SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For fiscal year ended December 31, 1993
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
for transition period from ______________ to ______________
Commission File Number: 2-64025
A. Full title of the plan and the address of the plan if different from
that of the issuer named below: Transco Energy Company Thrift Plan.
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office: Transco Energy Company,
2800 Post Oak Boulevard, P. O. Box 1396, Houston, Texas 77251.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Transco Energy Company Thrift Plan:
We have audited the accompanying statements of net assets available for
plan benefits of the Transco Energy Company 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 estimates made by the Plan administrator, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of
the Transco Energy Company 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
financial statements taken as a whole. The supplemental schedule of
assets held for investment purposes at December 31, 1993, included as
Schedule I, and schedule of reportable transactions for the year ended
December 31, 1993, included as Schedule II, are presented for purposes 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
audits of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN & CO.
Houston, Texas
June 20, 1994
<PAGE>
TRANSCO ENERGY COMPANY THRIFT PLAN
__________________________________
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
____________________________________________________
<TABLE>
<CAPTION>
As of December 31,
________________________________
1993 1992
_____________ _____________
<S> <C> <C>
ASSETS:
Common stock of Transco Energy
Company, 1,348,837 and
1,461,668 shares, respectively $ 19,052,334 $ 20,828,775
Fixed Income Fund -
FMTC U.S. Government Reserve 962,482 -
Guaranteed Investment Contracts -
Metropolitan Life 37,531,773 65,102,132
Peoples Security Life 8,810,005 -
Life of Virginia 5,938,460 -
Provident Life 4,711,933 -
Fidelity Funds -
Magellan Fund, 121,302 and 79,935
shares, respectively 8,594,212 5,036,728
Puritan Fund, 154,092 and 15,784
shares, respectively 2,426,953 232,649
Contrafund, 16,311 shares 503,031 -
OTC Portfolio, 4,272 shares 103,131 -
Retirement Money Market Portfolio 873,826 764,681
_____________ _____________
Total investments 89,508,140 91,964,965
Loans receivable from participants 1,206,957 639,911
______________ _____________
Net assets available for plan benefits $ 90,715,097 $ 92,604,876
______________ _____________
______________ _____________
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
TRANSCO ENERGY COMPANY THRIFT PLAN
__________________________________
STATEMENT OF CHANGES IN NET ASSETS
___________________________________
AVAILABLE FOR PLAN BENEFITS
___________________________
FOR THE YEAR ENDED DECEMBER 31, 1993
____________________________________
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Cash dividends $ 394,410
Interest on investments 5,537,086
Interest on participant loans 69,855
____________
Total investment income 6,001,351
NET REALIZED GAIN ON INVESTMENTS 363,088
NET UNREALIZED APPRECIATION OF INVESTMENTS 177,925
PARTICIPANT CONTRIBUTIONS 4,429,607
WITHDRAWALS AND DISTRIBUTIONS (12,861,750)
____________
DECREASE IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (1,889,779)
NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year 92,604,876
____________
NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year $90,715,097
____________
____________
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
TRANSCO ENERGY COMPANY THRIFT PLAN
__________________________________
NOTES TO FINANCIAL STATEMENTS
_____________________________
1. DESCRIPTION OF THE PLAN:
________________________
General
_______
The Transco Energy Company Thrift Plan (the Plan) was adopted effective July
1, 1955. Participation in the Plan is available to each employee of Transco
Energy Company and its subsidiaries (collectively, Transco or the Company),
who (a) has completed at least one year 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. A newly hired or rehired employee may roll over a
distribution from another qualified plan or from a qualifying individual
retirement rollover account into the Plan within 60 days of the employee's
eligibility to participate in the Plan or 60 days from the date of
distribution from another qualified plan or from a qualifying individual
retirement rollover account, whichever is later.
Merger of the Company's
Employee Stock Ownership Plan
_____________________________
Effective September 1, 1992, the Plan was amended and restated to merge the
Company's Employee Stock Ownership Plan (ESOP) into the Plan.
Trustee
_______
First City National Bank of Houston was the trustee of the Plan through
September 1, 1992, at which time Fidelity Management Trust Company (FMTC or
the Plan Trustee) was named the Plan Trustee and record keeper. 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 September 1, 1992.
Vesting
_______
Employees vest in the Company's contributions at a rate of 20 percent per
year of service after they become a participant in the Plan. Participants
whose employment is terminated due to death, disability or retirement or who
are employees on their 65th birthday will be fully vested in the Company's
contributions. Nonvested Company contributions are forfeited five years
after the employee's termination date. Forfeitures are first applied to
reduce the Company's contribution, if any, then to pay the administrative
expenses of the Plan. Forfeitures in 1993 and 1992 were approximately
$76,807 and $39,408, respectively.
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 as its
employees.
<PAGE>
Voting Rights
_____________
All shares of Transco Energy Company common stock credited to a participant's
account are voted in confidence by the Plan Trustee, in accordance with the
participant's written instructions. In the absence of written voting
instructions at least five days prior to the date of the meeting at which the
vote is to be taken, the Plan Trustee may vote the shares in its discretion.
Investment Programs
___________________
Participants may direct the Plan Trustee, at intervals as provided by the
Plan, to invest all or part of their account in the Plan investment options:
The present investment options of the Plan are as follows:
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 investment
contracts.
Fidelity Magellan 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.
Fidelity Puritan Fund - Funds are invested in a diversified
_____________________
portfolio including common stocks,
preferred stocks, bonds, debentures,
mortgages or other evidences of
indebtedness or ownership, common trust
funds or mutual funds.
Fidelity Retirement Money - Funds are invested in obligations issued
Market Portfolio or guaranteed by the U.S. Government (the
_________________________
Money Market Portfolio).
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 Portfolio - Funds are invested in common stocks,
______________________
preferred stocks, securities convertible
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, Withdrawals,
Terminations and Distributions
______________________________
Participants are permitted to contribute from 1 percent to 12 percent (in
1 percent increments) of monthly base compensation, subject to certain
limitations for "highly compensated" employees, to the Regular Thrift
Account and/or from 1 percent to 12 percent (in 1 percent increments) to
the Supplemental Retirement Account (SRA). However, combined
contributions to the Regular Thrift Account and the SRA may not exceed a
total of 12 percent of such participant's monthly base compensation.
Company matching contributions to the Regular Thrift Account and the SRA
were suspended on January 1, 1987, due to the establishment of the
Company's Tran$tock Employee Stock Ownership Plan.
Participants who have participated in the Plan for at least 60 months,
provided they have not made a partial withdrawal during the preceding six
months, may make a total or partial withdrawal of their total vested
amount from their previous contributions and employer matching
contributions, net of previous withdrawals. However, a six-month
suspension from additional participant and employer matching contributions
results from participants making a total withdrawal.
When a participant's employment with the Company is terminated for any
reason or upon death or retirement, the entire vested balance in the
participant's account becomes eligible for distribution to the
participant, the participant's beneficiaries or legal representatives.
Net assets available for plan benefits as of December 31, 1992 includes
amounts pending distribution to participants of approximately $1,511,500.
There were no amounts pending distribution at December 31, 1993.
Participant Loans
_________________
Participants may borrow from $1,000 to a maximum amount of lesser of 50
percent of each participant's total asset value of their vested Plan
assets or $50,000, reduced by the excess, if any, of the highest loan
balance outstanding in the previous year over the loan balance currently
outstanding. Loans are limited to two loans per calendar 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 90 days of a participant's
separation from the Company. Interest rates charged on loans are
established by the Committee based on commercially comparable rates at the
time of the loan. Repayment of the principal and interest of a loan is
invested according to the participant's current investment directions for
future contributions to the Plan.
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,
reflecting the balance of investments and cash credited thereto, net of
withdrawals.
Asset Valuation
_______________
The assets of the Plan are recorded at cost in the participants' accounts
and converted to market value for financial statement presentation.
Pursuant to Department of Labor regulations, the realized gain or loss on
the sale of Plan assets, withdrawals of securities in kind and unrealized
appreciation or 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 the Company's
common stock are credited to the participant's account when received by
the Plan Trustee. Interest on Money Market Portfolio and Fixed Income
Funds is credited monthly to the participant's account.
<PAGE>
Expenses
________
The participant's account is charged with expenses in connection with the
purchase and sale of the participant's securities. All expenses incurred
in the administration of the Plan are borne by the Company. Cash from the
sale of investments not yet distributed or contributions not yet invested
in the Plan options is invested in short-term securities or pooled
investment funds, and the related earnings are used to reduce the Plan
Trustee's fee.
Reclassifications
_________________
Certain reclassifications have been made to the 1992 financial statements
to conform to the 1993 presentation.
3. FEDERAL INCOME TAXES
____________________
The Plan obtained its latest determination letter on July 2, 1990, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that
the Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, 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 and may at any time terminate the operation of
the Plan with respect to its employees. 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 Trustee, without the consent of the
participants, or which will alter the duties or liabilities of the Plan
Trustee without its consent. In the event that any modification of the
Plan would adversely affect the rights of participants as to the use of or
withdrawal from their accounts, they shall have the option for a period of
90 days to withdraw their entire account balances. The Company intends to
continue the Plan indefinitely.
<TABLE>
<CAPTION>
Exhibit I
TRANSCO ENERGY COMPANY THRIFT PLAN
__________________________________
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY OPTION
________________________________________________________________________
FOR THE PLAN YEAR ENDED DECEMBER 31, 1993
_________________________________________
Transco Fidelity
Energy Fixed Retirement
Company Income Fidelity Fidelity Money Fidelity Fidelity
Common (GIC) Puritan Magellan Market OTC Contra- Participant
Stock Fund Fund Fund Portfolio Portfolio Fund Loans Total
___________ ____________ ___________ ___________ __________ __________ __________ ___________ ____________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Cash dividends $ 394,410 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 394,410
Interest on investments - 4,336,312 279,777 843,959 32,407 9,983 34,648 0 5,537,086
Interest on participant
loans 12,096 37,680 4,191 14,303 857 196 532 0 69,855
___________ ____________ ___________ ___________ __________ __________ __________ ___________ ____________
Total investment income 406,506 4,373,992 283,968 858,262 33,264 10,179 35,180 0 6,001,351
___________ ____________ ___________ ___________ __________ __________ __________ ___________ ____________
NET REALIZED GAIN (LOSS) ON
INVESTMENTS 235,195 0 20,498 106,549 0 101 745 0 363,088
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF
INVESTMENTS (308,955) 0 (32,788) 541,338 0 (4,629) (17,041) 0 177,925
PARTICIPANT CONTRIBUTIONS 979,504 1,644,044 423,687 1,204,072 65,400 12,756 100,144 0 4,429,607
WITHDRAWALS AND
DISTRIBUTIONS (2,003,767) (10,053,586) (64,697) (689,182) (50,508) 0 (10) 0 (12,861,750)
INTERFUND TRANSFERS, net (1,063,089) (2,615,173) 1,547,959 1,596,533 64,072 83,833 385,865 0 0
PARTICIPANT LOANS, net (21,835) (496,756) 15,677 (60,088) (3,083) 891 (1,852) 567,046 0
___________ ____________ ___________ ___________ __________ __________ __________ ___________ ____________
INCREASE (DECREASE) IN
NET ASSETS AVAILABLE
FOR PLAN BENEFITS (1,776,441) (7,147,479) 2,194,304 3,557,484 109,145 103,131 503,031 567,046 (1,889,779)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year 20,828,775 65,102,132 232,649 5,036,728 764,681 0 0 639,911 92,604,876
___________ ____________ ___________ ___________ __________ __________ __________ ___________ ____________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $19,052,334 $57,954,653 $2,426,953 $8,594,212 $873,826 $103,131 $503,031 $1,206,957 $90,715,097
____________ ____________ ___________ ___________ __________ __________ __________ ___________ ____________
____________ ____________ ___________ ___________ __________ __________ __________ ___________ ____________
This exhibit is an integral part of the attached financial statements.<PAGE>
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE I
TRANSCO ENERGY COMPANY THRIFT PLAN
__________________________________
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
________________________________________________
AS OF DECEMBER 31, 1993
________________________
Identity of Number of
Issuer Description Shares Cost Current Value
_______________ ____________________________ ___________ _____________ _____________
<S> <S> <C> <C> <C>
Transco Energy
Company Common stock * 1,348,837 $ 37,491,354 $ 19,052,334
FIXED INCOME FUND:
Life of Virginia Guaranteed Investment
Contract 5,938,460 5,938,460 5,938,460
Metropolitan Life Guaranteed Investment
Contract 37,531,773 37,531,773 37,531,773
Peoples Security Guaranteed Investment
Life Contract 8,810,005 8,810,005 8,810,005
Provident Life Guaranteed Investment
Contract 4,711,933 4,711,933 4,711,933
Fidelity
Management Trust
Company U. S. Government Reserve * 962,482 962,482 962,482
FIDELITY INVESTMENTS:
Fidelity Magellan Fund * 121,302 8,115,637 8,594,212
Fidelity Puritan Fund * 154,092 2,442,738 2,426,953
Fidelity Retirement Money Market
Portfolio * 873,826 873,826 873,826
Fidelity Contrafund * 16,311 521,723 503,031
Fidelity OTC Portfolio * 4,272 107,706 103,131
LOANS RECEIVABLE FROM
PARTICIPANTS, 7% interest 1,206,957
_____________ _____________
Total assets held for
investment purposes $107,507,637 $ 90,715,097
_____________ _____________
_____________ _____________
* Party-in-interest investment
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE II
TRANSCO ENERGY COMPANY THRIFT PLAN
__________________________________
SCHEDULE OF REPORTABLE TRANSACTIONS
___________________________________
FOR THE PLAN YEAR ENDED DECEMBER 31, 1993
_________________________________________
Description of Transactions
___________________________
Identity of Number of Purchase Selling Cost of
__________________________
Party Involved Description of Asset Purchases Sales Price Price** Asset Sold Net Gain (Loss)
__________________________________________ ___________ __________ ___________ ___________ ____________ _________________
<S> <S> <C> <C> <C> <C> <C> <C>
Transco Energy
Company Common Stock* 110 82 $ 1,638,898 $ 3,341,579 $ 5,870,596 $(2,529,017)
Life of Virginia Guaranteed
Investment Contract* 1 6 6,400,000 751,834 751,834 -
Metropolitan Life Guaranteed
Investment Contract* _ 8 - 30,090,987 30,090,987 -
Peoples Security LifeGuaranteed
Investment Contract* 1 6 9,500,000 1,115,690 1,115,690 -
Provident Life Guaranteed
Investment Contract* 2 6 5,050,000 594,916 594,916 -
Fidelity Fidelity Magellan Fund* 140 70 4,128,983 1,219,387 1,165,677 53,710
Fidelity Management
Trust Company U.S. Govt. Reserve* 95 113 39,781,574 39,456,520 39,456,520 -
* Party-in-interest transaction
** Selling price equals the current value of asset on applicable transaction date.
The accompanying financial statements are an integral part of this schedule.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Thrift Plan Committee have duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
TRANSCO ENERGY COMPANY
THRIFT PLAN
Date: June 28, 1994 By: /s/ D. E. Varner
______________________ ________________________
D. E. Varner
Senior Vice President, General
Counsel and Secretary -
Transco Energy Company
Member of Thrift Plan Committee
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
_________________________________________
As independent public accountants, we hereby consent to the incorporation
of our report, dated June 20, 1994, included in this Form 11-K into the
Transco Energy Company Thrift Plan's previously filed Form S-8 Registra-
tion Statement (File No. 2-64025).
ARTHUR ANDERSEN & CO.
Houston, Texas
June 28, 1994
