/2HE)))&d 1$&|&A%|Page #*'ATMOS ENERGY CORPORATION"'CONSOLIDATED BALANCE SHEETS' ' "September 30,"September 30,  "----------"---------- 'ASSETS( "(In thousands, except share data)( "(In thousands, except share data)$ 'Property, plant and equipment  3A  I2A 'Construction in progress  {  R "---------- "---------- U4A 2A/'Less accumulated depreciation and amort. dA lpA"----------"----------('Net property, plant and equipment )A F'A'Current assets 'Cash and cash equivalents  ~+@'Accounts receivable, less allowance for doubtful accounts+'of $2,188 in 1997 and $2,462 in 1996 c@ p?@'Inventories -0 G6'Gas stored underground @@ *@'Prepayments   "----------"----------'Total current assets ȊA XPA('Deferred charges and other assets pO@ @@"----------"---------- 70A d.A"=========="==========%'CAPITALIZATION AND LIABILITIES 'Shareholders' equity>!'Common stock, no par value (stated at $.005 per share);;"'authorized 75,000,000 shares; issued and outstanding9#'1997 - 29,642,437 shares, 1996 - 29,241,859 shares # #!$'Additional paid-in capital $0A $ A%'Retained earnings % @ % n@&"----------&"----------!''Total shareholders' equity 'pA 'A('Long-term debt (~A (A)"----------)"----------*'Total capitalization *;#A *`|"A+'Current liabilities+,'Current maturities of long-term debt ,a; ,'A-'Notes payable to banks - lA -^@.'Accounts payable .@@ .@/'Taxes payable / /+0'Customers' deposits 0: 0A 1'Other current liabilities 1@ 1:]2"----------2"---------- 3'Total current liabilities 3A 3A4'Deferred income taxes 4@q@ 4@-5'Deferred credits and other liabilities 5`@ 5@@6"----------6"---------- 770A 7d.A8"==========8"==========C:'See accompanying notes to consolidated financial statements. <'>' ?'ATMOS ENERGY CORPORATION(@'CONSOLIDATED STATEMENTS OF INCOMEC' D"Year ended September 30,D"Year ended September 30,D"Year ended September 30,E"------------E"------------E"--------- F F FG"-----------G"----------G"--------+I"(In thousands, except pershare data)+I"(In thousands, except pershare data)+I"(In thousands, except pershare data)K'Operating revenues K+A KF+A K&AL'Purchased gas cost L:!A L(!A LmAM"--------M"--------M"--------N'Gross profit NA NA NQAP'Operating expensesQ'Operation Q3A Q A QAR'Maintenance R. R- RV,$S'Depreciation and amortization S @ S@X@ S@T'Taxes, other than income T} T.v TsU'Income taxes U7 U[ U@V"--------V"--------V"--------W'Total operating expenses W|A Wx%A W( AX"--------X"--------X"--------Z'Operating income Z@ Z@ Z @['Other income (expense)\'Interest and]'investment income ]" ] ] ^'Other, net ^ ^ ^_"--------_"--------_"--------`'Total other incomea'(expense) a a a c'Interest charges c`g@ c{ cud"--------d"--------d"--------f'Net income f] f@ fpg"========g"========g"========h'Net income per share hQ? hQ? h(\?i"========i"========i"========j'Cash dividends per share j)\(? j\(\? jQ?k"========k"========k"========!l'Average shares outstanding lr l2q lHjm"========m"========m"========Cq'See accompanying notes to consolidated financial statements. s(u' v'ATMOS ENERGY CORPORATION!w'CONSOLIDATED STATEMENTS OFx'SHAREHOLDERS' EQUITYz' {'  |"Common |"stock}"----------}"---------}"Additional~"Number of ~"Stated~"paid-in~"Retained "shares "value"capital"earnings"----------"-------"--------"--------("(In thousands, except share data)("(In thousands, except share data)("(In thousands, except share data)("(In thousands, except share data)"'Balance, September 30, 1994 ԵxA  8A pS@'Net income"-"-"- p&'Cash dividends ($.96 per share)"-"-"- 'Common stock issued:"'Restricted stock grant plan 2"- "-"'Direct stock purchase plans A  "-'ESOP/401(k) plans  A  M"-'Woodward Marketing acq. A  "-'Public offering 5A  I"- 'Other"-"- -"-"---------- "----"--------"--------"'Balance, September 30, 1995 zA  0' A @'Net income"-"-"- @&'Cash dividends ($.98 per share)"-"-"- 'Common stock issued:"'Restricted stock grant plan \@  "-"'Direct stock purchase plans p]A  "-+'Outside directors stock-for-fee plan = "- L"- 'ESOP (A  9"-'Monarch Gas Co acq. 0P A   'Oceana Heights acq.  !A  0 R 'Other"-"- "-"---------- "----"--------"--------"'Balance, September 30, 1996 0 {A   A  n@'(continued) )' 'ATMOS ENERGY CORPORATION!'CONSOLIDATED STATEMENTS OF'SHAREHOLDERS' EQUITY'(continued)' '  "Common "stock"----------"---------"Additional"Number of "Stated"paid-in"Retained "shares "value"capital"earnings"----------"-------"--------"--------("(In thousands, except share data)("(In thousands, except share data)("(In thousands, except share data)("(In thousands, except share data)"'Balance, September 30, 1996 0 {A   A  n@'Net income"-"-"- ]''Cash dividends ($1.01 per share)"-"-"- ј'Common stock issued:"'Restricted stock grant plan j@   "-"'Direct stock purchase plans @"- `"-+'Outside directors stock-for-fee plan  "- H"-'ESOP/401(k) plans 8 A  "-,'Less: UCGC net income for the quarter'ended December 31, 1996"-"-"- "----------"-------"--------"--------"'Balance, September 30, 1997 PD|A  0A  @"=========="======="========"========C'See accompanying notes to consolidated financial statements. *' 'ATMOS ENERGY CORPORATION,'CONSOLIDATED STATEMENTS OF CASH FLOWS' "Year ended September 30,"Year ended September 30,"Year ended September 30,"---------"------------"-----------   "--------"----------"----------"(In thousands)"(In thousands)"(In thousands)+'CASH FLOWS FROM OPERATING ACTIVITIES'Net income 8 @ p6'Adjustments to reconcile net income to net cash('provided by operating activities:%'Depreciation and amortization:/'Charged to depreciation and amortization @@ @X@ @ 'Charged to other accounts   'Deferred income taxes   , 'Other"-  %('Change in assets and liabilities:1'(Increase) decrease in accounts receivable } g )'(Increase) decrease in inventories  * 4'(Increase) decrease in gas stored underground \  -)'(Increase) decrease in prepayments x  ]4'Increase in deferred charges and other assets   .'Increase (decrease) in accounts payable  \ W +'Increase (decrease) in taxes payable   1'Increase (decrease) in customers' deposits N P 7'Increase (decrease) in other current liabilities ,p  9'Increase in deferred credits and other liabilities 9  V"---------"---------"---------0'Net cash provided by operating activities @ Pe@ pR@+'CASH FLOWS FROM INVESTING ACTIVITIES'Capital expenditures  P ^3'Retirements of property, plant and equipment  L  "---------"---------"---------,'Net cash used in investing activities 0 P 5' - Continued - +' 'ATMOS ENERGY CORPORATION8'CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)"Year ended September 30,"Year ended September 30,"Year ended September 30,"---------"------------"-----------   "--------"----------"----------"(In thousands)"(In thousands)"(In thousands)+'CASH FLOWS FROM FINANCING ACTIVITIES/'Net increase (decrease) in notes payable @ `@ `/'Proceeds from issuance of long-term debt @"- [@"'Repayment of long-term debt   'Cash dividends paid ј  'Issuance of common stock .% K! @ "-------- "-------- "--------0 'Net cash provided by financing activities  @  U  e "-------- "-------- "--------; 'Net increase (decrease) in cash and cash equivalents    .  5 'Cash and cash equivalents at beginning of year  ~+  P$  "--------"--------"--------/'Cash and cash equivalents at end of year  ~+ P$"========"========"========C'See accompanying notes to consolidated financial statements.