Atmos Energy Corporation (NYSE: ATO) today reported consolidated
results for its 2013 fiscal year and fourth quarter ended
September 30, 2013.
- Fiscal 2013 consolidated net income,
excluding net unrealized margins and a gain on sale, was $232.6
million, or $2.53 per diluted share, compared with consolidated net
income of $211.4 million, or $2.31 per diluted share in the prior
year, excluding net unrealized margins and the net positive impact
of several one-time items, including a gain on sale.
- Fiscal 2013 net income includes a net
gain on the sale of the Georgia assets of $5.3 million, or $0.06
per diluted share. Fiscal 2012 net income included a net gain on
the sale of the Missouri, Illinois and Iowa assets of $6.3 million,
or $0.07 per diluted share and the net positive impact of several
one-time items totaling $4.0 million, or $0.04 per diluted
share.
- Fiscal 2013 net income was $243.2
million, or $2.64 per diluted share, after including noncash,
unrealized net gains of $5.3 million, or $0.05 per diluted share
and the gain on sale. Net income was $216.7 million, or $2.37 per
diluted share in the prior year, after including unrealized net
losses of $5.0 million or $(0.05) per diluted share and the net
positive impact of several one-time items, including the gain on
sale.
- Atmos Energy expects fiscal 2014
earnings to be in the range of $2.66 to $2.76 per diluted share,
excluding net unrealized margins.
- The company’s Board of Directors has
declared a quarterly dividend of 37 cents per common share. The
indicated annual dividend for fiscal 2014 is $1.48, which
represents a 5.7 percent increase.
For the quarter ended September 30, 2013, consolidated net
income was $7.5 million, or $0.08 per diluted share, compared with
net income of $8.0 million, or $0.09 per diluted share for the same
quarter last year. Results from nonregulated operations include
noncash, unrealized net losses of $4.1 million, or $(0.05) per
diluted share for the three months ended September 30, 2013,
compared with net losses of $12.4 million, or $(0.14) per diluted
share for the prior-year quarter. The prior year fourth quarter net
income includes the aforementioned gain on the sale of Missouri,
Illinois and Iowa assets totaling $6.3 million, or $0.07 per
diluted share and the net positive impact of several one-time items
totaling $4.0 million or $0.04 per diluted share.
"Our fiscal 2013 financial performance reflects the significant
capital invested in our infrastructure, coupled with rate design
outcomes that further stabilized margins," said Kim Cocklin,
president and chief executive officer of Atmos Energy Corporation.
"The financial strength of the company allows us to continue to
invest in improving the safety and reliability of our system, while
providing a return to stakeholders. Looking forward, we are
positioned to continue delivering annual earnings per share growth
in the six to eight percent range," Cocklin concluded.
Results for the Fiscal Year Ended
September 30, 2013
Natural gas distribution gross profit, excluding discontinued
operations, increased $58.5 million to $1,081.2 million for the
year ended September 30, 2013, compared with $1,022.7 million
in the prior-year period. This increase is due largely to a $41.8
million net increase in rates from regulatory outcomes across all
jurisdictions. Additionally, gross profit increased $7.5 million
due to colder weather in the Mississippi, Kentucky/Mid-States and
Colorado-Kansas Divisions.
Regulated transmission and storage gross profit increased $21.5
million to $268.9 million for the year ended September 30,
2013, compared with $247.4 million in the prior fiscal year. This
increase is primarily a result of increased revenue from the Gas
Reliability Infrastructure Program (GRIP) filings that became
effective in May 2013 and April 2012.
Nonregulated gross profit increased $8.2 million to $63.3
million for the year ended September 30, 2013, compared with
$55.1 million for the prior-year period. Realized margins decreased
$8.8 million primarily from a decrease in gas delivery and other
services margins, largely due to a two percent decrease in
consolidated sales volumes attributable to reduced industrial and
power generation volumes, combined with a $0.02/Mcf decrease in
per-unit margins. Additionally, unrealized margins increased $17.0
million.
Consolidated operation and maintenance expense, excluding
discontinued operations, for the year ended September 30,
2013, was $488.0 million, compared with $453.6 million for the
prior year. The $34.4 million increase resulted primarily from
higher line locate and pipeline right of way activities of $19.1
million and a $13.3 million increase in employee-related costs.
Results for fiscal 2012 included a $5.3 million noncash charge
to impair the remaining investment in the Kentucky natural gas
gathering assets recorded in the fourth quarter.
Miscellaneous expense was $0.2 million for the year ended
September 30, 2013, compared to miscellaneous expense of $14.6
million for the prior year. The $14.4 million year-over-year change
resulted primarily from the absence in the current year of a $10.0
million one-time cash donation made to a donor-advised fund in the
prior-year fourth quarter. Additionally, the current year reflects
a $3.9 million increase in performance based rates earned primarily
in the Tennessee and Mississippi service areas.
Interest charges for the year ended September 30, 2013 were
$128.4 million, compared with $141.2 million in the prior year. The
$12.8 million year-over-year decrease resulted primarily from
interest deferrals related to Texas infrastructure spending during
the current year.
Results for fiscal 2012 included a tax benefit of $13.6 million.
During the fiscal 2012 fourth quarter, the company reduced the tax
rate at which deferred taxes were expected to be settled in future
periods as a result of the sale of the Missouri, Illinois and Iowa
assets.
The debt capitalization ratio at September 30, 2013 was
52.2 percent, compared with 51.7 percent at September 30,
2012. At September 30, 2013, there was $368.0 million of
short-term debt outstanding, compared with $570.9 million at
September 30, 2012. The decrease in short-term debt in fiscal
2013 was due to the early redemption of the company's 5.125% $250
million senior notes with short-term debt in the fourth quarter of
fiscal 2012.
For the year ended September 30, 2013, the company
generated operating cash flow of $613.1 million, a $26.2 million
increase compared with the year ended September 30, 2012. The
year-over-year increase reflects changes in working capital, offset
by a $10.5 million decrease in contributions made to the pension
and postretirement plans in the current year.
Capital expenditures increased to $845.0 million for the year
ended September 30, 2013, compared with $732.9 million in the
prior year. The $112.1 million increase primarily reflects
increased infrastructure spending across all divisions, Line W and
Line WX pipeline expansion projects and increased cathodic
protection spending in the regulated transmission and storage
segment.
Results for the 2013 Fiscal Fourth Quarter
Ended September 30, 2013
Natural gas distribution gross profit, excluding discontinued
operations, increased $43.3 million to $215.1 million for the
fiscal 2013 fourth quarter, compared with $171.8 million in the
prior-year quarter. As expected, this increase primarily reflects
an increase in margins due to rate design changes implemented in
the recent Mid-Tex and West Texas Divisions’ rate cases, which
resulted in an increase to the customer’s base charge and decrease
to the consumption charge. These rate design changes shifted
margins from the first and second fiscal quarters into the third
and fourth fiscal quarters.
Regulated transmission and storage gross profit increased $6.8
million to $72.3 million for the quarter ended September 30,
2013, compared with $65.5 million for the same quarter last year.
This increase is primarily the result of a $6.8 million increase
related to GRIP filings that became effective in May 2013.
Nonregulated gross profit increased $0.8 million to $13.3
million for the fourth quarter of fiscal 2013, compared with $12.5
million for the prior-year quarter. Realized margins from gas
delivery and other services decreased $3.0 million, primarily due
to a four percent decrease in consolidated sales volumes combined
with a $0.03/Mcf decrease in per-unit margins. Gross profit also
decreased $9.1 million quarter-over-quarter primarily due to the
timing and magnitude of gains realized on the settlement of
financial positions in the prior-year quarter. Finally, unrealized
margins increased $12.9 million quarter over quarter.
Consolidated operation and maintenance expense, excluding
discontinued operations for the three months ended
September 30, 2013, was $149.1 million, compared with $123.6
million for the prior-year quarter. The $25.5 million
quarter-over-quarter increase resulted primarily from a $12.0
million increase in employee-related costs and higher line locate
and pipeline right of way activities of $9.4 million.
Results for the quarter ended September 30, 2012, included the
one-time items previously discussed which resulted in a total net
of tax gain of $10.3 million.
Outlook
The leadership of Atmos Energy remains focused on enhancing
system safety and reliability through infrastructure investment
while delivering shareholder value and consistent earnings growth.
Atmos Energy expects fiscal 2014 earnings to be in the range of
$2.66 to $2.76 per diluted share, excluding unrealized margins. Net
income from regulated operations is expected to be in the range of
$237 million to $247 million, while net income from nonregulated
operations is expected to be in the range of $9 million to $11
million. Capital expenditures for fiscal 2014 are expected to range
between $830 million to $850 million.
Conference Call to be Webcast November 7,
2013
Atmos Energy will host a conference call with financial analysts
to discuss the fiscal 2013 financial results and outline the
assumptions supporting the fiscal 2014 guidance on Thursday,
November 7, 2013, at 10 a.m. Eastern Time. The telephone number is
877-485-3107. The conference call will be webcast live on the Atmos
Energy website at www.atmosenergy.com.
A playback of the call will be available on the website later that
day. Kim Cocklin, president and chief executive officer, and Bret
Eckert, senior vice president and chief financial officer, will
participate in the conference call.
Highlights and Recent Developments
Standard & Poor's Upgrade
On October 8, 2013, Standard & Poor's Corporation raised
Atmos Energy's senior unsecured debt rating to A- from BBB+, with a
ratings outlook of stable, citing an improved business risk profile
from an increasing contribution of earnings from regulated
operations and focusing nonregulated operations on its core
delivered gas business.
This news release should be read in conjunction with the
attached unaudited financial information.
Forward-Looking Statements
The matters discussed in this news release may contain
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements other than statements of
historical fact included in this news release are forward-looking
statements made in good faith by the company and are intended to
qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. When used in this
news release or in any of the company's other documents or oral
presentations, the words “anticipate,” “believe,” “estimate,”
“expect,” “forecast,” “goal,” “intend,” “objective,” “plan,”
“projection,” “seek,” “strategy” or similar words are intended to
identify forward-looking statements. Such forward-looking
statements are subject to risks and uncertainties that could cause
actual results to differ materially from those discussed in this
news release, including the risks and uncertainties relating to
regulatory trends and decisions, the company's ability to continue
to access the capital markets and the other factors discussed in
the company's reports filed with the Securities and Exchange
Commission. These factors include the risks and uncertainties
discussed in the company's Annual Report on Form 10-K for the
fiscal year ended September 30, 2012 and in the company's
Quarterly Report on Form 10-Q for the three and nine months ended
June 30, 2013. Although the company believes these forward-looking
statements to be reasonable, there can be no assurance that they
will approximate actual experience or that the expectations derived
from them will be realized. The company undertakes no obligation to
update or revise forward-looking statements, whether as a result of
new information, future events or otherwise.
About Atmos Energy
Atmos Energy Corporation, headquartered in Dallas, is one of the
country's largest natural-gas-only distributors, serving over three
million natural gas distribution customers in over 1,400
communities in eight states from the Blue Ridge Mountains in the
East to the Rocky Mountains in the West. Atmos Energy also manages
company-owned natural gas pipeline and storage assets, including
once of the largest intrastate natural gas pipeline systems in
Texas and provides natural gas marketing and procurement services
to industrial, commercial and municipal customers primarily in the
Midwest and Southeast. For more information, visit www.atmosenergy.com.
Atmos Energy Corporation
Financial Highlights
(Unaudited)
Statements of
Income
Year EndedSeptember 30
Percentage (000s except per share) 2013
2012 Change Gross Profit: Natural gas
distribution segment $ 1,081,236 $ 1,022,743 6 % Regulated
transmission and storage segment 268,900 247,351 9 % Nonregulated
segment 63,331 55,124 15 % Intersegment eliminations (1,417
) (1,479 ) 4 % Gross profit 1,412,050 1,323,739 7 %
Operation and maintenance expense 488,020 453,613 8 % Depreciation
and amortization 235,079 237,525 (1 )% Taxes, other than income
187,072 181,073 3 % Asset impairment — 5,288
(100 )% Total operating expenses 910,171 877,499 4 %
Operating income 501,879 446,240 12 % Miscellaneous expense (197 )
(14,644 ) 99 % Interest charges 128,385
141,174 (9 )% Income from continuing operations before
income taxes 373,297 290,422 29 % Income tax expense 142,599
98,226 45 % Income from continuing operations
230,698 192,196 20 % Income from discontinued operations, net of
tax 7,202 18,172 (60 )% Gain on sale of discontinued operations,
net of tax 5,294 6,349 (17 )% Net
income $ 243,194 $ 216,717 12 % Basic earnings per
share Income per share from continuing operations $ 2.54 $ 2.12
Income per share from discontinued operations 0.14
0.27 Net income per share — basic $ 2.68 $
2.39 Diluted earnings per share Income per share from
continuing operations $ 2.50 $ 2.10 Income per share from
discontinued operations 0.14 0.27 Net
income per share — diluted $ 2.64 $ 2.37 Cash
dividends per share $ 1.40 $ 1.38 Weighted average shares
outstanding: Basic 90,533 90,150 Diluted 91,711 91,172
Year EndedSeptember 30
Percentage
Summary Net Income
(Loss) by Segment (000s)
2013 2012 Change Natural gas
distribution – continuing operations $ 150,856 $ 123,848 22 %
Natural gas distribution – discontinued operations 12,851 24,521
(48 )% Regulated transmission and storage 68,260 63,059 8 %
Nonregulated – continuing operations 6,252 10,276 (39 )%
Nonregulated – discontinued operations (355 ) — (100 )% Unrealized
margins, net of tax 5,330 (4,987 ) 207 %
Consolidated net income $ 243,194 $ 216,717 12 %
Atmos Energy Corporation
Financial Highlights, continued
(Unaudited)
Statements of
Income
Three Months EndedSeptember 30
Percentage (000s except per share) 2013
2012 Change Gross Profit: Natural gas
distribution segment $ 215,104 $ 171,761 25 % Regulated
transmission and storage segment 72,330 65,482 10 % Nonregulated
segment 13,305 12,527 6 % Intersegment eliminations (299 )
(381 ) 22 % Gross profit 300,440 249,389 20 % Operation and
maintenance expense 149,149 123,624 21 % Depreciation and
amortization 60,191 60,783 (1 )% Taxes, other than income 40,717
36,903 10 % Asset impairment — 5,288
(100 )% Total operating expenses 250,057 226,598 10 % Operating
income 50,383 22,791 121 % Miscellaneous expense (2,140 ) (11,059 )
81 % Interest charges 31,791 33,896 (6
)% Income (loss) from continuing operations before income taxes
16,452 (22,164 ) 174 % Income tax expense (benefit) 8,916
(21,878 ) 141 % Income (loss) from continuing
operations 7,536 (286 ) 2,735 % Income from discontinued
operations, net of tax — 1,904 (100 )% Gain on sale of discontinued
operations, net of tax — 6,349 (100 )%
Net income $ 7,536 $ 7,967 (5 )% Basic earnings per
share Income (loss) per share from continuing operations $ 0.08 $ —
Income per share from discontinued operations —
0.09 Net income per share — basic $ 0.08 $
0.09 Diluted earnings per share Income (loss) per share from
continuing operations $ 0.08 $ — Income per share from discontinued
operations — 0.09 Net income per share
— diluted $ 0.08 $ 0.09 Cash dividends per share $
0.350 $ 0.345 Weighted average shares outstanding: Basic 90,640
90,207 Diluted 91,818 91,224
Three Months EndedSeptember 30
Percentage
Summary Net Income
(Loss) by Segment (000s)
2013 2012 Change Natural gas
distribution – continuing operations $ (4,244 ) $ (10,221 ) 58 %
Natural gas distribution – discontinued operations — 8,253 (100 )%
Regulated transmission and storage 12,528 14,881 (16 )%
Nonregulated 3,401 7,419 (54 )% Unrealized margins, net of tax
(4,149 ) (12,365 ) 66 % Consolidated net income $
7,536 $ 7,967 (5 )%
Atmos Energy
Corporation
Financial Highlights, continued
(Unaudited)
Discontinued
Operations
Three Months EndedSeptember 30
Year EndedSeptember 30
(000s) 2013 2012 2013 2012 Operating revenues $ — $
11,596 $ 37,962 $ 114,703 Purchased gas cost — 4,966
21,464 62,902 Gross profit — 6,630 16,498 51,801
Operating expenses — 4,105 5,858 24,174
Operating income — 2,525 10,640 27,627 Other nonoperating income
— 106 548 611 Income from discontinued
operations before income taxes — 2,631 11,188 28,238 Income tax
expense — 727 3,986 10,066 Income from
discontinued operations — 1,904 7,202 18,172 Gain on sale of
discontinued operations, net of tax — 6,349
5,294 6,349 Net income from discontinued operations $ — $
8,253 $ 12,496 $ 24,521
Atmos Energy
Corporation
Financial Highlights, continued
(Unaudited)
Condensed Balance
Sheets
September 30, September 30, (000s) 2013
2012 Net property, plant and equipment $ 6,030,655 $ 5,475,604 Cash
and cash equivalents 66,199 64,239 Accounts receivable, net 301,992
234,526 Gas stored underground 244,741 256,415 Other current assets
70,334 272,782 Total current assets 683,266 827,962
Goodwill and intangible assets 741,484 740,847 Deferred charges and
other assets 484,996 451,262 $ 7,940,401 $ 7,495,675
Shareholders' equity $ 2,580,409 $ 2,359,243 Long-term debt
2,455,671 1,956,305 Total capitalization 5,036,080
4,315,548 Accounts payable and accrued liabilities 241,611 215,229
Other current liabilities 368,891 489,665 Short-term debt 367,984
570,929 Current maturities of long-term debt — 131
Total current liabilities 978,486 1,275,954 Deferred income taxes
1,164,053 1,015,083 Deferred credits and other liabilities
761,782 889,090 $ 7,940,401 $ 7,495,675
Atmos Energy Corporation
Financial Highlights, continued
(Unaudited)
Condensed Statements
of Cash Flows
Year EndedSeptember 30
(000s) 2013 2012
Cash
flows from operating activities Net income $ 243,194 $ 216,717
Asset impairment — 5,288 Gain on sale of discontinued operations
(8,203 ) (9,868 ) Depreciation and amortization 237,607 246,577
Deferred income taxes 141,336 104,319 Other 23,407 26,876 Changes
in assets and liabilities (24,214 ) (2,992 ) Net cash
provided by operating activities 613,127 586,917
Cash flows from
investing activities Capital expenditures (845,033 ) (732,858 )
Proceeds from the sale of discontinued operations 153,023 128,223
Other, net (4,904 ) (4,625 ) Net cash used in
investing activities (696,914 ) (609,260 )
Cash flows from
financing activities Net increase (decrease) in short-term debt
(208,070 ) 354,141 Net proceeds from issuance of long-term debt
493,793 — Settlement of Treasury lock agreements (66,626 ) —
Repayment of long-term debt (131 ) (257,034 ) Cash dividends paid
(128,115 ) (125,796 ) Repurchase of common stock — (12,535 )
Repurchase of equity awards (5,150 ) (5,219 ) Issuance of common
stock 46 1,606 Net cash provided by
(used in) financing activities 85,747 (44,837
) Net increase (decrease) in cash and cash equivalents 1,960
(67,180 ) Cash and cash equivalents at beginning of period
64,239 131,419 Cash and cash equivalents at
end of period $ 66,199 $ 64,239
Three Months EndedSeptember 30
Year EndedSeptember 30
Statistics,
including discontinued operations
2013 2012 2013 2012 Consolidated
natural gas distribution throughput (MMcf as metered) 51,632 58,641
397,037 390,983 Consolidated regulated transmission and storage
transportation volumes (MMcf) 132,142 133,186 467,178 466,527
Consolidated nonregulated delivered gas sales volumes (MMcf) 77,878
81,256 343,669 351,628 Natural gas distribution meters in service
3,011,980 3,116,589 3,011,980 3,116,589 Natural gas distribution
average cost of gas $ 5.36 $ 4.13 $ 4.91 $ 4.64 Nonregulated net
physical position (Bcf) 12.0 18.8 12.0 18.8
Atmos Energy CorporationSusan Giles,
972-855-3729
Atmos Energy (NYSE:ATO)
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