Atmos Energy 2008 Annual Report Download - page 6

4| ATMOS ENERGY 2008 SUMMARY ANNUAL REPORT
Fiscal 2008 consolidated net income increased 7 percent, year
over year, to $180.3 million, and earnings per diluted share
went up 4.2 percent from $1.92 in scal 2007 to $2.00 in scal
2008. Looking at the longer trend, Atmos Energy’s compound
average growth rate for diluted earnings per share over the
past ve years was 5.4 percent—furthering our stated goal
of increasing earnings, on average, between 4 percent and 6
percent a year.
In scal 2008, we paid dividends totaling $1.30 per share,
with a dividend payout ratio of 65 percent. In November 2008,
the board of directors again raised the annual dividend by
2 cents a share to an indicated rate of $1.32. is increase,
taking into account all mergers and acquisitions, marked the
company’s 25th consecutive annual dividend increase.
Rate strategy aids
regulated operations
Net income from regulated operations in 2008 contributed
almost three-fourths of net income, or $1.49 per diluted
share. Combined earnings from our natural gas distribution
segment and from our regulated transmission and storage
segment increased 24 percent to $134.1 million.
During the scal year, we resolved 12 rate cases and other
regulatory proceedings, which contributed $34.5 million of
incremental revenues. In the largest of these cases, we negoti-
ated a three-year settlement with 438 of the 439 Texas cities
served by our Mid-Tex Division. We obtained desired
outcomes in other cases that were concluded in Georgia,
Louisiana, Kansas, Tennessee, Virginia and West Texas.
ese rate-case results support our goal of stabilizing
our regulated earnings by decoupling our distribution
revenues from our customers’ gas consumption. Today
about 97 percent of our distribution margins are unaected
by changes in weather due to weather normalization and
similar rate-design mechanisms. We are continuing to seek
additional improvements in our rate design to eliminate or
reduce price volatility and provide more predictable and
stable utility bills for our customers.
Traditional rate structures have discouraged utilities
from oering energy-saving products and services by tying
the recovery of their allowed rate of return to the amount of
OUR 2008 FISCAL YEAR, ENDED SEPTEMBER 30, WAS HIGHLY
SUCCESSFUL. Yet, at year-end, the economy was overshadowed by the
world’s worst nancial and credit crisis since the Great Depression—
causing growing uncertainties for both our customers and investors. Such
a sobering situation makes our latest record earnings all the more
valuable while it emphasizes the importance of prudent strategies to
achieve continued performance.
Dear Fellow
Shareholder
$1.58
$1.72
$2.00
$1.92
$1.82
04 05 06 07 08
Net Income per Diluted Share