Atmos Energy Corporation ATO today reported consolidated results for its fiscal 2015 second quarter and six months ended March 31, 2015.
- Fiscal 2015 second quarter consolidated net income, excluding net unrealized margins, was $138.5 million, or $1.36 per diluted share, compared with consolidated net income, excluding net unrealized margins, of $132.4 million, or $1.37 per diluted share in the prior-year quarter.
- Fiscal 2015 second quarter consolidated net income was $137.7 million, or $1.35 per diluted share, after including unrealized net losses of $(0.8) million, or $(0.01) per diluted share. Net income was $133.4 million, or $1.38 per diluted share in the prior-year quarter, after including unrealized net gains of $1.0 million, or $0.01 per diluted share.
- The company's Board of Directors has declared a quarterly dividend of 39 cents per common share. The indicated annual dividend for fiscal 2015 is $1.56, which represents a 5.4 percent increase over fiscal 2014.
For the six months ended March 31, 2015, consolidated net income was $235.3 million, or $2.31 per diluted share, compared with net income of $220.4 million, or $2.34 per diluted share for the same period last year. Results from nonregulated operations include noncash, unrealized net gains of $4.0 million, or $0.04 per diluted share for the six months ended March 31, 2015, compared with unrealized net gains of $7.4 million, or $0.08 per diluted share for the prior-year period. For the current six-month period, regulated operations contributed $223.0 million of net income, or $2.19 per diluted share, and nonregulated operations contributed net income of $12.3 million, or $0.12 per diluted share.
"Our financial performance reflects the results of infrastructure investments made to enhance the safety and reliability of our system, which is the foundation of our growth strategy," said Kim Cocklin, president and chief executive officer of Atmos Energy Corporation. "Our well executed regulatory strategy has produced predictable and stable earnings from our regulated operations. We remain on track to deliver our previously stated fiscal 2015 earnings guidance range of between $2.90 and $3.05 per diluted share," Cocklin concluded.
Results for the Quarter Ended March 31, 2015
Regulated distribution gross profit increased $21.0 million to $406.2 million for the fiscal 2015 second quarter, compared with $385.2 million in the prior-year quarter. Gross profit reflects a net $26.1 million increase in rates, primarily in the Mid-Tex, Mississippi and West Texas Divisions. This increase was partially offset by a $5.9 million decline in weather-related consumption. Although weather was 15 percent colder than normal during the quarter, it was four percent warmer than the prior-year quarter, before adjusting for weather normalization mechanisms.
Regulated pipeline gross profit increased $18.1 million to $91.7 million for the quarter ended March 31, 2015, compared with $73.6 million for the same quarter last year. This increase is primarily the result of a $15.3 million increase in revenues from the Gas Reliability Infrastructure Program (GRIP) filings approved in 2014 and 2015.
Nonregulated gross profit decreased $14.7 million to $22.9 million for the fiscal 2015 second quarter, compared with $37.6 million for the prior-year quarter, as a result of an $11.7 million decrease in realized margins, combined with a $3.0 million decrease in unrealized margins. Realized margins decreased $16.8 million quarter over quarter, as less volatile market conditions created fewer opportunities to capture incremental gross profit compared to the prior-year quarter. In the prior-year quarter, market conditions were more volatile as a result of significantly colder than normal weather. These conditions created opportunities to accelerate physical withdrawals that had been planned for later in the fiscal year to capture incremental gross profit. Realized margins for gas delivery, storage and transportation services increased $5.1 million quarter over quarter, primarily due to a $0.06/Mcf increase in per-unit margins partially offset by a 12 percent decrease in consolidated sales volumes.
Consolidated operation and maintenance expense for the quarter ended March 31, 2015, was $133.5 million, compared with $124.7 million for the prior-year quarter. The $8.8 million increase resulted primarily from increased pipeline maintenance spending and increased legal expenses, partially offset by a reduction in employee-related costs.
Results for the Six Months Ended March 31, 2015
Regulated distribution gross profit increased $45.6 million to $730.0 million for the six months ended March 31, 2015, compared with $684.4 million in the prior-year quarter. Gross profit reflects a net $45.4 million period-over-period increase in rates, primarily in the Mid-Tex, West Texas and Kentucky/Mid-States Divisions. Additionally, gross profit increased $3.3 million from higher transportation revenues and $2.2 million from higher revenue-related taxes. Gross profit decreased $7.9 million from weather-related consumption. Although weather was 10 percent colder than normal during the six months ended March 31, 2015, it was eight percent warmer than the prior-year period, before adjusting for weather normalization mechanisms.
Regulated pipeline gross profit increased $30.3 million to $175.3 million for the six months ended March 31, 2015, compared with $145.0 million during the same period last year. This increase is primarily the result of a $27.8 million increase in revenues from the GRIP filings approved in 2014 and 2015.
Nonregulated gross profit decreased $17.3 million to $38.9 million for the six months ended March 31, 2015, compared with $56.2 million for the prior-year period, as a result of an $11.5 million decrease in realized margins, combined with a $5.8 million decrease in unrealized margins. Realized margins decreased $14.7 million due to significantly lower market volatility in the current period compared to the prior-year period, as discussed above. Realized margins for gas delivery, storage and transportation services increased $3.2 million period over period, primarily due to a $0.02/Mcf increase in per-unit margins partially offset by an eight percent decrease in consolidated sales volumes.
Consolidated operation and maintenance expense for the six months ended March 31, 2015, was $252.0 million, compared with $240.4 million for the prior-year period. The $11.6 million increase resulted primarily from increased pipeline maintenance spending and increased legal expenses, partially offset by a reduction in employee-related costs.
Capital expenditures increased to $441.6 million for the six months ended March 31, 2015, compared with $359.0 million in the prior-year period. The $82.6 million increase is largely due to a $45.2 million increase in spending in the regulated distribution segment, primarily reflecting the timing of spending combined with a planned increase in safety and reliability investment in fiscal 2015. Additionally, spending in the regulated pipeline segment increased $37.2 million in the current-year period primarily due to the enhancement and fortification of two storage fields to further ensure the reliability of gas service to the Mid-Tex Division.
For the six months ended March 31, 2015, the company generated operating cash flow of $540.8 million, a $49.9 million increase compared with the six months ended March 31, 2014. The increase primarily reflects the timing of gas cost recoveries under purchased gas cost mechanisms.
The debt capitalization ratio at March 31, 2015 was 46.1 percent, compared with 46.2 percent at September 30, 2014 and 44.0 percent at March 31, 2014. At March 31, 2015, there was $225.0 million of short-term debt outstanding, compared with $196.7 million at September 30, 2014 with no short-term debt outstanding at March 31, 2014.
Outlook
The leadership of Atmos Energy remains focused on enhancing system safety and reliability through infrastructure investment, while delivering shareholder value and consistent earnings growth. Atmos Energy continues to expect fiscal 2015 earnings to be in the range of $2.90 to $3.05 per diluted share, excluding unrealized margins. Capital expenditures for fiscal 2015 are expected to continue to range between $900 million and $1 billion.
Conference Call to be Webcast May 7, 2015
Atmos Energy will host a conference call with financial analysts to discuss the financial results for the fiscal 2015 second quarter on Thursday, May 7, 2015, at 10:00 a.m. Eastern. The telephone number is 877-485-3107 and the international telephone number is 201-689-8427. The conference call will be webcast live on the Atmos Energy website at www.atmosenergy.com. A playback of the call will be available on the website later that day. Kim Cocklin, president and chief executive officer, and Bret Eckert, senior vice president and chief financial officer, will participate in the conference call.
This news release should be read in conjunction with the attached unaudited financial information.
Forward-Looking Statements
The matters discussed in this news release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this news release are forward-looking statements made in good faith by the company and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this news release or in any of the company's other documents or oral presentations, the words "anticipate," "believe," "estimate," "expect," "forecast," "goal," "intend," "objective," "plan," "projection," "seek," "strategy" or similar words are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in this news release, including the risks and uncertainties relating to regulatory trends and decisions, the company's ability to continue to access the capital markets and the other factors discussed in the company's reports filed with the Securities and Exchange Commission. These factors include the risks and uncertainties discussed in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2014, and the company's Quarterly Report on Form 10-Q for the three and six months ended March 31, 2015. Although the company believes these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. The company undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.
About Atmos Energy
Atmos Energy Corporation, headquartered in Dallas, is one of the country's largest natural-gas-only distributors, serving over three million natural gas distribution customers in over 1,400 communities in eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy also manages company-owned natural gas pipeline and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas and provides natural gas marketing and procurement services to industrial, commercial and municipal customers primarily in the Midwest and Southeast. For more information, visit www.atmosenergy.com.
| Atmos Energy Corporation | ||||||||||
|
Financial Highlights (Unaudited) |
||||||||||
| Three Months Ended | ||||||||||
|
Consolidated Statements of Income |
March 31 | |||||||||
| (000s except per share) | 2015 | 2014 | ||||||||
| Gross Profit: | ||||||||||
| Regulated distribution segment | $ | 406,235 | $ | 385,188 | ||||||
| Regulated pipeline segment | 91,730 | 73,615 | ||||||||
| Nonregulated segment | 22,906 | 37,589 | ||||||||
| Intersegment eliminations | (133 | ) | (115 | ) | ||||||
| Gross profit | 520,738 | 496,277 | ||||||||
| Operation and maintenance expense | 133,460 | 124,675 | ||||||||
| Depreciation and amortization | 68,022 | 61,307 | ||||||||
| Taxes, other than income | 69,046 | 60,215 | ||||||||
| Total operating expenses | 270,528 | 246,197 | ||||||||
| Operating income | 250,210 | 250,080 | ||||||||
| Miscellaneous expense | (1,561 | ) | (1,516 | ) | ||||||
| Interest charges | 27,447 | 31,601 | ||||||||
| Income before income taxes | 221,202 | 216,963 | ||||||||
| Income tax expense | 83,518 | 83,596 | ||||||||
| Net income | $ | 137,684 | $ | 133,367 | ||||||
| Basic net income per share | $ | 1.35 | $ | 1.38 | ||||||
| Diluted net income per share | $ | 1.35 | $ | 1.38 | ||||||
| Cash dividends per share | $ | 0.39 | $ | 0.37 | ||||||
| Weighted average shares outstanding: | ||||||||||
| Basic | 101,746 | 96,174 | ||||||||
| Diluted | 101,746 | 96,176 | ||||||||
| Three Months Ended | ||||||||||
| March 31 | ||||||||||
|
Summary Net Income (Loss) by Segment (000s) |
2015 | 2014 | ||||||||
| Regulated distribution | $ | 101,853 | $ | 88,743 | ||||||
| Regulated pipeline | 27,682 | 24,109 | ||||||||
| Nonregulated | 8,955 | 19,518 | ||||||||
| Unrealized margins, net of tax | (806 | ) | 997 | |||||||
| Consolidated net income | $ | 137,684 | $ | 133,367 | ||||||
| Atmos Energy Corporation | ||||||||||
|
Financial Highlights, continued (Unaudited) |
||||||||||
| Six Months Ended | ||||||||||
|
Consolidated Statements of Income |
March 31 | |||||||||
| (000s except per share) | 2015 | 2014 | ||||||||
| Gross Profit: | ||||||||||
| Regulated distribution segment | $ | 730,047 | $ | 684,359 | ||||||
| Regulated pipeline segment | 175,297 | 144,956 | ||||||||
| Nonregulated segment | 38,945 | 56,155 | ||||||||
| Intersegment eliminations | (266 | ) | (236 | ) | ||||||
| Gross profit | 944,023 | 885,234 | ||||||||
| Operation and maintenance expense | 252,042 | 240,432 | ||||||||
| Depreciation and amortization | 135,615 | 121,776 | ||||||||
| Taxes, other than income | 118,431 | 102,226 | ||||||||
| Total operating expenses | 506,088 | 464,434 | ||||||||
| Operating income | 437,935 | 420,800 | ||||||||
| Miscellaneous expense | (3,268 | ) | (3,648 | ) | ||||||
| Interest charges | 57,211 | 63,716 | ||||||||
| Income before income taxes | 377,456 | 353,436 | ||||||||
| Income tax expense | 142,177 | 133,053 | ||||||||
| Net income | $ | 235,279 | $ | 220,383 | ||||||
| Basic net income per share | $ | 2.31 | $ | 2.34 | ||||||
| Diluted net income per share | $ | 2.31 | $ | 2.34 | ||||||
| Cash dividends per share | $ | 0.78 | $ | 0.74 | ||||||
| Weighted average shares outstanding: | ||||||||||
| Basic | 101,667 | 94,013 | ||||||||
| Diluted | 101,667 | 94,015 | ||||||||
| Six Months Ended | ||||||||||
| March 31 | ||||||||||
|
Summary Net Income (Loss) by Segment (000s) |
2015 | 2014 | ||||||||
| Regulated distribution | $ | 173,240 | $ | 151,500 | ||||||
| Regulated pipeline | 49,717 | 43,555 | ||||||||
| Nonregulated | 8,371 | 17,884 | ||||||||
| Unrealized margins, net of tax | 3,951 | 7,444 | ||||||||
| Consolidated net income | $ | 235,279 | $ | 220,383 | ||||||
| Atmos Energy Corporation | ||||||||
|
Financial Highlights, continued (Unaudited) |
||||||||
|
Condensed Consolidated Balance Sheets |
March 31, | September 30, | ||||||
| (000s) | 2015 | 2014 | ||||||
| Net property, plant and equipment | $ | 7,026,078 | $ | 6,725,906 | ||||
| Cash and cash equivalents | 95,525 | 42,258 | ||||||
| Accounts receivable, net | 511,830 | 343,400 | ||||||
| Gas stored underground | 143,154 | 278,917 | ||||||
| Other current assets | 67,128 | 111,265 | ||||||
| Total current assets | 817,637 | 775,840 | ||||||
| Goodwill | 742,029 | 742,029 | ||||||
| Deferred charges and other assets | 340,900 | 350,929 | ||||||
| $ | 8,926,644 | $ | 8,594,704 | |||||
| Shareholders' equity | $ | 3,139,694 | $ | 3,086,232 | ||||
| Long-term debt | 2,455,217 | 2,455,986 | ||||||
| Total capitalization | 5,594,911 | 5,542,218 | ||||||
| Accounts payable and accrued liabilities | 295,589 | 308,086 | ||||||
| Other current liabilities | 497,927 | 405,869 | ||||||
| Short-term debt | 224,986 | 196,695 | ||||||
| Total current liabilities | 1,018,502 | 910,650 | ||||||
| Deferred income taxes | 1,338,755 | 1,286,616 | ||||||
| Deferred credits and other liabilities | 974,476 | 855,220 | ||||||
| $ | 8,926,644 | $ | 8,594,704 | |||||
| Atmos Energy Corporation | ||||||||||
|
Financial Highlights, continued (Unaudited) |
||||||||||
| Six Months Ended | ||||||||||
|
Condensed Consolidated Statements of Cash Flows |
March 31 | |||||||||
| (000s) | 2015 | 2014 | ||||||||
| Cash flows from operating activities | ||||||||||
| Net income | $ | 235,279 | $ | 220,383 | ||||||
| Depreciation and amortization | 135,615 | 121,776 | ||||||||
| Deferred income taxes | 131,292 | 119,710 | ||||||||
| Other | 10,898 | 11,187 | ||||||||
| Changes in assets and liabilities | 27,764 | 17,925 | ||||||||
| Net cash provided by operating activities | 540,848 | 490,981 | ||||||||
| Cash flows from investing activities | ||||||||||
| Capital expenditures | (441,644 | ) | (359,009 | ) | ||||||
| Other, net | (1,346 | ) | (4,904 | ) | ||||||
| Net cash used in investing activities | (442,990 | ) | (363,913 | ) | ||||||
| Cash flows from financing activities | ||||||||||
| Net increase (decrease) in short-term debt | 21,839 | (369,012 | ) | |||||||
| Net proceeds from issuance of long-term debt | 493,538 | — | ||||||||
| Settlement of interest rate agreements | 13,364 | — | ||||||||
| Repayment of long-term debt | (500,000 | ) | — | |||||||
| Cash dividends paid | (78,074 | ) | (71,380 | ) | ||||||
| Repurchase of equity awards | (7,985 | ) | (6,317 | ) | ||||||
| Net proceeds from equity offering | — | 390,205 | ||||||||
| Issuance of common stock | 12,727 | (23 | ) | |||||||
| Net cash used in financing activities | (44,591 | ) | (56,527 | ) | ||||||
| Net increase in cash and cash equivalents | 53,267 | 70,541 | ||||||||
| Cash and cash equivalents at beginning of period | 42,258 | 66,199 | ||||||||
| Cash and cash equivalents at end of period | $ | 95,525 | $ | 136,740 | ||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31 | March 31 | |||||||||||||||
|
Statistics |
2015 | 2014 | 2015 | 2014 | ||||||||||||
| Consolidated regulated distribution throughput (MMcf as metered) | 183,014 | 191,487 | 306,448 | 321,972 | ||||||||||||
| Consolidated regulated pipeline volumes (MMcf) | 126,371 | 115,830 | 247,005 | 234,604 | ||||||||||||
| Consolidated nonregulated delivered gas sales volumes (MMcf) | 105,401 | 119,967 | 196,331 | 212,604 | ||||||||||||
| Regulated distribution meters in service | 3,136,441 | 3,037,571 | 3,136,441 | 3,037,571 | ||||||||||||
| Regulated distribution average cost of gas | $ | 5.08 | $ | 6.00 | $ | 5.44 | $ | 5.82 | ||||||||
| Nonregulated net physical position (Bcf) | 17.0 | 1.9 | 17.0 | 1.9 | ||||||||||||
Atmos Energy Corporation
Susan Giles, 972-855-3729
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
