Earnings Increase Reported During 2nd Quarter at AGL Resources Inc.

ATLANTA, GEORGIA, May 2, 1997 - AGL Resources Inc. (NYSE: ATG) today announced that for the second quarter that ended March 31, 1997, the company's operating revenue, net income, and earnings per share exceeded levels of a year ago. Net income and earnings per share increased nearly 9 percent, and operating revenue advanced 3 percent compared with the same period in 1996.

Second quarter operating revenue grew to $496.7 million, from $482 million a year ago. The company reported net income was up $4 million, to $49 million, while earnings per share were 88 cents, an increase of 7 cents per share over the same quarter in 1996.

The company said its natural gas distribution business was the primary contributor to the bottom-line results. Overall, increased operating revenues from customer growth, coupled with lower operating expenses during the quarter, created the earnings increase.

"We are very satisfied with our second quarter results. They underscore the strength of our core natural gas business and the steps we're taking to manage expenses, improve customer service, and enhance shareholder value," said David R. Jones, president and chief executive officer of AGL Resources.

Six-Month Results Announced

The company's net income, earnings per share, and operating revenue also improved for the six-month period that ended March 31, 1997, compared with the same period a year ago.

Net income for the six-month period ended March 31, 1997, grew $4.5 million to $78.6 million, up from $74.1 million a year ago. Earnings per share increased 5 percent to $1.41 per share, compared with $1.34 per share for the same period a year ago. Operating revenues advanced $63.6 million during the quarter, or 8 percent, to $876.3 million, up from $812.7 million for the same period in 1996.

Customer growth was the primary contributor to the increased earnings and revenues.

Weather Normalization

Because of the company's weather normalization adjustment riders, weather did not affect the comparability of net income and earnings per share significantly for the three- and six-month periods ended March 31, 1997, and 1996.

Quarterly Dividend Declared

The company's board of directors today declared a quarterly dividend of 27 cents per share on its common stock and dividends on its preferred stock as prescribed in each issue. Payment will be made on June 1, 1997, to shareholders of record on May 16, 1997.

The dividend, which remains unchanged from the previous quarter, equates to $1.08 per share on an annualized basis. The June dividend will be the 198th consecutive dividend paid.

AGL Resources Inc. is the holding company of Atlanta Gas Light Company, the largest natural gas distribution company in the Southeast, serving more than 1.4 million customers in Georgia and, through Chattanooga Gas Company, 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, energy management services, and energy-related consumer products.