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

November 8, 2017
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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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨


Item 2.02.
Results of Operations and Financial Condition.

On Wednesday, November 8, 2017, Atmos Energy Corporation (the “Company”) issued a news release in which it reported the Company’s financial results for the fourth quarter and full 2017 fiscal year, which ended September 30, 2017, and that certain of its officers would discuss such financial results in a conference call on Thursday, November 9, 2017 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
  
 
 
 
 
 















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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: November 8, 2017
By: /s/ CHRISTOPHER T. FORSYTHE                        
       Christopher T. Forsythe
       Senior Vice President and
       Chief Financial Officer
 
 

























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INDEX TO EXHIBITS


Exhibit Number
Description
 
99.1

 
 
 
 











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Exhibit 99.1
G528915G02G72A13.JPG
 
 
 
News Release
Analysts and Media Contact:
Jennifer Hills (972) 855-3729

Atmos Energy Corporation Reports Earnings for Fiscal 2017 and Initiates Fiscal 2018 Guidance; Raises Dividend 7.8 Percent
DALLAS ( November 8, 2017 ) - Atmos Energy Corporation (NYSE: ATO) today reported consolidated results for its 2017 fiscal year and fourth quarter ended September 30, 2017 .

Fiscal 2017 consolidated net income was $396.4 million , or $3.73 per diluted share, compared with consolidated net income of $350.1 million , or $3.38 per diluted share in the prior year.
Fiscal 2017 net income from continuing operations was $382.7 million or  $3.60  per diluted share, compared with net income from continuing operations of $345.5 million , or  $3.33  per diluted share for the same period last year.
Fiscal 2017 net income from discontinued operations was $13.7 million, or $0.13 per diluted share, compared with net income from discontinued operations of $4.6 million , or $0.05 per diluted share in the prior year.
Capital expenditures were $1.14 billion for the year ended September 30, 2017 , with approximately 80 percent of that spending related to system safety and reliability investments.    
Atmos Energy expects fiscal 2018 earnings to be in the range of $3.75 to $3.95 per diluted share. Capital expenditures are expected to be in the range of $1.3 billion to $1.4 billion in fiscal 2018.
The company's Board of Directors has declared a quarterly dividend of $0.485 per common share. The indicated annual dividend for fiscal 2018 is $1.94, which represents a 7.8 percent increase over fiscal 2017.

For the quarter ended  September 30, 2017 , net income from continuing operations was  $35.9 million , or  $0.34  per diluted share, compared with net income from continuing operations of $ 34.9 million , or  $0.33  per diluted share for the same quarter last year.

“Our business strategy continues to deliver solid results,” said Mike Haefner, president and chief executive officer of Atmos Energy Corporation. “Once again our employees have gone above and beyond to deliver value to our customers, communities, and investors. The financial strength of the company and

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quality of our team sustain our ongoing investments in system safety, reliability, growth, and expansion while providing an attractive return to shareholders. We are well-positioned to continue delivering annual earnings per share growth in the six to eight percent range,” Haefner concluded.


Results for the Fiscal Year Ended September 30, 2017
Distribution gross profit increased $98.5 million to $1,379.7 million for the year ended September 30, 2017 , compared with $1,281.2 million in the prior year. Gross profit reflects a net $72.4 million increase in rates, primarily in the Mid-Tex, Louisiana, Mississippi and Kentucky/Mid-States Divisions. Customer growth, primarily in the Mid-Tex Division, contributed an incremental $5.8 million in gross profit. Transportation gross profit, primarily in the Kentucky/Mid-States and Mid-Tex Divisions, increased $5.8 million year over year. In addition, net consumption increased $2.9 million, despite weather that was 12 percent warmer than the prior year.
Pipeline and storage gross profit increased $27.2 million to $454.5 million for the year ended September 30, 2017 , compared with $427.3 million in the prior year. This increase is primarily attributable to a $24.6 million increase in rates from the approved 2016 GRIP filings and the rate case finalized in August 2017.
Continuing operation and maintenance expense for the year ended September 30, 2017 , was $546.8 million , compared with $538.6 million in the prior year. This $8.2 million increase was primarily driven by higher employee-related costs.
Interest charges for the year ended September 30, 2017 were $120.2 million, compared with $114.8 million in the prior year. The $5.4 million increase was primarily driven by an increase in long-term debt compared to the prior year.
In January 2017, the company completed the sale of its natural gas marketing business. Net income from discontinued operations was $13.7 million for the year ended September 30, 2017 , compared with $4.6 million in the prior year. The increase largely reflects the recognition of a net $6.6 million noncash gain in the first quarter of fiscal 2017 from unwinding hedge accounting for certain of the natural gas marketing business's financial positions as a result of the sale and a $2.7 million gain recognized on the sale in the second fiscal quarter.
Capital expenditures increased $50.1 million to $1,137.1 million for the year ended September 30, 2017 , compared with $1,087.0 million in the prior year, driven by a planned increase in spending for infrastructure replacements and enhancements.
For the year ended September 30, 2017 , the company generated operating cash flow of $867.1 million , a $72.1 million increase compared with the year ended September 30, 2016 . The year-over-year increase primarily reflects the positive cash effect of successful rate case outcomes achieved in fiscal 2016.
The equity capitalization ratio at September 30, 2017 was 52.6% , compared with 51.5% at September 30, 2016 . At September 30, 2017 , there was $447.7 million of short-term debt outstanding, compared with $829.8 million at September 30, 2016 . On June 8, 2017, the company completed a public offering of $500 million of 3.00% senior unsecured notes due 2027 and $250 million of 4.125% senior unsecured notes due 2044. The net proceeds of approximately $753 million were used to repay $250 million of 6.35% senior unsecured

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notes at maturity on June 15, 2017 and for general corporate purposes, including the repayment of commercial paper.
 
Results for the Quarter Ended September 30, 2017
Distribution gross profit increased $17.7 million to $274.7 million for the three months ended September 30, 2017 , compared with $257.0 million in the prior-year quarter. Gross profit reflects a net $13.3 million increase in rates, primarily in the Mid-Tex, Louisiana, West Texas, Mississippi and Kentucky/Mid-States Divisions. Transportation gross profit, primarily in the Kentucky/Mid-States and Mid-Tex Divisions, increased $1.7 million.
Pipeline and storage gross profit increased $4.8 million to $117.6 million for the three months ended September 30, 2017 , compared with $112.8 million in the prior-year quarter. This increase is primarily the result of higher through system revenue, largely related to incremental throughput on the Enlink Pipeline, which was acquired in the first quarter of fiscal 2017, and higher basis spreads due to increased production in the Permian Basin.


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 2018 earnings to be in the range of $3.75 to $3.95 per diluted share. Capital expenditures for fiscal 2018 are expected to range between $1.3 billion and $1.4 billion.

Conference Call to be Webcast November 9, 2017
Atmos Energy will host a conference call with financial analysts to discuss the fiscal 2017 financial results on Thursday, November 9, 2017 , at 10:00 a.m. Eastern Time. The domestic telephone number is 877-485-3107 and the international telephone number is 201-689-8427. Mike Haefner, President and Chief Executive Officer and Chris Forsythe, Senior Vice President and Chief Financial Officer 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
On October 11, 2017, Atmos Energy announced that Susan Giles would retire and Jennifer Hills would succeed her as Vice President, Investor Relations, effective November 1, 2017.
On August 7, 2017, Atmos Energy announced that Karen E. Hartsfield, Senior Attorney had been appointed by the Board of Directors as Senior Vice President, General Counsel and Corporate Secretary, and would serve on the company’s Management Committee.
This news release should be read in conjunction with the attached unaudited financial information.

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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 credit and 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, 2016 , and in the company's Quarterly Report on Form 10-Q for the three and nine months ended June 30, 2017. 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.

Non-GAAP Financial Measure
The historical financial information in this news release utilizes a certain financial measure that is not presented in accordance with generally accepted accounting principles (GAAP). Specifically, the company uses gross profit, defined as operating revenues less purchased gas cost, to discuss and analyze its financial performance. Its operations are affected by the cost of natural gas, which is passed through to its customers without markup and includes commodity price, transportation, storage, injection and withdrawal fees, along with hedging settlements. These costs are reflected in the income statement as purchased gas cost. Therefore, increases in the cost of gas are offset by a corresponding increase in revenues. Accordingly, the company believes gross profit, a non-GAAP financial measure defined as operating revenues less purchased gas cost, is a better indicator of its financial performance than operating revenues as it provides a useful and more relevant measure to analyze its financial performance.

About Atmos Energy
Atmos Energy Corporation, headquartered in Dallas, is the country's largest fully-regulated, natural-gas-only distributor, 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. For more information, visit www.atmosenergy.com .



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Atmos Energy Corporation
Financial Highlights (Unaudited)


 
 
 
 
 
Statements of Income
 
Year Ended 
 September 30
(000s except per share)
 
2017
 
2016
Gross Profit:
 
 
 
 
Distribution
 
$
1,379,719

 
$
1,281,202

Pipeline and storage
 
454,524

 
427,254

Intersegment eliminations
 
(44
)
 

Gross profit
 
1,834,199

 
1,708,456

Operation and maintenance expense
 
546,798

 
538,592

Depreciation and amortization
 
319,448

 
290,791

Taxes, other than income
 
240,407

 
221,843

Total operating expenses
 
1,106,653

 
1,051,226

Operating income
 
727,546

 
657,230

Miscellaneous expense
 
(3,270
)
 
(234
)
Interest charges
 
120,182

 
114,812

Income from continuing operations before income taxes
 
604,094

 
542,184

Income tax expense
 
221,383

 
196,642

Income from continuing operations
 
382,711

 
345,542

Income from discontinued operations, net of tax
 
10,994

 
4,562

Gain on sale of discontinued operations, net of tax
 
2,716

 

Net Income
 
$
396,421

 
$
350,104

Basic and diluted earnings per share
 
 
 
 
Income per share from continuing operations
 
$
3.60

 
$
3.33

Income per share from discontinued operations
 
0.13

 
0.05

Net income per share - basic and diluted
 
$
3.73

 
$
3.38

Cash dividends per share
 
$
1.80

 
$
1.68

Basic and diluted weighted average shares outstanding
 
106,100

 
103,524


 
 
 
 
 
 
 
Year Ended 
 September 30
Summary Net Income by Segment (000s)
 
2017
 
2016
Distribution
 
$
268,369

 
$
233,830

Pipeline and storage
 
114,342

 
111,712

Net income from continuing operations
 
382,711

 
345,542

Net income from discontinued operations
 
13,710

 
4,562

Net income
 
$
396,421

 
$
350,104









5



Atmos Energy Corporation
Financial Highlights, continued (Unaudited)

 
 
 
 
 
 
Statements of Income
 
Three Months Ended 
 September 30
(000s except per share)
 
2017
 
2016
Gross Profit:
 
 
 
 
Distribution segment
 
$
274,671

 
$
256,958

Pipeline and storage segment
 
117,648

 
112,758

Intersegment eliminations
 

 

Gross profit
 
392,319

 
369,716

Operation and maintenance expense
 
160,931

 
159,519

Depreciation and amortization
 
84,800

 
75,864

Taxes, other than income
 
54,796

 
49,884

Total operating expenses
 
300,527

 
285,267

Operating income
 
91,792

 
84,449

Miscellaneous expense
 
(2,820
)
 
(144
)
Interest charges
 
33,710

 
30,037

Income from continuing operations before income taxes
 
55,262

 
54,268

Income tax expense
 
19,409

 
19,418

Income from continuing operations
 
35,853

 
34,850

Loss from discontinued operations, net of tax
 

 
(610
)
Net Income
 
$
35,853

 
$
34,240

Basic and diluted net income per share
 
 
 
 
Income per share from continuing operations
 
$
0.34

 
$
0.33

Income per share from discontinued operations
 

 

Net income per share - basic and diluted
 
$
0.34

 
$
0.33

Cash dividends per share
 
$
0.45

 
$
0.42

Basic and diluted weighted average shares outstanding
 
106,814

 
104,687


 
 
 
 
 
 
 
Three Months Ended 
 September 30
Summary Net Income (Loss) by Segment (000s)
 
2017
 
2016
Distribution
 
$
15,346

 
$
14,453

Pipeline and storage
 
20,507

 
20,397

Net income from continuing operations
 
35,853

 
34,850

Net loss from discontinued operations
 

 
(610
)
Net Income
 
$
35,853

 
$
34,240



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Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
 
Condensed Balance Sheets
 
September 30,
 
September 30,
(000s)
 
2017
 
2016
Net property, plant and equipment
 
$
9,259,182

 
$
8,268,606

Cash and cash equivalents
 
26,409

 
47,534

Accounts receivable, net
 
222,263

 
215,880

Gas stored underground
 
184,653

 
179,070

Current assets of disposal group classified as held for sale
 

 
151,117

Other current assets
 
106,321

 
88,085

Total current assets
 
539,646

 
681,686

Goodwill
 
730,132

 
726,962

Noncurrent assets of disposal group classified as held for sale
 

 
28,616

Deferred charges and other assets
 
220,636

 
305,019

 
 
$
10,749,596

 
$
10,010,889

 
 
 
 
 
Shareholders' equity
 
$
3,898,666

 
$
3,463,059

Long-term debt
 
3,067,045

 
2,188,779

Total capitalization
 
6,965,711

 
5,651,838

Accounts payable and accrued liabilities
 
233,050

 
196,485

Current liabilities of disposal group classified as held for sale
 

 
72,900

Other current liabilities
 
332,648

 
439,085

Short-term debt
 
447,745

 
829,811

Current maturities of long-term debt
 

 
250,000

Total current liabilities
 
1,013,443

 
1,788,281

Deferred income taxes
 
1,878,699

 
1,603,056

Noncurrent liabilities of disposal group classified as held for sale
 

 
316

Deferred credits and other liabilities
 
891,743

 
967,398

 
 
$
10,749,596

 
$
10,010,889


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Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
 
Condensed Statements of Cash Flows
 
Year Ended 
 September 30
(000s)
 
2017
 
2016
Cash flows from operating activities
 
 
 
 
Net income
 
$
396,421

 
$
350,104

Depreciation and amortization
 
319,633

 
293,096

Deferred income taxes
 
227,183

 
193,556

Gain on sale of discontinued operations
 
(12,931
)
 

Discontinued cash flow hedging for natural gas marketing commodity contracts
 
(10,579
)
 

Other
 
20,630

 
21,446

Changes in assets and liabilities
 
(73,267
)
 
(63,212
)
Net cash provided by operating activities
 
867,090

 
794,990

Cash flows from investing activities
 
 
 
 
Capital expenditures
 
(1,137,089
)
 
(1,086,950
)
Acquisition
 
(86,128
)
 

Proceeds from the sale of discontinued operations
 
140,253

 

Available-for-sale securities activities, net
 
(12,473
)
 
758

Use tax refund
 
29,790

 

Other, net
 
9,341

 
6,460

Net cash used in investing activities
 
(1,056,306
)
 
(1,079,732
)
Cash flows from financing activities
 
 
 
 
Net increase (decrease) in short-term debt
 
(382,066
)
 
371,884

Proceeds from issuance of long-term debt, net of premium/discount
 
884,911

 

Net proceeds from equity offering
 
98,755

 
98,574

Issuance of common stock through stock purchase and employee retirement plans
 
26,523

 
34,278

Settlement of interest rate agreements
 
(36,996
)
 

Interest rate agreements cash collateral
 
25,670

 
(25,670
)
Repayment of long-term debt
 
(250,000
)
 

Cash dividends paid
 
(191,931
)
 
(175,126
)
Debt issuance costs
 
(6,775
)
 
(317
)
Net cash provided by financing activities
 
168,091

 
303,623

Net increase (decrease) in cash and cash equivalents
 
(21,125
)
 
18,881

Cash and cash equivalents at beginning of period
 
47,534

 
28,653

Cash and cash equivalents at end of period
 
$
26,409

 
$
47,534

 
 
 
Three Months Ended 
 September 30
 
Year Ended 
 September 30
Statistics
 
2017
 
2016
 
2017
 
2016
Consolidated distribution throughput (MMcf as metered)
 
63,810

 
61,060

 
388,365

 
392,028

Consolidated pipeline and storage transportation volumes (MMcf)
 
171,029

 
132,223

 
596,179

 
505,303

Distribution meters in service
 
3,221,405

 
3,185,865

 
3,221,405

 
3,185,865

Distribution average cost of gas
 
$
5.16

 
$
4.72

 
$
5.14

 
$
4.09

###


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