SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
TEXAS GAS THRIFT PLAN
Texas Gas Transmission Corporation
3800 Frederica Street
Owensboro, Kentucky 42301
(Full Title of the Plan)
Transco Energy Company
2800 Post Oak Boulevard
Houston, Texas 77056
(Name of Issuer of the Securities
Held Pursuant to the Plan)
<PAGE>
TEXAS GAS THRIFT PLAN
INDEX
Report of Independent Public Accountants
Statement of Net Assets Available for Plan Benefits as of December 31, 1993
and 1992
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1993
Notes to Financial Statements
Exhibit I - Statement of Changes in Net Assets Available for Plan Benefits by
Option for the Year Ended December 31, 1993
Schedule I - Schedule of Assets Held for Investment Purposes as of December
31, 1993
Schedule II - Schedule of Reportable Transactions - Series of Transactions for
the Year Ended December 31, 1993
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Texas Gas Thrift Plan:
We have audited the accompanying statement of net assets available for plan
benefits of the Texas Gas Thrift Plan as of December 31, 1993 and 1992, and
the related statement of changes in net assets available for plan benefits for
the year ended December 31, 1993. These financial statements and schedules
referred to below are the responsibility of the plan administrator. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant esti-
mates made by the plan administrator, as well as evaluating the overall finan-
cial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Texas
Gas Thrift Plan as of December 31, 1993 and 1992, and the changes in its net
assets available for plan benefits for the year ended December 31, 1993, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic finan-
cial statements taken as a whole. The supplemental schedules of assets held
for investment purposes at December 31, 1993 and reportable transactions for
the year ended December 31, 1993, are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules 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.
ARTHUR ANDERSEN & CO.
Houston, TX
June 27, 1994
<PAGE>
TEXAS GAS THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
December 31,
1993 1992
<S> <C> <C>
ASSETS:
Fixed Income Fund:
U.S. Government Reserve Fund $ 4,946,918 $ 2,125,507
Guaranteed Investment Contracts:
John Hancock 5,673,360 5,284,927
Provident National 4,608,543 8,483,492
Metropolitan Life 4,201,369 3,871,514
Commonwealth Life - 5,001,138
Other 5,414,529 350
Total Fixed Income Fund 24,844,719 24,766,928
Magellan Equity Fund 15,850,917 12,976,907
Puritan Stock and Bond Fund 9,297,236 7,324,271
Retirement Government Money Market Fund 321,279 145,600
Fidelity Contrafund 1,922,873 -
Fidelity OTC Fund 690,805 -
Investment in common stock of
Transco Energy Company 5,940,169 5,366,564
Loans receivable from participants 840,089 541,254
Cash 27,743 41,328
NET ASSETS AVAILABLE FOR PLAN BENEFITS $59,735,830 $51,162,852
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TEXAS GAS THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
BEGINNING OF PERIOD $51,162,852
NET INVESTMENT INCOME:
Dividends 3,084,967
Interest on investments 1,871,896
Interest on participant loans 44,747
Gain on sale of investments, net 360,013
5,361,623
NET UNREALIZED APPRECIATION OF INVESTMENTS 1,650,749
CONTRIBUTIONS:
Employees 3,048,430
Employer 1,851,370
4,899,800
PARTICIPANT WITHDRAWALS (3,339,194)
NET INCREASE IN NET ASSETS AVAILABLE FOR PLAN BENEFITS 8,572,978
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
END OF PERIOD $59,735,830
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TEXAS GAS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
General
The Texas Gas Thrift Plan (the Plan) was adopted effective August 1, 1962,
and has been amended and restated various times since its establishment.
Participation in the Plan is available to each employee of Texas Gas
Transmission Corporation (the Company) who (a) has completed at least six
months of service, (b) is not a member of or represented by a collective
bargaining unit, unless eligibility is required by the terms of any
collective bargaining agreement, and (c) is not a nonresident alien. At
December 31, 1993 and 1992, there were 1,220 and 1,179 past and current
employees, respectively, participating in the Plan.
The Company is a wholly owned subsidiary of Transco Gas Company, which is
wholly owned by Transco Energy Company (Transco). Prior to its acquisi-
tion by Transco on April 3, 1989, the Company was a wholly owned sub-
sidiary of CSX Energy Corporation, which was a wholly owned subsidiary of
CSX Corporation (CSX).
Liberty National Bank and Trust Company (the Plan Trustee) is the trustee
for the Plan. The powers, duties and obligations of the Plan Trustee are
as set forth in the trust agreement between the Company and the Plan
Trustee dated January 1, 1984. Effective June 1, 1993, the Plan Trustee
named Fidelity Institutional Retirement Services Company (FIRSCO) as its
agent for the holding of investments and the execution of transactions in
the Transco Common Stock Fund. FIRSCO had previously been appointed the
Plan Trustee's agent for all other investment options.
The Company adopted the sixth amendment to the Plan effective March 1,
1993. This amendment added two investment options available to the par-
ticipants of the Plan. These new investment options are the Fidelity
Contrafund and the Fidelity OTC Fund (see description of investment op-
tions below).
Investment Programs
The following descriptions relate to the investment options available to
Plan participants as of December 31, 1993:
Fixed Income Fund - Funds are invested in bonds, debentures,
notes or other evidences of indebtedness
and any other property with a fixed rate
of return, including guaranteed invest-
ment contracts (the Fixed Income Fund).
As of January 6, 1994, all funds in-
vested in guaranteed investment con-
tracts that mature on or after December
<PAGE>
31, 1993 and all subsequent contri-
butions to the Fixed Income Fund will be
transferred or invested into Fidelity's
Managed Income Portfolio II.
Magellan Equity Fund - Funds are invested in growth-oriented
securities such as common stocks and
securities convertible into common stock
and mutual funds invested primarily in
common stock (the Magellan Fund).
Puritan Stock and Bond
Fund - Funds are invested in a diversified
portfolio, including common stocks,
preferred stocks, bonds, debentures,
mortgages or other evidences of in-
debtedness or ownership, common trust
funds or mutual funds (the Puritan
Fund).
Retirement Government
Money Market Fund - Funds are invested in obligations issued
or guaranteed by the U.S. Government.
Fidelity Contrafund - Funds are invested in common stocks and
securities convertible into common stock
of companies believed to be out of favor
or undervalued.
Fidelity OTC Fund - Funds are invested in common stocks,
preferred stocks, securities convert-
ible into common stocks and debt
securities on the over-the-counter (OTC)
securities market.
Transco Common Stock Fund - Funds are invested in Transco common
stock.
Contributions and Vesting
Effective July 1, 1992, each participant may contribute up to a maximum of
11 percent of gross salary in the pre-tax or after-tax options or in some
combination thereof with the option of investing in any of the investment
alternatives. If the participant elects to invest in two or more funds,
the contribution allocated to each fund must be designated in whole per-
centages and must be 10 percent or greater of participant total contribu-
tions. Participants may, subject to certain limitations, change the per-
centage of contributions invested in each fund or transfer any or all of
their account balances between funds.
<PAGE>
The employer's contributions are equal to 75 percent of participant con-
tributions up to a maximum of 6 percent of gross salary. Effective July
1, 1992, the employer's contributions become fully vested to participants
immediately upon entry into the Plan.
Loans
Effective July 1, 1992, active employee participants became eligible to
obtain loans from their accounts. Participants may borrow from $1,000 to
a maximum amount of the lesser of 50% of the market value of their entire
account or $50,000, reduced by the highest loan balance outstanding during
the twelve-month period preceding the date of the loan. Loans are limited
to two loans per calendar year (Plan year) with no more than two loans
outstanding at any one time. The term of the loan may be for any number
of consecutive six-month periods up to a maximum of five years. All loans
must be repaid within 30 days of any termination of employment or will be
considered in default and taxable to the participant. An interest rate of
the prime rate as quoted in the Wall Street Journal plus one percent is
charged on all loans. Repayment of the principal and interest of a loan
is invested according to the participant's then current investment
elections.
Administration
The Plan is administered by the Thrift Plan Committee (the Committee)
consisting of not less than three employees of the Company. The members
of the Committee are appointed by and may be removed by the Company's
board of directors. The members of the Committee and their alternates
receive no compensation for their services as such but are paid by the
Company or by Transco as its employees.
Withdrawals and Terminations
Withdrawals from the Plan consist of four different types: partial with-
drawals, voluntary withdrawals, hardship withdrawals and membership or
Plan termination.
A partial withdrawal is a withdrawal of funds from after-tax participant
contributions which can be made only after 12 months or more of participa-
tion in the Plan. Partial withdrawals may not be made more often than two
times in any Plan year.
A voluntary withdrawal is a distribution of the Company account through
June 30, 1992, including earnings, plus the value of all after-tax
employee contributions. Company contributions made after July 1, 1992,
may not be withdrawn except at retirement or other termination of employ-
ment. Participants are eligible to resume participation in the Plan on
the first day of the calendar quarter which is at least one year after the
date of the voluntary withdrawal.
<PAGE>
A hardship withdrawal consists of pre-tax participant contributions only
and are available only to active employee participants who meet certain
requirements. Participants eligible for a loan or other distribution from
the Plan are not eligible to make a hardship withdrawal. IRS regulations
prohibit participants from making contributions to the Plan for 12 months
from the date of the hardship withdrawal.
Membership in the Plan must be terminated in case of death. Retirement,
disability or other termination of employment are situations where member-
ship must be terminated if the participant's balance is $3,500 or less.
Balances exceeding $3,500 must be withdrawn no later than the close of the
quarter during which the participant reaches the age of 65. Should the
participant leave his balance in the Plan, contributions are no longer
permitted and withdrawal provisions are the same as for active employee
participants.
In the event of termination of the Plan, the Plan and the trust shall be
continued until such time as all equity has been fully distributed, at
which time the Plan and the trust shall be terminated.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan are presented on the accrual basis of
accounting. A separate account is maintained for each participant which
reflects the balance of investments and cash credited thereto, net of
withdrawals.
Asset Valuation
The assets of the Plan are recorded at market value in participant
accounts and for financial statement presentation. Pursuant to Department
of Labor regulations, the realized gain or loss on the sale of Plan assets
and withdrawals of securities in kind and unrealized appreciation
(depreciation) of Plan assets are based on the value of those assets at
the beginning of the Plan year or at the time of purchase, if acquired
during the year.
Dividends and Interest Income
For participant record keeping purposes, cash dividends on Transco common
stock are credited to participant accounts when received by FIRSCO.
Interest and dividends on the Fixed Income, Magellan, Puritan, Retirement
Government Money Market, Fidelity Contrafund and Fidelity OTC Funds are
credited to participant accounts when received by FIRSCO.
Expenses
All brokerage commissions, registration charges and certain other
administrative expenses incurred by the Plan are paid by the Company.
<PAGE>
3. FEDERAL INCOME TAX
The Plan obtained its latest determination letter on May 8, 1991, in which
the Internal Revenue Service (IRS) stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. Due to Plan amendments since receiving the determination letter,
the Company filed an application on June 27, 1994, for a new determination
letter from the IRS to ensure compliance with applicable requirements of
the Internal Revenue Code. However, the Plan administrator and the Plan's
tax counsel believe that the Plan is currently designed and being operated
in compliance with the applicable requirements of the Internal Revenue
Code. Therefore, they believe that the Plan was qualified and the related
trust was tax-exempt as of December 31, 1993 and 1992.
4. AMENDMENT AND TERMINATION
The Company has reserved the right to amend, modify or terminate the Plan
or the trust at any time. No amendment, change or modification of the
Plan or the trust agreement may be made which will deprive participants
of their benefits under the Plan, alter the basic purpose of the Plan or
give the Company any rights in funds contributed to or in assets held by
the Plan's Trustee, without the consent of the participants, or which will
alter the duties or liabilities of the Plan's Trustee without the Plan's
Trustee's consent. The Company intends to continue the Plan indefinitely.
<PAGE>
<TABLE>
EXHIBIT I
Page 1 of 2
TEXAS GAS THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY OPTION
FOR THE YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Puritan Transco
Fixed Magellan Stock and Energy Company Participant
Income Fund Equity Fund Bond Fund Common Stock Loans
(1) (2) (3) (4) (5)
<S> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT BEGINNING OF PERIOD $24,766,928 $12,976,907 $7,324,271 $5,407,892 $541,254
NET INVESTMENT INCOME:
Dividends - 1,489,893 1,147,890 232,988 -
Interest on investments 1,871,896 - - - -
Interest on participant loans 8,939 12,223 8,023 10,982 -
Gain (loss) on sale of
investments, net - 190,637 100,936 66,918 -
Total Investment Income 1,880,835 1,692,753 1,256,849 310,888 -
UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS - 1,454,327 396,621 (212,854) -
CONTRIBUTIONS
Employees 582,783 920,054 508,306 676,519 -
Employer 360,577 561,690 316,267 407,144 -
Total Contributions 943,360 1,481,744 824,573 1,083,663 -
PARTICIPANT WITHDRAWALS (2,028,256) (409,152) (643,784) (203,762) -
INTERFUND TRANSFERS, net (718,148) (1,345,662) 138,706 (417,915) 298,835
NET INCREASE IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS 77,791 2,874,010 1,972,965 560,020 298,835
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT END OF PERIOD $24,844,719 $15,850,917 $9,297,236 $5,967,912 $840,089
This exhibit is an integral part of the attached financial statements.
</TABLE>
<PAGE>
<TABLE>
EXHIBIT I
Page 2 of 2
TEXAS GAS THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY OPTION
FOR THE YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Retirement
Government
Money Market Fidelity Fidelity
Fund Contrafund OTC Fund Total
(6) (7) (8) (1 to 8)
<S> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT BEGINNING OF PERIOD $145,600 $ - $ - $51,162,852
NET INVESTMENT INCOME:
Dividends 8,773 118,713 86,710 3,084,967
Interest on investments - - - 1,871,896
Interest on participant loans 397 3,047 1,136 44,747
Gain (loss) on sale of
investments, net - 2,329 (807) 360,013
Total Investment Income 9,170 124,089 87,039 5,361,623
UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS - 38,530 (25,875) 1,650,749
CONTRIBUTIONS
Employees 37,171 227,937 95,660 3,048,430
Employer 20,096 131,094 54,502 1,851,370
Total Contributions 57,267 359,031 150,162 4,899,800
PARTICIPANT WITHDRAWALS (8,375) (23,610) (22,255) (3,339,194)
INTERFUND TRANSFERS, net 117,617 1,424,833 501,734 -
NET INCREASE IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS 175,679 1,922,873 690,805 8,572,978
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT END OF PERIOD $321,279 $1,922,873 $690,805 $59,735,830
This exhibit is an integral part of the attached financial statements.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE I
TEXAS GAS THRIFT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1993
<CAPTION>
Identity
of Number of Current
Issuer Description Shares Cost Value
<S> <C> <C> <C>
FIXED INCOME FUND:
FIDELITY MANAGEMENT
TRUST COMPANY U.S. GOVERNMENT RESERVE FUND* 4,946,918 $ 4,946,918 $ 4,946,918
LIFE OF VIRGINIA GUARANTEED INVESTMENT CONTRACT 2,115,743 2,115,743 2,115,743
OHIO NATIONAL LIFE GUARANTEED INVESTMENT CONTRACT 2,125,238 2,125,238 2,125,238
PROVIDENT NATIONAL GUARANTEED INVESTMENT CONTRACT 4,608,543 4,608,543 4,608,543
METROPOLITAN LIFE GUARANTEED INVESTMENT CONTRACT 4,201,369 4,201,369 4,201,369
JOHN HANCOCK GUARANTEED INVESTMENT CONTRACT 5,673,360 5,673,360 5,673,360
PRUDENTIAL GUARANTEED INVESTMENT CONTRACT 1,173,548 1,173,548 1,173,548
TOTAL - FIXED INCOME FUND $24,844,719 $24,844,719
FIDELITY MAGELLAN EQUITY FUND* 223,725 14,080,811 15,850,917
FIDELITY PURITAN STOCK AND BOND FUND* 590,301 8,377,468 9,297,236
FIDELITY RETIREMENT GOVERNMENT MONEY
MARKET FUND* 321,279 321,279 321,279
FIDELITY FIDELITY CONTRAFUND* 62,350 1,884,342 1,922,873
FIDELITY FIDELITY OTC FUND* 28,617 716,680 690,805
TRANSCO ENERGY
COMPANY COMMON STOCK* 420,543 9,414,833 5,940,169
LOANS RECEIVABLE FROM PARTICIPANTS, 7% 840,089 840,089
TOTAL ASSETS HELD FOR
INVESTMENT PURPOSES $60,480,221 $59,708,087
</TABLE>
* Party-in-interest investment.
<PAGE>
<TABLE>
SCHEDULE II
TEXAS GAS THRIFT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
SERIES OF TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Identity
of Number of Value of Number Cost of Selling Net Gain
Issuer Description of Asset Purchases Purchases of Sales Sales Price** (Loss)
<S> <C> <C> <C> <C> <C> <C>
Fidelity Management
Trust Company U.S. Government Reserve Fund* 58 $13,054,094 44 $11,176,344 $11,176,344 $ -
Prudential Guaranteed Investment Contract 6 3,178,962 4 2,100,000 2,100,000 -
Commonwealth Life Guaranteed Investment Contract - - 1 5,432,500 5,432,500 -
Provident National Guaranteed Investment Contract - - 1 4,241,747 4,241,747 -
Fidelity Magellan Equity Fund* 101 3,428,567 68 1,970,293 2,200,816 230,523
Fidelity Puritan Stock and Bond Fund* 84 2,813,067 45 1,188,410 1,338,914 150,504
* Party-in-interest transaction.
** The selling price equals the current value of an asset on the applicable transaction date.
</TABLE>
<PAGE>
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant, through the Texas Gas Thrift Plan Committee, has duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
TEXAS GAS THRIFT PLAN
Date: June 28, 1994 /s/ Kim R. Cocklin
______________________________
Kim R. Cocklin
Senior Vice President
and General Counsel
