(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended September 30, 2010 | ||
OR | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Texas and Virginia | 75-1743247 | |
(State or other jurisdiction
of
incorporation or organization) |
(IRS employer
identification no.) |
|
Three Lincoln Centre, Suite 1800
5430 LBJ Freeway, Dallas, Texas (Address of principal executive offices) |
75240
(Zip code) |
Name of Each Exchange
|
||
Title of Each Class
|
on Which Registered
|
|
Common stock, No Par Value | New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
AEC
|
Atmos Energy Corporation
|
|
AEH
|
Atmos Energy Holdings, Inc.
|
|
AEM
|
Atmos Energy Marketing, LLC
|
|
APS
|
Atmos Pipeline and Storage, LLC
|
|
ATO
|
Trading symbol for Atmos Energy Corporation common stock on the
New York Stock Exchange
|
|
Bcf
|
Billion cubic feet
|
|
COSO
|
Committee of Sponsoring Organizations of the Treadway Commission
|
|
FASB
|
Financial Accounting Standards Board
|
|
FERC
|
Federal Energy Regulatory Commission
|
|
Fitch
|
Fitch Ratings, Ltd.
|
|
GRIP
|
Gas Reliability Infrastructure Program
|
|
GSRS
|
Gas System Reliability Surcharge
|
|
ISRS
|
Infrastructure System Replacement Surcharge
|
|
KPSC
|
Kentucky Public Service Commission
|
|
LTIP
|
1998 Long-Term Incentive Plan
|
|
Mcf
|
Thousand cubic feet
|
|
MDWQ
|
Maximum daily withdrawal quantity
|
|
MMcf
|
Million cubic feet
|
|
Moodys
|
Moodys Investor Services, Inc.
|
|
NYMEX
|
New York Mercantile Exchange, Inc.
|
|
NYSE
|
New York Stock Exchange
|
|
PAP
|
Pension Account Plan
|
|
RRC
|
Railroad Commission of Texas
|
|
RRM
|
Rate Review Mechanism
|
|
RSC
|
Rate Stabilization Clause
|
|
S&P
|
Standard & Poors Corporation
|
|
SEC
|
United States Securities and Exchange Commission
|
|
Settled Cities
|
Represents 439 of the 440 incorporated cities, or approximately
80 percent of the Mid-Tex Divisions customers, with
whom a settlement agreement was reached during the fiscal 2008
second quarter.
|
|
SRF
|
Stable Rate Filing
|
|
TXU Gas
|
TXU Gas Company, which was acquired on October 1, 2004
|
|
WNA
|
Weather Normalization Adjustment
|
3
9
ITEM 1.
Business.
deliver superior shareholder value,
improve the quality and consistency of earnings growth, while
operating our regulated and nonregulated businesses
exceptionally well and
enhance and strengthen a culture built on our core values.
The
natural gas distribution segment
, which includes our
regulated natural gas distribution and related sales operations.
The
regulated transmission and storage segment
, which
includes the regulated pipeline and storage operations of our
Atmos Pipeline Texas Division.
The
natural gas marketing segment
, which includes a
variety of nonregulated natural gas management services.
4
Table of Contents
The
pipeline, storage and other segment
, which is
comprised of our nonregulated natural gas gathering,
transmission and storage services.
Atmos Energy Mid-Tex Division,
Atmos Energy Kentucky/Mid-States Division,
Atmos Energy Louisiana Division,
Atmos Energy West Texas Division,
Atmos Energy Colorado-Kansas Division and
Atmos Energy Mississippi Division
5
Table of Contents
October May
November April
December March
January December
6
Table of Contents
7
Table of Contents
Effective
Authorized
Authorized
Date of Last
Rate Base
Rate of
Return on
Division
Jurisdiction
Rate/GRIP Action
(thousands)
(1)
Return
(1)
Equity
(1)
Texas
05/24/2004
$417,111
8.258%
10.00%
Texas GRIP
Texas
04/20/2010
799,841
8.258%
10.00%
Colorado
01/04/2010
86,189
8.57%
10.25%
Kansas
08/01/2010
144,583
(2)
(2)
Georgia
03/31/2010
88,583
(3)
8.61%
10.70%
Illinois
11/01/2000
24,564
9.18%
11.56%
Iowa
03/01/2001
5,000
(2)
11.00%
Kentucky
06/01/2010
184,697
(2)
(2)
Missouri
09/01/2010
66,459
(2)
(2)
Tennessee
04/01/2009
190,100
8.24%
10.30%
Virginia
11/23/2009
36,861
8.48%
9.50% - 10.50%
Trans LA
04/01/2010
96,400
8.22%
10.00% - 10.80%
LGS
07/01/2010
251,591
8.54%
10.40%
Texas
10/01/2010
(2)
8.19%
9.60%
Texas
01/26/2010
1,279,647
(4)
8.60%
10.40%
Texas
09/01/2010
1,283,357
(4)
8.60%
10.40%
Mississippi
12/15/2009
227,055
8.27%
10.04%
Amarillo
08/01/2010
55,537
8.19%
9.60%
Lubbock
09/01/2010
57,074
8.19%
9.60%
West Texas
08/15/2010
135,565
8.19%
9.60%
8
Table of Contents
Authorized Debt/
Bad Debt
Performance-Based
Customer
Division
Jurisdiction
Equity Ratio
Rider
(5)
WNA
Rate
Program
(6)
Meters
Texas
50/50
No
N/A
N/A
N/A
Colorado
50/50
Yes
(7)
No
No
110,646
Kansas
(2)
Yes
Yes
No
128,640
Georgia
52/48
No
Yes
Yes
64,946
Illinois
67/33
No
No
No
22,868
Iowa
57/43
No
No
No
4,300
Kentucky
(2)
Yes
Yes
Yes
176,634
Missouri
49/51
No
No
No
56,843
Tennessee
52/48
Yes
Yes
Yes
132,261
Virginia
51/49
Yes
Yes
No
23,163
Trans LA
52/48
No
Yes
No
76,653
LGS
52/48
No
Yes
No
277,551
Texas
52/48
Yes
Yes
No
1,236,538
Texas
51/49
Yes
Yes
No
309,134
Mississippi
52/48
No
Yes
No
266,233
Amarillo
52/48
Yes
Yes
No
70,578
Lubbock
52/48
Yes
Yes
No
73,810
West Texas
52/48
Yes
Yes
No
155,242
(1)
The rate base, authorized rate of return and authorized return
on equity presented in this table are those from the last rate
case or GRIP filing for each jurisdiction. These rate bases,
rates of return and returns on equity are not necessarily
indicative of current or future rate bases, rates of return or
returns on equity.
(2)
A rate base, rate of return, return on equity or debt/equity
ratio was not included in the respective state commissions
final decision.
(3)
Georgia rate base consists of $60.2 million included in the
March 2010 rate case and $28.4 million included in the
October 2010 Pipeline Replacement Program (PRP) surcharge. The
$28.4 million of the Georgia rate base amount was awarded
in the latest PRP annual filing with an effective date of
October 1, 2010, an authorized rate of return of 8.56
percent and an authorized return on equity of 10.70 percent.
(4)
The Mid-Tex Rate Base amounts for the Dallas &
Environs areas represent system-wide, or
100 percent, of the Mid-Tex Divisions rate base.
(5)
The bad debt rider allows us to recover from ratepayers the gas
cost portion of uncollectible accounts.
(6)
The performance-based rate program provides incentives to
natural gas utility companies to minimize purchased gas costs by
allowing the utility company and its customers to share the
purchased gas costs savings.
(7)
The recovery of the gas portion of uncollectible accounts gas
cost adjustment has been approved for a two-year pilot program.
Table of Contents
Fiscal Year Ended September 30
2010
2009
2008
2007
2006
2,910,672
2,901,577
2,911,475
2,893,543
2,886,042
262,778
265,843
268,845
272,081
275,577
2,090
2,193
2,241
2,339
2,661
10,500
9,231
9,218
19,164
16,919
3,186,040
3,178,844
3,191,779
3,187,127
3,181,199
54.3
57.0
58.3
58.0
59.9
2,780
2,713
2,820
2,879
2,527
102
%
100
%
100
%
100
%
87
%
190,424
159,762
163,229
166,612
144,780
103,028
91,379
93,953
95,514
87,006
19,047
18,563
21,734
22,914
26,161
10,129
12,413
13,760
12,287
14,086
322,628
282,117
292,676
297,327
272,033
135,865
130,691
141,083
135,109
126,960
458,493
412,808
433,759
432,436
398,993
$
1,826,752
$
1,830,140
$
2,131,447
$
1,982,801
$
2,068,736
808,981
838,184
1,077,056
970,949
1,061,783
112,366
135,633
212,531
195,060
276,186
70,580
89,183
137,821
114,298
144,600
2,818,679
2,893,140
3,558,855
3,263,108
3,551,305
62,254
59,914
60,504
59,813
62,215
31,560
31,711
35,771
35,844
37,071
$
2,912,493
$
2,984,765
$
3,655,130
$
3,358,765
$
3,650,591
$
0.46
$
0.46
$
0.43
$
0.44
$
0.49
$
5.77
$
6.95
$
9.05
$
8.09
$
10.02
4,714
4,691
4,558
4,472
4,402
10
Table of Contents
Fiscal Year Ended September 30, 2010
Kentucky/
West
Colorado-
Mid-Tex
Mid-States
Louisiana
Texas
Kansas
Mississippi
Other
(3)
Total
1,429,287
424,048
331,784
271,418
216,831
237,304
2,910,672
116,240
52,938
22,420
24,919
20,741
25,520
262,778
145
862
484
86
513
2,090
2,733
2,809
2,062
2,896
10,500
1,545,672
480,581
354,204
299,630
239,720
266,233
3,186,040
2,100
3,924
1,532
3,537
5,909
2,734
2,780
103
%
100
%
96
%
99
%
106
%
102
%
102
%
92,489
27,917
15,810
19,772
18,661
15,775
190,424
55,916
16,841
7,821
7,892
7,349
7,209
103,028
3,227
5,931
4,317
148
5,424
19,047
1,444
3,482
2,100
3,103
10,129
151,632
52,133
23,631
35,463
28,258
31,511
322,628
45,822
43,782
5,626
22,429
12,655
5,551
135,865
197,454
95,915
29,257
57,892
40,913
37,062
458,493
$
475,852
$
169,516
$
123,344
$
105,476
$
81,056
$
94,203
$
$
1,049,447
$
145,166
$
63,665
$
43,604
$
36,696
$
31,233
$
41,542
$
976
$
362,882
$
89,411
$
33,267
$
22,986
$
15,881
$
16,352
$
12,621
$
$
190,518
$
106,620
$
14,718
$
10,995
$
19,390
$
8,271
$
13,599
$
$
173,593
$
134,655
$
57,866
$
45,759
$
33,509
$
25,200
$
26,441
$
(976
)
$
322,454
$
196,109
$
62,808
$
47,193
$
39,387
$
29,792
$
28,538
$
33,988
$
437,815
$
1,761,087
$
750,225
$
413,189
$
319,053
$
300,380
$
284,195
$
130,983
$
3,959,112
29,156
12,196
8,381
7,666
7,175
6,546
71,120
1,650
587
439
344
284
371
1,039
4,714
11
Table of Contents
Fiscal Year Ended September 30, 2009
Kentucky/
West
Colorado-
Mid-Tex
Mid-States
Louisiana
Texas
Kansas
Mississippi
Other
(3)
Total
1,417,869
423,829
333,224
270,757
218,609
237,289
2,901,577
116,480
53,386
22,769
24,986
22,080
26,142
265,843
148
909
508
96
532
2,193
2,555
2,839
1,015
2,822
9,231
1,534,497
480,679
355,993
299,090
241,800
266,785
3,178,844
2,036
3,853
1,574
3,553
5,520
2,746
2,713
100
%
98
%
101
%
99
%
100
%
103
%
100
%
73,678
26,589
12,371
16,341
17,280
13,503
159,762
48,363
16,049
6,771
6,780
6,848
6,568
91,379
2,918
6,217
3,528
196
5,704
18,563
1,434
6,014
2,064
2,901
12,413
124,959
50,289
19,142
32,663
26,388
28,676
282,117
44,991
41,693
5,151
23,417
10,471
4,968
130,691
169,950
91,982
24,293
56,080
36,859
33,644
412,808
$
483,155
$
163,602
$
118,021
$
89,982
$
78,188
$
91,680
$
$
1,024,628
$
150,978
$
68,823
$
41,956
$
35,126
$
32,935
$
43,642
$
(4,031
)
$
369,429
$
94,040
$
32,755
$
22,492
$
15,242
$
15,334
$
12,411
$
$
192,274
$
108,412
$
13,261
$
9,629
$
15,863
$
8,222
$
13,925
$
$
169,312
$
2,100
$
785
$
510
$
413
$
376
$
415
$
$
4,599
$
127,625
$
47,978
$
43,434
$
23,338
$
21,321
$
21,287
$
4,031
$
289,014
$
173,201
$
57,943
$
42,626
$
33,960
$
24,726
$
22,173
$
24,871
$
379,500
$
1,615,900
$
722,530
$
390,957
$
299,242
$
284,398
$
266,053
$
124,391
$
3,703,471
28,996
12,158
8,321
7,702
7,162
6,540
70,879
1,585
605
446
352
290
389
1,024
4,691
(1)
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 colder the climate, the greater the number of
heating degree days. Heating degree days are used in the natural
gas industry to measure the relative coldness of weather and to
compare relative temperatures between one geographic area and
another. Normal degree days are based on National Weather
Service data for selected locations. For service areas that have
weather normalized operations, normal degree days are used
instead of actual degree days in computing the total number of
heating degree days.
(2)
Sales volumes, revenues, operating margins, operating expense
and operating income reflect segment operations, including
intercompany sales and transportation amounts.
(3)
The Other column represents our shared services function, which
provides administrative and other support to the Company.
Certain costs incurred by this function are not allocated.
12
Table of Contents
Fiscal Year Ended September 30
2010
2009
2008
2007
2006
65
68
62
65
67
176
168
189
196
178
241
236
251
261
245
634,885
706,132
782,876
699,006
581,272
$
203,013
$
209,658
$
195,917
$
163,229
$
141,133
62
62
60
54
85
(1)
Transportation volumes and operating revenues reflect segment
operations, including intercompany sales and transportation
amounts.
13
Table of Contents
Fiscal Year Ended September 30
2010
2009
2008
2007
2006
652
631
624
677
679
61
63
55
68
73
339
321
312
281
289
1,052
1,015
991
1,026
1,041
15.8
17.0
11.0
19.3
15.3
420,203
441,081
457,952
423,895
336,516
$
2,151,264
$
2,336,847
$
4,287,862
$
3,151,330
$
3,156,524
(1)
Sales volumes and operating revenues reflect segment operations,
including intercompany sales and transportation amounts.
14
Table of Contents
Fiscal Year Ended September 30
2010
2009
2008
2007
2006
$
35,318
$
41,924
$
31,709
$
33,400
$
25,574
7,375
6,395
5,492
7,710
9,712
2.1
2.9
1.4
2.0
2.6
(1)
Transportation volumes and operating revenues reflect segment
operations, including intercompany sales and transportation
amounts.
15
Table of Contents
Annual Increase to Operating
Income For the Fiscal Year Ended September 30
Rate Action
2010
2009
2008
(In thousands)
$
23,663
$
2,959
$
27,838
16,751
11,443
8,101
13,757
38,764
3,275
2,630
1,237
1,424
$
56,801
$
54,403
$
40,638
Operating Income
Division
Rate Action
Jurisdiction
Requested
(In thousands)
Rate Case
Texas Railroad Commission
$
38,922
PRP
Surcharge
(1)
Georgia
764
Stable Rate Filing
Mississippi
Rate Review Mechanism
Settled Cities
56,827
$
96,513
(1)
The Pipeline Replacement Program (PRP) surcharge relates to a
long-term cast iron replacement program.
(2)
The Company filed a Rate Review Mechanism (RRM) with the Mid-Tex
Settled Cities requesting an operating income increase of
$56.8 million. A settlement was reached, effective
October 1, 2010, which resolves all issues in the annual
RRM filing and increases operating income by $23.1 million.
Additionally, the settlement allows the Mid-Tex Division to
expand its existing program to replace steel service lines which
will replace approximately 100,000 steel service lines by
September 30, 2012 at a total projected capital cost of
$80-$120 million, utilizing an authorized return on equity
of 9.0 percent, with the equity portion of the return based
on the actual capital structure up to a maximum of
50 percent.
16
Table of Contents
Increase in Annual
Division
State
Operating Income
Effective Date
(In thousands)
Missouri
$
3,977
09/01/2010
Kansas
3,855
08/01/2010
Kentucky
6,636
06/01/2010
Georgia
2,935
03/31/2010
Texas
(1)
2,963
01/26/2010
Colorado
1,900
01/04/2010
Virginia
1,397
11/23/2009
$
23,663
Tennessee
$
2,513
04/01/2009
Texas
446
Various
$
2,959
Virginia
$
869
09/30/2008
Georgia
3,351
09/22/2008
Texas
5,430
06/24/2008
Kansas
2,100
05/12/2008
Texas
8,000
04/01/2008
Tennessee
8,088
11/04/2007
$
27,838
(1)
In its final order, the Railroad Commission of Texas (RRC)
approved a $3.0 million increase in operating income from
customers in the Dallas & Environs portion of the
Mid-Tex Division. Operating income should increase
$0.2 million, net of the GRIP 2008 rates that will be
superseded. The ruling also provided for regulatory accounting
treatment for certain costs related to storage assets and costs
moving from our Mid-Tex Division within our natural gas
distribution segment to our regulated transmission and storage
segment.
(2)
Increase relates only to the City of Dallas and the
unincorporated areas of the Mid-Tex Division.
(3)
Increase relates only to the Settled Cities area of the Mid-Tex
Division.
17
Table of Contents
Additional
Incremental Net
Annual
Utility Plant
Operating
Effective
Division
Calendar Year
Investment
Income
Date
(In thousands)
(In thousands)
2009
$
16,957
$
2,983
09/01/2010
2009
19,158
363
06/14/2010
2009
95,504
13,405
04/20/2010
$
131,619
$
16,751
2008
$
105,777
$
2,732
09/09/2009
2008
51,308
6,342
04/28/2009
2007
57,385
1,837
01/26/2009
2007/08
27,425
532
Various
$
241,895
$
11,443
2007
$
46,648
$
6,970
04/15/2008
2006
7,022
1,131
12/17/2007
$
53,670
$
8,101
(1)
Increase relates to the City of Dallas and Environs areas of the
Mid-Tex Division.
(2)
Increase relates only to the City of Dallas area of the Mid-Tex
Division.
(3)
The West Texas Division files GRIP applications related only to
the Lubbock Environs and the West Texas Cities Environs. GRIP
implemented for this division include investments that related
to both calendar years 2007 and 2008. The incremental investment
is based on system-wide plant and additional annual operating
revenue is applicable to environs customers only.
18
Table of Contents
Additional
Annual
Operating
Effective
Division
Jurisdiction
Test Year Ended
Income
Date
(In thousands)
Lubbock
12/31/2009
$
(902
)
09/01/2010
WT Cities
12/31/2009
700
08/15/2010
Amarillo
12/31/2009
1,200
08/01/2010
LGS
12/31/2009
3,854
07/01/2010
TransLa
09/30/2009
1,733
04/01/2010
Mississippi
06/30/2009
3,183
12/15/2009
Lubbock
12/31/2008
2,704
10/01/2009
Amarillo
12/31/2008
1,285
10/01/2009
$
13,757
Settled Cities
12/31/2008
$
1,979
08/01/2009
WT Cities
12/31/2008
6,599
08/01/2009
LGS
12/31/2008
3,307
07/01/2009
TransLa
09/30/2008
611
04/01/2009
Mississippi
06/30/2008
N/A
Settled Cities
12/31/2007
21,800
11/08/2008
WT Cities
12/31/2007
4,468
11/20/2008
$
38,764
LGS
12/31/2007
$
1,709
07/01/2008
TransLa
09/30/2007
1,566
04/01/2008
$
3,275
19
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Increase
(Decrease) in
Annual
Operating
Effective
Division
Jurisdiction
Rate Activity
Income
Date
(In thousands)
Missouri
ISRS
(1)
$
563
03/02/2010
Kansas
Ad
Valorem
(2)
392
01/05/2010
Kansas
GSRS
(3)
766
12/12/2009
Georgia
PRP
Surcharge
(4)
909
10/01/2009
$
2,630
Kansas
Tax
Surcharge
(5)
$
631
02/01/2009
Missouri
ISRS
(1)
408
11/04/2008
Georgia
PRP
Surcharge
(4)
198
10/01/2008
$
1,237
Triangle
Special Contract
$
748
06/01/2008
Kansas
Tax
Surcharge
(5)
1,434
01/01/2008
Colorado
Agreement
(6)
(1,100
)
11/20/2007
Georgia
PRP
Surcharge
(4)
342
10/01/2007
$
1,424
(1)
Infrastructure System Replacement Surcharge (ISRS) relates to
maintenance capital investments made since the previous rate
case.
(2)
The Ad Valorem filing relates to a collection of property taxes
in excess of the amount included in the Companys base
rates.
(3)
Gas System Reliability Surcharge (GSRS) relates to safety
related investments made since the previous rate case.
(4)
The Pipeline Replacement Program (PRP) surcharge relates to a
long-term cast iron replacement program.
(5)
In the state of Kansas, the tax surcharge represents a
true-up
of
ad valorem taxes paid versus what is designed to be recovered
through base rates.
(6)
In November 2007, the Colorado Public Utilities Commission
approved an earnings agreement entered into jointly between the
Colorado-Kansas Division, the Commission Staff and the Office of
Consumer Counsel. The agreement called for a one-time refund to
customers of $1.1 million made in January 2008.
20
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21
Table of Contents
ITEM 1A.
Risk
Factors.
22
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23
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24
Table of Contents
25
Table of Contents
26
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27
Table of Contents
ITEM 1B.
Unresolved
Staff Comments.
ITEM 2.
Properties.
Maximum
Cushion
Total
Daily Delivery
Usable Capacity
Gas
Capacity
Capability
State
(Mcf)
(Mcf)
(1)
(Mcf)
(Mcf)
4,442,696
6,322,283
10,764,979
109,100
3,239,000
2,300,000
5,539,000
45,000
2,211,894
2,442,917
4,654,811
48,000
490,000
10,000
500,000
30,000
10,383,590
11,075,200
21,458,790
232,100
46,143,226
15,878,025
62,021,251
1,235,000
3,492,900
3,295,000
6,787,900
71,000
438,583
300,973
739,556
56,000
3,931,483
3,595,973
7,527,456
127,000
60,458,299
30,549,198
91,007,497
1,594,100
(1)
Cushion gas represents the volume of gas that must be retained
in a facility to maintain reservoir pressure.
28
Table of Contents
Maximum
Maximum
Daily
Storage
Withdrawal
Quantity
Quantity
Segment
Division/Company
(MMBtu)
(MMBtu)
(1)
Colorado-Kansas Division
4,237,243
108,232
Kentucky/Mid-States Division
16,993,683
343,746
Louisiana Division
2,608,255
159,620
Mississippi Division
3,875,429
165,402
West Texas Division
2,125,000
76,000
29,839,610
853,000
Atmos Energy Marketing, LLC
8,026,869
250,937
Trans Louisiana Gas Pipeline, Inc.
1,674,000
67,507
39,540,479
1,171,444
(1)
Maximum daily withdrawal quantity (MDWQ) amounts will fluctuate
depending upon the season and the month. Unless otherwise noted,
MDWQ amounts represent the MDWQ amounts as of November 1,
which is the beginning of the winter heating season.
ITEM 3.
Legal
Proceedings.
ITEM 4.
Submission
of Matters to a Vote of Security Holders.
29
Table of Contents
Years of
63
13
Chairman and Chief Executive Officer
59
4
President and Chief Operating Officer
55
10
Senior Vice President and General Counsel
50
2
Senior Vice President, Human Resources
66
10
Senior Vice President, Chief Financial Officer and Treasurer
30
Table of Contents
50
89
92
93
95
129
130
143
144
145
ITEM 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.
2010
2009
Dividends
Dividends
High
Low
paid
High
Low
Paid
$
30.06
$
27.39
$
.335
$
27.88
$
21.17
$
.330
29.52
26.52
.335
25.95
20.20
.330
29.98
26.41
.335
26.37
22.81
.330
29.81
26.82
.335
28.80
24.65
.330
$
1.34
$
1.32
31
Table of Contents
among Atmos Energy Corporation, S&P 500 Index
and Comparison Company Indices
Cumulative Total Return
9/30/05
9/30/06
9/30/07
9/30/08
9/30/09
9/30/10
100.00
105.89
109.44
107.92
120.52
131.27
100.00
110.79
129.01
100.66
93.70
103.22
100.00
99.04
115.40
102.25
103.34
126.98
32
Table of Contents
Number of
Number of Securities Remaining
Securities to be Issued
Weighted-Average
Available for Future Issuance
Upon Exercise of
Exercise Price of
Under Equity Compensation
Outstanding Options,
Outstanding Options,
Plans (Excluding Securities
Warrants and Rights
Warrants and Rights
Reflected in Column (a))
(a)
(b)
(c)
434,962
$
22.46
848,730
434,962
22.46
848,730
434,962
$
22.46
848,730
33
Table of Contents
ITEM 6.
Selected
Financial Data.
Fiscal Year Ended September 30
2010
2009
(1)
2008
2007
(1)
2006
(1)
(In thousands, except per share data and ratios)
$
4,789,690
$
4,969,080
$
7,221,305
$
5,898,431
$
6,152,363
1,364,941
1,346,702
1,321,326
1,250,082
1,216,570
875,505
899,300
893,431
851,446
833,954
489,436
447,402
427,895
398,636
382,616
(339
)
(3,303
)
2,731
9,184
881
154,471
152,830
137,922
145,236
146,607
334,626
291,269
292,704
262,584
236,890
128,787
100,291
112,373
94,092
89,153
$
205,839
$
190,978
$
180,331
$
168,492
$
147,737
92,422
91,620
89,941
87,486
81,173
$
2.20
$
2.07
$
1.99
$
1.91
$
1.81
$
726,476
$
919,233
$
370,933
$
547,095
$
311,449
$
1.34
$
1.32
$
1.30
$
1.28
$
1.26
454,175
408,885
429,354
427,869
393,995
428,599
528,689
595,542
505,493
410,505
353,853
370,569
389,392
370,668
283,962
$
4,793,075
$
4,439,103
$
4,136,859
$
3,836,836
$
3,629,156
(290,887
)
91,519
78,017
149,217
(1,616
)
6,763,791
6,367,083
6,386,699
5,895,197
5,719,547
486,231
72,681
351,327
154,430
385,602
2,178,348
2,176,761
2,052,492
1,965,754
1,648,098
1,809,551
2,169,400
2,119,792
2,126,315
2,180,362
3,987,899
4,346,161
4,172,284
4,092,069
3,828,460
542,636
509,494
472,273
392,435
425,324
48.7
%
49.3
%
45.4
%
46.3
%
39.1
%
9.1
%
8.9
%
8.8
%
8.8
%
8.9
%
(1)
Financial results for 2009, 2007 and 2006 include a
$5.4 million, $6.3 million and a $22.9 million
pre-tax loss for the impairment of certain assets.
(2)
Net of intersegment eliminations.
(3)
The capitalization ratio is calculated by dividing
shareholders equity by the sum of total capitalization and
short-term debt, inclusive of current maturities of long-term
debt.
(4)
The return on average shareholders equity is calculated by
dividing current year net income by the average of
shareholders equity for the previous five quarters.
34
Table of Contents
ITEM 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations.
35
Table of Contents
36
Table of Contents
37
Table of Contents
38
Table of Contents
39
Table of Contents
40
Table of Contents
For the Fiscal Year Ended September 30
2010
2009
2008
(In thousands, except per share data)
$
4,789,690
$
4,969,080
$
7,221,305
1,364,941
1,346,702
1,321,326
875,505
899,300
893,431
489,436
447,402
427,895
(339
)
(3,303
)
2,731
154,471
152,830
137,922
334,626
291,269
292,704
128,787
100,291
112,373
$
205,839
$
190,978
$
180,331
$
2.20
$
2.07
$
1.99
For the Fiscal Year Ended September 30
2010
2009
2008
(In thousands)
$
125,949
$
116,807
$
92,648
41,486
41,056
41,425
27,729
20,194
29,989
10,675
12,921
16,269
$
205,839
$
190,978
$
180,331
41
Table of Contents
For the Fiscal Year Ended September 30
2010
2009
2008
(In thousands, except per share data)
$
167,435
$
157,863
$
134,073
38,404
33,115
46,258
$
205,839
$
190,978
$
180,331
$
1.79
$
1.71
$
1.48
0.41
0.36
0.51
$
2.20
$
2.07
$
1.99
$11.3 million related to a favorable one-time tax benefit.
$7.6 million related to the favorable impact of an update
to the estimate for unbilled accounts.
$7.0 million favorable impact of the reversal of estimated
uncollectible gas costs.
$5.4 million unfavorable impact of a non-cash impairment
charge related to
available-for-sale
securities in our Supplemental Executive Retirement Plan.
42
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43
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For the Fiscal Year Ended September 30
2010
2009
2008
2010 vs. 2009
2009 vs. 2008
(In thousands, unless otherwise noted)
$
1,049,447
$
1,024,628
$
1,006,066
$
24,819
$
18,562
726,993
735,614
744,901
(8,621
)
(9,287
)
322,454
289,014
261,165
33,440
27,849
1,384
5,766
9,689
(4,382
)
(3,923
)
118,430
124,055
117,933
(5,625
)
6,122
205,408
170,725
152,921
34,683
17,804
79,459
53,918
60,273
25,541
(6,355
)
$
125,949
$
116,807
$
92,648
$
9,142
$
24,159
322,628
282,117
292,676
40,511
(10,559
)
131,547
126,768
136,678
4,779
(9,910
)
454,175
408,885
429,354
45,290
(20,469
)
$
0.47
$
0.47
$
0.44
$
$
0.03
$
5.77
$
6.95
$
9.05
$
(1.18
)
$
(2.10
)
For the Fiscal Year Ended September 30
2010
2009
2008
2010 vs. 2009
2009 vs. 2008
(In thousands)
$
134,655
$
127,625
$
115,009
$
7,030
$
12,616
57,866
47,978
48,731
9,888
(753
)
45,759
43,434
39,090
2,325
4,344
33,509
23,338
13,843
10,171
9,495
25,200
21,321
20,615
3,879
706
26,441
21,287
19,970
5,154
1,317
(976
)
4,031
3,907
(5,007
)
124
$
322,454
$
289,014
$
261,165
$
33,440
$
27,849
$33.7 million net increase in rate adjustments, primarily
in the West Texas, Mid-Tex, Louisiana, Kentucky, Tennessee,
Virginia and Mississippi service areas.
44
Table of Contents
$11.2 million increase as a result of an 11 percent
increase in consolidated throughput primarily associated with
higher residential and commercial consumption and colder weather
in most of our service areas.
$7.6 million decrease due to a non-recurring adjustment
recorded in the prior-year period to update the estimate for gas
delivered to customers but not yet billed to reflect base rate
changes.
$7.0 million decrease related to a prior-year reversal of
an accrual for estimated unrecoverable gas costs that did not
recur in the current year.
$1.6 million decrease in revenue-related taxes, primarily
due to a decrease in revenues on which the tax is calculated.
$5.4 million decrease due to a state sales tax
reimbursement received in March 2010.
$4.6 million decrease due to the absence of an impairment
charge for
available-for-sale
securities recorded in the prior year.
$4.4 million decrease in contract labor expenses.
$4.4 million decrease in travel, legal and other
administrative costs.
$7.4 million increase in employee-related expenses.
$4.3 million increase in taxes, other than income.
$13.6 million net increase in rates in the Mid-Tex Division
as a result of the implementation of its 2008 Rate Review
Mechanism (RRM) filing with all incorporated cities in the
division other than the City of Dallas and environs (the Settled
Cities) and adjustments for customers in the City of Dallas.
$16.0 million increase in other rate adjustments primarily
in Georgia, Kansas, Louisiana and West Texas.
$7.6 million increase attributable to a non-recurring
update to our estimate for gas delivered to customers but not
yet billed to reflect changes in base rates in several of our
jurisdictions recorded in the fiscal first quarter.
$7.0 million uncollectible gas cost accrual recorded in a
prior year that was reversed in the current year period.
45
Table of Contents
$17.9 million decrease as a result of a five percent
decrease in consolidated distribution throughput primarily
associated with lower residential, commercial and industrial
consumption and warmer weather in our Colorado service area,
which does not have weather-normalized rates.
$10.8 million decrease due to lower revenue related taxes,
partially offset by the associated franchise and state gross
receipts tax expense recorded as a component of taxes other than
income discussed below.
$10.6 million decrease due to lower legal, fuel and other
administrative costs.
$9.2 million decrease in allowance for doubtful accounts
due to the impact of recent rate design changes in certain
jurisdictions that allow us to recover the gas cost portion of
uncollectible accounts as well as a 23 percent
year-over-year
decline in the average cost of gas.
$9.2 million decrease in taxes other than income primarily
associated with lower franchise fees and state gross receipt
taxes.
$15.1 million increase in depreciation and amortization,
due primarily to additional assets placed in service during the
current year.
$4.6 million increase due to a noncash charge to impair
certain
available-for-sale
investments as we believed the fair value of these investments
would not recover within a reasonable period of time.
46
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For the Fiscal Year Ended September 30
2010
2009
2008
2010 vs. 2009
2009 vs. 2008
(In thousands, unless otherwise noted)
$
102,891
$
89,348
$
86,665
$
13,543
$
2,683
73,648
95,314
85,256
(21,666
)
10,058
10,657
11,858
9,746
(1,201
)
2,112
15,817
13,138
14,250
2,679
(1,112
)
203,013
209,658
195,917
(6,645
)
13,741
105,975
116,495
106,172
(10,520
)
10,323
97,038
93,163
89,745
3,875
3,418
135
1,433
1,354
(1,298
)
79
31,174
30,982
27,049
192
3,933
65,999
63,614
64,050
2,385
(436
)
24,513
22,558
22,625
1,955
(67
)
$
41,486
$
41,056
$
41,425
$
430
$
(369
)
634,885
706,132
782,876
(71,247
)
(76,744
)
428,599
528,689
595,542
(100,090
)
(66,853
)
$13.3 million decrease due to lower transportation fees on
through-system deliveries due to narrower basis spreads.
$2.6 million decrease due to decreased through-system
volumes primarily associated with market conditions that
resulted in reduced wellhead production, decreased drilling
activity and increased competition, partially offset by
increased deliveries to our Mid-Tex Division.
$1.6 million net decrease in market-based demand fees,
priority reservation fees and compression activity associated
with lower throughput.
$9.3 million increase associated with our GRIP filings.
$2.0 million increase of excess inventory sales in the
current-year period.
$11.8 million decrease related to reduced contract labor.
$2.0 million decrease due to a state sales tax
reimbursement received in March 2010.
47
Table of Contents
$13.0 million increase from higher demand-based fees.
$5.6 million increase resulting from higher transportation
fees on through-system deliveries due to market conditions.
$5.4 million increase due to our GRIP filings.
48
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49
Table of Contents
For the Fiscal Year Ended September 30
2010
2009
2008
2010 vs. 2009
2009 vs. 2008
(In thousands, unless otherwise noted)
$
59,523
$
75,341
$
73,627
$
(15,818
)
$
1,714
37,214
37,670
(6,135
)
(456
)
43,805
96,737
113,011
67,492
(16,274
)
45,519
(10,786
)
(28,399
)
25,529
17,613
(53,928
)
85,951
84,612
93,021
1,339
(8,409
)
31,699
38,208
36,629
(6,509
)
1,579
54,252
46,404
56,392
7,848
(9,988
)
2,280
537
2,022
1,743
(1,485
)
9,280
12,911
9,036
(3,631
)
3,875
47,252
34,030
49,378
13,222
(15,348
)
19,523
13,836
19,389
5,687
(5,553
)
$
27,729
$
20,194
$
29,989
$
7,535
$
(9,795
)
420,203
441,081
457,952
(20,878
)
(16,871
)
353,853
370,569
389,392
(16,716
)
(18,823
)
13.7
13.8
8.0
(0.1
)
5.8
$15.8 million decrease in realized delivered gas margins
due to lower
per-unit
margins as a result of narrowing basis spreads, combined with
lower delivered sales volumes.
Per-unit
margins were
$0.14/Mcf
in
the current-year period compared with $0.17/Mcf in the
prior-year period, while delivered sales volumes were
5 percent lower in the current year when compared with the
prior year.
$0.5 million decrease in asset optimization margins
primarily due to higher storage demand fees partially offset by
higher realized storage and trading gains during the fiscal year.
Table of Contents
September 30
2010
2009
(In millions, unless otherwise noted)
$
(7.8
)
$
28.6
12.6
11.0
4.8
39.6
(9.6
)
(14.7
)
$
(4.8
)
$
24.9
13.7
13.8
(1)
Related fees represent AEMs contractual costs to acquire
the storage capacity utilized in its asset optimization
operations. The fees primarily consist of demand fees and
contractual obligations to sell gas below market index in
exchange for the right to manage and optimize third party
storage assets for the positions AEM has entered into as of
September 30, 2010 and 2009.
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A $43.8 million increase in asset optimization margins. AEM
realized substantially all of its realized asset optimization
margin in the fiscal 2009 first quarter when it realized
substantially all of the economic value that it had captured as
of September 30, 2008 from withdrawing gas and settling the
associated financial instruments. Since that time, as a result
of falling current cash prices, AEM has been deferring storage
withdrawals and has been a net injector of gas into storage to
increase the economic value it could realize in future periods
from its asset optimization activities. In the prior year, AEM
deferred storage withdrawals primarily into fiscal 2009 and
recognized losses on the settlement of the associated financial
instruments.
A $1.7 million increase in realized delivered gas margins.
AEM experienced a six percent increase in
per-unit
margins as a result of improved basis spreads in certain market
areas where we were able to better optimize transportation
assets and successful contract renewals. These margins
improvements more than offset a four percent decrease in gross
sales volumes primarily attributable to lower industrial demand
as a result of the current economic climate.
The realization of unrealized gains recorded during fiscal 2008.
A modest widening of the physical/financial spreads, partially
offset by favorable unrealized basis gains in certain markets.
A 5.8 Bcf increase in AEMs net physical position.
$4.0 million increase in legal and other administrative
costs.
$2.4 million decrease related to tax matters incurred in
the prior year that did not recur in the current year.
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For the Fiscal Year Ended September 30
2010
2009
2008
2010 vs. 2009
2009 vs. 2008
(In thousands)
$
13,206
$
12,784
$
14,247
$
422
$
(1,463
)
10,286
21,474
5,178
(11,188
)
16,296
1,652
2,728
4,183
(1,076
)
(1,455
)
2,996
(7,490
)
4,705
10,486
(12,195
)
28,140
29,496
28,313
(1,356
)
1,183
12,448
11,019
8,064
1,429
2,955
15,692
18,477
20,249
(2,785
)
(1,772
)
3,083
6,253
8,428
(3,170
)
(2,175
)
2,808
1,830
2,322
978
(492
)
15,967
22,900
26,355
(6,933
)
(3,455
)
5,292
9,979
10,086
(4,687
)
(107
)
$
10,675
$
12,921
$
16,269
$
(2,246
)
$
(3,348
)
$4.9 million decrease from lower margins earned on storage
optimization activities.
$3.9 million decrease in basis gains earned from utilizing
leased capacity.
$2.4 million decrease from lower margins earned on asset
management plans.
$10.5 million increase in unrealized margins associated
with our asset optimization activities.
53
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$16.3 million increase in asset optimization margins as a
result of larger realized gains from the settlement of financial
positions associated with storage and trading activities, basis
gains earned from utilizing controlled pipeline capacity and
higher margins earned under asset management plans.
$12.2 million decrease in unrealized margins associated
with our asset optimization activities due to a widening of the
spreads between current cash prices and forward natural gas
prices.
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For the Fiscal Year Ended September 30
2010
2009
2008
2010 vs. 2009
2009 vs. 2008
(In thousands)
$
726,476
$
919,233
$
370,933
$
(192,757
)
$
548,300
(542,702
)
(517,201
)
(483,009
)
(25,501
)
(34,192
)
(163,025
)
(337,546
)
98,068
174,521
(435,614
)
20,749
64,486
(14,008
)
(43,737
)
78,494
111,203
46,717
60,725
64,486
(14,008
)
$
131,952
$
111,203
$
46,717
$
20,749
$
64,486
$368.9 million increase attributable to the favorable
impact on our working capital due to the decline in natural gas
prices in the current year compared to the prior year.
$56.8 million increase due to lower cash margin
requirements related to our natural gas marketing financial
instruments.
These increases were partially offset by a $21.0 million
decrease due to a contribution made to our pension plans in the
current year.
55
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Paid $124.3 million in cash dividends which reflected a
payout ratio of 61 percent of net income.
Paid $100.5 million for the repurchase of common stock
under our accelerated share repurchase program.
Borrowed a net $54.3 million under our short-term
facilities due to the impact of seasonal natural gas purchases.
Received $8.8 million net proceeds related to the issuance
of 0.4 million shares of common stock, which is a
68 percent decrease compared to the prior year due
primarily to the fact that in fiscal 2010 shares have begun
to be purchased on the open market rather than being issued by
us to the Direct Stock Purchase Plan and the Retirement Savings
Plan.
Paid $1.2 million to repurchase equity awards.
Paid $407.4 million to repay our $400 million 4.00%
unsecured notes.
Repaid a net $284.0 million short-term borrowings under our
credit facilities.
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Paid $121.5 million in cash dividends which reflected a
payout ratio of 64 percent of net income.
Received $445.6 million in net proceeds related to the
March 2009 issuance of $450 million of 8.50% Senior
Notes due 2019. The net proceeds were used to repay the
$400 million 4.00% unsecured notes.
Received $27.7 million net proceeds related to the issuance
of 1.2 million shares of common stock.
Received $1.9 million net proceeds related to the
settlement of the Treasury lock agreement associated with the
March 2009 issuance of the $450 million of
8.50% Senior Notes due 2019.
Borrowed a net $200.2 million under our short-term
facilities due to the impact of seasonal natural gas purchases
and the effect of higher natural gas prices.
Repaid $10.3 million long-term debt in accordance with
their normal maturity schedules.
Received $25.5 million in net proceeds related to the
issuance of 1.0 million shares of common stock.
Paid $117.3 million in dividends, which reflected a payout
ratio of 65 percent of net income.
For the Fiscal Year Ended September 30
2010
2009
2008
103,529
407,262
388,485
79,722
640,639
558,014
421,706
686,046
538,450
3,382
3,079
3,197
608,339
1,737,026
1,488,146
57
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58
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S&P
Moodys
Fitch
BBB+
Baa2
BBB+
A-2
P-2
F-2
September 30
2010
2009
(In thousands, except percentages)
$
126,100
2.8
%
$
72,550
1.6
%
2,169,682
48.5
%
2,169,531
49.1
%
2,178,348
48.7
%
2,176,761
49.3
%
$
4,474,130
100.0
%
$
4,418,842
100.0
%
59
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Payments Due by Period
Less Than
More Than
Total
1 Year
1-3 Years
3-5 Years
5 Years
(In thousands)
$
2,172,696
$
360,131
$
252,565
$
500,000
$
1,060,000
126,100
126,100
1,040,151
130,826
219,726
179,347
510,252
346,186
264,525
79,758
1,903
1,380
186
372
372
450
217,184
18,240
33,407
31,207
134,330
26,305
13,332
10,243
2,730
32,422
8,678
15,744
7,759
241
58,597
49,673
8,924
154,511
13,006
24,584
29,882
87,039
6,731
6,731
$
4,182,263
$
984,697
$
652,054
$
753,200
$
1,792,312
(1)
See Note 6 to the consolidated financial statements.
(2)
Interest charges were calculated using the stated rate for each
debt issuance.
(3)
Gas purchase commitments were determined based upon
contractually determined volumes at prices estimated based upon
the index specified in the contract, adjusted for estimated
basis differentials and contractual discounts as of
September 30, 2010.
(4)
See Note 13 to the consolidated financial statements.
(5)
Represents third party contractual demand fees for contracted
storage in our natural gas marketing and pipeline, storage and
other segments. Contractual demand fees for contracted storage
for our natural gas distribution segment are excluded as these
costs are fully recoverable through our purchase gas adjustment
mechanisms.
(6)
Represents third party contractual demand fees for
transportation in our natural gas marketing segment.
(7)
Represents liabilities for natural gas commodity financial
instruments that were valued as of September 30, 2010. The
ultimate settlement amounts of these remaining liabilities are
unknown because they are subject to continuing market risk until
the financial instruments are settled.
(8)
Represents expected contributions to our postretirement benefit
plans.
(9)
Represents liabilities associated with uncertain tax positions
claimed or expected to be claimed on tax returns.
60
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$
(14,166
)
(34,575
)
(6,764
)
5,905
$
(49,600
)
61
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Fair Value of Contracts at September 30, 2010
Maturity in Years
Less
Greater
Total Fair
Than 1
1-3
4-5
Than 5
Value
(In thousands)
$
(46,723
)
$
(2,877
)
$
$
$
(49,600
)
$
(46,723
)
$
(2,877
)
$
$
$
(49,600
)
$
26,698
(34,170
)
(4,902
)
(12,374
)
24,889
$
12,515
Fair Value of Contracts at September 30, 2010
Maturity in Years
Less
Greater
Total Fair
Than 1
1-3
4-5
Than 5
Value
(In thousands)
$
(7,264
)
$
(5,096
)
$
(14
)
$
$
(12,374
)
$
(7,264
)
$
(5,096
)
$
(14
)
$
$
(12,374
)
62
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63
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ITEM 7A.
Quantitative
and Qualitative Disclosures About Market Risk.
64
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65
ITEM 8.
Financial
Statements and Supplementary Data.
Page
67
68
69
70
71
72
133
141
66
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CONSOLIDATED FINANCIAL STATEMENTS
Atmos Energy Corporation
67
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68
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Year Ended September 30
2010
2009
2008
(In thousands, except per share data)
$
2,912,493
$
2,984,765
$
3,655,130
203,013
209,658
195,917
2,151,264
2,336,847
4,287,862
35,318
41,924
31,709
(512,398
)
(604,114
)
(949,313
)
4,789,690
4,969,080
7,221,305
1,863,046
1,960,137
2,649,064
2,065,313
2,252,235
4,194,841
7,178
12,428
3,396
(510,788
)
(602,422
)
(947,322
)
3,424,749
3,622,378
5,899,979
1,364,941
1,346,702
1,321,326
468,038
494,010
500,234
216,960
217,208
200,442
190,507
182,700
192,755
5,382
875,505
899,300
893,431
489,436
447,402
427,895
(339
)
(3,303
)
2,731
154,471
152,830
137,922
334,626
291,269
292,704
128,787
100,291
112,373
$
205,839
$
190,978
$
180,331
$
2.22
$
2.08
$
2.00
$
2.20
$
2.07
$
1.99
91,852
91,117
89,385
92,422
91,620
89,941
69
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Accumulated
Common Stock
Additional
Other
Number of
Stated
Paid-in
Comprehensive
Retained
Shares
Value
Capital
Loss
Earnings
Total
(In thousands, except share and per share data)
89,326,537
$
447
$
1,700,378
$
(16,198
)
$
281,127
$
1,965,754
180,331
180,331
(1,897
)
(1,897
)
3,148
3,148
(21,000
)
(21,000
)
160,582
(569
)
(569
)
(117,288
)
(117,288
)
388,485
2
10,333
10,335
558,014
3
15,116
15,119
538,450
2
5,592
5,594
12,878
12,878
3,197
87
87
90,814,683
454
1,744,384
(35,947
)
343,601
2,052,492
190,978
190,978
(1,820
)
(1,820
)
3,370
3,370
3,606
3,606
10,607
10,607
206,741
(7,766
)
(7,766
)
(121,460
)
(121,460
)
407,262
2
8,743
8,745
640,639
3
16,571
16,574
686,046
4
8,075
8,079
13,280
13,280
3,079
76
76
92,551,709
463
1,791,129
(20,184
)
405,353
2,176,761
205,839
205,839
1,745
1,745
2,030
2,030
(6,963
)
(6,963
)
202,651
(2,958,580
)
(15
)
(100,435
)
(100,450
)
(37,365
)
(1,191
)
(1,191
)
(124,287
)
(124,287
)
103,529
1
2,881
2,882
79,722
2,281
2,281
421,706
2
8,708
8,710
10,894
10,894
3,382
97
97
90,164,103
$
451
$
1,714,364
$
(23,372
)
$
486,905
$
2,178,348
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Year Ended September 30
2010
2009
2008
(In thousands)
$
205,839
$
190,978
$
180,331
5,382
216,960
217,208
200,442
173
94
147
196,731
129,759
97,940
12,655
14,494
14,032
11,908
10,364
10,665
(1,245
)
(1,177
)
(5,492
)
(40,401
)
244,713
(97,018
)
54,014
194,287
(54,726
)
(18,387
)
117,737
(120,882
)
14,886
(106,231
)
22,476
58,069
(181,978
)
39,902
(48,992
)
(717
)
60,026
64,266
84,320
23,090
726,476
919,233
370,933
(542,636
)
(509,494
)
(472,273
)
(66
)
(7,707
)
(10,736
)
(542,702
)
(517,201
)
(483,009
)
54,268
(283,981
)
200,174
445,623
1,938
(131
)
(407,353
)
(10,284
)
(124,287
)
(121,460
)
(117,288
)
(100,450
)
(1,191
)
8,766
27,687
25,466
(163,025
)
(337,546
)
98,068
20,749
64,486
(14,008
)
111,203
46,717
60,725
$
131,952
$
111,203
$
46,717
71
Table of Contents
1.
Nature of
Business
Division
Service Area
Colorado, Kansas,
Missouri
(1)
Georgia
(1)
,
Illinois
(1)
,
Iowa
(1)
,
Kentucky,
Missouri
(1)
,
Tennessee,
Virginia
(1)
Louisiana
Texas, including the Dallas/Fort Worth metropolitan area
Mississippi
West Texas
(1)
Denotes locations where we have more limited service areas.
72
Table of Contents
2.
Summary
of Significant Accounting Policies
73
Table of Contents
September 30
2010
2009
(In thousands)
$
209,564
$
197,743
6,714
7,161
22,701
22,233
31,014
23,317
805
866
4,505
5,923
1,161
10,014
639
1,046
6,218
$
277,510
$
274,114
$
43,333
$
110,754
381,474
358,745
6,112
7,960
$
430,919
$
477,459
74
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75
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76
Table of Contents
77
Table of Contents
78
Table of Contents
79
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80
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September 30
2010
2009
(In thousands)
$
4,205
$
2,460
(5,468
)
(7,498
)
(22,109
)
(15,146
)
$
(23,372
)
$
(20,184
)
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Year Ended
Year Ended
September 30, 2009
September 30, 2008
(In thousands, except per share amounts)
$
2.10
$
2.02
$
2.08
$
2.00
91,117
89,385
91,117
89,385
$
2.08
$
2.00
$
2.07
$
1.99
92,024
90,272
91,620
89,941
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3.
Goodwill
and Intangible Assets
September 30
2010
2009
(In thousands)
$
739,314
$
738,603
834
1,461
$
740,148
$
740,064
Regulated
Natural Gas
Transmission
Natural Gas
Pipeline, Storage
Distribution
and Storage
Marketing
and Other
Segment
Segment
Segment
Segment
Total
(In thousands)
$
571,592
$
132,300
$
24,282
$
10,429
$
738,603
670
41
711
$
572,262
$
132,341
$
24,282
$
10,429
$
739,314
(1)
During the preparation of the fiscal 2010 tax provision, we
adjusted certain deferred taxes recorded in connection with
acquisitions completed in fiscal 2001 and fiscal 2004, which
resulted in an increase to goodwill and net deferred tax
liabilities of $0.7 million.
September 30, 2010
September 30, 2009
Useful
Gross
Gross
Life
Carrying
Accumulated
Carrying
Accumulated
(Years)
Amount
Amortization
Net
Amount
Amortization
Net
(In thousands)
10
$
6,926
$
(6,092
)
$
834
$
6,926
$
(5,465
)
$
1,461
83
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$
627
$
627
43
43
43
43
4.
Financial
Instruments
Natural Gas
Natural Gas
Distribution
Marketing
Total
(In thousands)
$
2,219
$
18,356
$
20,575
47
890
937
(48,942
)
(731
)
(49,673
)
(2,924
)
(6,000
)
(8,924
)
$
(49,600
)
$
12,515
$
(37,085
)
$
4,395
$
27,248
$
31,643
1,620
12,415
14,035
(20,181
)
(1,301
)
(21,482
)
$
(14,166
)
$
38,362
$
24,196
(1)
Includes $24.9 million of cash held on deposit to
collateralize certain financial instruments. Of this amount,
$12.6 million was used to offset current risk management
liabilities under master netting arrangements and the remaining
$12.3 million is classified as current risk management
assets.
(2)
Includes $11.7 million of cash held on deposit to
collateralize certain financial instruments which is classified
as current risk management assets.
84
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85
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86
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Natural
Pipeline,
Hedge
Natural Gas
Gas
Storage
Contract Type
Designation
Distribution
Marketing
and Other
Quantity (MMcf)
Fair Value
(13,785
)
(1,770
)
Cash Flow
38,158
(1,480
)
Not designated
34,276
34,779
1,255
34,276
59,152
(1,995
)
87
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Natural
Natural
Gas
Gas
Distribution
Marketing
(1)
Total
(In thousands)
Other current assets
$
$
40,030
$
40,030
Deferred charges and other assets
2,461
2,461
Other current liabilities
(56,575
)
(56,575
)
Deferred credits and other liabilities
(9,222
)
(9,222
)
(23,306
)
(23,306
)
Other current assets
2,219
16,459
18,678
Deferred charges and other assets
47
2,056
2,103
Other current liabilities
(48,942
)
(7,178
)
(56,120
)
Deferred credits and other liabilities
(2,924
)
(405
)
(3,329
)
(49,600
)
10,932
(38,668
)
$
(49,600
)
$
(12,374
)
$
(61,974
)
(1)
Our pipeline, storage and other segment uses financial
instruments acquired from AEM on the same terms that AEM
received from an independent counterparty. On a consolidated
basis, these financial instruments are reported in the natural
gas marketing segment; however, the underlying hedged item is
reported in the pipeline, storage and other segment.
88
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Natural
Natural
Gas
Gas
Distribution
Marketing
(1)
Total
(In thousands)
Other current assets
$
$
53,526
$
53,526
Deferred charges and other assets
6,800
6,800
Other current liabilities
(47,146
)
(47,146
)
Deferred credits and other liabilities
(999
)
(999
)
12,181
12,181
Other current assets
4,395
27,559
31,954
Deferred charges and other assets
1,620
7,964
9,584
Other current liabilities
(20,181
)
(19,657
)
(39,838
)
Deferred credits and other liabilities
(1,349
)
(1,349
)
(14,166
)
14,517
351
$
(14,166
)
$
26,698
$
12,532
(1)
Our pipeline, storage and other segment uses financial
instruments acquired from AEM on the same terms that AEM
received from an independent counterparty. On a consolidated
basis, these financial instruments are reported in the natural
gas marketing segment; however, the underlying hedged item is
reported in the pipeline, storage and other segment.
Table of Contents
Fiscal Year Ended September 30, 2010
Natural Gas
Pipeline, Storage
Marketing
and Other
Consolidated
(In thousands)
$
31,397
$
3,253
$
34,650
16,557
3,310
19,867
$
47,954
$
6,563
$
54,517
$
(1,272
)
$
$
(1,272
)
49,226
6,563
55,789
$
47,954
$
6,563
$
54,517
Fiscal Year Ended September 30, 2009
Natural Gas
Pipeline, Storage
Marketing
and Other
Consolidated
(In thousands)
$
37,967
$
7,153
$
45,120
(25,501
)
(3,330
)
(28,831
)
$
12,466
$
3,823
$
16,289
$
5,958
$
$
5,958
6,508
3,823
10,331
$
12,466
$
3,823
$
16,289
Fiscal Year Ended September 30, 2008
Natural Gas
Pipeline, Storage
Marketing
and Other
Consolidated
(In thousands)
$
30,572
$
4,941
$
35,513
6,281
482
6,763
$
36,853
$
5,423
$
42,276
$
(2,841
)
$
$
(2,841
)
39,694
5,423
45,117
$
36,853
$
5,423
$
42,276
90
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Fiscal Year Ended September 30, 2010
Natural
Pipeline,
Gas
Natural Gas
Storage
Distribution
Marketing
and Other
Consolidated
(In thousands)
$
$
(48,095
)
$
3,286
$
(44,809
)
(2,717
)
(2,717
)
(50,812
)
3,286
(47,526
)
(2,678
)
(2,678
)
$
(2,678
)
$
(50,812
)
$
3,286
$
(50,204
)
Fiscal Year Ended September 30, 2009
Natural
Pipeline,
Gas
Natural Gas
Storage
Distribution
Marketing
and Other
Consolidated
(In thousands)
$
$
(162,283
)
$
25,743
$
(136,540
)
(9,888
)
(9,888
)
(172,171
)
25,743
(146,428
)
(4,070
)
(4,070
)
$
(4,070
)
$
(172,171
)
$
25,743
$
(150,498
)
91
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Fiscal Year Ended September 30, 2008
Natural
Pipeline,
Gas
Natural Gas
Storage
Distribution
Marketing
and Other
Consolidated
(In thousands)
$
$
(12,739
)
$
9,468
$
(3,271
)
3,720
3,720
(9,019
)
9,468
449
(5,076
)
(5,076
)
$
(5,076
)
$
(9,019
)
$
9,468
$
(4,627
)
Fiscal Year Ended
September 30
2010
2009
(In thousands)
$
343
$
1,221
(34,296
)
(72,683
)
1,687
2,385
27,333
83,290
$
(4,933
)
$
14,213
(1)
Utilizing an income tax rate of approximately 37 percent
comprised of the effective rates in each taxing jurisdiction.
Table of Contents
Treasury
Lock
Commodity
Agreements
Contracts
Total
(In thousands)
$
(1,687
)
$
(16,131
)
$
(17,818
)
(1,687
)
(3,265
)
(4,952
)
(1,687
)
(1,528
)
(3,215
)
(1,687
)
(1,178
)
(2,865
)
179
(7
)
172
758
758
$
(5,811
)
$
(22,109
)
$
(27,920
)
(1)
Utilizing an income tax rate of approximately 37 percent
comprised of the effective rates in each taxing jurisdiction.
Fiscal Year Ended
September 30
2010
2009
2008
(In thousands)
$
15,380
$
43,483
$
(37,200
)
2
(6,614
)
1,139
$
15,382
$
36,869
$
(36,061
)
5.
Fair
Value Measurements
Table of Contents
Quoted
Significant
Significant
Prices in
Other
Other
Netting
Active
Observable
Unobservable
and
Markets
Inputs
Inputs
Cash
September 30,
(Level 1)
(Level
2)
(1)
(Level 3)
Collateral
(2)
2010
(In thousands)
$
$
2,266
$
$
$
2,266
18,544
42,462
(41,760
)
19,246
18,544
44,728
(41,760
)
21,512
51,032
51,032
6,475
6,475
57,507
57,507
41,466
41,466
$
117,517
$
44,728
$
$
(41,760
)
$
120,485
$
$
51,866
$
$
$
51,866
41,430
31,950
(66,649
)
6,731
$
41,430
$
83,816
$
$
(66,649
)
$
58,597
94
Table of Contents
Quoted
Significant
Significant
Prices in
Other
Other
Netting
Active
Observable
Unobservable
and
Markets
Inputs
Inputs
Cash
September 30,
(Level 1)
(Level
2)
(1)
(Level 3)
Collateral
(3)
2009
(In thousands)
$
$
6,015
$
$
$
6,015
34,281
61,568
(56,186
)
39,663
34,281
67,583
(56,186
)
45,678
47,967
47,967
6,789
6,789
54,756
54,756
41,699
41,699
$
130,736
$
67,583
$
$
(56,186
)
$
142,133
$
$
20,181
$
$
$
20,181
48,268
20,883
(67,850
)
1,301
$
48,268
$
41,064
$
$
(67,850
)
$
21,482
(1)
Our Level 2 measurements primarily consist of
non-exchange-traded financial instruments, such as
over-the-counter
options and swaps where market data for pricing is observable.
The fair values for these assets and liabilities are determined
using a market-based approach in which observable market prices
are adjusted for criteria specific to each instrument, such as
the strike price, notional amount or basis differences.
(2)
This column reflects adjustments to our gross financial
instrument assets and liabilities to reflect netting permitted
under our master netting agreements and the relevant
authoritative accounting literature. In addition, as of
September 30, 2010 we had $24.9 million of cash held
in margin accounts to collateralize certain financial
instruments. Of this amount, $12.6 million was used to
offset current risk management liabilities under master netting
agreements and the remaining $12.3 million is classified as
current risk management assets.
(3)
This column reflects adjustments to our gross financial
instrument assets and liabilities to reflect netting permitted
under our master netting agreements and the relevant
authoritative accounting literature. In addition, as of
September 30, 2009 we had $11.7 million of cash held
in margin accounts to collateralize certain financial
instruments which has been classified as current risk management
assets.
(4)
Our pipeline, storage and other segment uses financial
instruments acquired from AEM on the same terms that AEM
received from an independent counterparty. On a consolidated
basis, these financial instruments are reported in the natural
gas marketing segment; however, the underlying hedged item is
reported in the pipeline, storage and other segment.
Table of Contents
September 30, 2010
(In thousands)
$
2,172,696
$
2,439,349
6.
Debt
2010
2009
(In thousands)
$
350,000
$
350,000
2,303
2,303
250,000
250,000
500,000
500,000
250,000
250,000
450,000
450,000
200,000
200,000
10,000
10,000
10,000
10,000
150,000
150,000
393
524
2,172,696
2,172,827
(3,014
)
(3,296
)
(360,131
)
(131
)
$
1,809,551
$
2,169,400
96
Table of Contents
97
Table of Contents
98
Table of Contents
$
360,131
2,434
250,131
500,000
1,060,000
$
2,172,696
99
Table of Contents
7.
Stock and
Other Compensation Plans
100
Table of Contents
2010
2009
2008
Weighted
Weighted
Weighted
Average
Average
Average
Number of
Grant-Date
Number of
Grant-Date
Number of
Grant-Date
Restricted
Fair
Restricted
Fair
Restricted
Fair
Shares
Value
Shares
Value
Shares
Value
1,295,841
$
27.23
1,096,770
$
29.04
948,717
$
28.95
551,278
29.07
711,909
25.76
547,845
27.90
(493,957
)
29.24
(499,267
)
29.05
(380,895
)
27.17
(59,202
)
26.54
(13,571
)
28.92
(18,897
)
29.32
1,293,960
$
27.28
1,295,841
$
27.23
1,096,770
$
29.04
101
Table of Contents
2010
2009
2008
Weighted
Weighted
Weighted
Average
Average
Average
Number of
Exercise
Number of
Exercise
Number of
Exercise
Options
Price
Options
Price
Options
Price
611,227
$
21.88
913,841
$
22.54
920,841
$
22.54
(176,265
)
20.44
(130,965
)
21.99
(7,000
)
21.90
(171,649
)
25.31
434,962
$
22.46
611,227
$
21.88
913,841
$
22.54
434,962
$
22.46
611,227
$
21.88
911,492
$
22.53
(1)
The weighted-average remaining contractual life for outstanding
options was 1.6 years, 2.4 years, and 3.4 years
for fiscal years 2010, 2009 and 2008. The aggregate intrinsic
value of outstanding options was $1.6 million,
$2.1 million and $3.3 million for fiscal years 2010,
2009 and 2008.
(2)
The weighted-average remaining contractual life for exercisable
options was 1.6 years, 2.4 years and 3.4 years
for fiscal years 2010, 2009 and 2008. The aggregate intrinsic
value of exercisable options was $1.6 million,
$2.1 million and $3.3 million for the fiscal years
2010, 2009 and 2008.
Options Outstanding and Exercisable
Weighted
Average
Weighted
Remaining
Average
Number of
Contractual Life
Exercise
Options
(In years)
Price
316,205
1.7
$
21.84
118,757
1.3
$
24.12
434,962
1.6
$
22.46
Fiscal Year Ended September 30
2010
2009
2008
(In thousands, except per share data)
$
$
$
$
3,604
$
2,880
$
153
$
547
$
177
$
12
$
239
$
262
$
26
102
Table of Contents
8.
Retirement
and Post-Retirement Employee Benefit Plans
103
Table of Contents
Supplemental
Defined
Executive
Postretirement
Benefits Plans
Retirement Plans
Plans
Total
(In thousands)
$
$
$
4,731
$
4,731
(842
)
(10,311
)
(11,153
)
159,539
30,753
25,694
215,986
$
158,697
$
30,753
$
20,114
$
209,564
$
$
$
6,242
$
6,242
(1,802
)
187
(11,761
)
(13,376
)
150,989
29,709
24,179
204,877
$
149,187
$
29,896
$
18,660
$
197,743
104
Table of Contents
105
Table of Contents
Actual Allocation
Targeted
September 30
Allocation Range
2010
2009
35%-55%
44.1
%
38.5
%
10%-20%
14.4
%
12.8
%
10%-30%
19.0
%
19.6
%
5%-15%
11.3
%
10.9
%
5%-15%
11.2
%
18.2
%
Pension Liability
Pension Cost
2010
2009
2010
2009
2008
5.39
%
5.52
%
5.52
%
7.57
%
6.30
%
4.00
%
4.00
%
4.00
%
4.00
%
4.00
%
8.25
%
8.25
%
8.25
%
8.25
%
8.25
%
106
Table of Contents
2010
2009
(In thousands)
$
391,915
$
366,770
$
380,045
$
337,640
(18,446
)
13,499
12,951
20,870
24,060
19,809
49,807
(26,687
)
(25,967
)
407,536
380,045
301,146
341,380
(34,935
)
27,249
(332
)
21,000
(26,687
)
(25,967
)
301,708
301,146
(105,828
)
(78,899
)
$
(105,828
)
$
(78,899
)
Fiscal Year Ended September 30
2010
2009
2008
(In thousands)
$
13,499
$
12,951
$
13,329
20,870
24,060
21,129
(25,280
)
(24,950
)
(25,242
)
(960
)
(946
)
(897
)
9,290
3,742
6,482
$
17,419
$
14,857
$
14,801
107
Table of Contents
Assets at Fair Value as of September 30, 2010
Level 1
Level 2
Level 3
Total
(In thousands)
$
116,315
$
$
$
116,315
10,013
10,013
32,601
32,601
48,920
48,920
5,548
16,296
21,844
33,987
33,987
37,691
37,691
200
200
$
154,464
$
146,907
$
200
$
301,571
108
Table of Contents
Pension Liability
Pension Cost
2010
2009
2010
2009
2008
5.39
%
5.52
%
5.52
%
7.57
%
6.30
%
4.00
%
4.00
%
4.00
%
4.00
%
4.00
%
2010
2009
(In thousands)
$
99,673
$
93,906
$
102,747
$
91,986
(8,569
)
2,476
1,985
5,224
6,056
3,043
22,366
(4,571
)
(12,722
)
1,645
108,919
102,747
4,571
12,722
(4,571
)
(12,722
)
(108,919
)
(102,747
)
$
(108,919
)
$
(102,747
)
109
Table of Contents
Gross
Gross
Amortized
Unrealized
Unrealized
Fair
Cost
Gain
Loss
Value
(In thousands)
$
29,540
$
5,698
$
$
35,238
4,753
976
5,729
499
499
$
34,792
$
6,674
$
$
41,466
$
26,012
$
3,012
$
$
29,024
4,047
893
4,940
7,735
7,735
$
37,794
$
3,905
$
$
41,699
Assets at Fair Value as of September 30, 2010
Level 1
Level 2
Level 3
Total
(In thousands)
$
$
499
$
$
499
40,967
40,967
$
40,967
$
499
$
$
41,466
Fiscal Year Ended September 30
2010
2009
2008
(In thousands)
$
2,476
$
1,985
$
2,184
5,224
6,056
5,816
187
212
212
1,999
324
1,222
1,645
$
9,886
$
10,222
$
9,434
110
Table of Contents
Supplemental Plans
2010
2009
(In thousands)
$
108,919
$
102,747
99,673
93,906
Pension
Supplemental
Plans
Plans
(In thousands)
$
31,345
$
7,513
30,586
24,751
29,714
6,820
29,188
4,709
29,405
6,449
141,335
42,766
111
Table of Contents
Actual Allocation
September 30
2010
2009
97.5
%
98.1
%
2.5
%
1.9
%
Postretirement
Postretirement
Liability
Cost
2010
2009
2010
2009
2008
5.39
%
5.52
%
5.52
%
7.57
%
6.30
%
5.00
%
5.00
%
5.00
%
5.00
%
5.00
%
8.00
%
7.50
%
7.50
%
8.00
%
8.00
%
5.00
%
5.00
%
5.00
%
5.00
%
5.00
%
2016
2014
2015
2015
2011
112
Table of Contents
2010
2009
(In thousands)
$
209,732
$
193,997
(15,024
)
13,439
11,786
12,071
14,080
2,734
2,741
2,980
24,334
(12,722
)
(10,537
)
116
(11,761
)
228,234
209,732
47,646
48,072
(4,128
)
3,551
1,394
11,824
10,104
2,734
2,741
(12,722
)
(10,537
)
53,033
47,646
(175,201
)
(162,086
)
$
(175,201
)
$
(162,086
)
113
Table of Contents
Fiscal Year Ended September 30
2010
2009
2008
(In thousands)
$
13,439
$
11,786
$
13,367
12,071
14,080
11,648
(2,460
)
(2,292
)
(2,861
)
1,511
1,511
1,511
(1,450
)
374
$
23,485
$
25,085
$
23,665
One-Percentage
One-Percentage
Point Increase
Point Decrease
(In thousands)
$
3,802
$
(3,178
)
$
26,219
$
(22,219
)
Assets at Fair Value as of September 30, 2010
Level 1
Level 2
Level 3
Total
(In thousands)
$
$
1,307
$
$
1,307
51,726
51,726
$
51,726
$
1,307
$
$
53,033
114
Table of Contents
Total
Company
Retiree
Subsidy
Postretirement
Payments
Payments
Payments
Benefits
(In thousands)
$
13,006
$
2,931
$
$
15,937
11,624
3,429
15,053
12,960
3,848
16,808
14,378
4,294
18,672
15,504
4,713
20,217
87,039
31,041
118,080
115
Table of Contents
9.
Details
of Selected Consolidated Balance Sheet Captions
September 30
2010
2009
(In thousands)
$
223,129
$
179,667
47,423
42,618
15,356
21,999
285,908
244,284
(12,701
)
(11,478
)
$
273,207
$
232,806
116
Table of Contents
September 30
2010
2009
(In thousands)
$
20,575
$
31,643
22,701
22,233
19,382
15,115
53,926
24,754
21,807
2,973
2,973
3,940
3,349
19,925
2,744
15,158
$
150,995
$
132,203
September 30
2010
2009
(In thousands)
$
17,360
$
23,359
193,155
156,466
1,108,398
1,029,487
4,339,277
4,103,531
671,953
614,324
54,253
54,253
6,384,396
5,981,420
157,922
105,198
6,542,318
6,086,618
(1,749,243
)
(1,647,515
)
$
4,793,075
$
4,439,103
117
Table of Contents
September 30
2010
2009
(In thousands)
$
41,466
$
41,699
254,809
251,242
35,761
40,854
937
14,035
22,403
11,146
$
355,376
$
358,976
September 30
2010
2009
(In thousands)
$
63,733
$
69,966
40,642
40,582
43,333
110,754
42,901
46,495
49,673
21,482
56,616
49,821
14,815
28,712
30,953
14,342
9,054
70,974
66,111
$
413,640
$
457,319
118
Table of Contents
September 30
2010
2009
(In thousands)
$
167,899
$
154,784
207,234
160,236
15,466
16,907
6,112
7,960
11,432
13,037
6,731
6,731
8,924
6,366
8,503
$
430,164
$
368,158
10.
Earnings
Per Share
119
Table of Contents
2010
2009
2008
(In thousands, except per share data)
$
205,839
$
190,978
$
180,331
2,106
1,784
1,387
$
203,733
$
189,194
$
178,944
91,852
91,117
89,385
$
2.22
$
2.08
$
2.00
$
203,733
$
189,194
$
178,944
5
4
3
$
203,738
$
189,198
$
178,947
91,852
91,117
89,385
570
503
556
92,422
91,620
89,941
$
2.20
$
2.07
$
1.99
11.
Income
Taxes
2010
2009
2008
(In thousands)
$
(73,794
)
$
(37,042
)
$
7,161
6,133
7,964
7,696
184,800
138,959
85,573
11,931
(9,200
)
12,367
(283
)
(390
)
(424
)
$
128,787
$
100,291
$
112,373
120
Table of Contents
2010
2009
2008
(In thousands)
$
117,119
$
101,944
$
102,446
(1,785
)
(1,591
)
(1,363
)
(2
)
(153
)
11,742
(803
)
12,523
1,713
894
(1,233
)
$
128,787
$
100,291
$
112,373
2010
2009
(In thousands)
$
$
6,771
9,182
7,664
5,723
6,256
43,427
41,359
57,386
53,074
3,211
4,404
183
192
217
834
63,621
1,997
2,159
4,561
6,311
189,670
128,862
(940,914
)
(672,763
)
(14,936
)
(21,379
)
(6,473
)
(2,459
)
(219
)
(195
)
(2,330
)
(12,060
)
(964,872
)
(708,856
)
$
(775,202
)
$
(579,994
)
$
587
$
2,253
121
Table of Contents
12.
Commitments
and Contingencies
122
Table of Contents
$
264,525
74,351
5,407
1,903
$
346,186
Pipeline,
Natural Gas
Storage and
Marketing
Other
$
18,438
$
3,572
13,528
2,082
8,557
1,820
4,843
1,820
2,916
910
241
$
48,523
$
10,204
123
Table of Contents
13.
Leases
Minimum
Lease
Receipts
(In thousands)
$
2,973
2,973
1,903
$
7,849
124
Table of Contents
Capital
Operating
Leases
Leases
(In thousands)
$
186
$
18,240
186
17,356
186
16,051
186
15,958
186
15,249
450
134,330
1,380
$
217,184
497
$
883
14.
Concentration
of Credit Risk
125
Table of Contents
September 30, 2010
September 30, 2009
47
%
53
%
53
%
47
%
100
%
100
%
Natural Gas
Natural Gas
Distribution
Marketing
Segment
(1)
Segment
Consolidated
(In thousands)
$
$
973
$
973
5,959
5,959
$
$
6,932
$
6,932
(1)
Counterparty risk for our natural gas distribution segment is
minimized because hedging gains and losses are passed through to
our customers.
15.
Supplemental
Cash Flow Disclosures
2010
2009
2008
(In thousands)
$
161,925
$
163,554
$
139,958
$
(63,677
)
$
(36,405
)
$
3,483
126
Table of Contents
16.
Segment
Information
The
natural gas distribution segment
, which includes our
regulated natural gas distribution and related sales operations.
The
regulated transmission and storage segment
, which
includes the regulated pipeline and storage operations of the
Atmos Pipeline Texas Division.
The
natural gas marketing segment
, which includes a
variety of nonregulated natural gas management services.
The
pipeline, storage and other segment
, which includes
our nonregulated natural gas transmission and storage services.
127
Table of Contents
Year Ended September 30, 2010
Regulated
Pipeline,
Natural Gas
Transmission
Natural Gas
Storage
Distribution
and Storage
Marketing
and Other
Eliminations
Consolidated
(In thousands)
$
2,911,623
$
97,023
$
1,754,523
$
26,521
$
$
4,789,690
870
105,990
396,741
8,797
(512,398
)
2,912,493
203,013
2,151,264
35,318
(512,398
)
4,789,690
1,863,046
2,065,313
7,178
(510,788
)
3,424,749
1,049,447
203,013
85,951
28,140
(1,610
)
1,364,941
362,882
72,249
26,390
8,127
(1,610
)
468,038
190,518
21,368
2,450
2,624
216,960
173,593
12,358
2,859
1,697
190,507
726,993
105,975
31,699
12,448
(1,610
)
875,505
322,454
97,038
54,252
15,692
489,436
1,384
135
2,280
3,083
(7,221
)
(339
)
118,430
31,174
9,280
2,808
(7,221
)
154,471
205,408
65,999
47,252
15,967
334,626
79,459
24,513
19,523
5,292
128,787
$
125,949
$
41,486
$
27,729
$
10,675
$
$
205,839
$
437,815
$
95,835
$
5,410
$
3,576
$
$
542,636
128
Table of Contents
Year Ended September 30, 2009
Regulated
Pipeline,
Natural Gas
Transmission
Natural Gas
Storage
Distribution
and Storage
Marketing
and Other
Eliminations
Consolidated
(In thousands)
$
2,983,966
$
119,427
$
1,832,912
$
32,775
$
$
4,969,080
799
90,231
503,935
9,149
(604,114
)
2,984,765
209,658
2,336,847
41,924
(604,114
)
4,969,080
1,960,137
2,252,235
12,428
(602,422
)
3,622,378
1,024,628
209,658
84,612
29,496
(1,692
)
1,346,702
369,429
85,249
34,201
7,167
(2,036
)
494,010
192,274
20,413
1,590
2,931
217,208
169,312
10,231
2,271
886
182,700
4,599
602
146
35
5,382
735,614
116,495
38,208
11,019
(2,036
)
899,300
289,014
93,163
46,404
18,477
344
447,402
5,766
1,433
537
6,253
(17,292
)
(3,303
)
124,055
30,982
12,911
1,830
(16,948
)
152,830
170,725
63,614
34,030
22,900
291,269
53,918
22,558
13,836
9,979
100,291
$
116,807
$
41,056
$
20,194
$
12,921
$
$
190,978
$
379,500
$
108,332
$
242
$
21,420
$
$
509,494
Table of Contents
Year Ended September 30, 2008
Regulated
Pipeline,
Natural Gas
Transmission
Natural Gas
Storage
Distribution
and Storage
Marketing
and Other
Eliminations
Consolidated
(In thousands)
$
3,654,338
$
108,116
$
3,436,563
$
22,288
$
$
7,221,305
792
87,801
851,299
9,421
(949,313
)
3,655,130
195,917
4,287,862
31,709
(949,313
)
7,221,305
2,649,064
4,194,841
3,396
(947,322
)
5,899,979
1,006,066
195,917
93,021
28,313
(1,991
)
1,321,326
389,244
77,439
30,903
4,983
(2,335
)
500,234
177,205
19,899
1,546
1,792
200,442
178,452
8,834
4,180
1,289
192,755
744,901
106,172
36,629
8,064
(2,335
)
893,431
261,165
89,745
56,392
20,249
344
427,895
9,689
1,354
2,022
8,428
(18,762
)
2,731
117,933
27,049
9,036
2,322
(18,418
)
137,922
152,921
64,050
49,378
26,355
292,704
60,273
22,625
19,389
10,086
112,373
$
92,648
$
41,425
$
29,989
$
16,269
$
$
180,331
$
386,542
$
75,071
$
340
$
10,320
$
$
472,273
2010
2009
2008
(In thousands)
$
1,826,752
$
1,830,140
$
2,131,447
808,981
838,184
1,077,056
112,366
135,633
212,531
70,580
89,183
137,821
2,818,679
2,893,140
3,558,855
61,384
59,115
59,712
31,560
31,711
35,771
2,911,623
2,983,966
3,654,338
97,023
119,427
108,116
1,754,523
1,832,912
3,436,563
26,521
32,775
22,288
$
4,789,690
$
4,969,080
$
7,221,305
Table of Contents
131
Table of Contents
132
Table of Contents
17.
Selected
Quarterly Financial Data (Unaudited)
Quarter Ended
December 31
March 31
June 30
September 30
(In thousands, except per share data)
$
802,894
$
1,365,988
$
405,271
$
338,340
46,860
55,181
44,957
56,015
544,271
692,152
421,406
493,435
11,623
9,050
8,196
6,449
(112,796
)
(182,105
)
(109,573
)
(107,924
)
1,292,852
1,940,266
770,257
786,315
410,849
454,321
253,228
246,543
190,596
224,540
34,109
40,191
93,330
114,126
(3,154
)
1,537
$
1.00
$
1.22
$
(0.03
)
$
0.02
$
1.00
$
1.22
$
(0.03
)
$
0.02
$
1,055,968
$
1,230,420
$
386,985
$
311,392
54,682
59,234
49,345
46,397
787,495
708,658
453,504
387,190
16,448
12,272
8,226
4,978
(198,261
)
(189,178
)
(117,285
)
(99,390
)
1,716,332
1,821,406
780,775
650,567
395,212
460,051
259,640
231,799
163,194
226,547
43,683
13,978
75,963
129,003
1,964
(15,952
)
$
0.83
$
1.41
$
0.02
$
(0.17
)
$
0.83
$
1.40
$
0.02
$
(0.17
)
133
Table of Contents
ITEM 9.
Changes
in and Disagreements With Accountants on Accounting and
Financial Disclosure.
ITEM 9A.
Controls
and Procedures.
Kim R. Cocklin
Fred E. Meisenheimer
President and Chief Executive Officer
Senior Vice President,
Chief Financial Officer and Treasurer
134
Table of Contents
Atmos Energy Corporation
135
Table of Contents
ITEM 9B.
Other
Information.
ITEM 10.
Directors,
Executive Officers and Corporate Governance.
ITEM 11.
Executive
Compensation.
ITEM 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
ITEM 13.
Certain
Relationships and Related Transactions, and Director
Independence.
ITEM 14.
Principal
Accountant Fees and Services.
136
Table of Contents
ITEM 15.
Exhibits
and Financial Statement Schedules.
3.
Exhibits
137
Table of Contents
By:
138
Table of Contents
President, Chief Executive Officer and Director
November 12, 2010
Senior Vice President, Chief Financial Officer and Treasurer
November 12, 2010
Vice President and Controller (Principal Accounting Officer)
November 12, 2010
Executive Chairman of the Board
November 12, 2010
Director
November 12, 2010
Director
November 12, 2010
Director
November 12, 2010
Director
November 12, 2010
Director
November 12, 2010
Director
November 12, 2010
Director
November 12, 2010
Director
November 12, 2010
139
Table of Contents
Director
November 12, 2010
Director
November 12, 2010
Director
November 12, 2010
140
Table of Contents
Additions
Balance at
Charged to
Charged to
Balance
Beginning
Cost &
Other
at End
of Period
Expenses
Accounts
Deductions
of Period
(In thousands)
$
11,478
$
7,694
$
$
6,471
(1)
$
12,701
$
15,301
$
7,769
$
$
11,592
(1)
$
11,478
$
16,160
$
15,655
$
$
16,514
(1)
$
15,301
(1)
Uncollectible accounts written off.
141
Table of Contents
Item 14.(a)(3)
Page Number or
Exhibit
Incorporation by
Articles of Incorporation and Bylaws
3
.1
Restated Articles of Incorporation of Atmos Energy
Corporation Texas (As Amended Effective
February 3, 2010)
Exhibit 3.1 to Form 10-Q dated March 31, 2010 (File No. 1-10042)
3
.2
Restated Articles of Incorporation of Atmos Energy
Corporation Virginia (As Amended Effective
February 3, 2010)
Exhibit 3.2 to Form 10-Q dated March 31, 2010 (File No. 1-10042)
3
.3
Amended and Restated Bylaws of Atmos Energy Corporation (as of
February 3, 2010)
Exhibit 3.2 of Form 8-K dated February 3, 2010 (File No. 1-10042)
Instruments Defining Rights of Security Holders
4
.1
Specimen Common Stock Certificate (Atmos Energy Corporation)
4
.2
Indenture dated as of November 15, 1995 between United
Cities Gas Company and Bank of America Illinois, Trustee
Exhibit 4.11(a) to Form S-3 dated August 31, 2004 (File No.
333-118706)
4
.3
Indenture dated as of July 15, 1998 between Atmos Energy
Corporation and U.S. Bank Trust National Association,
Trustee
Exhibit 4.8 to Form S-3 dated August 31, 2004 (File No.
333-118706)
4
.4
Indenture dated as of May 22, 2001 between Atmos Energy
Corporation and SunTrust Bank, Trustee
Exhibit 99.3 to Form 8-K dated May 15, 2001 (File No. 1-10042)
4
.5
Indenture dated as of June 14, 2007, between Atmos Energy
Corporation and U.S. Bank National Association, Trustee
Exhibit 4.1 to Form 8-K dated June 11, 2007 (File No. 1-10042)
4
.6
Indenture dated as of March 23, 2009 between Atmos Energy
Corporation and U.S. Bank National Corporation, Trustee
Exhibit 4.1 to Form 8-K dated March 26, 2009 (File No. 1-10042)
4
.7(a)
Debenture Certificate for the
6
3
/
4
% Debentures
due 2028
Exhibit 99.2 to Form 8-K dated July 22, 1998 (File No. 1-10042)
4
.7(b)
Global Security for the
7
3
/
8
% Senior
Notes due 2011
Exhibit 99.2 to Form 8-K dated May 15, 2001 (File No. 1-10042)
4
.7(c)
Global Security for the
5
1
/
8
% Senior
Notes due 2013
Exhibit 10(2)(c) to Form 10-K for fiscal year ended September
30, 2004 (File No. 1-10042)
4
.7(d)
Global Security for the 4.95% Senior Notes due 2014
Exhibit 10(2)(f) to Form 10-K for fiscal year ended September
30, 2004 (File No. 1-10042)
4
.7(e)
Global Security for the 5.95% Senior Notes due 2034
Exhibit 10(2)(g) to Form 10-K for fiscal year ended September
30, 2004 (File No. 1-10042)
4
.7(f)
Global Security for the 6.35% Senior Notes due 2017
Exhibit 4.2 to Form 8-K dated June 11, 2007 (File No. 1-10042)
4
.7(g)
Global Security for the 8.50% Senior Notes due 2019
Exhibit 4.2 to Form 8-K dated March 26, 2009 (File No. 1-10042)
142
Table of Contents
Page Number or
Exhibit
Incorporation by
Material Contracts
10
.1
Pipeline Construction and Operating Agreement, dated
November 30, 2005, by and between Atmos-Pipeline Texas, a
division of Atmos Energy Corporation, a Texas and Virginia
corporation and Energy Transfer Fuel, LP, a Delaware limited
partnership
Exhibit 10.1 to Form 8-K dated November 30, 2005 (File No.
1-10042)
10
.2
Revolving Credit Agreement (5 Year Facility), dated as of
December 15, 2006, among Atmos Energy Corporation, SunTrust
Bank, as Administrative Agent, Wachovia Bank, N.A. as
Syndication Agent and Bank of America, N.A., JPMorgan Chase
Bank, N.A., and the Royal Bank of Scotland plc as
Co-Documentation Agents, and the lenders from time to time
parties thereto
Exhibit 10.1 to Form 8-K dated December 15, 2006 (File No.
1-10042)
10
.3
Revolving Credit Agreement (364 Day Facility), dated as of
October 22, 2009, among Atmos Energy Corporation, the
Lenders from time to time parties thereto, SunTrust Bank as
Administrative Agent, Wells Fargo Bank, N.A. as Syndication
Agent, and Bank of America, N.A. and U.S. Bank National
Association as co-Documentation Agents
Exhibit 10.1 to Form 8-K dated October 22, 2009 (File No.
1-10042)
10
.4
Revolving Credit Agreement (180 Day Facility), dated as of
October 15, 2010, among Atmos Energy Corporation, the
Lenders from time to time parties thereto, SunTrust Bank as
Administrative Agent, Wells Fargo Bank, N.A. as Syndication
Agent, and Bank of America, N.A. and U.S. Bank National
Association as co-Documentation Agents
Exhibit 10.1 to Form 8-K dated October 15, 2010 (File No.
1-10042)
10
.5(a)
Fourth Amended and Restated Credit Agreement, dated as of
December 10, 2009, among Atmos Energy Marketing, LLC, a
Delaware limited liability company, BNP Paribas, a bank
organized under the laws of France, as administrative agent,
collateral agent, as an issuing bank and as a bank, Fortis Bank
SA/NV, New York Branch, a bank organized under the laws of
Belgium, as documentation agent, as an issuing bank and as a
bank, Société Générale, as syndication
agent, as an issuing bank and as a bank and the other financial
institutions which may become parties thereto
Exhibit 10.1 to Form 8-K dated December 10, 2009 (File No.
1-10042)
10
.5(b)
Second Amended and Restated Intercreditor Agreement, dated as of
December 10, 2009, among BNP Paribas and the other
financial institutions which may become parties thereto
Exhibit 10.2 to Form 8-K dated December 10, 2009 (File No.
1-10042)
Table of Contents
Page Number or
Exhibit
Incorporation by
10
.6(a)
Accelerated Share Buyback Agreement with Goldman,
Sachs & Co. Master Confirmation dated
July 1, 2010
10
.6(b)
Accelerated Share Buyback Agreement with Goldman,
Sachs & Co. Supplemental Confirmation
dated July 1, 2010
Executive Compensation Plans and
Arrangements
10
.7(a)*
Form of Atmos Energy Corporation Change in Control Severance
Agreement Tier I
10
.7(b)*
Form of Atmos Energy Corporation Change in Control Severance
Agreement Tier II
10
.8(a)*
Atmos Energy Corporation Executive Retiree Life Plan
Exhibit 10.31 to Form 10-K for fiscal year ended September 30,
1997 (File No. 1-10042)
10
.8(b)*
Amendment No. 1 to the Atmos Energy Corporation Executive
Retiree Life Plan
Exhibit 10.31(a) to Form 10-K for fiscal year ended September
30, 1997 (File No. 1-10042)
10
.9(a)*
Description of Financial and Estate Planning Program
Exhibit 10.25(b) to Form 10-K for fiscal year ended September
30, 1997 (File No. 1-10042)
10
.9(b)*
Description of Sporting Events Program
Exhibit 10.26(c) to Form 10-K for fiscal year ended September
30, 1993 (File No. 1-10042)
10
.10(a)*
Atmos Energy Corporation Supplemental Executive Benefits Plan,
Amended and Restated in its Entirety August 7, 2007
Exhibit 10.8(a) to Form 10-K for fiscal year ended September 30,
2008 (File No. 1-10042)
10
.10(b)*
Atmos Energy Corporation Supplemental Executive Retirement Plan
(As Amended and Restated, Effective as of November 12, 2009)
10
.10(c)*
Atmos Energy Corporation Account Balance Supplemental Executive
Retirement Plan, Effective Date August 5, 2009
10
.10(d)*
Atmos Energy Corporation Performance-Based Supplemental
Executive Benefits Plan Trust Agreement, Effective Date
December 1, 2000
Exhibit 10.1 to Form 10-Q for quarter ended December 31, 2000
(File No. 1-10042)
10
.10(e)*
Form of Individual Trust Agreement for the Supplemental
Executive Benefits Plan
Exhibit 10.3 to Form 10-Q for quarter ended December 31, 2000
(File No. 1-10042)
10
.11(a)*
Mini-Med/Dental Benefit Extension Agreement dated
October 1, 1994
Exhibit 10.28(f) to Form 10-K for fiscal year ended September
30, 2001 (File No. 1-10042)
10
.11(b)*
Amendment No. 1 to Mini-Med/Dental Benefit Extension
Agreement dated August 14, 2001
Exhibit 10.28(g) to Form 10-K for fiscal year ended September
30, 2001 (File No. 1-10042)
10
.11(c)*
Amendment No. 2 to Mini-Med/Dental Benefit Extension
Agreement dated December 31, 2002
Exhibit 10.1 to Form 10-Q for quarter ended December 31, 2002
(File No. 1-10042)
10
.12*
Atmos Energy Corporation Equity Incentive and Deferred
Compensation Plan for Non-Employee Directors, Amended and
Restated as of January 1, 2010
Table of Contents
Page Number or
Exhibit
Incorporation by
10
.13*
Atmos Energy Corporation Outside Directors
Stock-for-Fee
Plan, Amended and Restated as of October 1, 2009
10
.14(a)*
Atmos Energy Corporation 1998 Long-Term Incentive Plan (as
amended and restated February 9, 2007)
Exhibit 10.2 to Form 10-Q for quarter ended March 31, 2007 (File
No. 1-10042)
10
.14(b)*
Amendment No. 1 to Atmos Energy Corporation 1998 Long-Term
Incentive Plan (as amended and restated February 9, 2007)
Exhibit 10.12(b) to Form 10-K for fiscal year ended September
30, 2008 (File No. 1-10042)
10
.14(c)*
Form of Non-Qualified Stock Option Agreement under the Atmos
Energy Corporation 1998 Long-Term Incentive Plan
Exhibit 10.16(b) to Form 10-K for fiscal year ended September
30, 2005 (File No. 1-10042)
10
.14(d)*
Form of Award Agreement of Restricted Stock With Time-Lapse
Vesting under the Atmos Energy Corporation 1998 Long-Term
Incentive Plan
Exhibit 10.12(d) to Form 10-K for fiscal year ended September
30, 2008 (File No. 1-10042)
10
.14(e)*
Form of Award Agreement of Time-Lapse Restricted Stock Units
under the Atmos Energy Corporation 1998 Long-Term Incentive Plan
10
.14(f)*
Form of Award Agreement of Performance-Based Restricted Stock
Units under the Atmos Energy Corporation 1998 Long-Term
Incentive Plan
10
.15*
Atmos Energy Corporation Annual Incentive Plan for Management
(as amended and restated October 1, 2009)
12
Statement of computation of ratio of earnings to fixed charges
Other Exhibits, as indicated
21
Subsidiaries of the registrant
23
.1
Consent of independent registered public accounting firm,
Ernst & Young LLP
24
Power of Attorney
Signature page of Form 10-K for fiscal year ended September 30,
2010
31
Rule 13a-14(a)/15d-14(a)
Certifications
32
Section 1350 Certifications**
101
.INS
XBRL Instance Document***
101
.SCH
XBRL Taxonomy Extension Schema***
101
.CAL
XBRL Taxonomy Extension Calculation Linkbase***
101
.DEF
XBRL Taxonomy Extension Definition Linkbase***
101
.LAB
XBRL Taxonomy Extension Labels Linkbase***
101
.PRE
XBRL Taxonomy Extension Presentation Linkbase***
*
This exhibit constitutes a management contract or
compensatory plan, contract, or arrangement.
Table of Contents
**
These certifications pursuant to 18 U.S.C.
Section 1350 by the Companys Chief Executive Officer
and Chief Financial Officer, furnished as Exhibit 32 to
this Annual Report on Form
10-K,
will
not be deemed to be filed with the Securities and Exchange
Commission or incorporated by reference into any filing by the
Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company
specifically incorporates such certifications by reference.
***
Pursuant to Rule 406T of
Regulation S-T,
the Interactive Data Files on Exhibit 101 hereto are deemed
not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of
1933, as amended, are deemed not filed for purposes of Section
18 of the Securities and Exchange Act of 1934, as amended, and
otherwise are not subject to liability under those sections.
146
TEN COM
|
| as tenants in common | UNIF GIFT MIN ACT | Custodian | ||||
TEN ENT
|
| as tenants by the entireties | (Cust) (Minor) | |||||
JT TEN
|
| as joint tenants with right of | under Uniform Gifts to Minors | |||||
|
survivorship and not as tenants in common |
Act
(State) |
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE |
||
|
|
Shares | |
of the Common stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint
|
||
|
Attorney | |
|
||
|
X | |||||
|
||||||
|
NOTICE:
THE SIGNATURE(S) TO THIS
ASSIGNMENT MUST CORRESPOND
WITH THE NAME(S) AS WRITTEN UPON THE FACE OF
THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR
ANY CHANGE WHATEVER.
|
→
|
(SIGNATURE) | |||
|
X | |||||
|
||||||
|
(SIGNATURE) |
|
||||
|
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS STOCKBROKERS. SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM) PURSUANT TO S.E.C. RULE 17Ad-15. | |||
|
||||
|
SIGNATURE(S) GUARANTEED BY: | |||
|
||||
|
To:
|
Atmos Energy Corporation
P.O. Box 650205 Dallas, Texas 75265-0205 |
|
|
||
A/C:
|
042235028 | |
|
||
From:
|
Goldman, Sachs & Co. | |
|
||
Re:
|
Accelerated Stock Buyback | |
|
||
Ref. No:
|
As provided in the Supplemental Confirmation | |
|
||
Date:
|
July 1, 2010 |
General Terms:
|
||
|
||
Trade Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation. | |
|
||
Buyer:
|
Counterparty | |
|
||
Seller:
|
GS&Co. | |
|
||
Shares:
|
Common stock, no par value, of Counterparty (Ticker: ATO). | |
|
||
Exchange:
|
New York Stock Exchange | |
|
||
Related Exchange(s):
|
All Exchanges. | |
|
||
Prepayment\Variable
Obligation:
|
Applicable | |
|
||
Prepayment Amount:
|
For each Transaction, as set forth in the related Supplemental Confirmation. | |
|
||
Prepayment Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation. | |
|
||
Counterparty Additional
Payment Amount:
|
For each Transaction, as set forth in the Supplemental Confirmation. Counterparty shall pay to GS&Co. the Counterparty Additional Payment Amount, if any, on the Counterparty Additional Payment Date. | |
|
||
Counterparty Additional
Payment Date:
|
Three (3) Exchange Business Days following the Trade Date. | |
|
||
Valuation:
|
||
|
||
VWAP Price:
|
For any Exchange Business Day, the New York 10b-18 Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the end of any extension of the regular trading session) on such Exchange Business Day, on Bloomberg page ATO.N |
2
|
<Equity> AQR SEC (or any successor thereto), or if such price is not so reported on such Exchange Business Day for any reason or is, in the Calculation Agents reasonable discretion, erroneous, such VWAP Price shall be as reasonably determined by the Calculation Agent. For purposes of calculating the VWAP Price, the Calculation Agent will include only those trades that are reported during the period of time during which Counterparty could purchase its own shares under Rule 10b-18(b)(2) and are effected pursuant to the conditions of Rule 10b-18(b)(3), each under the Securities Exchange Act of 1934, as amended (the Exchange Act ) (such trades, Rule 10b-18 eligible transactions ). | |
|
||
Forward Price:
|
The average of the VWAP Prices for the Exchange Business Days in the Calculation Period, subject to Valuation Disruption below. | |
|
||
Forward Price
Adjustment Amount:
|
For each Transaction, as set forth in the related Supplemental Confirmation. | |
|
||
Calculation Period:
|
The period from and including the Calculation Period Start Date to and including the Termination Date. | |
|
||
Calculation Period Start Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation. | |
|
||
Termination Date:
|
The Scheduled Termination Date; provided that GS&Co. shall have the right to designate any Exchange Business Day on or after the First Acceleration Date to be the Termination Date (the Accelerated Termination Date ) by delivering notice to Counterparty of any such designation prior to 5:00 p.m. New York City time on the Exchange Business Day immediately following the designated Accelerated Termination Date. | |
|
||
Scheduled Termination Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation, subject to postponement as provided in Valuation Disruption below. | |
|
||
First Acceleration Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation. | |
|
||
Valuation Disruption:
|
The definition of Market Disruption Event in Section 6.3(a) of the
Equity Definitions is hereby amended by deleting the words at any time during the one-hour
period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation
Time or Knock-out Valuation Time, as the case may be and inserting the words at any time
on any Scheduled Trading Day during the Calculation Period or Settlement Valuation Period
after the word material, in the third line thereof.
Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term Scheduled Closing Time in the fourth line thereof. |
|
|
||
|
Notwithstanding anything to the contrary in the Equity Definitions, to the extent that a Disrupted Day occurs (i) in the Calculation Period, the Calculation Agent may, in its good faith and commercially reasonable discretion, postpone the Scheduled Termination Date by no more than such number of Disrupted Days, or (ii) in the Settlement Valuation Period, the Calculation Agent may extend the Settlement Valuation Period by no more than such number of Disrupted Days. If any such Disrupted Day is a Disrupted Day because of a Market Disruption Event (or a deemed Market Disruption Event as provided herein), the Calculation Agent shall determine whether (i) such Disrupted Day is a Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall not be included for purposes of determining the Forward Price or the Settlement Price, |
3
|
as the case may be, or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day effected before the relevant Market Disruption Event occurred and/or after the relevant Market Disruption Event ended, and the weighting of the VWAP Price for the relevant Exchange Business Days during the Calculation Period or the Settlement Valuation Period, as the case may be, shall be adjusted in a commercially reasonable manner by the Calculation Agent for purposes of determining the Forward Price or the Settlement Price, as the case may be, with such adjustments based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares. Any Scheduled Trading Day on which the Exchange is scheduled to close prior to its normal close of trading shall be deemed to be a Disrupted Day in full. | |
|
||
|
If a Disrupted Day occurs during the Calculation Period or the Settlement Valuation Period, as the case may be, and each of the nine immediately following Scheduled Trading Days is a Disrupted Day, then the Calculation Agent, in its good faith and commercially reasonable discretion, may deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not a Disrupted Day and determine the VWAP Price for such ninth Scheduled Trading Day using its good faith and commercially reasonable estimate of the value of the Shares on such ninth Scheduled Trading Day based on the volume, historical trading patterns and price of the Shares and such other factors as it deems appropriate. | |
|
||
Settlement Terms:
|
||
|
||
Settlement Procedures:
|
If the Number of Shares to be Delivered is positive, Physical Settlement shall be applicable; provided that GS&Co. does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws with respect to any Shares delivered by GS&Co. to Counterparty under any Transaction. If the Number of Shares to be Delivered is negative, then the Counterparty Settlement Provisions in Annex A shall apply. | |
|
||
Number of Shares
to be Delivered:
|
A number of Shares equal to (x)(a) the Prepayment Amount divided by (b)(i) the Forward Price minus (ii) the Forward Price Adjustment Amount minus (y) the number of Initial Shares. | |
|
||
Excess Dividend Amount:
|
For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions. | |
|
||
Settlement Date:
|
If the Number of Shares to be Delivered is positive, the date that is one Settlement Cycle immediately following the Termination Date. | |
|
||
Settlement Currency:
|
USD | |
|
||
Initial Share Delivery:
|
GS&Co. shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be a Settlement Date for purposes of such Section 9.4. | |
|
||
Initial Share Delivery Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation. | |
|
||
Initial Shares:
|
For each Transaction, as set forth in the related Supplemental Confirmation. |
4
Share Adjustments:
|
||
|
||
Potential Adjustment Event:
|
Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not constitute a Potential Adjustment Event. | |
|
||
|
It shall constitute an additional Potential Adjustment Event if the Scheduled Termination Date for any Transaction is postponed pursuant to Valuation Disruption above, in which case the Calculation Agent may, in its commercially reasonable discretion, adjust any relevant terms of any such Transaction to the extent necessary to preserve as nearly as practicable the fair value of such Transaction to GS&Co. prior to such postponement. | |
|
||
Extraordinary Dividend:
|
For any calendar quarter, any dividend or distribution on the Shares with an ex-dividend date occurring during such calendar quarter (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions) (a Dividend ) the amount or value of which (as determined by the Calculation Agent), when aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates occurring in the same calendar quarter, exceeds the relevant Ordinary Dividend Amount. | |
|
||
Ordinary Dividend Amounts:
|
For each Transaction for each calendar quarter, as set forth in the related Supplemental Confirmation. | |
|
||
Method of Adjustment:
|
Calculation Agent Adjustment | |
|
||
Early Ordinary Dividend
Payment:
|
If an ex-dividend date for any Dividend that is not an Extraordinary Dividend occurs during any calendar quarter occurring (in whole or in part) during the Relevant Period (as defined below) and is prior to the Scheduled Ex-Dividend Date for such calendar quarter, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of the relevant Transaction as the Calculation Agent determines appropriate to account for the economic effect on the Transaction of such event. | |
|
||
Scheduled Ex-Dividend
Dates:
|
For each Transaction for each calendar quarter, as set forth in the related Supplemental Confirmation. | |
|
||
Extraordinary Events:
|
||
|
||
Consequences of
Merger Events:
|
||
|
||
(a) Share-for-Share:
|
Modified Calculation Agent Adjustment | |
|
||
(b) Share-for-Other:
|
Cancellation and Payment | |
|
||
(c) Share-for-Combined:
|
Component Adjustment | |
|
||
Tender Offer:
|
Applicable; provided that (i) Section 12.1(l) of the Equity Definitions shall be amended (x) by deleting the parenthetical in the fifth line thereof, (y) by replacing that in the fifth line thereof with whether or not such announcement and (z) by adding immediately after the words Tender Offer in the fifth line thereof , and any publicly announced change or amendment to |
5
6
Initial Stock Loan Rate:
|
0.375%
per annum
|
|
|
||
Hedging Party:
|
GS&Co.
|
|
|
||
Determining Party:
|
GS&Co.
|
|
|
||
Additional Termination Event:
|
The declaration by the Issuer of any Extraordinary Dividend, the ex-dividend date for which occurs or is scheduled to occur during the Relevant Dividend Period, will constitute an Additional Termination Event, with Counterparty as the sole Affected Party and all Transactions hereunder as the Affected Transactions. | |
|
||
Relevant Dividend Period:
|
The period from and including the Calculation Period Start Date to and including the Relevant Dividend Period End Date. | |
|
||
Relevant Dividend Period End Date:
|
If the Number of Shares to be Delivered is negative, the last day of the Settlement Valuation Period; otherwise, the Termination Date. | |
|
||
Non-Reliance/Agreements and
Acknowledgements Regarding
Hedging Activities/Additional
Acknowledgements:
|
Applicable | |
|
||
Transfer:
|
Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign or transfer all rights, title and interest, powers, privileges and remedies of GS&Co. under any Transaction, in whole or in part, to an affiliate of GS&Co. whose obligations are guaranteed by The Goldman Sachs Group, Inc. without the consent of Counterparty; provided that Counterparty will not, as a result of such transfer, be required to (i) pay to the transferee or assignee an amount greater than the amount that it would have been required to pay to GS&Co. in the absence of such transfer or assignment or (ii) receive from the transferee or assignee an amount less than the amount that Counterparty would have received from GS&Co. in the absence of such transfer or assignment. | |
|
||
GS&Co. Payment Instructions:
|
Chase Manhattan Bank New York
For A/C Goldman, Sachs & Co. A/C #930-1-011483 ABA: 021-000021 |
|
|
||
Counterpartys Contact Details
for Purpose of Giving Notice:
|
To be provided by Counterparty | |
|
||
GS&Co.s Contact Details for
Purpose of Giving Notice:
|
Goldman, Sachs & Co.
200 West Street New York, NY 10282-2198 Attention: Serge Marquié, Equity Capital Markets Telephone: 212-902-9779 Facsimile: 917-977-4253 Email: serge.marquie@gs.com |
|
|
||
|
With a copy to: | |
|
||
|
Attention: Matthew S. Levine, Equity Capital Markets
Telephone: 212-902-3944 |
7
|
Facsimile: 917-977-3257
Email: matthew.levine@gs.com |
|
|
||
|
And email notification to the following address:
Eq-derivs-notifications@am.ibd.gs.com |
8
9
10
11
12
13
14
15
Yours faithfully,
GOLDMAN, SACHS & CO. |
||||
By: | /s/ JONATHAN LIPNICK | |||
Authorized Signatory | ||||
Agreed and Accepted By: | ||||
|
||||
ATMOS ENERGY CORPORATION | ||||
|
||||
By:
|
/s/ FRED E. MEISENHEIMER | |||
|
|
|||
|
Title: Senior Vice President and Chief Financial Officer |
To:
|
Atmos Energy Corporation | |
|
P.O. Box 650205 | |
|
Dallas, Texas 75265-0205 | |
|
||
From:
|
Goldman, Sachs & Co. | |
|
||
Subject:
|
Accelerated Stock Buyback | |
|
||
Ref. No:
|
[Insert Reference No.] | |
|
||
Date:
|
[Insert Date] |
Trade Date:
|
[ ] | |||
|
||||
Forward Price Adjustment Amount:
|
USD [ ] | |||
|
||||
Calculation Period Start Date:
|
[ ] | |||
|
||||
Scheduled Termination Date:
|
[ ] | |||
|
||||
First Acceleration Date:
|
[ ] | |||
|
||||
Prepayment Amount:
|
USD [ ] | |||
|
||||
Prepayment Date:
|
[ ] | |||
|
||||
Counterparty Additional Payment Amount:
|
USD [ ] |
A-1
Initial Shares:
|
[ ] Shares; provided that if, in connection with the Transaction, GS&Co. is unable, after using its good faith commercially reasonable efforts, to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that GS&Co. is able to so borrow or otherwise acquire, and GS&Co. shall use reasonable good faith efforts to borrow or otherwise acquire a number of Shares equal to the shortfall in the Initial Share Delivery and to deliver such additional Shares as soon as reasonably practicable. The aggregate of all Shares delivered to Counterparty in respect of the Transaction pursuant to this paragraph shall be the Initial Shares for purposes of Number of Shares to be Delivered in the Master Confirmation. | |||
|
||||
Initial Share Delivery Date:
|
[ ] | |||
|
||||
Termination Price:
|
USD[ ] per Share | |||
|
||||
Additional Relevant Days:
|
The 10 Exchange Business Days immediately following the Calculation Period. | |||
|
||||
|
Scheduled Ex-Dividend Date: | Ordinary Dividend Amount: | ||
|
||||
For calendar quarter ending on [insert date]
|
[ ] |
USD[ ] per Share
(the Current Dividend Amount ) |
||
|
||||
For calendar quarter ending on [insert date]
|
[ ] | Up to 1[ ]% of the Current Dividend Amount | ||
|
||||
For calendar quarter ending on [insert date]
|
[ ] | Up to 1[ ]% of the Current Dividend Amount |
A-2
Yours sincerely,
GOLDMAN, SACHS & CO. |
||||
By: | ||||
Authorized Signatory | ||||
Agreed and Accepted By: | ||||
|
||||
ATMOS ENERGY CORPORATION | ||||
|
||||
By:
|
||||
|
|
|||
|
Title: |
A-3
Settlement Currency:
|
USD | |
|
||
Settlement Method Election:
|
Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word Physical in the sixth line thereof and replacing it with the words Net Share and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to GS&Co. in writing on the date it notifies GS&Co. of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning Counterparty or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws. | |
|
||
Electing Party:
|
Counterparty | |
|
||
Settlement Method
Election Date:
|
The earlier of (i) the Scheduled Termination Date and (ii) the second Exchange Business Day immediately following the Accelerated Termination Date (in which case the election under Section 7.1 of the Equity Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second Exchange Business Day), as the case may be; provided that if a Friendly Transaction Announcement occurs after the Settlement Date, the Settlement Method Election Date for the Second Settlement shall be the date of the Friendly Transaction Announcement. | |
|
||
Default Settlement Method:
|
Cash Settlement | |
|
||
Forward Cash Settlement
Amount:
|
The Number of Shares to be Delivered multiplied by the Settlement Price; provided that in the case of a Second Settlement occurring after an early termination or cancellation of the relevant Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions, the Forward Cash Settlement Amount shall equal the lesser of (i) zero and (ii)(x) the Payment Amount that would have been calculated for such early termination or cancellation if clause (x)(b) in the definition of Number of Shares to be Delivered had been replaced with (b) the Forward Price, as determined by the Calculation Agent minus (y) the actual Payment Amount calculated for such early termination or cancellation (in each case, with an amount that would have been owed by Counterparty expressed as a negative number for purposes of this calculation). |
1
Settlement Price:
|
The average of the VWAP Prices (or, in the case of a Second Settlement, the Relevant Prices) for the Exchange Business Days in the Settlement Valuation Period, subject to Valuation Disruption as specified in the Master Confirmation or, in the case of a Second Settlement, subject to Section 6.6(a) of the Equity Definitions as if such dates were Valuation Dates. | |
|
||
Settlement Valuation Period:
|
A number of Scheduled Trading Days selected by GS&Co. in its reasonable discretion, beginning on the Scheduled Trading Day immediately following the earlier of (i) the Scheduled Termination Date or (ii) the Exchange Business Day immediately following the Termination Date or, in the case of a Second Settlement, the date of the Friendly Transaction Announcement. | |
|
||
Cash Settlement:
|
If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date. | |
|
||
Cash Settlement
Payment Date:
|
The date one Settlement Cycle following the last day of the Settlement Valuation Period. | |
|
||
Net Share Settlement
Procedures:
|
If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below. |
2
3
|
Where | A = the number of authorized but unissued shares of the Counterparty that are not reserved for future issuance on the date of the determination of the Capped Number; and | ||
|
||||
|
B = the maximum number of Shares required to be delivered to third parties if Counterparty elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Master Confirmation) with all third parties that are then currently outstanding and unexercised. |
4
To:
|
Atmos Energy Corporation | |
|
P.O. Box 650205 | |
|
Dallas, Texas 75265-0205 | |
|
||
From:
|
Goldman, Sachs & Co. | |
|
||
Subject:
|
Accelerated Stock Buyback | |
|
||
Ref. No:
|
||
|
||
Date:
|
July 1, 2010 |
Trade Date:
|
July 1, 2010 | |
|
||
Forward Price Adjustment Amount:
|
USD 0.35 | |
|
||
Calculation Period Start Date:
|
July 2, 2010 | |
|
||
Scheduled Termination Date:
|
March 1, 2011 | |
|
||
First Acceleration Date:
|
September 7, 2010 | |
|
||
Prepayment Amount:
|
USD 100,000,000 | |
|
||
Prepayment Date:
|
July 7, 2010 | |
|
||
Counterparty Additional Payment Amount:
|
USD 450,000 |
1
Initial Shares:
|
2,958,580 Shares; provided that if, in connection with the Transaction, GS&Co. is unable, after using its good faith commercially reasonable efforts, to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that GS&Co. is able to so borrow or otherwise acquire, and GS&Co. shall use reasonable good faith efforts to borrow or otherwise acquire a number of Shares equal to the shortfall in the Initial Share Delivery and to deliver such additional Shares as soon as reasonably practicable. The aggregate of all Shares delivered to Counterparty in respect of the Transaction pursuant to this paragraph shall be the Initial Shares for purposes of Number of Shares to be Delivered in the Master Confirmation. | |
|
||
Initial Share Delivery Date:
|
July 7, 2010 | |
|
||
Termination Price:
|
USD 8.11 per Share | |
|
||
Additional Relevant Days:
|
The 10 Exchange Business Days immediately following the Calculation Period. |
|
Scheduled Ex-Dividend Date: | Ordinary Dividend Amount: | ||
|
||||
For calendar
quarter ending on
September 30, 2010
|
August 23, 2010 | USD 0.335 per Share (the Current Dividend Amount ) | ||
|
||||
For calendar
quarter ending on
December 31, 2010
|
November 23, 2010 | Up to 103% of the Current Dividend Amount | ||
|
||||
For calendar
quarter ending on
March 31, 2011
|
Any day in February 2011 on or after February 14, 2011 | Up to 103% of the Current Dividend Amount |
2
Yours sincerely,
GOLDMAN, SACHS & CO. |
||||
By: | /s/ JONATHAN LIPNICK | |||
Authorized Signatory | ||||
By:
|
/s/ FRED E. MEISENHEIMER
|
|||
|
Title: Senior Vice President and Chief | |||
|
Financial Officer |
2
3
4
5
6
7
8
9
10
11
12
ATMOS ENERGY CORPORATION
|
||||
By: | ||||
Kim R. Cocklin | ||||
President and
Chief Executive Officer |
||||
EXECUTIVE | ||||||
|
||||||
|
Name: | |||||
|
|
13
2
3
4
5
6
7
8
9
10
ATMOS ENERGY CORPORATION | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
President and | |||||
|
Chief Executive Officer | |||||
|
||||||
|
EXECUTIVE | |||||
|
||||||
|
Name: | |||||
|
|
11
Article | Page | |||
ARTICLE I Purpose and Effective Date
|
1 | |||
Section 1.1. Purpose
|
1 | |||
Section 1.2. Effective Date
|
1 | |||
|
||||
ARTICLE II Definitions and Construction
|
1 | |||
Section 2.1. Definitions
|
1 | |||
Section 2.2. Construction
|
8 | |||
Section 2.3. Governing Law
|
8 | |||
|
||||
ARTICLE III Eligibility and Participation
|
8 | |||
Section 3.1. Employees Eligible to Participate
|
8 | |||
|
||||
ARTICLE IV Assets Used for Benefits
|
8 | |||
Section 4.1. Amounts Provided by the Employer
|
8 | |||
Section 4.2. Funding
|
9 | |||
|
||||
ARTICLE V Supplemental Pension Benefits
|
9 | |||
Section 5.1. Eligibility for Supplemental Pension
|
9 | |||
Section 5.2. Amount of Supplemental Pension
|
10 | |||
Section 5.3. Form of Payment of Supplemental Pension
|
11 | |||
Section 5.4. Commencement of Supplemental Pension
|
12 | |||
Section 5.5. Supplemental Pensions After a Change in Control
|
13 | |||
|
||||
ARTICLE VI Disability Benefits
|
14 | |||
Section 6.1. Eligibility For Disability Benefit
|
14 | |||
Section 6.2. Amount of Disability Benefit
|
14 | |||
Section 6.3. Payment of Disability Benefit
|
14 | |||
Section 6.4. Payment of Supplemental Pension to Disabled Participants
|
15 |
i
Article | Page | |||
ARTICLE VII Death Benefits
|
15 | |||
Section 7.1. Eligibility For Death Benefit
|
15 | |||
Section 7.2. Amount of Death Benefit
|
16 | |||
Section 7.3. Form of Payment of Death Benefits
|
17 | |||
Section 7.4. Commencement of Death Benefits
|
18 | |||
|
||||
ARTICLE VIII Administration
|
18 | |||
Section 8.1. Plan Administration
|
18 | |||
Section 8.2. Powers of Plan Administrator
|
18 | |||
Section 8.3. Calculation of Funding Obligations
|
19 | |||
Section 8.4. Annual Statements
|
19 | |||
|
||||
ARTICLE IX Miscellaneous Provisions
|
20 | |||
Section 9.1. Amendment or Termination of the Plan
|
20 | |||
Section 9.2. Nonguarantee of Employment
|
22 | |||
Section 9.3. Nonalienation of Benefits
|
22 | |||
Section 9.4. Liability
|
23 | |||
Section 9.5. Participation Agreement
|
23 | |||
Section 9.6. Successors to the Employer
|
23 | |||
Section 9.7. Tax Withholding
|
23 |
Exhibit A
|
Participation Agreement | |
|
||
Exhibit B
|
Summary of Actuarial Assumptions for Determining Lump Sum Distributions and Optional Annuity Forms | |
|
||
Exhibit C
|
Summary of Actuarial Assumptions and Methods for Determining Supplemental Executive Retirement Plan Trust Annual Funding Liabilities |
ii
1
2
3
4
5
6
Affiliate
|
subparagraph 2.1(d)(ii)(B) | |
|
||
Dependent Death Benefit
|
subparagraph 7.2(a)(iii) | |
|
||
Lump Sum Death Benefit
|
subparagraph 7.2(a)(i) | |
|
||
Monthly Death Benefit
|
subparagraph 7.2(a)(ii) | |
|
||
Original Payment Date
|
subparagraph 5.4(c) | |
|
||
Person
|
subparagraph 2.1(d)(ii)(A) | |
|
||
SEBP
|
subparagraph 2.1(k) | |
|
||
Specified Employee
|
subparagraph 5.4(c) |
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
ATMOS ENERGY CORPORATION
|
||||
By: | /s/ KIM R. COCKLIN | |||
Kim R. Cocklin | ||||
President and Chief
Executive Officer |
||||
24
1
2
3
4
5
6
7
8
9
PARTICIPANT: | ATMOS ENERGY CORPORATION: | |||||
|
||||||
|
By: | |||||
|
|
10
|
(i) | Interest: | The applicable segment rates as defined in Code Section 417(e)(3)(D) for the November (from and after January 1, 2010, September) preceding the first day of the calendar year in which the lump sum is paid and without regard to the phase-in percentages specified in Code Section 417(e)(3)(D)(iii). | |||
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(ii) | Mortality: | The applicable mortality table as defined in Code Section 417(e)(3), and amended by the Pension Protection Act. |
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(i) | Interest: | 6.0% per year. | |||
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(ii) | Mortality: | 1983 Unisex Group Annuity Mortality (50% 1983 Group Annuity Mortality for males, 50% 1983 Group Annuity Mortality for females). |
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Discount Rate
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8% | |
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Mortality
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Prior to Age 62
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None | |
After Age 62
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Code Section 417(e)(3)
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Applicable Mortality Table* | |
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Salary Scale
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0% | |
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Benefit Percentage
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60% |
* | The table prescribed in Rev. Rul. 2001-62, or such other mortality table which in the future may be specified from time to time as the applicable mortality table for purposes of Code Section 417(e)(3). |
(1) | The greater of (A) Participants annual base salary at the date of his termination of employment, or (B) the average of the Participants annual base salary for the highest three (3) calendar years (whether or not consecutive) of the Participants employment with the Employer. | ||
(2) | The greater of (A) the Participants last Performance Award or (B) the average of the highest three (3) Performance Awards (whether or not consecutive). |
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Article | Page | |||
ARTICLE I Purpose and Effective Date
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1 | |||
Section 1.1. Purpose
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1 | |||
Section 1.2. Effective Date
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1 | |||
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ARTICLE II Definitions and Construction
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1 | |||
Section 2.1. Definitions
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1 | |||
Section 2.2. Construction
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6 | |||
Section 2.3. Governing Law
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6 | |||
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ARTICLE III Eligibility and Participation
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7 | |||
Section 3.1. Employees Eligible to Participate
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7 | |||
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ARTICLE IV Assets Used for Benefits
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7 | |||
Section 4.1. Amounts Provided by the Employer
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7 | |||
Section 4.2. Funding
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7 | |||
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ARTICLE V Supplemental Benefits
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7 | |||
Section 5.1. Eligibility for Supplemental Benefit
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7 | |||
Section 5.2. Amount of Supplemental Benefit
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8 | |||
Section 5.3. Form of Payment of Supplemental Benefit
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9 | |||
Section 5.4. Time of Payment of Supplemental Benefit
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9 | |||
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ARTICLE VI Administration
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10 | |||
Section 6.1. Plan Administration
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10 | |||
Section 6.2. Powers of Plan Administrator
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10 | |||
Section 6.3. Annual Statements
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11 | |||
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ARTICLE VII Miscellaneous Provisions
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11 | |||
Section 7.1. Amendment or Termination of the Plan
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11 | |||
Section 7.2. Nonguarantee of Employment or Participation
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12 |
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Article | Page | |||
Section 7.3. Nonalienation of Benefits
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12 | |||
Section 7.4. Liability
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12 | |||
Section 7.5. Participation Agreement
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13 | |||
Section 7.6. Successors to the Employer
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13 | |||
Section 7.7. Tax Withholding
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13 | |||
Section 7.8. Code Section 409A
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13 | |||
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Exhibit A Participation Agreement
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Affiliate
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Subparagraph 2.1(g)(ii)(B) | |
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Original Payment Date
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Section 5.4(c) | |
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Person
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Subparagraph 2.1(g)(ii)(A) | |
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Specified Employee
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Section 5.4(c) |
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ATMOS ENERGY CORPORATION
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By: | /s/ KIM R. COCKLIN | |||
Kim R. Cocklin | ||||
President and Chief Executive Officer |
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PARTICIPANT: | ATMOS ENERGY CORPORATION: | |||
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By: | |||
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ATMOS ENERGY CORPORATION
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By: | /s/ ROBERT W. BEST | |||
Robert W. Best | ||||
Chairman of the Board and Chief Executive Officer | ||||
Attest:
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/s/ DWALA KUHN | ||||
Corporate Secretary | ||||
8
I. | Plan Purpose | |
Section 1.1 . Atmos Energy Corporation (Atmos or the Company) hereby amends and restates the previously-established Atmos Energy Corporation Outside Directors Stock-for-Fee Plan (the Plan), which provides the non-employee directors of Atmos the option to receive all or part of their Fee (as defined below) in Atmos common stock. The purpose of this Plan is to increase the proprietary interest of the Outside Directors in the Companys long-term prospects and the strategic growth of its business. | ||
II. | Definitions | |
Section 2.1 . Board or Board of Directors shall mean the Board of Directors of Atmos Energy Corporation. | ||
Section 2.2 . Common Stock means the Companys no par value common stock. | ||
Section 2.3 . Election means an Outside Directors delivery of written notice of election to the Corporate Secretary of the Company electing to receive his or her Fee or a portion thereof in the form of Common Stock. | ||
Section 2.4 . Fair Market Value means, as of any specified date, the mean of the highest and lowest prices of a share of Common Stock of the Company as reported by the New York Stock Exchange Consolidated Tape on that date. However, if no trading in the Common Stock occurs on the New York Stock Exchange on that date, the Fair Market Value shall mean the mean of the highest and lowest prices as reported on the most recent previous day for which sales were reported. In the event the Common Stock is traded on an exchange other than the New York Stock Exchange, the Board of Directors shall select a suitable substitute published stock quotation system, which system shall be in compliance with all relevant regulatory provisions. | ||
Section 2.5 . Fee means the annual retainer fee (paid in quarterly installments) earned by an Outside Director for his or her service as a member of the Atmos Board of Directors during a Fiscal Year or portion thereof. | ||
Section 2.6 . Fiscal Year means the 12-month period beginning October 1 st of any year and ending September 30 th of the next year. | ||
Section 2.7 . Outside Director means a member of the Companys Board of Directors who is not an employee of the Company. | ||
Section 2.8 . Quarter means the 3-month period beginning October 1, January 1, April 1, or July 1 of each Fiscal Year. | ||
III. | Shares Authorized for Issuance |
2
Section 3.1 . A maximum of 50,000 shares of Common Stock may be issued under the Plan. The Common Stock issued under the Plan may, at the option of the Board of Directors, be either original issue by the Company or purchased on the open market. In the event of any change in the number of shares outstanding of Common Stock by reason of a stock split, stock dividend, merger, consolidation, reorganization, or other similar change in capitalization, the number or kind of shares that may be issued under the Plan shall be automatically adjusted so that the proportionate interest of the shares issuable under the Plan is maintained as before the occurrence of such event. |
IV. | Administration | |
Section 4.1 . Each Outside Director may elect to receive all or a portion (in 10% increments) of his or her Fee in shares of Common Stock by executing and delivering an Election to the Corporate Secretary of the Company at least two weeks prior to the beginning of the immediately succeeding Fiscal Year in order to be effective for the Fee earned in such succeeding Fiscal Year. Each Outside Director must execute the election form previously approved by the Secretary in order for such Election to be effective. The election form is deemed delivered when received by the Corporate Secretary. | ||
Section 4.2 . An Outside Director making an Election may designate a beneficiary or beneficiaries who will receive any shares of Common Stock owed to such Outside Director hereunder in the event of the Outside Directors death. | ||
Section 4.3. Each Outside Director may elect to revoke or modify his or her Election that is then currently in effect by executing and delivering a written revocation/modification form, which must be delivered to the Corporate Secretary of the Company at least two weeks prior to the beginning of the immediately succeeding Fiscal Year in order to be effective for the Fee earned in such succeeding Fiscal Year. Each Outside Director must execute the revocation/modification form previously approved by the Corporate Secretary in order for such revocation/modification to be effective. This form is deemed delivered when received by the Corporate Secretary. Each Outside Director may make changes in the designation of a beneficiary at any time. | ||
Section 4.4 . For the Quarter commencing October 1, 2009, an Election shall result in the deferral of the Common Stock portion of the payment of the Fee earned in such Quarter for which the Election is effective until the end of such Quarter. Shares of Common Stock shall be issued to the Outside Director for such Quarter as soon as possible following the last business day of such Quarter. For the Quarter commencing January 1, 2010 and each Quarter thereafter, an Election shall result in the payment of the Common Stock portion of the payment of the Fee earned in each Quarter for which the Election is effective as soon as possible following the first business day of such Quarter. The number of shares of Common Stock issued in accordance with an Election shall be equal to the amount of the Fee that would have been paid to the Outside Director during a Quarter divided by the Fair Market Value (i) for the Quarter commencing October 1, 2009, on the last business day of such Quarter, and (ii) for the Quarter commencing January 1, 2010 and each Quarter thereafter, on the first business day of such Quarter. Only whole numbers of shares of Common Stock shall be issued; fractional shares shall be paid in cash. If the Election is for only a portion of the Fee, |
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the remaining portion of the Fee to be paid in cash shall be paid at the time the cash payment would normally be paid by the Company to the Outside Director. |
Section 4.5 . The Board of Directors shall be responsible for the administration of the Plan. The Board of Directors, by majority action of its members, is authorized to interpret the Plan, prescribe, amend, and rescind rules and regulations relating to the Plan, provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company, and make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan. No member of the Board of Directors shall be liable for any action or determination made in good faith. The determinations, interpretations, and other actions of the Board of Directors pursuant to the provisions of the Plan shall be binding and conclusive for all purposes and on all persons. |
V. | Effective Date | |
Section 5.1 . The Plan, as originally drafted, was approved and adopted by a vote of the shareholders of the Company on February 8, 1995 and became effective immediately upon such approval. This amended and restated Plan was approved by the Board of Directors and became effective as of October 1, 2009. | ||
VI. | Amendment and Termination | |
Section 6.1 . The Board of Directors of the Company may at any time terminate, and from time to time may amend or modify the Plan, provided, however, that no amendment or modification may become effective without approval by the shareholders of the Company if shareholder approval is required to enable the Plan to satisfy any applicable statutory or regulatory requirements or if the Board of Directors, on advice of counsel, determines that shareholder approval is otherwise necessary or advisable. |
ATMOS ENERGY CORPORATION
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By: | /s/ ROBERT W. BEST | |||
Robert W. Best | ||||
Chairman of the Board and Chief Executive Officer | ||||
Attest:
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/s/ DWALA KUHN | ||||
Corporate Secretary | ||||
4
(a) | Death, Disability, Certain Involuntary Terminations and Terminations following a Change in Control . |
(b) | Retirement . |
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GRANTEE: | ATMOS ENERGY CORPORATION | |||||||||
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Signature:
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By: | |||||||||
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Printed Name:
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President and Chief Executive Officer | |||||||||
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Restricted Stock Units | ||||||
Performance Level | Cumulative 3-Yr. EPS | Earned | ||||
Below Threshold
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Less than $____ | 0 | % | |||
Threshold
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$____ | 50 | % | |||
Target
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$____ | 100 | % | |||
Maximum
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$____ | 150 | % |
(a) | Death, Disability, Certain Involuntary Terminations and Terminations following a Change in Control . |
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(b) | Retirement . |
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GRANTEE: | ATMOS ENERGY CORPORATION | |||||||||
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Signature:
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By: | |||||||||
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Printed Name:
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Chairman and Chief Executive Officer | |||||||||
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2
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(a) | Total shareholder return; | ||
(b) | Return on assets, equity, capital, or investment; | ||
(c) | Pre-tax or after-tax profit levels, including: earnings per share; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; net operating profits after tax, and net income; | ||
(d) | Cash flow and cash flow return on investment; | ||
(e) | Economic value added and economic profit; | ||
(f) | Growth in earnings per share; | ||
(g) | Levels of operating expense or other expense items as reported on the income statement, including operating and maintenance expense; and/or | ||
(h) | Measures of customer satisfaction and customer service as surveyed from time to time, including the relative improvement therein. |
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ATMOS ENERGY CORPORATION | ||||||
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By: |
/s/ ROBERT W. BEST
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Robert W. Best | |||||
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Chairman of the Board | |||||
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and Chief Executive Officer |
/s/ DWALA KUHN
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Dwala Kuhn
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Corporate Secretary
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10
Year Ended September 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Income from
continuing operations before provision for income taxes
per statement of income
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$ | 334,626 | $ | 291,269 | $ | 292,704 | $ | 262,584 | $ | 236,890 | ||||||||||
Add:
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Portion of rents representative of
the interest factor
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7,659 | 7,008 | 6,882 | 5,560 | 5,581 | |||||||||||||||
Interest on debt & amortization
of debt expense
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154,471 | 152,830 | 137,922 | 145,236 | 146,607 | |||||||||||||||
Income as adjusted
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$ | 496,756 | $ | 451,107 | $ | 437,508 | $ | 413,380 | $ | 389,078 | ||||||||||
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Fixed charges:
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Interest on debt & amortization
of debt expense (1)
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$ | 154,471 | $ | 152,830 | $ | 137,922 | $ | 145,236 | $ | 146,607 | ||||||||||
Capitalized interest (2)
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3,860 | 4,583 | 2,879 | 3,011 | 3,641 | |||||||||||||||
Rents
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22,977 | 21,024 | 20,647 | 16,679 | 16,743 | |||||||||||||||
Portion of rents representative of
the interest factor (3)
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7,659 | 7,008 | 6,882 | 5,560 | 5,581 | |||||||||||||||
Fixed charges (1)+(2)+(3)
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$ | 165,990 | $ | 164,421 | $ | 147,683 | $ | 153,807 | $ | 155,829 | ||||||||||
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Ratio of earnings to fixed charges
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2.99 | 2.74 | 2.96 | 2.69 | 2.50 |
State of | Percent of | |||||
Name | Incorporation | Ownership | ||||
ATMOS ENERGY HOLDINGS, INC.
(wholly-owned by Atmos Energy Corporation) |
Delaware | 100 | % | |||
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BLUE FLAME INSURANCE SERVICES, LTD
(wholly-owned by Atmos Energy Corporation) |
Bermuda | 100 | % | |||
|
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MISSISSIPPI ENERGIES, INC.
(wholly-owned by Atmos Energy Corporation) |
Mississippi | 100 | % | |||
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UNITARY GH&C PRODUCTS, LLC
(28% owned by Mississippi Energies, Inc.) |
Delaware | 28 | % | |||
|
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ATMOS ENERGY SERVICES, LLC
(a limited liability company) (wholly-owned by Atmos Energy Holdings, Inc.) |
Delaware | 100 | % | |||
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EGASCO, LLC
(a limited liability company) (wholly-owned by Atmos Energy Holdings, Inc.) |
Texas | 100 | % | |||
|
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ATMOS ENERGY MARKETING, LLC
(a limited liability company) (wholly-owned by Atmos Energy Holdings, Inc.) |
Delaware | 100 | % | |||
|
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ATMOS POWER SYSTEMS, INC.
(a wholly-owned subsidiary of Atmos Energy Holdings, Inc.) |
Georgia | 100 | % | |||
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ATMOS PIPELINE AND STORAGE, LLC
(a limited liability company) (wholly-owned by Atmos Energy Holdings, Inc.) |
Delaware | 100 | % | |||
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UCG STORAGE, INC.
(wholly-owned by Atmos Pipeline and Storage, LLC) |
Delaware | 100 | % | |||
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WKG STORAGE, INC.
(wholly-owned by Atmos Pipeline and Storage, LLC) |
Delaware | 100 | % |
State of
Percent of
Name
Incorporation
Ownership
(wholly-owned by Atmos Pipeline and Storage, LLC)
Delaware
100
%
(wholly-owned by Atmos Pipeline and Storage, LLC)
Louisiana
100
%
(wholly-owned by Atmos Pipeline and Storage, LLC)
Delaware
100
%
(a limited liability company)
(wholly-owned by Atmos Pipeline and Storage, LLC)
Delaware
100
%
(wholly-owned by Atmos Gathering Company, LLC)
Delaware
100
%
(a limited liability company)
(wholly-owned by Atmos Pipeline and Storage, LLC)
Delaware
100
%
1. | I have reviewed this Annual Report on Form 10-K of Atmos Energy Corporation; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
1. | I have reviewed this Annual Report on Form 10-K of Atmos Energy Corporation; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing equivalent functions): |
(a) | All significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ KIM R. COCKLIN
|
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President and Chief
|
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Executive Officer
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(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ FRED E. MEISENHEIMER
|
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Senior Vice President,
|
||
Chief Financial Officer
|
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and Treasurer
|