atmos enerrgy _analyst-conf100108

Atmos Energy CorporationAnalyst Conference

October 1, 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.

3

Management Participants

Robert W. Best - Chairman & CEO

Kim Cocklin - President and COO

J. Patrick Reddy - Senior VP & CFO

Mark H. Johnson - Senior VP, Nonregulated Operations

Susan Giles - VP, Investor Relations

4

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

5

1.16

0 .4 2

1.3 8

0 .3 4

0 .9 8

0 .8 4

1.2 3

0 .6 9

1.53 -1.59

0 .4 2 -0 .4 6

1.53 -1.59

0 .52 -0 .56

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

2004 2005 2006 2007 2008E 2009E

NonregulatedOperations5.2% growth

RegulatedOperations6.1% growth

Diluted Earnings Per Share Contribution Shows Steady Growth

Overview

$1.82$1.72

$1.92$1.95-$2.05

$1.58

CAGR 5.9% $2.05-$2.15

6

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

7

Margin Drivers in the Regulated Business Operating in 12 states (gold)

Grow rate base by investing capital and adding customers

• Estimated rate base of $3.5 billion at 9/30/08

Executing our rate strategy

• $50-$60 million annual approved rate increases


8

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

9

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 Rate Filings GRIP General Rate Case Aggregate

($ M

illio

ns)

Approved Annual Rate Increases in the Regulated Operations

$6.3

$50 - $60

$39.0


$40.1

$18.6$16.2

10

$0

$50

$100

$150

$200

$250

$300

$350

2007 2008E 2009E

Cap

ital E

xpen

ditu

res

$0

$50

$100

$150

$200

$250

$300

Dep

reci

atio

n Ex

pens

e

Non-Growth Growth Depreciation

Managing Capital ExpendituresAccelerated Rate Mechanisms Provide Timely Returns($ millions)

$132-135

$346-$350


$212-215

$328-$335

$90-$94$101.2

$285.5

$197-$200$195.8

Includes both Natural Gas Distribution and Regulated Transmission and Storage segments

$104-$106 million of non-growth capital to be spent in areas with annual updates-Texas, Louisiana & Mississippi

$12-$14 million to be spent in remaining states where rate cases are filed-regulatory lag

$104-$106 recovered in annual

filings

$12-$14 exposed to

regulatory lag

11

9.3

7.4 7.5

8.78.3

4.0

6.0

8.0

10.0

12.0

2005 2006 2007 2008E 2009E

Regulated Operations ROE Potential in Regulated Distribution and Pipeline Operations

ALLOWED ROE – 10.0%

POTENTIAL ROE – 9.0%Regulatory lag, inflation, etc.

Regulatory Return on Equity %

Note: Calculations are based on regulatory accounting treatment and are not consistent with GAAP accounting

Earned Regulatory ROE %

$17 million Net Income Gap $18 million

$ 5 million Net Income Gap $12 million

Net Income Gap between actual return and allowed return is projected to be approximately:

$22 million for fiscal 2008 $30 million for fiscal 2009

12

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 and 792 Bcf in fiscal 2009

• Current average volume of approximately 2.15 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 Operations Regulated Transmission and Storage

13

Growth Drivers Growth Drivers 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

Accelerated capital recovery through GRIP mechanism

Required pipeline rate case filing anticipated September 2010

Pursue capacity and compression growth opportunities via projects

Atmos Pipeline – Texas Growth DriversTr

ansp

orta

tion

Volu

mes

(Bcf

)

78

60

77

64

85

78

95-97

93-97

99-102

99-103

0

50

100

150

200

2005 2006 2007 2008E 2009E

Mar

gin

Com

posi

tion

($m

illio

ns)

181

374

170

411

194

505

188-195

587-590

188-195

600-605

0

250

500

750

2005 2006 2007 2008E 2009E

555 581

699775-785

138 141163

188-194

788-800

198-205


Mid-Tex Division Third Party

Tariff Based Market Based

14

L8A LoopApprox.25.2

MilesCORYELL

WILLIAMSON

BELL

TRAVIS

LEE

MILAM

BRAZOS

McLENNAN

FALLS

LIMESTONE

K5(3”)

L8 L8A(2ND)

L8A(3GROESBECK

V(30”)

L8A(2ND)

L8A(12”)

M

L32(10”)

P(2N

D)(3

0”)

P(N

OR

TH)

(20”

)L(

SOU

TH)

(20”

)

NORTHZULCH

(12”)

L8(8”)

P(SO

UTH

)(20”

)P(

2ND

)(30”

)

L19(6”)

L8(6”)

L19-3A(4”)

L8B(

8”)

ROBERTSON

L8AM

(4”)

KINDER MORGANENTERPRISE

ETC

Austin Corridor Project – L8A Loop


Approximately 25 miles of 24-inch pipe extending from Groesbeck to Riesel Junction lines

Completed pipeline should supply an incremental 100 MMcf/d to current design demand of 232 MMcf/d

Provides increased service to existing LDCs and power plants and will compete for new power plant business in the Austin area

Estimated capital cost of between $50-$55 million

Estimated completion in 3rd

quarter of fiscal 2009

L8A Loop

Approx.

25.2 miles

15





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

16

Core Business Core Business Growth Business

Business Delivered Gas Asset Optimization Mid-Stream Development

ServicesAggregate & Purchase Gas Supply, Transport, Storage/Load Balancing, Risk Management and other bundled services

Extract (optimize) the value of owned, leased or managed storage and transportation assets as markets provide opportunities via price volatility

Gather, process and store producer volumes for downstream delivery to markets.

Strategy Find cost effective sources of gas and deliver to customers reliably and at a competitive price.

Provide creative solutionsand services to meetcustomers gas requirements

Capture additional value of storage and transportationassets thru arbitrage andsegmenting strategies, within risk limits.

Expand leased storage and transportation capacity thru new customer relationships

Develop or acquire gathering, processing or storage assets that will provide steady, predictable income and support marketing opportunities.

Reduce gas costs throughvalue-added services providedto producers.

MarginsMore predictable margins from primarily 90 day to 365 day contracts

Driven by customer demand for gas volumes, services and competition.

Variable margins, with upside.Driven by gas price spread volatility creating arbitrage potential, physical storage capabilities, costs & available storage & transport capacity.

Stable, fee-based income.Driven by gathering, processing, and storage services.

Nonregulated OperationsBusiness Mix

17

Increased availability and demand for pipeline and storage assets

Uncertainty around the future role of large financial institutions in the marketing business

Tighter credit may result in consolidation or exit of competitors

Sustained higher natural gas prices supporting new drilling and production

Increased storage and transportation lease costs

Dampened time spread volatility

Market Overview

Neutral

Leases or manages storage and pipeline assets

Creates opportunity to increase availability of talent, offset in part by the loss of market liquidity

Business Reason

Positive

New sources of gas supply; offset by collections risk and working capital impact

Nonregulated OperationsImpact

Positive/Neutral

Neutral Potential to increase market share; offset by higher credit costs

Requires greater asset optimization marginsNegative

NegativeAEH has assets, experience and proven strategy to capture arbitrage value as prices vary

18

Atmos Energy Marketing Customers (gray states)


Key Growth DriversKey Growth Drivers

Retain existing customers(1,100 current customers)

Saturate existing markets-target Atmos Energy’s distribution footprint

Expand into targeted growth markets – where lease, own or manage storage & transportation assets

Expand asset management business

Unit margin expansion from premium value-added services provided to customers

Access to storage and transportation capacity

19

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

2009E

$70 - $75 Million

$15 - $20 Million

$85 - $95 Million

=

Atmos Energy Marketing – Margin Composition


20

Gross Sales VolumesBCF

273

337424 450-470 480-500

0

100

200

300

400

500

600

2005 2006 2007 2008E 2009E

.25.31

.15 .14-.15 .14 -.15

0.00

0.10

0.20

0.30

0.40

2005 2006 2007 2008E 2009E

Delivered Gas Unit Margins(cents per Mcf)

Delivered Gas Volumes Projected to Continue Growth Trend


~ 15%

21

Atmos Energy Marketing Realized Margins Projected Compound Annual Growth Rate


51.3

(1.9)

60.0

28.0

87.2

26.2

15.0-20.0.

57.1

28.8

(10.0)

10.0

30.0

50.0

70.0

90.0

110.0

130.0

2004 2005 2006 2007 2008E 2009E

Asset Optimization

Delivered Gas

113.4

88.0

75.0-85.0

85.9 85.0-95.0

49.4

65.0-70.0

10.0-15.015.0-20.0

70.0-75.0

($ m

illio

ns)

~ 13%

22

51.3

(1.9)

(2.8)

60.0

28.0

(26.0)

87.2

26.2

17.2

65.0-70.0

10.0-15.0

18.415.0-20.0

.

70.0-75.0

(30.0)

(10.0)

10.0

30.0

50.0

70.0

90.0

110.0

130.0

150.0

2004 2005 2006 2007 2008E 2009E

Delivered Gas Asset Optimization Unrealized Margins

($ m

illio

ns)


62.0

130.6

104.3

75.0-85.0

Mark-to-market accounting can cause large swings in unrealized margins. An example of the accounting can be found in the appendix to this presentation

Fiscal 2008E and Fiscal 2009E marketing margins exclude any mark-to-market impact

Atmos Energy Marketing Margins – Mark-to-Market Accounting Impact

85.0-95.0

46.6

57.1

28.8

65.0-70.0

15.0-20.010.0-15.0

StorageDevelopment of Fort Necessity storage project in Franklin Parish, Louisiana2 reservoir storage locations in Kentucky and a 25% interest in a salt storage in Louisiana. (Total usable capacity of 3.9 BCF)

Pipeline21-mile pipeline (24-inch with 270,000 per day capacity) with receipt interconnects to Gulf South, Bridgeline, Acadian and Columbia Gulf interstate pipelines - ability to deliver to Atmos distribution affiliates, a few industrial customers, an Entergy power plant, and Entergy’s LDC in New Orleans

GatheringCompleted Park City Gathering System in Kentucky – 23 mile, low-pressure gathering system in Edmonson County, KentuckyClosing on October 1, 2008, of the Shrewsbury Gathering System acquisition

Growth DriversStrategic locationPreferred provider to LDC’s Expand asset management businessAccess to storage and transportation assetsGas price volatility

Atmos Pipeline & Storage & Other – Owned Asset Mix


23

24

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

Storage facility spans 500 acres 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

Currently considering an ownership/development arrangement

Ft. Necessity Gas Storage Project in Louisiana


Salt Storage ProjectFranklin Parish, LA

(80 acres per square)

Legend of Nearby Pipelines

Regency ANR

LIG CGT

TGT TGP

TLGFort Necessity

Salt Dome

25

23 mile low-pressure gas gathering system northeast of Bowling Green, KY with delivery into TGT’s Slaughter/Bowling Green lateral

Initially, 47 of 60 wells connected via polyethylene pipe with expected capacity of over 10,000 Mcf/d

Current production of about 2,200 Mcf/day

Gas contains about 16% nitrogen and is treated by a facility; treating capacity limited to 5,000 Mcf/day

Total cost of about $12 million; $3 million of capital spent in fiscal 2007 and about $9 million in fiscal 2008

Operations began in May 2008

Projected to generate about $1.3 million of net income per year over 10 years, with additional $2.5 million of capex to extend the backbone system

Full payback expected in 9 years

Park City Gathering System in Kentucky


26

$6.2 Million Asset Purchase -80 mile low-pressure gas gathering system

-26 miles of 10-inch lines-treatment & compression-Midwestern PL Interconnect-Intent to sell

-Proved reserves-Producing wells -Mineral interests

Current production of about 700Mcf/day

50 additional wells can be connected for Kentucky Natural Gas with expected capacity of 750 Mcf/d

Remaining gathering business projected to generate about $0.2 million of net income per year over 10 years to yield an IRR of 27%

Shrewsbury Gathering System in Kentucky


AEH 6”

Shrewsbury 10”

Park City

AEH 8” Orbit

White Plains Storage

AEH Central Treating Facility

Proposed

12”

32,000 acres

27

11.5

1.6

5.3

11.8

3.4

5.9

16.0

10.7

3.8

10.0-12.0

4.0 - 5.0

4.0 - 6.0

11.0-13.0

4.0-5.0

14.0-16.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2005 2006 2007 2008E 2009E

OtherAsset OptimizationStorage & Transport

($ m

illio

ns)


18.421.1

30.5

Atmos Pipeline and Storage Realized MarginProjected Fiscal 2009E Compound Annual Growth Rate

18.0- 23.0

29.0- 34.0

Asset Optimization

~ 29.5%

Projected CAGR

Storage & Transportation

~ 1%

Other ~ 29.7%

~ 15%

28

11.5

1.6

5.3

(4.7)

11.8

3.4

5.9

3.4

16.0

10.7

3.82.1

10.0-12.0

4.0 - 5.0

4.0 - 6.0

11.0-13.0

4.0 - 5.0

14.0-16.0

(10.0)

(5.0)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2005 2006 2007 2008E 2009E

Unrealized MarginsOtherAsset OptimizationStorage & Transport

($ m

illio

ns)


13.7

24.5

32.6

Atmos Pipeline and Storage and Other MarginMark-to-Market Accounting Impact

18.0- 23.0

29.0- 34.0 Mark-to-market accounting can cause large swings in unrealized margins. An example of the accounting can be found in the appendix to this presentationFiscal 2008E and Fiscal 2009E pipeline and storage margins exclude any mark-to-market impact

29

Atmos Energy expects earnings to be in the range of $2.05 - $2.15 per diluted share for the 2009 fiscal yearAssumptions include:

Contribution from natural gas marketing segment reflects less volatility in gas price spreads

o Total expected gross margin contribution from the marketing segment in the range of $85 million to $95 million, excluding any material mark-to-market impact at September 30, 2009

Continued successful execution of rate strategy and collection effortsBad debt expense of no more than $12 millionAverage gas cost ranging from $9 - $11 per mcfShort-term interest rate of 3.75%No material acquisitionsNormal weather

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 2009 significantly above or below this outlook.

Consolidated Earnings Guidance – Fiscal 2009E

Financial Review

30

$ 2.05 – $2.15$ 1.95 – 2.05$ 1.92$ 1.82$ 1.72Earnings Per Share

91.490.187.781.479.0Avg. Diluted Shares

187 – 197176 – 185168148136Total

17 – 1911 – 1215104Pipeline, Storage & Other

30 – 3327 – 30465823Natural Gas Marketing

44 – 4643 – 44342728Regulated Trans. & Storage

$ 96 – 99$ 95 – 99$ 73$ 53$ 81Natural Gas Distribution

2009E2008E200720062005

Financial ReviewProjected Net Income by Segment($ millions, except EPS)

31

136

82

133

178

416

148

89

147

186

433

168

94

145

199

463

110 - 115

136-138

200-210

480-490

187-197

121-127

142-144

215-220

480- 490

0

200

400

600

800

1,000

1,200

2005 2006 2007 2008E 2009E

Selected Income Statement Components($ millions)

D & A $215 - $220Interest $142 - $144Income Tax $121 - $127Net Income $187 - $197

O & M $480 - $490

2009E Consolidated($ millions)

Financial Review

176 - 185

Shares Out 91.4 million

32

99.1

228.3

80-83

285- 288

70-72

280-285

$0

$100

$200

$300

$400

2007 2008E 2009E

RegulatedGas Distribution

RegulatedTransmission & Storage

$365-$371

Capital Expenditures

$327.4

2.1

57.2

10-11

61-62

62-63

48-50

$0

$20

$40

$60

$80

$100

$120

2007 2008E 2009E

$71-73

4.6 1.1 15-16

4-548-52

2-3

$0

$15

$30

$45

$60

$75

2007 2008E 2009E

Nonregulated

$59.3

$5.7

Financial Review

Consolidated fiscal 2009 CAPEX projection is $510-$525 million

($ millions)

$19-21

Growth Capital

Non- Growth Capital

2008E as of August 5, 2008

$350-$357

$110-$113

$50-$55

33

Bank Facility Features:In December 2006, Atmos Energy entered into a new $600 million, 5-year committed revolving credit facility through December 2011

Serves as a backup liquidity facility for our $600 million commercial paper programCommitment amount from Lehman Brothers Bank approximately $33 million

In November 2007, Atmos Energy entered into a new $300 million, 364-day committed revolving credit facility

Supplements amounts available under existing $18 million committed credit facilityCommitment amount from Lehman Brothers Bank approximately $17 million

In March 2008, Atmos Energy Marketing amended and extended its $580 million uncommitted demand working capital credit facility to March 31, 2009

Used primarily for Letters of Credit and working capital needsParticipating banks include BNP Paribas, Fortis Capital, Brown Brothers Harriman, Natixis, Royal Bank of Scotland, Societe Generale, RZBFinance, and Bank of Tokyo-Mitsubishi UFJ

Financial ReviewAmple Liquidity with Existing Credit Lines

34

$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

$1.30E

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

Dividend Payout Ratio

Debt Capitalization Ratio

Solid Dividend and Credit Positions

Dividend / SharePayout Annual Dividend

Amounts are adjusted for mergers and acquisitions. Fiscal 2008 is the indicated annual dividend.

Moody’sSenior 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

Investment Grade Credit

Current Dividend Yield About 4.8%Average LDC Payout Ratio = 65%

Financial Review

78% 77%

72%

63-67%67%

81%

69%

1.26 1.28

1.241.221.201.18

1.30

60%

65%

70%

75%

80%

85%

2002 2003 2004 2005 2006 2007 2008E$1.00

$1.10

$1.20

$1.30

$1.40

$1.50

35

Financial Review

14.1x

15.2x

13.2x

11.0

12.0

13.0

14.0

15.0

16.0

S&P 500 Peer GroupAvg.

Compelling Valuation and Total Return Proposition

4.9

3.9

4.7

4.8 11.9

2.0

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 @ 9/25/08Peer group averages exclude Atmos

8.8% 9.5%

13.9%

Atmos EnergyAtmos

Energy

36

SlideAppendix

37

10.0%Authorized Return on Equity (ROE)9.6%

Effective 7/1/08Capital Structure 52% Debt; 48% EquityEffective 11/08 (est.)

Pending city council approval$20.0 Million RRM

Effective 11/08 (est.)(approx. $16 million)

Effective 11/08 (est.)(approx. $2 million)

$10.3 Million GRIP Filing RecoveryIncluded in RRM filing

Effective 7/1/08Gas Cost Recovery of Bad DebtEffective 11/08 (est.)

$1 Million Conservation Program

$19.6 Million Rate Increase

$10 Million Rate Increase

Systemwide Increase in Revenues

100%

Effective 11//08 (est.)

__

Effective 4/1/08(approx. $8.0 million)

Settlement(438 of 439 Cities)

~80%

Effective 10/1/08

__

Effective 7/8/08(approx. $3.9 million)

RRC Order(City of Dallas & Environs)

~20%

Regulated OperationsMid-Tex Division 2008 Rate Outcome Summary

38

713

588

0

200

400

600

800

Atmos Energy Peer Group Avg.

Regulated Distribution Efficiency Metrics

$119

$202

$0

$50

$100

$150

$200

$250

Atmos Energy Peer Group Avg.

Distribution O&M Expense per CustomerCustomers Served Per Distribution Employee

Note: Results are based on fiscal 2007 performance for Atmos and most recent information available for the peer group. 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.

Operating Efficiencies Benefit Customers & Shareholders

Distribution Bad Debt Expense as % ofResidential & Commercial Revenue

Perc

ent

Non-Weather Sensitive MarginWeather-Sensitive Margin

Non-Weather-Sensitive Margin 2008-2009E Heating Season

97%

3% (approx. $32 million) 0.83

0.29

0.58 0.58 0.61

0.350.30

0.0

0.5

1.0

2003 2004 2005 2006 2007 2008E 2009E

39

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 report the transactions for external financial 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

40

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

41

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

At June 30, 2008

42

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

At June 30, 2008

Atmos Energy CorporationJurisdictional Rate Data

Jurisdiction

Effective Date of Last Rate

Action

Date of Last Rate Filing

(pending)Rate Base

(in thousands) 1

Requested Rate Base (in

thousands)

Authorized Rate of Return

Requested Rate of Return

Authorized Return on

Equity

Requested Return on

Equity

Authorized Debt/Equity

Ratio

Requested Debt/Equity

Ratio Bad debt Rider 3 WNA

Performance Base Rate Program 4

6/30/08 Meters

Atmos Pipeline-Texas 5/24/04 417,111 8.258% 10.00% 50/50 NA N/A N/A n/aAtmos Pipeline-Texas - GRIP 4/15/2008 713,351 8.258% 10.00% 50/50 NA N/A N/A n/aMid-Tex - Settled Cities 10/1/08 1,176,453 6 7.79% 9.60% 52/48 Y Y N 1,233,300 Mid-Tex - Dallas & Environs 6/24/08 1,127,924 6 7.98% 10.00% 52/48 Y Y N 308,300 Lubbock 3/1/04 6/1/2008 43,300 52,186 9.15% 7.79% 11.25% 9.60% 50/50 52/48 Y Y N 73,171 Lubbock Environs GRIP 7 9/1/2008 50,778 9.15% 11.25% 50/50 NA N/A N/A n/aWest Texas Cities 5/1/04 8/29/2008 87,500 112,043 8.77% 7.79% 10.50% 9.60% 50/50 52/48 Y Y N 156,785 W. TX Cities Environs GRIP 7 1/1/2008 96,738 8.77% 10.50% 50/50 NA N/A N/A n/aAmarillo 9/1/03 36,844 9.88% 12.00% 50/50 Y Y N 70,327 Colorado 10/1/07 81,208 8.45% 11.25% 52/48 N N N 110,322 Kansas 05/12/08 135,561 2 8.47% 2 11.00% 2 52/48 Y Y N 129,877 Georgia 9/17/2008 66,893 7.75% 10.70% 55/45 N Y Y 69,484 Illinois 11/1/00 24,564 9.18% 11.56% 67/33 N N N 23,421 Iowa 3/1/01 5,000 2 11.00% 57/43 N N N 4,428 Kentucky 8/1/07 169,406 2 8.82% 2 11.75% 2 52/48 N Y Y 177,396 Missouri 3/4/07 55,976 2 8.59% 2 12.00% 2 56/44 N N 5 N 58,581 Tennessee 11/4/07 186,506 8.03% 10.48% 56/44 N Y Y 133,965 Virginia 08/1/04 2/20/2008 32,668 36,675 8.46%-8.96% 8.08% 9.50%-10.50% 10.00% 52/48 55/45 Y Y N 23,476 TransLa 4/1/08 96,834 2 8.00% 10.00%-10.80% 52/48 N Y N 79,739 LGS 7/1/08 221,970 2 8.21% 10.40% 52/48 N Y N 280,742 Mississippi 1/1/05 9/5/2008 196,801 214,525 8.23% 8.06% 9.80% 10.46% 53/47 53/47 N Y N 272,105

1 The rate base, authorized rate of return and authorized return on equity presented in this table are those from the last base rate case for each jurisdiction.These rate bases, rates of return and returns on equity are not necessarily indicative of current or future rate bases, rates of return or returns on equity.

2 A rate base, rate of return, return on equity or debt/equity ratio was not included in the respective state commission's final decision.3 The bad debt rider allows us to recover from ratepayers the gas cost portion of uncollectible accounts.4 The performance-based rate program provides incentives to natural gas utility companies to minimize purchased gas costs by allowing the utility company

and its customers to share the purchased gas cost savings.5 The Missouri jurisdiction has a straight-fixed variable rate design, which decouples gross profit margin from customer usage patterns.6 Mid-Tex rate base for settled cities and Dallas both represented on a 'system-wide' basis.7 Lubbock & WT Cities Environs are calculated on a 'system wide' basis and will only be applied to environs areas once RRM/CCVP takes effect.

Economy & Finance

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