Atmos Energy's Strategy for Sustained Growth

Recent Financial Performance

Atmos Energy's recent financial performance has been driven by effective capital spending, timely investment recovery, and strong market access. The company raised its fiscal '24 earnings per share guidance, reflecting robust performance. Key contributors include increased operating income from regulatory outcomes and growth in residential and industrial segments.

"The execution of our capital spending program, the ability to recover these investments timely and our ability to access the capital markets to satisfy our financing needs are the primary drivers that affect our financial performance." --- (ATO, sec filing, 2024/Q2)

"Our fiscal year-to-date performance gives us confidence to increase our fiscal '24 earnings per share guidance from a range of $6.45 to $6.65 to a new range of $6.70 to $6.80, which leaves us well positioned to grow earnings per share for the 22nd consecutive year." --- (ATO, earning call, 2024/Q2)

"Additionally, strong through system revenues of APT, particularly during the third fiscal quarter, contribute to our performance. Regulatory outcomes in both of our segments increased operating income by $238 million and residential customer growth and rising industrial load and our distribution segment increased operating income by an additional $18 million." --- (ATO, earning call, 2024/Q3)

Infrastructure Investments

Atmos Energy allocates over 82% of its capital spending to enhance infrastructure safety and reliability, modernizing systems to improve efficiency and reduce emissions. These investments are crucial for delivering affordable energy and achieving sustained growth.

"🚧 Keeping infrastructure in top shape is crucial. We allocate more than 82% of our capital spending to enhance the safety and reliability of our distribution and transportation systems, delivering efficient and affordable energy to customers! #NPWW #InvestingInInfrastructure https://t.co/EGNOMFER1f" --- (ATO, Twitter, 2024/05/21)

"April. The request covers significant infrastructure investments to comply with federal safety regulations, enhance the customer experience and provide safe, reliable natural gas service." --- (DUK, earning call, 2024/Q1)

"As we outlined in February, our capital plan includes $14.3 billion in infrastructure improvements from 2024 to 2027." --- (PPL, earning call, 2024/Q1)

"As part of our vision to be the safest provider of natural gas services, we are modernizing our business and infrastructure while continuing to invest in safety, innovation, environmental sustainability and our communities." --- (ATO, press release, 2024/07/09)

"Atmos Energy’s continuous system modernization efforts improve the safety and reliability of our infrastructure, reduce methane emissions, and improve our customer service and efficiency." --- (ATO, twitter, 2024/04/25)

Customer Growth and Retention Strategies

Atmos Energy's customer growth is bolstered by favorable employment trends and a strong housing market in Texas, with robust residential and commercial customer additions, including over 900 new commercial connections in Q2 and more than 2,000 year-to-date.

"For the quarter, we continue to experience robust customer growth, driven by continuing favorable employment trends in Texas, along with a strong new housing market in the North Texas area." --- (ATO, earning call, 2024/Q2)

"Commercial customer growth remained solid as well with over 900 customers connecting to the system during the second quarter and over 2,000 customers connecting to the system fiscal year-to-date." --- (ATO, earning call, 2024/Q2)

Sustainability Initiatives

Atmos Energy emphasizes operational sustainability and actively participates in discussions on environmental sustainability, such as sponsoring EarthX 2024 and engaging in panels on sustainable affordable housing.

"See how we maintain operational sustainability and more at https://t.co/BWQ3yT0F8p. https://t.co/2le7zIkyna" --- (ATO, Twitter, 2024/04/26)

"Atmos Energy is a proud sponsor of @earthxorg 2024, where our very own Rob Leivo joined a panel of thought leaders to discuss environmental sustainability in affordable housing. 🌍#EarthDay #EarthX2024 #FuelingOurEnergyFuture https://t.co/fFSXN97edY" --- (ATO, Twitter, 2024/04/23)

Competitive Positioning and Market Trends

Atmos Energy anticipates higher throughput revenues and market spreads, driven by competitive factors and economic conditions. Future guidance will reflect customer growth and mortgage interest rates. The company is also focusing on compliance, maintenance, and system monitoring, while seeking opportunities to enhance their strategy, positioning them competitively in the market.

"However, that trend was not as pronounced as we had anticipated. Finally, we are anticipating higher throughput revenues at APT net of the Rider-Rove benchmark as spreads are expected to remain higher than we had originally anticipated." --- (ATO, earning call, 2024/Q2)

"The primary factors that impact the results of this segment are our ability to earn our authorized rates of return, competitive factors in the energy industry and economic conditions in our service areas." --- (ATO, sec filing, 2024/Q2)

"Yes. And going-forward in terms of trends, we will -- we will update our fiscal '25 guidance here in the fall and we'll see what happens this summer with spreads and with customer growth, mortgage interest rates and all that will be fully reflected in our '25 guidance, which we will launch later this fiscal year -- or later this calendar year." --- (ATO, earning call, 2024/Q2)

"So all sort of things. And then looking for opportunities as we move forward to enhance those or pull things forward when we had the ability to do that." --- (ATO, earning call, 2024/Q3)

"expected, O&M in the third fiscal quarter trended higher than the prior-year quarter, and we anticipate O&M spending in the fourth fiscal quarter of trend higher as well, has continued to focus our spending on compliance, maintenance and system monitoring." --- (ATO, earning call, 2024/Q3)