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FORM 8-K
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
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Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event Reported) February 14, 1994
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THE COLUMBIA GAS SYSTEM, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-1098 13--1594808
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(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
20 Montchanin Road, Wilmington, Delaware 19807
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(Address of principal executive offices)
Registrant's telephone number, including area code (302) 429-5000
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Item 5. Other Events
Information contained in a News Release dated
January 10, 1994, is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
c. Exhibits
22. News Release dated February 10, 1993, published by the
Registrant (filed herewith).
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Contacts: Media - W. R. McLaughlin (302) 429-5443
H. W. Chaddock (302) 429-5261
Analysts - T. L. Hughes (302) 429-5363
K. P. Murphy (302) 429-5471
FOR IMMEDIATE RELEASE February 10, 1994
COLUMBIA SYSTEM REPORTS SUBSTANTIALLY HIGHER NET INCOME FOR 1993
WILMINGTON, DEL. -- The Columbia Gas System, Inc. (NYSE:CG),
today announced net income for 1993 of $152.2 million, or $3.01 per share, as
compared to net income of $51.2 million, or $1.01 per share in 1992.
In the fourth quarter, the company reported net income of
$69.4 million, or $1.37 per share, in 1993, as compared to $87.8 million, or
$1.73, per share in the same period in 1992. The decrease was principally due
to unusual charges.
Columbia System Chairman John H. Croom said 1993's earnings
benefitted from increased revenue generated by a new rate structure for the
transmission companies, colder temperatures, increased oil and gas production
and higher wellhead prices for natural gas. These items were partially offset
by the negative impact of a $45 million after tax accrual for work required to
investigate, characterize and, if necessary, remediate environmental sites, a
$44.3 million after tax settlement with the IRS for the years 1983-1990, a
$37.9 million after tax writedown in its investment in the Cove Point LNG
facility, and a $12.6 million charge resulting from a Federal Energy Regulatory
Commission ruling denying recovery of interest on certain refunds from pipeline
suppliers. Both years also benefitted from not accruing interest expense on
prepetition debt, which improved net income by $138.1 million and $148.5
million for 1993 and 1992 respectively.
Adjusting for the effect of the unusual and bankruptcy related
items and including the deduction of interest on prepetition debt, 1993 net
income would have been $155.1 million, a $56.4 million increase over 1992
adjusted income of $98.7 million. Adjusted net income for the fourth quarter
would have been $58.6 million, a $24.3 million increase over adjusted results
of $34.3 million for the same period in 1992.
(more)
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Croom said Columbia's continued profitability illustrates the
financial soundness of its basic business units and their operations. He
pointed out that only twice in the past quarter century has Columbia failed to
show a profit and in each of those years the losses were attributable to
extraordinary charges relating to gas purchase contracts.
The Columbia Gas System, Inc., and its principal pipeline
subsidiary, Columbia Gas Transmission Corp., have been operating as debtors in
possession under Chapter 11 of the U.S. Bankruptcy Code since July 31, 1991.
No other subsidiaries are operating under Chapter 11.
TWELVE MONTHS RESULTS
The oil and gas segment had operating income of $53.6 million
in 1993. This compares to an operating loss of $101.2 million in 1992 that was
mainly the result of a $126.4 million writedown in the carrying value of oil
and gas assets due to low energy prices. The segment benefitted from the
positive effect of lower depletion expense, increased oil and gas production,
and higher gas prices in 1993. These were partially offset by lower oil prices
and the recording of a reserve for a royalty dispute with the U.S. Minerals
Management Service.
Operating income for the transmission segment in 1993 was
$178.7 million, an increase of $48.8 million over 1992. This increase was
partially the result of the Federal Energy Regulatory Commission's approval of
a favorable settlement of Columbia Transmission's rates which included the
beneficial effect of a new rate structure. After adjusting 1992 throughput for
a one-time gas exchange arrangement with its customers, Columbia Transmission's
throughput reflected normal weather in 1993, resulting in slightly increased
revenues and higher margins. These items combined to increase revenue in
excess of $30 million. The year-to- year comparison also benefitted from the
recovery of $20.3 million in surcharge revenues from customers for gas costs
where expenses had been recorded in prior years and the effect of a $15 million
expense incurred in 1992 resulting from settlements with gas suppliers.
Offsetting these improvements was the writedown in the investment in the Cove
Point LNG facility.
Operating income for the distribution segment in 1993
increased $8.7 million over the previous year to $146.4 million primarily
reflecting higher throughput due to colder weather and the effect of new rates.
Mitigating these improvements were higher operating expenses including costs
associated with streamlining corporate functions and studies that have been
initiated to enhance customer service.
(more)
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FOURTH QUARTER RESULTS
The oil and gas segment had operating income of $15.4 million
in the fourth of quarter of 1993, a $500,000 increase over the same period in
1992. Lower operation and maintenance expense was largely offset by lower
natural gas and oil prices that prevailed during the current period.
The transmission segment's operating income for the fourth
quarter of 1993 was $71 million, a decrease of $17.8 million from the same
period in 1992. Additional revenue of $19.7 million resulting from a customer
surcharge and $5.5 million of increased revenues due to the new rate design
were more than offset by the additional environmental accruals.
The distribution companies had operating income of $56.2
million in the fourth quarter of 1993, a $8.9 million increase over the 1992
period. Lower operating costs, the beneficial effect of favorable rate
settlements and higher throughput due to weather that was three percent colder
than the same period in 1992 accounted for the improvement.
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THE COLUMBIA GAS SYSTEM, INC.
Summary of Financial and Operating Data
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended December 31 Ended December 31
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1993 1992 1993 1992
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<S> <C> <C> <C> <C>
Income Statement Data
($ millions)
Total Operating Revenue . . . . . . . 1,010.2 935.5 3,391.2 2,922.0
Income (Loss) Before
Extraordinary Item . . . . . . . . . 69.4 87.8 152.2 90.9
Net Income (Loss) . . . . . . . . . . 69.4 87.8 152.2 51.2
Operating Income (Loss)
By Segment:
Oil and Gas . . . . . . . . . . 15.4 14.9 53.6 (101.2)
Transmission . . . . . . . . . . 71.0 88.8 178.7 129.9
Distribution . . . . . . . . . . 56.2 47.3 146.4 137.7
Other Energy . . . . . . . . . . 5.0 4.1 1.7 6.8
Corporate . . . . . . . . . . . (1.3) (4.8) (7.0) (10.3)
-------- -------- -------- --------
Total . . . . . . . . . . . . . 146.3 150.3 373.4 162.9
======== ======== ======== ========
Per Share Data
Earnings (Loss) Before
Extraordinary Item ($) . . . . . . 1.37 1.73 3.01 1.79
Earnings (Loss) on Common
Stock ($) . . . . . . . . . . . . . 1.37 1.73 3.01 1.01
Dividends on Common
Stock ($) . . . . . . . . . . . . . - - - -
Average Common Shares
Outstanding (millions) . . . . . . . 50.6 50.6 50.6 50.6
Operating Data
Oil and Gas Volumes:
Gas Production
(billion cubic feet) . . . . . 16.9 17.3 71.5 69.2
Oil Production
(000 barrels) . . . . . . . . . 945 874 3,603 3,061
Transmission (billion
cubic feet):
Transportation
Columbia Transmission
Market Area . . . . . . . . 299.8 237.0 895.9 909.0
Columbia Gulf
Main-line . . . . . . . . . 154.1 150.6 579.9 574.3
Short-haul . . . . . . . . 174.9 157.0 625.1 625.0
Intrasegment
Eliminations . . . . . . . . . . (255.2) (238.9) (928.7) (930.0)
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Total Transportation . . . . . . 373.6 305.7 1,172.2 1,178.3
-------- -------- -------- --------
Sales . . . . . . . . . . . . . . . . 17.4 31.4 183.7 196.0
-------- -------- -------- --------
Total Throughput . . . . . . . . . . 391.0 337.1 1,355.9 1,374.3
======== ======== ======== ========
</TABLE>
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THE COLUMBIA GAS SYSTEM, INC.
Summary of Financial and Operating Data (Continued)
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended December 31 Ended December 31
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1993 1992 1993 1992
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<S> <C> <C> <C> <C>
Distribution (billion
cubic feet):
Gas Sales . . . . . . . . . . . . 93.6 94.3 292.3 283.0
Transportation . . . . . . . . . . . 57.1 52.1 217.5 203.7
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Total Throughput . . . . . . . . . . . . 150.7 146.4 509.8 486.7
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Degree Days-Distribution
Service Territory
Actual . . . . . . . . . . . . 2,080 2,016 5,677 5,507
Normal . . . . . . . . . . . . . 2,032 2,039 5,598 5,624
% Colder (warmer) than
normal . . . . . . . . . . . . 2 (1) 1 (2)
% Colder (warmer) than
prior period . . . . . . . . . . . . 3 5 3 10
</TABLE>
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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 hereunto duly authorized.
The Columbia Gas System, Inc.
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(Registrant)
By /s/ R. E. LOWE
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R. E. Lowe
Vice President &
Controller
Date: February 14, 1994
