Atos Annual Report 2010 | Quarterlytics

Plain-text annual report

Atmos Energy Corporation 2010 Summary Annual Report Our business is all about safety. To better serve our customers and to ensure safe and reliable service, we designed and built the most advanced technical training facility in the natural gas industry. It was just one of the many things we did to keep natural gas America’s safest, most reliable energy source. 1 2 3 4 5 6 7 8 9 KEY HOLE TECHNOL OG Y: Atmos Energy technicians can cut very small holes in the street to do repairs. Holes are resealed using the pavement that was cut out, saving time and money. KEEPING IT CL EAN: After cutting a hole, a VacTron truck uses pressurized water to excavate around the pipes. It then vacuums up the water and soil for a cleaner and better repair. PREVENTING I GNITI ON: In the rare case of ﬁre, all Atmos Energy technicians are trained to respond appropriately to minimize potential harm to people and property. LAUNCHING PIGS: When pipelines are installed, cleaned or inspected, electronic and mechanical “pigs” are sent through them to detect anomalies or other conditions that need attention. LEARNING IN TH E P ITS: Technicians use protective equipment to repair leaks in a safe manner. Static kits prevent sparks and allow technicians to squeeze off a leaking line to safely repair it. SMALL SPACES: Using a special tripod and personal protective equipment, Atmos Energy technicians are trained to perform work in very tight, conﬁned spaces. REA L LIFE: A working natural gas system is the ideal place for technicians to learn to serve customers in their home—to ﬁnd gas leaks, check appliances and detect carbon monoxide. KEEPING TH E GA S ON: Our technicians learn to safely bypass our gas meters to do regular and special maintenance without shutting off the gas and inconveniencing the customer. WELCOME HOME: We’re there when customers move in. We visit to turn on the gas, light appliances and show customers how to safely use their natural gas appliances. 8 6 7 5 9 4 3 1 2 Gas City is part of the company’s new Charles K. Vaughan Center in Plano, Texas. The learning and service center is a tangible example of the company’s commitment to pipeline safety, infrastructure modernization, technical standards and employee development. Along with our own employees, emergency responders, community officials and even school children come here to learn about natural gas—America’s safest and most plentiful energy source. Charles K. Vaughan, founding chairman and lead director (center), Robert W. Best, executive chairman of the board (left), and Kim R. Cocklin, president and chief executive ofﬁcer (right), stand in front of our Charles K. Vaughan Center in Plano, Texas. Completed in 2010, the Vaughan Center is the premier technical training facility and customer service center in the natural gas utility industry. It reﬂects Atmos Energy’s commitment to ensuring safety and reliability through superior employee development and service excellence. 2 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT To O ur Sh arehol ders Atmos Energy places a top priority on providing safe and reliable natural gas service to its customers in the more than 1,600 communities we serve across 12 states. No better evidence exists of our commitment to safety and reliability than our new Charles K. Vaughan Center, which opened in the fall of 2010. Honoring our founding chairman and lead director, the Vaughan Center is one of the natural gas distribution industry’s finest facilities for training and development. To enhance classroom instruction, the center includes a gas flow-control laboratory and a simulated com- munity, named Gas City, where our service technicians apply their training to situations they can encounter when responding to service and emergency calls. More than $300 million of our annual capital budget goes to protect our communities and to deliver excellent service. We instill a “culture of safety” among our employees through continual training and safety awareness meetings. We constantly monitor our operations and are highly vigilant about the integrity of our 77,000-mile pipeline system. We offer around- the-clock service from our U.S. call centers with our technicians always on the job ready to respond to customers’ needs. And, we promote awareness of gas pipeline safety by communicating with our customers, the public, residents living along our pipeline rights of way, firefighters and other first-responders, excavators and contractors, and state and local public officials. Continual improvement, constant attention and professional expertise make this nation’s natural gas transmission and distribution infrastructure among the world’s best. In this report, you will see activities that we undertake because our business is all about safety. 2010 Results We are pleased to report that our operational and financial performance in fiscal 2010 resulted in us achieving our stated goal of increasing earnings per diluted share, on average, by 4 percent to 6 percent for the 10th consecutive year. Our reported earnings per diluted share increased by 13 cents a share to $2.20. Net income in fiscal 2010 rose 8 percent over that of fiscal 2009 to $205.8 million. Return on average shareholders’ equity was 9.1 percent. Regulated operations, comprising our 12-state natural gas utility distribution system and our Texas intrastate gas transmission and storage division, provided more than four out of every five dollars of net income. Earnings from regulated operations improved by 6 percent over comparable earnings in fiscal 2009 to $167.4 million. Net income from non- regulated operations increased by 16 percent year over year to $38.4 million. We paid cash dividends in fiscal 2010 of $1.34 per share. In November 2010, the board of directors raised the dividend for the 27th consecutive year, making the current indicated annual rate $1.36 per share. ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 3 FISCAL 2010 NET INCOME BY SEGMENT Contributions from Regulated and Nonregulated Operations 61% Natural Gas Distribution 20% Regulated Transmission and Storage 14% Natural Gas Marketing 5% Pipeline, Storage and Other Operational Highlights Our collaborative approach with regulators and customers provided settlements with “win-win” outcomes and acceptable rate changes in many jurisdictions. We received rate outcomes that increased operating income by a net $56.8 million in fiscal 2010. Our Mid-Tex Division, which serves the Dallas- Fort Worth Metroplex and more than 500 other Texas municipalities, reached a settlement with two coalitions of cities and the City of Dallas to recover our investment for a two-year steel service line replacement program. In this program, we are replacing aging steel service lines with corrosion-resistant polyethylene pipe. The lines run primarily from our mains to homes and businesses. In addition, we reached agreement with the two coalitions of cities to renew until 2012 an existing rate review mechanism, or RRM, which was first negoti- ated in 2008. The RRM provides a transparent process for annually updating our rates by reviewing our costs and investments in those communities, thereby avoiding time-consuming and costly rate-case litiga- tion that ultimately must be paid for by our customers. Our rate strategy is to continue to improve rate designs by eliminating regulatory lag in recovering our costs, streamlining the rate-review process and reducing volatility in our customers’ bills. An important protection that we seek in our rate designs is a weather normalization adjustment, or WNA. WNA protects approximately 94 percent of our gross 4 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT margins from the vagaries of weather, helps stabilize our earnings and reduces volatility in our customers’ bills. Having WNA in rates saved approximately $52 million in fiscal 2010 for our utility customers by lowering their gas bills when colder-than-normal weather hit last winter. Our average customer’s gas bills also remained relatively unchanged from fiscal 2009 because of our diligent management of natural gas supplies and taking advantage of declining gas costs on behalf of our customers. Our average cost of gas went down from $6.95 per thousand cubic feet (Mcf) in fiscal 2009 to $5.77 per Mcf in fiscal 2010. Consolidated natural gas distribution throughput rose 11 percent in fiscal 2010 to 454 billion cubic feet (Bcf) mainly due to colder weather and higher consumption. Although our customer growth remained flat because of the sluggish economy, the appeal of natural gas continued to grow because of stable prices and abundant supplies. In some areas, we started to see signs of economic improvement, such as proposals for large commercial housing projects that will use natural gas. In September 2010, our Atmos Pipeline–Texas Division filed a rate request for a change in operating income of $38.9 million. The division’s last increase in base rates took effect in 2004. This case will be decided in fiscal 2011. Our regulated transmission and storage transportation volumes declined 19 percent from those in fiscal 2009 because of lower throughput for electricity generation and reduced shipments of natural gas, especially from the Barnett Shale production area. Our nonregulated natural gas marketing business benefited from unrealized margins that contributed to the segment’s higher net income in fiscal 2010. However, Atmos Energy Marketing’s delivered gas margins declined from those in fiscal 2009. Lower per-unit margins and a 5 percent decline in consolidated sales volumes to 354 Bcf reflected the lower market demands of industrial users and power plants. Despite bearish conditions in gas markets, Atmos Energy Marketing attracted new customers and retained nearly all of its long-standing customers through its dedicated focus on high-quality customer service. Financial Condition and Outlook Entering fiscal 2011, our balance sheet and financial position are in excellent condition. Our available liquidity at the end of fiscal 2010 was approximately $1.2 billion. We have in place credit facilities to meet our working capital needs as well NET INCOME PER DILUTED SHARE 1 8 . 1 $ 1 9 . 1 $ 9 9 . 1 $ 7 0 . 2 $ 0 2 . 2 $ $2.20 $1.65 $1.10 $0.55 06 07 08 09 10 as plans for refinancings that should lower our cost of debt in 2011. During the past year, all three major credit-rating agencies upgraded or reaffirmed the company’s debt ratings. This will help us access capital markets for future needs and obtain financing at reasonable costs. Our capital expenditures in fiscal 2010 increased by $33 million to $542.6 million. A portion of this spending funded a new information technology data center, con- struction of two service centers and work on the Mid-Tex Division’s steel service line replacement program. For fiscal 2011, we expect capital spending to range from $580 million to $595 million. We will continue making significant investments in upgrading mains and service lines in all our utility operations, the largest being for the Mid-Tex Division’s steel service line replacement program. We also will be investing in two long-term improve- ments to our customer service: a new state-of-the-art customer call center in Amarillo to be completed in 2011 and a multi-year project to modernize our customer-information software system for better coordination of all aspects of our customer contacts, service dispatching and customer billing. We have forecast that our fiscal 2011 earnings per diluted share will be between $2.25 and $2.35. Board and Management Transitions In February 2010, two long-time members of the board of directors, Travis W. Bain II and Thomas J. Garland, retired as directors. Mr. Bain, whose distinguished career included management consulting, leading retailing and manufacturing companies and founding his own busi- nesses, had served since 1988. Mr. Garland, a highly respected banker, former Tennessee state senator, state ethics-panel chairman and university educator, had served since 1997. We thank these outstanding directors for their years of dedicated service to Atmos Energy’s shareholders, customers and employees. Effective October 1, 2010, the board of directors named Robert W. Best to the new position of executive chairman of the board and promoted Kim R. Cocklin to be president and chief executive officer. This succession in the corpora- tion’s senior leadership had been planned for the past four years with the guidance and approval of the board. Having worked together and known each other for nearly 30 years at Atmos Energy and at other companies, we have developed virtually the same business philosophy and have coordinated closely to make the ongoing transition seamless. Some management matters may change; however, Atmos Energy’s vision and strategy will remain as they have since Charles K. Vaughan put forth our guiding principles during his 14 years as the company’s senior leader. During the past 13 years as chief executive officer, Bob Best refined these principles and adapted them to the much-larger company that Atmos Energy has become. In the future, we intend to continue the company’s track record of creating shareholder value through (cid:202) (cid:85)(cid:202) (cid:10)(cid:156)(cid:152)(cid:195)(cid:136)(cid:195)(cid:204)(cid:105)(cid:152)(cid:204)(cid:202)(cid:105)(cid:62)(cid:192)(cid:152)(cid:136)(cid:152)(cid:125)(cid:195)(cid:135)(cid:171)(cid:105)(cid:192)(cid:135)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:202)(cid:125)(cid:192)(cid:156)(cid:220)(cid:204)(cid:133)(cid:93)(cid:202)(cid:62)(cid:219)(cid:105)(cid:192)(cid:62)(cid:125)(cid:136)(cid:152)(cid:125)(cid:202) 4 percent to 6 percent a year (cid:0) (cid:202) (cid:85) (cid:10)(cid:156)(cid:152)(cid:195)(cid:105)(cid:86)(cid:213)(cid:204)(cid:136)(cid:219)(cid:105) (cid:62)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143) (cid:136)(cid:152)(cid:86)(cid:192)(cid:105)(cid:62)(cid:195)(cid:105)(cid:195) (cid:136)(cid:152) (cid:204)(cid:133)(cid:105) (cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:189) (cid:202) (cid:202) (cid:96)(cid:136)(cid:219)(cid:136)(cid:96)(cid:105)(cid:152)(cid:96)(cid:195) (cid:0) (cid:202) (cid:85) (cid:45)(cid:204)(cid:192)(cid:62)(cid:204)(cid:105)(cid:125)(cid:222) (cid:118)(cid:156)(cid:86)(cid:213)(cid:195)(cid:105)(cid:96) (cid:156)(cid:152) (cid:204)(cid:133)(cid:105) (cid:86)(cid:156)(cid:147)(cid:171)(cid:62)(cid:152)(cid:222)(cid:189)(cid:195) (cid:86)(cid:156)(cid:192)(cid:105) (cid:152)(cid:62)(cid:204)(cid:213)(cid:192)(cid:62)(cid:143) gas business (cid:0) (cid:202) (cid:85) (cid:45)(cid:204)(cid:192)(cid:156)(cid:152)(cid:125) (cid:76)(cid:62)(cid:143)(cid:62)(cid:152)(cid:86)(cid:105) (cid:195)(cid:133)(cid:105)(cid:105)(cid:204) (cid:62)(cid:152)(cid:96) (cid:62)(cid:147)(cid:171)(cid:143)(cid:105) (cid:143)(cid:136)(cid:181)(cid:213)(cid:136)(cid:96)(cid:136)(cid:204)(cid:222) (cid:0) (cid:202) (cid:85) (cid:31)(cid:62)(cid:221)(cid:136)(cid:147)(cid:136)(cid:226)(cid:105)(cid:96) (cid:86)(cid:62)(cid:171)(cid:62)(cid:76)(cid:136)(cid:143)(cid:136)(cid:204)(cid:222) (cid:156)(cid:118) (cid:192)(cid:105)(cid:125)(cid:213)(cid:143)(cid:62)(cid:204)(cid:105)(cid:96) (cid:105)(cid:62)(cid:192)(cid:152)(cid:136)(cid:152)(cid:125)(cid:195) (cid:0) (cid:202) (cid:85) (cid:45)(cid:105)(cid:143)(cid:105)(cid:86)(cid:204)(cid:105)(cid:96) (cid:152)(cid:156)(cid:152)(cid:192)(cid:105)(cid:125)(cid:213)(cid:143)(cid:62)(cid:204)(cid:105)(cid:96) (cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195) (cid:204)(cid:156) (cid:86)(cid:156)(cid:147)(cid:171)(cid:143)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204) our regulated businesses (cid:0) (cid:202) (cid:85) (cid:20)(cid:192)(cid:156)(cid:220)(cid:204)(cid:133) (cid:204)(cid:133)(cid:192)(cid:156)(cid:213)(cid:125)(cid:133) (cid:171)(cid:192)(cid:213)(cid:96)(cid:105)(cid:152)(cid:204) (cid:62)(cid:86)(cid:181)(cid:213)(cid:136)(cid:195)(cid:136)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195) Atmos Energy’s management, working closely with the board of directors, will build on the past while staying focused on the future. This strategy serves all our stakeholders well. In essence, it reflects the same safety and reliability that underlie all our activities. Sincerely, Robert W. Best Executive Chairman of the Board Kim R. Cocklin President and Chief Executive Officer November 30, 2010 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 5 6 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 1 Inves ti ng in Sa fe ty Smart investments are safe investments. In our case, (cid:109)(cid:97)(cid:94)(cid:107)(cid:94)(cid:8)(cid:108)(cid:3)(cid:103)(cid:104)(cid:3)(cid:91)(cid:94)(cid:109)(cid:109)(cid:94)(cid:107)(cid:3)(cid:98)(cid:103)(cid:111)(cid:94)(cid:108)(cid:109)(cid:102)(cid:94)(cid:103)(cid:109)(cid:3)(cid:109)(cid:97)(cid:90)(cid:103)(cid:3)(cid:100)(cid:94)(cid:94)(cid:105)(cid:98)(cid:103)(cid:96)(cid:3)(cid:104)(cid:110)(cid:107)(cid:3)(cid:98)(cid:103)(cid:95)(cid:107)(cid:90)(cid:108)(cid:109)(cid:107)(cid:110)(cid:92)- ture modern, our communities safe and our employees (cid:110)(cid:105)(cid:3)(cid:109)(cid:104)(cid:3)(cid:93)(cid:90)(cid:109)(cid:94)(cid:39)(cid:3)(cid:63)(cid:107)(cid:104)(cid:102)(cid:3)(cid:109)(cid:97)(cid:94)(cid:3)(cid:108)(cid:109)(cid:90)(cid:107)(cid:109)(cid:3)(cid:104)(cid:95)(cid:3)(cid:93)(cid:94)(cid:111)(cid:94)(cid:101)(cid:104)(cid:105)(cid:102)(cid:94)(cid:103)(cid:109)(cid:37)(cid:3)(cid:112)(cid:94)(cid:3)(cid:104)(cid:110)(cid:109)(cid:219)(cid:109)(cid:3)(cid:103)(cid:94)(cid:112)(cid:3) communities with the highest quality service lines. In mature neighborhoods, we are continually replacing legacy service lines with new, modern pipe. And, in every community, we inspect and monitor our pipelines and distribution lines to ensure a reliable system. 2 1 Polyethylene pipe is being used in many areas to replace our older steel service lines. In just the Mid-Tex Division alone, Atmos Energy will replace 100,000 steel service lines during the next two years. 2 To update older cast iron and steel mains, Atmos Energy is installing new, high-pressure lines next to existing lines, which can then be safely and efﬁciently removed or abandoned. 3 In many neighborhoods, new ﬂexible polyethylene piping can be ﬁtted through existing steel pipes to modernize our natural gas delivery system. This approach not only increases safety, but also allows us to efﬁciently install new piping with minimal disruption. 3 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 7 4 5 6 4 Atmos Energy technicians use the latest fusing technology to join sections of polyethylene pipe to make strong and secure connections. 5 Natural gas in its raw state has no odor. To make it identiﬁable by the public, we add an odorant to the gas in precise concentrations, using highly accurate chemical instruments. 6 Atmos Energy chemists calibrate measuring equipment to continuously monitor the chemical components and Btu value of our product, ensuring that our natural gas meets the exact needs for home and industrial uses alike. 8 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 2000 1950 1900 1850 1800 PROGRESS IN PIPELINES 7 8 Polyethylene – Late 1960s to present Coated Steel – 1950s to present Bare Steel – 1920s to early 1940s Cast Iron – 1900s to 1920s Wood – 1830s to 1910 Bamboo – First used by the Chinese around 900 BC to transport natural gas 7 Wooden pipes were state-of-the-art pipelines in the early 19th century. Later, they were replaced with more reliable cast iron, steel and coated steel pipes. Today’s polyethylene pipe will stand the test of time for many decades to come. 8 To keep our pipelines in top condition, electronic and mechanical “pigs” are sent through our pipelines to inspect for anomalies, cracks or scratches and to keep the lines clean. 9 We conduct periodic pipeline-integrity inspections, using a variety of structural, metallurgical and process tests, to prevent problems and safeguard the public. 9 Since 2004, Atmos Energy has spent more than $1 billion to modernize its system. ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 9 2 The Vaughan Ce nte r From its inception, the Vaughan Center was designed as a place to teach, learn, innovate and practice the highest standards of professionalism, customer service and, most importantly, safety. When we named it, there was no question. Embedded in the heart and soul of our company and in this facility are the visionary leadership (cid:90)(cid:103)(cid:93)(cid:3)(cid:102)(cid:104)(cid:107)(cid:90)(cid:101)(cid:3)(cid:92)(cid:104)(cid:102)(cid:105)(cid:90)(cid:108)(cid:108)(cid:3)(cid:104)(cid:95)(cid:3)(cid:104)(cid:110)(cid:107)(cid:3)(cid:219)(cid:107)(cid:108)(cid:109)(cid:3)(cid:92)(cid:97)(cid:90)(cid:98)(cid:107)(cid:102)(cid:90)(cid:103)(cid:3)(cid:90)(cid:103)(cid:93)(cid:3) CEO, Charles K. Vaughan. 1 The Flow Lab inside the Vaughan Center is a high-tech teaching facility. Compressed air is used in the lab to simulate the pressures and situations our technicians encounter in the ﬁeld. The lab allows us to set up multiple scenarios with a variety of meters, regulators and other devices to train and certify our service technicians and ﬁeld operators. 2 Hands-on classroom training, guided by expert instructors, teaches our technicians to keep ﬂow-control devices working accurately and communicating with our SCADA control system regarding gas ﬂow and system availability. 3 3 The Vaughan Center also houses our new Plano, Texas, service center, where technicians are dispatched to serve customers in a number of North Texas communities. 10 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 1 4 (cid:77)(cid:97)(cid:94)(cid:3)(cid:79)(cid:90)(cid:110)(cid:96)(cid:97)(cid:90)(cid:103)(cid:3)(cid:60)(cid:94)(cid:103)(cid:109)(cid:94)(cid:107)(cid:3)(cid:98)(cid:108)(cid:3)(cid:90)(cid:3)(cid:109)(cid:107)(cid:90)(cid:98)(cid:103)(cid:98)(cid:103)(cid:96)(cid:3)(cid:96)(cid:107)(cid:104)(cid:110)(cid:103)(cid:93)(cid:3)(cid:95)(cid:104)(cid:107)(cid:3)(cid:58)(cid:109)(cid:102)(cid:104)(cid:108)(cid:3)(cid:62)(cid:103)(cid:94)(cid:107)(cid:96)(cid:114)(cid:3)(cid:94)(cid:102)(cid:105)(cid:101)(cid:104)(cid:114)(cid:94)(cid:94)(cid:108)(cid:37)(cid:3)(cid:219)(cid:107)(cid:94)(cid:219)(cid:96)(cid:97)(cid:109)(cid:94)(cid:107)(cid:108)(cid:37)(cid:3) emergency responders, industry innovators and constituents who deal with natural gas systems. Inside are state-of-the art classrooms and an advanced Flow Lab for ensuring safety and reliability in the way our natural gas facilities are installed, (cid:102)(cid:104)(cid:103)(cid:98)(cid:109)(cid:104)(cid:107)(cid:94)(cid:93)(cid:3)(cid:90)(cid:103)(cid:93)(cid:3)(cid:102)(cid:90)(cid:98)(cid:103)(cid:109)(cid:90)(cid:98)(cid:103)(cid:94)(cid:93)(cid:39)(cid:3)(cid:66)(cid:109)(cid:8)(cid:108)(cid:3)(cid:109)(cid:97)(cid:94)(cid:3)(cid:98)(cid:103)(cid:93)(cid:110)(cid:108)(cid:109)(cid:107)(cid:114)(cid:8)(cid:108)(cid:3)(cid:219)(cid:103)(cid:94)(cid:108)(cid:109)(cid:3)(cid:94)(cid:113)(cid:90)(cid:102)(cid:105)(cid:101)(cid:94)(cid:3)(cid:104)(cid:95)(cid:3)(cid:109)(cid:94)(cid:92)(cid:97)(cid:103)(cid:98)(cid:92)(cid:90)(cid:101)(cid:3)(cid:94)(cid:93)(cid:110)(cid:92)(cid:90)(cid:109)(cid:98)(cid:104)(cid:103)(cid:3) and information transfer today as well as a resource for beta testing the latest technologies and processes for the future. 4 Solar-paneled ﬁeld devices allow monitoring natural gas ﬂow in remote areas of our system. Smart ﬁeld devices, such as handheld digital assistants and laptop computers, interface with our SCADA system, so that we constantly know the con- dition and ﬂow of our natural gas system. 5 As one of the country’s largest natural gas utilities, we work with manufacturers to beta test their newest equipment, such as this highly complex natural gas meter designed for energy-demanding industrial environments. 6 New technicians and veterans alike train at the Vaughan Center to be certiﬁed and recertiﬁed on a regular basis. Virtually our entire technical workforce must be recertiﬁed at least every four years to meet federal and state operator qualiﬁca- tion requirements. 5 12 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT DELIVERING YOUR NATURAL GAS SCADA/Control Center (cid:32)(cid:62)(cid:204)(cid:213)(cid:192)(cid:62)(cid:143)(cid:202)(cid:125)(cid:62)(cid:195)(cid:202)(cid:204)(cid:192)(cid:62)(cid:152)(cid:195)(cid:147)(cid:136)(cid:195)(cid:195)(cid:136)(cid:156)(cid:152)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:96)(cid:136)(cid:195)(cid:204)(cid:192)(cid:136)(cid:76)(cid:213)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:195)(cid:222)(cid:195)(cid:204)(cid:105)(cid:147)(cid:195)(cid:202)(cid:136)(cid:152)(cid:219)(cid:156)(cid:143)(cid:219)(cid:105)(cid:202)(cid:204)(cid:133)(cid:156)(cid:213)(cid:195)(cid:62)(cid:152)(cid:96)(cid:195)(cid:202) of interconnected components to ensure safety and reliability. Our (cid:105)(cid:181)(cid:213)(cid:136)(cid:171)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:118)(cid:62)(cid:86)(cid:136)(cid:143)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:93)(cid:202)(cid:192)(cid:62)(cid:152)(cid:125)(cid:136)(cid:152)(cid:125)(cid:202)(cid:118)(cid:192)(cid:156)(cid:147)(cid:202)(cid:125)(cid:62)(cid:195)(cid:202)(cid:147)(cid:105)(cid:204)(cid:105)(cid:192)(cid:195)(cid:202)(cid:204)(cid:156)(cid:202)(cid:125)(cid:136)(cid:62)(cid:152)(cid:204)(cid:202) (cid:86)(cid:156)(cid:147)(cid:171)(cid:192)(cid:105)(cid:195)(cid:195)(cid:156)(cid:192)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:195)(cid:204)(cid:156)(cid:192)(cid:62)(cid:125)(cid:105)(cid:202)(cid:119)(cid:105)(cid:143)(cid:96)(cid:195)(cid:93)(cid:202)(cid:62)(cid:143)(cid:143)(cid:156)(cid:220)(cid:202)(cid:213)(cid:195)(cid:202)(cid:204)(cid:156)(cid:202)(cid:147)(cid:156)(cid:152)(cid:136)(cid:204)(cid:156)(cid:192)(cid:93)(cid:202)(cid:192)(cid:105)(cid:125)(cid:213)(cid:143)(cid:62)(cid:204)(cid:105)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202)(cid:147)(cid:105)(cid:204)(cid:105)(cid:192)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:121)(cid:156)(cid:220)(cid:202)(cid:156)(cid:118)(cid:202)(cid:125)(cid:62)(cid:195)(cid:202)(cid:204)(cid:156)(cid:202)(cid:86)(cid:213)(cid:195)(cid:204)(cid:156)(cid:147)(cid:105)(cid:192)(cid:195)(cid:176) RTU Electronic Flow Measurement Meter Chromatograph Chromatograph Gas from Wells, Pipelines and Plants Odorizer Power Plant Customers Control Valve Positive Shutoff Valve Construction, Maintenance, Leak Repair Pig Launcher Underground Storage Relief Valves Cathodic Protection Liquiﬁed Natural Gas Storage Pressure Control Compressor Station Meter/Advanced Metering Infrastructure Monitor Regulators Remote Terminal Unit (RTU) Low Point Controller Residential/Commercial/ Industrial Customers City Gate Meter 6 7 Most natural gas systems today rely on digital electronics for data collection, ﬂow control and continuous monitoring. The Vaughan Center teaches our technicians how to install, calibrate, operate and maintain our ﬁeld data systems. 8 The entire Vaughan Center, including Gas City, the Flow Lab and the Plano service center, is registered to be LEED certiﬁed. Standing for Leadership in Energy and Environmental Design, this green-building certiﬁcation program encourages using sustainable building and development practices and recognizes projects that are designed for energy efﬁciency and environmental betterment. 7 8 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 13 1 14 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT Our Cultur e of Sa fe ty (cid:77)(cid:97)(cid:94)(cid:114)(cid:3)(cid:112)(cid:90)(cid:101)(cid:100)(cid:3)(cid:90)(cid:102)(cid:104)(cid:103)(cid:96)(cid:3)(cid:110)(cid:108)(cid:51)(cid:3)(cid:97)(cid:94)(cid:107)(cid:104)(cid:94)(cid:108)(cid:3)(cid:112)(cid:97)(cid:104)(cid:3)(cid:110)(cid:103)(cid:90)(cid:108)(cid:108)(cid:110)(cid:102)(cid:98)(cid:103)(cid:96)(cid:101)(cid:114)(cid:3)(cid:93)(cid:104)(cid:3)(cid:90)(cid:3)(cid:96)(cid:104)(cid:104)(cid:93)(cid:3)(cid:99)(cid:104)(cid:91)(cid:3)(cid:94)(cid:111)(cid:94)(cid:107)(cid:114)(cid:3)(cid:93)(cid:90)(cid:114)(cid:39)(cid:3)(cid:76)(cid:104)(cid:102)(cid:94)(cid:37)(cid:3) (cid:98)(cid:103)(cid:3)(cid:109)(cid:97)(cid:94)(cid:3)(cid:92)(cid:104)(cid:110)(cid:107)(cid:108)(cid:94)(cid:3)(cid:104)(cid:95)(cid:3)(cid:109)(cid:97)(cid:94)(cid:98)(cid:107)(cid:3)(cid:93)(cid:90)(cid:98)(cid:101)(cid:114)(cid:3)(cid:107)(cid:104)(cid:110)(cid:109)(cid:98)(cid:103)(cid:94)(cid:37)(cid:3)(cid:108)(cid:110)(cid:93)(cid:93)(cid:94)(cid:103)(cid:101)(cid:114)(cid:3)(cid:219)(cid:103)(cid:93)(cid:3)(cid:109)(cid:97)(cid:94)(cid:102)(cid:108)(cid:94)(cid:101)(cid:111)(cid:94)(cid:108)(cid:3)(cid:90)(cid:109)(cid:3)(cid:109)(cid:97)(cid:94)(cid:3)(cid:92)(cid:94)(cid:103)(cid:109)(cid:94)(cid:107)(cid:3)(cid:104)(cid:95)(cid:3) (cid:94)(cid:113)(cid:109)(cid:107)(cid:90)(cid:104)(cid:107)(cid:93)(cid:98)(cid:103)(cid:90)(cid:107)(cid:114)(cid:3)(cid:94)(cid:111)(cid:94)(cid:103)(cid:109)(cid:108)(cid:3)(cid:98)(cid:103)(cid:3)(cid:112)(cid:97)(cid:98)(cid:92)(cid:97)(cid:3)(cid:109)(cid:97)(cid:94)(cid:114)(cid:3)(cid:97)(cid:110)(cid:102)(cid:91)(cid:101)(cid:114)(cid:3)(cid:93)(cid:94)(cid:102)(cid:104)(cid:103)(cid:108)(cid:109)(cid:107)(cid:90)(cid:109)(cid:94)(cid:3)(cid:109)(cid:97)(cid:94)(cid:98)(cid:107)(cid:3)(cid:108)(cid:105)(cid:98)(cid:107)(cid:98)(cid:109)(cid:3)(cid:90)(cid:103)(cid:93)(cid:3)(cid:92)(cid:104)(cid:110)(cid:107)(cid:90)(cid:96)(cid:94)(cid:3) to safeguard others. 2 3 1 Best friends Michael Rangel and Tucker Redden, both 6 years old, were doing what boys do—playing on Michael’s backyard swing set. Across the fence, Richard Herrera was doing what Atmos Energy technicians do— advising Michael’s dad, Mike, about an issue with his water heater. Suddenly, Tucker came racing from the backyard in a panic with blood on his hands. Little Michael was caught in a tube slide with a cord tightening around his neck. Bleeding from his mouth and unconscious, Michael’s situation was dire. Quickly, Mike and Richard went into action. As Mike pushed his son up from the bottom of the slide, Richard pulled him out from the top. Richard cut the rope around Michael’s neck and administered CPR until paramedics came. Today Michael is ﬁne. He and Tucker are buddies for life, and in their eyes, Richard Herrera is an Atmos Energy superhero. 2 Partners in safety, Brian Martens, a former ﬁre chief and now Atmos Energy’s manager of public affairs in Colorado, and Chief Mark Quick of the Durango Fire & Rescue Authority share the same number-one priority of keeping the community safe. Atmos Energy maintains close relationships with ﬁrst-responders in our communities to keep them informed about our natural gas system and to coordinate response plans if an emergency arises. 3 Dressed for success and personal safety, Atmos Energy technicians are ready for any situation. Whether it’s working in closed, conﬁned, underground spaces or dealing with heavy equipment and busy thoroughfares, our service technicians can suit up and create a safe environment for themselves, their fellow employees and everyone around them. ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 15 A Saf e Jo ur ney (cid:70)(cid:104)(cid:108)(cid:109)(cid:3)(cid:92)(cid:104)(cid:103)(cid:108)(cid:110)(cid:102)(cid:94)(cid:107)(cid:108)(cid:3)(cid:109)(cid:90)(cid:100)(cid:94)(cid:3)(cid:95)(cid:104)(cid:107)(cid:3)(cid:96)(cid:107)(cid:90)(cid:103)(cid:109)(cid:94)(cid:93)(cid:3)(cid:109)(cid:97)(cid:90)(cid:109)(cid:3)(cid:109)(cid:97)(cid:94)(cid:98)(cid:107)(cid:3)(cid:103)(cid:90)(cid:109)(cid:110)(cid:107)(cid:90)(cid:101)(cid:3)(cid:96)(cid:90)(cid:108)(cid:3)(cid:98)(cid:108)(cid:3)(cid:90)(cid:101)(cid:112)(cid:90)(cid:114)(cid:108)(cid:3)(cid:109)(cid:97)(cid:94)(cid:107)(cid:94)(cid:37)(cid:3)(cid:107)(cid:94)(cid:90)(cid:93)(cid:114)(cid:3)(cid:109)(cid:104)(cid:3)(cid:110)(cid:108)(cid:94)(cid:39)(cid:3)(cid:59)(cid:110)(cid:109)(cid:37)(cid:3) (cid:109)(cid:97)(cid:94)(cid:107)(cid:94)(cid:8)(cid:108)(cid:3)(cid:102)(cid:104)(cid:107)(cid:94)(cid:3)(cid:109)(cid:104)(cid:3)(cid:93)(cid:94)(cid:101)(cid:98)(cid:111)(cid:94)(cid:107)(cid:98)(cid:103)(cid:96)(cid:3)(cid:103)(cid:90)(cid:109)(cid:110)(cid:107)(cid:90)(cid:101)(cid:3)(cid:96)(cid:90)(cid:108)(cid:3)(cid:109)(cid:97)(cid:90)(cid:103)(cid:3)(cid:102)(cid:94)(cid:94)(cid:109)(cid:108)(cid:3)(cid:109)(cid:97)(cid:94)(cid:3)(cid:94)(cid:114)(cid:94)(cid:39)(cid:3)(cid:63)(cid:107)(cid:104)(cid:102)(cid:3)(cid:102)(cid:90)(cid:103)(cid:90)(cid:96)(cid:98)(cid:103)(cid:96)(cid:3)(cid:97)(cid:110)(cid:103)(cid:93)(cid:107)(cid:94)(cid:93)(cid:108)(cid:3)(cid:104)(cid:95)(cid:3) billions of cubic feet of gas supplies annually, to monitoring pipelines and inspecting our (cid:105)(cid:97)(cid:114)(cid:108)(cid:98)(cid:92)(cid:90)(cid:101)(cid:3)(cid:98)(cid:103)(cid:95)(cid:107)(cid:90)(cid:108)(cid:109)(cid:107)(cid:110)(cid:92)(cid:109)(cid:110)(cid:107)(cid:94)(cid:37)(cid:3)(cid:109)(cid:104)(cid:3)(cid:90)(cid:101)(cid:112)(cid:90)(cid:114)(cid:108)(cid:3)(cid:91)(cid:94)(cid:98)(cid:103)(cid:96)(cid:3)(cid:90)(cid:111)(cid:90)(cid:98)(cid:101)(cid:90)(cid:91)(cid:101)(cid:94)(cid:3)(cid:109)(cid:104)(cid:3)(cid:107)(cid:94)(cid:108)(cid:105)(cid:104)(cid:103)(cid:93)(cid:3)(cid:109)(cid:104)(cid:3)(cid:104)(cid:110)(cid:107)(cid:3)(cid:92)(cid:110)(cid:108)(cid:109)(cid:104)(cid:102)(cid:94)(cid:107)(cid:108)(cid:8)(cid:3)(cid:103)(cid:94)(cid:94)(cid:93)(cid:108)(cid:37)(cid:3)(cid:112)(cid:94)(cid:3) (cid:109)(cid:90)(cid:100)(cid:94)(cid:3)(cid:94)(cid:111)(cid:94)(cid:107)(cid:114)(cid:3)(cid:102)(cid:94)(cid:90)(cid:108)(cid:110)(cid:107)(cid:94)(cid:3)(cid:109)(cid:104)(cid:3)(cid:94)(cid:103)(cid:108)(cid:110)(cid:107)(cid:94)(cid:3)(cid:103)(cid:90)(cid:109)(cid:110)(cid:107)(cid:90)(cid:101)(cid:3)(cid:96)(cid:90)(cid:108)(cid:3)(cid:220)(cid:104)(cid:112)(cid:108)(cid:3)(cid:109)(cid:104)(cid:3)(cid:104)(cid:110)(cid:107)(cid:3)(cid:92)(cid:110)(cid:108)(cid:109)(cid:104)(cid:102)(cid:94)(cid:107)(cid:108)(cid:3)(cid:108)(cid:90)(cid:95)(cid:94)(cid:101)(cid:114)(cid:3)(cid:90)(cid:103)(cid:93)(cid:3)(cid:107)(cid:94)(cid:101)(cid:98)(cid:90)(cid:91)(cid:101)(cid:114)(cid:39) 1 If you smell gas, whether it’s day or night, immediately leave the area and from a safe distance call Atmos Energy. Our service technicians will respond promptly and will use sensitive devices for detecting a leak inside or outside. 2 We regularly inspect our natural gas distribution and pipeline system with state-of-the art equipment. This service technician uses a remote methane leak detector that can sense minute gas particles of methane. 3 Atmos Energy’s “sniffer” trucks patrol streets in cities and towns and along rights of way. These vehicles have highly sensitive detection devices to ﬁnd natural gas seepages from underground distribution lines or pipelines. 3 2 Our call centers are available at all hours, every day, to dispatch technicians to resolve natural gas issues at homes and businesses. 16 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 1 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 17 4 4 SCADA, or supervisory control and data acquisition, equipment remotely monitors pipelines, compressor stations, city gates and other major facilities for operational integrity and community safety. 5 To patrol our pipelines buried under- ground, airplanes ﬂy our rights of way using infrared technologies that can detect leaks from in the air. 5 18 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 8 6 7 6 “Walk the Safety Circle” is our safety mantra every time an employee approaches a company vehicle. All drivers are required to walk a complete 360° circle, making sure that no children, pets, toys, tools, other vehicles or nearby objects might pose a hazard. 7 Whether to initiate service, answer a billing question or respond to an emergency, staff members at our call centers are always available to care for our customers. 8 In Houston, Atmos Energy Marketing’s trading ﬂoor purchases large volumes of natural gas daily to ensure reliable supplies and economical prices for its many indus- trial, municipal and power-generation customers. 9 Keeping our customers warm and safe in the winter means keeping natural gas meters clear of snow and debris and the rest of our system in excellent repair to endure frigid temperatures. 9 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 19 1 20 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT Su ppo rting S afe, Strong Commu nities (cid:58)(cid:109)(cid:102)(cid:104)(cid:108)(cid:3)(cid:62)(cid:103)(cid:94)(cid:107)(cid:96)(cid:114)(cid:3)(cid:98)(cid:108)(cid:3)(cid:105)(cid:90)(cid:107)(cid:109)(cid:3)(cid:104)(cid:95)(cid:3)(cid:109)(cid:97)(cid:94)(cid:3)(cid:92)(cid:104)(cid:102)(cid:102)(cid:110)(cid:103)(cid:98)(cid:109)(cid:114)(cid:39)(cid:3)(cid:59)(cid:114)(cid:3)(cid:109)(cid:97)(cid:94)(cid:3)(cid:103)(cid:90)(cid:109)(cid:110)(cid:107)(cid:94)(cid:3)(cid:104)(cid:95)(cid:3)(cid:104)(cid:110)(cid:107)(cid:3)(cid:104)(cid:105)(cid:94)(cid:107)(cid:90)(cid:109)(cid:98)(cid:104)(cid:103)(cid:108)(cid:37)(cid:3)(cid:104)(cid:110)(cid:107)(cid:3)(cid:108)(cid:94)(cid:107)(cid:111)(cid:98)(cid:92)(cid:94)(cid:3) (cid:109)(cid:94)(cid:92)(cid:97)(cid:103)(cid:98)(cid:92)(cid:98)(cid:90)(cid:103)(cid:108)(cid:3)(cid:90)(cid:107)(cid:94)(cid:3)(cid:98)(cid:103)(cid:111)(cid:98)(cid:109)(cid:94)(cid:93)(cid:3)(cid:98)(cid:103)(cid:109)(cid:104)(cid:3)(cid:97)(cid:104)(cid:102)(cid:94)(cid:108)(cid:3)(cid:90)(cid:103)(cid:93)(cid:3)(cid:91)(cid:110)(cid:108)(cid:98)(cid:103)(cid:94)(cid:108)(cid:108)(cid:94)(cid:108)(cid:3)(cid:109)(cid:104)(cid:3)(cid:92)(cid:97)(cid:94)(cid:92)(cid:100)(cid:3)(cid:103)(cid:90)(cid:109)(cid:110)(cid:107)(cid:90)(cid:101)(cid:3)(cid:96)(cid:90)(cid:108)(cid:3)(cid:90)(cid:105)(cid:105)(cid:101)(cid:98)(cid:90)(cid:103)(cid:92)(cid:94)(cid:108)(cid:3) and our infrastructure. In turn, we encourage natural gas safety through school programs, public meetings and community celebrations. We believe that supporting gas safety awareness helps build stronger communities and provides our customers with the safest and most reliable energy available. 1 Jim Bartling, left, Atmos Energy’s manager of public affairs in Kansas, enjoys the fun at the annual open house of the City of Olathe Fire Department. The company has supported this family event for years to help ﬁreﬁghters teach safety awareness especially among children. 2 Atmos Energy’s employees say “thanks” to their neighbors in com- munities across the country by grilling thousands of hot dogs and hamburgers every year at civic get-togethers, local fairs and charity events. 3 Call before you dig! We constantly remind the public to ALWAYS call 811 to have utility lines marked before beginning any digging. By calling 811 just once, all underground utility lines will be marked by Atmos Energy, the electric utility, the telephone company and the water department to protect both the caller and the community. 3 2 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 21 4 4 Our company runs on natural gas…literally. New natural gas vehicles in Atmos Energy’s ﬂeet demon- strate the clean-burning beneﬁts of natural gas as well as its reliability as an all-American fuel. 5 Bill stuffers in English and Spanish give our customers safety information on natural gas topics and encourage them to watch out for household hazards. 6 Mayor John Shaddinger Jr. of Westwego, Louisiana, discusses safety needs in his community with Atmos Energy employees as part of our ongoing program to communicate with public ofﬁcials about pipeline safety awareness. 22 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 5 6 8 9 7 10 7 Atmos Energy works with schools and community groups to teach children and their parents to “smell, listen, look and leave” if they suspect a natural gas leak in their homes or yards. 8 Ray Granado, a manager of public affairs in the Dallas-Fort Worth area, is a big hit in the classroom when he brings our “scratch and sniff” cards so that kids learn what natural gas odorant smells like. 9 Atmos Energy displays the nationwide Call 811 logo on all its service vehicles, customers’ bills and printed materials as a reminder to always call before digging. 10 Brightly colored yellow markers along natural gas pipeline rights of way warn the public to call before digging and not to build structures or pile debris on the ground above a pipeline. ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 23 Fina ncia l Hi ghlight s Year E nded Se pt ember 30 Dollars in t housands, except per share data 2010 2009 Ch an ge Operating revenues Gross proﬁt Natural gas distribution net income Regulated transmission and storage net income Natural gas marketing net income Pipeline, storage and other net income Total Total assets Total capitalization* Net income per share — diluted Cash dividends per share Book value per share at end of year $ $ $ $ $ $ $ $ $ 4,789,690 1,364,941 125,949 41,486 27,729 10,675 205,839 6,763,791 3,987,899 2.20 1.34 24.16 $ $ $ $ $ $ $ $ $ 4,969,080 1,346,702 116,807 41,056 20,194 12,921 190,978 6,367,083 4,346,161 2.07 1.32 23.52 (3.6)% 1.4% 7.8% 1.0% 37.3% (17.4)% 7.8% 6.2% (8.2)% 6.3% 1.5% 2.7% 408,885 528,689 370,569 2,713 11.1% (18.9)% (4.5)% 2.5% 100% 2.0% 0.2% 2.2% 8.9% 3,178,844 49.3% 20,790 91,620 (1.2)% (5.1)% 0.9% Consolidated natural gas distribution throughput (MMcf) Consolidated regulated transmission and storage transportation volumes (MMcf) Consolidated natural gas marketing throughput (MMcf) Heating degree days † Degree days as a percentage of normal † Meters in service at end of year Return on average shareholders’ equity Shareholders’ equity as a percentage of total capitalization (including short-term debt) at end of year Shareholders of record Weighted average shares outstanding — diluted (000s) 454,175 428,599 353,853 2,780 102% 3,186,040 9.1% 48.7% 19,738 92,422 * Total capitalization represents the sum of shareholders’ equity and long-term debt, excluding current maturities. † Heating degree days are adjusted for service areas with weather-normalized operations. Summary Annual Report The ﬁnancial information presented in this report about Atmos Energy Corporation is condensed. Our complete ﬁnancial statements, including notes as well as manage- ment’s discussion and analysis of ﬁnancial condition and results of operations, are presented in our Annual Report on Form 10-K. Atmos Energy’s chief executive ofﬁcer and its chief ﬁnancial ofﬁcer have executed all certiﬁcations with respect to the ﬁnancial statements contained therein and have completed management’s report on internal control over ﬁnancial reporting, which are required under the Sarbanes- Oxley Act of 2002 and all related rules and regulations of the Securities and Exchange Commission. Investors may request, without charge, our Annual Report on Form 10-K for the ﬁscal year ended September 30, 2010, by calling Investor Relations at 972-855-3729 between 8 a.m. and 5 p.m. Central time. Our Annual Report on Form 10-K also is available on Atmos Energy’s website at www.atmosenergy.com. Additional investor information is presented on pages 35 and 36 of this report. In the Flow Lab of the Charles K. Vaughan Center, Atmos Energy technicians work with some of the most advanced natural gas metering technology available in the industry today. ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 25 At mos Energy a t a Gla nc e Year En ded Septembe r 30 (cid:31)(cid:105)(cid:204)(cid:105)(cid:192)(cid:195)(cid:202)(cid:136)(cid:152)(cid:202)(cid:195)(cid:105)(cid:192)(cid:219)(cid:136)(cid:86)(cid:105) Residential Commercial Industrial Public authority and other Total meters Heating degree days* Actual (weighted average) Percent of normal (cid:32)(cid:62)(cid:204)(cid:213)(cid:192)(cid:62)(cid:143)(cid:202)(cid:125)(cid:62)(cid:195)(cid:202)(cid:96)(cid:136)(cid:195)(cid:204)(cid:192)(cid:136)(cid:76)(cid:213)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:195)(cid:62)(cid:143)(cid:105)(cid:195)(cid:202)(cid:219)(cid:156)(cid:143)(cid:213)(cid:147)(cid:105)(cid:195)(cid:202)(cid:173)(cid:31)(cid:31)(cid:86)(cid:118)(cid:174) Residential Commercial Industrial Public authority and other Total (cid:32)(cid:62)(cid:204)(cid:213)(cid:192)(cid:62)(cid:143)(cid:202)(cid:125)(cid:62)(cid:195)(cid:202)(cid:96)(cid:136)(cid:195)(cid:204)(cid:192)(cid:136)(cid:76)(cid:213)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:204)(cid:192)(cid:62)(cid:152)(cid:195)(cid:171)(cid:156)(cid:192)(cid:204)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:219)(cid:156)(cid:143)(cid:213)(cid:147)(cid:105)(cid:195)(cid:202)(cid:173)(cid:31)(cid:31)(cid:86)(cid:118)(cid:174)(cid:202) (cid:47)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:152)(cid:62)(cid:204)(cid:213)(cid:192)(cid:62)(cid:143)(cid:202)(cid:125)(cid:62)(cid:195)(cid:202)(cid:96)(cid:136)(cid:195)(cid:204)(cid:192)(cid:136)(cid:76)(cid:213)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:204)(cid:133)(cid:192)(cid:156)(cid:213)(cid:125)(cid:133)(cid:171)(cid:213)(cid:204)(cid:202)(cid:173)(cid:31)(cid:31)(cid:86)(cid:118)(cid:174) (cid:22)(cid:152)(cid:204)(cid:105)(cid:192)(cid:195)(cid:105)(cid:125)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:62)(cid:86)(cid:204)(cid:136)(cid:219)(cid:136)(cid:204)(cid:222)(cid:202)(cid:173)(cid:31)(cid:31)(cid:86)(cid:118)(cid:174)(cid:202) (cid:10)(cid:156)(cid:152)(cid:195)(cid:156)(cid:143)(cid:136)(cid:96)(cid:62)(cid:204)(cid:105)(cid:96)(cid:202)(cid:152)(cid:62)(cid:204)(cid:213)(cid:192)(cid:62)(cid:143)(cid:202)(cid:125)(cid:62)(cid:195)(cid:202)(cid:96)(cid:136)(cid:195)(cid:204)(cid:192)(cid:136)(cid:76)(cid:213)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:204)(cid:133)(cid:192)(cid:156)(cid:213)(cid:125)(cid:133)(cid:171)(cid:213)(cid:204)(cid:202)(cid:173)(cid:31)(cid:31)(cid:86)(cid:118)(cid:174) (cid:10)(cid:156)(cid:152)(cid:195)(cid:156)(cid:143)(cid:136)(cid:96)(cid:62)(cid:204)(cid:105)(cid:96)(cid:202)(cid:192)(cid:105)(cid:125)(cid:213)(cid:143)(cid:62)(cid:204)(cid:105)(cid:96)(cid:202)(cid:204)(cid:192)(cid:62)(cid:152)(cid:195)(cid:147)(cid:136)(cid:195)(cid:195)(cid:136)(cid:156)(cid:152)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:195)(cid:204)(cid:156)(cid:192)(cid:62)(cid:125)(cid:105)(cid:202)(cid:204)(cid:192)(cid:62)(cid:152)(cid:195)(cid:171)(cid:156)(cid:192)(cid:204)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:219)(cid:156)(cid:143)(cid:213)(cid:147)(cid:105)(cid:195)(cid:202)(cid:173)MM(cid:86)(cid:118)(cid:174)(cid:202) (cid:10)(cid:156)(cid:152)(cid:195)(cid:156)(cid:143)(cid:136)(cid:96)(cid:62)(cid:204)(cid:105)(cid:96)(cid:202)(cid:152)(cid:62)(cid:204)(cid:213)(cid:192)(cid:62)(cid:143)(cid:202)(cid:125)(cid:62)(cid:195)(cid:202)(cid:147)(cid:62)(cid:192)(cid:142)(cid:105)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:204)(cid:133)(cid:192)(cid:156)(cid:213)(cid:125)(cid:133)(cid:171)(cid:213)(cid:204)(cid:202)(cid:173)MM(cid:86)(cid:118)(cid:174) (cid:34)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:192)(cid:105)(cid:219)(cid:105)(cid:152)(cid:213)(cid:105)(cid:195)(cid:202)(cid:173)(cid:228)(cid:228)(cid:228)(cid:195)(cid:174) Natural gas distribution sales revenues Residential Commercial Industrial Public authority and other Total gas distribution sales revenues Transportation revenues Other gas revenues Total natural gas distribution revenues Regulated transmission and storage revenues Natural gas marketing revenues Pipeline, storage and other revenues (cid:47)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:192)(cid:105)(cid:219)(cid:105)(cid:152)(cid:213)(cid:105)(cid:195)(cid:202)(cid:173)(cid:228)(cid:228)(cid:228)(cid:195)(cid:174)(cid:202) Other statistics Gross plant (000s) Net plant (000s) Miles of pipe Employees * Heating degree days are adjusted for service areas with weather-normalized operations. 26 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 2010 2009 2,910,672 262,778 2,090 10,500 3,186,040 2,901,577 265,843 2,193 9,231 3,178,844 2,780 102% 2,713 100% 190,424 103,028 19,047 10,129 322,628 135,865 458,493 (4,318) 454,175 428,599 353,853 159,762 91,379 18,563 12,413 282,117 130,691 412,808 (3,923) 408,885 528,689 370,569 $ $ $ $ 1,826,752 808,981 112,366 70,580 2,818,679 61,384 31,560 2,911,623 97,023 1,754,523 26,521 4,789,690 6,542,318 4,793,075 77,157 4,913 $ $ $ $ 1,830,140 838,184 135,633 89,183 2,893,140 59,115 31,711 2,983,966 119,427 1,832,912 32,775 4,969,080 6,086,618 4,439,103 76,942 4,891 Condense d Consoli da te d Ba lanc e S hee t s Year E nded Se pt ember 30 Dollars in t housands, except sh are data 2010 2009 Assets (cid:42)(cid:192)(cid:156)(cid:171)(cid:105)(cid:192)(cid:204)(cid:222)(cid:93)(cid:202)(cid:171)(cid:143)(cid:62)(cid:152)(cid:204)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:105)(cid:181)(cid:213)(cid:136)(cid:171)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202) Construction in progress (cid:29)(cid:105)(cid:195)(cid:195)(cid:202)(cid:62)(cid:86)(cid:86)(cid:213)(cid:147)(cid:213)(cid:143)(cid:62)(cid:204)(cid:105)(cid:96)(cid:202)(cid:96)(cid:105)(cid:171)(cid:192)(cid:105)(cid:86)(cid:136)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:62)(cid:147)(cid:156)(cid:192)(cid:204)(cid:136)(cid:226)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152) Net property, plant and equipment Current assets Cash and cash equivalents Accounts receivable, less allowance for doubtful accounts of $12,701 in 2010 and $11,478 in 2009 Gas stored underground Other current assets Total current assets (cid:20)(cid:156)(cid:156)(cid:96)(cid:220)(cid:136)(cid:143)(cid:143)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:136)(cid:152)(cid:204)(cid:62)(cid:152)(cid:125)(cid:136)(cid:76)(cid:143)(cid:105)(cid:202)(cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202) Deferred charges and other assets (cid:10)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:136)(cid:226)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:29)(cid:136)(cid:62)(cid:76)(cid:136)(cid:143)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195) (cid:45)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:189)(cid:202)(cid:105)(cid:181)(cid:213)(cid:136)(cid:204)(cid:222) Common stock, no par value (stated at $.005 per share); 200,000,000 shares authorized; issued and outstanding: 2010 – 90,164,103 shares, 2009 – 92,551,709 shares Additional paid-in capital Accumulated other comprehensive loss Retained earnings Shareholders’ equity (cid:29)(cid:156)(cid:152)(cid:125)(cid:135)(cid:204)(cid:105)(cid:192)(cid:147)(cid:202)(cid:96)(cid:105)(cid:76)(cid:204)(cid:202) Total capitalization Current liabilities Accounts payable and accrued liabilities Other current liabilities Short-term debt Current maturities of long-term debt Total current liabilities (cid:12)(cid:105)(cid:118)(cid:105)(cid:192)(cid:192)(cid:105)(cid:96)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:204)(cid:62)(cid:221)(cid:105)(cid:195) (cid:44)(cid:105)(cid:125)(cid:213)(cid:143)(cid:62)(cid:204)(cid:156)(cid:192)(cid:222)(cid:202)(cid:86)(cid:156)(cid:195)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:192)(cid:105)(cid:147)(cid:156)(cid:219)(cid:62)(cid:143)(cid:202)(cid:156)(cid:76)(cid:143)(cid:136)(cid:125)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202) Deferred credits and other liabilities $ $ $ $ 6,384,396 157,922 6,542,318 1,749,243 4,793,075 $ 5,981,420 105,198 6,086,618 1,647,515 4,439,103 131,952 111,203 273,207 319,038 150,995 875,192 740,148 355,376 6,763,791 451 1,714,364 (23,372) 486,905 2,178,348 1,809,551 3,987,899 266,208 413,640 126,100 360,131 1,166,079 829,128 350,521 430,164 6,763,791 232,806 352,728 132,203 828,940 740,064 358,976 6,367,083 463 1,791,129 (20,184) 405,353 2,176,761 2,169,400 4,346,161 207,421 457,319 72,550 131 737,421 570,940 344,403 368,158 6,367,083 $ $ $ ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 27 Condens ed Cons olid at ed St at eme nts of Inco me Year En ded Septembe r 30 Do llar s in th ousands , except per sha re data 2010 2009 2 0 08 $ 2,912,493 203,013 2,151,264 35,318 (512,398) 4,789,690 $ 2,984,765 209,658 2,336,847 41,924 (604,114) 4,969,080 $ 3,655,130 195,917 4,287,862 31,709 (949,313) 7,221,305 1,863,046 — 2,065,313 7,178 (510,788) 3,424,749 1,364,941 468,038 216,960 190,507 — 875,505 489,436 (339) 154,471 334,626 128,787 205,839 2.22 2.20 91,852 92,422 $ $ $ 1,960,137 — 2,252,235 12,428 (602,422) 3,622,378 1,346,702 494,010 217,208 182,700 5,382 899,300 447,402 (3,303) 152,830 291,269 100,291 190,978 2.08 2.07 91,117 91,620 $ $ $ 2,649,064 — 4,194,841 3,396 (947,322) 5,899,979 1,321,326 500,234 200,442 192,755 — 893,431 427,895 2,731 137,922 292,704 112,373 180,331 2.00 1.99 89,385 89,941 $ $ $ (cid:34)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:192)(cid:105)(cid:219)(cid:105)(cid:152)(cid:213)(cid:105)(cid:195) Natural gas distribution segment Regulated transmission and storage segment Natural gas marketing segment Pipeline, storage and other segment Intersegment eliminations Purchased gas cost Natural gas distribution segment Regulated transmission and storage segment Natural gas marketing segment Pipeline, storage and other segment Intersegment eliminations Gross proﬁt (cid:34)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:105)(cid:221)(cid:171)(cid:105)(cid:152)(cid:195)(cid:105)(cid:195) Operation and maintenance Depreciation and amortization Taxes, other than income Asset impairments Total operating expenses Operating income (cid:31)(cid:136)(cid:195)(cid:86)(cid:105)(cid:143)(cid:143)(cid:62)(cid:152)(cid:105)(cid:156)(cid:213)(cid:195)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:105)(cid:221)(cid:171)(cid:105)(cid:152)(cid:195)(cid:105)(cid:174)(cid:93)(cid:202)(cid:152)(cid:105)(cid:204) Interest charges Income before income taxes (cid:22)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:204)(cid:62)(cid:221)(cid:202)(cid:105)(cid:221)(cid:171)(cid:105)(cid:152)(cid:195)(cid:105)(cid:202) Net income Per share data Basic net income per share Diluted net income per share (cid:55)(cid:105)(cid:136)(cid:125)(cid:133)(cid:204)(cid:105)(cid:96)(cid:202)(cid:62)(cid:219)(cid:105)(cid:192)(cid:62)(cid:125)(cid:105)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:195)(cid:202)(cid:156)(cid:213)(cid:204)(cid:195)(cid:204)(cid:62)(cid:152)(cid:96)(cid:136)(cid:152)(cid:125)(cid:92) Basic Diluted 28 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT Condens ed C ons olid at ed St at eme nts of Ca s h Fl ow s Year E nded Se pt ember 30 Dollars in t housands 2010 2009 2 0 0 8 (cid:10)(cid:62)(cid:195)(cid:133)(cid:202)(cid:19)(cid:143)(cid:156)(cid:220)(cid:195)(cid:202)(cid:118)(cid:192)(cid:156)(cid:147)(cid:202)(cid:34)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:1)(cid:86)(cid:204)(cid:136)(cid:219)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195) Net income Adjustments to reconcile net income to net cash (cid:171)(cid:192)(cid:156)(cid:219)(cid:136)(cid:96)(cid:105)(cid:96)(cid:202)(cid:76)(cid:222)(cid:202)(cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:62)(cid:86)(cid:204)(cid:136)(cid:219)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:92) Asset impairments Depreciation and amortization: Charged to depreciation and amortization Charged to other accounts Deferred income taxes Stock-based compensation Debt ﬁnancing costs Other Changes in assets and liabilities Net cash provided by operating activities (cid:10)(cid:62)(cid:195)(cid:133)(cid:202)(cid:19)(cid:143)(cid:156)(cid:220)(cid:195)(cid:202)(cid:49)(cid:195)(cid:105)(cid:96)(cid:202)(cid:136)(cid:152)(cid:202)(cid:22)(cid:152)(cid:219)(cid:105)(cid:195)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:1)(cid:86)(cid:204)(cid:136)(cid:219)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195) Capital expenditures Other, net Net cash used in investing activities (cid:10)(cid:62)(cid:195)(cid:133)(cid:202)(cid:19)(cid:143)(cid:156)(cid:220)(cid:195)(cid:202)(cid:118)(cid:192)(cid:156)(cid:147)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:152)(cid:125)(cid:202)(cid:1)(cid:86)(cid:204)(cid:136)(cid:219)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195) Net increase (decrease) in short-term debt Net proceeds from issuance of long-term debt Settlement of Treasury lock agreement Repayment of long-term debt Cash dividends paid Repurchase of common stock Repurchase of equity rewards Issuance of common stock Net cash provided by (used in) ﬁnancing activities Net increase (decrease) in cash and cash equivalents (cid:10)(cid:62)(cid:195)(cid:133)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:86)(cid:62)(cid:195)(cid:133)(cid:202)(cid:105)(cid:181)(cid:213)(cid:136)(cid:219)(cid:62)(cid:143)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202)(cid:62)(cid:204)(cid:202)(cid:76)(cid:105)(cid:125)(cid:136)(cid:152)(cid:152)(cid:136)(cid:152)(cid:125)(cid:202)(cid:156)(cid:118)(cid:202)(cid:222)(cid:105)(cid:62)(cid:192)(cid:202) (cid:10)(cid:62)(cid:195)(cid:133)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:86)(cid:62)(cid:195)(cid:133)(cid:202)(cid:105)(cid:181)(cid:213)(cid:136)(cid:219)(cid:62)(cid:143)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202)(cid:62)(cid:204)(cid:202)(cid:105)(cid:152)(cid:96)(cid:202)(cid:156)(cid:118)(cid:202)(cid:222)(cid:105)(cid:62)(cid:192)(cid:202) $ 205,839 $ 190,978 $ 180,331 — 5,382 — 216,960 173 196,731 12,655 11,908 (1,245) 83,455 726,476 (542,636) (66) (542,702) 54,268 — — (131) (124,287) (100,450) (1,191) 8,766 (163,025) 20,749 111,203 131,952 217,208 94 129,759 14,494 10,364 (1,177) 352,131 919,233 (509,494) (7,707) (517,201) (283,981) 445,623 1,938 (407,353) (121,460) — — 27,687 (337,546) 64,486 46,717 111,203 $ 200,442 147 97,940 14,032 10,665 (5,492) (127,132) 370,933 (472,273) (10,736) (483,009) 200,174 — — (10,284) (117,288) — — 25,466 98,068 (14,008) 60,725 46,717 $ $ ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 29 Rep or t of Independent Regist ere d Pub li c A cco unti ng Fi r m on Condens ed Fi nanci al St at e me nt s The Board of Directors and Shareholders of Atmos Energy Corporation We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Atmos Energy Corporation at September 30, 2010 and 2009, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended September 30, 2010 (not presented separately herein); and in our report dated November 12, 2010, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated in all material respects in relation to the consolidated financial statements from which it has been derived. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Atmos Energy Corporation’s internal control over financial reporting as of September 30, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 12, 2010 (not presented separately herein) expressed an unqualified opinion thereon. Dallas, Texas November 12, 2010 30 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT Cons olidated Finan ci al and St a t i sti cal Su mma r y 2006– 20 10 Year E nded Se pt ember 30 (cid:9)(cid:62)(cid:143)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:45)(cid:133)(cid:105)(cid:105)(cid:204)(cid:202)(cid:12)(cid:62)(cid:204)(cid:62)(cid:202)(cid:62)(cid:204)(cid:202)(cid:45)(cid:105)(cid:171)(cid:204)(cid:105)(cid:147)(cid:76)(cid:105)(cid:192)(cid:202)(cid:206)(cid:228)(cid:202)(cid:173)(cid:228)(cid:228)(cid:228)(cid:195)(cid:174) Capital expenditures Net property, plant and equipment Working capital Total assets Shareholders’ equity Long-term debt, excluding current maturities Total capitalization Income Statement Data Operating revenues (000s) Gross proﬁt (000s) Net income (000s) Net income per diluted share Common Stock Data Shares outstanding (000s) End of year Weighted average Cash dividends per share Shareholders of record Market price— High Low End of year Book value per share at end of year Price/Earnings ratio at end of year Market/Book ratio at end of year Annualized dividend yield at end of year (cid:10)(cid:213)(cid:195)(cid:204)(cid:156)(cid:147)(cid:105)(cid:192)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:54)(cid:156)(cid:143)(cid:213)(cid:147)(cid:105)(cid:195)(cid:202)(cid:173)(cid:62)(cid:195)(cid:202)(cid:147)(cid:105)(cid:204)(cid:105)(cid:192)(cid:105)(cid:96)(cid:174) Consolidated distribution gas sales volumes (MMcf) Consolidated distribution gas transportation 2010 2009 2008 2007 2 0 0 6 $ $ $ $ $ $ $ 542,636 4,793,075 (290,887) 6,763,791 2,178,348 1,809,551 3,987,899 4,789,690 1,364,941 205,839 2.20 90,164 92,422 1.34 19,738 30.06 26.41 29.25 24.16 13.30 1.21 4.6% $ $ $ $ $ $ $ 509,494 4,439,103 91,519 6,367,083 2,176,761 2,169,400 4,346,161 4,969,080 1,346,702 190,978 2.07 92,552 91,620 1.32 20,790 28.80 20.20 28.18 23.52 13.61 1.20 4.7% $ $ $ $ $ $ $ 472,273 4,136,859 78,017 6,386,699 2,052,492 2,119,792 4,172,284 7,221,305 1,321,326 180,331 1.99 90,815 89,941 1.30 21,756 29.46 25.09 26.62 22.60 13.38 1.18 4.9% $ $ $ $ $ $ $ 392,435 3,836,836 149,217 5,895,197 1,965,754 2,126,315 4,092,069 5,898,431 1,250,082 168,492 1.91 89,327 87,486 1.28 22,829 33.11 26.47 28.32 22.01 14.83 1.29 4.5% $ $ $ $ $ $ $ 425,324 3,629,156 (1,616) 5,719,547 1,648,098 2,180,362 3,828,460 6,152,363 1,216,570 147,737 1.81 81,740 81,173 1.26 24,690 29.11 25.79 28.55 20.16 15.77 1.42 4.4% 322,628 282,117 292,676 297,327 272,033 volumes (MMcf) Consolidated distribution throughput (MMcf) 131,547 454,175 126,768 408,885 136,678 429,354 130,542 427,869 121,962 393,995 Consolidated transmission and storage transportation volumes (MMcf) Consolidated natural gas marketing throughput (MMcf) Meters in service at end of year Heating degree days* Degree days as a percentage of normal* Gas distribution average cost of gas per Mcf sold Gas distribution average transportation fee per Mcf Statistics Return on average shareholders’ equity Number of employees Net gas distribution plant per meter Gas distribution operation and maintenance expense per meter Meters per employee—gas distribution Times interest earned before income taxes 428,599 528,689 595,542 505,493 410,505 353,853 3,186,040 2,780 102% 5.77 .46 9.1% 4,913 1,243 114 676 3.09 $ $ $ $ 370,569 3,178,844 2,713 100% 6.95 .46 8.9% 4,891 1,165 116 678 2.82 $ $ $ $ $ $ $ $ 389,392 3,191,779 2,820 100% 9.05 .43 8.8% 4,750 1,091 122 700 3.06 $ $ $ $ 370,668 3,187,127 2,879 100% 8.09 .44 8.8% 4,653 1,020 119 713 2.75 283,962 3,181,199 2,527 87% 10.02 .49 8.9% 4,632 969 112 723 2.55 $ $ $ $ * Heating degree days are adjusted for service areas with weather-normalized operations. ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 31 Atm os Ene rgy Of fi ce rs Senior Management Team Regulated Divis ions Robert W. Best Executive Chairman of the Board Kim R. Cocklin President and Chief Executive Ofﬁcer (cid:27)(cid:176)(cid:202)(cid:28)(cid:105)(cid:219)(cid:136)(cid:152)(cid:202)(cid:1)(cid:142)(cid:105)(cid:192)(cid:195) President, Kentucky/Mid-States Division Richard A. Erskine President, Atmos Pipeline–Texas Division Fred E. Meisenheimer Senior Vice President, Chief Financial Ofﬁcer and Treasurer (cid:12)(cid:62)(cid:219)(cid:136)(cid:96)(cid:202)(cid:13)(cid:176)(cid:202)(cid:20)(cid:62)(cid:204)(cid:105)(cid:195) President, Mississippi Division Louis P. Gregory Senior Vice President and General Counsel Gary W. Gregory President, West Texas Division Michael E. Haefner Senior Vice President, Human Resources (cid:47)(cid:156)(cid:147)(cid:202)(cid:45)(cid:176)(cid:202)(cid:21)(cid:62)(cid:220)(cid:142)(cid:136)(cid:152)(cid:195)(cid:93)(cid:202)(cid:27)(cid:192)(cid:176) President, Louisiana Division John A. Paris President, Mid-Tex Division Gary L. Schlessman President, Colorado-Kansas Division 32 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT Atm os Ene rgy Of fi ce rs Nonr egulated Operations Shared Ser vices (continued) Mark S. Bergeron President, Atmos Energy Holdings, Inc. Richard J. Gius Vice President and Chief Information Ofﬁcer Share d Ser v ices Verlon R. Aston, Jr. Vice President, Governmental and Public Affairs Christopher T. Forsythe Vice President and Controller Susan K. Giles Vice President, Investor Relations Conrad E. Gruber Vice President, Strategic Planning (cid:12)(cid:220)(cid:62)(cid:143)(cid:62)(cid:202)(cid:27)(cid:176)(cid:202)(cid:28)(cid:213)(cid:133)(cid:152) Corporate Secretary Kenneth M. Malter Vice President, Gas Supply and Services (cid:31)(cid:62)(cid:192)(cid:219)(cid:136)(cid:152)(cid:202)(cid:29)(cid:176)(cid:202)(cid:45)(cid:220)(cid:105)(cid:105)(cid:204)(cid:136)(cid:152) Vice President, Customer Service ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 33 Boa rd of Dir ectors Robert W. Best Executive Chairman of the Board, Richard W. Cardin Kim R. Cocklin Richard W. Douglas (cid:44)(cid:213)(cid:76)(cid:105)(cid:152)(cid:202)(cid:13)(cid:176)(cid:202)(cid:13)(cid:195)(cid:181)(cid:213)(cid:136)(cid:219)(cid:105)(cid:143) Retired partner of Arthur President and Executive Vice President, Vice President for Andersen LLP Chief Executive Ofﬁcer, Jones Lang LaSalle LLC Community and Corporate Atmos Energy Corporation Nashville, Tennessee Atmos Energy Corporation Dallas, Texas Relations, The University Dallas, Texas Board member since 1997 Dallas, Texas Board member since 2007 of Texas Southwestern Board member since 1997 Committees: Audit (Chairman), Board member since 2009 Committees: Human Medical Center at Dallas Executive, Nominating and Corporate Governance Resources, Work Session/ Dallas, Texas Annual Meeting Board member since 2008 Committees: Audit, Human Resources Richard K. Gordon Robert C. Grable General Partner, Juniper Partner, Kelly Hart & Energy LP, Juniper Capital LP Hallman LLP Dr. Thomas C. Meredith Retired, formerly Phillip E. Nichol Nancy K. Quinn Retired Senior Vice President of Central Principal, Hanover Capital, LLC and Juniper Advisory LP Fort Worth, Texas Commissioner of Mississippi Division Staff, UBS East Hampton, New York Houston, Texas Board member since 2009 Institutions of Higher Learning PaineWebber Incorporated Board member since 2004 Board member since 2001 Committees: Audit, Human Jackson, Mississippi Dallas, Texas Committees: Audit, Committees: Human Resources Board member since 1995 Board member since 1985 Nominating and Corporate Resources (Chairman), Executive, Nominating and Corporate Governance Committees: Work Session/ Committees: Nominating Governance Annual Meeting (Chairman), and Corporate Governance Audit, Executive, Nominating (Chairman), Executive, Human and Corporate Governance Resources, Work Session/ Annual Meeting Stephen R. Springer Charles K. Vaughan Richard Ware II Lee E. Schlessman Retired Senior Vice President Retired Chairman President, Amarillo and General Manager, of the Board, National Bank Honorary Director President, Dolo Midstream Division, The Atmos Energy Corporation Amarillo, Texas Investment Company Williams Companies, Inc. Dallas, Texas Board member since 1994 Denver, Colorado Syracuse, Indiana Board member since 1983 Committees: Audit, Retired from Board in 1998 Board member since 2005 Lead Director since 2003 Nominating and Corporate Committee: Work Session/ Committee: Executive Governance, Work Annual Meeting (Chairman) Session/Annual Meeting 34 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT Corpor at e Inf or ma ti on Common Stock Listing New York Stock Exchange. Trading symbol: ATO Stock Transfer Agent and Registrar American Stock Transfer and Trust Company 59 Maiden Lane Plaza Level New York, New York 10038 800-543-3038 To inquire about your Atmos Energy common stock, please call AST at the telephone number above. You may use the agent’s interactive voice response system 24 hours a day to learn about transferring stock or to check your recent account activity, all without the assistance of a customer service representative. Please have available your Atmos Energy shareholder account number and your Social Security or federal taxpayer ID number. To speak to an AST customer service representative, please call the same number between 8 a.m. and 7 p.m. Eastern time, Mon- day through Thursday, or 8 a.m. to 5 p.m. Eastern time on Friday. You also may send an e-mail message on our agent’s website at www.amstock.com. Please refer to Atmos Energy in your e-mail message and include your Atmos Energy shareholder account number. Independent Registered Public Accounting Firm Ernst & Young LLP One Victory Park Suite 2000 2323 Victory Avenue Dallas, Texas 75219 214-969-8000 (cid:19)(cid:156)(cid:192)(cid:147)(cid:202)(cid:163)(cid:228)(cid:135)(cid:28) Atmos Energy Corporation’s Annual Report on Form 10-K is available at no charge from Investor Relations, Atmos Energy Corporation, P.O. Box 650205, Dallas, Texas 75265-0205 or by calling 972-855-3729 between 8 a.m. and 5 p.m. Central time. Atmos Energy’s Form 10-K also may be viewed on Atmos Energy’s website at www.atmosenergy.com. Annual Meeting of Shareholders The 2011 Annual Meeting of Shareholders will be held in the Pavilion Ballroom at the Belo Mansion, 2101 Ross Avenue, Dallas, Texas 75201 on Wednesday, February 9, 2011, at 9:30 a.m. Central time. Direct Stock Purchase Plan Atmos Energy Corporation has a Direct Stock Purchase Plan that is available to all investors. For an Enrollment Application Form and a Plan Prospectus, please call AST at 800-543-3038. The Prospectus is also available at www.atmosenergy.com. You may also obtain information by writing to Investor Relations, Atmos Energy Corporation, P.O. Box 650205, Dallas, Texas 75265-0205. This is not an offer to sell, or a solicitation to buy, any securities of Atmos Energy Corporation. Shares of Atmos Energy common stock purchased through the Direct Stock Purchase Plan will be offered only by Prospectus. Atmos Energy on the Internet Information about Atmos Energy is available on the Internet at www.atmosenergy.com. Our website includes news releases, current and historical ﬁnancial reports, other investor data, corporate governance documents, management biographies, customer information and facts about Atmos Energy’s operations. Atmos Energy Corporation Contacts To contact Atmos Energy’s Investor Relations, call 972-855-3729 between 8 a.m. and 5 p.m. Central time or send an e-mail message to InvestorRelations@atmosenergy.com. Securities analysts and investment managers, please contact: Susan K. Giles Vice President, Investor Relations 972-855-3729 (voice) 972-855-3040 (fax) InvestorRelations@atmosenergy.com ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT 35 (cid:19)(cid:156)(cid:192)(cid:220)(cid:62)(cid:192)(cid:96)(cid:135)(cid:143)(cid:156)(cid:156)(cid:142)(cid:136)(cid:152)(cid:125)(cid:202)(cid:45)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195) The matters discussed or incorporated by reference in this Summary Annual Report 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 report 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 report or any other of the Company’s 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-look- ing statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in this report. These risks and uncertainties are discussed in the Company’s Annual Report on Form 10-K for the ﬁscal year ended September 30, 2010. 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. Further, the Company undertakes no obligation to update or revise any of its forward-looking statements, whether as a result of new information, future events or otherwise. Other Information You can view this Summary Annual Report, our Annual Report on Form 10-K and other ﬁnancial documents for ﬁscal 2010 and previous years at www.atmosenergy.com. If you are a shareholder who would like to receive our Summary Annual Report and other company documents electronically in the future, please sign up for electronic distribution. It’s convenient and easy, and it saves the costs to produce and distribute these materials. To receive these documents over the Internet next year, please visit www.amstock.com and access your account to give your consent. Please remember that accessing our Summary Annual Report and other company documents over the Internet may result in charges to you from your Internet service provider or telephone company. Inside back cover: An Atmos Energy technician uses specialized protective equipment for working in underground conﬁned spaces. Atmos Energy’s culture of safely emphasizes taking all precautions to work safely and protect fellow employees as well as the public. Front cover: In Gas City at Atmos Energy’s new Charles K. Vaughan Center in Plano, Texas, service technicians learn and practice skills with the coaching and guidance of highly expert instructors. © 2010 Atmos Energy Corporation. All rights reserved. Atmos Energy® is a registered trademark of Atmos Energy Corporation. LEED and related logo is a trademark owned by the U.S. Green Building Council and is used by permission. 36 ATMOS ENERGY 2010 SUMMARY ANNUAL REPORT Atmos Energy Corporation P.O. Box 650205 Dallas, Texas 75265-0205 atmosenergy.com

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