Atmos Energy Corporation Q3 FY2025 earnings call

• Year-to-date fiscal '25 net income was $1 billion or $6.40 per diluted share, and fiscal '25 earnings per share guidance was updated to a range of $7.35 to $7.45. • Added nearly 58,000 new residential customers, ~45,000 in Texas; ~575 new commercial customers in Q2 and over 2,500 year-to-date; added 3 industrial customers in Q3 and 22 year-to-date with an anticipated annual load of ~3.4 Bcf. • Customer support associates and service technicians had a 97% satisfaction rating. • Helped over 48,000 customers receive nearly $17.5 million in funding assistance. • Named 2025 most Trusted Brands, first in the South region and highest nationwide. • Texas legislation House Bill 4384 became effective, with ~80% of capital spending eligible for Texas deferral treatment, mostly associated with APT. • Consolidated capital spending increased 22% to $2.6 billion, 86% for safety and reliability. • Implemented ~$170 million in annualized regulatory outcomes in Q3, with $351 million year-to-date and $229 million in progress.

In the distribution segment, residential customer growth and rising industrial load increased operating income by an additional $22 million. In the pipeline and storage segment, revenues increased $12.5 million primarily due to increased throughput, with approximately $11 million recognized during the first 6 months of the fiscal year. Consolidated capital spending increased 22% to $2.6 billion, with 86% dedicated to improving the safety and reliability of the system. Fiscal year-to-date, $351 million of annualized regulatory outcomes have been implemented, and $229 million in annualized outcomes are in progress.

• Anticipated the impact of adopting the new Texas legislation will increase expected earnings per share in the fourth quarter of fiscal '25 by approximately $0.10. • Updated fiscal '25 earnings per share guidance to a range of $7.35 to $7.45 from $7.20 to $7.30. • For '26, believe earnings per share will continue to grow in a range of 6% to 8% annually, with a full update to fiscal 2026 earnings per share guidance and 5-year plan during the fourth quarter earnings call in November.

Q: Is the $0.10 increase from the Texas legislation a half year's impact booked all in 4Q and how to think about the total uplift potential from the legislation?

A: Chris Forsythe said the $0.10 reflects the impact of legislation beginning June 20 (end of fiscal 2025) effectively 1 quarter.

Q: Could you remind on the through system commentary, original expectation in '25 and impact on '26?

A: Chris Forsythe said on through-system business, originally anticipated spreads more in line with historical norms, in fiscal 2026 anticipating a more normal operating environment and will adjust as the fiscal year progresses. John Kevin Akers added it's a bit early to see 2026 clearly and will know more closer to the November update.

Q: How to think about the $0.10 relative to the long-term 6% - 8% CAGR and impact on financing future growth?

A: Chris Forsythe said it's not simple to annualize just by multiplying 0.10 by 4 as it depends on when assets are placed into service and when rates are reflected. Daniel Meziere said will continue to finance operating cash flow needs in a balanced fashion using blended mix of equity and long-term debt, and the increase in operating cash flow was contemplated in developing the 5-year plan.