Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Atmos Energy Corporation Fiscal 2023 Second Quarter Earnings Conference Call.

I would now like to turn the call over to Dan Meziere Vice President of Investor Relations and Treasurer. Please go ahead.

Daniel Meziere

Thank you, Mandy. Good morning, everyone, and thank you for joining our fiscal 2023 second quarter earnings call. Kevin Senior and Financial Vice are and Executive Officer. today Forsythe, Chris President me Akers, Chief President Officer; With and Chief

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

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

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

John Akers

and million appreciate fiscal Thank diluted $X.XX and Yesterday, good us today Atmos We $XXX interest year-to-date share. we reported morning, of joining or everyone. your income you in Energy. per net you, XXXX Dan,

Chris, were line year. As you another us results fiscal in expectations will with and successful for positions from hear our

This dedication, effort Atmos states. while commitment, across X,XXX providing systems all successfully and gas focus employees natural X to our transmission customers to service million and performance reliable X,XXX to distribution, of our Energy reflect modernize safely and storage X.X our natural continues gas the communities

to narrowed our $X.XX. $X to guidance of also We range fiscal XXXX share earnings a per

experience growth, employment customer driven in to strong Texas. continue robust We by trends

new of we XX, Texas. XX,XXX those in March customers located nearly the customers ended months added XX the new company across For with XX,XXX

reach in March, people. January jobs to of civilian streak continued Workforce record And of a employment its labor high since the million force the state XXX,XXX series XX.X Texas according XXXX to Commission, adding of

gas territory in demand our strong. service Industrial for remained also natural

XX added they Bcf approximately Bcf added operational. we quarter, are anticipated Fiscal industrial load anticipated annual approximately customers they annual new XX customers once of of an load year-to-date an once are X we've operational. new with XX second industrial fully with the During fully

volumetric residential a enhance basis, reliability, supply of diversification that and we that anticipated approximately is the Bcf To XXX,XXX industrial that customers. summarized, XX growth our load adding system. to versatility just On support continue safety, equal to of I

our working completed capacity. into Bcf Texas our Bethel APT team For distribution cavern gas behind APT's division, example, the new provides third well to over of local This salt-dome X companies third injection XB, the Pipeline as adds Atmos working our operations in additional support gas system as and cavern of cavern.

in replace be pipeline on to Metroplex. to of plays continues The project late brings side will with Work of miles Cotton and S-X as final of anticipated the this reminder, east a the which X the XX-inch XX-inch Phase pipeline. is supply shale project, XX And of Valley XXXX. project our Line Haynesville phase from growing this service

of we calendar complete a Katy. this install end remaining highway with to support growth Austin XX-inch a of increased of pipeline APT in year, southern project to Texas. in Later X new and Permian to diversity will that XX-inch system Waha will north forecasted Williamson the the from miles Counties supply to that expect the the the runs line Travis both and This connecting line XX-mile

fleet, emissions facilities, X key strategy customers. our X, following areas: the on supply is our gas environmental Scope X impact and X comprehensive Energy's focused from Atmos in reducing and environmental operations focus and operations,

facility system. that our connected natural facilities will have area added steel system. directly XX,XXX gas fiscal and are supply our X,XXX efforts, in XX,XXX system through track operations to we this And fiscal place to year the we lines. on and of our renewable across modernization RNG X during first XXXX, X now RNG of the area XXX between of the service gas We pipe In months flowing miles transport another to

have executed interconnect Once operational, RNG X these our system with anticipate additional agreements are flowing projects year annually. to across of calendar flowing to fully we've we XXXX. expected to begin Additionally, X projects in Bcf X RNG

XX our opportunities evaluating system. to RNG additional are facilities to connect we nearly Finally,

As previous solar Habitat X of high-efficiency build than gas for with calls, they for homes an partnering Homes more cost. Net installation Energy families need. our at on an to appliances, are Humanity I mentioned consume affordable energy each in Net we Zero Energy Zero to in produce natural states rooftop use panels

X Energy of of All scores X Jackson, months in Owensboro, completed system, Mississippi. X, in or homes energy helping the natural in During and customers affordable consume. energy XXXX, rating fiscal they and reduce the an value X the than in means Homes homes achieved produce vital less which footprint Kentucky home homes: carbon gas their plays than Net first X more demonstrate that HERS, These Zero X manner. we have role

Energy, natural home with efficient the Providing Atmos a and that is is fuel gas communities. and safe these of of families thriving ways environmentally just one friendly cost

organization and support service continue to look technology Our and customers communicate convenient and for customer to us customer with make channels to innovate our improve to for and ways offer team service payments.

over see For in draft, nearly auto which than higher in channels of our growth bill electronic XX% delivery of is approximately them eBill, of customers enrolled pay average. electronically in with customers XX% continuous example, XX% XX% and recurring industry with enrolled we

to safe and outreach continued assistance fueling energy thriving customers. communities We efforts through and our agencies also are

million the customer who months helped customers During the and first fiscal system. support X our over $XX team over advocacy XX,XXX funding year, a agents received customer in of

The energy According Energy with the Atmos year. conducted and in and last recently our energy all January Customer providers of satisfaction utility dedication customer of December the place, released leading employees score. Index first in study, study to was recognized finished recently between highest focus an American utility Satisfaction

our believe fuel energy to effort, to regulatory with and efficient and needs abundant us We and safely proven to now our the well deliver homes, and investment, the strategy natural focus, combined executing financing dedication in and positions our reliable businesses gas industry future.

Chris to update. the I call now will turn for his over

Chris Forsythe

to thank and us joined you morning. Kevin, everyone who this you, Thank

As Year-to-date XX%. increased share. consolidated $X.XX previously months $XXX of net million income the or year first income million was per the operating mentioned, diluted for X fiscal or $XXX

touch on the outcomes performance. a our operating by regulatory increased million. 'XX year-to-date I'll income of of highlights 'XX and $XXX few Fiscal

Additionally, of some quarter residential the income fiscal distribution segment an increased the additional in industrial undergoing our we spreads in APT's rising takeaway in pipelines key load $XX operating and growth Permian our $X widened Most And during by increase million a occurred through-system while saw of business. first this when increase million. maintenance.

experienced in line the Texas, driven increased costs O&M these for also locates. Consolidated seeing million. number XX% million, $XX largely higher service third-party where our supporting a They're increased increase of we expense O&M growing Distribution by territory $XX labor services. in

increased customer by gas Additionally, have increased service higher prices orders collection activities. increased natural service largely by driven XX%, requests system-wide and driven growth,

these As to a result, have costs our fulfill orders. risen internal labor

higher of the in experienced work increase of bad $XX costs. Storage was due to customer our Pipeline our segment, quarter. expense employee during The recognized debt bills. year and we prior driven this is remaining higher of Finally, inspection compared to in-line levels by increase timing recognized and increased million period Most second fiscal the

This increased the performance our Slides higher segments safety of million minutes X quarter the ago. improving the spending to XX% just for operating discussed billion primarily drivers APT, Consolidated or spending key X increase capital XX% and that summarize projects each reliability and system. $XXX dedicated at $X.X for of with reflects and year-to-date a few periods. the Kevin to our

this $XXX execute about regulatory our we annualized fiscal million continue outcomes have progress. anticipate during To amount have half to in year. strategy. million in We second filing and annual implementing We of we half annualized the regulatory of date, implemented about $XXX our outcomes

through XX the remainder our outlines XX year. XX filings summarize Slide for and Slides the fiscal these outcomes of planned

strong. senior $X continues billion remain to we loan In financial billion term March, help a $X.X repay position notes. in our early Our to maturing executed

and Financing Authority proceeds month, used floating debt. exposure interest the its the Later to completed longer program we no program, that to We Public rate meaningful the term off state-wide that pay loan. from have securitization Texas

in approximately equity and needs. million fully amount finished available net of a quarter foreign of anticipated our equity this We portion second fiscal fiscal significant 'XX $XXX and is our an fiscal under XX.X% of billion will in that agreements our liquidity. anticipated 'XX with $X.X sale needs Included satisfy capitalization existing proceeds

in our The recognized they profile of financial and was Moody's when reaffirm March the by strength credit outlook. ratings

to executed swaps. rate associated interest We anticipated mitigate financing with needs risk in look interest this march opportunities debt for year, starting 'XX. fiscal and April continue In rate $XXX million long-term our to beyond of we

hedged. to have fiscal now debt now of this cost of component X.XX%. portion With $X.X of long-term have been needs to treasury X.XX% ranging financing the have at swaps activity, of effectively hedge rates substantial 'XX from anticipated of billion a total our We our portions

on year. we Kansas, to this cost securitization in Finally, are our still complete track fiscal gas

our X and on Additional profile details through activities for financial be our found XX. financing Slides

us earnings $X $X.XX. our guidance from new range confidence narrow guidance $X.XX to of Our the $X.XX fiscal fiscal to year-to-date performance to 'XX per gives to share

of the expect guidance. contribution the ratable segment distribution fiscal over winter XX% our earnings half has recognized. about our We The in thoughts revenue to to back additional the is quarter A be heating fiscal by of approximately somewhat year. 'XX and few been season updated

commodity Going lower due we primarily into anticipate costs, year the consumption with conservation. to elevated fiscal customer

we consumption our expectations. heating season the exceeded the winter saw However, during

the has us be been a line most significant soon fiscal sight the into the Additionally, better giving regulatory outcomes for impacting 'XX of regulatory year. fiscal filings or completed will

much increase of 'XX an O&M, we X.X% was originally levels. as guided this over Regarding to fiscal approximate increase anticipated

growing a However, experiencing months to are our particularly support territories, as I mentioned Texas. higher-than-planned in ago, we few spending serous

what offset we was increases. panic, This we the of during to are these is did working some

with the be the anticipate the year Assuming updated back level X of fiscal we 'XX. in for fiscal the guidance, of months of half our midpoint remaining we of achieve in line to O&M spending our

been and is to due timing Further, Securitization resolved can product expected Details year needs expected been XX year fiscal fiscal XX. our remaining pretty cost on the priced. is guidance complete. and closings financing long-term equity 'XX now our 'XX anticipating higher-than-planned financing Texas the have partly fully found the AEDC and Finally, Slides our for surrounding of fiscal of FY be we're now has clear. within debt

your now you the for this time we'll for Thank morning, questions. open call and up

Operator

comes of Bank question Julian of the Dumoulin-Smith line from from first America. Our

Julien Dumoulin-Smith

And would how guys hit it specifically? just some at of a wanted done, potentially you bit nicely surplus your Texas Look, off guys. comment been down What to sort looks to as their Can nuances I understand here this then potentially it's quickly. I collected, of how securitization little mechanics the look are Any here. at that but using there? maybe some would and on you customer expectations? for the timing paying legislature to here? bills, want presume of kick ultimately, looking like effectively I that things never

John Akers

Yes. basis, technical From is correct. Julien, a that

continue We as to that system. follow our legislation other entire across well as

So it prepared try not things them. as or of our that enhanced jurisdictions a by a anything on well. a been that questions or or If the going that energy predict system-wide this at there to jurisdictions from looking some on theme, to will, you those as prevention we're committees programs on and for basis, state year, obviously, perspective, has point. have efficiency been up level consistent that, on than that well kind all being and any damage as are that comes if the this further of of too much answer But our sponsoring at legislative across comment standing are at

done know approved with pleased there, choice to very states, states have don't has states that fuels seen now about come the customer as to on provides jurisdiction. if I have So that. across X their right legislation, approve legislation a that as, And more but country cook or you've XX think, in additionally, I couple particular now I for all well we're out which freedom think,

territory So on legislative our that's a quick action. recap across

Julien Dumoulin-Smith

this on in bring -- since bit perspective maybe the discussions little and broadly. late Actually it side I'd mean, gas go? across get it could shall then some love has your on Any suppose, I perspectives seems specificity, a legislative where up, particular, both we on it say. I to also, of Colorado therein bills had PC this. lacks you the

John Akers

in does it, and the testimony, that crystal provide legislature with stay PUC. access opinion. for a they to committee, job no certainly year tremendous with here, We're questions, participate. We'll with any committees we reliable But our that If provide provide feedback get I ongoing as to can going our gas out each customers. for any ball Julien. tell open comments to as we'll expert or there work continue in certainly dockets, to come that our also Well, available team our you sure any we're well watch up to with supply we're asked, when we'll feedback close that make supply for sure. but to

Julien Dumoulin-Smith

quickly, Right. just back going And a little nuance.

in peers here. bit the it Can that here their that your you're of seemingly little you line clarity sight a forward about comment costs your O&M, less despite had seeing I to inflationary implies bit the in consistently a comment alluded holding and a there? On mean, little the going you obviously, managing perhaps success out fairly here and You just what have line I as well? Can mean, of what you about remarks. environment. some well

Chris Forsythe

defer related kind not of in the items few safety we line risk. what there closely Chris. levers looking is line really or at system pull. or where potentially This are with Similar pandemic. that to we opportunities that there A Julien. Sure, Working back we be could our by team, might able the compliance-related operations with to did just

Additionally, of when of a of on depends locking of contracts lot at XX- for terms a part contracts in kind year. to early we just XX-month executed fiscal what got costs the period, timing our are in in

point, that locked had we in contracts. some at So

at We we the example, that. we which the of a of work least of some to manage. terms have leads some have variable for that number just respect sight, locates, around And better to did -- labor third-party these of costs services sensitivity might with line in

look manage your within to O&M examples doing, So on we're service capable a of while providing the of certainly trying just how a can it what we're safe couple forward, able system. those of are

John Akers

Yes. just close And I'll that, Julien.

from when said we're We and comes company when of need has period just-in-time advance provide certainly these integrity in Chris that O&M work, it, before additional safety-related system. we speed a our or things like flexibility one not those it calls, on well before items As some I've us said work, things to on stay up another. and can to does that, for move to

an additional that's So lever have. we

Operator

to call now I for like remarks. over closing Instructions] turn would Dan [Operator the Meziere to

Daniel Meziere

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

Operator

you, Thank gentlemen. you This call. for ladies conclude your does Thank today's and participation.

You may now disconnect.

Daniel Meziere	VP of IR & Treasurer
John Akers	CEO, President & Director
Chris Forsythe	Senior VP & CFO
Julian Dumoulin-Smith	Bank of America

Atmos Energy (ATO) 4 May 232023 Q2 Earnings call transcript