ATO - Earnings call transcript Q3 2022 | Atmos Energy Corporation

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Operator

Greetings, and welcome to Atmos Energy's Third Quarter 2022 Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Dan Meziere, Vice President of Investor Relations and Treasurer. Please go ahead.

Daniel Meziere

Brock. you, Thank and third everyone, for our joining Good earnings thank call. XXXX quarter fiscal morning, you With are and and Chris me Executive Forsythe, Chief today Senior Kevin Akers, Vice President Chief Officer. and Financial President Officer;

release in prepared the reference Investor earnings we atmosenergy.com tab. available our and presentation, remarks, slide Our which call will Relations at are under conference

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

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

Christopher Forsythe

$X.XX of system XX% these recognized X distribution some period. X segments increased Dan, joining and good on prior primarily share segment. in $XXX months Fiscal by third $XXX $X.XX were you quarter Thanks, performance. Rate provide safety Approximately and net each net Atmos XX. or more in totaled $XXX our us and year-to-date was diluted increases of compared or income diluted everyone. operating appreciate and the increased Energy. prior will X $XXX share the spending morning, year-to-date interest in million, per fiscal segments underlying in million, Slides sorry, adjustments our 'XX our per focus and income operating for and million $X.XX and year diluted fiscal both $X.XX share -- diluted We your net rate or quarter reliability income driven $XXX X million of ended share with year income of significant in highlights per our per for the I drivers million June the expansion.

which of quarter consumption, robust second We This trend increased fiscal about distribution customer the assessed a in additional the during growth did operating income occurred in offset to an consumption segment, see most $X $XX million. which our in third million increased quarter. by continuing not decrease by as the same growth continue quarter-over-quarter. see fiscal in We million $XX

Additionally, in primarily we offset million experienced by $XX costs with activities expense. O&M the pipeline increase prior expense and a maintenance by driven debt consolidated lower compared partially year, bad increased employee-related

Finally, tax offset refund XX% in million. system income reductions reliability reduced in and to billion, to expense. increase 'XX safety XX% in track service remain deferred demand income million dedicated and operating our $XXX of system fiscal tax to with on system improving the growing spending capital our by the increased natural integrity the gas lower Consolidated spending capital This by substantially with $X.X primarily was billion We expenditures reflects fiscal territories. reduction spend to of billion revenue liabilities $XXX $X.X system. increased associated $X.X excess modernization, year. meet expansion This to or this

of annualized million the outcomes September X. on this excess have remainder tax Of million, On $XXX deferred regulatory $XXX liabilities. completed implemented the we we refunds have we implemented front, and excluding regulatory approximately of amount,

provide additional in about through activities. Additionally, we had the Slides progress. $XXX XX regulatory million XX around detail

pricing Our were equity our fiscal focused on fiscal third financing quarter 'XX activities needs.

approximately proceeds. executed million. shares million ATM for $XXX shares program sales for million And X on under net we X.X During agreements in approximately we XXX,XXX agreements sold for the $XX quarter, our

and with finished interim through our XX.X%, capitalization quarter 'XX. $X.X the of financing $X.X anticipated we of billion. equity fiscal have million liquidity June equity of all We of the existing under available net XX, total which approximately of satisfies substantially billion $XXX proceeds forward with agreement, excluding needs third As sale an approximately winter storm of

details X as arrangements on XX. well our our as equity financial financing Slides profile forward our through Additional for including activities,

now Turning securitization. to

continues third securitization Texas to and is make on quarter, Authority the the the completed work we be few During continued to it its program, the front. In we progress believe that statewide next months. on Financing Public on track within Texas,

of $X.XX Kansas, schedule, receiving once with to funds, financing fiscal we the 'XX a financing XX since reaffirmation our receive fiscal supports in third diluted expectations $X.XX pages interim first fiscal The reminder, guidance. our for order As the a our approved included during line Storm we In will the have fully the financing. per and quarter, order. in ranges on securitization Winter changed the $X.X performance additional filed our guidance we the retire details we anticipate and application earnings share. provide around per XX was quarter. billion 'XX the not procedural share the in our our year-to-date in quarter. of closing, those range last In Based Slides during

call interest Kevin end for our to the update do now Kevin? the However, closing his you O&M time remarks. of Thank turn some to anticipate for I'll provided. today. the over expense ranges at we higher be your and

John Akers

our focus Chris. and safety and employees ability results, being the thank will dedicated combined X% our and reliability per assets of fiscal provider earnings on executing natural to dividends continue of prudent our And share supporting morning, for strategy The you strategies, everyone, our These services. Good regulatory and financing joining strong through XXXX. grow year-to-date annually of to today. a support vision investment to X% Chris and just portfolio our you, reflect with strategies. X,XXX fiscal the safest vision that shared Thank us gas continued of

robust for territories. service in see demand in We our natural growth continue gas to

added XX XX,XXX new are of XX fully industrial have And During an customers ended June annual we Bcf period industrial XX this residential represents Bcf of customers quarter a they that XX, when customers added Fiscal we natural have added XXXX, which natural new nearly XX-month annual gas year, they usage during the new expected of expected increase. that the third operational. year-to-date, have when fully an operational. X gas usage are we X.X%

Humanity annual volumetric equivalent just of Home also operations, key customers. X our That heard XXXX. and our illustrates early X, the a this all Homes corporate to we we executing X Texas responsibility panels third summarizes Net recent our additional month, say I as of the our environmental, one first in underway quarter environmental customers. supply that more Energy Kentucky, Owensboro, partnering exciting most are And families north industrial with each in natural corporate this which a consume Zero that highlights in Again, me manner. energy we've fleet, in appliances, strategy social Austin. operations the Homes that completed X Colorado focused heard fiscal X and completion Net from year. in Net X of Energy Last The residential Home one of in is our Evans, Bcf basis, as November XX to organizations and commitments in on report, in strategy on than and reducing is XXXX Zero areas is mention and by sustainability one Jackson, Homes Scope second of responsibility rooftop September of in to initiative. all we for By XXX,XXX states, completed of comment progress adding emissions the Energy Zero in of and Zero year, governance located released made you've and providing local report they usage Habitat produce the solar you before, Net us Dallas, before, a for our gas Energy wanted high-efficiency insulation over customer Net well during are as Construction on report. XXXX. As during fiscal year Mississippi, facilities, the and Zero towards these the on cost-effective with Energy of course gas use Taylor, the impact scheduled

is in comfortable footprint homes this in natural X that one Dublin, X role additional a year Tennessee Virginia, These groundbreaking manner. demonstrates in their carbon Lubbock, plays helping the customers natural home an scheduled Colombia, Net value Texas. Additionally, and gas in provide one homes, families reduce later gas in calendar vital and with a cost-effective Energy Zero for

and future. communities in Zero call community focus for Atmos Net fuel and projects natural in as we'll employees industries Energy homes, questions. see by such abundant gas your dedication, as role and year needs in safely appreciate reliable, our time now our We the and as our these to reflect participation they delivering performance vital commitment, this Energy and efficient the the fiscal our a open businesses and X,XXX Our effort now X,XXX homes, energy to morning, of

Operator

[Operator Instructions].

of Dumoulin-Smith Julien from is today question Bank America. first of Our

Kody Clark

for on Julien. Clark Kody It's

on well your main drivers the O&M that seems million on walk of first, and of expectations updated I'm I year-to-date understanding the to expectations wondering within and increases if interest. year. a trying you're million get your the the you for So $XXX based just the to $XXX results, like remainder It us of better range. year guess through rate can for remainder ahead

Christopher Forsythe

a But range? might fall year for correctly, you understanding the You to guidance bit. looking to you're we some around muted give little fiscal where within try drivers color of remainder there I'm the for if main the the

Kody Clark

That's right. that. now. hear better you can me about Hopefully, I'm sorry

Christopher Forsythe

This some or collection our on is expense on expense note monitoring we're we the time have quarter quarter big increased may a a again well. And prices our levels. up financing monitoring The in fiscal Yes. driving of component year-over-year. interest the Storm expense Typically, fourth a when reset on and could the O&M on you've here little rates timing fiscal The them. expense now. of down the October, better we fourth -- collection is shift the Winter interest do tick just touched have activities, we're And work. you. where is although that which that then bad the increased the as potentially floating drivers of last fiscal rate year, quarter. higher. have a also the additional some later the bit compliance We're kind based between work is interim debt somewhat kind doing fourth have bad finally, have once we that our as September system over much Yes, our debt performed. front, our Thank in is I season, mean, couple main of work integrity the front,

So I say guidance that the at the ended stand and in where those we things we year-to-date monitoring point, expectations, a line behind the on or put basis, quarter the out today. were our we we're in terms fiscal this guidance of with are that some of would range. we

Kody Clark

Understood.

year? next curious toward and your of through any What look measures cascading we as thinking are inflation see you you expecting can if And into sort about? O&M how FY 'XX, plan. on And you Okay. budget opine capital mitigating you're that trends

John Akers

start there. Kody, jump then and can off, Yes. I'll Chris in

As that the we've projects talked side our have about our contracts in vendors. about on and of APT contractors before, in. refreshed lot med they're We good or bid the we a those have projects have our do, our our how we large A recently feel been of whether side, there. lot with tech been place coming

As ahead all Chris are work. on those stay management standing. to on complete to and to have integrity to hand the sure try think on compliance inventory continue our enough replacement of work we about ahead our we run pipeline we and as before, front, compliance well we and And in we said, talked -- good make procurement projects. We

X-month the Our X-month team out may keep hand inventory about be a even push on tries level. towards that to to looking and

all We our on or ground the complete to pipe the the either XXXX projects. in have ground

out works period. 'XX material the have now the for We for right 'XX and into are pipe in the looking

at and see, can can that to the we've move you we're most manner. forward make pricing to our when materials available, best can as continue and efficient So we best sure are advantage taking got we the

Christopher Forsythe

of rising Yes. will take the we side also I well. exception treasury ahead have that team add to as interim has done spot financing, I'll with rates, which the of job funds annually on securitization with I'll the the trying received once our And with debt. Storm Winter comment the you we keeping an O&M are mean interest excellent I Kevin, rate front. on get out increases to But no the floating just up mean that. on the

over billion $X starting forward beyond planned near-term and interest very year at swaps or rates, future done the debt issuances And nearly executed we've XXXX have attractive here fiscal that last on rate finally, We refinancing in well so. positioned. we for is have When significant don't debt cost we're And overall today, at you any needs. weighted look really at it's X.X%, of our customers. very our average beneficial which

due guess is about that's million Our there in most most now one right $XXX the -- I XXXX. current out

taken the and some last customers, from lower impact we're financing of we're also the the balance so, year advantage have perspective, the also of in or the to So helps bill. for a mitigate benefit sheet customer on lock which trying over the rates

John Akers

that finish entering are you to the same things, for we our were just pandemic still Kody, toolkit, there and And off. had some Yes. the through us. again, tools in we will, as coming if that of

back started teams. haven't of going of things We urgency sense of a We're those still sort the most travel. meetings, to lot taking of advantage

compliance of We that ahead again forward our everything continue in had company. back as I'll we as toolkit that. to and just-in-time well to projects and have pandemic, during not move just our run the So try we because today a we are mention ability

us gives flexibility that well. So as some

Operator

from is of Kim next Goldman The question Sachs. Insoo

Insoo Kim

question, additions this and and the talking industrial you First were for the Kevin, customers the quarter year. about

First, to can and this what in you're color Just most you little guys? just And of opportunities industrial are little the trying of a type a potential bit of perspective from industries seeing -- capital you a baked sense than pace mix the get exist give on for faster you more had what additions? growth may future types Is these in? the customers? bit of the which a of

John Akers

Sure. Yes.

that, extremely Just story before we blessed. again, service into get our is

leadership commerce, development state our the have of exceptional in great chambers at economic states. We each city, level of there, great partners the

well-diversified a there. have out so footprint we industrial And

of We've and asphalt in manufacturing distilling example, and on facilities are industry, distilling gas. of seen battery of addition seen facilities our concrete located there. which greenhouse couple divisions, universities. an seen we've plant facilities, large out We've location facilities. consumers and of the of facilities, expansion colleges a For EV natural hydroponic We've our the expansions both of the seen new

expansions well. as well as some of steel, ones smaller aluminum, existing So metals, some as and plants then

So as thing local the that community, there, jobs the or commercial a board you you new additions, means expansions of along everything a which these load for supports know, of jobs, the well. and can that variety the across is And which the see is amount good rooftops brings as and there, this comes as it's economy. with in

Insoo Kim

Got definitely it. That's good color.

initial the Second Act, electric a one, thoughts lot there. The for industry, Reduction of Inflation obviously,

just on as opportunities to Just for on potential could relates curious exist. thoughts you, or it bill, that your what overall challenges

I'm that side there example, takes all? the messing pipeline a tax at things, curious from RNG thinking obviously, perspective, side, For -- that in from Your just impact changed? you're and that business not of How fit the of upstream but does does your then thinking has how a place?

John Akers

into Okay. question. Yes. There's that a packed lot

long know, it of me out bill. a way to let the first legislative close as we're the laid to we're there. process. us close got So through to going as upside to through And its the stay stay reviewing, what that's very to the with, process way all way detail still go in one potential or for start going the see could out exist you bill And the other still and be makes But the details altered through.

I think, recent saw indicated that last will I arbitrarily Manchin's must I be shut to this say it from in off However, clean year, a some fuels, see program. Then fossil article good energy is Senator quote. abundant in bill his gas included not is is Manchin any time comments Senator natural that

X a there. miles solution, that's viability demand this take which affordability the energy, again, required underground portfolio, our All that the forward. gas, So a at to that's have energy place saying it's it's we've that good million see and that level Atmos going our infrastructure energy pipeline A the taken to right? all XXX growing provides nearly one-sized it's time, think needs Energy. that for country going for conversation because we because realization, security see of in been out be of demand the meet including energy as storage hear forms Bcf natural growing fields, long to meet don't And about being to to going to me, I good and at diversified here

forward see are think a good we look continuing operator, operator. the we to So We a prudent evolves. how bill to

seen our replacement you've we As up tightened system, pipeline projects, environmental through our got a good we've out there. strategy

we thing continue this So details I moves this can monitor we're think show operate the but legislation, in and see forward. to what as going to

Operator

questions closing additional time. this like I'd call for back Meziere no to are Dan There to turn remarks. at the

Daniel Meziere

this replay joining Atmos A XX. day. interest in and September of call website Have for thank us. you for through our Energy, great is We appreciate recording your available a on again

Operator

concludes today's This conference.

You time. you this at may for disconnect your your Thank lines participation.

Atmos Energy (ATO) 4 Aug 222022 Q3 Earnings call transcript