AGL Resources Matches Year-Ago Record Earnings and Announces LNG Joint Venture

ATLANTA, GEORGIA, November 7, 1997 - AGL Resources Inc. (NYSE: ATG) today reported results for the fiscal year that ended September 30, 1997. The financial highlights from the year include the following:

• Earnings per share were $1.37, matching last year's record earnings.
• The company recorded a $1 million increase -- or 1.3 percent -- in consolidated net income to $76.6 million, compared with $75.6 million for the same period a year ago.
• The board of directors declared a quarterly dividend of 27 cents a share for shareholders, which, when paid in December, will mark 50 years of consecutive quarterly dividend payments.

The growth in net income was attributed to a 3.6 percent increase in operating margins from the natural gas distribution business and the company's wholly owned nonregulated business units. That increase in operating margins was offset partly by greater operating expenses, lower income from the company's marketing joint ventures, and higher interest expense versus the same period a year ago.

Despite the additional net income posted for fiscal 1997, earnings per share were unchanged from the previous year primarily because of a slight increase in the number of shares outstanding.

The company also reported it had entered into a joint venture with Southern Natural Gas Company to construct, own, and operate a new liquefied natural gas (LNG) storage facility, capable of providing natural gas supply services throughout the Southeast. Pending timely regulatory approval, construction of the Etowah LNG facility in Polk County, Georgia, will start in early 1999. The company expects the facility to begin operating in 2001. The plant will provide supplemental natural gas supplies to Atlanta Gas Light -- AGL Resources' primary subsidiary -- and other southeastern natural gas distributors.

"Etowah represents an opportunity to expand our core natural gas operations and enhance our marketing opportunities in the Southeast," said David R. Jones, AGL Resources' president and chief executive officer.

Mr. Jones continued, "This year about 95 percent of the $1.37 earnings per share was attributed to our utility operations, and we were pleased with its performance. Base revenues continued to grow as a result of new customer expansion of 2.3 percent, which again outpaced the industry average of about 1.6 percent. The utility also continued to hold expenses in line. Although our wholesale and retail propane operations and gas marketing joint ventures were affected adversely by a heating season that was 20 percent warmer than normal during fiscal 1997, I believe those operations are well positioned to achieve higher returns in fiscal 1998."

Fourth Quarter Figures Also Reported
For the three months ended September 30, 1997, the company posted a net loss of $3.4 million, or 6 cents a share, compared with a net loss of $2.1 million, or 4 cents a share, for the same period in 1996. The company typically reports losses in the fourth quarter because of the seasonality of its businesses.

The primary factor contributing to the quarter-over-quarter difference was lower recoveries of environmental response costs from insurance carriers and third parties.

The company also announced that it posted operating income of $7.2 million during its last quarter of fiscal 1997, up from the $6.8 million recorded for the fourth quarter a year ago.

Weather did not affect the comparability of net income and earnings per share significantly for the three- and 12-month periods because of the regulated utility's weather normalization adjustment riders.

Quarterly Dividend Declared
The company's board of directors today declared a quarterly dividend on its common stock of 27 cents per share. Payment will be made on December 1, 1997, to shareholders of record on November 14, 1997.

The dividend, which remains unchanged from the previous quarter, equates to $1.08 per share on an annualized basis. The December dividend will be the 200th consecutive dividend paid.

AGL Resources is the holding company of Atlanta Gas Light, the largest natural gas distribution company in the Southeast, serving more than 1.4 million customers in Georgia and, through Chattanooga Gas, in southern Tennessee. Although natural gas distribution is AGL Resources' core business, it also is engaged in other energy-related businesses, including natural gas and power marketing, wholesale and retail propane sales, gas supply services, and energy-related consumer products and services.