EXHIBIT 99-2
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid 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 Hourly Paid 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 Hourly Paid 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 Hourly Paid 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 HOURLY PAID 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 Hourly Paid 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 Hourly Paid 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 Hourly Paid 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 Hourly Paid 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 on
the basic 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 our 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 Hourly Paid 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 Hourly Paid 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 Hourly Paid 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 Hourly Paid 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 $909,182 $909,182
Common stock of New York State
Electric & Gas Corporation $30,474,962 30,474,962
Other $21,069,829 $24,203,575 $2,188,125 $7,090,991 54,552,520
Loans to participants
-----------------------------------------------------------------------------------------
Net assets available for benefits $21,069,829 $24,203,575 $2,188,125 $7,090,991 $30,474,962 $909,182 $85,936,664
=========================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid 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 $909,182 $909,182
Common stock of New York State
Electric & Gas Corporation 30,474,962 30,474,962
Other 54,552,520 $2,346,254 $1,202,133 $1,076,226 $317,023 59,494,156
Loans to participants $3,271,689 3,271,689
-------------------------------------------------------------------------------------
Net assets available for benefits $85,936,664 $2,346,254 $1,202,133 $1,076,226 $317,023 $3,271,689 $94,149,989
=====================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid 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 $3,129,923 $3,129,923
Common stock of New York State
Electric & Gas Corporation $37,115,333 37,115,333
Other $13,894,560 $17,371,729 $2,138,010 $4,422,847 37,827,146
Loans to participants
-----------------------------------------------------------------------------------------
Net assets available for benefits $13,894,560 $17,371,729 $2,138,010 $4,422,847 $37,115,333 $3,129,923 $78,072,402
=========================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid 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 $3,129,923 $3,129,923
Common stock of New York State
Electric & Gas Corporation 37,115,333 37,115,333
Other 37,827,146 $918,554 $393,831 $433,455 $172,634 39,745,620
Loans to participants $2,816,260 2,816,260
-------------------------------------------------------------------------------------
Net assets available for benefits $78,072,402 $918,554 $393,831 $433,455 $172,634 $2,816,260 $82,807,136
=====================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid 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 $665,174 $2,070,273 $(57,134) $(6,182,420) $(3,504,107)
Dividends:
New York State Electric & Gas Corp. 2,018,810 2,018,810
Other 1,319,941 2,032,642 140,882 3,493,465
Interest on investments $314,406 $39,433 353,839
Interest on loans to participants -
----------------------------------------------------------------------------------------
1,985,115 4,102,915 83,748 314,406 (4,163,610) 39,433 2,362,007
Contributions:
Employer 1,270,641 1,270,641
Employee 2,611,340 2,157,860 316,813 691,248 2,496,687 8,273,948
Interfund transfers (net) 2,889,489 1,027,182 (311,124) 1,856,065 (5,215,922) (2,229,905) (1,984,215)
------------------------------------------------------------------------------------------
Total additions 7,485,944 7,287,957 89,437 2,861,719 (5,612,204) (2,190,472) 9,922,381
Deductions
Withdrawal benefits - stock 926,667 926,667
Withdrawal benefits - cash 262,877 450,334 24,278 199,764 28,917 966,170
Transfers to Salaried Plan 35,431 (6,559) 13,256 (13,792) 57,471 1,341 87,148
Administrative fees 12,367 12,336 1,788 7,603 44,029 11 78,134
------------------------------------------------------------------------------------------
Total deductions 310,675 456,111 39,322 193,575 1,028,167 30,269 2,058,119
------------------------------------------------------------------------------------------
Net increase (decrease) 7,175,269 6,831,846 50,115 2,668,144 (6,640,371) (2,220,741) 7,864,262
Net assets available for benefits
at beginning of year 13,894,560 17,371,729 2,138,010 4,422,847 37,115,333 3,129,923 78,072,402
------------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $21,069,829 $24,203,575 $2,188,125 $7,090,991 $30,474,962 $909,182 $85,936,664
==========================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid 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 $(3,504,107) $73,346 $65,077 $48,385 $5,324 $(3,311,975)
Dividends:
New York State Electric & Gas Corp. 2,018,810 2,018,810
Other 3,493,465 163,865 61,017 72,630 17,003 3,807,980
Interest on investments 353,839 353,839
Interest on loans to participants - $233,793 233,793
--------------------------------------------------------------------------------------
2,362,007 237,211 126,094 121,015 22,327 233,793 3,102,447
Contributions:
Employer 1,270,641 1,270,641
Employee 8,273,948 425,319 185,155 175,342 42,229 9,101,993
Interfund transfers (net) (1,984,215) 791,571 500,440 356,823 100,576 234,805
--------------------------------------------------------------------------------------
Total additions 9,922,381 1,454,101 811,689 653,180 165,132 468,598 13,475,081
Deductions
Withdrawal benefits - stock 926,667 926,667
Withdrawal benefits - cash 966,170 25,591 2,837 9,944 20,589 13,169 1,038,300
Transfers to Salaried Plan 87,148 (208) 86,940
Administrative fees 78,134 1,018 550 465 154 80,321
---------------------------------------------------------------------------------------
Total deductions 2,058,119 26,401 3,387 10,409 20,743 13,169 2,132,228
---------------------------------------------------------------------------------------
Net increase (decrease) 7,864,262 1,427,700 808,302 642,771 144,389 455,429 11,342,853
Net assets available for benefits
at beginning of year 78,072,402 918,554 393,831 433,455 172,634 2,816,260 82,807,136
---------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $85,936,664 $2,346,254 $1,202,133 $1,076,226 $317,023 $3,271,689 $94,149,989
=======================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid Employees
Statement of Changes in Net Assets Available for Benefits, With Fund Information
Year ended December 31, 1995
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 in fair
value of investments $2,672,529 $3,141,981 $149,688 $9,446,958 $15,411,156
Dividends:
New York State Electric & Gas Corp. 1,931,882 1,931,882
Other 731,094 1,096,406 135,853 $235,120 2,198,473
Interest on investments $229,574 229,574
Interest on loans to participants -
-----------------------------------------------------------------------------------------
3,403,623 4,238,387 285,541 235,120 11,378,840 229,574 19,771,085
Contributions:
Employer 1,203,833 1,203,833
Employee 2,010,430 1,856,322 366,511 657,528 3,037,305 7,928,096
Interfund transfers (net) 1,362,393 844,623 (112,292) 97,996 (2,140,885) (1,035,648) (983,813)
-----------------------------------------------------------------------------------------
Total additions 6,776,446 6,939,332 539,760 990,644 13,479,093 (806,074) 27,919,201
Deductions
Withdrawal benefits - stock 840,410 840,410
Withdrawal benefits - cash 158,730 120,086 83,445 115,463 108,216 585,940
Transfers to Salaried Plan 19,625 67,960 5,597 13,487 122,130 3,128 231,927
Administrative fees 8,394 9,725 1,712 5,695 56,331 13,024 94,881
-----------------------------------------------------------------------------------------
Total deductions 186,749 197,771 90,754 134,645 1,018,871 124,368 1,753,158
-----------------------------------------------------------------------------------------
Net increase (decrease) 6,589,697 6,741,561 449,006 855,999 12,460,222 (930,442) 26,166,043
Net assets available for benefits
at beginning of year 7,304,863 10,630,168 1,689,004 3,566,848 24,655,111 4,060,365 51,906,359
-----------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $13,894,560 $17,371,729 $2,138,010 $4,422,847 $37,115,333 $3,129,923 $78,072,402
=========================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid 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 $15,411,156 $32,270 $39,772 $39,473 $5,922 $15,528,593
Dividends:
New York State Electric & Gas Corp. 1,931,882 1,931,882
Other 2,198,473 48,804 16,246 22,705 7,054 2,293,282
Interest on investments 229,574 229,574
Interest on loans to participants - $175,288 175,288
---------------------------------------------------------------------------------------
19,771,085 81,074 56,018 62,178 12,976 175,288 20,158,619
Contributions:
Employer 1,203,833 1,203,833
Employee 7,928,096 274,617 100,226 136,526 24,254 8,463,719
Interfund transfers (net) (983,813) 405,793 105,107 86,143 102,090 284,680 0
---------------------------------------------------------------------------------------
Total additions 27,919,201 761,484 261,351 284,847 139,320 459,968 29,826,171
Deductions
Withdrawal benefits - stock 840,410 840,410
Withdrawal benefits - cash 585,940 14,750 141 600,831
Transfers to Salaried Plan 231,927 567 13,625 15,919 262,038
Administrative fees 94,881 335 173 157 67 95,613
---------------------------------------------------------------------------------------
Total deductions 1,753,158 15,652 13,939 157 67 15,919 1,798,892
---------------------------------------------------------------------------------------
Net increase (decrease) 26,166,043 745,832 247,412 284,690 139,253 444,049 28,027,279
Net assets available for benefits
at beginning of year 51,906,359 172,722 146,419 148,765 33,381 2,372,211 54,779,857
---------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $78,072,402 $918,554 $393,831 $433,455 $172,634 $2,816,260 $82,807,136
=======================================================================================
See notes to financial statements.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid Employees
Notes to Financial Statements
December 31, 1996 and 1995
1. DESCRIPTION OF THE HOURLY PLAN
The New York State Electric & Gas Corporation Tax Deferred Savings Plan for
Hourly Paid Employees (the Hourly Plan) was established effective January 1,
1986 to provide for before-tax contributions in accordance with Internal
Revenue Code (Code) Section 401(k).
The Hourly Plan is for the exclusive benefit of New York State Electric & Gas
Corporation (company) employees who are eligible to participate under the
Hourly 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 Hourly 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 Hourly Paid Employees
Notes to Financial Statements
December 31, 1996 and 1995
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Contributions (Continued)
During 1996 and 1995, an employee covered by a collective bargaining agreement
was eligible for participation in the Hourly 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 Hourly 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 Hourly 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 Hourly Plan document. The term of the loan may not exceed
five years, and the interest rate established by the Hourly Plan's adminis-
trative committee provides the Hourly 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 Hourly Paid 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 Hourly Plan,
it has the right to discontinue contributions at any time and terminate the
Hourly Plan. In the event of termination of the Hourly Plan, the net assets of
the Hourly Plan are set aside, first for payment of all Hourly 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 June 4, 1994, that the Hourly 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 Hourly Plan. Audit
and legal fees are paid by the company.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid 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 10.00 72.577 9.63 29.715 9.22
03/31/96 115.061 10.58 51.375 10.52 59.709 9.99 19.667 9.32
06/30/96 147.799 10.95 67.076 11.01 72.131 10.36 20.331 9.46
09/30/96 167.564 11.11 78.838 11.41 80.959 10.71 21.925 9.69
12/31/96 216.844 10.82 106.550 11.23 102.596 10.49 29.464 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
03/31/96 969.930 16.19 6,456.405 1.00 1,114.522 17.05 169.630 12.79
06/30/96 1,061.344 16.81 6,268.397 1.00 1,169.993 17.46 172.589 12.61
09/30/96 1,145.709 17.55 6,553.174 1.00 1,208.239 17.87 168.490 12.63
12/31/96 1,303.300 16.12 7,090.710 1.00 1,341.891 18.02 170.548 12.83
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Hourly Paid Employees
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 1,307,061 shares $21,069,829
Equity Fund
*Putnam Fund for Growth
and Income 1,343,151 shares 24,203,575
Government Obligation Fund
*Putnam U.S. Government
Income Trust 170,547 shares 2,188,125
Money Market Fund
*Putnam Money Market Fund 7,090,991 shares 7,090,991
Global Growth Fund
*Putnam Global Growth Fund 216,844 shares 2,346,254
Asset Allocation Growth Portfolio
*Putnam Asset Allocation - Growth
Portfolio 107,047 shares 1,202,133
Asset Allocation Balanced Portfolio
*Putnam Asset Allocation - Balanced
Portfolio 102,595 shares 1,076,226
Asset Allocation Conservative
Portfolio
*Putnam Asset Allocation
Conservative Portfolio 33,092 shares 317,023
-----------
Total $59,494,156
===========
Company Stock Fund
*New York State Electric & Gas
Corporation common stock 1,409,247 shares $30,474,962
===========
Guaranteed Investment Contracts $909,182 $909,182
=======================
Loans to participants - interest
rates from 6.5% to 10.5% $3,271,689
===========
* 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 Hourly Paid Employees
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 $8,369,137 $8,369,137
Common Stock $7,292,349 7,292,349 $(1,076,788)
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
Hourly Paid 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
Hourly Paid 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 Hourly
Paid 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 Hourly Paid 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