Atmos Energy 2007 Annual Report Download

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CELEBRATING THE PAST BRIDGING THE FUTURE
Drawing upon our rich history, Atmos Energy is preparing for the future by
tapping new opportunities in both the regulated and nonregulated markets.
ATMOS ENERGY CORPORATION | 2007 SUMMARY ANNUAL REPORT
ATMOS ENERGY CORPORATION | 2007 SUMMARY ANNUAL REPORT

Table of contents

  • Page 1
    A T M O S E N E R G Y C O R P O R A T I O N | 2 0 0 7 S U M M A R Y A N N U A L R E P O R T C E L E B R A T I N G T H E P A S T B R I D G I N G T H E F U T U R E D r a w i n g u p o n o u r r i c h h i s t o r y, A t m o s E n e r g y i s p r e p a r i n g f o r t h e f u t u r e b y t...

  • Page 2

  • Page 3
    ...: customer count, service area and earnings growth. In 2004, after completing four more major acquisitions, the company acquired TXU Gas, virtually doubling in size. Today, Atmos Energy is the largest all-natural-gas distribution company in the United States. It's a new century for natural gas...

  • Page 4

  • Page 5
    ... Annual Report on Form 10-K also is available on Atmos Energy's Web site at www.atmosenergy.com. Additional investor information is presented on pages 31 and 32 of this report. A 3,550-horsepower compressor, one of two, at our new Ponder, Texas, compressor station helps ensure reliable natural gas...

  • Page 6
    ... for future growth. As we begin a second century, Atmos Energy is prepared to play an Senior Management Team Robert W. Best (seated) Chairman, President and Chief Executive Officer Left to right: Wynn D. McGregor Senior Vice President, Human Resources J. Patrick Reddy Senior Vice President and Chief...

  • Page 7
    ... has evolved, Atmos Energy has In fiscal 2007, our regulated operations- which comprise our six natural gas distribution divisions and our Texas intrastate pipeline and storage division-contributed 64 percent of consolidated net income. Results were boosted by normal weather, increased revenues...

  • Page 8
    ... natural gas pipeline and storage operations of our Atmos Pipeline-Texas Division; these operations previously were included in the former pipeline and storage segment. > Natural gas marketing segment remains unchanged and includes our nonregulated natural gas marketing and gas management services...

  • Page 9
    ... project completed in 2006. The unique location of our Texas pipeline system, which virtually overlays Our nonregulated operations made impressive gains in natural gas marketing volumes and in attracting new customers. Gas sales volumes by Atmos Energy Marketing went up 31 percent to 371 billion...

  • Page 10
    ... projects. Our future is in the people who keep Atmos Energy financially strong and efficient. 8 FINANCIAL IMPROVEMENTS OUTLOOK FOR 2008 Our overall financial condition improved significantly in fiscal 2007. We took advantage of a robust stock market to sell 6.3 million shares of common stock in...

  • Page 11
    ... gas production in the Gulf of Mexico now back to normal, spreads between what we pay for gas and what we sell it for are less. Therefore, the margins in our gas marketing business are likely to return to more historical levels. Our nonregulated operations are continuing to add major new customers...

  • Page 12
    ...as a holdover from the past. For decades, from turn-of-the-century gaslights to 1960s home appliances, natural gas had been widely used. But by the 1970s, the energy of the future seemed to be electricity, with home builders touting the all-electric home. Today, all that has changed. With escalating...

  • Page 13
    ..., CH 4 , the primary source of hydrogen, H 2 . Atmos Energy originated in Amarillo, Texas, at the turn of the last century. Today we are the largest all-natural-gas distribution company in the country, with regulated operations, shown in yellow, in 12 states and nonregulated operations in 22...

  • Page 14
    ...sized home with all electrical appliances. A MUCH MORE EFFICIENT FUEL When you use natural gas, you receive more than 90 percent of the total energy that came from the source. But, when you use electricity, you get only 27 percent of the total energy. That's because generating electricity requires...

  • Page 15
    ...-walled tank, liquefied natural gas is stored at a company facility to provide up to 30 million cubic feet a day of fuel for our customers when demand rises. LNG is expected to provide a growing share of the U.S. natural gas supply. Atmos Energy's gas marketing and nonregulated pipeline and storage...

  • Page 16
    ...Manager of Public Affairs Steve Green talks with fourth-grade students about saving energy in their homes. By educating these future consumers as part of our revenue decoupling plan in Missouri, we are encouraging long-term energy efficiency and conservation. WE DON'T SET THE PRICE Our natural gas...

  • Page 17
    ... this rate structure, we make no profit from the volumes of natural gas that our customers use. However, we are allowed to charge a higher basic service fee that helps insulate our revenues from changes in customers' use caused by weather, conservation and more-efficient appliances. In return, we're...

  • Page 18
    ... decoupling, we're underwriting programs to promote energy conservation. We're offering our residential and commercial customers attractive rebates for replacing old gas furnaces and water heaters with new, high-efficiency equipment. We're also funding programs to weatherize homes of many of our...

  • Page 19
    ...Texas. Our Atmos Pipeline-Texas Division transports natural gas for our Mid-Texas Division and ships gas from the major producing basins in the state. Our intrastate pipeline is one of the largest in Texas, with connections to interstate pipelines at three strategic pipeline hubs in West Texas, East...

  • Page 20
    ... we GAF Materials Corporation, which makes roofing and building products, receives a reliable supply of natural gas at its plant in Dallas, Texas, provided by Atmos Energy Marketing. our regulated operations-have grown rapidly in scale and scope. Today they operate in 22 states and contribute about...

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  • Page 22
    ... services from our natural gas marketing and storage operations. We also expect that operating gathering systems will give our gas marketing operations options to buy large volumes of natural gas at better prices. In Kentucky, we are constructing a low-pressure gathering system near Bowling Green...

  • Page 23
    ... FOR ENERGY In another new area of our nonregulated business, we are evaluating projects to buy or build natural gas storage facilities. We're focusing mainly on salt-dome storage, which allows natural gas to be injected and withdrawn from giant underground caverns a number of times during the...

  • Page 24
    ...September 30 2007 Meters in service 2006 Residential Commercial Industrial Agricultural Public authority and other Total meters Heating degree days 2,893,543 272,081 2,339 10,991 8,173 3,187,127 2,886,042 275,577 2,661 8,714 8,205 3,181,199 Actual (weighted average) Percent of normal Natural gas...

  • Page 25
    ... cash equivalents Cash held on deposit in margin account Accounts receivable, less allowance for doubtful accounts of $16,160 in 2007 and $13,686 in 2006 Gas stored underground Other current assets Total current assets Goodwill and intangible assets Deferred charges and other assets Capitalization...

  • Page 26
    ... Dollars in thousands, except per share data Operating revenues 2007 2006 2005 Natural gas distribution segment Regulated transmission and storage segment Natural gas marketing segment Pipeline, storage and other segment Intersegment eliminations Purchased gas cost $ 3,358,765 163,229 3,151,330 33...

  • Page 27
    ... Net income Adjustments to reconcile net income to net cash provided by operating activities: 2007 2006 2005 $ 168,492 $ 147,737 $ 135,785 Impairment of long-lived assets Depreciation and amortization: Charged to depreciation and amortization Charged to other accounts Deferred income...

  • Page 28
    ... with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Atmos Energy Corporation's internal control over financial reporting as of September 30, 2007, based on criteria established in Internal Control-Integrated Framework issued by the Committee...

  • Page 29
    ...' equity Number of employees Net gas distribution plant per meter Gas distribution operation and maintenance expense per meter Meters per employee - gas distribution Times interest earned before income taxes *Heating degree days are adjusted for service areas with weather-normalized operations...

  • Page 30
    ...S Senior Management Team Regulated Divisions Robert W. Best Chairman, President and Chief Executive Officer J. Kevin Akers President, Kentucky/Mid-States Division J. Patrick Reddy Senior Vice President and Chief Financial Officer Richard A. Erskine President, Atmos Pipeline-Texas Division Kim...

  • Page 31
    ... Fred E. Meisenheimer Vice President and Controller Mark S. Bergeron Vice President, Gas Supply and Services Laurie M. Sherwood Vice President, Corporate Development, and Treasurer Susan K. Giles Vice President, Investor Relations Richard J. Gius Vice President and Chief Information Officer

  • Page 32
    ..., Human Resources, Work Session/Annual Meeting Nancy K. Quinn Principal, Hanover Capital, LLC East Hampton, New York Board member since 2004 Committees: Audit, Nominating and Corporate Governance Robert W. Best Chairman, President and Chief Executive Officer Atmos Energy Corporation Dallas, Texas...

  • Page 33
    ...an e-mail message to [email protected]. Securities analysts and investment managers, please contact: Susan K. Giles Atmos Energy Corporation's Annual Report on Form 10-K is available at no charge from Investor Relations, Atmos Energy Corporation, P.O. Box 650205, Dallas, Texas 75265...

  • Page 34
    ... the Summary Annual Report and other company documents over the Internet may result in charges to you from your Internet service provider or telephone company. Inside front cover: New distribution pipeline will bring natural gas to a growing residential area of Southaven, Mississippi, one of...

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  • Page 36
    A T M O S E N E R G Y P. O . B O X C O R P O R A T I O N 6 5 0 2 0 5 7 5 2 6 5 - 0 2 0 5 D A L L A S , T E X A S A T M O S E N E R G Y. C O M