ATO - Earnings call transcript Q4 2020 | Atmos Energy Corporation

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Operator

Greetings. And welcome to the Atmos Energy Fourth Quarter Earnings Conference Call. [p Operator Instructions] As a reminder, this conference is being recorded. I will now turn the call over to our host, Dan Meziere, Vice President of IR and Treasurer. Thank you, sir you may begin.

Dan Meziere

Diego. you, Thank and everyone, for us joining Good thank today. morning, you Financial morning With Senior President Chief are, and this Vice Chief and Forsythe, Akers, Chris Kevin me and Executive President Officer. Officer;

call non-GAAP slide earnings in prepared financial presentation Investor measures. are remarks, also and the Our at under tab. presentation, our atmosenergy.com release available Relations we will which includes reference conference Today's references to

measures accompanying to refer You closest reconciliations information today's slides presentation the the and for to measure. should of financial in non-GAAP the GAAP information definitional contained

that As of discuss we forward-looking review future and expectations, these meaning of Exchange financial Securities the results please and keep our Securities in some the the contain might discussion Act statements within Act. mind

results. outlined that differences the Chris in now Our such material call Slide cause on our The will to factors more projections forward-looking SEC from statements and fully are could turn over and could XX are differ I described filings. actual Forsythe. materially

Chris Forsythe

good appreciate to to fiscal can per earnings Thank morning. $X.XX earnings reported join we morning you the of you, share year. in $X.XX, Yesterday, prior per everyone. reported us that share in Dan. your Atmos XXXX and happy We diluted And this are Energy compared interest diluted

quarter state included reduced to As per that $XX fiscal rate. income million during a a diluted recognized Kansas a or legislative tax in our share XXXX reminder, related our tax fiscal third results the $X.XX non-cash change one-time, benefit of deferred that we

summarizing heating the began the per economies represents the that center XXth states our earned of rising serve Excluding the fiscal XX% share. we areas had of By share of fiscal of This the distribution our pandemic end we benefit, $X.XX. consecutive this for year, non-recurring winter time at impact for revenue the diluted season. In XXXX. XXXX to earnings year was per

plan we third at activities with to revenues. Given fourth healthy quarter. that the the fourth third spending we and the to and to in time, employees And and non-residential align during quarters load the our were loss about uncertainty reduce conservative economic keep anticipated anticipated O&M

loss O&M load was fiscal of year residential the revised our we less And maintained spending six the of in the Our line quarter. months half second had in our we the originally severe we fiscal guidance back issued with year during anticipated. than fiscal last after

and year-over-year the safety on closer details segments. highlights. the operating each a for Rate year driven and spending, result, of $XXX higher at segments, to rose our of to in $X.XX $XXX XXXX capital in reliability by by guidance million. our increased income operating XX% operating X income totaled of of fiscal came of changes range a provide of EPS end As I look, a our over earnings X to $X.XX. the consolidated Slides both touch million. increases our fiscal will Taking few

a to We million experienced primarily of in in increase distribution income, $XX Mid-Tex division. customer also growth our operating due

the over customer commercial consolidated consumption XX% experienced months the customer XX segment $X growth million of a decline same operating XX, ended distribution reduction Mid-Tex a growth primarily last during net the X.X% On We year. of division to due we a experienced During of basis, in our in experience net the income, did six period. X.X%. months our in September

capital system. during safety, completed billion employee, spending, of for during XXXX, segment. to over With Consolidated our offset lower this increased the to storage most declined capital than segment our the revenue, our test segment, and miles due we team reduction within expense. higher reliability income replaced travel approximately associated our Lower segment decrease and was to this an in storage and volumes accomplished of our implement decline Permian of which of first In and our March million activities $XXX was reflecting compared costs was $X to And lower in XXX the gas states through regulators a in million since offset million debt year. experienced and fiscal in to experienced service end investments in eight order about training a period since the return the the of by collection with fiscal Consolidated our expense in of suspension $XXX spending O&M prior also declined of O&M pipeline with additional agreement implementing quarter. XX% distribution distribution lines In XX% flat end. across fiscal due operate. annualized line million months began XXXX of half XX% fiscal expectations. prices system environmental XXXX service income the $X.XX $XX reduce We spending the by towards which year, XX,XXX operating spending of partially transmission earn modernize We XX% our revenue, primarily to Basin. XX% we bad our to six in million we and spending in persistent directed was $X increase annualized spending distribution performance first of year, by of XXXX operating our year. activities in the maintenance with reached our an increases. and pipe this fiscal pipeline

pending to As about of activities. today, $XX.X regulatory Slides we have summarize XX XX our million. three to seeking filings

long-term $X.X maintaining the equity we XXXX, we X.X $XXX XXXX shares sheet settled million while proceeds program. equity position. forward billion and program, ATM During our further liquidity X.X for the equity million shares under strategy and of and executed million. long-term Under strength our net of We for agreements sales $XXX completed enhancing our balance through needs our issued million fiscal fully financing debt successfully fiscal financing. We over our of satisfied

million the million the long-term loan financing XX, million we last and April. complimented under As remaining in we September about debt equity executed $XXX a in had This term arrangements. $XXX issued forward financing we $XXX equity fall

result these of was our a activities, of As equity as XX. XX% financing capitalization September

facility million balance move Details year of as XX. found into Additionally, we parts of well The fiscal held sheet addition escrow arrangements. positioned activities, the be strength with cash and our leaves to our we as our doing liquidity, capacity, our finished as credit XXXX. liquidity X forward of arrangements, approximately the of well financing of fiscal billion profile new us equity including in forward can including under $X.X in of Slides equity financial $XXX

earnings remain the modernize systems. operating storage fiscal forward, same. represent to tenth Looking distribution range the years, to year will $X.XX XXXX distribution, Consistent fiscal our will share The two-thirds per the from our transmission Yesterday, $X.XX. executing our we initiated about and of in guidance operating come our plan segment. plan earnings XXXX we expect of our of prior of fundamentals with

uncertainty grow no season. per fact now due the $X.XX. continue to continued Over as about per of to a year. we XXXX, By heading our to residential $X.XX the have seen we revenue in will From perspective, we material revenue be share X% we we changes a in next share fiscal anticipate the five winter per X% into anticipate economic to revenue earnings are the result to years, heating earnings non-residential cautious COVID-XX. of the and our range that remain And

APT. fiscal sensitivity load we Although estimate summarizes earnings distribution key scenarios it the are guidance. might revenue the provides class. aware, and is full each consider And multiple the attributes for is sensitivities per you we by difficult we segment customer for volumes by Slide change as loss pipeline year performed segment our our potential X% as XXXX performance EPS that to fiscal storage in driven experience, sales the precisely XX predominantly of share

the including division, pipeline system keeps business design. to a approved remainder benchmark APT these fixed between under revenues over reminder, delivery thru services. of Mid-Tex variable The from a we earned earned of XX% from ancillary APT's our revenues activities design. of and As relates are rate and APT's million revenues straight difference actual in to services LDCs, its its $XX only rate other XX%

XXXX have changes help some do work, PHMSA's an reflects management assumed APT's compliance-based that safety. activities guidance integrity effective X, the XXXX rules July that O&M we establishment as surveys, became O&M fiscal around integrity that us records market continued portion potential of and XXXX, of work we and new normal which include execute focus have to address flexibility leak spending we this pipeline address could system with we'll small perspective, revenue. program to These the on Our for continue to fiscal enhanced our to spending, business. timing conditions From activities Similar retention. O&M current align

inflation through focus we our As to fiscal X% we assume system, operating of safely O&M continue continue to X.X% annually to XXXX. on

to dedicated rise range safety reliability which billion also our the X.X% billion. methane of found XX. expected is be can months reduce spending Approximately begin XX% Fiscal capital is XX% a allocated system. test segment. emissions XXXX from spending expected period end. $X.X return within and Approximately to to of capital expected Slides distribution spending our be our this from six Additional of XX details spending is to spending, will the consolidated and on $X will be will Over to XX% earning and to of about

XXXX. for system net modernization in earnings per will income for be capital increase spending replacement and anticipated spending, fiscal driver through Continued primary the the share

us rate a of as which per to XXXX we up translates returns should the billion estimated year efficiently spending. off $XX rate to mechanisms billion we be These can to you Slide billion X% recover the modernization five investments. support efforts. years. while fiscal end finance means the the at XXXX of for about This capital XX, total of attract providing base an spend support billion anticipate XX% ongoing mechanisms in As spending increase we Annual see into filing more to our see year. these over need capital will the system of mechanisms XX% that a fiscal produce billion primary And regular on of our to to about through smaller This fiscal can enable per to bills, and rate capital XXXX, impact $XX on base the customer from levels X% next our deploy necessary to you $XX $XX XX. to about $XX adjustments Slide generate capital growth

XXXX, fiscal fiscal XXXX regulatory annualized $XXX XXXX. outcomes In million changes will we to We to have million fiscal anticipate and no assumed through mechanisms of impact $XXX for these that filings completing XXXX. years material

dividend Yesterday, Moving approved over fiscal to in XXXX. financial fiscal indicated performance an Atmos quarterly consecutive the LIBOR of Directors dividend. This XXXX. XXXX increase for Energy's X.X% Board cash XX, XXXth fiscal $X.XX, Slide is a

maintain our equity ratio between long-term strength anticipate XX% financing from our with use five-year to with note strikes it the to will plans, in of is mix five years payout us in the to our right strong target $XXX with This next between credit share in our share the plans short-term consistent to the a a plan our their has we of XX. dividends billion per modernization to balanced our been of cost grow prudent on capitalization preserving million return debt. a guidance we've shareholders next equity-to-total the expect approximately investors spending XX% last customers support we senior and to XX-year to completed the of system The strategy, prior years. to continue and in This enables line issuance who a the through to summarized balances financing. few and per to of and X.X%. continues $X.X Based our earnings over to over with targeted of providing inclusive financing in We the It share raise per invest fully reasonable sheet billion while assumptions, a order earnings financing we of plan also ranging executing $X.X minimize upon years. with of need capital continue XXXX. And investments. October, In metrics strategy and coupon balance funds balance over structure continue long-term and five reflected a year interest debt XX%, and Slide our a incremental using operating ratio our

equity As debt perspective, an a weighted during as equity result, fiscal a of XXXX. portion debt of October overall XX with remains equity expected X, executed cost a fiscal our years. of very maturity satisfy XXXX our manageable of stands significant for X.XX%. average And forwards the will weighted profile From we XXXX average our at needs

And through spending, We equity our those ability recap, various at XXXX the timely needs also X% system bills earnings I this fiscal remarks. of see can you through for fiscal expect XX, plan for the annually will to this XXXX. Thank execution of investments for share recovery dividends to to remaining on X% call the program. per keep morning. us will disciplined financing, and this sustain to to you grow capital our customer the the which and balanced through will raise long-term. through To as support Kevin? help plan modernize time turn for Kevin now regulatory execution plan long-term our this ATM over our of all mechanisms his Slide your affordable,

Kevin Akers

in you, We And Energy. Chris. everyone. appreciate us your Thank today Atmos good interest morning, joining you and

keep the of for success success company. say the again the their our of these safe. regulatory many talent foundation and during families reflects of the thank Gas in associations, XXXX said also to take times. our commissions, themselves I'd X,XXX assistance to provide sustained that before proud and our fiscal extremely for our Association our and are heart healthy support X,XXX and X.X companies, commitment like million Energy this they and their well I'll American dedication our I'm long-term Our as it the of I've communities, and state their soul to and employees. customers, gas as Atmos opportunity it today peer our challenging state

pandemic process way us risk during forward. and us well this navigate management continue robust guide has to Our as extremely served we our will

we X,XXX to previously As a compliance Energy well committee our were risk work transitioned work through senior team, management leadership prepared I've employees when environment. outstanding all shared digital and and our of the Atmos

our at As fiscal to performance, see has execute year proven team on you their levels in our and financial all facets operating highest ability our can the business. of

work another. March leverage with digital that for environment us to one opportunities to in tools virtually move provided Our new connect

gas virtual to This has XXX To-date, designed is workforce the over created by technical employees exciting format have for teams. possibilities part curriculum trained One areas a as training. a our I highlight of of wanted development today this is training and our us we play gas utilizing design critical vision safe of our is natural important our and they of a provider can serve our safest every out services. being thrive. bringing delivery in time, our best communities we natural role invested the service. so We community in the talent Also through resources our in vital

that with meals lunch, other and that's September, school hundreds month, that all local Action need food provide joined succeed. districts, Hunger develop breakfast, For healthy to snacks children we example, of forces banks during essential and and organizations grow,

these third Giving to will employees Additionally, we of provided Furthermore, resources further important that help Week to students United read The annual $XXX,XXX during employee work September, our every Salvation Hungry, pledges Atmos No Kid match and generously nearly Way on-level grade. donations Army. do Energy support benefit in by pledged the agencies day. our in our

We assistance stay to help non-profit also energy their million donated homes. than customers XXX organizations to $X more warm local winter or weatherize agencies this and

invest our billion reliability with steel, of billion identified to years, bare plan identified mentioned, replacing allocation and risk-based includes we to $XX that over on strategy capital investments spending XX% focused industry that plastic such iron. five vintage safety materials as and by next As cast Chris capital the $XX

growth Atmos had Investment, and net this customer particularly growing on reliability, as continue division to addition a in Our our safety year. earlier, North serving mentioned Pipeline-Texas to Texas. Mid-Tex Chris in X.X% a And will focus demand, past

capital see of pipes five system our remaining spending support about years system. total the division. you main our plan we Mid-Tex iron of and and replacement in replacement over of X,XXX the bare on is in of or As miles steel of replacement Slide amount distribution X,XXX the this X% anticipate will next outside can all XX, our to X% our Included cast the to transmission pipe of

to We steel also next by expected reduce inventory XX%. the lines, XX% XX% work replace system expected to plan is This service XX% our XXX,XXX to our of level reduce which emissions over methane between and replacement from between five XXX,XXX to years. is to

as fiscal our of wireless end will technology of reading with XX% anticipate side, XXXX. meter wireless the year be network, the part of our operations equipped at On systems we

network, from transmission protection this distribution through ability wirelessly across our systems. receive cathodic the and are Additionally, data we monitoring testing to

systems, supply, on categorize In further have areas: fleet, carbon focusing we facilities and our addition environmental five other footprint. We our to operations, modernizing focus into ways been reduce our to gas customers.

about For RNG. example, on us volumes. gas X% distribution our sales is supply you've say Bcf transport Today, which system, heard our before, is we as five our across approximately of

increase to opportunities several identified amount system. of have RNG on the We our

For interconnect from level additional example, facilities. dairy company an renewables agreement RNG with just we have of for a three signed an

to is environment. how will develop and our too ultimately be working all stakeholders commercial for commit and support RNG transported be the help it soon customers we improve on our with solutions much regulators viable to system, to Although frameworks RNG can to

in we or LEED, certified LEED seven have under is Green the facility, additional provides certification of developed four Green Additionally, a that of LEED are and certified and Of category Energy Design, rating gold Leadership certified system silver. planned. facilities facilities, globally reductions. these have verification four recognized efficiency emissions are XX XX facilities third-party LEED-certified the and U.S. and Council Environmental Building by Building

to for our our the heard, the closing, water at equivalent strategy dioxide at reduced XXX just approximately XX% our emissions our levels annual are For per foundation remain facilities to and reduced long-term provide execute example, these the tons company. metric sustained carbon same. highest success of and you of long-term employees XX% year. is In fundamentals the And our use continue the as

gas strong most long fuel a in homes, your in strategy we'll and industries successful the to have. we of metropolitan Our interest constructive energy our liquidity markets the affordable, safely DFW now fourth largest execution that any several efficient may leaves Metroplex, strategy, and your our future. operate and well potential, fact businesses that strength us And deliver time to continue by balance in the and morning jurisdictions natural and our sheet strong of Energy. our supported now you area term our this in reliable, country. The abundant and in have the notably questions positioned the Atmos the is continue growth to We of to appreciate needs take that

Operator

from this Instructions] will Thank question comes you. question. question-and-answer Kim Insoo Sachs. [Operator your Goldman Our conducting we time, our with first Please At be state session.

Insoo Kim

thank the commentary to year is embedded could morning, on give guidance, gave more of what My Appreciate as what's you demand on sensitivities in COVID are able about XXXX you Good terms with you. months. little first these think impact as guidance. net? happen But of question we a specificity that and the midpoint the any us on winter during to

Chris Forsythe

opportunity our for that need little multiple Good folks see with thought we would want do the said well. And I as earlier, to point program full morning, employees reflective what is debating scenarios. year. the think want to did Slide they assumed we that the align as number our a O&M about various of sensitivities. provide Also well scenarios Like load different Chris. we guidance to than by do with And I said, Insoo; that we out you our that to levers XX out us ran sensitivities revenues is as it in individuals, data this putting bit, this we've the rather make keeping like feel pull around exist But loss. that can some as to we to with and those non-residential extent a assumptions safe, they a of spending

Insoo Kim

seeing that, you greatest enter risk – on it. months? Got the to just we winter And demand of those into markets these to are top as what

Chris Forsythe

the Louisiana when the commented markets, at continue half along we moved as of of see. I and as me year, look think, and saw year, just most I of we it the with right to the decline and we commercial our recovered nearly severe on at back in Mississippi fourth quarters. are two as Mid-Tex earlier. now, have that watch towards third other that – our wasn't to anticipated. But excuse you half back through certainly And – It the

the respond think protecting be to I contending spreads, also the buyer needs the balancing going how upon states it's contingent the of the citizenry economy. also spreads, and to may how

Insoo Kim

at around Understood. of imply looking X% giving guys the consistent a above or numbers versus through times more And bit even the CAGR achieving prior When years. the to does do end is, that to you X.X%, the been place? that how then, been How able at it large have off most currently XXXX actuals, little some in and financing just a plans CAGR CapEx you're than in X% XXXX being we've guidance, upper that's of the five-year of terms look the of less the longer-term have at EPS, calculating of this conservative law in CAGR or the you the that. much you so of much up historically we kicking

Chris Forsythe

Yes.

going an I around is non-residential numbers in Because there seeing mentioned. about into be to winter heating year, of think this the we loss load as we're the we're I go element season. what conservatism our cautious as

out, the the of that closer achieve kind that If of how and back would do then extrapolate we to you fiscal midpoint believe. you X%, the get go guidance for kind of XXXX, you that to I

Insoo Kim

At just in create financing timeframe more. is new Yes, structure guys additional think and when to consideration over one HoldCo point five-year creating and you help what you understood. this capacity? you look this And do a potentially

Kevin Akers

to capitalization kind terms so the seen financing, We've get tried at level have operating pierce at level. level Yes. We get so to questions debt from and The It structure capitalization, instances time the for minimizes on that get try operating impute equity level that at a current of the are forth. at time. provides parent our the that to structure, around and transparency regulatory holding you we regulators in company what OpCo that versus of to you to environment. doing the company our parent be question where level like

one a we we're perform question So, takes the question table. structure remain the can today to and transparent monetizing what more the about – more with we capital we do like off just And more talking of way make on having doing spending less terms safely, off one in reliably it environmentally feel less system focused responsible.

Insoo Kim

much. Got it. so you Thank

Kevin Akers

you, Thank Insoo. Okay.

Operator

comes Morgan from Stanley. Byrd next state Stephen with question. question Please your Our

Stephen Byrd

Hey, good morning.

Kevin Akers

Hi. Good morning.

Chris Forsythe

Good morning.

Stephen Byrd

on good Wanted there the a Congrats continued very results. on questions were that asked. of couple to just build

you Just and any I curious you've – rate continue rate the over growth? growth? base how bigger. base think thoughts a time, you just there EPS had about do changes are and to delta I think between growth delta get to there. fairly If sort consistent was around EPS approach between of as that your

Chris Forsythe

Stephen, by ability didn't markets, our we $XXX of liquidity that have access commercial we opportunity in us impact as that place. further year as balance much strength the this sheet. saw equity using to about of the years. prudent to with delta fashion the we've markets, gave that believe financing of the that as plan in the we certainly As it capitalization next the years is important five operate shocks And could before, strength And we've million a enhance The because mix five the balanced result did of the also – debt that of long-term we paper financing a the have that next balance material large we the earlier assumed and largely to a corporation over over and certainly reflects sheet equity. talked continue the really

Stephen Byrd

been balance have. to a asset for balance certainly Understood. all sheet – That your conservative sheet has you nice

Now set great that really is do sort when to kind of that Really of Are others, of add at provide is spend high in context makes and that you skill inorganic you think skills shift you you I sort time not which M&A, where to the or about capabilities growth? there thinking sort developed often you've gap could of time more value-add sort level, categories over see skill you the need of over organic set inorganic think any you've that applying I a value? in you growth, much to sense. and – of don't you certain the got wanted kind that know of something about about could of a growth.

Kevin Akers

is Stephen, this Kevin.

our I start back know five billion to Chris invest earning with take XX% of Within to, and billion. months. we plan months, we start well. me to And six on us rate end and earlier, the years, construct very said $XX the Let XX% of as XX and next over that $XX you by

So we can to right our that that we're that going We've focus or that's level. very where there. last decade over strength. so at That's continue a proven the understandable to and execute story for our everybody think state level employees, at is to regulators regulations I to compliance. federal follow. now our the And for our the investors and hard meet for working around It's

its ability game think So, safe, at the every service gas is of and and its I to right reliable day. think, through I our our natural now else, associations, through our peer top everything group meetings deliver industry operate and

Stephen Byrd

Understood. Understood.

capabilities nearby. and, able about soon. Okay. was near-term. allow we just to sort for of also sort your backbone of systems. be that. to that you combine latest this on proximity your of relevant some green hydrogen a I just could in a thoughts And create to on the there do is your might, I infrastructure to cases, broad, infrastructure of of with cost geography I was fairly And pure capabilities beyond lastly, curious longer-term do interested, expensive blended? on sort know given I And that pure hydrogen, maybe in curious, green is know that's your to hydrogen your potential quite larger green the usage could just gas. But what to thinking I hydrogen not your anytime future, accommodate be thoughts especially compared percentage the own nearby then, hydrogen with your to be really appreciate what to sort likely but the and in really conversion a to and I'm hydrogen just think could natural whether not system, But be green some

Kevin Akers

we in as And we all watching plugged are those and that coming here too, projects Sure. online, into certainly the before are states. particularly said the

what also point turbine particular a source As They – would in larger and hydrogen. projects are Germany. anything of particularly on blending a are Europe smaller their aware, or transmission of most several you're you watching level. going Right particular there very wide will, or We're or call on are on distribution those closely bit I single if around now, what's delivering not project scale scale, here. little that in

to the Gas associations Association, American plugged and other to projects. So Research Gas to monitor to we're Technology Institute the staying in those continue

So such mentioned, things, just do sort look and how the is where the the take what's on right, of end of a we things. those the the do the as you equipment, systems can use steel burners you what infrastructure, and on impact appropriate blending those at that,

So and that monitor continue may to our to in our touch with necessary, like stay that we're as for we'll those and look plugged in, what we're longer-term. continue of and, groups a continuing valuation systems

Stephen Byrd

That's you. had. I That Thank all makes sense.

Kevin Akers

you, Thank Stephen.

Operator

Please from Ciciarelli next comes question. your state Bank America. Our with question Richie of

Richie Ciciarelli

morning. How good Hey, doing? are you all

Chris Forsythe

doing, you are How Good. Richie?

Kevin Akers

Richie. morning, Good

Richie Ciciarelli

taking here. you my appreciate Well, question

Stephen's on if Just wanted question, a bit I follow-up could. to

could to peers, some front of players be territory. a your an assets, You And robust where CapEx in is acquisition to accretive. to divest given relative some obviously a seem few are in LDC would quite adjacent those it multiple service space you. the have plan just like looking There are your

So you guys landscape. thinking just about strategic are the curious how

Kevin Akers

Exactly.

the about, the we levels, our $XX back it's of type As And to that And that's hard through system, construct times what on, they regulatory sure to both shown focused modernizing and as been We've And our you employee are at at will. us system, sound we that again, we're for in to up could can at this cultural going to the distribution, look if on of communities go now, that going modernizing billion, over and and perspective. into on getting for a that our talked environmentally perspective be just part decades customers, billion $XX that say to rate focus our you forward long difficult tighten transmission have right and recovery, ability investing system get me a from know, recovery an integrate continue before, right And on we're both recovery that acquisition. the for our system times said strategy. you extremely continue and I from storage things, we investors. years. operational an our to coming making execute right perspective, to our a so several, we're and the we as you back to

Richie Ciciarelli

think, organic then, $XXX the And Got very on remaining needs forward. executed helpful. equity separately, it. the on for just XXXX, million you've Focus profile equity I here. That's on roughly in

roughly the is remaining program, million it $XXX $XXX range? through to ATM So is the in the million amount

Chris Forsythe

That's a assumption. pretty good

Richie Ciciarelli

this to to where O&M flat O&M on Should just talking leverage just figures offset And don't in then, there. front relative you with about on one last we Insoo thanks. about you what the that and in if Okay, come were keep expect? basically think response year you can sales the earlier that

Chris Forsythe

Yes, year I Richie. see have unfolds, the how we'll think just to

entire if have making just the achieving foremost, will. first you to still maintain to by don't we barely we I achieve throughout And think, – system. barely compliance it want compliance and by

just general we'll go of as as are we they look some at costs to general to just do to have does So and that in terms continue – inflation continue have up. just everybody

O&M takes So, at we adjust, will appropriate of we update see and and at extent looking we'll us time. to to need portfolio – we the fiscal activities just monitor that the of continue will to where revenue terms in that the – year the

Richie Ciciarelli

That's all Thanks lot. great. had. right, I a All

Chris Forsythe

Thank you.

Operator

from Thank Please question. comes your state with question Fishman Morningstar. [Operator Charles next Our you. Instructions]

Charles Fishman

the XX, far Good to X,XXX we you where as replacement X,XXX of pipe rollout pipe of years many miles many over pace miles will that five Slide stand – goes of looking where at are XXXX or as how next the end of at post-XXXX? morning. of What years, how kind on? you

Kevin Akers

Kevin. is this Charles,

now on service about rate. lines at right runway steel a XX-year a to have We XX

off on So, are XX% five at And about us same the of that we've that. got about Like look said, industry there timeframe I that will identified. you years down about then, get reduction.

system rate this model old to people would That the are that. or gotten will, past try rules we've modernization, under And mind, has today's out, where since a we'll regulation, decade you so gone. keep mean little stay of now the reductions always in addition, O&M years decade and if left. let's a have by on that's what previous smaller So levels types construct, that, into And invest And this, I do back various right. in at and equipment, materials. long over updated of through work

to and equipment keep got system to and invest it you the continue where the modernized, up when have to can. in technology keep leverage You to

to keep are construct think, up-to-date at other regulations of got in I your wanting these keep this as but to materials, current So, systems right. current possible, the also you identified mind with

Charles Fishman

then, that just forward, on realize have And I much now them. as was average just was argument, higher, told isn't municipalities [indiscernible] XX, starting that regulators? XXXX me the look and increases. the it serve, at I bill you're you Kevin, when good with What slide I as is Okay. you you're used you're comparing mean, significant XXXX do I the But to argument you you monthly

Kevin Akers

if as stated I argument. quite an don't that's know

on talking the household gas And there, $X.XX I $XX, you that for you again, And look you of when side. in equivalent $X.XX price somewhere are electric strategy. have compare range, bill that bill $XX equivalent we our the today think household the the around our think, you customers. when lowest I today's in it's to that's investment the sheet compare to about that at

$X.XX at So, $X.XX, you about convert side. over, the $X.XX, on $X.XX, that electric looking if you're

we're this affordable think making. continuing progress to at be investment that I So, we're

we send prices continue so And the the us it an basis basis of there. sit honestly, We paired signals the where production do that right to are with to well. as in on helpful annual certainly today

Charles Fishman

that ask in territories, an with market is it to you family don't Are if respect we've electrification – on your issue, correct respect you But new and some to apartment? this, how all-electric been share mandates with or how to seen are maintaining with me your construction? I'm competing single the home share has new coast. believe multi-family wrong. on affordability respect service your just Continuing anything new I market against there Yes. let me

Kevin Akers

particularly here us in absolutely, Middle the continue the to heard addition, you Kansas in as well territories serve just Well, in And Tennessee about we good Metroplex talk there. area. and organic area the show growth, around and growth Olathe

to said, So, grow we've to is Metroplex And and at from of as demanding increases look think, as natural yet. discussion seen it's haven't our continued strong. you you've that you we I a what got there. market horizon gas customers long electrification at here, good our the and share when And seen continues percentage how be wanting product, those push

talk the continue today. And they electric price, by that the at customers, rate a our like as somewhere to where our me to product we getting equates as value continue customers We serve that people range, said with and $X.XX show $X.XX a you to I to or brings. again and $X.XX today, $X.XX kilowatt the are

have remain competitive we continue and market continue to to strong think I So, share.

Charles Fishman

be call in increase to capacity, the would that come electric as utilities today, these a their huge with the that. that hard-pressed Kevin, think, electrification It's on respect energy amount I to the with up gas correct? of utility a would you deliver isn’t mandates,

Kevin Akers

right. exactly you're Yes,

right the of You've are Unfortunately, on folks the those having during Coast. particularly challenges, seen some West now. the peaks

that to heard me needs, in But as trying the in about going toward before, here is our probably million XX-plus population than million be less the right parallels to meet back and So a period demand it's by million, and adding decade. head taxes, million people XXX XXX XXXX. That's XXX in now, due more U.S. those to say you've draw even peak winter you challenging. to a

get it's it's reliable. talked to fourth you world, and energy? the leverage proven gas, continue Natural affordable as know portfolio to ways to diversified the going thinking to that grow we about, is abundant, a in we're reserve find when that country and as forward. just about why are wouldn't energy going continue don't asset I where And So, largest we that

where And it we XX continue million we it. to that reliable place customers the grow So today, how you're the right service. provide to to I today infrastructure right view XX million, that's on think industry that with that. And with the with in view continue spot are we that. We serves

Charles Fishman

all Okay. Very helpful. I had. you. Thank That's

Operator

time. questions closing There for you. no it turn are remarks. at I'll back further this Thank management to

Dan Meziere

call replay available interest a good XXXX. for Have your is of And December for appreciate Energy. our A in website us. Atmos you We thank on this of day. joining recording through

Operator

great Thank may today's a This day. you. conference. All disconnect. concludes Have parties

Atmos Energy (ATO) 12 Nov 202020 Q4 Earnings call transcript