DOW CORNING ANNOUNCES SECOND-QUARTER FINANCIAL RESULTS
MIDLAND, Mich.--Aug. 8, 1995--Dow Corning
Corp. today reported record sales of $641.8 million for the second quarter of
1995, up 16.2 percent from the $552.4 million recorded in the same
period in 1994.
The company reported a net loss for the quarter of $167.0
million, including the impact of a previously announced special pre-
tax charge of $351.1 million ($221.2 million after-tax) taken at the
end of the quarter to reflect a change in the company's accounting
method for its contribution to a breast implant global settlement.
Excluding the impact of this special charge and other accounting
adjustments related to Dow Corning's Chapter 11 status, the 1995
second-quarter adjusted net profits were $50.2 million, an increase
of 24.0 percent over the second quarter of 1994.
For the first six months of 1995, revenues totaled $1.25
billion, up 17.9 percent from the $1.06 billion reported for the
first half of 1994. A net loss of $117.5 million was reported for
this period. First-half adjusted net profits were $99.7 million, an
increase of 28.3 percent over net income of $77.7 million reported
for the comparable period in 1994.
"Our second quarter reflects outstanding self-discipline amongst
our employees who have stayed focused on their jobs and on our
customers around the world, during a period of potential distraction
since Dow Corning's recent filing for protection under Chapter 11 of
the U.S. Bankruptcy Code," said John W. Churchfield, vice president
for planning and finance and chief financial officer.
"Revenue growth for the second quarter was strong, despite
softening markets in the U.S. and Europe - and the still slow
economy of Japan. Growth in the rest of Asia remains strong.
Overall, a favorable balance of prices, raw materials costs and
operating efficiencies has helped us in the second quarter," he
said.
Dow Corning Corp. will no longer file quarterly 10Q reports or
annual 1OK reports with the U.S. Securities and Exchange Commission.
This reporting exemption is available to companies having a small
number of securities holders. The company will continue to prepare,
and make available upon request, quarterly and annual financial
statements comparable to those contained in 10Q and 1OK reports.
Copies of these statements will be available after August 15 by
calling Dow Corning at 517-496-5436. Income statements and
condensed balance sheets will continue to be included in quarterly
financial press releases.
Dow Corning Corp., a global leader in silicon-based materials,
is a Michigan corporation with shares equally owned by The Dow
Chemical Co. and Corning Inc. More than half of Dow Corning's sales
are outside the U.S.
Dow Corning Corporation
Consolidated Statements of Operations and Retained Earnings
(in millions)
Six months Three months
ended June 30, ended June 30,
1995 1994 1995 1994
NET SALES $1,253.6 $1,061.5 $ 641.8 $ 552.4
OPERATING COSTS AND EXPENSES:
Manufacturing cost
of sales 810.7 691.0 414.3 359.7
Marketing and
administrative expenses 216.5 194.7 116.1 101.4
Implant costs 351.1 - 351.1 -
1,378.3 885.7 881.5 461.1
OPERATING INCOME (LOSS) (124.7) 175.8 (239.7) 91.3
OTHER INCOME (EXPENSE):
Interest income, currency
gains (losses) and other, net(3.2) (3.7) 1.5 (1.7)
Interest expense (36.4) (33.6) (15.5) (17.5)
INCOME (LOSS) BEFORE
REORGANIZATION (164.3) 138.5 (253.7) 72.1
COSTS AND INCOME TAXES
Reorganization costs 0.5 - 0.5 -
Income tax provision
(benefit) (55.5) 54.0 (91.7) 28.1
Minority interests' share
in income 8.2 6.8 4.5 3.5
NET INCOME (LOSS) (117.5) 77.7 (167.0) 40.5
Retained earnings at
beginning of period 597.5 604.3 647.0 641.5
Retained earnings at
end of period $480.0 $682.0 $480.0 $682.0
Dow Corning Corporation
Condensed Consolidated Balance Sheets
(in millions)
June 30, December 31,
1995 1994
Assets
Current assets
Cash and cash equivalents $272.5 $201.1
Receivables, net 535.5 416.2
Anticipated implant insurance receivable 101.5 157.5
Implant deposit - 275.0
Inventories 361.1 308.4
Other current assets 169.1 277.6
Total current assets 1,439.7 1,635.8
Property, plant and equipment, net 1,235.8 1,191.9
Anticipated implant insurance receivable 1,397.0 943.6
Implant deposit 275.0 -
Other assets 539.1 321.9
$4,886.6 $4,093.2
Liabilities and Stockholder's Equity
Current liabilities
Short term borrowings $33.1 $446.8
Accounts payable 140.3 160.2
Implant reserve 93.2 475.4
Other current liabilities 199.3 242.6
Total current liabilities 465.9 1,325.0
Long term debt 120.3 335.1
Implant reserve 403.2 1,286.9
Other liabilities 81.5 352.1
Liabilities subject to compromise
Accounts payable 42.8 -
Implant reserves 2,007.5 -
Notes payable and long term debt 654.6 -
Other 360.3 -
Total liabilities subject to compromise 3,065.2 -
Minority interest in
consolidated subsidiaries 140.6 117.9
Stockholder's equity 609.9 676.2
$4,886.6 $4,093.2
/CONTACT: Barb Muessig, 517-496-8841, or Scott J. Seeburger,
517-496-4078, both of Dow Corning/
COLUMBIA GAS REPORTS SECOND QUARTER FINANCIAL RESULTS
WILMINGTON, Del.--Aug. 8, 1995--The Columbia Gas System,
Inc. (NYSE: CG), today reported net income of $30.9 million, or 61
cents per share, for the second quarter of 1995. This compares with
net income of $47.8 million, or 95 cents per share, for the same
period last year.
The principal reason for the decrease was an after-tax
improvement of $19.2 million in 1994 resulting from a reserve
adjustment reflecting a favorable Federal Energy Regulatory
Commission decision permitting Columbia Gas
Transmission Corp., the Corporation's principal pipeline subsidiary, to recover
carrying charges associated with natural gas exchange activities.
After adjusting both periods for unusual items and Chapter 11
bankruptcy-related issues, the Corporation had an after-tax loss of
$4.3 million, compared to net income of $1.7 million in the second
quarter of 1994.
System Chairman and CEO Oliver G. Richard III said the $6
million reduction in adjusted net income includes the impact of
higher estimated unrecorded interest costs on pre-petition debt
obligations that, on an after-tax basis, amounted to approximately
$44 million in the current quarter and $36 million last year. This
reflects the impact of higher short-term interest rates and the
increasing impact of interest on interest.
Richard said that the current quarter results also reflect
higher interest income on accumulated cash offset by the combined
effects of lower wellhead prices for natural gas, reduced oil
production, higher transmission segment operating costs and reduced
gas sales for the distribution operations.
Richard pointed out that the general rate case filed earlier
this month by Columbia Transmission was designed to alleviate the
impact that higher operating costs have had on earnings.
Segment Operating Results
Operating income for Columbia's transmission segment declined
$6.1 million to $35.9 million in the second quarter of 1995.
Columbia Transmission recorded additional revenues during the second
quarter of 1994 because its average cost of gas met certain required
competitive tests that were allowed when Columbia Transmission had a
merchant function. Higher operating costs also contributed to the
decrease.
The distribution segment recorded an operating loss of $7.9
million in the current period which represented a $5.6 million
improvement over the second quarter of 1994. This was largely due
to a $6.5 million weather normalization charge that was recorded
last year as part of a comprehensive regulatory rate settlement in
Ohio to reflect unusually cold weather experienced in the first
quarter of 1994. The positive effects of recent regulatory
settlements, improved transportation volumes and a favorable
adjustment for prior period costs were offset by higher distribution
operating costs and reduced gas sales. Ongoing marketing and
customer service studies are expected to provide new opportunities
to improve and expand distribution customer services.
Lower natural gas prices and reduced oil production led to an
operating loss of $200,000 in the oil and gas segment compared to
operating income of $11.1 million last year. Natural gas prices
which averaged $1.86 per thousand cubic foot were 29 cents below the
same period last year. Oil production declined 292,000 barrels
because of normal production declines and shut-ins for well
maintenance. Oil and liquids production is expected to increase as
new production comes onstream and well maintenance programs are
completed. Higher depletion rates and the effect of a favorable
royalty settlement in the prior period also contributed to the
decline. Prices received for oil production averaged $16.98 per
barrel, an increase of $1.82 over last year.
Six Months Results
Warmer weather and lower natural gas prices were the principal
reasons that the Corporation's net income for the first six months
of 1995 declined to $159.7 million, or $3.16 per share from $182.4
million, or $3.61 per share in 1994. Improved distribution segment
rates tempered the negative effects of warmer weather and lower
wellhead prices for natural gas. After adjusting for unusual and
bankruptcy- related items, net income for the first six months of
1995 was $90.9 million, down $7.9 million from 1994.
Income for both periods was improved by an estimated $86 million
and $71 million, respectively, because the Corporation did not
record interest expense on pre-petition debt obligations.
Segment Operating Results
Columbia's transmission segment reported operating income of
$112.5 million for the first six months of 1995. This was $16.5
million below 1994 largely because of a $17.3 million prior period
favorable adjustment because Columbia Transmission's average gas
costs met certain competitive tests.
For the first half of 1995, Columbia's distribution operating
income was $108.3 million, up $9.4 million over 1994. New rates in
most of the segment's service areas improved results and eased the
impact of warmer weather during the first half of 1995.
Columbia's oil and gas segment reported an operating loss of
$300,000 in the first half of 1995. During the same period last year
the oil and gas segment reported operating income of $23.2 million.
Contributing to the decline were lower gas prices, reduced oil
production and the prior period reserve adjustment previously
mentioned. These reductions more than offset improved oil prices and
a small increase in natural gas production.
Operating income of $9.6 million for other energy operations
declined $5 million reflecting lower operating income for the
propane operations due in large part to lower margins and volumes
sold as well as higher revenues in the prior period associated with
services provided to affiliates.
The Columbia Gas System, Inc., is one of the nation's largest
natural gas holding companies. Subsidiary companies are engaged in
the exploration, production, purchase, storage, transmission and
distribution of natural gas and other energy operations such as
cogeneration. The Parent Company and Columbia Transmission have
been operating as debtors-in-possession under the Bankruptcy Code
since July 31, 1991.
The Columbia Gas System, Inc.
Summary of Financial and Operating Data
Three Months Six Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
Income Statement Data
($ millions)
Total Operating Revenue 474.7 523.0 1,526.6 1,681.9
Income Before
Accounting Change 30.9 47.8 159.7 188.0
Net Income 30.9 47.8 159.7 182.4(A)
Operating Income (Loss)
By Segment:
Transmission 35.9 42.0 112.5 129.0
Distribution (7.9) (13.5) 108.3 98.9
Oil and Gas (0.2) 11.1 (0.3) 23.2
Other Energy 1.7 1.8 9.6 14.6
Corporate (2.6) (1.8) (3.3) (3.9)
Total 26.9 39.6 226.8 261.8
Per Share Data
Earnings Before
Accounting Change ($) 0.61 0.95 3.16 3.72
Earnings on Common
Stock ($) 0.61 0.95 3.16 3.61
Average Common Shares
Outstanding (millions) 50.6 50.6 50.6 50.6
(A) Includes the adoption of SFAS No. 112, "Employers Accounting
for Postemployment Benefits", which required the accrual of
postemployment benefits previously expensed when paid.
The Columbia Gas System, Inc.
Summary of Financial and Operating Data (Continued)
Three Months Six Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
Operating Data
Oil and Gas Volumes:
Gas Production
(billion cubic feet) 16.2 16.8 33.9 33.4
Oil Production
(000 barrels) 696 988 1,438 1,868
Transmission (billion
cubic feet):
Transportation
Columbia Transmission
Market Area 194.7 182.2 595.9 599.7
Columbia Gulf
Main-line 151.8 165.9 306.7 339.3
Short-haul 53.7 58.2 104.4 133.3
Intrasegment
Eliminations (150.7) (154.1) (302.0) (318.0)
Total Throughput 249.5 252.2 705.0 754.3
Distribution (billion
cubic feet):
Gas Sales 37.5 41.5 170.6 187.2
Transportation 58.7 52.8 135.5 115.5
Total Throughput 96.2 94.3 306.1 302.7
Degree Days-Distribution
Service Territory
Actual 624 614 3,382 3,761
Normal 580 580 3,527 3,527
% Colder (warmer) than
normal 8 6 (4) 7
% Colder (warmer) than
prior period 2 -- (10) 8
/CONTACT: W. R. McLaughlin, 302-429-5443, or H. W. Chaddock,
302-429-5261, or Analysts: T. L. Hughes, 302-429-5363, or K. P.
Murphy, 302-429-5471/