Christopher T. Forsythe
Senior Vice President & Chief Financial Officer at Atmos Energy
Thank you, Kevin. And good morning, everyone.
Our fiscal '24 earnings per share of $6.83 increased 12% over fiscal '23. As a reminder, these results include $0.17 from the one-time benefits we have discussed previously, an unplanned property tax reduction in Texas, and lower than planned bad debt expense in Mississippi resulting from a regulatory change in how we recover uncollectible accounts. Excluding these one-time items, earnings per share increased 9.2% in fiscal '24. Our performance continues to reflect the successful execution of our operating, regulatory and financing strategies. In fiscal '24, we implemented $376 million in annualized operating income increases. These outcomes, combined with outcomes received in fiscal '23, increased operating income by over $300 million.
Strong customer growth, combined with rising industrial load in our distribution segment, increased operating income an additional $25 million, and rising peak day demand requirements from APT's LDC customers, resulting in a $15 million increase in operating income. Finally, we saw a $39 million increase from APT's through-system activities. About half of this increase was recognized during our fourth fiscal quarter. During this time, Waha pricing is negative for 63% of the trading days. These market conditions were primarily driven by unplanned maintenance on certain pipelines and delays in new takeaway capacity coming online, both of which caused spreads to widen more than we had anticipated. These fourth quarter market conditions were the primary reason why our fiscal '24 results exceeded the updated guidance range we provided in August.
Consolidated O&M excluding bad debt expense increased $65 million. This increase was largely driven by higher employee related costs due to additional headcount to support growth and higher costs associated with increased line locating activities, system monitoring, training, and administrative costs. Consolidated capital spending increased 5% or $131 million to $2.9 billion with 83% dedicated to improving the safety and reliability of our system. This spending increased rate base by approximately 13% to an estimated $19 billion as of September 30. Capital spending in our distribution segment increased $322 million, primarily as a result of increased system modernization and customer growth spending. Capital spending in our pipeline and storing segment decreased about $191 million, primarily due to the timing of cash payments for pipeline system and safety and reliability work in Texas that had been completed during the fiscal year.
Finally, we completed $1.2 billion of long-term financing. We finished the fiscal year with an equity capitalization of 61% and approximately $4.8 billion of available liquidity, which leaves us well positioned to support our future operations. Looking forward, we have initiated our fiscal '25 earnings per share guidance range of $7.05 to $7.25. Assuming the midpoint of this guidance range, this implies 7.4% growth in fiscal '24 earnings per share, excluding the previously mentioned one-time items, and we've initiated fiscal '25 capital spending guidance for approximately $3.7 billion. Additionally, Atmos Energy's Board of Directors approved a 164th quarterly cash dividend with an indicated fiscal '25 annual dividend of $3.48, 8.1% increase over fiscal '24. Finally, we rolled forward our five-year plan to fiscal '29.
Our strategy remains unchanged. We will continue to focus on system modernization through disciplined capital spending, seek time of recovery of our costs through our various regulatory mechanisms, and maintain a strong balance sheet by financing our operations using a balance of equity and long-term debt. We anticipate the execution of this five-year plan will continue to support 6% to 8% annual earnings per share growth and annual dividends per share growth. We anticipate earnings per share in fiscal '29 to be in the range of $9.15 to $9.55. As Kevin mentioned, we've included approximately $24 billion in our current five-year plan. This level of spending is expected to support rate base growth of about 13% to 15% per year. By the end of fiscal '29, we anticipate rate base to increase from approximately $19 billion today to approximately $37 billion in fiscal '29.
From a revenue perspective, we continue to execute our normal regulatory strategy of implementing approximately 20 rate filings per year. We have assumed no changes to our ROEs or regulatory mechanisms, nor have we assumed the implementation of new cost recovery mechanisms in this five-year plan. Since the beginning of the fiscal year, we have implemented $149 million of annualized operating income increases in our distribution segment. $116 million related to the implementation of our two annual rate review mechanisms in Texas, and $27 million related to the implementation of our two annual rate filings in Mississippi.
Currently, we have three filings pending, seeking about $77 million. Included in this filed for amount is approximately $40 million related to a system-wide general rate case in our West Texas distribution. This is a required filing affecting all customers in our West Texas division based on a settlement we reached in 2020. Additionally, we are required to refresh our rates following five years of GRIP filings for portions of our West Texas division. We anticipate filing two similar cases in our mid-Tex division during our first quarter where just our cities will recover our costs through GRIP. Additionally, we have filed a general rate case in Kentucky, seeking approximately $34 million. We anticipate completing all of these general rate cases in late spring of 2025.
From a margin perspective, we've also assumed normal weather, market conditions and modest customer growth in both our segments in this five-year plan. Additionally, we have assumed a 6% decrease in the oil and gas costs included in the customer bill, primarily due to lower commodity costs, partially offset by higher storage and transportation costs. Finally, we have assumed the contribution from APT's through-system business to normalize from fiscal '24 levels. Additional takeaway capacity is now in place, which should moderate spreads and we will have the full-year effect of the higher revenue benchmark in APT's wider breadth mechanism.
On the costs side, we have assumed 4% annual O&M inflation excluding bad debt expense. This inflation assumption is driven by increased spending for compliance-based activities that address system safety, system monitoring and employee costs. As we've discussed before, we are not a just-in-time compliance company, meaning that we will look to accelerate compliance-related work within the five-year plan as system conditions dictate or if other opportunities arise.
For fiscal '25, we anticipate O&M excluding bad net expense to range from $840 million to $860 million. Approximately $20 million of the year-over-year increase relates to the amortization of APT's system safety and integrity mechanism. As a reminder, this new mechanism was approved in APT's last general rate case and its flow-through mechanism for cost incurred to address new federal and state safety regulations, meaning we recognize the revenue and related O&M cost after review and approval by the Texas Railroad Commission, resulting in no impact to operating income. APT made its first SSI filing earlier this calendar year, seeking recovery of approximately $19 million in eligible SSI costs. This filing was approved in October and revenues and O&M were adjusted effective November 1 to recover these costs over a 12-month period.
Turning now to our financing plan, this five-year plan includes approximately $15 billion of incremental long-term financing to support our operations and cash needs, including the expected impact of the corporate minimum income tax -- or corporate minimum tax beginning in fiscal '27. We will continue to use a combination of long-term debt and equity to preserve the strength of our balance sheet and minimize the cost of financing for our customers and overall financing risk. As a reminder, this incremental financing is included in our earnings per share guidance for fiscal '25 through fiscal '29. Following the completion of our $650 million long-term debt issuance in October, our weighted average cost of debt is 4.1% and our weighted average maturity was 18.1 years with our next material refinancing not scheduled until June of 2027.
From an equity perspective, we anticipate meeting all of our needs through our ATM program. As of September 30, we have priced $1.4 billion, which fully satisfies our fiscal '25 equity needs and a significant portion of our anticipated fiscal '26 equity needs. This recent financing activity has substantially reduced our existing shelf registration statement and exhausted our ATM program. Once we receive the necessary regulatory approvals, we intend to file for a new three-year $8 billion shelf agreement and a new $1.7 billion ATM program to support our anticipated financing needs.
In closing, like Kevin, I am very excited for the long-term outlook for Atmos Energy. Our operational and financial performance in fiscal '24 has laid the foundation for sustained success into fiscal '25 and beyond. The successful execution of this plan will continue to support 6% to 8% fully regulated earnings per share growth and commensurate dividends per share growth, while maintaining a strong financial profile, all of which supports our ability to meet our customers' needs and expectations in our growing service territories.
We appreciate your time this morning, and we will now open up the call for questions.
