Atmos Energy Corporation · NYSE:ATO
Atmos Energy — Q1 2019 Earnings Presentation
24 slides from Atmos Energy's earnings presentation, Feb 6, 2019
Slide 1: Analysts Call to Review Fiscal 2019 First Quarter Financial Results
Analysts Call to Review Fiscal 2019 First Quarter Financial Results February 6, 2019 8:00 a.m. Eastern
Slide 2: Q1 Fiscal 2019 Highlights
Q1 Fiscal 2019 Highlights Solid Financial Performance Diluted EPS of $1.38 8.7% increase in capital spending to $416 million; 82% allocated to safety and reliability spending 8.2% increase in fiscal 2019 indicated annual dividend to $2.10 per diluted share - 35th consecutive year of rising d
Slide 3: Consolidated Financial Results
Consolidated Financial Results Fiscal 2019 – Q1 Net Income – Q1 Fiscal 2019 versus Q1 Fiscal 2018 Fiscal 2019 – Q1 Fiscal 2018 – Q1 ($millions, except EPS) Net Net Income EPS 2 Income EPS 2 Segment Net Income Distribution $ 115 $ 249 Pipeline & Storage 43 65 Net Income $ 158 $1.38 $ 314 $2.89 Adjust
Slide 4: Distribution Segment Financial Results
Distribution Segment Financial Results Key Drivers Quarter Ended 12/31 2018 2017 Change Contribution margin increase: ($millions) $7.7MM – Increased consumption Contribution Margin $ 401.1 $ 397.0 $ 4.1 $3.7MM – Customer growth ($7.3MM) – Reduction in rates Operating Expenses including impac
Slide 5: Pipeline & Storage Segment Financial Results
Pipeline & Storage Segment Financial Results Key Drivers Quarter Ended 12/31 2018 2017 Change Contribution margin increase: ($millions) $6.1MM – Rate increases $3.1MM – Transportation Contribution Margin $ 134.8 $ 125.6 $ 9.2 O&M increase: Operating Expenses Higher system maintenance expen
Slide 6: Capital Spending
Capital Spending 82% Spent On Safety and Reliability millions $400 $300 $200 $383.2 $416.4 $100 $0 Q1 FY18 Q1 FY19 As of February 5, 2019 6
Slide 7: Capital Spending Mix
Capital Spending Mix Safety & Reliability Investments Enable Modernization of Infrastructure $millions Fiscal 2019 Q1 CapEx $ 175 Repair and replace transmission and distribution pipelines $ 43 5% Service line replacement 82% $ 40 Fortifications 13% $ 36 Install & replace measurement & regulating eq
Slide 8: Strong Financial Foundation
Strong Financial Foundation Capitalization and Liquidity Profile Total Capitalization Liquidity Profile as of December 31, 2018 100% $2,000 7% $75.0 $218.2 $1,600 $35.0 ~ $1.8 billion 41% 75% 36% 7 issues, 3.00% - 6.75% Available $1,200 Liquidity at 12/31/2018 50% $800 $1,500.0 59% 57% $400 25% 8.50
Slide 9: Fiscal 2019E Guidance
Fiscal 2019E Guidance FY 2018 Adjusted ($millions, except EPS) FY 2019E* Net Income 2 Distribution $ 305 $ 330 - 345 Pipeline & Storage 139 165 - 180 Total Net Income $ 444 $ 495 - 525 Average Diluted Shares 111.0 118.0 - 120.0 Earnings Per Share 1 $ 4.00 $ 4.20 - $ 4.35 * Expected results for fisca
Slide 10: Fiscal 2019E Guidance
Fiscal 2019E Guidance Selected Expenses FY 2018 FY 2019E* ($millions) O&M $ 600 $ 585 - 615 D&A $ 361 $ 385 - 405 Interest $ 107 $ 85 - 95 Income Tax $ 8 $ 135 - 145 Effective Tax Rate 27.3% 21% - 23%** * Expected results for fiscal 2019 assumes normal weather. Changes in events or other circumstanc
Slide 11: Recent Regulatory Developments
Recent Regulatory Developments Approved Annualized Key Rate Activity Operating Income Increases Through 2/5/2019 $millions $21.2MM Implemented – FY19 $90 $ 20.4MM – TX RRM $ 7.0MM – Mississippi SRF/SIR $80 $ 2.1MM – Colorado SSIR $70 ($ 3.5MM) – TX Environ SOIs ($ 5.0MM) – Tennessee ARM
Slide 12: Distribution Operations – Regulatory Update
Distribution Operations – Regulatory Update Mid-Tex Division Mid-Tex City of Dallas: Filed Dallas Annual Rate Review (DARR) on January 15, 2019 Requested an increase in annual operating income of $9.5 million based on a 21% statutory federal income tax rate Requested return on equity (ROE) of
Slide 13: Distribution Operations – Regulatory Update
Distribution Operations – Regulatory Update Mid-Tex Division Mid-Tex Cities: Implemented 2017 Annual Rate Review Mechanism (RRM) on October 1, 2018 Authorized $17.6 million annual operating income increase based a 21% statutory federal income tax rate Authorized ROE of 9.8%; ROR of 7.87% Aut
Slide 14: Distribution Operations – Regulatory Update
Distribution Operations – Regulatory Update West Texas Division West Texas Environs: Implemented 2018 SOI on January 1, 2019 Authorized $0.8 million decrease in operating income based on a 21% statutory federal income tax rate Authorized ROE of 9.8%; ROR of 7.97% Authorized capital structure
Slide 15: Distribution Operations – Regulatory Update
Distribution Operations – Regulatory Update Louisiana Division TransLa: Filed annual RSC on December 28, 2018 Requested a $4.7 million increase in annual operating income based on a 21% statutory federal income tax rate Requested ROE of 9.8%; ROR of 7.81% Requested capital structure: 41% deb
Slide 16: Distribution Operations – Regulatory Update
Distribution Operations – Regulatory Update Mississippi Division Mississippi: Implemented on November 1, 2018, Annual System Integrity Rider (SIR) and Annual Stable Rate Filing (SRF) Authorized annual increase in operating income of $7.1 million for SIR; $0.1 million decrease for SRF Both fili
Slide 17: Distribution Operations – Regulatory Update
Distribution Operations – Regulatory Update Kentucky/Mid-States Division Tennessee ARM Filing: Filed Annual Rate Mechanism (ARM) filing on February 1, 2019 Requested annual operating income increase of $3.2 million based on a 21% statutory federal income tax rate Requested ROE of 9.80%; ROR of
Slide 18: Distribution Operations – Regulatory Update
Distribution Operations – Regulatory Update Colorado - Kansas Division Colorado: Approved System Safety and Integrity Rider (SSIR) January 1, 2019 Authorized a $2.1 million increase in annual operating income based on a 21% statutory federal income tax rate Authorized ROE of 9.45%; ROR of 7.55
Slide 19: Key Regulatory Developments – Fiscal 2019E
Key Regulatory Developments – Fiscal 2019E Rate Filing Outlook Q1 Q2 Q3 Q4 October December January March April June July September Mississippi – Approved Stable Rate Tennessee – filed annual Louisiana – Anticipate LGS annual Mississippi – Anticipate Stable Filing (SRF) and System Integrity mechanis
Slide 20: Federal Tax Reform – Regulatory Progress
Federal Tax Reform – Regulatory Progress Implement Refund Refund Excess Jurisdiction Note 21% in Regulatory Deferred Taxes Rates Liability Approved Period (Yrs) APT – Base rates 2 Colorado (Includes SSIR) 1 18 Kansas 2 Kentucky 1 24-32 Louisiana – LGS 1 23 Louisiana – TransLa 1 28 Mississippi (SIR &
Slide 21: 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
Slide 22: Appendix
TMOS Appendix
Slide 23: Regulatory Summary
Regulatory Summary Effective Date of Authorized Requested Date of Last Rate Operating Operating Rate Base Requested Authorized Requested Authorized Requested Authorized Requested Last Rate Filing Income Income $ millions Rate Base Rate of Rate of Return on Return on Debt/ Debt/ Meters at Jurisdictio
Slide 24: Regulatory Summary (continued)
Regulatory Summary (continued) Date of Authorized Requested Effective Last Rate Operating Operating Rate Base Requested Authorized Requested Authorized Requested Authorized Requested Date of Last Filing Income Income $ millions Rate Base Rate of Rate of Return on Return on Debt/ Debt/ Meters at Juri