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Conference Call to Review Fiscal 2006 First Quarter Financial Results February 8, 2006 8:00 a.m. EST

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Page 1: atmos enerrgy 16_slidepres

Conference Call to ReviewFiscal 2006 First Quarter

Financial Results

February 8, 20068:00 a.m. EST

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Forward Looking Statements

The matters discussed or incorporated by reference in this presentation may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this presentation are forward-looking statements made in good faith by the Company and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this presentation or in any of the Company’s other documents or oral presentations, the words “anticipate,” “believes,” “estimate,” “expect,” “forecast,” “goal,” “intends,” “objective,” “plans” “projection,” “seek,” “strategy” or similar words are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in this presentation, including the Company’s acquisition of the operations of TXU Gas, the Company’s ability to continue to access the capital markets and the other factors discussed in the Company’s SEC filings. These factors include the risks and uncertainties discussed in the Company’s Form 10-K for the fiscal year ended September 30, 2005. Although the Company believes these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. The Company undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

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$59.6$71.0

$0.0

$25.0

$50.0

$75.0

$100.0

1Q 2005 1Q 2006

($ in millions)($ in millions)

Key DriversKey DriversContribution of $33.5 million from Mid-Tex and Atmos Pipeline-Texas (APT) Divisions, an increase of $9.2 million quarter-over-quarterWeather was 7% warmer than normal but 7% colder than the prior-year quarter, as adjusted for jurisdictions with weather normalized rates Rate adjustments and expanded WNA coverage in MississippiIncreased taxes, other than income, due to higher franchise fees and higher gross receipts taxes resulting from higher gas pricesIncreased interest expense due to higher average short-term debt balances and an increase in the 3-month LIBOR rateDecreased O&M expenses from elimination of outsourced administrative and meter reading functions, offset in part by the impact of Hurricane Katrina and an increase in bad debt expense

Net IncomeNet Income

19%

Consolidated Financial Results – Fiscal 2006 1Q

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0.790.88

$0.20

$0.40

$0.60

$0.80

$1.00

1Q 2005 1Q 2006

NotesNotesQuarter-over-quarter increase of about 5 million weighted average diluted shares outstanding Increases in shares outstanding primarily due to 26 million shares issued in July and October 2004 to partially fund the TXU Gas acquisition

Earnings per Diluted ShareEarnings per Diluted Share

Consolidated Financial Results – Fiscal 2006 1Q

11%

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Net Income by SegmentNet Income by SegmentConsolidated Financial Results – Fiscal 2006 1Q

37.0

13.39.1

0.2

48.4

11.5 11.1

(0.0)

$0.0

$20.0

$40.0

$60.0

1Q 2005 1Q 2006Utility Natural gas marketingPipeline and storage Other nonutility

($ in

mill

ions

)

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DriversDrivers$24.5 million increase in gross profit

$22.9 million increase in utility gross profit

o $25.0 million increase primarily due to increased throughput of 6.9 Bcf, due to weather that was 7 percent colder than last year

o $2.1 million decrease due to the impact of Hurricane Katrina

Consolidated Financial Results – Fiscal 2006 1Q

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Consolidated Financial Results – Fiscal 2006 1Q

Weather Adjusted for WNA Jurisdictions Weather Adjusted for WNA Jurisdictions For the first quarter of fiscal 2006, weather was 7 percent warmer than normal, and 7 percent colder than the same period last year, as adjusted for jurisdictions with weather-normalized operations

At December 31, 2005, we had WNA in the following service areas for the following periods as noted, which covered approximately 1.0 million of our meters in service:

Tennessee November – AprilGeorgia October – MayMississippi November – April*Kentucky November – AprilKansas October – MayAmarillo, TX October – MayWest Texas October – MayLubbock, TX October – MayVirginia January – December

*Effective in fiscal 2006, WNA period was 11/1 – 4/30. Prior to October 1, 2005, WNA period was 11/15 – 5/15.

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Utility Margin SensitivityUtility Margin Sensitivity

36%51%

13%

2003–2004 Heating Season

Weather Normalized

Weather-Sensitive Margin

Nonweather-Sensitive Margin

Consolidated Financial Results – Fiscal 2006 1Q

48%35%

17%

2004–2006EHeating Season

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6%

4%

2% 3%

7%5%

17%

3%

1% 1%0 0

7%

(20)

(10)

0

10MS CO / K

SMid-States

Kentucky

W. Texas

Louisiana

Mid-TexConsolidated

Actual / Normal Adjusted for WNA

Weather Effect by Utility DivisionWeather Effect by Utility Division

Perc

ent (

War

mer

) Col

der t

han

Nor

mal

Consolidated Financial Results – Fiscal 2006 1Q

• Gross profit in the quarter was adversely affected by $8.0 million due to weather that was 7% warmer than normal, as adjusted for jurisdictions with weather normalized rates

• Louisiana and Mid-Tex Divisions do not have weather normalized rates, and experienced warmer than normal weather of 5% and 17%, respectively

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($.16)

($.12)

($.09)

($.05)

($0.16)

($0.14)

($0.12)

($0.10)

($0.08)

($0.06)

($0.04)

($0.02)

$0.005% 10% 15% 20%

MidMid--Tex Division Estimated Annual Earnings Impact of Tex Division Estimated Annual Earnings Impact of Warmer Than Normal Weather*Warmer Than Normal Weather*

Percent Warmer than Normal

EPS

Impa

ctConsolidated Financial Results – Fiscal 2006 1Q

*Reflects changes in gross profit and related changes in bad debt and state and federal taxes

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$0.79

$0.57

$0.88

1,056988

1,240

$0.20

$0.40

$0.60

$0.80

$1.00

1Q 2004 1Q 2005 1Q 2006500

750

1,000

1,250

1,500

1,750

EPS Degree Days*

Consolidated Financial Results – Fiscal 2006 1Q

Relationship of Diluted EPS to Heating Degree Days* Relationship of Diluted EPS to Heating Degree Days*

*Adjusted for WNA

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Drivers Drivers $24.5 million increase in gross profit (continued)

$2.2 million increase in pipeline and storage gross profit primarily due to 16.8 Bcf of increased transportation volumes largely at Atmos Pipeline – Texas, coupled with higher transportation services margins

$0.5 million decrease in natural gas marketing gross profit primarily due to

o $36.3 million decrease in unrealized mark-to-market gains on storage margins, primarily due to unfavorable movement in the prices used to mark physical storage inventory, coupled with an increase in storage inventory of 6.4 Bcf quarter-over-quarter

o $21.5 million increase in realized storage contribution primarily due to favorable arbitrage spreads as a result of increased market volatility

o $18.2 million increase in realized natural gas marketing margins primarily due to increased volumes sold of 11.2 Bcf quarter-over-quarter and capturing margins in certain market areas that experienced increased volatility

o $3.9 million decrease in unrealized marketing margins

Consolidated Financial Results – Fiscal 2006 1Q

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Consolidated Financial Results – Fiscal 2006 1Q

Natural Gas Marketing Segment 2005 2004 Change

Storage Activities Realized margin $26,272 $4,776 $21,496

Unrealized margin (23,792) 12,519 (36,311)Total Storage Activities 2,480 17,295 (14,815)

Marketing Activities Realized margin 29,567 11,414 18,153

Unrealized margin (5,728) (1,865) (3,863)Total Marketing Activities 23,839 9,549 14,290

GROSS PROFIT $26,319 $26,844 ($525)

Net physical position (Bcf) 12.8 6.4 6.4

Three Months Ended December 31

(In thousands, except storage balances)

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Consolidated Financial Results- Fiscal 2006 1Q

Fair Value of Contracts at December 31, 2005 Maturity in Years Source of Fair Value

< 1

1 - 3

4 - 5

> 5

Total FairValue

(In thousands) Prices actively quoted $ (14,784) $(10,449) $ — $ — $ (25,233) Prices provided by other external sources

4,323

388

— —

4,711

Prices based on models &

other valuation methods

(93)

(480)

— —

(573) Total Fair Value $ (10,554) $(10,541) $ — $ — $ (21,095)

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Consolidated Financial Results – Fiscal 2006 1Q

DriversDriversDecreased O&M expenses of $2.6 million primarily due to

$6.8 million decrease in contract labor due to lower 3rd party charges for outsourcing$3.9 million net increase in labor and benefits$2.1 million decrease due to absence of UCG acquisition-related M&I costs which became fully amortized in December 2004$2.0 million increase in Hurricane Katrina related losses$1.2 million increase in provision for doubtful accounts primarily due to increased collection risk associated with higher gas prices

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1.86

0.0

0.83

0.29

0.58 0.61

0.0

0.5

1.0

1.5

2.0

2001 2002 2003 2004 2005 20061Q

Perc

ent

Utility Bad Debt Expense as a Percent of RevenuesUtility Bad Debt Expense as a Percent of Revenues

Consolidated Financial Results – Fiscal 2006 1Q

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DriversDriversIncreased taxes, other than income, of $6.7 million

Primarily due to increased franchise fees and state gross receipts taxes resulting from higher revenues

Increased interest charges of $3.7 million $4.9 million increase primarily due to higher short-term debt balances used for natural gas purchases made at significantly higher prices coupled with an increase in the 3-month LIBOR rate, partially offset by $1.2 million decrease in interest charges from the early payoff of $72.5 million of First Mortgage Bonds in June 2005

Consolidated Financial Results – Fiscal 2006 1Q

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Pension, Post Retirement & Other Benefits ExpensePension, Post Retirement & Other Benefits Expense

(in in millions))

1.2

3.2

4.3

2.4

2.2

3.4

4.8

2.2

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

1Q 2005 1Q 2006

OtherMedical & DentalPost retirementPension

$12.6

Consolidated Financial Results – Fiscal 2006 1Q

$11.1

2006 Pension Assumptions8.50% return on plan assets5.00% discount rate4.00% wage increase

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19.2

46.7

19.2

53.2

$0

$25

$50

$75

$100

2005 1Q 2006 1Q MaintenanceGrowth

Utility CAPEX(in millions)

Nonutility CAPEX (in millions)

Fiscal 2006 1Q ExpendituresMaintenance Capital: $67.9 millionGrowth Capital: $34.6 million

$72.4

Consolidated Financial Results – Fiscal 2006 1Q

Capital ExpendituresCapital Expenditures

$65.9

15.4

14.7

$0

$10

$20

$30

$40

2005 1Q 2006 1Q

$30.1

$1.3

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Rate Stabilization Results Rate Stabilization Results -- MississippiMississippiOctober 3, 2005, Mississippi Public Utilities Staff reached an agreement with the Mississippi Division of Atmos Energy, requiring an up-front rate reduction of $600,000 effective October 1, 2005 and the following revisions:Annual filings to be made, effective November 1 each year, beginning September 5, 2006New earnings sharing mechanism established

50/50 sharing of all earnings above allowed ROE for the first year Thereafter Atmos allowed to retain up to 250 additional basis points above ROE

Calculated ROE plus a performance adjuster of up to 50 basis points (currently 9.8%)Shifts $10 million in annual margins from volumetric to customer chargeRevised WNA to include approximately 4% of additional heating degree daysReduces regulatory lag, adjusts for forward-looking known and measurable expenses and utilizes an average expected rate base Changes affect approximately 251,000 customers

Highlights – Fiscal 2006 1Q

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September 2005, Mid-Tex Division 2004 GRIP filing of $6.7 million related to return and capital-related expenses on $29 million increase in net investment during calendar 2004• Approved by the Texas Railroad Commission in January 2006• Implementation of new charges in February 2006

September 2005, Atmos Pipeline-Texas 2004 GRIP filing of $1.9 million revenue increase related to return and capital-related expenses on $10.6 million in net investment during calendar 2004• Approved by the Texas Railroad Commission in December 2005• Implementation of new charges in January 2006

September 2005, West Texas Division 2004 GRIP filing for $3.8 million on increase in net investment of $22.6 million• Implementation of new charges in January 2006, except for the inside city

limits customers in the West Texas service area who rejected the filings. Filed appeal with the RRC which is still pending; expect approval in March 2006

Highlights – Fiscal 2006 1Q

GRIP Filings GRIP Filings –– State of TexasState of Texas

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November 30, 2005, Atmos entered into agreement with Energy Transfer Partners, L.P., to jointly construct, own and operate a 45-mile, 30-inch pipeline in northern part of DFW Metroplex Energy Transfer will provide initial capital to build the pipelineApproximately 21 miles of pipeline was placed into service in December 2005; anticipate remainder of pipeline to be placed into service by March 31, 2006

Total of $19.2 million spent through December 31, 2005$1.6 million spent in fiscal 2005; $17.6 million spent YTD in fiscal 2006, and $29.7 million additional expenditure expected for the remainder of fiscal 2006

Designed to meet present and future operational needs as a result of utility customer growth on the northern end of the Mid-Tex distribution system

Energy Transfer Partners AgreementEnergy Transfer Partners AgreementHighlights – Fiscal 2006 1Q

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Credit FacilitiesCredit FacilitiesOctober 18, 2005, Atmos Energy entered into a $600 million, 3 -year committed revolving credit facility through October 18, 2008

Replaces $600 million, 364-day working capital facility on essentially the same termsServes as a backup liquidity facility for our commercial paper program

November 10, 2005, Atmos Energy entered into a new $300 million 364-day committed revolving credit facility

Supplements amounts available under existing $18 million committed credit facility and $25 million uncommitted credit facility under essentially the same terms as the $600 million 3-year committed revolving credit facility

November 28, 2005, Atmos Energy Marketing (AEM) amended its $250 million uncommitted credit facility to a maximum of $580 million

Expires March 31, 2006Contains essentially same terms as previous credit facility

Highlights – Fiscal 2006 1Q

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Moody’s RatingSenior Unsecured Debt: Baa3Commercial Paper: P-3Outlook: stable

Standard & Poor’sSenior Unsecured Debt: BBBCommercial Paper: A-2Outlook: stable

FitchSenior Unsecured Debt: BBB+Commercial Paper: F-2Outlook: stable*

Investment Grade Credit RatingsInvestment Grade Credit RatingsHighlights – Fiscal 2006 1Q

* On January 13, 2006, Fitch upgraded outlook from “negative” to “stable”

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On February 7, 2006, the Atmos Board of Directors declared a quarterly dividend of $0.315 per share

89th consecutive dividend declared

To be paid on March 10, 2006, to shareholders of record on February 27, 2006

Indicated annual dividend of $1.26 per share

Quarterly DividendQuarterly DividendHighlights – Fiscal 2006 1Q

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$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

'84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06

Note: Amounts are adjusted for mergers and acquisitions. For fiscal 2006, $1.26 is the indicated annual dividend.

$1.26

Annual Dividend Growth Annual Dividend Growth -- 1984 to 2006E1984 to 2006E

Consolidated Financial Results – Fiscal 2006E

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Atmos Energy anticipates earnings to be in the range of $1.80 - $1.90 per fully diluted share for the 2006 fiscal year

Updated assumptions include:• 30-year normal weather from February to September 2006• Adverse impact of Hurricane Katrina on margin of between $10 million and

$12 million• Greater contribution from nonutility businesses due to higher gas price

volatilityo Expect gross margin contribution from the marketing segment at the revised

range of between $80 million to $90 million• Continued execution of rate strategy and collections efforts• Bad debt expense of no more than $20 million• Average short-term interest rate @ 4.5 % • No material acquisitions

Capital expenditures are expected to be between $400 million and $415 million

Earnings Guidance Earnings Guidance –– 2006 Fiscal Year2006 Fiscal YearConsolidated Financial Results – Fiscal 2006E

Note: Changes in these events or other circumstances that the company cannot currently anticipate could materially impact earnings, and could result in earnings for fiscal 2006 significantly above or below this outlook.

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56334768

140

603559

82

158

724264

87

205

86

5265

97

215

136

82

133

178

428

148-156

90-95

137-138

192-198

443-450

0

200

400

600

800

1000

1200

20012002

20032004

20052006E

Selected Income Statement ComponentsSelected Income Statement Components($ in millions)

D & A $192 - $198Interest $137 - $138Income Tax $90 - $95Net Income $148 - $156

O & M $443 - $450

2006E Consolidated($ millions)

Consolidated Financial Results – Fiscal 2006E

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90

211

90-94

183-189

$0

$50

$100

$150

$200

$250

$300

$350

2005 2006E MaintenanceGrowth

Estimated Capital Expenditures Estimated Capital Expenditures –– 2006 Fiscal Year2006 Fiscal Year

Utility CAPEX(in millions)

2 30

90-93

37-39

$0$20$40

$60$80

$100

$120$140

2005 2006E

Nonutility CAPEX (in millions)

Consolidated fiscal 2006 CAPEX projection is $400-$415 million

$301 $273-$283 $127-$132

$32

Consolidated Financial Results – Fiscal 2006E

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For the 2005-2006 heating season, Atmos Energy is hedging approximately 46 percent of its expected winter gas utility supply requirements

22 percent are naturally hedged through a combination of owned underground storage assets and contract pipeline storage 24 percent is hedged through the use of financial derivatives (primarily futures and fixed forward contracts)

We project the weighted-average cost for storage gas and financial contracts to be approximately $9.11 per Mcf. This compares to a weighted-average cost of approximately $6.23 per Mcf for the prior-year heating season

Hedging provides relative protection to the company and its customers against volatility in gas prices

Customers will pay a blended rate for gas costsAtmos Energy should be able to reduce the effects of higher gas prices on its customer receivables and working capital requirements

Minimizing Volatility Through Gas Supply HedgingMinimizing Volatility Through Gas Supply Hedging

Consolidated Financial Results – Fiscal 2006E

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Pension, Post Retirement & Other Benefits ExpensePension, Post Retirement & Other Benefits Expense

(in millions)in millions)

4.7

12.8

16.8

10.0

9.6

13.4

22.2

6.7

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

2005 2006E

OtherMedical & DentalPost retirementPension

$51.9

Consolidated Financial Results – Fiscal 2006E

$44.3

2006 Pension Assumptions8.50% return on plan assets5.00% discount rate4.00% wage increase

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Consolidated Financial ResultsFiscal 2006 1Q

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Consolidated Income Statements –Fiscal 2006 1Q

Three Months Ended December 31(000s except EPS) 2005 2004

Operating Revenues:Utility Segment 1,405,010$ 913,681$ Natural Gas Marketing Segment 1,101,845 493,801 Pipeline and Storage Segment 39,712 43,690 Other Nonutility Segment 1,492 1,359 Intersegment Eliminations (264,239) (83,907)

2,283,820 1,368,624 Purchased Gas Cost:

Utility Segment 1,124,829 656,370 Natural Gas Marketing Segment 1,075,526 466,957 Pipeline and Storage Segment - 6,221 Other Nonutility Segment - - Intersegment Eliminations (263,125) (83,027)

1,937,230 1,046,521 Gross Profit 346,590 322,103

Operation and Maintenance Expense 108,217 110,777 Depreciation and Amortization 43,260 43,997 Taxes, other than income 45,416 38,655 Miscellaneous Income 448 385 Interest Charges 36,189 32,542 Income Before Income Taxes 113,956 96,517 Income Tax Expense 42,929 36,918 Net Income 71,027$ 59,599$ Net Income Per Share: Basic 0.88$ 0.79$ Diluted 0.88$ 0.79$ Average Shares Outstanding: Basic 80,259 75,306 Diluted 80,722 75,725

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Utility Operating Income –By Division - Fiscal 2006 1Q

Three Months Ended December 312005 2004

Utility Operating Income Colorado-Kansas Division 8,610$ 8,235$ Kentucky Division 6,192 5,845 Louisiana Division 7,891 6,333 Mid-States Division 14,298 11,138 Mid-Tex Division 50,787 38,548 Mississippi Division 9,993 8,607 West Texas Division 6,131 5,786 Other 2,347 595 Total Utility Operating Income 106,249$ 85,087$

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Utility Volumes - Fiscal 2006 1Q

Three Months Ended December 312005 2004 Change % Change

Sales Volumes (MMcf) Residential 53,709 50,769 2,940 6% Commercial 29,139 27,863 1,276 5% Public authority and other 3,291 4,016 (725) (18%) Industrial 9,009 8,243 766 9% Irrigation 40 66 (26) (39%) Total 95,188 90,957 4,231 5%Transportation (MMcf) 30,602 27,978 2,624 9% Total Consolidated Utility Volumes (MMcf) 125,790 118,935 6,855 6%

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Cash Flow Statements - Fiscal 2006 1Q

2005 2004(000s)

Net income 71,027$ 59,599$ Depreciation and amortization 43,407 44,251 Deferred income taxes 20,448 8,308 Other 3,680 977 Net change in operating assets and liabilities (333,931) (45,231)

Operating cash flow (195,369) 67,904

Acquisitions - (1,912,532) Capital expenditures - growth (34,573) (19,230) Capital expenditures - non-growth (67,892) (47,971) Other, net (1,121) (1,051)

Operating cash flow after investing activities (298,955) (1,912,880)

Repayment of long-term debt (1,695) (3,373) Settlement of Treasury lock agreements - (43,770) Dividends paid (25,429) (24,521)

Cash flow after acquisitions and growth capital (326,079)$ (1,984,544)$

Quarter Ended December 31

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Capitalization - Fiscal 2006 1Q

(000s)

Short-term debt 474,059$ 11.0% 28,797$ 0.7%

Long-term debt 2,184,783 50.9% 2,261,070 59.1%

Shareholders' equity 1,637,617 38.1% 1,539,078 40.2%

Total capitalization 4,296,459$ 100.0% 3,828,945$ 100.0%

As of December 312005 2004

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As a Reminder…

The audio and slide presentation of this conference call will be available on Atmos Energy’s Web site by 8:00 a.m. Eastern Standard Time on February 8, 2006, through midnight on May 5, 2006. Atmos Energy’s Web site address is: www.atmosenergy.com.

To listen to the live conference call, dial 800-218-0204 by 8:00 a.m. Eastern Standard Time on February 8, 2006.

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Appendix

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Atmos Energy Marketing - Storage

We commercially manage our storage assets by capturing arbitrage value through optimization strategies that create embedded (forward) value in the portfolio. We financially report the transactions for external reporting purposes in accordance with GAAP.

GAAP Reported Value is the period to period net change in fair value of the portfolio reported in the income statement that results from the process of marking to market the physical storage volumes and corresponding financial instruments in an interim period.

Economic Value is the period to period forward margin of our storage portfolio that results from the process of calculating our weighted average cost of inventory (WACOG), and our weighted average sales price of our forward financials (WASP), then multiplying the difference times inventory volumes. This margin will be realized in cash when the hedged transaction is executed or when financials are settled and then reset to stay hedged against physical volumes.

Economic Value represents the “forward” economic margin of the transactions, while GAAP reported results reflect that portion of our “forward” margin that has been recorded in the income statement. Volatility in earnings includes the impact of the accounting treatment of our storage portfolio and is reflective of relatively high price volatility of the prompt month, and the relatively low volatility of the offsetting forward months.

Economic Value vs. GAAP Reported ResultsEconomic Value vs. GAAP Reported Results

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Economic Value vs. GAAP Reported ResultsEconomic Value vs. GAAP Reported Results

Atmos Energy Marketing

Reported GAAPValue

- Physical and FinancialPositions

($38.6 MM)

Reported GAAPValue

- Physical and FinancialPositions

($38.6 MM)

Economic Value*(Commercial Value)

- Physical and FinancialPositions

$7.1 MM

Market Spread

Embedded margindifference

$45.7 MM*Realizing Economic Value is dependent on ability toexecute – deliver physical gas & close financial hedges

Support data appears onthe following slideAt December 31, 2005

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Physical Period Volume Total Total TotalEnding (Bcf) WASP WACOG EV ($ in millions) ($ per mmbtu) ($ in millions) ($ per mmbtu) ($ in millions)

9/30/2004 5.4 7.9121 5.6406 2.2715 12.3 (0.1394) (0.8) 2.4109 13.0

12/31/2004 6.4 8.3569 6.3385 2.0184 12.9 1.8401 11.8 0.1783 1.0

9/30/2005 6.9 6.3466 4.4435 1.9031 13.1 (2.1502) (14.8) 4.0533 27.9

12/30/2005 12.8 9.3918 8.8366 0.5552 7.1 (3.0094) (38.6) 3.5646 45.7

($ per mmbtu)Economic Value (EV) Market SpreadGAAP Reported Value - MTM

Economic Value vs. GAAP Reported ResultsEconomic Value vs. GAAP Reported Results

Atmos Energy Marketing

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$15.0 million----

$13.7 million$1.3 millionKaty Capacity

Expansion/ Compression

----------------Devon Line/

Corridor Compression

$15.2 million

---

$15.2 million

2005

GRIP Filings *

$6.9 million

$4.0 million

$1.6 million

Actual2005

CAPEX

$78.8 million

$17.8 million

$47.3 million

Estimated 2006

$70.5 million

$21.8 million

$33.7 million

2006 Northside Loop JV with Energy

Transfer

Total:

Enbridge Line/Corridor Compression

Project

Project Update Project Update

Estimated total annual revenues are $15.0 million; of which $6.7 million are expected to occur in fiscal 2006.* Capital expenditures on a calendar year basis are included in GRIP filings when the asset is operational

Atmos Pipeline - Texas

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Atmos Pipeline - Texas

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Project Map

North SideLoop

EnbridgeCompression

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Metropolitan New Orleans AreaTLGP Transmission / TLGP Sales Points

Metropolitan New Orleans AreaTLGP Transmission / TLGP Sales Points

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October 26, 2001

TLGP 24”

Bridgeline Gas(Paradis)

S39,T14S,R20E

Bridgeline Gas(Paradis)

S39,T14S,R20EFuture Interconnect

Columbia GulfFuture Interconnect

Columbia Gulf

B’line 14”

Acadian Gas PipelineS48,T13S,R21E

Acadian Gas PipelineS48,T13S,R21E

Gulf South PipelineS48,T13S,R21E

Gulf South PipelineS48,T13S,R21E

TLGP 16”

AEL 18”

Entergy Louisiana(TLGP Sales)S5,T13S,R20E

Entergy Louisiana(TLGP Sales)S5,T13S,R20E

Atmos Energy LouisianaS5,T13S,R23E

Atmos Energy LouisianaS5,T13S,R23E

S24,T13S,R23E

21 Miles of 24” TLGP Pipe.95 Miles of 12” TLGP Pipe

Storage is held on upstream pipelines

• Bridgeline

• Acadian

• Gulf South

TLGP PipelineTLGP Pipeline

Trans Louisiana Gas Pipeline