<PAGE> 1
File No. 70-8317
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3 to Form U-1
APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
THE COLUMBIA GAS SYSTEM, INC.
COLUMBIA LNG CORPORATION
20 Montchanin Road
Wilmington, DE 19807
-----------------------------------------------------------------
(Names of company or companies filing this statement
and addresses of principal executive offices)
L. J. Bainter, Treasurer
THE COLUMBIA GAS SYSTEM, INC.
J. W. Grossman, Treasurer
COLUMBIA LNG CORPORATION
20 Montchanin Road
Wilmington, DE 19807
-----------------------------------------------------------------
(Name and address of agents for service)
<PAGE> 2
2
The Application-Declaration as previously filed is hereby
amended to include the following information, exhibits and financial
statements.
Item 1. Description of Proposed Transaction.
Columbia LNG will receive credit as a capital contribution for up to
$1 million of development cost incurred prior to October 28, 1993, at the
Construction Capital Closing. However, the capital contribution will not be
used when calculating distributions from the Partnership. Columbia LNG will
also be reimbursed by the Partnership for up to $1 million of development costs
incurred after October 28, 1993, through the Construction Capital Closing. Any
expenditures over $1 million during this period will reduce Columbia LNG's
obligation to contribute up to $7 million of financing to the Partnership.
Columbia LNG will file annually with the Commission copies of
financial statements provided to Columbia LNG by the Partnership, which
statements will be filed in the U5S under Rule 16. Columbia LNG will also
include a narrative discussing the business and operations of the Partnership.
In the nominated case filed as Exhibit H-4 (confidential treatment
requested) in Amendment No. 1, all of the peaking
<PAGE> 3
3
revenues included are from customers who have signed precedent agreements.
Insert the following sentence after the first sentence on page 3 of
the Application-Declaration:
"PEPCO is not affiliated with Columbia."
Insert the following paragraph after the third paragraph on page 8 of
the Application-Declaration:
"One option, which has long been discussed in the published
financial statements of Columbia, is the possible abandonment of the
terminal by Columbia LNG pursuant to a settlement approved by the
FERC. Although this alternative might appear worth pursuing because
of the possibility of recovering a substantial portion of Columbia's
investment in the facility from Columbia Transmission, a close
examination reveals this alternative is not as attractive as
proceeding with the use of the Facility. The abandonment of the Cove
Point terminal would require FERC approval which could be a
time-consuming process. Pending such approval, Columbia would have to
continue to fund the cost of maintaining the Cove Point facilities at
a cost of approximately $4.1 million per year, exclusive of debt
service. Further, such abandonment could, in the course of
decommissioning, require the expenditure of up to $20 million by
Columbia LNG. If
<PAGE> 4
4
Columbia LNG were to proceed with abandonment, Columbia would be asked
to contribute these funds pending reimbursement to Columbia LNG from
Columbia Transmission under terms of any such FERC settlement.
Furthermore, with the bankruptcy of Columbia Transmission, it is
highly likely that significant litigation would be required before
Columbia LNG would recoup even a portion of these abandonment costs.
In the meantime, the opportunities which now present themselves to
Columbia LNG would be lost."
Insert the following sentence after the first sentence on page 10 of
the Application-Declaration:
"Included in the liabilities transferred to the Partnership by
Columbia LNG will be the liability of the Partnership as the new owner
of the terminal for the decommissioning of the terminal should
abandonment be pursued in the future. Exhibit H-6 details the assets
and liabilities transferred to the Partnership."
Delete the word "surplus" on the fifth line of page 15 of the
Application-Declaration and substitute the words "additional paid-in capital."
The Application-Declaration is amended to include the following:
<PAGE> 5
5
Item 6. Exhibits and Financial Statements.
(a) Exhibits
F Opinion of Counsel for Columbia and Columbia LNG.
H-2 Waiver under Columbia's Secured Revolving Credit Agreement
dated September 23, 1991, as amended.
H-6 Assets and Liabilities Contributed to the Partnership
(b) Financial Statements
(1) Columbia LNG Corporation
(a) Balance Sheet as of December 31, 1993 (actual and pro
forma)
(b) Statement of Capitalization as of December 31, 1993
(actual and pro forma)
(c) Statement of Income for the Twelve Months ended
December 31, 1993 (actual and pro forma)
(d) Statement of Common Stock Equity as of December 31,
1993 (actual and pro forma)
(e) Pro Forma Entries
<PAGE> 6
6
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused this
Application-Declaration to be signed on their behalf by the undersigned
thereunto duly authorized.
The signatures of the Applicants and of the persons signing on
their behalf are restricted to the information contained in this Declaration
which is pertinent to the application of the respective companies.
THE COLUMBIA GAS SYSTEM, INC.
Date: February 22, 1994 By: /s/ L. J. Bainter
---------------------------
L. J. Bainter
Treasurer
COLUMBIA LNG CORPORATION
Date: February 22, 1994 By: /s/ J. W. Grossman
----------------------------
J. W. Grossman
Treasurer
<PAGE> 7
UNAUDITED
(b)(3)(a)
Columbia LNG Corporation (1 of 2)
BALANCE SHEET
ACTUAL and PRO FORMA
As of December 31, 1993
($000)
<TABLE>
<CAPTION>
CLG Pro Forma CLG
Actual Entries Pro Forma
--------- ---------- -----------
<S> <C> <C> <C>
ASSETS
Property, Plant and Equipment
Gas utility and other plant, at original cost .... 199,485 - 199,485
Accumulated depreciation and depletion ........... (175,665) - (175,665)
--------- ---------- -----------
Net Gas Utility and Other Plant .................. 23,820 - 23,820
--------- ---------- -----------
Oil and gas producing properties, full cost method - - -
Accumulated depletion ........................... - - -
--------- ---------- -----------
Net Oil and Gas Producing Properties ............. - - -
--------- ---------- -----------
Net Property, Plant and Equipment .................. 23,820 - 23,820
--------- ---------- -----------
Current Assets
Cash and temporary cash investments .............. 5 7,000 7,005
Accounts receivable, net
Customers ...................................... 36 - 36
Affiliated ..................................... 4,384 - 4,384
Other .......................................... 175 - 175
Gas inventory .................................... - - -
Other inventories, at average cost ............... 1,551 - 1,551
Prepayments ...................................... 146 - 146
Other ............................................ - - -
--------- ---------- -----------
Total Current Assets ............................... 6,297 7,000 13,297
--------- ---------- -----------
Deferred Charges ................................... 10,316 - 10,316
--------- ---------- -----------
Total Assets ....................................... 40,433 7,000 47,433
========= ========== ===========
</TABLE>
<PAGE> 8
Columbia LNG Corporation (2 of 2)
BALANCE SHEET
ACTUAL and PRO FORMA
As of December 31, 1993
($000)
<TABLE>
<CAPTION>
CLG Pro Forma CLG
ACTUAL Entries Pro Forma
--------- ---------- -----------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Common Stock Equity
Common stock, par value $25 per share ............ 81,625 (71,360) 10,265
Additional paid in capital ....................... - 128,155 128,155
Retained earnings ................................ (120,928) - (120,928)
Reacquired capital stock ......................... - - -
Unearned employee compensation ................... - - -
--------- ---------- -----------
Total Common Stock Equity .......................... (39,303) 56,795 17,492
--------- ---------- -----------
Long-term debt ..................................... - - -
Installment promissory notes payable ............... 13,540 (13,540) -
Other intercompany notes and loans ................. - - -
--------- ---------- -----------
Total Capitalization ............................. (25,763) 43,255 17,492
--------- ---------- -----------
Current Liabilities
Debtor in possession financing ................... - - -
Debt obligations ................................. - - -
Accounts and drafts payable ...................... 83 - 83
Intercompany notes and loans - cur. maturity ..... 7,804 (7,804) -
Intercompany short term loans .................... 26,700 (26,700) -
Intercompany accounts payable .................... 1,772 (1,751) 21
Accrued taxes .................................... (2,751) - (2,751)
Accrued interest ................................. 719 - 719
Estimated rate refunds ........................... - - -
Estimated supplier obligations ................... - - -
Deferred income taxes - current .................. - - -
Other ............................................ 282 - 282
--------- ---------- -----------
Total Current Liabilities .......................... 34,609 (36,255) (1,646)
--------- ---------- -----------
Other Liabilities and Deferred Credits
Deferred income taxes, noncurrent ................ 7,064 - 7,064
Deferred investment tax credits .................. - - -
Postretirement benefits other than pensions ...... 1,275 - 1,275
Other ............................................ 23,248 - 23,248
--------- ---------- -----------
Total Other Liabilities and Deferred Credits ....... 31,587 - 31,587
--------- ---------- -----------
Total Capitalization and Liabilities ............... 40,433 7,000 47,433
========= ========== ===========
</TABLE>
<PAGE> 9
UNAUDITED
(b)(3)(b)
Columbia LNG Corporation
STATEMENT OF CAPITALIZATION
ACTUAL and PRO FORMA
As of December 31, 1993
($000)
<TABLE>
<CAPTION>
CLG Pro Forma CLG
Actual Entries Pro Forma
--------- ---------- -----------
<S> <C> <C> <C>
Common Stock Equity
Common stock, $25 par value,
authorized 10,270,000, outstanding 3,265,000
Shares .......................................... 81,625 (71,360) 10,265
Additional paid in capital ....................... - 128,155 128,155
Retained earnings ................................ (120,928) - (120,928)
Unearned employee compensation ................... - - -
--------- ---------- -----------
Total Common Stock Equity .......................... (39,303) 56,795 17,492
--------- ---------- -----------
Long-term debt
Debentures, net of unamortized discount less
premium ......................................... - - -
Installment promissory notes payable ............. 13,540 (13,540) -
Other intercompany notes and loans ............... - - -
--------- ---------- -----------
Total Long-Term Debt ............................... 13,540 (13,540) -
--------- ---------- -----------
Total Capitalization ............................... (25,763) 43,255 17,492
========= ========== ===========
</TABLE>
<PAGE> 10
UNAUDITED
(b)(3)(c)
Columbia LNG Corporation
STATEMENT OF INCOME
ACTUAL and PRO FORMA
Twelve Months Ended December 31, 1993
($000)
<TABLE>
<CAPTION>
CLG Pro Forma CLG
Actual Entries Pro Forma
--------- ---------- -----------
<S> <C> <C> <C>
Operating Revenues
Gas sales ........................................ - - -
Transportation ................................... 235 - 235
Other ............................................ - - -
--------- ---------- -----------
Total Operating Revenues ........................... 235 - 235
--------- ---------- -----------
Operating Expenses
Products purchased
Natural gas ................................... - - -
Other .......................................... - - -
Provision for gas supply charges ................. - - -
Operation ........................................ 46,173 - 46,173
Maintenance ...................................... 632 - 632
Depreciation and depletion ....................... 5,583 - 5,583
Other taxes ...................................... 1,116 - 1,116
--------- ---------- -----------
Total Operating Expenses ........................... 53,504 - 53,504
--------- ---------- -----------
Operating Loss ..................................... (53,269) - (53,269)
--------- ---------- -----------
Other Income (Deductions)
Interest income and other, net ................... (19,959) - (19,959)
Interest expense and related charges ............ (2,997) - (2,997)
Reorganization items, net ........................ - - -
--------- ---------- -----------
Total Other Income (Deductions) .................... (22,956) - (22,956)
--------- ---------- -----------
Loss before Income Taxes ........................... (76,225) - (76,225)
Income taxes ....................................... (25,910) - (25,910)
--------- ---------- -----------
Net Loss ........................................... (50,315) - (50,315)
========= ========== ===========
</TABLE>
<PAGE> 11
UNAUDITED
(b)(3)(d)
Columbia LNG Corporation
STATEMENTS OF COMMON STOCK EQUITY
ACTUAL and PRO FORMA
Twelve Months Ended December 31, 1993
($000)
<TABLE>
<CAPTION>
CLG Pro Forma CLG
Actual Entries Pro Forma
--------- ---------- -----------
<S> <C> <C> <C>
COMMON STOCK
Balance at October 1, 1992 ......................... 81,625 (78,360) 3,265
Common stock issued .............................. - 7,000 7,000
Leveraged employee stock ownership plan (LESOP) .. - - -
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... - - -
Public offering .................................. - - -
Other ............................................ - - -
--------- ---------- -----------
Balance at December 31, 1993 ....................... 81,625 (71,360) 10,265
--------- ---------- -----------
ADDITIONAL PAID IN CAPITAL
Balance at October 1, 1992 ......................... - 128,155 128,155
Common stock issued .............................. - - -
Leveraged employee stock ownership plan (LESOP) .. - - -
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... - - -
Public offering .................................. - - -
Other ............................................ - - -
--------- ---------- -----------
Balance at December 31, 1993 ....................... - 128,155 128,155
--------- ---------- -----------
RETAINED EARNINGS
Balance at October 1, 1992 ......................... (70,613) - (70,613)
Net loss ........................................... (50,315) - (50,315)
Common stock dividends ............................. - - -
Other .............................................. - - -
--------- ---------- -----------
Balance at December 31, 1993 ....................... (120,928) - (120,928)
--------- ---------- -----------
UNEARNED EMPLOYEE COMPENSATION
Balance at October 1, 1992 ......................... - - -
Adjustment ......................................... - - -
--------- ---------- -----------
Balance at December 31, 1993 ....................... - - -
--------- ---------- -----------
TOTAL COMMON STOCK EQUITY .......................... (39,303) 56,795 17,492
========= ========== ===========
</TABLE>
<PAGE> 12
UNAUDITED
(b)(3)(e)
Columbia LNG Corporation
BALANCE SHEET and INCOME STATEMENT
PRO FORMA ENTRIES
($000)
<TABLE>
<S> <C> <C> <C>
1. Installment promissory notes payable 13,540
Intercompany notes and loans - cur. maturity 7,804
Intercompany short term loans 26,700
Intercompany accounts payable 1,751
Additional paid in capital 49,795
To record the Corporation's capital contribution
to Columbia LNG of installment promissory notes,
short term loans and accrued interest on the
promissory notes and short term loans issued by
Columbia LNG and held by the Corporation.
2. Common stock
Additional paid in capital 78,360
78,360
To reduce Columbia LNG's common stock par value
from $25 per share to $1 per share and to increase
additional paid in capital by $24 per share.
3. Cash and temporary cash investments 7,000
Common stock 7,000
To record the issuance of 7,000,000 shares of
$1 par value common stock.
</TABLE>
<PAGE> 13
EXHIBIT INDEX
(a) Exhibits
F Opinion of Counsel for Columbia and Columbia LNG.
H-2 Waiver under Columbia's Secured Revolving
Credit Agreement dated September 23, 1991, as
amended.
H-6 Assets and Liabilities Contributed to the
Partnership
<PAGE> 14
EXHIBIT F
February 21, 1994
U.S. Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
Re: The Columbia Gas System, Inc., et al.
File No. 70-8317
-------------------------------------
As Counsel for The Columbia Gas System, Inc. ("Columbia"), a Delaware
corporation and a holding company registered under the Public Utility Holding
Company Act of 1935 (the "Act"), and at its request, I deliver to you this
opinion for filing as Exhibit F to the Joint Application-Declaration as
previously amended by Amendment Nos. 1 and 2 and as now amended by Amendment
No. 3 (the latter being filed simultaneously herewith) (collectively referred
to as the "Application-Declaration") of Columbia and Columbia LNG Corporation
("CLG") relating to the proposed Transactions described therein.
In connection with the foregoing, I have examined and relied upon the
statements and representations set forth in originals or copies of the
following documents:
(1) the Application-Declaration;
(2) the Restated Certificates of Incorporation of Columbia and CLG;
(3) the Orders of the U. S. Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court") dated August 2, 1991
(authorizing Columbia to acquire, in the ordinary course and
in accordance with its pre-petition practice as approved by
orders of this Commission, common stock and notes issued by
its subsidiaries), and January 12, 1994, (authorizing Columbia
to recapitalize CLG upon the terms set forth in the
Application-Declaration and upon this Commission's approval);
and
(4) such other documents, records and matters of law as I deemed
necessary or appropriate to enable me to render this opinion.
Based upon the foregoing and subject to the exceptions,
qualifications, assumptions, limitations and premises set forth herein, I am of
the opinion that:
<PAGE> 15
U.S. Securities and Exchange Commission
February 21, 1994
Page 15
(1) CLG and the company formed to be a subsidiary of CLG and a
general partner in Cove Point LNG Limited partnership have
been duly incorporated and are validly existing in good
standing as corporations under the laws of the State of
Delaware;
(2) no further orders of the Bankruptcy Court are necessary to
effectuate the transactions contemplated by the Application-
Declaration;
(3) all state laws applicable to the proposed transactions will
have been complied with;
(4) the common stock to be issued by CLG and by CLG's subsidiary
as contemplated by the Application-Declaration will be fully
paid and nonassessable, and Columbia and CLG as the respective
holders thereof will be entitled to the rights and privileges
appertaining thereto as set forth in the Restated Certificate
of Incorporation of CLG; and
(5) the consummation of the proposed transactions will not violate
the legal rights of the holders of any securities issued by
Columbia, CLG or by any associate company thereof.
The opinions stated in paragraphs 3, 4 and 5 above are based upon the
assumptions that (i) the proposed transactions contemplated by the
Application-Declaration will be consummated in accordance with the express
provisions of the Application- Declaration and (ii) all taxes and government
charges in connection with the proposed transactions will be paid.
The opinions expressed herein are rendered solely for your benefit in
connection with the proposed transactions and may not be relied upon by any
other person or entity for any other purpose without my prior written
permission.
I hereby consent to the filing of this opinion as an Exhibit to the
Application-Declaration.
Very truly yours,
/S/ JOYCE KORIA HAYES
Joyce Koria Hayes
Columbia Gas System Service
Corporation
Associate General Counsel and
Assistant Secretary
<PAGE> 16
Exhibit H-2
WAIVER
November 22, 1993
The Banks Parties to the Credit
Agreement Referred to Below
c/o Chemical Bank (as successor by
merger to Manufacturer's Hanover
Trust Company), as Agent
270 Park Avenue
New York, NY 10017
Attention: Thomas L. James
Ladies and Gentlemen:
Reference is hereby made to the Secured Revolving Credit Agreement,
dated as of September 23, 1991 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among The Columbia Gas System, Inc.,
a Delaware corporation and debtor-in- possession in proceedings under Chapter 11
of the Bankruptcy Code (the "Borrower"), the financial institutions party
thereto (the "Banks") and Chemical Bank (as successor by merger to Manufacturers
Hanover Trust Company), as agent for the Banks (in such capacity, the "Agent").
Unless otherwise defined herein, capitalized terms defined in the Credit
Agreement are used herein as so defined.
We hereby request that the Banks agree to waive, and by their
execution and delivery of this Waiver the Banks so waive, the provisions of
Section 6.4 of the Credit Agreement to the extent and only to the extent
necessary (i) to permit Columbia LNG to acquire (A) a partnership interest in
Cove Point LNG Company, L.P. ("Cove Point LP"), a joint venture partnership
formed to own and operate natural gas storage and terminating facilities at
Cove Point, Maryland (the "Facilities"), and (B) an equity interest in one or
more newly formed Subsidiaries of Columbia LNG (collectively, "New LNG Sub")
formed for the purpose of making Investments in Cove Point LP, in exchange for
a contribution by Columbia LNG of certain assets of Columbia LNG, and (ii) to
permit (A) the Borrower to make additional equity Investments in Columbia LNG,
(B) Columbia LNG to make additional Investments in New Sub LNG and Cove Point
LP and (C) New Sub LNG to make additional Investments in Cove Point, L.P. in
each case for the purpose of financing the operations of Cove Point LP,
including, without limitation, recommissioning the Facilities, and provided
that the amount of all such additional Investments by the Borrower or any such
Subsidiary shall not exceed $7,000,000 in the aggregate.
This Waiver may be executed in one or more counterparts, each
of which shall be an original, but all of which together shall constitute one
agreement.
<PAGE> 17
2
This Waiver shall be governed by, and construed in accordance
with the law of the State of New York.
Each Bank is requested to evidence its agreement to the above
requested waiver by executing a counterpart of this Waiver in the space
provided below. This Waiver shall become effective as of the date first above
written when and if executed and delivered by the Required Banks.
Very truly yours,
THE COLUMBIA GAS SYSTEM, INC.
By: //s// L. J. Bainter
--------------------------
Title: Treasurer
AGREED:
CHEMICAL BANK, as a Bank
and as Agent
By: //s// Thomas James
--------------------------
Title: Managing Director
BANK OF MONTREAL
By: //s// James R. Easter
--------------------------
Title: Account Manager
BANQUE NATIONALE DE PARIS
By: //s// Karen Wlodkowski
--------------------------
Title: Vice President
By: //s// Christopher Kritz
--------------------------
Title: Vice President
BANQUE PARIBAS
By: //s// Charles Thompson
---------------------------
Title: Vice President
By: //s// Kareem Rasheed
---------------------------
Title: Assistant Treasurer
<PAGE> 18
3
BERLINER HANDELS-UND FRANKFURTER
BANK
By: //s// Evon Contos
--------------------------
Title: Vice President
By: //s// Paul Tavers
--------------------------
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
(NEW YORK BRANCH)
By: //s// Mark O'Connor
--------------------------
Title: Vice President
CONTINENTAL BANK
By: //s// Lew W. Solunch
--------------------------
Title: Managing Director
CREDIT LYONNAIS, CAYMAN ISLAND
BRANCH
By: --------------------------
Title:
GREAT AMERICAN INSURANCE COMPANY
By: --------------------------
Title:
J. P. MORGAN DELAWARE
By: //s// Phillip S. Detjens
--------------------------
Title: Vice President
MELLON BANK, N.A.
By: //s// Carol Viehe
--------------------------
Title: Vice President
NATIONAL CITY BANK
By: //s// James R. Myers
--------------------------
Title: Account Officer
<PAGE> 19
4
PNC BANK, N.A. (formerly known as
Pittsburgh National Bank)
By: //s// Paul Fest
--------------------------
Title: Vice President
SOCIETE GENERALE
By: //s// John J. Wagner
--------------------------
Title: Vice President
<PAGE> 20
Exhibit H-6
COLUMBIA LNG CORPORATION
Assets and Liabilities Contributed to the Partnership
Basis: December 31, 1993
<TABLE>
<CAPTION>
Assets Liabilities
$ $
<S> <C> <C>
Net Utility Plant 23,819,916
Materials and Supplies Inventory 1,551,445
Deferred Charges 1,000,000
Other Liabilities (Estimated
Decommissioning)
</TABLE> 20,000,000
