ATO - Earnings call transcript Q4 2017 | Atmos Energy Corporation

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Operator

Greetings, and welcome to the Atmos Energy Fiscal 2017 Year-End Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Jennifer Hills, VP of Investor Relations. Thank you. Ms. begin. may you Hills,

Jennifer Hills

Good call and on is Jim. joining the you us. This being morning, you, thank everyone, for Internet. Thank webcast live

available atmosenergy.com. release our earnings and call presentation Our conference website are at slide on

our factors As that we results contain of Act, please the financial and Securities review forward-looking forward-looking some The statements from in and actual are that could differences discussion meaning Securities projections future of are Act further mind described the and in keep XX materially cause our expectations, on our differ discuss could these outlined SEC Exchange -- might statements fully within the Slide material such filings. results. on more and

of Chris? Our Atmos first is and Energy. Forsythe, speaker Chris Senior Vice CFO President

Christopher Forsythe

and per appreciate earnings Thank represents share, your we good us and Energy. We $X.XX in XXXX the recorded per consecutive fiscal of morning, of joining diluted everyone. interest operations increased you Atmos earnings Yesterday, year share. which XXth continuing you, from Jennifer,

Our of that our provide our in highlights Slides August. for updated the and financial X segments. middle performance, communicated in range each we guidance of was as expected, X

as approximately completed benefit which approximately our that to million, XXXX performance design also year-over-year. warmer XX% million about fiscal in satisfying margin especially consistent XXXX we're XX XXXX earnings foundation rate for mechanisms the of and prior was the as than serve of revenues the warmer provided Our we share increases of will XXXX. per and operating flows. than income underscores resulted growth fiscal X% from able and predictable $XX importance filings XXXX, that of was weather and despite achieve annualized In XX% and normal outcomes This $XXX cash regulatory that year. regulatory activities Rate our incremental

margins $X particularly customer about million growth addition customers, which customer distribution approximated economic almost We activity in and $X contributed XX,XXX customers, manufacturing And and saw million increased margin. new growth, experienced Kentucky/Mid-States in service we also or incremental automotive X% positive the primarily about our our through transportation in several activity incremental segment. Net of area. of

spending O&M testing, integrity in other monitoring in-line and testing our maintaining hydro in system activities. Our safely focused

which pipe. the XX% major in our fiscal this non-regulated rate natural our 'XX project in increase APT all completed DFW Our million an fiscal just keeping increased improving this excellent XXXX, work, to of did with fortification employees our to in at-risk as decreased over We we as $XXX job approximately to X.X% for segment completion an on managing segment, the XX% marketing sale spending inflation vintage we're million our $X.XX of Capital business XX% of in to of O&M gas the million. pipeline prior at spent billion, year $XXX replacing of our X% spending we the storage focused market. $XXX continue and in and safety the storage business system. reliability Strategically, our year-over-year. spending distribution and included Spending increase of

of were per $X.XX are acquisition regulated share fully pipeline acquire proceeds A fiscal used diluted We company. now during a This contributed $XX for portion gas 'XX. natural million. to North Texas the the

us help However, more of importantly, the needs it gas growing market. will DFW meet the supply

facilities. billion under financial program. per and year; and $XXX million The million our completed short-term available $XXX long-term net of million had At to were we save successfully that our debt of customers refinance $XXX we XX.X%, debt with debt September financing. of the million long-term over credit $X capital capitalization of long-term total XX, will $X.X replace Finally, used and financing; equity our expenditures proceeds was approximately capacity equity

fiscal that for a well we $X.XX announced of expected range to developments $X.XX to us All diluted are position per fiscal Yesterday, share. XXXX these earnings successful from XXXX.

of $X.X billion. successful in and fiscal our continued fiscal to million. natural infrastructure allow We system This expected strategy consistent to with range XXXX $X.X $XXX activity continue operating delivery our our are will XXXX And the focus us anticipate for expenditures gas to on and implemented upgrading XXXX receiving between fiscal rate the annual with be expect serving spending, investment of billion to year's Capital $XXX driver as and next safety system. execution increases results. primary we million income

will live Next through our be our hosting Analyst available week, Day, which be we webcast. will

your and comments. We for presentation. Thank are call time, more the over turn that looking forward to to detailed update I'll you Mike closing during providing for his

Michael Haefner

paying the of to development X,XXX financial the reliability is customers dividends including of huge exceptional shareholders in delivering you challenging thank natural remarkable another the dedication everyone. our our and part great to for as as form work Energy yet improved paying form in Fiscal the XXXX strategy, employees, very in successfully and much, that year focused employees and reliable results, increasing opportunities; gas service; represented of execute morning, our our investment update, effort along becoming of continue Chris, most strategy, the to on with our safest Well, Atmos country. an regulatory and and dividends consistent dividend. meaningful in we form and This on the to and as well for good utility

board XXXth X.X% natural providing which it fiscal peer to share, annual is into dividend group we outpaced of indicated for cash seventh supports in performance, gas our increasing strategy. shareholders diluted as while investment quarterly XXth our journey infrastructure since for now of return XXXX, investors the to successfully our continuing The our to year safest $X.XX experienced execute This September move total dividend. investment the return infrastructure and the our XX, our of was is shareholders to positioned very year back a on XXX% XXXX XXX%. of utility. commitment strategy over nation's year. attractive recognition of the average total fiscal our consecutive In their well launching for the consistent XXXX significantly fiscal future per October We're a increase the XX% our of investment return the to an our as And dividend, become XXXX. Our declared consecutive

transmission With a regulated, of business, non-regulated our now that where is company pure-play gas the more sale fully with making stronger needed and valuation. natural operating the distributor, jurisdictions is in investment our a investment to Energy marketing distribution Atmos regulators understand even attractive system. an modernize We're

supports mechanisms needed in to our safety have investors, invest effort for by of regulatory make a competitive the to reliability provided minimize costs provide our and further us and opportunity to opportunity investments Our system. our allowing lag, return recover the these which

we program As completed predictability, approval in very about had $XX replacement two for annualized operating from annual important. million. those proceedings consistency our progress growth, September of income of along XX we of the of XX, pipe of We Through Most this came that regulatory recognize yesterday, increases in million. $X are proceedings increase and Kentucky. have seeking with

our Analyst will through we X-year Day, week present plan updated our fiscal Next at XXXX.

Our strategy remains the same.

per very base, earnings is of affordable. growth bills very infrastructure and environment our investments support gas a long continued to price which the expected horizon year. to natural These reliability invest to rate The the and to us low system share while of of stable safety keeping investments. have We will allows our per X% customers' of enhance in value continue needed time X%

the support return plus projected of earnings total Our should to X% growth, dividend, XX% shareholders a to annually.

department. transitioned Investor go as years Relations after reliability November acquisitive we of of investments. company before in retire now our know, our safety, organically XX will an you system to Now from the leading Giles we instrumental to strategic developing at Susan that grows as questions, other most one Susan end messaging and through modernization of was

had about work of have opportunity the with her. has most way. right earned relationship very and the those who great builder, been bar things the straight cared a to She's company, around Susan a her adviser, a and Susan the Susan But of day. valued respect all, a the day an us communicator wonderful the right been for the investment community she's herself years, those XX doing and and set advocate high for to shooter. of For

grateful retirement. best We very for her and contributions, very, wish her the will her forever in be we

met Now years Jennifer's her, her Susan's experience our you'll Jennifer perfect call York. of on fit Hills, successor, in accounting experience Investor today. already We're meeting attract and experience efforts XX Jennifer was if a roles. have seven forward. going contribution is inaugural who's to Relations of enjoy to earning's very in Jennifer her finance lead haven't you And brings corporate her New celebrating helping most week Wall years recent Street, next team. another our join glad

XX journey years Kim the to recognized the acknowledging assets, of X assume working company. a Chairman to CEO years. only XX beginning. recently new as to years restructuring both he fiscal Kim of contributions to do I his strong look has Lastly, role Executive culture, And improved business make benefited communities foundation, very to moved who without the Every distinct leaders continuing close investments I've mechanisms on out the closely Kim every and successful healthy had so Building Kim's rate our of of forward of with need with and leadership, I guided as from invest feasible. have infrastructure, to and pleasure our those cannot the employees, and is stakeholder, the leadership in area our the after our vision. shareholders high-quality nearly and single I for roles. he Cocklin, and and under the safety capable XXXX customers,

back Tim? time this it appreciate we your and So question. now will for I turn morning,

Operator

first Turnure Our JP Instructions] question of of the line Morgan. [Operator comes from Christopher

Christopher Turnure

until transport within we're plan get etcetera? of But XXXX, current wait to for stands your you to refresh going third-party margin, can through to it remind what plan. long-term are know modeling you us, have customer and week refinancings, I growth as the the next

Christopher Forsythe

is This Chris Forsythe.

of through XXXX, customer growth. year and It's predict didn't we In same transportation margins. current in material for to hard year out, thing terms any assume that the plan

a did have financing, week. debt terms XXXX In equity of mix long-term financing. update in and balanced And that we'll through of very there next we again,

Christopher Turnure

Okay.

side, like there. growth base on then and transport And margin So pretty guys you had sounds on... in conservative the it a customer

Christopher Forsythe

Yes.

Michael Haefner

it have mean, and know in we Chris, on have consistent things already with our that we everything plan, place. else we in base I

growth. So we're upside about conservative estimates any of for

Christopher Turnure

gotten sheet maybe little what's consistently plan a the I've regarding debt creative the or Okay. -- plan. the the other there little side opportunities think that's be right pretty message kind of And been on then a debt than financing; balance equity bit guys you there more now? of But from early are in in bit on retire that I to the

Christopher Forsythe

strategy years. doing the the been we've with financing think going few find I you'll last be what is consistent that to

Christopher Turnure

your weather. underlying between Okay, guidance? you give XXXX XXXX and is modeling impact can a fair enough. we overall the the versus purposes, us count And then weather share for 'XX model out so 'XX kind just for on was for can And tell walk -- us normal that of what

Christopher Forsythe

Right.

On side, we weather has -- the coverage remember, margins. in our have XX% WNA

we were before weather we back. from margin I just If WNA. year-over-year, all much But So about recall lost brought $XX that million $X pretty down million. correctly, WNA

mechanisms count, very, So we'll are for update And that again, share working the well. on week. the very next everybody

Operator

from of of question the Morningstar. comes next Our Fishman Charles line

Charles Fishman

of state handled Railroad any the I'm on Railroad have in you situation gas -- Do the have But are utilities Conference insight almost what Reagan ago, recent the the tax those electric way has utility at occurred the for discussions Texas from electrics? distribution and any the with about tax handled with years course, Commission of years back unique cuts those Commission how we to house of And that reform. cuts Railroad Electric ago. Those input obviously, that how week, landed XX was how us the natural this that level typically cover state the tax the just commissions regulating assuming ago. earlier a happened that Reagan utilities discussions in was, the a commissions But movement many Atmos Edison do you topic Commission. similar talked heard years handled about XX XX from on about

Christopher Forsythe

Railroad Texas don't years Unfortunately, fingertips. find just XX that was the what the -- Commission This but do we We in quickly, at our I can at Commission regulating recall very did right industry out is now, it guiding that Chris. -- have The or the not ago. time. immediately

Charles Fishman

Jennifer Well, assignment I back her research to of and give as that understand I'll to her that. certainly Maybe get first on that.

Jennifer Hills

Okay.

Operator

of line Seaport the from comes question next Our Instructions] of [Operator Global Levin Mark Securities.

Mark Levin

lot Obviously, in of Congratulations to last everyone. changes quarter and over or new the a everybody roles. so,

of -- over there the out you congratulations to being change quick several was still X that model Obviously, So any reason becoming much I to acquisitive? you years, yourselves -- going the from mean, organic an when been of five years? more why number it same happening that one three could the that last forward. A will growth. to think anything Is last trajectory sort may M&A-centric there that's you you the everyone. certainly, there of Is transformed Or the question about be Atmos kind over Atmos years? next more see over the of sort

Michael Haefner

reasonable convert Yes, This have and $X are we XXXX. Mark, do over plans any know, that our billion and you mean, our I spending earnings today in with we've M&A, to of change got extremely we high, valuations year don't between expect now thanks. portion opportunity No, Mike. -- a as views any certainty. we've the into not of is on see as to in a and

it's now, along, we never very got Obviously, of safety are opportunities, low importance got if a plans we've support. we've conditions never. in that bills our given of not it operating at investing areas in opportunity. stable, it would but look but when to we've And tremendous So really, came prices in understand something we've long investment a the growth runway regulation, this environmental and definitely We've say of in and got very our time keeps got this at constructive we're got gas reliability regulators lot the customers' we affordable.

changed views on So have or don't see we that change. will our that

Mark Levin

the consider any or opportunities aren't regulatory pursuing would robust? or opportunities states jurisdictions are divestitures any in maybe you -- favorable the there aren't where growth alternatively, as as And

Michael Haefner

comfortable in plans very We're point right at No. we the with this the have and assets we now time. that have

Operator

over Investor to questions Hills. of further at over back Jennifer the would Relations, no VP audio to conference turn portion now are I of this There like the the conference the Ms. time.

Jennifer Hills

for you thank you I'm website this call joining X. our of We Thank joining through interest February to is Goodbye. Atmos us replay for Tim. and you, remind in you today. available Thank recording a Energy, going that your appreciate for on us.

Atmos Energy (ATO) 10 Nov 172017 Q4 Earnings call transcript