FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------- ---------------
Commission File Number 33-57687
ATMOS ENERGY CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST
(Full title of the plan and the address of the
plan, if different from that of the issuer named below)
ATMOS ENERGY CORPORATION
Three Lincoln Centre, Suite 1800
5430 LBJ Freeway
Dallas, Texas 75240
(Name of issuer of the securities held
pursuant to the plan and the
address of its principal executive office)
ATMOS ENERGY CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 2001 AND 2000
AND FOR THE YEAR ENDED DECEMBER 31, 2001
CONTENTS
Page
Number
-----------------
Report of Independent Auditors
Audited Financial Statements:
Statements of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Supplemental Schedules:
Schedule H; Line 4i - Schedule of Assets (Held At End of Year) 12
Schedule H; Line 4j - Schedule of Reportable Transactions 13
Signatures 14
Exhibits Index 15
Report of Independent Auditors
The Employee Stock Ownership Plan Committee
Atmos Energy Corporation Employee Stock Ownership Plan and Trust
We have audited the accompanying statements of net assets available for benefits
of the Atmos Energy Corporation Employee Stock Ownership Plan and Trust as of
December 31, 2001 and 2000, and the related statement of changes in net assets
available for benefits for the year ended December 31, 2001. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
(held at end of year) as of December 31, 2001, and reportable transactions for
the year then ended, are presented for purposes of additional analysis and are
not a required part of the financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
ERNST & YOUNG LLP
Dallas, Texas
June 26, 2002
ATMOS ENERGY CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31
---------------------------
2001 2000
----------- -----------
ASSETS
Investments:
Common stock of Atmos Energy Corporation $48,502,656 $50,774,246
Registered Investment Companies:
T. Rowe Price Prime Reserve Fund 793,245 792,264
T. Rowe Price Balanced Fund 2,741,118 2,799,693
T. Rowe Price Spectrum Income Fund 1,645,032 1,261,675
T. Rowe Price Spectrum Growth Fund 5,638,158 5,803,756
T. Rowe Price International Stock Fund 774,112 880,518
T. Rowe Price Short-Term Bond Fund 1,603,654 1,286,619
T. Rowe Price New Horizons Fund 241,606 --
T. Rowe Price New American Growth Fund 6,096,225 6,724,036
T. Rowe Price Equity Income Fund 9,445,301 8,851,815
T. Rowe Price Equity Index 500 Fund 347,323 --
Stein Roe Growth Stock Fund 114,064 --
Common/Collective Trust:
T. Rowe Price Stable Value Fund 6,710,572 6,180,433
Common stock of Entergy Corporation 74,419 80,635
Common stock of Citizens Communications
Company, Class B 2,219,732 --
Participant loans 3,580,518 3,098,635
----------- -----------
Total investments 90,527,735 88,534,325
Receivables:
Participant contributions 153,099 298,216
Company contributions 83,328 169,782
----------- -----------
Total receivables 236,427 467,998
----------- -----------
Net assets available for benefits $90,764,162 $89,002,323
=========== ===========
See accompanying notes
2
ATMOS ENERGY CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2001
ADDITIONS
Investment income (loss):
Net depreciation in fair value of investments $ (8,259,185)
Dividends on common stock 2,513,634
Interest and dividend income on registered investment
companies 1,533,863
Interest on participant loans 312,782
------------
(3,898,906)
Contributions:
Participants 6,073,258
Company 3,300,620
Rollovers 3,961,009
------------
13,334,887
------------
Total additions 9,435,981
DEDUCTIONS
Distributions to participants 7,665,336
Administrative expenses 8,806
------------
Total deductions 7,674,142
------------
Net increase 1,761,839
Net assets available for benefits, at beginning of year 89,002,323
------------
Net assets available for benefits, at end of year $ 90,764,162
============
See accompanying notes
3
ATMOS ENERGY CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2001
1. Description of the Plan
The following brief description of the Atmos Energy Corporation Employee Stock
Ownership Plan and Trust (the "Plan") is provided for general information only.
Participants should refer to the Summary Plan Description for a more complete
description of the Plan's provisions. Effective March 1, 2002, the Plan's name
was changed to the Atmos Energy Corporation Retirement Savings Plan and Trust.
General
The Plan is a trusteed defined contribution retirement benefit plan offered to
eligible employees of Atmos Energy Corporation (the "Company" or "Atmos"). The
Plan is to continue for an indefinite term and may be amended or terminated at
any time by the Board of Directors of Atmos (the "Board"). The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
In July 2001, the Company completed the acquisition of the assets of Louisiana
Gas Service Company and LGS Natural Gas Company ("LGS") from Citizens
Communications Company, formerly Citizens Utilities Company. Substantially all
employees of LGS that joined the Company were immediately eligible to
participate in the Plan. In addition, those employees were allowed to rollover
into the Plan their assets which were held in the Citizens Utilities Company
401(k) Employee Benefit Plan ("Citizens Plan").
Eligibility
Substantially all employees of the Company (except employees cover by other
agreements, leased employees and any employees covered by a collective
bargaining agreement in which Plan participation has not been negotiated through
good faith bargaining) are eligible to participate in the Plan as of the first
payroll period coincident with or immediately following the date of hire
("Participants").
Contributions
Contributions to the Plan include contributions withheld by the Company on
behalf of each Participant in an amount specified by the Participant pursuant to
a salary reduction agreement, as well as matching Company contributions and any
discretionary Company contributions.
4
1. Description of the Plan (continued)
Participants are eligible to receive matching Company contributions after
completing at least one year of service, effective on the earlier of January 1,
April 1, July 1 or October 1 after which one year of service has been completed.
Participants may elect a salary reduction (not to exceed $10,500 in 2001),
ranging from a minimum of 1% of eligible compensation, as defined by the Plan,
up to the maximum allowed by the Internal Revenue Service ("IRS").
The Company shall contribute a matching Company contribution in an amount equal
to 100% of each Participant's salary reduction contributions, up to a maximum of
4% of such Participant's eligible compensation for the Plan year. The Company's
matching contribution meets the current IRS "Safe Harbor" definition. The
Company may revoke or amend any Participant's salary reduction agreement if
necessary to ensure that (1) each Participant's additions for any year will not
exceed applicable IRS Code (the "Code") limitations and (2) Company matching
contributions will be fully deductible for federal income tax purposes.
The Plan also provides that a discretionary contribution may be made at the
option of the Board and in an amount determined annually by the Board. No
discretionary contribution was made to the Plan in 2001.
All contributions to a Participant's account are immediately and fully vested.
Investment Options
The Plan allows Participants' salary reductions to be invested among a variety
of registered investment companies, one common/collective trust and Atmos common
stock.
The Stock Purchase Program Fund, consisting of Atmos common stock, is
non-participant and participant directed. All Company matching and discretionary
contributions are directed into this fund and may not be transferred to another
investment option until the plan year following the year a Participant reaches
age 55. In any plan year subsequent to a Participant reaching age 55, a
Participant will have the opportunity, during the first calendar quarter, to
diversify, in a one-time election, his or her Atmos common stock into other
available investment options. Contributions made to this fund by Participants
may be transferred to other investment options during the last two weeks (14
calendar days) of each calendar quarter with the actual transfer taking place on
the first business day after the start of the next calendar quarter. Effective
March 1, 2002, contributions made to this fund by Participants are allowed to be
traded on a daily basis.
5
1. Description of the Plan (continued)
In May 2000, the Company completed the acquisition of the Missouri natural gas
distribution assets of Associated Natural Gas ("ANG") from a subsidiary of
Southwestern Energy Corporation. Employees of ANG that joined the Company were
allowed to transfer into the Plan his or her assets which were held in the
Southwestern Energy Corporation 401(k) Plan ("Southwestern Plan"). To
accommodate several ANG employees who held Entergy Corporation ("Entergy")
common stock in the Southwestern Plan, an additional account was established in
the Plan to hold the Entergy stock. This account was established as a frozen
account where funds can be liquidated but no new stock added.
To accommodate several LGS employees who held Citizens Communications Company
("Citizens") Class B common stock in the Citizens Plan, an additional account
was established in the Plan to hold the Citizens stock. This account was
established as a frozen account where funds can be liquidated but no new stock
added.
Distributions to Participants
Dividends received on Atmos common stock, in accordance with the Plan, must be
distributed to Participants no later than 90 days after the Plan's year end.
Currently, the dividends are distributed quarterly. However, a Participant may
elect to have his or her dividends reinvested in Atmos common stock by making an
election to make an additional salary reduction contribution in the amount of
the quarterly dividend. This election must be made on the day prior to a
dividend payment date and will remain in effect until the election is changed.
Effective March 1, 2002, dividends received on Atmos common stock will
automatically be reinvested in Atmos common stock. However, a Participant may
elect to have his or her dividends paid in cash. This election may be made at
any time during the period beginning on the first business day on or after the
dividend record date and ending at a time specified by the Employee Stock
Ownership Plan Committee (the "Committee") on the last business day preceding
the dividend payout date. Once a Participant elects to receive his or her
dividends in cash, the election will remain in effect until the election is
changed.
6
1. Description of the Plan (continued)
A Participant may elect to receive an annual distribution of Company matching or
discretionary contributions made to his or her account prior to January 1, 1999
and which were allocated to his or her account at least two years prior to such
election. These annual elections are made as of January 1. The annual
distribution from the Plan is normally made in February of the following year.
Company matching or discretionary contributions made after January 1, 1999 meet
the current IRS "Safe Harbor" definition and are not eligible for in-service
withdrawal.
In the event of retirement, death, termination due to disability or termination
of employment for another reason, a Participant is entitled to withdraw the
entire amount from each of his or her accounts. Withdrawals from a Participant's
salary reduction account, as well as the Company matching and discretionary
accounts, are also allowed upon proof of financial hardship meeting IRS "Safe
Harbor" definitions or, if elected, subsequent to the Participant attaining age
59 1/2. Withdrawals from the Stock Purchase Program Fund may be in the form of
Atmos common stock or cash, as determined by the Committee. However, a
Participant has the right to have withdrawals made in the form of Atmos common
stock upon written notice by the Participant.
Loans to Participants
A Participant may borrow up to the lesser of $50,000 or 50% of his or her
account balance, with a minimum loan amount of $1,000. Loans are repaid through
payroll deductions over periods of up to 5 years for general purpose loans or 15
years for primary residence loans. The interest rate is the U.S. prime rate plus
2% and is fixed over the life of the loan. A Participant may have two loans
outstanding if the proceeds of one of the loans were used to purchase the
Participant's primary residence.
Plan Termination
While the Company has not expressed any intent to terminate the Plan, it is free
to do so at any time. In the event of the dissolution, merger, consolidation or
reorganization of the Company, the Plan shall terminate and the trust shall be
liquidated, unless the Plan is continued by a successor. Upon such liquidation,
all accounts shall be distributed to the Participants.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Plan are prepared on the accrual basis of
accounting. Distributions to participants are recorded when paid.
7
2. Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
Shares of registered investment companies are valued at published market prices
which represent the net asset value of shares held by the Plan at year end.
Investments in common stock are valued at quoted market prices. The fair value
of investments in the common/collective trust are determined periodically by the
Trustees based upon the current fair value of the underlying assets of the fund.
The fair value of participant loans are valued at cost which approximates fair
value.
Purchases and sales of securities are recorded on a trade date basis. Investment
income is recorded on the accrual basis and dividend income is recorded on the
ex-dividend date. Realized gains and losses from security transactions are
reported on the average historical cost method. Capital gains and losses are
included in interest and dividend income.
3. Administration of the Plan and Plan Assets
The Plan is administered by the Committee, consisting of at least three persons
who are appointed by the Board. The members of the Committee serve at the
pleasure of the Board without compensation. Certain administrative functions are
performed by employees of the Company. No employee of the Company receives
compensation from the Plan.
In accordance with the Plan, the Company has appointed the Committee as Trustee
of the Plan. The Trustee may be removed at the discretion of the Board. The
Trustee shall vote any common stock held in the trust in accordance with
directions received from the Participants, or at its discretion if there are no
such directions. The Plan's assets are held by T. Rowe Price Associates, Inc.,
the Custodian and Recordkeeper of the Plan.
All expenses of the Plan are paid by the Company except for processing fees
related to loan withdrawals.
8
4. Non-Participant Directed Investments
Atmos common stock held in the Stock Purchase Program Fund is non-participant
and participant directed. The investment activity related to Atmos common stock
cannot be segregated between non-participant and participant directed. The
following presents the information about the net assets and the components of
the changes in net assets relating to the non-participant directed investments:
December 31
---------------------------
2001 2000
----------- -----------
Investments:
Atmos Energy Corporation Common
Stock $48,502,656 $50,774,246
=========== ===========
Year ended
December 31,
2001
------------
Changes in net assets:
Contributions $ 7,336,721
Dividends 2,513,634
Interest on participant loans 168,322
Loan repayments 629,504
Net depreciation in fair value of investments (6,549,239)
Distributions to participants (6,326,226)
Interfund transfers out (44,306)
-----------
$(2,271,590)
===========
9
5. Investments
Investments that represent 5% or more of the Plan's net assets available for
benefits are separately identified in the statements of net assets available for
benefits.
During 2001, the Plan's investments (including investments purchased and sold,
as well as held during the year) appreciated/(depreciated) in fair value as
determined by quoted market prices for common stock and published market prices
for registered investment companies as follows:
Atmos Energy Corporation Common Stock $(6,549,239)
Registered Investment Companies:
T. Rowe Price Balanced Fund (237,055)
T. Rowe Price Spectrum Income Fund (25,686)
T. Rowe Price Spectrum Growth Fund (595,927)
T. Rowe Price International Stock Fund (214,872)
T. Rowe Price Short-Term Bond Fund 33,881
T. Rowe Price New Horizons Fund (3,390)
T. Rowe Price New America Growth Fund (886,375)
T. Rowe Price Equity Income Fund (355,111)
T. Rowe Price Equity Index 500 Fund (19,491)
Stein Roe Growth Stock Fund (18,912)
Entergy Corporation Common Stock (6,091)
Citizens Communications Company Common Stock 619,083
-----------
$(8,259,185)
===========
6. Differences Between the Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31
------------------------------
2001 2000
------------ ------------
Net assets available for benefits per the
financial statements $ 90,764,162 $ 89,002,323
Amounts allocated to withdrawing participants (557,745) (981,546)
------------ ------------
Net assets available for benefits per the
Form 5500 $ 90,206,417 $ 88,020,777
============ ============
10
6. Differences Between the Financial Statements and Form 5500 (continued)
The following is a reconciliation of distributions to participants per the
financial statements to the Form 5500:
Year ended
December 31,
2001
------------
Distributions to participants per financial statements $ 7,665,336
Add: Amounts allocated to withdrawing participants
at December 31, 2001 557,745
Less: Amounts allocated to withdrawing participants
at December 31, 2000 (981,546)
-----------
Distributions to participants per the Form 5500 $ 7,241,535
===========
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
distributions to participants that have been processed and approved for payment
prior to December 31 but not yet paid as of that date.
7. Income Tax Status
The Plan has received a determination letter from the IRS dated May 13, 1997
stating that the Plan is qualified under Section 401(a) of the Code and,
therefore, the related trust is exempt from taxation. Once qualified, the Plan
is required to operate in conformity with the Code to maintain its
qualification. The Plan has been amended since receiving the determination
letter. In February 2002, the Plan made an application with the IRS to receive a
new determination letter stating that the Plan is qualified under Sections
401(a) and 501(a) of the Code. The Plan administrator believes the Plan is being
operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is
tax-exempt.
11
ATMOS ENERGY CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST
SCHEDULE H; LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
EIN: 75-1984576
PLAN NUMBER: 002
December 31, 2001
(c) Description of investment
(b) Identity of issue, including maturity date
borrower, lessor rate of interest, collateral, (e) Current
(a) or similar party par or maturity value (d) Cost value
--- ---------------------- ----------------------------- -------- -----------
* Atmos Energy Corporation Common stock; 2,282,478
shares $43,749,427 $ 48,502,656
* T. Rowe Price Associates,
Inc. Stable Value Fund ** 6,710,572
* T. Rowe Price Associates,
Inc. Prime Reserve Fund ** 793,245
* T. Rowe Price Associates,
Inc. Balanced Fund ** 2,741,118
* T. Rowe Price Associates,
Inc. Spectrum Income Fund ** 1,645,032
* T. Rowe Price Associates,
Inc. Spectrum Growth Fund ** 5,638,158
* T. Rowe Price Associates,
Inc. International Stock Fund ** 774,112
* T. Rowe Price Associates,
Inc. Short-Term Bond Fund ** 1,603,654
* T. Rowe Price Associates,
Inc. New Horizons Fund ** 241,606
* T. Rowe Price Associates,
Inc. New America Growth Fund ** 6,096,225
* T. Rowe Price Associates,
Inc. Equity Income Fund ** 9,445,301
* T. Rowe Price Associates,
Inc. Equity Index 500 Fund ** 347,323
* Stein Roe Farnham &
Company Stein Roe Growth Stock Fund ** 114,064
Entergy Corporation Common stock; 1,903
shares ** 74,419
Citizens Communications Common stock, 208,230
shares ** 2,219,732
* Participant Loans Interest rates from 7.50%
to 11.00% -- 3,580,518
----------- -------------
** $ 90,527,735
=========== =============
* Indicates party-in-interest to the Plan
** Cost information is not required for participant-directed investments
12
ATMOS ENERGY CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST
SCHEDULE H; LINE 4j
SCHEDULE OF REPORTABLE TRANSACTIONS
EIN: 75-1984576
PLAN NUMBER: 002
Year ended December 31, 2001
(h)
(a) Current value (i)
Identity of (b) (c) (d) (g) of asset on Net
party Description Purchase Selling Cost of transaction gain or
involved of security price price asset date (loss)
-------------- ----------- ----------- ------------- ------------ ------------- ---------
Category (iii) - Series of transactions in excess of 5 percent of plan assets
Atmos Energy Common $8,553,779 -- $8,553,779 $8,553,779 --
Corporation Stock
Atmos Energy Common -- $4,276,130 $3,405,944 $4,276,130 $870,186
Corporation Stock
Columns (e) and (f) not applicable
There were no category (i), (ii) or (iv) reportable transactions during the year
ended December 31, 2001
Schedule H; Line 4j information is presented for non-participant directed
investments only
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employee Stock Ownership Plan Committee of the Atmos Energy Corporation Employee
Stock Ownership Plan and Trust, as amended, has duly caused this annual report
to be signed on its behalf by the undersigned, hereunto duly authorized.
ATMOS ENERGY CORPORATION
EMPLOYEE STOCK OWNERSHIP
PLAN AND TRUST
By: /s/ LAURIE M. SHERWOOD
----------------------------
June 28, 2002 Laurie M. Sherwood
Chairperson of the Committee
14
EXHIBITS INDEX
PAGE NUMBER OR
EXHIBIT INCORPORATION BY
NUMBER DESCRIPTION REFERENCE TO
------- ------------------------------------------------ ----------------------------
4 Instruments defining rights of security
holders:
(a) Atmos Energy Corporation Employee Exhibit (4)(f) of Form 11-K
Stock Ownership Plan and Trust for the year ended December
(Effective January 1, 1999) 31, 1998 (File No. 33-57687)
(b) Amendment No. One to the Atmos Exhibit (4)(b) of Form 11-K
Energy Corporation Employee Stock for the year ended December
Ownership Plan and Trust 31, 2000 (File No. 33-57687)
(Effective January 1, 1999), effective
as of January 1, 1999
(c) Amendment No. Two to the Atmos Exhibit (4)(c) of Form 11-K
Energy Corporation Employee Stock for the year ended December
Ownership Plan and Trust 31, 2000 (File No. 33-57687)
(Effective January 1, 1999), effective
as of June 1, 2000
(d) Amendment No. Four to the Atmos
Energy Corporation Employee Stock
Ownership Plan and Trust
(Effective January 1, 1999), effective
as of July 1, 2001
(e) Amendment No. Five to the Atmos
Energy Corporation Employee Stock
Ownership Plan and Trust
(Effective January 1, 2002), effective
as of December 31, 2001
(f) Amendment No. Six to the Atmos
Energy Corporation Employee Stock
Ownership Plan and Trust
(Effective January 1, 1999), effective
as of March 1, 2002
23 Consent of Independent Auditors
15