<PAGE> 1
February 15, 1995
File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form U-1
APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
THE COLUMBIA GAS SYSTEM, INC.
20 Montchanin Road
Wilmington, DE 19807
- --------------------------------------------------------------------------------
(Names of company or companies filing this statement
and addresses of principal executive offices)
THE COLUMBIA GAS SYSTEM, INC.
- --------------------------------------------------------------------------------
(Name of top registered holding company parent of
each applicant or declarant)
L. J. Bainter, Treasurer
THE COLUMBIA GAS SYSTEM, INC.
20 Montchanin Road
Wilmington, DE 19807
- --------------------------------------------------------------------------------
(Name and address of agent for service)
<PAGE> 2
Item 1. Description of Proposed Transaction.
(a) Furnish a reasonably detailed and precise description of the
proposed transaction, including a statement of the reasons why it is desired to
consummate the transaction and the anticipated effect thereof. If the
transaction is part of a general program, describe the program and its relation
to the proposed transaction.
Introduction
The Columbia Gas System, Inc. ("Columbia"), a Delaware corporation
and holding company registered with the Securities and Exchange Commission
("Commission") under the Public Utility Holding Company Act of 1935 (the
"Act"), is the Applicant-Declarant in this file, which pertains to an employee
benefit plan, the Employees' Thrift Plan of Columbia Gas System ("Thrift
Plan"), in which the following subsidiary companies of Columbia
("Subsidiaries") are participating employers: Columbia Gas of Pennsylvania,
Inc., Columbia Gas of Ohio, Inc., Columbia Gas of Maryland, Inc., Columbia Gas
of Kentucky, Inc., Commonwealth Gas Services, Inc.; Columbia Gulf Transmission
Company; Columbia Gas Transmission Corporation; Columbia Gas Development
Corporation, Columbia Natural Resources, Inc., Columbia Coal Gasification
Corporation, Columbia Energy Services Corporation, Columbia Gas System Service
Corporation, Columbia Propane Corporation, Commonwealth Propane, Inc., TriStar
Ventures Corporation, and Columbia LNG Corporation. The Subsidiaries are
principally engaged in one or more phases of the natural gas business.
Columbia and Columbia Gas Transmission Corporation ("TCO")
presently are debtors-in-possession under Chapter 11 of the U. S. Bankruptcy
Code in U. S. Bankruptcy Court for the District of Delaware.
<PAGE> 3
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Columbia is seeking Commission authorization to make a loan to the
Thrift Plan, as more fully described herein.
Background
Columbia is the plan sponsor of the Thrift Plan, a defined
contribution plan which is qualified under the requirements of Sections 401(a)
and 401(k) of the Internal Revenue Code. The Subsidiaries are Thrift Plan
participating employers, whose employees, former employees and beneficiaries
constitute the participants. The Thrift Plan is administered by the Thrift
Plan Committee, which is appointed by Columbia's board of directors and which
is currently comprised of members of senior management of major Columbia
companies, including the distribution companies and the transmission companies.
The Thrift Plan has approximately 9,200 participants, and as of December 31,
1994, the approximate aggregate fair market value of the plan's assets was $342
million.
Under the Thrift Plan, participants are able to self-direct their
savings deposits as well as employer matching contributions (if over age 55)
into 14 investment options, 12 of which are diversified investment mutual funds
offered by Fidelity Investments of Boston, MA ("Fidelity"), including two bond
funds, a balanced fund, an equity index fund, a growth and income fund, four
growth funds and three international funds. A thirteenth fund, the Money
Market/Investment Contract Fund (the "Fund"), is composed of Fidelity's Money
Market Fund and a guaranteed investment contract issued by Confederation Life
Insurance Company of Canada ("Confederation Life"). Participants may also
invest in the Columbia Gas System Stock Fund. The Confederation Life contract
was acquired by the Plan on January 2, 1990 in the amount of $6,500,000. The
five-
<PAGE> 4
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year contract, which has a stated interest rate of 8.8%, expired on January 1,
1995. When Columbia's Thrift Plan Committee selected Fidelity in 1991 as
Trustee/Investment Manager, the fund was created by aggregating the
Confederation Life contract with Fidelity's Money Market Fund. This contract
is the sole remaining investment contract held by the Fund, and the Thrift Plan
no longer acquires individual guaranteed investment contracts. A request was
made by the Thrift Plan Committee to redeem the contract on the expiration
date, but this request was not granted.
On August 12, 1994, Canadian governmental authorities seized
Confederation Life. In order to protect Confederation Life's U.S. assets, the
Insurance Commissioner for the State of Michigan moved to seize all such
assets. At the time Confederation Life was seized, a segregated subaccount was
established by the Thrift Plan Committee and the Thrift Plan's trustee and was
frozen within the Fund. About 17 percent of the Fund's assets were
attributable to the Confederation Life contract. Current estimates are that,
ultimately, full recovery of the Confederation Life investment will occur,
although the payout is not likely to occur for several years.
The Confederation Life situation has impacted plans of many other
companies. To alleviate the hardship on the plan participants and to further
employee relations, many plan sponsors have begun seeking regulatory approvals
to enter into transactions that would provide participants with immediate
access to their frozen funds. Generally, such transactions consist of a
purchase of the investment contract or a loan by a plan sponsor to the benefit
plan.
At Columbia, 2,423 Thrift Plan participants (approximately 26
percent of the total participants) are precluded from, or limited in, accessing
their funds in the subaccount. Of those affected participants, 184 are
retirees, 11 are on long-term disability, and 12 are beneficiaries of deceased
participants.
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Columbia's Thrift Plan Committee, which is the named fiduciary as
well as Plan Administrator of the Thrift Plan, has considered various options
and has recommended to the boards of directors for Columbia and TCO that loans
be made to the Thrift Plan in order to allow Thrift Plan participants access to
their frozen funds as soon as practicable. Subject to the receipt of necessary
regulatory and Bankruptcy Court approvals, the boards of directors of Columbia
and TCO have considered the Thrift Plan Committee's recommendation and approved
loans to the Thrift Plan.
Proposed Transaction
It is proposed that two loans be made to the Thrift Plan, one to
be made by Columbia subject to the approval of this Commission and the
Bankruptcy Court and one to be made by TCO subject to the approval of the
Bankruptcy Court. The total amount of the loans would be approximately $6.8
million, which represents the accumulated value of the frozen investment in the
Confederation Life contract, including accrued interest, as of the close of
business on August 11, 1994 (the date preceding the seizure of Confederation
Life's assets). TCO's loan, which is exempted from Commission approval
pursuant to Rule 49(c), would be approximately $2.5 million, which accounts for
36.4 percent of the subaccount attributable to its participants. Columbia's
loan would be approximately $4.3 million, which accounts for the other
subsidiaries' apportionment of the segregated subaccount. The loans would be
made unsecured and without interest, would be evidenced by notes (see Exhibit
A) and would be non-recourse to participants or assets held in the Thrift
Plan. Repayment of the loans would be made only from proceeds received from
Confederation Life (from the liquidation and rehabilitation proceedings or
otherwise), state guaranty funds, and other sources, including litigation, in
connection with the Confederation Life contract.
<PAGE> 6
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Should the ultimate recovery of these funds from Confederation
Life and other sources be less than 100 percent, full repayment would be
waived, and this cost would be borne by Columbia and TCO.
Upon issuance of the loans, the participants' segregated
subaccounts would be immediately closed, and their previously frozen funds
would be transferred to Fidelity's Money Market Fund. Periodically as amounts
are received from Confederation Life, state guaranty funds and other sources
with regard to the Confederation Life account, the proceeds would be paid to
Columbia and/or TCO, as the case may be, and the amounts of the loans would be
reduced accordingly.
TCO does not join in the filing of this Application-Declaration
because it will apply to the U. S. Bankruptcy Court for the District of
Delaware for approval to enter into the loan transaction. Pursuant to Rule 49,
TCO, as a non-utility subsidiary subject to reorganization proceedings in a
U.S. court in which the Commission has filed a notice of appearance, is exempt
from any provision of the Act applicable to any transaction entered into with
the approval of such court provided that the conditions of Rule 49 are met.
Summary of Authorization Sought
In summary, Columbia seeks Commission approval to provide an
unsecured, interest-free, non-recourse loan in an amount not to exceed $4.3
million to the Thrift Plan, as more fully described above.
<PAGE> 7
Page 7
(b) Describe briefly, and where practicable state the approximate
amount of, any material interest in the proposed transaction, direct or
indirect, of any associate or affiliate of the applicant or declarant company
or any affiliate of any such associate company.
Not applicable.
(c) If the proposed transaction involves the acquisition of
securities not issued by a registered holding company or subsidiary thereof,
describe briefly the business and property, present or proposed, of the issuer
of such securities.
Not applicable.
(d) If the proposed transaction involves the acquisition or
disposition of assets, describe briefly such assets, setting forth original
cost, vendor's book cost (including the basis of determination) and applicable
valuation and qualifying reserves.
Not applicable.
Item 2. Fees, Commissions and Expenses.
(a) State (1) the fees, commissions and expenses paid or
incurred, or to be paid or incurred, directly or indirectly, in connection with
the proposed transaction by the applicant or declarant or any associate company
thereof, and (2) if the proposed transaction involves the sale of securities at
competitive bidding, the fees and expenses to be paid to counsel selected by
applicant or declarant to act for the successful bidder.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee . . . . . . . . . . . . . $ 2,000
Services of Columbia Gas System Service
Corporation in connection with the preparation
of the Application-Declaration . . . . . . . . . . . . . . . . . . . . 10,000
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,000
</TABLE>
(b) If any person to whom fees or commissions have been or are to
be paid in connection with the proposed transaction is an associate company or
an affiliate of the applicant or declarant, or is an affiliate of an associate
company, set forth the facts with respect thereto.
Service will perform certain services at cost as set forth in Item
2(a) above.
Item 3. Applicable Statutory Provisions.
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Page 8
(a) State the section of the Act and the rules thereunder
believed to be applicable to the proposed transaction. If any section or rule
would be applicable in the absence of a specific exemption, state the basis of
exemption.
Sections 9 and 10 of the Act are applicable to the acquisition by
Columbia of the note to be issued by the Thrift Plan.
Pursuant to Rule 49(c), the acquisition by TCO of the note to be
issued by the Thrift Plan is exempt from Sections 9 and 10 as TCO is a (i)
non-utility subsidiary subject to reorganization proceedings in a U.S. court in
which the Commission has filed a notice of appearance, (ii) the proposed
transaction will be approved by the Court, (iii) the transaction does not
involve the acquisition of any utility assets or securities of any public
utility or holding company, and (iv) neither TCO nor its subsidiary is the
issuer of securities or the obligor on any obligations which have been
guaranteed or assumed by the registered holding company.
To the extent that Columbia's loan to the Thrift Plan is deemed to
be an extension of credit, an open account advance, or a donation to or on
behalf of the Subsidiaries other than TCO, Section 12 and Rule 45 are
applicable. Upon issuance of an order declaring the Application-Declaration to
be effective, Section 12 and Rule 45 would be complied with.
To the extent that the proposed transactions are considered by the
Commission to require authorization, approval or exemption under any section of
the Act or provision of the rules and regulations other than those specifically
referred to herein, request for such authorization, approval or exemption is
hereby made.
(b) If any person to whom fees or commissions have been or are to
be paid in connection with the proposed transaction is an associate company or
an affiliate of any applicant or declarant, or is an affiliate of an associate
company, set forth the facts with respect thereto.
Not applicable.
<PAGE> 9
Page 9
Item 4. Regulatory Approval.
(a) State the nature and extent of the jurisdiction of any State
commission or any Federal commission (other than the Securities and Exchange
Commission) over the proposed transaction.
In the opinion of counsel, the approval or consent of the U.S.
Department of Labor and of the U.S. Bankruptcy Court for the District of
Delaware is necessary or appropriate for the consummation of the proposed
transaction. While prior approval of the Internal Revenue Service ("IRS") is
not necessary for the proposed transaction, Columbia intends to enter into an
agreement with the IRS either in the form of a closing agreement obtained
through a formal procedure historically enlisted in similar cases (e.g., Rev.
Proc. 92-16 as modified and extended) or through a private letter ruling.
Columbia believes such an agreement or ruling from the IRS is necessary in
order to avoid the potential of imposition of income and/or excise taxes
resulting from the loan transaction and to avoid a potential adverse
determination as to the Thrift Plan's qualified status under Section 401(a) and
other applicable provisions of the Internal Revenue Code.
(b) Describe the action taken or proposed to be taken before any
commission named in answer to paragraph (a) of this item in connection with the
proposed transaction.
Filings for approval of the proposed transaction have been made
with the U.S. Department of Labor and the U.S. Bankruptcy Court for the
District of Delaware.
Item 5. Procedure.
(a) State the date when Commission action is requested. If the
date is less than 40 days from the date of the original filing, set for the
reasons for acceleration.
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Page 10
It is requested that the Commission issue its notice by February
24, 1995 and its order as soon as practicable after the file is completed.
(b) State (i) whether there should be a recommended decision by a
hearing officer, (ii) whether there should be a recommended decision by any
other responsible officer of the Commission, (iii) whether the Division of
Investment Management may assist in the preparation of the Commission's
decision, and (iv) whether there should be a 30-day waiting period between the
issuance of the Commission's order and the date on which it is to become
effective.
Applicants hereby (i) waive a recommended decision by a hearing
officer, (ii) waive a recommended decision by any other responsible officer or
the Commission, (iii) consent that the Division of Investment Management may
assist in the preparation of the Commission's decision, and (iv) waive a 30-day
waiting period between the issuance of the Commission's order and the date on
which it is to become effective.
Item 6. Exhibits and Financial Statements.
(a) Exhibits
A Form of Promissory Note (to be filed by Amendment)
D-1 Bankruptcy Court Motion and Order Approving
Transaction (to be filed by Amendment)
D-2 Order of the Department of Labor for Prohibited
Transaction Exemption (to be filed by Amendment)
F Opinion of Counsel (to be filed by Amendment)
G Financial Data Schedules (incorporated herein as
Exhibit No. 27).
<PAGE> 11
Page 11
H Proposed Notice.
(b) Financial Statements
The Columbia Gas System, Inc. and Subsidiaries
1(a) Consolidated Balance Sheet as of
November 30, 1994 (actual and pro forma)
1(b) Consolidated Statement of Capitalization
as of November 30, 1994 (actual and pro
forma)
1(c) Statement of Consolidated Income Twelve
Months Ended November 30, 1994 (actual
and pro forma)
1(d) Consolidated Statements of Common Stock
Equity Twelve Months Ended November 30,
1994 (actual and pro forma)
1(e) Pro Forma Entries
The Columbia Gas System, Inc.
2(a) Balance Sheet as of November 30, 1994
(actual and pro forma)
2(b) Statement of Capitalization as of
November 30, 1994 (actual and pro forma)
2(c) Statement of Income Twelve Months Ended
November 30, 1994 (actual and pro forma)
2(d) Statements of Common Stock Equity Twelve
Months Ended November 30, 1994 (actual
and pro forma)
2(e) Pro Forma Entries
There have been no material changes, not in the ordinary course of
business, since the date of the financial statements filed herewith.
<PAGE> 12
Page 12
Item 7. Information as to Environmental Effects.
(a) Describe briefly the environmental effects of the proposed
transaction in terms of the standards set forth in Section 102 (2) (C) of the
National Environmental Policy Act (42 U.S.C. 4232 (2) (C)). If the response to
this term is a negative statement as to the applicability of Section 102 (2)(C)
in connection with the proposed transaction, also briefly state the reasons for
that response.
As more fully described in Item 1, the proposed transaction
relates only to the purchase of a note and has no environmental impact in
itself.
(b) State whether any other federal agency has prepared or is
preparing an environmental impact statement ("EIS") with respect to the
proposed transaction. If any other federal agency has prepared or is preparing
an EIS, state which agency or agencies and indicate the status of that EIS
preparation.
No federal agency has prepared or, to Columbia's knowledge, is
preparing an EIS with respect to the proposed transaction.
<PAGE> 13
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
Application-Declaration to be signed on its behalf by the undersigned thereunto
duly authorized.
THE COLUMBIA GAS SYSTEM, INC.
Date: February 16, 1995 By: /s/ L. J. BAINTER
------------------------------
L. J. Bainter, Treasurer
<PAGE> 14
UNAUDITED
(b)(1)(a)
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES (1 of 2)
CONSOLIDATED BALANCE SHEET
ACTUAL and PRO FORMA
As of November 30, 1994
($000)
<TABLE>
<CAPTION>
CGS Pro Forma CGS
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Property, Plant and Equipment
Gas utility and other plant, at original cost .... 6,590,415 - 6,590,415
Accumulated depreciation and depletion ........... (3,164,222) - (3,164,222)
------------ ------------ ------------
Net Gas Utility and Other Plant .................. 3,426,193 - 3,426,193
------------ ------------ ------------
Oil and gas producing properties, full cost method 1,245,723 - 1,245,723
Accumulated depletion ............................ (637,676) - (637,676)
------------ ------------ ------------
Net Oil and Gas Producing Properties ............. 608,047 - 608,047
------------ ------------ ------------
Net Property, Plant, and Equipment ................. 4,034,240 - 4,034,240
------------ ------------ ------------
Investments and Other Assets
Accounts receivable - noncurrent ................. 206,057 - 206,057
Unconsolidated affiliates ........................ 73,191 - 73,191
Investment in Columbia LNG Corporation ........... 13,457 - 13,457
Other ............................................ 14,529 6,800 21,329
------------ ------------ ------------
Total Investments and Other Assets ................. 307,234 6,800 314,034
------------ ------------ ------------
Current Assets
Cash and temporary cash investments .............. 1,474,541 (6,800) 1,467,741
Accounts receivable, net ......................... 454,024 - 454,024
Gas inventories .................................. 268,353 - 268,353
Other inventories at average cost ................ 40,664 - 40,664
Prepayments ...................................... 80,543 - 80,543
Other ............................................ 28,584 - 28,584
------------ ------------ ------------
Total Current Assets ............................... 2,346,709 (6,800) 2,339,909
------------ ------------ ------------
Deferred Charges ................................... 281,488 - 281,488
------------ ------------ ------------
Total Assets ....................................... 6,969,671 - 6,969,671
============ ============ ============
</TABLE>
<PAGE> 15
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES (2 of 2)
CONSOLIDATED BALANCE SHEET
ACTUAL and PRO FORMA
As of November 30, 1994
($000)
<TABLE>
<CAPTION>
CGS Pro Forma CGS
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock equity .............................. 1,444,820 - 1,444,820
Long-term debt ................................... 4,268 - 4,268
------------ ------------ ------------
Total Capitalization ............................... 1,449,088 - 1,449,088
------------ ------------ ------------
Current Liabilities
Debt obligations ................................. 1,209 - 1,209
Debtor in possession financing ................... - - -
Accounts and drafts payable ...................... 117,142 - 117,142
Accrued taxes .................................... 92,915 - 92,915
Accrued interest ................................. (3,393) - (3,393)
Estimated rate refunds ........................... 129,325 - 129,325
Estimated supplier obligations ................... 74,372 - 74,372
Deferred income taxes - current .................. - - -
Other ............................................ 338,883 - 338,883
------------ ------------ ------------
Total Current Liabilities .......................... 750,453 - 750,453
------------ ------------ ------------
Liabilities Subject to Chapter 11 Proceedings ..... 3,954,182 - 3,954,182
------------ ------------ ------------
Other Liabilities and Deferred Credits
Deferred income taxes, noncurrent ................ 353,071 - 353,071
Deferred investment tax credits .................. 38,685 - 38,685
Postretirement benefits other than pensions ...... 236,000 - 236,000
Other ............................................ 188,192 - 188,192
------------ ------------ ------------
Total Other Liabilities and Deferred Credits ....... 815,948 - 815,948
------------ ------------ ------------
Total Capitalization and Liabilities ............... 6,969,671 - 6,969,671
============ ============ ============
</TABLE>
<PAGE> 16
UNAUDITED
(b)(1)(b)
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CAPITALIZATION
ACTUAL and PRO FORMA
As of November 30, 1994
($000)
<TABLE>
<CAPTION>
CGS Pro Forma CGS
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
Common Stock, The Columbia Gas System, Inc.,
$10 par value, authorized 100,000,000 shares,
outstanding 50,563,335 shares ................... 505,633 - 505,633
Additional paid in capital ....................... 601,828 - 601,828
Retained earnings ................................ 407,325 - 407,325
Unearned employee compensation ................... (69,966) - (69,966)
------------ ------------ ------------
Total Stockholder's Equity ......................... 1,444,820 - 1,444,820
------------ ------------ ------------
Long-Term Debt
Miscellaneous debt of subsidiaries ............... 1,765 - 1,765
Capitalized lease obligations .................... 2,503 - 2,503
------------ ------------ ------------
Total Long-Term Debt ............................... 4,268 - 4,268
------------ ------------ ------------
Total Capitalization ............................... 1,449,088 - 1,449,088
============ ============ ============
</TABLE>
<PAGE> 17
UNAUDITED
(b)(1)(c)
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED INCOME
ACTUAL and PRO FORMA
Twelve Months Ended November 30, 1994
($000)
<TABLE>
<CAPTION>
CGS Pro Forma CGS
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
Operating Revenues
Gas sales......................................... 1,938,075 - 1,938,075
Transportation ................................... 760,384 - 760,384
Other ............................................ 221,808 - 221,808
------------ ------------ ------------
Total Operating Revenues ........................... 2,920,267 - 2,920,267
------------ ------------ ------------
Operating Expenses
Products purchased .............................. 1,009,748 - 1,009,748
Operation ........................................ 885,594 - 885,594
Maintenance ...................................... 166,389 - 166,389
Depreciation and depletion ....................... 261,757 - 261,757
Other taxes ...................................... 202,998 - 202,998
------------ ------------ ------------
Total Operating Expenses ........................... 2,526,486 - 2,526,486
------------ ------------ ------------
Operating Income ................................... 393,781 - 393,781
------------ ------------ ------------
Other Income (Deductions)
Interest income and other, net ................... 20,506 - 20,506
Interest expense and related charges.............. (15,379) - (15,379)
Reorganization items, net ........................ (13,653) - (13,653)
------------ ------------ ------------
Total Other Income (Deductions) .................... (8,526) - (8,526)
------------ ------------ ------------
Income before Income Taxes and Cumulative Effect
of Accounting Change ............................. 385,255 - 385,255
Income taxes ....................................... 155,162 - 155,162
------------ ------------ ------------
Income before Cumulative Effect of Accounting
Change ........................................... 230,093 - 230,093
Cumulative Effect of Change in Accounting for
Postemployment Benefits .......................... (5,566) - (5,566)
------------ ------------ ------------
Net Income ......................................... 224,527 - 224,527
============ ============ ============
</TABLE>
<PAGE> 18
UNAUDITED
(b)(1)(d)
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMMON STOCK EQUITY
ACTUAL and PRO FORMA
Twelve Months Ended November 30, 1994
($000)
<TABLE>
<CAPTION>
CGS Pro Forma CGS
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
COMMON STOCK
Balance at December 1, 1993 ........................ 505,592 - 505,592
Common stock issued -
Leveraged employee stock ownership plan (LESOP) .. - - -
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... 41 - 41
Public offering .................................. - - -
------------ ------------ ------------
Balance at November 30, 1994 ....................... 505,633 - 505,633
------------ ------------ ------------
ADDITIONAL PAID IN CAPITAL
Balance at December 1, 1993 ........................ 601,759 - 601,759
Common stock issued -
Leveraged employee stock ownership plan (LESOP) .. - - -
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... 69 - 69
Public offering .................................. - - -
Preferred stock issued ............................. - - -
------------ ------------ ------------
Balance at November 30, 1994 ....................... 601,828 - 601,828
------------ ------------ ------------
RETAINED EARNINGS
Balance at December 1, 1993 ........................ 182,798 - 182,798
Net income ......................................... 224,527 - 224,527
Common stock dividends ............................. - - -
Other .............................................. - - -
------------ ------------ ------------
Balance at November 30, 1994 ....................... 407,325 - 407,325
------------ ------------ ------------
UNEARNED EMPLOYEE COMPENSATION
Balance at December 1, 1993 ........................ (69,966) - (69,966)
Adjustment ......................................... - - -
------------ ------------ ------------
Balance at November 30, 1994 ....................... (69,966) - (69,966)
------------ ------------ ------------
TOTAL COMMON STOCK EQUITY .......................... 1,444,820 - 1,444,820
============ ============ ============
</TABLE>
<PAGE> 19
UNAUDITED
(b)(1)(e)
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES
PRO FORMA ENTRIES
($000)
1. Other Assets - Notes Receivable - Noncurrent 6,800 *
Cash 6,800 *
To record the issuance of $6.8 million of interest-free,
unsecured loans to the Thrift Plan.
* Includes the issuance by Columbia Gas Transmission Corporation (TCO) of a
$2.5 million interest-free, unsecured note to the Thrift Plan. Pursuant to
Rule 49, however, TCO does not join the Registrant in the filing of the
Application-Declaration.
<PAGE> 20
UNAUDITED
(b)(2)(a)
THE COLUMBIA GAS SYSTEM, INC. (1 of 2)
BALANCE SHEET
ACTUAL and PRO FORMA
As of November 30, 1994
($000)
<TABLE>
<CAPTION>
CG Pro Forma CG
Actual Entries Pro Forma
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Investments and Other Assets
Accounts receivable - noncurrent ................. 25,591 - 25,591
Unconsolidated affiliates ........................ - - -
Investment in Columbia LNG Corporation ........... 15,536 - 15,536
Other ............................................ - 4,300 4,300
---------- ---------- ----------
Total Investments and Other Assets ................. 41,127 4,300 45,427
---------- ---------- ----------
Investments in Subsidiaries
Capital stock .................................... 1,160,907 - 1,160,907
Equity in undistributed retained earnings ........ (444,147) - (444,147)
Installment promissory notes receivable .......... 792,294 - 792,294
Other investments ................................ 437,833 - 437,833
Other receivables - TCO .......................... 1,592,777 - 1,592,777
---------- ---------- ----------
Total Investments in Subsidiaries .................. 3,539,664 - 3,539,664
---------- ---------- ----------
Current Assets
Cash and temporary cash investments .............. 237,181 (4,300) 232,881
Accounts receivable, net
Customers ...................................... - - -
Affiliated ..................................... 229,527 - 229,527
Other .......................................... 10,514 - 10,514
Prepayments ...................................... 28 - 28
Other ............................................ 906 - 906
---------- ---------- ----------
Total Current Assets ............................... 478,156 (4,300) 473,856
---------- ---------- ----------
Deferred Charges ................................... 2,823 - 2,823
---------- ---------- ----------
Total Assets ....................................... 4,061,770 - 4,061,770
========== ========== ==========
</TABLE>
<PAGE> 21
THE COLUMBIA GAS SYSTEM, INC. (2 of 2)
BALANCE SHEET
ACTUAL and PRO FORMA
As of November 30, 1994
($000)
<TABLE>
<CAPTION>
CG Pro Forma CG
Actual Entries Pro Forma
---------- ---------- ----------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock equity .............................. 1,444,820 - 1,444,820
Long-term debt ................................... - - -
---------- ---------- ----------
Total Capitalization ............................... 1,444,820 - 1,444,820
---------- ---------- ----------
Current Liabilities
Debt obligations ................................. - - -
Debtor in possession financing ................... - - -
Accounts and drafts payable ...................... 1,369 - 1,369
Affiliated accounts payable ...................... 2,489 - 2,489
Accrued taxes .................................... (556) - (556)
Accrued interest ................................. 1,254 - 1,254
Deferred income taxes - current .................. - - -
Other ............................................ 8,410 - 8,410
---------- ---------- ----------
Total Current Liabilities .......................... 12,966 - 12,966
---------- ---------- ----------
Liabilities Subject to Chapter 11 Proceedings ...... 2,382,243 - 2,382,243
---------- ---------- ----------
Other Liabilities and Deferred Credits
Deferred income taxes, noncurrent ................ 215,649 - 215,649
Postretirement benefits other than pensions ...... 6,043 - 6,043
Other ............................................ 49 - 49
---------- ---------- ----------
Total Other Liabilities and Deferred Credits ....... 221,741 - 221,741
---------- ---------- ----------
Total Capitalization and Liabilities ............... 4,061,770 - 4,061,770
========== ========== ==========
</TABLE>
<PAGE> 22
UNAUDITED
(b)(2)(b)
THE COLUMBIA GAS SYSTEM, INC.
STATEMENT OF CAPITALIZATION
ACTUAL and PRO FORMA
As of November 30, 1994
($000)
<TABLE>
<CAPTION>
CG Pro Forma CG
Actual Entries Pro Forma
---------- ---------- ----------
<S> <C> <C> <C>
Stockholder's Equity
Common Stock, $10 par value, authorized
100,000,000 shares, outstanding 50,563,335
shares .......................................... 505,633 - 505,633
Additional paid in capital ....................... 601,828 - 601,828
Retained earnings ................................ 407,325 - 407,325
Unearned employee compensation ................... (69,966) - (69,966)
---------- ---------- ----------
Total Stockholder's Equity ......................... 1,444,820 - 1,444,820
---------- ---------- ----------
Long-Term Debt
Debentures, net of unamortized discount less
premium ......................................... - - -
---------- ---------- ----------
Total Long-Term Debt ............................... - - -
---------- ---------- ----------
Total Capitalization ............................... 1,444,820 - 1,444,820
========== ========== ==========
</TABLE>
<PAGE> 23
UNAUDITED
(b)(2)(c)
THE COLUMBIA GAS SYSTEM, INC.
STATEMENT OF INCOME
ACTUAL and PRO FORMA
Twelve Months Ended November 30, 1994
($000)
<TABLE>
<CAPTION>
CG Pro Forma CG
Actual Entries Pro Forma
---------- ---------- ----------
<S> <C> <C> <C>
Operating Revenues
Gas Sales ........................................ - - -
Transportation ................................... - - -
Other ............................................ - - -
---------- ---------- ----------
Total Operating Revenues ........................... - - -
---------- ---------- ----------
Operating Expenses
Products purchased ............................... - - -
Operation ........................................ 7,722 - 7,722
Maintenance ...................................... - - -
Depreciation and depletion ....................... - - -
Other taxes ...................................... 162 - 162
---------- ---------- ----------
Total Operating Expenses ........................... 7,884 - 7,884
---------- ---------- ----------
Operating Income (Loss) ............................ (7,884) - (7,884)
---------- ---------- ----------
Other Income (Deductions)
Interest income and other, net ................... 303,806 - 303,806
Interest expense and related charges ............. (502) - (502)
Reorganization items, net ........................ 293 - 293
---------- ---------- ----------
Total Other Income (Deductions) .................... 303,597 - 303,597
---------- ---------- ----------
Income before Income Taxes and Cumulative Effect
of Accounting Change ............................. 295,713 - 295,713
Income taxes ....................................... 71,142 - 71,142
---------- ---------- ----------
Income before Cumulative Effect of Accounting
Change ........................................... 224,571 - 224,571
Cumulative Effect of Accounting for Postemployment
Benefits ......................................... (44) - (44)
---------- ---------- ----------
Net Income ......................................... 224,527 - 224,527
========== ========== ==========
</TABLE>
<PAGE> 24
UNAUDITED
(b)(2)(d)
THE COLUMBIA GAS SYSTEM, INC.
STATEMENTS OF COMMON STOCK EQUITY
ACTUAL and PRO FORMA
Twelve Months Ended November 30, 1994
($000)
<TABLE>
<CAPTION>
CG Pro Forma CG
Actual Entries Pro Forma
---------- ---------- ----------
<S> <C> <C> <C>
COMMON STOCK
Balance at December 1, 1993 ........................ 505,592 - 505,592
Common stock issued -
Subsidiaries ..................................... - - -
Leveraged employee stock ownership plan (LESOP) .. - - -
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... 41 - 41
Public offering .................................. - - -
---------- ---------- ----------
Balance at November 30, 1994 ....................... 505,633 - 505,633
---------- ---------- ----------
ADDITIONAL PAID IN CAPITAL
Balance at December 1, 1993 ........................ 601,759 - 601,759
Common stock issued -
Subsidiaries ..................................... - - -
Leveraged employee stock ownership plan (LESOP) .. - - -
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... 69 - 69
Public offering .................................. - - -
Preferred stock issued ............................. - - -
---------- ---------- ----------
Balance at November 30, 1994 ....................... 601,828 - 601,828
---------- ---------- ----------
RETAINED EARNINGS
Balance at December 1, 1993 ........................ 182,798 - 182,798
Net income ......................................... 224,527 - 224,527
Common stock dividends -
CG ............................................... - - -
Subsidiaries (to CG) ............................. - - -
Other .............................................. - - -
---------- ---------- ----------
Balance at November 30, 1994 ....................... 407,325 - 407,325
---------- ---------- ----------
UNEARNED EMPLOYEE COMPENSATION
Balance at December 1, 1993 ........................ (69,966) - (69,966)
Adjustment ......................................... - - -
---------- ---------- ----------
Balance at November 30, 1994 ....................... (69,966) - (69,966)
---------- ---------- ----------
TOTAL COMMON STOCK EQUITY .......................... 1,444,820 - 1,444,820
========== ========== ==========
</TABLE>
<PAGE> 25
UNAUDITED
(b)(2)(e)
THE COLUMBIA GAS SYSTEM, INC.
PRO FORMA ENTRIES
($000)
1. Other Assets - Notes Receivable - Noncurrent 4,300
Cash 4,300
To record the issuance of a $4.3 million interest-free,
unsecured loan to the Thrift Plan.
<PAGE> 26
Page 1
EXHIBIT INDEX
(a) Exhibits
A Form of Promissory Note ( to be filed by Amendment)
D-1 Bankruptcy Court Motion and Order Approving
Transaction (to be filed by Amendment)
D-2 Order of the Department of Labor for Prohibited
Transaction Exemption (to be filed by Amendment)
F Opinion of Counsel (to be filed by Amendment).
G Financial Data Schedules (incorporated herein as
Exhibit No. 27).
H Proposed Notice
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000022099
<NAME> THE COLUMBIA GAS SYSTEM
<SUBSIDIARY>
<NUMBER> 1
<NAME> THE COLUMBIA GAS SYSTEM & SUBSIDIARIES
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994
<PERIOD-START> DEC-01-1993 DEC-01-1993
<PERIOD-END> NOV-30-1994 NOV-30-1994
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 3,426,193 3,426,193
<OTHER-PROPERTY-AND-INVEST> 915,281 922,081
<TOTAL-CURRENT-ASSETS> 2,346,709 2,339,909
<TOTAL-DEFERRED-CHARGES> 281,488 281,488
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 6,969,671 6,969,671
<COMMON> 505,633 505,633
<CAPITAL-SURPLUS-PAID-IN> 601,828 601,828
<RETAINED-EARNINGS> 407,325 407,325
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,444,820 1,444,820
0 0
0 0
<LONG-TERM-DEBT-NET> 4,268 4,268
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 2,503 2,503
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 5,520,583 5,520,583
<TOT-CAPITALIZATION-AND-LIAB> 6,969,671 6,969,671
<GROSS-OPERATING-REVENUE> 2,920,267 2,920,267
<INCOME-TAX-EXPENSE> 155,162 155,162
<OTHER-OPERATING-EXPENSES> 2,526,486 2,526,486
<TOTAL-OPERATING-EXPENSES> 2,526,486 2,526,486
<OPERATING-INCOME-LOSS> 393,781 393,781
<OTHER-INCOME-NET> 6,853 6,853
<INCOME-BEFORE-INTEREST-EXPEN> 400,634 400,634
<TOTAL-INTEREST-EXPENSE> 15,379 15,379
<NET-INCOME> 224,527 224,527
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 224,527 224,527
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 4.44 4.44
<EPS-DILUTED> 4.44 4.44
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000022099
<NAME> THE COLUMBIA GAS SYSTEM
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994
<PERIOD-START> DEC-01-1993 DEC-01-1993
<PERIOD-END> NOV-30-1994 NOV-30-1994
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 3,580,791 3,585,091
<TOTAL-CURRENT-ASSETS> 478,156 473,856
<TOTAL-DEFERRED-CHARGES> 2,823 2,823
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 4,061,770 4,061,770
<COMMON> 505,633 505,633
<CAPITAL-SURPLUS-PAID-IN> 601,828 601,828
<RETAINED-EARNINGS> 407,325 407,325
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,444,820 1,444,820
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,616,950 2,616,950
<TOT-CAPITALIZATION-AND-LIAB> 4,061,770 4,061,770
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> 71,142 71,142
<OTHER-OPERATING-EXPENSES> 7,884 7,884
<TOTAL-OPERATING-EXPENSES> 7,884 7,884
<OPERATING-INCOME-LOSS> (7,884) (7,884)
<OTHER-INCOME-NET> 304,099 304,099
<INCOME-BEFORE-INTEREST-EXPEN> 296,215 296,215
<TOTAL-INTEREST-EXPENSE> 502 502
<NET-INCOME> 224,527 224,527
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 224,527 224,527
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 4.44 4.44
<EPS-DILUTED> 4.44 4.44
</TABLE>
<PAGE> 1
Page 1
EXHIBIT H
SECURITIES AND EXCHANGE COMMISSION
(Release No. )
The Columbia Gas System, Inc. Notice of Proposed Acquisition of Note of
Employees' Thrift Plan of Columbia Gas System.
The Columbia Gas System, Inc. ("Columbia"), a registered holding
company located at 20 Montchanin Road, Wilmington, Delaware 19807, has filed
an application-declaration with this Commission pursuant to Sections 9, 10 and
12 under the Public Utility Holding Company Act of 1935 (the "Act") and Rule
45. Columbia and its wholly-owned transmission subsidiary, Columbia Gas
Transmission Corporation ("TCO") presently are debtors-in-possession under
Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the
District of Delaware.
Columbia is the plan sponsor of the Employees' Thrift Plan of
Columbia Gas System ("Thrift Plan"), which is qualified under the requirements
of Sections 401(a) and 401(k) of the Internal Revenue Code. Sixteen of
Columbia's subsidiaries, including TCO, (the "Subsidiaries") are Thrift Plan
participating employers, whose employees, former employees and beneficiaries
constitute the participants.
Under the Thrift Plan, participants are able to self-direct their
savings deposits as well as employer matching contributions (if over age 55)
into 14 investment options, including a Money Market/Investment Contract Fund
(the "Fund"). The Fund currently holds one guaranteed investment contract
issued by Confederation Life Insurance Company of Canada ("Confederation
Life"). The Confederation Life contract was acquired by the plan on January 2,
1990 in the amount of $6,500,000. The five-year contract, which has a stated
interest rate of 8.8%, expired on January 1, 1995. On August 12, 1994,
Canadian governmental authorities seized Confederation Life and froze its
assets because of the insurer's financial condition. To ensure the financial
viability of Confederation Life commitments in the United States, the State of
Michigan froze all assets of Confederation Life in the U.S. until a
rehabilitation/liquidation plan can be secured. At the time Confederation Life
was seized, 17 percent of the assets in the Fund were attributable to the
Confederation Life contract. Those assets were segregated into a subaccount
and frozen. Current estimates are that, ultimately, full recovery of the
Confederation Life investment will occur, although the payout is not likely for
several years.
To alleviate the hardship on the participants and to further
employee relations, Columbia and TCO propose, subject to the receipt of
necessary approvals, to make loans to the Thrift Plan in an amount equal to the
value of the frozen subaccount. Columbia and TCO have sought the approval of
the Department of Labor as well as the U. S. Bankruptcy Court for the
<PAGE> 2
Page 2
District of Delaware for the loan. Upon receiving Bankruptcy Court approval,
TCO, a non-utility subsidiary, would be exempt from seeking approval of the
Commission for the proposed transaction pursuant to Rule 49(c).
The total amount of the loans would be approximately $6.8 million,
which represents the accumulated value of the frozen investment in the
Confederation Life contract, including accrued interest, as of the close of
business on August 11, 1994 (the date that Confederation Life's assets were
seized). Columbia's loan would be no more than $4.3 million. The loans would
be unsecured and interest-free, would be evidenced by notes and would be
non-recourse to participants or plan assets. Repayment of the loans would be
made only from proceeds received from Confederation Life (from the liquidation
and rehabilitation proceedings or otherwise), state guaranty funds, and other
sources, including litigation, in connection with the Confederation Life
contract. Periodically as amounts are received from Confederation Life, state
guaranty funds and other sources with regard to the Confederation Life account,
the proceeds would be paid to Columbia and/or TCO, as the case may be, and the
amounts of the loans would be reduced accordingly.
The application-declaration and any amendments thereto are
available for public inspection through the Commission's Office of Public
Reference. Interested persons wishing to comment or request a hearing should
submit their views in writing by ____________________, 1995, to the Secretary,
U.S. Securities and Exchange Commission, Washington, D.C. 20549, and serve a
copy on the applicant-declarant at the address specified above. Proof of
service (by affidavit or, in case of an attorney-at-law, by certificate) should
be filed with the request. Any request for a hearing shall identify
specifically the issues of fact or law that are disputed. A person who so
requests will be notified of any hearing, if ordered, and will receive a copy
of any notice or order issued in this matter. After said date, the
application-declaration, as filed or as it may be amended, may be permitted to
become effective.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary
