Atmos Energy 1999 Annual Report Download - page 46

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Atmos
Energy
Corporation
42
Contents of Notes to Consolidated Financial Statements
1) Summary of Significant Accounting Policies . . . . . . . . . . 42
2) Business Combinations . . . . . . . . . . . . . . . . . . . . . . . . . 45
3) Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4) Long-Term Debt and Short-Term Debt . . . . . . . . . . . . . . 47
5) Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6) Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7) Common Stock and Stock Options . . . . . . . . . . . . . . . . . 51
8) Employee Retirement and Stock Ownership Plans . . . . . . 53
9) Other Postretirement Benefits . . . . . . . . . . . . . . . . . . . . . 56
10) Earnings Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
11) Statement of Cash Flows Supplemental Disclosures . . . . . 57
12) Segment Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
13) Marketable Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
14) Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
15) Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . 60
16) Subsequent Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
17) Selected Quarterly Financial Data (Unaudited) . . . . . . . . 60
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Forward-Looking Statements These notes to consolidated financial
statements, particularly notes 2, 3, 6, 7, 9, 14, and 16, may contain
“forward-looking statements” as discussed herein in Management’s
Discussion and Analysis of Financial Condition and Results of
Operations under the heading “Cautionary Statement for the
Purposes of the Safe Harbor under the Private Securities Litigation
Reform Act of 1995” and should be read in conjunction with such
discussion.
Description of Business Atmos Energy Corporation and its sub-
sidiaries (“Atmos” or the “Company”) are engaged primarily in the
natural gas utility business as well as certain non-regulated business-
es. The Company distributes through sales and transportation
arrangements natural gas to approximately 1.0 million residential,
commercial, public authority and industrial customers through its five
regulated utility divisions: Energas Company (“Energas Division”) in
Texas; Trans Louisiana Gas Company (“Trans La Division”) in
Louisiana; Western Kentucky Gas Company (“Western Kentucky
Division”) in Kentucky; Greeley Gas Company (“Greeley Division”) in
Colorado and Kansas; and United Cities Gas Company (“United
Cities Division”) in Illinois, Tennessee, Iowa, Virginia, Georgia, South
Carolina and Missouri. Such business is subject to federal and state
regulation and/or regulation by local authorities in each of the twelve
states in which the utility divisions operate. Its shared services unit is
located in Dallas, Texas and its Customer Support Center is located in
Amarillo, Texas. Its nonregulated businesses include propane sales
and various energy services businesses as described below.
The Company is engaged in the retail and wholesale distribution
of propane gas through United Cities Propane Gas, Inc. (“Propane”).
It currently has operation and storage centers and storefront offices
located in Tennessee, Kentucky, and North Carolina with a total com-
pany storage capacity of approximately 2.5 million gallons. As of
September 30, 1999, Propane served approximately 40,000 cus-
tomers in the states listed above as well as Virginia.
Through Atmos Storage, Inc. (“Storage”), the Company owns and
operates natural gas storage fields in Kentucky and Kansas to supple-
ment natural gas used by customers of the regulated utility divisions in
Tennessee, Kansas and Illinois and to provide storage services to other
customers that may be in other states.
Through Atmos Energy Services, Inc., the Company markets gas
to industrial and irrigation customers primarily in West Texas through
Enermart Energy Services Trust (“Enermart”) and to industrial cus-
tomers in Louisiana, and is developing plans for marketing various
non-regulated services and products.
Through Atmos Energy Marketing, LLC’s 45% interest in
Woodward Marketing, LLC (“WMLLC”), a limited liability company
formed in Delaware with headquarters in Houston, Texas, the
Company is engaged in gas marketing and energy management serv-
ices. WMLLC provides gas supply management services to industrial
customers, municipalities and local distribution companies, including
the Company’s five regulated utility divisions.
Finally, the Company, through Atmos Leasing Inc. and Atmos
Energy Marketing, LLC, leases real estate and vehicles to the United
Cities Division and leases appliances to residential customers.
Principles of Consolidation The accompanying consolidated finan-
cial statements include the accounts of Atmos Energy Corporation and
its subsidiaries. Each subsidiary is wholly owned and intercompany
transactions have been eliminated.
Notes to Consolidated Financial Statements