Atmos Energy 2007 Annual Report Download - page 10

8
BRIDGING THE FUTURE
FINANCIAL IMPROVEMENTS
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 December 2006 in a public
offering and then used the net proceeds to reduce our short-
term debt. That sale diluted earnings by approximately 5 cents
per share but significantly strengthened our balance sheet.
In June 2007, we made a public offering of $250 million
of senior notes. We used the net proceeds plus available cash to
redeem $300 million of floating-rate senior notes in July to
further strengthen our balance sheet.
At September 30, 2007, our debt-to-capitalization ratio stood
at 53.7 percent—a 7.2 percentage-point improvement over a
year ago. We have solid investment-grade credit ratings and
ample liquidity from about $1.5 billion in commercial paper and
bank credit facilities.
OUTLOOK FOR 2008
We expect 2008 to be a challenging year. One of our highest
priorities is to obtain adequate rate levels for all our distribution
divisions, particularly our Mid-Tex Division in Texas. It is our
largest division and serves almost half of our regulated
distribution customers.
The division received a $4.8 million revenue increase in
fiscal 2007. However, with a current rate of return that is less
than 6 percent a year, it is significantly underearning on its
assets. Therefore, we have filed another request for $52 million
in additional annual revenues. Because of the statutory length of
time to resolve rate proceedings in Texas, we expect the
outcome of this case will not materially affect our 2008 results.
We do, however, expect improved results in our distribution
operations as a result of $35 million of other revenue increases
approved in 2007 and those we will seek in 2008. We also
Our future looks bright; however, it rests not on our current
assets or future projects. Our future is in the people who
keep Atmos Energy financially strong and efficient.