We are managing the business well, capitalizing  on our strengths and adjusting where necessary. Our strategy is sound, and I see no major changes to it in  the foreseeable future.  To continue our record of success, we will have to work through a number of external issues. Some particularly stand out.  The slumping economy is challenging most  businesses, including ours. We’ve been able to manage our operations to reduce the impact of the economy.  A strong recovery does not appear likely in 2003, and  we have adjusted our budgets and financial plans. As always, we are giving a great deal of attention to our environmental responsibilities. We have commit- ted, in some cases ahead of compliance dates and  voluntarily, to install equipment and make substantial capital investments to improve air quality, especially in the metropolitan areas we serve. In the Atlanta area, we have spent more than $1 billion over the past decade to reduce ground-level ozone, although we are but one of many sources affecting air quality. We’re  pursuing research and development of alternative energy sources, such as biomass and coal gasification. Clean- burning natural gas is becoming a bigger part of our fuel mix, which is a positive environmental development although it creates longer-term issues related to the uncertainty of natural gas prices. We are achieving  significant environmental improvements even as we increase generation to meet growing energy needs.  We have long believed in the value of sticking with the business and markets we know best. I believe our focus on disciplined decision-making and customer  satisfaction is exactly right for this company. Our people are talented and motivated and working better than ever as a team. We know our business. We understand the challenges and opportunities ahead. I am very confident that we’re on the right track for continued success.  Thank you again for your support,  5 Allen Franklin March 14, 2003 We are closely engaged in the discussions over  proposed changes to federal regulation of our industry. We agree with the Federal Energy Regulatory Commission that there are potential long-term benefits to forming a regional transmission organization in the Southeast. But we have some concerns. Specifically, we want to ensure the structure of any such system doesn’t harm our  customers by reducing reliability or increasing costs. FERC has approved the general framework of our regional transmission organization plan. However, a separate FERC transmission proposal known as Standard Market Design would, in our opinion, go too far in taking  regulatory power away from the states and could have a harmful effect on retail customers. We will continue to make our voice heard and work toward solutions that benefit our customers and are fair to our shareholders.  Challenges and Opportunities SO 2OO2 Earnings Per Share (continuing operations, in dollars) ’98 1.41 1.33 1.52 1.62 1.86* ’99 ’00 ’01 ’02 Return on Average  Common Equity  (percent) ’98 10.04 13.43 13.20 13.51 15.79 ’99 ’00 ’01 ’02 Operating Revenues (continuing operations, in millions of dollars) ’98 9,499 9,317 10,066 10,155 10,549 ’99 ’00 ’01 ’02 * Includes positive impact from weather  and one-time items of 11 cents.