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As filed with the United States Securities and Exchange Commission
on March 3, 2000.
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended DECEMBER 31, 1999
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _____ to _____
COLUMBIA ENERGY GROUP
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(Exact name of registrant as specified in its charter)
Delaware 13-1594808
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(State or other Jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
13880 Dulles Corner Lane, Herndon, VA 20171
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (703) 561-6000
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Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
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Common Stock, $0.01 Par Value .....................................................................New York Stock Exchange
Debentures
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6.39% Series A due November 28, 2000
6.61% Series B due November 28, 2002
6.80% Series C due November 28, 2005
7.05% Series D due November 28, 2007
7.32% Series E due November 28, 2010
7.42% Series F due November 28, 2015
7.62% Series G due November 28, 2025
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the proceeding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes [X] or No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the outstanding common shares of the Registrant
held by nonaffiliates as of January 31, 2000, was $5,231,062,000. For purposes
of the foregoing calculation, all directors and/or officers have been deemed to
be affiliates, but the registrant disclaims that any of such directors and/or
officers is an affiliate.
The number of shares outstanding of each class of common stock as of January 31,
2000, was: Common Stock $0.01 Par Value: 81,304,961 shares outstanding.
Documents Incorporated by Reference
Part III of this report incorporates by reference specific portions of the
Registrant's Proxy Statement relating to the 2000 Annual Meeting of
Stockholders.
Columbia Energy Group's Annual Report on Form 10-K as filed on March 2, 2000,
reflected a typographical error on page 17 in the first line of the third
paragraph. Net cash from continuing operations for 1998 is $845.7 million, which
is a $271.2 million increase over 1997. The Form 10-K as originally filed
reflected net cash from operations for 1998 of $860.5 million and an increase of
$286 million over the year earlier.
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CONTENTS
Page
Part I No.
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Item 1. Business................................................................... 3
Item 2. Properties................................................................. 7
Item 3. Legal Proceedings.......................................................... 9
Item 4. Submission of Matters to a Vote of Security Holders........................ 11
Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters.. 11
Item 6. Selected Financial Data.................................................... 12
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations...................................................... 14
Item 8. Financial Statements and Supplementary Data................................ 39
Item 9. Change In and Disagreements with Accountants on Accounting and
Financial Disclosure....................................................... 71
Part III
Item 10. Directors and Executive Officers of the Registrant......................... 71
Item 11. Executive Compensation..................................................... 71
Item 12. Security Ownership of Certain Beneficial Owners and Management............. 71
Item 13. Certain Relationships and Related Transactions............................. 71
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K............ 72
Undertaking made in Connection with 1933 Act Compliance on Form S-8................. 72
Signatures.......................................................................... 73
Exhibits............................................................................ 74
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
LIQUIDITY AND CAPITAL RESOURCES
A significant portion of Columbia's operations, most notably in the distribution
segment, is subject to seasonal fluctuations in cash flow. During the heating
season, which is primarily from November through March, cash receipts from sales
and transportation services typically exceed cash requirements. Conversely,
during the remainder of the year, cash on hand, together with external
short-term and long-term financing, is used to purchase gas to place in storage
for heating season deliveries, perform necessary maintenance of facilities, make
capital improvements in plant and expand service into new areas.
Net cash from continuing operations in 1999 of $825.8 million reflected a
decrease of $19.9 million from 1998 due primarily to normal working capital
changes.
Net cash from continuing operations for 1998 was $845.7 million, an increase of
$271.2 million over 1997. The increase primarily reflected higher prepayments
received for natural gas to be delivered over several years partially offset by
a decrease in the overrecovery of gas costs by the distribution segment as well
as the effect of warm weather in 1998. The decrease in the overrecovery position
reflects higher gas prices in 1998 compared to the same period in 1997. The
recovery of gas costs in the distribution segment's rates is provided for under
the current regulatory process.
Columbia satisfies its liquidity requirements primarily through internally
generated funds and from the sale of commercial paper, which is supported by two
unsecured bank revolving credit facilities that total $1.35 billion (Credit
Facilities). The Credit Facilities consist of a $450 million 364-day revolving
credit facility, with a one-year term loan option, that expires in March 2000
and a $900 million five-year revolving credit facility that expires in March
2003 and provides for the issuance of up to $300 million of letters of credit.
Columbia is currently negotiating the replacement of the 364-day bank facility
with a bank facility substantially similar in terms. Columbia also utilizes
other borrowing arrangements from time-to-time. As of year-end 1999, Columbia
had no borrowings under the Credit Facilities. See Note 12 in the Notes to
Consolidated Financial Statements for additional information.
Interest rates on borrowings under the Credit Facilities are based upon the
London Interbank Offered Rate, Certificate of Deposit rates or other short-term
interest rates. In addition, the 364-day facility has a utilization fee if
borrowings exceed a certain level. The interest rate margins and facility fee on
the commitment amounts are based on Columbia's public debt ratings. In 1998,
Moody's Investors Service, Inc. (Moody's) and Fitch Investors Service (Fitch)
upgraded their rating of Columbia's long-term debt to A3 and A, respectively.
Columbia's long-term debt rating is BBB+ by Standard & Poor's Ratings Group
(S&P). Columbia's long-term debt ratings are currently under review for a
possible change by Moody's and S&P. Higher debt ratings result in lower facility
fees and interest rate margins on borrowings. Columbia's commercial paper
ratings are F-1 by Fitch, P-2 by Moody's and A-2 by S&P.
As of year-end 1999, Columbia had approximately $133.7 million of letters of
credit outstanding, of which approximately $54.7 million was issued under the
Credit Facilities. At the end of 1999, Columbia had $340.5 million of commercial
paper outstanding under its $850 million commercial paper program and $125
million of notes payable.
During 1998, Columbia entered into fixed-to-floating interest rate swap
agreements to modify the interest characteristics of $300 million of its
outstanding long-term debt. As a result of these transactions, that portion of
Columbia's long-term debt is now subject to fluctuations in interest rates. This
allows Columbia to benefit from a lower interest rate environment. In order to
maintain a balance between fixed and floating interest rates, Columbia is
targeting average floating rate debt exposure of 10-20% of its outstanding
long-term debt.
Columbia has an effective shelf registration statement on file with the
Securities and Exchange Commission for the issuance of up to $1 billion in
aggregate of debentures, common stock or preferred stock in one or more series.
Currently, Columbia has $750 million available under the shelf registration.
Management believes that its sources of funding are sufficient to meet
short-term and long-term liquidity needs of Columbia.
Common Stock Repurchase Program
At its February 1999 meeting, Columbia's Board of Directors (Board) authorized
the purchase of up to $100 million of Columbia's common stock through February
29, 2000, in the open market or otherwise. In July 1999, Columbia's Board
authorized the purchase of an additional $400 million of common stock through
July 14, 2000. In October 1999, the program was suspended pending consideration
of strategic alternatives. The source of funds for
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Columbia Energy Group
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(Registrant)
Date: March 3, 2000 By: /s/ Jeffrey W. Grossman
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Jeffrey W. Grossman
Vice President and Controller
(Principal Accounting Officer
and Duly Authorized Officer)