Previous Statements by AGL
» AGL Resources Inc. Q1 2010 Earnings Call Transcript
» AGL Resources Inc. Q4 2009 Earnings Call Transcript
» AGL Resources Inc. Q3 2009 Earnings Call Transcript
We also describe our business using some non-GAAP measures such as operating margin and EBIT and a reconciliation of those measures to the GAAP financials is available in our earnings release. We will begin with some prepared remarks today before taking your questions and with that let me turn it over to John.John Somerhalder Thank you Steve and good morning everyone. Today we reported second quarter earnings of $0.17 per diluted shares. These results are down $0.09 from the results for the second quarter of last year. There are a couple of significant drivers or our quarterly results. First and most significantly just as in prior years we can have hedged gains and losses on our storage and transportation hedges at our wholesale services business. With an offset in gain or loss occurring in future periods as the economics are fully realized on the hedge storage or transportation positions. During the quarter we had hedged losses primarily from our transportation hedges and to a lesser extent our storage hedges. That value will be recognized in future periods as the positions go to physical delivery or otherwise settled. Last year we had the opposite effect, which is that we had hedged gains on both storage and transportation hedge positions during the quarter. The second driver is related to the impact of weather on our retail business SouthStar. We are off to a good start with SouthStar year-to-date as the weather in the first quarter was 30% colder than normal in Georgia. In the second quarter however weather was 50% warmer than normal and was particularly warm in April resulting in SouthStar’s lower results for the quarter. We also completed the sale of our AGL Networks business on July 1. The results for the quarter include $0.02 per share related primarily to the sales cost on that transaction which was consistent with our expectations. Importantly through the first six months of the year our earnings results of $1.90 per diluted shares are up $0.09 compared to prior year year-to-date results.
As a result we continue to be on track to meet our 2010 earnings guidance range of $2.95 to $3.05 per diluted shares. We have had strong performance from each of our business units to help us achieve these results and Drew will describe each of the business unit variances in more details in a few minutes. Before we do that I would like to briefly describe a couple of the major operational and regulatory issues we will focus our attention on in the second half of the year.As you know we filed the Atlanta Gas Light rate case in early May requesting a total of $54 million to recover prudently incurred investments we had made in the business and increases in estimated operated expenses. The requested increase would raise the typical customer’s annual gas bill by approximately 3%. The Atlanta Gas Light has not been authorized to increase its base rates for customers since 1993. The outcome of our last rate proceeding required the company to file this rate case now and we believe it is important that we be allowed to recover the prudent cost of operating our business and improving our customer service platform. We believe that our request is a very reasonably one given the significant amount of time that has elapsed since our last rate increase in Georgia and the stability in base rate customers have seen over that time period. The hearings in the case will begin in late August and we anticipate a decision by the Georgia Public Service Commission in early November. Both Hank Linginfelter and Bryan Batson are here and can answer any specific questions you have about the rate case. Turning to our unregulated operations, we have made very good progress on a couple of projects in our pivotal business. We continue to make excellent progress on building our Golden Triangle storage facility in Texas and are planning to begin initial commercial operation for the facility in September. We have leased the cavern and are now nearing completion of the nine mile pipeline header system and finalizing work on the compressor station. Read the rest of this transcript for free on seekingalpha.com