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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 22, 1999
AGL RESOURCES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
GEORGIA 1-14174 58-2210952
(STATE OR OTHER JURISDICTION (COMMISSION FILE NO.) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
817 WEST PEACHTREE STREET, NW, 10TH FLOOR, ATLANTA, GEORGIA 30308
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(404) 584-9470
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 7. EXHIBITS
99 Form of Press Release, dated September 22, 1999. See the Exhibit
Index on page 4 hereof.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AGL RESOURCES INC.
(Registrant)
/s/ J. Michael Riley
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J. Michael Riley
Senior Vice President and
Chief Financial Officer
Date: September 23, 1999
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EXHIBIT INDEX
Exhibit No. Description
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99 Form of Press Release, dated
September 22, 1999
4
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[AGL RESOURCES LOGO APPEARS HERE]
Exhibit 99
FOR IMMEDIATE RELEASE
CONTACTS
FINANCIAL COMMUNITY MEDIA
MELANIE M. PLATT ROSS WILLIS
VICE PRESIDENT, INVESTOR RELATIONS CORPORATE COMMUNICATIONS
(404) 584-3420 (404) 584-3769
JOSEPH P. HEFFRON
INVESTOR RELATIONS SPECIALIST
(404) 584-3427
AGL RESOURCES MAKES ANNOUNCEMENT REGARDING RESULTS FOR THE FOURTH QUARTER
AND SALE OF JOINT VENTURE INTERESTS
ATLANTA, GEORGIA, September 22, 1999 ----- AGL Resources Inc. (NYSE: ATG) today
announced that it expects operating earnings for its fourth quarter of fiscal
1999 to be lower than analysts' estimates, although the company expects a modest
profit from operations for the quarter. The company also made an announcement
regarding the sale of its wholesale natural gas and power marketing Sonat joint
venture interests.
The company cited the continued accelerated pace of customer migration to gas
marketers for gas sales service as the primary cause for the lower fourth
quarter operating earnings. It originally was anticipated that the customer
migration process would take up to two years, but in fact, it was completed in
less than 12 months.
The unexpected, accelerated pace has created a disparity between the rate at
which the utility has been able to eliminate costs and the rate at which it
needs to eliminate costs to offset revenue that was lost as customers migrated
to marketers. The regulatory framework governing the transition to competition
assumes that Atlanta Gas Light Company's costs associated with providing
customer service decrease each time a customer switches to a marketer and that
those costs are eliminated at the time the switch is made. Based on those
assumptions, each time a customer migrated to a marketer the regulatory
framework reduced the amount of revenue Atlanta Gas Light Company was entitled
to collect. The utility, however, has not been able to immediately eliminate a
significant portion of the costs associated with customer service and, in fact,
customer demand for certain services from the utility increased rather than
decreased during the transition period.
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For example, because of customers' questions about changes in their natural gas
service, the company continued to incur higher-than-expected customer service
expenses as the random assignment date (August 11, 1999) approached.
Responding to significantly heavier-than-normal volumes in telephone inquiries
was among the company's many customer service activities. The company continues
to experience heavier-than-normal customer service activities as it approaches a
fully competitive environment on October 1, 1999.
"We expected that the transition to competition would pose challenges for us.
However, the extremely rapid pace of customer migration, coupled with
unanticipated and unpredictable increases in customer service and marketer
needs, continues to have consequences that are challenging to our financial
results," said Walter M. Higgins, Chairman and CEO. "As a customer-focused
enterprise, we believe it is essential for the utility to maintain a high level
of service to assist customers through a period of new choices and transition."
The company is pursuing aggressive cost management solutions, several of which
are already being implemented, according to Higgins. "The right steps are
underway to bring revenues and expenses into balance in fiscal year 2000 by, for
example, consolidating and automating certain operations."
Earnings for AGL Resources' fourth quarter are expected to be released on
Monday, November 1, 1999.
Sale of Joint Venture Interests
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AGL Resources also announced the completion on August 12, 1999, of the sale of
its interest in Sonat Marketing Company, L.P., a natural gas marketer, for $40
million. In a separate transaction, the company currently expects the sale of
its interest in Sonat Power Marketing, L.P., a wholesale power marketer, for $25
million to close within the next several weeks. Completion of the sale of the
company's interest in Sonat Power Marketing is subject to, among other things,
approval of the Federal Energy Regulatory Commission. According to terms of the
agreement with Sonat, the company will not be allocated any gain or loss from
either joint venture for any period subsequent to June 30, 1999.
In the fourth quarter, the company will recognize a one-time pre-tax gain of
approximately $15 million associated with the completion of the sale of its
interest in the gas marketing joint venture. Proceeds from the sale will be
used for general corporate purposes.
AGL Resources Inc. is a regional energy holding company with operations in the
Southeast. Atlanta Gas Light Company, the largest natural gas distributor in the
Southeast and the company's primary subsidiary, serves nearly 1.5 million
customers in Georgia and, through Chattanooga Gas Company, in southern
Tennessee. Although natural gas distribution is AGL
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Resources' core business, it also is engaged in other energy-related businesses,
including retail energy marketing, customer care services for energy marketers
and wholesale and retail propane sales.
Statements made in this press release other than those containing historical
information should be considered as forward-looking statements and are made
pursuant to the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements involve risks and uncertainties which may
cause results to differ materially from those set forth in these statements. AGL
Resources wishes to caution readers that results and events subject to forward-
looking statements could differ materially because, among other things, of the
following factors: continued uncertainty regarding the impact of changes in
state and federal legislation and regulation on the company and the natural gas
industry, including the company's need to manage resulting challenges regarding
expenses; the completion of the sale of Sonat Power Marketing, L.P. is subject
to regulatory approval; the effects of competition, particularly in markets
where prices and service providers historically have been regulated; changes in
the price and demand for natural gas; and other risks and factors identified in
the company's filings with the Securities and Exchange Commission.
