Core Insights - The Q1 earnings season has shown modest growth, with significant contributions from JPMorgan and Wells Fargo, while tech stocks, particularly the Magnificent Seven, have also supported earnings growth [1] Company Summaries Atmos Energy (ATO) - Atmos Energy reported earnings of $2.85 per share for its fiscal second quarter, exceeding EPS estimates by 9% and increasing 16% from $2.48 per share a year ago [1] - The company serves over 3 million customers across eight states and raised its fiscal 2024 EPS guidance to $6.70-$6.80, above the Zacks Consensus of $6.60 per share, indicating an 8% growth [2] Louisiana-Pacific (LPX) - Louisiana-Pacific's Q1 EPS surged 350% to $1.53, compared to $0.34 in the same quarter last year, beating the Zacks Consensus of $1.13 by 35% [3] - The company raised its full-year revenue growth guidance by 300 basis points to 11-13% and increased full-year EBITDA expectations to $340-$360 million, projecting a margin of around 23% [4] Maximus (MMS) - Maximus reported earnings of $1.57 per share for its fiscal second quarter, surpassing EPS estimates of $1.31 by 20% and climbing 96% from $0.80 a share in the comparative quarter [5] - The company raised its EPS guidance to $5.65-$5.85, above the current Zacks Consensus of $5.42 per share, indicating a 41% growth [6] Robinhood Markets (HOOD) - Robinhood's Q1 EPS was $0.18, exceeding estimates of $0.05 per share and recovering from an adjusted loss of -$0.57 a share in the prior-year quarter [7] - The company achieved quarterly records for net deposits at $11.2 billion and sales at $618 million, with Q1 sales climbing 40% from $441 million a year ago, beating estimates of $544.7 million by 13% [8]

Atmos Energy Corporation (NYSE:ATO) Q2 2024 Earnings Conference Call May 9, 2024 10:00 AM ET Company Participants Dan Meziere - VP-IR and Treasurer Kevin Akers - President and CEO Chris Forsythe - SVP and CFO Conference Call Participants Richard Sunderland - JPMorgan Christopher Jeffrey - Mizuho Operator Thank you for standing by. At this time, I would like to welcome everyone to the Atmos Energy Corporation Fiscal 2024 Second Quarter Earnings Conference Call. [Operator Instructions] Thank you. I would now ...

For the quarter ended March 2024, Atmos Energy (ATO) reported revenue of $1.65 billion, up 6.9% over the same period last year. EPS came in at $2.85, compared to $2.48 in the year-ago quarter.The reported revenue represents a surprise of -7.49% over the Zacks Consensus Estimate of $1.78 billion. With the consensus EPS estimate being $2.62, the EPS surprise was +8.78%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expect ...

Atmos Energy (ATO) came out with quarterly earnings of $2.85 per share, beating the Zacks Consensus Estimate of $2.62 per share. This compares to earnings of $2.48 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 8.78%. A quarter ago, it was expected that this natural gas utility would post earnings of $2.09 per share when it actually produced earnings of $2.08, delivering a surprise of -0.48%.Over the last four quarters, the c ...

[Form 10-Q Filing Information](index=1&type=section&id=Form%2010-Q) This section details the filing specifics of Atmos Energy Corporation's Quarterly Report on Form 10-Q for the period ended March 31, 2024 [Filing Details](index=1&type=section&id=Filing%20Details) This document is a Quarterly Report on Form 10-Q for the period ended March 31, 2024, filed by Atmos Energy Corporation, classified as a large accelerated filer - The report is a Quarterly Report on Form 10-Q for the period ended March 31, 2024[1](index=1&type=chunk) - Atmos Energy Corporation is classified as a **large accelerated filer**[2](index=2&type=chunk) - The company is not a shell company[2](index=2&type=chunk) [Registrant Information](index=1&type=section&id=Registrant%20Information) Atmos Energy Corporation, headquartered in Dallas, Texas, reported 150,877,056 common shares outstanding as of May 3, 2024, traded on the NYSE under ATO - Registrant's principal executive offices are located at 1800 Three Lincoln Centre, 5430 LBJ Freeway, Dallas, Texas 75240[2](index=2&type=chunk) Common Stock Information as of May 3, 2024 | Class | Shares Outstanding | | :----------- | :----------------- | | Common stock | 150,877,056 | - Common stock is traded on the New York Stock Exchange under the symbol ATO[2](index=2&type=chunk) [Glossary of Key Terms](index=2&type=section&id=GLOSSARY%20OF%20KEY%20TERMS) This section provides a glossary of key terms and acronyms used throughout the report, including AEC, GAAP, and SEC - The glossary defines key terms and acronyms relevant to the company's operations and financial reporting[3](index=3&type=chunk) [Part I. Financial Information](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents Atmos Energy Corporation's unaudited condensed consolidated financial statements and related notes [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Atmos Energy Corporation, including balance sheets, statements of comprehensive income, and cash flows, with accompanying notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2024, total assets increased to **$24.00 billion** from $22.52 billion, with shareholders' equity rising to **$11.62 billion** and long-term debt, net, to **$7.44 billion** Condensed Consolidated Balance Sheet Highlights (in thousands) | Item | March 31, 2024 (Unaudited) | September 30, 2023 | | :------------------------------------ | :------------------------- | :----------------- | | Total Assets | $24,004,640 | $22,516,968 | | Net Property, Plant and Equipment | $20,814,563 | $19,606,583 | | Cash and Cash Equivalents | $262,497 | $15,404 | | Total Current Assets | $1,432,435 | $885,768 | | Shareholders' Equity | $11,618,639 | $10,870,064 | | Long-term Debt, net | $7,444,855 | $6,554,133 | | Total Current Liabilities | $1,055,185 | $1,352,592 | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) For the three months ended March 31, 2024, net income increased to **$432.0 million** from $357.7 million, with basic EPS rising to **$2.85** from $2.48, driven by higher operating revenues Key Financial Highlights (Three Months Ended March 31, in thousands, except per share data) | Metric | 2024 | 2023 | | :-------------------------- | :---------- | :---------- | | Total Operating Revenues | $1,647,227 | $1,540,973 | | Operating Income | $550,990 | $422,638 | | Net Income | $432,023 | $357,671 | | Basic Net Income Per Share | $2.85 | $2.48 | | Diluted Net Income Per Share| $2.85 | $2.48 | | Cash Dividends Per Share | $0.805 | $0.740 | Key Financial Highlights (Six Months Ended March 31, in thousands, except per share data) | Metric | 2024 | 2023 | | :-------------------------- | :---------- | :---------- | | Total Operating Revenues | $2,805,694 | $3,024,982 | | Operating Income | $950,095 | $743,824 | | Net Income | $743,315 | $629,531 | | Basic Net Income Per Share | $4.93 | $4.40 | | Diluted Net Income Per Share| $4.93 | $4.40 | | Cash Dividends Per Share | $1.61 | $1.48 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended March 31, 2024, net cash provided by operating activities decreased significantly to **$991.9 million** from $2.89 billion, primarily due to a $2.02 billion receipt from Texas securitization activities in fiscal 2023 Condensed Consolidated Statements of Cash Flows (Six Months Ended March 31, in thousands) | Activity | 2024 | 2023 | | :-------------------------------------------------------------------- | :------------ | :------------ | | Net Cash Provided by Operating Activities | $991,873 | $2,892,716 | | Net Cash Used in Investing Activities | $(1,409,264) | $(1,410,390) | | Net Cash Provided by (Used in) Financing Activities | $661,912 | $(1,438,705) | | Net Increase in Cash and Cash Equivalents and Restricted Cash | $244,521 | $43,621 | | Cash and Cash Equivalents and Restricted Cash at End of Period | $263,769 | $95,175 | - Operating cash flow decreased by **$1.90 billion** primarily due to the receipt of **$2.02 billion** in the second quarter of fiscal 2023 related to Texas securitization activities[14](index=14&type=chunk)[145](index=145&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering business nature, accounting policies, regulatory impacts, segment performance, and other financial disclosures [Note 1. Nature of Business](index=7&type=section&id=Note%201.%20Nature%20of%20Business) Atmos Energy Corporation operates regulated natural gas distribution and pipeline and storage businesses across eight states, serving over 3.3 million customers - Atmos Energy Corporation is engaged in regulated natural gas distribution and pipeline and storage businesses[17](index=17&type=chunk) - The distribution business serves over **3.3 million** residential, commercial, public authority, and industrial customers in eight states[17](index=17&type=chunk) - The pipeline and storage business transports natural gas to Texas and Louisiana distribution systems and manages underground storage facilities[17](index=17&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=7&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) Interim financial statements are prepared in accordance with GAAP, with no goodwill impairment in Q2 fiscal 2024, and new FASB guidance on segment and income tax disclosures are being evaluated - Interim financial statements are prepared in accordance with GAAP and are condensed as permitted by Form 10-Q instructions[18](index=18&type=chunk) - Goodwill impairment assessment completed in Q2 fiscal 2024 determined **no impairment**[19](index=19&type=chunk) - New FASB guidance on segment disclosure (effective fiscal 2025 for 10-K, fiscal 2026 for 10-Q) and income tax disclosures (effective fiscal 2026 for 10-K) is being evaluated for impact[20](index=20&type=chunk) [Note 3. Regulation](index=8&type=section&id=Note%203.%20Regulation) Regulatory assets decreased to **$405.4 million** at March 31, 2024, primarily due to reduced deferred gas costs and Winter Storm Uri costs, while securitization efforts continue in Kansas and Texas - Regulatory assets are recorded when future recovery through customer rates is probable, and regulatory liabilities are recorded when revenue reductions are probable[21](index=21&type=chunk) Regulatory Assets and Liabilities (in thousands) | Item | March 31, 2024 | September 30, 2023 | | :------------------------------------ | :------------- | :----------------- | | **Regulatory Assets:** | | | | Total Regulatory Assets | $405,368 | $554,928 | | * Winter Storm Uri incremental costs | $15,510 | $32,115 | | * Deferred gas costs | $25,928 | $148,297 | | **Regulatory Liabilities:** | | | | Total Regulatory Liabilities | $1,248,781 | $1,284,334 | - In Texas, the company began collecting customer rate relief charges on October 1, 2023, from **$3.5 billion** in securitized bonds issued in March 2023 to recover Winter Storm Uri costs[23](index=23&type=chunk) [Note 4. Segment Information](index=9&type=section&id=Note%204.%20Segment%20Information) Atmos Energy operates through Distribution and Pipeline and Storage segments, with both showing increased net income for the three and six months ended March 31, 2024 - The company manages operations through two reportable segments: Distribution and Pipeline and Storage[25](index=25&type=chunk) Segment Net Income (Three Months Ended March 31, in thousands) | Segment | 2024 | 2023 | | :----------------------- | :--------- | :--------- | | Distribution | $342,692 | $288,474 | | Pipeline and Storage | $89,331 | $69,197 | | **Consolidated Net Income**| **$432,023** | **$357,671** | Segment Net Income (Six Months Ended March 31, in thousands) | Segment | 2024 | 2023 | | :----------------------- | :--------- | :--------- | | Distribution | $564,129 | $482,942 | | Pipeline and Storage | $179,186 | $146,589 | | **Consolidated Net Income**| **$743,315** | **$629,531** | [Note 5. Earnings Per Share](index=11&type=section&id=Note%205.%20Earnings%20Per%20Share) Earnings per share are calculated using the two-class method, with basic and diluted EPS increasing to **$2.85** for the three months and **$4.93** for the six months ended March 31, 2024 - Earnings per share are computed using the two-class method due to non-vested restricted stock units with dividend rights[33](index=33&type=chunk) Basic and Diluted EPS (Three Months Ended March 31) | Metric | 2024 | 2023 | | :-------------------------- | :---- | :---- | | Basic Net Income Per Share | $2.85 | $2.48 | | Diluted Net Income Per Share| $2.85 | $2.48 | Basic and Diluted EPS (Six Months Ended March 31) | Metric | 2024 | 2023 | | :-------------------------- | :---- | :---- | | Basic Net Income Per Share | $4.93 | $4.40 | | Diluted Net Income Per Share| $4.93 | $4.40 | [Note 6. Revenue and Accounts Receivable](index=12&type=section&id=Note%206.%20Revenue%20and%20Accounts%20Receivable) Distribution segment operating revenues increased to **$1.59 billion** for the three months ended March 31, 2024, but decreased to **$2.69 billion** for the six months, while the allowance for uncollectible accounts rose to **$42.7 million** Distribution Segment Operating Revenues (Three Months Ended March 31, in thousands) | Revenue Type | 2024 | 2023 | | :---------------------------- | :---------- | :---------- | | Total Gas Sales Revenues | $1,521,536 | $1,409,632 | | Transportation Revenues | $37,607 | $33,511 | | Total Operating Revenues | $1,589,181 | $1,500,210 | Distribution Segment Operating Revenues (Six Months Ended March 31, in thousands) | Revenue Type | 2024 | 2023 | | :---------------------------- | :---------- | :---------- | | Total Gas Sales Revenues | $2,569,286 | $2,833,391 | | Transportation Revenues | $71,374 | $65,673 | | Total Operating Revenues | $2,694,519 | $2,940,636 | - The allowance for uncollectible accounts was **$42.7 million** at March 31, 2024, compared to **$40.8 million** at September 30, 2023[40](index=40&type=chunk)[43](index=43&type=chunk) - A **$13.9 million** reduction to bad debt expense was recorded in Q1 fiscal 2024 due to a Mississippi Public Service Commission decision allowing recovery of uncollectible accounts through the purchased gas cost mechanism[39](index=39&type=chunk) [Note 7. Debt](index=15&type=section&id=Note%207.%20Debt) Total long-term debt, net, increased to **$7.44 billion** at March 31, 2024, primarily due to a **$900 million** senior notes offering, with the company maintaining a **$1.5 billion** commercial paper program and **$3.1 billion** in revolving credit facilities Long-Term Debt, Net (in thousands) | Item | March 31, 2024 | September 30, 2023 | | :------------------------ | :------------- | :----------------- | | Total Long-Term Debt, Net | $7,444,855 | $6,554,133 | - In October 2023, the company completed a public offering of **$500 million** of 6.20% senior notes due October 2053 and **$400 million** of 5.90% senior notes due October 2033, generating **$889.4 million** in net proceeds[46](index=46&type=chunk) - The company utilizes a **$1.5 billion** commercial paper program and four committed revolving credit facilities totaling **$3.1 billion** for short-term financing[47](index=47&type=chunk) - At March 31, 2024, the total-debt-to-total-capitalization ratio was **40%**, well within the **70%** covenant limit[49](index=49&type=chunk) [Note 8. Shareholders' Equity](index=16&type=section&id=Note%208.%20Shareholders%27%20Equity) Shareholders' equity increased to **$11.62 billion** at March 31, 2024, driven by net income and equity issuances, with **$3.1 billion** available under a shelf registration and **$889.7 million** from forward sale agreements Shareholders' Equity (in thousands) | Item | March 31, 2024 | September 30, 2023 | | :--------------------------------- | :------------- | :----------------- | | Total Shareholders' Equity | $11,618,639 | $10,870,064 | | Common Stock (shares outstanding) | 150,874,552 | 148,492,783 | | Additional Paid-in Capital | $6,953,761 | $6,684,120 | | Retained Earnings | $4,168,424 | $3,666,674 | - The company has a shelf registration statement allowing issuance of up to **$5.0 billion** in common stock and/or debt securities, with **$3.1 billion** available at March 31, 2024[53](index=53&type=chunk) - An at-the-market (ATM) equity sales program allows for the sale of common stock up to an aggregate offering price of **$1.0 billion**, with **$81.6 million** available at March 31, 2024[53](index=53&type=chunk)[55](index=55&type=chunk) - As of March 31, 2024, there were **$889.7 million** in available proceeds from outstanding forward sale agreements[55](index=55&type=chunk)[56](index=56&type=chunk) [Note 9. Variable Interest Entity](index=18&type=section&id=Note%209.%20Variable%20Interest%20Entity) Atmos Energy Kansas Securitization I, LLC (AEK), a wholly-owned special-purpose entity, was formed to issue securitized bonds for Winter Storm Uri cost recovery and is consolidated as a variable interest entity - AEK was formed to issue securitized bonds to recover extraordinary costs from Winter Storm Uri[59](index=59&type=chunk) - AEK's assets cannot be used to settle Atmos Energy's obligations, and bondholders have no recourse against Atmos Energy[59](index=59&type=chunk) - AEK is considered a variable interest entity and is included in Atmos Energy's condensed consolidated financial statements[59](index=59&type=chunk) Impact of AEK on Condensed Consolidated Balance Sheets (in thousands) | Item | March 31, 2024 | September 30, 2023 | | :----------------------------------------- | :------------- | :----------------- | | Securitized intangible asset, net | $87,279 | $92,202 | | Current maturities of securitized long-term debt | $8,001 | $9,922 | | Securitized long-term debt | $81,261 | $85,078 | [Note 10. Interim Pension and Other Postretirement Benefit Plan Information](index=19&type=section&id=Note%2010.%20Interim%20Pension%20and%20Other%20Postretirement%20Benefit%20Plan%20Information) Net periodic pension cost for the three months ended March 31, 2024, was **$2.7 million**, and for the six months, it was **$6.3 million**, with most costs recoverable through tariff rates Net Periodic Pension Cost (Three Months Ended March 31, in thousands) | Component | 2024 | 2023 | | :------------------------ | :------ | :------ | | Net Periodic Pension Cost | $2,730 | $3,089 | Net Periodic Pension Cost (Six Months Ended March 31, in thousands) | Component | 2024 | 2023 | | :------------------------ | :------ | :------ | | Net Periodic Pension Cost | $6,307 | $6,178 | - A settlement charge of **$0.8 million** was recognized in the first quarter of fiscal 2024 due to an executive retirement, leading to a revaluation of the Supplemental Executive Retirement Plan's net periodic pension cost[63](index=63&type=chunk)[66](index=66&type=chunk) [Note 11. Commitments and Contingencies](index=20&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) The company is subject to various legal and regulatory proceedings, including an NTSB investigation for incidents in Jackson, Mississippi, and has natural gas purchase commitments of **82.2 Bcf** within one year - The company is subject to various legal and regulatory proceedings, with liabilities recorded when probable and estimable[67](index=67&type=chunk) - An NTSB investigation is underway for two incidents in Jackson, Mississippi, in January 2024, which resulted in one fatality[67](index=67&type=chunk) - As of March 31, 2024, purchase commitments for natural gas include **82.2 Bcf** within one year and **30.0 Bcf** within two to three years under indexed contracts[68](index=68&type=chunk) [Note 12. Income Taxes](index=21&type=section&id=Note%2012.%20Income%20Taxes) The effective tax rates for the three and six months ended March 31, 2024, were **15.7%** and **15.3%**, respectively, differing from the 21% federal statutory rate due to various adjustments Effective Tax Rates | Period | 2024 | 2023 | | :----------------------------------- | :---- | :---- | | Three Months Ended March 31 | 15.7% | 11.2% | | Six Months Ended March 31 | 15.3% | 11.1% | - The effective tax rates differ from the **21%** federal statutory rate primarily due to amortization of excess deferred federal income tax liabilities, tax credits, state income taxes, and other permanent differences[70](index=70&type=chunk) - Regulatory excess net deferred tax liability of **$263.4 million** is being returned to customers over various periods[71](index=71&type=chunk) [Note 13. Financial Instruments](index=21&type=section&id=Note%2013.%20Financial%20Instruments) Atmos Energy uses financial instruments to mitigate commodity price and interest rate risks, hedging **27.6 Bcf** of winter gas requirements and **$900 million** in anticipated financings, with total financial instrument assets of **$357.1 million** - Financial instruments are used to mitigate commodity price risk and interest rate risk[72](index=72&type=chunk) - For the 2023-2024 heating season, approximately **27.6 Bcf** of winter flowing gas requirements were hedged using financial instruments not designated as accounting hedges[73](index=73&type=chunk) Planned Debt Issuance Date and Amount Hedged (in thousands) | Planned Debt Issuance Date | Amount Hedged | | :------------------------- | :------------ | | Fiscal 2025 | $600,000 | | Fiscal 2026 | $300,000 | | **Total** | **$900,000** | Financial Instruments on the Balance Sheet (March 31, 2024, in thousands) | Item | Assets | Liabilities | | :---------------------------------- | :--------- | :---------- | | Designated As Hedges (Interest rate contracts) | $355,781 | $— | | Not Designated As Hedges (Commodity contracts) | $1,320 | $(5,840) | | **Gross / Net Financial Instruments** | **$357,101** | **$(5,840)** | [Note 14. Fair Value Measurements](index=23&type=section&id=Note%2014.%20Fair%20Value%20Measurements) As of March 31, 2024, total assets measured at fair value were **$464.9 million**, and liabilities were **$5.8 million**, with long-term debt having a carrying amount of **$7.46 billion** and a fair value of **$6.76 billion** - Fair value measurements are categorized into a three-level hierarchy based on the observability of inputs[87](index=87&type=chunk)[88](index=88&type=chunk) Fair Value Measurements (March 31, 2024, in thousands) | Item | Level 1 | Level 2 | Level 3 | Total | | :---------------------------------- | :--------- | :--------- | :------ | :--------- | | **Assets:** | | | | | | Financial instruments | $— | $357,101 | $— | $357,101 | | Debt and equity securities | $66,920 | $40,854 | $— | $107,774 | | **Total Assets** | **$66,920**| **$397,955**| **$—** | **$464,875**| | **Liabilities:** | | | | | | Financial instruments | $— | $5,840 | $— | $5,840 | Long-Term Debt Carrying Value and Fair Value (in thousands) | Item | March 31, 2024 | September 30, 2023 | | :-------------- | :------------- | :----------------- | | Carrying Amount | $7,460,000 | $6,560,000 | | Fair Value | $6,762,617 | $5,402,591 | [Note 15. Concentration of Credit Risk](index=25&type=section&id=Note%2015.%20Concentration%20of%20Credit%20Risk) No material changes in the company's concentration of credit risk occurred during the six months ended March 31, 2024 - No material changes in concentration of credit risk occurred during the six months ended March 31, 2024[93](index=93&type=chunk) [Report of Independent Registered Public Accounting Firm](index=26&type=section&id=REPORT%20OF%20INDEPENDENT%20REGISTERED%20PUBLIC%20ACCOUNTING%20FIRM) Ernst & Young LLP reviewed Atmos Energy Corporation's interim financial statements for March 31, 2024 and 2023, finding no material modifications needed for GAAP conformity - Ernst & Young LLP reviewed the condensed consolidated interim financial statements for the periods ended March 31, 2024 and 2023[95](index=95&type=chunk) - No material modifications are needed for the interim financial statements to conform with U.S. GAAP[95](index=95&type=chunk) - The September 30, 2023, consolidated balance sheet information is fairly stated in all material respects[96](index=96&type=chunk) [Part II. Other Information](index=27&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part contains other information relevant to the company's financial reporting, including management's discussion and analysis, market risk disclosures, and controls and procedures [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of Atmos Energy's financial condition and results of operations, highlighting key drivers, rate recovery, liquidity, and risk management [Introduction](index=27&type=section&id=INTRODUCTION) This introduction advises readers to review the Management's Discussion and Analysis in conjunction with the condensed consolidated financial statements and the prior Annual Report on Form 10-K - The discussion should be read with the condensed consolidated financial statements in this 10-Q and the Annual Report on Form 10-K for the year ended September 30, 2023[100](index=100&type=chunk) [Cautionary Statement for the Purposes of the Safe Harbor under the Private Securities Litigation Reform Act of 1995](index=27&type=section&id=Cautionary%20Statement%20for%20the%20Purposes%20of%20the%20Safe%20Harbor%20under%20the%20Private%20Securities%20Litigation%20Reform%20Act%20of%201995) This section includes forward-looking statements subject to various risks and uncertainties, such as regulatory decisions, operational hazards, and market risks, which could cause actual results to differ materially - The report contains forward-looking statements subject to risks and uncertainties[101](index=101&type=chunk) - Key risks include regulatory decisions, operational safety, gas supply, competition, workforce, natural disasters, cyber-attacks, weather, climate change, capital intensity, market access, commodity price volatility, and interest rate risk[101](index=101&type=chunk) [Overview](index=27&type=section&id=OVERVIEW) Atmos Energy operates regulated natural gas distribution and pipeline and storage businesses, serving over 3.3 million customers across eight states through two reportable segments - Atmos Energy is engaged in regulated natural gas distribution and pipeline and storage businesses[102](index=102&type=chunk) - The company serves over **3.3 million** residential, commercial, public authority, and industrial customers in eight states[102](index=102&type=chunk) - Operations are managed through two reportable segments: Distribution and Pipeline and Storage[102](index=102&type=chunk) [Critical Accounting Estimates and Policies](index=28&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES%20AND%20POLICIES) The preparation of financial statements requires estimates and judgments, with no significant changes to critical accounting policies during the six months ended March 31, 2024 - Critical accounting policies include regulation, pension and other postretirement plans, and impairment assessments[104](index=104&type=chunk) - No significant changes to critical accounting policies occurred during the six months ended March 31, 2024[104](index=104&type=chunk) [Results of Operations](index=28&type=section&id=RESULTS%20OF%20OPERATIONS) Atmos Energy achieved a net income of **$743.3 million** ($4.93 diluted EPS) for the six months ended March 31, 2024, an **18%** increase year-over-year, driven by positive rate outcomes and lower bad debt expense [Executive Summary](index=28&type=section&id=Executive%20Summary) Atmos Energy reported an **18%** year-over-year increase in net income to **$743.3 million** ($4.93 diluted EPS) for the six months ended March 31, 2024, driven by positive rate outcomes and lower bad debt expense Net Income and EPS (Six Months Ended March 31) | Metric | 2024 | 2023 | Change (%) | | :-------------------------- | :---------- | :---------- | :--------- | | Net Income | $743.3 million | $629.5 million | 18% | | Diluted Net Income Per Share| $4.93 | $4.40 | | - Net income increase reflects positive rate outcomes from safety and reliability spending and lower bad debt expense[106](index=106&type=chunk) - Fiscal 2024 results were favorably impacted by **$14.7 million** due to Texas property tax legislation[106](index=106&type=chunk) - Ratemaking regulatory actions resulted in a **$165.4 million** increase in annual operating income, with **$178.8 million** in efforts still in progress[106](index=106&type=chunk) [Distribution Segment](index=28&type=section&id=Distribution%20Segment) The Distribution segment's operating income increased by **27.1%** for the three months and **24.6%** for the six months ended March 31, 2024, driven by rate adjustments, customer growth, and lower property taxes - Approximately **70%** of distribution segment revenues are earned in the first six months of the fiscal year[108](index=108&type=chunk) - Weather normalization adjustments (WNA) are approved for approximately **96%** of residential and commercial revenues in several states to mitigate weather effects[109](index=109&type=chunk) - Gas costs are generally passed through to customers without markup, but higher costs can impact accounts receivable and interest expense[110](index=110&type=chunk) [Three Months Ended March 31, 2024 compared with Three Months Ended March 31, 2023](index=29&type=section&id=Three%20Months%20Ended%20March%2031%2C%202024%20compared%20with%20Three%20Months%20Ended%20March%2031%2C%202023) For the three months ended March 31, 2024, the Distribution segment's operating income increased by **27.1%** to **$426.2 million**, driven by rate adjustments, consumption, customer growth, and lower property taxes Distribution Segment Financial Highlights (Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | Change | | :--------------------- | :---------- | :---------- | :---------- | | Operating Revenues | $1,589,181 | $1,500,210 | $88,971 | | Purchased Gas Cost | $788,643 | $809,023 | $(20,380) | | Operating Income | $426,190 | $335,324 | $90,866 | | Net Income | $342,692 | $288,474 | $54,218 | - Operating income increased by **$90.6 million** due to rate adjustments, **$10.7 million** from consumption (net of WNA), and **$6.5 million** from customer growth[112](index=112&type=chunk)[113](index=113&type=chunk) - Property taxes decreased by **$3.8 million**, including a **$6.4 million** decrease from Texas property tax legislation[113](index=113&type=chunk) - Partially offset by a **$15.1 million** increase in depreciation expense and an **$8.7 million** increase in refunds of excess deferred taxes[113](index=113&type=chunk) [Six Months Ended March 31, 2024 compared with Six Months Ended March 31, 2023](index=30&type=section&id=Six%20Months%20Ended%20March%2031%2C%202024%20compared%20with%20Six%20Months%20Ended%20March%2031%2C%202023) For the six months ended March 31, 2024, the Distribution segment's operating income increased by **24.6%** to **$706.7 million**, driven by rate adjustments, customer growth, and lower bad debt expense Distribution Segment Financial Highlights (Six Months Ended March 31, in thousands) | Metric | 2024 | 2023 | Change | | :--------------------- | :---------- | :---------- | :---------- | | Operating Revenues | $2,694,519 | $2,940,636 | $(246,117) | | Purchased Gas Cost | $1,285,305 | $1,690,938 | $(405,633) | | Operating Income | $706,671 | $567,080 | $139,591 | | Net Income | $564,129 | $482,942 | $81,187 | - Operating income increased by **$155.2 million** due to rate adjustments, **$12.4 million** from residential customer growth, and a **$13.3 million** decrease in bad debt expense[116](index=116&type=chunk) - Property taxes decreased by **$2.9 million**, including an **$11.0 million** decrease from Texas property tax legislation[116](index=116&type=chunk) - Partially offset by a **$29.1 million** increase in depreciation expense, a **$17.5 million** increase in refunds of excess deferred taxes, and a **$16.1 million** increase in other operation and maintenance expense[116](index=116&type=chunk) [Recent Ratemaking Developments](index=31&type=section&id=Recent%20Ratemaking%20Developments) During the first six months of fiscal 2024, regulatory proceedings increased annual operating income by **$138.4 million**, with **$96.4 million** in additional ratemaking efforts in progress - Regulatory proceedings resulted in a **$138.4 million** increase in annual operating income during the first six months of fiscal 2024[118](index=118&type=chunk)[119](index=119&type=chunk) - Excluding the impact of excess deferred income taxes (EDIT), the total rate outcomes were **$137.1 million**[118](index=118&type=chunk)[119](index=119&type=chunk) - Ratemaking efforts seeking **$96.4 million** in increased annual operating income were in progress as of March 31, 2024[121](index=121&type=chunk)[122](index=122&type=chunk) [Annual Formula Rate Mechanisms](index=32&type=section&id=Annual%20Formula%20Rate%20Mechanisms) Annual formula rate mechanisms, active in several states, increased annual operating income by **$136.9 million** during the six months ended March 31, 2024, by allowing annual rate adjustments without formal rate cases - Formula rate mechanisms allow annual rate refreshes without formal rate cases, reducing regulatory lag[123](index=123&type=chunk) - These mechanisms are active in Louisiana, Mississippi, Tennessee, and most Texas divisions, alongside infrastructure programs[123](index=123&type=chunk)[124](index=124&type=chunk) Approved Annual Formula Rate Mechanisms (Six Months Ended March 31, 2024, in thousands) | Rate Action | Increase in Annual Operating Income | | :--------------------------------- | :---------------------------------- | | Total 2024 Filings | $136,935 | | Total 2024 Filings Excluding EDIT | $136,536 | [Rate Case Filings](index=33&type=section&id=Rate%20Case%20Filings) During the six months ended March 31, 2024, one rate case filing in the Kentucky/Mid-States division (Virginia) resulted in a **$2.4 million** increase in annual operating income - A rate case is a formal request to a regulatory authority to increase rates[128](index=128&type=chunk) Completed Rate Case Filings (Six Months Ended March 31, 2024, in thousands) | Division / State | Increase in Annual Operating Income | | :--------------- | :---------------------------------- | | Kentucky/Mid-States (Virginia) | $2,434 | | Excluding EDIT | $1,495 | [Other Ratemaking Activity](index=33&type=section&id=Other%20Ratemaking%20Activity) Other ratemaking activity during the six months ended March 31, 2024, included an Ad Valorem filing in the Colorado-Kansas division (Kansas), resulting in a **$0.97 million** decrease in annual operating income Other Ratemaking Activity (Six Months Ended March 31, 2024, in thousands) | Division / Jurisdiction | Rate Activity | Decrease in Annual Operating Income | | :---------------------- | :------------ | :---------------------------------- | | Colorado-Kansas (Kansas)| Ad Valorem | $(971) | - The Ad Valorem filing relates to property taxes that are either over or undercollected compared to the amount included in the Kansas service area's base rate[131](index=131&type=chunk) [Pipeline and Storage Segment](index=34&type=section&id=Pipeline%20and%20Storage%20Segment) The Pipeline and Storage segment's operating income increased by **42.9%** for the three months and **37.7%** for the six months ended March 31, 2024, driven by rate adjustments, increased through-system activities, and decreased property taxes - The segment's revenues are derived from transportation and storage of natural gas, not directly impacted by gas prices[133](index=133&type=chunk) - APT annually uses GRIP to recover capital costs, with a filing made on February 27, 2024, seeking an **$82.4 million** increase in operating income[133](index=133&type=chunk) - A rate case approved in December 2023 for APT resulted in a **$27.0 million** increase in annual operating income[133](index=133&type=chunk) [Three Months Ended March 31, 2024 compared with Three Months Ended March 31, 2023](index=34&type=section&id=Three%20Months%20Ended%20March%2031%2C%202024%20compared%20with%20Three%20Months%20Ended%20March%2031%2C%202023) For the three months ended March 31, 2024, the Pipeline and Storage segment's operating income increased by **42.9%** to **$124.8 million**, primarily due to rate adjustments, increased through-system activities, and decreased property taxes Pipeline and Storage Segment Financial Highlights (Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | Change | | :--------------------- | :---------- | :---------- | :---------- | | Total Operating Revenues | $223,487 | $184,424 | $39,063 | | Total Purchased Gas Cost | $840 | $621 | $219 | | Operating Income | $124,800 | $87,314 | $37,486 | | Net Income | $89,331 | $69,197 | $20,134 | - Operating income increased by **$17.0 million** due to rate adjustments from the December 2023 rate case[136](index=136&type=chunk) - A **$7.1 million** increase in APT's through-system activities and a **$9.3 million** decrease in refunds of excess deferred taxes also contributed to the increase[136](index=136&type=chunk) [Six Months Ended March 31, 2024 compared with Six Months Ended March 31, 2023](index=35&type=section&id=Six%20Months%20Ended%20March%2031%2C%202024%20compared%20with%20Six%20Months%20Ended%20March%2031%2C%202023) For the six months ended March 31, 2024, the Pipeline and Storage segment's operating income increased by **37.7%** to **$243.4 million**, driven by rate adjustments, reduced inspection spending, and increased through-system activities Pipeline and Storage Segment Financial Highlights (Six Months Ended March 31, in thousands) | Metric | 2024 | 2023 | Change | | :--------------------- | :---------- | :---------- | :---------- | | Total Operating Revenues | $434,656 | $371,053 | $63,603 | | Total Purchased Gas Cost | $844 | $(237) | $1,081 | | Operating Income | $243,424 | $176,744 | $66,680 | | Net Income | $179,186 | $146,589 | $32,597 | - Operating income increased by **$36.5 million** due to rate adjustments from the GRIP filing and December 2023 rate case[139](index=139&type=chunk) - An **$11.8 million** decrease in pipeline inspection spending and a **$7.9 million** net increase in APT's through-system activities also contributed[139](index=139&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Atmos Energy's liquidity is supported by internal cash flows, external debt and equity financing, a **$1.5 billion** commercial paper program, and **$3.1 billion** in revolving credit facilities, totaling approximately **$4.2 billion** as of March 31, 2024 - Liquidity is provided by internally generated cash flows and external debt and equity financing[140](index=140&type=chunk) - The company has a **$1.5 billion** commercial paper program and **$3.1 billion** in committed revolving credit facilities[140](index=140&type=chunk) - As of March 31, 2024, total liquidity was approximately **$4.2 billion**, comprising cash, equity forward sales proceeds, and undrawn credit facilities[107](index=107&type=chunk) Capitalization (in thousands, except percentages) | Item | March 31, 2024 | % | September 30, 2023 | % | | :--------------------- | :------------- | :----- | :----------------- | :----- | | Short-term debt | $— | — % | $241,933 | 1.4 % | | Long-term debt | $7,446,446 | 39.1 % | $6,555,701 | 37.1 % | | Shareholders' equity | $11,618,639 | 60.9 % | $10,870,064 | 61.5 % | | **Total** | **$19,065,085**| **100.0 %**| **$17,667,698** | **100.0 %**| [Cash Flows](index=37&type=section&id=Cash%20Flows) For the six months ended March 31, 2024, operating cash flow decreased by **$1.90 billion** to **$991.9 million**, primarily due to a **$2.02 billion** receipt from Texas securitization activities in fiscal 2023, while financing activities provided **$661.9 million** Cash Flow Summary (Six Months Ended March 31, in thousands) | Activity | 2024 | 2023 | Change | | :----------------------- | :------------ | :------------ | :------------ | | Operating activities | $991,873 | $2,892,716 | $(1,900,843) | | Investing activities | $(1,409,264) | $(1,410,390) | $1,126 | | Financing activities | $661,912 | $(1,438,705) | $2,100,617 | - Operating cash flow decreased primarily due to the **$2.02 billion** receipt in fiscal 2023 from Texas securitization activities[145](index=145&type=chunk) - Capital expenditures for investing activities are primarily for improving system safety and reliability (**87%** over the last three fiscal years)[146](index=146&type=chunk) - Financing activities provided **$661.9 million**, including **$1.2 billion** in net proceeds from long-term debt and equity issuances[148](index=148&type=chunk) [Credit Ratings](index=38&type=section&id=Credit%20Ratings) Atmos Energy's debt is rated investment grade by S&P (A- stable outlook) and Moody's (A1 negative outlook), with ratings influencing financing costs and access to capital - Credit ratings directly affect the ability and cost of obtaining short-term and long-term financing[150](index=150&type=chunk) Credit Ratings as of April 1, 2024 | Rating Agency | Senior Unsecured Long-Term Debt | Short-Term Debt | Outlook | | :------------ | :------------------------------ | :-------------- | :------- | | S&P | A- | A-2 | Stable | | Moody's | A1 | P-1 | Negative | - A significant degradation in operating performance or liquidity could trigger a negative change in ratings outlook or a reduction in credit ratings[151](index=151&type=chunk) [Debt Covenants](index=39&type=section&id=Debt%20Covenants) Atmos Energy was in compliance with all its debt covenants as of March 31, 2024, including maintaining a total-debt-to-total-capitalization ratio of no greater than **70%** - The company was in compliance with all debt covenants as of March 31, 2024[154](index=154&type=chunk) - Debt covenants require maintaining a total-debt-to-total-capitalization ratio of no greater than **70%**[49](index=49&type=chunk) [Contractual Obligations and Commercial Commitments](index=39&type=section&id=Contractual%20Obligations%20and%20Commercial%20Commitments) No significant changes in contractual obligations and commercial commitments occurred during the six months ended March 31, 2024 - No significant changes in contractual obligations and commercial commitments occurred during the six months ended March 31, 2024[155](index=155&type=chunk) [Risk Management Activities](index=39&type=section&id=Risk%20Management%20Activities) Atmos Energy manages commodity price risk through physical and financial contracts and interest rate risk using forward starting interest rate swaps, with the fair value of financial instruments at **$351.3 million** as of March 31, 2024 - The company uses physical storage, fixed physical contracts, and fixed financial contracts to reduce exposure to winter-period gas price increases[156](index=156&type=chunk) - Interest rate risk is managed by entering into financial instruments to fix the Treasury yield component of anticipated financings[156](index=156&type=chunk) Fair Value of Financial Instruments (March 31, 2024, in thousands) | Source of Fair Value | Less Than 1 Year | 1-3 Years | 4-5 Years | Greater Than 5 Years | Total Fair Value | | :------------------- | :--------------- | :-------- | :-------- | :------------------- | :--------------- | | Prices actively quoted | $254,102 | $97,159 | $— | $— | $351,261 | [Operating Statistics and Other Information](index=40&type=section&id=OPERATING%20STATISTICS%20AND%20OTHER%20INFORMATION) This section provides operating statistics for the distribution and pipeline and storage segments, including **3,367,671** total meters in service and **428,981 MMcf** in pipeline transportation volumes for the six months ended March 31, 2024 Distribution Sales and Statistical Data (March 31, 2024) | Metric | Three Months Ended | Six Months Ended | | :----------------------------------- | :----------------- | :--------------- | | Total Meters in Service | 3,367,671 | 3,367,671 | | Total Gas Sales Volumes (MMcf) | 131,537 | 214,253 | | Total Throughput (MMcf) | 178,213 | 303,221 | Pipeline and Storage Operations Sales and Statistical Data (March 31, 2024) | Metric | Three Months Ended | Six Months Ended | | :----------------------------------- | :----------------- | :--------------- | | Total Customers | 283 | 283 | | Pipeline Transportation Volumes (MMcf)| 219,709 | 428,981 | [Recent Accounting Developments](index=40&type=section&id=RECENT%20ACCOUNTING%20DEVELOPMENTS) This section refers to Note 2 of the condensed consolidated financial statements for information on recent accounting developments and their potential impact - Recent accounting developments and their impact are described in Note 2 to the condensed consolidated financial statements[163](index=163&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes occurred in the company's quantitative and qualitative disclosures about market risk during the six months ended March 31, 2024 - No material changes in quantitative and qualitative disclosures about market risk occurred during the six months ended March 31, 2024[165](index=165&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting during the second quarter of fiscal year 2024 [Management's Evaluation of Disclosure Controls and Procedures](index=41&type=section&id=Management%27s%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of March 31, 2024 - Disclosure controls and procedures were effective as of March 31, 2024[166](index=166&type=chunk) [Changes in Internal Control over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during the second quarter of the fiscal year ended September 30, 2024 - No material changes in internal control over financial reporting occurred during the second quarter of fiscal year 2024[167](index=167&type=chunk) [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) No material changes in legal proceedings occurred during the six months ended March 31, 2024, and management believes the final outcome will not materially adversely affect the company's financial position - No material changes in legal proceedings occurred during the six months ended March 31, 2024, except as noted in Note 11[169](index=169&type=chunk) - Management believes the final outcome of legal matters will not materially adversely affect financial condition, results of operations, or cash flows[169](index=169&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) There were no material changes from the risk factors disclosed in Item 1A of the Annual Report on Form 10-K for the year ended September 30, 2023 - No material changes from the risk factors disclosed in the prior Annual Report on Form 10-K[169](index=169&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2024 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2024[169](index=169&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report, including corporate governance documents, credit agreements, and XBRL interactive data files - Exhibits include corporate governance documents (Articles of Incorporation, Bylaws) and credit agreements[173](index=173&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Labels Linkbase, Presentation Linkbase, and Cover Page Interactive Data File are filed[171](index=171&type=chunk) - Certifications pursuant to 18 U.S.C. Section 1350 by the CEO and CFO are furnished as Exhibit 32[171](index=171&type=chunk)[173](index=173&type=chunk) [Signature](index=44&type=section&id=SIGNATURE) The report is duly signed on behalf of Atmos Energy Corporation by Christopher T. Forsythe, Senior Vice President and Chief Financial Officer, on May 8, 2024 - The report was signed by Christopher T. Forsythe, Senior Vice President and Chief Financial Officer, on May 8, 2024[175](index=175&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 May 8, 2024 Date of Report (Date of earliest event reported) ATMOS ENERGY CORPORATION (Exact Name of Registrant as Specified in its Charter) | --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------| ...

The optimism surrounding the economy’s health that was seen at the beginning of the year is fast fading. Rising inflation and slowing GDP growth have raised concerns over the future of the economy, hurting the confidence of Americans.The Conference Board said on Apr 30 that consumer confidence fell to 97 in April, declining for the third straight month to hit its lowest level since July 2022. This follows a downwardly revised 103.1 in March. Economists had predicted consumer confidence level to remain littl ...

Natural gas distribution companies offer services to transport natural gas from the region of production to millions of consumers across the United States. The utilities under the Zacks Utility Gas Distribution industry control miles of underground pipeline network to provide natural gas services to customers. The rising demand for clean, burning natural gas will create more opportunities for natural gas distribution companies.Sempra Energy (SRE) , with its widespread transmission and distribution lines, in ...

Atmos Energy (ATO) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on May 8. On t ...

Major indexes in the United States notched a sensational rally in the first three months of 2024. However, their upward trajectory came to a screeching halt in April. The S&P 500, the Nasdaq and the Dow are currently on track to post their first negative month since October.The broader S&P 500 and the tech-laden Nasdaq eked out losses for the sixth straight trading session on Apr 19, while the 30-stock Dow is on the verge of erasing its gains since the beginning of this year. Moreover, the Nasdaq logged los ...