Atmos Energy (ATO) 8-K Atmos Energy Corporation Reports

[ATMOS LOGO]

EXHIBIT 99.1

News Release

Analyst and Media Contact:

Susan Kappes

(972) 855-3729

Atmos Energy Corporation Reports

Solid Results for Fiscal 2004 First Quarter

DALLAS (February 10, 2004)—Atmos Energy Corporation (NYSE: ATO) today reported net income of $29.5 million, or $0.57 per diluted share, for the three months ended December 31, 2003, compared with net income of $25.8 million, or $0.60 per diluted share, for the three months ended December 31, 2002. Results for the fiscal 2004 first quarter represent a 14 percent increase in net income, compared with the same period last year, despite weather that was 12 percent warmer than last year. Earnings per diluted share decreased 5 percent because the company’s average number of diluted shares outstanding rose by 8.9 million shares, or 21 percent, from December 31, 2002, to December 31, 2003.

“Our strategy of combining complementary utility and nonutility operations benefited our shareholders once again this quarter,” said Robert W. Best, chairman, president and chief executive officer of Atmos Energy Corporation. “The strong performance by our nonutility gas marketing segment helped to overcome lower results in our gas utility operations caused largely by unseasonably warm weather.”

“The steps taken by our nonutility operations during the past year to reduce the segment’s risk profile have enhanced its margins,” Best said. “In addition, tariff revisions recently approved in two of our rate jurisdictions will add approximately $8.4 million annually to future revenue. Therefore, we feel confident that Atmos Energy is on track to meet our earlier-announced guidance for fiscal 2004 of earning between $1.55 and $1.60 per diluted share.”

Consolidated gross profit for the three months ended December 31, 2003, was $159.1 million, compared with $137.2 million for the prior-year quarter. Consolidated utility gas throughput for the three months ended December 31, 2003, was 68.2 billion cubic feet (Bcf), compared with 70.9 Bcf for the prior-year quarter. The increase in gross profit primarily reflects the effect of a full three months of results in the current period from the acquisition in December 2002 of Mississippi Valley Gas Company (MVG), compared with one month’s results in the prior-year quarter. Also contributing to gross profit were strong results in the nonutility natural gas marketing segment. These positive factors were partially offset by a decrease in utility throughput attributable to weather that was 12 percent warmer than the prior-year quarter and 5 percent warmer than normal as adjusted for jurisdictions with weather-normalized operations.

Atmos Energy’s net income from nonutility operations, which operate under Atmos Energy Holdings, Inc., was $8.4 million for the three months ended December 31, 2003, compared with net income of $4.7 million for the three months ended December 31, 2002. Nonutility operations

contributed 29 percent of consolidated net income for the 2004 first quarter, compared with 18 percent for the prior-year quarter. Consolidated natural gas marketing sales volumes were 58.9 Bcf for the three months ended December 31, 2003, compared with 59.3 Bcf for the three months ended December 31, 2002.

Nonutility net income was higher in the first quarter of fiscal 2004 primarily due to improved margins and an increase in mark to market gains primarily attributable to the net change in the value of physical storage and corresponding financial hedges.

Operation and maintenance expense for the three months ended December 31, 2003, was $56.9 million, compared with $50.5 million for the three months ended December 31, 2002. Excluding the provision for doubtful accounts and a $6.1 million increase attributable to the acquired MVG assets, operation and maintenance expense for first quarter of fiscal 2004 was slightly lower than operations and maintenance expense for the same period last year. The provision for doubtful accounts was $3.2 million for the three months ended December 31, 2003, compared with $2.9 million for the three months ended December 31, 2002. In the utility segment, the average cost of natural gas for the first quarter of fiscal 2004 was $6.35 per thousand cubic feet (Mcf), compared with $5.03 per Mcf for the first quarter of fiscal 2003.

Taxes, other than income taxes, for the three months ended December 31, 2003, were $15.1 million, compared with $12.8 million for the three months ended December 31, 2002. The increase primarily was attributable to additional franchise, payroll and property taxes associated with the acquired MVG assets and to higher franchise taxes due to higher revenues. Increases in franchise taxes have no effect on net income because these amounts are revenue-based and are recovered through customer billings.

Miscellaneous income for the three months ended December 31, 2003, was $1.2 million, compared with miscellaneous income of $4.1 million for the three months ended December 31, 2002. The $2.9 million decrease primarily reflects the absence in the current-year quarter of a $3.9 million gain recognized in the prior-year quarter associated with a sales-type lease of a distributed electric generation plant and a decrease in year-over-year earnings of $0.5 million from an indirect equity interest in Heritage Propane Partners, L.P. These amounts were partially offset by the favorable effect of the absence of $1.9 million in weather insurance amortization expense in the fiscal 2004 first quarter, resulting from the termination of a weather insurance policy in the third quarter of fiscal 2003.

Interest charges increased $1.9 million during the three months ended December 31, 2003, compared with the three months ended December 31, 2002. The increase was primarily due to interest expense associated with Atmos Energy’s $250.0 million debt offering in January 2003 used to partially finance its MVG acquisition.

For the three months ended December 31, 2003, operating activities provided cash of $11.5 million, compared with a use of cash of $13.4 million for the three months ended December 31, 2002. The year-over-year increase was primarily due to favorable changes in various working capital accounts.

2

Highlights and Recent Developments

Atmos Energy completes sale of indirect equity interest in Heritage Propane

On January 20, 2004, Atmos Energy and three other utility partners completed the announced sale of their interests in the general partnership and limited partnerships in Heritage Propane Partners, L.P., for $130.0 million. Atmos Energy received approximately $24.7 million for its portion and recorded a $4.4 million pretax book gain in the second quarter of fiscal 2004.

Conference call to be webcast February 11

Atmos Energy Corporation will host a webcast conference call on February 11 at 7 a.m. CST to discuss financial results for the first quarter of fiscal 2004. Atmos Energy officers who will participate in the conference call will be: Bob Best, chairman, president and chief executive officer; Pat Reddy, senior vice president and chief financial officer; Earl Fischer, senior vice president, utility operations; JD Woodward, senior vice president, nonutility operations; Louis Gregory, senior vice president and general counsel; Fred Meisenheimer, vice president and controller; Laurie Sherwood, vice president, corporate development, and treasurer and Susan Kappes, vice president, investor relations and corporate communications. To listen to the call, dial 1-800-219-6110. Slides for the webcast may be viewed on the Internet atwww.atmosenergy.com.

3

Forward-Looking Statements

The matters discussed or incorporated by reference in this news release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this news release are forward-looking statements made in good faith by the Company and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this news release or in any of the Company’s other documents or oral presentations, the words “anticipate,” “expect,” “estimate,” “plans,” “believe,” “objective,” “forecast,” “goal” or similar words are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements relating to the Company’s earnings-per-share projections, operations, markets, services, rates, recovery of costs, availability of gas supply and other factors. A discussion of these risks and uncertainties may be found in the Company’s Form 10-K for the fiscal year ended September 30, 2003. Although the Company believes these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. Atmos Energy undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

Atmos Energy Corporation, headquartered in Dallas, Texas, is one of the largest natural gas distributors in the United States, serving about 1.7 million utility customers. Atmos Energy’s utility operations serve more than 1,000 small and medium-size communities in 12 states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy’s nonutility operations, organized under Atmos Energy Holdings, Inc., operate in 18 states. They provide natural gas marketing and procurement services to industrial, commercial and municipal customers, manage company-owned natural gas storage and pipeline assets and construct small distributed generating plants for industrial and municipal customers. For more information, visitwww.atmosenergy.com.

4

Atmos Energy Corporation

Financial Highlights(Unaudited)

Statements of Income	Three Months Ended December 31
(000s except per share)	2003			2002
Operating revenues:
Utility segment	$	460,488		$	399,968
Natural gas marketing segment		373,829			343,498
Other non-utility segment		3,628			2,900
Intersegment eliminations		(74,329	)		(65,934	)
		763,616			680,432
Purchased gas cost:
Utility segment		322,064			270,495
Natural gas marketing segment		356,331			339,508
Other non-utility segment		327			(1,126	)
Intersegment eliminations		(74,159	)		(65,611	)
		604,563			543,266
Gross profit		159,053			137,166
Operation and maintenance expense		56,916			50,504
Depreciation and amortization		23,473			21,194
Taxes, other than income		15,123			12,844
Total operating expenses		95,512			84,542
Operating income		63,541			52,624
Miscellaneous income		1,207			4,124
Interest charges		17,335			15,479
Income before income taxes		47,413			41,269
Income tax expense		17,872			15,476
Net income	$	29,541		$	25,793
Basic net income per share	$	.57		$	.60
Diluted net income per share	$	.57		$	.60
Cash dividends per share	$	.305		$	.300
Weighted average shares outstanding:
Basic		51,483			42,796
Diluted		51,861			42,919
	Three Months Ended December 31
Summary Net Income by Segment (000s)	2003			2002
Utility	$	21,111		$	21,059
Natural gas marketing		7,536			768
Other nonutility		894			3,966
Consolidated net income	$	29,541		$	25,793

Atmos Energy Corporation

Financial Highlights, continued (Unaudited)

Condensed Balance Sheets	December 31, 2003		September 30, 2003
(000s)
Net property, plant and equipment	$	1,538,224	$	1,515,989
Cash and cash equivalents		41,710		15,683
Cash held on deposit in margin account		1,934		17,903
Accounts receivable, net		407,045		216,783
Gas stored underground		192,568		168,765
Other current assets		88,673		38,863
Total current assets		731,930		457,997
Goodwill and intangible assets		274,840		273,499
Deferred charges and other assets		267,952		271,023
	$	2,812,946	$	2,518,508
Shareholders’ equity	$	879,352	$	857,517
Long-term debt		860,705		863,918
Total capitalization		1,740,057		1,721,435
Accounts payable and accrued liabilities		372,430		179,852
Other current liabilities		120,743		127,923
Short-term debt		191,795		118,595
Current maturities of long-term debt		7,195		9,345
Total current liabilities		692,163		435,715
Deferred income taxes		243,079		223,350
Deferred credits and other liabilities		137,647		138,008
	$	2,812,946	$	2,518,508

Atmos Energy Corporation

Financial Highlights, continued(Unaudited)

Condensed Statements of Cash Flows	Three Months Ended December 31
(000s)	2003			2002
Net income	$	29,541		$	25,793
Cash flows from operating activities
Depreciation and amortization		24,145			21,735
Deferred income taxes		19,347			10,544
Changes in assets and liabilities		(61,054	)		(66,928	)
Other		(476	)		(4,558	)
Net cash provided (used) by operating activities		11,503			(13,414	)
Cash flows from investing activities
Capital expenditures		(45,471	)		(35,265	)
Acquisitions		—			(74,650	)
Other		489			673
Net cash used in investing activities		(44,982	)		(109,242	)
Cash flows from financing activities
Net increase in short-term debt		73,200			59,617
Proceeds from bridge loan		—			147,000
Repayment of long-term debt		(5,363	)		(14,954	)
Repayment of Mississippi Valley Gas debt		—			(70,938	)
Cash dividends paid		(15,744	)		(12,542	)
Issuance of common stock		7,413			5,720
Net cash provided by financing activities		59,506			113,903
Net increase (decrease) in cash and cash equivalents		26,027			(8,753	)
Cash and cash equivalents at beginning of year		15,683			47,991
Cash and cash equivalents at end of year	$	41,710		$	39,238
	Three Months Ended December 31
Statistics	2003			2002
Heating degree days *		1,240			1,407
Percent of normal *		95	%		105	%
Consolidated utility gas throughput (MMcf as metered)		68,179			70,929
Consolidated natural gas marketing sales volumes (MMcf)		58,917			59,326
Natural gas meters in service		1,683,387			1,659,278
Utility average cost of gas	$	6.35		$	5.03
*       Adjusted for weather-normalized operations. For periods beginning October 1, 2002, the normal heating degree day calculation utilized updated 30-year normal weather data.

###

7