Atmos Energy 2002 Annual Report Download - page 10

doubtful accounts below its historic level of about
four-tenths of 1 percent of revenues. Their efforts
also contributed to a total year-over-year savings of
$26.2 million.
It’s gratifying to note that we achieved an earnings
increase despite weather that was
6percent warmer than normal and
18 percent warmer than in fiscal
2001. Weather continued to be a major
factor underlying our earnings.
During the winter heating season of
2001-2002, we had in place weather
insurance to mitigate any severe effects
of warm weather on earnings. This
insurance will continue in force during
the 2002-2003 heating season.
Our utility operations had many
achievements in 2002, but
three in particular will create long-
lasting benefits.
One was the successful launch of our new Atmos
Energy national brand. It reflects a major initiative
we’ve undertaken to raise our customer service
to new standards of excellence. We believe that our
strengthened identity and service improvements
will benefit us as we expand our utility business.
A second achievement was finishing all the regulatory
and financing work to acquire Mississippi Valley
Gas. On October 31, 2002, we received the Mississippi
Public Service Commission’s final order, the last of many
state and federal regulatory approvals needed to close the
transaction, which was completed on December 3, 2002.
A third achievement was an agreement with the
Louisiana Public Service Commission
regarding a rate stabilization
adjustment for our Louisiana utility
operations. The agreement will
add $15.8 million annually to rev-
enues during the first two years,
beginning in November 2002, and
$12.2 million annually thereafter.
The way the agreement is structured
also will help reduce our sensitivity
to weather in Louisiana, where our
largest utility division is located.
Nonutility operations continue growing
Atmos Energy benefited in fiscal 2002
from improved results in nonutility
operations. These operations contributed 28 percent
of net income, with gains coming largely from the
Woodward Marketing unit of Atmos Energy Marketing.
In 2001, Atmos Energy acquired the remaining
55 percent interest in Woodward Marketing that it
did not already own. Woodward Marketing’s
business primarily is marketing natural gas and gas
transportation services to wholesale industrial
customers and municipalities. It also makes gas
trades that have limited risks.
6
LETTER TO SHAREHOLDERS
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