/2 H?d 1$&%*'ATMOS ENERGY CORPORATION8'CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)'(In thousands)"December 31,"September 30, "1998 "1998"-------------"------------- 'ASSETS$'Property, plant and equipment"$1,466,670"$1,446,420* 'Less accum. depreciation and amort. "542,466 "528,560 "---------- "----------( 'Net property, plant and equipment "924,204 "917,860 'Current assets 'Cash and cash equivalents  "14,720  "4,735'Accounts receivable, net"118,309 "34,887('Inventories of supplies and mdse. "14,815 "15,219'Gas stored underground "49,746 "48,909'Prepayments "3,508 "3,630"----------"----------'Total current assets"201,098"107,380('Deferred charges and other assets"120,751"116,150"----------"----------"$1,246,053"$1,141,390"=========="==========+'LIABILITIES AND SHAREHOLDERS' EQUITY'Shareholders' equity'Common stock"$ 153"$ 152!'Additional paid-in capital"278,174"271,637'Retained earnings"106,509 "99,369"----------"----------!'Total shareholders' equity"384,836"371,158'Long-term debt"390,426"398,548 "---------- "----------!'Total capitalization!"775,262!"769,706"'Current liabilities1#'Current maturities of long-term debt  #"17,961 #"57,783$'Notes payable$"167,994 $"66,400%'Accounts payable %"80,786 %"44,742&'Taxes payable &"12,783 &"12,736''Customers' deposits '"11,470 '"12,029 ('Other current liabilities ("25,363 ("30,369)"----------)"---------- *'Total current liabilities*"316,357*"224,059+'Deferred income taxes +"82,393 +"80,2132,'Deferred credits and other liabilities ," 72,041 ,"67,412-"-----------"----------."$1,246,053."$1,141,390/"==========/"==========A1'See accompanying notes to condensed consolidated financial2'statements.5'ATMOS ENERGY CORPORATION>6'CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED),7'(In thousands, except per share data)9"Three months ended 9"Three months ended :"December 31,:"December 31,;"------------;"------------------- <"1998 <"1997="--------="-------->'Operating revenues>"$210,227>"$295,331?'Purchased gas cost?"119,019?"195,730@"--------@"--------A'Gross profit A"91,208 A"99,601C'Operating expensesD'Operation D"35,878 D"36,041E'Maintenance E"2,671 E"2,481$F'Depreciation and amortization F"13,600 F"11,908G'Taxes, other than income G"7,371 G"8,219H"--------H"--------I'Total operating expenses I"59,520 I"58,649J"--------J"--------K'Operating income K"31,688 K"40,952M'Other income M"1,720 M"763O'Interest charges, net O"9,073 O"9,309P"--------P"--------!Q'Income before income taxes Q"24,335 Q"32,406S'Income taxes S"8,955 S"12,284T"--------T"--------U'Net incomeU"$ 15,380U"$ 20,122V"========V"========!W'Basic net income per shareW"$ .51W"$ .68X"========X"========#Y'Diluted net income per shareY"$ .50Y"$ .68Z"========Z"========['Cash dividends per share["$ .275["$ .265\"========\"========]'Weighted average^'shares outstanding: `'Basic `"30,273 `"29,569a"========a"========b'Diluted b"30,516 b"29,749c"========c"========Af'See accompanying notes to condensed consolidated financialg'statements.j'ATMOS ENERGY CORPORATION6k'CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSl'(UNAUDITED)m'(In thousands)o"Three months endedo"Three months endedp"December 31,p"December 31,q"----------q"---------- r"1998 r"1997s"--------s"--------+t'Cash Flows From Operating Activitiesu'Net incomeu"$ 15,380u"$ 20,122*v'Adjustments to reconcile net income(w'to net cash provided by operatingx'activities$y'Depreciation and amortization"z'Charged to depreciation and{'amortization {"13,600 {"11,908 |'Charged to other accounts |"1,020 |"801}'Deferred income taxes }"2,180 }"(173))~'Net change in operating assets and'liabilities"(53,027)"(48,476)"--------"--------,'Net cash used by operating activities"(20,847)"(15,818)+'Cash Flows From Investing Activities'Capital expenditures"(19,900)"(24,525))'Retirements of property, plant and'equipment"(1,064) "197"--------"--------,'Net cash used in investing activities"(20,964)"(24,328)+'Cash Flows From Financing Activities$'Net increase in notes payable"101,594 "51,807'Cash dividends paid"(8,392)"(7,890)"'Repayment of long-term debt"(47,944)"(6,126)'Issuance of common stock "6,538 "5,390"--------"--------'Net cash provided by'financing activities "51,796 "43,181"--------"--------0'Net increase in cash and cash equivalents "9,985 "3,035-'Cash and cash equivalents at beginning'of period "4,735 "6,016"--------"--------''Cash and cash equivalents at end'of period"$ 14,720"$ 9,051"========"========A'See accompanying notes to condensed consolidated financial'statements.