SOUTHERN Co GAS 8K Regulation FD Disclosure | GAS 12 Nov 04

Financial Overview
and 2005 Outlook

Richard T. O’Brien

Executive Vice President and Chief Financial Officer

Forward-Looking Statements

Statements in this presentation that are not historical facts, including statements
regarding our estimates, beliefs, expectations, intentions, strategies or
projections, may be “forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995. All forward-looking statements involve a
number of risks and uncertainties that could cause actual results to differ
materially from the estimates, beliefs, expectations, intentions, strategies and
projections reflected in or suggested by the forward-looking statements.
Information concerning risks and uncertainties that could cause differences
between actual results and forward-looking statements is contained in our filings
with the Securities and Exchange Commission, including our Form 10-Q for the
quarter ended September 30, 2004, filed with the commission on October 27,
2004 and its Form 8-K filed with the commission on October 27, 2004. Caution
should be taken for you not to place undue reliance on our forward-looking
statements, which represent our views only as of the date of this presentation,
and which we have no current intention to update.

GAAP Reconciliation

During this presentation references to our financial measures will include
references to core earnings per share data. We provide a complete
reconciliation between GAAP basic and diluted earnings per share to core
earnings per share data in our 2003 Annual Report to Shareholders
available at www.aglresources.com under "Investor Relations - SEC
Filings."

AGL Resources Core EPS*
2000-2004

EPS Actual

EPS Projected

$2.10

$2.17

*Basic earnings per share excluding an 8-cent gain on the sale of the Caroline Street campus, net of the donation
of the proceeds to a charitable organization in 2003; a 13-cent gain on the sale of Utilipro in 2001; and a 4-cent
gain on certain items in 2000. Our basic earnings per share was $2.03 in 2003, $1.67 in 2001 and $1.40 in 2000.

We Have Significantly Improved
The Balance Sheet in 2003 & 2004

Debt/Cap

Ratio (%)

Total Debt

($ Millions)

Debt/Cap Ratio

Total Debt
(including trust
preferred securities)

RATINGS

S&P: BBB+

Moody’s: Baa1

Fitch: A-

*Assumes $275mm equity offering

$622

NUI

$54 JISH

Dividend increased 3.5% to $1.16 annually in April 2004

Low dividend payout ratio relative to industry peers

Current dividend yield of 3.7%

Dividend Payout Continues to
Improve

Dividend Payout Ratio

LDC average
payout ratio

Reduced Cost of Debt
and Improved Interest Coverage

Our overall cost of debt and interest coverage ratios have
improved as a result of our debt and equity offerings

Average Debt ($MM) - $1,401$1,412 $1,255$1,290 $1,965

Significant Improvement
in Liquidity

(as of December 31)

Available Liquidity*

Liquidity = unused available Credit Facility and Cash and Cash Equivalents

*Restricted by 70% debt to cap ratio

Bank facility increased to $750mm with 5 year term in September 2004

Additional $700mm bridge facility in place for NUI financing if needed

Executed in October 2004 $250mm 30-year senior note offering at 6.00%

Returns Have Improved, But
We Still Have Work To Do

Must continue to
focus on capital
deployment and
maximizing return on
our asset base

Return on Equity (LTM)

Return on Assets (LTM)

ROIC - AGL Resources

2002A

2003A

2004E

2005E

Average Debt

1,453

1,376

1,350

1,965

Total Capital

2,153

2,204

2,333

3,346

ROIC

7.3%

7.9%

8.0%

7.3%

Return on Invested Capital
(ROIC)

Cash Flow Projections

A Strong Long-term Outlook Due to the
Completion of PRP and ERC Rider Programs

Cash Outflows

‘05-’09 FFO
CAGR = 8%

Excess cash
available for debt
pay-down, dividend
increases or stock
repurchase

NUI - A Compelling Valuation

Equity Value / Book Value ⁽¹⁾

1997

1998

1999

2000

2002

2003

Recent
Transactions

Note

BGC = Bay State Gas/NIPSCO; CLG = Colonial Gas/Eastern Enterprises; NCG = North Carolina Natural Gas/Carolina Power and Light; SWK = Southwest Gas/Oneok; PSNC = Public Service Company of North
Carolina/SCANA; CNE = Connecticut Energy/Energy East; WIC = Wicor/Wisconsin Energy; YES = Yankee Energy/Northeast Utilities; MCN = MCN Energy/DTE Energy; EFU = Eastern Enterprises/KeySpan; DPL = DPL/Indiana
Energy; VNG = VNG/AGL Resources; LGS = LGS/Atmos Energy; SUG = SUG Texas/Oneok; NCNG = NCNG (subsidiary of Progress)/Piedmont

Note

BGC = Bay State Gas/NIPSCO; CLG = Colonial Gas/Eastern Enterprises; NCG = North Carolina Natural Gas/Carolina Power and Light; SWK = Southwest Gas/Oneok; PSNC = Public Service Company of North Carolina/SCANA; CNE =
Connecticut Energy/Energy East; WIC = Wicor/Wisconsin Energy; YES = Yankee Energy/Northeast Utilities; MCN = MCN Energy/DTE Energy; EFU = Eastern Enterprises/KeySpan; DPL = DPL/Indiana Energy; VNG = VNG/AGL
Resources; LGS = LGS/Atmos Energy; SUG = SUG Texas/Oneok; NCNG = NCNG/Piedmont; TXUG = TXU Gas/Atmos Energy (Atmos’ estimate of EBITDA)

Aggregate Value/EBITDA ⁽¹⁾

1997

1998

1999

Recent Transactions

No other recent LDC
purchase has been done
at or near book value

At 7x* EBITDA, we paid
the lowest Aggregate
value/ EBITDA multiple
of 17 LDC transactions
from 1997 to current

* net of assumed cash

2005 Breakeven EBITDA
From Acquisitions

*EBITDA Breakeven Assumes:

$951MM combined enterprise value; includes regulatory settlement cost but no
transaction expenses

$275MM of equity issued at current market

Target of $2.20 ’05 EPS (low side of ’05 guidance)

Depreciation

Interest

Taxes

Net Income

$107*

($MM)

NUI 03

Normalized

JISH

$107

Synergies Needed

Pro-forma Capitalization

Regulatory Filings

AGLC

Filing has been made with proposed rate increase of $24.6 MM or
approximately 5% of base rates or 1.5% of total bill

Capacity supply plan has been approved for 3 years

Pipeline replacement rider amount is being decided

Chattanooga

Reconsideration sought in Rate Case on ROR

VNG

Weather normalization extended for 2 years with minor modifications

Pivotal Air Propane plant ($27 million) should earn authorized ROE in
2005 and beyond

ETG

NJBPU approval received on November 9^th

3 year rate freeze with PBR similar to GA in years 4 and 5 with Rate
Case in year 5

Sequent will be asset manager for 3 years at $4MM per year

City Gas

Base rate increase of $6.7 MM effective from 2/23/04

Future Regulatory Filings

1% Change in
Authorized ROE

-$10MM

+10MM

404 Compliance

Management will continue assessment process through December 31, 2004 by
completing documentation and performing testing of internal controls over
financial reporting

Currently no pervasive control deficiencies or deficiencies which can not be
remediated by December 31, 2004

NUI and Jefferson Island are exempted from SOX 404 Compliance in 2004

Sequent implemented a new Energy Trading and Risk Management System
(ETRM) in October 2004

Design and implementation began in November 2003 before finalization of SOX 404
requirements

Management believes that ETRM has enhanced internal controls

Timing of ETRM implementation may not enable management to gather sufficient
evidence to conclude our internal controls over financial reporting were designed and
operating effectively

Independent auditors (PricewaterhouseCoopers) could also have a scope limitation
with respect to Sequent due to potential lack of sufficient evidence

Projected Debt Profile

Projected As of December 31, 2004

Projected As of December 31, 2005

A 100 bps change in short-term interest
rates at 12/31/04 impacts interest
expense by $5 million annually

$543

$1,501

$629

With NUI Financing and $275 Equity Offering

Includes $175 of interest rate swaps

December 31,

In millions

2004P

2005P

Short-term Debt

$329

$415

Medium Term Notes

208

Senior Notes

1,073

Revenue Bonds

199

Notes Payable to Trusts

235

Total Debt

$2,044

$2,130

Total Debt to Total Capitalization

61%

60%

Impact of Price Fluctuations on
Sequent Positions at September 30,
2004

Sequent fully hedges storage inventory with futures thereby locking in margin:

$2MM Q4 2004 and $5MM Q1 2005 at Sep. 30

Fair Value (mark-to-market) accounting for hedges versus accrual accounting for
inventory may result in volatility in reported earnings

Inventory and Related Hedge Sensitivity

Hedges: at Sep. 30, a $0.10 price move results in $650,000 pre-tax and
pre-sharing impact to earnings

Physical Inventory: Sep. 30 = 6.5Bcf

Inventory Withdrawal Schedule and NYMEX Hedges

-169

-149

-61

-249

169

249

-25

-300

-200

-100

100

200

300

Oct-04

Nov-04

Dec-04

Jan-05

Feb-05

Mar-05

NYMEX Open Positions

Salt Dome - Physical Withdrawals

Resovoir - Physical Withdrawals

$1.95

$1.84

$1.54

$1.36

$1.00

$1.25

$1.50

$1.75

$2.00

$2.25

$2.50

2000A

2001A

2002A

2003A

2004P

2005P

EPS Actual

Projected

$2.10 - $2.17

$2.20 - $2.30

AGL Resources Core EPS*
2000-2005

SOUTHERN Co GAS (GAS) 8-KRegulation FD Disclosure