AGL Resources and Atmos Energy’s operations and financials

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AGL Resources Inc.

AGL Resources (GAS) is an energy service company that engages in the distribution of natural gas in Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee, and Maryland.

Historical Financial Performance

Revenues

In 2013, revenues increased by ~18% after spiking up by ~68% in 2012. The most remarkable improvement in the company’s segment results came from the residential sales in which sales nearly doubled in 2012. In January, 2013, the company acquired ~500,000 service contracts.

Operating income

Operating income before depreciation and amortization increased ~8% and 63% in 2011 and 2012, respectively. Margins improved in 2013 from regulatory infrastructure development, and growth in retail and commercial operations. Colder-than-normal weather also helped margins improve.

Operating cash flows

Operating cash flows decreased marginally by 3% in 2013, after increasing by ~120% in 2012. In 2012, cash flows improved related to the recovery of working capital following its merger with Nicor Gas in December, 2011.

Capex

Capex increased by 83% in 2012, followed by a modest 4% decrease in 2013. In 2012, spending on capex increased significantly due to the acquisitions of Nicor Gas and Central Valley.

Atmos Energy Corp.

Atmos Energy Corp. (ATO) engages in the distribution, transmission, and storage of natural gas in the U.S. The company has three operating segments, namely—natural gas distribution, regulated transmission and storage, and non-regulated natural gas storage and transmission.

Revenues

In 2013, the company recorded a 13% increase in revenues following a 20% decline in 2012. Sales volume decreased both years. Also, warmer weather led to a fall in sales in 2012.

Operating income

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Operating income before depreciation and amortization increased 4% and 8% in 2012 and 2013, respectively. In 2012, the operating margin improved primarily as a result of the Gas Reliability Infrastructure Program filings approved by the Railroad Commission of Texas. The filing approval led to an increase in operating income that went into effect with bills to customers.

Capex

Capex in 2013 and 2012 increased 15% and 18%, respectively. The increased spending in 2013 reflects higher capex in the regulated transmission and storage segment.

Long-term debt

In 2013, long-term debt increased by 25% after it went down by 11% in 2012. In 2013, the company issued $500 million senior notes to repay short-term debt.

Key stocks and exchange-traded funds (or ETFs)

Other energy services companies that would benefit from increased use of compressed natural gas (or CNG) include Clean Energy Fuels Corp. (CLNE). Some of these are components of the Utilities Select Sector SPDR (XLU) and the SPDR S&P 500 (SPY).

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