Atmos Energy 2004 Annual Report Download - page 6

LETTER TO SHAREHOLDERS 7
Industry experts estimate that large
resources of natural gas remain to be
tapped. However, only when additional
supplies come to market will gas com-
modity prices moderate and reduce
the volatility of gas price spikes that are
hurting consumers, businesses and
utilities alike.
BOARD CHANGES
Two significant milestones in our corporate governance
occurred during 2004. The first was the retirement of one
of our longtime directors, Carl S. Quinn. Carl’s service
to Atmos Energy was matched only by his legacy in the
natural gas industry as one of its leading statesmen.
We shall miss his wise counsel, steady direction and
solid integrity.
However, we were pleased in August when we
marked a second milestone, the addition of our first
woman director, Nancy K. Quinn. Ms. Quinn brings a
wealth of experience in investment banking and energy
industry financing. She also is a respected woman entre-
preneur and benefactor of the arts. We feel honored
that she agreed to join our board.
FUTURE EXPECTATIONS
As we look to 2005, we are excited about
the tremendous potential that we
foresee. Our acquisition of TXU Gas has
given us greater size and scale. Our
existing utility operations continue to
achieve exceptional results. Our non-
utility operations are positioned to make
complementary contributions in the future.
We remain committed to keeping Atmos Energy a
financially successful company by showing respect for
all who deal with us and by expecting the highest ethical
behavior of all who work for us. We anticipate growing
earnings at 3 percent to 6 percent a year and continuing
to pay higher annual dividends. Being financially successful
is the best way we can reward our investors, serve our
customers, invest in our employees and contribute to our
1,500 communities.
We intend to continue to operate the business
through a dedication to a strong financial foundation,
a disciplined attitude to operations, a successful approach
to making and integrating acquisitions, a devotion to
serve our customers exceptionally well and an adherence
to our core values.
In addition, we have advocated that states adopt a
measure similar to a Texas law that allows for faster
recognition in rates of essential capital investment needed
to maintain the system and serve new customers. The
Gas Reliability Infrastructure Program in Texas reduces
the effects of regulatory lag on cash flow and earnings.
CUSTOMER SERVICE EXCELLENCE
Excellence in customer service stands as a key part of our
corporate vision—we call it our Spirit of Service.
SM
Our reputation in the community is directly influenced
by how we perform. During the past two years, we
have conducted extensive training efforts and intend to
expand the programs further in 2005. We also are
organizing programs to help our employees better under-
stand the dynamics ofour business as it grows.
INVESTMENT IN A STRONG
CORPORATE CULTURE
Another intangible, but essential, investment that we are
pursuing is to build a strong corporate
culture. In 2004, we took additional
steps to invest in our employees through
expanded training, improved benefits
programs and increased communications.
Instilling our core values through-
out the organization is essential to
our future success. As we have integrated
major acquisitions into our operations, we have found
that our values make a tangible difference. Having the
right corporate culture guides us in dealing appropriately
with business issues. Moreover, the right corporate
culture emphasizes to our employees the values and
integrity on which we will continue to grow.
NEED FOR A NATIONAL ENERGY POLICY
With the contentious 2004 elections now past, we
trust that Congress and the Administration can focus on
one of the most pressing national issues that received
almost no attention during the campaign—the need for
a comprehensive national energy policy.
Natural gas prices have continued to rise during
the past five years. In the 2004–2005 heating season,
home heating bills will likely go up from 10 percent
to 15 percent above bills of last winter. These price
increases are the result of normal market responses.
Yet, that response is prompted by our nation’s lack
of a national energy policy.
We need a policy that permits
additional drilling for natural gas in
the United States and incentives to
build new pipeline capacity, such as
a pipeline to transport abundant
natural gas supplies from the North
Slope of Alaska to the contiguous
48 states.
6 LETTER TO SHAREHOLDERS
NET INCOME
$90.0
75.0
60.0
45.0
30.0
15.0
0.00 2000 2001 2002 2003 2004
Consolidated net income (in millions)
Robert W. Best
Chairman, President and Chief Executive Officer
November 19, 2004