American Abundant

1 2014 Annual Report Natural Gas. American . Abundant . Resources serves approximately million end-use customers in seven states through its utility subsidiaries within the distribution operations segment: Nicor Gas in Illinois, Atlanta Gas Light in Georgia, Virginia Natural Gas in Virginia, Elizabethtown Gas in New Jersey, Florida City Gas in Florida, Chattanooga Gas in Tennessee and Elkton Gas in Maryland. Our retail operations segment serves million energy customers and million service contracts and markets natural gas and related home services to end-use customers across 15 states. Our Houston-based wholesale services segment engages in natural gas storage and gas pipeline arbitrage and provides natural gas asset management and/or related logistics services for most of our utilities, as well as for non-affiliated companies.

2 Our midstream operations segment provides natural gas storage and related activities and engages in the development and operations of high-deliverability natural gas storage Resources W. Somerhalder IIChairman, President and Chief Executive OfficerILFLVATNANJJHOUSTONMIAMIATLANTACH ATTANOOGAVIRGINIA BEACHRAHWAYNAPERVILLEHOUSTONMIAMIATLANTA CHATTANOOGAVIRGINIA BEACHRAHWAYNAPERVILLES ervice Territory for UtilitiesNatural Gas Storage FacilitiesCorporate HeadquartersHH2014 Annual Report12014 was the strongest year in AGL Resources history, with consolidated earnings before interest and taxes (EBIT) of more than $1 billion, driven largely by record results in the wholesale services segment and bolstered by solid year-over-year growth in our distribution operations segment.

3 Excluding the sale of Tropical Shipping that occurred in 2014, earnings per share (EPS) rose 92%, and our total shareholder return was 20%.To Our ShareholdersWe executed on several strategic initiatives in 2014, including the sale of Tropical Shipping and the announcement of partnership investments totaling approximately $670 million in three major interstate pipelines. Importantly, we continue investing across all of our jurisdictions to ensure the safety and reliability of our systems. In addition to the successful pipeline replacement programs already in place in Georgia, New Jersey and Virginia (as depicted on the front and inside cover), we now are embarking on a nine-year infrastructure replacement program in Illinois that will enable us to spend approximately $200 million per year for system maintenance and upgrades.

4 These programs all support state and federal efforts to modernize our nation s natural gas pipeline the majority of my tenure at AGL Resources, we have projected annual EPS growth in the range of 4% to 6%. With the initiatives noted above, we now expect an increase in our compound annual growth rate (CAGR) of earnings to a range of 5% to 8% over the next three years, compared to normalized 2014 results. Further, we anticipate this growth to accelerate to 6% to 9% over a five-year period. This higher projected growth rate is due largely to our ability to earn near our authorized rate of return in each jurisdiction that we serve through prudent investment and rigorous cost control.

5 In addition, we have pursued and secured investments, such as those in interstate pipelines noted above, that generate returns in line with, or above, those of our regulated with our strong performance in 2014, our Board of Directors in February approved our 13th consecutive annual dividend increase. For the second year in a row, we increased the dividend by more than 4%, and our indicated annual dividend now stands at $ per OPERATIONS In 2014 EBIT improved by $35 million, or 6%, compared to 2013 for our distribution operations segment, which includes our seven regulated utilities in Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee and Maryland.

6 The primary drivers of the increase were higher customer usage and growth, colder-than-normal weather in 2014 and higher revenues from our infrastructure investment programs. In addition, we effectively managed our operating expenses, which rose less than 2% commensurate with the rate of gas continues to have a strong cost advantage over many other fuel sources. This fact, combined with successful marketing programs and system expansion into unserved or under-served areas, led to strong new customer growth in 2014. We added approximately 34,000 net meters in 2014 compared to approximately 27,000 in 2013, an increase of over 25%.

7 FINANCIAL HIGHLIGHTSIn millions, except per share amounts 2014 2013 Operating revenues $ 5,385 $ 4,209 Income from continuing operations $ 562 $ 290(Loss) income from discontinued operations, net of tax $ (80) $ 5 Net income attributable to AGL Resources Inc. $ 482 $ 295 Diluted earnings per common share from continuing operations attributable to AGL Resources Inc. $ $ earnings per common share attributable to AGL Resources Inc. $ $ capitalization $ 6,522 $ 5,615 Total assets $ 14,909 $ 14,550 Total shareholder return 20% 23%AGL Resources mentioned, we have pipeline replacement and improvement programs underway in nearly every jurisdiction.

8 We pioneered these efforts among regulated utilities starting in the 1990s. In total, we have spent approximately $ billion to modernize more than 2,500 miles of pipeline across our system, and we now are embarking on a $ billion program in Illinois. These programs benefit our customers as they keep our systems best-in-class in terms of safety and reliability. They also are cost-effective by reducing the need for expensive and time-consuming general rate cases. Finally, our shareholders also garner benefits as the time to recover investment in these programs is reduced due to the rider-based regulatory constructs under which we operate.

9 In part because of significant investment in these programs, we do not anticipate any general rate case filings in addition to safety and reliability improvements, we also are committed to environmental matters, including the reduction of greenhouse gases (GHG). We have been a leader in activities to reduce GHGs since 1993, when we joined the Environmental Protection Agency s (EPA s) Natural Gas STAR Program as an original participant. The Natural Gas STAR Program provides a framework to encourage partner companies to implement methane emissions-reducing technologies and practices and document their voluntary emission reduction activities.

10 In addition, we are one of seven in the natural gas value chain, and one of only two utilities, to form Our Nation s Energy Future (also known as ONE Future ), which has the goal of reducing methane-leak loss rates across the value chain to less than 1%, a level that science indicates is not only cost-effective and attainable, but the point at which natural gas will remain the fuel of choice from a climate perspective. The EPA cited the ONE Future initiative as one it is committed to continue to work with to develop and verify robust commitments to reduce methane emissions. RETAIL OPERATIONS Our retail operations segment includes the sale of natural gas to customers who have the option to choose their natural gas provider, as well as the provision of maintenance and warranty products for certain home utility services and appliances.