Greetings, and welcome to the Atmos Energy's first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Dan Meziere, Vice President of Investor Relations and Treasurer. Thank you, Brock. Good morning, everyone, and thank you for joining us this morning. With me this morning are Kevin Akers, President and Chief Executive Officer, and Chris Forsythe, Senior Vice President and Chief Financial Officer. Our earnings release and conference call slide presentation, which we will reference in our prepared remarks, are available at atmosenergy.com under the Investor Relations tab. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of non-GAAP measures to the closest GAAP financial measure. As we review these financial results and discuss future expectations, please keep in mind that some of our discussions might contain forward-looking statements within the meaning of the Securities Act and the Securities Exchange Act. Our forward-looking statements and projections could differ materially from actual results. The factors that could cause such material differences are outlined on slide 25 and are more fully described in our SEC filings. Our first speaker today is Chris Forsythe, Senior Vice President and CFO of Atmos Energy. Chris? Thank you, Dan, and good morning, everyone. We appreciate you joining us and your interest in Atmos Energy. We are off to a solid start to the fiscal year. Yesterday, we reported fiscal 2021 first quarter net income of $218 million or $1.31 per diluted share. Our first quarter performance largely reflects positive rate count and outcomes driven by system modernization spending, customer growth in our distribution segment, and lower O&M spending, largely due to the timing of such spending in both of our segments. Consolidated operating income increased by 18% to $299 million in the first quarter. Slide four summarizes the key performance drivers for each of our operating segments. Rate outcomes provided an incremental $50 million in operating income. Customer growth in our distribution segment contributed an incremental $6 million, as we continue to benefit from strong population growth in several of our service areas, most notably in our North Texas distribution business. For the 12 months ended December 31st, we experienced 1.7% net customer growth in our North Texas distribution business and 1.4% net growth across our eight-state footprint. The ongoing effects of the pandemic reduced consolidated operating income by approximately $9 million this quarter, primarily in our distribution segment. Quarter-over-quarter, operating income fell approximately $2.5 million due to lower commercial demand attributable to the effect of the pandemic on the economy. Additionally, we experienced a $4.5 million decline in service order revenues, primarily due to the temporary suspension of collection activities, and bad debt expense increased about $2 million quarter-over-quarter. Consolidated O&M, O&M expense, excluding bad debt, decreased $16 million. During the quarter, we deferred non-compliance spending into later in the fiscal year as we evaluated our customer load. O&M in our distribution segment was about $8 million lower than the prior year, reflecting lower employee, travel, and training costs. O&M in our pipeline and storage segment was approximately $8 million lower than the prior year, primarily due to non-recurring well integrity costs incurred in the prior year, combined with O&M management during the first quarter of this year. Consolidated capital spending decreased approximately 14% to $457 million, with 87% of our spending directed towards safety and reliability spending to modernize our system. This decrease largely reflects the timing of project spending in our distribution segment. We remain on track to spend between $2 billion and $2.2 billion in capital expenditures this fiscal year, with more than 80% of the spending focused on modernizing our distribution and transmission network while reducing methane emissions. We continue to execute our well-established regulatory strategy focused on annual filing mechanisms, which mitigate the incremental impact of customer bills while reducing lag. To date, we have implemented $110 million in annualized regulatory outcomes, and currently, we have about $32 million in progress. Slides 18 through 24 summarize these outcomes, and slide 17 outlines our planned filings for the remainder of the fiscal year. During the first quarter, we completed over $700 million of long-term financing. We remain focused on balancing the need to finance our capital expenditure program in a cost-effective manner with maintaining the strength of our balance sheet. Following the completion of our $600 million 10-year note issuance in October, we reduced our weighted average cost of debt to 3.99% and achieved a weighted average maturity of approximately 19 years. We also executed four sales arrangements under our ATM for approximately 1.2 million shares from $122 million, and we settled forward agreements on 2.1 million shares for approximately $216 million in net proceeds during the quarter. As of December 31, we have approximately $247 million in net proceeds available under existing forward sales agreements that we will utilize by the end of the fiscal year. We have now priced a substantial portion of our fiscal 2021 equity needs and anticipate satisfying our remaining fiscal 2021 equity needs through our ATM program. As a result of this financing activity, our equity capitalization was 58.5% as of December 31, and we finished the quarter with approximately $2.9 billion liquidity under our credit facilities and equity forward agreements. The strength of our balance sheet and our five-year plan continues to be recognized by the credit rating agencies. During the first quarter, Moody's and S&P maintained their ratings with a stable outlook. Details of our financing activities and our financial profile can be found on slides six through nine. So to summarize, our first quarter performance, our financing activities, and regulatory activities were in line with our expectations. As we continue through the winter heating season, we continue to remain cautious given the unpredictable nature of the pandemic. However, with yesterday's reaffirmation, we remain confident in our fiscal 2021 earnings per share guidance of $4.90-$5.10. Thank you for your time this morning. I will now turn the call over to Kevin for his remarks. Kevin? Thank you, Chris. As you can see from our first quarter results, we are off to a good start. We remain focused on executing our proven investment strategy of operating safely and reliably while we modernize our natural gas distribution, transmission, and storage systems. We are continuing our investments in people, processes, and technologies that will enable Atmos Energy to scale and efficiently and safely invest $11 billion-$12 billion over the next five years. Working to achieve our vision to be the safest provider of natural gas services, we provide safety messaging to our customers and our communities, innovate and advance employee training, and invest in the modernization of our system. Over the last 10 years, we have invested more than $11 billion company-wide to modernize our pipeline infrastructure, over 80% of which was allocated to safety. Over the next five years, we anticipate spending $11 billion-$12 billion as we replace approximately 5,000-6,000 miles of our distribution and transmission pipe, including the replacement of the remaining cast iron by the end of 2021. To build upon our continuous improvement efforts, in 2016, we started the process of implementing a Pipeline Safety Management System, following the American Petroleum Institute's 2015 publication of the voluntary recommended practice. This voluntary measure encourages continuous improvement by reviewing practices, policies, and procedures as we learn from our experiences and from those of others in the industry. This quarter, the National Transportation Safety Board held a public meeting on January 12th related to the incident that occurred at a Dallas, Texas, residence in February 2018. The field and gas investigation and lab reports confirmed that unreported third-party excavation damage by mechanical equipment caused the main to crack and leak. We are currently reviewing the complete findings and recommendations released after the meeting and expect to receive the final report soon. Because third-party damage remains one of the greatest threats to natural gas distribution systems, we have been and will continue to be a champion for damage prevention. Through such efforts as auditing our third-party line locating services, to empowering our employees to proactively stop by excavation sites, to provide damage prevention materials and ensure proper 911 notification, we have seen our third-party damage rate continue to outperform the industry average. We continue to undertake numerous safety and other continuous improvement actions, such as updating our leak survey and leak investigation procedures to include mandatory 911 notification when a probable or existing hazardous condition is discovered if first responders are not already on site. As I've discussed before, we've enhanced our technical training program to provide a virtual format coupled with hands-on experience for our employees. In this virtual training environment, we have been able to reduce class sizes and duration to improve the training experience, all without sacrificing quality. These are only a few of the improvements that Atmos Energy has been making towards achieving our vision to be the safest provider of natural gas services. You may recall on our FY 2024 fourth quarter earnings call, we announced five focus areas in our environmental strategy, all designed to reduce our carbon footprint in combination with our pipe replacement efforts. These five focus areas are gas supply, operations, fleet, facilities, and customers. I also discussed the progress made in minimizing our carbon footprint, as well as our water and land impact at some of our offices and service centers. Today, I want to highlight another focus area for you: gas supply. We are working to increase the amount of RNG that we have on our system to help customers reduce their carbon emissions. Annually, we move nearly 5.5 BCF of RNG across our system, which represents approximately 2% of our distribution sales volumes. We are currently assessing over 20 RNG opportunities adjacent to our system in several states for additional supply. During the first quarter, we initiated a project in Colorado with a dairy to connect RNG from their facility to our system. Although it's too soon to commit to how much RNG we can ultimately transport across our system... Please know we will be working with regulators and all stakeholders to help develop the frameworks for commercially viable RNG solutions to support our customers and improve the environment. Finally, during the first quarter, we continued to enhance our sustainability reporting as we published our third corporate responsibility and sustainability report, as well as our methane emissions report. Both of these can be found in the corporate responsibility section of our website. These reports, paired with our corporate responsibility section of our website, allow us to tell our story and keep stakeholders informed about what we are doing to support the communities where we live and work. As you can see from the highlighted continuous improvement efforts, we remain focused on the long-term sustainability of Atmos Energy, and the foundation of that long-term sustainability is the 4,700 men and women who are dedicated to safely operating our system, providing exceptional customer service, and giving back to the communities where we live and work every day. They are successfully executing a proven strategy that is focused on modernizing our system to safely deliver reliable and affordable natural gas in an environmentally responsible manner. The long-term fundamentals of this strategy remain the same. They are supported by the fact that we operate in constructive jurisdictions, where several of our markets continue to have strong long-term growth potential, most notably the DFW Metroplex, which is the 4th largest metropolitan area in the country. Additionally, these jurisdictions recognize the value that natural gas provides to their economies in an environmentally responsible manner. The successful execution of our strategy, the strength of our balance sheet, and our strong liquidity leaves us well positioned to continue to safely deliver reliable, affordable, efficient, and abundant natural gas to homes, businesses, and industries to fuel our energy needs now and in the future. I appreciate your time this morning, and thank you for your interest in Atmos Energy, and we'll take any questions that you may have, and I'll turn it back over to the operator. Thank you, sir. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question today is from Jeremy Tonet of JP Morgan. Please proceed with your question. Hi, good morning. Good morning, Jeremy. Hey, good morning, Jeremy. Thanks for taking my questions. Just want to start off, you know, there was a lot of concerns in the market, obviously, last March when COVID hit, and this was the first, you know, heating season where you guys got to see the full impact there. And just wondering if you could expand a bit on, can you speak to the COVID impacts on the quarter versus your expectations? And are you seeing impacts, you know, kind of consistent going forward into 2021 with your expectations overall? Sure, Jeremy, I'll start here, and Kevin, you know, feel free to jump in as well. I mean, as I mentioned earlier, we had about a $9 million quarter-over-quarter impact that we've attributed to COVID between commercial load loss, the decline in service order revenues, and a little bit of bad debt expense. On the commercial load loss, that is certainly well within the planning scenarios that we had developed over the summer and into the fall as we established our earnings per share guidance. So from that perspective, we're pleased to see that the commercial load loss is in line with those expectations. We'll continue to monitor that as we move through the second quarter. We got still another, you know, two or three months left in our winter heating season, which, by the end of winter heating season, we'll have about 70% of our distribution revenues booked for the fiscal year, and we'll have some more clarity around what the, the impact on the margin line item will be. Same thing with the service order revenues. A lot of that will be contingent upon when we resume full collection activities, and we're working with our regulators on that, keeping them abreast of what we're doing there. But again, that is completely in line with our expectation. Yeah, Jeremy, the only thing I'll add to that is, as you've heard us say many times before, our team, our risk management compliance team, our operations team, our shared service group, continue to adhere and follow to our practices and protocols that are in place, again, allowing us to continue to execute at the highest level on all fronts. Even though we've seen an increase in some parts of our territory in the number of cases, we are glad to see the vaccine start to be rolling out across our service territory as well. But we believe with those practices, protocols, and things we've been able to have in place over the last two months, we'll continue to execute on a go-forward basis at a very high level. That's very helpful. Thanks. Maybe just kind of turning over to O&M. Given the, you know, the O&M tailwinds you've realized already, what are the main drivers and timing of your expected O&M growth over the course of the year? Yeah. So in the O&M, as we talked about last quarter, we've assumed a kind of a full O&M budget, if you will, of our full compliance program. So our strategy going into the first quarter was to defer some spending that we didn't need to do in the first quarter, to kind of see how the customer load loss was materializing. I think we've got a better handle on that now, and as you saw and some of the details around the guidance, we're still reaffirming the O&M range that we initially put out last fall. So again, a lot of that will be focused on compliance activities, as well as other activities that are designed to mitigate risk. As you heard Kevin talk about, you know, third-party damage, we'll continue to step up our efforts in that particular area, as well as just other system and maintenance activities that are not necessarily compliance-oriented, but we certainly want to be performing to maintain the system the way that we like to maintain it. You've heard us talk before, we certainly assume in our O&M plan, not just what we need to meet compliance purposes, just to meet just in time, but we're also keeping an eye towards what our requirements are further down the line, later in the fiscal year or into next year, so that we are well ahead of those compliance requirements, so that we can meet those deadlines without having to wait till the last minute. Got it. That's helpful. Thanks. And you touched on this a bit in your commentary, but I was hoping you could expand a bit more. It seems for the, in the marketplace, for the LDC space as a whole, there's some concern with regards to new laws that could impact you know new gas hookups, effectively banning that. Just wondering, I guess, you know, how you guys see that risk for you in your service territories and how, I guess, it compares for Atmos versus other LDC peers and differences you see there? Yeah, Jeremy, I'll start with that. Yes, again, as I've said, we have very constructive rate jurisdictions, and we continue to see growth, as Chris talked about, across our service territory. We haven't seen any bans, whether they're on hookups or usage or those sort of things across our service territory. We stay in close contact through our stakeholder engagement strategy, our local public affairs and operating teams, with our city jurisdictions, our state legislators as well. Keeping them informed of what value natural gas brings, what Atmos Energy is doing in their communities. So we stay in touch with them to keep them up to date on an ongoing basis, and haven't really seen any even come up at the legislative level or through discussions regarding gas bans or appliance hookups at this point. Got it. I think we might have seen some legislation in some states that would-- at the state level, that would ban or stop these type of bans. Have you guys seen anything like that in your service territories or have any expectations for that? Yeah, we're working with associations and peer companies in all of our jurisdictions to keep an eye on bills that are being filed at the state level. These are called all-fuels bills, if you will. You may recall that last year there was one approved in Tennessee and one approved in Louisiana. And we're very encouraged by those bills. I think it highlights the value that natural gas continues to bring and the value of customer choice in choosing an affordable energy opportunity across our footprint. So we're aware of those. We're working with the different associations, we're working with our peer companies as well, to make sure that the customers have that choice of fuel going forward. Got it. I'll stop there. Thank you very much. Thank you, Jeremy. The next question is from Richard Ciciarelli of Bank of America. Please proceed with your question. Hey, good morning. Good morning, Richie. Good morning. morning. Good morning. Hey, thanks for taking my question. Just on the customer growth side, it's obviously pretty impressive this quarter. Just, could you provide any more color on, on what you're seeing from a customer class? Is it more on the residential side with new customer hookups? And how has that kind of progressed into fiscal 2Q, thus far with, you know, potentially more immigration into the state of Texas there? Yeah, I'll start, and Kevin, you can certainly help out as well. You know, as I said, you know, we've got 1.4% across the eight-state footprint, 1.7% here in North Texas, and a lot of that is new residential growth. And as it's a trend that we started, what we've really been seeing now for quite some time, but it has continued throughout this pandemic. I think the stories we're reading, you see more and more folks that are interested in maybe moving into the suburbs, looking for either a first home or maybe a different type of home as they're accommodating their work from home protocols and strategies. So that's what's driving a lot of the growth. Certainly here in the North Texas area, we continue to see, you know, robust underlying economic activity in terms of companies evaluating the Dallas-Fort Worth market in terms of relocating in this area. And we continue to see, you know, if you come to Dallas, there are cranes and construction everywhere. So, I mean, we're still seeing that underlying activity. And, you know, a lot of that's being driven by the residential class, and that's consistent too, across our footprint. And, you know, really, in our first quarter, the number of hookups that we had from a residential perspective was among the highest that we've seen in a number of years. And we're grateful to see that, not only in North Texas, but across most of our service territories. Yeah, Chris, I'll just quickly add to that. In addition, in some of our other states, Mississippi, Kentucky, we're seeing industrial expansion as well, which is a good sign in this economy, as well as new industrial customers coming into those locations as well. So, we see it, as Chris said, with residential, commercial starting to move into the metroplex, but again, good opportunity on the industrial side and our other footprint as well. Got it. That's very helpful. And then just on your equity needs, obviously, you mentioned you priced a good portion of it forward, and then the remaining is through the ATM this year. But just as you think about kind of your long-term plan, keeping that cap structure towards the 60% level, given you can earn on actual cap structure in Texas, I mean, and just given where your multiple is, could you look at, you know, other forms, you know, whether it's portfolio optimization to kind of recycle capital or creating a HoldCo structure? Just curious how you guys are thinking about that, just given where your multiple is today. Sure. I mean, we certainly put together our strategic plan every year, refresh it, if you will. I mean, these are things that we're certainly thinking about. You know, I'll just remind everybody that when we put together our most recent five-year plan and consistent with what we've done the last several years, all of our equity financing is already assumed in that five-year plan. So when you look at the 6%-8% earnings and dividends per share growth, the projected earnings per share out in the out years, that has assumed a wide variety of potential stock prices. And we put that guidance out after we've gone through that rigorous assessment. So we feel right now the current financing strategy is one that's successful for us in the past. We continue to believe that will be successful for us in the future. But we will continue to evaluate certainly different structures. And we've talked about before, in terms of asset dispositions, our eight-state footprint, we're very, very comfortable with. We've got good jurisdictions, very constructive jurisdictions, and we're very familiar with these jurisdictions. And at this, you know, it's, again, we always consider it, but that's not a key part of our strategy, and we don't need that type of activity to achieve the 6%-8% earnings per share growth over the next five years. Got it. That's that's helpful. And just one more, if I can slip in. On the RNG front, you mentioned you're looking over, I, I guess, 20 different RNG opportunities. Are you seeing this coming from new outlets or, or what's kind of driving this demand? Is it more on the dairy farm side or landfills? Just curious what kind of customer base you're looking at over there. Yeah, you hit the answer there with the last two. It's the dairy industry itself and its landfill projects at this point, probably, have the majority of those approximately 20 projects that we're looking at, and it's scattered across our footprint. As we mentioned in our opening remarks, we just closed out a supply project with a firm there in Colorado, and we continue to work on several others across Kentucky and other parts of our jurisdiction as well. But they're in that area. They're in the dairy side and the landfill side at this point. All right, great. That's all I had. Thanks for all the time. Thank you, Richie. The next question is from Insoo Kim of Goldman Sachs. Please proceed with your question. Thank you. My first question is a follow-up to the customer growth one. When we look at what's embedded in your five-year growth plan, what's the range of customer growth across your jurisdictions that you're assuming? Yeah, when we put together the plan, we're pretty conservative on that growth estimate because it's difficult to estimate when exactly it'll materialize. So we basically just assume that the same customer count, or, you know, customer base that we have at the time that we publish the plan, and just let that growth be a bit of an upside for us, as it materializes. Again, primarily because it's very difficult to forecast in which period that growth may occur. Got it. So I guess when we look at the capital spend and the rate base growth, it's not the bulk of it; again, it is just the infrastructure replacement and modernization as opposed to new customer line hookups. Right. Exactly. As I mentioned earlier- Yeah. Yeah. Right. Over 80% of the spokes there. Yep. Got it. My other question is to your comments on, you know, safety improvement initiatives and actions that you've taken already and, you know, following up on the NTSB recommendations. Given the report that had come out about a month ago, do you see what you see from either an O&M perspective or a, I guess, a capital perspective that could, you know, be elevated versus your plan, or is that already embedded in the growth plan that you've laid out? Yeah, because we continually, you know, evaluate our practices and our protocols and adopted several of the recommendations already into practices, you'll find that on our website. We don't believe that implementing the recommendations that have been laid forth will have a material impact on capital or O&M at this point. Got it. That's it for me. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone handset. Our next question is from Charles Fishman of Morningstar. Please proceed with your question. Good morning. Just another follow-up on the NTSB report. So at this point, we're just waiting on the final report, or you're waiting on the final report. Is there anything else that's triggered by that final report? I mean, is there any— is the Railroad Commission waiting on that report to issue some kind of final, their final report, any of your city regulatory bodies, any insurance claims, any legal issues? I mean, is there anything else that's out there besides this final NTSB report? There's a lot packed in there. Let me see if I can cover all those for you. The final report itself, from our understanding, Charles, is merely just corrections or edits to the abstract and other information that you've seen out there already. And again, we anticipate that coming out really soon. And the Railroad Commission was a party to the investigation, just as we were, and they paused their investigation until the NTSB was complete. So we anticipate them to pick up their investigation sometime here soon. As you saw in one of the recommendations, they'll be partnering with PHMSA to do an audit of our integrity management programs. So we anticipate them to pick their investigation back up and close it out relatively soon. I think, on your other question, there is no open litigation related to the incident. Okay. And looking at the preliminary report or on the virtual meeting last month, well, it appears, you know, the Railroad Commission and Pipeline and Hazardous Materials Safety Administration, they have a to-do list, too. So I guess... I mean, their report would include the things they have to do. Yeah. We'll all receive as in that NTSB report, those recommendations, as you pointed out, were directed to several of the parties to the investigation. We'll all have responses back to the NTSB, and it's my understanding that our initial responses will have a timeframe of about 90 days or so to get our initial response back once we receive that final report. Okay. And then, just one other, almost a housekeeping question. Slide 13, footnote two, where you have no regulatory assets or liabilities related to COVID-19 at this point. Yet, it's my understanding you have received approval to record regulatory assets in just about all your service territory. So the decision not to record any regulatory asset at this point, based on COVID-19, was your decision. It was driven by the fact that you were able to control your expenses at this point, that they were reduced enough that you didn't feel a need to record any reg assets. Is that a fair assessment of that? Yeah, it's pretty close. I mean, as you mentioned, Charles, we've got the orders that cover about 90% of our customer base right now. We're evaluating the language in those orders. They were sufficiently broad, and so we're interpreting how best to evaluate that order vis-a-vis our filings, talking with our regulators. And we anticipate by the end of the fiscal year that we will establish some form of regulatory asset. It's just a matter of timing in this fiscal year when we establish that. But we are closely evaluating that right now, and that's been factored into the guidance for the remainder of the fiscal year. Got it. Okay. So it's more timing that, you didn't have anything in the first quarter. Got it. That's, that's all I had. Thank you. Thank you, Charles. There are no additional questions at this time. We appreciate your interest in Atmos Energy, and thank you for joining us. A recording of this call will be available for replay on our website through March 31, 2021. Have a good day.