AGL Resources Reports Earnings For FY 1998

ATLANTA, Nov. 6 -- AGL Resources Inc. (NYSE: ATG - news) today reported results for the fiscal year that ended September 30, 1998.

    Following are highlights:
    *  Earnings per share were $1.41 -- a 4-cent per share increase from the
       prior year.
    *  Consolidated net income advanced $4 million to $80.6 million.
    *  Operating margin increased 4 percent to $542.6 million.

AGL Resources' principal subsidiary is Atlanta Gas Light Company, a natural gas utility. Previously reported declining utility revenues and earnings during the first three quarters due to the long-term declining use per customer were offset by operating and capital cost controls implemented in the Spring of 1998 and the newly approved straight fixed variable (SFV) rate design for gas delivery service, which went into effect July 1, 1998. Under the new SFV delivery service rate design, the utility now recovers its costs as they are incurred rather than volumetrically with gas use predominately in the winter months.

Operating expenses increased 7.3 percent in fiscal 1998 compared with fiscal 1997. The increase in operating expenses is largely the result of costs, including noncash charges related to certain assets no longer useful in a more competitive environment, that are associated with the company's efforts to transform itself from a traditional utility into a competitive enterprise.

Walter M. Higgins, president and chief executive officer, said, ''During the year the Georgia Public Service Commission finalized the rules establishing Georgia's competitive gas markets. And we have been working hard to establish new systems and business practices that will enable us to succeed in that environment. Our fiscal 1998 results point in one direction: We're ready for competition, and we're positioning our organization to achieve our financial objective of a compound annual earnings growth rate of 6 percent to 7 percent over the next five years.''

Fourth Quarter Results Posted

For the three months ended September 30,1998, the company posted $11 million in net income, or 19 cents a share, compared with a net loss of $3.4 million, or 6 cents a share loss, for the same period in 1997. The company previously announced with its third quarter results that the fourth quarter was expected to generate higher revenues compared with the fourth quarter of the previous year because of the new rate design for utility delivery service, effective July 1.

Revenue for utility delivery service is now collected evenly throughout the year. Thus, revenues collected during the winter months -- the second quarter in fiscal 1999 -- are expected to be lower than those during the second quarter in fiscal 1998.

Quarterly Dividend Declared

The company's board of directors today declared a quarterly dividend on its common stock of 27 cents per share. Payment will be made on December 1, 1998, to shareholders of record on November 16, 1998.

The dividend, which remains unchanged from the previous quarter, equates to $1.08 per share on an annualized basis. The December dividend will be the 204th consecutive dividend paid.

Other Business

Wyck A. Knox, Jr., was elected to the company's board of directors. He is a partner and member of the executive committee in Kilpatrick Stockton LLP, a law firm with offices in Atlanta and Augusta; Charlotte, Raleigh, and Winston-Salem, N.C.; Washington, D.C.; London; Brussels; and Stockholm, Sweden. He fills the unexpired term of Charles McKenzie Taylor, a director since 1984, who has retired from the board. A native of Thomson, Georgia, Mr. Knox lives in Augusta.

AGL Resources is the holding company of Atlanta Gas Light Company [OTC BB:ATGLM - news], the largest natural gas distribution company in the Southeast, serving nearly 1.5 million customers in Georgia and, through Chattanooga Gas, in southern Tennessee. Although natural gas distribution is AGL Resources' core business, it also is engaged in other energy-related businesses, including natural gas and power marketing, wholesale and retail propane sales, and nonutility products and services for residential, commercial and industrial customers. The company's home page address on the Internet is www.aglr.com.

This press release contains forward-looking statements. AGL Resources wishes to caution readers that the assumptions, which form the basis for the forward-looking statements, include many factors that are beyond AGL Resources' ability to control or estimate precisely. Those factors include, but are not limited to, the following: changes in the price and demand for natural gas; the impact of changes in state and federal legislation and regulation on the company and the natural gas industry; the effects of competition, particularly in markets where prices and providers historically have been regulated; and financial market conditions.

                 AGL RESOURCES INC. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED FINANCIAL INFORMATION
                        SEPTEMBER 30, 1998 (Unaudited)

                    Millions of Dollars, Except Per Share Data

                                3 Months Ended             12 Months Ended
                                 September 30,              September 30,
                              1998          1997         1998          1997
    Operating Revenues      $205.4        $194.6     $1,338.6      $1,287.6
     Cost of Gas              78.5         102.2        796.0         766.5
    Operating Margin         126.9          92.4        542.6         521.1

    Operating Income         $23.1          $7.2       $167.6        $171.5

    Consolidated Net
     Income (Loss)           $11.0         $(3.4)       $80.6         $76.6

    Earnings Per Share of
     Common Stock (Loss)     $0.19        $(0.06)       $1.41         $1.37

    Average Number of
     Shares Outstanding
     (millions)
         Basic                57.2          56.5         57.0          56.1
         Diluted              57.3          56.6         57.0          56.2