Form U-13-60
Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980


ANNUAL REPORT


For the Year Ended

December 31, 2004

To The

U.S. SECURITIES AND EXCHANGE COMMISSION

OF

AGL SERVICES COMPANY
(Exact Name of Reporting Company)

Subsidiary Service Company
(“Mutual” or “Subsidiary”)

Date of Incorporation: July 25, 2000

If not Incorporated, Date of Organization ______________________________


State or Sovereign Power Under Which Incorporated or Organized: State of Georgia

Location of Principal Executive Offices of Reporting Company:

Ten Peachtree Place, N.W.
Atlanta, Georgia 30309


Name, title, and address of officers to whom correspondence concerning this report should be addressed:

Bryan E. Seas
Vice President and Controller
Ten Peachtree Place, N.W.
Atlanta, Georgia 30309



Name of Principal Holding Company Whose Subsidiaries are served by Reporting Company:


AGL RESOURCES INC.


 
 
INSTRUCTIONS FOR USE OF FORM U-13-60


1.
Time of Filing. Rule 94 provides that on or before the first day of May in each calendar year, each mutual service company and each subsidiary service company as to which the Commission shall have made a favorable finding pursuant to Rule 88, and every service company whose application for approval or declaration pursuant to Rule 88 is pending shall file with the Commission an annual report on form U-13-60 and in accordance with the Instructions for that form.

2.
Number of Copies. Each annual report shall be filed in duplicate. The company should prepare and retain at least one extra copy for itself in case correspondence with reference to the report become necessary.

3.
Period Covered by Report. The first report filed by any company shall cover the period from the date the Uniform System of Accounts was required to be made effective as to that company under Rules 82 and 93 to the end of that calendar year. Subsequent reports should cover a calendar year.

4.
Report Format. Reports shall be submitted on the forms prepared by the Commission. If the space provided on any sheet of such form is inadequate, additional sheets may be inserted of the same size as a sheet of the form or folded to such size.

5.
Money Amounts Displayed. All money amounts required to be shown in financial statements may be expressed in whole dollars, in thousands of dollars or in hundred thousands of dollars, as appropriate and subject to provisions of Regulation S-X ( 210.3-01(b)).

6.
DeficitsDisplayed. Deficits and other like entries shall be indicated by the use of either brackets or a parenthesis with corresponding reference in footnotes. (Regulation S-X,210.3-01(c))

7.
Major Amendments or Corrections. Any company desiring to amend or correct a major omission or error in a report after it has been filed with the Commission shall submit an amended report including only those pages, schedules, and entries that are to be amended or corrected. A cover letter shall be submitted requesting the Commission to incorporate the amended report changes and shall be signed by a duly authorized officer of the company.

8.
Definitions. Definitions contained in Instruction 01-8 to the Uniform System of Accounts for Mutual Service companies and Subsidiary Service companies, Public Utility Holding Company Act of 1935, as amended February 2, 1979 shall be applicable to words or terms used specifically within this Form U-13-60.

9.
Organization Chart. The service company shall submit with each annual report a copy of its current organization chart.

10.
Methods of Allocation. The service company shall submit with each annual report a listing of the currently effective methods of allocation being used by the service company and on file with the Securities and Exchange Commission pursuant to the Public Utility Holding Company Act of 1935.

11.
Annual Statement of Compensation for Use of Capital Billed. The service company shall submit with each annual report a copy of the annual statement supplied to each associate company in support of the amount of compensation for use of capital billed during the calendar year.
 
 

LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS

Description of Schedules and Accounts
Schedule or Account Number
Page Number
COMPARATIVE BALANCE SHEET
SCHEDULE I
4-5
SERVICES COMPANY PROPERTY
SCHEDULE II
6
ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF SERVICES COMPANY PROPERTY
SCHEDULE III
7
INVESTMENTS
SCHEDULE IV
8
ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
SCHEDULE V
9-10
FUEL STOCK EXPENSES UNDISTRIBUTED
SCHEDULE VI
11
STORES EXPENSE UNDISTRIBUTED
SCHEDULE VII
12
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
SCHEDULE VIII
13
MISCELLANEOUS DEFERRED DEBITS
SCHEDULE IX
14
RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES
SCHEDULE X
15
PROPRIETARY CAPITAL
SHEDULE XI
16
LONG-TERM DEBT
SCHEDULE XII
17
CURRENT AND ACCRUED LIABILITIES
SCHEDULE XIII
18
NOTES TO FINANCIAL STATEMENTS
SCHEDULE XIV
19-23
COMPARATIVE INCOME STATEMENT
SCHEDULE XV
24-25
ANALYSIS OF BILLING - ASSOCIATE COMPANIES
ACCOUNT 457
26
ANALYSIS OF BILLING - NONASSOCIATE COMPANIES
ACCOUNT 458
27
ANALYSIS OF CHARGES FOR SERVICES - ASSOCIATE AND NONASSOCIATE COMPANIES
SCHEDULE XVI
28-29
SCHEDULE OF EXPENSE BY DEPARTMENT OR SERVICE FUNCTION
SCHEDULE XVII
30-41
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
42
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
43-44
EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926
45
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
46
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
47
RENTS
ACCOUNT 931
48
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
49
DONATIONS
ACCOUNT 426.1
50
OTHER DEDUCTIONS
ACCOUNT 426.5
51
NOTES TO STATEMENT OF INCOME
SCHEDULE XVIII
52
ORGANIZATION CHART
  
53
METHODS OF ALLOCATION
  
54-55
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
  
56
 
 
 
ANNUAL REPORT OF AGL SERVICES COMPANY

SCHEDULE I
COMPARATIVE BALANCE SHEET

Give balance sheet of the Company as of December 31 of the current and prior year.

Account
Assets and Other Debts
Balance At 12/31/04
Balance At 12/31/03
 
 
    
 
Service Company Property
    
121
Nonutility Property (Schedule II)
83,071,709
96,381,153
107
Construction WIP
8,978,465
7,822,101
 
Total Other Property
92,050,174
104,203,254
 
 
    
108
Less Accumulated provision for depreciation
    
 
and amortization of service company property
    
 
(Schedule III)
(26,334,781)
(26,204,623)
 
Net Service Company Property
65,715,393
77,998,631
 
 
    
 
Investments
    
123
Investments in associated companies
    
 
(Schedule IV)
-
-
124
Other investments (Schedule IV)
-
-
 
Total Investments
-
-
 
 
    
 
Current and Accrued Assets
    
131
Cash
8,566,666
15,950,968
134
Special Deposits
-
-
135
Working Funds
-
-
136
Temporary cash investments (Schedule IV)
-
-
141
Notes Receivable
-
-
143
Accounts Receivable
1,327,142
383,943
144
(less) Accum. Prov. For Uncollectible
(945)
-
 
Acct. - Credit
-
-
145
Notes Receivable from Assoc. Companies
-
-
146
Accounts Receivable from Assoc. Companies (Schedule V)
-
345,058
152
Fuel stock expenses undistributed (Schedule VI)
-
-
154
Materials and Supplies
43,035
1,904
163
Stores expense undistributed (Schedule VII)
1,800
1,800
165
Prepayments
4,534,108
3,669,645
174
Miscellaneous current and accrued assets
-
-
 
(Schedule VIII)
-
-
 
Total Current and Accrued Assets
14,471,805
20,353,318
 
 
    
 
Deferred Debits
    
181
Unamortized debt expense
-
-
182.3
Other Regulatory Assets
-
-
184
Clearing account
89,699
53,386
186
Miscellaneous deferred debits (Schedule IX)
754,916
112,203
188
Research, development, or demonstration
    
 
expenditures (Schedule X)
-
-
190
Accumulated deferred income taxes
-
-
 
Total Deferred Debits
844,615
165,589
 
 
    
 
Total Assets and Other Debits
81,031,813
98,517,538
 
 
 
ANNUAL REPORT OF AGL SERVICES COMPANY

SCHEDULE I
COMPARATIVE BALANCE SHEET (Continued)

Account
Liabilities and Proprietary Capital
Balance At 12/31/04
Balance At 12/31/03
 
 
    
 
Proprietary Capital
    
201
Common stock issued (Schedule XI)
(100)
(100)
207
Premium on Capital stock
(5,722,447)
(2,641,505)
208
Other Paid-In-Capital
2,340,706
3,393,544
216
Unappropriated retained earnings (Schedule XI)
56,896,443
43,396,539
 
Total Proprietary Capital
53,514,602
44,148,478
 
 
    
 
Other Noncurrent Liabilities
    
228.2
Accumulated Provision for Injuries and Damages
-
(2,159,785)
228.3
Accumulated Provisions for pensions and benefits
(28,679,151)
(26,792,045)
 
Total Other Noncurrent Liabilities
(28,679,151)
(28,951,830)
 
 
    
 
Current and Accrued Liabilities
    
231
Notes payable
-
-
232
Accounts payable
(43,829,439)
(32,413,365)
233
Notes payable to associated companies (Schedule XIII)
  
-
234
Accounts payable to associated companies (Schedule XIII)
(64,196,526)
(106,143,442)
236
Taxes accrued
7,362,381
31,674,290
237
Interest accrued
  
-
238
Dividends declared
  
-
241
Tax collections payable
(10,560)
(606,941)
242
Miscellaneous current and accrued liabilities (Schedule XIII)
(3,834,871)
(2,077,188)
 
Total Current and Accrued Liabilities
(104,509,016)
(109,566,646)
 
 
    
 
Deferred Credits
    
252
Customer advances for construction
-
-
253
Other deferred credits
(792,334)
(331,569)
255
Accumulated deferred investment tax credits
-
-
 
Total Deferred Credits
(792,334)
(331,569)
 
 
    
 
Accumulated Deferred Income Taxes
    
281 /1
Accumulated deferred income taxes - Accelerated
    
 
amortization property
(565,915)
(3,815,971)
283
Accumulated deferred income taxes - other
-
-
 
Total Accumulated Deferred Income Taxes
(565,915)
(3,815,971)
 
 
    
 
Total Liabilities and Proprietary Capital
(81,031,813)
(98,517,538)

/1    The FERC account #281 balances are accumulated deferred income tax assets for AGL Services Company. They are recorded in the liability section of the balance sheet because on a consolidated basis these accounts are liabilities for AGL Resources Inc.
 
 
 
ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE II

SERVICE COMPANY PROPERTY

Account
Description
Balance At 12/31/03
Additions
Retirements or Sale
Other Changes
Balance At 12/31/04
 
 
 
 
 
1 /
 
 
 
 
 
 
 
 
363.5
Other Equipment
964,212
-
(5,706)
-
958,506
369
Transmission Plant
-
33,166
-
-
33,166
379
Measuring & Reg. Station Equip.
96,984
2,427
-
-
99,411
390
Structures and Improvements
13,791,732
3,673,513
(467,926)
(673,560)
16,323,759
391
Office Furniture and Equipment
73,376,904
3,479,340
(8,308,358)
(8,061,871)
60,486,015
393
Stores Equipment
12,681
-
(6,540)
-
6,141
394
Tools, Shop, & Garage Equipment
1,215,988
-
(501,774)
-
714,214
395
Laboratory Equipment
44,755
-
(3,090)
401
42,066
396
Power Operated Equipment
5,046
-
(5,046)
-
-
397
Communication Equipment
4,244,419
550,592
(2,498,539)
-
2,296,472
398
Miscellaneous Equipment
2,628,432
143,804
(551,722)
(108,555)
2,111,959
107
Construction Work In Progress
7,822,101
7,889,608
-
(6,733,244)
8,978,465
 
 
          
 
 
          
 
Total
104,203,254
15,772,450
(12,348,701)
(15,576,829)
92,050,174

1/
The totals in the column labeled “Other Changes” represent assets transferred to/from associated companies.
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year December 31, 2004

SCHEDULE III

ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY

Account
Description
Balance At 12/31/03
Additions Charges To Acct. #403
Retirements or Sale
Other Changes and (Deductions)
Balance At 12/31/04
 
 
          
 
 
          
363.5
Other Equipment
50,995
35,826
(1,916)
(37)
84,868
379
Measuring & Reg. Station Equip.
3,435
1,996
-
-
5,431
390
Structures and Improvements
1,211,930
949,911
(4,301)
986
2,158,526
391
Office Furniture and Equipment
20,752,666
11,362,423
(8,372,822)
(440,812)
23,301,455
393
Stores Equipment
5,202
751
(5,749)
-
204
394
Tools, Shop, & Garage Equipment
490,259
74,564
(428,380)
-
136,444
395
Laboratory Equipment
26,129
2,992
(2,361)
418
27,178
396
Power Operated Equipment
11,495
631
(4,640)
-
7,487
397
Communication Equipment
2,899,704
146,236
(2,217,578)
(742,776)
85,586
398
Miscellaneous Equipment
752,808
260,221
(469,175)
(16,250)
527,603
 
 
          
 
Total
26,204,623
12,835,551
(11,506,922)
(1,198,471)
26,334,781
 
1/
The totals in the column labeled “Other Changes and (Deduct)” represent transfers of assets to/from the services company to associated companies.
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year December 31, 2004

SCHEDULE IV

INVESTMENTS


INSTRUCTIONS:
Complete the following schedule concerning investments.

Under Account 124, “Other Investments”, state each investment separately, with description, including the name of issuing company, number of shares or principal amount, etc.

Under Account 136, “Temporary Cash Investments”, list each investment separately.
 
Account
Description
Balance At 12/31/04
Balance At 12/31/03
 
 
    
123
Investment In Associate Companies
-
-
124
Other Investments
-
-
136
Temporary Cash Investments
-
-
 
 
    
 
Not Applicable
    
 
 
    
 
Total Investments
-
-
 
 
 
ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE V

ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES

INSTRUCTIONS:
Complete the following schedule listing accounts receivable from each associate company. Where the service company has provided accommodation or convenience payments for associate companies, a separate listing of total payments for each associate company by subaccount should be provided.

Account
Description
Balance At 12/31/04
Balance At 12/31/03
 
 
 
 
146
Account Receivable From Associate Companies
    
 
 
    
 
AGL Investments, Inc.
-
19,124,558
 
Chattanooga Gas Company
3,082,129
13,030,681
 
Atlanta Gas Light Company
209,643,619
(226,193)
 
Virginia Natural Gas, Inc.
-
17,900,012
 
Trustees Investments, Inc.
-
147,525
 
Georgia Gas Company
-
386,002
 
AGL Rome Holdings, Inc.
-
1,574,992
 
AGL Propane Services, Inc.
-
2,968,304
 
Southeastern LNG, Inc.
-
328,502
 
Customer Care Services, Inc.
5,721,040
948,867
 
Sequent Energy Management, LP
-
20,877,891
 
Pivotal Energy Services, Inc.
75,315
90
 
Pinnacle LNG, Inc.
-
100
 
Georgia Natural Gas Company
48,132,756
-
 
AGL Peaking Services
2,413,931
-
 
AGL Energy Corporation
64,995
-
 
Sequent Holdings, LLC
15,976
-
 
Global Energy Resources Insurance Company
1,711,139
-
 
AGL Capital Trust II
6,699,410
-
 
Sequent LLC
4,411,386
-
 
Pivotal Propane of Virginia, Inc.
23,707,289
-
 
Distribution Operations Corporation
4,084,831
-
 
Jefferson Island Storage and Hub
81,393,688
-
 
Appliance Business Florida Plumbing
48,688
-
 
Appliance Business Florida Service
7,379,287
-
 
Appliance Business New Jersey Service
242,758
-
 
Florida City Gas
75,103,078
-
 
Elkton Gas Services
6,843,692
-
 
Elizabethtown Gas Company
262,271,961
-
 
NUI Capital, Inc.
5,284,407
-
 
NUI Energy Brokers, Inc.
783,382
-
 
NUI Energy, Inc.
535,069
-
 
NUI Energy Solutions, Inc.
230,754
-
 
NUI Headquarters
23,137,984
-
 
NUI Saltville Storage, Inc.
10,907,256
-
 
Utility Business Services, Inc.
3,981,321
-
 
NUI Utilities Inc.
4,534,338
-
 
Virginia Gas Storage Company
732,910
-
 
AGL Capital Trust
640,671
-
 
AGL Capital Corporation
(793,815,060)
(76,716,273)
 
 
    
 
Total
(0)
345,058
 
 
 
ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE V (continued)

ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES

Description
Total Payments
 
  
Analysis of Convenience or Accommodation Payments:
-
 
  
 
 
 
ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE VI

FUEL STOCK EXPENSES UNDISTRIBUTED

 
INSTRUCTIONS:
Report the amount of labor and expenses incurred with respect to fuel stock expenses during the year and indicate amount attributable to each associate company. Under the section headed “Summary” listed below give an overall report of the fuel functions performed by the service company.


Account
Description
Labor
Expenses
Total
 
 
      
152
Fuel Stock Expenses Undistributed
-
-
-
 
 
      
 
 
 
ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE VII

STORES EXPENSE UNDISTRIBUTED


INSTRUCTIONS:
Report the amount of labor and expenses incurred with respect to stores expense during the year and indicate amount attributable to each associate company.


Account
Description
Labor
Expenses
 
 
    
163
Stores Expenses Undistributed
-
1,800
 
 
    
 
 
 
ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE VIII

MISCELLANEOUS CURRENT AND ACCRUED ASSETS

 
INSTRUCTIONS:
Provide detail of items in this account. Items less than $10,000 may be grouped, showing the number of items in each group.


Account
Description
Balance At 12/31/04
Balance At 12/31/03
 
 
 
 
174
Miscellaneous Current and Accrued Assets
-
-
 
 
    
 
 
 
ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE IX

MISCELLANEOUS DEFERRED DEBIT

 
INSTRUCTIONS:
Provide detail of items in this account. Items less than $10,000 may be grouped, showing the number of items in each class.

 
Account
Description
Balance At 12/31/04
Balance At 12/31/03
 
 
 
 
186
Miscellaneous Deferred Debits:
 
 
 
Software License
3,024
343
 
PCB Research
51,133
25,523
 
Coop Mktg TRANSCO
(21,695)
(21,695)
 
Coop Mktg SONAT
(89,990)
(297,143)
 
Robur Commercialization Project
(90,850)
(90,850)
 
Caroline Street Facility Project
-
16,293
 
Other Work in Progress-Misc
903,294
479,732
 
Other Items
-
-
 
 
    
 
Total
754,916
112,203
 
 
 
 
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE X

RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES


INSTRUCTIONS:
Provide a description of each material research, development, or demonstration project that incurred cost by the service company during year.

 
Account
Description
Amount
 
 
 
188
Research, Development or Demonstration Expenditures
-
 
 
 
 
 
 
ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XI

PROPRIETARY CAPITAL

Account
Class Of Stock
Number of Shares Authorized
Par or Stated Value Per Share
Outstanding At 12/31/04
 
 
 
 
 
201
Common Stock Issued
100
1
100
 
 
 
 
 
 
Total
100
1
100


INSTRUCTIONS:
Classify amounts in each account with brief explanation, disclosing the general nature of transactions that gave rise to the reported amounts.


Account
Description
Amount
 
 
 
211
Miscellaneous Paid-In-Capital
-
215
Appropriated Retained earnings
-
 
 
  
 
Not Applicable
 


INSTRUCTIONS:
Give particulars concerning net income or (loss) during the year, distinguishing between compensation for the use of capital owed or net loss remaining from servicing non-associates per the General Instructions of the Uniform System of Accounts. For dividends paid during the year in cash or otherwise, provide rate percentage, amount of dividend, date declared and date paid.


Account
Description
Balance At 12/31/02
Net Income or (Loss)
Other Changes
Dividends Paid
Balance At 12/31/03
 
 
    
/1
    
 
 
          
216
Unappropriated Retained Earnings
49,186,353
597,850
(8,203,939)
1,816,275
43,396,539
 
 
          
 
Total
49,186,353
597,850
(8,203,939)
1,816,275
43,396,539
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XII

LONG-TERM DEBT


INSTRUCTION:
Advances from associate companies should be reported separately for advances on notes, and advances on open account. Name of associate companies from which advances were received shall be shown under the class and series of obligation column. For Account 224 - Other Long-Term Debt provide the name of creditor company or organization, terms of the obligation, date of maturity, interest rate, and the amount authorized and outstanding.

Account
Description
Amount
 
 
 
223
Advances From Associate Companies
-
 
 
  
224
Other Long Term Debt
-
 
 
 
 
Not Applicable
 
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XIII

CURRENT AND ACCRUED LIABILITIES

INSTRUCTIONS:
Provide balance of notes and accounts payable to each associate company. Give description and amount of miscellaneous current and accrued liabilities. Items less than $10,000 may be grouped, showing the number of items in each group.

Account
Description
Balance At 12/31/04
Balance At 12/31/03
 
 
    
233
Note Payable To Associate Companies
    
 
 
    
 
Not Applicable
    
 
 
    
 
 
    
 
 
    
234
Account Payable To Associate Companies
    
 
 
    
 
AGL Investments, Inc.
(23,241,435)
-
 
Chattanooga Gas Company
-
-
 
Trustees Investments, Inc.
(1,427,646)
-
 
Georgia Gas Company
(387,022)
-
 
AGL Rome Holdings, Inc.
(1,264,300)
-
 
AGL Propane Services, Inc.
(31,766,669)
-
 
Atlanta Gas Light Company
-
(359,225,135)
 
Virginia Natural Gas, Inc.
(35,390,116)
(7,754,771)
 
Southeastern LNG, Inc.
(357,234)
-
 
Sequent Energy Management, LP
(40,357,313)
-
 
Pivotal Energy Services, Inc.
-
-
 
Pinnacle LNG, Inc.
(90)
-
 
TIC Enterprises, LLC.
(1,577,786)
-
 
Virginia Gas Distribution Company
(1,470,842)
-
 
Virginia Gas Company
(12,814,385)
-
 
Georgia Natural Gas Company
-
(12,090,266)
 
AGL Peaking Services, Inc.
-
(2,987,621)
 
AGL Capital Trust I
-
(488,365)
 
AGL Energy Corporation
-
(43,564)
 
Global Energy Resources Insurance Company
-
(2,181,786)
 
AGL Capital Trust II
-
(6,003,883)
 
Sequent LLC
-
(6,143,591)
 
Pivotal Propane of Virginia, Inc.
-
(202,724)
 
Distribution Operations Corporation
-
(2,028)
 
Virginia Gas Pipeline Company
(15,147,039)
-
 
AGL Capital Corporation
101,005,351
290,980,292
 
 
    
 
TOTAL
(64,196,526)
(106,143,442)
 
 
    
 
 
    
242
Miscellaneous Current and Accrued Liabilities
    
 
Unclaimed Customer Credit & Checks
-
23,249
 
Accrued Relocation Liability
(2,069,550)
(114,284)
 
Escheat - Deposit Balance - 2001
(633,344)
(692,407)
 
Retired Savings Plus - Company Matching
(151,356)
(156,448)
 
Retired Savings Plus - Employee Matching
(275,560)
(285,297)
 
Retired Savings Plus - General Matching
(84,224)
(72,829)
 
NSP Employee Contribution
(192,821)
(371,121)
 
NSP Company Contribution
(428,016)
(408,050)
 
TOTAL
(3,834,871)
(2,077,188)
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XIV

NOTES TO FINANCIAL STATEMENTS

 
INSTRUCTIONS:
The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference.

 
1.
SIGNIFICANT ACCOUNTING POLICIES

General

AGL Services Company (the “Company”) is a subsidiary of AGL Resources Inc. (“AGL Resources”) which renders services to AGL Resources and its subsidiaries. The Company was established in accordance with the Public Utility Holding Company Act of 1935 (PUHCA). All the costs associated with the Company are allocated to the operating segments in accordance with PUHCA. The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.


Property, Plant and Equipment

Property, plant and equipment includes property that is in use and under construction, and is reported at cost. A gain or loss is recorded for retired or otherwise disposed of property.


Depreciation Expense

Depreciation expense for the Company is computed on a straight-line basis over a period of 1 to 35 years.

Use of Accounting Estimates

Management makes estimates and assumptions when preparing financial statements. Those estimates and assumptions affect various matters, including:

·
reported amounts of certain assets and liabilities in the Company’s balance sheets as of the dates of the financial statements
·
disclosure of contingent assets and liabilities as of the dates of the financial statements
·
reported amounts of certain expenses in the Company’s statement of income during the reported periods

Those estimates involve judgments with respect to, among other things, future economic factors that are difficult to predict and are beyond management's control. Consequently, actual amounts could differ from estimates.
 
 
 
2.
INCOME TAX

The Company has two categories of income taxes in its balance sheets and statements of income: current and deferred. The Company’s current income tax expense consists of federal and state income tax less applicable tax credits. The Company’s deferred income tax expense generally is equal to the changes in the deferred income tax liability during the year.

Accumulated Deferred Income Tax Assets and Liabilities

The Company reports some of its assets and liabilities differently for financial accounting purposes than it does for income tax purposes. The tax effects of the difference in those items are reported as deferred income tax assets or liabilities in The Company’s balance sheets. The assets and liabilities are measured utilizing income tax rates that are currently in effect.

Components of income tax expense shown in the Comparative Income statement for the year ended December 31, 2004 are as follows:

INCLUDED IN EXPENSES:
Amount
 
  
Current Income Taxes
  
Federal
(1,969,526)
State
193,837
 
  
Deferred Income Taxes
  
Federal
3,629,585
State
426,312
PUHCA tax expense
82,576
AGSC Allocate tax expenses
(2,362,784)
 
  
TOTAL
-

Reconciliation between the statutory federal income tax rate and the effective rate for the year ended December 31, 2004 is as follows:

Income Tax Expenses:
Amount
 
  
Computed tax expense
-
State income tax, net of federal income tax benefit
403,097
Other - net
(403,097)
 
  
TOTAL
-

Components that give rise to the net accumulated deferred income tax liability, as of December 31, 2004 are as follows:

Accumulated Deferred Income Tax
Amount
 
  
Federal
(1,167,471)
State
601,556
 
  
TOTAL
(565,915)
 
 
 
3.
SERVICE AGREEMENTS


The Company has entered into agreements under which it renders services at cost, to AGL Resources and its subsidiaries. The Company’s affiliates include the following: AGL Resources Inc., Trustees Investment, Inc., AGL Peaking Services, Inc., AGL Rome Holdings, Inc., AGL Energy Corporation, AGL Propane Services, Inc., Virginia Natural Gas, Inc., AGL Investments, Inc., AGL Networks, LLC, AGL Capital Corporation, Southeastern LNG, Inc., Customer Care Services, Inc., Global Energy Resources Insurance Company, Sequent Energy Management, LP, Sequent Energy Marketing, LP, Georgia Natural Gas Company, Atlanta Gas Light Company, Chattanooga Gas Company, Sequent LLC, Georgia Gas Company, AGL Capital Trust, AGL Capital Trust II, Sequent Holdings, LLC., Pivotal Propane of Virginia, Pivotal Energy Services, Inc., Corporate Tax Planning, Pinnacle LNG, Inc. The Company’s services include Engineering, Finance, Treasury, Tax, Accounting, Internal Audit, Public Relations, Employee Relations, Marketing, Information Resources, Purchasing, and other services with respect to business and operations.

4.
EMPLOYEE BENEFIT PLANS


Substantially all of The Company’s employees are eligible to participate in its employee benefit plans.

Pension Benefit

All employees of The Company are covered under a defined benefit retirement plan (“Retirement Plan”) sponsored by AGL Resources Inc. A defined benefit plan specifies the amount of benefits an eligible plan participant eventually will receive using information about the participant. The Company generally calculates the benefits under the Retirement Plan based on age, years of service, and pay. The Company’s employees do not contribute to the Retirement Plan. The Company funds the plan by contributing annually the amount required by applicable regulations and as recommended by its actuary. The Company calculates the amount of funding using an actuarial method called the projected unit credit cost method. The Retirement Plan’s assets consist primarily of marketable securities, corporate obligations, U.S. government obligations, insurance contracts, mutual funds, and cash equivalents.


Postretirement Benefits

The Company also participates in an AGL Resources Inc. sponsored defined benefit postretirement health care and life insurance plans, which cover nearly all employees if they reach retirement age while working for The Company. The benefits under these plans are generally calculated based on age and years of service.  Some retirees contribute a portion of health care plan costs. Retirees do not contribute toward the cost of the life insurance plan.


Employee Savings Plan Benefits

The Company participates in an AGL Resources Inc. sponsored RSP Plan, a defined contribution benefit plan. In a defined contribution benefit plan, the benefits a participant ultimately receives come from regular contributions to a participant account. Under the RSP Plan, The Company made matching contributions to participant accounts in the amount of $1,968,437.

AGL Resources Inc. NSP, an unfunded, nonqualified plan similar to the RSP Plan, in which The Company participates, provides an opportunity for eligible employees to contribute additional amounts for retirement savings once they have reached the maximum contribution amount in the RSP Plan. The Company contributions to the NSP were not significant.

5.
MONEY POOL

The parent Company and its subsidiaries participate in the System Money Pool (Pool), which is administered by the Services Company on behalf of the participants. The operation of the Pool was authorized by the Securities and Exchange Commission in PUHCA release No. 35-27243 (File No. 70-9707).

Participants contribute the amount of their available funds each day to the Pool. The funds requirements of the participants, with the exception of the Parent Company, are satisfied by advances from the Pool.
 
 

At December 31, 2004, the detail of the Pool balance by affiliate was as follows:

INVESTMENT IN POOL:
Amount
 
  
Chattanooga Gas Company
3,082,129
Atlanta Gas Light Company
209,643,619
Customer Care Services, Inc.
5,721,040
Pivotal Energy Services, Inc.
75,315
Georgia Natural Gas Company
48,132,756
AGL Peaking Services
2,413,931
AGL Energy Corporation
64,995
Sequent Holdings, LLC
15,976
Global Energy Resources Insurance Company
1,711,139
AGL Capital Trust II
6,699,410
Sequent LLC
4,411,386
Pivotal Propane of Virginia, Inc.
23,707,289
Distribution Operations Corporation
4,084,831
Jefferson Island Storage and Hub
81,393,688
Appliance Business Florida Plumbing
48,688
Appliance Business Florida Service
7,379,287
Appliance Business New Jersey Service
242,758
Florida City Gas
75,103,078
Elkton Gas Services
6,843,692
Elizabethtown Gas Company
262,271,961
NUI Capital, Inc.
5,284,407
NUI Energy Brokers, Inc.
783,382
NUI Energy, Inc.
535,069
NUI Energy Solutions, Inc.
230,754
NUI Headquarters
23,137,984
NUI Saltville Storage, Inc.
10,907,256
Utility Business Services, Inc.
3,981,321
NUI Utilities Inc.
4,534,338
Virginia Gas Storage Company
732,910
AGL Capital Trust
640,671
AGL Capital Corporation
178,630,311
Sub Total
229,398,403
 
 
 
LESS BORROWINGS FROM POOL:
  
 
  
AGL Investments, Inc.
(23,241,435)
Trustees Investments, Inc.
(1,427,646)
Georgia Gas Company
(387,022)
AGL Rome Holdings, Inc.
(1,264,300)
AGL Propane Services, Inc.
(31,766,669)
Virginia Natural Gas, Inc.
(35,390,116)
Southeastern LNG, Inc.
(357,234)
Sequent Energy Management, LP
(40,357,313)
Pinnacle LNG, Inc.
(90)
TIC Enterprises, LLC.
(1,577,786)
Virginia Gas Distribution Company
(1,470,842)
Virginia Gas Company
(12,814,385)
Virginia Gas Pipeline Company
(15,147,039)
AGL Capital Corporation
101,005,351
 
  
Sub Total
(64,196,526)
 
  
TOTAL
293,594,929

6.
RENTAL EXPENSES

Rental expenses that the Company incurred were primarily for office space, computer equipment and fleet. The total rent expense for the twelve months ended December 31, 2004 was $11,186,710.

The minimum annual rentals under noncancelable operating leases are as follows:

 
§
fiscal 2005 - $19,381,008
 
§
fiscal 2006 - $14,504,276
 
§
fiscal 2007 - $12,673,080
 
§
fiscal 2008 - $8,926,137
 
§
fiscal 2009 - $8,374,674
 
§
thereafter - $24,142,828
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For Year December 31, 2004

SCHEDULE XV

COMPARATIVE INCOME STATEMENT

       
ACCOUNT
DESCRIPTION
Year Ending 12/31/04
Year Ending 12/31/03
       
 
INCOME
    
       
457
Services rendered to associate companies (allocations)
(155,454,185)
(135,958,851)
 
Operating Revenue
(155,454,185)
(135,958,851)
       
       
 
EXPENSES
    
       
403
Depreciation Expense
9,137,853
9,429,102
404.3
Amortization of other limited-term gas plant
171,222
(1,768)
408.1
Taxes other than income taxes, utility operating income
3,742,283
2,437,393
409.1
Income taxes, utility operating income
(1,775,689)
15,211,535
410.1
Provision for deferred income taxes, utility operating income
1,775,689
(14,698,425)
411.6
Gains on Disposition of Utility Plant
3,706,762
-
419
Interest and dividend income
(192,155)
(88,014)
421
Miscellaneous income or loss
(1,218,980)
(4,231,858)
426.1
Donations
987,705
470,844
426.4
Expenditures for certain civic, political and related activities
102
136
426.5
Other donations
423,327
852,188
431
Other interest expense
2,268,893
(3,839,437)
488
Miscellaneous service revenue
89,664
(158,458)
493
Rent from gas property
(5,850)
(5,400)
495
Other utility operating income
-
745,680
804
Natural Gas City Gate Purchases
-
(62)
807
Purchased Gas Expenses
-
(50,303)
840
LNG Supervision/Eng
163,693
295,209
841
Operation Supervision and Engineering
1,209,434
1,053,607
843.2
Maintenance of Structures and Improvements
38,836
1,587
843.3
Maintenance of Gas Holders
211
8,049
843.4
Maintenance of Purification Equipment
126,410
62,493
843.5
Maintenance of Liquefaction Equipment
283,757
154,761
843.6
Maintenance of Vaporizing Equipment
73,810
122,501
843.7
Maintenance of Compressor Equipment
90,432
182,311
843.9
Maintenance of Other Equipment
300,197
339,346
870
Operation Supervision and Engineering
58,222
1,336,626
871
Distribution Load Dispatching
5,120
1,011,166
874
Mains and Services Expenses
513,070
681,263
875
Measuring and Regulating Station Expenses-General
-
459,853
877
Measuring and Regulating Station Expenses-City Gate Check Station
544,101
680,630
878
Meter and House Regulator Expenses
693
48,870
879
Customer Installation Expenses
67
-
880
Other Expenses
210,050
962,068
887
Maintenance of Mains
68,960
62,985
888
Maintenance of Compressor Station Equipment
1,913
-
889
Maintenance of Meas. and Reg. Sta. Equip.-General
27,763
71,968
892
Maintenance of Services
39,095
38,439
893
Maintenance of Meters and House Regulators
114,708
210,202
 
 
 
894
Maintenance of Other Equipment
51,509
40,443
902
Meter Reading Expenses
-
6,168
903
Customer Records and Collection Expenses
86,916
185,641
905
Miscellaneous Customer Accounts Expenses
117,332
199,798
907
Supervision
89
429
908
Customer Assistance Expenses
1,168,443
5,881,823
909
Informational and Instructional Expenses
(82)
356
912
Demonstrating and Selling Expenses
25,957
15,021
913
Advertising Expenses
1,470,669
1,322,725
916
Miscellaneous Sales Expenses
36,194
365,458
920
Administrative and General Salaries
44,117,815
34,522,531
921
Office Supplies and Expenses
11,023,474
12,670,108
922
Administrative Expenses Transferred-Cr.
(7,340,431)
(8,241,249)
923
Outside Services Employed
24,554,795
17,773,039
924
Property Insurance
4,150,592
4,141,193
925
Injuries and Damages
1,721,463
1,754,116
926
Employee Pensions and Benefits
30,030,823
31,136,806
930.2
Miscellaneous General Expenses
3,920,682
5,074,051
931
Rents
7,160,722
6,810,164
932
Maintenance of General Plant
10,175,857
9,040,994
 
Operating Expenses
155,454,186
136,556,702
       
 
Net Income
1
597,851
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

ANALYSIS OF BILLING

ASSOCIATE COMPANIES
ACCOUNT 457

         
NAME OF ASSOCIATE COMPANY
DIRECT COST CHARGED
INDIRECT COST CHARGED
COMPENSATION FOR USE OF CAPITAL
TOTAL AMOUNT BILLED
 
457-1
457-2
457-3
 
         
AGL Resources Inc.
448,381
10,412,109
235,488
11,095,977
AGL Investments, Inc.
(73,866)
8,705
5
(65,156)
Sequent LLC
(413)
154,400
113
154,100
Georgia Natural Gas Company
357,622
2,785,259
179,682
3,322,563
Atlanta Gas Light Company
24,684,864
75,240,974
1,187,472
101,113,310
Chattanooga Gas Company
1,479,627
5,082,007
78,626
6,640,259
Trustees Investments, Inc.
432
2,066
170
2,667
Investments HighLevel Present
(125)
44,044
-
43,919
AGL Peaking Services
504
5,421
396
6,321
AGL Capital Trust
9,717
121,395
8,190
139,302
AGL Rome Holding, Inc.
0
309
22
332
AGL Energy Corporation
10
450
20
480
AGL Propane Services, Inc.
83,816
31,974
916
116,705
HighLevel Presentation Reclass
11,121
(3,919,174)
-
(3,908,054)
Virginia Natural Gas
4,776,841
17,592,034
344,989
22,713,865
AGL Networks, LLC
723,869
1,167,535
26,462
1,917,866
AGL Capital Corporation
41,271
51,000
2,082
94,353
Southeastern LNG, Inc.
13
3,142
140
3,295
Customer Care Services Company
3
(455)
(50)
(503)
Global Energy Res Insurance Co
849
6,911
47
7,808
AGL Capital Trust II
19,131
246,275
16,134
281,540
Sequent Energy Mngmt, LP-Corp
1,479,802
4,706,353
119,176
6,305,330
Sequent Holdings, LLC
4,348
11,160
198
15,705
Pivotal Propane of Virginia In
1,547
85,920
870
88,337
Pivotal Energy Services, Inc.
55,691
8,118
9
63,817
Distribution Operations Corp
(10,722)
3,778,803
-
3,768,081
Wholesale Corp Highlevel Pre
(273)
96,327
-
96,053
Jefferson Island Storage & Hub
161,668
122,567
-
284,235
Appliance Bus FL Plumbing
78
(27,383)
-
(27,305)
Appliance Bus FL Service
6,932
(231,250)
-
(224,318)
Appliance Bus NJ Service
5,074
(498,207)
-
(493,133)
Florida City Gas
(3,939)
520,982
-
517,042
Elkton Gas Services
1,523
62,424
-
63,946
Elizabethtown Gas Company
79,747
1,753,019
-
1,832,765
NUI Energy Brokers
(17)
5,895
-
5,879
NUI Headquarters
124,220
1,409,758
67,736
1,601,713
Utility Business Services
3,744
(305,910)
-
(302,165)
NUI Utilities Inc.
(97,174)
(1,839,385)
-
(1,936,559)
Virginia Gas-Distritbution
(18)
6,466
-
6,447
Virginia Gas
5,637
(5,280)
-
357
Virginia Gas - Pipeline
(261)
91,947
-
91,686
Virginia Gas - Storage
(44)
15,362
-
15,318
         
Total
34,381,225
118,804,067
2,268,893
155,454,185


1



ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

ANALYSIS OF BILLING

NONASSOCIATE COMPANIES
ACCOUNT 458

NAME OF NONASSOCIATE COMPANY
DIRECT COST CHARGED
INDIRECT COST CHARGED
COMPENSATION FOR USE OF CAPITAL
TOTAL AMOUNT BILLED
EFFECT OF MARKET RATE BILLING (SEE NOTE)
           
 
 
 
 
 
 
NOT APPLICABLE
 
 
 
 
 
 
 
 
 
 
 
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XVI

ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES

ACCOUNT
DESCRIPTION
DIRECT COST
INDIRECT COST
TOTAL
         
 
ASSOCIATE COMPANY CHARGES
     
         
403
Depreciation Expense
2,010,328
7,127,525
9,137,853
404.3
Amortization of other limited-term gas plant
37,669
133,553
171,222
408.1
Taxes other than income taxes, utility operating income
823,302
2,918,981
3,742,283
409.1
Income taxes, utility operating income
(390,652)
(1,385,037)
(1,775,689)
410.1
Provision for deferred income taxes, utility operating income
390,652
1,385,037
1,775,689
411.6
Gains on Disposition of Utility Plant
815,488
2,891,275
3,706,762
419
Interest and dividend income
(42,274)
(149,881)
(192,155)
421
Miscellaneous income or loss
(268,176)
(950,805)
(1,218,980)
426.1
Donations
217,295
770,410
987,705
426.4
Expenditures for certain civic, political and related activities
22
80
102
426.5
Other donations
93,132
330,195
423,327
431
Other interest expense
499,156
1,769,736
2,268,893
488
Miscellaneous service revenue
19,726
69,938
89,664
493
Rent from gas property
(1,287)
(4,563)
(5,850)
840
LNG Supervision/Eng
36,012
127,680
163,693
841
Operation Supervision and Engineering
266,076
943,359
1,209,434
843.2
Maintenance of Structures and Improvements
8,544
30,292
38,836
843.3
Maintenance of Gas Holders
46
165
211
843.4
Maintenance of Purification Equipment
27,810
98,600
126,410
843.5
Maintenance of Liquefaction Equipment
62,426
221,330
283,757
843.6
Maintenance of Vaporizing Equipment
16,238
57,572
73,810
843.7
Maintenance of Compressor Equipment
19,895
70,537
90,432
843.9
Maintenance of Other Equipment
66,043
234,154
300,197
870
Operation Supervision and Engineering
12,809
45,413
58,222
871
Distribution Load Dispatching
1,126
3,994
5,120
874
Mains and Services Expenses
112,875
400,194
513,070
877
Measuring and Regulating Station Expenses-City Gate Check Station
119,702
424,399
544,101
878
Meter and House Regulator Expenses
152
540
693
879
Customer Installation Expenses
15
52
67
880
Other Expenses
46,211
163,839
210,050
887
Maintenance of Mains
15,171
53,789
68,960
888
Maintenance of Compressor Station Equipment
421
1,492
1,913
889
Maintenance of Meas. and Reg. Sta. Equip.-General
6,108
21,655
27,763
892
Maintenance of Services
8,601
30,494
39,095
893
Maintenance of Meters and House Regulators
25,236
89,473
114,708
894
Maintenance of Other Equipment
11,332
40,177
51,509
903
Customer Records and Collection Expenses
19,122
67,795
86,916
905
Miscellaneous Customer Accounts Expenses
25,813
91,519
117,332
907
Supervision
20
69
  
908
Customer Assistance Expenses
257,057
911,385
1,168,443
909
Informational and Instructional Expenses
(18)
(64)
(82)

 
 
         
ACCOUNT
DESCRIPTION
DIRECT COST
INDIRECT COST
TOTAL
         
912
Demonstrating and Selling Expenses
5,711
20,247
25,957
913
Advertising Expenses
323,547
1,147,122
1,470,669
916
Miscellaneous Sales Expenses
7,963
28,231
36,194
920
Administrative and General Salaries
9,705,919
34,411,896
44,117,815
921
Office Supplies and Expenses
2,425,164
8,598,310
11,023,474
922
Administrative Expenses Transferred-Cr.
(1,614,895)
(5,725,536)
(7,340,431)
924
Property Insurance
913,130
3,237,462
4,150,592
925
Injuries and Damages
378,722
1,342,741
1,721,463
926
Employee Pensions and Benefits
6,606,781
23,424,042
30,030,823
930.2
Miscellaneous General Expenses
862,550
3,058,132
3,920,682
931
Rents
1,575,359
5,585,363
7,160,722
932
Maintenance of General Plant
2,238,689
7,937,168
10,175,857
923
Outside Services Employed
24,554,795
1,473,078
26,027,872
924
Property Insurance
4,150,592
-
4,150,592
925
Injuries and Damages
1,721,463
-
1,721,463
926
Employee Pensions and Benefits
30,030,823
(1,410)
30,029,413
930.2
Miscellaneous General Expenses
3,920,682
464,125
4,384,808
931
Rents
7,160,722
6,069,540
13,230,262
932
Maintenance of General Plant
10,175,857
5,850,553
16,026,410
         
 
TOTAL COST OF SERVICE
115,914,854
135,110,151
251,024,917
         
         
  NON-ASSOCIATE COMPANY CHARGES       
 
NOT APPLICABLE
      


1/    Direct and Indirect cost are captured only at the business unit level as reported on the schedule “Analysis of Billing” on page 26. Of the total cost, direct cost is 22% and indirect cost is 78%.
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XVII

SCHEDULE OF EXPENSES DISTRIBUTED BY
DEPARTMENT OR SERVICE FUNCTION

         
ACCOUNT
DESCRIPTION
TOTAL AMOUNT
BUSINESS SUPPORT
CUSTOMER SERVICE
         
 
EXPENSES
     
         
403
Depreciation Expense
9,137,853
1,750,047
316,298
404.3
Amortization of other limited-term gas plant
171,222
-
-
408.1
Taxes other than income taxes, utility operating income
3,742,283
206,018
409,660
409.1
Income taxes, utility operating income
(1,775,689)
-
-
410.1
Provision for deferred income taxes, utility operating income
1,775,689
-
-
411.6
Gains on Disposition of Utility Plant
3,706,762
453,880
-
419
Interest and dividend income
(192,155)
-
-
421
Miscellaneous income or loss
(1,218,980)
(137,335)
(4,000)
426.1
Donations
987,705
137,335
4,000
426.4
Expenditures for certain civic, political and related activities
102
-
-
426.5
Other donations
423,327
-
-
431
Other interest expense
2,268,893
-
-
488
Miscellaneous service revenue
89,664
-
256
493
Rent from gas property
(5,850)
-
-
840
LNG Supervision/Eng
163,693
-
-
841
Operation Supervision and Engineering
1,209,434
-
-
843.2
Maintenance of Structures and Improvements
38,836
-
-
843.3
Maintenance of Gas Holders
211
-
-
843.4
Maintenance of Purification Equipment
126,410
-
-
843.5
Maintenance of Liquefaction Equipment
283,757
-
-
843.6
Maintenance of Vaporizing Equipment
73,810
-
-
843.7
Maintenance of Compressor Equipment
90,432
-
-
843.9
Maintenance of Other Equipment
300,197
-
-
870
Operation Supervision and Engineering
58,222
-
-
871
Distribution Load Dispatching
5,120
-
-
874
Mains and Services Expenses
513,070
-
-
877
Measuring and Regulating Station Expenses-City Gate Check Station
544,101
-
-
878
Meter and House Regulator Expenses
693
-
-
879
Customer Installations Expenses
67
-
-
880
Other Expenses
210,050
-
89,845
887
Maintenance of Mains
68,960
125
-
888
Maintenance of Compressor Station Equipment
1,913
-
-
889
Maintenance of Meas. and Reg. Sta. Equip.-General
27,763
-
-
892
Maintenance of Services
39,095
125
-
893
Maintenance of Meters and House Regulators
114,708
-
-
894
Maintenance of Other Equipment
51,509
-
-
903
Customer Records and Collection Expenses
86,916
2,724
-
905
Miscellaneous Customer Accounts Expenses
117,332
-
15,457
907
Supervision
88
-
-
908
Customer Assistance Expenses
1,168,443
-
1,140,487
909
Informational and Instructional Expenses
(82)
-
-


 
 
         
ACCOUNT
DESCRIPTION
TOTAL AMOUNT
BUSINESS SUPPORT
CUSTOMER SERVICE
         
912
Demonstrating and Selling Expenses
25,957
-
-
913
Advertising Expenses
1,470,669
810
-
916
Miscellaneous Sales Expenses
36,194
-
-
920
Administrative and General Salaries
44,117,815
2,289,234
5,306,521
921
Office Supplies and Expenses
11,023,474
915,682
531,746
922
Administrative Expenses Transferred-Cr.
(7,340,431)
(72,369)
(367,473)
923
Outside Services Employed
24,554,795
1,473,078
106,883
924
Property Insurance
4,150,592
-
-
925
Injuries and Damages
1,721,463
-
-
926
Employee Pensions and Benefits
30,030,823
(1,410)
(74,419)
930.2
Miscellaneous General Expenses
3,920,682
464,125
950
931
Rents
7,160,722
6,069,540
25,567
932
Maintenance of General Plant
10,175,857
5,850,553
782
         
 
TOTAL O&M EXPENSES
155,454,185
19,402,162
7,502,559
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XVII (Continued)

SCHEDULE OF EXPENSES DISTRIBUTED BY
DEPARTMENT OR SERVICE FUNCTION

         
ACCOUNT
DESCRIPTION
EMPLOYEE SERVICE
ENGINEERING
EXECUTIVE
         
 
EXPENSES
     
         
403
Depreciation Expense
369,543
156,504
-
404.3
Amortization of other limited-term gas plant
-
-
-
408.1
Taxes other than income taxes, utility operating income
214,973
691,159
94,952
409.1
Income taxes, utility operating income
-
-
-
410.1
Provision for deferred income taxes, utility operating income
-
-
-
411.6
Gains on Disposition of Utility Plant
62,718
(22,132)
-
419
Interest and dividend income
-
-
-
421
Miscellaneous income or loss
(15,000)
(3,977)
(80,050)
426.1
Donations
15,000
3,127
67,500
426.4
Expenditures for certain civic, political and related activities
-
90
-
426.5
Other donations
-
760
12,550
431
Other interest expense
-
-
-
488
Miscellaneous service revenue
-
(149,442)
-
493
Rent from gas property
-
-
-
840
LNG Supervision/Eng
-
-
-
841
Operation Supervision and Engineering
-
-
-
843.2
Maintenance of Structures and Improvements
-
-
-
843.3
Maintenance of Gas Holders
-
-
-
843.4
Maintenance of Purification Equipment
-
-
-
843.5
Maintenance of Liquefaction Equipment
-
-
-
843.6
Maintenance of Vaporizing Equipment
-
-
-
843.7
Maintenance of Compressor Equipment
-
-
-
843.9
Maintenance of Other Equipment
-
-
-
870
Operation Supervision and Engineering
-
58,222
-
871
Distribution Load Dispatching
-
(11)
-
874
Mains and Services Expenses
-
508,724
-
877
Measuring and Regulating Station Expenses-City Gate Check Station
-
-
-
878
Meter and House Regulator Expenses
-
502
-
879
Customer Installations Expenses
-
67
-
880
Other Expenses
-
41,278
-
887
Maintenance of Mains
-
67,489
-
888
Maintenance of Compressor Station Equipment
-
-
-
889
Maintenance of Meas. and Reg. Sta. Equip.-General
-
-
-
892
Maintenance of Services
-
38,970
-
893
Maintenance of Meters and House Regulators
-
156
-
894
Maintenance of Other Equipment
-
-
-
903
Customer Records and Collection Expenses
-
82,662
-
905
Miscellaneous Customer Accounts Expenses
-
50
-
907
Supervision
-
88
-
908
Customer Assistance Expenses
-
-
-
909
Informational and Instructional Expenses
-
(82)
-


 
 
         
ACCOUNT
DESCRIPTION
EMPLOYEE SERVICE
ENGINEERING
EXECUTIVE
         
912
Demonstrating and Selling Expenses
-
-
-
913
Advertising Expenses
-
-
-
916
Miscellaneous Sales Expenses
-
-
-
920
Administrative and General Salaries
2,343,550
5,807,982
1,279,020
921
Office Supplies and Expenses
731,514
1,510,835
244,744
922
Administrative Expenses Transferred-Cr.
(174,932)
(4,890,481)
(91,894)
923
Outside Services Employed
3,336,565
647,941
405,184
924
Property Insurance
1,594
-
-
925
Injuries and Damages
-
-
-
926
Employee Pensions and Benefits
28,531,230
427,474
(29,677)
930.2
Miscellaneous General Expenses
81,861
42,838
193,043
931
Rents
7,300
18,117
(289)
932
Maintenance of General Plant
(5,459)
(257,828)
-
         
 
TOTAL O&M EXPENSES
35,500,456
4,781,083
2,095,082
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XVII (Continued)

SCHEDULE OF EXPENSES DISTRIBUTED BY
DEPARTMENT OR SERVICE FUNCTION

         
ACCOUNT
DESCRIPTION
EXTERNAL RELATIONS
FINANCIAL SERVICES
GAS SUPPORT MANAGEMENT
         
 
EXPENSES
     
         
403
Depreciation Expense
29
692,380
208,273
404.3
Amortization of other limited-term gas plant
-
-
-
408.1
Taxes other than income taxes, utility operating income
63,710
335,573
509,604
409.1
Income taxes, utility operating income
-
-
-
410.1
Provision for deferred income taxes, utility operating income
-
-
-
411.6
Gains on Disposition of Utility Plant
472
197
80,825
419
Interest and dividend income
-
-
-
421
Miscellaneous income or loss
(1,098,680)
(1,100)
(2,750)
426.1
Donations
727,794
1,100
2,750
426.4
Expenditures for certain civic, political and related activities
12
-
-
426.5
Other donations
370,875
-
-
431
Other interest expense
-
45,229
-
488
Miscellaneous service revenue
-
-
773
493
Rent from gas property
-
-
(5,850)
495
Other utility operating income
-
-
-
804
Natural Gas City Gate Purchases
-
-
-
807
Purchased Gas Expenses
-
-
-
840
LNG Supervision/Eng
-
-
163,693
841
Operation Supervision and Engineering
-
-
1,209,434
843.2
Maintenance of Structures and Improvements
-
-
38,836
843.3
Maintenance of Gas Holders
-
-
211
843.4
Maintenance of Purification Equipment
-
-
126,410
843.5
Maintenance of Liquefaction Equipment
-
-
283,757
843.6
Maintenance of Vaporizing Equipment
-
-
73,810
843.7
Maintenance of Compressor Equipment
-
-
90,432
843.9
Maintenance of Other Equipment
-
-
300,197
870
Operation Supervision and Engineering
-
-
-
871
Distribution Load Dispatching
-
-
5,132
874
Mains and Services Expenses
-
1,038
1,740
875
Measuring and Regulating Station Expenses-General
-
-
-
877
Measuring and Regulating Station Expenses-City Gate Check Station
-
-
540,966
878
Meter and House Regulator Expenses
-
-
191
879
Customer Installations Expenses
-
-
-
880
Other Expenses
-
256
8,933
887
Maintenance of Mains
-
-
426
888
Maintenance of Compressor Station Equipment
-
-
1,913
889
Maintenance of Meas. and Reg. Sta. Equip.-General
-
-
27,763
892
Maintenance of Services
-
-
-
893
Maintenance of Meters and House Regulators
-
-
114,457
894
Maintenance of Other Equipment
-
-
51,509
902
Meter Reading Expenses
-
-
-
903
Customer Records and Collection Expenses
-
-
-
905
Miscellaneous Customer Accounts Expenses
-
71,644
30,181
 
 
 
         
ACCOUNT
DESCRIPTION
EXTERNAL RELATIONS
FINANCIAL SERVICES
GAS SUPPORT MANAGEMENT
         
907
Supervision
-
-
-
908
Customer Assistance Expenses
-
-
27,956
909
Informational and Instructional Expenses
-
-
-
912
Demonstrating and Selling Expenses
-
-
-
913
Advertising Expenses
-
-
-
916
Miscellaneous Sales Expenses
-
-
-
920
Administrative and General Salaries
1,122,860
4,623,130
4,356,027
921
Office Supplies and Expenses
736,560
739,303
734,214
922
Administrative Expenses Transferred-Cr.
(76,485)
(318,887)
(286,067)
923
Outside Services Employed
63,050
3,312,412
190,574
924
Property Insurance
-
-
-
925
Injuries and Damages
-
-
-
926
Employee Pensions and Benefits
126,954
1,013,903
9,697
930.2
Miscellaneous General Expenses
81,350
495,224
(26,342)
931
Rents
4
25,728
21,108
932
Maintenance of General Plant
3,981
842
(85,860)
         
 
TOTAL O&M EXPENSES
2,122,486
11,037,971
8,804,923
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XVII (Continued)

SCHEDULE OF EXPENSES DISTRIBUTED BY
DEPARTMENT OR SERVICE FUNCTION

         
ACCOUNT
DESCRIPTION
INFORMATION TECHNOLOGY
INTERNAL AUDIT
INVESTOR RELATIONS
         
 
EXPENSES
     
         
403
Depreciation Expense
5,068,405
-
-
404.3
Amortization of other limited-term gas plant
-
-
-
408.1
Taxes other than income taxes, utility operating income
821,848
35,420
4,984
409.1
Income taxes, utility operating income
-
-
-
410.1
Provision for deferred income taxes, utility operating income
-
-
-
411.6
Gains on Disposition of Utility Plant
3,648,980
-
-
419
Interest and dividend income
-
-
-
421
Miscellaneous income or loss
(10,000)
-
(1,000)
426.1
Donations
10,000
-
1,000
426.4
Expenditures for certain civic, political and related activities
-
-
-
426.5
Other donations
-
-
-
431
Other interest expense
-
-
-
488
Miscellaneous service revenue
-
-
-
493
Rent from gas property
-
-
-
840
LNG Supervision/Eng
-
-
-
841
Operation Supervision and Engineering
-
-
-
843.2
Maintenance of Structures and Improvements
-
-
-
843.3
Maintenance of Gas Holders
-
-
-
843.4
Maintenance of Purification Equipment
-
-
-
843.5
Maintenance of Liquefaction Equipment
-
-
-
843.6
Maintenance of Vaporizing Equipment
-
-
-
843.7
Maintenance of Compressor Equipment
-
-
-
843.9
Maintenance of Other Equipment
-
-
-
870
Operation Supervision and Engineering
-
-
-
871
Distribution Load Dispatching
-
-
-
874
Mains and Services Expenses
1,567
-
-
877
Measuring and Regulating Station Expenses-City Gate Check Station
-
-
-
878
Meter and House Regulator Expenses
-
-
-
879
Customer Installations Expenses
-
-
-
880
Other Expenses
69,738
-
-
887
Maintenance of Mains
-
-
-
888
Maintenance of Compressor Station Equipment
-
-
-
889
Maintenance of Meas. and Reg. Sta. Equip.-General
-
-
-
892
Maintenance of Services
-
-
-
893
Maintenance of Meters and House Regulators
-
-
-
894
Maintenance of Other Equipment
-
-
-
903
Customer Records and Collection Expenses
-
-
-
905
Miscellaneous Customer Accounts Expenses
-
-
-
907
Supervision
-
-
-
908
Customer Assistance Expenses
-
-
-
909
Informational and Instructional Expenses
-
-
-
 
 
 
         
ACCOUNT
DESCRIPTION
INFORMATION TECHNOLOGY
INTERNAL AUDIT
INVESTOR RELATIONS
         
912
Demonstrating and Selling Expenses
-
-
-
913
Advertising Expenses
2,096
-
-
916
Miscellaneous Sales Expenses
-
-
-
920
Administrative and General Salaries
10,997,766
606,390
121,306
921
Office Supplies and Expenses
3,749,150
50,641
124,925
922
Administrative Expenses Transferred-Cr.
(647,455)
(42,023)
(11,868)
923
Outside Services Employed
10,934,119
657,216
114,804
924
Property Insurance
-
-
-
925
Injuries and Damages
-
-
-
926
Employee Pensions and Benefits
(217,654)
(12,682)
(2,648)
930.2
Miscellaneous General Expenses
79,819
136
5,880
931
Rents
824,394
283
(144)
932
Maintenance of General Plant
4,664,265
-
-
         
 
TOTAL O&M EXPENSES
39,997,038
1,295,382
357,237
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XVII (Continued)

SCHEDULE OF EXPENSES DISTRIBUTED BY
DEPARTMENT OR SERVICE FUNCTION

         
ACCOUNT
DESCRIPTION
LEGAL
MARKETING
RATES & REGULATION
         
 
EXPENSES
     
         
403
Depreciation Expense
4,122
317,008
-
404.3
Amortization of other limited-term gas plant
-
-
-
408.1
Taxes other than income taxes, utility operating income
131,864
95,214
49,853
409.1
Income taxes, utility operating income
-
-
-
410.1
Provision for deferred income taxes, utility operating income
-
-
-
411.6
Gains on Disposition of Utility Plant
953
352
-
419
Interest and dividend income
-
-
-
421
Miscellaneous income or loss
(19,860)
(999)
(31,036)
426.1
Donations
11,000
-
3,000
426.4
Expenditures for certain civic, political and related activities
-
-
-
426.5
Other donations
8,860
999
28,036
431
Other interest expense
-
-
-
488
Miscellaneous service revenue
-
238,076
-
493
Rent from gas property
-
-
-
840
LNG Supervision/Eng
-
-
-
841
Operation Supervision and Engineering
-
-
-
843.2
Maintenance of Structures and Improvements
-
-
-
843.3
Maintenance of Gas Holders
-
-
-
843.4
Maintenance of Purification Equipment
-
-
-
843.5
Maintenance of Liquefaction Equipment
-
-
-
843.6
Maintenance of Vaporizing Equipment
-
-
-
843.7
Maintenance of Compressor Equipment
-
-
-
843.9
Maintenance of Other Equipment
-
-
-
870
Operation Supervision and Engineering
-
-
-
871
Distribution Load Dispatching
-
-
-
874
Mains and Services Expenses
-
-
-
877
Measuring and Regulating Station Expenses-City Gate Check Station
-
3,135
-
878
Meter and House Regulator Expenses
-
-
-
879
Customer Installations Expenses
-
-
-
880
Other Expenses
-
-
-
887
Maintenance of Mains
-
920
-
888
Maintenance of Compressor Station Equipment
-
-
-
889
Maintenance of Meas. and Reg. Sta. Equip.-General
-
-
-
892
Maintenance of Services
-
-
-
893
Maintenance of Meters and House Regulators
-
95
-
894
Maintenance of Other Equipment
-
-
-
903
Customer Records and Collection Expenses
-
1,530
-
905
Miscellaneous Customer Accounts Expenses
-
-
-
907
Supervision
-
-
-
908
Customer Assistance Expenses
-
-
-
909
Informational and Instructional Expenses
-
-
-

 
 
         
ACCOUNT
DESCRIPTION
LEGAL
MARKETING
RATES & REGULATION
         
912
Demonstrating and Selling Expenses
-
25,957
-
913
Advertising Expenses
-
1,056,391
-
916
Miscellaneous Sales Expenses
-
36,194
-
920
Administrative and General Salaries
2,014,807
1,554,323
912,344
921
Office Supplies and Expenses
247,398
366,430
155,627
922
Administrative Expenses Transferred-Cr.
(142,844)
(98,664)
(63,650)
923
Outside Services Employed
1,774,652
778,469
371,072
924
Property Insurance
4,148,523
475
-
925
Injuries and Damages
1,759,799
-
-
926
Employee Pensions and Benefits
74,413
(31,289)
111,090
930.2
Miscellaneous General Expenses
1,827,677
24,366
(19,069)
931
Rents
(144)
168,792
464
932
Maintenance of General Plant
-
4,580
-
         
 
TOTAL O&M EXPENSES
11,841,218
4,542,355
1,517,731
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHEDULE XVII (Continued)

SCHEDULE OF EXPENSES DISTRIBUTED BY
DEPARTMENT OR SERVICE FUNCTION

     
ACCOUNT
DESCRIPTION
OTHER
     
 
EXPENSES
 
     
403
Depreciation Expense
255,246
404.3
Amortization of other limited-term gas plant
171,222
408.1
Taxes other than income taxes, utility operating income
76,942
409.1
Income taxes, utility operating income
(1,775,689)
410.1
Provision for deferred income taxes, utility operating income
1,775,689
411.6
Gains on Disposition of Utility Plant
(519,483)
419
Interest and dividend income
(192,155)
421
Miscellaneous income or loss
186,807
426.1
Donations
4,100
426.4
Expenditures for certain civic, political and related activities
-
426.5
Other donations
1,248
431
Other interest expense
2,223,664
488
Miscellaneous service revenue
-
493
Rent from gas property
-
840
LNG Supervision/Eng
-
841
Operation Supervision and Engineering
-
843.2
Maintenance of Structures and Improvements
-
843.3
Maintenance of Gas Holders
-
843.4
Maintenance of Purification Equipment
-
843.5
Maintenance of Liquefaction Equipment
-
843.6
Maintenance of Vaporizing Equipment
-
843.7
Maintenance of Compressor Equipment
-
843.9
Maintenance of Other Equipment
-
870
Operation Supervision and Engineering
-
871
Distribution Load Dispatching
-
874
Mains and Services Expenses
-
877
Measuring and Regulating Station Expenses-City Gate Check Station
-
878
Meter and House Regulator Expenses
-
879
Customer Installations Expenses
-
880
Other Expenses
-
887
Maintenance of Mains
-
888
Maintenance of Compressor Station Equipment
-
889
Maintenance of Meas. and Reg. Sta. Equip.-General
-
892
Maintenance of Services
-
893
Maintenance of Meters and House Regulators
-
894
Maintenance of Other Equipment
-
903
Customer Records and Collection Expenses
-
905
Miscellaneous Customer Accounts Expenses
-
907
Supervision
-
908
Customer Assistance Expenses
-
909
Informational and Instructional Expenses
-

 
 
     
ACCOUNT
DESCRIPTION
OTHER
     
912
Demonstrating and Selling Expenses
-
913
Advertising Expenses
411,373
916
Miscellaneous Sales Expenses
-
920
Administrative and General Salaries
782,554
921
Office Supplies and Expenses
184,705
922
Administrative Expenses Transferred-Cr.
(55,338)
923
Outside Services Employed
388,777
924
Property Insurance
-
925
Injuries and Damages
(38,336)
926
Employee Pensions and Benefits
105,840
930.2
Miscellaneous General Expenses
668,825
931
Rents
-
932
Maintenance of General Plant
-
     
 
TOTAL O&M EXPENSES
4,655,991
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

DEPARTMENTAL ANALYSIS OF SALARIES

ACCOUNT 920
DEPARTMENTAL SALARY EXPENSE

NAME OF DEPARTMENT
 
INCLUDED IN AMOUNT BILLED TO
PERSONNEL
Indicate each department or service function
TOTAL AMOUNT Acct. #920
PARENT COMPANY
OTHER ASSOCIATES
NON ASSOCIATES
END OF YEAR
 
 
/ 1
 
 
 
 
 
 
 
 
 
Business Support
2,289,234
58,375
2,230,859
-
40
Customer Service
5,306,521
135,316
5,171,205
-
118
Employee Service
2,343,550
59,761
2,283,789
-
48
Engineering
5,807,982
148,104
5,659,878
-
170
Executive
1,279,020
32,615
1,246,405
-
6
External Relations
1,122,860
28,633
1,094,227
-
13
Financial Services
4,623,130
117,890
4,505,240
-
63
Gas Support Management
4,356,027
111,079
4,244,948
-
116
Information Technology
10,997,766
280,443
10,717,323
-
143
Internal Audit
606,390
15,463
590,927
-
10
Investor Relations
121,306
3,093
118,213
-
1
Legal
2,014,807
51,378
1,963,429
-
25
Marketing
1,554,323
39,635
1,514,688
-
16
Rates & Regulations
912,344
23,265
889,079
-
11
Other
782,554
19,955
762,599
-
9
TOTAL
44,117,814
1,125,004
42,992,810
-
789

/1
The parent company (AGL Resources Inc.) receives 7% of total allocated cost from the Services Company as shown on page 26. Since we only capture these cost at the business unit level, the cost were split 93%, 7% between other associate company
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the year Ended December 31, 2004

OUTSIDE SERVICES EMPLOYED

ACCOUNT 923

INSTRICTIONS:
Provide a breakdown by subaccount of outside services employed. If the aggregated amount paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service.


       
FROM WHOM PURCHASED
DESCRIPTION OF LARGEST INVOICE
RELATIONSHIP "A" = ASSOCIATE "NA" = NONASSOCIATE
AMOUNT
       
Legal
      
Alston & Bird
Legal Services
NA
239,747
Judith S. Kim
Legal Services
NA
105,845
Leboeuf, Lamb, Green & Macrak, LLP
Legal Services
NA
116,864
Littler Mendelson, PC
Legal Services
NA
203,346
Several other items less than $100,000
Legal Services
NA
50,778
Subtotal - Legal Services
    
716,580
       
Audit & Consulting
      
Deloitte
Auditing
NA
120,065
Ernst & Young
Consulting
NA
1,459,933
PriceWaterHouseCoopers
Auditing
NA
1,052,637
Several other items less than $100,000
Consulting
NA
77,393
Subtotal - Audit & Consulting
    
2,710,028
       
Information Technology
      
Acxiom
Consulting
NA
3,437,428
Acxiom/Acess Communications Systems
Consulting
NA
321,834
Capstone Consulting Partners, nc.
Consulting
NA
1,814,876
David Jewell
Contractor
NA
188,694
LogicaCAM Professional Services
Consulting
NA
2,150,360
P&P
Consulting
NA
357,063
Sapient
Contractor
NA
1,094,924
Skybridge
Consulting
NA
257,511
Sungard Recovery Services
Consulting
NA
235,020
Several other items less than $100,000
Consulting
NA
807,258
Subtotal - Information Technology
    
10,664,968
       
Human Resources & Other
      
Accenture
Consulting
NA
142,792
Alighned Leadership Group
Consulting
NA
119,063
Atlanta Health Systems
Professional Services
NA
188,332
Baker Auto
Professional Services
NA
130,720
Continental Promotional Group
Consulting
NA
106,317
Corestaff Services
Professional Services
NA
449,964
Epstein, Becker & Green PC
Professional Services
NA
256,265
Equiserve
Professional Services
NA
148,987
Griswold
Consulting
NA
145,406

 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the year Ended December 31, 2004

OUTSIDE SERVICES EMPLOYED

ACCOUNT 923 (Continued)

 
INSTRICTIONS:
Provide a breakdown by subaccount of outside services employed. If the aggregated amount paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service.

 
       
FROM WHOM PURCHASED
DESCRIPTION OF LARGEST INVOICE
RELATIONSHIP "A" = ASSOCIATE "NA" = NONASSOCIATE
AMOUNT
       
Dan Hennig
Contractor
NA
502,054
Intellinet
Contractor
NA
516,440
Lukens Energy Group
Consulting
NA
206,607
Marsh USA Inc
Consulting
NA
253,773
McKenneys
Professional Services
NA
134,455
Mercer Human Resources
Consulting
NA
344,824
Millennium Benefits Consulting
Consulting
NA
136,552
Parsons Group
Contractor
NA
271,764
PCK Resources
Contractor
NA
205,655
Prudential
Consulting
NA
144,000
Right Management
Contractor
NA
115,758
Sperduto & Associates
Contractor
NA
236,663
The Meridian Institute
Consulting
NA
273,312
Titus
Professional Services
NA
445,160
Towers Perrin
Contractor
NA
220,973
Untralink Benefit
Professional Services
NA
198,784
Weltner Company
Consulting
NA
101,036
Several other items less than $100,000
Consulting
NA
2,714,248
Subtotal - Human Resources & Other
    
8,709,904
       
Facilities
      
Eurest
Contractor
NA
236,229
More Business Solutions
Contractor
NA
548,346
Ten Peechtree Place & Association
Contractor
NA
121,428
Several other items less than $100,000
Contractor
NA
847,312
Subtotal - Facilities
    
1,753,315
       
       
TOTAL
    
24,554,795
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended Dcember 31, 2004

EMPLOYEE PENSION AND BENEFITS

ACCOUNT 926

 
INSTRUCTIONS:
Provide a listing of each pension plan and benefit program provided by the service company. Such listing should be limited to $25,000.

 
Description
Amount
 
 
Pensions
1,107,143
Flex Benefit Deductions - Employee Contribution
(1,508,954)
Post Retirement Medical and Life Benefits
347,894
Educational Assistance Plan
130,401
Employee Savings Plan/ESOP - Company Contribution
2,283,941
Bonus
19,848,803
Group Insurance
5,890,155
Flexible Credit Benefits - Company Contributions
573
Other (Other Employee Fringe Benefits)
1,930,867
 
 
Total
30,030,823
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

GENERAL ADVERTISING EXPENSES

ACCOUNT 930.1

 
INSTRUCTIONS:
Provide a listing of the amount included in Account 930.1, “General Advertising Expenses”, classifying the items according to the nature of the advertising and as defined in the account definition. If a particular class includes an amount in excess of $3,000 applicable to a single payee, show separately the name of the payee and the aggregate amount applicable thereto.


DESCRIPTION
NAME OF PAYEE
AMOUNT
     
Not Applicable
    
 
TOTAL
  
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

MISCELLANEOUS GENERAL EXPENSES

ACCOUNT 930.2


INSTRUCTIONS:
provide a list of amounts included in Account 930.2, “Miscellaneous General Expenses”, classifying the items according to their nature. Payments and expenses permitted by Section 321 (b) (2) of the Federal Election Campaign Act, as amended by Public Law 94-284 in 1976 (2 U.S.C.S 441 (b) (2) shall be separately classified.

 
DECSRIPTION
AMOUNT
 
 
Dues & Membership
160,250
Communications Materials
611,643
Misc Repairs
284,221
Legal Cost
116,682
Annual Report and Printing Cost
756,715
Computer Software and Hardware Cost
160,785
Board of Directors Expenses
492,765
Commisions
42,073
Consulting Cost
341,730
Public Relations
119,600
Employee Benefits
356,499
Workers Comp Fees & Assesment
64,786
Misc. Expenses
412,933
 
  
 
  
TOTAL
3,920,682
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

RENTS

ACCOUNT 931
 
 
INSTRUCTIONS:
Provide a listing of the amount included in Account 931, “Rents”, classifying such expenses by major groupings of property, as defined in the account definition of the Uniform System of Accounts.


DESCRIPTION
AMOUNT
Computer, Data Processing and other Communication Equipment rental
1,016,389
Office Rents
6,144,332
   
TOTAL
7,160,722
 
 


ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

TAXES OTHER THAN INCOME

ACCOUNT 408


INSTRUCTIONS:
Provide an analysis of Account 408, “Taxes Other Than Income Taxes”. Separate the analysis into two groups: (1) other than U.S. Government taxes, and (2) U.S. Government taxes. Specify each of the various kinds of taxes and show the amounts thereof. Provide a subtotal for each class of tax.

 
KIND OF TAX
AMOUNT
 
 
OTHER THAN U.S. GOVERNMENT TAXES
 
State Unemployment
31,377
Property Tax
150,001
Subtotal - Other
181,378
 
  
 
  
U.S. GOVERNMENT TAXES
  
Fed. Insurance Contribution Act.
3,378,147
Federal Unemployment
182,758
Subtotal - U.S. Government
3,560,905
 
  
TOTAL
3,742,283
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004
DONATIONS

ACCOUNT 426.1
 
 
INSTRUCTIONS:
Provide a listing of the amount included in Account 426.1, “Donations”, classifying such expenses by its purpose. The aggregate number and amount of all items of less than $3,000 may be shown in lieu of details.


NAME OF RECIPIENT
PURPOSE OF DONATION
AMOUNT
 
 
 
American Red Cross
Civic & Charitable
26,000
Chris Homes
Civic & Charitable
3,500
Fernbank Museum
Civic & Charitable
5,000
United Way
Civic & Charitable
656,250
Novare Biltmore
Civic & Charitable
14,678
YMCA
Civic & Charitable
4,500
 
Civic & Charitable
21,050
 
 
  
Atlanta History Center
Program Support
8,200
CEAF Wolff Research
Program Support
3,000
G8 Summit
Program Support
25,000
Woodruff
Program Support
3,500
The Georgia Conservancy
Program Support
6,000
 
 
  
 
 
  
Other Items Less Than $3,000
Education
2,600
Other Items Less Than $3,000
Civic & Charitable
199,427
Other Items Less Than $3,000
Program Support
9,000
 
 
  
TOTAL
 
987,705
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

OTHER DEDUCTIONS

ACCOUNT 426.5


INSTRUCTIONS:
Provide a listing of the amount included in Account 426.5, “Other Deductions”, classifying such expenses according to their nature.

 
DESCRIPTION
NAME OF PAYEE
AMOUNT
 
 
 
Lost Discounts
Various Payees
1,248
 
 
  
 
Subtotal
1,248
 
 
  
 
 
  
Governmental Affaires
 
  
 
 
  
 
BOLLER, SEWELL
90,690
 
GEORGIA CHAMBER OF COMMERCE
23,116
 
GEORGIALINK
33,000
 
J L MORGAN COMPANY
75,000
 
STEVE BIVE
36,000
 
SOUTHEASTERN LEGAL FOUNDATION
5,000
 
MCKENNA LONG & ALDRIDGE, LLP
8,860
 
EMPLOYEE RELATED EXPENSES
150,413
 
 
  
 
Subtotal
422,079
 
 
  
 
TOTAL
423,327
 
 


ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

SCHRDULE XVIII

NOTES TO STATEMENT OF INCOME


INSTRUCTIONS:
The space below is provided for important notes regarding the statement of income or any account thereof. Furnish particulars as to any significant increase in services rendered or expenses incurred during the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference.


See notes to Financial Statements, Schedule XIV, page 19-23


 


ANNUAL REPORT OF AGL SERVICES COMPANY

ORGANIZATION CHART


OFFICERS:
Paula R. Reynolds, President

Richard T. O’Brien, Executive Vice President and Chief Financial Officer

Paul R. Shlanta, Senior Vice President and Corporate Secretary

Andrew W. Evans, Vice President and Treasurer

Jeffrey P. Brown, Vice President, Associate General Counsel

Myra Coleman, Corporate Secretary


DIRECTORS:
Paul R. Shlanta
Richard T. O’Brien
Paula R. Reynolds


 

ANNUAL REPORT OF AGL SERVICES COMPANY

METHOD OF ALLOCATION


1.
Charge Back Methodology - Currently AGL Services Company (“The Company”)charges AGL Resources and its subsidiaries for the actual cost of services it provides. The following three key business requirements have been established in order to provide more accountability between the services provided and the costs charged to the operating companies, and to allocate costs on an equitable and accurate methodology in accordance with SEC PUHCA:

·
The Company’s methodology to charge each operating company for the cost of providing services is primarily based upon the number of service hours provided to each operating company and/or specific O&M project;

·
The charge back methodology consist of three steps (Direct Charge, Direct Assignment and Distributed/Allocated); and

·
The three-step methodology charges back actual costs during the same period in which they were incurred.

The following is a summary of the three-step charge back methodology:


Direct Charge

·
Costs associated with specific O&M projects entered into between The Company and an operating company will be accumulated by service provider and charged directly to the department within the operating company. For example, Engineering Services provides bridge maintenance services to Atlanta Gas Light Company’s Georgia Field Operations. Therefore, the costs associated with the bridge maintenance services would be charged directly to Georgia Field Operations.

·
Costs associated with Benefits, Fleet, Information Systems and Technology (IS&T) and Facilities will be charged directly to the departments within the operating company. Additionally, such costs will be charged directly to the departments within The Company to fully load the costs of the service providers. The costs will be charged out at a standard rate based upon a specific controllable driver. The drivers are number of employees and payroll dollars (Benefits), number of vehicles (Fleet), and square footage (Facilities). With respect to IS&T, drivers for the number of employees, personal computers, computer and application user sign-ons and end-use customers are utilized.

In accordance with the FERC system of accounts, a portion of the Fleet costs will be included in O&M. Additionally, Benefit costs will be included in O&M. The remaining expenses for Fleet and Facilities will be included below the line in the charge back general ledger accounts.

Currently, Fleet, IS&T and Facilities costs are charged out utilizing the above methodology. However, Benefits costs are not charged out utilizing standard rates. Instead, Benefits costs are allocated through shared services utilizing payroll dollars. However, Benefits costs does not include pension and postretirement expenses as these expenses are charged directly to the operating companies and the Company based on an actuarial study. For those pension and postretirement costs charged to the Company, they are internally allocated within the Company’s service provider departments based on payroll dollars in order to fully load the costs of the service providers.

Accounting credit will be given to the departments who provided these services to the operating companies.
 
 
 
Direct Assignment

The remaining costs (total operating expenses net of direct charges) will be charged to the operating companies based upon the percentage of time spent providing services to each operating company. The percentages will be calculated from cumulative hours tracked by operating company within The Company’s general ledger statistical accounts. As with direct charges, accounting credit will be given to the departments who provided these services to the operating companies.
 
Distributed/Allocated

·
The remaining costs (total operating expenses net of direct charges and direct assignments) will be charged to the operating companies utilizing a methodology to allocate or distribute the costs. These remaining costs are associated with unassigned time or time spent providing internal services.

The primary difference between allocated and distributed relates to the type of driver utilized. If there is causal relationship between the service provided and the allocation driver, this process is referred to as distributed. For example, remaining costs related to customer service activities will be distributed to the operating companies based upon a “number of end-use customers” driver.

However, if a logical causal relationship does not exist between the service provided and a driver, then the remaining expenses are allocated. For example, costs associated with Investor Relations benefits all operating companies as a whole. Additionally, there is no driver common to all operating companies, which establishes a logical casual relationship with the services provided. Therefore, the remaining expenses related to Investor Relations will be allocated based upon the Composite Ratio.


·
As with direct charges and direct assignments, accounting credit will be given to the departments who provided these services to the operating companies.

·
On a quarterly basis, The Company will generate an invoice to be provided to each operating company. The invoice will be broken down by service provider, and categorize costs between direct charge, direct assignment, distributed and allocated.
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY

For the Year Ended December 31, 2004

ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED


All interest was billed to each associate company either on the appropriate fixed percentage allocation basis or on the salary allocation basis in accordance with the SEC orders and service contracts. The total interest that was billed to each associate company is as follows:

   
NAME OF ASSOCIATE COMPANY
COMPENSATION FOR USE OF CAPITAL
457-3
 
 
AGL Resources Inc.
235,488
AGL Investments, Inc.
5
Sequent LLC
113
Georgia Natural Gas Company
179,682
Atlanta Gas Light Company
1,187,472
Chattanooga Gas Company
78,626
Trustees Investments, Inc.
170
AGL Peaking Services
396
AGL Capital Trust
8,190
AGL Rome Holding, Inc.
22
AGL Energy Corporation
20
AGL Propane Services, Inc.
916
Virginia Natural Gas
344,989
AGL Networks, LLC
26,462
AGL Capital Corporation
2,082
Southeastern LNG, Inc.
140
Customer Care Services Company
(50)
Global Energy Res Insurance Co
47
AGL Capital Trust II
16,134
Sequent Energy Mngmt, LP-Corp
119,176
Sequent Holdings, LLC
198
Pivotal Propane of Virginia In
870
Pivotal Energy Services, Inc.
9
NUI Headquarters
67,736
   
Total
2,268,893
 
 

ANNUAL REPORT OF AGL SERVICES COMPANY


SIGNATURE CLAUSE

Pursuant to the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations of the Securities and Exchange Commission issued thereunder, the undersigned company has duly caused this report to be signed on its behalf by the undersigned officer thereunto duly authorized.


AGL SERVICES COMPANY
(Name of Reporting Company)



/s/ Bryan E. Seas
(Signature of Signing Officer)



Bryan E. Seas
Vice President and
Controller
(Print Name and Title of Signing Officer)


Date:
May 2, 2005