In the paragraph, Daniel Meziere and Kevin Akers from Atmos Energy discuss the company's earnings release and future expectations, noting that some statements may be forward-looking. Kevin Akers thanks the company's 5,300 employees for their service during difficult weather conditions and highlights the company's first-quarter net income of $352 million, or $2.23 per diluted share. Additionally, Atmos Energy made capital expenditures of $891 million for system modernization and growth. Over the past year, the company added more than 59,000 new customers, with the majority in Texas. The Texas Workforce Commission reported a record high number of employees in January, exceeding 14.3 million.

Over the past year, Texas experienced significant job growth, outpacing the national rate by adding 284,000 jobs with a 2% annual growth rate in 2024. The growth in commercial and industrial sectors reflects the increasing demand for natural gas, essential for economic development and energy needs. Several infrastructure projects were completed to enhance the safety, reliability, and supply of the natural gas system. These include the completion of a major pipeline and the initiation of the Bethel Grow Spec project, which will increase pipeline capacity to the Dallas-Fort Worth area. Two interconnect projects were also completed to improve supply reliability. Customer satisfaction remained high, with support associates and service technicians receiving a 98% satisfaction rating.

In the first quarter, Atmos Energy’s customer advocacy and support teams helped over 16,000 customers secure $4 million in funding assistance, earning them JD Power's top customer satisfaction rank among mid-sized gas utilities in the Midwest for the third year in a row. The company reported a 7.2% increase in first-quarter earnings per share to $0.23, with consolidated operating income rising 15% to $459 million. This growth was driven by a $69 million rate increase, customer growth, and higher industrial load, contributing an additional $10 million, and an $8 million rise in APT’s through-system revenues. These gains were somewhat offset by a $41 million rise in consolidated O&M expenses.

The paragraph discusses various financial and operational developments for a company. It highlights a $14 million expense reduction from a past regulatory change and an $11 million increase in employee-related costs due to higher headcount and overtime. Additionally, there is an $8 million increase in compliance and safety spending and a $5 million increase in APT's system safety expenses, which is offset by increased revenue. The company has implemented $152 million in annualized operating income increases in its distribution segment, primarily in Texas and the Pacific. Currently, seven filings are underway seeking $126 million in further income increases, including a $40 million rate case in West Texas per a 2020 settlement.

In the first fiscal quarter, the company filed several cases in Texas and Kentucky seeking significant increases in annualized operating income, with plans for additional filings aiming for $300 million in income increases this fiscal year. The company completed over $1 billion in long-term debt equity financing, including $650 million in October 2024, and settled $380 million in equity agreements. By December 31, direct capitalization was at 60% with no short-term debt and $5.2 billion in available liquidity. The quarter's results position the company to achieve its fiscal 2025 goals, including a capital spending plan of $3.7 billion, with an anticipated earnings range of $7.05 to $7.25. The paragraph concludes with the company opening the floor for questions during a call.

The paragraph discusses the company's capital expenditure (CapEx) plan, emphasizing a continuation of previous strategies focused on system growth, modernization, and pipeline replacement. Kevin Akers explains that this strategy supports system-wide enhancements, including interconnects and storage improvements. James Ward acknowledges the clarity provided and seeks additional details about large-scale industrial and generation projects. Akers reaffirms that growth is being observed across residential, commercial, and industrial sectors.

The paragraph discusses the industrial growth, with eleven new projects expected to come online this quarter, contributing two to two and a half billion cubic feet of load. The company is optimistic about future prospects but will discuss them in detail only once customer agreements are signed. Feedback from builders and developers remains positive, indicating economic strength in the service territory. During a Q&A session, Richard Sunderland from JPMorgan inquires about the $1.5 billion equity forward plan for 2025 and 2026. Christopher Forsythe explains that equity and long-term debt are typically balanced throughout the fiscal year, with $600 to $800 million expected for 2025. The drawing down will depend on cash flow needs, which may vary quarterly.

In the discussion, Christopher Forsythe explains that as their capital grows, they expect their annual financial targets to increase, aligning with a long-term plan that includes balanced financing through debt and equity. Richard Sunderland asks if early gains might push them higher within the guidance range for the year. Kevin Akers responds by noting that although some spreads widened earlier in the quarter, they have returned to normal levels and will be monitored moving forward, particularly in response to weather conditions and market trends. The dialogue then transitions to David Arcaro from Morgan Stanley, who is preparing to ask a question regarding power plants.

The paragraph discusses inquiries about whether any of the eleven new industrial customers are power plants and explores opportunities related to power generation. Kevin Akers clarifies that the eleven customers are not power facilities but span various industries, such as distilling, manufacturing, battery production, automotive, and medical. He highlights the diversification of their service territories across several states and the continuous interest from large industrial sectors. They are working with economic development bodies and potential customers on natural gas supply opportunities but emphasize that no contracts are finalized yet. The conversation then shifts to anticipated challenges or focus areas in renewing gas supply programs in Texas and West Texas.

The paragraph discusses a conversation between David and another speaker about regulatory rate cases involving Atmos. These cases, which are part of a regular cycle or resulting from prior settlements, aim to update regulatory mechanisms and align with what other utilities in Texas have done. The team hopes to complete these processes by the end of spring. Another speaker, Beshi from Barclays, inquires about the company's balance sheet and credit rating outlook in light of increased equity issuance. Christopher Forsythe responds, explaining that Moody's had put the company on a negative outlook last April and typically updates their outlook within a year. The company has been in regular communication with Moody's, sharing updates on their new five-year plan, and expects a decision from Moody's by late March or early April.

The paragraph discusses a company's financial strategy and its resilience during challenging times, such as pandemics and economic volatility. The company is comfortable with its equity capitalization and is prepared for various outcomes, including potential credit rating downgrades, which they don't expect to significantly impact financing costs. Furthermore, in response to a question about tariffs, Kevin Akers mentions the company's satisfaction with federal support for the oil and natural gas industry and its ongoing engagement with federal stakeholders. Although tariffs on Chinese and possibly Mexican imports are a concern, Akers notes they were recently put on pause.

In the article paragraph, the discussion revolves around working with vendors and suppliers to understand the sourcing and assembly locations of components, whether overseas or in the U.S. Kevin Akers mentions having regulatory mechanisms in place across various jurisdictions like Kentucky, Virginia, and Kansas to recover costs if necessary. Ryan Levine inquires about the potential business impact of federal announcements related to developments in Abilene, and Akers responds that any agreements with new customers would likely involve the APT system with a 75/25 percent sharing mechanism. The segment concludes with the end of the Q&A session, with Daniel Meziere set to provide closing remarks.

Daniel Meziere expresses gratitude for the interest in Atmos Energy and thanks the audience for attending the meeting.

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