Atmos Energy Corporation · NYSE:ATO
Atmos Energy — Q1 2024 Earnings Presentation
26 slides from Atmos Energy's earnings presentation, Feb 7, 2024
Slide 1: Analyst Call to Review Fiscal 2024 First Quarter Financial Results
Analyst Call to Review Fiscal 2024 First Quarter Financial Results February 7, 2024 9:00 a.m. Eastern
Slide 2: Fiscal Q1 2024 Review
Fiscal Q1 2024 Review As of February 6, 2024 Page 2
Slide 3: Q1 Fiscal 2024 Financial Performance: Highlights
Q1 Fiscal 2024 Financial Performance Fiscal 2024 Highlights • Financial Performance • YTD Diluted EPS of $2.08 • $770 million in capital spending; 82% allocated to safety and reliability spending • 8.8% increase in fiscal 2024 indicated annual dividend to $3.22 per diluted share • 40th consecutive y
Slide 4: Consolidated Financial Highlights
Q1 Fiscal 2024 Financial Performance Consolidated Financial Highlights Three Months Ended December 31 Segment Net Income ($millions, except EPS) 2023 2022 Distribution $ 221 $ 195 Pipeline & Storage 90 77 Net Income $ 311 $ 272 Diluted EPS1 $ 2.08 $ 1.91 Capital Expenditures $ 769.7 $ 795.7 1. Since
Slide 5: Segment Operating Income Highlights
Q1 Fiscal 2024 Financial Performance Segment Operating Income Highlights Three Months Ended December 31 2023 2022 Change ($millions) Distribution $ 280.5 $ 231.8 $ 48.7 Pipeline & Storage 118.6 89.4 29.2 Operating Income $ 399.1 $ 321.2 $ 77.9 Distribution Key Drivers Pipeline & Storage Key Drivers
Slide 6: Capital Spending Highlights
Q1 Fiscal 2024 Financial Performance Capital Spending Highlights $millions Fiscal 2024 YTD Capital Spending Repair and replace transmission and distribution $ 253 pipelines 192 Fortifications 4% 79 Install & replace measurement & regulating equipment 14% 82% 71 Service line replacement 21 Pipeline i
Slide 7: Strong Financial Foundation Supports Capital Spending Program
Q1 Fiscal 2024 Financial Performance Strong Financial Foundation Supports Capital Spending Program Capitalization and Liquidity Profile Total Capitalization Liquidity Profile as of 100% December 31, 2023 1% $3,500 $3,000 $278 40% 37% 75% $473 $2,500 $100 $2,000 $900 50% $3.2 billion $1,500 Available
Slide 8: Financing Highlights
Q1 Fiscal 2024 Financial Performance Financing Highlights • $900 million 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 • Equity needs satisfied through our ATM program • $261.4 mi
Slide 9: Manageable Debt Maturity Schedule Supports Capital Spending Program
Q1 Fiscal 2024 Financial Performance Manageable Debt Maturity Schedule Supports Capital Spending Program Weighted Average Maturity ~18.2 Years $1,100 4.168% $950 3.73% $750 4.125% $600 $600 1.50% 4.30% $500 $500 $500 $500 3.00% 2.625% 4.15% 6.20% $400 $400 5.90% 5.50% $300 5.45% $200 $150 5.95% 6.75
Slide 10: Strong Investment Grade Ratings Support Affordable Customer Bills
Q1 Fiscal 2024 Financial Performance Strong Investment Grade Ratings Support Affordable Customer Bills Strong Investment Weighted Average Cost of Debt Grade Credit Ratings Standard & $8,000 5.0 Moody’s Poor’s 4.2 4.5 Senior Unsecured A1 A- $7,000 4.1 4.0 4.0 3.8 4.0 Commercial Paper P-1 A-2 $6,000 3
Slide 11: Regulatory Highlights
FY 2024 Financial Performance Regulatory Highlights Approved Annualized Key Rate Activity Operating Income Increases1,2 Through February 6, 2024 $350 • $166.9MM Implemented • $ 98.6MM – Mid-Tex Cities RRM $300 • $ 27.0MM – APT Rate Case • $ 11.5MM – Mississippi SRF $250 • $ 11.0MM – Mississippi SIR
Slide 12: Financial Outlook: Fiscal 2024E Guidance
Financial Outlook Fiscal 2024E Guidance ($millions, except EPS) FY 2023 FY 2024E1 Distribution $ 580 $ 645 - 665 Pipeline & Storage 306 340 - 350 Total Net Income $ 886 $ 985 - 1,015 Average Diluted Shares 145.2 152 - 154 Diluted EPS2 $ 6.10 $ 6.45 - 6.65 Capital Spending $ 2,806 $ ~2,900 1. Changes
Slide 13: Financial Outlook: Selected Expenses
Financial Outlook Fiscal 2024E Guidance Selected Expenses FY 2023 FY 2024E1 ($millions) O&M $ 765 $ 780 - 800 D&A $ 604 $ 685 - 695 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 14: Regulatory Information
Regulatory Information Page 14
Slide 15: 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 x x Kansas x x x x Kentucky x x x Tennessee x x x x x Virginia x x
Slide 16: 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 – Anticipate filing Mississippi – Anticipate Stable Rate Filing Mid-Tex and WTX Cities – Implemented RRM Colorado – Implemented SSIR fi
Slide 17: 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 at Jurisdiction (1) Rate Base Rate of Rate of Return on Return on Debt/Equity Last Rate Filing Income Income
Slide 18: Regulatory Summary (continued)
Regulatory Summary (continued) Effective Date of Authorized Requested Requested Authorized Requested Authorized Requested Authorized Requested Date of Last Rate Operating Operating Rate Base Meters at Jurisdiction (1) Rate Base Rate of Rate of Return on Return on Debt/ Equity Debt/Equity Last Rate F
Slide 19: Atmos Pipeline - Texas
Atmos Pipeline - Texas • Atmos Pipeline: Implemented 2023 Statement of Intent (SOI) on December 13, 2023 • Approved an increase in annual operating income of $27.0 million excluding the impact of EDIT • Approved ROE: 11.45%; ROR: 8.49% • Approved capital structure: 40% debt / 60% equity • Approved r
Slide 20: Colorado - Kansas Division
Colorado - Kansas Division • Kansas: Implemented Gas Safety Reliability Surcharge (GSRS) on November 2, 2023 • Approved an increase in annual operating income of $1.8 million • Approved rate base: $16.5 million • Test Year October 2022 through June 2023 • Kansas: Filed System Integrity Program (SIP)
Slide 21: Kentucky/Mid-States Division
Kentucky/Mid-States Division • Kentucky: Implemented Annual PRP on October 1, 2023 • Authorized an annual operating income increase of $2.9 million • Authorized ROE: 9.45%; ROR: 6.94% • Authorized capital structure: 45% debt / 55% equity • Authorized rate base: $40.5 million • Virginia: Implemented
Slide 22: Kentucky/Mid-States Division
Kentucky/Mid-States Division • Tennessee: Filed Annual Review Mechanism (ARM) on January 30, 2024 • Requested an annual operating income increase of $19.5 million • Requested ROE: 9.80%; ROR: 7.62% • Requested capital structure: 38% debt / 62% equity • Requested rate base: $554.1 million As of Augus
Slide 23: Mid-Tex Division
Mid-Tex Division • Mid-Tex Cities: Implemented Rate Review Mechanism (RRM) on October 1, 2023 • Authorized an increase in annual operating income of $98.6 million • Authorized ROE: 9.80%; ROR: 7.35% • Authorized capital structure: 42% debt / 58% equity • Authorized rate base: $6.1 billion • Test yea
Slide 24: 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 25: West Texas Division
West Texas Division • West Texas Cities: Implemented Rate Review Mechanism (RRM) on October 1, 2023 • Authorized an increase in annual operating income of $8.6 million • Authorized ROE: 9.80%; ROR: 7.35% • Authorized capital structure: 42% debt / 58% equity • Authorized rate base: $965.3 million • T
Slide 26: 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