Atmos Energy (US:ATO)2025-05-07 20:40Tax and Regulatory Matters - The effective tax rates for the three months ended March 31, 2025, and 2024 were 19.5% and 15.7%, respectively, while for the six months ended March 31, 2025, and 2024, they were 19.0% and 15.3%[77]. - As of March 31, 2025, the regulatory excess net deferred tax liability was $178.6 million, with $115.5 million being returned to customers over 12 - 60 months[78]. - Atmos Energy implemented ratemaking regulatory actions that resulted in an increase in annual operating income of $152.6 million, with ongoing efforts seeking an additional increase of $224.7 million[118]. - The company is seeking $147.5 million in increased annual operating income through various ratemaking efforts as of March 31, 2025[139]. - The company made a GRIP filing on February 26, 2025, requesting an increase in operating income of $77.2 million for capital costs incurred in 2024[149]. - The demand fee for the Louisiana natural gas transmission pipeline is set to increase by 5% annually until September 30, 2027, as approved by the Louisiana Public Service Commission[150]. Financial Performance - For the six months ended March 31, 2025, Atmos Energy recorded net income of $837.4 million, or $5.26 per diluted share, compared to $743.3 million, or $4.93 per diluted share for the same period in 2024, reflecting a 13% year-over-year increase in net income[116]. - The increase in net income was primarily driven by positive rate outcomes from safety and reliability spending, partially offset by higher bad debt expense, depreciation, property tax expenses, and increased operating expenses[117]. - Net income for the six months ended March 31, 2025, was $620,856 thousand, an increase of $56,727 thousand from $564,129 thousand in the same period of 2024[132]. - The company reported a net income of $216.6 million for the six months ended March 31, 2025, an increase of $37.4 million compared to $179.2 million for the same period in 2024[154]. - Operating revenues for the distribution segment increased to $1,882,528 thousand for the three months ended March 31, 2025, compared to $1,589,181 thousand in the same period of 2024, reflecting a change of $293,347 thousand[128]. - Total operating revenue of $514.4 million for the six months ended March 31, 2025, an increase of $79.7 million compared to $434.7 million for the same period in 2024[154]. Capital Expenditures and Investments - The company anticipates capital expenditures of approximately $24 billion between fiscal years 2025 and 2029, with over 80% dedicated to safety and reliability[113]. - Capital expenditures for the six months ended March 31, 2025, were $1,730.9 million, with approximately 85% invested to enhance safety and reliability of distribution and transportation systems[119]. - Cash used for investing activities was $1,717.54 million for the six months ended March 31, 2025, compared to $1,409.26 million in the prior year, reflecting an increase of $308.27 million[166]. Debt and Liquidity - The carrying amount of Atmos Energy's long-term debt as of March 31, 2025, was $8.435 billion, with a fair value of $7.569 billion[101]. - The company completed approximately $1.0 billion of long-term debt and equity financing during the six months ended March 31, 2025[120]. - Total liquidity as of March 31, 2025, was approximately $5.3 billion, including $543.5 million in cash and cash equivalents[120]. - The company has a $1.5 billion commercial paper program and $3.1 billion in total availability from committed revolving credit facilities to support liquidity needs[155]. - Total capitalization as of March 31, 2025, included long-term debt of $8,425.44 million (39.1%) and shareholders' equity of $13,137.97 million (60.9%), totaling $21,563.40 million[161]. - The company maintained compliance with all debt covenants as of March 31, 2025[175]. Commodity and Interest Rate Management - For the 2024-2025 heating season, the company hedged approximately 24.0 Bcf of winter flowing gas requirements, representing about 25-50% of anticipated heating season gas purchases[82]. - As of March 31, 2025, the company had 4,017 MMcf of net long commodity contracts outstanding, which have not been designated as hedges[87]. - The net loss on settled interest rate agreements for the three months ended March 31, 2025, was $(5.1) million, compared to $(3.2) million for the same period in 2024[90]. - As of March 31, 2025, the company had $387.0 million of net realized gains in accumulated other comprehensive income (AOCI) associated with interest rate agreements[93]. - The total financial instruments on the balance sheet as of March 31, 2025, included $123.2 million in assets and $(561,000) in liabilities[89]. - The company manages interest rate risk by entering into financial instruments to fix the Treasury yield component of anticipated financings[83]. Customer and Service Metrics - Atmos Energy serves over 3.3 million customers across eight states, focusing on regulated natural gas distribution and pipeline operations[110]. - The total number of meters in service increased to 3,417,134 as of March 31, 2025, compared to 3,367,671 a year earlier[181]. - Total gas sales volumes for the six months ended March 31, 2025, were 215,077 MMcf, slightly up from 214,253 MMcf in the same period of 2024[181]. Market Risk and Financial Instruments - The company’s financial instruments include $123.209 million in financial instruments classified under Level 2 and Level 3 fair value measurements[98]. - The fair value of financial instruments at March 31, 2025, was $122.65 million, reflecting changes in value from previous periods[179]. - There were no material changes in the concentration of credit risk during the six months ended March 31, 2025[102]. - No material changes in quantitative and qualitative disclosures about market risk during the six months ended March 31, 2025[183]. - Information regarding market risk is disclosed in Item 7A of the Annual Report on Form 10-K for the fiscal year ended September 30, 2024[183].