Atmos Energy 1997 Annual Report Download - page 50

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45
ATMOS ENERGY CORPORATION
The loan agreements pursuant to which the Company’s Senior Notes and First Mortgage
Bonds have been issued contain covenants by the Company with respect to the mainte-
nance of certain debt-to-equity ratios and cash flows, and restrictions on the payment of
dividends. Also see Note 7 of the accompanying notes to consolidated financial statements.
UCG Energy and Woodward Marketing, Inc. (“WMI”), sole shareholders of WMLLC,
act as guarantors of a $12,500,000 credit facility for WMLLC with a bank. No balance
was outstanding on this credit facility at September 30, 1997. UCG Energy and WMI also
act as joint and several guarantors on certain purchases of natural gas and transportation
services from suppliers by WMLLC. These outstanding obligations amounted to $12.2
million at September 30, 1997.
Issuance of common stock The Company issued 400,578, 995,467 and 2,335,785 shares
of common stock in 1997, 1996 and 1995, respectively, for its Direct Stock Purchase Plan,
Employee Stock Ownership Plans, Restricted Stock Grant Plan, Outside Directors Stock-
for-Fee Plan, a public offering in 1995, acquisitions of Oceana Heights and Monarch Gas
Company and an interest in Woodward Marketing L.L.C. See the Consolidated
Statements of Shareholders’ Equity for the number of shares issued under each of the
plans and for other transactions. Please see Note 9 of the accompanying notes to consol-
idated financial statements for the number of shares registered and available for future
issuance under each of the Company’s plans.
In November 1995 the Company exchanged 313,411 shares of its common stock valued
at approximately $6.4 million in exchange for privately held Oceana Heights Gas
Company of Thibodaux, Louisiana.
In June 1996, in connection with the acquisition of Monarch Gas Company (“Monarch”),
207,366 shares of UCGC’s common stock were exchanged for the common stock of
Monarch. The merger added approximately 2,900 natural gas customers in the Vandalia,
Illinois area. In May 1995, 320,512 shares of UCGC’s common stock valued at $5,000,000
were issued in connection with the purchase of a 45% interest in Woodward Marketing,
L.L.C. (“WMLLC”) by UCG Energy. In June 1995 UCGC issued 1,380,000 shares of
common stock under a shelf registration statement in an underwritten public offering
with net proceeds from the sale amounting to approximately $18.9 million.
The Company believes that internally generated funds, its credit facilities and access to the
public debt and equity capital markets will provide necessary working capital and liquidity
for capital expenditures and other cash needs for 1998.
Inflation
The Company believes that inflation has caused and will continue to cause increases in
certain operating expenses and has required and will continue to require assets to be
replaced at higher costs. The Company continually reviews the adequacy of its gas rates
in relation to the increasing cost of providing service and the inherent regulatory lag in
adjusting those gas rates.