Denbigh Shopping Part. Virginia Own 37.5% of Norfolk, VA
Center Associates... Turnbarr Associates
Turnbarr Part. Virginia Operating Partnership-- Norfolk, VA
Associates........ Real Estate
Goodman Segar Hogan Corp. Virginia Operating Partnership-- Norfolk, VA
of Orlando, Inc..... Real Estate
Curry Ford
Associates........ Part Florida Real Estate Investment Orlando, FL
University Square
Associates, LP. ... Part. Florida Real Estate Investment Orlando, FL
Goodman Segar Hogan
of Southern Shopping Corp. Virginia Only has cash as asset, Norfolk, VA
Center, Inc. ....... owns no real estate
Goodman Segar Hogan
of World Trade
Center, Inc......... Corp. Virginia Real Estate Investment Norfolk, VA
World Trade Center Part. Virginia Operating Partnership-- Norfolk, VA
Associates, LP .... Real Estate
Historic Town Square Part. Virginia Operating Partnership-- Norfolk, VA
Company............ Real Estate
Hogan Stanton,
Inc. .............. Corp. Virginia Real Estate Investment Norfolk, VA
HS Advisors, Ltd... Part. Virginia Real Estate Investment Norfolk, VA
Hogan Stanton
Investments,
Inc. .............. Corp. Virginia Real Estate Investment Norfolk, VA
HS Advisors, II,
Ltd. ............ Part. Virginia Real Estate Investment Norfolk, VA
Hogan Stanton
Properties, Inc.... Corp. Virginia Real Estate Investment Norfolk, VA
HS Advisors III,
Ltd. ............. Part. Virginia Real Estate Investment Norfolk, VA
Stanton Associates
One................ Part. Virginia Real Estate Investment Norfolk, VA
Brown Farm Operating Partnership--
Associates........ Part. Virginia Real Estate Norfolk, VA
Stanton Associates
Two................ Part. Virginia Real Estate Investment Norfolk, VA
Salem Lakes Part. Virginia
Commercial Operating Partnership--
Associates........ Real Estate Norfolk, VA
Stonehouse, LLC....... LLC Virginia Real Estate Investment Toano, VA
Stonehouse
Communication, LLC.. LLC Virginia Cable Franchise Toano, VA
Stonehouse Realty LLC Virginia Real Estate Toano, VA
Company, LLC........ Sales/Marketing
The Association at
Stonehouse, Inc. .... Corp. Virginia Homeowners Association Toano, VA
Trilon Dominion LLC Delaware Venture Capital New York, NY
Partners, LLC ....... Investments
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<CAPTION>
State of
Name of Company Organization Organization Type of Business Location of Business
--------------- ------------ ------------ ------------------------------ ---------------------
<S> <C> <C> <C> <C>
EPL Technologies, Corp. Colorado Food Processing West Conshohocken, PA
Inc. ............... Technologies
InstantVision........ Corp. Pennsylvania Manufacture/Market Sarasota, FL
Vision correction systems
NutriCept, Inc. ..... Corp. Delaware Nutriceuticals Dallas, TX
Wilshire
Technologies,
Inc. ............... Corp. California Medical Supplies Carlsbad, CA
Vidalia Audit, Inc. .. Corp. Virginia Audit Company for Richmond, VA
Hydroelectric Project
Virginia Financial Corp. Virginia Richmond, VA
Ventures, Inc. ...... Commercial Finance
First Source Part. Illinois Middle Market Prospect Heights, IL
Financial, LLP ..... Commercial Lending
First Source
Financial CLO
(Delaware), LLC .... LLC Delaware Special Purpose Entity Prospect Heights, IL
First Source
Financial
(Caymans), LP ..... LP Cayman Is. Special Purpose Entity Prospect Heights, IL
First Source LLC Cayman Is. Prospect Heights, IL
Financial, Ltd. ... Special Purpose Entity
Williams Court/DCI
Properties, Inc. .... Corp. Virginia Real Estate Investment Richmond, VA
Dominion Energy, Corp. Virginia Nonutility Power Richmond, VA
Inc. ................. Production and Oil &
Gas Development
Caithness BLM Group Part. New Jersey Ridgecrest, CA
LP .................. Geothermal Electric Generation
Caithness Navy II Part. New Jersey Geothermal Electric Invo County, CA
Group LP ............ Generation
DEI Cayman Holding Corp. Virginia Holding Company Richmond, VA
Company.............. (Inactive)
Dominion Energy
Holding Cayman
Company LDC.......... Corp. Cayman Is. Shell Company Cayman Island
Dominion do Brasil Brazilian Brazil Shell Company Brazil
Ltda. ............. Limitada (Inactive)
SRL
DOMA............... Brazilian Brazil Bid Company (Inactive) Brazil
Limitada
SRL
Dominion Armstrong,
Inc. ................ Corp. Delaware Holding Company Richmond, VA
Armstrong Energy, Corp. Delaware Future Electrical Pennsylvania
LLC................. Generation Facility
located in the State of PA
Dominion Black Warrior
Basin, Inc. ......... Corp. Alabama Methane Gas Production Tuscaloosa, AL
Dominion Cogen,
Inc. ................ Corp. Virginia Cogeneration HQ in Richmond, VA
Dominion Energy
Interamerican Holding
Company LDC.......... Corp. Cayman Is. Shell Company Cayman Island
DEI Holding Cayman
Company Limited..... Corp. Cayman Is. Shell Company Cayman Island
(Inactive)
DEI Interamerican
Holding Company
Limited............. Corp. Cayman Is. Shell Company Cayman Island
Inversiones
Dominion Bolivia
S.A. .............. Corp. Bolivia Equity Holding Bolivia
Empresa Electrica
Corani, S.A. ..... Corp. Bolivia Electric Power Production Cochabama, Bolivia
Inversiones Dominion
Panama S.A. ........ Corp. Panama Shell Company Panama
Dominion Cogen NY, Corp. Virginia Cogeneration in the State HQ in Richmond, VA
Inc. ................ of NY
Middle Falls Limited Part. New York Glens Falls, NY
Partnership......... Small Power Producer
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<CAPTION>
State of Location of
Name of Company Organization Organization Type of Business Business
--------------- ------------ ------------- -------------------------- ------------------
<S> <C> <C> <C> <C>
NYSD Limited Part New York Glens Falls, NY
Partnership......... Small Power Producer
Sissonville Limited Part. New York Glens Falls, NY
Partnership......... Small Power Producer
Dominion Cogen WV, Corp. Virginia Cogeneration in State of HQ in Richmond, VA
Inc. ................ West Virginia
Morgantown Energy Part. West Virginia Morgantown, WV
Associates.......... Cogeneration Plant
Dominion Elwood, Corp. Delaware Richmond, VA
Inc. ................ Shell Company
Elwood Energy, LLC... LLC Delaware Power Generation in the Illinois
State of IL
Dominion Elwood Corp. Delaware Richmond, VA
Marketing, Inc. ..... Electricity Marketing
Elwood Marketing, LLC Delaware Illinois
LLC................. Electricity Marketing
Dominion Elwood Corp. Virginia Operation and Richmond, VA
Services Company, Maintenance Services
Inc.................. for Elwood Energy, Inc.
Dominion Energy Corp. Virginia Richmond, VA
Construction General Contractor for
Company.............. Kincaid
Dominion Energy Direct Corp. Virginia Richmond, VA
Sales, Inc. ......... Gas and Electric Marketing
Dominion Energy Corp. Virginia Richmond, VA
Management, Inc. .... Shell Company
Dominion Energy Peru Corp. Virginia Operation and Richmond, VA
Holdings, Inc. ...... Maintenance Services
for Nonutility
Dominion Energy Corp. Virginia Operation and Richmond, VA
Services Company, Maintenance Services for
Inc. ................ Nonutility Power Projects
Dominion Fitzpatrick, Corp. Virginia Richmond, VA
Inc. ................ Shell Company
Dominion Indian Point, Corp. Virginia Richmond, VA
Inc. ................ Shell Company
Dominion Jefferson, Corp. Delaware Richmond, VA
Inc. ................ Holding Company
Jefferson Energy, Corp. Delaware Future Electrical Ohio
LLC................. Generation Facility
located in the State of OH
Dominion Kincaid, Corp. Virginia Richmond, VA
Inc. ................ Equity Holding Company
Kincaid Generation, LLC Virginia Power Generation in the Illinois
LLC ................ State of IL
Dominion Pleasants, Corp. Virginia Richmond, VA
Inc. ................ Holding Company
Pleasants Energy, Corp. Delaware Future Electrical West Virginia
LLC................. Generation Facility
located in the State of WV
Dominion Reserves, Corp. Virginia Richmond, VA
Inc. ................ Oil & Gas Development
Carthage Energy Corp. Michigan Traverse City, MI
Services, Inc. ..... Gas Marketing Company
Phoenix Dominion LLC Virginia Pittsburgh, PA
Energy LLC......... Gas Marketing Company
Cypress Energy, Corp. Virginia Oil & Gas Development in Richmond, VA
Inc. ............... Louisiana--Onshore
Dominion Appalachian
Development, Inc. ... Corp. Virginia Oil & Gas Development Clarksburg, WV
Dominion Appalachian
Development
Properties, LLC...... LLC Virginia Oil & Gas Development Clarksburg, WV
Dominion Gas Corp. Virginia Natural Gas Processing Richmond, VA
Processing MI, in Michigan
Inc.................
Frederic HOF Limited Part. Virginia Gaylord, MI
Partnership........ Natural Gas Processing
Wilderness Energy, LC Michigan Natural Gas Gathering Gaylord, MI
LC ................ and Processing
Wilderness Energy
Services Limited Part. Michigan Natural Gas Gathering Gaylord, MI
Partnership........ and Processing
Dominion Midwest Corp. Michigan Oil & Gas Development Grand Rapids, MI
Energy, Inc.........
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<CAPTION>
State of
Name of Company Organization Organization Type of Business Location of Business
--------------- ------------ ------------ -------------------------- --------------------
<S> <C> <C> <C> <C>
Dominion Reserves Corp. Virginia Oil & Gas Development Richmond, VA
Gulf Coast, Inc. ...
Dominion Reserves-- Corp. Virginia Oil & Gas Development Indiana
Indiana, Inc........
GTG Pipeline Corp. Virginia Corydon, IN
Corporation........ Gas Pipeline
Great Lakes
Compression, Inc.,
DBA Great Lakes Oil
Field Service,
Inc. ................ Corp. Michigan Oil & Gas Development Grand Rapids, MI
Dominion Reserves-- Corp. Utah Methane Gas Production Richmond, VA
Utah, Inc. .......... in Utah
Dominion San Juan, Corp. Virginia Richmond, VA
Inc. ................ Holding Company
San Juan Partners, LLC Texas Oil & Gas Investments Richmond, VA
LLC ................
Dominion Storage, Corp. Virginia Richmond, VA
Inc. ................ Equity Holding Company
Dominion Energy Corp. Alberta Gas & Oil Exploration Calgary, Alberta,
Canada Limited...... and Development Hub Canada
Domcan East Alberta Corp. Alberta Gas & Oil Exploration and Calgary, Alberta,
Ltd. .............. Development, including Canada
Compressor Manufacturing
and Alberta Storage Hub
Domcan Boundary Corp. Alberta Gas & Oil Exploration and Calgary, Alberta,
Corp............... Development Canada
Domcan Boundary Corp. Alberta Holding Company Calgary, Alberta,
Holdings, Ltd. ... Canada
Dangerfield
Resources (U.S.A.), Corp. Montana (Inactive) Calgary, Alberta,
Inc. .............. Canada
Dangerfield Corp. Alberta (Inactive) Calgary, Alberta,
Resources, Inc.... Canada
Dominion Troy, Inc. .. Corp. Delaware Holding Company Richmond, VA
Troy Energy, LLC. ... Corp. Delaware Future Electrical Ohio
Generation Facility
located in the State of OH
Luz Solar Partners Part. California Los Angeles, CA
Ltd. VII, LP ........ Solar Electric Generation
Niton US, Inc. ....... Corp. Virginia Equity Holding Company Richmond, VA
Remington, LLC ....... LLC Virginia Holding Company Alberta, Calgary
Domcan NS1ULC........ ULC Nova Scotia Special Purpose Alberta, Calgary
Remington Energy Part. Alberta Calgary, Alberta,
Partnership......... Canada
Rumford Cogeneration Part. Maine Rumford, ME
Company, Ltd. ....... Cogeneration
Dominion Generation, Corp. Virginia Electric Power Generation Richmond, VA
Inc................... Holding Company
Dominion Equipment, Corp. Virginia Holding Company Richmond, VA
Inc.................. (Synthetic Lease--
Land/Turbines)
Dominion Elwood II, Corp. Delaware Generation Expansion Elwood, IL
Inc. ................ Project
Elwood Energy II, LLC Delaware Electrical Generation Elwood, IL
LLC................. Expansion Projects
Dominion Elwood III, Corp. Delaware Generation Expansion Elwood, IL
Inc.................. Project
Elwood Energy III, LLC Delaware Electrical Generation Elwood, IL
LLC................. Expansion Project
Dominion Lincoln, Corp. Virginia Holding Company Richmond, VA
Inc..................
Lincoln Generation, LLC Delaware Kincaid Generation Richmond, VA
LLC................. Expansion
Dominion Resources Corp. Virginia Services Company Richmond, VA
Services, Inc.........
Dominion Resources Corp. Delaware Business Trust--East Richmond, VA
Capital Trust I....... Midlands
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<TABLE>
<CAPTION>
State of
Name of Company Organization Organization Type of Business Location of Business
--------------- ------------ ------------ --------------------------- ---------------------
<S> <C> <C> <C> <C>
Dominion U.K. Holding, Corp. Virginia Holding Company Richmond, VA
Inc...................
DEI U.K., Inc......... Corp. Virginia Equity Holding Richmond, VA
Elgar, LLC .......... LLC Virginia Equity Holding Richmond, VA
DR Group Holdings... Corp. UK Financing & Holding United Kingdom
Company
DR Nottingham Corp. UK Financing & Holding United Kingdom
Investments....... Company
DR Corby Limited... Corp. UK Holding Company United Kingdom
East Midlands
Electricity
Generation (Corby)
Limited........... Corp. UK Holding Company United Kingdom
Corby Power Corp. UK Gas Electric Generation United Kingdom
Limited.........
Dominion Energy U.K., Corp. Virginia Equity Holding Queensland, Australia
Inc. ................
Virginia Electric and Corp. Virginia Electric Utility Virginia and
Power Company......... North Carolina
Virginia Power Fuel Corp. Virginia Nuclear Fuel Procurement Richmond, VA
Corporation..........
Virginia Power Corp. Virginia Holding Company Richmond, VA
Services, Inc........
Evantage, Inc........ Corp. Virginia Energy Services Richmond, VA
Virginia Power Energy Corp. Virginia Fuel Procurement Richmond, VA
Marketing...........
Virginia Power
Services Energy
Corp., Inc........... Corp. Virginia Fuel Procurement Richmond, VA
Virginia Power
Nuclear Services Corp. Virginia Nuclear Management and Richmond, VA
Company.............. Operations Services
VP Property, Inc..... Corp. Virginia Real Estate Holding Company Richmond, VA
VPS Communications, Corp. Virginia Telecommunication Services Richmond, VA
Inc. ................
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BUSINESS
5. (a) The general character of the business done by the registrant and its
subsidiaries, separated as between the holding companies, public utility
subsidiaries (as defined in the Act) and the various nonutility subsidiaries.
Dominion
Dominion Resources, Inc. (Dominion), a diversified utility holding company,
has its principal office at 120 Tredegar Street, Richmond, Virginia 23219,
telephone (804) 819-2000. Its principal subsidiaries are Virginia Electric and
Power Company (Virginia Power), a regulated public utility engaged in the
generation, transmission, distribution and sale of electric energy in Virginia
and northeastern North Carolina and with the completion of the merger on
January 28, 2000, Consolidated Natural Gas Company (CNG), a producer,
transporter, distributor and retail marketer of natural gas, serving customers
in Pennsylvania, Ohio, Virginia, West Virginia, New York and other cities
focused in the Northeast and Mid-Atlantic regions of the United States.
Dominion's other major subsidiaries are Dominion Energy, Inc. (DEI), its
independent power and natural gas subsidiary, and Dominion Capital, Inc.
(Dominion Capital), its diversified financial services company. Dominion also
owns and operates a 365 Mw natural gas fired generating facility in the United
Kingdom. Dominion was incorporated in 1983 as a Virginia corporation. Dominion
and its subsidiaries (excluding CNG) had 11,035 full-time employees as of
December 31, 1999.
CNG
CNG operates in all phases of the natural gas industry including
exploration for and production of oil and natural gas in the United States as
well as Canada. Its various retail gas subsidiaries serve approximately 1.9
million residential, commercial, industrial and transportation customers in
Ohio, Pennsylvania, Virginia and West Virginia. Its interstate gas
transmission pipeline system services each of its distribution subsidiaries
and non-affiliated utilities and end use customers in the Midwest, the Mid-
Atlantic and the Northeast states. CNG has an equity ownership interest in a
pipeline extending from Canada to New York and New England.
Utility Operations (Gas)--VNG, Hope Gas, Peoples Natural Gas and East Ohio Gas
VNG, Hope Gas, Peoples Natural Gas and East Ohio Gas are the four public
utility subsidiaries of CNG. Principal cities served at retail are: Cleveland,
Akron, Youngstown, Canton, Warren, Lima, Ashtabula and Marietta in Ohio;
Pittsburgh (a portion), Altoona and Johnstown in Pennsylvania; Norfolk,
Newport News, Virginia Beach, Chesapeake, Hampton and Williamsburg in
Virginia; and Clarksburg and Parkersburg in West Virginia. At December 31,
1999, CNG served at retail approximately two million residential, commercial
and industrial gas sales and transportation customers.
Generally, these gas distribution subsidiaries operate in long-established
service areas and have extensive facilities already in place. Growth in CNG's
traditional service areas in Ohio, Pennsylvania and West Virginia is limited
in that natural gas is already the fuel of choice for heating and for most
significant industrial applications. These areas have experienced minimal
population growth in recent years, and almost all customers have become more
energy efficient, resulting in lower gas usage per customer. In addition, the
economies of these areas, which were formerly based mainly on heavy industry,
have diversified with increased emphasis on high technology and service-
oriented firms.
Utility Operations (Electric)--Virginia Power
Virginia Electric and Power Company is a public utility engaged in the power
generation and electric service delivery business within a 30,000 square-mile
service territory in Virginia and northeastern North Carolina. Virginia Power
supplies energy at retail to approximately two million customers. In addition,
Virginia Power sells
12
<PAGE>
electricity at wholesale to rural electric cooperatives, power marketers and
certain municipalities. The term "Virginia Power" refers to the entirety of
Virginia Electric and Power Company, including its Virginia and North Carolina
operations and all of its subsidiaries.
In Virginia, Virginia Power trades under the name "Virginia Power." The
Virginia service area comprises about 65 percent of Virginia's total land
area, but accounts for over 80 percent of its population. In North Carolina,
Virginia Power trades under the name "North Carolina Power" and serves retail
customers located in the northeastern region of the state, excluding certain
municipalities. Virginia Power also engages in off-system wholesale purchases
of sales of electricity and purchases and sales of natural gas and is
developing trading relationships beyond the geographic limits of its retail
service territory. The Federal Energy Regulatory Commission (FERC), the State
Corporation Commission of Virginia (the Virginia Commission) and the North
Carolina Utilities Commission (the North Carolina Commission) are the
principal regulators of Virginia Power's electric operations.
Various factors are currently affecting the electric utility industry,
including increasing competition and related regulatory changes, costs to
comply with environmental regulations, and the potential for new business
opportunities outside of traditional rate-regulated operations. To meet the
challenges of this new competitive environment, Virginia Power continues to
consider new business opportunities, particularly those which allow it to use
the expertise and resources developed through its regulated utility
experience. Over the past several years Virginia Power has developed a broad
array of "non-traditional" products and services. Examples of non-traditional
services include wholesale power marketing and telecommunications. Virginia
Power also markets its services to other utilities in areas such as nuclear
consulting and management and power distribution (i.e., transmission,
distribution, engineering and metering services). Virginia Power is continuing
to focus on new and existing programs to enhance customer satisfaction and
energy efficiency.
Virginia Power maintains major interconnections with Carolina Power and
Light Company, American Electric Power-Virginia (AEP), Allegheny Energy, Inc.,
and the utilities in the Pennsylvania-New Jersey-Maryland Power Pool. Through
this major transmission network, it has arrangements with these utilities for
coordinated planning, operation, emergency assistance and exchanges of
capacity and energy.
In June 1999, Virginia Power, together with AEP, Consumers Energy Company,
The Detroit Edison Company and First Energy Corporation, on behalf of
themselves and their public utility operating company subsidiaries (Alliance
Companies), filed with FERC applications under Sections 205 and 203 of the
Federal Power Act for approval of the proposed Alliance Regional Transmission
Organization (Alliance RTO). In December 1999, FERC issued an Order under
Section 203 of the Federal Power Act granting the application, subject to
certain conditions and requirements discussed in the Order and directing the
Alliance Companies to submit a compliance filing as discussed in the Order. On
January 19, 2000, the Alliance Companies filed an application seeking
rehearing of certain conditions and requirements of the Order. In February
2000, the Alliance Companies filed amendments to the Alliance RTO documents to
comply with certain conditions and requirements of the Order.
Non-Utility Operations--Dominion Energy, Inc.
DEI, the entity in which Dominion's non-utility generation operations are
conducted, is active in the competitive electric power generation business.
Dominion's non-utility operations are involved in power projects in five
states, including the Kincaid Power Station, a 1,108 Mw coal-fired station in
Illinois and Elwood Energy, a 600 Mw gas fired peaking facility in Illinois;
two geothermal projects and one solar project in California; three small
hydroelectric projects in New York; a waste coal-fueled project in West
Virginia; and a waste-wood and coal-fueled project in Maine.
As a result of Dominion's focus in the Midwest, Northeast and Mid-Atlantic
quadrant of the U.S., DEI reached an agreement in 1999 to sell its interests
in approximately 1,200 megawatts of gross generation capacity located in Latin
America. Duke Energy International is purchasing the interests for
approximately $405 million.
13
<PAGE>
The interests being sold are located in Argentina, Belize, Bolivia and Peru
and generate electricity from hydroelectric, natural gas and diesel fuel
sources. DEI completed the sale of its interests in Belize and Peru in
November 1999, Argentina in March 2000 and expects to complete the sale of its
interests in Bolivia in the second quarter of 2000, following receipt of
certain regulatory approvals.
DEI is active in the development, exploration and production of oil and
natural gas reserves. DEI is involved in oil and natural gas development and
exploration in Canada, the Appalachian Basin, the Michigan Basin, the Illinois
Basin, the Black Warrior Basin, the Uinta Basin, the San Juan Basin, the Gulf
Coast and the Mid-Continent, and owns net proved oil and natural gas reserves
in key regions of the United States and Canada.
Other Businesses
Dominion Capital
Dominion Capital is a diversified financial services company with several
operating subsidiaries in the commercial lending, merchant banking and
residential lending business. Its principal subsidiaries are First Source
Financial, LLP, First Dominion Capital LLC and Saxon Mortgage, Inc. Dominion
Capital also owns a 46 percent interest in Cambrian Capital LLP.
First Source Financial provides cash-flow and asset-based financing to
middle-market companies seeking to expand, recapitalize or undertake buyouts.
First Dominion Capital is an integrated merchant banking and asset management
business located in New York. Saxon Mortgage and its affiliates originate home
equity and mortgage loans to individuals and securitize them. Cambrian Capital
provides financing to small and mid-sized independent oil and natural gas
producers undertaking acquisitions, refinancings and expansions.
Under the SEC's order approving the CNG merger, Dominion must divest itself
of Dominion Capital within three years. No formal plan of divestiture has been
adopted. However, Dominion has begun identifying suitable buyers. Until
Dominion Capital is sold, Dominion Capital will continue to operate these
financial services in its ordinary course of business, therefore requiring
little or de minimis support from Dominion Resources Services Company, Inc.
CNG
CNG Transmission Corporation operates a regional interstate pipeline system
and provides gas transportation and storage services to each of CNG's public
utility subsidiaries and to non-affiliated utilities, end-users and others in
the Midwest, the Mid-Atlantic states and the Northeast. Through its wholly
owned subsidiary, CNG Iroquois, Inc., CNG Transmission Corporation holds a 16
percent general partnership interest in the Iroquois Gas Transmission System,
L.P., that owns and operates an interstate natural gas pipeline extending from
the Canada-United States border near Iroquois, Ontario, to Long Island, New
York. The Iroquois pipeline transports Canadian gas to utility and power
generation customers in metropolitan New York and New England.
Exploration and production operations are conducted by CNG Producing in
several of the major gas and oil producing basins in the United States, both
onshore and offshore. In this highly competitive business, CNG Producing
competes with a large number of entities ranging in size from large
international oil companies with extensive financial resources to small, cash
flow-driven independent producers.
CNG Retail Services Corporation was created in 1997 to market natural gas,
electricity and related products and services to residential, commercial and
small industrial customers. CNG Products and Services, Inc. also provides
energy-related services to customers of CNG's local distribution subsidiaries
and others.
CNG International Corporation was formed by CNG in 1996 to invest in foreign
energy activities. CNG International Corporation currently owns interests in
natural gas pipeline companies in Australia, and gas and electric utility
companies in Argentina.
14
<PAGE>
CNG's gas supply is obtained from various sources including: purchases from
major and independent producers in the Southwest and Midwest regions;
purchases from local producers in the Appalachian area; purchases from gas
markets; production from company-owned wells in the Appalachian area, the
Southwest, Midwest and offshore; and withdrawals from CNG's and third party
underground storage fields.
Regulatory actions, economic factors and changes in customers and their
preferences continue to reshape CNG's gas sales markets. A significant number
of industrial and commercial customers and a growing number of residential
customers currently purchase a large portion of their gas supplies from
producers and marketers, and contract with the transmission and/or
distribution subsidiaries for transportation and other services. Since these
customers are less reliant on the distribution subsidiaries for sales service,
the volume of gas that these subsidiaries must obtain to meet sales
requirements has been reduced. This trend is likely to continue as the state
regulators continue unbundling services at the retail level. With the
exception of Hope Gas, the distribution subsidiaries continue to purchase gas
supplies for their remaining merchant customers and recover the costs through
their approved rates. CNG Retail and Hope Gas (under a negotiated rate
moratorium through December 31, 2001) have the responsibility and assume the
price risk for obtaining their own gas supplies to meet customer needs.
CNG continues to purchase volumes from the accessible producing basins using
its firm capacity resources. These purchased supplies include Appalachian
resources in Ohio, Pennsylvania and West Virginia, and production from the
Gulf Coast, Mid-Continent and offshore areas. Gas purchase contract terms have
continued to undergo transformation initiated with the removal of CNG
Transmission and other gas pipelines from the merchant function. Much of the
supply is purchased under the seasonal or spot purchase agreements. While the
average term of CNG's gas purchase agreements has declined, the reliability of
supply has been adequate. The availability of supplies and heightened
competition have forged a viable market which has proven capable of satisfying
the firm delivery requirements for supplies to CNG's markets in a highly
reliable manner.
CNG's underground storage facilities play an important part in balancing gas
supply with sales demand and are essential to servicing CNG's large volume of
space-heating business. In addition, storage capacity is an important element
in the effective management of both gas supply and pipeline transport
capacity. CNG operates 26 underground gas storage fields located in Ohio,
Pennsylvania, West Virginia and New York. CNG owns 21 of these storage fields
and has joint-ownership with other companies in the remaining five fields. The
total designed capacity of the storage fields is approximately 885 Bcf. CNG's
share of the total capacity is about 669 Bcf. About one-half of the total
capacity is base gas which remains in the reservoirs at all times to provide
the primary pressure which enables the balance of the gas to be withdrawn as
needed.
For a general description of the nature and location of Dominion and its
subsidiaries businesses see Item 4 above.
Further information regarding the general business of Dominion and its
subsidiaries may be found in the Merger Form U-1 previously filed. In
addition, a more detailed business description of Dominion and its
subsidiaries may be found in the following documents which are hereby
incorporated by reference herein: the Annual Reports of Dominion Resources,
Inc. (File No. 1-8489) filed as Exhibit F-1 hereto, Virginia Electric and
Power Company (File No. 1-2255) filed as Exhibit F-2 hereto, and Consolidated
Natural Gas Company (File No. 1-3196) filed as Exhibit F-3 hereto, all on
Forms 10-K for the year ended December 31, 1999 as contained in Item 1
thereof. Information regarding statistical information relating to kilowatt
hour and mcf sales, operating revenues by classes of customers, can be found
in the 1998 Statistical Summary and Financial Forecast of Dominion Resources,
Inc. and its subsidiaries (the 1999 Statistical Summary and Financial Forecast
will be filed as an amendment hereto) while similar information can be found
in the Annual Report of Consolidated Natural Gas Company on Form 10-K (File
No. 1-3196) for the year ended December 31, 1999, contained in Item 1 and
filed as Exhibit F-3 hereto.
(b) Any substantial changes which may have occurred in the general character
of the business of such companies during the preceding five years.
No substantial changes have occurred out of the ordinary course of business
for Dominion and its subsidiaries during the preceding five years excluding
the deregulation of the electric utility industry.
15
<PAGE>
PROPERTY
6. Describe briefly the general character and location of the principal
plants, properties, and other important physical units of the registrant and
its subsidiaries, showing separately (a) public utility and (b) other
properties. If any principal plant or important unit is not held in fee, so
state and describe how held.
Information regarding the principal plants, properties and other important
physical units of Dominion and its subsidiaries is set forth in the following
documents, which are hereby incorporated by reference herein: Items 1 and 2 of
the Annual Report of Dominion on Form 10-K for the year ended December 31,
1999 (File No. 1-8489); and Item 2 of the Annual Report of CNG on Form 10-K
for the year ended December 31, 1999 (File No. 1-3196). Copies of which are
filed as exhibits F-1 and F-3, respectively.
INTERSTATE TRANSACTIONS
7. For each public utility company in the holding company system of the
registrant which is engaged in the transmission of electric energy or gas in
interstate commerce, furnish the following information for the last calendar
year: Total annual sales of Electric Energy (MWH) and Gas (DTH).
There are five public utility companies in the Dominion holding company
system which are engaged in the transmission of electric energy or gas. These
companies include Virginia Power, East Ohio Gas, Peoples Natural Gas, Hope Gas
and VNG.
The activities of the gas public utilities are contained within their
respective states, as follows:
East Ohio Gas Ohio
Peoples Natural Gas Pennsylvania
Hope Gas West Virginia
VNG Virginia
Each gas company noted above has on file with their respective state
commissions information relevant to their gas distribution operations. These
reports for East Ohio Gas, Peoples Natural Gas, Hope Gas, and VNG, have been
provided as Exhibits G-5, G-6, G-8 and G-7, respectively.
Virginia Power has on file with the Federal Energy Regulatory Commission
their 1999 FERC Form No. 1 which includes information related to the
transmission of electric energy. This report has also been provided as Exhibit
G-1. The following table includes sales and purchases made by Virginia Power
and its wholly-owned subsidiaries.
<TABLE>
<CAPTION>
MWH
ELECTRIC ENERGY ----------
<S> <C>
Total Annual Sales................................................... 54,951,379
Total Annual Purchases............................................... 51,688,517
Alabama
Delivered out of state............................................... 38,410
Received from out of state........................................... 300
Arkansas
Delivered out of state............................................... 7,314,000
Received from out of state........................................... 7,320,464
Illinois
Delivered out of state............................................... 209,450
Received from out of state........................................... 204,800
Indiana
Delivered out of state............................................... 22,734
Received from out of state........................................... 250
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
MWH
ELECTRIC ENERGY -----------
<S> <C>
Maryland
Delivered out of state.............................................. 5,866,065
Received from out of state.......................................... 3,716,218
North Carolina
Delivered out of state.............................................. 371,523
Received from out of state.......................................... 297,793
New York
Delivered out of state.............................................. 550
Received from out of state.......................................... 1,100
Ohio
Delivered out of state.............................................. 17,612,580
Received from out of state.......................................... 16,306,241
Pennsylvania
Delivered out of state.............................................. 19,498,785
Received from out of state.......................................... 19,695,469
South Carolina
Delivered out of state.............................................. 5,012
Received from out of state.......................................... 250
Tennessee
Delivered out of state.............................................. 2,660,346
Received from out of state.......................................... 2,587,840
Texas
Delivered out of state.............................................. 717,600
Received from out of state.......................................... 717,600
Virginia
Delivered out of state.............................................. 634,324
Received out of state............................................... 840,192
<CAPTION>
DTH
GAS -----------
<S> <C>
Total Annual Sales.................................................. 282,989,083
Total Annual Purchases.............................................. 309,841,694
Delaware
Delivered out of state.............................................. 142,371
Illinois
Delivered out of state.............................................. 7,105,712
Received from out of state.......................................... 7,105,712
Kentucky
Delivered out of state.............................................. 288,344
Received from out of state.......................................... 170,550
Louisiana
Delivered out of state.............................................. 291,829,611
Received from out of state.......................................... 79,634,115
Maryland
Delivered out of state.............................................. 3,189,665
Received from out of state.......................................... 212,000
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
DTH
GAS -----------
<S> <C>
Michigan
Delivered out of state.............................................. 701,306
Received from out of state.......................................... 1,086,932
Mississippi
Delivered out of state.............................................. 1,795,449
Received from out of state.......................................... 1,912,389
North Carolina
Delivered out of state.............................................. 15,479
Received from out of state.......................................... 18,292
New Jersey
Delivered out of state.............................................. 89,439
Received from out of state.......................................... 11,900
New York
Delivered out of state.............................................. 17,515,020
Received from out of state.......................................... 16,397,832
Ohio
Delivered out of state.............................................. 3,618,148
Received from out of state.......................................... 6,551,477
Pennsylvania
Delivered out of state.............................................. 5,637,767
Received from out of state.......................................... 8,144,612
Texas
Delivered out of state.............................................. 2,135,000
Received from out of state.......................................... 2,135,000
Virginia
Delivered out of state.............................................. 11,941,709
Received from out of state.......................................... 4,792,928
Wisconsin
Delivered out of state.............................................. 401,250
Received from out of state.......................................... 401,250
West Virginia
Delivered out of state.............................................. 152,587,813
Received from out of state.......................................... 181,266,705
</TABLE>
SECURITIES OUTSTANDING
8. Submit the following information concerning the registrant and each
subsidiary thereof as of the latest available date:
FUNDED DEBT
(a) For each issue or series of funded debt secured by liens on property
owned, whether or not such debt has been assumed: (Do not include here any
contingent liabilities reported under paragraph 8 (c)).
18
<PAGE>
As of December 31, 1999
By permission of the Staff, columns E through I have been omitted
<TABLE>
<CAPTION>
Amount Issued
Amount Authorized Less Retired
Name of Obligor Title of Issue (000) (000)
(a) (b) (c) (d)
--------------- -------------- ----------------- -------------
<C> <S> <C> <C>
DRI Secured Promissory Note, due
12/16/04..................... $ 18,100 $ 18,100
Dominion Obligated Mandatorily
Resources Redeemable Preferred 250,000 250,000
Capital Securities
Trust 1 1997 Series, 7.83%, due
12/15/27.....................
VP First and Refunding Mortgage
Bonds
Series 1991-A, 8.75%, due
4/1/21....................... 100,000 100,000
VP First and Refunding Mortgage
Bonds
Series 1992-C, 8.00%, due
3/1/04....................... 250,000 250,000
VP First and Refunding Mortgage
Bonds
Series 1992-D, 7.625%, due
7/1/07....................... 215,000 215,000
VP First and Refunding Mortgage
Bonds
Series 1992-E, 7.375%, due
7/1/02....................... 155,000 155,000
VP First and Refunding Mortgage
Bonds
Series 1993-A, 7.25%, due
2/1/23....................... 100,000 100,000
VP First and Refunding Mortgage
Bonds
Series 1993-B, 6.625%, due
4/1/03....................... 200,000 200,000
VP First and Refunding Mortgage
Bonds
Series 1993-C, 5.875%, due
4/1/00....................... 135,000 135,000
VP First and Refunding Mortgage
Bonds
Series 1993-D, 7.50%, due
6/1/23....................... 200,000 189,280
VP First and Refunding Mortgage
Bonds
Series 1993-E, 6.00%, due
8/1/01....................... 100,000 100,000
VP First and Refunding Mortgage
Bonds
Series 1993-F, 6.00%, due
8/1/02....................... 100,000 100,000
VP First and Refunding Mortgage
Bonds
Series 1993-G, 6.75%, due
10/1/23...................... 200,000 200,000
VP First and Refunding Mortgage
Bonds
Series 1994-A, 7.00%, due
1/1/24....................... 125,000 125,000
VP First and Refunding Mortgage
Bonds
Series 1994-B, 8.625%, due
10/1/24...................... 200,000 200,000
VP First and Refunding Mortgage
Bonds
Series 1995-A, 8.25%, due
3/1/25....................... 200,000 187,000
VP First and Refunding Mortgage
Bonds
Series 1997-A, 6.75%, due
2/1/07....................... 200,000 200,000
VP Money Market Municipal
Securities
Chesapeake 1985, 3.792%, due
2/1/08*...................... 30,000 30,000
VP Money Market Municipal
Securities
Chesterfield 1985, 3.771%,
due 10/1/09*................. 40,000 40,000
VP Money Market Municipal
Securities
Chesterfield 1987 Series A,
3.838%, due 6/1/17*.......... 40,000 40,000
VP Money Market Municipal
Securities
Chesterfield 1987 Series B,
3.838%, due 6/1/17*.......... 35,000 35,000
VP Money Market Municipal
Securities
Chesterfield 1987 Series C,
3.703%, due 12/1/07*......... 15,000 15,000
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Amount Issued
Amount Authorized Less Retired
Name of Obligor Title of Issue (000) (000)
(a) (b) (c) (d)
--------------- -------------- ----------------- -------------
<C> <S> <C> <C>
VP Money Market Municipal
Securities
Grant 1986, 3.794%, due
8/1/16*...................... $ 7,400 $ 7,400
VP Money Market Municipal
Securities
Grant 1994, 3.650%, due
9/1/24*...................... 19,500 19,500
VP Money Market Municipal
Securities
Grant 1996, 3.800%, due
3/1/26*...................... 24,500 24,500
VP Money Market Municipal
Securities
Halifax 1992, 3.812%, due
11/1/27*..................... 56,000 56,000
VP Money Market Municipal
Securities
Louisa 1984, 3.942%, due
12/1/08*..................... 60,000 60,000
VP Money Market Municipal
Securities
Louisa 1985, 3.718%, due
12/1/08*..................... 62,000 62,000
VP Money Market Municipal
Securities
Louisa 1987, 3.799%, due
12/1/15*..................... 18,000 18,000
VP Money Market Municipal
Securities
Prince William 1986, 3.770%,
due 8/1/16*.................. 11,200 11,200
VP Money Market Municipal
Securities
York 1985, 3.762%, due
7/1/09*...................... 70,000 70,000
VP Fixed Interest Rate Bonds
Louisa 1994, 5.450%, due
1/1/24....................... 19,500 19,500
VP Convertible Interest Rate
Bonds
Louisa 1997, 5.150%, due
3/30/22...................... 10,000 10,000
Virginia Obligated Mandatorily
Power Redeemable Preferred 135,000 135,000
Capital Securities
Trust 1 1995 Series A, 8.05%, due
9/30/25......................
DEI Senior Secured Bonds, 7.33%,
due 6/15/20.................. 265,000 265,000
</TABLE>
- --------
(*) Interest rates vary based on the short-term money market municipal tax-
exempt rates.
CAPITAL STOCK
(b) For each class of capital stock including certificates of beneficial
interest give information both in number of shares and in dollar amounts: (Do
not include here any warrants, options, or other securities reported under
paragraph 8(d)).
As of December 31, 1999
By permission of the Staff, columns G through J have been omitted
<TABLE>
<CAPTION>
Amount
Reserved
for Options,
Warrants, Additional
Amount Conversions & Amount Amount
Name of Issuer Title of Issue Authorized Other Rights Unissued Issued
(a) (b) (c) (d) (e) (f)
-------------- -------------- ---------- ------------- ---------- --------
(Thousands)
<C> <S> <C> <C> <C> <C>
DRI Common Stock, no par
value.................. 500,000 7,147 306,553 186,300
Preferred Stock......... 20,000 -- 20,000 None
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Amount
Reserved
for Options,
Warrants, Additional
Amount Conversions & Amount Amount
Name of Issuer Title of Issue Authorized Other Rights Unissued Issued
(a) (b) (c) (d) (e) (f)
-------------- -------------- ----------- ------------- ----------- ------
(Thousands)
<C> <S> <C> <C> <C> <C>
CNG Common Stock, par value
$2.75.................. 400,000 -- 304,052 95,948
Preferred Stock, $100
par value.............. 5,000 -- 5,000 None
VP Common Stock, no par
value.................. 300 -- 129 171
VP Money Market Preferred,
Jan. 1987(1)........... (2) -- -- 500
VP Money Market Preferred,
Jun. 1987(1)........... (2) -- -- 750
VP Money Market Preferred,
Jun. 1989(1)........... (2) -- -- 750
VP Money Market Preferred,
Oct. 1988(1)........... (2) -- -- 750
VP Money Market Preferred,
Sept. 1992,
Series A(1)............ (2) -- -- 500
VP Money Market Preferred,
Sept. 1992,
Series B(1)............ (2) -- -- 500
VP Preferred Stock, $100
par value,
$4.04 Series........... (2) -- -- 12
VP Preferred Stock, $100
par value,
$4.12 Series........... (2) -- -- 32
VP Preferred Stock, $100
par value,
$4.20 Series........... (2) -- -- 14
VP Preferred Stock, $100
par value,
$4.80 Series........... (2) -- -- 73
VP Preferred Stock, $100
par value,
$5.00 Series........... (2) -- -- 106
VP Preferred Stock, $100
par value,
$6.98 Series........... (2) -- -- 600
VP Preferred Stock, $100
par value,
$7.05 Series........... (2) -- -- 500
VP Preferred Stock, $100
par value,
$5.58 Series........... (2) -- -- 400
VP Preferred Stock, $100
par value,
$6.35 Series........... (2) -- -- 1,400
</TABLE>
- --------
Note:
(1) Money Market Preferred stock dividend rates are variable and are set every
49 days via an auction.
(2) The total number of authorized shares for Virginia Power preferred stock
(whether or not subject to mandatory redemption) is 10 million shares.
CONTINGENT LIABILITIES
(c) A brief outline of the nature and amount of each contingent liability on
account of endorsement or other guarantees of any securities.
Information regarding contingent liabilities is set forth in the following
documents, copies of which are incorporated herein by reference in the stated
Exhibits:
. Note Q to the Consolidated Financial Statements as of and for the year
ended December 31, 1999, of Dominion Resources, Inc. included in
Dominion's Form 10-K for the year ended December 31, 1999 (File No. 1-
8489) (Exhibit F-1).
21
<PAGE>
. Notes 17 and 18 to the Consolidated Financial Statements as of and for
the year ended December 31, 1999, of Consolidated Natural Gas Company
included in CNG's Form 8-K, filed January 27, 2000, File No. 1-3196
(Exhibit F-6) and CNG's Form 10-K for the year ended December 31, 1999,
File No. 1-3196 (Exhibit F-3).
. Note R to the Consolidated Financial Statements as of and for the year
ended December 31, 1999 of Virginia Electric and Power Company included
in the Form 10-K for the year ended December 31, 1999, File No. 1-2255
(Exhibit F-2).
Status of contingent liabilities will also be presented in the Form 10-Q
filings for the period ended March 31, 2000 for each of Dominion, Virginia
Power and CNG.
OTHER SECURITIES
(d) A statement of the amount of warrants, rights, or options and of any
class of securities of the registrant and subsidiary companies not elsewhere
herein described which is outstanding and/or authorized. A brief description
of the provisions thereof should be included. Information need not be set
forth under this item as to notes, drafts, bills of exchange or bankers'
acceptances which mature within nine months.
Information regarding other securities is set forth in Dominion's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 (File No. 1-
8489) and filed herewith as Exhibit F-1.
INVESTMENTS IN SYSTEM SECURITIES
9. Give a tabulation showing the principal amount, par or stated value, the
cost to the system company originally acquiring such security, and the number
of shares or units, of each security described under Item 8 that is held by
the registrant and by each subsidiary company thereof as the record (or
beneficial) owner, and the amounts at which the same are carried on the books
of each such owner. This information should be given as of the same date as
the information furnished in answer to Item 8.
<TABLE>
<CAPTION>
Number of
Common
Shares Issuer's Owner's
Name of Company Owned Book Value Book Value
--------------- --------- ---------- ----------
(Thousands of
Dollars)
<S> <C> <C> <C> <C>
Dominion Resources, Inc.
Dominion Energy, Inc. ........... Common Stock 10 $612,611 $612,611
Oil and Gas Companies
Dominion Reserves, Inc. ........ Common Stock 100 200,224 200,224
Carthage Energy Services,
Inc. ......................... Common Stock 500 4,380 4,380
Phoenix Dominion Energy, LLC.. N/A 3,423 3,423
Cypress Energy Inc. ........... Common Stock 500 (5,784) (5,784)
Dominion Appalachian
Development, Inc. ............ Common Stock 10 (4,674) (4,674)
Dominion Appalachian
Development Properties LLC.... N/A 6,654 6,654
Dominion Gas Processing
Michigan, Inc. ............... Common Stock 10 5,530 5,350
Frederic HOF LP............... N/A 15,527 14,594
Wilderness Energy Services
LP........................... N/A 11,664 5,832
Dominion Midwest Energy,
Inc. ......................... Common Stock 10 15,191 15,191
Great Lakes Compression,
Inc. ......................... Common Stock 10 2,639 2,639
Dominion Reserves Gulf Coast,
Inc. ......................... Common Stock 10 48,239 48,239
Dominion Reserves Indiana,
Inc. ......................... Common Stock 10 (2,773) (2,773)
Dominion Black Warrior Basin,
Inc. ........................... Common Stock 10 6,702 6,702
Dominion Reserves Utah, Inc. .... Common Stock 10 27,908 27,908
San Juan Partners, LLC........... N/A 56,902 56,902
Dominion Storage, Inc. .......... Common Stock 10 358 358
Dominion Energy Canada Limited.. Common Stock 73,886 92,991 92,991
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Number of
Common
Shares Issuer's Owner's
Name of Company Owned Book Value Book Value
--------------- --------- ---------- ----------
(Thousands of
Dollars)
<S> <C> <C> <C> <C>
Power Generation Companies
Dominion Cogen, Inc. ....... Common Stock 100 $ 63,895 $ 63,895
Dominion Cogen NY, Inc. .... Common Stock 100 (351) (351)
Dominion Cogen WV........... Common Stock 100 19,313 19,313
Morgantown Energy
Associates................ N/A 20,269 10,135
Dominion Elwood, Inc. ...... Common Stock 100 94,853 94,853
Elwood Energy LLC.......... N/A 199,524 99,762
Dominion Elwood Services,
Inc. ...................... Common Stock 10 132 132
Dominion Kincaid, Inc. ..... Common Stock 10 81,858 81,858
Kincaid Generation, LLC.... N/A 97,528 97,528
Dominion Energy Services
Company Inc. .............. Common Stock 10 5,370 5,370
Dominion Energy Construction
Company, Inc. ............. Common Stock 100 -- --
Dominion Energy Management,
Inc. ...................... Common Stock 10 (114) (114)
Dominion Generation, Inc. .. Common Stock 100 (301) (301)
DR Capital Trust............ Common Stock 7,732 7,732
Dominion UK Holding, Inc.... (9,498) (9,498)
Virginia Power.............. Common Stock 3,742,342 3,742,342
VP Fuel Corp. ............. Common Stock 1 1 1
VP Services................ Common Stock 1,100 8,919 8,919
Evantage.................. Common Stock N/A -- --
VPEM...................... Common Stock 1,000 9,475 9,475
VPSE...................... Common Stock 1 16 16
VPNS...................... Common Stock 100 (876) (876)
VP Property............... Common Stock N/A -- --
VPSC....................... Common Stock 41 12,336 12,336
VP Capital Trust I......... Common Stock 167,000 4,175 4,175
Preferred Stock 5,400,000 -- --
Dominion Capital............ Common Stock -- 740,912 740,912
Dominion Capital Financial,
Inc. ..................... Common Stock 100 -- --
Dominion Capital Ventures
Corporation............... Common Stock 100 148,123 148,123
Dominion Financing
Services, Inc. ........... Common Stock 10 -- --
Dominion Land Management
Company, Inc. ............ Common Stock 100 (1,762) (1,762)
Dominion Lands, Inc. ...... Common Stock 10 24,915 24,915
Dominion Mortgage Services,
Inc. ..................... Common Stock 100 345,657 345,657
Dominion Venture
Investments, Inc. ........ Common Stock 100 50,337 50,337
Edgen, Inc. ............... Common Stock 541 21,365 21,365
Louisiana Hydroelectric
Capital Corp. ............ Common Stock 10 6,681 6.681
Catalyst Old River
Hydroelectric Ltd. ....... N/A 26,599 32,237
Optacor Financial Services
Co. Inc. ................. Common Stock 1,000 931 931
Rincon Securities, Inc. ... Common Stock 1 74,662 74,662
Stanton Associates, Inc. .. Common Stock 529,411 9,731 9,731
Stonehouse Development
Company, LLC.............. N/A 1,738 1,738
Trilon Dominion Partners,
LLC....................... N/A 37,084 48,257
Vidalia Audit, Inc. ....... Common Stock 100 (187) (187)
Virginia Financial
Ventures, Inc. ........... Common Stock 100 312,783 312,783
</TABLE>
- --------
Note: Foreign holding companies are not included since they have been or will
be sold.
23
<PAGE>
<TABLE>
<CAPTION>
Number of
Common
Shares Issuer's Owner's
Name of Company Owned Book Value Book Value
--------------- --------- ---------- ----------
(Thousands of
Dollars)
<C> <S> <C> <C> <C>
Consolidated Natural Gas Company
CNG Service..................... Common Stock 100 $ 10 $ 10
6.75% non-negotiable
note 1,612 1,612
9.50% non-negotiable
notes 1,265 1,265
6.10% non-negotiable
note 795 795
7.50% non-negotiable
note 20,000 20,000
CNG Transmission................ Common Stock 60,100 722,476 720,477
6.20% non-negotiable
note 50,000 50,000
6.95% non-negotiable
note 14,000 14,000
6.75% non-negotiable
note 13,959 13,959
9.50% non-negotiable
notes 10,960 10,960
7.40% non-negotiable
notes 75,000 75,000
8.95% non-negotiable
notes 35,000 35,000
6.10% non-negotiable
note 59,541 59,541
6.80% non-negotiable
notes 57,793 57,793
8.75% non-negotiable
note 27,000 27,000
CNG Iroquois................. Common Stock 2,394 39,709 39,709
East Ohio Gas................... Common Stock 4,759,353 414,702 394,076
6.95% non-negotiable
note 40,000 40,000
6.75% non-negotiable
note 4,640 4,640
9.50% non-negotiable
notes 3,643 3,643
7.40% non-negotiable
notes 35,000 35,000
8.95% non-negotiable
notes 20,000 20,000
6.10% non-negotiable
notes 30,220 30,220
6.80% non-negotiable
notes 29,946 29,946
8.75% non-negotiable
note 2,250 2,250
6.20% non-negotiable
note 80,000 80,000
7.50% non-negotiable
note 55,000 55,000
Peoples Natural Gas............. Common Stock 1,835,350 248,881 238,882
6.95% non-negotiable
note 9,000 9,000
6.75% non-negotiable
note 3,437 3,437
9.50% non-negotiable
notes 2,699 2,699
8.95% non-negotiable
notes 14,000 14,000
7.40% non-negotiable
notes 15,000 15,000
6.80% non-negotiable
notes 37,430 37,430
6.10% non-negotiable
note 26,039 26,039
6.85% non-negotiable
note 25,000 25,000
Virginia Natural Gas............ Common Stock 5,273 208,737 209,111
6.20% non-negotiable
note 55,000 55,000
6.85% non-negotiable
note 24,000 24,000
7.50% non-negotiable
note 37,000 37,000
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Number of
Common
Shares Issuer's Owner's
Name of Company Owned Book Value Book Value
--------------- --------- ---------- ----------
(Thousands of
Dollars)
<S> <C> <C> <C> <C>
Hope Gas................ Common Stock 449,000 $ 57,466 $ 56,258
6.95% non-negotiable note 3,000 3,000
6.75% non-negotiable note 1,505 1,505
9.50% non-negotiable notes 1,182 1,182
7.40% non-negotiable notes 5,000 5,000
8.95% non-negotiable notes 3,000 3,000
6.10% non-negotiable note 6,420 6,420
6.80% non-negotiable notes 12,097 12,097
6.85% non-negotiable note 1,000 1,000
7.50% non-negotiable note 4,200 4,200
CNG Producing........... Common Stock 43,900 679,256 683,413
6.20% non-negotiable note 25,000 25,000
6.95% non-negotiable note 30,000 30,000
6.75% non-negotiable note 50,000 50,000
8.95% non-negotiable notes 44,550 44,550
6.10% non-negotiable note 71,075 71,075
6.80% non-negotiable note 8,500 8,500
6.85% non-negotiable note 100,000 100,000
7.50% non-negotiable note 195,000 195,000
CNG Pipeline.......... Common Stock 12,000 1,441 1,441
CNG Main Pass........... Common Stock 1 3,002 3,002
CNG Oil Gathering....... Common Stock 1 3,606 3,606
CNG Retail.............. Common Stock 600 (2,845) (2,845)
CNG Power............... Common Stock 8,360 9,185 9,185
CNG Market Center
Services............... Common Stock 10 1,448 1,448
CNG Bear Mountain..... Common Stock 1 22 22
Granite Road.......... Common Stock 1,000 1 1
CNG Products and
Services............... Common Stock 399 59 59
CNG Technologies...... Common Stock 200 611 611
CNG Field Services...... Common Stock 1,367 21,956 21,772
CNG Power Services...... Common Stock 1,552 (2,667) (2,667)
CNG International....... Common Stock 23,855 228,352 228,352
6.20% non-negotiable note 15,000 15,000
CNG Cayman One........ Common Stock 990 38,232 38,232
CNGI Australia...... Common Stock 100 34,306 38,232
CNG Cayman Three...... Common Stock 100 130,518 130,518
CNG Argentina....... Common Stock 12,000 979 979
CNG Kauai............. Common Stock 1 1,797 1,797
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Number of
Common
Shares Issuer's Owner's
Name of Company Owned Book Value Book Value
--------------- --------- ---------- ----------
(Thousands of
Dollars)
<S> <C> <C> <C> <C>
CNG LNG............................ Common Stock 100 $1,002 $1,002
CNG Research....................... Common Stock 1,558 78 78
CNG Coal........................... Common Stock 2,236 6,869 6,869
CNG Financial...................... Common Stock 5 35 35
</TABLE>
INVESTMENTS IN OTHER COMPANIES
10. Give a tabulation showing all investments of the registrant and of each
subsidiary thereof in holding companies and in public utility companies which
are not subsidiary companies of the registrant. Also show all other
investments of the registrant and of each subsidiary thereof in the securities
of any other enterprise, if the book value of the investment in any such
enterprise exceeds 2% of the total debit accounts shown on the balance sheet
of the company owning such investment or an amount in excess of $25,000
(whichever amount is the lesser). Give principal amount and number of shares
or units and the cost of each issue of such securities to the system company
originally acquiring such security, and amount at which carried on the books
of the owner. List all such securities pledged as collateral for loans or
other obligations and identify loans and obligations for which pledge. This
information should be given as of the same date as the information furnished
in answer to Item 8.
(a) Investments of the registrant and of each subsidiary thereof in holding
companies and in public utility companies which are not subsidiary companies
of the registrant: None.
(b) By permission of the Staff, Dominion has presented below all other
investments held by Dominion or any of its subsidiaries in the securities of
any other enterprise, if the book value of the investment in any such
enterprise exceeds 2% of the total debit accounts shown on the balance sheet
of the company owing such investment or an amount in excess of $1,000,000
(whichever amount is the greater). This item is applicable to investments held
by the registrant or its 50% or greater owned subsidiaries with the following
exceptions:
(1) Any interests held by EWG subsidiaries may be aggregated by facility;
(2) Dominion Capital may report at the first tier subsidiary level except
that any interests held by its hydro facility must be separately
presented; and
(3) Any interests held by foreign subsidiaries subject to a pending sale
may be aggregated.
<TABLE>
<CAPTION>
Number of
Registrant/ Common Ownership Book
Subsidiary Other Company Shares Owned Percentage Value
----------- ------------- ------------ ---------- -------
($000)
<C> <S> <C> <C> <C>
Dominion Energy, Inc................ Coso Power Developers N/A 11.10% $30,540
Coso Energy Developers N/A 9.50% 26,959
Luz Solar Partners Ltd.
VII N/A 15.00% 8,866
Rumford Cogeneration
Company Limited
Partnership N/A 10.20% 9,481
Dominion Venture Investments, Inc... Cambrian Capital
Corporation N/A 45.80% 50,282
Dominion Gas Processing Alberta Hub Joint
Michigan, Inc...................... Venture N/A 40.00% 14,632
Wilderness Chester Gas
Processing Limited
Partnership N/A 45.20% 2,597
CNG Iroquois........................ Iroquois Gas
Transmission System, LP N/A 16.00% 38,498
CNG Main Pass....................... Dauphin Island Gathering
Partners N/A 13.58% 33,390
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Number of
Registrant/ Common Ownership Book
Subsidiary Other Company Shares Owned Percentage Value
----------- ------------- ------------ ---------- -------
($000)
<C> <S> <C> <C> <C>
CNG Oil Gathering........... Main Pass Oil Gathering
Company N/A 33.30% $17,420
CNG Market Center Services.. CNG/Sabine Center N/A 50.00% 612
CNG International........... DBNGP Finance Company
LLC N/A 50.00% 54,490*
Buenos Aires Energy
Company 25,421,525 25.00% 31,407
The Latin American
Energy and Electricity
Fund I, LP N/A 16.50% 8,266
FondElec General
Partner, LP N/A 8.29% 43
Kauai Power Partners, LP N/A 1.00% 18
CNGI Australia Pty Ltd...... EPIC Energy Pty, LTD 150,000,030 30.00% 34,182
CNG Cayman Three Ltd........ Sodigas Pampeana SA 26,180,062 21.55% 78,059
Sodigas Sur SA 18,918,540 21.55% 51,215
CNG Kauai, Inc. ............ Kauai Power Partners, LP N/A 99.00% 1,787
</TABLE>
- --------
* In 1998, DBNGP Finance borrowed $250 million under a Senior Term Loan
Facility (Term Loan). The Term Loan matures in 2001, can be extended in one-
year increments to 2003 and bears interest at a variable rate. Of the gross
proceeds received by DBNGP Finance under the Term Loan, $100 million was
distributed to CNG International. In connection with the Term Loan, CNG
International entered into an Equity Contribution Agreement with DBNGP
Finance. CNG International is contractually obligated to make equity
contributions to DBNGP Finance equal to the Term Loan proceeds distributed
to CNG International, plus interest on such proceeds, in the event that
DBNGP Finance is unable to service this debt. CNG is contractually obligated
to cause CNG International to make such equity contributions.
INDEBTEDNESS OF SYSTEM COMPANIES
11. List each indebtedness of the registrant and of each subsidiary company
thereof (other than indebtedness reported under Item 8, but as of the same
date) where the aggregate debt owed by any such company to any one person
exceeds $25,000 or an amount exceeding 2% of the total of the debit accounts
shown on the balance sheet of the debtor (which amount is the lesser) but not
including any case in which such aggregate indebtedness is less than $5,000,
and give the following additional information as to each such indebtedness:
(a) Debts owed to associate companies at December 31, 1999.
<TABLE>
<CAPTION>
Rate of Date of
Amount Interest Maturity
Name of Debtor Name of Creditor Owed (Note 1) (Note 2)
-------------- ---------------- -------- -------- --------
($000)
<S> <C> <C> <C> <C>
Dominion--First Tier
Dominion Energy.............. Dominion Resources $ 4,251 None N/A
Dominion Resources 120,712 6.4% N/A
Dominion Capital 3 None N/A
Dominion Generation 210 None N/A
Dominion Resources........... Virginia Power 1,424 None N/A
DRI Capital Trust 257,732 7.83% 2027
Dominion Capital Trust I..... Dominion Resources 219,097 5.4645% N/A
Dominion Generation.......... Dominion Energy 505 None N/A
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
Rate of Date of
Amount Interest Maturity
Name of Debtor Name of Creditor Owed (Note 1) (Note 2)
-------------- ---------------- -------- -------- --------
($000)
<S> <C> <C> <C> <C>
Dominion Capital
Dominion Capital............ Edgen, Inc. $ 7,452 6.5545% Revolver
Louisiana
Hydroelectric
Capital Corp. 1,381 6.5545% Revolver
Rincon Securities,
Inc. 97,576 6.5545% Revolver
Virginia Financial
Ventures, Inc. 2,711 6.5545% Revolver
Dominion Capital Ventures
Corporation................ Dominion Capital 200,266 6.5545% Revolver
Dominion Land Management
Company.................... Dominion Capital 1,222 6.5545% Revolver
Dominion Lands, Inc......... Dominion Capital 51,143 6.5545% Revolver
Dominion Mortgage Services,
Inc........................ Dominion Capital 121,865 6.5545% Revolver
Stanton Associates Inc...... Dominion Capital 2,039 6.5545% Revolver
Vidalia Audit, Inc. ........ Dominion Capital 232 6.5545% Revolver
Virginia Financial Ventures,
Inc. ...................... Dominion Capital 84,947 6.5545% Revolver
Dominion Capital............ Dominion Resources 807 None N/A
Dominion Capital Ventures
Corporation................ Dominion Resources 212 None N/A
Dominion Land Management
Company, Inc............... Dominion Resources 52 None N/A
Dominion Capital Ventures
Corporation................ Dominion Capital 221 None N/A
Dominion Lands, Inc......... Dominion Land 41 None N/A
Management Co., Inc.
Dominion Mortgage Services,
Inc........................ Dominion Capital 74 None N/A
Dominion Energy--Power
Generation Companies
Dominion Cogen, Inc......... Dominion Energy 648 None N/A
Dominion Cogen, NY.......... Dominion Energy 182 None N/A
Dominion Energy............. Dominion Cogen, WV 2,162 None N/A
Dominion Cogen WV 17,526 6.4% N/A
Dominion Kincaid, Inc....... Dominion Energy 3,400 None N/A
Dominion Energy 3,125 6.4% N/A
Dominion Energy............. Kincaid Generation
LLC 11,358 6.4% N/A
Kincaid Generation
LLC 37,676 None N/A
Kincaid Generation LLC...... Dominion Energy
Services Company,
Inc. 4,099 None N/A
Dominion Elwood, Inc........ Dominion Energy 3,200 None N/A
Dominion Energy............. Elwood Energy LLC 91 None N/A
Elwood Energy LLC 3,466 6.4% N/A
Dominion Energy Services
Co......................... Dominion Energy 264 None N/A
Kincaid Generation.......... Dominion Energy
Services Co. 1,894 None N/A
Morgantown Energy Dominion Energy
Associates................. Services Co. 1,308 None N/A
Dominion Energy
Services Co. 3,527 11.5% N/A
Dominion Energy............. Dominion Energy
Services Co., Inc. 2,706 6.4% N/A
Dominion Energy
Construction Company 3,131 None N/A
Dominion Energy
Construction Company 1,642 6.4% N/A
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Rate of Date of
Amount Interest Maturity
Name of Debtor Name of Creditor Owed (Note 1) (Note 2)
-------------- ---------------- -------- -------- --------
($000)
<S> <C> <C> <C> <C>
Kincaid Generation LLC...... Dominion Energy
Construction Company $ 225 None N/A
Dominion Elwood Services
Co......................... Dominion Energy 151 None N/A
Elwood Energy, Inc.......... Dominion Elwood
Services Co. 387,585 None N/A
Dominion Elwood Services
Co. ....................... Dominion Resources 17,344 None N/A
Morgantown Energy
Associates................. Dominion Energy 638 11% N/A
Dominion Energy--Oil and Gas
Companies
Dominion Energy............. Dominion Reserves 25,379 None N/A
Dominion Reserves 26,494 6.4% N/A
Dominion Black
Warrior Basin, Inc. 1,719 None N/A
Dominion Black Warrior
Basin, Inc................. Dominion Energy 7,012 6.4% N/A
Dominion Reserves--Utah,
Inc........................ Dominion Energy 2,613 None N/A
Dominion Energy 17,087 6.4% N/A
Dominion Energy............. Dominion Reserves--
Indiana, Inc. 282 None N/A
Dominion Reserves--Indiana,
Inc........................ Dominion Energy 14,757 6.4% N/A
Dominion Energy............. Dominion Reserves
Gulf Coast Inc. 258 None N/A
Dominion Reserves
Gulf Coast Inc. 48,539 6.4% N/A
Cypress Energy, Inc. 470 None N/A
Cypress Energy, Inc......... Dominion Energy 8,134 6.4% N/A
Dominion Appalachian
Development, Inc. ......... Dominion Energy 3,999 None N/A
Dominion Energy 7,884 6.4% N/A
Dominion Appalachian
Development
Properties, LLC............ Dominion Energy 3,348 None N/A
Dominion Energy 54,462 6.4% N/A
Dominion Energy............. Dominion Midwest
Energy, Inc. 5,567 None N/A
Dominion Midwest Energy, Carthage Energy
Inc........................ Services, Inc. 37 None N/A
Dominion Energy............. Dominion Midwest
Energy, Inc. 13,653 6.4% N/A
Dominion Midwest Energy, Carthage Energy
Inc........................ Services, Inc. 41 None N/A
Dominion Energy............. Dominion Reserves 5,557 None N/A
Dominion Reserves........... Dominion Energy 77,192 6.4% N/A
Dominion Energy............. Great Lakes
Compression, Inc. 1,017 None N/A
Great Lakes Compression,
Inc........................ Dominion Energy 4,643 6.4% N/A
Dominion Energy............. San Juan Partners,
LLC 11,187 None N/A
San Juan Partners, LLC...... Dominion Energy 64,194 6.4% N/A
Dominion Midwest Energy, Carthage Energy
Inc........................ Services, Inc. 857 None N/A
Dominion Reserves........... Carthage Energy
Services, Inc. 798 None N/A
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
Rate of Date of
Amount Interest Maturity
Name of Debtor Name of Creditor Owed (Note 1) (Note 2)
-------------- ---------------- -------- -------- --------
($000)
<S> <C> <C> <C> <C>
Carthage Energy Services,
Inc........................ Dominion Energy $ 3,771 None N/A
Dominion Energy 1,942 6.4% N/A
Dominion Energy............. Phoenix Dominion
Energy, LLC 987 None N/A
Phoenix Dominion Energy,
LLC........................ Dominion Energy 993 6.4% N/A
Dominion Energy............. Dominion Gas
Processing Michigan,
Inc. 1,741 None N/A
Dominion Gas Processing
Michigan, Inc.............. Dominion Energy 15,466 6.4% N/A
Dominion Energy Canada,
Ltd. ...................... Dominion Energy 16,310 6.4% N/A
Virginia Power
Virginia Power.............. VPS Communications 1,564 None N/A
VP Services 8,310 None N/A
VP Capital Trust I 30 None N/A
VP Capital Trust I 139,175 None N/A
VP Services Energy 22,933 None N/A
VP Fuels.................... Virginia Power 34,656 None N/A
VPS Communications.......... Virginia Power 4,545 None N/A
VP Services................. VP Energy Marketing 23,281 None N/A
Virginia Power 93,814 None N/A
Virginia Power 94,031 None N/A
VP Services Energy.......... VP Services 13,448 None N/A
VP Services 54,458 None N/A
VP Energy Marketing......... VP Services Energy 9,810 None N/A
VP Services 39,672 None N/A
VP Nuclear Services......... VP Services 1,381 None N/A
VP Services 216 None N/A
Consolidated Natural Gas
Consolidated Natural Gas.... CNG Service Company 23,935 None N/A
CNG Transmission 57 None N/A
Virginia Natural Gas 4,125 None N/A
CNG Retail 34 None N/A
CNG Service Company......... CNG 134 None N/A
CNG Service Company 899 None N/A
CNG Transmission 514 None N/A
East Ohio Gas 550 None N/A
Peoples Natural Gas 284 None N/A
Hope Gas 504 None N/A
CNG Retail 68 None N/A
CNG Transmission............ CNG 38,663 None N/A
CNG Service Company 4,374 None N/A
East Ohio Gas 106 None N/A
Peoples Natural Gas 70 None N/A
Hope Gas 771 None N/A
CNG Field Services 1,609 None N/A
CNG Power 207 None N/A
CNG Iroquois................ CNG Transmission 1,431 None N/A
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Rate of Date of
Amount Interest Maturity
Name of Debtor Name of Creditor Owed (Note 1) (Note 2)
-------------- ---------------- ------- -------- --------
($000)
<S> <C> <C> <C> <C>
East Ohio Gas.................. CNG $27,259 None N/A
CNG Service Company 8,146 None N/A
CNG Transmission 8,118 None N/A
Peoples Natural Gas 130 None N/A
Virginia Natural Gas 166 None N/A
Hope Gas 129 None N/A
CNG Retail 1,444 None N/A
CNG Products and
Services 440 None N/A
Peoples Natural Gas............ CNG 13,631 None N/A
CNG Service Company 2,501 None N/A
CNG Transmission 1,977 None N/A
Virginia Natural Gas 36 None N/A
CNG Producing 770 None N/A
CNG Retail 8,435 None N/A
CNG Products and
Services 175 None N/A
Virginia Natural Gas........... CNG 1,263 None N/A
CNG Service Company 1,479 None N/A
CNG Transmission 989 None N/A
East Ohio Gas 35 None N/A
Hope Gas....................... CNG 1,186 None N/A
CNG Service Company 1,148 None N/A
CNG Transmission 2,217 None N/A
East Ohio Gas 107 None N/A
CNG Producing 473 None N/A
CNG Field Services 627 None N/A
CNG Producing.................. CNG 5,407 None N/A
CNG Service Company 2,213 None N/A
Peoples Natural Gas 210 None N/A
Hope Gas 91 None N/A
CNG Field Services 259 None N/A
CNG Pipeline 54 None N/A
CNG Pipeline................... CNG Producing 84 None N/A
CNG Field Services............. CNG 4,000 None N/A
CNG Service Company 46 None N/A
CNG Transmission 3,169 None N/A
East Ohio Gas 1,713 None N/A
CNG Producing 1,732 None N/A
CNG Retail 146 None N/A
CNG Retail..................... CNG Service Company 330 None N/A
East Ohio Gas 2,480 None N/A
Peoples Natural Gas 1,272 None N/A
CNG Power Services 1,659 None N/A
CNG Field Services 4,370 None N/A
CNG Power...................... CNG Service Company 25 None N/A
CNG Transmission 83 None N/A
CNG Bear Mountain 35 None N/A
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
Rate of Date of
Amount Interest Maturity
Name of Debtor Name of Creditor Owed (Note 1) (Note 2)
-------------- ---------------- ------ -------- --------
($000)
<S> <C> <C> <C> <C>
CNG International.............. CNG 232 None N/A
CNG Service Company 95 None N/A
CNG Cayman Three............... CNG International 26 None N/A
CNG Products and Services...... CNG Service Company 25 None N/A
East Ohio Gas 111 None N/A
Peoples Natural Gas 32 None N/A
CNG Retail 424 None N/A
</TABLE>
- --------
Notes
(1) Rates of interest herein represent the average December 1999 rate and are
generally based on LIBOR plus a spread.
(2)Intercompany payables and receivables are generally billed and settled
monthly.
The following table provides information on the investments and borrowings
of participants in the CNG System Money Pool (Pool) at December 31, 1999. The
Pool is administered by CNG Service Company on behalf of the participants. The
operation of the Pool was authorized by the SEC in the Act Release Nos. 24128,
24399, 26021 and 26742. (File No. 70-7258):
<TABLE>
<CAPTION>
Amount Interest Date of
Debtor Creditor Owed Rate Maturity
------ -------- -------- -------- --------
($000)
<S> <C> <C> <C> <C>
Consolidated Natural
CNG Service Company....... Gas $616,656 (Note 1) (Note 3)
CNG Iroquois 10,757 (Note 1) (Note 3)
CNG Producing 12,139 (Note 1) (Note 3)
CNG Pipeline 1,145 (Note 1) (Note 3)
Consolidated LNG 1,012 (Note 1) (Note 3)
CNG Research 71 (Note 1) (Note 3)
CNG Coal 3,718 (Note 1) (Note 3)
CNG Products and Services 536 (Note 1) (Note 3)
CNG Technologies 145 (Note 1) (Note 3)
CNG Power 4,664 (Note 1) (Note 3)
CNG Market Center Services 947 (Note 1) (Note 3)
CNG Transmission.......... CNG Service Company 46,976 (Note 2) (Note 4)
East Ohio Gas............. CNG Service Company 288,170 (Note 2) (Note 4)
Peoples Natural Gas....... CNG Service Company 94,076 (Note 2) (Note 4)
Virginia Natural Gas...... CNG Service Company 47,117 (Note 2) (Note 4)
Hope Gas.................. CNG Service Company 29,934 (Note 2) (Note 4)
CNG Producing............. CNG Service Company 1,577 (Note 2) (Note 4)
CNG Power Services........ CNG Service Company 3,434 (Note 2) (Note 4)
CNG International......... CNG Service Company 9,890 (Note 2) (Note 4)
CNG Field Services........ CNG Service Company 2,709 (Note 2) (Note 4)
CNG Main Pass............. CNG Service Company 25,878 (Note 2) (Note 4)
CNG Oil Gathering......... CNG Service Company 11,496 (Note 2) (Note 4)
CNG Retail................ CNG Service Company 27,811 (Note 2) (Note 4)
</TABLE>
- --------
Notes:
(1) Participants investing in the Pool share in the interest earned on the
Pool's investments on a basis proportionate to their investment.
(2) Participants borrowing from the Pool pay interest generally at a rate
equivalent to the effective cost of short-term borrowings to Consolidated
Natural Gas.
32
<PAGE>
(3) Participants may withdraw their investments in the Pool at any time.
(4) Borrowings from the Pool are payable on demand, and may be prepaid at any
time without premium or penalty.
(b) Debts owed to others at December 31, 1999 (millions, except interest
rates):
<TABLE>
<CAPTION>
Amount Rate of Maturity
Debtor Creditor Owed Interest Date
------ -------- ------ -------- --------
<S> <C> <C> <C> <C>
Dominion................................ Various $ 300 Variable Various
Virginia Power.......................... Various 422 5.7-10.0 2000-2008
Virginia Power.......................... Various 375 6.7-7.1 2004-2008
Dominion UK............................. Bayerische 54 Variable 2000-2007
Landesbank
Girozentrale
Dominion Energy......................... Various 303 5.6-6.0 2002, 2005
Various 363 5.7-6.7 2001
Various 39 4.5-6.6 2000-2024
Various 3 5.4 Various
Dominion Capital........................ Various 96 6.1-7.6 2000-2003
Various 159 6.5-12.1 2000-2012
Various 48 6.2 2000
Various 44 6.2 2000
Various 298 6.5 2002-2006
Various 64 5.6 Various
Various 1,492 5.9 Various
Consolidated Natural Gas................ Various 400 7.25 2004
Various 200 6 2010
Various 300 6.8 2027
Various 150 6.625 2008
Various 150 6.875 2026
Various 150 7.375 2005
Various 150 6.625 2013
Various 150 5.75 2003
Various 129 8.75 2019
</TABLE>
PRINCIPAL LEASES
12. Describe briefly the principal features of each lease (omitting oil and
gas leases) to which the registrant or any subsidiary company thereof is a
party, which involves rental at an annual rate of more than $50,000 or an
amount exceeding 1% of the annual gross operating revenue of such party to
said lease during its last fiscal year (whichever of such sums is the lesser)
but not including any leases involving rental at a rate of less than $5,000
per year.
Dominion and CNG paid approximately $39.9 million and $35.2 million,
respectively, related to routine operating leases in 1999. Such leases
primarily related to land and buildings, office space, office furniture and
equipment, computer equipment, transportation, pipeline facilities and other
miscellaneous items used in operations. Certain of these leases are used by
several Dominion entities with costs being shared in accordance with state
regulations, as applicable.
Dominion owns Virginia Power's headquarters building and leases it to
Virginia Power under a capital lease with annual rentals approximating $3
million. This lease expires in 2006 and was entered into at terms approved by
the Virginia Commission. Virginia Power paid approximately $8.7 million under
other capital leases in 1999, primarily related to computer and related
equipment.
33
<PAGE>
Virginia Power's subsidiary, VPS Communications, leases fiber optic capacity
from Virginia Power at rates subject to the approval of the Virginia
Commission. Such lease payments approximated $600,000 in 1999. VPS
Communications leases fiber optic capacity, including the capacity leased from
Virginia Power, to other parties. Activity under these leases approximated
$3.4 million in 1999.
In addition, Virginia Power serves as the lessor in various capital leases
which resulted in receipts of approximately $2.4 million in 1999. Such leases
primarily related to land and buildings, office space and certain energy
services projects.
CNG Transmission leases from CNG Field Services (formerly CNG Storage
Service Company) approximately 9 billion cubic feet of natural gas that serves
as a portion of the base gas required for CNG Transmission to operate the
North Summit Storage Pool in Fayette County, Pennsylvania. Such lease payments
approximated $3.5 million in 1999. This lease expires in 2011. (See Act
Release No. 25311, File No. 70-7729).
SECURITIES SOLD
13. If, during the last five years, the registrant or any subsidiary company
thereof has issued, sold, or exchanged either publicly or privately any
securities having a principal amount, par, stated or declared value exceeding
$1,000,000 or exceeding an amount equal to 10% of the total liabilities as
shown by the balance sheet of issuer at the time of such issue (whichever of
such sums is the lesser), give the following information with respect to each
such issue or sale:
By permission of the Staff, information required to be disclosed pursuant to
this item is not set forth herein.
AGREEMENT FOR FUTURE DISTRIBUTION OF SECURITIES
14. (a) Summarize the terms of any existing agreement to which the
registrant or any associate or affiliate company thereof is a party or in
which any such company has a beneficial interest with respect to future
distribution of securities of the registrant or of any subsidiary.
Certain information regarding agreements with respect to future distribution
of securities of DRI and its subsidiaries is set forth in the following
documents, the applicable portions of which are hereby incorporated herein by
reference: Items B.1 through B.3 of the Application/Declaration of DRI and CNG
on Form U-1, as amended in File No. 70-9517; Items E.1 through E.4 of the
Application/Declaration of DRI and CNG on Form U-1, as amended in File No. 70-
9517; and the Registration Statement of DRI on Form S-3 (File No. 333-93187)
with respect to the registration of $4.5 billion of senior debt securities,
junior subordinated debentures, trust preferred securities and related
guarantee, common stock, preferred stock, stock purchase contracts and stock
purchase units and the Registration Statement of CNG on Form S-3 (File No.
333-92765) with respect to $1 billion of debt securities.
Since the closing of Dominion's merger with CNG, the following financings
have been executed by Dominion or its affiliates:
1. Virginia Electric and Power Company's issuance, on March 22, 2000, of
$20 million in aggregate principal amount of its Series F, Medium-Term
Notes, bearing interest at a variable rate of LIBOR plus 15 basis
points, maturing March 22, 2002.
2. Virginia Electric and Power Company's issuance, on March 22, 2000, of
$200 million in aggregate principal amount of its Series G, Medium-Term
Notes, bearing interest at a variable rate of LIBOR plus 15 basis
points, maturing March 22, 2002.
34
<PAGE>
The following financing activities are expected during the next 12 months,
however, the specific timing, execution and choice of security will be based
upon actual market conditions and cash flow needs of the companies:
1. Replacement of approximately $3.1 billion in aggregate principal of
Dominion's short-term bridge financing for the acquisition of CNG. The
following securities are contemplated for execution based upon then-
prevailing market conditions:
. $700 million in aggregate principal amount of senior notes with a
maturity of 10 years
. $700 million in aggregate principal amount of senior notes with a
maturity of 5 years
. $400 million in aggregate principal amount of senior notes with a
maturity of 3 years
. $700 million in aggregate principal amount of synthetic put bonds
effecting a security with a maturity of 10 years or more and a
mandatory put option at 3 years or less
. $250 million in aggregate principal amount of trust preferred
securities
. $350 million in aggregate principal amount of mandatory convertible
securities
The authority to issue these proposed securities is provided under the
SEC Registration Statement, File No. 333-93187 referred to above.
2. Replacement of $150 million of mandatory debt and preferred stock
maturities and approximately $250 million of additional capital
requirements, not currently expected to be covered through internal cash
flows, of Virginia Electric and Power Company. Authority to be requested
under a new SEC Registration Statement to be filed during the 2nd
Quarter 2000.
3. Potentially replace a portion of CNG's short-term, commercial paper with
long-term debt securities based upon then-prevailing market conditions.
Authority provided under SEC Registration Statement, File No. 333-92765
referred to above.
(b) Describe briefly the nature of any financial interest (other than the
ownership of securities acquired as a dealer for the purpose of resale)
which any person with whom such agreement exists, has in the registrant or
in any associate or affiliate company thereof.
See response to 14 (a) above.
35
<PAGE>
TWENTY LARGEST HOLDERS OF CAPITAL STOCKS
15. (a) As of a recent date (indicating such date for each class) give the
following information with respect to the holders of each class of stock
and/or certificates of beneficial interest of the registrant:
Dominion shares can be held by certificate, through a dividend
reinvestment plan, through employee investment plans, through investment
companies and other street name and nominee accounts. Dominion has no way
to determine, without an unreasonable amount of time and money, the number
of shares held by each holder of beneficial interest. Therefore, Dominion
is only able to provide information as to shares registered on its books.
The following table lists Dominion's twenty largest registered
shareholders on its books at the close of business on March 1, 2000:
<TABLE>
<CAPTION>
Numbers of % of
Shareholder and Address Shares Held Outstanding
----------------------- ----------- -----------
<S> <C> <C>
Cede................................................. 172,039,308 72.18
Box 20 Bowling Green Station
New York NY 10004
Dresco............................................... 31,089,520 13.04
PO Box 26532
Richmond VA 23261
Trustees ESOP CNG.................................... 359,612 .15
625 Liberty Avenue
Pittsburgh PA 15222
Thomas E. Capps...................................... 302,581 .13
PO Box 23532
Richmond VA 23261
Thomas F. Farrell II................................. 140,162 .06
9019 Norwick Road
Richmond VA 23229
Edgar M. Roach, Jr................................... 139,112 .06
3142 Monument Avenue
Richmond VA 23221
George A. Davidson, Jr............................... 103,938 .04
420 Woodland Road
Sewickley PA 15143
Thomas N. Chewning................................... 99,769 .04
4800 Lockgreen Circle
Richmond VA 23226
James Patrick O'Hanlon............................... 99,235 .04
5968 Old Greenway Road
Glen Allen VA 23059
James L. Trueheart................................... 83,798 .04
4255 Cheyenne Road
Richmond VA 23235
James L. Sanderlin................................... 71,243 .03
1810 Fox Downs Lane
Oilville VA 23129
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
Numbers of % of
Shareholder and Address Shares Held Outstanding
----------------------- ----------- -----------
<S> <C> <C>
James F. Stutts...................................... 59,269 .02
2561 Maidens Road
Maidens VA 23102
Graham Scott Hetzer.................................. 52,376 .02
118 Paxton Road
Richmond VA 23226
Gibson Equipment Co., Inc............................ 52,252 .02
981 Scott Street
Norfolk VA 23502
Godfrey E. Lake, Jr.................................. 51,566 .02
3212 Swanhollow Way
Richmond 23233
E. Wayne Harrell..................................... 50,783 .02
25966 Independence Road
Unionville VA 22567
William C. Hall, Jr.................................. 42,723 .02
28 Old Mill Road
Richmond VA 23226
Edward J. Rivas, Jr.................................. 42,708 .02
14322 Regatta Point Road
Midlothian VA 23112
Robert E. Rigsby..................................... 41,713 .02
9806 Kingsbridge Road
Richmond VA 23233
Malcolm G. Deacon, Jr................................ 40,019 .02
13512 Castleway Road
Midlothian VA 23113
Total.............................................. 204,961,689 85.99
</TABLE>
(b) Number of shareholders of record each holding 1,000 shares or more, and
aggregate number of shares so held.
On March 1, 2000, there were 13,571 shareholders holding 1,000 shares or
more. The aggregate number of shares held by these shareholders was
206,160,720.
(c) Number of shareholders of record each holding less than 1,000 shares and
the aggregate number of shares so held.
On March 1, 2000, there were 187,434 shareholders holding less than 1,000
shares. The aggregate number of shares held by these shareholders was
29,437,910.
OFFICERS, DIRECTORS AND EMPLOYEES
16. (a) Positions and Compensation of Officers and Directors. Give name and
address of each director and officer (including any person who performs
similar functions) of the registrant, of each subsidiary company thereof, and
of each mutual service company which is a member of the same holding company
system. Opposite the name of each such individual give the title of every such
position held by him and briefly describe each other employment of such
individual by each such company.
37
<PAGE>
State the present rate of compensation on an annual basis for each director
whose aggregate compensation from all such companies exceeds $1,000 per year,
and of each officer whose aggregate compensation from such companies is at the
rate of $20,000 or more per year. In the event any officer devotes only part
of his time to a company or companies in the system this fact should be
indicated by appropriate footnote. Such compensation for such part time should
be computed on an annual rate and if such annual rate exceeds $20,000 the
actual compensation as well as annual rate should also be reported.
(b) Compensation of Certain Employees. As to regular employees of such
companies who are not directors or officers of any of them, list the name,
address, and aggregate annual rate of compensation of all those who receive
$20,000 or more per year from all such companies.
(c) Indebtedness to System Companies. As to every such director, trustee or
officer as aforesaid, who is indebted to any one of such companies, or on
whose behalf any such company has now outstanding and effective any obligation
to assume or guarantee payment of any indebtedness to another, and whose total
direct and contingent liability to such company exceeds the sum of $1,000,
give the name of such director, trustee, or officer, the name of such company,
and describe briefly the nature and amount of such direct and contingent
obligations.
(d) Contracts. If any such director, trustee, or officer as aforesaid:
(1) has an existing contract with any such company (exclusive of an
employment contract which provides for no compensation other than that
set forth in paragraph (a) of this Item); or,
(2) either individually or together with the members of his immediate
family, owns, directly or indirectly, 5% or more of the voting
securities of any third person with whom any such company has an
existing contract; or
(3) has any other beneficial interest in an existing contract to which any
such company is a party; describe briefly the nature of such contract,
the names of the parties thereto, the terms thereof, and the interest
of such officer, trustee, or director therein.
By permission of the Staff, the information required to be disclosed in Item
16(a) through (d) has not been included. However, this information can be
found in Dominion's 2000 Proxy Statement, dated March 16, 2000, File No. 1-
8489, filed as Exhibit F-4 hereto, in connection with its 2000 Annual Meeting
of Shareholders or Dominion's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 (File No. 1-8489), filed as Exhibit F-5 hereto, and
Virginia Electric and Power Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 (File No. 1-2255), filed as Exhibit F-2
hereto, which reports are hereby incorporated by reference herein.
(e) Banking Connections. If any such director, trustee, or officer is an
executive officer, director, partner, appointee, or representative of any
bank, trust company, investment banker, or banking association or firm, or of
any corporation a majority of whose stock having the unrestricted right to
vote for the election of directors, is owned by any bank, trust company,
investment banker, or banking association or firm, state the name of such
director or officer, describe briefly such other positions held by him and
indicate which of the rules under Section 17(c) authorizes the registrant and
subsidiary companies of which he is a director or officer to retain him in
such capacity.
38
<PAGE>
Information concerning all officers and directors of Dominion who have
financial connections within the provisions of Section 17(c) of the Act as of
March 1, 2000, follows:
<TABLE>
<CAPTION>
Position Held
Name of Officer or Name and Location of Financial in Financial Applicable
Director Institution Institution Exemption Rule
------------------ ------------------------------ ------------- --------------
<S> <C> <C> <C>
John B. Bernhardt....... Resource Bank Shares Director 70(a)
Virginia Beach, Virginia
George A. Davidson,
Jr..................... PNC Bank Corp. Director 70(a)(c)(e)(f)
Pittsburgh, Pennsylvania
Benjamin J. Lambert,
III.................... Consolidated Bank and Trust Company Director 70(a)
Richmond, Virginia
Steven A. Minter........ KeyCorp Director 70(a)
Cleveland, Ohio
Frank S. Royal.......... SunTrust Banks, Inc. Director 70(b)
Atlanta, Georgia
</TABLE>
INTERESTS OF TRUSTEES IN SYSTEM COMPANIES
17. Describe briefly the nature of any substantial interest which any
trustee under indentures executed in connection with any outstanding issue of
securities of the registrant or any subsidiary thereof, has in either the
registrant or such subsidiary, and any claim which any such trustee may have
against registrant or any subsidiary; provided, however, that it shall not be
necessary to include in such description any evidences of indebtedness owned
by such trustee which were issued pursuant to such an indenture.
To the best knowledge of Dominion's management, there is no such interest.
SERVICE, SALES AND CONSTRUCTION CONTRACTS
18. As to each service, sales, or construction contract (as defined in
paragraphs (19) to (21) of Section 2(a) of the Act) which the registrant and
any subsidiary company thereof has had in effect within the last three months,
describe briefly the nature of such contract, the name and address of the
parties thereto, the dates of execution and expiration, and the compensation
to be paid thereunder. Attach typical forms of any such contracts as an
exhibit to this registration statement. If the other party to any such
contract is a mutual service company or a subsidiary service company which is
a member of the same holding company system as the registrant and as to which
the Commission has made a favorable finding in accordance with Rule 13-22,
specific reference may be made to the application or declaration filed by such
company pursuant to Rule 13-22 and no further details need be given as to such
contracts.
The affiliate contracts listed below are attached as Exhibits H-1 through H-
31 hereto:
<TABLE>
<CAPTION>
Exhibit Description
-------- -----------
<C> <C> <S>
H-1 Form of Service Agreement between Dominion Resources Services,
Inc./Consolidated Natural Gas Service Company, Inc. and
affiliates listed in Exhibit H-1, dated January 28, 2000 (filed
as Exhibit K-1.1 to the Form U-1 Application, as amended, in
File No. 70-09477).
H-2 Service Agreement between Dominion Resources Services,
Inc./Consolidated Natural Gas Service Company, Inc. and Virginia
Electric and Power Company dated January 1, 2000 (filed in the
form of Exhibit K-1.1 to the Form U-1 Application, as amended, in
File No. 70-09477).
H-3 Support Agreement between Virginia Electric and Power Company and
Dominion Resources Services, Inc./Consolidated Natural Gas
Service Company, Inc. dated January 1, 2000 (filed as Exhibit K-
1.2 to the Form U-1 Application, as amended, in File No.
70-09477).
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description
-------- -----------
<C> <C> <S>
H-4 Affiliated Transaction Agreement between CNG Transmission
(formerly Consolidated Gas Supply Corporation) (Service
Provider) and CNG Producing (Receiving Company) dated January
1, 1981 for management services. Contract is terminable on 30-
days notice. Services to be provided at cost.
H-5 Call Center Services Agreement between CNG Retail Services
(Service Provider) and Dominion Resources Services, Inc.
(Receiving Company) dated March 1, 2000 for the provision of
call center services. Contract is for initial one-year term
commencing on March 15, 2000 and is renewable on an annual
basis. CNG Retail is to be compensated at $20 per hour.
H-6 Form of Ancillary Service Agreement between affiliates listed
in Exhibit H-6 for the provision of services listed therein
(filed as Exhibit K-1.3 to the Form U-1 Application, as
amended, in File No. 70-09477). Contract is terminable on 60
days notice. Services will be provided at cost.
H-7 Agreement between Virginia Electric and Power Company and
Virginia Power Fuel Corporation dated June 30, 1995 for
purchase and sale of enriched uranium. Contract expires
September 28, 2014. Services to be provided at cost.
H-8 Agreement between Virginia Electric and Power Company and VPS
Communications, Inc. dated September 2, 1997 for provision of
certain administrative and telecommunications services.
Contract is terminable on 90-days notice. Services to be
provided at cost.
H-9 Affiliate Services Agreement between Virginia Electric and
Power Company and Virginia Power Services, Inc. dated September
3, 1997 for provision of administrative services (together with
first and second amendments each dated October 30, 1998 and
third amendment dated October 1, 1999.) Contract is terminable
on 90-days notice. Services to be provided at cost.
H-10 Agreement between Virginia Electric and Power Company and
Virginia Power Services Energy Corp., Inc. dated October 30,
1998 providing for fuel management and associated risk
management services. Contract is terminable on 90-days notice.
Services to be provided at cost.
H-11 Operating Agreement between Virginia Electric and Power Company
and Virginia Power Property, Inc. dated December 31, 1999 for
management and use of certain real property. Contract is
terminable on 90-days notice. Services to be provided at cost.
H-12 Fuel Agency and Service Agreement dated October 30, 1998
between Virginia Power Services Energy Corp., Inc. and Virginia
Power Energy Marketing, Inc. providing for fuel management and
associated risk management services. Contract is terminable on
60-days notice. Services to be provided at cost.
H-13 Microwave Service Agreement between CNG Transmission
Corporation (as Service Provider) and Consolidated Natural Gas
Company, Consolidated Natural Gas Service Company, Inc., The
Peoples Natural Gas Company and CNG Producing Company,
effective as of January 1, 1991 for the operation and
maintenance of a microwave system. Contract continues in effect
until terminated by either party. Services to be provided at
cost, allocated among parties based on usage.
H-14 Agreement between CNG Producing Company (as Service Provider)
and CNG Transmission Corporation (formerly Consolidated Gas
Supply Corporation) dated January 1, 1981 for the provision of
certain operating and administrative services. Contract is
terminable on 30-days notice. Services to be provided at cost.
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description
-------- -----------
<C> <C> <S>
H-15 Agreement between CNG Producing Company (as Service Provider) and
CNG Trading Company dated August 1, 1990 for the provision of
certain operating and administrative services. Contract is
terminable upon 30-days notice. Services to be provided at cost.
H-16 Agreement between CNG Transmission Corporation (as Service
Provider) and CNG Iroquois, Inc. effective as of January 1, 1991
for the provision of certain operating and administrative
services. Contract is terminable on 60-days notice. Services to
be provided at cost.
H-17 Agreement between CNG Transmission Corporation (as Service
Provider) and CNG Storage Service Company, effective as of July
1, 1991 for the provision of certain operating and administrative
services. Contract is terminable on 60-days notice. Services to
be provided at cost.
H-18 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, Inc.,
effective as of January 1, 1992 for the provision of certain
operating and administrative services. Contract is terminable on
60-days notice. Services to be provided at cost.
H-19 Agreement between CNG Gas Services Corporation (as Service
Provider) and CNG Energy Company effective as of January 1, 1994
for the provision of certain operating and administrative
services. Contract is terminable upon 30-days notice. Services to
be provided at cost.
H-20 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, Inc.
dated November 1, 1993 for the provision of certain operating and
related services associated with maintaining the service
company's fuel cell power plant. Contract is terminable on 60-
days notice. Services to be provided at cost.
H-21 Agreement between CNG Gas Services Corporation (as Service
Provider) and CNG Producing Company effective as of February 1,
1993 for the provision of certain operating and administrative
services. Contract is terminable on 60-days notice. Services to
be provided at cost.
H-22 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, Inc.
effective January 1, 1995 for the provision of certain
administrative services relating to medical and associated
services. Contract is terminable on 60-days notice. Services to
be provided at cost.
H-23 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, Inc.
effective January 1, 1995 for the provision of certain
administrative and related services associated with mail
services. Contract is terminable on 60-days notice. Services to
be provided at cost.
H-24 Agreement between The Peoples Natural Gas Company (as Service
Provider) and The East Ohio Gas Company, Virginia Natural Gas,
Inc., Hope Gas, Inc. and West Ohio Gas Company effective as of
June 1, 1995 for the provision of certain marketing-related
services associated with natural gas vehicles and gas-fired
appliances. Contract is terminable on 60-days notice. Services to
be provided at cost.
H-25 Agreement between CNG Producing Company (as Service Provider) and
Consolidated Natural Gas Service Company effective as of January
1, 1995 for the provision of certain information services.
Contract renews on a year-to-year basis unless terminated prior
to December 1 of the applicable renewal term. CNG Service Company
is to pay a monthly amount for information services equal to a
portion of the Total Applicable IS Cost allocated to the service
company in accordance with the terms of the Agreement.
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description
-------- -----------
<C> <C> <S>
H-26 Agreement between The East Ohio Company (as Service Provider) and
The Peoples Natural Gas Company, Virginia Natural Gas, Inc., Hope
Gas, Inc., and West Ohio Gas Company effective as of January 1,
1996, for the provision of marketing communications and
advertising services. Contract is terminable on 60-days notice.
Services to be provided at cost.
H-27 Agreement between The Peoples Natural Gas Company (as Service
Provider) and CNG Products and Services, Inc., effective as of
January 1, 1996, for the provision of service line repair and
replacement services. Contract is terminable on 60-days notice.
Services to be provided at cost.
H-28 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, Inc.,
effective as of November 1, 1996, for the provision of certain
managerial and administrative services. Contract is terminable on
60-days notice. Services to be provided at cost.
H-29 Agreement between CNG Products and Services, Inc. (as Service
Provider) and CNG Retail Services Corporation, effective as of
February 1, 1997, for the provision of certain administrative and
marketing services. Contract is terminable on 60-days notice.
Services to be provided at cost.
H-30 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, effective
as of March 1, 1996, for the provision of certain floor space and
office supplies. Contract is terminable on 60-days notice.
Services to be provided at cost.
H-31 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, effective
as of March 1, 1996, for the provision of certain floor space and
office supplies to enable third-party contractors to conduct
information technology services. Contract is terminable on 60-
days notice. Services to be provided at cost.
</TABLE>
LITIGATION
19. Describe briefly any existing litigation of the following descriptions,
to which the registrant or any subsidiary company thereof is a party, or of
which the property of the registrant or any such subsidiary company is the
subject, including the names of the parties and the court in which such
litigation is pending:
(1) Proceedings to enforce or to restrain enforcement of any order of a
State commission or other governmental agency;
(2) Proceedings involving any franchise claimed by any such company;
(3) Proceedings between any such company and any holder, in his capacity as
such, of any funded indebtedness or capital stock issued, or guaranteed
by such company, or between any such company and any officer thereof;
(4) Proceedings in which any such company sues in its capacity as owner of
capital stock or funded indebtedness issued or guaranteed by any other
company;
(5) Each other proceeding in which the matter in controversy, exclusive of
interest and costs, exceeds an amount equal to 2% of the debit accounts
shown on the most recent balance sheet of such company.
From time to time, Dominion and its subsidiaries are alleged to be in
violation or in default under orders, statutes, rules or regulations relating
to the environment, compliance plans imposed upon or agreed to by us, or
permits issued by various local, state and federal agencies for the
construction or operation of facilities. From
42
<PAGE>
time to time, there may be administrative proceedings on these matters
pending. In addition, in the normal course of business, Dominion and its
subsidiaries are involved in various legal proceedings. Management believes
that the ultimate resolution of these proceedings will not have a material
adverse effect on the company's financial position, liquidity or results of
operations.
In April 1999, Virginia Power was notified by the Department of Justice of
alleged noncompliance with the EPA's oil spill prevention, control and
countermeasures (SPCC) plans and facility response plan (FRP) requirements at
one of its power stations. If, in a legal proceeding, such instances of
noncompliance are deemed to have occurred, Virginia Power may be required to
remedy any alleged deficiencies and pay civil penalties. Settlement of this
matter is currently in negotiation and is not expected to have a material
impact on Virginia Power's financial condition or results of operations.
In August 1999, Virginia Power identified matters at certain other power
stations that the EPA might view as not in compliance with the SPCC and FRP
requirements. Virginia Power reported these matters to the EPA and in December
1999 submitted revised FRP and SPCC plans. Presently, the EPA has not assessed
any penalties against Virginia Power pending its review of Virginia Power's
disclosure information. Future resolution of these matters is not expected to
have a material impact on Virginia Power's financial condition or results of
operations.
In November 1999 and September 1999, Virginia Power received notices from
the Attorney Generals of Connecticut and New York, respectively, of their
intention to file suit against Virginia Power for alleged violations of the
Clean Air Act. The notices question whether modifications at certain Virginia
Power generating facilities were properly permitted under the Clean Air Act
and allege that emissions from these facilities have damaged public health and
the environment in the Northeast. To date, no suits have been filed. Virginia
Power believes that it is one of a number of companies with fossil fuel power
generating stations in the southeast and central U.S. to have received such
notifications. Virginia Power believes that it has obtained the permits
necessary in connection with its generating facilities and that any suits
filed by the Attorney Generals will not have a material impact on its
financial condition or results of operations.
In August 1990, CNG Transmission entered into a Consent Order and Agreement
with the Commonwealth of Pennsylvania Department of Environment Protection
(DEP) in which CNG Transmission has agreed with the DEP's determination of
certain violations of the Pennsylvania Solid Waste Management Act, the
Pennsylvania Clean Streams law and the rules and regulations promulgated
thereunder. No civil penalties have been assessed. Pursuant to the Order and
Agreement, CNG Transmission continues to perform sampling, testing and
analysis, and conducts a program of remediation at some of its Pennsylvania
facilities. Total remediation costs in connection with these sites and the
Order and Agreement are not expected to be material with respect to CNG's
financial position, results of operations or cash flows. CNG has recognized an
estimated liability amounting to $6.7 million at December 1999, for future
costs expected to be incurred to remediate or mitigate hazardous substances at
these sites and at facilities covered by the Order and Agreement.
The DEP has proposed a penalty of $380,000 related to a hydrocarbon spill in
February 1998 at a CNG Transmission facility in Aliquippa, Beaver County,
Pennsylvania. CNG Transmission has agreed to settle the matter by contributing
$280,000 to a Supplemental Environmental Program (SEP) and $100,000 directly
to the DEP. Under the SEP, several environmental programs will be undertaken
which are intended to benefit the Conversation District of Beaver County,
Pennsylvania.
In April 1999, CNG was served with a purported Class Action Complaint, Civil
Action No. 17114-NC, styled Gerold Garfinkel v. Raymond E. Galvin, Paul E.
Lego, Margaret A. McKenna, William S. Barrack, Jr., Steven A. Minter, J. W.
Connolly, George A. Davidson, Jr., Richard P. Simmons, and Consolidated
Natural Gas Company. The Complaint was filed in the Delaware Court of Chancery
in April 1999. The Complaint seeks injunctive relief in the form of an order
to the individual Board members to sell CNG for the highest value to the
shareholders, an accounting of any damages resulting from any failure to sell
it for the highest value, a determination with respect to the reasonableness
of the break-up fee in the agreement with Dominion and other miscellaneous
relief. The Complaint also seeks an award of costs and attorneys' fees.
Several additional
43
<PAGE>
purported Class Action Complaints against CNG and its directors seeking
essentially the same relief have been combined with this action. CNG has moved
to dismiss. In February 2000, the plaintiff filed a status report indicating
they will circulate a stipulation for dismissal without prejudice.
A qui tam action (one in which the plaintiff sues for the government as well
as for itself, and gets to keep part of the recovery) was brought by Jack
Grynberg, an oil and gas entrepreneur, against a major part of the gas
industry, including CNG and several of its subsidiaries. The complaint, which
was filed in July 1997, was under seal pending Department of Justice review.
The Department of Justice declined to intervene and the seal was lifted in May
1999. CNG was served in the Western District of Louisiana in May 1999. The
suit alleges fraudulent mismeasurement of gas volumes and underreporting of
gas royalties from gas production taken from federal leases. The cases have
been removed to the Eastern District of Wyoming, where a motion to dismiss is
pending.
A class action was filed by Quinque Operating Co. and others against
approximately 300 defendants, including CNG and several of its subsidiaries,
in Stevens County, Kansas. The complaint, which was served on CNG and its
subsidiaries in September 1999, alleged fraud, misrepresentation, conversion
and assorted other claims, in the measurement and payment of gas royalties
from privately held gas leases. The cases have been consolidated with the
Grynberg case and have been stayed pending the ruling on the motion to
dismiss.
CNG believes the above complaints to be without merit and believes that the
ultimate resolution of the issues will not have a material adverse effect on
CNG's financial position, results of operations, or cash flows.
EXHIBITS
Exhibit A. Furnish a corporate chart showing graphically relationships
existing between the registrant and all subsidiary companies thereof as of the
same date as the information furnished in the answer to Item 8. The chart
should show the percentage of each class voting securities of each subsidiary
owned by the registrant and by each subsidiary company.
See Exhibit A hereto.
Exhibit B. With respect to the registrant and each subsidiary company
thereof, furnish a copy of the charter, articles of incorporation, trust
agreement, voting trust agreement, or other fundamental document of
organization, and a copy of its bylaws, rules, and regulations, or other
instruments corresponding thereto. If such documents do not set forth fully
the rights, priorities, and preferences of the holders of each class of
capital stock described in the answer to Item 8(b) and those of the holders of
any warrants, options or other securities described in the answer to Item
8(d), and of any limitations on such rights, there shall also be included a
copy of each certificate, resolution, or other document establishing or
defining such rights and limitations. Each such document shall be in the
amended form effective at the date of filing the registration statement or
shall be accompanied by copies of any amendments to it then in effect.
The Articles of Incorporation and Bylaws, as amended for Dominion and its
first tier subsidiaries and certain operating companies listed below are filed
as Exhibit B-1 through Exhibit B-18 hereto:
<TABLE>
<CAPTION>
Exhibit Company
------- -------
<C> <S>
B-1 Dominion Resources, Inc.
(a) Articles of Incorporation, as amended and restated, effective
August 9, 1999.
(b) Bylaws, as amended, effective October 15, 1999.
B-2 Dominion Capital, Inc.
(a) Articles of Incorporation, as amended and restated, effective July
28, 1986.
(b) Bylaws, as amended, effective October 15, 1999.
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
Exhibit Company
------- -------
<C> <S>
B-3 Dominion Energy, Inc.
(a) Articles of Restatement, effective April 14, 1989.
(b) Bylaws, as amended, effective October 15, 1999.
B-4 Dominion Exploration & Production, Inc.
(a) Certificate of Incorporation, as amended, effective April 12,
2000.
(b) By-laws, as amended, effective April 12, 2000.
B-5 Dominion Transmission, Inc.
(a) Certificate of Incorporation, as amended, effective April 11,
2000.
(b) Bylaws, as amended, effective April 11, 2000.
B-6 Dominion Field Services, Inc.
(a) Certificate of Incorporation, as amended, effective April 1, 2000.
(b) Bylaws, as amended, effective April 1, 2000.
B-7 Dominion Generation, Inc.
(a) Articles of Incorporation, dated May 1, 1999.
(b) Bylaws, as amended, effective October 15, 1999.
B-8 Dominion Resources Services, Inc.
(a) Articles of Incorporation dated, October 14, 1999.
(b) Bylaws, effective October 14, 1999.
B-9 Dominion U.K. Holding, Inc.
(a) Articles of Incorporation effective December 18, 1996.
(b) Bylaws, as amended and restated, effective July 8, 1997.
B-10 Consolidated Natural Gas Company
(a) Certificate of Incorporation, as amended, effective January 28,
2000.
(b) Bylaws, as amended, effective January 28, 2000.
B-11 Consolidated Natural Gas Service Company
(a) Certificate of Incorporation, as amended November 30, 1982.
(b) Bylaws, as last amended March 1, 1993.
B-12 CNG International Corporation
(a) Certificate of Incorporation, effective January 22, 1996.
(b) Bylaws, effective August 1, 1996.
B-13 CNG Retail Services Corporation
(a) Certificate of Incorporation, effective January 30, 1997.
(b) Bylaws, effective February 10, 1997.
B-14 The East Ohio Gas Company
(a) Articles of Incorporation, as amended, effective June 17, 1993.
(b) Regulations, as amended, effective September 15, 1999.
B-15 Hope Gas, Inc.
(a) Articles of Incorporation, as amended, effective October 13, 1994.
(b) Bylaws, as amended, effective June 1, 1998.
B-16 The Peoples Natural Gas Company
(a) Articles of Incorporation, as amended, effective September 2,
1993.
(b) Bylaws, as amended, effective March 15, 1990.
B-17 Virginia Electric and Power Company
(a) Articles of Incorporation, as amended and restated, effective May
6, 1999.
(b) Bylaws, as amended and restated, effective January 21, 2000.
B-18 Virginia Natural Gas, Inc.
(a) Articles of Incorporation, as amended, effective December 26,
1990.
(b) Bylaws, as amended, effective April 26, 1991.
</TABLE>
45
<PAGE>
Exhibit C. (a) With respect to each class of funded debt shown in the
answers to Items 8(a) and 8(c), submit a copy of the indenture or other
fundamental document defining the rights of the holders of such security, and
a copy of each contract or other instrument evidencing the liability of the
registrant or a subsidiary company thereof as endorser or guarantor of such
security. Include a copy of each amendment of such document and of each
supplemental agreement, executed in connection therewith. If there have been
any changes of trustees thereunder, such changes, unless otherwise shown,
should be indicated by notes on the appropriate documents. No such indenture
or other document need be filed in connection with any such issue if the total
amount of securities that are now, or may at any time hereafter, be issued and
outstanding thereunder does not exceed either $1,000,000 or an amount equal to
10% of the total of the debit accounts shown on the most recent balance sheet
of the registrant or subsidiary company which issued or guaranteed such
securities or which is the owner of property subject to the lien of such
securities, whichever of said sums is the lesser.
Omitted by permission of the Staff
(b) As to each outstanding and uncompleted contract or agreement entered
into by registrant or any subsidiary company thereof relating to the
acquisition of any securities, utility assets (as defined in section 2(a)(18)
of the Act), or any other interest in any business, submit a copy of such
contract or agreement and submit details of any supplementary understandings
or arrangements that will assist in securing an understanding of such
transactions.
Omitted by permission of the Staff
Exhibit D. A consolidating statement of income and surplus of the registrant
and its subsidiary companies for its last fiscal year ending prior to the date
of filing this registration statement, together with a consolidating balance
sheet of the registrant and its subsidiary companies as of the close of such
fiscal year.
See Exhibit D hereto.
Exhibit E. For each public utility company and natural gas producing and
pipe line property in the holding company system of the registrant, furnish
the following maps (properties of associate companies operating in contiguous
or nearby areas may be shown on the same map, provide property and service
areas of each company are shown distinctively).
(1) Map showing service area in which electric service is furnished
indicating the names of the companies servicing contiguous areas.
See Exhibit E-1 hereto.
(2) Electric system map showing location of electric property (exclusive of
local distribution lines) owned and/or operated, and information as follows:
(a) Generating plants--kind and capacity;
(b) Transmission lines--voltage, number of circuits, kind of supports, kind
and size of conductors;
(c) Transmission substations--capacity.
(d) Distribution substations--capacity.
(e) Points of interconnection with all other electric utility companies and
with all electrical enterprises operated by municipal or governmental
agencies, giving names of such companies and enterprises;
The information requested in item (2) can be found on the map included as
Exhibit E-1.
(3) Map showing service area in which gas service is furnished, indicating
the names of companies serving contiguous areas;
See Exhibit E-2 hereto.
46
<PAGE>
(4) Gas system map showing location of gas property (exclusive of low
pressure local distribution lines) owned and/or operated, and information as
follows:
(a) Generating plants--kind and daily capacity;
(b) Holders--kind and capacity;
(c) Compressor stations--capacity in horsepower;
(d) Transmission pipe lines--size, approximate average transmission
pressure and the estimated daily delivery capacity of the system;
(e) Points of interconnection with all other private and public gas
utilities, pipe lines, or producing enterprises; giving names of such
companies and other enterprises;
(f) General location and outline of gas producing and reserve areas and
diagrammatic location of gathering lines.
See Exhibit E-2 hereto.
Exhibit F. Furnish an accurate copy of each annual report for the last
fiscal year ending prior to the date of the filing of this registration
statement, which the registrant and each subsidiary company thereof has
previously submitted to its stockholders. For companies for which no reports
are submitted the reason for omission should be indicated; provided that
electronic filers shall submit such reports in paper format only under cover
of Form SE.
<TABLE>
<CAPTION>
Exhibit Report
------- ------
<C> <S>
F-1 Dominion Resources, Inc. Annual Report on Form 10-K for the fiscal
year ended December 31, 1999 (File No. 1-8489)
F-2 Virginia Electric and Power Company Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 (File No. 1-2255)
F-3 Consolidated Natural Gas Company Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 (File No. 1-3196)
F-4 Dominion Resources, Inc. 2000 Proxy Statement dated March 16, 2000
(File No. 1-8489)
F-5 Dominion Resources, Inc. 1999 Annual Report to Shareholders.
F-6 Consolidated Natural Gas Company Act, Form 8-K, dated January 27, 2000
(File No. 1-3196)
F-7 Dominion Resources, Inc. 1998 Statistical Summary & Financial Forecast
</TABLE>
Exhibit G. Furnish a copy of each annual report which the registrant and
each public utility subsidiary company thereof shall have filed with any State
Commission having jurisdiction to regulate public utility companies for the
last fiscal year ending prior to the date of filing this registration
statement. If any such company shall have filed similar reports with more than
one such State commission, the registrant need file a copy of only one of such
reports provided that notation is made of such fact, giving the names of the
different commissions with which such report was filed, and setting forth any
differences between the copy submitted and the copies filed with such other
commissions. In the event any company submits an annual report to the Federal
Power Commission but not to a State commission, a copy of such report should
be furnished. In the case of a registrant or any public utility subsidiary
company for which no report is appended the reasons for such omission should
be indicated such as "No such reports required or filed" provided that
electronic filers shall submit such reports in paper format only under cover
of Form SE.
<TABLE>
<CAPTION>
Exhibit Report
------- ------
<C> <S>
G-1 1999 Annual Report of Virginia Electric and Power Company to the
Federal Energy Regulatory Commission--FERC Form 1
G-2 1999 Annual Financial and Operating Report of Virginia Electric and
Power Company to the State Corporation Commission of the Commonwealth
of Virginia
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
Exhibit Report
------- ------
<C> <S>
G-3 Virginia Electric and Power Company Annual Report for the calendar
year 1999 to the North Carolina Public Staff Utilities Commission
G-4 1998 Annual Report of CNG Transmission Corporation to the Federal
Energy Regulatory Commission--FERC Form 2
G-5 1998 Annual Report of the East Ohio Gas Company to the Public
Utilities Commission of the State of Ohio
G-6 1999 Annual Report of The Peoples Natural Gas Company to the
Pennsylvania Public Utility Commission
G-7 1999 Annual Report of Virginia Natural Gas, Inc. to the State
Corporation Commission of the Commonwealth of Virginia
G-8 1998 Annual Report of Hope Gas, Inc. to the West Virginia Public
Service Commission
</TABLE>
Exhibit H. Typical forms of service, sales, or construction contracts
described in answer to Item 18.
See Exhibit H-1 through H-31.
Exhibit I. Other U5S Information for Consolidated Natural Gas Company.
See Exhibit I hereto
This registration statement comprises:
(a) Pages numbered 1 to 48 consecutively.
(b) The following Exhibits: the Exhibits shown on the attached exhibit
index beginning on page 50.
48
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the registrant has caused this registration statement to be duly signed
on its behalf in the City of Richmond and State of Virginia, on the 27th day
of April, 2000.
Dominion Resources, Inc.
/s/ James L. Trueheart
By:__________________________________
James L. Trueheart
Group Vice President
and Principal Accounting Officer
Attest:
/s/ Patricia A. Wilkerson
By___________________________________
Patricia A. Wilkerson
Vice President and Corporate
Secretary
VERIFICATION
State of Virginia
City of Richmond ss
The undersigned, being duly sworn, deposes and says that he has duly
executed the attached registration statement dated April 27, 2000, for and on
behalf of Dominion Resources, Inc.; that he is the Group Vice President and
Principal Accounting Officer of such company; and that all action by
stockholders, directors, and other bodies necessary to authorize deponent to
execute and file such instrument has been taken. Deponent further says that he
is familiar with such instrument and the contents thereof, and that the facts
therein set forth are true to the best of his knowledge, information and
belief.
/s/ W. H. Riggs, Jr.
By___________________________________
W. H. Riggs, Jr.
Subscribed and sworn to
before me this 27th day of
April, 2000.
- -------------------------------------
My commission expires: February 28, 2002
49
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
A Corporate chart of Dominion Resources, Inc. and its subsidiaries
(filed herewith on Form SE).
B-1 Dominion Resources, Inc.
(a) Articles of Incorporation, as amended and restated, effective
August 9, 1999 (filed herewith on Form SE).
(b) Bylaws, as amended, effective October 15, 1999 (filed herewith on
Form SE).
B-2 Dominion Capital, Inc.
(a) Articles of Incorporation, as amended and restated, effective July
28, 1986 (filed herewith on Form SE).
(b) Bylaws, as amended, effective October 15, 1999 (filed herewith on
Form SE).
B-3 Dominion Energy, Inc.
(a) Articles of Restatement, effective April 14, 1989 (filed herewith
on Form SE).
(b) Bylaws, as amended, effective October 15, 1999 (filed herewith on
Form SE).
B-4 Dominion Exploration & Production, Inc.
(a) Certificate of Incorporation, as amended, effective April 12, 2000
(filed herewith on Form SE).
(b) By-Laws, as amended, effective April 12, 2000 (filed herewith on
Form SE).
B-5 Dominion Transmission, Inc.
(a) Certificate of Incorporation, as amended, effective April 11, 2000
(filed herewith on Form SE).
(b) Bylaws, as amended, effective April 11, 2000 (filed herewith on
Form SE).
B-6 Dominion Field Services, Inc.
(a) Certificate of Incorporation, as amended April 1, 2000 (filed
herewith on Form SE).
(b) Bylaws, as amended April 1, 2000 (filed herewith on Form SE).
B-7 Dominion Generation, Inc.
(a) Articles of Incorporation, dated May 1, 1999 (filed herewith on
Form SE).
(b) Bylaws, as amended, effective October 15, 1999 (filed herewith on
Form SE).
B-8 Dominion Resources Services, Inc.
(a) Articles of Incorporation, dated October 14, 1999 (filed herewith
on Form SE).
(b) Bylaws, effective October 14, 1999 (filed herewith on Form SE).
B-9 Dominion U.K. Holding, Inc.
(a) Articles of Incorporation effective December 18, 1996 (filed
herewith on Form SE).
(b) Bylaws, as amended and restated, effective July 8, 1997 (filed
herewith on Form SE).
B-10 Consolidated Natural Gas Company
(a) Certificate of Incorporation, as amended, effective January 28,
2000 (filed herewith on Form SE).
(b) Bylaws, as amended, effective January 28, 2000 (filed herewith on
Form SE).
B-11 Consolidated Natural Gas Service Company
(a) Certificate of Incorporation, as amended November 30, 1982 (filed
herewith on Form SE).
(b) Bylaws, as last amended March 1, 1993 (filed herewith on Form SE).
B-12 CNG International Corporation
(a) Certificate of Incorporation, effective January 22, 1996 (filed
herewith on Form SE).
(b) Bylaws, effective August 1, 1996 (filed herewith on Form SE).
B-13 CNG Retail Services Corporation
(a) Certificate of Incorporation, effective January 30, 1997 (filed
herewith on Form SE).
(b) Bylaws, effective February 10, 1997 (filed herewith on Form SE).
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
B-14 The East Ohio Gas Company
(a) Articles of Incorporation, as amended, effective June 17, 1993
(filed herewith on Form SE).
(b) Regulations, as amended, effective September 15, 1999 (filed
herewith on Form SE).
B-15 Hope Gas, Inc.
(a) Certificate of Incorporation, as amended, effective October 13,
1994 (filed herewith on Form SE).
(b) Bylaws, as amended, effective June 1, 1998 (filed herewith on Form
SE).
B-16 The Peoples Natural Gas Company
(a) Articles of Incorporation, as amended, effective September 2, 1993
(filed herewith on Form SE).
(b) Bylaws, as amended, effective March 15, 1990 (filed herewith on
Form SE).
B-17 Virginia Electric and Power Company
(a) Articles of Incorporation, as amended and restated, effective May
6, 1999 (filed herewith on Form SE).
(b) Bylaws, as amended and restated, effective January 21, 2000 (filed
herewith on Form SE).
B-18 Virginia Natural Gas, Inc.
(a) Articles of Incorporation, as amended, effective December 26, 1990
(filed herewith on Form SE).
(b) Bylaws, as amended, effective April 26, 1991 (filed herewith on
Form SE).
D Consolidating financial statements of Dominion Resources, Inc. and its
subsidiaries for the fiscal year ended December 31, 1999 (filed
herewith).
E-1 Service area map of Virginia Electric and Power Company including
generating plants, transmission lines, interconnections (filed
herewith on Form SE).
E-2 Service area map of Consolidated Natural Gas Company including
pipelines, delivery and receipt connections and compressor stations
(filed herewith on Form SE).
F-1 Dominion Resources, Inc. Annual Report on Form 10-K for the fiscal
year ended December 31, 1999 (File No. 1-8489) (filed herewith on Form
SE).
F-2 Virginia Electric and Power Company Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 (File No. 1-2255) (filed herewith
on Form SE).
F-3 Consolidated Natural Gas Company Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 (File No. 1-3196) (filed herewith
on Form SE).
F-4 Dominion Resources, Inc. 2000 Proxy Statement dated March 16, 2000
(File No. 1-8489) (filed herewith on Form SE).
F-5 Dominion Resources, Inc. 1999 Annual Report to Shareholders (filed
herewith on Form SE).
F-6 Consolidated Natural Gas Company, Form 8-K, dated January 27, 2000
(File No. 1-3196) (filed herewith on Form SE).
F-7 Dominion Resources, Inc. 1998 Statistical Summary & Financial Forecast
(filed herewith on Form SE). 1999 report to be filed by amendment in
June 2000.
G-1 1999 Annual Report of Virginia Electric and Power Company to the
Federal Energy Regulatory Commission--FERC Form 1 (filed herewith on
Form SE).
G-2 1999 Annual Financial and Operating Report of Virginia Electric and
Power Company to the State Corporation Commission of the Commonwealth
of Virginia (filed herewith on Form SE).
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
G-3 Virginia Electric and Power Company Annual Report for the calendar
year 1999 to the North Carolina Public Staff Utilities Commission
(filed herewith on Form SE).
G-4 1998 Annual Report of CNG Transmission Corporation to the Federal
Energy Regulatory Commission--FERC Form 2 (filed herewith on Form SE)
(1999 report to be filed by amendment).
G-5 1998 Annual Report of The East Ohio Gas Company to the Public
Utilities Commission of the State of Ohio (filed herewith on Form SE)
(1999 report to be filed by amendment).
G-6 1999 Annual Report of the Peoples Natural Gas Company to the
Pennsylvania Public Utility Commission (filed herewith on Form SE).
G-7 1999 Annual Report of Virginia Natural Gas, Inc. to the State
Corporation Commission of the Commonwealth of Virginia (filed herewith
on Form SE).
G-8 1998 Annual Report of Hope Gas, Inc. to the West Virginia Public
Service Commission (filed herewith on Form SE) (1999 report to be
filed by amendment).
H-1 Form of Service Agreement between Dominion Resources Services,
Inc./Consolidated Natural Gas Service Company, Inc. and the below
listed affiliates, dated January 28, 2000 (filed as Exhibit K-1.1 to
the Form U-1 Application as amended in File No. 70-9477 and filed
herewith on Form SE).
</TABLE>
Affiliates
CNG Coal Company Dominion Energy, Inc.
CNG Field Services Company Dominion Generation, Inc.
CNG Financial Services, Inc. Dominion MidWest Energy, Inc.
CNG International Corporation Dominion Resources, Inc.
CNG Main Pass Gathering Evantage, Inc.
Corporation Hope Gas, Inc.
CNG Oil Gathering Corporation Market Center Services, Inc.
CNG Power Corporation The East Ohio Gas Company
CNG Power Services Corporation The Peoples Natural Gas Company
CNG Producing Company Virginia Power Energy Marketing,
CNG Products and Services, Inc. Inc.
CNG Research Company Virginia Power Fuel Corporation
CNG Retail Services Corporation Virginia Power Nuclear Services
CNG Transmission Corporation Company
Consolidated Natural Gas Company Virginia Power Services Energy
Consolidated System LNG Company Corp., Inc.
Dominion Applachian Development, Virginia Power Services, Inc.
Inc. VP Property, Inc.
Dominion Energy Canada, Inc. VPS Communications, Inc.
Dominion Capital, Inc.
<TABLE>
<CAPTION>
<C> <S>
H-2 Service Agreement between Dominion Resources Services, Inc./Consolidated
Natural Gas Service Company, Inc. and Virginia Electric and Power Company
dated January 1, 2000 (filed in the Form of Exhibit K-1.1 to the Form U-1
Application, as amended, in File No. 70-09477 and filed herewith on Form
SE).
H-3 Support Agreement between Virginia Electric and Power Company and
Dominion Resources Services, Inc./Consolidated Natural Gas Service
Company, Inc. dated January 1, 2000 (filed as Exhibit K-1.2 to the Form
U-1 Application, as amended, in File No. 70-09477 and filed herewith on
Form SE).
H-4 Affiliated Transaction Agreement between CNG Transmission (formerly
Consolidated Gas Supply Corporation) (Service Provider) and CNG Producing
(Receiving Company) dated January 1, 1981 for management services.
Contract is terminable on 30-days notice. Services to be provided at
cost. (filed herewith on Form SE).
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
H-5 Call Center Services Agreement between CNG Retail Services (Service
Provider) and Dominion Resources Services, Inc. (Receiving Company)
dated March 1, 2000 for the provision of call center services. (filed
herewith on Form SE).
H-6 Form of Ancillary Service Agreement between affiliates listed below
for the provision of services listed therein. (filed as Exhibit K-1.3
to the Form U-1 Application, as amended, in File No. 70-09477 and
filed herewith on Form SE).
</TABLE>
Service Provider Receiving Company
CNG Retail Services Dominion Resources Services
Dominion Transmission Peoples Natural Gas
Dominion Transmission East Ohio Gas
Dominion Transmission Hope Gas
East Ohio Gas Peoples Natural Gas
East Ohio Gas Hope Gas
East Ohio Gas Dominion Transmission
Hope Gas Peoples Natural Gas
Hope Gas East Ohio Gas
Hope Gas CNG Transmission
Peoples Natural Gas East Ohio Gas
Peoples Natural Gas Hope Gas
Peoples Natural Gas Dominion Transmission
<TABLE>
<CAPTION>
<C> <S>
H-7 Agreement between Virginia Electric and Power Company and Virginia Power
Fuel Corporation dated June 30, 1995 for purchase and sale of enriched
uranium. (filed herewith on Form SE).
H-8 Agreement between Virginia Electric and Power Company and VPS
Communications, Inc. dated September 2, 1997 for provision of certain
administrative and telecommunications services. (filed herewith on Form
SE).
H-9 Affiliate Services Agreement between Virginia Electric and Power Company
and Virginia Power Services, Inc. dated September 3, 1997 for provision
of administrative services (together with first and second amendments
each dated October 30, 1998 and third amendment dated October 1, 1999.)
(filed herewith on Form SE).
H-10 Agreement between Virginia Electric and Power Company and Virginia Power
Services Energy Corp., Inc. dated October 30, 1998 providing for fuel
management and associated risk management services. (filed herewith on
Form SE).
H-11 Operating Agreement between Virginia Electric and Power Company and
Virginia Power Property, Inc. dated December 31, 1999 for management and
use of certain real property. (filed herewith on Form SE).
H-12 Fuel Agency and Service Agreement dated October 30, 1998 between Virginia
Power Services Energy Corp., Inc. and Virginia Power Energy Marketing,
Inc. providing for fuel management and associated risk management
services. (filed herewith on Form SE).
H-13 Microwave Service Agreement between CNG Transmission Corporation (as
Service Provider) and Consolidated Natural Gas Company, Consolidated
Natural Gas Service Company, Inc., The Peoples Natural Gas Company and
CNG Producing Company, effective as of January 1, 1991 for the operation
and maintenance of a microwave system (filed herewith on Form SE).
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
H-14 Agreement between CNG Producing Company (as Service Provider) and CNG
Transmission Corporation (formerly Consolidated Gas Supply
Corporation) dated January 1, 1981 for the provision of certain
operating and administrative services (filed herewith on Form SE).
H-15 Agreement between CNG Producing Company (as Service Provider) and CNG
Trading Company dated August 1, 1990 for the provision of certain
operating and administrative services (filed herewith on Form SE).
H-16 Agreement between CNG Transmission Corporation (as Service Provider)
and CNG Iroquois, Inc. effective as of January 1, 1991 for the
provision of certain operating and administrative services (filed
herewith on Form SE).
H-17 Agreement between CNG Transmission Corporation (as Service Provider)
and CNG Storage Service Company, effective as of July 1, 1991 for the
provision of certain operating and administrative services (filed
herewith on Form SE).
H-18 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, Inc.,
effective as of January 1, 1992 for the provision of certain operating
and administrative services (filed herewith on Form SE).
H-19 Agreement between CNG Gas Services Corporation (as Service Provider)
and CNG Energy Company effective as of January 1, 1994 for the
provision of certain operating and administrative services (filed
herewith on Form SE).
H-20 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, Inc. dated
November 1, 1993 for the provision of certain operating and related
services associated with maintaining the service company's fuel cell
power plant (filed herewith on Form SE).
H-21 Agreement between CNG Gas Services Corporation (as Service Provider)
and CNG Producing Company effective as of February 1, 1993 for the
provision of certain operating and administrative services (filed
herewith on Form SE).
H-22 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, Inc. effective
as of January 1, 1995 for the provision of certain administrative
services relating to medical and associated services (filed herewith
on Form SE).
H-23 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company Inc. effective
as of January 1, 1995 for the provision of certain administrative and
related services associated with mail services (filed herewith on Form
SE).
H-24 Agreement between The Peoples Natural Gas Company (as Service
Provider) and The East Ohio Gas Company, Virginia Natural Gas, Inc.,
Hope Gas, Inc. and West Ohio Gas Company effective as of June 1, 1995
for the provision of certain marketing-related services associated
with natural gas vehicles and gas-fired appliances (filed herewith on
Form SE).
H-25 Agreement between CNG Producing Company (as Service Provider) and
Consolidated Natural Gas Service Company effective as of January 1,
1995 for the provision of certain information services (filed herewith
on Form SE).
H-26 Agreement between The East Ohio Company (as Service Provider) and The
Peoples Natural Gas Company, Virginia Natural Gas, Inc., Hope Gas,
Inc., West Ohio Gas Company effective as of January 1, 1996, for the
provision of marketing communications and advertising services (filed
herewith on Form SE).
H-27 Agreement between The Peoples Natural Gas Company (as Service
Provider) and CNG Products and Services, Inc., effective as of January
1, 1996, for the provision of service line repair and replacement
services (filed herewith on Form SE).
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
H-28 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, Inc.,
effective as of November 1, 1996, for the provision of certain
managerial and administrative services (filed herewith on Form SE).
H-29 Agreement between CNG Products and Services, Inc. (as Service
Provider) and CNG Retail Services Corporation, effective as of
February 1, 1997, for the provision of certain administrative and
marketing services (filed herewith on Form SE).
H-30 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, effective as
of March 1, 1996, for the provision of certain floor space and office
supplies (filed herewith on Form SE).
H-31 Agreement between The Peoples Natural Gas Company (as Service
Provider) and Consolidated Natural Gas Service Company, effective as
of March 1, 1996, for the provision of certain floor space and office
supplies to enable third-party contractors to conduct information
technology services (filed herewith on Form SE).
I Other U5S Information for Consolidated Natural Gas Company (filed
herewith).
I-F Item 10--Schedule of Utility Plant, Depreciation and Amortization,
Other Property and Investments for CNG Transmission, East Ohio Gas,
Peoples Natural Gas, Virginia Natural Gas and Hope Gas (filed herewith
on Form SE).
</TABLE>
55
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN ITEM 10 OF CONSOLIDATED NATURAL
GAS COMPANY'S ANNUAL REPORT ON FORM U5S FOR THE YEAR ENDED DECEMBER 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,688,645
<OTHER-PROPERTY-AND-INVEST> 1,538,616
<TOTAL-CURRENT-ASSETS> 1,437,611
<TOTAL-DEFERRED-CHARGES> 516,552
<OTHER-ASSETS> 353,795
<TOTAL-ASSETS> 6,535,219
<COMMON> 263,858
<CAPITAL-SURPLUS-PAID-IN> 527,102
<RETAINED-EARNINGS> 1,545,664
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,376,310
0
0
<LONG-TERM-DEBT-NET> 1,763,678
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 685,731
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,749,186
<TOT-CAPITALIZATION-AND-LIAB> 6,535,219
<GROSS-OPERATING-REVENUE> 3,074,350
<INCOME-TAX-EXPENSE> 73,581
<OTHER-OPERATING-EXPENSES> 2,541,330
<TOTAL-OPERATING-EXPENSES> 2,614,911
<OPERATING-INCOME-LOSS> 459,439
<OTHER-INCOME-NET> (198,262)
<INCOME-BEFORE-INTEREST-EXPEN> 261,177
<TOTAL-INTEREST-EXPENSE> 124,417
<NET-INCOME> 136,760
0
<EARNINGS-AVAILABLE-FOR-COMM> 136,760
<COMMON-STOCK-DIVIDENDS> 185,859
<TOTAL-INTEREST-ON-BONDS> 124,424
<CASH-FLOW-OPERATIONS> 368,182
<EPS-BASIC> 1.43
<EPS-DILUTED> 1.42
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN ITEM 10 OF CONSOLIDATED NATURAL
GAS COMPANY'S ANNUAL REPORT ON FORM U5S FOR THE YEAR ENDED DECEMBER 31, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 05
<NAME> EAST OHIO GAS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 915,470
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 417,806
<TOTAL-DEFERRED-CHARGES> 212,619
<OTHER-ASSETS> 782
<TOTAL-ASSETS> 1,546,677
<COMMON> 237,968
<CAPITAL-SURPLUS-PAID-IN> 435
<RETAINED-EARNINGS> 156,759
<TOTAL-COMMON-STOCKHOLDERS-EQ> 414,702
0
0
<LONG-TERM-DEBT-NET> 298,259
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 853,256
<TOT-CAPITALIZATION-AND-LIAB> 1,546,677
<GROSS-OPERATING-REVENUE> 1,022,971
<INCOME-TAX-EXPENSE> 8,184
<OTHER-OPERATING-EXPENSES> 963,620
<TOTAL-OPERATING-EXPENSES> 971,804
<OPERATING-INCOME-LOSS> 51,167
<OTHER-INCOME-NET> (10,853)
<INCOME-BEFORE-INTEREST-EXPEN> 40,314
<TOTAL-INTEREST-EXPENSE> 27,008
<NET-INCOME> 13,306
0
<EARNINGS-AVAILABLE-FOR-COMM> 13,306
<COMMON-STOCK-DIVIDENDS> 49,877
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 29,752
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN ITEM 10 OF CONSOLIDATED NATURAL
GAS COMPANY'S ANNUAL REPORT ON FORM U5S FOR THE YEAR ENDED DECEMBER 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 06
<NAME> PEOPLES NATURAL GAS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 449,441
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 126,389
<TOTAL-DEFERRED-CHARGES> 189,364
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 765,194
<COMMON> 183,535
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 65,346
<TOTAL-COMMON-STOCKHOLDERS-EQ> 248,881
0
0
<LONG-TERM-DEBT-NET> 131,344
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 384,969
<TOT-CAPITALIZATION-AND-LIAB> 765,194
<GROSS-OPERATING-REVENUE> 303,053
<INCOME-TAX-EXPENSE> 9,689
<OTHER-OPERATING-EXPENSES> 242,128
<TOTAL-OPERATING-EXPENSES> 251,817
<OPERATING-INCOME-LOSS> 51,236
<OTHER-INCOME-NET> (5,013)
<INCOME-BEFORE-INTEREST-EXPEN> 46,223
<TOTAL-INTEREST-EXPENSE> 11,787
<NET-INCOME> 34,436
0
<EARNINGS-AVAILABLE-FOR-COMM> 34,436
<COMMON-STOCK-DIVIDENDS> 44,866
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 19,942
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN ITEM 10 OF CONSOLIDATED NATURAL
GAS COMPANY'S ANNUAL REPORT ON FORM U5S FOR THE YEAR ENDED DECEMBER 31, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 07
<NAME> VIRGINIA NATURAL GAS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 390,910
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 58,535
<TOTAL-DEFERRED-CHARGES> 3,488
<OTHER-ASSETS> 56
<TOTAL-ASSETS> 452,989
<COMMON> 148,697
<CAPITAL-SURPLUS-PAID-IN> 1,083
<RETAINED-EARNINGS> 2,437
<TOTAL-COMMON-STOCKHOLDERS-EQ> 208,737
0
0
<LONG-TERM-DEBT-NET> 116,000
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 184,772
<TOT-CAPITALIZATION-AND-LIAB> 452,989
<GROSS-OPERATING-REVENUE> 202,835
<INCOME-TAX-EXPENSE> 4,868
<OTHER-OPERATING-EXPENSES> 177,413
<TOTAL-OPERATING-EXPENSES> 182,281
<OPERATING-INCOME-LOSS> 20,554
<OTHER-INCOME-NET> (4,602)
<INCOME-BEFORE-INTEREST-EXPEN> 15,952
<TOTAL-INTEREST-EXPENSE> 9,188
<NET-INCOME> 6,764
0
<EARNINGS-AVAILABLE-FOR-COMM> 6,764
<COMMON-STOCK-DIVIDENDS> 7,525
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 20,190
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN ITEM 10 OF CONSOLIDATED NATURAL
GAS COMPANY'S ANNUAL REPORT ON FORM U5S FOR THE YEAR ENDED DECEMBER 31, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 08
<NAME> HOPE GAS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 116,189
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 45,405
<TOTAL-DEFERRED-CHARGES> 24,437
<OTHER-ASSETS> 1,125
<TOTAL-ASSETS> 187,156
<COMMON> 44,900
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 12,566
<TOTAL-COMMON-STOCKHOLDERS-EQ> 57,466
0
0
<LONG-TERM-DEBT-NET> 36,930
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 92,760
<TOT-CAPITALIZATION-AND-LIAB> 187,156
<GROSS-OPERATING-REVENUE> 111,285
<INCOME-TAX-EXPENSE> 163
<OTHER-OPERATING-EXPENSES> 104,552
<TOTAL-OPERATING-EXPENSES> 104,715
<OPERATING-INCOME-LOSS> 6,570
<OTHER-INCOME-NET> (1,622)
<INCOME-BEFORE-INTEREST-EXPEN> 4,948
<TOTAL-INTEREST-EXPENSE> 4,165
<NET-INCOME> 783
0
<EARNINGS-AVAILABLE-FOR-COMM> 783
<COMMON-STOCK-DIVIDENDS> 1,020
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 478
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE>
EXHIBIT D.
By permission of the Staff, Dominion has presented consolidating balance
sheets as of December 31, 1999, and consolidating statements of income for the
year then ended for the registrant and its subsidiaries. Dominion Capital
financial statements are presented for its first tier subsidiaries as allowed
by the Staff. In addition, CNG financial statements for the year ended
December 31, 1999, include consolidating statements of cash flows and retained
earnings and are provided at Exhibit D-6.
The accompanying consolidating financial statements should be reviewed in
conjunction with Dominion's Form 8-K/A, filed with the SEC on March 23, 2000,
which included certain proforma financial information for the merged company.
Certain proforma information has been included at Exhibit D-1. In addition,
the financial statements should be reviewed in conjunction with Dominion
Resources, Inc.'s Form 10-K, filed March 7, 2000, included as Exhibit F-1,
CNG's Form 8-K, filed with the SEC on January 27, 2000, included as Exhibit F-
6, and Virginia Power's Form 10-K, included as Exhibit F-2, filed with the SEC
on March 7, 2000.
D-1
<PAGE>
EXHIBIT D.
FINANCIAL STATEMENTS
Financial Statements as of and for the year ended December 31, 1999
INDEX
<TABLE>
<CAPTION>
Page
------
<S> <C>
EXHIBIT D-1
Proforma Dominion, including CNG
Consolidating Balance Sheet............................................ D-1-1
Consolidating Income Statement......................................... D-1-3
EXHIBIT D-2
Report of Independent Accountants........................................ D-2-1
Notes to Exhibit D-2 through Exhibit D-5................................. D-2-2
Dominion Resources, Inc.
Consolidating Balance Sheet............................................ D-2-5
Consolidating Income Statement......................................... D-2-7
EXHIBIT D-3
Dominion Capital, Inc.
Consolidating Balance Sheet............................................ D-3-1
Consolidating Income Statement......................................... D-3-5
EXHIBIT D-4
Dominion Energy, Inc.
Consolidating Balance Sheet............................................ D-4-1
Consolidating Income Statement......................................... D-4-3
EXHIBIT D-4-1
Dominion Energy, Inc.--Oil and Gas
Consolidating Balance Sheet............................................ D-4-4
Consolidating Income Statement......................................... D-4-6
EXHIBIT D-4-1(a)
Dominion Reserves, Inc.
Consolidating Balance Sheet............................................ D-4-7
Consolidating Income Statement......................................... D-4-9
EXHIBIT D-4-1(b)
Dominion Energy Canada
Consolidating Balance Sheet............................................ D-4-11
Consolidating Income Statement......................................... D-4-13
EXHIBIT D-4-1(c)
Dominion Gas Processing Michigan, Inc.
Consolidating Balance Sheet............................................ D-4-14
Consolidating Income Statement......................................... D-4-16
EXHIBIT D-4-2
Dominion Energy, Inc.--Domestic Power Generation
Consolidating Balance Sheet............................................ D-4-17
Consolidating Income Statement......................................... D-4-19
</TABLE>
D-2
<PAGE>
EXHIBIT D.
FINANCIAL STATEMENTS
Financial Statements as of and for the year ended December 31, 1999
INDEX
<TABLE>
<CAPTION>
Page
------
<S> <C>
EXHIBIT D-4-2(a)
Dominion Cogen WVA, Inc.
Consolidating Balance Sheet............................................ D-4-20
Consolidating Income Statement......................................... D-4-22
EXHIBIT D-4-2(b)
Dominion Elwood, Inc.
Consolidating Balance Sheet............................................ D-4-23
Consolidating Income Statement......................................... D-4-25
EXHIBIT D-4-3
Dominion Energy, Inc.--Foreign Power Generation
Consolidating Balance Sheet............................................ D-4-26
Consolidating Income Statement......................................... D-4-28
EXHIBIT D-5
Virginia Power
Consolidating Balance Sheet............................................ D-5-1
Consolidating Income Statement......................................... D-5-3
EXHIBIT D-5(a)
VP Services, Inc.
Consolidating Balance Sheet............................................ D-5-4
Consolidating Income Statement......................................... D-5-6
EXHIBIT D-6
Consolidated Natural Gas Company
Index of Consolidating Financial Statements.............................. D-6-1
</TABLE>
The Notes to the Consolidated Financial Statements are an integral part of
these consolidating statements. See Notes on page D-2-2.
D-3
<PAGE>
EXHIBIT D-1
DOMINION RESOURCES, INC.
UNAUDITED PRO FORMA COMBINED
CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Proforma Proforma DRI DRI CNG CNG
Combined Adjustments (Exhibit D-2) Reclassifications (Audited) Revised Reclassifications (Exhibit D-6)
-------- ----------- ------------- ----------------- --------- ------- ----------------- -------------
(millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents..... $ 374 $ 280 $ 280 $ 94 $ 94
Accounts
receivable:
Customers, less
allowance...... 1,071 $ (8) 664 664 415 $ 86 329
Unbilled and
other.......... (198) 198
Other........... 381 269 269 112 112
Receivables from
affiliated
companies
Materials and
supplies, at
average cost or
less:
Plant and
general........ 163 143 143 20 20
Fossil fuel..... 111 111 111
Gas stored...... 86 86 86
Unrecovered gas
costs........... 38 38 38
Deferred income
taxes--current.. 50 49 49 1 1
Mortgage loans in
warehouse....... 119 119 119
Commodity
contract
assets.......... 362 362 362
Finance
receivables held
for sale........ 15 15 15
Net assets held
for sale........ 372 372 372
Prepayments and
other current
assets.......... 480 180 180 300 300
------- ------ ------- ------- ------ ----- ------
Total current
assets......... 3,622 (8) 2,192 2,192 1,438 -- 1,438
------- ------ ------- ------- ------ ----- ------
Investments:
Loans receivable,
net............. 2,034 2,034 2,034
Available for
sale
securities...... 512 512 512
Nuclear
decommissioning
trust funds..... 818 818 818
Investments in
real estate..... 86 86 86
Stocks of
subsidiary
companies, at
equity.......... 433 433 433
Notes of
subsidiary
companies.......
Other............ 688 334 334 354 354
------- ------- ------- ------ ----- ------
Total
investments.... 4,571 4,217 4,217 354 -- 354
------- ------- ------- ------ ----- ------
Property, plant
and equipment:
Utility plant.... 21,137 16,489 16,489 4,648 4,648
Exploration and
production
properties...... 5,420 (99) 1,127 1,127 4,392 4,392
Other--non-
utility......... 1,030 1,030 1,030
Acquisition
adjustment...... 3,497 3,497
------- ------ ------- ------- ------ ----- ------
Total property,
plant and
equipment...... 31,084 3,398 18,646 18,646 9,040 -- 9,040
------- ------ ------- ------- ------ ----- ------
Less accumulated
depreciation,
depletion and
amortization.... 12,695 7,882 7,882 4,813 4,813
------- ------ ------- ------- ------ ----- ------
Net property,
plant and
equipment....... 18,389 3,398 10,764 10,764 4,227 -- 4,227
------- ------ ------- ------- ------ ----- ------
Deferred charges
and other
assets:
Regulatory
assets, net..... 520 80 221 221 219 219
Goodwill, net.... 132 132 132
Prepaid pension
cost............ 1,375 1,140 235 235
Other............ 196 (25) 221 221 62 (235) 297
------- ------ ------- ------- ------ ----- ------
Total deferred
charges and
other assets... 2,285 1,195 574 574 516 -- 516
------- ------ ------- ------- ------ ----- ------
Total assets.... $28,867 $4,585 $17,747 $17,747 $6,535 $ -- $6,535
======= ====== ======= ======= ====== ===== ======
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-1-1
<PAGE>
EXHIBIT D-1
DOMINION RESOURCES, INC
UNAUDITED PROFORMA COMBINED
CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Proforma Proforma DRI DRI CNG CNG
Combined Adjustments (Exhibit D-2) Reclassifications (Audited) Revised Reclassifications (Exhibit D-6)
-------- ----------- ------------- ----------------- --------- ------- ----------------- -------------
(millions)
LIABILITIES AND
SHAREHOLDERS'
EQUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Current
liabilities:
Securities due
within one
year............ $ 536 $ 536 $ 536
Short-term debt.. 5,816 $4,260 870 870 $ 686 $ 686
Accounts payable,
trade........... 1,091 45 711 711 335 335
Payables to
affiliated
companies.......
Accrued taxes.... 223 89 $(214) 303 134 134
Estimated rate
contingencies
and refunds..... 45 45 45
Amounts payable
to customers.... 4 4 4
Dividends
declared........ 46 46 46
Commodity
contract
liabilities..... 347 347 347
Other current
liabilities..... 648 99 446 214 232 103 103
------- ------ ------- ----- ------- ------ --- ------
Total current
liabilities.... 8,756 4,404 2,999 2,999 1,353 1,353
------- ------ ------- ----- ------- ------ --- ------
Long-term debt... 8,680 (20) 6,936 6,936 1,764 1,764
------- ------ ------- ----- ------- ------ --- ------
Deferred credits
and other
liabilities:
Deferred income
taxes........... 2,867 360 1,699 1,699 808 808
Investment tax
credits......... 167 147 147 20 20
Other............ 520 84 222 222 214 214
------- ------ ------- ----- ------- ------ --- ------
Total deferred
credits and
other
liabilities.... 3,554 444 2,068 2,068 1,042 1,042
------- ------ ------- ----- ------- ------ --- ------
Total
liabilities.... 20,989 4,828 12,002 12,002 4,159 4,159
------- ------ ------- ----- ------- ------ --- ------
Minority
interest........ 99 99 99
Commitments and
contingencies
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary
trusts.......... 385 385 385
Preferred stock
not subject to
mandatory
redemption...... 509 509 509
Common
shareholders'
equity:
Common stock.... 5,674 1,849 3,561 3,561 264 264
Additional paid
in capital..... 16 (567) 16 16 567 567
Treasury stock.. 1 (1) (1)
Retained
earnings....... 1,210 (1,526) 1,190 1,190 1,546 1,546
Accumulated
other
comprehensive
income......... (15) (15) (15)
------- ------ ------- ----- ------- ------ --- ------
Total common
shareholders'
equity......... 6,885 (243) 4,752 4,752 2,376 2,376
------- ------ ------- ----- ------- ------ --- ------
Total
liabilities and
shareholders'
equity......... $28,867 $4,585 $17,747 $17,747 $6,535 $6,535
======= ====== ======= ===== ======= ====== === ======
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-1-2
<PAGE>
EXHIBIT D-1
DOMINION RESOURCES, INC.
UNAUDITED PROFORMA COMBINED
CONSOLIDATING INCOME STATEMENT
FOR THE YEAR ENDED
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Proforma Proforma DRI CNG
Combined Adjustments (Exhibit D-2) (Exhibit D-6)
-------- ----------- ------------- --------------
(millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenue and
income:
Domestic electric
utility service....... $4,274 $4,274
Domestic gas utility
service............... 1,397 $1,397
Gas transportation and
storage............... 567 567
Other.................. 2,356 1,246 1,110
------ ----- ------ ------
Total operating revenue
and income............ 8,594 5,520 3,074
------ ----- ------ ------
Expenses:
Electric fuel and
purchased energy,
net................... 996 996
Purchased gas.......... 912 912
Purchased power
capacity, net......... 809 809
Liquids, capacity and
other products
purchased............. 280 280
Other operation and
maintenance........... 2,160 $ 3 1,384 773
Depreciation, depletion
and amortization...... 1,159 64 716 379
Taxes, other than
income................ 501 304 197
------ ----- ------ ------
Total operating
expenses.............. 6,817 67 4,209 2,541
------ ----- ------ ------
Income from operations.. 1,777 (67) 1,311 533
------ ----- ------ ------
Other income and
expense:
Interest revenue.......
Merger-related costs... 29 213 29 (213)
Other, net............. 59 (18) 62 15
------ ----- ------ ------
Total other income and
expense............... 88 195 91 (198)
------ ----- ------ ------
Income before fixed
charges and income
taxes.................. 1,865 128 1,402 335
Fixed charges:
Interest charges....... 897 266 507 124
Distributions-preferred
securities and
preferred stock....... 67 67
------ ----- ------ ------
Total fixed charges.... 964 266 574 124
------ ----- ------ ------
Income before provision
for income taxes,
minority interests and
extraordinary item..... 901 (138) 828 211
Provision for income
taxes.................. 396 63 259 74
Minority interests...... 18 18
------ ----- ------ ------
Income from continuing
operations............. $ 487 $(201) $ 551 $ 137
====== ===== ====== ======
Earnings per common
share
Basic.................. $ 1.98 $ 2.88 $ 1.43
Diluted................ $ 1.98 $ 2.81 $ 1.42
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-1-3
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Dominion Resources, Inc. on Form U5B for the year ended December 31, 1999,
filed pursuant to the Public Utility Holding Company Act of 1935, of our
report dated January 28, 2000, on the consolidated financial statements of
Dominion Resources, Inc., appearing in the Annual Report on Form 10-K of
Dominion Resources, Inc. for the year ended December 31, 1999.
Deloitte & Touche LLP
Richmond, Virginia
April 27, 2000
D-2-1
<PAGE>
NOTES TO CONSOLIDATING FINANCIAL STATEMENTS INCLUDED IN
EXHIBIT D-2 through EXHIBIT D-5
<TABLE>
<CAPTION>
Note
Reference Schedule Discussion
--------- -------- ----------
<S> <C> <C>
General Exhibits D-2 The Notes to Consolidated Financial Statements appearing
through D-5 on pages 39 to 57 of Dominion Resources, Inc.'s Form 10-
K, filed with the SEC on March 7, 2000, and on pages 39
to 60 of Virginia Electric and Power Company's Form 10-K,
filed with the SEC on March 7, 2000, are incorporated
herein by reference. Dominion's Annual Report on Form 10-
K for the year ended December 31, 1999 (File No. 1-8489)
has been provided at Exhibit F-1.
General Exhibits D-2 The consolidating entries in the attached exhibits
through D-5 primarily relate to the elimination of inter-company
advances or borrowings and of investments in subsidiary
companies. The eliminating journal entries pertaining to
these consolidating financial statements are prepared in
detail form, showing the amounts pertaining to the
Registrant and each subsidiary company, and are preserved
with the Registrant's copy of this Form U5B.
Note A Exhibit D-2 Dominion Generation, Inc. had minimal development
activity in 1999.
General Exhibit D-2 DRI New Sub I, Inc. and DRI New Sub II, Inc. were
established for purposes to effect the merger. The
companies have not been included herein as there was no
activity in 1999.
Note B Exhibit D-3 Dominion Capital includes the accounts of Williams
Court/DCI Properties, Inc. and Shoulders Hill
DCI/Properties,Inc.
Note C Exhibit D-3 Virginia Financial Ventures, Inc. includes the accounts
NH Capital, Inc., FSFI/Dakotah Direct, Inc., First Source
Equity Holding, Inc. and First Source Financial, Inc.
General Exhibit D-4 Dominion Energy has included intercompany receivables and
payables in "Accounts receivable' and "Accounts payable,
trade,' respectively. A detail of these intercompany
amounts is included in Item 11, Indebtedness of System
Companies. There are no intercompany amounts between
Dominion Energy and any of the regulated utility
companies within the Dominion system, including CNG.
Further, such amounts are generally billed and settled
monthly. Intercompany notes receivable and notes payable
are separately presented herein with relevant maturity
dates and interest rates included in Item 11.
General Exhibit D-4 REVALUATIONS: The following table presents a detail of
Dominion Energy's acquisitions accounted for under the
purchase method of accounting by year:
1999--Owners' interests in San Juan Partners LLC
1999--All outstanding stock of Remington Energy, Ltd.
1998--All outstanding stock of Archer Resources Ltd.
1998--Certain assets of Phoenix Energy Sales Company
1996--Partnership interests in Kimball-Trippe Associates
</TABLE>
D-2-2
<PAGE>
<TABLE>
<CAPTION>
Note
Reference Schedule Discussion
--------- -------- ----------
<S> <C> <C>
1996--Purchased oil and gas reserves from Zilkha Energy
Company
1994--All outstanding stock of Telesis Petroleums, Inc.
1992--Purchased natural gas reserves of River Gas
Corporation and
Emerald Gas Corporation
A detail of the relative values for the above
acquisitions is preserved with the Registrants copy of
this Form U5B.
Note D Exhibit D-4-1 Niton US, Inc., and Dominion Storage, Inc., own 1% and
85%, respectively, of Dominion Energy Canada Limited,
presented herein. Niton US, Inc. has no other activity
and is not presented herein.
Note E Exhibit D-4-1 San Juan Partners, LLC, is owned through Dominion San
Juan, Inc. which is not presented herein.
Note F Exhibit D-4-1(a) Phoenix Dominion Energy is owned 99% by Dominion
Reserves, Inc. and 1% by Carthage Energy Services, Inc.
Note G Exhibit D-4-1(a) Dominion Appalachian Development Properties, LLC, is
owned 99% by Dominion Reserves, Inc., and 1% by Dominion
Appalachian Development, Inc.
Note H Exhibit D-4-1(b) Certain long-term debt of Domcan Boundary Corp. is owed
to Domcan NS1 ULC. Domcan NS1 ULC is a special purpose
entity owned 99% by Remington LLC and 1% by Dominion
Energy. Remington LLC is a special purpose entity owned
100% by Dominion Energy. The only activity of Domcan NS1
ULC is to borrow funds from a bank and to loan those
funds to Domcan Boundary Corp. The financial statements
of Domcan NS1 ULC and Remington LLC are not presented
since their only activity relates to borrowings on behalf
of Domcan Boundary Corp. The external debt and related
interest expense are presented in the financial
statements of Domcan Boundary Corp.
Note I Exhibit D-4-1(c) Dominion Gas Processing Michigan, Inc., owns 94% of
Frederic HOF LP.
Note J Exhibit D-4-1(c) Dominion Gas Processing Michigan, Inc. (DGPMI),
effectively owns 50% of Wilderness Energy Services, LP.
DGPMI directly owns 24.5% of Wilderness Energy Services,
LP. DGPMI also owns 50% of Wilderness LC, which owns 51%
of Wilderness Energy Services, LP.
Note K Exhibit D-4-2 Dominion Cogen NY owns 1% general partnership interest in
Middle Falls, NYSD and Sissonville hydropower plants and
DEI owns a 49% interest. All investments in these plants
have been written down to zero.
Note L Exhibit D-4-2 Dominion Cogen WV, Inc. is a wholly-owned subsidiary of
DEI that holds a 50% interest in Morgantown Energy
Associates. This column reflects the consolidated
balances of Dominion Cogen WV, Inc. and Morgantown Energy
Associates (See Exhibit D-4-2 (a) for consolidation).
Note M Exhibit D-4-2 Dominion Elwood, Inc. is a wholly-owned subsidiary of DEI
that holds a 50% interest in Elwood Energy LLC. This
column reflects the consolidated balances of Dominion
Elwood and Elwood Energy (See Exhibit D-4-2 (b) for
consolidation).
</TABLE>
D-2-3
<PAGE>
<TABLE>
<CAPTION>
Note
Reference Schedule Discussion
--------- -------- ----------
<S> <C> <C>
Note N Exhibit D-4-2 Dominion Kincaid, Inc. is a wholly-owned subsidiary of
DEI that holds a 99% interest in Kincaid Generation LLC
with DEI owning the remaining 1% interest. This column
reflects consolidated balances assuming a 100% ownership
by Dominion Kincaid, Inc. of Kincaid Generation LLC.
Note O Exhibit D-4-3 Dominion Energy Interamerican Holding Company LDC is 98%
owned by DEI and 1% owned by Dominion Cogen, Inc and 1%
owned by Dominion Reserves, Inc., both of which are
wholly-owned subsidiaries of DEI. Dominion Energy
Interamerican Holding Company owns a 96% interest in a
special purpose subsidiary which owns a 50% interest in a
Bolivian generation company which is scheduled to be sold
in 2000.
Note P Exhibit D-4-3 Dominion Energy Company (Cayman Islands) through various
ownership interests holds a 54% and 98% ownership
interest in two separate Argentine generation companies.
These interests were sold effective March 9, 2000.
Note Q Exhibit D-4-3 Dominion Holdings, Inc. Peru SAC and Dominion Energy
Central America, Inc. were sold effective November 9,
1999. Therefore, only income statement activity is
applicable.
General Exhibit D-5 DEPRECIATION: Virginia Power's FERC Form 1, included as
Exhibit G-1, and prior year FERC filings, along with
Virginia Power's Form 10-K for the year ended December
31, 1999, filed with the SEC on March 7, 2000, discuss
depreciation policies and reserves.
General Exhibit D-5 Evantage, Inc. and VP Property, Inc. are not included
herein as these entities had no activity in 1999.
</TABLE>
D-2-4
<PAGE>
EXHIBIT D-2
DOMINION RESOURCES, INC.
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
DRI Dominion
Consolidated Dominion Dominion Dominion Dominion Resources
(Exhibit D- Consolidating Capital, Inc Energy, Inc Generation, Inc Resources Capital
1) Entries DRI (Exhibit D-3) (Exhibit D-4) (Note A) Services, Inc Trust I
------------ ------------- ---------- ------------- ------------- --------------- ------------- ---------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents...... $ 279,855 $ 27,606 $ 124,942 $ 61,555
Accounts
receivable:
Customers, less
allowance....... 663,520
Other........... 268,650 7,505 14,899 179,961
Receivables from
affiliated
companies........ $ (36,212) 29,567 505 $210
Materials and
supplies, at
average cost or
less:
Plant and
general......... 143,020 419 18,730
Fossil fuel..... 110,844
Deferred income
taxes--current... 49,525
Mortgage loans in
warehouse........ 118,595 118,595
Commodity
contract assets.. 362,218
Finance
receivables held
for sale......... 15,000 15,000
Net assets held
for sale.........
Prepayments and
other current
assets........... 180,523 (5,680) 14,687 36,937 34,305 $ 1,631
----------- ----------- ---------- ---------- ---------- ---- --- --------
Total current
assets.......... 2,191,750 (41,892) 79,365 310,792 295,056 210 1,631
----------- ----------- ---------- ---------- ---------- ---- --- --------
Investments:
Loans receivable,
net.............. 2,034,475 2,034,475
Available for
sale securities.. 511,663 511,663
Nuclear
decommissioning
trust funds...... 818,072
Investments in
real estate...... 85,914 85,914
Stocks of
subsidiary
companies, at
equity........... 432,578 (5,355,992) 5,098,260 192,680 209,227 257,732
Notes of
subsidiary
companies........ (339,809) 339,809
Other............ 334,343 16,783 160,467 104,625
----------- ----------- ---------- ---------- ---------- ---- --- --------
Total
investments..... 4,217,045 (5,695,801) 5,454,852 2,985,199 313,852 257,732
----------- ----------- ---------- ---------- ---------- ---- --- --------
Property, plant
and equipment:
Utility plant.... 16,489,207
Exploration and
production
properties....... 1,127,325 1,127,325
Other--non-
utility.......... 1,029,681 (2,398) 42,485 61,177 928,323 34
Acquisition
adjustment.......
----------- ----------- ---------- ---------- ---------- ---- --- --------
Total property,
plant and
equipment....... 18,646,213 (2,398) 42,485 61,177 2,055,708 34
----------- ----------- ---------- ---------- ---------- ---- --- --------
Less accumulated
depreciation,
depletion and
amortization..... 7,882,222 16,357 22,711 432,605 2
----------- ----------- ---------- ---------- ---------- ---- --- --------
Net property,
plant and
equipment........ 10,763,991 (2,398) 26,128 38,466 1,623,103 32
----------- ----------- ---------- ---------- ---------- ---- --- --------
Deferred charges
and other assets:
Regulatory
assets, net...... 221,137
Goodwill, net.... 132,007 78,656 15,136
Other............ 220,636 (18,660) 36,814 142,497
----------- ----------- ---------- ---------- ---------- ---- --- --------
Total deferred
charges and
other assets.... 573,780 (18,660) 36,814 221,153 15,136
----------- ----------- ---------- ---------- ---------- ---- --- --------
Total assets.... $17,746,566 $(5,758,751) $5,597,159 $3,555,610 $2,247,147 $242 $259,363
=========== =========== ========== ========== ========== ==== === ========
<CAPTION>
Virginia
Electric and
Power Company
UK Holding (Exhibit D-5)
---------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents...... $ 4,007 $ 61,745
Accounts
receivable:
Customers, less
allowance....... 663,520
Other........... 273 66,012
Receivables from
affiliated
companies........ 4,506 1,424
Materials and
supplies, at
average cost or
less:
Plant and
general......... 123,871
Fossil fuel..... 110,844
Deferred income
taxes--current... 49,525
Mortgage loans in
warehouse........
Commodity
contract assets.. 362,218
Finance
receivables held
for sale.........
Net assets held
for sale.........
Prepayments and
other current
assets........... 3,475 95,168
---------- -------------
Total current
assets.......... 12,261 1,534,327
---------- -------------
Investments:
Loans receivable,
net..............
Available for
sale securities..
Nuclear
decommissioning
trust funds...... 818,072
Investments in
real estate......
Stocks of
subsidiary
companies, at
equity........... 30,671
Notes of
subsidiary
companies........
Other............ 52,468
---------- -------------
Total
investments..... 30,671 870,540
---------- -------------
Property, plant
and equipment:
Utility plant.... 16,489,207
Exploration and
production
properties.......
Other--non-
utility..........
Acquisition
adjustment.......
---------- -------------
Total property,
plant and
equipment....... 16,489,207
---------- -------------
Less accumulated
depreciation,
depletion and
amortization..... 7,410,547
---------- -------------
Net property,
plant and
equipment........ 9,078,660
---------- -------------
Deferred charges
and other assets:
Regulatory
assets, net...... 221,137
Goodwill, net.... 38,215
Other............ 59,985
---------- -------------
Total deferred
charges and
other assets.... 38,215 281,122
---------- -------------
Total assets.... $81,147 $11,764,649
========== =============
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-2-5
<PAGE>
DOMINION RESOURCES, INC.
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
DRI Dominion
Consolidated Dominion Dominion Dominion Dominion Resources
(Exhibit D- Consolidating Capital, Inc Energy, Inc Generation, Inc Resources Capital
1) Entries DRI (Exhibit D-3) (Exhibit D-4) (Note A) Services, Inc Trust I
------------ ------------- ---------- ------------- ------------- --------------- ------------- ---------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Securities due
within one year.. $ 536,262 $ $ 151,953 $ 8,850
Short-term debt.. 870,067 196,976 237,931 57,181
Accounts payable,
trade............ 710,718 6,509 9,793 160,820
Payables to
affiliated
companies........ $ (36,212) 5,930 1,060 4,461 $505
Accrued interest,
payroll and
taxes............ 303,344 (3,758) 21,611 17,473 24,804 38
Deferred income
taxes-current....
Dividends
declared.........
Commodity
contract
liabilities...... 347,093
Other current
liabilities...... 231,354 (2,661) 21,117 16,261 30,907 $ 1,631
----------- ----------- ---------- ---------- ---------- ---- --- --------
Total current
liabilities..... 2,998,838 (42,631) 252,143 434,471 287,023 543 1,631
----------- ----------- ---------- ---------- ---------- ---- --- --------
Long-term debt... 6,936,308 318,100 2,047,635 965,081
----------- ----------- ---------- ---------- ---------- ---- --- --------
Notes payable to
affiliates....... (597,541) 257,732 219,097 120,712
----------- ----------- ---------- ---------- ---------- ---- --- --------
Deferred credits
and other
liabilities:
Deferred income
taxes............ 1,698,567 9,505 99,058 131,318
Investment tax
credits.......... 146,518
Other............ 222,117 (18,601) 1,852 9,440 36,862
----------- ----------- ---------- ---------- ---------- ---- --- --------
Total deferred
credits and
other
liabilities..... 2,067,202 (18,601) 11,357 108,498 168,180
----------- ----------- ---------- ---------- ---------- ---- --- --------
Total
liabilities..... 12,002,348 (658,773) 839,332 2,809,701 1,540,996 543 1,631
----------- ----------- ---------- ---------- ---------- ---- --- --------
Minority
interest......... 98,537 4,997 93,540
Commitments and
contingencies....
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary
trusts........... 385,000 250,000
Preferred stock
not subject to
mandatory
redemption....... 509,014
Common
shareholders'
equity:
Common stock..... 3,561,148 (2,745,355) 3,561,148 8 208 7,732
Additional paid
in capital....... 16,226 (1,330,760) 16,226 693,160 570,942
Retained
earnings......... 1,189,218 (1,038,788) 1,195,378 62,899 38,276 (301)
Accumulated other
comprehensive
income........... (14,925) 14,925 (14,925) (15,155) 3,185
----------- ----------- ---------- ---------- ---------- ---- --- --------
Total common
shareholders'
equity.......... 4,751,667 (5,099,978) 4,757,827 740,912 612,611 (301) 7,732
----------- ----------- ---------- ---------- ---------- ---- --- --------
Total
liabilities and
shareholders'
equity.......... $17,746,566 $(5,758,751) $5,597,159 $3,555,610 $2,247,147 $242 $259,363
=========== =========== ========== ========== ========== ==== === ========
<CAPTION>
Virginia
Electric and
Power Company
UK Holding (Exhibit D-5)
---------- -------------
<S> <C> <C>
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Securities due
within one year.. $ 375,459
Short-term debt.. 377,979
Accounts payable,
trade............ 533,596
Payables to
affiliated
companies........ $23,700 556
Accrued interest,
payroll and
taxes............ 5,761 237,415
Deferred income
taxes-current....
Dividends
declared.........
Commodity
contract
liabilities...... 347,093
Other current
liabilities...... 464 163,635
---------- -------------
Total current
liabilities..... 29,925 2,035,733
---------- -------------
Long-term debt... 54,210 3,551,282
---------- -------------
Notes payable to
affiliates.......
---------- -------------
Deferred credits
and other
liabilities:
Deferred income
taxes............ 6,500 1,452,186
Investment tax
credits.......... 146,518
Other............ 192,564
---------- -------------
Total deferred
credits and
other
liabilities..... 6,500 1,791,268
---------- -------------
Total
liabilities..... 90,635 7,378,283
---------- -------------
Minority
interest.........
Commitments and
contingencies....
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary
trusts........... 135,000
Preferred stock
not subject to
mandatory
redemption....... 509,014
Common
shareholders'
equity:
Common stock..... 2,737,407
Additional paid
in capital....... 49,771 16,887
Retained
earnings......... (56,304) 988,058
Accumulated other
comprehensive
income........... (2,955)
---------- -------------
Total common
shareholders'
equity.......... (9,488) 3,742,352
---------- -------------
Total
liabilities and
shareholders'
equity.......... $81,147 $11,764,649
========== =============
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-2-6
<PAGE>
EXHIBIT D-2
DOMINION RESOURCES, INC.
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion
DRI Dominion Dominion Dominion Dominion Resources
Consolidated Consolidating Capital, Inc. Energy, Inc. Generation, Inc. Resources Capital
(Exhibit D-1) Entries DRI (Exhibit D-3) (Exhibit D-4) (Note A) Services, Inc. Trust I
------------- ------------- -------- ------------- ------------- ---------------- -------------- ---------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Consolidating
Income Statement
Operating revenue
and income:
Domestic
electric utility
service......... $4,274,192
Other........... 1,246,118 $ 473,364 $ 456,033
---------- --------- -------- --------- --------- ----- --- -------
Total operating
revenue and
income.......... 5,520,310 473,364 456,033
---------- --------- -------- --------- --------- ----- --- -------
Expenses:
Electric fuel
and purchased
energy, net..... 996,020 9,881
Purchased power
capacity, net... 808,924
Other operation
and
maintenance..... 1,384,228 $ 30,524 170,470 222,724 $ 463
Depreciation,
depletion and
amortization.... 715,765 1,628 31,951 131,332
Taxes, other
than income..... 304,331 1,350 5,459 15,706
---------- --------- -------- --------- --------- ----- --- -------
Total operating
expenses........ 4,209,268 33,502 207,880 379,643 463
---------- --------- -------- --------- --------- ----- --- -------
Income from
operations....... 1,311,042 (33,502) 265,484 76,390 (463)
---------- --------- -------- --------- --------- ----- --- -------
Other income and
expense:
Interest
revenue......... 29,248 2,688 15,659
Equity in
earnings of
subsidiary
companies....... $(318,955) 318,955
Interest revenue
from subsidiary
companies....... (45,507) 25,932 $19,575
Merger-related
costs........... 29,091 29,091
Other, net...... 32,141 6,107
---------- --------- -------- --------- --------- ----- --- -------
Total other
income and
expense......... 90,480 (364,462) 353,682 44,750 19,575
---------- --------- -------- --------- --------- ----- --- -------
Income before
fixed charges and
income taxes..... 1,401,522 (364,462) 320,180 265,484 121,140 (463) 19,575
---------- --------- -------- --------- --------- ----- --- -------
Fixed charges:
Interest
charges......... 506,544 (25,932) 21,341 151,966 78,207
Distributions--
preferred
securities and
preferred
stock........... 67,488 (19,575) 19,575 19,575
---------- --------- -------- --------- --------- ----- --- -------
Total fixed
charges......... 574,032 (45,507) 40,916 151,966 78,207 19,575
---------- --------- -------- --------- --------- ----- --- -------
Income before
provision for
income taxes,
minority
interests and
extraordinary
item............. 827,490 (318,955) 279,264 113,518 42,933 (463)
Provision for
income taxes.... 259,026 (16,560) 35,226 (16,711) (162)
Minority
interests....... 17,814 17,814
---------- --------- -------- --------- --------- ----- --- -------
Income before
extraordinary
item............. 550,650 (318,955) 295,824 78,292 41,830 (301)
Extraordinary
item, net of
income taxes..... 254,826
---------- --------- -------- --------- --------- ----- --- -------
Net income....... $ 295,824 $(318,955) $295,824 $ 78,292 $ 41,830 $(301) $
========== ========= ======== ========= ========= ===== === =======
<CAPTION>
Virginia
Electric and
Power
Company
UK Holding (Exhibit D-5)
---------- -------------
<S> <C> <C>
Consolidating
Income Statement
Operating revenue
and income:
Domestic
electric utility
service......... $4,274,192
Other........... 316,721
---------- -------------
Total operating
revenue and
income.......... 4,590,913
---------- -------------
Expenses:
Electric fuel
and purchased
energy, net..... 986,139
Purchased power
capacity, net... 808,924
Other operation
and
maintenance..... $ 975 959,072
Depreciation,
depletion and
amortization.... 2,457 548,397
Taxes, other
than income..... 281,816
-------------
Total operating
expenses........ 3,432 3,584,348
---------- -------------
Income from
operations....... (3,432) 1,006,565
---------- -------------
Other income and
expense:
Interest
revenue......... 2,544 8,357
Equity in
earnings of
subsidiary
companies.......
Interest revenue
from subsidiary
companies.......
Merger-related
costs...........
Other, net...... 9,518 16,516
---------- -------------
Total other
income and
expense......... 12,062 24,873
---------- -------------
Income before
fixed charges and
income taxes..... 8,630 1,031,438
---------- -------------
Fixed charges:
Interest
charges......... 3,140 277,822
Distributions--
preferred
securities and
preferred
stock........... 47,913
---------- -------------
Total fixed
charges......... 3,140 325,735
---------- -------------
Income before
provision for
income taxes,
minority
interests and
extraordinary
item............. 5,490 705,703
Provision for
income taxes.... (800) 258,033
Minority
interests.......
---------- -------------
Income before
extraordinary
item............. 6,290 447,670
Extraordinary
item, net of
income taxes..... 254,826
---------- -------------
Net income....... $ 6,290 $ 192,844
========== =============
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-2-7
<PAGE>
EXHIBIT D-3
DOMINION CAPITAL, INC.
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion Dominion Dominion
Capital, Inc. Dominion Capital Land Dominion
Consolidated Consolidating Capital Ventures Management Dominion Mortgage Dominion Venture
(Exhibit D-2) Entries (Note B) Corp. Company Lands, Inc. Services, Inc. Investments, Inc.
------------- ------------- ---------- -------- ---------- ----------- -------------- -----------------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents....... $ 124,942 $ (16,003) $ 3 $ 60,638 $ 952 $ (485)
Accounts receiv-
able:
Customers, less
allowance........ (3,327)
Other............ 14,899 4,631 660 4,508 3,909
Receivables from
affiliated compa-
nies.............. (5,183) 5,114 $41 27
Materials and sup-
plies, at average
cost or less:
Plant and gener-
al............... 419 419
Fossil fuel......
Deferred income
taxes--current....
Mortgage loans in
warehouse......... 118,595 118,595
Commodity contract
assets............
Finance receiv-
ables held for
sale.............. 15,000 15,000
Prepayments and
other current as-
sets.............. 36,937 (9,297) 7,689 4,116 29 665 12,383
---------- ----------- ---------- -------- --- ------- -------- -------
Total current as-
sets............. 310,792 (13,760) 13,466 69,262 70 5,553 130,493
---------- ----------- ---------- -------- --- ------- -------- -------
Investments:
Loans receivable,
net............... 2,034,475 (15,000) 34,565 176,659 1,099
Available for sale
securities........ 511,663 630 58,376 327,144
Nuclear
decommissioning
trust funds.......
Investments in
real estate....... 85,914 (14,841) 14,366 53,329
Stocks of subsidi-
ary companies, at
equity............ 192,680 (826,982) 993,415
Notes of subsidi-
ary companies..... (570,833) 461,713
Other............. 160,467 (204,383) 119,762 64,695 $50,282
---------- ----------- ---------- -------- --- ------- -------- -------
Total invest-
ments............ 2,985,199 (1,632,039) 1,624,451 299,730 54,428 327,144 50,282
---------- ----------- ---------- -------- --- ------- -------- -------
Property, plant
and equipment:
Utility plant.....
Exploration and
production proper-
ties..............
Other--non-utili-
ty................ 61,177 (554,159) 1,300 5,936 34 23,983 20,636
Acquisition ad-
justment..........
---------- ----------- ---------- -------- --- ------- -------- -------
Total property,
plant and
equipment........ 61,177 (554,159) 1,300 5,936 34 23,983 20,636
Less accumulated
depreciation, de-
pletion and amor-
tization.......... (22,711) 121,332 (786) (742) (27) (6,157) (10,005)
---------- ----------- ---------- -------- --- ------- -------- -------
Net property,
plant and equip-
ment............. 38,466 (432,827) 514 5,194 7 17,826 10,631
---------- ----------- ---------- -------- --- ------- -------- -------
Deferred charges
and other assets:
Regulatory assets,
net...............
Goodwill, net..... 78,656 48,358
Other............. 142,497 (510,747) 320 340 121,918 204
---------- ----------- ---------- -------- --- ------- -------- -------
Total deferred
charges and other
assets........... 221,153 (510,747) 320 340 170,276 204
---------- ----------- ---------- -------- --- ------- -------- -------
Total assets.... $3,555,610 $(2,589,373) $1,638,751 $374,186 $77 $78,147 $638,544 $50,486
========== =========== ========== ======== === ======= ======== =======
<CAPTION>
Edgen, Inc.
-----------
<S> <C>
ASSETS
Current assets:
Cash and cash
equivalents....... $ 51
Accounts receiv-
able:
Customers, less
allowance........
Other............ 143
Receivables from
affiliated compa-
nies..............
Materials and sup-
plies, at average
cost or less:
Plant and gener-
al...............
Fossil fuel......
Deferred income
taxes--current....
Mortgage loans in
warehouse.........
Commodity contract
assets............
Finance receiv-
ables held for
sale..............
Prepayments and
other current as-
sets.............. 762
-----------
Total current as-
sets............. 956
-----------
Investments:
Loans receivable,
net............... 2,936
Available for sale
securities........
Nuclear
decommissioning
trust funds.......
Investments in
real estate....... 9,264
Stocks of subsidi-
ary companies, at
equity............
Notes of subsidi-
ary companies..... 7,452
Other............. 133
-----------
Total invest-
ments............ 19,785
-----------
Property, plant
and equipment:
Utility plant.....
Exploration and
production proper-
ties..............
Other--non-utili-
ty................ 170
Acquisition ad-
justment..........
-----------
Total property,
plant and
equipment........ 170
Less accumulated
depreciation, de-
pletion and amor-
tization.......... (75)
-----------
Net property,
plant and equip-
ment............. 95
-----------
Deferred charges
and other assets:
Regulatory assets,
net...............
Goodwill, net.....
Other.............
-----------
Total deferred
charges and other
assets...........
-----------
Total assets.... $20,836
===========
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-3-1
<PAGE>
EXHIBIT D-3
DOMINION CAPITAL, INC.
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
Louisiana Optacor
Hydroelectric Old Financial Stanton Trilon
Capital River Services Rincon Associates Dominion Vidalia
Corporation Catalyst Company Securities, Inc. Inc. Stonehouse, LLC Partners, LLC Audit, Inc.
------------- -------- --------- ---------------- ---------- --------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents....... $ 16,209 $225 $ 568 $ 361 $ 17 $ 262
Accounts receiv-
able:
Customers, less
allowance........ 3,327
Other............ 6 256 113 $159
Receivables from
affiliated compa-
nies.............. 1
Materials and sup-
plies, at average
cost or less:
Plant and gener-
al...............
Fossil fuel......
Deferred income
taxes--current....
Mortgage loans in
warehouse.........
Commodity contract
assets............
Finance receiv-
ables held for
sale..............
Prepayments and
other current as-
sets.............. $ 1,306 380 58 1,625 6,088 5
------- -------- ---- -------- ------- ------- ------- ----
Total current as-
sets............. 1,306 19,916 289 2,193 6,705 130 267 160
------- -------- ---- -------- ------- ------- ------- ----
Investments:
Loans receivable,
net............... 587 798
Available for sale
securities........ 125,453
Nuclear
decommissioning
trust funds.......
Investments in
real estate....... 8,955 14,841
Stocks of subsidi-
ary companies, at
equity............
Notes of subsidi-
ary companies..... 1,381 97,576
Other............. 75,919 3,819 3 37,948
------- -------- ---- -------- ------- ------- ------- ----
Total invest-
ments............ 77,300 587 226,848 9,753 14,844 37,948
------- -------- ---- -------- ------- ------- ------- ----
Property, plant
and equipment:
Utility plant.....
Exploration and
production proper-
ties..............
Other--non-utili-
ty................ 553,848 8,317 311
Acquisition ad-
justment..........
------- -------- ---- -------- ------- ------- ------- ----
Total property,
plant and
equipment........ 553,848 8,317 311
Less accumulated
depreciation, de-
pletion and amor-
tization.......... (121,206) (4,702) (126)
------- -------- ---- -------- ------- ------- ------- ----
Net property,
plant and equip-
ment............. 432,642 3,615 185
------- -------- ---- -------- ------- ------- ------- ----
Deferred charges
and other assets:
Regulatory assets,
net...............
Goodwill, net..... 4,140
Other............. 1,957 510,734 2,636 913 14
------- -------- ---- -------- ------- ------- ------- ----
Total deferred
charges and other
assets........... 1,957 510,734 6,776 913 14
------- -------- ---- -------- ------- ------- ------- ----
Total assets.... $80,563 $963,292 $876 $235,817 $20,986 $15,159 $38,229 $160
======= ======== ==== ======== ======= ======= ======= ====
<CAPTION>
Virginia
Financial
Ventures, Inc.
(Note C)
--------------
<S> <C>
ASSETS
Current assets:
Cash and cash
equivalents....... $ 62,144
Accounts receiv-
able:
Customers, less
allowance........
Other............ 514
Receivables from
affiliated compa-
nies..............
Materials and sup-
plies, at average
cost or less:
Plant and gener-
al...............
Fossil fuel......
Deferred income
taxes--current....
Mortgage loans in
warehouse.........
Commodity contract
assets............
Finance receiv-
ables held for
sale..............
Prepayments and
other current as-
sets.............. 11,128
--------------
Total current as-
sets............. 73,786
--------------
Investments:
Loans receivable,
net............... 1,832,831
Available for sale
securities........ 60
Nuclear
decommissioning
trust funds.......
Investments in
real estate.......
Stocks of subsidi-
ary companies, at
equity............ 26,247
Notes of subsidi-
ary companies..... 2,711
Other............. 12,289
--------------
Total invest-
ments............ 1,874,138
--------------
Property, plant
and equipment:
Utility plant.....
Exploration and
production proper-
ties..............
Other--non-utili-
ty................ 801
Acquisition ad-
justment..........
--------------
Total property,
plant and
equipment........ 801
Less accumulated
depreciation, de-
pletion and amor-
tization.......... (217)
--------------
Net property,
plant and equip-
ment............. 584
--------------
Deferred charges
and other assets:
Regulatory assets,
net...............
Goodwill, net..... 26,158
Other............. 14,208
--------------
Total deferred
charges and other
assets........... 40,366
--------------
Total assets.... $1,988,874
==============
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-3-2
<PAGE>
EXHIBIT D-3
DOMINION CAPITAL, INC.
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion Dominion Dominion Dominion
Capital, Inc. Dominion Capital Land Mortgage
Consolidated Consolidating Capital Ventures Management Dominion Services, Dominion Venture
(Exhibit D-2) Entries (Note B) Corp. Company Lands, Inc. Inc. Investments, Inc.
------------- ------------- ---------- -------- ---------- ----------- --------- -----------------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Securities due
within one year... $ 151,953 $ 60,488 $ 91,465
Short-term debt... 237,931 $ 237,931
Accounts payable,
trade............. 9,793 4,669 13 $ 864 $ 456 2,716
Payables to
affiliated
companies......... 1,060 (5,086) 5,508 433 $ 56 60 74
Accrued interest,
payroll and
taxes............. 17,473 (35,092) 7,645 5,682 604 203 4,379 $ 380
Deferred income
taxes-current.....
Dividends
declared..........
Commodity contract
liabilities
Other current
liabilities....... 16,261 11,147 226 100 508 55
---------- ----------- ---------- -------- ------- -------- -------- --------
Total current
liabilities...... 434,471 36,126 251,323 7,079 660 1,227 98,689 380
---------- ----------- ---------- -------- ------- -------- -------- --------
Long-term debt.... 2,047,635 (848,314) 297,534 19,181
Notes payable to
affiliates........ 219,097 (570,833) 328,216 200,266 1,222 51,143 121,865
---------- ----------- ---------- -------- ------- -------- -------- --------
Total Long-term
Debt............. 2,266,732 (1,419,147) 625,750 200,266 1,222 51,143 141,046
---------- ----------- ---------- -------- ------- -------- -------- --------
Deferred credits
and other
liabilities:
Deferred income
taxes............. 99,058 20,738 3,054 (44) 562 52,534 (230)
Investment tax
credits...........
Other............. 9,440 (66,577) 29 9,755 300 618
---------- ----------- ---------- -------- ------- -------- -------- --------
Total deferred
credits and other
liabilities...... 108,498 (66,577) 20,767 12,809 (44) 862 53,152 (230)
Total
liabilities...... 2,809,701 (1,449,598) 897,840 220,154 1,838 53,232 292,887 150
---------- ----------- ---------- -------- ------- -------- -------- --------
Minority
interest.......... 4,997 5,909
Commitments and
contingencies.....
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary
trusts............
Preferred stock
not subject to
mandatory
redemption........
Common
shareholders'
equity:
Common stock..... 8 (62,837) 8 10
Additional paid
in capital....... 693,160 (855,553) 693,160 122,273 1,346 58,089 254,113 63,265
Retained
earnings......... 62,899 (235,628) 62,899 27,002 (3,108) (33,184) 97,944 (12,929)
Accumulated other
comprehensive
income........... (15,155) 14,243 (15,155) (1,152) (6,400)
---------- ----------- ---------- -------- ------- -------- -------- --------
Total common
shareholders'
equity........... 740,912 (1,139,775) 740,912 148,123 (1,762) 24,915 345,657 50,336
---------- ----------- ---------- -------- ------- -------- -------- --------
Total
liabilities and
shareholders'
equity.......... $3,555,610 $(2,589,373) $1,638,751 $374,186 $ 77 $ 78,147 $638,544 $ 50,486
========== =========== ========== ======== ======= ======== ======== ========
<CAPTION>
Edgen, Inc.
-----------
<S> <C>
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Securities due
within one year...
Short-term debt...
Accounts payable,
trade............. $ 375
Payables to
affiliated
companies......... 15
Accrued interest,
payroll and
taxes............. 74
Deferred income
taxes-current.....
Dividends
declared..........
Commodity contract
liabilities
Other current
liabilities....... 116
-----------
Total current
liabilities...... 580
-----------
Long-term debt....
Notes payable to
affiliates........
-----------
Total Long-term
Debt.............
-----------
Deferred credits
and other
liabilities:
Deferred income
taxes............. (1,108)
Investment tax
credits...........
Other.............
-----------
Total deferred
credits and other
liabilities...... (1,108)
Total
liabilities...... (528)
-----------
Minority
interest..........
Commitments and
contingencies.....
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary
trusts............
Preferred stock
not subject to
mandatory
redemption........
Common
shareholders'
equity:
Common stock..... 1
Additional paid
in capital....... 28,397
Retained
earnings......... (7,034)
Accumulated other
comprehensive
income...........
-----------
Total common
shareholders'
equity........... 21,364
-----------
Total
liabilities and
shareholders'
equity.......... $20,836
===========
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-3-3
<PAGE>
DOMINION CAPITAL, INC.
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
Louisiana Optacor
Hydroelectric Old Financial Trilon
Capital River Services Rincon Stanton Dominion Vidalia
Corporation Catalyst Company Securities, Inc. Associates Inc. Stonehouse, LLC Partners, LLC Audit, Inc.
------------- -------- --------- ---------------- --------------- --------------- ------------- -----------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
HAREHOLDERS'SEQUITY
Current
liabilities:
Securities due
within one year...
Short-term debt...
Accounts payable,
trade............. $ 50 $ 4 $ 85 $ 561
Payables to
affiliated
companies.........
Accrued interest,
payroll and
taxes............. $ 1,087 $ 13,434 992 13 $129
Deferred income
taxes-current.....
Dividends
declared..........
Commodity contract
liabilities
Other current
liabilities....... 1,915 155 67 102
------- -------- ------- -------- ------- ------- ------- ----
Total current
liabilities...... 1,087 15,349 50 1,151 165 663 129
------- -------- ------- -------- ------- ------- ------- ----
Long-term debt.... 44,617 776,861 159,955 10,292 10,965
Notes payable to
affiliates........ 2,039 232
------- -------- ------- -------- ------- ------- ------- ----
Total Long-term
Debt............. 44,617 776,861 159,955 12,331 10,965 232
------- -------- ------- -------- ------- ------- ------- ----
Deferred credits
and other
liabilities:
Deferred income
taxes............. 27,998 (105) 49 836 (14)
Investment tax
credits...........
Other............. 64,688 (1,166) 1,793
------- -------- ------- -------- ------- ------- ------- ----
Total deferred
credits and other
liabilities...... 27,998 64,688 (105) 49 (330) 1,793 (14)
Total
liabilities...... 73,702 856,898 (55) 161,155 12,166 13,421 347
------- -------- ------- -------- ------- ------- ------- ----
Minority
interest.......... (912)
Commitments and
contingencies.....
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary
trusts............
Preferred stock
not subject to
mandatory
redemption........
Common
shareholders'
equity:
Common stock..... 1 1,000 10,199 1,526
Additional paid
in capital....... 106,394 12,201 16,168 (1,649) $38,229
Retained
earnings......... 6,860 (11,270) 64,183 1,182 212 (187)
Accumulated other
comprehensive
income........... (6,689)
------- -------- ------- -------- ------- ------- ------- ----
Total common
shareholders'
equity........... 6,861 106,394 931 74,662 9,732 1,738 38,229 (187)
------- -------- ------- -------- ------- ------- ------- ----
Total
liabilities and
shareholders'
equity.......... $80,563 $963,292 $ 876 $235,817 $20,986 $15,159 $38,229 $160
======= ======== ======= ======== ======= ======= ======= ====
<CAPTION>
Virginia
Financial
Ventures, Inc.
(Note C)
--------------
<S> <C>
LIABILITIES AND
HAREHOLDERS'SEQUITY
Current
liabilities:
Securities due
within one year...
Short-term debt...
Accounts payable,
trade.............
Payables to
affiliated
companies.........
Accrued interest,
payroll and
taxes............. $ 17,943
Deferred income
taxes-current.....
Dividends
declared..........
Commodity contract
liabilities
Other current
liabilities....... 1,870
--------------
Total current
liabilities...... 19,813
--------------
Long-term debt.... 1,576,544
Notes payable to
affiliates........ 84,947
--------------
Total Long-term
Debt............. 1,661,491
--------------
Deferred credits
and other
liabilities:
Deferred income
taxes............. (5,212)
Investment tax
credits...........
Other.............
--------------
Total deferred
credits and other
liabilities...... (5,212)
Total
liabilities...... 1,676,092
--------------
Minority
interest..........
Commitments and
contingencies.....
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary
trusts............
Preferred stock
not subject to
mandatory
redemption........
Common
shareholders'
equity:
Common stock..... 50,100
Additional paid
in capital....... 156,727
Retained
earnings......... 105,957
Accumulated other
comprehensive
income........... (2)
--------------
Total common
shareholders'
equity........... 312,782
--------------
Total
liabilities and
shareholders'
equity.......... $1,988,874
==============
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-3-4
<PAGE>
EXHIBIT D-3
DOMINION CAPITAL, INC.
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion Dominion Dominion Dominion
Capital, Inc. Dominion Capital Land Mortgage
Consolidated Consolidating Capital Ventures Management Dominion Services, Dominion Venture
(Exhibit D-2) Entries (Note B) Corp. Company Lands, Inc. Inc. Investments, Inc. Edgen, Inc.
------------- ------------- -------- -------- ---------- ----------- --------- ----------------- -----------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenue
and income:
Domestic
electric utility
service.........
Other........... $473,364 $ 89,250 $ (4,562) $51,308 $ 9 $36,070 $137,523 $3,579 $ 2,929
-------- --------- -------- ------- ----- ------- -------- ------ -------
Total operating
revenue and
income.......... 473,364 89,250 (4,562) 51,308 9 36,070 137,523 3,579 2,929
-------- --------- -------- ------- ----- ------- -------- ------ -------
Expenses:
Electric fuel
and purchased
energy, net.....
Purchased power
capacity, net...
Other operation
and
maintenance..... 170,470 (24,846) 8,793 22,730 859 39,810 70,036 3,863
Depreciation,
depletion and
amortization.... 31,951 (13,882) 1,050 661 9 19 26,725 144 15
Taxes, other
than income..... 5,459 (1,742) 265 236 57 563 4,088 176
-------- --------- -------- ------- ----- ------- -------- ------ -------
Total operating
expenses........ 207,880 (40,470) 10,108 23,627 925 40,392 100,849 144 4,054
-------- --------- -------- ------- ----- ------- -------- ------ -------
Income from
operations....... 265,484 129,720 (14,670) 27,681 (916) (4,322) 36,674 3,435 (1,125)
-------- --------- -------- ------- ----- ------- -------- ------ -------
Other income and
expense:
Interest
revenue......... (220,100) 951 20,903 94 42,582 (21) 606
Equity in
earnings of
subsidiary
companies....... (93,923) 93,923
Interest revenue
from subsidiary
companies....... (29,684) 24,218
Merger-related
costs...........
Other, net...... 8,579
-------- --------- -------- ------- ----- ------- -------- ------ -------
Total other
income and
expense......... (335,128) 119,092 20,903 94 42,582 (21) 606
-------- --------- -------- ------- ----- ------- -------- ------ -------
Income before
fixed charges and
income taxes..... 265,484 (205,408) 104,422 48,584 (916) (4,228) 79,256 3,414 (519)
Fixed charges:
Interest
charges......... 151,966 (110,314) 44,085 10,363 79 2,554 21,380 1
Distributions--
preferred
securities and
preferred
stock...........
-------- --------- -------- ------- ----- ------- -------- ------ -------
Total fixed
charges......... 151,966 (110,314) 44,085 10,363 79 2,554 21,380 1
-------- --------- -------- ------- ----- ------- -------- ------ -------
Income before
provision for
income taxes,
minority
interests and
extraordinary
item............ 113,518 (95,094) 60,337 38,221 (995) (6,782) 57,876 3,414 (520)
Provision for
income taxes.... 35,226 (17,955) 14,606 (353) (2,343) 21,228 1,197 (228)
Minority
interests....... (1,527) 1,451
-------- --------- -------- ------- ----- ------- -------- ------ -------
Income before
extraordinary
item............ 78,292 (93,567) 78,292 22,164 (642) (4,439) 36,648 2,217 (292)
Extraordinary
item, net of
income taxes....
-------- --------- -------- ------- ----- ------- -------- ------ -------
Net income...... $ 78,292 $ (93,567) $ 78,292 $22,164 $(642) $(4,439) $ 36,648 $2,217 $ (292)
======== ========= ======== ======= ===== ======= ======== ====== =======
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-3-5
<PAGE>
EXHIBIT D-3
DOMINION CAPITAL, INC.
CONSOLIDATING INCOME STATEMENT--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Louisiana Optacor
Hydroelectric Old Financial Trilon
Capital River Services Rincon Stanton Dominion Vidalia
Corporation Catalyst Company Securities, Inc Associates Inc Stonehouse, LLC Partners, LLC Audit, Inc
------------- -------- --------- --------------- -------------- --------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenue
and income:
Domestic elec-
tric utility
service.........
Other........... $119,405 $10,272 $3,916 $6,787 $295
------ -------- ------- ------- ------ ------ ------- ----
Total operating
revenue and
income.......... 119,405 10,272 3,916 6,787 295
------ -------- ------- ------- ------ ------ ------- ----
Expenses:
Electric fuel
and purchased
energy, net.....
Purchased power
capacity, net...
Other operation
and mainte-
nance........... 19,866 $ 2,148 508 1,115 5,822 $ 685 65
Depreciation,
depletion and
amortization.... $ 59 13,788 32 1,173 499 88 5
Taxes, other
than income..... 1,687 67 2 56 4
------ -------- ------- ------- ------ ------ ------- ----
Total operating
expenses........ 59 35,341 2,247 1,681 1,616 5,966 690 69
------ -------- ------- ------- ------ ------ ------- ----
Income from oper-
ations........... (59) 84,064 (2,247) 8,591 2,300 821 (690) 226
------ -------- ------- ------- ------ ------ ------- ----
Other income and
expense:
Interest reve-
nue............. 7,913 4,505 153 4 3 153
Equity in
earnings of
subsidiary
companies.......
Interest revenue
from subsidiary
companies....... 45 5,421
Merger-related
costs...........
Other, net...... (8,579)
------ -------- ------- ------- ------ ------ ------- ----
Total other in-
come and ex-
pense........... 7,958 4,505 153 5,425 3 (8,426)
------ -------- ------- ------- ------ ------ ------- ----
Income before
fixed charges and
income taxes..... 7,899 88,569 (2,094) 14,016 2,303 821 (9,116) 226
Fixed charges:
Interest
charges......... 5,431 79,921 153 10,104 1,072 679 30 15
Distributions--
preferred
securities and
preferred
stock...........
------ -------- ------- ------- ------ ------ ------- ----
Total fixed
charges......... 5,431 79,921 153 10,104 1,072 679 30 15
------ -------- ------- ------- ------ ------ ------- ----
Income before
provision for
income taxes,
minority
interests and
extraordinary
item............ 2,468 8,648 (2,247) 3,912 1,231 142 (9,146) 211
Provision for
income taxes.... 992 (783) 974 (125) 75
Minority inter-
ests............ 76
------ -------- ------- ------- ------ ------ ------- ----
Income before
extraordinary
item............ 1,476 8,648 (1,464) 2,938 1,280 142 (9,146) 136
Extraordinary
item, net of
income taxes....
------ -------- ------- ------- ------ ------ ------- ----
Net income...... $1,476 $ 8,648 $(1,464) $ 2,938 $1,280 $ 142 $(9,146) $136
====== ======== ======= ======= ====== ====== ======= ====
<CAPTION>
Virginia
Financial
Ventures, Inc.
--------------
(Note B)
<S> <C>
Operating revenue
and income:
Domestic elec-
tric utility
service.........
Other........... $16,583
--------------
Total operating
revenue and
income.......... 16,583
--------------
Expenses:
Electric fuel
and purchased
energy, net.....
Purchased power
capacity, net...
Other operation
and mainte-
nance........... 19,016
Depreciation,
depletion and
amortization.... 1,566
Taxes, other
than income.....
--------------
Total operating
expenses........ 20,582
--------------
Income from oper-
ations........... (3,999)
--------------
Other income and
expense:
Interest reve-
nue............. 142,254
Equity in
earnings of
subsidiary
companies.......
Interest revenue
from subsidiary
companies.......
Merger-related
costs...........
Other, net......
--------------
Total other in-
come and ex-
pense........... 142,254
--------------
Income before
fixed charges and
income taxes..... 138,255
Fixed charges:
Interest
charges......... 86,413
Distributions--
preferred
securities and
preferred
stock...........
--------------
Total fixed
charges......... 86,413
--------------
Income before
provision for
income taxes,
minority
interests and
extraordinary
item............ 51,842
Provision for
income taxes.... 17,941
Minority inter-
ests............
--------------
Income before
extraordinary
item............ 33,901
Extraordinary
item, net of
income taxes....
--------------
Net income...... $33,901
==============
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-3-6
<PAGE>
EXHIBIT D-4
DOMINION ENERGY, INC.
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Foreign
Dominion Domestic Power Power Dominion
Energy, Inc Dominion Oil & Gas Generation Generation Energy
Consolidated Consolidating Energy, Consolidated Consolidated Consolidated Management
(Exhibit D-2) Entries Inc. (Exhibit D-4-1) (Exhibit D-4-2) (Exhibit D-4-3) Inc.
------------- ------------- ---------- --------------- --------------- --------------- ----------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents.......... $ 61,555 $ (2,916) $ 9,744 $ 12 $ 54,715
Accounts receivable:
Customers, less
allowance............
Other................. 179,961 $ (695,233) 332,619 478,673 49,488 14,247 $167
Receivables from
affiliated
companies............ 505 505
Materials and
supplies, at average
cost or less:
Plant and general..... 18,730 15,266 3,311 153
Fossil fuel...........
Deferred income
taxes--current.......
Mortgage loans in
warehouse............
Commodity contract
assets...............
Finance receivables
held for sale........
Prepayments and other
current assets....... 34,305 (6,973) 10,346 11,204 1,636 18,092
---------- ----------- ---------- ---------- -------- -------- ----
Total current assets.. 295,056 (702,206) 340,554 514,887 54,447 87,207 167
---------- ----------- ---------- ---------- -------- -------- ----
Investments:
Loans receivable,
net..................
Available for sale
securities...........
Nuclear
decommissioning trust
funds................
Investments in real
estate...............
Stocks of subsidiary
companies, at
equity............... 209,227 (837,947) 913,784 23,044 110,346
Notes of subsidiary
companies............
Other................. 104,625 (377,302) 306,356 58,162 95,304 22,105
---------- ----------- ---------- ---------- -------- -------- ----
Total investments..... 313,852 (1,215,249) 1,220,140 81,206 205,650 22,105
---------- ----------- ---------- ---------- -------- -------- ----
Property, plant and
equipment:
Utility plant.........
Exploration and
production
properties........... 1,127,325 1,127,325
Other--non-utility.... 928,383 13,782 79,221 356,299 479,081
Acquisition
adjustment...........
---------- ----------- ---------- ---------- -------- -------- ----
Total property, plant
and equipment........ 2,055,708 13,782 1,206,546 356,299 479,081
Less accumulated
depreciation,
depletion and
amortization......... 432,605 2,273 273,680 13,846 142,806
---------- ----------- ---------- ---------- -------- -------- ----
Net property, plant
and equipment........ 1,623,103 11,509 932,866 342,453 336,275
Deferred charges and
other assets:
Regulatory assets,
net..................
Goodwill, net......... 15,136 15,793 (657)
Prepaid pension
costs................
Other investments.....
Other.................
---------- ----------- ---------- ---------- -------- -------- ----
Total deferred charges
and other assets..... 15,136 15,793 (657)
---------- ----------- ---------- ---------- -------- -------- ----
Total assets.......... $2,247,147 $(1,917,455) $1,572,203 $1,544,752 $602,550 $444,930 $167
========== =========== ========== ========== ======== ======== ====
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-4-1
<PAGE>
EXHIBIT D-4
DOMINION ENERGY, INC.
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
Foreign
Dominion Domestic Power Power Dominion
Energy, Inc. Dominion Oil & Gas Generation Generation Energy
Consolidated Consolidating Energy, Consolidated Consolidated Consolidated Management
(Exhibit D-2) Entries Inc. (Exhibit D-4-1) (Exhibit D-4-2) (Exhibit D-4-3) Inc.
------------- ------------- ---------- --------------- --------------- --------------- ----------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Liabilities and
Shareholders' Equity
Current liabilities:
Securities due within
one year.............. $ 8,850 $ 6,213 $ 2,637
Short-term debt........ 57,181 $ (4,726) 61,907
Accounts payable,
trade................. 160,820 (695,810) $ 365,867 $ 436,556 47,088 6,780 $ 339
Payables to affiliated
companies............. 4,461 4,461
Accrued interest,
payroll and taxes..... 24,804 (4,117) 2,515 5,362 5,255 15,847 (58)
Deferred income taxes--
current...............
Dividends declared.....
Commodity contract
liabilities...........
Other current
liabilities........... 30,907 3,273 17,213 8,304 2,117
---------- ----------- ---------- ---------- -------- -------- -----
Total current
liabilities.......... 287,023 (704,653) 376,116 459,131 66,860 89,288 281
---------- ----------- ---------- ---------- -------- -------- -----
Long-term debt......... 965,081 288,466 380,951 258,787 36,877
---------- ----------- ---------- ---------- -------- -------- -----
Notes payable to
affiliates............ 120,712 (390,396) 206,494 256,569 (1,223) 49,268
---------- ----------- ---------- ---------- -------- -------- -----
Deferred credits and
other liabilities:
Deferred income taxes.. 131,318 42,597 66,831 19,480 2,410
Investment tax
credits...............
Other.................. 36,862 45,919 (1,323) (7,401) (333)
---------- ----------- ---------- ---------- -------- -------- -----
Total deferred credits
and other
liabilities.......... 168,180 88,516 65,508 12,079 2,077
---------- ----------- ---------- ---------- -------- -------- -----
Total liabilities..... 1,540,996 (1,095,049) 959,592 1,162,159 336,503 177,510 281
---------- ----------- ---------- ---------- -------- -------- -----
Minority interest...... 93,540 14,566 931 976 77,067
Commitments and
contingencies.........
Obligated mandatorily
redeemable preferred
securities of
subsidiary trusts.....
Preferred stock not
subject to mandatory
redemption............
Common shareholders'
equity:
Common stock.......... 208 (194,057) 208 35,003 159,054
Additional paid in
capital.............. 570,942 (386,628) 570,942 219,077 167,174 377
Retained earnings..... 38,276 (259,519) 38,276 165,817 62,894 30,922 (114)
Accumulated other
comprehensive
income............... 3,185 3,232 3,185 (3,232)
---------- ----------- ---------- ---------- -------- -------- -----
Total common
shareholders'
equity............... 612,611 (836,972) 612,611 381,662 265,071 190,353 (114)
---------- ----------- ---------- ---------- -------- -------- -----
Total liabilities and
shareholders'
equity............... $2,247,147 $(1,917,455) $1,572,203 $1,544,752 $602,550 $444,930 $ 167
========== =========== ========== ========== ======== ======== =====
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-4-2
<PAGE>
EXHIBIT D-4
DOMINION ENERGY, INC.
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion Domestic Power Foreign Power Dominion
Energy, Inc. Dominion Oil & Gas Generation Generation Energy
Consolidated Consolidating Energy, Consolidated Consolidated Consolidated Management
(Exhibit D-2) Entries Inc. (Exhibit D-1-4) (Exhibit D-4-2) (Exhibit D-4-3) Inc.
------------- ------------- -------- --------------- --------------- --------------- ----------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating revenue and
income:
Domestic electric
utility service
Other................. $456,033 $ (479) $ 1,589 $256,097 $92,368 $106,458
-------- -------- -------- -------- ------- -------- -----
Total operating
revenue and income.... 456,033 (479) 1,589 256,097 92,368 106,458
-------- -------- -------- -------- ------- -------- -----
Expenses:
Electric fuel and
purchased energy,
net................... 9,881 9,881
Purchased power
capacity, net
Other operation and
maintenance........... 222,724 (748) 33,548 115,478 29,472 44,802 $ 172
Depreciation, depletion
and amortization...... 131,332 4,275 93,126 9,764 24,167
Taxes, other than
income................ 15,706 (1,296) 9,929 3,496 3,574 3
-------- -------- -------- -------- ------- -------- -----
Total operating
expenses.............. 379,643 (748) 46,408 218,533 42,732 72,543 175
-------- -------- -------- -------- ------- -------- -----
Income from operations.. 76,390 269 (44,819) 37,564 49,636 33,915 (175)
-------- -------- -------- -------- ------- -------- -----
Other income and
expense:
Interest revenue........ 15,659 (22,276) 19,556 4,029 6,629 7,721
Equity in earnings of
subsidiary companies... (90,464) 90,464
Interest revenue from
subsidiary companies
Merger-related costs
Other, net............. 29,091 3,008 21,862 194 4,027
-------- -------- -------- -------- ------- -------- -----
Total other income and
expense............... 44,750 (112,740) 113,028 25,891 6,823 11,748
-------- -------- -------- -------- ------- -------- -----
Income before fixed
charges and income
taxes.................. 121,140 (112,471) 68,209 63,455 56,459 45,663 (175)
Fixed charges:
Interest charges....... 78,207 (23,510) 33,037 33,199 15,348 20,133
Distributions--preferred
securities and
preferred stock........
-------- -------- -------- -------- ------- -------- -----
Total fixed charges.... 78,207 (23,510) 33,037 33,199 15,348 20,133
-------- -------- -------- -------- ------- -------- -----
Income before provision
for income taxes,
minority interests and
extraordinary item..... 42,933 (88,961) 35,172 30,256 41,111 25,530 (175)
Provision for income
taxes.................. (16,711) (6,730) (23,058) 15,200 (2,062) (61)
Minority interests...... 17,814 1,305 71 138 198 16,102
-------- -------- -------- -------- ------- -------- -----
Income before
extraordinary item..... 41,830 (90,266) 41,831 53,176 25,713 11,490 (114)
Extraordinary item, net
of income taxes
-------- -------- -------- -------- ------- -------- -----
Net income.............. $ 41,830 $(90,266) $ 41,831 $ 53,176 $25,713 $ 11,490 $(114)
======== ======== ======== ======== ======= ======== =====
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-4-3
<PAGE>
EXHIBIT D-4-1
DOMINION ENERGY, INC.-OIL AND GAS
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
San Juan Energy Canada
Oil & Gas Dominion Reserves Black Dominion Partners Dominion Limited
Consolidated Consolidating Inc Warrior Reserves- LLC Storage Inc. Consolidated
(Exhibit D-4) Entries (Exhibit D-4-1(a)) Basin, Inc Utah (Note E) (Note D) (Exhibit D-4-1(b))
------------- ------------- ------------------ ---------- --------- -------- ------------ ------------------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents..... $ 9,744 $ 1,521 $ 1,824 $ 1 $ 6,398
Accounts
receivable:
Customers, less
allowance.......
Other............ 478,673 $ (838) 426,938 5,120 $12,699 $ 20,016 14,738
Receivables from
affiliated
companies.......
Materials and
supplies, at
average cost or
less:
Plant and
general........ 15,266 10,247 115 982 3,922
Fossil fuel.....
Deferred income
taxes--current..
Mortgage loans in
warehouse.......
Commodity
contract
assets..........
Finance
receivables held
for sale........
Prepayments and
other current
assets.......... 11,204 3,031 4,035 2,610 1,528
---------- ------- -------- ------- ------- -------- ---- --------
Total current
assets......... 514,887 (838) 441,737 11,094 16,291 20,016 1 26,586
---------- ------- -------- ------- ------- -------- ---- --------
Investments:
Loans receivable,
net.............
Available for
sale
securities......
Nuclear
decommissioning
trust funds.....
Investments in
real estate.....
Stocks of
subsidiary
companies, at
equity.......... 23,044 (3,423) 11,844 14,623
Notes of
subsidiary
companies.......
Other............ 58,162 64,849 (7,012) 300 25
---------- ------- -------- ------- ------- -------- ---- --------
Total
investments.... 81,206 (3,423) 76,693 (7,012) 300 14,648
---------- ------- -------- ------- ------- -------- ---- --------
Property, plant
and equipment:
Utility plant....
Exploration and
production
properties...... 1,127,325 436,446 9,272 42,753 123,164 515,690
Other--non-
utility......... 79,221 55,806 3,324 17,105 2,986
Acquisition
adjustment......
---------- ------- -------- ------- ------- -------- ---- --------
Total property,
plant and
equipment...... 1,206,546 492,252 12,596 59,858 123,164 518,676
Less accumulated
depreciation,
depletion and
amortization.... 273,680 205,266 4,742 12,949 15,309 35,414
---------- ------- -------- ------- ------- -------- ---- --------
Net property,
plant and
equipment...... 932,866 286,986 7,854 46,909 107,855 483,262
---------- ------- -------- ------- ------- -------- ---- --------
Deferred charges
and other
assets:
Regulatory
assets, net.....
Goodwill, net.... 15,793 13,740 2,053
Prepaid pension
costs...........
Other
investments.....
Other............
---------- ------- -------- ------- ------- -------- ---- --------
Total deferred
charges and
other assets... 15,793 13,740 2,053
---------- ------- -------- ------- ------- -------- ---- --------
Total assets.... $1,544,752 $(4,261) $819,156 $11,936 $63,200 $127,871 $301 $526,549
========== ======= ======== ======= ======= ======== ==== ========
</TABLE>
D-4-4
<PAGE>
EXHIBIT D-4-1
DOMINION ENERGY, INC.-OIL AND GAS
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
Energy Canada
San Juan Limited
Oil & Gas Dominion Reserves Black Dominion Partners Dominion Consolidated
Consolidated Consolidating Inc Warrior Reserves- LLC Storage, Inc. (Exhibit D-4-1
(Exhibit D-4) Entries (Exhibit D-4-1(a)) Basin, Inc Utah (Note E) (Note D) (b))
------------- ------------- ------------------ ---------- --------- -------- ------------- --------------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Securities due
within one
year............
Short-term debt..
Accounts payable,
trade........... $ 436,556 $ (838) $392,935 $ 4,816 $12,021 $ 3,976 $ 23,646
Payables to
affiliated
companies.......
Accrued interest,
payroll and
taxes........... 5,362 2,766 (123) (1,148) 2,355 $(58) 1,570
Deferred income
taxes--current..
Dividends
declared........
Commodity
contract
liabilities.....
Other current
liabilities..... 17,213 6,820 10,393
---------- ------- -------- ------- ------- -------- ---- --------
Total current
liabilities.... 459,131 (838) 402,521 4,693 10,873 6,331 (58) 35,609
---------- ------- -------- ------- ------- -------- ---- --------
Long-term debt... 380,951 69 380,882
---------- ------- -------- ------- ------- -------- ---- --------
Notes payable to
affiliates...... 256,569 158,978 17,087 64,194 16,310
---------- ------- -------- ------- ------- -------- ---- --------
Deferred credits
and other
liabilities:
Deferred income
taxes........... 66,831 59,605 541 7,978 535 (1,828)
Investment tax
credits.........
Other............ (1,323) (3,172) (646) (91) 2,586
---------- ------- -------- ------- ------- -------- ---- --------
Total deferred
credits and
other
liabilities.... 65,508 56,433 541 7,332 444 758
---------- ------- -------- ------- ------- -------- ---- --------
Total
liabilities.... 1,162,159 (838) 618,001 5,234 35,292 70,969 (58) 433,559
---------- ------- -------- ------- ------- -------- ---- --------
Minority
interest........ 931 931
Commitments and
contingencies...
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary
trusts..........
Preferred stock
not subject to
mandatory
redemption......
Common
shareholders'
equity:
Common stock....
Additional paid
in capital..... 219,077 (2,980) 72,336 8,500 49,122 (108) 92,207
Retained
earnings....... 165,817 (443) 127,888 6,702 19,408 7,780 467 4,015
Accumulated
other
comprehensive
income......... (3,232) (3,232)
---------- ------- -------- ------- ------- -------- ---- --------
Total common
shareholders'
equity......... 381,662 (3,423) 200,224 6,702 27,908 56,902 359 92,990
---------- ------- -------- ------- ------- -------- ---- --------
Total
liabilities and
shareholders'
equity......... $1,544,752 $(4,261) $819,156 $11,936 $63,200 $127,871 $301 $526,549
========== ======= ======== ======= ======= ======== ==== ========
</TABLE>
D-4-5
<PAGE>
EXHIBIT D-4-1
DOMINION ENERGY, INC.-OIL AND GAS
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion
Energy Canada
Dominion San Juan Dominion Limited
Oil & Gas Reserves Inc. Black Dominion Partners Storage, Consolidated
Consolidated Consolidating (Exhibit D-4- Warrior Reserves- LLC Inc. (Exhibit
(Exhibit D-4) Entries 1(a)) Basin, Inc. Utah (Note E) (Note D) D-4-1(b))
------------- ------------- ------------- ----------- --------- -------- -------- -------------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenue and
income:
Domestic electric
utility service.......
Other................. $256,097 $103,135 $12,098 $22,039 $ 22,219 $96,606
-------- ----- -------- ------- ------- -------- ----- -------
Total operating
revenue and income.... 256,097 103,135 12,098 22,039 22,219 96,606
-------- ----- -------- ------- ------- -------- ----- -------
Expenses:
Electric fuel and
purchased energy,
net...................
Purchased power
capacity, net.........
Other operation and
maintenance........... 115,478 53,366 9,860 5,750 8,006 38,496
Depreciation,
depletion and
amortization.......... 93,126 42,527 829 3,796 15,319 $ 133 30,522
Taxes, other than
income................ 9,929 4,729 677 485 1,639 2,399
-------- ----- -------- ------- ------- -------- ----- -------
Total operating
expenses.............. 218,533 100,622 11,366 10,031 24,964 133 71,417
-------- ----- -------- ------- ------- -------- ----- -------
Income from
operations............. 37,564 2,513 732 12,008 (2,745) (133) 25,189
-------- ----- -------- ------- ------- -------- ----- -------
Other income and
expense:
Interest revenue...... 4,029 3,324 517 52 136
Equity in earnings of
subsidiary companies.. $(388) 388
Interest revenue from
subsidiary companies..
Merger--related
costs.................
Other, net............ 21,862 17,160 32 37 4,633
-------- ----- -------- ------- ------- -------- ----- -------
Total other income and
expense............... 25,891 (388) 20,872 549 37 52 4,769
-------- ----- -------- ------- ------- -------- ----- -------
Income before fixed
charges and income
taxes.................. 63,455 (388) 23,385 1,281 12,045 (2,693) (133) 29,958
-------- ----- -------- ------- ------- -------- ----- -------
Fixed charges:
Interest charges...... 33,199 9,505 751 3,640 19,304
Distributions--
preferred securities
and preferred stock...
-------- ----- -------- ------- ------- -------- ----- -------
Total fixed charges... 33,199 9,505 751 3,640 19,304
-------- ----- -------- ------- ------- -------- ----- -------
Income before provision
for income taxes,
minority interests and
extraordinary item..... 30,256 (388) 13,880 1,281 11,294 (6,333) (133) 10,654
Provision for income
taxes................. (23,058) (11,792) (4,749) 2,300 (14,112) (173) 5,468
Minority interests.... 138 138
-------- ----- -------- ------- ------- -------- ----- -------
Income before
extraordinary item..... 53,176 (388) 25,534 6,030 8,995 7,779 40 5,186
Extraordinary item, net
of income taxes........
-------- ----- -------- ------- ------- -------- ----- -------
Net income............. $ 53,176 $(388) $ 25,534 $ 6,030 $ 8,995 $ 7,779 $ 40 $ 5,186
======== ===== ======== ======= ======= ======== ===== =======
</TABLE>
D-4-6
<PAGE>
EXHIBIT D-4-1(a)
DOMINION RESERVES, INC.
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
Dominion Carthage Dominion Appalachian Dominion Gas
Reserves, Dominion Energy Cypress Appalachian Development Processing Dominion
Consolidated Consolidating Reserves Services Energy Development Properties LLC Michigan, Inc. Midwest
(Exhibit D-4-1) Entries Inc. Inc. Inc. Inc. (Note G) (Exhibit D-4-1(c)) Energy
--------------- ------------- -------- -------- ------- ----------- -------------- ------------------ --------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents...... $ 1,521 $ 1,031 $ 71 $ 233 $ 188 $ (63)
Accounts
receivable:
Customers, less
allowance.......
Other........... 426,938 63,067 176,315 $507 31,773 $ 34,056 3,175 37,939
Receivables from
affiliated
companies........
Materials and
supplies, at
average cost or
less:
Plant and
general......... 10,247 386 7,254 515
Fossil fuel.....
Deferred income
taxes--current...
Mortgage loans in
warehouse........
Commodity
contract assets..
Finance
receivables held
for sale.........
Prepayments and
other current
assets........... 3,031 1,521 401 1,106 24 2
-------- --------- -------- -------- ---- ------- -------- ------- -------
Total current
assets.......... 441,737 66,005 184,041 507 33,112 34,056 3,387 38,393
-------- --------- -------- -------- ---- ------- -------- ------- -------
Investments:
Loans receivable,
net..............
Available for
sale securities..
Nuclear
decommissioning
trust funds......
Investments in
real estate......
Stocks of
subsidiary
companies, at
equity........... 11,844 $(139,626) 142,939 34 67 8,430
Notes of
subsidiary
companies........
Other............ 64,849 1,398 1,209 50 13,653
-------- --------- -------- -------- ---- ------- -------- ------- -------
Total
investments..... 76,693 (139,626) 144,337 1,243 117 8,430 13,653
-------- --------- -------- -------- ---- ------- -------- ------- -------
Property, plant
and equipment:
Utility plant....
Exploration and
production
properties....... 436,446 290,137 1,137 135,846
Other--non-
utility.......... 55,806 5,405 416 28 5,969 27,330 1,263
Acquisition
adjustment.......
-------- --------- -------- -------- ---- ------- -------- ------- -------
Total property,
plant and
equipment....... 492,252 295,542 416 28 7,106 135,846 27,330 1,263
Less accumulated
depreciation,
depletion and
amortization..... 205,266 128,117 270 18 1,688 56,046 13,117 677
-------- --------- -------- -------- ---- ------- -------- ------- -------
Net property,
plant and
equipment........ 286,986 167,425 146 10 5,418 79,800 14,213 586
-------- --------- -------- -------- ---- ------- -------- ------- -------
Deferred charges
and other assets:
Regulatory
assets, net......
Goodwill, net.... 13,740 4,181 801 2,110
Prepaid pension
costs............
Other
investments......
Other............
-------- --------- -------- -------- ---- ------- -------- ------- -------
Total deferred
charges and
other assets.... 13,740 4,181 801 2,110
-------- --------- -------- -------- ---- ------- -------- ------- -------
Total assets.... $819,156 $(139,626) $377,767 $189,611 $517 $39,448 $115,966 $26,030 $52,632
======== ========= ======== ======== ==== ======= ======== ======= =======
<CAPTION>
Dominion Phoenix
Reserves Dominion Dominion
Great Lakes Gulf Reserves Energy
Compression Coast Indiana (Note F)
----------- -------- --------- --------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents...... $ 15 $ 29 $ 17
Accounts
receivable:
Customers, less
allowance.......
Other........... 3,637 $ 807 669 74,993
Receivables from
affiliated
companies........
Materials and
supplies, at
average cost or
less:
Plant and
general......... 307 1,785
Fossil fuel.....
Deferred income
taxes--current...
Mortgage loans in
warehouse........
Commodity
contract assets..
Finance
receivables held
for sale.........
Prepayments and
other current
assets........... 21 3 (98) 51
----------- -------- --------- --------
Total current
assets.......... 3,980 810 600 76,846
----------- -------- --------- --------
Investments:
Loans receivable,
net..............
Available for
sale securities..
Nuclear
decommissioning
trust funds......
Investments in
real estate......
Stocks of
subsidiary
companies, at
equity...........
Notes of
subsidiary
companies........
Other............ 48,539
----------- -------- --------- --------
Total
investments..... 48,539
----------- -------- --------- --------
Property, plant
and equipment:
Utility plant....
Exploration and
production
properties....... 674 1,137 7,515
Other--non-
utility.......... 8,048 7,207 140
Acquisition
adjustment.......
----------- -------- --------- --------
Total property,
plant and
equipment....... 8,722 1,137 14,722 140
Less accumulated
depreciation,
depletion and
amortization..... 1,715 1,095 2,468 55
----------- -------- --------- --------
Net property,
plant and
equipment........ 7,007 42 12,254 85
----------- -------- --------- --------
Deferred charges
and other assets:
Regulatory
assets, net......
Goodwill, net.... 218 6,430
Prepaid pension
costs............
Other
investments......
Other............
----------- -------- --------- --------
Total deferred
charges and
other assets.... 218 6,430
----------- -------- --------- --------
Total assets.... $11,205 $49,391 $12,854 $83,361
=========== ======== ========= ========
</TABLE>
D-4-7
<PAGE>
EXHIBIT D-4-1(a)
DOMINION RESERVES, INC.
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
Carthage Appalachian
Dominion Energy Dominion Development Dominion Gas
Reserves, Dominion Services Cypress Appalachian Properties Processing Dominion
Consolidated Consolidating Reserves Inc. Energy Development LLC Michigan, Inc. Midwest
(Exhibit D-4-1) Entries Inc (A) Inc. Inc. (Note G) (Exhibit D-4-1(c)) Energy
--------------- ------------- -------- -------- ------- ----------- ----------- ------------------ --------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Securities due
within one year..
Short-term debt..
Accounts payable,
trade............ $392,935 $ 25,218 $184,054 $ 411 $34,991 $ 33,905 $ 333 $32,332
Payables to
affiliated
companies........
Accrued interest,
payroll and
taxes............ 2,766 3,258 (988) (2,075) 76 1,133 (9) 1,002
Deferred income
taxes-current....
Dividends
declared.........
Commodity
contract
liabilities......
Other current
liabilities...... 6,820 117 1,700 987 2,812
-------- --------- -------- -------- ------- ------- -------- ------- -------
Total current
liabilities..... 402,521 28,593 184,766 (1,664) 36,054 35,038 324 36,146
-------- --------- -------- -------- ------- ------- -------- ------- -------
Long-term debt... 69
-------- --------- -------- -------- ------- ------- -------- ------- -------
Notes payable to
affiliates....... 158,978 50,698 1,942 8,134 7,884 54,462 15,465
-------- --------- -------- -------- ------- ------- -------- ------- -------
Deferred credits
and other
liabilities:
Deferred income
taxes............ 59,605 33,773 (1,469) (169) 240 19,812 3,779 1,295
Investment tax
credits..........
Other............ (3,172) (2,322) (9) (56)
-------- --------- -------- -------- ------- ------- -------- ------- -------
Total deferred
credits and
other
liabilities..... 56,433 31,451 (1,478) (169) 184 19,812 3,779 1,295
-------- --------- -------- -------- ------- ------- -------- ------- -------
Total
liabilities..... 618,001 110,742 185,230 6,301 44,122 109,312 19,568 37,441
-------- --------- -------- -------- ------- ------- -------- ------- -------
Minority
interest......... 931 931
Commitments and
contingencies....
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary
trusts...........
Preferred stock
not subject to
mandatory
redemption.......
Common
shareholders'
equity:
Common stock....
Additional paid
in capital...... 72,336 $ (67,159) 98,349 6,202 853 202 5,858 11 2,404
Retained
earnings........ 127,888 (72,467) 168,676 (1,821) (6,637) (4,876) 796 5,520 12,787
Accumulated
other
comprehensive
income..........
-------- --------- -------- -------- ------- ------- -------- ------- -------
Total common
shareholders'
equity.......... 200,224 (139,626) 267,025 4,381 (5,784) (4,674) 6,654 5,531 15,191
-------- --------- -------- -------- ------- ------- -------- ------- -------
Total
liabilities and
shareholders'
equity.......... $819,156 $(139,626) $377,767 $189,611 $ 517 $39,448 $115,966 $26,030 $52,632
======== ========= ======== ======== ======= ======= ======== ======= =======
<CAPTION>
Dominion Phoenix
Reserves Dominion Dominion
Great Lakes Gulf Reserves Energy
Compression Coast Indiana (Note F)
----------- -------- --------- ---------
<S> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Securities due
within one year..
Short-term debt..
Accounts payable,
trade............ $ 2,568 $ 584 $ 191 $78,348
Payables to
affiliated
companies........
Accrued interest,
payroll and
taxes............ (68) 305 13 119
Deferred income
taxes-current....
Dividends
declared.........
Commodity
contract
liabilities......
Other current
liabilities...... 718 486
----------- -------- --------- ---------
Total current
liabilities..... 3,218 889 204 78,953
----------- -------- --------- ---------
Long-term debt... 69
----------- -------- --------- ---------
Notes payable to
affiliates....... 4,643 14,757 993
----------- -------- --------- ---------
Deferred credits
and other
liabilities:
Deferred income
taxes............ 637 157 1,558 (8)
Investment tax
credits..........
Other............ 106 (891)
----------- -------- --------- ---------
Total deferred
credits and
other
liabilities..... 637 263 667 (8)
----------- -------- --------- ---------
Total
liabilities..... 8,567 1,152 15,628 79,938
----------- -------- --------- ---------
Minority
interest.........
Commitments and
contingencies....
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary
trusts...........
Preferred stock
not subject to
mandatory
redemption.......
Common
shareholders'
equity:
Common stock....
Additional paid
in capital...... 50 21,937 649 2,980
Retained
earnings........ 2,588 26,302 (3,423) 443
Accumulated
other
comprehensive
income..........
----------- -------- --------- ---------
Total common
shareholders'
equity.......... 2,638 48,239 (2,774) 3,423
----------- -------- --------- ---------
Total
liabilities and
shareholders'
equity.......... $11,205 $49,391 $12,854 $83,361
=========== ======== ========= =========
</TABLE>
D-4-8
<PAGE>
EXHIBIT D-4-1(a)
DOMINION RESERVES, INC.
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion
Dominion Dominion Gas
Reserves, Appalachian Processing
Inc. Carthage Dominion Development Michigan,
Consolidated Dominion Energy Cypress Appalachian Properties Inc. Dominion
(Exhibit Consolidating Reserves, Services Energy Development LLC (Exhibit Midwest
D-4-1) Entries Inc. Inc. Inc. Inc. (Note G) D-4-1(c)) Energy
------------ ------------- --------- -------- ------- ----------- ----------- ---------- --------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenue
and income:
Domestic electric
utility service....
Other.............. $103,135 $ 65,145 $ 411 $ 1,734 $16,557 $6,721 $ 70
-------- -------- -------- ------- ------- ------- ------- ------ ------
Total operating
revenue and
income............. 103,135 65,145 411 1,734 16,557 6,721 70
Expenses:
Electric fuel and
purchased energy,
net................
Purchased power
capacity, net......
Other operation and
maintenance........ 53,366 27,890 6,118 $ 3,596 2,246 5,393 1,781 (1,325)
Depreciation,
depletion and
amortization....... 42,527 28,959 479 9 588 7,475 1,619 176
Taxes, other than
income............. 4,729 2,697 76 194 1,267 114
-------- -------- -------- ------- ------- ------- ------- ------ ------
Total operating
expenses........... 100,622 59,546 6,673 3,605 3,028 14,135 3,400 (1,035)
-------- -------- -------- ------- ------- ------- ------- ------ ------
Income from
operations.......... 2,513 5,599 (6,262) (3,605) (1,294) 2,422 3,321 1,105
-------- -------- -------- ------- ------- ------- ------- ------ ------
Other income and
expense:
Interest revenue... 3,324 35 39 6 22 856
Equity in earnings
of subsidiary
companies.......... 388 $(25,791) 26,125 4 50
Interest revenue
from subsidiary
companies..........
Merger-related
costs..............
Other, net......... 17,160 5,528 (15) 67 1,816 47
-------- -------- -------- ------- ------- ------- ------- ------ ------
Total other income
and expense........ 20,872 (25,791) 31,688 28 123 1,816 22 903
-------- -------- -------- ------- ------- ------- ------- ------ ------
Income before fixed
charges and income
taxes............... 23,385 (25,791) 37,287 (6,234) (3,605) (1,171) 4,238 3,343 2,008
-------- -------- -------- ------- ------- ------- ------- ------ ------
Fixed charges:
Interest charges... 9,505 3,851 2 418 548 2,950 814
Distributions--
preferred
securities and
preferred stock....
-------- -------- -------- ------- ------- ------- ------- ------ ------
Total fixed
charges............ 9,505 3,851 2 418 548 2,950 814
-------- -------- -------- ------- ------- ------- ------- ------ ------
Income before
provision for income
taxes, minority
interests and
extraordinary item.. 13,880 (25,791) 33,436 (6,236) (4,023) (1,719) 1,288 2,529 2,008
Provision for
income taxes....... (11,792) (10,065) (2,046) (1,408) (571) (3,754) 836 766
Minority
interests.......... 138 138
-------- -------- -------- ------- ------- ------- ------- ------ ------
Income before
extraordinary item.. 25,534 (25,791) 43,501 (4,190) (2,615) (1,148) 5,042 1,555 1,242
-------- -------- -------- ------- ------- ------- ------- ------ ------
Extraordinary item,
net of income
taxes...............
Net income.......... $ 25,534 $(25,791) $ 43,501 $(4,190) $(2,615) $(1,148) $ 5,042 $1,555 $1,242
======== ======== ======== ======= ======= ======= ======= ====== ======
</TABLE>
D-4-9
<PAGE>
EXHIBIT D-4-1(a)
DOMINION RESERVES, INC.
CONSOLIDATING INCOME STATEMENT--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion Phoenix
Reserves Dominion Dominion
Great Lakes Gulf Reserves- Energy
Compression Coast Indiana (Note F)
----------- -------- --------- --------
(thousands)
<S> <C> <C> <C> <C>
Operating revenue and income:
Domestic electric utility service....
Other................................ $6,387 $ 2,679 $ 1,085 $2,346
------ ------- ------- ------
Total operating revenue and income... 6,387 2,679 1,085 2,346
Expenses:
Electric fuel and purchased energy,
net..................................
Purchased power capacity, net........
Other operation and maintenance...... 3,592 1,371 1,628 1,076
Depreciation, depletion and
amortization......................... 604 1,154 907 557
Taxes, other than income............. 321 18 42
------ ------- ------- ------
Total operating expenses............. 4,517 2,525 2,553 1,675
------ ------- ------- ------
Income from operations................ 1,870 154 (1,468) 671
------ ------- ------- ------
Other income and expense:
Interest revenue..................... 4 2,339 23
Equity in earnings of subsidiary
companies............................
Interest revenue from subsidiary
companies............................
Merger-related costs.................
Other, net........................... (32) 10,056 (307)
------ ------- ------- ------
Total other income and expense....... (28) 12,395 (307) 23
------ ------- ------- ------
Income before fixed charges and income
taxes................................. 1,842 12,549 (1,775) 694
Fixed charges:
Interest charges..................... 223 668 31
Distributions--preferred securities
and preferred stock
------ ------- ------- ------
Total fixed charges.................. 223 668 31
Income before provision for income
taxes, minority interests and
extraordinary item.................... 1,619 12,549 (2,443) 663
Provision for income taxes........... 636 4,392 (851) 273
Minority interests...................
------ ------- ------- ------
Income before extraordinary item...... 983 8,157 (1,592) 390
------ ------- ------- ------
Extraordinary item, net of income
taxes.................................
Net income............................ $ 983 $ 8,157 $(1,592) $ 390
====== ======= ======= ======
</TABLE>
D-4-10
<PAGE>
Exhibit D-4-1(b)
DOMINION ENERGY CANADA
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
Energy Canada
Limited Domcan
Consolidated Domcan Boundary
(Exhibit D-4- Consolidating East Alberta Corp.
1) Entries Ltd. (Note H)
------------- ------------- ------------ --------
(thousands)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.... $ 6,398 $ 2,606 $ 3,792
Accounts receivable:
Customers, less allowance...
Other....................... 14,738 $(7,005) 12,026 9,716
Receivables from affiliated
companies...................
Materials and supplies, at
average cost or less:
Plant and general........... 3,922 1,740 2,182
Fossil fuel.................
Deferred income taxes--
current.....................
Mortgage loans in warehouse..
Commodity contract assets....
Finance receivables held for
sale........................
Prepayments and other current
assets...................... 1,528 1,528
-------- ------- -------- --------
Total current assets........ 26,586 (7,005) 17,900 15,690
-------- ------- -------- --------
Investments:
Loans receivable, net........
Available for sale
securities..................
Nuclear decommissioning trust
funds.......................
Investments in real estate...
Stocks of subsidiary
companies, at equity........ 14,623 14,623
Notes of subsidiary
companies...................
Other........................ 25 25
-------- ------- -------- --------
Total investments........... 14,648 14,648
-------- ------- -------- --------
Property, plant and
equipment:
Utility plant................
Exploration and production
properties.................. 515,690 223,106 292,584
Other-non-utility............ 2,986 2,986
Acquisition adjustment.......
-------- ------- -------- --------
Total property, plant and
equipment.................. 518,676 226,092 292,584
Less accumulated
depreciation, depletion and
amortization................ 35,414 22,849 12,564
-------- ------- -------- --------
Net property, plant and
equipment.................. 483,262 203,243 280,020
Deferred charges and other
assets:
Regulatory assets, net.......
Goodwill, net................ 2,053 2,053
Prepaid pension costs........
Other investments............
Other........................
-------- ------- -------- --------
Total deferred charges and
other assets............... 2,053 2,053
-------- ------- -------- --------
Total assets................ $526,549 $(7,005) $237,844 $295,710
======== ======= ======== ========
</TABLE>
D-4-11
<PAGE>
Exhibit D-4-1(b)
DOMINION ENERGY CANADA
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
Energy Canada
Limited Domcan Domcan
Consolidated East Boundary
(Exhibit D-4- Consolidating Alberta Corp.
1) Entries Ltd. (Note H)
------------- ------------- -------- --------
(thousands)
<S> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Securities due within one
year..........................
Short-term debt................
Accounts payable, trade........ $ 23,646 $(7,005) $ 1,302 $ 29,348
Payables to affiliated
companies.....................
Accrued interest, payroll and
taxes......................... 1,570 1,570
Deferred income taxes--
current.......................
Dividends declared.............
Commodity contract
liabilities...................
Other current liabilities...... 10,393 10,393
-------- ------- -------- --------
Total current liabilities..... 35,609 (7,005) 13,265 29,348
Long-term debt................. 380,882 169,046 228,146
Notes payable to affiliates.... 16,310
Deferred credits and other
liabilities:
Deferred income taxes.......... (1,828) 40,674 (42,502)
Investment tax credits.........
Other.......................... 2,586 1,717 869
-------- ------- -------- --------
Total deferred credits and
other liabilities............ 758 42,391 (41,633)
-------- ------- -------- --------
Total liabilities............. 433,559 (7,005) 224,702 215,861
--------
Minority interest..............
Commitments and contingencies..
Obligated mandatorily
redeemable preferred
securities of subsidiary
trusts........................
Preferred stock not subject to
mandatory redemption..........
Common shareholders' equity:
Common stock...................
Additional paid in capital..... 92,207 14,521 77,686
Retained earnings.............. 4,015 327 3,688
Accumulated other comprehensive
income........................ (3,232) (1,706) (1,525)
-------- ------- -------- --------
Total common shareholders'
equity....................... 92,990 13,142 79,849
-------- ------- -------- --------
Total liabilities and
shareholders' equity......... $526,549 $(7,005) $237,844 $295,710
======== ======= ======== ========
</TABLE>
D-4-12
<PAGE>
EXHIBIT D-4-1(b)
DOMINION ENERGY CANADA
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion
Energy Canada
Limited Domcan
Consolidated Domcan Boundary
(Exhibit Consolidating East Alberta Corp.
D-4-1) Entries Ltd. (Note H)
------------- ------------- ------------ ---------
(thousands)
<S> <C> <C> <C> <C>
Operating revenue and
income:
Domestic electric utility
service..................
Other..................... $96,606 $42,109 $54,497
------- --- ------- -------
Total operating revenue
and income............. 96,606 42,109 54,497
------- --- ------- -------
Expenses:
Electric fuel and
purchased energy, net....
Purchased power capacity,
net......................
Other operation and
maintenance.............. 38,496 12,634 25,862
Depreciation, depletion
and amortization......... 30,522 16,905 13,617
Taxes, other than income.. 2,399 1,875 524
------- --- ------- -------
Total operating
expenses............... 71,417 31,414 40,003
------- --- ------- -------
Income from operations...... 25,189 10,695 14,494
------- --- ------- -------
Other income and expense:
Interest revenue.......... 136 125 11
Equity in earnings of
subsidiary companies.....
Interest revenue from
subsidiary companies.....
Merger--related costs.....
Other, net................ 4,633 (112) 4,745
------- --- ------- -------
Total other income and
expense................ 4,769 13 4,756
------- --- ------- -------
Income before fixed charges
and income taxes........... 29,958 10,708 19,250
------- --- ------- -------
Fixed charges:
Interest charges.......... 19,304 8,608 10,696
Distributions--preferred
securities and preferred
stock....................
------- --- ------- -------
Total fixed charges..... 19,304 8,608 10,696
------- --- ------- -------
Income before provision for
income taxes, minority
interests and extraordinary
item....................... 10,654 2,100 8,554
Provision for income
taxes.................... 5,468 602 4,866
Minority interests........
------- --- ------- -------
Income before extraordinary
item....................... 5,186 1,498 3,688
------- --- ------- -------
Extraordinary item, net of
income taxes...............
Net income.................. $ 5,186 $ 1,498 $ 3,688
======= === ======= =======
</TABLE>
D-4-13
<PAGE>
Exhibit D-4-1(c)
DOMINION GAS PROCESSING MICHIGAN, INC.
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion Gas Dominion
Processing Gas Wilderness
Michigan, Inc. Processing Frederic Energy
Consolidated Consolidating Michigan, HOF, LP Services, LP
(Exhibit D-4-1(a)) Entries Inc. (Note I) (Note J)
------------------ ------------- ---------- -------- ------------
(thousands)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents............ $ 188 $ (566) $ 188 $ 566
Accounts receivable:
Customers, less
allowance............
Other................. 3,175 (764) $ 1,945 1,230 764
Receivables from
affiliated companies...
Materials and supplies,
at average cost or
less:
Plant and general.....
Fossil fuel...........
Deferred income taxes--
current................
Mortgage loans in
warehouse..............
Commodity contract
assets.................
Finance receivables held
for sale...............
Prepayments and other
current assets......... 24 24
------- -------- ------- ------- -------
Total current
assets............. 3,387 (1,330) 1,945 1,442 1,330
Investments:
Loans receivable, net...
Available for sale
securities.............
Nuclear decommissioning
trust funds............
Investments in real
estate.................
Stocks of subsidiary
companies, at equity... 8,430 (14,595) 23,025
Notes of subsidiary
companies..............
Other...................
------- -------- ------- ------- -------
Total investments... 8,430 (14,595) 23,025
Property, plant and
equipment:
Utility plant...........
Exploration and
production properties..
Other--non-utility...... 27,330 (15,043) 27,330 15,043
Acquisition adjustment..
------- -------- ------- ------- -------
Total property,
plant and
equipment.......... 27,330 (15,043) 27,330 15,043
Less accumulated
depreciation, depletion
and amortization....... 13,117 (4,709) 13,117 4,709
------- -------- ------- ------- -------
Net property, plant
and equipment...... 14,213 (10,334) 14,213 10,334
Deferred charges and
other assets:
Regulatory assets, net..
Goodwill, net...........
Prepaid pension costs...
Other investments.......
Other...................
Total deferred
charges and other
assets.............
------- -------- ------- ------- -------
Total assets........ $26,030 $(26,259) $24,970 $15,655 $11,664
======= ======== ======= ======= =======
</TABLE>
D-4-14
<PAGE>
Exhibit D-4-1(c)
DOMINION GAS PROCESSING MICHIGAN, INC.
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion Gas
Processing Wilderness
Michigan, Inc Dominion Gas Frederic Energy
Consolidated Consolidating Processing HOF, LP Services, LP
(Exhibit D-4-1(a)) Entries Michigan, Inc. (Note I) (Note J)
------------------ ------------- -------------- -------- ------------
(thousands)
<S> <C> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Securities due within
one year...............
Short-term debt.........
Accounts payable,
trade.................. $ 333 $ 204 $ 129
Payables to affiliated
companies..............
Accrued interest,
payroll and taxes...... (9) (9)
Deferred income taxes-
current................
Dividends declared......
Commodity contract
liabilities............
Other current
liabilities............
------- -------- ------- ------- -------
Total current
liabilities........ 324 195 129
------- -------- ------- ------- -------
Long-term debt.......... 15,465 15,465
------- -------- ------- ------- -------
Notes payable to
affiliates.............
Deferred credits and
other liabilities:
Deferred income taxes... 3,779 3,779
Investment tax credits..
Other...................
------- -------- ------- ------- -------
Total deferred
credits and other
liabilities........ 3,779 3,779
------- -------- ------- ------- -------
Total liabilities... 19,568 19,439 129
------- -------- ------- ------- -------
Minority interest....... 931 $ 931
Commitments and
contingencies..........
Obligated mandatorily
redeemable preferred
securities of
subsidiary trusts......
Preferred stock not
subject to mandatory
redemption.............
Common shareholders'
equity:
Common stock..........
Additional paid in
capital.............. 11 (13,218) 11 13,218
Retained earnings..... 5,520 (13,972) 5,520 2,308 $11,664
Accumulated other
comprehensive
income...............
------- -------- ------- ------- -------
Total common
shareholders'
equity............. 5,531 (27,190) 5,531 15,526 11,664
------- -------- ------- ------- -------
Total liabilities
and shareholders'
equity............. $26,030 $(26,259) $24,970 $15,655 $11,664
======= ======== ======= ======= =======
</TABLE>
D-4-15
<PAGE>
EXHIBIT D-4-1(c)
DOMINION GAS PROCESSING MICHIGAN, INC.
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion Gas
Processing Wilderness
Michigan, Inc. Dominion Gas Frederic Energy
Consolidated Consolidating Processing HOF, LP Services, LP
(Exhibit D-4-1(a)) Entries Michigan, Inc. (Note I) (Note J)
------------------ ------------- -------------- -------- ------------
(thousands)
<S> <C> <C> <C> <C> <C>
Operating revenue and
income:
Domestic electric
utility service.......
Other.................. $6,721 $(3,409) $1,040 $5,682 $3,409
------ ------- ------ ------ ------
Total operating revenue
and income............ 6,721 (3,409) 1,040 5,682 3,409
------ ------- ------ ------ ------
Expenses:
Electric fuel and
purchased energy,
net...................
Purchased power
capacity, net.........
Other operation and
maintenance........... 1,781 (632) 4 1,777 632
Depreciation, depletion
and amortization...... 1,619 (898) 1,619 898
Taxes, other than
income................
------ ------- ------ ------ ------
Total operating
expenses.............. 3,400 (1,530) 4 3,396 1,530
------ ------- ------ ------ ------
Income from operations.. 3,321 (1,879) 1,036 2,286 1,879
------ ------- ------ ------ ------
Other income and
expense:
Interest revenue....... 22 22
Equity in earnings of
subsidiary companies..
Interest revenue from
subsidiary companies..
Merger-related costs...
Other, net............. 9 (9)
------ ------- ------ ------ ------
Total other income and
expense............... 22 9 22 (9)
------ ------- ------ ------ ------
Income before fixed
charges and income
taxes.................. 3,343 (1,870) 1,036 2,308 1,870
------ ------- ------ ------ ------
Fixed charges:
Interest charges....... 814 814
Distributions--
preferred securities
and preferred stock...
------ ------- ------ ------ ------
Total fixed charges.... 814 814
------ ------- ------ ------ ------
Income before provision
for income taxes,
minority interests and
extraordinary item..... 2,529 (1,870) 222 2,308 1,870
Provision for income
taxes................. 836 836
Minority interests..... 138 (138)
------ ------- ------ ------ ------
Income before
extraordinary item..... 1,555 (2,008) (615) 2,308 1,870
Extraordinary item, net
of income taxes........
------ ------- ------ ------ ------
Net income.............. $1,555 $(2,008) $ (615) $2,308 $1,870
====== ======= ====== ====== ======
</TABLE>
D-4-16
<PAGE>
EXHIBIT D-4-2
DOMINION ENERGY, INC.--DOMESTIC POWER GENERATION
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
Cogen
Domestic WVA Inc. Dominion Dominion
Power Dominion (Exhibit Elwood Inc. Dominion Energy
Generation Cogen D-4- (Exhibit Elwood Dominion Services
Consolidated Consolidating Dominion NY Inc. 2(a)) D-4-2(b)) Services, Kincaid, Inc. Company,
(Exhibit D-4) Entries Cogen Inc (Note K) (Note L) (Note M) Inc (Note N) Inc.
------------- ------------- --------- -------- -------- ----------- --------- ------------- --------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents........ $ 12 $ 10 $ 2
Accounts
receivable:
Customers, less
allowance.........
Other............. 49,488 $(2,119) $ 300 $600 $ 1,469 $ 700 $658 8,815 10,070
Receivables from
affiliated
companies..........
Materials and
supplies, at
average cost or
less:
Plant and
general........... 3,311 3,311
Fossil fuel.......
Deferred income
taxes--current.....
Mortgage loans in
warehouse..........
Commodity contract
assets.............
Finance receivables
held for sale......
Prepayments and
other current
assets............. 1,636 692 496 448
-------- ------- ------- ---- ------- -------- ---- -------- -------
Total current
assets............ 54,447 (2,119) 300 600 2,161 700 658 12,632 10,520
-------- ------- ------- ---- ------- -------- ---- -------- -------
Investments:
Loans receivable,
net................
Available for sale
securities.........
Nuclear
decommissioning
trust funds........
Investments in real
estate.............
Stocks of
subsidiary
companies, at
equity............. 110,346 10,584 99,762
Notes of subsidiary
companies..........
Other.............. 95,304 66,420 17,526 11,358
-------- ------- ------- ---- ------- -------- ---- -------- -------
Total
investments....... 205,650 66,420 28,110 99,762 11,358
-------- ------- ------- ---- ------- -------- ---- -------- -------
Property, plant and
equipment:
Utility plant......
Exploration and
production
properties.........
Other--non-
utility............ 356,299 356,299
Acquisition
adjustment.........
-------- ------- ------- ---- ------- -------- ---- -------- -------
Total property,
plant and
equipment......... 356,299 356,299
-------- ------- ------- ---- ------- -------- ---- -------- -------
Less accumulated
depreciation,
depletion and
amortization....... 13,846 13,846
-------- ------- ------- ---- ------- -------- ---- -------- -------
Net property,
plant and
equipment......... 342,453 342,453
Deferred charges
and other assets:
Regulatory assets,
net................
Goodwill, net......
Prepaid pension
costs..............
Other investments..
Other..............
-------- ------- ------- ---- ------- -------- ---- -------- -------
Total deferred
charges and other
assets............
-------- ------- ------- ---- ------- -------- ---- -------- -------
Total assets.... $602,550 $(2,119) $66,720 $600 $30,271 $100,462 $658 $366,443 $10,520
======== ======= ======= ==== ======= ======== ==== ======== =======
<CAPTION>
Dominion
Energy
Construction
Co, Inc.
------------
<S> <C>
ASSETS
Current assets:
Cash and cash
equivalents........
Accounts
receivable:
Customers, less
allowance.........
Other............. $28,995
Receivables from
affiliated
companies..........
Materials and
supplies, at
average cost or
less:
Plant and
general...........
Fossil fuel.......
Deferred income
taxes--current.....
Mortgage loans in
warehouse..........
Commodity contract
assets.............
Finance receivables
held for sale......
Prepayments and
other current
assets.............
------------
Total current
assets............ 28,995
------------
Investments:
Loans receivable,
net................
Available for sale
securities.........
Nuclear
decommissioning
trust funds........
Investments in real
estate.............
Stocks of
subsidiary
companies, at
equity.............
Notes of subsidiary
companies..........
Other..............
------------
Total
investments.......
------------
Property, plant and
equipment:
Utility plant......
Exploration and
production
properties.........
Other--non-
utility............
Acquisition
adjustment.........
------------
Total property,
plant and
equipment.........
------------
Less accumulated
depreciation,
depletion and
amortization.......
------------
Net property,
plant and
equipment.........
Deferred charges
and other assets:
Regulatory assets,
net................
Goodwill, net......
Prepaid pension
costs..............
Other investments..
Other..............
------------
Total deferred
charges and other
assets............
------------
Total assets.... $28,995
============
</TABLE>
D-4-17
<PAGE>
EXHIBIT D-4-2
DOMINION ENERGY, INC.--DOMESTIC POWER GENERATION
CONSOLIDATING BALANCE SHEET--(CONTINUED)
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
Cogen
Domestic WVA Inc. Dominion Dominion
Power Dominion (Exhibit Elwood Inc. Dominion Energy
Generation Cogen D-4- (Exhibit Elwood Dominion Services
Consolidated Consolidating Dominion NY Inc. 2(a)) D-4-2(b)) Services, Kincaid, Inc. Company,
(Exhibit D-4) Entries Cogen Inc. (Note K) (Note L) (Note M) Inc. (Note N) Inc.
------------- ------------- ---------- -------- -------- ----------- --------- ------------- --------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Securities due
within one year... $ 6,213 $ 6,213
Short-term debt...
Accounts payable,
trade............. 47,088 $(2,119) $ 2,400 $ 781 $ 3,900 $433 12,114 $ 3,940
Payables to
affiliated
companies.........
Accrued interest,
payroll and
taxes............. 5,255 477 (115) $ 289 1,071 67 3,404 62
Deferred income
taxes--current....
Dividends
declared..........
Commodity contract
liabilities.......
Other current
liabilities....... 8,304 38 612 2,656
-------- ------- ------- ----- ------- -------- ---- -------- -------
Total current
liabilities....... 66,860 (2,119) 2,877 666 289 4,971 538 22,343 6,658
-------- ------- ------- ----- ------- -------- ---- -------- -------
Long-term debt..... 258,787 258,787
-------- ------- ------- ----- ------- -------- ---- -------- -------
Notes payable to
affiliates......... (1,223) 3,125 (2,706)
-------- ------- ------- ----- ------- -------- ---- -------- -------
Deferred credits
and other
liabilities:
Deferred income
taxes............. 19,480 (52) 285 12,739 638 (12) 6,157 (275)
Investment tax
credits...........
Other............. (7,401) (2,071) (6,803) 1,473
-------- ------- ------- ----- ------- -------- ---- -------- -------
Total deferred
credits and other
liabilities....... 12,079 (52) 285 10,668 638 (12) (646) 1,198
-------- ------- ------- ----- ------- -------- ---- -------- -------
Total
liabilities..... 336,503 (2,119) 2,825 951 10,957 5,609 526 283,609 5,150
-------- ------- ------- ----- ------- -------- ---- -------- -------
Minority interest.. 976 976
Commitments and
contingencies......
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary trusts..
Preferred stock not
subject to
mandatory
redemption.........
Common
shareholders'
equity:
Common stock...... 35,003 35,000 1 1 1
Additional paid in
capital........... 167,174 1,723 (311) 21,997 87,336 56,429
Retained
earnings.......... 62,894 27,172 (41) (2,684) 7,517 132 25,429 5,369
Accumulated other
comprehensive
income............
-------- ------- ------- ----- ------- -------- ---- -------- -------
Total common
shareholders'
equity............ 265,071 63,895 (351) 19,314 94,853 132 81,858 5,370
-------- ------- ------- ----- ------- -------- ---- -------- -------
Total
liabilities and
shareholders'
equity.......... $602,550 $(2,119) $66,720 $ 600 $30,271 $100,462 $658 $366,443 $10,520
======== ======= ======= ===== ======= ======== ==== ======== =======
<CAPTION>
Dominion
Energy
Construction
Co, Inc.
------------
<S> <C>
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Securities due
within one year...
Short-term debt...
Accounts payable,
trade............. $25,639
Payables to
affiliated
companies.........
Accrued interest,
payroll and
taxes.............
Deferred income
taxes--current....
Dividends
declared..........
Commodity contract
liabilities.......
Other current
liabilities....... 4,998
------------
Total current
liabilities....... 30,637
------------
Long-term debt.....
------------
Notes payable to
affiliates......... (1,642)
------------
Deferred credits
and other
liabilities:
Deferred income
taxes.............
Investment tax
credits...........
Other.............
------------
Total deferred
credits and other
liabilities.......
------------
Total
liabilities..... 28,995
------------
Minority interest..
Commitments and
contingencies......
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary trusts..
Preferred stock not
subject to
mandatory
redemption.........
Common
shareholders'
equity:
Common stock......
Additional paid in
capital...........
Retained
earnings..........
Accumulated other
comprehensive
income............
------------
Total common
shareholders'
equity............
------------
Total
liabilities and
shareholders'
equity.......... $28,995
============
</TABLE>
D-4-18
<PAGE>
EXHIBIT D-4-2
DOMINION ENERGY, INC-DOMESTIC POWER GENERATION
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion
Cogen
Domestic WVA Inc. Dominion Dominion
Power Dominion (Exhibit Elwood Inc. Dominion Energy
Generation Cogen D-4- (Exhibit Elwood Dominion Services
Consolidated Consolidating Dominion NY Inc. 2(a)) D-4-2(b)) Services, Kincaid, Inc. Company,
(Exhibit D-4) Entries Cogen Inc. (Note K) (Note L) (Note M) Inc. (Note N) Inc.
------------- ------------- ---------- -------- -------- ----------- --------- ------------- --------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenue
and income:
Domestic
electric utility
service
Other........... $92,368 $93 $ (79) $12,426 $238 $74,249 $5,441
------- --- ------ --- ------ ------- ---- ------- ------
Total operating
revenue and
income.......... 92,368 93 (79) 12,426 238 74,249 5,441
------- --- ------ --- ------ ------- ---- ------- ------
Expenses:
Electric fuel
and purchased
energy, net.....
Purchased power
capacity, net...
Other operation
and
maintenance..... 29,472 25 29,580 1,889
Depreciation,
depletion and
amortization.... 9,764 74 9,690
Taxes, other
than income..... 3,496 26 565 883
------- --- ------ --- ------ ------- ---- ------- ------
Total operating
expenses........ 42,732 74 51 39,835 2,772
------- --- ------ --- ------ ------- ---- ------- ------
Income from
operations....... 49,636 93 (153) 12,426 187 34,414 2,669
------- --- ------ --- ------ ------- ---- ------- ------
Other income and
expense:
Interest
revenue......... 6,629 $4,812 939 588 290
Equity in
earnings of
subsidiary
companies.......
Interest revenue
from subsidiary
companies.......
Merger-related
costs...........
Other, net...... 194 194
------- --- ------ --- ------ ------- ---- ------- ------
Total other
income and
expense......... 6,823 4,812 939 782 290
------- --- ------ --- ------ ------- ---- ------- ------
Income before
fixed charges and
income taxes..... 56,459 4,812 93 786 12,426 187 35,196 2,959
------- --- ------ --- ------ ------- ---- ------- ------
Fixed charges:
Interest
charges......... 15,348 10 15,402 (64)
Distributions--
preferred
securities and
preferred
stock...........
------- --- ------ --- ------ ------- ---- ------- ------
Total fixed
charges......... 15,348 10 15,402 (64)
Income before
provision for
income taxes,
minority
interests and
extraordinary
item............. 41,111 4,812 83 786 12,426 187 19,794 3,023
Provision for
income taxes.... 15,200 1,684 29 (316) 4,909 55 7,778 1,061
Minority
interests....... 198 198
------- --- ------ --- ------ ------- ---- ------- ------
Income before
extraordinary
item............. 25,713 3,128 54 1,102 7,517 132 11,818 1,962
Extraordinary
item, net of
income taxes.....
------- --- ------ --- ------ ------- ---- ------- ------
Net income....... $25,713 $3,128 $54 $1,102 $ 7,517 $132 $11,818 $1,962
======= === ====== === ====== ======= ==== ======= ======
<CAPTION>
Dominion
Energy
Construction
Co, Inc.
------------
<S> <C>
Operating revenue
and income:
Domestic
electric utility
service
Other...........
------------
Total operating
revenue and
income..........
------------
Expenses:
Electric fuel
and purchased
energy, net.....
Purchased power
capacity, net...
Other operation
and
maintenance..... $(2,022)
Depreciation,
depletion and
amortization....
Taxes, other
than income..... 2,022
------------
Total operating
expenses........
------------
Income from
operations.......
------------
Other income and
expense:
Interest
revenue.........
Equity in
earnings of
subsidiary
companies.......
Interest revenue
from subsidiary
companies.......
Merger-related
costs...........
Other, net......
------------
Total other
income and
expense.........
------------
Income before
fixed charges and
income taxes.....
------------
Fixed charges:
Interest
charges.........
Distributions--
preferred
securities and
preferred
stock...........
------------
Total fixed
charges.........
Income before
provision for
income taxes,
minority
interests and
extraordinary
item.............
Provision for
income taxes....
Minority
interests.......
------------
Income before
extraordinary
item.............
Extraordinary
item, net of
income taxes.....
------------
Net income....... $
============
</TABLE>
D-4-19
<PAGE>
EXHIBIT D-4-2(a)
DOMINION COGEN WVA, INC.
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
Cogen WVA Inc. Dominion Morgantown
Consolidated Consolidating Cogen Energy
(Exhibit D-4-2) Entries WVA, Inc. Associates
--------------- ------------- -------- ----------
(thousands)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents.............. $ (15,517) $ 15,517
Accounts receivable:
Customers, less
allowance................
Other..................... $ 1,469 (2,525) $ 1,469 2,525
Receivables from affiliated
companies..................
Materials and supplies, at
average cost or less:
Plant and general......... (1,856) 1,856
Fossil fuel...............
Deferred income taxes--
current....................
Mortgage loans in
warehouse..................
Commodity contract assets...
Finance receivables held for
sale.......................
Prepayments and other
current assets............. 692 (389) 692 389
------- --------- ------- --------
Total current assets.... 2,161 (20,287) 2,161 20,287
------- --------- ------- --------
Investments:
Loans receivable, net.......
Available for sale
securities.................
Nuclear decommissioning
trust funds................
Investments in real estate..
Stocks of subsidiary
companies, at equity....... 10,584 10,584
Notes of subsidiary
companies..................
Other....................... 17,526 17,526
------- --------- ------- --------
Total investments....... 28,110 28,110
------- --------- ------- --------
Property, plant and
equipment:
Utility plant...............
Exploration and production
properties.................
Other--non-utility.......... (168,804) 168,804
Acquisition adjustment......
------- --------- ------- --------
Total property, plant
and equipment.......... (168,804) 168,804
------- --------- ------- --------
Less accumulated
depreciation, depletion and
amortization............... (34,223) 34,223
------- --------- ------- --------
Net property, plant and
equipment.............. (134,581) 134,581
Deferred charges and other
assets:
Regulatory assets, net....
Goodwill, net.............
Prepaid pension costs.....
Other investments.........
Other.....................
------- --------- ------- --------
Total deferred charges
and other assets.......
------- --------- ------- --------
Total assets.......... $30,271 $(154,868) $30,271 $154,868
======= ========= ======= ========
</TABLE>
D-4-20
<PAGE>
EXHIBIT D-4-2(a)
DOMINION COGEN WVA, INC.
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
Cogen WVA Inc. Dominion Morgantown
Consolidated Consolidating Cogen Energy
(Exhibit D-4-2) Entries WVA Inc. Associates
--------------- ------------- -------- ----------
(thousands)
<S> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Securities due within one
year...................... $ (4,531) $ 4,531
Short-term debt............
Accounts payable, trade.... (6,101) 6,101
Payables to affiliated
companies.................
Accrued interest, payroll
and taxes................. $ 289 (3,339) $ 289 3,339
Deferred income taxes--
current...................
Dividends declared.........
Commodity contract
liabilities...............
Other current liabilities.. (1,280) 1,280
------- --------- ------- --------
Total current
liabilities............. 289 (15,251) 289 15,251
------- --------- ------- --------
Long-term debt............... (119,738) 119,738
------- --------- ------- --------
Notes payable to affiliates.. (638) 638
------- --------- ------- --------
Deferred credits and other
liabilities:
Deferred income taxes...... 12,739 12,739
Investment tax credits.....
Other...................... (2,071) 1,028 (2,071) (1,028)
------- --------- ------- --------
Total deferred credits
and other liabilities... 10,668 1,028 10,668 (1,028)
------- --------- ------- --------
Total liabilities........ 10,957 (134,599) 10,957 134,599
------- --------- ------- --------
Minority interest............
Commitments and
contingencies...............
Obligated mandatorily
redeemable preferred
securities of subsidiary
trusts......................
Preferred stock not subject
to mandatory redemption.....
Common shareholders' equity:
Common stock............... 1 1
Additional paid in
capital................... 21,997 (20,269) 21,997 20,269
Retained earnings.......... (2,684) (2,684)
Accumulated other
comprehensive income......
------- --------- ------- --------
Total common
shareholders' equity.... 19,314 (20,269) 19,314 20,269
------- --------- ------- --------
Total liabilities and
shareholders' equity.. $30,271 $(154,868) $30,271 $154,868
======= ========= ======= ========
</TABLE>
D-4-21
<PAGE>
EXHIBIT D-4-2(a)
DOMINION COGEN WVA, INC.
CONSOLIDATING INCOME STATEMENT
For The Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion
Cogen WVA Inc.
Consolidated Morgantown
(Exhibit D-4- Consolidating Dominion Energy
2) Entries Cogen WVA, Inc. Associates
-------------- ------------- --------------- ----------
(thousands)
<S> <C> <C> <C> <C>
Operating revenue and
income:
Domestic electric
utility service......
Other................. $ (79) $(29,321) $ (79) $29,321
------ -------- ------ -------
Total operating rev-
enue and income.... (79) (29,321) (79) 29,321
------ -------- ------ -------
Expenses:
Electric fuel and
purchased energy,
net.................. (5,293) 5,293
Purchased power
capacity, net........
Other operation and
maintenance.......... (10,246) 10,246
Depreciation,
depletion and
amortization......... 74 74
Taxes, other than
income...............
------ -------- ------ -------
Total operating
expenses........... 74 (15,539) 74 15,539
------ -------- ------ -------
Income from operations.. (153) (13,782) (153) 13,782
------ -------- ------ -------
Other income and
expense:
Interest revenue...... 939 (634) 939 634
Equity in earnings of
subsidiary
companies............
Interest revenue from
subsidiary
companies............
Merger-related costs..
Other, net............ 4,924 (4,924)
------ -------- ------ -------
Total other income
and expense........ 939 4,290 939 (4,290)
------ -------- ------ -------
Income before fixed
charges and income
taxes.................. 786 (9,492) 786 9,492
------ -------- ------ -------
Fixed charges:
Interest charges...... 9,523 (9,523)
Distributions--
preferred securities
and preferred stock..
------ -------- ------ -------
Total fixed
charges............ 9,523 (9,523)
------ -------- ------ -------
Income before provision
for income taxes,
minority interests and
extraordinary item..... 786 31 786 (31)
Provision for income
taxes................ (316) (316)
Minority interests....
------ -------- ------ -------
Income before
extraordinary item..... 1,102 31 1,102 (31)
Extraordinary item, net
of income taxes........
------ -------- ------ -------
Net income.............. $1,102 $ 31 $1,102 $ (31)
====== ======== ====== =======
</TABLE>
D-4-22
<PAGE>
EXHIBIT D-4-2(b)
DOMINION ELWOOD, INC.
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion
Elwood Inc
Consolidated Consolidating Dominion Elwood
(Exhibit D-4-2) Entries Elwood, Inc Energy, LLC
--------------- ------------- ----------- -----------
(thousands)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents........... $ (110) $ 110
Accounts receivable:
Customers, less
allowance.............
Other.................. $ 700 (12,498) $ 700 12,498
Receivables from
affiliated companies...
Materials and supplies,
at average cost or
less:
Plant and general......
Fossil fuel............
Deferred income taxes--
current...............
Mortgage loans in
warehouse.............
Commodity contract
assets................
Finance receivables
held for sale.........
Prepayments and other
current assets........ (1,638) 1,638
-------- --------- -------- ---------
Total current assets... 700 (14,246) 700 14,246
-------- --------- -------- ---------
Investments:
Loans receivable, net..
Available for sale
securities............
Nuclear decommissioning
trust funds...........
Investments in real
estate................
Stocks of subsidiary
companies, at equity.. 99,762 99,762
Notes of subsidiary
companies............. (3,466) 3,466
Other..................
-------- --------- -------- ---------
Total investments...... 99,762 (3,466) 99,762 3,466
-------- --------- -------- ---------
Property, plant and
equipment:
Utility plant..........
Exploration and
production
properties............
Other-non-utility...... (192,148) 192,148
Acquisition
adjustment............
-------- --------- -------- ---------
Total property, plant
and equipment......... (192,148) 192,148
-------- --------- -------- ---------
Less accumulated
depreciation, depletion
and amortization....... (4,056) 4,056
-------- --------- -------- ---------
Net property, plant
and equipment......... (188,092) 188,092
Deferred charges and
other assets:
Regulatory assets, net..
Goodwill, net...........
Prepaid pension costs...
Other investments.......
Other...................
-------- --------- -------- ---------
Total deferred charges
and other assets......
-------- --------- -------- ---------
Total assets......... $100,462 $(205,803) $100,462 $(205,803)
======== ========= ======== =========
</TABLE>
D-4-23
<PAGE>
EXHIBIT D-4-2(b)
DOMINION ELWOOD, INC.
LIABILITIES AND SHAREHOLDERS' EQUITY
As of December 31, 1999
<TABLE>
<CAPTION>
Dominion Elwood
Inc.
Consolidated Consolidating Dominion Elwood
(Exhibit D-4-2) Entries Elwood Inc. Energy LLC
--------------- ------------- ----------- ----------
(thousands)
<S> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Securities due within one
year....................
Short-term debt..........
Accounts payable, trade.. $ 3,900 $ (6,425) $ 3,900 $ 6,425
Payables to affiliated
companies...............
Accrued interest, payroll
and taxes............... 1,071 (96) 1,071 96
Deferred income taxes--
current.................
Dividends declared.......
Commodity contract
liabilities.............
Other current
liabilities............. (61) 61
-------- --------- -------- --------
Total current
liabilities............. 4,971 (6,582) 4,971 6,582
-------- --------- -------- --------
Long-term debt............
Notes payable to
affiliates...............
Deferred credits and other
liabilities:
Deferred income taxes.... 638 638
Investment tax credits...
Other.................... 303 (303)
-------- --------- -------- --------
Total deferred credits
and other liabilities... 638 303 638 (303)
-------- --------- -------- --------
Total liabilities...... 5,609 (6,279) 5,609 6,279
-------- --------- -------- --------
Minority interest.........
Commitments and
contingencies............
Obligated mandatorily
redeemable preferred
securities of subsidiary
trusts...................
Preferred stock not
subject to mandatory
redemption...............
Common shareholders'
equity:
Common stock.............
Additional paid in
capital................. 87,336 (174,672) 87,336 174,672
Retained earnings........ 7,517 (24,852) 7,517 24,852
Accumulated other
comprehensive income....
-------- --------- -------- --------
Total common
shareholders' equity.... 94,853 (199,524) 94,853 199,524
-------- --------- -------- --------
Total liabilities and
shareholders' equity.. $100,462 $(205,803) $100,462 $205,803
======== ========= ======== ========
</TABLE>
D-4-24
<PAGE>
EXHIBIT D-4-2(b)
DOMINION ELWOOD, INC.
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Dominion Elwood
Inc. Dominion Elwood
Consolidated Consolidating Elwood, Energy,
(Exhibit D-4-2) Entries Inc. LLC
--------------- ------------- -------- -------
(thousands)
<S> <C> <C> <C> <C>
Operating revenue and income:
Domestic electric utility
service.......................
Other.......................... $12,426 $(42,088) $12,426 $42,088
------- -------- ------- -------
Total operating revenue and
income........................ 12,426 (42,088) 12,426 42,088
Expenses:
Electric fuel and purchased
energy, net................... (11,450) 11,450
Purchased power capacity, net..
Other operation and
maintenance................... (2,447) 2,447
Depreciation, depletion and
amortization.................. (4,074) 4,074
Taxes, other than income....... (169) 169
------- -------- ------- -------
Total operating expenses....... (18,140) 18,140
-------- -------
Income from operations.......... 12,426 (23,948) 12,426 23,948
------- -------- ------- -------
Other income and expense:
Interest revenue............... (184) 184
Equity in earnings of
subsidiary companies..........
Interest revenue from
subsidiary companies..........
Merger-related costs...........
Other, net..................... (721) 721
------- -------- ------- -------
Total other income and
expense....................... (905) 905
-------- -------
Income before fixed charges and
income taxes................... 12,426 (24,853) 12,426 24,853
------- -------- ------- -------
Fixed charges:
Interest charges...............
Distributions--preferred
securities and preferred
stock.........................
------- -------- ------- -------
Total fixed charges............
Income before provision for
income taxes, minority
interests and extraordinary
item........................... 12,426 (24,853) 12,426 24,853
Provision for income taxes..... 4,909 4,909
Minority interests.............
------- -------- ------- -------
Income before extraordinary
item........................... 7,517 (24,853) 7,517 24,853
Extraordinary item, net of
income taxes...................
------- -------- ------- -------
Net income...................... $ 7,517 $(24,853) $ 7,517 $24,853
======= ======== ======= =======
</TABLE>
D-4-25
<PAGE>
EXHIBIT D-4-3
DOMINION ENERGY, INC.--FOREIGN POWER GENERATION CONSOLIDATED
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Foreign Entites Pending Sale Foreign Entities Sold
-------------------------------------------- ----------------------------
Dominion
Foreign Power Energy Dominion Dominion
Generation Interamerican Energy Company Dominion Holdings Inc. Dominion
Consolidated Consolidating Holding Co LDC (Caymen Islands) Management Peru SAC Energy Central
(Exhibit D-4) Entries (Note O) (Note P) Argentina SA (Note Q) America, Inc.
------------- ------------- -------------- ---------------- ------------ ------------- --------------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents........ $ 54,715 $ 49,156 $ 5,465 $ 94
Accounts
receivable:
Customers, less
allowance.........
Other............. 14,247 3,585 10,474 188
Receivables from
affiliated
companies..........
Materials and
supplies, at
average cost or
less:
Plant and
general........... 153 73 80
Fossil fuel.......
Deferred income
taxes--current.....
Mortgage loans in
warehouse..........
Commodity contract
assets.............
Finance receivables
held for sale......
Prepayments and
other current
assets 18,092 61 17,995 36
-------- --- -------- -------- ---- --- ---
Total current
assets............ 87,207 52,875 34,014 318
-------- --- -------- -------- ---- --- ---
Investments:
Loans receivable,
net................
Available for sale
securities.........
Nuclear
decommissioning
trust funds........
Investments in real
estate.............
Stocks of
subsidiary
companies, at
equity.............
Notes of subsidiary
companies..........
Other.............. 22,105 16,012 6,093
-------- --- -------- -------- ---- --- ---
Total
investments....... 22,105 16,012 6,093
-------- --- -------- -------- ---- --- ---
Property, plant and
equipment:
Utility plant......
Exploration and
production
properties.........
Other--non-
utility............ 479,081 205,908 272,313 860
Acquisition
adjustment.........
-------- --- -------- -------- ---- --- ---
Total property,
plant and
equipment......... 479,081 205,908 272,313 860
-------- --- -------- -------- ---- --- ---
Less accumulated
depreciation,
depletion and
amortization 142,806 83,542 59,063 201
-------- --- -------- -------- ---- --- ---
Net property,
plant and
equipment......... 336,275 122,366 213,250 659
Deferred charges
and other assets:
Regulatory assets,
net................
Goodwill, net...... (657) 11,033 (11,690)
Prepaid pension
costs..............
Other investments..
Other..............
-------- --- -------- -------- ---- --- ---
Total deferred
charges and other
assets............ (657) 11,033 (11,690)
-------- --- -------- -------- ---- --- ---
Total assets...... $444,930 $202,286 $241,667 $977
======== === ======== ======== ==== === ===
</TABLE>
D-4-26
<PAGE>
EXHIBIT D-4-3
DOMINION ENERGY, INC.--FOREIGN POWER GENERATION CONSOLIDATED
CONSOLIDATING BALANCE SHEET--(CONTINUED)
As of December 31, 1999
<TABLE>
<CAPTION>
Foreign Entites Pending Sale Foreign Entities Sold
-------------------------------------------- ----------------------------
Dominion
Foreign Power Energy Dominion Dominion
Generation Interamerican Energy Company Dominion Holdings Inc. Dominion
Consolidated Consolidating Holding Co LDC (Caymen Islands) Management Peru S.A.C Energy Central
(Exhibit D-4) Entries (Note O) (Note P) Argentina SA (Note Q) America Inc.
------------- ------------- -------------- ---------------- ------------ ------------- --------------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Securities due
within one year.... $ 2,637 $ 2,637
Short-term debt.... 61,907 $ 61,907
Accounts payable,
trade.............. 6,780 1,816 4,871 $ 93
Payables to
affiliated
companies..........
Accrued interest,
payroll and taxes.. 15,847 4,201 11,633 13
Deferred income
taxes--current.....
Dividends
declared...........
Commodity contract
liabilities........
Other current
liabilities........ 2,117 2,003 114
-------- --- -------- -------- ----- --- ---
Total current
liabilities....... 89,288 8,654 80,414 220
-------- --- -------- -------- ----- --- ---
Long-term debt..... 36,877 36,877
Notes payable to
affiliates......... 49,268 49,268
Deferred credits
and other
liabilities:
Deferred income
taxes.............. 2,410 2,697 (287)
Investment tax
credits............
Other.............. (333) (333)
-------- --- -------- -------- ----- --- ---
Total deferred
credits and other
liabilities....... 2,077 (333) 2,697 (287)
-------- --- -------- -------- ----- --- ---
Total
liabilities....... 177,510 45,198 132,379 (67)
-------- --- -------- -------- ----- --- ---
Minority interest.. 77,067 70,404 6,663
Commitments and
contingencies......
Obligated
mandatorily
redeemable
preferred
securities of
subsidiary trusts
Preferred stock not
subject to
mandatory
redemption.........
Common
shareholders'
equity:
Common stock...... 159,054 58,796 98,627 1,631
Additional paid in
capital........... 377 377
Retained
earnings.......... 30,922 27,511 3,998 (587)
Accumulated other
comprehensive
income
-------- --- -------- -------- ----- --- ---
Total common
shareholders'
equity............ 190,353 86,684 102,625 1,044
-------- --- -------- -------- ----- --- ---
Total liabilities
and shareholders'
equity............ $444,930 $202,286 $241,667 $ 977
======== === ======== ======== ===== === ===
</TABLE>
D-4-27
<PAGE>
EXHIBIT D-4-3
DOMINION ENERGY, INC.--FOREIGN POWER GENERATION CONSOLIDATED
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Foreign Entities
Foreign Entities Pending Sale Sold
------------------------------------------- ------------------
Foreign Dominion Dominion Dominion
Power Energy Dominion Holdings, Energy
Generation Interamerican Energy Company Dominion Inc. Central
Consolidated Consolidating Holding Co. (Cayman Islands) Management Peru SAC America,
(Exhibit D-4) Entries LDC (Note O) (Note P) Argentina SA (Note Q) Inc.
------------- ------------- ------------- ---------------- ------------ --------- --------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating revenue and
income:
Domestic electric
utility service........
Other.................. $106,458 $21,204 $35,030 $ 600 $43,593 $6,031
-------- --- ------- ------- ----- ------- ------
Total operating revenue
and income............. 106,458 21,204 35,030 600 43,593 6,031
-------- --- ------- ------- ----- ------- ------
Expenses:
Electric fuel and
purchased energy, net..
Purchased power
capacity, net..........
Other operation and
maintenance............ 44,802 4,711 19,625 1,035 18,336 1,095
Depreciation, depletion
and amortization....... 24,167 3,722 9,234 43 9,709 1,459
Taxes, other than
income................. 3,574 16 3,296 20 242
-------- --- ------- ------- ----- ------- ------
Total operating
expenses............... 72,543 8,449 32,155 1,098 28,287 2,554
-------- --- ------- ------- ----- ------- ------
Income from operations.. 33,915 12,755 2,875 (498) 15,306 3,477
Other income and
expense:
Interest revenue....... 7,721 4,141 882 22 2,576 100
Equity in earnings of
subsidiary companies...
Interest revenue from
subsidiary companies...
Merger-related costs...
Other, net............. 4,027 2,290 2,431 369 (1,095) 32
-------- --- ------- ------- ----- ------- ------
Total other income and
expense................ 11,748 6,431 3,313 391 1,481 132
-------- --- ------- ------- ----- ------- ------
Income before fixed
charges and income
taxes................... 45,663 19,186 6,188 (107) 16,787 3,609
Fixed charges:
Interest charges....... 20,133 2,286 12,572 1 3,027 2,247
Distributions--
preferred securities
and preferred stock....
-------- --- ------- ------- ----- ------- ------
Total fixed charges.... 20,133 2,286 12,572 1 3,027 2,247
-------- --- ------- ------- ----- ------- ------
Income before provision
for income taxes,
minority interests and
extraordinary item...... 25,530 16,900 (6,384) (108) 13,760 1,363
Provision for income
taxes.................. (2,062) 3,863 (3,614) (2,382) 71
Minority interests..... 16,101 6,585 (982) 10,498
-------- --- ------- ------- ----- ------- ------
Income before
extraordinary item...... 11,490 6,451 (1,788) (108) 5,644 1,292
Extraordinary item, net
of income taxes.........
-------- --- ------- ------- ----- ------- ------
Net income.............. $ 11,490 $ 6,451 $(1,788) $(108) $ 5,644 $1,292
======== === ======= ======= ===== ======= ======
</TABLE>
D-4-28
<PAGE>
EXHIBIT D-5
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Virginia Electric VP
and Power Company Services VP
Consolidated Consolidating Virginia VP Fuel (Exhibit Capital
(Exhibit D-2) Entries Power Corp. D-5(a)) VPSC Trust
----------------- ------------- ----------- ------- -------- ------- --------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents............ $ 61,745 $ 58,043 $ 1 $ 3,042 $ 659
Accounts receivable:
Customers, less
allowance............. 663,520 592,303 69,267 1,950
Other.................. 66,012 66,012 1,564 $139,205
Receivables from
affiliated companies... 1,424 $(240,497) 69,904 31,248
Materials and supplies,
at average cost
or less:
Plant and general...... 123,871 123,300 571
Fossil fuel............ 110,844 45,543 65,301
Deferred income taxes--
current................ 49,525 49,485 40
Mortgage loans in
warehouse..............
Commodity contract
assets................. 362,218 107,610 254,608
Finance receivables held
for sale...............
Prepayments and other
current assets......... 95,168 93,481 1,192 495
----------- --------- ----------- ------- -------- ------- --------
Total current assets... 1,534,327 (240,497) 1,205,681 1 424,698 5,239 139,205
----------- --------- ----------- ------- -------- ------- --------
Investments:
Loans receivable, net...
Available for sale
securities.............
Nuclear decommissioning
trust funds............ 818,072 818,072
Investments in real
estate.................
Stocks of subsidiary
companies, at equity... (25,331) 25,331
Notes of subsidiary
companies.............. (93,814) 93,814
Other................... 52,468 52,240 28 200
----------- --------- ----------- ------- -------- ------- --------
Total investments...... 870,540 (119,145) 989,457 28 200
----------- --------- ----------- ------- -------- ------- --------
Property, plant and
equipment:
Utility plant........... 16,489,207 16,434,952 40,970 13,285
Exploration and
production properties..
Other--non-utility......
Acquisition adjustment..
----------- --------- ----------- ------- -------- ------- --------
Total property, plant
and equipment......... 16,489,207 16,434,952 40,970 13,285
----------- --------- ----------- ------- -------- ------- --------
Less accumulated
depreciation,
depletion and
amortization.......... 7,410,547 7,409,501 1,046
----------- --------- ----------- ------- -------- ------- --------
Net property, plant and
equipment.............. 9,078,660 9,025,451 40,970 12,239
----------- --------- ----------- ------- -------- ------- --------
Deferred charges and
other assets:
Regulatory assets, net.. 221,137 221,137
Goodwill, net...........
Prepaid pension costs...
Other investments.......
Other................... 59,985 51,580 8,405
----------- --------- ----------- ------- -------- ------- --------
Total deferred charges
and other assets...... 281,122 272,717 8,405
----------- --------- ----------- ------- -------- ------- --------
Total assets........... $11,764,649 $(359,642) $11,493,306 $40,971 $433,131 $17,678 $139,205
=========== ========= =========== ======= ======== ======= ========
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-5-1
<PAGE>
EXHIBIT D-5
VIRGINIA ELECTRIC AND POWER COMPANY
LIABILITIES AND SHAREHOLDERS' EQUITY
As of December 31, 1999
<TABLE>
<CAPTION>
Virginia Electric VP
and Power Company Services VP
Consolidated Consolidating Virginia VP Fuel (Exhibit Capital
(Exhibit D-2) Entries Power Corp. D-5(a)) VPSC Trust
----------------- ------------- ----------- ------- -------- ------- --------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Securities due within
one year............... $ 375,459 $ 375,459
Short-term debt......... 377,979 377,979
Accounts payable,
trade.................. 533,596 460,126 $ 73,360 $ 110
Payables to affiliated
companies.............. 556 (211,435) 172,790 $34,656 4,545
Accrued interest,
payroll and taxes...... 237,415 237,073 342
Deferred income taxes--
current................ (1,015) 1,015
Dividends declared......
Commodity contract
liabilities............ 347,093 92,923 254,170
Other current
liabilities............ 163,635 157,225 6,314 66 $ 30
----------- --------- ----------- ------- -------- ------- --------
Total current
liabilities........... 2,035,733 (211,435) 1,872,560 40,970 328,953 4,655 30
----------- --------- ----------- ------- -------- ------- --------
Long-term debt.......... 3,551,282 3,551,282
----------- --------- ----------- ------- -------- ------- --------
Notes payable to
affiliates............. (93,814) 93,814
----------- --------- ----------- ------- -------- ------- --------
Deferred credits and
other liabilities:
Deferred income taxes... 1,452,186 1,451,851 63 272
Investment tax credits.. 146,518 146,518
Other................... 192,564 190,667 1,482 415
----------- --------- ----------- ------- -------- ------- --------
Total deferred credits
and other
liabilities........... 1,791,268 1,789,036 1,545 687
----------- --------- ----------- ------- -------- ------- --------
Total liabilities...... 7,378,283 (305,249) 7,212,878 40,970 424,312 5,342 30
----------- --------- ----------- ------- -------- ------- --------
Minority interest.......
Commitments and
contingencies..........
Obligated mandatorily
redeemable preferred
securities of
subsidiary trusts...... 135,000 135,000
Preferred stock not
subject to mandatory
redemption............. 509,014 509,014
Common shareholders'
equity:
Common stock........... 2,737,407 (8,241) 2,737,407 1 11,000 3,816 4,175
Additional paid in
capital............... 16,887 (9,459) 16,887 9,459
Retained earnings...... 988,058 (36,693) 1,017,120 (2,181) (939)
Accumulated other
comprehensive income..
----------- --------- ----------- ------- -------- ------- --------
Total common
shareholders' equity.. 3,742,352 (54,393) 3,771,414 1 8,819 12,336 4,175
----------- --------- ----------- ------- -------- ------- --------
Total liabilities and
shareholders' equity.. $11,764,649 $(359,642) $11,493,306 $40,971 $433,131 $17,678 $139,205
=========== ========= =========== ======= ======== ======= ========
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-5-2
<PAGE>
EXHIBIT D-5
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Virginia Electric VP
and Power Company VP Services VP
Consolidated Consolidating Virginia Fuel (Exhibit Capital
(Exhibit D-2) Entries Power Corp. D-5(a)) VPSC Trust
----------------- ------------- ---------- ----- -------- ------ -------
(thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating revenue and
income:
Domestic electric
utility service....... $4,274,192 $4,274,186 $ 6
Other.................. 316,721 306,515 5,944 $4,262
---------- -------- ---------- ------- ------
Total operating revenue
and income............ 4,590,913 4,580,701 5,950 4,262
---------- -------- ---------- ------- ------
Expenses:
Electric fuel and
purchased energy,
net................... 986,139 986,055 84
Purchased power
capacity, net......... 808,924 808,924
Other operation and
maintenance........... 959,072 $(11,162) 959,626 7,082 3,190 $ 336
Depreciation, depletion
and amortization...... 548,397 547,867 530
Taxes, other than
income................ 281,816 281,506 261 49
---------- -------- ---------- ------- ------ ------
Total operating
expenses.............. 3,584,348 (11,162) 3,583,978 7,427 3,769 336
---------- -------- ---------- ------- ------ ------
Income from operations.. 1,006,565 11,162 996,723 (1,477) 493 (336)
---------- -------- ---------- ------- ------ ------
Other income and
expense:
Interest revenue....... 8,357 (11,204) 8,111 246 11,204
Equity in earnings of
subsidiary companies.. 378 (378)
Interest revenue from
subsidiary companies.. (336) 336
Merger-related costs...
Other, net............. 16,516 16,585 (2) (67)
---------- -------- ---------- ------- ------ ------
Total other income and
expense............... 24,873 (11,162) 24,654 244 (67) 11,204
---------- -------- ---------- ------- ------ ------
Income before fixed
charges and income
taxes.................. 1,031,438 1,021,377 (1,233) 426 10,868
---------- -------- ---------- ------- ------ ------
Fixed charges:
Interest charges....... 277,822 277,821 1
Distributions--
preferred securities
and preferred stock... 47,913 37,045 10,868
---------- -------- ---------- ------- ------ ------
Total fixed charges.... 325,735 314,866 1 10,868
---------- -------- ---------- ------- ------ ------
Income before provision
for income taxes,
minority interests and
extraordinary item..... 705,703 706,511 (1,234) 426
Provision for income
taxes................. 258,033 258,461 (470) 42
Minority interests.....
---------- -------- ---------- ------- ------ ------
Income before
extraordinary item..... 447,670 448,050 (764) 384
---------- -------- ---------- ------- ------ ------
Extraordinary item, net
of income taxes........ 254,826 254,826
---------- -------- ---------- ------- ------ ------
Net income.............. $ 192,844 $ $ 193,224 $ (764) $ 384 $
========== ======== ========== ======= ====== ======
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Notes on page D-2-2).
D-5-3
<PAGE>
EXHIBIT D-5(a)
VIRGINIA POWER SERVICES, INC.
CONSOLIDATING BALANCE SHEET
As of December 31, 1999
<TABLE>
<CAPTION>
Virginia Power
Services, Inc.
Consolidated Consolidating VPS,
(Exhibit D-5) Entries Inc. VPEM VPSE VPNS
-------------- ------------- -------- -------- ------- ----
(thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents........... $ 3,042 $ 11 $ 2,800 $231
Accounts receivable:
Customers, less
allowance............. 69,267 $ 66,485 2,628 154
Other..................
Receivables from
affiliated companies... 31,248 $ 47,935 23,159 33,091 22,933
Materials and supplies,
at average cost or
less:
Plant and general......
Fossil fuel............ 65,301 16,859 48,442
Deferred income taxes--
current................ 40 27 13
Mortgage loans in
warehouse.............
Commodity contract
assets................. 254,608 253,447 1,161
Finance receivables held
for sale...............
Prepayments and other
current assets......... 1,192 (4,484) 5,666 10
-------- -------- -------- -------- ------- ----
Total current assets... 424,698 47,935 23,170 365,425 83,630 408
-------- -------- -------- -------- ------- ----
Investments:
Loans receivable, net..
Available for sale
securities............
Nuclear decommissioning
trust funds...........
Investments in real
estate................
Stocks of subsidiary
companies, at equity..
Notes of subsidiary
companies............. 94,346 94,346
Other.................. 28 28
-------- -------- -------- -------- ------- ----
Total investments...... 28 94,346 94,346 28
-------- -------- -------- -------- ------- ----
Property, plant and
equipment:
Utility plant..........
Exploration and
production
properties............
Other-non-utility......
Acquisition
adjustment............
-------- -------- -------- -------- ------- ----
Total property, plant
and equipment.........
-------- -------- -------- -------- ------- ----
Less accumulated
depreciation, depletion
and amortization.......
Net property, plant and
equipment.............
Deferred charges and
other assets:
Regulatory assets,
net...................
Goodwill, net..........
Prepaid pension costs..
Other investments......
Other.................. 8,405 16 5,861 2,474 54
-------- -------- -------- -------- ------- ----
Total deferred charges
and other assets...... 8,405 16 5,861 2,474 54
-------- -------- -------- -------- ------- ----
Total assets........... $433,131 $142,281 $117,532 $371,286 $86,104 $490
======== ======== ======== ======== ======= ====
</TABLE>
D-5-4
<PAGE>
EXHIBIT D-5(a)
VIRGINIA POWER SERVICES, INC.
CONSOLIDATING BALANCE SHEET--(Continued)
As of December 31, 1999
<TABLE>
<CAPTION>
Virginia Power
Services, Inc.
Consolidated Consolidating VPS,
(Exhibit D-5) Entries Inc. VPEM VPSE VPNS
-------------- ------------- -------- -------- ------- ------
(thousands)
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Securities due within
one year..............
Short-term debt........
Accounts payable,
trade................. $ 73,360 $ 64,879 $ 8,481
Payables to affiliated
companies............. $ 47,934 $ 23,300 23,258 $1,376
Accrued interest,
payroll and taxes..... 342 (4) 1,254 (729) (179)
Deferred income taxes--
current............... 1,015 983 32
Dividends declared.....
Commodity contract
liabilities........... 254,170 253,191 979
Other current
liabilities........... 66 6 60
-------- -------- -------- -------- ------- ------
Total current
liabilities........... 328,953 47,934 23,296 320,313 32,021 1,257
-------- -------- -------- -------- ------- ------
Long-term debt..........
Notes payable to
affiliates............. 93,814 94,347 94,031 39,672 54,458
Deferred credits and
other liabilities:
Deferred income taxes.. 63 63
Investment tax
credits...............
Other.................. 1,482 1 1,826 (391) 46
-------- -------- -------- -------- ------- ------
Total deferred credits
and other
liabilities........... 1,545 1 1,826 (391) 109
-------- -------- -------- -------- ------- ------
Total liabilities...... 424,312 142,281 117,328 361,811 86,088 1,366
-------- -------- -------- -------- ------- ------
Minority interest.......
Commitments and
contingencies..........
Obligated mandatorily
redeemable preferred
securities of
subsidiary trusts......
Preferred stock not
subject to mandatory
redemption.............
Common shareholders'
equity:
Common stock........... 11,000 249 10,000 1 750
Additional paid in
capital...............
Retained earnings...... (2,181) (45) (525) 15 (1,626)
Accumulated other
comprehensive income..
-------- -------- -------- -------- ------- ------
Total common
shareholders' equity.. 8,819 204 9,475 16 (876)
-------- -------- -------- -------- ------- ------
Total liabilities and
shareholders' equity.. $433,131 $142,281 $117,532 $371,286 $86,104 $ 490
======== ======== ======== ======== ======= ======
</TABLE>
D-5-5
<PAGE>
EXHIBIT D-5(a)
VIRGINIA POWER SERVICES, INC.
CONSOLIDATING INCOME STATEMENT
For The Year Ended December 31, 1999
<TABLE>
<CAPTION>
Virginia Power
Services, Inc.
Consolidated Consolidating VPS,
(Exhibit D-5) Entries Inc. VPEM VPSE VPNS
-------------- ------------- ---- ------ ---- ------
(thousands)
<S> <C> <C> <C> <C> <C> <C>
Operating revenue and
income:
Domestic electric
utility service...... $ 6 $ 6
Other................. 5,944 3,565 $2,379
------- ----- ---- ------ ---- ------
Total operating
revenue and
income............. 5,950 3,571 2,379
------- ----- ---- ------ ---- ------
Expenses:
Electric fuel and
purchased energy,
net.................. 84 $ 84
Purchased power
capacity, net........
Other operation and
maintenance.......... 7,082 $ 63 4,270 (83) 2,832
Depreciation,
depletion and
amortization.........
Taxes, other than
income............... 261 180 81
------- ----- ---- ------ ---- ------
Total operating
expenses........... 7,427 63 4,450 1 2,913
------- ----- ---- ------ ---- ------
Income from operations.. (1,477) (63) (879) (1) (534)
Other income and
expense:
Interest revenue...... 246 12 59 11 164
Equity in earnings of
subsidiary
companies............
Interest revenue from
subsidiary
companies............
Merger-related costs..
Other, net............ (2) (2)
------- ----- ---- ------ ---- ------
Total other income
and expense........ 244 12 57 11 164
------- ----- ---- ------ ---- ------
Income before fixed
charges and income
taxes.................. (1,233) (51) (822) 10 (370)
Fixed charges:
Interest charges...... 1 1
Distributions--
preferred securities
and preferred stock..
------- ----- ---- ------ ---- ------
Total fixed
charges............ 1 1
------- ----- ---- ------ ---- ------
Income before provision
for income taxes,
minority interests and
extraordinary item..... (1,232) (51) (821) 10 (370)
Provision for income
taxes................ (470) (18) (296) (5) (151)
Minority interests....
------- ----- ---- ------ ---- ------
Income before
extraordinary item..... (762) (33) (525) 15 (219)
------- ----- ---- ------ ---- ------
Extraordinary item, net
of income taxes........
Net income.............. $ (762) $(33) $ (525) $ 15 $ (219)
======= ===== ==== ====== ==== ======
</TABLE>
D-5-6
<PAGE>
EXHIBIT D-6
FINANCIAL STATEMENTS
CONSOLIDATED NATURAL GAS COMPANY
Financial statements as of and for the year ended December 31, 1999
INDEX
<TABLE>
<CAPTION>
Page
------
<S> <C>
Report of Independent Accountants........................................ D-6-2
Consolidating Balance Sheet.............................................. D-6-3
Consolidating Income Statement........................................... D-6-7
Consolidating Statement of Retained Earnings............................. D-6-9
Consolidating Statement of Cash Flows.................................... D-6-11
Consolidating Balance Sheet Supplement................................... D-6-15
Consolidating Income Statement Supplement................................ D-6-17
Consolidating Statement of Retained Earnings Supplement.................. D-6-18
Consolidating Statement of Cash Flows Supplement......................... D-6-19
CNG Transmission Corporation:
Consolidating Balance Sheet............................................ D-6-20
Consolidating Income Statement......................................... D-6-22
Consolidating Statement of Retained Earnings........................... D-6-23
Consolidating Statement of Cash Flows.................................. D-6-24
CNG Producing Company:
Consolidating Balance Sheet............................................ D-6-25
Consolidating Income Statement......................................... D-6-27
Consolidating Statement of Retained Earnings........................... D-6-28
Consolidating Statement of Cash Flows.................................. D-6-29
CNG Power Company:
Consolidating Balance Sheet............................................ D-6-30
Consolidating Income Statement......................................... D-6-32
Consolidating Statement of Retained Earnings........................... D-6-33
Consolidating Statement of Cash Flows.................................. D-6-34
CNG International Corporation:
Consolidating Balance Sheet............................................ D-6-36
Consolidating Income Statement......................................... D-6-38
Consolidating Statement of Retained Earnings........................... D-6-39
Consolidating Statement of Cash Flows.................................. D-6-40
CNG Cayman One Ltd:
Consolidating Balance Sheet............................................ D-6-42
Consolidating Income Statement......................................... D-6-44
Consolidating Statement of Retained Earnings........................... D-6-45
Consolidating Statement of Cash Flows.................................. D-6-46
CNG Cayman Three Ltd:
Consolidating Balance Sheet............................................ D-6-48
Consolidating Income Statement......................................... D-6-50
Consolidating Statement of Retained Earnings........................... D-6-51
Consolidating Statement of Cash Flows.................................. D-6-52
CNG Products and Services, Inc.:
Consolidating Balance Sheet............................................ D-6-54
Consolidating Income Statement......................................... D-6-56
Consolidating Statement of Retained Earnings........................... D-6-57
Consolidating Statement of Cash Flows.................................. D-6-58
</TABLE>
Note: The Notes to Consolidated Financial Statements appearing on pages 26 to
55 of Exhibit I to Consolidated Natural Gas Company's Form 8-K filed with
the SEC on January 27, 2000, are incorporated herein by reference.
D-6-1
<PAGE>
EXHIBIT D-6
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Consolidated Natural Gas Company
In our opinion, the consolidating financial statements of Consolidated
Natural Gas Company listed in the accompanying index on page D-6-1 of Exhibit
D-6 together with the Notes thereto incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1999 present
fairly, in all material respects, the consolidated financial position of
Consolidated Natural Gas Company and its subsidiaries at December 31, 1999,
and the results of their operations and their cash flows for the year then
ended, in conformity with accounting principles generally accepted in the
United States. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit 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 audit provides a reasonable basis for the opinion expressed above.
Our audit was made for the purpose of forming an opinion on the consolidated
financial statements taken as a whole. The consolidating information on pages
D-6-3 through D-6-59 is presented for purposes of complying with the
requirements of the Public Utility Holding Company Act of 1935 rather than to
present financial position, results of operations, and cash flows of the
individual companies. Accordingly, we do not express an opinion on the
financial position, results of operations and cash flows of the individual
companies. However, the consolidating information on pages D-6-3 through D-6-
59 has been subjected to the auditing procedures applied in the audit of the
consolidated financial statements and, in our opinion, is fairly stated in all
material respects in relation to the consolidated financial statements taken
as a whole.
PRICEWATERHOUSECOOPERS LLP
600 Grant Street
Pittsburgh, Pennsylvania 15219-9954
January 26, 2000
D-6-2
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
CONSOLIDATED SUBSIDIARIES
------------ ---------------------------------------------
Eliminations
CNG and and Combined CNGT
Subsidiaries Adjustments* Total CNG CNGSvc (Page D-6-20) EOG PNG
------------ ------------ ----------- ---------- -------- ------------- ---------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Property, Plant and
Equipment (Note 6)
Gas utility and other
plant................... $ 4,648,120 $ (548,328) $ 5,196,448 $ -- $ 43,981 $2,109,020 $1,572,453 $ 690,703
Accumulated depreciation
and amortization........ (1,959,475) 155,566 (2,115,041) -- (19,763) (952,939) (656,983) (241,262)
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Net gas utility and
other plant............ 2,688,645 (392,762) 3,081,407 -- 24,218 1,156,081 915,470 449,441
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Exploration and
production properties... 4,392,319 -- 4,392,319 -- -- 228,132 -- --
Accumulated depreciation
and amortization........ (2,853,703) 24,733 (2,878,436) -- -- (208,609) -- --
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Net exploration and
production properties.. 1,538,616 24,733 1,513,883 -- -- 19,523 -- --
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Net property, plant and
equipment.............. 4,227,261 (368,029) 4,595,290 -- 24,218 1,175,604 915,470 449,441
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Investments
Stocks of subsidiary
companies, at equity--
consolidated............ -- (2,570,661) 2,570,661 2,570,661 -- -- -- --
Notes of subsidiary
companies--
consolidated............ -- (1,478,066) 1,478,066 1,478,066 -- -- -- --
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Total investments...... -- (4,048,727) 4,048,727 4,048,727 -- -- -- --
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Current Assets
Cash and temporary cash
investments............. 93,891 (231) 94,122 2 62,229 95 7,285 4,046
Accounts receivable
Customers.............. 349,818 (18,922) 368,740 535 -- 43,862 183,878 72,889
Unbilled revenues and
other.................. 198,324 (17,198) 215,522 37 851 2,721 75,971 10,872
Allowance for doubtful
accounts............... (21,240) 152 (21,392) (535) -- -- (7,561) (6,452)
Receivables from
affiliated companies--
consolidated............ -- (1,445,441) 1,445,441 723,125 634,202 27,990 5,422 1,897
Inventories, at cost
Gas stored--current
portion (Note 10)...... 86,312 (15,180) 101,492 -- -- -- 54,222 9,064
Materials and supplies
(average cost method).. 20,336 (537) 20,873 -- -- 9,063 5,587 2,133
Unrecovered gas costs
(Note 5)................ 38,074 -- 38,074 -- -- 19,856 -- 18,218
Deferred income taxes--
current (net) (Note 9).. 674 (10,299) 10,973 -- -- 4,514 4,295 --
Net assets held for sale
(Note 2)................ 371,508 371,508 -- -- -- -- -- --
Prepayments and other
current assets.......... 299,914 (2,468) 302,382 67,617 1,883 62,606 88,707 13,722
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Total current assets... 1,437,611 (1,138,616) 2,576,227 790,781 699,165 170,707 417,806 126,389
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Regulatory and Other
Assets
Other investments....... 353,795 (56) 353,851 2,500 -- 38,498 782 --
Deferred charges and
other assets (Notes 5,
7, 8, 9 and 17)......... 516,552 (83,414) 599,966 53,722 17,880 95,150 212,619 189,364
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Total regulatory and
other assets........... 870,347 (83,470) 953,817 56,222 17,880 133,648 213,401 189,364
----------- ----------- ----------- ---------- -------- ---------- ---------- ---------
Total assets........... $ 6,535,219 $(5,638,842) $12,174,061 $4,895,730 $741,263 $1,479,959 $1,546,677 $ 765,194
=========== =========== =========== ========== ======== ========== ========== =========
</TABLE>
- ----
* The elimination journal entries pertaining to this consolidating financial
statement are prepared in detail form, showing the amounts pertaining to the
Registrant and each subsidiary company, and are preserved with the
Registrant's copy of this Form U5B.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-3
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING BALANCE SHEET--(Continued)
At December 31, 1999
<TABLE>
<CAPTION>
SUBSIDIARIES
-----------------------------------------------------------------------------------------------
CNG Other
CNGP Field CNG CNG Power CNGI Subsidiaries
VNG HGI (Page D-6-25) Services Retail (Page D-6-30) (Page D-6-36) (Page D-6-15)
--------- -------- ------------- -------- ------- ------------- ------------- -------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Property, Plant and
Equipment (Note 6)
Gas utility and other
plant................... $ 546,100 $194,771 $ -- $21,063 $ 8,065 $ 5,845 $ 818 $ 3,629
Accumulated depreciation
and amortization........ (155,190) (78,582) -- -- (3,410) (2,804) (479) (3,629)
--------- -------- ----------- ------- ------- ------- -------- -------
Net gas utility and
other plant............ 390,910 116,189 -- 21,063 4,655 3,041 339 --
--------- -------- ----------- ------- ------- ------- -------- -------
Exploration and
production properties... -- -- 4,164,187 -- -- -- -- --
Accumulated depreciation
and amortization........ -- -- (2,669,827) -- -- -- -- --
--------- -------- ----------- ------- ------- ------- -------- -------
Net exploration and
production properties.. -- -- 1,494,360 -- -- -- -- --
--------- -------- ----------- ------- ------- ------- -------- -------
Net property, plant and
equipment.............. 390,910 116,189 1,494,360 21,063 4,655 3,041 339 --
--------- -------- ----------- ------- ------- ------- -------- -------
Investments
Stocks of subsidiary
companies, at equity--
consolidated............ -- -- -- -- -- -- -- --
Notes of subsidiary
companies--
consolidated............ -- -- -- -- -- -- -- --
--------- -------- ----------- ------- ------- ------- -------- -------
Total investments...... -- -- -- -- -- -- -- --
--------- -------- ----------- ------- ------- ------- -------- -------
Current Assets
Cash and temporary cash
investments............. 231 2,937 15,971 4 4 1 1,246 71
Accounts receivable
Customers.............. 18,922 17,793 4,587 14,235 9,016 1,862 -- 1,161
Unbilled revenues and
other.................. 17,198 12,149 95,003 (58) 62 -- 665 51
Allowance for doubtful
accounts............... (152) (1,262) (1,000) (2,233) (2,024) -- -- (173)
Receivables from
affiliated companies--
consolidated............ 4,131 1,503 16,127 6,941 10,554 5,819 (28) 7,758
Inventories, at cost
Gas stored--current
portion (Note 10)...... 13,118 7,308 -- -- 17,780 -- -- --
Materials and supplies
(average cost method).. 537 584 2,933 -- -- 36 -- --
Unrecovered gas costs
(Note 5)................ -- -- -- -- -- -- -- --
Deferred income taxes--
current (net) (Note 9).. 2,082 -- 82 -- -- -- -- --
Net assets held for sale
(Note 2)................ -- -- -- -- -- -- -- --
Prepayments and other
current assets.......... 2,468 4,393 34,876 22,649 3,352 2 7 100
--------- -------- ----------- ------- ------- ------- -------- -------
Total current assets... 58,535 45,405 168,579 41,538 38,744 7,720 1,890 8,968
--------- -------- ----------- ------- ------- ------- -------- -------
Regulatory and Other
Assets
Other investments....... 56 1,125 -- -- -- 613 259,467 50,810
Deferred charges and
other assets (Notes 5,
7, 8, 9 and 17)......... 3,488 24,437 (465) (40) -- -- -- 3,811
--------- -------- ----------- ------- ------- ------- -------- -------
Total regulatory and
other assets........... 3,544 25,562 (465) (40) -- 613 259,467 54,621
--------- -------- ----------- ------- ------- ------- -------- -------
Total assets........... $ 452,989 $187,156 $ 1,662,474 $62,561 $43,399 $11,374 $261,696 $63,589
========= ======== =========== ======= ======= ======= ======== =======
</TABLE>
- ----
* The elimination journal entries pertaining to this consolidating financial
statement are prepared in detail form, showing the amounts pertaining to the
Registrant and each subsidiary company, and are preserved with the
Registrant's copy of this Form U5B.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-4
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
CONSOLIDATED SUBSIDIARIES
------------ ----------------------------------------
Eliminations
CNG and and Combined CNGT (Page
Subsidiaries Adjustments* Total CNG CNGSvc D-6-21) EOG PNG
------------ ------------ ----------- ---------- -------- ---------- ---------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STOCKHOLDERS' EQUITY AND
LIABILITIES
Capitalization
Common stockholders'
equity (Note 11)
Common stock, par value
$2.75 per share
Authorized--400,000,000
shares
Issued--95,948,452
shares................. $ 263,858 $(1,980,190) $ 2,244,048 $ 263,858 $ 10 $ 601,000 $ 237,968 $183,535
Capital in excess of
par value.............. 567,382 (39,887) 607,269 527,417 -- 2,254 19,975 --
Retained earnings, per
accompanying statement
(Note 13).............. 1,545,664 (540,118) 2,085,782 1,548,224 -- 119,222 156,759 65,346
Treasury stock, at cost
(10,443 shares)........ (594) -- (594) (594) -- -- -- --
---------- ----------- ----------- ---------- -------- ---------- ---------- --------
Total common
stockholders' equity... 2,376,310 (2,560,195) 4,936,505 2,338,905 10 722,476 414,702 248,881
---------- ----------- ----------- ---------- -------- ---------- ---------- --------
Long-term debt (Note 14)
Debentures and Notes... 1,763,678 -- 1,763,678 1,763,678 -- -- -- --
Notes payable to
Registrant--
consolidated........... -- (1,478,066) 1,478,066 -- 23,432 337,426 298,259 131,344
---------- ----------- ----------- ---------- -------- ---------- ---------- --------
Total long-term debt... 1,763,678 (1,478,066) 3,241,744 1,763,678 23,432 337,426 298,259 131,344
---------- ----------- ----------- ---------- -------- ---------- ---------- --------
Total capitalization... 4,139,988 (4,038,261) 8,178,249 4,102,583 23,442 1,059,902 712,961 380,225
---------- ----------- ----------- ---------- -------- ---------- ---------- --------
Current Liabilities
Commercial paper (Note
15)..................... 685,731 -- 685,731 685,731 -- -- -- --
Accounts payable........ 334,956 (12,030) 346,986 246 9,709 23,863 95,231 28,503
Payables to affiliated
companies--
consolidated............ -- (1,445,441) 1,445,441 28,179 654,778 98,616 336,445 122,886
Estimated rate
contingencies and
refunds (Note 5)........ 44,914 (1,638) 46,552 -- -- 32,639 11,962 289
Amounts payable to
customers (Note 5)...... 3,955 (3,867) 7,822 -- -- -- 3,955 --
Taxes accrued........... 134,257 (1,851) 136,108 4,636 (363) 33,731 87,576 1,028
Deferred income taxes--
current (net) (Note 9).. -- (8,217) 8,217 -- -- -- -- 8,192
Dividends declared...... 46,530 -- 46,530 46,530 -- -- -- --
Other current
liabilities............. 102,883 (11,069) 113,952 26,664 3,300 18,140 19,475 15,760
---------- ----------- ----------- ---------- -------- ---------- ---------- --------
Total current
liabilities............ 1,353,226 (1,484,113) 2,837,339 791,986 667,424 206,989 554,644 176,658
---------- ----------- ----------- ---------- -------- ---------- ---------- --------
Deferred Credits
Deferred income taxes
(Note 9)................ 808,031 (6,897) 814,928 (15,815) 1,740 190,236 194,539 150,614
Accumulated deferred
investment tax credits.. 19,524 (2,684) 22,208 -- -- -- 9,615 7,743
Deferred credits and
other liabilities (Notes
5, 8 and 9)............. 214,450 (106,887) 321,337 16,976 48,657 22,832 74,918 49,954
---------- ----------- ----------- ---------- -------- ---------- ---------- --------
Total deferred
credits................ 1,042,005 (116,468) 1,158,473 1,161 50,397 213,068 279,072 208,311
---------- ----------- ----------- ---------- -------- ---------- ---------- --------
Commitments and
Contingencies (Note
18).....................
---------- ----------- ----------- ---------- -------- ---------- ---------- --------
Total stockholders'
equity and
liabilities............ $6,535,219 $(5,638,842) $12,174,061 $4,895,730 $741,263 $1,479,959 $1,546,677 $765,194
========== =========== =========== ========== ======== ========== ========== ========
</TABLE>
- ----
* The elimination journal entries pertaining to this consolidating financial
statement are prepared in detail form, showing the amounts pertaining to the
Registrant and each subsidiary company, and are preserved with the
Registrant's copy of this Form U5B.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-5
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING BALANCE SHEET--(Continued)
At December 31, 1999
<TABLE>
<CAPTION>
SUBSIDIARIES
------------------------------------------------------------------------------
CNG Other
CNG Power CNGI Subsidiaries
CNGP (Page Field CNG (Page Page (Page
VNG HGI D-6-26) Services Retail D-6-31) (D-6-37) D-6-16)
-------- -------- ---------- -------- ------- ------- -------- ------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STOCKHOLDERS' EQUITY AND
LIABILITIES
Capitalization
Common stockholders'
equity (Note 11)
Common stock, par value
$2.75 per share
Authorized--400,000,000
shares
Issued--95,948,452
shares................. $148,697 $ 44,900 $ 439,000 $13,670 $ 6,000 $ 8,360 $238,550 $58,500
Capital in excess of
par value.............. 57,603 -- -- -- -- -- -- 20
Retained earnings, per
accompanying statement
(Note 13).............. 2,437 12,566 240,256 8,286 (8,845) 825 (12,758) (46,536)
Treasury stock, at cost
(10,443 shares)........ -- -- -- -- -- -- -- --
-------- -------- ---------- ------- ------- ------- -------- -------
Total common
stockholders' equity... 208,737 57,466 679,256 21,956 (2,845) 9,185 225,792 11,984
-------- -------- ---------- ------- ------- ------- -------- -------
Long-term debt (Note 14)
Debentures and Notes... -- -- -- -- -- -- -- --
Notes payable to
Registrant--
consolidated........... 116,000 36,930 519,675 -- -- -- 15,000 --
-------- -------- ---------- ------- ------- ------- -------- -------
Total long-term debt... 116,000 36,930 519,675 -- -- -- 15,000 --
-------- -------- ---------- ------- ------- ------- -------- -------
Total capitalization... 324,737 94,396 1,198,931 21,956 (2,845) 9,185 240,792 11,984
-------- -------- ---------- ------- ------- ------- -------- -------
Current Liabilities
Commercial paper (Note
15)..................... -- -- -- -- -- -- -- --
Accounts payable........ 12,030 14,604 136,347 17,159 7,357 381 242 1,314
Payables to affiliated
companies--
consolidated............ 50,902 36,178 14,231 13,530 37,924 109 10,228 41,435
Estimated rate
contingencies and
refunds (Note 5)........ 1,638 24 -- -- -- -- -- --
Amounts payable to
customers (Note 5)...... 3,867 -- -- -- -- -- -- --
Taxes accrued........... 1,860 2,508 2,999 109 421 935 574 94
Deferred income taxes--
current (net) (Note 9).. -- 25 -- -- -- -- -- --
Dividends declared...... -- -- -- -- -- -- -- --
Other current
liabilities............. 11,075 2,752 5,671 8,475 390 -- 127 2,123
-------- -------- ---------- ------- ------- ------- -------- -------
Total current
liabilities............ 81,372 56,091 159,248 39,273 46,092 1,425 11,171 44,966
-------- -------- ---------- ------- ------- ------- -------- -------
Deferred Credits
Deferred income taxes
(Note 9)................ 15,265 16,005 250,506 (831) (951) 764 6,217 6,639
Accumulated deferred
investment tax credits.. 2,684 2,166 -- -- -- -- -- --
Deferred credits and
other liabilities (Notes
5, 8 & 9)............... 28,931 18,498 53,789 2,163 1,103 -- 3,516 --
-------- -------- ---------- ------- ------- ------- -------- -------
Total deferred
credits................ 46,880 36,669 304,295 1,332 152 764 9,733 6,639
-------- -------- ---------- ------- ------- ------- -------- -------
Commitments and
Contingencies (Note
18).....................
-------- -------- ---------- ------- ------- ------- -------- -------
Total stockholders'
equity and
liabilities............ $452,989 $187,156 $1,662,474 $62,561 $43,399 $11,374 $261,696 $63,589
======== ======== ========== ======= ======= ======= ======== =======
</TABLE>
- ----
* The elimination journal entries pertaining to this consolidating financial
statement are prepared in detail form, showing the amounts pertaining to the
Registrant and each subsidiary company, and are preserved with the
Registrant's copy of this Form U5B.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-6
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CONSOLIDATED SUBSIDIARIES
------------ --------------------------------------------
Eliminations
CNG and and Combined CNGT
Subsidiaries Adjustments* Total CNG CNGSvc (Page D-6-22) EOG PNG
------------ ------------ ---------- -------- --------- ------------- --------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues
Regulated gas sales..... $1,397,200 $ (1,211) $1,398,411 $ -- $ -- $ -- $ 910,501 $196,378
Nonregulated gas sales.. 607,943 (98,104) 706,047 -- -- 32,357 -- --
---------- --------- ---------- -------- --------- -------- --------- --------
Total gas sales...... 2,005,143 (99,315) 2,104,458 -- -- 32,357 910,501 196,378
Gas transportation and
storage................. 566,811 (115,416) 682,227 -- -- 471,089 98,931 98,817
Other................... 502,396 (271,100) 773,496 -- 257,425 43,532 13,539 7,858
---------- --------- ---------- -------- --------- -------- --------- --------
Total operating
revenues (Note 5).... 3,074,350 (485,831) 3,560,181 -- 257,425 546,978 1,022,971 303,053
---------- --------- ---------- -------- --------- -------- --------- --------
Operating Expenses
Purchased gas........... 911,652 (216,362) 1,128,014 -- -- 13,804 558,868 112,035
Liquids, capacity and
other products
purchased............... 279,929 (2,233) 282,162 -- -- 56,935 -- --
Operation expense (Note
7)...................... 670,048 (267,236) 937,284 35,658 122,446 160,689 233,047 74,097
Maintenance............. 103,559 -- 103,559 -- 814 29,379 23,975 20,206
Depreciation and
amortization (Note 6)... 378,710 (168) 378,878 -- 5,835 60,928 43,291 16,399
Taxes, other than income
taxes................... 197,432 -- 197,432 3,045 4,666 37,465 104,439 19,391
---------- --------- ---------- -------- --------- -------- --------- --------
Subtotal............. 2,541,330 (485,999) 3,027,329 38,703 133,761 359,200 963,620 242,128
---------- --------- ---------- -------- --------- -------- --------- --------
Operating income
before income taxes.. 533,020 168 532,852 (38,703) 123,664 187,778 59,351 60,925
Income taxes (Note 9)... 73,581 61 73,520 (20,936) -- 58,054 8,184 9,689
---------- --------- ---------- -------- --------- -------- --------- --------
Operating income..... 459,439 107 459,332 (17,767) 123,664 129,724 51,167 51,236
---------- --------- ---------- -------- --------- -------- --------- --------
Other Income
(Deductions)
Interest revenues....... 2,406 (4,165) 6,571 563 1 311 3,763 119
Merger expense (Note
2)...................... (212,750) -- (212,750) (16,711) (120,916) (12,003) (10,632) (4,144)
Other--net.............. 12,082 -- 12,082 (114) (145) 5,299 (3,984) (988)
Equity in earnings of
subsidiary companies--
consolidated............ -- (190,444) 190,444 190,444 -- -- -- --
Interest revenues from
affiliated companies--
consolidated............ -- (120,973) 120,973 117,653 -- 1,105 -- --
---------- --------- ---------- -------- --------- -------- --------- --------
Total other income
(deductions)......... (198,262) (315,582) 117,320 291,835 (121,060) (5,288) (10,853) (5,013)
---------- --------- ---------- -------- --------- -------- --------- --------
Income before
interest charges..... 261,177 (315,475) 576,652 274,068 2,604 124,436 40,314 46,223
---------- --------- ---------- -------- --------- -------- --------- --------
Interest Charges
Interest on long-term
debt.................... 108,252 (85,321) 193,573 108,051 484 24,841 16,231 9,737
Other interest expense.. 28,623 (39,817) 68,440 29,257 2,120 1,624 12,718 2,392
Allowance for funds used
during construction..... (12,458) -- (12,458) -- -- (1,110) (1,941) (342)
---------- --------- ---------- -------- --------- -------- --------- --------
Total interest
charges.............. 124,417 (125,138) 249,555 137,308 2,604 25,355 27,008 11,787
---------- --------- ---------- -------- --------- -------- --------- --------
Net Income.............. $ 136,760 $(190,337) $ 327,097 $136,760 $ -- $ 99,081 $ 13,306 $ 34,436
========== ========= ========== ======== ========= ======== ========= ========
Basic Diluted
---------- ---------
Earnings per common
share (Note 4).......... $ 1.43 $ 1.42
</TABLE>
- ----
* The elimination journal entries pertaining to this consolidating financial
statement are prepared in detail form, showing the amounts pertaining to the
Registrant and each subsidiary company, and are preserved with the
Registrant's copy of this Form U5B.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-7
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY--(Continued)
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
SUBSIDIARIES
-----------------------------------------------------------------------------------------------
CNG Other
CNGP Field CNG CNG Power CNGI Subsidiaries
VNG HGI (Page D-6-27) Services Retail (Page D-6-32) (Page D-6-38) (Page D-6-17)
-------- -------- ------------- -------- -------- ------------- ------------- -------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues
Regulated gas sales..... $190,213 $101,319 $ -- $ -- $ -- $ -- $ -- $ --
Nonregulated gas sales.. -- -- 423,800 146,494 103,396 -- -- --
-------- -------- -------- -------- -------- ------- ------- -------
Total gas sales...... 190,213 101,319 423,800 146,494 103,396 -- -- --
Gas transportation and
storage................. 6,116 6,464 462 348 -- -- -- --
Other................... 6,506 3,502 395,807 3,398 19,793 13,821 1,452 6,863
-------- -------- -------- -------- -------- ------- ------- -------
Total operating
revenues (Note 5).... 202,835 111,285 820,069 150,240 123,189 13,821 1,452 6,863
-------- -------- -------- -------- -------- ------- ------- -------
Operating Expenses
Purchased gas........... 99,419 55,221 51,796 132,835 104,036 -- -- --
Liquids, capacity and
other products
purchased............... -- -- 206,569 1,929 8,509 8,220 -- --
Operation expense (Note
7)...................... 47,349 29,105 200,404 8,648 8,561 3,306 5,568 8,406
Maintenance............. 6,195 5,645 16,964 -- 365 -- 16 --
Depreciation and
amortization (Note 6)... 14,063 5,929 230,482 -- 1,602 210 139 --
Taxes, other than income
taxes................... 10,387 8,652 8,047 253 797 45 260 (15)
-------- -------- -------- -------- -------- ------- ------- -------
Subtotal............. 177,413 104,552 714,262 143,665 123,870 11,781 5,983 8,391
-------- -------- -------- -------- -------- ------- ------- -------
Operating income
before income taxes.. 25,422 6,733 105,807 6,575 (681) 2,040 (4,531) (1,528)
Income taxes (Note 9)... 4,868 163 8,151 1,908 (1,511) 1,649 2,694 607
-------- -------- -------- -------- -------- ------- ------- -------
Operating income..... 20,554 6,570 97,656 4,667 830 391 (7,225) (2,135)
-------- -------- -------- -------- -------- ------- ------- -------
Other Income
(Deductions)
Interest revenues....... -- 12 959 196 175 32 270 170
Merger expense (Note
2)...................... (4,567) (812) (32,990) (946) (2,814) -- (6,215) --
Other--net.............. (40) (822) 54 -- -- 781 8,362 3,679
Equity in earnings of
subsidiary companies--
consolidated............ -- -- -- -- -- -- -- --
Interest revenues from
affiliated companies--
consolidated............ 5 -- 68 111 -- 1,695 1 335
-------- -------- -------- -------- -------- ------- ------- -------
Total other income
(deductions)......... (4,602) (1,622) (31,909) (639) (2,639) 2,508 2,418 4,184
-------- -------- -------- -------- -------- ------- ------- -------
Income before
interest charges..... 15,952 4,948 65,747 4,028 (1,809) 2,899 (4,807) 2,049
-------- -------- -------- -------- -------- ------- ------- -------
Interest Charges
Interest on long-term
debt.................... 6,490 2,362 24,358 -- -- 88 931 --
Other interest expense.. 2,881 1,916 11,566 251 1,148 32 507 2,028
Allowance for funds used
during construction..... (183) (113) (8,769) -- -- -- -- --
-------- -------- -------- -------- -------- ------- ------- -------
Total interest
charges.............. 9,188 4,165 27,155 251 1,148 120 1,438 2,028
-------- -------- -------- -------- -------- ------- ------- -------
Net Income.............. $ 6,764 $ 783 $ 38,592 $ 3,777 $ (2,957) $ 2,779 $(6,245) $ 21
======== ======== ======== ======== ======== ======= ======= =======
</TABLE>
- ----
* The elimination journal entries pertaining to this consolidating financial
statement are prepared in detail form, showing the amounts pertaining to the
Registrant and each subsidiary company, and are preserved with the
Registrant's copy of this Form U5B.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-8
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CONSOLIDATED SUBSIDIARIES
------------ ---------------------------------------
CNG Eliminations
and and Combined CNGT
Subsidiaries Adjustments* Total CNG CNGSvc (Page D-6-23) EOG PNG
------------ ------------ ---------- ---------- ------ ------------- -------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retained Earnings
Balance at December 31,
1998.................... $1,591,543 $(594,969) $2,186,512 $1,596,821 $-- $ 142,141 $193,330 $ 75,776
Net income for the year
1999 per accompanying
income statement........ 136,760 (190,337) 327,097 136,760 -- 99,081 13,306 34,436
---------- --------- ---------- ---------- ---- --------- -------- --------
Total................ 1,728,303 (785,306) 2,513,609 1,733,581 -- 241,222 206,636 110,212
Dividends declared on
common stock--cash (Note
11)..................... (185,859) 245,188 (431,047) (185,859) -- (122,000) (49,877) (44,866)
Pension liability
adjustment (Note 8)..... 350 -- 350 350 -- -- -- --
Foreign currency
translation adjustment.. 2,718 -- 2,718 -- -- -- -- --
Other................... 152 -- 152 152 -- -- -- --
---------- --------- ---------- ---------- ---- --------- -------- --------
Balance at December 31,
1999 (Note 13).......... $1,545,664 $(540,118) $2,085,782 $1,548,224 $-- $ 119,222 $156,759 $ 65,346
========== ========= ========== ========== ==== ========= ======== ========
</TABLE>
- ----
* The elimination journal entries pertaining to this consolidating financial
statement are prepared in detail form, showing the amounts pertaining to
the Registrant and each subsidiary company, and are preserved with the
Registrant's copy of this Form U5B.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-9
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING STATEMENT OF RETAINED EARNINGS--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
SUBSIDIARIES
--------------------------------------------------------------------------------------------
CNG Other
CNGP Field CNG CNG Power CNGI Subsidiaries
VNG HGI (Page D-6-28) Services Retail (Page D-6-33) (Page D-6-39) (Page D-6-18)
------- ------- ------------- -------- ------- ------------- ------------- -------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retained Earnings
Balance at December 31,
1998.................... $ 3,198 $12,803 $201,664 $ 8,509 $(5,888) $ 13,946 $ (9,231) $(46,557)
Net income for the year
1999 per accompanying
income statement........ 6,764 783 38,592 3,777 (2,957) 2,779 (6,245) 21
------- ------- -------- ------- ------- -------- -------- --------
Total................ 9,962 13,586 240,256 12,286 (8,845) 16,725 (15,476) (46,536)
Dividends declared on
common stock -- cash
(Note 11)............... (7,525) (1,020) -- (4,000) -- (15,900) -- --
Pension liability
adjustment (Note 8)..... -- -- -- -- -- -- -- --
Foreign currency
translation adjustment.. -- -- -- -- -- -- 2,718 --
Other................... -- -- -- -- -- -- -- --
------- ------- -------- ------- ------- -------- -------- --------
Balance at December 31,
1999 (Note 13).......... $ 2,437 $12,566 $240,256 $8,286 $(8,845) $ 825 $(12,758) $(46,536)
======= ======= ======== ======= ======= ======== ======== ========
</TABLE>
- ----
* The elimination journal entries pertaining to this consolidating financial
statement are prepared in detail form, showing the amounts pertaining to
the Registrant and each subsidiary company, and are preserved with the
Registrant's copy of this Form U5B.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-10
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CONSOLIDATED SUBSIDIARIES
------------ --------------------------------------
Eliminations CNGT
CNG and and Combined (Page
Subsidiaries Adjustments* Total CNG CNGSvc D-6-24) EOG PNG
------------ ------------ ----------- --------- -------- -------- -------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash Flows From
Operating Activities
Net income.............. $136,760 $(190,337) $ 327,097 $ 136,760 $ -- $ 99,081 $ 13,306 $ 34,436
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities
Depreciation and
amortization.......... 378,710 (168) 378,878 -- 5,835 60,928 43,291 16,399
Pension cost (credit)--
net................... (71,823) -- (71,823) 1,446 (920) (20,380) (37,478) (16,314)
Stock award
amortization.......... 1,525 -- 1,525 328 22 12 19 --
Deferred income taxes--
net................... 47,038 61 46,977 (7,556) 4,555 3,670 28,230 5,340
Investment tax credit.. (2,267) -- (2,267) -- -- (120) (1,356) (502)
Changes in current
assets and current
liabilities
Accounts receivable--
net................... (7,073) 7,126 (14,199) 1,180 5,789 3,901 3,074 (5,755)
Receivables from
affiliated companies--
consolidated.......... -- (11,773) 11,773 9,509 (7,263) 393 524 3,725
Inventories............ 19,707 (8,595) 28,302 -- 15 1,779 13,109 4,986
Unrecovered gas costs.. (3,214) -- (3,214) -- -- 10,660 -- (13,874)
Accounts payable....... (52,327) 11,170 (63,497) (1,503) (5,789) (31,108) (14,209) (2,654)
Payables to affiliated
companies--
consolidated.......... -- 10,051 (10,051) 26,916 (23,853) (1,829) (5,909) (1,857)
Estimated rate
contingencies and
refunds............... (31,275) 439 (31,714) -- -- (24,307) (4,159) (2,833)
Amounts payable to
customers............. (38,469) 2,048 (40,517) -- -- -- (38,469) --
Taxes accrued.......... 9,189 (4,050) 13,239 4,049 43 5,523 10,053 (2,650)
Other--net............. (80,204) 2,467 (82,671) (677) (3,499) (33,339) 17,778 133
Net assets held for
sale.................. (2,910) (2,910) -- -- -- -- -- --
Changes in other assets
and other
liabilities........... 64,817 (6,204) 71,021 (19,239) 30,127 41,844 1,934 1,999
Excess of equity in
earnings of subsidiary
companies over their
cash dividends paid--
consolidated.......... -- (53,040) 53,040 53,040 -- -- -- --
Other--net............. 54 -- 54 704 (13) -- 14 (637)
-------- --------- ----------- --------- -------- -------- -------- --------
Net cash provided by
(used in) continuing
operations............ 368,238 (243,715) 611,953 204,957 5,049 116,708 29,752 19,942
Net cash provided by
(used in) discontinued
operations............ (56) -- (56) -- -- -- -- --
-------- --------- ----------- --------- -------- -------- -------- --------
Net cash provided by
(used in) operating
activities............ 368,182 (243,715) 611,897 204,957 5,049 116,708 29,752 19,942
-------- --------- ----------- --------- -------- -------- -------- --------
Cash Flows From
Investing Activities
Plant construction and
other property
additions
Acquisition of
exploration and
production assets..... (165,844) -- (165,844) -- -- -- -- --
Other.................. (444,081) -- (444,081) -- (3,053) (47,356) (60,401) (21,567)
Proceeds from
dispositions of prop.,
plant and equip.--net.. 7,491 -- 7,491 -- 28 (1,523) (5,598) (1,051)
Cost of other
investments--net....... (42,530) -- (42,530) (875) -- (1,326) -- --
Intrasystem long-term
financing--net......... -- 390,887 (390,887) (390,887) -- -- -- --
Intrasystem money pool
investments--net....... -- 20,735 (20,735) (50,975) (28,790) 13,265 -- --
Property transfers to
(from) affiliates...... -- -- -- -- -- -- -- --
-------- --------- ----------- --------- -------- -------- -------- --------
Net cash provided by
(used in) continuing
operations............ (644,964) 411,622 (1,056,586) (442,737) (31,815) (36,940) (65,999) (22,618)
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- -- -- -- --
-------- --------- ----------- --------- -------- -------- -------- --------
Net cash provided by
(used in) investing
activities............ (644,964) 411,622 (1,056,586) (442,737) (31,815) (36,940) (65,999) (22,618)
-------- --------- ----------- --------- -------- -------- -------- --------
</TABLE>
- -------
* The eliminations and adjustments are those required to eliminate
transactions among affiliated companies and otherwise give effect to the
adjusting and reclassifying entries to the consolidating balance sheets,
income statements and statements of retained earnings of the Registrant and
its subsidiaries.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-11
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING STATEMENT OF CASH FLOWS--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CONSOLIDATED SUBSIDIARIES
------------ ------------------------------------
Eliminations CNGT
CNG and and Combined (Page
Subsidiaries Adjustments* Total CNG CNGSvc D-6-24) EOG PNG
------------ ------------ -------- -------- ------- -------- -------- -------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash Flows From
Financing Activities
Issuance of common
stock--Registrant...... 196 -- 196 196 -- -- -- --
Issuance of notes--
Registrant............. 396,680 -- 396,680 396,680 -- -- -- --
Repayments of long-term
debt................... (125,375) -- (125,375) (121,375) -- -- -- --
Commercial paper--net... 125,858 -- 125,858 125,858 -- -- -- --
Dividends paid--
Registrant............. (185,606) -- (185,606) (185,606) -- -- -- --
Intrasystem long-term
financing--net......... -- (390,887) 390,887 -- 14,760 (2,077) 119,310 (10,511)
Intrasystem money pool
borrowings
(repayments)--net...... -- (23,338) 23,338 -- (8,055) 46,765 (53,161) 52,079
Dividends paid--
subsidiary companies--
consolidated........... -- 243,484 (243,484) -- -- (128,313) (39,549) (40,626)
Purchase of treasury
stock.................. (12,205) -- (12,205) (12,205) -- -- -- --
Sale of treasury stock.. 33,013 -- 33,013 33,013 -- -- -- --
-------- --------- -------- -------- ------- -------- -------- -------
Net cash provided by
(used in) continuing
operations............ 232,561 (170,741) 403,302 236,561 6,705 (83,625) 26,600 942
Net cash provided by
(used in) discontinued
operations............. -- 2,603 (2,603) -- -- -- -- --
-------- --------- -------- -------- ------- -------- -------- -------
Net cash provided by
(used in) financing
activities............ 232,561 (168,138) 400,699 236,561 6,705 (83,625) 26,600 942
-------- --------- -------- -------- ------- -------- -------- -------
Net increase (decrease)
in cash and TCIs...... (44,221) (231) (43,990) (1,219) (20,061) (3,857) (9,647) (1,734)
Cash and TCIs at January
1, 1999................ 138,112 -- 138,112 1,221 82,290 3,952 16,932 5,780
-------- --------- -------- -------- ------- -------- -------- -------
Cash and TCIs at
December 31, 1999...... $ 93,891 $ (231) $ 94,122 $ 2 $62,229 $ 95 $ 7,285 $ 4,046
======== ========= ======== ======== ======= ======== ======== =======
Continuing operations... $ 93,891 $ (231) $ 94,122 $ 2 $62,229 $ 95 $ 7,285 $ 4,046
Discontinued
operations............. -- -- -- -- -- -- -- --
-------- --------- -------- -------- ------- -------- -------- -------
Total cash and TCIs at
December 31........... $ 93,891 $ (231) $ 94,122 $ 2 $62,229 $ 95 $ 7,285 $ 4,046
======== ========= ======== ======== ======= ======== ======== =======
Supplemental Cash Flow
Information
Cash paid for
Interest (net of
amounts capitalized).. $121,158 $(116,816) $237,974 $128,774 $ 2,604 $ 24,240 $ 25,719 $11,692
Income taxes (net of
refunds).............. $ 30,714 $ -- $ 30,714 $(15,208) $(4,585) $ 52,288 $(26,315) $12,763
Non-cash investing
activities Investment
in partnership......... $ 1,795 $ -- $ 1,795 $ -- $ -- $ -- $ -- $ --
Non-cash financing
activities
Issuance of common
stock under benefit
plans................. $ 257 $ -- $ 257 $ 257 $ -- $ -- $ -- $ --
</TABLE>
- --------
* The eliminations and adjustments are those required to eliminate
transactions among affiliated companies and otherwise give effect to the
adjusting and reclassifying entries to the consolidating balance sheets,
income statements and statements of retained earnings of the Registrant and
its subsidiaries.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-12
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING STATEMENT OF CASH FLOWS--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
SUBSIDIARIES
--------------------------------------------------------------------------------
CNG Other
CNGP CNG Power CNGI Subsidiaries
(Page Field CNG (Page (Page (Page
VNG HGI D-6-29) Services Retail D-6-34) D-6-40) D-6-19)
-------- ------- --------- -------- ------- ------- -------- ------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash Flows From
Operating Activities
Net income.............. $ 6,764 $ 783 $ 38,592 $ 3,777 $(2,957) $ 2,779 $ (6,245) $ 21
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities
Depreciation and
amortization.......... 14,063 5,929 230,482 -- 1,602 210 139 --
Pension cost (credit)--
net................... 4,041 (4,505) 1,700 -- 357 -- 230 --
Stock award
amortization.......... -- -- 1,134 -- 10 -- -- --
Deferred income taxes--
net................... 5,608 5,955 (6,714) (831) (46) 241 7,833 692
Investment tax credit.. (152) (137) -- -- -- -- -- --
Changes in current
assets and current
liabilities
Accounts receivable--
net................... (7,126) (557) (10,814) (601) (2,477) (781) (276) 244
Receivables from
affiliated companies--
consolidated.......... (2,935) 1,142 215 2,178 2,422 (32) (13) 1,908
Inventories............ 8,595 2,487 (1,341) -- (2,848) 1,520 -- --
Unrecovered gas costs.. -- -- -- -- -- -- -- --
Accounts payable....... (9,448) (1,022) (288) 3,483 (918) (156) (485) 600
Payables to affiliated
companies--
consolidated.......... (467) (2,212) (3,631) 1,501 2,519 (266) (341) (622)
Estimated rate
contingencies and
refunds............... (439) 24 -- -- -- -- -- --
Amounts payable to
customers............. (2,048) -- -- -- -- -- -- --
Taxes accrued.......... 4,050 (4,292) (2,511) (882) (876) (451) 304 879
Other--net............. (2,466) (1,682) (49,448) (10,919) 1,419 17 (314) 326
Net assets held for
sale.................. -- -- -- -- -- -- -- --
Changes in other assets
and other
liabilities........... 2,164 (1,435) 12,448 1,759 3,343 446 (6,730) 2,361
Excess of equity in
earnings of subsidiary
companies over their
cash dividends paid--
consolidated.......... -- -- -- -- -- -- -- --
Other--net............. (14) -- -- -- -- -- -- --
-------- ------- --------- -------- ------- ------- -------- -------
Net cash provided by
(used in) continuing
operations............ 20,190 478 209,824 (535) 1,550 3,527 (5,898) 6,409
Net cash provided by
(used in) discontinued
operations............ -- -- -- -- -- -- -- (56)
-------- ------- --------- -------- ------- ------- -------- -------
Net cash provided by
(used in) operating
activities............ 20,190 478 209,824 (535) 1,550 3,527 (5,898) 6,353
-------- ------- --------- -------- ------- ------- -------- -------
Cash Flows From
Investing Activities
Plant construction and
other property additions
Acquisition of
exploration and
production assets..... -- -- (165,844) -- -- -- -- --
Other.................. (21,398) (7,098) (282,552) -- (55) -- (601) --
Proceeds from
dispositions of prop.,
plant and equip.--net.. 1,801 (310) 14,144 -- -- -- -- --
Cost of other
investments--net....... -- -- -- -- -- -- (37,262) (3,067)
Intrasystem long-term
financing--net......... -- -- -- -- -- -- -- --
Intrasystem money pool
investments--net....... -- -- (11,943) -- -- 42,366 1,768 13,574
Property transfers to
(from) affiliates...... -- -- -- -- -- 43 (43) --
-------- ------- --------- -------- ------- ------- -------- -------
Net cash provided by
(used in) continuing
operations............ (19,597) (7,408) (446,195) -- (55) 42,409 (36,138) 10,507
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- -- -- -- --
-------- ------- --------- -------- ------- ------- -------- -------
Net cash provided by
(used in) investing
activities............ (19,597) (7,408) (446,195) -- (55) 42,409 (36,138) 10,507
-------- ------- --------- -------- ------- ------- -------- -------
</TABLE>
- -------
* The eliminations and adjustments are those required to eliminate
transactions among affiliated companies and otherwise give effect to the
adjusting and reclassifying entries to the consolidating balance sheets,
income statements and statements of retained earnings of the Registrant and
its subsidiaries.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-13
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING STATEMENT OF CASH FLOWS--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
SUBSIDIARIES
-------------------------------------------------------------------------------------------
CNG Other
CNGP Field CNG CNG Power CNGI Subsidiaries
VNG HGI (Page D-6-29) Services Retail (Page D-6-35) (Page D-6-41) (Page D-6-19)
------- ------- ------------- -------- ------- ------------- ------------- -------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash Flows From
Financing Activities
Issuance of common
stock--Registrant...... -- -- -- -- -- -- -- --
Issuance of notes--
Registrant............. -- -- -- -- -- -- -- --
Repayments of long-term
debt................... (4,000) -- -- -- -- -- -- --
Commercial paper--net... -- -- -- -- -- -- -- --
Dividends paid--
Registrant............. -- -- -- -- -- -- -- --
Intrasystem long-term
financing--net......... 3,682 7,976 268,550 -- -- (26,403) 23,000 (7,400)
Intrasystem money pool
borrowings
(repayments)--net...... 7,863 (837) (23,080) 173 (1,636) (3,755) 9,835 (2,853)
Dividends paid--
subsidiary companies--
consolidated........... (9,925) (2,171) -- -- -- (15,900) -- (7,000)
Purchase of treasury
stock.................. -- -- -- -- -- -- -- --
Sale of treasury stock.. -- -- -- -- -- -- -- --
------- ------- -------- ------ ------- -------- ------- --------
Net cash provided by
(used in) continuing
operations............ (2,380) 4,968 245,470 173 (1,636) (46,058) 32,835 (17,253)
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- -- -- -- (2,603)
------- ------- -------- ------ ------- -------- ------- --------
Net cash provided by
(used in) financing
activities............ (2,380) 4,968 245,470 173 (1,636) (46,058) 32,835 (19,856)
------- ------- -------- ------ ------- -------- ------- --------
Net increase (decrease)
in cash and TCIs...... (1,787) (1,962) 9,099 (362) (141) (122) (9,201) (2,996)
Cash and TCIs at January
1, 1999................ 2,018 4,899 6,872 366 145 123 10,447 3,067
------- ------- -------- ------ ------- -------- ------- --------
Cash and TCIs at
December 31, 1999...... $ 231 $ 2,937 $ 15,971 $ 4 $ 4 $ 1 $ 1,246 $ 71
------- ------- -------- ------ ------- -------- ------- --------
Continuing operations... $ 231 $ 2,937 $ 15,971 $ 4 $ 4 $ 1 $ 1,246 $ 71
Discontinued
operations............. -- -- -- -- -- -- -- --
------- ------- -------- ------ ------- -------- ------- --------
Total cash and TCIs at
December 31........... $ 231 $ 2,937 $ 15,971 $ 4 $ 4 $ 1 $ 1,246 $ 71
======= ======= ======== ====== ======= ======== ======= ========
Supplemental Cash Flow
Information
Cash paid for
Interest (net of
amounts capitalized).. $ 8,584 $ 4,116 $ 27,376 $ 218 $ 1,140 $ 273 $ 1,208 $ 2,030
Income taxes (net of
refunds).............. $(3,601) $(1,503) $ 18,529 $3,766 $ (504) $ 1,745 $(5,460) $ (1,201)
Non-cash investing
activities
Investment in
partnership............ $ -- $ -- $ -- $ -- $ -- $ -- $ 1,795 $ --
Non-cash financing
activities
Issuance of common stock
under benefit plans.... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
</TABLE>
- --------
* The eliminations and adjustments are those required to eliminate
transactions among affiliated companies and otherwise give effect to the
adjusting and reclassifying entries to the consolidating balance sheets,
income statements and statements of retained earnings of the Registrant and
its subsidiaries.
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-14
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING BALANCE SHEET SUPPLEMENT
At December 31, 1999
<TABLE>
<CAPTION>
Other CNG CNG CNG
Subsidiaries Prod. & Serv Main Oil CNG CNG CNG
Total (Page D-6-54) Pass Gathering CNGPSC LNG Coal Research Financial
------------ ------------- ------- --------- ------ ------ ------ -------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Property, Plant and Equipment (Note 6)
Gas utility and other plant...... $ 3,629 $ -- $ -- $ -- $3,629 $ -- $ -- $-- $--
Accumulated depreciation and amortization.. (3,629) -- -- -- (3,629) -- -- -- --
------- ------ ------- ------- ------ ------ ------ ---- ----
Net gas utility and other
plant.......................... -- -- -- -- -- -- -- -- --
------- ------ ------- ------- ------ ------ ------ ---- ----
Exploration and production
properties...................... -- -- -- -- -- -- -- -- --
Accumulated depreciation and
amortization.................... -- -- -- -- -- -- -- -- --
------- ------ ------- ------- ------ ------ ------ ---- ----
Net exploration and production
properties..................... -- -- -- -- -- -- -- -- --
------- ------ ------- ------- ------ ------ ------ ---- ----
Net property, plant and
equipment...................... -- -- -- -- -- -- -- -- --
------- ------ ------- ------- ------ ------ ------ ---- ----
Investments
Stocks of subsidiary companies,
at equity-- consolidated........ -- -- -- -- -- -- -- -- --
Notes of subsidiary companies--
consolidated.................... -- -- -- -- -- -- -- -- --
------- ------ ------- ------- ------ ------ ------ ---- ----
Total investments............... -- -- -- -- -- -- -- -- --
------- ------ ------- ------- ------ ------ ------ ---- ----
Current Assets
Cash and temporary cash
investments..................... 71 5 -- -- -- 1 23 1 41
Accounts receivable
Customers....................... 1,161 566 -- -- 595 -- -- -- --
Unbilled revenues and other..... 51 -- -- -- (2) -- 53 -- --
Allowance for doubtful
accounts....................... (173) (173) -- -- -- -- -- -- --
Receivables from affiliated
companies-- consolidated........ 7,758 1,295 -- 3 1,659 1,012 3,718 71 --
Inventories, at cost
Gas stored--current portion
(Note 10)...................... -- -- -- -- -- -- -- -- --
Materials and supplies (average
cost method)................... -- -- -- -- -- -- -- -- --
Unrecovered gas costs (Note 5)... -- -- -- -- -- -- -- -- --
Deferred income taxes--current
(net) (Note 9).................. -- -- -- -- -- -- -- -- --
Net assets held for sale (Note
2).............................. -- -- -- -- -- -- -- -- --
Prepayments and other current
assets.......................... 100 -- 7 11 -- 2 80 -- --
------- ------ ------- ------- ------ ------ ------ ---- ----
Total current assets............ 8,968 1,693 7 14 2,252 1,015 3,874 72 41
------- ------ ------- ------- ------ ------ ------ ---- ----
Regulatory and Other Assets
Other investments................ 50,810 -- 33,390 17,420 -- -- -- -- --
Deferred charges and other assets
(Notes 5, 7, 8, 9 and 17)....... 3,811 -- -- -- -- -- 3,798 13 --
------- ------ ------- ------- ------ ------ ------ ---- ----
Total regulatory and other
assets......................... 54,621 -- 33,390 17,420 -- -- 3,798 13 --
------- ------ ------- ------- ------ ------ ------ ---- ----
Total assets.................... $63,589 $1,693 $33,397 $17,434 $2,252 $1,015 $7,672 $ 85 $ 41
======= ====== ======= ======= ====== ====== ====== ==== ====
</TABLE>
- --------
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-15
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING BALANCE SHEET SUPPLEMENT
At December 31, 1999
<TABLE>
<CAPTION>
CNG
Other Prod. & Serv. CNG CNG
Subsidiaries (Page Main Oil CNG
Total D-6-55) Pass Gathering CNGPSC LNG CNG Coal Research
------------ ------------- ------- --------- -------- ------ -------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STOCKHOLDERS' EQUITY
AND LIABILITIES
Capitalization
Common stockholders' equity
(Note 11)
Common stock, par value $2.75 per share
Authorized--400,000,000
shares Issued--95,948,452
shares................... $ 58,500 $ 3,990 $ -- $ -- $ 15,520 $1,000 $ 22,360 $ 15,580
Capital in excess of par
value.................... 20 -- 10 10 -- -- -- --
Retained earnings, per
accompanying statement
(Note 13)................ (46,536) (3,931) 2,992 3,596 (18,187) 2 (15,491) (15,502)
Treasury stock, at cost
(10,443 shares).......... -- -- -- -- -- -- -- --
-------- ------- ------- ------- -------- ------ -------- --------
Total common
stockholders' equity..... 11,984 59 3,002 3,606 (2,667) 1,002 6,869 78
-------- ------- ------- ------- -------- ------ -------- --------
Long-term debt (Note 14)
Debentures and Notes...... -- -- -- -- -- -- -- --
Notes payable to
Registrant--
consolidated............. -- -- -- -- -- -- -- --
-------- ------- ------- ------- -------- ------ -------- --------
Total long-term debt...... -- -- -- -- -- -- -- --
-------- ------- ------- ------- -------- ------ -------- --------
Total capitalization...... 11,984 59 3,002 3,606 (2,667) 1,002 6,869 78
-------- ------- ------- ------- -------- ------ -------- --------
Current Liabilities
Commercial paper (Note
15)....................... -- -- -- -- -- -- -- --
Accounts payable........... 1,314 865 -- -- 450 -- (1) --
Payables to affiliated
companies-- consolidated.. 41,435 592 25,880 11,502 3,457 1 1 1
Estimated rate
contingencies and refunds
(Note 5).................. -- -- -- -- -- -- -- --
Amounts payable to
customers (Note 5)........ -- -- -- -- -- -- -- --
Taxes accrued.............. 94 (53) (115) (95) 90 11 245 6
Deferred income taxes--
current (net) (Note 9).... -- -- -- -- -- -- -- --
Dividends declared......... -- -- -- -- -- -- -- --
Other current liabilities.. 2,123 1,177 -- -- 945 1 -- --
-------- ------- ------- ------- -------- ------ -------- --------
Total current
liabilities.............. 44,966 2,581 25,765 11,407 4,942 13 245 7
-------- ------- ------- ------- -------- ------ -------- --------
Deferred Credits
Deferred income taxes (Note
9)........................ 6,639 (947) 4,630 2,421 (23) -- 558 --
Accumulated deferred
investment tax credits.... -- -- -- -- -- -- -- --
Deferred credits and other
liabilities
(Notes 5, 8 and 9)........ -- -- -- -- -- -- -- --
-------- ------- ------- ------- -------- ------ -------- --------
Total deferred credits.... 6,639 (947) 4,630 2,421 (23) -- 558 --
-------- ------- ------- ------- -------- ------ -------- --------
Commitments and
Contingencies (Note 18)...
-------- ------- ------- ------- -------- ------ -------- --------
Total stockholders'
equity and liabilities... $ 63,589 $ 1,693 $33,397 $17,434 $ 2,252 $1,015 $ 7,672 $ 85
======== ======= ======= ======= ======== ====== ======== ========
<CAPTION>
CNG
Financial
---------
<S> <C>
STOCKHOLDERS' EQUITY
AND LIABILITIES
Capitalization
Common stockholders' equity
(Note 11)
Common stock, par value $2.75 per share
Authorized--400,000,000
shares Issued--95,948,452
shares................... $ 50
Capital in excess of par
value.................... --
Retained earnings, per
accompanying statement
(Note 13)................ (15)
Treasury stock, at cost
(10,443 shares).......... --
---------
Total common
stockholders' equity..... 35
---------
Long-term debt (Note 14)
Debentures and Notes...... --
Notes payable to
Registrant--
consolidated............. --
---------
Total long-term debt...... --
---------
Total capitalization...... 35
---------
Current Liabilities
Commercial paper (Note
15)....................... --
Accounts payable........... --
Payables to affiliated
companies-- consolidated.. 1
Estimated rate
contingencies and refunds
(Note 5).................. --
Amounts payable to
customers (Note 5)........ --
Taxes accrued.............. 5
Deferred income taxes--
current (net) (Note 9).... --
Dividends declared......... --
Other current liabilities.. --
---------
Total current
liabilities.............. 6
---------
Deferred Credits
Deferred income taxes (Note
9)........................ --
Accumulated deferred
investment tax credits.... --
Deferred credits and other
liabilities
(Notes 5, 8 and 9)........ --
---------
Total deferred credits.... --
---------
Commitments and
Contingencies (Note 18)...
---------
Total stockholders'
equity and liabilities... $ 41
=========
</TABLE>
- --------
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-16
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING INCOME STATEMENT SUPPLEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG
Products and
Other Services CNG CNG
Subsidiaries (Page Main Oil CNG CNG CNG
Total D-6-56) Pass Gathering CNGPSC LNG Coal Research Financial
------------ ------------ ------ --------- ------ ----- ----- -------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues
Regulated gas sales..... $ -- $ -- $ -- $ -- $-- $ -- $ -- $-- $--
Nonregulated gas sales.. -- -- -- -- -- -- -- -- --
------- ------- ------ ------- ---- ----- ----- ---- ----
Total gas sales........ -- -- -- -- -- -- -- -- --
Gas transportation and
storage................ -- -- -- -- -- -- -- -- --
Other................... 6,863 6,863 -- -- -- -- -- -- --
------- ------- ------ ------- ---- ----- ----- ---- ----
Total operating
revenues (Note 5)..... 6,863 6,863 -- -- -- -- -- -- --
------- ------- ------ ------- ---- ----- ----- ---- ----
Operating Expenses
Purchased gas........... -- -- -- -- -- -- -- -- --
Liquids, capacity and
other products
purchased.............. -- -- -- -- -- -- -- -- --
Operation expense (Note
7)..................... 8,406 8,257 20 107 -- 5 9 4 4
Maintenance............. -- -- -- -- -- -- -- -- --
Depreciation and
amortization (Note 6).. -- -- -- -- -- -- -- -- --
Taxes, other than income
taxes.................. (15) (17) -- -- -- -- 2 -- --
------- ------- ------ ------- ---- ----- ----- ---- ----
Subtotal............... 8,391 8,240 20 107 -- 5 11 4 4
------- ------- ------ ------- ---- ----- ----- ---- ----
Operating income before
income taxes.......... (1,528) (1,377) (20) (107) -- (5) (11) (4) (4)
Income taxes (Note 9)... 607 (1,230) 338 1,008 -- 370 121 -- --
------- ------- ------ ------- ---- ----- ----- ---- ----
Operating income....... (2,135) (147) (358) (1,115) -- (375) (132) (4) (4)
------- ------- ------ ------- ---- ----- ----- ---- ----
Other Income
(Deductions)
Interest revenues....... 170 -- -- -- -- 4 166 -- --
Merger expense (Note
2)..................... -- -- -- -- -- -- -- -- --
Other--net.............. 3,679 (2,265) 2,313 3,631 -- -- -- -- --
Equity in earnings of
subsidiary companies--
consolidated........... -- -- -- -- -- -- -- -- --
Interest revenues from
affiliated companies--
consolidated........... 335 37 -- -- -- 112 184 2 --
------- ------- ------ ------- ---- ----- ----- ---- ----
Total other income
(deductions).......... 4,184 (2,228) 2,313 3,631 -- 116 350 2 --
------- ------- ------ ------- ---- ----- ----- ---- ----
Income before interest
charges............... 2,049 (2,375) 1,955 2,516 -- (259) 218 (2) (4)
------- ------- ------ ------- ---- ----- ----- ---- ----
Interest Charges
Interest on long-term
debt................... -- -- -- -- -- -- -- -- --
Other interest expense.. 2,028 10 1,361 657 -- -- -- -- --
Allowance for funds used
during construction.... -- -- -- -- -- -- -- -- --
------- ------- ------ ------- ---- ----- ----- ---- ----
Total interest
charges............... 2,028 10 1,361 657 -- -- -- -- --
------- ------- ------ ------- ---- ----- ----- ---- ----
Net Income.............. $ 21 $(2,385) $ 594 $ 1,859 $-- $(259) $ 218 $ (2) $ (4)
======= ======= ====== ======= ==== ===== ===== ==== ====
</TABLE>
- --------
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-17
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING STATEMENT OF RETAINED EARNINGS SUPPLEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG
Products and
Other Services CNG
Subsidiaries (Page Main CNG Oil CNG CNG
Total D-6-57) Pass Gathering CNGPSC LNG CNG Coal Research Financial
------------ ------------ ------ --------- -------- ----- -------- -------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Retained Earnings
Balance at December 31,
1998................... $(46,557) $(1,546) $2,398 $1,737 $(18,187) $ 261 $(15,709) $(15,500) $(11)
Net income for the year
1999 per accompanying
income statement....... 21 (2,385) 594 1,859 -- (259) 218 (2) (4)
-------- ------- ------ ------ -------- ----- -------- -------- ----
Total.................. (46,536) (3,931) 2,992 3,596 (18,187) 2 (15,491) (15,502) (15)
Dividends declared on
common stock-- cash
(Note 11).............. -- -- -- -- -- -- -- -- --
Pension liability
adjustment (Note 8).... -- -- -- -- -- -- -- -- --
Foreign currency
translation
adjustment............. -- -- -- -- -- -- -- -- --
Other................... -- -- -- -- -- -- -- -- --
-------- ------- ------ ------ -------- ----- -------- -------- ----
Balance at December 31,
1999 (Note 13)......... $(46,536) $(3,931) $2,992 $3,596 $(18,187) $ 2 $(15,491) $(15,502) $(15)
======== ======= ====== ====== ======== ===== ======== ======== ====
</TABLE>
- --------
( ) denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-18
<PAGE>
EXHIBIT D-6
CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATING STATEMENT OF CASH FLOWS SUPPLEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG
Other Products and CNG
Subsidiaries Services Main CNG Oil CNG CNG CNG
Total (Page D-6-58) Pass Gathering CNGPSC LNG Coal Research Financial
------------ ------------- ------ --------- ------ ------- ---- -------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash Flows From
Operating Activities
Net income.............. $ 21 $(2,385) $ 594 $1,859 $ -- $ (259) $218 $ (2) $ (4)
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities
Depreciation and
amortization........... -- -- -- -- -- -- -- -- --
Pension cost (credit)--
net.................... -- -- -- -- -- -- -- -- --
Stock award
amortization........... -- -- -- -- -- -- -- -- --
Deferred income taxes--
net.................... 692 (805) 1,063 428 -- -- 6 -- --
Investment tax credit... -- -- -- -- -- -- -- -- --
Changes in current
assets and current
liabilities
Accounts receivable--
net................... 244 248 -- -- -- -- (4) -- --
Receivables from
affiliated companies--
consolidated.......... 1,908 1,850 -- (3) -- 65 (4) -- --
Inventories............ -- -- -- -- -- -- -- -- --
Unrecovered gas costs.. -- -- -- -- -- -- -- -- --
Accounts payable....... 600 604 -- -- -- -- (4) -- --
Payables to affiliated
companies--
consolidated.......... (622) (649) 18 7 -- 1 (1) 1 1
Estimated rate
contingencies and
refunds............... -- -- -- -- -- -- -- -- --
Amounts payable to
customers............. -- -- -- -- -- -- -- -- --
Taxes accrued.......... 879 512 75 315 -- 10 (28) (5) --
Other--net............. 326 343 (8) (11) -- -- 2 -- --
Net assets held for
sale.................. -- -- -- -- -- -- -- -- --
Changes in other assets
and other liabilities.. 2,361 2,168 1,335 (1,198) -- -- 56 -- --
Excess of equity in
earnings of subsidiary
companies over their
cash dividends paid--
consolidated........... -- -- -- -- -- -- -- -- --
Other--net.............. -- -- -- -- -- -- -- -- --
------- ------- ------ ------ ------ ------- ---- ---- ----
Net cash provided by
(used in) continuing
operations............ 6,409 1,886 3,077 1,397 -- (183) 241 (6) (3)
Net cash provided by
(used in) discontinued
operations............ (56) -- -- -- (56) -- -- -- --
------- ------- ------ ------ ------ ------- ---- ---- ----
Net cash provided by
(used in) operating
activities............. 6,353 1,886 3,077 1,397 (56) (183) 241 (6) (3)
------- ------- ------ ------ ------ ------- ---- ---- ----
Cash Flows From
Investing Activities
Plant construction and
other property
additions
Acquisition of
exploration and
production assets...... -- -- -- -- -- -- -- -- --
Other................... -- -- -- -- -- -- -- -- --
Proceeds from
dispositions of prop.,
plant and equip.--net.. -- -- -- -- -- -- -- -- --
Cost of other
investments--net....... (3,067) 46 (3,113) -- -- -- -- -- --
Intrasystem long-term
financing--net......... -- -- -- -- -- -- -- -- --
Intrasystem money pool
investments--net....... 13,574 (675) -- -- -- 14,533 (253) (31) --
Property transfers to
(from) affiliates...... -- -- -- -- -- -- -- -- --
------- ------- ------ ------ ------ ------- ---- ---- ----
Net cash provided by
(used in) continuing
operations............. 10,507 (629) (3,113) -- -- 14,533 (253) (31) --
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- -- -- -- -- --
------- ------- ------ ------ ------ ------- ---- ---- ----
Net cash provided by
(used in) investing
activities............. 10,507 (629) (3,113) -- -- 14,533 (253) (31) --
------- ------- ------ ------ ------ ------- ---- ---- ----
Cash Flows From
Financing Activities
Issuance of common
stock--Registrant...... -- -- -- -- -- -- -- -- --
Issuance of notes--
Registrant............. -- -- -- -- -- -- -- -- --
Repayments of long-term
debt................... -- -- -- -- -- -- -- -- --
Commercial paper--net... -- -- -- -- -- -- -- -- --
Dividends paid--
Registrant............. -- -- -- -- -- -- -- -- --
Intrasystem long-term
financing--net......... (7,400) -- -- -- -- (7,400) -- -- --
Intrasystem money pool
borrowings
(repayments)--net...... (2,853) (1,310) (56) (1,487) -- -- -- -- --
Dividends paid--
subsidiary companies--
consolidated........... (7,000) -- -- -- -- (7,000) -- -- --
Purchase of treasury
stock.................. -- -- -- -- -- -- -- -- --
Sale of treasury stock.. -- -- -- -- -- -- -- -- --
------- ------- ------ ------ ------ ------- ---- ---- ----
Net cash provided by
(used in) continuing
operations............. (17,253) (1,310) (56) (1,487) -- (14,400) -- -- --
Net cash provided by
(used in) discontinued
operations ............ (2,603) -- -- -- (2,603) -- -- -- --
------- ------- ------ ------ ------ ------- ---- ---- ----
Net cash provided by
(used in) financing
activities............. (19,856) (1,310) (56) (1,487) (2,603) (14,400) -- -- --
------- ------- ------ ------ ------ ------- ---- ---- ----
Net increase (decrease)
in cash and TCIs....... (2,996) (53) (92) (90) (2,659) (50) (12) (37) (3)
Cash and TCIs at January
1, 1999................ 3,067 58 92 90 2,659 51 35 38 44
------- ------- ------ ------ ------ ------- ---- ---- ----
Cash and TCIs at
December 31, 1999...... $ 71 $ 5 $ -- $ -- $ -- $ 1 $ 23 $ 1 $ 41
======= ======= ====== ====== ====== ======= ==== ==== ====
Continuing operations... $ 71 $ 5 $ -- $ -- $ -- $ 1 $ 23 $ 1 $ 41
Discontinued
operations............. -- -- -- -- -- -- -- -- --
------- ------- ------ ------ ------ ------- ---- ---- ----
Total cash and TCIs at
December 31............ $ 71 $ 5 $ -- $ -- $ -- $ 1 $ 23 $ 1 $ 41
======= ======= ====== ====== ====== ======= ==== ==== ====
Supplemental Cash Flow
Information
Cash paid for
Interest (net of amounts
capitalized)........... $ 2,030 $ 17 $1,345 $ 655 $ 13 $ -- $-- $-- $--
Income taxes (net of
refunds)............... $(1,201) $ (968) $ (800) $ 265 $ (225) $ 362 $160 $ 5 $--
Non-cash investing
activities Investment
in partnership......... $ -- $ -- $ -- $ -- $ -- $ -- $-- $-- $--
Non-cash financing
activities Issuance of
common stock under
benefit plans.......... $ -- $ -- $ -- $ -- $ -- $ -- $-- $-- $--
</TABLE>
- -------
( )denotes negative amount.
The Notes to Consolidated Financial Statements are an integral part of this
statement (see Note on page D-6-1).
D-6-19
<PAGE>
EXHIBIT D-6
CNG TRANSMISSION CORPORATION
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
CNGT Eliminations
and and Combined CNG
Subsidiary Adjustments Total CNGT Iroquois
---------- ------------ ---------- ---------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
ASSETS
Property, Plant and
Equipment
Gas utility and other
plant.................. $2,109,020 $ -- $2,109,020 $2,109,020 $ --
Accumulated depreciation
and amortization....... (952,939) -- (952,939) (952,939) --
---------- -------- ---------- ---------- -------
Net gas utility and
other plant........... 1,156,081 -- 1,156,081 1,156,081 --
---------- -------- ---------- ---------- -------
Exploration and produc-
tion properties........ 228,132 -- 228,132 228,132 --
Accumulated depreciation
and amortization....... (208,609) -- (208,609) (208,609) --
---------- -------- ---------- ---------- -------
Net exploration and
production proper-
ties.................. 19,523 -- 19,523 19,523 --
---------- -------- ---------- ---------- -------
Net property, plant and
equipment............. 1,175,604 -- 1,175,604 1,175,604 --
---------- -------- ---------- ---------- -------
Investments
Stock of subsidiary
company, at equity--
consolidated........... -- (39,709) 39,709 39,709 --
Notes of subsidiary com-
pany--consolidated..... -- -- -- -- --
---------- -------- ---------- ---------- -------
Total investments...... -- (39,709) 39,709 39,709 --
---------- -------- ---------- ---------- -------
Current Assets
Cash and temporary cash
investments............ 95 -- 95 94 1
Accounts receivable
Customers.............. 43,862 -- 43,862 43,862 --
Unbilled revenues and
other................. 2,721 -- 2,721 2,721 --
Allowance for doubtful
accounts.............. -- -- -- -- --
Receivables from
affiliated companies--
consolidated........... 27,990 (1,431) 29,421 18,664 10,757
Inventories, at cost
Gas stored--current
portion............... -- -- -- -- --
Materials and supplies
(average cost
method)............... 9,063 -- 9,063 9,063 --
Unrecovered gas costs... 19,856 -- 19,856 19,856 --
Deferred income taxes--
current................ 4,514 -- 4,514 4,514 --
Prepayments and other
current assets......... 62,606 -- 62,606 62,604 2
---------- -------- ---------- ---------- -------
Total current assets... 170,707 (1,431) 172,138 161,378 10,760
---------- -------- ---------- ---------- -------
Regulatory and Other As-
sets
Other investments....... 38,498 -- 38,498 -- 38,498
Deferred charges and
other assets........... 95,150 -- 95,150 95,150 --
---------- -------- ---------- ---------- -------
Total regulatory and
other assets.......... 133,648 -- 133,648 95,150 38,498
---------- -------- ---------- ---------- -------
Total assets........... $1,479,959 $(41,140) $1,521,099 $1,471,841 $49,258
========== ======== ========== ========== =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-20
<PAGE>
EXHIBIT D-6
CNG TRANSMISSION CORPORATION
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
Eliminations
CNGT and and Combined CNG
Subsidiary Adjustments Total CNGT Iroquois
---------- ------------ ---------- ---------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
STOCKHOLDER'S EQUITY AND
LIABILITIES
Capitalization
Common stockholder's
equity
Common stock.......... $ 601,000 $(23,940) $ 624,940 $ 601,000 $23,940
Capital in excess of
par value............ 2,254 -- 2,254 2,254 --
Retained earnings, per
accompanying
statement............ 119,222 (15,769) 134,991 119,222 15,769
Treasury stock, at
cost................. -- -- -- -- --
---------- -------- ---------- ---------- -------
Total common
stockholder's
equity............. 722,476 (39,709) 762,185 722,476 39,709
---------- -------- ---------- ---------- -------
Long-term debt
Debentures and Notes.. -- -- -- -- --
Notes payable to
Parent Company....... 337,426 -- 337,426 337,426 --
---------- -------- ---------- ---------- -------
Total long-term
debt............... 337,426 -- 337,426 337,426 --
---------- -------- ---------- ---------- -------
Total
capitalization..... 1,059,902 (39,709) 1,099,611 1,059,902 39,709
---------- -------- ---------- ---------- -------
Current Liabilities
Commercial paper........ -- -- -- -- --
Accounts payable........ 23,863 -- 23,863 23,863 --
Payables to affiliated
companies--
consolidated........... 98,616 (1,431) 100,047 98,615 1,432
Estimated rate
contingencies and
refunds................ 32,639 -- 32,639 32,639 --
Amounts payable to
customers.............. -- -- -- -- --
Taxes accrued........... 33,731 -- 33,731 34,116 (385)
Deferred income taxes--
current................ -- -- -- -- --
Dividends declared...... -- -- -- -- --
Other current
liabilities............ 18,140 -- 18,140 18,140 --
---------- -------- ---------- ---------- -------
Total current
liabilities........ 206,989 (1,431) 208,420 207,373 1,047
---------- -------- ---------- ---------- -------
Deferred Credits
Deferred income taxes... 190,236 -- 190,236 181,734 8,502
Accumulated deferred
investment tax
credits................ -- -- -- -- --
Deferred credits and
other liabilities...... 22,832 -- 22,832 22,832 --
---------- -------- ---------- ---------- -------
Total deferred
credits............ 213,068 -- 213,068 204,566 8,502
---------- -------- ---------- ---------- -------
Commitments and
Contingencies
---------- -------- ---------- ---------- -------
Total stockholder's
equity and
liabilities........ $1,479,959 $(41,140) $1,521,099 $1,471,841 $49,258
========== ======== ========== ========== =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-21
<PAGE>
EXHIBIT D-6
CNG TRANSMISSION CORPORATION
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Eliminations
CNGT and and Combined CNG
Subsidiary Adjustments Total CNGT Iroquois
---------- ------------ -------- -------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Operating Revenues
Regulated gas sales...... $ -- $ -- $ -- $ -- $ --
Nonregulated gas sales... 32,357 -- 32,357 32,357 --
-------- ------- -------- -------- -------
Total gas sales........ 32,357 -- 32,357 32,357 --
Gas transportation and
storage................. 471,089 -- 471,089 471,089 --
Other.................... 43,532 -- 43,532 43,532 --
-------- ------- -------- -------- -------
Total operating
revenues.............. 546,978 -- 546,978 546,978 --
-------- ------- -------- -------- -------
Operating Expenses
Purchased gas............ 13,804 -- 13,804 13,804 --
Liquids, capacity and
other products
purchased............... 56,935 -- 56,935 56,935 --
Operation expense........ 160,689 -- 160,689 160,667 22
Maintenance.............. 29,379 -- 29,379 29,379 --
Depreciation and
amortization............ 60,928 -- 60,928 60,928 --
Taxes, other than income
taxes................... 37,465 -- 37,465 37,295 170
-------- ------- -------- -------- -------
Subtotal............... 359,200 -- 359,200 359,008 192
-------- ------- -------- -------- -------
Operating income before
income taxes.......... 187,778 -- 187,778 187,970 (192)
Income taxes............. 58,054 -- 58,054 55,772 2,282
-------- ------- -------- -------- -------
Operating income....... 129,724 -- 129,724 132,198 (2,474)
-------- ------- -------- -------- -------
Other Income (Deductions)
Interest revenues........ 311 -- 311 305 6
Merger expense........... (12,003) -- (12,003) (12,003) --
Other--net............... 5,299 -- 5,299 (412) 5,711
Equity in earnings of
subsidiary company--
consolidated............ -- (3,669) 3,669 3,669 --
Interest revenues from
affiliated companies--
consolidated............ 1,105 -- 1,105 679 426
-------- ------- -------- -------- -------
Total other income
(deductions).......... (5,288) (3,669) (1,619) (7,762) 6,143
-------- ------- -------- -------- -------
Income before interest
charges............... 124,436 (3,669) 128,105 124,436 3,669
-------- ------- -------- -------- -------
Interest Charges
Interest on long-term
debt.................... 24,841 -- 24,841 24,841 --
Other interest expense... 1,624 -- 1,624 1,624 --
Allowance for funds used
during construction..... (1,110) -- (1,110) (1,110) --
-------- ------- -------- -------- -------
Total interest
charges............... 25,355 -- 25,355 25,355 --
-------- ------- -------- -------- -------
Net Income............... $ 99,081 $(3,669) $102,750 $ 99,081 $ 3,669
======== ======= ======== ======== =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-22
<PAGE>
EXHIBIT D-6
CNG TRANSMISSION CORPORATION
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Eliminations
CNGT and and Combined CNG
Subsidiary Adjustments Total CNGT Iroquois
---------- ------------ --------- --------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at December 31,
1998................... $ 142,141 $(14,925) $ 157,066 $ 142,141 $14,925
Net income for the year
1999 per accompanying
income statement ...... 99,081 (3,669) 102,750 99,081 3,669
--------- -------- --------- --------- -------
Total................. 241,222 (18,594) 259,816 241,222 18,594
Dividends declared on
common stock--cash..... (122,000) 2,825 (124,825) (122,000) (2,825)
--------- -------- --------- --------- -------
Balance at December 31,
1999................... $ 119,222 $(15,769) $ 134,991 $ 119,222 $15,769
========= ======== ========= ========= =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-23
<PAGE>
EXHIBIT D-6
CNG TRANSMISSION CORPORATION
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNGT Eliminations
and and Combined CNG
Subsidiary Adjustments Total CNGT Iroquois
---------- ------------ --------- --------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Cash Flows From
Operating Activities
Net income.............. $ 99,081 $(3,669) $ 102,750 $ 99,081 $ 3,669
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities
Depreciation and
amortization.......... 60,928 -- 60,928 60,928 --
Pension cost (credit)--
net................... (20,380) -- (20,380) (20,380) --
Stock award
amortization.......... 12 -- 12 12 --
Deferred income taxes--
net................... 3,670 -- 3,670 2,020 1,650
Investment tax credit.. (120) -- (120) (120) --
Changes in current
assets and current
liabilities
Accounts receivable--
net................... 3,901 -- 3,901 3,901 --
Receivables from
affiliated companies--
consolidated.......... 393 19 374 385 (11)
Inventories............ 1,779 -- 1,779 1,779 --
Unrecovered gas costs.. 10,660 -- 10,660 10,660 --
Accounts payable....... (31,108) -- (31,108) (31,108) --
Payables to affiliated
companies--
consolidated.......... (1,829) (19) (1,810) (1,830) 20
Estimated rate
contingencies and
refunds............... (24,307) -- (24,307) (24,307) --
Amounts payable to
customers............. -- -- -- -- --
Taxes accrued.......... 5,523 -- 5,523 6,231 (708)
Other--net............. (33,339) -- (33,339) (33,346) 7
Changes in other assets
and other
liabilities........... 41,844 -- 41,844 42,231 (387)
Excess of equity in
earnings of subsidiary
companies over their
cash dividends paid--
consolidated.......... -- 2,256 (2,256) (2,256) --
Other--net............. -- -- -- -- --
--------- ------- --------- --------- -------
Net cash provided by
(used in) continuing
operations............ 116,708 (1,413) 118,121 113,881 4,240
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- --
--------- ------- --------- --------- -------
Net cash provided by
(used in) operating
activities............ 116,708 (1,413) 118,121 113,881 4,240
--------- ------- --------- --------- -------
Cash Flows From
Investing Activities
Plant construction and
other property
additions.............. (47,356) -- (47,356) (47,356) --
Proceeds from
dispositions of prop.,
plant and equip.--net.. (1,523) -- (1,523) (1,523) --
Cost of other
investments--net....... (1,326) -- (1,326) -- (1,326)
Intrasystem long-term
financing--net......... -- -- -- -- --
Intrasystem money pool
investments--net....... 13,265 -- 13,265 14,815 (1,550)
Property transfers to
(from) affiliates...... -- -- -- -- --
--------- ------- --------- --------- -------
Net cash provided by
(used in) continuing
operations............ (36,940) -- (36,940) (34,064) (2,876)
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- --
--------- ------- --------- --------- -------
Net cash provided by
(used in) investing
activities............ (36,940) -- (36,940) (34,064) (2,876)
--------- ------- --------- --------- -------
Cash Flows From
Financing Activities
Issuance of common
stock.................. -- -- -- -- --
Issuance of notes....... -- -- -- -- --
Repayments of long-term
debt................... -- -- -- -- --
Commercial paper--net... -- -- -- -- --
Dividends paid.......... -- -- -- -- --
Intrasystem long-term
financing--net......... (2,077) -- (2,077) (2,077) --
Intrasystem money pool
borrowings
(repayments)--net...... 46,765 -- 46,765 46,765 --
Dividends paid--
subsidiary companies--
consolidated........... (128,313) 1,413 (129,726) (128,313) (1,413)
Purchase of treasury
stock.................. -- -- -- -- --
Sale of treasury stock.. -- -- -- -- --
--------- ------- --------- --------- -------
Net cash provided by
(used in) continuing
operations............ (83,625) 1,413 (85,038) (83,625) (1,413)
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- --
--------- ------- --------- --------- -------
Net cash provided by
(used in) financing
activities............ (83,625) 1,413 (85,038) (83,625) (1,413)
--------- ------- --------- --------- -------
Net increase (decrease)
in cash and TCIs...... (3,857) -- (3,857) (3,808) (49)
Cash and TCIs at January
1, 1999................ 3,952 -- 3,952 3,902 50
--------- ------- --------- --------- -------
Cash and TCIs at
December 31, 1999...... $ 95 $ -- $ 95 $ 94 $ 1
========= ======= ========= ========= =======
Continuing operations... $ 95 $ -- $ 95 $ 94 $ 1
Discontinued
operations............. -- -- -- -- --
--------- ------- --------- --------- -------
Total cash and TCIs at
December 31........... $ 95 $ -- $ 95 $ 94 $ 1
========= ======= ========= ========= =======
Supplemental Cash Flow
Information
Cash paid for
Interest (net of
amounts capitalized).. $ 24,240 $ -- $ 24,240 $ 24,240 $ --
Income taxes (net of
refunds).............. $ 52,288 $ -- $ 52,288 $ 50,965 $ 1,323
</TABLE>
- --------
( ) denotes negative amount.
D-6-24
<PAGE>
EXHIBIT D-6
CNG PRODUCING COMPANY
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
CNGP Eliminations
and and Combined CNG
Subsidiary Adjustments Total CNGP Pipeline
----------- ------------ ----------- ----------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
ASSETS
Property, Plant and
Equipment
Gas utility and other
plant.................. $ -- $ -- $ -- $ -- $ --
Accumulated depreciation
and amortization....... -- -- -- -- --
----------- ------- ----------- ----------- -------
Net gas utility and
other plant........ -- -- -- -- --
----------- ------- ----------- ----------- -------
Exploration and
production properties.. 4,164,187 -- 4,164,187 4,159,660 4,527
Accumulated depreciation
and amortization....... (2,669,827) -- (2,669,827) (2,665,653) (4,174)
----------- ------- ----------- ----------- -------
Net exploration and
production
properties......... 1,494,360 -- 1,494,360 1,494,007 353
----------- ------- ----------- ----------- -------
Net property, plant
and equipment...... 1,494,360 -- 1,494,360 1,494,007 353
----------- ------- ----------- ----------- -------
Investments
Stock of subsidiary
company, at equity--
consolidated........... -- (1,441) 1,441 1,441 --
Notes of subsidiary
company--consolidated.. -- -- -- -- --
----------- ------- ----------- ----------- -------
Total investments... -- (1,441) 1,441 1,441 --
----------- ------- ----------- ----------- -------
Current Assets
Cash and temporary cash
investments............ 15,971 -- 15,971 15,935 36
Accounts receivable
Customers............. 4,587 -- 4,587 4,587 --
Unbilled revenues and
other................ 95,003 -- 95,003 94,967 36
Allowance for doubtful
accounts............. (1,000) -- (1,000) (1,000) --
Receivables from
affiliated companies--
consolidated........... 16,127 (138) 16,265 15,066 1,199
Inventories, at cost
Gas stored--current
portion.............. -- -- -- -- --
Materials and supplies
(average cost
method).............. 2,933 -- 2,933 2,933 --
Unrecovered gas costs... -- -- -- -- --
Deferred income taxes--
current................ 82 -- 82 82 --
Prepayments and other
current assets......... 34,876 -- 34,876 34,822 54
----------- ------- ----------- ----------- -------
Total current
assets............. 168,579 (138) 168,717 167,392 1,325
----------- ------- ----------- ----------- -------
Regulatory and Other
Assets
Other investments....... -- -- -- -- --
Deferred charges and
other assets........... (465) -- (465) (465) --
----------- ------- ----------- ----------- -------
Total regulatory and
other assets....... (465) -- (465) (465) --
----------- ------- ----------- ----------- -------
Total assets........ $ 1,662,474 $(1,579) $ 1,664,053 $ 1,662,375 $ 1,678
=========== ======= =========== =========== =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-25
<PAGE>
EXHIBIT D-6
CNG PRODUCING COMPANY
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
CNGP Eliminations
and and Combined CNG
Subsidiary Adjustments Total CNGP Pipeline
---------- ------------ ---------- ---------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
STOCKHOLDER'S EQUITY AND
LIABILITIES
Capitalization
Common stockholder's
equity
Common stock.......... $ 439,000 $(1,200) $ 440,200 $ 439,000 $1,200
Capital in excess of
par value............ -- -- -- -- --
Retained earnings, per
accompanying
statement............ 240,256 (241) 240,497 240,256 241
Treasury stock, at
cost................. -- -- -- -- --
---------- ------- ---------- ---------- ------
Total common
stockholder's
equity............. 679,256 (1,441) 680,697 679,256 1,441
---------- ------- ---------- ---------- ------
Long-term debt
Debentures and Notes.. -- -- -- -- --
Notes payable to
Parent Company....... 519,675 -- 519,675 519,675 --
---------- ------- ---------- ---------- ------
Total long-term
debt............... 519,675 -- 519,675 519,675 --
---------- ------- ---------- ---------- ------
Total
capitalization..... 1,198,931 (1,441) 1,200,372 1,198,931 1,441
---------- ------- ---------- ---------- ------
Current Liabilities
Commercial paper........ -- -- -- -- --
Accounts payable........ 136,347 -- 136,347 136,327 20
Payables to affiliated
companies--
consolidated........... 14,231 (138) 14,369 14,284 85
Estimated rate
contingencies and
refunds................ -- -- -- -- --
Amounts payable to
customers.............. -- -- -- -- --
Taxes accrued........... 2,999 -- 2,999 2,991 8
Deferred income taxes--
current................ -- -- -- -- --
Dividends declared...... -- -- -- -- --
Other current
liabilities............ 5,671 -- 5,671 5,671 --
---------- ------- ---------- ---------- ------
Total current
liabilities........ 159,248 (138) 159,386 159,273 113
---------- ------- ---------- ---------- ------
Deferred Credits
Deferred income taxes... 250,506 -- 250,506 250,382 124
Accumulated deferred
investment tax
credits................ -- -- -- -- --
Deferred credits and
other liabilities...... 53,789 -- 53,789 53,789 --
---------- ------- ---------- ---------- ------
Total deferred
credits............ 304,295 -- 304,295 304,171 124
---------- ------- ---------- ---------- ------
Commitments and
Contingencies
---------- ------- ---------- ---------- ------
Total stockholder's
equity and
liabilities........ $1,662,474 $(1,579) $1,664,053 $1,662,375 $1,678
========== ======= ========== ========== ======
</TABLE>
- --------
( )denotes negative amount.
D-6-26
<PAGE>
EXHIBIT D-6
CNG PRODUCING COMPANY
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNGP Eliminations
and and Combined CNG
Subsidiary Adjustments Total CNGP Pipeline
---------- ------------ -------- -------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Operating Revenues
Regulated gas sales...... $ -- $ -- $ -- $ -- $--
Nonregulated gas sales... 423,800 -- 423,800 423,800 --
-------- ----- -------- -------- ----
Total gas sales........ 423,800 -- 423,800 423,800 --
Gas transportation and
storage................. 462 (768) 1,230 462 768
Other.................... 395,807 -- 395,807 395,764 43
-------- ----- -------- -------- ----
Total operating
revenues.............. 820,069 (768) 820,837 820,026 811
-------- ----- -------- -------- ----
Operating Expenses
Purchased gas............ 51,796 -- 51,796 51,796 --
Liquids, capacity and
other products
purchased............... 206,569 (768) 207,337 207,337 --
Operation expense........ 200,404 -- 200,404 200,187 217
Maintenance.............. 16,964 -- 16,964 16,964 --
Depreciation and
amortization............ 230,482 -- 230,482 230,394 88
Taxes, other than income
taxes................... 8,047 -- 8,047 8,041 6
-------- ----- -------- -------- ----
Subtotal............... 714,262 (768) 715,030 714,719 311
-------- ----- -------- -------- ----
Operating income before
income taxes.......... 105,807 -- 105,807 105,307 500
Income taxes............. 8,151 -- 8,151 7,952 199
-------- ----- -------- -------- ----
Operating income....... 97,656 -- 97,656 97,355 301
-------- ----- -------- -------- ----
Other Income (Deductions)
Interest revenues........ 959 -- 959 958 1
Merger expense........... (32,990) -- (32,990) (32,990) --
Other--net............... 54 -- 54 54 --
Equity in earnings of
subsidiary company--
consolidated............ -- (365) 365 365 --
Interest revenues from
affiliated companies--
consolidated............ 68 -- 68 5 63
-------- ----- -------- -------- ----
Total other income
(deductions).......... (31,909) (365) (31,544) (31,608) 64
-------- ----- -------- -------- ----
Income before interest
charges............... 65,747 (365) 66,112 65,747 365
-------- ----- -------- -------- ----
Interest Charges
Interest on long-term
debt.................... 24,358 -- 24,358 24,358 --
Other interest expense... 11,566 -- 11,566 11,566 --
Allowance for funds used
during construction..... (8,769) -- (8,769) (8,769) --
-------- ----- -------- -------- ----
Total interest
charges............... 27,155 -- 27,155 27,155 --
-------- ----- -------- -------- ----
Net Income............... $ 38,592 $(365) $ 38,957 $ 38,592 $365
======== ===== ======== ======== ====
</TABLE>
- --------
( ) denotes negative amount.
D-6-27
<PAGE>
EXHIBIT D-6
CNG PRODUCING COMPANY
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNGP Eliminations
and and Combined CNG
Subsidiary Adjustments Total CNGP Pipeline
---------- ------------ -------- -------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at December 31,
1998...................... $201,664 $(296) $201,960 $201,664 $296
Net income for the year
1999 per accompanying in-
come statement............ 38,592 (365) 38,957 38,592 365
-------- ----- -------- -------- ----
Total..................... 240,256 (661) 240,917 240,256 661
Dividends declared on com-
mon stock--cash........... -- 420 (420) -- (420)
-------- ----- -------- -------- ----
Balance at December 31,
1999...................... $240,256 $(241) $240,497 $240,256 $241
======== ===== ======== ======== ====
</TABLE>
- --------
( ) denotes negative amount.
D-6-28
<PAGE>
EXHIBIT D-6
CNG PRODUCING COMPANY
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Eliminations
CNGP and and Combined CNG
Subsidiary Adjustments Total CNGP Pipeline
---------- ------------ -------- -------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating
Activities
Net income............... $ 38,592 $(365) $ 38,957 $ 38,592 $365
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities
Depreciation and
amortization........... 230,482 -- 230,482 230,394 88
Pension cost (credit)--
net.................... 1,700 -- 1,700 1,700 --
Stock award
amortization........... 1,134 -- 1,134 1,134 --
Deferred income taxes--
net.................... (6,714) -- (6,714) (6,683) (31)
Investment tax credit... -- -- -- -- --
Changes in current
assets and current
liabilities
Accounts receivable--
net.................. (10,814) -- (10,814) (10,816) 2
Receivables from
affiliated
companies--
consolidated......... 215 (406) 621 582 39
Inventories........... (1,341) -- (1,341) (1,341) --
Unrecovered gas
costs................ -- -- -- -- --
Accounts payable...... (288) -- (288) (239) (49)
Payables to affiliated
companies--
consolidated......... (3,631) 406 (4,037) (3,853) (184)
Estimated rate
contingencies and
refunds.............. -- -- -- -- --
Amounts payable to
customers............ -- -- -- -- --
Taxes accrued......... (2,511) -- (2,511) (2,466) (45)
Other--net............ (49,448) -- (49,448) (49,498) 50
Changes in other assets
and other
liabilities............ 12,448 -- 12,448 12,462 (14)
Excess of equity in
earnings of subsidiary
companies over their
cash dividends paid--
consolidated........... -- (55) 55 55 --
Other--net.............. -- -- -- -- --
-------- ----- -------- -------- ----
Net cash provided by
(used in) continuing
operations........... 209,824 (420) 210,244 210,023 221
Net cash provided by
(used in) discontinued
operations.............. -- -- -- -- --
-------- ----- -------- -------- ----
Net cash provided by
(used in) operating
activities............. 209,824 (420) 210,244 210,023 221
-------- ----- -------- -------- ----
Cash Flows From Investing
Activities
Plant construction and
other property additions
Acquisition of
exploration and
production assets...... (165,844) -- (165,844) (165,844) --
Other................... (282,552) -- (282,552) (282,552) --
Proceeds from
dispositions of prop.,
plant and equip.--net... 14,144 -- 14,144 14,144 --
Cost of other
investments--net........ -- -- -- -- --
Intrasystem long-term
financing--net.......... -- -- -- -- --
Intrasystem money pool
investments--net........ (11,943) -- (11,943) (12,139) 196
Property transfers to
(from) affiliates....... -- -- -- -- --
-------- ----- -------- -------- ----
Net cash provided by
(used in) continuing
operations........... (446,195) -- (446,195) (446,391) 196
Net cash provided by
(used in) discontinued
operations.............. -- -- -- -- --
-------- ----- -------- -------- ----
Net cash provided by
(used in) investing
activities........... (446,195) -- (446,195) (446,391) 196
-------- ----- -------- -------- ----
Cash Flows From Financing
Activities
Issuance of common
stock................... -- -- -- -- --
Issuance of notes........ -- -- -- -- --
Repayments of long-term
debt.................... -- -- -- -- --
Commercial paper--net.... -- -- -- -- --
Dividends paid........... -- -- -- -- --
Intrasystem long-term
financing--net.......... 268,550 -- 268,550 268,550 --
Intrasystem money pool
borrowings
(repayments)--net....... (23,080) -- (23,080) (23,080) --
Dividends paid--
subsidiary companies--
consolidated............ -- 420 (420) -- (420)
Purchase of treasury
stock................... -- -- -- -- --
Sale of treasury stock... -- -- -- -- --
-------- ----- -------- -------- ----
Net cash provided by
(used in) continuing
operations........... 245,470 420 245,050 245,470 (420)
Net cash provided by
(used in) discontinued
operations.............. -- -- -- -- --
-------- ----- -------- -------- ----
Net cash provided by
(used in) financing
activities........... 245,470 420 245,050 245,470 (420)
-------- ----- -------- -------- ----
Net increase
(decrease) in cash
and TCIs............. 9,099 -- 9,099 9,102 (3)
Cash and TCIs at January
1, 1999................. 6,872 -- 6,872 6,833 39
-------- ----- -------- -------- ----
Cash and TCIs at December
31, 1999................ $ 15,971 $ -- $ 15,971 $ 15,935 $ 36
======== ===== ======== ======== ====
Continuing operations.... $ 15,971 $ -- $ 15,971 $ 15,935 $ 36
-------- ----- -------- -------- ----
Discontinued operations.. -- -- -- -- --
-------- ----- -------- -------- ----
Total cash and TCIs at
December 31.......... $ 15,971 $ -- $ 15,971 $ 15,935 $ 36
======== ===== ======== ======== ====
Supplemental Cash Flow
Information
Cash paid for
Interest (net of
amounts capitalized)... $ 27,376 $ -- $ 27,376 $ 27,376 $--
Income taxes (net of
refunds)............... $ 18,529 $ -- $ 18,529 $ 18,253 $276
</TABLE>
- --------
( ) denotes negative amount.
D-6-29
<PAGE>
EXHIBIT D-6
CNG POWER COMPANY
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
CNG Power Eliminations
and and Combined CNG CNG Bear Granite
Subsidiaries Adjustments Total Power CNGMCS Mountain Road
------------ ------------ -------- ------- ------ -------- -------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Property, Plant and
Equipment
Gas utility and other
plant.................. $ 5,845 $ -- $ 5,845 $ 5,845 $ -- $-- $--
Accumulated depreciation
and amortization....... (2,804) -- (2,804) (2,804) -- -- --
------- ------- ------- ------- ------ ---- ----
Net gas utility and
other plant........ 3,041 -- 3,041 3,041 -- -- --
------- ------- ------- ------- ------ ---- ----
Exploration and
production properties.. -- -- -- -- -- -- --
Accumulated depreciation
and amortization....... -- -- -- -- -- -- --
------- ------- ------- ------- ------ ---- ----
Net exploration and
production
properties......... -- -- -- -- -- -- --
------- ------- ------- ------- ------ ---- ----
Net property, plant
and equipment...... 3,041 -- 3,041 3,041 -- -- --
------- ------- ------- ------- ------ ---- ----
Investments
Stocks of subsidiary
companies, at equity--
consolidated........... -- (1,471) 1,471 1,471 -- -- --
Notes of subsidiary
companies--
consolidated........... -- -- -- -- -- -- --
------- ------- ------- ------- ------ ---- ----
Total investments... -- (1,471) 1,471 1,471 -- -- --
------- ------- ------- ------- ------ ---- ----
Current Assets
Cash and temporary cash
investments............ 1 -- 1 1 -- -- --
Accounts receivable
Customers............. 1,862 -- 1,862 1,862 -- -- --
Unbilled revenues and
other................ -- -- -- -- -- -- --
Allowance for doubtful
accounts............. -- -- -- -- -- -- --
Receivables from
affiliated companies--
consolidated........... 5,819 (35) 5,854 4,872 947 35 --
Inventories, at cost
Gas stored--current
portion.............. -- -- -- -- -- -- --
Materials and supplies
(average cost
method).............. 36 -- 36 36 -- -- --
Unrecovered gas costs... -- -- -- -- -- -- --
Deferred income taxes--
current................ -- -- -- -- -- -- --
Prepayments and other
current assets......... 2 -- 2 2 -- -- --
------- ------- ------- ------- ------ ---- ----
Total current
assets............. 7,720 (35) 7,755 6,773 947 35 --
------- ------- ------- ------- ------ ---- ----
Regulatory and Other
Assets
Other investments....... 613 -- 613 -- 612 -- 1
Deferred charges and
other assets........... -- -- -- -- -- -- --
------- ------- ------- ------- ------ ---- ----
Total regulatory and
other assets....... 613 -- 613 -- 612 -- 1
------- ------- ------- ------- ------ ---- ----
Total assets........ $11,374 $(1,506) $12,880 $11,285 $1,559 $ 35 $ 1
======= ======= ======= ======= ====== ==== ====
</TABLE>
- -------
( ) denotes negative amount.
D-6-30
<PAGE>
EXHIBIT D-6
CNG POWER COMPANY
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
CNG Power Eliminations
and and Combined CNG CNG Bear Granite
Subsidiaries Adjustments Total Power CNGMCS Mountain Road
------------ ------------ -------- ------- ------ -------- -------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
STOCKHOLDER'S EQUITY AND
LIABILITIES
Capitalization
Common stockholder's
equity
Common stock.......... $ 8,360 $ (111) $ 8,471 $ 8,360 $ 100 $10 $ 1
Capital in excess of
par value............ -- -- -- -- -- -- --
Retained earnings, per
accompanying
statement............ 825 (1,360) 2,185 825 1,348 12 --
Treasury stock, at
cost................. -- -- -- -- -- -- --
------- ------- ------- ------- ------ --- ---
Total common
stockholder's
equity............. 9,185 (1,471) 10,656 9,185 1,448 22 1
------- ------- ------- ------- ------ --- ---
Long-term debt
Debentures and Notes.. -- -- -- -- -- -- --
Notes payable to
Parent Company....... -- -- -- -- -- -- --
------- ------- ------- ------- ------ --- ---
Total long-term
debt............... -- -- -- -- -- -- --
------- ------- ------- ------- ------ --- ---
Total
capitalization..... 9,185 (1,471) 10,656 9,185 1,448 22 1
------- ------- ------- ------- ------ --- ---
Current Liabilities
Commercial paper........ -- -- -- -- -- -- --
Accounts payable........ 381 -- 381 381 -- -- --
Payables to affiliated
companies--
consolidated........... 109 (35) 144 143 1 -- --
Estimated rate
contingencies and
refunds................ -- -- -- -- -- -- --
Amounts payable to
customers.............. -- -- -- -- -- -- --
Taxes accrued........... 935 -- 935 811 111 13 --
Deferred income taxes--
current................ -- -- -- -- -- -- --
Dividends declared...... -- -- -- -- -- -- --
Other current
liabilities............ -- -- -- -- -- -- --
------- ------- ------- ------- ------ --- ---
Total current
liabilities........ 1,425 (35) 1,460 1,335 112 13 --
------- ------- ------- ------- ------ --- ---
Deferred Credits
Deferred income taxes... 764 -- 764 765 (1) -- --
Accumulated deferred
investment tax
credits................ -- -- -- -- -- -- --
Deferred credits and
other liabilities...... -- -- -- -- -- -- --
------- ------- ------- ------- ------ --- ---
Total deferred
credits............ 764 -- 764 765 (1) -- --
------- ------- ------- ------- ------ --- ---
Commitments and
Contingencies
------- ------- ------- ------- ------ --- ---
Total stockholder's
equity and
liabilities........ $11,374 $(1,506) $12,880 $11,285 $1,559 $35 $ 1
======= ======= ======= ======= ====== === ===
</TABLE>
- --------
( ) denotes negative amount.
D-6-31
<PAGE>
EXHIBIT D-6
CNG POWER COMPANY
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG Power Eliminations
and and Combined CNG CNG Bear Granite
Subsidiaries Adjustments Total Power CNGMCS Mountain Road
------------ ------------ -------- ------- ------ -------- -------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues
Regulated gas sales..... $ -- $ -- $ -- $ -- $ -- $-- $--
Nonregulated gas sales.. -- -- -- -- -- -- --
------- ----- ------- ------- ----- ---- ----
Total gas sales....... -- -- -- -- -- -- --
Gas transportation and
storage................ -- -- -- -- -- -- --
Other................... 13,821 -- 13,821 13,821 -- -- --
------- ----- ------- ------- ----- ---- ----
Total operating reve-
nues................. 13,821 -- 13,821 13,821 -- -- --
------- ----- ------- ------- ----- ---- ----
Operating Expenses
Purchased gas........... -- -- -- -- -- -- --
Liquids, capacity and
other products
purchased.............. 8,220 -- 8,220 8,220 -- -- --
Operation expense....... 3,306 -- 3,306 3,193 113 -- --
Maintenance............. -- -- -- -- -- -- --
Depreciation and amorti-
zation................. 210 -- 210 210 -- -- --
Taxes, other than income
taxes.................. 45 -- 45 44 1 -- --
------- ----- ------- ------- ----- ---- ----
Subtotal.............. 11,781 -- 11,781 11,667 114 -- --
------- ----- ------- ------- ----- ---- ----
Operating income
before income taxes.. 2,040 -- 2,040 2,154 (114) -- --
Income taxes............ 1,649 -- 1,649 1,388 261 -- --
------- ----- ------- ------- ----- ---- ----
Operating income...... 391 -- 391 766 (375) -- --
------- ----- ------- ------- ----- ---- ----
Other Income (Deduc-
tions)
Interest revenues....... 32 -- 32 31 1 -- --
Merger expense.......... -- -- -- -- -- -- --
Other--net.............. 781 -- 781 -- 781 -- --
Equity in earnings of
subsidiary companies--
consolidated........... -- (441) 441 441 -- -- --
Interest revenues from
affiliated companies--
consolidated........... 1,695 -- 1,695 1,660 35 -- --
------- ----- ------- ------- ----- ---- ----
Total other income
(deductions)......... 2,508 (441) 2,949 2,132 817 -- --
------- ----- ------- ------- ----- ---- ----
Income before interest
charges.............. 2,899 (441) 3,340 2,898 442 -- --
------- ----- ------- ------- ----- ---- ----
Interest Charges
Interest on long-term
debt................... 88 -- 88 88 -- -- --
Other interest expense.. 32 -- 32 31 1 -- --
Allowance for funds used
during construction.... -- -- -- -- -- -- --
------- ----- ------- ------- ----- ---- ----
Total interest
charges.............. 120 -- 120 119 1 -- --
------- ----- ------- ------- ----- ---- ----
Net Income.............. $ 2,779 $(441) $ 3,220 $ 2,779 $ 441 $-- $--
======= ===== ======= ======= ===== ==== ====
</TABLE>
- --------
( ) denotes negative amount.
D-6-32
<PAGE>
EXHIBIT D-6
CNG POWER COMPANY
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG Power Eliminations
and and Combined CNG CNG Bear Granite
Subsidiaries Adjustments Total Power CNGMCS Mountain Road
------------ ------------ -------- -------- ------ -------- -------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
Retained Earnings
Balance at December 31,
1998................... $ 13,946 $ (919) $ 14,865 $ 13,946 $ 907 $12 $--
Net income for the year
1999 per accompanying
income statement....... 2,779 (441) 3,220 2,779 441 -- --
-------- ------- -------- -------- ------ --- ----
Total.................. 16,725 (1,360) 18,085 16,725 1,348 12 --
Dividends declared on
common stock -- cash... (15,900) -- (15,900) (15,900) -- -- --
-------- ------- -------- -------- ------ --- ----
Balance at December 31,
1999................... $ 825 $(1,360) $ 2,185 $ 825 $1,348 $12 $--
======== ======= ======== ======== ====== === ====
</TABLE>
- --------
( ) denotes negative amount.
D-6-33
<PAGE>
EXHIBIT D-6
CNG POWER COMPANY
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG Power Eliminations
and and Combined CNG CNG Bear Granite CNG
Subsidiaries Adjustments Total Power CNGMCS Mountain Road Kauai
------------ ------------ -------- ------ ------ -------- ------- -----
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash Flows From
Operating Activities
Net income.............. $2,779 $(441) $3,220 $2,779 $441 $-- $-- $--
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities
Depreciation and
amortization.......... 210 -- 210 210 -- -- -- --
Pension cost (credit)--
net................... -- -- -- -- -- -- -- --
Stock award
amortization.......... -- -- -- -- -- -- -- --
Deferred income taxes--
net................... 241 -- 241 243 (2) -- -- --
Investment tax credit.. -- -- -- -- -- -- -- --
Changes in current
assets and current
liabilities
Accounts receivable--
net................... (781) -- (781) (781) -- -- -- --
Receivables from
affiliated companies--
consolidated.......... (32) (190) 158 64 (2) 96 -- --
Inventories............ 1,520 -- 1,520 1,520 -- -- -- --
Unrecovered gas costs.. -- -- -- -- -- -- -- --
Accounts payable....... (156) -- (156) (161) 5 -- -- --
Payables to affiliated
companies--
consolidated.......... (266) 190 (456) (361) 1 (96) -- --
Estimated rate
contingencies and
refunds............... -- -- -- -- -- -- -- --
Amounts payable to
customers............. -- -- -- -- -- -- -- --
Taxes accrued.......... (451) -- (451) (283) (167) (1) -- --
Other--net............. 17 -- 17 16 -- 1 -- --
Changes in other assets
and other
liabilities........... 446 -- 446 29 417 -- -- --
Excess of equity in
earnings of subsidiary
companies over their
cash dividends paid--
consolidated.......... -- 441 (441) (441) -- -- -- --
Other--net............. -- -- -- -- -- -- -- --
------ ----- ------ ------ ---- ---- ---- ----
Net cash provided by
(used in) continuing
operations............ 3,527 -- 3,527 2,834 693 -- -- --
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- -- -- -- --
------ ----- ------ ------ ---- ---- ---- ----
Net cash provided by
(used in) operating
activities............ 3,527 -- 3,527 2,834 693 -- -- --
------ ----- ------ ------ ---- ---- ---- ----
</TABLE>
D-6-34
<PAGE>
EXHIBIT D-6
CNG POWER COMPANY
CONSOLIDATING STATEMENT OF CASH FLOWS--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG Power Eliminations
and and Combined CNG CNG Bear Granite CNG
Subsidiaries Adjustments Total Power CNGMCS Mountain Road Kauai
------------ ------------ -------- ------- ------ -------- ------- -----
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash Flows From
Investing Activities
Plant construction and
other property
additions.............. -- -- -- -- -- -- -- --
Proceeds from
dispositions of prop.,
plant and equip.--net.. -- -- -- -- -- -- -- --
Cost of other
investments--net....... -- -- -- -- -- -- -- --
Intrasystem long-term
financing--net......... -- 10 (10) (10) -- -- -- --
Intrasystem money pool
investments--net....... 42,366 -- 42,366 43,073 (707) -- -- --
Property transfers to
(from) affiliates...... 43 -- 43 43 -- -- -- --
Sale of subsidiary and
related cash transfer.. -- -- -- 10 -- -- -- (10)
------- ---- ------- ------- ---- ---- ---- ----
Net cash provided by
(used in) continuing
operations............ 42,409 10 42,399 43,116 (707) -- -- (10)
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- -- -- -- --
------- ---- ------- ------- ---- ---- ---- ----
Net cash provided by
(used in) investing
activities............ 42,409 10 42,399 43,116 (707) -- -- (10)
------- ---- ------- ------- ---- ---- ---- ----
Cash Flows From
Financing Activities
Issuance of common
stock.................. -- -- -- -- -- -- -- --
Issuance of notes....... -- -- -- -- -- -- -- --
Repayments of long-term
debt................... -- -- -- -- -- -- -- --
Commercial paper--net... -- -- -- -- -- -- -- --
Dividends paid.......... -- -- -- -- -- -- -- --
Intrasystem long-term
financing--net......... (26,403) (10) (26,393) (26,403) -- -- -- 10
Intrasystem money pool
borrowings
(repayments)--net...... (3,755) -- (3,755) (3,755) -- -- -- --
Dividends paid--
subsidiary companies--
consolidated........... (15,900) -- (15,900) (15,900) -- -- -- --
Purchase of treasury
stock.................. -- -- -- -- -- -- -- --
Sale of treasury stock.. -- -- -- -- -- -- -- --
------- ---- ------- ------- ---- ---- ---- ----
Net cash provided by
(used in) continuing
operations............ (46,058) (10) (46,048) (46,058) -- -- -- 10
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- -- -- -- --
------- ---- ------- ------- ---- ---- ---- ----
Net cash provided by
(used in) financing
activities............ (46,058) (10) (46,048) (46,058) -- -- -- 10
------- ---- ------- ------- ---- ---- ---- ----
Net increase (decrease)
in cash and TCIs...... (122) -- (122) (108) (14) -- -- --
Cash and TCIs at January
1, 1999................ 123 -- 123 109 14 -- -- --
------- ---- ------- ------- ---- ---- ---- ----
Cash and TCIs at
December 31, 1999...... $ 1 $-- $ 1 $ 1 $-- $-- $-- $--
======= ==== ======= ======= ==== ==== ==== ====
Continuing operations... $ 1 $-- $ 1 $ 1 $-- $-- $-- $--
Discontinued
operations............. -- -- -- -- -- -- -- --
------- ---- ------- ------- ---- ---- ---- ----
Total cash and TCIs at
December 31........... $ 1 $-- $ 1 $ 1 $-- $-- $-- $--
======= ==== ======= ======= ==== ==== ==== ====
Supplemental Cash Flow
Information
Cash paid for
Interest (net of
amounts capitalized).. $ 273 $-- $ 273 $ 273 $-- $-- $-- $--
Income taxes (net of
refunds).............. $ 1,745 $-- $ 1,745 $ 1,304 $441 $-- $-- $--
</TABLE>
- --------
( ) denotes negative amount.
D-6-35
<PAGE>
EXHIBIT D-6
CNG INTERNATIONAL CORPORATION
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
Eliminations CNG Cayman CNG Cayman
CNGI and and Combined One Three CNG
Subsidiaries Adjustments Total CNGI (Page D-6-42) (Page D-6-48) Kauai
------------ ------------ -------- -------- ------------- ------------- ------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Property, Plant and
Equipment
Gas utility and other
plant.................. $ 818 $ -- $ 818 $ 818 $ -- $ -- $ --
Accumulated depreciation
and amortization....... (479) -- (479) (479) -- -- --
-------- --------- -------- -------- ------- -------- ------
Net gas utility and
other plant........... 339 -- 339 339 -- -- --
-------- --------- -------- -------- ------- -------- ------
Exploration and
production properties.. -- -- -- -- -- -- --
Accumulated depreciation
and amortization....... -- -- -- -- -- -- --
-------- --------- -------- -------- ------- -------- ------
Net exploration and
production
properties............ -- -- -- -- -- -- --
-------- --------- -------- -------- ------- -------- ------
Net property, plant and
equipment............. 339 -- 339 339 -- -- --
-------- --------- -------- -------- ------- -------- ------
Investments
Stocks of subsidiary
companies, at equity--
consolidated........... -- (170,547) 170,547 170,547 -- -- --
Notes of subsidiary
companies--
consolidated........... -- -- -- -- -- -- --
-------- --------- -------- -------- ------- -------- ------
Total investments...... -- (170,547) 170,547 170,547 -- -- --
-------- --------- -------- -------- ------- -------- ------
Current Assets
Cash and temporary cash
investments............ 1,246 -- 1,246 423 -- 803 20
Accounts receivable
Customers.............. -- -- -- -- -- -- --
Unbilled revenues and
other................. 665 -- 665 146 -- 519 --
Allowance for doubtful
accounts.............. -- -- -- -- -- -- --
Receivables from
affiliated companies--
consolidated........... (28) (26) (2) (2) -- -- --
Inventories, at cost
Gas stored--current
portion............... -- -- -- -- -- -- --
Materials and supplies
(average cost
method)............... -- -- -- -- -- -- --
Unrecovered gas costs... -- -- -- -- -- -- --
Deferred income taxes--
current................ -- -- -- -- -- -- --
Prepayments and other
current assets......... 7 -- 7 7 -- -- --
-------- --------- -------- -------- ------- -------- ------
Total current assets... 1,890 (26) 1,916 574 -- 1,322 20
-------- --------- -------- -------- ------- -------- ------
Regulatory and Other
Assets
Other investments....... 259,467 -- 259,467 94,224 34,182 129,274 1,787
Deferred charges and
other assets........... -- -- -- -- -- -- --
-------- --------- -------- -------- ------- -------- ------
Total regulatory and
other assets.......... 259,467 -- 259,467 94,224 34,182 129,274 1,787
-------- --------- -------- -------- ------- -------- ------
Total assets........... $261,696 $(170,573) $432,269 $265,684 $34,182 $130,596 $1,807
======== ========= ======== ======== ======= ======== ======
</TABLE>
- --------
( ) denotes negative amount.
D-6-36
<PAGE>
EXHIBIT D-6
CNG INTERNATIONAL CORPORATION
CONSOLIDATING BALANCE SHEET--(Continued)
At December 31, 1999
<TABLE>
<CAPTION>
CNG CNG
Eliminations Cayman Cayman
CNGI and and Combined One Three CNG
Subsidiaries Adjustments Total CNGI (Page D-6-43) (Page D-6-49) Kauai
------------ ------------ -------- -------- ------------- ------------- ------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
STOCKHOLDER'S EQUITY
AND LIABILITIES
Capitalization
Common stockholder's
equity
Common stock........... $238,550 $ (10) $238,560 $238,550 $ -- $ -- $ 10
Capital in excess of
par value............. -- (155,703) 155,703 -- 35,950 117,966 1,787
Retained earnings, per
accompanying
statement............. (12,758) (13,468) 710 (10,198) (1,644) 12,552 --
Treasury stock, at
cost.................. -- -- -- -- -- -- --
-------- --------- -------- -------- ------- -------- ------
Total common
stockholder's equity.. 225,792 (169,181) 394,973 228,352 34,306 130,518 1,797
-------- --------- -------- -------- ------- -------- ------
Long-term debt
Debentures and Notes... -- -- -- -- -- -- --
Notes payable to Parent
Company............... 15,000 -- 15,000 15,000 -- -- --
-------- --------- -------- -------- ------- -------- ------
Total long-term debt... 15,000 -- 15,000 15,000 -- -- --
-------- --------- -------- -------- ------- -------- ------
Total capitalization... 240,792 (169,181) 409,973 243,352 34,306 130,518 1,797
-------- --------- -------- -------- ------- -------- ------
Current Liabilities
Commercial paper........ -- -- -- -- -- -- --
Accounts payable........ 242 -- 242 175 -- 57 10
Payables to affiliated
companies--
consolidated........... 10,228 (26) 10,254 10,228 -- 26 --
Estimated rate
contingencies and
refunds................ -- -- -- -- -- -- --
Amounts payable to
customers.............. -- -- -- -- -- -- --
Taxes accrued........... 574 -- 574 703 (124) (5) --
Deferred income taxes--
current................ -- -- -- -- -- -- --
Dividends declared...... -- -- -- -- -- -- --
Other current
liabilities............ 127 -- 127 127 -- -- --
-------- --------- -------- -------- ------- -------- ------
Total current
liabilities........... 11,171 (26) 11,197 11,233 (124) 78 10
-------- --------- -------- -------- ------- -------- ------
Deferred Credits
Deferred income taxes... 6,217 (1,366) 7,583 7,583 -- -- --
Accumulated deferred
investment tax
credits................ -- -- -- -- -- -- --
Deferred credits and
other liabilities...... 3,516 -- 3,516 3,516 -- -- --
-------- --------- -------- -------- ------- -------- ------
Total deferred
credits............... 9,733 (1,366) 11,099 11,099 -- -- --
-------- --------- -------- -------- ------- -------- ------
Commitments and
Contingencies
-------- --------- -------- -------- ------- -------- ------
Total stockholder's
equity and
liabilities........... $261,696 $(170,573) $432,269 $265,684 $34,182 $130,596 $1,807
======== ========= ======== ======== ======= ======== ======
</TABLE>
- --------
( ) denotes negative amount.
D-6-37
<PAGE>
EXHIBIT D-6
CNG INTERNATIONAL CORPORATION
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG CNG
CNGI Eliminations Cayman Cayman
and and Combined One Three CNG
Subsidiaries Adjustments Total CNGI (Page D-6-44) (Page D-6-50) Kauai
------------ ------------ -------- ------- ------------- ------------- -----
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues
Regulated gas sales..... $ -- $ -- $ -- $ -- $ -- $ -- $--
Nonregulated gas sales.. -- -- -- -- -- -- --
------- ------- ------- ------- ------ ------ ----
Total gas sales........ -- -- -- -- -- -- --
Gas transportation and
storage................ -- -- -- -- -- -- --
Other................... 1,452 (460) 1,912 751 -- 1,161 --
------- ------- ------- ------- ------ ------ ----
Total operating
revenues.............. 1,452 (460) 1,912 751 -- 1,161 --
------- ------- ------- ------- ------ ------ ----
Operating Expenses
Purchased gas........... -- -- -- -- -- -- --
Liquids, capacity and
other products
purchased.............. -- -- -- -- -- -- --
Operation expense....... 5,568 (460) 6,028 4,895 466 667 --
Maintenance............. 16 -- 16 16 -- -- --
Depreciation and
amortization........... 139 -- 139 139 -- -- --
Taxes, other than income
taxes.................. 260 -- 260 215 -- 45 --
------- ------- ------- ------- ------ ------ ----
Subtotal............... 5,983 (460) 6,443 5,265 466 712 --
------- ------- ------- ------- ------ ------ ----
Operating income before
income taxes.......... (4,531) -- (4,531) (4,514) (466) 449 --
Income taxes............ 2,694 -- 2,694 2,458 (104) 340 --
------- ------- ------- ------- ------ ------ ----
Operating income....... (7,225) -- (7,225) (6,972) (362) 109 --
------- ------- ------- ------- ------ ------ ----
Other Income
(Deductions)
Interest revenues....... 270 -- 270 22 111 137 --
Merger expense.......... (6,215) -- (6,215) (6,215) -- -- --
Other--net.............. 8,362 -- 8,362 328 1,061 6,973 --
Equity in earnings of
subsidiary companies--
consolidated........... -- (8,029) 8,029 8,029 -- -- --
Interest revenues from
affiliated companies--
consolidated........... 1 -- 1 1 -- -- --
------- ------- ------- ------- ------ ------ ----
Total other income
(deductions).......... 2,418 (8,029) 10,447 2,165 1,172 7,110 --
------- ------- ------- ------- ------ ------ ----
Income before interest
charges............... (4,807) (8,029) 3,222 (4,807) 810 7,219 --
------- ------- ------- ------- ------ ------ ----
Interest Charges
Interest on long-term
debt................... 931 -- 931 931 -- -- --
Other interest expense.. 507 -- 507 507 -- -- --
Allowance for funds used
during construction.... -- -- -- -- -- -- --
------- ------- ------- ------- ------ ------ ----
Total interest
charges............... 1,438 -- 1,438 1,438 -- -- --
------- ------- ------- ------- ------ ------ ----
Net Income.............. $(6,245) $(8,029) $ 1,784 $(6,245) $ 810 $7,219 $--
======= ======= ======= ======= ====== ====== ====
</TABLE>
- --------
( ) denotes negative amount.
D-6-38
<PAGE>
EXHIBIT D-6
CNG INTERNATIONAL CORPORATION
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Eliminations CNG Cayman CNG Cayman
CNGI and and Combined One Three CNG
Subsidiaries Adjustments Total CNGI (Page D-6-45) (Page D-6-51) Kauai
------------ ------------ -------- -------- ------------- ------------- -----
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
Retained Earnings
Balance at December 31,
1998................... $ (9,231) $ (6,805) $(2,426) $ (3,953) $(3,806) $ 5,333 $--
Net income for the year
1999 per accompanying
income statement....... (6,245) (8,029) 1,784 (6,245) 810 7,219 --
-------- -------- ------- -------- ------- ------- ----
Total.................. (15,476) (14,834) (642) (10,198) (2,996) 12,552 --
Dividends declared on
common stock--cash..... -- -- -- -- -- -- --
Foreign currency
translation
adjustment............. 2,718 1,366 1,352 -- 1,352 -- --
-------- -------- ------- -------- ------- ------- ----
Balance at December 31,
1999................... $(12,758) $(13,468) $ 710 $(10,198) $(1,644) $12,552 $--
======== ======== ======= ======== ======= ======= ====
</TABLE>
- --------
( ) denotes negative amount.
D-6-39
<PAGE>
EXHIBIT D-6
CNG INTERNATIONAL CORPORATION
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG CNG
Cayman Cayman
Eliminations One Three
CNGI and and Combined (Page (Page CNG
Subsidiaries Adjustments Total CNGI D-6-46) D-6-52) Kauai
------------ ------------ -------- -------- ------- ------- -----
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
Cash Flows From
Operating Activities
Net income.............. $ (6,245) $(8,029) $ 1,784 $ (6,245) $ 810 $ 7,219 $--
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities
Depreciation and
amortization.......... 139 -- 139 139 -- -- --
Pension cost (credit)--
net................... 230 -- 230 230 -- -- --
Stock award
amortization.......... -- -- -- -- -- -- --
Deferred income taxes--
net................... 7,833 -- 7,833 7,833 -- -- --
Investment tax credit.. -- -- -- -- -- -- --
Changes in current
assets and current
liabilities
Accounts receivable--
net................... (276) -- (276) 38 -- (314) --
Receivables from
affiliated companies--
consolidated.......... (13) (33) 20 20 -- -- --
Inventories............ -- -- -- -- -- -- --
Unrecovered gas costs.. -- -- -- -- -- -- --
Accounts payable....... (485) -- (485) (344) -- (151) 10
Payables to affiliated
companies--
consolidated.......... (341) 33 (374) (342) (33) 1 --
Estimated rate
contingencies and
refunds............... -- -- -- -- -- -- --
Amounts payable to
customers............. -- -- -- -- -- -- --
Taxes accrued.......... 304 -- 304 433 (124) (5) --
Other--net............. (314) -- (314) (314) -- -- --
Changes in other assets
and other
liabilities........... (6,730) -- (6,730) 2,002 (1,759) (6,973) --
Excess of equity in
earnings of subsidiary
companies over their
cash dividends paid--
consolidated.......... -- 8,029 (8,029) (8,029) -- -- --
Other--net............. -- -- -- -- -- -- --
Net cash provided by
(used in) continuing
operations............ (5,898) -- (5,898) (4,579) (1,106) (223) 10
Net cash provided by
(used in) discontinued
operations............ -- -- -- -- -- -- --
-------- ------- -------- -------- ------- ------- ----
Net cash provided by
(used in) operating
activities............ (5,898) -- (5,898) (4,579) (1,106) (223) 10
-------- ------- -------- -------- ------- ------- ----
Cash Flows From
Investing Activities
Plant construction and
other property
additions.............. (601) -- (601) (601) -- -- --
Proceeds from
dispositions of prop,
plant and equip--net... -- -- -- -- -- -- --
Cost of other
investments--net....... (37,262) -- (37,262) (4,729) -- (32,523) (10)
Intrasystem long-term
financing--net......... -- 24,247 (24,247) (24,247) -- -- --
Intrasystem money pool
investments--net....... 1,768 -- 1,768 1,768 -- -- --
Property transfers to
(from) affiliates...... (43) -- (43) (43) -- -- --
Purchase of subsidiary
and related cash
transfer............... -- -- -- (10) -- -- 10
-------- ------- -------- -------- ------- ------- ----
Net cash provided by
(used in) continuing
operations............ (36,138) 24,247 (60,385) (27,862) -- (32,523) --
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- -- -- --
-------- ------- -------- -------- ------- ------- ----
Net cash provided by
(used in) investing
activities............ (36,138) 24,247 (60,385) (27,862) -- (32,523) --
-------- ------- -------- -------- ------- ------- ----
</TABLE>
- --------
( )denotes negative amount.
D-6-40
<PAGE>
EXHIBIT D-6
CNG INTERNATIONAL CORPORATION
CONSOLIDATING STATEMENT OF CASH FLOWS--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG CNG
Cayman Cayman
Eliminations One Three
CNGI and and Combined (Page (Page CNG
Subsidiaries Adjustments Total CNGI D-6-47) D-6-53) Kauai
------------ ------------ -------- ------- ------- ------- ------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
Cash Flows From
Financing Activities
Issuance of common
stock.................. -- -- -- -- -- -- --
Issuance of notes....... -- -- -- -- -- -- --
Repayments of long-term
debt................... -- -- -- -- -- -- --
Commercial paper--net... -- -- -- -- -- -- --
Dividends paid.......... -- -- -- -- -- -- --
Intrasystem long-term
financing--net......... 23,000 (24,247) 47,247 23,000 (2,781) 27,018 10
Intrasystem money pool
borrowings
(repayments)--net...... 9,835 -- 9,835 9,835 -- -- --
Dividends paid--
subsidiary companies--
consolidated........... -- -- -- -- -- -- --
Purchase of treasury
stock.................. -- -- -- -- -- -- --
Sale of treasury stock.. -- -- -- -- -- -- --
------- -------- ------- ------- ------- ------- ------
Net cash provided by
(used in) continuing
operations............ 32,835 (24,247) 57,082 32,835 (2,781) 27,018 10
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- -- -- --
------- -------- ------- ------- ------- ------- ------
Net cash provided by
(used in) financing
activities............ 32,835 (24,247) 57,082 32,835 (2,781) 27,018 10
------- -------- ------- ------- ------- ------- ------
Net increase (decrease)
in cash and TCIs...... (9,201) -- (9,201) 394 (3,887) (5,728) 20
Cash and TCIs at January
1, 1999................ 10,447 -- 10,447 29 3,887 6,531 --
------- -------- ------- ------- ------- ------- ------
Cash and TCIs at
December 31, 1999...... $ 1,246 $ -- $ 1,246 $ 423 $ -- $ 803 $ 20
======= ======== ======= ======= ======= ======= ======
Continuing operations... $ 1,246 $ -- $ 1,246 $ 423 $ -- $ 803 $ 20
Discontinued
operations............. -- -- -- -- -- -- --
------- -------- ------- ------- ------- ------- ------
Total cash and TCIs at
December 31........... $ 1,246 $ -- $ 1,246 $ 423 $ -- $ 803 $ 20
======= ======== ======= ======= ======= ======= ======
Supplemental Cash Flow
Information
Cash paid for
Interest (net of
amounts capitalized).. $ 1,208 $ -- $ 1,208 $ 1,208 $ -- $ -- $ --
Income taxes (net of
refunds).............. $(5,460) $ -- $(5,460) $(5,825) $ 20 $ 345 $ --
Non-cash investing
activities
Investment in
partnership........... $ 1,795 $ -- $ 1,795 $ 18 $ -- $ -- $1,777
Non-cash financing
activities
Capital contribution to
(from) affiliate...... $ -- $ -- $ -- $(1,777) $ -- $ -- $1,777
</TABLE>
- --------
( ) denotes negative amount.
D-6-41
<PAGE>
EXHIBIT D-6
CNG CAYMAN ONE LTD.
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
Eliminations CNG CNGI
CNG and Combined Cayman Australia
Cayman One Adjustments Total One Pty Ltd.
---------- ------------ -------- ------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
ASSETS
Property, Plant and
Equipment
Gas utility and other
plant..................... $ -- $ -- $ -- $ -- $ --
Accumulated depreciation
and amortization.......... -- -- -- -- --
------- -------- ------- ------- -------
Net gas utility and other
plant................... -- -- -- -- --
------- -------- ------- ------- -------
Exploration and production
properties................ -- -- -- -- --
Accumulated depreciation
and amortization.......... -- -- -- -- --
------- -------- ------- ------- -------
Net exploration and
production properties... -- -- -- -- --
------- -------- ------- ------- -------
Net property, plant and
equipment............... -- -- -- -- --
------- -------- ------- ------- -------
Investments
Stock of subsidiary
company, at equity--
consolidated.............. -- (38,232) 38,232 38,232 --
Notes of subsidiary
company--consolidated..... -- -- -- -- --
------- -------- ------- ------- -------
Total investments........ -- (38,232) 38,232 38,232 --
------- -------- ------- ------- -------
Current Assets
Cash and temporary cash
investments............... -- -- -- -- --
Accounts receivable
Customers................ -- -- -- -- --
Unbilled revenues and
other................... -- -- -- -- --
Allowance for doubtful
accounts................ -- -- -- -- --
Receivables from affiliated
companies--consolidated... -- -- -- -- --
Inventories, at cost
Gas stored--current
portion................. -- -- -- -- --
Materials and supplies
(average cost method)... -- -- -- -- --
Unrecovered gas costs...... -- -- -- -- --
Deferred income taxes--
current................... -- -- -- -- --
Prepayments and other
current assets............ -- -- -- -- --
------- -------- ------- ------- -------
Total current assets..... -- -- -- -- --
------- -------- ------- ------- -------
Regulatory and Other Assets
Other investments.......... 34,182 -- 34,182 -- 34,182
Deferred charges and other
assets.................... -- -- -- -- --
------- -------- ------- ------- -------
Total regulatory and
other assets............ 34,182 -- 34,182 -- 34,182
------- -------- ------- ------- -------
Total assets............. $34,182 $(38,232) $72,414 $38,232 $34,182
======= ======== ======= ======= =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-42
<PAGE>
EXHIBIT D-6
CNG CAYMAN ONE LTD.
CONSOLIDATING BALANCE SHEET (Continued)
At December 31, 1999
<TABLE>
<CAPTION>
CNG Eliminations CNG CNGI
Cayman and Combined Cayman Australia
One Adjustments Total One Pty Ltd.
------- ------------ -------- ------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
STOCKHOLDER'S EQUITY AND
LIABILITIES
Capitalization
Common stockholder's equity
Common stock................ $ -- $ -- $ -- $ -- $ --
Capital in excess of par
value...................... 35,950 (35,950) 71,900 35,950 35,950
Retained earnings, per
accompanying statement..... (1,644) (2,282) 638 2,282 (1,644)
Treasury stock, at cost..... -- -- -- -- --
------- -------- ------- ------- -------
Total common stockholder's
equity................... 34,306 (38,232) 72,538 38,232 34,306
------- -------- ------- ------- -------
Long-term debt
Debentures and Notes........ -- -- -- -- --
Notes payable to Parent
Company.................... -- -- -- -- --
------- -------- ------- ------- -------
Total long-term debt...... -- -- -- -- --
------- -------- ------- ------- -------
Total capitalization...... 34,306 (38,232) 72,538 38,232 34,306
------- -------- ------- ------- -------
Current Liabilities
Commercial paper.............. -- -- -- -- --
Accounts payable.............. -- -- -- -- --
Payables to affiliated
companies--consolidated...... -- -- -- -- --
Estimated rate contingencies
and refunds.................. -- -- -- -- --
Amounts payable to customers.. -- -- -- -- --
Taxes accrued................. (124) -- (124) -- (124)
Deferred income taxes--
current...................... -- -- -- -- --
Dividends declared............ -- -- -- -- --
Other current liabilities..... -- -- -- -- --
------- -------- ------- ------- -------
Total current
liabilities.............. (124) -- (124) -- (124)
------- -------- ------- ------- -------
Deferred Credits
Deferred income taxes......... -- -- -- -- --
Accumulated deferred
investment tax credits....... -- -- -- -- --
Deferred credits and other
liabilities.................. -- -- -- -- --
------- -------- ------- ------- -------
Total deferred credits.... -- -- -- -- --
------- -------- ------- ------- -------
Commitments and
Contingencies................
------- -------- ------- ------- -------
Total stockholder's equity
and liabilities.......... $34,182 $(38,232) $72,414 $38,232 $34,182
======= ======== ======= ======= =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-43
<PAGE>
EXHIBIT D-6
CNG CAYMAN ONE LTD.
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG Cayman Eliminations CNG CNGI
One and and Combined Cayman Australia
Subsidiary Adjustments Total One Pty Ltd.
---------- ------------ -------- ------ ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Operating Revenues
Regulated gas sales......... $ -- $ -- $ -- $-- $ --
Nonregulated gas sales...... -- -- -- -- --
------ ----- ------ ---- ------
Total gas sales......... -- -- -- -- --
Gas transportation and
storage.................... -- -- -- -- --
Other....................... -- -- -- -- --
------ ----- ------ ---- ------
Total operating
revenues............... -- -- -- -- --
------ ----- ------ ---- ------
Operating Expenses
Purchased gas............... -- -- -- -- --
Liquids, capacity and other
products purchased......... -- -- -- -- --
Operation expense........... 466 -- 466 -- 466
Maintenance................. -- -- -- -- --
Depreciation and
amortization............... -- -- -- -- --
Taxes, other than income
taxes...................... -- -- -- -- --
------ ----- ------ ---- ------
Subtotal................ 466 -- 466 -- 466
------ ----- ------ ---- ------
Operating income before
income taxes........... (466) -- (466) -- (466)
Income taxes................ (104) -- (104) -- (104)
------ ----- ------ ---- ------
Operating income........ (362) -- (362) -- (362)
------ ----- ------ ---- ------
Other Income (Deductions)
Interest revenues........... 111 -- 111 -- 111
Merger expense.............. -- -- -- -- --
Other--net.................. 1,061 -- 1,061 -- 1,061
Equity in earnings of
subsidiary company--
consolidated............... -- (810) 810 810 --
Interest revenues from
affiliated companies--
consolidated............... -- -- -- -- --
------ ----- ------ ---- ------
Total other income
(deductions)........... 1,172 (810) 1,982 810 1,172
------ ----- ------ ---- ------
Income before interest
charges................ 810 (810) 1,620 810 810
------ ----- ------ ---- ------
Interest Charges
Interest on long-term debt.. -- -- -- -- --
Other interest expense...... -- -- -- -- --
Allowance for funds used
during construction........ -- -- -- -- --
------ ----- ------ ---- ------
Total interest charges.. -- -- -- -- --
------ ----- ------ ---- ------
Net Income.................. $ 810 $(810) $1,620 $810 $ 810
====== ===== ====== ==== ======
</TABLE>
- --------
( ) denotes negative amount.
D-6-44
<PAGE>
EXHIBIT D-6
CNG CAYMAN ONE LTD.
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG Cayman Eliminations CNG CNGI
One and and Combined Cayman Australia
Subsidiary Adjustments Total One Pty Ltd.
---------- ------------ -------- ------ ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at December 31,
1998...................... $(3,806) $(1,472) $(2,334) $1,472 $(3,806)
Net income for the year
1999 per accompanying
income statement.......... 810 (810) 1,620 810 810
------- ------- ------- ------ -------
Total.................... (2,996) (2,282) (714) 2,282 (2,996)
Dividends declared on
common stock--cash........ -- -- -- -- --
Foreign currency
translation adjustment.... 1,352 -- 1,352 -- 1,352
------- ------- ------- ------ -------
Balance at December 31,
1999...................... $(1,644) $(2,282) $ 638 $2,282 $(1,644)
======= ======= ======= ====== =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-45
<PAGE>
EXHIBIT D-6
CNG CAYMAN ONE LTD.
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG
Cayman One Eliminations CNG CNGI
and and Combined Cayman Australia
Subsidiary Adjustments Total One Pty Ltd.
---------- ------------ -------- ------ ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating
Activities
Net income................... $ 810 $ (810) $ 1,620 $ 810 $ 810
Adjustments to reconcile net
income to net cash provided
by (used in) operating
activities
Depreciation and
amortization............... -- -- -- -- --
Pension cost (credit)--net.. -- -- -- -- --
Stock award amortization.... -- -- -- -- --
Deferred income taxes--net.. -- -- -- -- --
Investment tax credit....... -- -- -- -- --
Changes in current assets
and current liabilities
Accounts receivable--net.... -- -- -- -- --
Receivables from affiliated
companies--consolidated.... -- (33) 33 33 --
Inventories................. -- -- -- -- --
Unrecovered gas costs....... -- -- -- -- --
Accounts payable............ -- -- -- -- --
Payables to affiliated
companies--consolidated.... (33) 33 (66) (33) (33)
Estimated rate contingencies
and refunds................ -- -- -- -- --
Amounts payable to
customers.................. -- -- -- -- --
Taxes accrued............... (124) -- (124) -- (124)
Other--net.................. -- -- -- -- --
Changes in other assets and
other liabilities.......... (1,759) -- (1,759) -- (1,759)
Excess of equity in earnings
of subsidiary companies
over their cash dividends
paid--consolidated......... -- 810 (810) (810) --
Other--net.................. -- -- -- -- --
------- ------- ------- ----- ------
Net cash provided by (used
in) continuing operations.. (1,106) -- (1,106) -- (1,106)
Net cash provided by (used
in) discontinued
operations.................. -- -- -- -- --
------- ------- ------- ----- ------
Net cash provided by (used
in) operating activities... (1,106) -- (1,106) -- (1,106)
------- ------- ------- ----- ------
Cash Flows From Investing
Activities
Plant construction and other
property additions.......... -- -- -- -- --
Proceeds from dispositions of
prop, plant and equip.--
net......................... -- -- -- -- --
Cost of other investments--
net......................... -- -- -- -- --
Intrasystem long-term
financing--net.............. -- (2,781) 2,781 2,781 --
Intrasystem money pool
investments--net............ -- -- -- -- --
Property transfers to (from)
affiliates.................. -- -- -- -- --
------- ------- ------- ----- ------
Net cash provided by (used
in) continuing operations.. -- (2,781) 2,781 2,781 --
Net cash provided by (used
in) discontinued
operations.................. -- -- -- -- --
------- ------- ------- ----- ------
Net cash provided by (used
in) investing activities... -- (2,781) 2,781 2,781 --
------- ------- ------- ----- ------
</TABLE>
D-6-46
<PAGE>
EXHIBIT D-6
CNG CAYMAN ONE LTD.
CONSOLIDATING STATEMENT OF CASH FLOWS--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG
Cayman One Eliminations CNGI
and and Combined CNG Australia
Subsidiary Adjustments Total Cayman One Pty Ltd.
---------- ------------ -------- ---------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Cash Flows From
Financing Activities
Issuance of common
stock.................. -- -- -- -- --
Issuance of notes....... -- -- -- -- --
Repayments of long-term
debt................... -- -- -- -- --
Commercial paper--net... -- -- -- -- --
Dividends paid.......... -- -- -- -- --
Intrasystem long-term
financing--net......... (2,781) 2,781 (5,562) (2,781) (2,781)
Intrasystem money pool
borrowings
(repayments)--net...... -- -- -- -- --
Dividends paid--
subsidiary companies--
consolidated........... -- -- -- -- --
Purchase of treasury
stock.................. -- -- -- -- --
Sale of treasury stock.. -- -- -- -- --
------ ----- ------ ------- -------
Net cash provided by
(used in) continuing
operations............ (2,781) 2,781 (5,562) (2,781) (2,781)
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- --
------ ----- ------ ------- -------
Net cash provided by
(used in) financing
activities............ (2,781) 2,781 (5,562) (2,781) (2,781)
------ ----- ------ ------- -------
Net increase (decrease)
in cash and TCIs...... (3,887) -- (3,887) -- (3,887)
Cash and TCIs at January
1, 1999................ 3,887 -- 3,887 -- 3,887
------ ----- ------ ------- -------
Cash and TCIs at
December 31, 1999...... $ -- $ -- $ -- $ -- $ --
====== ===== ====== ======= =======
Continuing operations... $ -- $ -- $ -- $ -- $ --
Discontinued
operations............. -- -- -- -- --
------ ----- ------ ------- -------
Total cash and TCIs at
December 31........... $ -- $ -- $ -- $ -- $ --
====== ===== ====== ======= =======
Supplemental Cash Flow
Information
Cash paid for
Interest (net of
amounts capitalized).. $ -- $ -- $ -- $ -- $ --
Income taxes (net of
refunds).............. $ 20 $ -- $ 20 $ -- $ 20
Non-cash investing
activities
Investment in
partnership........... $ -- $ -- $ -- $ -- $ --
</TABLE>
- --------
( ) denotes negative amount.
D-6-47
<PAGE>
EXHIBIT D-6
CNG CAYMAN THREE LTD.
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
CNG Cayman Eliminations CNG CNG
Three and and Combined Cayman Argentina
Subsidiary Adjustments Total Three S.A.
---------- ------------ -------- -------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
ASSETS
Property, Plant and
Equipment
Gas utility and other
plant.................... $ -- $ -- $ -- $ -- $ --
Accumulated depreciation
and amortization......... -- -- -- -- --
-------- ----- -------- -------- ------
Net gas utility and other
plant................... -- -- -- -- --
-------- ----- -------- -------- ------
Exploration and production
properties............... -- -- -- -- --
Accumulated depreciation
and amortization......... -- -- -- -- --
-------- ----- -------- -------- ------
Net exploration and
production properties... -- -- -- -- --
-------- ----- -------- -------- ------
Net property, plant and
equipment............... -- -- -- -- --
-------- ----- -------- -------- ------
Investments
Stock of subsidiary
company, at equity--
consolidated............. -- (979) 979 979 --
Notes of subsidiary
company--consolidated.... -- -- -- -- --
-------- ----- -------- -------- ------
Total investments........ -- (979) 979 979 --
-------- ----- -------- -------- ------
Current Assets
Cash and temporary cash
investments.............. 803 -- 803 291 512
Accounts receivable
Customers................ -- -- -- -- --
Unbilled revenues and
other................... 519 -- 519 -- 519
Allowance for doubtful
accounts................ -- -- -- -- --
Receivables from
affiliated companies--
consolidated............. -- -- -- -- --
Inventories, at cost
Gas stored--current
portion................. -- -- -- -- --
Materials and supplies
(average cost method)... -- -- -- -- --
Unrecovered gas costs..... -- -- -- -- --
Deferred income taxes--
current.................. -- -- -- -- --
Prepayments and other
current assets........... -- -- -- -- --
-------- ----- -------- -------- ------
Total current assets..... 1,322 -- 1,322 291 1,031
-------- ----- -------- -------- ------
Regulatory and Other
Assets
Other investments......... 129,274 -- 129,274 129,274 --
Deferred charges and other
assets................... -- -- -- -- --
-------- ----- -------- -------- ------
Total regulatory and
other assets............ 129,274 -- 129,274 129,274 --
-------- ----- -------- -------- ------
Total assets............. $130,596 $(979) $131,575 $130,544 $1,031
======== ===== ======== ======== ======
</TABLE>
- --------
( ) denotes negative amount.
D-6-48
<PAGE>
EXHIBIT D-6
CNG CAYMAN THREE LTD.
CONSOLIDATING BALANCE SHEET--(Continued)
At December 31, 1999
<TABLE>
<CAPTION>
CNG Cayman Eliminations CNG CNG
Three and and Combined Cayman Argentina
Subsidiary Adjustments Total Three S.A.
---------- ------------ -------- -------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
STOCKHOLDER'S EQUITY AND
LIABILITIES
Capitalization
Common stockholder's
equity
Common stock............. $ -- $ (12) $ 12 $ -- $ 12
Capital in excess of par
value................... 117,966 (300) 118,266 117,966 300
Retained earnings, per
accompanying statement.. 12,552 (667) 13,219 12,552 667
Treasury stock, at cost.. -- -- -- -- --
-------- ----- -------- -------- ------
Total common
stockholder's equity.... 130,518 (979) 131,497 130,518 979
-------- ----- -------- -------- ------
Long-term debt
Debentures and Notes..... -- -- -- -- --
Notes payable to Parent
Company................. -- -- -- -- --
-------- ----- -------- -------- ------
Total long-term debt..... -- -- -- -- --
-------- ----- -------- -------- ------
Total capitalization..... 130,518 (979) 131,497 130,518 979
-------- ----- -------- -------- ------
Current Liabilities
Commercial paper.......... -- -- -- -- --
Accounts payable.......... 57 -- 57 -- 57
Payables to affiliated
companies--consolidated.. 26 -- 26 26 --
Estimated rate
contingencies and
refunds.................. -- -- -- -- --
Amounts payable to
customers................ -- -- -- -- --
Taxes accrued............. (5) -- (5) -- (5)
Deferred income taxes--
current.................. -- -- -- -- --
Dividends declared........ -- -- -- -- --
Other current
liabilities.............. -- -- -- -- --
-------- ----- -------- -------- ------
Total current
liabilities............. 78 -- 78 26 52
-------- ----- -------- -------- ------
Deferred Credits
Deferred income taxes..... -- -- -- -- --
Accumulated deferred
investment tax credits... -- -- -- -- --
Deferred credits and other
liabilities.............. -- -- -- -- --
-------- ----- -------- -------- ------
Total deferred credits... -- -- -- -- --
-------- ----- -------- -------- ------
Commitments and
Contingencies............
-------- ----- -------- -------- ------
Total stockholder's
equity and liabilities.. $130,596 $(979) $131,575 $130,544 $1,031
======== ===== ======== ======== ======
</TABLE>
- --------
( ) denotes negative amount.
D-6-49
<PAGE>
EXHIBIT D-6
CNG CAYMAN THREE LTD.
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG
Cayman Three Eliminations CNG CNG
and and Combined Cayman Argentina
Subsidiary Adjustments Total Three S.A.
------------ ------------ -------- ------ ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Operating Revenues
Regulated gas sales...... $ -- $ -- $ -- $ -- $ --
Nonregulated gas sales... -- -- -- -- --
------ ----- ------ ------ ------
Total gas sales........ -- -- -- -- --
Gas transportation and
storage................. -- -- -- -- --
Other.................... 1,161 -- 1,161 -- 1,161
------ ----- ------ ------ ------
Total operating
revenues.............. 1,161 -- 1,161 -- 1,161
------ ----- ------ ------ ------
Operating Expenses
Purchased gas............ -- -- -- -- --
Liquids, capacity and
other products
purchased............... -- -- -- -- --
Operation expense........ 667 -- 667 2 665
Maintenance.............. -- -- -- -- --
Depreciation and
amortization............ -- -- -- -- --
Taxes, other than income
taxes................... 45 -- 45 -- 45
------ ----- ------ ------ ------
Subtotal............... 712 -- 712 2 710
------ ----- ------ ------ ------
Operating income before
income taxes.......... 449 -- 449 (2) 451
Income taxes............. 340 -- 340 -- 340
------ ----- ------ ------ ------
Operating income....... 109 -- 109 (2) 111
------ ----- ------ ------ ------
Other Income (Deductions)
Interest revenues........ 137 -- 137 137 --
Merger expense........... -- -- -- -- --
Other--net............... 6,973 -- 6,973 6,973 --
Equity in earnings of
subsidiary company--
consolidated............ -- (111) 111 111 --
Interest revenues from
affiliated companies--
consolidated............ -- -- -- -- --
------ ----- ------ ------ ------
Total other income
(deductions).......... 7,110 (111) 7,221 7,221 --
------ ----- ------ ------ ------
Income before interest
charges............... 7,219 (111) 7,330 7,219 111
------ ----- ------ ------ ------
Interest Charges
Interest on long-term
debt.................... -- -- -- -- --
Other interest expense... -- -- -- -- --
Allowance for funds used
during construction..... -- -- -- -- --
------ ----- ------ ------ ------
Total interest
charges............... -- -- -- -- --
------ ----- ------ ------ ------
Net Income............... $7,219 $(111) $7,330 $7,219 $ 111
====== ===== ====== ====== ======
</TABLE>
- --------
( ) denotes negative amount.
D-6-50
<PAGE>
EXHIBIT D-6
CNG CAYMAN THREE LTD.
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG Cayman Eliminations CNG CNG
Three and and Combined Cayman Argentina
Subsidiary Adjustments Total Three S.A.
---------- ------------ -------- ------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at December 31,
1998....................... $ 5,333 $(556) $ 5,889 $ 5,333 $556
Net income for the year 1999
per accompanying income
statement.................. 7,219 (111) 7,330 7,219 111
------- ----- ------- ------- ----
Total...................... 12,552 (667) 13,219 12,552 667
Dividends declared on common
stock--cash................ -- -- -- -- --
Foreign currency translation
adjustment................. -- -- -- -- --
------- ----- ------- ------- ----
Balance at December 31,
1999....................... $12,552 $(667) $13,219 $12,552 $667
======= ===== ======= ======= ====
</TABLE>
- --------
( ) denotes negative amount.
D-6-51
<PAGE>
EXHIBIT D-6
CNG CAYMAN THREE LTD.
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG Cayman Eliminations CNG CNGI
Three and and Combined Cayman Argentina
Subsidiary Adjustments Total Three S.A.
---------- ------------ -------- -------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Cash Flows From
Operating Activities
Net income.............. $ 7,219 $(111) $ 7,330 $ 7,219 $ 111
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities
Depreciation and
amortization.......... -- -- -- -- --
Pension cost (credit)--
net................... -- -- -- -- --
Stock award
amortization.......... -- -- -- -- --
Deferred income taxes--
net................... -- -- -- -- --
Investment tax credit.. -- -- -- -- --
Changes in current
assets and current
liabilities
Accounts receivable--
net................... (314) -- (314) 205 (519)
Receivables from
affiliated companies--
consolidated.......... -- (12) 12 -- 12
Inventories............ -- -- -- -- --
Unrecovered gas costs.. -- -- -- -- --
Accounts payable....... (151) -- (151) -- (151)
Payables to affiliated
companies--
consolidated.......... 1 12 (11) (11) --
Estimated rate
contingencies and
refunds............... -- -- -- -- --
Amounts payable to
customers............. -- -- -- -- --
Taxes accrued.......... (5) -- (5) -- (5)
Other--net............. -- -- -- -- --
Changes in other assets
and other
liabilities........... (6,973) -- (6,973) (6,973) --
Excess of equity in
earnings of subsidiary
companies over their
cash dividends paid--
consolidated.......... -- 111 (111) (111) --
Other--net............. -- -- -- -- --
-------- ----- -------- -------- -----
Net cash provided by
(used in) continuing
operations............ (223) -- (223) 329 (552)
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- --
-------- ----- -------- -------- -----
Net cash provided by
(used in) operating
activities............ (223) -- (223) 329 (552)
-------- ----- -------- -------- -----
Cash Flows From
Investing Activities
Plant construction and
other property
additions.............. -- -- -- -- --
Proceeds from
dispositions of prop.,
plant and equip.--net.. -- -- -- -- --
Cost of other
investments--net....... (32,523) -- (32,523) (32,523) --
Intrasystem long-term
financing--net......... -- 300 (300) (300) --
Intrasystem money pool
investments--net....... -- -- -- -- --
Property transfers to
(from) affiliates...... -- -- -- -- --
-------- ----- -------- -------- -----
Net cash provided by
(used in) continuing
operations............ (32,523) 300 (32,823) (32,823) --
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- --
-------- ----- -------- -------- -----
Net cash provided by
(used in) investing
activities............ (32,523) 300 (32,823) (32,823) --
-------- ----- -------- -------- -----
</TABLE>
- --------
( ) denotes negative amount.
D-6-52
<PAGE>
EXHIBIT D-6
CNG CAYMAN THREE LTD.
CONSOLIDATING STATEMENT OF CASH FLOWS--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG Cayman Eliminations CNG CNGI
Three and and Combined Cayman Argentina
Subsidiary Adjustments Total Three S.A.
---------- ------------ -------- ------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Cash Flows From Financing
Activities
Issuance of common
stock................... $ -- $ -- $ -- $ -- $ --
Issuance of notes........ -- -- -- -- --
Repayments of long-term
debt.................... -- -- -- -- --
Commercial paper--net.... -- -- -- -- --
Dividends paid........... -- -- -- -- --
Intrasystem long-term
financing--net.......... 27,018 (300) 27,318 27,018 300
Intrasystem money pool
borrowings
(repayments)--net....... -- -- -- -- --
Dividends paid--
subsidiary companies--
consolidated............ -- -- -- -- --
Purchase of treasury
stock................... -- -- -- -- --
Sale of treasury stock... -- -- -- -- --
------- ----- ------- ------- -----
Net cash provided by
(used in) continuing
operations............. 27,018 (300) 27,318 27,018 300
Net cash provided by
(used in) discontinued
operations.............. -- -- -- -- --
------- ----- ------- ------- -----
Net cash provided by
(used in) financing
activities............. 27,018 (300) 27,318 27,018 300
------- ----- ------- ------- -----
Net increase (decrease)
in cash and TCIs....... (5,728) -- (5,728) (5,476) (252)
Cash and TCIs at January
1, 1999................. 6,531 -- 6,531 5,767 764
------- ----- ------- ------- -----
Cash and TCIs at December
31, 1999................ $ 803 $ -- $ 803 $ 291 $ 512
======= ===== ======= ======= =====
Continuing operations.... $ 803 $ -- $ 803 $ 291 $ 512
Discontinued operations.. -- -- -- -- --
------- ----- ------- ------- -----
Total cash and TCIs at
December 31............ $ 803 $ -- $ 803 $ 291 $ 512
======= ===== ======= ======= =====
Supplemental Cash Flow
Information
Cash paid for
Interest (net of amounts
capitalized)........... $ -- $ -- $ -- $ -- $ --
Income taxes (net of
refunds)............... $ 345 $ -- $ 345 $ -- $ 345
</TABLE>
- --------
( ) denotes negative amount.
D-6-53
<PAGE>
EXHIBIT D-6
CNG PRODUCTS AND SERVICES, INC.
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
CNG
Products and Eliminations CNG
Services and and Combined Products and CNG
Subsidiary Adjustments Total Services Technologies
------------ ------------ -------- ------------ ------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
ASSETS
Property, Plant and
Equipment
Gas utility and other
plant.................. $ -- $ -- $ -- $ -- $--
Accumulated depreciation
and amortization....... -- -- -- -- --
------ ----- ------ ------ ----
Net gas utility and
other plant.......... -- -- -- -- --
------ ----- ------ ------ ----
Exploration and
production properties.. -- -- -- -- --
Accumulated depreciation
and amortization....... -- -- -- -- --
------ ----- ------ ------ ----
Net exploration and
production
properties........... -- -- -- -- --
------ ----- ------ ------ ----
Net property, plant
and equipment........ -- -- -- -- --
------ ----- ------ ------ ----
Investments
Stock of subsidiary
company, at equity--
consolidated........... -- (611) 611 611 --
Notes of subsidiary
company--consolidated.. -- -- -- -- --
------ ----- ------ ------ ----
Total investments..... -- (611) 611 611 --
------ ----- ------ ------ ----
Current Assets
Cash and temporary cash
investments............ 5 -- 5 4 1
Accounts receivable
Customers.............. 566 -- 566 566 --
Unbilled revenues and
other................. -- -- -- -- --
Allowance for doubtful
accounts.............. (173) -- (173) (173) --
Receivables from
affiliated companies--
consolidated........... 1,295 -- 1,295 1,150 145
Inventories, at cost
Gas stored--current
portion............... -- -- -- -- --
Materials and supplies
(average cost
method)............... -- -- -- -- --
Unrecovered gas costs... -- -- -- -- --
Deferred income taxes--
current................ -- -- -- -- --
Prepayments and other
current assets......... -- -- -- -- --
------ ----- ------ ------ ----
Total current assets.. 1,693 -- 1,693 1,547 146
------ ----- ------ ------ ----
Regulatory and Other As-
sets
Other investments....... -- -- -- -- --
Deferred charges and
other assets........... -- -- -- -- --
------ ----- ------ ------ ----
Total regulatory and
other assets......... -- -- -- -- --
------ ----- ------ ------ ----
Total assets.......... $1,693 $(611) $2,304 $2,158 $146
====== ===== ====== ====== ====
</TABLE>
- --------
( ) denotes negative amount.
D-6-54
<PAGE>
EXHIBIT D-6
CNG PRODUCTS AND SERVICES, INC.
CONSOLIDATING BALANCE SHEET
At December 31, 1999
<TABLE>
<CAPTION>
CNG
Products and Eliminations CNG
Services and and Combined Products and CNG
Subsidiary Adjustments Total Services Technologies
------------ ------------ -------- ------------ ------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
STOCKHOLDER'S EQUITY
AND LIABILITIES
Capitalization
Common stockholder's
equity
Common stock........... $ 3,990 $(2,000) $ 5,990 $ 3,990 $ 2,000
Capital in excess of
par value............. -- -- -- -- --
Retained earnings, per
accompanying
statement............. (3,931) 1,389 (5,320) (3,931) (1,389)
Treasury stock, at
cost.................. -- -- -- -- --
------- ------- ------- ------- -------
Total common
stockholder's
equity............... 59 (611) 670 59 611
------- ------- ------- ------- -------
Long-term debt
Debentures and Notes... -- -- -- -- --
Notes payable to Parent
Company............... -- -- -- -- --
------- ------- ------- ------- -------
Total long-term debt.. -- -- -- -- --
------- ------- ------- ------- -------
Total capitalization.. 59 (611) 670 59 611
------- ------- ------- ------- -------
Current Liabilities
Commercial paper........ -- -- -- -- --
Accounts payable........ 865 -- 865 834 31
Payables to affiliated
companies--
consolidated........... 592 -- 592 592 --
Estimated rate
contingencies and
refunds................ -- -- -- -- --
Amounts payable to
customers.............. -- -- -- -- --
Taxes accrued........... (53) -- (53) 36 (89)
Deferred income taxes--
current................ -- -- -- -- --
Dividends declared...... -- -- -- -- --
Other current
liabilities............ 1,177 -- 1,177 1,177 --
------- ------- ------- ------- -------
Total current
liabilities.......... 2,581 -- 2,581 2,639 (58)
------- ------- ------- ------- -------
Deferred Credits
Deferred income taxes... (947) -- (947) (540) (407)
Accumulated deferred
investment tax
credits................ -- -- -- -- --
Deferred credits and
other liabilities...... -- -- -- -- --
------- ------- ------- ------- -------
Total deferred
credits.............. (947) -- (947) (540) (407)
------- ------- ------- ------- -------
Commitments and
Contingencies..........
------- ------- ------- ------- -------
Total stockholder's
equity and
liabilities.......... $ 1,693 $ (611) $ 2,304 $ 2,158 $ 146
======= ======= ======= ======= =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-55
<PAGE>
EXHIBIT D-6
CNG PRODUCTS AND SERVICES, INC.
CONSOLIDATING INCOME STATEMENT
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG
Products and Eliminations CNG
Services and and Combined Products and CNG
Subsidiary Adjustments Total Services Technologies
------------ ------------ -------- ------------ ------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Operating Revenues
Regulated gas sales..... $ -- $ -- $ -- $ -- $ --
Nonregulated gas sales.. -- -- -- -- --
------- ------ ------- ------- -------
Total gas sales....... -- -- -- -- --
Gas transportation and
storage................ -- -- -- -- --
Other................... 6,863 -- 6,863 6,863 --
------- ------ ------- ------- -------
Total operating
revenues............. 6,863 -- 6,863 6,863 --
------- ------ ------- ------- -------
Operating Expenses
Purchased gas........... -- -- -- -- --
Liquids, capacity and
other products
purchased.............. -- -- -- -- --
Operation expense....... 8,257 -- 8,257 8,257 --
Maintenance............. -- -- -- -- --
Depreciation and
amortization........... -- -- -- -- --
Taxes, other than income
taxes.................. (17) -- (17) 21 (38)
------- ------ ------- ------- -------
Subtotal.............. 8,240 -- 8,240 8,278 (38)
------- ------ ------- ------- -------
Operating income
before income taxes.. (1,377) -- (1,377) (1,415) 38
Income taxes............ (1,230) -- (1,230) (558) (672)
------- ------ ------- ------- -------
Operating income...... (147) -- (147) (857) 710
------- ------ ------- ------- -------
Other Income
(Deductions)
Interest revenues....... -- -- -- -- --
Merger expense.......... -- -- -- -- --
Other--net.............. (2,265) -- (2,265) (204) (2,061)
Equity in earnings of
subsidiary company--
consolidated........... -- 1,350 (1,350) (1,350) --
Interest revenues from
affiliated companies--
consolidated........... 37 -- 37 36 1
------- ------ ------- ------- -------
Total other income
(deductions)......... (2,228) 1,350 (3,578) (1,518) (2,060)
------- ------ ------- ------- -------
Income before interest
charges.............. (2,375) 1,350 (3,725) (2,375) (1,350)
------- ------ ------- ------- -------
Interest Charges
Interest on long-term
debt................... -- -- -- -- --
Other interest expense.. 10 -- 10 10 --
Allowance for funds used
during construction.... -- -- -- -- --
------- ------ ------- ------- -------
Total interest
charges.............. 10 -- 10 10 --
------- ------ ------- ------- -------
Net Income.............. $(2,385) $1,350 $(3,735) $(2,385) $(1,350)
======= ====== ======= ======= =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-56
<PAGE>
EXHIBIT D-6
CNG PRODUCTS AND SERVICES, INC.
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG
Products and Eliminations CNG
Services and and Combined Products and CNG
Subsidiary Adjustments Total Services Technologies
------------ ------------ -------- ------------ ------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at December 31,
1998................... $(1,546) $ 39 $(1,585) $(1,546) $ (39)
Net income for the year
1999 per accompanying
income statement....... (2,385) 1,350 (3,735) (2,385) (1,350)
------- ------ ------- ------- -------
Total................. (3,931) 1,389 (5,320) (3,931) (1,389)
Dividends declared on
common stock--cash..... -- -- -- -- --
------- ------ ------- ------- -------
Balance at December 31,
1999................... $(3,931) $1,389 $(5,320) $(3,931) $(1,389)
======= ====== ======= ======= =======
</TABLE>
- --------
( ) denotes negative amount.
D-6-57
<PAGE>
EXHIBIT D-6
CNG PRODUCTS AND SERVICES, INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG
Products and Eliminations CNG
Services and and Combined Products and CNG
Subsidiary Adjustments Total Services Technologies
------------ ------------ -------- ------------ ------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Cash Flows From
Operating Activities
Net income.............. $(2,385) $1,350 $(3,735) $(2,385) $(1,350)
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities
Depreciation and
amortization.......... -- -- -- -- --
Pension cost (credit)--
net................... -- -- -- -- --
Stock award
amortization.......... -- -- -- -- --
Deferred income taxes--
net................... (805) -- (805) (158) (647)
Investment tax credit.. -- -- -- -- --
Changes in current
assets and current
liabilities
Accounts receivable--
net................... 248 -- 248 248 --
Receivables from
affiliated companies--
consolidated.......... 1,850 (73) 1,923 1,772 151
Inventories............ -- -- -- -- --
Unrecovered gas costs.. -- -- -- -- --
Accounts payable....... 604 -- 604 632 (28)
Payables to affiliated
companies--
consolidated.......... (649) 73 (722) (708) (14)
Estimated rate
contingencies and
refunds............... -- -- -- -- --
Amounts payable to
customers............. -- -- -- -- --
Taxes accrued.......... 512 -- 512 474 38
Other--net............. 343 -- 343 343 --
Changes in other assets
and other
liabilities........... 2,168 -- 2,168 173 1,995
Excess of equity in
earnings of subsidiary
companies over their
cash dividends paid--
consolidated.......... -- (1,350) 1,350 1,350 --
Other--net............. -- -- -- -- --
------- ------ ------- ------- -------
Net cash provided by
(used in) continuing
operations............ 1,886 -- 1,886 1,741 145
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- --
------- ------ ------- ------- -------
Net cash provided by
(used in) operating
activities............ 1,886 -- 1,886 1,741 145
------- ------ ------- ------- -------
Cash Flows From
Investing Activities
Plant construction and
other property
additions.............. -- -- -- -- --
Proceeds from
dispositions of prop.,
plant and equip.--net.. -- -- -- -- --
Cost of other
investments--net....... 46 -- 46 46 --
Intrasystem long-term
financing--net......... -- -- -- -- --
Intrasystem money pool
investments--net....... (675) -- (675) (531) (144)
Property transfers to
(from) affiliates...... -- -- -- -- --
------- ------ ------- ------- -------
Net cash provided by
(used in) continuing
operations............ (629) -- (629) (485) (144)
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- --
------- ------ ------- ------- -------
Net cash provided by
(used in) investing
activities............ (629) -- (629) (485) (144)
------- ------ ------- ------- -------
</TABLE>
D-6-58
<PAGE>
EXHIBIT D-6
CNG PRODUCTS AND SERVICES, INC.
CONSOLIDATING STATEMENT OF CASH FLOWS--(Continued)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
CNG
Products and Eliminations CNG
Services and and Combined Products and CNG
Subsidiary Adjustments Total Services Technologies
------------ ------------ -------- ------------ ------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Cash Flows From
Financing Activities
Issuance of common
stock.................. -- -- -- -- --
Issuance of notes....... -- -- -- -- --
Repayments of long-term
debt................... -- -- -- -- --
Commercial paper--net... -- -- -- -- --
Dividends paid.......... -- -- -- -- --
Intrasystem long-term
financing--net......... -- -- -- -- --
Intrasystem money pool
borrowings
(repayments)--net...... (1,310) -- (1,310) (1,310) --
Dividends paid--
subsidiary companies--
consolidated........... -- -- -- -- --
Purchase of treasury
stock.................. -- -- -- -- --
Sale of treasury stock.. -- -- -- -- --
------- ---- ------- ------- ----
Net cash provided by
(used in) continuing
operations............ (1,310) -- (1,310) (1,310) --
Net cash provided by
(used in) discontinued
operations............. -- -- -- -- --
------- ---- ------- ------- ----
Net cash provided by
(used in) financing
activities............ (1,310) -- (1,310) (1,310) --
------- ---- ------- ------- ----
Net increase (decrease)
in cash and TCIs...... (53) -- (53) (54) 1
Cash and TCIs at January
1, 1999................ 58 -- 58 58 --
------- ---- ------- ------- ----
Cash and TCIs at
December 31, 1999...... $ 5 $-- $ 5 $ 4 $ 1
======= ==== ======= ======= ====
Continuing operations... $ 5 $-- $ 5 $ 4 $ 1
Discontinued
operations............. -- -- -- -- --
------- ---- ------- ------- ----
Total cash and TCIs at
December 31........... $ 5 $-- $ 5 $ 4 $ 1
======= ==== ======= ======= ====
Supplemental Cash Flow
Information
Cash paid for
Interest (net of
amounts capitalized).. $ 17 $-- $ 17 $ 17 $--
Income taxes (net of
refunds).............. $ (968) $-- $ (968) $ (875) $(93)
</TABLE>
- --------
( ) denotes negative amount.
D-6-59
<PAGE>
EXHIBIT I Other U5S Information for Consolidated Natural Gas Company
The information presented below is provided as part of this Form U5B in lieu
of Consolidated Natural Gas Company filing a separate Form U5S for the year
ended December 31, 1999. This information consists of the item numbers and
captions of each item of Form U5S, along with the related disclosures. If the
information required by an item has been provided in this Form U5B, the
appropriate cross-reference is provided.
Item 1. System Companies and Investment Therein at December 31, 1999
The information required under Item 1 for Consolidated Natural Gas Company
and its subsidiaries is included in Item 4 and Item 9 of Dominion Resources'
Registration Statement on Form U5B, and reference is made thereto as follows:
Name of Company and Business--Item 4
Number of Common Shares Owned, Issuer's Book Value and Owner's Book Value--
Item 9
Consolidated Natural Gas Company has 100 percent voting power in its
subsidiaries, and each of its subsidiary companies has 100 percent voting
power in their subsidiaries.
In September 1999, CNG Power provided the initial financing to its new
subsidiary company, CNG Kauai. CNG Kauai was incorporated in Delaware on March
7, 1997, as a special purpose subsidiary to hold Consolidated's interest in an
independent power project under development on the Hawaiian island of Kauai.
In October 1999, CNG Power sold its investment in CNG Kauai to CNG
International at net book value. CNG Kauai is an exempt wholesale generator.
Item 2. Acquisitions or Sales of Utility Assets
None.
Item 3. Issue, Sale, Pledge, Guarantee or Assumption of System Securities
CNG Transmission had during 1999 several letters of credit outstanding to
provide security to the Commonwealth of Pennsylvania for the company's
obligation to plug and reclaim gas wells as part of the process of abandonment
of gas storage properties. One-half the cost of one letter of credit is shared
by nonaffiliated pipeline companies. The maximum balance on CNG Transmission's
portion of all letters of credit during 1999 was $8,000,000 with $3,000,000
remaining outstanding as of December 31, 1999.
The Company has issued guarantees to the states of Pennsylvania, Virginia
and West Virginia to maintain worker's compensation self-insured status for
CNG Transmission, Virginia Natural Gas and Hope Gas. Self-insured status means
that the subsidiary pays the worker's compensation claims directly instead of
paying into the state maintained fund. In recent years these states have
revised their worker's compensation programs and now require parent company
guarantees--in addition to surety bonds--for subsidiary companies to maintain
self-insured status.
All of the above transactions are exempt pursuant to Rule 45(b)(6).
I-1
<PAGE>
Item 4. Acquisition, Redemption or Retirement of System Securities
Calendar Year 1999
(Thousands of Dollars)
<TABLE>
<CAPTION>
Number of
Shares or
Principal
Number of Amount
Shares or Redeemed
Name of Company Principal or
Name of Issuer and Acquiring, Redeeming or Amount Retired Commission
Title of Issue Retiring Securities Acquired (Note 1) Consideration Authorization (Note 2)
------------------ ------------------------ --------- --------- ------------- ----------------------
<S> <C> <C> <C> <C> <C>
Registered Holding
Company:
Consolidated Natural Gas
Common stock, par value
$2.75 per share........ Consolidated Natural Gas 225,356 $ 12,205 Rule 42 (Note 3)
shares
(Note 3)
Service Company:
7.5% Non-negotiable
note due 9/30/04...... Consolidated Natural Gas $ 20,000 $ 20,000 Rule 52
East Ohio Gas:
6.2% Non-negotiable
note due 9/30/10...... Consolidated Natural Gas $ 80,000 $ 80,000 Rule 52
7.5% Non-negotiable
note due 9/30/04...... Consolidated Natural Gas $ 55,000 $ 55,000 Rule 52
Virginia Natural Gas:
7.5% Non-negotiable
note due 9/30/04...... Consolidated Natural Gas $ 37,000 $ 37,000 Rule 52
Hope Gas:
Capital stock, par
value $100 per share.. Consolidated Natural Gas 40,000 $ 4,000 Rule 52
shares
7.5% Non-negotiable
note due 9/30/04...... Consolidated Natural Gas $ 4,200 $ 4,200 Rule 52
CNG Producing:
Capital stock, par
value $10,000 per
share................. Consolidated Natural Gas 11,300 $113,000 Rule 52
shares
7.5% Non-negotiable
note due 9/30/04...... Consolidated Natural Gas $195,000 $195,000 Rule 52
CNG International:
Capital stock, par
value $10,000 per
share................. Consolidated Natural Gas 2,300 $ 23,000 Rule 52
shares
--------
Total Consolidated
Natural Gas........... $543,405
========
Subsidiaries of
Registered Holding
Company:
CNG Service Company:
8.9% Non-negotiable
note due 5/31/99...... CNG Service Company $ 5,000 $ 5,000 Rule 42
9.5% Non-negotiable
note due 11/30/99..... CNG Service Company $ 240 $ 240 Rule 42
CNG Transmission:
9.5% Non-negotiable
note due 11/30/99..... CNG Transmission $ 2,077 $ 2,077 Rule 42
East Ohio Gas:
8.9% Non-negotiable
note due 5/31/99...... East Ohio Gas $15,000 $ 15,000 Rule 42
9.5% Non-negotiable
note due 11/30/99..... East Ohio Gas $ 690 $ 690 Rule 42
Peoples Natural Gas:
8.9% Non-negotiable
note due 5/31/99...... Peoples Natural Gas $10,000 $ 10,000 Rule 42
9.5% Non-negotiable
note due 11/30/99..... Peoples Natural Gas $ 511 $ 511 Rule 42
Virginia Natural Gas:
9.94% Unsecured loan
due 1/1/99............ Virginia Natural Gas $ 4,000 $ 4,000 Rule 42
8.9% Non-negotiable
note due 5/31/99...... Virginia Natural Gas $33,318 $ 33,318 Rule 42
Hope Gas:
9.5% Non-negotiable
note due 11/30/99..... Hope Gas $ 224 $ 224 Rule 42
CNG Producing:
8.9% Non-negotiable
note due 5/31/99...... CNG Producing $35,000 $ 35,000 Rule 42
8.95% Non-negotiable
note due 9/30/99...... CNG Producing $ 4,450 $ 4,450 Rule 42
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares or
Principal
Number of Amount
Name of Company Shares or Redeemed
Acquiring, Redeeming Principal or
Name of Issuer and or Retiring Amount Retired Commission
Title of Issue Securities Acquired (Note 1) Consideration Authorization (Note 2)
------------------ -------------------- --------- --------- ------------- ----------------------
<S> <C> <C> <C> <C> <C>
CNG Power:
Capital stock, par value
$1,000 per share....... CNG Power 14,100 $ 14,100 Rule 42
shares
6.75% Non-negotiable
note due 11/30/08..... CNG Power $ 223 $ 223 Rule 42
7.4% Non-negotiable
notes due 11/30/00 to
11/30/15.............. CNG Power $ 2,160 $ 2,160 Rule 42
8.75% Non-negotiable
notes due 11/30/99 to
11/30/14.............. CNG Power $ 5,712 $ 5,712 Rule 42
8.95% Non-negotiable
notes due 9/30/09 to
9/30/19............... CNG Power $ 4,000 $ 4,000 Rule 42
9.5% Non-negotiable
notes due 11/30/99 to
11/30/05.............. CNG Power $ 208 $ 208 Rule 42
Consolidated LNG:
Capital stock, par value
$10,000 per share...... Consolidated LNG 740 $ 7,400 Rule 42
shares
--------
Total subsidiaries..... $144,313
========
CNG Power:
CNG Kauai
Capital stock, par CNG Power 1 $ 10 Acquisition of an
value $10,000 per share ======== interest in an
share................. (Note 4) exempt wholesale
generator pursuant
to Section 32 (g)
of the Act
Capital stock, par CNG Power 1 $ 10 Rule 43(b)
value $10,000 per share ========
share................. (Note 4)
CNG International:
CNG Kauai
Capital stock, par CNG International 1 $ 10 Acquisition of an
value $10,000 per share ======== interest in an
share................. (Note 4) exempt wholesale
generator pursuant
to Section 32 (g)
of the Act
</TABLE>
- -------
Notes:
(1) Except as noted, all securities redeemed or retired have been cancelled.
(2) Public Utility Holding Company Act of 1935.
(3) Consolidated Natural Gas acquired 225,356 shares of treasury stock during
1999 at a cost of $12,205,000, or an average price of $54.16 a share.
During 1999, 710,036 shares of treasury stock were sold to the System's
employee incentive plans at an average price of $53.48, which amounted to
$37,970,000. At December 31, 1999, a total of 10,443 shares were being
held as treasury stock.
(4) In September 1999, CNG Power provided the initial financing to its new
subsidiary, CNG Kauai. In October 1999, CNG Power sold its investment in
CNG Kauai to CNG International.
I-3
<PAGE>
Item 5. Investments in Securities of Non-System Companies
The aggregate amounts of investments at December 31, 1999, in persons
operating in the system's retail service area are shown below.
<TABLE>
<CAPTION>
Number Aggregate
Name of Owner of Persons Business of Persons Investment
- ------------- ---------- ------------------- ----------
<S> <C> <C> <C>
CNG Transmission.......... One State Development Fund $ 100,000
Hope Gas.................. One State Development Fund $ 100,000
Hope Gas.................. One Economic Development Small $1,125,000
Business Investment Company
(Note)
Virginia Natural Gas...... One State Development Fund $ 56,367
</TABLE>
- --------
Note: Investment made pursuant to the West Virginia Capital Companies Act and
under Rule 40(a)(5).
The above do not include investments in securities of non-system companies
which have been authorized by Commission order under the Public Utility
Holding Company Act of 1935 and which are subject to Rule 24 Certificate
filing requirements.
Item 6. Officers and Directors
By permission of the Staff, information required to be disclosed pursuant to
Item 6 has been omitted. Information regarding the officers and directors of
Dominion Resources is included in Item 16 of Form U5B or in Dominion
Resources' 2000 Proxy Statement dated March 16, 2000, which is included as
Exhibit F-4 to this Form U5B.
Item 7. Contributions and Public Relations
Tabulated below for each system company are the expenditures, disbursements,
or payments made during the year 1999, directly or indirectly, to or for the
account of any citizens group, or public relations counsel. There were no
payments made to any political party, candidate for public office or holder of
such office, or any committee or agent therefor by the system companies during
the year 1999.
<TABLE>
<CAPTION>
Accounts Charged
Name or Number Per Books of
Name of Company of Beneficiary(ies) Purpose Disbursing Company Amount
- --------------- ------------------- --------- ------------------ -------
<S> <C> <C> <C> <C>
Parent Company.......... Democratic Leadership Civic Other income deductions $10,000
Council (Note 1)
Parent Company.......... Hayes & Associates Public Other income deductions $13,000
Relations
East Ohio Gas........... Four beneficiaries (Note 1) Civic Other income deductions $ 5,500
</TABLE>
- --------
Notes:
(1) Beneficiaries are nonprofit and nonpartisan civic organizations tax-
exempt under Section 501(c)(4) of the Internal Revenue Code.
(2) The information set forth above with respect to the subsidiary companies
of Consolidated Natural Gas is based upon memoranda submitted to
Consolidated Natural Gas for such purpose by each of its subsidiary
companies, which memoranda are in the certified form required by
Instruction 2 to ITEM 7. Consolidated Natural Gas is preserving such
memoranda.
I-4
<PAGE>
Item 8. Service, Sales and Construction Contracts
Part I. Contracts for services, including engineering or construction
services, or goods supplied or sold between system companies during the year
1999 are as follows:
<TABLE>
<CAPTION>
Date of
Contract(s)
Transaction (Note 1) Serving Company Receiving Company Compensation (Note 2)
- -------------------- ---------------- ------------------- ------------ ---------------
<S> <C> <C> <C> <C>
Management services..... CNG Transmission Hope Gas $1,425,576 January 1, 1984
Management services..... CNG Transmission CNG Field Services $ 566,247 July 1, 1991
Management services..... CNG Transmission CNG Power $ 125,264 August 15, 1983
Management services..... CNB Transmission Peoples Natural Gas $ 211,542 June 16, 1989
</TABLE>
- --------
Notes:
(1) Contracts for management services with aggregate consideration passing
between the same companies of less than $100,000 have been omitted.
(2) All contracts were in effect at December 31, 1999.
Part II. Contracts to purchase services or goods between any system company
and any affiliate (other than a system company) or any company in which any
officer or director of the receiving company is a partner or owns 5 percent or
more of any class of equity securities:
None.
Part III. Employment of any person by any system company for the performance
on a continuing basis of management, supervisory or financial advisory
services:
None.
Item 9. Wholesale Generators and Foreign Utility Companies
Part I. Information concerning the interests held by system companies in
exempt wholesale generators or foreign utility companies:
1. Information concerning the interests held by system companies in exempt
wholesale generators follows.
(a) Kauai Power Partners, L.P. CNG International holds a 1% limited
partnership interest in Kauai Power Partners, L.P. (KPP), and CNG Kauai, a
subsidiary of CNG International, holds a 1% general partnership interest and a
98% limited partnership interest in KPP. KPP is involved in the greenfield
development of a 26-megawatt advanced steam-injected combustion turbine power
plant on the island of Kauai, Hawaii.
The name and business address of KPP are as follows:
Kauai Power Partners, L.P.
11921 Freedom Drive
Suite 600
Reston, VA 20190
(b) At December 31, 1999, CNG International's and CNG Kauai's investment in
KPP totaled $1,805,000, which represents primarily costs incurred for the
project prior to construction.
I-5
<PAGE>
(c) KPP has a capital structure consisting of equity contributed by its
partners and has no debt. Accordingly, there is no meaningful debt to equity
ratio for KPP. Since the facility is currently in the planning stage, KPP had
no earnings for the year ended December 31, 1999.
(d) At December 31, 1999, there were no service, sales or construction
contracts between KPP and any CNG system company.
2. Information concerning the interests held by system companies in a
foreign utility company (FUCO) follows.
(a) Latin America Fund CNG International holds a 16.5% limited partnership
interest in The Latin America Energy and Electricity Fund I, L.P. (Latin
America Fund), a Cayman Islands exempted limited partnership, and an 8.29%
general partnership interest in FondElec General Partner, L.P. (FondElec).
FondElec holds a 1% general partnership interest in the Latin America Fund.
The Latin America Fund's business is limited to investing in FUCOs in Latin
America. As part of the transaction, CNG International obtains an ownership
interest, equal to its percentage ownership interest in the partnership, in
each of the Latin America Fund's investments. The Latin America Fund had
investments in two FUCOs as of December 31, 1999.
The name and business address of the Latin America Fund are as follows:
The Latin America Energy and Electricity Fund I, L.P.
Stamford Harbor Park
333 Ludlow Street
Stamford, CT 06902
(b) At December 31, 1999, CNG International's investment in the Latin
America Fund totaled $8,309,000. CNG International's total commitment for
investment in the Latin America Fund was originally $10,000,000. The
investment program has been completed. There have been no transfers of assets
from a CNG affiliate to any FUCO in which the Latin America Fund has an
interest.
(c) The Latin America Fund is an equity investment fund and as such has a
capital structure consisting of equity funds contributed by its partners.
Accordingly, there is no meaningful debt to equity ratio for the Latin America
Fund. The Latin America Fund had net income of $763,815 for the year ended
December 31, 1999.
(d) There are no service, sales or construction contracts between the Latin
America Fund, or any FUCOs in which the Latin America Fund has an interest,
and a CNG system company.
3. Information concerning the interests held by system companies in a FUCO
follows.
(a) Argentine FUCOs At December 31, 1999, CNG International had a 21.55%
ownership interest in each of two gas utility holding companies, Sodigas
Pampeana and Sodigas Sur, and a 25% ownership interest in an electric utility
holding company, Buenos Aires Energy company (BAECO). The gas utility holding
companies have ownership interests in two gas distribution companies, Camuzzi
Gas Pampeana S.A. (Camuzzi Pampeana) and Camuzzi Gas del Sur S.A. (Camuzzi del
Sur), and BAECO has an ownership interest in an electric distribution company,
Empresa Distribuidora de Energia Atlantica S.A. (EDEA). Camuzzi Pampeana,
Camuzzi del Sur and EDEA are FUCOs.
Camuzzi Pampeana serves approximately 864,000 customers in Buenos Aires
province (but not in the city of Buenos Aires itself). Camuzzi del Sur serves
approximately 398,000 customers in Argentina to the south of Buenos Aires.
Camuzzi Pampeana and Camuzzi del Sur own, in the aggregate, approximately
3,900 miles of natural gas pipelines and 15,000 miles of natural gas
distribution mains and networks. Camuzzi Pampeana and Camuzzi del Sur together
sell approximately 235 Bcf of natural gas per year.
EDEA serves approximately 407,000 electric customers in the province of
Buenos Aires, delivering about 1,800 gigawatt-hours a year. EDEA's electrical
distribution network consists of approximately 5,900 miles of
I-6
<PAGE>
high-, medium-, and low-tension power lines with approximately 3,000
supporting substations which transform energy to lower tensions for connection
to many of EDEA's customers.
The name and business address of the Argentine FUCOs are as follows:
Camuzzi Pampeana andCamuzzi del Sur:
Av. Alicia Moreau de Justo 240
3rd Floor
(1107) Buenos Aires
Argentina
EDEA: Av. Pedro Luro 2937
7th Floor
(7600) Mar del Plata
Buenos Aires
Argentina
(b) At December 31, 1999, CNG International's investment in the Argentine
holding companies was as follows:
<TABLE>
<S> <C>
Sodigas Pampeana................................................ $ 78,059,000
Sodigas Sur..................................................... 51,215,000
BAECO........................................................... 31,407,000
------------
Total........................................................... $160,681,000
============
</TABLE>
In July 1999, CNG International made a capital contribution to retire debt
at Sodigas Pampeana and Sodigas Sur. The capital contribution increased CNG
International's equity investment in the two companies but did not change its
ownership interest.
There have been no transfers of assets from a CNG affiliate to any of the
FUCOs in which Sodigas Pampeana, Sodigas Sur or BAECO has an interest.
(c) The capital structure and earnings for the Argentine holding companies
as of and for the year ended December 31, 1999, are as follows:
<TABLE>
<CAPTION>
Capital
Structure
------------ Earnings
Debt Equity (Loss)
---- ------ -----------
(In Pesos)
<S> <C> <C> <C>
Sodigas Pampeana.................................... 24% 76% $18,573,870
Sodigas Sur......................................... 21% 79% $21,476,596
BAECO............................................... 72% 28% $(5,142,748)
</TABLE>
(d) There are no service, sales or construction contracts between the
Argentine holding companies, or any FUCOs in which they hold an interest, and
a CNG system company.
Part II. Relationship of exempt wholesale generators and foreign utility
companies to system companies, and financial data:
An organization chart showing the relationship of the EWG to other system
companies is filed as Attachment H-1 to this Exhibit I. Organization charts
showing the relationship of the FUCOs to other system companies are filed as
Attachment H-2 to this Exhibit I. The balance sheet of the EWG is filed as
Attachment I-1 to this Exhibit I (there was no income activity during 1999).
Financial statements of the FUCOs are filed as Attachments I-2 through I-5 to
this Exhibit I.
I-7
<PAGE>
Part III. Investment in exempt wholesale generators and foreign utility
companies:
The Company's aggregate investment in the Latin America Fund and the
Argentine holding companies totaled $168,990,000 at December 31, 1999. The
ratio of the Registrant's aggregate investment in the FUCOs to the
Registrant's aggregate capital investment in its domestic public utility
subsidiaries was 11.2% at December 31, 1999.
Item 10. Financial Statements and Exhibits
Financial Statements
The consolidating financial statements of Consolidated Natural Gas Company
are included as Exhibit D to this Form U5B.
Exhibits
<TABLE>
<CAPTION>
SEC
Exhibit
Reference Description of Exhibit
--------- ----------------------
<C> <S>
A. Consolidated Natural Gas Company's Form 10-K Annual Report for the
year ended December 31, 1999, is hereby incorporated by reference to
the filing made on March 7, 2000 under File No. 1-3196, which is
included as Exhibit F-4 to this Form U5B.
B. A copy of the charter, as amended, and copy of the by-laws, as
amended, of Consolidated Natural Gas Company and each subsidiary
company thereof, unless otherwise indicated on the list filed
herewith, are incorporated in this report by reference to previous
filings with the Commission, as shown on such list.
C.(a) The indentures of Consolidated Natural Gas Company are hereby
incorporated by reference to previously filed material as indicated
on the list filed herewith as Attachment C.(a).
(b) Not applicable.
D. Pursuant to Rule 45(c) under the Public Utility Holding Company Act
of 1935, the Agreement among system companies concerning the
allocation of current federal income taxes (Agreement) is
incorporated in this report by reference to Consolidated Natural Gas
Company's Annual Report on Form U5S for the year ended December 31,
1995 (File No. 30-203). First Amendment to the Agreement is
incorporated in this report by reference to Consolidated Natural Gas
Company's Annual Report on Form U5S for the year ended December 31,
1996 (File No. 30-203). Second Amendment to the Agreement is
incorporated in this report by reference to Consolidated Natural Gas
Company's Annual Report on Form U5S for the year ended December 31,
1998 (File No. 30-203).
E. Pursuant to Rule 16(c) under the Public Utility Holding Company Act
of 1935, the annual report of the Iroquois Gas Transmission System,
L.P., for the year ended December 31, 1999, is filed herewith as
Attachment E.
F. Schedules supporting items of this report:
(1) ITEM 10--Schedule of utility plant and related depreciation or
amortization accounts, together with schedules of other
property or investments, are filed herewith on Form SE, if
applicable, for:
CNG Transmission
East Ohio Gas
Peoples Natural Gas
Virginia Natural Gas
Hope Gas
</TABLE>
I-8
<PAGE>
<TABLE>
<CAPTION>
SEC
Exhibit
Reference Description of Exhibit
--------- ----------------------
<C> <S>
G. Financial Data Schedules for the CNG companies have been filed as
Exhibit 27 to this Form U5B (filed herewith).
H. (1) Organization chart showing the relationship of the exempt
wholesale generator in which the system holds an interest to
other system companies, is filed herewith as Attachment H-1.
(2) Organization charts showing the relationship of the foreign
utility companies in which the system holds an interest to
other system companies, are filed herewith as Attachment H-2.
I. Financial statements of the exempt wholesale generator and foreign
utility companies are filed herewith as Attachments I-1 through I-5.
</TABLE>
I-9
<PAGE>
ATTACHMENT B
CHARTERS AND BY-LAWS
<TABLE>
<CAPTION>
Annual Report on
Form U5S
(File No. 30-203)
Year Ended
December 31, Other Commission Filing
----------------- -----------------------
<S> <C> <C>
Consolidated Natural Gas
Company
Certificate of
Incorporation as amended
January 28, 2000......... Exhibit B-10(a) to this Form U5B
By-Laws as amended January
28, 2000................. Exhibit B-10(b) to this Form U5B
Consolidated Natural Gas
Service Company, Inc.
Charter as amended
November 30, 1982........ Exhibit B-11(a) to this Form U5B
By-Laws as amended March
1, 1993.................. Exhibit B-11(b) to this Form U5B
Dominion Transmission, Inc.
(formerly CNG Transmission
Corporation)
Charter as amended April
11, 2000................. Exhibit B-5(a) to this Form U5B
By-Laws as amended April
11, 2000................. Exhibit B-5(b) to this Form U5B
Hope Gas, Inc.
Charter as amended October
13, 1994................. Exhibit B-15(a) to this form U5B
By-Laws as amended June 1,
1998..................... Exhibit B-15(b) to this Form U5B
The East Ohio Gas Company
Charter as amended June
17, 1993................. Exhibit B-14(a) to this Form U5B
Regulations as amended
June 17, 1993............ Exhibit B-14(b) for this Form U5B
The Peoples Natural Gas
Company
Charter as amended
September 2, 1993........ Exhibit B-16(a) to this Form U5B
By-Laws as amended March
15, 1990................. Exhibit B-16(b) to this Form U5B
Dominion Exploration &
Production, Inc.
(formerly CNG Producing
Company)
Charter as amended April
12, 2000................. Exhibit B-4(a) to this Form U5B
By-Laws as amended April
12, 2000................. Exhibit B-4(b) to this Form U5B
Consolidated System LNG
Company
Charter--Composite
Certificate of
Incorporation as amended
July 27, 1993............ 1993
By-Laws as amended March
17, 1997................. 1997
CNG Research Company
Certificate of
Incorporation dated June
26, 1975................. 1975
Charter Amendment dated
May 25, 1982............. 1982
Charter Amendment
effective August 23,
1991..................... 1991 (Form SE dated April 24, 1992)
By-Laws as last amended
May 19, 1997............. 1997
CNG Coal Company
Certificate of
Incorporation dated
October 4, 1976.......... 1977
Charter Amendment dated
July 20, 1990............ 1990 (Form SE dated April 25, 1991)
Charter Amendment
effective August 23,
1991..................... 1991 (Form SE dated April 24, 1992)
By-Laws as last amended
June 11, 1990............ 1990 (Form SE dated April 25, 1991)
</TABLE>
I-10
<PAGE>
<TABLE>
<CAPTION>
Annual Report on
Form U5S
(File No. 30-203)
Year Ended
December 31, Other Commission Filing
----------------- -----------------------
<S> <C> <C>
CNG Retail Services
Corporation
Certificate of
Incorporation dated
January 30, 1997.......... Exhibit B-13(a) to this Form U5B
By-Laws as adopted February
10, 1997.................. Exhibit B-13(b) to this Form U5B
CNG Financial Services, Inc.
Certificate of
Incorporation dated March
1, 1989................... 1989 (Form SE dated April 25, 1990)
By-Laws as adopted May 26,
1989...................... 1989 (Form SE dated April 25, 1990)
Virginia Natural Gas, Inc.
Amended and Restated
Articles of Incorporation
dated December 26, 1990... Exhibit B-18(a) to this Form U5B
By-Laws as last amended
April 26, 1991............ Exhibit B-18(b) to this Form U5B
CNG Power Services
Corporation
Certificate of
Incorporation as amended
December 30, 1996......... 1996
By-Laws as adopted August
8, 1994................... 1994
CNG International
Corporation
Certificate of
Incorporation dated
January 22, 1996.......... Exhibit B-12(a) to this Form U5B
By-Laws as adopted August
1, 1996................... Exhibit B-12(b) to this Form U5B
Dominion Field Services,
Inc.
(formerly CNG Field
Services Company
Certificate of
Incorporation as last
amended April 1, 2000..... Exhibit B-6(a) to this Form U5B
By-Laws as last amended
April 1, 2000............. Exhibit B-6(b) to this Form U5B
</TABLE>
I-11
<PAGE>
ATTACHMENT C.(a)
INDENTURES OF CONSOLIDATED NATURAL GAS COMPANY
The Indentures, Supplemental Indentures and Securities Resolutions between
Consolidated Natural Gas Company and its debenture Trustees, as listed below,
are incorporated by reference to material previously filed with the Commission
as indicated:
Manufacturers Hanover Trust Company (now The Chase Manhattan Bank)
Indenture dated as of May 1, 1971 (Exhibit (5) to Certificate of
Notification at Commission File No. 70-5012)
Fifteenth Supplemental Indenture thereto dated as of October 1, 1989
(Exhibit (5) to Certificate of Notification at Commission File No. 70-
7651)
Seventeenth Supplemental Indenture thereto dated as of August 1, 1993
(Exhibit (4) to Certificate of Notification at Commission File No. 70-
8167)
Eighteenth Supplemental Indenture thereto dated as of December 1, 1993
(Exhibit (4) to Certificate of Notification at Commission File No. 70-
8167)
Nineteenth Supplemental Indenture dated as of January 28, 2000 among
Consolidated Natural Gas Company, DRI New Sub II and The Chase
Manhattan Bank, successor to Manufacturers Hanover Trust Company, as
trustee (Exhibit 4A(iii) to Form 10-K for the year ended December 31,
1999, File No. 1-3196)
United States Trust Company of New York
Indenture dated as of April 1, 1995 (Exhibit (4) to Certificate of
Notification at Commission File No. 70-8107)
First Supplemental Indenture dated as of January 28, 2000 among
Consolidated Natural Gas Company, DRI New Sub II and United States
Trust Company of New York, as trustee (Exhibit 4A(ii) to Form 10-K for
the year ended December 31, 1999, File No. 1-3196)
Securities Resolution No. 1 effective as of April 12, 1995 (Exhibit 2 to
Form 8-A filed April 21, 1995 under file No. 1-3196 and relating to the 7
3/8% Debentures Due April 1, 2005)
Securities Resolution No. 2 effective as of October 16, 1996 (Exhibit 2 to
Form 8-A filed October 18, 1996 under file No. 1-3196 and relating to the
6 7/8% Debentures Due October 15, 2026)
Securities Resolution No. 3 effective as of December 10, 1996 (Exhibit 2 to
Form 8-A filed December 12, 1996 under file No. 1-3196 and relating to the
6 5/8% Debentures Due December 1, 2008)
Securities Resolution No. 4 effective as of December 9, 1997 (Exhibit 2 to
Form 8-A filed December 12, 1997 under file No. 1-3196 and relating to the
6.80% Debentures Due December 15, 2027)
Securities Resolution No. 5 effective as of October 20, 1998 (Exhibit 2 to
Form 8-A filed October 22, 1998 under file No. 1-3196 and relating to the
6% Debentures Due October 15, 2010)
Securities Resolution No. 6 effective as of September 21, 1999 under
Indenture dated as of April 1, 1995 between the Company and United States
Trust Company of New York, as trustee (Exhibit 4A (iv) to Form 10-K for
the year ended December 31, 1999, File No. 1-3196)
I-12
<PAGE>
ATTACHMENT E
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS OF
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.:
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, changes in partners' equity and of cash
flows present fairly, in all material respects, the financial position of
Iroquois Gas Transmission System, L.P. and its subsidiaries at December 31,
1999 and 1998, and the results of their operations and their cash flows for
the years then ended in conformity with accounting principles generally
accepted in the United States. These financial statements are the
responsibility of the Company'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.
Hartford, Connecticut
February 11, 2000
I-13
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the Years Ended December 31 1999 1998
- ------------------------------- -------- --------
(thousands of
dollars)
<S> <C> <C>
NET OPERATING REVENUES.......................................... $123,919 $140,371
OPERATING EXPENSES:
Operations.................................................... 21,534 21,703
Depreciation and amortization................................. 21,976 29,795
Taxes other than income taxes................................. 11,449 10,390
-------- --------
TOTAL OPERATING EXPENSES.................................... 54,959 61,888
-------- --------
OPERATING INCOME................................................ 68,960 78,483
-------- --------
OTHER INCOME AND (EXPENSES):
Interest income............................................... 1,644 1,908
Allowance for equity funds used during construction........... -- 457
Other, net.................................................... (225) 4,393
-------- --------
1,419 6,758
-------- --------
INCOME BEFORE INTEREST CHARGES AND TAXES........................ 70,379 85,241
INTEREST EXPENSE:
Interest expense.............................................. 30,621 33,169
Allowance for borrowed funds used during construction......... -- (693)
-------- --------
NET INTEREST EXPENSE........................................ 30,621 32,476
-------- --------
INCOME BEFORE TAXES............................................. 39,758 52,765
PROVISION FOR TAXES............................................. 15,580 20,788
-------- --------
NET INCOME...................................................... $ 24,178 $ 31,977
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-14
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Assets at December 31 1999 1998
- --------------------- --------- ---------
(thousands of
dollars)
<S> <C> <C>
CURRENT ASSETS:
Cash and temporary cash investments..................... $ 27,375 $ 27,356
Accounts receivable--trade.............................. 6,938 7,191
Accounts receivable--affiliates......................... 5,440 3,835
Other current assets.................................... 3,422 2,490
--------- ---------
TOTAL CURRENT ASSETS.................................. 43,175 40,872
--------- ---------
NATURAL GAS TRANSMISSION PLANT:
Natural gas plant in service............................ 773,588 770,118
Construction work in progress........................... 3,292 1,868
--------- ---------
776,880 771,986
Accumulated depreciation and amortization............... (242,074) (223,154)
--------- ---------
NET NATURAL GAS TRANSMISSION PLANT.................... 534,806 548,832
--------- ---------
OTHER ASSETS AND DEFERRED CHARGES:
Regulatory assets--income tax related................... 12,767 13,838
Regulatory assets--other................................ 2,226 2,414
Other assets and deferred charges....................... 1,877 914
--------- ---------
TOTAL ASSETS AND DEFERRED CHARGES..................... 16,870 17,166
--------- ---------
TOTAL ASSETS.......................................... $ 594,851 $ 606,870
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-15
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Liabilities and Partners' Equity at December 31 1999 1998
- ----------------------------------------------- -------- --------
(thousands of
dollars)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable.......................................... $ 3,645 $ 4,228
Accrued interest.......................................... 4,781 5,211
Short-term borrowings..................................... 3,500 --
Current portion of long-term debt......................... 28,789 28,723
Other current liabilities................................. 5,290 5,177
-------- --------
TOTAL CURRENT LIABILITIES............................... 46,005 43,339
-------- --------
LONG-TERM DEBT.............................................. 307,875 336,665
OTHER NON-CURRENT LIABILITIES............................... 816 398
-------- --------
308,691 337,063
-------- --------
AMOUNTS EQUIVALENT TO DEFERRED INCOME TAXES:
Generated by Partnership.................................. 70,037 62,274
Payable by Partners....................................... (57,270) (48,436)
-------- --------
TOTAL AMOUNTS EQUIVALENT TO DEFERRED INCOME TAXES........... 12,767 13,838
-------- --------
COMMITMENTS AND CONTINGENCIES (NOTE 6)...................... -- --
TOTAL LIABILITIES....................................... 367,463 394,240
-------- --------
PARTNERS' EQUITY............................................ 227,388 212,630
-------- --------
TOTAL LIABILITIES AND PARTNERS' EQUITY.................. $594,851 $606,870
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-16
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Years Ended December 31 1999 1998
- ------------------------------- -------- --------
(thousands of
dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income................................................... $ 24,178 $ 31,977
Adjusted for the following:
Depreciation and amortization.............................. 21,976 29,795
Allowance for equity funds used during construction........ -- (457)
Deferred regulatory assets--income tax related............. 1,071 548
Amounts equivalent to deferred income taxes................ (1,071) (548)
Income and other taxes payable by Partners................. 15,580 20,788
Other assets and deferred charges.......................... (1,007) (28)
Changes in working capital:
Accounts receivable...................................... (1,352) 3,276
Other current assets..................................... (932) (323)
Accounts payable......................................... (583) (679)
Accrued interest......................................... (430) (402)
Other liabilities........................................ 531 (48)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES...................... 57,961 83,899
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures......................................... (7,718) (14,172)
-------- --------
NET CASH USED FOR INVESTING ACTIVITIES..................... (7,718) (14,172)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Partner distributions........................................ (25,000) (40,000)
Repayments of long-term debt................................. (28,724) (28,723)
Short term borrowings........................................ 3,500 --
-------- --------
NET CASH USED FOR FINANCING ACTIVITIES..................... (50,224) (68,723)
NET INCREASE IN CASH AND TEMPORARY CASH INVESTMENTS............ 19 1,004
CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF YEAR....... 27,356 26,352
-------- --------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR............. $ 27,375 $ 27,356
======== ========
Supplemental disclosure of cash flow information:
Cash paid for interest....................................... $ 31,051 $ 33,571
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-17
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY
<TABLE>
<CAPTION>
(thousands of dollars)
<S> <C>
PARTNERS' EQUITY
BALANCE AT DECEMBER 31, 1997........................... $199,865
Net income 1998........................................ 31,977
Taxes payable by Partners:
Federal income taxes................................. 17,440
State income taxes................................... 2,127
Other state taxes.................................... 1,221
--------
20,788
Equity distributions to Partners....................... (40,000)
--------
PARTNERS' EQUITY
BALANCE AT DECEMBER 31, 1998........................... 212,630
Net income 1999........................................ 24,178
Taxes payable by Partners:
Federal income taxes................................. 13,367
State income taxes................................... 1,089
Other state taxes.................................... 1,124
--------
15,580
Equity distributions to Partners....................... (25,000)
--------
PARTNERS' EQUITY
BALANCE AT DECEMBER 31, 1999........................... $227,388
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-18
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
DESCRIPTION OF PARTNERSHIP:
Iroquois Gas Transmission System, L.P., ("Iroquois" or "Company") is a
Delaware limited partnership formed for the purpose of constructing, owning
and operating a natural gas transmission pipeline from the Canada--United
States border near Waddington, NY, to South Commack, Long Island, NY. In
accordance with the limited partnership agreement, the Partnership shall
continue in existence until October 31, 2089, and from year to year
thereafter, until the Partners elect to dissolve the Partnership and terminate
the limited partnership agreement.
Effective December 31, 1998, Alenco Iroquois Pipeline, Inc. sold its
interest in the Company to TCPL Northeast Ltd. The partners consist of
TransCanada Iroquois Ltd. (29.0%), North East Transmission Co. (19.4%), CNG
Iroquois, Inc. (16.0%), ANR Iroquois, Inc. (9.4%), ANR New England Pipeline
Co. (6.6%), TCPL Northeast Ltd. (6.0%), JMC-Iroquois, Inc. (4.93%), TEN
Transmission Company (4.87%), NJNR Pipeline Company (2.8%), and LILCO Energy
Systems, Inc. (1.0%). The Iroquois Pipeline Operating Company, a wholly-owned
subsidiary, is the administrative operator of the pipeline.
Income and expenses are allocated to the Partners and credited to their
respective equity accounts in accordance with the partnership agreements and
their respective percentage interests.
Distributions to Partners are made concurrently to all Partners in
proportion to their respective partnership interests. Total cash distributions
of $25.0 million and $40.0 million were made during 1999 and 1998,
respectively.
NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation The consolidated financial statements of the Company
are prepared in accordance with generally accepted accounting principles and
with accounting for regulated public utilities prescribed by the Federal
Energy Regulatory Commission ("FERC"). Generally accepted accounting
principles for regulated entities allow the Company to give accounting
recognition to the actions of regulatory authorities in accordance with the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 71,
"Accounting for the Effects of Certain Types of Regulation". In accordance
with SFAS No. 71, the Company has deferred recognition of costs (a regulatory
asset) or has recognized obligations (a regulatory liability) if it is
probable that such costs will be recovered or obligation relieved in the
future through the rate-making process.
Principles of Consolidation The consolidated financial statements include
the accounts of the Company and Iroquois Pipeline Operating Company, a wholly-
owned subsidiary. Intercompany transactions have been eliminated in
consolidation.
Cash and Temporary Cash Investments Iroquois considers all highly liquid
temporary cash investments purchased with an original maturity date of three
months or less to be cash equivalents. Cash and temporary cash investments of
$27.4 million in 1999, consisting primarily of low-risk mutual funds, are
carried at cost, which approximates market. At December 31, 1999 and 1998,
$9.7 million and $11.0 million, respectively, of cash and temporary cash
investments were held to satisfy the terms of the Loan Agreement (refer to
Note 3).
Natural Gas Plant In Service Natural gas plant in service is carried at
original cost. The majority of the natural gas plant in service is categorized
as natural gas transmission plant which was depreciated over 20 years
I-19
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
on a straight line basis from the in-service date through January 31, 1995.
Commencing February 1, 1995, transmission plant was depreciated over 25 years
on a straight-line basis as a result of a rate case settlement. Effective
August 31, 1998 the depreciation rate was changed to 2.77% (36 years average
life) in accordance with the FERC rate order issued July 29, 1998. The general
plant is depreciated on a straight-line basis over five years.
Construction Work In Progress At December 31, 1999, construction work in
progress included preliminary construction costs relating to the proposed
Eastchester expansion project and other on-going minor capital projects.
Allowance for Funds Used During Construction The allowance for funds used
during construction ("AFUDC") represents the cost of funds used to finance
natural gas transmission plant under construction. The AFUDC rate includes a
component for borrowed funds as well as equity. The AFUDC is capitalized as an
element of natural gas plant in service.
Provision for Taxes The payment of income taxes is the responsibility of the
Partners and such taxes are not normally reflected in the financial statements
of partnerships. Iroquois' approved rates, however, include an allowance for
taxes (calculated as if it were a corporation) and the FERC requires Iroquois
to record such taxes in the Partnership records to reflect the taxes payable
by the Partners as a result of Iroquois' operations. These taxes are recorded
without regard as to whether each Partner can utilize its share of the
Iroquois tax deductions. Iroquois' rate base, for rate-making purposes, is
reduced by the amount equivalent to accumulated deferred income taxes in
calculating the required return.
The Company accounts for income taxes under Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes". Under
SFAS No. 109, deferred taxes are provided based upon, among other factors,
enacted tax rates which would apply in the period that the taxes become
payable, and by adjusting deferred tax assets or liabilities for known changes
in future tax rates. SFAS No. 109 requires recognition of a deferred income
tax liability for the equity component of AFUDC.
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 and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Reclassifications Certain prior year amounts have been reclassified to
conform with current year classifications.
NOTE 3
FINANCING:
On June 11, 1991, Iroquois entered into a loan agreement which provided a
loan facility totaling $522.6 million to be amortized over a 14-year period
commencing November 1, 1992.
On August 30, 1992, the total amount of the loan became non-recourse to the
Partners. However, the Partners' equity interest remained pledged until
December 7, 1993, at which time the required conditions were met and the liens
were extinguished.
I-20
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
During 1993, Iroquois entered into Expansion Loan Agreement No. 1 in the
amount of $17.6 million to construct the Wright Compressor Station. The
expansion loan conditions are substantially the same as those of the base loan
and are non-recourse with respect to the Partners. The loan will mature in
November 2007.
During 1995, Iroquois entered into Expansion Loan Agreement No. 2 in the
amount of $13.4 million to finance the Croghan Compressor Station. This loan
is subject to similar provisions as the above noted loans. The loan will
mature in November 2008.
As of December 31, 1999, Iroquois was party to interest rate swap
transactions for aggregate notional principal amounts of $537.6 million. The
interest rate swaps relating to the original loan and Expansion Loan No. 1 are
$537.6 million which are being amortized over 14 years in accordance with the
principal repayment schedule provided in the Loan Agreement. The interest rate
and margin over the term of the swaps average 7.615% and 1.159%, respectively.
The interest rate swap for Expansion Loan No. 2 expired November 2, 1998 at
which time the interest rate became based upon daily LIBOR plus an average
margin of 1.153% over the term of the loan. The Original Loan Agreement
requires that at least 50% of the original debt is hedged by interest rate
swaps. The fair value of interest rate swaps is the estimated amount that
Iroquois would receive or pay to terminate the swap agreements at the
reporting date, taking into account current interest rates and current credit
worthiness of the swap counterparties. The fair value of the interest rate
swaps were ($8.6) million and ($39.2) million at December 31, 1999 and 1998,
respectively.
Iroquois is subject to risk from non-performance of the counterparties of
the swap agreements. In the event of non-performance, the Company would be
required to pay interest subject to the original terms of the loan agreement.
This risk is substantially mitigated by the fact that the counterparties are
large, highly-rated financial institutions. At December 31, 1999 the largest
single swap agreement subject to exposure was $4.3 million.
At December 31, 1999, the outstanding principal was $313.6 million on the
base loan, $12.0 million on Expansion Loan Agreement No. 1 and $11.1 million
on Expansion Loan No. 2 for total long-term debt of $336.7 million. The
combined schedule of repayments is as follows (in millions):
<TABLE>
<CAPTION>
Year Scheduled Repayment
---- -------------------
<S> <C>
2000..................... $ 28.8
2001..................... $ 26.7
2002..................... $ 26.7
2003..................... $ 26.7
2004..................... $ 26.7
Thereafter............... $201.1
</TABLE>
The loan agreements are collateralized by all the assets of the Partnership
and subject Iroquois to certain restrictions and covenants related to, among
other things, indebtedness, investments, certain expenditures, financial
ratios, and limitations on distributions to Partners. At December 31, 1999,
the Company had an outstanding letter of credit in the amount of $28.9
million, which is guaranteed by the Partners.
The short-term borrowings consist of an unsecured line of credit which
permits borrowings up to a maximum of $10 million at a rate equal to the lower
of the lenders' alternate base rate or one, two or three month LIBOR plus 3/8%
per annum. This facility is reviewed on an annual basis with the current
agreement expiring in May 2000. As of December 31, 1999, $3.5 million was
outstanding under this agreement at an annual interest rate of 6.8363%. The
line of credit contains a subjective acceleration clause as its most
restrictive covenant.
I-21
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Subsequent to December 31, 1999, the Company cancelled two interest rate
swap agreements totaling $2.2 million. Under the provisions of SFAS No. 71,
the Company intends to recover these costs and therefore will defer and
amortize these amounts over the life of the existing debt agreements.
NOTE 4
CONCENTRATIONS OF CREDIT RISK:
Iroquois' cash and temporary cash investments and trade accounts receivable
represent concentrations of credit risk. Management believes that the credit
risk associated with cash and temporary cash investments is mitigated by its
practice of limiting its investments to low-risk mutual funds, rated Aaa by
Moody's Investors Services and AAA by Standard and Poor's, and its cash
deposits to large, highly-rated financial institutions. Management also
believes that the credit risk associated with trade accounts receivable is
mitigated by the restrictive terms of the FERC gas tariff which requires
customers to pay for service within 20 days after the end of the month of
service delivery.
NOTE 5
GAS TRANSPORTATION CONTRACTS:
As of December 31, 1999, Iroquois was providing multi-year firm reserved
transportation service to 34 shippers of 987.5 MDth/d of natural gas which
breaks down as follows:
<TABLE>
<CAPTION>
Quantity in
Remaining Term in Years MDth/d
----------------------- -----------
<S> <C>
3-10............................. 109.2
11-15............................ 758.8
16-20............................ 119.5
-----
Total.......................... 987.5
=====
</TABLE>
The long-term firm service gas transportation contracts expire between
October 31, 2011 and August 1, 2018.
NOTE 6
COMMITMENTS AND CONTINGENCIES:
Regulatory Proceedings
FERC Docket No. RP97-126 On November 29, 1996, Iroquois submitted a general
rate change application to the Federal Energy Regulatory Commission ("FERC" or
"Commission") in Docket No. RP97-126-000. In an order issued on December 31,
1996 ("Suspension Order"), the Commission accepted and suspended the rates,
permitted them to become effective (with one exception noted below) on January
1, 1997, and established a hearing. Pursuant to that Suspension Order, the
Presiding Administrative Law Judge conducted a hearing on all issues raised by
Iroquois' filing, which was concluded on August 28, 1997.
Following the December 31, 1997 issuance of an Initial Decision ("1997
Initial Decision") by the Presiding Administrative Law Judge, on January 30,
1998 Iroquois filed its brief on exceptions vigorously opposing certain
aspects of the 1997 Initial Decision. On July 29, 1998 the Commission issued
its "Order Affirming in Part and Reversing in Part Initial Decision" ("July 29
Order") which modified significant portions of the 1997 Initial
I-22
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Decision. Iroquois' filing in compliance with the July 29 Order was accepted
and the lower rates became effective on August 31, 1998. In addition, on
August 28, 1998 Iroquois filed a request for rehearing of the July 29 Order.
By order issued March 11, 1999 ("March 11 Order") the Commission granted
rehearing on one aspect of the July 29 Order. The March 11 Order reversed the
earlier decision on Iroquois' capital structure and permitted Iroquois to
utilize an equity structure of 35.21% (in place of the 31.85% required by the
July 29 Order) in designing its rates. This resulted in an increase of
approximately 1c (*) per dekatherm in Iroquois' 100% load factor interzone
rate. All other requests for rehearing of the July 29 Order were denied.
Iroquois filed a petition for review of these orders in the United States
Court of Appeals for the District of Columbia Circuit docketed as DC Cir. No.
99-1175. This case has been consolidated with DC Cir. No. 99-1177, which
involves a petition for review of these same orders that was filed by Selkirk
Cogen Partners, L.P. and MassPower (customers of Iroquois). These matters are
before the court, but the parties have agreed to stay the procedural schedule
pending Commission approval of the rate settlement described below. As a
result of the Commision's February 10, 2000 approval of that settlement, the
petitions for review are expected to be withdrawn in March, 2000.
The Suspension Order granted summary disposition on one issue: as a result
of the Commission's December 20 Opinion in Docket No. RP94-72 (discussed
below), Iroquois was ordered to remove approximately $11.7 million in plant
and associated costs from its proposed rate base. This resulted in an
additional reduction in Iroquois' test-period revenues of approximately $2.0
million from those set forth in the filing. Iroquois sought rehearing (on
January 30, 1997) of the Suspension Order. This was denied by the Commission
by an order issued August 5, 1997 ("August 5 Order"). On September 3, 1997,
Iroquois filed a Petition for Review of the Commission's Suspension and August
5 Orders in the United States Court of Appeals for the District of Columbia
Circuit, docketed as D.C. Cir. No. 97-1533, which was consolidated with D.C.
Cir. No. 97-1276 (discussed below).
FERC Docket No. RP94-72 The Commission, on June 19, 1995, approved a
Stipulation and Consent Agreement in Iroquois' prior rate proceeding in Docket
No. RP94-72, which resolved all issues except for the accounting and recovery
of legal defense costs incurred in connection with certain criminal and civil
investigations into the initial construction of the Iroquois facility. A
hearing was held on this reserved issue on April 5, 1995. On July 19, 1995 the
Presiding Administrative Law Judge issued an Initial Decision ("1995 Initial
Decision") that would have permitted Iroquois to capitalize those legal
defense costs and recover $4.1 million (the dollar amount of such costs which
Iroquois filed to recover in Docket No. RP94-72) from its customers. Various
participants, including the Commission Staff, filed exceptions to the 1995
Initial Decision with the Commission (which were opposed by Iroquois on
September 7, 1995). On December 20, 1996 the Commission issued an order
reversing the 1995 Initial Decision and disallowing recovery of the legal
defense costs at issue. Iroquois filed a request for rehearing of the
Commission's December 20 Order on January 21, 1997. By Order issued March 3,
1997, the Commission denied rehearing.
Consolidated Proceedings Iroquois filed a petition for review of the
December 20 and March 3 Orders in the United States Court of Appeals for the
District of Columbia Circuit on April 18, 1997 in D.C. Cir. No. 97-1276.
Following oral argument on May 14, 1998, the court on July 21, 1998 issued a
decision reversing the Commission's December 20 and March 3 Orders as well as
the Suspension and August 5 Orders and remanded the matter to the agency for
further proceedings. The court subsequently denied rehearing of its opinion on
November 13, 1998 and issued its mandate. On June 16, 1999 the Commission
issued an "Order on Remand and Establishing Rehearing" ("June 16 Order"). The
June 16 Order concluded that a hearing was necessary to determine whether
Iroquois' incurrence of the legal expenditures was prudent and set forth the
procedures and burdens which were to govern that hearing. A preliminary
conference to establish a procedural schedule and to clarify the positions of
the participants was convened on July 12, 1999. As a result of the
Commission's February 10, 2000 approval of the rate settlement described
below, these issues have been resolved, subject to rehearing of such order.
I-23
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Settlement After extensive negotiations, on December 17, 1999 Iroquois, with
the support of all active participants, filed with the Commission a settlement
of all of the above outstanding rate matters. Pursuant to the settlement the
parties have agreed to a rate moratorium whereby, with limited exceptions, no
new rates could be placed in effect on Iroquois' system until January 1, 2004.
During the period of the moratorium, Iroquois would reduce its 100% load
factor inter-zone rate by approximately 4.8c(*) per dekatherm (approximately
1c(*) in 2001, an additional 2.4c(*) in 2002 and an additional 1.4c(*) in
2003). Based on 1999 long-term firm service contracts the settlement will
result in the following reductions in revenues: $2.3 million in 2001, $5.7
million in 2002, and $3.4 million in 2003. In addition, Iroquois would not
seek in any future rate proceedings to recover defense costs associated with
the criminal and civil investigations into the initial construction of the
Iroquois facility. These costs have been removed from the proposed rate base
and reflected in the Company's results from operations in previous years,
therefore there is no impact on the results from operations for the year
ending December 31, 1999. Finally, Iroquois, Selkirk Cogen Partners, L.P. and
MassPower would withdraw their petitions for review in DC Cir. Nos. 99-1175
and 99-1177. No comments in opposition to the settlement were filed. By letter
order issued February 10, 2000, the Commission approved the rate settlement
without modification. Any interested party may seek rehearing of such order
within 30 days of the date of such order. If no rehearing is sought, the
settlement becomes effective on March 10, 2000.
- --------
(*) Figures rounded to the nearest hundredth
Legal Proceedings--Other
Iroquois is party to various other legal actions incident to its business.
However, management believes that no material losses will result from such
proceedings.
Leases
Iroquois leases its office space under operating lease arrangements. The
leases expire at various dates through 2003 and are renewable at Iroquois'
option. Iroquois also leases a right-of-way easement on Long Island, New York,
from the Long Island Lighting Company ("LILCO"), a general partner, which
requires annual payments escalating 5% a year over the 39-year term of the
lease. In addition, Iroquois leases various equipment under non-cancelable
operating leases. During the years ended December 31, 1999 and 1998, Iroquois
made payments of $1.0 million and $0.9 million respectively, under operating
leases which were recorded as rental expense. Future minimum rental payments
under operating lease arrangements are as follows (millions of dollars):
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
2000.................................. $0.8
2001.................................. $0.7
2002.................................. $0.7
2003.................................. $0.4
2004.................................. $0.1
Thereafter............................ $4.6
</TABLE>
NOTE 7
INCOME TAXES:
Deferred income taxes which are the result of operations will become the
obligation of the Partners when the temporary differences related to those
items reverse. The Company recognizes a decrease in the Amounts Equivalent to
Deferred Income Taxes account for these amounts and records a corresponding
increase to Partners' equity. Deferred income taxes with respect to the equity
component of AFUDC remain on the accounts of the Partnership until the related
deferred regulatory asset is recognized.
I-24
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Total income tax expense includes the following components (thousands of
dollars):
<TABLE>
<CAPTION>
U.S. State-
1999 Federal State Other Total
---- ------- ------ ------ -------
<S> <C> <C> <C> <C>
Current..................................... $ 5,082 $ 540 $1,124 $ 6,746
Deferred.................................... 8,285 549 -- 8,834
------- ------ ------ -------
Total..................................... $13,367 $1,089 $1,124 $15,580
======= ====== ====== =======
<CAPTION>
U.S. State-
1998 Federal State Other Total
---- ------- ------ ------ -------
<S> <C> <C> <C> <C>
Current..................................... $ 8,910 $1,793 $1,221 $11,924
Deferred.................................... 8,530 334 -- 8,864
------- ------ ------ -------
Total..................................... $17,440 $2,127 $1,221 $20,788
======= ====== ====== =======
</TABLE>
For the years ended December 31, 1999 and 1998, the effective tax rate
differs from the Federal statutory rate due principally to the impact of state
taxes.
Deferred income taxes included in the income statement relate to the
following (thousands of dollars):
<TABLE>
<CAPTION>
1999 1998
------ ------
<S> <C> <C>
Depreciation.............................................. $8,930 $4,224
Deferred regulatory asset................................. (70) (71)
Property taxes............................................ 23 27
Legal costs............................................... (16) 104
Accrued expenses.......................................... 16 (104)
Alternative minimum tax credit............................ (37) 4,487
Other..................................................... (12) 197
------ ------
Total deferred taxes.................................... $8,834 $8,864
====== ======
</TABLE>
The components of the net deferred tax liability are as follows (thousands
of dollars):
<TABLE>
<CAPTION>
At December 31 1999 1998
-------------- -------- --------
<S> <C> <C>
DEFERRED TAX ASSETS:
Alternative minimum tax credit....................... $ 2,773 $ 1,407
Accrued expenses..................................... 5,474 5,490
-------- --------
Total deferred tax assets.......................... 8,247 6,897
DEFERRED TAX LIABILITIES:
Depreciation and related items....................... (59,072) (48,834)
Deferred regulatory asset............................ (883) (953)
Property taxes....................................... (879) (856)
Legal costs.......................................... (4,662) (4,678)
Other................................................ (707) (719)
-------- --------
Total deferred tax liabilities..................... (66,203) (56,040)
Net deferred tax liabilities......................... (57,956) (49,143)
Less deferral of tax rate change..................... 686 707
Deferred taxes-operations............................ (57,270) (48,436)
Deferred tax related to equity AFUDC................. (12,081) (13,131)
Deferred tax related to change in tax rate........... (686) (707)
-------- --------
Total deferred taxes............................... $(70,037) $(62,274)
======== ========
</TABLE>
I-25
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 8
RELATED PARTY TRANSACTIONS:
Operating revenues and amounts due from related parties were primarily for
gas transportation services. Amounts due from related parties are shown net of
payables, if any.
The following table summarizes Iroquois' related party transactions
(millions of dollars):
<TABLE>
<CAPTION>
Payments Due from Revenue
to Related Related from Related
1999 Parties Parties Parties
---- ---------- -------- ------------
<S> <C> <C> <C>
TransCanada Iroquois Ltd. ............... $0.5 $1.3 $ 7.7
North East Transmission Company.......... -- -- --
CNG Iroquois, Inc........................ -- -- --
ANR Iroquois, Inc........................ -- 0.3 3.7
JMC-Iroquois, Inc........................ -- 1.4 16.4
TEN Transmission Company................. -- 0.6 9.0
NJNR Pipeline Company.................... -- 0.7 7.1
LILCO Energy Systems, Inc. .............. 0.1 1.0 11.4
---- ---- -----
Totals................................. $0.6 $5.3 $55.3
==== ==== =====
<CAPTION>
Payments Due from Revenue
to Related Related from Related
1998 Parties Parties Parties
---- ---------- -------- ------------
<S> <C> <C> <C>
TransCanada Iroquois Ltd. ............... $0.5 $0.2 $ 0.5
North East Transmission Company.......... -- -- 15.0
CNG Iroquois, Inc........................ -- -- 2.7
ANR Iroquois, Inc........................ -- 0.4 2.8
JMC-Iroquois, Inc........................ -- 0.9 12.7
TEN Transmission Company................. -- 0.4 5.4
NJNR Pipeline Company.................... -- 0.6 8.6
LILCO Energy Systems, Inc. .............. 0.1 1.0 14.5
---- ---- -----
Totals................................. $0.6 $3.5 $62.2
==== ==== =====
</TABLE>
NOTE 9
RETIREMENT BENEFIT PLANS:
During 1997, the Company established a noncontributory retirement plan
("Plan") covering substantially all employees. Pension benefits are based on
years of credited service and employees' career earnings, as defined in the
Plan. The Company's funding policy is to contribute, annually, an amount at
least equal to that which will satisfy the minimum funding requirements of the
Employee Retirement Income Security Act plus such additional amounts, if any,
as the Company may determine to be appropriate from time to time.
During 1997 and 1998 the Company also adopted excess benefit plans (EBPs)
that provide retirement benefits to executive officers and other key
management staff. The EBPs recognize total compensation and service that would
otherwise be disregarded due to Internal Revenue Code limitations on
compensation in determining benefits under the regular retirement plan. The
EBPs are not funded and benefits are paid when due from general corporate
assets.
I-26
<PAGE>
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The following table represents the two plans' combined funded status and
amounts included in the Consolidated balance sheets (thousands of dollars):
<TABLE>
<CAPTION>
At December 31 1999 1998
-------------- ------ ------
<S> <C> <C>
Benefit obligation....................................... $1,456 $ 926
Less: fair value of plan assets.......................... 862 315
------ ------
Funded status............................................ $ (594) $ (611)
------ ------
Accrued benefit cost..................................... $ 361 $ (323)
====== ======
</TABLE>
Net Pension costs for the two plans included in the consolidated statement
of income include the following components (thousands of dollars):
<TABLE>
<CAPTION>
At December 31 1999 1998
-------------- ----- -----
<S> <C> <C>
Benefit cost.................................................. $ 435 $ 367
Employer contribution......................................... $ 520 $ 323
Benefits paid................................................. $ 20 $ 33
===== =====
</TABLE>
The assumptions used in determining the pension obligation at December 31,
1999 and 1998 were:
<TABLE>
<S> <C>
Discount rate....................................................... 7.00%
Compensation progression rate....................................... 5.00%
Expected long-term rate of return................................... N/A
</TABLE>
The Company offers a defined contribution retirement plan with a 401(k)
provision to its employees working over 1,000 hours, with over one year of
service. The employees' contributions are matched dollar for dollar by
Iroquois up to 5% of base pay. These costs are recognized on a monthly basis
and funding is made on a pay-as-you-go basis. The Company's matching
contributions to the 401(k) plan during 1999 and 1998 were $253.9 thousand and
$236.5 thousand, respectively. Iroquois does not provide post-retirement
health or life insurance benefits.
I-27
<PAGE>
ATTACHMENT H-1
CONSOLIDATED NATURAL GAS COMPANY
RELATIONSHIP OF EXEMPT WHOLESALE GENERATOR
TO OTHER SYSTEM COMPANIES
CONSOLIDATED NATURAL GAS COMPANY
(Wholly
owned
subsidiary)
CNG INTERNATIONAL CORPORATION
(Wholly
owned
subsidiary)
CNG KAUAI, INC.
(1% Limited (1% General
Partnership Partnership Interest
Interest) and 98% Limited
Partnership
Interest)
KAUAI POWER PARTNERS, L.P.
I-28
<PAGE>
ATTACHMENT H-2 (a)
CONSOLIDATED NATURAL GAS COMPANY
RELATIONSHIP OF LATIN AMERICA FOREIGN UTILITY COMPANY
TO OTHER SYSTEM COMPANIES
CONSOLIDATED NATURAL GAS COMPANY
(Wholly
owned
subsidiary
CNG INTERNATIONAL CORPORATION
(8.29% (16.5%
General Limited
Partnership Partnership
Interest) Interest)
FONDELEC GENERAL
PARTNER, L.P.
(1% General
Partnership
Interest)
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
I-29
<PAGE>
ATTACHMENT H-2(b)
CONSOLIDATED NATURAL GAS COMPANY
RELATIONSHIP OF ARGENTINE FOREIGN UTILITY COMPANIES
TO OTHER SYSTEM COMPANIES
CONSOLIDATED NATURAL GAS COMPANY
(Wholly owned
subsidiary)
CNG INTERNATIONAL CORPORATION
CNG CAYMAN THREE LTD
<TABLE>
<S> <C> <C>
(21.55% Ownership (21.55% Ownership (25% Ownership
Interest) Interest) Interest)
SODIGAS PAMPEANA S.A. SODIGAS SUR S.A. BUENOS AIRES ENERGY COMPANY S.A.
(70% Ownership (90% Ownership (55% Ownership
Interest) Interest) Interest)
CAMUZZI GAS CAMUZZI GAS INVERSORA ELECTRIA
PAMPEANA S.A. DEL SUR S.A. DE BUENOS AIRES S.A.
(90% Ownership
Interest)
EMPRESA DISTRIBUIDORA
DE ENERGIA ATLANTICA S.A.
</TABLE>
I-30
<PAGE>
Attachment I-1
KAUAI POWER PARTNERS, L.P.
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
December 31,
1999
-------------
<S> <C>
ASSETS
Property, Plant and Equipment
Construction work in progress.................................... $1,795,459.86
-------------
Current Assets
Cash............................................................. --
Accounts receivable--CNG International........................... 100.00
Accounts receivable--CNG Kauai, Inc.............................. 9,900.00
-------------
Total current assets........................................... 10,000.00
-------------
Total assets................................................... $1,805,459.86
=============
LIABILITIES AND PARTNERS' EQUITY
Partners' Equity
Capital--CNG Kauai, Inc.--Limited Partnership.................... $1,769,350.66
Capital--CNG Kauai, Inc.--General Partnership.................... 18,054.60
Capital--CNGI--Limited Partnership............................... 18,054.60
-------------
Total partners' equity......................................... 1,805,459.86
Current Liabilities.............................................. --
-------------
Total partners' equity and liabilities......................... $1,805,459.86
=============
</TABLE>
I-31
<PAGE>
Attachment I-2
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
FINANCIAL STATEMENTS
As of December 31, 1999 and 1998
Together with Auditors' Report
I-32
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE PARTNERS OF
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.:
We have audited the accompanying statements of assets, liabilities and
partners' capital, including the schedules of investments, of The Latin
America Energy and Electricity Fund I, L.P. (a Cayman Islands exempted limited
partnership) as of December 31, 1999 and 1998, and the related statements of
operations, changes in partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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.
As discussed in Note 2, the financial statements include investment
securities valued at $48,518,997 (98 percent of net assets) and $50,126,986
(96 percent of net assets) as of December 31, 1999 and 1998, respectively,
whose values have been estimated by the Fund Manager in the absence of readily
ascertainable market values. However, because of the inherent uncertainty of
valuation, the Fund Manager's estimated values may differ from the values that
would have been used had a ready market existed for the securities and the
differences could be material.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Latin America Energy
and Electricity Fund I, L.P. as of December 31, 1999 and 1998, and the results
of its operations and its cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
Grand Cayman, B.W.I.
March 3, 2000
I-33
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
STATEMENTS OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
December 31, 1999 and 1998
<TABLE>
<CAPTION>
Assets 1999 1998
- ------ ----------- -----------
<S> <C> <C>
INVESTMENTS IN SECURITIES, at fair value (cost
$48,555,763 and $50,854,467 at December 31, 1999 and
1998, respectively).................................... $48,518,997 $50,126,986
CASH AND CASH EQUIVALENTS............................... 1,039,347 2,010,018
DUE FROM FUND MANAGER (Note 5).......................... 206,400 223,878
ORGANIZATIONAL COSTS, net of accumulated amortization of
$510,000 and $390,000 at December 31, 1999 and 1998,
respectively (Note 2).................................. 90,000 210,000
----------- -----------
TOTAL ASSETS........................................ $49,854,744 $52,570,882
=========== ===========
<CAPTION>
Liabilities and Partners' Capital
- ---------------------------------
<S> <C> <C>
LIABILITIES:
Accrued liabilities................................... $ 83,860 $ 72,141
Due to Fund Manager (Note 5).......................... 241,573 237,367
----------- -----------
TOTAL LIABILITIES................................... 325,433 309,508
----------- -----------
PARTNERS' CAPITAL:
General Partner....................................... 495,293 522,614
Limited Partners...................................... 49,034,018 51,738,760
----------- -----------
TOTAL PARTNERS' CAPITAL............................. 49,529,311 52,261,374
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL............. $49,854,744 $52,570,882
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
I-34
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................ $ 52,279 $ 155,708
Dividends........................................... 505,735 817,833
---------- -----------
TOTAL INVESTMENT INCOME........................... 558,014 973,541
---------- -----------
EXPENSES:
Management fees (Note 5)............................ 753,788 753,788
Administrative expenses (Note 5).................... 230,630 399,490
Expenses related to investments not consummated..... -- 392,893
Amortization of organization costs.................. 120,000 120,000
---------- -----------
TOTAL EXPENSES.................................... 1,104,418 1,666,171
---------- -----------
NET INVESTMENT LOSS............................... (546,404) (692,630)
---------- -----------
NET GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments.................... 619,505 1,056,601
Net change in unrealized appreciation (depreciation)
in value of investments............................ 690,715 (3,211,509)
---------- -----------
NET GAIN (LOSS) ON INVESTMENTS.................... 1,310,220 (2,154,908)
---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.................................. $ 763,816 $(2,847,538)
========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
I-35
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
-------- ----------- -----------
<S> <C> <C> <C>
BALANCE, DECEMBER 31, 1997................. $431,979 $42,765,969 $43,197,948
Capital contributions.................... 159,025 15,743,523 15,902,548
Distributions............................ (39,915) (3,951,669) (3,991,584)
Net decrease in net assets resulting from
operations.............................. (28,475) (2,819,063) (2,847,538)
-------- ----------- -----------
BALANCE, DECEMBER 31, 1998................. 522,614 51,738,760 52,261,374
Distributions............................ (34,959) (3,460,920) (3,495,879)
Net increase in net assets resulting from
operations.............................. 7,638 756,178 763,816
-------- ----------- -----------
BALANCE, DECEMBER 31, 1999................. $495,293 $49,034,018 $49,529,311
======== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
I-36
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase (decrease) in net assets resulting
from operations.................................. $ 763,816 $ (2,847,538)
Adjustments to reconcile net increase (decrease)
in net assets resulting from operations to net
cash provided by (used in) operating activities--
Net realized gain on sale of securities......... (619,505) (1,056,601)
Net change in unrealized (appreciation)
depreciation in value of investments........... (690,715) 3,211,509
Amortization of organization costs.............. 120,000 120,000
Purchases of securities......................... (1,060,014) (13,934,603)
Sales of securities............................. 3,978,224 3,573,006
Changes in operating assets and liabilities:
Dividend and interest receivable.............. -- 245,018
Other assets.................................. -- 382,953
Accrued liabilities........................... 11,719 (66,913)
Due to Fund Manager........................... 4,205 102,920
----------- ------------
NET CASH USED IN OPERATING ACTIVITIES............... 2,507,730 (10,270,249)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions............................. -- 15,902,548
Distributions..................................... (3,495,879) (3,991,584)
Proceeds from note due from Fund Manager.......... 17,478 22,838
----------- ------------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES......................................... (3,478,401) 11,933,802
----------- ------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS........................................ (970,671) 1,663,553
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR........ 2,010,018 346,465
----------- ------------
CASH AND CASH EQUIVALENTS, END OF YEAR.............. $ 1,039,347 $ 2,010,018
=========== ============
</TABLE>
The accompanying notes are an integral part of these statements.
I-37
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
1. ORGANIZATION
The Latin America Energy and Electricity Fund I, L.P. (the "Fund"), a Cayman
Islands exempted limited partnership, was formed on July 17, 1995, and
commenced operations on October 31, 1995, pursuant to an amended and restated
partnership agreement (the "Partnership Agreement") as of that date. The Fund
was organized to invest in companies whose primary business is generating,
transmitting and distributing electric power in Latin or South America. The
General Partner of the Fund is FondElec General Partner, L.P. (the "General
Partner"), a Cayman Islands exempted limited partnership. The Fund shall
terminate on October 31, 2003. Its term may be extended for an additional
period of up to two years by the General Partner with the approval of the
investment committee, or it may be terminated earlier under certain
circumstances, as described in the Partnership Agreement. The Fund is managed
by FondElec Group, Inc. (the "Fund Manager").
The General Partner of the Fund, subject to certain conditions, has the
power to carry out any and all of the objectives and purposes of the Fund. The
General Partner must receive approval from the investment committee
(consisting of representatives of the strategic limited partners of the Fund)
prior to taking certain investment and administrative actions for the Fund.
2. SIGNIFICANT ACCOUNTING POLICIES
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 and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Fund considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents. At December 31, 1999
and 1998, cash equivalents consist of certificates of deposit and are stated
at cost, which approximate market.
Investment Risks
A significant portion of the Fund's assets are invested in nonmarketable
securities. Because of the absence of any liquid trading market for these
investments, the Fund may take longer to liquidate these positions than would
be the case for marketable securities. These securities may be resold in
privately negotiated or public sale transactions, and the prices realized on
such sales could be less than those originally paid by the Fund. Further,
companies whose securities are not marketable may not be subject to the
disclosure and other investor-protection requirements applicable to companies
whose securities are publicly traded. The value of nonmarketable securities,
totaling $48,518,997 (98 percent of net assets) and $50,126,986 (96 percent of
net assets) at December 31, 1999 and 1998, respectively, have been estimated
by the Fund Manager in the absence of readily ascertainable market values.
However, because of the inherent uncertainty of valuation, those estimated
values may differ significantly from the values that would have been used had
a ready market for the securities existed and the differences could be
material.
Additionally, a significant portion of the net assets of the Fund is
invested in companies whose principal operations are located outside the
United States, primarily in South America. Such investments are subject to the
risks associated with, among other factors, the economic and political
environments of those countries, which can change rapidly and have a
significant impact on the ability of the Fund to realize the value of its
investments.
I-38
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
NOTES TO THE FINANCIAL STATEMENTS--(Continued)
Investment Valuation
Unquoted securities are stated at their estimated fair value at December 31,
1999 and 1998, as determined by the Fund Manager.
Investment Transactions
The cost of securities sold is determined on the first-in, first-out basis.
During 1999 and 1998, the Fund sold portions of its interest in Ontario-
Quinta which had cost bases of approximately $3,400,00 and $2,516,000,
respectively. These sales generated net proceeds of approximately $4,019,000
and $3,573,000 and net realized gains of approximately $619,000 and
$1,057,000, respectively.
Deferred Investment Costs
Expenses incurred in connection with the due diligence investigations of
potential investments and related costs incurred are capitalized. Such costs
are either added to the cost of the investment when consummated or expensed
when the decision is made not to pursue the opportunity any further. No such
costs are capitalized as of December 31, 1999 or December 31, 1998.
Foreign Currency Transactions
The functional currency of the Fund is the U.S. dollar. Assets and
liabilities denominated in foreign currencies, if any, are translated into
U.S. dollar equivalents using the prevailing year-end spot exchange rate with
the resulting gains and losses included in net unrealized gain on investment.
Organization Costs
Costs incurred in the organization of the Fund totaling $600,000 have been
capitalized and are being amortized on a straight-line basis over a period of
five years.
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-5, "Reporting on the Costs of Start-Up
Activities". SOP 98-5 requires the organization costs to be expensed as
incurred for fiscal years beginning after December 15, 1998 and generally
requires that the initial application of this SOP be reported as the
cumulative effect of a change in accounting principle. In accordance with the
provisions of SOP 98-5 the Fund, as permitted due to the nature of the entity,
will adopt the requirements prospectively, and will continue to amortize
deferred costs over the remaining life of the original amortization period.
Income Taxes
No provision is made for U.S. federal income or excise taxes as the Fund is
organized in the Cayman Islands and does not operate in the United States.
Presently, there is no direct taxation in the Cayman Islands. As such,
interest, distributions and gains received by the Fund are free of all Cayman
Islands taxes.
3. PARTNERS' CAPITAL
Capital Contributions
Aggregate capital contributions totaled $60,303,030 at December 31, 1999 and
1998, net of capital drawn for unconsummated investments subsequently returned
and capital drawn by the admission of additional limited partners and
reimbursed to the original limited partners. Total capital commitments of the
partners are fully drawn.
I-39
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
NOTES TO THE FINANCIAL STATEMENTS--(Continued)
Distributions
Distributions shall be made to the partners in proportion to the allocation
of investment proceeds no more than 60 days after the end of the fiscal
quarter in which such investment proceeds were received by the Fund.
During 1999 and 1998, the distributions to General Partner and Limited
Partners represented distributions of earnings on investments as well as a
return of invested capital and proceeds from the partial sale of an asset.
Allocations of Proceeds
Pursuant to the terms of the Partnership Agreement, investment proceeds (as
defined in the Partnership Agreement) as to each investment are allocated
proportionately among the partners participating in such investment. Such
proceeds are further allocated between each Limited Partner and the General
Partner as follows:
a. The amount necessary to return the Limited Partner's required
contribution in such investment and to return any realized or unrealized
losses that partner has incurred on other investments will be allocated to
the Limited Partner.
b. Any investment proceeds in excess of the amount in a. above will be
allocated to the Limited Partner to provide a preferred return at the rate
of 9% per annum on net cash investment made in such investment or any
unpaid preferred return on other investments.
c. Any remaining investment proceeds will be allocated to the General
Partner until the General Partner receives 25% of the amount allocated in
b.
d. Any remaining investment proceeds will be allocated 80% to the Limited
Partner and 20% to the General Partner.
The Partnership Agreement provides for a final allocation at the termination
of the Fund related to all investments of each Limited Partner. To the extent
that the final allocation to any Limited Partner exceeds the amounts
previously allocated, the General Partner shall, subject to certain
limitations, refund such amount to the Fund for distribution to the Limited
Partner.
Profits and losses shall be allocated so that the capital account of each
partner is as equal as possible to the distribution that would be made if the
Fund were dissolved immediately after making such allocation.
Withdrawal and Admission of Partners
A Limited Partner shall not have the right to withdraw any of his capital
from the Fund except with the prior written consent of the General Partner.
4. INVESTMENTS
The Fund is permitted to invest in privately placed securities. These
securities may be resold in transactions exempt, under certain conditions,
from U.S. or local security registration. However, prompt sale of such
securities at an acceptable price may be difficult. As of December 31, 1999
and 1998, approximately 98% and 96% of the Fund's net assets, respectively,
were invested in such securities. Significant investment activities and
valuation considerations relating to nonmarketable securities for the years
ended December 31, 1999 and 1998, were as follows:
Ontario-Quinta A.V.V.
The investment in Ontario-Quinta represented an equity interest in a holding
company which controls Luz del Sur, a Peruvian utility company that was
privatized in 1994 and went public in 1996, and Tecsur, a services
I-40
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
NOTES TO THE FINANCIAL STATEMENTS--(Continued)
company that was spun out of Luz del Sur and is publicly traded. The
investment was purchased on December 29, 1995. Under the terms of the
Shareholders Agreement of Ontario-Quinta, in August 1999, Ontario-Quinta was
liquidated.
In January 1998, the Fund sold 43% of its investment in Ontario-Quinta for
$3,573,005, or $1.68 per share. At December 31, 1998, the remaining holdings
were valued at the underlying publicly traded pro rata market value of Luz del
Sur and Tecsur, an aggregate of $2,672,086, or $0.93 per Ontario-Quinta share.
In connection with the liquidation of Ontario-Quinta in August 1999, the Fund
received net proceeds of $4,019,000 consisting of $3,978,000 in cash and
286,653 shares of Tecsur valued at $41,000 in exchange for its remaining
Ontario-Quinta shares. At December 31, 1999, the Tecsur shares are valued
based on their quoted market price.
Entre Rios S.A.
In May 1996, the Fund invested in Entre Rios, the private holding company of
Empresa Distribuidora de Entre Rios S.A. ("EDEER"). EDEER is a distributor and
transmitter of electric power in Argentina. At December 31, 1999 and 1998, the
investment was valued at cost. The valuations were based on, among other
factors, the consideration that the shares are not publicly traded,
transactions that have occurred between other shareholders, and interests in
future sales transactions, have been at prices above the Fund's cost, and no
other matters have come to the attention of the Fund Manager that would create
a better estimate of current value than the original cost.
Cataguazes-Leopoldina
On October 2, 1997, the Fund invested $21,300,613, including costs incurred,
for preferred and common shares in Companhia Forca e Luz Cataguazes-Leopoldina
("Cataguazes"), a Brazilian energy and utility company. During 1998, the Fund
invested an additional $1,986,101 to purchase additional preferred shares. The
investment was carried at cost at December 31, 1999 and 1998. The average cost
per share of the investment is approximately $2.68 (per 1,000 shares) and the
Fund's investment represents approximately 5.99% of the common voting shares
of Cataguazes and 7.37% of the preferred nonvoting shares as of December 31,
1999. At the time of its investment, the Fund and an affiliated fund entered
into a Shareholders Agreement with the other main shareholders of Cataguazes,
whereby the Fund may unilaterally exercise a significant number of control
provisions over the affairs of Cataguazes; in addition, the Fund and the
affiliated fund nominated a Director to the Board.
Although Cataguazes is publicly traded on Brazilian stock exchanges, it is
traded at very low volumes as compared to the level of shares owned by the
fund. As such, based on the significance of the holdings of the Fund, the
investment is currently considered nonmarketable. The determination to value
the investment at cost was based on, among other factors, the consideration
that the shares are infrequently traded and that the public market price, in
any event, does not represent a price at which the control provisions
exercised by the Fund would be valued; there were corporate transactions
consummated in early 2000 which resulted in a third party valuation opinion
that indicates a value in excess of the Fund's cost; the Fund Manager's belief
that the present value of the investment is significantly in excess of cost;
and no other matters have come to the attention of the Fund Manager that would
create a better estimate of current value than the original cost. In its
consideration of present value, the Fund Manager considered, among many
factors, the financial results of Cataguazes, the January 1999 devaluation of
the Brazilian Real, continued high interest rates in Brazil, an increase in
Brazilian inflation as a result of the devaluation, a potential slowdown in
the growth rate of electricity sales, and the future prospects of Cataguazes,
including the expected evolution of electricity tariffs in response to recent
events.
I-41
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
NOTES TO THE FINANCIAL STATEMENTS--(Continued)
Transredes S.A.
In two transactions in July 1998 and December 1998, the Fund purchased
302,736 common shares of Transredes S.A. ("Transredes") for $11,948,502,
including expenses, or a total cost of $39.47 per share. During January 1999,
the Fund purchased an additional 29,459 shares at approximately $34.50 per
share. An affiliated fund also made an additional investment in Transredes at
that time. Transredes is a Bolivian pipeline and petroleum products
transportation company which was privatized in May 1997. At December 31, 1999
and 1998, the Fund's investment represents approximately 3.3% and 3% of the
outstanding common shares of Transredes, respectively. As of December 31, 1999
and 1998, the Fund's investment was carried at cost.
Transredes is currently owned by Bolivian pension funds, current and former
workers, Enron Corp. and Shell Oil Company. The shares are not currently
listed on any exchange. The determination to value the investment at cost at
December 31, 1999 and 1998, was based on, among other factors, the
consideration that the shares are not publicly traded, few transactions have
occurred among other shareholders (there was a transaction with another party
in December 1999 at a value approximately 15% greater than the Fund's cost)
and no other matters have come to the attention of the Fund Manager that would
create a better estimate of current value than the original cost.
5. RELATED PARTY TRANSACTIONS
Note Receivable
During 1995, the Fund received a note from the Fund Manager for $250,000.
The note is payable any time without penalty or upon termination of the
management agreement between the Fund and the Fund Manager. The note bears
interest at the rate of the three-month LIBOR. At December 31, 1999 and 1998,
the balance outstanding under this note was $206,400 and $223,878,
respectively. Interest income included in investment income in the
accompanying statements of operations for the years ended December 31, 1999
and 1998, was $12,011 and $12,970, respectively.
Management Fee
Effective October 31, 1995, the Fund Manager receives 1.25% of the Fund's
committed capital, which is generally paid quarterly in advance, as a
management fee. For the years ended December 31, 1999 and 1998, management
fees of $753,788 have been recorded in the statements of operations.
Regional Advisor
In 1996, the Fund entered into an advisory agreement with FondElec America
Latina, Inc. (the "Regional Advisor"), an affiliate of the Fund Manager. The
advisory agreement provided that the Fund shall pay the Regional Advisor
$125,000 per annum plus reasonable out-of-pocket costs for a period of three
years. For the year ended December 31, 1998, advisory fees of $125,000 were
paid to the Regional Advisor and are included in administrative expenses in
the statements of operations. The advisory agreement was terminated as of
January 1, 1999.
Technical Advisor
The Fund has entered into a technical advisory agreement with a Limited
Partner pursuant to which the technical advisor shall assist the Fund in
evaluating proposed investments. The technical advisory agreement provides
that the Fund shall annually pay the technical advisor reasonable employee
overhead and out-of-pocket expenses. There were no technical advisory fees
incurred for the years ended December 31, 1999 and 1998.
I-42
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
NOTES TO THE FINANCIAL STATEMENTS--(Continued)
Due to Fund Manager
The Fund Manager incurs certain administrative costs on behalf of the Fund.
Certain costs are incurred directly for the Fund and passed through by the
Fund Manager, and certain costs are allocations of a percentage of general
costs incurred by the Fund Manager on behalf of the Fund, as well as other
affiliated entities. At December 31, 1999 and 1998, amounts remaining to be
reimbursed to the Fund Manager were $241,573 and $237,367, respectively.
I-43
<PAGE>
THE LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
SCHEDULES OF INVESTMENTS
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999
--------------------------------------------------------------------------
Current
Value at
Number of December 31, Percent of Geographic
Security Units Cost Basis 1999 Net Assets Region Industry
- -------- ------------- ------------ ------------ ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
NONMARKETABLE
SECURITIES:
Inversora en
Distribucion de Entre
Rios S.A.............. 900 $ 12,219,684 $12,219,684 25% South America Utilities
Cataguazes............. 8,704,949,248 23,286,714 23,286,714 47 South America Utilities
Transredes............. 332,193 13,008,517 13,008,517 26 South America Utilities
Tecsur................. 286,653 40,848 4,082 -- South America Utilities
------------ ----------- ---
$ 48,555,763 $48,518,997 98%
============ =========== ===
</TABLE>
<TABLE>
<CAPTION>
1998
-------------------------------------------------------------------------
Current
Value at
Number of December 31, Percent of Geographic
Security Units Cost Basis 1998 Net Assets Region Industry
- -------- ------------- ----------- ------------ ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
NONMARKETABLE
SECURITIES:
Ontario-Quinta A.V.V... 2,873,211 $ 3,399,567 $ 2,672,086 5% South America Utilities
Inversora en
Distribucion de Entre
Rios S.A.............. 900 12,219,684 12,219,684 23 South America Utilities
Cataguazes............. 8,704,949,248 23,286,714 23,286,714 45 South America Utilities
Transredes............. 302,736 11,948,502 11,948,502 23 South America Utilities
----------- ----------- ---
$50,854,467 $50,126,986 96%
=========== =========== ===
</TABLE>
The accompanying notes are an integral part of these schedules.
I-44
<PAGE>
Attachment I-3
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED GENERAL BALANCE SHEET
As of December 31, 1999 and 1998 (Notes 1 and 2)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
(Pesos)
<S> <C> <C>
ASSETS
Current assets
Cash and banks (Note 4.a).............................. 802,038 3,636,582
Investments (Schedule C and D)......................... 6,582,106 424,574
Trade accounts receivable (Note 4.b)................... 75,069,314 63,130,284
Intercompany receivables (Note 5)...................... 2,606,444 2,734,130
Other accounts receivable (Note 4.c)................... 3,656,056 3,491,567
Inventories (Schedule F)............................... 1,038,084 655,120
----------- -----------
Total current assets................................... 89,754,042 74,072,257
----------- -----------
Non-current assets
Trade accounts receivable (Note 4.b)................... 1,954,721 1,954,721
Other accounts receivable (Note 4.c)................... 6,850,922 6,246,249
Fixed assets (Schedule A).............................. 260,700,509 251,639,202
Intangible assets (Schedule B)......................... 873,608 1,075,778
----------- -----------
Total non-current assets............................... 270,379,760 260,915,950
----------- -----------
TOTAL ASSETS........................................... 360,133,802 334,988,207
=========== ===========
LIABILITIES
Current liabilities
Suppliers (Note 4.d)................................... 18,529,940 15,471,900
Loans (Notes 4.e and 7)................................ 12,503,306 68,469,733
Intercompany payable (Note 5).......................... 1,576,064 1,794,525
Salaries and social security liabilities (Note 4.f).... 1,798,468 1,858,157
Taxes payable (Notes 4.g and 10)....................... 8,280,678 5,621,745
Other liabilities (Note 4.h)........................... 4,534,653 3,756,206
Provisions (Schedule E)................................ 3,943,581 3,781,802
----------- -----------
Total current liabilities.............................. 51,166,690 100,754,068
----------- -----------
Non-current liabilities
Loans (Notes 4.e and 7)................................ 50,557,000 50,557,000
Taxes payable (Notes 4.g and 10)....................... -- 10,807
Other liabilities (Note 4.h)........................... 16,002,178 8,339,888
----------- -----------
Total non-current liabilities.......................... 66,559,178 58,907,695
----------- -----------
TOTAL LIABILITIES...................................... 117,725,868 159,661,763
----------- -----------
Minority interests in subsidiaries..................... 23,980,657 23,510,969
----------- -----------
SHAREHOLDERS' EQUITY................................... 218,427,277 151,815,475
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............. 360,133,802 334,988,207
=========== ===========
</TABLE>
The accompanying notes and schedules are an integral part of these consolidated
financial statements.
I-45
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the Fiscal years Ended December 31, 1999 and 1998 (Notes 1 and 2)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
(Pesos)
<S> <C> <C>
Net sales (Note 4.i)................................ 222,504,279 201,362,284
Cost of sales (Schedule F).......................... (160,318,152) (144,050,684)
------------ ------------
Gross profit...................................... 62,186,127 57,311,600
------------ ------------
Marketing expenses (Schedule H)..................... (6,355,603) (6,499,126)
Administrative expenses (Schedule H)................ (15,325,366) (13,950,169)
------------ ------------
Operating profit.................................. 40,505,158 36,862,305
------------ ------------
Other income and expenses (Note 4.k)................ 284,872 (1,874,292)
Financial and holding gain/(loss) (Note 4.j)
Generated by assets............................... 1,917,756 2,603,317
Generated by liabilities.......................... (8,839,348) (12,181,055)
Income tax.......................................... (12,944,274) (12,113,835)
Minority interests in subsidiaries.................. (2,472,362) (1,937,345)
------------ ------------
Income for the year............................... 18,451,802 11,359,095
============ ============
</TABLE>
The accompanying notes and schedules are an integral part of these consolidated
financial statements.
I-46
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Fiscal years Ended December 31, 1999 and 1998 (Notes 1 and 2)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
(Pesos)
<S> <C> <C>
CHANGES IN FUNDS
Funds at beginning of year.......................... 4,061,156 16,905,486
Increase/(decrease) in funds........................ 3,322,988 (12,844,330)
----------- -----------
Funds at end of year................................ 7,384,144 4,061,156
=========== ===========
Sources of funds
Income for the year................................. 18,451,802 11,359,095
Plus: Items not entailing the use of funds
Decrease in inventories........................... -- 373,621
Fixed asset depreciation.......................... 9,846,567 8,731,519
Residuary value of deductions of fixed assets..... 1,926,310 1,706,008
Intangible asset amortization..................... 512,148 653,140
Accrued vacations and bonuses..................... 1,362,918 1,386,073
Accrued gross sales tax........................... 1,202,215 1,232,307
Accrued income tax................................ 12,944,274 10,831,650
Accrued business indebtedness cost tax............ 393,293 37,496
Accrued net financial loss pending payment........ 283,691 250,117
Accrued purchases pending payment................. 19,817,074 13,890,515
Accrued intercompany purchases pending payment.... 13,216 23,766
Intercompany fees and expenses.................... 1,013,572 1,462,304
Other liabilities and fees pending payment........ -- 31,249
Technical assistance agreement.................... 333,356 330,300
Increase in the provision for lawsuits............ 306,366 2,169,041
Increase in allowance for defaulting debtors...... 903,507 1,173,346
----------- -----------
50,858,507 44,282,452
Less: Items not entailing the sources of funds
Other income...................................... -- (250)
Recovery of intercompany expenses................. (455,254) (357,764)
Accrued sales pending collection.................. (73,668,542) (62,543,591)
Intercompany sales................................ (2,299,625) (2,410,867)
----------- -----------
(76,423,421) (65,312,472)
Minority interests in subsidiaries.................. 2,472,362 1,937,345
----------- -----------
Funds originated/(applied to) from operations--Car-
ried forward....................................... (4,640,750) (7,733,580)
----------- -----------
</TABLE>
I-47
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
(Pesos)
<S> <C> <C>
Funds originated/(applied to) from operations--
Brought forward (4,640,750) (7,733,580)
----------- -----------
Other applications of funds
Increase in inventories........................... (382,964) --
Acquisition of fixed assets....................... (19,130,031) (21,338,001)
Increase in other accounts receivable............. (870,724) (5,659,591)
Addition of intangible assets..................... (309,978) (4,296)
Changes in tax credits and debts.................. (13,254,763) (14,571,246)
Decrease in intercompany liabilities.............. (1,643,239) (2,488,385)
Decrease in salaries and social security
liabilities...................................... (1,422,607) (1,231,851)
Payment of bank and financial loans............... (5,200,143) (5,216,423)
Distribution of dividends......................... (1,242,674) (18,172,414)
Interest paid in advance.......................... -- (105,000)
Decrease in other accounts payable and other
liabilities...................................... (997,257) (529,474)
Decrease in allowances............................ (144,587) (627,193)
Decrease in suppliers............................. (18,120,049) (10,551,270)
----------- -----------
Total other applications of funds................... (62,719,016) (80,495,144)
----------- -----------
Total applications of funds......................... (67,359,766) (88,228,724)
----------- -----------
Sources of funds
Decrease in intercompany receivables.............. 3,167,338 3,356,675
Decrease in interest paid in advance.............. 105,000 --
Increase in banking loans......................... 3,950,026 8,011,771
Decrease in investments........................... -- 60,000
Decrease in trade accounts receivable............. 63,460,390 63,955,948
----------- -----------
Total sources of funds.............................. 70,682,754 75,384,394
----------- -----------
Increase/(decrease) in funds........................ 3,322,988 (12,844,330)
=========== ===========
Operations not entailing sources nor application of
funds
Increase in other liabilities..................... 9,271,788 5,520,304
Decrease in minority interests in subsidiaries.... (760,000) --
Acquisition of gas distribution networks with
liabilities...................................... (1,671,788) (5,520,304)
Withdrawal of the Subsidiary Company's voluntary
reserve.......................................... (6,840,000) --
Decrease in loans................................. 55,000,000 --
Irrevocable contribution on account of future
payments......................................... (55,000,000) --
----------- -----------
Total operations not entailing sources nor applica-
tion of funds...................................... -- --
----------- -----------
</TABLE>
The accompanying notes and schedules are an integral part of these financial
statements.
I-48
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal years Ended December 31, 1999 and 1998
NOTE 1: FINANCIAL STATEMENT PRESENTATION
As required by General Resolution No. 290/97 of the Comision Nacional de
Valores (the "CNV"), which establishes that consolidated financial statements
must be submitted following the procedure outlined in Technical Resolution No.
4 of the Argentine Federation of Professional Councils of Economic Sciences,
the December 31, 1999 and 1998, Balance Sheets of the Company and the
Statements of Income and Cash Flows for the fiscal years then ended have been
consolidated on a line-by-line basis with the financial statements of the
Subsidiary Company.
Non-monetary items included in the financial statements at December 31, 1999
and 1998, have been restated in current Pesos up to August 31, 1995. No
adjustments have been applied since such date.
The financial information at December 31, 1998, has been reclassified, for
comparative purpose, in order to be consistent with that of the current fiscal
year.
The December 31, 1999 and 1998 financial statements of the Subsidiary
Company, Camuzzi Gas del Sur S.A., which cover the same period as that of its
controlled company, Sodigas Sur S.A., have been used in order to determine the
equity value and carry out the consolidation.
NOTE 2: VALUATION CRITERIA
The financial statements of the Subsidiary Company have been prepared based
on criteria consistent with those applied for preparing the financial
statements of Sodigas Sur S.A.
In addition, the principal valuation and disclosure criteria used for
preparing the consolidated financial statements are described below:
a.Local currency assets and liabilities
The local currency assets and liabilities have been stated at their face
value at the balance sheet date, including accrued interest.
The implicit cost of financing contained in the monetary assets and
liabilities has not been segregated as it is not deemed significant.
b.Foreign currency assets and liabilities
Foreign currency assets and liabilities were translated at the exchange rate
prevailing at the balance sheet date, including accrued interest.
c.Current Investments
These are the following:
--Fixed-term deposits, which have been valued at their original amount,
plus interest accrued up to the closing date.
--Shares and interests in mutual investments funds, which have been valued
at their market value as of the balance sheet date.
I-49
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
d.Inventories
These have been valued at their replacement cost as of the end of the fiscal
year; the values thereof do not exceed their recoverable value.
e.Fixed assets
The fixed assets transferred by Gas del Estado at the beginning of
operations of Camuzzi Gas del Sur S.A. on December 28, 1992, have been valued
in an overall manner, according to the Contract for the Transfer of the
Subsidiary Company's shares of Gas del Estado. This value has been restated in
current Pesos at August 31, 1995.
The aforementioned value was recalculated for each individual fixed asset,
based on the inventory and valuation carried out during the year ended
December 31, 1993 by independent consultants.
Additions carried out after such date and up to August 31, 1995, were valued
at their acquisition cost, restated in current Pesos at such date. As from
September 1, 1995, additions have been valued at their acquisition cost in
current Pesos of the corresponding fiscal year.
Up to September 30, 1995, additions of gas distribution networks made free
of charge were recorded at their replacement cost at the time of the transfer
under the item "Other Income".
According to resolutions of the CNV adopted in the meetings held on July 28
and August 10, 1995, the gas distribution networks transferred after December
31, 1995, by users free of charge or partially funded by third parties, shall
be recorded at the lower of their construction cost or the cost fixed for
transfer, or the cost of their value to the business.
In the case that the value of the asset added exceeds the value of the
consideration assumed by the Licensee, or if such consideration does not exist
(free of charge), a cross-entry shall be recorded in an adjustment account,
which is shown deducted from the Fixed Assets, whose depreciation criteria is
equivalent to that of the asset added.
The obligation to partially or totally compensate third parties is recorded
as a liability of the Company.
The values thus determined are disclosed net of the corresponding
accumulated depreciation, calculated using the straight-line method, based on
the estimated useful lives of the assets.
The Subsidiary Company defers the net costs derived from the financing with
third party capitals of construction works which extends in time until they
are in start-up conditions. The amount capitalized in fixed assets was Ps.
712,323 during the fiscal year ended December 31, 1999.
The value of the Fixed Assets, taken as a whole, does not exceed their
recoverable value.
f.Intangible assets
This caption includes the acquisition of software and expenses in relation
to the programs for the issuance of the Notes by Sodigas Sur S.A. and its
Subsidiary Company, to be amortized over a five-year period.
Intangible assets added up to August 31, 1995 are recorded at their
acquisition cost restated in current Pesos at such date, while additions
carried out after September 1, 1995 are disclosed at their acquisition cost in
current Pesos of the corresponding period, in both cases net of their
corresponding cumulative amortization, calculated according to the straight-
line method.
I-50
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
g.Shareholders' equity
The Capital Stock has been stated at its nominal value. The Capital Stock
Adjustment represents the difference between the nominal value of the capital
stock and its value adjusted, based on the fluctuation in the general
wholesale price index up to August 31, 1995.
Changes in net worth prior to August 31, 1995 are restated as of that date,
while subsequent changes are stated in the currency value of the corresponding
period.
h.Profit/(loss) accounts
Profit/(loss) for the period is disclosed at historical values, except for
the charges for assets consumed (fixed asset depreciation and intangible asset
amortization), which were determined according to the values of such assets.
i.Accounting recognition of income
The income stemming from gas distribution activities is recognized when the
service is rendered and charged to the "Unbilled gas consumption" account.
j.Statement of Cash Flows
The Consolidated Statement of Cash Flows is presented using the Indirect
Method of Alternative D of Technical Resolution No. 9 of the Argentine
Federation of Professional Councils of Economic Sciences, considering Cash and
Banks and Short-Term Investments as funds.
k.Accounting estimates
The preparation of these financial statements as of a specified date
requires that the Subsidiary Company's management performs estimates and
assessments that affect the amount of the recorded assets and liabilities and
the contingent assets and liabilities disclosed as of the date of these
financial statements, as well as the income and expenses recorded during the
period. The Subsidiary Company's management makes estimates so as to
calculate, among other things, the income tax charge, the unbilled gas
consumptions, the discounts to be made to users and the provisions for
contingencies, as of a certain date. The actual future results may differ from
the estimates and assessments made as of the date of the financial statements.
NOTE 3: CORPORATE CONTROL
Sodigas Sur S.A. owns 90% of the shares of Camuzzi Gas del Sur S.A.
NOTE 4: BREAKDOWN OF ITEMS
Balance Sheet
a.Cash and banks
<TABLE>
<CAPTION>
As of December
31,
-----------------
1999 1998
------- ---------
(Pesos)
<S> <C> <C>
Imprest fund............................................... 100,994 93,765
Banks (Schedule G)......................................... 701,044 3,542,817
------- ---------
Total...................................................... 802,038 3,636,582
======= =========
</TABLE>
I-51
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
b.Trade accounts receivable
<TABLE>
<CAPTION>
As of December 31,
----------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Current
Trade debtors....................................... 17,263,224 13,443,865
Subsidies receivable................................ 54,911,456 47,895,944
Unbilled gas consumption............................ 9,610,937 7,761,292
---------- ----------
Subtotal............................................ 81,785,617 69,101,101
Less: Allowance for defaulting debtors (Schedule
E)................................................. (6,716,303) (5,970,817)
---------- ----------
Total............................................... 75,069,314 63,130,284
---------- ----------
Non-current
Subsidies receivable................................ 1,954,721 1,954,721
---------- ----------
Total............................................... 1,954,721 1,954,721
---------- ----------
Total trade accounts receivable..................... 77,024,035 65,085,005
========== ==========
c.Other accounts receivable
<CAPTION>
As of December 31,
----------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Current
Tax credits......................................... 2,698,908 3,168,967
Receivables to be recovered from LPG Plants......... 207,626 --
Guarantee deposits.................................. 86,668 63,690
Receivables to be recovered as per Section 41 Law
24,076
(Note 10.c.2)...................................... 22,854 24,191
Miscellaneous advances.............................. 35,276 4,966
Prepaid expenses.................................... 418,985 164,758
Miscellaneous....................................... 185,739 64,995
---------- ----------
Total............................................... 3,656,056 3,491,567
---------- ----------
Non-current
Judicial deposits................................... 5,561,508 5,296,417
Receivables to be recovered from LPG Plants......... 311,785 --
Receivables to be recovered as per Section 41 Law
24,076
(Note 14.c.2)...................................... 892,010 903,598
Prepaid expenses.................................... 63,138 30,845
Restricted availability funds....................... 19,917 --
Miscellaneous....................................... 2,564 15,389
---------- ----------
Total............................................... 6,850,922 6,246,249
---------- ----------
Total other accounts receivable..................... 10,506,978 9,737,816
========== ==========
</TABLE>
I-52
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
d.Suppliers
<TABLE>
<CAPTION>
As of December 31,
----------------------
1999 1998
---------- -----------
(Pesos)
<S> <C> <C>
Suppliers (Schedule G)................................ 5,408,823 3,826,607
Accrued invoices to be received....................... 13,121,117 11,645,293
---------- -----------
Total................................................. 18,529,940 15,471,900
========== ===========
e.Loans
<CAPTION>
As of December 31,
----------------------
1999 1998
---------- -----------
(Pesos)
<S> <C> <C>
Current
Bank debts (Schedule G)............................... 11,700,000 7,700,000
Notes (Schedule G).................................... -- 60,000,000
Letters of credit (Schedule G)........................ 519,615 519,615
Accrued interest (Schedule G)......................... 283,691 250,118
---------- -----------
Total................................................. 12,503,306 68,469,733
---------- -----------
Non-current
Notes (Schedule G).................................... 50,557,000 50,557,000
---------- -----------
Total................................................. 50,557,000 50,557,000
---------- -----------
Total loans........................................... 63,060,306 119,026,733
========== ===========
f.Salaries and social security
<CAPTION>
As of December 31,
----------------------
1999 1998
---------- -----------
(Pesos)
<S> <C> <C>
Social security liabilities payable................... 187,315 211,951
Allowance for vacations............................... 944,148 824,863
Allowance for bonuses................................. 636,020 698,027
Others................................................ 30,985 123,316
---------- -----------
Total................................................. 1,798,468 1,858,157
========== ===========
</TABLE>
I-53
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
g.Taxes payable
<TABLE>
<CAPTION>
As of December 31,
---------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Current
Value added tax...................................... 713,265 592,185
Gross revenue tax.................................... 1,164,799 1,181,161
Income tax........................................... 5,942,686 3,784,120
Provincial taxes..................................... 448 439
Municipal rates...................................... 5,407 9,910
Tax on cost of business indebtedness................. 393,293 37,496
Tax amnesty.......................................... 10,807 16,434
Others............................................... 49,973 --
---------- ----------
Total................................................ 8,280,678 5,621,745
---------- ----------
Non-current
Tax amnesty.......................................... -- 10,807
---------- ----------
Total................................................ -- 10,807
---------- ----------
Total taxes payables................................. 8,280,678 5,632,552
========== ==========
h.Other liabilities
<CAPTION>
As of December 31,
---------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Current
Gas-in-kind payables................................. 2,014,044 2,080,856
Consumer reconnection deposits....................... 166,641 161,689
Reimbursements to be passed through on account of
additional transportation charges................... 860,024 653,678
Other accounts payable............................... 1,493,944 859,983
---------- ----------
Total................................................ 4,534,653 3,756,206
---------- ----------
Non-current
Gas-in-kind payables................................. 16,001,178 8,338,888
Other accounts payable............................... 1,000 1,000
---------- ----------
Total................................................ 16,002,178 8,339,888
---------- ----------
Total other liabilities.............................. 20,536,831 12,096,094
========== ==========
</TABLE>
I-54
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Statement of income
i.Net sales
<TABLE>
<CAPTION>
For the fiscal years
ended
December 31,
------------------------
1999 1998
----------- -----------
(Pesos)
<S> <C> <C>
Gas sales.......................................... 224,823,270 203,196,225
Sales of other items............................... 2,070,903 1,825,996
Direct taxes on sales.............................. (4,389,894) (3,659,937)
----------- -----------
Total.............................................. 222,504,279 201,362,284
=========== ===========
j.Financial and holding gain/(loss)
<CAPTION>
For the fiscal years
ended
December 31,
------------------------
1999 1998
----------- -----------
(Pesos)
<S> <C> <C>
Generated by assets
Interest........................................... 1,683,187 2,418,054
Income from investments............................ 215,290 157,119
Exchange differences............................... -- 24,761
Miscellaneous...................................... 19,279 3,383
----------- -----------
Total.............................................. 1,917,756 2,603,317
----------- -----------
Generated by liabilities
Financial interest................................. (7,586,619) (10,970,077)
Interest on tax debts.............................. (3,628) (1,198,889)
Business indebtedness cost tax..................... (1,221,952) --
Exchange difference................................ (6,666) (1,508)
Miscellaneous...................................... (20,483) (10,581)
----------- -----------
Total.............................................. (8,839,348) (12,181,055)
----------- -----------
Financial and holding (loss), net.................. (6,921,592) (9,577,738)
=========== ===========
</TABLE>
I-55
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
k.Other income and (expenses), net
<TABLE>
<CAPTION>
For the fiscal
years ended
December 31,
--------------------
1999 1998
-------- ----------
(Pesos)
<S> <C> <C>
Other income
Leases................................................. 788,701 715,122
Fees from third parties' collections................... 109 156
Miscellaneous.......................................... 139,228 998,815
-------- ----------
Total.................................................. 928,038 1,714,093
-------- ----------
Other expenses
Provisions for lawsuits (Schedule E)................... (190,510) (1,886,609)
Miscellaneous expenses................................. (452,656) (1,701,776)
-------- ----------
Total.................................................. (643,166) (3,588,385)
-------- ----------
Total other income and (expenses), net................. 284,872 (1,874,292)
======== ==========
</TABLE>
NOTE 5: INTERCOMPANY BALANCES AND OPERATIONS
<TABLE>
<CAPTION>
As of December 31,
-------------------
1999 1998
--------- ---------
(Pesos)
<S> <C> <C>
Receivables
Energia del Sur S.A...................................... 2,560,086 2,704,977
Empresa de Energia de Rio Negro S.A...................... 46,358 29,153
--------- ---------
2,606,444 2,734,130
========= =========
Liabilities
Distribuidora Gesell Gas S.A............................. 29,905 --
Sodigas Pampeana S.A. ................................... 26,110 147,510
Camuzzi Gas Pampeana S.A................................. 433,653 732,219
Camuzzi Argentina S.A.................................... 986,396 864,796
Sempra Energy International Chile Holdings I.B.V......... 50,000 25,000
CNG...................................................... 50,000 25,000
--------- ---------
1,576,064 1,794,525
========= =========
</TABLE>
I-56
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
<TABLE>
<CAPTION>
For the fiscal years
ended
December 31,
----------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Income/(loss) accounts
Camuzzi Gas Pampeana S.A.
Gas transportation................................. 8,428 --
Propane gas purchases(*)........................... (1,078,645) (204,325)
Administrative and personnel services(*)........... (3,458,401) (3,304,509)
Assistance service for natural gas transportation.. (2,540,571) --
Sodigas Pampeana S.A.
Personnel services................................. (206,030) (147,510)
Expenses reimbursement............................. (99,796) --
Financial interest................................. (1,518) --
Camuzzi Argentina S.A.
Technical assistance and professional fees......... (3,187,728) (2,777,147)
Maintenance service of computer systems............ (52,527) (414,390)
Administrative expenses recovery(*)................ 578 3,560
Expenses reimbursement............................. (50,000) (50,000)
Work inspection service fees(*).................... -- (58,380)
Loma Negra C.I.A.S.A.
Gas sales(1)....................................... -- 315,123
Energia del Sur S.A.
Gas sales.......................................... 9,288,517 9,828,542
Empresa de Energia de Rio Negro S.A.
Gas sales(*)....................................... 559,482 306,016
Purchase of electricity(*)......................... (39,808) (34,996)
General expenses(*)................................ (6,000) (7,500)
Sempra Energy International Chile Holdings I.B.V.
Expenses reimbursement............................. (25,000) (25,000)
CNG
Expenses reimbursement............................. (25,000) (25,000)
Distribuidora Gesell Gas S.A.
Personnel and administrative services.............. 2,134 --
Other Operations
Camuzzi Argentina S.A.
Capitalized fees paid on account of work inspection
services (*)...................................... -- 410,164
Software purchase(*)............................... -- 59,547
Distribuidora Gesell Gas S.A.
Storage material sale(*)........................... 325 --
Regulators purchase(*)............................. 32,364 --
Camuzzi Gas Pampeana S.A.
Miscellaneous...................................... 36,890 127,222
</TABLE>
- --------
(*) Corresponds to operations pending approval by the Board of Directors.
(1) On March 26, 1998, Loma Negra C.I.A.S.A. sold its interest in Sodigas Sur
S.A.
I-57
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Explanatory note:
The Subsidiary Company, together with Camuzzi Gas Pampeana S.A. is currently
involved in a dispute with Camuzzi Argentina S.A., in regard to the ownership
of the invoicing and collection system (AG system) and others. As of the date
hereof, the parties are negotiating a resolution to the dispute. The parties
have agreed that if they cannot settle the dispute, the dispute shall be
submitted to an arbitrator for resolution.
In the opinion of the Subsidiary Company and its legal counsel, an adverse
decision in relation to the aforementioned dispute is considered improbable.
I-58
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 6: MANDATORY INVESTMENTS OF THE SUBSIDIARY COMPANY
Chapter IV of the License states that the Subsidiary Company, Camuzzi Gas
del Sur S.A., must undertake a five-year plan from 1993 to 1997, which
includes investments in network pipelines, services, protection against rust
and corrosion, communications equipment and SCADA (centralized telemeasurement
and control equipment system).
The amounts of the investments, as set by the License for each year, are as
follows:
<TABLE>
<CAPTION>
Year U.S.$
---- ----------
<S> <C>
1993.............................. 2,704,000
1994.............................. 2,704,000
1995.............................. 2,150,000
1996.............................. 1,925,000
1997.............................. 1,925,000
----------
Total............................. 11,408,000
==========
</TABLE>
Furthermore, the Licensee has fulfilled in due time and manner the mandatory
investments for 1993, 1994, 1995 and 1996, and was notified of such
fulfillment by ENARGAS following an operating audit of such investments.
Mandatory investments for the year 1997 are pending approval by the Regulatory
Authority.
NOTE 7: ISSUANCE OF NOTES BY THE SUBSIDIARY COMPANY
On December 11, 1996, together with Camuzzi Gas Pampeana S.A., Camuzzi Gas
del Sur S.A. issued Notes not convertible into shares under a Medium-Term-Note
Program which was approved by Certificate No. 136 of the CNV dated December 6,
1996.
Such issue was approved by the Board of Directors of the Licensee on
November 12, 1996; the main purpose of this issue was to provide Camuzzi Gas
del Sur S.A. with an important flow of funds in order to (i) refinance Series
B Notes for an amount of U.S.$90,000,000 co-issued between Camuzzi Gas
Pampeana S.A. and Camuzzi Gas del Sur S.A. under a short- and medium-term note
program created by the shareholders at the Shareholders' Meeting dated October
25, 1993; (ii) develop its investment plans; (iii) pay up working capital and
(iv) refinance other liabilities.
The conditions for the issuance are as follows:
. Aggregate principal amount: U.S.$130,000,000
. Percentage corresponding to Camuzzi Gas del Sur S.A.: 38.89%
. Interest rate: 9 1/4%, payable semiannually in arrears.
. Price: 99.80%
. Maturity of principal: December 15, 2001.
The aforementioned program was created under a joint issuance with Camuzzi
Gas Pampeana S.A., and the two companies will be jointly and severally liable
for the payment of interest and principal.
On May 9, 1997, the issued Notes were registered before the United States
Securities and Exchange Commission (SEC).
I-59
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The main restrictions under the offering circular for the issuance of Notes
are the following:
(a) Limitations on Liens: Neither of the Issuers shall, nor shall either
of the Issuers permit any of their respective Subsidiaries to, incur,
assume or suffer the existence of, any Lien upon its property, assets or
revenues, whether now owned or hereinafter acquired, securing any
indebtedness of any other person, unless the Notes are equally and ratably
secured by such liens, except for:
(i) Liens existing on the Issue Date of the Notes;
(ii) Liens for taxes or other governmental charges not yet due or
which are being contested in good faith by appropriate proceedings;
provided that adequate reserves with respect thereto are maintained on
the books of such Issuer or such Subsidiary Company, as the case may
be, in conformity with Argentine professional accounting standards;
(iii) Liens on all or part of any property, assets (including,
without limitation, equity interests) or revenues to secure
indebtedness incurred solely for purposes of financing the acquisition,
construction or installation thereof incurred concurrently with or
within 120 days after the completion of such acquisition, construction
or installation, or liens on any property, assets (including, without
limitation, equity interests) or revenues existing on the date of the
acquisition thereof;
(iv) Liens arising in the ordinary course of business which do not
secure indebtedness and which (A) are not in effect for a period of
more than 60 days, (B) are being contested in good faith by appropriate
proceedings, which have the effect of preventing the forfeiture or sale
of the property or assets subject to any such lien, or (C) secure an
obligation of less than U.S.$1,000,000;
(v) Any attachment or judgment lien, unless (A) within 60 days after
the entry thereof, its discharge has not been filed or execution
thereof stayed pending appeal, (B) shall not have been discharged
within 60 days after the expiration of any such stay or (C) is for an
amount less than U.S.$1,000,000;
(vi) Liens created or deposits made to secure the performance of
bids, trade contracts, leases, statutory obligations, surety and appeal
bonds and other obligations of a like nature incurred in the ordinary
course of business;
(vii) Any liens imposed by operation of mandatory provisions of
applicable law that do not materially affect the shareholders' equity
Issuer's ability to perform its respective obligations under the Notes
or Indenture;
(viii) Liens other than those described in the foregoing clauses (i)
through (vii) upon the property, assets or revenues of either or both
of the Issuers or any of their respective Subsidiaries securing
indebtedness in an aggregate principal amount not in excess of
U.S.$10,000,000 (or its equivalent in other currencies) at any time
outstanding; and
(ix) Any extension, renewal or replacement, in whole or in part, of
any lien described in the foregoing clauses (i) through (viii),
provided that (A) such extension, renewal or replacement does not
extend to any property other than that originally subject to the liens
being extended, renewed or replaced and (B) the principal amount of the
indebtedness secured by such lien is not increased.
(b) Maintenance of the Net Worth to Consolidated Indebtedness Ratio:
Neither of the Issuers shall permit the ratio of its Net Worth to its
Consolidated Indebtedness to be less than 1 to 1.
(c) Restrictions on Sale and Lease-Back Agreement: Neither of the Issuers
shall, nor shall either of the Issuers permit any Subsidiary Company to,
enter into any Sale and Lease-Back Agreement with respect to any property
unless (i) such agreement involves a lease for a term of no more than three
years by the end of which it is intended that the use of such property by the
lessee shall be discontinued, (ii) such agreement
I-60
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
is between the Issuers, or between either or both of the Issuers and a
Subsidiary Company, or between Subsidiaries, (iii) the Issuers or any
Subsidiary Company would not be entitled to incur indebtedness secured by a
mortgage on the property involved in such agreement at least equal in
amount to the Attributable Debt with respect to such Sale and Lease-Back
Agreement, without equally and ratably securing the Notes, (iv) the
proceeds of such agreement are at least equal to the fair market value
thereof (as determined in good faith by the Board of Directors of each of
the Issuers) and the Issuers apply an amount equal to the greater of the
net proceeds of such sale or the Attributable Debt with respect to such
Sale and Lease-Back Agreement within 180 days of such sale to either (or a
combination of) (A) the amortization (other than any mandatory
amortization, mandatory prepayment or sinking fund payment or by payment at
maturity) of debt for borrowed money of either or both of the Issuers or a
Subsidiary Company (other than debt that is subordinated to the Notes or
debt to either or both of the Issuers or a Subsidiary Company) that matures
more than 12 months after the creation of such debt or (B) the purchase,
construction or development of other comparable property, or (v) such
agreement is entered into within 120 days after the initial acquisition by
such Issuer or the Subsidiary Company, as the case may be, of the property
subject to such agreement.
(d) Merger, Consolidation or Sale of Assets: Neither of the Issuers will
merge into or consolidate with any person or sell, lease, transfer or
otherwise convey or dispose of all or substantially all of its assets,
whether by one transaction or a series of transactions, to any person, (a)
unless, in the case of any such merger or consolidation, (i) such Issuer is
the successor person and (ii) any Noteholder who elects to be guaranteed or
repaid upon such merger or consolidation pursuant to Argentine law is so
guaranteed or repaid by either of the Issuers, or (b) unless, in the case
of any such other transaction, (i) immediately after giving effect to such
transaction or series of transactions, no Event of Default or event which,
after the giving of notice or the lapse of time or both, would constitute
an Event of Default, will have occurred and be continuing, (ii) the
successor person is a corporation that will expressly assume the
obligations of such Issuer under the Notes and the Indenture, and (iii)
such Issuer shall have delivered to the Trustee an officer's certificate
and an opinion of counsel stating that such merger, consolidation, sale,
lease, transfer or other conveyance or disposition complies with the Notes
and that all conditions precedent therein relating to such transaction have
been met. Upon the occurrence of any such merger, consolidation, sale,
lease, transfer or other conveyance or disposition of all or substantially
all of such Issuer's assets, the successor person will succeed to and
become substituted for the Issuer or both Issuers, as the case may be, and
may exercise every right and power of such Issuer with the same effect as
if it had been named in the Notes and the Indenture and, thereafter, such
Issuer will be released from its liability as obligor on the Debt
Securities and under the Indenture.
NOTE 8: RESTRICTIONS ON THE SUBSIDIARY COMPANY'S ASSETS
(a)Assets essential for the rendering of service
Pursuant to the provisions of the terms and conditions for the privatization
of the natural gas distribution services, Camuzzi Gas del Sur S.A. must obtain
ENARGAS' prior consent to sell, assign, encumber or dispose of assets which
are essential for the rendering of service. Failure to secure such consent may
result in the revocation of the License.
(b)Restriction on funds
As set forth in Note 10.c.1 and 10.c.2 as of December 31, 1999, attachments
over the Company's assets included a Ps. 4,509,691 attachment levied by the
Direccion General de Rentas de la Provincia de Rio Negro (the General Revenue
Board of the Province of Rio Negro) and Ps. 787,026 mainly corresponding to
the
I-61
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
attachments levied by several municipalities in connection with the lawsuits
related to municipal taxes on use of the easements (Note 10.b.).
NOTE 9: RECORDABLE ASSETS
As regards the real estate transferred under the Transfer Contract, the
Subsidiary Company has effected the corresponding deeds with the Argentine
General Notary Public, and only isolated and irrelevant cases are pending.
Additionally, the Subsidiary Company completed the transfer of all the
vehicles.
NOTE 10: LEGAL AND TAX MATTERS
a.Income tax
On January 30, 1998, the Subsidiary Company filed an amended tax return to
modify the depreciation of fixed assets transferred to the Subsidiary Company
without consideration. The amended return takes into account a change in the
tax rules governing valuation of networks incorporated by the Subsidiary
Company prior to June 1995, by reference to valuation rules specified in
resolutions of the Ente Nacional Regulador del Gas (ENARGAS) with respect to
the transfer of networks from third parties to the Operating Companies.
The criteria applied by the Subsidiary Company in its amended return was not
acknowledged by the Argentine Tax Authority ("AFIP") and, on July 6, 1999, the
AFIP notified the Subsidiary Company of an assessment for taxes on income
related to gas networks transferred without consideration. The assessment
totalled Ps. 11.1 million in income tax owed, plus Ps. 22.7 million in
interest and fines. On August 11, 1999, the Subsidiary Company filed an appeal
with the Argentine Tax Court.
The Subsidiary Company believes, based on the advice of its legal counsel,
that the filing of the amended return and application of the ENARGAS criteria
for tax purposes should have resolved the assessment, and therefore any
attempt of the AFIP to continue with the case would not be successful.
b.Municipal taxes
Municipal tax regulations generally include a tax on the use of easements.
The imposition of such tax conflicts with federal regulations.
The distribution license grants the Licensee underground rights of way free
of charge. The license authorizes the Licensee to pass through to consumers
any cost increase attributable to a municipal tax levied and ratified by a
court.
Clause 6.1 of the License states: "while the Licensee is in charge of the
service, the Licensee shall have the right to use free of charge any street,
avenue, square, bridge, road and any other public place, including the
subjacent and air spaces, necessary for the installation of facilities for the
licensed service, including communication lines and interconnections with
third parties".
Nonetheless, if a court, pursuant to a final non-appealable judgment,
upholds a provincial or municipal tax levied on the Licensee's underground
right of way, the Licensee may pass through such additional cost to consumers
residing within the jurisdiction in which such tax is applicable. The
Regulatory Entity is required to act in accordance with Clause 9.6.2 of the
License, without any right of claim against the Licensor or Gas del Estado.
I-62
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Furthermore, under the Argentine Budget Law No. 24,624/95 applicable to the
year 1996, in order to be entitled to the subsidies set forth in such law, the
municipal rates for the use of subjacent space have to be abolished as from
January 1, 1996.
The following are the most relevant current disputes related to taxes on
underground rights:
Municipality of Viedma, Province of Rio Negro: This municipality brought a
claim for payment of tax on underground right of way totalling Ps. 246,400,
not including penalties and other assessments. The Court of Appeals upheld a
lower court judgment sustaining the tax. The Subsidiary Company appealed to
the Supreme Court of the Province of Rio Negro, which denied appeal.
Subsequently, the Subsidiary Company filed a recurso extraordinario (request
for reconsideration), which was denied, followed by an appeal to the Federal
Supreme Court of Justice, which motion is currently pending resolution. The
Federal Supreme Court requested the docket from Viedma, indicating its hearing
of the appeal. Deposits with the court to pay judicial taxes in 1996,
totalling Ps. 263,362, plus Ps. 62,720 in interest and legal costs, continue
to be maintained. The Subsidiary Company has established a provision for the
total amount of the claim.
The Federal Supreme Court of Justice reversed the judgment rendered by the
Supreme Court of the Province of Rio Negro. The Federal Supreme Court of
Justice subsequently remanded the case to the Supreme Court of the Province
with an order that the provincial court determine jurisdiction over the matter
and remit the case to the applicable court. On rehearing, the Supreme Court of
the Province granted the Subsidiary Company's request for reconsideration.
In addition, the Municipality has brought an action against the Subsidiary
Company for Ps. 148,148 for taxes (not including interest or penalties) on
underground right of way due for 1995, which Camuzzi Gas del Sur S.A. opposed.
Judgment was entered against the Subsidiary Company and the Subsidiary Company
appealed. The appellate court reaffirmed the lower court decision and the
Subsidiary Company petitioned for reconsideration, which was denied. The
Subsidiary Company petitioned the Supreme Court of Justice of the Province for
review, which has been granted.
The Subsidiary Company reserved Ps. 95,545, which is included under
"Provisions".
Municipality of Neuquen: The amount of the claim is Ps. 66,524, not
including penalties and other expenses. The Municipality appealed the Court of
Appeals' decision on the grounds that it lacked jurisdiction. The Supreme
Court reversed and ordered the case heard on the merits. The Subsidiary
Company petitioned for review of the decision of rehearing, which was denied.
The claimant filed a revised schedule of the Subsidiary Company's debt,
including principal, interest and court fees, which, together with the
original claim totals Ps. 150,746. The claimant's attorneys continue to pursue
collection of the debt through judicial action.
As of December 31, 1999, Ps. 99,774 have been deposited with the court.
The Subsidiary Company has reserved Ps. 120,000, which is included under
"Provisions".
In addition, the Municipality filed another claim for the period April
1996--May 1997 for an amount of Ps. 97,421, not including interest and
penalties.
The claim was answered by certified letter in which the Subsidiary Company
demanded that the Municipality desist from its threatened suspension of
subsidies to satisfy the claim. The Municipality has decided to suspend any
further proceeding until the Supreme Court of Justice of the Province decides
the case of the Subsidiary Company against said Municipality in connection
with taxes imposed on the use of easements.
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<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Municipality of Comodoro Rivadavia: The Municipality has claimed the payment
of taxes on use of easements during the first six months of 1996, which total
Ps. 56,032 (not including taxes and penalties). The claim has been timely
answered by the Subsidiary Company.
Municipality of Zapala: The principal amount of the claim totals Ps. 816,073
corresponding to the periods between 1993, 1994, 1995 and January to November
1996. The Subsidiary Company has filed a motion for reconsidering such claim.
Municipality of Villa Regina: The principal amount of the claim totals Ps.
1,939,343, not including penalties and other expenses. The Subsidiary Company
has filed its response to such claim.
Municipality of Cutral-Co: The Municipality filed a claim for the payment of
Ps. 133,992, in respect of taxes on rights to public space as from January
1993 through October 1996, net of interest and legal costs. The Subsidiary
Company contested the proceeding. The judgment entered by the lower court
rejected the Subsidiary Company's argument and the Subsidiary Company
appealed. The Court of Appeals affirmed the judgment and, consequently, an
extraordinary motion has been filed. The Subsidiary Company reserved Ps.
71,296, which is included under "Provisions".
Municipality of Piedra del Aguila: The amount of the claim totals Ps. 1,900.
The Subsidiary Company filed a motion for reconsidering such claim.
Municipality of Ingeniero Jacobacci: The claim totals Ps. 8,649. The
Subsidiary Company has answered the claim and has reserved 50% of the claim,
which is included under "Provisions".
In the opinion of the Subsidiary Company, except for the lawsuits with the
Municipalities of Viedma, Cutral Co, Neuquen and Ingeniero Jacobacci, for
which reserves have been established, an adverse decision in relation to the
aforementioned claims is unlikely.
c.Gross sales tax
c.1 The Subsidiary Company has received several claims from certain provincial
tax authorities for payment of gross sales taxes on subsidies. As of
December 31, 1999, the maximum estimated amount of gross sales tax
applicable to such subsidies is Ps. 12 million, assuming that all
provinces involved elect to pursue their claim.
The Subsidiary Company believes, based on the advice of its legal counsel,
that claims for gross sales tax are without merit, as the subsidy is granted
by the Federal Government.
The claims for gross sales tax received as of the date hereof are:
Province of Chubut: The Subsidiary Company filed a Motion for
Reconsideration with the General Revenue Board of the Province of Chubut in
response to the Board's challenge of gross sales tax returns filed for 1993,
1994, 1995 through March 1996, which assessed past taxes of Ps. 1,509,291, not
including interest or penalties.
On April 20, 1999, the Subsidiary Company was notified of the General
Revenue Board's rejection of the Motion for Reconsideration.
On June 1, 1999, the Subsidiary Company filed a Motion to Quash and Appeal
in accordance with the Provincial Tax Code.
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<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
In addition, the Subsidiary Company has submitted its response to the
General Revenue Board's challenge of gross sales tax returns filed for 1993,
1994, 1995 through March 1996, which assessed past taxes of Ps. 265,000, not
including interest or penalties. The claim arises from a different
interpretation of criteria related to the valuation of income from networks
transferred without consideration.
The Subsidiary Company has also moved to quash service of a claim for Ps.
28,892 arising out of differences in the determination of the gross sales tax
returns for the period January-March 1993. As of the date hereof, the amount
claimed remains deposited with the Court.
Province of Tierra del Fuego: The Subsidiary Company was notified by the
Provincial General Revenue Board of the rejecting of the Subsidiary Company's
Motion for Reconsideration. The notice requested the payment of approximately
Ps. 962,748, in respect of principal, of which approximately Ps. 596,000
correspond to gross sales tax on subsidies for the period from 1993 to June
1996. In addition, the Ministry of Economy and Public Works and Services has
denied the appeal of the Board's decision, thereby enabling the Subsidiary
Company to file a claim with the courts in connection with this matter. On
December 5, 1997, the Camuzzi Gas del Sur S.A. filed a petition with the
governor of the Province of Tierra del Fuego, which was rejected.
As a result, the Subsidiary Company filed a claim (recurso contencioso
administrativo) in the amount of Ps. 897,608, of which Ps. 595,919 correspond
to the principal amount of the tax and Ps. 301,689, to interest thereon. The
Subsidiary Company was required to pay such amounts to pursue its claim and
seek reimbursement.
Furthermore, on April 18, 1997, a fine of Ps. 481,374 was imposed on the
Subsidiary Company as a penalty for the non-payment of the gross sales tax.
The Subsidiary Company filed a motion for reconsideration which was rejected
and an appeal was filed.
Province of Santa Cruz: The final audit has been submitted assessing Ps.
1,209,457 for gross sales tax on subsidies, not including interest and
penalties.
On September 25, 1998, the Subsidiary Company filed a Motion for
Reconsideration of Ruling No. 860/98 issued to enforce the audit.
Province of Neuquen: The General Revenue Board of the Province of Neuquen
filed a record to settle accounts claiming differences in favor of the
government for Ps. 1,078,484, for the period January 1993--September 1996, not
including interests and penalties. The Subsidiary Company has duly filed its
response to such claim.
Province of Rio Negro: Camuzzi Gas del Sur has filed a response to the
notices of the commencement of administrative proceedings brought by the
General Revenue Board of the Province of Rio Negro challenging the gross sales
tax returns of the Subsidiary Company for the years 1993 to 1995 and through
August 1996, claiming differences in favor of the State amounting to Ps.
2,691,781, of which approximately Ps. 1,091,000 correspond to the claim
related to the tax on income deriving from subsidies, not including interest
or penalties.
As regards the period from January 1993 to February 1996, a tax collection
proceeding was filed against the Subsidiary Company for Ps. 3,250,539 for the
principal outstanding, recalculated through March 31, 1997, which includes the
tax owed due to a difference in the tax basis described in paragraph c.2.
below. The Subsidiary Company's response included a motion to join the State
as a third-party to the proceeding, which was rejected by the lower court. The
Subsidiary Company appealed the decision. The lower court entered a judgment
in favor of the revenue board and levied an attachment of up to Ps. 4,509,691
over the Subsidiary Company's assets in relation to the claim for gross sales
tax on subsidies and the difference in the tax basis described in paragraph
c.2. below and interest and court fees.
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<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The Subsidiary Company unsuccessfully appealed to the Court of Appeals of
Viedma. In response, the Subsidiary Company filed an appeal for nullification
with the Supreme Court of the Province. The Province withdrew from the scope
of the attachment an amount equal to the tax (excluding interest, costs and
penalties), despite the Subsidiary Company's opposition.
The court denied the appeal for nullification and, consequently the
Subsidiary Company filed an appeal for the rejection of the nullification
before the Supreme Court of the Province. Then, an extraordinary appeal was
filed. Such appeal was rejected and, the Subsidiary Company subsequently filed
an appeal for nullification with the Argentine Supreme Court of Justice.
The Subsidiary Company is making deals in order to obtain the acknowledgment
by the Province as regards the non-assessability of subsidies and the issue of
a definitive decision as regards the position of the province in connection
with the tax basis, in order to pass-trough the tariffs for all the claimed
period (not only as from January 1997) and to make a debts set-off, on account
of the obtention of a favorable decision from the arbitral court as regards
the unpaid subsidies balances by the province.
On November 12, 1998, the General Revenue Board of the Province of Rio Negro
notified the Subsidiary Company of Resolution No. 093/98, which establishes a
fine of Ps. 2,060,205, as a penalty for the non-payment of the gross sales tax
on subsidies and sets forth the method for calculating the tax basis. The
Subsidiary Company filed a Motion for Reconsideration which was denied on
February 16, 1999. On March 4, 1999, the Subsidiary Company proceeded to file
an administrative appeal against such resolution.
For the periods March 1996 to June 1996 and July 1996 to August 1996, the
Subsidiary Company also filed motions to reconsider the resolutions entered by
the General Revenue Board of the Province of Rio Negro. On January 6, 1999,
the Subsidiary Company was notified of resolution 1355/98, which rejected the
Subsidiary Company's motion to reconsider filed with respect to Resolution No.
007/98, which set forth an amount of Ps. 313,916 due in connection with the
gross sales tax on subsidies and calculation of the tax basis for the period
from March to June 1996, of which approximately Ps. 116,000 corresponds to the
claim for gross sales tax on subsidies. Further, the Subsidiary Company was
notified of Resolution No. 1356/98, which, as in the prior resolution, sought
Ps. 317,660 for the period from July to August 1996, of which approximately
Ps. 152,000 corresponds to the claim for gross sales tax on subsidies. The
Subsidiary Company has filed administrative appeals of such resolution.
On November 17, 1998, the General Revenue Board of the Province of Rio Negro
notified the Subsidiary Company of Resolution No. 090/98, requiring the
payment of Ps. 890,997 in respect of gross sales tax on subsidies for the
period from September 1996 to December 1997 and for the tax basis for the
period from September 1996 to December 1996, plus a fine of Ps. 1,251,580, for
the non-payment of such amounts; the Subsidiary Company has filed an appeal
for reconsideration of such resolution. Such reconsideration was rejected, and
then, an administrative appeal was filed.
Since such appeal was rejected, the Subsidiary Company filed an appeal for
nullification in relation to the rejected remedy before Civil Court No. 1,
Clerk's Office No. 2 of the city of Viedma, as evidenced in file No. 159,870-
E-97.
c.2 Camuzzi Gas del Sur S.A. has received several tax assessments issued by
the tax authorities of the Province of Buenos Aires and the Province of Rio
Negro related to differences in the determination of the tax basis of gross
sales tax. Such difference arises mainly from the tax authorities' claim
that the tax basis for computing gross sales taxes is based on the entire
invoiced amount, although a portion of such amount represents the pass
through of the cost of supply and transportation of natural gas. The
Subsidiary Company contends that the tax basis is the difference between
the price at which gas is purchased and sold.
I-66
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Below, there is a description of the situation with each of the provinces
involved:
Province of Buenos Aires: The Province of Buenos Aires Revenue Board (the
"DPRPBA") has challenged the Subsidiary Company's gross sales tax returns, and
has assessed claims of Ps. 27,027 and Ps. 16,003 for the periods from December
1992 through February 1995, and from March 1995 to June 1996, respectively,
not including fines and accessory charges.
On November 25, 1996, the General Revenue Board issued a final opinion
stating that, in its opinion the Subsidiary Company must pay gross sales tax
on its total sales and not on the distribution margin. On December 13, 1996,
the General Revenue Board further explained some points of the opinion
indicating that, according to such body's interpretation, the change on the
tax criterion had derived from the fact that as from the takeover of the
natural gas distribution service by the Licensees, the regulations set forth
under the Tax Code (Section 136, Subsection (e) and Section 141, Subsection
(a)) are not valid, since the Government, upon withdrawing from the business,
no longer regulates the official selling prices.
Although the Subsidiary Company's legal counsel advised the Subsidiary
Company of the soundness of its position, the final opinion issued by the
General Revenue Board, which explicitly adopts the tax criteria adopted by the
Province of Buenos Aires, substantially changed the tax burden of the
Licensee. Therefore, because Camuzzi Gas del Sur S.A. is not legally required
to participate in a judicial proceeding, the results of which cannot be
assured in spite of its sound defense, on December 19, 1996, the Subsidiary
Company availed itself of a tax amnesty program pursuant to the provisions of
the Provincial Law 11,808 (Official Gazette July 10, 1996).
The foregoing implementation of new criteria altered the Licensee's tax
burden generating a cost fluctuation and clearly constituting a "tax change".
This event was considered a non-recurring tariff adjustment pursuant to clause
9.6.2. of the Distribution License and by law 24,076.
Through Resolution No. 544 dated November 17, 1997 and pursuant to
applicable regulations, ENARGAS authorized the pass-through to the tariffs of
the tax liabilities incurred as a result of the legal changes in the payment
of the tax in accordance with the methodology set forth by such Regulatory
Authority in its note No. 108 dated January 12, 1998. The decision on the
pass-through to the tariffs applicable to sub-distributors and GNC stations
remains pending, although such decision is immaterial.
As mentioned above, because a "change in tax rules" generates a right for
the Subsidiary Company to pass through the added cost to the tariffs as
envisaged in clause 9.6.2. of the Distribution License and in Law No. 24,076,
Camuzzi Gas del Sur S.A. accounted for the amounts recognized as tax payable,
together with the payments made for the tax basis of all income from gas
sales, with a balancing entry in the form of a receivable to be collected from
the users in future billings.
As of December 31, 1999, the receivable to be recovered (which includes the
amounts accrued during the first semester of 1998) totalled Ps. 95,276 of
which, Ps. 22,854 were recorded under "Other Current Accounts Receivable" and
Ps. 72,422 under "Other Non-Current Accounts Receivable".
Province of Rio Negro: Provincial Law No. 3069, promulgated by Decree No.
2198/96 dated December 30, 1996, amended the Tax Code by abrogating paragraph
(d) of section 12 of Law No. 1301. According to the interpretation of the
Subsidiary Company and its legal counsel, the tax basis is the difference
between the purchase and sale prices.
Consequently, on April 14, 1998, the Subsidiary Company paid Ps. 682,364 in
respect of the tax difference derived from the change in the tax basis for
January 1997-February 1998 period.
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<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
As mentioned above, because a "change in tax rules" generates a right for
the Subsidiary Company to pass through the added cost to the tariffs as
envisaged in clause 9.6.2. of the Distribution License and in Law No. 24,076,
Camuzzi Gas del Sur S.A. accounted for the amounts recognized as a tax
increase for the period January 1997 to February 1998, as well as the
increased tax accrued thereafter, for the calculation of the tax basis of all
income from gas sales, with an offsetting entry in the form of a receivable to
be collected from the users in future billings.
As of December 31, 1999, the receivables to be recovered totalled Ps.
819,588, and have been recorded under "Other Non-Current Accounts Receivable".
As mentioned in paragraph c.1. above, the provincial tax authority has filed
a claim for Ps. 2,691,781, including the gross sales tax on subsidies, and
differences in the tax basis. The amount claimed for differences in the tax
basis totals approximately Ps. 1,601,000 and corresponds to the period from
January 1993 through August 1996, prior to the amendment of the Tax Code.
As set forth in paragraph c.1 above, the amounts related to this claim are
subject to an attachment levied by the Provincial Revenue Board.
With respect to the periods from March 1996 to June 1996 and July 1996 to
August 1996, the amounts of the claims for gross sales tax predicated on a
different tax basis are approximately Ps. 198,000 and Ps. 165,000,
respectively, and the comments included in paragraph c.1 for these periods are
applicable hereto.
The same comments included in paragraph c.1 above are applicable for the
period from September 1996 to December 1997, the amount of the claim for gross
sales tax predicated on a different tax basis are approximately Ps. 241,000
for the period from September 1996 to December 1996 (see first and second
paragraphs of this note).
To pass-through this higher cost consistent with its rights, the Subsidiary
Company has undertaken steps to obtain the relevant tariff adjustment from the
Regulatory Authority.
The Subsidiary Company believes, based on the advice of its legal counsel,
that a decision not to pass through the higher cost attributable to the gross
sales tax is unlikely.
c.3 The Subsidiary Company accepted the claim of the Province of Tierra del
Fuego with respect to differences in the determination of the tax basis
corresponding to the tax on sales to industrial users ("0" rate),
entailing the payment of the Ps. 864,213 in taxes, plus Ps. 233,543 in
interest, totalling Ps. 1,097,756.
The Subsidiary Company has reserved Ps. 1,097,756, which includes all
applicable principal and interest.
d.Stamp tax
As regards stamp tax the situation is as follows:
d.1Province of Rio Negro:
d.1.1 The Subsidiary Company has filed for declaratory relief and a
preliminary injunction with the Federal Judge in response to the
assessment of stamp tax under a Decree of the Executive Branch, whose
amount has yet to be determined.
d.1.2 The Province of Rio Negro's Revenue Board served Transportadora de
Gas del Sur S.A. with a notice claiming stamp tax on natural gas
transport agreements entered into with the Subsidiary Company.
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<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
As of the date of these financial statements, the Subsidiary Company has not
been served with notice of any claim from the Province of Rio Negro's Revenue
Board. Nonetheless, in the event of a claim being filed by the Tax Authority
and an adverse judgement, Camuzzi Gas del Sur S.A. would pay fifty per cent of
the tax applicable to the operations performed subsequent to the takeover,
which would amount to Ps. 7.8 million. Furthermore, Transportadora de Gas del
Sur S.A. could seek confirmation from the Subsidiary Company, if the
transporter were obliged to pay the full tax amount claimed. Furthermore,
Transportadora de Gas del Sur S.A. has received a claim for the payment of the
stamp tax on agreements transferred by Gas del Estado, for Ps. 0.3 million,
where the Argentine Government appears as the only responsible party.
d.1.3 On December 3, 1999, the Province of Rio Negro's Revenue Board served
notice of the administrative proceedings, assessing a debt in
relation to stamp tax on offers to customers to purchase gas for an
aggregate amount of Ps. 192,551; of such amount, Ps. 102,026 are
payable by Camuzzi Gas del Sur S.A.
On December 28, 1999, the Subsidiary Company filed the applicable defense
in relation to the action brought.
In the opinion of the Subsidiary Company and its legal counsel,
considering the manner in which the agreements were documented, in relation
to paragraphs d.1.2. and d.1.3. above, the Subsidiary Company has sound
grounds for presenting a defense at court.
d.2 Province of Tierra del Fuego: The Subsidiary Company filed an answer to
the Previous Notice made by the Revenue Board of the Province of Tierra
del Fuego, Antartida and South Atlantic Islands, claiming the assessment
of stamp tax under a Decree of the provincial Executive Branch, amounting
to Ps. 140,000, not including interest or penalties.
d.3Province of Neuquen:
d.3.1 The Revenue Board of the Province of Neuquen has computed a stamp tax
on the gas purchase agreements entered into jointly with Camuzzi Gas
Pampeana S.A. for an amount of Ps. 1,656,205. Subsequently, the
Revenue Board of the Province of Neuquen amended its computation to
Ps. 10,400,134. The notice was answered and the resolution was
suspended as a result of the moratorium decrees. Further, statements
were filed with the Argentine Ministry of Economy asking for an
opinion in connection with such matter. The province issued Special
Decree No. 3534 allowing the regulated companies to avail themselves
to a moratorium until November 6, 1998 subsequently extended to
January 11, 1999.
On January 7, 1999, the ENARGAS submitted a report to the Argentine
Ministry of Economy, expressing that "the taxes claimed by Neuquen, shall
unfailingly lead to a tariff increase, with a serious damage to the users".
The deadline expired on January 11, 1999 and has not been further
extended. The Licensee Subsidiary Company is waiting for an opinion from
the Ministry of Economy as regards this issue.
As of December 31, 1999, the Subsidiary Company has reserved Ps. 597,548
in such regard.
On September 24, 1999, the Subsidiary Company was served a notice
informing it that the audit performed by independent public accountants
engaged by the Province of Neuquen's Revenue Board had been closed. The
assessment of the debt for stamp tax on natural gas purchase agreements
entered into jointly with Camuzzi Gas Pampeana S.A. amounted to Ps.
5,017,021, not including penalties or other charges. On January 18, 2000,
the Subsidiary Company was notified of the amendment of the initial amount,
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<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
which, as amended, totalled Ps. 5,028,358, of which Ps. 4,155,331 are
included in the original notice. The aggregate claim for both companies
amounts to Ps. 11,273,161. As of the date hereof, the Subsidiary Company
has not received further notice from the Revenue Board.
d.3.2 Additionally, the Revenue Board has filed claims totalling Ps.
1,827,518 for the payment of stamp tax on the transfer of assets
affected to the service. This claim was filed jointly against Gas del
Estado and the Subsidiary Company. Camuzzi Gas del Sur S.A. has filed
its response.
d.3.3 On December 15, 1999, the Revenue Board notified the final assessment
of the stamp tax for an amount of Ps. 719,622, derived from the gas
transport agreements entered into with Transportadora de Gas del Sur
S.A., before privatization, and when Gas del Estado S.E. was the only
shareholder of the Subsidiary Company.
The Subsidiary Company has notified the Direccion Nacional de
Normalizacion Patrimonial, the Liquidation Entities Coordinator and Gas del
Estado S.E. that, in accordance with the provisions of the Transfer
Agreement, any national, provincial or municipal stamp tax assessed on
agreements related thereto shall be borne by Gas del Estado S.E. or the
Argentine Government.
On December 29, 1999, the Subsidiary Company filed a Motion for
Reconsideration against the Revenue Board determination.
Also, the Subsidiary Company believes that these agreements were not
subject to provincial stamp tax due to the fact that the parties who
entered into said agreements were Argentine state-owned companies, and are
therefore exempted from such tax. Even though such agreements were subject
to stamp tax, the Subsidiary Company considers that Gas del Estado S.E.
would be the party liable for the payment of this tax, in accordance with
the provisions of the Transfer Agreement.
The Subsidiary Company believes, based on the advice of its legal
counsel, that, other than as described in paragraph d.3.1, it is unlikely
that such claims will be resolved unfavorably for the Subsidiary Company.
d.4Province of Santa Cruz:
d.4.1. On December 29, 1999, the Revenue Board of the Province of Santa
Cruz served a notice of administrative proceedings, assessing a debt
in relation to the stamp tax on gas purchase agreements entered into
jointly with Camuzzi Gas Pampeana S.A. for an amount of Ps.
1,466,120 of which Ps. 7,512,904 are payable by Camuzzi Gas del Sur
S.A.
On January 20, 2000, the Subsidiary Company filed its defense in relation
to the notice received.
The Subsidiary Company contends that the stamp tax does not apply to gas
purchase agreements, which it believes are not instruments subject to the
tax.
d.4.2. The Revenue Board of the Province of Santa Cruz has notified
Transportadora Gas del Sur S.A. of a claim for a stamp tax on
natural gas transport agreements entered into with the Subsidiary
Company.
As of the date hereof, the Subsidiary Company has received no notice in
relation thereto from the Revenue Board of the Province of Santa Cruz.
However, in the event a claim filed by the Revenue Board were decided
against the Subsidiary Company, Camuzzi Gas del Sur S.A. would have to pay
50% of the tax corresponding to the operations conducted after the
privatization, which tax would amount to Ps. 0.9 million. In addition,
Transportadora de Gas del Sur S.A. could seek contribution from the
Subsidiary Company, if it were obliged to pay the claimed tax in full.
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<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The Subsidiary Company believes, based on the advice of its legal counsel,
that it has a strong defense to the matters described in paragraphs d.4.1 and
d.4.2. above in light of the manner in which the agreements were documented.
e.Regulatory aspects
On March 24, 1998, the ENARGAS, through resolution 588/98, requested Camuzzi
Gas del Sur S.A. to reimburse approximately Ps. 4.5 million to the users for
"non-compliance with the gas quality standards set forth in the License and
Resolution 113/94, under the terms of Chapter X of the License", for the
period from January 1996 to March 1997. The Regulatory Authority's methods for
determining the amount of the claim were objected by the Subsidiary Company
with the Secretariat of Energy.
Furthermore, on January 7, 1999, the Secretariat of Energy issued a
preliminary technical ruling pursuant to which it interpreted that the
requirements of ENARGAS apply to the period from September 1996 to March 1997.
In accordance with the foregoing, the Subsidiary Company reserved
approximately Ps. 0.9 million, calculated in accordance with the methodology
set forth in such preliminary ruling. It should be highlighted that the amount
provisioned has been reimbursed to users, although reimbursement of the
portion corresponding to the subsidy is still pending. In October 1999, the
Subsidiary Company filed an affidavit with the Province, whose amount would be
deducted from the subsidy payable to the Subsidiary Company.
As of the date hereof, the issue of the final judgment by such entity is
pending.
f.Others
On August 8, 1998, the Ministry of Economy, Works and Public Services filed
a claim for Ps. 656,485 for differences in amounts collected on overdue
invoices. Schedule XXI of the Share Transfer Agreement provides that Camuzzi
Gas del Sur S.A. is responsible for collecting such amounts for Gas del Estado
S.E. The Subsidiary Company duly set up an allowance of Ps. 175,000 to satisfy
the claim. The Subsidiary Company considers such amount to be sufficient.
NOTE 11: SUBSIDIARY'S ESSENTIAL ASSETS INVENTORY
In compliance with ENARGAS' Resolution No. 60, the Subsidiary Company made
an inventory of its essential assets as of December 31, 1997. Such inventory
was certified by an independent expert specialized in that field on October
26, 1998.
As a result of said work finished during 1998, differences were detected
between the physical inventory value and the book value of the assets which
reduced the assets previously recorded in an amount of approximately Ps. 5.5
million.
Due to the fact that the Subsidiary Company maintains a voluntary reserve
consisting of gas distribution networks financed by third parties and
transferred free of charge, the Subsidiary Company offset the aforementioned
difference against the voluntary reserve.
I-71
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 12: CONSTRUCTION FUNDED BY THIRD PARTIES
Constructions funded by third parties, incorporated into the Subsidiary
Company's network during the fiscal years ended December 31, 1999 and 1998,
were the following:
<TABLE>
<CAPTION>
For the fiscal
years ended
December 31,
-------------------
1999 1998
--------- ---------
(Pesos)
<S> <C> <C>
. For valuable consideration............................. 1,671,788 3,324,866
</TABLE>
On February 8, 1996, ENARGAS issued Resolution No. 269/96, which sets forth
that regarding constructions fully or partially funded by third party users,
such users should receive a discount based on the difference between the value
of the construction and the amount actually discounted for, if any.
By means of ENARGAS' Resolution No. 389, dated October 23, 1996, the
Regulatory Authority established the amounts to be recognized to the users
mentioned above, according to the business value determined by such entity.
In compliance with this resolution, as regards networks transferred without
monetary consideration, during the 1996 fiscal year, the Subsidiary Company
recorded a liability in an amount estimated as the payment price in cubic
meters of gas, which was debited from a reserve set up in previous periods for
this purpose. In the case of those projects in which the payments made by the
Licensee differed from those set forth by the Regulatory Authority, the
liability corresponding to such difference was accounted for. Both liabilities
were valued at current tariffs.
Furthermore, on February 3, 1997, by means of Resolution 422 the Regulatory
Authority set the charges that the Gas Distribution Companies shall have to
recognize to third party users financing network extension works; such amount
results from the business value set forth by ENARGAS. This Resolution was only
applicable to the works transferred to the Licensee Companies during the year
1996.
As regards works to be financed by future customers, which may be commenced
and transferred to the network of the licensees during the 1997 fiscal year,
the Regulatory Authority issued Rule No. 587, dated March 16, 1998, whereby it
established the consideration to be given to the users in accordance with the
methodological guidelines included therein.
As of the date hereof, the Subsidiary Company is taking the necessary steps
to implement the reimbursement of the cubic meters duly suggested by the
ENARGAS.
Subsequently, the ENARGAS, through Order No. 4,688 dated December 30, 1997,
modified the criterion previously established by its Resolutions No. 389/96
and 422/96 and Order No. 1877/96, in connection with the obligation of the
Distribution Service Licensees to grant provisions to third party users who
totally or partially paid undertakings related to new networks or extensions
thereof.
This amendment consists, basically, in the replacement of the obligation of
such users to file the documentation evidencing their contribution, as called
for by the above-mentioned resolutions, by the execution of an affidavit in
relation thereof.
The above-mentioned order of ENARGAS has been appealed by the Subsidiary
Company on the grounds that it affects its legitimate rights. However, the
Subsidiary Company undertook a study to determine its liability in connection
with the compliance with such order. Such study revealed that if the existing
users and the potential
I-72
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
users which have transferred assets without monetary compensation are entitled
to the discounts set forth in the ENARGAS' resolutions, the maximum increase
in the liabilities would amount to Ps. 7.6 million. This amount has been
reflected in these Financial Statements as a withdrawal from the voluntary
reserve. In addition, it should be noted that such liability may be
substantially lesser due to the fact that such liabilities were calculated
considering that all the users would request such discounts and the addition
of users to such works are complied. Once the term fixed by the regulatory
authority for the granting of discounts is finished, an analysis of the actual
value of each project shall be made upon the basis of the users really added
and of the value to the business, increasing or decreasing the value of the
liability as applicable.
As regards the networks transferred for a consideration, the liability shall
be fixed at the amounts agreed to by the third party transferors.
NOTE 13: FIVE-YEAR TARIFF REVIEW
On December 31, 1997, the Ente Nacional Regulador del Gas issued Resolution
No. 468 whereby it approved the five-year tariff review and established new
values for the K and X factors corresponding to each component of the tariff.
Such values will be applicable during the 1998-2002 five-year period.
The incorporation of these two factors (with K representing the Investment
factor and X representing the Efficiency factor) has been contemplated within
the existing tariff scheme. Such factors will be added and subtracted
respectively from the distribution margin and, therefore, will affect the
final tariff for the next five-year period.
During 1997, the Subsidiary Company submitted its proposed investments for
the determination of the K factor, which, once reviewed by the ENARGAS, were
approved at the end of October 1997 for the Buenos Aires Sur, Tierra del
Fuego, and Santa Cruz subareas. Likewise, and due to the particularities of
the area, it has been decided the creation of the Cordilleran subarea with a K
factor related to support works in the respective pipeline.
ENARGAS defined an efficiency factor (X) of 4.6 % for Camuzzi Gas del Sur S.A.
as from January 1, 1998, which considers the improvements to be achieved in
that respect in the next five-year period, thus maintaining the fair and
reasonable profitability set forth by the Gas Law.
NOTE 14: INFORMATION SYSTEMS ADAPTATION PROCESS (NOT INCLUDED IN THE AUDITORS'
REPORT)
The Subsidiary Company began a process to update its information systems and
related technologies, which has been given priority by the Board of Directors.
The work methodology adopted assigns different teams to make the
administrative, invoicing, human resources, hardware and software systems year
2000 compliant. Upon commencement of the year 2000, no failures have been
detected in the administrative, invoicing, human resources, hardware and
software systems in relation to the Y2K. (See Note 16)
I-73
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED FIXED ASSETS
For the Fiscal Years Ended December 31, 1999 and 1998
Schedule A
<TABLE>
<CAPTION>
DEPRECIATION
--------------------------------------------
Accumulated
Value as of Value as as of Accumulated
Principal beginning of end of beginning as of end
account of year Additions Transfers Write-offs period of year Amount(1) Write-offs of period
--------- ----------- ---------- ---------- ---------- ----------- ----------- --------- ---------- -----------
(Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Land............ 1,551,940 -- 160,388 -- 1,712,328 -- -- -- --
Condominiums.... 83,553 -- 4,097,420 (10,373) 4,170,600 39,258 85,598 -- 124,856
Buildings....... 11,029,849 2,047 (3,877,005) (1,212) 7,153,679 1,754,819 250,542 -- 2,005,361
Facilities...... 8,254,800 5,498 442,685 -- 8,702,983 1,359,693 309,888 -- 1,669,581
Gas pipelines... 81,373,380 -- (5,236,153) -- 76,137,227 20,023,224 1,765,227 -- 21,788,451
Main and
secondary
pipelines....... 30,427,238 -- 4,882,428 -- 35,309,666 5,132,687 897,241 -- 6,029,928
Distribution
networks........ 127,859,146 2,384,111 472,663 -- 130,715,920 20,822,416 3,924,081 -- 24,746,497
Machinery and
equipment....... 2,000,812 264,968 (4,487) -- 2,261,293 556,610 77,470 -- 634,080
Pressure
reduction
stations........ 9,195,895 -- 570,890 -- 9,766,785 1,074,306 265,482 -- 1,339,788
Processing
equipment....... 6,357,859 -- 2,232,051 -- 8,589,910 1,694,204 357,516 -- 2,051,720
Vehicles........ 3,614,703 316,979 3,176 -- 3,934,858 2,524,923 325,304 -- 2,850,227
Furniture and
office
equipment....... 809,149 86,989 423 -- 896,561 230,957 61,662 -- 292,619
Gas meters...... 19,296,219 58,681 1,750,106 (325,133) 20,779,873 5,418,726 941,255 (134,761) 6,225,220
Gas cylinders... 411,153 -- 29,623 -- 440,776 98,953 24,093 -- 123,046
Works in
progress........ 3,906,399 13,480,350 (3,390,681) -- 13,996,068 -- -- -- --
Computer
equipment....... 882,810 737,858 (2,184) -- 1,618,484 744,852 126,025 -- 870,877
Communications
equipment....... 4,277,890 36,204 (2,024) -- 4,312,070 1,351,936 435,183 -- 1,787,119
Material at
warehouses...... 2,606,358 2,677,784 (1,708,845) (1,724,353) 1,850,944 -- -- -- --
Advances to
suppliers....... 527,613 782,715 (420,474) -- 889,854 -- -- -- --
----------- ---------- ---------- ---------- ----------- ---------- --------- -------- ----------
Total as of
December 31,
1999............ 314,466,766 20,834,184 -- (2,061,071) 333,239,879 62,827,564 9,846,567 (134,761) 72,539,370
----------- ---------- ---------- ---------- ----------- ---------- --------- -------- ----------
Total as of
December 31,
1998............ 297,568,044 24,796,273 -- (7,897,551) 314,466,766 54,767,284 8,731,519 (671,239) 62,827,564
=========== ========== ========== ========== =========== ========== ========= ======== ==========
<CAPTION>
Net carrying value as
of
December 31,
-----------------------
Principal
account 1999 1998
--------- ----------- -----------
(Pesos) (Pesos)
<S> <C> <C>
Land............ 1,712,328 1,551,940
Condominiums.... 4,045,744 44,295
Buildings....... 5,148,318 9,275,030
Facilities...... 7,033,402 6,895,107
Gas pipelines... 54,348,776 61,350,156
Main and
secondary
pipelines....... 29,279,738 25,294,551
Distribution
networks........ 105,969,423 107,036,730
Machinery and
equipment....... 1,627,213 1,444,202
Pressure
reduction
stations........ 8,426,997 8,121,589
Processing
equipment....... 6,538,190 4,663,655
Vehicles........ 1,084,631 1,089,780
Furniture and
office
equipment....... 603,942 578,192
Gas meters...... 14,554,653 13,877,493
Gas cylinders... 317,730 312,200
Works in
progress........ 13,996,068 3,906,399
Computer
equipment....... 747,607 137,958
Communications
equipment....... 2,524,951 2,925,954
Material at
warehouses...... 1,850,944 2,606,358
Advances to
suppliers....... 889,854 527,613
----------- -----------
Total as of
December 31,
1999............ 260,700,509 --
----------- -----------
Total as of
December 31,
1998............ -- 251,639,202
=========== ===========
</TABLE>
- ----
Note:
(1) The accounting allocation of depreciation charges for the period is
described in Schedule H.
I-74
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED INTANGIBLE ASSETS
For the Fiscal Years Ended December 31, 1999 and 1998
Schedule B
<TABLE>
<CAPTION>
Amortization
------------------------------------------------------
Current year
Value as ------------------
Value as of of end of Accumulated as of Rate per Accumulated as of
Principal Account beginning of year Increases year beginning of year annum Amount(1) end of year
----------------- ----------------- --------- --------- ----------------- -------- --------- -----------------
(Pesos) (Pesos) (Pesos) (Pesos) % (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C> <C> <C>
Organization and
pre-operating
expenses and
expenses relating
to the issuance of
Notes............. 3,088,028 11,008 3,099,036 2,175,856 20 476,908 2,652,764
Software.......... 238,690 298,970 537,660 75,084 20 35,240 110,324
--------- ------- --------- --------- --- ------- ---------
Total as of
December 31,
1999............ 3,326,718 309,978 3,636,696 2,250,940 -- 512,148 2,763,088
========= ======= ========= ========= === ======= =========
Total as of
December 31,
1998............ 3,262,875 63,843 3,326,718 1,597,800 -- 653,140 2,250,940
========= ======= ========= ========= === ======= =========
<CAPTION>
Net carrying
value as of
December 31,
-----------------
Principal Account 1999 1998
----------------- ------- ---------
(Pesos) (Pesos)
<S> <C> <C>
Organization and
pre-operating
expenses and
expenses relating
to the issuance of
Notes............. 446,272 912,172
Software.......... 427,336 163,606
------- ---------
Total as of
December 31,
1999............ 873,608 --
======= =========
Total as of
December 31,
1998............ -- 1,075,778
======= =========
</TABLE>
- ----
Note:
(1) The accounting allocation of amortization charges for the year is described
in Schedule H.
I-75
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED INVESTMENTS
General Balance as of December 31, 1999 and 1998
Schedule C
<TABLE>
<CAPTION>
Value Recorded as
of December 31,
-----------------
Number Market
Issuer and securities F.V. value 1999 1998
--------------------- --------- -------- --------- -------
(Pesos) (Pesos)
<S> <C> <C> <C> <C>
CURRENT INVESTMENTS
Mutual Investment Funds
Banco Supervielle Societe Generale....... 2,411,446 1.286966 3,103,449 --
Banque Nationale de Paris................ 484,895 1.091589 529,306 --
Banco Rio................................ 578,378 1.695379 980,569 --
Shares
INDUPA S.A.I.C........................... 14,710 0.86 12,651 9,562
--------- -----
TOTAL CURRENT INVESTMENTS.............. 4,625,975 9,562
--------- -----
TOTAL INVESTMENTS...................... 4,625,975 9,562
========= =====
</TABLE>
I-76
<PAGE>
SODIGAS SUR AND ITS SUBSIDIARY COMPANY
OTHER CONSOLIDATED INVESTMENTS
General Balance as of December 31, 1999 and 1998
Schedule D
<TABLE>
<CAPTION>
Value recorded as
of December 31,
-----------------
Principal account and characteristics 1999 1998
- ------------------------------------- --------- -------
(Pesos) (Pesos)
<S> <C> <C>
CURRENT INVESTMENTS
Fixed-term deposits in local currency......................... 1,956,131 415,012
--------- -------
Total....................................................... 1,956,131 415,012
========= =======
</TABLE>
I-77
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED ALLOWANCES
For the Fiscal Years Ended December 31, 1999 and 1998
Schedule E
<TABLE>
<CAPTION>
Balances as of
December 31,
Balances as of --------------------
Item beginning of year Additions Decreases 1999 1998
---- ----------------- --------- --------- ---------- ---------
(Pesos) (Pesos) (Pesos) (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C>
DEDUCTED FROM ASSETS
Allowance for
defaulting debtors... 5,970,817(1) 903,507 158,021 6,716,303 5,970,817
DEDUCTED FROM
LIABILITIES
Provisions for
lawsuits............. 3,781,802(2) 306,366(2) 144,587 3,943,581 3,781,802
--------- --------- ------- ---------- ---------
Total............... 9,752,619 1,209,873 302,608 10,659,884 9,752,619
========= ========= ======= ========== =========
</TABLE>
- --------
Notes:
(1) Amount charged to Marketing Expenses (Schedule H).
(2) Pesos 58,438 are charged to Other Expenses (Note 4.k).
I-78
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED COST OF SALES
For the Fiscal Years Ended December 31, 1999 and 1998
Schedule F
<TABLE>
<CAPTION>
For the Fiscal Year
ended December 31,
-----------------------
1999 1998
----------- -----------
(Pesos) (Pesos)
<S> <C> <C>
Inventories at the beginning of the year................ 655,120 1,028,741
Plus:
Gas purchases......................................... 111,028,599 98,808,203
Acquisition of transportation capacity................ 22,051,412 20,435,568
Expenses (per breakdown in Schedule H)................ 27,621,105 24,433,292
Less:
Inventories at the end of the year.................... 1,038,084 655,120
----------- -----------
Cost of sales........................................... 160,318,152 144,050,684
=========== ===========
</TABLE>
I-79
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
FOREIGN CURRENCY ASSETS AND LIABILITIES
General Balance as of December 31, 1999 and 1998
Schedule G
<TABLE>
<CAPTION>
Amount in Argentine
currency as of
December 31,
----------------------
Type and
amount of Current
foreign exchange
currency rate 1999 1998
---------- -------- ---------- -----------
U.S.$ (Pesos) (Pesos)
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and banks..................... 133,343 1.0000 133,343 200,810
Other receivables.................. -- -- -- 105,000
---------- ------ ---------- -----------
Total current assets............. 133,343 -- 133,343 305,810
---------- ------ ---------- -----------
Total assets..................... 133,343 -- 133,343 305,810
========== ====== ========== ===========
CURRENT LIABILITIES
Suppliers.......................... 591,890 1.0000 591,890 527,785
Loans
Banco Rio.......................... 4,730,533 1.0000 4,730,533 8,261,888
Banque Nationale de Paris.......... 7,039,164 1.0000 7,039,164 --
Notes.............................. -- 1.0000 -- 60,000,000
Bank Boston--Letter of credit...... 525,764 1.0000 525,764 --
Notes--Interest.................... 207,845 1.0000 207,845 207,845
---------- ------ ---------- -----------
Total current liabilities........ 13,095,196 -- 13,095,196 68,997,518
---------- ------ ---------- -----------
NON-CURRENT LIABILITIES
Notes--Principal................... 50,557,000 1.0000 50,557,000 50,557,000
---------- ------ ---------- -----------
Total non-current liabilities.... 50,557,000 -- 50,557,000 50,557,000
---------- ------ ---------- -----------
Total liabilities................ 63,652,196 -- 63,652,196 119,554,518
========== ====== ========== ===========
</TABLE>
I-80
<PAGE>
SODIGAS SUR S.A. AND ITS SUBSIDIARY COMPANY
INFORMATION REQUIRED UNDER ART. 64, CLAUSE (B) OF LAW 19,550
For the Fiscal Years Ended December 31, 1999 and 1998
Schedule H
<TABLE>
<CAPTION>
Total as of Total as of
December 31, Costs of Cost of Administrative Marketing December 31,
Items 1999 services sales Expenses Expenses 1998
----- ------------ -------- ---------- -------------- --------- ------------
(Pesos) (Pesos) (Pesos) (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C> <C>
Fees for services....... 5,746,969 -- 3,182,495 2,564,474 -- 3,601,965
Salaries and wages...... 13,822,582 -- 5,805,484 5,252,581 2,764,517 12,857,027
Contributions........... 3,626,019 -- 1,522,928 1,377,887 725,204 3,566,656
Transportation
expenses............... 898,211 -- 377,249 341,320 179,642 799,973
Taxes and assessments... 1,802,255 -- 391,274 1,215,344 195,637 2,354,513
Depreciation of fixed
assets................. 9,846,567 -- 9,075,980 513,725 256,862 8,731,519
Amortization of
intangible assets...... 512,148 -- -- 512,148 -- 653,140
Hired services.......... 4,074,621 200,978 2,389,429 1,095,690 388,524 4,345,596
Postage, communications
and data processing.... 1,243,450 -- 371,089 686,816 185,545 1,278,182
Liquid processing....... 1,825,343 -- 1,825,343 -- -- 1,222,537
Defaulting debtors...... 852,964 -- -- -- 852,964 1,173,346
Advertising............. 159,378 -- -- -- 159,378 175,356
Miscellaneous........... 5,092,545 -- 2,679,834 1,765,381 647,330 4,275,327
---------- ------- ---------- ---------- --------- ----------
Total as of December
31, 1999............. 49,503,052 200,978 27,621,105 15,325,366 6,355,603 --
---------- ------- ---------- ---------- --------- ----------
Total as of December
31, 1998............. -- 152,550 24,433,292 13,950,169 6,499,126 45,035,137
========== ======= ========== ========== ========= ==========
</TABLE>
I-81
<PAGE>
SODIGAS SUR S.A.
US GAAP RECONCILIATION
Reconciliation of Net Income
Annex II
<TABLE>
<CAPTION>
Year ended
December 31,
1999
--------------
<S> <C>
Net income as reported under Argentine GAAP..................... Ps. 18,451,802
US GAAP adjustments:
Depreciation expense.......................................... 1,469,579
Intangible asset amortization................................. 136,492
Gross sales tax settlement.................................... 15,825
Regulatory issues............................................. (326,886)
Deferred income taxes......................................... 2,168,414
Technical assistance fee...................................... (101,054)
Deferred expenses............................................. 10,281
Minority interest............................................. (345,857)
--------------
US GAAP adjustments, net........................................ Ps. 3,024,794
--------------
Net income under US GAAP........................................ Ps. 21,476,596
==============
</TABLE>
I-82
<PAGE>
SODIGAS SUR S.A.
US GAAP RECONCILIATION
Reconciliation of Shareholders' Equity
Annex II(cont)
<TABLE>
<CAPTION>
Year ended
December 31,
1999
--------------
<S> <C>
Shareholders' Equity as reported under Argentine GAAP.......... Ps.218,427,277
US GAAP adjustments:
Initial carrying value of assets............................. (18,508,860)
Contribution of gas networks................................. (28,390,741)
Capitalization of interest................................... 2,647,901
Depreciation expense......................................... 9,173,374
Intangible assets amortization............................... 15,880
Gross sales tax settlement................................... (914,864)
Regulatory issues............................................ (451,053)
Deferred income taxes........................................ 2,770,811
Technical assistance fee..................................... 3,284,792
Deferred expenses............................................ (30,846)
Minority interest............................................ 3,041,948
--------------
US GAAP adjustments, net....................................... Ps.(27,361,658)
--------------
Shareholders' Equity under US GAAP............................. Ps.191,065,619
==============
</TABLE>
I-83
<PAGE>
ATTACHMENT I-4
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED GENERAL BALANCE SHEET
As of December 31, 1999 and 1998 (Notes 1 and 2)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
(Pesos)
<S> <C> <C>
ASSETS
Current assets
Cash and banks (Note 4.a).............................. 2,284,952 1,881,096
Investments (Schedules C and D)........................ 32,590,334 13,237,019
Trade accounts receivable (Note 4.b)................... 35,210,279 34,151,480
Intercompany receivables (Note 5)...................... 2,567,260 24,292,347
Other accounts receivable (Note 4.c)................... 4,661,345 6,269,382
Inventories (Schedule F)............................... 81,333 161,545
Other assets (Note 4.d)................................ 86,400 --
----------- -----------
Total current assets................................. 77,481,903 79,992,869
----------- -----------
Non-current assets
Trade accounts receivable (Note 4.b)................... 426,000 426,000
Other accounts receivable (Note 4.c)................... 26,573,434 25,780,764
Investments (Note 12 and Schedule C)................... 246 --
Fixed assets (Schedule A).............................. 501,773,379 487,639,816
Intangible assets (Schedule B)......................... 1,768,989 2,243,504
Other assets (Note 4.d)................................ 1,637,710 1,217,472
----------- -----------
Total non-current assets............................. 532,179,758 517,307,556
----------- -----------
TOTAL ASSETS......................................... 609,661,661 597,300,425
----------- -----------
LIABILITIES
Current liabilities
Suppliers (Note 4.e)................................... 33,929,766 32,744,490
Loans (Notes 4.f and 7)................................ 369,066 96,311,373
Intercompany payables (Note 5)......................... 1,010,084 1,163,309
Salaries and social security liabilities (Note 4.g).... 3,743,602 3,946,835
Taxes payable (Notes 4.h and 15)....................... 20,752,752 20,187,126
Other liabilities (Note 4.i)........................... 7,566,891 6,018,736
Provisions (Schedule E)................................ 2,601,689 2,914,472
----------- -----------
Total current liabilities............................ 69,973,850 163,286,341
----------- -----------
Non-current liabilities
Loans (Notes 4.f and 7)................................ 79,443,000 79,485,324
Taxes payable (Notes 4.h and 15)....................... -- 4,119,816
Other liabilities (Note 4.i)........................... 10,720,648 8,969,626
----------- -----------
Total non-current liabilities........................ 90,163,648 92,574,766
----------- -----------
TOTAL LIABILITIES.................................... 160,137,498 255,861,107
----------- -----------
Minority interests in subsidiary companies............. 126,245,235 127,442,886
SHAREHOLDERS' EQUITY................................... 323,278,928 213,996,432
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............. 609,661,661 597,300,425
=========== ===========
</TABLE>
The accompanying notes and schedules are an integral part of these consolidated
financial statements.
I-84
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the Fiscal years Ended December 31, 1999 and 1998 (Notes 1 and 2)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
(Pesos)
<S> <C> <C>
Net sales (Note 4.j)................................ 362,593,961 367,730,669
Cost of sales (Schedule F).......................... (275,913,558) (282,239,494)
------------ ------------
Gross profit...................................... 86,680,403 85,491,175
------------ ------------
Marketing expenses (Schedule H)..................... (10,097,695) (10,810,689)
Administrative expenses (Schedule H)................ (25,327,162) (21,693,788)
------------ ------------
Operating profit.................................. 51,255,546 52,986,698
------------ ------------
Other income and expenses, net (Note 4.l)........... 355,928 (1,857,769)
Financial and holding gain/(loss) (Note 4.k)
Generated by assets............................... 6,736,462 4,743,357
Generated by liabilities.......................... (13,984,217) (19,455,575)
Income tax.......................................... (18,956,933) (22,129,579)
Minority interests in subsidiary companies.......... (9,338,245) (7,240,946)
------------ ------------
Ordinary income................................... 16,068,541 7,046,186
Extraordinary loss (Notes 4.m and 9)................ (820,443) (327,434)
Minority interests in subsidiary companies.......... 239,058 96,637
------------ ------------
Net income for the year........................... 15,487,156 6,815,389
============ ============
</TABLE>
The accompanying notes and schedules are an integral part of these consolidated
financial statements.
I-85
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Fiscal years Ended December 31, 1999 and 1998 (Notes 1 and 2)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
(Pesos)
<S> <C> <C>
CHANGES IN FUNDS
Funds as of beginning of year........................ 15,130,484 34,426,993
Increase/(Decrease) in funds......................... 19,744,802 (19,308,878)
----------- -----------
Funds at end of year................................. 34,875,286 15,118,115
=========== ===========
Sources of funds
Ordinary income for the year......................... 16,068,541 7,046,186
Plus: Items not entailing the use of funds
Fixed assets depreciation.......................... 19,575,586 19,380,111
Decrease in inventories............................ 84,625 --
Decrease in permanent investments.................. 288 --
Residuary value of deductions of fixed assets...... 3,197,014 2,663,351
Intangible asset amortization...................... 976,199 1,238,434
Allowance for vacations and bonuses................ 2,639,662 2,695,432
Accrued gross income tax........................... 1,594,629 2,056,436
Accrued income tax................................. 18,956,933 19,519,597
Miscellaneous allowances........................... 5,600 --
Accrued interest on notes.......................... 4,725,000 --
Accrued net financial loss pending payment......... 326,742 576,726
Accrued purchases pending payment.................. 26,388,562 29,248,888
Intercompany fees and expenses pending payment..... 980,626 1,412,566
Accrued business indebtedness cost tax............. 600,126 --
Technical assistance agreement..................... 216,048 678,051
Other liabilities and fees pending payment......... 435,426 41,595
Increase in provision for lawsuits................. 339,884 2,912,052
Increase in tax credits............................ 6,534 --
Increase in allowance for defaulting debtors....... 1,899,726 2,898,836
----------- -----------
82,949,210 85,322,075
Less: Items not entailing sources of funds
Accrued sales pending collection................... (30,107,412) (29,552,793)
Intercompany sales pending collection.............. (131,049) (20,182,698)
Recovery of intercompany expenses.................. (1,490,950) (3,217,221)
Other income....................................... -- (250)
Accrued interest pending collection................ (487,328) --
Increase in other receivables...................... (3,000) --
----------- -----------
(32,219,739) (52,952,962)
Minority interests in subsidiary companies......... 9,338,247 7,240,946
----------- -----------
Funds originated from ordinary operations.......... 76,136,259 46,656,245
----------- -----------
Extraordinary loss of the year....................... (581,385) (230,797)
Plus: Items not entailing the use of funds
Allowance for uncollectible Mercobank S.A. Series C
Certificates...................................... 151,325 36,000
Depreciation of Mercobank S.A. shares.............. 669,118 291,434
Minority interests in subsidiary companies......... (239,058) (96,637)
----------- -----------
Funds originated from extraordinary operations....... -- --
Funds originated from operations--Carried forward.... 76,136,259 46,656,245
----------- -----------
</TABLE>
I-86
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued)
For the Fiscal years Ended December 31, 1999 and 1998 (Notes 1 and 2)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
(Pesos)
<S> <C> <C>
Funds originated from operations--Brought
forward.......................................... 76,136,259 46,656,245
------------ ------------
Other sources of funds
Irrevocable contribution on account of future
payments....................................... 3,775,000 --
Changes in other receivables.................... 4,237,574 --
Decrease in intercompany receivables............ 22,837,135 15,141,821
Increase in bank loans.......................... -- 1,738,054
Decrease in other assets........................ -- 124,862
Decrease in interest paid in advance............ 157,500 --
Decrease in investments......................... -- 60,000
Decrease in trade accounts receivable........... 30,141,556 34,968,692
------------ ------------
Total other sources of funds...................... 61,148,765 52,033,429
------------ ------------
Total sources of funds............................ 137,285,024 98,689,674
------------ ------------
Applications of funds
Increase in investments......................... (8,256,877) --
Acquisition of fixed assets..................... (34,473,097) (22,731,329)
Increase in other accounts receivable........... (11,837) (133,779)
Changes in inventories.......................... -- (124,403)
Additions of intangible assets.................. (500,160) (145,809)
Changes in taxes payables and receivables....... (26,217,482) (31,770,721)
Decrease in intercompany payables............... (1,117,498) (1,861,227)
Decrease in salaries and social security
liabilities.................................... (2,877,307) (1,509,623)
Payment of financial and bank loans............. (6,311,373) (12,807,125)
Distribution of dividends....................... (8,198,331) (19,214,837)
Interest paid in advance........................ -- (157,500)
Decrease in other accounts payable and other
liabilities.................................... (1,251,582) (1,654,752)
Decrease in allowances.......................... (681,367) (841,146)
Decrease in suppliers........................... (27,643,311) (25,046,301)
------------ ------------
Total applications of funds....................... (117,540,222) (117,998,552)
------------ ------------
Increase/(Decrease) in funds...................... 19,744,802 (19,308,878)
============ ============
Operations not entailing sources nor application
of funds
Increase in other liabilities................... 4,240,632 12,764,430
Withdrawal of the Subsidiary Company's voluntary
reserve........................................ (1,204,660) (12,764,430)
Decrease in minority interests.................. (495,340) --
Acquisition of gas distribution networks with
liabilities.................................... (2,540,632) --
Acquisition of fixed assets..................... (11,971) --
Addition of intangible assets................... (144,989) --
Increase in intercompany payables............... 156,960 --
Decrease in loans (principal plus interest)..... 94,725,000 --
Irrevocable contribution on account of future
payments....................................... (94,725,000) --
------------ ------------
Total operations not entailing sources nor
application of funds............................. -- --
------------ ------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
I-87
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended December 31, 1999 and 1998
NOTE 1: FINANCIAL STATEMENT PRESENTATION
As required by General Resolution No. 290/97 of the Comision Nacional de
Valores (the "CNV"), which establishes that consolidated financial statements
must be submitted following the procedure outlined in Technical Resolution No.
4 of the Argentine Federation of Professional Councils of Economic Sciences,
the Balance Sheets of the Company at December 31, 1999 and 1998, and the
Statements of Income and Cash Flows for the fiscal years then ended have been
consolidated on a line-by-line basis with the financial statements of the
Subsidiary Company.
Non-monetary items included in the Financial Statements at December 31, 1999
and 1998, have been restated in current Pesos up to August 31, 1995. No
adjustments have been applied since such date.
Although the Consolidated Financial Statements of our Subsidiary Company,
Camuzzi Gas Pampeana S.A. are not presented in comparative form due to the
fact that the Financial Statements of the Subsidiary Company I.V. Invergas
S.A. as of December 31, 1998 apply to an irregular 14-day period (commenced on
December 18, 1998) but taking into consideration that the effect of the
Financial Statements of I.V. Invergas S.A. on the Consolidated Financial
Statements of Camuzzi Gas Pampeana S.A. is not significant, these Financial
Statements are presented in comparative form.
The information as of December 31, 1998, has been reclassified, for
comparative purposes, in order to be consistent with that of the current year.
The December 31, 1999 and 1998 financial statements of the Subsidiary
Company, Camuzzi Gas Pampeana S.A., which cover the same period as that of its
Controlling Company, Sodigas Pampeana S.A., have been used in order to
determine the equity value and carry out the consolidation.
NOTE 2: VALUATION CRITERIA
The financial statements of the Subsidiary Company have been prepared based
on criteria consistent with those applied for preparing the financial
statements of Sodigas Pampeana S.A.
In addition, the principal valuation and disclosure criteria used for the
preparation of the consolidated financial statements at December 31, 1999 and
1998, are as follows:
a.Local currency assets and liabilities
The local currency assets and liabilities have been stated at their face
value at the balance sheet date, including accrued interest.
The implicit cost of financing contained in the monetary assets and
liabilities has not been segregated as it is not deemed significant.
b.Foreign currency assets and liabilities
Foreign currency assets and liabilities were translated at the exchange rate
prevailing on the balance sheet date, including accrued interest.
I-88
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
c.Investments
Current
These are the following:
-- Shares and participation in investment funds which have been valued at
their market value or at their acquisition value as of the balance sheet
date.
-- Fixed-term deposits, which have been valued at their original amount
plus interest accrued up to the closing date.
Non-current
These represent the investment in I.V. Invergas S.A., owner of 99.99% of the
shares and voting rights of Distribuidora Gesell Gas S.A. (see Note 10). As of
December 31, 1999, such investment has been valued at its acquisition cost.
d.Receivables to be recovered from customers
These assets stem from agreements signed by Camuzzi Gas Pampeana S.A. with
provinces, municipalities and other entities, to be recovered from customers
who are currently connected, or will be connected in the future, to the
network pursuant to the agreements. These were agreed upon in cubic meters of
gas and have been valued at the average tariff for gas distributed.
e.Contribution of improvements receivables
The works related to the gas distribution network of the Subsidiary Company
are financed through the contribution of improvements applicable to the
frontage landowners or holders of the plots of land of the city of Villa
Gesell.
The works performed are mandatorily payable by the owners or holders of the
benefited premises. Such obligation is instrumented through debt certificates
issued by Distribuidora Gesell Gas S.A. and submitted to the Municipality of
Villa Gesell for their confirmation. The Municipality certifies that the
network construction work has been performed by granting the certificate the
nature of a liquid, due and unconditional debt (titulo ejecutivo) in
accordance with section 521 of the Argentine Civil Code. The collection of the
contribution of improvements receivables is enforceable within ten days after
the notice of the liquidation approved by the Municipality. In order for such
notice to be effective it must be published in the Official Gazette (Boletin
Oficial).
The contribution of improvements receivables are stated at their face value
at the balance sheet date, including accrued interest.
f.Inventories
These have been valued at their replacement cost as of the end of the year;
the value thereof does not exceed their recoverable value.
I-89
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
g.Other assets
Current
-- LPG storage and vaporization Plant assigned to the Subsidiary Company
Distribuidora Gesell Gas S.A. during the spin-off, which has been
segregated for its sale. The plant is valued at its estimated recovery
value.
Non-current
-- Other assets include Class "C" shares and bonds issued by Mercobank
S.A.; these securities were received in exchange for deposits made with
Banco de Credito Provincial S.A., at the time of its suspension, as
mentioned in Note 9 to the Consolidated Financial Statements. These
assets were valued at their estimated recovery value.
-- Includes the proportion of the cost of the work related to income to be
acknowledged in connection with the debt certificates for the
contribution of improvements held by the Municipality of Villa Gesell
(see Note 10). Other non-current assets also includes the costs of the
works performed in relation to the second tranche of the works agreed
upon with the Municipality of Villa Gesell. Once operative, such costs
will constitute a receivable to be recovered on account of contribution
of improvements (see Note 2.e).
h.Fixed assets
The fixed assets transferred by Gas del Estado at the beginning of the
operations of Camuzzi Gas Pampeana S.A. have been valued in an overall manner,
according to the contract for the transfer of the Company's shares by Gas del
Estado. This value has been restated in current Pesos as at August 31, 1995.
The aforementioned value was recalculated for each individual fixed asset,
based on the stocktaking and valuation carried out during the fiscal year
ended December 31, 1993 by independent consultants.
Additions carried out after such date and up to August 31, 1995, were valued
at their acquisition cost, restated in current Pesos at such date. As from
September 1, 1995, additions have been valued at their acquisition cost in
current Pesos of the corresponding period.
Up to December 31, 1995, additions of gas distribution networks in favor of
the Licensee Company made free of charge, were recorded at their replacement
cost at the time of the transfer under the item "Other Income".
According to resolutions of the CNV adopted in the meetings held on July 28
and August 10, 1995, the gas distribution networks transferred free of charge
or partially funded by third parties after December 31, 1995 shall be recorded
at the lower of their construction cost or the cost set for the transfer and
their value to the business.
In the case that the value of the asset added exceeds the value of the
consideration assumed by the Licensee, or if such consideration does not exist
(free of charge), a cross-entry shall be recorded in an adjustment account,
which is shown deducted from the Fixed Assets, whose depreciation criteria is
equivalent to that of the asset added.
The obligation to partially or totally compensate third parties is recorded
as a liability of the Subsidiary Company.
The values thus determined are disclosed net of the corresponding
accumulated depreciation, calculated using the straight-line method, based on
the estimated useful lives of the assets.
I-90
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The Subsidiary Company defers the net costs derived from the financing with
third party capitals of construction works which extends in time until they
are in start-up conditions. The amount capitalized in fixed assets amounted to
Ps. 1,202,029 during the fiscal year ended December 31, 1999.
Also, includes the Fixed Assets transferred to the Subsidiary Company,
Distribuidora Gesell Gas S.A., as a result of the spin-off, and additions
carried out subsequently and up to December 31, 1999. Fixed Assets transferred
at the beginning of the fiscal year have been restated up to August 31, 1995
and the additions were valued at their acquisition cost, restated in current
Pesos at such date.
The value of the Fixed Assets, taken as a whole, does not exceed their
recoverable value.
i.Intangible assets
Correspond to:
-- The purchase of computer software and expenses in relation to the
programs for the issuance of the Notes by Sodigas Pampeana S.A. and its
Subsidiary Company, to be amortized over a five-year period.
-- Organization expenses of the Subsidiary Company, Distribuidora Gesell
Gas S.A., related to the home gas distribution network conversion, in
order to enable the distribution of natural gas, and are amortized over
a three-year period.
Additions of Intangible Assets made up to August 31, 1995 are recorded at
their acquisition cost restated in current Pesos at such date, while additions
carried out after September 1, 1995 are disclosed at their acquisition cost in
current Pesos of the corresponding period, in both cases net of their
corresponding cumulative amortization, calculated according to the straight-
line method.
j.Shareholders' equity
The Capital Stock has been stated at its nominal value. The Capital Stock
Adjustment represents the difference between the nominal value of the capital
stock and its value adjusted, based on the fluctuation in the general
wholesale price index up to August 31, 1995.
Changes in net worth prior to August 31, 1995 are restated as of that date,
while subsequent changes are stated in the currency value of the corresponding
fiscal year.
k.Profit/(loss) accounts
Profit/(loss) for the year is disclosed at historical values, except for the
charges for assets consumed (fixed asset depreciation and intangible asset
amortization), which were determined according to the values of such assets.
l.Accounting recognition of income
The income stemming from gas distribution activities is recognized when the
service is rendered and charged to the "Unbilled gas consumption" account.
m.Statement of Cash Flows
The Statement of Cash Flows is presented using the Indirect Method of
Alternative D of Technical Resolution No. 9 of the Argentine Federation of
Professional Councils of Economic Sciences, considering Cash and Banks and
Short-Term Investments as funds.
I-91
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
n.Accounting estimates
The preparation of these financial statements as of a specified date
requires that the Subsidiary Company's management performs estimates and
assessments that affect the amount of the recorded assets and liabilities and
the contingent assets and liabilities disclosed as of the date of these
financial statements, as well as the income and expenses recorded during the
year. The Subsidiary Company's management makes estimates so as to calculate,
among other things, the income tax charge, the unbilled gas consumptions, the
discounts to be made to users and the provisions for contingencies, as of a
certain date. The actual future results may differ from the estimates and
assessments made as of the date of the financial statements.
NOTE 3: CORPORATE CONTROL
Sodigas Pampeana S.A. owns 70.862335% of the shares of Camuzzi Gas Pampeana
S.A.
NOTE 4: BREAKDOWN OF ITEMS
Balance Sheet
a.Cash and banks
<TABLE>
<CAPTION>
As of December 31,
-----------------------
1999 1998
----------- ----------
(Pesos)
<S> <C> <C>
Imprest fund...................................... 123,773 93,549
Banks (Schedule G)................................ 2,161,179 1,787,547
----------- ----------
Total........................................... 2,284,952 1,881,096
=========== ==========
b.Trade accounts receivable
<CAPTION>
As of December 31,
-----------------------
1999 1998
----------- ----------
(Pesos)
<S> <C> <C>
Current
Trade debtors..................................... 23,825,582 22,312,546
Subsidies receivable.............................. 3,783,730 3,869,186
Unbilled gas consumption.......................... 17,610,221 17,543,890
----------- ----------
Subtotal........................................ 45,219,533 43,725,622
Less: Allowance for defaulting debtors (Schedule
E)............................................... (10,009,254) (9,574,142)
----------- ----------
Total........................................... 35,210,279 34,151,480
----------- ----------
Non current
Subsidies receivable.............................. 426,000 426,000
----------- ----------
Total........................................... 426,000 426,000
----------- ----------
Total trade accounts receivable................. 35,636,279 34,577,480
=========== ==========
</TABLE>
I-92
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
c.Other accounts receivable
<TABLE>
<CAPTION>
As of December 31,
----------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Current
Receivables to be recovered from customers (Note
2.d)............................................... 207,130 584,852
Contribution of improvements receivables (Note
2.e)............................................... 327,598 --
Guarantee deposits.................................. 307,502 293,775
Receivables to be recovered as per Section 41 Law
24,076 (Note 15.b)................................. 3,057,091 4,509,822
Miscellaneous advance payments...................... 119,819 172,059
Prepaid expenses.................................... 421,339 249,136
Miscellaneous....................................... 335,457 459,738
---------- ----------
Subtotal.......................................... 4,775,936 6,269,382
---------- ----------
less: Allowance for uncollectibility of contribution
of improvements receivables (Schedule E)........... (114,591) --
---------- ----------
Total............................................. 4,661,345 6,269,382
---------- ----------
Non-current
Judicial deposits................................... 551,410 159,215
Receivables to be recovered from customers (Note
2.d)............................................... 223,436 117,140
Receivables to be recovered as per Section 41 Law
24,076 (Note 15.b)................................. 22,354,184 25,402,907
Contribution of improvements receivables (Note
2.e)............................................... 4,385,658 --
Prepaid expenses.................................... 55,363 64,155
Restricted availability funds....................... 64,330 --
Miscellaneous....................................... 35,468 37,347
---------- ----------
Subtotal.......................................... 27,669,849 25,780,764
---------- ----------
less: Allowance for uncollectibility of contribution
of improvements receivables (Schedule E)........... (1,096,415) --
---------- ----------
Total............................................. 26,573,434 25,780,764
---------- ----------
Total Other accounts receivable................... 31,234,779 32,050,146
========== ==========
</TABLE>
I-93
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
d.Other assets
<TABLE>
<CAPTION>
As of December 31,
----------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Current
Fixed assets segregated for sale................... 86,400 --
---------- ----------
Total............................................ 86,400 --
---------- ----------
Non-current
Works in progress (Note 2.g and 10)................ 1,240,682 --
Series C Certificates, Mercobank S.A. (Note 9)..... 667,325 667,325
Fixed-term deposits with Mercobank S.A. (Note 9)... -- 517,455
Mercobank S.A.'s shares (Note 9)................... 1,038,639 840,126
---------- ----------
Subtotal......................................... 2,946,646 2,024,906
---------- ----------
less:
Allowance for depreciation of Mercobank S.A.'s
shares (Note 9 and Schedule E).................. (641,611) (291,434)
Allowance for uncollectibility of Series C
Certificates (Note 9 and Schedule E)............ (667,325) (516,000)
---------- ----------
Subtotal......................................... (1,308,936) (807,434)
---------- ----------
Total............................................ 1,637,710 1,217,472
---------- ----------
Total other accounts receivable.................. 1,724,110 1,217,472
========== ==========
e.Suppliers
<CAPTION>
As of December 31,
----------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Suppliers (Schedule G)............................. 7,861,246 4,020,134
Accrued invoices to be received.................... 26,068,520 28,724,356
---------- ----------
Total............................................ 33,929,766 32,744,490
========== ==========
</TABLE>
f.Loans
<TABLE>
<CAPTION>
As of December 31,
----------------------
1999 1998
---------- -----------
(Pesos)
<S> <C> <C>
Current
Bank debts............................................ -- 2,150,000
Notes (Schedule G).................................... -- 90,000,000
Letters of credit (Schedule G)........................ 42,467 3,585,024
Accrued interest (Schedule G)......................... 326,599 576,349
---------- -----------
Total............................................... 369,066 96,311,373
---------- -----------
Non-current
Letters of credit (Schedule G)........................ -- 42,324
Notes (Schedule G).................................... 79,443,000 79,443,000
---------- -----------
Total............................................... 79,443,000 79,485,324
---------- -----------
Total loans......................................... 79,812,246 175,796,697
========== ===========
</TABLE>
I-94
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
g.Salaries and social security
<TABLE>
<CAPTION>
As of December 31,
---------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Social security liabilities payable.................. 809,376 901,436
Allowance for vacations.............................. 1,647,601 1,650,772
Allowance for bonuses................................ 1,242,220 1,322,973
Others............................................... 44,405 71,654
---------- ----------
Total.............................................. 3,743,602 3,946,835
========== ==========
h.Taxes payable
<CAPTION>
As of December 31,
---------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Current
Value added tax...................................... 2,522,347 3,041,545
Gross revenue tax.................................... 1,592,845 2,040,654
Income tax........................................... 8,202,578 7,956,479
Provincial taxes..................................... 1,792,672 1,645,507
Municipal rates...................................... 1,489,293 1,365,903
Tax on cost of business indebtedness................. 600,126 86,263
Tax amnesty.......................................... 4,119,246 4,023,808
Others............................................... 433,645 26,967
---------- ----------
Total.............................................. 20,752,752 20,187,126
---------- ----------
Non-current
Tax amnesty.......................................... -- 4,119,816
---------- ----------
Total.............................................. -- 4,119,816
---------- ----------
Total tax payables................................. 20,752,752 24,306,942
========== ==========
i.Other liabilities
<CAPTION>
As of December 31,
---------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Current
Gas-in-kind payables................................. 2,362,240 2,548,780
Consumer reconnection deposits....................... 161,317 184,743
Reimbursements to be passed through on account of
additional transportation charges................... 1,704,223 1,032,802
Other accounts payable............................... 3,339,111 2,252,411
---------- ----------
Total.............................................. 7,566,891 6,018,736
---------- ----------
Non-current
Gas-in-kind payables................................. 10,719,648 8,968,626
Other accounts payable............................... 1,000 1,000
---------- ----------
Total.............................................. 10,720,648 8,969,626
---------- ----------
Total other liabilities............................ 18,287,539 14,988,362
========== ==========
</TABLE>
I-95
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Statement of income
j.Net sales
<TABLE>
<CAPTION>
For the fiscal years
ended December 31,
------------------------
1999 1998
----------- -----------
(Pesos)
<S> <C> <C>
Gas sales............................................. 371,278,212 375,138,727
Sales of other items.................................. 3,481,234 2,243,917
Direct taxes on sales................................. (12,165,485) (9,651,975)
----------- -----------
Total............................................... 362,593,961 367,730,669
=========== ===========
k.Financial and holding gain/(loss)
<CAPTION>
For the fiscal years
ended December 31,
------------------------
1999 1998
----------- -----------
(Pesos)
<S> <C> <C>
Generated by assets
Interest.............................................. 6,217,283 4,341,758
Income from investments............................... 513,135 391,747
Exchange differences.................................. 3,529 720
Listing differences................................... -- 1,953
Discounts obtained.................................... 2,515 7,179
----------- -----------
Total............................................... 6,736,462 4,743,357
----------- -----------
Generated by liabilities
Financial interest.................................... (11,299,922) (17,282,651)
Interest on tax debts................................. (828,061) (2,151,331)
Business indebtedness cost tax........................ (1,837,815) --
Exchange differences.................................. (4,084) (8,517)
Miscellaneous......................................... (14,335) (13,076)
----------- -----------
Total............................................... (13,984,217) (19,455,575)
----------- -----------
Financial (loss), net............................... (7,247,755) (14,712,218)
=========== ===========
</TABLE>
I-96
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
l.Other income and (expenses), net
<TABLE>
<CAPTION>
For the fiscal years
ended December 31,
----------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Other income
Leases income...................................... 396,200 255,900
Engineering services income........................ 898,142 --
Commissions for collection charges on behalf of
third parties..................................... 83,875 85,767
Income from fixed assets sale...................... 32,364 --
Miscellaneous...................................... 318,684 1,457,075
---------- ----------
Total............................................ 1,729,265 1,798,742
---------- ----------
Other expenses
Provision for lawsuits (Schedule "E").............. (375,820) (2,843,200)
Miscellaneous...................................... (810,008) (813,311)
Loss from non-current investments purchase......... (187,509) --
---------- ----------
Total............................................ (1,373,337) (3,656,511)
---------- ----------
Total other income and (expenses), net........... 355,928 (1,857,769)
========== ==========
m.Extraordinary (loss)
Uncollectibility of Series "C" Certificates
(Schedule E)...................................... (151,325) (36,000)
Depreciation of Mercobank S.A.'s shares (Schedule
E)................................................ (669,118) (291,434)
---------- ----------
Total (loss)..................................... (820,443) (327,434)
========== ==========
NOTE 5: INTERCOMPANY BALANCES AND OPERATIONS
<CAPTION>
As of December 31,
----------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Receivables
Empresa de Energia de Rio Negro S.A................ 29,217 --
Aguas de Balcarce S.A.............................. 216 1,449
Aguas de Laprida S.A............................... 2,000 6,155
Camuzzi Gas del Sur S.A............................ 463,558 732,219
Sodigas Sur S.A.................................... 26,110 147,510
Empresa Distribuidora de Energia Atlantica S.A..... -- 83,341
Inversora Electrica de Buenos Aires S.A............ 167,341 590,000
Central Piedrabuena S.A.(2)........................ 1,878,554 22,731,673
CNG Argentina S.A.................................. 264 --
---------- ----------
Total............................................ 2,567,260 24,292,347
========== ==========
Payables
CNG................................................ 50,000 25,000
Camuzzi Argentina S.A.............................. 906,874 1,113,309
Empresa Distribuidora de Energia Atlantica S.A..... 3,210 --
Sempra Energy International Chile Holdings I.B.V... 50,000 25,000
---------- ----------
Total............................................ 1,010,084 1,163,309
========== ==========
</TABLE>
I-97
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
<TABLE>
<CAPTION>
For the fiscal years
ended December 31,
----------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
Income/(loss) accounts
Camuzzi Gas del Sur S.A.
Propane gas sales (*)................................. 990,674 187,454
Administrative and personnel services (*)............. 3,458,401 3,304,509
Gas transportation.................................... (8,428) --
Assistance service for natural gas transportation..... 2,540,571 --
Regulators sale (*)................................... 32,364 --
Camuzzi Argentina S.A.
Technical assistance and professional fees............ (4,038,111) (4,067,930)
Work inspection service fees.......................... -- (339,209)
Maintenance service of computer systems............... (241,022) (626,662)
Recovery of expenses incurred for administrative
financial advice (*)................................. 283,959 986,890
Financial and administrative advisory services (*).... (183,399) (499,704)
Leases income (*)..................................... 421,131 255,900
Administrative expenses recovery (*).................. 183,532 272,412
Recovery of expenses.................................. (50,000) (50,000)
Loma Negra C.I.A.S.A
Gas sales (1)......................................... -- 4,180,508
Aguas de Balcarce S.A.
Administrative and personnel services (*)............. 7,074 7,440
Aguas de Laprida S.A.
Administrative and personnel services (*)............. 20,207 3,096
Empresa Distribuidora de Energia Atlantica S.A.
Gas sales............................................. 12,612 10,559
Purchases of electricity.............................. (50,715) (55,121)
Administrative expenses recovery (*).................. 68,338 133,730
Empresa de Energia de Rio Negro S.A.
Administrative and personnel services (*)............. 17,222 --
Administrative and financial advisory fees (*)........ 6,925 --
Central Piedrabuena S.A.
Gas sales............................................. 23,700,701 52,271,752
Sempra Energy International Chile Holdings I.B.V.
Recovery of expenses.................................. (25,000) (25,000)
CNG
Recovery of expenses.................................. (25,000) (25,000)
Sodigas Sur S.A.
Personnel services.................................... 206,030 147,510
Recovery of expenses.................................. 99,796 --
Financial interest.................................... 1,518 --
Inversora Electrica de Buenos Aires S.A.
Financial advisory services recovery.................. -- 100,000
Administrative services (*)........................... 183,564 490,000
Other Operations
Camuzzi Argentina S.A.
Technical advisory services capitalized in works in
progress (*)......................................... 331,983 181,396
Work inspection and direction services fees (*)....... -- 161,293
Software acquisition (*).............................. 56,800 129,624
Sale of vehicles (*).................................. -- 45,125
Miscellaneous (*)..................................... 51,614 40,782
Aguas de Balcarce S.A.
Sale of vehicles (*).................................. 1,650 --
Camuzzi Gas del Sur S.A.
Storage material acquisition.......................... 36,890 --
Administrative and personnel services................. 325 --
Miscellaneous......................................... 2,134 127,222
CNG Argentina S.A.
Miscellaneous (*)..................................... 264 --
Empresa Distribuidora de Energia Atlantica S.A.
Miscellaneous......................................... 803 38,244
Central Piedrabuena S.A.
Miscellaneous......................................... -- 3,420
IEBA S.A.
Miscellaneous......................................... 10,059 --
</TABLE>
(Notes appear on the following page)
I-98
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
- --------
(*) Corresponds to operations which approval is pending by the Board of
Directors of the Company.
(1) On March 26, 1998, Loma Negra C.I.A.S.A. sold its interest in Sodigas
Pampeana S.A., the controlling company of Camuzzi Gas Pampeana S.A.
(2) Central Piedrabuena S.A. made payments under protest for approximately Ps.
2.0 million and additionally, it has not recorded approximately Ps. 1.9
million, which were originated by amounts due under the gas purchase
agreement in force as of the time of the approval of the service. As of
the date hereof, the dispute has been submitted to arbitration by the
Regulatory Authority. Furthermore, the payment condition in force as of
the time of the approval of the service is pending approval by the Board
of Directors. In the opinion of the Subsidiary Company and its legal
counsel, an adverse decision in relation to the aforementioned dispute is
considered improbable.
Clarifying note:
The Subsidiary Company, Camuzzi Gas Pampeana S.A., together with Camuzzi Gas
del Sur S.A. is currently involved in a dispute with Camuzzi Argentina S.A.,
in regard to the ownership of the invoicing and collection system (AG system).
As of the date hereof, the parties are negotiating a resolution to solve the
dispute. The parties have agreed that if they cannot settle the dispute, the
dispute will be submitted to an arbitrator for resolution.
In the opinion of the Subsidiary Company and its legal counsel, an adverse
decision regarding the aforementioned claim is considered not probable.
NOTE 6: MANDATORY INVESTMENTS OF THE SUBSIDIARY COMPANY
Chapter IV of the Distribution License states that the Subsidiary Company,
Camuzzi Gas Pampeana S.A., must undertake a five-year plan from 1993 to 1997,
which includes investments in network pipelines, services, protection against
rust and corrosion, communications equipment and SCADA (centralized
telemeasurement and control equipment system).
The amounts of the investments, as set by the License for each year, are the
following:
<TABLE>
<CAPTION>
Year U.S.$
---- ----------
<S> <C>
1993............................................................ 6,104,000
1994............................................................ 7,793,000
1995............................................................ 7,460,000
1996............................................................ 7,074,000
1997............................................................ 8,679,000
----------
Total......................................................... 37,110,000
==========
</TABLE>
Additionally, the Licensee has fulfilled in due time and manner the
mandatory investments for 1993, 1994, and 1996, and was notified of such
fulfillment by ENARGAS following an operating audit of such investments. As a
consequence of the differences in criteria regarding the investments
corresponding to the year 1995, the Regulatory Authority has required Camuzzi
Pampeana S.A. to post a U.S.$216,400 guarantee until the situation is settled.
Mandatory investments for the year 1997 are pending approval by the Regulatory
Authority.
NOTE 7: ISSUANCE OF NOTES BY THE SUBSIDIARY COMPANY
On December 11, 1996, together with Camuzzi Gas del Sur S.A., Camuzzi Gas
Pampeana S.A. issued jointly and severally Notes not convertible into shares
under a Medium-Term-Note Program which was approved by Resolution No. 136 of
the CNV dated December 6, 1996.
I-99
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Such issue was approved by the Board of Directors of the Licensee on
November 12, 1996; the main purpose of this issue was to provide Camuzzi Gas
Pampeana S.A. with an important availability of funds in order to (i)
refinance Series B of the Notes in an aggregate principal amount of
U.S.$90,000,000 issued jointly and severally with Camuzzi Gas del Sur S.A.
under the Note Program approved by the Company's Shareholders' Meeting dated
October 25, 1993; (ii) develop its investment plans; (iii) pay up working
capital and (iv) refinance other liabilities.
The conditions for the issuance are as follows:
. Aggregate principal amount: U.S.$130,000,000
. Percentage corresponding to Camuzzi Gas Pampeana S.A.: 61.11%
. Interest rate: 9 1/4%, payable semi-annually in arrears.
. Price: 99.80%.
. Maturity of principal: December 15, 2001.
The aforementioned program was created under a joint issuance with Camuzzi
Gas del Sur S.A., and the two companies will be jointly and severally liable
for the payment of interest and principal.
On May 9, 1997, the issued Notes were registered before the United States
Securities and Exchange Commission (SEC).
The main restrictions under the offering circular for the issuance of Notes
are the following:
(a) Limitations on Liens: neither of the Issuers shall, nor shall either of
the Issuers permit any of their respective Subsidiaries to, incur, assume or
suffer the existence of, any lien upon its property, assets or revenues,
whether now owned or hereafter acquired, securing any indebtedness of any
person, unless the Notes are equally and ratably secured by such Liens, except
for:
(i) Liens existing on the Issue Date of the Notes:
(ii) Liens for taxes or other governmental charges not yet due or which
are being contested in good faith by appropriate proceedings; provided that
adequate reserves with respect thereto are maintained on the books of such
Issuer or such Subsidiary Company, as the case may be, in conformity with
Argentine professional accounting standards;
(iii) Liens on all or part of any property, assets (including, without
limitation, equity interests) or revenues to secure indebtedness incurred
solely for purposes of financing the acquisition, construction or
installation thereof incurred concurrently with or within 120 days after
the completion of such acquisition, construction or installation, or liens
on any property, assets (including, without limitation, equity interests)
or revenues existing on the date of the acquisition thereof;
(iv) Liens arising in the ordinary course of business which do not secure
indebtedness and which (A) are not in effect for a period of more than 60
days, (B) are being contested in good faith by appropriate proceedings,
which have the effect of preventing the forfeiture or sale of the property
or the assets subject to any such lien, or (C) secure an obligation of less
than U.S.$1,000,000;
(v) Any attachment or judgment lien, unless (A) within 60 days after the
entry thereof, its discharge has not been filed or execution thereof stayed
pending appeal, (B) shall not have been discharged within 60 days after the
expiration of any such stay or (C) is for an amount less than
U.S.$1,000,000;
I-100
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(vi) Liens created or deposits made to secure the performance of bids,
trade contracts, leases, statutory obligations, surety and appeal bonds and
other obligations of a like nature incurred in the ordinary course of
business;
(vii) Any lien imposed by operation of mandatory provisions of applicable
law that do not materially affect the Shareholders' Equity of the Issuers
to perform their respective obligations under the Notes or Indenture;
(viii) Liens other than those described in the foregoing clauses (i)
through (vii) upon the property, assets or revenues of either or both of
the Issuers or any of their respective Subsidiaries securing indebtedness
in an aggregate principal amount not in excess of U.S.$10,000,000 (or its
equivalent in other currencies) at any time outstanding; and
(ix) Any extension, renewal or replacement, in whole or in part, of any
lien described in the foregoing clauses (i) through (viii), provided that
(A) such extension, renewal or replacement does not extend to any property
other than that originally subject to the liens being extended, renewed or
replaced and (B) the principal amount of the indebtedness secured by such
lien is not increased.
(b) Maintenance of the Net Worth to Consolidated Indebtedness Ratio: Neither
of the Issuers shall permit the ratio of its Net Worth to its Consolidated
Indebtedness to be less than 1 to 1.
(c) Restrictions on Sale and Lease-Back Agreement: Neither of the Issuers
shall, nor shall either of the Issuers permit any Subsidiary Company to, enter
into any Sale and Lease-Back Agreement with respect to any property unless (i)
such agreement involves a lease for a term of no more than three years by the
end of which it is intended that the use of such property by the lessee shall
be discontinued, (ii) such agreement is between the Issuers, or between either
or both of the Issuers and a Subsidiary Company, or between Subsidiaries,
(iii) the Issuers or any Subsidiary Company would not be entitled to incur
indebtedness secured by a mortgage on the property involved in such agreement
at least equal in amount to the Attributable Debt with respect to such Sale
and Lease-Back Agreement, without equally and ratably securing the Notes, (iv)
the proceeds of such agreement are at least equal to the fair market value
thereof (as determined in good faith by the Board of Directors of each of the
Issuers) and the Issuers apply an amount equal to the greater of the net
proceeds of such sale or the Attributable Debt with respect to such Sale and
Lease-Back Agreement within 180 days of such sale to either (or a combination
of) (A) the amortization (other than any mandatory amortization, mandatory
prepayment or sinking fund payment or by payment at maturity) of debt for
borrowed money of either or both of the Issuers or a Subsidiary Company (other
than debt that is subordinated to the Notes or debt to either or both of the
Issuers or a Subsidiary Company) that matures more than 12 months after the
creation of such debt or (B) the purchase, construction or development of
other comparable property, or (v) such agreement is entered into within 120
days after the initial acquisition by such Issuer or the Subsidiary Company,
as the case may be, of the property subject to such agreement.
(d) Merger, Consolidation or Sale of Assets: Neither of the Issuers will
merge into or consolidate with any person or sell, lease, transfer or
otherwise convey or dispose of all or substantially all of its assets, whether
by one transaction or a series of transactions, to any person, (a) unless, in
the case of any such merger or consolidation, (i) such Issuer is the successor
person and (ii) any Noteholder who elects to be guaranteed or repaid upon such
merger or consolidation pursuant to Argentine law is so guaranteed or repaid
by either of the Issuers, or (b) unless, in the case of any such other
transaction, (i) immediately after giving effect to such transaction or series
of transactions, no Event of Default or event which, after the giving of
notice or the lapse of time or both, would constitute an Event of Default,
will have occurred and be continuing, (ii) the successor person is a company
that will expressly assume the obligations of such Issuer under the Notes and
the Indenture, and (iii) such Issuer shall have delivered to the Trustee an
officer's certificate and an opinion of counsel stating that such merger,
consolidation, sale, lease, transfer or other conveyance or disposition
complies with the Notes
I-101
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
and that all conditions precedent therein relating to such transaction have
been met. Upon the occurrence of any such merger, consolidation, sale, lease,
transfer or other conveyance or disposition of all or substantially all of
such Issuer's assets, the successor person will succeed to and become
substituted for the Issuer or both Issuers, as the case may be, and may
exercise every right and power of such Issuer with the same effect as if it
had been named in the Notes and the Indenture and, thereafter, such Issuer
will be released from its liability as obligor on the Debt Securities and
under the Indenture.
NOTE 8: RESTRICTIONS ON THE SUBSIDIARY COMPANY'S ASSETS
Assets essential for the rendering of the service
Pursuant to the provisions of the terms and conditions for the privatization
of the natural gas distribution services, the Company must obtain ENARGAS's
prior consent to sell, assign, encumber or dispose of assets essential for the
service. Failure to secure such consent may result in the revocation of the
License.
NOTE 9: AMOUNTS TO BE RECOVERED BY CAMUZZI GAS PAMPEANA S.A. FROM BANCO
MERCOBANK S.A.
The Central Bank of the Argentine Republic (the "Central Bank"), through
Resolution No. 365 dated August 20, 1997, suspended Banco Credito Provincial
S.A. from operating as an authorized banking company, except with respect to
those transactions with the Central Bank relating to from monetary and/or
exchange regulation transactions; purchase and credit card transactions in
effect as at such date; credit collection transactions, transactions involving
fund management or related to the compliance with labor, social security or
tax obligations; and the payment of pensions with funds provided for by the
National Social Security Administration.
In addition, on December 18, 1997, the Central Bank pursuant to Resolution
No. 741, authorized a group of Banco Credito Provincial S.A.'s most
significant depositors to acquire interests in Mercobank S.A., a retail
commercial bank created pursuant to section 7 of the Argentine Financial
Institutions Law.
In exchange for the remaining outstanding deposits not assumed by Mercobank
S.A., Camuzzi Gas Pampeana S.A. received Ps. 861,401 in Series C Certificates
issued by the trust created by Mercobank S.A., with Promotora Fiduciaria S.A.
serving as trustee, representing 40% of the amounts due from Banco Credito
Provincial S.A.
On August 25, 1998, Mercobank S.A. capitalized 22.53% of the amounts
corresponding to the Series C Certificates in shares.
Accordingly, 194,076 ordinary shares have been subscribed, with a par value
of Ps. 1 (one peso) each.
On April 30, 1999, the Ordinary and Extraordinary Shareholders' Meeting of
Mercobank S.A. approved a capital increase of Ps. 40,000,000, through the
capitalization of the fixed term deposits made by the shareholders.
Furthermore, a capital decrease of Ps. 20,144,000 was approved in order to
absorb accumulated losses. Consequently, as of December 31, 1999, the amount
of the shares and Series "C" Certificates totalled Ps. 1,038,639 and Ps.
667,325, respectively.
The Subsidiary Company set up an allowance of Ps. 667,325 corresponding to
the portion of doubtful collectibility of the Series C Certificates it
received. Regarding the shares held by the Subsidiary Company, as mentioned in
Note 2.f., the same were valued at their estimated recovery value, and,
consequently, an allowance for depreciation amounting to Ps. 641,611 was set
up.
I-102
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 10: DEBT CERTIFICATES RELATED TO THE CONTRIBUTION OF IMPROVEMENTS HELD BY
THE MUNICIPALITY OF VILLA GESELL
As of the date of these Financial Statements, the Municipality of Villa
Gesell holds debt certificates related to the contribution of improvements
belonging to Distribuidora Gesell Gas S.A. for an aggregate amount of Ps.
1,573,488, which have been timely submitted for confirmation, their collection
not being due as of December 31, 1999. (see Note 2.e).
Furthermore, Ps. 708,064 are included under Other non-current assets caption
for the proportion of the cost of the work related to income to be
acknowledged at the time of the confirmation of such certificates enforcement.
(see Note 2.g).
NOTE 11: ADJUSTMENTS TO THE INITIAL FINANCIAL STATEMENTS OF I.V. INVERGAS S.A.
This note makes reference to the adjustments to the Special Balance Sheet
prepared in relation to the corporate spin-off upon which Distribuidora Gesell
Gas S.A., subsidiary company of I.V. Invergas S.A., was originated.
On November 20, 1999, the revision process of the Spin-off Special Balance
Sheet as of December 31, 1998 of the subsidiary company Distribuidora Gesell
Gas S.A. was completed.
As a result of such revision process, certain adjustments to the above-
mentioned Spin-off Special Balance Sheet have arisen, the effect of which has
been recognized as a higher value of the investments in the Financial
Statements of the Subsidiary Company as of December 31, 1999.
NOTE 12: NON-CURRENT INVESTMENTS OF THE SUBSIDIARY COMPANY
On May 28, 1999, the Subsidiary Company acquired 100% of the shares of I.V.
Invergas S.A. for Ps. 2,950,000. I.V. Invergas S.A. holds 100% of the shares
and voting rights of Distribuidora Gesell Gas S.A. (the "New Company"), which
was created as a result of a spin-off by Coarco S.C.A. Such acquisition was
made subject to the approval of the Ente Nacional Regulador del Gas. The
principal assets of the New Company are: (a) the concession for the
distribution of gas in the city of Villa Gesell, Province of Buenos Aires; (b)
all of the assets used in the gas subdistribution activities under the
Concession Agreement; and (c) the right to collect any and all the sums (and
proprietary rights over any and all such sums) from debtors for improvements,
whether due or to become due, made pursuant to works performed under the
Concession Agreement.
On July 6, 1999, the Ente Nacional Regulador del Gas approved the Agreement
entered into between Coarco S.C.A. and the Municipality of Villa Gesell,
pursuant to which the Municipality transferred the concession of such
subdistribution service to Coarco S.C.A.
On August 26, 1999, the Camuzzi Gas Pampeana S.A. decided to sell one share
of I.V. Invergas S.A. to Sodigas Pampeana S.A. Consequently, the Subsidiary
Company's interest in I.V. Invergas S.A. represents 99.991667% of its capital
stock.
NOTE 13: RECORDABLE ASSETS OF THE SUBSIDIARY COMPANY
As regards the real estate transferred under the Transfer Contract, the
Subsidiary Company has effected the corresponding deeds with the Argentine
General Notary Public, and only isolated and irrelevant cases are pending.
Additionally, the Subsidiary Company completed the transfer of all the
vehicles.
I-103
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 14: CONSTRUCTION FUNDED BY THIRD PARTIES BY THE SUBSIDIARY COMPANY,
CAMUZZI GAS PAMPEANA S.A.
Constructions funded by third parties, incorporated into the Subsidiary
Company's network during the fiscal years ended December 31, 1999 and 1998,
were the following:
<TABLE>
<CAPTION>
For the fiscal years
ended
December 31,
---------------------
1999 1998
---------- ----------
(Pesos)
<S> <C> <C>
. For valuable consideration......................... 2,540,632 3,188,972
</TABLE>
On February 8, 1996, ENARGAS issued Resolution No. 268/96, which sets forth
that regarding construction fully or partially financed by third party users,
such users should receive a discount based on the difference between the value
of the construction and the amount actually discounted, if any.
By means of ENARGAS' Resolution No. 356, dated August 22, 1996, the
Regulatory Authority established the amounts to be recognized to the users
mentioned above according to the business value determined by such entity.
In compliance with this resolution, regarding networks transferred free of
charge, during the fiscal year 1996, the Subsidiary Company recorded a
liability in an amount estimated as the payment price in m/3/ of gas which was
debited from a reserve set up in previous years for this purpose. In those
projects in which the payments made by the Licensee differed from those set
forth by the Regulatory Authority, the liability corresponding to such
difference was accounted for. Both liabilities were valued at current tariffs.
Furthermore, on February 3, 1997, by means of Resolution No. 422 the
Regulatory Authority set the charges that the Gas Distribution Companies shall
have to pay to third party users financing network extension works; such
amount resulted from the business value set forth by ENARGAS. This resolution
was only applicable to works transferred to the Licensee Companies in 1996.
As regards works to be financed by future clients, commenced and transferred
to the net worth of the Licensees in 1997, the Regulatory Authority issued
Resolution No. 587, dated March 16, 1998, whereby it established the
consideration to be granted to the clients, in accordance with the
methodological guidelines included therein.
As of the date hereof the Subsidiary Company has taken the necessary steps
to implement the reimbursement of the cubic meters duly suggested by the
ENARGAS.
Subsequently, the ENARGAS, through Order No. 4,688 dated December 30, 1997,
modified the criteria previously established by its Resolutions No. 356/96 and
422/96 and Order No. 1877/96, in connection with the obligation of the
Distribution Service Licensees to grant provisions to third party users who
totally or partially paid undertakings related to new networks or extensions
thereof.
This amendment consists, basically, in the replacement of the obligation of
such users to file the documentation evidencing their contribution, as called
for by the above-mentioned resolutions, by the execution of an affidavit in
relation thereof.
The above-mentioned order of ENARGAS has been challenged by the Subsidiary
Company on the grounds that it affects its legitimate rights. However, the
Subsidiary Company undertook a study to determine its liability in connection
with the compliance with such order. Such study revealed that if the existing
users and the potential
I-104
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
users which have transferred assets without monetary compensation are entitled
to the discounts set forth in the ENARGAS' resolutions, the maximum increase
in the liabilities would amount to Ps. 1.7 million. This amount has been
reflected in these Financial Statements as a withdrawal from the voluntary
reserve.
In addition, it should be noted that such liability may be substantially
lower due to the fact that it was calculated considering that all the users
would request such discounts and the addition of users to such works are
complied. Once the term fixed by the regulatory authority for the granting of
discounts is finished, an analysis of the actual value of in project shall be
made upon the basis of the users really added and of the value to the
business, increasing or decreasing the value of the liability as applicable.
As regards the networks transferred for a consideration, the liability shall
also be fixed at the amounts agreed to with the third party transferors.
NOTE 15: LEGAL AND TAX MATTERS
a. Income tax
On January 30, 1998, the Subsidiary Company filed an amended tax return to
modify the depreciation of fixed assets transferred to the Subsidiary Company
without consideration. The amended return takes into account a change in the
tax rules governing valuation of networks incorporated by the Subsidiary
Company prior to June 1995, by reference to valuation rules specified in
resolutions of the Ente Nacional Regulador del Gas (ENARGAS) with respect to
the transfer of networks funded by third parties to the Operating Companies.
The criteria applied by the Subsidiary Company in its amended return was not
acknowledged by the Argentine Tax Authority ("AFIP") and on July 6, 1999 the
AFIP notified the Subsidiary Company of an assessment for taxes on income
related to gas networks transferred without consideration. The assessment
totalled Ps. 21.7 million in income tax owed plus Ps. 40.3 million in interest
and fines. On August 11, 1999, the Subsidiary Company filed an appeal with the
Argentine Tax Court.
The Subsidiary Company believes, based on the advice of its legal counsel,
that the filing of the amended return and application of the ENARGAS criteria
for tax purposes should have resolved the assessment, and therefore any
attempt of the AFIP to continue with the case would not be succesful.
b.Gross sales tax--Province of Buenos Aires
The Province of Buenos Aires Revenue Board (the "DPRPBA") has challenged the
Subsidiary Company's gross sales tax returns, and has assessed claims of Ps.
8,853,585 and Ps. 7,386,021 for the fiscal years from December 1992 through
February 1995, and from March 1995 to June 1996, respectively, not including
fines and accessory charges. Such difference arises mainly from the fact that
the tax authority claims that the tax base on which the tax rate should be
applied for computing gross sales taxes on gas sales should include all
revenue obtained, as gas prices are no longer regulated by the State after the
privatization and as such the tax base is no longer regulated by the
provisions of Section 141(a) of the Tax Code.
The Subsidiary Company contends that the tax basis is the difference between
the purchase and sale price.
On November 25, 1996, the General Revenue Board issued a final opinion
stating that, in its opinion, Camuzzi Gas Pampeana S.A. must pay gross sales
tax on its total sales and not on the distribution margin. On December 13,
1996, the General Revenue Board further explained some points of the opinion
indicating that, according to such body, the change of criterion had derived
from the fact that as from the takeover of the natural gas distribution
service by the Licensees, the regulations set forth under the Tax Code
(Section 136, Subsection
I-105
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(e) and Section 141, Subsection (a)) are not valid, since the Government, upon
withdrawing from the business, no longer regulates the official selling
prices.
Although the Subsidiary Company's legal counsel advised the Subsidiary
Company of the soundness of its position, the final opinion issued by the
General Revenue Board, which explicitly adopts the tax criteria adopted by the
Province of Buenos Aires, substantially changed the tax burden of the
Licensee. Therefore, because the Subsidiary Company is not legally required to
participate in a judicial proceeding, the results of which cannot be assured
in spite of its sound defense, and because its property would be subject to
attachment throughout the course of such proceeding, on December 19, 1996, the
Subsidiary Company availed itself of a tax amnesty program pursuant to the
provisions of the Provincial Law 11,808 (Official Gazette July 10, 1996).
The foregoing implementation of new criteria altered the Licensee's tax
burden generating a cost fluctuation and clearly constituting a "tax change".
This event was considered as a non-recurring tariff adjustment pursuant to
clause 9.6.2. of the Distribution License and by law 24,076.
Through Resolution No. 544 dated November 17, 1997 and pursuant to the
applicable regulations, ENARGAS authorized the pass-through to the tariffs of
the tax liabilities incurred as a result of the legal changes in the payment
of the tax in accordance with the methodology set forth by such Regulatory
Authority in its note No. 108 dated January 12, 1998.
As mentioned above, because a "change of tax rules" generates a right for
the Subsidiary Company to pass through the added cost to the tariffs as
envisaged in clause 9.6.2. of the Distribution License and in Law No. 24,076,
Camuzzi Gas Pampeana S.A. accounted for the amounts recognized as tax payable,
together with the payments made for the taxable basis of all income from gas
sales, with a balancing entry in the form of a receivable to be collected from
the users in future billings.
On October 8, 1999, the Subsidiary Company received Order No. 4,107 issued
by ENARGAS which provides a new calculation for tax charges based on
Resolution 544/97. Camuzzi Gas Pampeana S.A. believes that the claim is
unfounded and filed a Motion for Reconsideration contending that the order is
inconsistent with the provisions of Resolution 544/97 and with Order No. 108
dated January 12, 1998 issued by ENARGAS, which sets forth the amounts
authorized to be passed through to the tariff.
As of December 31, 1999, the receivable to be recovered totalled Ps.
25,411,276, of which, Ps. 3,057,091 were recorded under "Other Current
Accounts Receivable" and Ps. 22,354,184 under "Other Non-Current Accounts
Receivable".
c.Municipal taxes
Municipal tax regulations generally include a tax on the use of easements.
The imposition of such tax conflicts with Federal Regulations.
The distribution license grants the Licensee underground rights of way free
of charge. The license authorizes the Licensee to pass through to consumers
any cost increase attributable to a municipal tax levied and ratified by a
court.
Clause 6.1 of the Distribution License states: "while the Licensee is in
charge of the service, the Licensee shall have the right to use free of charge
any street, avenue, square, bridge, road and any other public place, including
the subjacent and air spaces, necessary for the installation of facilities for
the licensed service, including communication lines and interconnections with
third parties".
I-106
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Nonetheless, if a court, pursuant to a final non-appealable judgment,
upholds a provincial or municipal tax levied on the Licensee's underground
right of way, the Licensee may pass through such additional cost to consumers
residing within the jurisdiction in which such tax is applicable. The
Regulatory Entity is required to act in accordance with the Clause 9.6.2 of
the License, without any right of claim against the Subsidiary Company or Gas
del Estado.
In addition, under the Argentine Budget Law No. 24,624/95 applicable to the
year 1996, in order to be entitled to the subsidies set forth in such law, the
municipal rates for the use of subjacent space have to be abolished as from
January 1, 1996.
The following are the most relevant current disputes related to taxes on
underground rights:
Municipality of La Plata, Province of Buenos Aires: On October 19, 1995, the
Subsidiary Company was served an official assessment from the Municipality of
La Plata for the payment of Ps. 2,730,141, not including penalties and other
expenses. The Subsidiary Company timely contested the claim with the
applicable administrative authorities.
Municipality of Realico, Province of La Pampa: The principal amount assessed
by the Municipality of Realico totals Ps. 4,137. The Subsidiary Company
contested the assessment, which was denied.
Municipality of Coronel Suarez, Province of Buenos Aires: The principal
amount claimed totals Ps. 6,300. The Subsidiary Company has filed a Motion for
Reconsideration.
Municipality of Necochea, Province of Buenos Aires: The Municipality claimed
the payment of taxes on the permanent tourism fund amounting to Ps. 119,240,
including interest, for the February 1993 through February 1999. The
Subsidiary Company contested the claim by filing a Recurso de Revocatoria con
Recurso Jerarquico en subsidio.
Municipality of Mar del Plata, Province of Buenos Aires: The Subsidiary
Company entered into an agreement with the Municipality, pursuant to which the
Municipality granted an exemption (previously granted to Gas del Estado S.E.),
to the payment of municipal taxes, rights and liens prior to the last quarter
of 1998. As of such period, the Subsidiary Company has undertaken to pay the
aforementioned items, except for those corresponding to use and occupation of
public spaces, which will be deferred until the matter is resolved by the
applicable administrative and/or judicial proceedings.
Municipality of Las Flores, Provincia de Buenos Aires: The amount claimed
totals Ps. 20,083, and Ps. 10,000 were budgeted for interest and legal costs.
As the Subsidiary Company was served with a complaint in executory
proceedings, the Subsidiary Company contested the claim and filed a motion to
dismiss the case. The judgement rendered favored the Subsidiary Company;
therefore, the Municipality appealed to the Court of Appeal, which agreed to
hear the case. In addition, the Municipality levied an attachment of the
Subsidiary Company's assets in the amount of the claim.
The Subsidiary Company has set up a Ps. 22,500 provision, which is accounted
for under the "Provisions" caption.
In the opinion of the Subsidiary Company, except for the pending action with
the Municipality of Las Flores, for which a provision has been set up, an
adverse decision in relation to the aforementioned claims is unlikely.
I-107
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
d.Stamp tax
d.1. The Revenue Board of the Province of Neuquen notified Camuzzi Gas del Sur
S.A. that it had computed a stamp tax on the gas purchase agreements
entered into jointly with the Subsidiary Company, in the amount of Ps.
10,400,134. The notice was responded to and the resolution was
interrupted on account of the moratorium decrees. Subsequently,
statements were filed with the Argentine Ministry of Economy asking for
an opinion in connection with such matter. The province issued Special
Decree No. 3534 allowing the regulated companies to avail themselves to a
moratorium until November 6, 1998, subsequently extended to January 11,
1999.
Additionally, on January 7, 1999, the ENARGAS submitted a report to the
Argentine Ministry of Economy, stating that "the taxes claimed by Neuquen,
will unfailingly lead to a tariff increase, with a serious damage to the
users".
The deadline expired on January 11, 1999 and has not been further extended.
On September 24, 1999, the Subsidiary Company was served a notice informing
it that the audit performed by independent public accountants engaged by the
Province of Neuquen's Revenue Board had been closed. The assessment of the
debt for stamp tax on natural gas purchase agreements entered into jointly
with Camuzzi Gas del Sur S.A. amounted to Ps. 5,017,021, not including
penalties or other charges.
As of December 31, 1999, the Subsidiary Company has reserved Ps. 1,536,551
in such regard.
On January 18, 2000, the Subsidiary Company was notified of the amendment of
the initial amount, which, as amended, totalled Ps. 5,028,358, of which Ps.
4,155,331 are included in the original notice. The aggregate claim for both
companies amounts to Ps. 11,273,161. At the date hereof, the Subsidiary
Company has not received further notice from the Revenue Board.
Currently, the Licensee is waiting for a ruling by the Ministry of Economy.
d.2 On December 15, 1999, the Revenue Board notified the final assessment of
stamp tax for an amount of Ps. 6,089,767, derived from the gas transport
agreements entered into with Transportadora de Gas del Sur S.A., before
the privatization, when Gas del Estado S.E. was the only shareholder of
the Subsidiary Company.
The Subsidiary Company has notified the Direccion Nacional de Normalizacion
Patrimonial, the Liquidation Entities Coordinator and Gas del Estado S.E.
that, in accordance with the provisions of the Transfer Agreement, any
national, provincial or municipal stamp tax assessed on agreements related
thereto, shall be borne by Gas del Estado S.E. or the Argentine Government.
Camuzzi Gas Pampeana S.A. believes that these agreements were not subject to
provincial stamp tax due to the fact that the parties who entered into said
agreements were Argentine state-owned companies, and are therefore exempt from
such tax. Although such agreements were subject to stamp tax, Camuzzi Gas
Pampeana S.A. considers that Gas del Estado S.E. would be the party liable for
the payment of this tax, in accordance with the provisions of the Transfer
Agreement.
On December 29, 1999, the Subsidiary Company filed a Motion for
Reconsideration against the Revenue Board determination.
The Subsidiary Company believes, based on the advice of its legal counsel,
that, other than as described in paragraph d.1., it is unlikely that such
claim will be resolved unfavorably for the Subsidiary Company.
I-108
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
d.3 On December 29, 1999, the Revenue Board of the Province of Santa Cruz
served a notice of administrative proceedings assessing Ps. 1,466,120
against the Subsidiary Company in relation to the stamp tax on gas
purchase agreements entered into jointly with Camuzzi Gas del Sur S.A.
On January 20, 2000, the Subsidiary Company filed its defense in relation to
the notice received.
The Subsidiary Company contends that the stamp tax does not apply to gas
purchase agreements, which it believes are not instruments subject to the tax.
d.4 The Revenue Board of the Province of Rio Negro served Transportadora de
Gas del Sur S.A. with a notice claiming stamp tax as due with respect to
natural gas transport agreements entered into with the Subsidiary Company.
As of the date of these financial statements, the Subsidiary Company has not
received any notice from the Revenue Board of the Province of Rio Negro that a
claim has been filed. Nonetheless, in the event a claim is filed by the Tax
Authority and an adverse judgement is made, Camuzzi Gas Pampeana S.A. would
have to pay 50% of the tax applicable to the operations performed after the
takeover amounting to approximately Ps. 15.1 million. In addition,
Transportadora de Gas del Sur S.A. could bring an action for reimbursement
against the Subsidiary Company, if it were obligated to pay the entire amount
claimed. Furthermore, Transportadora de Gas del Sur S.A. has received a claim
for payment of Ps. 2.1 million for stamp taxes with respect to agreements
transferred by Gas del Estado which set forth the Argentine Government as the
sole responsible party.
d.5 The Revenue Board of the Province of Santa Cruz has notified
Transportadora Gas del Sur S.A. of a claim for stamp tax on the natural
gas transport agreements entered into with the Subsidiary Company.
As of the date hereof, the Subsidiary Company has received no notice in
relation thereto from the Revenue Board of the Province of Santa Cruz.
However, if the claim filed by the Revenue Board were decided against the
Subsidiary Company, Camuzzi Gas Pampeana S.A. would have to pay 50% of the tax
corresponding to the operations conducted after the privatization, which tax
would amount to Ps. 1.1 million.
In addition, Transportadora de Gas del Sur S.A. could seek contribution from
the Subsidiary Company, if it were obliged to pay the claimed tax in full.
Also, Transportadora de Gas del Sur S.A. has received a Ps. 0.6 million claim
for payment of stamp taxes with respect to the agreements transferred by Gas
del Estado, which set forth Gas del Estado as the sole responsible party.
The Subsidiary Company believes, based on the advice of its legal counsel,
that it has a strong defense to the matters described in paragraphs d.3, d.4
and d.5 above in light of the manner in which the agreements were documented,
and therefore, an adverse decision in relation to the aforementioned claims is
not deemed probable.
e.Others
On August 8, 1998, the Ministry of Economy and Public Works and Services
filed a claim for Ps. 656,485 for differences in amounts collected on overdue
invoices. Schedule XXI of the Share Transfer Agreement provides that Camuzzi
Gas Pampeana S.A. is responsible for collecting such amounts for Gas del
Estado S.E.
The Subsidiary Company duly set up an allowance of Ps. 220,000 to satisfy
the claim. The Subsidiary Company considers such amount to be sufficient.
NOTE 16: CAMUZZI GAS PAMPEANA S.A.'S ESSENTIAL ASSETS INVENTORY
In compliance with ENARGAS' Resolution No. 60, the Subsidiary Company made
an inventory of its essential assets as of December 31, 1997, which was
certified on October 26, 1998 by an independent expert specialized in that
field.
I-109
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
As a result of said work finished during 1998, differences were detected
between the recorded value and the book value of the assets which reduced the
assets timely recorded in an amount of approximately Ps. 12.8 million.
Due to the fact that the Subsidiary Company maintained a voluntary reserve
account consisting of gas distribution networks financed by third parties and
transferred free of charge, Camuzzi Gas Pampeana S.A. offset the
aforementioned difference against the voluntary reserve.
NOTE 17: FIVE-YEAR TARIFF REVIEW
On December 31, 1997, the Ente Nacional Regulador del Gas issued Resolution
No. 468 whereby it approved the five-year tariff review and established new
values for the K and X factors corresponding to each component of the tariff.
Such values were applicable during the 1998-2002 five-year period.
The incorporation of these two factors (with K representing the Investment
factor and X representing the Efficiency factor) has been contemplated within
the existing tariff scheme. Such factors will be added and subtracted
respectively from the margin of distribution and, therefore, will affect the
final tariff for the next five-year period.
During the year 1997, the Subsidiary Company submitted its proposed
investments for the determination of the K factor, which, once reviewed by the
ENARGAS, were approved at the end of October 1997 for the La Pampa Norte
subarea, and which will be in force as from the second semester of 1998.
Simultaneously, the ENARGAS defined an efficiency factor (X) of 4.5% for the
Subsidiary Company as from January 1, 1998, which considers the improvements
to be achieved in that respect in the next five-year period.
NOTE 18: CAMUZZI GAS PAMPEANA S.A.'S SALES OF LIQUIDS
As required by ENARGAS through its note No. 3299 dated October 26, 1994, the
Subsidiary Company's sales of extracted liquids and their respective costs for
the fiscal year ended December 31, 1999 are disclosed below:
<TABLE>
<CAPTION>
(Pesos)
----------
<S> <C>
Net sales....................................................... 17,899,004
Direct costs of sales........................................... 15,554,421
</TABLE>
NOTE 19: SALE OF THE SHARES AFFECTED TO THE EMPLOYEE STOCK OWNERSHIP PLAN OF
THE SUBSIDIARY COMPANY
In September, 1999, the Executive Committee of the Employee Stock Ownership
Plan resolved to sell its aggregate shareholding in the Subsidiary Company,
therefor engaging Lopez Manan, Fravega & Asoc., a consulting company. On
December 13, 1999, offers were first made and such holdings were awarded to
Camuzzi Argentina S.A. As of the date hereof, the process has not been
completed and therefore, the shares have not yet been transferred.
I-110
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 20: INFORMATION SYSTEMS ADAPTATION PROCESS OF THE SUBSIDIARY COMPANY,
CAMUZZI GAS PAMPEANA S.A. (NOT INCLUDED IN THE AUDITORS' REPORT)
The Subsidiary Company began a process to update its information systems and
related technologies, which has been given priority by the Board of Directors.
The work methodology adopted assigns different teams to make the
administrative, invoicing, human resources, hardware and software systems year
2000 compliant. Upon commencement of the year 2000, no failures have been
detected in the administrative, invoicing, human resources, hardware and
software systems in relation to the Y2K.
I-111
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
FIXED ASSETS
For the Fiscal Years Ended December 31, 1999 and 1998
Schedule A
<TABLE>
<CAPTION>
Depreciation of the Year
----------------------------------------------
Accumulated
Value as of as of Accumulated
beginning Value as of beginning as of end
Principal account of year Additions Transfers Write-offs end of year of year Amount(1) Write-offs of year
----------------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ---------- -----------
(Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Land.............. 4,711,706 -- (6,771) -- 4,704,935 -- -- -- --
Condominiums...... 816,147 -- (192,258) -- 623,889 101,722 18,132 -- 119,854
Buildings......... 14,263,215 -- 470,849 -- 14,734,064 1,985,688 388,044 -- 2,373,732
Facilities........ 7,677,688 17,388 151,384 -- 7,846,460 936,665 258,586 -- 1,195,251
Gas pipelines..... 178,167,520 -- 11,112,537 -- 189,280,057 34,835,174 5,000,158 -- 39,835,332
Main and secondary
pipelines......... 37,620,144 -- 9,790,977 -- 47,411,121 7,988,758 1,203,312 -- 9,192,070
Distribution
networks.......... 270,962,397 3,742,661 (14,678,041) -- 260,027,017 47,303,309 8,150,699 -- 55,454,008
Machinery and
equipment......... 3,286,582 565,255 (41,455) -- 3,810,382 647,556 155,850 -- 803,406
Pressure reduction
stations.......... 12,070,606 -- 393,687 -- 12,464,293 2,093,697 422,124 -- 2,515,821
Processing
equipment......... 783,721 -- 64,404 -- 848,125 23,462 15,629 -- 39,091
Vehicles.......... 6,762,713 498,541 480 -- 7,261,734 4,309,130 517,300 -- 4,826,430
Furniture and
office equipment.. 1,861,014 99,064 (1,018) -- 1,959,060 496,567 133,480 -- 630,047
Gas meters........ 45,202,832 71,024 3,170,178 (528,301) 47,915,733 12,136,061 2,242,809 (232,072) 14,146,798
Gas cylinders..... 1,189 -- 3 -- 1,192 359 60 -- 419
Works in
progress.......... 7,583,211 20,705,883 (4,336,802) -- 23,952,292 -- -- -- --
Computer
equipment......... 5,899,793 1,976,835 1,015 -- 7,877,643 5,419,688 512,516 -- 5,932,204
Communications
equipment......... 5,715,339 74,144 (23,479) -- 5,766,004 1,779,456 556,887 -- 2,336,343
Material at
warehouses........ 3,631,391 5,882,846 (4,182,011) (2,848,075) 2,484,151 -- -- -- --
Advances to
suppliers......... 702,426 3,249,996 (1,693,679) (52,710) 2,206,033 -- -- -- --
----------- ---------- ----------- ----------- ----------- ----------- ---------- ---------- -----------
Total as of
December 31,
1999............ 607,719,634 36,883,637 -- (3,429,086) 641,174,185 120,057,292 19,575,586 (232,072) 139,400,806
----------- ---------- ----------- ----------- ----------- ----------- ---------- ---------- -----------
Total as of
December 31,
1998............ 598,578,008 26,189,135 -- (17,070,035) 607,697,108 102,319,435 19,380,111 (1,642,254) 120,057,292
=========== ========== =========== =========== =========== =========== ========== ========== ===========
<CAPTION>
Net carrying value as
of December 31,
-----------------------
Principal account 1999 1998
----------------- ----------- -----------
(Pesos) (Pesos)
<S> <C> <C>
Land.............. 4,704,935 4,711,706
Condominiums...... 504,035 714,425
Buildings......... 12,360,332 12,277,527
Facilities........ 6,651,209 6,740,613
Gas pipelines..... 149,444,725 143,332,346
Main and secondary
pipelines......... 38,219,051 29,631,386
Distribution
networks.......... 204,573,009 223,659,088
Machinery and
equipment......... 3,006,976 2,637,722
Pressure reduction
stations.......... 9,948,472 9,976,909
Processing
equipment......... 809,034 760,259
Vehicles.......... 2,435,304 2,441,748
Furniture and
office equipment.. 1,329,013 1,361,188
Gas meters........ 33,768,935 33,066,771
Gas cylinders..... 773 830
Works in
progress.......... 23,952,292 7,583,211
Computer
equipment......... 1,945,439 475,457
Communications
equipment......... 3,429,661 3,934,813
Material at
warehouses........ 2,484,151 3,631,391
Advances to
suppliers......... 2,206,033 702,426
----------- -----------
Total as of
December 31,
1999............ 501,773,379 --
----------- -----------
Total as of
December 31,
1998............ -- 487,639,816
=========== ===========
</TABLE>
- ----
Note:
(1) The accounting allocation of depreciation charges for the year is described
in Schedule H.
I-112
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
INTANGIBLE ASSETS
For the Fiscal Years Ended December 31, 1999 and 1998
Schedule B
<TABLE>
<CAPTION>
Amortization
---------------------------------------
Net carrying value
Current year as of December 31,
--------------- -------------------
Value as Accumulated
of Value as as of Rate Accumulated
beginning of end of beginning per as of end
Principal account of year Additions year of year annum Amount(1) of year 1999 1998
----------------- --------- --------- --------- ----------- ----- --------- ----------- --------- ---------
(Pesos) (Pesos) (Pesos) (Pesos) % (Pesos) (Pesos) (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses relating to the
issuance of Notes....... 5,434,886 57,425 5,492,311 3,810,681 20 843,908 4,654,589 837,722 1,624,205
Software................ 892,647 305,233 1,197,880 273,348 20 124,566 397,914 799,966 619,299
Organization expenses... -- 139,026 139,026 -- -- 7,725 7,725 131,301 --
--------- ------- --------- --------- --- --------- --------- --------- ---------
Total as of December 31,
1999.................... 6,327,533 501,684 6,829,217 4,084,029 -- 976,199 5,060,228 1,768,989 --
--------- ------- --------- --------- --- --------- --------- --------- ---------
Total as of December 31,
1998.................... 6,052,100 275,433 6,327,533 2,845,595 -- 1,238,434 4,084,029 -- 2,243,504
========= ======= ========= ========= === ========= ========= ========= =========
</TABLE>
- ----
Note:
(1) The accounting allocation of depreciation charges for the year is described
in Schedule H.
I-113
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
INVESTMENTS
General Balance Sheet as of December 31, 1999 and 1998
Schedule C
<TABLE>
<CAPTION>
Value Recorded as
of December 31,
------------------
Number Market
Issuer and securities F.V. Value 1999 1998
--------------------- --------- -------- ---------- -------
(Pesos) (Pesos)
<S> <C> <C> <C> <C>
CURRENT INVESTMENTS
Mutual Investment Funds
Banco Rio............................... 5,917,065 1.695379 10,031,668
Banco Supervielle Societe Generale...... 610,885 1.146721 700,515 --
Banque Nationale de Paris............... 1,397,211 1.091589 1,525,180 --
Banca Nazionale del Lavoro.............. 3,658,526 1.286966 4,708,398
Shares
INDUPA S.A.I.C.......................... 90,881 0.860000 78,158 59,073
FO.GA.BA. S.A.P.E.M..................... 10,000 1.000000 10,000 --
---------- ------
TOTAL CURRENT INVESTMENTS............... 17,053,919 59,073
---------- ------
NON-CURRENT INVESTMENTS
I.V. Invergas S.A......................... 246 1.000000 246 --
---------- ------
TOTAL NON-CURRENT INVESTMENTS........... 246 --
---------- ------
TOTAL INVESTMENTS....................... 17,054,165 59,073
========== ======
</TABLE>
I-114
<PAGE>
SODIGAS PAMPEANA S.A.AND ITS SUBSIDIARY COMPANY
OTHER INVESTMENTS
General Balance Sheet as of December 31, 1999 and 1998
Schedule D
<TABLE>
<CAPTION>
Value Recorded as of
December 31,
---------------------
Principal account 1999 1998
----------------- ---------- ----------
(Pesos) (Pesos)
<S> <C> <C>
CURRENT INVESTMENTS
Fixed-term deposits................................... 15,536,415 13,177,946
---------- ----------
Total................................................ 15,536,415 13,177,946
========== ==========
</TABLE>
I-115
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED ALLOWANCES
For the Fiscal Years Ended December 31, 1999 and 1998
Schedule E
<TABLE>
<CAPTION>
Adjustments
to the
Special Adjusted
Balances Spin-off balances Balances as of
as of Balance as of December 31,
beginning Sheet beginning ---------------------
Item of year (Note 10) of year Additions Decreases 1998
---- ---------- ----------- ---------- ----------- ----------- 1999 ----------
(Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C> <C> <C>
DEDUCTED FROM ASSETS
Allowance for defaulting
receivables............. 9,574,142 59,256 9,633,398 (1) 1,376,453 10,009,254 9,574,142
Allowance for
uncollectible Mercobank
S.A. Series "C"
Certificates............ 516,000 -- 516,000 (2) 151,325 -- 667,325 516,000
Allowance for
depreciation of
Mercobank S.A.'s
shares.................. 291,434 -- 291,434 (2) 669,118 318,941 641,611 291,434
Allowance for
uncollectibility of
certificates
corresponding to
contribution of
improvements
receivables............. -- 1,063,589 1,063,589 (1) 147,417 -- 1,211,006 --
DEDUCTED FROM
LIABILITIES
Provisions for
lawsuits................ 2,914,472 28,700 2,943,172 (3) 339,884 (3) 681,367 2,601,689 2,914,472
---------- --------- ---------- ----------- ----------- ---------- ----------
Total.................. 13,296,048 1,151,545 14,447,593 3,060,053 2,376,761 15,130,885 13,296,048
========== ========= ========== =========== =========== ========== ==========
</TABLE>
- ----
Notes:
(1) Charged to Marketing Expenses in Schedule H.
(2) Charged to Extraordinary Income (Note 4.m.)
(3) Pesos 40,000 charged to Other Expenses (Note 4.l.)
I-116
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
COST OF SALES
For the Fiscal Years Ended December 31, 1999 and 1998
Schedule F
<TABLE>
<CAPTION>
For the Fiscal Years
ended December 31,
------------------------
1999 1998
----------- -----------
(Pesos) (Pesos)
<S> <C> <C>
Inventories at beginning of year...................... 1,951,983 --
Adjustment to the Special Spin-off Balance Sheet...... (1,786,025) --
----------- -----------
Adjusted inventories at beginning of year............. 165,958 37,142
----------- -----------
Plus:
Gas purchases....................................... 146,163,383 155,228,445
Acquisition of transportation capacity.............. 79,999,642 80,354,997
Expenses per breakdown in Schedule H................ 49,665,908 46,780,455
Less:
Inventories at end of year.......................... 81,333 161,545
----------- -----------
COST OF SALES....................................... 275,913,558 282,239,494
=========== ===========
</TABLE>
I-117
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
FOREIGN CURRENCY ASSETS AND LIABILITIES
General Balance Sheet as of December 31, 1999 and 1998
Schedule G
<TABLE>
<CAPTION>
Amount in Argentine
currency as of
December 31,
----------------------
Type and
amount of Current
foreign exchange
currency rate 1999 1998
------------- -------- ---------- -----------
(Pesos) (Pesos)
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and banks.................... U$S 107,900 1.0000 107,900 317,874
Other receivables................. U$S -- -- -- 157,500
------------- ------ ---------- -----------
Total current assets............ 107,900 -- 107,900 475,374
------------- ------ ---------- -----------
Total assets.................... 107,900 -- 107,900 475,374
------------- ------ ---------- -----------
CURRENT LIABILITIES
Suppliers......................... U$S 200,397 1.0000 200,397 37,711
Bank loans
Loan from Banco Rio............. U$S -- 1.0000 -- 1,901,533
Loan from Banco Boston.......... U$S -- 1.0000 -- 250,119
Bank Boston--Eximbank........... U$S 42,467 1.0000 42,467 85,024
Notes--Interest................. U$S 326,599 1.0000 326,599 326,599
BNL Letters of credit........... U$S -- -- 3,748,098
Financial loans
Notes........................... U$S -- 90,000,000
------------- ------ ---------- -----------
Total current liabilities..... 569,463 -- 569,463 96,349,084
------------- ------ ---------- -----------
NON-CURRENT LIABILITIES
Financial and banking loans
Notes--Principal.................. U$S79,443,000 1.0000 79,443,000 79,443,000
Bank Boston--Eximbank............. U$S -- 1.0000 -- 42,324
------------- ------ ---------- -----------
Total non-current liabilities... 79,443,000 -- 79,443,000 79,485,324
------------- ------ ---------- -----------
Total liabilities............... 80,012,463 -- 80,012,463 175,834,408
============= ====== ========== ===========
</TABLE>
I-118
<PAGE>
SODIGAS PAMPEANA S.A. AND ITS SUBSIDIARY COMPANY
INFORMATION REQUIRED UNDER ART. 64, CLAUSE (B) OF LAW 19,550
For the Fiscal Years Ended December 31, 1999 and 1998
Schedule H
<TABLE>
<CAPTION>
Total as of Total as of
December 31, Services Administrative Marketing December 31,
Items 1999 Sales Cost Cost Expenses Expenses 1998
----- ------------ ---------- -------- -------------- ---------- ------------
(Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C> <C>
Fees for services....... 8,806,423 4,027,369 -- 4,779,054 -- 5,959,902
Salaries and wages...... 21,234,960 8,793,964 427,114 7,878,980 4,134,902 19,359,328
Contributions........... 6,158,885 2,586,732 -- 2,340,376 1,231,777 5,912,403
Transportation
expenses............... 1,409,719 592,082 -- 535,694 281,943 1,171,965
Taxes and assessments... 3,052,526 597,068 -- 2,156,924 298,534 2,750,272
Depreciation of fixed
assets................. 19,575,586 18,306,316 -- 846,180 423,090 19,380,111
Amortization of
intangible assets...... 976,199 7,725 -- 968,474 -- 1,238,434
Hired services.......... 7,479,345 4,304,761 -- 2,558,417 616,167 7,101,145
Postage, communications
and data processing.... 1,746,602 521,667 -- 966,394 258,541 1,907,693
Processing of liquids... 6,307,337 6,307,337 -- -- -- 5,652,797
Overheads............... 6,770,941 3,620,887 -- 2,296,669 853,385 5,965,924
Defaulting debtors...... 1,674,809 -- -- -- 1,674,809 2,898,836
Advertising............. 324,547 -- -- -- 324,547 310,314
---------- ---------- ------- ---------- ---------- ----------
Total as of December
31, 1999............. 85,517,879 49,665,908 427,114 25,327,162 10,097,695 --
---------- ---------- ------- ---------- ---------- ----------
Total as of December
31, 1998............. -- 46,780,455 324,192 21,693,788 10,810,689 79,609,124
========== ========== ======= ========== ========== ==========
</TABLE>
- --------
Note:
(1) Charged to "Miscellaneous" under the caption "Other Expenses" (Note 4.l)
I-119
<PAGE>
SODIGAS PAMPEANA S.A.
US GAAP RECONCILIATION
Reconciliation of Net Income
ANNEX I
<TABLE>
<CAPTION>
Year Ended
December 31,
1999
-------------
<S> <C>
Net income as reported under Argentine GAAP...................... Ps.15,487,156
US GAAP adjustments:
Depreciation expense........................................... 2,900,219
Intangible asset............................................... (244,148)
Intangible asset amortization.................................. 377,072
Gross sales tax settlement..................................... 2,768,773
Regulatory issues.............................................. 318,885
Deferred income taxes.......................................... (800,491)
Technical assistance fee....................................... (458,423)
Deferred expenses.............................................. 43,958
Minority interest.............................................. (1,842,703)
Available for sale securities.................................. 227,615
Allocation of negative goodwill................................ (204,043)
-------------
US GAAP adjustments, net......................................... Ps. 3,086,714
-------------
Net income under US GAAP......................................... Ps.18,573,870
=============
</TABLE>
I-120
<PAGE>
SODIGAS PAMPEANA S.A.
US GAAP RECONCILIATION
Reconciliation of Shareholders' Equity
ANNEX I(cont).
<TABLE>
<CAPTION>
Year Ended
December 31,
1999
--------------
<S> <C>
Shareholders' Equity as reported under Argentine GAAP.......... Ps.323,278,928
US GAAP adjustments:
Initial carrying value of assets............................. (38,565,393)
Contribution of gas networks................................. (63,721,063)
Capitalization of interest................................... 4,019,596
Depreciation expense......................................... 16,895,086
Intangible assets............................................ (127,314)
Intangible assets amortization............................... 15,660
Gross sales tax settlement................................... (23,964,755)
Regulatory issues............................................ (1,610,384)
Deferred income taxes........................................ 5,763,059
Technical assistance fee..................................... 7,411,052
Deferred expenses............................................ (41,582)
Minority interest............................................ 27,433,060
Allocation of negative goodwill.............................. (204,043)
--------------
US GAAP adjustments, net....................................... Ps.(66,697,019)
--------------
Shareholders' Equity under US GAAP............................. Ps.256,581,909
==============
</TABLE>
I-121
<PAGE>
ATTACHMENT I-5
BUENOS AIRES ENERGY
COMPANY S.A.
CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year commenced January 1, 1999 and 1998
and ended December 31, 1999 and 1998
I-122
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A. AND ITS SUBSIDIARY COMPANY
CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 1999 AND 1998
(Notes 1 and 2)
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
(Pesos) (Pesos)
<S> <C> <C>
ASSETS
Current Assets
Cash and banks (Note 3.a)........................... 1,350,212 2,523,248
Investments (Schedule C)............................ 1,051,157 544,113
Trade accounts receivable (Note 3.b)................ 50,779,880 49,981,623
Other receivables (Note 3.c)........................ 3,416,038 3,391,004
------------ ------------
Total current assets................................ 56,597,287 56,439,988
------------ ------------
Non-current assets
Trade accounts receivable (Note 3.b)................ 2,446,381 3,028,167
Other receivables (Note 3.c)........................ 37,944,014 37,502,967
Fixed assets (Schedule A)........................... 425,110,853 419,916,748
Intangible assets (Schedule B)...................... 19,315,322 20,179,721
Other Assets (Note 3.d.)............................ 256,352 1,332,206
------------ ------------
Total non-current assets............................ 485,072,922 481,959,809
------------ ------------
TOTAL ASSETS........................................ 541,670,209 538,399,797
============ ============
LIABILITIES
Current Liabilities
Commercial liabilities (Note 3.e)................... 17,115,830 20,072,630
Bank and financial loans (Note 3.f)................. 54,511,727 34,070,622
Intercompany liabilities (Note 3.g)................. 7,232,393 6,820,807
Social security liabilities (Note 3.h).............. 4,114,433 4,051,454
Tax liabilities (Note 3.i).......................... 11,062,994 14,671,523
Other liabilities (Note 3.j)........................ 592,783 739,049
Allowances (Schedule E)............................. -- 120,000
------------ ------------
Total current liabilities........................... 94,630,160 80,546,085
------------ ------------
Non-current liabilities
Bank and financial loans (Note 3.f)................. 230,000,000 230,000,000
Intercompany liabilities (Note 3.g)................. -- 1,380,000
Tax liabilities (Note 3.i).......................... 282,467 --
Other liabilities (Note 3.j)........................ 2,830,864 1,939,328
------------ ------------
Total non-current liabilities....................... 233,113,331 233,319,328
------------ ------------
TOTAL LIABILITIES................................... 327,743,491 313,865,413
------------ ------------
Minority interests in subsidiaries.................. 120,115,434 125,227,021
------------ ------------
SHAREHOLDERS' EQUITY................................ 93,811,284 99,307,363
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.......... 541,670,209 538,399,797
============ ============
</TABLE>
The accompanying notes and schedules are an integral part of these consolidated
financial statements.
I-123
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A.
AND ITS SUBSIDIARY COMPANY
CONSOLIDATED STATEMENT OF INCOME/(LOSS)
For the fiscal year commenced January 1, 1999 and 1998
and ended December 31, 1999 and 1998
(Notes 1 and 2)
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
(Pesos) (Pesos)
<S> <C> <C>
Net sales......................................... 189,866,120 200,836,538
Cost of sales (Schedule H)........................ (147,145,027) (149,993,368)
------------ ------------
Gross profit.................................... 42,721,093 50,843,170
------------ ------------
Marketing expenses (Schedule H)................... (14,669,638) (15,032,060)
Administrative expenses (Schedule H).............. (8,490,594) (8,113,198)
Financial gain/(loss) (Note 18)
Generated by assets............................. 2,542,874 2,417,783
Generated by liabilities........................ (27,493,335) (23,675,722)
Other income , Net (Note 19)...................... 1,726,154 2,915,742
Income tax (1).................................... (4,198,000) (10,343,847)
Ordinary loss on minority interests in
subsidiaries..................................... 2,897,914 (687,449)
------------ ------------
Ordinary loss................................... (4,963,532) (1,675,581)
Extraordinary loss (Note 17)...................... (1,075,854) (543,202)
Extraordinary income from minority interests in
subsidiaries..................................... 543,307 274,317
------------ ------------
Net loss for the year........................... (5,496,079) (1,944,466)
============ ============
</TABLE>
- --------
(1) Includes $ 9,621 and $ 13,892 of Baeco S.A. and $ 457,056 and $ 504,465 of
IEBA S.A. corresponding to Tax on Minimum Hypothetical Income at December
31, 1999 and 1998 respectively.
The accompanying notes and schedules are an integral part of these
consolidated financial statements.
I-124
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A.
AND ITS SUBSIDIARY COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
For the fiscal year commenced January 1, 1999 and 1998
and ended December 31, 1999 and 1998 (Notes 1 and 2)
<TABLE>
<CAPTION>
December December
31, 1999 31, 1998
----------- -----------
(Pesos) (Pesos)
<S> <C> <C>
CHANGES IN FUNDS
Funds at beginning of year........................... 3,067,361 2,783,222
(Decrease)/Increase funds............................ (665,992) 284,139
----------- -----------
Funds at end of year................................. 2,401,369 3,067,361
=========== ===========
CAUSES OF CHANGES IN FUNDS
Sources of Funds
Ordinary loss for the year........................... (4,963,532) (1,675,581)
Plus: Items not entailing applications of funds
Intangible asset amortization...................... 2,691,497 2,441,832
Accrued intercompany liabilities pending payment... 1,653,776 2,670,693
Accrued expenses and purchases pending payment..... 15,695,259 17,235,483
Accrued social security and taxes pending payment.. 3,999,163 4,032,531
Accrued tax liabilities pending payment............ 3,753,977 9,843,332
Accrued net financial income/(loss) pending
payment........................................... 6,930,941 6,120,622
Controlled, controlling and/or related company
accrued net financial/(loss) pending payment...... 152,892 14,033
Fixed asset depreciation........................... 11,981,409 11,213,573
Labor contingencies under art. 26 accrued in the
year.............................................. 529,306 444,330
Net book value of fixed assets written off......... 228,285 11,737
Materials used up and others....................... 1,445,007 1,280,736
Bad debt allowance (Net increase).................. 2,393,564 695,153
Tax on minimum hypothetical income................. 466,677 518,357
Tax on financial cost.............................. 890,312 890,312
Less: Items not entailing sources of funds
Accrued controlled, controlling and/or related
company sales pending collection.................. (20,931) (3,919)
Intangible assets written off...................... -- (32,973)
Accrued interest pending collections............... -- (1,552)
Sales pending collection........................... (40,704,411) (43,314,667)
Provision for lawsuits............................. (120,000) 120,000
Gain/(Loss) from Minority Equity in Controlled
Companies......................................... (2,897,914) 687,449
----------- -----------
Funds generated by ordinary operations............... 4,105,277 13,191,481
----------- -----------
Extraordinary loss for the year...................... (532,547) (268,885)
Plus: Items not entailing applications of funds
Allowances other assets............................ 1,075,854 560,293
----------- -----------
Less: Items not entailing sources of funds
Increase in other receivables...................... -- (17,091)
Income on minority interest in subsidiaries........ (543,307) (274,317)
----------- -----------
Funds generated by extraordinary operations.......... -- --
----------- -----------
Funds generated by operations (Carried forward)...... 4,105,277 13,191,481
=========== ===========
</TABLE>
I-125
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A.
AND ITS SUBSIDIARY COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
For the fiscal year commenced January 1, 1999 and 1998
and ended December 31, 1999 and 1998 (Notes 1 and 2)--(Continued)
<TABLE>
<CAPTION>
December December
31, 1999 31, 1998
----------- -----------
(Pesos) (Pesos)
<S> <C> <C>
Funds generated by operations (Brought forward)..... 4,105,277 13,191,481
----------- -----------
Other sources of funds
Bank and financial loans, net of payments........... 19,445,694 14,870,460
Collections of receivables at beginning of
year/Transferred................................... 48,622,161 43,044,391
Collection of intercompany receivables at beginning
of year............................................ 6,540 70,801
Increase in other liabilities....................... -- 161,838
Collection of interest at beginning of year......... 1,552 --
----------- -----------
Total other sources of funds........................ 68,075,947 58,147,490
----------- -----------
Total sources of funds.............................. 72,181,224 71,338,971
----------- -----------
Applications of funds
Increase in other receivables....................... (181,147) (93,456)
Increase in fixed assets............................ (18,136,806) (21,693,713)
Payment of salaries and social security charges at
beginning of year.................................. (3,936,184) (3,874,715)
Payment of other liabilities at beginning of year... (256,682) (803,255)
Payment of commercial debts at beginning of year.... (19,989,772) (19,153,142)
Payment of financial loans at beginning of year..... (5,935,530) (5,539,722)
Payment of intercompany liabilities at beginning of
year............................................... (3,434,726) (5,347,509)
Net variation tax liabilities....................... (18,190,343) (10,739,177)
Dividends paid...................................... (1,670,366) (1,922,493)
Increase in intangible assets....................... (1,115,660) (1,887,650)
----------- -----------
Total applications of funds......................... (72,847,216) (71,054,832)
----------- -----------
(Decrease)/Increase in funds........................ (665,992) 284,139
=========== ===========
</TABLE>
The accompanying notes and schedules are an integral part of these consolidated
financial statements.
I-126
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A.
AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year commenced January 1, 1999 and 1998
and ended December 31, 1999 and 1998
NOTE 1: CONSOLIDATED FINANCIAL STATEMENTS
The Company has consolidated its balance sheet at December 31, 1999 and
1998, the statements of income/(loss) and cash flows for the fiscal years
commenced January 1, 1999 and 1998 and ended December 31, 1999 and 1998, with
the balance sheet at December 31, 1999 and 1998 and the statements of
income/(loss) and cash flows for the fiscal years commenced January 1, 1999
and 1998 and ended December 31, 1999 and 1998 of its Subsidiary Company
Inversora Electrica de Buenos Aires S.A. on a line-by-line basis, following
the procedure established by Technical Resolution No. 4 of the Argentine
Federation of Professional Councils of Economic Sciences (FACPCE).
The following data reflect the corporate control:
<TABLE>
<CAPTION>
Subsidiary Principal line of business Percentage held
---------- -------------------------- ---------------
<C> <S> <C>
Inversora Electrica de Equity interest in Empresa Distribuidora de 55%
Buenos Aires S.A. Energia Atlantica S.A. (EDEA S.A.). It holds the
corporate control (90%).
</TABLE>
NOTE 2: FINANCIAL STATEMENT PRESENTATION AND ACCOUNTING POLICIES
The financial statements of the subsidiary have been prepared based on
criteria consistent with those applied by Buenos Aires Energy Company S.A. for
preparing its financial statements.
For purposes of comparison, the balances at December 31, 1998 have been
reclassified to state them on a consistent basis with those of the Current
year.
In addition, the principal valuation and disclosure criteria used for
preparing the consolidated financial statements of the subsidiary at December
31, 1999, which have not been explained in the note on accounting policies of
the Controlling Company, are as follows:
a.Investments
These correspond to units in mutual funds, which have been valued at their
quotation value at closing date.
b.Fixed assets
The value of the fixed assets transferred to EDEA S.A. for the rendering of
public utility services has been determined considering the purchase price
paid by the majority shareholder (Buenos Aires Energy Company Sociedad
Anonima) for the capital stock, less the assets and liabilities transferred by
the Licensor.
Based on a technical appraisal report issued by independent experts, EDEA
S.A. has assigned the total value to the different captions forming part of
the fixed assets transferred, as well as their remaining useful life.
Depreciation has been calculated following the straight-line method.
Additions carried out subsequently have been disclosed at their acquisition
cost, net of the corresponding accumulated depreciation charges calculated on
the straight-line method, using an estimated useful life.
Materials and spare parts in stock at closing date, considered as fixed
assets, were valued at their estimated replacement cost at that date.
Consumption of such assets is included in the cost of sales for the year in
which they were used up.
I-127
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The value of EDEA S.A.'s Fixed Assets, taken as a whole, does not exceed
their estimated recoverable value, as disclosed by business projections taken
as a whole.
c.Intangible assets
This caption includes the following items:
--EDEA S.A.'s obligation to bear certain costs and/or expenses, in
accordance with the License agreement.
--Pre-operating and organization expenses of EDEA S.A.
--Labor commitments with EDEA S.A.'s personnel determined through actuarial
estimates, as described in Note 16 to the consolidated financial
statements.
--EDEA S.A.'s Systems development expenses.
Intangible assets will be amortized based on the straight-line method over
fifteen years calculated on a monthly basis, considering the first management
period, mentioned in Note 9 to the consolidated financial statements as
provided in Art. Nos. 6 to 12 of the License Agreement, with the exception of
the systems development expenses which will be amortized based on the
straight-line method over a maximum five-year period.
Furthermore, this caption includes the following items:
--Payment made for Consulting work and expenses engaged for purposes of the
International Public Bid for the purchase of the Share Capital of Empresa
Distribuidora de Energia Atlantica Sociedad Anonima--#11.3.j. of the Terms
and Conditions for the Bid. These expenses are amortized under the
straight-line method over fifteen years calculated on a monthly basis,
considering the first management period mentioned in Note 9 to the
consolidated financial statements.
--Other expenses relating to the International Public Bid mentioned above,
in addition to those provided for in #11.3.j. of the Terms and Conditions
for the Bid, which are amortized under the same method and over the same
period.
--Other expenses relating to the bridge loan granted by Citibank N.A.
Bahamas Branch to make the irrevocable contribution to EDEA S.A.. These
expenses are amortized in line with the straight-line method, over the
life of the negotiable bond program (5 and 7 years)--Note 7 -, which
replaced the loan mentioned, calculated on a monthly basis.
--Expenses connected with the issuance of the Negotiable Bonds--Note 7 -.
These expenses are amortized in line with the straight-line method, over
the life of the negotiable bond program (5 and 7 years), calculated on a
monthly basis.
d)Other assets
Includes shares and bonds received from Mercobank S.A. as settlement of EDEA
S.A.'s restricted savings account and current account balances deposited with
Banco Credito Provincial, as mentioned in note 17 to the consolidated
financial statements. These assets are disclosed at their estimated
recoverable value.
e)Income and Expenditure Accounts
The consolidated net income/(loss) for the year have been disclosed in the
currency values, except for the charges for assets consumed (depreciation of
fixed assets, consumption of materials and spare parts and amortization of
intangible assets), which were determined based on the values of those assets.
I-128
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 3: BREAKDOWN OF BALANCE SHEET CAPTIONS
Balance Sheet
As at December 31, 1999 and 1998, the breakdown of balance sheet captions is
as follows:
a.Cash and Banks
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
(Pesos) (Pesos)
<S> <C> <C>
Cash.................................................. 2,424 16,047
Imprest fund.......................................... 46,646 42,568
Funds collected to be deposited....................... -- 203,862
Banks................................................. 1,301,142 2,260,467
Bank in foreign currency (Schedule G)................. -- 304
--------- ---------
Total................................................. 1,350,212 2,523,248
========= =========
</TABLE>
b.Trade receivables
<TABLE>
<S> <C> <C>
Current
Trade debtors (1)................................... 47,484,356 40,947,429
Controlled, controlling and/or related company
debtors:
--Empresa de Energia de Rio Negro S.A............. 20,834 --
--Camuzzi Gas Pampeana S.A........................ 3,331 --
Energy supplied pending invoicing................... 17,156,000 19,721,000
Others.............................................. 6,776,906 6,792,656
----------- -----------
Subtotal............................................ 71,441,427 67,461,085
Less: Bad debt allowance (Schedule E)............... (20,661,547) (17,479,462)
----------- -----------
Subtotal............................................ 50,779,880 49,981,623
----------- -----------
Non-current
Trade debtors (1)................................... 6,080,381 7,483,705
Less: Bad debt allowance (Schedule E)............... (3,634,000) (4,455,538)
----------- -----------
Subtotal............................................ 2,446,381 3,028,167
----------- -----------
Total............................................... 53,226,261 53,009,790
=========== ===========
</TABLE>
- --------
(1) Includes refinanced agreements
I-129
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
c.Other receivables
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
(Pesos) (Pesos)
<S> <C> <C>
Current
Documents with first maturity following April 1,
1997 (less than 60-day default as at June 2,
1997).............................................. -- 403,288
Non-transferred documents included in Circular No.
88 of the Terms of Reference and Conditions........ -- 873,695
Miscellaneous....................................... -- 12,000
---------- ----------
Subtotal............................................ -- 1,288,983
Bad debt allowance (Schedule E)..................... -- (1,288,982)
Employees Stock Ownership Plan (Note 5)............. 1,238,600 1,559,972
VAT credit.......................................... 50,783 358,747
Miscellaneous advance payments...................... 255,355 127,095
Intercompany receivables
United Utilities Int. LTD......................... -- 2,621
Receivables from the staff.......................... 143,876 187,149
Tax to be recovered................................. 632,198 --
Receivables from ESEBA S.A.......................... -- 903,028
Income Tax.......................................... 709,943 74,490
Other receivables................................... 385,283 177,901
---------- ----------
Subtotal............................................ 3,416,038 3,391,004
---------- ----------
Non-current
Miscellaneous advances.............................. 22,500 --
Loans to personnel.................................. 215,606 354,633
Employee Stock Ownership Plan (Note 5).............. 35,999,784 37,148,334
Tax on Minimum Hypothetical Income.................. 1,329,364 --
Other receivables................................... 376,760 --
---------- ----------
Subtotal............................................ 37,944,014 37,502,967
---------- ----------
Total............................................... 41,360,052 40,893,971
========== ==========
</TABLE>
d.Other assets
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
(Pesos) (Pesos)
<S> <C> <C>
Time deposit with Mercobank (Note 17)................. -- 574,351
Mercobank S.A. shares (Note 17)....................... 1,152,590 933,384
Valuation allowance (Note 17 and Schedule E).......... (896,238) (323,808)
Mercobank S.A. Bond "C" (Note 17)..................... 741,397 741,397
Bad debt allowance (Note 17 and Schedule E)........... (741,397) (593,118)
--------- ---------
Total................................................. 256,352 1,332,206
========= =========
</TABLE>
I-130
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
e.Commercial liabilities
<TABLE>
<S> <C> <C>
In local currency
Suppliers............................................... 2,372,863 8,251,465
Provisions for invoices to be received.................. 8,948,956 5,842,853
---------- ----------
Subtotal.................................................. 11,321,819 14,094,318
---------- ----------
In foreign currency (Schedule G)
Suppliers............................................... 5,713,571 4,856,990
Provisions for invoices to be received.................. 80,440 1,121,322
---------- ----------
Subtotal.................................................. 5,794,011 5,978,312
---------- ----------
Total..................................................... 17,115,830 20,072,630
========== ==========
</TABLE>
f.Bank and financial loans
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
(Pesos) (Pesos)
<S> <C> <C>
Current
In foreign currency (Schedule G)
Citibank (1)........................................ 2,500,000 9,800,000
Banco Rio de la Plata (1)........................... 5,000,000 4,550,000
Banco del Buen Ayre (1)............................. 2,100,000 8,000,000
Banco Frances (1)................................... 19,980,000 --
Bank Boston (1)..................................... 18,000,000 5,600,000
Accrued bank interest............................... 995,526 185,092
Accrued negotiable obligations interest............. 5,935,415 5,935,415
----------- -----------
Subtotal.............................................. 54,510,941 34,070,507
----------- -----------
In local currency
Bank Boston--overdraft.............................. -- 115
Banco Velox--overdraft.............................. 786 --
----------- -----------
Subtotal.............................................. 54,511,727 34,070,622
----------- -----------
Non-current
Negotiable Bonds (Schedule G)......................... 230,000,000 230,000,000
----------- -----------
Subtotal.............................................. 230,000,000 230,000,000
----------- -----------
Total................................................. 284,511,727 264,070,622
=========== ===========
</TABLE>
- --------
(1) They are being renegotiated so as to obtain financing terms of between 120
and 365 days.
I-131
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
g.Intercompany liabilities
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
(Pesos) (Pesos)
<S> <C> <C>
Current
Camuzzi Gas Pampeana S.A............................ 137,919 673,341
Sodigas Pampeana S.A................................ 29,494 --
Central Piedra Buena S.A. (Schedule G).............. 791,444 --
Camuzzi Argentina S.A............................... 914,295 673,585
Camuzzi Argentina S.A. (Note 6 and Schedule G)
--Principal....................................... 3,037,500 2,565,000
--Interest........................................ 97,361 8,131
United Utilities International Argentina S.A.
(Schedule G)....................................... -- 110,912
United Utilities International Argentina S.A........ 436,349 1,208,936
United Utilities International LTD (Note 6 and
Schedule G)
--Principal....................................... 720,000 720,000
--Interest........................................ 23,078 3,191
CNG International Corporation (Note 6 and Schedule
G)
--Principal....................................... 1,012,500 855,000
--Interest........................................ 32,453 2,711
--------- ---------
Subtotal............................................ 7,232,393 6,820,807
--------- ---------
Non-Current
Camuzzi Argentina S.A. (Note 6 and Schedule G)...... -- 765,000
CNG International Corporation (Note 6 and Schedule
G)................................................. -- 255,000
United Utilities International LTD (Note 6 and
Schedule G)........................................ -- 360,000
--------- ---------
Subtotal............................................ -- 1,380,000
--------- ---------
Total............................................... 7,232,393 8,200,807
========= =========
</TABLE>
h.Social security liabilities
<TABLE>
<S> <C> <C>
Salaries payable............................................ 1,762 1,762
Social security charges payable............................. 1,062,590 1,008,784
Accrued vacations........................................... 1,223,581 1,169,669
Provision for annual bonus based on efficiency.............. 1,657,496 1,669,991
Provision for tourism assignment............................ 49,308 50,047
Provision for PPAP bond..................................... 119,696 151,201
--------- ---------
Total....................................................... 4,114,433 4,051,454
========= =========
</TABLE>
I-132
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
i.Tax payables
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
(Pesos) (Pesos)
<S> <C> <C>
National taxes
Law 23,681.......................................... 81,044 82,654
VAT Debit........................................... 1,913,719 1,175,429
Tax on financial cost............................... 1,039,641 912,337
Income tax.......................................... 1,735,249 8,080,059
Payment facility plans--VAT......................... 242,115 --
Other............................................... 2,613 --
---------- ----------
Subtotal.............................................. 5,014,381 10,250,479
---------- ----------
Provincial taxes
Law 7,290........................................... 1,392,646 877,367
Law 9,038........................................... 765,750 481,234
Law 11,769 section 72 bis........................... 586,182 353,381
Gross revenue tax................................... 131,341 150,608
---------- ----------
Subtotal.............................................. 2,875,919 1,862,590
---------- ----------
Municipal taxes
Law 11,769 Section 72/Ter........................... 1,869,510 1,750,765
Law 10,740.......................................... 1,303,184 807,689
---------- ----------
Subtotal.............................................. 3,172,694 2,558,454
---------- ----------
Subtotal.............................................. 11,062,994 14,671,523
========== ==========
Non-current
National taxes
Payment facility plan--VAT............................ 282,467 --
---------- ----------
Subtotal.............................................. 282,467 --
---------- ----------
Total................................................. 11,345,461 14,671,523
========== ==========
</TABLE>
j.Other liabilities
<TABLE>
<S> <C> <C>
Current
Labor commitment towards personnel (Note 16)................ 56,771 38,424
User guarantee deposit...................................... 409,868 229,507
Miscellaneous............................................... 126,144 471,118
--------- ---------
Subtotal.................................................... 592,783 739,049
--------- ---------
Non-current
Labor commitment forwards personnel (Note 16)............... 2,828,864 1,937,328
Miscellaneous............................................... 2,000 2,000
--------- ---------
Subtotal.................................................... 2,830,864 1,939,328
--------- ---------
Total....................................................... 3,423,647 2,678,377
========= =========
</TABLE>
I-133
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 4: FIXED ASSETS TRANSFERRED
According to the Terms of Reference and Conditions for the International and
National Public Bid called for all the shares of Empresa Distribuidora de
Energia Atlantica S.A. and the License Agreement, the fixed assets transferred
by the Licensor to EDEA S.A. include, among others, Properties, Vehicles,
Transformation Stations, Works in Progress, Materials and Spare Parts and any
other assets necessary for the rendering of the public utility service
existing at the moment in which EDEA S.A. started its operations.
These assets shall only be used in connection with the rendering of the
public utility service, and shall be transferred to the Province of Buenos
Aires upon expiration of the License.
NOTE 5: EMPLOYEE STOCK OWNERSHIP PROGRAM
Class C shares of EDEA S.A., representing 10% of its capital stock, were
transferred to Inversora Electrica de Buenos Aires to be held by Banco de la
Provincia de Buenos Aires as trustee, until the Employee Stock Ownership
Participation Program is implemented with them.
Pursuant to Chapter XII of the Terms of Reference and Conditions and to
Clause Nine of Circular No. 36 for the privatization of EDEA S.A., the
employees of such Company who elect to participate in the Stock Ownership
Program shall pay the purchase price of Ordinary Class C shares to the
Licensees, with the full amount of annual dividends corresponding to such
shares, net of the Trustee's fees and the creation of a Guarantee and
Repurchase Fund.
Accordingly, the classification as current and non-current of such
receivable is included in Note 3.c., and was made based on the projection of
dividends distributed and to be distributed by EDEA S.A.
NOTE 6: LOANS FROM THE SHAREHOLDERS OF THE CONTROLLED COMPANY
On May 27, 1997, IEBA S.A. requested the financial assistance of its
shareholders, pro rata to their shareholdings, for the payment of the price
balance of the shares in Empresa Distribuidora de Energia Atlantica S.A.. The
amounts obtained were as follows:
Buenos Aires Energy Company S.A. U.S.$16,500,000
United Utilities International Limited U.S.$13,500,000
These loans were partially settled with the proceeds of the issuance of
Negotiable Bonds mentioned in Note 7 to the consolidated financial statements
and the balance was renegotiated as follows:
Loan from United Utilities International Limited for U.S.$13,500,000
--U.S.$9,450,000 plus interest were settled on September 24, 1997, with the
proceeds of the Negotiable Bonds.
--U.S.$2,250,000 were allocated to an irrevocable contribution.
--U.S.$1,800,000 were refinanced in 5 semiannual installments of
U.S.$360,000 each, due as from March 31, 1998. Interest rate: LIBOR, 180-
day rate.
Loan from the shareholders of BAECO S.A. for U.S.$16,500,000
--U.S.$11,400,000 plus interest were settled after September 30, 1997, with
the proceeds of the Negotiable Bonds.
I-134
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
--U.S.$5,100,000 were refinanced in 5 semiannual installments of
U.S.$1,020,000 each, maturing on March 31, 1998. Interest rate: LIBOR,
180-day rate.
NOTE 7: ISSUANCE OF NEGOTIABLE BONDS
On September 24, 1997, IEBA S.A. issued Negotiable Bonds non-convertible
into shares, under the Negotiable Bond Program approved by the CNV through
Resolutions Nos. 11,880 and 11,898 dated September 8 and September 18,
respectively.
The conditions of the issuance were as follows:
Class A securities
.Face value: U.S.$100,000,000
.Annual interest rate: 8.65% payable semi-annually in arrears
.Maturity of principal: September 16, 2002.
Class B securities
.Face value: U.S.$130,000,000
.Annual interest rate: 9.00%, payable semi-annually in arrears
.Maturity of principal: September 16, 2004.
The main restrictions under the conditions for the issuance of the
Negotiable Bonds are the following:
Limitation on Additional indebtedness: The Issuer shall not, create, incur,
assume or issue either, directly or indirectly, guarantee or in any manner
become, either directly or indirectly, liable for or with respect to it
("incur") or tolerate any Indebtedness (including the Acquired
Indebtedness), except for Indebtedness falling within at least one of the
following categories:
(i) Indebtedness under the Securities and the Trust Agreement; (ii)
Indebtedness of the Issuer and of the Restricted Subsidiaries
outstanding at the Issue Date after giving effect to the application of
the proceeds of the sale of Securities; (iii) Indebtedness of the
Issuer or of any Restricted Subsidiary; provided that, following such
Indebtedness and after giving effect thereto, (a) no Default or Event
of Default shall have occurred and be continuing, (b) the Consolidated
EBITDA Coverage Ratio of the Issuer determined on a pro forma basis,
for the last four fiscal quarters, taken as a whole, and assuming such
Indebtedness had been incurred on the first day of such fourth quarter,
had been at least 2.0 to 1.0; (iv) the Indebtedness incurred between
the Issuer and any Restricted Subsidiary; (v) Indebtedness incurred in
Interest Rate Agreements or Currency Agreements entered into with the
purpose of hedging the fluctuations of interest rates or currency with
respect to such Indebtedness and not for speculation purposes; (vi) (a)
the Indebtedness of the Issuer regarding (1) the purchase price of the
property acquired in the ordinary course of business or (2) obligations
under other transactions related to capital investments; and (b)
additional Indebtedness of EDEA provided that (x) such Indebtedness is
assumed in relation to EDEA's business and operations, (y) such
Indebtedness is not incurred in relation to a Permitted Investment
under subsections (vi) or (vii) of the corresponding definition; and
(z) immediately after the assumption of an Indebtedness and after
giving effect thereto, the ratio (A) of the aggregate sum of EDEA's
Total Consolidated Indebtedness plus any Indebtedness of the Issuer
then incurred pursuant to subsection (a) above, to (B) EDEA's Total
Consolidated Capitalization, does not exceed 0.40 to 1.00; and (vii)
the replacements, renewals, refinancing and extensions of the
Indebtedness described in clauses (i) through (vii) above; provided,
however, that any such
I-135
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
replacements, renewals, refinancing and extension (a) shall not provide
for any mandatory redemption, amortization or sinking fund requirement
in an amount in excess of the amounts or at a date prior to the dates
specified in the Indebtedness being replaced, renewed, refinanced or
extended, and (b) shall not exceed the principal amount (plus accrued
interest, prepayment premium and costs of operations, if any) of the
Indebtedness.
Limitation on Restricted Payments: The Issuer shall not make, and shall not
permit any of the Restricted Subsidiaries to, directly or indirectly, make
any Restricted Payment unless:
(i) no Default or Event of Default had occurred and be continuing at
the time or after giving effect to such Restricted Payment; (ii) (A) up
to September 30, 2000, the Consolidated EBITDA Coverage Ratio is at
least 1.75 to 1.0 and (B) thereafter the Issuer may incur an additional
Indebtedness of U.S.$1.00 pursuant to clause (iii) of the "Limitation
on Additional Indebtedness" covenant; and (iii) immediately after
giving effect to such Restricted Payment, the aggregate of all
Restricted Payments declared or made after the Issue Date does not
exceed the sum of: (a) the difference between the sum of (1) 100% of
cumulative Consolidated EBITDA (or if such consolidated cumulative
EBITDA is negative, less 100% of such amount) and (2) the result of
multiplying 1.5 times the Consolidated Net Interest Expense, in each
instance calculated for the fiscal year (taken as one accounting
period) commenced on June 2, 1997 and ended on the last day of the last
full fiscal quarter immediately preceding such Restricted Payment for
which quarterly or annual financial statements of the Issuer are
available, and (b) 100% of the aggregate Net Proceeds received by the
Issuer from the issuance or sale, after the Issue Date, of Capital
Stock (other than Disqualified Capital Stock) of the Issuer or any
Indebtedness or other securities of the Issuer convertible into Capital
Stock (other than Disqualified Capital Stock) or exercisable or
exchangeable for Capital Stock of the Issuer which have been so
converted, exercised or exchanged, as the case may be.
For purposes of determining the amounts expended for Restricted Payments,
cash distributed shall be valued at the face value thereof and property other
than cash shall be valued at its Fair Market Value.
Notwithstanding the foregoing, the Company may make Permitted Payments.
"Permitted Payments" include:
(x) the payment of any dividend within 60 calendar days after the date of
declaration thereof, if at such date of such declaration the payment
complied with the provisions of the Trust Agreement, (y) the withdrawal of
any Capital Stock or Subordinated Indebtedness of the Issuer or of any
Restricted Subsidiary by conversion into or by exchange for, shares of
Capital Stock of the Issuer or of any Restricted Subsidiary (other than
Disqualified Capital Stock), or out of the proceeds of the substantially
concurrent sale (other than to a Restricted Subsidiary of the Issuer) of
Capital Stock (other than Disqualified Capital Stock) of the Issuer; and
(z) the withdrawal of any Subordinated Indebtedness of the Issuer by
exchange for or out of the proceeds of the substantially concurrent sale
(other than to a Restricted Subsidiary) of Subordinated Indebtedness of the
Issuer permitted to be incurred in accordance with the "Limitation on
Additional Indebtedness" covenant herein.
In determining the amount of Restricted Payments permissible under clause
(iii) above, amounts expended pursuant to clauses (x), (y) and (z) in the
preceding paragraph shall be included as Restricted Payments.
Limitation on liens. The Issuer shall not, whether indirectly or directly,
and shall not permit any of its Restricted Subsidiaries to create, incur,
assume or suffer to exist any Lien (other than a Permitted Lien) of any kind
upon any of their respective property or assets now owned or hereafter
acquired (including any Capital
I-136
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Stock) or proceeds therefrom securing any Indebtedness, unless the Securities
and all the amounts due under the Trust Agreement are equally and ratably
secured by such Lien upon such property, assets or proceeds, together with (or
prior to, in the event the obligation or liability to be secured with such a
Lien were a Subordinate Indebtedness) the obligation or liability secured by
such Lien.
Ownership of voting stock of EDEA. The Issuer shall at all times maintain
ownership of at least 90% of the securities of EDEA entitled to vote.
In addition to the aforementioned restrictions, there are other restrictions
related to the following:
Limitation on dividends and other payment restrictions affecting the
Subsidiaries.
I-137
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Disposal of the proceeds of sales of assets.
Limitation on transactions with affiliates.
Limitation on mergers, mergers by absorption and sales of assets.
Limitation on designation of unrestricted Subsidiaries.
NOTE 8: CALCULATION OF THE CONSOLIDATED EBITDA AND CONSOLIDATED EBITDA
COVERAGE RATIO
In accordance with the commitments under the issuance of Negotiable Bonds,
the breakdown of the calculation of the EBITDA shall be the following:
<TABLE>
<S> <C> <C>
Net consolidated loss of subsidiary................ (9,694,369)
Plus:
Income tax......................................... 4,188,379
Financial gain/(loss).............................. 27,359,051
Depreciation and Amortization...................... 14,839,390
Minority interest.................................. 921,246
Extraordinary loss................................. 1,075,854 48,383,920
---------- ----------
Less:
Dividends from the minority interest (Net of
corresponding payments received from the PPAP).... (200,444)
Financial gain/(loss) (1).......................... (657,251)
Amortization of negative goodwill.................. --
Extraordinary income............................... -- (857,695)
---------- ----------
37,831,856
==========
</TABLE>
- --------
(1)Does not include charges for late payment
According to the commitments undertaken under the negotiable Bond Issuance
Program, the breakdown of the calculation of the consolidated EBITDA coverage
Ratio is as follows:
<TABLE>
<S> <C> <C>
Consolidated EBITDA (last four quarters).............. 28,957,535
Proforma Consolidated interest expenses + Dividends 37,831,856 = 1.306
paid to third parties................................
</TABLE>
NOTE 9: MANAGEMENT PERIOD OF EDEA S.A.
In accordance with the provisions of Sections 6 through 12 of the License
Agreement, the term thereof shall be divided into management periods. The
first period shall extend for fifteen years, as from takeover, and the
remaining eight periods shall be for ten years each, as from the end of the
preceding management period.
At least six months prior to the end of each management period, Inversora
Electrica de Buenos Aires S.A. shall be able to sell its holding of Class A
shares of the Licensee -EDEA S.A.- through an International Public Bidding
called for by the Ministry of Works and Public Services of the Province of
Buenos Aires.
I-138
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 10: SECURITIES GRANTED BY THE CONTROLLED COMPANY
In compliance with section 38 of the License Agreement, Class A Shares of
EDEA, owned by Inversora Electrica de Buenos Aires S.A., are pledged in
security for the performance of the obligations undertaken thereunder, under
the following terms and conditions:
* The pledged Class A shares shall be delivered to the Licensor.
* The holders of Class A shares shall undertake the obligation to increase
this security by creating a similar pledge on any Class A shares acquired
thereafter by the Licensee, as a result of new capital contributions or
capitalization of profits and/or balances of capital adjustments and/or
share dividends.
* The pledge thus created shall be maintained during the term of the
License and such lien shall survive the succeeding transfers of Class A
shares.
NOTE 11: RESTRICTIONS ON THE TRANSFER OF SHARES
According to Section 16 of the License Agreement, Inversora Electrica de
Buenos Aires S.A., as majority shareholder of the Class A shares of EDEA,
shall not modify its holding of such shares or sell then for five (5) years as
from the date of the enforcement of the License Agreement (June 2, 1997).
Following such five-year period, Inversora Electrica de Buenos Aires S.A.
shall be able to modify or sell its shareholding, prior authorization of the
Competent Authority.
Pursuant to Section 16 in fine of the License agreement and to Section 9 of
the By-laws, the shareholders of Inversora Electrica de Buenos Aires S.A. are
restricted over a five-year period as from the enforcement of the License
(June 2, 1997) from modifying their holding of such shares or selling the
shares of such Investment Company by a proportion and amount exceeding FORTY
NINE PERCENT (49%) of their respective shareholdings of the Investment
Company. Following such five-year period, the shareholders will be allowed to
dispose of their shareholdings upon prior notice to the Provincial Executive
Power through the Relevant Authority, as provided for in Provincial Law No.
11,769.
In addition, the technical operator of EDEA S.A. shall not, over a five-year
period as from the takeover (June 2, 1997) modify his holding of such shares
or sell its Class A shares by a proportion and amount exceeding 39.20% of the
total shares representing the capital stock of the Company. Following such
five-year period, EDEA S.A. shall be able to modify its shareholding or sell
its Class A Shares subject to the ordinary regulations set forth in connection
with any of the Company's shareholders.
NOTE 12: FORWARD CONTRACTS
At December 31, 1999, EDEA S.A. has energy sale forward contracts, some of
which were received as a result of the privatization process, as follows:
-- 29 contracts with cooperatives, maturing on year 2001,
-- 15 contracts with large customers maturing between 2000 and 2002.
NOTE 13: INVESTMENTS AND ELECTRIC ENERGY SUPPLY SYSTEM
It is EDEA S.A.'s responsibility to make the necessary investments to ensure
the rendering of the public service in conformity with the quality levels set
in the license agreement, as well as to execute block energy
I-139
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
purchase and sale contracts that it considers necessary to cover the current
and future demand within the licensed area, in addition to the energy purchase
and sale contracts with Central Termica San Nicolas S.A. and the cold reserve
contract with Eseba Generacion and Eseba S.A. or their predecessors, which are
a requirement of the license, and the lack of supply cannot be given as a
reason to be exempt from the responsibility concerning its obligation to
provide the service.
NOTE 14: RESTRICTIONS ARISING FROM THE LICENSE AGREEMENT
The rights and obligations of EDEA S.A. arising from the license agreement
may not be assigned to any third party without the prior consent of the
Provincial Executive Power. However, the prior consent of the Provincial
Executive Power shall not be necessary to assign to a third party, for the
purpose of granting a security, the economic rights arising from the actual
rendering of the utility service regarding which the Licensee is entitled to
render pursuant to the license agreement.
NOTE 15: RESTRICTED ASSETS
EDEA S.A. shall be forbidden to create any mortgage, pledge, lien or
security interest in favor of third parties upon the assets essential for the
service. Notwithstanding the foregoing, EDEA S.A. shall dispose without
restrictions of those assets which in the future may be deemed inadequate or
unnecessary for such purpose. This restriction shall not extend to the
creation of real property rights granted by EDEA S.A. upon an asset at the
moment of its acquisition, as a security for the compliance of the payment of
the purchase price.
NOTE 16: LABOR COMMITMENTS TOWARDS EDEA S.A.'S PERSONNEL
In accordance with the provisions of Section 26 of the Collective Bargaining
Agreement, every employee availing himself of the pension benefit plan, as
well as his beneficiaries, in the case of employees who may have died while
rendering services, shall be granted a bonus based on his monthly remuneration
and seniority.
According to the foregoing, the total cost recorded under income for the
period, based on actuarial estimates, is made up of the following items:
<TABLE>
<CAPTION>
(Pesos)
-------
<S> <C>
Costs of services.................................................... 183,340
Interest costs....................................................... 109,695
Amortization of initial commitment................................... 236,271
-------
Total................................................................ 529,306
=======
</TABLE>
where Costs of Services represent the current estimated actuarial value of the
portion of indemnity attributable to the year, Interest Cost corresponds to
the interest on the Projected Commitment and the Amortization is the portion
corresponding to the Initial Liabilities at June 2, 1997, which amounted to
Pesos 2,435,196, to be amortized in 15 equal annual installments.
At December 31, 1999, the Projected Commitment has been calculated in a
total of Pesos 3,967,886 and the Cumulative Commitment (current actuarial
value of the portion of indemnity attributable to past services) totalled
Pesos 2,885,635.
Considering that the Cumulative Commitment should be disclosed as a minimum,
the Minimum Additional Liabilities are recorded as a balancing entry under the
Intangible Assets caption, for a total of Pesos 1,777,742 at December 31,
1999.
I-140
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 17: RESTRICTION ON FUNDS
The Argentine Central Bank (the "BCRA") resolved, under Resolution No. 365
dated August 20, 1997, the complete suspension of the transactions of Banco
Credito Provincial S.A., except for those transactions related to the Central
Bank derived from monetary regulation and/or exchange transactions;
transactions related to purchase and credit cards existing at that date;
credit collection transactions, mere custody administrative transactions or
those related to the compliance with labor, social security or fiscal
obligations; and the payment of pension and survivors' benefits with funds
provided by the National Administration of Social Security.
In addition, on December 18, 1997, the BCRA through Resolution No. 741
authorized the group of mayor depositors of Banco Credito Provincial S.A., to
integrate a retail commercial bank named Mercobank S.A., created pursuant to
the provisions of section 7 of the Financial Institutions Law.
Mercobank S.A. acknowledged EDEA S.A. deposits for Pesos 1,435,528
equivalent to 60% of the total amount owed by Banco Credito Provincial, and
EDEA, as major depositor, instructed the institution about the application of
these deposits for an amount of up to Pesos 717,764 earmarked for the
subscription of 717,764 ordinary shares, with a face value of Pesos 1 each, as
irrevocable capital contribution.
In exchange for the difference in this connection, on May 19, 1998 the
company received from Mercobank S.A. a certificate covering a time deposit and
on June 3, 1998 it collected the coupon No. 1 plus interest accrued for Pesos
147,560. Pesos 574,351 are still pending collection.
In exchange for the balance of privileged liabilities for deposits not
assumed by Mercobank S.A., EDEA S.A. would receive Pesos 957,017 in Class C
Participation Certificates of the trust set up by Mercobank S.A., of which
Promotora Fiduciaria S.A. is the trustee; those certificates are equivalent to
40% of the total amount owed by Banco Credito Provincial S.A.
On August 25, 1998, Mercobank S.A. subscribed 215,620 ordinary shares, with
a face value of Pesos 1 each, through the capitalization of Pesos 215,620 of
the amount of the Class C Participation Certificates of the trust mentioned in
the preceding paragraph. In view of this, the balance of those certificates
totals Pesos 741,397. At December 31, 1999, EDEA S.A. had determined to
provision all the class C certificates.
On April 30, 1999 the Shareholders' Meeting of Mercobank S.A. resolved to
reduce the capital in approximately $ 20,144,000 in order to absorb the
accumulated negative results generated up to December 31, 1998. This decrease
was applied prorata amongst all the Bank's shareholders. Furthermore, it was
resolved to increase capital through the subscription of shares for the amount
of the time deposit certificates which the shareholders received from
Mercobank S.A. and which to-date have not expired.
As a result of what is mentioned in the preceding paragraph, on December 31,
1999, EDEA holds 1,152,590 shares with a face value of $ 1 (one peso). EDEA
has decided to set up a provision for $ 896,238 for the valuation of estimated
recovery value of the shares held in Mercobank S.A.'s portfolio.
At December 31, 1999, the Extraordinary Net Income/(Loss) caption includes $
1,075,854, which is the devaluation of the shares and the increase in
uncollectibility of the Class C certificates during the year.
I-141
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 18: FINANCIAL INCOME/(LOSS)
The breakdown of this caption at December 31, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
(Pesos) (Pesos)
----------------- -----------------
<S> <C> <C>
Generated by assets
Surcharges for late payment.............. 1,885,525 1,609,225
Interest................................. 658,035 736,715
Exchange differences and others.......... (686) 71,843
----------- -----------
Subtotal................................. 2,542,874 2,417,783
----------- -----------
Generated by liabilities
Bank fees and expenses................... (201,624) (642,662)
Interest on bank loans and others........ (23,662,637) (22,108,084)
Tax on financial cost.................... (3,615,328) (912,337)
Exchange differences..................... (13,746) (12,639)
----------- -----------
Subtotal................................. (27,493,335) (23,675,722)
----------- -----------
Total.................................... (24,950,461) (21,257,939)
=========== ===========
</TABLE>
NOTE 19: OTHER INCOME (EXPENDITURE), NET
At December 31, 1999 and 1998 the breakdown of this caption is as follows:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
(loss)/income (loss)/income
(Pesos) (Pesos)
----------------- -----------------
<S> <C> <C>
Recovery of bad debt allowance
(Schedule E).......................... 855,907 2,851,000
Recovery/(Loss) Provision for lawsuits
(Schedule E).......................... 120,000 (120,000)
Income from sales of fixed assets...... 724,816 --
Others................................. 25,431 184,742
--------- ---------
Total.................................. 1,726,154 2,915,742
========= =========
</TABLE>
NOTE 20: INTERCOMPANY TRANSACTIONS
As at December 31, 1999 and 1998, intercompany transactions are as follows:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
(Pesos) (Pesos)
----------------- -----------------
<S> <C> <C>
Transactions loss/(Income)
Camuzzi Gas Pampeana S.A............... 240,140 734,289
Camuzzi Gas Pampeana S.A............... (50,715) (55,121)
Camuzzi Argentina S.A. 1,335,549 (1) 1,222,939 (2)
Central Piedra Buena S.A............... 4,115,644 6,109,488
CNG International Corporation.......... 44,070 61,394
Sodigas Pampeana S.A................... 24,375 --
Empresa de Energia Rio Negro S.A....... (17,600) --
United Utilities International
Argentina S.A......................... 1,339,597 1,421,379
United Utilities International Ltd..... 34,380 103,435
</TABLE>
I-142
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A. AND ITS SUBSIDIARY COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
- --------
(1) Includes Pesos 268,000 in Intangible Assets and $ 32,000 in Fixed Assets
(Works in Progress)
(2)Includes Pesos 207,708 in Intangible Assets.
NOTE 21: TAX ON MINIMUM HYPOTHETICAL INCOME.
The Company filed a Declaratory Action of Unconstitutionality as a
precautionary measure, so as to avoid payments of the tax corresponding to the
Minimum Hypothetical Income for the year ended December 31, 1998.
During February and March 1999 the first two prepayments of this tax were
paid under protest; and the Company expressly reserves the right to claim the
recovery of what had been paid, which amounts to $ 304,888. This amount is
disclosed net of the debt for said tax in the caption Tax Liabilities.
Additionally, the Company did not pay the third and last prepayment of $
152,444 at its due date (April 15, 1999).
NOTE 22: ADVANCED DIVIDENDS
On July 27, 1999 the Board of Directors of EDEA S.A. proposed the
distribution of dividends in advance for Pesos 7,544,700, subject to the
approval of the Shareholders' Meeting, of which Pesos 6,790,230 corresponded
to IEBA S.A. which had collected them in their entirety at the closing date of
these financial statements.
I-143
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A. AND ITS SUBSIDIARY
FIXED ASSETS
For the fiscal years commenced January 1, 1999 and 1998
and ended December 31, 1999 and 1998
Schedule A
<TABLE>
<CAPTION>
OPENING VALUE DEPRECIATION
------------------------------------------------------------ --------------------------------------------------
For the year
--------------------------------------
Value at Accumulated
beginning Additions at Accumulated
of year for the Value at beginning at end of
Item (Note 2.b) year Transfers Deletions end of year of year Rate Amount(2) Deletions year
---- ----------- ---------- ----------- --------- ----------- ----------- ----- ---------- --------- -----------
(Pesos) (Pesos) (Pesos) (Pesos) (Pesos) (Pesos) % (Pesos) (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lines........... 237,294,808 -- 8,244,764 219,105 245,320,467 8,705,850 2,32 5,627,693 8,992 14,324,551
Connections..... 79,089,755 -- 1,114,620 -- 80,204,375 2,881,698 2,30 1,842,874 -- 4,724, 572
Transformers.... 5,758,100 -- 725,080 -- 6,483,180 278,003 3,05 189,953 -- 467,956
Operation
devices......... 26,262,121 -- 2,649,668 -- 28,911,789 1,268,571 3,00 853,604 -- 2,122,175
Substations..... 12,092,951 -- 1,339,725 -- 13,432,676 536,180 2,80 365,185 -- 901,365
Operating
Equipment....... 3,074,271 374,050 1,714,747 -- 5,163,068 831,123 12,75 618,064 -- 1,449,187
Control
Systems......... -- -- 535,241 -- 535,241 -- 9,00 59,471 -- 59,471
Materials and
spare parts..... 8,334,030 4,150,387 (4,065,109) 1,445,007(1) 6,974,301 -- -- -- -- --
Meters in use... 18,543,278 -- 830,626 -- 19,373,904 1,793,208 6,46 1,217,520 -- 3,010,728
Tools........... 303,282 194,857 6,089 -- 504,228 74,339 33,33 143,595 -- 217,934
Devices and
instruments..... 137,002 60,503 -- -- 197,505 6,085 20,00 36,583 -- 42,668
Computer
equipment....... 1,251,697 249,106 -- -- 1,500,803 418,600 33,33 473,064 -- 891664
Communications
equipment....... 108,275 94,408 27,886 -- 230,569 34,799 33,33 66,655 -- 101,454
Facilities...... 143,422 34,287 -- -- 177,709 34,081 33,33 57,386 -- 91,467
Furniture and
fixtures........ 231,512 8,508 -- -- 240,020 46,068 20,00 47,341 -- 93,409
Vehicles........ 2,158,543 603,767 -- 21,200 2,741,110 214,189 20,00 351,930 3,028 563,091
Works in
progress........ 17,981,309 12,395,935 (13,629,921) -- 16,747,323 -- -- -- -- --
Land............ 2,632,974 162,000 -- -- 2,794,974 -- -- -- -- --
Buildings....... 21,473,466 518,000 640,284 -- 22,631,750 22,163 2,00 30,491 -- 52,654
Advances to
suppliers....... 190,909 2,998 (133,700) -- 60,207 -- -- -- -- --
----------- ---------- ----------- --------- ----------- ---------- ----- ---------- ------ ----------
Total at
December 31,
1999............ 437,061,705 18,848,806 -- 1,685,312 454,225,199 17,144,957 -- 11,981,409 12,020 29,114,346
=========== ========== =========== ========= =========== ========== ===== ========== ====== ==========
Total at
December 31,
1998............ 415,951,841 22,402,742 -- 1,292,878 437,061,705 5,931,789 -- 11,213,573 405 17,144,957
=========== ========== =========== ========= =========== ========== ===== ========== ====== ==========
<CAPTION>
Net Net
carrying carrying
value at value at
Item 12.31.99 12.31.98
---- ----------- -----------
(Pesos) (Pesos)
<S> <C> <C>
Lines........... 230,995,916 228,588,958
Connections..... 75,479,803 76,208,057
Transformers.... 6,015, 224 5,480,097
Operation
devices......... 26, 789,614 24,993,550
Substations..... 12, 531,311 11,556,771
Operating
Equipment....... 3,713,881 2,243,148
Control
Systems......... 475,770 --
Materials and
spare parts..... 6,974,301 8, 334,030
Meters in use... 16,363,176 16,750,070
Tools........... 286,294 228,943
Devices and
instruments..... 154,837 130,917
Computer
equipment....... 609,139 833,097
Communications
equipment....... 129,115 73,476
Facilities...... 86,242 109,341
Furniture and
fixtures........ 146,611 185,444
Vehicles........ 2,178,019 1,944,354
Works in
progress........ 16,747,323 17,981,309
Land............ 2,794,974 2,632,974
Buildings....... 22,579,096 21,451,303
Advances to
suppliers....... 60,207 190,909
----------- -----------
Total at
December 31,
1999............ 425,110,853 --
=========== ===========
Total at
December 31,
1998............ -- 419,916,748
=========== ===========
</TABLE>
- ----
Note:
(1) Includes consumption of materials and spare parts for Pesos 1,303,671
(included in Schedule H and Expenses and Services for Maintenance and
Operation) and Other Expenditures for Pesos 141,336.
(2) Included in Schedule H.
I-144
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A. AND ITS SUBSIDIARY
INTANGIBLE ASSETS
For the fiscal years commenced January 1, 1999 and 1998 and ended December 31,
1999 and 1998
Schedule B
<TABLE>
<CAPTION>
OPENING VALUE DEPRECIATION
------------------------------------------ -----------------------------------------------------------
For the year
---------------------------------
Accumulated
Value at Additions Value at at Accumulated
Principal beggining for the end of beginning at end of
Account of year year Deletions year of year Rate Amount(1) Deletions (1) year
--------- ---------- --------- --------- ---------- ----------- ----------- --------- ------------- -----------
(Pesos) (Pesos) (Pesos) (Pesos) (Pesos) % (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pre-operating
and organization
expenses........ 2,821,829 487,307 -- 3,309,136 212,396 6,67 216,764 -- 429,160
Consulting fees
and other
expenses re.
international
public bidding
for the purchase
of EDEA S.A's
shareholding.... 5,765,495 -- -- 5,765,495 608,583 6,67 384,367 -- 992,950
Expenses re. the
issue of
Negotiable
Bonds........... 4,233,826 -- -- 4,233,826 946,696 20,00/14,30 710,021 -- 1,656,717
Expenses re.
Loan from
Citibank........ 4,636,232 -- -- 4,636,232 1,180,217 20,00/14,30 745,398 -- 1,925,615
Costs and
Expenses assumed
under the
License
Agreement....... 3,596,330 -- -- 3,596,330 345,926 6,67 243,330 -- 589,256
Labor
undertakings as
per Section 26
Collective
Bargaining
Agreement
(Note 16)....... 1,733,370 609,922 -- 2,343,292 399,066 -- 166,484 -- 565,550
Systems
development..... 1,057,648 177,477 -- 1,235,125 133,845 20,00 226,268 -- 360,113
Licenses for
software........ 239,711 718,876 -- 958,587 77,991 33,33 165,349 -- 243,340
---------- --------- -------- ---------- --------- ----------- --------- ------- ---------
Total at
December 31,
1999............ 24,084,441 1,993,582 -- 26,078,023 3,904,720 -- 2,857,981 -- 6,762,701
========== ========= ======== ========== ========= =========== ========= ======= =========
Total at
December 31,
1998............ 22,344,253 1,887,650 (147,462) 24,084,441 1,237,827 -- 2,699,866 (32,973) 3,904,720
========== ========= ======== ========== ========= =========== ========= ======= =========
<CAPTION>
Net book Net book
Principal value at value at
Account 12.31.99 12.31.98
--------- ---------- ----------
(Pesos) (Pesos)
<S> <C> <C>
Pre-operating
and organization
expenses........ 2,879,976 2,609,433
Consulting fees
and other
expenses re.
international
public bidding
for the purchase
of EDEA S.A's
shareholding.... 4,772,545 5,156,912
Expenses re. the
issue of
Negotiable
Bonds........... 2,577,109 3,287,130
Expenses re.
Loan from
Citibank........ 2,710, 617 3,456,015
Costs and
Expenses assumed
under the
License
Agreement....... 3,007,074 3,250,404
Labor
undertakings as
per Section 26
Collective
Bargaining
Agreement
(Note 16)....... 1,777,742 1,334,304
Systems
development..... 875,012 923,803
Licenses for
software........ 715,247 161,720
---------- ----------
Total at
December 31,
1999............ 19,315,322 --
========== ==========
Total at
December 31,
1998............ -- 20,179,721
========== ==========
</TABLE>
- ----
Note:
(1) Includes Pesos 2,691,497 and 2,408,859 for Amortization of Intangible
Assets and Pesos 166,484 and 258,034 under Salaries and Wages in Schedule H
for 1999 and 1998 respectively.
I-145
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A.
AND ITS SUBSIDIARY COMPANY
INVESTMENTS
Consolidated Balance Sheet at December 31, 1999 and 1998
Schedule C
<TABLE>
<CAPTION>
Book Book Value
Value At At
Item 12.31.99 12.31.98
---- --------- ----------
(Pesos) (Pesos)
<S> <C> <C>
CURRENT INVESTMENTS
Mutual funds
Provinfondos.......................................... 442,000 544,113
BankBoston 1784....................................... 609,157 --
--------- -------
TOTAL CURRENT INVESTMENTS............................... 1,051,157 544,113
--------- -------
TOTAL INVESTMENTS....................................... 1,051,157 544,113
========= =======
</TABLE>
I-146
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A.
AND ITS SUBSIDIARY COMPANY
ALLOWANCES
For the fiscal years commenced January 1, 1999 and 1998
and ended December 31, 1999 and 1998
Schedule E
<TABLE>
<CAPTION>
Net book Net book
Opening Additions for value at value at
Item Balances the year Decrease 12.31.99 12.31.98
---- ---------- ------------- --------- ---------- ----------
(Pesos) (Pesos) (Pesos) (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C>
DEDUCTED FROM ASSETS
Allowance for trade
receivables............ 21,935,000 3,249,471(1) 888,924(2) 24,295,547 21,935,000
Allowance for other
receivables............ 1,288,982 -- 1,288,982(4) -- 1,288,982
Allowance for other
assets................. 916,926 1,075,854(3) 355,145(4) 1,637,635 916,926
---------- --------- --------- ---------- ----------
Total at December 31,
1999................... 24,140,908 4,325,325 2,533,051 25,933,182 --
---------- --------- --------- ---------- ----------
Total at December 31,
1998................... 22,885,462 4,390,866(5) 3,135,420(6) -- 24,140,908
---------- --------- --------- ---------- ----------
CARRIED UNDER LIABILI-
TIES
For lawsuits............ 120,000 -- 120,000(7) -- 120,000
---------- --------- --------- ---------- ----------
Total at December 31,
1999................... 120,000 -- 120,000 -- --
---------- --------- --------- ---------- ----------
Total at December 31,
1998................... -- 120,000(7) -- -- 120,000
========== ========= ========= ========== ==========
</TABLE>
- --------
Note:
(1) Included in Schedule H.
(2) Pesos 855,907 were included in Other income/(expenditure), net (note 19)
and Pesos 33,017 correspond to allowances used during the year.
(3) Included in Extraordinary Net income/(loss) (Note 17).
(4) Uses during the year.
(5) Pesos 3,830,573 are included in Schedule H and Pesos 560,293 in
Extraordinary Net income/(loss) (Note 17) net of differences of Pesos
17,091 recognized by Mercobank.
(6) Pesos 2,851,000 are included in Other income/(expenditure), net (Note 19)
and Pesos 284,420 correspond to uses during the year.
(7) Included in Other Income Net (Note 19).
I-147
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A.
AND ITS SUBSIDIARY COMPANY
FOREIGN CURRENCY ASSETS AND LIABILITIES
Consolidated Balance Sheet at December 31, 1999 and 1998
Schedule G
<TABLE>
<CAPTION>
Amount in Amount in
Argentine Argentine
Type and amount of Exchange currency at currency at
ITEMS foreign currency rate (1) 12.31.99 12.31.98
----- ------------------ -------- ----------- -----------
(Pesos) (Pesos)
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and banks........... -- -- -- 304
----------- -----------
Total current
assets.............. -- 304
----------- -----------
Total assets......... -- 304
=========== ===========
CURRENT LIABILITIES
Commercial liabilities... U.S.$ 5,794,011 1.0000 5,794,011 5,978,312
Bank and financial loans
(including interest).... U.S.$ 54,510,941 1.0000 54,510,941 34,070,507
Intercompany liabilities
United Utilities
International LTD..... U.S.$ 743,078 1.0000 743,078 723,191
United Utilities
International
Argentina S.A......... -- -- -- 110,912
Central Piedra Buena... U.S.$ 791,444 1.0000 791,444 --
Camuzzi Argentina
S.A................... U.S.$ 3,134,861 1.0000 3,134,861 2,573,131
CNG International
Corporation........... U.S.$ 1,044,953 1.0000 1,044,953 857,711
----------- -----------
Total current
liabilities......... 66,019,288 44,313,764
----------- -----------
NON-CURRENT LIABILITIES
Bank and financial Loans
Negotiable bonds--
Principal............. U.S.$230,000,000 1.0000 230,000,000 230,000,000
Intercompany liabilities
United Utilities
International LTD..... -- -- -- 360,000
Camuzzi Argentina
S.A................... -- -- -- 765,000
CNG International
Corporation........... -- -- -- 255,000
----------- -----------
Total non-current
liabilities......... 230,000,000 231,380,000
=========== ===========
Total liabilities.... 296,019,288 275,693,764
=========== ===========
</TABLE>
- --------
(1) Banco Nacion official rate of exchange at 12.31.99 for U.S. Dollars.
I-148
<PAGE>
BUENOS AIRES ENERGY COMPANY S.A.
AND ITS SUBSIDIARY COMPANY
INFORMATION REQUIRED UNDER ART. 64, CLAUSE (b) OF LAW 19,550
For the fiscal years commenced January 1, 1999 and 1998
and ended December 31, 1999 and 1998
Schedule H
<TABLE>
<CAPTION>
Cost of Administrative Marketing Total at Total at
Items sales expenses expenses 12.31.99 12.31.98
----- ----------- -------------- ---------- ----------- -----------
(Pesos) (Pesos) (Pesos) (Pesos) (Pesos)
<S> <C> <C> <C> <C> <C>
Purchase of energy and
power.................. 112,236,923 -- -- 112,236,923 114,354,252
Fees for services....... 1,653,897 1,157,166 606,859 3,417,922 3,671,794
Salaries and wages...... 14,933,894 2,261,941 4,718,051 21,913,886 22,048,834
Traveling expenses...... 216,397 242,666 80,887 539,950 730,941
Taxes and charges....... 1,562,129 870 196,627 1,759,626 2,492,553
Fixed Asset
depreciation........... 11,382,339 299,535 299,535 11,981,409 11,213,573
Intangible Asset
amortization........... 340,685 2,095,299 255,513 2,691,497 2,408,859
Expenses and Services
hired for maintanance
and operation.......... 4,060,304 1,026,448 1,769,984 6,856,736 7,024,116
Postage, communications
and data processing.... 148,061 704,164 3,021,195 3,873,420 4,251,862
General expenses for
operation.............. 610,398 702,505 218,720 1,531,623 782,612
Bad debts............... -- -- 3,249,471 3,249,471 3,830,573
Advertising............. -- -- 252,796 252,796 328,657
----------- --------- ---------- ----------- -----------
Total at December 31,
1999................. 147,145,027 8,490,594 14,669,638 170,305,259 --
----------- --------- ---------- ----------- -----------
Total at December 31,
1998................. 149,993,368 8,113,198 15,032,060 -- 173,138,626
=========== ========= ========== =========== ===========
</TABLE>
I-149
<PAGE>
Free translation of the report issued for Argentine purposes in
accordance with local generally accepted accounting principles
Auditors' Report
To the President and Directors of
Buenos Aires Energy Company S.A.
In our capacity as independent public accountants, we report on the audit we
performed of the financial statements of Buenos Aires Energy Company S.A.,
detailed in point 1. below. The preparation and issuance of these financial
statements are the responsibility of the Company's Board of Directors, in the
exercise of its exclusive functions. Our responsibility is to issue a report
on such financial statements, based on our examination performed with the
scope mentioned in point 2. below.
1. FINANCIAL STATEMENTS AUDITED
We have examined the Balance Sheets of Buenos Aires Energy Company S.A. at
December 31, 1999 and 1998, as well as the Statements of Income, Changes in
Shareholders' Equity and Cash Flows for the financial years then ended,
together with notes 1 to 11 and schedules C and G.
In addition, we have examined the Consolidated Balance Sheets of Buenos
Aires Energy Company S.A. and its subsidiary Inversora Electrica de Buenos
Aires S.A. at December 31, 1999 and 1998, as well as the Consolidated
Statements of Income and Cash Flows for the financial years then ended,
together with notes 1 to 22 and consolidated schedules A, B, C, E, G and H.
2. SCOPE OF THE AUDIT WORK
Our examination was conducted in accordance with auditing standards in force
in Argentina, as approved by the Professional Council of Economic Sciences.
Those standards require that the auditor plan and perform the audit to form an
opinion about the fairness of the significant information contained in the
financial statements. An audit includes the examination, on a selective test
basis, of the judgmental elements supporting the information disclosed in the
financial statements and the evaluation of the accounting standards used in
their preparation and, as a part thereof, the fairness of the estimates made
by the Board of Directors.
3. OPINION
In our opinion, the financial statements referred to in point 1. present
fairly, in all material respects, the net worth and financial condition of the
Company at December 31, 1999 and 1998, the results of its operations, changes
in its shareholders' equity and cash flows for the financial years then ended,
as well as the consolidated net worth and financial condition of the Company,
the consolidated results of operations and consolidated cash flows of the
Company and its subsidiary, in accordance with professional accounting
standards in force in Argentina.
4. SPECIAL INFORMATION CALLED FOR BY EXISTING REGULATIONS
As called for by regulations in force, we report that:
4.1. The financial statements mentioned in point 1. above are recorded in
the Inventories and Balances book and stem from accounting records kept in
all formal respects in accordance with legal standards.
4.2. The financial statements mentioned in point 1. have been prepared in
accordance with the provisions of Law 19,550 and 22,903, as well as
Resolution N 290/97 of the National Securities Commission, except for the
non-presentation of the Informative Review, as required by that Resolution.
I-150
<PAGE>
4.3. At December 31, 1999, there no liabilities accrued in respect of
employer contributions and employee withholdings towards the Integrated
Pension and Survivors' Benefit System, according to the Company's
accounting records.
Buenos Aires,
February 17, 2000.
PRICEWATERHOUSECOOPERS
(Partner)
_____________________________________
Alberto Boruchowicz
I-151
<PAGE>
Buenos Aires Energy Company S.A.
US GAAP RECONCILIATION
<TABLE>
<CAPTION>
As of
December 31,
1999
------------
<S> <C>
Reconciliation of shareholders' equity:
Total shareholders' equity under Argentine GAAP.......... $93,811,284
U.S. GAAP Adjustments:
Deferred Income taxes.................................... (2,570,335)(a)
Deferral of expenses..................................... (3,457,755)(b)
Depreciation expenses.................................... 308,196 (c)(d)
Financing costs.......................................... (2,710,617)(e)
Minority interest........................................ 4,108,324 (f)
-----------
Total Shareholders' Equity under U.S. GAAP............... 89,489,097
-----------
</TABLE>
<TABLE>
<CAPTION>
Twelve-month
period ended
December 31,
1999
------------
<S> <C>
Reconciliation of net loss:
Net loss under Argentine GAAP............................ $(5,496,079)
U.S. GAAP Adjustments:
Deferred Income taxes.................................... (765,721)(a)
Deferral of expenses..................................... (225,568)(b)
Depreciation expenses.................................... 125,193 (c)(d)
Financing costs.......................................... 745,398 (e)
Investments.............................................. 372,079 (g)
Minority interest........................................ 101,950 (f)
-----------
Net Loss under U.S. GAAP................................. (5,142,748)
-----------
</TABLE>
<TABLE>
<CAPTION>
Twelve-month
period ended
December 31,
1999
------------
<S> <C>
Analysis of changes in shareholders' equity under U.S. GAAP:
Balance of shareholders' equity as of December 31, 1998........... $95,003,924
Net income........................................................ (5,42,748)
Unrealized holding loss in available for sale securities.......... (372,079)
-----------
Balance of shareholders' equity as of December 31, 1999........... 89,489,097
-----------
</TABLE>
I-152
