&/2H,    d 1$&%*'ATMOS ENERGY CORPORATION"'CONSOLIDATED BALANCE SHEETS('(IN THOUSANDS, EXCEPT SHARE DATA)^SEPTEMBER 30^SEPTEMBER 30 ^2001 ^2000 'ASSETSC'Property, plant and equipment..............................."$2,055,986"$1,546,569C'Construction in progress.................................... "53,881 "33,234 "2,109,867 "1,579,803C 'Less accumulated depreciation and amortization.............. "774,469 "597,457A 'Net property, plant and equipment......................... "1,335,398 "982,346'Current assetsA'Cash and cash equivalents................................. "15,263 "7,379A'Cash held on deposit in margin account.................... "66,666 "--@'Accounts receivable, less allowance for doubtful accounts>'of $16,151 in 2001 and $10,589 in 2000................."124,046 "77,264A'Inventories............................................... "6,041 "6,456A'Gas stored underground.................................... "89,555 "64,222A'Assets from risk management activities.................... "95,968 "--A'Deferred gas cost......................................... "10,999 "37,184A'Other current assets and prepayments...................... "15,713 "8,101>'Total current assets..................................."424,251"200,606C'Intangible assets........................................... "12,125 "878C'Goodwill.................................................... "64,745 "3,110C'Noncurrent assets from risk management activities........... "29,771 "--C'Deferred charges and other assets..........................."169,890"161,818"$2,036,180"$1,348,758%!'CAPITALIZATION AND LIABILITIES"'Shareholders' equity>#'Common stock, no par value (stated at $.005 per share);=$'100,000,000 shares authorized; issued and outstanding:>%'2001 -- 40,791,501 shares, 2000 -- 31,952,340 shares...%"$ 204%"$ 160A&'Additional paid-in capital................................&"489,948&"306,887A''Retained earnings......................................... '"95,132 '"83,154A('Accumulated other comprehensive income (loss).............("(1,420) ("2,265>*'Shareholders' equity...................................*"583,864*"392,466C+'Long-term debt..............................................+"692,399+"363,198>-'Total capitalization...................................-"1,276,263-"755,664.'Current liabilitiesA/'Current maturities of long-term debt...................... /"20,695 /"17,566A0'Short-term debt...........................................0"201,2470"250,047A1'Accounts payable and accrued liabilities.................. 1"84,471 1"73,031A2'Taxes payable............................................. 2"11,620 2"10,844A3'Customers' deposits....................................... 3"32,351 3"9,923A4'Liabilities from risk management activities...............4"119,484 4"--A5'Other current liabilities................................. 5"41,161 5"21,085>7'Total current liabilities..............................7"511,0297"382,496C8'Deferred income taxes.......................................8"138,9348"131,619C9'Noncurrent liabilities from risk management activities...... 9"7,412 9"--C:'Deferred credits and other liabilities......................:"102,542 :"78,979<"$2,036,180<"$1,348,758B>'See accompanying notes to consolidated financial statements?' @'ATMOS ENERGY CORPORATION(A'CONSOLIDATED STATEMENTS OF INCOME,B'(IN THOUSANDS, EXCEPT PER SHARE DATA)C^YEAR ENDED C^YEAR ENDEDC^YEAR ENDED D^SEPTEMBER 30D^ SEPTEMBER 30D^SEPTEMBER 30 E^2001 E^2000 E^1999CG'Operating revenues..........................................G"$1,442,275G"$850,152G"$690,196CH'Purchased gas cost..........................................H"1,067,555H"524,446H"390,402CJ'Gross profit................................................J"374,720J"325,706J"299,794CL'Gas trading margin.......................................... L"488 L"-- L"--N'Operating expensesAO'Operation.................................................O"133,240O"140,249O"148,065AP'Maintenance............................................... P"6,368 P"7,648 P"9,141AQ'Depreciation and amortization............................. Q"67,664 Q"63,855 Q"56,874AR'Taxes, other than income.................................. R"37,655 R"28,638 R"31,475>T'Total operating expenses...............................T"244,927T"240,390T"245,555CV'Operating income............................................V"130,281 V"85,316 V"54,239W'Other incomeAX'Equity in earnings of Woodward Marketing, L.L.C. ......... X"8,062 X"7,307 X"7,156AY'Miscellaneous income (expense), net.......................Y"(1,874) Y"7,437 Y"2,967>['Total other income..................................... ["6,188 ["14,744 ["10,123C\'Interest charges, net....................................... \"47,011 \"43,823 \"37,063C^'Income before income taxes.................................. ^"89,458 ^"56,237 ^"27,299C_'Income taxes................................................ _"33,368 _"20,319 _"9,555>a'Net income.............................................a"$ 56,090a"$ 35,918a"$ 17,744Cc'Basic net income per share..................................c"$ 1.47c"$ 1.14c"$ .58Ce'Diluted net income per share................................e"$ 1.47e"$ 1.14e"$ .58Cg'Cash dividends per share....................................g"$ 1.16g"$ 1.14g"$ 1.10+i'Weighted average shares outstanding:Aj'Basic..................................................... j"38,156 j"31,461 j"30,566Al'Diluted................................................... l"38,247 l"31,594 l"30,819o'See accompanying notes +p'to consolidated financial statementsq' r'ATMOS ENERGY CORPORATIONs'CONSOLIDATED STATEMENTSt'OF SHAREHOLDERS' EQUITY(u'(IN THOUSANDS, EXCEPT SHARE DATA)u"ACCUMULATED v^OTHERw^COMMON STOCKw^COMMON STOCKw^ADDITIONALw^COMPREHENSIVEx^NUMBER OF x^STATEDx^PAID-IN x^INCOMEx^RETAINED y^SHARES y^VALUEy^CAPITAL y^(LOSS)y^EARNINGS y^TOTAL3}'Balance, September 30, 1998.................}"30,398,319 }"$152}"$271,637}"$ --}"$ 99,369}"$371,158~'Comprehensive income:1'Net income................................ "-- "-- "-- "-- "17,744 "17,744/'Unrealized holding gains on investments,/'net..................................... "-- "-- "-- "917 "-- "917"--------/'Total comprehensive income.............. "18,6613'Cash dividends ($1.10 per share)............ "-- "-- "-- "--"(33,882)"(33,882)'Common stock issued:1'Restricted stock grant plan............... "56,850 "-- "1,732 "-- "-- "1,7321'Direct stock purchase plan................"694,905"4 "17,429 "-- "-- "17,4331'ESOP...................................... "89,435 "-- "2,362 "-- "-- "2,362-'Long-term stock plan for United Cities/'Division................................ "6,450 "-- "150 "-- "-- "1501'Outside directors stock-for-fee plan...... "1,841 "-- "49 "-- "-- "493'Balance, September 30, 1999................."31,247,800 "156"293,359 "917 "83,231"377,663'Comprehensive income:1'Net income................................ "-- "-- "-- "-- "35,918 "35,918/'Unrealized holding gains on investments,/'net..................................... "-- "-- "-- "1,348 "-- "1,348"--------/'Total comprehensive income.............. "37,2663'Cash dividends ($1.14 per share)............ "-- "-- "-- "--"(35,995)"(35,995)'Common stock:1'Direct stock purchase plan................"440,990"2 "8,588 "-- "-- "8,5901'ESOP......................................"258,049"1 "4,842 "-- "-- "4,843-'Long-term stock plan for United Cities/'Division................................ "4,200 "-- "66 "-- "-- "661'Outside directors stock-for-fee plan...... "2,601"1 "50 "-- "-- "511'Cancellation of restricted stock.........."(1,300) "-- "(18) "-- "-- "(18)3'Balance, September 30, 2000................."31,952,340 "160"306,887 "2,265 "83,154"392,466'Comprehensive income:1'Net income................................ "-- "-- "-- "-- "56,090 "56,0900'Unrealized holding losses on investments,/'net..................................... "-- "-- "--"(3,685) "--"(3,685)"--------/'Total comprehensive income.............. "52,4053'Cash dividends ($1.16 per share)............ "-- "-- "-- "--"(44,112)"(44,112)'Common stock issued:1'Direct stock purchase plan................"411,159"2 "8,682 "-- "-- "8,6841'ESOP......................................"225,945"1 "5,098 "-- "-- "5,099-'Long-term stock plan for United Cities/'Division................................ "15,300 "-- "240 "-- "-- "2401'Long-term incentive plan.................. "17,172 "-- "272 "-- "-- "272.'Directors equity incentive compensation/'plan.................................... "2,740 "-- "60 "-- "-- "601'Outside directors stock-for-fee plan...... "2,152 "-- "50 "-- "-- "501'Woodward Marketing, L.L.C. acquisition...."1,423,193"7 "26,650 "-- "-- "26,6571'Public offering..........................."6,741,500 "34"142,009 "-- "--"142,0433'Balance, September 30, 2001................."40,791,501 "$204"$489,948"$(1,420)"$ 95,132"$583,864 'See accompanying notes to('consolidated financial statements' 'ATMOS ENERGY CORPORATION,'CONSOLIDATED STATEMENTS OF CASH FLOWS'(IN THOUSANDS)^YEAR ENDED ^YEAR ENDED ^YEAR ENDED ^SEPTEMBER 30,^SEPTEMBER 30,^SEPTEMBER 30, ^2001 ^2000 ^1999+'CASH FLOWS FROM OPERATING ACTIVITIESA'Net income................................................"$ 56,090"$ 35,918"$ 17,744?'Adjustments to reconcile net income to net cash provided'by operating activities:%'Depreciation and amortization:='Charged to depreciation and amortization.............. "67,664 "63,855 "56,874='Charged to other accounts............................. "2,806 "3,065 "4,800?'Deferred income taxes................................... "18,501 "18,251 "31,874?'Deferred lease income................................... "(979) "-- "--2'Net assets/liabilities from risk management>'activities............................................. "13,881 "-- "--?'Gain on sale of non-regulated assets.................... "--"(5,831) "--)'Changes in assets and liabilities:?'Increase in cash held on deposit in margin account......"(62,181) "-- "--?'(Increase) decrease in accounts receivable.............. "65,032"(11,260)"(29,576)?'Decrease in inventories................................. "374 "2,037 "7,010?'(Increase) decrease in gas stored underground..........."(3,376)"(17,518) "4,256?'(Increase) decrease in deferred gas cost................ "15,440"(31,353)"(6,101)6'(Increase) decrease in other current assets and>'prepayments............................................"(6,646)"(4,930) "488?'Increase in deferred charges and other assets..........."(12,143)"(13,053)"(12,012)?'Increase (decrease) in accounts payable................."(94,769) "8,643 "19,425?'Increase (decrease) in taxes payable.................... "791 "9,607"(11,888)?'Increase (decrease) in customers' deposits.............. "6,078 "(909)"(2,372)?'Increase (decrease) in other current liabilities........ "9,019"(4,866)"(4,418)?'Increase in deferred credits and other liabilities...... "7,413 "2,540 "8,594:'Net cash provided by operating activities.......... "82,995 "54,196 "84,698.'CASH FLOWS USED IN INVESTING ACTIVITIESA'Capital expenditures......................................"(113,109)"(75,557)"(110,353)A'Acquisitions.............................................."(363,399)"(32,000) "--A'Retirements of property, plant and equipment, net........."(1,460) "957 "757A'Assets for leasing activities............................."(5,377) "-- "--A'Increase in cash from acquisition......................... "8,644 "-- "--A'Proceeds from sale of assets, net......................... "6,625 "6,467 "--:'Net cash used in investing activities.............."(468,076)"(100,133)"(109,596)+'CASH FLOWS FROM FINANCING ACTIVITIESA'Net increase (decrease) in short-term debt................"(48,800) "81,743"101,904A'Net proceeds from issuance of long-term debt.............."347,099 "-- "--A'Repayment of long-term debt..............................."(17,670)"(14,567)"(61,000)A'Cash dividends paid......................................."(44,112)"(35,995)"(33,882)A'Issuance of common stock.................................. "14,405 "13,550 "21,726A'Net proceeds from equity offering........................."142,043 "-- "--:'Net cash provided by financing activities.........."392,965 "44,731 "28,748C'Net increase (decrease) in cash and cash equivalents........ "7,884"(1,206) "3,850C'Cash and cash equivalents at beginning of year.............. "7,379 "8,585 "4,735C'Cash and cash equivalents at end of year...................."$ 15,263"$ 7,379"$ 8,585' 'See accompanying notes +'to consolidated financial statements