Breaking News Bar

Business News and Information

Atmos Energy Corporation Reports Earnings for Fiscal 2020 Second Quarter; Reaffirms Fiscal 2020 Guidance

Atmos Energy Corporation (NYSE: ATO) today reported consolidated results for its second fiscal quarter ended March 31, 2020.

Highlights

  • Earnings per diluted share of $3.42 for the six months ended March 31, 2020; $1.95 per diluted share for the second fiscal quarter
  • Consolidated net income of $418.3 million for the six months ended March 31, 2020; $239.6 million for the second fiscal quarter
  • Capital expenditures were $994.7 million for the six months ended March 31, 2020, an increase of 28 percent
  • Approximately 87 percent of capital spending related to system safety and reliability investments

Outlook

  • Although the impacts of the pandemic remain uncertain, at this time Atmos Energy is not changing guidance for fiscal 2020 earnings per diluted share of $4.58 to $4.73.
  • Capital expenditures are expected to be in the range of $1.85 billion to $1.95 billion in fiscal 2020.
  • The company's Board of Directors has declared a quarterly dividend of $0.575 per common share. The indicated annual dividend for fiscal 2020 is $2.30, which represents a 9.5% increase over fiscal 2019.

“Our second quarter and six months ended March 31, 2020, results reflect the ongoing dedication and commitment of our 4,800 employees to provide our customers safe and reliable natural gas service,” said Kevin Akers, President and Chief Executive Officer of Atmos Energy Corporation. "As we move into the remainder of our fiscal year, we are positioned to focus on the health and safety of our employees, customers and communities as we execute our proven strategy of safely operating and modernizing our natural gas distribution and transmission system."

Results for the Three Months Ended March 31, 2020

Consolidated operating income increased $33.7 million to $331.4 million for the three months ended March 31, 2020, from $297.7 million in the prior-year quarter. Positive rate case outcomes in both segments and customer growth in our distribution segment were partially offset by increased depreciation expense.

Distribution operating income increased $24.5 million to $253.5 million for the three months ended March 31, 2020, compared with $229.0 million in the prior-year quarter. The increase primarily reflects a $28.6 million increase in rates and a $4.5 million increase from customer growth, mostly in the Mid-Tex and Kentucky/Mid-States divisions, partially offset by a $2.5 million increase in employee costs and a $6.4 million increase in depreciation expense due to increased capital investments.

Pipeline and storage operating income increased $9.2 million to $77.9 million for the three months ended March 31, 2020, compared with $68.7 million in the prior-year quarter. This increase is attributable to a $12.9 million increase in rates, due to the GRIP filings approved in fiscal 2019, partially offset by a $2.8 million increase in depreciation expense due to increased capital investments.

Results for the Six Months Ended March 31, 2020

Consolidated operating income increased $50.1 million to $584.2 million for the six months ended March 31, 2020, compared to $534.1 million in the prior year, which primarily reflects positive rate outcomes and customer growth in our distribution business, partially offset by higher operation and maintenance, depreciation and property tax expenses.

Distribution operating income increased $35.4 million to $433.8 million for the six months ended March 31, 2020, compared with $398.4 million in the prior year. The increase reflects a net $56.0 million increase in rates. In addition, customer growth increased $8.5 million, mainly in our Mid-Tex division. These increases were partially offset by a decrease in consumption of $1.5 million, primarily in our Louisiana division, a $6.8 million increase in operation and maintenance expense due primarily to higher employee and information technology costs and pipeline and maintenance activities, as well as a $15.6 million increase in depreciation and property tax expenses associated with increased capital investments.

Pipeline and storage operating income increased $14.7 million to $150.4 million for the six months ended March 31, 2020, compared with $135.7 million in the prior year. This increase is primarily attributable to a $26.6 million increase in revenue from our GRIP filing approved in fiscal 2019, partially offset by a $5.3 million increase in operation and maintenance expense primarily due to well integrity costs and a $5.4 million increase in depreciation expense due to increased capital investments.

Capital expenditures increased $217.1 million to $994.7 million for the six months ended March 31, 2020, compared with $777.6 million in the prior year, due to continued spending for infrastructure replacements and enhancements.

For the six months ended March 31, 2020, the company generated operating cash flow of $633.8 million, a $72.9 million increase compared with the six months ended March 31, 2019. The year-over-year increase reflects the positive cash effects of successful rate case outcomes achieved in fiscal 2019 and working capital changes, primarily as a result of the timing of gas cost recoveries under our purchase gas cost mechanisms.

Our equity capitalization ratio at March 31, 2020 was 58.2%, compared with 59.0% at September 30, 2019. The decrease primarily reflects the effects of higher short-term debt balances as of March 31, 2020 and long-term debt issuances in October 2019.

Conference Call to be Webcast May 7, 2020

Atmos Energy will host a conference call with financial analysts to discuss the fiscal 2020 second quarter financial results on Thursday, May 7, 2020, at 10:00 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 factors include the following: the outbreak of COVID-19 and its impact on business and economic conditions; 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; 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 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; 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; increased costs of providing health care benefits, along with pension and postretirement health care benefits and increased funding requirements; the inability to continue to hire, train and retain operational, technical and managerial personnel; the impact of climate change; the impact of greenhouse gas emissions or other legislation or regulations intended to address climate change; 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; and natural disasters, terrorist activities or other significant events, all of which are difficult to predict and many of which are beyond our control.

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 is the nation’s largest fully regulated, natural gas-only distributor of safe, clean, efficient and affordable energy. As part of our vision to be the safest provider of natural gas services, we are modernizing our business and our infrastructure while continuing to invest in safety, innovation, environmental sustainability and our communities. An S&P 500 company headquartered in Dallas, Atmos Energy serves more than 3 million distribution customers in over 1,400 communities across eight states and 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 March 31

(000s except per share)

2020

2019

Operating revenues

Distribution segment

$

933,005

$

1,057,889

Pipeline and storage segment

146,237

135,650

Intersegment eliminations

(101,577

)

(98,894

)

977,665

1,094,645

Purchased gas cost

Distribution segment

418,935

570,348

Pipeline and storage segment

202

(90

)

Intersegment eliminations

(101,254

)

(98,582

)

317,883

471,676

Operation and maintenance expense

147,824

149,427

Depreciation and amortization

105,916

96,772

Taxes, other than income

74,604

79,093

Operating income

331,438

297,677

Other non-operating income (expense)

(2,989

)

4,232

Interest charges

22,171

26,949

Income before income taxes

306,278

274,960

Income tax expense

66,632

60,072

Net income

$

239,646

$

214,888

Basic net income per share

$

1.95

$

1.83

Diluted net income per share

$

1.95

$

1.82

Cash dividends per share

$

0.575

$

0.525

Basic weighted average shares outstanding

122,916

117,581

Diluted weighted average shares outstanding

122,997

117,756

Three Months Ended March 31

Summary Net Income by Segment (000s)

2020

2019

Distribution

$

187,064

$

172,193

Pipeline and storage

52,582

42,695

Net income

$

239,646

$

214,888

Atmos Energy Corporation

Financial Highlights, continued (Unaudited)

Statements of Income

Six Months Ended March 31

(000s except per share)

2020

2019

Operating revenues

Distribution segment

$

1,761,509

$

1,896,724

Pipeline and storage segment

294,413

270,120

Intersegment eliminations

(202,694

)

(194,417

)

1,853,228

1,972,427

Purchased gas cost

Distribution segment

816,493

1,008,080

Pipeline and storage segment

301

(448

)

Intersegment eliminations

(202,043

)

(193,791

)

614,751

813,841

Operation and maintenance expense

300,069

288,027

Depreciation and amortization

210,978

192,837

Taxes, other than income

143,211

143,581

Operating income

584,219

534,141

Other non-operating income (expense)

1,898

(3,491

)

Interest charges

49,400

54,798

Income before income taxes

536,717

475,852

Income tax expense

118,398

103,318

Net income

$

418,319

$

372,534

Basic net income per share

$

3.43

$

3.22

Diluted net income per share

$

3.42

$

3.21

Cash dividends per share

$

1.15

$

1.05

Basic weighted average shares outstanding

122,015

115,690

Diluted weighted average shares outstanding

122,179

115,794

Six Months Ended March 31

Summary Net Income by Segment (000s)

2020

2019

Distribution

$

316,821

$

286,578

Pipeline and storage

101,498

85,956

Net income

$

418,319

$

372,534

Atmos Energy Corporation

Financial Highlights, continued (Unaudited)

 

Condensed Balance Sheets

March 31,

September 30,

(000s)

2020

2019

Net property, plant and equipment

$

12,548,240

$

11,787,669

Cash and cash equivalents

320,099

24,550

Accounts receivable, net

377,817

230,571

Gas stored underground

68,061

130,138

Other current assets

63,584

72,772

Total current assets

829,561

458,031

Goodwill

730,706

730,706

Deferred charges and other assets

607,891

391,213

$

14,716,398

$

13,367,619

Shareholders' equity

$

6,304,415

$

5,750,223

Long-term debt

4,328,866

3,529,452

Total capitalization

10,633,281

9,279,675

Accounts payable and accrued liabilities

190,088

265,024

Other current liabilities

543,248

479,501

Short-term debt

199,923

464,915

Current maturities of long-term debt

131

Total current liabilities

933,390

1,209,440

Deferred income taxes

1,421,779

1,300,015

Regulatory excess deferred taxes

694,433

705,101

Deferred credits and other liabilities

1,033,515

873,388

$

14,716,398

$

13,367,619

Atmos Energy Corporation

Financial Highlights, continued (Unaudited)

 

Condensed Statements of Cash Flows

Six Months Ended March 31

(000s)

2020

2019

Cash flows from operating activities

Net income

$

418,319

$

372,534

Depreciation and amortization

210,978

192,837

Deferred income taxes

110,664

96,885

Other

7,144

5,334

Changes in assets and liabilities

(113,330

)

(106,761

)

Net cash provided by operating activities

633,775

560,829

Cash flows from investing activities

Capital expenditures

(994,737

)

(777,586

)

Proceeds from the sale of discontinued operations

4,000

Debt and equity securities activities, net

(1,131

)

777

Other, net

4,631

4,388

Net cash used in investing activities

(991,237

)

(768,421

)

Cash flows from financing activities

Net decrease in short-term debt

(264,992

)

(575,780

)

Proceeds from issuance of long-term debt, net of premium/discount

799,450

1,045,221

Net proceeds from equity offering

258,047

494,085

Issuance of common stock through stock purchase and employee retirement plans

8,321

10,344

Settlement of interest rate swaps

(90,141

)

Repayment of long-term debt

(450,000

)

Cash dividends paid

(140,077

)

(120,328

)

Debt issuance costs

(7,738

)

(11,227

)

Net cash provided by financing activities

653,011

302,174

Net increase in cash and cash equivalents

295,549

94,582

Cash and cash equivalents at beginning of period

24,550

13,771

Cash and cash equivalents at end of period

$

320,099

$

108,353

Three Months Ended March 31

Six Months Ended March 31

Statistics

2020

2019

2020

2019

Consolidated distribution throughput (MMcf as metered)

163,870

185,432

303,428

328,178

Consolidated pipeline and storage transportation volumes (MMcf)

143,465

165,369

299,994

335,896

Distribution meters in service

3,312,616

3,279,005

3,312,616

3,279,005

Distribution average cost of gas

$

3.51

$

4.10

$

3.74

$

4.18

Contacts:

Analysts and Media Contact:
Dan Meziere (972) 855-3729

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
bottom clear