Atmos Energy Corporation

Hello, and welcome to the ATO Q2 2021 conference call and webcast. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Dan Mazur, Vice President of Investor Relations and Treasurer. Please go ahead, sir. Thank you, Kevin.

Good morning, everyone, and thank you for joining us today. With me this morning are Kevin Akers, President and Chief Executive Officer, and Chris Forsyth, Senior Vice President and Chief Financial Officer. Our earnings release and conference call slide presentation, which we will reference in our prepared remarks, are available at atmosenergy.com under the Investor Relations tab. Today's presentation also includes references to non-GAAP financial measures. you should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of non-GAAP measures to the closest GAAP financial measure. 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 29 and more fully described in our SEC filings. With that, I will turn the call over to our President and CEO, Kevin Akers. Kevin?

Thank you, Dan, and good morning, everyone. We appreciate you joining us today and your continued interest in Atmos Energy. During this quarter, we continue to successfully execute our proven investment strategy of operating safely and reliably while we modernize our natural gas distribution, transmission, and storage systems. This strategy, along with the exceptional dedication and effort of all 4,700 employees at Atlas Energy, continue to benefit our customers in the form of safe and reliable natural gas service. This was clear during winter storm Uri, as the modernization of our systems, especially over the last 10 years, provided the reliability necessary to meet the human needs requirements of our customers. I want to take this opportunity to highlight and thank our gas supply and gas control teams and the many operations, transmission, and underground storage employees that dedicated countless hours to keeping natural gas safely flowing during winter storm Uri. The winter storm certainly highlighted the importance that reliable natural gas systems, diversified supply portfolios, System versatility along with underground storage capacity bring to delivering safe and reliable natural gas service. As an example of system modernization and reliability, I want to highlight our third Atmos pipeline storage salt dome project. This project, nearing 50% completion, will provide an additional five to six BCF of cavern storage capacity when in full service late 22 or early 23. This new cavern will provide us the continued capability to meet the growing demand in the Dallas-Fort Worth Metroplex, as well as allow us to safely perform the required regulatory compliance work while meeting the current needs of our customers. Additionally, APT has started our Line S2 replacement project, that will create an enhanced supply hub to the east of the growing Dallas-Fort Worth metroplex and bring additional supply in from the Haynesville and Cotton Valley shale plays. We anticipate this 36-inch, 90-mile project to be completed in three phases, with the final phase being complete in 2023. The storm once again highlighted the strength of our balance sheet After incurring unprecedented gas costs during the storm, we were able to quickly finance these purchases with the issuance of $2.2 billion in long-term debt for an all-in debt cost of 83.4 basis points. This financing is structured to provide us flexibility as we work with our regulators to recover these costs. In Kansas and Texas, where we incurred most of our extraordinary gas costs, New legislation was introduced to minimize the impact on the customer bill by extending the recovery periods for these unprecedented costs through securitization. The legislation in Kansas was signed into law on April 9th and allows utilities to file for the permission from the commission to securitize these costs for a period of up to 32 years. In Texas, the legislature is considering a statewide securitization program. Under this program, natural gas utilities would have the opportunity to apply to the Railroad Commission to have their extraordinary costs securitized by the Texas Public Financing Authority and to use the net proceeds to pay off the debt they incurred to finance these natural gas purchases. This legislation has been passed by the House and is currently being considered in the Senate. In our remaining states, we anticipate recovering gas costs through our normal purchase gas cost mechanisms over a 12 to 18 month timeframe. I am very proud of all 4,700 Atmos Energy employees and the work they do every day to provide safe and reliable natural gas service to our 1,400 communities and 3.2 million customers. Their dedication and commitment have Atmos Energy well positioned for success in the second half of the fiscal year. I will now turn the call over to Chris for an update on our financial performance.