AGL Resources Cuts FY12 Outlook, Sees EPS $2.45

AGL Resources Inc. (NYSE: GAS) today announcedpreliminary diluted earnings per share adjusted for merger-related expenses ofapproximately $2.45 for 2012. The company's previously disclosed guidancerange was $2.60 - $2.75 per diluted share for 2012, which assumed normalweather and volatility and no impact from hedge movements. Complete financialresults for the company will be published on February 6, 2013.The reduction in earnings relative to prior guidance is due primarily to thefollowing factors: * Price movements related to the company's natural gas transportation positions in its wholesale services segment resulted in approximately $22 million of mark-to-market accounting hedge losses during the fourth quarter of 2012. * The company expects these transportation hedge losses to be recovered in 2013 through 2015 (with the majority recognized in 2013) via the physical flow of natural gas and utilization of the contracted transportation capacity. * The main driver of the mark-to-market losses during the fourth quarter was significant volatility experienced at natural gas delivery points throughout the Northeast corridor related to natural gas supply constraints in the region. * Warmer than normal weather negatively impacted the distribution operations and the retail operations segments by a combined $10 million during the fourth quarter of 2012.As a reminder to the investment community, the reported earnings of AGLResources' wholesale services business are subject to volatility due tochanges in natural gas prices during the reporting period. Specifically, thecompany enters into contracts for natural gas transportation capacity andparticipates in transactions that manage natural gas commodity andtransportation costs in an attempt to achieve the lowest cost to servecustomers. Geographic pricing differences arise across various markets asdelivered natural gas prices change.After execution of transactions to secure transportation capacity, the companyoften enters into forward financial contracts to hedge its positions and lockin a margin on future transportation activities. The hedging instruments arederivatives, and the company reflects changes in the derivatives' fair valuein its reported operating results in the period of change, which can be inperiods prior to actual utilization of the transportation capacity.AGL Resources' management will discuss fourth-quarter and full-year 2012results in greater detail on the company's February 6, 2013 conference call.At that time, earnings per share guidance will also be provided for full-year2013. AGL Resources does not provide or publish forecasts of quarterlyearnings or other quarterly results, and this announcement is not intended tochange that policy.