10-QPeriod: Q3 FY2011

ATMOS ENERGY CORP Quarterly Report for Q3 Ended Jun 30, 2011

Filed August 4, 2011For Securities:ATO

Summary

Atmos Energy Corporation (ATO) reported its financial results for the nine months and three months ended June 30, 2011. For the nine-month period, the company posted a net income of $205.6 million, a slight increase from $204.3 million in the prior year. Diluted earnings per share were $2.25 compared to $2.18 year-over-year. This performance was supported by strong contributions from the regulated natural gas distribution segment, which saw an increase in gross profit despite a decrease in throughput. During the three-month period, Atmos Energy reported a net loss of $0.6 million, or $0.01 per diluted share, compared to a net loss of $3.2 million, or $0.03 per diluted share, in the prior year. This quarter's results were impacted by significant asset impairments in the nonregulated segment. The company also announced the pending sale of its natural gas distribution operations in Missouri, Illinois, and Iowa, which are being reported as discontinued operations.

Financial Highlights

44 data points
Beta

Net Income

-$566K

EPS (Diluted)

$-0.01

Total Assets

$6.99B

Cash & Equivalents

$117.43M

Free Cash Flow

$81.09M

Financial Statements
Beta
Gross Profit$261.61M
Operating Expenses$232.73M
Operating Income$31.39M
Interest Expense$35.84M
Net Income-$566K
EPS (Basic)$-0.01
EPS (Diluted)$-0.01
Shares Outstanding (Basic)90.13M
Shares Outstanding (Diluted)90.13M

Key Highlights

  • 1For the nine months ended June 30, 2011, net income was $205.6 million, a slight increase from $204.3 million in the prior year.
  • 2Diluted earnings per share for the nine-month period were $2.25, up from $2.18 in the prior year.
  • 3The company reported a net loss of $0.6 million for the three months ended June 30, 2011, an improvement from a net loss of $3.2 million in the same period last year.
  • 4Atmos Energy is selling its natural gas distribution operations in Missouri, Illinois, and Iowa, with these results classified as discontinued operations.
  • 5The company experienced asset impairments totaling $30.3 million in its nonregulated segment during the nine-month period.
  • 6Long-term debt increased, driven by the issuance of new senior notes, while short-term debt decreased significantly.
  • 7Moody's and Fitch upgraded Atmos Energy's senior unsecured debt ratings during the period, reflecting a stable outlook and focus on lower-risk regulated activities.

Frequently Asked Questions

For the nine months ended June 30, 2011, Atmos Energy reported a net income of $205.6 million, a slight increase from $204.3 million in the same period of the previous year. Diluted earnings per share were $2.25, up from $2.18 in the prior year. Income from continuing operations remained relatively stable at $197.8 million.

The three months ended June 30, 2011, resulted in a net loss of $0.6 million, an improvement from a net loss of $3.2 million in the prior year. This improvement was partly due to a favorable impact from asset optimization margins and rate adjustments in regulated segments. However, this was offset by significant non-cash asset impairments in the nonregulated segment totaling $11.0 million during the quarter.

Atmos Energy announced an agreement to sell its natural gas distribution operations in Missouri, Illinois, and Iowa. These operations represent approximately 84,000 customers and their financial results are now reported as discontinued operations. This sale is part of a strategy to streamline operations and focus on core regulated businesses.

Long-term debt increased to $2,206.1 million from $1,809.6 million, primarily due to the issuance of $400 million in new senior notes. Conversely, short-term debt decreased to zero from $126.1 million. The company's total capitalization increased, and the debt-to-capitalization ratio was 48.6% at June 30, 2011.