-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TRjWPOZUS8zaAsJHyWq1JKppK4N7uRPsaJxiv3/hYlJ0WOwwFvRyfrAQx/hsBP1P frI9oQazkelA44EXO6i/6g== 0000893220-97-001211.txt : 19970701 0000893220-97-001211.hdr.sgml : 19970701 ACCESSION NUMBER: 0000893220-97-001211 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970630 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA GAS SYSTEM INC CENTRAL INDEX KEY: 0000022099 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [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: 97632455 BUSINESS ADDRESS: STREET 1: 12355 SUNRISE VALLEY DRIVE STREET 2: SUITE 300 CITY: RESTON STATE: VA ZIP: 20191-3458 BUSINESS PHONE: 7032950394 MAIL ADDRESS: STREET 1: 12355 SUNRISE VALLEY DRIVE STREET 2: SUITE 300 CITY: RESTON STATE: VA ZIP: 20191-3458 11-K 1 COLUMBIA GAS SYSTEM, INC. FORM 11-K 1 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, 1996 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM The Columbia Gas System, Inc. Suite 300, 12355 Sunrise Valley Drive Reston, Virginia 20191-3420 2 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM INDEX TO FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1996 AND 1995 Report of Independent Public Accountants.......................................................................... 3 Statements of Net Assets Available for Benefits................................................................... 4 Statement of Changes in Net Assets Available for Benefits......................................................... 5 Notes to Financial Statements and Schedules....................................................................... 6 Schedule A - Statements of Net Assets Available for Benefits...................................................... 11 Schedule B - Statement of Changes in Net Assets Available for Benefits............................................ 13 Item 27(a) - Schedule of Assets Held for Investment Purposes...................................................... 15 Item 27(d) - Schedule of Reportable Transactions.................................................................. 16 Consent of Independent Public Accountants......................................................................... 18 Federal Tax Consequences (Unaudited).............................................................................. 19
All other schedules are omitted as they are not applicable or are not required based on the disclosure requirements of the Employee Retirement Income Security Act of 1974 ("ERISA") 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 available for benefits of the Employees' Thrift Plan of Columbia Gas System (the "Plan") as of December 31, 1996 and 1995, and the related statement of changes in net assets available for benefits for the year ended December 31, 1996. These financial statements and the 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 net assets available for benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the year ended December 31, 1996, in conformity with generally accepted accounting principles. Our audits were performed 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 Fund Information in the statement of net assets available for benefits (Schedule A) and the statement of changes in net assets available for benefits (Schedule B) 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 plan benefits of each fund. The supplemental schedules and Fund Information 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. 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. ARTHUR ANDERSEN LLP New York, New York June 4, 1997 -3- 4 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS December 31, 1996 December 31, 1995 ----------------- -----------------
Assets - ------ Investments at fair value: The Columbia Gas System, Inc. Common Stock $312,295,105 $281,964,004 Interest-bearing cash 2,867,931 2,067,750 ------------ ------------ Total Columbia Gas Stock Fund $315,163,036 $284,031,754 Fidelity Mutual Funds: Retirement Money Market Portfolio $ 63,338,627 $ 40,454,700 Magellan Fund 25,427,413 27,461,720 Contrafund 14,692,522 6,465,118 Growth Company Fund 9,411,407 3,715,110 Growth & Income Portfolio 40,140,670 26,471,961 Intermediate Bond Fund 40,243,765 45,273,849 Overseas Fund 8,064,260 7,224,105 Europe Fund 3,156,219 1,250,274 Pacific Basin Fund 1,382,440 1,195,685 Balanced Fund 13,409,495 14,169,385 Capital Appreciation Fund 2,209,569 1,442,322 Short-Term Bond Fund 3,448,915 3,073,421 Spartan U.S. Equity Index Fund 60,565,817 51,424,890 ------------ ------------ Loans to Participants 7,228,579 -- ------------ ------------ $607,882,734 $513,654,294 Columbia Gas Litigation Settlement (Note 5) 2,008,983 -- Employer Contributions Receivable 1,009,880 1,023,167 Participant Deposits Receivable 1,820,000 1,816,274 ------------ ------------ Total Assets $612,721,597 $516,493,735 ============ ============
The accompanying notes to financial statements and schedules are an integral part of these statements. -4- 5 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS For the Year Ended December 31, 1996 ------------------------------------ Net Assets, Beginning of Year $516,493,735 Net Investment Income 19,581,815 Net Realized Gain on Securities Sold or Distributed 60,969,843 Net Change in Unrealized Appreciation on Investments 63,838,899 Participants' Deposits 23,564,909 Columbia's Contributions 12,471,268 Distributions to Participants (86,419,955) Interfund Exchanges 0 Columbia Gas Litigation Settlement (Note 5) 2,008,983 Loan Activity: Withdrawal (8,153,438) Administrative Fees (36,826) Repayment (Principal) 885,621 Repayment (Interest) 288,164 Net Receivable 7,228,579 ----------- 212,100 ------------ Net Assets, End of Year $612,721,597 ============
The accompanying notes to financial statements and schedules are an integral part of this statement. -5- 6 EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM NOTES TO FINANCIAL STATEMENTS AND SCHEDULES December 31, 1996 and December 31, 1995 1. Description of the Plan The Employees' Thrift Plan of Columbia Gas System (the "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. The Plan offers a wide range of funds to Plan participants. All but the Columbia Gas Stock Fund are offered through Fidelity Investments' family of mutual funds. The investment options offered include: Columbia Gas Stock Fund: This Fund consists almost entirely of Columbia Common Stock. A small portion is invested in money market instruments for administrative purposes. Retirement Money Market Portfolio: The Retirement Money Market Portfolio seeks to maximize current income consistent with the preservation of capital. The Portfolio invests in high quality U.S. dollar denominated money market instruments of U.S. and foreign issuers. Short-Term Bond Fund: The Short-Term Bond Fund seeks current income consistent with preservation of capital, by investing in a broad range of investment grade fixed income securities. The assets of the fund are invested in securities with a maturity of 1 to 3 years. Intermediate Bond Fund: The Intermediate Bond Fund is an income-oriented mutual fund that seeks a high level of current income. The Fund invests primarily in investment grade 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 a limited amount of high quality foreign debt instruments. Balanced Fund: The Balanced Fund is a growth and income mutual fund that seeks the highest amount of income possible while still preserving its capital investment. The Fund invests in a broadly diversified (domestic and foreign) portfolio of high-yielding securities, including common stocks, preferred stocks and bonds. At least 25% of the Balanced Fund's assets are always invested in fixed-income securities. Spartan U.S. Equity Index Fund (formerly U. S. Equity Index Portfolio): The Spartan U.S. Equity Index Fund 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 Fund invests primarily in the common stock of the 500 companies that make up the S&P. Growth & Income Portfolio: The 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 is primarily invested in the securities of companies with the potential for growth of earnings -6- 7 while paying current dividends, as well as securities convertible into common stocks, preferred stocks and fixed income securities. -7- 8 Magellan Fund: The 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 fixed income securities. Contrafund: The Contrafund seeks capital appreciation by investing primarily in undervalued domestic and foreign stocks. These companies may have favorable long-term outlooks due to termination of unprofitable operations, changes in management, industry or products, or possible mergers and acquisitions. A substantial portion of the portfolio is invested in medium- to small-capitalization stocks. Growth Company Fund: The Growth Company Fund focuses on capital appreciation by investing primarily in common stocks with above-average growth characteristics. Investments include both foreign and domestic securities. Growth can be measured by earnings or gross sales. Capital Appreciation Fund: The Capital Appreciation Fund seeks capital appreciation by investing primarily in common stocks of well-known and established companies as well as smaller, lesser-known companies. Investments include domestic and foreign securities. Overseas Fund: The 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 of North America. Currency hedging is permitted. Europe Fund: The Europe Fund seeks long-term capital growth by investing primarily in companies in Western Europe. The Fund may also invest in Eastern Europe. Normally, the Fund intends to maintain investments in at least three different countries, though it may at times invest all of its assets in a single country. A 1% redemption fee will be charged for shares held less than 90 days. Pacific Basin Fund: Pacific Basin Fund seeks long-term growth of capital by investing in companies in the Pacific Basin. The Fund will generally be invested in at least three different countries, although it may at times invest all of its assets in one country. (It normally invests a significant percentage of its assets in Japan.) A 1% redemption fee will be charged for shares held less than 90 days. Fidelity is the Trustee of the Plan assets. Employees may deposit up to 6% of their monthly base pay, subject to IRS limitations, 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 Gas 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, subject to IRS limitations, 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. Such withdrawals are subject to a 10% excise tax. 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 again. The administrative expenses of the Plan are paid by the participating subsidiaries of Columbia. Administrative fees relating to participant loans are borne by the participants. 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 Fund. The value of a Share/Unit is determined daily -8- 9 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, 1996 December 31, 1995 ------------------------------- ------------------------------ Share/Unit Shares/ Share/Unit Shares/ Value Units Value Units ----- ----- ----- ----- ($) ($) Columbia Gas Stock Fund 23.52 13,401,206 16.09 17,657,667 Retirement Money Market Portfolio 1.00 63,338,627 1.00 40,454,700 Magellan Fund 80.65 315,281 85.98 319,397 Contrafund 42.15 348,577 38.02 170,045 Growth Company Fund 40.46 232,610 36.29 102,373 Growth & Income Portfolio 30.73 1,306,237 27.05 978,631 Intermediate Bond Fund 10.08 3,992,437 10.41 4,349,073 Overseas Fund 30.84 261,487 29.07 248,507 Europe Fund 26.61 118,610 22.82 54,789 Pacific Basin Fund 14.70 94,044 15.20 78,664 Balanced Fund 14.08 952,379 13.52 1,048,032 Capital Appreciation Fund 17.64 125,259 16.78 85,955 Short-Term Bond Fund 8.72 395,518 8.88 346,106 Spartan U.S. Equity Index Fund 26.95 2,247,340 22.57 2,278,462
As of December 31, 1996 and 1995, the only individual security held by the Plan in excess of 5% of net assets was Columbia Gas Common Stock, 4,908,371 shares valued at $312,295,105 and 6,426,530 shares valued at $281,964,004, 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. Summary of Significant Accounting Policies (A) Valuation of investments. The assets of the Plan are reflected in the accompanying Statements of Net Assets Available for Benefits based on quoted market prices and per share net asset value. (B) Basis of accounting. The accounts of the Plan have been maintained on a modified cash basis of accounting; however, the accompanying financial statements have been prepared on an accrual basis as of December 31, 1996 and December 31, 1995, by application of memorandum entries to reflect participant deposits, Columbia contributions and participant loans receivable. (C) Net realized gain (loss) on securities sold or distributed. The cost of securities sold or distributed is determined on the revalued cost of assets basis, whereby the cost of assets is adjusted to reflect the market value of assets as of the prior year end. The Plan recognized gains and losses on the sale of securities and the distribution of Columbia Gas Common Stock to withdrawn participants -9- 10 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, 1996. (D) Unrealized appreciation (depreciation) of investments. Fidelity 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 and market value of assets at December 31, 1996. (E) Financial derivatives. Plan assets are invested through thirteen mutual funds, any of which could from time-to-time utilize financial derivatives. Generally Accepted Accounting Principles require the investment managers of such funds, e.g., Fidelity, to list in their financial statements the amount and purpose of such derivatives. Participants are provided with copies of the mutual funds= financial statements directly from Fidelity on a regular basis and should refer to these for information on this issue. Generally speaking, the investment managers use derivatives to hedge against certain unwanted actions, e.g., interest rate movements and foreign currency changes. 3. Participating Companies The names of the participating companies, as of December 31, 1996 with contributions for the year ended December 31, 1996 are shown below:
Columbia Contributions ------------- Columbia Gas Development Corp.............................. $ 82,827 Columbia Gas Transmission Corp............................. 3,930,057 Columbia Gas of Kentucky, Inc.............................. 305,638 Columbia Gas of Maryland, Inc.............................. 83,520 Columbia Gas of Ohio, Inc.................................. 4,026,449 Columbia Gas of Pennsylvania, Inc.......................... 1,121,628 Columbia Gas System Service Corp........................... 809,015 Columbia Gulf Transmission Company......................... 843,082 Columbia Propane Corp...................................... 16,901 Columbia LNG Corp.......................................... 36,431 Columbia Natural Resources, Inc. .......................... 442,700 Commonwealth Gas Services, Inc............................. 428,234 Commonwealth Propane, Inc.................................. 208,671 TriStar Ventures Corp. .................................... 51,486 Columbia Energy Services . . . . . . ...................... 84,391 Columbia Network Services.................................. 238 ------------ Total.................................................. $ 12,471,268 ============
-10- 11 4. Distributions As of December 31, 1996 and 1995, amounts due to participants who had requested a withdrawal were $4,822,851 and $4,752,385, respectively. 5. Columbia Gas System Securities Litigation Settlement The Columbia Gas Stock Fund's applicable Securities Litigation Settlement ("Settlement") totaled $2,008,983. Upon receipt, the Settlement monies applicable to Plan participants are invested by the Trustee in the Fidelity Retirement Money Market Fund. Under the terms of the Settlement, these monies plus accumulated interest will be allocated pursuant to the Court Order to current and former Plan participants who acquired units of the Columbia Gas Stock Fund between January 19, 1990 and June 18, 1991. The account allocations are currently being processed and the distribution will be made as soon as practicable. An estimate of distributions to withdrawn participants is not available. 6. Confederation Life Guaranteed Investment Contract On August 12, 1994, the Confederation Life Insurance Company Guaranteed Investment Contract ("GIC") held by the Plan was frozen by Canadian and Michigan regulators. In order to provide liquidity to Plan participants who had invested in the Retirement Money Market/GIC Fund, on September 20, 1995, The Columbia Gas System, Inc. (CG) and Columbia Gas Transmission Corporation (TCO) lent the Plan $4,182,650 and $2,416,711, respectively. As of April 30, 1997, $5,670,026 in proceeds from the liquidation of Confederation Life Insurance Company assets had been received by the Trustee. Proceeds totaling $3,572,116 and $2,097,909 were forwarded to CG and TCO, respectively. The second payment occurred on May 31, 1997. Additional payments will occur at the end of July 1997 and on or about every six months thereafter. Under the provisions of the loans, the principal is to be repaid in full to CG and TCO. After the principal is repaid, any excess monies received on account of the Confederation Life GIC will be paid to the Thrift Plan participants who were invested in the Thrift Plan's Money Market/GIC Fund on the date of the Confederation Life default, August 12, 1994. In no event shall the repayments to CG and TCO exceed the principal amount of the notes. 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, dated November 28, 1990, from the Internal Revenue Service in which it ruled that the Plan is in compliance with Sections 401(a) and 401(k) and the Trust is exempt from taxation under Section 501(a) of the Internal Revenue Code (IRC). The Company is of the opinion that the Plan, as amended, meets the IRC requirements and, therefore, continues to be tax-qualified and tax-exempt. 8. Other The accompanying Schedules A and B reflect additional detail by Fund of the Statements of Net Assets Available for Benefits for the years ended December 31, 1996 and December 31, 1995 and Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 1996. -11- 12 Schedule A (Page 1 of 2) EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------- Assets - ------------------------------------------------------------------------------------------------------------------------------- Employer Contributions Participant Deposits 12/31/96 Market Value Receivable Receivable Investments Total Net Assets - ------------------------------------------------------------------------------------------------------------------------------- Columbia Gas Stock Fund $ 315,163,036 $ 948,474 $ 496,446 $ 316,607,956 Fidelity Mutual Funds: Retirement Money Market 63,338,627 16,774 213,506 63,568,907 Portfolio Magellan Fund 25,427,413 4,219 195,995 25,627,627 Contrafund 14,692,522 5,429 101,277 14,799,228 Growth Company Fund 9,411,407 3,599 61,103 9,476,109 Growth & Income Portfolio 40,140,670 11,540 210,171 40,362,381 Intermediate Bond Fund 40,243,765 4,403 152,262 40,400,430 Overseas Fund 8,064,260 2,656 48,998 8,115,914 Europe Fund 3,156,219 1,075 16,517 3,173,811 Pacific Basin Fund 1,382,440 295 9,982 1,392,717 Balanced Fund 13,409,495 4,294 74,980 13,488,769 Capital Appreciation Fund 2,209,569 381 13,176 2,223,126 Short-Term Bond Fund 3,448,915 383 21,666 3,470,964 Spartan U.S. Equity Index Fund 60,565,817 6,358 203,921 60,776,096 Columbia Gas Litigation Settlement (note 5) 2,008,983 - - 2,008,983 Loans to Participants 7,228,579 - - 7,228,579
-12- 13
- ------------------------------------------------------------------------------------------------------------------------------- Assets - ------------------------------------------------------------------------------------------------------------------------------- Employer Contributions Participant Deposits 12/31/96 Market Value Receivable Receivable Investments Total Net Assets - ------------------------------------------------------------------------------------------------------------------------------- TOTAL $ 609,891,717 $ 1,009,880 $ 1,820,000 $ 612,721,597
Schedule A (Page 2 of 2) EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1995
- --------------------------------------------------------------------------------------------------------------------------------- Assets - --------------------------------------------------------------------------------------------------------------------------------- 12/31/95 Employer Participants Deposits Investments Market Value Contributions Receivable Total Total Net Assets Receivable - --------------------------------------------------------------------------------------------------------------------------------- Columbia Stock Fund $ 284,031,754 $ 966,295 $ 597,463 $285,595,512 $ 285,595,512 Fidelity Mutual Funds: Retirement Money Market Portfolio 40,454,700 11,346 181,437 40,647,483 40,647,483 Magellan Fund 27,461,720 6,420 222,420 27,690,560 27,690,560 Contrafund 6,465,118 2,499 49,607 6,517,224 6,517,224 Growth Company Fund 3,715,110 1,758 29,781 3,746,649 3,746,649 Growth & Income Portfolio 26,471,961 9,135 164,149 26,645,245 26,645,245 Intermediate Bond Fund 45,273,849 7,612 187,588 45,469,049 45,469,049 Overseas Fund 7,224,105 3,960 51,449 7,279,514 7,279,514
-13- 14
- --------------------------------------------------------------------------------------------------------------------------------- Assets - --------------------------------------------------------------------------------------------------------------------------------- Europe Fund 1,250,274 83 7,839 1,258,196 1,258,196 Pacific Basin Fund 1,195,685 417 12,380 1,208,482 1,208,482 Balanced Fund 14,169,385 5,954 87,780 14,263,119 14,263,119 Capital Appreciation Fund 1,442,322 413 10,320 1,453,055 1,453,055 Short-Term Bond Fund 3,073,421 657 22,188 3,096,266 3,096,266 U.S. Equity Index Portfolio 51,424,890 6,618 191,873 51,623,381 51,623,381 TOTAL $513,654,294 $1,023,167 $1,816,274 $516,493,735 $ 516,493,735
Schedule B (Page 1 of 2) EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------------------------------------------------------- COLUMBIA RETIREMENT GROWTH TOTAL STOCK FUND MONEY MARKET MAGELLAN CONTRAFUND COMPANY - --------------------------------------------------------------------------------------------------------------------------------- Net Assets, Beginning of Year $ 516,493,735 $ 285,595,512 $ 40,647,483 $ 27,690,560 $ 6,517,224 $ 3,746,649 Net Investment Income 19,581,815 3,560,529 2,508,801 4,231,472 961,367 396,533 Net Realized Gain/(Loss) on Securities Sold or Distributed 60,969,843 59,628,789 -- (1,192,650) 208,173 278,867 Net Change Unrealized Appreciation/(Depreciation) of Investments 63,838,899 50,978,979 -- (174,599) 958,054 275,544 Participants' Deposits 23,564,909 6,787,242 2,561,176 2,777,262 1,098,103 668,312
- ------------------------------------------------------------------- GROWTH & INTERMEDIATE INCOME BOND - ------------------------------------------------------------------- Net Assets, Beginning of Year $ 26,645,245 $ 45,469,049 Net Investment Income 1,847,170 2,842,404 Net Realized Gain/(Loss) on Securities Sold or Distributed 971,953 (461,668) Net Change Unrealized Appreciation/(Depreciation) of Investments 3,275,263 (991,640) Participants' Deposits 2,531,250 2,059,553
-14- 15 Columbia Contributions 12,471,268 11,778,183 149,041 62,744 49,525 36,393 Distributions to (86,419,955) (38,744,808) (20,829,342) (3,329,973) (893,295) (701,311) Participants Interfund Exchanges -- (59,459,612) 39,468,872 (3,886,777) 5,970,649 4,796,467 Columbia Gas Litigation -- Settlement (Note 5) 2,008,983 -- -- -- -- -- Loan Activity 212,100 (3,516,858) (937,124) (550,412) (70,572) (21,345) Net Assets, End of Year $ 612,721,597 $ 316,607,956 $ 63,568,907 $ 25,627,627 $ 14,799,228 $ 9,476,109
Columbia Contributions 131,517 67,449 Distributions to (4,994,119) (6,026,809) Participants Interfund Exchanges 10,433,174 (2,069,279) Columbia Gas Litigation Settlement (Note 5) -- Loan Activity (479,072) (488,629) Net Assets, End of Year $ 40,362,381 $ 40,400,430
-15- 16 Schedule B (Page 2 of 2) EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996
- ---------------------------------------------------------------------------------------------------------------------- CAPITAL SHORT-TERM OVERSEAS EUROPE PACIFIC BASIN BALANCED APPRECIATION BOND - ---------------------------------------------------------------------------------------------------------------------- Net Assets, Beginning of $7,279,514 $1,258,196 $1,208,482 $14,263,119 $1,453,055 $3,096,266 Year Net Investment Income 487,418 209,310 7,710 605,374 191,712 182,425 Net Realized Gain/(Loss) on Securities Sold or 313,822 93,652 9,900 (73,121) 69,155 (27,513) Distributed Net Change Unrealized Appreciation/(Depreciation) 149,289 191,439 (63,489) 552,134 1,148 (24,491) of Investments Participants' 695,806 152,960 155,913 1,026,701 247,829 274,477 Deposits Columbia 34,187 6,022 3,667 57,546 6,628 6,558 Contributions Distributions to (1,520,361) (235,460) (111,909) (1,853,497) (370,064) (563,582) Participants Interfund Exchanges 733,120 1,509,822 190,461 (844,189) 634,283 600,735 Columbia Gas Litigation -- -- -- -- -- -- Settlement (Note 5) Loan Activity (56,881) (12,130) (8,018) (245,298) (10,620) (73,911) Net Assets, End of $8,115,914 $3,173,811 $1,392,717 $13,488,769 $2,223,126 $3,470,964 Year
- ------------------------------------------------------------------------------------- SPARTAN COLUMBIA U.S. EQUITY GAS LOAN INDEX LITIGATION ACTIVITY - ------------------------------------------------------------------------------------- Net Assets, Beginning of $51,623,381 $ Year -- -- Net Investment Income 1,549,590 -- -- Net Realized Gain/(Loss) on Securities Sold or 1,150,484 -- -- Distributed Net Change Unrealized Appreciation/(Depreciation) 8,711,268 -- -- of Investments Participants' 2,528,325 -- -- Deposits Columbia 81,808 -- -- Contributions Distributions to (6,245,425) -- -- Participants Interfund Exchanges 1,922,274 -- -- Columbia Gas Litigation -- 2,008,983 -- Settlement (Note 5) Loan Activity (545,609) -- 7,228,579 Net Assets, End of $60,776,096 $2,008,983 $7,228,579 Year
-16- 17 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, 1996
Identity of Issuer, Borrower, Lessor, or Similar Party* Description of Investment Cost Value - --------------------------------------------------------------------------------------------------------------- Columbia 13,401,206 units of Columbia Gas Stock Fund(1) --(2) $ 315,163,036 Fidelity 63,338,627 shares of Retirement Money Market --(2) 63,338,627 Portfolio Fidelity 315,281 shares of Magellan Fund --(2) 25,427,413 Fidelity 348,577 shares of Contrafund --(2) 14,692,522 Fidelity 232,610 shares of Growth Company Fund --(2) 9,411,407 Fidelity 1,306,237 shares of Growth & Income Portfolio --(2) 40,140,670 Fidelity 3,992,437 shares of Intermediate Bond Fund --(2) 40,243,765 Fidelity 261,487 shares of Overseas Fund --(2) 8,064,260 Fidelity 118,610 shares of Europe Fund --(2) 3,156,219 Fidelity 94,044 shares of Pacific Basin Fund --(2) 1,382,440 Fidelity 952,379 shares of Balanced Fund --(2) 13,409,495 Fidelity 125,259 shares of Capital Appreciation Fund --(2) 2,209,569 Fidelity 395,518 shares of Short-Term Bond Fund --(2) 3,448,915 Fidelity 2,247,340 shares of Spartan U.S. Equity Index Fund --(2) 60,565,817 Participants Loans to Participants 7,228,579 7,228,579 ------------- TOTAL THRIFT PLAN(2) $ 607,882,734
* All parties listed are considered parties-in-interest. (1) Actual shares of The Columbia Gas System, Inc. Common Stock held equals 4,908,371, valued at $312,295,105. (2) Records are maintained by Fidelity on a fair market value basis; therefore, historical cost basis information is unavailable. -17- 18
- ----------------------------------------------------------------------------------------------------------------------------------- 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, 1996 Current Value of Identity Description Purchase Selling Transaction Cost of Asset on Transaction Net Gain of Party of Asset Price Price Expense Asset Date (Loss) -------- --------- ------ ------ ------- ------ ----- ------
No Reportable Transactions NOTE: There were no lease rentals during the year. -18- 19
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, 1996 - ---------------------------------------------------------------------------------------------------------- Identity Description Transaction of Party* of Asset Total Purchases Total Sales Expenses --------- ------------- --------------- ----------- -------- - ---------------------------------------------------------------------------------------------------------- Columbia Columbia Gas Stock Fund $46,543,611 -- - ---------------------------------------------------------------------------------------------------------- Columbia Columbia Gas Stock Fund -- $129,580,293 --- - ---------------------------------------------------------------------------------------------------------- Fidelity Magellan Fund 15,932,705 -- -- - ---------------------------------------------------------------------------------------------------------- Fidelity Magellan Fund -- 16,599,763 -- - ---------------------------------------------------------------------------------------------------------- Fidelity Intermediate Bond Fund 11,089,586 -- -- - ---------------------------------------------------------------------------------------------------------- Fidelity Intermediate Bond Fund -- 14,666,362 -- - ---------------------------------------------------------------------------------------------------------- Fidelity Retirement Money Market Fund 84,500,690 -- -- - ---------------------------------------------------------------------------------------------------------- Fidelity Retirement Money Market fund -- 61,616,763 -- - ---------------------------------------------------------------------------------------------------------- Fidelity Spartan U.S. Equity Index 12,976,766 -- -- Fund - ---------------------------------------------------------------------------------------------------------- Fidelity Spartan U.S. Equity Index Fund -- 13,697,592 -- - ---------------------------------------------------------------------------------------------------------- Fidelity Growth & Income Fund 26,350,000 -- -- - ---------------------------------------------------------------------------------------------------------- Fidelity Growth & Income Fund 16,928,507 -- - ----------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------- Current Value of Identity Asset on of Party* Cost of Asset Transaction Date Net Gain or Loss --------- ------------- ---------------- ---------------- - --------------------------------------------------------------------------- Columbia $46,543,611 $46,543,611 -- - --------------------------------------------------------------------------- Columbia (1) $129,580,293 $45,624,581 - --------------------------------------------------------------------------- Fidelity 15,932,705 15,932,705 -- - --------------------------------------------------------------------------- Fidelity (1) 16,599,763 698,390 - --------------------------------------------------------------------------- Fidelity 11,089,586 11,089,586 -- - --------------------------------------------------------------------------- Fidelity (1) 14,666,362 (316,061) - --------------------------------------------------------------------------- Fidelity 84,500,690 84,500,690 -- - --------------------------------------------------------------------------- Fidelity (1) 61,616,763 0 - --------------------------------------------------------------------------- Fidelity 12,976,766 12,976,766 -- - --------------------------------------------------------------------------- Fidelity (1) 13,697,592 3,360,733 - --------------------------------------------------------------------------- Fidelity 26,350,000 26,350,000 -- - --------------------------------------------------------------------------- Fidelity (1) 16,928,507 1,613,311 - ---------------------------------------------------------------------------
* All parties listed are considered parties-in-interest. (1) Records are maintained by Fidelity; historical cost information unavailable. Note: There were no lease rentals during the year. 20 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K, into the Company's previously filed Form S-8 Registration Statement File No. 33-42776. ARTHUR ANDERSEN LLP New York, New York June 4, 1997 21 FEDERAL TAX CONSEQUENCES (Unaudited) NOTE: THE INFORMATION PROVIDED HEREIN IS INTENDED TO PROVIDE GENERAL INFORMATION REGARDING THE FEDERAL TAX TREATMENT OF AN INDIVIDUAL'S WITHDRAWALS OF FUNDS FROM THE PLAN. THE INFORMATION IS BASED ON CURRENT INTERNAL REVENUE CODE PROVISIONS AND REGULATIONS IN EFFECT AS OF 1/1/97 AND DOES NOT ADDRESS ANY STATE AND LOCAL TAX CONSEQUENCES OF PLAN WITHDRAWALS. PARTICIPANTS ARE URGED TO CONSULT WITH THEIR PERSONAL TAX ADVISOR BEFORE MAKING PLAN WITHDRAWALS. Tax Treatment of Distributions and Withdrawals If a participant withdraws money from the Plan, some or all of the participant's withdrawal may be taxed. To the extent that any taxable money is sent directly to the participant, the Trustee is required to withhold 20% of the taxable amount to meet Federal tax requirements. A participant can avoid the 20% Federal withholding requirement by requesting a direct rollover of all or part of the taxable portion of the participant's withdrawal and distribution to an Individual Retirement Account (IRA) or to another tax-qualified plan. In addition to ordinary income taxes, a 10% additional income tax may be imposed on the taxable portion of a participant's distribution unless: - - the participant is age 55 or older in the year he or she terminates employment with Columbia, - - the participant is age 59-1/2 or over when he or she receives the distribution, - - the withdrawal is due to disability or death, - - the withdrawal is used to pay unreimbursed medical expenses, - - payment is made to an alternate payee under a QDRO, or - - the withdrawal is rolled over directly to an Individual Retirement Account (IRA) or another qualified plan. Tax Treatment of Withdrawals The following withdrawals are 100% taxable, even for hardship: - - Company contributions and their earnings, - - a participant's savings in a before-tax account and their earnings, - - earnings on a participant's Rollover Contributions, lump sum and after-tax deposits, and - - a participant's Rollover Contribution deposits. 22 All of a participant's after-tax deposits made to the Plan before January 1, 1987 can be withdrawn during active employment for any reason with no taxes applied to the withdrawal. A participant's after-tax deposits made to the Plan after December 31, 1986 can also be withdrawn for any reason, but such withdrawals are tax free. Once a participant has withdrawn all pre-1987 after-tax contributions, a portion of each subsequent withdrawal from the participant's after-tax account will be considered investment earnings, and will be taxable. The amount of your withdrawal that is considered a return of the participant's after-tax savings, and consequently non-taxable, will be determined as follows: Total remaining savings before a participant's withdrawal in his or her after-tax account contributed after December 31, 1986 divided by total remaining savings in his or her after-tax account contributed after December 31, 1986, plus his or her investment earnings multiplied by the total amount of the withdrawal equals non-taxable portion of the participant's withdrawal.
For example: - - If savings in a participant's after-tax account contributed after 12/31/86 equals $3,000 - - And the investment earnings since 12/31/86 equals $1,000 - - The total of the after-tax savings contributed after 12/31/86 plus investment earnings equals $4,000 - - And the withdrawal equals $1,000 - - 3/4 of the withdrawal will not be taxable ($3,000) divided by $4,000); 1/4 of the withdrawal will be taxable - - Non-taxable amount equals $ 750 - - Taxable amount equals $ 250
In other words, in the above example, if a participant withdraws $1,000 from his or her after-tax account that he or she contributed to the Plan after December 31, 1986, $750 would not be taxable; $250 would be considered by the IRS to be a return of investment earnings and subject to regular income tax, the 20% withholding requirement and possibly the 10% additional tax. Tax Treatment of Withdrawals From a Participant's Before-Tax Account A participant's before-tax contributions are not taxed when they go into his or her account, rather they are fully taxed when withdrawn. If a participant withdraws money from his or her 23 account during active employment, the money will be added to his or her other income for that year and taxed at the participant's applicable income tax rate. Withdrawals during active employment may also be subject to a 10% additional tax over and above any regular income taxes due, unless a participant meets any of the conditions previously listed under Tax Treatment of Distributions and Withdrawals. Loans from a participant's before-tax account are not taxable. If the withdrawal is payable to a participant, the withholding requirements discussed previously apply. A participant can avoid the Federal withholding requirement by requesting a direct transfer rollover to an IRA or another tax qualified plan. Possible Tax Advantages When Receiving a Lump Sum Distribution If a participant receives a lump sum distribution of his or her account, he or she may be able to defer or reduce their tax liability. In general, a participant can use only one of the following tax advantages: 1. Deferral of tax liability If a participant leaves the Company and receives a withdrawal from his or her account, he or she may want to consider rolling all or part of the taxable amount into an IRA or into another employer=s tax qualified plan. By doing so, the participant can continue to defer paying taxes on the money. If the account would otherwise be subject to the 10% additional tax, this approach would let the participant avoid paying this additional tax if he or she leaves their money in the IRA or other plan until they are age 59-1/2 2. Reduction of tax liability If a participant takes a lump sum distribution of his or her account, he or she may be entitled to special tax treatment such as five-year or ten-year averaging or long-term capital gains treatment. If the participant was younger than 50 years old on January 1, 1986, five-year averaging tax treatment is currently available only once, and only if: - - the entire account balance is paid to the participant in one tax year after age 59-1/2, and - - the individual was a Plan participant for five or more years. Under five-year averaging, the lump sum distribution is taxed in one year as if the participant had received it over five years and as if he or she had no other income during that time. The tax rate used is the one effective during the year the participant receives the distribution. 24 If a participant was age 50 or over as of January 1,1986, he or she is grandfathered under pre-1987 tax laws. This means that if the participant receives the entire balance of his or her account in one tax year, he or she will have a choice of: - - ten-year averaging under 1986 tax rates, or - - five-year averaging under the rates prevailing in the year he or she receives the money. If a participant is grandfathered, he or she can use five-year or ten-year averaging at any time, but whichever method he or she chooses can only be used once. The participant can choose whichever method is best for him or her. However, to use either averaging method, he or she must have been a Plan participant for five or more years. 25 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 By /s/ M. W. O'Donnell ---------------------------------------- M. W. O'Donnell Member, Thrift Plan Committee June 30, 1997 -----END PRIVACY-ENHANCED MESSAGE-----