Letter to Our Shareholders (continued) Outstanding Year  Sound Strategy  4 SO 2OO2 The company’s excellent performance allowed us to increase your annual dividend to $1.37 per share. The success we’re having was also recognized in the stock market. Our share price rose by 12 percent.  With a 17.6 percent total return for shareholders, including stock price appreciation and reinvested  dividends, we outperformed our industry as well as  the broader market in 2002. In addition, we have been  a total return leader for the most recent 5-year and  10-year periods. Southern Company has delivered con- sistently solid results under varying market conditions.  The source of this success is our work force of more than 26,000 employees, whose efforts every day make it happen. We work hard to ensure customers have a reliable and affordable supply of electricity. Customer service and satisfaction drive our business. And our company emphasizes corporate responsibility, as demonstrated by the real gains we’ve made in the areas of the environment and diversity. We’ve now completed two years with a strategy focused on the Southeast and our three main businesses. Our commitment to continue the successful execution of this strategy has the company well positioned for the future. Our regulated utilities, which contribute nearly 90 percent of our earnings, are strong. The recent eco- nomic problems notwithstanding, the region continues to grow. Our regulated retail business added 70,000 customers last year. That increase of 1.7 percent was above the national average for the industry. We are expecting comparable growth this year. To ensure that the Southeast’s increasing energy needs are served, we’ve continued to invest in our infrastructure. The foundation of our company is in our regulated utilities in the Southeast, and we remain focused on the funda- mentals that have made us successful.  Our competitive generation business continued to perform well, with earnings of $168 million in 2002. The target for this business is to earn $200 million a year  by 2005. We are on track, if not ahead of pace, to meet  this goal. Our wholesale generation business is based on securing long-term contracts before any new power plants are added. This way we are less vulnerable to the price volatility of the competitive wholesale electricity market. We’ll continue to grow in 2003 by adding four gas-fired units with more than 2,200 megawatts of capacity – all with long-term contracts. We are also making progress toward meeting our long-term goals for energy-related products and services, the third main component of our strategy. Through an acquisition, we entered Georgia’s retail natural gas  market last year. Southern Company GAS now serves more than 200,000 customers and is profitable. Outdoor lighting in Georgia, appliance sales in Alabama, and our Southern LINC telecommunications business are solid performers. In part because of the economic downturn, our energy services business, Southern Company Energy Solutions, had disappointing results in 2002. However, we are retooling that business and expect  to see improvement. 