ATMOS ENERGY CORPORATION Our vision is for Atmos Energy to be the Safest provider of natural gas services. We will be recognized for Exceptional Customer Service, for being a Great Employer and for achieving Superior Financial Results.
December 2023
Leading Natural Gas Delivery Platform
Eight-state distribution territory | Business Mix | Intrastate pipeline system |
~34%
Pipeline &
Storage
~66%
Distribution
2024 Estimated Net Income
Diversified LDC platform in 8 states
- Largest pure-play natural gas LDC with over 3.3 million customers in 8 states
- ~73,000 miles of distribution and transmission mains
- ~65% of distribution rate base is located in Texas
- Blended allowed ROE of 9.8%
- 96% of rate base covered by all fuels legislation
- Constructive regulatory mechanisms reduce lag
- ~13 Bcf of working storage capacity
Favorably positioned pipeline spans
Texas shale gas supply basins
- ~5,700 miles of intrastate pipeline
- Spans multiple key shale gas formations
- Connection to major market hubs
- ~53 Bcf of working storage capacity
- Allowed ROE of 11.5%
- Margin derived from tariff-based rates primarily serving Mid-Tex and other LDCs
As of November 8, 2023 | Page 2 |
Sustainable Performance Supported By Focused Business Model
Attractive pure-play total return supported by strong financial foundation
Diversified and
growing jurisdictional
footprint
Transparent Capital Spending Horizon
Constructive
Regulation Focused
on Safety and
Reliability
Sustainability
Integrated Into
Strategy
- Safety-driven,organic growth strategy supports 6% - 8% earnings per share and dividend per share growth through Fiscal 2028
- 100% of earnings from fully regulated, leading natural gas delivery platform
- 21 consecutive years of EPS growth; 40 consecutive years of dividend growth
- Strong investment-grade credit ratings/ liquidity
- Regulated distribution assets in 8 states serving over 3 million customers
- 97% of rate base in states that offer policy support for investment in natural gas infrastructure
- Strong customer growth
- Favorably positioned regulated pipeline spans Texas shale gas supply basins
- Comprehensive risk-based replacement program
- Further enhance resiliency and supply reliability while reducing methane emissions
- Support strong customer growth in our existing footprint
- Annual filing mechanisms in most jurisdictions offer regular, consistent rate adjustments
- Earning on ~90% of annual capex within 6 months; ~99% within 12 months
- Significant percentage of revenue earned through fixed or tariff-based charges
- Formal Board of Director oversight over sustainability
- Comprehensive plan to reduce environmental impact from operations
- Safely providing reliable, efficient and abundant natural gas with a lower carbon footprint than electricity
- Investing in the communities we serve
As of December 1, 2023 | Page 3 |
Safety Driven, Organic Growth Strategy
Constructive Regulatory Mechanisms Support Efficient Conversion of Safety and Reliability Investments into Financial Results
- $17 billion in capital investment through 2028; >82% allocated to safety
Rate Base
$28.0B- $30.0B
$16.6B
$14.1B
Constructive rate mechanisms
that reduce regulatory lag
Annual Capex Recovery
6% - 8% Consolidated EPS
growth
Earnings per Share $8.35 - $8.75
$6.45 -
$6.65
$6.10
~90%
FY2022 | FY2023 | FY2028E | ||||||
Distribution | Pipeline | Within 0 | - 6 Months | |||||
Within 7 | - 12 | Months | ||||||
FY2023 | FY2024E | FY2028E | ||||||
Greater than | 12 Months |
As of November 8, 2023 | Page 4 |
Constructive Regulation Focused on Safety and Reliability
~90% of Annual Capital Spend Begins to Earn Within Six Months
Regulatory Mechanisms | Recovery Method | Service Territory Detail | CapEx | ||||||
Deferral/ | Annual | General | Rate Base1 | 2024E | |||||
Jurisdiction | Infrastructure | Forward- | Meters (000s) | % of | |||||
Filing | Case | ($MM) | ($MM) | ||||||
Looking | |||||||||
Total | |||||||||
Texas | |||||||||
• | Mid-Tex | 8.209 | P | RRM/DARR/ G | - | 1,856 | 6,800 | 41 | 1,250-1,275 |
RIP | |||||||||
• | APT | GRIP | - | GRIP 2 | - | NA | 4,400 | 27 | 830-840 |
• | West | 8.209 | P | RRM/GRIP | - | 331 | 1,150 | 7 | 170-180 |
Texas | |||||||||
Louisiana | RSC | P | RSC | - | 378 | 1,200 | 7 | 160-170 | |
Mississippi | SIR | P | SRF/SIR | - | 274 | 1,000 | 6 | 160-170 | |
Kentucky | PRP | P | PRP | P | 186 | 640 | 4 | 60-70 | |
Tennessee | - | P | ARM | - | 165 | 560 | 3 | 80-90 | |
Kansas | GSRS | - | GSRS | P | 142 | 320 | 2 | 40-50 | |
Colorado | SSIR | P | SSIR | P | 129 | 400 | 2 | 30-40 | |
Virginia | SAVE | - | SAVE | P | 25 | 80 | 1 | 10-15 |
- Represents an estimate of rate base as of September 30, 2023
- Requires a rate case every 5 years
As of November 8, 2023 | Page 5 |
Constructive Regulation Focused on Safety and Reliability
Ongoing Modernization Supported By Efficient Recovery Mechanisms
Constructive Regulation Supports
- Pipe replacement via risk models and industry identified materials
- Performance of necessary maintenance & monitoring work
- Employee training to improve safety
- Compliance with evolving rules and regulations
Constructive Regulation Provides
- Reduced Regulatory Lag
- Annual mechanisms / Infrastructure mechanisms
- Forward-lookingtest periods
- Expense deferrals
- Revenue Stability
- Base charges - 62% of residential distribution revenue1
- WNA - covers 96% of distribution revenue1
- Bad debt recovery covers 81% of distribution customers, insulating revenue from the commodity portion of bad debt expense
- Pipeline & Storage segment - tariff-based revenue
• More predictable earnings and cash flow
• Regular, consistent rate adjustments
• Smaller annual impact to customer bills
1. Revenue excluding gas costs
As of December 1, 2023 | Page 6 |
Leading Natural Gas Delivery Platform
97% of Rate Base in states that offer policy support for investment in natural gas infrastructure
Passed
(Atmos Passed Proposed Legislation
Jurisdictions)
As of December 1, 2023 | Page 7 |
Leading Natural Gas Delivery Platform
Diversified LDC Platform in Eight States
• Largest pure-play natural gas LDC with over 3 million customers
• Largest Natural Gas Distributor in Texas with ~ 2.1 million customers
• ~73,000 miles of distribution and transmission mains
• Connected to 38 different pipelines across 8 states providing supplier diversity
• Blended allowed ROE of 9.8%
• Constructive regulatory mechanisms reduce lag
• ~65% of revenues earned in the first 6 months of the fiscal year
• $12.2 billion estimated rate base as of September 30, 2023
• Represents 67% of consolidated net income
As of November 8, 2023 | Page 8 |
Modernizing Our Distribution System
~$12.5 Billion Capital Plan Through 2028; > 82% Focused On Safety and Reliability
- Replace 4,000 - 5,000 miles of distribution system pipe
- 6% - 8% of total system
- Replace 120,000-170,000 steel service lines
- 15% - 20% reduction
- Install wireless meter reading
- ~75% anticipated WMR coverage
- Support Customer Growth
- 2022 DOT Report
- 2023 figures are based on fiscal year data
Distribution Miles Replaced1,2
1000
750
500
250
0
2016 2017 2018 2019 2020 | 2021 2022 2023 24E-28E |
Bare Steel, Cast Iron, Vintage Plastics | Other Risk-Based Materials |
Inventory of Steel Service Lines1,2 | ||||
1,200 | 1,167 | |||
1,000 | ||||
Thousands | 800 | 705 | ~600-630 | |
600 | ||||
400 | ||||
200 | ||||
0 | ||||
2012 | 2023 | 2028E | ||
As of December 1, 2023 | Page 9 |
Leading Natural Gas Delivery Platform
APT is Favorably Positioned Intrastate Pipeline Spans Texas Shale Gas Supply Basins
• Regulated by the Railroad Commission of Texas
• Established to provide gas supply service to Mid-Tex and other LDCs
• 100% of margin derived from tariff-based rates
• ~5,700 miles of intrastate pipeline
• Spans multiple key shale gas formations
• Connections at all 3 Texas Hubs - Waha, Katy & Carthage
• Transported approximately 831 Bcf in Fiscal 2023
• Average throughput of 2.3 Bcf/d
• Five storage facilities with 53 Bcf of working capacity
• Allowed ROE of 11.5%
• Margin derived from tariff-based rates primarily serving Mid-Tex and other LDCs
• $4.4 million estimated rate base as of September 30, 2023
• Represents ~33% of consolidated net income
As of December 1, 2023 | Page 10 |
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Disclaimer
AEC - Atmos Energy Corporation published this content on 01 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 December 2023 17:55:37 UTC.
