Atmos Energy 1997 Annual Report Download - page 25

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Update: Non-Utility Operationsaccounted
for 5 percent of revenues and 14 percent of net income for Atmos in 1997. Our strategy is to expand the
non-utility operations, which became a part of the company with the merger of United Cities Gas Company
in 1997. These include a propane division and Woodward Marketing, L.L.C., a wholesale natural gas mar-
keting and gas service limited liability corporation in which Atmos owns a 45 percent interest.
20
Atmos intends to expand
its propane operations
through acquisitions and
by entering markets in its
other territories where
propane is an attractive
alternative to natural gas.
Propane
The company’s Propane Division sells and transports propane
to both wholesale and retail customers and is engaged in
direct merchandising and repair of propane gas appliances.
The 30th largest propane distributor in the nation, the com-
pany serves approximately 29,000 propane customers in
Tennessee, Kentucky, Virginia and North Carolina. The company
has retail storefronts in major operating centers and has
approximately 160 employees. The division sold 33 million
gallons of propane in 1997, compared with 41 million gallons
in 1996. The decrease in volume was the result of warmer
than normal winter weather.
United Cities began the propane division in 1976. The
propane division has grown through a series of acquisitions,
including the addition of 3,100 customers in 1997 from the
purchase of Harlan LP Gas Inc. for approximately $2.2 mil-
lion. United Cities Propane Gas’ primary competitors in the
propane market are independent operators and co-ops.
The company plans to continue growth through propane
acquisitions and to expand in propane markets in Atmos
service areas where natural gas distribution systems are
difficult or expensive to construct. The division also is con-
tinuing a program of reducing operating costs in order to
increase its market share by offering the best possible price.
CENTER
Tony Slayden,
Vice President and
General Manager
REAR FROM LEFT
Sherry Taylor,
Vice President,
Accounting
Angie Cundiff,
Coordinator,
Human Resources