atmos enerrgy lehman090208

Lehman Brothers Energy & Power Conference

Robert W. BestChairman, President & CEO

September 2, 2008

2

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 our other documents or oral presentations, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “objective,” “plan,”“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 risks relating to regulatory trends and decisions, our ability to continue to access the capital markets, and the other factors discussed in our filings with the Securities and Exchange Commission. These factors include the risks and uncertainties discussed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2007 and in our Quarterly Report on Form 10-Q for the three and nine months ended June 30, 2008. Although we believe 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. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Further, we will only update earnings guidance through our quarterly and annual earnings releases. All estimated financial metrics for fiscal year 2008 and beyond that appear in this presentation are current as of the date noted on each relevant slide.

3

OverviewThe Nation’s Largest Pure Gas Distribution CompanyRegulated gas distribution operates in 12 states (gold)Nonregulated operates primarily in the Midwest & Southeast (gray)

4

1.16

0.42

1.38

0.34

0.98

0.84

1.23

0.69

1.53-1.59

0.42-0.46

$0.00

$0.30

$0.60

$0.90

$1.20

$1.50

$1.80

$2.10

2004 2005 2006 2007 2008E

NonregulatedOperationsRegulatedOperations

Diluted Earnings Per Share Contribution Shows Steady Growth

Overview

$1.82$1.72

$1.92$1.95-$2.05

$1.58

CAGR 6.1%

As of August 5, 2008

5

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

'84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08

Note: Amounts are adjusted for mergers and acquisitions. For fiscal 2008, $1.30 is the indicated annual dividend.

$1.30E

OverviewAnnual Dividend Remains Steady

6

Overview

16.4%

14.5%

15.5%

12.7%13.1%

14.4%

10.0%

12.0%

14.0%

16.0%

18.0%

2003 2004 2005 2006 2007 5 Yr Avg

2.552.75

3.05

2.59 2.552.75

3.00

1.5

2.0

2.5

3.0

3.5

2002 2003 2004 2005 2006 2007 2008E

7.4%

6.9%

6.4%6.0%

5.6%5.9%

6.1% 6.1%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2001 2002 2003 2004 2005 2006 2007 2008E

51.5%53.7%

60.9%59.3%

43.3%

53.6%

40

45

50

55

60

65

2003 2004 2005 2006 2007 Jun-08

ROIC - Return on invested capital is calculated using the following GAAP financial measures: Income before interest expense and income taxes plus common stock dividends paid, divided by the average of the year’s beginning and ending long-term debt plus common equity. This measure is used to more precisely evaluate operational performance and management effectiveness.

The times interest earned ratio measures the ability to satisfy annual interest costs.

As of December 2007

Return on Invested Capital (ROIC) Times Interest Earned Ratios

Weighted Average Cost of Debt Debt Capitalization Ratio

Financial Metrics Continue to Improve1 2

3

(1) (2) (3)

(1)

(2)

7

Investment Grade Credit Ratings Allow Financial Flexibility

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

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

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

Overview

8

Atmos Energy Holdings, Inc.(Nonregulated Operations)


Atmos Energy Marketing• Marketing• Asset Optimization


Atmos Pipeline, Storageand Other

• Non-Texas Assets (Storage & Pipeline)• Midstream• Other

Atmos Pipeline, Storageand Other


Kentucky/Mid-StatesKentucky/Mid-States

Atmos Energy Corporation(Regulated Operations)

Gas Distribution DivisionsTransmission & Storage



West TexasWest Texas

Colorado-KansasColorado-Kansas

LouisianaLouisiana

Mid-Tex Mid-Tex

MississippiMississippi

Atmos Pipeline -TexasAtmos Pipeline -Texas

Regulated Operations

9

Profit Drivers in the Distribution Business

Customer and meter growth

Growing rate base

Managing costs

Executing our rate strategy

Regulated Gas Distribution Operates in 12 States (gold)

Regulated Natural Gas Distribution

10

Successfully Executing on the Rate Strategy


GRIP/

Partial means applicable within certain jurisdictions within the category.Excludes Colorado, Iowa and Illinois for a total of 137,657 customers.Includes Missouri, Kansas and Georgia for a total of 258,102 customers.Includes Missouri for a total of 59,672 customers.Includes Amarillo for a total of 69,772 customers.Includes Kansas and Virginia for a total of 151,545 customers.Includes Mid-Tex Division customers residing in cities covered by settlement agreements. Includes Mid-Tex Division for a total of 1,500,000 customers.

Number of Customers

Percentage of Total

Purchased Gas Cost Adjustments WNA

Accelerated Capital Recovery

Decoupling/ Rate Stabilization

Gas Cost Bad Debt Recovery

Texas 1,800,000 57% Partial

Louisiana 350,000 11%

Mississippi 270,000 8%Remaining Jurisdictions 770,000 24% PartialPartialPartial 2 3

4,7

51

1

2

3

4

5

6

6Partial

7

11

10.0%Authorized Return on Equity (ROE)9.6%

Effective 7/1/08Capital Structure 52% Debt; 48% EquityEffective 10/1/08

__$33.5 Million RRM FilingPending;

Effective 10/1/08

Effective 11/08 (est.)$10.3 Million GRIP Filing RecoveryIncluded in RRM filing

Effective 7/1/08Gas Cost Recovery of Bad DebtEffective 10/1/08

$1 Million Conservation Program

$19.6 Million Rate Increase

$10 Million Rate Increase

Systemwide Increase in Revenues

100%

Effective 10/1/08

__

Effective 4/1/08

Settlement(438 of 439 Cities)

~80%

Effective 10/1/08

__

Effective 7/8/08

RRC Order(City of Dallas & Environs)

~20%

Mid-Tex Division 2008 Rate Outcome Summary

12

15.8

2.8

10.5

5.7

4.51.8

3.3

34.3

1.4

11.6

25.6

2.9

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

2003 2004 2005 2006 2007 2008-2012E

Annual Mechanism GRIP General Rate Case Aggregate

($ M

illio

ns)

Approved Annual Rate Increases in the Regulated Operations

$6.3

$50 - $60

$39.0

Regulated Operations

$40.1

$18.6$16.2


13

Favorably positioned; spans Texas gas supply basins and growing consumer market

Pipeline Operations• Connects to major market hubs-

Waha, Katy and Carthage• 6,300 miles of intrastate pipeline• Estimated transportation volume of

780 Bcf in fiscal 2008• Current average volume of

approximately 2.0 Bcf/d• Demonstrated peak day deliveries

of 3.5 Bcf/d

Five Storage Facilities• One salt cavern, four reservoirs• 39 Bcf working gas capacity• 1.2 Bcf/d maximum withdrawal• 270 MMcf/d maximum injection

West Texas Division

Mid-Tex Division

Atmos Pipeline-TexasAtmos Energy Headquarters

Strategically Positioned Atmos Pipeline –Texas

Regulated Transmission and Storage

14

Growth Drivers Growth Drivers Pursue capacity and compression growth opportunities

Increased through-system volumes primarily from producers in Barnett Shale

Margin expansion through ancillary services such as parking and lending, balancing, blending, and compression

Gas price volatility increasing basis differentials between Texas hubs

Regulated Transmission and StorageAtmos Pipeline – Texas Growth Drivers

Tran

spor

tatio

n Vo

lum

es(B

cf)

78

60

77

64

85

78

95-97

93-97

0

25

50

75

100

125

150

175

200

2005 2006 2007 2008E

Tariff Based Market Based

Mar

gin

Com

posi

tion

($m

illio

ns)

181

374

170

411

194

505

1188-195

587-590

0

150

300

450

600

750

2005 2006 2007 2008E

Mid-Tex Division Third Party

555 581

699775-785

138 141163

188-194


15

Regulated Transmission and Storage

Barnett Shale

Cotton Valley

Bossier

Sands

Permian

Location of gassupply basins

16





Atmos Pipeline, Storage and Other


Atmos Pipeline, Storage and Other


Nonregulated Operations

Kentucky/Mid-StatesKentucky/Mid-States





West TexasWest Texas

Colorado-KansasColorado-Kansas

LouisianaLouisiana

Mid-TexMid-Tex

MississippiMississippi

Atmos Pipeline -TexasAtmos Pipeline -Texas

Organization Structure

17

Atmos Energy Marketing Customers (gray states)

About 1,100 customers

Target market is Atmos Energy’s natural gas distribution footprint

Focus on areas where we manage, lease or own storage and transportation assets

Regional offices allow for more direct customer access


18

Delivered Gas

(Bundled gas deliveries &peaking sales)

Delivered Gas

(Bundled gas deliveries &peaking sales)

Asset Optimization

(Storage & transportationmanagement)

Asset Optimization

(Storage & transportationmanagement)

Total AEMMarginsTotal AEMMargins

Impacted by customer volume demand Sales prices are:

• Cost plus profit margin• Cost plus demand charges

Margins: More predictable

Impacted by gas price spread values in the market (arbitrage opportunity)Physical storage capabilitiesAvailable storage and transport capacity

7.8 Bcf proprietary contracted capacity27 Bcf customer-owned / AEM- managedstorage

Margins: More variable

Total margins reflect:Stability from delivered gas margins Upside from optimizing our storage and transportation assets to capture arbitrage value

Margins: Stable with potential upside

2008E

$65 - $70 Million

$10 - $15 Million

$75 - $85 Million

=

Atmos Energy Marketing – Margin Composition



19

Key Growth DriversKey Growth Drivers

Retain existing customersSaturate existing markets Expand into targeted growth markets (Texas, Alabama, etc.)Expand asset management businessUnit margin expansion from premium value-added services provided to customersAccess to storage assetsGas price volatility

Gro

ss S

ales

Vol

umes

BC

F

265 273337

424450-485

0

100

200

300

400

500

2004 2005 2006 2007 2008E

0.230.25

0.31

0.15 0.14-0.15

0.00

0.10

0.20

0.30

2004 2005 2006 2007 2008E

Del

iver

ed G

as U

nit M

argi

ns(c

ents

per

Mcf

)

Delivered Gas Volumes Continue Growth Trend



20

60.0

28.0

(26.0)

87.2

26.2

17.2

57.1

28.8

18.4

65.0-70.0

10.0-15.0

(30.0)

(10.0)

10.0

30.0

50.0

70.0

90.0

110.0

130.0

150.0

2005 2006 2007 2008E

Delivered Gas Asset Optimization Unrealized Margins

($ m

illio

ns)


62.0

130.6

104.3

75.0-85.0

Delivered Gas Margins have remained fairly constant at about $60 million, with the exception of Fiscal 2006 due to effects of Hurricane Katrina

Asset Optimization Margins remained fairly constant between $25 million - $30 million annually until fiscal 2008 when the effects of dampened market volatility can be seen

Fiscal 2008 marketing segment margins are expected to be between $75 million and $85 million, excluding any mark-to-market impact

Mark-to-market accounting impact is recognized in Unrealized Margins. An example of the accounting can be found in the appendix to this presentation

Delivered Gas and Asset Optimization MarginsNonregulated Atmos Energy Marketing


21

Initial project includes development of three 5 Bcf caverns with six-turn injection and withdrawal capabilities

Storage facility adjacent to large interstate pipelines

Pending FERC approval, first cavern projected to be operational in 2011; the other two caverns operational by 2012 and 2014

Depending on market demand, four additional storage caverns could potentially be developed

Successful non-binding open season completed in July 2008

Ft. Necessity Gas Storage Project in Louisiana


Salt Storage ProjectFranklin Parish, LA

Legend of Nearby Pipelines

Regency ANR

LIG CGT

TGT TGP

TLGFort Necessity

Salt Dome

22

Atmos Energy continues to expect earnings to be in range of $1.95 - $2.05 per diluted share for the 2008 fiscal yearAssumptions include:

Contribution from natural gas marketing segment reflecting significantly less volatility in gas price spreads

o Total expected gross margin contribution from the marketing segment in the range of $75 million to $85 million, excluding any material mark-to-market impact at September 30, 2008

Continued successful execution of rate strategy and collection effortsBad debt expense of no more than $15 millionAverage annual short-term interest rate of 6.5%

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 2008 significantly above or below this outlook.

Consolidated Earnings Guidance – Fiscal 2008E

Financial Review


23

Natural Gas DistributionRegulated Trans & Storage Natural Gas MarketingPipeline, Storage & OtherTotalAvg. Diluted SharesEarnings Per Share

2006$ 53

275810

14881.4

$ 1.82

$ 95 - 99 43 - 4427 - 30 11 - 12

176 - 18590.1

$1.95 - $2.05

2008E2007$ 73

344615

16887.7

$ 1.92

2005$ 81

2823

413679.0

$ 1.72

($ millions, except EPS)

Projected Net Income by Segment

Financial Review


24

99.1

228.3

80-83

285- 288

$0$50

$100$150$200$250$300$350$400

2007 2008E

RegulatedGas Distribution

RegulatedTransmission & Storage

$365-$371

Capital Expenditures

$327.4

2.1

57.2

10-11

61-62

$0

$25

$50

$75

$100

2007 2008E

$71-73

4.61.1

15-16

4-5

$0

$5

$10

$15

$20

$25

2007 2008E

Nonregulated

$59.3

$5.7

Financial Review

Consolidated fiscal 2008 CAPEX projection is $455-$465 million

($ millions)

$19-21

Growth Capital

Maintenance Capital


25

Financial Review

14.3x14.9x

13.1x

11.0

12.0

13.0

14.0

15.0

16.0

S&P 500 Peer GroupAvg.

Compelling Valuation and Total Return Proposition

5.1

3.9

4.7

4.9 12.1

2.1

3.0

6.0

9.0

12.0

15.0

Peer GroupAvg.

S&P 500

5 year growth rate dividend yield

Forward P/E Estimates 5 Year Expected Total Return

Companies in the peer group include AGL Resources, Laclede, New Jersey Resources, Nisource, Northwest Natural Gas, Oneok, Piedmont Natural Gas, Southwest Gas and WGL Holdings.

Source: Bloomberg @ 8/26/08Peer group averages exclude Atmos

9.0% 9.6%

14.2%

Atmos EnergyAtmos

Energy

26

Summary

Company Profile

The nation’s largest pure-gas distribution companySolid financial foundationTrack record of creating shareholder value• Consistent earnings growth• 24 consecutive years of increasing dividends

Focused strategy over time• Grow through prudent acquisitions• Maximize core regulated earnings capability• Complement core regulated businesses through select

nonregulated operations

27

SlideAppendix

28

Mid-Tex – rate case completed• Settlement agreement reached with all major parties in January and February 2008, except City of

Dallas and environs customers• Final order issued by the Texas Railroad Commission in June 2008 applicable to the City of Dallas

and environs• Details included on slides located in the presentation appendix

Louisiana – annual rate stabilization filings complete• Approved $1.7 million increase in June 2008 for LGS jurisdiction (about 265,000 customers) effective

immediately• Approved $2.1 million increase for Trans La jurisdiction (about 80,000 customers) effective April, 2008

Kansas – rate case settled• Filed for $5 million in September 2007• Reached $2.1 million “black box” settlement with staff, effective May 2008 (about 124,000 customers)

Georgia – pending rate case• Filed for over $6 million in March 2008, decision expected September 2008 (about 76,000 customers)• Forward-looking filing with test year ending March 30, 2009

Atmos Pipeline - Texas – 2007 GRIP filing for revenue increase of approximately $7.0 million implemented on April 15th

Mid-Tex Division – 2007 GRIP filing on a system-wide basis filed in May 2008 of $10.3 million; anticipate implementation November 2008 of approximately $2.0 million annually for the customers in the City of Dallas and unincorporated areas

Recent Regulatory Activity Aids Margin GrowthRegulated Operations

29

Rate Case Settlement in Mid-Tex DivisionSettlement agreement reached with 438 of 439 cities served in Mid-Tex Division, representing approximately 80% of Mid-Tex customers

Includes initial increase of $10 million on a systemwide basis, implemented in the consumption charge and effective April 1, 2008

Implements Rate Review Mechanism (RRM) effective for a three-year trial period

Reflects annual changes in cost of service and rate base, replaces GRIP filings for the Settlement CitiesLowers base customer charge to $7.00 for residential customers, effective October 1, 2008Two basic components of this mechanism:

o Prospective component adjusts rates for the next year, including known and measurable changes in O&M; and

o True-up component adjusts the prior year, up or down, to the authorized ROE April 14, 2008, made initial RRM filing with the settling cities for $33.5 million on a systemwide basis, with October 1st implementationFuture RRM filings by March 1st, to be effective July 15th

Authorized ROE of 9.6%; capital structure of 52% debt / 48% equityEstablishes a conservation program effective October 1, 2008

Funded annually with $1 million contributions each by the company and customers


30

Rate Case Decision in Mid-Tex Division

June 24, 2008, Railroad Commission of Texas issued final order applicable to approximately 20% of customers

Includes City of Dallas and environs customersThe remaining 80% of Mid-Tex division customers (438 of 439 cities) were entities who reached earlier settlement; therefore not affected by this order

Systemwide annual revenue increase of about $19.6 million; July 8, 2008 implementation; increased residential customer charge to $14Capital structure of 52% debt / 48% equityAuthorized ROE of 10.0%; Allowed Rate of Return of 7.98%Systemwide Rate Base of $1.128 billion; Systemwide Authorized Net Plant of $1.244 billionRecovery of bad debt gas cost through a Gas Cost Recovery (GCR) mechanism beginning October 1, 2008Establishes a conservation & energy efficiency program

Effective October 1, 2008; funded annually with $1 million contributions each by the company and customers

Test year ended June 30, 2007


31

($ in in millions))

(15.7)

6.1

(5.6)

1.8

(12.4)

10.3

(6.3)

1.8

($20.0)($15.0)($10.0)($5.0)$0.0$5.0

$10.0$15.0$20.0

3Q 2007 3Q 2008

Natural gas distribution Regulated transmission & storageNatural gas marketing Pipeline, storage & other

$(6.6)

Consolidated Financial Results – Fiscal 2008 3Q

$(13.4)51%

Key DriversKey DriversRate increases, primarily in TexasIncrease in transportation volumes and fees at the regulated pipelineDecrease in nonregulated natural gas marketing margins, primarily due to decrease in storage and trading activitiesIncrease in O&M expenses, primarily due to higher administrative costs

Net Income by Segment

32

($ in in millions))

92.4

29.140.4

12.5

113.4

35.319.6

10.4

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

YTD 2007 YTD 2008

Natural gas distribution Regulated transmission & storageNatural gas marketing Pipeline, storage & other

$178.7

Consolidated Financial Results – Fiscal YTD

$174.42%

Key DriversKey DriversRate increases, primarily in Texas

Decrease in nonregulated natural gas marketing margins, primarily due to decrease in storage and trading activities

Increase in transportation volumes and fees at the regulated pipeline

Increase in O&M expenses, primarily due to higher administrative costs

Net Income by Segment

33

67.9

154.6

58.6

208.2

$0

$50

$100

$150

$200

$250

$300

YTD 2007 YTD 2008

RegulatedGas Distribution

RegulatedTransmission & Storage

Total Fiscal 2008 YTD Expenditures: $312.9 millionTotal Maintenance Capital: $245.4 millionTotal Growth Capital: $ 67.5 million

$266.8


$222.5

37.1

5.3

35.1

$0

$10

$20

$30

$40

$50

YTD 2007 YTD 2008

$40.4

2.7

0.7 3.6

2.1

$0

$2

$4

$6

$8

YTD 2007 YTD 2008

Nonregulated

$37.1

$3.4

$5.7

Growth Capital

Maintenance Capital

Capital Expenditures

34

Consolidated Financial Results – Fiscal 2008 3Q

Natural Gas Marketing Segment 2008 2007 Change

Delivered gas $11,231 $9,999 $1,232

Asset optimization (37,551) (33,376) (4,175)

Unrealized margin 23,689 22,801 888

GROSS PROFIT ($2,631) ($576) ($2,055)

Net physical position (Bcf) 17.5 21.5 (4.0)

Three Months Ended June 30

(In thousands, except physical position)

Natural Gas Marketing Segment

35


Natural Gas Marketing Segment 2008 2007 Change

Delivered gas $55,599 $44,320 $11,279

Asset optimization (10,339) 38,558 (48,897)

Unrealized margin 14,404 2,733 11,671

GROSS PROFIT $59,664 $85,611 ($25,947)

Net physical position (Bcf) 17.5 21.5 (4.0)

Nine Months Ended June 30

(In thousands, except physical position)

Natural Gas Marketing Segment

36

Nonregulated OperationsAtmos Energy Marketing

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 generally accepted accounting principles (“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 in accordance with GAAP 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 Results

37

Reported GAAPValue

- Physical and FinancialPositions

$34.3 MM

Reported GAAPValue


$34.3 MM

Economic Value*(Commercial Value)


$48.2 MM

Market Spread

*Potential Gross Profit$13.9 MM

* There is no assurance thatthe economic value or the potential gross profit will be fully realized in the future.

At June 30, 2008

Economic Value vs. GAAP Reported Results

Nonregulated OperationsAtmos Energy Marketing

38

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

3/31/2007 19.6 8.2196 7.6701 0.5495 10.8 (1.2347) (24.2) 1.7842 35.06/30/2007 21.5 9.5409 7.6238 1.9171 41.2 (0.3343) (7.2) 2.2514 48.4

2007 Variance 1.9 1.3213$ (0.0463)$ 1.3676$ 30.4$ 0.9004 17.0$ 0.4672$ 13.4$

3/31/2008 20.7 8.6763 8.1555 0.5208 10.8 (0.0296) (0.6) 0.5504 11.46/30/2008 17.5 11.0565 8.3037 2.7528 48.2 1.9616 34.3 0.7912 13.9

2008 Variance (3.2) 2.3802$ 0.1482$ 2.2320$ 37.4$ 1.9912 34.9$ 0.2408$ 2.5$

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

WASP: Weighted average sales price for gas held in storageWACOG: Weighted average cost of AEM’s gas in storageEV: “Economic Value” which equals gas sales price (WASP) minus cost of gas (WACOG) on a per unit basis

Nonregulated OperationsAtmos Energy MarketingEconomic Value vs. GAAP Reported ResultsThree Months Ended

39

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

9/30/2006 14.5 11.9716 7.8329 4.1387 60.0 (1.1076) (16.0) 5.2463 76.06/30/2007 21.5 9.5409 7.6238 1.9171 41.2 (0.3343) (7.2) 2.2514 48.4

2007 Variance 7.0 (2.4307)$ (0.2091)$ (2.2216)$ (18.8)$ 0.7733 8.8$ (2.9949)$ (27.6)$

9/30/2007 12.3 11.1547 7.8297 3.3250 40.8 0.8819 10.8 2.4431 30.06/30/2008 17.5 11.0565 8.3037 2.7528 48.2 1.9616 34.3 0.7912 13.9

2008 Variance 5.2 (0.0982)$ 0.4740$ (0.5722)$ 7.4$ 1.0797 23.5$ (1.6519)$ (16.1)$

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

WASP: Weighted average sales price for gas held in storageWACOG: Weighted average cost of AEM’s gas in storageEV: “Economic Value” which equals gas sales price (WASP) minus cost of gas (WACOG) on a per unit basis

Nonregulated OperationsAtmos Energy MarketingEconomic Value vs. GAAP Reported ResultsNine Months Ended

Economy & Finance

atmos enerrgy lehman090208