/2HD d 1$&%*B'PART 1. FINANCIAL INFORMATIONItem 1. Financial Statements'ATMOS ENERGY CORPORATION8'CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)'(In thousands)"June 30,"September 30, "1999 "1998 'ASSETS"-----------"-------------$'Property, plant and equipment"$1,516,909"$1,446,420*'Less accum. depreciation and amort."567,949"528,560 'Current assets "---------- "----------( 'Net property, plant and equipment "948,960 "917,860 'Cash and cash equivalents  "14,441  "4,735 'Accounts receivable, net  "54,359  "34,887( 'Inventories of supplies and mdse.  "14,362  "15,219'Gas stored underground "19,795 "48,909'Prepayments "2,514 "3,630"----------"----------'Total current assets"105,471"107,380('Deferred charges and other assets"123,573"116,150"----------"----------"$1,178,004"$1,141,390"=========="==========@'LIABILITIES AND SHAREHOLDERS' EQUITY Shareholders' equity'Common stock"$ 155"$ 152!'Additional paid-in capital"288,392"271,637'Retained earnings"112,922 "99,369'Treasury stock "(91)"-"----------"----------!'Total shareholders' equity"401,378"371,158'Long-term debt"381,389"398,548"----------"----------'Total capitalization"782,767"769,706 'Current liabilities+!'Current maturities of long-term debt !"18,218 !"57,783"'Notes payable""110,228 ""66,400#'Accounts payable #"50,251 #"44,742$'Taxes payable $"12,781 $"12,736%'Customers' deposits %"10,289 %"12,029 &'Other current liabilities &"30,973 &"30,369'"----------'"---------- ('Total current liabilities("232,740("224,059)'Deferred income taxes )"86,483 )"80,213-*'Deferred credits and other liabilities *"76,014 *"67,412+"----------+"----------,"$1,178,004,"$1,141,390-"==========-"==========L.'See accompanying notes to condensed consolidated financialstatements.0'ATMOS ENERGY CORPORATION>1'CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED),2'(In thousands, except per share data)'3' 4"Three months ended4"Three months ended5"June 30,5"June 30,6"-----------------6"-------- 7"1999 7"19988"--------8"--------9'Operating revenues9"$109,5909"$137,311:'Purchased gas cost :"56,214 :"79,945;"--------;"--------<'Gross profit <"53,376 <"57,366='Operating expenses>'Operation >"29,796 >"27,280?'Maintenance ?"2,342 ?"2,660$@'Depreciation and amortization @"14,043 @"12,332A'Taxes, other than income A"6,783 A"7,212B"--------B"--------C'Total operating expenses C"52,964 C"49,484D"--------D"--------E'Operating income E"412 E"7,882F'Other income F"1,126 F"2,536G'Interest charges, net G"9,689 G"7,791H"--------H"--------(I'Income (loss) before income taxesI"(8,151) I"2,627J'Income taxes (benefit)J"(2,856) J"951K"--------K"--------L'Net income (loss)L"$ (5,295)L"$ 1,676M"========M"========(N'Basic net income (loss) per shareN"$ (.17)N"$ .06O"========O"========*P'Diluted net income (loss) per shareP"$ (.17)P"$ .06Q"========Q"========R'Cash dividends per shareR"$ .275R"$ .265S"========S"========,T'Weighted average shares outstanding: U'Basic U"30,669 U"29,910V"========V"========W'Diluted W"30,920 W"29,941X"========X"========LY'See accompanying notes to condensed consolidated financialstatements.['ATMOS ENERGY CORPORATION>\'CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED),]'(In thousands, except per share data)'^' _"Nine months ended_"Nine months ended`"June 30,`"June 30,a"-------------a"----------- b"1999 b"1998c"--------c"--------d'Operating revenuesd"$581,243d"$721,192e'Purchased gas coste"324,264e"440,254f"--------f"--------g'Gross profitg"256,979g"280,938h'Operating expensesi'Operation i"99,986 i"96,548j'Maintenance j"6,169 j"7,429k'Litigation settlement k"3,250k"-$l'Depreciation and amortization l"41,443 l"36,116m'Taxes, other than income m"23,188 m"24,808n"--------n"--------o'Total operating expenseso"174,036o"164,901p"--------p"--------q'Operating income q"82,943q"116,037r'Other income r"5,201 r"5,540s'Interest charges, net s"26,928 s"26,436t"--------t"--------!u'Income before income taxes u"61,216 u"95,141v'Income taxes v"22,336 v"35,945w"--------w"--------x'Net incomex"$ 38,880x"$ 59,196y"========y"========!z'Basic net income per sharez"$ 1.28z"$ 1.99{"========{"========#|'Diluted net income per share|"$ 1.27|"$ 1.98}"========}"========~'Cash dividends per share~"$ .825~"$ .795"========"========,'Weighted average shares outstanding: 'Basic "30,464 "29,739"========"========'Diluted "30,710 "29,948"========"========L'See accompanying notes to condensed consolidated financialstatements.'ATMOS ENERGY CORPORATIONB'CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)'(In thousands)"Nine months ended"Nine months ended"June 30,"June 30,"-------------"---------- "1999 "1998"-------"-------+'Cash Flows From Operating Activities'Net income"$38,880"$59,196K'Adjustments to reconcile net incometo net cash provided by operatingS'activities Depreciation and amortization Charged to depreciation and'amortization "41,443 "36,116 'Charged to other accounts "3,024 "4,327&'Deferred income taxes (benefit) "6,270 "(192))'Net change in operating assets and'liabilities "17,134 "(671)"-------"--------'Net cash provided by'operating activities"106,751 "98,776+'Cash Flows From Investing Activities'Capital expenditures"(79,782)"(82,533))'Retirements of property, plant and'equipment "4,215 "2,937"-------"--------,'Net cash used in investing activities"(75,567)"(79,596)+'Cash Flows From Financing Activities$'Net increase in notes payable "43,828 "1,950'Cash dividends paid"(25,327)"(23,810)!'Issuance of long-term debt"- "1,000"'Repayment of long-term debt"(56,724)"(11,796)'Issuance of common stock "16,745 "15,748"-------"--------,'Net cash used in financing activities"(21,478)"(16,908)"-------"--------0'Net increase in cash and cash equivalents "9,706 "2,272-'Cash and cash equivalents at beginning'of period "4,735 "6,016"-------"--------''Cash and cash equivalents at end'of period"$14,441"$ 8,288"======="========