SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 10-K405

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 COMMISSION FILE NUMBER 0-10763
-------
ALATENN RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

ALABAMA 63-0821819
------------------------------- ----------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

POST OFFICE BOX 918, FLORENCE, ALABAMA 35631
-------------------------------------- ----------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (205) 383-3631

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

COMMON STOCK (PAR VALUE $0.10 PER SHARE)
----------------------------------------
(TITLE OF CLASS)

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
---- ----

ESTIMATED AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY
NONAFFILIATES OF THE REGISTRANT AT FEBRUARY 28, 1995 $35,347,760

NUMBER OF SHARES OF COMMON STOCK OUTSTANDING
AT FEBRUARY 28, 1995 2,115,484 SHARES

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO
THIS FORM 10-K. [X]

DOCUMENTS INCORPORATED BY REFERENCE

PARTS I, II AND IV OF THIS REPORT INCORPORATE BY REFERENCE CERTAIN PORTIONS OF
THE REGISTRANT'S 1994 ANNUAL REPORT TO SHAREHOLDERS.

PART III OF THIS REPORT INCORPORATES BY REFERENCE THE REGISTRANT'S PROXY
STATEMENT RELATING TO THE 1995 ANNUAL MEETING OF SHAREHOLDERS.
2

ALATENN RESOURCES, INC.

FORM 10-K

ANNUAL REPORT TO

THE SECURITIES AND EXCHANGE COMMISSION

FOR THE YEAR ENDED DECEMBER 31, 1994

TABLE OF CONTENTS

ITEM PAGE
---- ----

PART I.

1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . 16

PART II.

5. Market for Registrant's Common Equity and
Related Shareholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . 20
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

PART III.

10. Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . 20
11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . 21

PART IV.

14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

ALATENN RESOURCES, INC.

PART I

ITEM 1 - BUSINESS

GENERAL

AlaTenn Resources, Inc. (AlaTenn or the Company) was incorporated in
the state of Alabama in 1982 in connection with a reorganization of
Alabama-Tennessee Natural Gas Company (Alabama-Tennessee) which was
founded in 1944 and which has been in operation since 1950. AlaTenn is
a diversified holding company which is engaged in two lines of
business: (1) energy - natural gas transmission and marketing,
primarily through the provision of natural gas service in the lower
Tennessee Valley area and (2) the manufacture of products for the
health care industry. During 1994, the Company was the sole owner of
five natural gas transmission companies, a natural gas marketing
company, two natural gas distribution companies and one company which
was engaged in oil and gas exploration through its participation in a
limited partnership. Also, in 1994 the Company, through RIC
Acquisition Corporation, a wholly-owned subsidiary of the Company
formed to effect the acquisition, purchased the business of Ryder
International Corporation, a manufacturer of health care products.

The Company's principal pipeline subsidiary, Alabama-Tennessee, is an
interstate natural gas pipeline company engaged in the transportation
of natural gas in the Tennessee Valley. Its main pipeline extends from
Selmer, Tennessee approximately 130 miles across northern Mississippi
and Alabama to Huntsville, Alabama. This system includes approximately
288 miles of pipeline and two compressor stations.

Because it is engaged in the transportation of natural gas in
interstate commerce, Alabama-Tennessee is a "natural gas company" as
defined in the Natural Gas Act of 1938. As such, it is subject to the
jurisdiction of the Federal Energy Regulatory Commission (FERC), which
jurisdiction includes the power to regulate Alabama-Tennessee's rates
on the transportation of natural gas for its customers, as well as the
power to authorize the construction and operation of certain new
facilities.

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4

Tennessee River Intrastate Gas Company, Inc. (TRIGAS), one of the
Company's intrastate pipeline subsidiaries, completed construction in
1990 of a 38-mile, 10-inch pipeline that extends from Barton, Alabama
to Courtland, Alabama. In 1990, TRIGAS entered into a long-term
agreement to transport natural gas to an industrial customer in the
Courtland, Alabama area. In 1993, this customer increased its
existing contract for a three-year period by approximately 70%.

AlaTenn Energy Marketing Company, Inc. (ATEMCO) is the Company's
natural gas marketing subsidiary. ATEMCO buys natural gas primarily
on the spot market and sells that natural gas to customers on the
Company's interstate and intrastate pipelines, as well as to
off-system customers. As part of its services, ATEMCO evaluates
customers' supply requirements, locates natural gas supplies and
negotiates and manages contracts for those customers. ATEMCO also can
arrange for the use of its customers' excess gas storage and
transportation rights by others, generating savings for its customers.

Two of the Company's subsidiaries, Central Gas Company (Central) and
Tennessee River Development Company (Tennessee River), operated
natural gas distribution systems in Alabama prior to May 3, 1991, when
both subsidiaries sold substantially all their distribution assets to
the City of Florence, Alabama. Since that time, both subsidiaries
have transported or sold natural gas to the City of Florence for
resale to its customers.

Hardin County Gas Company, an AlaTenn distribution subsidiary, serves
approximately 140 customers in Hardin County, Tennessee. In 1994,
North Mississippi Natural Gas Corporation, which is also an AlaTenn
distribution subsidiary sold substantially all of its distribution
assets to a former customer and is not active at the current time.

Vulcan Oil and Gas Company (Vulcan) is a wholly owned subsidiary of
AlaTenn engaged in oil and natural gas exploration through its
participation as a limited partner in Lima Resources Associates
(Lima). Vulcan did not make any additional investments in Lima during
1994, its thirteenth year as a limited partner. As of December 31,
1992, the total investment in Lima had been written off by the
Company, and Vulcan is under no obligation to invest any additional
funds in the limited

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5

partnership. The Company does not anticipate any significant income
in the future from Lima's operations.

In recent years, changes in the nature of Alabama-Tennessee's business
attributable in large part to significant regulatory changes in the
natural gas industry contributed to the emergence of ATEMCO as the
Company's primary marketer of natural gas. For the past several
years, ATEMCO has been the primary seller of natural gas for the
Company. Sales by ATEMCO constituted 72%, 68% and 74% of the
Company's total revenues for the years 1994, 1993 and 1992,
respectively. However, due to the relatively small margins on such
sales, ATEMCO's contribution to the Company's net income was
significantly less than its percentage of the Company's total revenues
for each of the three years.

Also, as a result of these regulatory changes, Alabama-Tennessee's
customers have increasingly utilized Alabama-Tennessee to provide
transportation services rather than sales services and have utilized
other companies, including ATEMCO, for the purchase of their natural
gas supplies. While this change in the nature of its business has had
an adverse impact on Alabama-Tennessee, ATEMCO has benefitted from the
open-access status of Alabama-Tennessee and other pipelines and has
made significant contributions to the Company's revenues and net
income during the last three years. Also, TRIGAS contributed
materially to the Company's earnings in 1994, 1993 and 1992 as a
result of deliveries through its pipeline.

On April 19, 1994, the Company through RIC Acquisition Corporation, a
wholly-owned subsidiary of the Company formed to effect the
acquisition, purchased the business of Ryder International Corporation
by acquiring its assets, excluding cash and receivables, and assuming
substantially all of its liabilities. The Company paid to Ryder
International Corporation, including post-closing adjustments, $11.1
million in cash, issued a promissory note in the principal amount of
$1.0 million and assumed liabilities totaling $2.2 million, for a
total purchase price of $14.3 million. Following the closing, RIC
Acquisition Corporation's name was changed to Ryder International
Corporation (Ryder). Ryder is principally engaged in the design,
development, manufacture and sale of proprietary products for the
health care industry, including disposable or semi-disposable soft
contact lens storage and disinfection

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6

systems and diagnostic products sold primarily by major health care
companies.

In 1994, the Company formed AlaTenn Pipeline Company Inc., which has
agreed in principle with an industrial gas producer to construct and
operate a 23-mile, 8-5/8" high pressure steel pipeline to transport
gaseous oxygen to a large industrial customer in North Alabama.

Beginning in 1994, with the acquisition of Ryder, the Company
classifies its continuing operations into two industry segments,
energy and health care products. Unless the context otherwise
requires, references in this report to AlaTenn or the Company mean
AlaTenn Resources, Inc. and its subsidiaries.

Additional information respecting certain of the above matters is
contained in Management's Discussion and Analysis of Financial
Condition and Results of Operations and in the Notes to Consolidated
Financial Statements in the Company's 1994 Annual Report to
shareholders incorporated herein by reference.

REVENUES

During 1994, 1993 and 1992, Alabama-Tennessee accounted for 14%, 30%
and 24% of total revenues, respectively. ATEMCO accounted for 72%, 68%
and 74% of revenues during these same periods. The table below
summarizes total revenue and delivered volumes for the Company's
pipelines as well as for its natural gas marketing and other
subsidiaries.

1994 1993 1992
--------------------- --------------------- --------------------
Revenue Volume Revenue Volume Revenue Volume
($000) (MMMBtu) ($000) (MMMBtu) ($000) (MMMBtu)
------- -------- ------- -------- ------- --------

ENERGY
------
Natural Gas Transportation
--------------------------
Interstate Pipelines 8,764 32,637 4,702 32,186 2,748 32,861
Intrastate Pipelines 2,285 9,461 1,823 10,111 1,802 8,689
------- ------- ------- ------- ------- -------
11,049 42,098 6,525 42,297 4,550 41,550
------- ------- ------- ------- ------- -------

Gas Marketing and
Other Sales 52,396 23,350 112,497 38,088 117,101 46,993
----------- ------- ------- ------- ------- ------- -------

Marketing Volumes
Included in Pipeline
Transportation Volumes (19,925) (33,538) (38,436)

HEALTH CARE PRODUCTS 7,460 N/A 0 N/A 0 N/A
-------------------- ------- -------- ------- ------- ------- --------

Total 70,905 45,523 119,022 46,847 121,651 50,107
======= ======= ======= ======= ======= =======

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7

During 1994, gas marketing sales by ATEMCO totaled 22.5 million MMBtu
of natural gas, a decrease of 11.9 million MMBtu from the 1993 volume
of 34.4 million MMBtu. Related revenues decreased to $51.5 million in
1994, a reduction of $30.0 million from 1993. These decreases in
volumes and revenues were due to the loss of certain ATEMCO customers
in late 1993, as described below, three of which have since returned
to ATEMCO for sales services. The decreases in revenues and volume
between years were partially offset by an increase of approximately
1.8 million MMBtu and $2.1 million in revenues from off-system sales.
The decrease in revenues was also attributable to a decrease in the
price of natural gas purchased and sold. Natural gas prices decreased
by approximately 14% in 1994 compared with 1993. Gas marketing sales
in 1993 totaled 34.4 million MMBtu of natural gas, a decrease of 11.3
million MMBtu from the 1992 volume of 46.3 million MMBtu. Related
revenues decreased to $81.5 million in 1993, a reduction of $9.4
million from 1992. Approximately 7.1 million MMBtu and $13.5 million
in revenues of such decreases between years are attributable to a
reduction in off-system sales. This decrease in revenues from 1992
was partially offset by an increase in the price of natural gas
purchased and sold. For a description of recent changes in ATEMCO's
contractual relationship with certain of its municipal customers, see
"Competition" below.

Alabama-Tennessee receives a fee for transportation services to its
customers which is set by the FERC. However, the transportation fee is
much lower than the total consideration Alabama-Tennessee otherwise
received in prior periods when it provided a bundled sales and
transportation service because the cost of natural gas is not included
when only transportation service is provided. During 1994, 1993 and
1992, almost all volumes delivered through Alabama-Tennessee's
pipeline were transportation volumes. In 1993, as a result of changes
in the natural gas industry brought about by FERC Order 636,
Alabama-Tennessee's sales customers converted their firm sales service
on Alabama-Tennessee to firm transportation service, and also acquired
Alabama-Tennessee's firm capacity on Tennessee Gas Pipeline Company
(TGP), an upstream pipeline. The conversion of sales service to
transportation service along with the upstream assignments resulted in
decreased revenues by Alabama-Tennessee because (1) transportation
service does not include a gas cost component as does a bundled sales
and transportation

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8

service and (2) the assignment of upstream capacity on TGP required
those customers to pay TGP directly, thereby removing those revenues
from Alabama-Tennessee.

During 1994, 1993 and 1992, ATEMCO sold approximately 50%, 74% and
92%, respectively, of the natural gas delivered on the Company's
pipelines, enabling the Company in 1993 and 1992 to maintain sales
levels on its pipelines comparable to those prior to the
implementation of open-access transportation service (see Regulation).
However, on November 1, 1993, ATEMCO's contract with the municipal
customers on the Company's pipeline system terminated and some of
those customers chose to make other arrangements for gas supply, using
a marketing company other than ATEMCO. Three of those customers,
however, have since begun using ATEMCO again. Those customers
formerly contracting with ATEMCO for their gas supply which are now
utilizing different marketing companies accounted for 29% of the
Company's revenues, but only $0.1 million of the Company's net income,
for the twelve-month period ended October 31, 1993. Also, as a result
of increased deliveries to an industrial customer which could not
obtain alternate fuels due to the flooding on the Mississippi River,
Alabama-Tennessee was able to increase its deliveries in 1993 above
prior year levels. Increased deliveries to an industrial customer on
the TRIGAS pipeline also resulted in a substantial increase in
deliveries in 1993 through that pipeline.

In 1994, two industrial customers, Champion International Corporation
and Amoco Chemicals Corporation, accounted for approximately 32% and
12%, respectively, of the Company's operating revenues. For
information regarding recent developments related to the City of
Decatur, see "Competition" below.

Approximately 59% of Alabama-Tennessee's natural gas throughput in
1994 was delivered to 17 municipal customers serving 28 communities,
including several industrial customers located within those
communities. Alabama-Tennessee serves most of the communities
extending from Selmer, Tennessee to Huntsville, Alabama, including
portions of northeast Mississippi, the Muscle Shoals area of northwest
Alabama, and Athens, Decatur and Huntsville, Alabama. The remaining
41% of Alabama- Tennessee's throughput was delivered directly to 6
industrial users. Approximately 99% of TRIGAS's throughput was
delivered to one

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industrial customer while the remaining 1% was delivered to a single
resale customer.

Alabama-Tennessee's business is seasonal in nature and is strongly
influenced by weather conditions. Natural gas deliveries on
Alabama-Tennessee's pipeline system tend to be higher in the winter
months due to increased consumption for residential heating. Natural
gas deliveries during the summer months decline as a result of lower
residential usage. Sales by ATEMCO to municipal customers on the
Company's pipelines also tend to be seasonal in nature, while sales to
industrial users are not normally impacted by weather changes.
TRIGAS, the Company's intrastate pipeline, is less subject to such
seasonal fluctuations because the majority of its deliveries are to
two industrial users whose usage does not change as a result of
weather conditions.

Ryder, the Company's health care products subsidiary, is engaged in
the design, development , manufacture and sale of proprietary products
used in the health care industry. Ryder's products are generally
manufactured through an injection molding process, using
state-of-the-art equipment. These products include disposable and
semi-disposable soft contact lens storage and disinfection systems
which are marketed to major health care companies worldwide in
conjunction with their name-brand products. Ryder also produces a
range of diagnostic devices, including products used in blood
analysis, tissue biopsies and microbiological testing which major
health care companies market and distribute to hospitals, clinics,
surgical centers, physicians and other health care providers. Ryder
develops working models or prototypes that allow its customers to
test products in their own markets. As a result of its development of
various products and engineering solutions, Ryder currently holds more
than 100 design and use patents. Ryder relies on patents and
contracts to protect its proprietary technology. Ryder generally
enters into confidentiality agreements with its employees, consultants
and customers and limits access to and distribution of its
documentation and other proprietary information. In 1994, Ryder spent
approximately $.5 million for research and development of new products
or improvements to existing product lines. Typically, Ryder bears the
expense of the product-development phase and then enters into
long-term contracts with its customers which allow Ryder to retain
exclusive world-wide manufacturing rights to the products it has

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10

developed. Ryder employs a limited number of sales persons who make
direct contact with potential customers who may have need of Ryder's
services. Currently, more than 20% of Ryder's products are shipped to
international markets.

For additional financial information regarding each operating segment,
see Note 12 of Notes to Consolidated Financial Statements contained in
the Company's 1994 Annual Report to shareholders incorporated herein
by reference.

AVAILABILITY OF NATURAL GAS SUPPLY AND RAW MATERIALS

Alabama-Tennessee's historical supplier of natural gas under firm
contract until the implementation of FERC Order 636 (See Regulation)
was TGP, a subsidiary of Tenneco, Inc. In November 1993,
Alabama-Tennessee assigned all of its firm transportation and storage
entitlement on the TGP system to its resale customers. By so doing,
Alabama-Tennessee gave those customers the ability to obtain gas
supplies from various suppliers and to transport such supply on a firm
basis on the TGP system to Alabama-Tennessee for ultimate delivery to
the resale customers' facilities.

On September 1, 1993, Alabama-Tennessee converted the balance of its
capacity on TGP to firm transportation service as a result of
regulatory changes requiring the implementation by TGP of FERC Order
636, which resulted in the "unbundling" of sales and transportation
service on regulated pipelines. Effective September 1, 1993,
Alabama-Tennessee also implemented Order 636 allowing its customers to
convert firm sales capacity on Alabama-Tennessee to firm
transportation service. Alabama-Tennessee, as required by Order 636,
assigned to its customers the firm transportation service which it
held on TGP, giving its customers firm transportation service on both
Alabama-Tennessee and its upstream pipeline. The assignment of these
firm transportation and storage rights enhanced these customers'
flexibility in acquiring and maintaining gas supplies by allowing them
to benefit from recent changes in the natural gas industry (see
Regulation).

During 1994, transportation services by Alabama-Tennessee constituted
100% of its throughput. As a result of FERC Order 636, as noted
above, Alabama-Tennessee will have no future obligation to provide a
sales service to its customers.

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11

ATEMCO, the Company's marketing subsidiary, generally purchases
natural gas on the spot market, but has contracted for longer-term
supplies as required to meet its commitments to its customers. In all
cases in which ATEMCO contracts for long-term supplies, matching
long-term sales contracts are also obtained that allow ATEMCO to serve
as a conduit between the producer and the end-user of the natural gas
without incurring the risk of shortfalls in either the demand or
supply. These spot market and long-term arrangements should provide
ATEMCO with an adequate supply of natural gas in 1995.

In 1990, ATEMCO entered into a 15-year contract with a producer to
purchase up to 20,000 MMBtu of natural gas per day. ATEMCO obtained
this supply to meet a matching sales obligation with an industrial
customer. During 1993, this industrial customer increased its supply
requirements by 9,000 MMBtu per day. At that time, ATEMCO entered
into new agreements with a natural gas producer to secure a source of
supply to meet this increased obligation (see Revenues).

Ryder purchases high-grade resin and other minor components for its
manufacturing process from various suppliers. The resin is a readily
available material and, while Ryder is selective in its choice of
suppliers, it believes that there are no significant restrictions or
limitations on supply.

COMPETITION

Except for natural gas deliveries to four municipal customers and one
industrial customer from other intrastate pipelines,
Alabama-Tennessee's and TRIGAS's pipelines currently are the only
pipelines utilized by their customers to access upstream pipelines and
supplies of natural gas. The principal competitive fuels for
industrial and commercial purposes are coal and fuel oil. Electricity
is the main competition for residential uses.

In the past, Alabama-Tennessee's profitability was a function of its
ability to sell natural gas as a merchant. As a result of changes
adopted by the FERC which required pipelines to offer equal access to
their pipelines to all customers, Alabama- Tennessee was under
pressure to reduce sales margins on sales to industrial customers in
1987 and 1988 and to provide lower-margin transportation services for
industrial customers which chose to buy natural gas directly from
third parties. Also, as

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12

a result of FERC Order 636, Alabama-Tennessee was required to
substitute firm transportation service for its firm sales service to
its industrial customers, effective September 1, 1993. These
substitutions have resulted in reductions in margins on
Alabama-Tennessee as these customers will pay only FERC regulated
transportation rates. As these customers have converted their firm
sales entitlement to firm transportation service, ATEMCO has generally
been able to negotiate contracts with certain of these customers to
maintain a portion of the sales margins previously earned by Alabama-
Tennessee.

ATEMCO buys and resells natural gas primarily on the spot market,
resulting in a gross margin equal to the difference between the
purchase price and the resale price of such gas. ATEMCO has a
long-term agreement to supply natural gas for a plant expansion on the
TRIGAS pipeline. Almost all of ATEMCO's other contracts are
shorter-term agreements. Through its knowledge of the industry and
contacts with industry personnel, ATEMCO identifies potential natural
gas markets, contracts for the sale of natural gas to these markets,
contracts for the purchase of natural gas from suppliers and arranges
for the transportation of the natural gas over one or more pipeline
systems. ATEMCO's success is highly dependent upon its ability to
find and market competitively-priced natural gas.

Regulatory changes culminating with FERC Order 636 have given
customers on Alabama-Tennessee's pipeline system increased flexibility
over the past few years in contracting directly with producers and
marketing companies for their natural gas supplies. ATEMCO's service
contracts with its municipal customers on Alabama-Tennessee's pipeline
system terminated as of October 31, 1993 and on November 1, 1993,
ATEMCO entered into new two-year contracts with several of these
municipal customers. Of those municipal customers who opted to
contract with other natural gas suppliers, three have since returned
to ATEMCO. Regulatory changes have enabled ATEMCO to provide certain
new services, the income from which should more than offset the
decline in net income attributable to the loss of some of its
customers.

The City of Decatur, which accounted for approximately 16% of
Alabama-Tennessee's pipeline throughput in 1994, received
authorization from the FERC in 1994 to connect directly to TGP via a
proposed 37-mile pipeline to be constructed and operated

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13

by Decatur, and thereby bypass Alabama-Tennessee's facilities. Should
Decatur construct the pipeline and by-pass Alabama- Tennessee's
pipeline system, Alabama-Tennessee would attempt to resell Decatur's
capacity to other customers and would be permitted by the FERC to seek
from Alabama-Tennessee's remaining customers the revenues lost as a
result of this by-pass. The FERC has also granted authorization for
three of Decatur's major industrial customers to obtain natural gas
service directly from Alabama-Tennessee, thus bypassing Decatur. As
of the end of 1994, one of these customers, Monsanto Company, had
already begun to receive service directly from the Company. This
bypass of Decatur, and similar bypasses, would have the effect of
reducing or eliminating the adverse impact of the municipality's
by-pass of Alabama-Tennessee's pipeline system.

Ryder, the Company's health care products subsidiary, manufactures
products for certain major health care companies and is dependent on
several customers for the majority of its sales. The loss of one or
more of these customers would have a material adverse impact on the
health care products segment of the Company. Also, the fact that
Ryder's products are somewhat limited in number and normally are only
a component of the ultimate product sold by Ryder's customers,
requires Ryder to be continually attentive to the need to manufacture
such products at competitive prices and in compliance with strict
manufacturing standards. Depending on the product and the nature of
the project, Ryder competes on the basis of its ability to provide
engineering and design expertise as well as on the basis of product
and price. Ryder believes that its expertise and reputation for
quality products have allowed it to compete favorably with respect to
each such factor and to maintain long-term relationships with these
customers.

To the extent that each Ryder product is sold to a single customer,
Ryder is dependent on the ability of that customer to sell its
products, of which Ryder's products are a component. Therefore, Ryder
seeks to choose highly successful companies with which to do business.
This risk is somewhat minimized by Ryder's ability to obtain long-term
exclusive manufacturing rights while its customers have long-term
marketing rights.

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14

REGULATION

Alabama-Tennessee is subject to the Natural Gas Pipeline Safety Act of
1968, as amended, which regulates pipeline safety requirements, and to
the National Environmental Policy Act and other environmental
legislation. Alabama-Tennessee has a continuing program of inspection
designed to keep all of its facilities in compliance with
environmental and pipeline safety requirements.

Also, as an interstate natural gas pipeline company, Alabama-Tennessee
is subject to the jurisdiction of the FERC (under the Natural Gas Act
of 1938 and other federal legislation) with respect to interstate
sales and transportation of natural gas, certain rates and charges,
construction of new facilities, extension or abandonment of services
and facilities, accounts and records, depreciation and amortization
policies and certain other related matters. Alabama-Tennessee holds
certificates of public convenience and necessity issued by the FERC
authorizing it to construct and operate all pipelines, facilities and
properties which it now operates, and to transport natural gas in
interstate commerce in instances where such certificates are required.
As necessary, Alabama-Tennessee files with the FERC applications for
changes in its transportation rates and charges which are designed to
allow it to recover its costs of providing such services to its
customers, as well as a reasonable return on its investment. These
rates are normally allowed to become effective, subject to refund,
until such time as the FERC determines the just and reasonable rates.

On April 1, 1993, Alabama-Tennessee increased its jurisdictional rates
from rates that had been in effect since April 1, 1990. This rate
increase was agreed to in an uncontested settlement with
Alabama-Tennessee's customers which the FERC has approved. As a
result of this settlement, Alabama-Tennessee realized an increase in
its jurisdictional revenue of approximately $400,000 per year which
was offset by the lower recovery of certain demand charges, resulting
in a net decrease of approximately $350,000 per year compared with
actual jurisdictional revenues realized in the 12 months ended May 31,
1992, the base period used in the rate filing.

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15

During the past few years, the FERC has issued a series of orders
which have resulted in significant changes in the natural gas
industry. The primary thrust of these new orders has been to bring
increased competition to the transportation and sale of natural gas in
interstate commerce. Among other things, the regulations promulgated
by the FERC: (1) require interstate pipelines that provide
self-implementing transportation to do so for all other shippers on a
nondiscriminatory basis ("open-access transportation"); (2) require
open-access pipelines to establish rates which remove incentives
favoring the pipeline's merchant function; (3) permit the customers of
open-access pipelines to convert firm sales entitlement to firm
transportation service; and (4) make available to pipelines an
optional expedited certificate process to institute new services and
to construct and operate facilities relating to those new services,
provided that the pipelines file for and accept a blanket
transportation certificate to perform open-access transportation and
that the pipeline assume certain market risks.

During 1992, the FERC issued Order Nos. 636, 636-A and 636-B,
(collectively referred to as the "Restructuring Rule"). Under the
Restructuring Rule, which is pending review by certain federal
appellate courts, all interstate natural gas pipelines were required
to make a number of changes in the structure of the services which
they provide prior to the end of 1993. Among other things, the
Restructuring Rule required interstate pipelines to revise their
tariffs to reflect a separating or "unbundling" of their sales
services from their transportation services and the provision of all
transportation services on a basis that is equal in quality for all
natural gas supplies, whether purchased from the pipeline or from any
other natural gas supplier. The Restructuring Rule also provides that
pipelines would be allowed to collect from their customers the
prudently incurred "transition costs" associated with the changes
required by these orders, including gas supply realignment costs.

Alabama-Tennessee implemented restructured services on its system as
of September 1, 1993 in compliance with the FERC's orders under the
Restructuring Rule.

From 1988 through 1992, Alabama-Tennessee's firm supplier of natural
gas, TGP, passed on to its customers certain take-or-pay costs paid
to its producers. During the same period, Alabama-Tennessee sought to
recover from its customers the take-or-pay

- 13 -
16

costs passed through to it by TGP. In accordance with the allocation
method required by the FERC at the time, the Company recorded a
provision of $6.4 million, net of income taxes, in 1989 for its
estimate of the nonrecoverable portion of its take-or-pay obligation.
However, changes in the allocation methodology employed by the FERC
and agreements with customers in 1991 resulted in a favorable
after-tax adjustment of $3.4 million in the estimate for
non-recoverable take-or-pay expense. Based on this favorable
adjustment and a favorable settlement with the Internal Revenue
Service in 1993 concerning the Company's treatment of take-or-pay
payments and collections in certain tax returns, the Company recorded
income in 1993 of $3.6 million, reduced by income taxes of $1.3
million.

As a result of the payments made by Alabama-Tennessee to TGP since
1988, Alabama-Tennessee has reduced its ultimate take-or-pay
obligation to TGP by $22.3 million through December 31, 1994. As of
that date, Alabama-Tennessee had an unpaid balance owed to TGP, under
the settlement, of $0.7 million, including interest.

For more information on take-or-pay matters, see Note 4 of Notes to
Consolidated Financial Statements contained in the Company's 1994
Annual Report to shareholders incorporated herein by reference.

The facilities of Ryder, the Company's health care products
subsidiary, are registered with the Food and Drug Administration
(FDA). All of Ryder's medical products are manufactured in accordance
with Good Manufacturing Practices as set forth in the Food, Drug and
Cosmetic Act of 1938. The FDA does not establish or regulate price
levels for products manufactured by Ryder.

TRIGAS, the Company's intrastate pipeline subsidiary, is subject to
the jurisdiction of the Alabama Public Service Commission (APSC), as
are Central Gas Company and Tennessee River Development Company.

Hardin County Gas Company and North Mississippi Natural Gas
Corporation are subject to the jurisdiction of the Tennessee Public
Service Commission and the Mississippi Public Service

- 14 -
17

Commission, respectively. There are no material proceedings before
these state commissions involving these companies.

Additional regulatory information is contained in Management's
Discussion and Analysis of Financial Condition and Results of
Operations and in Note 3 of Notes to Consolidated Financial Statements
in the Company's 1994 Annual Report to shareholders incorporated
herein by reference.

PEOPLE

At December 31, 1994, the Company had 159 full-time employees, 40 of
which are employed by Alabama-Tennessee. AlaTenn and its energy
related subsidiaries of the Company are managed and operated by
Alabama-Tennessee's employees and have no employees of their own.
Ryder employs 119 full time employees in the health care products
segment.

Employee relations are good and there has not been any work stoppage
due to labor disagreements. None of the Company's employees is
represented by any labor union.

ITEM 2 - PROPERTIES

The headquarters of the Company and its subsidiaries are located in a
Company-owned office building in Sheffield, Alabama.

Alabama-Tennessee has approximately 288 miles of transmission pipeline
and two compressor stations. Its primary transmission pipeline extends
from an interconnection with TGP's pipeline near Selmer, Tennessee
approximately 130 miles eastward across northern Mississippi and
Alabama to Huntsville, Alabama. The system interconnects with TGP's
Kinder- Portland line near Corinth, Mississippi and its Delta-Portland
line near Barton, Alabama. The system also interconnects with the
Columbia Gulf Transmission Pipeline near Corinth and with the Texas
Eastern Transmission Pipeline near Barton. Pipe sizes range from
2-inch to 16-inch, including 74 miles of 12-inch, 97 miles of 10-inch,
48 miles of 8-inch, 51 miles of 6-inch and 18 miles of various other
diameters. These transmission pipelines are located primarily on
rights-of-way held under easement, license or permit

- 15 -
18

on lands owned by others. None of Alabama-Tennessee's properties is
subject to any liens. Alabama-Tennessee's pipeline system is
certificated by the FERC to deliver approximately 133,000 MMBtu per
day of natural gas to its customers.

TRIGAS has 38 miles of 10-inch pipeline, extending from Barton,
Alabama to Courtland, Alabama.

Ryder's manufacturing facilities are located on a 67-acre campus in
Arab, Alabama. Ryder has three office buildings which house
administrative, engineering and design operations and which jointly
contain approximately 27,000 square feet of work space. The
manufacturing facility, situated on the same location, contains
approximately 112,000 square feet of manufacturing space.

During 1991, two of the Company's distribution subsidiaries, Central
Gas Company and Tennessee River Development Company, sold
substantially all of their distribution pipeline service lines to the
City of Florence, Alabama. The Company's two remaining natural gas
distribution subsidiaries have 11 miles of distribution pipeline. The
Company's investment in these systems at original cost is
approximately $300,000.

For further information on Properties, see System Map included
herewith as Exhibit 99.

ITEM 3 - LEGAL PROCEEDINGS

For information concerning regulatory proceedings, see Item 1 above
under the caption "Regulation" and see Note 3 of the Notes to
Consolidated Financial Statements in the Company's 1994 Annual Report
to shareholders incorporated herein by reference.

There were no other material pending legal proceedings to which the
Company or any of its subsidiaries was a party, or of which any of
their property was the subject, as of December 31, 1994.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

- 16 -
19

EXECUTIVE OFFICERS OF THE COMPANY

NAME AGE TITLE
---- --- -----

Jerry A. Howard 52 Chairman of the Board, President and Chief Executive Officer of the
Company and of Alabama-Tennessee Natural Gas Company and Chairman of the
Board or President of all other subsidiaries.

George G. Petty 54 Vice President-Finance, Chief Financial Officer and Secretary-Treasurer
of the Company and of Alabama-Tennessee Natural Gas Company.

Jeffery Strickland 36 Vice President-Corporate Development, Asst. Secretary and Asst. Treasurer
of the Company and Vice President-Planning of Alabama-Tennessee Natural
Gas Company.

Gus Magrini 42 President and Secretary of AlaTenn Energy Marketing Company, Inc.

Richard Rabenau 53 President and Secretary of Ryder International Corporation

The persons who are identified as executive officers of the Company
currently serve as officers of the Company or of Alabama-Tennessee,
Ryder International Corporation or of AlaTenn Energy Marketing
Company, Inc. or of both the Company and Alabama-Tennessee. The
officers of the Company and Ryder International Corporation,
Alabama-Tennessee and AlaTenn Energy Marketing Company are elected
annually by the respective Boards of Directors of the Company and its
subsidiaries at the first meeting of such Boards of Directors held
after the annual meetings of shareholders of such entities.
Accordingly, the

- 17 -
20

terms of office of the current officers of the Company and of
Alabama-Tennessee are due to expire on May 1, 1995 when such meetings
of the Boards of Directors of the Company and of Alabama-Tennessee are
scheduled to be held or when their successors are elected.

There are no arrangements or understandings between any officer and
any other person pursuant to which the officer was elected. There are
no family relationships between any of the executive officers or
directors.

There have been no events under any bankruptcy act, no criminal
proceedings and no judgments or injunctions material to the evaluation
of the ability and integrity of any executive officers during the past
five years.

BRIEF ACCOUNT OF THE BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS

Except as noted below, the above listed executive officers have served
in the positions indicated above for more than the past five years.

Mr. Howard has served as Chairman of the Board, President and Chief
Executive Officer of the Company and of Alabama- Tennessee and
Chairman of the Board and President of all other subsidiaries, except
for AlaTenn Energy Marketing Company, Inc. for more than five years,
except for his position as Chairman of the Board of the Company, which
position became effective in January 1991. Mr. Howard also serves as
Chairman of the Board for AlaTenn Energy Marketing Company, Inc. and
served as its President and Chief Executive Officer until May, 1992.
Mr. Howard has also served as Chairman of the Board of Ryder
International Corporation since April, 1994.

Mr. Strickland has served as Vice President-Corporate Development
since May 1992 and as Assistant Secretary and Assistant Treasurer of
the Company since May 1990. Mr. Strickland served as Director of
Planning of the Company from December 1988 until May 1992. Mr.
Strickland has served as Vice President-Planning of Alabama-Tennessee
since May 1992 and as Director of Planning of Alabama-Tennessee prior
to May 1992.

- 18 -
21

Mr. Magrini has served as President and Secretary of AlaTenn Energy
Marketing Company, Inc. since May, 1993. From May, 1992 until May,
1993, Mr. Magrini served as Vice-President-Customer Relations of
Alabama-Tennessee. Prior to that time, Mr Magrini served as Vice
President-Sales and Supply of Alabama-Tennessee since December 1989.

Mr. Rabenau has served as President and Secretary of Ryder
International Corporation since April 19, 1994, when the assets of
Ryder were acquired by RIC Acquisition Corporation, a Company
subsidiary formed to effect the acquisition, after which RIC
Acquisition Corporation was renamed Ryder International Corporation.
From April 1, 1990 until April 19, 1994, Mr. Rabenau served as
President of the predecessor company, also named Ryder International
Corporation prior to the purchase of its assets by the Company.

PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS

The information for this item is set forth on page 28 of the Company's
1994 Annual Report to shareholders (Exhibit 13) under the heading
"Stock Information" and is incorporated herein by reference.

ITEM 6 - SELECTED FINANCIAL DATA

The information for this item is set forth in the section entitled
"Selected Financial Data" on page 22 of the Company's 1994 Annual
Report to shareholders (Exhibit 13) and is incorporated herein by
reference.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The information for this item is set forth in the section entitled
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" on pages 23 through 26 of the Company's 1994
Annual Report to shareholders (Exhibit 13) and is incorporated herein
by reference.

- 19 -
22

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information for this item is set forth on pages 11 through 21 of
the Company's 1994 Annual Report to shareholders (Exhibit 13) and is
incorporated herein by reference.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS -

The information for this item relating to directors and nominees of
the Company and to the filing of reports under Section 16(a) of the
Securities Exchange Act of 1934 is set forth in the section entitled
"Election of Directors" in the Company's Proxy Statement related to
the annual meeting of shareholders to be held on May 1, 1995, which
section is incorporated herein by reference.

EXECUTIVE OFFICERS -

The information for this item relating to executive officers of the
Company is set forth on pages 16 through 18 of this report.

ITEM 11 - EXECUTIVE COMPENSATION

The information for this item is set forth in the section entitled
"Executive Compensation" in the Company's Proxy Statement related to
the annual meeting of shareholders to be held on May 1, 1995, which
section (except for the portions thereof entitled "Compensation
Committee Report on Executive Compensation" and "Performance of Common
Shares") is incorporated herein by reference.

- 20 -
23

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS -

The information for this item is set forth in the section entitled
"Information Regarding Certain Beneficial Owners of Common Shares" in
the Company's Proxy Statement related to the annual meeting of
shareholders to be held on May 1, 1995, which section is incorporated
herein by reference.

SECURITY OWNERSHIP OF MANAGEMENT -

The information for this item is set forth in the section entitled
"Securities Ownership of Management" in the Company's Proxy Statement
related to the annual meeting of shareholders to be held on May 1,
1995, which section is incorporated herein by reference.

CHANGES IN CONTROL -

The Company knows of no arrangements which may at a subsequent date
result in a change in control of the Company.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information for this item is set forth in the section entitled
"Certain Transactions" in the Company's Proxy Statement related to the
annual meeting of shareholders to be held on May 1, 1995, which
section is incorporated herein by reference.

- 21 -
24

PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K

ANNUAL REPORT
FINANCIAL STATEMENTS PAGE NUMBER
-------------------- -------------

The following consolidated financial
statements, related notes to consolidated
financial statements and report of independent public
accountants contained on pages 11
through 21 of the Company's 1994 Annual
Report to shareholders (Exhibit 13) are
incorporated herein by reference in Item 8:

Consolidated Statements of Income
for the years ended December 31, 1994, 1993
and 1992 11
Consolidated Balance Sheets as of
December 31, 1994 and 1993 12-13
Consolidated Statements of Cash Flows
for the years ended December 31, 1994, 1993
and 1992 14
Notes to Consolidated Financial Statements 15-21
Report of Independent Public Accountants 10

FINANCIAL STATEMENT SCHEDULES

All financial statement schedules have been omitted since the required
information is included in the consolidated financial statements or the notes
thereto, or is not applicable or required.

EXHIBITS (NUMBERED IN ACCORDANCE WITH ITEM 601 OF REGULATION S-K)

The following exhibits are filed as part of this 1994 Form 10-K Report. Those
exhibits previously filed and incorporated herein by

- 22 -
25

reference are identified below by a note reference to the previous filing.

EXHIBIT
NUMBERS DESCRIPTION
------- -----------

2 Stock Purchase Agreement dated February 17, 1990, between AlaTenn Resources, Inc. and MEGA Natural Gas
Company, as amended by Letter Agreement dated March 9, 1990 (1)
3a Articles of Incorporation, as amended (2)
3b Bylaws, as amended (3)
4a Rights Agreement, dated as of February 1, 1990, between AlaTenn Resources, Inc. and American Stock Transfer & Trust
Company, which includes the form of Right Certificate as Exhibit A and the Summary of Rights to Purchase Common
Shares as Exhibit B (4)
4b Loan Agreement dated November 15, 1989, among AlaTenn Credit Corp., Third National Bank in Nashville, and The First
National Bank of Florence (16)
4c Revolving Credit Note in the principal amount of $20 million dated November 15, 1989, by AlaTenn Credit Corp. in
favor of Third National Bank in Nashville and The First National Bank of Florence (17)
4d First Amendment to Loan Agreement dated December 29, 1989 among AlaTenn Credit Corp., Third National Bank in
Nashville, and the First National Bank of Florence (23)
4e Second Amendment to Loan Agreement dated November 6, 1990 among AlaTenn Credit Corp., Third National Bank in
Nashville, and the First National Bank of Florence (24)
4f Credit Agreement in the amount of $20 million, dated January 20, 1995 between AlaTenn Credit Corporation and
Compass Bank (5)
10a Stock Purchase and Sales Agreement dated September 15, 1986, between AlaTenn Resources, Inc. and the shareholders
of Colony Energy Corporation (6)
10b Amendment and Waiver dated October 11, 1988, by and among the former shareholders of Colony Energy Corporation,
AlaTenn Resources, Inc. and Colony Energy Corporation (7)
10c Amendment No. 1 to Escrow Agreement dated October 11, 1988, by and among the former shareholders of Colony Energy
Corporation, AlaTenn Resources, Inc. and Crestar Bank (8)

- 23 -
26

10d Promissory Note dated October 7, 1988 in the principal amount of $255,000, by David C. Presley in favor of Crestar
Bank (9)
10e Promissory Note dated October 7, 1988 in the principal amount of $637,500 by AlaTenn Resources, Inc. in favor of
Crestar Bank (10)
10f Severance Agreement dated October 11, 1988 between David C. Presley and Colony Energy Corporation (11)
10g Consulting Agreement dated September 19, 1988 between Colony Energy Corporation and David C. Presley (12)
10h* Performance Share Plan of AlaTenn Resources, Inc. (13)
10i* Change in Control Agreement between AlaTenn Resources, Inc. and Jerry A. Howard, dated October 23, 1987 and
amendment dated March 11, 1988 (14)
10j* Change in Control Agreement between AlaTenn Resources, Inc. and George G. Petty, dated October 23, 1987 and
amendment dated March 11, 1988 (15)
10k Escrow Agreement dated December 27, 1989 by Alabama-Tennessee Natural Gas Company and Third National Bank In
Nashville, as escrow agent and Tennessee Gas Pipeline Company (18)
10l Gas Sales Contract between Alabama-Tennessee Natural Gas Company and Tennessee Gas Pipeline Company, dated August
1, 1989 (19)
10m Agreement for Purchase and Sale of Assets, dated October 3, 1990, by and among Central Gas Company, Tennessee River
Development Company and the City of Florence, Alabama (25)
10n First Amendment to Agreement for Purchase and Sale of Assets, dated March 5, 1991, by and among Central Gas
Company, Tennessee River Development Company and the City of Florence, Alabama (26)
10o Offer to Purchase, dated December 27, 1989 between Oryx Energy Company and Alabama-Tennessee Natural Gas Company
(27)
10p Agreement of Sale, dated November 19, 1990 by and among AlaTenn Resources, Inc., Triton Energy Corporation and
Pacific Basin Company (28)
10q* 1990 Stock Option Plan, adopted March 15, 1990 (20)
10r* Form of Incentive Stock Option Agreement (21)
10s* Restricted Shares Compensation Plan for Non-Employee Directors, adopted May 6, 1991 (22)
10t* Alabama-Tennessee Natural Gas Company Non-Employee Directors Deferral Plan (29)

- 24 -
27

10u* Alabama-Tennessee Natural Gas Company Supplemental Executive Retirement Plan (30)
10v* Alabama-Tennessee Natural Gas Company Supplemental Executive Thrift Plan (31)
10w Assets Purchase Agreement, dated April 19, 1994 between Ryder International Corporation, Frank and Carolyn Ryder,
RIC Acquisition Corporation and AlaTenn Resources (32)
10x* 1994 Key Employee Stock Incentive Plan (33)
13 Portions of 1994 Annual Report to Shareholders which are incorporated by reference into the form 10-K (5)
21 Subsidiaries of AlaTenn Resources, Inc. as of December 31, 1994 (5)
23 Consent of Arthur Andersen & Co. (5)
24 Powers of Attorney authorizing Jerry A. Howard and George G. Petty to sign the AlaTenn Resources, Inc. Annual
Report on Form 10-K for fiscal year ended December 31, 1994 on behalf of certain directors of the Company (5)
99 System Map of Alabama-Tennessee Pipeline System (5)

Notes:

(1) Filed as Exhibit 2 to Form 8-K of AlaTenn Resources, Inc. dated March 26, 1990
(2) Filed as Exhibit 3a to Form 10-K of AlaTenn Resources, Inc. dated March 27, 1987
(3) Filed as Exhibit 3b to Form 10-Q of AlaTenn Resources, Inc. dated May 14, 1987
(4) Filed as Exhibit 1 to Registration Statement on Form 8-A of AlaTenn Resources, Inc. dated February 15, 1990.
(5) Filed herewith
(6) Filed as Exhibit 2 to Form 8-K of AlaTenn Resources, Inc. dated October 28, 1986
(7) Filed as Exhibit 10b to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1989.
(8) Filed as Exhibit 10c to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1989.
(9) Filed as Exhibit 10d to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1989.
(10) Filed as Exhibit 10e to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1989.
(11) Filed as Exhibit 10f to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1989.
(12) Filed as Exhibit 10g to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1989.

- 25 -
28

(13) Filed as Exhibit A to the definitive Proxy Statement of AlaTenn Resources, Inc. dated March 25, 1983
(14) Filed as Exhibit 10c to Form 10-K of AlaTenn Resources, Inc. dated March 29, 1988
(15) Filed as Exhibit 10d to Form 10-K of AlaTenn Resources, Inc. dated March 29, 1988
(16) Filed as Exhibit 4b to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1990.
(17) Filed as Exhibit 4c to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1990.
(18) Filed as Exhibit 10k to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1990.
(19) Filed as Exhibit 10l to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1990.
(20) Filed as Appendix A to the Definitive Proxy Statement of the Company dated April 6, 1990.
(21) Filed as Exhibit 4(d) to the Registration Statement on Form S-8 of AlaTenn Resources, Inc., filed May 17, 1991
(File No. 33-40639).
(22) Filed as Appendix A to the Definitive Proxy Statement of the Company dated March 29, 1991.
(23) Filed as Exhibit 4d to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(24) Filed as Exhibit 4e to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(25) Filed as Exhibit 10m to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(26) Filed as Exhibit 10n to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(27) Filed as Exhibit 10o to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(28) Filed as Exhibit 10p to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(29) Filed as Exhibit 10t to Form 10-K of AlaTenn Resources, Inc., dated March 27, 1992.
(30) Filed as Exhibit 10u to Form 10-K of AlaTenn Resources, Inc., dated March 26, 1993.
(31) Filed as Exhibit 10v to Form 10-K of AlaTenn Resources, Inc., dated March 26, 1993.
(32) Filed as Exhibit 2 to Form 8-K of AlaTenn Resources, Inc., dated May 2, 1994.
(33) Filed as Appendix A to the Definitive Proxy Statement of the Company dated March 28, 1994.

- 26 -
29

* Management Contract or Compensatory Plan or Arrangement

REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the last quarter of
the year ended December 31, 1994.

- 27 -
30

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

AlaTenn Resources, Inc.

By: /s/Jerry A. Howard
-------------------------
Jerry A. Howard
Chairman of the Board,
President and Chief
Executive Officer

Dated: March 30, 1995

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature Capacity Date
--------- -------- ----

(i) Principal Executive
-------------------
Officer:
--------

/s/Jerry A. Howard Chairman of the Board, March 25, 1995
------------------ President and Chief
(Jerry A. Howard) Executive Officer

(ii) Principal Financial
-------------------
Officer:
--------

/s/George G. Petty Vice President - March 30, 1995
------------------ Finance and Chief
(George G. Petty) Financial Officer

- 28 -
31

(iii) Directors:
----------

Director March 30, 1995
------------------
(Emile A. Battat)

/s/Jerry A. Howard Director March 30, 1995
------------------
(Jerry A. Howard)

/s/Richard O. Jacobson Director March 30, 1995
----------------------
(Richard O. Jacobson)

/s/Jerome J. McGrath Director March 30, 1995
--------------------
(Jerome J. McGrath)

/s/Hugh J. Morgan, Jr. Director March 30, 1995
----------------------
(Hugh J. Morgan, Jr.)

/s/J. Kenneth Smith Director March 30, 1995
-------------------
(J. Kenneth Smith)

/s/Roger F. Stebbing Director March 30, 1995
--------------------
(Roger F. Stebbing)

/s/John P. Stupp, Jr. Director March 30, 1995
---------------------
(John P. Stupp, Jr.)

- 30 -
32

ALATENN RESOURCES, INC.

INDEX OF EXHIBITS

The following exhibits are filed as part of this 1994 Form 10-K Report. Those
exhibits previously filed and incorporated herein by reference are identified
below by a note reference to the previous filing.

EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ------

4f Credit Agreement in the amount of $20 million,
dated January 20, 1995 between AlaTenn Credit
Corporation and Compass Bank(5) ___
10a Stock Purchase and Sales Agreement dated
September 15, 1986, between AlaTenn Resources,
Inc. and the shareholders of Colony Energy
Corporation (6)
10b Amendment and Waiver dated October 11, 1988,
by and among the former shareholders of
Colony Energy Corporation, AlaTenn Resources,
Inc. and Colony Energy Corporation (7)
10c Amendment No. 1 to Escrow Agreement dated
October 11, 1988, by and among the former
shareholders of Colony Energy Corporation,
AlaTenn Resources, Inc. and Crestar Bank (8)
10d Promissory Note dated October 7, 1988 in
the principal amount of $255,000, by
David C. Presley in favor of Crestar Bank (9)
10e Promissory Note dated October 7, 1988
in the principal amount of $637,500 by
AlaTenn Resources, Inc. in favor of
Crestar Bank (10)
10f Severance Agreement dated October 11, 1988
between David C. Presley and Colony Energy
Corporation (11)
10g Consulting Agreement dated September 19, 1988
between Colony Energy Corporation and
David C. Presley (12)
10h* Performance Share Plan of AlaTenn
Resources, Inc. (13)
10i* Change in Control Agreement between
AlaTenn Resources, Inc. and Jerry A. Howard,
dated October 23, 1987 and amendment dated
March 11, 1988 (14)
10j* Change in Control Agreement between AlaTenn
Resources, Inc. and George G. Petty,
dated October 23, 1987 and amendment dated
March 11, 1988 (15)

EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ------

10k Escrow Agreement dated December 27, 1989
by Alabama-Tennessee Natural Gas Company
and Third National Bank In Nashville,
as escrow agent and Tennessee Gas
Pipeline Company (18)
10l Gas Sales Contract between Alabama-Tennessee
Natural Gas Company and Tennessee Gas
Pipeline Company, dated August 1, 1989 (19)
10m Agreement for Purchase and Sale of Assets,
dated October 3, 1990, by and among Central
Gas Company, Tennessee River Development
Company and the City of Florence, Alabama (25)
10n First Amendment to Agreement for Purchase
and Sale of Assets, dated March 5, 1991,
by and among Central Gas Company,
Tennessee River Development Company
and the City of Florence, Alabama (26)
10o Offer to Purchase, dated December 27, 1989
between Oryx Energy Company and
Alabama-Tennessee Natural Gas Company (27)
10p Agreement of Sale, dated November 19, 1990
by and among AlaTenn Resources, Inc.,
Triton Energy Corporation and Pacific
Basin Company (28)
10q* 1990 Stock Option Plan, adopted
March 15, 1990 (20)
10r* Form of Incentive Stock Option Agreement (21)
10s* Restricted Shares Compensation Plan
for Non-Employee Directors, adopted
May 6, 1991 (22)
10t* Alabama-Tennessee Natural Gas Company
Non-Employee Directors Deferral Plan (29)
10u* Alabama-Tennessee Natural Gas Company
Supplemental Executive Retirement Plan (30)
10v* Alabama-Tennessee Natural Gas Company
Supplemental Executive Thrift Plan (31)
10w Assets Purchase Agreement, dated
April 19, 1994 between Ryder International
Corporation, Frank and Carolyn Ryder,
Ric Acquisition Corporation and AlaTenn
Resources (32)
10x* 1994 Key Employee Stock Incentive Plan (33)

EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ------

13 1993 Annual Report to shareholders (5) __-__
21 Subsidiaries of AlaTenn Resources, Inc.
as of December 31, 1993 (5) __
23 Consent of Arthur Andersen & Co. (5) __
24 Powers of Attorney authorizing
Jerry A. Howard and George G. Petty
to sign the AlaTenn Resources, Inc.
Annual Report on Form 10-K for
fiscal year ended December 31, 1994
on behalf of certain directors
of the Company (5) __-__
99 System Map of Alabama-Tennessee Pipeline System __

Notes:

dated March 29, 1988
(15) Filed as Exhibit 10d to Form 10-K of AlaTenn Resources, Inc. dated March 29, 1988
(16) Filed as Exhibit 4b to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1990.
(17) Filed as Exhibit 4c to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1990.
(18) Filed as Exhibit 10k to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1990.
(19) Filed as Exhibit 10l to Form 10-K of AlaTenn Resources, Inc. dated March 30, 1990.
(20) Filed as Appendix A to the Definitive Proxy Statement of the Company dated April 6, 1990.
(21) Filed as Exhibit 4(d) to the Registration Statement on Form S-8 of AlaTenn Resources, Inc.,
filed May 17, 1991 (File No. 33-40639).
(22) Filed as Appendix A to the Definitive Proxy Statement of the Company dated March 29, 1991.
(23) Filed as Exhibit 4d to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(24) Filed as Exhibit 4e to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(25) Filed as Exhibit 10m to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(26) Filed as Exhibit 10n to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(27) Filed as Exhibit 10o to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(28) Filed as Exhibit 10p to Form 10-K of AlaTenn Resources, Inc., dated March 28, 1991.
(29) Filed as Exhibit 10t to Form 10-K of AlaTenn Resources, Inc., dated March 27, 1992.
(30) Filed as Exhibit 10u to Form 10-K of AlaTenn Resources, Inc., dated March 26, 1993.
(31) Filed as Exhibit 10v to Form 10-K of AlaTenn Resources, Inc., dated March 26, 1993.
(32) Filed as Exhibit 2 to Form 8-K of AlaTenn Resources, Inc., dated May 2, 1994.
(33) Filed as Appendix A to the Definitive Proxy Statement of the Company dated March 28, 1994.

* Management Contract or Compensatory Plan or Arrangement