Atmos Energy 2000 Annual Report Download - page 7

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a transaction cost much lower than the industry
average. The ANG operations were effectively
integrated into our United Cities operations and
the acquisition increased our presence in the state
of Missouri by 48,000 customers.
With these transactions, Atmos will have
doubled its customer base in four years, becoming
the fifth largest pure natural gas utility in the nation
with approximately 1.4 million customers served.
In the future, we plan to continue our acquisi-
tion strategy. We also believe it makes sense to
divest assets in states where the Company does
not have a significant presence or opportunity for
growth, such as South Carolina, where we have
reached an agreement to sell our operations.
Such selective divestitures will enable us to focus
our time, attention and resources to more
strategic operations.
A Year of Unprecedented
Growth – Non-Utility
Operations
We also took important steps in fiscal 2000
to grow and increase the profitability of our non-
utility operations.
Propane Operations. Our strategy has
been to increase the scale, scope and profitability
of the propane operations we acquired through
United Cities Gas Company in 1997. In February
2000, Atmos and three other gas utility companies
announced they would combine their propane
assets to create a regional company, US Propane.
In August, Atmos and its partners merged US
Propane with Heritage Propane Partners, L.P. The
combined company, which retained the Heritage
name, is the nation’s fifth largest retail propane
marketer. Atmos and its partners own, indirectly
through their ownership of US Propane, all of the
general partnership interest and a portion of the
limited partnership interest of Heritage Propane
Partners.Through this series of transactions, Atmos
has leveraged its small and relatively unprofitable
propane assets to gain an ownership interest in
a highly respected and successful, NYSE listed,
national propane company.
Woodward Marketing LLC. In August,
we also announced that Atmos will acquire the
remaining 55 percent equity interest in Woodward
Marketing LLC, a natural gas services company.
Atmos currently owns a 45 percent equity interest
Atmos has grown from a regional
company with a customer base
of approximately 300,000 to a
company with a multi-state
presence and more than one
million customers.