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COLUMBIA GAS REPORTS IMPROVED EARNINGS IN FOURTH QUARTER, LOSS FOR YEAR; OIL AND GAS ASSET WRITEDOWN MAY BE NECESSARY

 COLUMBIA GAS REPORTS IMPROVED EARNINGS IN FOURTH QUARTER,
 LOSS FOR YEAR; OIL AND GAS ASSET WRITEDOWN MAY BE NECESSARY
 WILMINGTON, Del., Feb. 14 /PRNewswire/ -- The Columbia Gas System, Inc., (NYSE: CG) had net income of $81.5 million, or $1.61 per share, for the fourth quarter of 1991, as compared to earnings of $60.8 million, or $1.25 per share, for the same period in 1990, Chairman and Chief Executive Officer John H. Croom announced today.
 Croom pointed out that the fourth quarter of 1991 was the first weather-sensitive quarter since The Columbia Gas System, Inc. and its principal pipeline subsidiary filed for protection under Chapter 11 of the U.S. Bankruptcy Code. "Its results demonstrate the basic soundness of the System and its various subsidiaries and that Columbia's business operations have been affected very little by the bankruptcy filings," he said.
 Croom said the fourth quarter earnings did not include interest expense ($31 million after tax) on pre-bankruptcy debt, since the company is precluded by the Bankruptcy Code from paying interest on debt outstanding prior to the bankruptcy filing.
 Croom added that both the parent company and Columbia Gas Transmission Corporation are dedicating all necessary resources to filing reorganization plans as soon as practical.
 The System reported a loss for 1991 of $694.4 million, or $13.74 per share, primarily due to previously-announced special charges relating to losses associated with above-market-priced gas purchase contracts. These were partially offset by a net gain resulting from two accounting changes and from not recording interest on pre-bankruptcy debt since July 31, 1991. In 1990, the System had earnings of $104.7 million, or $2.21 per share.
 Fourth Quarter
 Increased throughput during the fourth quarter of 1991, due primarily to colder weather and improved rates generated higher operating income for both the transmission and distribution segments when compared to the fourth quarter of 1990. Operating income for the transmission companies during the period was $48.7 million, an increase of $9.0 million over 1990. Distribution segment operating income for the same period increased $7.6 million to $64.7 million.
 The oil and gas segment had operating income of $10.1 million in the fourth quarter of 1991, a $5.7 million increase over 1990. This increase is due to the effect of an asset writedown in the fourth quarter of 1990 and higher oil and gas production during the fourth quarter of 1991, offset by lower prices, higher depletion expense and higher operating and maintenance costs.
 Due to the decline in natural gas prices since year-end, an after- tax writedown of the corporation's investment in its oil and gas assets of about $100 million may be necessary at the end of the first quarter.
 Accounting changes, adopted in the fourth quarter and made effective as of Jan. 1, 1991, resulted in a net benefit to 1991 earnings of $100.4 million. These changes did not have a material impact on the results of fourth quarter operations. Earnings were improved by $170 million with the adoption of SFAS 96, which among other things requires the impact on deferred income taxes to be recognized whenever tax rates change. Adoption of SFAS 106, which changes the way certain post-retirement benefits are accounted for, resulted in a $69.6 million charge against earnings.
 Twelve Months
 Transmission operations had an operating loss of $1.2 billion for 1991, compared to operating income of $128.2 million in 1990. The most significant impact on these results came from special charges of $1.3 billion ($870.7 million after-tax) by Columbia Gas Transmission during the second and third quarters. These charges relate to losses associated with the above-market-priced gas purchase contracts that were the cause of the financial difficulties that led to the Chapter 11 filings. About 4,700 problem contracts have since been rejected with the approval of the bankruptcy court, and, as a result, Columbia Gas Transmission's commodity sales rate has declined 47 percent from $3.70 per million Btu on Aug. 1, 1991, to $1.97 per million Btu on Feb. 1, 1992.
 The oil and gas segment had an operating loss of $4.5 million in 1991, as compared to income of $43.3 million in 1990. This was due to greater writedowns of Canadian oil and gas assets in 1991 and the effects of lower energy prices, higher operating and maintenance costs and higher depletion expense. Oil production for 1991 increased 27 percent due largely to the success of exploration and development programs in the Southwest.
 Operating income for the distribution segment in 1991 was $114.9 million, an increase of $18.2 million over 1990, primarily due to colder weather.
 THE COLUMBIA GAS SYSTEM, INC.
 Summary of Financial and Operating Data
 Periods ended Three months 12 months
 Dec. 31 1991 1990 1991 1990
 Income Statement Data
 ($ millions):
 Total Operating Revenues 790.3 645.9 2,576.8 2,357.9
 Income (Loss) before
 Accounting Changes 81.5 60.8 (794.8) 104.7
 Net Income (Loss) 81.5 60.8 (694.4) 104.7
 Operating Income (Loss) By Segment:
 Oil and Gas 10.1 4.4 (4.5) 43.3
 Transmission 48.7 39.7 (1,192.2) 128.2
 Distribution 64.7 57.1 114.9 96.7
 Other 3.7 1.0 (4.6) (6.1)
 Total 127.2 102.2 (1,086.4) 262.1
 Per Share Data:
 Income (Loss) before
 Accounting Changes $1.61 $1.25 (15.72) 2.21
 Earnings (Loss) on Common Stock 1.61 1.25 (13.74) 2.21
 Dividends on Common Stock --- .55 1.16 2.20
 Average Common Shares
 Outstanding (millions) 50.6 48.5 50.5 47.3
 Operating Data:
 Oil and Gas Volumes:
 Gas Production (billion
 cubic feet) 21.6 19.9 76.3 75.3
 Oil Production (000 barrels) 936 814 3,411 2,688
 Transmission (billion cubic
 feet):
 Gas Sales 49.1 36.7 112.6 89.2
 Transportation:
 LDC & End Users 224.4 227.2 849.9 799.5
 Short-Haul 161.3 148.7 564.7 497.4
 Total Transportation 385.7 375.9 1,414.6 1,296.9
 Throughput 434.8 412.6 1,527.2 1,386.1
 Distribution (billion cubic feet):
 Gas Sales 88.2 84.3 267.7 267.1
 Transportation 51.1 53.8 194.7 198.6
 Throughput 139.3 138.1 462.4 465.7
 Degree Days-Distribution
 Service Territory:
 Actual 1,918 1,736 4,998 4,783
 Normal 2,039 2,039 5,592 5,592
 Percent Colder (warmer)
 than normal (5.9) (14.9) (10.6) (14.5)
 Percent Colder (warmer)
 than prior period 10.5 (28.4) 4.5 (19.9)
 /delval/
 -0- 2/14/92
 /CONTACT: H.W. Chaddock, 302-429-5261, or W.R. McLaughlin, 302-429-5443 (both media); or T.L. Hughes, 302-429-5471 or 302-429-5000 (analysts), all of Columbia Gas/
 (CG) CO: The Columbia Gas System, Inc. ST: Delaware IN: OIL SU: ERN


KA -- PH020 -- 0246 02/14/92 13:38 EST
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