AGL Resources Reports Second Quarter 2009 Results; Reaffirms Fiscal 2009 Earnings...

AGL Resources Reports Second Quarter 2009 Results; Reaffirms Fiscal 2009
Earnings Guidance
- Second quarter 2009 diluted earnings per share (EPS) of $0.26 per share,
compared with $(0.15) per diluted share in second quarter 2008

ATLANTA, July 30 /PRNewswire-FirstCall/ -- AGL Resources Inc. (NYSE: AGL)
today reported second quarter net income of $20 million, or $0.26 per basic
(and diluted) share, compared with a loss of $11 million, or $(0.15) per basic
(and diluted) share for the second quarter of 2008.

The company's second quarter 2009 results reflect improved year-over-year
contributions from the distribution operations and wholesale services segments
and lower results from the energy investments segment.

For the six months ended June 30, 2009, net income was $139 million, or $1.81
per diluted share, compared with net income of $78 million, or $1.01 per
diluted share, for the same period in 2008.

"Our businesses have performed well during the first half of the year," said
John W. Somerhalder II, AGL Resources chairman, president and chief executive
officer. "In a challenging economic environment, our focus continues to be on
effectively managing our costs, improving our operating performance and
executing our regulatory strategy."

BUSINESS SEGMENT RESULTS

Distribution Operations
The distribution operations segment contributed EBIT (earnings before interest
and taxes) of $63 million, compared with $57 million in the second quarter of
2008.

The improvement over the prior-year quarter was due primarily to higher
charges to marketers in Georgia for the storage of natural gas inventory and
increased pipeline replacement revenues at Atlanta Gas Light. A revision in
estimated unbilled natural gas volumes at Elizabethtown Gas, recorded in the
second quarter of 2008, also contributed to the favorable year-over-year
variance.

Operating expenses of $130 million were $7 million higher than in the same
period in 2008. Expenses were higher as a result of increases in
environmental liabilities, pension costs and depreciation expense.

Year-to-date segment EBIT for distribution operations was $193 million,
compared with $180 million in 2008.

Retail Energy Operations

The retail energy operations segment, consisting of SouthStar Energy Services,
reported second-quarter 2009 EBIT of $5 million, compared with $6 million in
the second quarter of 2008.

Higher margins resulting from favorable market conditions and decreasing
commodity prices were offset by a decline in average customer count and a
change in the retail pricing mix, with a higher number of customers on
lower-margin retail pricing plans as compared to last year, reflecting
increased competition in the retail pricing market for natural gas in Georgia.
Operating margins in the Ohio and Florida markets also were down slightly
during the period relative to the prior year.

Operating expenses in the second quarter of 2009 were flat relative to the
prior-year period.

Year-to-date segment EBIT for retail energy operations was $68 million, equal
to last year's contribution for the same period.

Wholesale Services

The wholesale services segment, consisting primarily of Sequent Energy
Management, recorded an EBIT loss of $11 million for the second quarter of
2009, compared with an EBIT loss of $65 million in the second quarter of 2008.

The significant year-over-year variance was driven mainly by $55 million, or
$0.45 per diluted share, in pre-tax hedge losses recorded in the wholesale
services segment during the second quarter of 2008, resulting from a
significant increase in forward New York Mercantile Exchange (NYMEX) natural
gas prices and the widening of transportation basis spreads. The decline in
forward NYMEX natural gas prices and the narrowing of transportation basis
spreads during 2009 resulted in $13 million in hedge gains during this year's
second quarter. Commercial activity in the wholesale services segment was
lower year-over-year, reflecting lower market volatility.

Operating expenses were essentially flat as compared to the prior-year period.

Year-to-date segment EBIT for wholesale services was $27 million, compared
with an EBIT loss of $64 million for the same period last year.

Energy Investments

The energy investments segment contributed EBIT of $2 million for the second
quarter of 2009, compared with EBIT of $10 million during the prior-year
period. The decline in year-over-year results reflects $7 million in
operating margin associated with a network expansion project completed by AGL
Networks in the second quarter of 2008. Interruptible revenues at Jefferson
Island Storage & Hub also were down $1 million in the second quarter of 2009
as compared with the prior-year period.

Operating expenses for the energy investments segment were flat
year-over-year.

Year-to-date segment EBIT was $4 million, compared with $15 million in 2008.
This decline also reflects the previously mentioned $7 million in operating
margin related to a network expansion project completed by AGL Networks in
2008.

INTEREST EXPENSE AND INCOME TAXES

Interest expense for the second quarter of 2009 was $24 million, down $2
million from the second quarter of 2008. The decline in interest expense
resulted from a decrease in short-term interest rates, partially offset by
higher average debt outstanding. Interest expense for the six months ended
June 30, 2009 was $49 million, down $7 million from the same period last year,
for the same reasons.

Income taxes for the second quarter of 2009 were $13 million, compared with an
income tax benefit of $7 million in the second quarter of 2008. For the six
months ended June 30, 2009, income tax expense was $85 million, compared with
$47 million for the same period in 2008. These increases primarily reflect
higher consolidated earnings year-to-date relative to the same period in 2008.

DIVIDEND DECLARED

The Board of Directors of AGL Resources has declared a quarterly dividend of
$0.43 per share on the company's common stock. The dividend will be paid
September 1, 2009 to shareholders of record at the close of business on August
14, 2009. The dividend payment will mark the 247(th) consecutive quarterly
dividend the company has paid since 1948.

2009 EARNINGS OUTLOOK

AGL Resources continues to expect its 2009 earnings to be in the range of
$2.65 to $2.75 per diluted share. This earnings expectation assumes normal
weather and average volatility in natural gas prices. However, unanticipated
changes in these events or other circumstances could materially impact
earnings, and could result in earnings for 2009 significantly above or below
this outlook.

EARNINGS CONFERENCE CALL/WEBCAST

AGL Resources will host its second-quarter 2009 earnings conference call and
webcast on Thursday, July 30, 2009, at 9 a.m. Eastern Time. The webcast can
be accessed via the Investor Relations section of the AGL Resources Web site
at www.aglresources.com, or by dialing 800/591-6923 in the United States or
617/614-4907 outside the United States. The confirmation code is 28957444. A
replay of the conference call will be available by dialing 888/286-8010 in the
United States or 617/801-6888 outside the United States, with a confirmation
code of 97042045. A replay of the call also will be available on the Investor
Relations section of the company's Web site for seven days following the call.

About AGL Resources

AGL Resources (NYSE: AGL), an Atlanta-based energy services company, serves
approximately 2.3 million customers in six states. The company also owns
Houston-based Sequent Energy Management, an asset manager serving natural gas
wholesale customers throughout North America. As a 70 percent owner in the
SouthStar partnership, AGL Resources markets natural gas to consumers in
Georgia under the Georgia Natural Gas brand. The company also owns and
operates Jefferson Island Storage & Hub, a high-deliverability natural gas
storage facility near the Henry Hub in Louisiana. For more information, visit
www.aglresources.com.

Forward-Looking Statements
Certain expectations and projections regarding our future performance
referenced in this press release are forward-looking statements.
Forward-looking statements involve matters that are not historical facts and
because these statements involve anticipated events or conditions,
forward-looking statements often include words such as "anticipate," "assume,"
"believe," "can," "could," "estimate," "expect," "forecast," "future," "goal,"
"indicate," "intend," "may," "outlook," "plan," "potential," "predict,"
"project," "seek," "should," "target," "would," or similar expressions.
Forward-looking statements contained in this press release include, without
limitation, the information under the heading "2009 Earnings Outlook." Our
expectations are not guarantees and are based on currently available
competitive, financial and economic data along with our operating plans. While
we believe our expectations are reasonable in view of the currently available
information, our expectations are subject to future events, risks and
uncertainties, and there are several factors - many beyond our control - that
could cause results to differ significantly from our expectations.

Such events, risks and uncertainties include, but are not limited to, changes
in price, supply and demand for natural gas and related products; the impact
of changes in state and federal legislation and regulation including changes
related to climate change; actions taken by government agencies on rates and
other matters; concentration of credit risk; utility and energy industry
consolidation; the impact on cost and timeliness of construction projects by
government and other approvals, development project delays, adequacy of supply
of diversified vendors, unexpected change in project costs, including the cost
of funds to finance these projects; the impact of acquisitions and
divestitures; direct or indirect effects on our business, financial condition
or liquidity resulting from a change in our credit ratings or the credit
ratings of our counterparties or competitors; interest rate fluctuations;
financial market conditions, including recent disruptions in the capital
markets and lending environment and the current economic downturn; and general
economic conditions; uncertainties about environmental issues and the related
impact of such issues; the impact of changes in weather, including climate
change, on the temperature-sensitive portions of our business; the impact of
natural disasters such as hurricanes on the supply and price of natural gas;
acts of war or terrorism; and other factors which are provided in detail in
our filings with the Securities and Exchange Commission, which we incorporate
by reference in this press release. Forward-looking statements are only as of
the date they are made, and we do not undertake to update these statements to
reflect subsequent changes.

Supplemental Information
Company management evaluates segment financial performance based on earnings
before interest and taxes (EBIT), which includes the effects of corporate
expense allocations and on operating margin. EBIT is a non-GAAP (accounting
principles generally accepted in the United States of America) financial
measure that includes operating income, other income and expenses. Items that
are not included in EBIT are financing costs, including debt and interest
expense and income taxes. The company evaluates each of these items on a
consolidated level and believes EBIT is a useful measurement of our
performance because it provides information that can be used to evaluate the
effectiveness of our businesses from an operational perspective, exclusive of
the costs to finance those activities and exclusive of income taxes, neither
of which is directly relevant to the efficiency of those operations.

Operating margin is a non-GAAP measure calculated as operating revenues minus
cost of gas, excluding operation and maintenance expense, depreciation and
amortization, and taxes other than income taxes. These items are included in
the company's calculation of operating income. The company believes operating
margin is a better indicator than operating revenues of the contribution
resulting from customer growth, since cost of gas is generally passed directly
through to customers.

EBIT and operating margin should not be considered as alternatives to, or more
meaningful indicators of, the company's operating performance than operating
income or net income attributable to AGL Resources Inc. as determined in
accordance with GAAP. In addition, the company's EBIT and operating margin may
not be comparable to similarly titled measures of another company.

Reconciliation of non-GAAP financial measures referenced in this press release
and otherwise in the earnings conference call and webcast is attached to this
press release and is available on the company's Web site at
www.aglresources.com under the Investor Relations section.

AGL Resources Inc.
Condensed Consolidated Statements of Income
For the Three and Six Months Ended
June 30, 2009 and 2008
Unaudited
(In millions, except per share amounts)

Three Months Six Months
------------ ----------

6/30/2009 6/30/2008 Fav/(Unfav) 6/30/2009 6/30/2008 Fav/(Unfav)
--------- --------- ---------- --------- --------- ----------
Operating
Revenues $377 $444 $(67) $1,372 $1,456 $(84)

Cost of Gas 152 275 123 741 932 191

Operation and
Maintenance
Expenses 119 114 (5) 244 233 (11)

Depreciation
and
Amortization 39 38 (1) 78 74 (4)

Taxes Other
Than Income 12 11 (1) 24 23 (1)
--- --- --- --- --- ---
Total Operating
Expenses 322 438 116 1,087 1,262 175
--- --- --- --- --- ---
Operating
Income 55 6 49 285 194 91
Other
Income 3 3 - 5 4 1
--- --- --- --- --- ---
Earnings
Before
Interest &
Taxes 58 9 49 290 198 92
Interest
Expense, Net 24 26 2 49 56 7
--- --- --- --- --- ---
Earnings
Before
Income Taxes 34 (17) 51 241 142 99
Income Tax
Expense
(Benefit) 13 (7) (20) 85 47 (38)
--- --- --- --- --- ---

Net Income
(Loss) 21 (10) 31 156 95 61

Less Net
Income
Attributable
to
Noncontrolling
Interest 1 1 - 17 17 -
--- --- --- --- --- ---
Net Income
(Loss)
Attributable
to AGL
Resources
Inc. $20 $(11) $31 $139 $78 $61
=== === === === === ===

Earnings
(Loss)
Per Common
Share
Basic $0.26 $(0.15) $0.41 $1.81 $1.02 $0.79
Diluted $0.26 $(0.15) $0.41 $1.81 $1.01 $0.80
Shares
Outstanding
Basic 76.7 76.2 (0.5) 76.8 76.2 (0.6)
Diluted 76.9 76.2 (0.7) 76.9 76.4 (0.5)

AGL Resources Inc.
EBIT Schedule
For the Three and Six Months Ended
June 30, 2009 and 2008
Unaudited
(In millions, except per share amounts)

Three Months Six Months
------------ ----------
6/30/2009 6/30/2008 Fav/(Unfav) 6/30/2009 6/30/2008 Fav/(Unfav)
--------- --------- ---------- --------- --------- ----------
Distribution
Operations $63 $57 $6 $193 $180 $13
Retail Energy
Operations 5 6 (1) 68 68 -
Wholesale
Services (11) (65) 54 27 (64) 91
Energy
Investments 2 10 (8) 4 15 (11)
Corporate (1) 1 (2) (2) (1) (1)
--- --- --- --- --- ---
Consolidated
EBIT 58 9 49 290 198 92
--- --- --- --- --- ---
Interest Expense,
Net 24 26 2 49 56 7
Income Tax
Expense
(Benefit) 13 (7) (20) 85 47 (38)
--- --- --- --- --- ---
Net Income
(Loss) 21 (10) 31 156 95 61

Less Net Income
Attributable
to the
Noncontrolling
Interest 1 1 - 17 17 -
--- --- --- --- --- ---
Net Income
(Loss)
Attributable to
AGL Resources
Inc. $20 $(11) $31 $139 $78 $61
=== === === === === ===

Earnings
(Loss) per
Common Share
Basic $0.26 $(0.15) $0.41 $1.81 $1.02 $0.79
=== === === === === ===
Diluted $0.26 $(0.15) $0.41 $1.81 $1.01 $0.80
=== === === === === ===

AGL Resources Inc.
Reconciliation of Operating Margin to Operating Revenues
For the Three and Six Months Ended
June 30, 2009 and 2008
Unaudited
(In millions)

Three Months Six Months
------------ ----------
6/30/2009 6/30/2008 Fav/(Unfav) 6/30/2009 6/30/2008 Fav/(Unfav)
--------- --------- ---------- --------- --------- ----------
Operating
Revenues $377 $444 $(67) $1,372 $1,456 $(84)
Cost of Gas 152 275 123 741 932 191
--- --- --- --- --- ---
Operating
Margin $225 $169 $56 $631 $524 $107
=== === === === === ===

SOURCE AGL Resources Inc.

Financial, Steve Cave, Office: +1-404-584-3801, Cell: +1-678-642-4258,
scave@aglresources.com, or Media, Tami Gerke, Office: +1-404-584-3873, Cell:
+1-404-358-2307, tgerke@aglresources.com