UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 1-10042
ATMOS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 75-1743247
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1800 Three Lincoln Centre
5430 LBJ Freeway, Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
(214) 934-9227
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
Number of shares outstanding of each of the issuer's classes of
common stock, as of February 1, 1996.
Class Shares Outstanding
----- ------------------
No Par Value 15,921,562
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
ATMOS ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, September 30,
1995 1995
------------ ------------
ASSETS (Unaudited)
Property, plant and equipment $615,366 $595,359
Less accum. depreciation and amort. 242,728 232,107
-------- --------
Net property, plant and equipment 372,638 363,252
Current assets
Cash and cash equivalents 4,624 2,294
Accounts receivable, net 68,802 25,690
Inventories 6,910 6,747
Gas stored underground 8,280 10,758
Prepayments 2,278 2,747
-------- --------
Total current assets 90,894 48,236
Deferred charges and other assets 35,961 34,295
-------- --------
$499,493 $445,783
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity
Common stock outstanding: 15,905,570
shares at 12/31/95 and 15,519,112
shares at 9/30/95 $ 80 $ 78
Additional paid-in capital 108,252 106,496
Retained earnings 57,792 51,704
-------- --------
Total shareholders' equity 166,124 158,278
Long-term debt 125,303 131,303
-------- --------
Total capitalization 291,427 289,581
Current liabilities
Current maturities of long-term debt 13,000 7,000
Notes payable to banks 40,700 33,500
Accounts payable 53,955 24,945
Taxes payable 5,605 1,926
Customers' deposits 10,011 9,343
Other current liabilities 12,744 10,641
-------- --------
Total current liabilities 136,015 87,355
Deferred income taxes 33,913 33,120
Deferred credits and other liabilities 38,138 35,727
-------- --------
$499,493 $445,783
======== ========
See accompanying notes to consolidated financial statements.
- 2 -
ATMOS ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
Three months ended Twelve months ended
December 31, December 31,
----------------- -------------------
1995 1994 1995 1994
-------- -------- -------- --------
Operating revenues $130,468 $117,848 $448,440 $472,155
Purchased gas cost 79,743 74,366 274,187 308,857
-------- -------- -------- -------
Gross profit 50,725 43,482 174,253 163,298
Operating expenses
Operation 21,721 19,808 85,344 88,541
Maintenance 1,075 1,004 4,347 5,362
Depreciation and
amortization 5,591 5,160 21,172 19,334
Taxes, other than
income 4,198 4,078 16,731 16,349
Income taxes 5,195 3,646 11,123 7,762
-------- -------- -------- --------
Total operating
expenses 37,780 33,696 138,717 137,348
-------- ------- -------- --------
Operating income 12,945 9,786 35,536 25,950
Other income 160 139 238 554
Interest charges, net 3,872 3,449 14,144 12,437
-------- -------- -------- --------
Net income $ 9,233 $ 6,476 $ 21,630 $ 14,067
======== ======== ======== ========
Net income per share $ .59 $ .42 $ 1.40 $ .92
======== ======== ======== ========
Cash dividends per
share $ .24 $ .23 $ .93 $ .89
======== ======== ======== ========
Average shares
outstanding 15,674 15,331 15,503 15,266
======== ======== ======== ========
See accompanying notes to consolidated financial statements.
- 3 -
ATMOS ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Three months ended
December 31,
1995 1994
-------- --------
Cash Flows From Operating Activities
Net income $ 9,233 $ 6,476
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization
Charged to depreciation and
amortization 5,591 5,160
Charged to other accounts 120 904
Deferred income taxes (benefit) 793 (393)
Other 98 1,488
-------- --------
15,835 13,635
Net change in operating assets and
liabilities (4,221) 2,622
-------- --------
Net cash provided by operating
activities 11,614 16,257
Cash Flows From Investing Activities
Retirements of property, plant and
equipment 4,064 (34)
Capital expenditures (19,161) (13,464)
-------- --------
Net cash used in investing activities (15,097) (13,498)
Cash Flows From Financing Activities
Net increase (decrease) in notes
payable to banks 7,200 (35,100)
Cash dividends paid (3,739) (3,528)
Issuance of long-term debt - 40,000
Repayment of long-term debt - (4,000)
Issuance of common stock 2,352 823
-------- --------
Net cash provided (used) by financing
activities 5,813 (1,805)
-------- --------
Net increase in cash and cash equivalents 2,330 954
Cash and cash equivalents at beginning
of period 2,294 2,766
-------- --------
Cash and cash equivalents at end
of period $ 4,624 $ 3,720
======== ========
See accompanying notes to consolidated financial statements.
- 4 -
ATMOS ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 1995
1. Unaudited interim financial information
In the opinion of management, all material adjustments necessary
for a fair presentation have been made to the unaudited interim
period financial statements. Such adjustments consisted only of
normal recurring accruals. Because of seasonal and other fac-
tors, the results of operations for the three month period ended
December 31, 1995 are not indicative of expected results of
operations for the year ending September 30, 1996. These interim
financial statements and notes are condensed as permitted by the
instructions to Form 10-Q, and should be read in conjunction with
the audited consolidated financial statements in the 1995 annual
report to shareholders of Atmos Energy Corporation ("Atmos" or
the "Company"). The condensed consolidated balance sheet of
Atmos Energy Corporation, as of December 31, 1995, and the
related condensed consolidated statements of income for the
three-month and twelve-month periods ended December 31, 1995 and
1994, and consolidated statements of cash flows for the three-
month periods ended December 31, 1995 and 1994, included herein
have been subjected to a review by Ernst & Young LLP, the
Company's independent accountants, whose report is included
herein.
Common stock - As of December 31, 1995, the Company had
75,000,000 shares of common stock, no par value (stated at $.005
per share), authorized and 15,905,570 shares outstanding.
2. Business Combination
In November 1995, Atmos acquired by means of a merger, all of the
assets and liabilities of Oceana Heights Gas Company ("Oceana")
of Thibodaux, Louisiana. The transaction was accounted for as a
pooling of interests. The outstanding shares of Oceana capital
stock were converted into 313,411 shares of Atmos common stock
having a market value of $6.4 million. Subsequent to the merger,
the business of Oceana has been operated through the Company's
Trans Louisiana Gas Company division ("Trans La Division"). The
acquisition increased the Trans La Division's customer base by
approximately 9,200 customers, or 13 percent, to over 79,000
customers. Although significant for the Trans La Division's
operations, the acquisition did not have a material impact on the
Company's financial condition and results of operations. The
acquisition transaction and Oceana's operating results for the
quarter ended December 31, 1995 are reflected in the Company's
financial statements for the quarter ended December 31, 1995.
- 5 -
3. Contingencies
On March 15, 1991, suit was filed in the 15th Judicial District
Court of Lafayette Parish, Louisiana, by the "Lafayette Daily
Advertiser" and others against the Trans La Division, Trans
Louisiana Industrial Gas Company, Inc. ("TLIG"), a wholly owned
subsidiary of the Company, and Louisiana Intrastate Gas
Corporation and certain of its affiliates ("LIG"). LIG is the
Company's primary supplier of natural gas in Louisiana and is not
otherwise affiliated with the Company.
The plaintiffs purported to represent a class consisting of all
residential and commercial gas customers in the Trans La
Division's service area. Among other things, the lawsuit alleged
that the defendants violated antitrust laws of the state of
Louisiana by manipulating the cost-of-gas component of the Trans
La Division's gas rate to the purported customer class, thereby
causing such purported class members to pay a higher rate. The
plaintiffs made no specific allegation of an amount of damages.
The defendants brought an appeal to the Louisiana Supreme Court
of rulings by the trial court and the Third Circuit Court of
Appeal which denied defendants' exceptions to the jurisdiction of
the trial court. It was the position of the defendants that the
plaintiffs' claims amount to complaints about the level of gas
rates and should be within the exclusive jurisdiction of the
Louisiana Commission.
On January 19, 1993, the Louisiana Supreme Court issued a
decision reversing in part the lower courts' rulings, dismissing
all of plaintiffs' claims against the defendants which seek
damages due to alleged overcharges and further ruling that all
such claims are within the exclusive jurisdiction of the
Louisiana Commission. Any claims which seek damages other than
overcharges were remanded to the trial court but were stayed
pending the completion of the Louisiana Commission proceeding
referred to below.
The Company has reached a tentative settlement with the
plaintiffs in the context of the Louisiana Commission proceeding
referred to below, which settlement will resolve all outstanding
issues relating to the Company, subject to certain procedural
conditions.
On July 14, 1995, the Louisiana Commission entered an order
approving a settlement with the Company and TLIG in connection
with its investigation of the costs included in the Trans La
Division's purchased gas adjustment component in its rates. The
order exonerated the Company of any wrongdoing or manipulation of
the cost of gas component of its gas rate to residential and
commercial customers. In the settlement, the Company agreed to
refund approximately $541,000 plus interest to the Trans La
Division's customers over a two-year period due to certain issues
related to the calculation of the weighted average cost of gas.
The refund totaling approximately $1,016,000, which includes
- 6 -
interest calculated through October 1, 1995, began in September
1995 and will be credited to customer bills along with interest
that accrues after October 1, 1995. Most of the issues that
generated the refunds arose before Trans Louisiana Gas Company
was acquired by the Company in 1986.
The Greeley Gas Company Division of the Company was named a
defendant in several lawsuits filed as a result of a fire in a
building in Steamboat Springs, Colorado on February 3, 1994. The
plaintiffs claimed that the fire resulted from a leak in a
severed gas service line owned by the Greeley Division. On
January 12, 1996, the jury awarded the plaintiffs an amount
totalling approximately $4.9 million, which amount included both
compensatory and punitive damages. The jury assessed the Company
with liability for all of the damages awarded. The Company has
adequate insurance to cover the damages awarded against the
Company in this matter. The Company is considering an appeal of
the case.
From time to time, claims are made and lawsuits are filed against
the Company arising out of the ordinary business of the Company.
In the opinion of the Company's management, liabilities, if any,
arising from these actions are either covered by insurance,
adequately reserved for by the Company or would not have a
material adverse effect on the financial condition of the
Company.
4. Long-term and short-term debt
At December 31, 1995, the Company had committed, short-term,
unsecured bank credit facilities totaling $90,000,000, all of
which was unused. The Company also had aggregate uncommitted
lines of $140,000,000, of which $99,300,000 was unused at
December 31, 1995.
5. Statements of cash flows
Supplemental disclosures of cash flow information for the three
month periods ended December 31, 1995 and 1994 are presented
below.
Three months ended
December 31,
1995 1994
------ ------
(In thousands)
Cash paid for
Interest $3,987 $4,096
Income taxes 98 -
- 7 -
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
The Board of Directors
Atmos Energy Corporation
We have reviewed the accompanying condensed consolidated balance
sheet of Atmos Energy Corporation as of December 31, 1995, and
the related condensed consolidated statements of income for the
three-month and twelve-month periods ended December 31, 1995 and
1994 and the statements of cash flows for the three-month periods
ended December 31, 1995 and 1994. These financial statements are
the responsibility of the Company's management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, which will be performed for the full year with the
objective of expressing an opinion regarding the financial state-
ments taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the accompanying condensed
consolidated financial statements at December 31, 1995, and for
the three-month and twelve-month periods ended December 31, 1995
and 1994 for them to be in conformity with generally accepted ac-
counting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Atmos
Energy Corporation as of September 30, 1995, and the related
consolidated statements of income, shareholders' equity, and cash
flows for the year then ended (not presented herein) and in our
report dated November 8, 1995, we expressed an unqualified
opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of September 30, 1995, is fairly
stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
ERNST & YOUNG LLP
Dallas, Texas
February 7, 1996
- 8 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction
The Company distributes and sells natural gas to residential,
commercial, industrial and agricultural customers in six states.
Such business is subject to regulation by state and/or local
authorities in each of the states in which the Company operates.
In addition, the Company's business is affected by seasonal
weather patterns, competitive factors within the energy industry,
and economic conditions in the areas that the Company serves.
Revenues and sales volume statistics for the three-month and
twelve-month periods ended December 31, 1995 and 1994 appear on
pages 14 and 15.
Rate Activity
On February 10, 1995, the Company filed with the Kentucky
Commission for a rate increase for its Western Kentucky Gas
Company Division. The filing requested an annual revenue
increase of approximately $7.7 million, or 5.5 percent, to be
effective March 12, 1995. In July 1995 a settlement agreement
was filed with the Kentucky Commission. The Company withdrew
from the settlement on August 31, 1995, after the Kentucky
Commission issued an order that made modifications which the
Company found unacceptable. The Company and all intervenors
filed a revised settlement, which was approved by the Kentucky
Commission without modifications on October 20, 1995, effective
November 1, 1995. The order issued by the Kentucky Commission
authorizes the Company to increase its rates by $2.3 million
annually, and by an additional $1.0 million annually beginning in
March 1996. The settlement includes a decrease in depreciation
rates, recovery of expenses related to adoption of SFAS No. 106
and includes a provision for the Company to begin a three-year
demand-side management pilot program for the 1996-97 heating
season, which could cost up to $450,000 annually, resulting in a
total annual operating income increase of approximately $4.0
million. The Company provides natural gas service to
approximately 168,000 customers in Kentucky.
In September 1994, the Company filed to increase revenues by
approximately $2.6 million for a portion of its Energas Company
service area ("Energas Division"), which affects approximately
217,000 customers and reflects recovery of accrual accounting of
postretirement benefits in accordance with SFAS No. 106. In
November 1994, the Company implemented an annual revenue increase
of approximately $1.5 million affecting approximately 195,000
customers located inside the city limits of towns in this portion
of its Energas Division. Upon approval of the Railroad
Commission of Texas in January 1995, the Company implemented an
annual increase of approximately $.2 million relating to the
22,000 remaining rural customers.
- 9 -
Greeley Gas Company ("GGC") filed a request for an increase in
annual revenues of $4.5 million with the Colorado Public Utility
Commission ("Colorado Commission") in September, 1993. On May 1,
1994, the Company implemented an annual increase of $3.2 million
or 6.9% in Phase I of this proceeding. The Phase I rates reflect
recovery of SFAS No. 106 expenses with external funding,
consistent with the recommended decision of the presiding
administrative law judge. In October 1994, the Colorado
Commission issued its order affirming the increase as set forth
in Phase I. In March 1995, the Greeley Gas Division filed Phase
II in the rate proceeding, which addressed rate structure. In
September 1995 all parties to the proceeding entered into a
stipulation and agreement which became final in November 1995
upon the recommendation by an administrative law judge of the
Colorado Commission.
Effective December 1, 1993, GGC received an annual rate increase
of approximately $2.1 million or 10.6% in its Kansas service
area. The increase reflects SFAS No. 106 expenses with external
funding and a moratorium on rate requests in Kansas until
December 1, 1996.
In September 1992, the Louisiana Public Service Commission
("Louisiana Commission") issued a rate order to the Company's
Trans La Division which included a rate stabilization clause
("RSC") for three years that provided for an annual adjustment to
the Company's rates to reflect changes in expenses, revenues and
invested capital following an annual review. The RSC provided an
opportunity for a return on jurisdictional common equity of
between 11.75% and 12.25%. As a result of the Company's filings
under the RSC, an increase of $730,000 annually or 2% went into
effect on March 1, 1993, an increase of $1.1 million annually or
2.7% went into effect on March 1, 1994, and an increase of $1.1
million annually or 2.0% went into effect on March 6, 1995.
FINANCIAL CONDITION
For the three months ended December 31, 1995 net cash provided by
operating activities totaled $11.6 million compared with $16.3
million net cash provided by operating activities for the three
months ended December 31, 1994. Net operating assets and
liabilities increased $4.2 million for the three months ended
December 31, 1995 compared with an decrease of $2.6 million for
the three months ended December 31, 1994. Due to the seasonal
nature of the natural gas distribution business, large swings in
accounts receivable, accounts payable and inventories of gas in
underground storage will occur when entering and leaving the
winter or heating season.
Major cash flows from investing activities for the three months
ended December 31, 1995 included capital expenditures of $19.2
million compared with $13.5 million for the three months ended
December 31, 1994. The capital expenditures budget for fiscal
1996 is currently $67.6 million, as compared with actual capital
- 10 -
expenditures of $62.9 million in fiscal 1995. Capital projects
planned for 1996 include major expenditures for mains, services,
meters, vehicles and computer equipment. These expenditures will
be financed from internally generated funds and financing
activities.
For the three months ended December 31, 1995, cash flows provided
by financing activities amounted to $5.8 million as compared with
$1.8 million used by financing activities for the three months
ended December 31, 1994. During the quarter, notes payable to
banks increased $7.2 million, as compared with a decrease of
$35.1 million in the quarter ended December 31, 1994, due to
seasonal factors and the refinancing of short-term debt with
proceeds from the issuance of $40.0 million of long-term debt in
the quarter ended December 31, 1994. There was no issuance or
repayment of long-term debt during the quarter ended December 31,
1995. The Company paid $3.7 million in cash dividends during the
three months ended December 31, 1995, compared with dividends of
$3.5 million paid during the three months ended December 31,
1994. This reflects increases in the quarterly dividend rate and
in the number of shares outstanding. In the quarter ended
December 31, 1995, the Company issued 386,458 shares of common
stock including 313,411 shares issued in connection with the
Oceana acquisition.
The Company believes that internally generated funds, its short-
term credit facilities and access to the debt and equity capital
markets will provide necessary working capital and liquidity for
capital expenditures and other cash needs for the remainder of
fiscal 1996. At December 31, 1995 the Company had $90.0 million
in committed short-term credit facilities, all of which was
available for additional borrowing. The committed lines are
renewed or renegotiated at least annually. At December 31, 1995,
the Company also had $140.0 million of uncommitted short-term
lines, of which $99.3 million was unused.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1995 COMPARED WITH THREE MONTHS
ENDED DECEMBER 31, 1994
Operating revenues increased to $130.5 million for the three
months ended December 31, 1995 from $117.8 million for the three
months ended December 31, 1994. The increase in operating
revenues was due to increased gas sales volumes related primarily
to colder weather. The weather for the three months ended
December 31, 1995 was 2% warmer than the 30-year normal but 12%
colder than the weather for the corresponding quarter of the
prior year. Volumes sold increased to 33.0 billion cubic feet
("Bcf") from 28.1 Bcf. Changes in cost of gas are reflected in
regulated sales prices through purchased gas adjustment
mechanisms. The average sales price per thousand cubic feet
("Mcf") sold decreased $.17 to $3.86 while the average cost of
gas per Mcf sold decreased $.22 to $2.42. The decrease in the
average sales price reflects the decreased gas cost, partially
- 11 -
offset by rate increases implemented during the past year.
Recent rate increases include the following: a $2.3 million
annual rate increase in Kentucky effective in November 1995, a
$1.7 million annual increase in West Texas effective in November
1994 and a $1.1 million rate stabilization clause annual increase
in Louisiana effective in March, 1995. Transportation revenues
decreased $1.2 million, due to a decrease of 2.4 Bcf in volumes
transported and a decrease of $.05 in average transportation
revenue per Mcf. The decrease in transportation revenue per Mcf
was related to a change in the mix of transportation services,
which include firm, interruptible and special contracts.
Gross profit increased by 17% to $50.7 million for the three
months ended December 31, 1995, from $43.5 million for the three
months ended December 31, 1994. The primary factor contributing
to the increased gross profit was the increased sales volumes due
to colder weather. Operating expenses, excluding income taxes,
increased approximately 8% to $32.6 million for the three months
ended December 31, 1995 from $30.1 million for the three months
ended December 31, 1994. Factors contributing to the increase
were higher distribution and employee welfare expenses. Income
taxes increased primarily due to higher pre-tax profits.
Operating income increased for the three months ended December
31, 1995 by 32% to $12.9 million from $9.8 million for the three
months ended December 31, 1994. The increase in operating income
resulted from increased gross profit.
Interest charges increased slightly due to higher interest rates
on short-term debt in the three months ended December 31, 1995.
The Company's weighted average short-term interest rate increased
to 6.3% for the quarter ended December 31, 1995, as compared with
5.5% for the quarter ended December 31, 1994.
Net income increased for the three months ended December 31, 1995
by approximately 42% to $9.2 million from $6.5 million for the
three months ended December 31, 1994. This increase primarily
resulted from the increase in operating income. Earnings per
share increased by 40% to $.59. Average shares outstanding
increased 2.2% as compared with the first quarter of fiscal 1995.
Dividends per share increased approximately 4.3% to $.24 due to a
$.01 per share increase in the quarterly dividend rate beginning
with the dividend paid in December 1995.
TWELVE MONTHS ENDED DECEMBER 31, 1995 COMPARED WITH TWELVE MONTHS
ENDED DECEMBER 31, 1994
Operating revenues decreased to $448.4 million for the 12 months
ended December 31, 1995 from $472.2 million for the 12 months
ended December 31, 1994 due to decreased gas cost which is
reflected in revenues, decreased sales to non-weather related
industrial (including agricultural) customers and decreased
transportation volumes. Transportation volumes decreased to 28.0
Bcf from 35.0 Bcf, resulting in a $2.0 million decrease in
transportation revenues. Total sales and transportation volumes
decreased 3% to approximately 142.2 Bcf for the 12 months ended
- 12 -
December 31, 1995 from approximately 146.6 Bcf for the 12 months
ended December 31, 1994. However, the company-wide weather for
calendar year 1995 was 3% colder than for calendar year 1994 but
6% warmer than normal. The Company experienced increased sales
volumes with all weather sensitive customer types in the 12
months ended December 31, 1995. The average sales price per Mcf
sold decreased $.28 to $3.79. The average cost of gas per Mcf
sold decreased $.37 to $2.40. Changes in cost of gas are
reflected in regulated sales prices through purchased gas
adjustment mechanisms.
Gross profit increased by 7% to $174.3 million from $163.3
million for the 12 months ended December 31, 1994. The increase
in gross profit for the 12 months ended December 31, 1995 was due
to colder weather and increased sales volumes. Operating
expenses exclusive of income taxes decreased from $129.6 million
for the 12 months ended December 31, 1994 to $127.6 million for
the 12 months ended December 31, 1995. Factors contributing to
the decrease in operating expenses were decreased distribution,
employee welfare, and pension expense. Income taxes increased
$3.4 million for the 12 months ended December 31, 1995, compared
with the 12 months ended December 31, 1994. The primary reason
was higher pre-tax income. Operating income increased from the
12 months ended December 31, 1994 by 37% to $35.5 million for the
12 months ended December 31, 1995. The increase in operating
income was due to increased gross profit.
Interest charges increased due to higher interest rates on short-
term debt in the 12 months ended December 31, 1995. The
Company's weighted average short-term interest rate increased to
6.8% for the 12 months ended December 31, 1995, as compared with
4.8% for the 12 months ended December 31, 1994.
Net income for the 12 months ended December 31, 1995 was $21.6
million compared with $14.1 million for the 12 months ended
December 31, 1994. The increase in net income resulted primarily
from the increase in operating income. Earnings per share
increased by 52% to $1.40. Average shares outstanding increased
approximately 1.6% as compared with the prior year. Dividends
per share increased approximately 4.5% to $.93.
- 13 -
ATMOS ENERGY CORPORATION
CONSOLIDATED OPERATING STATISTICS
Quarter ended
December 31,
-------------------
1995 1994
------- -------
Average Meters in Service
Residential 582,705 569,354
Commercial 61,086 60,196
Industrial (including agricultural) 19,062 19,475
Public authority and other 5,026 4,957
------- -------
Total 667,879 653,982
Quarter ended 12 Months ended
December 31, December 31,
-------------------- --------------------
1995 1994 1995 1994
-------- -------- -------- --------
Sales Volumes -- MMcf (1)
Residential 16,856 14,205 49,416 47,069
Commercial 6,970 6,097 20,629 19,847
Industrial (including
agricultural) 7,272 6,274 39,044 39,903
Public authority and other 1,876 1,565 5,090 4,782
-------- -------- -------- --------
Total 32,974 28,141 114,179 111,601
Transportation Volumes --
MMcf (1) 7,210 9,640 28,033 34,985
-------- -------- -------- --------
Total Volumes Handled 40,184 37,781 142,212 146,586
======== ======== ======== ========
Operating Revenues (000's)
Gas Revenues
Residential $ 71,553 $ 62,884 $218,834 $225,574
Commercial 27,061 24,674 82,369 85,950
Industrial (including
agricultural) 21,448 19,940 112,323 123,062
Public authority and other 7,123 6,012 19,296 19,968
-------- -------- -------- --------
Total gas revenues 127,185 113,510 432,822 454,554
Transportation Revenues 2,165 3,332 10,544 12,587
Other Revenues 1,118 1,006 5,074 5,014
-------- -------- -------- -------
Total Operating Revenues $130,468 $117,848 $448,440 $472,155
======== ======== ======== ========
Average Gas Sales Revenues per Mcf $ 3.86 $ 4.03 $ 3.79 $ 4.07
Average Transportation Revenue per Mcf $ .30 $ .35 $ .38 $ .36
Cost of Gas per Mcf Sold $ 2.42 $ 2.64 $ 2.40 $ 2.77
<FN>
(1) Volumes are reported as metered in million cubic feet ("MMcf").
- 15 -
ATMOS ENERGY CORPORATION
CONSOLIDATED OPERATING STATISTICS
(Continued)
HEATING DEGREE DAYS (2)
Weather Quarter ended December 31, 12 Months ended December 31,
Service Sensitive -------------------------- ----------------------------
Area Customers % 1995 1994 Normal 1995 1994 Normal
- ------- ----------- ----- ----- ----- ----- ----- -----
Texas (Energas) 47 1,249 1,185 1,382 3,216 3,215 3,528
Kentucky (WKG) 26 1,769 1,351 1,576 4,210 4,049 4,376
Louisiana (Trans La) 11 735 500 676 1,683 1,617 1,760
Colorado, Kansas and
Missouri (GGC) 16 2,162 2,211 2,339 5,929 5,651 6,234
----
System Average 100% 1,473 1,315 1,507 3,737 3,643 3,983
<FN>
(2) A heating degree day is equivalent to each degree that the
average of the high and the low temperatures for a day is
below 65 degrees. The greater the number of heating degree
days, the colder the climate. Heating degree days are used
in the natural gas industry to measure the coldness of
weather experienced and to compare relative temperatures
between one geographic area and another. Normal heating
degree days are derived from a 30-year average of actual
heating degree days compiled by the National Weather
Service.
- 16 -
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note 3 of notes to consolidated financial statements on pages
6 and 7 herein for a description of legal proceedings.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
A list of exhibits required by Item 601 of Regulation
S-K and filed as part of this report is set forth in the
Exhibits Index, which immediately precedes such exhibits.
(b) Reports on Form 8-K
None
- 17 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ATMOS ENERGY CORPORATION
(Registrant)
Date: February 14, 1996 By: /s/ James F. Purser
------------------------------
James F. Purser
Executive Vice President
and Chief Financial Officer
Date: February 14, 1996 By: /s/ David L. Bickerstaff
------------------------------
David L. Bickerstaff
Vice President and Controller
(Principal Accounting Officer)
- 18 -
EXHIBITS INDEX
Item 6(a)
Exhibit Page
Number Description Number
------- ----------- -------
10.1 Atmos Energy Corporation Restricted
Stock Grant Plan (Restated as of
November 9, 1994)
10.2 Amendment No. 1 to the Atmos Energy
Corporation Restricted Stock Grant
Plan (Restated as of November 9,
1994)
10.3 Amendment No. 1 to the Atmos Energy
Corporation Supplemental Executive
Benefits Plan (Restated as of
November 11, 1992)
15 Letter regarding unaudited interim
financial information
27 Financial Data Schedule for Atmos for
the quarter ended December 31, 1995