Atmos Energy Corporation (ATO)

Interest coverage

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,389,935	1,374,013	1,339,169	1,211,536	1,136,922	1,079,805	1,062,232	1,012,533	954,719	916,784	888,211	882,504	902,853	927,710	934,703	878,514	831,270	831,352	808,929	782,389
Interest expense (ttm)	US$ in thousands	190,632	180,294	170,468	152,396	137,281	133,306	128,162	119,720	102,811	89,455	84,227	81,395	83,554	84,562	83,180	79,255	84,474	97,743	97,755	102,533
Interest coverage		7.29	7.62	7.86	7.95	8.28	8.10	8.29	8.46	9.29	10.25	10.55	10.84	10.81	10.97	11.24	11.08	9.84	8.51	8.28	7.63

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,389,935K ÷ $190,632K
= 7.29

Atmos Energy Corporation's interest coverage ratio has been consistently strong and relatively stable over the past several quarters, indicating the company's ability to comfortably meet its interest obligations. The interest coverage ratio has remained above 7.0, with values ranging from 7.29 to 11.24 during the period analyzed.

The company's interest coverage has improved from 7.29 in September 2020 to a peak of 11.24 in March 2021 before fluctuating around the 8-10 range in recent quarters. This demonstrates a solid ability to generate earnings relative to its interest expenses.

An interest coverage ratio above 1 indicates that the company is generating enough operating income to cover its interest payments, with higher ratios signaling stronger financial health. Notably, Atmos Energy Corporation's consistently high interest coverage ratios suggest a healthy financial position and a reduced risk of default due to inadequate earnings to cover debt obligations.