UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ____________ Commission File Number 1-10042 ATMOS ENERGY CORPORATION (Exact name of registrant as specified in its charter) TEXAS AND VIRGINIA 75-1743247 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) Three Lincoln Centre, Suite 1800 5430 LBJ Freeway, Dallas, Texas 75240 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (972) 934-9227 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered ------------------- --------------------- Common stock, No Par Value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- 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. [X] "continued"
The aggregate market value of the voting stock held by non-affiliates of the registrant was $884,271,000 as of November 25, 1998. On November 25, 1998 the registrant had 30,516,286 shares of common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Annual Report to Shareholders for the year ended September 30, 1998 are incorporated by reference into Parts I, II and IV of this report. Portions of the registrant's Definitive Proxy Statement to be filed for the Annual Meeting of Shareholders on February 10, 1999 are incorporated by reference into Part III of this report.
Cautionary Statement under the Private Securities Litigation Reform Act of 1995 The matters discussed or incorporated by reference in this Annual Report on Form 10-K may contain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this Report regarding the Company's financial position, business strategy and plans and objectives of management of the Company for future operations, are forward-looking statements made in good faith by the Company and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this Report or in any of the Company's other documents or oral presentations, the words "anticipate," "expect," "estimate," "plans," "believes," "objective," "forecast," "goal" or other similar words are intended to identify forward- looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements relating to the Company's operations, markets, services, rates, recovery of costs, availability of gas supply, and other factors. These risks and uncertainties include, but are not limited to, national, regional, and local economic and competitive conditions, regulatory and business trends and decisions, technological developments, Year 2000 issues, inflation rates, weather conditions, and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the Company. Accordingly, while the Company believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that such expectations will be realized or will approximate actual results. 3
PART I ITEM 1. BUSINESS Atmos Energy Corporation (the "Company") was organized under the laws of the State of Texas in 1983 as a subsidiary of Pioneer Corporation ("Pioneer") for the purposes of owning and operating Pioneer's natural gas distribution business in Texas. Immediately following the transfer of such business, which had been operated by Pioneer and its predecessors since 1906, Pioneer distributed the outstanding stock of the Company, then known as Energas Company, to Pioneer shareholders. In September 1988, the Company changed its name from Energas Company to Atmos Energy Corporation. As a result of its merger with United Cities Gas Company in July 1997, the Company became incorporated in the Commonwealth of Virginia as well as the State of Texas. The Company distributes and sells natural gas and propane to approximately 1,042,000 residential, commercial, industrial, agricultural, and other customers. The Company distributes and sells natural gas through approximately 1,005,000 meters in 802 cities, towns, and communities in service areas located in Texas, Louisiana, Kentucky, Colorado, Kansas, Illinois, Tennessee, Iowa, Virginia, Georgia, South Carolina and Missouri. The Company also transports gas for others through parts of its distribution system. It also distributes propane to approximately 37,000 customers in Kentucky, North Carolina, and Tennessee. The Company's Texas distribution system is operated through its Energas Company division (the "Energas Division") and covers an area having a population of approximately 950,000 people. The economy of the area is based primarily on oil and gas production and agriculture. The principal cities served by the Energas Division include Amarillo, Lubbock, Midland, and Odessa. At September 30, 1998, the Company had 315,000 regulated and non-regulated meters in service in Texas. The Company's Louisiana distribution system is operated through its Trans Louisiana Gas Company division (the "Trans La Division") and covers an area having a population of approximately 250,000 people. The economy of the area is based primarily on oil and gas production, agriculture, and food processing. The principal cities served by the Trans La Division are Lafayette, Pineville, and Natchitoches. At September 30, 1998, the Company had 81,000 meters in service in Louisiana. The Company's Kentucky distribution system is operated through its Western Kentucky Gas Company division (the "Western Kentucky Division") and covers an area having a population of approximately 680,000 people. The economy of the area is based primarily on industry and agriculture. The principal cities served by the Western Kentucky Division include Bowling Green, Owensboro, and Paducah. At September 30, 1998, the Company had 176,000 meters in service in Kentucky. 4
The Company's distribution systems in Colorado and parts of Kansas and Missouri are operated through its Greeley Gas Company division (the "Greeley Division") and covers an area having a combined population of approximately 228,000 people. The economies of the areas served are based on oil and gas production, agriculture and resort business. The principal cities served by the Greeley Division include Greeley, Durango and Lamar, Colorado and Bonner Springs, Herington and Ulysses, Kansas. At September 30, 1998 the Greeley Division had 116,000 meters in service. The Company operates natural gas distribution systems in Georgia, Illinois, Iowa, South Carolina, Tennessee, Virginia, Kansas and Missouri through its United Cities Gas Company division (the "United Cities Division") and covers an area having a combined population of approximately 6.7 million people. The economies of the areas served include customers engaged in the manufacture of asphalt, automobiles, auto parts, chemicals, electronics, food products, metals, textiles and wire, among others. The division also serves several colleges and a major army base. The principal cities and counties served by the United Cities Division include Franklin and Murfreesboro, Tennessee; Wyandotte and Johnson Counties in Kansas; Hannibal, Missouri; and Gainesville and Columbus, Georgia. At September 30, 1998, the United Cities Division had 316,000 meters in service. The Company also operates certain non-utility businesses through various wholly-owned subsidiaries. One subsidiary, United Cities Gas Storage Company ("UCG Storage"), provides natural gas storage services. It owns natural gas storage fields in Kentucky and Kansas to supplement natural gas used by customers in Kansas, Tennessee, and other states. Another subsidiary, UCG Energy Corporation ("UCG Energy"), leases appliances, real estate and equipment, and vehicles to the United Cities Division and others, and owns a small interest in a partnership engaged in exploration and production activities. UCG Energy also owns a 45% interest in Woodward Marketing, L.L.C. ("WMLLC"), a Delaware limited liability company that provides natural gas services. WMLLC provides gas marketing services to industrial customers, municipalities and local distribution companies, including the Trans La, Greeley, and United Cities Divisions. 5
UCG Energy also owns Atmos Propane, Inc., which is engaged primarily in the retail distribution of propane (LP) gas and the wholesale supply of LP gas. It is exiting the transportation of certain products for other companies and the direct merchandising and repair of propane gas appliances. The propane operation has operation and storage centers and store front offices located in Tennessee, Kentucky, and North Carolina, with a total company storage capacity of 2.3 million gallons. As of September 30, 1998, the propane operations served 37,400 customers. During the three-year period ended September 30, 1998, the propane operations added approximately 13,600 customers through acquisitions of eight propane distribution companies and a propane transport company. The natural gas distribution industry is subject to a number of factors, many of which affect the Company from time to time. These include (i) the ongoing need to obtain adequate and timely rate relief from regulatory authorities to recover costs of service and earn a fair return on invested capital; (ii) inherent seasonality of the business; (iii) competition with alternate fuels; (iv) competition with other gas sources for industrial customers, including the ability of some customers to bypass the Company's facilities, which could result in loss of revenues and reduction in the Company's net income; and (v) possible volatility in the supply and price of natural gas and propane. The propane distribution business is also subject to seasonality and competition with alternate fuels and other suppliers. ACQUISITIONS AND MERGERS Since its organization in 1983, the Company has sought to expand its customer base and to diversify the weather patterns, local economic conditions, and regulatory environments to which its operations are subject. As part of this strategy, the Company acquired Trans Louisiana Gas Company, Inc. ("TLG") in January 1986, Western Kentucky Gas Utility Corporation ("WKG") in December 1987, Greeley Gas Company ("GGC") in December 1993, Oceana Heights Gas Company of Thibodaux, Louisiana in November 1995 and United Cities Gas Company ("UCGC") in July 1997. The Company continues to consider and pursue, where appropriate, additional acquisitions of natural gas distribution properties and other business opportunities. For further information regarding the UCGC merger, see Note 2 of notes to consolidated financial statements in the Company's Annual Report to Shareholders. OPERATING STATISTICS The table on the following page reflects the operating statistics of Atmos for fiscal 1998 and 1997 and the restated operating statistics for the previous three years on a pooled basis with UCGC. It is followed by two tables of utility sales and operating statistics by business unit for 1998 and 1997, respectively. 6
ATMOS ENERGY CORPORATION CONSOLIDATED OPERATING STATISTICS <TABLE> <CAPTION> Year ended September 30, ----------------------------------------------------------- 1998 1997 1996 1995 1994 ----------- ----------- ----------- --------- --------- <S> <C> <C> <C> <C> <C> METERS IN SERVICE, end of year Residential 889,074 870,747 860,229 834,376 825,310 Commercial 94,302 92,703 91,960 90,093 93,250 Industrial(incl. agricultural) 16,322 17,217 19,403 19,762 20,219 Public authority and other 4,834 4,781 4,716 4,982 4,949 ---------- ---------- ---------- -------- -------- Total utility meters 1,004,532 985,448 976,308 949,273 943,728 Propane customers 37,400 29,097 26,108 23,359 21,693 ---------- ---------- ---------- -------- -------- Total 1,041,932 1,014,545 1,002,416 972,572 965,421 ========== ========== ========== ======== ======== HEATING DEGREE DAYS (2) Actual (weighted average) 3,799 3,909 4,043 3,706 3,855 Percent of normal 95% 98% 101% 93% 97% SALES VOLUMES - MMcf (3) Residential 73,472 75,215 77,001 69,666 72,561 Commercial 36,083 37,382 38,247 34,921 35,250 Industrial (incl. agricultural) 24,058 29,452 34,898 35,664 34,249 Public authority and other 4,937 5,195 5,182 4,779 5,242 ---------- ---------- ---------- -------- -------- Total 138,550 147,244 155,328 145,030 147,302 Transportation volumes - MMcf (3) 56,224 48,800 44,146 47,647 47,882 ---------- ---------- ---------- -------- -------- Total utility volumes 194,774 196,044 199,474 192,677 195,184 Storage/energy services volumes 20,823 16,964 22,965 21,626 23,389 ---------- ---------- ---------- -------- -------- TOTAL THROUGHPUT - MMcf (3) 215,597 213,008 222,439 214,303 218,573 ========== ========== ========== ======== ======== PROPANE - Gallons (000's) 33,676 32,975 40,723 28,854 23,175 ========== ========== ========== ======== ======== OPERATING REVENUES (000's) Gas sales revenues Residential $ 410,538 $ 452,864 $ 409,039 $337,768 $375,450 Commercial 184,046 193,302 186,032 150,949 165,883 Industrial (incl. agricultural) 97,472 115,203 128,776 110,437 120,567 Public authority and other 20,504 23,898 21,738 18,185 22,463 ---------- ---------- ---------- -------- -------- Total gas sales revenues 712,560 785,267 745,585 617,339 684,363 Transportation revenues 23,971 19,885 18,872 19,813 21,325 Other gas revenues 8,121 6,385 13,751 9,374 6,879 ---------- ---------- ---------- -------- -------- Total utility revenues 744,652 811,537 778,208 646,526 712,567 Non-utility revenues Propane revenues 29,091 33,194 38,372 24,651 20,788 Leasing/rental revenues 3,977 4,005 4,204 5,959 6,449 Storage/energy services revenues 70,488 58,099 65,907 72,419 86,498 ---------- ---------- ---------- -------- -------- Total non-utility revenues 103,556 95,298 108,483 103,029 113,735 ---------- ---------- ---------- -------- -------- Total operating revenues $ 848,208 $ 906,835 $ 886,691 $749,555 $826,302 ========== ========== ========== ======== ======== AVERAGE SALES PRICE/Mcf $4.87 $5.11 $4.51 $4.07 $4.41 AVERAGE COST OF GAS/Mcf SOLD 3.24 3.51 3.15 2.70 3.10 AVERAGE TRANSPORTATION REVENUES/Mcf .43 .41 .43 .42 .45 </TABLE> See footnotes on page 10. 7
UTILITY SALES AND STATISTICAL DATA BY BUSINESS UNIT - 1998 (1) <TABLE> <CAPTION> Year ended September 30, 1998 ---------------------------------------------------------------- Western United Total Energas Trans La Kentucky Greeley Cities Utility --------- --------- --------- --------- --------- --------- <S> <C> <C> <C> <C> <C> <C> METERS IN SERVICE, at end of year Residential 272,190 74,522 156,107 101,532 284,723 889,074 Commercial 25,982 5,526 18,000 13,674 31,120 94,302 Industrial (incl. agricultural) 14,753 123 442 384 620 16,322 Public authority and other 2,278 977 1,579 - - 4,834 -------- ------- -------- -------- -------- --------- Total 315,203 81,148 176,128 115,590 316,463 1,004,532 ======== ======= ======== ======== ======== ========= HEATING DEGREE DAYS(2) Actual 3,669 1,725 3,771 5,937 3,784 3,799 Normal 3,531 1,771 4,333 6,272 4,070 3,989 Percent of normal 104% 97% 87% 95% 93% 95% SALES VOLUMES-MMcf(2) Residential 23,594 3,670 12,413 10,027 23,768 73,472 Commercial 7,754 1,433 5,530 6,893 14,473 36,083 Industrial (incl. agricultural) 2,076 1,801 3,415 1,652 15,114 24,058 Public authority and other 2,559 917 1,461 - - 4,937 -------- ------- -------- -------- -------- --------- Total 35,983 7,821 22,819 18,572 53,355 138,550 TRANSPORTATION VOLUMES-MMcf(3) 5,526 949 25,813 3,555 20,381 56,224 -------- ------- -------- -------- -------- --------- TOTAL THROUGHPUT-MMcf(3) 41,509 8,770 48,632 22,127 73,736 194,774 ======== ======= ======== ======== ======== ========= OTHER STATISTICS Operating revenues (000's) $156,774 $41,928 $123,588 $ 84,955 $337,407 $744,652 Miles of pipe 13,217 2,248 3,647 3,537 7,459 30,108 Employees(4) 401 134 267 193 621 1,616 Communities served 92 41 163 123 383 802 </TABLE> See footnotes on page 10. 8
UTILITY SALES AND STATISTICAL DATA BY BUSINESS UNIT - 1997 (1) <TABLE> <CAPTION> Year ended September 30, 1997 ---------------------------------------------------------------- Western United Total Energas Trans La Kentucky Greeley Cities Utility --------- --------- --------- --------- --------- --------- <S> <C> <C> <C> <C> <C> <C> METERS IN SERVICE, at end of year Residential 268,518 73,546 154,219 99,472 274,992 870,747 Commercial 25,234 5,409 17,706 13,328 31,026 92,703 Industrial (incl. agricultural) 15,589 120 460 385 663 17,217 Public authority and other 2,230 978 1,573 - - 4,781 -------- ------- -------- -------- -------- -------- Total 311,571 80,053 173,958 113,185 306,681 985,448 ======== ======= ======== ======== ======== ======== HEATING DEGREE DAYS,(2) Actual 3,553 1,523 4,178 6,195 3,980 3,909 Normal 3,531 1,771 4,333 6,274 4,070 3,990 Percent of normal 101% 86% 96% 99% 98% 98% SALES VOLUMES - MMcf(3) Residential 24,292 3,558 13,543 10,227 23,595 75,215 Commercial 7,912 1,383 6,070 6,731 15,286 37,382 Industrial (incl. agricultural) 2,120 1,872 6,128 1,907 17,425 29,452 Public authority and other 2,689 951 1,555 - - 5,195 -------- ------- -------- -------- -------- -------- Total 37,013 7,764 27,296 18,865 56,306 147,244 TRANSPORTATION VOLUMES - MMcf(3) 4,479 624 22,398 3,275 18,024 48,800 -------- ------- -------- -------- -------- -------- TOTAL THROUGHPUT-MMcf(3) 41,492 8,388 49,694 22,140 74,330 196,044 ======== ======= ======== ======== ======== ======== OTHER STATISTICS Operating revenues(000's) $181,127 $51,866 $144,139 $ 91,341 $343,064 $811,537 Miles of pipe 13,214 2,241 3,638 3,864 7,945 30,902 Employees(4) 534 154 330 250 1,031 2,299 Communities served 92 41 163 123 383 802 </TABLE> See footnotes on page 10. 9
NOTES: - ------ (1) These tables present data for Atmos' five utility business units. Their operations include the regulated local distribution companies and certain unregulated gas marketing subsidiaries located in their respective service areas. (2) A heating degree day is equivalent to each degree that the average of the high and the low temperatures for a day is below 65 degrees. The greater the number of heating degree days, the colder the climate. Heating degree days are used in the natural gas industry to measure the relative coldness of weather experienced and to compare relative temperatures between one geographic area and another. Normal degree days are based on 30-year average National Weather Service data for selected locations. (3) Volumes are reported as metered in million cubic feet ("MMcf"). (4) The number of employees excludes 391 and 218 Atmos shared services employees and 186 and 162 non-utility employees in 1998 and 1997, respectively. 10
UTILITY AND NON-UTILITY DATA The following table summarizes certain information regarding the operation of the utility and non-utility businesses of the Company for each of the three years as of and for the period ended September 30, 1998. Prior periods have been restated to reflect the pooling of interests with UCGC on July 31, 1997. Utility Non-utility Total ---------- ----------- ---------- (In thousands) 1998 Operating revenues $ 744,652 $103,556 $ 848,208 Net income 42,147 13,118 55,265 Identifiable assets 1,041,817 99,573 1,141,390 1997 Operating revenues $ 811,537 $ 95,298 $ 906,835 Net income 16,991 6,847 23,838 Identifiable assets 1,001,455 86,856 1,088,311 1996 Operating revenues $ 778,208 $108,483 $ 886,691 Net income 31,905 9,246 41,151 Identifiable assets 926,935 83,675 1,010,610 The utility business is comprised of the Company's five utility divisions: Energas Division, Greeley Division, Trans La Division, United Cities Division and Western Kentucky Division. It includes regulated as well as certain non- regulated utility businesses such as transportation and gas marketing activities in the utility divisions' respective service areas. The non-utility business includes storage and energy services operations which include UCG Storage, Atmos Energy Services, the non-regulated irrigation and industrial gas sales of EnerMart, Inc. and EGASCO in West Texas and the Company's 45% interest in WMLLC (a provider of natural gas services); the propane operations; and the leasing/rental operations of UCG Energy. 11
The non-utility net income for the years ended September 30, 1998, 1997 and 1996 is recapped below: 1998 1997 1996 ------- ------ ------ (In thousands) Non-utility net income: Propane $ (66) $ (90) $1,276 Leasing/Rental 3,272 1,117 1,237 Storage and Energy Services 9,912 5,820 6,733 ------- ------ ------ Total $13,118 $6,847 $9,246 ======= ====== ====== GAS SALES The Company's natural gas distribution business is seasonal and highly dependent on weather conditions in the Company's service areas. Gas sales to residential and commercial customers are greater during the winter months than during the remainder of the year. The volumes of such sales during the winter months will vary with the temperatures during such months. The seasonal nature of the Company's sales to residential and commercial customers is offset partially by the Company's sales in the spring and summer months to its agricultural customers in Texas, Colorado and Kansas who utilize natural gas to operate irrigation equipment. The Company also has weather normalization adjustments in its rate jurisdictions in Tennessee and Georgia, which serve approximately 170,000 customers. The Company believes that it has lessened its sensitivity to weather risk by diversifying its operations into geographic areas having different weather patterns. In addition to weather, the Company's revenues are affected by the cost of natural gas and economic conditions in the areas that the Company serves. Higher gas costs, which the Company is generally able to pass through to its customers under purchased gas adjustment clauses, may cause customers to conserve, or, in the case of industrial customers, to use alternative energy sources. In recent years, natural gas market conditions have changed. Natural gas prices to distributors have become more volatile and the number of competing marketers of natural gas has increased. The Company's gas marketing subsidiaries purchase gas to address requirements for large volume customers in certain highly competitive markets. In certain instances, customers purchase gas directly from others instead of from the Company and the Company transports such gas through its distribution systems to the customers' facilities for a fee. Although transportation of customer-owned gas reduces the Company's operating revenues and corresponding purchased gas cost, the transportation revenues received by the Company generally offset the loss to gross profit. 12
The Company's distribution systems have experienced aggregate peak day deliveries of approximately 1.5 billion cubic feet ("Bcf") per day. The Company has the ability to curtail deliveries to certain customers under the terms of interruptible contracts and applicable state statutes or regulations which enables it to maintain its deliveries to high priority customers. The Company has not imposed curtailment in its Energas Division since the Company began independent operations in 1983 or in its Trans La Division since the Company acquired TLG in 1986. The Western Kentucky Division curtailed deliveries to certain interruptible customers during exceptionally cold periods in December 1989, January 1994 and during the winter of 1996. Neither the Greeley Division nor its predecessor, GGC, have curtailed deliveries to its sales customers since prior to 1980. The United Cities Division curtails interruptible service customers from time to time each year in accordance with the interruptible contracts and tariffs. GAS SUPPLY The Western Kentucky Division's gas supply is delivered by the following pipelines: Texas Gas, Tennessee Gas, Trunkline and ANR, except that a small percentage of the requirements are being purchased directly from intrastate producers that are connected directly to its distribution system. During 1998, WKG sought and was granted approval by the Kentucky Public Service Commission for a Performance Based Rate (PBR) program. This three-year supply and asset management program commenced in July 1998. Noram Energy Services, a division of Houston Industries, was selected to procure supply and manage WKG's pipeline and storage assets. The United Cities Division is served by thirteen interstate pipelines. The majority of the volumes are transported through East Tennessee Pipeline, Southern Natural Gas and Williams Natural Gas. During 1998, the United Cities Division purchased its supply from various producers and marketers including TransCanada, Texaco Gas Marketing, WMLLC, and Williams Energy Service Company. Colorado Interstate Gas Company, Williams Natural Gas, Public Service Company of Colorado, and Northwest Pipeline are the principal transporters of the Greeley Division's requirements. Additionally, the Greeley Division purchased substantial volumes from producers that are connected directly to its distribution system. During 1998, the Greeley Division's primary suppliers were Union Pacific Fuels, Williams Energy Service Company, Duke Energy, KN Energy and WESTAR. The Energas Division receives sales and transportation service from various KN affiliates. Also, the Energas Division purchases a significant portion of its supply from Pioneer Natural Resources (formerly Mesa) which is connected directly to the Company's Amarillo, Texas distribution system. During 1998, other major suppliers included Texaco Gas Marketing, KN Energy, and Public Service of New Mexico. 13
Louisiana Intrastate Gas Company ("LIG"), Acadian Pipeline, Koch Gateway and Texas Gas Transmission Company pipelines deliver most of the Trans La Division's requirements. The Trans La Division purchased its supply from various producers and marketers including Acadiana Gas Marketing, Koch Gas Marketing, LL&E and WMLLC. The Company also owns and operates numerous natural gas storage facilities in Kentucky and Kansas which are used to help meet customer requirements during peak demand periods and to reduce the need to contract for additional pipeline capacity to meet such peak demand periods. Additionally, the Company operates various propane plants and a liquified natural gas ("LNG") plant for peak shaving purposes. The Company also contracts for storage service in underground storage facilities of many of the interstate pipelines serving it. See "Item 2. Properties" for further information regarding the peak shaving facilities. The United Cities Division normally injects gas into pipeline storage systems and UCG Storage's storage system during the summer months and withdraws it in the winter months. At the present time, the underground storage facilities of UCG Storage have a maximum daily output capability of approximately 45,000 Mcf. The United Cities Division has the ability to serve approximately 60% of its peak day load through the use of company owned storage facilities, storage contracts with its suppliers and peaking facilities throughout the system. This ability provides the operational flexibility and security of supply required to meet the needs of the highly weather sensitive residential and commercial markets. 14
REGULATION AND RATES Regulation - ---------- Energas Division In the Energas Division, the governing body of each municipality served by the Company has original jurisdiction over all utility rates, operations, and services within its city limits except with respect to sales of natural gas for vehicle fuel and agricultural use. The Company operates pursuant to non- exclusive franchises granted by the municipalities it serves, which franchises are subject to renewal from time to time. The franchises granted to the Company permit it to conduct natural gas distribution within the municipalities' incorporated limits. The Railroad Commission of Texas has exclusive appellate jurisdiction over all rate and regulatory orders and ordinances of the municipalities and exclusive original jurisdiction over rates and services to customers not located within the limits of a municipality. In Texas, rates for large industrial customers are routinely set by contract negotiation between the Company and its customers pursuant to statutory standards and are filed with and subject to the governmental authority of the municipalities or the Railroad Commission, depending on whether the customer is located inside or outside the limits of a municipality. Historically, the Company's rates for large industrial customers have been accepted as filed. Agricultural sales in Texas are not regulated, except that prices for agricultural sales cannot exceed the prices the Company charges the majority of its commercial or other similar large-volume users in Texas. Trans La Division The Trans La Division is regulated by the Louisiana Public Service Commission, which regulates utility services, rates, and other matters. In most of the parishes and incorporated areas in which the Company operates in Louisiana, it does so pursuant to a non-exclusive franchise granted by the governing authority of each parish or incorporated area. The franchise gives the Company the general privilege to operate its gas distribution business in, as well as the right to install its distribution lines along the roadways of, the parish or the incorporated area. Direct sales of natural gas to industrial customers in Louisiana who utilize the gas for fuel or in manufacturing processes and sales of natural gas for vehicle fuel are exempt from regulation. Western Kentucky Division The Western Kentucky Division is regulated by the Kentucky Public Service Commission, which regulates utility services, rates, issuances of securities, and other matters. The Company operates in the various incorporated cities served by it in Kentucky pursuant to non-exclusive franchises granted by such cities. The franchises grant to the Company the right to operate its gas 15
distribution business in the city and to install its distribution lines and related equipment in and along the city's public rights-of-way. Sales of natural gas for use as vehicle fuel in Kentucky are not subject to regulation. Greeley Division The Greeley Division is regulated by the Colorado Public Utilities Commission, the Kansas Corporation Commission, and the Missouri Public Service Commission with respect to accounting, rates and charges, operating matters, and the issuance of securities. The Company operates in the various incorporated cities served by it in the states of Colorado, Kansas and Missouri under terms of non-exclusive franchises granted by the various cities. The franchises grant to the Company, among other things, the right to install and operate its gas distribution system within the city limits. Most of the Greeley Division's wholesale gas suppliers are regulated by various federal and state commissions. United Cities Division In each state in which the United Cities Division operates, its rates, services and operations as a natural gas distribution company are subject to general regulation by the state public service commission. In addition, the issuance of securities by the Company is subject to approval by the state commissions, except in South Carolina and Iowa. Missouri only regulates the issuance of secured debt. The United Cities Division operates in each community, where necessary, under a franchise granted by the municipality for a fixed term of years. To date, it has been able to renew franchises and expects to continue to do so in the future. The Company is also subject to regulation by the United States Department of Transportation with respect to safety requirements in the operation and maintenance of its gas distribution facilities. The Company's distribution operations are also subject to various state and federal laws regulating environmental matters. From time to time the Company receives inquiries regarding various environmental matters. The Company believes that its properties and operations substantially comply with and are operated in substantial conformity with applicable safety and environmental statutes and regulations. There are no administrative or judicial proceedings arising under environmental quality statutes pending or known to be contemplated by governmental agencies which, if adversely determined, would have a material adverse effect on the Company. 16
Rates - ----- Approximately 88% of the Company's revenues in fiscal 1998 was derived from sales at rates set by or subject to approval by local or state authorities. The method of determining regulated rates varies among the twelve states in which the Company has utility operations. As a general rule, the regulatory authority reviews the Company's rate request and establishes a rate structure intended to generate revenue sufficient to cover the Company's costs of doing business and provide a reasonable return on invested capital. Substantially all of the sales rates charged by the Company to its customers fluctuate with the cost of gas purchased by the Company. Rates established by regulatory authorities are adjusted for increases and decreases in the Company's purchased gas cost through automatic purchased gas adjustment mechanisms. Therefore, while the Company's operating revenues may fluctuate, gross profit (which is defined as operating revenues less purchased gas cost) is generally not eroded or enhanced because of gas cost increases or decreases. The Georgia Public Service Commission and Tennessee Regulatory Authority have approved Weather Normalization Adjustments ("WNAs") that allow the United Cities Division to increase the base rate portion of customers' bills when weather is warmer than normal and decrease the base rate when weather is colder than normal. The net effect of the WNAs was an increase (decrease) in revenues of $682,000, $2,643,000 and $(2,612,000) in 1998, 1997 and 1996, respectively. 17
The following table sets forth the major rate requests made by the Company or other parties during the most recent five years and the action taken on such requests: Effective Amount Amount Jurisdiction Date Requested Received ------------ --------- ----------- ----------- (In thousands) Texas West Texas System 11/18/94 $2,581 $ 1,702 (a) 11/01/96 7,676 5,800 (a) Louisiana 03/01/93 (b) 730 (b) 03/01/94 (b) 1,058 (b) 03/01/95 (b) 1,071 (b) Kentucky 11/01/95 7,665 2,300 (c) 03/01/96 1,000 (c) Colorado 05/01/94 4,527 3,246 01/21/98 - (1,600) (f) Kansas 12/01/93 2,604 2,088 (d) 09/01/95 4,230 2,700 (e) Missouri 10/14/95 1,100 903 South Carolina 02/07/95 341 253 Tennessee 11/15/95 3,951 2,227 Iowa 05/17/96 750 410 Georgia 12/02/96 5,003 3,160 Illinois 07/09/97 1,234 428 Virginia 09/29/95 810 103 10/01/98 - (248) (g) (a) These increases include $200,000 and $500,000 applicable to areas outside the city limits which became effective in January 1995 and April 1997, respectively. (b) A September 1992 rate order approved a Rate Stabilization Clause ("RSC") for three years which provided for an annual adjustment of rates to reflect changes in expenses and investment. The RSC provided the Company the opportunity to earn a return on common equity between 11.75% and 12.25%. The Trans La Division has a hearing scheduled in April 1999 for the Louisiana Public Service Commission to consider its rate of return. 18
(c) The Kentucky rate order provided an increase of $2,300,000, lowered depreciation rates effective November 1, 1995 and provided an additional $1,000,000 beginning March 1, 1996. The order also included a provision for a pilot demand side management program which could cost up to $450,000 annually. (d) This increase is applicable to the service area of the Greeley Division. (e) This increase is applicable to the service area of the United Cities Division. (f) Rate reduction as a result of settlement in a case initiated by the Colorado Consumer Counsel. (g) Rate reduction as a result of a settlement with the Virginia State Corporation Commission staff regarding investigation of earnings. COMPETITION The Company is not currently in significant direct competition with any other distributors of natural gas to residential and commercial customers within its service areas. However, the Company does compete with other natural gas suppliers and suppliers of alternate fuels for sales to industrial and agricultural customers. The Company competes in all aspects of its business with alternative energy sources, including, in particular, electricity. Competition for the residential and commercial customers is increasing. Promotional incentives, improved equipment efficiencies, and promotional rates all contribute to the acceptability of electric equipment. In the United Cities Division, #2 and #6 fuel oil are the primary competition for industrial customers. In addition, certain customers, primarily industrial, may have the ability to by-pass the Company's distribution system by connecting directly with a pipeline. Beginning in 1985, changes in the federal regulatory environment through FERC orders and conditions related to markets and gas supply in the United States have brought increased competition into the natural gas industry. In 1993, FERC Order 636 was implemented by the interstate pipelines that serve the United Cities and Western Kentucky Divisions, but FERC policies have not had a direct impact upon the Company's Energas, Greeley and Trans La Divisions which are primarily supplied by intrastate pipelines. However, competition for large volume customers in the United Cities and Western Kentucky Divisions and other service areas has increased as a result of FERC Order 636. The Company has sought regulatory approvals for competitive pricing on a case by case basis. The United Cities Division has received approval from all the regulatory authorities in the states in which it operates, except Iowa, to place into effect a negotiated tariff rate which allows the United Cities Division to maintain industrial loads at lower margin rates. Iowa has rules which allow for flexible rates, which are competitive with the price of alternative fuels. In addition, 19
certain industrial customers have changed from firm to interruptible rate schedules in order to obtain natural gas at a lower cost. Additionally, the United Cities Division has received approval from all state regulatory authorities to provide transportation service of customer-owned gas. UCG Energy's propane subsidiary is in competition with other suppliers of propane, natural gas and electricity with respect to price and service. The wholesale cost of propane is subject to fluctuations primarily based on demand, availability of supply and product transportation costs. Through its 45% interest in WMLLC, UCG Energy competes with other natural gas brokers in obtaining natural gas supplies for customers. UCG Energy also competes with other rental companies in the rental of real estate, transportation equipment, office facilities and appliances. UCG Storage charges rates to the United Cities Division that are subject to review by the various commissions in the states within which the storage service is provided. Therefore, UCG Storage's rates must be competitive with other storage facilities. UCG Storage also stores natural gas for WMLLC. As a result, UCG Storage is in competition with other companies that store natural gas as to rates charged and deliverability of natural gas. Storage agreements between UCG Storage and the United Cities Division give it first priority to any storage services. EMPLOYEES At September 30, 1998, the Company employed 2,193 persons. See "Utility Sales and Statistical Data by Business Unit - 1998" for the number of employees by business unit. As discussed in Note 2 of notes to consolidated financial statements in the Company's Annual Report to Shareholders, the Company underwent downsizing and restructuring in 1997 and 1998 in connection with the integration of UCGC and the Company's Customer Service Initiative. ITEM 2. PROPERTIES The Company owns an aggregate of 30,108 miles of underground distribution and transmission mains throughout its gas distribution systems. These mains are located on easements or right-of-ways granted to the Company, which generally provide for perpetual use. The Company maintains its mains through a program of continuous inspection and repair and believes that its system of mains is in good condition. The Company also owns and operates nine propane peak shaving plants with a total capacity of approximately 1,050,000 gallons that can produce an equivalent of 19,459 thousand cubic feet ("Mcf") daily and an LNG storage facility with a capacity of 500,000 Mcf which can inject a daily volume of 30,000 Mcf in the system, as well as underground storage fields which are used to supplement the supply of natural gas in periods of peak demand. It has seven underground gas storage facilities in Kentucky and four in Kansas that have a total storage capacity of approximately 21.1 billion cubic feet ("Bcf"). However, 20
approximately 10.0 Bcf of gas in the storage facilities must be retained as cushion gas to maintain reservoir pressure. The maximum daily delivery capability of the storage facilities is approximately 154 MMcf. Substantially all of the Company's properties in its Greeley Division and United Cities Division with recorded values of approximately $88.3 million and $324.7 million, respectively, are subject to liens under First Mortgage Bonds assumed by the Company in its mergers with GGC and UCGC. At September 30, 1998, the liens secured $17.0 million of outstanding 9.4% Series J First Mortgage Bonds due May 1, 2021, and $108.9 million of outstanding Series N, P, Q, R, T, U and V First Mortgage Bonds due at various dates from 2004 through 2022. In 1996 the Company consolidated its administrative offices in Dallas, Texas under one lease. The Company also maintains field offices throughout its distribution system, the majority of which are located in leased premises. Net non-utility property at September 30, 1998 included approximately $25.8 million for propane equipment, $17.2 million for underground storage facilities, and $7.1 million for rental buildings and equipment. The Company holds franchises granted by the incorporated cities and towns that it serves. At September 30, 1998, the Company held 409 such franchises having terms generally ranging from five to 25 years. The Company believes that each of its franchises will be renewed. ITEM 3. LEGAL PROCEEDINGS Incorporated by reference from the 1998 Annual Report to Shareholders, Note 5 of notes to consolidated financial statements. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the fourth quarter of fiscal 1998. 21
EXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth certain information as of September 30, 1998, regarding the executive officers of the Company. It is followed by a brief description of the business experience of each executive officer during the past five years. Years of Name Age Service Office Currently Held - ------------------ --- -------- ----------------------------- Robert W. Best 52 1 Chairman, President and Chief Executive Officer Larry J. Dagley 50 1 Executive Vice President and Chief Financial Officer J. Charles Goodman 37 14 Executive Vice President, Utility Operations Glen A. Blanscet 41 13 Vice President, General Counsel and Corporate Secretary Wynn D. McGregor 45 10 Vice President, Human Resources Robert W. Best was named Chairman, President and Chief Executive Officer and was appointed to the Board of Directors in March 1997. He previously served as Senior Vice President - Regulated Businesses, for Consolidated Natural Gas Company of Pittsburgh, Pennsylvania, from January 1996 to March 1997, and was responsible for its transmission and distribution companies. He previously served as President of Texas Gas Transmission Company of Owensboro, Kentucky, and Houston, Texas, from 1985 to 1995, and from 1992 to 1995 he was President of Transcontinental Gas Pipe Line Corporation. Larry J. Dagley was named Executive Vice President and Chief Financial Officer effective May 1, 1997. From August 1995 to May 1997, he served as Senior Vice President and Chief Financial Officer of Pacific Enterprises, a Los Angeles, California based utility holding company whose principal subsidiary was Southern California Gas Co., the nation's largest gas distribution utility. From 1985 until joining Pacific Enterprises, he served as Senior Vice President and Controller (1985-1993) and Senior Vice President and Chief Financial Officer (1993-1995) of Transco Energy Company, a Houston, Texas based natural gas pipeline company. Prior to joining Transco, Mr. Dagley was an audit partner with Arthur Andersen & Co., where he supervised audits and financial consulting engagements in the energy industry. J. Charles Goodman was named Executive Vice President, Operations in April 1995. He previously served as President of the Company's Trans La Gas Division from February 1993 until April 1995 and as Chief Engineer from February 1989 until February 1993. Glen A. Blanscet was named Vice President, General Counsel and Corporate Secretary in May 1995. He previously served as Assistant 22
General Counsel and Corporate Secretary from January 1994 to May 1995, and Assistant General Counsel from July 1988 to December 1993. Wynn D. McGregor was named Vice President, Human Resources in January 1994. He previously served the Company as Director of Human Resources from February 1991 to December 1993 and as Manager, Compensation and Employment from December 1987 to January 1991. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The information required by this item is set forth under the caption "Market Price of Common Stock and Related Matters" in the Financial Review section of Atmos' 1998 Annual Report to Shareholders filed as Exhibit 13 to this Annual Report on Form 10-K. Such information is incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA The information required by this item is set forth under the caption "Selected Financial Data" in the Financial Review section of Atmos' 1998 Annual Report to Shareholders filed as Exhibit 13 to this Annual Report on Form 10-K. Such information is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information required by this item is set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Financial Review section of Atmos' 1998 Annual Report to Shareholders filed as Exhibit 13 to this Annual Report on Form 10-K. Such information is incorporated herein by reference. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK All of the Company's long-term debt is fixed-rate and, therefore, does not expose the Company to the risk of earnings or cash flow loss due to changes in market interest rates. At September 30, 1998, the Company is not engaged in other contracts which would cause exposure to the risk of material earnings or cash flow loss due to changes in market commodity prices, foreign currency exchange rates, or interest rates. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The response to this Item is submitted as a separate section of this Annual Report on Form 10-K on page 30. 23
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information regarding directors and compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by reference from the Company's Definitive Proxy Statement for the Annual Meeting of Shareholders on February 10, 1999. Information regarding executive officers is included in Part I of this Form 10-K ITEM 11. EXECUTIVE COMPENSATION Incorporated herein by reference from the Company's Definitive Proxy Statement for the Annual Meeting of Shareholders on February 10, 1999. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Incorporated herein by reference from the Company's Definitive Proxy Statement for the Annual Meeting of Shareholders on February 10, 1999. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Incorporated herein by reference from the Company's Definitive Proxy Statement for the Annual Meeting of Shareholders on February 10, 1999. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) 1. and 2. Financial statements and financial statement schedules. The response to this portion of Item 14 is submitted as a separate section of this Annual Report on Form 10-K on page 30. 3. Exhibits The exhibits listed in the accompanying Exhibits Index are filed as part of this Annual Report on Form 10-K. The exhibits numbered 10.21(a) through 10.33 are management contracts or compensatory plans or arrangements. 24
(b) Reports on Form 8-K (1) The Company filed a Form 8-K Current Report dated July 22, 1998 reporting under Item 5, Other Events the following: On July 22, 1998, Atmos, and Merrill Lynch & Co., NationsBanc Montgomery Securities LLC and Edward D. Jones & Co., LP (collectively the "Underwriters") executed a purchase agreement in connection with the sale by Atmos to the Underwriters of a total of $150 million of Atmos' debentures. On July 27, 1998, Atmos executed the global debenture certificate representing a total of $150 million in 6 3/4% debentures due July 15, 2028. (2) The Company also filed a Form 8-K Current Report dated July 23, 1998 reporting under Item 5, Other Events the following: On July 23, 1998 Atmos announced in a news release its earnings and other related financial information for the quarter ended June 30, 1998. It also announced in another news release its pricing of a $150 million debt offering together with other information related to the offering. 25
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To United Cities Gas Company: We have audited the consolidated statements of income and cash flows of United Cities Gas Company (an Illinois corporation) and subsidiaries for the year ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above presented fairly, in all material respects, the results of the operations of United Cities Gas Company and subsidiaries and their cash flows for the year ended December 31, 1996 in conformity with generally accepted accounting principles. Arthur Andersen LLP Nashville, Tennessee February 14, 1997 26
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ATMOS ENERGY CORPORATION (Registrant) By /s/ LARRY J. DAGLEY ---------------------------- Larry J. Dagley Executive Vice President and Chief Financial Officer Date: December 22, 1998 27
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Robert W. Best and Larry J. Dagley, or either of them acting alone or together, as his true and lawful attorney-in-fact and agent with full power to act alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Form 10-K, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated: /s/ ROBERT W. BEST Chairman, President December 22, 1998 - ------------------------- and Chief Executive Robert W. Best Officer /s/ LARRY J. DAGLEY Executive Vice December 22, 1998 - ------------------------- President and Chief Larry J. Dagley Financial Officer /s/ TOM S. HAWKINS, JR. Vice President, December 22, 1998 - ------------------------- Planning and Budgeting Tom S. Hawkins, Jr. and Interim Controller (Principal Accounting Officer) 28
/s/ TRAVIS W. BAIN, II Director December 22, 1998 - ------------------------- Travis W. Bain, II /s/ DAN BUSBEE Director December 22, 1998 - ------------------------- Dan Busbee /s/ RICHARD W. CARDIN Director December 22, 1998 - ------------------------- Richard W. Cardin /s/ THOMAS J. GARLAND Director December 22, 1998 - ------------------------- Thomas J. Garland /s/ GENE C. KOONCE Director December 22, 1998 - ------------------------- Gene C. Koonce /s/ VINCENT J. LEWIS Director December 22, 1998 - ------------------------- Vincent J. Lewis /s/ THOMAS C. MEREDITH Director December 22, 1998 - ------------------------- Thomas C. Meredith /s/ PHILLIP E. NICHOL Director December 22, 1998 ------------------------- Phillip E. Nichol /s/ CARL S. QUINN Director December 22, 1998 ------------------------- Carl S. Quinn /s/ CHARLES K. VAUGHAN Director December 22, 1998 - ------------------------- Charles K. Vaughan /s/ RICHARD WARE II Director December 22, 1998 ------------------------- Richard Ware II 29
INDEX TO FINANCIAL STATEMENTS (Item 8, 14(a) 1 and 2) Form 10-K Page no. --------- Financial statements: Consolidated balance sheets at September 30, 1998 and 1997 (Contained in Exhibit 13) Consolidated statements of income for the years ended September 30, 1998, 1997 and 1996 (Contained in Exhibit 13) Consolidated statements of shareholders' equity for the years ended September 30, 1998, 1997 and 1996 (Contained in Exhibit 13) Consolidated statements of cash flows for the years ended September 30, 1998, 1997 and 1996 (Contained in Exhibit 13) Notes to consolidated financial statements (Contained in Exhibit 13) Supplementary Quarterly Financial Data (unaudited) (Contained in Exhibit 13) Independent Auditors' Reports Ernst & Young LLP (Contained in Exhibit 13) Arthur Andersen LLP 26 Consents of Independent Auditors Ernst & Young LLP 27 Arthur Andersen LLP 28 All financial statement schedules are omitted because the required information is not present, or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements and accompanying notes thereto. The financial statements and the independent auditors' report of Ernst & Young LLP listed in the above index, which are included in the Financial Review section of the Annual Report to Shareholders of Atmos Energy Corporation for the year ended September 30, 1998, are incorporated herein by reference. 30
Page Number or Exhibit Incorporation by Reference Number Description to - ------- ------------------------------------- --------------------------- Plan of Reorganization ---------------------- 2.1 Agreement and Plan of Reorganization Exhibit 2.1 to Registration dated July 19, 1996, by and between Statement on Form S-4 the Registrant and United Cities Gas filed October 4, 1996 Company (File No. 333-13429) 2.2 Amendment No. 1 to Agreement and Plan Exhibit 2.1(a) to of Reorganization dated October 3, Registration Statement on 1996 Form S-4 filed October 4, 1996 (File No. 333-13429) Articles of Incorporation and Bylaws ------------------------------------- 3.1 Restated Articles of Incorporation of Exhibit 3.1 of Form 10-K for the Company, as Amended (as of July fiscal year ended September 31, 1997) 30, 1997 (File No. 1-10042) 3.2 Bylaws of the Company (Amended and Exhibit 3.2 of Form 10-K for Restated as of November 12, 1997) fiscal year ended September 30, 1997 (File No. 1-10042) Instruments Defining Rights of Security Holders ------------------------------------ 4.1 Specimen Common Stock Certificate Exhibit (4)(b) of Form 10- (Atmos Energy Corporation) K for fiscal year ended September 30, 1988 (File No. 1-10042) 4.2 Rights Agreement, dated as of Exhibit 4.1 of Form 8-K November 12, 1997, between the dated November 12, 1997 Company and BankBoston, N.A. (File No. 1-10042) 9 Not Applicable 31
Page Number or Exhibit Incorporation by Reference Number Description to - ------- ------------------------------------- --------------------------- Material Contracts ------------------ 10.1(a) Note Purchase Agreement, dated as of Exhibit 10(c) of Form 8-K December 21, 1987, by and between the filed January 7, 1988 Company and John Hancock Mutual Life (File No. 0-11249) Insurance Company Note Purchase Agreement, dated as of December 21, 1987, by and between the Company and John Hancock Charitable Trust I (Agreement is identical to Hancock Agreement listed above except as to the parties thereto.) Note Purchase Agreement dated as of December 21, 1987, by and between the Company and Mellon Bank, N.A., Trustee under Master Trust Agreement of AT&T Corporation, dated January 1, 1984, for Employee Pension Plans - AT&T - John Hancock - Private Placement (Agreement is identical to Hancock Agreement listed above except as to the parties thereto.) 10.1(b) Amendment to Note Purchase Agreement, Exhibit (10)(b)(ii) of dated October 11, 1989, by and Form 10-K for fiscal year between the Company and John Hancock ended September 30, 1989 Mutual Life Insurance Company (File No. 1-10042) revising Note Purchase Agreement dated December 21, 1987 Amendment to Note Purchase Agreement, dated October 11, 1989, by and between the Company and John Hancock Charitable Trust I revising Note Purchase Agreement dated December 21, 1987. (Amendment is identical to Hancock amendment listed above except as to the parties thereto.) 32
Page Number or Exhibit Incorporation by Reference Number Description to - ------- ------------------------------------- --------------------------- Amendment to Note Purchase Agreement, dated October 11, 1989, by and between the Company and Mellon Bank, N.A., Trustee under Master Trust Agreement of AT&T Corporation, dated January 1, 1984, for Employee Pension Plans - AT&T - John Hancock - Private Placement revising Note Purchase Agreement dated December 21, 1987 (Amendment is identical to Hancock amendment listed above except as to the parties thereto.) 10.1(c) Amendment to Note Purchase Agreement, Exhibit 10(b)(iii) of Form dated November 12, 1991, by and 10-K for fiscal year ended between the Company and John Hancock September 30, 1991 (File Mutual Life Insurance Company No. 1-10042) revising Note Purchase Agreement dated December 21, 1987 Amendment to Note Purchase Agreement, dated November 12, 1991, by and between the Company and John Hancock Charitable Trust I revising Note Purchase Agreement dated December 21, 1987. (Amendment is identical to Hancock amendment listed above except as to the parties thereto.) Amendment to Note Purchase Agreement, dated November 12, 1991, by and between the Company and Mellon Bank, N.A., Trustee under Master Trust Agreement of AT&T Corporation, dated January 1, 1984, for Employee Pension Plans - AT&T - John Hancock - Private Placement revising Note Purchase Agreement dated December 21, 1987. (Amendment is identical to Hancock amendment above except as to the parties thereto.) 10.1(d) Amendment to Note Purchase Agreement Exhibit 4.3(d) to dated December 22, 1993, by and Registration Statement between the Company and John Hancock on Form S-3 filed April Mutual Life Insurance Company revising 20, 1998 (File No. 333- Note Purchase Agreement dated December 50477) 21, 1987. Amendment to Note Purchase Agreement, dated December 22, 1993, by and between the Company and Mellon Bank, N.A., Trustee under Master Trust Agreement of AT&T Corporation, dated January 1, 1982, for Employee Pension Plans - AT&T - John Hancock - Private Placement revising Note Purchase Agreement dated December 21, 1987 (Amendment is identical to Hancock amendment listed above except as to the parties thereto and the amounts thereof). 10.1(e) Amendment to Note Purchase Agreement, Exhibit 4.3(e) to dated December 20, 1994, by and Registration Statement between the Company and John Hancock on Form S-3 filed April Mutual Life Insurance Company 20, 1998 (File No. 333- revising Note Purchase Agreement 50477) dated December 21, 1987 Amendment to Note Purchase Agreement, dated December 20, 1994, by and between the Company and Mellon Bank N.A. Trustee under Master Trust Agreement of AT&T Corporation, dated January 1, 1984, for Employee Pension Plans - AT&T - John Hancock - Private Placement revising Note Purchase Agreement dated December 21, 1987 (Amendment is identical to Hancock amendment listed above). 10.1(f) Amendment to Note Purchase Agreement, Exhibit 4.3(f) to dated July 29, 1997, by and between Registration Statement the Company and John Hancock Mutual on Form S-3 filed April Life Insurance Company revising Note 20, 1998 (File No. 333- Purchase Agreement dated December 21, 50477) 1987 Amendment to Note Purchase Agreement, dated July 29, 1997, by and between the Company and Mellon Bank N.A., Trustee under Master Trust Agreement of AT&T Corporation, dated January 1, 1984, for Employee Pension Plans - AT&T - John Hancock - Private Placement revising Note Purchase Agreement dated December 21, 1987 (Amendment is identical to Hancock amendment listed above except as to the parties thereto and the amounts thereof). 10.2(a) Note Purchase Agreement, dated as of Exhibit 10(c) of Form 10-K October 11, 1989, by and between the for fiscal year ended Company and John Hancock Mutual Life September 30, 1989 (File Insurance Company No. 1-10042) 33
Page Number or Exhibit Incorporation by Reference Number Description to - -------- -------------------------------------- --------------------------- 10.2(b) Amendment to Note Purchase Agreement, Exhibit 10(c)(ii) of Form dated as of November 12, 1991, by and 10-K for fiscal year ended between the Company and John Hancock September 30, 1991 (File Mutual Life Insurance Company No. 1-10042) revising Note Purchase Agreement dated October 11, 1989 10.2(c) Amendment to Note Purchase Agreement, Exhibit 4.4(c) to dated December 22, 1993, by and Registration Statement on between the Company and John Hancock Form S-3 filed April 20, Mutual Life Insurance Company revising 1998 (File No. 333-50477) Note Purchase Agreement dated October 11, 1989 10.2(d) Amendment to Note Purchase Agreement, Exhibit 4.4(d) to dated December 20, 1994, by and Registration Statement on between the Company and John Hancock Form S-3 filed April 20, 1998 Mutual Life Insurance Company revising (File No. 333-50477) Note Purchase Agreement dated October 11, 1989 10.2(e) Amendment to Note Purchase Agreement, Exhibit 4.4(e) to dated July 29, 1997, by and between Registration Statement on the Company and John Hancock Mutual Form S-3 filed April 20, 1998 Life Insurance Company revising Note (File No. 333-50477) Purchase Agreement dated October 11, 1989 10.3(a) Note Purchase Agreement, dated as of Exhibit 10(f)(i) of Form August 29, 1991, by and between the 10-K for fiscal year ended Company and The Variable Annuity Life September 30, 1991 (File No. Insurance Company 1-10042) 10.3(b) Amendment to Note Purchase Agreement, Exhibit 10(f)(ii) of Form dated November 26, 1991, by and 10-K for fiscal year ended between the Company and The Variable September 30, 1991 Annuity Life Insurance Company (File No. 1-10042) revising Note Purchase Agreement dated August 29, 1991 10.3(c) Amendment to Note Purchase Agreement, Exhibit 4.5(c) to dated December 22, 1993, by and Registration Statement on between the Company and The Variable Form S-3 filed April 20, 1998 Annuity Life Insurance Company revising (File No. 333-50477) Note Purchase Agreement dated August 29, 1991 10.3(d) Amendment to Note Purchase Agreement, Exhibit 4.5(d) to dated July 29, 1997, by and between Registration Statement on the Company and The Variable Annuity Form S-3 filed April 20, Life Insurance Company revising Note 1998 (File No. 333- Purchase Agreement dated August 29, 50477) 1991 10.4(a) Note Purchase Agreement, dated as of Exhibit (10)(f) of Form 10-K August 31, 1992, by and between the for fiscal year ended Company and The Variable Annuity Life September 30, 1992 (File No. Insurance Company 1-10042) 10.4(b) Amendment to Note Purchase Agreement, Exhibit 4.6(b) to dated December 22, 1993, by and between Registration Statement on the Company and The Variable Annuity Form S-3 filed April 20, 1998 Life Insurance Company revising Note (File No. 333-50477) Purchase Agreement dated August 31, 1992 10.4(c) Amendment to Note Purchase Agreement, Exhibit 4.6(c) to dated July 29, 1997, by and between Registration Statement on the Company and The Variable Annuity Form S-3 filed April 20, 1998 Life Insurance Company revising Note (File No. 333-50477) Purchase Agreement dated August 31, 1992 10.5(a) Note Purchase Agreement, dated November Exhibit 10.1 of Form 10-Q for 14, 1994, by and among the Company and quarter ended December 31, New York Life Insurance Company, New 1994 (File No. 1-10042) York Life Insurance and Annuity Corporation, The Variable Annuity Life Insurance Company, American General Life Insurance Company, and Merit Life Insurance Company 10.5(b) Amendment to Note Purchase Agreement, Exhibit 4.7(b) to dated July 29, 1997, by and among the Registration Statement on Company and New York Life Insurance Form S-3 filed April 20, 1998 Company, New York Life Insurance and (File No. 333-50477) Annuity Corporation, The Variable Annuity Life Insurance Company, American General Life Insurance Company and Merit Life Insurance Company revising Note Purchase Agreement dated November 14, 1994 10.6(a) Indenture of Mortgage, dated as of Exhibit to Registration July 15, 1959, from United Cities Statement of United Cities Gas Company to First Trust of Gas Company on Form S-3 Illinois, National Association, and (File No. 33-56983) M.J. Kruger, as Trustees, as amended and supplemented through December 1, 1992 (the Indenture of Mortgage through the 20th Supplemental Indenture) 34
Page Number or Exhibit Incorporation by Reference Number Description to - ------- -------------------------------------- ----------------------------- 10.6(b) Twenty-First Supplemental Indenture Exhibit 10.7(a) of Form dated as of February 5, 1997 by and 10-K for fiscal year among United Cities Gas Company and ended September 30, Bank of America Illinois and First 1997 (File No. 1- Trust National Association and Russell 10042) C. Bergman supplementing Indenture of Mortgage dated as of July 15, 1959 10.6(c) Twenty-Second Supplemental Indenture Exhibit 10.7(b) of Form dated as of July 29, 1997 by and among 10-K for fiscal year the Company and First Trust National ended September 30, Association and Russell C. Bergman 1997 (File No. 1- supplementing Indenture of Mortgage 10042) dated as of July 15, 1959 10.7(a) Form of Indenture between United Cities Exhibit to Registration Gas Company and First Trust of Illinois, Statement of United National Association, as Trustee dated Cities Gas Company on as of November 15, 1995 Form S-3 (File No. 33- 56983) 10.7(b) First Supplemental Indenture between Exhibit 10.8(a) of Form the Company and First Trust of Illinois, 10-K for fiscal year National Association, as Trustee ended September 30, dated as of July 29, 1997 1997 (File No. 1-10042) 10.8(a) Seventh Supplemental Indenture, dated Exhibit 10.1 of Form 10-Q as of October 1, 1983 between Greeley for quarter ended Gas Company ("Greeley Division") and June 30, 1994 (File No. the Central Bank of Denver, N.A. 1-10042) ("Central Bank") 10.8(b) Ninth Supplemental Indenture, dated as Exhibit 10.2 of Form 10-Q of April 1, 1991, between the Greeley for quarter ended Division and Central Bank June 30, 1994 (File No. 1-10042) 10.8(c) Bond Purchase Agreement, dated as of Exhibit 10.3 of Form 10-Q April 1, 1991, between the Greeley for quarter ended June 30, Division and Central Bank 1994 (File No. 1-10042) 10.8(d) Tenth Supplemental Indenture, dated as Exhibit 10.4 of Form 10-Q of December 1, 1993, between the for quarter ended Company and Colorado National Bank, June 30, 1994 (File No. formerly Central Bank 1-10042) 35
Page Number or Exhibit Incorporation by Reference Number Description to - ------- -------------------------------------- ----------------------------- 10.9(a) Purchase Agreement for 6-3/4% Exhibit 99.1 of Debentures due 2028 by and among Form 8-K dated July 22, 1998 Merrill Lynch Co., NationsBanc (File No. 1-10042) Montgomery Securities LLC, Edward D. Jones & Co., L.P. and Atmos Energy Corporation dated July 22, 1998 10.9(b) Form of Indenture between Atmos Exhibit 4.1 to Registration Energy Corporation and U.S. Bank Statement on Form S-3 filed Trust National Association, April 20, 1998 Trustee (File No. 333-50477) Gas Supply Contracts -------------------- 10.10(a) Firm Gas Transportation Agreement Exhibit 10.10(a) of Form No. 123535 dated November 1, 1995 10-K for fiscal year ended between Greeley Gas and Public September 30, 1997 Service Company of Colorado (File No. 1-10042) 10.10(b) Transportation Storage Service Exhibit 10.6(b) of Form 10-K Agreement No. TA-0544 between Greeley for fiscal year ended Gas and Williams Natural Gas September 30, 1994 (File Company dated October 1, 1993 No. 1-10042) 10.10(c) No-Notice Storage and Transportion Exhibit 10.6(c) of Form 10-K Service Agreement No. 31013, Rate for fiscal year ended Schedule NNT-1, between Greeley Gas September 30, 1994 and Colorado Interstate Gas Company, (File No. 1-10042) as amended, dated October 1, 1993 (term extended to April 30, 2000 by letter dated January 2, 1996) 10.10(d) Firm Transportation Service Agreement, Rate Schedule TF-1, between Colorado Interstate Gas Company and Greeley Gas dated July 1, 1998 10.10(e) No-Notice Storage and Transporation Delivery Service Agreement, Rate Schedule NNT-1, between Colorado Interstate Gas Company and Greeley Gas dated October 1, 1996 10.11 Amarillo Supply Agreement dated Exhibit 10.7(a) of January 2, 1993 between Energas Form 10-K for fiscal and Pioneer Natural Resources, year ended September 30, 1994 USA, Inc. (formerly Mesa Operating (File No. 1-10042) Company) 10.12(a) Agreement for Firm Intrastate Exhibit 10.1 of Form 10-Q for Transporation of Natural Gas in quarter ended March 31, 1998 the State of Louisiana between (File No. 1-10042) Trans La and Louisiana Intrastate Gas Company L.L.C. (LIG) dated December 22, 1997, and effective July 1, 1997 10.12(b) Agreement for Firm 311(a)(2) Exhibit 10.2 of Form 10-Q for Transporation of Natural Gas in the quarter ended March 31, 1998 State of Louisiana between Trans La (File No. 1-10042) and Louisiana Intrastate Gas Company L.L.C. (LIG) dated December 22, 1997 and effective July 1, 1997 36
Page Number or Exhibit Incorporation by Reference Number Description to - ------- ------------------------------------- --------------------------- 10.13(a) Gas Transportation Agreement between Exhibit 10.3 of Form 10-Q Texas Gas and Western Kentucky Gas for quarter ended December dated November 1, 1993 (Contract no. 31, 1993 (File No. 1- T3355, zone 3) 10042) 10.13(b) Gas Transportation Agreement between Exhibit 10.4 of Form 10-Q Texas Gas and Western Kentucky Gas for quarter ended December dated November 1, 1993 (Contract no. 31, 1993 (File No. 1- T3819, zone 4) 10042) 10.13(c) Gas Transportation Agreement between Exhibit 10.5 of Form 10-Q Texas Gas and Western Kentucky Gas for quarter ended December dated November 1, 1993 (Contract no. 30, 1993 (File No. 1- N0210, zone 2, Contract no. N0340, 10042) zone 3, Contract no. N0435, zone 4) 10.14(a) Gas Transportation Agreement, Exhibit 10.17(a) of Form Contract No. 2550, dated September 1, 10-K for fiscal year ended 1993, between Tennessee Gas Pipeline September 30, 1993 (File Company, a division of Tenneco, Inc. No. 1-10042) ("Tennessee Gas") and Western Kentucky, Campbellsville Service Area 10.14(b) Gas Transportation Agreement, Exhibit 10.17(b) of Form Contract No. 2546, dated September 1, 10-K for fiscal year ended 1993, between Tennessee Gas and September 30, 1993 (File Western Kentucky, Danville Service No. 1-10042) Area 10.14(c) Gas Transportation Agreement, Exhibit 10.17(c) of Form Contract No. 2385, dated September 1, 10-K for fiscal year ended 1993, between Tennessee Gas and September 30, 1993 (File Western Kentucky, Greensburg et al No. 1-10042) Service Area 10.14(d) Gas Transportation Agreement, Exhibit 10.17(d) of Form Contract No. 2551, dated September 1, 10-K for fiscal year ended 1993, between Tennessee Gas and September 30, 1993 (File Western Kentucky, Harrodsburg Service No. 1-10042) Area 37
Page Number or Exhibit Incorporation by Reference Number Description to - ------- ------------------------------------- --------------------------- 10.14(e) Gas Transportation Agreement, Exhibit 10.17(e) of Form Contract No. 2548, dated September 1, 10-K for fiscal year ended 1993, between Tennessee Gas and September 30, 1993 (File Western Kentucky, Lebanon Service No. 1-10042) Area 10.15 Gas Service Agreement (Service for Exhibit 10.5 of Form 10-Q Firm Transportation) between Energas for quarter ended December and Westar Transmission Company dated 31, 1996 (File No. 1- January 1, 1996 10042) 10.16 Gas Service Agreement (Service for Exhibit 10.7 of Form 10-Q Firm Transportation) between Westar for quarter ended December Transmission Company and EnerMart 31, 1996 (File No. 1- dated January 1, 1996 (Irrigation) 10042) 10.17 Gas Service Agreement (Service for Exhibit 10.8 of Form 10-Q Firm Transportation) between KN for quarter ended December Westex and Enermart Trust dated 31, 1996 (File No. 1- January 1, 1996 10042) 10.18 Gas Sales Agreement (Irrigation) Exhibit 10.11 of Form 10-Q between KN Marketing and EnerMart for quarter ended December Trust dated March 1, 1996 31, 1996 (File No. 1- 10042) 10.19 Gas Sales Agreement (Swing) between Exhibit 10.13 of Form 10-Q Energas and KN Marketing, dated for quarter ended December January 1, 1996 31, 1996 (File No. 1- 10042) 10.20(a) Operating Agreement between Energas Exhibit 10.15 of Form 10-Q and Westar Transmission Company, for quarter ended December effective December 1, 1996 31, 1996 (File No. 1-10042) 10.20(b) Gas Transportation Agreement Service Exhibit 10.4 of Form 10-Q Package No. 4272 between United for quarter ended March Cities Gas Company and East 31, 1998 (File No. 1-10042) Tennessee Natural Gas Company dated November 1, 1993 10.20(c) Gas Transportation Agreement Service Exhibit 10.5 of Form 10-Q Package No. 4219 between United for quarter ended March Cities Gas Company and Tennessee Gas 31, 1998 (File No. 1-10042) Pipeline Company dated November 1, 1993 10.20(d) Transportation-Storage Contract Exhibit 10.6 of Form 10-Q (Request 0180) between United Cities for quarter ended March Gas Company and Williams Natural Gas 31, 1998 (File No. 1-10042) Company dated October 1, 1993 10.20(e) Transportation-Storage Contract Exhibit 10.7 of Form 10-Q (Request 0002) between United Cities for quarter ended March Gas Company and Williams Natural Gas 31, 1998 (File No. 1-10042) Company dated October 1, 1993 10.20(f) Service Agreement No. 867760 under Exhibit 10.8 of Form 10-Q Rate Schedule FT between United for quarter ended March Cities Gas Company and Southern 31, 1998 (File No. 1-10042) Natural Gas Company dated November 1, 1993 10.20(g) Service Agreement No. 867761 under Exhibit 10.9 of Form 10-Q for Rate Schedule FT-NN between United quarter ended March 31, 1998 Cities Gas Company and Southern (File No. 1-10042) Natural Gas Company dated November 1, 1993 Executive Compensation Plans and Arrangements ------------------------------------- 10.21(a) *Severance Agreement dated April 1, Exhibit 10.3 of Form 10-Q 1995 between the Company and J. for quarter ended June 30, Charles Goodman 1995 (File No. 1-10042) 10.21(b) *Form of Atmos Energy Corporation Change in Control Severance Agreement--Tier I 10.21(c) *Form of Atmos Energy Corporation Change in Control Severance Agreement--Tier II 38
Page Number or Exhibit Incorporation by Reference Number Description to - ------- ------------------------------------- --------------------------- 10.22(a) *Atmos Energy Corporation Mini-Med Exhibit 10.22 of Form 10-K Plan, as restated effective July 1, for fiscal year ended 1996 September 30, 1996 (File No. 1-10042) 10.22(b) *Amendment No. One to the Atmos Energy Corporation Mini-Med Plan 10.23 *Atmos Energy Corporation Deferred Exhibit 10(x) of Form 10-K Compensation Plan for Outside for fiscal year ended Directors September 30, 1992 (File No. 1-10042). 10.24(a) *Atmos Energy Corporation Retirement Exhibit 10(y) of Form 10-K Plan for Outside Directors for fiscal year ended September 30, 1992 (File No. 1-10042) 10.24(b) *Amendment No. 1 to the Atmos Energy Exhibit 10.2 of Form 10-Q Corporation Retirement Plan for for quarter ended December Outside Directors 31, 1996 (File No. 1- 10042) 10.25(a) *Description of Car Allowance Exhibit 10.26(a) of Form Payments 10-K for fiscal year ended September 30, 1993 (File No. 1-10042) 10.25(b) *Description of Financial and Estate Exhibit 10.25(b) of Form Planning Program 10-K for fiscal year ended September 30, 1997 (File No. 1-10042) 10.25(c) *Description of Sporting Events Exhibit 10.26(c) of Form Program 10-K for fiscal year ended September 30, 1993 (File No. 1-10042) 39
Page Number or Exhibit Incorporation by Reference Number Description to - ------- -------------------------------------- ----------------------------- 10.26 *Atmos Energy Corporation Supplemental Executive Benefits Plan, Amended and Restated in its Entirety August 12, 1998 10.27 *Atmos Energy Corporation Exhibit 10.27 of Form 10-K Restricted Stock Grant Plan for fiscal year ended (Amended and Restated as of September 30, 1997 (File November 12, 1997) No. 1-10042) 10.28 *Atmos Energy Corporation Outside Exhibit 10.28 of Form 10-K Directors Stock-for-Fee Plan fiscal year ended (Amended and Restated as of September 30, 1997 (File November 12, 1997) No. 1-10042) 10.29 *Atmos Energy Corporation Exhibit 10.4 of Form 10-Q Executive Annual Performance for quarter ended Bonus Plan (Amended and Restated December 31, 1996 as of November 13, 1996) (File No. 1-10042) 10.30(a) *Consulting Agreement between the Exhibit 10.2 of Form 10-Q Company and Charles K. Vaughan, for quarter ended June 30, effective October 1, 1994 1997 (File No. 1-10042) 10.30(b) *Amendment No. 1 to Consulting Exhibit 10.3 of Form Agreement between the Company and 10-Q for quarter ended Charles K. Vaughan, dated May 14, June 30, 1997 (File No. 1997 1-10042) 10.30(c) *Amendment No. 2 to Consulting Agreement between the Company and Charles K. Vaughn, dated August 12, 1998 10.31(a) *Atmos Energy Corporation Exhibit 10.31 of Form Executive Retiree Life Plan 10-K for fiscal year ended September 30, 1997 (File No. 1-10042) 40
Page Number or Exhibit Incorporation by Reference Number Description to - ------- ------------------------------------- --------------------------- 10.31(b) *Amendment No. 1 to The Atmos Energy Exhibit 10.31(a) of Form Corporation Executive Retiree Life 10-K for fiscal year ended Plan September 30, 1997 (File No. 1-10042) 10.32 *Atmos Energy Corporation Performance- Based Supplemental Executive Benefits Plan, Effective Date August 12, 1998. 10.33 *Atmos Energy Corporation Executive Nonqualified Deferred Compensation Plan. 11 Not applicable 12 Not applicable 13 Financial Review section of the Company's 1998 Annual Report to Shareholders (with exception of the information incorporated by reference included in Part I and Part II hereof, the 1998 Annual Report to Shareholders is not deemed filed or part of this Form 10-K) 16 Not applicable 18 Not applicable Other Exhibits, as indicated ---------------------------- 21 Subsidiaries of the registrant 22 Not applicable 23.1 Consent of independent auditor, Ernst & Young LLP 23.2 Consent of independent public accountants, Arthur Andersen LLP 24 Power of Attorney Signature page of Form 10-K for fiscal year ended September 30, 1998 27 Financial Data Schedule for Atmos for year ended September 30, 1998 ------------------------------------- *This exhibit constitutes a "management contract or compensatory plan, contract, or arrangement." 41