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

February 5, 2019
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 Tuesday, February 5, 2019 , Atmos Energy Corporation (the “Company”) issued a news release in which it reported the Company’s financial results for the 2019 fiscal year first quarter, which ended December 31, 2018 , and that certain of its officers would discuss such financial results in a conference call on Wednesday, February 6, 2019 at 8 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:
February 5, 2019
By:   /s/ CHRISTOPHER T. FORSYTHE                        
 
 
       Christopher T. Forsythe
 
 
       Senior Vice President and
 
 
       Chief Financial Officer
 
 
 
 
 
 



































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Exhibit 99.1
G528915G02G72A16.JPG
 
 
 
News Release
Analysts and Media Contact:
Jennifer Hills (972) 855-3729

Atmos Energy Corporation Reports Earnings for Fiscal 2019 First Quarter;
Reaffirms Fiscal 2019 Guidance
DALLAS ( February 5, 2019 ) - Atmos Energy Corporation (NYSE: ATO) today reported consolidated results for its first quarter ended December 31, 2018 .

•
Consolidated net income for the three months ended December 31, 2018 was  $157.6 million  or  $1.38  per diluted share, compared with consolidated net income of  $314.1 million , or  $2.89  per diluted share for the same period last year. Adjusted net income for the three months ended December 31, 2017 was $152.2 million , or $1.40 per diluted share, after excluding the effects of implementing the Tax Cuts and Jobs Act of 2017 (TCJA) from the prior-year quarter.

•
Capital expenditures rose 8.7% to  $416.4 million  for the three months ended  December 31, 2018 , with approximately 82 percent of that spending related to system safety and reliability investments.    

•
Atmos Energy expects fiscal 2019 earnings to be in the range of $4.20 to $4.35 per diluted share. Capital expenditures are expected to be in the range of $1.65 billion to $1.75 billion in fiscal 2019.

•
The company's Board of Directors has declared a quarterly dividend of $0.525 per common share. The indicated annual dividend for fiscal 2019 is $2.10, which represents an 8.2% increase over fiscal 2018.

“Fiscal year 2019 is off to a solid start”, said Mike Haefner, President and Chief Executive Officer of Atmos Energy Corporation. “This is not only indicated by the strength of our financial position, but also by the continued implementation of our strategic plans to enhance the safety and reliability of our systems. These investments positively impact our customers, the communities we serve and the environment.  We remain well positioned to deliver annual earnings per share growth between 6% and 8% for fiscal 2019.”




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Results for the Three Months Ended December 31, 2018
Operating income decreased $5.6 million to $236.5 million for the three months ended December 31, 2018 , from $242.1 million in the prior-year quarter. Positive contribution margins driven by weather and consumption, higher customer counts in our distribution segment and volumes in our pipeline and storage segment were more than offset by higher operating expenses and increased depreciation expense.
Distribution contribution margin increased $4.1 million to $401.1 million for the three months ended December 31, 2018 , compared with $397.0 million in the prior-year quarter. Contribution margin reflects a net $7.7 million increase in weather and consumption, primarily in our Mid-Tex, Mississippi and Colorado-Kansas Divisions, and a $3.7 million increase in customers, primarily in the Mid-Tex division. These increases were partially offset by a $7.3 million net decrease in rates as a result of incorporating the lower statutory tax rate in revenues due to the TCJA.
Pipeline and storage contribution margin increased $9.2 million to $134.8 million for the three months ended December 31, 2018 , compared with $125.6 million in the prior-year quarter. This increase is attributable to a $6.1 million increase in rates, due to the GRIP filings approved in fiscal 2018, and a net increase of $3.1 million due to wider spreads and positive supply and demand dynamics in the Permian Basin.
Operation and maintenance expense for the three months ended December 31, 2018 , was $138.6 million , compared with $129.0 million for the prior-year quarter. This $9.6 million increase was primarily driven by higher employee costs and timing of pipeline maintenance activities in the current quarter.
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 2019 earnings to be in the range of $4.20 to $4.35 per diluted share. Capital expenditures for fiscal 2019 are expected to range between $1.65 billion and $1.75 billion.

Conference Call to be Webcast February 6, 2019
Atmos Energy will host a conference call with financial analysts to discuss the fiscal 2019 financial results on Wednesday, February 6, 2019 , at 8:00 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.

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

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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 Item 1A of the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2018 and in subsequent filings with the Securities and Exchange Commission.
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 Measures
The historical financial information in this news release utilizes certain financial measures that are not presented in accordance with generally accepted accounting principles (GAAP). Specifically, the company uses contribution margin, 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 contribution margin is a more useful and relevant measure to analyze its financial performance than operating revenues. The term contribution margin is not intended to represent operating income, the most comparable GAAP financial measure, as an indicator of operating performance, and is not necessarily comparable to similarly titled measures reported by other companies.
In addition, the enactment of the TCJA required the company to remeasure its deferred tax assets and liabilities at its new federal statutory income tax rate as of December 31, 2017, which resulted in the recognition of a non-cash income tax benefit during the three months ended December 31, 2017. Due to the non-recurring nature of this benefit, the company believes that net income and diluted earnings per share before the one-time, non-cash income tax benefit, provides a more useful and relevant measure to analyze its financial performance than net income and diluted earnings per share in order to allow investors to better analyze the company's core results and allow the information to be presented on a comparative basis to the prior year. Accordingly, the discussion and analysis of the company's financial performance will reference adjusted net income and diluted earnings per share, which is calculated as follows:

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Three Months Ended December 31
 
2018
 
2017
 
Change
 
(In thousands, except per share data)
Net income
$
157,646

 
$
314,132

 
$
(156,486
)
TCJA non-cash income tax benefit
—

 
(161,884
)
 
161,884

Adjusted net income
$
157,646

 
$
152,248

 
$
5,398

 
 
 
 
 
 
Diluted net income per share
$
1.38

 
$
2.89

 
$
(1.51
)
Diluted EPS from TCJA non-cash income tax benefit
—

 
(1.49
)
 
1.49

Adjusted diluted net income per share
$
1.38

 
$
1.40

 
$
(0.02
)
 
 
 
 
 
 

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 .
This news release should be read in conjunction with the attached unaudited financial information.


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Atmos Energy Corporation
Financial Highlights (Unaudited)

 
 
 
 
 
Statements of Income
 
Three Months Ended 
 December 31
(000s except per share)
 
2018
 
2017
Operating revenues
 
 
 
 
Distribution segment
 
$
838,835

 
$
860,792

Pipeline and storage segment
 
134,470

 
126,463

Intersegment eliminations
 
(95,523
)
 
(98,063
)
 
 
877,782

 
889,192

Purchased gas cost
 
 
 
 
Distribution segment
 
437,732

 
463,758

Pipeline and storage segment
 
(358
)
 
912

Intersegment eliminations
 
(95,209
)
 
(97,753
)
 
 
342,165

 
366,917

Contribution margin
 
535,617

 
522,275

Operation and maintenance expense
 
138,600

 
129,045

Depreciation and amortization
 
96,065

 
88,374

Taxes, other than income
 
64,488

 
62,773

Total operating expenses
 
299,153

 
280,192

Operating income
 
236,464

 
242,083

Miscellaneous expense
 
(7,723
)
 
(2,557
)
Interest charges
 
27,849

 
31,509

Income before income taxes
 
200,892

 
208,017

Income tax expense (benefit)
 
43,246

 
(106,115
)
Net income
 
$
157,646

 
$
314,132

 
 
 
 
 
Basic net income per share
 
$
1.38

 
$
2.89

Diluted net income per share
 
$
1.38

 
$
2.89

Cash dividends per share
 
$
0.525

 
$
0.485

Basic weighted average shares outstanding
 
113,800

 
108,564

Diluted weighted average shares outstanding
 
113,832

 
108,564

 
 
 
 
 
 
 
Three Months Ended 
 December 31
Summary Net Income by Segment (000s)
 
2018
 
2017
Distribution
 
$
114,385

 
$
249,099

Pipeline and storage
 
43,261

 
65,033

Net income
 
$
157,646

 
$
314,132


 
 
 
 
 

 
 
 
 
 








5


Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
 
Condensed Balance Sheets
 
December 31,
 
September 30,
(000s)
 
2018
 
2018
Net property, plant and equipment
 
$
10,698,229

 
$
10,371,147

Cash and cash equivalents
 
218,197

 
13,771

Accounts receivable, net
 
478,373

 
253,295

Gas stored underground
 
146,552

 
165,732

Other current assets
 
69,616

 
46,055

Total current assets
 
912,738

 
478,853

Goodwill
 
730,419

 
730,419

Deferred charges and other assets
 
274,403

 
294,018

 
 
$
12,615,789

 
$
11,874,437

 
 
 
 
 
Shareholders' equity
 
$
5,348,195

 
$
4,769,951

Long-term debt
 
3,084,779

 
2,493,665

Total capitalization
 
8,432,974

 
7,263,616

Accounts payable and accrued liabilities
 
301,734

 
217,283

Other current liabilities
 
578,764

 
547,068

Short-term debt
 
—

 
575,780

Current maturities of long-term debt
 
575,000

 
575,000

Total current liabilities
 
1,455,498

 
1,915,131

Deferred income taxes
 
1,191,824

 
1,154,067

Regulatory excess deferred taxes
 
717,758

 
739,670

Deferred credits and other liabilities
 
817,735

 
801,953

 
 
$
12,615,789

 
$
11,874,437


6


Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
 
Condensed Statements of Cash Flows
 
Three Months Ended 
 December 31
(000s)
 
2018
 
2017
Cash flows from operating activities
 
 
 
 
Net income
 
$
157,646

 
$
314,132

Depreciation and amortization
 
96,065

 
88,374

Deferred income taxes
 
40,339

 
53,149

One-time income tax benefit
 
—

 
(161,884
)
Other
 
6,231

 
6,915

Changes in assets and liabilities
 
(135,597
)
 
(127,448
)
Net cash provided by operating activities
 
164,684

 
173,238

Cash flows from investing activities
 
 
 
 
Capital expenditures
 
(416,404
)
 
(383,238
)
Debt and equity securities activities, net
 
(963
)
 
(135
)
Other, net
 
2,074

 
2,001

Net cash used in investing activities
 
(415,293
)
 
(381,372
)
Cash flows from financing activities
 
 
 
 
Net decrease in short-term debt
 
(575,780
)
 
(110,929
)
Proceeds from issuance of long-term debt, net of premium/discount
 
596,994

 
—

Net proceeds from equity offering
 
494,734

 
395,099

Issuance of common stock through stock purchase and employee retirement plans
 
4,241

 
5,660

Cash dividends paid
 
(58,722
)
 
(51,837
)
Debt issuance costs
 
(6,432
)
 
—

Other
 
—

 
(1,518
)
Net cash provided by financing activities
 
455,035

 
236,475

Net increase in cash and cash equivalents
 
204,426

 
28,341

Cash and cash equivalents at beginning of period
 
13,771

 
26,409

Cash and cash equivalents at end of period
 
$
218,197

 
$
54,750

 
 
 
Three Months Ended 
 December 31
Statistics
 
2018
 
2017
Consolidated distribution throughput (MMcf as metered)
 
142,746

 
124,357

Consolidated pipeline and storage transportation volumes (MMcf)
 
170,527

 
155,105

Distribution meters in service
 
3,272,020

 
3,236,524

Distribution average cost of gas
 
$
4.30

 
$
5.37

###

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