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Atmos Energy Corporation
       Analyst Conference



                                  December 2007




 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. 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.
                                                                                                    2
Management Participants



Robert W. Best - Chairman, President & CEO

J. Patrick Reddy - Senior VP & CFO

Kim Cocklin - Senior VP, Regulated Operations

Mark H. Johnson - Senior VP, Nonregulated Operations

Susan Giles- VP, Investor Relations


                                                       3




      Atmos Energy Today




                   Robert W. Best
                   Chairman, President & CEO
                                                       4
Overview
Company Profile

   The nation’s largest pure-gas distribution company
   Solid financial foundation
   Track 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, natural gas distribution
      earnings capability
    • Complement core distribution business through select
      nonregulated operations

                                                             5




Overview
Scope of Operations
 Regulated gas distribution operates in 12 states (gold)
 Nonregulated operates in 22 states (gray)




                                                             6
Overview



  Atmos Energy Corporation
  Atmos Energy Corporation
      (Regulated Operations)
     (Regulated Operations)        Atmos Energy Holdings, Inc.
                                   Atmos Energy Holdings, Inc.
     Gas Distribution Divisions
    Gas Distribution Divisions
      Transmission & Storage          (Nonregulated Operations)
     Transmission & Storage          (Nonregulated Operations)
             Colorado-Kansas
            Colorado-Kansas
                                         Atmos Energy Marketing
                                         Atmos Energy Marketing
           Kentucky/Mid-States
           Kentucky/Mid-States           • • Marketing
                                              Marketing
                                         • • Asset Optimization
                                              Asset Optimization
                 Louisiana
                Louisiana
                                         Atmos Pipeline, Storage
                                         Atmos Pipeline, Storage
                 Mid-Tex
                Mid-Tex                        & Other
                                               & Other
                                         • • Non-Texas Assets (Storage & Pipeline)
                Mississippi                Non-Texas Assets (Storage & Pipeline)
               Mississippi               • • Midstream
                                           Midstream
                                         • • Other
                                           Other
               West Texas
               West Texas
          Atmos Pipeline -Texas
          Atmos Pipeline -Texas
                                                                                     7




Overview
Successful Acquisition History

Acquisition           Company            Customers  Purchase
  Date                Acquired           Acquired Price $ (000s)

   1986       Trans Louisiana Gas              69,000                   44,100
   1987       Western Kentucky Gas            147,000                   85,100
   1993       Greeley Gas Company              98,000                  111,717
   1997       United Cities Gas Co            307,000                  469,485
   2000       ANG Missouri Assets              48,000                   32,000
   2001       55% interest in Woodward            -                     26,657
   2001       Louisiana Gas Service           279,000                  363,399
   2002       Mississippi Valley Gas          261,500                  220,200
   2004       ComFurT Gas Inc.                  1,800                    2,000
   2004       TXU Gas Company               1,500,000                1,916,696
                                                                                     8
Overview
Diluted Earnings Per Share Contribution Shows Steady Growth


                                    %
                            R 6.1                           $1.95-$2.05
                      CAG                           $1.92
 $2.10                                   $1.82
                          $1.72
                $1.58
 $1.80
                                                            0.59-0.61
                                                                                Nonregulated
                                                 0.69
                      0.34
 $1.50
                                                                                Operations
                                    0.84
         0.42
 $1.20                                                                          Regulated
                                                                                Operations
 $0.90
                                                            1.36-1.44
                      1.38
                                                 1.23
 $0.60   1.16
                                    0.98
 $0.30
 $0.00
         2004         2005          2006        2007      2008E
                                                                                                     9




Overview
Regulated Operating Income Moving Towards Historic Levels
Estimated to be 80% in Fiscal 2008


                 1%           4%               5%         4%
 100%
         12%                                                              Nonregulated Pipeline,
                                                    16%
                                        19%
                        27%                                               Storage & Other
  80%    19%
                                                    20%                   Nonregulated Natural Gas
                                        20%
                        16%
  60%                                                                     Marketing
                                                                          Regulated Transmission
         68%
  40%                                               60%                   & Storage
                        53%             56%
                                                                          Regulated Gas
  20%
                                                                          Distribution
   0%
         2005           2006            2007        2008E
                                                                                                     10
Overview
    Successfully Executing on the Rate Strategy


                                                                                       GRIP/
                                                Purchased                              Accelerated          Decoupling/              Gas Cost
                 Number of           Percentage Gas Cost                               Capital              Rate                     Bad Debt
                 Customers            of Total  Adjustments                 WNA        Recovery             Stabilization            Recovery
                                                                                                                                                 4
                 1,800,000
Texas                                    57%                                                                                           Partial

Louisiana          350,000               11%

Mississippi        270,000                8%
Remaining
                                                                                 1                  2                   3                        5
Jurisdictions      770,000               24%                                                                                           Partial
                                                                                          Partial             Partial




  Partial means applicable within certain jurisdictions within the category.
1
  Excludes Colorado, Iowa and Illinois for a total of 137,657 customers.
2
  Includes Missouri, Kansas and Georgia for a total of 258,102 customers.
3
  Includes Missouri for a total of 59,672 customers.
4
  Includes Amarillo for a total of 69,772 customers.
5
  Includes Kansas and Virginia for a total of 151,545 customers.
                                                                                                                                                     11




     Overview
     Annual Dividend for the Years 1984 – 2008E

                                                                                                                               $1.30E
     $1.40

     $1.20

     $1.00

     $0.80

     $0.60

     $0.40

     $0.20

     $0.00
              '8
              '8
              '8
              '8
              '8
              '8
              '9
              '9
              '9
              '9
              '9
              '9
              '9
              '9
              '9
              '9
              '0
              '0
              '0
              '0
              '0
              '0
              '0
              '0
              '0
                4
                5
                6
                7
                8
                9
                0
                1
                2
                3
                4
                5
                6
                7
                8
                9
                0
                1
                2
                3
                4
                5
                6
                7
                8




                 Note: Amounts are adjusted for mergers and acquisitions. For fiscal 2008, $1.30 is the indicated annual dividend.
                                                                                                                                                     12
Overview
 Dividend Payout Ratio Has Improved

Payout                                                                                     Dividend / Share
  85%                                                                                             $1.50
              81%
 80%                                                                                                  $1.40
                            78%
                                            77%
                                                                                         1.30
                                                                              1.28
 75%                                                                                                  $1.30
                                                                   1.26
                                                         72%
                                                                   69%
                                                         1.24
 70%                                                                                                  $1.20
                                            1.22
                            1.20
              1.18                                                                      63-67%
                                                                                66%
 65%                                                                                                  $1.10


 60%                                                                                                  $1.00
              2002          2003            2004         2005      2006        2007     2008E

                                   Current Dividend Yield Approximately 5%
                                       Average LDC Payout Ratio = 65%
                                                                                                              13




 Overview
 Improved Debt Capitalization Ratio
 Achieved Stated Goal of 50-55%

         65
                                                            (TXU Gas)
                                                                                60.9%
                                                                59.3%
         60


         55
                          53.6%                                                               53.7%
         50


         45
                                                 43.3%

         40
                 Fiscal 2003           Fiscal 2004       Fiscal 2005*     Fiscal 2006   Fiscal 2007



              * TXU Gas acquisition effective 10/1/04                                                         14
Overview
Investment Grade Credit Ratings


     Moody’s                                                   Rating
            Senior Unsecured Debt:                             Baa3
            Commercial Paper:                                  P-3
           Outlook:                                            stable
     Standard & Poor’s
            Senior Unsecured Debt:                             BBB
            Commercial Paper:                                  A-2
           Outlook:                                            positive
     Fitch
            Senior Unsecured Debt:                             BBB+
            Commercial Paper:                                  F-2
           Outlook:                                            stable



                                                                                       15




Overview
In Summary: Achievements and Priorities

      Fiscal 2007 Achievements
      (1) Increased earnings per share by 5.5%

      (2) Paid cash dividends for the 23rd consecutive year

      (3) Regained debt capitalization target of 50-55%

      (4) Received $40 million of rate increases in regulated operations

      (5) Commenced Park City low-pressure gas gathering project in Kentucky

      Fiscal 2008 Priorities
      (1) Deliver earnings objective of $1.95 - $2.05 per diluted share

      (2) Preserve our progress in strengthening the balance sheet

      (3) Seek improved rate design mechanisms to cure earnings deficiencies in
          regulated operations
      (4) Identify, review, and develop internal projects in nonregulated businesses
          that provide above-average financial returns

                                                                                       16
Regulated Operations




                      Kim Cocklin
                      Senior VP, Regulated Operations
                                                                                 17




Regulated Operations



 Atmos Energy Corporation
 Atmos Energy Corporation
     (Regulated Operations)
    (Regulated Operations)       Atmos Energy Holdings, Inc.
                                 Atmos Energy Holdings, Inc.
    Gas Distribution Divisions
   Gas Distribution Divisions
     Transmission & Storage         (Nonregulated Operations)
    Transmission & Storage         (Nonregulated Operations)
          Colorado-Kansas
         Colorado-Kansas
                                     Atmos Energy Marketing
                                     Atmos Energy Marketing
        Kentucky/Mid-States
        Kentucky/Mid-States          • • Marketing
                                          Marketing
                                     • • Asset Optimization
                                          Asset Optimization
              Louisiana
             Louisiana
                                     Atmos Pipeline, Storage
                                     Atmos Pipeline, Storage
              Mid-Tex
             Mid-Tex                        and Other
                                           and Other
                                     • • Non-Texas Assets (Storage & Pipeline)
                                       Non-Texas Assets (Storage & Pipeline)
             Mississippi
            Mississippi              • • Midstream
                                       Midstream
                                     • • Other
                                       Other
            West Texas
            West Texas
       Atmos Pipeline -Texas
       Atmos Pipeline -Texas
                                                                                 18
Regulated Natural Gas Distribution
Profit Drivers in the Distribution Business
Regulated Gas Distribution Operates in 12 States (gold)



 Customer and meter
 growth
 Growing rate base
  • Estimated rate base at
    9/30/07 was $3.4 billion

 Managing costs
 Executing our rate
 strategy




                                                                                                                    19




Regulated Natural Gas Distribution
Mid-Tex Division


  Largest Atmos division; serves about
  550 communities
  Largest natural gas distributor in Texas
  Over 28,300 miles of distribution pipe
  Weather normalization in place from
  November - April
  Accelerated capital recovery through
  annual GRIP filings
  $52 million rate case pending




                                                                                   Authorized      Effective Date
                                              Rate Base           Authorized       Debt/Equity      of Last Rate
                 Jurisdiction      Meters   ($ thousands)            ROE             Ratio             Action
                   Mid-Tex        1,518,119    1,043,857           10.00%            52/48            04/01/07


                  Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated.

                                                                                                                    20
Regulated Natural Gas Distribution
West Texas Division


  Serves about 80 communities
  Over 14,600 miles of distribution pipe
  Weather normalization in place from
  October - May
  Accelerated capital recovery through
  annual GRIP filings
  Recovery of gas cost portion of bad
  debt expense in Amarillo




                                                                                     Authorized        Effective Date
                                               Rate Base            Authorized       Debt/Equity        of Last Rate
                    Jurisdiction      Meters ($ thousands)             ROE             Ratio                Action
                     Amarillo         69,772     36,844              12.00%             50/50              09/01/03
                     Lubbock          73,672     43,300              11.25%             50/50              03/01/04
                    West Texas        165,919    87,500              10.50%             50/50              05/01/04

             Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated in each jurisdiction.

                                                                                                                                 21




Regulated Natural Gas Distribution
Louisiana Division



     Serves about 300 communities
     Over 8,200 miles of distribution pipe
     Weather normalization in place from
     December - March
     Rates updated annually through
     stable rate filings




                                                                                      Authorized       Effective Date
                                               Rate Base     Authorized               Debt/Equity       of Last Rate
                    Jurisdiction      Meters ($ thousands)      ROE                     Ratio              Action
                     Trans LA          79,985     96,848   10.00 – 10.80%               52/48             04/01/07
                        LGS           277,497    207,587       10.40%                   52/48             07/01/07
             Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated in each jurisdiction.

                                                                                                                                 22
Regulated Natural Gas Distribution
Mississippi Division


    Serves about 110 communities
    Over 6,400 miles of distribution pipe
    Weather normalization in place from
    November - April
    Rates updated annually through
    stable rate filings




                                                                                       Authorized       Effective Date
                                                Rate Base             Authorized       Debt/Equity       of Last Rate
                     Jurisdiction      Meters ($ thousands)              ROE             Ratio              Action
                     Mississippi       270,980    196,801               9.80%            47/53             01/01/05


                      Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated.


                                                                                                                                23




Regulated Natural Gas Distribution
Colorado-Kansas Division


  Serves about 170 communities
  Over 6,600 miles of distribution pipe
  Weather normalization in Kansas
  from October - May
  $5 million rate case pending in
  Kansas




                                                                                     Authorized           Effective Date
                                               Rate Base          Authorized         Debt/Equity           of Last Rate
             Jurisdiction       Meters       ($ thousands)           ROE                Ratio                 Action
              Colorado          109,860           84,711           11.25%              52/48                 07/01/05
               Kansas           127,824                               *                   *                  03/01/04
                                                    *
          * Not included in state commission’s final decision.
            Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated in each jurisdiction.
                                                                                                                                24
Regulated Natural Gas Distribution
Kentucky/Mid-States Division

    Serves over 420 communities in 7 states
    Over 12,000 miles of distribution pipe
    Weather normalization in 4 states
        • Georgia from October - May
        • Kentucky from November - April
        • Tennessee from November - April
        • Virginia from January - December
    Decoupling rate mechanism in Missouri
    Accelerated capital recovery in Missouri
    and Georgia
    Recovery of gas cost portion of bad debt
    expense in Virginia

                                                                                     Authorized       Effective Date
                                                    Rate Base   Authorized           Debt/Equity       of Last Rate
                   Jurisdiction        Meters     ($ thousands)     ROE                Ratio              Action
                     Georgia            70,606         62,380      10.13%              55/45             12/20/05
                     Illinois           23,342         24,564      11.56%              67/33             11/01/00
                       Iowa              4,455          5,000      11.00%              57/43             03/01/01
                    Kentucky           177,988           *            *                   *              08/01/07
                    Missouri            59,672           *            *                   *              03/04/07
                   Tennessee           133,715        186,506      10.48%              56/44             11/04/07
                     Virginia           23,721         30,672   9.50-10.50%            52/48             08/01/04

               * Not included in state commission’s final decision.
                 Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated in each jurisdiction.   25




Regulated Natural Gas Distribution
Stabilizing Natural Gas Distribution Margin Sensitivity
  Weather Normalization Adjustment (WNA) for Mid-Tex and Louisiana divisions became effective for the 2006-2007 winter
  heating season, which reduced margin exposure to weather from 17 percent to 5 percent
  With the rate design changes effective for the 2007-2008 winter heating season, weather-sensitive margin is expected to
  be further reduced to about 3 percent



                 2004–2006                                   2006–2007                                  2007–2008E
              Heating Season                                                                          Heating Season
                                                           Heating Season
                (Post Mid-Tex)
                                                                                                   3%
                                                                  5%
                 17%



                                                                     95%                                           97%
                           83%




                     Non-Weather Sensitive Margin                                          Weather Sensitive Margin


* Non-weather sensitive margin includes weather-normalized margins, monthly fixed charges and gas consumption that is
not correlated to weather - gas clothes dryer, gas water heater, gas cooking, etc.                                                   26
Regulated Natural Gas Distribution
Gas Distribution Gross Profit per Meter

                                        $340
                                                                                                          320-325
                                        $320
                        $ per meter




                                                                    299                          299
                                        $300               293                            291
                                                                                 287
                                        $280
                                                    271

                                        $260


                                        $240
                                               2002       2003     2004     2005       2006     2007 2008E
                                                                             11%        13%
                                                 6%        1%        4%                         Normal      Normal
                                                                   warmer   warmer     warmer
                                               warmer     colder
                                                                                                                                                   27




Regulated Natural Gas Distribution
Managing Capital Expenditures at the LDC
($ millions)

                                                                                                     $254-$260
                                      $250                                                                           $250
                                                                                                                            Depreciation Expense
 Capital Expenditures




                                                                                       $51
                                      $200                                                                           $200
                                                                                                            $184



                                      $150                                                                           $150


                                                                                                           $91-$94
                                      $100                                                                           $100


                                       $50                                                                           $50


                                        $0                                                                           $0
                                             2002     2003       2004     2005     2006       2007     2008E

                                                      Non-Growth          Growth       Depreciation                                                28
Regulated Natural Gas Distribution
         Leading Efficiency Metrics vs. Peers


                 Distribution O&M Expense                                                           Customers Served per
                                                                                                    Distribution Employee
                        per Customer

$250                                                                             800

$200                                                                                               713
                                                                                 600
                                                     $202
                                                                                                                               588
$150
                                                                                 400
                         $119
$100
                                                                                 200
$50

                                                                                    0
      $0
                                                                                           Atmos Energy               Peer Group Avg.
                  Atmos Energy               Peer Group Avg.


                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.
                                                                                                                                            29




 Regulated Operations
   Approved Annual Rate Increases in the Regulated Operations


                  $60.0                                                                                               $50 - $60


                  $50.0
                                                                                                       $40.1
 ($ Millions)




                                                                                        $39.0
                  $40.0                                                                                  2.9
                                                                                        1.4



                  $30.0
                                                                                                        25.6
                                    $18.6
                                                                                        34.3
                  $20.0                              $16.2
                                    2.8
                                                     5.7
                  $10.0                                                $6.3
                                   15.8
                                                                                                        11.6
                                                                       1.8
                                                     10.5
                                                                       4.5              3.3
                   $0.0
                                 2003             2004              2005             2006             2007        2008-2012E

                                    Annual Mechanism                GRIP         General Rate Case              Aggregate                   30
Regulated Operations
Upside ROE Potential in Regulated Distribution and Pipeline Operations

Regulatory Return
  on Equity %


   10.0                                                                                               ALLOWED ROE – 10.2%

                                                                                                      Regulatory lag, inflation, etc.
                       9.3
     8.0                                                                                              POTENTIAL ROE – 8.0 %

                                                     7.7                          7.5

     6.0


     4.0



     2.0
                     2005                         2006                         2007
                                 ACTUAL Earned Regulatory ROE %

      Note: Calculations are based on regulatory accounting treatment and are not consistent with GAAP accounting
                                                                                                                                        31




Regulated Transmission and Storage
Atmos Pipeline -Texas
                                                                                   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
                                                                                       740 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
  West Texas Division                                                                • 39 Bcf working gas capacity
                                                                                     • 1.2 Bcf/d maximum withdrawal
  Mid-Tex Division
                                                                                     • 270 MMcf/d maximum injection
  Atmos Pipeline-Texas
  Atmos Energy Headquarters
                                                                                                                                        32
Regulated Transmission and Storage
   Atmos Pipeline - Texas Business Flow


Customers                                    Margins                     Potential Risk                 Risk Management
Atmos Mid-Tex Division                  Tariff Based Rates              Weather                      Seamless Performance


Industrial                              Tariff Based Rates             Weather                       Strong Customer Service
                                                                       Credit Exposure               Timely & Accurate Information


Electric Generation                     Market Based Rates              Weather                      Enforceable Contract Language
                                                                        ERCOT                        Strong Customer Service
                                                                        Competition                  Flexible Value Added Service

Through System                          Market Based Rates              Basis Differentials          Timely Information
                                                                        Competition                  Marketing Excellence
                                                                        Available Capacity           Market Knowledge

Other                                   Market Based Rates              Basis Differentials          Strong Customer Service
                                                                        Competition                  Volume Monitoring
                                                                        Available Capacity           Market Knowledge


                  Maintain/Increase Margins + Increased Throughput + Managed Risk Profile = Stable Earnings Growth

                                                                                                                                     33




   Regulated Transmission and Storage
   Atmos Pipeline - Texas Transportation Mix

                        APT Revenue Sources                                           APT Transport Volumes
                                                                                                      2008E
                                     2008E


                                                Mid-Tex                                                        Mid-Tex
                             Elec Gen                                                    Elec Gen
                     Other
                                                                                                              Transport
                                               Transport
                                7%                                                         10%
                                                                              Other
                     14%
                                                                                                                 25%
                                                  49%                         10%
                                                                 Industrial
     Industrial
                                                                    4%
        5%




                                                                                              Pipeline-Thru
                     Pipeline-Thru
                                                                                                 System
                        System
                                                                                                  51%
                         25%


                         Firm storage and transportation services to Mid-Tex and other LDCs
                         Interruptible transportation and ancillary services to other customer classes
                         Capacity growth opportunities with timely recovery through GRIP
                               • Provides reliability for Mid-Tex distribution customers
                           Strategically positioned to serve growing producer needs in Texas
                                                                                                                                     34
Regulated Transmission and Storage
    Atmos Pipeline - Texas Growth Drivers
                                                                                735-745
                                                                    699
                             750
                                                                                                   Growth Drivers
Transportation Volumes




                                                           581
                                            555
                             600
                                                                                                     Pursue capacity and
                                                                               547-550

                                                                                                     compression growth
                                                                   505
                             450
         (Bcf)




                                                       411
                                                                                                     opportunities such as Opelika
                                          374
                             300
                                                                                                     compressor relocation
                             150                                              1188-195
                                                                   194
                                                                                                     Increased through-system
                                          181          170

                                                                                                     volumes primarily from
                                0
                                       2005         2006         2007         2008E
                                                                                                     producers in Barnett Shale
                                     Mid Tex Division                   Third Party

                                                                                                     Margin expansion through
                              200                                               172-177
                                                                                                     ancillary services such as
                                                                        163
   Margin Composition




                              175
                                                                                                     parking and lending, balancing,
                                                           141
                                              138
                              150
       ($millions)




                                                                                                     blending, and compression
                                                                                78-81
                                                                    78
                              125
                                                        64
                                           60
                                                                                                     Gas price volatility increasing
                              100

                                                                                                     basis differentials between
                                75                                               94-96
                                                                    85
                                                                                                     Texas hubs
                                50         78           77
                                25
                                 0
                                        2005         2006        2007         2008E

                                       Tariff Based                Market Based                                                        35




    Regulated Transmission and Storage
    Atmos Pipeline-Texas Recent Capacity Enhancement Projects



                         Project                                                      Volume       Start Date
                                                                                      (MMcf/d)
                                                                                         225 1
                         North Side Loop                                                           Phase 1: December 2005
                                                                                                   Phase 2: July 2006
                         Howard Compression                                              150       August 2006
                         Katy Compression                                                 50       July 2006
                                                                                               1
                         Huckabay Compression                                             85       July 2007
                                                                                         150 2
                         DFW Airport                                                               September 2007
                                                                                               2
                         Opelika Compression                                             >30       July 2008 Estimate


                         1
                             2007 partial year; 2008 full year
                         2
                             2008 partial year; 2009 full year

                                                                                                                                       36
Regulated Transmission and Storage
Atmos Pipeline -Texas Opelika Project

 Project relocates idle compression from existing
 properties and provides much needed supply support to
 East Texas
    • Adds critical capacity for Mid-Tex winter load requirement
    • Secures industrial customers by providing gas source options
 Capital expenditure estimated at about $6 million
 Minimum estimated ROR of 12.8%
 30,000 Mmbtu/d capacity




                                                                               37




Regulated Transmission and Storage




                                         Barnett
                                          Shale
                                                                           y
                                                                       alle
                                                                   on V
                                                              Cott



                                                      sier
                                                   Bos s
                                                       d
                                                   San

      Permian




         Location of gas
          supply basins




                                                                               38
Nonregulated Operations




                         Mark Johnson
                         Senior VP, Nonregulated Operations
                                                                                39




Nonregulated Operations
Organization Structure


  Atmos Energy Corporation
  Atmos Energy Corporation
      (Regulated Operations)
     (Regulated Operations)       Atmos Energy Holdings, Inc.
                                  Atmos Energy Holdings, Inc.
     Gas Distribution Divisions
    Gas Distribution Divisions
      Transmission & Storage         (Nonregulated Operations)
     Transmission & Storage         (Nonregulated Operations)
            Colorado-Kansas
           Colorado-Kansas
                                      Atmos Energy Marketing
                                      Atmos Energy Marketing
          Kentucky/Mid-States
          Kentucky/Mid-States         • • Marketing
                                           Marketing
                                      • • Asset Optimization
                                           Asset Optimization
                 Louisiana
                Louisiana
                                      Atmos Pipeline, Storage
                                      Atmos Pipeline, Storage
                 Mid-Tex                         and Other
                Mid-Tex                         and Other
                                      • Non-Texas Assets (Storage & Pipeline)
                                      • Non-Texas Assets (Storage & Pipeline)
               Mississippi            • • Midstream
              Mississippi               Midstream
                                      • • Other
                                        Other
              West Texas
              West Texas
         Atmos Pipeline -Texas
         Atmos Pipeline -Texas
                                                                                40
Nonregulated Operations
   Market Overview                                                           Business Reason
                                                   Impact
                                                   Positive               Leases or manages storage
   Increased availability and demand for
                                                                          and pipeline assets
   pipeline and storage assets
                                                                          AEH has assets, experience
                                                   Positive
   Dampened price volatility expected                                     and proven strategy to capture
                                                                          arbitrage value as prices vary
   LNG business is ramping up with more                                   Additional source of low cost
                                                   Positive
   gas expected from imports                                              supply for customers; AEM has
                                                                          large takeaway capacity in Gulf.
                                                    Neutral
   Tighter credit may result in consolidation                             Potential to increase market share;
   or exit of small regional marketers.                                   offset by higher credit costs
                                                                          Improved credit quality of
                                                    Neutral
   Large financial institutions entering
                                                                          potential counterparties; offset
   physical gas marketing and trading
                                                                          by increased competition and
   business (primarily acquisitions)
                                                                          lower margins
   New entrants and business growth                 Neutral               Talent loss risk; offset by strong
   creating highly competitive market for                                 culture and competitive
   talent                                                                 compensation package
   Sustained higher natural gas prices              Neutral               New sources of gas supply;
   supporting new drilling and production                                 offset by collections risk and
                                                                          working capital impact
                                                    Negative
   Increased storage and transportation                                   Requires greater asset
   lease costs                                                            optimization margins                    41




  Nonregulated Operations
   Business Mix

                 Core Business                    Core Business                       Growth Business
                                                 Asset Optimization                 Mid-Stream Development
                  Delivered Gas
Business
                                           Extract (optimize) the value of
           Aggregate & Purchase Gas                                              Gather, process and store
Services                                   owned, leased or managed
           Supply, Transport,                                                    producer volumes for
                                           storage and transportation
           Storage/Load Balancing,                                               downstream delivery to
                                           assets as markets provide
           Risk Management and other                                             markets.
                                           opportunities via price
           bundled services
                                           volatility
                                           Capture additional value of           Develop or acquire gathering,
Strategy   Find cost effective sources
                                           storage and transportation            processing or storage assets
           of gas and deliver to
                                           assets thru arbitrage and             that will provide steady,
           customers reliably and at a
                                           segmenting strategies,                predictable income and support
           competitive price.
                                           within risk limits.                   marketing opportunities.
           Provide creative solutions
                                           Expand leased storage and             Reduce gas costs through
           and services to meet
                                           transportation capacity thru          value-added services provided
           customers gas requirements
                                           new customer relationships            to producers.
           More predictable margins
                                           Variable margins, with upside.        Stable, fee-based income.
Margins    from primarily 90 day to 365
                                           Driven by gas price volatility        Driven by gathering,
           day contracts
                                           creating arbitrage potential,         processing, and storage
           Driven by customer demand       physical storage capabilities,        services.
           for gas volumes, services       costs and available storage
           and competition.                and transport capacity.
                                                                                                                  42
Nonregulated Operations
   Atmos Energy Marketing – Business Flow

 Aggregate and Purchase             Transportation and Storage Logistics   Sales to Markets




                                 Base Commodity
Marketing Transactions       - Fixed Price
                                     - Hedge forward
                                                                                    Customers
                                     - Current Month
- Baseload sales                                                                  (approx 1,100)
                             - Index Price
- Bundled sales                                                               • Utilities
                                     - Flat/Plus/Minus
- Peaking sales
                                                                              • Municipals
                             Storage/Transport/Basis
- Balancing services
                                                                              • Industrials
- Risk Management            - Asset Managed
                                                                              • Marketers
- Other
                             - Proprietary                                    • Power Generators
                                                                              • Large Commercial




                                                                                                   43




  Nonregulated Operations
   Atmos Energy Marketing - Target Growth Markets



    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




                                                                                                   44
Nonregulated Operations
  Atmos Energy Marketing – Asset Optimization


  The portfolio of assets (transportation & storage) that AEM manages is leased or
  derived from various asset management transactions with 3rd parties. These assets
  are utilized to capture value and create commercial opportunities.




                                                                            +                     Transportation Assets
                   Storage Assets
                  Storage Assets
            Optimize value by trading to                                                             Optimize value by
            Optimize value by trading to
               capture time and location                                                          segmenting capacity and
              capture time and location
                  price differentials
                 price differentials                                                                      supply



                                                                                                 Proprietary
                                            Asset Management
 Source:
                                                                                      No customer obligation
                                            Customer obligation
                                                                                         100% optionality
                                             Partial optionality
                                                                                                                                                               45




Nonregulated Operations
 Atmos Energy Marketing – Leased & Managed Assets
                                                                                                               AEM manages 1.8 Bcfd of firm pipeline
                                                                                                               capacity for customers covered by 179
                                                                                                               contracts
                                 1                                                    2
                                                                                                               AEM manages approximately 52 Bcf of
                                                                 Louisville                                    storage on 19 major interstate pipelines
                                                          Owensboro                                            covered by 182 customer contracts
                                                                                           3
                                       71
                                                                                                                               Transport       Storage (Bcf)
                                                                                                                       4
                               58 &
                                        4                              Franklin
                                59
                                                                                                                ANR                  3,000              0.28
                                                  5                                                             Atmos-TX                   -            3.50
                            Dallas
                                                                   6                                            NGPL                       -            0.16
                               Houston                                                                          Total               3,000              3.95
                                                 New Orleans
                                                                                                                      5        Transport       Storage (Bcf)
                                                                                                                CGT                 57,000                 -
                                                                                                                Egan                       -            1.50
     Owned Storage
                                                                                                                Tetco               40,000              1.18
                                                           1
     Primary Office Location                                            Transport     Storage (Bcf)
                                                                                                                TGP (z1)           210,000              4.74
     Distributed Generation                           Southern Star        172,000                  5.52
                                                                                                                Total             307,000              7.42
        2       Transport   Storage (Bcf)
                                                      Total               172,000                   5.52
Dominion                -              0.85                                                                        6
                                                                                                                                 Transport     Storage (Bcf)
National Fuel       2,000              0.42                    3         Transport        Storage (Bcf)         Gulfsouth          425,000              5.42
Columbia Gas       27,000              1.87           E. Tennessee          310,000                 0.81        Gulfsouth-NO               -            5.40
Tetco (m2)         20,000              0.40                                                                     Centerpoint         50,000                 -
                                                      Sonat                  70,000                 1.50
                                                                                                                LIG                 80,000              0.60
TGP (z2)           38,000              2.13           Transco                15,000                 0.60
                                                                                                                Bridgeline          30,000              0.30
Texas Gas         187,000             13.33           Trunkline              48,000                 1.09
                                                                                                                Acadian             10,000              0.45
                                                      Total                443,000                 4.00
Total            274,000              19.00
                                                                                                                Total             595,000              12.17
                                                                                                                                                               46
Nonregulated Operations
     Atmos Energy Marketing – Margin Composition
                                                                                                                                2008E
                                                                     Impacted by customer volume demand
                                                                     Sales prices are:
                                   Delivered Gas
                                  Delivered Gas                          • Cost plus profit margin
                                                                                                                               60% - 70%
                                                                         • Cost plus demand charges
                    (Bundled gas deliveries &
                   (Bundled gas deliveries &
                         peaking sales)
                        peaking sales)                               Margins: More predictable

                                                                     Impacted by gas price spread values
                                                                     in the market (arbitrage opportunity) &
                                                                     MTM accounting treatment
                                                                     Physical storage capabilities
                  Asset Optimization                                                                                           30% - 40%
                 Asset Optimization                                  Available storage and transport
                                                                     capacity
                 (Storage & transportation                               • 12.9 Bcf proprietary contracted capacity
                (Storage & transportation
                       management)                                       • 39.1 Bcf customer-owned / AEM-managed
                      management)
                                                                           storage
                                                                 Margins: More variable
                                          =
                                                                     Total margins reflect:
                                                                     Stability from delivered gas margins
                                    Total AEM
                                   Total AEM                                                                              Stable with potential
                                                                     Upside from optimizing our storage
                                     Margins
                                    Margins                                                                                      upside
                                                                     and transportation assets to capture
                                                                     arbitrage value
                                                                                                                                            47




 Nonregulated Operations
    Delivered Gas Volumes Continue Growth Trend



                                                                                                          Key Growth Drivers
                                    500
     Consolidated Sales Volumes




                                                                                    415-450
                                                                           371
                                    400
                                                                                                        Retain existing customers
                                                                284
                                    300                238
                                              223                                                       Saturate existing markets
                BCF




                                                                                                        Expand into targeted growth
                                    200
                                                                                                        markets (Texas, Alabama, etc.)
                                    100
                                                                                                        Expand asset management
                                      0
                                                                                                        business
                                          2004       2005     2006       2007     2008E
                                                                                                        Unit margin expansion from
                                                                 0.31
                                                                                                        premium value-added services
                                   0.30                0.25
Consolidated Delivered Gas




                                              0.23                                                      provided to customers
                                                                                                        Access to storage assets
     (cents per Mcf)
       Unit Margins




                                                                           0.15
                                   0.20                                              0.14
                                                                                                        Gas price volatility
                                   0.10


                                   0.00
                                          2004       2005     2006      2007      2008E
                                                                                                                                            48
Nonregulated Operations
Atmos Pipeline & Storage – Owned Asset Mix
 Storage
         Atmos Pipeline & Storage (AP&S) owns 2 reservoir storage locations in Kentucky and
         a 25% interest in a salt storage in Louisiana. Total usable capacity of 3.9 BCF
           •         East Diamond with 2.2 BCF of usable capacity
           •         Barnsley 1.3 BCF of usable capacity
           •         Napoleonville is a salt storage facility located in Louisiana. AP&S (through Trans Louisiana
                     Gas Storage) owns a 25% interest in Napoleonville (Acadian owns the remaining 75% and
                     manages the facility). AP&S’s interest is 0.4 BCF
 Pipeline
         AP&S owns a 21 mile pipeline (24-inch with 270,000 per day capacity) that has receipt
         interconnects with Gulf South, Bridgeline, Acadian and Columbia Gulf interstate
         pipelines
         This pipeline has the ability to deliver to Atmos distribution affiliates, a few industrial
         customers, an Entergy power plant, and Entergy’s LDC in New Orleans
 Growth Drivers
         Strategic location
         Preferred provider to LDC’s
         Expand asset management business
         Access to storage and transportation assets
         Gas price volatility                                                                                                                                       49




Nonregulated Operations
Atmos Pipeline & Storage – Trans Louisiana Gas Pipeline
                              Storage held on upstream pipelines: Bridgeline, Acadian, Gulf South

                                                                                                                    Entergy Louisiana
                                                                                                                    Entergy Louisiana
                                                                                                                      (TLGP Sales)
                                                                                                                       (TLGP Sales)
                                                                                                                      S5,T13S,R20E
                               Gulf South Pipeline                                                                    S5,T13S,R20E
                               Gulf South Pipeline
                                S48,T13S,R21E
                                 S48,T13S,R21E                                                                   Atmos Energy Louisiana
                                                                                                                 Atmos Energy Louisiana
                                                                                                                      S5,T13S,R23E
                                                                                                                       S5,T13S,R23E


                  Acadian Gas Pipeline
                  Acadian Gas Pipeline
                    S48,T13S,R21E
                     S48,T13S,R21E


                                                                                                                                                          AEL 18”


                                                                                             TLGP 24”




Bridgeline Gas
 Bridgeline Gas
   (Paradis)                                                                                                                              TLGP 16”
    (Paradis)
S39,T14S,R20E
S39,T14S,R20E                                                 Future Interconnect
                                                              Future Interconnect
                                                                Columbia Gulf
                                                                 Columbia Gulf
                                                                                                                                          S24,T13S,R23E




                                                                                     TLGP Pipeline
                                                                                    TLGP Pipeline
                                                 B’line 14”




                                                                                                                               N

Metropolitan New Orleans Area                                                       21 Miles of 24” TLGP Pipe
Metropolitan New Orleans Area                                                                                           W            E
                                                                                    .95 Miles of 12” TLGP Pipe
  TLGP Transmission // TLGP Sales Points
  TLGP Transmission TLGP Sales Points
                                                                                                                               S                                    50
Nonregulated Operations
Business Development Strategy


Overall Strategy: Develop or acquire assets in markets where Atmos
Energy already has a strategic presence to create value multiple ways

           Capture return from initial Investment (fee-based income)

           Leverage asset position to extract additional value for Marketing and
           Asset Optimization businesses.




                                                    Additional Value creation
    Initial Value captured
   Initial Value captured
                                                     Margins generated by Marketing
                                       $
   Return on asset                                   and Asset Optimization (storage
  Return on asset
   investments (fee-based
  investments (fee-based                             arbitrage, new customers, etc)
   income)
  income)

                                                                                       51




Nonregulated Operations
Business Development Strategy

Overall Strategy: Develop or acquire assets with operational
flexibility, for example

    Multi-turn / high deliverability salt storage
    Pipelines (multiple interconnects, high take-away receipt/delivery
    points, segmenting flexibility, etc.)


The following options will be considered in effectuating the
Nonregulated strategy:

    Greenfield development projects
    Partnership with other companies that have expertise and/or assets
    Acquire interest in third party storage and transportation assets

                                                                                       52
Nonregulated Operations
Business Development Strategy


              Currently, over 15 potential projects under review
              Includes gathering, light processing, pipeline and
              storage projects
              Capital investment ranges between $3 million to
              $300 million per project, some are multi-year
              projects
              Fiscal 2008 budget includes approximately $33
              million for development of these identified projects
              Currently, the Park City Gathering Project is under
              construction in Western Kentucky

                                                                     53




Nonregulated Operations
Park City Gathering Project

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

The gas contains approximately
16% nitrogen and will be treated
by a facility, jointly constructed
and owned by Atmos and HNNG,
with participation agreements
currently being finalized

Approximately 72% complete on
11/1/07, with start-up expected
March 2008

Estimated total cost of about $10
million. $3 million of capital
spent in fiscal 2007and about $7
million expected in fiscal 2008




                                                                     54
Nonregulated Operations
                Cash Flow Coverage of Working Capital Needs



                                                                                                                                                                                     AEM has a $580 million
                                                                                                                                                                                     uncommitted demand
                180,000
                                                                                                                                                                                     working capital credit
                                                                                                                                                                                     facility
                130,000
($ thousands)




                                                                                                                                                                                     Used primarily for Letters of
                 80,000
                                                                                                                                                                                     Credit and also for working
                                                                                                                                                                                     capital needs
                 30,000

                                                                                                                                                                                     Scheduled to be renewed
                 (20,000)
                                                                                                                                                                                     and extended prior to
                                                                                                                                                                                     March 31, 2008 termination
                 (70,000)

                (120,000)
                            D e c -0 4

                                         M a r-0 5

                                                     J u n -0 5

                                                                  S e p -0 5

                                                                               D e c -0 5

                                                                                            M a r-0 6

                                                                                                        J u n -0 6

                                                                                                                     S e p -0 6

                                                                                                                                  D e c -0 6

                                                                                                                                               M a r-0 7

                                                                                                                                                           J u n -0 7

                                                                                                                                                                        S e p -0 7
                                         Working Capital                                    Cumulative CF from Operations
                                                                                                                                                                                                                     55




                                                     Financial Review




                                                                                             J. Patrick Reddy
                                                                                             Senior VP & Chief Financial Officer
                                                                                                                                                                                                                     56
Financial Review
          Earnings Per Share Compared to Company Guidance
          Reflects Management’s Commitment to Shareholders


              $2.25
                                                                                                                                                $1.95-$2.05
                                                                                                                                1.92
              $2.00
                                                                                                             1.82            $1.90-$2.00
$ per share




                                                                                          1.72
              $1.75                                                                                       $1.80-$1.90
                                                                        1.58
                                                    1.54                               $1.65-$1.75
                                 1.45
              $1.50                                                 $1.55-$1.60
                                                 $1.52-$1.58
                              $1.43-$1.60
              $1.25

              $1.00

              $0.75

              $0.50
                                 2002              2003               2004               2005               2006               2007              2008E
                                                                                                                                                                          57




         Financial Review
         Return on Invested Capital (ROIC*) Remains Strong


               18.0%
                                     16.4%

                                                                                15.5%
               16.0%
                                                           14.5%                                                                                14.4%

               14.0%
                                                                                                                           13.1%
                                                                                                     12.7%

               12.0%


               10.0%
                                   2003                 2004                  2005                 2006                 2007              5 Yr Avg

              *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.
                                                                                                                                                                          58
Financial Review
Times Interest Earned Ratios*


            3.5

                                                                                      3.00
                                          3.05
            3.0
                                                                           2.75
                                2.75
                                                      2.59
                      2.55                                       2.55
            2.5


            2.0


            1.5
                    2002       2003      2004       2005        2006      2007 2008E
            *The times interest earned ratio measures the ability to satisfy annual interest costs
                                                                                                     59




Financial Review
Weighted Average Cost of Debt Remains Low

           9.0
           8.0     7.4
                            6.9
           7.0                        6.4                                     6.1       6.1
                                                6.0                 5.9
 Percent




           6.0                                            5.6
           5.0
           4.0
           3.0
           2.0
           1.0
                 2001     2002      2003      2004      2005      2006      2007 2008E
                                                                                                     60
Financial Review
Net Liquidity Position Is Solid With Existing Credit Lines*


                                                                                                    1,340
                                                                                        1,346
              $1,500
                                                                         1,116
              $1,250
                                                                                            487
                                                                                 534
              $1,000                           786
 $ millions




                                                                   551
                                                            661
               $750                    214
                                                                                            853
                                                                                 812
                                                     156
                                 416
               $500                                               565
                                        574
                         149                         505
               $250
                          267

                 $0
                        2003           2004         2005          2006           2007     2008E

                                         Atm os Energy Corp.             Atm os Energy Holdings

                  * Subject to internal borrowing strategy and collateral limitations primarily at AEH
                                                                                                                           61




Financial Review
Managing Consolidated Operations and Maintenance Expense
Fiscal 2008 Expected to Increase at More Normalized Rate



                                                                                           O&M increasing at an
               $550                                  4.2%
                                              CAGR                                         average run-rate of 4.2%
                                                                         465 - 475
                                                            463                            since the TXU Gas
               $500                           433                                          acquisition
                                416
               $450                                                                        Approximately 60% of
$ millions




                                                                                           current O&M levels are
               $400                                                                        employee labor and benefits
                                                                                           related
               $350
                                                                                                • Employee merit
                                                                                                 increases expected to
               $300
                                                                                                 increase 3.5%
               $250                                                                             • Benefits expense
                                                                                                 increases at about 8.3%
               $200
                        2005            2006          2007         2008E


                                                                                                                           62
Financial Review
  Managing Pension, Post-Retirement & Other Benefits Expense


($ millions)

                                                    $61.4              Other
                               $56.7
 $70.0
                                                                       Medical & Dental
 $60.0
                                                                       Post-Retirement
                                      11.9
                     11.3
 $50.0                                                                 Pension
 $40.0
                                      25.8
                     21.0
 $30.0                                                            2008 Pension Assumptions
                                                                  8.25% return on plan assets
 $20.0               13.6             14.3                        6.30% discount rate
                                                                  4.00% wage increase
 $10.0
                                       9.4
                     10.8
  $0.0
                     2007         2008E

                                                                                                63




   Financial Review
   Natural Gas Distribution Bad Debt Expense as a % of Revenues
   Below Industry Average

               1.0                                                       2008E bad
                                                                       debt expense
                       0.83                                            is $20 million




                                                                0.61         0.60
                                                        0.58
                                             0.58
     Percent




               0.5
                               0.29




               0.0
                     2003     2004       2005         2006     2007     2008E
                                                                                                64
Financial Review
Nonregulated Atmos Energy Marketing
Delivered Gas and Asset Optimization Margins Remain Steady

                150.0                                                                 Delivered Gas Margins (previously referred
                                                130.6
                                                                                      to as realized marketing margins) have
                130.0
                                                                                      remained fairly constant at about $60
                                         17.2                  104.3
                                                                                      million, with the exception of Fiscal 2006
                110.0                                                    90.0-100.0   due to effect of Hurricane Katrina
                                         26.2
                                  62.0
                                                        18.4
 ($ millions)




                                                                                      Asset Optimization Margins ( previously
                 90.0
                                                                                      referred to realized storage margins)
                                                                        30.0-35.0
                         28.0                           28.8                          trending between $25 million - $30 million
                 70.0
                                                                                      annually
                 50.0
                                                                                      Fiscal 2008 marketing segment margins
                                         87.2
                                                                                      are expected to be between $90 million
                         60.0                           57.1            60.0-65.0
                 30.0
                                                                                      and $100 million, excluding any mark-to-
                                                                                      market impact
                 10.0
                                                                                      Mark-to-Market Impact is recognized in
                                                                                      Unrealized Margins and an example of the
                (10.0)   (26.0)
                                                                                      accounting can be found in the appendix
                                                                                      to this presentation.
                (30.0)
                         2005            2006           2007           2008E

                  Delivered Gas      Asset Optimization          Unrealized Margins



                                                                                                                                   65




Financial Review
Consolidated Earnings Guidance – Fiscal 2008E

Atmos Energy anticipates earnings to be in the range of
$1.95 - $2.05 per fully diluted share for the 2008 fiscal year
Assumptions include:
       • Contribution from natural gas marketing segment reflecting less
         volatility in gas prices
                  o Total expected gross margin contribution from the marketing segment in
                    the range of $90 million to $100 million
       •        Continued successful execution of rate strategy and collection efforts
       •        Normal weather
       •        Bad debt expense of no more than $20 million
       •        Average annual short-term interest rate @ 6.5%
       •        Average gas cost ranging from $7.95 - $10.00 per mcf
       •        No material acquisitions
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.
                                                                                                                                   66
2007_NY-printable
2007_NY-printable
2007_NY-printable
2007_NY-printable
2007_NY-printable
2007_NY-printable
2007_NY-printable
2007_NY-printable
2007_NY-printable

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2007_NY-printable

  • 1. Atmos Energy Corporation Analyst Conference December 2007 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. 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. 2
  • 2. Management Participants Robert W. Best - Chairman, President & CEO J. Patrick Reddy - Senior VP & CFO Kim Cocklin - Senior VP, Regulated Operations Mark H. Johnson - Senior VP, Nonregulated Operations Susan Giles- VP, Investor Relations 3 Atmos Energy Today Robert W. Best Chairman, President & CEO 4
  • 3. Overview Company Profile The nation’s largest pure-gas distribution company Solid financial foundation Track 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, natural gas distribution earnings capability • Complement core distribution business through select nonregulated operations 5 Overview Scope of Operations Regulated gas distribution operates in 12 states (gold) Nonregulated operates in 22 states (gray) 6
  • 4. Overview Atmos Energy Corporation Atmos Energy Corporation (Regulated Operations) (Regulated Operations) Atmos Energy Holdings, Inc. Atmos Energy Holdings, Inc. Gas Distribution Divisions Gas Distribution Divisions Transmission & Storage (Nonregulated Operations) Transmission & Storage (Nonregulated Operations) Colorado-Kansas Colorado-Kansas Atmos Energy Marketing Atmos Energy Marketing Kentucky/Mid-States Kentucky/Mid-States • • Marketing Marketing • • Asset Optimization Asset Optimization Louisiana Louisiana Atmos Pipeline, Storage Atmos Pipeline, Storage Mid-Tex Mid-Tex & Other & Other • • Non-Texas Assets (Storage & Pipeline) Mississippi Non-Texas Assets (Storage & Pipeline) Mississippi • • Midstream Midstream • • Other Other West Texas West Texas Atmos Pipeline -Texas Atmos Pipeline -Texas 7 Overview Successful Acquisition History Acquisition Company Customers Purchase Date Acquired Acquired Price $ (000s) 1986 Trans Louisiana Gas 69,000 44,100 1987 Western Kentucky Gas 147,000 85,100 1993 Greeley Gas Company 98,000 111,717 1997 United Cities Gas Co 307,000 469,485 2000 ANG Missouri Assets 48,000 32,000 2001 55% interest in Woodward - 26,657 2001 Louisiana Gas Service 279,000 363,399 2002 Mississippi Valley Gas 261,500 220,200 2004 ComFurT Gas Inc. 1,800 2,000 2004 TXU Gas Company 1,500,000 1,916,696 8
  • 5. Overview Diluted Earnings Per Share Contribution Shows Steady Growth % R 6.1 $1.95-$2.05 CAG $1.92 $2.10 $1.82 $1.72 $1.58 $1.80 0.59-0.61 Nonregulated 0.69 0.34 $1.50 Operations 0.84 0.42 $1.20 Regulated Operations $0.90 1.36-1.44 1.38 1.23 $0.60 1.16 0.98 $0.30 $0.00 2004 2005 2006 2007 2008E 9 Overview Regulated Operating Income Moving Towards Historic Levels Estimated to be 80% in Fiscal 2008 1% 4% 5% 4% 100% 12% Nonregulated Pipeline, 16% 19% 27% Storage & Other 80% 19% 20% Nonregulated Natural Gas 20% 16% 60% Marketing Regulated Transmission 68% 40% 60% & Storage 53% 56% Regulated Gas 20% Distribution 0% 2005 2006 2007 2008E 10
  • 6. Overview Successfully Executing on the Rate Strategy GRIP/ Purchased Accelerated Decoupling/ Gas Cost Number of Percentage Gas Cost Capital Rate Bad Debt Customers of Total Adjustments WNA Recovery Stabilization Recovery 4 1,800,000 Texas 57% Partial Louisiana 350,000 11% Mississippi 270,000 8% Remaining 1 2 3 5 Jurisdictions 770,000 24% Partial Partial Partial Partial means applicable within certain jurisdictions within the category. 1 Excludes Colorado, Iowa and Illinois for a total of 137,657 customers. 2 Includes Missouri, Kansas and Georgia for a total of 258,102 customers. 3 Includes Missouri for a total of 59,672 customers. 4 Includes Amarillo for a total of 69,772 customers. 5 Includes Kansas and Virginia for a total of 151,545 customers. 11 Overview Annual Dividend for the Years 1984 – 2008E $1.30E $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 '8 '8 '8 '8 '8 '8 '9 '9 '9 '9 '9 '9 '9 '9 '9 '9 '0 '0 '0 '0 '0 '0 '0 '0 '0 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 Note: Amounts are adjusted for mergers and acquisitions. For fiscal 2008, $1.30 is the indicated annual dividend. 12
  • 7. Overview Dividend Payout Ratio Has Improved Payout Dividend / Share 85% $1.50 81% 80% $1.40 78% 77% 1.30 1.28 75% $1.30 1.26 72% 69% 1.24 70% $1.20 1.22 1.20 1.18 63-67% 66% 65% $1.10 60% $1.00 2002 2003 2004 2005 2006 2007 2008E Current Dividend Yield Approximately 5% Average LDC Payout Ratio = 65% 13 Overview Improved Debt Capitalization Ratio Achieved Stated Goal of 50-55% 65 (TXU Gas) 60.9% 59.3% 60 55 53.6% 53.7% 50 45 43.3% 40 Fiscal 2003 Fiscal 2004 Fiscal 2005* Fiscal 2006 Fiscal 2007 * TXU Gas acquisition effective 10/1/04 14
  • 8. Overview Investment Grade Credit Ratings Moody’s Rating Senior Unsecured Debt: Baa3 Commercial Paper: P-3 Outlook: stable Standard & Poor’s Senior Unsecured Debt: BBB Commercial Paper: A-2 Outlook: positive Fitch Senior Unsecured Debt: BBB+ Commercial Paper: F-2 Outlook: stable 15 Overview In Summary: Achievements and Priorities Fiscal 2007 Achievements (1) Increased earnings per share by 5.5% (2) Paid cash dividends for the 23rd consecutive year (3) Regained debt capitalization target of 50-55% (4) Received $40 million of rate increases in regulated operations (5) Commenced Park City low-pressure gas gathering project in Kentucky Fiscal 2008 Priorities (1) Deliver earnings objective of $1.95 - $2.05 per diluted share (2) Preserve our progress in strengthening the balance sheet (3) Seek improved rate design mechanisms to cure earnings deficiencies in regulated operations (4) Identify, review, and develop internal projects in nonregulated businesses that provide above-average financial returns 16
  • 9. Regulated Operations Kim Cocklin Senior VP, Regulated Operations 17 Regulated Operations Atmos Energy Corporation Atmos Energy Corporation (Regulated Operations) (Regulated Operations) Atmos Energy Holdings, Inc. Atmos Energy Holdings, Inc. Gas Distribution Divisions Gas Distribution Divisions Transmission & Storage (Nonregulated Operations) Transmission & Storage (Nonregulated Operations) Colorado-Kansas Colorado-Kansas Atmos Energy Marketing Atmos Energy Marketing Kentucky/Mid-States Kentucky/Mid-States • • Marketing Marketing • • Asset Optimization Asset Optimization Louisiana Louisiana Atmos Pipeline, Storage Atmos Pipeline, Storage Mid-Tex Mid-Tex and Other and Other • • Non-Texas Assets (Storage & Pipeline) Non-Texas Assets (Storage & Pipeline) Mississippi Mississippi • • Midstream Midstream • • Other Other West Texas West Texas Atmos Pipeline -Texas Atmos Pipeline -Texas 18
  • 10. Regulated Natural Gas Distribution Profit Drivers in the Distribution Business Regulated Gas Distribution Operates in 12 States (gold) Customer and meter growth Growing rate base • Estimated rate base at 9/30/07 was $3.4 billion Managing costs Executing our rate strategy 19 Regulated Natural Gas Distribution Mid-Tex Division Largest Atmos division; serves about 550 communities Largest natural gas distributor in Texas Over 28,300 miles of distribution pipe Weather normalization in place from November - April Accelerated capital recovery through annual GRIP filings $52 million rate case pending Authorized Effective Date Rate Base Authorized Debt/Equity of Last Rate Jurisdiction Meters ($ thousands) ROE Ratio Action Mid-Tex 1,518,119 1,043,857 10.00% 52/48 04/01/07 Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated. 20
  • 11. Regulated Natural Gas Distribution West Texas Division Serves about 80 communities Over 14,600 miles of distribution pipe Weather normalization in place from October - May Accelerated capital recovery through annual GRIP filings Recovery of gas cost portion of bad debt expense in Amarillo Authorized Effective Date Rate Base Authorized Debt/Equity of Last Rate Jurisdiction Meters ($ thousands) ROE Ratio Action Amarillo 69,772 36,844 12.00% 50/50 09/01/03 Lubbock 73,672 43,300 11.25% 50/50 03/01/04 West Texas 165,919 87,500 10.50% 50/50 05/01/04 Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated in each jurisdiction. 21 Regulated Natural Gas Distribution Louisiana Division Serves about 300 communities Over 8,200 miles of distribution pipe Weather normalization in place from December - March Rates updated annually through stable rate filings Authorized Effective Date Rate Base Authorized Debt/Equity of Last Rate Jurisdiction Meters ($ thousands) ROE Ratio Action Trans LA 79,985 96,848 10.00 – 10.80% 52/48 04/01/07 LGS 277,497 207,587 10.40% 52/48 07/01/07 Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated in each jurisdiction. 22
  • 12. Regulated Natural Gas Distribution Mississippi Division Serves about 110 communities Over 6,400 miles of distribution pipe Weather normalization in place from November - April Rates updated annually through stable rate filings Authorized Effective Date Rate Base Authorized Debt/Equity of Last Rate Jurisdiction Meters ($ thousands) ROE Ratio Action Mississippi 270,980 196,801 9.80% 47/53 01/01/05 Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated. 23 Regulated Natural Gas Distribution Colorado-Kansas Division Serves about 170 communities Over 6,600 miles of distribution pipe Weather normalization in Kansas from October - May $5 million rate case pending in Kansas Authorized Effective Date Rate Base Authorized Debt/Equity of Last Rate Jurisdiction Meters ($ thousands) ROE Ratio Action Colorado 109,860 84,711 11.25% 52/48 07/01/05 Kansas 127,824 * * 03/01/04 * * Not included in state commission’s final decision. Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated in each jurisdiction. 24
  • 13. Regulated Natural Gas Distribution Kentucky/Mid-States Division Serves over 420 communities in 7 states Over 12,000 miles of distribution pipe Weather normalization in 4 states • Georgia from October - May • Kentucky from November - April • Tennessee from November - April • Virginia from January - December Decoupling rate mechanism in Missouri Accelerated capital recovery in Missouri and Georgia Recovery of gas cost portion of bad debt expense in Virginia Authorized Effective Date Rate Base Authorized Debt/Equity of Last Rate Jurisdiction Meters ($ thousands) ROE Ratio Action Georgia 70,606 62,380 10.13% 55/45 12/20/05 Illinois 23,342 24,564 11.56% 67/33 11/01/00 Iowa 4,455 5,000 11.00% 57/43 03/01/01 Kentucky 177,988 * * * 08/01/07 Missouri 59,672 * * * 03/04/07 Tennessee 133,715 186,506 10.48% 56/44 11/04/07 Virginia 23,721 30,672 9.50-10.50% 52/48 08/01/04 * Not included in state commission’s final decision. Meter count as of 9/30/07. Remaining rate statistics are as of the last rate case indicated in each jurisdiction. 25 Regulated Natural Gas Distribution Stabilizing Natural Gas Distribution Margin Sensitivity Weather Normalization Adjustment (WNA) for Mid-Tex and Louisiana divisions became effective for the 2006-2007 winter heating season, which reduced margin exposure to weather from 17 percent to 5 percent With the rate design changes effective for the 2007-2008 winter heating season, weather-sensitive margin is expected to be further reduced to about 3 percent 2004–2006 2006–2007 2007–2008E Heating Season Heating Season Heating Season (Post Mid-Tex) 3% 5% 17% 95% 97% 83% Non-Weather Sensitive Margin Weather Sensitive Margin * Non-weather sensitive margin includes weather-normalized margins, monthly fixed charges and gas consumption that is not correlated to weather - gas clothes dryer, gas water heater, gas cooking, etc. 26
  • 14. Regulated Natural Gas Distribution Gas Distribution Gross Profit per Meter $340 320-325 $320 $ per meter 299 299 $300 293 291 287 $280 271 $260 $240 2002 2003 2004 2005 2006 2007 2008E 11% 13% 6% 1% 4% Normal Normal warmer warmer warmer warmer colder 27 Regulated Natural Gas Distribution Managing Capital Expenditures at the LDC ($ millions) $254-$260 $250 $250 Depreciation Expense Capital Expenditures $51 $200 $200 $184 $150 $150 $91-$94 $100 $100 $50 $50 $0 $0 2002 2003 2004 2005 2006 2007 2008E Non-Growth Growth Depreciation 28
  • 15. Regulated Natural Gas Distribution Leading Efficiency Metrics vs. Peers Distribution O&M Expense Customers Served per Distribution Employee per Customer $250 800 $200 713 600 $202 588 $150 400 $119 $100 200 $50 0 $0 Atmos Energy Peer Group Avg. Atmos Energy Peer Group Avg. 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. 29 Regulated Operations Approved Annual Rate Increases in the Regulated Operations $60.0 $50 - $60 $50.0 $40.1 ($ Millions) $39.0 $40.0 2.9 1.4 $30.0 25.6 $18.6 34.3 $20.0 $16.2 2.8 5.7 $10.0 $6.3 15.8 11.6 1.8 10.5 4.5 3.3 $0.0 2003 2004 2005 2006 2007 2008-2012E Annual Mechanism GRIP General Rate Case Aggregate 30
  • 16. Regulated Operations Upside ROE Potential in Regulated Distribution and Pipeline Operations Regulatory Return on Equity % 10.0 ALLOWED ROE – 10.2% Regulatory lag, inflation, etc. 9.3 8.0 POTENTIAL ROE – 8.0 % 7.7 7.5 6.0 4.0 2.0 2005 2006 2007 ACTUAL Earned Regulatory ROE % Note: Calculations are based on regulatory accounting treatment and are not consistent with GAAP accounting 31 Regulated Transmission and Storage Atmos Pipeline -Texas 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 740 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 West Texas Division • 39 Bcf working gas capacity • 1.2 Bcf/d maximum withdrawal Mid-Tex Division • 270 MMcf/d maximum injection Atmos Pipeline-Texas Atmos Energy Headquarters 32
  • 17. Regulated Transmission and Storage Atmos Pipeline - Texas Business Flow Customers Margins Potential Risk Risk Management Atmos Mid-Tex Division Tariff Based Rates Weather Seamless Performance Industrial Tariff Based Rates Weather Strong Customer Service Credit Exposure Timely & Accurate Information Electric Generation Market Based Rates Weather Enforceable Contract Language ERCOT Strong Customer Service Competition Flexible Value Added Service Through System Market Based Rates Basis Differentials Timely Information Competition Marketing Excellence Available Capacity Market Knowledge Other Market Based Rates Basis Differentials Strong Customer Service Competition Volume Monitoring Available Capacity Market Knowledge Maintain/Increase Margins + Increased Throughput + Managed Risk Profile = Stable Earnings Growth 33 Regulated Transmission and Storage Atmos Pipeline - Texas Transportation Mix APT Revenue Sources APT Transport Volumes 2008E 2008E Mid-Tex Mid-Tex Elec Gen Elec Gen Other Transport Transport 7% 10% Other 14% 25% 49% 10% Industrial Industrial 4% 5% Pipeline-Thru Pipeline-Thru System System 51% 25% Firm storage and transportation services to Mid-Tex and other LDCs Interruptible transportation and ancillary services to other customer classes Capacity growth opportunities with timely recovery through GRIP • Provides reliability for Mid-Tex distribution customers Strategically positioned to serve growing producer needs in Texas 34
  • 18. Regulated Transmission and Storage Atmos Pipeline - Texas Growth Drivers 735-745 699 750 Growth Drivers Transportation Volumes 581 555 600 Pursue capacity and 547-550 compression growth 505 450 (Bcf) 411 opportunities such as Opelika 374 300 compressor relocation 150 1188-195 194 Increased through-system 181 170 volumes primarily from 0 2005 2006 2007 2008E producers in Barnett Shale Mid Tex Division Third Party Margin expansion through 200 172-177 ancillary services such as 163 Margin Composition 175 parking and lending, balancing, 141 138 150 ($millions) blending, and compression 78-81 78 125 64 60 Gas price volatility increasing 100 basis differentials between 75 94-96 85 Texas hubs 50 78 77 25 0 2005 2006 2007 2008E Tariff Based Market Based 35 Regulated Transmission and Storage Atmos Pipeline-Texas Recent Capacity Enhancement Projects Project Volume Start Date (MMcf/d) 225 1 North Side Loop Phase 1: December 2005 Phase 2: July 2006 Howard Compression 150 August 2006 Katy Compression 50 July 2006 1 Huckabay Compression 85 July 2007 150 2 DFW Airport September 2007 2 Opelika Compression >30 July 2008 Estimate 1 2007 partial year; 2008 full year 2 2008 partial year; 2009 full year 36
  • 19. Regulated Transmission and Storage Atmos Pipeline -Texas Opelika Project Project relocates idle compression from existing properties and provides much needed supply support to East Texas • Adds critical capacity for Mid-Tex winter load requirement • Secures industrial customers by providing gas source options Capital expenditure estimated at about $6 million Minimum estimated ROR of 12.8% 30,000 Mmbtu/d capacity 37 Regulated Transmission and Storage Barnett Shale y alle on V Cott sier Bos s d San Permian Location of gas supply basins 38
  • 20. Nonregulated Operations Mark Johnson Senior VP, Nonregulated Operations 39 Nonregulated Operations Organization Structure Atmos Energy Corporation Atmos Energy Corporation (Regulated Operations) (Regulated Operations) Atmos Energy Holdings, Inc. Atmos Energy Holdings, Inc. Gas Distribution Divisions Gas Distribution Divisions Transmission & Storage (Nonregulated Operations) Transmission & Storage (Nonregulated Operations) Colorado-Kansas Colorado-Kansas Atmos Energy Marketing Atmos Energy Marketing Kentucky/Mid-States Kentucky/Mid-States • • Marketing Marketing • • Asset Optimization Asset Optimization Louisiana Louisiana Atmos Pipeline, Storage Atmos Pipeline, Storage Mid-Tex and Other Mid-Tex and Other • Non-Texas Assets (Storage & Pipeline) • Non-Texas Assets (Storage & Pipeline) Mississippi • • Midstream Mississippi Midstream • • Other Other West Texas West Texas Atmos Pipeline -Texas Atmos Pipeline -Texas 40
  • 21. Nonregulated Operations Market Overview Business Reason Impact Positive Leases or manages storage Increased availability and demand for and pipeline assets pipeline and storage assets AEH has assets, experience Positive Dampened price volatility expected and proven strategy to capture arbitrage value as prices vary LNG business is ramping up with more Additional source of low cost Positive gas expected from imports supply for customers; AEM has large takeaway capacity in Gulf. Neutral Tighter credit may result in consolidation Potential to increase market share; or exit of small regional marketers. offset by higher credit costs Improved credit quality of Neutral Large financial institutions entering potential counterparties; offset physical gas marketing and trading by increased competition and business (primarily acquisitions) lower margins New entrants and business growth Neutral Talent loss risk; offset by strong creating highly competitive market for culture and competitive talent compensation package Sustained higher natural gas prices Neutral New sources of gas supply; supporting new drilling and production offset by collections risk and working capital impact Negative Increased storage and transportation Requires greater asset lease costs optimization margins 41 Nonregulated Operations Business Mix Core Business Core Business Growth Business Asset Optimization Mid-Stream Development Delivered Gas Business Extract (optimize) the value of Aggregate & Purchase Gas Gather, process and store Services owned, leased or managed Supply, Transport, producer volumes for storage and transportation Storage/Load Balancing, downstream delivery to assets as markets provide Risk Management and other markets. opportunities via price bundled services volatility Capture additional value of Develop or acquire gathering, Strategy Find cost effective sources storage and transportation processing or storage assets of gas and deliver to assets thru arbitrage and that will provide steady, customers reliably and at a segmenting strategies, predictable income and support competitive price. within risk limits. marketing opportunities. Provide creative solutions Expand leased storage and Reduce gas costs through and services to meet transportation capacity thru value-added services provided customers gas requirements new customer relationships to producers. More predictable margins Variable margins, with upside. Stable, fee-based income. Margins from primarily 90 day to 365 Driven by gas price volatility Driven by gathering, day contracts creating arbitrage potential, processing, and storage Driven by customer demand physical storage capabilities, services. for gas volumes, services costs and available storage and competition. and transport capacity. 42
  • 22. Nonregulated Operations Atmos Energy Marketing – Business Flow Aggregate and Purchase Transportation and Storage Logistics Sales to Markets Base Commodity Marketing Transactions - Fixed Price - Hedge forward Customers - Current Month - Baseload sales (approx 1,100) - Index Price - Bundled sales • Utilities - Flat/Plus/Minus - Peaking sales • Municipals Storage/Transport/Basis - Balancing services • Industrials - Risk Management - Asset Managed • Marketers - Other - Proprietary • Power Generators • Large Commercial 43 Nonregulated Operations Atmos Energy Marketing - Target Growth Markets 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 44
  • 23. Nonregulated Operations Atmos Energy Marketing – Asset Optimization The portfolio of assets (transportation & storage) that AEM manages is leased or derived from various asset management transactions with 3rd parties. These assets are utilized to capture value and create commercial opportunities. + Transportation Assets Storage Assets Storage Assets Optimize value by trading to Optimize value by Optimize value by trading to capture time and location segmenting capacity and capture time and location price differentials price differentials supply Proprietary Asset Management Source: No customer obligation Customer obligation 100% optionality Partial optionality 45 Nonregulated Operations Atmos Energy Marketing – Leased & Managed Assets AEM manages 1.8 Bcfd of firm pipeline capacity for customers covered by 179 contracts 1 2 AEM manages approximately 52 Bcf of Louisville storage on 19 major interstate pipelines Owensboro covered by 182 customer contracts 3 71 Transport Storage (Bcf) 4 58 & 4 Franklin 59 ANR 3,000 0.28 5 Atmos-TX - 3.50 Dallas 6 NGPL - 0.16 Houston Total 3,000 3.95 New Orleans 5 Transport Storage (Bcf) CGT 57,000 - Egan - 1.50 Owned Storage Tetco 40,000 1.18 1 Primary Office Location Transport Storage (Bcf) TGP (z1) 210,000 4.74 Distributed Generation Southern Star 172,000 5.52 Total 307,000 7.42 2 Transport Storage (Bcf) Total 172,000 5.52 Dominion - 0.85 6 Transport Storage (Bcf) National Fuel 2,000 0.42 3 Transport Storage (Bcf) Gulfsouth 425,000 5.42 Columbia Gas 27,000 1.87 E. Tennessee 310,000 0.81 Gulfsouth-NO - 5.40 Tetco (m2) 20,000 0.40 Centerpoint 50,000 - Sonat 70,000 1.50 LIG 80,000 0.60 TGP (z2) 38,000 2.13 Transco 15,000 0.60 Bridgeline 30,000 0.30 Texas Gas 187,000 13.33 Trunkline 48,000 1.09 Acadian 10,000 0.45 Total 443,000 4.00 Total 274,000 19.00 Total 595,000 12.17 46
  • 24. Nonregulated Operations Atmos Energy Marketing – Margin Composition 2008E Impacted by customer volume demand Sales prices are: Delivered Gas Delivered Gas • Cost plus profit margin 60% - 70% • Cost plus demand charges (Bundled gas deliveries & (Bundled gas deliveries & peaking sales) peaking sales) Margins: More predictable Impacted by gas price spread values in the market (arbitrage opportunity) & MTM accounting treatment Physical storage capabilities Asset Optimization 30% - 40% Asset Optimization Available storage and transport capacity (Storage & transportation • 12.9 Bcf proprietary contracted capacity (Storage & transportation management) • 39.1 Bcf customer-owned / AEM-managed management) storage Margins: More variable = Total margins reflect: Stability from delivered gas margins Total AEM Total AEM Stable with potential Upside from optimizing our storage Margins Margins upside and transportation assets to capture arbitrage value 47 Nonregulated Operations Delivered Gas Volumes Continue Growth Trend Key Growth Drivers 500 Consolidated Sales Volumes 415-450 371 400 Retain existing customers 284 300 238 223 Saturate existing markets BCF Expand into targeted growth 200 markets (Texas, Alabama, etc.) 100 Expand asset management 0 business 2004 2005 2006 2007 2008E Unit margin expansion from 0.31 premium value-added services 0.30 0.25 Consolidated Delivered Gas 0.23 provided to customers Access to storage assets (cents per Mcf) Unit Margins 0.15 0.20 0.14 Gas price volatility 0.10 0.00 2004 2005 2006 2007 2008E 48
  • 25. Nonregulated Operations Atmos Pipeline & Storage – Owned Asset Mix Storage Atmos Pipeline & Storage (AP&S) owns 2 reservoir storage locations in Kentucky and a 25% interest in a salt storage in Louisiana. Total usable capacity of 3.9 BCF • East Diamond with 2.2 BCF of usable capacity • Barnsley 1.3 BCF of usable capacity • Napoleonville is a salt storage facility located in Louisiana. AP&S (through Trans Louisiana Gas Storage) owns a 25% interest in Napoleonville (Acadian owns the remaining 75% and manages the facility). AP&S’s interest is 0.4 BCF Pipeline AP&S owns a 21 mile pipeline (24-inch with 270,000 per day capacity) that has receipt interconnects with Gulf South, Bridgeline, Acadian and Columbia Gulf interstate pipelines This pipeline has the ability to deliver to Atmos distribution affiliates, a few industrial customers, an Entergy power plant, and Entergy’s LDC in New Orleans Growth Drivers Strategic location Preferred provider to LDC’s Expand asset management business Access to storage and transportation assets Gas price volatility 49 Nonregulated Operations Atmos Pipeline & Storage – Trans Louisiana Gas Pipeline Storage held on upstream pipelines: Bridgeline, Acadian, Gulf South Entergy Louisiana Entergy Louisiana (TLGP Sales) (TLGP Sales) S5,T13S,R20E Gulf South Pipeline S5,T13S,R20E Gulf South Pipeline S48,T13S,R21E S48,T13S,R21E Atmos Energy Louisiana Atmos Energy Louisiana S5,T13S,R23E S5,T13S,R23E Acadian Gas Pipeline Acadian Gas Pipeline S48,T13S,R21E S48,T13S,R21E AEL 18” TLGP 24” Bridgeline Gas Bridgeline Gas (Paradis) TLGP 16” (Paradis) S39,T14S,R20E S39,T14S,R20E Future Interconnect Future Interconnect Columbia Gulf Columbia Gulf S24,T13S,R23E TLGP Pipeline TLGP Pipeline B’line 14” N Metropolitan New Orleans Area 21 Miles of 24” TLGP Pipe Metropolitan New Orleans Area W E .95 Miles of 12” TLGP Pipe TLGP Transmission // TLGP Sales Points TLGP Transmission TLGP Sales Points S 50
  • 26. Nonregulated Operations Business Development Strategy Overall Strategy: Develop or acquire assets in markets where Atmos Energy already has a strategic presence to create value multiple ways Capture return from initial Investment (fee-based income) Leverage asset position to extract additional value for Marketing and Asset Optimization businesses. Additional Value creation Initial Value captured Initial Value captured Margins generated by Marketing $ Return on asset and Asset Optimization (storage Return on asset investments (fee-based investments (fee-based arbitrage, new customers, etc) income) income) 51 Nonregulated Operations Business Development Strategy Overall Strategy: Develop or acquire assets with operational flexibility, for example Multi-turn / high deliverability salt storage Pipelines (multiple interconnects, high take-away receipt/delivery points, segmenting flexibility, etc.) The following options will be considered in effectuating the Nonregulated strategy: Greenfield development projects Partnership with other companies that have expertise and/or assets Acquire interest in third party storage and transportation assets 52
  • 27. Nonregulated Operations Business Development Strategy Currently, over 15 potential projects under review Includes gathering, light processing, pipeline and storage projects Capital investment ranges between $3 million to $300 million per project, some are multi-year projects Fiscal 2008 budget includes approximately $33 million for development of these identified projects Currently, the Park City Gathering Project is under construction in Western Kentucky 53 Nonregulated Operations Park City Gathering Project 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 The gas contains approximately 16% nitrogen and will be treated by a facility, jointly constructed and owned by Atmos and HNNG, with participation agreements currently being finalized Approximately 72% complete on 11/1/07, with start-up expected March 2008 Estimated total cost of about $10 million. $3 million of capital spent in fiscal 2007and about $7 million expected in fiscal 2008 54
  • 28. Nonregulated Operations Cash Flow Coverage of Working Capital Needs AEM has a $580 million uncommitted demand 180,000 working capital credit facility 130,000 ($ thousands) Used primarily for Letters of 80,000 Credit and also for working capital needs 30,000 Scheduled to be renewed (20,000) and extended prior to March 31, 2008 termination (70,000) (120,000) D e c -0 4 M a r-0 5 J u n -0 5 S e p -0 5 D e c -0 5 M a r-0 6 J u n -0 6 S e p -0 6 D e c -0 6 M a r-0 7 J u n -0 7 S e p -0 7 Working Capital Cumulative CF from Operations 55 Financial Review J. Patrick Reddy Senior VP & Chief Financial Officer 56
  • 29. Financial Review Earnings Per Share Compared to Company Guidance Reflects Management’s Commitment to Shareholders $2.25 $1.95-$2.05 1.92 $2.00 1.82 $1.90-$2.00 $ per share 1.72 $1.75 $1.80-$1.90 1.58 1.54 $1.65-$1.75 1.45 $1.50 $1.55-$1.60 $1.52-$1.58 $1.43-$1.60 $1.25 $1.00 $0.75 $0.50 2002 2003 2004 2005 2006 2007 2008E 57 Financial Review Return on Invested Capital (ROIC*) Remains Strong 18.0% 16.4% 15.5% 16.0% 14.5% 14.4% 14.0% 13.1% 12.7% 12.0% 10.0% 2003 2004 2005 2006 2007 5 Yr Avg *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. 58
  • 30. Financial Review Times Interest Earned Ratios* 3.5 3.00 3.05 3.0 2.75 2.75 2.59 2.55 2.55 2.5 2.0 1.5 2002 2003 2004 2005 2006 2007 2008E *The times interest earned ratio measures the ability to satisfy annual interest costs 59 Financial Review Weighted Average Cost of Debt Remains Low 9.0 8.0 7.4 6.9 7.0 6.4 6.1 6.1 6.0 5.9 Percent 6.0 5.6 5.0 4.0 3.0 2.0 1.0 2001 2002 2003 2004 2005 2006 2007 2008E 60
  • 31. Financial Review Net Liquidity Position Is Solid With Existing Credit Lines* 1,340 1,346 $1,500 1,116 $1,250 487 534 $1,000 786 $ millions 551 661 $750 214 853 812 156 416 $500 565 574 149 505 $250 267 $0 2003 2004 2005 2006 2007 2008E Atm os Energy Corp. Atm os Energy Holdings * Subject to internal borrowing strategy and collateral limitations primarily at AEH 61 Financial Review Managing Consolidated Operations and Maintenance Expense Fiscal 2008 Expected to Increase at More Normalized Rate O&M increasing at an $550 4.2% CAGR average run-rate of 4.2% 465 - 475 463 since the TXU Gas $500 433 acquisition 416 $450 Approximately 60% of $ millions current O&M levels are $400 employee labor and benefits related $350 • Employee merit increases expected to $300 increase 3.5% $250 • Benefits expense increases at about 8.3% $200 2005 2006 2007 2008E 62
  • 32. Financial Review Managing Pension, Post-Retirement & Other Benefits Expense ($ millions) $61.4 Other $56.7 $70.0 Medical & Dental $60.0 Post-Retirement 11.9 11.3 $50.0 Pension $40.0 25.8 21.0 $30.0 2008 Pension Assumptions 8.25% return on plan assets $20.0 13.6 14.3 6.30% discount rate 4.00% wage increase $10.0 9.4 10.8 $0.0 2007 2008E 63 Financial Review Natural Gas Distribution Bad Debt Expense as a % of Revenues Below Industry Average 1.0 2008E bad debt expense 0.83 is $20 million 0.61 0.60 0.58 0.58 Percent 0.5 0.29 0.0 2003 2004 2005 2006 2007 2008E 64
  • 33. Financial Review Nonregulated Atmos Energy Marketing Delivered Gas and Asset Optimization Margins Remain Steady 150.0 Delivered Gas Margins (previously referred 130.6 to as realized marketing margins) have 130.0 remained fairly constant at about $60 17.2 104.3 million, with the exception of Fiscal 2006 110.0 90.0-100.0 due to effect of Hurricane Katrina 26.2 62.0 18.4 ($ millions) Asset Optimization Margins ( previously 90.0 referred to realized storage margins) 30.0-35.0 28.0 28.8 trending between $25 million - $30 million 70.0 annually 50.0 Fiscal 2008 marketing segment margins 87.2 are expected to be between $90 million 60.0 57.1 60.0-65.0 30.0 and $100 million, excluding any mark-to- market impact 10.0 Mark-to-Market Impact is recognized in Unrealized Margins and an example of the (10.0) (26.0) accounting can be found in the appendix to this presentation. (30.0) 2005 2006 2007 2008E Delivered Gas Asset Optimization Unrealized Margins 65 Financial Review Consolidated Earnings Guidance – Fiscal 2008E Atmos Energy anticipates earnings to be in the range of $1.95 - $2.05 per fully diluted share for the 2008 fiscal year Assumptions include: • Contribution from natural gas marketing segment reflecting less volatility in gas prices o Total expected gross margin contribution from the marketing segment in the range of $90 million to $100 million • Continued successful execution of rate strategy and collection efforts • Normal weather • Bad debt expense of no more than $20 million • Average annual short-term interest rate @ 6.5% • Average gas cost ranging from $7.95 - $10.00 per mcf • No material acquisitions 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. 66