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Atmos keeps focus on growth through system upgrades as CEO transition nears

Atmos Energy Corp. is focused on growing through investments in system upgrades, with 82% of its capital spending over the first nine months of fiscal 2017 devoted to safety and reliability spending, executives said during an Aug. 3 earnings call.

The gas utility company is pouring $671 million into replacing transmission and distribution pipes, service line replacements, and enhancing storage and compression capabilities, among other safety and reliability items.

These investments have been made possible by supportive regulatory environments that have allowed for timely cost recovery, including Texas' gas reliability infrastructure program, executives said.

Atmos has seen about $104 million in annualized operating income increases from rate activity so far in the fiscal year, which ends Sept. 30. The greatest of these was a settlement in the company's mid-Texas cities annual rate review that allowed for a net increase in annual operating income of $36.2 million, effective June 1.

Atmos on Aug. 2 reported adjusted net income of $70.8 million, or 67 cents per share, in the fiscal third quarter, up from $66.1 million, or 64 cents per share, a year earlier.

Kim Cocklin, Atmos Energy's CEO, said the quarter's earnings reflected the positive regulatory environments in which Atmos operates and the company's work on its infrastructure. "[The quarter] was another confirmation that our long term strategy to grow by investing in the safety and reliability of our infrastructure," Cocklin said.

Cocklin said that strategy would remain the focus at Atmos when President and COO Michael Haefner takes on the role of president and CEO in October.