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COLUMBIA GAS ANNOUNCES ESTIMATED FIRST QUARTER EARNINGS; REVIEWS STATUS OF BANKRUPTCY PROCEEDINGS WITH SHAREHOLDERS

 COLUMBIA GAS ANNOUNCES ESTIMATED FIRST QUARTER EARNINGS;
 REVIEWS STATUS OF BANKRUPTCY PROCEEDINGS WITH SHAREHOLDERS
 WILMINGTON, Del., April 30 /PRNewswire/ -- The Columbia Gas System, Inc. (NYSE: CG) today announced estimated earnings for the first quarter of $11 million, or 22 cents per share, as compared with $48 million, or 95 cents a share before accounting changes, for the same period in 1991.
 The company said it expects actual results to be available soon.
 Executive Vice President and Chief Financial Officer Robert A. Oswald told shareholders attending the company's annual meeting here that the decline was due to a writedown in the carrying value of oil and gas properties and a settlement of a pipeline supplier dispute. These declines were partially offset because the corporation is not recording interest expense on pre-bankruptcy debt which improved net income by $36 million in the quarter.
 Absent these adjustments, Oswald said, the corporation's earnings for the first quarter of 1992 would be about $9 million higher than last year.
 He told shareholders that these earnings, combined with management's outlook for the rest of the year "demonstrate that we are not the 'typical' Chapter 11 company" that suffers from a continuing fundamental flaw in the business.
 Oswald reported that the System has adequate cash reserves and credit available to fund its projected $374 million capital program for 1992 and other anticipated cash requirements.
 At the meeting, Columbia Chairman and Chief Executive Officer John H. Croom told shareholders that the System's operating subsidiaries, including Columbia Gas Transmission, are continuing to provide the highest quality service to their customers and that the companies plan to capitalize on opportunities for natural gas in the changing energy marketplace.
 He said that, despite delays which impeded progress during the first six months of the bankruptcy proceedings, management continues to believe that both the parent company and its principal pipeline subsidiary, Columbia Gas Transmission Corp., will be able to complete the Chapter 11 process by the middle of 1993.
 Croom said timetables have been established which, if met, will permit issues that are critical to the completion of the Chapter 11 process to be resolved by late fall.
 He said that foremost among these issues are challenges by Columbia Transmission's Creditors' Committee to the validity of the debt Columbia Transmission owes the parent company and the transfer of properties to Columbia Natural Resources in 1990. Croom reaffirmed the corporation's position that it has strong and meritorious defenses. "Consequently," he said, "we are seeking to expedite proceedings on these claims so that we can pursue the development of reorganization plans absent this threat." He added that the company will soon ask the court to dismiss that portion of the Creditors' Committee complaint which challenges the parent company's secured and unsecured debt investments in Columbia Transmission.
 Croom cautioned shareholders that, in the unlikely event the challenges raised by the producers are successful, the corporation's equity holders would be negatively impacted.
 In his financial report, Oswald said Columbia's oil and gas companies, like others in the industry, are being affected by low energy prices which are currently about 40 percent below last year's projections. He said Columbia expects to report a first quarter pre-tax operating loss for the segment of $121 million compared with a $5 million loss during the first quarter of 1991. This reflects the 1992 writedown of $126 million in the carrying value of the oil and gas properties.
 First quarter operating income for the transmission segment is estimated to be $47 million, the same as in the 1991 period, despite accruing $15 million this year for a settlement of a pipeline supplier dispute. A combination of colder weather and a more competitive sales rate increased the segment's long-haul throughput for the quarter by eight percent over the same period in 1991. Oswald added that, looking ahead, Columbia views new federal guidelines as improving the predictability of the financial performance of this segment by reducing its sensitivity to weather.
 Oswald said that somewhat colder temperatures combined with the effect of rate increases in several states produced operating income of $108 million for Columbia's distribution companies during the quarter, a 40 percent increase over last year's performance.
 In his remarks, Oswald pointed out that bankruptcy accounting guidelines require that the corporation record 100 percent of all estimated or allowed claims, regardless of whether the company expects those claims to be paid in full. As a result, he said, at any point during the bankruptcy process the System's consolidated balance sheet may include recorded liabilities of Columbia Gas Transmission which bear little relationship to the amounts ultimately required to be paid to settle those claims, as they could even exceed the value of Columbia Transmission's estate. "This distortion would not be corrected until a final plan of reorganization is approved ... and we would record a gain to account for the difference between the liabilities previously recorded and the final payments required," he explained.
 /delval/
 -0- 4/30/92
 /CONTACT: H.W. Chaddock (Media), 302-429-5261, or W.R. McLaughlin (Media), 302-429-5443, or D.W. McFarland (Analysts), 302-429-5363, or T.L. Hughes (Analysts), 302-429-5471, or 302-429-5000, all of Columbia Gas/
 (CG) CO: The Columbia Gas System, Inc. ST: Delaware IN: OIL SU: ERP


MP -- PH035 -- 4967 04/30/92 13:03 EDT
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Publication:PR Newswire
Date:Apr 30, 1992
Words:876
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