atmos enerrgy ato37_pres

Conference Call to Review
Fiscal 2007 Third Quarter
Financial Results

August 8, 2007
8:00 a.m. EDT

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,
2006. 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 2007 and beyond that
appear in this presentation are current as of the date noted on each relevant slide.
2

Consolidated Financial Results – Fiscal 2007 3Q

Net Loss

Key Drivers
20 percent increase in utility
26% throughput due to more
seasonable weather than last
$0.0 year
Increased pipeline and
($10.0) storage contribution primarily
due to a 19 percent increase
(13.4)
in throughput
($20.0) (18.1)
Rate increase adjustments,
primarily GRIP in Texas and
($30.0) Louisiana RSC
3Q 2006 3Q 2007
13 percent increase in O&M
expenses quarter over quarter
($ in millions)

3


Loss per Diluted Share

Notes
$0.10
Quarter over quarter increase
of about 7.5 million weighted
$0.00
average diluted shares
outstanding
($0.10) Increase in shares primarily
due to about 6.3 million shares
($0.15)
issued in December 2006
($0.20)
equity offering
($0.22)

($0.30)
3Q 2006 3Q 2007

4


Net Income (Loss) by Segment

7.7
$10.0 5.8

0.2
$5.0 0.2
($ in millions)

$0.0
(5.6)
($5.0) (5.1)

($10.0)
(15.7)
($15.0)
(19.0)
($20.0)
3Q 2006 3Q 2007
Utility Natural gas marketing
Pipeline and storage Other nonutility
5

Drivers
$23.5 million increase in gross profit
$20.8 million increase in utility gross profit primarily due to
o $18.9 million increase primarily due to increased throughput of 12.3
Bcf, due to weather that was more seasonable than the prior-year
period
o $ 4.1 million decrease due to WNA impact
• $1.0 million decrease in the Mid-Tex and Louisiana divisions
• $3.1 million decrease in remaining jurisdictions
o $ 6.9 million increase in revenue-related taxes – franchise fees and
gross receipts taxes paid by the customer, primarily in the Mid-Tex
division
o $ 6.7 million increase due to rate adjustments
• $4.5 million increase from Texas GRIP-related recovery for
2004 and 2005 GRIP filings
• $2.3 million increase from LGS and TransLa RSC filings in
Louisiana
• $0.6 million decrease from additional Mid-Tex GRIP refund
• $0.5 million increase from Missouri rate design changes
o $ 6.2 million decrease due to the absence of the deferred revenue
associated with 2003 Rate Stabilization Filing with Louisiana Public
Service Commission which was recognized in the prior-year quarter 6

Stabilizing Utility Margin Sensitivity
Weather Normalization Adjustment (WNA) for Mid-Tex and Louisiana divisions became effective for the 2006-
2007 winter heating season, which reduced our margin exposure to weather from 17 percent to 5 percent
The 17 percent exposure to weather negatively impacted our gross profit margin by about $15.3 million in the
fiscal 2006 third quarter.
In the current-year quarter, the 5 percent exposure to weather had a positive impact on our gross profit margin of
about $0.6 million
2004–2006 2006–2007
2003–2004
Heating Season
Heating Seasons
Heating Season
(Post-TXU Gas)
(Before TXU Gas)
9%
5%
35%
36%
48%
51%

86%
13% 17%

Weather Weather- Nonweather-
Normalized Sensitive Margin Sensitive Margin*

* Non-weather sensitive margin is gas consumption not correlated to weather, i.e., gas clothes dryer, gas water heater,
gas cooking, and includes monthly fixed charge 7


Drivers
$23.5 million increase in gross profit (continued)

$0.3 million increase in natural gas marketing gross profit primarily due to
o $41.1 million decrease in realized storage margins attributable to
financial hedge settlement losses associated with the deferral of
storage withdrawals, increased storage demand fees, increased park
and loan fees, and overall less favorable arbitrage spreads due to
less market volatility in the current quarter compared with the prior-
year quarter
o $38.9 million increase in unrealized storage margins (mark-to-
market) primarily due to the narrowing of the spreads between the
forward prices used to value financial hedges and the market (spot)
prices used to value the physical inventory. The mark-to-market
impact was magnified by a 2.5 Bcf increase in physical storage
inventory quarter-over-quarter
o $2.7 million decrease in realized marketing margins primarily due to
lower margins realized in a less volatile market, partially offset by
increased sales volumes of 19 Bcf quarter-over-quarter, due to
colder weather and a successful marketing strategy
o $5.2 million increase in unrealized marketing margins (mark-to-
market) primarily attributable to a favorable movement in the
forward natural gas prices associated with financial derivatives used
in these activities
8


Three Months Ended June 30
Natural Gas Marketing Segment 2007 2006 Change
(In thousands, except physical position)

Storage Activities
Realized margin ($33,376) $7,717 ($41,093)
Unrealized margin 16,998 (21,873) 38,871
Total Storage Activities (16,378) (14,156) (2,222)

Marketing Activities
Realized margin 9,999 12,691 (2,692)
Unrealized margin 5,803 579 5,224
Total Marketing Activities 15,802 13,270 2,532

GROSS PROFIT ($576) ($886) $310

Net physical position (Bcf) 21.5 19.0 2.5
9


Drivers

$ 2.2 million increase in pipeline and storage gross profit primarily
due to

o $2.8 million increase from a 19 percent increase in throughput
from North Side Loop and 3 other compression projects
completed in 2006 at Atmos Pipeline-Texas

o $0.7 million increase from rate adjustments related to Atmos
Pipeline-Texas 2005 GRIP filing

o $1.1 million decrease in reservation fees and demand and
deficiency fees, which are market-driven

10


Drivers
Increased O&M expenses of $14.0 million primarily
due to
$5.9 million increase primarily from higher labor and
benefits costs associated with increased headcount
and increased benefit costs
$5.7 million increase in administrative costs
(insurance, IT maintenance, vehicle lease expense)
$2.0 million increase from the absence in the current
period of the accrual reversal of Hurricane Katrina
losses in the prior- year quarter
$3.3 million increase for a one-time non-cash charge
to write off software that will no longer be used
11


Drivers
Increased taxes, other than income, of $4.4 million
Primarily due to increased franchise fees and state gross receipts
taxes due to increased revenues

Decreased interest charges of $1.4 million
Primarily due to lower average outstanding short-term debt
balances, partially offset by
28 basis point increase in the three-month LIBOR interest rate on
our $300 million unsecured floating rate senior notes paid in July
2007

Increased miscellaneous income of $3.3 million primarily due to a
$2.1 million increase primarily due to leasing certain mineral
interests owned by the pipeline and storage segment and
$1.9 million increase in interest income on higher average cash
and short-term investments

12


Pension, Post-Retirement & Other Benefits Expense

(in millions)
in )

Other
$15.2
$14.8
$18.0
Medical & Dental
$15.0 Post-Retirement
2.4 2.9
Pension
$12.0
6.2 6.1
$9.0
2007 Pension Assumptions
$6.0 8.25% return on plan assets
3.7 3.4 6.30% discount rate
$3.0 4.00% wage increase
2.8
2.5
$0.0
3Q 2006 3Q 2007

13


Capital Expenditures

Utility CAPEX Nonutility CAPEX
(in millions) (in millions)

$33.6
$40
$100 $78.8
$75.9

$30
$75
15.6
$11.4
$20
56.2
$50 54.7

$10
$25 18.0 10.9
22.6
21.2
0.5
$0
$0
2006 3Q 2007 3Q
2006 3Q 2007 3Q
Maintenance
Growth
Fiscal 2007 3Q Expenditures
Maintenance Capital: $67.1 million
Growth Capital: $23.2 million 14

Consolidated Financial Results – Fiscal YTD

Net Income Key Drivers
Increased contribution from the
pipeline and storage segment,
primarily from increased
throughput
Increased contribution from the
$174.4
23% natural gas marketing segment,
$200.0
largely due to higher unrealized
$141.7
$175.0 storage margins
11 percent increase in utility
$150.0
throughput due to 15 percent
$125.0 colder weather than last year
Net increase in utility margins
$100.0
primarily from GRIP rate
$75.0 adjustments in Texas and the
Louisiana RSC, effective in 2006
$50.0
Increased O&M expenses primarily
YTD 2006 YTD 2007
due to increased employee and
($ in millions) administrative costs

15

Earnings per Diluted Share

Notes
$2.25
$2.00
%
14 Year-to-date increase of about
$2.00
6.0 million weighted average
$1.75 diluted shares outstanding
$1.75 Increase in shares primarily
due to about 6.3 million shares
issued in December 2006
$1.50
equity offering

$1.25
YTD 2006 YTD 2007

16


Net Income by Segment

92.4
84.1
$100.0
($ in millions)

$80.0

40.4 41.6
$60.0

28.2 29.1
$40.0

0.0
$20.0 0.3

$0.0
YTD 2006 YTD 2007
Utility Natural gas marketing
Pipeline and storage Other nonutility
17

Drivers
$75.8 million increase in gross profit
$33.7 million increased utility gross profit primarily from
o $33.4 million increase primarily due to increased throughput of 36.1
Bcf, due to weather that was 15 percent colder than the prior-year
period
o $ 5.9 million net increase due to WNA impact
• $10.8 million increase in Mid-Tex and Louisiana divisions
• $ 4.9 million decrease in remaining jurisdictions
o $16.5 million net increase due to rate adjustments
• $13.9 million increase from Texas GRIP-related recovery for
2004 and 2005 GRIP filings
• $11.2 million increase from LGS and TransLa RSC filings in
Louisiana
• $2.9 million decrease from Mid-Tex GRIP refund
• $6.2 million decrease from 10/06 Tennessee rate reduction
• $0.5 million increase from Missouri rate design changes
o $6.2 million decrease due to the absence of the deferred revenue
associated with 2003 Rate Stabilization Filing with Louisiana Public
Service Commission which was recognized in the prior-year quarter
18


Jurisdictions Adjusted for WNA
At June 30, 2007, we had WNA in the following service areas for the following periods as
noted, which covers approximately 90% of our customer meters in service:

Service Area WNA Period
Amarillo, TX October – May
Georgia October – May
Kansas October – May
Kentucky November – April
Louisiana * December – March
Lubbock, TX October – May
Mid-Tex * October – April
Mississippi November – April
Tennessee November – April
Virginia January – December
West Texas October – May

*New for the 2006-2007 winter heating season. In the Mid-Tex service area, the period covered will be November to April for the 2007-
2008 winter heating season.
19


Year-Over-Year Weather Effect by Division,
Year- Over-
as adjusted for WNA * • Fiscal 2007 YTD
consolidated gross
profit was adversely
s

ed
ate

affected by about $2.5
i

t
p

da
St

million, as a result of
a
ip

n

x
id-
S

oli
i ss

sia

weather that was 1
Percent (Warmer) Colder than Normal

Te
/K

/M

ns

percent colder than
ss

ui

d-
CO

KY

Co
Lo
Mi

Mi

normal, as adjusted for
WNA
10
• Fiscal 2006 YTD
5%
4%
5 consolidated gross
1% 2% 1%
profit was adversely
0%
0
affected by $47.5 million
2% 2% 2% due to weather that was
(5)
13 percent warmer than
normal, as adjusted for
(10)
WNA
13%
(15)
• Louisiana and Mid-Tex
divisions implemented
(20)
weather-normalized
22% rates during fiscal 2007,
(25)
which accounted for an
28% increase in gross profit
(30)
of $10.8 million year
(35) over year
Fiscal 2007 Fiscal 2006
20
* West Texas Division had no weather impact in either period


Drivers
$ 26.0 million increase in pipeline and storage
gross profit primarily due to
o $8.7 million increase from incremental margins from North Side
Loop and compression projects completed in 2006 at Atmos
Pipeline-Texas
o $7.1 million increase in asset management fees earned by
Atmos Pipeline & Storage due to the capture of more favorable
arbitrage spreads
o $5.6 million from increased throughput and demand for storage
services due to colder weather period-over-period
o $2.1 million increase due to rate increases from 2005 GRIP
filing

21


Drivers
$16.2 million increase in natural gas marketing gross profit primarily
due to

o $51.8 million increase in unrealized (mark-to-market) storage margin
primarily due to a narrowing of the spreads between the forward prices
used to value the financial hedges and the market (spot) price
used to value physical storage, coupled with a 2.5 Bcf increase in the
net physical storage position period-over-period
o $18.9 million decrease in realized marketing margin primarily due to
realizing lower margins in a less volatile market, partially offset by an
increase in sales volumes of 56.9 Bcf primarily due to colder weather
period-over-period and a successful marketing strategy
o $10.6 million decrease in unrealized (mark-to-market) marketing margin
primarily due to an unfavorable movement in the forward natural gas
prices associated with financial derivatives used in these activities
o $6.1 million decrease in realized storage margin primarily due to
decreased arbitrage spreads as a result of a less volatile market and
increased storage demand fees and increased park and loan fees
22


Nine Months Ended June 30
Natural Gas Marketing Segment 2007 2006 Change
(In thousands, except physical position)

Storage Activities
Realized margin $38,558 $44,600 ($6,042)
Unrealized margin 8,864 (42,924) 51,788
Total Storage Activities 47,422 1,676 45,746

Marketing Activities
Realized margin 44,320 63,263 (18,943)
Unrealized margin (6,131) 4,471 (10,602)
Total Marketing Activities 38,189 67,734 (29,545)

GROSS PROFIT $85,611 $69,410 $16,201

Net physical position (Bcf) 21.5 19.0 2.5

23

Consolidated Financial Results- Fiscal YTD

Fair Value of Contracts at June 30, 2007
Maturity in Years
Total Fair
Source of Fair Value <1 1-3 4-5 >5 Value
(In thousands)

$ — $ —$
Prices actively quoted $ 2,552 $ 7,252 9,804

Prices based on models
& other valuation (694) (736) — — (1,430)
methods

$ $ —$
—
Total Fair Value $ 1,858 $ 6,516 8,374

24


Drivers
Increased O&M expenses of $20.4 million primarily due to
$17.9 million increase primarily from higher labor and benefits
costs associated with increased headcount and increased
benefit costs
$9.6 million increase in administrative costs (insurance, IT
maintenance, vehicle lease expenses)
$5.2 million decrease in provision for doubtful accounts primarily
due to reduced collection risk from lower gas prices
$4.3 million decrease from deferral of 2005 and 2006 Katrina-
related expenses allowed by Louisiana regulators
$3.3 million increase for a one-time non-cash charge to write off
software that will no longer be used
25



(in millions)
in )

$45.7
$43.0 Other
$50.0
Medical & Dental
8.8
Post-Retirement
$40.0 7.6
Pension
$30.0 17.8
16.6
$20.0 2007 Pension Assumptions
11.3 8.25% return on plan assets
10.6
6.30% discount rate
$10.0
4.00% wage increase
8.5
7.5
$0.0
YTD 2006 YTD 2007

26


Utility Bad Debt Expense as a Percent of Revenues

1.5

1.0 0.83
Percent

0.58
0.58
0.47
0.5
0.29

0.0
2003 2004 2005 2006 2007 YTD
27


Drivers
Decreased taxes, other than income, of $9.0 million
Primarily due to decreased franchise fees and state gross receipts
taxes resulting from lower revenues
Increased interest charges of $1.7 million
Primarily due to an increase in the three-month LIBOR rate of 28
basis points on the $300 million unsecured floating rate senior notes
(5.452 in 6/06 vs. 5.731 in 6/07)
$ 0.7 million of incremental interest expense associated with the
timing of the company’s $250 million senior note offering in June 2007
Partially offset by lower average outstanding short-term debt balances
year over year

Increased miscellaneous income of $8.7 million
$3.3 million increase due to the absence of an adverse regulatory
ruling in Tennessee related to the calculation of a performance-based
rate mechanism related to gas purchases
$5.0 million increase in interest income earned on larger cash
balances invested in short-term investments
$2.1 million increase due to leasing certain mineral interests owned
by the pipeline and storage segment
28



Utility CAPEX Nonutility CAPEX
(in millions) (in millions)

$232.1 $90.6
$222.5
$100
$250

$80
$200
55.0 $40.5
$60
$150 167.6 154.6
$40
$100
37.8
$20 35.6
$50
67.9
64.5
2.7
$0
$0 YTD 2006 YTD 2007
YTD 2006 YTD 2007
Maintenance
Growth
Fiscal 2007 YTD Expenditures
Maintenance Capital: $192.4 million
Growth Capital: $ 70.6 million 29

Highlights – Fiscal YTD

Successful Senior Note Offering
June 14, 2007, completed public offering of $250 million
aggregate principal amount of 6.35% senior notes due 2017
Effective interest rate was 6.45% inclusive of debt issue
costs.
After giving effect to a $100 million Treasury lock, the
effective interest rate is 6.26%
Net proceeds of approximately $247 million plus available
cash of $53 million were used to redeem the company’s
$300 million of unsecured floating rate senior notes on July
15, 2007
Debt-to-capitalization ratio reduced from 60.9% at
September 30, 2006, to 55.0% at June 30, 2007
Had repayment occurred as of June 30, 2007, the debt to
capitalization ratio would have been 51.7% at June 30,2007
30

Eastern Kentucky Gas Gathering Project

May 10, 2006, announced plans to construct a natural gas
gathering system in eastern Kentucky, referred to as the
Straight Creek Project
Recently redesigned and renamed the Phoenix Gas
Gathering Project
Approximately 40 miles and consists of 12-inch and 20-
inch pipe, as currently designed
Capacity as currently designed is 50 mmcf per day
Capital requirements of about $50 million
Not expected to have a financial impact on fiscal 2008
earnings

31

Kentucky Rate Case Decision
December 28, 2006, filed request for revenue increase of about $10.4
million and several rate design changes, including rate stabilization
with decoupling and recovery of the gas cost component of bad debts

The Kentucky Public Service Commission issued a final order on July
31, 2007, with the following key elements:

$5.5 million increase in base rates
Increase spread proportionately to individual customer classes
Effective with service rendered on and after August 1, 2007
Rate order affects approximately 175,000 customers

Requested ROE: 11.75%
Requested Capital Structure: 51.8% Debt / 48.2% Equity
Rate Base: $169.4 Million
Forward-looking filing with June 30, 2008 test year

32


GRIP Filings – State of Texas
May 31, 2007, Atmos Pipeline-Texas 2006 GRIP filing
of $13.0 million revenue increase related to return and
capital-related expenses on $88.9 million in net
investment during calendar 2006; anticipate
implementation September 2007

May 31, 2007, Mid-Tex Division 2006 GRIP filing of
$12.4 million related to return and capital-related
expenses on $62.4 million increase in net investment
during calendar 2006; anticipate implementation
November 2007
33


GRIP Filing Process in Texas

Effective Immediately
ACCEPT

60 Effective under “Operation of Law”
IGNORE
days
Atmos files
with cities

Atmos appeals
to RRC within
DENY Up to
30 days
105
days

RRC
SUSPEND
Rules
45
days

34

Rate Case Filing – Tennessee
May 4, 2007, filed request for revenue increase of about $11.0
million
Filing includes a Customer Utilization Adjustment mechanism to
address declining use and complement existing WNA; filing
encourages energy conservation
Serves approximately 132,000 residential, commercial and
industrial customers in Tennessee
Requested ROE: 11.75%
Requested Capital Structure: 51.5% Debt / 48.5% Equity
Rate Base: $188.9 Million
Test year ends October 31, 2008; forward-looking filing
Intervener testimony to be filed by August 17, 2007
Rate case hearing scheduled for October 3-5, 2007, with new rates
expected in early November 2007
35


Louisiana Rate Decisions
2005 RSC filing for the LGS service area for
approximately $10.8 million was effective August 12,
2006, based on a test year ended December 31, 2005;
settlement agreement reached December 2006 resulting
in a rate increase of about $9.5 million
2006 RSC filing for the LGS service area for about $0.8
million was effective July 1, 2007, settlement agreement
reached in May 2007 resulting in a rate increase of $0.7
million
2005 RSC filing for the Trans La service area for
approximately $1.8 million made December 28, 2006, for
the test period ending September 30, 2006; settlement
agreement reached in March 2007, which resulted in an
increase of $1.4 million effective April 1, 2007
36

Mid-Tex Rate Case Decision
May 31, 2006, filed for rate increase of approximately $60 million and
several rate design changes including WNA, Revenue Stabilization,
and recovery of the gas cost component of bad debt
July 6, 2006, an interim agreement was reached to implement WNA
effective October 1, 2006, utilizing 30 years of weather history
Railroad Commission Decision issued on March 29th
Permanent WNA based on 10 years of weather experience
Capital structure of 52% debt / 48% equity
Authorized ROE of 10%, Allowed Rate of Return of 7.903%
Rate Base of $1.044 Billion
Annual revenue increase of about $4.8 million; 66 cents/residential
customer, effective immediately
Customer refund of $2.9 million related to annual GRIP filings
Rate order affects approximately 1.5 million customers

37

Missouri Rate Case Decision
April 7, 2006, filed for 1st rate increase in over 9 years in
Missouri
Requested revenue increase of about $3.4 million, or 5.9%
Investments approximated $22.0 million over the 9-year period
Serves approximately 60,000 residential, commercial and
industrial customers in Missouri
Sought WNA, ROE increase to 12% and various rate design
changes
February 28, 2007, Final Order issued
No rate increase
Straight fixed/variable rate design for residential and small
commercial customers, implemented March 4, 2007; achieves
decoupling
Conservation Program to be implemented by August 31, 2007,
and funded with 1 percent of gross annual revenues, or about
$165,000 annually
38

Shelf Registration and Common Stock Offering

December 4, 2006, Atmos Energy filed a registration
statement with the SEC to issue up to $900 million in
common stock and/or debt securities, including about $402
million carried over from prior shelf registration statement
filed in August 2004

December 13, 2006, Atmos Energy completed the sale of
6.3 million shares priced at $31.50
Approximately $192 million in net proceeds
Proceeds used to reduce short-term debt
Dilutes fiscal 2007 net income by approximately 5 cents
per diluted share
39


Gas Held in Underground Storage – by Segment

June 30, 2007 June 30, 2006
Segment Balance Volumes WACOG* Balance Volumes WACOG*
($MM’s) (Bcf) ($MM’s) (Bcf)

Atmos Utility $ 288.0 43.9 $ 6.56 $ 305.4 46.7 $ 6.54

Natural Gas 163.1 25.1 7.57 114.9 20.1 8.62
Marketing

Pipeline & Storage 12.8 1.9 7.71 16.8 2.5 8.56

Total: $ 463.9 70.9 $ 6.95 $ 437.1 69.3 $ 7.22

*Weighted Average Cost of Gas (WACOG) excludes fair value hedge amounts associated with physical storage

40

Credit Facilities
March 30, 2007, Atmos Energy Marketing amended and extended its
$580 million uncommitted demand working capital credit facility to March
31, 2008, on essentially the same terms
December 15, 2006, Atmos Energy entered into a new $600 million, 5-
year committed revolving credit facility through December 2011
Facility replaces our $600 million 3-year revolving credit facility
entered into in October 2005, on essentially the same terms
Serves as a backup liquidity facility for our $600 million commercial
paper program
November 7, 2006, 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

41

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

42

Quarterly Dividend

On August 7, 2007, the Atmos Board of
Directors declared a quarterly dividend of
$0.32 per share

95th consecutive dividend declared

To be paid on September 10, 2007, to
shareholders of record on August 27, 2007

Indicated annual dividend of $1.28 per share

43

Fiscal 2007
Financial Projections

44

Consolidated Financial Results – Fiscal 2007E

Earnings Guidance – Fiscal 2007E
Atmos Energy anticipates earnings to be at the lower end
of the previously announced range of $1.90 to $2.00 per
fully diluted share for the 2007 fiscal year
Refined assumptions include:
Approximately 5 cent dilutive effect of the December equity offering
Total gross profit margin contribution from the marketing segment
expected to be in the range of $95 million to $105 million, due to
the continued reduction in natural gas price volatility
Continued execution of rate strategy and collection efforts
Normal weather in non-WNA jurisdictions
Bad debt expense of no more than $18 million
Average short-term interest rate @ 6.3%
No material acquisitions
Note: Changes in events or other circumstances that the company cannot currently anticipate could result in
earnings for fiscal 2007 that are significantly above or below this outlook.
45


Projected Net Income by Segment
($ millions, except EPS)

2007E
2005 2006
2004
$ 77 - 79
$ 63
Utility $ 81 $ 53
43 - 46
17
Natural Gas Marketing 23 58
46 - 48
3
Pipeline & Storage 31 36
1-2
3
Other 1 1
167 - 175
86
Total 136 148
87.7
54.4
Avg. Diluted Shares 79.0 81.4
$1.90 - $2.00
$ 1.58
Earnings Per Share $ 1.72 $ 1.82

46

Selected Income Statement Components
($ in millions)

1200

2007E Consolidated
1000 ($ millions)
458-465
O&M $458 - $465
433
800 D&A $200 - $205
416
Interest $138 - $143
Income Tax $101 - $105
600
Net Income $167 - $175
200-205
186
178
215
400 205 138-143
158 147
133
140 97
101-105
87
82
200 89
82
68 65
64
59
47 52 167-175
42 148
35
33 136
86
72
56 60
0
01 02 03 04 05 06 E
07
20 20 20 20 20 20 20 47



(in millions)
in )
$59.1
$53.3
Other
$60.0
Medical & Dental
10.4
$50.0 9.3 Post-Retirement
Pension
$40.0
25.3
20.1
$30.0
2007 Pension Assumptions
$20.0 14.2 12.8 8.25% return on plan assets
6.30% discount rate
$10.0 4.00% wage increase
10.6
9.7
$0.0
2006 2007E

48


Atmos Energy Marketing – Gross Profit Margin Composition
2007E
Impacted by customer volume demand
Marketing Sales prices are:
Marketing
• Cost plus profit margin $50 - $53 Million
(Bundled gas deliveries & • Cost plus demand charges
(Bundled gas deliveries &
peaking sales)
peaking sales)
Margins: More predictable

Impacted by gas price spread values
in the market (arbitrage opportunity)
Physical storage capabilities
Asset Optimization $45 - $52 Million
Asset Optimization Available storage and transport
capacity
(Storage & transportation
(Storage & transportation 9.7 Bcf proprietary contracted capacity
management)
management) 28.5 Bcf customer-owned / AEM- managed
storage
Margins: More variable
=
Total margins reflect:
$95 - $105 Million
Stability from marketing margins
Total AEM
Total AEM Upside from optimizing our storage
Margins
Margins and transportation assets to capture
arbitrage value
Margins: Stable with potential upside
49

Projected Cash Flow
($ millions)

2004 2005 2006 2007E

$ 271 $ 387 $ 311 $ 515 - 535
Cash flows from operations
(126) (243) (287) (265-275)
Maintenance/Non-growth capital
(67) (99) (102) (112)
Dividends

$ (78) $ 138 - 148
$ 78
Cash available for debt reduction $ 45
and growth projects

50


In the 2006 fiscal year, Atmos Energy had $425
million in capital expenditures

For fiscal 2007, we project between $365-$385 million
in capital expenditures
Approximately $265 - $275 million maintenance
o Nonutility: $45 million - $50 million
o Utility: $220 million - $225 million
Approximately $100 - $110 million growth
o Nonutility: $13 million - $18 million
o Utility: $87 million - $92 million

51


Annual Dividend Growth
$1.28E

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

Note: Amounts are adjusted for mergers and acquisitions. For fiscal 2007, $1.28 is the indicated annual dividend.
52

Consolidated Financial Results
2007 Fiscal Third Quarter
and Year To Date

53

Consolidated Income Statements –
Fiscal 2007 3Q
Thre e Months Ende d June 30
2007 2006
(000s except EPS)

Operating Revenues:
Utility Segment $ 548,251 $ 402,044
Natural Gas Marketing Segment 854,167 562,447
Pipeline and Storage Segment 37,937 35,862
Other Nonutility Segment 843 1,413
Intersegment Eliminations (223,046) (138,523)
1,218,152 863,243
Purchased Gas Cost:
Utility Segment 357,608 232,192
Natural Gas Marketing Segment 854,743 563,333
Pipeline and Storage Segment 228 379
Other Nonutility Segment - -
990,136 658,743
Gross Profit 228,016 204,500

Operation and Maintenance Expense 118,430 104,380
Depreciation and Amortization 48,974 46,838
Taxes, other than income 52,881 48,479
Miscellaneous Income 4,266 963
Interest Charges 34,479 35,944
Loss Before Income Taxes (22,482) (30,178)
Income Tax Benefit (9,122) (12,033)
Net Loss $ (13,360) $ (18,145)
Net Loss Per Share:
Basic and Diluted $ (0.15) $ (0.22)
Average Shares Outstanding:
Basic and Diluted 88,366 80,840
54

Consolidated Income Statements –
Fiscal 2007 YTD
Nine Months Ende d June 30
2007 2006
(000s except EPS)

Operating Revenues:
Utility Segment $ 2,973,528 $ 3,254,674
Natural Gas Marketing Segment 2,360,902 2,482,921
Pipeline and Storage Segment 147,151 121,057
Other Nonutility Segment 2,979 4,500
4,896,367 5,180,909
Purchased Gas Cost:
Utility Segment 2,174,071 2,488,906
Natural Gas Marketing Segment 2,275,291 2,413,511
Pipeline and Storage Segment 682 590
Other Nonutility Segment - -
3,864,073 4,224,416
Gross Profit 1,032,294 956,493

Operation and Maintenance Expense 345,662 325,295
Depreciation and Amortization 149,035 137,174
Taxes, other than income 149,694 158,691
Miscellaneous Income (Expense) 7,683 (1,028)
Interest Charges 109,273 107,625
Income Before Income Taxes 286,313 226,680
Income Tax Expense 111,907 85,002
Net Income $ 174,406 $ 141,678
Net Income Per Share:
Basic $ 2.02 $ 1.76
Diluted $ 2.00 $ 1.75
Average Shares Outstanding:
Basic 86,378 80,520
Diluted 87,011 81,013
55

Utility Operating Income (Loss) – By Division
Fiscal 2007 3Q

2007 2006

Utility Operating Income (Loss)
Colorado-Kansas Division $ 884 $ 163
Kentucky/Mid-States Division 1,762 (3,105)
Louisiana Division 5,921 8,715
Mid-Tex Division (11,415) (12,819)
Mississippi Division 2,115 (1,265)
West Texas Division (391) 4,383
Other 1,189 1,018
$ 65 $ (2,910)
Total Utility Operating Income (Loss)

56

Utility Operating Income – By Division
Fiscal 2007 YTD

2007 2006

Utility Operating Income
Colorado-Kansas Division $ 24,524 $ 23,423
Kentucky/Mid-States Division 44,913 51,335
Louisiana Division 39,540 25,202
Mid-Tex Division 82,932 67,423
Mississippi Division 25,918 25,480
West Texas Division 18,230 24,053
Other 1,468 4,187
$ 237,525 $ 221,103
Total Utility Operating Income

57

Utility Volumes - Fiscal 2007 3Q

2007 2006 Change % Change

Sales Volumes (MMcf)
Residential 21,421 13,176 8,245 63%
Commercial 16,672 11,719 4,953 42%
Public authority and other 1,421 838 583 70%
Industrial 5,248 4,161 1,087 26%
Irrigation 490 2,759 (2,269) (82%)
Total 45,252 32,653 12,599 39%
29,311 29,630 (319) (1%)
Transportation (MMcf)
Total Consolidated
74,563 62,283 12,280 20%
Utility Volumes (MMcf)

58

Utility Volumes - Fiscal 2007 YTD

2007 2006 Change % Change

Sales Volumes (MMcf)
Residential 155,021 132,754 22,267 17%
Commercial 83,231 74,691 8,540 11%
Public authority and other 8,018 7,778 240 3%
Industrial 18,551 21,224 (2,673) (13%)
Irrigation 687 3,115 (2,428) (78%)
Total 265,508 239,562 25,946 11%
101,572 91,384 10,188 11%
Transportation (MMcf)
Total Consolidated
367,080 330,946 36,134 11%
Utility Volumes (MMcf)

59

Cash Flow Statements - Fiscal 2007 YTD

Year to Date June 30
2007 2006
(000s)
$ 174,406 $ 141,678
Net income
Depreciation and amortization 149,183 137,533
Deferred income taxes 37,266 36,160
Other 17,959 12,063
Net change in operating assets and liabilities 173,856 (103,991)
552,670 223,443
Operating cash flow

Capital expenditures - growth (70,635) (100,047)
Capital expenditures - non-growth (192,388) (222,644)
Other, net (9,867) (4,811)
279,780 (104,059)
Operating cash flow after investing activities

Repayment of long-term debt (2,685) (2,618)
Settlement of Treasury lock agreements 4,750 -
Dividends paid (83,118) (76,559)

$ 198,727 $ (183,236)
Cash flow after growth capital

60

Capitalization - Fiscal 2007 YTD

As of June 30
2007 2006
(000s)

Short-term debt $ - 0.0% $ 297,087 7.2%

Long-term debt 2,430,518 55.0% 2,184,083 52.7%

Shareholders' equity 1,988,142 45.0% 1,664,556 40.1%

Total capitalization $ 4,418,660 100.0% $ 4,145,726 100.0%

61

As a Reminder…

The audio and slide presentation of this conference call
will be available on Atmos Energy’s Web site by 10:00
a.m. Eastern Daylight Time on August 8, 2007, through
midnight on November 7, 2007. Atmos Energy’s Web
site address is: www.atmosenergy.com.

To listen to the live conference call, dial 800-257-7063
by 8:00 a.m. Eastern Daylight Time on August 8, 2007.

62

Appendix

63

Utility Segment
Summary of Utility Revenue – Related Tax Information
Gross profit margins, primarily in our Mid-Tex division, include franchise fees and gross receipts taxes, which are
calculated as a percentage of revenue (inclusive of gas costs). We record the expense for these taxes as a component
of taxes, other than income.
Timing differences exist between the recognition of revenue for franchise fees recovered from our customers and the
recognition of expense of franchise taxes, which may favorably or unfavorably affect net income; however; they should
offset over time with no permanent impact on net income.

Three Months Nine Months
2007 2006 2007 2006
Change Change
($ thousands)

$ 18,427 $ 11,572 $ 91,123 $ 93,558
$ 6,855 $ (2,435)
A mo unts included in margin

(34,337) (30,852) (90,176) (96,740)
(3,485) 6,564
A mo unts included in taxes, o ther

$ (15,910) $ (19,280) $ $ 947 $ (3,182) $
3,370 4,129
Difference / Impact

64

Atmos Energy Marketing
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.
65



Reported GAAP Economic Value*
Reported GAAP
Value (Commercial Value)
Value
- -Physical and Financial
Physical and Financial - Physical and Financial
Positions Positions
Positions
$41.2 MM
$(7.2) MM
$(7.2) MM
Market Spread
Embedded margin
difference
*Realizing Economic Value
$48.4 MM is dependent on ability to
execute – deliver physical
gas & close financial hedges
Supporting data appears on
the following slide
At June 30, 2007 66


Three Months Ended

Physical Economic Value (EV) GAAP Reported Value - MTM Market Spread
($ per mmcf)
Period Volume Total Total Total
WASP WACOG EV
Ending (Bcf) ($ in millions) ($ per mmcf) ($ in millions) ($ per mmcf) ($ in millions)

23.6 10.3880 9.0806 1.3074 (1.5195) 2.8269
3/31/2006 30.8 (35.8) 66.6
19.0 10.2353 8.7417 1.4936 (3.0297) 4.5233
6/30/2006 28.4 (57.7) 86.1

(4.6) $ (0.1527) $ (0.3389) $ 0.1862 (1.5102) $ (21.9) $ 1.6964
2006 Variance $ (2.4) $ 19.5

19.6 8.2196 7.6701 0.5495 (1.2347) 1.7842
3/31/2007 10.8 (24.2) 35.0
21.5 9.5409 7.6238 1.9171 (0.3343) 2.2514
6/30/2007 41.2 (7.2) 48.4

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

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

67


Nine Months Ended

Physical Economic Value (EV) GAAP Reported Value - MTM Market Spread
($ per mmcf)
Period Volume Total Total Total
WASP WACOG EV
Ending (Bcf) ($ in millions) ($ per mmcf) ($ in millions) ($ per mmcf) ($ in millions)

6.9 6.3466 4.4435 1.9031 (2.1502) 4.0533
9/30/2005 13.1 (14.8) 27.9
19.0 10.2353 8.7417 1.4936 (3.0297) 4.5233
6/30/2006 28.4 (57.7) 86.1

12.1 $ 3.8887 $ 4.2982 $ (0.4095) $ (0.8795) $ (42.9) $ 0.4700
2006 Variance 15.3 $ 58.3

14.5 11.9716 7.8329 4.1387 (1.1076) 5.2463
9/30/2006 60.0 (16.0) 76.0
21.5 9.5409 7.6238 1.9171 (0.3343) 2.2514
6/30/2007 41.2 (7.2) 48.4

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

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

68

atmos enerrgy ato37_pres

More Related Content

atmos enerrgy ato37_pres