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, 1997
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, 1997 and 1996, 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 6, 1998
Richard R. Benson
Committee Member
By Gerald E. Putman March 6, 1998
Gerald E. Putman
Committee Member
By Sherwood J. Rafferty March 6, 1998
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, 1997 AND 1996,
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1997 AND INDEPENDENT ACCOUNTANT'S REPORT
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Year ended December 31, 1997
INDEX
Report of Independent Accountants....................................... 1
Statement of Net Assets Available for Benefits, With Fund
Information--December 31, 1997......................................... 3
Statement of Net Assets Available for Benefits, With Fund
Information--December 31, 1996......................................... 5
Statement of Changes in Net Assets Available for Benefits, With
Fund Information--Year ended December 31, 1997......................... 7
Statement of Changes in Net Assets Available for Benefits, With
Fund Information--Year ended December 31, 1996......................... 9
Notes to Financial Statements ........................................... 11
Line 27a - Schedule of Assets Held for Investment Purposes--
December 31, 1997...................................................... 16
Line 27d - Schedule of Reportable Transactions--Year ended
December 31, 1997 ..................................................... 17
Consent of Independent Accountants ...................................... 18
REPORT OF INDEPENDENT ACCOUNTANTS
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, 1997 and 1996, and the related statements of
changes in net assets available for benefits for the years ended
December 31, 1997 and 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
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the New York State Electric & Gas
Corporation Tax Deferred Savings Plan for Salaried Employees at
December 31, 1997 and 1996, and the changes in its net assets
available for benefits for the years ended December 31, 1997 and
1996, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules of assets held for investment purposes as
of December 31, 1997, and reportable transactions for the year
ended December 31, 1997, 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.
Syracuse, New York
February 20, 1998
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, 1997
<C
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 $1,136,289 $1,136,289
Common stock of New York State
Electric & Gas Corporation $36,165,704 36,165,704
Other $41,440,213 $43,729,849 $3,678,710 $7,395,876 96,244,648
Loans to participants
----------------------------------------------------------------------------------------
Net assets available for benefits $41,440,213 $43,729,849 $3,678,710 $7,395,876 $36,165,704 $1,136,289 $133,546,641
========================================================================================
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, 1997
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 $1,136,289 $1,136,289
Common stock of New York State
Electric & Gas Corporation 36,165,704 36,165,704
Other 96,244,648 $5,189,049 $3,482,023 $2,846,368 $1,289,429 109,051,517
Loans to participants $3,458,357 3,458,357
-------------------------------------------------------------------------------------
Net assets available for benefits $133,546,641 $5,189,049 $3,482,023 $2,846,368 $1,289,429 $3,458,357 $149,811,867
=====================================================================================
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, 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 Changes in Net Assets Available for Benefits, With Fund Information
Year ended December 31, 1997
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 $5,617,926 $2,459,893 $68,706 $15,504,934 $23,651,459
Dividends:
New York State Electric & Gas Corp. 1,641,724 1,641,724
Other 2,465,928 5,550,176 207,097 $348,024 8,571,225
Interest on investments $49,302 49,302
Interest on loans to participants
------------------------------------------------------------------------------------------
8,083,854 8,010,069 275,803 348,024 17,146,658 49,302 33,913,710
Contributions:
Employer 1,094,746 1,094,746
Employee 2,687,983 2,116,803 258,047 344,068 1,762,035 7,168,936
Transfers from Hourly Plan 14,498 (4,947) (3,364) (9,612) 1,685 997 (743)
Transfers from other plan 33,425 33,425
Interfund transfers (net) 996,029 2,929,148 180,645 1,373,166 (9,314,999) (19,516) (3,855,527)
------------------------------------------------------------------------------------------
Total additions 11,782,364 13,051,073 711,131 2,089,071 10,690,125 30,783 38,354,547
Deductions
Withdrawal benefits-stock 714,762 714,762
Withdrawal benefits-cash 1,189,704 1,660,597 135,141 1,079,123 14,731 4,079,296
Administrative fees 8,491 8,880 732 2,763 25,910 46,776
------------------------------------------------------------------------------------------
Total deductions 1,198,195 1,669,477 135,873 1,081,886 740,672 14,731 4,840,834
------------------------------------------------------------------------------------------
Net increase 10,584,169 11,381,596 575,258 1,007,185 9,949,453 16,052 33,513,713
Net assets available for benefits
at beginning of year 30,856,044 32,348,253 3,103,452 6,388,691 26,216,251 1,120,237 100,032,928
------------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $41,440,213 $43,729,849 $3,678,710 $7,395,876 $36,165,704 $1,136,289 $133,546,641
==========================================================================================
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, 1997
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 $23,651,459 $(468,089) $181,838 $32,915 $4,223 $23,402,346
Dividends:
New York State Electric & Gas Corp. 1,641,724 1,641,724
Other 8,571,225 935,701 234,107 229,884 71,161 10,042,078
Interest on investments 49,302 49,302
Interest on loans to participants $220,975 220,975
------------------------------------------------------------------------------------------
33,913,710 467,612 415,945 262,799 75,384 220,975 35,356,425
Contributions:
Employer 1,094,746 1,094,746
Employee 7,168,936 543,302 352,280 202,848 39,350 8,306,716
Transfers from Hourly Plan (743) 786 43
Transfers from other plan 33,425 33,425
Interfund transfers (net) (3,855,527) 1,180,810 1,019,038 995,640 742,127 (82,088)
-----------------------------------------------------------------------------------------
Total additions 38,354,547 2,192,510 1,787,263 1,461,287 856,861 138,887 44,791,355
Deductions
Withdrawal benefits-stock 714,762 714,762
Withdrawal benefits-cash 4,079,296 87,601 23,122 13,601 14,914 6,232 4,224,766
Administrative fees 46,776 950 603 441 127 48,897
------------------------------------------------------------------------------------------
Total deductions 4,840,834 88,551 23,725 14,042 15,041 6,232 4,988,425
------------------------------------------------------------------------------------------
Net increase 33,513,713 2,103,959 1,763,538 1,447,245 841,820 132,655 39,802,930
Net assets available for benefits
at beginning of year 100,032,928 3,085,090 1,718,485 1,399,123 447,609 3,325,702 110,008,937
-------------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $133,546,641 $5,189,049 $3,482,023 $2,846,368 $1,289,429 $3,458,357 $149,811,867
===========================================================================================
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
Notes to Financial Statements
December 31, 1997 and 1996
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.
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, 1997 and 1996
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Contributions (Continued)
During 1996 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 1997 and
1996.
During 1997 and 1996, 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 Capital Appreciation Fund, Equity Fund,
Government Obligation Fund, Money Market 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.
As of December 31, 1997, plan assets include approximately
$29,751,766 in amounts allocated to participants who have withdrawn
from the Salaried Plan, due to termination, retirement or
disability but for which disbursement of funds have not yet
occurred.
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.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Notes to Financial Statements
December 31, 1997 and 1996
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Loans (Continued)
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.
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 Capital Appreciation Fund, a mutual fund,
consisting primarily of common stock; (2) the Equity Fund, a mutual
fund, consisting primarily of common stock; (3) the Government
Obligation Fund, a mutual fund, consisting of securities that are
backed by the full faith and credit of the United States
Government; (4) the Money Market Fund, a mutual fund, consisting of
money market instruments; (5) the Company Stock Fund, consisting of
common stock of the company; (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.
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Notes to Financial Statements
December 31, 1997 and 1996
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, 1997 and 1996
6. UNITS OF PARTICIPATION
Total number of units and net asset value per unit during the period from
January 1, 1996 to December 31, 1997, by quarter, are as follows:
Capital Equity Government Money
Appreciation Fund Obligations Market
---------------- ---------------- -------------- ---------------
Units $ Unit Units $ Unit Units $ Unit Units $ Unit
01/01/96 1,548,233 15.25 1,539,275 16.19 235,299 13.19 4,876,371 1.00
03/31/96 1,612,747 16.19 1,596,605 17.05 237,709 12.79 5,696,149 1.00
06/30/96 1,693,416 16.81 1,637,049 17.46 242,029 12.61 5,663,621 1.00
09/30/96 1,759,393 17.55 1,676,201 17.87 240,336 12.63 5,348,973 1.00
12/31/96 1,911,364 16.12 1,792,471 18.02 241,891 12.83 6,309,305 1.00
03/31/97 1,925,779 15.30 1,855,501 18.39 245,466 12.61 6,881,509 1.00
06/30/97 1,918,535 18.03 1,886,520 20.67 246,595 12.87 6,990,751 1.00
09/30/97 1,978,542 20.00 1,929,486 21.80 263,648 13.01 7,163,991 1.00
12/31/97 2,175,339 19.05 2,237,966 19.54 281,032 13.09 7,395,876 1.00
Global Allocation Allocation Allocation
Growth Growth Balanced Conservative
-------------- -------------- -------------- --------------
Units $ Unit Units $ Unit Units $ Unit Units $ Unit
01/01/96 151,584 9.90 80,194 10.00 72,577 9.63 29,715 9.22
03/31/96 191,975 10.58 96,378 10.52 94,230 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
03/31/97 329,819 10.94 193,179 11.58 154,577 10.71 54,857 9.56
06/30/97 365,081 12.49 207,488 12.64 155,962 11.55 67,673 10.16
09/30/97 405,082 12.99 213,139 13.55 187,029 12.21 76,280 10.62
12/31/97 520,989 9.96 282,403 12.33 255,739 11.13 129,331 9.97
New York State Electric & Gas Corporation
Tax Deferred Savings Plan for Salaried Employees
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
Balance Held at Market
Name of Issuer and Title of Issue End of Year Cost ** Value
- ------------------------------------------------------------------------------
Capital Appreciation Fund
*Putnam Voyager Fund 2,175,339 shares $41,440,213
Equity Fund
*Putnam Fund for Growth
and Income 2,237,966 shares 43,729,849
Government Obligation Fund
*Putnam U.S. Government
Income Trust 281,032 shares 3,678,710
Money Market Fund
*Putnam Money Market Fund 7,395,876 shares 7,395,876
Global Growth Fund
*Putnam Global Growth Fund 520,989 shares 5,189,049
Asset Allocation - Growth Portfolio
*Putnam Asset Allocation - Growth
Portfolio 282,403 shares 3,482,023
Asset Allocation - Balanced Portfolio
*Putnam Asset Allocation - Balanced
Portfolio 255,739 shares 2,846,368
Asset Allocation - Conservative
Portfolio
*Putnam Asset Allocation -
Conservative Portfolio 129,331 shares 1,289,429
------------
Total $109,051,517
============
Company Stock Fund
*New York State Electric & Gas
Corporation common stock 1,018,752 shares $36,165,704
===========
Guaranteed Investment Contracts $1,136,289 $1,136,289
=======================
Participant Loans - interest
rates from 6.5% to 10.5% $3,458,357
===========
* 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, 1997
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 - Purchases
*New York State Electric
& Gas Corporation
Common Stock $6,820,831 $6,820,831
Company Stock Fund - Sales
*New York State Electric
& Gas Corporation $10,194,254 $10,194,254
Common Stock $12,376,312 12,376,312 $2,182,058
There were no category (i), (ii), or (iv) reportable transactions during 1997.
* Denotes a party-in-interest.
Consent of Independent Accountants
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 20, 1998, 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, 1997, which
report is included in this Annual Report on Form 11-K.
COOPERS & LYBRAND L.L.P.
Syracuse, New York
March 26, 1998