-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ri4Q3Ei+K5mFS3dqwgDa1a22jZDbpYIqpxXn2V4ZxnS1OcedARcF3u9huL4wHVTR AfqgAJsHFlsnI2zXNSuOqA== 0001004155-08-000144.txt : 20081030 0001004155-08-000144.hdr.sgml : 20081030 20081030132416 ACCESSION NUMBER: 0001004155-08-000144 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20081030 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20081030 DATE AS OF CHANGE: 20081030 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AGL RESOURCES INC CENTRAL INDEX KEY: 0001004155 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 582210952 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14174 FILM NUMBER: 081150319 BUSINESS ADDRESS: STREET 1: TEN PEACHTREE PLACE CITY: ATLANTA STATE: GA ZIP: 30309 BUSINESS PHONE: 4045844000 MAIL ADDRESS: STREET 1: TEN PEACHTREE PLACE STREET 2: DEPT. 1109 CITY: ATLANTA STATE: GA ZIP: 30309 8-K 1 form_8k.htm FORM 8-K form_8k.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
     
FORM 8-K
     
CURRENT REPORT
     
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
     
     
Date of Report (Date of earliest event reported): October 30, 2008
     
     
AGL RESOURCES INC.
(Exact name of registrant as specified in its charter)
     
Georgia
1-14174
58-2210952
(State or other jurisdiction of incorporation)
(Commission File No.)
(I.R.S. Employer Identification No.)
     
     
Ten Peachtree Place NE Atlanta, Georgia 30309
(Address and zip code of principal executive offices)
     
     
404-584-4000
(Registrant's telephone number, including area code)
     
     
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy  the filing obligation of the registrant under any of the following provisions:
 
¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
 
 

Item 8.01                      Other Events

Attached as Exhibit 100 to this Current Report on Form 8-K are the following materials from AGL Resources Inc. Quarterly Report on Form 10-Q for the quarter and nine months ended September 30, 2008, filed with the Securities and Exchange Commission (SEC) on October 30, 2008, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Common Shareholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements tagged in Block Text format.  Users of this data are advised pursuant to Rule 401 of Regulation S-T that the financial information contained in the XBRL documents is unaudited and these are not the official publicly filed financial statements of AGL Resources Inc.  The purpose of submitting these XBRL formatted documents is to test the related format and technology and, as a result, investors should continue to rely on the official filed version of the furnished documents and not rely on this information in making investment decisions.

In accordance with Rule 402 of Regulation S-T, the information in this Current Report on Form 8-K, including Exhibit 100, shall not be deemed “filed” for the purposes of section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific references in such filing.

Item 9.01                      Financial Statements and Exhibits

(d)  
     Exhibits
The following exhibits are furnished herewith:
   
              Exhibit No.
Exhibit Description
100
The following materials from AGL Resources Inc. Quarterly Report on Form 10-Q for the quarter and nine months ended September 30, 2008, filed on October 30, 2008, formatted in XBRL (Extensive Business Reporting Language):
(i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Common Shareholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements tagged in Block Text format
   


 
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

 
 
AGL RESOURCES INC.
 
(Registrant)
 
 
Date:  October 30, 2008
/s/ Andrew W. Evans
 
Executive Vice President and Chief Financial Officer



 
 
 

Exhibit Index


Exhibit No.
Description
EX-100.INS
XBRL Instance Document
EX-100.SCH
 XBRL Taxonomy Extension Schema Document
EX-100.PRE    
 XBRL Taxonomy Presentation Linkbase Document
EX-100.LAB
 XBRL Taxonomy Label Linkbase Document
EX-100.CAL
XBRL Taxonomy Calculation Linkbase Document
EX-100.DEF
 XBRL Definition Linkbase Document
                                                




 
 
 

EX-100.SCH 2 atg-20080930.xsd EXHIBIT 100 XBRL EXTENSION SCHEMA DOCUMENT EX-100.INS 3 atg-20080930.xml EXHIBIT 100 XBRL EXTENSION INSTANCE DOCUMENT AGL Resources 2008-09-30 Unaudited AGL Resources 2008-01-01 2008-09-30 Unaudited AGL Resources 2007-12-31 Unaudited AGL Resources 2007-07-01 2007-09-30 Unaudited AGL Resources 2007-09-30 Unaudited AGL Resources 2007-01-01 2007-09-30 Unaudited AGL Resources 2008-07-01 2008-09-30 Unaudited AGL Resources 2007-01-01 Unaudited AGL Resources 2008-01-01 Unaudited AGL Resources 2007-12-31 AGL Resources us-gaap:CommonStockMember 2007-12-31 AGL Resources us-gaap:CommonStockMember 2007-12-31 AGL Resources us-gaap:AdditionalPaidInCapitalMember 2007-12-31 AGL Resources us-gaap:RetainedEarningsMember 2007-12-31 AGL Resources us-gaap:AccumulatedOtherComprehensiveIncomeMember 2007-12-31 AGL Resources us-gaap:TreasuryStockMember 2007-12-31 AGL Resources 2008-09-30 AGL Resources us-gaap:CommonStockMember 2008-09-30 AGL Resources us-gaap:CommonStockMember 2008-09-30 AGL Resources us-gaap:AdditionalPaidInCapitalMember 2008-09-30 AGL Resources us-gaap:RetainedEarningsMember 2008-09-30 AGL Resources us-gaap:AccumulatedOtherComprehensiveIncomeMember 2008-09-30 AGL Resources us-gaap:TreasuryStockMember 2008-09-30 AGL Resources 2008-01-01 2008-09-30 AGL Resources us-gaap:CommonStockMember 2008-01-01 2008-09-30 AGL Resources us-gaap:AdditionalPaidInCapitalMember 2008-01-01 2008-09-30 AGL Resources us-gaap:RetainedEarningsMember 2008-01-01 2008-09-30 AGL Resources us-gaap:RetainedEarningsMember 2008-01-01 2008-09-30 AGL Resources us-gaap:RetainedEarningsMember 2008-01-01 2008-09-30 AGL Resources us-gaap:AccumulatedOtherComprehensiveIncomeMember 2008-01-01 2008-09-30 AGL Resources us-gaap:TreasuryStockMember 2008-01-01 2008-09-30 AGL Resources us-gaap:AdditionalPaidInCapitalMember 2008-01-01 2008-09-30 AGL Resources us-gaap:TreasuryStockMember 2008-01-01 2008-09-30 iso4217:USD xbrli:shares -86000000 27000000 39000000 8000000 86000000 89000000 539000000 369000000 1995000000 1809000000 206000000 405000000 158000000 Note 5 - Debt Our issuance of various securities, including long-term and short-term debt, is subject to customary approval or authorization by state and federal regulatory bodies, including state public service commissions, the SEC and the FERC as granted by the Energy Policy Act of 2005. The following table provides more information on our various debt securities. Weighted Outstanding as of In millions Year(s) due (1) Interest rate (1) average interest rate(2) Sept. 30, 2008 Dec. 31, 2007 Sept.30, 2007 Short-term debt Credit Facility 2008 3.5% 3.5% $485 $- $- Commercial paper 2008 4.6 3.5 198 566 549 SouthStar line of credit 2008 3.5 3.5 55 - - Sequent lines of credit 2008 2.8 2.7 20 1 13 Pivotal Utility line of credit 2008 1.6 2.9 10 12 13 Capital leases 2008 4.9 4.9 1 1 1 Total short-term debt 3.7% 3.4% $769 $580 $576 Long-term debt - net of current portion Senior notes 2011-2034 4.5-7.1% 5.9% $1,275 $1,275 $1,150 Gas facility revenue bonds 2022-2033 4.2-8.1 3.5 200 200 200 Medium-term notes 2012-2027 6.6-9.1 7.8 196 196 196 Capital leases 2013 4.9 4.9 4 6 5 Interest rate swaps - - - - (2) (3) Total long-term debt 6.0% 5.8% $1,675 $1,675 $1,548 Total debt 5.3% 5.4% $2,444 $2,255 $2,124 (1) As of September 30, 2008 (2) For the nine months ended September 30, 2008 Credit Facility In September 2008, we completed a $140 million Credit Facility that expires in September 2009, which will provide additional liquidity for working capital and capital expenditure needs. This Credit Facility provides us the option to request an increase in the borrowing capacity to $150 million and supplements our existing $1.0 billion Credit Facility which expires in August 2011. Gas Facility Revenue Bonds In 2008, a portion of our gas facility revenue bonds failed to draw enough potential buyers due to the dislocation or disruption in the auction markets as a result of the downgrades to the bond insurers that provide credit protections for these instruments which reduced investor demand and liquidity for these types of investments. In March and April 2008, we tendered these bonds with a cumulative principal amount of $161 million through commercial paper borrowings. In June and September 2008, we completed a Letter of Credit Agreement for these bonds which provided additional credit support which increased investor demand for the bonds. As a result, these bonds with a cumulative principal amount of $161 million were successfully auctioned and issued as variable rate gas facility bonds and reduced our commercial paper borrowings. The bonds with principal amounts of $55 million, $47 million and $39 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. There was no change to the maturity dates on these bonds. SouthStar Credit Facility SouthStar's five-year $75 million unsecured credit facility expires in November 2011. SouthStar will use this line of credit for working capital and its general corporate needs. We do not guarantee or provide any other form of security for the repayment of this credit facility. Sequent Lines of Credit In June 2008, we extended one of Sequent's lines of credit in the amount of $25 million to June 2009. This line of credit bears interest at the federal funds effective rate plus 0.75%. In September 2008, Sequent obtained a second line of credit for $20 million that bears interest at the LIBOR Rate plus 1.0% to September 2009. This line of credit replaced the line of credit that expired in August 2008. Both lines of credit are used for the posting of margin deposits for NYMEX transactions and are unconditionally guaranteed by us. Note 3 - Employee Benefit Plans Pension Benefits We sponsor two tax-qualified defined benefit retirement plans for our eligible employees, the AGL Resources Inc. Retirement Plan and the Employees' Retirement Plan of NUI Corporation. A defined benefit plan specifies the amount of benefits an eligible participant eventually will receive using information about the participant. The following are the combined cost components of our two defined benefit pension plans for the periods indicated: Three months ended September 30, In millions 2008 2007 Service cost $2 $2 Interest cost 7 6 Expected return on plan assets (9) (8) Amortization of prior service cost - (1) Recognized actuarial loss - 2 Net pension cost $- $1 Nine months ended September 30, In millions 2008 2007 Service cost $6 $6 Interest cost 20 18 Expected return on plan assets (25) (24) Amortization of prior service cost (1) (2) Recognized actuarial loss 2 5 Net pension cost $2 $3 Our employees do not contribute to the retirement plans. We fund the plans by contributing at least the minimum amount required by applicable regulations and as recommended by our actuary. However, we may also contribute in excess of the minimum required amount. We calculate the minimum amount of funding using the projected unit credit cost method. The Pension Protection Act (the Act) of 2006 contains new funding requirements for single employer defined benefit pension plans. The Act establishes a 100% funding target for plan years beginning after December 31, 2007. However, a delayed effective date of 2011 may apply if the pension plan meets the following targets: 92% funded in 2008; 94% funded in 2009; and 96% funded in 2010. No contribution is required for our qualified plans in 2008. Postretirement Benefits The AGL Resources Inc. Postretirement Health Care Plan (AGL Postretirement Plan) covers all eligible AGL Resources employees who were employed as of September 30, 2002, if they reach retirement age while working for us. The state regulatory commissions have approved phase-ins that defer a portion of other postretirement benefits expense for future recovery. Effective December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was signed into law. This act provides for a prescription drug benefit under Medicare (Part D), as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. Eligibility for benefits under the AGL Postretirement Plan is based on age and years of service. Following are the cost components of the AGL Postretirement Plan for the periods indicated. Three months ended September 30, Nine months ended September 30, In millions 2008 2007 2008 2007 Service cost $- $- $1 $- Interest cost 1 1 4 4 Expected return on plan assets (1) (1) (4) (3) Amortization of prior service cost (1) (1) (3) (3) Recognized actuarial loss - 1 - 1 Net postretirement benefit cost $(1) $- $(2) $(1) Employee Savings Plan Benefits We sponsor the Retirement Savings Plus Plan (RSP Plan), a defined contribution benefit plan that allows eligible participants to make contributions to their accounts up to specified limits. Under the RSP Plan, we made $5 million in matching contributions to participant accounts in the first nine months of 2008 and $5 million in the same period last year. 65000000 13000000 143000000 145000000 104000000 21000000 229000000 234000000 5000000 0 -12000000 -24000000 38000000 37000000 112000000 108000000 261000000 159000000 1193000000 987000000 181000000 172000000 131000000 189000000 391000000 143000000 11000000 19000000 14000000 19000000 17000000 Note 4 - Common Shareholders' Equity Share Repurchase Program In March 2001, our Board of Directors approved the purchase of up to 600,000 shares of our common stock to be used for issuances under the Officer Incentive Plan. In the first nine months of 2008, we purchased 10,333 shares under this plan. As of September 30, 2008, we had purchased a total 307,567 shares, leaving 292,433 shares available for purchase. In February 2006, our Board of Directors authorized a plan to purchase up to 8 million shares of our outstanding common stock over a five-year period. These purchases are intended to offset share issuances under our employee and non-employee director incentive compensation plans and our dividend reinvestment and stock purchase plans. Stock purchases under this program may be made in the open market or in private transactions at times and in amounts that we deem appropriate. There is no guarantee as to the exact number of shares that we will purchase, and we can terminate or limit the program at any time. We will hold the purchased shares as treasury shares. We did not purchase shares under this program during the first nine months of 2008. As of September 30, 2008, we had repurchased 3,049,049 shares at a weighted average price of $38.58. 27000000 89000000 172000000 386000000 7000000 -4000000 12000000 -1000000 0.85 0.17 1.87 1.87 2000000 0 6000000 1000000 -8000000 -3000000 -30000000 -23000000 76.4 77.0 76.2 77.4 4780000000 4597000000 4208000000 19000000 24000000 25000000 152000000 190000000 204000000 769000000 580000000 576000000 1940000000 1797000000 1415000000 53000000 15000000 126000000 55000000 320000000 349000000 40000000 31000000 27000000 88000000 92000000 -254000000 -191000000 0.85 0.17 1.87 1.88 10000000 11000000 33000000 31000000 104000000 107000000 337000000 334000000 29000000 47000000 41000000 1675000000 1675000000 1548000000 1822000000 1634000000 1366000000 16000000 10000000 11000000 39000000 35000000 39000000 43000000 55000000 47000000 83000000 87000000 82000000 4564000000 4461000000 4416000000 162000000 115000000 100000000 1000000 -2000000 9000000 -82000000 202000000 232000000 12000000 24000000 76400000 76800000 -93000000 -96000000 3000000 -1000000 -1000000 -17000000 -14000000 -15000000 Note 1 - Accounting Policies and Methods of Application General AGL Resources Inc. is an energy services holding company that conducts substantially all its operations through its subsidiaries. Unless the context requires otherwise, references to "we," "us," "our," or "the company" mean consolidated AGL Resources Inc. and its subsidiaries (AGL Resources). The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by GAAP. We have prepared the accompanying unaudited condensed consolidated financial statements under the rules of the SEC. Under such rules and regulations, we have condensed or omitted certain information and notes normally included in financial statements prepared in conformity with GAAP. However, the condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are, in the opinion of management, necessary for a fair presentation of our financial results for the interim periods. For a glossary of key terms and referenced accounting standards, see page 3. You should read these condensed consolidated financial statements in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC on February 7, 2008. Due to the seasonal nature of our business, our results of operations for the three and nine months ended September 30, 2008 and 2007, and our financial condition as of December 31, 2007, and September 30, 2008 and 2007, are not necessarily indicative of the results of operations and financial condition to be expected as of or for any other period. Basis of Presentation Our condensed consolidated financial statements include our accounts, the accounts of our majority-owned and controlled subsidiaries and the accounts of variable interest entities for which we are the primary beneficiary. This means that our accounts are combined with our subsidiaries' accounts. We have eliminated any intercompany profits and transactions in consolidation; however, we have not eliminated intercompany profits when such amounts are probable of recovery under the affiliates' rate regulation process. Certain amounts from prior periods have been reclassified and revised to conform to the current period presentation. We currently own a noncontrolling 70% financial interest in SouthStar and Piedmont owns the remaining 30%. Our 70% interest is noncontrolling because all significant management decisions require approval by both owners. We record the earnings allocated to Piedmont as a minority interest in our condensed consolidated statements of income and we record Piedmont's portion of SouthStar's capital as a minority interest in our condensed consolidated balance sheets. We are the primary beneficiary of SouthStar's activities and have determined that SouthStar is a variable interest entity as defined by FIN 46, which was revised in December 2003, FIN 46R. We determined that SouthStar is a variable interest entity because our equal voting rights with Piedmont are not proportional to our contractual obligation to absorb 75% of any losses or residual returns from SouthStar, except those losses and returns related to customers in Ohio and Florida. Earnings related to SouthStar's customers in Ohio and Florida are allocated 70% to us and 30% to Piedmont. In addition, SouthStar obtains substantially all its transportation capacity for delivery of natural gas through our wholly owned subsidiary, Atlanta Gas Light. Use of Accounting Estimates The preparation of our financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosures of contingent assets and liabilities. We based our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, and we evaluate our estimates on an ongoing basis. Each of our estimates involves complex situations requiring a high degree of judgment either in the application and interpretation of existing literature or in the development of estimates that impact our financial statements. The most significant estimates include our PRP accruals, environmental liability accruals, allowance for uncollectible accounts and other contingencies, pension and postretirement obligations, derivative and hedging activities, unbilled revenues and provision for income taxes. Our actual results could differ from our estimates, and such differences could be material. Inventories For our distribution operations segment, we record natural gas stored underground at WACOG. For Sequent and SouthStar, we account for natural gas inventory at the lower of WACOG or market price. Sequent and SouthStar evaluate the average cost of their natural gas inventories against market prices to determine whether any declines in market prices below the WACOG are other than temporary. For any declines considered to be other than temporary, we record adjustments to reduce the weighted average cost of the natural gas inventory to market price. SouthStar recorded LOCOM adjustments of $18 million in the three and nine months ended September 30, 2008 and did not record LOCOM adjustments in 2007. Sequent recorded LOCOM adjustments of $34 million in the three and nine months ended September 30, 2008 and $1 million and $4 million for the three and nine months ended September 30, 2007, respectively. Stock-Based Compensation In the first nine months of 2008, we issued grants of approximately 258,000 stock options and 207,000 restricted stock units, which will result in the recognition of approximately $2 million of stock-based compensation expense in 2008. No material share awards have been granted to employees whose compensation is subject to capitalization. We use the Black-Scholes pricing model to determine the fair value of the options granted. On an annual basis, we evaluate the assumptions and estimates used to calculate our stock-based compensation expense. There have been no significant changes to our stock-based compensation, as described in Note 4 to our Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2007. Comprehensive Income Our comprehensive income includes net income plus OCI, which includes other gains and losses affecting shareholders' equity that GAAP excludes from net income. Such items consist primarily of gains and losses on certain derivatives designated as cash flow hedges and unfunded or over funded pension and postretirement obligations. The following table illustrates our OCI activity. Three months ended September 30, In millions 2008 2007 Cash flow hedges: Net derivative unrealized gains (losses) arising during the period (net of taxes of $- in 2008 and $1 in 2007) $(1) $2 Less reclassification of realized losses included in income (net of taxes of $- in 2008 and $1 in 2007) 1 1 Total $- $3 Nine months ended September 30, In millions 2008 2007 Cash flow hedges: Net derivative unrealized gains arising during the period (net of taxes of $2 in 2008 and $1 in 2007) $3 $2 Less reclassification of realized gains included in income (net of taxes of $3 in 2008 and $3 in 2007) (4) (5) Pension adjustments (net of taxes of $- in 2007) - 1 Total $(1) $(2) Earnings per Common Share We compute basic earnings per common share by dividing our income available to common shareholders by the weighted-average number of common shares outstanding daily. Diluted earnings per common share reflect the potential reduction in earnings per common share that could occur when potentially dilutive common shares are added to common shares outstanding. We derive our potentially dilutive common shares by calculating the number of shares issuable under restricted stock, restricted stock units and stock options. The future issuance of shares underlying the restricted stock and restricted share units depends on the satisfaction of certain performance criteria. The future issuance of shares underlying the outstanding stock options depends upon whether the exercise prices of the stock options are less than the average market price of the common shares for the respective periods. The following table shows the calculation of our diluted shares, assuming restricted stock and restricted stock units currently awarded under the plan ultimately vest and stock options currently exercisable at prices below the average market prices are exercised. Three months ended September 30, In millions 2008 2007 Denominator for basic earnings per share (1) 76.4 77.0 Assumed exercise of restricted stock, restricted stock units and stock options 0.2 0.4 Denominator for diluted earnings per share 76.6 77.4 (1) Daily weighted-average shares outstanding. Nine months ended September 30, In millions 2008 2007 Denominator for basic earnings per share (1) 76.2 77.4 Assumed exercise of restricted stock, restricted stock units and stock options 0.3 0.4 Denominator for diluted earnings per share 76.5 77.8 (1) Daily weighted-average shares outstanding. The following table contains the weighted average shares attributable to outstanding stock options that were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive, as the exercise prices were greater than the average market price: September 30, In millions 2008 2007 (1) Three months ended 2.1 0.1 Nine months ended 1.6 0.0 (1) 0.0 values represent amounts less than 0.1 million. The increase in the number of shares that were excluded from the computation is the result of a significant decline in the market value of our common shares at September 30, 2008 as compared to September 30, 2007. Income Taxes We adopted FIN 48 on January 1, 2007, and as of September 30, 2008, December 31, 2007 or September 30, 2007, we did not have a liability for unrecognized tax benefits. We do not collect income taxes from our customers on behalf of governmental authorities. We do collect and remit state and local taxes and record these amounts within our condensed consolidated balance sheets. Therefore, EITF No. 06-3 does not apply to us. There have been no significant changes to our income taxes as described in Note 8 to our Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2007. Regulatory Assets and Liabilities We have recorded regulatory assets and liabilities in our condensed consolidated balance sheets in accordance with SFAS 71. Our regulatory assets and liabilities, and associated liabilities for our unrecovered PRP costs, unrecovered ERC and the associated assets and liabilities for our Elizabethtown Gas hedging program, are summarized in the following table. Sept. 30 Dec. 31 Sept. 30 In millions 2008 2007 2007 Regulatory assets Unrecovered PRP costs $242 $285 $288 Unrecovered ERC 144 158 156 Unrecovered postretirement benefit costs 11 12 12 Unrecovered seasonal rates 10 11 10 Unrecovered PGA 33 23 15 Other 31 24 24 Total regulatory assets 471 513 505 Associated assets Elizabethtown Gas hedging program 15 4 9 Total regulatory and associated assets $486 $517 $514 Regulatory liabilities Accumulated removal costs $176 $169 $168 Elizabethtown Gas hedging program 15 4 9 Unamortized investment tax credit 15 16 16 Deferred PGA 14 28 15 Regulatory tax liability 19 20 21 Other 21 19 18 Total regulatory liabilities 260 256 247 Associated liabilities PRP costs 195 245 251 ERC 95 96 90 Total associated liabilities 290 341 341 Total regulatory and associated liabilities $550 $597 $588 There have been no significant changes to our regulatory assets and liabilities as described in Note 1 to our Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2007. Accounting Developments Previously discussed SFAS 160 In December 2007, the FASB issued SFAS 160, which is effective for fiscal years beginning after December 15, 2008. SFAS 160 will require us to present our minority interest, to be referred to as a noncontrolling interest, separately within the capitalization section of our consolidated balance sheets. We will adopt SFAS 160 on January 1, 2009. SFAS 161 In March 2008, the FASB issued SFAS 161, which is effective for fiscal years beginning after November 15, 2008. SFAS 161 amends the disclosure requirements of SFAS 133 to provide an enhanced understanding of how and why derivative instruments are used, how they are accounted for and their effect on an entity's financial condition, performance and cash flows. We will adopt SFAS 161 on January 1, 2009 which will require additional disclosures, but will not have a financial impact to our consolidated results of operations, cash flows or financial condition. FSP EITF 03-6-1 The FASB issued this FSP in June 2008 and it is effective for fiscal years beginning after December 15, 2008. This FSP classifies unvested share-based payment grants containing nonforfeitable rights to dividends as participating securities that will be included in the computation of earnings per share. As of September 30, 2008, we had approximately 149,000 restricted shares with nonforfeitable dividend rights. We will adopt FSP EITF 03-6-1 on January 1, 2009. Recently issued FSP FAS 133-1 The FASB issued this FSP in September 2008 and it is effective for fiscal years beginning after November 15, 2008. This FSP requires more detailed disclosures about credit derivatives, including the potential adverse effects of changes in credit risk on the financial position, financial performance and cash flows of the sellers of the instruments. This FSP will have no financial impact to our consolidated results of operations, cash flows or financial condition. We will adopt FSP FAS 133-1 on January 1, 2009. FSP FAS 157-3 The FASB issued this FSP in October 2008 and it is effective upon issuance including prior periods for which financial statements have not been issued. This FSP clarifies the application of SFAS 157 in an inactive market, including; how internal assumptions should be considered when measuring fair value, how observable market information in a market that is not active should be considered and how the use of market quotes should be used when assessing observable and unobservable data. We adopted this FSP as of September 30, 2008, which had no financial impact to our consolidated results of operations, cash flows or financial condition. -260000000 -57000000 568000000 578000000 383000000 94000000 86000000 71000000 0 -57000000 66000000 8000000 1724000000 1661000000 1623000000 124000000 135000000 132000000 20000000 23000000 24000000 172000000 69000000 90000000 143000000 143000000 6504000000 6258000000 5831000000 5377000000 5177000000 5142000000 Note 2 - Financial Instruments and Risk Management Netting of Cash Collateral and Derivative Assets and Liabilities under Master Netting Arrangements We maintain accounts with brokers to facilitate financial derivative transactions in support of our energy marketing and risk management activities. Based on the value of our positions in these accounts and the associated margin requirements, we may be required to deposit cash into these broker accounts. On January 1, 2008, we adopted FIN 39-1, which required that we offset cash collateral held in these broker accounts on our condensed consolidated balance sheets with the associated fair value of the instruments in the accounts. Prior to the adoption of FIN 39-1, we presented such cash collateral on a gross basis within other current assets and liabilities on our condensed consolidated balance sheets. Our cash collateral amounts are provided in the following table. As of In millions Sept. 30, 2008 Dec. 31, 2007 Sept. 30, 2007 Right to reclaim cash $53 $3 $18 collateral Obligations to return (1) (10) - cash collateral Total cash collateral $52 $(7) $18 Fair value measurements In September 2006, the FASB issued SFAS 157, which establishes a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. SFAS 157 does not require any new fair value measurements; however, it eliminates inconsistencies in the guidance provided in previous accounting pronouncements. The carrying value of cash and cash equivalents, receivables, accounts payable, other current liabilities, derivative assets, derivative liabilities and accrued interest approximate fair value. The following table shows the carrying amounts and fair values of our long-term debt including any current portions included in our condensed consolidated balance sheets. In millions Carrying amount Estimated fair value As of September 30, 2008 $1,675 $1,671 As of December 31, 2007 1,675 1,710 As of September 30, 2007 1,548 1,556 SFAS 157 was effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. In December 2007, the FASB provided a one-year deferral of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value on a recurring basis, at least annually. We adopted SFAS 157 on January 1, 2008, for our financial assets and liabilities, which primarily consist of derivatives we record in accordance with SFAS 133. The adoption of SFAS 157 primarily impacts our disclosures and did not have a material impact on our condensed consolidated results of operations, cash flows and financial condition. We will adopt SFAS 157 for our nonfinancial assets and liabilities on January 1, 2009, and are currently evaluating the impact to our condensed consolidated results of operations, cash flows and financial condition. As defined in SFAS 157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. We are able to classify fair value balances based on the observance of those inputs. SFAS 157 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The three levels of the fair value hierarchy defined by SFAS 157 are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Our Level 1 items consist of financial instruments with exchange-traded derivatives. Level 2 Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial and commodity instruments that are valued using valuation methodologies. These methodologies are primarily industry-standard methodologies that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. We obtain market price data from multiple sources in order to value some of our Level 2 transactions and this data is representative of transactions that occurred in the market place. As we aggregate our disclosures by counterparty, the underlying transactions for a given counterparty may be a combination of exchange-traded derivatives and values based on other sources. Instruments in this category include shorter tenor exchange-traded and non-exchange-traded derivatives such as OTC forwards and options. Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value. Level 3 instruments include those that may be more structured or otherwise tailored to customers' needs. We do not have any material assets or liabilities classified as level 3. The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2008. As required by SFAS 157, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. Recurring fair value measurements as of September 30, 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 $27 $87 $- $26 $140 Derivatives at distribution operations - 15 - - 15 Derivatives at retail energy operations (3) 32 - - - 32 Total assets $59 $102 $- $26 $187 Liabilities: (2) Derivatives at wholesale services $11 $20 $- $(7) $24 Derivatives at distribution operations - 15 - 1 16 Derivatives at retail energy operations 20 1 - (20) 1 Total liabilities $31 $36 $- $(26) $41 (1) Includes $172 million of current assets and $16 million of long-term assets reflected within our condensed consolidated balance sheet. (2) Includes $34 million of current liabilities and $7 million of long-term liabilities reflected within our condensed consolidated balance sheet. (3) $1 million premium associated with weather derivatives has been excluded as they are based on intrinsic value, not fair value. The determination of the fair values above incorporates various factors required under SFAS 157. These factors include not only the credit standing of the counterparties involved and the impact of credit enhancements (such as cash deposits, letters of credit and priority interests), but also the impact of our nonperformance risk on our liabilities. Derivatives at distribution operations relate to Elizabethtown Gas and are utilized in accordance with a directive from the New Jersey Commission to create a program to hedge the impact of market fluctuations in natural gas prices. These derivative products are accounted for at fair value each reporting period. In accordance with regulatory requirements, realized gains and losses related to these derivatives are reflected in purchased gas costs and ultimately included in billings to customers. Unrealized gains and losses are reflected as a regulatory asset or liability, as appropriate, in our condensed consolidated balance sheets. Sequent's and SouthStar's derivatives include exchange-traded and OTC derivative contracts. Exchange-traded derivative contracts, which include futures and exchange-traded options, are generally based on unadjusted quoted prices in active markets and are classified within level 1. Some exchange-traded derivatives are valued using broker or dealer quotation services, or market transactions in either the listed or OTC markets, which are classified within level 2. At the beginning of 2008, we had a notional principal amount of $100 million of interest rate swap agreements associated with our senior notes. In March 2008, we terminated these interest rate swap agreements. We received a payment of $2 million, which included accrued interest and the fair value of the interest rate swap agreements at the termination date. The payment was recorded as deferred income and classified as a liability in our condensed consolidated balance sheets. The amount will be amortized through January 2011, the remaining life of the associated senior notes. The following table sets forth a reconciliation of the termination of our interest rate swaps, classified as level 3 in the fair value hierarchy. In millions Nine months ended September 30, 2008 Balance as of January 1, 2008 $(2) Realized and unrealized gains - Settlements 2 Transfers in or out of level 3 - Balance as of September 30, 2008 $- Change in unrealized gains (losses) relating to instruments held as of September 30, 2008 $- Transfers in or out of level 3 represent existing assets or liabilities that were either previously categorized as a higher level for which the methodology inputs became unobservable or assets and liabilities that were previously classified as level 3 for which the lowest significant input became observable during the period. Risk Management Our risk management activities are monitored by our Risk Management Committee (RMC) which consists of members of senior management and our Finance and Risk Management Committee (FRMC) which consists of members from our Board of Directors. Both the RMC and FRMC are charged with reviewing and enforcing our risk management activities. Our risk management policies limit the use of derivative financial instruments and physical transactions within predefined risk tolerances associated with pre-existing or anticipated physical natural gas sales and purchases and system use and storage. We use the following derivative financial instruments and physical transactions to manage commodity price, interest rate, weather and foreign currency risks: " forward contracts " futures contracts " options contracts " financial swaps " treasury locks " weather derivative contracts " storage and transportation capacity transactions " foreign currency forward contracts -29000000 -34000000 -85000000 -92000000 150000000 152000000 158000000 34000000 16000000 9000000 811000000 551000000 654000000 Note 6 - Commitments and Contingencies Contractual Obligations and Commitments We have incurred various contractual obligations and financial commitments in the normal course of our operating and financing activities. Contractual obligations include future cash payments required under existing contractual arrangements, such as debt and lease agreements. These obligations may result from both general financing activities and from commercial arrangements that are directly supported by related revenue-producing activities. There were no significant changes to our contractual obligations described in Note 7 to our Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2007. Contingent financial commitments, such as financial guarantees, represent obligations that become payable only if certain predefined events occur and include the nature of the guarantee and the maximum potential amount of future payments that could be required of us as the guarantor. The following table illustrates our contingent financial commitments as of September 30, 2008. Commitments due before Dec. 31, In millions Total 2008 2009 & thereafter Standby letters of credit and performance and surety bonds $48 $8 $40 Litigation We are involved in litigation arising in the normal course of business. The ultimate resolution of such litigation will not have a material adverse effect on our consolidated financial condition, results of operations or cash flows. In March 2008, Jefferson Island served discovery requests on the State of Louisiana and sought a trial date in its pending lawsuit over its natural gas storage expansion project at Lake Peigneur. Jefferson Island also asserted additional claims against the State seeking to obtain a declaratory ruling that Jefferson Island's surface lease, under which it operates its existing two storage caverns, authorizes the creation of the two new expansion caverns separate and apart from the mineral lease challenged by the State. Jefferson Island originally filed the suit against the State in the 19th Judicial District Court in Baton Rouge in September 2006. In addition, in June 2008, the State of Louisiana passed legislation restricting water usage from the Chicot aquifer, which is a main source of fresh water required for the expansion of our Jefferson Island capacity. We contend that this legislation is unconstitutional and have sought to amend the pending litigation to seek a declaration that the legislation is invalid and cannot be enforced. Even if we are not successful on those grounds, we believe the legislation does not materially impact the feasibility of the expansion project. Additional information in the Jefferson Island Storage & Hub, LLC vs. State of Louisiana litigation is described in Note 7 to our Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2007. The ultimate resolution of such litigation cannot be determined, but it is not expected to have a material adverse effect on our consolidated financial condition, results of operations or cash flows. In February 2008, the consumer affairs staff of the Georgia Commission alleged that GNG charged its customers on variable rate plans prices for natural gas that were in excess of the published price, that it failed to give proper notice regarding the availability of potentially lower price plans and that it changed its methodology for computing variable rates. GNG asserted that it fully complied with all applicable rules and regulations, that it properly charged its customers on variable rate plans the rates on file with the Georgia Commission, and that, consistent with its terms and conditions of service, it routinely switched customers who requested to move to another price plan for which they qualified. In order to resolve this matter GNG agreed to pay $2.5 million in the form of credits to customers, or as directed by the Georgia Commission, which was recorded in our condensed consolidated statements of income for the nine months ended September 30, 2008. In February 2008, a class action lawsuit was filed in the Superior Court of Fulton County in the State of Georgia against GNG containing similar allegations to those asserted by the Georgia Commission staff and seeking damages on behalf of a class of GNG customers. This lawsuit was dismissed in September 2008. In March 2008, a second class action suit was filed against GNG in the State Court of Fulton County in the State of Georgia, regarding monthly service charges. This lawsuit alleges that GNG arbitrarily assigned customer service charges rather than basing each customer service charge on a specific credit score. GNG asserts that no violation of law or Georgia Commission rules has occurred, that this lawsuit is without merit and has filed motions to dismiss this class action suit on various grounds. The ultimate resolution of this lawsuit cannot be determined, but is not expected to have a material adverse effect on our condensed consolidated results of operations, cash flows or financial condition. Review of Compliance with FERC Regulations We recently conducted an internal review of our compliance with FERC interstate natural gas pipeline capacity release rules and regulations. Independent of our internal review, we also received data requests from FERC's Office of Enforcement relating specifically to compliance with FERC's capacity release posting and bidding requirements. We have responded to FERC's data requests and are fully cooperating with FERC in its investigation. As a result of this process, we have identified certain instances of possible non-compliance. We are committed to full regulatory compliance and we have met with the FERC Enforcement staff to discuss with them these instances of possible non-compliance. At this time we are unable to predict the outcome of the FERC investigation. -93000000 -92000000 7000000 7000000 1661000000 1724000000 390000000 390000000 667000000 673000000 680000000 723000000 -13000000 -14000000 -63000000 -48000000 413000000 314000000 1675000000 1460000000 75000000 73000000 73000000 202000000 254000000 261000000 535000000 598000000 363000000 Note 7 - Segment Information We are an energy services holding company whose principal business is the distribution of natural gas in six states - Florida, Georgia, Maryland, New Jersey, Tennessee and Virginia. We generate nearly all our operating revenues through the sale, distribution, transportation and storage of natural gas. We are involved in several related and complementary businesses, including retail natural gas marketing to end-use customers primarily in Georgia; natural gas asset management and related logistics activities for each of our utilities as well as for nonaffiliated companies; natural gas storage arbitrage and related activities; and the development and operation of high-deliverability natural gas storage assets. We manage these businesses through four operating segments - distribution operations, retail energy operations, wholesale services and energy investments and a nonoperating corporate segment which includes intercompany eliminations. We evaluate segment performance based primarily on the non-GAAP measure of EBIT, which includes the effects of corporate expense allocations. EBIT is a non-GAAP measure that includes operating income, other income and expenses and minority interest. Items we do not include in EBIT are financing costs, including interest and debt expense and income taxes, each of which we evaluate on a consolidated level. We believe EBIT is a useful measurement of our performance because it provides information that can be used to evaluate the effectiveness of our businesses from an operational perspective, exclusive of the costs to finance those activities and exclusive of income taxes, neither of which is directly relevant to the efficiency of those operations. You should not consider EBIT an alternative to, or a more meaningful indicator of our operating performance than, operating income or net income as determined in accordance with GAAP. In addition, our EBIT may not be comparable to a similarly titled measure of another company. The following table contains the reconciliations of EBIT to operating income, earnings before income taxes and net income for the three and nine months ended September 30, 2008 and 2007. Three months ended September 30, In millions 2008 2007 Operating revenues $539 $369 Operating expenses 413 314 Operating income 126 55 Minority interest 5 - Other income 2 - EBIT 133 55 Interest expense, net (29) (34) Earnings before income taxes 104 21 Income tax expense 39 8 Net income $65 $13 Nine months ended September 30, In millions 2008 2007 Operating revenues $1,995 $1,809 Operating expenses 1,675 1,460 Operating income 320 349 Minority interest (12) (24) Other income 6 1 EBIT 314 326 Interest expense, net (85) (92) Earnings before income taxes 229 234 Income taxes 86 89 Net income $143 $145 Balance sheet information at December 31, 2007, is as follows: In millions Identifiable and total assets (1) Goodwill Distribution operations $4,847 $406 Retail energy operations 282 - Wholesale services 890 - Energy investments 287 14 Corporate and intercompany eliminations (2) (48) - - Consolidated AGL Resources $6,258 $420 (1) Identifiable assets are those assets used in each segment's operations. (2) Our corporate segment's assets consist primarily of cash and cash equivalents and property, plant and equipment and reflect the effect of intercompany eliminations. Summarized income statement information, identifiable and total assets, goodwill and property, plant and equipment expenditures as of and for the three and nine months ended September 30, 2008 and 2007, by segment are shown in the following tables. Three months ended September 30, 2008 In millions Distribution operations Retail energy operations Wholesale services Energy investments Corporate and intercompany eliminations (3) Consolidated AGL Resources Operating revenues from external parties $237 $149 $138 $13 $2 $539 Intercompany revenues (1) 35 - - - (35) - Total operating revenues 272 149 138 13 (33) 539 Operating expenses Cost of gas 101 154 37 3 (34) 261 Operation and maintenance 72 15 13 6 (2) 104 Depreciation and amortization 32 1 1 1 3 38 Taxes other than income taxes 9 - 1 - - 10 Total operating expenses 214 170 52 10 (33) 413 Operating income (loss) 58 (21) 86 3 - 126 Other income 1 - - - 1 2 Minority interest - 5 - - - 5 EBIT $59 $(16) $86 $3 $1 $133 Capital expenditures for property, plant and equipment $62 $- $- $23 $3 $88 Three months ended September 30, 2007 In millions Distribution operations Retail energy operations Wholesale services Energy investments Corporate and intercompany eliminations (3) Consolidated AGL Resources Operating revenues from external parties $219 $128 $13 $9 $- $369 Intercompany revenues (1) 37 - - - (37) - Total operating revenues 256 128 13 9 (37) 369 Operating expenses Cost of gas 83 112 1 - (37) 159 Operation and maintenance 79 16 10 4 (2) 107 Depreciation and amortization 30 1 1 2 3 37 Taxes other than income taxes 9 1 - - 1 11 Total operating expenses 201 130 12 6 (35) 314 Operating income (loss) 55 (2) 1 3 (2) 55 Other income (expense) - 1 - - (1) - Minority interest - - - - - - EBIT $55 $(1) $1 $3 $(3) $55 Capital expenditures for property, plant and equipment $52 $2 $- $8 $6 $68 Nine months ended September 30, 2008 In millions Distribution operations Retail energy operations Wholesale services Energy investments Corporate and intercompany eliminations (3) Consolidated AGL Resources Operating revenues from external parties $1,146 $701 $104 $43 $1 $1,995 Intercompany revenues (1) 147 - - - (147) - Total operating revenues 1,293 701 104 43 (146) 1,995 Operating expenses Cost of gas 694 600 41 4 (146) 1,193 Operation and maintenance 241 50 35 16 (5) 337 Depreciation and amortization 94 3 4 4 7 112 Taxes other than income taxes 27 1 2 1 2 33 Total operating expenses 1,056 654 82 25 (142) 1,675 Operating income (loss) 237 47 22 18 (4) 320 Other income 2 - - - 4 6 Minority interest - (12) - - - (12) EBIT $239 $35 $22 $18 $- $314 Identifiable and total assets (2) $4,992 $271 $1,007 $326 $(92) $6,504 Goodwill $404 $- $- $14 $- $418 Capital expenditures for property, plant and equipment $196 $7 $- $44 $7 $254 Nine months ended September 30, 2007 In millions Distribution operations Retail energy operations Wholesale services Energy investments Corporate and intercompany eliminations (3) Consolidated AGL Resources Operating revenues from external parties $1,079 $653 $50 $27 $- $1,809 Intercompany revenues (1) 137 - - - (137) - Total operating revenues 1,216 653 50 27 (137) 1,809 Operating expenses Cost of gas 612 508 4 - (137) 987 Operation and maintenance 250 50 27 14 (7) 334 Depreciation and amortization 89 4 2 4 9 108 Taxes other than income taxes 25 1 1 1 3 31 Total operating expenses 976 563 34 19 (132) 1,460 Operating income (loss) 240 90 16 8 (5) 349 Other income (expense) 2 1 - (1) (1) 1 Minority interest - (24) - - - (24) EBIT $242 $67 $16 $7 $(6) $326 Identifiable and total assets (2) $4,780 $211 $699 $276 $(135) $5,831 Goodwill $406 $- $- $14 $- $420 Capital expenditures for property, plant and equipment $145 $3 $1 $18 $26 $193 (1) Intercompany revenues - Wholesale services records its energy marketing and risk management revenue on a net basis. Wholesale services' total operating revenues include intercompany revenues of $289 million and $120 million for the three months ended September 30, 2008 and 2007, respectively; and $806 million and $473 million for the nine months ended September 30, 2008 and 2007, respectively. (2) Identifiable assets are those used in each segment's operations. (3) Our corporate segment's assets consist primarily of cash and cash equivalents, property, plant and equipment and reflect the effect of intercompany eliminations. 176000000 169000000 168000000 3726000000 3566000000 3532000000 161000000 0 -79000000 -34000000 43000000 43000000 83000000 418000000 420000000 420000000 -1651000000 -1611000000 -1610000000 -254000000 -193000000 400000 2929000000 2916000000 2801000000 89000000 97000000 88000000 189000000 49000000 0 2000000 6504000000 6258000000 5831000000 14000000 28000000 15000000 74000000 -198000000 7000000 13000000 -161000000 -86000000 143000000 145000000 76.6 77.4 76.5 77.8 0.42 0.41 1.26 1.23 625000000 566000000 527000000 EX-100.CAL 4 atg-20080930_cal.xml EXHIBIT 100 XBRL CALCULATION LINKBASE DOCUMENT EX-100.LAB 5 atg-20080930_lab.xml EXHIBIT 100 XBRL LABEL LINKBASE DOCUMENT Accounts Payable - Trade Energy Marketing and Risk Management Assets Cost of Gas, Total Energy Marketing and Risk Management Liabilities Accumulated Removal Costs Minority Interest in Net Income (Loss) Income (Loss) from Continuing Operations before Income Taxes Income (Loss) from Continuing Operations before Income Taxes Energy Marketing Receivables Energy related receivables arising from financial instruments or contracts (options, swaps, contracts) with original maturity less than one year. Unrecovered Pipeline Replacement Program Costs - Current Portion Costs incurred to replace bare steel/cast iron pipes to be recovered through regulatory rate riders in less than one year. Unrecovered Environmental Remediation Costs - Current Portion Costs incurred for the clean-up of environmental remediation sites to be recovered through regulatory rate riders in less than one year. Unrecovered Pipeline Replacement Program Costs Costs incurred to replace bare steel/cast iron pipes to be recovered through regulatory rate riders beyond one year. Unrecovered Environmental Remediation Costs Costs incurred for the clean-up of environmental remediation sites to be recovered through regulatory rate riders beyond one year. Energy Marketing Trade Payables Energy related payables arising from financial instruments or contracts (options, swaps, contracts) with original maturity less than one year. Accrued Pipeline Replacement Program Costs - Current Portion A regulatory reserve for expected costs replacing bare steel/cast iron pipes within one year. Accrued Environmental Remediation Costs - Current Portion A regulatory reserve for the costs for clean-up of environmental remediation sites within one year. Accrued Pipeline Replacement Program Costs A regulatory reserve for estimated costs of replacing bare steel/cast iron pipes beyond one year. Accrued Environmental Remediation Costs A regulatory reserve for the costs for clean-up of environmental remediation sites beyond one year. Minority Interest in Net Income (Loss) of Consolidated Entities before Income Taxes Amount of net income (loss) from a consolidated entity or investment attributed to noncontrolling equity interest holders. Minority Interest in Net Income (Loss) of Consolidated Entities Amount of net income (loss) from a consolidated entity or investment attributed to noncontrolling equity interest holders. Change in Energy Marketing and Risk Management Assets and Liabilities The net change in Energy marketing and risk managment of assets and liabilities generated by energy trading activities, which involve the purchase and sale of energy under forward contracts at fixed and variable prices and the buying and selling of financial energy contracts that include exchange futures and options and over the counter options and swaps. Energy Marketing Receivables and Payables, Net The net change in Energy related receivables and payables arising from financial instruments or contracts (options, swaps, contracts). Gas, Unbilled and Other Receivables The change in amount of receivables to be collected from sale of gas, unbilled revenues and other, at the financial statement date. Cash Paid During the Period For Cash Paid For Interest Cash paid for interest (net of amount capitalized) during the period. Cash Paid for Income Taxes Cash paid for income taxes (net of amount deferred) during the period. Operation and Maintenance Expense The aggregate costs incurred during an accounting period for operation, repair, maintenance and general administrative expenses Net Income (Loss) The profit or loss of the entity net of income taxes for the reporting period, calculated and presented in the income statement in accordance with GAAP. Net Income (Loss) The profit or loss of the entity net of income taxes for the reporting period, calculated and presented in the income statement in accordance with GAAP. Gas and Trade Payables The change in amount of payables to be paid for purchase of gas, and trade payables, at the financial statement date. Stockholders' Equity Total of all Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity. This excludes temporary equity and is sometimes called permanent equity. Regulatory Assets, Current Regulatory Assets, Noncurrent Derivative Liabilities, Current Interest Expense, Net Interest expense net of interest income Minority Interest Amount of net income (loss) for the period allocated to noncontrolling shareholders, partners, or other equity holders in one or more of the entities included in the reporting entity's consolidated financial statements. Net Income (Loss) Dividends, Common Stock Minority Interest Share of earnings before income taxes from a consolidated entity or investment attributed to noncontrolling equity interest holders. Taxes Other than Income Taxes Expenses related to taxes other than income EX-100.PRE 6 atg-20080930_pre.xml EXHIBIT 100 XBRL PRESENTATION LINKBASE DOCUMENT EX-100.DEF 7 atg-20080930_def.xml EXHIBIT 100 XBRL DEFINITION LINKBASE DOCUMENT -----END PRIVACY-ENHANCED MESSAGE-----