EXHIBIT 99-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Act of 1934
For the fiscal year ended December 31, 1996
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
--------------------------------------------------------
(Full title of the plan)
New York State Electric & Gas Corporation
--------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan)
P. O. Box 3287, Ithaca, New York 14852-3287
--------------------------------------------------------
(Address of principal executive office)
REQUIRED INFORMATION
The Tax Deferred Savings Plan for Salaried Employees ("Plan") is
subject to the Employee Retirement Income Security Act of 1974
("ERISA"). Therefore, in lieu of the requirements of Items 1-3
of Form 11-K, the financial statements and schedules of the Plan
for the two fiscal years ended December 31, 1996 and 1995, which
have been prepared in accordance with the financial reporting
requirements of ERISA, are attached hereto as Appendix 1 and
incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Committee to administer the Tax Deferred Savings Plan
for Salaried Employees has duly caused this Annual Report to be
signed by the undersigned hereunto duly authorized.
New York State Electric & Gas Corporation Tax
Deferred Savings Plan for Salaried Employees
By Richard R. Benson March 14, 1997
Richard R. Benson
Committee Member
By Gerald E. Putman March 14, 1997
Gerald E. Putman
Committee Member
By Sherwood J. Rafferty March 14, 1997
Sherwood J. Rafferty
Committee Member
APPENDIX 1
NEW YORK STATE ELECTRIC & GAS CORPORATION
TAX DEFERRED SAVINGS PLAN FOR SALARIED EMPLOYEES
FINANCIAL STATEMENTS AS OF AND
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995,
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1996 AND INDEPENDENT AUDITORS' REPORTS
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Year ended December 31, 1996
INDEX
Reports of Independent Auditors .......................................... 1
Statement of Net Assets Available for Benefits, With Fund
Information--December 31, 1996......................................... 4
Statement of Net Assets Available for Benefits, With Fund
Information--December 31, 1995......................................... 6
Statement of Changes in Net Assets Available for Benefits, With
Fund Information--Year ended December 31, 1996......................... 8
Statement of Changes in Net Assets Available for Benefits, With
Fund Information--Year ended December 31, 1995......................... 10
Notes to Financial Statements ........................................... 12
Schedule of Assets Held for Investment Purposes--December 31, 1996....... 16
Schedule of Reportable Transactions--Year ended December 31, 1996........ 17
Consents of Independent Auditors .........................................18
REPORT OF INDEPENDENT AUDITORS
Tax Deferred Savings Plan for Salaried Employees
Administrative Committee
New York State Electric & Gas Corporation
We have audited the accompanying statements of net assets
available for benefits of the New York State Electric & Gas
Corporation Tax Deferred Savings Plan for Salaried Employees as
of December 31, 1996, and the related statements of changes in
net assets available for benefits for the year ended December 31,
1996. 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 audit.
We conducted our audit 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 audit provides 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 New York State Electric & Gas
Corporation Tax Deferred Savings Plan for Salaried Employees at
December 31, 1996, and the changes in its net assets available
for benefits for the year ended December 31, 1996, in conformity
with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion of
the financial statements taken as a whole. The supplemental
schedules of assets held for investment purposes as of
December 31, 1996 and reportable transactions for the year ended
December 31, 1996 are presented for the purpose 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 statements of net assets
available for benefits and the statements of changes in net
assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets
available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures
applied in the audit 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.
The schedule of assets held for investment purposes that
accompanies the Plan's financial statements does not disclose
historical cost of certain plan assets held by the Plan trustee.
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.
COOPERS & LYBRAND L.L.P.
New York, New York
February 14, 1997
Report of Independent Auditors
Tax Deferred Savings Plan for Salaried Employees
Administrative Committee
New York State Electric & Gas Corporation
We have audited the accompanying statement of net assets
available for benefits of the New York State Electric & Gas
Corporation Tax Deferred Savings Plan for Salaried Employees as
of December 31, 1995, and the related statement of changes in net
assets available for benefits for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 New York State Electric & Gas
Corporation Tax Deferred Savings Plan for Salaried Employees at
December 31, 1995, and the changes in its net assets available
for benefits for the year then ended, in conformity with
generally accepted accounting principles.
Ernst & Young L.L.P.
Syracuse, New York
April 17, 1996
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Statement of Net Assets Available for Benefits, With Fund Information
December 31, 1996
Fund Information
----------------------------------------------------------------------------------------
Guaranteed
Capital Government Money Company Investment
Appreciation Equity Obligation Market Stock Contract
Fund Fund Fund Fund Fund Fund Subtotal
-----------------------------------------------------------------------------------------
Assets
Investments:
Guaranteed investment contracts $1,120,237 $1,120,237
Common stock of New York State
Electric & Gas Corporation $26,216,251 26,216,251
Other $30,856,044 $32,348,253 $3,103,452 $6,388,691 72,696,440
Loans to participants
------------------------------------------------------------------------------------------
Net assets available for benefits $30,856,044 $32,348,253 $3,103,452 $6,388,691 $26,216,251 $1,120,237 $100,032,928
==========================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Statement of Net Assets Available for Benefits, With Fund Information (Continued)
December 31, 1996
Fund Information
------------------------------------------------------------------
Asset Asset Asset
Subtotal Global Allocation Allocation Allocation
Brought Growth Growth Balanced Conservative Loan
Forward Fund Portfolio Portfolio Portfolio Fund Total
------------------------------------------------------------------------------------
Assets
Investments:
Guaranteed investment contracts $1,120,237 $1,120,237
Common stock of New York State
Electric & Gas Corporation 26,216,251 26,216,251
Other 72,696,440 $3,085,090 $1,718,485 $1,399,123 $447,609 79,346,747
Loans to participants $3,325,702 3,325,702
-------------------------------------------------------------------------------------
Net assets available for benefits $100,032,928 $3,085,090 $1,718,485 $1,399,123 $447,609 $3,325,702 $110,008,937
=====================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Statement of Net Assets Available for Benefits, With Fund Information
December 31, 1995
Fund Information
----------------------------------------------------------------------------------------
Guaranteed
Capital Government Money Company Investment
Appreciation Equity Obligation Market Stock Contract
Fund Fund Fund Fund Fund Fund Subtotal
----------------------------------------------------------------------------------------
Assets
Investments:
Guaranteed investment contracts $3,319,662 $3,319,662
Common stock of New York State
Electric & Gas Corporation $31,027,515 31,027,515
Other $23,610,555 $24,920,863 $3,103,601 $4,885,098 56,520,117
Loans to participants
----------------------------------------------------------------------------------------
Net assets available for benefits $23,610,555 $24,920,863 $3,103,601 $4,885,098 $31,027,515 $3,319,662 $90,867,294
========================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Statement of Net Assets Available for Benefits, With Fund Information (Continued)
December 31, 1995
Fund Information
------------------------------------------------------------------
Asset Asset Asset
Subtotal Global Allocation Allocation Allocation
Brought Growth Growth Balanced Conservative Loan
Forward Fund Portfolio Portfolio Portfolio Fund Total
-----------------------------------------------------------------------------------
Assets
Investments:
Guaranteed investment contracts $3,319,662 $3,319,662
Common stock of New York State
Electric & Gas Corporation 31,027,515 31,027,515
Other 56,520,117 $1,514,329 $801,940 $698,912 $273,968 59,809,266
Loans to participants $3,033,421 3,033,421
-----------------------------------------------------------------------------------
Net assets available for benefits $90,867,294 $1,514,329 $801,940 $698,912 $273,968 $3,033,421 $97,189,864
===================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Statement of Changes in Net Assets Available for Benefits, With Fund Information
Year ended December 31, 1996
Fund Information
-----------------------------------------------------------------------------------------
Guaranteed
Capital Government Money Company Investment
Appreciation Equity Obligation Market Stock Contract
Fund Fund Fund Fund Fund Fund Subtotal
------------------------------------------------------------------------------------------
Additions
Investment income:
Net appreciation (depreciation)
in fair value of investments $1,260,520 $2,962,290 $(82,780) $(5,276,790) $(1,136,760)
Dividends:
New York State Electric & Gas Corp. 1,693,820 1,693,820
Other 1,939,080 2,744,695 198,740 $279,812 5,162,327
Interest on investments $54,848 54,848
Interest on loans to participants -
------------------------------------------------------------------------------------------
3,199,600 5,706,985 115,960 279,812 (3,582,970) 54,848 5,774,235
Contributions:
Employer 1,039,803 1,039,803
Employee 2,363,986 1,812,580 261,395 378,496 2,257,844 7,074,301
Transfers from Hourly Plan 35,431 (6,559) 13,256 (13,792) 57,471 1,341 87,148
Interfund transfers (net) 2,109,738 871,506 (267,122) 1,333,526 (3,809,736) (2,184,402) (1,946,490)
------------------------------------------------------------------------------------------
Total additions 7,708,755 8,384,512 123,489 1,978,042 (4,037,588) (2,128,213) 12,028,997
Deductions
Withdrawal benefits-stock 745,995 745,995
Withdrawal benefits-cash 453,789 948,226 122,508 470,971 71,191 2,066,685
Administrative fees 9,477 8,896 1,130 3,478 27,681 21 50,683
------------------------------------------------------------------------------------------
Total deductions 463,266 957,122 123,638 474,449 773,676 71,212 2,863,363
------------------------------------------------------------------------------------------
Net increase (decrease) 7,245,489 7,427,390 (149) 1,503,593 (4,811,264) (2,199,425) 9,165,634
Net assets available for benefits
at beginning of year 23,610,555 24,920,863 3,103,601 4,885,098 31,027,515 3,319,662 90,867,294
------------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $30,856,044 $32,348,253 $3,103,452 $6,388,691 $26,216,251 $1,120,237 $100,032,928
==========================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Statement of Changes in Net Assets Available for Benefits, With Fund Information (Continued)
Year Ended December 31, 1996
Fund Information
-----------------------------------------------------------------------------
Asset Asset Asset
Subtotal Global Allocation Allocation Allocation
Brought Growth Growth Balanced Conservative Loan
Forward Fund Portfolio Portfolio Portfolio Fund Total
-------------------------------------------------------------------------------------------
Additions
Investment income:
Net appreciation (depreciation) in
fair value of investments $(1,136,760) $140,855 $114,806 $80,165 $15,347 $(785,587)
Dividends:
New York State Electric & Gas Corp. 1,693,820 1,693,820
Other 5,162,327 215,648 89,104 98,208 28,476 5,593,763
Interest on investments 54,848 54,848
Interest on loans to participants - $298,343 298,343
--------------------------------------------------------------------------------------------
5,774,235 356,503 203,910 178,373 43,823 298,343 6,855,187
Contributions:
Employer 1,039,803 1,039,803
Employee 7,074,301 372,758 224,776 133,889 24,163 7,829,887
Transfers from Hourly Plan 87,148 (208) 86,940
Interfund transfers (net) (1,946,490) 867,394 581,484 389,957 107,710 (55)
--------------------------------------------------------------------------------------------
Total additions 12,028,997 1,596,447 1,010,170 702,219 175,696 298,288 15,811,817
Deductions
Withdrawal benefits-stock 745,995 745,995
Withdrawal benefits-cash 2,066,685 24,918 93,115 1,676 1,955 6,007 2,194,356
Administrative fees 50,683 768 510 332 100 52,393
--------------------------------------------------------------------------------------------
Total deductions 2,863,363 25,686 93,625 2,008 2,055 6,007 2,992,744
--------------------------------------------------------------------------------------------
Net increase 9,165,634 1,570,761 916,545 700,211 173,641 292,281 12,819,073
Net assets available for benefits
at beginning of year 90,867,294 1,514,329 801,940 698,912 273,968 3,033,421 97,189,864
--------------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $100,032,928 $3,085,090 $1,718,485 $1,399,123 $447,609 $3,325,702 $110,008,937
============================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Statement of Changes in Net Assets Available for Benefits, With Fund Information
Year ended December 31, 1995
Fund Information
------------------------------------------------------------------------------------------
Capital Government Money Company Guaranteed
Appreciation Equity Obligation Market Stock Investment
Fund Fund Fund Fund Fund Contract Fund Subtotal
-------------------------------------------------------------------------------------------
Additions
Investment income:
Net appreciation in fair value
of investments $5,038,754 $4,797,742 $223,497 $8,208,070 $18,268,063
Dividends:
New York State Electric & Gas Corp. 1,692,966 1,692,966
Other 1,245,657 1,608,617 201,913 $244,233 3,300,420
Interest on investments $232,246 232,246
Interest on loans to participants -
-------------------------------------------------------------------------------------------
6,284,411 6,406,359 425,410 244,233 9,901,036 232,246 23,493,695
Contributions:
Employer 969,088 969,088
Employee 1,894,802 1,593,465 287,229 350,812 1,581,913 5,708,221
Transfers from other plan 595,628 595,628
Transfers from Hourly Plan 19,625 67,960 5,597 13,487 122,130 3,128 231,927
Interfund transfers (net) 1,144,499 678,310 (10,483) 1,274,536 (3,236,549) (1,517,689) (1,667,376)
-------------------------------------------------------------------------------------------
Total additions 9,343,337 8,746,094 707,753 1,883,068 9,933,246 (1,282,315) 29,331,183
Deductions
Withdrawal benefits-stock 924,194 924,194
Withdrawal benefits-cash 595,322 961,992 247,967 237,034 188,561 2,230,876
Administrative fees 7,079 7,110 1,148 2,628 40,318 12,144 70,427
-------------------------------------------------------------------------------------------
Total deductions 602,401 969,102 249,115 239,662 964,512 200,705 3,225,497
-------------------------------------------------------------------------------------------
Net increase (decrease) 8,740,936 7,776,992 458,638 1,643,406 8,968,734 (1,483,020) 26,105,686
Net assets available for benefits
at beginning of year 14,869,619 17,143,871 2,644,963 3,241,692 22,058,781 4,802,682 64,761,608
-------------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $23,610,555 $24,920,863 $3,103,601 $4,885,098 $31,027,515 $3,319,662 $90,867,294
===========================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Statement of Changes in Net Assets Available for Benefits, With Fund Information (Continued)
Year Ended December 31, 1995
Fund Information
-----------------------------------------------------------------------------
Asset Asset Asset
Subtotal Global Allocation Allocation Allocation
Brought Growth Growth Balanced Conservative Loan
Forward Fund Portfolio Portfolio Portfolio Fund Total
-------------------------------------------------------------------------------------------
Additions
Investment income:
Net appreciation in fair
value of investments $18,268,063 $68,206 $81,576 $45,018 $24,862 $18,487,725
Dividends:
New York State Electric & Gas Corp. 1,692,966 1,692,966
Other 3,300,420 80,519 38,508 34,339 14,444 3,468,230
Interest on investments 232,246 232,246
Interest on loans to participants - $198,579 198,579
------------------------------------------------------------------------------------------
23,493,695 148,725 120,084 79,357 39,306 198,579 24,079,746
Contributions:
Employer 969,088 969,088
Employee 5,708,221 306,783 171,066 98,929 19,746 6,304,745
Transfers from other plan 595,628 595,628
Transfers from Hourly Plan 231,927 567 13,625 15,919 262,038
Interfund transfers (net) (1,667,376) 654,672 213,726 430,205 106,331 262,442 0
-----------------------------------------------------------------------------------------
Total additions 29,331,183 1,110,747 518,501 608,491 165,383 476,940 32,211,245
Deductions
Withdrawal benefits-stock 924,194 924,194
Withdrawal benefits-cash 2,230,876 44,518 73 200 8,186 2,283,853
Administrative fees 70,427 317 194 112 37 71,087
------------------------------------------------------------------------------------------
Total deductions 3,225,497 44,835 267 312 8,223 3,279,134
------------------------------------------------------------------------------------------
Net increase (decrease) 26,105,686 1,065,912 518,234 608,179 157,160 476,940 28,932,111
Net assets available for benefits
at beginning of year 64,761,608 448,417 283,706 90,733 116,808 2,556,481 68,257,753
-------------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $90,867,294 $1,514,329 $801,940 $698,912 $273,968 $3,033,421 $97,189,864
===========================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Notes to Financial Statements
December 31, 1996 and 1995
1. DESCRIPTION OF THE SALARIED PLAN
The New York State Electric & Gas Corporation Tax Deferred Savings Plan for
Salaried Employees (the Salaried Plan) was established effective January 1,
1985 to provide for before-tax contributions in accordance with Internal
Revenue Code (Code) Section 401(k).
The Salaried Plan is for the exclusive benefit of New York State Electric & Gas
Corporation (company) employees who are eligible to participate under the
Salaried Plan provisions.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements are prepared on an accrual basis and in conformity
with generally accepted accounting principles, which require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. Estimates also affect the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Certain amounts have been reclassified on the financial statements to conform
to the 1996 presentation.
Investments
Investments consisting of the company's publicly traded common stock and
various Putnam Investment vehicles are carried at current value using the
market price at closing on the last business day of the year.
Guaranteed investment contracts are valued at contract value (which
approximates fair market value) which represents contributions plus interest
thereon at the contract rate.
The change during the period between fair value and carrying value is reflected
in the statement of changes in net assets available for benefits as net
appreciation (depreciation) in fair value of investments.
Contributions
Contributions to the Salaried Plan are allocated to participant accounts.
Participants have full and immediate vesting rights in employee and employer
contributions, investment earnings and other amounts allocated to their
accounts.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Notes to Financial Statements
December 31, 1996 and 1995
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Contributions (Continued)
During 1996 and 1995, an employee not covered by a collective bargaining
agreement was eligible for participation in the Salaried Plan generally upon
completion of at least 1,000 hours of service during the 12 consecutive month
period beginning on the date of employment or any anniversary thereof.
Effective January 1, 1997, an employee may become a participant in the Salaried
Plan as of the first day of any calendar month that commences after the
completion of the employee's first 30 days of employment.
Employee contributions, with certain exceptions, range from 1% to 15% of the
participant's base compensation plus any overtime pay. Subject to limitations
stipulated by the Code, a participant's total contribution could not exceed
$9,500 per year in 1996 and $9,240 per year in 1995.
During 1996 and 1995, the company contributed solely to the Company Stock Fund
an amount equivalent to 25% of the participant's contributions to any fund (up
to 1.5% of the participant's annual base compensation as of the first day of
the year).
Benefit Payments
Distributions from the Equity Fund, Money Market Fund, Capital Appreciation
Fund, Government Obligation Fund, Guaranteed Investment Contract Fund, Global
Growth Fund, and the Asset Allocation Funds are made in cash. Distributions
from the Company Stock Fund are made in either whole shares of the company's
common stock or in cash as specified by the participant and subject to approval
by the Salaried Plan's administrative committee.
Loans
Participants may, under certain circumstances, borrow against their account
balances. The principal amount of the loan is subject to certain limitations
as defined in the Salaried Plan document. The term of the loan may not exceed
five years, and the interest rate established by the Salaried Plan's
administrative committee provides the Salaried Plan with a return commensurate
with the interest rate charged by persons in the business of lending money for
loans which would be made under similar circumstances. Interest rates range
from 6.5% to 10.5%. The loan must be repaid by payroll deductions over the
term of the loan. Loan payments are credited to an applicable fund based upon
the participant's election. If a participant's employment terminates for any
reason, the loan will become immediately due and payable.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Notes to Financial Statements
December 31, 1996 and 1995
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Plan Termination
Although the company has not expressed any intent to terminate the Salaried
Plan, it has the right to discontinue contributions at any time and terminate
the Salaried Plan. In the event of termination of the Salaried Plan, the net
assets of the Salaried Plan are set aside, first for payment of all Salaried
Plan expenses and, second, for distribution to the participants, based upon the
balances in their individual accounts.
3. INVESTMENTS
Contributions by the participants are invested, at the election of the
participant, in one or a combination of the following nine funds: (1) the
Company Stock Fund, consisting of common stock of the company; (2) the Equity
Fund, a mutual fund, consisting primarily of common stock; (3) the Money Market
Fund, a mutual fund, consisting of money market instruments; (4) the Capital
Appreciation Fund, a mutual fund, consisting primarily of common stock; (5)
the Government Obligation Fund, a mutual fund, consisting of securities that
are backed by the full faith and credit of the United States Government; (6)
the Global Growth Fund, a mutual fund, consisting primarily of U.S. and
international common stocks; or (7) the three Asset Allocation funds,
consisting primarily of equity and fixed income securities. Effective
January 1, 1992, the Guaranteed Investment Contract Fund did not accept any new
investments. Prior to November 18, 1988, the Guaranteed Investment Contract
Fund consisted of investments in insurance contracts that guaranteed
an effective annual rate of interest through a specified period, and effective
November 18, 1988, included investments in securities and other obligations
issued by any company that guaranteed an effective annual rate of interest
through a specified period.
4. INCOME TAX STATUS
The company has received a determination letter from the Internal Revenue
Service dated March 24, 1995, that the Salaried Plan qualifies as a tax
deferred savings plan under Sections 401(a) and 401(k) of the Code. The Plan
has been amended subsequent to the receipt of the latest determination letter.
However, the Plan's administrator and tax counsel believe that the Plan is
designed and currently being operated in compliance with the applicable
requirements of the Code.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
All administrative fees are paid by the participants in the Salaried Plan.
Audit and legal fees are paid by the company.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Notes to Financial Statements
December 31, 1996 and 1995
6. UNITS OF PARTICIPATION
Total number of units and net asset value per unit during the period from
January 1, 1995 to December 31, 1996, by quarter, are as follows:
GLOBAL ALLOCATION ALLOCATION ALLOCATION
GROWTH GROWTH BALANCED CONSERVATIVE
-------------- -------------- ------------- --------------
Units $ Unit Units $ Unit Units $ Unit Units $ Unit
01/01/95 48.635 9.22 34.590 8.32 11.011 8.24 14.385 8.12
03/31/95 84.573 9.23 47.696 8.42 26.817 8.26 22.107 8.17
06/30/95 91.968 9.25 54.681 8.5 36.336 8.41 23.352 8.2
09/30/95 122.957 9.5 68.632 9.11 55.394 8.8 29.470 8.41
12/31/95 151.584 9.9 80.194 10 72.577 9.63 29.715 9.22
03/31/96 191.975 10.58 96.378 10.52 94.23 9.99 34.441 9.32
06/30/96 208.281 10.95 103.612 11.01 100.753 10.36 37.818 9.46
09/30/96 234.567 11.11 118.939 11.41 115.442 10.71 43.153 9.69
12/31/96 284.602 10.82 153.036 11.23 132.538 10.49 46.724 9.58
CAPITAL MONEY EQUITY GOVERNMENT
APPRECIATION MARKET FUND OBLIGATIONS
----------------- --------------- ---------------- ---------------
Units $ Unit Units $ Unit Units $ Unit Units $ Unit
01/01/95 1,290.853 11.52 3,228.868 1.00 1,347.789 12.72 216.978 12.19
03/31/95 1,365.577 12.83 4,286.385 1.00 1,312.927 10.49 220.870 13.34
06/30/95 1,336.338 10.6 4,666.584 1.00 1,389.280 12.9 225.631 13.3
09/30/95 1,408.207 10.89 4,917.421 1.00 1,438.141 13.07 222.589 13.25
12/31/95 1,548.233 15.25 4,876.371 1.00 1,539.275 16.19 235.299 13.19
03/31/96 1,612.747 16.19 5,696.149 1.00 1,596.605 17.05 237.709 12.79
06/30/96 1,693.416 16.81 5,663,621 1.00 1,637.049 17.46 242.029 12.61
09/30/96 1,759.393 17.55 5,348.973 1.00 1,676.201 17.87 240.336 12.63
12/31/96 1,911.364 16.12 6,309.305 1.00 1,792.471 18.02 241.891 12.83
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1996
Balance Held at Market
Name of Issuer and Title of Issue End of Year Cost ** Value
- ------------------------------------------------------------------------------
Capital Appreciation Fund
*Putnam Voyager Fund 1,914,147 shares $30,856,044
Equity Fund
*Putnam Fund for Growth
and Income 1,795,131 shares 32,348,253
Government Obligation Fund
*Putnam U.S. Government
Income Trust 241,890 shares 3,103,452
Money Market Fund
*Putnam Money Market Fund 6,388,691 shares 6,388,691
Global Growth Fund
*Putnam Global Growth Fund 285,128 shares 3,085,090
Asset Allocation - Growth Portfolio
*Putnam Asset Allocation - Growth
Portfolio 153,026 shares 1,718,485
Asset Allocation - Balanced Portfolio
*Putnam Asset Allocation - Balanced
Portfolio 133,377 shares 1,399,123
Asset Allocation - Conservative
Portfolio
*Putnam Asset Allocation -
Conservative Portfolio 46,723 shares 447,609
-----------
Total $79,346,747
===========
Company Stock Fund
*New York State Electric & Gas
Corporation common stock 1,212,312 shares $26,216,251
===========
Guaranteed Investment Contracts $1,120,237 $ 1,120,237
=======================
Participant Loans - interest
rates from 6.5% to 10.5% $ 3,325,702
===========
* Denotes a party-in-interest.
** Information pertaining to the historical cost was not available from the
trustee.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1996
Current Value
of Asset on
Purchase Selling Transaction Net Gain
Description of Assets Price Price Date (Loss)
- -------------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5% of plan assets
Company Stock Fund
*New York State Electric
& Gas Corporation $6,401,282 $6,401,282
Common Stock $5,601,292 5,601,292 $(799,990)
There were no category (i), (ii), or (iv) reportable transactions during 1996.
* Denotes a party-in-interest.
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 333-16201) pertaining to the New York
State Electric & Gas Corporation Tax Deferred Savings Plan for
Salaried Employees of our report dated February 14, 1997, with
respect to the financial statements and schedules of the New York
State Electric & Gas Corporation Tax Deferred Savings Plan for
Salaried Employees for the year ended December 31, 1996, which
report is included in this Annual Report on Form 11-K.
COOPERS & LYBRAND L.L.P.
New York, New York
March 5, 1997
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 333-16201) pertaining to New York State
Electric & Gas Corporation Tax Deferred Savings Plan for Salaried
Employees of our report dated April 17, 1996, with respect to the
financial statements of the New York State Electric & Gas
Corporation Tax Deferred Savings Plan for Salaried Employees for
the year ended December 31, 1995, which report is included in
this Annual Report on Form 11-K.
Ernst & Young L.L.P.
Syracuse, New York
February 14, 1997