Attached files
| file | filename |
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| 8-K - FORM 8-K - SOUTHERN Co GAS | form8_k.htm |
First Quarter 2011 Earnings Presentation
May 3, 2011
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2
Forward-Looking Statements &
Supplemental Information
Supplemental Information
Forward-Looking Statements
Certain expectations and projections regarding our future performance referenced in this presentation, in other reports or statements we file with the SEC or otherwise release to the public, and
on our website, are forward-looking statements. Senior officers and other employees may also make verbal statements to analysts, investors, regulators, the media and others that are forward-
looking. Forward-looking statements involve matters that are not historical facts, such as statements regarding our future operations, prospects, strategies, financial condition, economic
performance (including growth and earnings), industry conditions and demand for our products and services. Because these statements involve anticipated events or conditions, forward-looking
statements often include words such as "anticipate," "assume," "believe," "can," "could," "estimate," "expect," "forecast," "future," "goal," "indicate," "intend," "may," "outlook," "plan," "potential,"
"predict," "project," "seek," "should," "target," "would," or similar expressions. Forward-looking statements contained in this presentation include, without limitation, statements regarding future
earnings per share, dividend growth and EBIT contribution, our priorities for 2011 and the proposed merger with Nicor Inc. Our expectations are not guarantees and are based on currently
available competitive, financial and economic data along with our operating plans. While we believe our expectations are reasonable in view of the currently available information, our
expectations are subject to future events, risks and uncertainties, and there are several factors - many beyond our control - that could cause results to differ significantly from our expectations.
on our website, are forward-looking statements. Senior officers and other employees may also make verbal statements to analysts, investors, regulators, the media and others that are forward-
looking. Forward-looking statements involve matters that are not historical facts, such as statements regarding our future operations, prospects, strategies, financial condition, economic
performance (including growth and earnings), industry conditions and demand for our products and services. Because these statements involve anticipated events or conditions, forward-looking
statements often include words such as "anticipate," "assume," "believe," "can," "could," "estimate," "expect," "forecast," "future," "goal," "indicate," "intend," "may," "outlook," "plan," "potential,"
"predict," "project," "seek," "should," "target," "would," or similar expressions. Forward-looking statements contained in this presentation include, without limitation, statements regarding future
earnings per share, dividend growth and EBIT contribution, our priorities for 2011 and the proposed merger with Nicor Inc. Our expectations are not guarantees and are based on currently
available competitive, financial and economic data along with our operating plans. While we believe our expectations are reasonable in view of the currently available information, our
expectations are subject to future events, risks and uncertainties, and there are several factors - many beyond our control - that could cause results to differ significantly from our expectations.
Such events, risks and uncertainties include, but are not limited to, changes in price, supply and demand for natural gas and related products; the impact of changes in state and federal
legislation and regulation including changes related to climate change; actions taken by government agencies on rates and other matters; concentration of credit risk; utility and energy industry
consolidation; the impact on cost and timeliness of construction projects by government and other approvals, development project delays, adequacy of supply of diversified vendors, unexpected
change in project costs, including the cost of funds to finance these projects; the impact of acquisitions and divestitures; direct or indirect effects on our business, financial condition or liquidity
resulting from a change in our credit ratings or the credit ratings of our counterparties or competitors; interest rate fluctuations; financial market conditions, including recent disruptions in the
capital markets and lending environment and the current economic downturn; general economic conditions; uncertainties about environmental issues and the related impact of such issues; the
impact of changes in weather, including climate change, on the temperature-sensitive portions of our business; the impact of natural disasters such as hurricanes on the supply and price of
natural gas; acts of war or terrorism; and other factors which are provided in detail in our filings with the Securities and Exchange Commission. Forward-looking statements are only as of the
date they are made, and we do not undertake to update these statements to reflect subsequent changes.
legislation and regulation including changes related to climate change; actions taken by government agencies on rates and other matters; concentration of credit risk; utility and energy industry
consolidation; the impact on cost and timeliness of construction projects by government and other approvals, development project delays, adequacy of supply of diversified vendors, unexpected
change in project costs, including the cost of funds to finance these projects; the impact of acquisitions and divestitures; direct or indirect effects on our business, financial condition or liquidity
resulting from a change in our credit ratings or the credit ratings of our counterparties or competitors; interest rate fluctuations; financial market conditions, including recent disruptions in the
capital markets and lending environment and the current economic downturn; general economic conditions; uncertainties about environmental issues and the related impact of such issues; the
impact of changes in weather, including climate change, on the temperature-sensitive portions of our business; the impact of natural disasters such as hurricanes on the supply and price of
natural gas; acts of war or terrorism; and other factors which are provided in detail in our filings with the Securities and Exchange Commission. Forward-looking statements are only as of the
date they are made, and we do not undertake to update these statements to reflect subsequent changes.
Supplemental Information
Company management evaluates segment financial performance based on earnings before interest and taxes (EBIT), which includes the effects of corporate expense allocations and on
operating margin. EBIT is a non-GAAP (accounting principles generally accepted in the United States of America) financial measure that includes operating income, other income and
expenses. Items that are not included in EBIT are financing costs, including debt and interest expense and income taxes. The company evaluates each of these items on a consolidated level
and believes EBIT is a useful measurement of our performance because it provides information that can be used to evaluate the effectiveness of our businesses from an operational
perspective, exclusive of the costs to finance those activities and exclusive of income taxes, neither of which is directly relevant to the efficiency of those operations. Operating margin is a non-
GAAP measure calculated as operating revenues minus cost of gas, excluding operation and maintenance expense, depreciation and amortization, and taxes other than income taxes. These
items are included in the company's calculation of operating income. The company believes operating margin is a better indicator than operating revenues of the contribution resulting from
customer growth, since cost of gas is generally passed directly through to customers. In addition, in this presentation, the company has presented its earnings per share excluding expenses
incurred with respect to the proposed Nicor merger. As the company does not routinely engage in transactions of the magnitude of the proposed Nicor merger, and consequently does not
regularly incur transaction related expenses with correlative size, the company believes presenting EPS excluding Nicor merger expenses provides investors with an additional measure of the
company’s core operating performance. EBIT, operating margin and EPS excluding merger expenses should not be considered as alternatives to, or more meaningful indicators of, the
company's operating performance than operating income, net income attributable to AGL Resources Inc. or EPS as determined in accordance with GAAP. In addition, the company's EBIT,
operating margin and non-GAAP EPS may not be comparable to similarly titled measures of another company. We also present certain non-GAAP financial measures excluding the effects of
our proposed merger with Nicor. Because we complete material mergers and acquisitions only occasionally, we believe excluding these effects from certain measures is useful because they
allow investors to more easily evaluate and compare the performance of the Company's core businesses from period to period. Reconciliations of non-GAAP financial measures referenced in
this presentation are available on the company’s Web site at www.aglresources.com
operating margin. EBIT is a non-GAAP (accounting principles generally accepted in the United States of America) financial measure that includes operating income, other income and
expenses. Items that are not included in EBIT are financing costs, including debt and interest expense and income taxes. The company evaluates each of these items on a consolidated level
and believes EBIT is a useful measurement of our performance because it provides information that can be used to evaluate the effectiveness of our businesses from an operational
perspective, exclusive of the costs to finance those activities and exclusive of income taxes, neither of which is directly relevant to the efficiency of those operations. Operating margin is a non-
GAAP measure calculated as operating revenues minus cost of gas, excluding operation and maintenance expense, depreciation and amortization, and taxes other than income taxes. These
items are included in the company's calculation of operating income. The company believes operating margin is a better indicator than operating revenues of the contribution resulting from
customer growth, since cost of gas is generally passed directly through to customers. In addition, in this presentation, the company has presented its earnings per share excluding expenses
incurred with respect to the proposed Nicor merger. As the company does not routinely engage in transactions of the magnitude of the proposed Nicor merger, and consequently does not
regularly incur transaction related expenses with correlative size, the company believes presenting EPS excluding Nicor merger expenses provides investors with an additional measure of the
company’s core operating performance. EBIT, operating margin and EPS excluding merger expenses should not be considered as alternatives to, or more meaningful indicators of, the
company's operating performance than operating income, net income attributable to AGL Resources Inc. or EPS as determined in accordance with GAAP. In addition, the company's EBIT,
operating margin and non-GAAP EPS may not be comparable to similarly titled measures of another company. We also present certain non-GAAP financial measures excluding the effects of
our proposed merger with Nicor. Because we complete material mergers and acquisitions only occasionally, we believe excluding these effects from certain measures is useful because they
allow investors to more easily evaluate and compare the performance of the Company's core businesses from period to period. Reconciliations of non-GAAP financial measures referenced in
this presentation are available on the company’s Web site at www.aglresources.com
®
1Q11 Highlights
• 1Q11 GAAP EPS of $1.59 per diluted
share
share
• Adjusted diluted EPS of $1.63, excluding
approximately $3 million in after-tax costs related
to Nicor merger
approximately $3 million in after-tax costs related
to Nicor merger
• Distribution segment EBIT up 4% in 1Q11 vs.
1Q10
1Q10
• Continued strong wholesale commercial activity
• 2011 EPS estimate remains $3.10-$3.20
per diluted share, excluding all effects
from the proposed merger with Nicor
per diluted share, excluding all effects
from the proposed merger with Nicor
• Solid balance sheet, including issuance of
$500 million of senior notes in March 2011
$500 million of senior notes in March 2011
• Nicor merger process on track
• Received early termination of the Hart-Scott-
Rodino Antitrust Improvements Act waiting period
as requested
Rodino Antitrust Improvements Act waiting period
as requested
• S-4 registration statement declared effective by
SEC; special shareholder meeting in June
SEC; special shareholder meeting in June
• Illinois Commerce Commission process ongoing
• Expect closing in second half of 2011
3
Note: Please review the AGL Resources 10-Q as filed with the SEC on 5/3/11 for detailed information. EBIT, Adjusted Net Income and Adjusted EPS are non-
GAAP measures. Please see the appendix to this presentation or visit the investor relations section of www.aglresources.com for a reconciliation to GAAP.
GAAP measures. Please see the appendix to this presentation or visit the investor relations section of www.aglresources.com for a reconciliation to GAAP.
(1) Adjusted net income and adjusted EPS exclude Nicor-related merger costs of approximately $3 million, net of tax.
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Consistent EPS and Dividend Growth
Diluted EPS Growth
Dividend Growth
2011 EPS Guidance:
$3.10-$3.20 per diluted share
Dividend increase of $0.04 approved by
Board of Directors for 2011
Board of Directors for 2011
(1)$3.00 diluted GAAP EPS; $3.05 adjusted, excluding Nicor merger costs. Please see the appendix to this presentation or visit the investor relations section of
www.aglresources.com for a reconciliation to GAAP.
www.aglresources.com for a reconciliation to GAAP.
(2) Estimate excludes all effects from the proposed merger with Nicor.
$3.10-
$3.20
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EBIT by Operating Segment
1%
69%
10%
20%
Annual EBIT by Operating Segment
1Q11 EBIT Contribution
NOTE: EBIT is a non-GAAP measure. Please see the appendix to this presentation or the investor relations section of www.aglresources.com for a reconciliation to GAAP.
(1) AGL Resources sold AGL Networks in July 2010.
Quarterly EBIT by Operating Segment
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• 1Q11 EBIT increased 4%; key drivers
include:
include:
• New rates and regulatory infrastructure
programs at Atlanta Gas Light and
Elizabethtown Gas added $12 million
programs at Atlanta Gas Light and
Elizabethtown Gas added $12 million
• Effective O&M expense management; costs
up just 4%, including expected higher
compensation and pension expenses, offset
by lower bad debt expenses
up just 4%, including expected higher
compensation and pension expenses, offset
by lower bad debt expenses
• Customer count stable
• 2.298 million customers in 1Q11 (avg.) vs.
2.293 million in 1Q10 (avg.)
2.293 million in 1Q10 (avg.)
• Virginia Natural Gas rate case filed
2/8/11; rates effective 8/1/11, subject
to refund
2/8/11; rates effective 8/1/11, subject
to refund
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6
Distribution
NOTE: COG = Cost of Gas
1Q11 Financial Performance Summary
AGL Resources Quarter End Customer Count
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7
Retail
• 1Q11 EBIT down 8%; key drivers include:
• Decreased customer usage due to warmer
weather in 1Q11 vs. 1Q10
weather in 1Q11 vs. 1Q10
• Migration of additional customers to lower-margin
fixed price plans
fixed price plans
• Slightly lower operating expenses
• Market share and customer count:
• Georgia market share is 32% at end of 1Q11
• Georgia customer count 498K in 1Q11 vs. 507K in
1Q10
1Q10
• Continue to explore opportunities to
expand service offerings and customer
base across multiple states
expand service offerings and customer
base across multiple states
1Q11 Financial Performance Summary
1Q11 Customer Count and Volumes
(1) A portion of the Ohio customers represents customer equivalents, which are computed by the actual delivered volumes divided by the expected average customer
usage.
usage.
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Wholesale
• 1Q11 EBIT down 23% due to strong weather-
driven mark-to-market (MTM) gains in 1Q10
driven mark-to-market (MTM) gains in 1Q10
• $21 million difference in MTM gains on hedges:
• $22 million in 1Q10
• $1 million in 1Q11
• Commercial activity of $49 million in 1Q11, up 20% yty
• Effective expense management
• Sequent storage rollout schedule for 2011
remains strong with $11 million in economic
value locked-in at 3/31/11
remains strong with $11 million in economic
value locked-in at 3/31/11
• Compares to $6 million locked-in at 3/31/10
• Results and timing can change based on market
conditions, including changes in forward Nymex natural
gas prices
conditions, including changes in forward Nymex natural
gas prices
• Increasing focus on fixed-fee services
• Building sources of operating margin less impacted by
volatility in the marketplace
volatility in the marketplace
• Expanding market presence in western U.S.
Wholesale Operating Margin Components
1Q11 Financial Performance Summary
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2Q10
9
9
Energy Investments
• 1Q11 EBIT of $1 million
• EBIT primarily impacted by sale of AGL Networks;
AGL Networks EBIT contribution in 1Q10 of $3
million
AGL Networks EBIT contribution in 1Q10 of $3
million
• Golden Triangle Storage Cavern 1 (6 Bcf)
• Cavern 1 (6 Bcf)
- Serving 2 Bcf contract since September 2010
- Remaining capacity to be optimized by Pivotal using
various transaction strategies
various transaction strategies
• Cavern 2 (6 Bcf)
- Completion expected in 2012
• Storage values remain depressed due to high
supply of natural gas and reduced demand
supply of natural gas and reduced demand
• Jefferson Island Storage and Hub
• Expansion permit application remains under review
by Louisiana Department of Natural Resources
by Louisiana Department of Natural Resources
• If approved, facility could expand from 7.5 Bcf to
19.5 Bcf
19.5 Bcf
1Q11 Financial Performance Summary
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Working Gas in Underground Storage (EIA)
Balance Sheet Highlights
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• Solid balance sheet with significant
opportunity to fund growth capital
requirements
opportunity to fund growth capital
requirements
• $500 million in senior notes issued March 2011
- $300 million used to pay January 2011 maturity;
remaining $200 million to be used to finance a portion
of the Nicor merger or for other general corporate
purposes
remaining $200 million to be used to finance a portion
of the Nicor merger or for other general corporate
purposes
• $852 million bridge facility currently in place to finance
remaining cash portion of the Nicor merger
remaining cash portion of the Nicor merger
• Good access to capital markets
• Company credit metrics support solid, investment-
grade ratings
grade ratings
• $2.2 billion debt outstanding
• Long-term debt $2.17 billion
• Short-term debt of $26 million
• Debt to Cap Ratio: 54%
• 2011 cap ex estimated at $435 million
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Nicor Merger Update
• Regulatory approval process underway, continue to anticipate closing in 2H11
• Received early termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting
period as requested and S-4 registration statement declared effective by SEC
period as requested and S-4 registration statement declared effective by SEC
• Staff and intervener testimony filed 4/28/11 with Illinois Commerce Commission; Company
rebuttal due 5/26/11; hearings anticipated in July
rebuttal due 5/26/11; hearings anticipated in July
• Special shareholder meetings for both AGL Resources and Nicor scheduled for 6/14/11
• Transition committee established and active
Dec 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Transaction
Announced
Joint ICC Approval
Request Filed 1/18/11
Secure Regulatory Approvals
AGL Resources and
Nicor Shareholder
Meetings 6/14/11
Develop Transition Implementation Plans
Close Transaction
Long
-
Term Financing for Cash
Consideration
Initial S-4 Registration
Statement Filed 2/4/11
Hart-Scott-Rodino
Approval Received
Approval Received
ICC Hearings to begin
in July
in July
SEC S-4 Registration
Declared Effective
Declared Effective
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VNG Rate Case Update
• Virginia Natural Gas filed a rate case with the Virginia State Corporation
Commission (VSCC) on March 8, 2011
Commission (VSCC) on March 8, 2011
• Seeking $25 million increase
• Mitigation plan proposes rates to be phased in over three years
• ~$15 million related to Hampton Roads Crossing pipeline construction (completed in 2010),
which has been recovered via AFUDC to date
which has been recovered via AFUDC to date
• ~$10 million related to base operating expenses
• Rates effective August 1, 2011, subject to refund
• Final Commission order expected May 2012
Rate Case Filed
3/8/11
Hearings
10/25/11
Hearing Examiner’s
Report
Report
March 2012
Final
Commission Order
May 2012
Rates Effective Subject
to Refund 8/1/11
to Refund 8/1/11
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2011 Priorities
• Close Nicor transaction in second half of 2011
• Develop and implement integration plan
• Continue safe and efficient operations at our distribution businesses
• Complete rate case at Virginia Natural Gas
• Seeking $25 million increase; mitigation plan proposes rates to be phased in over three years
• VNG customers have not seen an increase in their approved base rates since 1996
• Continue to pursue responsible growth opportunities in retail and wholesale
businesses
businesses
M&A
Distribution
Retail &
Wholesale
Wholesale
Energy
Investments
Investments
Policy
Expense &
Balance Sheet
Discipline
Balance Sheet
Discipline
• Increase contracted capacity at Golden Triangle Storage
• Effectively control expenses and focus on capital discipline in each of our
business segments
business segments
• Maintain strong balance sheet and liquidity profile
• Continue to actively manage issues related to energy and environmental
policy and regulation
policy and regulation
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Additional Resources
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Company resources
• www.aglresources.com
• Sarah Stashak
Director, Investor Relations
404-584-4577
sstashak@aglresources.com
Industry resources
• www.aga.org
• www.eia.doe.gov
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Appendix & GAAP Reconciliations
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Detailed Utility Profile as of 12/31/10
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|
State
|
Rate
Base (mm)
|
% of
Total |
Authorized
Return on Rate Base |
Est. 2010
Return on Rate Base |
Authorized
Return on Equity |
Est. 2010
Return on Equity |
Customers
(mm) |
% of
Total |
Regulatory Attributes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Georgia
|
$1,312
|
52%
|
8.10%
|
7.26%
|
10.75%
|
9.10%
|
1.5
|
68%
|
Decoupling, Regulatory
Infrastructure Program Rates, M&A Synergy Sharing |
|
New Jersey
|
435
|
17%
|
7.64%
|
7.87%
|
10.30%
|
10.76%
|
0.3
|
12%
|
Weather Normalization,
Regulatory Infrastructure Program Rates |
|
Virginia
|
502
|
20%
|
9.24%
|
8.24%
|
10.90%
|
9.62%
|
0.3
|
12%
|
Decoupling, Weather
Normalization |
|
Florida
|
164
|
7%
|
7.36%
|
5.04%
|
11.25%
|
6.22%
|
0.1
|
5%
|
Negotiated Rates Over
5-yr Period |
|
Tennessee
|
91
|
4%
|
7.41%
|
8.98%
|
10.05%
|
13.45%
|
0.1
|
3%
|
Revenue Normalization
|
|
Total
|
$ 2,504
|
100%
|
NA
|
NA
|
NA
|
NA
|
2.3
|
100%
|
|
Note: Please review the AGL Resources 10-K as filed with the SEC on 2/9/11 for detailed information.
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The following table sets forth a reconciliation of AGL Resources’ operating margin to operating income and earnings before interest and taxes (EBIT) to
earnings before income taxes to net income to net income attributable to AGL - as reported and net income attributable to AGL - as adjusted, for the three
months ended March 31, 2011 and 2010.
earnings before income taxes to net income to net income attributable to AGL - as reported and net income attributable to AGL - as adjusted, for the three
months ended March 31, 2011 and 2010.
GAAP Reconciliation
®
GAAP Reconciliation
The following tables set forth a reconciliation of AGL Resources’ Statement of Income to earnings before interest and taxes (EBIT) by segment for the
quarters ended March 31, 2011 and 2010.
quarters ended March 31, 2011 and 2010.
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GAAP Reconciliation
The following tables set forth a reconciliation of AGL Resources’ Basic and Diluted earnings per share - as reported (GAAP) to Basic and Diluted earnings
per share - as adjusted (Non-GAAP; excluding Nicor merger costs), for the indicated periods.
per share - as adjusted (Non-GAAP; excluding Nicor merger costs), for the indicated periods.
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GAAP Reconciliation
Reconciliations of operating margin, EBIT by segment and EPS excluding merger expenses are available in our quarterly reports (Form 10-Q) and
annual reports (Form 10-K) filed with the Securities and Exchange Commission.
annual reports (Form 10-K) filed with the Securities and Exchange Commission.
Our management evaluates segment financial performance based on EBIT, which includes the effects of corporate expense allocations. EBIT is a non-
GAAP (accounting principles generally accepted in the United States of America) financial measure. Items that are not included in EBIT are financing
costs, including debt and interest expense and income taxes. We evaluate each of these items on a consolidated level and believe EBIT is a useful
measurement of our performance because it provides information that can be used to evaluate the effectiveness of our businesses from an operational
perspective, exclusive of the costs to finance those activities and exclusive of income taxes, neither of which is directly relevant to the efficiency of those
operations.
GAAP (accounting principles generally accepted in the United States of America) financial measure. Items that are not included in EBIT are financing
costs, including debt and interest expense and income taxes. We evaluate each of these items on a consolidated level and believe EBIT is a useful
measurement of our performance because it provides information that can be used to evaluate the effectiveness of our businesses from an operational
perspective, exclusive of the costs to finance those activities and exclusive of income taxes, neither of which is directly relevant to the efficiency of those
operations.
We also use EBIT internally to measure performance against budget and in reports for management and the Board of Directors. Projections of forward-
looking EBIT are used in our internal budgeting process, and those projections are used in providing forward-looking business segment EBIT projections
to investors. We are unable to reconcile our forward-looking EBIT business segment guidance to GAAP net income, because we do not predict the
future impact of unusual items and mark-to-market gains or losses on energy contracts. The impact of these items could be material to our operating
results reported in accordance with GAAP.
looking EBIT are used in our internal budgeting process, and those projections are used in providing forward-looking business segment EBIT projections
to investors. We are unable to reconcile our forward-looking EBIT business segment guidance to GAAP net income, because we do not predict the
future impact of unusual items and mark-to-market gains or losses on energy contracts. The impact of these items could be material to our operating
results reported in accordance with GAAP.
Operating margin is a non-GAAP measure calculated as revenues minus cost of gas, excluding operation and maintenance expense, depreciation and
amortization, taxes other than income taxes, and the gain or loss on the sale of our assets. These items are included in our calculation of operating
income. We believe operating margin is a better indicator than operating revenues of the contribution resulting from customer growth, since cost of gas is
generally passed directly through to customers.
amortization, taxes other than income taxes, and the gain or loss on the sale of our assets. These items are included in our calculation of operating
income. We believe operating margin is a better indicator than operating revenues of the contribution resulting from customer growth, since cost of gas is
generally passed directly through to customers.
We present our EPS excluding expenses incurred with respect to the proposed merger with Nicor. As we do not routinely engage in transactions of the
magnitude of the proposed Nicor merger, and consequently do not regularly incur transaction related expenses of correlative size, we believe presenting
EPS excluding Nicor merger expenses provides investors with an additional measure of our core operating performance.
magnitude of the proposed Nicor merger, and consequently do not regularly incur transaction related expenses of correlative size, we believe presenting
EPS excluding Nicor merger expenses provides investors with an additional measure of our core operating performance.
EBIT, operating margin and EPS excluding merger expenses should not be considered as alternatives to, or more meaningful indicators of, our
operating performance than operating income or net income, as determined in accordance with GAAP. In addition, our EBIT, operating margin and non-
GAAP EPS may not be comparable to similarly titled measures of another company.
operating performance than operating income or net income, as determined in accordance with GAAP. In addition, our EBIT, operating margin and non-
GAAP EPS may not be comparable to similarly titled measures of another company.
Net income attributable to AGL Resources, as adjusted and Basic and Diluted earnings per share, as adjusted are non-GAAP measures and exclude
transaction costs related to the proposed merger with Nicor. We believe these financial measures are useful to investors because they provide an
alternative method for assessing the Company’s operating results in a manner that is focused on the performance of the Company’s ongoing operations.
The presentation of these financial measures is not meant to be a substitute for financial measures prepared in accordance with GAAP.
transaction costs related to the proposed merger with Nicor. We believe these financial measures are useful to investors because they provide an
alternative method for assessing the Company’s operating results in a manner that is focused on the performance of the Company’s ongoing operations.
The presentation of these financial measures is not meant to be a substitute for financial measures prepared in accordance with GAAP.
®
21
Additional Information
Additional Information
In connection with the proposed merger, AGL Resources has filed with the SEC a Registration Statement on Form S-4 (Registration No. 333-
172084), as amended, which is publicly available, that includes a joint proxy statement of AGL Resources and Nicor that also constitutes a
prospectus of AGL Resources. AGL Resources and Nicor will mail the definitive joint proxy statement/prospectus to their respective stockholders of
record as of April 18, 2011. WE URGE INVESTORS TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY, AS
WELL AS OTHER DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT AGL
RESOURCES, NICOR AND THE PROPOSED TRANSACTION. The joint proxy statement/prospectus, as well as other filings containing information
about AGL Resources and Nicor, can be obtained free of charge at the website maintained by the SEC at www.sec.gov. You may also obtain these
documents, free of charge, from AGL Resources’ website (www.aglresources.com) under the tab Investor Relations/SEC Filings or by directing a
request to AGL Resources, P.O. Box 4569, Atlanta, GA, 30302-4569. You may also obtain these documents, free of charge, from Nicor’s website
(www.nicor.com) under the tab Investor Information/SEC Filings or by directing a request to Nicor, P.O. Box 3014, Naperville, IL 60566-7014.
172084), as amended, which is publicly available, that includes a joint proxy statement of AGL Resources and Nicor that also constitutes a
prospectus of AGL Resources. AGL Resources and Nicor will mail the definitive joint proxy statement/prospectus to their respective stockholders of
record as of April 18, 2011. WE URGE INVESTORS TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY, AS
WELL AS OTHER DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT AGL
RESOURCES, NICOR AND THE PROPOSED TRANSACTION. The joint proxy statement/prospectus, as well as other filings containing information
about AGL Resources and Nicor, can be obtained free of charge at the website maintained by the SEC at www.sec.gov. You may also obtain these
documents, free of charge, from AGL Resources’ website (www.aglresources.com) under the tab Investor Relations/SEC Filings or by directing a
request to AGL Resources, P.O. Box 4569, Atlanta, GA, 30302-4569. You may also obtain these documents, free of charge, from Nicor’s website
(www.nicor.com) under the tab Investor Information/SEC Filings or by directing a request to Nicor, P.O. Box 3014, Naperville, IL 60566-7014.
The respective directors and executive officers of AGL Resources and Nicor, and other persons, may be deemed to be participants in the solicitation
of proxies in respect of the proposed transaction. Information regarding AGL Resources’ directors and executive officers is available in the joint
proxy statement/prospectus contained in the above referenced Registration Statement and its definitive proxy statement filed with the SEC by AGL
Resources on March 14, 2011, and information regarding Nicor directors and executive officers is available in the joint proxy statement/prospectus
contained in the above referenced Registration Statement and its definitive proxy statement filed with the SEC by Nicor on April 19, 2011. These
documents can be obtained free of charge from the sources indicated above. Other information regarding the interests of the participants in the
proxy solicitation are included in the definitive joint proxy statement/prospectus and other relevant materials filed with the SEC. This communication
shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote
or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
of proxies in respect of the proposed transaction. Information regarding AGL Resources’ directors and executive officers is available in the joint
proxy statement/prospectus contained in the above referenced Registration Statement and its definitive proxy statement filed with the SEC by AGL
Resources on March 14, 2011, and information regarding Nicor directors and executive officers is available in the joint proxy statement/prospectus
contained in the above referenced Registration Statement and its definitive proxy statement filed with the SEC by Nicor on April 19, 2011. These
documents can be obtained free of charge from the sources indicated above. Other information regarding the interests of the participants in the
proxy solicitation are included in the definitive joint proxy statement/prospectus and other relevant materials filed with the SEC. This communication
shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote
or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
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