Atmos Energy Corporation

Good morning, ladies and gentlemen, and welcome to the Atmos Energy Corporation fiscal 2023 first quarter earnings conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, February the 8th, 2023. And I would now like to turn the conference over to Dan Mazur, vice president of investor relations and treasurer. Please go ahead, sir.

Thank you, Michelle. Good morning, everyone. And thank you for joining our fiscal 2023 first quarter earnings call. With me today are Kevin Akers, president and chief executive officer, and Chris Forsythe, 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. 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 24 and more fully described in our SEC filings. With that, I will now turn the call over to Kevin Akers, our president and CEO. Kevin?

Thank you, Dan, and good morning, everyone. We appreciate you joining us and your interest in Atmos Energy today. I want to begin today's call by thanking every one of our 4,800 Atmos Energy employees across all of our eight states for their exceptional effort and dedication to serving our customers under very challenging weather conditions during winter storms Elliot and Mara. Thank you for all that you do for our customers and our communities every day. You are truly the heart and soul of Atmos Energy. Our first quarter results reflect that effort, dedication, and focus as we continue modernizing our natural gas distribution, transmission, and storage systems on our journey to be the safest provider of natural gas services. Yesterday, we reported fiscal 2023 first quarter net income of $272 million, or $1.91 per diluted share. And then we reaffirmed our fiscal 2023 earnings per share guidance in the range of $5.90 to $6.10. Our Atmos pipeline Texas division achieved several project milestones during the first quarter. Our APT team completed filling the cushion gas requirements at the Bethel 1B cavern and working gas is currently being injected and debrining operations continue with a targeted completion date of April of this year. This third cavern provides additional support to APT's operations as well as the local distribution companies behind APT's system and adds over six BCF of new working gas capacity. Additionally, we completed the final portion of our 137-mile, 36-inch Line X integrity replacement project, as well as completed phase two of our three-phase Line S2 project. Line S2 brings supply from the Hainesville and Cotton Valley shale plates to the east side of the growing Dallas-Fort Worth Metroplex. This second phase replaced 17 miles of 14-inch pipeline with 36-inch pipeline. The final phase of this project is anticipated to be in service late calendar 2024. These projects enhance the safety, reliability, versatility, and supply diversification of our system and support the continued growth we are seeing in the local distribution companies behind APT systems. According to the Texas Workforce Commission, the state continued a 14-month streak of record employment in December and added 650,000 jobs for the 12 months ending December. This strong employment trend continues to drive the growth in our Mid-Tex and West Texas divisions, where approximately 47,000 of our nearly 64,000 new customers were added for the same 12 months ending December period. Additionally, industrial demand for natural gas in our service territory remains strong. During the first quarter, we added 12 new industrial customers with an anticipated annual load of approximately 9 BCF once they are fully operational. The largest of these new industrial customers is anticipated to use nearly 6 BCF annually. Our procurement team continues to do an excellent job sourcing the materials needed to support our capital investment as we continue modernizing our natural gas distribution, transmission, and storage systems. We also maintain about six months of inventory for our distribution and transmission needs. And as we said before, we have ordered all of our anticipated steel pipe needs for FY2023. Our customer advocacy team and customer support agents continue their outreach efforts to energy assistance agencies and to our customers during the first quarter. Through their work, the team helped nearly 17,000 customers receive over $6 million in funding assistance. As a reminder, during fiscal 2022, our energy assistance teams helped nearly 67,000 customers receive approximately $34 million of funding to help with their monthly bills. As you will hear from Chris today, our fiscal 2023 financing costs are known. We have hedged a significant portion of our financing needs beyond fiscal year 2023, and our liquidity and balance sheet remains strong. Atmos Energy is well positioned to continue delivering safe, reliable, efficient, and abundant natural gas to homes, businesses, and industries to fuel our energy needs now and in the future. I will now turn the call over to Chris for his update. Chris?