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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event Reported) February 10, 1995
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THE COLUMBIA GAS SYSTEM, INC.
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-1098 13--1594808
- ---------------------------- ----------- -------------------
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
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
February 9, 1995, is incorporated herein by reference.
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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 and
Controller
Date: February 10, 1995
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Contacts: Media - H. W. Chaddock (302) 429-5261
Analysts - T. L. Hughes (302) 429-5363
K. P. Murphy (302) 429-5471
FOR IMMEDIATE RELEASE February 9, 1995
COLUMBIA GAS ANNOUNCES IMPROVED 1994 EARNINGS
WILMINGTON, DEL. -- The Columbia Gas System, Inc. (NYSE:CG),
today announced net income for 1994 of $240.6 million, or $4.76 per share, a 58
percent increase over 1993 net income of $152.2 million, or $3.01 per share.
In the fourth quarter, the Corporation reported net income of
$73.2 million, or $1.45 per share, as compared to $69.4 million, or $1.37 per
share, in the fourth quarter of 1993.
Columbia System Chairman John H. Croom said increases in both
the annual and fourth quarter earnings are primarily due to the net effect of
unusual and bankruptcy-related costs between the two periods. He pointed out
that all of Columbia's basic business units continue to perform well,
demonstrating the underlying strength of their operations and their abilities
to operate effectively in the gas industry's new competitive climate.
After being adjusted for unusual and bankruptcy-related items,
1994 net income was $157.9 million, essentially unchanged from adjusted net
income of $160.4 million in 1993. Fourth quarter adjusted income was $68.6
million, as compared to $63.3 million in the same period last year.
The major bankruptcy issue reflected in the adjusted earnings
is a computation for interest expense on the Corporation's prepetition debt
obligations. On an after-tax basis, this amounted to $144.2 million in 1994
and $134.5 million in 1993. In the fourth quarter, the reduction for interest
expense was $37.6 million in 1994 and $34.4 million in 1993.
The Columbia Gas System, Inc. and Columbia Gas Transmission
Corp., its principal pipeline subsidiary, have been operating as debtors in
possession under Chapter 11 of the U. S. Bankruptcy Code since July 31, 1991.
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2
Croom pointed out that the Chapter 11 proceedings have not
affected the ability of the Corporation or any of its subsidiaries to
effectively compete in the energy marketplace. "Columbia companies continue to
seek out opportunities for future growth. Typical of these are Columbia's new
Energy Market Center and the new natural gas peaking service to be initiated
later this year at the Cove Point, Maryland, liquefied natural gas facility,"
he said.
TWELVE MONTHS RESULTS
The transmission segment's 1994 operating income increased
$26.7 million to $205.4 million. This was due largely to the $57.5 million
writedown in 1993 of the Corporation's investment in Columbia LNG, the
recording of $66.7 million for environmental reserves in 1993, and increased
demand for firm transportation services in 1994. Offsetting these improvements
was the net effect of several unusual items in both periods, including a $35
million reserve in 1994, for customer settlements and regulatory issues.
Operating income for the distribution segment declined $18.1
million in 1994 to $128.3 million. This reduction was due to warmer weather in
the fourth quarter and higher operating costs which depressed the beneficial
effect of new rates attained through regulatory settlements. The increase in
operating costs was due in part to implementing new programs designed to
improve customer service. The effect of the warmer weather was offset somewhat
by pilot weather normalization adjustments that have been implemented in some
states to moderate the impact that temperatures have on customer bills and
distribution income.
Operating income for the oil and gas segment in 1994 was $30.6
million, down $23 million from 1993. This reduction was principally due to
seven percent lower oil prices, four percent lower gas prices and a seven
percent decrease in gas production in 1994. This was mitigated by the effect
of reversing, in 1994, $4.9 million of a $5.4 million reserve established in
1993 for a royalty dispute with the U.S. Minerals Management Service.
Operating income for other energy operations increased $15.8
million in 1994 to $17.5 million. This was due largely to a 1993 charge of
$6.3 million for costs associated with the Columbia Gas System Service
Corporation's reengineering program and improved results by the propane and gas
marketing companies.
FOURTH QUARTER RESULTS
Fourth quarter operating income for the transmission segment
was $36.1 million, a $34.9 million decline from the same period in 1993,
principally due to the $35 million reserve that
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3
was recorded during the current period for regulatory issues. Several other
unusual items recorded during both periods essentially offset one another and
had no effect on year-to-year comparisons.
The distribution segment had fourth quarter operating income
of $56.3 million in 1994, essentially unchanged from 1993. The effect of
warmer temperatures that were almost 20 percent warmer than the same period in
1993 and higher operating expenses was offset by pilot weather normalization
adjustments and higher rates resulting from regulatory settlements.
Lower gas prices and reduced oil and liquids production
reduced oil and gas segment operating income in the fourth quarter to $3.2
million, down $12.2 million from 1993. Average gas prices were down 15 percent
and oil and liquids production was off 13 percent during the current period.
This was somewhat offset by a 10 percent increase in the average price for oil
and liquids.
Operating income of $4.4 million for the other energy
operations reflected a small decrease of $600,000.
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4
THE COLUMBIA GAS SYSTEM, INC.
Summary of Financial and Operating Data
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended December 31 Ended December 31
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1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income Statement Data
($ millions)
Total Operating Revenue . . . . . 769.0 1,010.2 2,833.4 3,391.2
Income Before
Accounting Change . . . . . . . . . 73.2 69.4 246.2 152.2
Net Income . . . . . . . . . . . . . 73.2 69.4 240.6a 152.2
Operating Income (Loss)
By Segment:
Transmission . . . . . . . . . . 36.1b 71.0 205.4b 178.7c
Distribution . . . . . . . . . . 56.3 56.2 128.3 146.4
Oil and Gas . . . . . . . . . . 3.2 15.4 30.6 53.6
Other Energy . . . . . . . . . . 4.4 5.0 17.5 1.7
Corporate . . . . . . . . . . . (2.4) (1.3) (8.6) (7.0)
-------- -------- -------- ---------
Total . . . . . . . . . . . . . 97.6 146.3 373.2 373.4
======== ======== ======== =========
Per Share Data
Earnings Before
Accounting Change ($) . . . . . . . 1.45 1.37 4.87 3.01
Earnings on Common
Stock ($) . . . . . . . . . . . . . 1.45 1.37 4.76a 3.01
Average Common Shares
Outstanding (millions) . . . . . . . 50.6 50.6 50.6 50.6
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a Includes the adoption of SFAS No. 112, "Employers Accounting for
Postemployment Benefits".
b Includes establishing a $35 million reserve for regulatory issues.
c Includes a $57.5 million writedown in the investment in Columbia LNG
Corporation's Cove Point LNG facility.
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5
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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1994 1993 1994 1993
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<S> <C> <C> <C> <C>
Operating Data
Oil and Gas Volumes:
Gas Production
(billion cubic feet) . . . . . . . . . 16.9 16.9 66.7 71.5
Oil Production
(000 barrels) . . . . . . . . . . . . . 823 945 3,611 3,603
Transmission (billion
cubic feet):
Transportation
Columbia Transmission
Market Area . . . . . . . . . . 288.4 299.8 1,038.6 895.9
Columbia Gulf
Main-line . . . . . . . . . . . 114.6 154.1 590.3 579.9
Short-haul . . . . . . . . . . . 157.5 174.9 595.9 625.1
Intrasegment
Eliminations . . . . . . . . . . . . . . (271.1) (255.2) (953.7) (928.7)
------- ------- -------- --------
Total Transportation . . . . . . . . . 289.4 373.6 1,271.1 1,172.2
------- ------- -------- --------
Sales . . . . . . . . . . . . . . . . 0.0 17.4 0.9 183.7
------- ------- -------- --------
Total Throughput . . . . . . . . . . . . . 289.4 391.0 1,272.0 1,355.9
======= ======= ======== ========
Distribution (billion
cubic feet):
Gas Sales . . . . . . . . . . . . . . 75.8 93.6 280.5 292.3
Transportation . . . . . . . . . . . . 64.5 57.1 232.5 217.5
------- ------- -------- --------
Total Throughput . . . . . . . . . . . . . . 140.3 150.7 513.0 509.8
======= ======= ======== ========
Degree Days-Distribution
Service Territory
Actual . . . . . . . . . . . . . . 1,671 2,080 5,530 5,677
Normal . . . . . . . . . . . . . . 2,032 2,032 5,600 5,598
% Colder (warmer) than
normal . . . . . . . . . . . . . . (18) 2 (1) 1
% Colder (warmer) than
prior period . . . . . . . . . . . (20) 3 (3) 3
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