-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XCPE59jjBJkxgwpehdKsRV1AUGxtaWK4mQ4cM9+aERVMqHzNMxoreBphHTwLOgQj ZthpTXm1wsgTDSf3vKs5fg== 0000893220-94-000306.txt : 19940705 0000893220-94-000306.hdr.sgml : 19940705 ACCESSION NUMBER: 0000893220-94-000306 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA GAS SYSTEM INC CENTRAL INDEX KEY: 0000022099 STANDARD INDUSTRIAL CLASSIFICATION: 4923 IRS NUMBER: 131594808 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01098 FILM NUMBER: 94535758 BUSINESS ADDRESS: STREET 1: 20 MONTCHANIN RD CITY: WILMINGTON STATE: DE ZIP: 19807 BUSINESS PHONE: 3024295000 11-K 1 FORM 11-K, EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS 1 File No. 1-1098 FORM 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ANNUAL REPORT PURSUANT TO SECTION 15(d) of the SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1993 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM The Columbia Gas System, Inc. 20 Montchanin Road Wilmington, Delaware 19807 2 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM INDEX TO FINANCIAL STATEMENTS AND SCHEDULES AS OF DECEMBER 31, 1993 AND 1992 Report of Independent Public Accountants ........................ 3 Statements of Net Assets ........................................ 5 Statement of Changes in Net Assets .............................. 6 Notes to Financial Statements ................................... 7 Schedule A - Statements of Net Assets ........................... 12 Schedule B - Statement of Changes in Net Assets ................. 14 Item 27(a) - Schedule of Assets Held for Investment Purposes ... 15 Item 27(d) - Schedule of Reportable Transactions ................ 16 Federal Tax Consequences ........................................ 18
All other schedules are omitted as they are not applicable or are not required based on the disclosure requirements of the Employee Retirment Income Security Act of 1974 and applicable regulations issued by the Department of Labor. -2- 3 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Thrift Plan Committee of the Employees' Thrift Plan of Columbia Gas System: We have audited the accompanying statements of net assets of the Employees' Thrift Plan of Columbia Gas System (the "Plan") as of December 31, 1993 and 1992, and the related statement of changes in net assets for the year ended December 31, 1993. These financial statements and schedules referred to below are the responsibility of the Plan's management. 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 management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial status of the Employees' Thrift Plan of Columbia Gas System as of December 31, 1993 and 1992, and the changes in its financial status 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 schedules of assets held for investment purposes and reportable transactions 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, except as discussed in the following paragraph. As explained in the notes thereto, information certified by the trustee and presented in the schedule of assets held for investment purposes and the schedule of reportable transactions does not disclose the historical cost of certain investments. Disclosure of this information is required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. As discussed in Note 2, on July 31, 1991, The Columbia Gas System, Inc. ("Columbia") and its wholly owned subsidiary Columbia Gas Transmission Corporation ("Transmission") filed separate voluntary petitions seeking protection under Chapter 11 of the Federal Bankruptcy Code. Columbia and Transmission are currently operating as debtors-in-possession subject to the jurisdiction of the Bankruptcy Court. Transmission has filed a plan of reorganization with the Court to emerge from Chapter 11 and Columbia intends to file a plan of reorganization with the Court to emerge from -3- 4 Chapter 11. Although there can be no assurance Columbia and Transmission will be able to complete a successful reorganization or what the impact of such reorganization may be, the Plan is not included in the Chapter 11 filings and management does not currently believe the pendency and resolution of such filings will adversely affect the reported financial status of the Plan. Although it is management's intention to continue to operate the Plan, it is not possible to determine the ultimate effect, if any, of the bankruptcy proceedings upon the future operations of the Plan. ARTHUR ANDERSEN & CO. New York, New York June 14, 1994 -4- 5 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM STATEMENTS OF NET ASSETS
December 31, 1993 December 31, 1992 ----------------- ----------------- Assets - - ------ Investments: Columbia Stock Fund $145,239,646 $127,020,744 Fidelity Mutual Funds: Money Market/Investment Contract Fund 32,214,555 30,123,268 Ginnie Mae Portfolio 4,047,167 3,388,885 Magellan Fund 16,198,590 6,607,413 Growth & Income Portfolio 16,292,041 7,642,208 Intermediate Bond Fund 55,415,046 57,812,668 Overseas Fund 6,314,414 1,376,929 Balanced Fund 13,657,686 4,776,248 U.S. Equity Index Portfolio 41,091,202 40,203,642 ESOP (Note 5) 31,714,837 27,111,524 ------------ ------------ 362,185,184 306,063,529 Employer Contributions Receivable 934,189 877,228 Participant Deposits Receivable 1,648,240 1,546,020 ------------ ------------ Total Assets $364,767,613 $308,486,777 Liabilities - - ----------- ESOP Loan Payable (Note 5) $86,992,707 $86,992,707 Interest Payable on ESOP Loan 19,291,000 9,519,000 ----------- ----------- Net Assets $258,483,906 $211,975,070 ============ ============
The accompanying notes to financial statements and schedules are an integral part of these statements. -5- 6 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM STATEMENT OF CHANGES IN NET ASSETS
For the Year Ended December 31, 1993 ------------------------------------ Net Assets, beginning of year $211,975,070 Net Investment Income 11,227,395 Net Realized Gain on Securities Sold or Distributed 8,749,240 Net Unrealized Appreciation on Investments 25,256,497 Participants' Deposits 19,473,212 Columbia's Contributions 11,064,010 Distributions to Participants (19,489,518) Interest Expense on ESOP Loan (9,772,000) ------------ Net Assets, end of year $258,483,906 =============
The accompanying notes to financial statements and schedules are an integral part of this statement. -6- 7 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM NOTES TO FINANCIAL STATEMENTS AND SCHEDULES December 31, 1993 and December 31, 1992 1. Description of the Plan The Employees' Thrift Plan of Columbia Gas System (Plan) was adopted by the Board of Directors of The Columbia Gas System, Inc. (Columbia) on May 1, 1958. Its purpose is to encourage employees to adopt a regular savings program and to provide additional security for retirement. Each employee who works for a Columbia company participating in the Plan is eligible to join the Plan on the first day of any month after completing twelve months of service. Participation is voluntary, and participants are fully and immediately vested in the Plan. Effective April 1, 1992, a wide range of mutual funds was made available to Plan participants through Fidelity Investments' family of mutual funds. Such funds replaced Funds A and C. Funds B (renamed the Columbia Gas Common Stock Fund ("Columbia Stock Fund")), and D (renamed the Money Market/Investment Contract Fund), remain essentially unchanged. The investment funds now offered include: Columbia Stock Fund: This Fund consists almost entirely of Columbia Common Stock. A small portion is invested in money market instruments for administrative purposes. Money Market/Investment Contract Fund: Money Market/Investment Contract Fund seeks to maximize current income consistent with the preservation of capital. The Fund is invested primarily in the Fidelity Retirement Money Market Portfolio. The Fidelity Retirement Money Market Portfolio invests in high quality U.S. dollar denominated money market instruments of U.S. and foreign issuers. The remaining investment contract, which matures on January 2, 1995, is presented in the financial statements and Item 27(a) at contract value. The contract value reasonably approximates the fair market value of the investment contract. Ginnie Mae Portfolio: Fidelity Ginnie Mae Portfolio is an income-oriented mutual fund that seeks a high level of current income, but may also consider the potential for capital gain. The Portfolio invests primarily in mortgage-backed securities issued by the Government National Mortgage Association and other obligations guaranteed as to the timely payment of principal and interest by the U.S. Government, although the Portfolio itself is not guaranteed by the U.S. Government. Magellan Fund: Fidelity Magellan Fund's goal is capital appreciation. Magellan primarily invests in common stock and securities convertible into common stock of U.S., multinational, and foreign companies of all sizes and industries that offer potential for growth. Up to 20% of the Fund may be invested in debt securities. Growth & Income Portfolio: Fidelity Growth & Income Portfolio is a growth and income mutual fund that seeks long-term capital growth, current income and growth of income with reasonable investment risk. The Portfolio primarily is invested in the securities of companies with the potential for growth of earnings while paying current dividends, as well as securities convertible into common stocks, preferred stocks and fixed income securities. Intermediate Bond Fund: Fidelity Intermediate Bond Fund is an income-oriented mutual fund that seeks a high level of current income. The Fund invests primarily in investment grade (rated Baa or better by Moody's or BBB or better by S&P) corporate debt obligations, as well as obligations issued or guaranteed by the U.S. Government and its agencies or instrumentalities, U.S. banks, prime commercial paper, as well as high quality foreign debt instruments. Overseas Fund: Fidelity Overseas Fund is a growth mutual fund that seeks long-term capital growth through investments in foreign securities in both developed and emerging markets. At least 65% of its total assets are invested in securities of issuers from at least three countries outside the United States. These securities include common stock, securities convertible to common stock and debt instruments of foreign corporations and governments. -7- 8 Balanced Fund: Fidelity Balanced Fund is a growth and income mutual fund that seeks the highest amount of income possible consistent with preservation of capital by investing in a broadly diversified portfolio of high-yielding securities, including common stocks, preferred stocks and bonds. At least 25% of Balanced Fund's assets are always invested in fixed-income securities. The Fund maintains a diversified portfolio of stocks and bonds through all market conditions. U.S. Equity Index Portfolio: Fidelity U.S. Equity Index Portfolio is a growth and income mutual fund that seeks to duplicate the composition and total return of the Standard & Poor's 500 Composite Stock Price Index (S&P). The Portfolio invests primarily in the common stock of the 500 companies that make up the S&P. Through March 31, 1992, the Plan offered employees of Columbia the opportunity to invest a percentage of their monthly pay in one or more investment funds as follows: Fund A: Investments in Fund A consisted of a diversified fixed income portfolio of United States Treasury and Agency securities, corporate bonds and notes, preferred stocks and mortgage pass through securities. As circumstances warranted, temporary investments of cash reserves in money market instruments were also utilized. Fund B: Investments in Fund B consisted of Columbia Common Stock. As circumstances warranted, temporary investments of cash reserves in money market instruments were also utilized. Fund C: Investments in Fund C consisted primarily of a diversified group of high quality common stocks. The portfolio was designed to provide capital appreciation and reasonable current dividend income within prudent and acceptable parameters of risk. The portfolio also contained a varying position of cash reserves invested in money market instruments. Fund D: Fund D was invested in investment contracts with various insurance companies and in a short-term money market fund. The rate of return on Fund D was a weighted average of the returns from the investment contracts and the short-term money market fund. Effective April 1, 1992, the Thrift Plan Committee appointed Fidelity Management Trust Company (Fidelity-Boston) Trustee for the Fidelity family of mutual funds. First Fidelity Bank, N.A. (Fidelity-Philadelphia) continues to be Trustee for the Columbia Stock Fund and the Employee Stock Ownership Plan (ESOP). Employees may deposit up to 6% of their monthly base pay in the various investment funds, and Columbia will match such deposits at various levels based on the period of an employee's participation in the Plan. Columbia's contributions are invested in the Columbia Stock Fund except for employees age 55 or older who may direct monthly Columbia contributions among any of those funds available for Plan participants' deposits. Employees may also invest up to an additional 10% of their monthly base pay, but no additional contributions will be made by Columbia. Employee deposits may be made on an after-tax and/or before-tax basis. Before-tax deposits are not subject currently to federal income tax but are taxable to the employee when they are withdrawn from the Plan. Prior to age 59-1/2, an active employee may withdraw before-tax deposits only under certain hardship conditions. If an employee makes a withdrawal from his account, his future deposits are subject to various suspension periods depending on the type of withdrawal. After-tax deposits are taxed before they go into the applicable Funds of the Plan; therefore, they will not be taxed when withdrawn. Administrative expenses of the Plan are paid by the participating subsidiaries of Columbia. The value of participants' deposits in the Plan is reflected in Shares/Units in each applicable Fund. Each Share/Unit has a value equal to every other Share/Unit in that -8- 9 Fund. The value of a Share/Unit is determined daily by dividing the value of each Fund by its total number of outstanding Shares/Units. The following is a summary of the Share/Unit Values and Shares/Units outstanding as of:
December 31, December 31, 1993 1992 ----------------------------- ------------------------- Share/Unit Shares/ Unit Value Units Value Units ----------- ---------- -------- -------- ($) ($) Columbia Stock Fund 8.29 17,524,511 7.09 17,891,002 Money Market/Investment Contract Fund 1.00 32,214,555 1.00 30,123,268 Ginnie Mae Portfolio 10.86 372,667 11.07 306,132 Magellan Fund 70.85 228,632 63.01 104,863 Growth & Income Portfolio 22.22 733,215 19.71 387,733 Intermediate Bond Fund 10.78 5,140,542 10.41 5,553,570 Overseas Fund 27.43 230,201 19.90 69,192 Balanced Fund 13.39 1,019,991 12.29 388,629 U.S. Equity Index Portfolio 17.27 2,379,340 16.38 2,454,435
As of December 31, 1993 and 1992, the only individual security held by the Plan in excess of 5% of net assets was Columbia common stock, valued at $145,239,646 and $127,020,744, respectively. The above is a brief description of the Plan and is provided for general information purposes only. Participants should refer to the Plan documents for more complete information. 2. Chapter 11 Bankruptcy filings On July 31, 1991, Columbia and its wholly-owned subsidiary, Columbia Gas Transmission Corporation (Transmission), filed separate voluntary petitions seeking protection under Chapter 11 of the Federal Bankruptcy Code. Columbia and Transmission are currently operating as debtors-in-possession subject to the jurisdiction of the Bankruptcy Court. Transmission has filed a plan of reorganization with the Court to emerge from Chapter 11 and Columbia intends to file a plan of reorganization with the Court to emerge from Chapter 11. Although there can be no assurance Columbia and Transmission will be able to complete a successful reorganization or what the impact of such reorganization may be, the Plan is not included in the Chapter 11 filings and management does not currently believe the pendency and resolution of such filings will adversely affect the reported financial status of the Plan. Although it is management's intention to continue to operate the Plan indefinitely, it is not possible to determine the ultimate effect, if any, of the bankruptcy proceedings upon the future operations of the Plan. 3. Summary of significant accounting policies (A) Valuation of Investments The assets of the Plan are reflected in the accompanying Statements of Net Assets based on quoted market prices and per share net asset value. The investment contract is based on contract value, which reasonably approximates the fair market value of the asset. (B) Basis of accounting. The accounts of the Plan have been maintained on a modified cash basis of accounting by Fidelity-Boston for the family of mutual funds, and by Fidelity- -9- 10 Philadelphia for Columbia Stock Fund and the ESOP Suspense Account, which holds the unallocated shares under the ESOP; however, the accompanying financial statements have been prepared on an accrual basis, as of December 31, 1993 and December 31, 1992, by application of memorandum entries to reflect: (1) participants' deposits and Columbia's contributions receivable; (2) ESOP loan payable; and (3) interest payable on ESOP loan. (C) Net realized gain on securities sold or distributed. The cost of securities sold or distributed is determined on the revalued cost of assets basis (revalued cost), whereby the cost of assets is adjusted to reflect the market value of assets as of the prior year end or purchase price if bought in the current year. The Plan recognized a gain or loss on the sale of securities and the distribution of Columbia Gas Common Stock to withdrawn participants in settlement of their accounts equal to the difference between the revalued cost and market value of the securities sold or distributed through December 31, 1993. Sales of temporary investments, such as demand notes, United States Treasury Bills, Certificates of Deposit and commingled funds of money market instruments, have been excluded because no gains or losses resulted. (D) Unrealized appreciation (depreciation) on investments. Fidelity Boston determines the market value of all assets and share values on a daily basis. Unrealized appreciation (depreciation) is equal to the difference between the revalued cost of assets or purchase price if bought in the current year and market value of assets at December 31, 1993. 4. Participating Companies The names of the participating companies, as of December 31, 1993, with contributions and deposits for the year ended December 31, 1993 are shown below:
Columbia Employee Contributions Deposits ------------- ---------- Columbia Coal Gasification Corp. . . . . . . . . . . . $9,277 $13,873 Columbia Gas Development Corp. . . . . . . . . . . . . 267,002 631,326 Columbia Gas Transmission Corp. . . . . . . . . . . . . 3,503,308 6,200,681 Columbia Gas of Kentucky, Inc. . . . . . . . . . . . . 272,035 489,797 Columbia Gas of Maryland, Inc. . . . . . . . . . . . . 66,346 120,650 Columbia Gas of Ohio, Inc. . . . . . . . . . . . . . . 3,431,846 5,831,482 Columbia Gas of Pennsylvania, Inc. . . . . . . . . . . 917,168 1,521,517 Columbia Gas System Service Corp. . . . . . . . . . . . 856,662 1,472,704 Columbia Gulf Transmission Company . . . . . . . . . . 710,631 1,270,016 Columbia Propane Corp. . . . . . . . . . . . . . . . . 15,516 33,215 Columbia LNG Corp. . . . . . . . . . . . . . . . . . . 29,811 40,170 Columbia Natural Resources . . . . . . . . . . . . . . 419,243 737,807 Commonwealth Gas Services, Inc. . . . . . . . . . . . . 353,803 683,016 Commonwealth Propane, Inc. . . . . . . . . . . . . . . 167,388 335,150 TriStar Ventures Corp. . . . . . . . . . . . . . . . . 16,246 27,766 Columbia Energy Services. . . . . . . . . . . . . . . . 27,728 64,042 ----------- ----------- Total . . . . . . . . . . . . . . . . . . . . . . . $11,064,010 $19,473,212 =========== ===========
-10- 11 5. Employee Stock Ownership Plan In 1990, Columbia established a Leveraged Employee Stock Ownership Plan (ESOP). The ESOP was designed to pre-fund a portion of the matching obligation under the terms of the Thrift Plan and to utilize tax advantages afforded by the Internal Revenue Code. In October 1991, the Board of Directors of Columbia authorized the termination of the ESOP subject to the approval of the Bankruptcy Court. It is anticipated that the termination will be part of Columbia's plan of reorganization. Upon termination, any shares of common stock of Columbia remaining in the ESOP Trust account would be sold and the proceeds paid to the holders of debentures issued under the ESOP. Any unpaid balance due would become subject to the subordinate guarantee of Columbia and become a claim to be resolved as part of the reorganization plan. In March, 1993, First National Bank of Boston (FNBB), Trustee for the Indenture under which the ESOP debt was issued, filed a complaint against Columbia alleging tortious interference with contract for failure to pay debt service and breach of fiduciary duty. On March 24, 1994, the Bankruptcy Court issued an order denying Columbia's motion for summary judgment on the pleadings. Columbia filed a Motion for Leave to Appeal. If that motion is denied, the matter will proceed to trial. Columbia believes that it has meritorious defenses to FNBB's claims and that the non-payment of ESOP debt will not affect the participants' benefits under the Plan, as Columbia expects to fully satisfy the outstanding ESOP debt balance upon its emergence from bankruptcy. 6. Distributions As of December 31, 1993 and 1992, amounts due to participants who had requested a withdrawal were $1,972,785 and $2,248,672, respectively. 7. Tax Status See "Federal Tax Consequences" located elsewhere in this document for additional discussion of the tax status. The Plan received a favorable determination letter from the Internal Revenue Service in which it ruled that the Plan is in compliance with Section 401(a) and 401(k) and is exempt from taxation under Section 501(a) of the Internal Revenue Code (IRC). The Company and legal counsel are of the opinion that the Plan, as amended, meets the IRC requirements and, therefore, continues to be tax-exempt. 8. Other Schedules A and B below reflect additional detail by Fund of the accompanying Statements of Net Assets, for the years ended December 31, 1993 and December 31, 1992 and Statement of Changes of Net Assets for the year ended December 31, 1993. -11- 12 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM Schedule A (p. 1 of 2) STATEMENT OF NET ASSETS For the Year Ended December 31, 1993
Columbia Money Market/ Growth & Total Stock Fund Contract Fund Ginnie Mae Magellan Income ------------ ------------ ------------- ------------ ------------ ---------- ASSETS - - ------ Investments: Columbia Stock Fund $145,239,646 $145,239,646 Fidelity Mutual Funds: Money Market/Investment Contract Fund 32,214,555 $32,214,555 Ginnie Mae Portfolio 4,047,167 $4,047,167 Magellan Fund 16,198,590 $16,198,590 Growth & Income Portfolio 16,292,041 $16,292,041 Intermediate Bond Fund 55,415,046 Overseas Fund 6,314,414 Balanced Fund 13,657,686 U.S. Equity Index Portfolio 41,091,202 ESOP 31,714,837 ---------- ----------- ---------- --------- ---------- ---------- 362,185,184 145,239,646 32,214,555 4,047,167 16,198,590 16,292,041 Employer Contributions Receivable 934,189 864,456 14,600 2,057 7,377 10,210 Participant Deposits Receivable 1,648,240 623,531 159,923 30,233 150,884 125,256 ----------- ------------ ----------- ---------- ----------- ---------- Total Assets 364,767,613 146,727,633 32,389,078 4,079,457 16,356,851 16,427,507 LIABILITIES - - ----------- ESOP Loan Payable 86,992,707 -- -- -- -- -- Interest Payable on ESOP Loan 19,291,000 -- -- -- -- -- ------------ ------------ ----------- ---------- ----------- ----------- Net Assets $258,483,906 $146,727,633 $32,389,078 $4,079,457 $16,356,851 $16,427,507 ============ ============ =========== ========== =========== ===========
Intermediate Overseas Balanced U.S. Equity Bond Fund Fund Fund Index ESOP ------------ ---------- ----------- ------------ ------------ ASSETS - - ------ Investments: Columbia Stock Fund Fidelity Mutual Funds: Money Market/Investment Contract Fund Ginnie Mae Portfolio Magellan Fund Growth & Income Portfolio Intermediate Bond Fund $55,415,046 Overseas Fund $6,314,414 Balanced Fund $13,657,686 U.S. Equity Index Portfolio $41,091,202 ESOP $31,714,837 ---------- ----------- ---------- ----------- ----------- 55,415,046 6,314,414 13,657,686 41,091,202 31,714,837 Employer Contributions Receivable 13,433 3,351 9,884 8,821 -- Participant Deposits Receivable 221,731 43,156 83,237 210,289 ------------ ----------- ---------- ------------- ---------- Total Assets 55,650,210 6,360,921 13,750,807 41,310,312 31,714,837 LIABILITIES - - ----------- ESOP Loan Payable -- -- -- -- 86,992,707 Interest Payable on ESOP Loan -- -- -- -- 19,291,000 ----------- ---------- ----------- ----------- ------------- Net Assets $55,650,210 $6,360,921 $13,750,807 $41,310,312 ($74,568,870) =========== ========== =========== =========== =============
-12- 13 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM Schedule A (p. 2 of 2) STATEMENT OF NET ASSETS For the Year Ended December 31, 1992
Columbia Money Market/ Growth & Total Stock Fund Contract Fund Ginnie Mae Magellan Income ------------ ------------ ----------- ---------- ---------- -------------- ASSETS - - ------ Investments: Columbia Stock Fund $127,020,744 $127,020,744 Fidelity Mutual Funds: Money Market/Investment Contract Fund 30,123,268 $30,123,268 Ginnie Mae Portfolio 3,388,885 $3,388,885 Magellan Fund 6,607,413 $6,607,413 Growth & Income Portfolio 7,642,208 $7,642,208 Intermediate Bond Fund 57,812,668 Overseas Fund 1,376,929 Balanced Fund 4,776,248 U.S. Equity Index Portfolio 40,203,642 ESOP 27,111,524 ------------ ------------ ----------- ---------- ---------- ---------- 306,063,529 127,020,744 30,123,268 3,388,885 6,607,413 7,642,208 Employer Contributions Receivable 877,228 824,216 14,278 2,523 4,115 5,662 Participant Deposits Receivable 1,546,020 706,385 149,056 24,196 66,719 62,915 ------------ ------------ ----------- ---------- ---------- ---------- Total Assets 308,486,777 128,551,345 30,286,602 3,415,604 6,678,247 7,710,785 LIABILITIES - - ----------- ESOP Loan Payable 86,992,707 -- -- -- -- -- Interest Payable on ESOP Loan 9,519,000 -- -- -- -- -- ------------ ------------ ----------- ---------- ---------- ---------- Net Assets $211,975,070 $128,551,345 $30,286,602 $3,415,604 $6,678,247 $7,710,785 ============ ============ =========== ========== ========== ==========
Intermediate Overseas Balanced U. S. Equity Bond Fund Fund Fund Index ESOP ----------- ---------- ---------- ----------- ------------- ASSETS - - ------ Investments: Columbia Stock Fund Fidelity Mutual Funds: Money Market/Investment Contract Fund Ginnie Mae Portfolio Magellan Fund Growth & Income Portfolio Intermediate Bond Fund $57,812,668 Overseas Fund $1,376,929 Balanced Fund $4,776,248 U.S. Equity Index Portfolio $40,203,642 ESOP $27,111,524 ----------- ---------- ---------- ----------- ------------- 57,812,668 1,376,929 4,776,248 40,203,642 27,111,524 Employer Contributions Receivable 11,744 1,439 4,306 8,945 -- Participant Deposits Receivable 244,434 14,807 40,872 236,636 -- ----------- ---------- ---------- ----------- ------------- Total Assets 58,068,846 1,393,175 4,821,426 40,449,223 27,111,524 LIABILITIES - - ----------- ESOP Loan Payable -- -- -- -- 86,992,707 Interest Payable on ESOP Loan -- -- -- -- 9,519,000 ----------- ---------- ---------- ----------- ------------- Net Assets $58,068,846 $1,393,175 $4,821,426 $40,449,223 ($69,400,183) =========== ========== ========== =========== =============
-13- 14 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM Schedule B STATEMENT OF CHANGES IN NET ASSETS For the Year Ended December 31, 1993
Columbia Money Market/ Growth & Total Stock Fund Contract Fund Ginnie Mae Magellan Income ------------ ---------------- ------------- ---------- -------- -------- Net Assets, Beginning of Year $211,975,070 $128,551,345 $30,286,602 $3,415,604 $6,678,247 $7,710,785 Net Investment Income 11,227,395 1,627 1,469,801 324,594 1,292,930 815,287 Net Realized Gain on Securities Sold or Distributed 8,749,240 6,298,499 -- 11,412 548,062 463,144 Net Unrealized Appreciation/ (Depreciation) on Investments 25,256,497 15,676,801 -- (108,926) 316,026 774,869 Participants' Deposits 19,473,212 7,968,416 1,895,093 352,487 1,368,202 1,229,283 Columbia's Contributions 11,064,010 10,303,428 164,880 29,327 77,706 102,080 Distributions to Participants (19,489,518) (6,758,042) (4,484,466) (371,224) (203,235) (545,903) Interfund Exchanges -- (15,314,441) 3,057,168 426,183 6,278,913 5,877,962 Interest Expense on ESOP Loan (9,772,000) -- -- -- -- -- ------------ ------------ ----------- ---------- ----------- ----------- Net Assets, End of Year $258,483,906 $146,727,633 $32,389,078 $4,079,457 $16,356,851 $16,427,507 ============ ============ =========== ========== =========== ===========
Intermediate Overseas Balanced U. S. Equity Bond Fund Fund Fund Index ESOP ------------ ----------- ----------- ------------ ------------- Net Assets, Beginning of Year $58,068,846 $1,393,175 $4,821,426 $40,449,223 ($69,400,183) Net Investment Income 4,498,134 94,854 1,052,919 1,676,440 809 Net Realized Gain on Securities Sold or Distributed 536,117 295,506 335,913 260,587 -- Net Unrealized Appreciation/ (Depreciation) on Investments 1,458,705 600,846 30,299 1,905,373 4,602,504 Participants' Deposits 2,815,468 323,497 797,195 2,723,571 -- Columbia's Contributions 163,219 29,375 89,004 104,991 -- Distributions to Participants (4,118,442) (60,710) (534,990) (2,412,506) -- Interfund Exchanges (7,771,837) 3,684,378 7,159,041 (3,397,367) -- Interest Expense on ESOP Loan -- -- -- -- (9,772,000) ------------ ---------- ------------ ----------- ------------- Net Assets, End of Year $55,650,210 $6,360,921 $13,750,807 $41,310,312 ($74,568,870) ============ ========== ============ =========== =============
-14- 15 Employer ID#: 13-1594808 Plan #: 002 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM ITEM 27(a) SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1993
Identity of Issue, Borrower, Lessor, or Similar Party Description of Investment Cost(3) Value - - ------------------ ------------------------------------------- ---- ----- Columbia 17,524,511 shares of -- $145,239,646 Columbia Stock Fund(1) Fidelity-Boston 32,214,555 shares of -- 25,147,456 Money Market Portfolio Confederation Life 8.8% Guaranteed Investment -- 7,067,099 Contract maturing 1/2/1995 Fidelity-Boston 372,667 shares of Ginnie Mae Portfolio -- 4,047,167 Fidelity-Boston 228,632 shares of Magellan Fund -- 16,198,590 Fidelity-Boston 733,215 shares of Growth & Income Portfolio -- 16,292,041 Fidelity-Boston 5,140,542 shares of Intermediate Bond Fund -- 55,415,046 Fidelity-Boston 230,201 shares of Overseas Fund -- 6,314,414 Fidelity-Boston 1,019,991 shares of Balanced Fund -- 13,657,686 Fidelity-Boston 2,379,340 shares of U.S. Equity Index Portfolio -- 41,091,202 Columbia ESOP(2) -- 31,714,837 -- ------------ TOTAL THRIFT PLAN -- $362,185,184 == ============
(1) Actual shares of The Columbia Gas System, Inc. Common Stock held equals 6,339,607. (2) Actual shares of The Columbia Gas System, Inc. Common Stock held equals 1,416,155. (3) Records are maintained by Fidelity Boston on a fair market value basis; therefore, cost basis information is unavailable. -15- 16 Employer ID#: 13-1594808 Plan #: 002 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM Item 27(d) Schedule of Reportable Transactions Individual Transactions By Issue For The Year Ended December 31, 1993
Current Value of Asset on Identity Description Purchase Cost of Transaction Net Gain of Party of Asset Price Selling Price Expenses Asset Date Or (Loss) - - -------- ----------- ----------- ------------- -------- ---------- ----------- ---------- No Reportable Transactions
Note: There were no lease rentals during the year. -16- 17 Employer ID#: 13-1594808 Plan #: 002 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM Item 27(d) Schedule of Reportable Transactions Cumulative Transactions By Issue For The Year Ended December 31, 1993 Current Value of Asset on Identity Description Purchase Selling Cost of Transaction Net Gain of Party of Asset Price Price Expense Asset(1) Date(1) Or (Loss) - - --------------- ------------- --------- ---------- ------- -------- ---------- ---------- Columbia Columbia Stock Fund $29,455,950 $33,212,349 -- -- -- ($2,400,275) Fidelity-Boston Retirement Money 23,598,194 18,197,164 -- -- -- -- Market Portfolio Fidelity-Boston Magellan Fund 14,458,262 5,731,172 -- -- -- 152,325 Fidelity-Boston Growth & Income 12,941,552 5,529,732 -- -- -- 163,937 Portfolio Fidelity-Boston Intermediate Bond 12,501,503 16,893,947 -- -- -- 573,919 Fund Fidelity-Boston Balanced Fund 12,286,740 3,771,513 -- -- -- 60,972 Fidelity-Boston U.S. Equity Index 7,858,482 9,136,882 -- -- -- 661,884 Portfolio
(1) Records are maintained by Fidelity-Boston; cost and current value information are unavailable. Note: There were no lease rentals during the year. -17- 18 FEDERAL TAX CONSEQUENCES Thrift Plan accounts can be paid in different ways and at different times - depending on the needs and the various alternatives requested by the participants. Accordingly, the federal, state and local tax laws may affect each participant's individual situation. It is not possible to explain here all of the tax implications of each individual situation. Thus, each participant should seek competent advice from a tax advisor prior to requesting a distribution from the Thrift Plan. Generally: o after-tax deposits are taxed before they go into the Plan so they will not be taxed again. o before-tax deposits are not subject to federal income tax before they go into the Plan and as long as they remain in the Plan, but are generally taxable when received. o before-tax deposits are subject to current Social Security taxes, and may be subject to current state and local taxes as well. o withdrawals of investment earnings, Columbia contributions, or before-tax deposits are subject to federal income tax; an additional 10% tax is payable if the withdrawal is made prior to age 59-1/2, with the following exceptions: - withdrawals made because of disability, or death; - withdrawals made after the participant's separation from service after attainment of age 55; - withdrawals after the participant's separation from service payable at least annually in substantially equal installments over the life (or life expectancy) of the employee or the joint lives (or life expectancies) of the participant and a designated beneficiary; - withdrawals made to cover a family member's deductible medical expenses; and - withdrawals made to comply with a qualified domestic relations order (QDRO). Note: A QDRO arises out of court proceedings in which a spouse, child or other dependent is awarded a share of the participant's Thrift Plan account as a marital asset. The 1/1/87 Tax Rule During employment, a participant may withdraw after-tax deposits placed into the Plan before 1/1/87 without federal tax liability, since these monies were taxed before being deposited. The situation is different as to withdrawals of after-tax deposits placed into the Plan on or after 1/1/87. Participants may not withdraw only their deposits. To accelerate collection of tax the federal tax law requires that each withdrawal be prorated among after-tax deposits, before-tax deposits and investment earnings. Subject to the exceptions noted above, when taxable amounts are withdrawn, federal income tax plus an additional 10% tax is due if the withdrawal is made prior to age 59-1/2. -18- 19 Taxation of A Hardship Withdrawal Hardship withdrawals are subject to the federal income tax plus the additional 10% tax unless they are made on or after the date on which the participant attains age 59-1/2 or are made to cover a family member's deductible medical expenses. Lump Sum Distributions A "lump sum distribution" qualifies for special treatment under the federal tax laws. A lump sum distribution is the payment, within the same year, of the participant's entire balance under the Plan that is payable (i) on account of the participant's disability or death, (ii) after the participant has reached age 59-1/2, or (iii) on account of the participant's separation from employment. Except in the case of payments to a beneficiary on account of the participant's death, the participant must also have been a participant in the Thrift Plan for five years. The following rules apply to lump sum distributions: 1. The portion of the distribution representing a return of after-tax deposits is not subject to federal income tax. If the participant was age 50 or older before January 1, 1986 he may make a one-time election (before or after reaching age 59 1/2) of a special "ten-year averaging" available under pre-1987 tax law, or a special "five-year averaging" available under the Tax Reform Act of 1986. In general, ten-year averaging allows the participant to calculate the tax on his distribution separately from other income as if equal portions of the distribution were received over a ten-year period using 1986 tax rates. If elected, pre-1987 capital gain rules (using a 20% tax rate) will apply to the taxable portion allocated to years prior to 1974. Five-year averaging is similar, but the averaging period is shorter, as the name implies, and uses the tax rates in effect in the year of the distribution. Participants must have attained the age of 59-1/2 in order to elect five-year averaging. If the participant was younger than age 50 on January 1, 1986, he can only make a one-time election of "five-year averaging" provided his account is paid in a lump sum after reaching age 59 1/2. 2. Unless the participant otherwise elects, taxation of net unrealized appreciation on Columbia stock distributed in a lump sum is deferred until the shares are sold. At that time, gains realized will be considered as long-term capital gains to the extent of the unrealized appreciation at the time of the distribution. If the value of the stock has increased between the time of the distribution and sale, the additional gain is subject to the normal holding period on capital gains. The five year participation requirement for lump sum treatment does not apply. If a participant's distribution of Columbia stock does not qualify for lump sum treatment, then the deferral of taxation for net unrealized appreciation applies only to stock attributable to a participant's after-tax participant contributions. Annuity Distributions and Periodic Payments If the participant elects to receive a distribution in the form of an annuity, or in a series of equal periodic payments over more than one year, a portion of each payment will be considered non-taxable to the extent it represents a participants after tax deposits. In general, the portion that is not taxable is determined by multiplying each payment by a fraction, the numerator of which is the participant's total after- tax deposits (if any) and the denominator of which is the total expected payments. If the participant's -19- 20 payments started after December 31, 1986, then the following rule applies: once the total amount of payments treated as non-taxable equals the total amount of the participant's after-tax deposits, all subsequent payments are fully taxable. If a participant's payments started before January 1, 1987, this rule does not apply. Furthermore, if the participant's payments started on or before July 1, 1986 and all of his after- tax deposits were recoverable within the first three years, after-tax deposits were treated as recovered first (and therefore nontaxable), with all subsequent payment being fully taxable. Other Rules Different rules may apply to payments made directly to beneficiaries and to payments to persons who are "alternate payees" under a QDRO. Under the Tax Reform Act of 1986, an additional excise tax of 15% may also apply where an individual receives, within one calendar year, retirement distributions from one or more qualified plans in excess of a specific statutory amount. Required Withholding As of January 1, 1993, the Plan is required by federal law, to withhold 20% from the taxable portion of any cash distribution of the participant's Thrift Plan Account made directly to the participant. The participant may avoid the 20% withholding only by arranging for the Plan to make the distribution on the participant's behalf directly to an Individual Retirement Account (IRA) or other qualified benefit plan or annuity. Pursuant to this arrangement, a participant may not personally receive any distribution of his Plan interest. However, the required 20% withholding does not apply to the following distributions: - payments that will continue over the participant's life or life expectancy or over the joint lives or life expectancies of the participant and a beneficiary; - payments payable in installments over 10 years or more; - required distributions after age 70-1/2; - corrective distributions; or - payments expected to total less than $200 annually. -20- 21 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report dated June 14, 1994 included in this Form 11-K, into the Company's previously filed Form S-8 Registration Statement File No. 33-42776. ARTHUR ANDERSEN & CO. New York, New York June 27, 1994 -21- 22 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Thrift Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM June 27, 1994 By /s/ M. W. O'Donnell ---------------------------- M. W. O'Donnell Senior Vice President and Chief Financial Officer -22- -----END PRIVACY-ENHANCED MESSAGE-----