AGL Utility Operations, Retail and Wholesale Show 2003 Gains
Net income for the quarter was $35 million compared to $31.2 million in 4Q2002, and net income for the year rose 24% to $127.9 million on improved results from utility and wholesale operations.
"We were right on track to the finish line in 2003," said CEO Paula G. Rosput. "Value-oriented investors can count on us to maintain the pace in 2004."
Solid performances by the company's major utilities in Georgia, Virginia and Tennessee -- Atlanta Gas Light, Chattanooga Gas and Virginia Natural Gas -- led the results for the year, followed by its retail energy operations through the SouthStar Energy Services joint venture with Piedmont Energy and its wholesale results through Houston-based subsidiary Sequent Energy.
For the year, wholesale energy services contributed $19.6 million in earnings before interest and taxes (EBIT) compared to only $9.1 million in 2002. Regulated distribution operations added $246.8 million in EBIT compared to $224.4 million in 2002, and energy investments (South Star) added $43.1 million compared to $23.6 million in 2002. Lower corporate expenses, primarily the result of lower interest expense reflecting a favorable interest rate environment, also enhanced results.
For the fourth quarter, earnings from distribution increased due mainly to higher operating margins and customer growth. SouthStar's improvement resulted in large part from higher margins, AGL Resources' increased ownership interest in the joint venture, and the resolution of the earnings sharing provisions in the partnership agreement with Piedmont Energy. These improved results for the quarter were partly offset by a decrease in earnings at Sequent, principally resulting from the accounting effect of transactions executed to economically hedge Sequent's gas storage inventory, and to a lesser extent, increased overhead costs, AGL said.
In November 2003, AGL forecasted 2004 full-year earnings per share of between $2.01 and $2.10. The company reaffirmed this earnings guidance for the year.
AGL serves more than 1.8 million customers in three states. Subsidiary Houston-based Sequent Energy Management provides natural gas asset management services, including wholesale trading, marketing, gathering and transportation services as well as third-party asset management. As a member of the SouthStar partnership, AGL markets natural gas to consumers in Georgia under the Georgia Natural Gas brand.
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