Atmos Energy Corporation

Greetings and welcome to the Atmos Energy third quarter earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Jennifer Hills, Vice President of Investor Relations. Thank you. You may begin.

Thank you, Diego. Good morning, everyone. This is Jennifer Hills, Vice President, Investor Relations, and thank you for joining us. This morning, I'm joined by Mike Hafner, President and CEO, Kevin Akers, Executive Vice President, Chris Forsythe, Senior Vice President and CFO, and Kim Coughlin, Executive Chairman. This call is being webcast live on the Internet, and our earnings release and conference call slide presentation are available on our website at atmosenergy.com under Company and Investor Relations. As we review these financial results and discuss future expectations, please keep in mind that some of our discussion might contain forward-looking statements within the meaning of the Securities Act and the Securities Exchange Act. Our forward-looking statements and projections could differ materially from actual results. The factors that could cause such material differences are outlined on slide 27 and are more fully described in our SEC filings. Our first speaker is Mike Hagener, President and CEO of Atmos Energy. Mike.

Thank you, Jennifer, and good morning, everyone. And happy birthday, Jennifer. In investor relations, nothing says happy birthday more than hosting an earnings call, so congratulations. Yesterday we reported our fiscal 2019 third quarter results, and I'm pleased to report that we're on track to meet our fiscal 2019 earnings per share guidance. of $4.25 to $4.35, and increased earnings per share for the 17th consecutive year. Capital spending increased 10% during the first nine months of the fiscal year, which demonstrates our commitment to modernizing our system. Approximately 87% of this spending was focused on safety and reliability investment, as we continue to execute a risk-based capital spending program to modernize our distribution and transmission systems. For June 30, 2019, we completed $2.1 billion of financing, which has supported our fiscal 2019 capital spending, further strengthened our balance sheet, lowered the cost of financing for our customers, and leaves us very well positioned to maintain our credit ratings for the long term. We continue to invest in technology, our people, and processes to achieve operating excellence and scale our capabilities to sustain our safety-driven strategies. With the team we have in place, we're extremely well positioned for continued success into the future. Yesterday we announced that I'll step down from my role as President and Chief Executive Officer effective September 30th to focus on my health. I'll remain with the company through the end of the calendar year to support the transition, and I'll retire from the company and plan to step down for the bullet effective January 1, 2020. Also announced yesterday is that Kevin Akers, currently Executive Vice President, has been appointed by the board to succeed me as president and CEO and become a member of the board effective October 1 of this year. Kim Coughlin will continue as executive chairman. This was a very difficult decision for me, but it's the right decision for the company, for me, and for my family. I've been facing a recent health issue that to this point has eluded a definitive diagnosis. I'm extremely optimistic this will resolve itself favorably in the long run, However, it's requiring an increasing amount of my time, and it necessitates me pulling back on my commitment. This decision was made much, much easier for me by the fact that Kevin Akers is ready to assume the role of President and Chief Executive Officer. Kevin's a proven leader with broad company and industry experience. A majority of his nearly 29 years with the company have been in senior leadership positions. He has deep operating experience, having previously served for over nine years as president of our Kentucky Mid-States Division, five years as president of our Mississippi Division, and more recently took on responsibility for the company's pipeline and storage operations. For the past several years, Kevin also oversaw our pipeline safety, supply chain, and customer service functions. And he's been instrumental in driving the process improvement and technology initiatives that have enabled the company to scale its operations to sustain our success. Many of you already know Kevin from our analyst days the past two years, as well as the AGA Financial Forum and other investor conferences this year. Kevin is surrounded by a very seasoned senior leadership team. Chris and the rest of our management committee will continue in their current roles. They've worked closely together for many, many years, and even prior to being on the management committee. Not only are they respected colleagues, but they're also friends. and Kevin has the full support of our 4,700 employees. One of our board's most important responsibilities is succession planning, and they've done that masterfully over our 36 years as an independent public company. This succession plan has been in place for several years, and just as with prior transitions from our founder, Charlie Vaughn, to Bob Best, to Kim Coughlin, to me, the transition to Kevin will be completely seamless. As I mentioned earlier, Kim will continue in the role of executive chairman. I'll be forever grateful to him as a great leader, as a mentor, and a friend. His continued involvement in the company as chairman, as well as advisor to Kevin and the rest of the management committee, will provide further assurance of the company's continued success. And lastly, before I turn the call over to Chris for the financial update, I'd like to thank the investors and analysts I've had the distinct pleasure to get to know over the past four years. Your support and investment of time and capital has been so critical to the success of our safety investment strategy. Your insights and challenging questions have made us a better company and have made me a better leader. I'd also like to thank our 4,700 employees for their continued outstanding efforts to improve every day to deliver safe, reliable, affordable, and exceptional natural gas service to the 3.3 million customers we serve in over 1,400 communities and our eight-state footprint. They come to work every single day focused on safety, while providing excellent customer service and executing our capital spending program focused on modernizing our system. It's been my greatest honor to serve alongside them for the past 11 years. They are the reason that Atmos Energy will continue to be successful for the long term.