UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

February 2, 2010

Date of Report (Date of earliest event reported)

 

 

ATMOS ENERGY CORPORATION

(Exact Name of Registrant as Specified in its Charter)

 

 

 

TEXAS AND VIRGINIA   1-10042   75-1743247

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

1800 THREE LINCOLN CENTRE,

5430 LBJ FREEWAY, DALLAS, TEXAS

  75240
(Address of Principal Executive Offices)   (Zip Code)

(972) 934-9227

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On Tuesday, February 2, 2010, Atmos Energy Corporation (the “Company”) issued a news release in which it reported the Company’s financial results for the first quarter of the 2010 fiscal year, which ends September 30, 2010, and that certain of its officers would discuss such financial results in a conference call on Wednesday, February 3, 2010 at 8:00 a.m. Eastern Time. In the release, the Company also announced that the call would be webcast live and that slides for the webcast would be available on its Web site for all interested parties.

A copy of the news release is furnished as Exhibit 99.1. The information furnished in this Item 2.02 and in Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall such information be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act or the Exchange Act.

 

Item 9.01. Financial Statements and Exhibits.

 

  (d) Exhibits

 

99.1    News Release dated February 2, 2010 (furnished under Item 2.02)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ATMOS ENERGY CORPORATION
 

(Registrant)

DATE: February 2, 2010   By:  

/s/    L OUIS P. G REGORY        

    Louis P. Gregory
    Senior Vice President and General Counsel


INDEX TO EXHIBITS

 

Exhibit
Number

  

Description

99.1    News Release dated February 2, 2010 (furnished under Item 2.02)

Exhibit 99.1

 

LOGO    News Release

Analysts and Media Contact:

Susan Giles (972) 855-3729

Atmos Energy Corporation Reports Earnings for the Fiscal 2010 First Quarter;

Company Affirms Fiscal 2010 Guidance

DALLAS (February 2, 2010)—Atmos Energy Corporation (NYSE: ATO) today reported consolidated results for its fiscal 2010 first quarter ended December 31, 2009.

 

   

Fiscal 2010 first quarter net income was $93.3 million, or $1.00 per diluted share, compared with net income of $76.0 million, or $0.83 per diluted share, the prior-year quarter.

 

   

Consolidated results include noncash, unrealized net gains of $26.8 million, or $0.29 per diluted share for the first quarter of fiscal 2010, compared with net losses of $14.2 million, or ($0.16) per diluted share for the prior-year quarter.

 

   

Atmos Energy affirms its fiscal 2010 earnings to be in the range of $2.15 to $2.25 per diluted share, excluding unrealized gains and losses.

For the three months ended December 31, 2009, regulated operations contributed $59.9 million, or $0.64 per diluted share, compared with $57.8 million of net income or $0.63 per diluted share in the prior-year quarter. Nonregulated operations contributed $33.4 million of net income, or $0.36 per diluted share, compared with $18.2 million of net income or $0.20 per diluted share for the same period last year.

“We are off to a good start, with net income rising over 23 percent from a year ago,” said Robert W. Best, chairman and chief executive officer of Atmos Energy Corporation. “Our utility business continues to benefit from successful rate results, coupled with increased demand from colder weather this quarter. The regulated pipeline saw continued downward pressure on margins and throughput, which were largely offset by lower operating expenses. And, in spite of the ongoing challenges in the economy, our nonregulated business continues to perform as expected, with an emphasis on the expansion of our geographical footprint. We remain confident that Atmos Energy is on track to meet our goal of growing annual earnings in the 4 to 6 percent range, on average.”

 

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Natural gas distribution gross profit decreased $3.8 million to $294.6 million for the quarter ended December 31, 2009, compared with $298.4 million in the prior-year quarter. This decrease is the result of a non-recurring $8.0 million adjustment recorded in the prior-year quarter to update the estimate for gas delivered to customers but not yet billed to reflect base rate changes. Additionally, gross profit decreased quarter over quarter by $7.6 million from lower franchise fees and state gross receipts taxes included in revenue as a result of lower natural gas prices. These decreases in gross profit were partially offset by a net $9.8 million increase in rates, primarily in the company’s Mid-Tex, Louisiana and West Texas service areas and a $2.2 million increase associated with a seven percent increase in consolidated distribution throughput.

Regulated transmission and storage gross profit decreased $7.8 million to $46.9 million for the quarter ended December 31, 2009, compared with $54.7 million for the same period last year. This decrease is due primarily to a $4.2 million quarter-over-quarter decrease in transportation volumes and a $3.9 million decrease in per-unit transportation margins, largely due to a substantial reduction in basis spreads. Consolidated throughput decreased 29 percent from the prior-year quarter, principally due to both a decline in Barnett Shale activity and electric generation demand.

Natural gas marketing gross profit increased $29.8 million to $59.8 million for the quarter ended December 31, 2009, compared with $30.0 million for the prior-year quarter. The increase primarily reflects a $62.7 million increase in unrealized margins due to narrowing spreads between current cash prices and forward natural gas prices experienced on Atmos Energy Marketing’s (AEM) net physical position and the deferral of physical storage withdrawals to future periods. This increase was partially offset by a $30.5 million quarter-over-quarter decrease in AEM’s storage and trading activities. During the first quarter of fiscal 2010, AEM elected to defer storage withdrawal gains and roll the associated financial instruments to forward months. This is in contrast to the first quarter of fiscal 2009, when AEM recognized storage withdrawal gains that were originally captured in late fiscal 2008. Additionally, delivered gas margins decreased $2.5 million largely due to a seven percent quarter-over-quarter decrease in consolidated sales volumes.

Pipeline, storage and other gross profit decreased $2.5 million to $10.0 million for the quarter ended December 31, 2009, compared with $12.5 million for the same period last year. The quarter-over-quarter decrease was due principally to lower margins earned under asset management plans of $3.6 million and reduced basis gains earned from utilizing leased pipeline capacity of $1.9 million. These decreases in gross profit were partially offset by an increase in unrealized gains of $3.8 million primarily due to the narrowing of the spreads between current cash prices and forward natural gas prices experienced on physical gas in storage.

Consolidated operation and maintenance expense for the three months ended December 31, 2009, was $123.9 million, compared with $132.7 million for the prior-year quarter. Excluding the provision for doubtful accounts, operation and maintenance expense for the current quarter decreased $8.0 million to $121.4 million, compared with $129.4 million for the prior-year period. The decrease is primarily due to lower pipeline maintenance costs in our Atmos Pipeline – Texas Division.

The provision for doubtful accounts was $2.5 million for the quarter ended December 31, 2009, compared with $3.3 million for the same period last year. The $0.8 million decrease primarily reflects a 38 percent quarter-over-quarter decline in the average cost of gas.

 

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Results for the three months ended December 31, 2008 include a $2.1 million noncash charge to impair certain available-for-sale investments, which did not recur in the current-year quarter.

The debt capitalization ratio at December 31, 2009 was 51.0 percent, compared with 50.7 percent at September 30, 2009, and 54.4 percent at December 31, 2008. Short-term debt outstanding was $179.7 million at December 31, 2009, compared with $72.6 million at September 30, 2009 and $360.8 million at December 31, 2008.

For the three months ended December 31, 2009, operating cash flow was $95.2 million, a $55.5 million reduction from operating cash flow of $150.7 million for the three months ended December 31, 2008. Gas costs, which reached unusually high levels during the 2008 injection season, dropped sharply when the economy slipped into recession and have remained relatively stable since that time. Operating cash flow for the fiscal 2010 first quarter reflects the recovery of lower gas costs through purchased gas recovery mechanisms and sales. This is in contrast to the fiscal 2009 first quarter, when operating cash flow was favorably influenced by the recovery of high gas costs during a period of falling prices.

Capital expenditures increased to $115.4 million for the quarter ended December 31, 2009, compared with $107.4 million for the same period last year. The $8.0 million increase primarily reflects spending for the relocation of our information technology data center.

Outlook

The leadership of Atmos Energy remains focused on enhancing shareholder value by delivering consistent earnings growth. Atmos Energy continues to project fiscal 2010 earnings to be in the range of $2.15 to $2.25 per diluted share, excluding any mark-to-market impact. Net income from regulated operations is expected to be in the range of $153 million to $159 million, and net income from nonregulated operations is expected to be in the range of $48 million to $52 million. Capital expenditures for fiscal 2010 are expected to range from $520 million to $535 million.

However, the valuation on September 30, 2010, of the company’s nonregulated physical storage inventory and associated financial instruments (“mark-to-market”), as well as changes in events or other circumstances that the company cannot currently anticipate or predict, could result in earnings for fiscal 2010 that are significantly above or below this outlook. Factors that could cause such changes are described below in Forward-Looking Statements and in other company reports filed with the Securities and Exchange Commission.

Conference Call to be Webcast February 3, 2010

Atmos Energy will host a conference call with financial analysts to discuss the financial results for the fiscal 2010 first quarter on Wednesday, February 3, 2010, at 8 a.m. EST. The telephone number is 877-485-3107. The conference call will be webcast live on the Atmos Energy Web site at www.atmosenergy.com . A playback of the call will be available on the Web site later that day. Atmos Energy senior leadership who will participate in the conference call include: Bob Best, chairman and chief executive officer; Kim Cocklin, president and chief operating officer; and Fred Meisenheimer, senior vice president, chief financial officer and treasurer.

 

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Highlights and Recent Developments

$450 Million Committed Revolving Credit Facility

On December 10, 2009, Atmos Energy Marketing, LLC (AEM) and the participating banks amended and renewed AEM’s $450 million committed revolving credit facility, which will expire on December 9, 2010, on substantially the same terms.

This news release should be read in conjunction with the attached unaudited financial information.

Forward-Looking Statements

The matters discussed in this news release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this news release are forward-looking statements made in good faith by the company and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this news release or in any of the company’s other documents or oral presentations, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “objective,” “plan,” “projection,” “seek,” “strategy” or similar words are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in this news release, including the risks and uncertainties relating to regulatory trends and decisions, the company’s ability to continue to access the capital markets and the other factors discussed in the company’s reports filed with the Securities and Exchange Commission. These factors include the risks and uncertainties discussed in the company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2009. Although the company believes these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. The company undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

About Atmos Energy

Atmos Energy Corporation, headquartered in Dallas, is the country’s largest natural-gas-only distributor, serving over 3 million natural gas distribution customers in more than 1,600 communities in 12 states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy also provides natural gas marketing and procurement services to industrial, commercial and municipal customers primarily in the Midwest and Southeast and manages company-owned natural gas pipeline and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas. Atmos Energy is a Fortune 500 company. For more information, visit www.atmosenergy.com .

 

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Atmos Energy Corporation

Financial Highlights (Unaudited)

 

Statements of Income

   Three Months Ended
December 31
    Percentage
Change
(000s except per share)    2009     2008    

Gross Profit:

      

Natural gas distribution segment

   $ 294,627      $ 298,384      (1)%

Regulated transmission and storage segment

     46,860        54,682      (14)%

Natural gas marketing segment

     59,785        30,023      99%

Pipeline, storage and other segment

     9,990        12,545      (20)%

Intersegment eliminations

     (413     (422   2%
                  

Gross profit

     410,849        395,212      4%

Operation and maintenance expense

     123,862        132,677      (7)%

Depreciation and amortization

     53,839        53,126      1%

Taxes, other than income

     42,552        44,137      (4)%

Asset impairments

     —          2,078      (100)%
                  

Total operating expenses

     220,253        232,018      (5)%

Operating income

     190,596        163,194      17%

Miscellaneous expense

     (269     (301   (11)%

Interest charges

     38,708        38,991      (1)%
                  

Income before income taxes

     151,619        123,902      22%

Income tax expense

     58,289        47,939      22%
                  

Net income

   $ 93,330      $ 75,963      23%
                  

Basic net income per share

   $ 1.00      $ 0.83     

Diluted net income per share

   $ 1.00      $ 0.83     

Cash dividends per share

   $ .335      $ .330     

Weighted average shares outstanding:

      

Basic

     92,152        90,471     

Diluted

     92,509        90,769     
     Three Months Ended
December 31
    Percentage
Change

Summary Net Income by Segment (000s)

   2009     2008    

Natural gas distribution

   $ 51,448      $ 50,133      3%

Regulated transmission and storage

     8,454        7,661      10%

Natural gas marketing

     6,256        26,501      (76)%

Pipeline, storage and other

     377        5,859      (94)%

Unrealized margins, net of tax

     26,795        (14,191   289%
                  

Consolidated net income

   $ 93,330      $ 75,963      23%
                  

 

5


Atmos Energy Corporation

Financial Highlights, continued (Unaudited)

 

Condensed Balance Sheets

   December 31,
2009
   September 30,
2009
(000s)      

Net property, plant and equipment

   $ 4,523,188    $ 4,439,103

Cash and cash equivalents

     174,829      111,203

Accounts receivable, net

     597,012      232,806

Gas stored underground

     399,582      352,728

Other current assets

     115,155      132,203
             

Total current assets

     1,286,578      828,940

Goodwill and intangible assets

     739,907      740,064

Deferred charges and other assets

     325,751      335,659
             
   $ 6,875,424    $ 6,343,766
             

Shareholders’ equity

   $ 2,258,076    $ 2,176,761

Long-term debt

     2,159,470      2,169,400
             

Total capitalization

     4,417,546      4,346,161

Accounts payable and accrued liabilities

     578,805      207,421

Other current liabilities

     413,754      457,319

Short-term debt

     179,712      72,550

Current maturities of long-term debt

     10,131      131
             

Total current liabilities

     1,182,402      737,421

Deferred income taxes

     588,423      570,940

Deferred credits and other liabilities

     687,053      689,244
             
   $ 6,875,424    $ 6,343,766
             

 

6


Atmos Energy Corporation

Financial Highlights, continued (Unaudited)

 

Condensed Statements of Cash Flows

   Three Months Ended
December 31
 
(000s)    2009     2008  

Cash flows from operating activities

    

Net income

   $ 93,330      $ 75,963   

Depreciation and amortization

     53,875        53,134   

Deferred income taxes

     12,832        27,175   

Changes in assets and liabilities

     (69,263     (13,240

Other

     4,382        7,683   
                

Net cash provided by operating activities

     95,156        150,715   

Cash flows from investing activities

    

Capital expenditures

     (115,439     (107,367

Other, net

     (1,873     (1,210
                

Net cash used in investing activities

     (117,312     (108,577

Cash flows from financing activities

    

Net increase in short-term debt

     111,335        5,312   

Repayment of long-term debt

     —          (278

Cash dividends paid

     (31,234     (30,165

Issuance of common stock

     5,681        6,075   
                

Net cash provided by (used in) financing activities

     85,782        (19,056
                

Net increase in cash and cash equivalents

     63,626        23,082   

Cash and cash equivalents at beginning of period

     111,203        46,717   
                

Cash and cash equivalents at end of period

   $ 174,829      $ 69,799   
                
     Three Months Ended
December 31
 

Statistics

   2009     2008  

Consolidated natural gas distribution throughput (MMcf as metered)

     134,521        125,782   

Consolidated regulated transmission and storage transportation volumes (MMcf)

     95,938        135,858   

Consolidated natural gas marketing sales volumes (MMcf)

     87,229        93,308   

Natural gas distribution meters in service

     3,208,531        3,214,377   

Natural gas distribution average cost of gas

   $ 5.12      $ 8.28   

Natural gas marketing net physical position (Bcf)

     17.4        16.3   

###

 

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