Atmos Energy Corporation's Nonutility Performance Drives Fiscal 2006 First Quarter Results.DALLAS Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. -- Atmos Energy Atmos Energy (NYSE: ATO), headquartered in Dallas, Texas, is the largest distributor of natural gas in the United States, serving 3.1 million customers nationwide. Atmos acquired TXU's natural gas and pipeline holdings in 2004. Corporation (NYSE NYSE See: New York Stock Exchange :ATO ATO Australian Taxation Office ATO Ambito Territoriale Ottimale (Italy) ATO Alpha Tau Omega ATO Air Traffic Organization (FAA) ATO Arab Towns Organization ATO Air Tasking Order ATO Assemble To Order ) today reported consolidated results for its first quarter of fiscal 2006 ending December December: see month. 31, 2005. --For the fiscal 2006 first quarter net income was $71.0 million, or $0.88 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, up approximately 19 percent from net income of $59.6 million, or $0.79 per diluted share in the prior-year quarter, despite a 5 million increase in weighted average shares outstanding year over year. --Nonutility businesses contributed $22.6 million, or $0.28 per diluted share in the fiscal 2006 first quarter, largely due to capturing favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. arbitrage arbitrage: see foreign exchange. arbitrage Business operation involving the purchase of foreign currency, gold, financial securities, or commodities in one market and their almost simultaneous sale in another market, in order to profit from price spreads during a period of unprecedented market volatility. --Gross profit for the fiscal 2006 first quarter was negatively affected by $8.0 million from weather that was 7 percent warmer than normal, as adjusted for jurisdictions with weather-normalized rates. Warmer-than-normal-weather in the Mid-Tex Division accounted for $4.5 million of the reduction in gross profit. Atmos Energy's budgeted earnings for the full 2006 fiscal year reflect 30-year normal weather. --First quarter results reflect the adverse impact of the effects of Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. on operations in the Louisiana Louisiana (ləwē'zēăn`ə, l ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. Division, which
reduced gross profit by about $2.5 million. As previously disclosed, the
company expects a negative impact on gross profit of between $10 million
and $12 million for the full 2006 fiscal year."In the first quarter, we were able to offset much of the effect on our earnings of unseasonably warm weather with a continued strong performance in our nonutility businesses, especially our natural gas marketing operations, and our continued control of operations and maintenance expenses," said Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. W. Best, chairman, president and chief executive officer of Atmos Energy Corporation. "Weather in our Mid-Tex Division, which makes up almost 50 percent of our customer base and does not have weather-normalized rates, was 17 percent warmer than normal. We remain focused on seeking rate design that will mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the effects of weather, conservation and regulatory lag on our utility
margins."Consolidated gross profit for the three months ended December 31, 2005 was $346.6 million, compared with $322.1 million in the prior-year quarter. Utility gross profit increased $22.9 million to $280.2 million for the three months ended December 31, 2005, compared with $257.3 million in the prior-year quarter, before intersegment eliminations. Consolidated utility throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. increased to 125.8 billion cubic feet (Bcf) for the three months ended December 31, 2005, compared with 118.9 Bcf for the prior-year quarter. The increases in utility gross profit and throughput primarily reflect weather, as adjusted for jurisdictions with weather-normalized rates that was 7 percent colder than the prior-year quarter. Additionally, the Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by Division benefited from an increase in its WNA WNA World Nuclear Association (UK) WNA Wisconsin Nurses Association WNA Weather Normalization Adjustment WNA Wireless Network Access WNA Wireless Network Administration WNA Wednesday Night Acro WNA White Noise Acceleration coverage during the three months ended December 31, 2005, and colder than normal weather prior to the beginning of its WNA period. Offsetting these increases was a reduction in gross profit in the Louisiana Division due to the impact of Hurricane Katrina. Natural gas marketing gross profit decreased $0.5 million to $26.3 million for the three months ended December 31, 2005, compared with $26.8 million for the three months ended December 31, 2004, before intersegment eliminations. For the fiscal 2006 first quarter, the storage and marketing margin of $26.3 million included a negative $29.5 million mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. impact, which resulted from the change in value of the physical/financial portfolio from September September: see month. 30, 2005. For the first quarter of fiscal 2005, the storage and marketing margin of $26.8 million included a positive $10.7 million of mark-to-market impact, which resulted from the change in value of the physical/financial portfolio from September 30, 2004. As of December 31, 2005, the physical storage position was 12.8 Bcf with equal and offsetting financial hedges, compared to physical/financial positions of 6.4 Bcf at December 31, 2004. Consolidated natural gas marketing sales volumes were 71.5 Bcf for the three months ended December 31, 2005, compared with 60.3 Bcf in the prior-year quarter. Pipeline and storage gross profit increased $2.2 million to $39.7 million for the three months ended December 31, 2005, compared with $37.5 million in the prior-year quarter. The increase in pipeline and storage gross profit was primarily attributable to increased throughput on the Atmos Pipeline-Texas system coupled with higher transportation and related services margins. Consolidated operation and maintenance expense for the three months ended December 31, 2005, was $108.2 million, compared with $110.8 million for the three months ended December 31, 2004. Excluding the provision for doubtful accounts, operation and maintenance expense for the three months ended December 31, 2005, decreased $3.8 million compared with the prior-year quarter. The decrease was primarily attributable to a reduction in third-party costs for outsourced administrative and meter reading functions in the first quarter of fiscal 2005 that were subsequently in-sourced during the first quarter of fiscal 2006, partially offset by a $2.0 million charge for Hurricane Katrina-related losses, increased employee headcount and higher benefit costs. The provision for doubtful accounts increased from $7.5 million for the three months ended December 31, 2004 to $8.7 million for the three months ended December 31, 2005. The $1.2 million increase was primarily attributable to increases in the utility segment provision due to potential increased collection risk associated with higher natural gas prices. In the utility segment, the average cost of natural gas for the three months ended December 31, 2005, was $11.82 per thousand cubic feet (Mcf), compared with $7.22 per Mcf for the prior-year quarter. Taxes, other than income taxes, for the three months ended December 31, 2005, were $45.4 million, compared with $38.7 million for the prior-year quarter. The $6.7 million increase was primarily related to franchise fees and state gross receipts taxes A gross receipts tax, sometimes referred to as a gross excise tax, is a tax on the total gross revenues of a company, regardless of their source. It is similar to a sales tax, but it is levied on the seller of goods or services rather than the consumer. , both of which are calculated as a percentage of revenue and are paid by utility customers as a component of their monthly bills. Although these amounts are included as a component of revenue in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the company's tariffs This is a list of tariffs and trade legislation:
adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. or unfavorably affect net income on a temporary basis. However, there is no permanent effect on net income. Interest charges for the three months ended December 31, 2005, were $36.2 million, compared with $32.5 million for the prior-year quarter. The $3.7 million increase was primarily due to higher average outstanding short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. balances used to fund natural gas purchases at significantly higher prices, coupled with an increase in the three-month LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). rate. These increases were partially offset by $1.2 million in interest savings arising from the early payoff of $72.5 million of the company's First Mortgage Bonds in June 2005. For the three months ended December 31, 2005, cash flow generated from operating activities reflected a $195.4 million cash outflow, compared with a $67.9 million cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. from operations for the three months ended December 31, 2004. Overall, operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. was adversely impacted by significantly higher natural gas prices, which increased the levels of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , natural gas inventories and under-collected deferred gas costs. These increases were partially offset by working capital management efforts which favorably affected the timing of payments for accounts payable and other accrued liabilities Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. . Capital expenditures increased to $102.5 million for the three months ended December 31, 2005, from $67.2 million for the three months ended December 31, 2004. The $35.3 million increase in capital expenditures primarily reflects increased spending associated with the company's North Side Loop project in the Dallas/Fort Worth Metroplex The Dallas–Fort Worth–Arlington metropolitan area, a title designated by the U.S. Census as of 2003, encompasses 12 counties within the U.S. state of Texas. The metropolitan area is further divided into two metropolitan divisions: Dallas–Plano–Irving and other pipeline expansion projects in the Atmos Pipeline-Texas Division as well as various capital projects in the Mid-Tex Division. Outlook Atmos Energy's leadership remains focused on enhancing shareholder value by delivering consistent earnings growth and providing a sound and attractive dividend. As a result of additional short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowings to fund natural gas purchases and meet working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. during the winter heating season, the debt to capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. ratio typically reaches its peak at the end of the fiscal first quarter. At December 31, 2005, debt to total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. was 61.9 percent. However, Atmos Energy remains committed to reducing the debt to capitalization ratio to a targeted range of 50 to 55 percent within two to four years. The company believes that despite the continued unseasonably warm weather that is negatively impacting its utility results, natural gas price volatility creates the potential for the complementary nonutility businesses to deliver stronger results, thereby partially offsetting the impact of warmer weather at the utility. As a result, Atmos Energy still anticipates earnings per diluted share in the full 2006 fiscal year to be between $1.80 and $1.90, as previously announced. However, changes in these events or other circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that the company cannot currently anticipate could materially impact earnings, and could result in earnings for fiscal 2006 significantly above or below this outlook. Conference Call to be Webcast February 8, 2006 Atmos Energy Corporation will host a conference call with financial analysts to discuss the financial results for the first quarter of fiscal 2006 on Wednesday, February 8, 2006, at 8 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The phone number is 800-218-0204. The conference call will be webcast live on the Atmos Energy Web site at www.atmosenergy.com. A slide presentation also will be available on the company's Web site, and a playback Playback could mean:
German chemist known for his research on the components of blood. He won a 1930 Nobel Prize for his work on the synthesis of hemin. , senior vice president, utility operations; JD Woodward, senior vice president, nonutility operations; Fred Meisenheimer, vice president and controller; Laurie Sherwood, vice president, corporate development, and treasurer; and Susan Kappes, vice president, investor relations Investor relations The process by which the corporation communicates with its investors. . Highlights and Recent Developments New Credit Facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities During the first quarter of fiscal 2006, Atmos Energy renewed and amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. its credit facilities to increase its total availability under its committed and uncommitted credit facilities from $893 million to approximately $1.5 billion. On October 18, 2005, Atmos Energy entered into a $600 million 3-year committed revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility to replace its $600 million 364-day working capital facility. The credit facility will expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. on October 18, 2008. This facility serves as a backup liquidity facility for the company's commercial paper program. Additionally, on November 10, 2005, Atmos Energy entered into a new $300 million 364-day committed revolving credit facility to supplement amounts available under its existing $18 million committed credit facility and $25 million uncommitted credit facility. The new $600 million and $300 million committed credit facilities contain essentially the same terms as those of the previous $600 million committed credit facility. On November 28, 2005, Atmos Energy Marketing amended its $250 million uncommitted demand working capital credit facility, primarily to increase the amount of credit available from $250 million to a maximum of $580 million. The credit facility will expire on March 31, 2006. The new credit facility contains essentially the same terms as those of the previous credit facility. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. from liability established by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. When used in this news release or in any of the company's other documents or oral presentations, the words "anticipate," "believes," "estimate," "expects," "forecast," "goal," "intends," "objective," "plans," "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 relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the acquisition of the operations of TXU TXU Texas Utilities (Electric and Gas Company) TXU Transmitter Unit Gas, the company's ability to continue to access the capital markets and the other factors discussed in the company's SEC filings. These factors include the risks and uncertainties discussed in the company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended September 30, 2005. 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 about 3.2 million gas utility customers. Atmos Energy's utility operations serve more than 1,500 communities in 12 states from the Blue Ridge Mountains Blue Ridge also Blue Ridge Mountains A range of the Appalachian Mountains extending from southern Pennsylvania to northern Georgia. It rises to 2,038.6 m (6,684 ft) at Mount Mitchell in the Black Mountains of western North Carolina. in the East to the Rocky Mountains Rocky Mountains, major mountain system of W North America and easternmost belt of the North American cordillera, extending more than 3,000 mi (4,800 km) from central N.Mex. to NW Alaska; Mt. Elbert (14,431 ft/4,399 m) in Colorado is the highest peak. in the West. Atmos Energy's nonutility operations, organized under Atmos Energy Holdings, Inc., operate in 22 states. They provide natural gas marketing and procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. services to industrial, commercial and municipal customers and manage company-owned natural gas pipeline and storage assets, including one of the largest intrastate in·tra·state adj. Relating to or existing within the boundaries of a state. Adj. 1. intrastate - relating to or existing within the boundaries of a state; "intrastate as well as interstate commerce" natural gas pipeline systems in Texas. For more information, visit www.atmosenergy.com.
Atmos Energy Corporation
Financial Highlights (Unaudited)
Three Months Ended
Statements of Income December 31 Percentage
-------------------- 2005 2004 Change
(000s except per share) ----------- ---------- ----------
Operating revenues:
Utility segment $1,405,010 $913,681
Natural gas marketing segment 1,101,845 493,801
Pipeline and storage segment 39,712 43,690
Other nonutility segment 1,492 1,359
Intersegment eliminations (264,239) (83,907)
----------- ----------
2,283,820 1,368,624
Purchased gas cost:
Utility segment 1,124,829 656,370
Natural gas marketing segment 1,075,526 466,957
Pipeline and storage segment -- 6,221
Other nonutility segment -- --
Intersegment eliminations (263,125) (83,027)
----------- ----------
1,937,230 1,046,521
----------- ----------
Gross profit 346,590 322,103 8%
Operation and maintenance expense 108,217 110,777 (2)%
Depreciation and amortization 43,260 43,997 (2)%
Taxes, other than income 45,416 38,655 17%
----------- ---------- ----------
Total operating expenses 196,893 193,429 2%
Operating income 149,697 128,674 16%
Miscellaneous income, net 448 385 16%
Interest charges 36,189 32,542 11%
----------- ---------- ----------
Income before income taxes 113,956 96,517 18%
Income tax expense 42,929 36,918 16%
----------- ---------- ----------
Net income $71,027 $59,599 19%
=========== ========== ==========
Basic net income per share $0.88 $0.79
Diluted net income per share $0.88 $0.79
Cash dividends per share $.315 $.310
Weighted average shares outstanding:
Basic 80,259 75,306
Diluted 80,722 75,725
Three Months Ended
December 31 Percentage
Summary Net Income (Loss) by Segment Change
(000s) 2005 2004
------------------------------------ ---------- ---------- ----------
Utility $48,413 $37,023 31%
Natural gas marketing 11,452 13,262 (14)%
Pipeline and storage 11,167 9,084 23%
Other nonutility (5) 230 (102)%
---------- ---------- ----------
Consolidated net income $71,027 $59,599 19%
========== ========== ==========
Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
Condensed Balance Sheets December 31, September 30,
------------------------ 2005 2005
(000s) ------------ -------------
Net property, plant and equipment $3,439,934 $3,374,367
Cash and cash equivalents 49,451 40,116
Cash held on deposit in margin account 74,076 80,956
Accounts receivable, net 1,229,190 454,313
Gas stored underground 583,572 450,807
Other current assets 239,992 238,238
------------ -------------
Total current assets 2,176,281 1,264,430
Goodwill and intangible assets 737,641 737,787
Deferred charges and other assets 265,146 276,943
------------ -------------
$6,619,002 $5,653,527
============ =============
Shareholders' equity $1,637,617 $1,602,422
Long-term debt 2,181,497 2,183,104
------------ -------------
Total capitalization 3,819,114 3,785,526
Accounts payable and accrued liabilities 1,170,402 461,314
Other current liabilities 401,948 503,368
Short-term debt 474,059 144,809
Current maturities of long-term debt 3,286 3,264
------------ -------------
Total current liabilities 2,049,695 1,112,755
Deferred income taxes 284,196 292,207
Deferred credits and other liabilities 465,997 463,039
------------ -------------
$6,619,002 $5,653,527
============ =============
Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
Three Months Ended
Condensed Statements of Cash Flows December 31
---------------------------------- 2005 2004
(000s) ----------- -----------
Cash flows from operating activities
Net income $71,027 $59,599
Depreciation and amortization 43,407 44,251
Deferred income taxes 20,448 8,308
Changes in assets and liabilities (333,931) (45,231)
Other 3,680 977
----------- -----------
Net cash (used in) provided by operating
activities (195,369) 67,904
Cash flows from investing activities
Capital expenditures (102,465) (67,201)
Acquisitions -- (1,912,532)
Other, net (1,121) (1,051)
----------- -----------
Net cash used in investing activities (103,586) (1,980,784)
Cash flows from financing activities
Net increase in short-term debt 329,250 28,797
Net proceeds from issuance of long-term debt -- 1,385,847
Repayment of long-term debt (1,695) (3,373)
Settlement of Treasury lock agreements -- (43,770)
Cash dividends paid (25,429) (24,521)
Net proceeds from equity offering -- 382,014
Issuance of common stock 6,164 11,116
----------- -----------
Net cash provided by financing activities 308,290 1,736,110
----------- -----------
Net increase (decrease) in cash and cash
equivalents 9,335 (176,770)
Cash and cash equivalents at beginning of
period 40,116 201,932
----------- -----------
Cash and cash equivalents at end of period $49,451 $25,162
=========== ===========
Three Months Ended
December 31
Statistics 2005 2004
----------- ----------- -----------
Heating degree days (1) 1,056 988
Percent of normal (1) 93% 88%
Consolidated utility gas throughput
(MMcf as metered) 125,790 118,935
Consolidated natural gas marketing sales
volumes (MMcf) 71,496 60,296
Consolidated pipeline transportation
volumes (MMcf) 89,613 72,753
Natural gas meters in service 3,210,476 3,184,727
Utility average cost of gas $11.82 $7.22
(1) Adjusted for weather-normalized operations.
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