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COLUMBIA SYSTEM ANNOUNCES THIRD QUARTER RESULTS

 COLUMBIA SYSTEM ANNOUNCES THIRD QUARTER RESULTS
 WILMINGTON, Del. Nov. 12 /PRNewswire/ -- Improved operating results


in the third quarter were obscured by three significant charges totaling $103.1 million (after-tax) which caused The Columbia Gas System, Inc. (NYSE: CG) to report a loss of $78.1 million, or $1.54 per share, for the period. This compares to a loss of $122.1 million, or $2.41 per share, for the same period last year.
 Absent the effect of the significant charges and bankruptcy-related items in both periods, the after-tax loss the corporation normally experiences in the third quarter due to low seasonal demand for gas would have been $7.5 million, or 15 cents per share, as compared to a loss of $16.7 million, or 33 cents per share, in the same period last year. This $9.2 million improvement this year was primarily due to improved rate designs, increased throughput, and higher wellhead prices for natural gas.
 Columbia Gas System Chairman and CEO John H. Croom said the improved operating results reflect "the benefits Columbia's business units are realizing as a result of their strategic and regulatory initiatives and the overall improved outlook for the gas industry."
 The Columbia Gas System, Inc., and its principal pipeline subsidiary, Columbia Gas Transmission Corp., have been operating as debtors-in-possession under Chapter 11 of the U.S. Bankruptcy Code since July 31, 1991.
 THIRD QUARTER RESULTS
 Non-cash charges against earnings during the third quarter of 1992 include a $39.2 million after-tax increase in the reserve established for environmental compliance costs, a $24.2 million after-tax writedown of previously capitalized gas costs and a $39.7 million after-tax charge resulting from Columbia LNG Corporation's new business plan for its Cove Point, Md., terminal. Significant charges in the third quarter of 1991 totaled $118.5 million, including an after-tax writedown of $98.7 million for gas supply costs.
 Interest expense not recorded on prepetition debt improved third quarter earnings in 1992 by $36.6 million. This was offset by $4.1 million in bankruptcy related costs. During the same period last year, interest expense not recorded totaled $22.3 million and bankruptcy related costs were $9.1 million.
 Operating income for the oil and gas segment in the third quarter was $3.7 million, compared to a loss of $7 million in the same period in 1991. This improvement was due to an increase in average U.S. wellhead prices for natural gas and the effect of an $8.3 million writedown of the carrying value of Canadian oil and gas properties in 1991.
 The transmission segment incurred an operating loss of $49.3 million in the third quarter, primarily due to the increase in the environmental reserve and the writedown of previously-capitalized gas costs. This compares with a loss of $125.5 million for the same period in 1991 that was also affected by environmental and gas supply charges. New rate designs improved operating results in 1992.
 The distribution companies recorded a loss of $15.7 million for the current quarter, compared to a loss of $17.4 million during the same period last year. The improvement is the result of increased throughput and improved rates which were partially offset by increased operating costs.
 CHARGES AGAINST EARNINGS
 The reserve addition for environmental costs stems from an on-going self-assessment program by Columbia Transmission that is part of a comprehensive System-wide environmental review. The increase relates primarily to anticipated costs associated with identifying and assessing sites along Columbia Transmission's 19,000 mile pipeline system that may have been contaminated by non-PCB related compounds as well as changes in established reserves for low level PCB contaminations in compressed air systems and other pollutants.
 Columbia System's management said it is too early to reasonably estimate what additional costs might be incurred until sites are fully investigated. However, based on the limited data now available and various assumptions, management believes that environmental compliance expenditures by Columbia Transmission could amount to approximately $20 million a year over the next 10 to 12 years. These projected expenditures include the compliance costs already reserved. The corporation expects most of these costs to be recoverable through rates.
 The current charge brings pre-tax net liabilities for environmental compliance costs to $114.5 million.
 Columbia Transmission, following a review of newly enacted, industry-wide federal regulations (FERC Order 636) and negotiations with customers, does not expect to provide a significant merchant function after Nov. 1, 1993, when the new regulations go into effect. Consequently, a writedown of $38.6 million (pre-tax) was recorded in the third quarter for capitalized gas costs associated with renegotiated gas purchase contracts that are in excess of amounts expected to be amortized in 1993.
 Columbia LNG plans to initiate a peaking and storage operation and possibly a baseload terminaling service for imported LNG at its liquefied natural gas terminal and regasification plant near Cove Point, Md., and anticipates charging market-based rather than cost-based rates for the services. This necessitated an accounting adjustment for the writedown of a regulatory asset.
 NINE MONTH RESULTS
 The corporation's financial results for the first nine months of 1992 were also affected by significant charges, resulting in a loss of $36.6 million, or 72 cents per share, as compared to a loss of $775.9 million, or $15.35 per share, during the same period in 1991. Absent the net effect of these charges, prior period accounting changes and bankruptcy related items, which amounted to $92.3 million for the current period as opposed to $797.1 million for 1991, the corporation experienced net income of $55.7 million, or $1.10 per share, for the 1992 period as opposed to net income of $21.2 million, or 42 cents per share, in 1991.
 The oil and gas segment had an operating loss of $116.1 million during the first nine months of this year compared to a loss of $14.6 million in 1991. The change was principally the result of a $126.4 million pre-tax writedown in the carrying value of oil and gas assets that was recorded in the first quarter of 1992. Last year's writedowns, which totaled $36.4 million through the third quarter, were associated with Canadian oil and gas assets that have since been sold.
 Operating income for the transmission segment was $41.1 million for the first nine months of 1992 as compared with a loss of $1.2 billion in the same period last year. The 1992 figures reflect the significant charges recorded in the third quarter. Last year's loss was primarily due to a provision for gas supply charges of $1.3 billion resulting from Columbia Transmission's non-competitive gas purchase contracts that have been rejected with the approval of the bankruptcy court. The 1992 results benefitted from the effects of improved rate design and higher throughput due to colder weather.
 For the first nine months of 1992, the distribution segment's operating income of $90.4 million was $40.2 million higher than during the same period in 1991. A five percent increase in throughput, largely due to colder weather in 1992, together with the positive effect of rate settlements were the principal reasons for the improvement.
 THE COLUMBIA GAS SYSTEM, INC.
 Summary of Financial and Operating Data
 Periods Ended Three Months Nine Months
 Sept. 30 1992 1991 1992 1991
 Income Statement Data
 ($ millions):
 Total Operating Revenue 32.2 378.1 1,986.5 1,786.5
 Income (Loss) Before
 Extraordinary Item and
 Accounting Changes (38.4) (122.1) 3.1 (876.3)
 Net Loss (78.1) (122.1) (36.6) (775.9)(A)
 Operating Income (Loss) By Segment:
 Oil and Gas 3.7 (7.0) (116.1) (14.6)
 Transmission (49.3) (125.5) 41.1 (1,240.9)
 Distribution (15.7) (17.4) 90.4 50.2
 Other Energy (0.1) (0.2) 2.7 (0.3)
 Corporate (1.6) (1.7) (5.5) (8.0)
 Total (63.0) (151.8) 12.6 (1,213.6)
 Per Share Data:
 Income (Loss) Before
 Extraordinary Item and
 Accounting Changes $(0.76) $(2.41) $0.06 $(17.34)
 Loss on Common Stock (1.54) (2.41) (0.72) (15.35)(A)
 Dividends on Common Stock --- --- --- 1.16
 Average Common Shares
 Outstanding (millions) 50.6 50.6 50.6 50.5
 Operating Data:
 Oil and Gas Volumes:
 Gas Production (billion
 cubic feet) 16.6 18.6(B) 51.9 54.7(B)
 Oil Production
 (000 barrels) 703 873(B) 2,187 2,475(B)
 Transmission (billion cubic feet):
 Gas Sales 69.2 49.2 164.6 63.5
 Transportation:
 LDC & End Users 201.6 179.2 681.0 625.5
 Short-Haul 142.4 115.9 468.0 403.4
 Total Transportation 344.0 295.1 1,149.0 1,028.9
 Throughput 413.2 344.3 1,313.6 1,092.4
 Distribution (billion cubic feet):
 Gas Sales 21.0 17.9 188.7 179.5
 Transportation 44.3 44.7 151.6 143.6
 Throughput 65.3 62.6 340.3 323.1
 Degree Days-Distribution Service Territory:
 Actual 126 116 3,491 3,080
 Normal 37 37 3,585 3,553
 Pct. Colder (warmer)
 than normal 241 213 (3) (13)
 Pct. Colder (warmer)
 than prior period 9 1 13 1
 (A) Restated to reflect the adoption of SFAS No. 106 (Employers' Accounting for Postretirement Benefits Other Than Pensions) and SFAS No. 96 (Accounting for Income Taxes).
 (B) Includes the Canadian operations which were sold effective Dec. 31, 1991.
 /delval/
 -0- 11/12/92
 /CONTACT: W.R. McLaughlin (media), 302-429-5443, or H.W. Chaddock (media), 302-429-5261, or D.W. McFarland (analysts), 302-429-5363, or T.L. Hughes (analysts), 302-429-5471, all of Columbia Gas/
 (CG) CO: The Columbia Gas System, Inc. ST: Delaware IN: OIL SU: ERN


MP-MK -- PH003 -- 0032 11/12/92 09:17 EST
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