Atmos Energy 2002 Annual Report Download - page 18

We will continue to control our costs. We already are
one of the most efficient pure gas utilities based on
customers served per employee and operation and
maintenance expense per customer.
Our nonutility operations will grow
through new strategic acquisitions
and will take advantage of market
opportunities that become available.
We intend to remain faithful to our
strategy of running our utilities well,
growing our nonutility business
and making sound acquisitions.
Capital spending rises
Our capital expenditures during fiscal
2002 were $132.3 million, up from
$113.1 million for the same period
in 2001. The $19.2 million increase
was primarily due to spending on the Louisiana Gas
Service assets we acquired and full ownership of
Woodward Marketing. Additionally, spending was
elevated due to the purchase of additional billing
software licenses and integration expenditures for
Mississippi Valley Gas.
For fiscal 2003, we expect capital expenditures
will increase primarily due to $8 million in higher
capitalized employee benefits and an additional
$18 million to $20 million for Mississippi Valley
Gas operations.
We intend to limit our nongrowth spending to remain
at or below our overall depreciation levels and our
growth spending to earn our cost of capital or better.
National energy policy needed
One disappointment to me in 2002
was the inability of Congress to agree
upon a national energy policy.
Although many bills were introduced
in both the Senate and House of
Representatives, a final compromise
bill faltered. Congressional leaders
promise a renewed effort next January.
The federal Energy Information
Administration’s Annual Energy
Outlook for 2003, which was
issued in November 2002, predicts
our country’s dependence on
foreign oil and natural gas will
continue to grow through 2025. The EIA report is the
government’s best forecast of future U.S. energy
supply, demand and prices. Among other things, the
report finds U.S. dependence on foreign oil will
jump to 68 percent in 2025, up from 55 percent in
2001. Imported natural gas will account for 22
percent of U.S. demand by 2025, up from 16 percent
in 2001.
Natural gas, in particular, should be the focus
of new development by our country since it offers
so many benefits. All but 1percent of the gas
consumed in the U.S. comes from North America,
making it our most reliable fuel source. Gas is the
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LETTER TO SHAREHOLDERS
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