SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
(Mark One)
( X ) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition period from __________ to __________
Commission file number 0-994
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(Full Title of Plan)
NORTHWEST NATURAL GAS COMPANY
220 N. W. Second Avenue
Portland, Oregon 97209
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office)
<PAGE>
ITEM 4. FINANCIAL STATEMENTS
Page
----
Financial Statements
Report of Independent Accountants 1
Statement of Net Assets Available for Benefits,
December 31, 1996 and 1995 2
Statement of Changes in Net Assets Available for Benefits,
Years Ended December 31, 1996 and 1995 3
Notes to Financial Statements, Years Ended
December 31, 1996 and 1995 4
Supplemental Information Required by ERISA,
Year Ended December 31, 1996
Schedule 1 - Schedule of Assets Held
for Investment Purposes 9
Schedule 2 - Schedule of Reportable Transactions 10
All other schedules have been omitted because the information
required is included in the financial statements or the notes thereto or the
requirements for submission of the schedules are not present.
SIGNATURE 11
EXHIBIT
23 Consent of Independent Accountants
<PAGE>
NORTHWEST NATURAL GAS
COMPANY RETIREMENT K
SAVINGS PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1996 AND 1995
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
May 16, 1997
To the Participants and Administrator of the
Northwest Natural Gas Company
Retirement K Savings Plan
In our opinion, the accompanying statement of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Northwest Natural Gas Company Retirement K Savings Plan at December 31,
1996, and the changes in net assets available for benefits for the year then
ended, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the plan's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above. The financial statements of Northwest Natural Gas Company Retirement K
Savings Plan as of, and for the year ended December 31, 1995 were audited by
other independent accountants whose report dated May 2, 1996 expressed an
unqualified opinion on those statements.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
schedules 1 and 2 is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by ERISA. The Fund Information in the statement of net assets available
for benefits and in Note 8 is presented for purposes of additional analysis
rather than to present the net assets available for plan benefits and changes in
net assets available for benefits of each fund. Schedules 1 and 2 and the Fund
Information have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
PRICE WATERHOUSE LLP
Portland, Oregon
<PAGE>
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
- --------------------------------------------------------------------------------
DECEMBER 31,
1996 1995
---- ----
Investments - at fair value:
Columbia Trust Company Collective Investment
Plan and Trust:
Cash Investment Fund ....................... $ 10,934 $ 12,073
Fixed Income Investment Fund ............... 445,822 361,266
Balanced Investment Fund ................... 11,701,970 9,686,823
Bank and Government Investment Fund ........ 2,926,042 3,195,003
Common Stock Investment Fund ............... 16,313,347 12,694,321
Columbia Special Fund ......................... 5,911,756 3,861,067
Northwest Natural Gas Company Common Stock .... 9,172,895 7,448,721
Participant loans ............................. 343,679 327,285
----------- -----------
Net assets available for benefits .................. $46,826,445 $37,586,559
=========== ===========
The accompanying notes are an integral part of this statement.
<PAGE>
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1996 1995
---- ----
Additions:
Investment income ......................... $ 1,505,686 $ 834,341
Net appreciation (depreciation) in fair value
of investments (Note 7) ................. 4,435,568 6,111,016
------------ ------------
Net investment income (Note 8) ......... 5,941,254 6,945,357
------------ ------------
Contributions:
Elective and rollovers (Note 8) ........... 4,713,368 3,816,257
Employer (Note 8) ......................... 920,583 755,684
------------ ------------
Total contributions .................... 5,633,951 4,571,941
------------ ------------
Total additions ........................ 11,575,205 11,517,298
------------ ------------
Deductions:
Withdrawals (Note 8) ...................... (2,089,243) (1,643,540)
Trustee fees and expenses ................. (246,076) (194,981)
------------ ------------
Total deductions ....................... (2,335,319) (1,838,521)
------------ ------------
Net increase in net assets available
for benefits .................................. 9,239,886 9,678,777
Net assets available for benefits,
beginning of year ............................. 37,586,559 27,907,782
------------ ------------
Net assets available for benefits,
end of year ................................... $ 46,826,445 $ 37,586,559
============ ============
The accompanying notes are an integral part of this statement.
<PAGE>
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following description of the Northwest Natural Gas Company Retirement K
Savings Plan (the "Plan") provides only general information. Participants
should refer to the Plan document for a more comprehensive description of
the Plan's provisions.
GENERAL
Northwest Natural Gas Company (the "Company") formerly had two employee
savings plans. The Bargaining Unit Employee Savings Plan ("Bargaining Unit
Plan") was established on January 1, 1988 as a trusteed, salary deferral
plan for all employees of the Company who were covered by a collective
bargaining agreement. The Northwest Natural Gas Company Employee Savings
Plan ("Non-Bargaining Unit Plan"), adopted effective January 1, 1985,
covered the remainder of employees. Effective December 31, 1991, the
Bargaining Unit Plan and Non-Bargaining Unit Plan were merged into one plan
and the plan name was changed to the Retirement K Savings Plan. Eligible
employees may begin participation after three months of service with the
Company. At December 31, 1996, the Plan had 1,224 participants of which
1,128 were active.
CONTRIBUTIONS AND WITHDRAWALS
Under the Plan, participants may elect to contribute, subject to Internal
Revenue Code limitations, up to 15% of gross pay to the Plan through salary
deferral. The Company contributes 50% of the first 4% contributed by each
non-bargaining unit employee. The match for bargaining unit employees was
50% of employee contributions up to 4% for 1996 and 50% of employee
contributions up to 3% for 1995. The maximum match is 2% of gross pay for
non-bargaining unit and bargaining unit employees. Under the hardship
withdrawal provisions of the Plan, participants may withdraw salary
deferral amounts while still employed by the Company.
INVESTMENT OPTIONS
Participants may direct contributions in any of six investment options
(four options represent collective investment funds managed by Columbia
Trust Company).
Fixed Income Investment Fund - a pooled investment fund which invests
----------------------------
in a diversified portfolio of investment-grade fixed income securities.
Balanced Investment Fund - invests in the Fixed Income Investment Fund,
------------------------
the Common Stock Investment Fund, and the Cash Investment Fund (a
pooled investment fund of money market instruments and/or money market
funds with maturities of less than one year).
Bank and Government Investment Fund - a pooled investment fund which
-----------------------------------
invests in bank investment contracts that are insured by the Federal
Deposit Insurance Corporation, government money market funds and
short-term direct obligations of the U.S. Government.
Common Stock Investment Fund - a pooled investment fund which invests
----------------------------
principally in equities and equity equivalents (convertible preferred
stock, convertible bonds, etc.).
<PAGE>
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN (CONTINUED)
INVESTMENT OPTIONS (CONTINUED)
Columbia Special Fund - a publicly-traded mutual fund which invests in
---------------------
securities considered more aggressive than the market as a whole.
Northwest Natural Gas Company Stock - Funds are invested in common
-----------------------------------
stock of Northwest Natural Gas Company.
VESTING
All contributions to participant accounts are fully vested and
nonforfeitable at all times.
PARTICIPANT LOANS
The Plan provides for participant loans under certain guidelines.
Participant loans are repaid through payroll deductions and participants'
remaining account balances are used as collateral for the loan. Interest
charged on the loans will equal the current U.S. National Bank of Oregon
prime rate plus 1%.
PAYMENT OF BENEFITS
On termination of service due to death, disability or retirement, a
participant may receive the value of his or her account as a lump-sum
distribution.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed in
preparation of the Plan's financial statements.
BASIS OF ACCOUNTING
The financial statements are prepared using the accrual basis of
accounting.
VALUATION OF INVESTMENTS
Net asset values of the Columbia Trust Company collective investment funds
and the Columbia Special Fund are determined by the trustee on a daily
basis. Investments in the Company's common stock are valued at the closing
price on the last day of the year as quoted on the Nasdaq National Market
tier of the Nasdaq Stock Market.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on the date the securities are
purchased or sold. Interest income is recorded as earned. The cost of
securities sold is determined by the average cost method.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
<PAGE>
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of 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.
3. TERMINATION PROVISIONS
In the event of any total or partial termination or discontinuance of the
Plan, the accounts of all participants shall remain fully vested and
nonforfeitable. The Company may continue the trust to pay benefits as they
mature, or liquidate and distribute the net assets of the trust among
participants and beneficiaries in proportion to their interests.
4. TRUSTEE FEES AND OTHER EXPENSES
Certain expenses of administration and servicing of the Plan, including
equipment, supplies, and payroll expenses of administrative and clerical
personnel, are provided by the Company without charge to the Plan. Trustee
expenses and investment manager fees are paid by the Plan.
5. RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Columbia
Trust Company which is the trustee as defined by the Plan. There were
purchases of Northwest Natural Gas Company stock during the years ended
December 31, 1996 and 1995 of 56,244 shares for $1,608,418 and 34,831
shares for $1,081,535, respectively.
6. FEDERAL INCOME TAX STATUS
The Plan obtained its latest determination letter dated June 1, 1995, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. Therefore, no provision for income taxes has been included in the
Plan's financial statements.
<PAGE>
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
7. NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS
During 1996 and 1995, the Plan's investments (including investments bought
or sold, as well as held during the period) appreciated (depreciated) in
value as follows:
1996 1995
---- ----
Columbia Trust Company Collective
Investment Plan and Trust:
Fixed Income Investment Fund ..... $ 19,199 $ 60,873
Balanced Investment Fund ......... 1,260,173 1,874,573
Bank and Government Investment
Fund ............................ 169,806 201,019
Common Stock Investment Fund ..... 2,774,640 2,889,344
Columbia Special Fund ................ (473,904) 328,656
Northwest Natural Gas Company
Common Stock ........................ 685,654 756,551
----------- -----------
Total ....................... $ 4,435,568 $ 6,111,016
=========== ===========
8. FUND INFORMATION
Net investment income, elective and rollover contributions, employer
contributions, and withdrawals are as follows for the years ended
December 31, 1996 and 1995:
1996 1995
---- ----
Net Investment Income:
Cash Investment Fund .......... $ 1,381 $ 1,144
Fixed Income Investment Fund .. 19,199 48,666
Balanced Investment Fund ...... 1,260,173 1,878,121
Bank and Government Investment
Fund .......................... 169,806 208,275
Common Stock Investment Fund ... 2,774,640 2,902,374
Columbia Special Fund ........... 590,444 765,934
Northwest Natural Gas Common
Stock......................... 1,096,511 1,140,843
Participant loans ............. 29,100 --
---------- ----------
Total .................... $5,941,254 $6,945,357
========== ==========
Elective and Rollover Contributions:
Fixed Income Investment Fund ..... $ 74,777 $ 55,129
Balanced Investment Fund ......... 1,192,003 890,950
Bank and Government Investment
Fund .......................... 205,812 286,261
Common Stock Investment Fund ... 1,375,873 1,119,006
Columbia Special Fund .......... 897,113 717,222
Northwest Natural Gas Common
Stock ......................... 967,790 747,689
---------- ----------
Total ..................... $4,713,368 $3,816,257
========== ==========
<PAGE>
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
8. FUND INFORMATION (CONTINUED)
1996 1995
---- ----
Employer Contributions:
Fixed Income Investment Fund ...... $ 17,952 $ 11,965
Balanced Investment Fund .......... 209,340 179,216
Bank and Government Investment
Fund ............................. 49,219 56,964
Common Stock Investment Fund ...... 282,800 212,087
Columbia Special Fund ............. 188,320 135,336
Northwest Natural Gas Common
Stock ............................ 172,952 160,116
-------- --------
Total ........................ $920,583 $755,684
======== ========
Withdrawals:
Fixed Income Investment Fund ...... $ 49,322 $ 7,013
Balanced Investment Fund .......... 435,683 419,649
Bank and Government Investment
Fund ............................. 356,271 550,705
Common Stock Investment Fund ...... 679,242 334,271
Columbia Special Fund ............. 138,275 59,984
Northwest Natural Gas Common
Stock ............................ 425,593 269,189
Participant loans ................. 4,857 2,729
---------- ----------
Total .................... $2,089,243 $1,643,540
========== ==========
9. CONCENTRATION OF RISK
The Plan's assets consist primarily of financial instruments including
cash, the Company's common stock, mutual and collective funds, and
participant loans. The financial instruments may subject the Plan to
concentrations of risk, as the market value of securities is dependent on
the ability of the issuer to honor its contractual commitments, and
investments in common stock are subject to changes in market values of the
stock.
<PAGE>
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
SCHEDULE 1
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
IDENTITY OF ISSUE, BORROWER, NUMBER MARKET
LESSOR OR SIMILAR PARTY OF SHARES COST VALUE
----------------------- --------- ---- -----
* Columbia Trust Company Collective
Investment Plan and Trust:
Cash Investment Fund........... 8,215 $ 10,934 $ 10,934
Fixed Income Investment Fund... 76,569 395,038 445,822
Balanced Investment Fund....... 1,287,690 7,532,805 11,701,970
Bank and Government
Investment Fund.............. 2,020,008 2,405,304 2,926,042
Common Stock Investment Fund... 1,189,933 8,825,421 16,313,347
Columbia Special Fund............. 297,821 6,200,815 5,911,756
* Northwest Natural Gas Company
Common Stock..................... 382,204 7,037,059 9,172,895
----------- -----------
32,407,376 46,482,766
Participant loans (interest rates
from 7% - 10%, maturities from
1/97 - 8/01).......................... 343,679 343,679
----------- -----------
Total investments...................... $32,751,055 $46,826,445
=========== ===========
* Represents identification of known party in interest of the plan.
<PAGE>
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
SCHEDULE 2
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS - SERIES
FOR THE YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT
EXPENSES VALUE OF
INCURRED ASSET ON
PURCHASE SELLING LEASE WITH COST TRANSACTION
IDENTITY OF PARTY INVOLVED PRICE PRICE RENTAL TRANSACTION OF ASSET DATE INVOLVED NET GAIN
-------------------------- ----- ----- ------ ----------- -------- ------------- --------
Columbia Trust Company Collective Investment
Plan and Trust:
<S> <C> <C> <C> <C> <C> <C> <C>
Cash Investment Fund................... $1,281,073 $1,282,722 $ - $ - $1,281,341 $1,282,722 $ 1,381
Fixed Income Investment Fund........... 217,904 151,837 - - 136,704 151,837 15,133
Balanced Investment Fund............... 1,471,781 716,806 - - 478,721 716,806 238,085
Bank and Government Investment Fund.... 303,051 741,818 - - 624,090 741,818 117,728
Common Stock Investment Fund........... 1,828,717 982,977 - - 569,265 982,977 413,712
Columbia Special Fund..................... 2,820,789 294,958 - - 261,690 294,958 33,268
Northwest Natural Gas Company Common
Stock.................................... 1,608,418 568,467 - - 443,319 568,467 125,148
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Northwest Natural Gas Company Retirement K Savings Plan Administrative Committee
has duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
NORTHWEST NATURAL GAS COMPANY
RETIREMENT K SAVINGS PLAN
By /s/ C. J. Rue
- - - - - - - - - - - - -
C. J. Rue, Chairman,
Retirement K Savings Plan
Administrative Committee
Date: June 19, 1997
<PAGE>
NORTHWEST NATURAL GAS COMPANY
EXHIBIT INDEX
to
Annual Report on Form 11-K
For Year Ended
December 31, 1996
Exhibit
Document Number
- -------- ------
Consent of Independent Accountants 23
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 of Northwest Natural Gas Company (Nos. 33-63017 and
33-63585, Post-Effective Amendment No. 1 to Registration Statement No. 2-76276,
and Post-Effective Amendment No. 2 to Registration Statement No. 2-77195) and in
the Registration Statements on Form S-3 of Northwest Natural Gas Company (Nos.
33-51271 and 33-53795, Amendment No. 1 to Registration Statement No. 333-15323,
and Post-Effective Amendment No. 1 to Registration Statement Nos. 33-1304 and
33-20384) of our report dated May 16, 1997 relating to the financial statements
of the Northwest Natural Gas Company Retirement K Savings Plan which appears as
an attachment to this Form 11-K.
PRICE WATERHOUSE LLP
Portland, Oregon
June 19, 1997
