Atmos Energy Corporation · NYSE:ATO
Atmos Energy — Q1 2022 Earnings Presentation
25 slides from Atmos Energy's earnings presentation, Feb 9, 2022
Slide 1: Analyst Call to Review Fiscal 2022 First Quarter Financial Results
Analyst Call to Review Fiscal 2022 First Quarter Financial Results February 9, 2022 9:00 a.m. Eastern
Slide 2: Fiscal Q1 2022 Review
Fiscal Q1 2022 Review As of February 8, 2022 Page 2
Slide 3: Fiscal 2022 Highlights
Q1 Fiscal 2022 Financial Performance Fiscal 2022 Highlights • Financial Performance • YTD Diluted EPS of $1.86 • $684 million in capital spending; 88% allocated to safety and reliability spending • 8.8% increase in fiscal 2022 annual dividend to $2.72 per diluted share • 38th consecutive year of ris
Slide 4: Consolidated Financial Highlights
Q1 Fiscal 2022 Financial Performance Consolidated Financial Highlights Three Months Ended December 31 Segment Net Income 2021 2020 ($millions, except EPS) Distribution $ 179 $ 154 Pipeline & Storage 70 64 Net Income $ 249 $ 218 Diluted EPS1 $ 1.86 $ 1.71 Capital Expenditures $ 684.2 $ 456.8 1. Since
Slide 5: Segment Operating Income Highlights
Q1 Fiscal 2022 Financial Performance Segment Operating Income Highlights Three Months Ended 2021 2020 Change December 31 ($millions) Distribution $ 190.5 $ 209.5 $ (19.0) Pipeline & Storage 85.4 89.3 (3.9) Operating Income $ 275.9 $ 298.8 $ (22.9) Distribution Key Drivers Pipeline & Storage Key Driv
Slide 6: Capital Spending Highlights
Q1 Fiscal 2022 Financial Performance Capital Spending Highlights $millions Fiscal 2021 YTD CapEx Repair and replace transmission and distribution $ 302 pipelines 108 Pipeline integrity management projects 1% Install & replace measurement & regulating 74 equipment 11% 63 Service line replacement 88%
Slide 7: Strong Financial Foundation Supports Capital Spending Program
Q1 Fiscal 2022 Financial Performance Strong Financial Foundation Supports Capital Spending Program Capitalization and Liquidity Profile Total Capitalization1 Liquidity Profile as of 100% December 31, 2021 $3,000 $295 48% $264 75% 49% $2,500 $100 $2,000 $3.1 billion $900 Available 50% Liquidity as $1
Slide 8: Financing Highlights
Q1 Fiscal 2022 Financial Performance Financing Highlights • $800 million of long-term debt financing issued • $600 million 2.85% 30-year senior notes issued in October 2021 • $200 million 2.625% senior notes issued in January 2022 due September 2029 • Equity needs satisfied through our ATM program •
Slide 9: Manageable Debt Maturity Schedule Supports Capital Spending Program
Q1 Fiscal 2022 Financial Performance Manageable Debt Maturity Schedule Supports Capital Spending Program Weighted Average Maturity ~19.2 Years1 2 $2,200 0.60% $950 3.73% $750 4.125% $600 $600 $600 $500 $500 1.5% $500 4.30% 2.85% 3.00% 2.625% $400 4.15% 5.50% $200 $150 5.95% 6.75% $10 6.67% 2023 2024
Slide 10: Strong Investment Grade Ratings Support Affordable Customer Bills
Q1 Fiscal 2022 Financial Performance Strong Investment Grade Ratings Support Affordable Customer Bills Strong Investment Declining Weighted Average Cost of Debt1 Grade Credit Ratings $6,000 6.0 Standard & Moody’s 5.2 Poor’s $5,000 4.7 5.0 Senior A1 A- 4.2 Unsecured 4.0 $4,000 3.8 4.0 Commercial P-1
Slide 11: Regulatory Highlights
FY 2022 Financial Performance Regulatory Highlights Approved Annualized Key Rate Activity Operating Income Increases1,2 Through February 8, 2022 • $28.9MM Completed $200 • $ 21.7MM – Mid-Tex RRM • $ 8.4MM – Mississippi SIR • $ 2.6MM – Colorado SSIR $150 • $ 1.8MM – Kansas GSRS • $ 0.3MM – Virginia S
Slide 12: Financial Outlook: Fiscal 2022E Guidance
Financial Outlook Fiscal 2022E Guidance ($millions, except EPS) FY 2021 FY 2022E1 Distribution $ 446 $ 500 - 520 Pipeline & Storage 220 240 - 250 Total Net Income $ 666 $ 740 - 770 Average Diluted Shares 129.8 136.0 - 138.5 Diluted EPS2 $ 5.12 $ 5.40 - $ 5.60 Capital Spending $ 1,970 $ 2,400 - $ 2,5
Slide 13: Financial Outlook: Fiscal 2022E Guidance, Selected Expenses
Financial Outlook Fiscal 2022E Guidance Selected Expenses FY 2021 FY 2022E1 ($millions) O&M $ 679 $ 690 - 710 D&A $ 478 $ 530 - 540 Interest $ 84 $ 100 - 105 Income Tax $ 154 $ 62 - 72 Effective Tax Rate 18.8% 7% - 9%2 1. Changes in events or other circumstances that the Company cannot currently ant
Slide 14: Regulatory Information
Regulatory Information As of February 8, 2022 Page 14
Slide 15: Regulatory Mechanisms To Support Recovery
Regulatory Mechanisms To Support Recovery Annual Revenue and Lag Revenue Stability and Lag Other Mechanisms Mechanisms Pension and Recovery of Annual Rate Bad Debt Jurisdiction Infrastructure Retirement Cost WNA Certain Stabilization in GCA Trackers COVID-19 Costs Colorado x x Kansas x x x x x Kentu
Slide 16: Key Regulatory Filings – Fiscal 2022E
Key Regulatory Filings – Fiscal 2022E Rate Filing Planned Timing Q1 Q2 Q3 Q4 October – December January – March April – June July – September Mid-Tex and WTX Cities – Colorado and Kansas – Implemented Mid-Tex and WTX Cities – Anticipate Mississippi – Anticipate Stable Rate Implemented RRM filing of
Slide 17: Regulatory Summary
Regulatory Summary Authorized Requested Authorized Effective Date of Last Requested Authorized Requested Authorized Requested Requested Operating Operating Rate Base Debt/ Meters Jurisdiction Date of Last Rate Filing (1) Rate Base Rate of Rate of Return on Return on Debt/Equity Income Income $millio
Slide 18: Regulatory Summary (continued)
Regulatory Summary (continued) Authorized Requested Authorized Effective Date of Last Requested Authorized Requested Authorized Requested Requested Operating Operating Rate Base Debt/ Meters Jurisdiction Date of Last Rate Filing (1) Rate Base Rate of Rate of Return on Return on Debt/Equity Income In
Slide 19: Colorado - Kansas Division
Colorado - Kansas Division • Kansas: Filed System Integrity Program (SIP) on January 14, 2022 • Requested an increase in annual operating income of $0.6 million • Requested ROE: 9.10%; ROR: 7.03% • Requested capital structure: 44% debt / 56% equity • Requested rate base: $5.9 million • Kansas: Imple
Slide 20: Kentucky/Mid-States Division
Kentucky/Mid-States Division • Tennessee: Filed Annual Review Mechanism (ARM) on February 1, 2022 • Requested an annual operating income increase of $3.7 million • Requested ROE: 9.80%; ROR: 7.53% • Requested capital structure: 39% debt / 61% equity • Requested rate base: $453.9 million • Kentucky:
Slide 21: Kentucky/Mid-States Division
Kentucky/Mid-States Division • Virginia: Implemented SAVE Infrastructure Program on October 1, 2021 • Authorized an annual operating income increase of $0.3 million • Authorized ROE: 9.20%; ROR: 7.43% • Authorized capital structure: 42% debt / 58% equity • Authorized rate base: $7.5 million As of Fe
Slide 22: Mid-Tex Division
Mid-Tex Division • Mid-Tex City of Dallas: Filed Dallas Annual Rate Review DARR on January 14, 2022 • Requested an increase in annual operating income of $13.6 million • Requested ROE: 9.80%; ROR: 7.41% • Requested capital structure: 41% debt / 59% equity • Requested rate base: $5.1 billion • Test y
Slide 23: Mississippi Division
Mississippi Division • Mississippi: Implemented Annual Stable Rate Filing (SRF) on November 1, 2021 • Authorized a decrease in annual operating income of ($1.3) million; ($5.6) million net of excess deferred income tax amortization • Authorized ROR: 7.81% • Authorized rate base: $473.9 million • For
Slide 24: West Texas Division
West Texas Division • West Texas Cities: Implemented 2020 Annual Rate Review Mechanism (RRM) on December 1, 2021 • Authorized annual operating income increase of $3.5 million; $0.2 million net of excess deferred income tax amortization • Authorized ROE: 9.80%; ROR: 7.36% • Authorized capital structu
Slide 25: 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