-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pe79EHcLh/WnzAyytB4KcZb/mknaX5CaxtKJbfN9ZniKecLKrk2oc86JBFVGiOzB Y/HPQePWgZEVBF+ef2Sh7g== /in/edgar/work/20000628/0000950132-00-000477/0000950132-00-000477.txt : 20000920 0000950132-00-000477.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950132-00-000477 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOL ENERGY INC CENTRAL INDEX KEY: 0001070412 STANDARD INDUSTRIAL CLASSIFICATION: [1220 ] IRS NUMBER: 510337383 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-14901 FILM NUMBER: 663782 BUSINESS ADDRESS: STREET 1: C/O CONSOL INC STREET 2: 1800 WASHINGTON RD CITY: PITTSBURGH STATE: PA ZIP: 15241 MAIL ADDRESS: STREET 1: CONSOL INC STREET 2: 1800 WASHINGTON RD CITY: PITTSBURGH STATE: PA ZIP: 15241 11-K 1 0001.txt FORM 11-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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, 1999 COMMISSION FILE NUMBER 1-815 CONSOL INC. INVESTMENT PLAN FOR SALARIED EMPLOYEES CONSOL PLAZA 1800 WASHINGTON ROAD PITTSBURGH, PENNSYLVANIA 15241 (FULL TITLE OF THE PLAN) CONSOL ENERGY INC. 300 DELAWARE AVENUE SUITE 567 WILMINGTON, DELAWARE 19801 ================================================================================ Audited Financial Statements CONSOL Inc. Investment Plan for Salaried Employees Years ended December 31, 1999 and 1998 with Report of Independent Auditors Audited Financial Statements CONSOL Inc. Investment Plan for Salaried Employees Years ended December 31, 1999 and 1998 with Report of Independent Auditors Supplemental Schedule CONSOL Inc. Investment Plan for Salaried Employees Audited Financial Statements Years ended December 31, 1999 and 1998 Contents Report of Independent Auditors................................... 1 Audited Financial Statements Statements of Net Assets Available for Benefits.................. 2 Statement of Changes in Net Assets Available for Benefits........ 3 Notes to Financial Statements.................................... 4 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year............................... 11
Report of Independent Auditors To the Investment Plan Committee CONSOL Inc. We have audited the accompanying statements of net assets available for benefits of the CONSOL Inc. Investment Plan for Salaried Employees as of December 31, 1999 and 1998, and the related statement of changes in net assets available for benefits for the year ended December 31, 1999. 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 auditing standards generally accepted in the United States. 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 Plan at December 31, 1999 and 1998, and the changes in its net assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes as of December 31, 1999 is presented for purposes of additional analysis and is not a required part of the financial statements but is 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. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. June 9, 2000 -1- CONSOL Inc. Investment Plan for Salaried Employees Statements of Net Assets Available for Benefits (Dollars in Thousands) December 31 1999 1998 -------------------------- Investment at contract value: Stable Value Fund $ 550,302 $ 547,742 Investments at fair value: Noninterest-bearing cash and cash equivalents 323 - Interests in registered investment companies 175,890 104,911 Barclays 3-Way Fund 24,443 24,244 Aggressive Asset Allocation Portfolio 1,204 1,222 Conservative Asset Allocation Portfolio 225 211 Moderate Asset Allocation Portfolio 939 744 Merrill Lynch Small Cap Index Trust 806 734 Merrill Lynch International Index Trust 768 695 Merrill Lynch Equity Index Trust 22,206 20,574 E.I. DuPont de Nemours & Company common stock, 5,963,098 shares 392,819 348,109 CONSOL Stock Fund 8,108 - Daimler Chrysler common stock 332 517 -------------------------- Total investments 1,178,365 1,049,703 Participant loans receivable 20,689 21,111 Employer and employee contributions receivable 2,530 3,966 Pending Settlement Fund 61 - -------------------------- Net assets available for benefits $1,201,645 $1,074,780 ========================== See accompanying notes. -2- CONSOL Inc. Investment Plan for Salaried Employees Statement of Changes in Net Assets Available for Benefits Year ended December 31, 1999 (Dollars in Thousands) Contributions: Employer contributions $ 11,445 Employee contributions 20,165 Rollover contributions 10,582 ---------- Total contributions 42,192 Investment income (dividends and interest) 23,355 Net realized and unrealized appreciation in fair value of investments 168,240 ---------- Total additions 233,787 Benefits paid to participants 108,494 Other 276 ---------- Total deductions 108,770 Net transfers to the Plan 1,848 ---------- Net additions 126,865 Net assets available for benefits at beginning of year 1,074,780 ---------- Net assets available for benefits at end of year $1,201,645 ========== See accompanying notes. -3- CONSOL Inc. Investment Plan for Salaried Employees Notes to Financial Statements December 31, 1999 (Dollars in Thousands) 1. Description of the Plan The following description of the COSOL Inc. Investment Plan for Salaried Employees (the Plan) provides only general information. Participants should refer to the summary plan description for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan established in 1953. Salaried, operations and maintenance and, in certain circumstances, production and maintenance employees of CONSOL Inc. (CONSOL) and participating employers are eligible to participate in the Plan on the first of the month following regular full-time employment. In addition, temporary employees are eligible to participate in the Plan upon completion of a period of 12 consecutive months, commencing upon their employment date or anniversary date thereof, during which the employee completes 1,000 or more hours of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). On April 29, 1999, CONSOL Energy, Inc. underwent an initial public offering. In connection with the public offering, the Plan offers CONSOL Energy, Inc. common stock (CONSOL Stock Fund) as an investment option. Participants of the Plan were able to transfer funds into the CONSOL Stock Fund commencing in June 1999 and elect to have contributions allocated to this fund in July 1999. In addition, participants are no longer able to purchase E.I. DuPont de Nemours & Company common stock under the Plan. Contributions Each year participants may, with certain restrictions, contribute up to 19% of monthly base pay to the Plan exclusive of supplemental make-up deposits. CONSOL and participating employers match these contributions, dollar for dollar, up to 6% of base pay (as defined by the Plan). Contributions may be made with before- tax or after-tax dollars. In addition, subject to certain limitations, a participant is allowed to make lump-sum savings deposits in cash to the Plan. -4- CONSOL Inc. Investment Plan for Salaried Employees Notes to Financial Statements (continued) 1. Description of the Plan (continued) Participant Accounts Each participant's account is credited with the participant's contributions and allocations of the Company's contributions and plan earnings and is charged with an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. Forfeited balances of terminated participants' nonvested accounts are used to reduce future company contributions. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. Vesting Plan participants generally become vested upon completion of five years of participation in the Plan or five cumulative years of service. Participants are always 100% vested in their deposits and in the earnings on both their deposits and the Company's contributions. Participant Loans Participants may borrow up to one-half of their nonforfeitable account balances subject to certain minimum and maximum loan limitations. Such loans are repayable over periods of 12 to 60 months (120 months maximum if for the purchase of a principal residence) and bear an interest rate equal to the average rate charged by selected major banks for secured personal loans. Principal and interest are paid ratably through payroll deductions. Payment of Benefits Participants who retire from active service may elect to withdraw their entire account in a lump-sum, to defer withdrawal until April 1 of the calendar year following the year in which the participant attains age 70 1/2, or to elect an option to have their account distributed over a period of not less than two years or more than a period which would pay the account balance during the employee's actuarial life in either a fixed or variable amount. Before-tax deposits may be withdrawn only in the event of an employee's retirement, death, termination, attainment of age 59 1/2 or defined hardship. -5- CONSOL Inc. Investment Plan for Salaried Employees Notes to Financial Statements (continued) 1. Description of the Plan (continued) Plan Termination Although it has not expressed any intent to do so, CONSOL has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their accounts. 2. Summary of Significant Accounting Policies Investment Valuation and Income Recognition For financial reporting purposes, the assets of the Plan are reflected on the accrual basis of accounting. The underlying assets of the Stable Value Fund consist primarily of guaranteed investment contracts (GIC), separate account portfolios (SAP), and synthetic guaranteed investment contracts (SYN) and are fully benefit responsive. The Stable Value Fund is stated at cost plus accrued interest, using the contracted interest rates applied to the daily account balances, and is provided by the Plan's trustee. The contract value of the investment contracts approximates market value. Investments in common stock funds and interests in registered investment companies are stated at fair value based on publicly quoted market prices. Investments in the Merrill Lynch Small Cap Index Trust, Merrill Lynch International Index Trust, Merrill Lynch Equity Index Trust, Barclays 3-Way Fund, and Aggressive Asset Allocation, Conservative Asset Allocation and Moderate Asset Allocation Portfolios are stated at the fair value of all underlying assets as reported by the applicable custodian. The unit value or price of all investments reflects the dollar amount at which participants' accounts are valued at the end of the period reported. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Gains and losses on the sale of the E.I. DuPont de Nemours & Company and CONSOL Energy, Inc. common stock are based on average cost of the securities sold and are recognized on the trade date. Brokerage commissions and Securities and Exchange Commission fees in connection with the sale of E.I. DuPont de Nemours & Company common stock, CONSOL Energy, Inc. common stock and Daimler Chrysler common stock are added to the cost thereof or deducted from the sales proceeds derived therefrom. -6- CONSOL Inc. Investment Plan for Salaried Employees Notes to Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. Investments The following presents investments that represent 5% or more of the Plan's net assets. December 31 1999 1998 --------------------- E.I. DuPont de Nemours & Company common stock, 5,963,098 and 6,541,774 shares, respectively $392,819 $348,109 Prudential Insurance Company of America--8.38%, 7/01/2001 59,179 83,448 Fidelity Investments Magellan Fund 449,480 and 442,684 shares, respectively 61,413 53,485 During 1999, the Plan's investments (including investments bought, sold, as well as held during the year) appreciated in fair value by $168,240, as follows:
Net Appreciation (Depreciation) in Fair Value During Fair Value at Year End of Year -------------------------------------- Year ended December 31, 1999: Fair value as determined by quoted market price: Interests in registered investment companies $ 29,005 $ 175,890 Common stock: CONSOL Stock Fund (1,477) 8,108 Other 96,275 393,151 Stable Value Fund 37,327 550,302 Fair value reported by applicable custodian 7,110 50,591 ---------------------------------------- $168,240 $1,178,042 ========================================
-7- CONSOL Inc. Investment Plan for Salaried Employees Notes to Financial Statements (continued) 3. Investments (continued) As of March 31, 1999, the Stable Value Fund is considered to be a nonpooled separate account held by the Plan. Prior to this date, the Stable Value Fund was jointly owned by the Plan and the Thrift Plan for Employees of Conoco Inc., a wholly owned subsidiary of DuPont. As of December 31, 1998, the balance of all investment contracts was allocated to the two plans by Merrill Lynch based on the relationship of the Plan's Stable Value Fund participant balances to total Stable Value Fund participant balances. The investment contracts are entered into based on an evaluation of the credit risk of the contract issuers and/or third party guarantors. Collateral is generally not provided. The nature of the Stable Value Fund is consistent as of December 31, 1999 and 1998. The composition of assets of the Stable Value Fund as of December 31, 1999 and 1998 are as follows: 1999 1998 ------------------------ Investment contracts $548,692 $537,917 Short-term investments 1,610 9,825 ------------------------ $550,302 $547,742 ======================== The composition of changes in net assets of the Stable Value Fund as of December 31, 1999 is as follows: Employer contributions $ 9,643 Employee contributions 5,803 Rollover contributions 9,184 -------- Total contributions 24,630 Investment income 38,216 Benefits paid to participants (73,521) Net loan activity (133) Interfund transfers 13,368 -------- Net additions 2,560 Net assets as of the beginning of the year 547,742 -------- Net assets as of the end of the year $550,302 ======== -8- CONSOL Inc. Investment Plan for Salaried Employees Notes to Financial Statements (continued) 3. Investments (continued) The aggregate crediting rates for all contracts as of December 31, 1999 was 7%. The crediting rates for SAP and SYN contracts are reset annually and are based on the market value of the underlying portfolio of assets backing these contracts. Inputs used to determine the crediting rate include each contract's portfolio market value, current yield-to-maturity, duration (i.e., weighted average life), and market value relative to contract value. The average yield of the Stable Value Fund was approximately 7% in 1999. Certain financial information as of December 31, 1998 has been reclassified to conform with the financial statement presentation as of and for the year ended December 31, 1999. These reclassifications did not have an impact on the net assets available for benefits. Participants investing in the Stable Value Fund, Barclays 3-Way Fund, Merrill Lynch Equity Index Trust, Merrill Lynch Small Cap Index Trust, Merrill Lynch International Index Trust, and Aggressive Asset Allocation, Conservative Asset Allocation and Moderate Asset Allocation Portfolios are assigned units at the time of investment based on the net asset value per unit. 4. Income Tax Status The Plan has received a determination letter from the Internal Revenue Service (IRS) dated November 18, 1994, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan was amended subsequent to the IRS determination letter. Therefore, the amendments are not covered by the determination letter. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax- exempt. -9- CONSOL Inc. Investment Plan for Salaried Employees Notes to Financial Statements (continued) 5. Reconciliation of Financial Statements to Form 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
December 31 1999 1998 ------------------------------ Net assets available for benefits per the financial Statements $1,201,645 $1,074,780 Includes amounts allocated to withdrawing participants reported as asset reductions per the financial statements 318 76 ------------------------------ Total assets per the Form 5500 $1,201,963 $1,074,856 ==============================
Amounts payable to withdrawing participants are recorded on the Form 5500 as a liability for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date. For financial statement purposes, the amounts were deducted from the respective assets. 6. Transactions with Parties-in-Interest Plan investments in the Merrill Lynch Small Cap Index Trust, the Merrill Lynch International Index Trust and the Merrill Lynch Equity Index Trust are managed by Merrill Lynch. Merrill Lynch is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Trustee and investment fees paid during 1999 were based upon customary and reasonable rates for such services. One of the investment vehicles available to employees, the CONSOL Stock Fund, contains stock of CONSOL. -10- CONSOL Inc. Investment Plan for Salaried Employees EIN 25-1671742 Plan No. 002 Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year December 31, 1999 (Dollars in Thousands)
Identity of Issue, Borrower, Number of Lessor or Similar Party Description of Investment Shares/Units Current Value - ------------------------------------------------------------------------------------------------------------- CONSOL Stock Fund Common Stock 810,760 $ 8,108 ====================== E.I. DuPont de Nemours & Company Common Stock 5,963,098 $392,819 ====================== Daimler Chrysler Common Stock 4,252 $ 332 ====================== Merrill Lynch* Global Holdings Fund CL A 196,467 $ 2,872 Capital Fund CL A 155,492 4,987 Basic Value Fund CL A 277,765 10,597 Growth Fund CL A 61,089 1,675 ----------------------- 20,131 Janus Investments Enterprise Fund 250,826 19,231 Mercury Fund 889,579 38,972 ---------------------- 58,203 Fidelity Investments Fidelity Fund PV1 121,417 5,173 Equity Income Fund 20,422 1,092 Magellan Fund 449,480 61,413 Low Priced Stock Fund 95,714 2,167 ---------------------- Growth & Income Fund 171,487 8,087 ---------------------- 77,932
-11- Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year (continued)
Identity of Issue, Borrower, Number of Lessor or Similar Party Description of Investment Shares/Units Current Value - -------------------------------------------------------------------------------------------------------------- Franklin Value Investors Trust Small Cap Growth Fund CL 1 135,709 5,989 Balance Sheet 17,097 521 Custodian Fund Inc. 8,437 291 ----------------- 6,801 AIM Value Fund 89,607 4,376 Equity Constellation Fund CL A 47,955 1,943 ----------------- 6,319 Franklin Templeton Growth Fund 53,814 1,074 Foreign Fund 198,841 2,231 ----------------- 3,305 MFS Investment Management Total Return Fund 31,337 435 Research Fund 49,949 1,441 ----------------- 1,876 Hotchkis and Wiley International Fund 50,109 1,323 ----------------- Interests in registered investment companies $175,890 ================= Monumental Life Ins. Co. SYNGIC, 6.87%, 1/01/2004 31,726,352 $ 31,726
-12- Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year (continued)
Identity of Issue, Borrower, Number of Lessor or Similar Party Description of Investment Shares/Units Current Value - ------------------------------------------------------------------------------------------------------------- Aetna Life Insurance Co. GIC, 9.89%, 6/01/2000 4,182,753 4,183 GIC, 6.45%, 04/01/2025 46,976,338 46,976 Bankers' Trust SYNGIC, 7.11%, 12/31/2025 28,030,714 28,031 SYNGIC, 5.93%, 12/01/2002 34,831,312 34,831 CDC Investment Mgmt. Corp. SYNGIC, 6.95%, 10/01/2002 29,733,884 29,734 Deutsche Bank SYNGIC, 6.93%, 12/31/2025 37,400,236 37,400 SYNGIC, 5.73%, 12/31/2025 39,638,537 39,639 Metropolitan Life Ins. Co. SAGIC, 7.30%, 12/31/2025 33,798,930 33,799 Monumental Life Ins. Co. GIC, 6.35%, 12/31/2025 47,365,614 47,366 Prudential Insurance Company of America GIC, 8.38%, 7/01/2001 59,179,594 59,179 The Travelers Ins. Co. GIC, 9.66%, 6/01/2000 3,930,130 3,930 Transamerica Life Ins. GIC, 7.10%, 9/01/2006 36,830,780 36,831 Citibank SYNGIC, 7.42%, 8/31/2001 9,092,633 9,093 John Hancock Mutual Life GIC, 6.01%, 7/01/2003 17,081,519 17,082 Union Bank of Switzerland SYNGIC, 6.73%, 1/01/2025 42,529,445 42,529 J.P. Morgan SYNGIC, 5.76%, 12/31/2002 39,231,984 39,232 Short-term investments (including Merrill Lynch Government Fund) 6.01%, 12/31/2025 8,740,757 8,741 ------------------ Total Stable Value Fund $550,302 ==================
-13- Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year (continued)
Identity of Issue, Borrower, Number of Lessor or Similar Party Description of Investment Shares/Units Current Value - -------------------------------------------------------------------------------------------------------------- Aggressive Asset Allocation Portfolio 80,991 $ 1,204 =============== Conservative Asset Allocation Portfolio 17,273 $ 225 =============== Moderate Asset Allocation Portfolio 69,380 $ 939 =============== Merrill Lynch* Small Cap Index Trust 61,724 $ 806 =============== International Index Trust 49,224 $ 768 =============== Equity Index Trust 218,306 $22,206 =============== BZW Global Investors Barclays 3-Way Fund 870,350 $24,443 =============== Participant loans* 7.75% to 9% $20,689 =============== *Indicates parties-in-interest.
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