ATO - Earnings call transcript Q1 2025 | Atmos Energy Corporation

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Operator

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Atmos Energy Corporation Fiscal 2025 First Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Dan Meziere, Vice President, Investor Relations and Treasurer. Please go ahead.

Daniel Meziere

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

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

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

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

John Akers

and in morning, your good appreciate We Atmos Dan, interest everyone. Thank Energy. you,

today's do day call our safely to employees And thank all all and community. X,XXX you challenging conditions. thanking customers serving focus their by weather every Atmos for for for you Let's our Energy and dedication our customers very during begin that

heart truly Energy. are of Atmos and You soul the

located or reported million income support territory. those XX here spending $XXX growth as over in system XX,XXX to over service XX, be first net growth diluted first XXXX, and per quarter, across added of of modernization quarter was million In $XXX for capital continued to Texas. we months fiscal solid our Customer continues share. Yesterday, the our we December with ended new XX,XXX $X.XX customers,

the growth a again in to a customer at at jobs faster XXXX, system representing rate. remains XX.X employees connecting during as customers first a nearly high reached Texas X,XXX jobs nearly in January last over nation than the the of solid the XX number X% adding with once XXX,XXX Texas well Commercial new the Workforce quarter. that months, over commercial growth calendar annual rate The Commission seasonally reported adjusted million. record added

We vital value operational. development the all territories. Bcf gas went plays new the customers economic gas of energy demand XX natural And we anticipate industrial annually. across and utilizing This role which fueling fully demand demonstrates our service added from classes and in continued X.X customer

reliability, side In to that flowing diversification Groesbeck east Worth gas APT and and XXXX, of of the transport APT, XX XX has S-X Cotton local see growing the the APT's system our the Bethel miles from supply additional the the phase This our of we continued facility placed compressor will storage to safety, we the Interstate to in several distribution support supply for additional and growing December companies which DFW and Line XX-inch station, to growth Haynesville pipeline will will our final Metroplex. Bethel capacity versatility play service into are enhance provide system. from projects Bethel we our storage completed approximately started. Valley Dallas-Fort pipe the shale XX-inch project facility now project of from our was the The Groesbeck install project and from Metroplex behind corridor.

projects interconnect X outside the Austin. Carthage our the of S-X [ a completed APT Line during near near versatility, territory system and service X and reliability second supply growing quarter, enhance To on ]

the energy XX%. assistance continue their associates during remained for agents over efforts support satisfaction and helping service team agencies and high the customer $X receive in first funding customers at support customer assistance. technicians advocacy XX,XXX Our customer customers quarter, ratings quarter our and outreach million And to

Energy turn now and the safely homes, call and our midsized December, was the I'll now businesses improvements #X customer Atmos to recognized the gas and customer industry Our consecutive Chris in J.D. update. is employees' process energy gas service the in well focus that Midwest. delivering fuel in and to year, third Energy reliable for among Power positioned over ranked natural when on for needs Atmos his utilities to future. continue efficient satisfaction in

Christopher Forsythe

everyone. you, morning, and Thank Kevin, good

As a Consolidated This 'XX performance the income of $XXX income increased Kevin $XX operating earnings $XX increase was mentioned, higher increases our growth, our Residential prior segments several quarter. million. fiscal represents X.X% first driven $X.XX, an by first to quarter. Rate operating totaled year industrial the in increased over XX% was quarter factors. additional loads, million. with customer commercial operating million per both diluted share in combined by which

the increased the and throughput to Finally, Since spreads. both on some million, driven an due more time, constraints this that returned outages increase half by experienced year. $X spreads for These and capacity normal have historical by norms revenues quarter conditions of largely time unplanned to first various of by driven APT's in market maintenance first primarily pipelines. through-system the were to

these offsetting consolidated Bad increase million. [ factors. several ] a debt $XX Partially driven by increases $XX million was in O&M increased expense

resulting in quarter increased debt bad change driven support a and growth by expense service higher As prior to how $XX standby million, debt in a site costs [ recover work. recognized bad reduction Employee-related a year due company ]. nonrecurring in primarily headcount the expense $XX increased reminder, our from in overtime we increased approximately regulatory and costs we million to

of our [ spending within work increase the increased an safety-related our time $X experienced inspection compliance distribution We million segments. pipeline, segment, associated and survey and in lease in in-line ] with also storage work and other

increase experienced Therefore, safety is ] Finally, in offset impact of increase system [ integrity APT's a corresponding had new increase and as expense, a income. safety APT's no we operating in revenue which result system million integrity a mechanism. by this to $X and

beginning a increases. annual the in $XXX to have increases operating this Since filings $XXX we [ this of progress ] [ approximately a year, filings. segment. regulatory we filed and million of of income distribution of implemented our Texas to $XX the in income revenue million the implementation X Included from million in our $XXX Of in $XX million to Mississippi. perspective. annualized start X seeking good fiscal rate our relates mechanisms off is filings are in amount, X We have Texas, form in X from in million ] relates implementation approximately the annualized operating annual Currently,

first million rate filed is distribution a $XX general West our Texas system-wide fall. we last that case The in

As all in that of required our a filing on reminder, this Texas affects XXXX. settlement customers is in based West a reached the we

Additionally, X rates of division. years portions following West we grid require refresher Texas volumes from of our

X $XX seeking increase million million had cases operating City the these filing the quarter, our the jurisdictions. filed $XX our first Mid-Tex mechanism seeking And cycle fiscal annualized with divisions filed ended During annual income. new January, grid in as X-year filing we in we in a of Dallas for

general of in a Kentucky We are annualized proceeding approximately have in $XXX operating XXXX. we by year spring to of we progress income and increases. additional Finally, completing million all filings million. seeking seeking These rate anticipate make filings fiscal late them planned, case plan in approximately this $XX as

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

Additionally, $XXX million of equity agreements. sold we forward

equity expected under proceeds fiscal of anticipated all sales to needs or This any Our our equity offset we in capitalization billion and needs for of fiscal as debt available equity have of agreements, [ billion and remainder is December net available 'XX $X.X XX approximately equity short-term satisfy $X.X includes ]. which was did We outstanding. XX%, not almost existing 'XX. forward anticipated the

morning. Our achieve this of for 'XX in remain And you to the per billion. first plan $X.XX I results Thank now questions. up for capital spending $X.XX. achieve well quarter the fiscal on time to your to us open earnings we positioned track share have $X.X our range of will call

Operator

the from with question Dumoulin-Smith first Jefferies. our line take We'll of Instructions] [Operator Julien

Unknown Analyst

You've got How on Ward is everyone? [ here for James ] Julien.

John Akers

Good you. to hear from

Unknown Analyst

the bit for Terrific. I'm little looking Pardon a me, weather. more We're color. bit a under

looking to ROE plan for still at a forward. moving is more enough clear what bit hear. hopefully, more high higher bit a a essentially, color last looking the on rate I'm lags, earned announced strategic, little It's CapEx level. sort But trajectory little So more of we're quarter

of color to of be get those potential so to the the to as looking in our some say. could models, art as some we here of speak, likes leader sort the possible, into of build our what Just incremental

Additional color be great. would

John Akers

Yes.

first this Let's for part of question your plan around capital start the the year. with there

our reflects modernization strategy across be growth our programs we that system, supporting pipeline continue talked system as of this replacement growth said just the our As to at on our about that we call, call quarterly the out last in front well.

we on well storage We place, call also heard that out enhancements of going of there. the this have APT the some into interconnects that as putting is some as

areas So it's projects a to the of roll system last we and system continuation continue that if as a had additional several the will, identify across years or in we forward, more modernization. need you areas of growth what

of So same a strategy. continuation the

Unknown Analyst

That's that. clarify to wanted just I helpful. you. Got you. Got very

as I prepared think most set of remarks. you questions we'd the of kind actually in what covered here

just we growth the so I'll guys would and really to on? just color. giving that know our in you on projects and color speak but So industrial generation appreciate more on the it hop anything could That else sort initially, addressed customer target? you large-scale of -- queue. and Anything be follow-on back I you

John Akers

see Okay. Thank across residential, you. Yes, all good call commercial industrial. this sectors, we on growth and continue here, said to as we

on On anticipated with X.X side, to quarter there. coming the this XX X alone, load of Bcf industrial new about

we we customers of prospects. the sign with the again, actual have But company depth we're that customer. and not agreements to to going for know sure they're be to continue going the We get until into prospects have a

be builders, the well developers as developers, to service feedback the strong again, But continues economy, commercial territory. entire from across

a from last that looking folks it's service territory. hear seen we've continue things positive again, those years continuation the in So our and across of to what several are

Operator

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

Richard Sunderland

and Within be how forward ratable? Thank 'XX, that most should for should you we the XXXX ATM modeling specifically? time for 'XX for is under the billion And $X.X equity of that we much equity assume today.

Christopher Forsythe

traditionally throughout -- fiscal a issued talked we've again, fashion long-term equity in about, the balanced So debt year. equity being

have $XXX we in million $XXX to million traditionally run So range. the

I down, will think we talked about the terms that's quarter. good plan million to down a it in for drawing on XXXX. It $XXX first in fiscal of the drawing -- range

our of our it's we the the sheet time just dependent balance given on remainder in point during just flow year. cash needs the on see where fiscal For and year, any

the specific, those ready a just goes be depends of on to work could little cash It try how it do we'll around needs. year flow. terms quarter it to So bit in more but in

Richard Sunderland

Okay. Got it.

million the plans, then the helpful you're so about your So $XXX to it? up years for think tick right to number annually? that roll that to forward we the $XXX expecting basically, through but way 'XX, is in million as Is

Christopher Forsythe

correct. that's Yes,

commensurately grow got As will through $X.X about ratably we're the continues billion the now question, that, be a somewhat going back continue over -- equity, our with method. we debt to year. $XX X-year ATM billion. And this years. being grow the other the financing long-term capital will few using plan, equity the of with grow, to grid to fashion kind In again, next in long-term balanced the That

Richard Sunderland

clear. then benefit you're to range? guidance Very early in for of recognizing guidance Any higher you Got APT relative thoughts sort it. does And the quarter, on spread that this other move on benefit it's the within year, but assumptions? the

John Akers

Yes.

As power we more about, sort on forward. to weather What does back we've to the spread we Again, of in look load this quarter move widen seen heating the that depend had cooling the eye what up on season. saw as this have those the early It's of an And this gen like we'll we things. traditionally come this. normal, the going talked summer, just year. of it what remainder load, time to shows then keep and

the what and So out front of fiscal or does year right see of and the again, rest just get have we far I too watch not in now the to and into try think it head as going that. to market we're predict

Operator

with comes Morgan of Our the line next question Arcaro David from Stanley.

David Arcaro

a We question supply. power been the of side plant plants contracts Let gas me Maybe on microgrids new things. hearing and had looking we've more about long-term gas-fired for power see. for

seeing those power guess more industrial opportunities from then more generation? I customer XX on customers broadly, power the are any plants? things of of was you side wondering, maybe So I are new And

John Akers

Mississippi, well residential nature a lot of as medical distilling part to through strength as load our middle industry. from the battery take from question territories. think across medical We've a Again, the of industries load these No, diversification in those and manufacturing, some Virginia, Kentucky, that's there got are automotive. are not to Texas here commercial, variety new power I well Let's diversified supporting the the see balance which facilities. to load, as of exceptional in large XX industrial service Tennessee, of we industrial loads your first. good of more system of plants They are a of

seen all states. work or contract Other in we've to seek But continue commerce, inquiries talk this and signed have want announcements than speculate to that, continue of with that customers actual to and have don't this are supply various again, until continue customers larger until wait and loads, locations, about that a at to or industrial at chambers make contract. natural get we'll their we I specifics actually get gas think for to we with have across about, As into economic those to we'll an X point a development, want to questions we on signature point. answer opportunities ready

David Arcaro

Mid-Tex West guess, That And cases Okay. on makes I Texas, rate sense. maybe then Texas. Understood. the and in

focus issues getting GRIP now challenges in you that iteration next of the with into think Just programs of wondering terms there? longer-term that getting anticipated there's the areas any of those you're if or any re-upped

Christopher Forsythe

various these to the Yes, call end X-year it, again, to just would of focused really refresh the received. what being stipulated prior blocking a got cap for GRIP or utilities I settlement, I'm David, tackling have We've the the structure. characterize coming previously riders, mechanisms the going cases, couple of in rate by a we're the, on where or of cycle the regulatory state and SSI items other seen and some ROE asking

regulatory not are concepts to in been Texas. certainly but not the new within maybe in had these new terms framework of potentially discussed So that Atmos,

great doing through I And have is to all in we're as these the team the spring. working by wrapped a job hopeful our up process. the again, regulatory So of mentioned, end

Operator

Barclays. from question Our next comes the of with line She Fei

Fei She

really annualized first since the with -- quarter. should equity quarter outlook you X regarding you just year year on credit FFO issuance reported forward? a another an debt have metric plan the it's Could about on rating the in comment to plan metrics. how higher basis, support the both last color and on year equity credit think this almost the And successful that Congrats we going balance provided just and follow-up I you capital a update? Moody's just on of we been sheet had

Christopher Forsythe

this Yes, Chris. Sure. is

with since see outlook XX their look So provided, Moody's out X-year mentioned, the April, to April as certainly of timing. based we of been early put end obviously, the year. refresh months on outlook upon last basis negative provided in updates March, FFO regular part to investment the management the And We've you probably take whole back what the community a on has April around us new they typically their about come They and process. plan, them we'll at the by taking debt. where of a communication

the the It's winter And like like. that's our very like about where be we really times think a and many we years as again, many, capitalization to position financing feel era But economic in. over is the it today. strategy, equity volatility, pandemics, comfortable storm last us benefited through X we

-- depending we in that all. Moody's our X have if of financing various it out impact at we're should so out. but planning how on notch shakes not probably perhaps, much the within alternatives have our comes on see it's cost downgrade, ultimately, rating where But factored that, cycle And an a on we'll

Fei She

Perfect. it. Appreciate

Operator

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

Ryan Levine

small, federal to assume I hear comments guess level potentially I around given you impact at of Chinese and wanted CapEx? color around the could around your O&M tariffs headlines Mexican the but all tariffs, any share? and it's I

John Akers

Ryan. Yes,

executive that energy the what women and and that orders and to gas national pleased recognition. and conferences every oil that. see hear with what see this to the watch folks both men demand through of natural security. start do, and of industry, day for do with to we for press some very proud natural to continue Very and the support what saying It's do. industry oil we're of I'll gas the We good the to provide fuel our continue

to come orders watch continue out. We as executive

at the well. continue as to communicate stakeholders level federal key our with We

of were recently that the pause. On piece just on put your tariff part question, saw those where of it, to

vendors all to to are we manufacturers made United So here have to assembled continue or parts suppliers, fully currently any our see going overseas and made components which here the and we're that sourced work either in of with are States. brought here

vendors but what So on suppliers right at to if may go now, all, our would lower work on we're end look forward. that with and say I anticipate be like they'd put probably to a that as handle the we and continuing

Ryan Levine

pressure us upward across recovery service remind If your the there territory regulatory capital the to on be an mechanisms costs, you on were can around for side?

John Akers

just with ones recover go have every to mechanisms be Kansas, annual move point, a are the jurisdiction. traditional show we like like we'll at we those Kentucky, we if is Again, Yes. the up. and The they in to or this again, work place cases show there costs mentioned today, have would continue continue Chris our of that about where ones as forward. in only suppliers Virginia and any identify should itself But vendors to would anything those

Ryan Levine

federal gas your extent similar any around [ ], the some in on Abilene consumption ] Star in in impact announcements potential then there's have developments in the terms growth region, added gain and [ that business? generation on and would And of vein that

John Akers

on system. know, mechanism customer on that to behind interruptible an be customers if sign system, APT And Well, sharing a the have again, come likely on capacity be system. XX-XX wants more that and the And you on APT we with to our a they'd contract available basis. would as

on from a customers of we would that any XX% at come would with that those share being through upside customer So rate.

Operator

back Meziere remarks. session. Dan to hand the I any our now call conclude will for question-and-answer will over that And closing

Daniel Meziere

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

Operator

that Everyone, for conclude will Thank today's you joining. all call.

disconnect. You may now

Atmos Energy (ATO) 5 Feb 252025 Q1 Earnings call transcript