The Atmos Energy Corporation Fiscal Third Quarter Earnings Conference Call began with the conference operator Aaron welcoming everyone to the call. Dan Meziere and Chris Forsythe, President and Chief Executive Officer and Senior Vice President and Chief Financial Officer respectively, were present to discuss the company's financial results. The company reported diluted earnings per share of $5.33 compared to $5.12 in the prior year period. The financial results were in line with expectations and were driven by three key themes.

Regulatory outcomes in both segments increased operating income by $204 million and higher consumption, residential customer growth and rising industrial load in the distribution segment increased operating income by an additional $27 million. These increases were partially offset by a $70 million increase in consolidated O&M spending, largely due to higher labor costs for service orders and increased collection activities. Capital spending increased 21% to $2.1 billion, primarily for safety and reliability projects.

Atmos Energy has increased spending in their distribution segment due to higher safety reliability spending and customer growth. They have implemented $263 million in annualized regulatory outcomes and currently have an additional $263 million in progress. Their financial position remains strong with an equity capitalization of 61.8%, approximately $3.1 billion of liquidity, and a $95 million securitization process in Kansas. As a result, they have reaffirmed their fiscal '23 guidance in the range of $6 to $6.10 and expect capital spending to approximate $2.8 billion.

This company is committed to providing reliable natural gas service to its customers across eight states, and is experiencing strong customer growth due to robust employment trends in Texas. Dallas-Fort Worth Metroplex is projected to add one million people by 2028, and industrial demand for natural gas in the service territory is strong. The company has also helped over 55,000 customers receive $23 million in funding assistance.

The company is focusing on long-term sustainability and executing their investment, regulatory, and financing strategies to be successful in the upcoming fiscal year 2023. They are also working to derisk fiscal 2024 by developing a five-year plan and looking for opportunities to reduce costs such as line location and locking in longer service contracts with third parties.

Kevin Akers and Chris Forsythe answer Richard Sunderland's questions about stakeholder engagement, the timing for settlement discussions, and the ability to reach a settlement in the APT rate case. Akers states that they are on track with the procedural schedule and that they are still answering questions. Forsythe adds that they anticipate some inflationary costs and growth in the O&M line locating for the upcoming year.

Chris Forsythe and Kevin Akers discuss the difficulty in predicting the timing of expenses related to operations and maintenance due to the availability of contractors and the needs of the system. They also mention that a lot of their expenses are related to customer contact centers and disconnection activities, which can be difficult to predict. They manage their guidance to a full fiscal year in order to meet their earnings per share targets.

Ryan Levine asked Kevin Akers and Chris Forsythe about the seasonality of costs and the effective tax rate. Chris explained that the effective tax rate was heavily influenced by the refunds of excess deferred tax liabilities from the TCJA, and that it should increase as those taxes wind down over the next couple of years.

The call has concluded and a replay of the call is available on the Atmos Energy website through September 30. All participants are thanked for joining and are now able to disconnect.

This summary was generated with AI and may contain some inaccuracies.