ATO - Earnings call 1 2024 | Atmos Energy Corporation

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Operator

Thank you for standing by. At this time, I'd like to welcome everyone to the Atmos Energy Corporation Fiscal 2024 First Quarter Earnings Conference Call. [Operator Instructions]. And now I'd like to turn the call over to Dan Meziere, Vice President of Investor Relations and Treasurer. Please go ahead.

Daniel Meziere

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

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

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

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

John Akers

for We you Thank your Atmos begin call you, that conditions by appreciate thanking day. want thank very and recently. dedication challenging customers every interest you weather under all in employees exceptional morning, and our X,XXX to good our Energy. I to customers serving for today's their communities And Dan, all do our for effort and everyone. Atmos Energy

Atmos truly Energy. You soul and the are heart of

provider Our natural service we million million support territories. and natural of our $X.XX quarter and income 'XX safest diluted and gas and to gas results $XXX storage journey that spending distribution, first or capital modernization growth continued services. Yesterday, reported first systems focus to first of quarter net quarter $XXX fiscal fiscal our continue effort, per the system across was share dedication be transmission reflect we as modernizing our on our

Commission last over located rate. XX record calendar XXXX, months a customers reported jobs rate ended of jobs in XXX,XXX over the the months, added the of adjusted that Workforce And number in high annual December at $XX.X employees adding million. Texas XXXX, here those For XX,XXX at added seasonally the than new we Texas reached growth nation Texas. the a January XX faster a XX, XX,XXX in over nearly new over representing once again X.X% with

customer new safety, that role of volumetrically companies annually, APT, industrial XX,XXX our we X.X first to our growing well operational, development demonstrates fully seeing customer residential approximately local is continued reliability, as plays system gas we that commercial the across are Bcf the and all natural APT behind territories. In remained of classes in support in and customers. Commercial the will vital service enhance supply XX customers, the over which, versatility projects added This growth equivalent during of distribution anticipate the and several completed with connecting the economic system diversification solid customers value we Additionally, gas when system. X,XXX demand we our from quarter. to consuming growth

During that the of quarter, a to the Waha service with Katy. we from line which Highway runs in XX-inch end southern APT Morgan placed Permian Line Kinder connected PC, system

Travis Counties supports of forecasted service and in as supply diversity in in current located to growth PC and Line the XX-inch both increases north XX-mile Our Texas Austin as the well Williamson area. demand this

Additionally, S-X Line XXX-mile of Phase we service our placed in project. III X-phase

Dallas-Fort XX our transmission that first installing be serves project Loop phase XX the pipeline. we XX-inch Metroplex of to miles will XX-inch S-X the shale pipeline pipeline. third and supply phase Valley the XX-inch reminder, phase year. And final miles XX-inch Worth the Cotton Line of completed by XX-inch system fortify by the end Worth calendar of brings This is The to project growing Line from approximately replaced with of multiphase Metroplex. completed pipeline. and of the As this WA a side project, Haynesville place Dallas-Fort this east This of miles scheduled APT of XX

and Our rating satisfaction first exceptional from technicians customer during customers their support service the service once quarter. received and associates XX% a customer continued again

support outreach XX,XXX million Through receive team energy team their advocacy efforts, and in customer helped customer Our efforts those agents $X and customers customers continued the funding over the during nearly to assistance assistance. first quarter. agencies

reminder, a over during financial $XX 'XX, over As their to million customers XX,XXX our receive teams fiscal of assistance energy with bill. assistance help helped monthly

Energy to Transportation on Board and The thank Chris, for turn and possible over and and We in fatality. Atmos I to determine incident to incident with resulted is Jackson, investigating. Safety regulators occurred call responders that assistance. residents the other the help an want Before at first the Board and January want is responders support X Safety National I causes. XX to emergency comment Transportation working National federal a the on state Mississippi their

thoughts have to our our to continue update. with family. I be call will prayers the turn hearts, been Our now Chris his and and over for the

Christopher Forsythe

Kevin, to and joining you Thank thank this you, everyone morning. for us

customers. stable $X.XX benefit now Effective a was will was the through Service uncollectible operating As April expense over share million; XX-month debt the in $X.XX, a additional Mississippi which XXXX, increased have December, for several decreased customer over driven which lower represents by cost prior $XX X.X% Kevin we of growth, by commercial residential filing how costs accounts. modified expense. In increases income totaled purchased customer bad This in $XXX mentioned, O&M increase factors: XX-month with combined segments rate we driven share $X increased our million, operating rate we over these an the year or industrial per both Previously, period. costs gas $XX performance in million. mechanism recur million quarter. quarter. Consolidated an quarter first XX% Commission operating Public higher first the Consolidated will primarily these 'XX recover our by recovered period, loads of our reported per fiscal income earnings to

As this our $XX first expense a result reduced during we the of quarter. debt by million bad change,

$X gas to the cost through recovery Additionally, we that million, fiscal year. purchase APT collect additional bad mechanisms the in-line our our with base. O&M customer this due of change, our we of work uncollectible XX% at primarily portion of last timing now decreased an inspection highlighted debt accounts

property legislative of voted property assessed This a XXXX, surplus state's fiscal will allocate was on fiscal residential quarter million. first million in the tax budget taxes Finally, for commercial reduction November. to issued legislation calendar tax after favorably effective to $XX legislation to legislature of reduce voters We we summer of to change Texas our became by 'XX, property XXXX was during our fiscal offset XXXX. guidance $XX Texas this the during owners million $XX first the property earnings This per share the operating impacted and reflected not recognized by expenses. In we years in approximately this approved the million impact the in November. In quarter. legislation expect expense reduce 'XX $X in income

We regulatory currently additional was strategy. includes associated December. the date, rate $XX fiscal general continue in filings about approved case to APT's amount $XXX filing million million implemented annual annualized our to have in seeking this in million million $XXX operating $XX plan To year This We million to income $XXX outcomes. we with have make in that progress and regulatory execute annualized increases.

we billion by the completed we of quarter, highlighted long-term million financing equity financing the debt $XXX in long-term $X.X completed October XXXX. debt During a

balance financing the of forward agreements. million sheet funding overall equity operations This maintaining the our profile. for we necessary and while Additionally, settled provides our of financial $XXX strength

XX short-term have December outstanding. capitalization XX%, as do debt was equity of and any Our we

needs 'XX. had equity includes available anticipated million under our $X.X foreign proceeds We is to of and $XXX anticipated of sales equity approximately liquidity. of for remainder also in available fiscal 'XX fiscal which portion our billion This the expected existing needs net agreements, amount satisfy a

average continue is have is XXXX. in floating to refinancing Our expect to next cost approximately limited 'XX. years, interest X.X% and weighted we rates of set our weighted with average debt XX fiscal And our June of for maturity

issuances portions Finally, we in long-term million $XXX and in place anticipated 'XX. hedge fiscal to rate interest fiscal in 'XX swaps or have debt forward-starting

reminder, weighted of well the and closing, treasury year. execution operational, average for rate the effective of is we a by fiscal sustain to to good The X.XX%. In plans our our success. these off us employees regulatory positions swaps start our a are financial As

We tax in of favorable earnings I morning. expect in share open $X.XX to per call changes and range your now $X.XX per Texas. Thank to property this you for continue impact will be share, up for of the the of time fiscal the legislation 'XX the inclusive questions.

Operator

[Operator Instructions].

with first Arcaro comes the David Morgan Your line Stanley. of question from

David Arcaro

year Let's might tax just EPS property the Could I currently you impact and And here. it's full EPS not embedded you year? impact see. missed the did what this on have bit have details in the guidance? elaborate for that change, does that say the a

Christopher Forsythe

And put we taking there, shares in share profit, to into of Yes. is we're for in that be full to the the The the between tax property in pretax anticipating in that $XX and between our It year million out the average fiscal the consideration impact range guidance. after previously. $X.XX. is tax expected our effective our be currently, reflected investor was current deck not weighted $XX guidance reflected rates million and have impact we $X.XX

David Arcaro

Okay. Understood. Got it.

are get your quarter. I and given guess, growth on you're in economic in see your and see, activities like additions. the continuing sounds service It the color in additions what you've just backdrop for what to Let's wanted to territories? I your seeing customer strong customer expectations that building continued

John Akers

in the obviously, winter with our conversations In period. we're our Yes. developers, builders still and

this have in and period. an as anticipate by you million So picking there's quite to I up. But come on one up housing that been back if other anticipated additional head studies particular, again, connections at referenced out Metroplex while, the through a that back to for would spring you projected on people XXXX. the calls, there will continue picking into some and of construction existing we've X activity look

that low current existing we on will on an is which sale So think impact already home market the housing, basis. definitely

inventory. of X X We're the so. think around months' X of that months somewhere is they currently right or inventory keep north I to about to worth like now told

of particularly those states. up spring So we see the that concrete, back territory, builders added diversified we on we construction across as with see the previous vegetable to a in X oils, side, again, into picking that can all asphalt season. And lot meet in quarter a demand that this fertilizer head across things good XX growth to we from industry, the mixture things again good the coming continue of plants, industrial trying

David Arcaro

That's a I was rate just helpful general maybe Texas have couple And expectations Mid-Tex. are I for later ahead it. of color. of wondering West what appreciate one your more cases that. you year, then Got me. this the and just

need Just ordinary usual. than contentious there be in curious address, out those to that a it you cases or cause maybe that rate are more major if to would things of ask any the big

Christopher Forsythe

under are our as is cases mechanism Texas. rate there unusual. a are nothing here general contentious in being grid recent jurisdictions No, these because filed And reminder, those

We before have into we we're X going reset refresh make to filings equity back basically and capitalization, that ROEs have consecutive or alike.

type expect filings fairly the we and to of down was So make be this later to calendar out middle of nothing that we year. filings the those plan ordinary, these unusual sometime

Operator

question comes the Bank line of from Dumoulin-Smith with Julien of Your next America.

Julien Dumoulin-Smith

here. done about accelerate the opportunity kind work this respect will? Well to some the of being here? if as drop contemplating it. there line, first just With periods have really mean, to to change that been of do Or you I kind are question. you the this for a Appreciate bottom might tax follow-up think an Look, other to expected is offsets here, just on you future

Christopher Forsythe

under here at mean now, May. work, which in into Yes. you and other look terms of heating That's compliance I to better a what a in Julien. months this the activities. update think we sitting about middle valuation beginning winter That's point, season, the of going like good summer we're we're in right all the have we'll still question, for

Julien Dumoulin-Smith

Right.

Okay. get Fair enough. I it.

inflation see quite talking are got talked terms the what that line seeing mean, today customer times other backdrop season, that here. just one able thinking front, costs especially conversations about within to inflationary this your of just [ To we if about to in ] impacting new mean on since are that range? different ahead you can the know latitude I and on not here. hold -- late. bucket in the of just plan driven I end, up a variety prime I the we're I here, O&M this of being of peers. you that You're happens. Curious as we've the you've you know that different what few have How factors

John Akers

past there. Yes, stand what there about Obviously, Julien. this X.X% our an we to reliability in the out serve have of customers storm and what have think in we system, on I job there our winter out out folks that's did storm. our out I by in mean, winter we with ensuring that again, range we've deck X% historic Heather, we continuing to before which talked exceptional

opportunities, those compliance evaluate to continue hydrostatic are we'll whether the across So APT test system. on work

comfortable this into quarter have the at we're out with the where year. and point, there So first the still we set we range fiscal

Julien Dumoulin-Smith

experience And in season. your your saw is and Well, mentioned, the if your lot prior but winter themselves performed the about contrast in that Yes. guys. that can flow-throughs some and/or recent considerations All across get how your numbers system weeks your obviously, set riders how sharp here as commentary about here, just recent numerous across of any just follow-up a play one we this -- numerous right. positions in you about in -- in commentary see Obviously, I out here we any customers winter still here? of some I weeks, years dynamics you? Again, sort across jurisdictions, quick service territory, ultimately of servicing of

John Akers

Yes.

As I I did storm, that think in. said the came very we this at Energy of proud exceptional with our severity all job winter an employees, X,XXX opening, it Atmos

where heating for to some on than day last data, degree at you colder look XXX% depending XX% it than was think year. I locations, want normal colder some in

us years, That's be sustained over investment they from improvement historic in come infrastructure. we've again, it able at a in. allows to of year. when what serve our we system. lot for to takes did of across during now period But a your So been these Obviously, last projects XX periods this improving infrastructure

You do just overnight. can't that

projects. XXX gas of done country natural our very XX of the our week, peak Bcf identifying think team for commercial. those with of opportunities I and Also of set the years product. Look, across at we has I a record job good a executing throughout that proud residential think Bcf and a on

again, consumed you XX% does. I the energy And according it proud coal period. output So natural and demand if petroleum very what week that of for gas, for the natural at think EIA, gas to and of that look energy

continue very do we So what the proud industry. in to of

Operator

the of Your with Richard question next from comes Sunderland JPMorgan. line

Richard Sunderland

I property on could. circle to like more tax the I'd one back item if time,

Just reserves to latter portion? How benefit? clear that of about the for return the what on to customers? is be is full you you net amount are quantified any Or thinking that benefit, of that

Christopher Forsythe

to fiscal next -- in we here I Yes. our That our number have benefit 'XX. this fiscal will happen to in our what X.X We that for is is, the the over various don't benefits accounting through that's mean guidance years, we'll relative for customers. purposes, return couple, impact recognize Texas. mechanisms year back the

in guess have that -- I our full difference, on our impact So we'll later a the really for 'XX. next will, it we year timing this mentioned earlier, financial primarily you temporary for fiscal impact results fiscal does us if it's And as that I an year, fiscal think update where will call.

Richard Sunderland

there. was then color could seen if the a I Also little the curious just turning color who around headlines status helpful site removal. Very media bit Any you Fort just would currently Worth helpful. Understood. to incident. some about is investigating? there Okay. talk be debris current And

John Akers

And site, I been over the was owners involved. The it, they're seen tested And our us been our that's to point. the of system out the I our been back believe. this has release you've charge we're press to seeing that of believe, the not at and that has articles statements related removal to there, information according obviously, turned in

Operator

Campanella next the comes Nick from question Your Barclays. of with line

Nicholas Campanella

just to property taxes, $X.XX the 'XX? negative in offset for triple ask to wanted what's but guide $X.XX to check to tax property that the Sorry I about

Christopher Forsythe

we now, for couple our the year. up in middle ago, still Nick, March. how right January, We we're heating minutes into Well, a winter fiscal need season. the about as still O&M needs of talked margins our see we We're move as the of February, evaluating hold to

So get heating maintain thorough in update winter we point at this provide and through we range prudent a the felt to was guidance the season. more this once it

Nicholas Campanella

said Chris, do I much of that XXXX care remarks, before remaining appreciate needs. you I And taken for know you've kind of equity your then in for is -- How fully you to prepared priced fully? really 'XX priced you're that. left

Christopher Forsythe

just go ahead ways FY precisely still say but reasons, can't to of 'XX. equity preparation year We of needs I in on Yes. the for we how that. have it's this our in a continue stay fiscal legal to agreements been we But priced, the the that terms It's ATM throughout will much place. have to under

Nicholas Campanella

the me. states philosophy just around potentially adjacent kind LDC is processes for there? continues remind M&A -- just Got And I what your in going active. -- that M&A to your one either even there's you it. that And can in I'm know then your last just current one your around or everyone market territories? and be are of message

John Akers

Sure. glad every Again, I'd our for on now. call several to. talked growth here about we've years be

grow our to or We at in close there. X% X%, to division particularly continue above Mid-Tex

have we organic mechanism that growth. with So good

us that and with compete that X You earn the with have sort It's we of that in could to that the XX% couple deal for months, in we regulatory our construct months. growth hard of where construct start investment see XX rate XX% any on have. we to

our of we systems, our relationships, our proud execution very we're So that. what do, on

on point, this are to system and continuing dedicated remain modernization. we focus to at So

Nicholas Campanella

a different answer. All I right. I can't say expected

much Have that's a so great line. in much. day. So you very Thank

Operator

with our of next Levine question line [Operator Instructions]. Citi. And the Ryan comes from

Ryan Levine

watching are that share outlook? color business what seeing sessions Is have your any across you're legislative the there there and on that could your could an territories? being you or impact proposed you're bills in closely Is around that any service

John Akers

Right.

in jurisdictions. duties monitor really our to session. this of the go early I continue required we'll we'll continue their think point, off it's very We'll at kicked monitor. them still and some about those. But just Those in and activity to let

Ryan Levine

Okay. transmission are in to distribution of looking that And you that terms to as are or then classified may or types those some re-rate network itself, the LDC anything any seeing pipelines jurisdictions along lines? be

John Akers

the is the those the answer based level decisions I level. business No, we're the believe to question. at all upon federal and Again, state the are not short regulations

Operator

Securities. comes question the with of next Gabriel Moreen Mizuho Your from line

Christopher Jeffrey

This is Chris Jeffrey on Gabe. for

O&M one quick Just on side. the one

in all the was flow Or quarter. that original is Just continue was future change now? in of realized kind it contemplated guide? seemed that will treatment expense that the like there bad in debt came Wondering the And a periods? through through to that

Christopher Forsythe

Yes.

the -- tax sorry, I'm point. [indiscernible] on profit So I'll the probably question product

so that, the or debt come this that guidance. expense, our so hope we year basically On through, reflecting was bad the in referenced, million we basically $XX that that had impact was for that that fiscal would

Operator

I back will closing over now turn the for Dan to remarks. Meziere call

Daniel Meziere

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

Operator

and concludes all call. you joining. today's Thank that for gentlemen, Ladies

You disconnect. may now

Atmos Energy (ATO) 7 Feb 242024 Q1 Earnings call transcript