Atmos Energy Q1 2026 Atmos Energy Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 Atmos Energy Corp Earnings Call
Speaker #1: 26th, first quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session.
Speaker #1: If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again.
Speaker #1: Thank you. I would now like to turn the call over to Dan Meziere, Vice President of Investor Relations and Treasurer. You may begin.
Speaker #2: Thank you, Jeannie. Good morning, everyone, and thank you for joining us. With me today are Kevin Akers, President and Chief Executive Officer; and Chris Forsythe, Senior Vice President and Chief Financial Officer.
Speaker #2: 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.
Daniel Meziere: Thank you, Jeanie. Good morning, everyone, and thank you for joining us. 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. As we review our financial results and discuss further expectations, please keep in mind that some of our discussion might contain forward-looking statements within the meaning of the Securities Act and the Securities Exchange Act. Our forward-looking statements and projections could differ materially from actual results. The factors that could cause such material differences are outlined on slide 29 and are more fully described in our SEC filings. I will now turn the call over to Kevin.
Speaker #2: As we review our financial results and discuss further expectations, please keep in mind that some of our discussion might contain forward-looking statements within the meaning of the securities act and the securities exchange act.
David Brown: 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. As we review our financial results and discuss further expectations, please keep in mind that some of our discussion might contain forward-looking statements within the meaning of the Securities Act and the Securities Exchange Act. Our forward-looking statements and projections could differ materially from actual results. The factors that could cause such material differences are outlined on slide 29 and are more fully described in our SEC filings. I will now turn the call over to Kevin. Thank you, Dan. Good morning, everyone, and thank you for joining us today.
Speaker #2: 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. As we review our financial results and discuss further expectations, please keep in mind that some of our discussion might contain forward-looking statements.
Speaker #2: Our forward-looking statements and projections could differ materially from actual results. The factors that could cause such material differences are outlined on slide 29 and are more fully described in our SEC filings.
Speaker #2: I will now turn the call over to
Speaker #2: Kevin. Thank you, Dan.
Speaker #3: Good morning, everyone, and thank you for joining us today. I want to begin today's call by thanking everyone of our Atmos Energy employees for their preparation, focus, and dedication to safely providing natural gas service to our customers and communities during the very challenging weather conditions of winter storm burn.
Speaker #2: turn the call over to Kevin.
Kevin Akers: Thank you, Dan. Good morning, everyone, and thank you for joining us today. I wanted to begin today's call by thanking every one of our Atmos Energy employees for their preparation, focus, and dedication to safely providing natural gas service to our customers and communities during the very challenging weather conditions of Winter Storm Bern. For their dedication throughout the year to execute upon our system modernization strategy as we continue our journey toward our vision to be the safest provider of natural gas services. During Winter Storm Bern, all segments of our business, distribution, transmission, Atmos Pipeline Texas, our underground storage systems, gas supply plans, and our customer support operations, all performed very well and to design expectations. I am very proud of our team and their efforts. I would also like to thank the first responders, emergency responders, and emergency management services teams across our service territory for what they do every day for our communities.
Speaker #3: And for their dedication throughout the year to execute upon our system modernization strategy as we continue our journey toward our vision to be the safest provider of natural gas services.
David Brown: I wanted to begin today's call by thanking every one of our Atmos Energy employees for their preparation, focus, and dedication to safely providing natural gas service to our customers and communities during the very challenging weather conditions of Winter Storm Bern. For their dedication throughout the year to execute upon our system modernization strategy as we continue our journey toward our vision to be the safest provider of natural gas services. During Winter Storm Bern, all segments of our business, distribution, transmission, Atmos Pipeline Texas, our underground storage systems, gas supply plans, and our customer support operations, all performed very well and to design expectations. I am very proud of our team and their efforts. I would also like to thank the first responders, emergency responders, and emergency management services teams across our service territory for what they do every day for our communities.
Speaker #3: During winter storm burn, all segments of our business, distribution, transmission, Atmos pipeline Texas, our underground storage systems, gas supply plans, and our customer support operations all performed very well and to design expectations.
Speaker #3: I am very proud of our team and their efforts. I would also like to thank the first responders, emergency responders, and emergency management services teams across our service territory for what they do every day for our communities.
Speaker #3: Now, yesterday we reported fiscal 2026 first quarter net income of $403 million or $2.44 per diluted share. Our first quarter capital expenditures totaled $1 billion with over 85% of these investments focused on enhancing the safety, reliability of our distribution, transmission, and underground storage systems.
Speaker #3: efforts. I would also Thank you, Dan. Good morning, like to thank the first responders, emergency responders, and emergency management services teams across our service territory for what they do every day for our communities.
Speaker #3: Now, yesterday we reported fiscal 2026 first quarter net income of $403 million or $2.44 per diluted share. Our first quarter capital expenditures totaled $1 billion with over $85% of these investments focused on enhancing the safety, reliability of our distribution, transmission, and underground storage systems.
David Brown: Now, yesterday we reported fiscal 2026 Q1 net income of $403 million or $2.44 per diluted share. Our Q1 capital expenditures totaled $1 billion, with over 85% of these investments focused on enhancing the safety and reliability of our distribution, transmission, and underground storage systems. As a reminder, we rebased our fiscal 2026 guidance to reflect the passage of Texas House Bill 4384. As we stated on our November earnings call and in our investor material, our rebased fiscal 2026 earnings per share guidance is in the range of $8.15 to $8.35 per share. Additionally, we rebased the fiscal 2026 annual dividend to $4 per share, and we plan to grow our dividend in line with our earnings per share growth of 6% to 8% annually. Moving to our Atmos Pipeline Texas division, we achieved several project milestones during the Q1.
Kevin Akers: Now, yesterday we reported fiscal 2026 Q1 net income of $403 million or $2.44 per diluted share. Our Q1 capital expenditures totaled $1 billion, with over 85% of these investments focused on enhancing the safety and reliability of our distribution, transmission, and underground storage systems. As a reminder, we rebased our fiscal 2026 guidance to reflect the passage of Texas House Bill 4384. As we stated on our November earnings call and in our investor material, our rebased fiscal 2026 earnings per share guidance is in the range of $8.15 to $8.35 per share. Additionally, we rebased the fiscal 2026 annual dividend to $4 per share, and we plan to grow our dividend in line with our earnings per share growth of 6% to 8% annually. Moving to our Atmos Pipeline Texas division, we achieved several project milestones during the Q1.
Speaker #3: As a reminder, we rebased our fiscal 2026 guidance to reflect the passage of Texas House Bill 4384. As we stated on our November earnings call and in our investor material, our rebased fiscal 2026 earnings per share guidance is in the range of $8.15 to $8.35 per share.
Speaker #3: As a reminder, we rebased our fiscal 2026 guidance to reflect the passage of Texas House Bill 4384. As we stated on our November earnings call and in our investor material, our rebased fiscal 2026 earnings per share guidance is in the range of $8.15 to $8.35 per share.
Speaker #3: Additionally, we rebased the fiscal 2026 annual dividend to $4 per share and we plan to grow our dividend in line with our earnings per share growth of 6% to 8% annually.
Speaker #3: Moving to our Atmos pipeline Texas division, we achieved several project milestones during the first quarter. We completed the installation of approximately 55 miles of 36-inch pipeline from APT Bethel Storage Facility to our growth spec compressor station.
Speaker #3: Additionally, we rebased the fiscal 2026 annual dividend to $4 per share and we plan to grow our dividend in line with our earnings per share growth of 6% to 8% annually.
Speaker #3: This provides additional pipeline capacity to transport gas from our Bethel storage into the growing DFW Metroplex and the interstate 35 corridor between Waco and Austin.
Speaker #3: Moving to our Atmos pipeline Texas division, we achieved several project milestones during the first quarter. We completed the installation of approximately 55 miles of 36-inch pipeline from APT's Bethel Storage Facility to our Grossbeck Compressor Station.
David Brown: We completed the installation of approximately 55mi of 36-in. pipeline from APT's Bethel storage facility to our Groesbeck compressor station. This provides additional pipeline capacity to transport gas from our Bethel storage into the growing DFW Metroplex and the Interstate 35 corridor between Waco and Austin. We continue to work on phase 2 of APT's Line WA Loop project as we have placed 13mi of this project into service. As a reminder, this project is designed to install approximately 44mi of 36-in. pipeline to the west of Fort Worth to support growth in this area of the DFW Metroplex. The remaining 31mi is expected to be placed in service this spring.
Kevin Akers: We completed the installation of approximately 55mi of 36-in. pipeline from APT's Bethel storage facility to our Groesbeck compressor station. This provides additional pipeline capacity to transport gas from our Bethel storage into the growing DFW Metroplex and the Interstate 35 corridor between Waco and Austin. We continue to work on phase 2 of APT's Line WA Loop project as we have placed 13mi of this project into service. As a reminder, this project is designed to install approximately 44mi of 36-in. pipeline to the west of Fort Worth to support growth in this area of the DFW Metroplex. The remaining 31mi is expected to be placed in service this spring.
Speaker #3: We continue to work on phase two of APT's line WA loop project as we have placed 13 miles of this project into service. As a reminder, this project is designed to install approximately 44 miles of 36-inch pipeline to the west of Fort Worth to support growth in this area of the DFW Metroplex.
Speaker #3: This provides additional pipeline capacity to transport gas from our Bethel Storage into the growing DFW Metroplex and the Interstate 35 corridor between Waco and Austin.
Speaker #3: We continue to work on phase two of APT's line WA loop project as we have placed 13 miles of this project into service. As a reminder, this project is designed to install approximately 44 miles of 36-inch pipeline to the west of Fort Worth to support growth in this area of the DFW Metroplex.
Speaker #3: The remaining 31 miles is expected to be placed in service this spring. In addition to the enhanced supply capacity of those projects, we completed a project that more than doubles the takeaway capacity at our Bethel Salt Dome storage facility.
Speaker #3: Providing additional peak day deliverability into the APT system for our LDC customers. Finally, we enhanced APT supply optionality reliability and system versatility with the completion of two interconnect projects adding 700,000 MCF per day of additional natural gas supply to the APT system. Across our service territories, we continue to see steady customer growth.
Speaker #3: The remaining 31 miles is expected to be placed in service this spring. In addition to the enhanced supply capacity of those projects, we completed a project that more than doubles the takeaway capacity at our Bethel Salt Dome storage facility.
David Brown: In addition to the enhanced supply capacity of those projects, we completed a project that more than doubles the takeaway capacity at our Bethel salt dome storage facility, providing additional peak day deliverability into the APT system for our LDC customers. Finally, we enhanced APT supply optionality, reliability, and system versatility with the completion of two interconnect projects, adding 700,000 Mcf per day of additional natural gas supply to the APT system. Across our service territories, we continue to see steady customer growth. For the 12-month ending 31 December 2025, we added nearly 54,000 new customers, with approximately 42,000 of those new customers located here in Texas. During the Q1, we added over 1,100 commercial customers and three new industrial customers. This continued demand from all customer classes demonstrates the value and vital role natural gas plays in economic development across our service territories.
Kevin Akers: In addition to the enhanced supply capacity of those projects, we completed a project that more than doubles the takeaway capacity at our Bethel salt dome storage facility, providing additional peak day deliverability into the APT system for our LDC customers. Finally, we enhanced APT supply optionality, reliability, and system versatility with the completion of two interconnect projects, adding 700,000 Mcf per day of additional natural gas supply to the APT system. Across our service territories, we continue to see steady customer growth. For the 12-month ending 31 December 2025, we added nearly 54,000 new customers, with approximately 42,000 of those new customers located here in Texas. During the Q1, we added over 1,100 commercial customers and three new industrial customers. This continued demand from all customer classes demonstrates the value and vital role natural gas plays in economic development across our service territories.
Speaker #3: Providing additional peak day deliverability into the APT system for our LDC customers. Finally, we enhanced APT supply optionality reliability and system versatility with the completion of two interconnect projects adding 700,000 MCF per day of additional natural gas supply to the APT system.
Speaker #3: For the 12-month ending December 31, 2025, we added nearly 54,000 new customers with approximately 42,000 of those new customers located here in Texas. And during the first quarter, we added over 1,100 commercial customers and three new industrial customers.
Speaker #3: Across our service territories, we continue to see steady customer growth. For the 12-month ending December 31, 2025, we added nearly 54,000 new customers with approximately 42,000 of those new customers located here in Texas.
Speaker #3: This continued demand from all customer classes demonstrates the value and vital role natural gas plays in economic development across our service territory. The Texas Workforce Commission reported that at the end of December that the seasonally adjusted number of employees was 14.3 million.
Speaker #3: And during the first quarter, we added over 1,100 commercial customers and three new industrial customers. This continued demand from all customer classes demonstrates the value and vital role natural gas plays in economic development across our service territories.
Speaker #3: Texas once again added jobs at a faster rate than the nation over the last 12 months ending December 2025. Our customer support associates and service technicians continue to provide exceptional customer service achieving customer satisfaction ratings of 98% for the quarter.
Speaker #3: The Texas workforce commission reported that at the end of December that the seasonally adjusted number of employees was 14.3 million. Texas once again added jobs at a faster rate than the nation over the last 12 months ending December 2025.
David Brown: The Texas Workforce Commission reported that at the end of December, the seasonally adjusted number of employees was 14.3 million. Texas once again added jobs at a faster rate than the nation over the last 12 months ending December 2025. Our customer support associates and service technicians continue to provide exceptional customer service, achieving customer satisfaction ratings of 98% for the quarter. Our customer advocacy team and customer support agents continue their outreach efforts to energy assistance agencies and customers during Q1. Through those efforts, the team helped over 11,000 customers receive nearly $3 million in funding assistance. Recently, our team's customer service efforts were recognized by J.D. Power and Escalent. In December, the J.D. Power 2025 Gas Utility Residential Customer Satisfaction Study ranked Atmos Energy number one in customer satisfaction in the South and Midwest among large utilities.
Kevin Akers: The Texas Workforce Commission reported that at the end of December, the seasonally adjusted number of employees was 14.3 million. Texas once again added jobs at a faster rate than the nation over the last 12 months ending December 2025. Our customer support associates and service technicians continue to provide exceptional customer service, achieving customer satisfaction ratings of 98% for the quarter. Our customer advocacy team and customer support agents continue their outreach efforts to energy assistance agencies and customers during Q1. Through those efforts, the team helped over 11,000 customers receive nearly $3 million in funding assistance. Recently, our team's customer service efforts were recognized by J.D. Power and Escalent. In December, the J.D. Power 2025 Gas Utility Residential Customer Satisfaction Study ranked Atmos Energy number one in customer satisfaction in the South and Midwest among large utilities.
Speaker #3: And our customer advocacy team and customer support agents continue their outreach efforts to energy assistance agencies and customers during the first quarter. Through those efforts, the team helped over 11,000 customers receive nearly $3 million in funding assistance.
Speaker #3: Our customer support associates and service technicians continue to provide exceptional customer satisfaction ratings of service achieving customer 98% for the quarter. And our customer advocacy team and customer support agents continue their outreach efforts to energy assistance agencies and customers during the first quarter.
Speaker #3: Recently, our team's customer service efforts were recognized by JD Power and Eskelon. In December, the JD Power 2025 Gas Utility Residential Customer Satisfaction Study ranked Atmos Energy number one in customer satisfaction in the South and Midwest among large utilities.
Speaker #3: Through those efforts, the team helped over 11,000 customers receive nearly $3 million in funding assistance. Recently, our team's customer service efforts were recognized by JD Power and Eskelon.
Speaker #3: This is Atmos Energy's fourth consecutive year to receive this honor for the Midwest region. And in January Atmos Energy was named an Eskelant 2025 Utility Customer Champion in both the South and Midwest regions.
Speaker #3: In December, the JD Power 2025 Gas Utility Residential Customer Satisfaction Study ranked Atmos Energy number one in customer satisfaction in the South and Midwest among large utilities.
Speaker #3: More than 96% of our customers are located in these two regions, and we are very proud of our entire team for their ongoing focus and dedication to providing exceptional customer service.
Speaker #3: This is Atmos Energy's fourth consecutive year to receive this honor for the Midwest region. And in January Atmos Energy was named an Eskelon 2025 Utility Customer Champion in both the South and Midwest regions.
David Brown: This is Atmos Energy's fourth consecutive year to receive this honor for the Midwest region. In January, Atmos Energy was named an Escalent 2025 Utility Customer Champion in both the South and Midwest regions. More than 96% of our customers are located in these two regions, and we are very proud of our entire team for their ongoing focus and dedication to providing exceptional customer service. Congratulations, and thank you all. I'll now turn the call over to Chris for his update. Thank you, Kevin, and good morning, everyone. We appreciate you joining us this morning. Our fiscal 2026 Q1 diluted earnings per share of $2.44 represented a 9.4% increase over the prior year quarter. Our Q1 results include $35 million or $0.16 in the impact of Texas House Bill 4384.
Kevin Akers: This is Atmos Energy's fourth consecutive year to receive this honor for the Midwest region. In January, Atmos Energy was named an Escalent 2025 Utility Customer Champion in both the South and Midwest regions. More than 96% of our customers are located in these two regions, and we are very proud of our entire team for their ongoing focus and dedication to providing exceptional customer service. Congratulations, and thank you all. I'll now turn the call over to Chris for his update.
Speaker #3: Congratulations and thank you all. I'll now turn the call over to
Speaker #2: Thank you, Chris for his update. Kevin, and good morning, everyone. We appreciate you joining us this morning. Our fiscal 26 first quarter diluted earnings per share of $2.44 represented a 9.4% increase over the prior quarter.
Speaker #3: More than 96% of our customers are located in these two regions and we are very proud of our entire team for their ongoing focus and dedication to providing exceptional customer service.
Speaker #2: Our first quarter results include $35 million or 16 cents in the impact to Texas House Bill 4384. $20 million was recognized in our distribution segment, and the remaining $15 million was recognized at APT.
Speaker #3: Congratulations and thank you all. I'll now turn the call over to Chris for his
Speaker #3: update. Thank you, Kevin, and
Chris Forsythe: Thank you, Kevin, and good morning, everyone. We appreciate you joining us this morning. Our fiscal 2026 Q1 diluted earnings per share of $2.44 represented a 9.4% increase over the prior year quarter. Our Q1 results include $35 million or $0.16 in the impact of Texas House Bill 4384.
Speaker #2: Good morning, everyone. We appreciate you joining us this morning. Our fiscal '26 first quarter diluted earnings per share of $2.44 represented a 9.4% increase over the prior year quarter.
Speaker #2: Our first quarter performance was also influenced by several other factors. Rate increases in both of our operating segments totaled $68 million. Operating income increased by an additional $24 million due to residential commercial customer growth and increased customer load.
Speaker #2: Our first quarter results include $35 million or 16 cents in the impact of Texas House Bill 4384. $20 million was recognized in our distribution segment and the remaining $15 million was recognized at APT.
David Brown: $20 million was recognized in our distribution segment, and the remaining $15 million is recognized at APT. Our Q1 performance was also influenced by several other factors. Rate increases in both of our operating segments totaled $68 million. Operating income increased by an additional $24 million due to residential commercial customer growth and increased customer load. Finally, APT's through system revenues net of rider rev increased about $7 million. During the quarter, APT's through system volumes declined approximately 2 Bcf as it performed more maintenance during this quarter compared to the prior-year quarter. However, spreads widened significantly to an average of $3.99 compared to $1.56 in the prior-year quarter due to rising associated gas production, constrained takeaway capacity, and lower demand due to unseasonably warm weather during the Q1. Partially offsetting these increases was a $23 million increase in consolidated O&M expense.
Chris Forsythe: $20 million was recognized in our distribution segment, and the remaining $15 million is recognized at APT. Our Q1 performance was also influenced by several other factors. Rate increases in both of our operating segments totaled $68 million. Operating income increased by an additional $24 million due to residential commercial customer growth and increased customer load. Finally, APT's through system revenues net of rider rev increased about $7 million. During the quarter, APT's through system volumes declined approximately 2 Bcf as it performed more maintenance during this quarter compared to the prior-year quarter. However, spreads widened significantly to an average of $3.99 compared to $1.56 in the prior-year quarter due to rising associated gas production, constrained takeaway capacity, and lower demand due to unseasonably warm weather during the Q1. Partially offsetting these increases was a $23 million increase in consolidated O&M expense.
Speaker #2: Finally, APT's through system revenues and Edifier Rev increased about $7 million. During the quarter, APT's through system volumes declined approximately 2 BCF as it performed more maintenance during this quarter compared to the prior quarter.
Speaker #2: Our first quarter performance was also influenced by several other factors. Rate increases in both of our operating segments totaled $68 million. Operating income increased by an additional $24 million due to residential commercial customer growth and increased customer load.
Speaker #2: However, spreads widened significantly to an average of $3.99 compared to $1.56 in the prior quarter due to rising associated gas production and strained takeaway capacity and lower demand due to unseasonably warm weather during the first quarter.
Speaker #2: Finally, APT's through system revenues and Edifier Rev increased about $7 million. During the quarter, APT's through system volumes declined approximately 2 Bcf as it performed more maintenance during this quarter compared to the prior quarter.
Speaker #2: Partially offsetting these increases was a $23 million increase in consolidated O&M expense. We experienced a $12 million increase in compliance and safety-related spending associated with increased leak survey work and our distribution segment.
Speaker #2: However, spreads widened significantly to an average of $3.99 compared to $1.56 in the prior year quarter due to rising associated gas production and strained takeaway capacity and lower demand due to unseasonably warm weather during the first quarter.
Speaker #2: And the timing of maintenance work at APT that I had mentioned a moment ago. Additionally, employee-related costs increased approximately $5 million primarily due to increased headcount to support company growth and higher overtime and standby costs driven by increased service work.
Speaker #2: Partially offsetting these increases was a $23 million increase in consolidated own-end expense. We experienced a $12 million increase in compliance and safety-related spending associated with increased leak survey work and our distribution segment and the timing of maintenance work at APT that I mentioned a moment ago.
David Brown: We experienced a $12 million increase in compliance and safety-related spending associated with increased leak survey work in our distribution segment and the timing of maintenance work at APT that I mentioned a moment ago. Additionally, employee-related costs increased approximately $5 million primarily due to increased headcount to support company growth, and higher overtime and standby costs driven by increased service work. From a regulatory perspective, since the beginning of the fiscal year, we have implemented $123 million in annualized operating income increases in our distribution segment. Currently, we have 5 filings in progress seeking approximately $81 million in annualized operating income increases. We plan to make an additional filing this fiscal year seeking approximately $400 million in annualized operating income increases. During the quarter, we completed over $1 billion of long-term debt and equity financing, highlighted by the $600 million long-term debt financing we completed in October 2025.
Chris Forsythe: We experienced a $12 million increase in compliance and safety-related spending associated with increased leak survey work in our distribution segment and the timing of maintenance work at APT that I mentioned a moment ago. Additionally, employee-related costs increased approximately $5 million primarily due to increased headcount to support company growth, and higher overtime and standby costs driven by increased service work. From a regulatory perspective, since the beginning of the fiscal year, we have implemented $123 million in annualized operating income increases in our distribution segment. Currently, we have 5 filings in progress seeking approximately $81 million in annualized operating income increases. We plan to make an additional filing this fiscal year seeking approximately $400 million in annualized operating income increases. During the quarter, we completed over $1 billion of long-term debt and equity financing, highlighted by the $600 million long-term debt financing we completed in October 2025.
Speaker #2: From a regulatory perspective, since the beginning of the fiscal year, we have implemented $123 million in annualized operating income increases in our distribution segment.
Speaker #2: Additionally, employee-related costs increased approximately $5 million primarily due to increased headcount to support company growth and higher overtime and standby costs driven by increased service work.
Speaker #2: Currently, we have five filings in progress seeking approximately $81 million in annualized operating income increases that we plan to make an additional filing this fiscal year seeking approximately $400 million in annualized operating income increases.
Speaker #2: From a regulatory perspective, since the beginning of the fiscal year, we have implemented $123 million in annualized operating income increases in our distribution segment.
Speaker #2: During the quarter, we completed over $1 billion of long-term debt and equity financing highlighted by the $600 million long-term debt financing we completed in October 2025.
Speaker #2: Currently, we have five filings in progress seeking approximately $81 million in annualized operating income increases and we plan to make an additional filing this fiscal year seeking approximately $400 million in annualized operating income increases.
Speaker #2: Additionally, we settled $472 million in equity forward agreements. Our equity capitalization as of December 31st was 60%, and we do not have any short-term debt outstanding.
Speaker #2: During the quarter, we completed over $1 billion of long-term debt and equity financing highlighted by the $600 million long-term debt financing we completed in October 2025.
Speaker #2: We also had $4.6 billion in available liquidity. This amount includes approximately $1.1 billion in net proceeds available under existing forward sale agreements, which is expected to satisfy the remainder of our anticipated fiscal 26 equity needs and a portion of our anticipated equity needs for fiscal 27.
Speaker #2: Additionally, we settled $472 million in equity forward agreements. Our equity capitalization as of December 31st was 60% and we do not have any short-term debt outstanding.
David Brown: Additionally, we settled $472 million in equity forward agreements. Our equity capitalization as of December 31st was 60%, and we do not have any short-term debt outstanding. We also had $4.6 billion in available liquidity. This amount includes approximately $1.1 billion of net proceeds available under existing forward sale agreements, which is expected to satisfy the remainder of our anticipated fiscal 2026 equity needs and a portion of our anticipated equity needs for fiscal 2027. Our Q1 performance has us well positioned to achieve our rebased fiscal 2026 earnings per share guidance in the range of $8.15 to $8.35 per share. We remain on track to achieve our capital spending plan of $4.2 billion. Thank you for your time this morning. I will now open the call for questions.
Chris Forsythe: Additionally, we settled $472 million in equity forward agreements. Our equity capitalization as of December 31st was 60%, and we do not have any short-term debt outstanding. We also had $4.6 billion in available liquidity. This amount includes approximately $1.1 billion of net proceeds available under existing forward sale agreements, which is expected to satisfy the remainder of our anticipated fiscal 2026 equity needs and a portion of our anticipated equity needs for fiscal 2027. Our Q1 performance has us well positioned to achieve our rebased fiscal 2026 earnings per share guidance in the range of $8.15 to $8.35 per share. We remain on track to achieve our capital spending plan of $4.2 billion. Thank you for your time this morning. I will now open the call for questions.
Speaker #2: Our first quarter performance, as is well positioned to achieve our rebased fiscal 26 earnings per share guidance in the range of $8.15 to $8.35 per share.
Speaker #2: We also had $4.6 billion in available liquidity. This amount includes approximately $1.1 billion in net proceeds available under existing forward sale agreements which is expected to satisfy the remainder of our anticipated fiscal 26 equity needs and a portion of our anticipated equity needs for fiscal 27.
Speaker #2: And we remain on track to achieve our capital spending plan of $4.2 billion. Thank you for your time this morning. I will now open the call for questions.
Speaker #2: Our first quarter performance has us well positioned to achieve our rebased fiscal '26 earnings per share guidance in the range of $8.15 to $8.35 per share.
Speaker #3: At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad.
Speaker #3: And your first question comes from Julian Demolen-Smith with Jefferies. Please go ahead.
Speaker #2: And we remain on track to achieve our capital spending plan of $4.2 billion. Thank you for your time this morning. I will now open the call for
Speaker #4: Hey, good morning, team. Nicely done. I got to say, as always. And thank you for the time. Maybe just to kick things off, you just commented in your remarks and in the queue here about the $35 million benefit.
Speaker #2: questions. At this time, I
David Brown: At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. Your first question comes from Julian Dumoulin-Smith with Jefferies. Please go ahead. Hey, good morning, team. Nicely done, I got to say, as always. And thank you for the time. Maybe just to kick things off, you just commented in your remarks and in the queue here about the $35 million benefit for the quarter. Can you talk a little bit about how we should think about that ratably through the year here and just ultimately what that might imply as you think about an annualized benefit relative to the guidance you guys gave? Seems like it puts you guys in a good place, so I'd love to get your thoughts. Yeah, good morning, Julian. Thank you, Julian, for joining us this morning.
Operator: At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. Your first question comes from Julian Dumoulin-Smith with Jefferies. Please go ahead.
Speaker #3: would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. And your first question comes from Julian Dumoulin-Smith with Jefferies.
Speaker #4: For the quarter, can you talk a little bit about how we should think about that readably through the year here and just ultimately what that might imply as you think about an annualized like it puts you guys in a good place.
Speaker #3: Please go ahead.
Julian Dumoulin-Smith: Hey, good morning, team. Nicely done, I got to say, as always. And thank you for the time. Maybe just to kick things off, you just commented in your remarks and in the queue here about the $35 million benefit for the quarter. Can you talk a little bit about how we should think about that ratably through the year here and just ultimately what that might imply as you think about an annualized benefit relative to the guidance you guys gave? Seems like it puts you guys in a good place, so I'd love to get your thoughts.
Speaker #4: Hey, good morning, team. Nicely done. I got to say, as always. And thank you for the time. Maybe just to kick things off, you just commented in your remarks and in the queue here about the $35 million benefit.
Speaker #4: I'd love to get
Speaker #4: your thoughts. Yeah, good
Speaker #2: morning, Julian. Thank you. And thank you for joining us this morning. And yes, we're off to a good start for the fiscal year. And as we talked about before, the influence or the impact of the deferrals under House Bill 4384 will be influenced by the timing of our spending, the timing of project closings, and the underlying operational activities of the company.
Speaker #4: For the quarter, can you talk a little bit about how we should think about that readably through the years here and just ultimately what that might imply as you think about an annualized benefit relative to the guidance you guys gave?
Speaker #4: Seems like it puts you guys in a good place. I'd love to get your thoughts.
Chris Forsythe: Yeah, good morning, Julian. Thank you, Julian, for joining us this morning. Yes, we're off to a good start for the fiscal year. As we talked about before, the influence or the impact of the deferrals under House Bill 4384 will be influenced by the timing of our spending, the timing of project closings, and the underlying operational activities of the company. Right now, off to a good start, $35 million quarter-over-quarter. We are still holding firm right now on our earnings per share guidance of 815 to 835. We'll see what the Q2 brings for us. Got it. But just to putting that a little bit further, would you assume that that's a good run rate, at least for the purposes of this year? I know it ties CapEx timing driven.
Speaker #5: Yeah, good morning, Julian. Thank you. And thank you for joining us this morning. And yes, we're off to a good start for the fiscal year.
Speaker #2: So it's right now, off to a good start, $35 million quarter over quarter. And we are still holding firm right now on our earnings per share guidance of 8.15 to 8.35.
David Brown: Yes, we're off to a good start for the fiscal year. As we talked about before, the influence or the impact of the deferrals under House Bill 4384 will be influenced by the timing of our spending, the timing of project closings, and the underlying operational activities of the company. Right now, off to a good start, $35 million quarter-over-quarter. We are still holding firm right now on our earnings per share guidance of 815 to 835. We'll see what the Q2 brings for us. Got it. But just to putting that a little bit further, would you assume that that's a good run rate, at least for the purposes of this year? I know it ties CapEx timing driven.
Speaker #5: As we talked about before, the influence or the impact of the deferrals under House Bill 4384 will be influenced by the timing of our closings, and the spending, the timing of project underlying operational activities of the company.
Speaker #2: And we'll see what the second quarter brings for
Speaker #2: us. Got it.
Speaker #4: But just putting that a little bit further, would you assume that that's a good run rate, at least for the purpose of this year?
Speaker #5: now, off to a good start, $35 So it's right million quarter over quarter. And we are still holding firm right now on our earnings per share guidance of 8.15 to 8.35.
Speaker #4: I know it's CapEx timing-driven, and any reason why you wouldn't for the purpose of our conversation start to do that, or at least do some kind of ratio relative to CapEx against annualized
Speaker #5: And we'll see what the second quarter brings for us.
Speaker #4: targets? I think
Speaker #2: it's going to depend upon the flow of spend in the quarter. As we've had here the last busy operationally focused around supporting winter storm firms or construction activities were down a little bit obviously than we're now beginning to ramp that back up.
Speaker #4: Got it. But just putting that a little bit further, would you assume that that's a good run rate, at least for the purpose of this year?
Speaker #4: I know it's CapEx timing-driven. Any reason why you wouldn't for the purpose of our conversation start to do that or at least do some kind of ratio relative to CapEx against annualized
David Brown: Any reason why you wouldn't, for the purposes of our conversation, start to do that or at least do some kind of ratio relative to CapEx against annualized targets? I think it's going to depend upon the flow of spend in the quarter. As we've had here the last couple of weeks, a very busy operationally focused around supporting Winter Storm Bern, or construction activities were down a little bit, obviously, and we're now beginning to ramp that back up. And I think it'd be dangerous to say take 35 and multiply by 4. As a reminder, year-over-year, we did have the impact of the House Bill 4384 in the Q4 last year. So I would probably steer clear of just going too strong at this point and just saying 35 times 4 and moving forward. Yeah. No, no, fair enough.
Chris Forsythe: Any reason why you wouldn't, for the purposes of our conversation, start to do that or at least do some kind of ratio relative to CapEx against annualized targets? I think it's going to depend upon the flow of spend in the quarter. As we've had here the last couple of weeks, a very busy operationally focused around supporting Winter Storm Bern, or construction activities were down a little bit, obviously, and we're now beginning to ramp that back up. And I think it'd be dangerous to say take 35 and multiply by 4. As a reminder, year-over-year, we did have the impact of the House Bill 4384 in the Q4 last year. So I would probably steer clear of just going too strong at this point and just saying 35 times 4 and moving forward.
Speaker #2: And I'd be thinking the dangers to say take 35 and multiply by 4. As a reminder, year over year, we did have the impact of the House Bill 4384 in the fourth quarter last year.
Speaker #4: targets? I think it's
Speaker #5: going to depend upon the flow of spend in the quarter. As we've had here the last couple of weeks, a very busy operationally focused around supporting winter storm firms or construction activities were down a little bit.
Speaker #2: probably steer clear of just going too So I would strong at this point and just saying 35 times 4 and moving
Speaker #5: Obviously, we're now beginning to ramp that back up. And I think it'd be dangerous to say take 35 and multiply by 4. As a reminder, year over year, we did have the impact of the House Bill 4384 in the fourth quarter last year.
Speaker #2: forward. Yeah.
Speaker #4: No, no, fair winter storm, I mean, obviously, folks are zeroed in on and certainly cognizant of the impact to customers. How do you think about the preliminary financial impacts here, if you can break that down a little bit?
Speaker #5: So I would probably steer clear of just going too strong at this point and just saying 35 times 4 and moving forward.
Speaker #4: I mean, obviously, there's the working capital consideration and ultimately there's a few other moving pieces. Do you care to elaborate a little bit further, just given the history?
Julian Dumoulin-Smith: Yeah. No, no, fair enough. And then just as it pertains to the winter storm, I mean, obviously, folks are zeroed in on, and certainly cognizant of, the impact to customers. How do you think about the preliminary financial impacts here, if you can break that down a little bit? I mean, obviously, there's working capital consideration, and ultimately, there's a few other moving pieces. Do you care to elaborate a little bit further, just given the history?
Speaker #4: Yeah, no, no, fair enough. And then just as it pertains to the winter storm—I mean, obviously, folks are zeroed in on, and certainly cognizant of, the impact to customers.
David Brown: And then just as it pertains to the winter storm, I mean, obviously, folks are zeroed in on, and certainly cognizant of, the impact to customers. How do you think about the preliminary financial impacts here, if you can break that down a little bit? I mean, obviously, there's working capital consideration, and ultimately, there's a few other moving pieces. Do you care to elaborate a little bit further, just given the history? Yeah, Julian, maybe rephrase your question because I'm not quite following you there. Were you talking about gas costs itself, or? Yeah, I was thinking about just the balance sheet and the earnings impact from the winter storm in the last couple of weeks cumulatively. Yeah, so let's start with the winter storm itself. It was very significant.
Speaker #2: Yeah, Jay, maybe rephrase your question because I'm not quite following you there where you're talking about gas costs.
Speaker #4: How do you think about the preliminary financial impacts here if you can break that down a little bit? I mean, obviously, this is working capital consideration and ultimately, there's a few other moving pieces.
Speaker #4: Yeah, I was thinking about the just the balance sheet and the earnings impact from the winter storm in the last couple of weeks
Speaker #4: cumulatively.
Speaker #4: Do you care to elaborate a little bit further, just given the—
Speaker #2: Yeah,
Kevin Akers: Yeah, Julian, maybe rephrase your question because I'm not quite following you there. Were you talking about gas costs itself, or?
Speaker #2: very significant. As you saw, the icing across all of the country, I think 40 states were impacted at one point by the storm. But the storm was not nearly as significant as Yuri.
Speaker #5: Yeah, history? Jay, maybe rephrase your question because I'm not quite following you there where you're talking about gas costs.
Speaker #4: Yeah. I was thinking about the just the balance sheet and the earnings impact from the winter storm in the last couple of weeks cumulatively.
Julian Dumoulin-Smith: Yeah, I was thinking about just the balance sheet and the earnings impact from the winter storm in the last couple of weeks cumulatively.
Speaker #2: I think the upstream supply, as we've reported, and I think you'll hear from some of the other folks that do upstream of us, supply performed very well.
Kevin Akers: Yeah, so let's start with the winter storm itself. It was very significant. As you saw, the icing across all of the country, I think 40 states were impacted at one point by the storm. But the storm was not nearly as significant as Uri. I think the upstream supply, as we reported, and I think you'll hear from some of the other folks that do upstream of us, supply performed very well. We had minimal supply issues. And what we did have, we were able to backfill with storage itself to keep a steady and reliable supply of natural gas flowing. And with that, we had an exceptional gas supply plan laid out from base load to peaking contracts to some spot purchases to our storage supply. So again, I don't think you're going to see the impact as you did in Uri, both on the operational nor financing from gas supply costs related to Winter Storm Uri's.
Speaker #5: Yeah. So let's start with the winter storm itself. It was very significant. As you saw, the icing across all of the country, I think 40 states were impacted at one point by the storm.
David Brown: As you saw, the icing across all of the country, I think 40 states were impacted at one point by the storm. But the storm was not nearly as significant as Uri. I think the upstream supply, as we reported, and I think you'll hear from some of the other folks that do upstream of us, supply performed very well. We had minimal supply issues. And what we did have, we were able to backfill with storage itself to keep a steady and reliable supply of natural gas flowing. And with that, we had an exceptional gas supply plan laid out from base load to peaking contracts to some spot purchases to our storage supply. So again, I don't think you're going to see the impact as you did in Uri, both on the operational nor financing from gas supply costs related to Winter Storm Uri's. All right. That's great.
Speaker #2: We had minimal supply issues. And what we did have, we were able to backfill with storage itself. To keep a steady and reliable supply of natural gas flowing.
Speaker #5: But the storm was not nearly as significant as Yuri. I think the upstream supply, as we've reported, and I think you'll hear from some of the other folks that do upstream of us, supply performed very well.
Speaker #2: And with that, we had an exceptional gas supply plan laid out from base load. To peaking contracts, to some spot purchases, to our storage supply.
Speaker #5: We had minimal supply issues. And what we did have, we were able to backfill with storage itself. To keep a steady and reliable supply of natural gas flowing.
Speaker #2: So again, I don't think you're going to see the impact as you did in Yuri, both on the operational nor a financing from gas supply costs related to winter storm
Speaker #5: And with that, we had an exceptional gas supply plan laid out—from base load, to peaking contracts, to some spot purchases, to our storage supply.
Speaker #2: firm. All right.
Speaker #4: That's great. All right. Well, look, I'll leave it there. Thank you guys very much. I appreciate the time today.
Speaker #5: So again, I don't think you're going to see the impact as you did in Uri, both on the operational nor a financing from gas supply cost related to winter storm firm.
Speaker #2: Thank you. Thanks, Julian.
Speaker #3: Your next question comes from the line of David Akara with Morgan Stanley. Please go
Speaker #3: ahead.
Speaker #5: Hey, thanks
Speaker #5: so much. Good morning. Good
Julian Dumoulin-Smith: All right. That's great. All right. Well, look, I'll leave it there. Thank you guys very much. I appreciate the time today.
Speaker #2: morning.
Speaker #4: All right. That's great. All right. Well, look, I'll leave it there. Thank you guys very much. I appreciate the—
Speaker #5: could maybe touch on what you're hearing maybe on the ground and in some of your regulatory proceedings going on with regard to affordability pressures.
David Brown: All right. Well, look, I'll leave it there. Thank you guys very much. I appreciate the time today. Thank you. Thanks, Julian. Your next question comes from the line of David Arcaro with Morgan Stanley. Please go ahead. Hey, thanks so much. Good morning. Good morning. I was wondering if you could maybe touch on what you're hearing maybe on the ground and in some of your regulatory proceedings going on with regard to affordability pressures. Is this an issue that you're seeing migrate into the gas LDC space? Is it coming up politically surrounding the cost of natural gas? What are you seeing on the ground right now? It's always a part of what we talked about with our commissions. It's always top of mind for us.
Speaker #4: time today. Thank you.
Kevin Akers: Thank you.
Chris Forsythe: Thanks, Julian.
Speaker #5: Thanks, Julian.
Julian Dumoulin-Smith: Your next question comes from the line of David Arcaro with Morgan Stanley.Please go ahead.
Speaker #3: Your next question comes from the line of David Akara with Morgan Stanley. Please go ahead.
Speaker #5: Is this an issue that you're seeing migrate into the gas LDC space? Is it coming up politically surrounding the cost of natural gas? What do you see on the ground right
David Arcaro: Hey, thanks so much. Good morning. Good morning. I was wondering if you could maybe touch on what you're hearing maybe on the ground and in some of your regulatory proceedings going on with regard to affordability pressures. Is this an issue that you're seeing migrate into the gas LDC space? Is it coming up politically surrounding the cost of natural gas? What are you seeing on the ground right now?
Speaker #6: Hey, thanks so much. Good morning.
Speaker #5: Good
Speaker #5: morning.
Speaker #6: I was wondering if you could maybe
Speaker #6: Touch on what you're hearing, maybe on the ground and in some of your regulatory proceedings going on with regard to affordability pressures. Is this an issue that you're seeing migrate into the gas LTC space?
Speaker #5: now? It's always a part
Speaker #2: of what we talked about with our commissions. It's always top of mind for us. And I'll point you back to our deck in slides 15 through 17, I believe that's in the deck there and how we look at the metrics around affordability.
Speaker #6: Is it coming up politically, surrounding the cost of natural gas? What are you seeing on the ground right now?
Speaker #2: But it's always a topic we continue to have with our regulators. They understand the need for our investment just as it helped us get through winter storm firm.
Kevin Akers: It's always a part of what we talked about with our commissions. It's always top of mind for us. I'll point you back to our deck in slides 15 through 17, I believe. That's in the deck there, and how we look at the metrics around affordability. But it's always a topic we continue to have with our regulators. They understand the need for our investment just as it helped us get through Winter Storm Bern. You have to start these things year in advance in prepping your system, putting on additional supply upstream of that, increasing your capacity on your pipelines, and bringing on more additional supply points. All those go into that equation for reliability on a go-forward basis for our customers. But again, it's more the conversation. We're not getting any sort of negative feedback or impression from our regulators at this point as they understand the need to maintain reliability and safety across the system.
Speaker #5: It's always a part of what we talked about with our commissions. It's always top of mind for us. And I'll point you back to our deck, in slides 15 through 17—I believe that's in the deck there—and how we look at the metrics around affordability.
Speaker #2: You have to start these things year in advance and prepping your system, putting on additional supply upstream of that, increasing your capacity on your pipelines, bringing on more additional supply points.
David Brown: I'll point you back to our deck in slides 15 through 17, I believe. That's in the deck there, and how we look at the metrics around affordability. But it's always a topic we continue to have with our regulators. They understand the need for our investment just as it helped us get through Winter Storm Bern. You have to start these things year in advance in prepping your system, putting on additional supply upstream of that, increasing your capacity on your pipelines, and bringing on more additional supply points. All those go into that equation for reliability on a go-forward basis for our customers. But again, it's more the conversation. We're not getting any sort of negative feedback or impression from our regulators at this point as they understand the need to maintain reliability and safety across the system. Okay, got it. Understood.
Speaker #5: But it's always a topic we continue to have with our regulators. They understand the need for our investment, just as it helped us get through Winter Storm Uri.
Speaker #2: All those go into that equation for reliability. On a go-forward basis for our customers. But again, it's more the conversation. We're not getting any sort of negative feedback or impression from our regulators.
Speaker #5: You have to start these things year in advance and prepping your system, putting on additional supply upstream of that, increasing your capacity on your pipelines, bringing on more additional supply points, all those go into that equation for reliability.
Speaker #2: At this point, as they understand the need to maintain reliability and safety across the
Speaker #2: system. Okay.
Speaker #5: Got it. Understood. And I wanted to check in to see whether you're seeing any inflection or meaningful projects on the gas power side of things, either major power plants moving forward or what we're seeing is on-site power using natural gas at data centers at pretty high volumes.
Speaker #5: On a go-forward basis for our customers. But again, it's more the conversation. We're not getting any sort of negative feedback or impression from our regulators.
Speaker #5: At this point, as they understand the need to maintain reliability and safety across the system.
David Arcaro: Okay, got it. Understood. And wanted to check in to see whether you're seeing any inflection or meaningful projects on the gas power side of things, either major power plants moving forward or what we're seeing is on-site power using natural gas at data centers at pretty high volumes. So are you seeing more activity or opportunities there?
Speaker #6: Okay, got it. Understood. And I wanted to check in to see whether you're seeing any inflection or meaningful projects on the gas power side of things—either major power plants moving forward, or what we're seeing is on-site power using natural gas at data centers, at pretty high volumes.
Speaker #5: So are you seeing more activity or opportunities there?
David Brown: And wanted to check in to see whether you're seeing any inflection or meaningful projects on the gas power side of things, either major power plants moving forward or what we're seeing is on-site power using natural gas at data centers at pretty high volumes. So are you seeing more activity or opportunities there? As we said before, we continue to get inquiries around large loads, whether they're data centers themselves or additional power generation. We'll share more about those once we have a signed contract. We don't want to get out in front and have to walk any of that sort of load back at this point. But we continue to get inquiries. Our engineering, our operations teams continue to investigate those, respond to those data requests. But when we have something to report, we'll bring those forward.
Speaker #2: As we said before, we continue to get inquiries around large loads, whether they're data centers themselves or additional power generation. We'll share more about those once we have a signed contract; we don't want to get out in front.
Speaker #6: So, are you seeing more activity or opportunities?
Speaker #2: And have to walk any of that sort of load back at this point. But we continue to get inquiries. Our engineering, our operations teams continue to investigate those and respond to those data requests.
Speaker #6: there? As we
Kevin Akers: As we said before, we continue to get inquiries around large loads, whether they're data centers themselves or additional power generation. We'll share more about those once we have a signed contract. We don't want to get out in front and have to walk any of that sort of load back at this point. But we continue to get inquiries. Our engineering, our operations teams continue to investigate those, respond to those data requests. But when we have something to report, we'll bring those forward.
Speaker #5: said before, we continue to get inquiries around large loads, whether they're data centers themselves or additional power generation. We'll share more about those once we have a signed contract.
Speaker #2: But when we have something to report, we'll bring those forward. And as you know, APT already serves some power gen facilities across its transmission footprint as well
Speaker #5: We don't want to get out in front and have to walk any of that sort of load back at this point. But we continue to get inquiries.
Speaker #2: today. Okay.
Speaker #5: Our engineering, our operations teams continue to investigate those and respond to those data requests. But when we have something to report, we'll bring those forward.
Speaker #5: Great. Thanks so
Speaker #5: much. Your next
Speaker #3: question comes from the line of Jeremy Tonnette with JP Morgan. Please go ahead.
Speaker #5: And as you know, APT already serves some power gen facilities across its transmission footprint as well today.
David Brown: As you know, APT already serves some PowerGen facilities across its transmission footprint as well today, so. Okay, great. Thanks so much. Your next question comes from the line of Jeremy Tonet with JPMorgan. Please go ahead. Hey, good morning. This is Eli on for Jeremy. Wanted to start on the, yeah, good morning. The special election that was just recently happened in Texas, there was a Democrat seat, I believe, that flipped. Is there any impact overall or, I mean, how do you guys kind of see that outcome in relation to the business? Thanks. Yeah, we're apolitical. We work with R's and D's and I's or anybody to share our stakeholder strategy, why we do the things we do, why it's important for our communities, why natural gas is important for our customers, why it's important for economic development.
Kevin Akers: As you know, APT already serves some PowerGen facilities across its transmission footprint as well today, so.
Speaker #6: Hey, good morning. This is Eli on for Jeremy. Wanted to start on the, yeah, good morning, the special election that was just recently happened in Texas.
David Arcaro: Okay, great. Thanks so much.
Speaker #6: Okay. Great. Thanks so much.
Operator: Your next question comes from the line of Jeremy Tonet with JPMorgan. Please go ahead.
Speaker #6: There was a Democrat seat, I believe, that flipped. Is there any impact overall, or I mean, how do you guys kind of see that outcome in relation to the business?
Speaker #3: Your next question comes from the line of Jeremy Tennant with JP Morgan. Please go
Jeremy Tonet: Hey, good morning. This is Eli on for Jeremy. Wanted to start on the, yeah, good morning. The special election that was just recently happened in Texas, there was a Democrat seat, I believe, that flipped. Is there any impact overall or, I mean, how do you guys kind of see that outcome in relation to the business? Thanks.
Speaker #7: Hey, good morning. This is Eli on for Jeremy. Wanted to start on the—yeah, good morning. The special election that just recently happened in Texas.
Speaker #6: Thanks.
Speaker #2: Yeah,
Speaker #2: we're apolitical. We work with Rs and Ds and Is or anybody to share our stakeholder strategy, why we do the things we do, why it's important for our communities.
Speaker #7: There was a Democrat seat, I believe, that flipped. Is there any impact overall, or I mean, how do you guys kind of see that outcome in relation to the business?
Speaker #2: Why natural gas is important for our customers, why it's important for economic development. And we've been around for 43 years now. And we've been through many administration changes, both at the federal, state, and city level, county level as well.
Kevin Akers: Yeah, we're apolitical. We work with R's and D's and I's or anybody to share our stakeholder strategy, why we do the things we do, why it's important for our communities, why natural gas is important for our customers, why it's important for economic development.
Speaker #5: Yeah.
Speaker #5: We're Thanks. apolitical. We work with Rs and Ds and Is or anybody to share our stakeholder strategy, why we do the things we do, why it's important for our communities.
Speaker #2: And again, we see ourselves as an essential energy source for our communities. And we'll work with anybody that is in public office today or has an interest in what we do.
Speaker #5: Why natural gas is important for our customers, why it's important for economic development. And we've been around for 43 years now, and we've been through many administration changes, both at the federal, state, and city level, county level as well.
David Brown: And we've been around for 43 years now, and we've been through many administration changes, both at the federal, state, and city level, county level as well. And again, we see ourselves as an essential energy source for our communities, and we'll work with anybody that is in public office today or has an interest in what we do. Awesome. And then maybe just shifting to the Mississippi rate case outcome and kind of the process going forward, how do you adjust your plan for outcomes in that jurisdiction going forward? Well, one, and I'll let Chris follow up here in a second, there's not an adjustment to plan. Remember, we say at our November call when we lay out our five-year plan and we update it every quarter, Chris and I both mentioned it on this call, 85%+ of our investment goes towards safety and reliability.
Kevin Akers: And we've been around for 43 years now, and we've been through many administration changes, both at the federal, state, and city level, county level as well. And again, we see ourselves as an essential energy source for our communities, and we'll work with anybody that is in public office today or has an interest in what we do.
Speaker #6: Awesome. And then maybe just shifting to the Mississippi rape case outcome and kind of the process going forward. How do you adjust your plan for outcomes in that jurisdiction going
Speaker #5: And again, we see ourselves as an essential energy source for our communities. And we'll work with anybody that is in public office today or has an interest in what we do.
Speaker #6: forward? Well,
Speaker #2: one, in all that Chris follow-up here in a second, there's not an adjustment to plan. Remember, we say at our November call when we lay out our five-year plan, we update it every quarter.
Jeremy Tonet: Awesome. And then maybe just shifting to the Mississippi rate case outcome and kind of the process going forward, how do you adjust your plan for outcomes in that jurisdiction going forward?
Speaker #7: Awesome. And then maybe just shifting to the Mississippi rape case outcome and kind of the process going forward. How do you adjust your plan for outcomes in that jurisdiction going forward?
Speaker #2: Chris and I both mentioned it on this call. 85-plus percent of our investment goes towards safety, reliability. That does not change our plan. It is all driven by the needs of our system, the growth on our system, the demand across our system, the safety across our system.
Kevin Akers: Well, one, and I'll let Chris follow up here in a second, there's not an adjustment to plan. Remember, we say at our November call when we lay out our five-year plan and we update it every quarter, Chris and I both mentioned it on this call, 85%+ of our investment goes towards safety and reliability.
Speaker #5: Well, one, and I'll let Chris follow up here in a second, there's not an adjustment to plan. Remember, we say at our November call when we lay out our five-year plan and we update it every quarter—Chris and I both mentioned it on this call.
Speaker #2: That's what drives our plans out there. And that's what's going to continue to fuel our plans in the state of Mississippi.
Speaker #5: 85-plus percent of our investment goes towards safety, reliability. That does not change our plan. It is all driven by the needs of our system, the growth on our system, the demand across our system, the safety across our system.
Speaker #4: Yeah. I would add to that, Jeremy. I mean, since the outcome we've been in regular dialogue with the commission, first working to implement the tariff, that to reflect the order that came out late last year, a tariff was filed in early January.
David Brown: That does not change our plan. It is all driven by the needs of our system, the growth on our system, the demand across our system, the safety across our system. That's what drives our plans out there. And that's what's going to continue to fuel our plans in the state of Mississippi. Yeah, I would add to that, Jeremy. I mean, since the outcome, we have been in regular dialogue with the commission, first working to implement the tariff to reflect the order that came out late last year. That tariff was filed in early January. We're expecting a decision potentially today on that. Including that tariff is also a request for deferral-like mechanisms, as well as other opportunities to potentially mitigate or reduce lag going forward. We still have an annual filing mechanism in the state. It's now on a historical test basis.
David Brown: That does not change our plan. It is all driven by the needs of our system, the growth on our system, the demand across our system, the safety across our system. That's what drives our plans out there. And that's what's going to continue to fuel our plans in the state of Mississippi.
Speaker #5: That's what drives our plans out there. And that's what's going to continue to fuel our plans in the state of Mississippi.
Chris Forsythe: Yeah, I would add to that, Jeremy. I mean, since the outcome, we have been in regular dialogue with the commission, first working to implement the tariff to reflect the order that came out late last year. That tariff was filed in early January. We're expecting a decision potentially today on that. Including that tariff is also a request for deferral-like mechanisms, as well as other opportunities to potentially mitigate or reduce lag going forward. We still have an annual filing mechanism in the state. It's now on a historical test basis.
Speaker #4: We're expecting a decision potentially today on that, including that tariff is also a request for deferral-like mechanisms as well as other opportunities to potentially mitigate or reduce flag going forward.
Speaker #2: Yeah. I would add to that, Jeremy. I mean, since the outcome, we have been in regular dialogue with the commission first, working to implement the tariff that to reflect the order that came out late last year.
Speaker #4: We still have an annual funding mechanism in the state. It's now on a historical test basis. So we're evaluating that from the forward look back to historical look.
Speaker #2: That tariff was filed in early January. We're expecting a decision potentially today on that. Included in that tariff is also a request for deferral-like mechanisms, as well as other opportunities to potentially mitigate or reduce flag going forward.
Speaker #4: And we've also you've probably seen in the public notice in and modeling the impact of shifting early January we filed a public notice of our intent to appeal the decision to the State Supreme Court in Mississippi and we are working through that process as we speak.
Speaker #2: We still have an annual filing mechanism in the state. It's now on a historical test basis, so we're evaluating and modeling the impact of shifting that from a forward look back to a historical look.
David Brown: So we've been evaluating and modeling the impact of shifting that from a forward look back to historical look. And we've also, you've probably seen in the public notice, in early January, we filed a public notice of our intent to appeal the decision to the State Supreme Court in Mississippi, and we are working through that process as we speak. So a lot going on. I mean, a lot that we're taking into evaluate, but it's also stepping back at a bigger picture. Mississippi is roughly 5% of business, so we believe we've got the ability to absorb whatever outcome comes through in our plans going forward. Great. Thanks for the caller. I'll leave it there. Thank you. Your next question comes from the line of Fei Xie with Barclays. Please go ahead. Hey, good morning. It's actually Nick Campanella on. Hope you can hear me.
Chris Forsythe: So we've been evaluating and modeling the impact of shifting that from a forward look back to historical look. And we've also, you've probably seen in the public notice, in early January, we filed a public notice of our intent to appeal the decision to the State Supreme Court in Mississippi, and we are working through that process as we speak. So a lot going on. I mean, a lot that we're taking into evaluate, but it's also stepping back at a bigger picture. Mississippi is roughly 5% of business, so we believe we've got the ability to absorb whatever outcome comes through in our plans going forward. Great. Thanks for the caller. I'll leave it there.
Speaker #4: So a lot going on. We're taking into evaluation, but it's also stepping back at a bigger picture in Mississippi is roughly 5% of the business.
Speaker #2: And we've also—you've probably seen in the public notice—in early January, we filed a public notice of our intent to appeal the decision to the State Supreme Court in Mississippi, and we are working through that process as we speak.
Speaker #4: So we believe we've got the ability to absorb whatever outcome comes through in our plans going forward.
Speaker #6: Great. Thanks for the caller. I'll
Speaker #6: leave it there. Thank
Speaker #2: So a lot going on. I mean, a lot that we're taking into evaluate, but it's also stepping back at a bigger picture. Mississippi is roughly 5% of the business.
Speaker #3: Your next you. question comes from the line of Fei She with Barclays. Please go
Speaker #3: ahead. Hey, good morning.
Speaker #2: So we believe we've got the ability to absorb whatever outcome comes through in our plans going forward.
Speaker #7: It's actually Nick Campanella on. Hope you can hear me.
Speaker #4: Yeah, we sure can, Nick.
Speaker #7: Yeah. Thanks. Yeah. Hey, hope everything's well. So I just wanted to ask just the 21-cent Texas benefit in the
Speaker #7: Great. Thanks for the call. I'll leave it.
Speaker #7: there. Thank
Jeremy Tonet: Thank you.
Speaker #5: you.
Operator: Your next question comes from the line of Fei Xie with Barclays. Please go ahead. Hey, good morning. It's actually Nick Campanella on. Hope you can hear me.
Speaker #3: comes from the line of Fei Xi with Your next question Berkeley. Please go
Speaker #1: The quarter something that we can Is that annualize or just how would you how would you kind of frame 40 cent against the guide that that originally pointed you to ?
Speaker #3: ahead.
Speaker #8: Hey, good morning. It's actually Nick Campanella
Speaker #8: on. Hope you can hear
Speaker #8: me. Yeah.
David Brown: Yeah, we sure can, Nick. Thanks for the call. Yeah, hey. Hope everything's well. So I just wanted to ask just the $0.21 Texas benefit in the quarter, is that something that we can annualize or just how would you kind of frame that against the $0.40 guide that you originally pointed to? Yeah, so Nick, so the impact on a quarter was approximately $0.16. As I was chatting with Julian at the top of the call, if to say that you can just simply take a run rate, multiply by 3 or 4 to get through that because the underlying operations are impacting the timing of those deferrals. So we said it a few minutes ago, we'll just take it quarter by quarter as we work through this first year of implementation, and we'll see where the second quarter brings us.
Fei She: Yeah, we sure can, Nick. Thanks for the call. Yeah, hey. Hope everything's well. So I just wanted to ask just the $0.21 Texas benefit in the quarter, is that something that we can annualize or just how would you kind of frame that against the $0.40 guide that you originally pointed to?
Speaker #2: We sure can, Nick.
Speaker #2: Yeah . So , so the Nick , impact on the quarter was approximately $0.16 . And as I was .
Speaker #8: Thanks. Yeah. Hey, hope everything's well. So I just wanted to ask just the 21 cents Texas benefit in the quarter. Is that something that we can annualize or just how would you kind of frame that against the 40 cent guide that you originally pointed to?
Speaker #1: Chatting , we pointed to .
Speaker #2: So Nick Yeah . , so impact on the the quarter was approximately $0.16 . And as I chatting with Julian was at the top of the call , you know , we'd have to say that you can just simply run rate take a , multiply by 3 or 4 to get through that , because the underlying are impacting the timing of operations those deferrals .
Chris Forsythe: Yeah, so Nick, so the impact on a quarter was approximately $0.16. As I was chatting with Julian at the top of the call, if to say that you can just simply take a run rate, multiply by 3 or 4 to get through that because the underlying operations are impacting the timing of those deferrals. So we said it a few minutes ago, we'll just take it quarter by quarter as we work through this first year of implementation, and we'll see where the second quarter brings us.
Speaker #2: Yeah. So Nick, so the impact on the quarter was approximately 16 cents. And as I was chatting with Julian at the top of the call, we have to say that you can simply take a run rate multiplied by three or four to get through that because the underlying operations are impacting the timing of those deferrals.
Speaker #2: So said it a few minutes ago . We'll just take it quarter by quarter work through as we this first year of implementation .
Speaker #2: And we'll see we the second quarter brings us . have an update for you at that And we'll point .
Speaker #2: So we said a few minutes ago, we'll just take it quarter by quarter as we work through this first year of implementation. And we'll see where the second quarter brings us.
Speaker #1: Okay Okay . . And then just I just wanted to make sure I was just directly understanding this . Benefit . You know , it's kind of a similar benefit than what was booked in last fourth quarter year .
Speaker #2: And we'll have an update for you at that time.
David Brown: And we'll have an update for you at that point. Okay. Okay. And then I just wanted to make sure I was just directly understanding that the benefit, it's kind of a similar benefit than what was booked in Q4 last year. Would it be kind of like three times the benefit given you did about $1 billion of the $4 billion of CapEx this quarter? Is that the right way to answer through this? Yeah, I mean, again, $0.25 through the year. A lot needs to occur between now and then operationally. As Kevin talked about, we've been focused the last couple of weeks on winter operations, which has put capital on the back burner. So as we come through that right now, when we get back up to speed, we'll see what the impact is on the deferrals.
Chris Forsythe: And we'll have an update for you at that point.
Speaker #2: point. Okay.
Fei She: Okay. Okay. And then I just wanted to make sure I was just directly understanding that the benefit, it's kind of a similar benefit than what was booked in Q4 last year. Would it be kind of like three times the benefit given you did about $1 billion of the $4 billion of CapEx this quarter? Is that the right way to answer through this?
Speaker #8: Okay. And then I just wanted to make sure I was just directly understanding the benefit it's kind of a similar benefit than what was booked in fourth quarter last year.
Speaker #1: Like would it be kind of like three times the benefit given , you know , you did about the 1 billion of 4 billion of this quarter , CapEx just is that the right way to this ?
Speaker #8: Would it be kind of like three times the benefit given you did about 1 billion of the 4 billion of CapEx this quarter? Just is that the right way to
Speaker #2: again , mean , Yeah , I 25% through the year , a lot needs to between now occur operationally , you know , as Kevin as talked about , we've been last focused the couple of weeks on winter which has put a , you operations , capital on the back burner .
Speaker #8: answer this? Yeah.
Chris Forsythe: Yeah, I mean, again, $0.25 through the year. A lot needs to occur between now and then operationally. As Kevin talked about, we've been focused the last couple of weeks on winter operations, which has put capital on the back burner. So as we come through that right now, when we get back up to speed, we'll see what the impact is on the deferrals. But again, I would caution against just taking a simple number and multiplying by 3 or 4 at this point in time.
Speaker #2: I mean, again, 25% through the year, a lot needs to occur between now and then. Operationally, as Kevin talked about, we've been focused the last couple of weeks on winter operations.
Speaker #2: So as we come up through that right now , when we get back up to speed , we'll see what the impact is on But deferrals .
Speaker #2: I again , would caution against just taking a simple number and multiply it by 3 or 4 at this point in time .
Speaker #2: Which has put capital on the back burner. So as we come through that right now, when we get back up to speed, we'll see what the impact is on the deferrals.
Speaker #1: Okay , okay . Thanks for clarifying . And then just , you know , you kind of brought up the strength and spreads .
Speaker #2: But again, I would caution against just taking a simple number and multiplying by three or four at this point in time.
David Brown: But again, I would caution against just taking a simple number and multiplying by 3 or 4 at this point in time. Okay. Okay. Thanks for clarifying. And then just you kind of brought up the strength and spreads. Is there a way to explicitly quantify what the margin benefit was from Waha Spread this quarter? Well, quarter-over-quarter, we attributed about $7 million operating income increase as a result of those activities. Thank you. Again, if you would like to ask a question, press star, then the number one on your telephone keypad. And your next question comes from Ryan Levine with Citi. Please go ahead. Good morning. Given the recent Storm Bern and increasing gas demand in your service areas, do you see incremental opportunities to add gas storage? And can you just give us some updated color around that opportunity set? Yeah, good morning, Ryan.
Speaker #1: Is there a way to , you know , explicitly quantify what the margin benefit was from spread this quarter ?
Fei She: Okay. Okay. Thanks for clarifying. And then just you kind of brought up the strength and spreads. Is there a way to explicitly quantify what the margin benefit was from Waha Spread this quarter?
Speaker #8: Okay, okay. Thanks for clarifying. And then, you kind of brought up the strength in spreads. Is there a way to explicitly quantify what the margin benefit was from the Waha spread this quarter?
Speaker #2: Well , quarter over quarter , we attributed $7 million operating about income increase as a result of those activities .
Speaker #1: Thank you .
Chris Forsythe: Well, quarter-over-quarter, we attributed about $7 million operating income increase as a result of those activities.
Speaker #2: Well, quarter over quarter, we attributed about $7 million operating income increase as a result of those activities.
Speaker #3: you would Again , if like to ask a question , press star . Then the number one on your telephone keypad and your next question comes from Ryan Levine with Citi .
Fei She: Thank you.
Speaker #8: Thank you.
Operator: Again, if you would like to ask a question, press star, then the number one on your telephone keypad. And your next question comes from Ryan Levine with Citi. Please go ahead.
Speaker #3: Please go ahead .
Speaker #4: Good morning . Given the recent storm Fern gas demand in increase in your service areas , do you see incremental opportunities to add gas storage and us some give updated color around that opportunity ?
Speaker #3: Again, if you would like to ask a question, press star, then the number one on your telephone keypad. Your next question comes from Ryan Levine with Citi.
Speaker #3: Please go
Speaker #3: ahead.
Ryan Levine: Good morning. Given the recent Storm Bern and increasing gas demand in your service areas, do you see incremental opportunities to add gas storage? And can you just give us some updated color around that opportunity set?
Speaker #9: morning. Given the recent Good your service areas, do you see incremental opportunities to add gas storage? And please give us some updated color around that opportunity
Speaker #4: Set ?
Speaker #5: Yeah . Good morning Ryan . As you've heard us talk about before , we have 15 storage fields placed across Kentucky , Kansas , Mississippi and here in Texas .
Speaker #9: set. Yeah.
Kevin Akers: Yeah, good morning, Ryan. As you've heard us talk about before, we have 15 storage fields placed across Kentucky, Kansas, Mississippi, and here in Texas. Additionally, we have third-party contract storage, and then we have storage as part of our upstream interstate pipeline capacity as well. That's something our gas supply team and our operations team look at post-winter. We'll do a rigorous review of system performance, gas supply plan performance, and overlay that with a third-party consulting engineering firm to overlay with customer growth and demand expectations. And then we'll evaluate how that may impact additional needs for gas supply, where those may need to come in, and any future needs for storage. But it's something we always continue to look at based on past performance, historical weather, and customer growth across the system.
Speaker #5: Additionally , we have third party contract storage . And then we have as part of our upstream interstate pipeline capacity as well . That's something our gas supply team and our operations at team look post winter .
Speaker #5: Good morning, Ryan. As you've heard us talk about before, we have 15 storage fields placed across Kentucky, Kansas, Mississippi, and here in Texas. Additionally, we have third-party contract storage, and then we have storage as part of our upstream interstate pipeline capacity as well.
David Brown: As you've heard us talk about before, we have 15 storage fields placed across Kentucky, Kansas, Mississippi, and here in Texas. Additionally, we have third-party contract storage, and then we have storage as part of our upstream interstate pipeline capacity as well. That's something our gas supply team and our operations team look at post-winter. We'll do a rigorous review of system performance, gas supply plan performance, and overlay that with a third-party consulting engineering firm to overlay with customer growth and demand expectations. And then we'll evaluate how that may impact additional needs for gas supply, where those may need to come in, and any future needs for storage. But it's something we always continue to look at based on past performance, historical weather, and customer growth across the system. Okay. Thanks for taking my question. Sure. There are no further questions at this time.
Speaker #5: We'll do a rigorous review of system performance , gas supply plan performance and overlay that the third party with consulting engineering firm with to overlay customer growth and demand expectations .
Speaker #5: That's something our gas supply team and our operations team look at post-winter. We'll do a rigorous review of system performance, gas supply plan performance, and overlay that with a third-party consulting engineering firm to overlay with customer growth and demand expectations.
Speaker #5: And then we'll evaluate how that may impact additional for needs gas gas , supply may need where those to come in . And any future needs for storage .
Speaker #5: But it's something always continue to look at based on we past performance , historical customer weather and growth across the system .
Speaker #5: And then we'll evaluate how that may impact additional needs for gas supply where those may need to come in. And any future needs for storage.
Speaker #4: Okay , thanks for taking my question .
Speaker #5: But it's something we always continue to look at based on past performance, historical weather, and customer growth across the
Speaker #6: Here .
Speaker #3: There are no further questions at this time . I turn the call back over to Dan Meziere for closing remarks .
Speaker #5: system. Okay.
Ryan Levine: Okay. Thanks for taking my question.
Speaker #9: Thanks for taking my question.
Speaker #2: We your appreciate interest in Atmos Energy , and thank you for joining us this morning . Have a good day .
Kevin Akers: Sure.
Operator: There are no further questions at this time. I will now turn the call back over to Dan Meziere for closing remarks.
Speaker #5: Sure.
Speaker #3: There are no further questions at this time. I will Mezier for closing now turn the call back over to Dan remarks.
David Brown: I will now turn the call back over to Dan Meziere for closing remarks. We appreciate your interest in Atmos Energy, and thank you again for joining us this morning. Have a good day. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Daniel Meziere: We appreciate your interest in Atmos Energy, and thank you again for joining us this morning. Have a good day.
Speaker #2: We appreciate your interest in Atmos Energy. And thank you again for joining us this morning. Have a good
Speaker #2: day. Ladies and gentlemen, that concludes
Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
