Earnings Call: Q2 2021

May 6, 2021

Hello, and welcome to the ATO Q2 2021 Conference Call and Webcast. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Dan Bazier, Vice President, Investor Relations and Treasurer. Please go ahead, sir. Thank you, Kevin. Good morning, everyone, and thank you for joining us today. With me this morning are Kevin Akers, President and Chief Executive Officer and Chris Forsyth, 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 Today's presentation also includes references to non GAAP financial measures. You should refer to the information contained in the slides As we review these financial results and discuss future expectations, please keep in mind that some of our discussion 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 29 and more fully described in our SEC filings. With that, I will turn the call over to our President and CEO, Kevin Akers. Kevin? Thank you, Dan, and good morning, everyone. We appreciate you joining us today and your continued interest in Atmos Energy. During this quarter, we continued to successfully our proven investment strategy of operating safely and reliably while we modernize our natural gas distribution, Transmission and Storage Systems. This strategy, along with the exceptional dedication and effort of all 4,700 employees at Atmos Energy, continue to benefit our customers in the form of safe and reliable natural gas service. This was clear during winter storm Yuri, As the modernization of our systems, especially over the last 10 years, provided the reliability necessary to meet the human needs requirements of our customers. I want to take this opportunity to highlight and thank our gas supply And gas control teams and the many operations, transmission and underground storage employees that dedicated countless hours to keeping natural gas safely flowing during winter storm Yuri. The winter storm certainly highlighted the importance that reliable natural gas systems, Diversified supply portfolios, system versatility, along with underground storage capacity bring to delivering Safe and reliable natural gas service. As an example of system modernization and reliability, I want to highlight our 3rd Atmos Pipeline storage Salt Dome project. This project nearing 50% completion will provide an additional 5 Bcf to 6 Bcf of cabin storage capacity when in full service late 2022 or early 2023. This new cabin will provide us the continued capability to meet the growing demand in the Dallas Fort Worth Metroplex, as well as allow us to safely perform the required regulatory compliance work, while meeting the current needs of our customers. Additionally, APT has started our Line S2 replacement project that will create an enhanced supply hub to the east of the growing Dallas Fort Worth metroplex and bring additional supply in from the Haynesville and Cotton Valley shale plays. We anticipate this 36 inches 90 mile project to be completed in 3 phases with the final phase being complete in 2023. The storm once again highlighted the strength of our balance sheet After incurring unprecedented gas costs during the storm, we were able to quickly finance these purchases with the issuance of $2,200,000,000 in long term debt for an all in debt cost of 83.4 basis points. This financing is structured to provide us flexibility as we work with our regulators to recover these costs. In Kansas and Texas, where we incurred most of our extraordinary gas costs, New legislation was introduced to minimize the impact on the customer bill by extending the recovery periods for these unprecedented costs through securitization. The legislation in Kansas was signed into law on April 9 and allows utilities to In Texas, the legislature is considering a statewide securitization program. Under this program, Natural Gas Utilities would have the opportunity to apply to the Railroad Commission to have their extraordinary costs securitized by the Texas Public Financing Authority and to use the net proceeds to pay off the debt they incurred to finance these natural gas purchases. This legislation has been passed by the House and is currently being considered in the Senate. In our remaining states, We anticipate recovering gas costs through our normal purchase gas cost mechanisms over a 12 to 18 month timeframe. I am very proud of all 4,700 Atmos Energy employees and the work they do every day to provide safe and reliable natural gas service to our 1400 communities and 3,200,000 customers. Their dedication and commitment have Atmos Energy well positioned for success in the second half of the fiscal year. I will now turn the call over to Chris for an update on our financial performance. Chris? Thank you, Kevin, and good morning, everyone. Last night, we reported fiscal 2021 second quarter net income of $297,000,000 or $2.30 per share compared to $240,000,000 or $1.95 per share in the prior year quarter. Year to date earnings were $514,000,000 or $4.01 per share compared with earnings of $418,000,000 of $3.42 per share in the prior year period. Our 2nd quarter and year to date performance largely reflects positive rate comes driven by safety and reliability spending, customer growth in our distribution segment, lower O and M spending and a reduction in our annual effective tax rate. During the Q2, APT began refunding $107,000,000 in excess deferred tax liabilities to its customers over a 3 year period. Additionally, in Tennessee, we began refunding $17,000,000 in excess deferred taxes over a 3 year period. As a reminder, These refunds result in reduction to revenue and a corresponding reduction in income tax expense, resulting in no material impact to our net income. Since these excess deferred taxes were approved during the Q2, we adjusted our annual effective tax rate to reflect the lower tax expense that we will realize this fiscal year. The application of this lower annual effective tax rate to our results from 6 months ended March 31 resulted in an $0.11 benefit during the Q2. However, we can only recognize the associated reduction in revenue as it is billed over the last 6 months of the fiscal year. Therefore, this $0.11 benefit will be fully offset during the 3rd 4th quarters as we build those lower revenues. Consolidated operating income increased about 17% to $681,000,000 during the 6 months ended March 31. Slides 45 summarize the key performance drivers for each of our operating segments. Rate increases in both of our operating segments, driven by increased safety and reliability capital spending totaled $130,000,000 Customer growth in our Distribution segment contributed an incremental $11,000,000 as we continue to benefit from strong population growth in several of our service areas. For 12 months ended March 31, We experienced 1.87 percent net customer growth in our North Texas distribution business and 1.61% net growth across our 8 state footprint. We'd experienced an $8,000,000 decline in service order revenues in our distribution segment, primarily due to the temporary suspension of collection activities. Additionally, our provision for bad debt expense increased almost $9,000,000 in our distribution segment compared to the same period last year. This combined $17,000,000 decrease represented the most significant impact to our financial performance through the economic downturn caused by the pandemic. Our commercial sales volumes have turned significantly better than our expectations since the start of the fiscal year. After 15% and were about 2% higher year over year. While some of this increase is attributed to the significantly colder weather experienced during the Q2, Commercial sales volumes have trended less than 5% below the 2 year weather normalized average, which much of that decrease experienced during the 1st fiscal quarter. Throughout the Q2, we have noticed steady improvement as economic activity has started to pick up. Consolidated O and M expense, excluding bad debt expense decreased $14,000,000 O and M in our distribution segment was about $6,000,000 lower than the prior year, primarily reflecting lower travel costs. O and M in our pipeline storage segment was approximately $8,000,000 lower than the prior year, primarily due to the completion of some non recurring well integrity work in the prior year period and conservative O and M management as we evaluated how our revenues would materialize over the 1st 6 months of the fiscal year. Consolidated capital spending decreased 15% to $846,000,000 with 87% of our spending directed towards safety and reliability spending. The decrease largely reflects the timing of spending in our distribution segment. We remain on track to spend $2,000,000,000 to $2,200,000,000 in capital expenditures this fiscal year to further enhance the safety and reliability of 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 to customer bills while reducing lag. To date, we have implemented $110,000,000 in annualized regulatory outcomes, and we have currently about $145,000,000 in progress. Slides 2728 summarize the key attributes for these outcomes, and Slide 17 summarizes our planned activities for the remainder of the fiscal year. Due to the historic nature of winter storm Yuri, we experienced Unforeseeable and unprecedented market pricing for gas costs, which resulted in aggregated natural gas purchases during the month of February of approximately 2 point $3,000,000,000 To help pay for these costs, we completed $2,200,000,000 of long term debt financing in March. As a reminder, gas costs are a pass through cost and a recovery in all of our jurisdictions. However, in Kansas and Texas, due to the size of the costs incurred, our regulators issued orders authorizing natural gas utilities to record regulatory assets to account for the extraordinary costs associated with the storm. As of March 31, we have recorded a $2,100,000,000 regulatory asset with approximately $2,000,000,000 recorded in Texas and approximately $77,000,000 recorded in Kansas. As Kevin mentioned, we have the ability to securitize these costs in Kansas, We are carefully monitoring the proposed statewide securitization legislation in Texas. We also executed Forward sales arrangements under our ATM for approximately 2,500,000 shares for $239,000,000 and we settled Forward of bank agreements on 4,500,000 shares for approximately $461,000,000 in debt proceeds. As of March 31, We have approximately $116,000,000 in net proceeds available under existing forward sale agreements and we have about $313,000,000 available for issuance under the ATM program. We intend to satisfy our remaining fiscal 2021 equity needs through our ATM program. As a result of this financing activity, our equity capitalization, excluding the $2,200,000,000 of storm related financing issued during the Q2 was 60.4% as of March 30 first, and we finished the quarter with approximately $3,500,000,000 of liquidity. Details of our financing activities and our financial profile can be found on Slides 7 through 10. Yesterday, we reaffirmed our fiscal 'twenty one earnings per share guidance in the range of $4.90 to $5.10 per diluted share. As a reminder, approximately 70% of our distribution revenues are earned through the 1st 6 months of the fiscal year And substantially all of our pipeline storage and other segments revenues are earned under a straight fixed variable rate design. Now that the winter season winter heating season is over, We have more clarity around our revenues for the remainder of the fiscal year and we believe fiscal 2021 earnings per share will be at the upper end of our guidance range. We anticipate our sales volumes to be consistent with what we typically experience during the second half of the fiscal year. We also anticipate our Service order revenues were trained consistently with the 1st 6 months of the fiscal year. We have also reflected in this guidance the decrease in revenue over the last 6 months of the fiscal year as to refund excess deferred taxes to our customers and we have updated our income tax expense guidance range to reflect the impact of these refunds. Finally, we anticipate that O and M will increase modestly during the second half of the fiscal year and be in line with our original O and M guidance range. We continue to meet all of our compliance requirements and we will begin to address some of the system maintenance work we were able to safely delay during the first half of the fiscal year. Slides 11 12 provide additional details around our guidance. Thank you for your time today. And I will now turn it back over to Kevin for his closing remarks. Kevin? Thank you, Chris. I appreciate that financial update. As you heard, we continue to be focused on the long term sustainability of Atmos Energy And remain on track to meet our fiscal 2021 targets. As we look to the second half of the year, we will continue to execute on our strategy that supports our vision to be the safest provider of natural gas services. During our last two quarterly calls, I've shared the progress we are making to minimize our carbon footprint as well as our water and land impact at some of our offices and service centers, including the work we are doing to increase the amount of RNG we have on system today and to help customers reduce their carbon emissions. To date, we are evaluating approximately 30 RNG projects across our systems. As a reminder, our environmental strategy is focused on 5 key areas: gas supply, operations, Today, I want to highlight how Atmos Energy is working to reduce methane emissions as we modernize our business and infrastructure by investing in innovation and technology. The following examples of how Atlas Energy will meet our goal to reduce methane emissions 50% by 2,035, as well as how we are helping customers understand the role that natural gas plays in reducing their carbon footprint at home in an affordable manner. We recently installed a new methane monitoring technology at our Tri Cities underground storage facility called a Glass Cloud Imaging Camera. This 360 degree fixed base camera will continuously monitor our compression and storage field assets for methane emissions. And if necessary, The technology will send alerts including pop up alerts with images to our plant operations employees in addition to text and e mail alerts. In addition to our existing methane monitoring and detection equipment, we are finalizing plans to deploy fixed base and mobile technologies throughout our underground storage operations. Additionally, we are in the process of installing a fuel cell to generate low carbon electricity at one of our facilities. The fuel cell will be powered with natural gas and is anticipated to substantially reduce the carbon footprint for that facility. We anticipate the fuel cell will be operational by the end of this calendar year. With affordability and community support always top of mind for us, our Colorado team partnered with the Greeley Well County Habitat for Humanity Group to build a 0 net energy home for a local family. This will be the first of its kind for local Habitat Homes. This home is designed to receive a home energy rating system score of 0, which means the home produces the same amount of energy it consumes over the course of the year by using efficient natural gas appliances, better insulation and solar technology. The total utility cost for this home is anticipated to be approximately $3.50 per year, which is expected to provide about $2,000 in annual utility bill savings relative to the average U. S. Home. This solution is significantly less expensive than an all electric home. We are also working with builders in 2 Texas locations to design homes that are expected to yield similar environmental results. Our employees put their heart, soul and time and energy into projects like these every day to modernize our system, to do our part to protect and preserve our environment for generations to come and to support the communities where they live and work. I'm very humbled by their compassionate commitment to be good neighbors. Providing this family with a natural gas home that is environmentally friendly And cost efficient is just one way Atmos Energy fuels safe and thriving communities. Last year, Legislation designed to promote the use of all energy sources and maintain customer energy choice, which we refer to as all fuels legislation, was passed in Louisiana and Tennessee. During the second quarter, Similar legislation was passed in Kansas, Kentucky and Mississippi. And earlier this week, the Texas Senate passed HB 17 and it is now on its way to the governor for signature. Assuming it is signed, 6 of our 8 states we'll have passed all fuels legislation. The successful execution of our strategy and our financial position have Well positioned to continue safely delivering reliable, affordable, efficient and abundant natural gas to homes, I will now open up the call for questions. Dan, I turn it back over to you and the operator. Thank you. Our first question today is coming from Insoo Kim from Goldman Sachs. Your line is now live. Thank you. Good morning. My first question is for Chris. For the quarter, thank you for explaining part of what drove that Year over year increase, it seems like there was a timing of the asset lower tax rate, but that's going to be trued up by the end of the year with no yearly But even without that, it seems like it was a relatively strong quarter versus what we had expected at least. Could you just describe How much of that increase was largely expected by you? How much was just an additional benefit, whether it's from rates or On weather normal volumes and guiding reiterating your guidance, are you positioned pretty well at least at that midpoint at this point? Sure, and good morning. So, yes, so a couple of things. I mean, the regulatory outcomes were pretty much in line with our expectations, primarily because that reflects the capital spending that we did in the prior fiscal year. So when We made those filings late last year. They carry over into this year. So we had pretty good visibility into those outcomes. I would you noted the temporary Timing difference around the update to the annual effective tax rate, which will unwind by the end of the year. And then also too, we were very conservative on the O and M Spending in the first half of the fiscal year as we were able to kind of just take a wait and see approach with respect to how our commercial customers in particular would behave during the pandemic. And as I mentioned a few minutes ago, the performance there has been better than what we anticipated. So we did hold back some of the spending on the O and M side until we had a better sense where those revenues will begin to materialize. And now that we're out of the winter heating season and focused on the second half of the year, as As I mentioned, we'll be modestly increasing that O and M spend. And given the momentum that we see with the regulatory outcomes, the Commercial sales volumes beginning to trend in the right direction as economic activity picks up and the fact that we'll do some modest increase We feel confident that we'll be at the upper end of the range by the end of the fiscal year. Okay. So upper okay, got it. That's definitely helpful. Kevin, maybe a broader Strategic question then coming off of, I think, one of another utility's recently announced sale of a couple of their utilities, gas utilities at We've asked you the strategic question on M and A before and obviously there you've talked about how there's robust Organic opportunities in most of your jurisdictions, so definitely appreciate that. But how do you balance, I guess, the valuation That the market is seemingly assigning given the recent transaction versus The ongoing financing that needs you have and at a certain point, does it make sense to potentially weigh those 2 to What the ultimate portfolio mix will be ideal for Athens? Well, good morning. I appreciate your question. Let's just start with the transaction that you're talking about there and discussion around our assets. And again, as you heard Chris go through the financial updates, the performance for year to date, our historical performance, we remain very happy with our asset Our regulatory construct and again, Anshul, as you know, we began to earn on 90% of our investment in the 1st 6 months and 99% after 12 months. And We've talked about how that story is very simple, very straightforward, easy for our folks, investors, all stakeholders to understand. And there are complications with these acquisitions as we go forward. That's why we like our plan that we have laid out today, the Performance that our divisions execute on day in and day out. But I think this transaction sends a very strong signal right to the market. In our opinion, It sends a very strong sense about the value of natural gas that it brings, particularly in meeting the energy needs on a go forward basis. The value of these assets that have been somewhat questioned over time, but are now should be coming into clear focus. So Yes, I think it sends a very strong signal to everybody about the role that natural gas is playing, continue to play going forward and the value This infrastructure out there for the reliability, the certainty, the affordability that natural gas brings. So very happy to see that have occurred, But remain very, very happy and positive with our regulatory construct and performance of our assets. Thank you. Our next question today is coming from Stephen Byrd from Morgan Stanley. Your line is now live. Hey, good morning. Congrats on continued Great performance. Good morning. Thank you. I wanted to just discuss renewable natural gas a little bit more And maybe just at a high level, get your thoughts on the kind of the overall magnitude of that potential in the longer I'm away from kind of very near term, just thinking through how meaningful that might be. I know it's a broad question, just interested in your longer term take on that. Yes, I think as you've heard us say, we continue to grow the number of projects that we have out there under We're up to 30 now and it's a mixture of dairy as well as landfill gas. We've got Combination of those things we're looking at now. We're doing about 5.5 to 6 Bs a year. That's a little North of the 2% range, I think, when you compare that to about the average distribution sales volumes that we move Across our system on an annual basis. I think we'll continue to see these projects come up and with the help of some of these energy firms that are out there, I think we'll continue to see Good opportunity to bring them on our system. But right now to hang a number on it, I think it's still a little bit early. As I said, we're at the 2 And of our overall distribution sales throughput volumes, I think there's opportunity there for us. But until we can get in and see what infrastructure may be side of that through the adjusters, processing equipment, those sort of things. I think it's still a little bit premature on our side to try and hang A target or a number out there where this could be, but we remain very optimistic about the opportunities that continue to come up. No, that's fair. Great. And then maybe just I wanted to dig in a little bit more on Texas and lessons learned from the winter You all gave a very good and very thorough update on sort of everything going on in Texas. Again, kind of a longer term question, Interested in your take on sort of other changes that you see that would be needed in Texas, whether that's operational changes, changes to contract structure, just other things on your mind longer term to ensure kind of we don't have a repeat of what happened in Texas? Good question. And I think our team, as you heard me say, I mentioned our gas supplier, gas control groups, they're continuing To go through and evaluate things that occurred throughout that 12 to 14 day period there, How we can improve our system, things we can put on our system to monitor that, additional supply diversification that we can maybe bring on to our system. That's continuing to go on, but really those are things we do each year. And I think one of the strengths, as I pointed out in my earlier remarks For us, it's our planning process. Those projects I mentioned are already in our 5 year plan, have been in our 5 year plan to allow us to continue to fortify, grow and think about where those next challenges could be. Just for example, again, the storage piece of that. So as we develop those salt caverns, we're not only thinking about past performance, we're thinking about growth on the system as well. And other places to fortify our whether it's APT infrastructure or our distribution systems as well. So I think that The ongoing evaluation of that performance continues, but I'm very proud of how our system performed through that and we'll look for Whether it's technology solutions or supply diversification, again, to help us through that. And the last Thing I'll mention on that is around that supply diversification. You look at and I'll just use our APT asset as an example here. When that Why stop slowing coming in from the west from the Permian there? We were able through the network that we've been building and fortifying And enforcing over the last 10 years to pull from the North, out of the Barnett, out of Oklahoma. We fortified that with additional supplies coming out of Carthage from the east. We had our fortifications in place where we could pull from Katy up from the south. All of those points helped us get through that situation during that storm and we needed all of those and that versatility in the system to be able to pull that and pull it at those levels, as well as the many suppliers that we have across those areas, to be able to bring those into those points. So I'm very proud of how we performed during that period and how our system continues to provide very many options for us Our next Question today is coming from Ryan Levine from Citi. Your line is now live. Hi, everybody. In terms of the salt dome storage projects that you Could you speak to what additional development opportunities you have on salt dump storage within your footprint More broadly? Well, within our footprint, Salt Dome is here in Texas. This is our 3rd cavern here in Texas. Those are behind the APT system to meet the demands of its customer base, its firm needs there These are all traditional sandstone reservoirs. There are no salt dome projects on or available in those other facilities, but we do We have contract storage services that we use through our interstate supply contracts and with 3rd party sources as well to supplement our peaking capacity needs. And some of that may potentially be salt. Right now, most of that is generally sandstone reservoirs itself. So right now, we've taken, as I said, a good hard look at this 3rd cavern development here and see that being able to help us for the near to longer term at this point. Are there additional opportunities within your footprint on the SALTZONE side that you have the resource or Commercial arrangement that you would be able to pursue to the extent that it was needed? Again, let's think about storage. Storage for us For Salt right now, as I said, it's here in Texas. Our other opportunities are sandstone reservoirs and those are near market, Near our large customer basis. So we continue to use those other 15 fields to exactly do that. So they're The only salt dome available is here in Texas and right now is our 3rd cavern development. That's the one we're focused on. Okay. And then in terms of the financing plan, appreciate the update around the securitization proceedings in the different service territories. To the extent that the Senate and the Governor support the proposal in Texas, does that crystallize Financing plans for 2021 and can you provide some color around how you're currently thinking about your equity needs in light of evolving regulatory decision making? Yes, I'll start and Kevin, if you want to chime in as well. So yes, if securitization does pass in Texas, it's our Intent at this point to participate in that program, which then would really be, I think, crystallize what we would do with the $2,200,000,000 that we executed and long term debt that we executed in March. Kind of going forward, when you think about our financing plan, Setting aside the $2,200,000,000 for a moment, we'll continue to finance our operations in a very balanced fashion using a mix of long term debt and equity to finance our needs. So that We don't anticipate that financing strategy to change. It's worked very well for us over the last 10 years and it's well understood by our regulators, Certainly the investment community and we don't see that changing at this point. So just a follow-up, To the extent that that were to happen, does that put off the table any additional equity financing needs beyond The forward agreements and other programs you already have in place? Yes. If we have the opportunity to participate in the securitization program in Texas and then have obviously the opportunity to securitize the cost in Kansas, we would anticipate that Our financing strategy would be consistent with what we've done in the past. Appreciate that. Thank you. Thank you. Our next question is coming from Charles Fishman from Morningstar. Your line is now live. Good morning. Kevin, assume The securitization passes. We're also seeing signs of inflation across the economy that people are concerned about, which will make it more difficult to control your O and M costs, which you've certainly done a phenomenal job of over the last For years now, that certainly put some pressure on rates and creates some headroom issue because we obviously know it's important to keep rates at General inflation or less, does that put some pressure on 7% to 8% CapEx growth there? How do you think about that? Because obviously that's the key to your earnings growth. Yes. You broke up there just a little bit. So let me see if I can answer your question here. I think when you look at the supply right now, the abundance of the supply, the pricing where it's come back down to, I think today, Wahall is in the $250,000,000 range or so. You look at the growth across our system and our average Bills right now are in that $49 to $50 range, absent what we've gone through this past winter, obviously. I think given those supply pricing and given the growth we have on our system, the signals we can send on our Annual mechanisms right now. I think we're very comfortable with our costing and how we compare on a go forward basis with that as well as meeting our O and M and compliance needs. And again, you've heard me talk before about at our all in cost right now Again, assuming that we get securitizations, spread out these costs on these abnormal winter pricing events here that At $5 to $5.50 right now, that equates to about a $0.01 to $0.05 on a kilowatt rate. So I think we still remain very, very competitive out there compared to electric pricing On a go forward basis for us as well. Yes. But as far as and I'm sorry, I broke up, I put myself on speaker here. Obviously, regulators look at the general level of rate increases. And will some of these costs that really aren't well inflation and higher interest rates not in your control, Will that put some pressure on your CapEx growth is what I was getting at, the 7% to 8% Annual growth rate that you've targeted over the next 5 years? I'm not anticipating any pressure at this Our CapEx program, again, we've modeled a lot of things going forward into our 5 year plan. We continue to monitor The need for our projects and can pull things forward or push some things back. So I think right now given the layout that we have For this year and the next few years going forward, I feel very comfortable with what we'll be able to execute upon. Okay. And if I may ask a second question, I was intrigued Earlier this week, when a utility in Phoenix mentioned they were very proud of the industrial Growth going on in Phoenix and they said it was second only to Dallas. And quite frankly, that surprised me. I That's electric and we're talking gas here, but industrial is a small percentage of your revenue. I think I'm looking at Slide 13, looks like 2%. But Are you seeing in this industrial growth, are you seeing higher gas demand specific to certain chemical industries or anything that might give you an extraordinary boost in revenues from the industrial sector going forward? Not that I would say would equate to an extra boost, if you will. I think we see Certainly, as the vaccines have started to roll out, the economy, to your point, has started to pick back up, things are Opening back up, we've seen some of our industrial customers across the 8 states get back to what we would call pre pandemic levels. Now some of them Stay at that because they were associated with the specific needs of that whether the medical industry or metals industry, those sort of things held steady throughout it. But those that kind of pulled back During that color period, I've now started to pick back up and head at a normal pace. To your point, we continue to see new additions and expansion is across our system, but I don't know that I would categorize it at this point as an extra boost. We're very proud to see the growth From an economic and a utilization of natural gas standpoint, and it seems to be a good diversified industrial load from auto to the distilling industry to the metals industry, but we're very proud to see that, but nothing that's It's been unanticipated at this point. Okay. That's all I had. Thank you. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to management for any further or closing comments. Thank you. We appreciate your interest in Atmos Energy, and thank you again for joining us. A recording of this call will be available for replay on our website through June 30, 2021. Have a good day.