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, 2008
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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 each 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, or a smaller reporting
company
Large
accelerated filer þ Accelerated
filer ¨ Non-accelerated
filer ¨ Smaller
reporting company ¨
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|
(Do not
check if smaller reporting company)
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 $2,651,161,320.
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The
number of shares of the registrant’s common stock outstanding as of
January 30, 2009 was 76,902,777.
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DOCUMENTS
INCORPORATED BY REFERENCE:
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Portions
of the Proxy Statement for the 2009 Annual Meeting of Shareholders (“Proxy
Statement”) to be held April 29, 2009, are incorporated by reference in
Part III.
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Page(s)
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|||||
Glossary
of Key Terms & Referenced Accounting Standards
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4-5 | ||||
Part
I
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|||||
Item
1.
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6-16 | ||||
6-9 | |||||
9-10 | |||||
10-13 | |||||
13-14 | |||||
15-16 | |||||
Item
1A.
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16-23 | ||||
Item
1B.
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23 | ||||
Item
2.
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23-24 | ||||
Item
3.
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24 | ||||
Item
4.
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25 | ||||
25 | |||||
Part
II
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|||||
Item
5.
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26-27 | ||||
Item
6.
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28 | ||||
Item
7.
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29-46 | ||||
29 | |||||
29-30 | |||||
30-35 | |||||
35-41 | |||||
41-46 | |||||
46 | |||||
Item
7A.
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46-50 | ||||
Item
8.
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51-87 | ||||
51 | |||||
52 | |||||
53-54 | |||||
55 | |||||
56 | |||||
57 | |||||
58-65 | |||||
65-70 | |||||
70-73 | |||||
74-77 | |||||
78 | |||||
78-80 | |||||
81-84 | |||||
84-85 | |||||
85-87 | |||||
87 | |||||
Item
9.
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88 | ||||
Item
9A.
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88 | ||||
Item
9B.
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88 |
Part
III
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|||||
Item
10.
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88 | ||||
Item
11.
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88 | ||||
Item
12.
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88-89 | ||||
Item
13.
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89 | ||||
Item
14.
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89 | ||||
Part
IV
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|||||
Item
15.
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89-93 | ||||
94 | |||||
95 |
Atlanta
Gas Light
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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, a service company established in accordance with SEC
regulations
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AIP
|
Annual
Incentive Plan
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Bcf
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Billion
cubic feet
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Chattanooga
Gas
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Chattanooga
Gas Company
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Compass
Energy
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Compass
Energy Services, Inc.
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Credit
Facilities
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$1.0
billion and $140 million credit agreements of AGL Capital
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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.
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EBIT
|
Earnings
before interest and taxes, a non-GAAP measure that includes operating
income, other income, minority interest in SouthStar’s earnings 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
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EITF
|
Emerging
Issues Task Force
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Energy
Act
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Energy
Policy Act of 2005
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ERC
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Environmental
remediation costs associated with our distribution operations segment
which are recoverable through rates mechanisms
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FASB
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Financial
Accounting Standards Board
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FERC
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Federal
Energy Regulatory Commission
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Fitch
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Fitch
Ratings
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Florida
Commission
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Florida
Public Service Commission
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FSP
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FASB
Staff Position
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GAAP
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Accounting
principles generally accepted in the United States of
America
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Georgia
Commission
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Georgia
Public Service Commission
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Golden
Triangle Storage
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Golden
Triangle Storage, Inc.
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Heating
Degree Days
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A
measure of the effects of weather on our businesses, calculated when the
average daily actual temperatures are less than a baseline temperature of
65 degrees Fahrenheit.
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Heating Season | The period from November to March when natural gas usuage and operating revenues are generally higher because more customer are connected to our distribution systems when weather is colder. | |
Jefferson
Island
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Jefferson
Island Storage & Hub, LLC
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LIBOR
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London
interbank offered rate
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LNG
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Liquefied
natural gas
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LOCOM
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Lower
of weighted average cost or current market price
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Louisiana
DNR
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Louisiana
Department of Natural Resources
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Magnolia
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Magnolia
Enterprise Holdings, Inc.
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Maryland
Commission
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Maryland
Public Service Commission
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Marketers
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Marketers
selling retail natural gas in Georgia and certificated by the Georgia
Commission
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Medium-term
notes
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Notes
issued by Atlanta Gas Light with scheduled maturities between 2012 and
2027 bearing interest rates ranging from 6.6% to 9.1%
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MGP
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Manufactured
gas plant
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MMBtu
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NYMEX
equivalent contract units of 10,000 million British thermal
units
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Moody’s
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Moody’s
Investors Service
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New
Jersey Commission
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New
Jersey Board of Public Utilities
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NUI
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NUI
Corporation - an acquisition which was completed in November
2004
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NYMEX
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New
York Mercantile Exchange, Inc.
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OCI
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Other
comprehensive income
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Operating
margin
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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.
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OTC
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Over-the-counter
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Piedmont
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Piedmont
Natural Gas
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Pivotal
Propane
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Pivotal
Propane of Virginia, Inc.
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Pivotal
Utility
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Pivotal
Utility Holdings, Inc., doing business as Elizabethtown Gas, Elkton Gas
and Florida City Gas
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PP&E
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Property,
plant and equipment
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PRP
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Pipeline
replacement program for Atlanta Gas Light
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S&P
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Standard
& Poor’s Ratings Services
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Saltville
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Saltville
Gas Storage Company
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SEC
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Securities
and Exchange Commission
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Sequent
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Sequent
Energy Management, L.P.
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SFAS
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Statement
of Financial Accounting Standards
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SNG
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Southern
Natural Gas Company, a subsidiary of El Paso
Corporation
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SouthStar
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SouthStar
Energy Services LLC
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Tennessee
Commission
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Tennessee
Regulatory Authority
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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
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Virginia
Natural Gas
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Virginia
Natural Gas, Inc.
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|
Virginia
Commission
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Virginia
State Corporation Commission
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WACOG
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Weighted
average cost of goods
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WNA
|
Weather
normalization
adjustment
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APB
25
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APB
Opinion No. 25, “Accounting for Stock Issued to
Employees”
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EITF
98-10
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EITF
Issue No. 98-10, “Accounting for Contracts Involved in Energy Trading and
Risk Management Activities”
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EITF
99-02
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EITF
Issue No. 99-02, “Accounting for Weather Derivatives”
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EITF
00-11
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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”
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EITF
02-03
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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’”
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FIN
39
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FASB
Interpretation No. (FIN) 39 “Offsetting of Amounts Related to Certain
Contracts”
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FSP
FIN 39-1
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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”
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FIN
48
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FIN
48, “Accounting for Uncertainty in Income Taxes, an interpretation of SFAS
Statement No. 109”
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FSP
EITF 03-6-1
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FSP
EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities”
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FSP
EITF 06-3
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FSP
EITF 06-3, “How Taxes Collected from Customers and Remitted to
Governmental Authorities Should be Presented in the Income Statement (That
Is, Gross versus Net Presentation)”
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FSP
FAS 133-1
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FSP
No. FAS 133-1, “Disclosures about Credit Derivatives and Certain
Guarantees: An Amendment of FASB Statement No. 133”
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FSP
FAS 140-R and FIN 46R-8
|
FSP
No. FAS 140-R and FIN 46R-8, “Disclosures by Public Entities (Enterprises)
about Transfers of Financial Assets and Interests in Variable Interest
Entities”
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FSP
FAS 157-3
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FSP
No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the
Market for That Asset Is Not Active”
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SFAS
5
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SFAS
No. 5, “Accounting for Contingencies”
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SFAS
13
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SFAS
No. 13, “Accounting for Leases”
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SFAS
66
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SFAS
No. 66, “Accounting for Sales of Real Estate”
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SFAS
71
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SFAS
No. 71, “Accounting for the Effects of Certain Types of
Regulation”
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SFAS
87
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SFAS
No. 87, “Employers’ Accounting for Pensions”
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SFAS
106
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SFAS
No. 106, “Employers’ Accounting for Postretirement Benefits Other Than
Pensions”
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|
SFAS
109
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SFAS
No. 109, “Accounting for Income Taxes”
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SFAS
123 & SFAS 123R
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SFAS
No. 123, “Accounting for Stock-Based Compensation”
|
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SFAS
133
|
SFAS
No. 133, “Accounting for Derivative Instruments and Hedging
Activities”
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|
SFAS
140
|
SFAS
No. 140, “Accounting for Transfers and Servicing Financial
Assets and Extinguishments of Liabilities”
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|
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”
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|
SFAS
158
|
SFAS
No. 158, “Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans”
|
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SFAS
160
|
SFAS
No. 160, “Noncontrolling Interests in Consolidated Financial
Statements”
|
|
SFAS
161
|
SFAS
No. 161, “Disclosure about Derivative Instruments and Hedging Activities,
an amendment of SFAS
133”
|
In
millions
|
Operating
revenues
|
Operating
margin (1)
|
Operating
expenses
|
EBIT
(1)
|
|
||||||||||
2008
|
|||||||||||||||
Distribution
operations
|
$ | 1,768 | $ | 818 | $ | 493 | $ | 329 | |||||||
Retail
energy operations
|
987 | 149 | 73 | 57 | |||||||||||
Wholesale
services
|
170 | 122 | 62 | 60 | |||||||||||
Energy
investments
|
55 | 50 | 31 | 19 | |||||||||||
Corporate
(2)
|
(180 | ) | 7 | 9 | (1 | ) | |||||||||
Consolidated
|
$ | 2,800 | $ | 1,146 | $ | 668 | $ | 464 | |||||||
2007
|
|||||||||||||||
Distribution
operations
|
$ | 1,665 | $ | 820 | $ | 485 | $ | 338 | |||||||
Retail
energy operations
|
892 | 188 | 75 | 83 | |||||||||||
Wholesale
services
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83 | 77 | 43 | 34 | |||||||||||
Energy
investments
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42 | 40 | 25 | 15 | |||||||||||
Corporate
(2)
|
(188 | ) | - | 8 | (7 | ) | |||||||||
Consolidated
|
$ | 2,494 | $ | 1,125 | $ | 636 | $ | 463 | |||||||
2006
|
|||||||||||||||
Distribution
operations
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$ | 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 |
(1)
|
These
are non-GAAP measurements. A reconciliation of operating margin and EBIT
to
our
operating income, earnings before income taxes and net income is contained
|
·
|
Atlanta
Gas Light in Georgia
|
·
|
Chattanooga
Gas in Tennessee
|
·
|
Elizabethtown
Gas in New Jersey
|
·
|
Elkton
Gas in Maryland
|
·
|
Florida
City Gas in Florida
|
·
|
Virginia
Natural Gas in Virginia
|
·
|
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
|
·
|
planning
and contracting for capacity on interstate transportation and storage
systems
|
Atlanta
Gas Light
|
Elizabethtown
Gas
|
Virginia
Natural Gas
|
Florida
City Gas
|
Chattanooga Gas | |||||||||||||||||
Current
rates effective until
|
Q2 2010 | Q4 2009 - Q1 2010 | Q3 2011 | N/A | Q1 2011 | ||||||||||||||||
Authorized
return on rate base (1)
|
8.53 | % | 7.95 | % | 9.24 | % | 7.36 | % | 7.89 | % | |||||||||||
Estimated
2008 return on rate base (2) (3)
|
8.38 | % | 6.86 | % | 8.24 | % | 5.63 | % | 6.52 | % | |||||||||||
Authorized
return on equity (1)
|
10.90 | % | 10.00 | % | 10.90 | % | 11.25 | % | 10.20 | % | |||||||||||
Estimated
2008 return on equity (2)
(3)
|
10.59 | % | 7.67 | % | 9.61 | % | 7.09 | % | 7.14 | % | |||||||||||
Authorized
rate base % of equity (1)
|
47.9 | % | 53.0 | % | 52.4 | % | 36.8 | % | 44.8 | % | |||||||||||
Rate
base included in 2008 return on equity (in millions) (3) (4)
|
$ | 1,312 | $ | 471 | $ | 378 | $ | 152 | $ | 108 | |||||||||||
Performance
based rates (5)
|
ü
|
ü
|
|||||||||||||||||||
Weather
normalization (6)
|
ü
|
ü
|
ü
|
||||||||||||||||||
Decoupled
or straight-fixed variable rate design (7)
|
ü
|
ü
|
|||||||||||||||||||
State
regulator
|
Georgia
Commission
|
New
Jersey Commission
|
Virginia
Commission
|
Florida
Commission
|
Tennessee Commission |
|
(1)
|
The
authorized return on rate base, return on equity, and percentage of equity
reflected above were those authorized as of December 31,
2008.
|
(2)
|
Estimates
based on principles consistent with utility ratemaking in each
jurisdiction, and are not necessarily consistent with GAAP
returns.
|
(3)
|
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.
|
(4)
|
Estimated
based on 13-month average.
|
(5)
|
Involves
frozen rates for a determined period, and or allows for sharing of
earnings with customers when returns on equity or rate base exceeds agreed
upon amounts.
|
(6)
|
Involves
regulatory mechanisms that allow us to recover our costs in the event of
unseasonal weather, but are not direct offsets to the potential impacts of
weather and customer consumption on earnings. These mechanisms are
designed to help stabilize operating results by increasing base rate
amounts charged to customers when weather is warmer than normal and
decreasing amounts charged when weather is colder than
normal.
|
(7)
|
Decoupled
and straight-fixed variable rate designs allow for the recovery of fixed
customer service costs separately from assumed natural gas volumes used by
our customers.
|
·
|
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,
and
|
·
|
new
housing starts.
|
Approximate
# of Employees
|
Contract
Expiration Date
|
||||
Elizabethtown
Gas
Utility
Workers Union of America (Local No. 424)
|
160 |
Nov.
2009
|
|||
Virginia Natural
Gas
International
Brotherhood of Electrical Workers (Local No. 50)
|
126 |
May
2010
|
|||
Total
|
286 |
For
the years ended Dec. 31,
|
||||||||||||
In
millions
|
2008
|
2007
|
2006
|
|||||||||
LOCOM
adjustments
|
$ | 24 | $ | - | $ | 6 |
|
Withdrawal
schedule
(in
Bcf)
|
|||||||||||
Salt dome (WACOG
$5.67)
|
Reservoir (WACOG
$5.68)
|
Expected
operating revenues
(in
millions)
|
||||||||||
2009
|
||||||||||||
First
quarter
|
- | 8 | $ | (0.4 | ) | |||||||
Second
quarter
|
- | - | - | |||||||||
Third
quarter
|
1 | 1 | 0.4 | |||||||||
Total
|
1 | 9 | $ | - |
Profit
sharing / fees payments
|
||||||||||||||||
In
millions
|
Expiration
date
|
%
Shared
|
2008
|
2007
|
2006
|
|||||||||||
Virginia
Natural Gas
|
Mar
2009
|
(A)
|
$ | 2 | $ | 7 | $ | 2 | ||||||||
Chattanooga
Gas
|
Mar
2011
|
50%
(B)
|
4 | 2 | 4 | |||||||||||
Elizabethtown
Gas
|
Mar
2011
|
(A)
(B)
|
5 | 6 | 4 | |||||||||||
Atlanta
Gas Light
|
Mar
2012
|
up
to 60% (B)
|
9 | 9 | 6 | |||||||||||
Florida
City Gas
|
Mar
2013
|
50%
|
1 | 1 | - | |||||||||||
Total
|
$ | 21 | $ | 25 | $ | 16 |
(A)
|
Shared
on a tiered structure.
|
(B)
|
Includes
aggregate annual minimum payments of $12
million.
|
For
the year ended December 31,
|
||||||||||||
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Unrealized
gains
|
$ | 7 | $ | 5 | $ | 12 |
·
|
result
in increased costs associated with our
operations
|
·
|
increase
other costs to our business
|
·
|
affect
the demand for natural gas, and
|
·
|
impact
the prices we charge our customers.
|
· | 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,
or
|
·
|
extreme
weather conditions.
|
Name,
age and position with the company
|
Periods
served
|
John W. Somerhalder II,
Age 53 (1)
|
|
Chairman,
President and Chief Executive Officer
|
October
2007 – Present
|
President
and Chief Executive Officer
|
March
2006 – October 2007
|
Ralph Cleveland, Age
46
|
|
Executive
Vice President, Engineering and Operations
|
December
2008 – Present
|
Senior
Vice President, Engineering and Operations
|
February
2005 – December 2008
|
Vice
President, Engineering, Construction and Chief Engineer – Atlanta Gas
Light
|
January
2003 – February 2005
|
Andrew W. Evans, Age
42
|
|
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
|
Henry P. Linginfelter,
Age 48
|
|
Executive
Vice President, Utility Operations
|
June
2007 – Present
|
Senior
Vice President, Mid-Atlantic Operations
|
November
2004– June 2007
|
President,
Virginia Natural Gas.
|
October
2000 – November 2004
|
Kevin P. Madden, Age 56
(2)
|
|
Executive
Vice President, External Affairs
|
November
2005 – Present
|
Executive
Vice President, Distribution and Pipeline Operations
|
April
2002 – November 2005
|
Melanie M. Platt, Age
54
|
|
Senior
Vice President, Human Resources
|
September
2004 – Present
|
Senior
Vice President and Chief Administrative Officer
|
November
2002 – September 2004
|
Douglas N. Schantz, Age
53
|
|
President,
Sequent
|
May
2003 – Present
|
Paul R. Shlanta, Age
51
|
|
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)
|
On
November 5, 2008, Mr. Madden announced his retirement, which is effective
March 1, 2009.
|
ITEM
5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
|
Sales
price of common stock
|
Cash
dividend per common
|
|||||||||||
Quarter
ended:
|
High
|
Low
|
share
|
|||||||||
2008
|
||||||||||||
March
31, 2008
|
$ | 39.13 | $ | 33.45 | $ | 0.42 | ||||||
June
30, 2008
|
36.50 | 33.46 | 0.42 | |||||||||
September
30, 2008
|
35.44 | 30.60 | 0.42 | |||||||||
December
31, 2008
|
32.07 | 24.02 | 0.42 | |||||||||
$ | 1.68 | |||||||||||
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 |
·
|
our
ability to satisfy our obligations under certain financing agreements,
including debt-to-capitalization
covenants
|
·
|
our
ability to satisfy our obligations to any future 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
2008
|
- | $ | - | - | 4,950,951 | |||||||||||
November
2008
|
4,800 | 29.35 | - | 4,950,951 | ||||||||||||
December
2008
|
433 | 34.81 | - | 4,950,951 | ||||||||||||
Total
fourth quarter
|
5,233 | $ | 29.80 | - |
(1)
|
The
total number of shares purchased includes an aggregate of 433 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 purchased
4,800 any shares for such purposes in the fourth quarter of 2008. As of
December 31, 2008, we had purchased a total 312,367 of the 600,000 shares
authorized for purchase, leaving 287,633 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
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
Income
statement data
|
||||||||||||||||||||
Operating
revenues
|
$ | 2,800 | $ | 2,494 | $ | 2,621 | $ | 2,718 | $ | 1,832 | ||||||||||
Cost
of gas
|
1,654 | 1,369 | 1,482 | 1,626 | 995 | |||||||||||||||
Operating margin
(1)
|
1,146 | 1,125 | 1,139 | 1,092 | 837 | |||||||||||||||
Operating
expenses
|
||||||||||||||||||||
Operation
and maintenance
|
472 | 451 | 473 | 477 | 377 | |||||||||||||||
Depreciation
and amortization
|
152 | 144 | 138 | 133 | 99 | |||||||||||||||
Taxes
other than income taxes
|
44 | 41 | 40 | 40 | 29 | |||||||||||||||
Total
operating expenses
|
668 | 636 | 651 | 650 | 505 | |||||||||||||||
Operating
income
|
478 | 489 | 488 | 442 | 332 | |||||||||||||||
Other
income (expense)
|
6 | 4 | (1 | ) | (1 | ) | - | |||||||||||||
Minority
interest
|
(20 | ) | (30 | ) | (23 | ) | (22 | ) | (18 | ) | ||||||||||
Earnings
before interest and taxes (EBIT) (1)
|
464 | 463 | 464 | 419 | 314 | |||||||||||||||
Interest
expense
|
115 | 125 | 123 | 109 | 71 | |||||||||||||||
Earnings
before income taxes
|
349 | 338 | 341 | 310 | 243 | |||||||||||||||
Income
taxes
|
132 | 127 | 129 | 117 | 90 | |||||||||||||||
Net
income
|
$ | 217 | $ | 211 | $ | 212 | $ | 193 | $ | 153 | ||||||||||
Common
stock data
|
||||||||||||||||||||
Weighted
average shares outstanding basic
|
76.3 | 77.1 | 77.6 | 77.3 | 66.3 | |||||||||||||||
Weighted
average shares outstanding diluted
|
76.6 | 77.4 | 78.0 | 77.8 | 67.0 | |||||||||||||||
Total
shares outstanding (2)
|
76.9 | 76.4 | 77.7 | 77.8 | 76.7 | |||||||||||||||
Average
daily trading volumes
|
0.59 | 0.50 | 0.37 | 0.32 | 0.23 | |||||||||||||||
Earnings
per share - basic
|
$ | 2.85 | $ | 2.74 | $ | 2.73 | $ | 2.50 | $ | 2.30 | ||||||||||
Earnings
per share - diluted
|
$ | 2.84 | $ | 2.72 | $ | 2.72 | $ | 2.48 | $ | 2.28 | ||||||||||
Dividends
declared per share
|
$ | 1.68 | $ | 1.64 | $ | 1.48 | $ | 1.30 | $ | 1.15 | ||||||||||
Dividend
payout ratio
|
59 | % | 60 | % | 54 | % | 52 | % | 50 | % | ||||||||||
Dividend
yield (3)
|
5.4 | % | 4.4 | % | 3.8 | % | 3.7 | % | 3.5 | % | ||||||||||
Book
value per share (4)
|
$ | 21.48 | $ | 21.74 | $ | 20.72 | $ | 19.27 | $ | 18.04 | ||||||||||
Price-earnings
ratio (5)
|
11.0 | 13.7 | 14.3 | 13.9 | 14.5 | |||||||||||||||
Stock
price market range
|
$ | 24.02-$39.13 | $ | 35.24-$44.67 | $ | 34.40-$40.09 | $ | 32.00-$39.32 | $ | 26.50-$33.65 | ||||||||||
Market
value per share (6)
|
$ | 31.35 | $ | 37.64 | $ | 38.91 | $ | 34.81 | $ | 33.24 | ||||||||||
Market
value (2)
|
$ | 2,411 | $ | 2,876 | $ | 3,023 | $ | 2,708 | $ | 2,551 | ||||||||||
Balance sheet data (2)
|
||||||||||||||||||||
Total
assets
|
$ | 6,710 | $ | 6,258 | $ | 6,123 | $ | 6,310 | $ | 5,637 | ||||||||||
Property,
plant and equipment – net
|
3,816 | 3,566 | 3,436 | 3,333 | 3,178 | |||||||||||||||
Working
capital
|
59 | 163 | 156 | 73 | (20 | ) | ||||||||||||||
Total
debt
|
2,541 | 2,255 | 2,161 | 2,137 | 1,957 | |||||||||||||||
Common
shareholders’ equity
|
1,652 | 1,661 | 1,609 | 1,499 | 1,385 | |||||||||||||||
Cash
flow data
|
||||||||||||||||||||
Net
cash provided by operating activities
|
$ | 227 | $ | 377 | $ | 351 | $ | 80 | $ | 287 | ||||||||||
Property,
plant and equipment expenditures
|
372 | 259 | 253 | 267 | 264 | |||||||||||||||
Net
borrowings and (payments) of short-term debt
|
286 | 52 | 6 | 188 | (480 | ) | ||||||||||||||
Financial ratios (2)
|
||||||||||||||||||||
Total
debt
|
61 | % | 58 | % | 57 | % | 59 | % | 59 | % | ||||||||||
Common
shareholders’ equity
|
39 | % | 42 | % | 43 | % | 41 | % | 41 | % | ||||||||||
Total
|
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Return
on average common shareholders’ equity
|
13.1 | % | 12.9 | % | 13.6 | % | 13.4 | % | 13.1 | % | ||||||||||
(1)
|
These
are non-GAAP measurements. A reconciliation of operating margin and EBIT
to our operating income, earnings before income taxes
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)
|
Dividends
declared per share divided by market value per
share.
|
(4)
|
Common
shareholders’ equity divided by total outstanding common shares as of the
last day of the fiscal period.
|
(5)
|
Market
value per share divided by basic earnings per
share.
|
(6)
|
Closing
price of common stock on the New York Stock Exchange as of the last
trading day of the fiscal period.
|
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Residential
|
$ | 1,194 | $ | 1,143 | $ | 1,127 | ||||||
Commercial
|
500 | 500 | 460 | |||||||||
Transportation
|
482 | 401 | 434 | |||||||||
Industrial
|
280 | 250 | 310 | |||||||||
Other
|
344 | 200 | 290 | |||||||||
Total
operating revenues
|
$ | 2,800 | $ | 2,494 | $ | 2,621 |
In
millions, except per share amounts
|
2008
|
2007
|
2006
|
|||||||||
Operating
revenues
|
$ | 2,800 | $ | 2,494 | $ | 2,621 | ||||||
Cost
of gas
|
1,654 | 1,369 | 1,482 | |||||||||
Operating
margin
|
1,146 | 1,125 | 1,139 | |||||||||
Operating
expenses
|
||||||||||||
Operation
and maintenance
|
472 | 451 | 473 | |||||||||
Depreciation
and amortization
|
152 | 144 | 138 | |||||||||
Taxes
other than income
|
44 | 41 | 40 | |||||||||
Total
operating expenses
|
668 | 636 | 651 | |||||||||
Operating
income
|
478 | 489 | 488 | |||||||||
Other
income (expense)
|
6 | 4 | (1 | ) | ||||||||
Minority
interest
|
(20 | ) | (30 | ) | (23 | ) | ||||||
EBIT
|
464 | 463 | 464 | |||||||||
Interest
expense
|
115 | 125 | 123 | |||||||||
Earnings
before income taxes
|
349 | 338 | 341 | |||||||||
Income
taxes
|
132 | 127 | 129 | |||||||||
Net
income
|
$ | 217 | $ | 211 | $ | 212 | ||||||
Earnings
per common share:
|
||||||||||||
Basic
|
$ | 2.85 | $ | 2.74 | $ | 2.73 | ||||||
Diluted
|
$ | 2.84 | $ | 2.72 | $ | 2.72 | ||||||
Weighted
average number of common shares outstanding:
|
||||||||||||
Basic
|
76.3 | 77.1 | 77.6 | |||||||||
Diluted
|
76.6 | 77.4 | 78.0 |
Weather | |||||||||||||||||||||||||||||||||||||
Heating degree days (1) |
2008
vs.
|
2007
vs.
|
2008
vs.
|
2007 vs. |
2006
vs.
|
|
|||||||||||||||||||||||||||||||
Year
ended December 31,
|
2007
|
2006
|
normal
|
normal
|
normal
|
|
|||||||||||||||||||||||||||||||
Normal
|
2008
|
2007
|
2006
|
colder
(warmer)
|
colder
(warmer)
|
colder
(warmer)
|
colder
(warmer)
|
colder
(warmer)
|
|
||||||||||||||||||||||||||||
Florida
|
496 | 416 | 326 | 468 | 28 | % | (30 | )% | (16 | )% | (34 | )% | (6 | )% | |||||||||||||||||||||||
Georgia
|
2,608 | 2,746 | 2,366 | 2,455 | 16 | % | (4 | )% | 5 | % | (9 | )% | (6 | )% | |||||||||||||||||||||||
Maryland
|
4,705 | 4,521 | 4,621 | 4,205 | (2 | )% | 10 | % | (4 | )% | (2 | )% | (11 | )% | |||||||||||||||||||||||
New
Jersey
|
4,654 | 4,647 | 4,777 | 4,074 | (3 | )% | 17 | % | - | 3 | % | (12 | )% | ||||||||||||||||||||||||
Tennessee
|
2,991 | 3,179 | 2,722 | 2,892 | 17 | % | (6 | )% | 6 | % | (9 | )% | (3 | )% | |||||||||||||||||||||||
Virginia
|
3,151 | 3,031 | 3,077 | 2,870 | (1 | )% | 7 | % | (4 | )% | (2 | )% | (9 | )% |
2008
vs.
|
2007
vs.
|
2008
vs.
|
2007 vs. |
2006
vs.
|
|
||||||||||||||||||||||||||||||||
Quarter
ended December 31,
|
2007
|
2006
|
normal
|
normal
|
normal
|
|
|||||||||||||||||||||||||||||||
Normal
|
2008
|
2007
|
2006
|
colder
(warmer)
|
colder
(warmer)
|
colder
(warmer)
|
colder
(warmer)
|
colder
(warmer)
|
|
||||||||||||||||||||||||||||
Florida
|
160 | 201 | 45 | 111 | 347 | % | (59 | )% | 26 | % | (72 | )% | (31 | )% | |||||||||||||||||||||||
Georgia
|
1,021 | 1,092 | 877 | 955 | 25 | % | (8 | )% | 7 | % | (14 | )% | (6 | )% | |||||||||||||||||||||||
Maryland
|
1,673 | 1,693 | 1,558 | 1,493 | 9 | % | 4 | % | 1 | % | (7 | )% | (11 | )% | |||||||||||||||||||||||
New
Jersey
|
1,623 | 1,729 | 1,605 | 1,372 | 8 | % | 17 | % | 7 | % | (1 | )% | (15 | )% | |||||||||||||||||||||||
Tennessee
|
1,184 | 1,291 | 969 | 1,193 | 33 | % | (19 | )% | 9 | % | (18 | )% | 1 | % | |||||||||||||||||||||||
Virginia
|
1,096 | 1,151 | 965 | 993 | 19 | % | (3 | )% | 5 | % | (12 | )% | (9 | )% | |||||||||||||||||||||||
(1) Obtained
from the National Oceanic and Atmospheric Administration, National
Climatic Data Center. Normal represents the ten-year averages from January
1999 to December
2008.
|
Customers
|
Year
ended December 31,
|
2008
vs. 2007
|
2007
vs. 2006
|
|||||||||||||||||
2008
|
2007
|
2006
|
%
change
|
%
change
|
||||||||||||||||
Distribution
Operations
|
||||||||||||||||||||
Average
end-use customers (in
thousands)
|
||||||||||||||||||||
Atlanta
Gas Light
|
1,557 | 1,559 | 1,546 | (0.1 | )% | 0.8 | % | |||||||||||||
Chattanooga
Gas
|
62 | 61 | 61 | 1.6 | - | |||||||||||||||
Elizabethtown
Gas
|
273 | 272 | 269 | 0.4 | 1.1 | |||||||||||||||
Elkton
Gas
|
6 | 6 | 6 | - | - | |||||||||||||||
Florida
City Gas
|
104 | 104 | 104 | - | - | |||||||||||||||
Virginia
Natural Gas
|
271 | 269 | 264 | 0.7 | 1.9 | |||||||||||||||
Total
|
2,273 | 2,271 | 2,250 | 0.1 | % | 0.9 | % | |||||||||||||
Operation
and maintenance expenses per customer
|
$ | 145 | $ | 145 | $ | 156 | - | (7 | )% | |||||||||||
EBIT
per customer
|
$ | 145 | $ | 149 | $ | 138 | (3 | )% | 8 | % | ||||||||||
Retail
Energy Operations
|
||||||||||||||||||||
Average
customers (in
thousands)
|
526 | 540 | 533 | (3 | )% | 1 | % | |||||||||||||
Market
share in Georgia
|
34 | % | 35 | % | 35 | % | (3 | )% | - |
Volumes
In
billion cubic feet (Bcf)
|
Year
ended December 31,
|
2008
vs. 2007
|
2007
vs. 2006
|
|||||||||||||||||
2008
|
2007
|
2006
|
%
change
|
%
change
|
||||||||||||||||
Distribution
Operations
|
||||||||||||||||||||
Firm
|
219 | 211 | 199 | 4 | % | 6 | % | |||||||||||||
Interruptible
|
104 | 108 | 117 | (4 | )% | (8 | ) | |||||||||||||
Total
|
323 | 319 | 316 | 1 | % | 1 | % | |||||||||||||
Retail
Energy Operations
|
||||||||||||||||||||
Georgia
firm
|
41 | 39 | 37 | 5 | % | 5 | % | |||||||||||||
Ohio
and Florida
|
7 | 5 | 1 | 40 | % | 400 | % | |||||||||||||
Wholesale
Services
|
||||||||||||||||||||
Daily
physical sales (Bcf / day)
|
2.60 | 2.35 | 2.20 | 11 | % | 7 | % |
In
millions
|
Operating
revenues
|
Operating
margin (1)
|
Operating
expenses
|
EBIT
(1)
|
|||||||||||||
2008
|
|||||||||||||||||
Distribution
operations
|
$ | 1,768 | $ | 818 | $ | 493 | $ | 329 | |||||||||
Retail
energy operations
|
987 | 149 | 73 | 57 | |||||||||||||
Wholesale
services
|
170 | 122 | 62 | 60 | |||||||||||||
Energy
investments
|
55 | 50 | 31 | 19 | |||||||||||||
Corporate
(2)
|
(180 | ) | 7 | 9 | (1 | ) | |||||||||||
Consolidated
|
$ | 2,800 | $ | 1,146 | $ | 668 | $ | 464 | |||||||||
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 |
|
(1)
These are non-GAAP measurements. A reconciliation of operating margin,
earnings before income taxes and EBIT to our operating income
and
net income is contained in “Results of Operations”
herein.
|
|
(2)
Includes intercompany eliminations
|
In
millions
|
2008
|
2007
|
|||||||
Operating
margin for prior year
|
$ | 820 | $ | 807 | |||||
(Decreased)
increased customer growth and use of natural gas
|
(4 | ) | 8 | ||||||
Higher
PRP revenues at Atlanta Gas Light
|
6 | 2 | |||||||
Base
rate increase at Chattanooga Gas
|
- | 2 | |||||||
Other
|
(4 | ) | 1 | ||||||
Operating
margin for year
|
$ | 818 | $ | 820 |
In
millions
|
2008
|
2007
|
|||||||
Operating
margin for prior year
|
$ | 188 | $ | 156 | |||||
Inventory
LOCOM
|
(24 | ) | 6 | ||||||
(Decreased)
increased contributions from management and optimization of storage and
transportation assets, and from retail price spreads
|
(9 | ) | 12 | ||||||
(Decreased)
increased average number of customers
|
(8 | ) | 2 | ||||||
Pricing
settlement with the Georgia Commission
|
(3 | ) | - | ||||||
Increased
operating margins in Ohio and Florida
|
2 | 3 | |||||||
Increased
customer use of natural gas
|
1 | 8 | |||||||
Increased
late payment fees
|
- | 2 | |||||||
Other
|
2 | (1 | ) | ||||||
Operating
margin for year
|
$ | 149 | $ | 188 |
In
millions
|
2008
|
2007
|
|||||||
Operating
margin for prior year
|
$ | 77 | $ | 139 | |||||
Increased
(decreased) commercial activity
|
25 | (46 | ) | ||||||
Increased
(decreased) hedge gains
|
35 | (36 | ) | ||||||
Inventory
LOCOM, net of hedging recoveries
|
(15 | ) | 20 | ||||||
Operating
margin for year
|
$ | 122 | $ | 77 |
In
millions
|
2008
|
2007
|
|||||||
Operating
margin for prior year
|
$ | 40 | $ | 36 | |||||
Increased
customers and expansion projects at AGL Networks
|
7 | 2 | |||||||
Increased
revenues at Jefferson Island
|
3 | 2 | |||||||
Operating
margin for year
|
$ | 50 | $ | 40 |
In
millions
|
2008
|
2007
|
||||||||
Operating
expenses for prior year
|
$ | 636 | $ | 651 | ||||||
Increased
(decreased) incentive compensation costs at distribution
operations
|
11 | (14 | ) | |||||||
Increased
(decreased) incentive compensation costs at wholesale services due to
higher (lower) operating margin
|
6 | (13 | ) | |||||||
Increased
(decreased) bad debt expense at retail energy operations
|
3 | (3 | ) | |||||||
Increased
incentive compensation costs at retail energy operations due to growth and
improved operations
|
- | 3 | ||||||||
Increased
bad debt expense at distribution operations
|
5 | - | ||||||||
Increased
depreciation and amortization
|
8 | 6 | ||||||||
Increased
payroll and other operating costs at wholesale services due to continued
expansion
|
13 | 7 | ||||||||
(Decreased)
increased costs at retail energy operations from customer care, marketing
and payroll
|
(5 | ) | 5 | |||||||
Increased
(decreased) costs at energy investments due to expansion costs at AGL
Networks, business development costs and depreciation and legal expenses
at Jefferson Island
|
6 | (1 | ) | |||||||
Other,
net primarily at distribution operations due to pension, outside services
and reduction in marketing and customer service expenses
|
(15 | ) | (5 | ) | ||||||
Operating
expenses for year
|
$ | 668 | $ | 636 |
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Interest
expense
|
$ | 115 | $ | 125 | $ | 123 | ||||||
Average
debt outstanding (1)
|
$ | 2,156 | $ | 1,967 | $ | 2,023 | ||||||
Average
rate (2)
|
5.3 | % | 6.4 | % | 6.1 | % |
(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
|
2008
|
2007
|
2006
|
|||||||||
Net
cash provided by (used in):
|
||||||||||||
Operating
activities
|
$ | 227 | $ | 377 | $ | 351 | ||||||
Investing
activities
|
(372 | ) | (253 | ) | (248 | ) | ||||||
Financing
activities
|
142 | (122 | ) | (118 | ) | |||||||
Net
(decrease) increase in cash and cash equivalents
|
$ | (3 | ) | $ | 2 | $ | (15 | ) |
·
|
Base business – new
construction and infrastructure improvements at our distribution
operations segment
|
·
|
Natural gas storage –
salt-dome cavern expansions at Golden Triangle Storage 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
Georgia system
|
·
|
Magnolia project
–pipelines acquired from Southern Natural Gas connecting our Georgia
service territory to the Elba Island LNG
facility
|
·
|
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
|
December
31, 2008
|
December
31, 2007
|
|||||||||||||||||
Short-term
debt
|
$ | 866 | 21 | % | $ | 580 | 15 | % | |||||||||||
Long-term
debt
|
1,675 | 40 | 1,675 | 43 | |||||||||||||||
Total
debt
|
2,541 | 61 | 2,255 | 58 | |||||||||||||||
Common
shareholders’ equity
|
1,652 | 39 | 1,661 | 42 | |||||||||||||||
Total
capitalization
|
$ | 4,193 | 100 | % | $ | 3,916 | 100 | % |
In
millions
|
Capacity
|
Outstanding
|
||||||
Credit
Facilities
|
$ | 1,140 | $ | 773 | ||||
SouthStar
line of credit
|
75 | 75 | ||||||
Sequent
lines of credit
|
30 | 17 | ||||||
Total
|
$ | 1,245 | $ | 865 |
·
|
In
June 2008, we refinanced $122 million of our gas facility revenue bonds,
$47 million due October 2022, $20 million due October 2024 and $55 million
due June 2032. There was no change to the maturity dates of these bonds.
The $55 million bond has an interest rate that resets daily and the $47
million and $20 million bonds had a 35-day auction period where the
interest rate adjusted every 35 days. Both the bonds with principal
amounts of $47 million and $55 million now have interest rates that reset
daily and the bond with a principal amount of $20 million has an interest
rate that resets weekly. The interest rates at December 31, 2008, ranged
from 0.7% to 1.10%.
|
·
|
In
September 2008, we refinanced $39 million of our gas facility revenue
bonds due June 2026.The bonds had a 35-day auction period where the
interest rate adjusted every 35 days now they have interest rates that
reset daily. The maturity date of these bonds remains June 2026. The
interest rate at December 31, 2008, was
1.1%.
|
·
|
In
December 2007 and June 2006, AGL Capital issued $125 million and $175
million of 6.375% senior notes. The proceeds of the note issuances, equal
to approximately $296 million, were used to pay down short-term
indebtedness incurred under our commercial paper
program.
|
·
|
In
July 2007, we used the proceeds from the sale of commercial paper to pay
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
May 2006, we used the proceeds from the sale of commercial paper to pay
AGL Capital Trust II the $150 million of junior subordinated debentures
and to pay a $5 million note representing our common securities interest
in AGL Capital Trust II.
|
·
|
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.
|
2010
&
|
2012
&
|
2014
&
|
||||||||||||||||||
In
millions
|
Total
|
2009
|
2011
|
2013
|
thereafter
|
|||||||||||||||
Recorded
contractual obligations:
|
||||||||||||||||||||
Long-term
debt
|
$ | 1,675 | $ | - | $ | 302 | $ | 242 | $ | 1,131 | ||||||||||
Short-term
debt
|
866 | 866 | - | - | - | |||||||||||||||
Environmental remediation
liabilities (1)
|
106 | 17 | 41 | 38 | 10 | |||||||||||||||
PRP costs
(1)
|
189 | 49 | 91 | 49 | - | |||||||||||||||
Total
|
$ | 2,836 | $ | 932 | $ | 434 | $ | 329 | $ | 1,141 |
Unrecorded
contractual obligations and commitments (2):
|
||||||||||||||||||||
Interest
charges
(3)
|
$ | 975 | $ | 94 | $ | 168 | $ | 137 | $ | 576 | ||||||||||
Pipeline
charges, storage capacity and gas supply (4)
|
1,713 | 491 | 573 | 299 | 350 | |||||||||||||||
Operating
leases
|
137 | 30 | 45 | 25 | 37 | |||||||||||||||
Standby
letters of credit, performance / surety bonds
|
52 | 48 | 3 | 1 | - | |||||||||||||||
Asset
management agreements
(5)
|
32 | 12 | 19 | 1 | - | |||||||||||||||
Pension contributions | 7 | 7 | - | - | - | |||||||||||||||
Total
|
$ | 2,916 | $ | 682 | $ | 808 | $ | 463 | $ | 963 |
(1)
|
Includes
charges recoverable through rate rider
mechanisms.
|
(2)
|
In
accordance with GAAP, these items are not reflected in our consolidated
balance sheets.
|
(3)
|
Floating
rate debt is based on the interest rate as of December 31, 2008, and the
maturity of the underlying debt instrument. As of December 31, 2008,
we
have $35 million of accrued interest on our consolidated balance sheet
that will be paid in 2009.
|
(4)
|
Charges
recoverable through a natural gas cost recovery mechanism or alternatively
billed to Marketers, and includes demand charges associated with
Sequent.
|
(5)
|
Represent
fixed-fee minimum payments for Sequent’s affiliated asset
management.
|
·
|
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 | |||||||||||
Actuarial
assumptions
|
Percentage-point
change in assumption
|
Increase
(decrease) in ABO
|
Increase
(decrease) in cost
|
|||||||||
Expected
long-term return on plan assets
|
+/- 1 | % | $ | - / - | $ | (3) / 3 | ||||||
Discount
rate
|
+/- 1 | % | (41) / 46 | (4) / 4 |
In
millions
|
||||||||||||
Actuarial
assumptions
|
Percentage-point
change in assumption
|
Increase
(decrease) in ABO
|
Pension
Benefits Increase (decrease) in cost
|
|||||||||
Expected
long-term return on plan assets
|
+/- 1 | % | $ | - / - | $ | (1) / 1 | ||||||
Discount
rate
|
+/- 1 | % | (6) / 7 | - / (-) |
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Net
fair value of contracts outstanding at beginning of period
|
$ | 10 | $ | 17 | $ | 3 | ||||||
Contracts
realized or otherwise settled during period
|
(10 | ) | (16 | ) | (3 | ) | ||||||
Change
in net fair value of contracts
|
(17 | ) | 9 | 17 | ||||||||
Net
fair value of contracts outstanding at end of period
|
(17 | ) | 10 | 17 | ||||||||
Netting
of cash collateral
|
31 | 3 | (5 | ) | ||||||||
Cash
collateral and net fair value of contracts outstanding at end of
period
|
$ | 14 | $ | 13 | $ | 12 |
In
millions
|
Prices
actively quoted (1)
|
Prices
provided by other external sources (2)
|
||||||
Mature
through 2009
|
$ | (24 | ) | $ | 2 | |||
Mature
through 2010
|
5 | - | ||||||
Total
net fair value
|
$ | (19 | ) | $ | 2 |
(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. Additionally, includes values associated with basis transactions
that represent 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
|
2008
|
2007
|
||||||
Asset
|
$ | 17 | $ | 11 | ||||
Liability
|
12 | 4 |
Cash
collateral and fair values at December 31,
|
||||||||
In
millions
|
2008
|
2007
|
||||||
Asset
|
$ | 16 | $ | 13 | ||||
Liability
|
2 | - |
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Net
fair value of contracts outstanding at beginning of period
|
$ | 57 | $ | 119 | $ | (13 | ) | |||||
Contracts
realized or otherwise settled during period
|
(49 | ) | (102 | ) | 17 | |||||||
Change
in net fair value of contracts
|
74 | 40 | 115 | |||||||||
Net
fair value of contracts outstanding at end of period
|
82 | 57 | 119 | |||||||||
Netting
of cash collateral
|
97 | (9 | ) | (19 | ) | |||||||
Cash
collateral and net fair value of contracts outstanding at end of
period
|
$ | 179 | $ | 48 | $ | 100 |
In
millions
|
Prices
actively quoted (1)
|
Prices
provided by other external sources (2)
|
||||||
Mature
through 2009
|
$ | (26 | ) | $ | 100 | |||
Mature
2010 – 2011
|
(19 | ) | 21 | |||||
Mature
2012 - 2014
|
- | 6 | ||||||
Total
net fair value
|
$ | (45 | ) | $ | 127 |
(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
|
2008
|
2007
|
||||||
Asset
|
$ | 96 | $ | 63 | ||||
Liability
|
45 | 16 |
Cash
collateral and fair values at December 31,
|
||||||||
In
millions
|
2008
|
2007
|
||||||
Asset
|
$ | 206 | $ | 61 | ||||
Liability
|
27 | 13 |
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Period
end
|
$ | 2.5 | $ | 1.2 | $ | 1.3 | ||||||
12-month
average
|
1.8 | 1.3 | 1.2 | |||||||||
High
|
3.1 | 2.3 | 2.5 | |||||||||
Low
|
0.8 | 0.7 | 0.7 |
As
of Dec. 31,
|
||||||||
Gross
receivables
|
||||||||
In
millions
|
2008
|
2007
|
||||||
Netting
agreements in place:
|
||||||||
Counterparty
is investment grade
|
$ | 398 | $ | 437 | ||||
Counterparty
is non-investment grade
|
15 | 24 | ||||||
Counterparty
has no external rating
|
129 | 134 | ||||||
No
netting agreements in place:
|
||||||||
Counterparty
is investment grade
|
7 | 3 | ||||||
Amount
recorded on balance sheet
|
$ | 549 | $ | 598 |
As of Dec. 31, | ||||||||
Gross payables | ||||||||
In
millions
|
2008
|
2007
|
||||||
Netting
agreements in place:
|
||||||||
Counterparty
is investment grade
|
$ | 266 | $ | 356 | ||||
Counterparty
is non-investment grade
|
41 | 18 | ||||||
Counterparty
has no external rating
|
228 | 204 | ||||||
No
netting agreements in place:
|
||||||||
Counterparty
is investment grade
|
4 | - | ||||||
Amount
recorded on balance sheet
|
$ | 539 | $ | 578 |
As
of
|
||||||||
In
millions
|
December
31, 2008
|
December
31, 2007
|
||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 16 | $ | 19 | ||||
Receivables
|
||||||||
Energy
marketing
|
549 | 598 | ||||||
Gas
|
264 | 213 | ||||||
Unbilled
revenues
|
181 | 179 | ||||||
Other
|
27 | 13 | ||||||
Less
allowance for uncollectible accounts
|
(16 | ) | (14 | ) | ||||
Total
receivables
|
1,005 | 989 | ||||||
Inventories
|
||||||||
Natural
gas stored underground
|
629 | 521 | ||||||
Other
|
34 | 30 | ||||||
Total
inventories
|
663 | 551 | ||||||
Energy
marketing and risk management assets
|
207 | 69 | ||||||
Unrecovered
PRP costs – current portion
|
41 | 31 | ||||||
Unrecovered
ERC – current portion
|
18 | 23 | ||||||
Other
current assets
|
92 | 115 | ||||||
Total
current assets
|
2,042 | 1,797 | ||||||
Property,
plant and equipment
|
||||||||
Property,
plant and equipment
|
5,500 | 5,177 | ||||||
Less
accumulated depreciation
|
1,684 | 1,611 | ||||||
Property,
plant and equipment – net
|
3,816 | 3,566 | ||||||
Deferred
debits and other assets
|
||||||||
Goodwill
|
418 | 420 | ||||||
Unrecovered
PRP costs
|
196 | 254 | ||||||
Unrecovered
ERC
|
125 | 135 | ||||||
Other
|
113 | 86 | ||||||
Total
deferred debits and other assets
|
852 | 895 | ||||||
Total
assets
|
$ | 6,710 | $ | 6,258 |
As
of
|
||||||||
In
millions, except share amounts
|
December
31, 2008
|
December
31, 2007
|
||||||
Current
liabilities
|
||||||||
Short-term
debt
|
$ | 866 | $ | 580 | ||||
Energy
marketing trade payable
|
539 | 578 | ||||||
Accounts
payable – trade
|
202 | 172 | ||||||
Customer
deposits
|
50 | 35 | ||||||
Accrued
PRP costs – current portion
|
49 | 55 | ||||||
Energy
marketing and risk management liabilities – current
portion
|
50 | 16 | ||||||
Accrued
wages and salaries
|
42 | 24 | ||||||
Accrued
taxes
|
36 | 23 | ||||||
Accrued
interest
|
35 | 39 | ||||||
Deferred
natural gas costs
|
25 | 28 | ||||||
Accrued
environmental remediation liabilities – current portion
|
17 | 10 | ||||||
Other
current liabilities
|
72 | 74 | ||||||
Total
current liabilities
|
1,983 | 1,634 | ||||||
Accumulated
deferred income taxes
|
571 | 566 | ||||||
Long-term liabilities
and other deferred
credits (excluding long-term debt)
|
||||||||
Accrued
pension obligations
|
199 | 43 | ||||||
Accumulated
removal costs
|
178 | 169 | ||||||
Accrued
PRP costs
|
140 | 190 | ||||||
Accrued
environmental remediation liabilities
|
89 | 97 | ||||||
Accrued
postretirement benefit costs
|
46 | 24 | ||||||
Other
long-term liabilities and other deferred credits
|
145 | 152 | ||||||
Total
long-term liabilities and other deferred credits (excluding long-term
debt)
|
797 | 675 | ||||||
Commitments and contingencies
(see Note 7)
|
||||||||
Minority
interest
|
32 | 47 | ||||||
Capitalization
|
||||||||
Long-term
debt
|
1,675 | 1,675 | ||||||
Common
shareholders’ equity, $5 par value; 750 million shares authorized; 76.9
million and 76.4 million shares outstanding at December 31, 2008 and
2007
|
1,652 | 1,661 | ||||||
Total
capitalization
|
3,327 | 3,336 | ||||||
Total
liabilities and capitalization
|
$ | 6,710 | $ | 6,258 |
Years
ended December 31,
|
||||||||||||
In
millions, except per share amounts
|
2008
|
2007
|
2006
|
|||||||||
Operating
revenues
|
$ | 2,800 | $ | 2,494 | $ | 2,621 | ||||||
Operating
expenses
|
||||||||||||
Cost
of gas
|
1,654 | 1,369 | 1,482 | |||||||||
Operation
and maintenance
|
472 | 451 | 473 | |||||||||
Depreciation
and amortization
|
152 | 144 | 138 | |||||||||
Taxes
other than income taxes
|
44 | 41 | 40 | |||||||||
Total
operating expenses
|
2,322 | 2,005 | 2,133 | |||||||||
Operating
income
|
478 | 489 | 488 | |||||||||
Other
income (expenses)
|
6 | 4 | (1 | ) | ||||||||
Minority
interest
|
(20 | ) | (30 | ) | (23 | ) | ||||||
Interest
expense, net
|
(115 | ) | (125 | ) | (123 | ) | ||||||
Earnings
before income taxes
|
349 | 338 | 341 | |||||||||
Income
taxes
|
132 | 127 | 129 | |||||||||
Net
income
|
$ | 217 | $ | 211 | $ | 212 | ||||||
Per
common share data
|
||||||||||||
Basic
earnings per common share
|
$ | 2.85 | $ | 2.74 | $ | 2.73 | ||||||
Diluted
earnings per common share
|
$ | 2.84 | $ | 2.72 | $ | 2.72 | ||||||
Cash
dividends declared per common share
|
$ | 1.68 | $ | 1.64 | $ | 1.48 | ||||||
Weighted
average number of common shares outstanding
|
||||||||||||
Basic
|
76.3 | 77.1 | 77.6 | |||||||||
Diluted
|
76.6 | 77.4 | 78.0 |
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, 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
loss 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 | |||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
- | - | - | 217 | - | - | 217 | |||||||||||||||||||||
OCI
- loss resulting from unfunded pension and postretirement obligation (net
of tax of $73)
|
- | - | - | - | (111 | ) | - | (111 | ) | |||||||||||||||||||
Unrealized
loss from hedging activities (net of tax of $6)
|
- | - | - | - | (10 | ) | - | (10 | ) | |||||||||||||||||||
Total
comprehensive income
|
96 | |||||||||||||||||||||||||||
Dividends
on common stock ($1.68 per share)
|
- | - | - | (128 | ) | - | 4 | (124 | ) | |||||||||||||||||||
Issuance
of treasury shares
|
0.5 | - | (1 | ) | (6 | ) | - | 16 | 9 | |||||||||||||||||||
Stock-based
compensation expense (net of tax of $1)
|
- | - | 10 | - | - | - | 10 | |||||||||||||||||||||
Balance
as of December 31, 2008
|
76.9 | $ | 390 | $ | 676 | $ | 763 | $ | (134 | ) | $ | (43 | ) | $ | 1,652 |
See
Notes to Consolidated Financial
Statements.
|
Years
ended December 31,
|
||||||||||||
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Cash
flows from operating activities
|
||||||||||||
Net
income
|
$ | 217 | $ | 211 | $ | 212 | ||||||
Adjustments
to reconcile net income to net cash flow provided by operating
activities
|
||||||||||||
Depreciation
and amortization
|
152 | 144 | 138 | |||||||||
Deferred
income taxes
|
89 | 30 | 133 | |||||||||
Minority
interest
|
20 | 30 | 23 | |||||||||
Change
in energy marketing and risk management assets and
liabilities
|
(129 | ) | 74 | (112 | ) | |||||||
Changes
in certain assets and liabilities
|
||||||||||||
Trade
payables
|
30 | (35 | ) | (53 | ) | |||||||
Accrued
expenses
|
26 | (34 | ) | 15 | ||||||||
Energy
marketing receivables and energy marketing trade payables,
net
|
10 | (26 | ) | (95 | ) | |||||||
Gas,
unbilled and other receivables
|
(65 | ) | (15 | ) | 170 | |||||||
Inventories
|
(112 | ) | 46 | (54 | ) | |||||||
Other
– net
|
(11 | ) | (48 | ) | (26 | ) | ||||||
Net
cash flow provided by operating activities
|
227 | 377 | 351 | |||||||||
Cash
flows from investing activities
|
||||||||||||
Expenditures
for property, plant and equipment
|
(372 | ) | (259 | ) | (253 | ) | ||||||
Other
|
- | 6 | 5 | |||||||||
Net
cash flow used in investing activities
|
(372 | ) | (253 | ) | (248 | ) | ||||||
Cash
flows from financing activities
|
||||||||||||
Net
payments and borrowings of short-term debt
|
286 | 52 | 6 | |||||||||
Issuances
of variable rate gas facility revenue bonds
|
161 | - | - | |||||||||
Issuance
of treasury shares
|
9 | 16 | 14 | |||||||||
Distribution
to minority interest
|
(30 | ) | (23 | ) | (22 | ) | ||||||
Dividends
paid on common shares
|
(124 | ) | (123 | ) | (111 | ) | ||||||
Payments
of gas facility revenue bonds
|
(161 | ) | - | - | ||||||||
Issuances
of senior notes
|
- | 125 | 175 | |||||||||
Payments
of medium-term notes
|
- | (11 | ) | - | ||||||||
Payments
of trust preferred securities
|
- | (75 | ) | (150 | ) | |||||||
Purchase
of treasury shares
|
- | (80 | ) | (38 | ) | |||||||
Other
|
1 | (3 | ) | 8 | ||||||||
Net
cash flow provided by (used in) financing activities
|
142 | (122 | ) | (118 | ) | |||||||
Net
(decrease) increase in cash and cash equivalents
|
(3 | ) | 2 | (15 | ) | |||||||
Cash
and cash equivalents at beginning of period
|
19 | 17 | 32 | |||||||||
Cash
and cash equivalents at end of period
|
$ | 16 | $ | 19 | $ | 17 | ||||||
Cash
paid during the period for
|
||||||||||||
Interest
|
$ | 115 | $ | 127 | $ | 109 | ||||||
Income
taxes
|
27 | 118 | 37 |
In
millions
|
2008
|
2007 |
|
||||||
Transmission
and distribution
|
$ | 4,344 | $ | 4,193 | |||||
Storage
|
290 | 285 | |||||||
Other
|
543 | 509 | |||||||
Construction
work in progress
|
323 | 190 | |||||||
Total
gross PP&E
|
5,500 | 5,177 | |||||||
Accumulated
depreciation
|
(1,684 | ) | (1,611 | ) | |||||
Total
net PP&E
|
$ | 3,816 | $ | 3,566 |
·
|
material
and labor
|
·
|
contractor
costs
|
·
|
construction
overhead costs
|
·
|
an
allowance for funds used during construction (AFUDC) which represents the
estimated cost of funds, from both debt and equity sources, 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
|
Authorized
AFUDC rate
|
||||
Atlanta
Gas Light
|
8.53 | % | ||
Chattanooga
Gas (1)
|
7.89 | % | ||
Elizabethtown
Gas (2)
|
2.84 | % | ||
Virginia Natural Gas (3)
|
8.91 | % |
(1)
|
Prior
to 2007, the authorized rate was
7.43%.
|
(2)
|
Variable
rate as of December 31, 2008 and is determined by FERC method of AFUDC
accounting.
|
(3)
|
Approved
only for Hampton Roads construction
project.
|
Date
|
Acquisition
|
Goodwill
amount
|
|||
2004
|
NUI
|
$ | 227 | ||
2004
|
Jefferson
Island
|
14 | |||
2000
|
Virginia
Natural Gas
|
170 | |||
1998
|
Chattanooga
Gas
|
7 |
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Cash
flow hedges:
|
||||||||||||
Net
derivative unrealized (losses) gains arising during the period (net of $2, $2 and $7 in
taxes)
|
$ | (4 | ) | $ | 3 | $ | 11 | |||||
Less
reclassification of realized gains included in net income (net of $4, $5 and $1 in
taxes)
|
(6 | ) | (8 | ) | (1 | ) | ||||||
(Unfunded)
over funded pension obligation (net of $73, $16 and $7 in
taxes)
|
(111 | ) | 24 | 11 | ||||||||
Total
|
$ | (121 | ) | $ | 19 | $ | 21 |
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Denominator
for basic earnings per share (1)
|
76.3 | 77.1 | 77.6 | |||||||||
Assumed
exercise of potential common shares
|
0.3 | 0.3 | 0.4 | |||||||||
Denominator
for diluted earnings per share
|
76.6 | 77.4 | 78.0 |
(1)
|
Daily
weighted average shares
outstanding.
|
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Twelve
months ended (1)
|
1.6 | 0.0 | 0.0 |
(1)
|
0.0
values represent amounts less than 0.1
million.
|
December
31,
|
||||||||
In
millions
|
2008
|
2007
|
||||||
Regulatory
assets
|
||||||||
Unrecovered
PRP costs
|
$ | 237 | $ | 285 | ||||
Unrecovered
ERC (1)
|
143 | 158 | ||||||
Unrecovered
postretirement benefit costs
|
11 | 12 | ||||||
Unrecovered
seasonal rates
|
11 | 11 | ||||||
Unrecovered
natural gas costs
|
19 | 23 | ||||||
Other
|
30 | 24 | ||||||
Total
regulatory assets
|
451 | 513 | ||||||
Associated
assets
|
||||||||
Elizabethtown
Gas hedging program
|
23 | 4 | ||||||
Total
regulatory and associated assets
|
$ | 474 | $ | 517 | ||||
Regulatory
liabilities
|
||||||||
Accumulated
removal costs
|
$ | 178 | $ | 169 | ||||
Elizabethtown
Gas hedging program
|
23 | 4 | ||||||
Unamortized
investment tax credit
|
14 | 16 | ||||||
Deferred
natural gas costs
|
25 | 28 | ||||||
Regulatory
tax liability
|
19 | 20 | ||||||
Other
|
22 | 19 | ||||||
Total regulatory
liabilities
|
281 | 256 | ||||||
Associated
liabilities
|
||||||||
PRP
costs
|
189 | 245 | ||||||
ERC
(1)
|
96 | 96 | ||||||
Total
associated liabilities
|
285 | 341 | ||||||
Total regulatory and associated
liabilities
|
$ | 566 | $ | 597 |
(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
|
·
|
$30
million in 2008
|
·
|
$27
million in 2007
|
·
|
$27
million in 2006
|
As
of December 31,
|
||||||||
In
millions
|
2008
|
2007
|
||||||
Right
to reclaim cash collateral
|
$ | 128 | $ | 3 | ||||
Obligations
to return cash collateral
|
(4 | ) | (10 | ) | ||||
Total
cash collateral
|
$ | 124 | $ | (7 | ) |
In
millions
|
Carrying
amount
|
Estimated
fair value
|
||||||
As
of December 31, 2008
|
$ | 1,675 | $ | 1,647 | ||||
As
of December 31, 2007
|
1,675 | 1,710 |
Recurring
fair value measurements as of December 31, 2008
|
||||||||||||||||||||
In
millions
|
Quoted
prices in active markets (Level 1)
|
Significant
other observable inputs
(Level
2)
|
Significant
unobservable inputs
(Level
3)
|
Netting
of cash collateral
|
Total
carrying value
|
|||||||||||||||
Assets: (1)
|
||||||||||||||||||||
Derivatives
at wholesale services
|
$ | 17 | $ | 154 | $ | - | $ | 35 | $ | 206 | ||||||||||
Derivatives
at distribution operations
|
23 | - | - | - | 23 | |||||||||||||||
Derivatives
at retail energy operations (3)
|
12 | - | - | - | 12 | |||||||||||||||
Total
assets
|
$ | 52 | $ | 154 | $ | - | $ | 35 | $ | 241 | ||||||||||
Liabilities: (2)
|
||||||||||||||||||||
Derivatives
at wholesale services
|
$ | 62 | $ | 27 | $ | - | $ | (62 | ) | $ | 27 | |||||||||
Derivatives
at distribution operations
|
23 | - | - | 4 | 27 | |||||||||||||||
Derivatives
at retail energy operations
|
32 | 1 | - | (31 | ) | 2 | ||||||||||||||
Total
liabilities
|
$ | 117 | $ | 28 | $ | - | $ | (89 | ) | $ | 56 | |||||||||
(1) Includes
$203 million of current assets and $38 million of long-term assets
reflected within our consolidated balance sheet.
(2) Includes
$50 million of current liabilities and $6 million of long-term liabilities
reflected within our consolidated balance sheet.
(3) $4
million premium associated with weather derivatives has been excluded as
they are based on intrinsic value, not fair value.
|
In
millions
|
Year
ended December 31, 2008
|
|||
Balance
as of January 1, 2008
|
$ | (2 | ) | |
Realized
and unrealized gains
|
- | |||
Settlements
|
2 | |||
Transfers
in or out of level 3
|
- | |||
Balance
as of December 31, 2008
|
$ | - | ||
Change
in unrealized gains (losses) relating to instruments held as of December
31, 2008
|
$ | - |
·
|
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
|
AGL
Postretirement Plan
|
||||||||||||||||||||||
Dollars
in millions
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||||
Change
in benefit obligation
|
||||||||||||||||||||||||
Benefit
obligation, January 1,
|
$ | 353 | $ | 368 | $ | 74 | $ | 86 | $ | 94 | $ | 95 | ||||||||||||
Service
cost
|
7 | 7 | - | - | - | 1 | ||||||||||||||||||
Interest
cost
|
22 | 21 | 4 | 5 | 6 | 6 | ||||||||||||||||||
Actuarial
loss (gain)
|
9 | (23 | ) | - | (9 | ) | (1 | ) | - | |||||||||||||||
Benefits
paid
|
(21 | ) | (20 | ) | (6 | ) | (8 | ) | (4 | ) | (8 | ) | ||||||||||||
Benefit
obligation, December 31,
|
$ | 370 | $ | 353 | $ | 72 | $ | 74 | $ | 95 | $ | 94 | ||||||||||||
Change
in plan assets
|
||||||||||||||||||||||||
Fair
value of plan assets, January 1,
|
$ | 313 | $ | 303 | $ | 70 | $ | 72 | $ | 70 | $ | 63 | ||||||||||||
Actual
(loss) gain on plan assets
|
(93 | ) | 30 | (22 | ) | 6 | (21 | ) | 7 | |||||||||||||||
Employer
contribution
|
1 | - | - | - | 4 | 8 | ||||||||||||||||||
Benefits
paid
|
(21 | ) | (20 | ) | (6 | ) | (8 | ) | (4 | ) | (8 | ) | ||||||||||||
Fair
value of plan assets, December 31,
|
$ | 200 | $ | 313 | $ | 42 | $ | 70 | $ | 49 | $ | 70 | ||||||||||||
Amounts
recognized in the consolidated balance sheets consist of
|
||||||||||||||||||||||||
Current
liability
|
$ | (1 | ) | $ | (1 | ) | $ | - | $ | - | $ | - | $ | - | ||||||||||
Long-term
liability
|
(169 | ) | (39 | ) | (30 | ) | (4 | ) | (46 | ) | (24 | ) | ||||||||||||
Total
liability at December 31,
|
$ | (170 | ) | $ | (40 | ) | $ | (30 | ) | $ | (4 | ) | $ | (46 | ) | $ | (24 | ) | ||||||
Assumptions
used to determine benefit obligations
|
||||||||||||||||||||||||
Discount
rate
|
6.2 | % | 6.4 | % | 6.2 | % | 6.4 | % | 6.2 | % | 6.4 | % | ||||||||||||
Rate
of compensation increase
|
3.7 | % | 3.7 | % | - | 3.7 | % | 3.7 | % | 3.7 | % | |||||||||||||
Accumulated
benefit obligation
|
$ | 352 | $ | 337 | $ | 73 | $ | 74 | N/A | N/A |
AGL
Retirement Plan
|
NUI
Retirement Plan
|
AGL
Postretirement Plan
|
||||||||||||||||||||||||||||||||||
Dollars
in millions
|
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
|||||||||||||||||||||||||||
Net
benefit cost
|
||||||||||||||||||||||||||||||||||||
Service
cost
|
$ | 7 | $ | 7 | $ | 7 | $ | - | $ | - | $ | - | $ | - | $ | 1 | $ | 1 | ||||||||||||||||||
Interest
cost
|
22 | 21 | 20 | 4 | 5 | 5 | 6 | 6 | 5 | |||||||||||||||||||||||||||
Expected
return on plan assets
|
(26 | ) | (25 | ) | (24 | ) | (6 | ) | (6 | ) | (7 | ) | (6 | ) | (5 | ) | (4 | ) | ||||||||||||||||||
Net
amortization
|
(1 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (4 | ) | (4 | ) | (4 | ) | ||||||||||||||||||
Recognized
actuarial loss
|
3 | 7 | 9 | - | - | - | 1 | 1 | 1 | |||||||||||||||||||||||||||
Net
annual pension cost
|
$ | 5 | $ | 9 | $ | 11 | $ | (3 | ) | $ | (2 | ) | $ | (3 | ) | $ | (3 | ) | $ | (1 | ) | $ | (1 | ) | ||||||||||||
Assumptions
used to determine benefit costs
|
||||||||||||||||||||||||||||||||||||
Discount
rate
|
6.4 | % | 5.8 | % | 5.5 | % | 6.4 | % | 5.8 | % | 5.5 | % | 6.4 | % | 5.8 | % | 5.5 | % | ||||||||||||||||||
Expected
return on plan assets
|
9.0 | % | 9.0 | % | 8.8 | % | 9.0 | % | 9.0 | % | 8.8 | % | 9.0 | % | 9.0 | % | 8.5 | % | ||||||||||||||||||
Rate
of compensation increase
|
3.7 | % | 3.7 | % | 4.0 | % | - | - | - | 3.7 | % | 3.7 | % | 4.0 | % |
In
millions
|
AGL
Retirement
Plan
|
NUI
Retirement Plan
|
AGL
Postretirement Plan
|
|||||||||
Amortization
of prior service cost
|
$ | (1 | ) | $ | (1 | ) | $ | (4 | ) | |||
Amortization
of net loss
|
14 | 1 | 2 | |||||||||
Refunds
expected
|
- | - | - |
Target
Range Asset Allocation
|
AGL
Retirement Plan
|
NUI
Retirement Plan
|
AGL
Postretirement Plan
|
||||
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
||
Equity
|
30%-95%
|
63%
|
68%
|
63%
|
71%
|
70%
|
73%
|
Fixed
income
|
10%-40%
|
30%
|
25%
|
32%
|
27%
|
28%
|
26%
|
Real
estate and other
|
10%-35%
|
6%
|
3%
|
-
|
2%
|
-
|
-
|
Cash
|
0%-10%
|
1%
|
4%
|
5%
|
-
|
2%
|
1%
|
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 | (3 | ) |
In
millions
|
AGL
Retirement Plan
|
NUI
Retirement
Plan
|
AGL
Postretirement Plan
|
||||||||||
2009
|
$ | 20 | $ | 6 | $ | 7 | |||||||
2010
|
20 | 6 | 7 | ||||||||||
2011
|
21 | 6 | 7 | ||||||||||
2012
|
21 | 6 | 7 | ||||||||||
2013
|
21 | 6 | 7 | ||||||||||
2014-2018 | 116 | 28 | 35 | ||||||||||
Total
|
$ | 219 | $ | 58 | $ | 70 |
In
millions
|
AGL
Retirement Plan
|
NUI
Retirement
Plan
|
AGL
Postretirement Plan
|
|||||||||
Prior
service credit
|
$ | (7 | ) | $ | (12 | ) | $ | (17 | ) | |||
Net
loss
|
195 | 21 | 39 | |||||||||
Accumulated
OCI
|
188 | 9 | 22 | |||||||||
Net
amount recognized in consolidated balance sheet
|
(170 | ) | (30 | ) | (46 | ) | ||||||
Prepaid
(accrued) cumulative employer contributions in excess of net periodic
benefit cost
|
$ | 18 | $ | (21 | ) | $ | (24 | ) |
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
|
280,200 | 4,561,386 |
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)
|
2,221,407 | - |
Grants
of incentive and nonqualified stock options, shares of restricted stock
and performance units to key employees.
|
||||||
Officer
Incentive Plan
|
76,224 | 211,409 |
Grants
of nonqualified stock options and shares of restricted stock to new-hire
officers.
|
||||||
2006
Non-Employee Directors Equity Compensation Plan
|
not
applicable
|
173,433 |
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
|
42,924 | 13,304 |
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
|
321,912 |
Nonqualified,
broad-based employee stock purchase plan for eligible
employees
|
(1)
|
As
of December 31, 2008
|
(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.
|
·
|
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
|
2008
|
2007
|
2006
|
|||||||||
Compensation
costs
|
$ | 10 | $ | 9 | $ | 9 | ||||||
Income
tax benefits
|
1 | 3 | 3 |
Stock
Options
|
||||||||||||||||
Number
of options
|
Weighted
average exercise price
|
Weighted
average remaining life
(in
years)
|
Aggregate
intrinsic value (in millions)
|
|||||||||||||
Outstanding
– December 31, 2005
|
2,221,245 | $ | 27.79 | |||||||||||||
Granted
|
914,216 | 35.81 | ||||||||||||||
Exercised
|
(543,557 | ) | 24.69 | |||||||||||||
Forfeited
(1)
|
(266,418 | ) | 34.93 | |||||||||||||
Outstanding
– December 31, 2006
|
2,325,486 | $ | 30.85 | |||||||||||||
Granted
|
735,196 | 39.11 | ||||||||||||||
Exercised
|
(361,385 | ) | 27.78 | |||||||||||||
Forfeited
(1)
|
(181,799 | ) | 36.75 | |||||||||||||
Outstanding
– December 31, 2007
|
2,517,498 | $ | 33.28 | 7.1 | ||||||||||||
Granted
|
258,017 | 38.70 | 8.5 | |||||||||||||
Exercised
|
(212,600 | ) | 23.53 | 2.1 | ||||||||||||
Forfeited
(1)
|
(86,926 | ) | 38.01 | 8.5 | ||||||||||||
Outstanding
– December 31, 2008
|
2,475,989 | $ | 34.52 | 6.7 | $ | 3 | ||||||||||
Exercisable
– December 31, 2008
|
1,447,508 | $ | 32.18 | 5.9 | $ | 3 |
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, 2007
|
1,414,962 | $ | 37.02 | 1.6 | $ | 4.82 | ||||||||||
Granted
|
258,017 | 38.70 | 2.0 | 2.64 | ||||||||||||
Forfeited
|
(51,497 | ) | 38.68 | 2.2 | 4.39 | |||||||||||
Vested
|
(593,001 | ) | 36.26 | - | 4.77 | |||||||||||
Outstanding
– December 31, 2008
|
1,028,481 | $ | 37.80 | 1.1 | $ | 4.33 |
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 $20.79
|
27,274 | 1.5 | $ | 19.53 | 27,274 | $ | 19.53 | ||||||||||||||
$ |
20.80
to $25.34
|
173,326 | 3.1 | 21.82 | 173,326 | 21.82 | ||||||||||||||||
$ |
25.35
to $29.89
|
233,157 | 4.4 | 27.07 | 233,157 | 27.07 | ||||||||||||||||
$ |
29.90
to $34.44
|
406,701 | 6.0 | 33.21 | 406,701 | 33.21 | ||||||||||||||||
$ |
34.45
to $38.99
|
1,388,835 | 7.5 | 37.15 | 587,250 | 36.83 | ||||||||||||||||
$ |
39.00
to $43.54
|
246,696 | 8.8 | 39.43 | 19,800 | 41.20 | ||||||||||||||||
Outstanding
- Dec. 31, 2008
|
2,475,989 | 6.7 | $ | 34.52 | 1,447,508 | $ | 32.18 |
Exercisable
at:
|
Number
of options
|
Weighted
average exercise price
|
||||||
December
31, 2006
|
1,013,672 | $ | 25.45 | |||||
December
31, 2007
|
1,102,536 | $ | 28.48 | |||||
December
31, 2008
|
1,447,508 | $ | 32.18 |
2008
|
2007
|
2006
|
||||||||||
Expected
life (years)
|
7 | 7 | 7 | |||||||||
Risk-free
interest rate % (1)
|
2.93 - 3.31 | 3.87 – 5.05 | 4.5 – 5.1 | |||||||||
Expected
volatility % (2)
|
12.8 - 13.0 | 13.2 – 14.3 | 14.2 – 15.9 | |||||||||
Dividend
yield % (3)
|
4.3 – 4.84 | 3.8 – 4.2 | 3.7 – 4.2 | |||||||||
Fair
value of options granted (4)
|
$ | 0.19 – $2.69 | $ | 3.55 – $5.98 | $ | 4.55– $6.18 |
(1)
|
US
Treasury constant maturity - 7
years
|
(2)
|
Volatility
is measured over 7 years, the expected life of the options; weighted
average volatility % for 2008 was 13.0%, 2007 was 14.2% and 2006 was
15.8%.
|
(3)
|
Weighted
average dividend yields for 2008 was 4.3%, 2007 was 4.2% and 2006 was
4.1%
|
(4)
|
Represents
per share value.
|
Dollars
in millions
|
Units
|
Measurement
period
end date
|
Accrued
at Dec. 31, 2008
|
Maximum
aggregate payout
|
|||||||||
Year
of grant
|
|||||||||||||
2006 (1)
|
15 |
Dec.
31, 2008
|
$ | 1 | $ | 2 | |||||||
2007
|
23 |
Dec.
31, 2009
|
- | 3 | |||||||||
2008
|
3
|
Dec.
31, 2010
|
1 |
2
|
(1)
|
In
February 2009, the 2006 performance cash units vested and resulted in an
aggregate payout of $1 million.
|
Restricted
Stock Awards
|
Shares
of restricted stock
|
Weighted
average fair value
|
||||||
Issued
|
15,674 | $ | 35.05 | |||||
Forfeited
|
- | - | ||||||
Vested
|
15,674 | $ | 35.05 | |||||
Outstanding
|
- | - |
Restricted
Stock Awards
|
Shares
of restricted stock
|
Weighted
average remaining vesting period (in years)
|
Weighted
average fair value
|
|||||||||
Outstanding – December 31,
2007 (1)
|
349,036 | 2.1 | $ | 38.15 | ||||||||
Issued
|
28,024 | 0.6 | 35.63 | |||||||||
Forfeited
|
(6,483 | ) | 1.2 | 38.43 | ||||||||
Vested
|
(70,199 | ) | - | 36.75 | ||||||||
Outstanding – December 31, 2008
(1)
|
300,378 | 1.3 | $ | 37.87 |
(1)
|
Subject
to restriction
|
2008
|
2007
|
2006
|
||||||||||
Shares
purchased on the open market
|
66,247 | 52,299 | 45,361 | |||||||||
Average
per-share purchase price
|
$ | 33.22 | $ | 34.69 | $ | 31.40 | ||||||
Purchase
price discount
|
$ | 326,615 | $ | 313,584 | $ | 252,752 |
In
millions, except per share amounts
|
Total
amount purchased
|
Shares
purchased
|
Weighted
average price per share
|
|||||||||
2006
|
$ | 38 | 1 | $ | 36.67 | |||||||
2007
|
80 | 2 | 39.56 | |||||||||
2008
|
- | - | - |
·
|
our
ability to pay our debts as they become due in the usual course of
business, satisfy our obligations under certain financing agreements,
including debt-to-capitalization
covenants
|
·
|
our
total assets are less than our total liabilities,
and
|
·
|
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 (2)
|
2008
|
2007
|
|||||||||||||||
Short-term
debt
|
||||||||||||||||||||
Credit
Facilities
|
2009
|
0.8 | % | 2.9 | % | $ | 500 | $ | - | |||||||||||
Commercial
paper
|
2009
|
2.2 | 3.6 | 273 | 566 | |||||||||||||||
SouthStar
line of credit
|
2009
|
1.1 | 2.9 | 75 | - | |||||||||||||||
Sequent
lines of credit
|
2009
|
0.9 | 2.3 | 17 | 1 | |||||||||||||||
Capital
leases
|
2009
|
4.9 | 4.9 | 1 | 1 | |||||||||||||||
Pivotal
Utility line of credit
|
- | - | - | - | 12 | |||||||||||||||
Total
short-term debt
|
1.3 | % | 3.3 | % | $ | 866 | $ | 580 | ||||||||||||
Long-term
debt - net of current portion
|
||||||||||||||||||||
Senior
notes
|
2011-2034 | 4.5-7.1 | % | 5.9 | % | $ | 1,275 | $ | 1,275 | |||||||||||
Gas
facility revenue bonds
|
2022-2033 | 0.7-5.3 | 3.2 | 200 | 200 | |||||||||||||||
Medium-term
notes
|
2012-2027 | 6.6-9.1 | 7.8 | 196 | 196 | |||||||||||||||
Capital
leases
|
2013
|
4.9 | 4.9 | 4 | 6 | |||||||||||||||
AGL
Capital interest rate swaps
|
- | - | - | (2 | ) | |||||||||||||||
Total
long-term debt
|
5.6 | % | 5.7 | % | $ | 1,675 | $ | 1,675 | ||||||||||||
Total
debt
|
4.1 | % | 5.2 | % | $ | 2,541 | $ | 2,255 |
(1)
|
As
of December 31, 2008.
|
(2)
|
For
the year ended December 31,
2008.
|
Year
|
Amount
(in
millions)
|
|||
2011
|
$ | 300 | ||
2012
|
15 | |||
2013
|
225 | |||
2015
|
200 | |||
2016
|
300 | |||
2017
|
22 | |||
2021
|
30 | |||
2022
|
93 | |||
2024
|
20 | |||
2026
|
69 | |||
2027
|
53 | |||
2032
|
55 | |||
2033
|
39 | |||
2034
|
250 | |||
Total
|
$ | 1,671 |
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
|
$ | 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 |
Issue
Date
|
Amount
(in
millions)
|
Interest
rate
|
Maturity
|
||||||
July 1994
(1)
|
$ | 47 | 0.70 | % |
Oct.
2022
|
||||
July 1994
(1)
|
20 | 1.10 |
Oct.
2024
|
||||||
June 1992
(1)
|
39 | 1.10 |
June
2026
|
||||||
June 1992
(1)
|
55 | 0.85 |
June
2032
|
||||||
July
1997
|
39 | 5.25 |
Nov.
2033
|
||||||
Total
|
$ | 200 |
(1)
|
Interest
rate is adjusted daily or weekly. Rates indicated are as of December 31,
2008.
|
·
|
a
maximum leverage ratio
|
·
|
insolvency
events and nonpayment of scheduled principal or interest
payments
|
·
|
acceleration
of other financial obligations
|
·
|
change
of control provisions
|
2010 | 2012 | 2014 | ||||||||||||||||||
& | & | & | ||||||||||||||||||
In
millions
|
Total
|
2009
|
2011
|
2013
|
thereafter
|
|||||||||||||||
Recorded
contractual obligations:
|
||||||||||||||||||||
Long-term
debt
|
$ | 1,675 | $ | - | $ | 302 | $ | 242 | $ | 1,131 | ||||||||||
Short-term
debt
|
866 | 866 | - | - | - | |||||||||||||||
Environmental remediation
liabilities (1)
|
106 | 17 | 41 | 38 | 10 | |||||||||||||||
PRP costs
(1)
|
189 | 49 | 91 | 49 | - | |||||||||||||||
Total
|
$ | 2,836 | $ | 932 | $ | 434 | $ | 329 | $ | 1,141 |
Unrecorded
contractual obligations and commitments
(2):
|
||||||||||||||||||||
Interest
charges
(3)
|
$ | 975 | $ | 94 | $ | 168 | $ | 137 | $ | 576 | ||||||||||
Pipeline charges, storage
capacity and gas supply (4)
|
1,713 | 491 | 573 | 299 | 350 | |||||||||||||||
Operating leases
(5)
|
137 | 30 | 45 | 25 | 37 | |||||||||||||||
Standby
letters of credit, performance / surety
bonds
|
52 | 48 | 3 | 1 | - | |||||||||||||||
Asset management
agreements (6)
|
32 | 12 | 19 | 1 | - | |||||||||||||||
Pension contribution (7) | 7 | 7 | - | - | - | |||||||||||||||
Total
|
$ | 2,916 | $ | 682 | $ | 808 | $ | 463 | $ | 963 |
(1)
|
Includes
charges recoverable through rate rider
mechanisms.
|
(2)
|
In
accordance with GAAP, these items are not reflected in our consolidated
balance sheets.
|
(3)
|
Floating
rate debt is based on the interest rate as of December 31, 2008 and the
maturity of the underlying debt instrument. As of December 31, 2008, we
have $35 million of accrued interest on our consolidated balance sheet
that will be paid in 2009.
|
(4)
|
Charges
recoverable through a natural gas cost recovery mechanism or alternatively
billed to Marketers. Also includes demand charges associated with Sequent.
A subsidiary of NUI entered into two 20-year agreements for the firm
transportation and storage of natural gas during 2003 with annual
aggregate demand charges of approximately $5 million. As a result of our
acquisition of NUI and in accordance with SFAS 141, we valued the
contracts at fair value and established a long-term liability of $38
million for the excess liability that will be amortized to our
consolidated statements of income over the remaining lives of the
contracts of $2 million annually through November 2023 and $1 million
annually from November 2023 to November 2028. The gas supply amount
includes SouthStar gas commodity purchase commitments of 15 Bcf at
floating gas prices calculated using forward natural gas prices as of
December 31, 2008, and is valued at $85
million.
|
(5)
|
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.
|
(6)
|
Represent fixed-fee minimum
payments for Sequent’s affiliated asset management
agreements.
|
(7)
|
Based
on the current funding status of the plans, we would be required to make a
minimum contribution to our pension plans of approximately $7 million in
2009. We may make additional contributions in
2009.
|
·
|
$22
million in 2008
|
·
|
$26
million in 2007
|
·
|
$29
million in 2006
|
In
millions
|
2008
|
2007
|
2006
|
|||||||||
Current
income taxes
|
||||||||||||
Federal
|
$ | 37 | $ | 86 | $ | (4 | ) | |||||
State
|
7 | 12 | 2 | |||||||||
Deferred
income taxes
|
||||||||||||
Federal
|
77 | 23 | 115 | |||||||||
State
|
12 | 7 | 18 | |||||||||
Amortization
of investment tax credits
|
(1 | ) | (1 | ) | (2 | ) | ||||||
Total
|
$ | 132 | $ | 127 | $ | 129 |
2008
|
2007
|
2006
|
||||||||||||||||||||||
In
millions
|
Amount
|
%
of pretax income
|
Amount
|
%
of pretax income
|
Amount
|
%
of pretax income
|
||||||||||||||||||
Computed
tax expense at statutory rate
|
$ | 122 | 35.0 | % | $ | 118 | 35.0 | % | $ | 119 | 35.0 | % | ||||||||||||
State
income tax, net of federal income tax benefit
|
14 | 4.0 | 13 | 3.8 | 12 | 3.6 | ||||||||||||||||||
Amortization
of investment tax credits
|
(1 | ) | (0.4 | ) | (1 | ) | (0.3 | ) | (2 | ) | (0.5 | ) | ||||||||||||
Affordable
housing credits
|
(2 | ) | (0.5 | ) | (1 | ) | (0.3 | ) | - | - | ||||||||||||||
Flexible
dividend deduction
|
(2 | ) | (0.5 | ) | (2 | ) | (0.6 | ) | (2 | ) | (0.5 | ) | ||||||||||||
Other
– net
|
1 | 0.2 | - | - | 2 | 0.2 | ||||||||||||||||||
Total
income tax expense at effective rate
|
$ | 132 | 37.8 | % | $ | 127 | 37.6 | % | $ | 129 | 37.8 | % |
As
of
December
31,
|
||||||||
In
millions
|
2008
|
2007
|
||||||
Accumulated
deferred income tax liabilities
|
||||||||
Property
– accelerated depreciation and other property-related
items
|
$ | 635 | $ | 568 | ||||
Mark
to market
|
5 | 4 | ||||||
Other
|
32 | 44 | ||||||
Total accumulated deferred income tax liabilities
|
672 | 616 | ||||||
Accumulated
deferred income tax assets
|
||||||||
Deferred
investment tax credits
|
5 | 6 | ||||||
Unfunded
pension and postretirement benefit obligation
|
86 | 35 | ||||||
Net
operating loss – NUI (1)
|
2 | 5 | ||||||
Other
|
11 | 7 | ||||||
Total accumulated deferred income tax assets
|
104 | 53 | ||||||
Valuation
allowances (2)
|
(3 | ) | (3 | ) | ||||
Total
accumulated deferred income tax assets, net of valuation
allowance
|
101 | 50 | ||||||
Net
accumulated deferred tax liability
|
$ | 571 | $ | 566 |
(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
|
2008
|
2007
|
2006
|
|||||||||
Operating
revenues
|
$ | 2,800 | $ | 2,494 | $ | 2,621 | ||||||
Operating
expenses
|
2,322 | 2,005 | 2,133 | |||||||||
Operating
income
|
478 | 489 | 488 | |||||||||
Minority
interest
|
(20 | ) | (30 | ) | (23 | ) | ||||||
Other
income (expense)
|
6 | 4 | (1 | ) | ||||||||
EBIT
|
464 | 463 | 464 | |||||||||
Interest
expense
|
115 | 125 | 123 | |||||||||
Earnings
before income taxes
|
349 | 338 | 341 | |||||||||
Income
taxes
|
132 | 127 | 129 | |||||||||
Net
income
|
$ | 217 | $ | 211 | $ | 212 |
2008
|
||||||||||||||||||||||||
In
millions
|
Distribution
operations
|
Retail
energy operations
|
Wholesale
services
|
Energy
investments
|
Corporate
and intercompany eliminations
|
Consolidated
AGL Resources
|
||||||||||||||||||
Operating
revenues from external parties
|
$ | 1,581 | $ | 987 | $ | 170 | $ | 55 | $ | 7 | $ | 2,800 | ||||||||||||
Intercompany revenues
(1)
|
187 | - | - | - | (187 | ) | - | |||||||||||||||||
Total
operating revenues
|
1,768 | 987 | 170 | 55 | (180 | ) | 2,800 | |||||||||||||||||
Operating
expenses
|
||||||||||||||||||||||||
Cost
of gas
|
950 | 838 | 48 | 5 | (187 | ) | 1,654 | |||||||||||||||||
Operation
and maintenance
|
330 | 67 | 55 | 24 | (4 | ) | 472 | |||||||||||||||||
Depreciation
and amortization
|
128 | 4 | 5 | 6 | 9 | 152 | ||||||||||||||||||
Taxes
other than income taxes
|
35 | 2 | 2 | 1 | 4 | 44 | ||||||||||||||||||
Total
operating expenses
|
1,443 | 911 | 110 | 36 | (178 | ) | 2,322 | |||||||||||||||||
Operating
income (loss)
|
325 | 76 | 60 | 19 | (2 | ) | 478 | |||||||||||||||||
Minority
interest
|
- | (20 | ) | - | - | - | (20 | ) | ||||||||||||||||
Other
income
|
4 | 1 | - | - | 1 | 6 | ||||||||||||||||||
EBIT
|
$ | 329 | $ | 57 | $ | 60 | $ | 19 | $ | (1 | ) | $ | 464 | |||||||||||
Identifiable
and total assets
|
$ | 5,138 | $ | 315 | $ | 970 | $ | 353 | $ | (66 | ) | $ | 6,710 | |||||||||||
Goodwill
|
$ | 404 | $ | - | $ | - | $ | 14 | $ | - | $ | 418 | ||||||||||||
Capital
expenditures
|
$ | 278 | $ | 6 | $ | 1 | $ | 75 | $ | 12 | $ | 372 |
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
|
$ | 4,847 | $ | 282 | $ | 890 | $ | 287 | $ | (48 | ) | $ | 6,258 | |||||||||||
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 | $ | 293 | $ | 830 | $ | 373 | $ | 62 | $ | 6,123 | ||||||||||||
Goodwill
|
$ | 406 | $ | - | $ | - | $ | 14 | $ | - | $ | 420 | ||||||||||||
Capital
expenditures
|
$ | 174 | $ | 9 | $ | 2 | $ | 23 | $ | 45 | $ | 253 |
In
millions, except per share amounts
|
March
31
|
June
30
|
Sept.
30
|
Dec.
31
|
||||||||||||
2008
|
||||||||||||||||
Operating
revenues
|
$ | 1,012 | $ | 444 | $ | 539 | $ | 805 | ||||||||
Operating
income
|
188 | 6 | 126 | 158 | ||||||||||||
Net
income (loss)
|
89 | (11 | ) | 65 | 74 | |||||||||||
Basic
earnings (loss) per share
|
1.17 | (0.15 | ) | 0.85 | 0.97 | |||||||||||
Diluted
earnings (loss) per share
|
1.16 | (0.15 | ) | 0.85 | 0.97 | |||||||||||
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 |
(1) Financial
Statements Included in Item 8 are the
following:
|
·
|
Report
of Independent Registered Public Accounting
Firm
|
·
|
Management’s
Report on Internal Control Over Financial
Reporting
|
·
|
Consolidated
Balance Sheets as of December 31, 2008 and
2007
|
·
|
Statements
of Consolidated Income for the years ended December 31, 2008, 2007, and
2006
|
·
|
Statements
of Consolidated Common Shareholders’ Equity for the years ended December
31, 2008, 2007 and 2006
|
·
|
Statements
of Consolidated Cash Flows for the years ended December 31, 2008, 2007,
and 2006
|
·
|
Notes
to Consolidated Financial
Statements
|
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).
|
||
3.2
|
Bylaws,
as amended on December 10, 2008 (Exhibit 3.2, AGL Resources, Inc. Form 8-K
dated December 16, 2008).
|
||
4.1.a
|
Specimen
form of Common Stock certificate (Exhibit 4.1, AGL Resources Inc. Form
10-Q for the fiscal quarter ended September 30, 2007).
|
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
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.e
|
Specimen
AGL Capital Corporation 7.125% Senior Secured Notes due 2011 (Exhibit
4.1.f, AGL Resources Inc. Form 10-K for the fiscal year ended December 31,
2007).
|
4.1.f
|
Specimen
AGL Capital Corporation 4.45% Senior Secured Notes due 2013 (Exhibit
4.1.g, AGL Resources Inc. Form 10-K for the fiscal year ended December 31,
2007).
|
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.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 (Exhibit 4.3.d,
AGL Resources Inc. Form 10-K for the fiscal year ended December 31,
2007).
|
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 2013 (Exhibit 4.3.e, AGL
Resources Inc. Form 10-K for the fiscal year ended December 31,
2007).
|
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
|
Second
Amendment to the AGL Resources Inc. 2006 Non-Employee Directors Equity
Compensation Plan.
|
10.1.g
|
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.h
|
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.i
|
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.j
|
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.k
|
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.l
|
Fifth
Amendment to the AGL Resources Inc. 1998 Common Stock Equivalent Plan for
Non-Employee Directors.
|
10.1.m
|
Description
of Directors’ Compensation (Exhibit 10.1, AGL Resources Inc. Form 8-K
dated December 1, 2004).
|
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.aa
|
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.ab
|
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.ac
|
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.ad
|
Third
amendment to the AGL Resources Inc. Long-Term Incentive Plan (1999), as
amended and restated.
|
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
|
Second
amendment to the AGL Resources Inc. Officer Incentive
Plan.
|
10.1.ah
|
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.ai
|
First
Amendment to the AGL Resources Inc. 2007 Omnibus Performance Incentive
Plan.
|
10.1.aj
|
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.ak
|
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.al
|
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.am
|
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.an
|
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.ao
|
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.ap
|
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.aq
|
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.ar
|
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.as
|
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.at
|
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.au
|
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.av
|
AGL
Resources Inc. Nonqualified Savings Plan as amended and restated as of
January 1, 2009.
|
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
(Exhibit 10.1.ax, AGL Resources Inc. Form 10-K for the fiscal year ended
December 31, 2007).
|
|
10.1.ay
|
Description
of Supplemental Executive Retirement Plan for John W. Somerhalder
II.
|
|
10.1.az
|
AGL
Resources Inc. Excess Benefit Plan as amended and restated as of January
1, 2009.
|
|
10.1.ba
|
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 (Exhibit 10.1.a AGL Resources, Inc. Form 8-K dated
January 8, 2008).
|
|
10.1.bb
|
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.bc
|
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.bd
|
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.be
|
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 (Exhibit 10.1.bl, AGL Resources Inc. Form 10-K for the
fiscal year ended December 31, 2007).
|
|
10.1.bf
|
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.bg
|
Description
of compensation for each of John W. Somerhalder, Andrew W. Evans, Kevin P.
Madden, Douglas N. Schantz and Paul R. Shlanta (incorporated herein by
reference to the Compensation Discussion and Analysis section of the AGL
Resources Inc. Proxy Statement for the Annual Meeting of Shareholders held
April 30, 2008 filed on March 19,
2008).
|
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, 2007).
|
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.a
|
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).
|
10.6.b
|
Modification
to the Amended and Restated Master Environmental Management Services
Agreement, dated July 25, 2002 by and between Atlanta Gas Light Company
and The RETEC Group, Inc.
|
10.6.c
|
Term
Extension to the Amended and Restated Master Environmental Management
Services Agreement, dated July 25, 2002 by and between Atlanta Gas Light
Company and The RETEC Group, Inc.
|
10.6.d
|
Modification
to the Amended and Restated Master Environmental Management Services
Agreement, dated July 25, 2002 by and between Atlanta Gas Light Company
and The RETEC Group, Inc.
|
10.6.e
|
Second
Modification to the Amended and Restated Master Environmental Management
Services Agreement, dated July 25, 2002 by and between Atlanta Gas Light
Company and The RETEC Group, Inc.
|
10.6.f
|
Third Modification
to the Amended and Restated Master Environmental Management Services
Agreement, dated July 25, 2002 by and between Atlanta Gas Light Company
and The RETEC Group, Inc.
|
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 Amended and Restated 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).
|
|
10.9
|
Letter
of Credit and Security Agreement dated as of September 4, 2008 by and
among Pivotal Utility Holdings, Inc. as borrower, AGL Resources Inc. as
Guarantor, Bank of America, N.A. as Administrative Agent, The Bank of
Tokyo-Mitsubishi UFJ, LTD. as Syndication Agent and Bank of America, N.A.
as Issuing Bank (Exhibit 10.1, AGL Resources Inc. Form 10-Q for the
quarter ended September 30, 2008).
|
|
10.10
|
Credit
Agreement as of September 30, 2008 by and among AGL Resources Inc., AGL
Capital Corporation, Wachovia Bank, N.A. as Administrative Agent, Wachovia
Capital Markets, LLC as sole lead arranger and sole lead bookrunner.
SunTrust Bank, NA, The Bank of Tokyo-Mitsubishi UFJ, LTD., Calyon New
York Brand and The Royal Bank of Scotland PLC as Co-Documentation
Agents (Exhibit 10.1, AGL Resources Inc. Form 8-K dated September 30,
2008).
|
|
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
|
Senior
Vice President, Controller and Chief Accounting Officer (Principal
Accounting Officer)
|
Bryan
E. Seas
|
|
/s/ Sandra N. Bane
|
Director
|
Sandra
N. Bane
|
|
/s/ Thomas D. Bell, Jr.
|
Director
|
Thomas
D. Bell, Jr.
|
|
/s/ Charles R. Crisp
|
Director
|
Charles
R. Crisp
|
|
/s/ Arthur E. Johnson
|
Director
|
Arthur
E. Johnson
|
|
/s/ Wyck A. Knox, Jr.
|
Director
|
Wyck
A. Knox, Jr.
|
|
/s/ Dennis M. Love
Dennis
M. Love
|
Director
|
/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, 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 | ||||||
Provisions
charged to income in 2008
|
27 | - | ||||||
Accounts
written off as uncollectible, net in 2008
|
(25 | ) | - | |||||
Balance
at December 31, 2008
|
$ | 16 | $ | 3 |