UNITED
STATES
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SECURITIES AND EXCHANGE
COMMISSION
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|
Washington,
D.C. 20549
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FORM
10-K
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(Mark
One)
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þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
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For
the fiscal year ended December 31, 2007
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OR
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¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For
the transition period
from to
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Commission
File Number 1-14174
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AGL RESOURCES
INC.
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(Exact
name of registrant as specified in its charter)
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Georgia
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58-2210952
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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Ten Peachtree Place
NE,
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404-584-4000
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Atlanta, Georgia
30309
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(Address
and zip code of principal executive offices)
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(Registrant’s
telephone number, including area code)
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Securities
registered pursuant to Section 12(b) of the Act:
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Title of
Class
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Name of each exchange
on which registered
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Common Stock, $5 Par
Value
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New York Stock
Exchange
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Securities
registered pursuant to Section 12(g) of the Act: None
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Indicate
by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 under the Securities Act. Yes þ No ¨
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Indicate
by check mark if the registrant is not required to file reports pursuant
to Section 13 or Section 15(d) of the Securities Act. Yes
¨ No þ
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Indicate
by check mark whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes þ No ¨
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|
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ¨
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Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer.
Large
accelerated filer þ Accelerated
filer ¨ Non-accelerated
filer ¨
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Indicate
by check mark whether the registrant is a shell company (as defined in
Exchange Act Rule 12b-2). Yes ¨ No
þ
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The
aggregate market value of the registrant’s voting and non-voting common
equity held by non-affiliates of the registrant, computed by reference to
the price at which the registrant’s common stock was last sold as of the
last business day of the registrant’s most recently completed second
fiscal quarter, was $3,148,134,781
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The
number of shares of the registrant’s common stock outstanding as of
January 31, 2008 was 76,439,305
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DOCUMENTS INCORPORATED BY
REFERENCE:
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Portions
of the Proxy Statement for the 2008 Annual Meeting of Shareholders (“Proxy
Statement”) to be held April 30, 2008, are incorporated by reference in
Part III.
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Page(s)
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|||||
4
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|||||
Part I
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|||||
Item
1.
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5-15
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||||
6-8
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|||||
9-10
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|||||
10-12
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|||||
12-13
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|||||
13-14
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|||||
Item
1A.
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15-21
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||||
Item
1B.
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21
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||||
Item
2.
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21-22
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||||
Item
3.
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22
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||||
Item
4.
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23
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||||
23
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|||||
Part II
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|||||
Item
5.
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24-25
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||||
Item
6.
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26
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||||
Item
7.
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27-46
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||||
27
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|||||
27-29
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|||||
29-35
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|||||
35-40
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|||||
Critical Accounting Policies
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41-45
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||||
45-46
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|||||
Item
7A.
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46-50
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||||
Item
8.
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51-91
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||||
51-52
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|||||
53
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|||||
54
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|||||
55
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|||||
56-63
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|||||
63-65
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|||||
66-72
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|||||
73-77
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|||||
78
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|||||
79-81
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|||||
82-84
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|||||
84-86
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|||||
Note 9 – Segment
Information
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86-88
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||||
89
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|||||
90
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|||||
Item
9.
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91
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||||
Item
9A.
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91
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||||
Item
9B.
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91
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Part III
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|||||
Item
10.
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91
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||||
Item
11.
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91-92
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||||
Item
12.
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92
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||||
Item
13.
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92
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||||
Item
14.
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92
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||||
Part IV
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|||||
Item
15.
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92-97
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||||
98
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|||||
99
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Atlanta
Gas Light
|
Atlanta
Gas Light Company
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AGL
Capital
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AGL
Capital Corporation
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AGL
Networks
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AGL
Networks, LLC
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AGSC
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AGL
Services Company
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AIP
|
Annual
Incentive Plan
|
Bcf
|
Billion
cubic feet
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Chattanooga
Gas
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Chattanooga
Gas Company
|
Compass
Energy
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Compass
Energy Services, Inc.
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Credit
Facility
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Credit
agreement supporting our commercial paper program
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Deregulation
Act
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1997
Natural Gas Competition and Deregulation Act
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Dominion
Ohio
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Dominion
East of Ohio, a Cleveland, Ohio based natural gas company; a subsidiary of
Dominion Resources, Inc.
|
EBIT
|
Earnings
before interest and taxes, a non-GAAP measure that includes operating
income, other income, equity in SouthStar’s income, minority interest in
SouthStar’s earnings, donations and gain on sales of assets and excludes
interest and income tax expense; as an indicator of our operating
performance, EBIT should not be considered an alternative to, or more
meaningful than, operating income or net income as determined in
accordance with GAAP
|
EITF
|
Emerging
Issues Task Force
|
Energy
Act
|
Energy
Policy Act of 2005
|
ERC
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Environmental
remediation costs
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FASB
|
Financial
Accounting Standards Board
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FERC
|
Federal
Energy Regulatory Commission
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Fitch
|
Fitch
Ratings
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Florida
Commission
|
Florida
Public Service Commission
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GAAP
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Accounting
principles generally accepted in the United States of
America
|
Georgia
Commission
|
Georgia
Public Service Commission
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Golden
Triangle Storage
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Golden
Triangle Storage, Inc.
|
Heating
Season
|
The
period from November to March when natural gas usage and operating
revenues are generally higher because more customers are connected to our
distribution systems when weather is colder
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Jefferson
Island
|
Jefferson
Island Storage & Hub, LLC
|
LIBOR
|
London
interbank offered rate
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LNG
|
Liquefied
natural gas
|
LOCOM
|
Lower
of weighted average cost or current market price
|
Louisiana
DNR
|
Louisiana
Department of Natural Resources
|
Maryland
Commission
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Maryland
Public Service Commission
|
Marketers
|
Marketers
selling retail natural gas in Georgia and certificated by the Georgia
Commission
|
Medium-term
notes
|
Notes
issued by Atlanta Gas Light with scheduled maturities between 2012 and
2027 bearing interest rates ranging from 6.6% to 9.1%
|
MGP
|
Manufactured
gas plant
|
Moody’s
|
Moody’s
Investors Service
|
New
Jersey Commission
|
New
Jersey Board of Public Utilities
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NUI
|
NUI
Corporation
|
NYMEX
|
New
York Mercantile Exchange, Inc.
|
OCI
|
Other
comprehensive income
|
Operating
margin
|
A
measure of income, calculated as revenues minus cost of gas, that excludes
operation and maintenance expense, depreciation and amortization, taxes
other than income taxes, and the gain or loss on the sale of our assets;
these items are included in our calculation of operating income as
reflected in our statements of consolidated income.
|
Piedmont
|
Piedmont
Natural Gas
|
Pivotal
Propane
|
Pivotal
Propane of Virginia, Inc.
|
Pivotal
Utility
|
Pivotal
Utility Holdings, Inc., doing business as Elizabethtown Gas, Elkton Gas
and Florida City Gas
|
PGA
|
Purchased
gas adjustment
|
PRP
|
Pipeline
replacement program for Atlanta Gas Light
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S&P
|
Standard
& Poor’s Ratings Services
|
Saltville
|
Saltville
Gas Storage Company
|
SEC
|
Securities
and Exchange Commission
|
Sequent
|
Sequent
Energy Management, L.P.
|
SFAS
|
Statement
of Financial Accounting Standards
|
SNG
|
Southern
Natural Gas Company
|
SouthStar
|
SouthStar
Energy Services LLC
|
Tennessee
Commission
|
Tennessee
Regulatory Authority
|
VaR
|
Value
at risk is defined as the maximum potential loss in portfolio value over a
specified time period that is not expected to be exceeded within a given
degree of probability
|
Virginia
Natural Gas
|
Virginia
Natural Gas, Inc.
|
Virginia
Commission
|
Virginia
State Corporation Commission
|
WACOG
|
Weighted
average cost of goods
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WNA
|
Weather
normalization adjustment
|
APB
25
|
APB
Opinion No. 25, “Accounting for Stock Issued to
Employees”
|
EITF
98-10
|
EITF
Issue No. 98-10, “Accounting for Contracts Involved in Energy Trading and
Risk Management Activities”
|
EITF
99-02
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EITF
Issue No. 99-02, “Accounting for Weather Derivatives”
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EITF
00-11
|
EITF Issue No. 00-11, “Lessor's Evaluation of Whether Leases of Certain Integral Equipment Meet the Ownership Transfer Requirements of FASB Statement No.13, Accounting for Leases, for Leases of Real Estate" |
EITF
02-03
|
EITF
Issue No. 02-03, “Issues Involved in Accounting for Contracts under EITF
Issue No. 98-10, ‘Accounting for Contracts Involved in Energy Trading and
Risk Management Activities’”
|
FIN
39
|
FASB
Interpretation No. (FIN) 39 “Offsetting of Amounts Related to Certain
Contracts”
|
FSP
FIN 39-1
|
FASB
Staff Position 39-1 “Amendment of FIN 39
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FIN
46 & FIN 46R
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FIN
46, “Consolidation of Variable Interest Entities”
|
FIN
47
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FIN
47, “Accounting for Conditional Asset Retirement Obligations, an
interpretation of FASB Statement No. 143”
|
FIN
48
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FIN
48, “Accounting for Uncertainty in Income Taxes, an interpretation of SFAS
Statement No. 109”
|
SFAS
5
|
SFAS
No. 5, “Accounting for Contingencies”
|
SFAS
13
|
SFAS
No. 13, “Accounting for Leases”
|
SFAS
66
|
SFAS
No. 66, “Accounting for Sales of Real Estate”
|
SFAS
71
|
SFAS
No. 71, “Accounting for the Effects of Certain Types of
Regulation”
|
SFAS
87
|
SFAS
No. 87, “Employers’ Accounting for Pensions”
|
SFAS
106
|
SFAS
No. 106, “Employers’ Accounting for Postretirement Benefits Other Than
Pensions”
|
SFAS
109
|
SFAS
No. 109, “Accounting for Income Taxes”
|
SFAS
123 & SFAS 123R
|
SFAS
No. 123, “Accounting for Stock-Based Compensation”
|
SFAS
133
|
SFAS
No. 133, “Accounting for Derivative Instruments and Hedging
Activities”
|
SFAS
141
|
SFAS
No. 141, “Business Combinations”
|
SFAS
142
|
SFAS
No. 142, “Goodwill and Other Intangible Assets”
|
SFAS
148
|
SFAS
No. 148, “Accounting for Stock-Based Compensation – Transition and
Disclosure”
|
SFAS
149
|
SFAS
No. 149, “Amendment of SFAS 133 on Derivative Instruments and Hedging
Activities”
|
SFAS
157
|
SFAS
No. 157, “Fair Value Measurements”
|
SFAS
158
|
SFAS
No. 158, “Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans”
|
SFAS
159
|
SFAS
No. 159, “The Fair Value Option for Financial Assets and
Liabilities”
|
SFAS
160
|
SFAS
No. 160, “Noncontrolling Interests in Consolidated Financial
Statements”
|
In
millions
|
Operating
revenues
|
Operating
margin (1)
|
Operating
expenses
|
EBIT
(1)
|
||||||||||||
2007
|
||||||||||||||||
Distribution
operations
|
$ |
1,665
|
$ |
820
|
$ |
485
|
$ |
338
|
||||||||
Retail
energy operations
|
892
|
188
|
75
|
83
|
||||||||||||
Wholesale
services
|
83
|
77
|
43
|
34
|
||||||||||||
Energy
investments
|
42
|
40
|
25
|
15
|
||||||||||||
Corporate
(2)
|
(188 | ) |
-
|
8
|
(7 | ) | ||||||||||
Consolidated
|
$ |
2,494
|
$ |
1,125
|
$ |
636
|
$ |
463
|
||||||||
2006
|
||||||||||||||||
Distribution
operations
|
$ |
1,624
|
$ |
807
|
$ |
499
|
$ |
310
|
||||||||
Retail
energy operations
|
930
|
156
|
68
|
63
|
||||||||||||
Wholesale
services
|
182
|
139
|
49
|
90
|
||||||||||||
Energy
investments
|
41
|
36
|
26
|
10
|
||||||||||||
Corporate
(2)
|
(156 | ) |
1
|
9
|
(9 | ) | ||||||||||
Consolidated
|
$ |
2,621
|
$ |
1,139
|
$ |
651
|
$ |
464
|
||||||||
2005
|
||||||||||||||||
Distribution
operations
|
$ |
1,753
|
$ |
814
|
$ |
518
|
$ |
299
|
||||||||
Retail
energy operations
|
996
|
146
|
61
|
63
|
||||||||||||
Wholesale
services
|
95
|
92
|
42
|
49
|
||||||||||||
Energy
investments
|
56
|
40
|
23
|
19
|
||||||||||||
Corporate
(2)
|
(182 | ) |
-
|
6
|
(11 | ) | ||||||||||
Consolidated
|
$ |
2,718
|
$ |
1,092
|
$ |
650
|
$ |
419
|
(1)
These are non-GAAP measurements. A reconciliation of operating margin and
EBIT
to
our operating income and net income is contained in “Results of
Operations” herein.
|
·
|
Atlanta
Gas Light
|
·
|
Chattanooga
Gas
|
·
|
Elizabethtown
Gas
|
·
|
Elkton
Gas
|
·
|
Florida
City Gas
|
·
|
Virginia
Natural Gas
|
·
|
distributing
natural gas for Marketers
|
·
|
constructing,
operating and maintaining the gas system infrastructure, including
responding to customer service calls and
leaks
|
·
|
reading
meters and maintaining underlying customer premise information for
Marketers
|
Atlanta Gas
Light
|
Elizabethtown
Gas
|
Virginia Natural
Gas
|
Florida City
Gas
|
Chattanooga
Gas
|
||||||||||||||||
State
regulator
|
Georgia
Commission
|
New
Jersey Commission
|
Virginia
Commission
|
Florida
Commission
|
Tennessee
Commission
|
|||||||||||||||
Current
rates effective until
|
May
2010
|
Jan.
2010
|
Aug.
2011
|
N/A
|
Jan.
2011
|
|||||||||||||||
Authorized
return on rate base (1)
|
8.53 | % | 7.95 | % | 9.24 | % | 7.36 | % | 7.89 | % | ||||||||||
Estimated
2007 return on rate base (2) (4)
|
8.59 | % | 8.46 | % | 7.90 | % | 6.09 | % | 7.53 | % | ||||||||||
Authorized
return on equity
|
10.9 | % | 10.0 | % | 10.9 | % | 11.25 | % | 10.2 | % | ||||||||||
Estimated
2007 return on equity (2)
(4)
|
11.03 | % | 10.32 | % | 8.96 | % | 7.04 | % | 9.40 | % | ||||||||||
Authorized
rate base % of equity (3)
|
47.9 | % | 53.0 | % | 52.4 | % | 36.8 | % | 44.8 | % | ||||||||||
Rate
base included in 2007 return on equity (in millions) (3) (4)
|
$ |
1,271
|
$ |
441
|
$ |
350
|
$ |
146
|
$ |
100
|
(1)
|
The
authorized return on rate base, return on equity, and percentage of equity
reflected above were those authorized as of December 31,
2007.
|
(2)
|
Estimate
based on principles consistent with utility ratemaking in each
jurisdiction. Returns are not necessarily consistent with GAAP
returns.
|
(3) | Estimated based on 13-month average. |
(4) |
Florida
City Gas includes the impacts of the acquisition adjustment, as approved
by the Florida Commission in December 2007, in its rate base,
return
on rate base and return on equity
calculations
|
·
|
changes
in the availability or price of natural gas and other forms of
energy
|
·
|
general
economic conditions
|
·
|
energy
conservation
|
·
|
legislation
and regulations
|
·
|
the
capability to convert from natural gas to alternative
fuels
|
·
|
weather
|
·
|
new
housing starts
|
Affiliated
subsidiary
|
Approximate # of
employees
|
Date of contract
expiration
|
||||
Teamsters
(Local Nos. 769 and 385)
|
Florida
City Gas
|
55
|
March
2008
|
|||
Utility
Workers Union of America (Local No. 424)
|
Elizabethtown
Gas
|
160
|
November
2009
|
|||
International
Brotherhood of Electrical Workers (Local No. 50)
|
Virginia
Natural Gas
|
140
|
May
2010
|
|||
Total
|
355
|
Expiration
|
Timing
of
|
Type of
fee
|
% Shared
or
|
Profit sharing / fees
payments
|
|||||||||||||||
In
millions
|
date
|
payment
|
structure
|
annual
fee
|
2007
|
2006
|
2005
|
||||||||||||
Elkton
Gas
|
Mar
2008
|
Monthly
|
Fixed-fee
|
(A)
|
$ |
-
|
$ |
-
|
$ |
-
|
|||||||||
Chattanooga
Gas
|
Mar
2008
|
Annually
|
Profit
-sharing
|
50 | % |
2
|
4
|
2
|
|||||||||||
Elizabethtown
Gas
|
Mar
2008
|
Monthly
|
Fixed
-fee
|
$4
|
6
|
4
|
-
|
||||||||||||
Florida
City Gas
|
Mar
2008
|
Annually
|
Profit
-sharing
|
50 | % |
1
|
-
|
-
|
|||||||||||
Virginia
Natural Gas
|
Mar
2009
|
Annually
|
Profit
-sharing
|
(B)
|
7
|
2
|
5
|
||||||||||||
Atlanta
Gas Light
|
Mar
2012
|
Quarterly
|
Profit
-sharing
|
60 | % |
9
|
6
|
4
|
|||||||||||
Total
|
$ |
25
|
$ |
16
|
$ |
11
|
(A)
|
Annual
fixed fee is approximately $11,000.
|
(B)
|
Profit sharing is based on a tiered sharing structure. |
·
|
adverse
economic conditions
|
·
|
adverse
general capital market conditions
|
·
|
poor
performance and health of the utility industry in
general
|
·
|
bankruptcy
or financial distress of unrelated energy companies or
Marketers
|
·
|
significant
decrease in the demand for natural
gas
|
·
|
adverse
regulatory actions that affect our local gas distribution companies and
our natural gas storage business
|
·
|
terrorist
attacks on our facilities or our
suppliers
|
·
|
extreme
weather conditions
|
Name, age and position with the
company
|
Periods
served
|
John W. Somerhalder II,
Age 52 (1)
|
|
Chairman,
President and Chief Executive Officer
|
October
2007 - Present
|
President
and Chief Executive Officer
|
March
2006 – October 2007
|
Andrew W. Evans, Age
41
|
|
Executive
Vice President and Chief Financial Officer
|
May
2006 – Present
|
Senior
Vice President and Chief Financial Officer
|
September
2005 – May 2006
|
Vice
President and Treasurer
|
April
2002 – September 2005
|
Ralph Cleveland, Age
45
|
|
Senior
Vice President, Engineering and Operations
|
November
2004 - Present
|
Vice
President, Engineering and Construction
|
June
2002 – November 2004
|
Henry P. Linginfelter,
Age 47
|
|
Executive
Vice President, Utility Operations
|
June
2007 - Present
|
Senior
Vice President, Mid-Atlantic Operations
|
November
2004– June 2007
|
President,
Virginia Natural Gas, Inc.
|
October
2000 – November 2004
|
Kevin P. Madden, Age
55
|
|
Executive
Vice President, External Affairs
|
November
2005 – Present
|
Executive Vice President, Distribution and Pipeline
Operations
|
April
2002 – November 2005
|
Melanie M. Platt, Age
53
|
|
Senior
Vice President, Human Resources
|
September
2004 – Present
|
Senior
Vice President and Chief Administrative Officer
|
November
2002 – September 2004
|
Douglas N. Schantz, Age
52 (2)
|
|
President,
Sequent Energy Management, L.P.
|
May
2003 – Present
|
Paul R. Shlanta, Age
50
|
|
Executive
Vice President, General Counsel and Chief Ethics and Compliance
Officer
|
September
2005 – Present
|
Senior
Vice President, General Counsel and Chief Corporate Compliance
Officer
|
September
2002 – September 2005
|
(1)
|
Mr.
Somerhalder was executive vice president of El Paso Corporation (NYSE: EP)
from 2000 until May 2005,
and
he continued service under a professional services agreement from May 2005
until March 2006.
|
(2)
|
Mr.
Schantz served as vice president of the gas origination division at
Cinergy Marketing & Trading, LP,
an
affiliate of Cinergy Corp (NYSE: CIN) from September 2000 to April
2003.
|
Sales price of common
stock
|
Cash dividend per
common
|
|||||||||||
Quarter
ended:
|
High
|
Low
|
share
|
|||||||||
2007
|
||||||||||||
March
31, 2007
|
$ |
42.99
|
$ |
38.20
|
$ |
0.41
|
||||||
June
30, 2007
|
44.67
|
39.52
|
0.41
|
|||||||||
September
30, 2007
|
41.51
|
35.24
|
0.41
|
|||||||||
December
31, 2007
|
41.16
|
35.42
|
0.41
|
|||||||||
$ |
1.64
|
|||||||||||
2006
|
||||||||||||
March
31, 2006
|
$ |
36.48
|
$ |
34.40
|
$ |
0.37
|
||||||
June
30, 2006
|
38.13
|
34.43
|
0.37
|
|||||||||
September
30, 2006
|
40.00
|
34.76
|
0.37
|
|||||||||
December
31, 2006
|
40.09
|
36.04
|
0.37
|
|||||||||
$ |
1.48
|
·
|
our
ability to satisfy our obligations under certain financing agreements,
including debt-to-capitalization and total shareholders’ equity
covenants
|
·
|
our
ability to satisfy our obligations to any preferred
shareholders
|
·
|
we
could not pay our debts as they become due in the usual course of
business, or
|
·
|
our
total assets would be less than our total liabilities plus, subject to
some exceptions, any amounts necessary to satisfy (upon dissolution) the
preferential rights of shareholders whose preferential rights are superior
to those of the shareholders receiving the
dividends
|
Period
|
Total
number of shares purchased (1) (2)
(3)
|
Average
price paid per share
|
Total
number of shares purchased as part of publicly announced plans or programs
(3)
|
Maximum
number of shares that may yet be purchased under the publicly announced
plans or programs (3)
|
||||||||||||
October
2007
|
446,788
|
$ |
38.99
|
446,788
|
5,084,912
|
|||||||||||
November
2007
|
133,961
|
38.63
|
133,961
|
4,950,951
|
||||||||||||
December
2007
|
2,592
|
37.48
|
-
|
4,950,951
|
||||||||||||
Total
fourth quarter
|
583,341
|
$ |
38.90
|
580,749
|
(1)
|
The
total number of shares purchased includes an aggregate of 2,592 shares
surrendered to us to satisfy tax withholding obligations
in
connection with the vesting of shares of restricted stock and/or the
exercise of stock options.
|
(2)
|
On
March 20, 2001, our Board of Directors approved the purchase of up to
600,000 shares of our common stock in the open market to
be
used for issuances under the Officer Incentive Plan (Officer Plan). We did
not purchase any shares for such purposes in the fourth quarter of 2007.
As
of December 31, 2007, we had purchased a total 297,234 of the 600,000
shares authorized for purchase, leaving 302,766 shares available for
purchase
under this program.
|
(3)
|
On February 3, 2006, we announced
that our Board of Directors had authorized a plan to repurchase up to a
total of 8 million shares of our
common stock, excluding the
shares remaining available for purchase in connection with the Officer
Plan as described in note (2) above, over a five-year
period.
|
Dollars and shares in
millions, except per share amounts
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||||||
Income statement
data
|
||||||||||||||||||||
Operating
revenues
|
$ |
2,494
|
$ |
2,621
|
$ |
2,718
|
$ |
1,832
|
$ |
983
|
||||||||||
Cost
of gas
|
1,369
|
1,482
|
1,626
|
995
|
339
|
|||||||||||||||
Operating margin
(1)
|
1,125
|
1,139
|
1,092
|
837
|
644
|
|||||||||||||||
Operating
expenses
|
||||||||||||||||||||
Operation
and maintenance
|
451
|
473
|
477
|
377
|
283
|
|||||||||||||||
Depreciation
and amortization
|
144
|
138
|
133
|
99
|
91
|
|||||||||||||||
Taxes
other than income taxes
|
41
|
40
|
40
|
29
|
28
|
|||||||||||||||
Total
operating expenses
|
636
|
651
|
650
|
505
|
402
|
|||||||||||||||
Gain
on sale of Caroline Street campus
|
-
|
-
|
-
|
-
|
16
|
|||||||||||||||
Operating
income
|
489
|
488
|
442
|
332
|
258
|
|||||||||||||||
Equity
in earnings of SouthStar Energy Services LLC
|
-
|
-
|
-
|
-
|
46
|
|||||||||||||||
Other
income (expense)
|
4
|
(1 | ) | (1 | ) |
-
|
(6 | ) | ||||||||||||
Minority
interest
|
(30 | ) | (23 | ) | (22 | ) | (18 | ) |
-
|
|||||||||||
Earnings
before interest and taxes (EBIT) (1)
|
463
|
464
|
419
|
314
|
298
|
|||||||||||||||
Interest
expense
|
125
|
123
|
109
|
71
|
75
|
|||||||||||||||
Earnings
before income taxes
|
338
|
341
|
310
|
243
|
223
|
|||||||||||||||
Income
taxes
|
127
|
129
|
117
|
90
|
87
|
|||||||||||||||
Income
before cumulative effect of change in accounting principle
|
211
|
212
|
193
|
153
|
136
|
|||||||||||||||
Cumulative
effect of change in accounting principle, net of $5 in income
taxes
|
-
|
-
|
-
|
-
|
(8 | ) | ||||||||||||||
Net
income
|
$ |
211
|
$ |
212
|
$ |
193
|
$ |
153
|
$ |
128
|
||||||||||
Common stock
data
|
||||||||||||||||||||
Weighted
average shares outstanding basic
|
77.1
|
77.6
|
77.3
|
66.3
|
63.1
|
|||||||||||||||
Weighted
average shares outstanding diluted
|
77.4
|
78.0
|
77.8
|
67.0
|
63.7
|
|||||||||||||||
Total
shares outstanding (2)
|
76.4
|
77.7
|
77.8
|
76.7
|
64.5
|
|||||||||||||||
Earnings
per share - basic
|
$ |
2.74
|
$ |
2.73
|
$ |
2.50
|
$ |
2.30
|
$ |
2.03
|
||||||||||
Earnings
per share - diluted
|
$ |
2.72
|
$ |
2.72
|
$ |
2.48
|
$ |
2.28
|
$ |
2.01
|
||||||||||
Dividends
declared per share
|
$ |
1.64
|
$ |
1.48
|
$ |
1.30
|
$ |
1.15
|
$ |
1.11
|
||||||||||
Dividend
payout ratio
|
60 | % | 54 | % | 52 | % | 50 | % | 55 | % | ||||||||||
Dividend
yield
|
4.4 | % | 3.8 | % | 3.7 | % | 3.5 | % | 3.8 | % | ||||||||||
Book
value per share (3)
|
$ |
21.74
|
$ |
20.72
|
$ |
19.27
|
$ |
18.04
|
$ |
14.66
|
||||||||||
Price-earnings
ratio
|
13.7
|
14.3
|
13.9
|
14.5
|
14.3
|
|||||||||||||||
Stock
price market range
|
$35.24-$44.67
|
$34.40-$40.09
|
$32.00-$39.32
|
$26.50-$33.65
|
$21.90-$29.35
|
|||||||||||||||
Market
value per share (4)
|
$ |
37.64
|
$ |
38.91
|
$ |
34.81
|
$ |
33.24
|
$ |
29.10
|
||||||||||
Market
value (2)
|
$ |
2,876
|
$ |
3,023
|
$ |
2,708
|
$ |
2,551
|
$ |
1,877
|
||||||||||
Balance sheet data (2)
|
||||||||||||||||||||
Total
assets
|
$ |
6,268
|
$ |
6,147
|
$ |
6,320
|
$ |
5,637
|
$ |
3,972
|
||||||||||
Property,
plant and equipment – net
|
3,566
|
3,436
|
3,333
|
3,178
|
2,345
|
|||||||||||||||
Working
capital
|
166
|
156
|
73
|
(20 | ) | (306 | ) | |||||||||||||
Total
debt
|
2,254
|
2,161
|
2,137
|
1,957
|
1,340
|
|||||||||||||||
Common
shareholders’ equity
|
1,661
|
1,609
|
1,499
|
1,385
|
945
|
|||||||||||||||
Cash flow
data
|
||||||||||||||||||||
Net
cash provided by operating activities
|
$ |
376
|
$ |
354
|
$ |
80
|
$ |
287
|
$ |
122
|
||||||||||
Property,
plant and equipment expenditures
|
259
|
253
|
267
|
264
|
158
|
|||||||||||||||
Net
borrowings and (payments) of short-term debt
|
52
|
6
|
188
|
(480 | ) | (82 | ) | |||||||||||||
Financial ratios (2)
|
||||||||||||||||||||
Total
debt
|
58 | % | 57 | % | 59 | % | 59 | % | 59 | % | ||||||||||
Common
shareholders’ equity
|
42 | % | 43 | % | 41 | % | 41 | % | 41 | % | ||||||||||
Total
|
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Return
on average common shareholders’ equity
|
12.9 | % | 13.6 | % | 13.4 | % | 13.1 | % | 15.5 | % |
(1)
|
These
are non-GAAP measurements. A reconciliation of operating margin and EBIT
to our operating income and net income is contained in Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results
of Operations-AGL Resources-Results of
Operations.”
|
(2)
|
As
of the last day of the fiscal
period.
|
(3)
|
Common
shareholders’ equity divided by total outstanding common shares as of the
last day of the fiscal period.
|
(4)
|
Closing
price of common stock on the New York Stock Exchange as of the last
trading day of the fiscal period.
|
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Residential
|
$ |
1,143
|
$ |
1,127
|
$ |
1,177
|
||||||
Commercial
|
500
|
460
|
452
|
|||||||||
Transportation
|
401
|
434
|
450
|
|||||||||
Industrial
|
250
|
310
|
412
|
|||||||||
Other
|
200
|
290
|
227
|
|||||||||
Total
operating revenues
|
$ |
2,494
|
$ |
2,621
|
$ |
2,718
|
In millions, except per share
amounts
|
2007
|
2006
|
2005
|
|||||||||
Operating
revenues
|
$ |
2,494
|
$ |
2,621
|
$ |
2,718
|
||||||
Cost
of gas
|
1,369
|
1,482
|
1,626
|
|||||||||
Operating
margin
|
1,125
|
1,139
|
1,092
|
|||||||||
Operating
expenses
|
||||||||||||
Operation
and maintenance
|
451
|
473
|
477
|
|||||||||
Depreciation
and amortization
|
144
|
138
|
133
|
|||||||||
Taxes
other than income
|
41
|
40
|
40
|
|||||||||
Total
operating expenses
|
636
|
651
|
650
|
|||||||||
Operating
income
|
489
|
488
|
442
|
|||||||||
Other
income (expense)
|
4
|
(1 | ) | (1 | ) | |||||||
Minority
interest
|
(30 | ) | (23 | ) | (22 | ) | ||||||
EBIT
|
463
|
464
|
419
|
|||||||||
Interest
expense
|
125
|
123
|
109
|
|||||||||
Earnings
before income taxes
|
338
|
341
|
310
|
|||||||||
Income
taxes
|
127
|
129
|
117
|
|||||||||
Net
income
|
$ |
211
|
$ |
212
|
$ |
193
|
||||||
Earnings
per common share:
|
||||||||||||
Basic
|
$ |
2.74
|
$ |
2.73
|
$ |
2.50
|
||||||
Diluted
|
$ |
2.72
|
$ |
2.72
|
$ |
2.48
|
||||||
Weighted
average number of common shares outstanding:
|
||||||||||||
Basic
|
77.1
|
77.6
|
77.3
|
|||||||||
Diluted
|
77.4
|
78.0
|
77.8
|
Weather
|
2007
vs.
|
2006
vs.
|
2007
vs.
|
2006
vs.
|
2005
vs
|
|||||||||||||||||||||||||||||||
Heating
degree days (1)
|
Year
ended December 31,
|
2006
|
2005
|
normal
|
normal
|
normal
|
||||||||||||||||||||||||||||||
Normal
|
2007
|
2006
|
2005
|
colder
(warmer)
|
colder
(warmer)
|
colder
(warmer)
|
colder
(warmer)
|
colder
(warmer)
|
||||||||||||||||||||||||||||
Florida
|
495
|
326
|
468
|
552
|
(30 | )% | (15 | )% | (34 | )% | (5 | )% | 12 | % | ||||||||||||||||||||||
Georgia
|
2,582
|
2,366
|
2,455
|
2,739
|
(4 | )% | (10 | )% | (8 | )% | (5 | )% | 6 | % | ||||||||||||||||||||||
Maryland
|
4,659
|
4,621
|
4,205
|
4,966
|
10 | % | (15 | )% | (1 | )% | (10 | )% | 7 | % | ||||||||||||||||||||||
New
Jersey
|
4,588
|
4,777
|
4,074
|
4,931
|
17 | % | (17 | )% | 4 | % | (11 | )% | 7 | % | ||||||||||||||||||||||
Tennessee
|
2,950
|
2,722
|
2,892
|
3,119
|
(6 | )% | (7 | )% | (8 | )% | (2 | )% | 6 | % | ||||||||||||||||||||||
Virginia
|
3,126
|
3,055
|
2,870
|
3,469
|
6 | % | (17 | )% | (2 | )% | (8 | )% | 11 | % |
Customers
|
Year
ended December 31,
|
2007
vs. 2006
|
2006
vs. 2005
|
|||||||||||||||||
2007
|
2006
|
2005
|
%
change
|
%
change
|
||||||||||||||||
Distribution
Operations
|
||||||||||||||||||||
Average
end-use customers (in
thousands)
|
||||||||||||||||||||
Atlanta
Gas Light
|
1,559
|
1,546
|
1,545
|
0.8 | % | 0.1 | % | |||||||||||||
Chattanooga
Gas
|
61
|
61
|
61
|
-
|
-
|
|||||||||||||||
Elizabethtown
Gas
|
272
|
269
|
266
|
1.1
|
1.1
|
|||||||||||||||
Elkton
Gas
|
6
|
6
|
6
|
-
|
-
|
|||||||||||||||
Florida
City Gas
|
104
|
104
|
103
|
-
|
1.0
|
|||||||||||||||
Virginia
Natural Gas
|
269
|
264
|
261
|
1.9
|
1.2
|
|||||||||||||||
Total
|
2,271
|
2,250
|
2,242
|
0.9 | % | 0.4 | % | |||||||||||||
Operation
and maintenance expenses per customer
|
$ |
145
|
$ |
156
|
$ |
166
|
(7 | )% | (6 | )% | ||||||||||
EBIT
per customer
|
$ |
149
|
$ |
138
|
$ |
133
|
8 | % | 4 | % | ||||||||||
Retail Energy
Operations
|
||||||||||||||||||||
Average
customers (in
thousands)
|
540
|
533
|
531
|
1.3 | % | 0.4 | % | |||||||||||||
Market
share in Georgia
|
35 | % | 35 | % | 35 | % |
-
|
-
|
Volumes
In
billion cubic feet (Bcf)
|
Year
ended December 31,
|
2007
vs. 2006
|
2006
vs. 2005
|
|||||||||||||||||
2007
|
2006
|
2005
|
%
change
|
%
change
|
||||||||||||||||
Distribution
Operations
|
||||||||||||||||||||
Firm
|
211
|
199
|
228
|
6 | % | (13 | )% | |||||||||||||
Interruptible
|
108
|
117
|
117
|
(8 | )% | - | ||||||||||||||
Total
|
319
|
316
|
345
|
1 | % | (8 | )% | |||||||||||||
Retail Energy
Operations
|
||||||||||||||||||||
Georgia
firm
|
38.5
|
37.2
|
42.6
|
3 | % | (13 | )% | |||||||||||||
Ohio
and Florida
|
4.5
|
1.3
|
-
|
246 | % | 100 | % | |||||||||||||
Wholesale
Services
|
||||||||||||||||||||
Daily
physical sales (Bcf / day)
|
2.35
|
2.20
|
2.17
|
7 | % | 1 | % |
In
millions
|
Operating
revenues
|
Operating
margin (1)
|
Operating
expenses
|
EBIT
(1)
|
|||||||||||||
2007
|
|||||||||||||||||
Distribution
operations
|
$ |
1,665
|
$ |
820
|
$ |
485
|
$ |
338
|
|||||||||
Retail
energy operations
|
892
|
188
|
75
|
83
|
|||||||||||||
Wholesale
services
|
83
|
77
|
43
|
34
|
|||||||||||||
Energy
investments
|
42
|
40
|
25
|
15
|
|||||||||||||
Corporate
(2)
|
(188 | ) |
-
|
8
|
(7 | ) | |||||||||||
Consolidated
|
$ |
2,494
|
$ |
1,125
|
$ |
636
|
$ |
463
|
|||||||||
2006
|
|||||||||||||||||
Distribution
operations
|
$ |
1,624
|
$ |
807
|
$ |
499
|
$ |
310
|
|||||||||
Retail
energy operations
|
930
|
156
|
68
|
63
|
|||||||||||||
Wholesale
services
|
182
|
139
|
49
|
90
|
|||||||||||||
Energy
investments
|
41
|
36
|
26
|
10
|
|||||||||||||
Corporate
(2)
|
(156 | ) |
1
|
9
|
(9 | ) | |||||||||||
Consolidated
|
$ |
2,621
|
$ |
1,139
|
$ |
651
|
$ |
464
|
|||||||||
2005
|
|||||||||||||||||
Distribution
operations
|
$ |
1,753
|
$ |
814
|
$ |
518
|
$ |
299
|
|||||||||
Retail
energy operations
|
996
|
146
|
61
|
63
|
|||||||||||||
Wholesale
services
|
95
|
92
|
42
|
49
|
|||||||||||||
Energy
investments
|
56
|
40
|
23
|
19
|
|||||||||||||
Corporate
(2)
|
(182 | ) |
-
|
6
|
(11 | ) | |||||||||||
Consolidated
|
$ |
2,718
|
$ |
1,092
|
$ |
650
|
$ |
419
|
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Gain
(loss) on storage hedges
|
$ |
12
|
$ |
41
|
$ | (7 | ) | |||||
Gain
on transportation hedges
|
5
|
12
|
-
|
|||||||||
Commercial
activity
|
61
|
107
|
102
|
|||||||||
Inventory
LOCOM, net of hedging recoveries
|
(1 | ) | (21 | ) | (3 | ) | ||||||
Operating
margin
|
$ |
77
|
$ |
139
|
$ |
92
|
Three
months ended
|
||||||||||||||||
Mar.
31, 2008
|
June
30, 2008
|
Dec.31,
2008
|
Total
|
|||||||||||||
Salt
dome (WACOG
$6.70)
|
33
|
-
|
94
|
127
|
||||||||||||
Reservoir (WACOG
$6.20)
|
773
|
24
|
-
|
797
|
||||||||||||
Total
volumes
|
806
|
24
|
94
|
924
|
||||||||||||
Expected
operating revenues from physical inventory (in
millions)
|
$ |
9
|
$ |
-
|
$ |
2
|
$ |
11
|
In
millions
|
||||
Operating
expenses for year ended Dec. 31, 2006
|
$ |
651
|
||
Decreased
incentive compensation costs at distribution operations due to not
achieving AIP earnings goals
|
(14 | ) | ||
Decreased
incentive compensation costs at wholesale services due to lower operating
margin
|
(13 | ) | ||
Decreased
bad debt expense at retail energy operations
|
(3 | ) | ||
Increased
incentive compensation costs due to growth and improved operations at
retail energy operations
|
3
|
|||
Increased
depreciation and amortization
|
6
|
|||
Increased
payroll and other operating costs at wholesale services due to continued
expansion
|
7
|
|||
Increased
costs at retail energy operations due to customer care, marketing costs
and higher payroll in support of customer and market growth
initiatives
|
5
|
|||
Other,
net primarily at distribution operations due to pension, outside services
and reduction in customer
service expense
|
(6 | ) | ||
Operating
expenses for year ended Dec. 31, 2007
|
$ |
636
|
In
millions
|
2007
|
2006
|
Change
|
|||||||||
Interest
expense
|
$ |
125
|
$ |
123
|
$ |
2
|
||||||
Average
debt outstanding (1)
|
$ |
1,967
|
$ |
2,023
|
$ | (56 | ) | |||||
Average
rate (2)
|
6.4 | % | 6.1 | % | 0.3 | % |
(1)
|
Daily
average of all outstanding debt.
|
(2)
|
Excluding
$3 million premium paid for early redemption of debt, average rate in 2007
would have been 6.2%.
|
In
millions
|
||||
Operating
expenses for 2005
|
$ |
650
|
||
Increased
payroll, incentive compensation and corporate overhead allocated costs at
wholesale services to support growth
|
7
|
|||
Increased
bad debt expenses at retail energy operations and distribution
operations
|
4
|
|||
Lower
expenses resulting from energy investment assets sold in
2005
|
(8 | ) | ||
Lower
expenses at distribution operations related to workforce and facilities
restructurings in 2005 and 2006
|
(15 | ) | ||
Increased
depreciation and amortization
|
5
|
|||
Other
|
8
|
|||
Operating
expenses for 2006
|
$ |
651
|
In
millions
|
2006
|
2005
|
Change
|
|||||||||
Total
interest expense
|
$ |
123
|
$ |
109
|
$ |
14
|
||||||
Average
debt outstanding (1)
|
2,023
|
1,823
|
200
|
|||||||||
Average
interest rate
|
6.1 | % | 6.0 | % | 0.1 | % |
(1)
|
Daily
average of all outstanding debt.
|
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Net cash provided by (used
in):
|
||||||||||||
Operating
activities
|
$ |
376
|
$ |
354
|
$ |
80
|
||||||
Investing
activities
|
(253 | ) | (248 | ) | (194 | ) | ||||||
Financing
activities
|
(122 | ) | (118 | ) |
97
|
|||||||
Net
increase (decrease) in cash and cash equivalents
|
$ |
1
|
$ | (12 | ) | $ | (17 | ) |
·
|
Base business– new
construction and infrastructure improvements at our distribution
operations segment
|
·
|
Natural gas storage–
salt-dome cavern expansions at Golden Triangle and Jefferson
Island
|
·
|
Hampton Roads– Virginia
Natural Gas’ pipeline project, which will connect its northern and
southern systems
|
·
|
PRP– Atlanta Gas Light’s
program to replace all bare steel and cast iron pipe in its system in
Georgia
|
·
|
SNG– a 250-mile pipeline
in Georgia acquired from Southern Natural Gas (SNG) in
2005
|
·
|
Other– primarily
includes information technology, building and leasehold improvements and
AGL Networks’ telecommunication
expenditures
|
S&P
|
Moody’s
|
Fitch
|
|
Corporate
rating
|
A-
|
||
Commercial
paper
|
A-2
|
P-2
|
F-2
|
Senior
unsecured
|
BBB+
|
Baa1
|
A-
|
Ratings
outlook
|
Stable
|
Stable
|
Stable
|
In
millions
|
Dec.
31, 2007
|
Dec.
31, 2006
|
||||||||||||||
Short-term
debt
|
$ |
580
|
15 | % | $ |
539
|
14 | % | ||||||||
Long-term
debt (1)
|
1,674
|
43
|
1,622
|
43
|
||||||||||||
Total
debt
|
2,254
|
58
|
2,161
|
57
|
||||||||||||
Common
shareholders’ equity
|
1,661
|
42
|
1,609
|
43
|
||||||||||||
Total
capitalization
|
$ |
3,915
|
100 | % | $ |
3,770
|
100 | % |
(1)
|
Net
of interest rate swaps.
|
·
|
the
maintenance of a ratio of total debt to total capitalization of no greater
than 70%. As of December 31, 2007, our ratio of total debt of 58% to total
capitalization was within our targeted and required ranges, and was
consistent with our ratio of 57% at December 31,
2006
|
·
|
the
continued accuracy of representations and warranties contained in the
agreement
|
·
|
In
January 2007, we used proceeds from the sale of commercial paper to redeem
$11 million of 7% medium-term notes previously scheduled to mature in
January 2015.
|
·
|
In
June 2007 we refinanced $55 million of our gas facility revenue bonds due
June 2032.The original bonds had a fixed interest rate of 5.7% per year
and were refinanced with $55 million of adjustable-rate gas facility
revenue bonds. The maturity date of these bonds remains June 2032 and
there is a 35-day auction period where the interest rate adjusts every 35
days. The interest rate at December 31, 2007, was
4.7%.
|
·
|
In
July 2007, we used the proceeds from the sale of commercial paper to pay
to AGL Capital Trust I the $75 million principal amount of 8.17% junior
subordinated debentures plus a $3 million premium for early redemption of
the junior subordinated debentures, and to pay a $2 million note
representing our common securities interest in AGL Capital Trust
I.
|
·
|
In
December 2007, AGL Capital issued $125 million of 6.375% senior notes. The
senior notes are part of a series of notes issued by AGL Capital in June
2006. Both sets of notes are now part of a single series with an aggregate
of $300 million in principal outstanding. The proceeds of the note
issuance, equal to approximately $123 million, were used to pay down
short-term indebtedness incurred under our commercial paper
program.
|
2009
&
|
2011
&
|
2013
&
|
||||||||||||||||||
In
millions
|
Total
|
2008
|
2010
|
2012
|
thereafter
|
|||||||||||||||
Recorded contractual
obligations:
|
||||||||||||||||||||
Long-term
debt
|
$ |
1,674
|
$ |
-
|
$ |
2
|
$ |
315
|
$ |
1,357
|
||||||||||
Short-term
debt
|
580
|
580
|
-
|
-
|
-
|
|||||||||||||||
ERC (1)
|
107
|
10
|
34
|
53
|
10
|
|||||||||||||||
PRP costs
(1)
|
245
|
55
|
112
|
60
|
18
|
|||||||||||||||
Total
|
$ |
2,606
|
$ |
645
|
$ |
148
|
$ |
428
|
$ |
1,385
|
(1)
|
Includes
charges recoverable through rate rider
mechanisms.
|
2009
&
|
2011
&
|
2013
&
|
||||||||||||||||||
In
millions
|
Total
|
2008
|
2010
|
2012
|
thereafter
|
|||||||||||||||
Unrecorded contractual
obligations and commitments (1):
|
||||||||||||||||||||
Interest
charges
(2)
|
$ |
1,176
|
$ |
100
|
$ |
200
|
$ |
157
|
$ |
719
|
||||||||||
Pipeline charges, storage
capacity and gas supply (3)
|
1,792
|
456
|
637
|
348
|
351
|
|||||||||||||||
Operating
leases
|
154
|
26
|
50
|
34
|
44
|
|||||||||||||||
Standby
letters of credit, performance/surety
bonds
|
30
|
24
|
6
|
-
|
-
|
|||||||||||||||
Asset
management agreements (4)
|
24
|
8
|
8
|
8
|
-
|
|||||||||||||||
Total
|
$ |
3,176
|
$ |
614
|
$ |
901
|
$ |
547
|
$ |
1,114
|
(1)
|
In
accordance with generally accepted accounting principles, these items are
not reflected in our consolidated balance
sheet.
|
(2)
|
Floating
rate debt is based on the interest rate as of December 31, 2007 and the
maturity of the underlying debt instrument. As of December 31, 2007 we
have $39 million of accrued interest on our consolidated balance sheet
that will be paid in 2008.
|
(3)
|
Charges
recoverable through a PGA mechanism or alternatively billed to Marketers.
Also includes demand charges associated with
Sequent.
|
(4) | Represent fixed-fee payments for Sequent's asset management agreements between Atlanta Gas Light ($4 million) and Elizabethtown Gas ($4 million). As of December 31, 2007, $1 million of fixed-fee payments are accrued on our consolidated balance sheet, which will be paid in 2008. |
·
|
the
costs incurred to date that have not yet been recovered through rate
riders
|
·
|
the
future expected costs to be recovered through rate
riders
|
In
millions
|
Pension
Benefits
|
Health
and Life Benefits
|
||||||||||||||||||
Actuarial
assumptions
|
Percentage-point
change in assumption
|
Increase
(decrease) in ABO
|
Increase
(decrease) in cost
|
Increase
(decrease) in obligation
|
Increase
(decrease) in cost
|
|||||||||||||||
Expected
long-term return on plan assets
|
+/-1 | % | $ |
- /
-
|
$ | (3)/3 | ||||||||||||||
Discount
rate
|
+/-1 | % | (40)/45 | (4)/4 | ||||||||||||||||
Healthcare
cost trend rate
|
+/-1 | % | $ | 4/(4) | $ |
- /
-
|
In
millions
|
Pension
|
|||||||||||
Actuarial
assumptions
|
Percentage-point
change in assumption
|
Increase
(decrease) in ABO
|
Benefits
Increase
(decrease) in cost
|
|||||||||
Expected
long-term return on plan assets
|
+/-1 | % | $ |
- /
-
|
$ | (1)/1 | ||||||
Discount
rate
|
+/-1 | % | (5)/5 | -/(1) |
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Net
fair value of contracts outstanding at beginning of period
|
$ |
17
|
$ |
3
|
$ |
7
|
||||||
Contracts
realized or otherwise settled during period
|
(16 | ) | (3 | ) | (7 | ) | ||||||
Change
in net fair value of contracts
|
9
|
17
|
3
|
|||||||||
Net
fair value of contracts outstanding at end of period
|
$ |
10
|
$ |
17
|
$ |
3
|
In
millions
|
Prices actively
quoted (1)
|
Prices provided by other
external sources (2)
|
||||||
Mature
through 2008
|
$ |
5
|
$ |
5
|
||||
Matures
after 2008
|
-
|
-
|
||||||
Total
net fair value
|
$ |
5
|
$ |
5
|
(1)
|
Valued
using NYMEX futures prices.
|
(2)
|
Values
primarily related to weather derivative transactions that
are
valued on an intrinsic basis in accordance with EITF 99-02 as
based
on heating degree days.
|
Average values at December
31,
|
||||||||
In
millions
|
2007
|
2006
|
||||||
Asset
|
$ |
11
|
$ |
11
|
||||
Liability
|
4
|
6
|
Fair value at December
31,
|
||||||||
In
millions
|
2007
|
2006
|
||||||
Asset
|
$ |
12
|
$ |
30
|
||||
Liability
|
2
|
13
|
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Net
fair value of contracts outstanding at beginning of period
|
$ |
119
|
$ | (13 | ) | $ |
17
|
|||||
Contracts
realized or otherwise settled during period
|
(102 | ) |
17
|
(47 | ) | |||||||
Change
in net fair value of contracts
|
40
|
115
|
17
|
|||||||||
Net
fair value of contracts outstanding at end of period
|
$ |
57
|
$ |
119
|
$ | (13 | ) |
In
millions
|
Prices actively
quoted (1)
|
Prices provided by other
external sources (2)
|
||||||
Mature
through 2008
|
$ |
19
|
$ |
31
|
||||
Mature
2009 – 2010
|
1
|
2
|
||||||
Mature
2011 – 2013
|
-
|
3
|
||||||
Mature
after 2013
|
-
|
1
|
||||||
Total
net fair value
|
$ |
20
|
$ |
37
|
(1)
|
Valued
using NYMEX futures prices.
|
(2)
|
Valued
using basis transactions that represent the cost to transport
the
commodity from a NYMEX delivery point to the contract delivery
point.
These transactions are based on quotes obtained either through
electronic
trading platforms or directly from
brokers.
|
Average values at December
31,
|
||||||||
In
millions
|
2007
|
2006
|
||||||
Asset
|
$ |
63
|
$ |
95
|
||||
Liability
|
16
|
43
|
Fair value at December
31,
|
||||||||
In
millions
|
2007
|
2006
|
||||||
Asset
|
$ |
70
|
$ |
133
|
||||
Liability
|
13
|
14
|
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Period
end
|
$ |
1.2
|
$ |
1.3
|
$ |
0.6
|
||||||
12-month
average
|
1.3
|
1.2
|
0.4
|
|||||||||
High
|
2.3
|
2.5
|
1.1
|
|||||||||
Low
(1)
|
0.7
|
0.7
|
0.0
|
(1)
|
$0.0
values represent amounts less than $0.1
million.
|
As of December
31,
|
||||||||||||||||
Gross
receivables
|
Gross
payables
|
|||||||||||||||
In
millions
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Netting
agreements in place:
|
||||||||||||||||
Counterparty
is investment grade
|
$ |
437
|
$ |
359
|
$ |
356
|
$ |
297
|
||||||||
Counterparty
is non-investment grade
|
24
|
62
|
18
|
52
|
||||||||||||
Counterparty
has no external rating
|
135
|
75
|
204
|
156
|
||||||||||||
No
netting agreements in place:
|
||||||||||||||||
Counterparty
is investment grade
|
3
|
9
|
-
|
5
|
||||||||||||
Amount
recorded on balance sheet
|
$ |
599
|
$ |
505
|
$ |
578
|
$ |
510
|
As
of
|
||||||||
In
millions
|
December
31, 2007
|
December
31, 2006
|
||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ |
21
|
$ |
20
|
||||
Receivables
|
||||||||
Energy
marketing
|
599
|
505
|
||||||
Gas
|
212
|
197
|
||||||
Unbilled
revenues
|
179
|
172
|
||||||
Other
|
13
|
21
|
||||||
Less
allowance for uncollectible accounts
|
(14 | ) | (15 | ) | ||||
Total
receivables
|
989
|
880
|
||||||
Inventories
|
||||||||
Natural
gas stored underground
|
521
|
568
|
||||||
Other
|
30
|
29
|
||||||
Total
inventories
|
551
|
597
|
||||||
Energy
marketing and risk management assets
|
78
|
159
|
||||||
Unrecovered
PRP costs – current portion
|
31
|
27
|
||||||
Unrecovered
environmental remediation costs – current portion
|
23
|
27
|
||||||
Other
current assets
|
118
|
112
|
||||||
Total
current assets
|
1,811
|
1,822
|
||||||
Property, plant and
equipment
|
||||||||
Property,
plant and equipment
|
5,177
|
4,976
|
||||||
Less
accumulated depreciation
|
1,611
|
1,540
|
||||||
Property,
plant and equipment – net
|
3,566
|
3,436
|
||||||
Deferred debits and other
assets
|
||||||||
Goodwill
|
420
|
420
|
||||||
Unrecovered
PRP costs
|
254
|
247
|
||||||
Unrecovered
environmental remediation costs
|
135
|
143
|
||||||
Other
|
82
|
79
|
||||||
Total
deferred debits and other assets
|
891
|
889
|
||||||
Total
assets
|
$ |
6,268
|
$ |
6,147
|
As
of
|
||||||||
In millions, except share
amounts
|
December
31, 2007
|
December
31, 2006
|
||||||
Current
liabilities
|
||||||||
Short-term
debt
|
$ |
580
|
$ |
539
|
||||
Energy
marketing trade payable
|
578
|
510
|
||||||
Accounts
payable – trade
|
172
|
213
|
||||||
Accrued
PRP costs – current portion
|
55
|
35
|
||||||
Accrued
interest
|
39
|
37
|
||||||
Customer
deposits
|
35
|
42
|
||||||
Deferred
purchased gas adjustment
|
28
|
24
|
||||||
Accrued
wages and salaries
|
24
|
50
|
||||||
Energy
marketing and risk management liabilities – current
portion
|
18
|
41
|
||||||
Accrued
environmental remediation costs – current portion
|
10
|
13
|
||||||
Other
current liabilities
|
106
|
162
|
||||||
Total
current liabilities
|
1,645
|
1,666
|
||||||
Accumulated deferred income
taxes
|
566
|
505
|
||||||
Long-term liabilities
(excluding long-term debt)
|
||||||||
Accrued
PRP costs
|
190
|
202
|
||||||
Accumulated
removal costs
|
169
|
162
|
||||||
Accrued
environmental remediation costs
|
97
|
83
|
||||||
Accrued
pension obligations
|
43
|
78
|
||||||
Accrued
postretirement benefit costs
|
24
|
32
|
||||||
Other
long-term liabilities
|
152
|
146
|
||||||
Total
long-term liabilities (excluding long-term debt)
|
675
|
703
|
||||||
Commitments and contingencies
(see Note 7)
|
||||||||
Minority
interest
|
47
|
42
|
||||||
Capitalization
|
||||||||
Long-term
debt
|
1,674
|
1,622
|
||||||
Common
shareholders’ equity, $5 par value; 750 million shares authorized; 76.4
million and 77.7 million shares outstanding at December 31, 2007 and
2006
|
1,661
|
1,609
|
||||||
Total
capitalization
|
3,335
|
3,231
|
||||||
Total
liabilities and capitalization
|
$ |
6,268
|
$ |
6,147
|
Years
ended December 31,
|
||||||||||||
In millions, except per share
amounts
|
2007
|
2006
|
2005
|
|||||||||
Operating
revenues
|
$ |
2,494
|
$ |
2,621
|
$ |
2,718
|
||||||
Operating
expenses
|
||||||||||||
Cost
of gas
|
1,369
|
1,482
|
1,626
|
|||||||||
Operation
and maintenance
|
451
|
473
|
477
|
|||||||||
Depreciation
and amortization
|
144
|
138
|
133
|
|||||||||
Taxes
other than income taxes
|
41
|
40
|
40
|
|||||||||
Total
operating expenses
|
2,005
|
2,133
|
2,276
|
|||||||||
Operating
income
|
489
|
488
|
442
|
|||||||||
Other
income (expenses)
|
4
|
(1 | ) | (1 | ) | |||||||
Minority
interest
|
(30 | ) | (23 | ) | (22 | ) | ||||||
Interest
expense
|
(125 | ) | (123 | ) | (109 | ) | ||||||
Earnings
before income taxes
|
338
|
341
|
310
|
|||||||||
Income
taxes
|
127
|
129
|
117
|
|||||||||
Net
income
|
$ |
211
|
$ |
212
|
$ |
193
|
||||||
Per
common share data
|
||||||||||||
Basic
earnings per common share
|
$ |
2.74
|
$ |
2.73
|
$ |
2.50
|
||||||
Diluted
earnings per common share
|
$ |
2.72
|
$ |
2.72
|
$ |
2.48
|
||||||
Cash
dividends declared per common share
|
$ |
1.64
|
$ |
1.48
|
$ |
1.30
|
||||||
Weighted
average number of common shares outstanding
|
||||||||||||
Basic
|
77.1
|
77.6
|
77.3
|
|||||||||
Diluted
|
77.4
|
78.0
|
77.8
|
Other
|
Shares
held
|
|||||||||||||||||||||||||||
Common
stock
|
Premium
on
|
Earnings
|
comprehensive
|
in
treasury
|
||||||||||||||||||||||||
In millions, except per share
amounts
|
Shares
|
Amount
|
common
stock
|
reinvested
|
loss
|
and
trust
|
Total
|
|||||||||||||||||||||
Balance
as of December 31, 2004
|
76.7
|
384
|
632
|
415
|
(46 | ) |
-
|
1,385
|
||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
193
|
-
|
-
|
193
|
|||||||||||||||||||||
OCI
- loss resulting from unfunded pension and postretirement obligation (net
of tax of $3)
|
-
|
-
|
-
|
-
|
(5 | ) |
-
|
(5 | ) | |||||||||||||||||||
Unrealized
loss from hedging activities (net of tax of $1)
|
-
|
-
|
-
|
-
|
(2 | ) |
-
|
(2 | ) | |||||||||||||||||||
Total
comprehensive income
|
186
|
|||||||||||||||||||||||||||
Dividends
on common stock ($1.30 per share)
|
-
|
-
|
-
|
(100 | ) |
-
|
-
|
(100 | ) | |||||||||||||||||||
Issuance
of common shares:
|
||||||||||||||||||||||||||||
Benefit,
stock compensation, dividend reinvestment and stock purchase plans (net of
tax of $9)
|
1.1
|
5
|
23
|
-
|
-
|
-
|
28
|
|||||||||||||||||||||
Balance
as of December 31, 2005
|
77.8
|
389
|
655
|
508
|
(53 | ) |
-
|
1,499
|
||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
212
|
-
|
-
|
212
|
|||||||||||||||||||||
OCI
- gain resulting from unfunded pension and postretirement obligation (net
of tax of $7)
|
-
|
-
|
-
|
-
|
11
|
-
|
11
|
|||||||||||||||||||||
Unrealized
gain from hedging activities (net of tax of $7)
|
-
|
-
|
-
|
-
|
10
|
-
|
10
|
|||||||||||||||||||||
Total
comprehensive income
|
233
|
|||||||||||||||||||||||||||
Dividends
on common stock ($1.48 per share)
|
-
|
-
|
1
|
(115 | ) |
-
|
3
|
(111 | ) | |||||||||||||||||||
Benefit,
stock compensation, dividend reinvestment and stock purchase
plans
|
0.3
|
1
|
2
|
-
|
-
|
-
|
3
|
|||||||||||||||||||||
Issuance
of treasury shares
|
0.6
|
-
|
(3 | ) | (4 | ) |
-
|
21
|
14
|
|||||||||||||||||||
Purchase
of treasury shares
|
(1.0 | ) |
-
|
-
|
-
|
-
|
(38 | ) | (38 | ) | ||||||||||||||||||
Stock-based
compensation expense (net of tax of $5)
|
-
|
-
|
9
|
-
|
-
|
-
|
9
|
|||||||||||||||||||||
Balance
as of December 31, 2006
|
77.7
|
390
|
664
|
601
|
(32 | ) | (14 | ) |
1,609
|
|||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
211
|
-
|
-
|
211
|
|||||||||||||||||||||
OCI
- gain resulting from unfunded pension and postretirement obligation (net
of tax of $16)
|
-
|
-
|
-
|
-
|
24
|
-
|
24
|
|||||||||||||||||||||
Unrealized
gain from hedging activities (net of tax of $3)
|
-
|
-
|
-
|
-
|
(5 | ) |
-
|
(5 | ) | |||||||||||||||||||
Total
comprehensive income
|
230
|
|||||||||||||||||||||||||||
Dividends
on common stock ($1.64 per share)
|
-
|
-
|
-
|
(127 | ) |
-
|
4
|
(123 | ) | |||||||||||||||||||
Issuance
of treasury shares
|
0.7
|
-
|
(6 | ) | (5 | ) |
-
|
27
|
16
|
|||||||||||||||||||
Purchase
of treasury shares
|
(2.0 | ) |
-
|
-
|
-
|
-
|
(80 | ) | (80 | ) | ||||||||||||||||||
Stock-based
compensation expense (net of tax of $3)
|
-
|
-
|
9
|
-
|
-
|
-
|
9
|
|||||||||||||||||||||
Balance
as of December 31, 2007
|
76.4
|
$ |
390
|
$ |
667
|
$ |
680
|
$ | (13 | ) | $ | (63 | ) | $ |
1,661
|
See
Notes to Consolidated Financial
Statements.
|
Years
ended December 31,
|
||||||||||||
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Cash flows from operating
activities
|
||||||||||||
Net
income
|
$ |
211
|
$ |
212
|
$ |
193
|
||||||
Adjustments
to reconcile net income to net cash flow provided by operating
activities
|
||||||||||||
Depreciation
and amortization
|
144
|
138
|
133
|
|||||||||
Change
in energy marketing and risk management assets and
liabilities
|
69
|
(130 | ) |
27
|
||||||||
Minority
interest
|
30
|
23
|
22
|
|||||||||
Deferred
income taxes
|
30
|
133
|
17
|
|||||||||
Changes
in certain assets and liabilities
|
||||||||||||
Inventories
|
46
|
(54 | ) | (211 | ) | |||||||
Gas,
unbilled and other receivables
|
(15 | ) |
170
|
(170 | ) | |||||||
Energy
marketing receivables and energy marketing trade payables,
net
|
(26 | ) | (95 | ) |
93
|
|||||||
Accrued
expenses
|
(34 | ) |
15
|
12
|
||||||||
Trade
payables
|
(41 | ) | (53 | ) |
57
|
|||||||
Other
– net
|
(38 | ) | (5 | ) | (93 | ) | ||||||
Net
cash flow provided by operating activities
|
376
|
354
|
80
|
|||||||||
Cash flows from investing
activities
|
||||||||||||
Expenditures
for property, plant and equipment
|
(259 | ) | (253 | ) | (267 | ) | ||||||
Sale
of Saltville
|
-
|
-
|
66
|
|||||||||
Other
|
6
|
5
|
7
|
|||||||||
Net
cash flow used in investing activities
|
(253 | ) | (248 | ) | (194 | ) | ||||||
Cash flows from financing
activities
|
||||||||||||
Dividends
paid on common shares
|
(123 | ) | (111 | ) | (100 | ) | ||||||
Purchase
of treasury shares
|
(80 | ) | (38 | ) |
-
|
|||||||
Payments
of trust preferred securities
|
(75 | ) | (150 | ) |
-
|
|||||||
Distribution
to minority interest
|
(23 | ) | (22 | ) | (19 | ) | ||||||
Payments
of medium-term notes
|
(11 | ) |
-
|
-
|
||||||||
Issuances
of senior notes
|
125
|
175
|
-
|
|||||||||
Net
payments and borrowings of short-term debt
|
52
|
6
|
188
|
|||||||||
Issuance
of treasury shares
|
16
|
14
|
-
|
|||||||||
Sale
of common stock
|
-
|
3
|
28
|
|||||||||
Other
|
(3 | ) |
5
|
-
|
||||||||
Net
cash flow (used in) provided by financing activities
|
(122 | ) | (118 | ) |
97
|
|||||||
Net
increase (decrease) in cash and cash equivalents
|
1
|
(12 | ) | (17 | ) | |||||||
Cash
and cash equivalents at beginning of period
|
20
|
32
|
49
|
|||||||||
Cash
and cash equivalents at end of period
|
$ |
21
|
$ |
20
|
$ |
32
|
||||||
Cash paid during the period
for
|
||||||||||||
Interest
|
$ |
127
|
$ |
109
|
$ |
115
|
||||||
Income
taxes
|
118
|
37
|
89
|
In
millions
|
2007
|
2006
|
||||||
Transmission
and distribution
|
$ |
4,193
|
$ |
4,047
|
||||
Storage
|
285
|
267
|
||||||
Other
|
509
|
454
|
||||||
Construction
work in progress
|
190
|
208
|
||||||
Total
gross PP&E
|
5,177
|
4,976
|
||||||
Accumulated
depreciation
|
(1,611 | ) | (1,540 | ) | ||||
Total
net PP&E
|
$ |
3,566
|
$ |
3,436
|
·
|
material
and labor
|
·
|
contractor
costs
|
·
|
construction
overhead costs
|
·
|
an
allowance for funds used during construction (AFUDC) which represents the
estimated cost of funds used to finance the construction of major projects
and is capitalized in rate base for ratemaking purposes when the completed
projects are placed in service
|
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Cash
flow hedges:
|
||||||||||||
Net
derivative unrealized gains arising during the period (net of $7 and $3 in
taxes)
|
$ |
-
|
$ |
11
|
$ |
5
|
||||||
Less
reclassification of realized gains included in income (net of $3, $1 and $4 in
taxes)
|
(5 | ) | (1 | ) | (7 | ) | ||||||
Over
funded (unfunded) pension obligation (net of $16, $7 and $3 in
taxes)
|
24
|
11
|
(5 | ) | ||||||||
Total
|
$ |
19
|
$ |
21
|
$ | (7 | ) |
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Denominator
for basic earnings per share (1)
|
77.1
|
77.6
|
77.3
|
|||||||||
Assumed
exercise of potential common shares
|
0.3
|
0.4
|
0.5
|
|||||||||
Denominator
for diluted earnings per share
|
77.4
|
78.0
|
77.8
|
(1)
|
Daily
weighted average shares
outstanding.
|
December
31,
|
||||||||
In
millions
|
2007
|
2006
|
||||||
Regulatory
assets
|
||||||||
Unrecovered
PRP costs
|
$ |
285
|
$ |
274
|
||||
Unrecovered
ERC (1)
|
158
|
170
|
||||||
Elizabethtown
Gas hedging program
|
-
|
16
|
||||||
Unrecovered
postretirement benefit costs
|
12
|
13
|
||||||
Unrecovered
seasonal rates
|
11
|
11
|
||||||
Unrecovered
PGA
|
23
|
14
|
||||||
Other
|
23
|
20
|
||||||
Total
regulatory assets
|
512
|
518
|
||||||
Associated
assets
|
||||||||
Elizabethtown
Gas hedging program
|
4
|
-
|
||||||
Total regulatory and associated
assets
|
$ |
516
|
$ |
518
|
||||
Regulatory
liabilities
|
||||||||
Accumulated
removal costs
|
$ |
169
|
$ |
162
|
||||
Elizabethtown
Gas hedging program
|
4
|
-
|
||||||
Unamortized
investment tax credit
|
16
|
18
|
||||||
Deferred
PGA
|
28
|
24
|
||||||
Regulatory
tax liability
|
20
|
22
|
||||||
Other
|
19
|
18
|
||||||
Total regulatory
liabilities
|
256
|
244
|
||||||
Associated
liabilities
|
||||||||
PRP
costs
|
245
|
237
|
||||||
ERC
(1)
|
96
|
87
|
||||||
Elizabethtown
Gas hedging program
|
-
|
16
|
||||||
Total
associated liabilities
|
341
|
340
|
||||||
Total regulatory and associated
liabilities
|
$ |
597
|
$ |
584
|
(1)
|
For
a discussion of ERC, see Note
7.
|
·
|
the
costs incurred to date that have not yet been recovered through the rate
rider
|
·
|
the
future expected costs to be recovered through the rate
rider
|
·
|
$27
million in 2007
|
·
|
$27
million in 2006
|
·
|
$26
million in 2005
|
In
millions
|
Carrying amount
(1)
|
Estimated
fair value
|
||||||
As
of December 31, 2007
|
$ |
1,674
|
$ |
1,710
|
||||
As
of December 31, 2006
|
1,633
|
1,716
|
(1)
|
Includes
$11 million of medium-term notes reported as short-term
debt
in our December 31, 2006, consolidated balance
sheets.
|
·
|
forward
contracts
|
·
|
futures
contracts
|
·
|
options
contracts
|
·
|
financial
swaps
|
·
|
treasury
locks
|
·
|
weather
derivative contracts
|
·
|
storage
and transportation capacity
transactions
|
·
|
foreign
currency forward contracts
|
AGL
Retirement Plan
|
NUI
Retirement Plan
|
|||||||||||||||
In
millions
|
Dec.
31, 2007
|
Dec.
31, 2006
|
Dec.
31, 2007
|
Dec.
31, 2006
|
||||||||||||
Change in benefit
obligation
|
||||||||||||||||
Benefit
obligation at beginning of year
|
$ |
368
|
$ |
359
|
$ |
86
|
$ |
105
|
||||||||
Service
cost
|
7
|
7
|
-
|
-
|
||||||||||||
Interest
cost
|
21
|
20
|
5
|
5
|
||||||||||||
Settlement
loss
|
-
|
-
|
-
|
1
|
||||||||||||
Settlement
payments
|
-
|
-
|
-
|
(12 | ) | |||||||||||
Actuarial
loss (gain)
|
(23 | ) |
2
|
(9 | ) | (7 | ) | |||||||||
Benefits
paid
|
(20 | ) | (20 | ) | (8 | ) | (6 | ) | ||||||||
Benefit
obligation at end of year
|
$ |
353
|
$ |
368
|
$ |
74
|
$ |
86
|
||||||||
Change in plan
assets
|
||||||||||||||||
Fair
value of plan assets at beginning of year
|
$ |
303
|
$ |
286
|
$ |
72
|
$ |
85
|
||||||||
Actual
return on plan assets
|
30
|
31
|
6
|
4
|
||||||||||||
Employer
contribution
|
-
|
6
|
-
|
1
|
||||||||||||
Settlement
payments
|
-
|
-
|
-
|
(12 | ) | |||||||||||
Benefits
paid
|
(20 | ) | (20 | ) | (8 | ) | (6 | ) | ||||||||
Fair
value of plan assets at end of year
|
$ |
313
|
$ |
303
|
$ |
70
|
$ |
72
|
||||||||
Amounts recognized in the
statement of financial position consist of
|
||||||||||||||||
Prepaid
benefit cost
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
||||||||
Accrued
benefit liability
|
(40 | ) | (65 | ) | (4 | ) | (14 | ) | ||||||||
Accumulated
OCI
|
-
|
-
|
-
|
-
|
||||||||||||
Net
amount recognized at year end (1)
|
$ | (40 | ) | $ | (65 | ) | $ | (4 | ) | $ | (14 | ) | ||||
(1)
As of December 31, 2007, the AGL Retirement Plan had current liabilities
of $1 million, noncurrent liabilities of $39 million and no noncurrent
assets. The NUI Retirement Plan had $4 million of noncurrent liabilities
and no noncurrent assets or current liabilities. As of December 31, 2006,
the AGL Retirement Plan had current liabilities of $1 million, non-current
liabilities of $64 million and no non-current assets. The NUI Retirement
Plan had $14 million of non-current liabilities and non-current assets or
current liabilities as of December 31, 2006.
|
AGL
Retirement Plan
|
NUI
Retirement Plan
|
|||||||||||||||
In
millions
|
Dec.
31, 2007
|
Dec.
31, 2006
|
Dec.
31, 2007
|
Dec.
31, 2006
|
||||||||||||
Projected
benefit obligation
|
$ |
353
|
$ |
368
|
$ |
74
|
$ |
86
|
||||||||
ABO
|
337
|
352
|
74
|
86
|
||||||||||||
Fair
value of plan assets
|
313
|
303
|
70
|
72
|
||||||||||||
Increase
in minimum liability included in OCI
|
n/a
|
13
|
n/a
|
-
|
Components of net periodic
benefit cost
|
||||||||||||||||
Service
cost
|
$ |
7
|
$ |
7
|
$ |
-
|
$ |
-
|
||||||||
Interest
cost
|
21
|
20
|
5
|
5
|
||||||||||||
Expected
return on plan assets
|
(25 | ) | (24 | ) | (6 | ) | (7 | ) | ||||||||
Net
amortization
|
(1 | ) | (1 | ) | (1 | ) | (1 | ) | ||||||||
Recognized
actuarial loss
|
7
|
9
|
-
|
-
|
||||||||||||
Net
annual pension cost
|
$ |
9
|
$ |
11
|
$ | (2 | ) | $ | (3 | ) |
Retirement
Plan
|
||||||||
In
millions
|
AGL
|
NUI
|
||||||
Amortization
of transition obligation
|
$ |
-
|
$ |
-
|
||||
Amortization
of prior service cost
|
(1 | ) | (1 | ) | ||||
Amortization
of net loss
|
3
|
-
|
||||||
Refunds
expected
|
-
|
-
|
AGL
and NUI Retirement Plans
|
||||||||
2007
|
2006
|
|||||||
Discount
rate
|
6.4 | % | 5.8 | % | ||||
Rate
of compensation increase
|
3.7 | % | 4.0 | % |
AGL
Retirement Plan
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Discount
rate
|
5.8 | % | 5.5 | % | 5.8 | % | ||||||
Expected return on
plan assets
|
9.0 | % | 8.8 | % | 8.8 | % | ||||||
Rate of
compensation increase
|
3.7 | % | 4.0 | % | 4.0 | % |
NUI
Retirement Plan
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Discount
rate
|
5.8 | % | 5.5 | % | 5.8 | % | ||||||
Expected return on
plan assets
|
9.0 | % | 8.8 | % | 8.5 | % | ||||||
Rate of
compensation increase
|
- | % | - | % | 4.0 | % |
Target
Range Asset
|
AGL
Retirement Plan
|
||||||||||||
Allocation
|
2007
|
2006 | |||||||||||
Equity
|
30%-80 | % | 68 | % | 67 | % | |||||||
Fixed
income
|
10%-40 | % | 25 | % | 25 | % | |||||||
Real
estate and other
|
10%-35 | % | 3 | % | 8 | % | |||||||
Cash
|
0%-10 | % | 4 | % |
-
|
Target
Range Asset
|
NUI
Retirement Plan
|
|||||||||||
Allocation
|
2007
|
2006
|
||||||||||
Equity
|
30%-80 | % | 71 | % | 68 | % | ||||||
Fixed
income
|
10%-40 | % | 27 | % | 26 | % | ||||||
Real
estate and other
|
10%-35 | % | 2 | % | 3 | % | ||||||
Cash
|
0%-10 | % | - | % | 3 | % |
AGL
Postretirement Plan
|
||||||||
In
millions
|
Dec.
31, 2007
|
Dec.
31, 2006
|
||||||
Change in benefit
obligation
|
||||||||
Benefit
obligation at beginning of year
|
$ |
95
|
$ |
107
|
||||
Service
cost
|
1
|
1
|
||||||
Interest
cost
|
6
|
5
|
||||||
Actuarial
(gain) loss
|
-
|
(9 | ) | |||||
Benefits
paid
|
(8 | ) | (9 | ) | ||||
Benefit
obligation at end of year
|
$ |
94
|
$ |
95
|
||||
Change in plan
assets
|
||||||||
Fair
value of plan assets at beginning of year
|
$ |
63
|
$ |
59
|
||||
Actual
return on plan assets
|
7
|
5
|
||||||
Employer
contribution
|
8
|
8
|
||||||
Benefits
paid
|
(8 | ) | (9 | ) | ||||
Fair
value of plan assets at end of year
|
$ |
70
|
$ |
63
|
||||
Amounts recognized in the
statement of financial position consist of
|
||||||||
Prepaid
benefit cost
|
$ |
-
|
$ |
-
|
||||
Accrued
benefit liability
|
(24 | ) | (32 | ) | ||||
Accumulated
OCI
|
-
|
-
|
||||||
Net
amount recognized at year end (1)
|
$ | (24 | ) | $ | (32 | ) | ||
(1)
|
As
of December 31, 2007 and 2006, the AGL Postretirement Plan had $24 million
and
$32
million of noncurrent liabilities, respectively, and no noncurrent assets
or current liabilities.
|
In
millions
|
2007
|
2006
|
||||||
Service
cost
|
$ |
1
|
$ |
1
|
||||
Interest
cost
|
6
|
5
|
||||||
Expected
return on plan assets
|
(5 | ) | (4 | ) | ||||
Amortization
of prior service cost
|
(4 | ) | (4 | ) | ||||
Recognized
actuarial loss
|
1
|
1
|
||||||
Net
periodic postretirement benefit cost
|
$ | (1 | ) | $ | (1 | ) |
In
millions
|
2008
|
|||
Amortization
of transition obligation
|
$ |
-
|
||
Amortization
of prior service cost
|
(4 | ) | ||
Amortization
of net loss
|
-
|
|||
Refunds
expected
|
-
|
2007
|
2006 (1)
|
|||||||
Discount
rate
|
6.4 | % | 5.8 | % | ||||
Rate
of compensation increase
|
3.7 | % | 4.0 | % |
AGL
Postretirement Plan
|
NUI
Postretirement
Plan
|
|||||||||||||||
2007
|
2006
|
2005
|
2005
(1)
|
|||||||||||||
Discount
rate – benefit obligation
|
6.4 | % | 5.8 | % | 5.5 | % | 5.5 | % | ||||||||
Discount
rate – net periodic benefit cost
|
5.8 | % | 5.5 | % | 5.8 | % | 5.8 | % | ||||||||
Expected
return on plan assets
|
9.0 | % | 8.5 | % | 8.8 | % | 3.0 | % | ||||||||
Rate
of compensation increase
|
3.7 | % | 4.0 | % | 4.0 | % |
-
|
(1)
|
The
NUI postretirement plan was terminated and eligible former participants
became eligible to participate in the AGL postretirement plan on January
1, 2006.
|
AGL
Postretirement Plan
|
||||||||||||||||
Pre-medicare
cost (pre-65 years old)
|
Post-medicare
cost (post-65 years old)
|
|||||||||||||||
Assumed
health care cost trend rates at December 31,
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Health
care costs trend rate assumed for next year
|
2.5 | % | 2.5 | % | 2.5 | % | 2.5 | % | ||||||||
Rate
to which the cost trend rate gradually declines
|
2.5 | % | 2.5 | % | 2.5 | % | 2.5 | % | ||||||||
Year
that the rate reaches the ultimate trend rate
|
N/A
|
N/A
|
N/A
|
N/A
|
AGL
Postretirement Plan
|
||||||||
One-Percentage-Point
|
||||||||
In
millions
|
Increase
|
Decrease
|
||||||
Effect
on total of service and interest cost
|
$ |
-
|
$ |
-
|
||||
Effect
on accumulated postretirement benefit obligation
|
4
|
(4 | ) |
In
millions
|
Target
Asset allocation ranges
|
2007
|
2006
|
|||||||||
Equity
|
30%-80 | % | 73 | % | 66 | % | ||||||
Fixed
income
|
10%-40 | % | 26 | % | 32 | % | ||||||
Real
estate and other
|
10%-35 | % | - | % | - | % | ||||||
Cash
|
0%-10 | % | 1 | % | 2 | % |
For
the years ended Dec. 31, (in
millions)
|
AGL
Retirement Plan
|
NUI Retirement
Plan
|
AGL
Postretirement Plan
|
|||||||||
2008
|
$ |
20
|
$ |
6
|
$ |
7
|
||||||
2009
|
20
|
6
|
7
|
|||||||||
2010
|
20
|
6
|
7
|
|||||||||
2011
|
20
|
6
|
7
|
|||||||||
2012
|
21
|
6
|
7
|
|||||||||
2013-2017
|
116
|
29
|
36
|
In
millions
|
AGL
Retirement Plan
|
NUI Retirement
Plan
|
AGL
Postretirement Plan
|
|||||||||
Transition
obligation
|
$ |
-
|
$ |
-
|
$ |
1
|
||||||
Prior
service credit
|
(8 | ) | (13 | ) | (21 | ) | ||||||
Net
loss (gain)
|
70
|
(7 | ) |
13
|
||||||||
Accumulated
OCI
|
62
|
(20 | ) | (7 | ) | |||||||
Net
amount recognized in statement of financial position.
|
(40 | ) | (4 | ) | (24 | ) | ||||||
Cumulative
employer contributions in excess of net periodic benefit cost (accrued)
prepaid
|
$ |
22
|
$ | (24 | ) | $ | (31 | ) |
·
|
$6
million in 2007
|
·
|
$6
million in 2006
|
·
|
$5
million in 2005
|
Shares
issuable upon exercise of outstanding stock options and / or SARs
(1)
|
Shares
issuable and / or SARs available for issuance (1)
|
Details
|
|||||||
2007
Omnibus Performance Incentive Plan
|
44,500
|
4,806,086
|
Grants
of incentive and nonqualified stock options, stock appreciation rights
(SARs), shares of restricted stock, restricted stock units and performance
cash awards to key employees.
|
||||||
Long-Term Incentive Plan
(1999) (2)
|
2,249,812
|
-
|
Grants
of incentive and nonqualified stock options, shares of restricted stock
and performance units to key employees.
|
||||||
Long-Term
Stock Incentive Plan of 1990 (3)
|
91,061
|
-
|
Grants
of incentive and nonqualified stock options, SARs and shares of restricted
stock to key employees.
|
||||||
Officer
Incentive Plan
|
87,064
|
215,702
|
Grants
of nonqualified stock options and shares of restricted stock to new-hire
officers.
|
||||||
2006
Non-Employee Directors Equity Compensation Plan
|
not applicable
|
189,107
|
Grants
of stock to non-employee directors in connection with non-employee
director compensation (for annual retainer, chair retainer and for initial
election or appointment).
|
||||||
1996
Non-Employee Directors Equity Compensation Plan
|
45,061
|
14,180
|
Grants
of nonqualified stock options and stock to non-employee directors in
connection with non-employee director compensation (for annual retainer
and for initial election or appointment). The plan was amended in 2002 to
eliminate the granting of stock options.
|
||||||
Employee
Stock Purchase Plan
|
not applicable
|
388,159
|
Nonqualified,
broad-based employee stock purchase plan for eligible
employees
|
||||||
Stand-alone
SARs
|
2,761
|
-
|
Represents
SARs that have been granted to key employees under individual agreements
and are settled in cash.
|
(1)
|
As
of December 31, 2007
|
(2)
|
Following
shareholder approval of the Omnibus Performance Incentive Plan, no further
grants will be made except for reload options that may be granted under
the plan’s outstanding options.
|
(3)
|
Following
shareholder approval of the Long-Term Incentive Plan (1999), no further
grants will be made except for reload options that may be granted under
the plan’s outstanding options.
|
·
|
stock
options
|
·
|
stock
awards, and
|
·
|
performance
units (restricted stock units and performance cash
units)
|
·
|
awards
granted on or after January 1, 2006
and
|
·
|
unvested
awards previously granted and outstanding as of January 1,
2006
|
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Compensation
costs
|
$ |
9
|
$ |
9
|
$ |
5
|
||||||
Income
tax benefits
|
3
|
3
|
8
|
In millions, except per share
amounts
|
2005
|
||||
Net
income, as reported
|
$ |
193
|
|||
Deduct:
Total stock-based employee compensation expense determined under fair
value-based method for all awards, net of related tax
effect
|
1
|
||||
Pro-forma
net income
|
$ |
192
|
|||
Earnings
per share:
|
|||||
Basic
– as reported
|
$ |
2.50
|
|||
Basic
– pro-forma
|
$ |
2.48
|
|||
Diluted
– as reported
|
$ |
2.48
|
|||
Diluted
– pro-forma
|
$ |
2.47
|
Stock
Options
|
|||||||||||||
Number
of options
|
Weighted
average exercise price
|
Weighted
average remaining life (in years)
|
Aggregate
intrinsic value (in millions)
|
||||||||||
Outstanding
– December 31, 2004
|
2,174,072
|
$ |
23.23
|
||||||||||
Granted
|
1,014,121
|
33.80
|
|||||||||||
Exercised
|
(846,465 | ) |
22.60
|
||||||||||
Forfeited
|
(120,483 | ) |
32.38
|
||||||||||
Outstanding
– December 31, 2005
|
2,221,245
|
$ |
27.79
|
||||||||||
Granted
|
914,216
|
35.81
|
|||||||||||
Exercised
|
(543,557 | ) |
24.69
|
||||||||||
Forfeited
|
(266,418 | ) |
34.93
|
||||||||||
Outstanding
– December 31, 2006
|
2,325,486
|
$ |
30.85
|
7.2
|
|||||||||
Granted
|
735,196
|
39.11
|
9.1
|
||||||||||
Exercised
|
(361,385 | ) |
27.78
|
5.1
|
|||||||||
Forfeited
|
(181,799 | ) |
36.75
|
8.3
|
|||||||||
Outstanding
– December 31, 2007
|
2,517,498
|
$ |
33.28
|
7.1
|
$12
|
||||||||
Exercisable
– December 31, 2007
|
1,102,536
|
$ |
28.48
|
5.4
|
$10
|
Unvested Stock
Options
|
|||||||||||||
Number
of unvested options
|
Weighted
average exercise price
|
Weighted
average remaining vesting period
(in
years)
|
Weighted
average fair value
|
||||||||||
Outstanding
– December 31, 2006
|
1,311,814
|
$ |
35.03
|
1.8
|
$ |
4.75
|
|||||||
Granted
|
735,196
|
39.11
|
2.1
|
4.90
|
|||||||||
Forfeited
|
(181,799 | ) |
36.75
|
1.3
|
4.88
|
||||||||
Vested
|
(450,249 | ) |
34.73
|
-
|
4.73
|
||||||||
Outstanding
– December 31, 2007
|
1,414,962
|
$ |
37.02
|
1.6
|
$ |
4.82
|
Options
outstanding
|
Options
Exercisable
|
||||||||||||||||||
Range
of Exercise Prices
|
Number
of options
|
Weighted
average remaining contractual life (in years)
|
Weighted
average exercise price
|
Number
of options
|
Weighted
average exercise price
|
||||||||||||||
$16.25
to $20.85
|
|
84,399
|
1.5
|
$
|
19.98
|
|
84,399
|
$
|
19.98
|
||||||||||
$20.86
to $25.45
|
|
275,719
|
|
3.4
|
|
21.65
|
|
275,719
|
|
21.65
|
|||||||||
$25.46
to $30.05
|
|
251,357
|
|
5.4
|
|
27.06
|
|
251,357
|
|
27.06
|
|||||||||
$30.06
to $34.65
|
|
441,047
|
|
7.0
|
|
33.20
|
|
270,609
|
|
33.17
|
|||||||||
$34.66
to $39.25
|
|
1,408,591
|
|
8.5
|
|
37.17
|
|
212,367
|
|
35.93
|
|||||||||
$39.26
to $43.85
|
|
56,385
|
|
8.6
|
|
41.29
|
|
8,085
|
|
41.14
|
|||||||||
Outstanding
- Dec. 31, 2007
|
|
2,517,498
|
|
7.1
|
$
|
33.28
|
|
1,102,536
|
$
|
28.48
|
Exercisable
at:
|
Number
of options
|
Weighted
average exercise price
|
||||
December
31, 2005
|
1,275,689
|
$ |
23.46
|
|||
December
31, 2006
|
1,013,672
|
$ |
25.45
|
|||
December
31, 2007
|
1,102,536
|
$ |
28.48
|
2007
|
2006
|
2005
|
||||||||||
Expected
life (years)
|
7
|
7
|
7
|
|||||||||
Risk-free
interest rate % (1)
|
3.87
– 5.05
|
4.5
– 5.1
|
3.9
– 4.5
|
|||||||||
Expected
volatility % (2)
|
13.2
– 14.3
|
14.2
– 15.9
|
17.1
– 17.3
|
|||||||||
Dividend
yield % (3)
|
3.8
– 4.2
|
3.7
– 4.2
|
3.2
– 3.8
|
|||||||||
Fair
value of options granted (4)
|
$ |
3.55
– $5.98
|
$ |
4.55–
$6.18
|
$ |
4.57
– $6.01
|
Dollars in
millions
|
Units
|
Measurement
period
end date
|
Accrued
at Dec. 31, 2007
|
Maximum
aggregate payout
|
||||||||
Year
of grant
|
||||||||||||
2005 (1)
|
23
|
Dec.
31, 2007
|
$ |
2
|
$ |
3
|
||||||
2006
|
15
|
Dec.
31, 2008
|
1
|
2
|
||||||||
2007
|
23
|
Dec.
31, 2009
|
-
|
3
|
(1)
|
In
February 2008, the 2005 performance cash units vested and resulted in an
aggregate payout of $2 million.
|
Restricted
Stock Awards
|
Shares
of restricted stock
|
Weighted
average fair value
|
||||||
Issued
|
10,893
|
43.85
|
||||||
Forfeited
|
-
|
-
|
||||||
Vested
|
10,893
|
43.85
|
||||||
Outstanding
|
-
|
-
|
Restricted
Stock Awards
|
Shares
of restricted stock
|
Weighted
average remaining vesting period (in years)
|
Weighted
average fair value
|
|||||||||
Outstanding – December 31,
2006 (1)
|
232,431
|
2.4
|
$ |
35.49
|
||||||||
Issued
|
224,649
|
2.4
|
39.72
|
|||||||||
Forfeited
|
(51,583 | ) |
1.3
|
36.55
|
||||||||
Vested
|
(56,461 | ) |
-
|
34.93
|
||||||||
Outstanding – December 31, 2007
(1)
|
349,036
|
2.1
|
$ |
38.15
|
(1)
|
Subject
to restriction
|
2007
|
2006
|
2005
|
||||||||||
Shares
purchased on the open market
|
52,299
|
45,361
|
40,927
|
|||||||||
Average
per-share purchase price
|
$ |
34.69
|
$ |
31.40
|
$ |
30.52
|
||||||
Purchase
price discount
|
$ |
313,584
|
$ |
252,752
|
$ |
220,847
|
·
|
our
ability to satisfy our obligations under certain financing agreements,
including debt-to-capitalization and total shareholders’ equity
covenants
|
·
|
our
ability to satisfy our obligations to any preferred
shareholders
|
Weighted
average
|
Outstanding
as of December 31,
|
|||||||||||||||||||
In
millions
|
Year(s)
due
|
Interest
rate (1)
|
interest
rate (1)
|
2007
|
2006
|
|||||||||||||||
Short-term
debt
|
||||||||||||||||||||
Commercial
paper
|
2008
|
5.6 | % | 5.4 | % | $ |
566
|
$ |
508
|
|||||||||||
Pivotal
Utility line of credit
|
2008
|
4.5
|
5.4
|
12
|
17
|
|||||||||||||||
Sequent
line of credit
|
2008
|
4.5
|
5.4
|
1
|
2
|
|||||||||||||||
Capital
leases
|
2008
|
4.9
|
4.9
|
1
|
1
|
|||||||||||||||
Current
portion of long-term debt
|
2008
|
-
|
-
|
-
|
11
|
|||||||||||||||
Total short-term
debt
|
5.6 | % | 5.4 | % | $ |
580
|
$ |
539
|
||||||||||||
Long-term debt - net of current
portion
|
||||||||||||||||||||
Senior
notes
|
2011-2034
|
4.5–7.1 | % | 5.8 | % | $ |
1,275
|
$ |
1,150
|
|||||||||||
Gas
facility revenue bonds
|
2022-2033
|
3.8
– 5.3
|
4.3
|
199
|
199
|
|||||||||||||||
Medium-term
notes
|
2012-2027
|
6.6
– 9.1
|
7.8
|
196
|
196
|
|||||||||||||||
Capital
leases
|
2013
|
4.9
|
4.9
|
6
|
6
|
|||||||||||||||
Notes
payable to Trusts
|
-
|
-
|
-
|
-
|
77
|
|||||||||||||||
AGL
Capital interest rate swaps
|
2011
|
8.8
|
8.8
|
(2 | ) | (6 | ) | |||||||||||||
Total long-term
debt
|
6.0 | % | 6.1 | % | $ |
1,674
|
$ |
1,622
|
||||||||||||
Total
debt
|
5.9 | % | 5.9 | % | $ |
2,254
|
$ |
2,161
|
(1)
|
As
of December 31, 2007.
|
Year
|
Amount
(in
millions)
|
|||
2011
|
$ | 300 | (1) | |
2012
|
15
|
|||
2013
|
230
|
|||
2015
|
200
|
|||
2016
|
300
|
|||
2017
|
22
|
|||
2021
|
30
|
|||
2022
|
93
|
|||
2024
|
20
|
|||
2026
|
69
|
|||
2027
|
54
|
|||
2032
|
55
|
|||
2033
|
40
|
|||
2034
|
250
|
|||
Total
|
$ | 1,678 | (2) |
(1)
|
Excludes
the fair value of $2 million related to our interest rate
swaps.
|
(2)
|
Excludes
$2 million of unamortized issuance costs related to our gas facility
revenue bonds.
|
Issue
Date
|
Amount
(in
millions)
|
Interest
rate
|
Maturity
|
|||||
June
1992
|
$ |
5
|
8.4 | % |
June
2012
|
|||
June
1992
|
5
|
8.3
|
June
2012
|
|||||
June
1992
|
5
|
8.3
|
July
2012
|
|||||
July
1997
|
22
|
7.2
|
July
2017
|
|||||
Feb.
1991
|
30
|
9.1
|
Feb.
2021
|
|||||
April
1992
|
5
|
8.55
|
April
2022
|
|||||
April
1992
|
25
|
8.7
|
April
2022
|
|||||
April
1992
|
6
|
8.55
|
April
2022
|
|||||
May
1992
|
10
|
8.55
|
May
2022
|
|||||
Nov.
1996
|
30
|
6.55
|
Nov.
2026
|
|||||
July
1997
|
53
|
7.3
|
July
2027
|
|||||
Total
|
$ |
196
|
Issue
date
|
Amount (in
millions)
|
Interest
rate
|
Maturity
|
|||||
Feb. 2001
(1)
|
$ |
300
|
7.125 | % |
Jan
2011
|
|||
July
2003
|
225
|
4.45
|
Apr
2013
|
|||||
Dec.
2004
|
200
|
4.95
|
Jan
2015
|
|||||
June
2006
|
175
|
6.375
|
Jul
2016
|
|||||
Dec.
2007
|
125
|
6.375
|
Jul
2016
|
|||||
Sep.
2004
|
250
|
6.0
|
Oct
2034
|
|||||
Total
|
$ |
1,275
|
(1)
|
$100
million has been converted to a variable-rate obligation
through
an interest rate swap we entered into in March 2003.
We
pay a variable rate determined with a six-month LIBOR plus 3.4%,
which
was 8.8% at December 31, 2007 and 9.0% at December 31, 2006.
The
interest rate swap expires in January
2011.
|
Issue
Date
|
Amount
(in
millions)
|
Interest
rate
|
Maturity
|
|||||
July 1994
(1)
|
$ |
47
|
3.8 | % |
Oct.
2022
|
|||
July 1994
(1)
|
20
|
4.9
|
Oct.
2024
|
|||||
June 1992
(1)
|
39
|
3.8
|
June
2026
|
|||||
June 1992
(1)
|
55
|
4.7
|
June
2032
|
|||||
July
1997
|
40
|
5.25
|
Nov.
2033
|
|||||
Unamortized
issuance costs
|
(2 | ) | ||||||
Total
|
$ |
199
|
(1)
|
Interest
rate is adjusted every 35 days. Rates indicated are as of December 31,
2007.
|
·
|
a
maximum leverage ratio
|
·
|
insolvency
events and nonpayment of scheduled principal or interest
payments
|
·
|
acceleration
of other financial obligations
|
·
|
change
of control provisions
|
2009 & | 2011 & | 2013 & | ||||||||||||||||||
In
millions
|
Total
|
2008
|
2010
|
2012
|
thereafter
|
|||||||||||||||
Recorded contractual
obligations:
|
||||||||||||||||||||
Long-term
debt
|
$ |
1,674
|
$ |
-
|
$ |
2
|
$ |
315
|
$ |
1,357
|
||||||||||
Short-term
debt
|
580
|
580
|
-
|
-
|
-
|
|||||||||||||||
ERC (1)
|
107
|
10
|
34
|
53
|
10
|
|||||||||||||||
PRP costs
(1)
|
245
|
55
|
112
|
60
|
18
|
|||||||||||||||
Total
|
$ |
2,606
|
$ |
645
|
$ |
148
|
$ |
428
|
$ |
1,385
|
(1)
|
Includes charges
recoverable through rate rider
mechanisms
|
2009
&
|
2011
&
|
2013
&
|
||||||||||||||||||
In
millions
|
Total
|
2008
|
2010
|
2012
|
thereafter
|
|||||||||||||||
Unrecorded contractual
obligations and commitments (1):
|
||||||||||||||||||||
Interest
charges
(2)
|
$ |
1,176
|
$ |
100
|
$ |
200
|
$ |
157
|
$ |
719
|
||||||||||
Pipeline charges, storage
capacity and gas supply (3)
|
1,792
|
456
|
637
|
348
|
351
|
|||||||||||||||
Operating leases
(4)
|
154
|
26
|
50
|
34
|
44
|
|||||||||||||||
Standby
letters of credit, performance/surety
bonds
|
30
|
24
|
6
|
-
|
-
|
|||||||||||||||
Asset
management agreements (5)
|
24
|
8
|
8
|
8
|
-
|
|||||||||||||||
Total
|
$ |
3,176
|
$ |
614
|
$ |
901
|
$ |
547
|
$ |
1,114
|
(1)
|
In
accordance with generally accepted accounting principles, these items are
not reflected in our consolidated balance
sheet
|
(2)
|
Floating
rate debt is based on the interest rate as of December 31, 2007 and the
maturity of the underlying debt instrument. As of December 31, 2007, we
have $39 million of accrued interest on our consolidated balance sheet
that will be paid in 2008.
|
(3)
|
Charges
recoverable through a PGA mechanism or alternatively billed to Marketers.
Also includes demand charges associated with Sequent. SouthStar also
includes gas commodity purchase commitments of 1.3 Bcf at floating gas
prices calculated using forward natural gas prices as of December 31,
2007, and valued at $98
million.
|
(4)
|
We
have certain operating leases with provisions for step rent or escalation
payments and certain lease concessions. We account for these leases by
recognizing the future minimum lease payments on a straight-line basis
over the respective minimum lease terms, in accordance with SFAS 13.
However, this lease accounting treatment does not affect the future annual
operating lease cash obligations as shown
herein.
|
(5) | Represent fixed-fee payments for Sequent's asset management agreements between Atlanta Gas Light ($4 million) and Elizabethtown Gas ($4 million). As of December 31, 2007, we have $1 million of accrued payments on our consolidated balance sheet, which will be paid in 2008. |
·
|
$26
million in 2007
|
·
|
$29
million in 2006
|
·
|
$28
million in 2005
|
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Current
income taxes
|
||||||||||||
Federal
|
$ |
86
|
$ | (4 | ) | $ |
84
|
|||||
State
|
12
|
2
|
18
|
|||||||||
Deferred
income taxes
|
||||||||||||
Federal
|
23
|
115
|
17
|
|||||||||
State
|
7
|
18
|
-
|
|||||||||
Amortization
of investment tax credits
|
(1 | ) | (2 | ) | (2 | ) | ||||||
Total
|
$ |
127
|
$ |
129
|
$ |
117
|
2007
|
2006
|
2005
|
||||||||||||||||||||||
In
millions
|
Amount
|
%
of pretax income
|
Amount
|
%
of pretax income
|
Amount
|
%
of pretax income
|
||||||||||||||||||
Computed
tax expense at statutory rate
|
$ |
118
|
35.0 | % | $ |
119
|
35.0 | % | $ |
109
|
35.0 | % | ||||||||||||
State
income tax, net of federal income tax benefit
|
13
|
3.8
|
12
|
3.6
|
11
|
3.7
|
||||||||||||||||||
Amortization
of investment tax credits
|
(1 | ) | (0.3 | ) | (2 | ) | (0.5 | ) | (2 | ) | (0.6 | ) | ||||||||||||
Affordable
housing credits
|
(1 | ) | (0.3 | ) |
-
|
-
|
-
|
-
|
||||||||||||||||
Flexible
dividend deduction
|
(2 | ) | (0.6 | ) | (2 | ) | (0.5 | ) | (2 | ) | (0.6 | ) | ||||||||||||
Other
– net
|
-
|
-
|
2
|
0.2
|
1
|
0.2
|
||||||||||||||||||
Total
income tax expense at effective rate
|
$ |
127
|
37.6 | % | $ |
129
|
37.8 | % | $ |
117
|
37.7 | % |
As
of
December
31,
|
||||||||
In
millions
|
2007
|
2006
|
||||||
Accumulated deferred income tax
liabilities
|
||||||||
Property
– accelerated depreciation and other property-related
items
|
$ |
568
|
$ |
520
|
||||
Mark
to market
|
4
|
7
|
||||||
Other
|
44
|
22
|
||||||
Total accumulated deferred income tax liabilities
|
616
|
549
|
||||||
Accumulated deferred income tax
assets
|
||||||||
Deferred
investment tax credits
|
6
|
7
|
||||||
Unfunded
pension and postretirement benefit obligation
|
35
|
35
|
||||||
Net
operating loss – NUI (1)
|
5
|
5
|
||||||
Other
|
7
|
-
|
||||||
Total accumulated deferred income tax assets
|
53
|
47
|
||||||
Valuation
allowances (2)
|
(3 | ) | (3 | ) | ||||
Total
accumulated deferred income tax assets, net of valuation
allowance
|
50
|
44
|
||||||
Net
accumulated deferred tax liability
|
$ |
566
|
$ |
505
|
(1)
|
Expire
in 2021.
|
(2)
|
Valuation
allowance is due to the net operating losses on NUI headquarters that are
not usable in New Jersey.
|
In
millions
|
2007
|
2006
|
2005
|
|||||||||
Operating
revenues
|
$ |
2,494
|
$ |
2,621
|
$ |
2,718
|
||||||
Operating
expenses
|
2,005
|
2,133
|
2,276
|
|||||||||
Operating
income
|
489
|
488
|
442
|
|||||||||
Minority
interest
|
(30 | ) | (23 | ) | (22 | ) | ||||||
Other
income (expense)
|
4
|
(1 | ) | (1 | ) | |||||||
EBIT
|
463
|
464
|
419
|
|||||||||
Interest
expense
|
125
|
123
|
109
|
|||||||||
Earnings
before income taxes
|
338
|
341
|
310
|
|||||||||
Income
taxes
|
127
|
129
|
117
|
|||||||||
Net
income
|
$ |
211
|
$ |
212
|
$ |
193
|
2007
|
||||||||||||||||||||||||
In
millions
|
Distribution
operations
|
Retail
energy operations
|
Wholesale
services
|
Energy
investments
|
Corporate
and intercompany eliminations
|
Consolidated
AGL Resources
|
||||||||||||||||||
Operating
revenues from external parties
|
$ |
1,477
|
$ |
892
|
$ |
83
|
$ |
42
|
$ |
-
|
$ |
2,494
|
||||||||||||
Intercompany revenues
(1)
|
188
|
-
|
-
|
-
|
(188 | ) |
-
|
|||||||||||||||||
Total
operating revenues
|
1,665
|
892
|
83
|
42
|
(188 | ) |
2,494
|
|||||||||||||||||
Operating
expenses
|
||||||||||||||||||||||||
Cost
of gas
|
845
|
704
|
6
|
2
|
(188 | ) |
1,369
|
|||||||||||||||||
Operation
and maintenance
|
330
|
69
|
38
|
19
|
(5 | ) |
451
|
|||||||||||||||||
Depreciation
and amortization
|
122
|
5
|
4
|
5
|
8
|
144
|
||||||||||||||||||
Taxes
other than income taxes
|
33
|
1
|
1
|
1
|
5
|
41
|
||||||||||||||||||
Total
operating expenses
|
1,330
|
779
|
49
|
27
|
(180 | ) |
2,005
|
|||||||||||||||||
Operating
income (loss)
|
335
|
113
|
34
|
15
|
(8 | ) |
489
|
|||||||||||||||||
Minority
interest
|
-
|
(30 | ) |
-
|
-
|
-
|
(30 | ) | ||||||||||||||||
Other
income
|
3
|
-
|
-
|
-
|
1
|
4
|
||||||||||||||||||
EBIT
|
$ |
338
|
$ |
83
|
$ |
34
|
$ |
15
|
$ | (7 | ) | $ |
463
|
|||||||||||
Identifiable
and total assets
|
$ |
4,831
|
$ |
284
|
$ |
900
|
$ |
287
|
$ | (34 | ) | $ |
6,268
|
|||||||||||
Goodwill
|
$ |
406
|
$ |
-
|
$ |
-
|
$ |
14
|
$ |
-
|
$ |
420
|
||||||||||||
Capital
expenditures
|
$ |
201
|
$ |
2
|
$ |
2
|
$ |
26
|
$ |
28
|
$ |
259
|
2006
|
||||||||||||||||||||||||
In
millions
|
Distribution
operations
|
Retail
energy operations
|
Wholesale
services
|
Energy
investments
|
Corporate
and intercompany eliminations
|
Consolidated
AGL Resources
|
||||||||||||||||||
Operating
revenues from external parties
|
$ |
1,467
|
$ |
930
|
$ |
182
|
$ |
41
|
$ |
1
|
$ |
2,621
|
||||||||||||
Intercompany revenues
(1)
|
157
|
-
|
-
|
-
|
(157 | ) |
-
|
|||||||||||||||||
Total
operating revenues
|
1,624
|
930
|
182
|
41
|
(156 | ) |
2,621
|
|||||||||||||||||
Operating
expenses
|
||||||||||||||||||||||||
Cost
of gas
|
817
|
774
|
43
|
5
|
(157 | ) |
1,482
|
|||||||||||||||||
Operation
and maintenance
|
350
|
64
|
46
|
20
|
(7 | ) |
473
|
|||||||||||||||||
Depreciation
and amortization
|
116
|
3
|
2
|
5
|
12
|
138
|
||||||||||||||||||
Taxes
other than income taxes
|
33
|
1
|
1
|
1
|
4
|
40
|
||||||||||||||||||
Total
operating expenses
|
1,316
|
842
|
92
|
31
|
(148 | ) |
2,133
|
|||||||||||||||||
Operating
income (loss)
|
308
|
88
|
90
|
10
|
(8 | ) |
488
|
|||||||||||||||||
Minority
interest
|
-
|
(23 | ) |
-
|
-
|
-
|
(23 | ) | ||||||||||||||||
Other
income (expense)
|
2
|
(2 | ) |
-
|
-
|
(1 | ) | (1 | ) | |||||||||||||||
EBIT
|
$ |
310
|
$ |
63
|
$ |
90
|
$ |
10
|
$ | (9 | ) | $ |
464
|
|||||||||||
Identifiable
and total assets
|
$ |
4,565
|
$ |
298
|
$ |
849
|
$ |
373
|
$ |
62
|
$ |
6,147
|
||||||||||||
Goodwill
|
$ |
406
|
$ |
-
|
$ |
-
|
$ |
14
|
$ |
-
|
$ |
420
|
||||||||||||
Capital
expenditures
|
$ |
174
|
$ |
9
|
$ |
2
|
$ |
23
|
$ |
45
|
$ |
253
|
2005
|
||||||||||||||||||||||||
In
millions
|
Distribution
operations
|
Retail
energy operations
|
Wholesale
services
|
Energy
investments
|
Corporate
and intercompany eliminations
|
Consolidated
AGL Resources
|
||||||||||||||||||
Operating
revenues from external parties
|
$ |
1,571
|
$ |
996
|
$ |
95
|
$ |
56
|
$ |
-
|
$ |
2,718
|
||||||||||||
Intercompany revenues
(1)
|
182
|
-
|
-
|
-
|
(182 | ) |
-
|
|||||||||||||||||
Total
operating revenues
|
1,753
|
996
|
95
|
56
|
(182 | ) |
2,718
|
|||||||||||||||||
Operating
expenses
|
||||||||||||||||||||||||
Cost
of gas
|
939
|
850
|
3
|
16
|
(182 | ) |
1,626
|
|||||||||||||||||
Operation
and maintenance
|
372
|
58
|
39
|
17
|
(9 | ) |
477
|
|||||||||||||||||
Depreciation
and amortization
|
114
|
2
|
2
|
5
|
10
|
133
|
||||||||||||||||||
Taxes
other than income taxes
|
32
|
1
|
1
|
1
|
5
|
40
|
||||||||||||||||||
Total
operating expenses
|
1,457
|
911
|
45
|
39
|
(176 | ) |
2,276
|
|||||||||||||||||
Operating
income (loss)
|
296
|
85
|
50
|
17
|
(6 | ) |
442
|
|||||||||||||||||
Minority
interest
|
-
|
(22 | ) |
-
|
-
|
-
|
(22 | ) | ||||||||||||||||
Other
income (expense)
|
3
|
-
|
(1 | ) |
2
|
(5 | ) | (1 | ) | |||||||||||||||
EBIT
|
$ |
299
|
$ |
63
|
$ |
49
|
$ |
19
|
$ | (11 | ) | $ |
419
|
|||||||||||
Identifiable
and total assets
|
$ |
4,788
|
$ |
343
|
$ |
1,058
|
$ |
350
|
$ | (219 | ) | $ |
6,320
|
|||||||||||
Goodwill
|
$ |
406
|
$ |
-
|
$ |
-
|
$ |
14
|
$ |
-
|
$ |
420
|
||||||||||||
Capital
expenditures
|
$ |
215
|
$ |
4
|
$ |
1
|
$ |
9
|
$ |
38
|
$ |
267
|
In millions, except per share
amounts
|
March
31
|
June
30
|
Sept.
30
|
Dec.
31
|
||||||||||||
2007
|
||||||||||||||||
Operating
revenues
|
$ |
973
|
$ |
467
|
$ |
369
|
$ |
685
|
||||||||
Operating
income
|
216
|
78
|
55
|
140
|
||||||||||||
Net
income
|
102
|
30
|
13
|
66
|
||||||||||||
Basic
earnings per share
|
1.31
|
0.40
|
0.17
|
0.86
|
||||||||||||
Diluted
earnings per share
|
1.30
|
0.40
|
0.17
|
0.86
|
||||||||||||
2006
|
||||||||||||||||
Operating
revenues
|
$ |
1,044
|
$ |
436
|
$ |
434
|
$ |
707
|
||||||||
Operating
income
|
228
|
60
|
90
|
110
|
||||||||||||
Net
income
|
110
|
19
|
36
|
47
|
||||||||||||
Basic
earnings per share
|
1.42
|
0.25
|
0.46
|
0.60
|
||||||||||||
Diluted
earnings per share
|
1.41
|
0.25
|
0.46
|
0.60
|
||||||||||||
2005
|
||||||||||||||||
Operating
revenues
|
$ |
908
|
$ |
430
|
$ |
387
|
$ |
993
|
||||||||
Operating
income
|
181
|
66
|
54
|
141
|
||||||||||||
Net
income
|
88
|
24
|
15
|
66
|
||||||||||||
Basic
earnings per share
|
1.15
|
0.31
|
0.19
|
0.86
|
||||||||||||
Diluted
earnings per share
|
1.14
|
0.30
|
0.19
|
0.85
|
|
(1) Financial
Statements Included in Item 8 are the following financial
statements:
|
·
|
Consolidated
Balance Sheets as of December 31, 2007 and
2006
|
·
|
Statements
of Consolidated Income for the years ended December 31, 2007, 2006, and
2005
|
·
|
Statements
of Consolidated Common Shareholders’ Equity for the years ended December
31, 2007, 2006 and 2005
|
·
|
Statements
of Consolidated Cash Flows for the years ended December 31, 2007, 2006,
and 2005
|
·
|
Notes
to Consolidated Financial
Statements
|
·
|
Report
of Independent Registered Public Accounting
Firm
|
3.1
|
Amended
and Restated Articles of Incorporation filed November 2, 2005, with the
Secretary of State of the state of Georgia (Exhibit 3.1, AGL Resources
Inc. Form 8-K dated November 2, 2005).
|
3.2a
|
Bylaws,
as amended on October 26, 2006 (Exhibit 3.2, AGL Resources, Inc. Form 8-K
dated November 1, 2006).
|
3.2b
|
Bylaws,
as amended on October 31, 2007 (Exhibit 3.2, AGL Resources, Inc. Form 8-K
dated October 31, 2007).
|
4.1.a
|
Specimen
form of Common Stock certificate (Exhibit 4.1, AGL Resources Inc. Form
10-K for the fiscal year ended September 30,
1999).
|
4.1.b
|
Specimen
AGL Capital Corporation 6.00% Senior Notes due 2034 (Exhibit 4.1, AGL
Resources Inc. Form 8-K dated September 27, 2004).
|
4.1.c
|
Specimen
AGL Capital Corporation 4.95% Senior Notes due 2015. (Exhibit 4.1, AGL
Resources Inc. Form 8-K dated December 21, 2004).
|
4.1.d
|
Specimen
form of Right certificate (Exhibit 1, AGL Resources Inc. Form 8-K filed
March 6, 1996).
|
4.1.e
|
Specimen
AGL Capital Corporation 6.375% Senior Secured Notes due 2016. (Exhibit
4.1, AGL Resources Inc. Form 8-K dated December 11,
2007).
|
|
|
4.1.f
|
Specimen
AGL Capital Corporation 7.125% Senior Secured Notes due
2011.
|
4.1.g
|
Specimen
AGL Capital Corporation 4.45% Senior Secured Notes due
2013.
|
4.2.a
|
Indenture,
dated as of December 1, 1989, between Atlanta Gas Light Company and
Bankers Trust Company, as Trustee (Exhibit 4(a), Atlanta Gas Light Company
registration statement on Form S-3, No. 33-32274).
|
4.2.b
|
First
Supplemental Indenture dated as of March 16, 1992, between Atlanta Gas
Light Company and NationsBank of Georgia, National Association, as
Successor Trustee (Exhibit 4(a), Atlanta Gas Light Company registration
statement on Form S-3, No. 33-46419).
|
4.2.c
|
Indenture,
dated February 20, 2001 among AGL Capital Corporation, AGL Resources Inc.
and The Bank of New York, as Trustee (Exhibit 4.2, AGL Resources Inc.
registration statement on Form S-3, filed on September 17, 2001, No.
333-69500).
|
4.3.a
|
Form
of Guarantee of AGL Resources Inc. dated as of December 14, 2007 regarding
the AGL Capital Corporation 6.375% Senior Note due 2016 (Exhibit 4.2, AGL
Resources Inc. Form 8-K dated December 11, 2007).
|
||
4.3.b
|
Form
of Guarantee of AGL Resources Inc. dated as of September 27, 2004
regarding the AGL Capital Corporation 6.00% Senior Note due 2034 (Exhibit
4.1, AGL Resources Inc. Form 8-K dated September 27,
2004).
|
||
4.3.c
|
Form
of Guarantee of AGL Resources Inc. dated as of December 20, 2004 regarding
the AGL Capital Corporation 4.95% Senior Note due 2015 (Exhibit 4.1, AGL
Resources Inc. Form 8-K dated December 21, 2004).
|
||
4.3.d
|
Form
of Guarantee of AGL Resources Inc. dated as of March 31, 2001 regarding
the AGL Capital Corporation 7.125% Senior Note due
2011.
|
||
4.3.e
|
Form
of Guarantee of AGL Resources Inc. dated as of July 2, 2003 regarding the
AGL Capital Corporation 4.45% Senior Note due 2011.
|
||
4.4.a
|
Rights
Agreement dated as of March 6, 1996 between AGL Resources Inc. and
Wachovia Bank of North Carolina, N.A. as Rights Agent (Exhibit 1, AGL
Resources Inc. Form 8-A dated March 6, 1996).
|
||
4.4.b
|
Second
Amendment to Rights Agreement dated as of June 5, 2002 between AGL
Resources Inc. and Equiserve Trust Company, N.A. (Exhibit 1, AGL Resources
Inc. Amendment No. 1 to Form 8-A dated June 2, 2002).
|
||
10.1
|
Director
and Executive Compensation Contracts, Plans and
Arrangements.
|
||
Director Compensation
Contracts, Plans and Arrangements
|
|||
10.1.a
|
AGL
Resources Inc. Amended and Restated 1996 Non-Employee Directors Equity
Compensation Plan (Exhibit 10.1, AGL Resources Inc. Form 10-Q for the
quarter ended September 30, 2002).
|
||
10.1.b
|
First
Amendment to the AGL Resources Inc. Amended and Restated 1996 Non-Employee
Directors Equity Compensation Plan (Exhibit 10.1.o, AGL Resources Inc.
Form 10-K for the fiscal year ended December 31, 2002).
|
||
10.1.c
|
Second
Amendment to the AGL Resources Inc. Amended and Restated 1996 Non-Employee
Directors Equity Compensation Plan (Exhibit 10.1.k, AGL Resources Inc.
Form 10-Q for the quarter ended June 30, 2007).
|
||
10.1.d
|
AGL
Resources Inc. 2006 Non-Employee Directors Equity Compensation Plan
(incorporated herein by reference to Annex C of the AGL Resources Inc.
Proxy Statement for the Annual Meeting of Shareholders held May 3, 2006
filed on March 20, 2006).
|
||
10.1.e
|
First
Amendment to the AGL Resources Inc. 2006 Non-Employee Directors Equity
Compensation Plan (Exhibit 10.1.i, AGL Resources Inc. Form 10-Q for the
quarter ended June 30, 2007).
|
||
10.1.f
|
AGL
Resources Inc. 1998 Common Stock Equivalent Plan for Non-Employee
Directors (Exhibit 10.1.b, AGL Resources Inc. Form 10-Q for the quarter
ended December 31, 1997).
|
10.1.g
|
First
Amendment to the AGL Resources Inc. 1998 Common Stock Equivalent Plan for
Non-Employee Directors (Exhibit 10.5, AGL Resources Inc. Form 10-Q for the
quarter ended March 31, 2000).
|
10.1.h
|
Second
Amendment to the AGL Resources Inc. 1998 Common Stock Equivalent Plan for
Non-Employee Directors (Exhibit 10.4, AGL Resources Inc. Form 10-Q for the
quarter ended September 30, 2002).
|
10.1.i
|
Third
Amendment to the AGL Resources Inc. 1998 Common Stock Equivalent Plan for
Non-Employee Directors (Exhibit 10.5, AGL Resources Inc. Form 10-Q for the
quarter ended September 30, 2002).
|
10.1.j
|
Fourth
Amendment to the AGL Resources Inc. 1998 Common Stock Equivalent Plan for
Non-Employee Directors (Exhibit 10.1.m, AGL Resources Inc. Form 10-Q for
the quarter ended June 30, 2007).
|
10.1.k
|
Description
of Directors’ Compensation (Exhibit 10.1, AGL Resources Inc. Form 8-K
dated December 1, 2004).
|
10.1.l
|
Description
of Director’s Compensation with respect to the annual retainer and
description of Director non-employee share-ownership guidelines (Item
1.01, AGL Resources Inc. Form 8-K dated December 7,
2005).
|
10.1.m
|
Description
of Director’s Compensation with respect to the annual retainer and
description of Director non-employee share-ownership guidelines (Item
1.01, AGL Resources Inc. Form 8-K dated October 26,
2006).
|
10.1.n
|
Form
of Stock Award Agreement for Non-Employee Directors (Exhibit 10.1.aj, AGL
Resources Inc. Form 10-K for the fiscal year ended December 31,
2004).
|
10.1.o
|
Form
on Nonqualified Stock Option Agreement for Non-Employee Directors (Exhibit
10.1.ak, AGL Resources Inc. Form 10-K for the fiscal year ended December
31, 2004).
|
10.1.p
|
Form
of Director Indemnification Agreement, dated April 28, 2004, between AGL
Resources Inc., on behalf of itself and the Indemnities named therein
(Exhibit 10.3, AGL Resources Inc. Form 10-Q for the quarter ended June 30,
2004).
|
10.1.q
|
AGL
Resources Inc. Long-Term Stock Incentive Plan of 1990 (Exhibit 10(ii),
Atlanta Gas Light Company Form 10-K for the fiscal year ended September
30, 1991).
|
10.1.r
|
First
Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990
(Exhibit B to the Atlanta Gas Light Company Proxy Statement for the Annual
Meeting of Shareholders held February 5, 1993).
|
10.1.s
|
Second
Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990
(Exhibit 10.1.d, AGL Resources Inc. Form 10-K for the fiscal year ended
September 30, 1997).
|
10.1.t
|
Third
Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990
(Exhibit C to the Proxy Statement and Prospectus filed as a part of
Amendment No. 1 to Registration Statement on Form S-4, No.
33-99826).
|
10.1.u
|
Fourth
Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990
(Exhibit 10.1.f, AGL Resources Inc. Form 10-K for the fiscal year ended
September 30, 1997).
|
10.1.v
|
Fifth
Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990
(Exhibit 10.1.g, AGL Resources Inc. Form 10-K for the fiscal year ended
September 30, 1997).
|
10.1.w
|
Sixth
Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990
(Exhibit 10.1.a, AGL Resources Inc. Form 10-Q for the quarter ended March
31, 1998).
|
10.1.x
|
Seventh
Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990
(Exhibit 10.1, AGL Resources Inc. Form 10-Q for the quarter ended December
31, 1998).
|
10.1.y
|
Eighth
Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990
(Exhibit 10.1, AGL Resources Inc. Form 10-Q for the quarter ended March
31, 2000).
|
10.1.z
|
Ninth
Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan 1990
(Exhibit 10.6, AGL Resources Inc. Form 10-Q for the quarter ended
September 30, 2002).
|
10.1.aa
|
Tenth
Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan 1990
(Exhibit 10.1.n, AGL Resources Inc. Form 10-Q for the quarter ended June
30, 2007).
|
10.1.ab
|
AGL
Resources Inc. Long-Term Incentive Plan (1999), as amended and restated as
of January 1, 2002 (Exhibit 99.2, AGL Resources Inc. Form 10-Q for the
quarter ended March 31, 2002).
|
10.1.ac
|
First
amendment to the AGL Resources Inc. Long-Term Incentive Plan (1999), as
amended and restated (Exhibit 10.1.b, AGL Resources Inc. Form 10-K for the
fiscal year ended December 31, 2004).
|
10.1.ad
|
Second
amendment to the AGL Resources Inc. Long-Term Incentive Plan (1999), as
amended and restated (Exhibit 10.1.l, AGL Resources Inc. Form 10-Q for the
quarter ended June 30, 2007).
|
10.1.ae
|
AGL
Resources Inc. Officer Incentive Plan (Exhibit 10.2, AGL Resources Inc.
Form 10-Q for the quarter ended June 30, 2001).
|
10.1.af
|
First
amendment to the AGL Resources Inc. Officer Incentive Plan (Exhibit
10.1.j, AGL Resources Inc. Form 10-Q for the quarter ended June 30,
2007).
|
10.1.ag
|
AGL
Resources Inc. 2007 Omnibus Performance Incentive Plan (Annex A of AGL
Resources Inc.’s Schedule 14A, File No. 001-14174, filed with the
Securities and Exchange Commission on March 19, 2007).
|
10.1.ah
|
Form
of Incentive Stock Option Agreement - AGL Resources Inc. 2007 Omnibus
Performance Incentive Plan (Exhibit 10.1.b, AGL Resources Inc. Form 10-Q
for the quarter ended June 30, 2007).
|
10.1.ai
|
Form
of Nonqualified Stock Option Agreement - AGL Resources Inc. 2007 Omnibus
Performance Incentive Plan (Exhibit 10.1.c, AGL Resources Inc. Form 10-Q
for the quarter ended June 30, 2007).
|
10.1.aj
|
Form
of Performance Cash Award Agreement - AGL Resources Inc. 2007 Omnibus
Performance Incentive Plan (Exhibit 10.1.d, AGL Resources Inc. Form 10-Q
for the quarter ended June 30, 2007).
|
10.1.ak
|
Form
of Restricted Stock Agreement (performance based) - AGL Resources Inc.
2007 Omnibus Performance Incentive Plan (Exhibit 10.1.e, AGL Resources
Inc. Form 10-Q for the quarter ended June 30, 2007).
|
10.1.al
|
Form
of Restricted Stock Agreement (time based) - AGL Resources Inc. 2007
Omnibus Performance Incentive Plan (Exhibit 10.1.f, AGL Resources Inc.
Form 10-Q for the quarter ended June 30, 2007).
|
10.1.am
|
Form
of Restricted Stock Unit Agreement - AGL Resources Inc. 2007 Omnibus
Performance Incentive Plan. (Exhibit 10.1.g, AGL Resources Inc. Form 10-Q
for the quarter ended June 30, 2007)
|
10.1.an
|
Form
of Stock Appreciation Rights Agreement - AGL Resources Inc. 2007 Omnibus
Performance Incentive Plan (Exhibit 10.1.h, AGL Resources Inc. Form 10-Q
for the quarter ended June 30, 2007).
|
10.1.ao
|
Form
of Incentive Stock Option Agreement, Nonqualified Stock Option Agreement
and Restricted Stock Agreement for key employees (Exhibit 10.1, AGL
Resources Inc. Form 10-Q for the quarter ended September 30,
2004).
|
10.1.ap
|
Form
of Performance Unit Agreement for key employees (Exhibit 10.1.e, AGL
Resources Inc. Form 10-K for the fiscal year ended December 31,
2004).
|
10.1.aq
|
Forms
of Nonqualified Stock Option Agreement without the reload provision (LTIP
and Officer Plan) (Exhibit 10.1, AGL Resources Inc. Form 8-K dated March
15, 2005).
|
10.1.ar
|
Form
of Nonqualified Stock Option Agreement with the reload provision (Officer
Plan) (Exhibit 10.2, AGL Resources Inc. Form 8-K dated March 15,
2005).
|
10.1.as
|
Form
of Restricted Stock Unit Agreement and Performance Cash Unit Agreement for
key employees (Exhibit 10.1 and 10.2, respectively, AGL Resources Inc.
Form 8-K dated February 24, 2006).
|
10.1.at
|
AGL
Resources Inc. Nonqualified Savings Plan as amended and restated as of
January 1, 2007 (Exhibit 10.1.af, AGL Resources Inc. Form 10-K for the
fiscal year ended December 31,
2006).
|
10.1.au
|
AGL
Resources Inc. Executive Performance Incentive Plan dated February 2, 2002
(Exhibit 99.1, AGL Resources Inc. Form 10-Q for the quarter ended March
31, 2002).
|
10.1.av
|
AGL
Resources Inc. Annual Incentive Plan - 2006 (Exhibit 10.1, AGL Resources
Inc. Form 8-K/A dated February 24,
2006).
|
10.1.aw
|
AGL
Resources Inc. Annual Incentive Plan - 2007 (Exhibit 10.1, AGL Resources
Inc. Form 8-K dated August 6, 2007).
|
10.1.ax
|
Description
of Annual Incentive Compensation Arrangement for Douglas N.
Schantz.
|
10.1.ay
|
Continuity
Agreement, dated December 1, 2003, by and between AGL Resources Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and Kevin P. Madden (Exhibit 10.1.w, AGL Resources Inc. Form 10-K for the
fiscal year ended December 31, 2003).
|
10.1.az
|
Amendment
to Continuity Agreement, dated February 24, 2006, by and between AGL
Resources Inc., on behalf of itself and AGL Services Company (its wholly
owned subsidiary) and Kevin P. Madden (Exhibit 10.6, AGL Resources Inc.
Form 8-K/A dated February 24, 2006).
|
10.1.ba
|
Continuity
Agreement, dated December 1, 2003, by and between AGL Resources Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and Paul R. Shlanta (Exhibit 10.1.z, AGL Resources Inc. Form 10-K for the
fiscal year ended December 31, 2003).
|
10.1.bb
|
Amendment
to Continuity Agreement, dated February 24, 2006, by and between AGL
Resources Inc., on behalf of itself and AGL Services Company (its wholly
owned subsidiary) and Paul R. Shlanta (Exhibit 10.7, AGL Resources Inc.
Form 8-K/A dated February 24, 2006).
|
10.1.bc
|
Continuity
Agreement, dated September 30, 2005, by and between AGL Resources Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and Andrew W. Evans (Exhibit 10.1, AGL Resources Inc. Form 8-K dated
September 27, 2005).
|
10.1.bd
|
Amendment
to Continuity Agreement, dated February 24, 2006, by and between AGL
Resources Inc., on behalf of itself and AGL Services Company (its wholly
owned subsidiary) and Andrew W, Evans (Exhibit 10.5, AGL Resources Inc.
Form 8-K/A dated February 24, 2006).
|
10.1.be
|
Continuity
Agreement, dated January 1, 2006, by and between AGL Resources, Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and R. Eric Martinez, Jr. (Exhibit 10.4, AGL Resources Inc. Form 8-K/A
dated February 24, 2006).
|
10.1.bf
|
Continuity
Agreement, dated March 3, 2006, by and between AGL Resources Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and John W. Somerhalder II (Exhibit 10.2 AGL Resources, Inc. Form 8-K
dated March 8, 2006).
|
10.1.bg
|
Continuity
Agreement, dated March 15, 2006, by and between AGL Resources Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and Douglas N. Schantz (Exhibit
10.1.as AGL Resources, Inc. Form 10-K for the fiscal year ended December
31, 2006).
|
10.1.bh
|
Continuity
Agreement, dated December 1, 2007, by and between AGL Resources Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and John W. Somerhalder II (Exhibit
10.1.a AGL Resources, Inc. Form 8-K dated January 8,
2008).
|
10.1.bi
|
Continuity
Agreement, dated December 1, 2007, by and between AGL Resources Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and Andrew W. Evans (Exhibit 10.1.b AGL Resources, Inc. Form 8-K dated
January 8, 2008).
|
10.1.bj
|
Continuity
Agreement, dated December 1, 2007, by and between AGL Resources Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and Kevin P. Madden (Exhibit 10.1.c AGL Resources, Inc. Form 8-K dated
January 8, 2008).
|
10.1.bk
|
Continuity
Agreement, dated December 1, 2007, by and between AGL Resources Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and Douglas N. Schantz (Exhibit 10.1.d AGL Resources, Inc. Form 8-K dated
January 8, 2008).
|
10.1.bl
|
Continuity
Agreement, dated December 1, 2007, by and between AGL Resources Inc., on
behalf of itself and AGL Services Company (its wholly owned subsidiary)
and Paul R. Shlanta.
|
10.1.bm
|
Form
of AGL Resources Inc. Executive Post Employment Medical Benefit Plan
(Exhibit 10.1.d, AGL Resources Inc. Form 10-Q for the quarter ended June
30, 2003).
|
10.1.bn | Description of Compensation Agreement for each of Kevin P. Madden, R. Eric Martinez, Jr., Paul R. Shlanta and Andrew W. Evans (Item 1.01, AGL Resources Inc. Form 8-K, dated February 1, 2006). |
10.1.bo
|
Description
of Compensation Agreement for each of Andrew W. Evans and R. Eric
Martinez, Jr. (Item 1.01, AGL Resources Inc. Form 8-K, dated May 2,
2006).
|
10.1.bp
|
Description
of compensation for each of John W. Somerhalder, Andrew W. Evans, Kevin P.
Madden, R. Eric Martinez Jr. and Paul R. Shlanta (Item 1.01, AGL Resources
Inc. Form 8-K, dated January 30, 2007).
|
10.1.bq
|
Description
of One-Time Cash Award for D. Raymond Riddle and Chairman of the Board
Retainer (Item 5.02, AGL Resources Inc. Form 8-K, dated March 23,
2007).
|
10.1.br
|
AGL
Resources Inc. Share Repurchase Program, dated February 3, 2006 (Item 1.01
AGL Resources Inc. Form 8-K, dated February 1,
2006).
|
10.2
|
Guaranty
Agreement, effective December 13, 2005, by and between Atlanta Gas Light
Company and AGL Resources Inc. (Exhibit 10.2, AGL Resources Inc. Form 10-K
for the fiscal year ended December 31, 2006)
|
10.3
|
Form
of Commercial Paper Dealer Agreement between AGL Capital Corporation, as
Issuer, AGL Resources Inc., as Guarantor, and the Dealers named therein,
dated September 25, 2000 (Exhibit 10.79, AGL Resources Inc. Form 10-K for
the fiscal year ended September 30, 2000).
|
10.4
|
Guarantee
of AGL Resources Inc., dated October 5, 2000, of payments on promissory
notes issued by AGL Capital Corporation (AGLCC) pursuant to the Issuing
and Paying Agency Agreement dated September 25, 2000, between AGLCC and
The Bank of New York (Exhibit 10.80, AGL Resources Inc. Form 10-K for the
fiscal year ended September 30, 2000).
|
10.5
|
Issuing
and Paying Agency Agreement, dated September 25, 2000, between AGL Capital
Corporation and The Bank of New York. (Exhibit 10.81, AGL Resources Inc.
Form 10-K for the fiscal year ended September 30,
2000).
|
10.6
|
Amended
and Restated Master Environmental Management Services Agreement, dated
July 25, 2002 by and between Atlanta Gas Light Company and The RETEC
Group, Inc. (Exhibit 10.2, AGL Resources Inc. Form 10-Q for the quarter
ended June 30, 2003). (Confidential treatment pursuant to 17 CFR Sections
200.80 (b) and 240.24-b has been granted regarding certain portions of
this exhibit, which portions have been filed separately with the
Commission).
|
10.7
|
Credit
Agreement dated as of August 31, 2006, by and among AGL Resources Inc.,
AGL Capital Corporation, SunTrust Bank, as administrative agent, Wachovia
Bank, National Association, as syndication agent, JPMorgan Chase Bank,
N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Calyon New York Branch,
as co-documentation agents, and the several other banks and other
financial institutions named therein (Exhibit 10, AGL Resources Inc. Form
8-K dated August 31, 2006).
|
10.8
|
SouthStar
Energy Services LLC Agreement, dated April 1, 2004 by and between Georgia
Natural Gas Company and Piedmont Energy Company (Exhibit 10, AGL Resources
Inc. Form 10-Q for the quarter ended March 31, 2004).
|
14
|
AGL
Resources Inc. Code of Ethics for its Chief Executive Officer and its
Senior Financial Officers (Exhibit 14, AGL Resources Inc. Form 10-K for
the year ended December 31, 2004).
|
21
|
Subsidiaries
of AGL Resources Inc.
|
23
|
Consent
of PricewaterhouseCoopers LLP, independent registered public accounting
firm.
|
24
|
Powers
of Attorney (included on signature page
hereto).
|
31.1
|
Certification
of John W. Somerhalder II pursuant to Rule 13a – 14(a).
|
31.2
|
Certification
of Andrew W. Evans pursuant to Rule 13a – 14(a).
|
32.1
|
Certification
of John W. Somerhalder II pursuant to 18 U.S.C. Section
1350.
|
32.2
|
Certification
of Andrew W. Evans pursuant to 18 U.S.C. Section
1350.
|
(b)
|
Exhibits filed as part of this
report.
|
|
See
Item 15(a)(3).
|
||
(c)
|
Financial statement schedules
filed as part of this report.
|
|
See
Item 15(a)(2).
|
Signatures
|
Title
|
/s/ John W.
Somerhalder II
|
Chairman,
President and Chief Executive Officer
(Principal
Executive Officer)
|
John
W. Somerhalder II
|
|
/s/ Andrew W.
Evans
|
Executive
Vice President and Chief Financial Officer
(Principal
Financial Officer)
|
Andrew
W. Evans
|
|
/s/ Bryan E.
Seas
|
Vice
President, Controller and Chief Accounting Officer (Principal Accounting
Officer)
|
Bryan
E. Seas
|
|
/s/ Thomas D. Bell,
Jr.
|
Director
|
Thomas
D. Bell, Jr.
|
|
/s/ Charles R.
Crisp
|
Director
|
Charles
R. Crisp
|
|
/s/ Michael J.
Durham
|
Director
|
Michael
J. Durham
|
|
/s/ Arthur E.
Johnson
|
Director
|
Arthur
E. Johnson
|
|
/s/ Wyck A. Knox,
Jr.
|
Director
|
Wyck
A. Knox, Jr.
|
|
/s/ Dennis M.
Love
|
Director
|
Dennis M. Love | |
/s/ Charles H.
McTier
|
Director
|
Charles
H. McTier
|
|
/s/ Dean R.
O’Hare
|
Director
|
Dean
R. O’Hare
|
|
/s/ D. Raymond
Riddle
|
Director
|
D.
Raymond Riddle
|
|
/s/ James A.
Rubright
|
Director
|
James
A. Rubright
|
|
/s/ Felker W. Ward,
Jr.
|
Director
|
Felker
W. Ward, Jr.
|
|
/s/ Bettina M.
Whyte
|
Director
|
Bettina
M. Whyte
|
|
/s/ Henry C.
Wolf
|
Director
|
Henry
C. Wolf
|
In
millions
|
Allowance
for uncollectible accounts
|
Income
tax valuation
|
||||||
Balance at December 31, 2004 | $ | 15 | $ | 8 | ||||
Provisions
charged to income in 2005
|
17
|
-
|
||||||
Accounts
written off as uncollectible, net in 2005
|
(17 | ) |
-
|
|||||
Additional
valuation allowances
|
-
|
1
|
||||||
Balance
at December 31, 2005
|
15
|
9
|
||||||
Provisions
charged to income in 2006
|
22
|
-
|
||||||
Accounts
written off as uncollectible, net in 2006
|
(22 | ) |
-
|
|||||
Decrease
due to change in circumstances
|
-
|
(6 | ) | |||||
Balance
at December 31, 2006
|
15
|
3
|
||||||
Provisions
charged to income in 2007
|
19
|
-
|
||||||
Accounts
written off as uncollectible, net in 2007
|
(20 | ) |
-
|
|||||
Balance
at December 31, 2007
|
$ |
14
|
$ |
3
|