AGL Resources Reports Quarterly Earnings.

Business Editors

ATLANTA--(BUSINESS WIRE)--Jan. 24, 2002

Exceeds Analyst Expectations Despite Warm Weather

AGL Resources Inc. (NYSE: ATG) today reported earnings of $0.45 per basic and diluted share for the quarter ended December 31, 2001, compared with $0.41 per share for the same quarter of the prior year.

This reflects a 10 percent increase in earnings per share, despite weather that was 25 percent warmer than normal in the Virginia, Tennessee and Georgia service territories. Net income for the quarter ended December 31, 2001 was $24.9 million compared with net income of $22.5 million for the quarter ended December 31, 2000.

"Two years ago, we made the commitment to diversify our sources of income," said Paula G. Rosput, president and chief executive officer of AGL Resources. "Our Texas and Virginia operations are making solid contributions and our ability to identify wholesale asset optimization opportunities is growing."

Sequent Energy Management, the company's wholesale services segment, contributed earnings per share of $0.04 for the quarter ended December 31, 2001.

The distribution operations segment's earnings were flat as compared to the quarter ended December 31, 2000, reflecting the effect of the second warmest period in 140 years in the Virginia Natural Gas service territory, which experienced degree days of 877 versus a ten year normal of 1,141. The impact of weather on VNG's operating results in the quarter ended December 31, 2001, versus the same period of 2000, was a decrease in operating margin of $12.4 million. This decline was offset by cost savings realized at VNG through aggressive implementation of operational efficiencies throughout fiscal year 2001 and the absence in the quarter ended December 31, 2001 of costs incurred in the same quarter of 2000 in conjunction with marketer bankruptcies. Due to regulatory mechanisms in place at both Atlanta Gas Light Company and Chattanooga Gas Company which eliminate weather sensitivity for these two operations, there was no adverse impact on the operating results of either of these two companies for the quarter ended December 31, 2001 as a result of the warmer weather.

AGL Resources' energy investments segment realized a decline in earnings per share of $0.03 due to a decrease in earnings from AGL's investment in US Propane and the effect of increased operating expenses at AGL Networks, as compared with the same quarter the prior year.

The remaining increase in AGL Resources' earnings during the quarter was a result of favorable interest rates and continued productivity improvements in the corporate organization.

Earnings Outlook

As previously announced, the company has changed its fiscal year from September 30 to December 31, effective October 1, 2001. This change created a stub period from October 1, 2001 to December 31, 2001, prior to the beginning of the companys new fiscal year on January 1, 2002. The companys estimate for earnings per share for the 12 months ending December 31, 2002 is a range of $1.65 to $1.72. The company will provide further information regarding its outlook for the 12 months ending December 31, 2002 in its conference call to review the quarterly results.

Earnings Conference Call Webcast: The AGL Resources Quarter Ended December 31, 2001 Earnings Conference Call, scheduled for January 24, 2002 at 9 a.m. (EST), can be accessed via the AGL Resources website at www.aglresources.com. The call will address the companys financial results for the three-month stub period ended December 31, 2001, as well as the outlook for the fiscal year ending December 31, 2002. The call will be archived on the website through the close of business on Wednesday, January 30, 2002.

AGL Resources Inc. is a regional holding company for energy and infrastructure related businesses in the Southeast. The company is the second-largest natural gas-only distribution company in the United States and serves more than 1.8 million customers throughout Georgia; Chattanooga, Tennessee; and southeastern Virginia. AGL Resources also is engaged through subsidiaries and partnerships in other businesses, including telecommunications, asset management and trading, wholesale energy services, and wholesale and retail propane sales. For more information visit www.aglresources.com.

This press release contains forward-looking statements. AGL Resources wishes to caution readers that the assumptions, which form the basis for the forward-looking statements, include many factors that are beyond AGL Resources ability to control or estimate precisely. Those factors include, but are not limited to, the following: industrial, commercial, and residential growth in the service territories of AGL Resources Inc. and its subsidiaries; changes in price and demand for natural gas and related products; impact of changes in state and federal legislation and regulation on the gas and electric industries and on AGL Resources, including the impact of the current review of Atlanta Gas Light Company's rates by the Georgia Public Service Commission; effects and uncertainties of deregulation and competition, particularly in markets where prices and providers historically have been regulated, unknown risks related to nonregulated businesses, and unknown issues such as the stability of certificated marketers; review of natural gas deregulation in Georgia by the governor-appointed Natural Gas Consumer Protection Task Force; concentration of credit risk in certificated marketers; industry consolidation; impact of acquisitions and divestitures; changes in accounting policies and practices issued periodically by accounting standard-setting bodies; interest rate fluctuations, financial market conditions, and general economic conditions; uncertainties about environmental issues and the related impact of such issues; impact of changes in weather upon the temperature sensitive portions of the business; and other risks described in our documents on file with the Securities and Exchange Commission.

                  AGL RESOURCES INC. AND SUBSIDIARIES
              CONDENSED STATEMENTS OF CONSOLIDATED INCOME
                      FOR THE THREE-MONTHS ENDED
                      DECEMBER 31, 2001 AND 2000
                              (UNAUDITED)

                                                         Three Months
         In millions, except per share amounts          2001      2000
         --------------------------------------------------------------
         Operating revenues                           $325.7    $294.8
         Cost of sales                                 173.8     130.8
         --------------------------------------------------------------
         Operating margin                              151.9     164.0
         Operating expenses                             97.3     108.7
         --------------------------------------------------------------
         Operating income                               54.6      55.3
         Other income                                    7.7       5.2
         --------------------------------------------------------------
         Earnings before interest and taxes (EBIT)      62.3      60.5
         Interest expense and preferred stock
          dividends
            Interest expense                            19.3      23.2
            Dividends on preferred stock of
             subsidiaries                                4.5       1.5
         --------------------------------------------------------------
                 Total interest expense and
                  preferred stock dividends             23.8      24.7
         --------------------------------------------------------------
         Earnings before income taxes                   38.5      35.8
         --------------------------------------------------------------
         Income taxes                                   13.6      13.3
         --------------------------------------------------------------
         Net income                                    $24.9     $22.5
         --------------------------------------------------------------
         Earnings per common share
              Basic                                    $0.45     $0.41
              Diluted                                  $0.45     $0.41
         Weighted average number of common shares
         outstanding
              Basic                                     55.3      54.1
              Diluted                                   55.6      54.5
         Cash dividends paid per common share          $0.27     $0.27




                AGL RESOURCES INC. AND SUBSIDIARIES
                     EBIT SCHEDULE BY SEGMENT
              FOR THE THREE MONTHS ENDED DECEMBER 31

         (Dollars in Millions, except per share amounts)
                            (UNAUDITED)



                             2001           2000        Fav/(Unfav)
                        -------------- --------------- -------------

Distribution Operations         $59.8           $59.9         ($0.1)
Wholesale Services                3.4               -           3.4
Energy Investments                3.6             6.2          (2.6)
Corporate                        (4.5)           (5.6)          1.1
                        -------------- --------------- -------------
     Consolidated EBIT           62.3            60.5           1.8
                        -------------- --------------- -------------
Interest Expense                 23.8            24.7           0.8
Income Taxes                     13.6            13.3          (0.3)
                        -------------- --------------- -------------
     Net Income                 $24.9           $22.5          $2.4
                        -------------- --------------- -------------
Earnings per
 common share
 (basic and diluted)            $0.45           $0.41         $0.04
                        ============== =============== =============

Throughput (millions of
  dekatherms)
   Georgia                       65.7            88.3         (22.6)
   Virginia                      13.3            12.5           0.8
   Tennessee                      3.7             5.6          (1.9)

Degree Days (Actual)
   Georgia                        787           1,370          (583)
   Virginia                       877           1,423          (546)
   Tennessee                      992           1,458          (466)