Atmos Energy Corporation · NYSE:ATO
Atmos Energy — Q3 2024 Earnings Presentation
32 slides from Atmos Energy's earnings presentation, Aug 8, 2024
Slide 1: Analyst Call to Review Fiscal 2024 Third Quarter Financial Results
Analyst Call to Review Fiscal 2024 Third Quarter Financial Results August 8, 2024 10:00 a.m. Eastern
Slide 2: Fiscal Q3 2024 Review
Fiscal Q3 2024 Review As of August 7, 2024 Page 2
Slide 3: Q3 Fiscal 2024 Financial Performance: Fiscal 2024 Highlights
Q3 Fiscal 2024 Financial Performance Fiscal 2024 Highlights • Financial Performance • YTD Diluted EPS of $6.00 • $2.1 billion in capital spending; 82% allocated to safety and reliability spending • Expect to achieve higher end of fiscal 2024 EPS guidance range of $6.70 to $6.801 • 8.8% increase in f
Slide 4: Consolidated Financial Highlights
Q3 Fiscal 2024 Financial Performance Consolidated Financial Highlights Three Months Ended Nine Months Ended June 30 June 30 Segment Net Income 2024 2023 2024 2023 ($millions, except EPS) Distribution $ 66 $ 60 $ 630 $ 542 Pipeline & Storage 100 78 279 225 Net Income $ 166 $ 138 $ 909 $ 767 Diluted E
Slide 5: Segment Operating Income Highlights (Three Months)
Q3 Fiscal 2024 Financial Performance Segment Operating Income Highlights Three Months Ended June 30 2024 2023 Change ($millions) Distribution $ 83.1 $ 71.7 $ 11.4 Pipeline & Storage 137.2 97.6 39.6 Operating Income $ 220.3 $ 169.3 $ 51.0 Distribution Key Drivers Pipeline & Storage Key Drivers • $30.
Slide 6: Segment Operating Income Highlights (Nine Months)
Q3 Fiscal 2024 Financial Performance Segment Operating Income Highlights Nine Months Ended June 30 2024 2023 Change ($millions) Distribution $ 789.8 $ 638.8 $ 151.0 Pipeline & Storage 380.6 274.3 106.3 Operating Income $ 1,170.4 $ 913.1 $ 257.3 Distribution Key Drivers Pipeline & Storage Key Drivers
Slide 7: Capital Spending Highlights
Q3 Fiscal 2024 Financial Performance Capital Spending Highlights $millions Fiscal 2024 YTD CapEx Repair and replace transmission and distribution $ 864 pipelines 344 Fortifications 4% 226 Service line replacement 82% Install & replace measurement & regulating 207 14% equipment 67 Pipeline integrity
Slide 8: Strong Financial Foundation Supports Capital Spending Program
Q3 Fiscal 2024 Financial Performance Strong Financial Foundation Supports Capital Spending Program Capitalization and Liquidity Profile Liquidity Profile as of Total Capitalization June 30, 2024 100% 1% $5,000 39% 37% 75% $4,000 $675 $551 $3,000 $100 50% $4.3 billion $1,500 Available $2,000 Liquidit
Slide 9: Financing Highlights
Q3 Fiscal 2024 Financial Performance Financing Highlights • $1.2 billion of long-term debt financing issued • $500 million 6.20% 30-year senior notes issued in October 20231 • $400 million 5.90% 10-year senior notes issued in October 20232 • $325 million 5.90% 10-year senior notes issued in June 202
Slide 10: Manageable Debt Maturity Schedule Supports Capital Spending Program
Q3 Fiscal 2024 Financial Performance Manageable Debt Maturity Schedule Supports Capital Spending Program Weighted Average Maturity ~17.3 Years $1,100 4.168% $950 3.73% $750 $725 4.125% Total Amount Maturing 5.90% $600 $600 1.50% 4.30% $500 $500 $500 $500 3.00% 2.625% 4.15% 6.20% $400 5.50% $300 5.45
Slide 11: Strong Investment Grade Ratings Support Affordable Customer Bills
Q3 Fiscal 2024 Financial Performance Strong Investment Grade Ratings Support Affordable Customer Bills Strong Investment Weighted Average Cost of Debt Grade Credit Ratings $9,000 5.0% Standard & Moody’s Poor’s $8,000 4.5% 4.2% 4.1% Senior Unsecured A1 A- 4.0% 4.0% 3.8% 4.0% $7,000 Commercial Paper P
Slide 12: Regulatory Highlights
FY 2024 Financial Performance Regulatory Highlights Approved Annualized Key Rate Activity Operating Income Increases1,2 Through August 7, 2024 $600 $550 • $380.4MM Implemented $500 • $107.2MM – Texas RRMs $182.2 • $ 82.4MM – APT GRIP $450 • $ 37.8MM – Mid-Tex DARR $400 • $ 35.6MM – Five Texas GRIP f
Slide 13: Financial Outlook: Fiscal 2024E Guidance
Financial Outlook Fiscal 2024E Guidance ($millions, except EPS) FY 2023 FY 2024E1 Distribution $ 580 $ 670 - 690 Pipeline & Storage 306 350 - 360 Total Net Income $ 886 $ 1,020 - 1,050 Average Diluted Shares 145.2 152 – 154 Diluted EPS2 $ 6.10 $ 6.70 - 6.803 Capital Spending $ 2,806 $ ~3,100 1. Chan
Slide 14: Financial Outlook: Selected Expenses
Financial Outlook Fiscal 2024E Guidance Selected Expenses FY 2023 FY 2024E1 ($millions) O&M $ 765 $ 800 - 820 D&A $ 604 $ 670 - 680 Interest $ 137 $ 190 - 196 Income Tax $ 114 $ 165 -180 Effective Tax Rate 11.4% 14% - 16%2 1. Changes in events or other circumstances that the Company cannot currently
Slide 15: Regulatory Information
Regulatory Information Page 15
Slide 16: Regulatory Mechanisms To Support Recovery
Regulatory Mechanisms To Support Recovery Annual Revenue and Lag Revenue Stability and Lag Mechanisms Mechanisms Pension and Annual Rate Bad Debt in Jurisdiction Infrastructure Retirement Cost WNA Stabilization GCA Trackers Colorado Kansas Kentucky Tennessee Virginia
Slide 17: Key Regulatory Filings – Fiscal 2024E
Key Regulatory Filings – Fiscal 2024E Rate Filing Planned Timing Q1 Q2 Q3 Q4 October – December January – March April – June July – September Mid-Tex and WTX Cities – Filed Rate Mississippi – Filed Stable Rate Filing (SRF) Mid-Tex and WTX Cities – Implemented RRM Colorado – Implemented SSIR filing o
Slide 18: Regulatory Summary
Regulatory Summary Effective Date of Authorized Requested Authorized Requested Authorized Requested Authorized Requested Requested Date of Last Rate Operating Operating Rate Base Debt/ Meters Jurisdiction Rate Base Rate of Rate of Return on Return on Debt/Equity Last Rate Filing Income Income $milli
Slide 19: Regulatory Summary (continued)
Regulatory Summary (continued) Effective Date of Authorized Requested Authorized Requested Authorized Requested Authorized Requested Requested Date of Last Rate Operating Operating Rate Base Debt/ Meters Jurisdiction Rate Base Rate of Rate of Return on Return on Debt/Equity Last Rate Filing Income I
Slide 20: Atmos Pipeline - Texas
Atmos Pipeline - Texas • Atmos Pipeline: Filed 2024 System Safety & Integrity (SSI) Rider on June 14, 2024 • New annual mechanism approved in the 2023 SOI • Allows for the recovery of certain system safety and integrity costs incurred each year • Costs above a benchmark are deferred onto the balance
Slide 21: Atmos Pipeline - Texas
Atmos Pipeline - Texas • Atmos Pipeline: Implemented 2023 Statement of Intent (SOI) on December 13, 2023 • Authorized an increase in annual operating income of $27.0 million excluding the impact of EDIT • Authorized ROE: 11.45%; ROR: 8.49% • Authorized capital structure: 40% debt / 60% equity • Auth
Slide 22: Colorado - Kansas Division
Colorado - Kansas Division • Kansas: Implemented System Integrity Program (SIP) on April 1, 2024 • Authorized an increase in annual operating income of $0.7 million • Authorized rate base: $19.9 million • Test Year Ending December 31, 2023 • Kansas: Implemented Gas Safety Reliability Surcharge (GSRS
Slide 23: Kentucky/Mid-States Division
Kentucky/Mid-States Division • Kentucky: Filed Annual PRP on July 31, 2024 • Requested an annual operating income increase of $3.4 million • Requested ROE: 9.45%; ROR: 6.94% • Requested capital structure: 45% debt / 55% equity • Requested rate base: $69.3 million • Kentucky: Implemented Annual PRP o
Slide 24: Kentucky/Mid-States Division
Kentucky/Mid-States Division • Virginia: Filed SAVE Infrastructure Program on May 31, 2024 • Requested an annual operating income increase of $0.7 million • Requested ROE: 9.90%; ROR: 7.57% • Requested capital structure: 39% debt / 61% equity • Requested rate base: $21.4 million • Virginia: Implemen
Slide 25: Louisiana Division
Louisiana Division • Louisiana: Implemented Annual Rate Stabilization Clause RSC on July 1, 2024 • Authorized an annual operating income increase of $35.6 million • Authorized ROE: 9.80%; ROR: 7.43% • Authorized capital structure: 42% debt / 58% equity • Authorized rate base: $1.2 billion • Implemen
Slide 26: Mid-Tex Division
Mid-Tex Division • Mid-Tex Cities: Filed Rate Review Mechanism RRM on April 1, 2024 • Requested an increase in annual operating income of $133.4 million • Requested ROE: 9.80%; ROR: 7.51% • Requested capital structure: 40% debt / 60% equity • Requested rate base: $7.2 billion • Test year ending Dece
Slide 27: Mid-Tex Division
Mid-Tex Division • Mid-Tex Cities: Implemented Dallas Annual Rate Review DARR on June 1, 2024 • Authorized an increase in annual operating income of $37.8 million • Authorized ROE: 9.80%; ROR: 7.47% • Authorized capital structure: 40% debt / 60% equity • Authorized rate base: $6.8 billion • Test yea
Slide 28: Mississippi Division
Mississippi Division • Mississippi: Filed Annual System Integrity Rider (SIR) on July 1, 2024 • Requested an increase in annual operating income of $21.8 million • Requested ROE: 11.02%; ROR: 8.3% • Requested capital structure: 39% debt / 61% equity • Requested rate base: $585.6 million • Forward-lo
Slide 29: Mississippi Division
Mississippi Division • Mississippi: Implemented Annual System Integrity Rider (SIR) on December 1, 2023 • Authorized an increase in annual operating income of $11.0 million • Authorized ROE: 10.34%; ROR: 7.82% • Authorized capital structure: 39% debt / 61% equity • Authorized rate base: $472.7 milli
Slide 30: West Texas Division
West Texas Division • West Texas Cities: Filed Rate Review Mechanism RRM on April 1, 2024 • Requested an increase in annual operating income of $6.7 million • Requested ROE: 9.80%; ROR: 7.51% • Requested capital structure: 40% debt / 60% equity • Requested rate base: $1.1 billion • Test year ending
Slide 31: West Texas Division
West Texas Division • West Texas ALDC: Implemented 2023 GRIP on June 7, 2024 • Authorized an increase in annual operating income of $7.3 million • Authorized ROR: 7.35% • Authorized capital structure: 41% debt / 59% equity • Authorized rate base: $1.1 billion • Test year ending December 31, 2023 • W
Slide 32: Forward Looking Statements
Forward Looking Statements The matters discussed or incorporated by reference in this presentation may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of