Atmos Energy Corporation Q1 FY2026 earnings call

• Thanked Atmos Energy employees for their response during Winter Storm Fern and their dedication to system modernization. • Reported fiscal 2026 first quarter net income of $403 million or $2.44 per diluted share. • First quarter capital expenditures totaled $1 billion, with over 85% focused on safety and reliability. • Rebased fiscal 2026 guidance due to Texas House Bill 4384, with earnings per share guidance in the range of $8.15 to $8.35 per share and dividend rebased to $4 per share. • APT achieved project milestones, including pipeline installation and phase progress. • Saw steady customer growth, with nearly 54,000 new customers in 12 months ending December 31, 2025, and 98% customer satisfaction. • Recognized for customer service with J.D. Power and Escalent awards.

Fiscal 2026 first quarter net income was $403 million or $2.44 per diluted share. First quarter capital expenditures totaled $1 billion, with over 85% focused on enhancing safety and reliability of distribution, transmission, and underground storage systems. The first quarter diluted earnings per share of $2.44 was a 9.4% increase over the prior year quarter. The impact of Texas House Bill 4384 was $35 million, with $20 million in the Distribution segment and $15 million at APT. Rate increases in operating segments totaled $68 million. Operating income increased by $24 million due to customer growth and load. APT's through system revenues net of Rider REV increased about $7 million. APT's through system volumes declined ~2 Bcf, but spreads widened significantly to an average of $3.99 compared to $1.56 in the prior year quarter.

• Rebased fiscal 2026 earnings per share guidance is $8.15 to $8.35 per share. • Rebased annual dividend to $4 per share with plans to grow dividend in line with 6%-8% annual earnings per share growth. • Cautioned against simply annualizing the $35 million impact from Texas House Bill 4384 due to operational timing variations.

Q: Julien Dumoulin-Smith asked about the $35 million impact of Texas House Bill 4384 and preliminary financial impacts of Winter Storm Fern.

A: Christopher Forsythe said the $35 million impact is off to a good start but cautioned against simply annualizing it. John Akers noted Winter Storm Fern was not as significant as Uri, with minimal supply issues and good gas supply planning.

Q: David Arcaro inquired about affordability pressures and gas power projects.

A: John Akers said affordability is a regular conversation with regulators, and they continue to get inquiries about large gas loads like data centers but will share more when contracts are signed.

Q: Elias Jossen asked about Texas election impact and Mississippi rate case.

A: John Akers stated they are apolitical and work with all stakeholders. Christopher Forsythe mentioned ongoing work with Mississippi commission, filing a tariff, and evaluating appeal, with Mississippi being ~5% of the business.

Q: Nicholas Campanella asked about annualizing the Texas benefit and spreads.

A: Christopher Forsythe said to take the quarter-by-quarter approach and that APT's spreads contributed about $7 million to operating income.

Q: Ryan Levine asked about incremental gas storage opportunities.

A: John Akers said they will review system performance, gas supply plan, and customer growth post-winter to evaluate storage needs.