Consolidated Natural Gas 10-K/A 2001 FY Annual report (amended)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Mark One)

x  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

           For the fiscal year ended December 31, 2001

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

           For the transition period from                        to                       

Commission File Number 1-3196

CONSOLIDATED NATURAL GAS COMPANY

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction
of incorporation or organization) 54-1966737 (I.R.S. Employer
Identification Number)

120 Tredegar Street Richmond, Virginia (Address of principal executive offices) 23219 (Zip Code)

(804) 819-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
7 1/4% Notes due 2004	New York Stock Exchange
6.0% Debentures due 2010	New York Stock Exchange
6.8% Debentures due 2027	New York Stock Exchange
6 5/8% Debentures due 2008	New York Stock Exchange
6 7/8% Debentures due 2026	New York Stock Exchange
7 3/8% Debentures due 2005	New York Stock Exchange
6 5/8% Debentures due 2013	New York Stock Exchange
5 3/4% Debentures due 2003	New York Stock Exchange
7.8% Trust Preferred Securities, (cumulative) $25 par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

The aggregate market value of the voting stock held by non-affiliates of the registrant as of March 1, 2002, was zero.

As of March 1, 2002 there were issued and outstanding 100 shares of the registrant’s common stock, without par value, all of which were held, beneficially and of record, by Dominion Resources, Inc.

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I.(1)(a) AND (b) OF FORM 10-K AND IS FILING THIS FORM 10-K UNDER THE REDUCED DISCLOSURE FORMAT.

Explanatory Note

Consolidated Natural Gas Company’s (CNG) Form 10-K for the year ended December 31, 2001 has been amended due to the inadvertent omission of the last six pages (pages 81 through 86) of its filing with the Securities and Exchange Commission via EDGAR. These pages were not omitted from electronic or paper copies posted or distributed by the company to its investors, bankers, and any others who have requested it. CNG is refiling Part IV in its entirety and the Form 10-K signature page.

2

PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)   The following documents are filed as part of this Form 10-K:

1. Financial Statements

See Index on page 29.

2. Financial Statement Schedules

	Page
Independent Auditors’ Report on Financial Statement Schedules	79
Schedule I—Condensed Financial Information of Registrant	80
Schedule II—Valuation and Qualifying Accounts	85

All other schedules are omitted because they are not applicable, or the required information is shown in the financial statements or the related notes.

3. Exhibits

SEC Exhibit Number	Description of Exhibit
2.1	Amended and Restated Agreement and Plan of Merger, dated as of May 11, 1999, by and between Dominion Resources, Inc. and Consolidated Natural Gas Company, (Exhibit 2, Form 8-K, dated May 20, 1999, File No. 1-3196, incorporated by reference).
2.2	Joinder Agreement dated as of January 21, 2000 by and among Dominion Resources, Inc., Consolidated Natural Gas Company, DRI New Sub I, Inc. and DRI New Sub II, Inc. (Exhibit (2A)(i) to Form 10-K for the fiscal year ended December 31, 2000, File No. 1-3196, incorporated by reference).
3.1	Certificate of Incorporation of Consolidated Natural Gas Company (Exhibit (3A)(i) to Form 10-K for the fiscal year ended December 31, 1999, File No. 1-3196, incorporated by reference).
3.2	Certificate of Amendment of Certificate of Incorporation, dated January 28, 2000 (Exhibit (3A)(ii) to Form 10-K for the fiscal year ended December 31, 1999, File No. 1-3196, incorporated by reference).
3.2	Bylaws as in effect on December 15, 2000 (Exhibit 3B to Form 10-K for the fiscal year ended December 31, 2000, File No. 1-3196, incorporated by reference).
4.1	Indenture, dated as of May 1, 1971, between Consolidated Natural Gas Company and JP Morgan Chase Bank (formerly The Chase Manhattan Bank and Manufacturers Hanover Trust Company) (Exhibit (5) to Certificate of Notification at Commission File No. 70-5012, incorporated by reference); Fifteenth Supplemental Indenture dated as of October 1, 1989 (Exhibit (5) to Certificate of Notification at Commission File No. 70-7651, incorporated by reference); Seventeenth Supplemental Indenture dated as of August 1, 1993 (Exhibit (4) to Certificate of Notification at Commission File No. 70-8167, incorporated by reference); Eighteenth Supplemental Indenture dated as of December 1, 1993 (Exhibit (4) to Certificate of Notification at Commission File No. 70-8167, incorporated by reference); Nineteenth Supplemental Indenture dated as of January 28, 2000 (Exhibit (4A)(iii), Form 10-K for the fiscal year ended December 31, 1999, File No. 1-3196, incorporated by reference); Twentieth Supplemental Indenture dated as of March 19, 2001 (Exhibit 4(viii), Form 10-K for the fiscal year ended December 31, 2000, File No. 1-8489, incorporated by reference).

76

SEC Exhibit Number	Description of Exhibit
4.2	Indenture, dated as of April 1, 1995, between Consolidated Natural Gas Company and The Bank of New York (as successor trustee to United States Trust Company of New York) (Exhibit (4) to Certificate of Notification at Commission File No. 70-8107); First Supplemental Indenture dated January 28, 2000 (Exhibit (4 A)(ii), Form 10-K for the fiscal year ended December 31, 1999, File No. 1-3196, incorporated by reference); Securities Resolution No. 1 effective as of April 12, 1995 (Exhibit 2 to Form 8-A filed April 21, 1995 under File No. 1-3196 and relating to the 7 3/8% Debentures Due April 1, 2005); Securities Resolution No. 2 effective as of October 16, 1996 (Exhibit 2 to Form 8-A filed October 18, 1996 under file No. 1-3196 and relating to the 6 7/8% Debentures Due October 15, 2026); Securities Resolution No. 3 effective as of December 10, 1996 (Exhibit 2 to Form 8-A filed December 12, 1996 under file No. 1-3196 and relating to the 6 5/8% Debentures Due December 1, 2008); Securities Resolution No. 4 effective as of December 9, 1997 (Exhibit 2 to Form 8-A filed December 12, 1997 under file No. 1-3196 and relating to the 6.80% Debentures Due December 15, 2027); Securities Resolution No. 5 effective as of October 20, 1998 (Exhibit 2 to Form 8-A filed October 22, 1998 under file No. 1-3196 and relating to the 6% Debentures Due October 15, 2010); Securities Resolution No. 6 effective as of September 21, 1999 (Exhibit 4A(iv), Form 10-K for the fiscal year ended December 31, 1999, File No. 1-3196, and relating to the 7 1/4% Notes Due October 1, 2004).
4.3	Indenture, dated April 1, 2001, between Consolidated Natural Gas Company and Bank One Trust Company, National Association (Exhibit 4.1, Form S-3 File No. 333-52602, as filed on December 22, 2000, incorporated by reference); as supplemented by the Form of First Supplemental Indenture, dated April 1, 2001 (Exhibit 4.2, Form 8-K, File dated April 12, 2001, File No. 1-3196 incorporated by reference); Second Supplemental Indenture, dated October 25, 2001 (Exhibit 4.1, Form 8-K, dated October 23, 2001, File No. 1-3196, incorporated by reference); Third Supplemental Indenture, dated October 25, 2001 (Exhibit 4.3, Form 8-K, dated October 23, 2001, File No. 1-3196, incorporated by reference).
4.4	Form of Indenture for Junior Subordinated Debentures, dated October 1, 2001, between Consolidated Natural Gas Company and Bank One Trust Company, National Association (Exhibit 4.2, Form S-3 Registration No. 333-52602, as filed on December 22, 2000, incorporated by reference); as supplemented by the First Supplemental Indenture, dated October 23, 2001 (Exhibit 4.7, Form 8-K, dated October 16, 2001, File No. 1-3196, incorporated by reference).
4.5	Indenture, dated as of June 15, 1994, between Louis Dreyfus Natural Gas Corp., Dominion Oklahoma Texas Exploration and Production, Inc. and The Bank of New York (as successor trustee to Bank of Montreal Trust Company) (filed herewith); as supplemented by the First Supplemental Indenture, dated as of November 1, 2001(Exhibit 4.7, Form 10-Q for the quarter ended September 30, 2001, incorporated by reference).
4.6	Indenture, dated as of December 11, 1997, between Louis Dreyfus Natural Gas Corp., Dominion Oklahoma Texas Exploration & Production, Inc., and La Salle Bank National Association (formerly, LaSalle National Bank) (filed herewith); as supplemented by the First Supplemental Indenture, dated as of November 1, 2001 (Exhibit 4.9, Form 10-Q for the quarter ended September 30, 2001, incorporated by reference).
23	Consent of Ralph E. Davis Associates, Inc. (filed herewith).

77

(b) Reports on Form 8-K:

1.  The Company filed a report on Form 8-K, dated November 14, 2001, relating to the acquisition of Louis Dreyfus.

2.  The Company filed a report on Form 8-K/A, dated January 11, 2002, relating to required financial statement disclosures for the Louis Dreyfus acquisition.

3.  The Company filed a report on Form 8-K, dated January 29, 2002, relating to Dominion’s press release announcing unaudited results of operations for the fiscal year ended December 31, 2001.

78

INDEPENDENT AUDITORS’ REPORT

To Board of Directors of

Consolidated Natural Gas Company

Richmond, Virginia

We have audited the consolidated financial statements of Consolidated Natural Gas Company (a wholly owned subsidiary of Dominion Resources, Inc.) and subsidiaries (the “Company”) as of December 31, 2001 and 2000, and for each of the two years in the period ended December 31, 2001, and have issued our report thereon dated January 22, 2002; such report is included elsewhere in the Form 10-K. Our audits also included the consolidated financial statement schedules of the Company as of December 31, 2001 and 2000 and for each of the two years in the period ended December 31, 2001, listed in Item 14. These consolidated financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.

/s/ DELOITTE & TOUCHE LLP

Pittsburgh, Pennsylvania

January 22, 2002

79

CONSOLIDATED NATURAL GAS COMPANY

SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF INCOME

	Year Ended December 31,
	2001			2000			1999
	(Millions)
Operating revenue	$	—		$	—		$	—
Operating expenses		(3	)		62			55
Income from operations		3			(62	)		(55	)
Other income		156			314			118
Interest and related charges		168			174			137
Income (loss) before income taxes		(9	)		78			(74	)
Income taxes		(11	)		46			(21	)
Equity in undistributed earnings of subsidiaries		389			212			190
Net income	$	391		$	244		$	137

The accompanying notes are an integral part of the Condensed Financial Statements.

80

CONSOLIDATED NATURAL GAS COMPANY

SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED BALANCE SHEETS

	At December 31,
	2001		2000
	(Millions)
ASSETS
Current Assets
Cash and cash equivalents	$	—	$	—
Accounts receivable — other		6		5
Receivables from affiliates		38		25
Advances from affiliates		969		967
Derivative assets		13		—
Prepayments		53		15
Total current assets		1,079		1,012
Investments		6,088		3,941
Deferred Charges and Other Assets
Derivative assets		26		—
Deferred income taxes		6		7
Other		24		5
Total deferred charges and other assets		56		12
Total assets	$	7,223	$	4,965
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Short-term debt	$	776	$	1,215
Payables to affiliates		57		2
Accrued interest		38		23
Accrued taxes		—		18
Other		1		3
Total current liabilities		872		1,261
Long-Term Debt		3,130		1,721
Notes Payable toSubsidiary Trust		206		—
Deferred Credits and Other Liabilities		15		17
Total liabilities		4,223		2,999
Common Shareholder’s Equity
Common stock, no par value		1,816		1,816
Other paid-in capital		936		40
Accumulated other comprehensive income (loss)		82		(1	)
Retained earnings		166		111
Total common shareholder’s equity		3,000		1,966
Total liabilities and shareholder’s equity	$	7,223	$	4,965

The accompanying notes are an integral part of the Condensed Financial Statements.

81

CONSOLIDATED NATURAL GAS COMPANY

SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2001			2000			1999
	(Millions)
Net Cash Flows From Operating Activities	$	294		$	16		$	205
Cash Flows From (Used In) Investing Activities
Money pool investments, net		(1	)		(361	)		(51	)
Acquisition of subsidiaries’ capital stock		(6	)		(3	)		(119	)
Repayment of long-term debt by subsidiaries		15			38			119
Long-term debt financing of subsidiaries		—			—			(391	)
Acquisition of DOTEPI, net of cash		(903	)		—			—
Sale of VNG		—			532			—
Other		—			—			(1	)
Net cash from (used in) investing activities		(895	)		206			(443	)
Cash Flows From (Used In) Financing Activities
Issuance of long-term debt		1,439			—			397
Repayment of long-term debt		(270	)		(45	)		(121	)
Issuance (repayment) of short-term debt, net		(435	)		527			126
Dividends paid		(336	)		(704	)		(186	)
Notes payable to affiliated companies		206			—			—
Other		(3	)		—			21
Net cash from (used in) financing activities		601			(222	)		237
Decrease in cash and cash equivalents		—			—			(1	)
Cash and cash equivalents at beginning of period		—			—			1
Cash and cash equivalents at end of period	$	—		$	—		$	—

The accompanying notes are an integral part of the Condensed Financial Statements.

82

CONSOLIDATED NATURAL GAS COMPANY

SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1.    Basis of Presentation

Pursuant to rules and regulations of the Securities and Exchange Commission (SEC), the unconsolidated condensed financial statements of Consolidated Natural Gas Company (the Company) do not reflect all of the information and notes normally included with financial statements prepared in accordance with generally accepted accounting principles. Therefore these financial statements should be read in conjunction with the consolidated financial statements and related notes included in the fiscal 2001 Form 10-K, Part II, Item 8.

Accounting for subsidiaries—The Company has accounted for the earnings of its subsidiaries under the equity method in the unconsolidated condensed financial statements.

Income Taxes—The unconsolidated income tax expense or benefit computed for the Company in accordance with Statement of Financial Accounting Standards No. 109,Accounting for Income Taxes, reflects the tax assets and liabilities of the Company on a stand alone basis and the effect of filing a consolidated U.S. tax return with its subsidiaries.

Note 2.    Long-Term Debt

	At December 31,
	2001		2000
	(Millions)
Long-Term Debt
Senior Notes:
5.75% to 7.375%, due 2003 to 2005		700		700
5.375%, due 2006		500		—
6.25% to 6.875%, due 2007 to 2011		950		—
8.75%, due 2019(1)		—		84
6.875%, due 2026(2)		150		150
6.0% to 6.8%, due 2008 to 2027		800		800
		3,100		1,734
Unamortized discount and premium, net		30		(13	)
Total long-term debt	$	3,130	$	1,721

⁽¹⁾ The Company redeemed the remaining $84 million Senior Notes in the first quarter of 2001.

⁽²⁾ At the exercised option of holders, the Company will be required on October 15, 2006 to purchase the Senior Notes due October 15, 2026 at 100% of the principal amount plus accrued interest.

The Company’s scheduled principal payments of long-term debt at December 31, 2001 are as follows (in millions):

2002	2003	2004	2005	2006	Thereafter	Total
$ —	$150	$400	$150	$500	$1,900	$3,100

83

CONSOLIDATED NATURAL GAS COMPANY

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT

NOTES TO CONDENSED FINANCIAL STATEMENTS—(Continued)

Note 3.     Guarantees

The Company has guaranteed the performance of its subsidiaries under certain commodity and other contracts and the long-term debt of one of its wholly owned subsidiaries. At December 31, 2001, such guarantees totaled $854 million and $294 million, respectively.

Note 4.     Dividends received from consolidated subsidiaries

The Company received dividends from its consolidated subsidiaries in the amounts of $338 million, $188 million and $243 million for the years 2001, 2000, and 1999, respectively.

The 1935 Act prohibits registered holding companies and their subsidiaries from paying dividends out of capital or unearned surplus except when they have received specific SEC authorization. In January 2002, the Company filed an application with the SEC for relief from the restriction on paying dividends out of unearned surplus of DOTEPI, the subsidiary into which Louis Dreyfus was merged. The request was for relief up to an amount equal to Louis Dreyfus’ retained earnings before the merger.

84

CONSOLIDATED NATURAL GAS COMPANY

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Column A		Column B		Column C						Column D			Column E
Description		Balance at Beginning of Period		Additions						Deductions			Balance at End of Period
				Charged to Expense			Charge to Other Accounts
							(Millions)
Valuation and qualifying accounts which are deducted in the balance sheet from the assets to which the apply:
Allowance for doubtful accounts-customers	1999	$	23	$	26		$	3		$	31	(a)	$	21
	2000		21		55			(1	)		24	(a)		51
	2001		51		35			—			34	(a)		52
Reserves:
Discontinued operations	1999		9		—			—			7	(b)		2
	2000		2		(2	)		—			—			—
	2001		—		—			—			—			—
Liability for workforce reductions	1999		10		11			—			12	(c)		9
	2000		9		—			—			6	(c)		3
	2001		3		—			—			3	(c)		—
Liabilities for restructuring and other merger-related costs:
1999 Plan
Severance and related costs	1999		—		5			—			4	(c)		1
	2000		1		—			—			1	(c)		—
	2001		—		—			—			—			—
2000 Plan
Severance and related costs—involuntary	1999		—		—			—			—			—
	2000		—		31			—			18	(c)		13
	2001		13		(2	)(d)		(2	)(e)		8	(c)		1
Severance and related costs—voluntary	1999		—		—			—			—			—
	2000		—		2			—			—			2
	2001		2		—			—			2			—
Lease termination and restructuring	1999		—		—			—			—			—
	2000		—		11			—			5	(c)		6
	2001		6		—			—			5	(c)		1
Other	1999		—		—			—			—			—
	2000		—		6			—			3	(c)		3
	2001		3		—			—			2	(c)		1
2001 Plan
Severance and related costs	1999		—		—			—			—			—
	2000		—		—			—			—			—
	2001		—		13			—			—			13
Lease termination and restructuring	1999		—		—			—			—			—
	2000		—		—			—			—			—
	2001		—		9			—			2			7

^(a) Represents net amounts charged-off as uncollectible.

^(b) Represents operating losses incurred until disposal and liabilities paid.

^(c) Represents payments for workforce reductions and/or restructuring liabilities.

^(d) Represents adjustments reflecting changes in estimates.

^(e) Represents transfer due to merger of the Company’s service company into Dominion’s service company.

85

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CONSOLIDATED NATURAL GAS COMPANY
By:	/s/      THOS. E. CAPPS
	Thos. E. Capps
	Chairman of the Board of Directors, President and Chief
	Executive Officer

Date: March 11 , 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 11^th day of March, 2002.

Name	Position
/s/     THOS. E. CAPPS Thos. E. Capps	Chairman of the Board of Directors, President and Chief Executive Officer
/s/     THOMAS F. FARRELL, II Thomas F. Farrell, II	Executive Vice President and Director
/s/     DUANE C. RADTKE Duane C. Radtke	Executive Vice President and Director
/s/     EDGAR M. ROACH, JR. Edgar M. Roach, Jr.	Executive Vice President and Director
/s/     THOMAS N. CHEWNING Thomas N. Chewning	Executive Vice President and Chief Financial Officer
/s/     STEVEN A. ROGERS Steven A. Rogers	Vice President and Controller (Principal Accounting Officer)

86

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CONSOLIDATED NATURAL GAS COMPANY
By:	/s/    STEVEN A. ROGERS
	Steven A. Rogers
	Vice President and Controller (Principal
	Accounting Officer)

Date: September 10, 2002

CERTIFICATIONS

I, Thos. E. Capps, certify that:

1. I have reviewed this annual report on Form 10-K/A of Consolidated Natural Gas Company;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; and

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

Date:     September 10, 2002

By:	/s/    THOS. E. CAPPS
	Thos. E. Capps
	Chairman of the Board of Directors,
	President and Chief Executive Officer

I, Thomas N. Chewning, certify that:

1. I have reviewed this annual report on Form 10-K/A of Consolidated Natural Gas Company;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; and

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

Date:     September 10, 2002

By:	/s/    THOMAS N. CHEWNING
	Thomas N. Chewning
	Executive Vice President
	and Chief Financial Officer