AGL Resources Inc. Reports Earnings for Fiscal Year 1999

ATLANTA, Nov. 1 -- AGL Resources Inc. (NYSE: ATG) today reported financial results for the fiscal year ended September 30, 1999. Consolidated net income was $74.4 million compared with $80.6 million a year ago, and basic earnings per share were $1.30 per share, compared with $1.41 per share. Earnings for fiscal year 1999 include a one-time gain of $22.3 million ($0.39 per share) from the sale of its interests in two energy marketing joint ventures.

Lower earnings for the year are attributable to a number of factors, including a decline in utility operating margins due primarily to the accelerated pace of customer migration to gas marketers for gas sales service.

In addition, earnings also were affected by losses from the company's wholesale gas marketing joint venture with Sonat. AGL Resources reported a net loss of $5.7 million for its 35 percent share compared with earnings of $2.1 million last year. In July 1999, AGL Resources announced an agreement with Sonat to sell its 35 percent interest in both the gas marketing and power marketing joint ventures. The sale of each was completed in the fourth quarter of fiscal 1999 and a total one-time gain of $22.3 million was recorded.

A final factor affecting earnings for fiscal 1999 was a loss of $9.0 million, due primarily to start-up costs from the company's retail energy marketing joint venture which was focused on establishing market share in Georgia's deregulated natural gas market.

Operating revenues for the year were $1,068.6 million compared with $1,338.6 million for the same period last year, a decrease of $270.0 million. The decrease in operating revenues is primarily the result of customers switching from the utility to marketers for their gas sales service. As utility sales service revenues decline, there is a comparable decline in the utility's purchased gas costs. The decrease in utility revenues therefore does not affect earnings.

"The rapid pace of customer migration and disappointing results from our Sonat marketing joint venture have affected our operating financial performance," said Walter M. Higgins, Chairman and CEO. "However, our fiscal 1999 results are indicative of the challenges AGL Resources faced during this very significant transitional year in our corporate history."

Fourth Quarter Results Announced

For the three months ended September 30, 1999, the company reported net income of $27.1 million, compared with $11.0 million a year ago, and basic earnings per share of 48 cents versus 19 cents per share. Results for the fourth quarter of 1999 include a one-time gain of $22.3 million ($0.39 per share) relating to the company's sale of its Sonat joint venture interests. Excluding the one-time gain, net income was $4.8 million and basic earnings were $0.09 per share.

The decline in net income and earnings for the quarter are primarily attributable to lower utility operating margins and start-up expenses from the company's retail marketing joint venture.

AGL Resources Inc. is a regional energy holding company with operations in the Southeast. Atlanta Gas Light Company, the largest natural gas distributor in the Southeast and the company's primary subsidiary, provides delivery service to approximately 1.5 million customers in Georgia and Chattanooga, Tennessee. Although natural gas distribution is AGL Resources' core business, it also is engaged in other energy-related businesses, including retail energy marketing, customer care services for energy marketers, and wholesale and retail propane sales.

The company's home page address on the Internet is www.aglresources.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; financial market conditions; and other risks described in our documents on file with the Securities and Exchange Commission.

                 AGL RESOURCES INC. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED FINANCIAL INFORMATION
                              September 30, 1999
                  Millions of Dollars, Except Per Share Data

                                3 Months Ended             12 Months Ended
                                 September 30,              September 30,
                              1999          1998         1999          1998

    Operating Revenues      $183.7       $ 213.4      $1068.6      $1,138.6
    Cost of Gas               64.3          86.2        544.7         796.0
    Operating Margin        $119.4        $127.2       $523.9        $542.6


    Operating Income         $25.0         $23.0       $154.6        $167.6


    Consolidated Net Income  $27.1         $11.0        $74.4         $80.6


    Earnings Per Share
     of Common Stock
       Basic                 $0.48         $0.19        $1.30         $1.41
       Diluted               $0.48         $0.19        $1.29         $1.41

    Average Number of Shares
     Outstanding (millions)
       Basic                  57.0          57.2         57.4          57.0
       Diluted                57.0          57.3         57.4          57.1

SOURCE  AGL Resources Inc.