8,650,000 Shares
Atmos Energy Corporation
Common Stock
Atmos Energy Corporation is selling all of the shares.
The shares trade on the New York Stock Exchange under the symbol ATO. On July 13, 2004, the last sale price of the shares as reported on the New York Stock Exchange was $24.91 per share.
Investing in our common stock involves risks that are described in the Risk Factors section beginning on page S-7 of this prospectus supplement.
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Per Share | Total | ||||||
|
|
|
|||||||
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Public
offering price
|
$24.75 | $214,087,500 | ||||||
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Underwriting
discount
|
$.99 | $8,563,500 | ||||||
|
Proceeds,
before expenses, to Atmos
|
$23.76 | $205,524,000 | ||||||
The underwriters may also purchase up to an additional 1,289,393 shares at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus supplement to cover overallotments.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The shares will be ready for delivery on or about July 19, 2004.
Merrill Lynch & Co.
| JPMorgan |
| Lehman Brothers |
| UBS Investment Bank |
| A.G. Edwards |
| Edward Jones |
The date of this prospectus supplement is July 13, 2004.
We have not, and the underwriters have not, authorized any other person to provide you with any information or to make any representations not contained in this prospectus supplement or the accompanying prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer of any securities other than the shares. This document is in two parts. The first part is this prospectus supplement, which describes specific terms of this offering and other matters relating to us and our financial condition. The second part is the accompanying prospectus, dated January 30, 2002, which gives more general information about securities we have offered from time to time, some of which may not apply to the shares we are currently offering. If the description of this offering or our operations varies between this prospectus supplement and the accompanying prospectus, you should rely on the information in this prospectus supplement. You should assume that the information appearing in this prospectus supplement and the accompanying prospectus, as well as the information contained in any document incorporated by reference, is accurate as of the date of each such document only.
Prospectus Supplement
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Incorporation by Reference
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ii | |||
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Cautionary Statement Regarding Forward-Looking Statements
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iii | |||
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Prospectus Supplement Summary
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S-1 | |||
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Risk Factors
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S-7 | |||
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Use of Proceeds
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S-10 | |||
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Market Price of Common Stock and Dividends
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S-10 | |||
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Capitalization
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S-11 | |||
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The TXU Gas Acquisition
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S-12 | |||
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Unaudited Pro Forma Combined Financial Information
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S-16 | |||
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Our Business
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S-26 | |||
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Description of Common Stock
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S-32 | |||
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Underwriting
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S-36 | |||
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Legal Matters
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S-39 | |||
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Experts
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S-39 | |||
| Prospectus | ||||
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Cautionary Statement Regarding Forward-Looking Statements
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ii | |||
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Atmos Energy Corporation
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1 | |||
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Use of Proceeds
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1 | |||
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Ratio of Earnings to Fixed Charges
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2 | |||
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Securities We May Issue
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2 | |||
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Description of Debt Securities
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3 | |||
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Description of Common Stock
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18 | |||
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Plan of Distribution
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20 | |||
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Legal Matters
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21 | |||
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Experts
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21 | |||
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Where You Can Find More Information
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22 | |||
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Incorporation of Certain Documents by Reference
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22 | |||
The distribution of this prospectus supplement and the accompanying prospectus, and the offering of the shares, may be restricted by law in certain jurisdictions. You should inform yourself about, and observe, any of these restrictions. This prospectus supplement and the accompanying prospectus do not constitute, and may not be used in connection with, an offer or solicitation by anyone in any jurisdiction in which the offer or solicitation is not authorized, or in which the person making the offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make the offer or solicitation.
i
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference information in this prospectus supplement and the accompanying prospectus that we have filed with it. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this prospectus supplement and the accompanying prospectus, except for any information that is superseded by information that is included directly in this document. We incorporate by reference the documents listed below and any future filings we make with the SEC under sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the termination of this offering. These additional documents include periodic reports, such as annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K (other than information furnished under Item 9 or 12, which is deemed not to be incorporated by reference in this prospectus supplement or the accompanying prospectus), as well as proxy statements. You should review these filings as they may disclose a change in our business, prospects, financial condition or other affairs after the date of this prospectus supplement. The information that we file later with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and before the termination of this offering will automatically update and supersede previous information included or incorporated by reference in this prospectus supplement and the accompanying prospectus.
This prospectus supplement and the accompanying prospectus incorporate by reference the documents listed below that we have filed with the SEC but have not been included or delivered with this document. These documents contain important information about us and our financial condition.
| | Our annual report on Form 10-K for the year ended September 30, 2003; | |
| | Our proxy statement dated December 29, 2003; | |
| | Our quarterly reports on Form 10-Q for the quarterly periods ended December 31, 2003 and March 31, 2004; and | |
| | Our current reports on Form 8-K filed with the SEC on January 22, 2004 and July 7, 2004 and our current report on Form 8-K/A filed with the SEC on July 2, 2004. |
You may obtain a copy of any of these filings, or any of our future filings, from us without charge by requesting it in writing or by telephone at the following address or telephone number:
Atmos Energy Corporation
ii
Statements contained or incorporated by reference in this prospectus supplement
that are not statements of historical fact are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933. Forward-looking
statements are based on managements beliefs as well as assumptions made
by, and information currently available to, management. Because such statements
are based on expectations as to future results and are not statements of fact,
actual results may differ materially from those stated. Important factors
that could cause future results to differ include, but are not limited to:
All of these factors are difficult to predict
and many are beyond our control. Accordingly, while we believe 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.
When used in our 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. We undertake no
obligation to update or revise our forward-looking statements, whether as
a result of new information, future events or otherwise. For further factors
you should consider, please refer to the Risk Factors section
beginning on page S-7 of this prospectus supplement and the Managements
Discussion and Analysis of Financial Condition and Results of Operations section
in our annual report on Form 10-K for the year ended September 30,
2003 and in our quarterly reports on Form 10-Q for the quarterly periods
ended December 31, 2003 and March 31, 2004.
The terms we, our, us and Atmos
refer to Atmos Energy Corporation and its subsidiaries unless the context
suggests otherwise. The term you refers to a prospective investor.
The abbreviations Mcf, MMcf and Bcf mean
thousand cubic feet, million cubic feet and billion cubic feet, respectively.
Except as otherwise indicated, all information in this prospectus supplement
assumes that the underwriters have not exercised their overallotment option.
iii
You should read the following summary in conjunction with
the more detailed information contained elsewhere in this prospectus supplement,
the accompanying prospectus and the documents incorporated by reference
in this prospectus supplement and the accompanying prospectus.
Atmos Energy Corporation
Atmos Energy Corporation and its subsidiaries are engaged primarily in the
natural gas utility business as well as other natural gas nonutility businesses.
We distribute natural gas through sales and transportation arrangements
to approximately 1.7 million residential, commercial, public authority
and industrial customers through our six regulated utility divisions, which
cover service areas located in 12 states. Our primary service areas
are located in Colorado, Kansas, Kentucky, Louisiana, Mississippi, Tennessee
and Texas. We have more limited service areas in Georgia, Illinois, Iowa,
Missouri and Virginia. In addition, we transport natural gas for others
through our distribution system.
Through our nonutility businesses, we provide natural gas management and
marketing services to municipalities, other local gas distribution companies
and industrial customers in 18 states. We own or hold an interest in
natural gas storage fields in Kansas, Kentucky, Louisiana and Mississippi
that we use to supply natural gas to our customers. We market natural gas
to industrial and agricultural customers primarily in West Texas and to
industrial customers in Louisiana. We also construct electric power generating
plants and associated facilities for municipalities and industrial customers
to meet their peak-load demands.
Our operations are divided into three segments:
Our overall strategy is to:
Over the last five years, we have grown through several acquisitions, including
our acquisition in April 2001 of the remaining 55% interest in Woodward
Marketing, L.L.C. that we did not already own, our acquisition in July 2001
of the assets of Louisiana Gas Service Company and our acquisition in December
2002 of Mississippi Valley Gas Company.
We have experienced 20 consecutive years of increasing dividends and consistent
earnings growth after giving effect to our acquisitions. We have achieved
this record of growth while operating our utility operations efficiently
by managing our operating and maintenance expenses, leveraging our technology,
such as our 24-hour call center, to achieve more efficient operations, focusing
on regulatory rate proceedings to increase revenue as our costs increased,
and mitigating weather-related risks through weather-normalized rates in
many of our service areas. Additionally, we have strengthened our nonutility
business by ceasing speculative trading activities and actively pursuing
opportunities to increase the amount of storage available to us.
S-1
Our core values include focusing on our employees and customers while conducting
our business with honesty and integrity. We are strengthening our culture
through ongoing communication with our employees and enhanced employee training.
The TXU Gas Acquisition
On June 17, 2004, our subsidiary, LSG Acquisition Corporation, entered
into a definitive agreement with TXU Gas Company to acquire the natural
gas distribution and pipeline operations of TXU Gas.
The TXU Gas operations we are acquiring are regulated businesses engaged
in the purchase, transmission, distribution and sale of natural gas in the
north-central, eastern and western parts of Texas. TXU Gas provides gas
distribution services to over 1.4 million residential and business
customers in Texas, including the Dallas/ Fort Worth metropolitan area.
TXU Gas owns and operates a system consisting of 6,162 miles of gas
transmission and gathering lines and five underground storage reservoirs,
all within Texas. The acquisition would increase the number of customers
we serve in our distribution business to over 3.1 million and make
us one of the largest publicly traded companies in the United States whose
primary business is the transmission and distribution of natural gas and
the provision of related services. It would also make us one of the largest
intrastate pipeline operators in Texas.
The purchase price, excluding transaction costs, for the acquisition is
$1.925 billion, which is payable in cash. The price is subject to adjustment
if at the time of closing the working capital of TXU Gas is less or more
than approximately $121 million. The price is also subject to increase
by the amount of any capital expenditures made by TXU Gas prior to closing
that exceed its budgeted amounts. We are not assuming any indebtedness in
the transaction. TXU Gas has agreed to repay or redeem all of its existing
indebtedness and its preferred stock and to retain or pay certain other
liabilities under the terms of the acquisition agreement.
We have received a commitment from Merrill Lynch, Pierce, Fenner & Smith
Incorporated, one of the underwriters in this offering, and one of its affiliates
to provide a senior unsecured credit facility in the amount of $1.925 billion
to finance, or backstop the issuance of commercial paper to finance, this
acquisition. We refer to this facility as the bridge financing facility.
We intend to use the net proceeds of this offering, along with borrowings
under this bridge financing facility, to pay the purchase price for the
TXU Gas acquisition. The commitment is subject to the absence of a material
adverse effect on our business and assets (after giving effect to the acquisition),
the absence of any new adverse information that would materially impair
the syndication of the bridge financing facility and other specified conditions.
The bridge financing facility would mature 364 days after the closing
date of the acquisition. The amount of the bridge financing facility would
be reduced to the extent we obtain acquisition financing, such as the proceeds
of this offering, prior to the closing of the acquisition. We intend to
seek long-term debt and additional common equity financings after the closing
of this acquisition to refinance the bridge financing facility.
We expect the acquisition to close by the end of the calendar year 2004;
however, this acquisition is subject to several conditions, including regulatory
approvals and clearance by antitrust authorities. This offering is not contingent
on the successful completion of the TXU Gas acquisition.
In this prospectus supplement, we refer to TXU Gas Company as TXU Gas and
our acquisition of the operations of TXU Gas as the TXU Gas acquisition.
For more information on the terms of the TXU Gas acquisition and the bridge
financing facility, see The TXU Gas Acquisition. For more information
on the operations of TXU Gas, see The TXU Gas Acquisition
TXU Gas.
S-2
Atmos Energy Corporation
The following table presents summary consolidated financial data for the
periods and as of the dates indicated for Atmos Energy Corporation. The
summary consolidated financial data for our fiscal years ended September 30,
2003, 2002 and 2001 are derived from our audited consolidated financial
statements, which are incorporated by reference in this prospectus supplement
from our annual report on Form 10-K for the year ended September 30,
2003. Some prior year amounts have been reclassified to conform with the
current year presentation. The summary consolidated financial data for the
six months ended March 31, 2004 and 2003 are derived from our unaudited
consolidated financial statements, which are also incorporated by reference
into this prospectus supplement from our quarterly report on Form 10-Q
for the quarterly period ended March 31, 2004. Please note that because
of seasonal and other factors, the results of operations for the six-month
periods presented below are not indicative of results of operations for
the entire fiscal years.
The information in the following table is only a summary and does not provide
all of the information contained in our financial statements. Therefore,
you should read the information presented below in conjunction with Managements
Discussion and Analysis of Financial Condition and Results of Operations
and our consolidated financial statements and related notes included in
our annual report on Form 10-K for the year ended September 30,
2003, and our quarterly report on Form 10-Q for the quarterly period
ended March 31, 2004, each of which is incorporated by reference in
this prospectus supplement.
S-3
TXU Gas Company
The following table presents summary historical consolidated financial data
of TXU Gas Company for the periods and as of the dates indicated. The common
equity of TXU Gas is owned entirely by TXU Corp. We derived the summary
historical consolidated financial data for the fiscal years ended December 31,
2003, 2002 and 2001 from the audited consolidated financial statements of
TXU Gas, which are incorporated by reference in this prospectus supplement
from our current report on Form 8-K filed with the SEC on July 7,
2004. We derived the summary historical consolidated financial data for
the three months ended March 31, 2004 and 2003 from the unaudited consolidated
financial statements of TXU Gas, which are also incorporated by reference
in this prospectus supplement from our current report on Form 8-K filed
with the SEC on July 7, 2004. Because of seasonal and other factors,
the results of operations for the three-month periods are not indicative
of results of operations for the entire fiscal years.
Please note that the summary consolidated financial data of TXU Gas presented
below, and the consolidated financial statements for TXU Gas incorporated
by reference in this prospectus supplement, reflect the entire assets and
operations of TXU Gas. However, under the terms of the TXU Gas acquisition,
we are only acquiring the natural gas distribution and pipeline operations
of TXU Gas. Please refer to The TXU Gas Acquisition and the
Unaudited Pro Forma Combined Financial Information for more
information.
The information in the following table is only a summary and does not provide
all of the information contained in the financial statements of TXU Gas.
Therefore, you should read the information presented below in conjunction
with the historical consolidated financial statements and related notes
of TXU Gas for the fiscal years ended December 31, 2003, 2002 and 2001
and for the quarterly periods ended March 31, 2004 and 2003, which
are included in our current report on Form 8-K filed with the SEC on
July 7, 2004 and incorporated by reference in this prospectus supplement.
See Incorporation by Reference.
S-4
The following table presents summary unaudited pro forma combined financial
information for the periods and as of the dates indicated. This information
is based on our historical consolidated financial statements and TXU Gass
historical financial statements, adjusted to give effect to the TXU Gas
acquisition, this offering and the proposed financing for the TXU Gas acquisition.
The unaudited pro forma combined income statement information for the six
months ended March 31, 2004 and for the twelve months ended September 30,
2003 each give effect to the TXU Gas acquisition, this offering and the
proposed financing for the acquisition as if each had occurred on October 1,
2002. The unaudited pro forma combined balance sheet information as of March 31,
2004 gives effect to the TXU Gas acquisition, this offering and the proposed
financing for the acquisition as if each had occurred on March 31,
2004. The summary unaudited pro forma combined financial information does
not give effect to the anticipated refinancing of the bridge financing facility
with long-term debt and common equity financings, which would dilute or
reduce the unaudited pro forma combined earnings per share presented below.
The summary unaudited pro forma combined financial information presented
below is not necessarily indicative of either our future results following
the TXU Gas acquisition or the results that might have been recorded if
the TXU Gas acquisition and related financing transactions had been consummated
on such dates.
The summary unaudited pro forma combined financial information below should
be read in conjunction with Unaudited Pro Forma Combined Financial
Information. See The TXU Gas Acquisition for a description
of the TXU Gas acquisition and the proposed financing transaction that we
expect to enter into in connection with the TXU Gas acquisition.
successful completion, financing and integration
of our pending acquisition of the operations of TXU Gas Company and other
acquisitions we have made or may make in the future;
adverse weather conditions, such as warmer-than-normal
weather in our utility service territories or colder-than-normal weather
that could adversely affect our natural gas marketing activities;
national, regional and local economic
conditions;
increased competition from other energy
suppliers and alternative forms of energy;
regulatory trends and decisions, including
deregulation initiatives and the impact of rate proceedings before various
state regulatory commissions;
changes in the availability and prices
of natural gas, including the volatility of natural gas prices;
effects of inflation;
market risks beyond our control affecting
our risk management activities, including market liquidity, commodity
price volatility and counterparty creditworthiness;
our ability to continue to access the
capital markets; and
other factors discussed in this prospectus
supplement and our other filings with the SEC.
the utility segment, which includes
our related natural gas distribution and sales operations;
the natural gas marketing segment, which
includes a variety of natural gas management services; and
our other nonutility segment, which
includes our storage services and our electric power generating plant
construction services.
continue our growth through completing
and integrating the acquisition of the operations of TXU Gas Company,
described under the caption The TXU Gas Acquisition;
improve the quality and consistency
of earnings growth, while operating our natural gas utility and nonutility
businesses exceptionally well; and
enhance and strengthen a culture built
on our core values.
As of March 31,
As of September 30,
2004
2003
2003
2002
2001
(unaudited)
$
2,821,192
$
2,651,643
$
2,626,913
$
2,061,135
$
2,110,214
$
864,624
$
864,228
$
863,918
$
670,463
$
692,399
8,093
38,857
127,940
167,771
221,942
$
872,717
$
903,085
$
991,858
$
838,234
$
914,341
$
932,849
$
707,729
$
857,517
$
573,235
$
583,864
(1)
Beginning in our quarterly report on
Form 10-Q for the quarterly period ended March 31, 2004, for
the unaudited balance sheet as of March 31, 2004 and all previous
periods, we have reclassified our regulatory removal obligation from
accumulated depreciation to a liability. The amounts presented above
for total assets reflect this reclassification for all periods presented.
(2)
Short-term debt is comprised of current
maturities of long-term debt and short-term debt.
As of March 31,
As of December 31,
2004
2003
2003
2002
2001
(unaudited)
$
2,226,311
$
2,320,223
$
2,327,954
$
2,297,430
$
4,551,221
$
430,193
$
430,421
$
430,285
$
580,466
$
708,090
150,000
150,000
125,000
200,000
$
430,193
$
580,421
$
580,285
$
705,466
$
908,090
$
916,339
$
877,352
$
879,033
$
827,804
$
1,060,105
(1)
As a result of the implementation of
Financial Accounting Standards Board Interpretation No. 46
Consolidation of Variable Interest Entities in
December 2003, a wholly owned subsidiary financing trust that issued
preferred securities is no longer consolidated. Total asset and long-term
debt amounts have been restated for all periods to include an investment
in the wholly owned subsidiary financing trust and subordinated debentures
issued by TXU Gas that are the sole assets of the trust.
Six Months
Ended
Year Ended
March 31,
2004
September 30,
2003 (1)
(unaudited)
$
2,734,578
$
4,126,293
686,645
1,070,811
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