<PAGE> 1
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
COLUMBIA ENERGY SERVICES CORPORATION
121 Hill Pointe Drive, Suite 100
Canonsburg, PA 15317
COLUMBIA COAL GASIFICATION CORPORATION
COLUMBIA NATURAL RESOURCES, INC.
900 Pennsylvania Avenue
Charleston, WV 25362
------------------------------------------------------------------------------
(Names of company or companies filing this statement
and addresses of principal executive offices)
L. J. Bainter, Treasurer
The Columbia Gas System, Inc.
20 Montchanin Road
Wilmington, DE 19807
Robert Gustafson, Controller
Columbia Energy Services Corporation
121 Hill Pointe Drive, Suite 100
Canonsburg, PA 15317
M. A. Chandler, Treasurer
Columbia Coal Gasification Corporation
Columbia Natural Resources, Inc.
900 Pennsylvania Avenue
Charleston, WV 25362
------------------------------------------------------------------------------
(Name and address of agent for service)
<PAGE> 2
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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
The Columbia Gas System, Inc. ("Columbia"), Columbia Energy Services
Corporation ("CES"), Columbia Natural Resources, Inc. ("CNR") and Columbia
Coal Gasification Corporation ("CGC") are parties to this application
declaration seeking authorization to effect restructuring of these subsidiaries
as described below.
CES, a Kentucky corporation, is a wholly owned, nonutility subsidiary
of Columbia engaged in the energy marketing business. Columbia and CES request
authorization to reincorporate CES in Delaware via a merger into a newly-formed
successor corporation for the sole purpose of converting CES from a Kentucky to
a Delaware corporation.
CNR, a Texas corporation, is a wholly owned, nonutility subsidiary of
Columbia engaged in the exploration for and production of natural gas in the
Appalachian region. CGC, a Delaware corporation and wholly owned nonutility
subsidiary of Columbia, leases coal reserves in the Appalachian region from
CNR. Columbia proposes to transfer its shares of CGC common stock to CNR and
effect a merger of CGC into CNR.
REINCORPORATION OF CES
For the reasons described below, CES has decided to reincorporate in
Delaware. Under a Plan of Reorganization and Merger (Exhibit B-1), CES will be
merged into CES (DE), a newly formed Delaware corporation which will, by virtue
of the merger, become a wholly owned subsidiary of Columbia. CES (DE) will
succeed to all of the rights and properties of CES and will
<PAGE> 3
PAGE 3
assume all of its liabilities and obligations. The officers and directors of
CES will become the officers and directors of CES (DE). The merger will
qualify as a tax-free reorganization under Sections 368(a)(1)(A) and (F) of the
Internal Revenue Code. No additional capital financing will occur as a result
of this transaction.
CES's decision to reincorporate in Delaware is based on the following
factors:
1) A majority of Columbia's subsidiaries are already incorporated in
Delaware. Further, Delaware has followed a policy of encouraging incorporation
in that state and, in furtherance of that policy, has adopted comprehensive,
modern, and flexible corporation laws that are periodically updated and revised
to meet changing business needs. Delaware courts have developed considerable
expertise in dealing with corporate legal issues, and a substantial body of
case law has developed construing the Delaware law and establishing public
policy with respect to Delaware corporations. As a result, many major
corporations have chosen Delaware for their initial domicile or have
subsequently reincorporated in Delaware, in a manner similar to that proposed
by CES. The favorable business corporation laws of Delaware should benefit CES
by allowing CES to conduct its affairs in a more flexible and efficient manner.
2) Kentucky, the current state of incorporation of CES, imposes a tax
on intangible property. The Columbia Energy Market Center, currently a
division of CES, licenses and sublicenses commodity trading software for
purposes of operating The Fast Lane(TM) ("The Fast Lane") an electronic
bulletin board for the trading of natural gas. While the impact of such tax is
not currently significant, the tax would become increasingly significant if
revenues generated by The Fast Lane(TM) grow.
<PAGE> 4
PAGE 4
MERGER OF CGC AND CNR
Columbia currently owns all 1,939,000 outstanding shares of common
stock of CGC. Columbia requests authorization to transfer these shares to CNR
pursuant to an Agreement and Plan of Merger, a form of which is included in
this Application-Declaration as Exhibit B-2.
The transaction would involve an exchange of 1,939,000 shares of CGC
common stock, $25 par value per share, for approximately 343,000 shares of CNR
common stock, $25 par value per share. The actual number of shares of CNR
stock exchanged will depend upon the net book value of CGC on the effective
date. Based upon the net book value of CGC as of February 29, 1996 of $8.581
million, 343,245 CNR shares would be issued to Columbia and the 1,939,000
shares of CGC would be canceled. The proposed transaction will qualify as a
tax-free reorganization under Section 368(a)(1)(A) of the Internal Revenue Code
of 1986, as amended.
This exchange will make CNR the parent corporation of CGC and the
temporary owner of 100% of CGC's outstanding shares. Promptly thereafter CGC
will be merged into CNR pursuant to Article 5.16 of the Texas Business
Corporation Act. Upon the merger, CNR will succeed to all of the rights and
properties of CGC and will assume all of its liabilities and obligations.
Columbia has determined there will be an improvement in operating
efficiency and economy of administration as a result of the proposed merger and
the resulting company may realize certain state tax benefits that might not be
realized as separate operating companies.
<PAGE> 5
PAGE 5
SUMMARY OF AUTHORIZATION REQUESTED
1. Columbia and CES request authorization to reincorporate CES in
Delaware via a merger into a newly-formed successor corporation.
2. Columbia requests authorization to effect a merger of CGC into
CNR by transferring all of the outstanding shares of CGC common stock to CNR in
exchange for shares of CNR common stock and merging CGC into CNR.
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.
Columbia Gas System Service Corporation has provided certain
services in connection with the preparation of this filing as follows:
<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 . . . . . 15,000
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,000
========
</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 any applicant or declarant, or is an affiliate of an associate
company, set forth the facts with respect thereto.
Columbia Gas System Service Corporation is a wholly owned
subsidiary of Columbia and has performed certain services at cost as set forth
in Item 2(a)(1) above.
<PAGE> 6
PAGE 6
Item 3. Applicable Statutory Provisions.
(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 absence of a specific exemption, state the basis of exemption.
The issuance of common stock by CES (DE) and CNR will be made pursuant
to Sections 6(a) and 7 and Rule 43. Sections 9(a), 10 and 12(f) are deemed
applicable to the acquisition of the capital stock and notes of
newly-incorporated CES and CGC by CG and CNR, respectively, as described above.
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, a request for such authorization, approval or exemption is
hereby made.
CG, CES, CNR and CGC do not own, operate or are not equity
participants in any Exempt Wholesale Generator or any Foreign Utility Company
and will not be companies that own, operate or have equity participation in an
Exempt Wholesale Generator or Foreign Utility Company as a result of the
approvals requested herein. CG, CES, CNR and CGC do not have any rights, nor
will they have any rights or obligations under a service, sales or construction
contract with an Exempt Wholesale Generator or Foreign Utility Companuy as a
result of the proposed transactions.
(b) If any applicant is not a registered holding company or a
subsidiary thereof, state the name of each public utility company of which it
is an affiliate, or of which it will become an affiliate a result of the
proposed transaction, and the reasons why it is or will become such an
affiliate.
Not applicable
<PAGE> 7
PAGE 7
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, no approval or consent of any regulatory
body other than the Commission is necessary for the consummation of the
proposed transactions.
(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.
Not applicable.
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 forth the
reasons for acceleration.
It is respectfully requested that the Commission issue its
notice by April 26, 1996, and its order on or by May 31, 1996.
(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.
The Applicants hereby (i) waive a recommended decision by a
hearing officer, (ii) waive a recommended decision by any other responsible
officer of the Commission, (iii) specify that the Division of Investment
Management may assist in the preparation of the Commission's decision, and (iv)
specifies that there should not be a 30-day waiting period between the issuance
of the Commission's order and the date on which it is to become effective.
<PAGE> 8
PAGE 8
Item 6. Exhibits and financial Statements.
(a) Exhibits
B-1 Form of Plan of Reorganization and Merger for CES (to
be filed by amendment).
B-2 Form of Agreement and Plan of Merger among Columbia,
CNR and CGC (to be filed by amendment).
F Opinion of Counsel (to be filed by amendment).
G Financial Data Schedules.
H Draft Notice.
(b) Financial Statements
(1) The Columbia Gas System, Inc. and Consolidated
Subsidiaries
(a) Balance Sheets as of February 29, 1996
(actual and pro forma).
(b) Statements of Capitalization as of February
29, 1996 (actual and pro forma).
(c) Statements of Income for the Twelve Months
ended February 29, 1996 (actual and pro
forma).
(d) Statements of Common Stock Equity as of
February 29, 1996 (actual and pro forma).
(2) The Columbia Gas System, Inc.
(a) Balance Sheets a of February 29, 1996 (actual
and pro forma).
(b) Statements of Capitalization a of February
29, 1996 (actual and pro forma).
(c) Statements of Income for the Twelve Months
ended February 29, 1996 (actual and pro
forma).
<PAGE> 9
PAGE 9
(d) Statements of Common Stock Equity a of
February 29, 1996 (actual and pro forma).
(e) Pro forma entries.
(3) Columbia Natural Resources, Inc.
(a) Balance Sheets as of February 29, 1996
(actual and pro forma).
(b) Statements of Capitalization as of February
29, 1996 (actual and pro forma).
(c) Statements of Income for the Twelve Months
ended February 29, 1996 (actual and pro
forma).
(d) Statements of Common Stock Equity as of
February 29, 1996 (actual and pro forma).
(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.
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 item 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 transactions
relate only to establishment of a subsidiary company and corporate governance
issues and have no environmental impact in and of themselves.
(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.
<PAGE> 10
PAGE 10
No federal agency has prepared or is preparing an EIS with
respect to the proposed transaction.
<PAGE> 11
PAGE 11
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, each of the undersigned companies has duly caused this Declaration to
be signed on its behalf by the undersigned thereunto duly authorized.
The signatures of the Declarants 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: April 19, 1996 By: /s/ L. J. BAINTER
----------------------------------
L. J. Bainter
Treasurer
COLUMBIA ENERGY SERVICES CORPORATION
COLUMBIA COAL GASIFICATION CORPORATION
COLUMBIA NATURAL RESOURCES, INC.
Date: April 19, 1996 By: /s/ L. J. BAINTER
----------------------------------
L. J. Bainter
Vice President
<PAGE> 12
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES UNAUDITED
6(b)(1)(a)
(1 of 2)
CONSOLIDATED BALANCE SHEET
ACTUAL and PRO FORMA
As of February 29, 1996
($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 .... 6,704,360 - 6,704,360
Accumulated depreciation and depletion ........... (3,189,253) - (3,189,253)
----------- ----------- -----------
Net Gas Utility and Other Plant .................. 3,515,107 - 3,515,107
----------- ----------- -----------
Oil and gas producing properties, full cost method 516,401 - 516,401
Accumulated depletion ............................ (144,953) - (144,953)
----------- ----------- -----------
Net Oil and Gas Producing Properties ............. 371,448 - 371,448
----------- ----------- -----------
Net Property, Plant, and Equipment ................. 3,886,555 - 3,886,555
----------- ----------- -----------
Investments and Other Assets
Accounts receivable - noncurrent ................. 115,454 - 115,454
Unconsolidated affiliates ........................ 70,406 - 70,406
Assets held for sale.............................. 166,557 - 166,557
Other ............................................ 2,375 - 2,375
----------- ----------- -----------
Total Investments and Other Assets ................. 354,792 - 354,792
----------- ----------- -----------
Current Assets
Cash and temporary cash investments .............. 13,084 - 13,084
Accounts receivable, net ......................... 678,159 - 678,159
Income tax refunds ............................... 271,532 - 271,532
Gas inventories .................................. 51,903 - 51,903
Other inventories at average cost ................ 42,532 - 42,532
Prepayments ...................................... 39,896 - 39,896
Current regulatory assets......................... 75,744 - 75,744
Other ............................................ 206,946 - 206,946
----------- ----------- -----------
Total Current Assets ............................... 1,379,796 - 1,379,796
----------- ----------- -----------
Deferred Charges ................................... 50,205 - 50,205
Longterm Regulatory Assets.......................... 416,213 - 416,213
----------- ----------- -----------
Total Assets ....................................... 6,087,561 - 6,087,561
=========== =========== ===========
</TABLE>
<PAGE> 13
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES UNAUDITED
6(b)(1)(a)
(2 of 2)
CONSOLIDATED BALANCE SHEET
ACTUAL and PRO FORMA
As of February 29, 1996
($000)
<TABLE>
<CAPTION>
CGS Pro Forma CGS
Actual Entries Pro Forma
----------- ----------- -----------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock equity .............................. 506,380 - 506,380
Additional paid in capital........................ 596,209 - 596,209
Retained earnings................................. 164,604 - 164,604
Reacquired capital stock.......................... (57,807) - (57,807)
Long-term debt ................................... 2,004,301 - 2,004,301
----------- ----------- -----------
Total Capitalization ............................... 3,213,687 - 3,213,687
----------- ----------- -----------
Current Liabilities
Short term debt................................... 635,000 - 635,000
Debt obligations ................................. 633 - 633
Accounts and drafts payable ...................... 194,081 - 194,081
Accrued taxes .................................... 280,855 - 280,855
Accrued interest ................................. 119,530 - 119,530
Estimated rate refunds ........................... 89,235 - 89,235
Estimated supplier obligations ................... 169,005 - 169,005
Deferred income taxes - current .................. - - -
Other ............................................ 431,993 - 431,993
----------- ----------- -----------
Total Current Liabilities .......................... 1,920,332 - 1,920,332
----------- ----------- -----------
Other Liabilities and Deferred Credits
Deferred income taxes, noncurrent ................ 478,231 - 478,231
Deferred investment tax credits .................. 38,364 - 38,364
Postretirement benefits other than pensions ...... 203,141 - 203,141
Longterm regulatory liabilities................... 45,197 - 45,197
Other ............................................ 188,609 - 188,609
----------- ----------- -----------
Total Other Liabilities and Deferred Credits ....... 953,542 - 953,542
----------- ----------- -----------
Total Capitalization and Liabilities ............... 6,087,561 - 6,087,561
=========== =========== ===========
</TABLE>
<PAGE> 14
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES UNAUDITED
6(b)(1)(b)
CONSOLIDATED STATEMENT OF CAPITALIZATION
ACTUAL and PRO FORMA
As of February 29, 1996
($000)
<TABLE>
<CAPTION>
CGS Pro Forma CGS
Actual Entries Pro Forma
----------- ----------- -----------
<S> <C> <C> <C>
Common Stock Equity
Common Stock, The Columbia Gas System, Inc.,
$10 par value, authorized 100,000,000 shares,
issued 50,638,000, outstanding 49,221,845 shares 506,380 - 506,380
Additional paid in capital ....................... 596,209 - 596,209
Retained earnings ................................ 164,604 - 164,604
Reacquired capital stock (1,416,155 shares).............. (57,807) - (57,807)
Unearned employee compensation ................... - - -
----------- ----------- -----------
Total Common Stock Equity ......................... 1,209,386 - 1,209,386
----------- ----------- -----------
Long-Term Debt:
Debentures:
6.39% due November 2000 ......................... 310,876 - 310,876
6.61% due November 2002.......................... 281,530 - 281,530
6.80% due November 2005 ......................... 281,530 - 281,530
7.05% due November 2007 ......................... 281,530 - 281,530
7.32% due November 2010 ......................... 281,530 - 281,530
7.42% due November 2015 ......................... 281,530 - 281,530
7.62% due November 2025 ......................... 281,530 - 281,530
----------- ----------- -----------
Total Debentures ................................. 2,000,056 - 2,000,056
Miscellaneous debt of subsidiaries ............... 1,420 - 1,420
Capitalized lease obligations .................... 2,825 - 2,825
----------- ----------- -----------
Total Long-Term Debt ............................... 2,004,301 - 2,004,301
----------- ----------- -----------
Total Capitalization ............................... 3,213,687 - 3,213,687
=========== =========== ===========
</TABLE>
<PAGE> 15
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES UNAUDITED
6(b)(1)(c)
STATEMENT OF CONSOLIDATED INCOME
ACTUAL and PRO FORMA
Twelve Months Ended February 29, 1996
($000)
<TABLE>
<CAPTION>
CGS Pro Forma CGS
Actual Entries Pro Forma
----------- ----------- -----------
<S> <C> <C> <C>
Operating Revenues
Gas sales......................................... 1,998,120 - 1,998,120
Transportation ................................... 480,008 - 480,008
Storage .......................................... 62,652 - 62,652
Other ............................................ 146,190 - 146,190
----------- ----------- -----------
Total Operating Revenues ........................... 2,686,970 - 2,686,970
----------- ----------- -----------
Operating Expenses
Products purchased .............................. 861,983 - 861,983
Operation ........................................ 812,919 - 812,919
Maintenance ...................................... 115,950 - 115,950
Depreciation and depletion ....................... 259,711 - 259,711
Other taxes ...................................... 209,041 - 209,041
----------- ----------- -----------
Total Operating Expenses ........................... 2,259,604 - 2,259,604
----------- ----------- -----------
Operating Income ................................... 427,366 - 427,366
----------- ----------- -----------
Other Income (Deductions)
Interest income and other, net ................... (57,320) - (57,320)
Interest expense and related charges.............. (1,015,318) - (1,015,318)
Reorganization items, net ........................ 8,042 - 8,042
----------- ----------- -----------
Total Other Income (Deductions) .................... (1,064,596) - (1,064,596)
----------- ----------- -----------
Loss before Income Taxes, Extraordinary Item and
Cummulative Effect of Accounting Change .................... (637,230) - (637,230)
Income taxes ....................................... (210,716) - (210,716)
----------- ----------- -----------
Loss before Extraordinary Item and Cummulative
Effect of Accounting Change ...................... (426,514) - (426,514)
Extraordinary Item ................................ 71,575 - 71,575
Cummulative Effect of Change in Accounting for
Postemployment Benefits .......................... - - -
----------- ----------- -----------
Net Loss ......................................... (354,939) - (354,939)
=========== =========== ===========
</TABLE>
<PAGE> 16
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES UNAUDITED
6(b)(1)(d)
CONSOLIDATED STATEMENTS OF COMMON STOCK EQUITY
ACTUAL and PRO FORMA
Twelve Months Ended February 29, 1996
($000)
<TABLE>
<CAPTION>
CGS Pro Forma CGS
Actual Entries Pro Forma
----------- ----------- -----------
<S> <C> <C> <C>
COMMON STOCK
Balance at March 1, 1995 ........................... 505,634 - 505,634
Common stock issued -
Leveraged employee stock ownership plan (LESOP) .. - - -
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... 746 - 746
Public offering .................................. - - -
----------- ----------- -----------
Balance at February 29, 1996 ....................... 506,380 - 506,380
----------- ----------- -----------
ADDITIONAL PAID IN CAPITAL
Balance at March 1, 1995 ........................... 601,828 - 601,828
Common stock issued -
Leveraged employee stock ownership plan (LESOP) .. (7,903) - (7,903)
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... 2,284 - 2,284
Public offering .................................. - - -
Preferred stock issued ............................. - - -
----------- ----------- -----------
Balance at February 29, 1996 ....................... 596,209 - 596,209
----------- ----------- -----------
RETAINED EARNINGS
Balance at March 1, 1995 ........................... 526,926 - 526,926
Net income ......................................... (354,939) - (354,939)
Common stock dividends ............................. (7,383) - (7,383)
Other .............................................. - - -
----------- ----------- -----------
Balance at February 29, 1996 ....................... 164,604 - 164,604
----------- ----------- -----------
Reacquired Capital Stock .......................... (57,807) - (57,807)
----------- ----------- -----------
UNEARNED EMPLOYEE COMPENSATION
Balance at March 1, 1995 ........................... (69,966) - (69,966)
Adjustment ......................................... 69,966 - 69,966
----------- ----------- -----------
Balance at February 29, 1996 ....................... - - -
----------- ----------- -----------
Total Common Stock Equity 1,209,386 - 1,209,386
=========== =========== ===========
</TABLE>
<PAGE> 17
COLUMBIA NATURAL RESOURCES, INC. UNAUDITED
6(b)(3)(a)
(1 of 2)
BALANCE SHEET
ACTUAL and PRO FORMA
As of February 29, 1996
($000)
<TABLE>
<CAPTION>
CNR Pro Forma CNR
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Property, Plant and Equipment
Gas Utility and Other Plant ...................... - 12,336 12,336
Accumulated Depreciation and Depletion ........... - 236 236
------------ ------------ ------------
Net Gas Utility and Other PP&E ................... - 12,100 12,100
------------ ------------ ------------
Oil and gas producing properties, full cost method 515,526 - 515,526
Accumulated depletion ............................ (282,668) - (282,668)
------------ ------------ ------------
Net Oil and Gas Producing Properties ............. 232,858 - 232,858
------------ ------------ ------------
Net Property, Plant, and Equipment ................. 232,858 - 232,858
------------ ------------ ------------
Investments and Other Assets
Accounts receivable - noncurrent ................. - - -
Unconsolidated affiliates ........................ - - -
Investment in Subsidiary ......................... - - -
Other ............................................ - - -
------------ ------------ ------------
Total Investments and Other Assets ................. - - -
------------ ------------ ------------
Current Assets
Cash and temporary cash investments .............. 801 143 944
Accounts receivable, net
Customers ...................................... 7,874 - 7,874
Affiliated ..................................... 30,994 4,927 35,921
Other .......................................... (483) 834 351
Other Inventories at Average Cost ................ 283 - 283
Prepayments ...................................... 1,267 1 1,268
Other ............................................ 1,507 43 1,550
------------ ------------ ------------
Total Current Assets ............................... 42,243 5,948 48,191
------------ ------------ ------------
Deferred Charges ................................... 1,181 5 1,186
------------ ------------ ------------
Total Assets ....................................... 276,282 18,053 294,335
============ ============ ============
</TABLE>
<PAGE> 18
COLUMBIA NATURAL RESOURCES, INC. UNAUDITED
6(b)(3)(a)
BALANCE SHEET (2 of 2)
ACTUAL and PRO FORMA
As of February 29, 1996
($000)
<TABLE>
<CAPTION>
CNR Pro Forma CNR
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization
Common Stock Equity .............................. - - -
Subsidiaries common stock ........................ 125,716 8,553 134,269
Additional paid in capital ....................... - 51,922 51,922
Retained earnings ................................ 7,174 (51,922) (44,748)
Installment promissory notes payable.............. 34,129 3,013 37,142
Long-term debt ................................... - - -
------------ ------------ ------------
Total Capitalization ............................... 167,019 11,566 178,585
------------ ------------ ------------
Current Liabilities
Debt obligations ................................. - - -
Accounts and drafts payable ...................... 5,141 50 5,191
Affiliated Notes and Loans - Current Maturities .. 5,209 700 5,909
Affiliated Short Term Notes ...................... - - -
Affiliated accounts payable ...................... 1,102 139 1,241
Accrued taxes .................................... 9,118 2,722 11,840
Accrued interest ................................. 803 194 997
Other ............................................ 7,841 63 7,904
------------ ------------ ------------
Total Current Liabilities .......................... 29,214 3,868 33,082
------------ ------------ ------------
Other Liabilities and Deferred Credits
Deferred income taxes, noncurrent ................ 72,457 2,278 74,735
Postretirement benefits other than pensions ...... 5,401 240 5,641
Other ............................................ 2,191 101 2,292
------------ ------------ ------------
Total Other Liabilities and Deferred Credits ....... 80,049 2,619 82,668
------------ ------------ ------------
Total Capitalization and Liabilities ............... 276,282 18,053 294,335
============ ============ ============
</TABLE>
<PAGE> 19
COLUMBIA NATURAL RESOURCES, INC. UNAUDITED
6(b)(3)(b)
STATEMENT OF CAPITALIZATION
ACTUAL and PRO FORMA
As of February 29, 1996
($000)
<TABLE>
<CAPTION>
CNR Pro Forma CNR
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
Common Stock Equity
Subsidiaries common stock ....................... 125,716 8,553 134,269
Additional paid in capital ....................... - 51,922 51,922
Retained earnings ................................ 7,174 (51,922) (44,748)
Unearned employee compensation ................... - - -
------------ ------------ ------------
Total Common Stock Equity ......................... 132,890 8,553 141,443
------------ ------------ ------------
Long-Term Debt
Installment Promissory Notes Payable ............. 34,129 3,013 37,142
------------ ------------ ------------
Total Long-Term Debt ............................... 34,129 3,013 37,142
------------ ------------ ------------
Total Capitalization ............................... 167,019 11,566 178,585
============ ============ ============
</TABLE>
<PAGE> 20
COLUMBIA NATURAL RESOURCES, INC. UNAUDITED
6(b)(3)(c)
STATEMENT OF INCOME
ACTUAL and PRO FORMA
Twelve Months Ended February 29, 1996
($000)
<TABLE>
<CAPTION>
CNR Pro Forma CNR
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
Operating Revenues
Gas Sales ........................................ 78,163 - 78,163
Transportation ................................... - - -
Other ............................................ 10,098 2,632 12,730
------------ ------------ ------------
Total Operating Revenues ........................... 88,261 2,632 90,893
------------ ------------ ------------
Operating Expenses
Products purchased ............................... - - -
Operation ........................................ 37,259 596 37,855
Maintenance ...................................... 171 - 171
Depreciation and depletion ....................... 22,746 20 22,766
Other taxes ...................................... 7,546 742 8,288
------------ ------------ ------------
Total Operating Expenses ........................... 67,722 1,358 69,080
------------ ------------ ------------
Operating Income (Loss) ............................ 20,539 1,274 21,813
------------ ------------ ------------
Other Income (Deductions)
Interest income and other, net ................... 3,303 67 3,370
Interest expense and related charges ............. (3,063) (127) (3,190)
------------ ------------ ------------
Total Other Income (Deductions) .................... 240 (60) 180
------------ ------------ ------------
Income before Income Taxes and Cummulative Effect
of Accounting Change ............................. 20,779 1,214 21,993
Income taxes ....................................... (8,099) 321 (7,778)
------------ ------------ ------------
Income before Cummulative Effect of Accounting
Change ........................................... 28,878 893 29,771
Cummulative Effect of Accounting for Postemployment
Benefits ......................................... - - -
------------ ------------ ------------
Net Income ......................................... 28,878 893 29,771
============ ============ ============
</TABLE>
<PAGE> 21
COLUMBIA NATURAL RESOURCES, INC. UNAUDITED
6(b)(3)(d)
STATEMENTS OF COMMON STOCK EQUITY
ACTUAL and PRO FORMA
Twelve Months Ended February 29, 1996
($000)
<TABLE>
<CAPTION>
CNR Pro Forma CNR
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
COMMON STOCK
Balance at March 1, 1995 ........................... 125,716 - 125,716
Common stock issued -
Subsidiaries ..................................... - 8,553 8,553
Leveraged employee stock ownership plan (LESOP) .. - - -
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... - - -
Public offering .................................. - - -
------------ ------------ ------------
Balance at February 29, 1996 ....................... 125,716 8,553 134,269
------------ ------------ ------------
ADDITIONAL PAID IN CAPITAL
Balance at March 1, 1995 ........................... - - -
Common stock issued -
Subsidiaries ..................................... - 51,922 51,922
Leveraged employee stock ownership plan (LESOP) .. - - -
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... - - -
Public offering .................................. - - -
Recapitalization ................................. - - -
Preferred stock issued ............................. - - -
------------ ------------ ------------
Balance at February 29, 1996 ....................... - 51,922 51,922
------------ ------------ ------------
RETAINED EARNINGS
Balance at March 1, 1995 ........................... 50,306 (52,815) (2,509)
Net income ......................................... 28,878 893 29,771
Common stock dividends -
CG ............................................... (72,010) - (72,010)
Subsidiaries (to CG) ............................. - - 0
Other .............................................. - - -
------------ ------------ ------------
Balance at February 29, 1996 ....................... 7,174 (51,922) (44,748)
------------ ------------ ------------
UNEARNED EMPLOYEE COMPENSATION
Balance at March 1, 1995 ........................... - - -
Adjustment ......................................... - - -
------------ ------------ ------------
Balance at February 29, 1996 ....................... - - -
------------ ------------ ------------
TOTAL COMMON STOCK EQUITY .......................... 132,890 8,553 141,443
============ ============ ============
</TABLE>
<PAGE> 22
COLUMBIA NATURAL RESOURCES, INC. UNAUDITED
6(b)(3)(e)
PRO FORMA ENTRIES
($000)
<TABLE>
<CAPTION>
Debit Credit
<S> <C> <C>
Retained Earnings 52,815
PP&E - Gas Utility and Other Plant 12,336
Cash & Temporary Cash Investments 143
Accounts Receivable - Affiliate 4,960
Accounts Receivable - Other 834
Prepayments 1
Other Current Assets 43
Deferred Charges 5
Operating Expenses - Operation 986
Depreciation & Depletions 20
Other Taxes 742
Interest Expense - Net 127
Income Taxes 321
Common Stock 8,553
Additional Paid-In Capital 51,922
Accumulated Depreciation 236
Accounts & Drafts Payable 50
Affiliate Notes & Loans - Current 700
Affiliate Accounts Payable 172
Accrued Taxes 2,722
Accrued Interest 194
Other Current Liabilities 63
Deferred Income Taxes - Noncurrent 2,278
Postretirement Benefits Other than Pensions 240
Other Noncurrent Liabilities 101
Installment Promissory Notes Payable 3,013
Operating Revenue - Other 3,022
Interest Income - Net 67
To record the exchange of 1,939,000 shares of CGC Common Stock ($25 par)
for 342,120 shares of CNR Common Stock and the resulting merger.
Affiliate Accounts Payable 33
Affiliate Accounts Receivable 33
To eliminate inter-co balances between CGC & CNR.
Operating Revenue - Other 390
Operating Expense - Operation 390
To eliminate inter-co transfers between CGC and CNR.
</TABLE>
<PAGE> 23
THE COLUMBIA GAS SYSTEM, INC. UNAUDITED
6(b)(2)(a)
(1 of 2)
BALANCE SHEET
ACTUAL and PRO FORMA
As of February 29, 1996
($000)
<TABLE>
<CAPTION>
CG Pro Forma CG
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Investments and Other Assets
Accounts receivable - noncurrent ................. 4,183 - 4,183
Unconsolidated affiliates ........................ - - -
Assets held for sale..... ........................ 166,557 - 166,557
------------ ------------ ------------
Total Investments and Other Assets ................. 170,740 - 170,740
------------ ------------ ------------
Investments in Subsidiaries
Capital stock .................................... 2,298,685 - 2,298,685
Equity in undistributed retained earnings ........ (242,753) - (242,753)
Installment promissory notes receivable .......... 616,015 - 616,015
Other investments ................................ 900,000 - 900,000
Other receivables - TCO .......................... - - -
------------ ------------ ------------
Total Investments in Subsidiaries .................. 3,571,947 - 3,571,947
------------ ------------ ------------
Current Assets
Cash and temporary cash investments .............. 1,892 - 1,892
Accounts receivable, net
Customers ...................................... 924 - 924
Affiliated ..................................... 220,889 - 220,889
Other .......................................... 9,173 - 9,173
Prepayments ...................................... 191 - 191
Other ............................................ - - -
------------ ------------ ------------
Total Current Assets ............................... 233,069 - 233,069
------------ ------------ ------------
Deferred Charges ................................... 21,309 - 21,309
------------ ------------ ------------
Total Assets ....................................... 3,997,065 - 3,997,065
============ ============ ============
</TABLE>
<PAGE> 24
THE COLUMBIA GAS SYSTEM, INC. UNAUDITED
6(b)(2)(a)
(2 of 2)
BALANCE SHEET
ACTUAL and PRO FORMA
As of February 29, 1996
($000)
<TABLE>
<CAPTION>
CG Pro Forma CG
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock equity .............................. 506,380 - 506,380
Preferred stock .................................. - - -
Additional Paid In Capital....................... 596,209 - 596,209
Retained Earnings................................. 164,604 - 164,604
Reacquired capital stock.......................... (57,807) - (57,807)
Long-term debt.................................... 2,000,056 - 2,000,056
------------ ------------ ------------
Total Capitalization ............................... 3,209,442 - 3,209,442
------------ ------------ ------------
Current Liabilities
Short term debt................................... 635,000 - 635,000
Debt obligations ................................. - - -
Accounts and drafts payable ...................... 2,272 - 2,272
Affiliated accounts payable ...................... 8,032 - 8,032
Accrued taxes .................................... (33,796) - (33,796)
Accrued interest ................................. 120,807 - 120,807
Deferred income taxes - current .................. 22,100 - 22,100
Other ............................................ 19,537 - 19,537
------------ ------------ ------------
Total Current Liabilities .......................... 773,952 - 773,952
------------ ------------ ------------
Other Liabilities and Deferred Credits
Postretirement benefits other than pensions ...... 5,617 - 5,617
Other ............................................ 8,054 - 8,054
------------ ------------ ------------
Total Other Liabilities and Deferred Credits ....... 13,671 - 13,671
------------ ------------ ------------
Total Capitalization and Liabilities ............... 3,997,065 - 3,997,065
============ ============ ============
</TABLE>
<PAGE> 25
THE COLUMBIA GAS SYSTEM, INC. UNAUDITED
6(b)(2)(b)
STATEMENT OF CAPITALIZATION
ACTUAL and PRO FORMA
As of February 29, 1996
($000)
<TABLE>
<CAPTION>
CG Pro Forma CG
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
Common Stock Equity
Common stock, $10 par value, authorized
100,000,000 shares, issued 50,638,000
shares, outstanding 49,221,845 shares 506,380 - 506,380
Additional paid in capital ....................... 596,209 - 596,209
Retained earnings ................................ 164,604 - 164,604
Reacquired captial stock (1,416,155 shares)....... (57,807) - (57,807)
Unearned employee compensation ................... - - -
------------ ------------ ------------
Total Common Stock Equity .......................... 1,209,386 - 1,209,386
------------ ------------ ------------
Preferred Stock
Series A ......................................... - - -
Series B ......................................... - - -
------------ ------------ ------------
Total Preferred Stock .............................. - - -
------------ ------------ ------------
Long-Term Debt:
Debentures:
6.39% due November 2000 ......................... 310,876 - 310,876
6.61% due November 2002.......................... 281,530 - 281,530
6.80% due November 2005 ......................... 281,530 - 281,530
7.05% due November 2007 ......................... 281,530 - 281,530
7.32% due November 2010 ......................... 281,530 - 281,530
7.42% due November 2015 ......................... 281,530 - 281,530
7.62% due November 2025 ......................... 281,530 - 281,530
------------ ------------ ------------
Total Debentures ................................. 2,000,056 - 2,000,056
------------ ------------ ------------
Total Long-Term Debt ............................... 2,000,056 - 2,000,056
------------ ------------ ------------
Total Capitalization ............................... 3,209,442 - 3,209,442
============ ============ ============
</TABLE>
<PAGE> 26
THE COLUMBIA GAS SYSTEM, INC. UNAUDITED
6(b)(2)(c)
STATEMENT OF INCOME
ACTUAL and PRO FORMA
Twelve Months Ended February 29, 1996
($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 ........................................ 29,409 - 29,409
Maintenance ...................................... - - -
Depreciation and depletion ....................... - - -
Other taxes ...................................... 371 - 371
------------ ------------ ------------
Total Operating Expenses ........................... 29,780 - 29,780
------------ ------------ ------------
Operating Income (Loss) ............................ (29,780) - (29,780)
------------ ------------ ------------
Other Income (Deductions)
Interest income and other, net ................... 357,702 - 357,702
Interest expense and related charges ............. (1,035,305) - (1,035,305)
Reorganization items, net ........................ (14,209) - (14,209)
------------ ------------ ------------
Total Other Income (Deductions) .................... (691,812) - (691,812)
------------ ------------ ------------
Loss before Income Taxes, Extraordinary Item and
Cummulative Effect of Accounting Change .......... (721,592) - (721,592)
Income Taxes ....................................... (366,653) - (366,653)
------------ ------------ ------------
Loss before Extraordinary Item and Cummulative
Effect of Accounting Change ...................... (354,939) - (354,939)
Extraordinary Item ................................. - - -
Cummulative Effect of Accounting for Postemployment
Benefits ......................................... - - -
------------ ------------ ------------
Net Loss ........................................... (354,939) - (354,939)
============= ============ ============
</TABLE>
<PAGE> 27
THE COLUMBIA GAS SYSTEM, INC. UNAUDITED
6(b)(2)(d)
STATEMENT OF COMMON STOCK EQUITY
ACTUAL and PRO FORMA
Twelve Months Ended February 29, 1996
($000)
<TABLE>
<CAPTION>
CG Pro Forma CG
Actual Entries Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
COMMON STOCK
Balance at March 1, 1995 ........................... 505,634 - 505,634
Common stock issued -
Subsidiaries ..................................... - - -
Leveraged employee stock ownership plan (LESOP) .. - - -
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... 746 - 746
Public offering .................................. - - -
------------ ------------ ------------
Balance at February 29, 1996 ....................... 506,380 - 506,380
------------ ------------ ------------
ADDITIONAL PAID IN CAPITAL
Balance at March 1, 1995 ........................... 601,828 - 601,828
Common stock issued -
Subsidiaries ..................................... - - -
Leveraged employee stock ownership plan (LESOP) .. (7,903) - (7,903)
Dividend reinvestment plan ....................... - - -
Long-term incentive plan ......................... 2,284 - 2,284
Public offering .................................. - - -
Preferred stock issued ............................. - - -
------------ ------------ ------------
Balance at February 29, 1996 ....................... 596,209 - 596,209
------------ ------------ ------------
RETAINED EARNINGS
Balance at March 1, 1995 ........................... 526,926 - 526,926
Net income ......................................... (354,939) - (354,939)
Common stock dividends -
CG ............................................... (7,383) - (7,383)
Subsidiaries (to CG) ............................. - - -
Other .............................................. - - -
------------ ------------ ------------
Balance at February 29, 1996 ....................... 164,604 - 164,604
------------ ------------ ------------
Reacquired Capital Stock ........................... (57,807) - (57,807)
------------ ------------ ------------
UNEARNED EMPLOYEE COMPENSATION
Balance at March 1, 1995 ........................... (69,966) - (69,966)
Adjustment ......................................... 69,966 - 69,966
------------ ------------ ------------
Balance at February 29, 1996 ....................... - - -
------------ ------------ ------------
Total Common Stock Equity .......................... 1,209,386 - 1,209,386
============ ============ ============
</TABLE>
<PAGE> 28
THE COLUMBIA GAS SYSTEM, INC. UNAUDITED
6(b)(2)(e)
PRO FORMA ENTRIES
($000)
<TABLE>
<CAPTION>
Debit Credit
<S> <C> <C>
Equity in Undistributed Retained Earnings - CGC 51,922
Investment in Capital Stock - CNR 60,475
Investment in Capital Stock - CGC 60,475
Equity in Undistributed Retained Earnings - CNR 51,922
</TABLE>
To record the exchange of 1,939,000 shares of CGC common stock ($25 par value)
for 342,120 shares of CNR common stock ($25 par value)
<PAGE> 29
PAGE 1
EXHIBIT INDEX
(a) Exhibits
B-1 Form of Plan of Reorganization and Merger for CES (to be
filed by amendment).
B-2 Form of Agreement and Plan of Merger among Columbia, CNR
and CGC (to be filed by amendment).
F Opinion of Counsel (to be filed by amendment).
G Financial Data Schedules
H Draft Notice
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 1
<NAME> CGS
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-START> MAR-01-1995 MAR-01-1995
<PERIOD-END> FEB-29-1996 FEB-29-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 3,515,107 3,515,107
<OTHER-PROPERTY-AND-INVEST> 726,240 726,240
<TOTAL-CURRENT-ASSETS> 1,379,796 1,379,796
<TOTAL-DEFERRED-CHARGES> 50,205 50,205
<OTHER-ASSETS> 416,213 416,213
<TOTAL-ASSETS> 6,087,561 6,087,561
<COMMON> 506,380 506,380
<CAPITAL-SURPLUS-PAID-IN> 596,209 596,209
<RETAINED-EARNINGS> 164,604 164,604
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,209,386 1,209,386
0 0
0 0
<LONG-TERM-DEBT-NET> 2,004,301 2,004,301
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 1,420 1,420
0 0
<CAPITAL-LEASE-OBLIGATIONS> 2,825 2,825
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,873,874 2,873,874
<TOT-CAPITALIZATION-AND-LIAB> 6,087,561 6,087,561
<GROSS-OPERATING-REVENUE> 2,686,970 2,686,970
<INCOME-TAX-EXPENSE> (210,716) (210,716)
<OTHER-OPERATING-EXPENSES> 2,259,604 2,259,604
<TOTAL-OPERATING-EXPENSES> 2,259,604 2,259,604
<OPERATING-INCOME-LOSS> 427,366 427,366
<OTHER-INCOME-NET> (49,278) (49,278)
<INCOME-BEFORE-INTEREST-EXPEN> 378,088 378,088
<TOTAL-INTEREST-EXPENSE> 1,015,318 1,015,318
<NET-INCOME> (354,939) (354,939)
0 0
<EARNINGS-AVAILABLE-FOR-COMM> (354,939) (354,939)
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> (7.06) (7.06)
<EPS-DILUTED> (7.06) (7.06)
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 2
<NAME> CG
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-START> MAR-01-1995 MAR-01-1995
<PERIOD-END> FEB-29-1996 FEB-29-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 3,742,687 3,742,687
<TOTAL-CURRENT-ASSETS> 233,069 233,069
<TOTAL-DEFERRED-CHARGES> 21,309 21,309
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 3,997,065 3,997,065
<COMMON> 506,380 506,380
<CAPITAL-SURPLUS-PAID-IN> 596,209 596,209
<RETAINED-EARNINGS> 164,604 164,604
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,209,386 1,209,386
0 0
0 0
<LONG-TERM-DEBT-NET> 2,000,056 2,000,056
<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> 787,623 787,623
<TOT-CAPITALIZATION-AND-LIAB> 3,997,065 3,997,065
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (366,653) (366,653)
<OTHER-OPERATING-EXPENSES> 29,780 29,780
<TOTAL-OPERATING-EXPENSES> 29,780 29,780
<OPERATING-INCOME-LOSS> (29,780) (29,780)
<OTHER-INCOME-NET> 343,493 343,493
<INCOME-BEFORE-INTEREST-EXPEN> 313,713 313,713
<TOTAL-INTEREST-EXPENSE> 1,035,305 1,035,305
<NET-INCOME> (354,939) (354,939)
0 0
<EARNINGS-AVAILABLE-FOR-COMM> (354,939) (354,939)
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> (7.06) (7.06)
<EPS-DILUTED> (7.06) (7.06)
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 3
<NAME> CNR
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-START> MAR-01-1995 MAR-01-1995
<PERIOD-END> FEB-29-1996 FEB-29-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 12,100
<OTHER-PROPERTY-AND-INVEST> 232,858 232,858
<TOTAL-CURRENT-ASSETS> 42,243 48,191
<TOTAL-DEFERRED-CHARGES> 1,181 1,186
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 276,282 294,335
<COMMON> 125,716 134,269
<CAPITAL-SURPLUS-PAID-IN> 0 51,922
<RETAINED-EARNINGS> 7,174 (44,748)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 132,890 141,443
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 34,129 37,142
<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> 109,263 115,750
<TOT-CAPITALIZATION-AND-LIAB> 276,282 294,335
<GROSS-OPERATING-REVENUE> 88,261 90,893
<INCOME-TAX-EXPENSE> (8,099) (7,778)
<OTHER-OPERATING-EXPENSES> 67,722 69,080
<TOTAL-OPERATING-EXPENSES> 67,722 69,080
<OPERATING-INCOME-LOSS> 20,539 21,813
<OTHER-INCOME-NET> 3,303 3,370
<INCOME-BEFORE-INTEREST-EXPEN> 23,842 25,183
<TOTAL-INTEREST-EXPENSE> 3,063 3,190
<NET-INCOME> 28,870 29,771
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 28,878 29,771
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 5.74 5.92
<EPS-DILUTED> 5.74 5.92
</TABLE>
<PAGE> 1
EXHIBIT H
SECURITIES AND EXCHANGE COMMISSION
(Release No. )
The Columbia Gas System, Inc. ("Columbia"), 20 Montchanin Road,
Wilmington, Delaware 19807, a registered holding company, has filed a joint
application-declaration with this Commission pursuant to Sections 6, 7, 9(a)
and 10, of the Public Utility Holding Company Act of 1935.
Columbia and its wholly owned subsidiaries, Columbia Energy Services
Corporation ("CES"), Columbia Natural Resources, Inc. ("CNR") and Columbia
Coal Gasification Corporation ("CGC") are parties to this
application-declaration seeking authorization to effect non-substantial
restructuring of subsidiaries. Columbia and CES, a Kentucky corporation
request authorization to reincorporate CES in Delaware via a merger into a
newly formed successor corporation for the sole purpose of converting CES to a
Delaware corporation. Columbia also requests authorization to transfer its
shares of CGC common stock to CNR and effect a merger of CGC into CNR.
Under a Plan of Reorganization and Merger, CES will be merged into CES
(DE), a newly formed Delaware corporation which will, by virtue of the merger,
become a wholly owned subsidiary of Columbia. CES (DE) will succeed to all of
the rights and properties of CES and will assume all of its liabilities and
obligations. The officers and directors of CES will become the officers and
directors of CES (DE). The merger will qualify a a tax-free reorganization
under Sections 368(a)(1)(A) and (F) of the Internal Revenue Code.
Columbia owns all 1,939,000 outstanding shares of common stock of CGC,
a Delaware corporation. Columbia requests authorization to transfer these
1,939,000 shares to CNR, a Texas corporation. The transaction would involve an
exchange of 1,939,000 shares of CGC common stock, $25 par value per share, for
approximately 343,000 shares of CNR common stock, $25 par value per share. The
actual number of shares of CNR stock exchanged will depend upon the net book
value of CGC on the effective date.
This exchange will make CNR the parent corporation of CGC, and the
owner of 100% of CGC's outstanding shares. Texas law provides that a
subsidiary corporation may be merged into its parent corporation if the parent
corporation owns at least 90% of the outstanding shares of each class of shares
of the subsidiary corporation being merged into the parent corporation. The
merger will qualify as a tax-free reorganization under Section 368(a)(1)(A) of
the Internal Revenue Code.
