Atmos Energy Corporation (NYSE: ATO) today reported consolidated
results for its first fiscal quarter ended December 31, 2021.
Highlights
- Earnings per diluted share was $1.86 for the three months ended
December 31, 2021.
- Consolidated net income was $249.2 million for the three months
ended December 31, 2021.
- Capital expenditures totaled $684.2 million for the three
months ended December 31, 2021, with approximately 88 percent of
capital spending related to system safety and reliability
investments.
Outlook
- Earnings per diluted share for fiscal 2022 is expected to be in
the previously announced range of $5.40 to $5.60.
- Capital expenditures are expected to be in the range of $2.4
billion to $2.5 billion in fiscal 2022.
- The company's Board of Directors has declared a quarterly
dividend of $0.68 per common share. The indicated annual dividend
for fiscal 2022 is $2.72, which represents an 8.8% increase over
fiscal 2021.
"Our first quarter performance reflects the successful execution
of our strategy to modernize our natural gas distribution,
transmission, and storage systems as we continue our journey to be
the safest provider of natural gas services," said Kevin Akers,
President and Chief Executive Officer of Atmos Energy. "Our
employees’ dedication, focus and effort positions us well for
continued success in fiscal 2022."
Results for the Three Months Ended December
31, 2021
Consolidated operating income decreased $22.9 million to $275.9
million for the three months ended December 31, 2021, compared to
$298.8 million in the prior year. The refund of excess deferred
income taxes reduced operating income by $38.8 million year over
year, which was substantially offset by a corresponding decrease in
income tax expense. Excluding the impact of these refunds,
operating income increased $15.9 million due to rate outcomes in
both segments and customer growth in our distribution segment,
partially offset by lower thru-system revenue in our pipeline and
storage segment and increased system maintenance, depreciation and
property tax expenses.
Distribution operating income decreased $19.1 million to $190.5
million for the three months ended December 31, 2021, compared with
$209.6 million in the prior year period. Refunds of excess deferred
taxes reduced operating income by $28.8 million year over year. Key
operating drivers for this segment include a $32.2 million increase
in rates, and customer growth of $4.3 million partially offset by a
$14.5 million increase in operation and maintenance expense driven
primarily by higher pipeline maintenance costs and other
administrative costs and a $10.1 million increase in depreciation
and property tax expenses associated with increased capital
investments.
Pipeline and storage operating income decreased $3.9 million to
$85.4 million for the three months ended December 31, 2021,
compared with $89.3 million in the prior year. Refunds of excess
deferred income taxes decreased operating income by $10.0 million.
Key operating drivers for this segment include a $14.5 million
increase from our GRIP filings approved in fiscal 2021 partially
offset by a $5.8 million increase in system maintenance, a $3.1
million increase in depreciation and property tax expenses due to
increased capital investments and a $2.5 million decrease in
through system revenues.
Capital expenditures increased $227.4 million to $684.2 million
for the three months ended December 31, 2021, compared with $456.8
million in the prior year, due to continued system modernization
spending.
For the three months ended December 31, 2021, the company
generated operating cash flow of $61.8 million, a $95.2 million
decrease compared with the three months ended December 31, 2020.
The year-over-year decrease reflects working capital changes,
primarily due to the timing of gas cost recoveries under our
purchase gas cost mechanisms partially offset by the positive
effects of successful rate case outcomes achieved in fiscal
2021.
Our equity capitalization ratio at December 31, 2021 was 51.0%,
compared with 51.9% at September 30, 2021, due to the issuance of
$600 million of 2.85% senior notes in October 2021, partially
offset by $261.9 million in equity issuances under our forward
equity agreements. Excluding the $2.2 billion of incremental Winter
Storm Uri financing issued in fiscal 2021, our equity
capitalization ratio was 59.0% at December 31, 2021.
Conference Call to be Webcast February 9,
2022
Atmos Energy will host a conference call with financial analysts
to discuss the fiscal 2022 first quarter financial results on
Wednesday, February 9, 2022, at 9:00 a.m. Eastern Time. The
domestic telephone number is 877-407-3088 and the international
telephone number is 201-389-0927. Kevin Akers, President and Chief
Executive Officer, and Chris Forsythe, Senior Vice President and
Chief Financial Officer, will participate in the conference call.
The conference call will be webcast live on the Atmos Energy
website at www.atmosenergy.com. A playback of the call will be
available on the website later that day.
Forward-Looking Statements
The matters discussed in this news release 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
historical fact included in this news release are forward-looking
statements made in good faith by the company and are intended to
qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. When used in this
news release or any of the company’s other documents or oral
presentations, the words “anticipate”, “believe”, “estimate”,
“expect”, “forecast”, “goal”, “intend”, “objective”, “plan”,
“projection”, “seek”, “strategy” or similar words are intended to
identify forward-looking statements. Such forward-looking
statements are subject to risks and uncertainties that could cause
actual results to differ materially from those discussed in this
presentation, including the risks relating to regulatory trends and
decisions, the company’s ability to continue to access the credit
and capital markets, and the other factors discussed in the
company’s reports filed with the Securities and Exchange
Commission. These risks and uncertainties include the following:
federal, state and local regulatory and political trends and
decisions, including the impact of rate proceedings before various
state regulatory commissions; increased federal regulatory
oversight and potential penalties; possible increased federal,
state and local regulation of the safety of our operations; the
impact of greenhouse gas emissions or other legislation or
regulations intended to address climate change; possible
significant costs and liabilities resulting from pipeline integrity
and other similar programs and related repairs; the inherent
hazards and risks involved in distributing, transporting and
storing natural gas; the availability and accessibility of
contracted gas supplies, interstate pipeline and/or storage
services; increased competition from energy suppliers and
alternative forms of energy; adverse weather conditions; the impact
of climate change; the inability to continue to hire, train and
retain operational, technical and managerial personnel; increased
dependence on technology that may hinder the Company's business if
such technologies fail; the threat of cyber-attacks or acts of
cyber-terrorism that could disrupt our business operations and
information technology systems or result in the loss or exposure of
confidential or sensitive customer, employee or Company
information; natural disasters, terrorist activities or other
events and other risks and uncertainties discussed herein, all of
which are difficult to predict and many of which are beyond our
control; the capital-intensive nature of our business; our ability
to continue to access the credit and capital markets to execute our
business strategy; market risks beyond our control affecting our
risk management activities, including commodity price volatility,
counterparty performance or creditworthiness and interest rate
risk; the concentration of our operations in Texas; the impact of
adverse economic conditions on our customers; changes in the
availability and price of natural gas; increased costs of providing
health care benefits, along with pension and postretirement health
care benefits and increased funding requirements; and the outbreak
of COVID-19 and its impact on business and economic conditions.
Accordingly, while we believe these forward-looking statements
to be reasonable, there can be no assurance that they will
approximate actual experience or that the expectations derived from
them will be realized. Further, the company undertakes no
obligation to update or revise any of our forward-looking
statements whether as a result of new information, future events or
otherwise.
About Atmos Energy
Atmos Energy Corporation, an S&P 500 company headquartered
in Dallas, is the country’s largest natural gas-only distributor.
We safely deliver reliable, affordable, efficient and abundant
natural gas to more than 3 million distribution customers in over
1,400 communities across eight states located primarily in the
South. 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. Atmos Energy manages
proprietary pipeline and storage assets, including one of the
largest intrastate natural gas pipeline systems in Texas. Find us
online at http://www.atmosenergy.com, Facebook, Twitter, Instagram
and YouTube.
This news release should be read in conjunction with the
attached unaudited financial information.
Atmos Energy Corporation
Financial Highlights
(Unaudited)
Statements of
Income
Three Months Ended December
31
(000s except per share)
2021
2020
Operating revenues
Distribution segment
$
972,422
$
876,650
Pipeline and storage segment
162,918
159,713
Intersegment eliminations
(122,554
)
(121,883
)
1,012,786
914,480
Purchased gas cost
Distribution segment
496,799
411,072
Pipeline and storage segment
(3,411
)
(1,244
)
Intersegment eliminations
(122,225
)
(121,568
)
371,163
288,260
Operation and maintenance expense
159,110
138,643
Depreciation and amortization
127,856
115,285
Taxes, other than income
78,796
73,452
Operating income
275,861
298,840
Other non-operating income
8,702
6,072
Interest charges
19,851
22,010
Income before income taxes
264,712
282,902
Income tax expense
15,503
65,224
Net income
$
249,209
$
217,678
Basic net income per share
$
1.86
$
1.71
Diluted net income per share
$
1.86
$
1.71
Cash dividends per share
$
0.680
$
0.625
Basic weighted average shares
outstanding
133,682
127,034
Diluted weighted average shares
outstanding
133,689
127,034
Three Months Ended December
31
Summary Net Income
by Segment (000s)
2021
2020
Distribution
$
179,571
$
153,692
Pipeline and storage
69,638
63,986
Net income
$
249,209
$
217,678
Atmos Energy Corporation
Financial Highlights, continued
(Unaudited)
Condensed Balance
Sheets
December 31,
September 30,
(000s)
2021
2021
Net property, plant and equipment
$
15,726,791
$
15,063,970
Cash and cash equivalents
264,005
116,723
Accounts receivable, net
514,333
342,967
Gas stored underground
220,279
178,116
Other current assets
2,275,588
2,200,909
Total current assets
3,274,205
2,838,715
Goodwill
731,257
731,257
Deferred charges and other assets
813,531
974,720
$
20,545,784
$
19,608,662
Shareholders' equity
$
8,289,545
$
7,906,889
Long-term debt
5,555,177
4,930,205
Total capitalization
13,844,722
12,837,094
Accounts payable and accrued
liabilities
398,431
423,222
Other current liabilities
626,684
686,681
Current maturities of long-term debt
2,401,377
2,400,452
Total current liabilities
3,426,492
3,510,355
Deferred income taxes
1,744,648
1,705,809
Regulatory excess deferred taxes
508,731
549,227
Deferred credits and other liabilities
1,021,191
1,006,177
$
20,545,784
$
19,608,662
Atmos Energy Corporation Financial
Highlights, continued (Unaudited)
Condensed Statements
of Cash Flows
Three Months Ended December
31
(000s)
2021
2020
Cash flows from operating
activities
Net income
$
249,209
$
217,678
Depreciation and amortization
127,856
115,285
Deferred income taxes
11,813
64,587
Other
(12,689
)
(2,976
)
Changes in other assets and
liabilities
(314,365
)
(237,505
)
Net cash provided by operating
activities
61,824
157,069
Cash flows from investing
activities
Capital expenditures
(684,180
)
(456,809
)
Debt and equity securities activities,
net
2,374
511
Other, net
2,058
2,706
Net cash used in investing activities
(679,748
)
(453,592
)
Cash flows from financing
activities
Proceeds from issuance of long-term debt,
net of premium/discount
596,142
597,390
Net proceeds from equity offering
261,943
216,002
Issuance of common stock through stock
purchase and employee retirement plans
3,918
4,007
Cash dividends paid
(90,411
)
(79,023
)
Debt issuance costs
(6,386
)
(5,062
)
Net cash provided by financing
activities
765,206
733,314
Net increase in cash and cash
equivalents
147,282
436,791
Cash and cash equivalents at beginning of
period
116,723
20,808
Cash and cash equivalents at end of
period
$
264,005
$
457,599
Three Months Ended December
31
Statistics
2021
2020
Consolidated distribution throughput (MMcf
as metered)
108,142
128,470
Consolidated pipeline and storage
transportation volumes (MMcf)
136,067
144,587
Distribution meters in service
3,412,929
3,369,622
Distribution average cost of gas
$
7.14
$
4.63
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220208006071/en/
Analysts and Media Contact: Dan Meziere (972)
855-3729
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