Atmos Energy Corporation Reports Solid Results for Fiscal 2004 First Quarter.Energy Editors/Business Editors DALLAS--(BUSINESS WIRE)--Feb. 10, 2004 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 net income of $29.5 million, or $0.57 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, for the three months ended December December: see month. 31, 2003, compared with net income of $25.8 million, or $0.60 per diluted share, for the three months ended December 31, 2002. Results for the fiscal 2004 first quarter represent a 14 percent increase in net income, compared with the same period last year, despite weather that was 12 percent warmer than last year. Earnings per diluted share decreased 5 percent because the company's average number of diluted shares outstanding rose by 8.9 million shares, or 21 percent, from December 31, 2002, to December 31, 2003. "Our strategy of combining complementary utility and nonutility operations benefited our shareholders once again this quarter," 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. "The strong performance by our nonutility gas marketing segment helped to overcome lower results in our gas utility operations caused largely by unseasonably warm weather." "The steps taken by our nonutility operations during the past year to reduce the segment's risk profile have enhanced its margins," Best said. "In addition, tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic revisions recently approved in two of our rate jurisdictions will add approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $8.4 million annually to future revenue. Therefore, we feel confident that Atmos Energy is on track to meet our earlier-announced guidance for fiscal 2004 of earning between $1.55 and $1.60 per diluted share." Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: gross profit for the three months ended December 31, 2003, was $159.1 million, compared with $137.2 million for the prior-year quarter. Consolidated utility gas 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. for the three months ended December 31, 2003, was 68.2 billion cubic feet (Bcf), compared with 70.9 Bcf for the prior-year quarter. The increase in gross profit primarily reflects the effect of a full three months of results in the current period from the acquisition in December 2002 of 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 Valley Gas Company (MVG MVG Met Vriendelijke Groeten (Dutch: Best Regards) MVG Mainzer Verkehrsgesellschaft mbH (public transportation, Mainz, Germany) MVG Münchener Verkehrsgesellschaft ), compared with one month's results in the prior-year quarter. Also contributing to gross profit were strong results in the nonutility natural gas marketing segment. These positive factors were partially offset by a decrease in utility throughput attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to weather that was 12 percent warmer than the prior-year quarter and 5 percent warmer than normal as adjusted for jurisdictions with weather-normalized operations. Atmos Energy's net income from nonutility operations, which operate under Atmos Energy Holdings, Inc., was $8.4 million for the three months ended December 31, 2003, compared with net income of $4.7 million for the three months ended December 31, 2002. Nonutility operations contributed 29 percent of consolidated net income for the 2004 first quarter, compared with 18 percent for the prior-year quarter. Consolidated natural gas marketing sales volumes were 58.9 Bcf for the three months ended December 31, 2003, compared with 59.3 Bcf for the three months ended December 31, 2002. Nonutility net income was higher in the first quarter of fiscal 2004 primarily due to improved margins and an increase in mark to market gains primarily attributable to the net change in the value of physical storage and corresponding financial hedges. Operation and maintenance expense for the three months ended December 31, 2003, was $56.9 million, compared with $50.5 million for the three months ended December 31, 2002. Excluding the provision for doubtful accounts and a $6.1 million increase attributable to the acquired MVG assets, operation and maintenance expense for first quarter of fiscal 2004 was slightly lower than operations and maintenance expense for the same period last year. The provision for doubtful accounts was $3.2 million for the three months ended December 31, 2003, compared with $2.9 million for the three months ended December 31, 2002. In the utility segment, the average cost of natural gas for the first quarter of fiscal 2004 was $6.35 per thousand cubic feet (Mcf), compared with $5.03 per Mcf for the first quarter of fiscal 2003. Taxes, other than income taxes, for the three months ended December 31, 2003, were $15.1 million, compared with $12.8 million for the three months ended December 31, 2002. The increase primarily was attributable to additional franchise, payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. and property taxes associated with the acquired MVG assets and to higher franchise taxes due to higher revenues. Increases in franchise taxes have no effect on net income because these amounts are revenue-based and are recovered through customer billings. Miscellaneous income for the three months ended December 31, 2003, was $1.2 million, compared with miscellaneous income of $4.1 million for the three months ended December 31, 2002. The $2.9 million decrease primarily reflects the absence in the current-year quarter of a $3.9 million gain recognized in the prior-year quarter associated with a sales-type lease Sales-type lease The leasing out of a firm's own equipment, such as a printing company leasing its own presses, thereby competing with an independent leasing company. of a distributed electric generation plant and a decrease in year-over-year earnings of $0.5 million from an indirect equity interest in Heritage Propane Partners, L.P. These amounts were partially offset by the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. effect of the absence of $1.9 million in weather insurance amortization expense in the fiscal 2004 first quarter, resulting from the termination of a weather insurance policy in the third quarter of fiscal 2003. Interest charges increased $1.9 million during the three months ended December 31, 2003, compared with the three months ended December 31, 2002. The increase was primarily due to interest expense associated with Atmos Energy's $250.0 million debt offering in January January: see month. 2003 used to partially finance its MVG acquisition. For the three months ended December 31, 2003, operating activities provided cash of $11.5 million, compared with a use of cash of $13.4 million for the three months ended December 31, 2002. The year-over-year increase was primarily due to favorable changes in various working capital accounts. Highlights and Recent Developments Atmos Energy completes sale of indirect equity interest in Heritage Propane On January 20, 2004, Atmos Energy and three other utility partners completed the announced sale of their interests in the general partnership and limited partnerships in Heritage Propane Partners, L.P., for $130.0 million. Atmos Energy received approximately $24.7 million for its portion and recorded a $4.4 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern book gain in the second quarter of fiscal 2004. Conference call to be webcast February February: see month. 11 Atmos Energy Corporation will host a webcast conference call on February 11 at 7 a.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. to discuss financial results for the first quarter of fiscal 2004. Atmos Energy officers who will participate in the conference call will be: Bob Best, chairman, president and chief executive officer; Pat Reddy, senior vice president and chief financial officer; Earl Fischer Fi·scher , Hans 1881-1945. 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; Louis Louis, titular duke of Burgundy Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. Gregory, senior vice president and general counsel; Fred (Friendly Rollabout Engineered for Doctors) A mobile medical conferencing unit. See videoconferencing. 1. FRED - Robert Carr. Language used by Framework, Ashton-Tate. 2. Meisenheimer, vice president and controller; Laurie Laurie long in love with Jo March, he begs her to marry him and is rejected. [Am. Lit.: Louisa May Alcott Little Women] See : Love, Spurned Sherwood, vice president, corporate development, and treasurer and Susan SUSAN Smallest Univalue Segment Assimilating Nucleus SUSAN Sub Saharan African Network SUSAN Smart Ultrasonic System for Aircraft NDE Kappes, vice president, investor relations Investor relations The process by which the corporation communicates with its investors. and corporate communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. . To listen to the call, dial 1-800-219-6110. Slides for the webcast may be viewed on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.atmosenergy.com. 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 or incorporated by reference in this news release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 or 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," "expect," "estimate," "plans," "believe," "objective," "forecast," "goal" 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 expressed or implied in the statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's earnings-per-share projections, operations, markets, services, rates, recovery of costs, availability of gas supply and other factors. A discussion of these risks and uncertainties may be found 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 September: see month. 30, 2003. Although the Company believes these forward-looking statements to be reasonable, there can be no assurance that they will approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. actual experience or that the expectations derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from them will be realized. Atmos Energy undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise. Atmos Energy Corporation, headquartered in 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. , is one of the largest natural gas distributors in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , serving about 1.7 million utility customers. Atmos Energy's utility operations serve more than 1,000 small and medium-size Adj. 1. medium-size - intermediate in size medium-sized, moderate-size, moderate-sized sized - having a specified size 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 18 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, manage company-owned natural gas storage and pipeline assets and construct small distributed generating plants for industrial and municipal customers. For more information, visit www.atmosenergy.com.
Atmos Energy Corporation
Financial Highlights (Unaudited)
Three Months Ended
Statements of Income December 31
----------------------
(000s except per share) 2003 2002
--------- ---------
Operating revenues:
Utility segment $460,488 $399,968
Natural gas marketing segment 373,829 343,498
Other non-utility segment 3,628 2,900
Intersegment eliminations (74,329) (65,934)
--------- ---------
763,616 680,432
Purchased gas cost:
Utility segment 322,064 270,495
Natural gas marketing segment 356,331 339,508
Other non-utility segment 327 (1,126)
Intersegment eliminations (74,159) (65,611)
--------- ---------
604,563 543,266
--------- ---------
Gross profit 159,053 137,166
Operation and maintenance expense 56,916 50,504
Depreciation and amortization 23,473 21,194
Taxes, other than income 15,123 12,844
--------- ---------
Total operating expenses 95,512 84,542
Operating income 63,541 52,624
Miscellaneous income 1,207 4,124
Interest charges 17,335 15,479
--------- ---------
Income before income taxes 47,413 41,269
Income tax expense 17,872 15,476
--------- ---------
Net income $29,541 $25,793
========= =========
Basic net income per share $.57 $.60
Diluted net income per share $.57 $.60
Cash dividends per share $.305 $.300
Weighted average shares outstanding:
Basic 51,483 42,796
Diluted 51,861 42,919
Three Months Ended
December 31
Summary Net Income by Segment (000s) 2003 2002
----------------------------------- --------- ---------
Utility $21,111 $21,059
Natural gas marketing 7,536 768
Other nonutility 894 3,966
--------- ---------
Consolidated net income $29,541 $25,793
========= =========
Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
Condensed Balance Sheets December 31, September 30,
-------------------------
(000s) 2003 2003
------------- -------------
Net property, plant and equipment $1,538,224 $1,515,989
Cash and cash equivalents 41,710 15,683
Cash held on deposit in margin account 1,934 17,903
Accounts receivable, net 407,045 216,783
Gas stored underground 192,568 168,765
Other current assets 88,673 38,863
------------- -------------
Total current assets 731,930 457,997
Goodwill and intangible assets 274,840 273,499
Deferred charges and other assets 267,952 271,023
------------- -------------
$2,812,946 $2,518,508
============= =============
Shareholders' equity $879,352 $857,517
Long-term debt 860,705 863,918
------------- -------------
Total capitalization 1,740,057 1,721,435
Accounts payable and accrued liabilities 372,430 179,852
Other current liabilities 120,743 127,923
Short-term debt 191,795 118,595
Current maturities of long-term debt 7,195 9,345
------------- -------------
Total current liabilities 692,163 435,715
Deferred income taxes 243,079 223,350
Deferred credits and other liabilities 137,647 138,008
------------- -------------
$2,812,946 $2,518,508
============= =============
Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
Three Months Ended
Condensed Statements of Cash Flows December 31
-----------------------------------
(000s) 2003 2002
------------ ----------
Net income $29,541 $25,793
Cash flows from operating activities
Depreciation and amortization 24,145 21,735
Deferred income taxes 19,347 10,544
Changes in assets and liabilities (61,054) (66,928)
Other (476) (4,558)
------------ ----------
Net cash provided (used) by operating
activities 11,503 (13,414)
Cash flows from investing activities
Capital expenditures (45,471) (35,265)
Acquisitions -- (74,650)
Other 489 673
------------ ----------
Net cash used in investing activities (44,982) (109,242)
Cash flows from financing activities
Net increase in short-term debt 73,200 59,617
Proceeds from bridge loan -- 147,000
Repayment of long-term debt (5,363) (14,954)
Repayment of Mississippi Valley Gas debt -- (70,938)
Cash dividends paid (15,744) (12,542)
Issuance of common stock 7,413 5,720
------------ ----------
Net cash provided by financing activities 59,506 113,903
------------ ----------
Net increase (decrease) in cash and cash
equivalents 26,027 (8,753)
Cash and cash equivalents at beginning of year 15,683 47,991
------------ ----------
Cash and cash equivalents at end of year $41,710 $39,238
============ ==========
Three Months Ended
December 31
Statistics 2003 2002
---------- ------------ ----------
Heating degree days (a) 1,240 1,407
Percent of normal (a) 95% 105%
Consolidated utility gas throughput (MMcf as
metered) 68,179 70,929
Consolidated natural gas marketing sales
volumes (MMcf) 58,917 59,326
Natural gas meters in service 1,683,387 1,659,278
Utility average cost of gas $6.35 $5.03
(a) Adjusted for weather-normalized operations. For periods beginning
October 1, 2002, the normal heating degree day calculation
utilized updated 30-year normal weather data.
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