UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

Current Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934

May 4, 2016
Date of Report (Date of earliest event reported)

ATMOS ENERGY CORPORATION
(Exact Name of Registrant as Specified in its Charter)



TEXAS AND VIRGINIA
1-10042
75-1743247
---------------------------------
------------------------
----------------------
(State or Other Jurisdiction
(Commission File
(I.R.S. Employer
of Incorporation)
Number)
Identification No.)

1800 THREE LINCOLN CENTRE,
 
5430 LBJ FREEWAY, DALLAS, TEXAS
75240
----------------------------------------------------
-----------------
(Address of Principal Executive Offices)
(Zip Code)

(972) 934-9227
------------------------------
(Registrant's Telephone Number, Including Area Code)

Not Applicable
---------------------------
(Former Name or Former Address, if Changed Since Last Report)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

□ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
□ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
□ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
□ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



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Item 2.02.
Results of Operations and Financial Condition.

On Wednesday, May 4, 2016, Atmos Energy Corporation (the “Company”) issued a news release in which it reported the Company’s financial results for the 2016 fiscal year second quarter, which ended March 31, 2016, and that certain of its officers would discuss such financial results in a conference call on Thursday, May 5, 2016 at 10:00 a.m. Eastern Time. In the release, the Company also announced that the call would be webcast live and that slides for the webcast would be available on its website for all interested parties.

A copy of the news release is furnished as Exhibit 99.1. The information furnished in this Item 2.02 and in Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall such information be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Item 9.01.
Financial Statements and Exhibits.

(d)    Exhibits
 
 
 
 
 
 
 
Exhibit Number
Description
 
 
99.1
  
News Release dated May 4, 2016 (furnished under Item 2.02)















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SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
ATMOS ENERGY CORPORATION
 
             (Registrant)
 
 
 
 
DATE: May 4, 2016
By: /s/ LOUIS P. GREGORY                          
       Louis P. Gregory
       Senior Vice President, General Counsel
       and Corporate Secretary
 
 

























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INDEX TO EXHIBITS


Exhibit Number
Description
 
99.1
News Release dated May 4, 2016 (furnished under Item 2.02)

 











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Exhibit 99.1
 
 
 
News Release
Analysts and Media Contact:
Susan Giles (972) 855-3729

Atmos Energy Corporation Reports Earnings for Fiscal 2016
Second Quarter and Six Months; Tightens Fiscal 2016 Guidance Range

DALLAS ( May 4, 2016 ) - Atmos Energy Corporation (NYSE: ATO) today reported consolidated results for its fiscal 2016 second quarter and six months ended March 31, 2016 .

Fiscal 2016 second quarter consolidated net income, excluding net unrealized margins, was $143.9 million , or $1.40 per diluted share, compared with consolidated net income, excluding net unrealized margins of $138.5 million , or $1.36 per diluted share in the prior-year quarter.

Fiscal 2016 second quarter consolidated net income was $141.8 million , or $1.38 per diluted share, after including unrealized net losses of $2.1 million , or $0.02 per diluted share. Net income was $137.7 million , or $1.35 per diluted share in the prior-year quarter, after including unrealized net losses of $0.8 million , or $0.01 per diluted share.
   
The company's Board of Directors has declared a quarterly dividend of $0.42 per common share. The indicated annual dividend for fiscal 2016 is $1.68, which represents a 7.7 percent increase over fiscal 2015.
    
Fiscal 2016 earnings guidance was tightened to $3.25 to $3.35 per diluted share from $3.20 to $3.40 per diluted share, excluding unrealized margins.

For the six months ended March 31, 2016 , consolidated net income was $244.7 million , or $2.38 per diluted share, compared with net income of $235.3 million , or $2.31 per diluted share for the same period last year. Results from nonregulated operations include noncash, unrealized net gains of $5.2 million , or $0.05 per diluted share for the six months ended March 31, 2016 , compared with unrealized net gains of $4.0 million , or $0.04 per diluted share for the prior-year period. For the current six-month period, regulated operations contributed $238.3 million of net income, or $2.32 per diluted share, and nonregulated operations contributed net income of $6.3 million , or $0.06 per diluted share.



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“Our performance through the second quarter of fiscal 2016 reflects the impact of investments made to our infrastructure to safely meet the energy needs of our customers,” said Kim Cocklin, chief executive officer of Atmos Energy Corporation. “With the winter heating season essentially behind us, we believe we can achieve earnings in the tightened range of $3.25 to $3.35 per diluted share. Looking forward, we are positioned to continue delivering annual earnings growth in the 6 percent to 8 percent range,” Cocklin concluded.

Results for the Quarter Ended March 31, 2016
Regulated distribution gross profit increased $2.9 million to $409.1 million for the fiscal 2016 second quarter, compared with $406.2 million in the prior-year quarter. Gross profit reflects a net $17.1 million increase in rates, primarily in the Mid-Tex, Mississippi and West Texas Divisions. This increase was partially offset by a $12.6 million decrease in revenue-related taxes and a $2.2 million decline in weather-related consumption. Weather was 25 percent warmer than the prior-year quarter, before adjusting for weather normalization mechanisms, which resulted in a 21 percent decrease in sales volumes.
Regulated pipeline gross profit increased $4.0 million to $95.7 million for the quarter ended March 31, 2016 , compared with $91.7 million for the same quarter last year. This increase is primarily the result of a $7.0 million increase in revenues from the Gas Reliability Infrastructure Program (GRIP) filing approved in 2015, partially offset by decreased through-system volumes and lower storage and blending fees due to warmer weather in the current-year quarter.
Nonregulated gross profit decreased $9.8 million to $13.1 million for the fiscal 2016 second quarter, compared with $22.9 million for the prior-year quarter, as a result of a $7.8 million decrease in realized margins, combined with a $2.0 million decrease in unrealized margins. The quarter-over-quarter decrease in realized margins reflects larger losses on the settlement of financial positions during a period of falling natural gas prices.


Results for the Six Months Ended March 31, 2016
Regulated distribution gross profit increased $12.6 million to $742.6 million for the six months ended March 31, 2016 , compared with $730.0 million in the prior-year period. Gross profit reflects a net $30.6 million increase in rates, primarily in the Mid-Tex, Mississippi and West Texas Divisions. This increase was partially offset by a $13.9 million decrease in revenue-related taxes and a $3.3 million decrease in consumption. Weather was 26 percent warmer than the prior-year period, before adjusting for weather normalization mechanisms, which resulted in a 21 percent decrease in sales volumes.
Regulated pipeline gross profit increased $15.1 million to $190.4 million for the six months ended March 31, 2016 , compared with $175.3 million in the prior-year period. This increase primarily reflects a $17.1 million increase in revenue from the GRIP filing approved in 2015. This increase was partially offset by decreased through-system volumes and lower storage and blending fees due to warmer weather in the current-year period.

Nonregulated gross profit decreased $10.0 million to $28.9 million for the six months ended March 31, 2016 , compared with $38.9 million for the prior-year period, as a result of a $12.2 million decrease in realized margins, combined with a $2.1 million increase in unrealized

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margins. The year-over-year decrease in realized margins reflects the aforementioned losses on the settlement of financial positions during a period of falling natural gas prices.

Consolidated operation and maintenance expense for the six months ended March 31, 2016 , was $258.5 million , compared with $252.0 million for the prior-year period. This increase was primarily driven by increased pipeline maintenance spending.

Capital expenditures increased to $538.2 million for the six months ended March 31, 2016 , compared with $441.6 million in the prior-year period driven by a planned increase in spending in the company's regulated operations.

For the six months ended March 31, 2016 , the company generated operating cash flow of $455.8 million , an $85.1 million decrease compared with the six months ended March 31, 2015 . The year-over-year decrease primarily reflects the timing of deferred gas cost recoveries.

The debt capitalization ratio at March 31, 2016 was 48.0 percent , compared with 47.7 percent at September 30, 2015 and 46.1 percent at March 31, 2015 . At March 31, 2016 , there was $626.9 million of short-term debt outstanding, compared with $457.9 million at September 30, 2015 and $225.0 million at March 31, 2015 .

Outlook
The leadership of Atmos Energy remains focused on enhancing system safety and reliability through infrastructure investment while delivering shareholder value and consistent earnings growth. Atmos Energy expects fiscal 2016 earnings to be in the tightened range of $3.25 to $3.35 per diluted share, excluding unrealized margins. Net income from regulated operations is expected to be in the range of $320 million to $335 million. Net income from nonregulated operations is expected to be in the range of $14 million to $19 million. Capital expenditures for fiscal 2016 are expected to range between $1.0 billion and $1.1 billion.

Conference Call to be Webcast May 5, 2016
Atmos Energy will host a conference call with financial analysts to discuss the financial results for the fiscal 2016 second quarter on Thursday, May 5, 2016 , at 10:00 a.m. Eastern. The domestic telephone number is 877-485-3107 and the international telephone number is 201-689-8427. Kim Cocklin, chief executive officer, Mike Haefner, president and chief operating officer, and Bret Eckert, senior vice president and chief financial officer, along with other members of the leadership team, will participate in the conference call. The conference call will be webcast live on the Atmos Energy website at www.atmosenergy.com . A playback of the call will be available on the website later that day.


Highlights and Recent Developments

Election of Director
Effective March 1, 2016, Rafael G. Garza was elected to the board of directors of the company. Mr. Garza is co-founder and Managing Director of Bravo Equity Partners, a Fort Worth-based

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firm, which provides capital to middle-market companies in the U.S. and Mexico. He is a member of the board's Audit Committee and Nominating and Corporate Governance Committee.

This news release should be read in conjunction with the attached unaudited financial information.
Forward-Looking Statements
The matters discussed in this news release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this news release are forward-looking statements made in good faith by the company and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this news release or in any of the company's other documents or oral presentations, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “objective,” “plan,” “projection,” “seek,” “strategy” or similar words are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in this news release, including the risks and uncertainties relating to regulatory trends and decisions, the company's ability to continue to access the capital markets and the other factors discussed in the company's reports filed with the Securities and Exchange Commission. These factors include the risks and uncertainties discussed in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2015 and in the company's Quarterly Report on Form 10-Q for the three and six months ended March 31, 2016 . Although the company believes these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. The company undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

About Atmos Energy
Atmos Energy Corporation, headquartered in Dallas, is one of the country's largest natural-gas-only distributors, serving over three million natural gas distribution customers in over 1,400 communities in eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy also manages company-owned natural gas pipeline and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas and provides natural gas marketing and procurement services to industrial, commercial and municipal customers primarily in the Midwest and Southeast. For more information, visit www.atmosenergy.com .

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Atmos Energy Corporation
Financial Highlights (Unaudited)
 

 
 
 
 
 
Statements of Income
 
Three Months Ended 
 March 31,
(000s except per share)
 
2016
 
2015
Gross Profit:
 
 
 
 
Regulated distribution segment
 
$
409,142

 
$
406,235

Regulated pipeline segment
 
95,703

 
91,730

Nonregulated segment
 
13,099

 
22,906

Intersegment eliminations
 
(133
)
 
(133
)
Gross profit
 
517,811

 
520,738

Operation and maintenance expense
 
133,666

 
133,460

Depreciation and amortization
 
71,972

 
68,022

Taxes, other than income
 
62,157

 
69,046

Total operating expenses
 
267,795

 
270,528

Operating income
 
250,016

 
250,210

Miscellaneous expense
 
(685
)
 
(1,561
)
Interest charges
 
27,560

 
27,447

Income before income taxes
 
221,771

 
221,202

Income tax expense
 
79,961

 
83,518

Net income
 
$
141,810

 
$
137,684

Basic and diluted earnings per share
 
$
1.38

 
$
1.35

Cash dividends per share
 
$
0.42

 
$
0.39

Basic and diluted weighted average shares outstanding
 
102,946

 
101,746



 
 
 
 
 
 
 
Three Months Ended 
 March 31,
Summary Net Income (Loss) by Segment (000s)
 
2016
 
2015
Regulated distribution
 
$
114,312

 
$
101,853

Regulated pipeline
 
25,185

 
27,682

Nonregulated
 
4,365

 
8,955

Unrealized margins, net of tax
 
(2,052
)
 
(806
)
Consolidated net income
 
$
141,810

 
$
137,684


















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Atmos Energy Corporation
Financial Highlights, continued (Unaudited)

Statements of Income
 
Six Months Ended 
 March 31,
(000s except per share)
 
2016
 
2015
Gross Profit:
 
 
 
 
Regulated distribution segment
 
$
742,603

 
$
730,047

Regulated pipeline segment
 
190,380

 
175,297

Nonregulated segment
 
28,857

 
38,945

Intersegment eliminations
 
(266
)
 
(266
)
Gross profit
 
961,574

 
944,023

Operation and maintenance expense
 
258,514

 
252,042

Depreciation and amortization
 
143,211

 
135,615

Taxes, other than income
 
113,628

 
118,431

Total operating expenses
 
515,353

 
506,088

Operating income
 
446,221

 
437,935

Miscellaneous expense
 
(1,894
)
 
(3,268
)
Interest charges
 
58,043

 
57,211

Income before income taxes
 
386,284

 
377,456

Income tax expense
 
141,613

 
142,177

Net income
 
$
244,671

 
$
235,279

Basic and diluted earnings per share
 
$
2.38

 
$
2.31

Cash dividends per share
 
$
0.84

 
$
0.78

Basic and diluted weighted average shares outstanding
 
102,837

 
101,667


 
 
Six Months Ended 
 March 31,
Summary Net Income by Segment (000s)
 
2016
 
2015
Regulated distribution
 
$
187,567

 
$
173,240

Regulated pipeline
 
50,771

 
49,717

Nonregulated
 
1,124

 
8,371

Unrealized margins, net of tax
 
5,209

 
3,951

Consolidated net income
 
$
244,671

 
$
235,279


 




6



Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
 
Condensed Balance Sheets
 
March 31,
 
September 30,
(000s)
 
2016
 
2015
Net property, plant and equipment
 
$
7,839,413

 
$
7,430,580

Cash and cash equivalents
 
47,918

 
28,653

Accounts receivable, net
 
361,582

 
295,160

Gas stored underground
 
190,961

 
236,603

Other current assets
 
52,451

 
65,890

Total current assets
 
652,912

 
626,306

Goodwill
 
742,702

 
742,702

Deferred charges and other assets
 
308,899

 
293,357

 
 
$
9,543,926

 
$
9,092,945

 
 
 
 
 
Shareholders' equity
 
$
3,344,565

 
$
3,194,797

Long-term debt
 
2,455,559

 
2,455,388

Total capitalization
 
5,800,124

 
5,650,185

Accounts payable and accrued liabilities
 
226,641

 
238,942

Other current liabilities
 
373,783

 
457,954

Short-term debt
 
626,929

 
457,927

Total current liabilities
 
1,227,353

 
1,154,823

Deferred income taxes
 
1,557,790

 
1,411,315

Deferred credits and other liabilities
 
958,659

 
876,622

 
 
$
9,543,926

 
$
9,092,945


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Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
 
Condensed Statements of Cash Flows
 
Six Months Ended 
 March 31,
(000s)
 
2016
 
2015
Cash flows from operating activities
 
 
 
 
Net income
 
$
244,671

 
$
235,279

Depreciation and amortization
 
143,211

 
135,615

Deferred income taxes
 
132,456

 
131,292

Other
 
11,000

 
10,898

Changes in assets and liabilities
 
(75,562
)
 
27,764

Net cash provided by operating activities
 
455,776

 
540,848

Cash flows from investing activities
 
 
 
 
Capital expenditures
 
(538,233
)
 
(441,644
)
Other, net
 
1,888

 
(1,346
)
Net cash used in investing activities
 
(536,345
)
 
(442,990
)
Cash flows from financing activities
 
 
 
 
Net increase in short-term debt
 
169,002

 
21,839

Net proceeds from issuance of long-term debt
 

 
493,538

Settlement of Treasury lock agreements
 

 
13,364

Repayment of long-term debt
 

 
(500,000
)
Cash dividends paid
 
(86,809
)
 
(78,074
)
Repurchase of equity awards
 

 
(7,985
)
Issuance of common stock
 
17,641

 
12,727

Net cash provided by (used in) financing activities
 
99,834

 
(44,591
)
Net increase in cash and cash equivalents
 
19,265

 
53,267

Cash and cash equivalents at beginning of period
 
28,653

 
42,258

Cash and cash equivalents at end of period
 
$
47,918

 
$
95,525

 
 
 
Three Months Ended 
 March 31,
 
Six Months Ended 
 March 31,
Statistics
 
2016
 
2015
 
2016
 
2015
Consolidated distribution throughput (MMcf as metered)
 
152,609

 
183,014

 
253,537

 
306,448

Consolidated pipeline transportation volumes (MMcf)
 
115,040

 
126,371

 
244,199

 
247,005

Consolidated nonregulated delivered gas sales volumes (MMcf)
 
95,804

 
105,401

 
180,935

 
196,331

Regulated distribution meters in service
 
3,176,367

 
3,136,441

 
3,176,367

 
3,136,441

Regulated distribution average cost of gas
 
$
3.94

 
$
5.08

 
$
4.13

 
$
5.44

Nonregulated net physical position (Bcf)
 
36.4

 
17.0

 
36.4

 
17.0

###


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