10-QPeriod: Q1 FY2022

ATMOS ENERGY CORP Quarterly Report for Q1 Ended Dec 31, 2021

Filed February 8, 2022For Securities:ATO

Summary

Atmos Energy Corporation (ATO) reported solid financial results for the quarter ended December 31, 2021, with net income increasing by 14.5% to $249.2 million, or $1.86 per diluted share, compared to $217.7 million, or $1.71 per diluted share, in the prior year period. This growth was primarily driven by positive rate outcomes in its regulated distribution segment, reflecting investments in safety and reliability, and customer growth. The company also successfully navigated significant capital expenditures, investing $684.2 million during the quarter, with over 85% allocated to enhancing the safety and reliability of its infrastructure. Financially, Atmos Energy strengthened its balance sheet by completing approximately $862 million in long-term debt and equity financing during the quarter. The company maintained a strong liquidity position of approximately $3.1 billion. Importantly, the company's Board of Directors approved an 8.8% increase in the quarterly dividend for fiscal year 2022, signaling confidence in its sustained financial performance and commitment to shareholder returns. The company continues to focus on modernizing its natural gas distribution and transmission systems, supported by regulatory mechanisms that facilitate timely recovery of investments.

Financial Highlights

43 data points
Beta

Revenue

$1.01B

63.4% Gross Margin

Net Income

$249.21M

24.6% Net Margin

EPS (Diluted)

$1.86

Total Assets

$20.55B

Cash & Equivalents

$264.00M

Free Cash Flow

$61.82M

Financial Statements
Beta
Revenue$1.01B
Cost of Revenue$371.16M
Gross Profit$641.62M
Operating Income$275.86M
Interest Expense$19.85M
Net Income$249.21M
EPS (Basic)$1.86
EPS (Diluted)$1.86
Shares Outstanding (Basic)133.68M
Shares Outstanding (Diluted)133.69M

Key Highlights

  • 1Net income increased by 14.5% year-over-year to $249.2 million ($1.86 per diluted share) for the three months ended December 31, 2021.
  • 2Capital expenditures totaled $684.2 million for the quarter, with over 85% dedicated to improving safety and reliability of distribution and transportation systems.
  • 3The company secured approximately $862 million in long-term debt and equity financing during the quarter, bolstering its financial flexibility.
  • 4Atmos Energy maintained a strong liquidity position of approximately $3.1 billion as of December 31, 2021.
  • 5The Board of Directors approved an 8.8% increase in the quarterly dividend for fiscal year 2022.
  • 6Regulatory proceedings resulted in a $24.9 million increase in annual operating income, with further rate adjustments in progress.
  • 7Total operating revenues increased by 10.7% to $1,012.8 million compared to the prior year period, driven by the distribution segment.

Frequently Asked Questions

The primary driver for the 14.5% increase in net income was positive rate outcomes in the distribution segment, reflecting investments in safety and reliability, alongside customer growth. Additionally, successful regulatory proceedings contributed to the improved financial performance.

Atmos Energy funds its capital expenditures through a combination of internally generated cash flows and external debt and equity financing. During the quarter, the company completed approximately $862 million in long-term debt and equity financing to support its capital spending program and other general corporate purposes.

As of December 31, 2021, Atmos Energy had approximately $3.1 billion in total liquidity, which includes cash and cash equivalents and funds available through equity forward sales agreements, providing ample resources to meet its financial obligations and strategic initiatives.

Winter Storm Uri resulted in extraordinary purchased gas costs of approximately $2.3 billion in February 2021. The company has recorded a $2.1 billion regulatory asset to account for these incremental costs, including carrying costs, in Kansas and Texas. Securitization legislation in both states is in progress to allow for the recovery of these costs over extended periods, thereby minimizing immediate customer impact.