10-QPeriod: Q3 FY2001

ATMOS ENERGY CORP Quarterly Report for Q3 Ended Jun 30, 2001

Filed August 14, 2001For Securities:ATO

Summary

Atmos Energy Corporation (ATO) reported its financial results for the nine months ending June 30, 2001. The company experienced significant revenue growth, primarily driven by higher natural gas prices and increased sales volumes due to colder weather. Despite higher revenue, the company reported a net loss for the three months ended June 30, 2001, but a substantial net income for the nine-month period. A key development during the period was the acquisition of the remaining 55% interest in Woodward Marketing, LLC, leading to its full consolidation. The company also completed a significant debt offering to fund future acquisitions, notably the acquisition of Louisiana Gas Service Company, which closed shortly after the reporting period. Management highlighted ongoing efforts in cost control and rate management across its regulated utility divisions.

Key Highlights

  • 1Revenue increased by 86% to $1.3 billion for the nine months ended June 30, 2001, compared to the prior year, driven by higher gas prices and increased volumes.
  • 2Net income for the nine months ended June 30, 2001, was $63.6 million, a significant increase from $39.5 million in the same period last year.
  • 3The company fully consolidated Woodward Marketing, LLC as of April 1, 2001, after acquiring the remaining 55% interest.
  • 4A substantial $350 million senior notes offering was completed in May 2001 to fund future acquisitions.
  • 5Capital expenditures for the nine months ended June 30, 2001, were $70.3 million, with plans for further investment in the fiscal year.
  • 6The company has implemented weather hedges and insurance policies to mitigate the impact of weather volatility on its operations.
  • 7Despite a net loss in the third quarter ($3.4 million), the nine-month performance shows strong overall profitability.

Frequently Asked Questions

Operating revenues increased substantially due to a combination of a higher average sales price, driven by increased natural gas costs, and an increase in sales and transportation volumes attributed to colder weather patterns during the nine-month period.

Atmos Energy acquired the remaining 55% of Woodward Marketing, LLC on April 1, 2001, leading to its full consolidation. This means Woodward's revenues and expenses are now fully included in Atmos' financial statements, impacting both the utility and non-regulated segments and increasing working capital requirements for the non-regulated business.

Atmos Energy completed a $350 million senior notes offering in May 2001, with proceeds intended to fund acquisitions, including the significant acquisition of Louisiana Gas Service Company which closed post-period. The company also has substantial committed credit facilities to support its liquidity needs.

The company's results are seasonal and weather-dependent. While the nine months ended June 30, 2001, benefited from colder-than-normal weather, increasing volumes, the company has implemented weather hedges and insurance policies for Texas and Louisiana operations to mitigate risks associated with warmer weather in future periods.