The paragraph is an introductory segment of the Atmos Energy Corporation's Fiscal 2024 Fourth Quarter Earnings Conference Call. It begins with Amy, the conference operator, introducing the event and passing the call to Dan Meziere, Vice President of Investor Relations and Treasurer. Dan thanks attendees and introduces senior company executives, including Kevin Akers and Chris Forsythe. He notes that the earnings release and presentation are available online. Dan mentions the potential for forward-looking statements to differ from actual results, referring to cautionary factors detailed in their SEC filings. Kevin Akers then acknowledges Veterans Day, expressing gratitude to veterans, including about 300 Atmos Energy employees who served. He notes that Fiscal 2024 marks the company's 40th anniversary, and emphasizes their commitment to foundational values established by their founding Chairman.

The paragraph highlights Atmos Energy's strong financial and operational performance, emphasizing its 22nd consecutive year of earnings per share growth and 40th consecutive year of dividend growth. In fiscal year 2024, the company invested over $2.9 billion in system modernization, including the replacement of pipelines and service lines, and enhancements to safety, reliability, and supply diversification. It also mentions ongoing projects and inspections, such as the Bethel Salt dome cavern, to ensure readiness for winter. The capital investments have supported economic development, with over 59,000 new customers, mainly in Texas, amid a strong housing market and record employment in the state.

In the past year ending September, employment in Texas reached new highs, with the state adding jobs at a faster rate than the national average. Significant growth was observed in both the residential and commercial sectors, with nearly 3,500 new commercial customers added, representing a 19% increase over the previous year, and 39 new industrial customers expected to use 8.4 Bcf of gas annually. Over the past five years, the company added nearly 300,000 residential and commercial customers and 225 industrial customers with a projected annual load of 63 Bcf. This highlights the critical importance of natural gas in economic development in their service areas. The company's customer service was rated highly, with a 98% satisfaction score, and substantial energy assistance funding was provided to over 57,000 customers. Overall, the company's team is celebrated for their achievements and is optimistic about future growth and investment in natural gas infrastructure.

The paragraph discusses a $24 billion five-year capital investment plan by APT to modernize and expand their natural gas infrastructure across six states with energy choice legislation. Over 80% of this investment focuses on safety and reliability. Projects include completing Line S-2 east of the DFW Metroplex and Line WA Loop to the west, as well as enhancing capacity in Central Texas. The company's strong financial position supports its role in delivering natural gas efficiently and safely to various sectors. Additionally, APT's fiscal '24 earnings per share increased by 12% compared to fiscal '23, partly due to a one-time property tax reduction in Texas and changes in bad debt expense recovery in Mississippi. Christopher Forsythe continues the call to discuss financial results and future guidance.

In fiscal '24, the company saw a 9.2% increase in earnings per share, excluding one-time items, due to successful execution of strategies. They implemented $376 million in annualized operating income increases, contributing to a total increase of over $300 million with fiscal '23 outcomes. Growth in customer base and industrial load, along with increased demand and booster activities, added to operating income. Despite negative WAHA pricing, market conditions led to better-than-expected fiscal '24 results. Operating and maintenance costs increased by $65 million, primarily due to higher employee-related costs. Capital spending rose by 5% to $2.9 billion, focusing on system safety and reliability, and increasing the rate base by 13% to $19 billion. Distribution segment spending went up due to system modernization and customer growth.

The paragraph discusses financial updates and future projections for Atmos Energy's Pipeline & Storage segment. It reports a $191 million decrease in capital spending due to timing of payments for completed work in Texas, alongside completing $1.2 billion in long-term financing. The fiscal year ended with 61% equity capitalization and $4.8 billion in available liquidity. Looking ahead, fiscal '25 earnings per share is projected to be $7.05 to $7.25, reflecting a 7.4% growth from fiscal '24, and capital spending guidance is set at approximately $3.7 billion. The Board approved an 8.1% increase in the fiscal '25 annual dividend to $3.48. The five-year plan, extended to fiscal '29, aims for earnings and dividend per share growth of 6% to 8% annually, with earnings per share expected between $9.15 and $9.55 by fiscal '29. The company plans to spend $24 billion in this period, aiming for a 13% to 15% annual rate base growth, increasing the rate base from $19 billion to $37 billion by fiscal '29. The strategy focuses on system modernization, cost recovery, and maintaining a strong balance sheet using a mix of equity and long-term debt.

The paragraph outlines the company's regulatory and revenue strategies, highlighting the implementation of approximately 20 rate filings per year without changes to Return on Equity (ROE) or regulatory mechanisms. Since the fiscal year began, they have increased annualized operating income by $149 million in their Distribution segment through rate review implementations in Texas and Mississippi, with additional filings pending. A significant rate case in West Texas, required by a 2020 settlement, seeks $40 million, while a general rate case in Kentucky aims for $34 million. Similar filings are planned for Mid Texas. They expect to complete these cases by late spring 2025, assuming normal weather, market conditions, modest customer growth, and a 6% decrease in oil and gas costs due to lower commodity prices, offset by higher storage and transportation expenses. They also factor in contributions from APT's system business for 2024 levels.

The paragraph discusses the financial outlook and operational plans of APT. It highlights the implementation of additional takeaway capacity to stabilize spreads and the impact of a higher revenue benchmark within APT's mechanism. The company anticipates 4% annual inflation in operating and maintenance (O&M) costs, excluding bad debt, due to increased spending on compliance and safety activities. APT plans to accelerate compliance work and estimates fiscal '25 O&M costs, excluding bad debt, to be between $840 million and $860 million. An approximate $20 million increase is attributed to the amortization of APT's system safety and integrity mechanism, approved in their last rate case. The mechanism allows the company to recover costs related to regulatory compliance with no impact on operating income. APT's first SSI filing, approved in October, allows for recovery of around $19 million in costs from November 1st over a year. The five-year financing plan involves $15 billion in long-term financing to support operations and the corporate minimum income tax expected by fiscal '27, using a mix of debt and equity to maintain balance sheet strength and manage financing risk.

The paragraph provides an overview of Atmos Energy's financial strategy and future plans. It highlights their recent $650 million long-term debt issuance, which resulted in a weighted average cost of debt of 4.1% and an average maturity of 18.1 years, with no major refinancing until June 2027. From an equity standpoint, they have fulfilled their fiscal '25 needs and partially covered fiscal '26 through a $1.4 billion issuance. Due to reduced existing shelf registration and depleted ATM program, they plan to file for a new $8 billion shelf agreement and a $1.7 billion ATM program. The company aims for 6-8% regulated earnings per share growth and corresponding dividend growth while maintaining a strong financial profile. The paragraph concludes with a transition to a Q&A session.

In the discussion, Christopher Forsythe addresses a capital plan, revealing a strategy to raise an incremental $15 billion over five years, with a balance of 50% equity and 50% long-term debt. This approach aims to maintain the strength of the balance sheet while meeting equity needs through an at-the-market (ATM) program and issuance of long-term debt. Forsythe also discusses managing interest costs and expresses confidence in maintaining the current debt-to-capitalization ratio, indicating a stable financial strategy moving forward.

The paragraph discusses the factors driving a significant increase in system investment for a company's five-year plan. The focus is on safety and reliability, with nearly 80% of investment attributed to these factors. Christopher Forsythe highlights robust residential, commercial, and industrial customer growth, including nearly 60,000 new customers in the past fiscal year, as key drivers. He emphasizes the need to anticipate and meet demand due to continued housing starts and employment growth in Texas. This growth necessitates planning ahead for winter needs and commercial and industrial demand.

The paragraph discusses a company's approach to its pipe replacement program, guided by risk models to determine the timing and location of replacements. The five-year plan also considers demand and growth expectations, including distribution and APT system projects like completing Line S-2, WA Loop, and Bethel. Richard Sunderland inquires about the discrepancy between the 13% to 15% rate base growth and the 6% to 8% earnings per share growth guidance. Christopher Forsythe responds, explaining the conservative approach due to uncertainties, and Kevin Akers adds that increased O&M CAGR also affects earnings growth. The discussion concludes with a transition to a question from Christopher Jeffrey of Mizuho Securities.

The paragraph features a discussion about financial projections and operational plans moving into 2025, following the 2024 fiscal year. Kevin Akers and Christopher Forsythe discuss expectations regarding the WAHA spread and adjustments to operating and maintenance (O&M) expenses. They anticipate normalizing conditions from the summer period and aim to manage demands on LDC customers during off-peak times while performing system maintenance. Forsythe mentions an increase in O&M expenses due to the SSI rider, expecting a rise from $6-$7 million in 2024 to $20-$25 million in 2025, and plans for enhanced system compliance measures, including increased monitoring and deploying AMLD units across multiple states.

The paragraph discusses the ongoing growth in customer base and accompanying infrastructure needs, particularly in the Texas region. Kevin Akers highlights the increase in line locates needed to support expanding water and sewer systems. During a discussion with Paul Zimbardo from Jefferies, Christopher Forsythe addresses a potential natural gas customer in Northern Louisiana, connected to a large combined cycle project. Though specifics aren't provided, Forsythe explains that they collaborate with economic development groups and local communities to address large industrial loads. They assess the customer's energy needs in relation to their gas distribution or transmission assets and plan the timing for ramping up usage over several years.

The paragraph features a discussion between Paul Zimbardo and Christopher Forsythe about inquiries and growth drivers in the industrial sector, mentioning potential customers in Northern Louisiana. Forsythe explains that they don't discuss customer details until contractual obligations are certain. Zimbardo then asks about the 2025 guidance on interest rates and debts. Forsythe clarifies that the small changes in interest expenses are due to an increase in capitalized interest as spending rises, despite the weighted average cost of debt remaining relatively flat. Ryan Levine from Citigroup then asks about assumptions for bad debt expense, noting its exclusion from the 4% O&M guide.

The paragraph discusses a financial strategy and projections for a company. Kevin Akers explains that changes in accounting for collectable and uncollectible accounts in Mississippi have caused some variations, but these are expected to normalize to pre-pandemic levels. Debt expenses are anticipated to remain stable year-over-year, aided by customer support strategies such as installment plans. In terms of customer growth in Texas, Christopher Forsythe mentions that recent trends in residential and commercial growth will continue over the next five years. Ryan Levine inquires about the consistency of a 4% operating and maintenance (O&M) guidance, to which Kevin Akers responds that while there might be slight variances within quarters, the annual growth is expected to be steady at 4%.

The paragraph features closing remarks from Daniel Meziere, expressing gratitude for the interest in Atmos Energy and informing that a recording of the call will be available on their website until December 31st. The operator then concludes the conference call, instructing participants that they may disconnect.

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