UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (USD $) | |||
In Millions | Sep. 30, 2009
| Dec. 31, 2008
| Sep. 30, 2008
|
Current assets | |||
Cash and cash equivalents | $21 | $16 | $11 |
Inventories, net (Note 1) | 651 | 663 | 811 |
Receivables | |||
Energy marketing receivables (Note 1) | 216 | 549 | 535 |
Gas, unbilled and other receivables | 145 | 472 | 206 |
Less allowance for uncollectible accounts | 16 | 16 | 17 |
Total receivables | 345 | 1,005 | 724 |
Derivative financial instruments - current portion (Note 2 and Note 3) | 146 | 207 | 172 |
Unrecovered pipeline replacement program costs - current portion (Note 1) | 40 | 41 | 40 |
Unrecovered environmental remediation costs - current portion (Note 1) | 13 | 18 | 20 |
Other current assets | 102 | 92 | 162 |
Total current assets | 1,318 | 2,042 | 1,940 |
Long-term assets and other deferred debits | |||
Property, plant and equipment | 5,791 | 5,500 | 5,377 |
Less accumulated depreciation | 1,761 | 1,684 | 1,651 |
Property, plant and equipment-net | 4,030 | 3,816 | 3,726 |
Goodwill | 418 | 418 | 418 |
Unrecovered pipeline replacement program costs (Note 1) | 169 | 196 | 202 |
Unrecovered environmental remediation costs (Note 1) | 142 | 125 | 124 |
Derivative financial instruments (Note 2 and Note 3) | 31 | 38 | 16 |
Other | 75 | 75 | 78 |
Total long-term assets and other deferred debits | 4,865 | 4,668 | 4,564 |
Total assets | 6,183 | 6,710 | 6,504 |
Current liabilities | |||
Short-term debt (Note 6) | 310 | 866 | 769 |
Energy marketing trade payables (Note 1) | 245 | 539 | 568 |
Accounts payable - trade | 155 | 202 | 181 |
Accrued expenses | 102 | 113 | 83 |
Accrued pipeline replacement program costs - current portion (Note 1) | 55 | 49 | 43 |
Customer deposits | 43 | 50 | 39 |
Derivative financial instruments - current portion (Note 2 and Note 3) | 27 | 50 | 34 |
Accrued environmental remediation liabilities - current portion (Note 1 and Note 7) | 21 | 17 | 16 |
Other current liabilities | 86 | 97 | 89 |
Total current liabilities | 1,044 | 1,983 | 1,822 |
Long-term liabilities and other deferred credits | |||
Long-term debt (Note 6) | 1,975 | 1,675 | 1,675 |
Accumulated deferred income taxes | 644 | 571 | 625 |
Accumulated removal costs (Note 1) | 194 | 178 | 176 |
Accrued pension obligations (Note 4) | 187 | 199 | 43 |
Accrued environmental remediation liabilities (Note 1 and Note 7) | 109 | 89 | 89 |
Accrued pipeline replacement program costs (Note 1) | 100 | 140 | 152 |
Accrued postretirement benefit costs (Note 4) | 41 | 46 | 19 |
Derivative financial instruments (Note 2 and Note 3) | 4 | 6 | 8 |
Other long-term liabilities and other deferred credits | 138 | 139 | 142 |
Total long-term liabilities and other deferred credits | 3,392 | 3,043 | 2,929 |
Total liabilities and other deferred credits | 4,436 | 5,026 | 4,751 |
Equity | |||
AGL Resources Inc. common shareholders' equity, $5 par value 750,000,000 shares authorized | 1,719 | 1,652 | 1,724 |
Noncontrolling interest (Note 5) | 28 | 32 | 29 |
Total equity | 1,747 | 1,684 | 1,753 |
Total liabilities and equity | $6,183 | $6,710 | $6,504 |
Parenthetical Information for S
Parenthetical Information for Statements of Financial Position (USD $) | |||
Sep. 30, 2009
| Dec. 31, 2008
| Sep. 30, 2008
| |
Common Stock, par value | 5 | 5 | 5 |
Common Stock, shares authorized | 750,000,000 | 750,000,000 | 750,000,000 |
1_UNAUDITED CONDENSED CONSOLIDA
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | ||||
In Millions, except Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Operating revenues | $307 | $539 | $1,679 | $1,995 |
Operating expenses | ||||
Cost of gas | 99 | 261 | 840 | 1,193 |
Operation and maintenance | 115 | 104 | 359 | 337 |
Depreciation and amortization | 40 | 38 | 118 | 112 |
Taxes other than income taxes | 10 | 10 | 34 | 33 |
Total operating expenses | 264 | 413 | 1,351 | 1,675 |
Operating income | 43 | 126 | 328 | 320 |
Other income | 2 | 2 | 7 | 6 |
Interest expense, net | (26) | (29) | (75) | (85) |
Earnings before income taxes | 19 | 99 | 260 | 241 |
Income tax expense | 7 | 39 | 92 | 86 |
Net income | 12 | 60 | 168 | 155 |
Less net (loss) income attributable to the noncontrolling interest (Note 5) | 0 | (5) | 17 | 12 |
Net income attributable to AGL Resources Inc. | $12 | $65 | $151 | $143 |
Per common share data (Note 1) | ||||
Basic earnings per common share attributable to AGL Resources Inc. common shareholders | 0.16 | 0.85 | 1.97 | 1.87 |
Diluted earnings per common share attributable to AGL Resources Inc. common shareholders | 0.16 | 0.85 | 1.97 | 1.87 |
Cash dividends declared per common share | 0.43 | 0.42 | 1.29 | 1.26 |
Weighted-average number of common shares outstanding (Note 1) | ||||
Basic | 76.9 | 76.4 | 76.7 | 76.2 |
Diluted | 77.2 | 76.6 | 76.9 | 76.5 |
2_UNAUDITED CONDENSED CONSOLIDA
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (USD $) | ||||||
In Millions, except Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 | Dec. 31, 2008
| Dec. 31, 2007
|
AGL Resources Inc. Common Shareholders Equity, Beginning Balance | $1,684 | $1,708 | ||||
Net income | 12 | 60 | 168 | 155 | ||
Other comprehensive income (loss) | 4 | 0 | (1) | (1) | ||
Dividends on common stock | (96) | (93) | ||||
Distributions to noncontrolling interest | (20) | (30) | ||||
Issuance of treasury shares, amount | 6 | 7 | ||||
Stock-based compensation expense (net of taxes) (Note 1) | 6 | 7 | ||||
AGL Resources Inc. Common Shareholders Equity, Ending Balance | 1,747 | 1,753 | 1,747 | 1,753 | 1,684 | 1,708 |
Common Stock [Member] | ||||||
AGL Resources Inc. Common Shareholders Equity, Beginning Balance | 390 | 390 | ||||
Common stock shares, Beginning Balance | 76,900,000 | 76,400,000 | ||||
Issuance of treasury shares, shares | 500,000 | 400,000 | ||||
Common stock shares, Ending Balance | 77,400,000 | 76,800,000 | 77,400,000 | 76,800,000 | 76,900,000 | 76,400,000 |
AGL Resources Inc. Common Shareholders Equity, Ending Balance | 390 | 390 | 390 | 390 | 390 | 390 |
Accumulated Other Comprehensive Income [Member] | ||||||
AGL Resources Inc. Common Shareholders Equity, Beginning Balance | (134) | (13) | ||||
Other comprehensive income (loss) | 0 | (1) | ||||
AGL Resources Inc. Common Shareholders Equity, Ending Balance | (134) | (14) | (134) | (14) | (134) | (13) |
Additional Paid-in Capital [Member] | ||||||
AGL Resources Inc. Common Shareholders Equity, Beginning Balance | 676 | 667 | ||||
Issuance of treasury shares, amount | (6) | (1) | ||||
Stock-based compensation expense (net of taxes) (Note 1) | 6 | 7 | ||||
AGL Resources Inc. Common Shareholders Equity, Ending Balance | 676 | 673 | 676 | 673 | 676 | 667 |
Retained Earnings [Member] | ||||||
AGL Resources Inc. Common Shareholders Equity, Beginning Balance | 763 | 680 | ||||
Net income | 151 | 143 | ||||
Dividends on common stock | (99) | (96) | ||||
Issuance of treasury shares, amount | (4) | (4) | ||||
AGL Resources Inc. Common Shareholders Equity, Ending Balance | 811 | 723 | 811 | 723 | 763 | 680 |
Treasury Stock [Member] | ||||||
AGL Resources Inc. Common Shareholders Equity, Beginning Balance | (43) | (63) | ||||
Dividends on common stock | 3 | 3 | ||||
Issuance of treasury shares, amount | 16 | 12 | ||||
AGL Resources Inc. Common Shareholders Equity, Ending Balance | (24) | (48) | (24) | (48) | (43) | (63) |
Noncontrolling Interest [Member] | ||||||
AGL Resources Inc. Common Shareholders Equity, Beginning Balance | 32 | 47 | ||||
Net income | 17 | 12 | ||||
Other comprehensive income (loss) | (1) | 0 | ||||
Distributions to noncontrolling interest | (20) | (30) | ||||
AGL Resources Inc. Common Shareholders Equity, Ending Balance | $28 | $29 | $28 | $29 | $32 | $47 |
3_Parenthetical Information for
Parenthetical Information for Statements of Equity (USD $) | ||
9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 | |
Dividends on common stock, per share | 1.29 | 1.26 |
4_UNAUDITED CONDENSED CONSOLIDA
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | ||||
In Millions | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Comprehensive income attributable to AGL Resources Inc. (net of tax) | ||||
Net income attributable to AGL Resources Inc. | $12 | $65 | $151 | $143 |
Derivative financial instruments unrealized (losses) gains arising during the period | (1) | (1) | (12) | 3 |
Reclassification of derivative financial instruments realized losses (gains) included in net income | 4 | 1 | 12 | (4) |
Other comprehensive income (loss) | 3 | 0 | 0 | (1) |
Comprehensive income (Note 1) | 15 | 65 | 151 | 142 |
Comprehensive income (loss) attributable to noncontrolling interest (net of tax) | ||||
Net income (loss) attributable to noncontrolling interest | 0 | (5) | 17 | 12 |
Derivative financial instruments unrealized (losses) gains arising during the period | 0 | 1 | (6) | 3 |
Reclassification of derivative financial instruments realized losses (gains) included in net income | 1 | (1) | 5 | (3) |
Other comprehensive income (loss) | 1 | 0 | (1) | 0 |
Comprehensive income (loss) (Note 1) | 1 | (5) | 16 | 12 |
Total comprehensive income (net of tax) | ||||
Net income | 12 | 60 | 168 | 155 |
Derivative financial instruments unrealized (losses) gains arising during the period | (1) | 0 | (18) | 6 |
Reclassification of derivative financial instruments realized losses (gains) included in net income | 5 | 0 | 17 | (7) |
Other comprehensive income (loss) | 4 | 0 | (1) | (1) |
Comprehensive income (Note 1) | $16 | $60 | $167 | $154 |
5_UNAUDITED CONDENSED CONSOLIDA
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||
In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Cash flows from operating activities | ||
Net income | $168 | $155 |
Depreciation and amortization | 118 | 112 |
Deferred income taxes | 62 | 66 |
Change in derivative financial instrument assets and liabilities | 43 | (86) |
Gas, unbilled and other receivables | 327 | 202 |
Energy marketing receivables and energy marketing trade payables, net | 39 | 53 |
Inventories | 12 | (260) |
Gas and trade payables | (47) | 9 |
Other - net | (36) | (79) |
Net cash flow provided by operating activities | 686 | 172 |
Cash flows from investing activities | ||
Payments to acquire, property, plant and equipment | (314) | (254) |
Net cash flow used in investing activities | (314) | (254) |
Cash flows from financing activities | ||
Issuance of senior notes | 300 | 0 |
Net payments and borrowings of short-term debt | (556) | 189 |
Dividends paid on common shares | (96) | (93) |
Distribution to noncontrolling interest | (20) | (30) |
Payments of long-term debt | 0 | (161) |
Issuance of variable rate gas facility revenue bonds | 0 | 161 |
Issuance of treasury shares and other | 5 | 8 |
Net cash flow (used in) provided by financing activities | (367) | 74 |
Net increase (decrease) in cash and cash equivalents | 5 | (8) |
Cash and cash equivalents at beginning of period | 16 | 19 |
Cash and Cash equivalents at end of period | 21 | 11 |
Cash paid during the period for | ||
Interest | 74 | 88 |
Income taxes | $50 | $27 |
Accounting Policies and Methods
Accounting Policies and Methods of Application | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Accounting Policies and Methods of Application | Note 1 - Accounting Policies and Methods of Application General AGL Resources Inc. is an energy services holding company that conducts substantially all of its operations through its subsidiaries. Unless the context requires otherwise, references to we, us, our, or the company mean consolidated AGL Resources Inc. and its subsidiaries (AGL Resources). The year-end condensed statement of financial position data was derived from our audited financial statements, but does not include all disclosures required by GAAP. We have prepared the accompanying unaudited condensed consolidated financial statements under the rules of the SEC. Under such rules and regulations, we have condensed or omitted certain information and notes normally included in financial statements prepared in conformity with GAAP. However, the condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are, in the opinion of management, necessary for a fair presentation of our financial results for the interim periods. For a glossary of key terms, see page 3. You should read these condensed consolidated financial statements in conjunction with our recast consolidated financial statements and related notes as filed on Form 8-K with the SEC on July 13, 2009, and in our Form 10-K for the year ended December 31, 2008, filed with the SEC on February 5, 2009. Due to the seasonal nature of our business, our results of operations for the three and nine months ended September 30, 2009 and 2008, and our financial condition as of December 31, 2008, and September 30, 2009 and 2008, are not necessarily indicative of the results of operations and financial condition to be expected as of or for any other period. Basis of Presentation Our condensed consolidated financial statements include our accounts, the accounts of our majority-owned and controlled subsidiaries and the accounts of variable interest entities for which we are the primary beneficiary. This means that our accounts are combined with our subsidiaries accounts. We have eliminated any intercompany profits and transactions in consolidation; however, we have not eliminated intercompany profits when such amounts are probable of recovery under the affiliates rate regulation process. Certain amounts from prior periods have been reclassified and revised to conform to the current period presentation. Use of Accounting Estimates The preparation of our financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosures of contingent assets and liabilities. We based our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, and we evaluate our estimates on an ongoing basis. Each of our estimates involves complex situations requiring a high degree of judgment either in the application and interpretation of existing financial accounting literature or in the development of estimates that impact our financial statements. The most significant estimates include our PRP accruals, ERC liabil |
Fair Value Measurements
Fair Value Measurements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Fair Value Measurements | Note 2 - Fair Value Measurements The carrying value of cash and cash equivalents, receivables, accounts payable, short-term debt, other current assets and liabilities, derivative financial instrument assets, derivative financial instrument liabilities and accrued interest approximate fair value. New authoritative guidance related to fair value measurements and disclosures was effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. In December 2007, the FASB provided a one-year deferral of the guidance for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value on a recurring basis, at least annually. We adopted this guidance on January 1, 2008, for our financial assets and liabilities, which primarily consist of derivatives we record in accordance with the guidance related to derivatives and hedging. We adopted the guidance for our nonfinancial assets and liabilities on January 1, 2009, which had no impact to our condensed consolidated results of operations, cash flows or financial condition. In August 2009, the FASB updated this guidance to provide clarity on the methodologies and disclosures for fair value measurement estimates of liabilities that do not have a quoted price in an active market, level 3 liabilities (refer to Level 3 discussion contained in this Note). Any revisions due to a change in valuation technique, or its application, are to be accounted for as a change in accounting method. Disclosure is required for any change in valuation technique or related inputs resulting from the application of this update and the total effect would need to be quantified, if practicable. This update is effective for reporting periods ending after September 15, 2009, and had no financial impact to our condensed consolidated results of operations, cash flows or financial position. Additional new authoritative guidance related to fair value measurements and disclosures established a two-step process to determine if the market for a financial asset is inactive and a transaction is not distressed. Step 1 provides factors that include, but are not limited to: transaction frequency, varying price quotations, index correlation, liquidity risk premiums, price spread increases and availability of public information. If a company determines the market is inactive, Step 2 must be applied. In Step 2 an entity must presume that a quoted price is associated with a distressed transaction unless there was sufficient time before the measurement date to allow for usual and customary marketing activities, including multiple bidders. This guidance is effective for interim and annual periods ending after June 15, 2009. We adopted this guidance in the second quarter of 2009. Currently, this guidance does not affect us, as our financial assets are traded in active markets. As defined in authoritative guidance related to fair value measurements and disclosures, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at |
Derivative Financial Instrument
Derivative Financial Instruments | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Derivative Financial Instruments | Note 3 - Derivative Financial Instruments Netting of Cash Collateral with Derivative Financial Instruments under Master Netting Arrangements We maintain accounts with exchange brokers to facilitate financial derivative transactions in support of our energy marketing and risk management activities. Based on the value of our positions in these accounts and the associated margin requirements, we may be required to deposit cash into these broker accounts. We are required to offset this cash collateral with the associated fair value of the derivative financial instruments. Our cash collateral amounts are provided in the following table. As of In millions Sept. 30, 2009 Dec. 31, 2008 Sept. 30, 2008 Right to reclaim cash collateral $ 82 $ 128 $ 53 Obligations to return cash collateral - (4 ) (1 ) Total cash collateral $ 82 $ 124 $ 52 Derivative Financial Instruments Our risk management activities are monitored by our Risk Management Committee, which consists of members of senior management and is charged with reviewing and enforcing our risk management activities and policies. Our use of derivative financial instruments and physical transactions is limited to predefined risk tolerances associated with pre-existing or anticipated physical natural gas sales and purchases and system use and storage. We use the following types of derivative financial instruments and physical transactions to manage natural gas price, interest rate, weather, automobile fuel price and foreign currency risks: forward contracts futures contracts options contracts financial swaps treasury locks weather derivative contracts storage and transportation capacity transactions foreign currency forward contracts Our derivative financial instruments do not contain any material credit-risk-related or other contingent features that could increase the payments for collateral we post in the normal course of business when our financial instruments are in net liability positions. For information on our energy marketing receivables and payables, which do have credit-risk-related or other contingent features, refer to Note 1. Our derivatives are included within operating cash flows as a source of cash totaling $43 million in 2009 and a use of cash totaling $86 million in 2008. We adopted the new authoritative accounting guidance related to derivatives and hedging on January 1, 2009, which requires specific disclosures regarding how and why we use derivative instruments; the accounting for derivative instruments and related hedged items; and how derivative instruments and related hedged items affect our financial position, results of operations and cash flows. As this guidance only requires additional disclosures concerning derivatives and hedging activities, it did not have an impact on our condensed consolidated financial position, results of operations or cash flows. Additional new accounting guidance related to derivatives and hedging requires more detailed disclosures about credit derivatives, including the pote |
Employee Benefit Plans
Employee Benefit Plans | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Employee Benefit Plans | Note 4 - Employee Benefit Plans The authoritative guidance for retirement benefits requires disclosures relating to postretirement benefit plan assets to provide transparency regarding the types of assets and the associated risks within the types of plan assets. The required disclosures include: How investment allocation decisions are made, including information that provides an understanding of investment policies and strategies, The major categories of plan assets, Inputs and valuation techniques used to measure the fair value of plan assets, including those measurements using significant unobservable inputs, on changes in plan assets for the period, and Significant concentrations of risk within plan assets. This accounting guidance is effective for fiscal years ending after December 15, 2009 and requires additional disclosures in our notes to condensed consolidated financial statements, but will not have a material impact on our condensed consolidated financial position,results of operations or cash flows. Pension Benefits We sponsor two tax-qualified defined benefit retirement plans for our eligible employees, the AGL Resources Inc. Retirement Plan and the Employees Retirement Plan of NUI Corporation. A defined benefit plan specifies the amount of benefits an eligible participant eventually will receive using information about the participant. Following are the combined cost components of our two defined pension plans for the periods indicated. Three months ended September 30, In millions 2009 2008 Service cost $ 2 $ 2 Interest cost 7 7 Expected return on plan assets (6 ) (9 ) Amortization of prior service cost (1 ) - Recognized actuarial loss 2 - Net pension benefit cost $ 4 $ - Nine months ended September 30, In millions 2009 2008 Service cost $ 6 $ 6 Interest cost 20 20 Expected return on plan assets (21 ) (25 ) Amortization of prior service cost (2 ) (1 ) Recognized actuarial loss 7 2 Net pension benefit cost $ 10 $ 2 Our employees do not contribute to these retirement plans. We fund the plans by contributing at least the minimum amount required by applicable regulations and as recommended by our actuary. However, we may also contribute in excess of the minimum required amount. We calculate the minimum amount of funding using the projected unit credit cost method. The Pension Protection Act (the Act) of 2006 contained new funding requirements for single employer defined benefit pension plans. The Act established a 100% funding target for plan years beginning after December 31, 2007. However, a delayed effective date of 2011 may apply if the pension plan meets the following targets: 92% funded in 2008; 94% funded in 2009; and 96% funded in 2010. In December 2008, the Worker, Retiree and Employer Recovery Act of 2008 allowed us to measure our 2008 and 2009 funding target at 92%. In the first nine months of 2009, we contributed $21 million to our qualified pension plans and we c |
Variable Interest Entity
Variable Interest Entity | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Variable Interest Entity | Note 5 Variable Interest Entity In June 2009, the FASB issued an amendment to the guidance related to transfers and servicing of financial assets and interests in a variable interest entity (VIE) that requires improved disclosures about transfers of financial assets and removes the exception from applying the guidance related to consolidations specifically for VIEs to qualifying special purpose entities. The amendment to the guidance will be effective for us on January 1, 2010 and it will have no effect on our consolidated results of operations, cash flows or financial position. In June 2009, the FASB issued new consolidation guidance for a VIE. The guidance requires a company to assess the determination of the primary beneficiary of a VIE based on whether the company has the power to direct matters that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to receive benefits of the VIE. In addition, the guidance requires ongoing reassessments of whether a company is the primary beneficiary of a VIE. The guidance will be effective for us on January 1, 2010. Earlier application is prohibited. We are currently evaluating the impact of this guidance on our consolidated results of operations, cash flows and financial position. Noncontrolling Interests We currently own a noncontrolling 70% financial interest in SouthStar, a joint venture with Piedmont who owns the remaining 30%. Our 70% interest is noncontrolling because all significant management decisions require approval by both owners. Although our ownership interest in the SouthStar partnership is 70%, under an amended and restated joint venture agreement executed in March 2004, SouthStar's earnings are currently allocated 75% to us and 25% to Piedmont except for earnings related to customers in Ohio and Florida, which are currently allocated 70% to us and 30% to Piedmont. We are the primary beneficiary of SouthStars activities and have determined that SouthStar is a VIE as defined by the authoritative guidance related to consolidations, which requires us to consolidate the VIE. The assets, liabilities, and noncontrolling interests of a consolidated VIE are accounted for in our condensed consolidated financial statements as if the entity were consolidated based on voting interests. We determined that SouthStar was a VIE because our equal voting rights with Piedmont are not proportional to our economic obligation to absorb 75% of any losses or residual returns from SouthStar, except those losses and returns related to customers in Ohio and Florida. In addition, SouthStar obtains substantially all its transportation capacity for delivery of natural gas through our wholly-owned subsidiary, Atlanta Gas Light. On January 1, 2009, we adopted additional authoritative guidance relating to consolidations, and applied the presentation and disclosure requirements retrospectively for all periods presented. The additional guidance does not change the requirements of prior guidance but requires that the noncontrolling interest be reported as a separate component of equity on our condensed consolidated statements of financial posit |
Debt
Debt | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Debt | Note 6 - Debt Our issuance of various securities, including long-term and short-term debt, is subject to customary approval or authorization by, or filings with, state and federal regulatory bodies, including state public service commissions, the SEC and the FERC pursuant to the Energy Policy Act of 2005. The following table shows the carrying amounts of our long-term debt included in our condensed consolidated statements of financial position. We estimate the fair value using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality and risk profile.In determining the market interest yield curve, we considered our currently assigned ratings for unsecured debt of BBB+ by SP, Baa1 by Moodys and A- by Fitch. For more information on our debt, see Note 6 in our recast consolidated financial statements and related notes as filed on Form 8-K with the SEC on July 13, 2009, and in our Form 10-K for the year ended December 31, 2008, filed with the SEC on February 5, 2009. Outstanding as of In millions Year(s) due Weighted average interest rate (1) Interest rate (2) September 30, 2009 December 31, 2008 September 30, 2008 Short-term debt Commercial paper 2009 0.8 % 0.6 % $ 309 $ 273 $ 198 Capital leases 2009 4.9 4.9 1 1 1 Credit Facility - - - - 500 485 SouthStar line of credit - - - - 75 55 Sequent lines of credit (3) - - - - 17 20 Pivotal Utility line of credit (3) - - - - - 10 Total short-term debt 0.9 % 0.6 % $ 310 $ 866 $ 769 Long-term debt - net of current portion Senior notes 2011-2034 5.9 % 4.5-7.1 % $ 1,575 $ 1,275 $ 1,275 Gas facility revenue bonds 2022-2033 1.2 0.2-5.3 200 200 200 Medium-term notes 2012-2027 7.8 6.6-9.1 196 196 196 Capital leases 2013 4.9 4.9 4 4 4 Total long-term debt(4) 5.5 % 5.5 % $ 1,975 $ 1,675 $ 1,675 Total debt 4.6 % 4.8 % $ 2,285 $ 2,541 $ 2,444 (1) For the nine months ended September 30, 2009. (2) As of September 30, 2009. (3) Sequents $25 million line of credit expired in June 2009. Pivotal Utilitys $15 million line of credit expired in October 2008. (4) Our estimated fair value was $2,116 million as of September 30, 2009, $1,647 million as of December 31, 2008 and $1,671 million as of September 30, 2008. In August 2009, AGL Capital issued $300 million of 10-year senior notes at an interest rate of 5.25%. The net proceeds from the offering were approximately $297 million. We used the net proceeds from the sale of the senior notes to repay a portion of our short-term debt. Default Events Our |
Commitments and Contingencies
Commitments and Contingencies | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Commitments and Contingencies | Note 7 - Commitments and Contingencies Contractual Obligations and Commitments We have incurred various contractual obligations and financial commitments in the normal course of our operating and financing activities that are reasonably likely to have a material effect on liquidity or the availability of capital resources. Contractual obligations include future cash payments required under existing contractual arrangements, such as debt and lease agreements. These obligations may result from both general financing activities and from commercial arrangements that are directly supported by related revenue-producing activities. As we do for other subsidiaries, we provide guarantees to certain gas suppliers for SouthStar in support of payment obligations. There were no significant changes to our contractual obligations described in Note 7 to our recast consolidated financial statements and related notesas filed on Form 8-K with the SEC on July 13, 2009, and in our Form 10-K for the year ended December 31, 2008, filed with the SEC on February 5, 2009. Contingent financial commitments, such as financial guarantees, represent obligations that become payable only if certain predefined events occur and include the nature of the guarantee and the maximum potential amount of future payments that could be required of us as the guarantor. The following table illustrates our contingent financial commitments as of September 30, 2009. Commitments due before December 31, In millions Total 2009 2010 thereafter Standby letters of credit and performance and surety bonds $ 26 $ 9 $ 17 Litigation We are involved in litigation arising in the normal course of business. The ultimate resolution of such litigation is not expected to have a material adverse effect on our condensed consolidated financial position, results of operations or cash flows. Information on the Jefferson Island Storage Hub, LLC vs. State of Louisiana litigation is described in Note 7 to our recast consolidated financial statements and related notes as filed on Form 8-K with the SEC on July 13, 2009, and in our Form 10-K for the year ended December 31, 2008, filed with the SEC on February 5, 2009. In April 2009, the trial court ruled that the legislation that restricted Jefferson Islands ability to use water from the Chicot aquifer to expand its existing storage facility is unconstitutional and invalid. In August 2009, Jefferson Island announced that it had negotiated a tentative agreement with the state of Louisiana that, subject to approval, would resolve the pending lawsuit between the parties over a disputed mineral lease. A finalized agreement will enable Jefferson Island to resume its plan to expand the existing natural gas storage facility. The state Mineral Board must approve the agreement in order for it to be valid, and a decision could come during the fourth quarter of 2009. The parties also jointly requested that the trial court delay the previously scheduled September 2009 trial date which would have resolved Jefferson Islands claim that it is authorized to expand the facility under its mineral lease while |
Segment Information
Segment Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Segment Information | Note 8 - Segment Information We are an energy services holding company whose principal business is the distribution of natural gas in six states - Florida, Georgia, Maryland, New Jersey, Tennessee and Virginia. We generate nearly all our operating revenues through the sale, distribution, transportation and storage of natural gas. We are involved in several related and complementary businesses, including retail natural gas marketing to end-use customers primarily in Georgia; natural gas asset management and related logistics activities for each of our utilities as well as for nonaffiliated companies; natural gas storage arbitrage and related activities; and the development and operation of high-deliverability natural gas storage assets. We manage these businesses through four operating segments distribution operations, retail energy operations, wholesale services and energy investments and a nonoperating corporate segment which includes intercompany eliminations. We evaluate segment performance based primarily on the non-GAAP measure of EBIT, which includes the effects of corporate expense allocations. EBIT is a non-GAAP measure that includes operating income and other income and expenses. Items we do not include in EBIT are financing costs, including interest and debt expense and income taxes, each of which we evaluate on a consolidated level. We believe EBIT is a useful measurement of our performance because it provides information that can be used to evaluate the effectiveness of our businesses from an operational perspective, exclusive of the costs to finance those activities and exclusive of income taxes, neither of which is directly relevant to the efficiency of those operations. You should not consider EBIT an alternative to, or a more meaningful indicator of, our operating performance than operating income or net income attributable to AGL Resources Inc. as determined in accordance with GAAP. In addition, our EBIT may not be comparable to a similarly titled measure of another company. The following table contains the reconciliations of EBIT to operating income, earnings before income taxes and net income attributable to AGL Resources Inc. for the three and nine months ended September 30, 2009 and 2008. Three months ended September 30, In millions 2009 2008 Operating revenues $ 307 $ 539 Operating expenses 264 413 Operating income 43 126 Other income 2 2 EBIT 45 128 Interest expense, net (26 ) (29 ) Earnings before income taxes 19 99 Income tax expense 7 39 Net income 12 60 Net loss attributable to the noncontrolling interest - (5 ) Net income attributable to AGL Resources Inc. $ 12 $ 65 Nine months ended September 30, In millions 2009 2008 Operating revenues $ 1,679 $ 1,995 Operating expenses 1,351 1,675 Operating income 328 320 Other income 7 6 EBIT 335 326 Interest expense, net (75 ) (85 ) Earnings before income taxes 260 |
Document Information
Document Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Document Information Text Block | |
Document Type | 10-Q |
Document Period End Date | 2009-09-30 |
Amendment Flag | false |
Entity Information
Entity Information (USD $) | ||
9 Months Ended
Sep. 30, 2009 | Jun. 30, 2009
| |
Entity Text Block | ||
Entity Registrant Name | AGL RESOURCES INC | |
Entity Central Index Key | 0001004155 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well Known Seasoned Issuer | Yes | |
Entity Voluntary Filers | Yes | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $2,458,113,574 | |
Entity Common Stock Shares Outstanding | 77,299,169 |