The operator welcomes everyone to the Atmos Energy Corporation Fiscal 2024 Second Quarter Earnings Conference Call and introduces the speakers, Dan Meziere, Vice President of Investor Relations and Treasurer, Kevin Akers, President and CEO, and Chris Forsythe, Senior Vice President and Chief Financial Officer. Dan Meziere outlines the agenda and reminds listeners that some information may contain forward-looking statements. Kevin Akers reports the fiscal '24 net income and updated earnings per share guidance. He credits the success to the hard work of Atmos Energy's 5,000 employees in modernizing their natural gas systems while providing safe and reliable service to 3.4 million customers in eight states.

The company has experienced strong customer growth in the quarter, driven by favorable employment and housing trends in Texas. They have added over 56,000 new customers, with a significant portion located in Texas. The state's new-home starts and job growth have also contributed to the company's success. Additionally, they have added 11 new industrial customers and 900 commercial customers in the second quarter. The company is also working on projects to enhance the safety, reliability, and supply diversification of their system.

The third phase of the project will replace existing pipelines and bring supply from the Haynesville and Cotton Valley shale places to the DFW Metroplex. The project is expected to be completed by the end of the year. Another project is underway to provide additional pipeline capacity to transport gas from the Bethel storage facility to the DFW Metroplex and surrounding areas. During the second quarter, customer satisfaction remained high and the company received recognition for its customer service and corporate responsibility. Atmos Energy was also named on Forbes' list of America's best-midsized employers for the fourth consecutive year.

The company's core values and focus on safety, as well as positive financial performance, were highlighted in a recent call. Earnings per share and operating income increased, driven by rate increases and customer growth. O&M expenses decreased due to a one-time adjustment, and the company also benefited from a legislative tax change. The company has implemented regulatory outcomes and has more in progress, with a significant amount expected to be implemented in the next fiscal year.

The company's balance sheet and financial position are strong, with 61% equity capitalization and no short-term debt. They have increased their available liquidity through credit facilities and have registered a new $1 billion ATM program. Their fiscal year-to-date performance has led them to increase their earnings per share guidance for fiscal '24 and they expect to continue growing earnings per share for the 22nd consecutive year. The updated guidance includes one-time items, but the company expects 6-8% earnings per share growth for fiscal '25.

The winter heating season is over and 70% of distribution segment revenue has been recognized. Regulatory filings for fiscal '24 are completed, giving better visibility into future revenues. Higher customer growth and consumption are expected for the fiscal year. O&M range has been increased to account for higher expenses, including compliance work and maintenance. Third and fourth quarter O&M is expected to be higher than the previous year. $7 million will be added to amortization expense after approval in the APT case, but this will not impact operating income.

The company has increased its capital spending guidance and identified additional system fortifications that will be completed before the next winter heating season. The robust housing market in North Texas has also contributed to the increased spending. The company has clarified their guidance and will remove the impact of the Texas property tax adjustment and Mississippi bad debt adjustment when initiating fiscal '25 guidance. They anticipate 6% to 8% growth off of the adjusted earnings per share amount.

The speaker is discussing the changes in guidance for the company, specifically in regards to property taxes in Texas and bad debt expenses in Mississippi. They clarify that the changes are due to final property tax valuations and a one-time event related to regulatory changes. They also mention that the changes will not impact future P&L, but will affect prior year periods.

The company will update their fiscal '25 guidance later in the year to reflect trends in spreads, customer growth, and mortgage interest rates. The CapEx guidance has been increased to $200 million, with negative spreads currently being driven by maintenance on various pipelines. These spreads are expected to improve in the summer.

The speaker asks for clarification on the increase in CapEx guide for 2024 and the reasons behind it. The response is that the increase is due to safety and reliability investments, as well as identified projects to be completed before the heating season. The team will continue to evaluate and identify safety projects for future updates. The call is then concluded.

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