Atmos Energy Corporation — 2024 Q2
Transcript
Each turn shows the speaker, their inferred role, the section, and that turn's net sentiment (×1000).
Thank you for standing by. At this time, I would like to welcome everyone to the Atmos Energy Corporation Fiscal 2024 Second Quarter Earnings Conference Call. [Operator Instructions]
Thank you, Greg. Good morning, everyone, and thank you for joining our fiscal 2024 second quarter earnings call. With me today are Kevin Akers, President and Chief Executive Officer; and Chris Forsythe, Senior Vice President and Chief Financial Officer. Our earnings release and conference call slide presentation, which we will reference in our prepared remarks, are available at atmosenergy.com under the Investor Relations tab.
Thank you, Dan, and good morning, everyone. We appreciate your interest in Atmos Energy. Yesterday, we reported year-to-date fiscal '24 net income of $743 million or $4.93 per diluted share. And we updated our fiscal '24 earnings per share guidance to a range of $6.70 to $6.80. This performance continues to reflect the commitment, dedication, focus and effort of all 5,000 Atmos Energy employees to successfully modernize our natural gas distribution, transmission and storage systems, while safely providing reliable natural gas service to 3.4 million customers and 1,400 communities across our 8 states.
Thank you, Kevin, and thank you to everyone for joining us this morning. As Kevin mentioned, earnings per share for the first 6 months of the fiscal year was $4.93, which represents a 12% increase over the $4.40 per share reported in the prior year period. Operating income increased to $950 million or 28% for the first 6 months of the fiscal year. I'll highlight a few key drivers for our financial performance.
[Operator Instructions] Our first question comes from the line of Richard Sunderland with JPMorgan.
Can you hear me?
Sure can.
Great. Thanks for all the clarifications around guidance and the changes there. I do just want to circle back to that and particularly the language around the roll forward of the growth rate at year-end, ex those nonrecurring items. Just for the sake of clarity, could you quantify again what those items are? And so just to be clear, those two items would then be removed from your year-end results for the purposes of calculating the growth rate on a [ 4 basis ], am I summarizing that correctly?
You are. So just to kind of reemphasize. On the Texas property tax adjustment, we're anticipating that impact to be $0.10 to $0.11. Additionally, the Mississippi bad debt adjustment was about $0.07. So when we initiate our fiscal '25 guidance, wherever we land on a GAAP basis, we'll back off the $0.10 to $0.11 and the $0.07, and that will be the rebased or adjusted earnings per share from which we will launch our fiscal '25 guidance. And as I mentioned, we're anticipating 6% to 8% growth off of that adjusted amount.
Okay. Got it. Very helpful there. And then just to parse the '24 guidance changes a little more finely. If I'm recalling correctly from last quarter, you had said Mississippi was in the prior range and then Texas property tax, there had been a little uncertainty about whether it was all incremental or not, and now we're obviously getting that update today.
Okay. So lots to unpack there. So I think, again, on the $0.10 to $0.11 on the Texas property tax, that was really related to -- we're receiving the final valuations in our property tax valuations here in this quarter. And our team is working through what those final valuations will be for taxation purposes. So that's why there's a range there.
And our next question comes from the line of Christopher Jeffrey with Mizuho.
Maybe picking up on one of the other guidance item that was updated in the CapEx guidance went up about [ $20 million ]. And apologies if you talked about it in the call already, but any kind of color there as to what kind of the spread between distribution or pipeline or anything else...
Yes, it's a little hard to understand your question there, but I think [indiscernible], you're asking about the spreads on the pipeline. Obviously, at different times throughout the year, there will be maintenance on various other takeaway capacity. That's what we've seen over the last few weeks to months and anticipate several other pipelines to have additional maintenance, which is driving some negative spreads coming out of Waha, I believe, this morning.
One of my questions was about spreads on the pipeline. So maybe to clarify my last question, the CapEx guide for '24 increased from the last update. I was just hoping further color on what's driving the increase in which businesses?
Yes, as we normally do. What drives our CapEx is our safety and reliability investment. And again, Chris mentioned in his remarks that we had identified several projects before heading into the heating season that we would like to complete for reliability measures that are out there. And our team continues to evaluate safety projects that are out there or pipe programs across our various jurisdictions. We'll further identify those as we head toward our update near the October-November time frame on 2025.
[Operator Instructions] And it looks like there are no further questions. So at this point, I will turn the call back over to Dan Meziere for closing remarks. Dan?
We appreciate your interest in Atmos Energy, and thank you again for joining us this morning. The recording of this call is available for replay on our website through June 30. Have a great day.
Thanks, Dan. And again, ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.