News Column

Atmos Energy Corporation Reports Earnings for the Fiscal 2014 First Quarter; Company Affirms Fiscal 2014 Guidance

February 21, 2014



By a News Reporter-Staff News Editor at Energy Weekly News -- Atmos Energy Corporation (NYSE: ATO) reported consolidated results for its fiscal 2014 first quarter ended December 31, 2013.

Fiscal 2014 first quarter consolidated net income, excluding net unrealized margins, was $80.6 million, or $0.88 per diluted share, compared with consolidated net income, excluding net unrealized margins, of $67.7 million, or $0.74 per diluted share in the prior-year quarter.

Fiscal 2014 first quarter consolidated net income was $87.0 million, or $0.95 per diluted share, after including noncash unrealized net gains of $6.4 million, or $0.07 per diluted share. Net income was $80.5 million, or $0.88 per diluted share in the prior-year quarter, after including unrealized net gains of $12.8 million, or $0.14 per diluted share.

The prior-year quarter included net income from discontinued operations of $3.1 million, or $0.03 per diluted share.

The Company's Board of Directors has declared a quarterly dividend of 37 cents per common share. The indicated annual dividend for fiscal 2014 is $1.48, which represents a 5.7 percent increase over fiscal 2013.

"Colder weather across our service territories, coupled with constructive rate outcomes in a number of our jurisdictions resulted in a strong financial start to fiscal 2014. We remain poised to deliver fiscal 2014 earnings in the previously announced range of $2.66 to $2.76 per diluted share," said Kim Cocklin, president and chief executive officer of Atmos Energy Corporation. Results for the Quarter Ended December 31, 2013 Natural gas distribution gross profit increased $19.6 million to $299.2 million for the fiscal 2014 first quarter, compared with $279.6 million in the prior-year quarter, excluding discontinued operations. Gross profit increased $11.0 million from colder weather, primarily experienced in the Mid-Tex Division. Additionally, revenue-related taxes increased about $4.9 million, primarily due to higher revenues in the Mid-Tex and West Texas Divisions, offset by a corresponding $4.0 million increase in the related tax expense. Finally, gross profit reflects a net $2.1 million increase in rates, primarily in our Kentucky/Mid-States and Mississippi Divisions.

Regulated transmission and storage gross profit increased $10.6 million to $71.3 million for the quarter ended December 31, 2013, compared with $60.7 million for the same quarter last year. This increase is primarily the result of a $6.8 million increase in revenues from the Gas Reliability Infrastructure Program (GRIP) filing that became effective in May 2013. Additionally, increased transportation volumes, due to colder weather experienced across Texas, increased gross profit by $1.4 million.

Nonregulated gross profit decreased $3.9 million to $18.6 million for the fiscal 2014 first quarter, compared with $22.5 million for the prior-year quarter, as a result of an $8.5 million increase in realized margins, offset by a $12.4 million decrease in unrealized margins. Realized margins for gas delivery, storage and transportation services increased $2.4 million quarter over quarter, primarily due to a nine percent increase in consolidated sales volumes, coupled with a $0.02/Mcf increase in per-unit margins. Realized margins also increased $6.1 million from the prior-year quarter, primarily due to the timing and magnitude of settled financial positions quarter over quarter.

Consolidated operation and maintenance expense for the quarter ended December 31, 2013, was $115.8 million, compared with $106.5 million for the prior-year period, excluding discontinued operations. The $9.3 million increase resulted primarily from higher employee-related costs.

The debt capitalization ratio at December 31, 2013 was 54.2 percent, compared with 52.2 percent at September 30, 2013 and 53.5 percent at December 31, 2012. At December 31, 2013, there was $689.8 million of short-term debt outstanding, compared with $368.0 million at September 30, 2013 and $830.9 million at December 31, 2012.

For the three months ended December 31, 2013, the company generated operating cash flow of $34.3 million, a $4.4 million increase compared with the three months ended December 31, 2012. The increase primarily reflects the timing of customer collections and vendor payments.

Capital expenditures decreased to $180.6 million for the three months ended December 31, 2013, compared with $190.0 million in the prior-year period. The $9.4 million decrease primarily reflects an $18.4 million decrease in natural gas distribution spending due to the timing of spending under the infrastructure replacement programs and the absence of spending related to a new customer information system which was completed in the prior year. Partially offsetting the decrease was a $9.1 million spending increase in the regulated transmission and storage segment associated with the completion of the Line WX expansion project and increased cathodic protection spending. 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 2014 earnings to be in the range of $2.66 to $2.76 per diluted share, excluding unrealized margins. Total capital expenditures for fiscal 2014 are expected to range between $830 million and $850 million. Conference Call to be Webcast February 5, 2014Atmos Energy will host a conference call with financial analysts to discuss the financial results for the fiscal 2014 first quarter on Wednesday, February 5, 2014, at 8:30 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. Highlights and Recent Developments Moody's Upgrade On January 30, 2014, Moody's Investors Service raised Atmos Energy's senior unsecured debt rating two notches to A2 from Baa1, with a ratings outlook of stable, citing the company's jurisdictional diversity, increasing and stabilizing regulated margins and limited nonregulated operations.

Keywords for this news article include: Oil & Gas, Natural Gas, Energy Companies, Atmos Energy Corporation.

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Source: Energy Weekly News


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