Atmos Energy Corporation Q2 FY2026 earnings call

• Kevin Akers mentioned year-to-date fiscal 26 net income and updated EPS guidance range to $8.40 to $8.50. Capital expenditures first half of fiscal year focused on safety and reliability. Steady customer growth across service territories, including over 51,000 new customers in 12 months and over 800 commercial and four industrial in second quarter. • APT worked on enhancing system safety, reliability, etc., completed LineWA phase two and interconnect projects. LDC customers benefit from Rider Rev Tariff, received ~$150 million in total over last three years. • Customer support associates and service technicians achieved 97% satisfaction rating; customer advocacy team helped customers with funding assistance. Named to Forbes list of America's best large employers for sixth consecutive year. • Chris Forsyth discussed year-to-date EPS increase, impact of Texas House Bill 4384, updated presentation of Rule 77102 deferrals, additional factors influencing year-to-date performance like rate increases, operating income growth, and APTs through system revenues. Regulatory perspective: implemented $136 million in annualized operating income increases in distribution segments, 13 filings in progress taking nearly $600 million, expect 40% implementation primarily in third quarter, APT's brief filing seeking $112 million scheduled for May 12th. • Equity capitalization and liquidity details, including $4.1 billion available liquidity at quarter end, net proceeds from forward sale agreements to satisfy fiscal 26 and part of fiscal 27 equity needs.

Year-to-date fiscal 26 net income was $985 million, or $5.92 per diluted share. Capital expenditures for the first half of the fiscal year totaled $2 billion, with over 89% focused on enhancing safety and reliability of distribution, transmission, and underground storage systems. Added over 51,000 new customers in 12 months ending March 31, 2026, with over 39,000 in Texas; second quarter added over 800 commercial customers and four new industrial customers. APT completed phase two of LineWA project, enhanced supply optionality, reliability, and system versatility with interconnect projects, adding nearly 100,000 MCF a day of natural gas supply. Customer satisfaction ratings were 97% for first six months of fiscal year; customer advocacy team helped over 33,000 customers receive ~$9.5 million in funding assistance. Year-to-date results included $94 million from Texas House Bill 4384 impact, with $44 million in distribution segment and $50 million at APT. Rate increases in operating segments totaled $171 million; operating income increased $32 million due to customer growth and increased load; APTs through system revenues, net of rider rev, increased to about $16 million, or $0.08. Excluding Rule 77102 deferrals, consolidated O&N increased $27 million. Equity capitalization as of March 31st was 61%, no short-term debt outstanding; extended four credit facilities providing $3.1 billion in total liquidity, with $4.1 billion in available liquidity at quarter end.

• Increased fiscal 26 share guidance range from $8.15 to $8.35 to $8.40 to $8.50. • Expect remaining contribution to fiscal 26 earnings per share to recognize somewhat evenly by quarter in back half of fiscal year. • Two key items driving guidance increase: expected performance of APTs through system business in second half of fiscal year, anticipating additional $0.08 to $0.12; impact of implementing Rule 77-102 higher than originally planned, range $155 million to $165 million for entire fiscal year. • O&M expected in range $865 million to $885 million; interest expense in new range $155 million to $160 million. • On track to spend approximately $4.2 billion in capital expenditures for fiscal 26.

Q: On the dividend increase, thoughts on sustainability and if intending to keep increasing above trend; also on shift between O&M and interest expense and if it's a net earnings impact.

A: Stated they'll grow EPS at 6% to 8% range and conventionally grow dividend; dividend increase was reflective of rebasing in addition to rebasing EPS due to Texas Rule 77-102; shift is a reclassification, not a net earnings impact.

Q: On guidance raise and how it's a base for growth going forward, and ATM activity.

A: Think $8.40 to $8.50 is a good base for fiscal 27 and beyond; didn't price anything on ATM in second quarter, kept powder dry due to market volatility, but will evaluate pricing opportunities for fiscal 27 equity needs.

Q: On breaking out earnings contribution of APT3 system business this quarter and monthly benefit trend.

A: Look at year-over-year basis, it was $16 million for ~$0.08; anticipating another $0.08 to $0.12 in second half of fiscal year.

Q: On Dallas-Forth Worth area growth dynamics.

A: Added about 39,000 of 51,000 new customers in Texas; good residential, commercial, and industrial growth across footprint.

Q: On APD spreads normalizing and impact in 2027 and beyond, and clarification on benefit from Texas legislation being pre-tax.

A: Will let market move through next six months and see what presents itself; will update on 27 as closer to end of 26; benefit from Texas legislation is pre-tax, 155 to 165 million impact for fiscal year 26, and it's a rebasing year with better handle on it going forward, and guidance is reflective of 6% to 8% growth off the new range.