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atmos enerrgy 16_slidepres

  1. 1. Conference Call to Review Fiscal 2006 First Quarter Financial Results February 8, 2006 8:00 a.m. EST
  2. 2. Forward Looking Statements The matters discussed or incorporated by reference in this presentation may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this presentation are forward-looking statements made in good faith by the Company and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this presentation or in any of the Company’s other documents or oral presentations, the words “anticipate,” “believes,” “estimate,” “expect,” “forecast,” “goal,” “intends,” “objective,” “plans” “projection,” “seek,” “strategy” or similar words are intended to identify forward- looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in this presentation, including the Company’s acquisition of the operations of TXU Gas, the Company’s ability to continue to access the capital markets and the other factors discussed in the Company’s SEC filings. These factors include the risks and uncertainties discussed in the Company’s Form 10-K for the fiscal year ended September 30, 2005. Although the Company believes these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. The Company undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise. 2
  3. 3. Consolidated Financial Results – Fiscal 2006 1Q Key Drivers Net Income Contribution of $33.5 million from Mid- Tex and Atmos Pipeline-Texas (APT) Divisions, an increase of $9.2 million quarter-over-quarter Weather was 7% warmer than normal but 7% colder than the prior-year quarter, as adjusted for jurisdictions with weather $100.0 normalized rates 19% $71.0 Rate adjustments and expanded WNA $59.6 $75.0 coverage in Mississippi Increased taxes, other than income, due $50.0 to higher franchise fees and higher gross receipts taxes resulting from higher gas prices $25.0 Increased interest expense due to higher average short-term debt balances and an $0.0 increase in the 3-month LIBOR rate 1Q 2005 1Q 2006 Decreased O&M expenses from elimination of outsourced administrative ($ in millions) and meter reading functions, offset in part by the impact of Hurricane Katrina and an increase in bad debt expense 3
  4. 4. Consolidated Financial Results – Fiscal 2006 1Q Earnings per Diluted Share Notes 11% $1.00 0.88 Quarter-over-quarter increase 0.79 of about 5 million weighted $0.80 average diluted shares outstanding $0.60 Increases in shares outstanding primarily due to 26 million shares issued in $0.40 July and October 2004 to partially fund the TXU Gas $0.20 acquisition 1Q 2005 1Q 2006 4
  5. 5. Consolidated Financial Results – Fiscal 2006 1Q Net Income by Segment $60.0 48.4 37.0 ($ in millions) $40.0 13.3 $20.0 11.5 11.1 9.1 0.2 (0.0) $0.0 1Q 2005 1Q 2006 Utility Natural gas marketing Pipeline and storage Other nonutility 5
  6. 6. Consolidated Financial Results – Fiscal 2006 1Q Drivers $24.5 million increase in gross profit $22.9 million increase in utility gross profit o $25.0 million increase primarily due to increased throughput of 6.9 Bcf, due to weather that was 7 percent colder than last year o $2.1 million decrease due to the impact of Hurricane Katrina 6
  7. 7. Consolidated Financial Results – Fiscal 2006 1Q Weather Adjusted for WNA Jurisdictions For the first quarter of fiscal 2006, weather was 7 percent warmer than normal, and 7 percent colder than the same period last year, as adjusted for jurisdictions with weather-normalized operations At December 31, 2005, we had WNA in the following service areas for the following periods as noted, which covered approximately 1.0 million of our meters in service: Tennessee November – April Georgia October – May Mississippi November – April* Kentucky November – April Kansas October – May Amarillo, TX October – May October – May West Texas Lubbock, TX October – May January – December Virginia *Effective in fiscal 2006, WNA period was 11/1 – 4/30. Prior to October 1, 2005, WNA period was 11/15 – 5/15. 7
  8. 8. Consolidated Financial Results – Fiscal 2006 1Q Utility Margin Sensitivity 2004–2006E 2003–2004 Heating Season Heating Season 35% 36% 48% 51% 13% 17% Weather Weather- Nonweather- Normalized Sensitive Margin Sensitive Margin 8
  9. 9. Consolidated Financial Results – Fiscal 2006 1Q Weather Effect by Utility Division ted es da a ky s t at ia n li xa x S tuc - Te so /K S Te uis d- n n d W. MS Mi Mi CO Ke Co Lo 10 • Gross profit in the 6% quarter was Percent (Warmer) Colder than Normal adversely affected 3% by $8.0 million due 3% 2% to weather that was 7% warmer than 0 normal, as adjusted 0 0 for jurisdictions with 1% 1% weather normalized rates 4% 5% • Louisiana and Mid- Tex Divisions do not 7% 7% have weather (10) normalized rates, and experienced warmer than normal weather of 5% and 17%, respectively 17% (20) Actual / Normal Adjusted for WNA 9
  10. 10. Consolidated Financial Results – Fiscal 2006 1Q Mid-Tex Division Estimated Annual Earnings Impact of Warmer Than Normal Weather* Percent Warmer than Normal 5% 10% 15% 20% $0.00 ($0.02) ($0.04) EPS Impact ($.05) ($0.06) ($0.08) ($.09) ($0.10) ($0.12) ($.12) ($0.14) ($0.16) ($.16) *Reflects changes in gross profit and related changes in bad debt and state and federal taxes 10
  11. 11. Consolidated Financial Results – Fiscal 2006 1Q Relationship of Diluted EPS to Heating Degree Days* Degree Days* EPS $1.00 1,750 $0.88 1,500 $0.79 $0.80 1,240 1,250 $0.60 $0.57 1,056 988 1,000 $0.40 750 $0.20 500 1Q 2004 1Q 2005 1Q 2006 *Adjusted for WNA 11
  12. 12. Consolidated Financial Results – Fiscal 2006 1Q Drivers $24.5 million increase in gross profit (continued) $2.2 million increase in pipeline and storage gross profit primarily due to 16.8 Bcf of increased transportation volumes largely at Atmos Pipeline – Texas, coupled with higher transportation services margins $0.5 million decrease in natural gas marketing gross profit primarily due to o $36.3 million decrease in unrealized mark-to-market gains on storage margins, primarily due to unfavorable movement in the prices used to mark physical storage inventory, coupled with an increase in storage inventory of 6.4 Bcf quarter-over-quarter o $21.5 million increase in realized storage contribution primarily due to favorable arbitrage spreads as a result of increased market volatility o $18.2 million increase in realized natural gas marketing margins primarily due to increased volumes sold of 11.2 Bcf quarter-over- quarter and capturing margins in certain market areas that experienced increased volatility o $3.9 million decrease in unrealized marketing margins 12
  13. 13. Consolidated Financial Results – Fiscal 2006 1Q Three Months Ended December 31 Natural Gas Marketing Segment 2005 2004 Change (In thousands, except storage balances) Storage Activities Realized margin $26,272 $4,776 $21,496 Unrealized margin (23,792) 12,519 (36,311) Total Storage Activities 2,480 17,295 (14,815) Marketing Activities Realized margin 29,567 11,414 18,153 Unrealized margin (5,728) (1,865) (3,863) Total Marketing Activities 23,839 9,549 14,290 GROSS PROFIT $26,319 $26,844 ($525) Net physical position (Bcf) 12.8 6.4 6.4 13
  14. 14. Consolidated Financial Results- Fiscal 2006 1Q Fair Value of Contracts at December 31, 2005 Maturity in Years Total Fair Source of Fair Value <1 1-3 4-5 >5 Value (In thousands) $(10,449) $ — $ — $ (25,233) Prices actively quoted $ (14,784) Prices provided by other external sources 4,323 388 — 4,711 — Prices based on models & other valuation methods (93) (480) — — (573) $(10,541) $ $ — $ (21,095) Total Fair Value $ (10,554) — 14
  15. 15. Consolidated Financial Results – Fiscal 2006 1Q Drivers Decreased O&M expenses of $2.6 million primarily due to $6.8 million decrease in contract labor due to lower 3rd party charges for outsourcing $3.9 million net increase in labor and benefits $2.1 million decrease due to absence of UCG acquisition- related M&I costs which became fully amortized in December 2004 $2.0 million increase in Hurricane Katrina related losses $1.2 million increase in provision for doubtful accounts primarily due to increased collection risk associated with higher gas prices 15
  16. 16. Consolidated Financial Results – Fiscal 2006 1Q Utility Bad Debt Expense as a Percent of Revenues 2.0 1.86 1.5 Percent 1.0 0.83 0.58 0.61 0.5 0.29 0.0 0.0 2001 2002 2003 2004 2005 2006 1Q 16
  17. 17. Consolidated Financial Results – Fiscal 2006 1Q Drivers Increased taxes, other than income, of $6.7 million Primarily due to increased franchise fees and state gross receipts taxes resulting from higher revenues Increased interest charges of $3.7 million $4.9 million increase primarily due to higher short-term debt balances used for natural gas purchases made at significantly higher prices coupled with an increase in the 3-month LIBOR rate, partially offset by $1.2 million decrease in interest charges from the early payoff of $72.5 million of First Mortgage Bonds in June 2005 17
  18. 18. Consolidated Financial Results – Fiscal 2006 1Q Pension, Post Retirement & Other Benefits Expense (in millions) $12.6 Other $11.1 $14.0 Medical & Dental $12.0 2.2 Post retirement $10.0 2.4 Pension 4.8 $8.0 4.3 $6.0 2006 Pension Assumptions $4.0 3.4 8.50% return on plan assets 3.2 5.00% discount rate $2.0 4.00% wage increase 2 .2 1.2 $0.0 1Q 2005 1Q 2006 18
  19. 19. Consolidated Financial Results – Fiscal 2006 1Q Capital Expenditures Utility CAPEX Nonutility CAPEX (in millions) (in millions) $40 $100 $30.1 $72.4 $65.9 $30 $75 14.7 $20 $50 53.2 46.7 $10 $25 $1.3 15.4 19.2 19.2 $0 $0 2005 1Q 2006 1Q 2005 1Q 2006 1Q Maintenance Growth Fiscal 2006 1Q Expenditures Maintenance Capital: $67.9 million 19 Growth Capital: $34.6 million
  20. 20. Highlights – Fiscal 2006 1Q Rate Stabilization Results - Mississippi October 3, 2005, Mississippi Public Utilities Staff reached an agreement with the Mississippi Division of Atmos Energy, requiring an up-front rate reduction of $600,000 effective October 1, 2005 and the following revisions: Annual filings to be made, effective November 1 each year, beginning September 5, 2006 New earnings sharing mechanism established 50/50 sharing of all earnings above allowed ROE for the first year Thereafter Atmos allowed to retain up to 250 additional basis points above ROE Calculated ROE plus a performance adjuster of up to 50 basis points (currently 9.8%) Shifts $10 million in annual margins from volumetric to customer charge Revised WNA to include approximately 4% of additional heating degree days Reduces regulatory lag, adjusts for forward-looking known and measurable expenses and utilizes an average expected rate base Changes affect approximately 251,000 customers 20
  21. 21. Highlights – Fiscal 2006 1Q GRIP Filings – State of Texas September 2005, Mid-Tex Division 2004 GRIP filing of $6.7 million related to return and capital-related expenses on $29 million increase in net investment during calendar 2004 • Approved by the Texas Railroad Commission in January 2006 • Implementation of new charges in February 2006 September 2005, Atmos Pipeline-Texas 2004 GRIP filing of $1.9 million revenue increase related to return and capital- related expenses on $10.6 million in net investment during calendar 2004 • Approved by the Texas Railroad Commission in December 2005 • Implementation of new charges in January 2006 September 2005, West Texas Division 2004 GRIP filing for $3.8 million on increase in net investment of $22.6 million • Implementation of new charges in January 2006, except for the inside city limits customers in the West Texas service area who rejected the filings. Filed appeal with the RRC which is still pending; expect approval in March 2006 21
  22. 22. Highlights – Fiscal 2006 1Q Energy Transfer Partners Agreement November 30, 2005, Atmos entered into agreement with Energy Transfer Partners, L.P., to jointly construct, own and operate a 45-mile, 30-inch pipeline in northern part of DFW Metroplex Energy Transfer will provide initial capital to build the pipeline Approximately 21 miles of pipeline was placed into service in December 2005; anticipate remainder of pipeline to be placed into service by March 31, 2006 Total of $19.2 million spent through December 31, 2005 $1.6 million spent in fiscal 2005; $17.6 million spent YTD in fiscal 2006, and $29.7 million additional expenditure expected for the remainder of fiscal 2006 Designed to meet present and future operational needs as a result of utility customer growth on the northern end of the Mid-Tex distribution system 22
  23. 23. Highlights – Fiscal 2006 1Q Credit Facilities October 18, 2005, Atmos Energy entered into a $600 million, 3 - year committed revolving credit facility through October 18, 2008 Replaces $600 million, 364-day working capital facility on essentially the same terms Serves as a backup liquidity facility for our commercial paper program November 10, 2005, Atmos Energy entered into a new $300 million 364-day committed revolving credit facility Supplements amounts available under existing $18 million committed credit facility and $25 million uncommitted credit facility under essentially the same terms as the $600 million 3-year committed revolving credit facility November 28, 2005, Atmos Energy Marketing (AEM) amended its $250 million uncommitted credit facility to a maximum of $580 million Expires March 31, 2006 Contains essentially same terms as previous credit facility 23
  24. 24. Highlights – Fiscal 2006 1Q 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: stable Fitch Senior Unsecured Debt: BBB+ Commercial Paper: F-2 Outlook: stable* * On January 13, 2006, Fitch upgraded outlook from “negative” to “stable” 24
  25. 25. Highlights – Fiscal 2006 1Q Quarterly Dividend On February 7, 2006, the Atmos Board of Directors declared a quarterly dividend of $0.315 per share 89th consecutive dividend declared To be paid on March 10, 2006, to shareholders of record on February 27, 2006 Indicated annual dividend of $1.26 per share 25
  26. 26. Consolidated Financial Results – Fiscal 2006E Annual Dividend Growth - 1984 to 2006E $1.26 $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 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 Note: Amounts are adjusted for mergers and acquisitions. For fiscal 2006, $1.26 is the indicated annual dividend. 26
  27. 27. Consolidated Financial Results – Fiscal 2006E Earnings Guidance – 2006 Fiscal Year Atmos Energy anticipates earnings to be in the range of $1.80 - $1.90 per fully diluted share for the 2006 fiscal year Updated assumptions include: • 30-year normal weather from February to September 2006 • Adverse impact of Hurricane Katrina on margin of between $10 million and $12 million • Greater contribution from nonutility businesses due to higher gas price volatility o Expect gross margin contribution from the marketing segment at the revised range of between $80 million to $90 million • Continued execution of rate strategy and collections efforts • Bad debt expense of no more than $20 million • Average short-term interest rate @ 4.5 % • No material acquisitions Capital expenditures are expected to be between $400 million and $415 million Note: Changes in these events or other circumstances that the company cannot currently anticipate could materially impact earnings, and could result in earnings for fiscal 2006 significantly above or below this outlook. 27
  28. 28. Consolidated Financial Results – Fiscal 2006E Selected Income Statement Components ($ in millions) 1200 2006E Consolidated 1000 ($ millions) 443-450 O&M $443 - $450 800 D&A $192 - $198 428 Interest $137 - $138 Income Tax $90 - $95 600 Net Income $148 - $156 192-198 178 215 400 205 158 137-138 133 140 97 87 200 82 90-95 82 68 65 64 59 47 52 42 148-156 35 33 136 86 72 60 56 0 01 02 03 04 05 6E 00 20 20 20 20 20 2 28
  29. 29. Consolidated Financial Results – Fiscal 2006E Estimated Capital Expenditures – 2006 Fiscal Year Utility CAPEX Nonutility CAPEX (in millions) (in millions) $127-$132 $301 $273-$283 $350 $140 $300 $120 37-39 $250 $100 211 183-189 $200 $80 $32 $150 $60 90-93 $100 $40 $50 30 90 90-94 $20 2 $0 $0 2005 2006E 2005 2006E Maintenance Growth Consolidated fiscal 2006 CAPEX projection is $400-$415 million 29
  30. 30. Consolidated Financial Results – Fiscal 2006E Minimizing Volatility Through Gas Supply Hedging For the 2005-2006 heating season, Atmos Energy is hedging approximately 46 percent of its expected winter gas utility supply requirements 22 percent are naturally hedged through a combination of owned underground storage assets and contract pipeline storage 24 percent is hedged through the use of financial derivatives (primarily futures and fixed forward contracts) We project the weighted-average cost for storage gas and financial contracts to be approximately $9.11 per Mcf. This compares to a weighted-average cost of approximately $6.23 per Mcf for the prior-year heating season Hedging provides relative protection to the company and its customers against volatility in gas prices Customers will pay a blended rate for gas costs Atmos Energy should be able to reduce the effects of higher gas prices on its customer receivables and working capital requirements 30
  31. 31. Consolidated Financial Results – Fiscal 2006E Pension, Post Retirement & Other Benefits Expense (in millions) Other $51.9 $60.0 Medical & Dental $44.3 $50.0 Post retirement 6.7 Pension $40.0 10.0 22.2 $30.0 16.8 $20.0 2006 Pension Assumptions 13.4 8.50% return on plan assets 12.8 $10.0 5.00% discount rate 9.6 4.00% wage increase 4.7 $0.0 2005 2006E 31
  32. 32. Consolidated Financial Results Fiscal 2006 1Q 32
  33. 33. Consolidated Income Statements – Fiscal 2006 1Q Three Months Ended December 31 (000s except EPS) 2005 2004 Operating Revenues: Utility Segment $ 1,405,010 $ 913,681 Natural Gas Marketing Segment 1,101,845 493,801 Pipeline and Storage Segment 39,712 43,690 Other Nonutility Segment 1,492 1,359 Intersegment Eliminations (264,239) (83,907) 2,283,820 1,368,624 Purchased Gas Cost: Utility Segment 1,124,829 656,370 Natural Gas Marketing Segment 1,075,526 466,957 Pipeline and Storage Segment - 6,221 Other Nonutility Segment - - Intersegment Eliminations (263,125) (83,027) 1,937,230 1,046,521 Gross Profit 346,590 322,103 Operation and Maintenance Expense 108,217 110,777 Depreciation and Amortization 43,260 43,997 Taxes, other than income 45,416 38,655 Miscellaneous Income 448 385 Interest Charges 36,189 32,542 Income Before Income Taxes 113,956 96,517 Income Tax Expense 42,929 36,918 Net Income $ 71,027 $ 59,599 Net Income Per Share: Basic $ 0.88 $ 0.79 Diluted $ 0.88 $ 0.79 Average Shares Outstanding: Basic 80,259 75,306 Diluted 80,722 75,725 33
  34. 34. Utility Operating Income – By Division - Fiscal 2006 1Q Three Months Ended December 31 2005 2004 Utility Operating Income Colorado-Kansas Division $ 8,610 $ 8,235 Kentucky Division 6,192 5,845 Louisiana Division 7,891 6,333 Mid-States Division 14,298 11,138 Mid-Tex Division 50,787 38,548 Mississippi Division 9,993 8,607 West Texas Division 6,131 5,786 Other 2,347 595 $ 106,249 $ 85,087 Total Utility Operating Income 34
  35. 35. Utility Volumes - Fiscal 2006 1Q Three Months Ended December 31 2005 2004 Change % Change Sales Volumes (MMcf) Residential 53,709 50,769 2,940 6% Commercial 29,139 27,863 1,276 5% Public authority and other 3,291 4,016 (725) (18%) Industrial 9,009 8,243 766 9% Irrigation 40 66 (26) (39%) Total 95,188 90,957 4,231 5% 30,602 27,978 2,624 9% Transportation (MMcf) Total Consolidated 125,790 118,935 6,855 6% Utility Volumes (MMcf) 35
  36. 36. Cash Flow Statements - Fiscal 2006 1Q Quarter Ended December 31 2005 2004 (000s) $ 71,027 $ 59,599 Net income Depreciation and amortization 43,407 44,251 Deferred income taxes 20,448 8,308 Other 3,680 977 Net change in operating assets and liabilities (333,931) (45,231) (195,369) 67,904 Operating cash flow Acquisitions - (1,912,532) Capital expenditures - growth (34,573) (19,230) Capital expenditures - non-growth (67,892) (47,971) Other, net (1,121) (1,051) (298,955) (1,912,880) Operating cash flow after investing activities Repayment of long-term debt (1,695) (3,373) Settlement of Treasury lock agreements - (43,770) Dividends paid (25,429) (24,521) Cash flow after acquisitions $ (326,079) $ (1,984,544) and growth capital 36
  37. 37. Capitalization - Fiscal 2006 1Q As of December 31 2005 2004 (000s) Short-term debt $ 474,059 11.0% $ 28,797 0.7% Long-term debt 2,184,783 50.9% 2,261,070 59.1% Shareholders' equity 1,637,617 38.1% 1,539,078 40.2% Total capitalization $ 4,296,459 100.0% $ 3,828,945 100.0% 37
  38. 38. As a Reminder… The audio and slide presentation of this conference call will be available on Atmos Energy’s Web site by 8:00 a.m. Eastern Standard Time on February 8, 2006, through midnight on May 5, 2006. Atmos Energy’s Web site address is: www.atmosenergy.com. To listen to the live conference call, dial 800-218- 0204 by 8:00 a.m. Eastern Standard Time on February 8, 2006. 38
  39. 39. Appendix 39
  40. 40. Atmos Energy Marketing - Storage Economic Value vs. GAAP Reported Results We commercially manage our storage assets by capturing arbitrage value through optimization strategies that create embedded (forward) value in the portfolio. We financially report the transactions for external reporting purposes in accordance with GAAP. GAAP Reported Value is the period to period net change in fair value of the portfolio reported in the income statement that results from the process of marking to market the physical storage volumes and corresponding financial instruments in an interim period. Economic Value is the period to period forward margin of our storage portfolio that results from the process of calculating our weighted average cost of inventory (WACOG), and our weighted average sales price of our forward financials (WASP), then multiplying the difference times inventory volumes. This margin will be realized in cash when the hedged transaction is executed or when financials are settled and then reset to stay hedged against physical volumes. Economic Value represents the “forward” economic margin of the transactions, while GAAP reported results reflect that portion of our “forward” margin that has been recorded in the income statement. Volatility in earnings includes the impact of the accounting treatment of our storage portfolio and is reflective of relatively high price volatility of the prompt month, and the relatively low volatility of the offsetting forward months. 40
  41. 41. Atmos Energy Marketing Economic Value vs. GAAP Reported Results Reported GAAP Economic Value* Reported GAAP Value (Commercial Value) Value - -Physical and Financial Physical and Financial - Physical and Financial Positions Positions Positions $7.1 MM ($38.6 MM) ($38.6 MM) Market Spread Embedded margin difference *Realizing Economic Value $45.7 MM is dependent on ability to execute – deliver physical gas & close financial hedges Support data appears on the following slide At December 31, 2005 41
  42. 42. Atmos Energy Marketing Economic Value vs. GAAP Reported Results Physical Economic Value (EV) GAAP Reported Value - MTM Market Spread ($ per mmbtu) Period Volume Total Total Total WASP WACOG EV ($ in millions) ($ per mmbtu) ($ in millions) ($ per mmbtu) ($ in millions) Ending (Bcf) 5.4 7.9121 5.6406 2.2715 (0.1394) 2.4109 9/30/2004 12.3 (0.8) 13.0 6.4 8.3569 6.3385 2.0184 1.8401 0.1783 12/31/2004 12.9 11.8 1.0 6.9 6.3466 4.4435 1.9031 (2.1502) 4.0533 9/30/2005 13.1 (14.8) 27.9 12.8 9.3918 8.8366 0.5552 (3.0094) 3.5646 12/30/2005 7.1 (38.6) 45.7 42
  43. 43. Atmos Pipeline - Texas Project Update CAPEX GRIP Filings * Actual Estimated Project 2005 2006 2005 2006 Northside Loop JV with Energy $1.6 million $47.3 million $15.2 million $33.7 million Transfer Enbridge --- Line/Corridor $4.0 million $17.8 million $21.8 million Compression Devon Line/ Corridor ---- ---- ---- ---- Compression Katy Capacity ---- Expansion/ $1.3 million $13.7 million $15.0 million Compression Total: $6.9 million $78.8 million $15.2 million $70.5 million Estimated total annual revenues are $15.0 million; of which $6.7 million are expected to occur in fiscal 2006. * Capital expenditures on a calendar year basis are included in GRIP filings when the asset is operational 43
  44. 44. Atmos Pipeline - Texas 44
  45. 45. Project Map North Side Loop Enbridge Compression 45
  46. 46. Trans Louisiana Gas Pipeline h ris rish Pa s Storage is held on upstream pipelines Orleans Pa rl e ha h .C ris St Jefferson Pa • 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) (Paradis) TLGP 16” S39,T14S,R20E S39,T14S,R20E Future Interconnect Future Interconnect Columbia Gulf Columbia Gulf S24,T13S,R23E TLGP Pipeline TLGP Pipeline B’line 14” October 26, 2001 N Metropolitan New Orleans Area Metropolitan New Orleans Area 21 Miles of 24” TLGP Pipe W E .95 Miles of 12” TLGP Pipe TLGP Transmission // TLGP Sales Points TLGP Transmission TLGP Sales Points 46 S

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