INDUSTRY GLOSSARY
For a more complete definition of certain terms defined below, as well as other terms and concepts applicable to successful efforts accounting, please refer to Rule 4-10(a) of Regulation S-X, promulgated pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, each as amended.
APSC
Alabama Public Service Commission
ASC
Accounting Standards Codification
Basis
The difference between the futures price for a commodity and the corresponding cash spot price. This commonly is related to factors such as product quality, location and contract pricing.
Bcf
Billion Cubic Feet
CCM
Cost Control Mechanism
Energen
Energen Corporation, former owner of Alabama Gas Corporation before September 2, 2014.
EPA
U.S. Environmental Protection Agency
ESR
Enhanced Stability Reserve
FASB
Financial Accounting Standards Board
GAAP
Accounting Principles Generally Accepted in the United States of America
GSA
Gas Supply Adjustment
Laclede Group
The Laclede Group, Inc., parent company of Alabama Gas Corporation as of September 2, 2014.
LNG
Liquefied Natural Gas, which is natural gas that is liquefied by reducing the temperature to negative 260 degrees Fahrenheit. LNG typically is used to supplement traditional natural gas supplies during periods of peak demand.
Odorization
The adding of odorant to natural gas which is a characteristic odor so that leaks can be readily detected by smell.
RSE
Rate Stabilization and Equalization
SEC
U.S. Securities and Exchange Commission
Transportation
Moving gas through pipelines on a contract basis for others.
FORWARD-LOOKING STATEMENTS
Certain matters discussed in this report, excluding historical information, include forward-looking statements. Certain words, such as “may,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “seek,” and similar words and expressions identify forward-looking statements that involve uncertainties and risks. Future developments may not be in accordance with our current expectations or beliefs and the effect of future developments may not be those anticipated. Among the factors that may cause results to differ materially from those contemplated in any forward-looking statement are:
Readers are urged to consider the risks, uncertainties, and other factors that could affect our business as described in this report. All forward-looking statements made in this report rely upon the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. We do not, by including this statement, assume any obligation to review or revise any particular forward-looking statement in light of future events.
ITEM 1. BUSINESS
($ in millions, customer count in actual)
Overview
Alabama Gas Corporation (the Company or Alagasco) was formed in 1948 by the merger of Alabama Gas Company into Birmingham Gas Company, the predecessors of which had been in existence since the mid-1800s. On April 5, 2014, The Laclede Group, Inc. (Laclede Group) entered into a Stock Purchase Agreement (the SPA) to acquire from Energen Corporation (Energen) all of the outstanding shares of stock of the Company (the Acquisition). On September 2, 2014, Laclede Group and Energen completed the Acquisition, with an effective time under the SPA of 11:59 p.m. on August 31, 2014
Effective September 2, 2014, the Company amended its bylaws to change the Company’s fiscal year from beginning January 1st and ending on December 31st, to beginning October 1st and ending on September 30th. As a result, this Form 10-K is a transition report and includes financial information for the period from January 1, 2014 through September 30, 2014. Subsequent to this report, the Company's annual reports on Form 10-K will cover the fiscal year October 1st to September 30th. The period beginning January 1, 2014 through September 30, 2014 is referred to as the “current period” or “transition period” and the period beginning October 1, 2014 through September 30, 2015 as “fiscal 2015”.