CONNECTICUT NATURAL GAS CORPORATION
-----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
FINANCIAL STATEMENTS AND SCHEDULES
----------------------------------
AS OF DECEMBER 31, 1995, 1994 AND 1993
--------------------------------------
TOGETHER WITH
--------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
CONNECTICUT NATURAL GAS CORPORATION
-----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
INDEX
-----
PAGE
----
Report of Independent Public Accountants 1
Financial Statements:
Statement of Net Assets Available for Benefits
with Fund Information as of December 31, 1995 2
Statement of Net Assets Available for Benefits
with Fund Information as of December 31, 1994 4
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1995 5
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1994 7
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1993 8
Notes to Financial Statements and Schedules 9
Schedules:
Schedule I - Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1995 14
Schedule II - Item 27d - Schedule of Reportable Transactions for
the Year Ended December 31, 1995 15
All schedules, except those as set forth above, are omitted as not
applicable or not required.
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Plan Administrator of Connecticut Natural
Gas Corporation Employee Savings Plan:
We have audited the accompanying statements of net assets available for
benefits with fund information of Connecticut Natural Gas Corporation
Employee Savings Plan (the Plan) as of December 31, 1995 and 1994, and the
related statements of changes in net assets available for benefits with
fund information for each of the three years in the period ended December
31, 1995. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements 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 with fund
information of the Plan as of December 31, 1995 and 1994, and the changes
in its net assets available for benefits with fund information for each of
the three years in the period ended December 31, 1995, 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 for the year ended
December 31, 1995 and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
By Arthur Andersen LLP
----------------------
Arthur Andersen LLP
Hartford, Connecticut
June 24, 1996
-2-
CONNECTICUT NATURAL GAS CORPORATION
-----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
--------------------------------------------------------------------
AS OF DECEMBER 31, 1995
------------------------
Participant Directed
---------------------------------------------------------------------
The Putnam
Putnam Fiduciary The George Fund for Putnam Putnam
Trust Company Putnam Fund Growth and Vista Overseas
Stable Value Fund of Boston Income Fund Growth Fund
---------------- ------------ ---------- ---------- -----------
Assets
------
Investments, at
current value $ 1,179,925 $ 3,170,234 $ 4,759,631 $ 754,331 $ 227,244
----------- ----------- ----------- ----------- -----------
Cash and temporary
investments - - - - -
----------- ----------- ----------- ----------- -----------
Accounts receivable:
Connecticut
Natural Gas Corp. - - - - -
Employees 3,379 13,332 27,755 11,074 2,432
----------- ----------- ----------- ----------- -----------
3,379 13,332 27,755 11,074 2,432
----------- ----------- ----------- ----------- -----------
Total Assets 1,183,304 3,183,566 4,787,386 765,405 229,676
----------- ----------- ----------- ----------- -----------
Liabilities
-----------
Accounts payable to
broker - - - - -
----------- ----------- ----------- ----------- -----------
Net Assets
Available for
Plan Benefits $ 1,183,304 $ 3,183,566 $ 4,787,386 $ 765,405 $ 229,676
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of this financial statement.
-3-
CONNECTICUT NATURAL GAS CORPORATION
-----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
--------------------------------------------------------------------
AS OF DECEMBER 31, 1995
------------------------
Non-
Participant
Participant Directed Directed
-------------------- -----------
Putnam Common Common
Income Stock Stock
Fund Fund Fund Total
---------- ---------- ---------- --------
Assets
------
Investments, at
current value $ 161,811 $ 2,151,168 $ 7,302,281 $19,706,625
----------- ----------- ----------- -----------
Cash and temporary
investments - 35,959 115,485 151,444
----------- ----------- ----------- -----------
Accounts receivable:
Connecticut
Natural Gas Corp. - - 36,558 36,558
Employees 847 4,430 - 63,249
----------- ----------- ----------- -----------
847 4,430 36,558 99,807
----------- ----------- ----------- -----------
Total Assets 162,658 2,191,557 7,454,324 19,957,876
----------- ----------- ----------- -----------
Liabilities
-----------
Accounts payable to
broker - (35,318) (113,764) (149,082)
----------- ----------- ----------- -----------
Net Assets
Available for
Plan Benefits $ 162,658 $ 2,156,239 $ 7,340,560 $19,808,794
=========== =========== =========== ===========
The accompanying notes are an integral part of this financial statement.
-4-
CONNECTICUT NATURAL GAS CORPORATION
-----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
--------------------------------------------------------------------
AS OF DECEMBER 31, 1994
------------------------
Non-
Participant
Participant Directed Directed
----------------------------------------------------------------------- -----------
The Putnam
Putnam Fiduciary Putnam U.S. The George Fund for Common Common
Trust Company Government Putnam Fund Growth and Stock Stock
Stable Value Fund Income Trust of Boston Income Fund Fund Total
----------------- ------------- ------------ ---------- ---------- ---------- --------
Assets
------
Investments, at
current value $1,145,585 $ 1,072,279 $ 2,475,895 $ 3,277,169 $ 2,728,961 $ 7,292,947 $17,992,836
Cash and temporary
investments - - - - 41,429 111,765 153,194
---------- ----------- ----------- ----------- ----------- ----------- -----------
Accounts receivable:
Connecticut
Natural Gas Corp. - - - - - 41,306 41,306
Employees 3,805 6,091 17,798 35,505 7,996 - 71,195
Other - - - - 1,716 4,734 6,450
---------- ----------- ----------- ------------ ----------- ---------- -----------
3,805 6,091 17,798 35,505 9,712 46,040 118,951
---------- ----------- ----------- ------------ ----------- ---------- -----------
Total Assets 1,149,390 1,078,370 2,493,693 3,312,674 2,780,102 7,450,752 18,264,981
---------- ----------- ----------- ------------ ------------ ---------- -----------
Liabilities
-----------
Accounts payable to
broker - - - - (41,030) (110,597) (151,627)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Net Assets
Available for
Plan Benefits $1,149,390 $ 1,078,370 $ 2,493,693 $ 3,312,674 $ 2,739,072 $ 7,340,155 $18,113,354
========== =========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of this financial statement.
-5-
CONNECTICUT NATURAL GAS CORPORATION
----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
-------------------------------------
Participant Directed
-----------------------------------------------------------------
Putnam
Fiduciary The Putnam
Trust Company Putnam U.S. The George Fund for Putnam
Stable Value Government Putnam Fund Growth and Vista
Fund Income Trust of Boston Income Fund
------------- -------------------------- ----------- ----------
Additions to net assets
attributed to:
Dividends and interest income $ 66,142 $ 79,432 $ 237,487 $ 314,524 $ 38,861
---------- ----------- ----------- ----------- -----------
Realized gains
(losses), net - 563,453 88,744 160,068 672
---------- ----------- ----------- ----------- -----------
Unrealized appreciation
(depreciation) of investments - (485,256) 427,496 777,724 (12,240)
---------- ----------- ----------- ----------- -----------
Contributions:
Employees 56,824 69,103 232,176 450,914 11,074
Employer - - - - -
---------- ----------- ----------- ----------- -----------
Total contributions 56,824 69,103 232,176 450,914 11,074
---------- ----------- ----------- ----------- -----------
Transfers, net 345,106 (1,154,001) (53,943) 51,678 727,678
---------- ----------- ----------- ----------- -----------
Other, net - - - - -
---------- ----------- ----------- ----------- ------------
Total additions (deductions) 468,072 (927,269) 931,960 1,754,908 766,045
---------- ----------- ----------- ----------- -----------
Deductions from net assets
attributed to:
Benefits paid to participants (434,158) (151,101) (242,087) (280,196) (640)
---------- ----------- ----------- ----------- -----------
Net increase (decrease) 33,914 (1,078,370) 689,873 1,474,712 765,405
---------- ----------- ----------- ----------- -----------
Net Assets Available
for Plan Benefits:
Beginning of year 1,149,390 1,078,370 2,493,693 3,312,674 -
---------- ----------- ----------- ----------- -----------
End of year $1,183,304 $ - $ 3,183,566 $ 4,787,386 $ 765,405
========== =========== =========== =========== ===========
The accompanying notes are an integral part of this financial statement.
-6-
CONNECTICUT NATURAL GAS CORPORATION
----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
-------------------------------------
Non-
Participant
Participant Directed Directed
------------------------------------- -----------
Putnam Putnam Common Common
Overseas Income Stock Stock
Growth Fund Fund Fund Fund Total
----------- ----------- ---------- ---------- ----------
Additions to net assets
attributed to:
Dividends and interest income $ 2,076 $ 470 $ 147,466 $ 452,733 $ 1,339,191
----------- ----------- ----------- ----------- -----------
Realized gains
(losses), net 89 278 (31,712) (84,982) 696,610
----------- ----------- ----------- ----------- -----------
Unrealized appreciation
(depreciation) of investments 839 1,111 (97,147) (246,344) 366,183
----------- ----------- ----------- ----------- -----------
Contributions:
Employees 2,432 847 91,652 - 915,022
Employer - - - 482,636 482,636
----------- ----------- ----------- ----------- -----------
Total contributions 2,432 847 91,652 482,636 1,397,658
----------- ----------- ----------- ----------- -----------
Transfers, net 224,270 160,191 (279,647) 10,500 31,832
----------- ----------- ----------- ----------- -----------
Other, net - - 217 582 799
----------- ----------- ------------ ----------- -----------
Total additions (deductions) 229,706 162,897 (169,171) 615,125 3,832,273
----------- ----------- ----------- ----------- -----------
Deductions from net assets
attributed to:
Benefits paid to participants (30) (239) (413,662) (614,720) (2,136,833)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) 229,676 162,658 (582,833) 405 1,695,440
----------- ----------- ----------- ----------- -----------
Net Assets Available
for Plan Benefits:
Beginning of year - - 2,739,072 7,340,155 18,113,354
----------- ----------- ----------- ----------- -----------
End of year $ 229,676 $ 162,658 $ 2,156,239 $ 7,340,560 $19,808,794
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of this financial statement.
-7-
CONNECTICUT NATURAL GAS CORPORATION
----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1994
-------------------------------------
Non-
Participant
Participant Directed Directed
----------------------------------------------------------------- -----------
Putnam
Fiduciary The Putnam
Trust Company Putnam U.S. The George Fund for Common Common
Stable Value Government Putnam Fund Growth and Stock Stock
Fund Income Trust of Boston Income Fund Fund Total
------------- -------------------------- ----------- ---------- ---------- ----------
Additions to net assets
attributed to:
Dividends and interest income $ 51,801 $ 88,894 $ 162,233 $ 199,825 $ 158,004 $ 427,006 $ 1,087,763
---------- ----------- ----------- ----------- ----------- ----------- -----------
Realized gains
(losses), net - (23,461) (6,864) (66) (20,752) (60,713) (111,856)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Unrealized appreciation
(depreciation) of investments - (98,811) (164,204) (209,645) (634,736) (1,859,543) (2,966,939)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Contributions:
Employees 53,792 91,679 245,201 430,814 123,277 - 944,763
Employer - - - - - 511,479 511,479
---------- ----------- ----------- ----------- ----------- ----------- -----------
Total contributions 53,792 91,679 245,201 430,814 123,277 511,479 1,456,242
---------- ----------- ----------- ----------- ----------- ----------- -----------
Transfers, net 231,403 (408,181) (86,276) 78,854 162,566 (20,510) (42,144)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Other, net - - - - (256) (747) (1,003)
---------- ----------- ----------- ----------- ------------ ----------- -----------
Total additions (deductions) 336,996 (349,880) 150,090 499,782 (211,897) (1,003,028) (577,937)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Deductions from net assets
attributed to:
Benefits paid to participants (15,553) (14,558) (40,954) (18,516) (21,411) (352,839) (463,831)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) 321,443 (364,438) 109,136 481,266 (233,308) (1,355,867) (1,041,768)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Net Assets Available
for Plan Benefits:
Beginning of year 827,947 1,442,808 2,384,557 2,831,408 2,972,380 8,696,022 19,155,122
---------- ----------- ----------- ----------- ----------- ----------- -----------
End of year $1,149,390 $ 1,078,370 $ 2,493,693 $ 3,312,674 $ 2,739,072 $ 7,340,155 $18,113,354
========== =========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of this financial statement.
/TABLE
-8-
CONNECTICUT NATURAL GAS CORPORATION
----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1993
-------------------------------------
Non-
Participant
Participant Directed Directed
----------------------------------------------------------------------- -----------
Putnam
Fiduciary The Putnam
Fixed Trust Company Putnam U.S. The George Fund for Common Common
Income Stable Value Government Putnam Fund Growth and Stock Stock
Fund Fund Income Trust of Boston Income Fund Fund Total
------------------------ ------------------------ ----------- ----------- ----------- ----------
Additions to net assets
attributed to:
Dividends and interest income $ - $ 102,066 $ 71,892 $ 171,272 $ 179,236 $ 145,056 $ 404,265 $ 1,073,787
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Realized gains
(losses), net - - (1,434) (1,161) 1,587 108,447 337,916 445,355
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Unrealized appreciation
(depreciation) of investments - - (31,912) (25,583) 37,148 160,130 456,800 596,583
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Contributions:
Employees - 192,987 74,513 189,661 316,561 136,268 - 909,990
Employer - - - - - - 490,017 490,017
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Total contributions - 192,987 74,513 189,661 316,561 136,268 490,017 1,400,007
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Transfers, net (6,897,892) 602,769 1,435,183 2,186,042 2,431,592 295,129 34,971 87,794
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Other, net 77,736 (1,169) (618) (6,721) (2,440) 14,953 40,590 122,331
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Total additions (deductions) (6,820,156) 896,653 1,547,624 2,513,510 2,963,684 859,983 1,764,559 3,725,857
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Deductions from net assets
attributed to:
Benefits paid to participants - (68,706) (104,816) (128,953) (132,276) (254,463) (443,619) (1,132,833)
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) (6,820,156) 827,947 1,442,808 2,384,557 2,831,408 605,520 1,320,940 2,593,024
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Net Assets Available
for Plan Benefits:
Beginning of year 6,820,156 - - - - 2,366,860 7,375,082 16,562,098
----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
End of year $ - $ 827,947 $ 1,442,808 $ 2,384,557 $ 2,831,408 $ 2,972,380 $ 8,696,022 $19,155,122
=========== ========== =========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of this financial statement.
-9-
CONNECTICUT NATURAL GAS CORPORATION
-----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
-------------------------------------------
1. Description of the Plan:
------------------------
The following description of the Connecticut Natural Gas Corporation Employee
Savings Plan (the Plan) is provided for general information purposes only. More
complete information regarding the Plan's provisions may be found in the Plan
document
a. General -
-------
The Plan is a defined contribution thrift plan open to non-union employees
of Connecticut Natural Gas Corporation and subsidiaries (the Company). The
Plan was established by the Company under the provisions of Section 401(a)
of the Internal Revenue Code (IRC), and it includes a qualified deferred
arrangement as described in Section 401(k) of the IRC for the benefit of
eligible employees of the Company. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA). The Plan
Administrator is the Company. The Compensation Committee of the Company's
Board of Directors appointed an Administrative Committee to serve as manager
of the Plan.
b. Eligibility
-----------
Employees are eligible to participate when the following criteria are met:
(1) Are at least age 21.
(2) Are employed by the Company for one year or more.
(3) Have completed 1,000 hours or more of service in a 12-month
period beginning with date of hire.
(4) Are on the management payroll or are subject to the Salary
Administration Program.
The number of employees participating in the Plan as of December 31, 1995
and 1994 were 287 and 296, respectively.
c. Contributions -
-------------
Eligible employees may elect to participate in the Plan and authorize
payroll deductions of not less than 1% and not greater than 26% of basic
earnings as savings contributions to their accounts during each year,
subject to the limits under Section 415 of the IRC.
The Company will match a percentage of an employee's compensation depending
on age or years of continuous service. The amount of the Company
contribution will be determined according to the schedule below. However,
if an employee's elected savings allotment is less than the percentage
contained in the schedule, the Company will match no more than the
percentage contributed by the employee.
-10-
As of December 31, 1995, if an employee's:
Years of Continuous
Service are Or Age is The Company Will Contribute
-------------------- -- ------ ---------------------------
30 50 6% of compensation
20 45 4-1/2% of compensation
10 35 3% of compensation
Less than l0 Under 35 2% of compensation
d. Investment Options -
------------------
Plan participants direct their contributions among various
investment options investment options in 5% increments, and they may
elect to change their investment options once during each calendar
quarter. A description of each investment option is provided below:
(1) PUTNAM FIDUCIARY TRUST COMPANY STABLE VALUE FUND - This fund
preserves principal and seeks to achieve relatively high current
income through a diversified portfolio of high-quality
investment contracts.
(2) PUTNAM U.S. GOVERNMENT INCOME TRUST - This mutual fund seeks
current income through a portfolio of securities backed by the
full faith and credit of the United States Government.
(3) THE GEORGE PUTNAM FUND OF BOSTON - This mutual fund seeks a
balance of capital growth and current income through a
diversified portfolio of common stocks and bonds.
(4) THE PUTNAM FUND FOR GROWTH AND INCOME - This mutual fund seeks
capital growth and current income through a portfolio of income-
producing common stocks.
(5) PUTNAM VISTA FUND - This mutual fund seeks to invest in a
variety of stocks of mostly medium-sized companies, widely
traded larger companies and, small, less well-known companies
that have the potential for above-average growth.
(6) PUTNAM OVERSEAS GROWTH FUND - This mutual fund seeks
appreciation of investments through a diversified collection of
stocks in companies located outside North America.
(7) PUTNAM INCOME FUND - This mutual fund invests in a variety of
bonds with an emphasis on corporate bonds and selected below-
investment-grade bonds.
(8) COMMON STOCK FUND - This fund seeks to provide current income
and capital appreciation through investment in the common stock
of the Company purchased at not more than fair market value.
The Putnam Income Fund, Putnam Overseas Growth Fund, and Putnam
Vista Fund were added as investment options on December 6, 1995, and
at the same time the Putnam U.S. Government Income Trust was
eliminated as an option. Plan participants were required to move
any money invested in the latter fund to one of the other investment
options by December 22, 1995.
All Company matching contributions are invested in the Common Stock
Fund.
In addition to transfers between the various funds noted above as a
result of investment elections made by Plan participants, transfers
are also made to or from the Union Employee Savings Plan for those
employees who transfer to (from) one of the Company's collective
bargaining units.
-11-
e. Vesting -
-------
Participants are fully vested in their contributions and the
earnings thereon. Participants are vested in the Company matching
contributions and the earnings thereon as follows:
Years of Continuous Service are Percentage Vested
------------------------------- -----------------
Less than 1 0%
1 but less than 2 20
2 but less than 3 40
3 but less than 4 60
4 but less than 5 80
5 or more 100
Participants also become fully vested in their Company matching
contribution account if any one of the following occurs:
(1) Death
(2) Disability
(3) Attainment of age 65 (normal retirement date)
(4) Total or partial termination of the Plan
(5) Discontinuance of Company contributions to the Plan
Upon termination of employment before full vesting, the non-vested
Company match portion of a participant's common stock account shall
be forfeited after five years if the participant is not rehired and
applied as a credit against the employer's future contributions.
f. Benefits -
--------
Upon termination of employment due to retirement, disability, or
death, a participant (or his/her beneficiary) may elect to receive a
lump-sum distribution equal to the value of the participant's vested
interest in his/her account as soon as practicable following the
termination date or defer the distribution to some future date.
Participants may request the withdrawal of certain account balances
prior to termination of employment. Application for withdrawal of
after-tax contributions and employee IRA contributions may be made
once a year. There are no Plan penalties for such withdrawals.
Participant benefits under the Plan are excluded from insurance
coverage of the Pension Benefit Guaranty Corporation.
g. Participant Accounts -
--------------------
Individual accounts are maintained for each of the Plan's
participants to reflect the participant's share of the Plan's income
and the participant's and the Company's contributions. Allocations
of Plan income are based on the share balances in the participants'
accounts.
h. Use of Estimates in the Preparation of Financial Statements -
-----------------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles and the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the
reported amounts of income and expense during the reporting period.
-12-
Actual results could differ from those estimates.
i. Reclassification -
----------------
Certain prior year amounts have been reclassified to conform with the
current year presentation.
2. Transfer of Plan Assets to New Trustee:
--------------------------------------
In January 1993, the Trustee of the Plan was changed from Fleet Bank,
Connecticut (Fleet) to Putnam Fiduciary Trust Company (PFTC). All
assets held in trust by Fleet, consisting of common stock of the Company
and three Hartford Life Insurance Company immediate participation
guarantee contracts, together with associated cash and temporary
investments, were transferred to PFTC and placed in the Common Stock
Fund and the PFTC Stable Value Fund, respectively. The balances of the
immediate participation guarantee contracts and associated cash on
January 1, 1993 are reflected in the "Fixed Income Fund" column on the
accompanying statement of changes in net assets for the year ended
December 31, 1993. In April 1993, transfers of assets from the
participant directed portion of the Common Stock Fund and the PFTC
Stable Value Fund to the existing investment funds described in Note 1
were completed based upon investment elections made by the Plan's
participants.
3. Summary of Significant Accounting Policies:
------------------------------------------
a. Basis of Accounting -
-------------------
The accompanying financial statements are prepared on the accrual
basis of accounting.
b. Income Recognition -
------------------
Dividend income is recorded on the ex-dividend date. Interest
income is recorded as earned on the accrual basis.
c. Investment Valuation -
--------------------
The Plan's investments are reflected at current value. The shares
of the Common Stock Fund and the Putnam mutual funds owned by the
Plan, with the exception of the PFTC Stable Value Fund, are valued
at market as determined by the quoted market price as of the last
business day of the year. The latter fund is valued at cost plus
accumulated earnings. Purchases and sales of securities are
reflected on a trade date basis. Beginning in 1994, realized and
unrealized appreciation/depreciation presented in the statement of
changes in net assets available for benefits with fund information
are computed based on the current value of the Plan assets. Current
value represents the market value of the assets as of the beginning
of the year.
d. Administrative Expenses -
-----------------------
Administrative expenses of the Plan may be paid by either the
Company or the Plan. During 1995, 1994, and 1993 the Company paid
all administrative expenses relating to the Plan.
4. Federal Income Tax Status:
-------------------------
In 1994 the Plan was amended and restated to meet the requirements of
the Tax Reform Act of 1986, and the Plan received a favorable
determination letter from the Internal Revenue Service dated September
-13-
19, 1995. The Plan Administrator and management believe that during
1995, the Plan was designed and operated in compliance with the
applicable requirements of the IRC. Therefore, they believe that the
Plan was qualified and the related trust was tax-exempt through the year
ended December 31, 1995.
5. Investments:
-----------
Putnam Fiduciary Trust Company, trustee of the Plan, holds the Plan's
investments and executes transactions therein.
The fair market values of individual assets that represent 5% or more of
the Plan's net assets as of December 31, 1995 and 1994 are as follows:
1995:
Connecticut Natural Gas Corporation
common stock $ 9,453,449
The Putnam Fund for Growth and Income 4,759,631
The George Putnam Fund of Boston 3,170,234
Putnam Fiduciary Trust Company Stable
Value Fund 1,179,925
1994:
Connecticut Natural Gas Corporation
common stock $10,021,908
The Putnam Fund for Growth and Income 3,277,169
The George Putnam Fund of Boston 2,475,895
Putnam Fiduciary Trust Company
Stable Value Fund 1,145,585
Putnam U.S. Government Income Trust 1,072,279
6. Concentration of Credit Risk:
----------------------------
The Plan's assets are invested in the mutual funds managed by Putnam
Investments, Inc. described in Note 1 and the Company's common stock.
In the event of any uncertainties in the financial marketplace the
Plan may be exposed to financial risks.
-14-
Schedule I
EIN 06-0383860
PN 007
CONNECTICUT NATURAL GAS CORPORATION
-----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
AS OF DECEMBER 31, 1995
------------------------
Description of Investment
Including Maturity Date, Rate
Identity of Issue, Borrower, Lessor, or of Interest, Collateral, Par Current
Similar Party or Maturity Value Cost Value
--------------------------------------- ----------------------------- --------- ----------
*Putnam Fiduciary Trust Company Stable Value Fund comprised of
Fund investment contracts $ 1,179,925 $ 1,179,925
----------- -----------
*The George Putnam Fund of Boston Mutual fund comprised of
common stocks and bonds 2,877,568 3,170,234
----------- -----------
*The Putnam Fund for Growth and Income Mutual fund comprised of
common stocks 4,071,703 4,759,631
----------- -----------
*Putnam Vista Fund Mutual fund comprised of
common stocks 765,240 754,331
----------- -----------
*Putnam Overseas Growth Fund Mutual fund comprised of
common stocks 226,375 227,244
----------- -----------
*Putnam Income Fund Mutual fund comprised of
bonds 160,427 161,811
----------- -----------
Participant directed-
*Connecticut Natural Gas Corporation Common stock 1,870,431 2,151,168
*Boston Safe Company Daily Liquidity Fund 35,959 35,959
----------- -----------
1,906,390 2,187,127
----------- -----------
Non-participant directed -
*Connecticut Natural Gas Corporation Common stock 6,350,326 7,302,281
*Boston Safe Company Daily Liquidity Fund 115,485 115,485
----------- -----------
6,465,811 7,417,766
----------- -----------
Total Common Stock Fund 8,372,201 9,604,893
----------- -----------
Total Investments $17,653,439 $19,858,069
=========== ===========
*Represents a party-in-interest for the year ended December 31, 1995.
The accompanying notes are an integral part of this schedule.
-15-
Schedule II
EIN 06-0383860
PN 007
CONNECTICUT NATURAL GAS CORPORATION
-----------------------------------
EMPLOYEE SAVINGS PLAN
---------------------
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
----------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
Purchases Sales
----------------------- ------------------------------------------
Identity of Description Number of Purchase Number of Selling Cost of Net Gain
Party Involved of Asset Transactions Price Transactions Price Asset or (Loss)
-------------- -------- ------------ --------- ------------ --------- --------- --------
Putnam Fiduciary Trust Fund comprised of
Company Stable Value investment contracts
Fund 74 $ 648,914 35 $619,852 $619,852 $ -
Putnam U.S. Government Mutual fund comprised
Income Trust of U.S. Government
securities 37 183,205 104 1,333,749 1,372,008 (38,259)
The George Putnam Mutual fund comprised
Fund of Boston of common stocks and
bonds 56 689,588 59 512,098 452,882 59,216
The Putnam Fund for Mutual fund comprised
Growth and Income of common stocks 78 1,288,728 67 744,904 621,059 123,845
Connecticut Natural
Gas Corporation Common stock 25 1,225,492 77 1,350,098 1,243,135 106,963
Note: For the purpose of this schedule, a reportable transaction is
defined as a transaction or a series of transactions of the
same issue or with the same person which involves an amount in
excess of 5% of the current value of plan assets at the
beginning of the plan year.
The accompanying notes are an integral part of this schedule.