Atmos Energy Corporation · NYSE:ATO
Atmos Energy — Q1 2023 Earnings Presentation
24 slides from Atmos Energy's earnings presentation, Feb 8, 2023
Slide 1: Analyst Call to Review Fiscal 2023 First Quarter Financial Results
Analyst Call to Review Fiscal 2023 First Quarter Financial Results February 8, 2023 9:00 a.m. Eastern
Slide 2: Fiscal Q1 2023 Review
= TMOS energy. Fiscal Q1 2023 Review
Slide 3: Fiscal 2023 Highlights
Q1 Fiscal 2023 Financial Performance Fiscal 2023 Highlights • Financial Performance • YTD Diluted EPS of $1.91 • $796 million in capital spending; 88% allocated to safety and reliability spending • 8.8% increase in fiscal 2023 annual dividend to $2.96 per diluted share • 39th consecutive year of ris
Slide 4: Consolidated Financial Highlights
Q1 Fiscal 2023 Financial Performance Consolidated Financial Highlights Three Months Ended December 31 Segment Net Income 2022 2021 ($millions, except EPS) Distribution $ 195 $ 179 Pipeline & Storage 77 70 Net Income $ 272 $ 249 Diluted EPS1 $ 1.91 $ 1.86 Capital Expenditures $ 795.7 $ 684.2 1. Since
Slide 5: Segment Operating Income Highlights
Q1 Fiscal 2023 Financial Performance Segment Operating Income Highlights Three Months Ended 2022 2021 Change December 31 ($millions) Distribution $ 231.8 $ 190.5 $ 41.3 Pipeline & Storage 89.4 85.4 4.0 Operating Income $ 321.2 $ 275.9 $ 45.3 Distribution Key Drivers Pipeline & Storage Key Drivers •
Slide 6: Capital Spending Highlights
Q1 Fiscal 2023 Financial Performance Capital Spending Highlights $millions Fiscal 2023 YTD CapEx Repair and replace transmission and $ 359 distribution pipelines 105 Pipeline integrity management projects 2% 73 Fortifications 10% Install & replace measurement & regulating 68 equipment 88% 61 Service
Slide 7: Strong Financial Foundation Supports Capital Spending Program
Q1 Fiscal 2023 Financial Performance Strong Financial Foundation Supports Capital Spending Program Capitalization and Liquidity Profile Liquidity Profile as of Total Capitalization1 December 31, 2022 100% ($millions) 1% $3,500 $172 $3,000 47% 45% $755 75% $2,500 $100 $2,000 $900 $3.4 billion 50% Ava
Slide 8: Financing Highlights
Q1 Fiscal 2023 Financial Performance Financing Highlights • $800 million of long-term debt financing issued • $500 million 5.75% 30-year senior notes issued in October 2022 • $300 million 5.45% 10-year senior notes issued in October 2022 • Equity needs satisfied through our ATM program • $199.8 mill
Slide 9: Manageable Debt Maturity Schedule Supports Capital Spending Program
Q1 Fiscal 2023 Financial Performance Manageable Debt Maturity Schedule Supports Capital Spending Program Weighted Average Maturity ~18.7 Years1 2 $2,200 2.864% $1,100 4.168% $950 3.73% $750 4.125% $600 $600 $500 $500 1.5% $500 4.30% 3.00% 2.625% $400 4.15% $300 5.50% 5.45% $200 $150 5.95% 6.75% $10
Slide 10: Strong Investment Grade Ratings Support Affordable Customer Bills
Q1 Fiscal 2023 Financial Performance Strong Investment Grade Ratings Support Affordable Customer Bills Strong Investment Declining Weighted Average Cost of Debt1,2 Grade Credit Ratings $7,000 5.0 Standard & 4.7 Moody’s Poor’s 4.5 4.2 $6,000 4.0 Senior Unsecured A1 A- 3.9 3.8 4.0 Commercial Paper P-1
Slide 11: Regulatory Highlights
FY 2023 Financial Performance Regulatory Highlights Approved Annualized Key Rate Activity Operating Income Increases1,2 Through February 7, 2023 • $115.2MM Completed $200 • $ 81.4MM – Mid-Tex Cities RRM • $ 12.2MM – Mississippi SRF • $ 8.6MM – Mississippi SIR $150 • $ 7.3MM – West Texas Cities RRM •
Slide 12: Financial Outlook: Fiscal 2023E Guidance
Financial Outlook Fiscal 2023E Guidance ($millions, except EPS) FY 2022 FY 20231 Distribution $ 522 $ 570 - 590 Pipeline & Storage 252 285 - 295 Total Net Income $ 774 $ 855 - 885 Average Diluted Shares 138.1 144 - 146 Diluted EPS2 $ 5.60 $ 5.90 - 6.10 Capital Spending $ 2,444 $ ~2,700 1. Changes in
Slide 13: Financial Outlook: Selected Expenses
Financial Outlook Fiscal 2023E Guidance Selected Expenses FY 2022 FY 2023E1 ($millions) O&M $ 710 $ 740 - 760 D&A $ 536 $ 600 - 610 Interest $ 103 $ 123 - 129 Income Tax $ 78 $ 105 -120 Effective Tax Rate 9.1% 11% - 13%2 1. Changes in events or other circumstances that the Company cannot currently a
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 2023E
Key Regulatory Filings – Fiscal 2023E Rate Filing Planned Timing Q1 Q2 Q3 Q4 October – December January – March April – June July – September Mid-Tex and WTX Cities – Mid-Tex and WTX Cities – Anticipate Mississippi – Anticipate Stable Rate Implemented RRM filing of $88.3MM; Colorado – Implemented SS
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 Rate Base Rate of Rate of Return on Return on Debt/Equity Income Income $millions(1
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 Rate Base Rate of Rate of Return on Return on Debt/Equity Income Income
Slide 19: Colorado - Kansas Division
Colorado - Kansas Division • Kansas: Filed System Integrity Program (SIP) on January 19, 2023 • Requested an increase in annual operating income of $0.8 million • Requested ROE: 9.10%; ROR: 7.03% • Requested capital structure: 44% debt / 56% equity • Requested rate base: $13.3 million • Colorado: Im
Slide 20: Kentucky/Mid-States Division
Kentucky/Mid-States Division • Kentucky: Implemented Annual PRP on October 2, 2022 • Authorized an annual operating income increase of $1.9 million • Authorized ROE: 10.95%; ROR: 7.75% • Authorized capital structure: 45% debt / 55% equity • Authorized rate base: $16.0 million • Subject to refund • V
Slide 21: Mid-Tex Division
Mid-Tex Division • Mid-Tex Cities: Implemented Rate Review Mechanism RRM on October 1, 2022 • Authorized an increase in annual operating income of $81.4 million • Authorized ROE: 9.80%; ROR: 7.28% • Authorized capital structure: 42% debt / 58% equity • Authorized rate base: $5.2 billion • Test year
Slide 22: Mississippi Division
Mississippi Division • Mississippi: Implemented Annual System Integrity Rider (SIR) on November 1, 2022 • Authorized an increase in annual operating income of $8.6 million • Authorized ROR: 7.53% • Authorized rate base: $390.3 million • Forward-looking components - PP&E, accumulated depreciation, ac
Slide 23: West Texas Division
West Texas Division • West Texas Cities: Implemented Rate Review Mechanism RRM on October 1, 2022 • Requested an increase in annual operating income of $7.3 million • Requested ROE: 9.80%; ROR: 7.28% • Requested capital structure: 42% debt / 58% equity • Requested rate base: $855.3 million • Test ye
Slide 24: 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