Earnings call transcript Q3 2023

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Operator

Ladies and gentlemen, thank you for standing by. My name is Aaron, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Atmos Energy Corporation Fiscal Third Quarter Earnings Conference Call.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. Instructions]. [Operator you. Thank

like Meziere. now the over call I please to go Dan Dan, ahead. to would turn

Daniel Meziere

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

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

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

statements in factors XX on forward-looking actual Slide projections cause our from are are materially results. that fully more SEC outlined Our and The filings. described could such and differ could material differences

will our Forsythe, I to that, Chris? Senior Vice turn the over and CFO. call Chris With President

Chris Forsythe

everyone. your year-to-date Energy. you and per Thank appreciate joining the We diluted Dan, per share earnings diluted we and us compared Yesterday, period. of in share good to you, year $X.XX $X.XX Atmos in announced morning, prior interest fiscal

be Our Regulatory by customer fiscal third results to financial in three with higher O&M spending, and quarter growth our safety continue and key year-to-date line themes. and increased outcomes expectations strong reflecting were reliability and driven continued spending.

growth operating Fiscal additional increased 'XX customer and industrial our approximately million. $XX rising by income increased million. income of outcomes $XXX higher operating in segments 'XX an distribution residential and regulatory load our by And consumption, both segment in

Year-to-date, distribution or $XX by a $XX These increase XX.X%. increases consolidated million million offset increased were O&M. in O&M partially

levels in approximately spending Texas. rate moderated The the levels in growing X.X% this higher be segment of increasing O&M with However, during somewhat service orders the support third quarter, primarily service to driven to of of territory, higher largely quarter-over-quarter. O&M continues O&M fiscal increase

higher to and in Fiscal number the labor third-party services. of year-to-date, located continue X% an experienced these we [indiscernible] costs see we Texas for increase in

The million primarily in-line increased in Additionally, year-to-date of remaining concentrated in $XX service fourth increase year. driven largely this quarter. growth more work fiscal most orders was the segment, customer driven and fiscal segment. incurred the year, by fiscal work by prior the activities. In fiscal Storage O&M collection regularly was XX%, our Pipeline increased throughout timing and in year, inspection In network this this for incurred the consolidated

enhance increased system. with PC spending for higher reliability system. to the capital safety Consolidated increased to million and supply projects Line distribution designed XX% APT to support diversification safety, due XX% the our spending to billion segment spending and to of of our in Line S-X or reflects has primarily spending reliability increase and improving and our $XXX safety reliability, $X.X growth. dedicated This higher versatility higher customer Spending of

year. During general our we an regulatory including our now We have $XXX completed of of we May have fiscal $XXX in December $XXX annualized currently case currently third outcomes. that in progress, million outcomes annualized this we million to in in and quarter, filed case we to of APT $XXX implemented that expect finalize related outcomes rate XXXX. in Year-to-date, annualized million million additional regulatory

portion quarter of will of that liquidity. This with Our net of anticipated includes third billion foreign financial a XX.X%, agreement We significant sales needs. to fully 'XX our capitalization anticipated satisfy 'XX our million equity existing continues strong. needs under position proceeds finished our fiscal of $X.X available remain fiscal equity in approximately amount fiscal an $XXX

X. customer including effective Additionally, in July bills securitization charge during fiscal completed our process quarter, million third $XX we again securitization on our Kansas,

range of our and mentioned, us reaffirm the fiscal our with in $X.XX. line to which expectations, results fiscal previously year-to-date confidence $X third the I in to As our gives quarter 'XX were guidance

Additionally, we per $X.X capital in expansion distribution spending segment. reflecting spending now approximate billion, largely system expect our higher to

call for turn your I'll for over to and Kevin today, his you closing update time Thank the remarks. and Kevin? some

Kevin Akers

Good us you, joining you today. morning, and for thank Thank Chris. everyone,

year of reliable reliability Energy our Atmos dedication commitment, customers our performance X,XXX we in proven safety across are and X.X Through service executing systems in our strategy. communities reflects gas to the while storage investment fiscal X,XXX our transmission million distribution, Our eight effort, states. focus safely continued and gas natural our their modernizing employees providing and natural

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

For to in nearly continued those here new June the Texas new of its of And just XX Commission, XX,XXX we State XX, added ended Workforce streak record over according the Texas. months located customers XX,XXX customers the with employment.

employed months XX million, reached of nearly added. in new XX, a number XX.X percentage May of the at high ended the jobs number leading and the country record For

here natural Site projected Additionally, is add by X.X people Metroplex according study to Group, also strong. to a in XXXX remained Industrial for Metroplex. by nearly our service gas the million Dallas-Fort territory Worth demand million Selection the reach to one in people

we During once an approximately anticipated quarter, they're load Bcf the third of annual operational. with fully new industrial customers added X XX

Fiscal customers. an is annual basis, nearly year-to-date, they XX anticipated of a XX we've XXX,XXX once to On anticipated are Bcf residential fully added of XX equivalent that approximately Bcf load volumetric new industrial load operational. customers with adding

energy assistance Finally agencies and our outreach to continued we efforts customers.

our year, helped customer first agents fiscal team customers support XX,XXX of $XX the over nine Customer and funding in million months receive assistance. Advocacy During about

the and and industries community, strategy natural to successful combined on proven in and homes, gas investment, financing in we executing service continued the in Our another for vital play energy safe, well needs year fiscal now sustainability, future. fuel our every efficient businesses long-term XXXX, providing and and to reflects us our with reliable positioned has role focus regulatory

We appreciate your and time call this the we'll now open questions. morning, to

Operator

question Our line Sunderland of the go Instructions] please Richard Richard, ahead. [Operator JPMorgan. first from going with come to is

Richard Sunderland

me? Hi, good hear morning. Can you

Kevin Akers

Yes, morning. good

Daniel Meziere

can. we Yes,

Richard Sunderland

in stark XQ referenced 'XX, of know I part the certainly curious you just year here? Great. to there pretty Thank you. can but the year-to-date with if work well. the the you factors outlook embedded timing if There's trends, for at numbers. the implied Starting that's are outlook Also the other a the trends play. of and kind O&M to relative as speak inspection to balance of you've done work, derisk reversal

Chris Forsythe

'XX. the minutes was a half work quarter. work Yes. start Rich. is primarily more the concentrated referenced APT to lot of this section just the the year you, fiscal year. year, related We'll I fourth in Again, compared of with year was of that line more It timing Thank to again, a the in first couple that ago, ratable and and last

we together derisk to plan bit the we're for that 'XX, of, a opportunities that on As distribution five-year are we looking look forward pulling into fiscal that little terms still side. in

well party there, strategy some Looking might approach at are by lock longer how some of and that in as locate to trying line design. contracts just we third our contracts the as service

at are we're that try some looking going some those mitigate so things increases And to forward. to

Richard Sunderland

rate on around on just for Got engagement, helpful early expectations any color to hearing stakeholder what to it. in What thoughts Very locally. is you're there. case, case? And shifting reach discussions your settlement? settlement ability APT that curious timing And procedurally any then the the

Kevin Akers

continuing procedural I'll start out. We're pace to requests. schedule Kevin. to still those. responding is We're there. get the this We're Richard, as with data on it's outlined Yes, right

the this feel time some order we to year of track the like get time we're at an the on So in if point, schedule, end that you toward frame. look calendar procedural at December

Richard Sunderland

be Is And that could thoughts just on then that's here? the say to plan? helpful. ability a you reach would embedded front high-level on settlement that in something Anything

Kevin Akers

few still we're to track with Again, the at next at point. continuing this we No. how We'll But schedule. this answer or the procedural I point, we're again, weeks see so. progress outlined think over questions on

Richard Sunderland

Thank Great. time the today. I'll leave for it there. you

Kevin Akers

you. Thank

Chris Forsythe

you. Thank

Operator

next from Levine with is Our Instructions] please go Ryan question Ryan, ahead. [Operator Citi.

Ryan Levine

Hi, should what's but seasonality I be on everybody. of year kind guess I operating years? made, driving the or costs like we the cadence. to expecting already some go-forward comments of O&M change on of prior the couple be in basis, more this And a a appreciate costs.

Kevin Akers

Ryan. Yes,

to the you 'XX, forward, costs. some you of was as driven going if going We But a O&M think growth. about I Chris into had the think other have knew certainly O&M before. a were on some we outlook But look now a on line type on mentioned that we go anticipate locating, to on I we of got inflationary good where continue. anticipated at we've I locates, think that certainly expenses. would of stand as number on

Chris As 'XX look as finalize plan our forward said, that. we and from move to

Chris Forsythe

Yes.

because working quarter is that last lot contractors the a a The Ryan, timing of are this availability year. on based kind They work of the to a in I'll lot us. APT little had do the other bit upon of about are just of with talked contractors work. the site. add fourth I've thing, work We is with too, the

decided with us and go releasing later. back into engaged the second rather since and months come already ahead have than to six them them We and move first they're quarter

certain around could we what on of have might of work So do just we also on the needs the of system. system, which depends the timing. the the system, segments It to timing construction influence work on the

or full of of the guidance to in related to the year that, earnings to service disconnection the season. targets. first the orders conditions second center prices difficult forecast, referenced predict manage because our customer as are into of calling in share our fiscal given those towards of we're those this generally business an last also per some and predict, eye in with orders. reoccur of lot back service the a operating quarter higher we fiscal That's to activities. I've the more will high we as some of but to year, heating Difficult well accomplishing bills, difficult needs just A terms contact to why that particularly experienced responding because winter are

Kevin Akers

you've Yes. they on here, as we're point, us communities, where the And working [indiscernible]. them say, with I of growing, their that's are whether current out infrastructure projects, as heard expanding think timing other our or Ryan, projects are

road there, You've got sort relocations, projects thing got road that going out of new on. construction, optic fiber you've

Some of fiscal this year just full cycle throughout period. the

Ryan Levine

seasonality this drivers was really is that costs response to this you prices related of that much recent how most opposed during highlighted? spike some the embedded that the And is of gas in other to change in winter in

Kevin Akers

I know direct don't that kind correlation. that I make Yes. of would

based thing bills, that of are think of O&M think some se. I it's meaningful don't Chris to what reread, per the I alluding a overall but of the on rest for orders operational sort percentage was

Ryan Levine

the tax then in your be at tax is you planning this share year. the least for year-end, year your anticipating and year-end higher periods? one, for supposed thinking to future -- you're appropriate is approaching with a than fiscal position? rate Or effective around noticed that your that the last rate tax And Okay. you longer-term guidance I year, Is how perspective, you're effective from about could time color are current any your

Chris Forsythe

The Yes, roughly Ryan. period. by see the effective heavily deferred three of from refunds tax excess liabilities five a to XX%. you That's We're that those excess the amortizing TCJA. tax of is over rate -- year the influenced

included that's tax effective our marginal the to in roughly of So per deck, why kind se. of we've XX.X% XX.X% rate

have the or anticipate revenues. But really O&M XX% next you're true that more down excess of tax of wind increase as your So are effective types taxes and an years XX.X%. here what or we to deferred back impacts that do over if GAAP modeling expenses traditional you other the to rate idea couple to the tax revert of

Ryan Levine

Okay, Thank great. you.

Operator

questions. like does the we Instructions] back to would [Operator over closing are you Dan, you good remarks? like for this at look to on And it me it turn point,

Daniel Meziere

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

Operator

conclude for you, Thank gentlemen, that Thank all joining. And ladies Dan. and you does today's call.

now You may disconnect.

Atmos Energy (ATO) 3 Aug 232023 Q3 Earnings call transcript