ATMOS ENERGY CORP - 10-Q Quarterly Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended June 30, 2004

or

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from to

Commission File Number 1-10042

Atmos Energy Corporation

(Exact name of registrant as specified in its charter)


Texas and Virginia		75-1743247
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Three Lincoln Centre, Suite 1800 5430 LBJ Freeway, Dallas, Texas (Address of principal executive offices)		75240 (Zip code)

(Registrant’s telephone number, including area code)

(972) 934-9227

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes þ No o

Number of shares outstanding of each of the issuer’s classes of common stock, as of August 2, 2004.


Class		Shares Outstanding

No Par Value		62,601,735

TABLE OF CONTENTS


PART 1. FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 6. Exhibits and Reports on Form 8-K
EXHIBITS INDEX Item 6(a)
Revolving Credit Agreement
Computation of Earnings to Fixed Charges
Report from Auditors
Rule 13a-14(a)/15d-14(a) Certifications
Section 1350 Certifications

PART 1. FINANCIAL INFORMATION


Item 1.	*Financial Statements*

ATMOS ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS


			June 30,			September 30,
			2004			2003

			(Unaudited)

			(In thousands)
ASSETS
Property, plant and equipment			$	2,588,059		$	2,480,139
	Less accumulated depreciation and amortization			903,313			855,745

		Net property, plant and equipment		1,684,746			1,624,394
Current assets
	Cash and cash equivalents			126,895			15,683
	Cash held on deposit in margin account			—			17,903
	Accounts receivable, net			243,719			216,783
	Gas stored underground			90,141			168,765
	Other current assets			18,710			38,863

		Total current assets		479,465			457,997
Goodwill and intangible assets				275,844			273,499
Deferred charges and other assets				240,477			271,023

			$	2,680,532		$	2,626,913

CAPITALIZATION AND LIABILITIES
Shareholders’ equity
	Common stock, no par value (stated at $.005 per share); 100,000,000 shares authorized; issued and outstanding:
		June 30, 2004 — 52,579,303 shares;
		September 30, 2003 — 51,475,785 shares	$	263		$	257
	Additional paid-in capital			762,464			736,180
	Retained earnings			167,535			122,539
	Accumulated other comprehensive loss			(3,416	)		(1,459	)

		Shareholders’ equity		926,846			857,517
Long-term debt				863,266			863,918

		Total capitalization		1,790,112			1,721,435
Current liabilities
	Accounts payable and accrued liabilities			201,123			179,852
	Other current liabilities			210,759			133,957
	Short-term debt			—			118,595
	Current maturities of long-term debt			5,918			9,345

		Total current liabilities		417,800			441,749
Deferred income taxes				227,899			223,350
Regulatory cost of removal obligation				105,059			102,371
Deferred credits and other liabilities				139,662			138,008

			$	2,680,532		$	2,626,913

See accompanying notes to condensed consolidated financial statements

ATMOS ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME



			Three Months Ended
			June 30

			2004			2003


			(Unaudited)

			(In thousands, except
			per share data)
Operating revenues
	Utility segment		$	256,252		$	245,998
	Natural gas marketing segment			364,339			374,832
	Other nonutility segment			6,210			3,685
	Intersegment eliminations			(80,743	)		(136,045	)

				546,058			488,470
Purchased gas cost
	Utility segment			163,093			161,426
	Natural gas marketing segment			352,708			367,395
	Other nonutility segment			3,150			467
	Intersegment eliminations			(80,385	)		(135,882	)

				438,566			393,406

Gross profit				107,492			95,064
Operating expenses
	Operation and maintenance			50,467			45,141
	Depreciation and amortization			23,268			23,192
	Taxes, other than income			12,297			12,675

		Total operating expenses		86,032			81,008

Operating income				21,460			14,056
Miscellaneous income				2,187			686
Interest charges				16,011			16,042

Income (loss) before income taxes				7,636			(1,300	)
Income tax expense (benefit)				2,871			(1,099	)

		Net income (loss)	$	4,765		$	(201	)

Per share data
	Basic income (loss) per share		$	0.09		$	(0.00	)

	Diluted income (loss) per share		$	0.09		$	(0.00	)

Cash dividends per share			$	.305		$	.300

Weighted average shares outstanding:
	Basic			52,220			45,997

	Diluted			52,617			45,997

See accompanying notes to condensed consolidated financial statements

ATMOS ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME



				Nine Months Ended
				June 30

				2004			2003


				(Unaudited)

				(In thousands, except
				per share data)
Operating revenues
	Utility segment			$	1,425,022		$	1,342,527
	Natural gas marketing segment				1,255,386			1,338,732
	Other nonutility segment				20,492			16,242
	Intersegment eliminations				(273,741	)		(334,457	)

					2,427,159			2,363,044
Purchased gas cost
	Utility segment				1,003,977			934,649
	Natural gas marketing segment				1,214,395			1,325,655
	Other nonutility segment				9,158			1,475
	Intersegment eliminations				(273,042	)		(333,933	)

					1,954,488			1,927,846

Gross profit					472,671			435,198
Operating expenses
	Operation and maintenance				166,476			151,310
	Depreciation and amortization				69,879			65,273
	Taxes, other than income				45,901			44,057

			Total operating expenses		282,256			260,640

Operating income					190,415			174,558
Miscellaneous income					7,850			3,321
Interest charges					49,506			47,679

Income before income taxes and cumulative effect of accounting change					148,759			130,200
Income tax expense					56,148			48,303

Income before cumulative effect of accounting change					92,611			81,897
Cumulative effect of accounting change, net of income tax benefit					—			(7,773	)

			Net income	$	92,611		$	74,124

Per share data
	Basic income per share:
		Income before cumulative effect of accounting change		$	1.79		$	1.83
		Cumulative effect of accounting change, net of income tax benefit			—			(.17	)

		Net income		$	1.79		$	1.66

	Diluted income per share:
		Income before cumulative effect of accounting change		$	1.78		$	1.82
		Cumulative effect of accounting change, net of income tax benefit			—			(.17	)

		Net income		$	1.78		$	1.65

Cash dividends per share				$	.915		$	.900

Weighted average shares outstanding:
	Basic				51,788			44,679

	Diluted				52,166			44,879

See accompanying notes to condensed consolidated financial statements

ATMOS ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



				Nine Months Ended
				June 30

				2004			2003


				(Unaudited)
				(In thousands)
Cash Flows from Operating Activities
	Net income			$	92,611		$	74,124
	Adjustments to reconcile net income to net cash provided by operating activities:
		Cumulative effect of accounting change, net of income tax benefit			—			7,773
		Gain on sales of assets			(6,700	)		—
		Depreciation and amortization:
			Charged to depreciation and amortization		69,879			65,273
			Charged to other accounts		1,270			1,676
		Deferred income taxes			5,750			9,148
		Other			(1,405	)		(5,403	)
		Net assets/ liabilities from risk management activities			4,469			(4,200	)
		Net change in operating assets and liabilities			193,388			(31,099	)

			Net cash provided by operating activities		359,262			117,292
Cash Flows from Investing Activities
	Capital expenditures				(129,508	)		(113,637	)
	Proceeds from sales of assets				27,919			—
	Retirements of property, plant and equipment, net				(505	)		315
	Acquisitions				(1,957	)		(74,650	)

			Net cash used in investing activities		(104,051	)		(187,972	)
Cash Flows from Financing Activities
	Net decrease in short-term debt				(118,595	)		(145,091	)
	Cash dividends paid				(47,615	)		(39,893	)
	Repayment of long-term debt				(9,079	)		(72,333	)
	Net proceeds from issuance of long-term debt				5,000			253,267
	Issuance of common stock				26,290			19,336
	Repayment of Mississippi Valley Gas debt				—			(70,938	)
	Proceeds from bridge loan				—			147,000
	Repayment of bridge loan				—			(147,000	)
	Net proceeds from equity offering				—			96,826

			Net cash provided (used) by financing activities		(143,999	)		41,174

Net increase (decrease) in cash and cash equivalents					111,212			(29,506	)
Cash and cash equivalents at beginning of period					15,683			46,827

Cash and cash equivalents at end of period				$	126,895		$	17,321

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