ATMOS ENERGY CORP - FORM 8-K - EX-99.1 - February 2, 2021

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Exhibit 99.1
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News Release
Analysts and Media Contact:
Dan Meziere (972) 855-3729

Atmos Energy Corporation Reports Earnings for Fiscal 2021 First Quarter;
Affirms Fiscal 2021 Guidance
DALLAS (February 2, 2021) - Atmos Energy Corporation (NYSE: ATO) today reported consolidated results for its first fiscal quarter ended December 31, 2020.

Highlights
•Earnings per diluted share was $1.71 for the three months ended December 31, 2020.
•Consolidated net income was $217.7 million for the three months ended December 31, 2020.
•Capital expenditures totaled $456.8 million for the three months ended December 31, 2020, with approximately 87 percent of capital spending related to system safety and reliability investments.
    
Outlook
•Earnings per diluted share for fiscal 2021 is expected to be in the previously announced range of $4.90 to $5.10.
•Capital expenditures are expected to be in the range of $2.0 billion to $2.2 billion in fiscal 2021.
•The company's Board of Directors has declared a quarterly dividend of $0.625 per common share. The indicated annual dividend for fiscal 2021 is $2.50, which represents an 8.7% increase over fiscal 2020.

"I am so proud of our employees and their continued dedication to execute our strategy of investing in safety and reliability," said Kevin Akers, President and Chief Executive Officer of Atmos Energy. "Their resilience and hard work positions us for continued success in fiscal 2021."

Results for the Three Months Ended December 31, 2020
Consolidated operating income increased $46.0 million to $298.8 million for the three months ended December 31, 2020, compared to $252.8 million in the prior year, which primarily reflects rate outcomes combined with lower operating and maintenance expenses in both segments, partially offset by lower service order revenue in our distribution segment, lower through system revenue in our pipeline and storage segment and increased depreciation and property tax expenses.
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Distribution operating income increased $29.3 million to $209.6 million for the three months ended December 31, 2020, compared with $180.3 million in the prior year. The increase reflects a net $37.0 million increase in rates and customer growth in most of our jurisdictions of $5.7 million combined with $2.9 million decrease in travel and entertainment expense, partially offset by a $9.8 million increase in depreciation and property tax expenses associated with increased capital investments and a $4.5 million decrease in service order revenues.
Pipeline and storage operating income increased $16.8 million to $89.3 million for the three months ended December 31, 2020, compared with $72.5 million in the prior year. This increase is primarily attributable to a $13.3 million increase from our GRIP filings approved in fiscal 2020 and an $8.1 million decrease in operating and maintenance expense due primarily to nonrecurring well integrity costs in the prior-year quarter. These increases were partially offset by a $1.2 million decrease in through system revenues, and a $4.6 million increase in depreciation and property tax expenses due to increased capital investments.
Capital expenditures decreased $72.4 million to $456.8 million for the three months ended December 31, 2020, compared with $529.2 million in the prior year, primarily as a result of timing of spending in our distribution segment.
For the three months ended December 31, 2020, the company generated operating cash flow of $157.1 million, a $15.4 million decrease compared with the three months ended December 31, 2019. The year-over-year decrease is primarily the result of the increase in the price of natural gas, the timing of gas cost recoveries under our purchase gas cost mechanisms and the timing of customer collections partially offset by the positive effects of rate case outcomes completed in fiscal 2020.
Our equity capitalization ratio at December 31, 2020 was 58.5%, compared with 60.0% at September 30, 2020, due to the issuance of $600 million of 1.50% senior notes in October 2020.

Conference Call to be Webcast February 3, 2021
Atmos Energy will host a conference call with financial analysts to discuss the fiscal 2021 first quarter financial results on Wednesday, February 3, 2021, at 9:00 a.m. Eastern Time. The domestic telephone number is 877-407-3088 and the international telephone number is 201-389-0927. Kevin Akers, President and Chief Executive Officer, and Chris Forsythe, Senior Vice President and Chief Financial Officer, will participate in the conference call. 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.
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 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
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subject to risks and uncertainties that could cause actual results to differ materially from those discussed in this presentation, including the risks relating to regulatory trends and decisions, the company’s ability to continue to access the credit and capital markets, and the other factors discussed in the company’s reports filed with the Securities and Exchange Commission. These risks and uncertainties include the following: federal, state and local regulatory and political trends and decisions, including the impact of rate proceedings before various state regulatory commissions; increased federal regulatory oversight and potential penalties; possible increased federal, state and local regulation of the safety of our operations; the impact of greenhouse gas emissions or other legislation or regulations intended to address climate change; possible significant costs and liabilities resulting from pipeline integrity and other similar programs and related repairs; the inherent hazards and risks involved in distributing, transporting and storing natural gas; the availability and accessibility of contracted gas supplies, interstate pipeline and/or storage services; increased competition from energy suppliers and alternative forms of energy; adverse weather conditions; the impact of climate change; the inability to continue to hire, train and retain operational, technical and managerial personnel; increased dependence on technology that may hinder the Company's business if such technologies fail; the threat of cyber-attacks or acts of cyber-terrorism that could disrupt our business operations and information technology systems or result in the loss or exposure of confidential or sensitive customer, employee or Company information; natural disasters, terrorist activities or other events and other risks and uncertainties discussed herein, all of which are difficult to predict and many of which are beyond our control; the capital-intensive nature of our business; our ability to continue to access the credit and capital markets to execute our business strategy; market risks beyond our control affecting our risk management activities, including commodity price volatility, counterparty performance or creditworthiness and interest rate risk; the concentration of our operations in Texas; the impact of adverse economic conditions on our customers; changes in the availability and price of natural gas; increased costs of providing health care benefits, along with pension and postretirement health care benefits and increased funding requirements; and the outbreak of COVID-19 and its impact on business and economic conditions.
Accordingly, while we believe 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. Further, the company undertakes no obligation to update or revise any of our forward-looking statements whether as a result of new information, future events or otherwise.
About Atmos Energy
Atmos Energy Corporation is the nation’s largest fully regulated, natural gas-only distributor of safe, clean, efficient and affordable energy. As part of our vision to be the safest provider of natural gas services, we are modernizing our business and our infrastructure while continuing to invest in safety, innovation, environmental sustainability and our communities. An S&P 500 company headquartered in Dallas, Atmos Energy serves more than 3 million distribution customers in over 1,400 communities across eight states and manages proprietary pipeline and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas.  Find us online at http://www.atmosenergy.com, Facebook, Twitter, Instagram and YouTube.
This news release should be read in conjunction with the attached unaudited financial information.

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Atmos Energy Corporation
Financial Highlights (Unaudited)

Statements of IncomeThree Months Ended December 31
(000s except per share)20202019
Operating revenues
Distribution segment
$876,650 $828,504 
Pipeline and storage segment
159,713 148,176 
Intersegment eliminations
(121,883)(101,117)
914,480 875,563 
Purchased gas cost
Distribution segment
411,072 397,558 
Pipeline and storage segment
(1,244)99 
Intersegment eliminations
(121,568)(100,789)
288,260 296,868 
Operation and maintenance expense138,643 152,245 
Depreciation and amortization115,285 105,062 
Taxes, other than income73,452 68,607 
Operating income298,840 252,781 
Other non-operating income6,072 4,887 
Interest charges22,010 27,229 
Income before income taxes282,902 230,439 
Income tax expense65,224 51,766 
Net income$217,678 $178,673 
Basic net income per share$1.71 $1.47 
Diluted net income per share$1.71 $1.47 
Cash dividends per share$0.625 $0.575 
Basic weighted average shares outstanding127,034 121,113 
Diluted weighted average shares outstanding127,034 121,359 

 Three Months Ended December 31
Summary Net Income by Segment (000s)20202019
Distribution$153,692 $129,757 
Pipeline and storage63,986 48,916 
Net income$217,678 $178,673 

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Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
 
Condensed Balance SheetsDecember 31,September 30,
(000s)20202020
Net property, plant and equipment$13,762,143 $13,355,347 
Cash and cash equivalents457,599 20,808 
Accounts receivable, net492,526 230,595 
Gas stored underground99,569 111,950 
Other current assets142,594 107,905 
Total current assets1,192,288 471,258 
Goodwill731,257 731,257 
Deferred charges and other assets790,191 801,170 
$16,475,879 $15,359,032 
Shareholders' equity$7,213,156 $6,791,203 
Long-term debt5,124,862 4,531,779 
Total capitalization12,338,018 11,322,982 
Accounts payable and accrued liabilities284,995 235,775 
Other current liabilities512,673 546,461 
Current maturities of long-term debt171 165 
Total current liabilities797,839 782,401 
Deferred income taxes1,542,394 1,456,569 
Regulatory excess deferred taxes695,191 697,764 
Deferred credits and other liabilities1,102,437 1,099,316 
$16,475,879 $15,359,032 

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Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
 
Condensed Statements of Cash FlowsThree Months Ended December 31
(000s)20202019
Cash flows from operating activities
Net income$217,678 $178,673 
Depreciation and amortization115,285 105,062 
Deferred income taxes64,587 46,726 
Other(2,976)(616)
Changes in assets and liabilities(237,505)(157,400)
Net cash provided by operating activities157,069 172,445 
Cash flows from investing activities
Capital expenditures(456,809)(529,186)
Debt and equity securities activities, net511 (1,602)
Other, net2,706 2,553 
Net cash used in investing activities(453,592)(528,235)
Cash flows from financing activities
Net decrease in short-term debt— (464,915)
Proceeds from issuance of long-term debt, net of premium/discount597,390 799,450 
Net proceeds from equity offering216,002 259,005 
Issuance of common stock through stock purchase and employee retirement plans4,007 4,267 
Cash dividends paid(79,023)(69,557)
Debt issuance costs(5,062)(7,738)
Net cash provided by financing activities733,314 520,512 
Net increase in cash and cash equivalents436,791 164,722 
Cash and cash equivalents at beginning of period20,808 24,550 
Cash and cash equivalents at end of period$457,599 $189,272 
 
 Three Months Ended December 31
Statistics20202019
Consolidated distribution throughput (MMcf as metered)
128,470 139,558 
Consolidated pipeline and storage transportation volumes (MMcf)
144,587 156,529 
Distribution meters in service3,369,622 3,307,663 
Distribution average cost of gas$4.63 $4.01 
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ATMOS ENERGY CORP Reports