Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT_99-2 - SOUTHSTAR - MICHAEL A. BRASWELL - SOUTHERN Co GAS | exhibit_99-2.htm |
| EX-99.3 - EXHIBIT_99-3 - PIVOTAL - DANA A. GRAMS - SOUTHERN Co GAS | exhibit_99-3.htm |
| EX-99.4 - EXHIBIT_99-4 - GAAP RECONCILIATIONS - SOUTHERN Co GAS | exhibit_99-4.htm |
| 8-K - FORM 8-K - SOUTHERN Co GAS | form8_k.htm |
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8:00 am - 8:30 am Registration & Breakfast
8:30 am -8:35 am Welcome Remarks Sarah Stashak
Director, Investor Relations
8:35 am - 8:50 am CEO Remarks John Somerhalder
Chief Executive Officer
8:50 am - 9:30 am Distribution Operations Hank Linginfelter
EVP, Utility Operations
EVP, Utility Operations
9:30 am - 10:00 am SouthStar Mike Braswell
CEO, SouthStar
10:00 am - 10:15 am BREAK
10:15 am - 10:45 am Sequent Pete Tumminello
President, Sequent Energy Management
10:45 am - 11:15 am Pivotal Dana Grams
President, Pivotal Energy Development
11:15 am - 12:00 pm Financial Overview & Drew Evans
Final Q&A Chief Financial Officer
12:00 pm - 1:00 pm LUNCH
Agenda
2010 Accomplishments
• Continued strong focus on safety (our top priority) and on pipeline integrity and
infrastructure enhancement
infrastructure enhancement
• Achieved record earnings results ($3.05 per diluted share, excluding merger-related costs)
• Successfully executed our regulatory strategy, including rate case outcomes and minimizing
recovery lag for capital deployment
recovery lag for capital deployment
o Georgia and Tennessee rate cases
o Infrastructure investment programs with recovery mechanisms
• Realized significant benefits from capital investments in our utility and retail businesses
o Pipeline projects (Hampton Roads Crossing and Magnolia) performed well in first full
year of operations
year of operations
o Earnings benefited from additional ownership in the SouthStar joint venture
• Expanded the service offerings and geographic reach of our wholesale business
• Made significant progress on our long-term storage strategy
• Successfully completed more than $2 billion of financing activity
• Announced transformative merger with Nicor, Inc. in December 2010
2011 Priorities
• Maintain our focus on SAFETY as our top priority
• Successful closing, financing and day-one integration of the Nicor transaction
• Focus on achieving our earnings goals for 2011 (excluding merger-related
costs)
costs)
• Continue to invest in our utility infrastructure to ensure the highest quality
service and reliability for customers
service and reliability for customers
• Execute on our regulatory strategy to achieve constructive regulatory
outcomes and recover prudently incurred expenses and capital investments
outcomes and recover prudently incurred expenses and capital investments
• Optimize the remaining capacity at Golden Triangle Storage Cavern #1,
while continuing to build out Cavern #2
while continuing to build out Cavern #2
• Explore opportunities to unlock value associated with current and planned
storage projects
storage projects
• Maintain strong investment-grade ratings and balance sheet
• Deliver on our commitments to investors
AGL Resources - Nicor Transaction
• Visible and achievable financial and operational benefits driven by increased
scale and scope
scale and scope
• Creates one of the lowest-cost, most diversified natural gas utilities
• Combination of complementary unregulated businesses enhances platform for
growth
growth
• Leverages AGL Resources’ transaction integration expertise
• Enhances earnings profile through expected EPS accretion and increased
growth rate
growth rate
• Combined company expected to maintain solid investment-grade credit ratings
Confidential Materials
For Internal Use Only
Do Not Distribute
For Internal Use Only
Do Not Distribute
2011
A Leading Gas Distribution Company
Note: Map excludes Nicor Tropical Shipping business and Central Valley natural gas storage facility under construction in California.
• Increased scale benefits
customers over time
customers over time
• Best practices shared across
distribution territories and retail
businesses
distribution territories and retail
businesses
• Limited exposure to commodity
prices, weather and bad debt
expense for the combined
company (through cost recovery
and other regulatory
mechanisms)
prices, weather and bad debt
expense for the combined
company (through cost recovery
and other regulatory
mechanisms)
• Non-utility storage capabilities
significantly increased
significantly increased
Cautionary Statements and Supplemental Information
Forward-Looking Statements
Certain expectations and projections regarding our future performance referenced in this presentation, in other reports or statements we file with the SEC or otherwise release to the public, and on our
website, are forward-looking statements. Senior officers and other employees may also make verbal statements to analysts, investors, regulators, the media and others that are forward-looking.
Forward-looking statements involve matters that are not historical facts, such as statements regarding our future operations, prospects, strategies, financial condition, economic performance (including
growth and earnings), industry conditions and demand for our products and services. Because these statements involve anticipated events or conditions, forward-looking statements often include
words such as "anticipate," "assume," "believe," "can," "could," "estimate," "expect," "forecast," "future," "goal," "indicate," "intend," "may," "outlook," "plan," "potential," "predict," "project," "seek,"
"should," "target," "would," or similar expressions. Forward-looking statements contained in this presentation include, without limitation, statements regarding future earnings per share, dividend growth
and EBIT contribution, our priorities for 2011 and the proposed merger with Nicor Inc. Our expectations are not guarantees and are based on currently available competitive, financial and economic
data along with our operating plans. While we believe our expectations are reasonable in view of the currently available information, our expectations are subject to future events, risks and
uncertainties, and there are several factors - many beyond our control - that could cause results to differ significantly from our expectations.
website, are forward-looking statements. Senior officers and other employees may also make verbal statements to analysts, investors, regulators, the media and others that are forward-looking.
Forward-looking statements involve matters that are not historical facts, such as statements regarding our future operations, prospects, strategies, financial condition, economic performance (including
growth and earnings), industry conditions and demand for our products and services. Because these statements involve anticipated events or conditions, forward-looking statements often include
words such as "anticipate," "assume," "believe," "can," "could," "estimate," "expect," "forecast," "future," "goal," "indicate," "intend," "may," "outlook," "plan," "potential," "predict," "project," "seek,"
"should," "target," "would," or similar expressions. Forward-looking statements contained in this presentation include, without limitation, statements regarding future earnings per share, dividend growth
and EBIT contribution, our priorities for 2011 and the proposed merger with Nicor Inc. Our expectations are not guarantees and are based on currently available competitive, financial and economic
data along with our operating plans. While we believe our expectations are reasonable in view of the currently available information, our expectations are subject to future events, risks and
uncertainties, and there are several factors - many beyond our control - that could cause results to differ significantly from our expectations.
Such events, risks and uncertainties include, but are not limited to, changes in price, supply and demand for natural gas and related products; the impact of changes in state and federal legislation and
regulation including changes related to climate change; actions taken by government agencies on rates and other matters; concentration of credit risk; utility and energy industry consolidation; the
impact on cost and timeliness of construction projects by government and other approvals, development project delays, adequacy of supply of diversified vendors, unexpected change in project costs,
including the cost of funds to finance these projects; the impact of acquisitions and divestitures; direct or indirect effects on our business, financial condition or liquidity resulting from a change in our
credit ratings or the credit ratings of our counterparties or competitors; interest rate fluctuations; financial market conditions, including recent disruptions in the capital markets and lending environment
and the current economic downturn; general economic conditions; uncertainties about environmental issues and the related impact of such issues; the impact of changes in weather, including climate
change, on the temperature-sensitive portions of our business; the impact of natural disasters such as hurricanes on the supply and price of natural gas; acts of war or terrorism; and other factors
which are provided in detail in our filings with the Securities and Exchange Commission. Forward-looking statements are only as of the date they are made, and we do not undertake to update these
statements to reflect subsequent changes.
regulation including changes related to climate change; actions taken by government agencies on rates and other matters; concentration of credit risk; utility and energy industry consolidation; the
impact on cost and timeliness of construction projects by government and other approvals, development project delays, adequacy of supply of diversified vendors, unexpected change in project costs,
including the cost of funds to finance these projects; the impact of acquisitions and divestitures; direct or indirect effects on our business, financial condition or liquidity resulting from a change in our
credit ratings or the credit ratings of our counterparties or competitors; interest rate fluctuations; financial market conditions, including recent disruptions in the capital markets and lending environment
and the current economic downturn; general economic conditions; uncertainties about environmental issues and the related impact of such issues; the impact of changes in weather, including climate
change, on the temperature-sensitive portions of our business; the impact of natural disasters such as hurricanes on the supply and price of natural gas; acts of war or terrorism; and other factors
which are provided in detail in our filings with the Securities and Exchange Commission. Forward-looking statements are only as of the date they are made, and we do not undertake to update these
statements to reflect subsequent changes.
Supplemental Information
Company management evaluates segment financial performance based on earnings before interest and taxes (EBIT), which includes the effects of corporate expense allocations and on operating
margin. EBIT is a non-GAAP (accounting principles generally accepted in the United States of America) financial measure that includes operating income, other income and expenses. Items that are
not included in EBIT are financing costs, including debt and interest expense and income taxes. The company evaluates each of these items on a consolidated level and believes 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. Operating margin is a non-GAAP measure calculated as operating revenues
minus cost of gas, excluding operation and maintenance expense, depreciation and amortization, and taxes other than income taxes. These items are included in the company's calculation of
operating income. The company believes operating margin is a better indicator than operating revenues of the contribution resulting from customer growth, since cost of gas is generally passed
directly through to customers. In addition, in this presentation, the company has presented its earnings per share excluding expenses incurred with respect to the proposed Nicor merger. As the
company does not routinely engage in transactions of the magnitude of the proposed Nicor merger, and consequently does not regularly incur transaction related expenses with correlative size, the
company believes presenting EPS excluding Nicor merger expenses provides investors with an additional measure of the company’s core operating performance. EBIT, operating margin and EPS
excluding merger expenses should not be considered as alternatives to, or more meaningful indicators of, the company's operating performance than operating income, net income attributable to AGL
Resources Inc. or EPS as determined in accordance with GAAP. In addition, the company's EBIT, operating margin and non-GAAP EPS may not be comparable to similarly titled measures of another
company. We also present certain non-GAAP financial measures excluding the effects of our proposed merger with Nicor. Because we complete material mergers and acquisitions only occasionally,
we believe excluding these effects from certain measures is useful because they allow investors to more easily evaluate and compare the performance of the Company's core businesses from period
to period. Reconciliations of non-GAAP financial measures referenced in this presentation are available on the company’s Web site at www.aglresources.com
margin. EBIT is a non-GAAP (accounting principles generally accepted in the United States of America) financial measure that includes operating income, other income and expenses. Items that are
not included in EBIT are financing costs, including debt and interest expense and income taxes. The company evaluates each of these items on a consolidated level and believes 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. Operating margin is a non-GAAP measure calculated as operating revenues
minus cost of gas, excluding operation and maintenance expense, depreciation and amortization, and taxes other than income taxes. These items are included in the company's calculation of
operating income. The company believes operating margin is a better indicator than operating revenues of the contribution resulting from customer growth, since cost of gas is generally passed
directly through to customers. In addition, in this presentation, the company has presented its earnings per share excluding expenses incurred with respect to the proposed Nicor merger. As the
company does not routinely engage in transactions of the magnitude of the proposed Nicor merger, and consequently does not regularly incur transaction related expenses with correlative size, the
company believes presenting EPS excluding Nicor merger expenses provides investors with an additional measure of the company’s core operating performance. EBIT, operating margin and EPS
excluding merger expenses should not be considered as alternatives to, or more meaningful indicators of, the company's operating performance than operating income, net income attributable to AGL
Resources Inc. or EPS as determined in accordance with GAAP. In addition, the company's EBIT, operating margin and non-GAAP EPS may not be comparable to similarly titled measures of another
company. We also present certain non-GAAP financial measures excluding the effects of our proposed merger with Nicor. Because we complete material mergers and acquisitions only occasionally,
we believe excluding these effects from certain measures is useful because they allow investors to more easily evaluate and compare the performance of the Company's core businesses from period
to period. Reconciliations of non-GAAP financial measures referenced in this presentation are available on the company’s Web site at www.aglresources.com
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