/2H0    d 1$&%*'ATMOS ENERGY CORPORATION"'CONSOLIDATED BALANCE SHEETS^SEPTEMBER 30,^SEPTEMBER 30, ^2000 ^1999('(IN THOUSANDS, EXCEPT SHARE DATA) 'ASSETSC 'Property, plant and equipment............................... "$1,546,569 "$1,526,834C 'Construction in progress....................................  "33,234  "22,424 "---------- "---------- "1,579,803 "1,549,258C 'Less accumulated depreciation and amortization.............. "597,457 "583,476"----------"----------A'Net property, plant and equipment........................."982,346"965,782'Current assetsA'Cash and cash equivalents................................. "7,379 "8,585@'Accounts receivable, less allowance for doubtful accounts'of $10,589>'in 2000 and $9,231 in 1999............................."114,448 "70,564A'Inventories............................................... "6,456 "8,209A'Gas stored underground.................................... "64,222 "44,653A'Prepayments............................................... "8,101 "3,142"----------"----------9'Total current assets.............................."200,606"135,153C'Deferred charges and other assets..........................."165,806"129,602"----------"----------"$1,348,758"$1,230,537"=========="==========%'CAPITALIZATION AND LIABILITIES!'Shareholders' equity>"'Common stock, no par value (stated at $.005 per share);=#'100,000,000 shares authorized; issued and outstanding:!$'2000 -- 31,952,340 shares,>%'1999 -- 31,247,800 shares..............................%"$ 160%"$ 156A&'Additional paid-in capital................................&"306,887&"293,359A''Retained earnings......................................... '"83,154 '"83,231A('Accumulated other comprehensive income.................... ("2,265 ("917)"----------)"----------9*'Shareholders' equity..............................*"392,466*"377,663C+'Long-term debt..............................................+"363,198+"377,483,"----------,"----------9-'Total capitalization..............................-"755,664-"755,146.'Current liabilitiesA/'Current maturities of long-term debt...................... /"17,566 /"17,848A0'Short-term debt...........................................0"250,0470"168,304A1'Accounts payable.......................................... 1"73,031 1"64,167A2'Taxes payable............................................. 2"10,844 2"848A3'Customers' deposits....................................... 3"9,923 3"9,657A4'Other current liabilities................................. 4"21,085 4"25,9515"----------5"----------96'Total current liabilities.........................6"382,4966"286,775C7'Deferred income taxes.......................................7"131,6197"112,610C8'Deferred credits and other liabilities...................... 8"78,979 8"76,0069"----------9"----------:"$1,348,758:"$1,230,537;"==========;"==========C='See accompanying notes to consolidated financial statements.?'ATMOS ENERGY CORPORATION(@'CONSOLIDATED STATEMENTS OF INCOMEA^YEAR ENDED A^YEAR ENDED A^YEAR ENDED B^SEPTEMBER 30,B^SEPTEMBER 30,B^SEPTEMBER 30, C^2000 C^1999 C^1998,D'(IN THOUSANDS, EXCEPT PER SHARE DATA)CF'Operating revenues..........................................F"$850,152F"$690,196F"$848,208CG'Purchased gas cost..........................................G"524,446G"390,402G"516,372H"--------H"--------H"--------CI'Gross profit................................................I"325,706I"299,794I"331,836J'Operating expensesAK'Operation.................................................K"140,249K"148,065K"131,336AL'Maintenance............................................... L"7,648 L"9,141 L"10,278AM'Depreciation and amortization............................. M"63,855 M"56,874 M"47,555AN'Taxes, other than income.................................. N"28,638 N"31,475 N"29,788O"--------O"--------O"--------9P'Total operating expenses..........................P"240,390P"245,555P"218,957Q"--------Q"--------Q"--------CR'Operating income............................................ R"85,316 R"54,239R"112,879S'Other incomeAT'Equity in earnings of unconsolidated investment........... T"7,307 T"7,156 T"3,920AU'Other, net................................................ U"7,437 U"2,967 U"5,851V"--------V"--------V"--------9W'Total other income................................ W"14,744 W"10,123 W"9,771CX'Interest charges, net....................................... X"43,823 X"37,063 X"35,579Y"--------Y"--------Y"--------CZ'Income before income taxes.................................. Z"56,237 Z"27,299 Z"87,071C['Income taxes................................................ ["20,319 ["9,555 ["31,806\"--------\"--------\"--------9]'Net income........................................]"$ 35,918]"$ 17,744]"$ 55,265^"========^"========^"========C_'Basic net income per share.................................._"$ 1.14_"$ .58_"$ 1.85`"========`"========`"========Ca'Diluted net income per share................................a"$ 1.14a"$ .58a"$ 1.84b"========b"========b"========Cc'Cash dividends per share....................................c"$ 1.14c"$ 1.10c"$ 1.06d"========d"========d"========+e'Weighted average shares outstanding:Af'Basic..................................................... f"31,461 f"30,566 f"29,822g"========g"========g"========Ah'Diluted................................................... h"31,594 h"30,819 h"30,031i"========i"========i"========Ck'See accompanying notes to consolidated financial statements.m'ATMOS ENERGY CORPORATION6n'CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITYp^ACCUMULATEDq^COMMON STOCKq^COMMON STOCKq^ADDITIONAL q^OTHERr^NUMBER OF r^STATEDr^PAID-INr^COMPREHENSIVEr^RETAINED s^SHARES s^VALUEs^CAPITAL s^INCOMEs^EARNINGS s^TOTAL(t'(IN THOUSANDS, EXCEPT SHARE DATA))u'Balance, September 30, 1997.......u"29,642,437 u"$148u"$251,174 u"$ --u"$ 75,938u"$327,260)v'Net income........................ v"-- v"-- v"-- v"-- v"55,265 v"55,265 w'Cash dividends ($1.06 per'x'share).......................... x"-- x"-- x"-- x"--x"(31,834)x"(31,834)y'Common stock issued:'z'Restricted stock grant plan.....z"114,250z"1 z"2,898 z"-- z"-- z"2,899'{'Direct stock purchase plan......{"531,353{"3 {"14,482 {"-- {"-- {"14,485'|'ESOP............................ |"52,473 |"-- |"1,485 |"-- |"-- |"1,485&}'Long-term stock plan for United$~'Cities Division.............. ~"55,500 ~"-- ~"1,533 ~"-- ~"-- ~"1,533&'Outside directors stock-for-fee$'plan......................... "2,306 "-- "65 "-- "-- "65"---------- "----"-------- "------"--------"--------)'Balance, September 30, 1998......."30,398,319 "152"271,637 "-- "99,369"371,158'Comprehensive income:''Net income...................... "-- "-- "-- "-- "17,744 "17,744"'Unrealized holding gains on$'investments, net............. "-- "-- "-- "917 "-- "917 'Cash dividends ($1.10 per''share).......................... "-- "-- "-- "--"(33,882)"(33,882)'Common stock issued:''Restricted stock grant plan..... "56,850 "-- "1,732 "-- "-- "1,732''Direct stock purchase plan......"694,905"4 "17,429 "-- "-- "17,433''ESOP............................ "89,435 "-- "2,362 "-- "-- "2,362&'Long-term stock plan for United$'Cities Division.............. "6,450 "-- "150 "-- "-- "150&'Outside directors stock-for-fee$'plan......................... "1,841 "-- "49 "-- "-- "49"---------- "----"-------- "------"--------"--------)'Balance, September 30, 1999......."31,247,800 "156"293,359 "917 "83,231"377,663'Comprehensive income:''Net income...................... "-- "-- "-- "-- "35,918 "35,918"'Unrealized holding gains on$'investments, net............. "-- "-- "-- "1,348 "-- "1,348 'Cash dividends ($1.14 per''share).......................... "-- "-- "-- "--"(35,995)"(35,995)'Common stock:''Direct stock purchase plan......"440,990"2 "8,588 "-- "-- "8,590''ESOP............................"258,049"1 "4,842 "-- "-- "4,843&'Long-term stock plan for United$'Cities Division.............. "4,200 "-- "66 "-- "-- "66&'Outside directors stock-for-fee$'plan......................... "2,601"1 "50 "-- "-- "51!'Cancellation of restricted$'stock........................"(1,300) "-- "(18) "-- "-- "(18)"---------- "----"-------- "------"--------"--------)'Balance, September 30, 2000......."31,952,340 "$160"$306,887 "$2,265"$ 83,154"$392,466"========== "===="======== "======"========"========C'See accompanying notes to consolidated financial statements.'ATMOS ENERGY CORPORATION,'CONSOLIDATED STATEMENTS OF CASH FLOWS^YEAR ENDED^YEAR ENDED^YEAR ENDED ^ SEPTEMBER 30,^ SEPTEMBER 30,^SEPTEMBER 30, ^2000 ^1999 ^1998'(IN THOUSANDS)+'CASH FLOWS FROM OPERATING ACTIVITIES?'Net income.............................................."$ 35,918"$ 17,744"$ 55,265?'Adjustments to reconcile net income to net cash provided'by operating activities:%'Depreciation and amortization::'Charged to depreciation and amortization........... "63,855 "56,874 "47,555:'Charged to other accounts.......................... "3,065 "4,800 "5,861<'Deferred income taxes (benefit)...................... "18,251 "31,874"(3,968)<'Gain on sale of non-utility assets..................."(5,831) "--"(3,335))'Changes in assets and liabilities:<'(Increase) decrease in accounts receivable..........."(42,613)"(35,677) "36,330<'(Increase) decrease in inventories................... "2,037 "7,010"(2,886)<'(Increase) decrease in gas stored underground........"(17,518) "4,256 "(787)<'(Increase) decrease in prepayments..................."(4,930) "488 "2,387<'Increase in deferred charges and other assets........"(13,053)"(12,012)"(20,671)<'Increase (decrease) in accounts payable.............. "8,643 "19,425"(17,884)<'Increase (decrease) in taxes payable................. "9,607"(11,888) "8,673<'Decrease in customers' deposits...................... "(909)"(2,372)"(3,069)<'Decrease in other current liabilities................"(4,866)"(4,418)"(22,213)<'Increase in deferred credits and other liabilities... "2,540 "8,594 "10,393"---------"---------"---------:'Net cash provided by operating activities.......... "54,196 "84,698 "91,651.'CASH FLOWS USED IN INVESTING ACTIVITIES?'Capital expenditures...................................."(75,557)"(110,353)"(134,989)?'Acquisition of Missouri assets of ANG..................."(32,000) "-- "--?'Retirements of property, plant and equipment, net....... "957 "757 "178?'Proceeds from sale of assets, net....................... "6,467 "-- "15,997"---------"---------"---------7'Net cash used in investing activities..........."(100,133)"(109,596)"(118,814)+'CASH FLOWS FROM FINANCING ACTIVITIES?'Net increase (decrease) in short-term debt.............. "81,743"101,904"(100,900)?'Proceeds from issuance of long-term debt................ "-- "--"154,445?'Repayment of long-term debt............................."(14,567)"(61,000)"(16,296)?'Cash dividends paid....................................."(35,995)"(33,882)"(31,834)?'Issuance of common stock................................ "13,550 "21,726 "20,467"---------"---------"---------7'Net cash provided by financing activities....... "44,731 "28,748 "25,882"---------"---------"---------A'Net increase (decrease) in cash and cash equivalents......"(1,206) "3,850"(1,281)A'Cash and cash equivalents at beginning of year............ "8,585 "4,735 "6,016"---------"---------"---------A'Cash and cash equivalents at end of year.................."$ 7,379"$ 8,585"$ 4,735"========="========="=========C'See accompanying notes to consolidated financial statements.