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Form 8-K ATMOS ENERGY CORP For: Aug 03

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August 3, 2022 4:43 PM EDT
0000731802false00007318022022-08-032022-08-03

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

August 3, 2022
Date of Report (Date of earliest event reported)

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

TexasandVirginia1-1004275-1743247
-------------------------------------------------------------------------------
(State or Other Jurisdiction(Commission File(I.R.S. Employer
of Incorporation)Number)Identification No.)

1800 Three Lincoln Centre
5430 LBJ Freeway
DallasTexas75240
---------------------------------------------------------------------
(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)

Title of each classTrading SymbolName of each exchange on which registered
Common stockNo Par ValueATONew York Stock Exchange


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))



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, August 3, 2022, Atmos Energy Corporation (the “Company”) issued a news release in which it reported the Company’s financial results for the third quarter of fiscal 2022, which ended June 30, 2022, and that certain of its officers would discuss such financial results in a conference call on Thursday, August 4, 2022 at 10 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 NumberDescription
99.1
101.INSXBRL Instance Document - the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema
101.CALInline XBRL Taxonomy Extension Calculation Linkbase
101.DEFInline XBRL Taxonomy Extension Definition Linkbase
101.LABInline XBRL Taxonomy Extension Labels Linkbase
101.PREInline XBRL Taxonomy Extension Presentation Linkbase
104Cover Page Interactive Data File - the cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document


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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:August 3, 2022
By: /s/ CHRISTOPHER T. FORSYTHE
       Christopher T. Forsythe
       Senior Vice President and
       Chief Financial Officer







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Exhibit 99.1
g528915g02g72a28.jpg
 
 
News Release
Analysts and Media Contact:
Dan Meziere (972) 855-3729

Atmos Energy Corporation Reports Earnings for Fiscal 2022 Third Quarter;
Reaffirms Fiscal 2022 Guidance
DALLAS (August 3, 2022) - Atmos Energy Corporation (NYSE: ATO) today reported consolidated results for its third fiscal quarter ended June 30, 2022.

Highlights
•Earnings per diluted share was $5.12 for the nine months ended June 30, 2022; $0.92 per diluted share for the third fiscal quarter.
•Consolidated net income was $702.8 million for the nine months ended June 30, 2022; $128.5 million for the third fiscal quarter.
•Capital expenditures totaled $1.7 billion for the nine months ended June 30, 2022, with approximately 87 percent of capital spending related to system safety and reliability investments.
    
Outlook
•Earnings per diluted share for fiscal 2022 is expected to be in the range of $5.50 to $5.60.
•Capital expenditures are expected to be in the range of $2.4 billion to $2.5 billion in fiscal 2022.
•The company's Board of Directors has declared a quarterly dividend of $0.68 per common share. The indicated annual dividend for fiscal 2022 is $2.72, which represents an 8.8% increase over fiscal 2021.

"Third quarter results were in line with our expectations and reflect the continued dedication, focus and effort of all 4,700 employees to execute our strategy and safely provide natural gas service to over three million customers in 1,400 communities," said Kevin Akers, President and Chief Executive Officer of Atmos Energy, "Based on our year-to-date performance, we continue to believe fiscal 2022 earnings will be within our earnings guidance range of $5.50 to $5.60 per diluted share."

Results for the Three Months Ended June 30, 2022
Consolidated operating income increased $21.2 million to $154.6 million for the three months ended June 30, 2022, from $133.4 million in the prior-year quarter. Refunds of excess deferred income taxes reduced operating income by $20.8 million quarter over quarter, which was substantially offset by a corresponding decrease in income tax expense. Excluding the impact of these refunds, operating income increased $42.0 million due to rate outcomes in both segments, continued customer growth, increased consumption in our distribution segment and lower
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operations and maintenance expense, partially offset by increased depreciation and property tax expenses.
Distribution operating income decreased $2.0 million to $66.1 million for the three months ended June 30, 2022, compared with $68.1 million in the prior-year quarter. Refunds of excess deferred taxes reduced operating income by $20.8 million quarter over quarter. Key operating drivers for this segment include a net $30.5 million increase in rates, a $2.6 million increase due to net customer growth, a $3.3 million increase in consumption, net of our weather normalization adjustments (WNA) and a $1.8 million decrease in other operation and maintenance expense primarily due to lower bad debt expense in the current-year quarter, partially offset by a $13.7 million increase in depreciation and property tax expenses and a $5.0 million increase in system maintenance expense.
Pipeline and storage operating income increased $23.3 million to $88.5 million for the three months ended June 30, 2022, compared with $65.3 million in the prior-year quarter. Key operating drivers for this segment include a $21.0 million increase in rates due to the GRIP filings approved in fiscal 2021 and 2022 and a $6.1 million decrease in system maintenance expense, partially offset by a $4.5 million increase in depreciation and property tax expenses due to increased capital investments.
Results for the Nine Months Ended June 30, 2022
Consolidated operating income increased $1.6 million to $815.6 million for the nine months ended June 30, 2022, compared to $814.0 million in the prior year. Refunds of excess deferred income taxes reduced operating income by $102.8 million year over year, which was substantially offset by a corresponding decrease in income tax expense. Excluding the impact of these refunds, operating income increased $104.4 million due to rate outcomes in both segments and customer growth in our distribution segment, partially offset by lower weather and consumption in our distribution segment, lower thru-system revenue in our pipeline and storage segment and increased operations and maintenance, depreciation and property tax expenses.
Distribution operating income decreased $13.0 million to $567.9 million for the nine months ended June 30, 2022, compared with $580.9 million in the prior-year period. Refunds of excess deferred taxes reduced operating income by $89.5 million year over year. Key operating drivers for this segment include a $122.6 million increase in rates, and customer growth of $13.2 million partially offset by a $13.1 million decrease in consumption, net of WNA, a $15.2 million increase in operation and maintenance expense driven primarily by higher pipeline maintenance costs and other administrative costs, partially offset by lower bad debt expense in the current-year quarter and a $34.8 million increase in depreciation and property tax expenses associated with increased capital investments.
Pipeline and storage operating income increased $14.6 million to $247.7 million for the nine months ended June 30, 2022, compared with $233.1 million in the prior year. Refunds of excess deferred income taxes decreased operating income by $13.3 million year over year. Key operating drivers for this segment include a $49.4 million increase from our GRIP filings approved in fiscal 2021 and 2022, partially offset by a $7.3 million increase in system maintenance, an $11.1 million increase in depreciation and property tax expenses due to increased capital investments and a $2.4 million decrease in through system revenues.
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Capital expenditures increased $368.0 million to $1.7 billion for the nine months ended June 30, 2022, compared with $1.4 billion in the prior year, due to increased system modernization and expansion spending.
For the nine months ended June 30, 2022, the company generated operating cash flow of $929.3 million, compared to $930.1 million excluding the $2.1 billion incurred in the prior-year period for gas costs incurred during Winter Storm Uri. The year-over-year decrease primarily reflects the refund of excess deferred tax liabilities and working capital changes, mostly offset by the timing of gas cost recoveries and the positive effects of successful rate case outcomes achieved in fiscal 2021.
Our equity capitalization ratio at June 30, 2022 was 53.8%, compared with 51.9% at September 30, 2021, due to the issuance of $600 million of 2.85% senior notes in October 2021 and $200 million of 2.625% senior notes in January 2022, partially offset by $675.3 million in equity issuances under our forward equity agreements. Excluding the $2.2 billion of incremental financing issued to pay for the purchased gas costs incurred during Winter Storm Uri, our equity capitalization ratio was 61.7% at June 30, 2022.
Conference Call to be Webcast August 4, 2022
Atmos Energy will host a conference call with financial analysts to discuss the fiscal 2022 third quarter financial results on Thursday, August 4, 2022, at 10:00 a.m. Eastern Time. The domestic telephone number is 877-407-3088 and the international telephone number is 201-389-0927. Kevin Akers, 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 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 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 presentation, including the risks 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 risks and uncertainties include the following: federal, state and local regulatory and political trends and decisions, including the impact of rate proceedings before various state regulatory commissions; increased federal regulatory oversight and potential penalties; possible increased federal, state and local regulation of the safety of our operations; the impact of greenhouse gas emissions or other legislation or regulations intended to address climate change; possible significant costs and liabilities resulting from pipeline integrity and other similar programs and related repairs; the inherent hazards and risks involved in distributing, transporting and storing natural gas; the availability and accessibility of contracted gas supplies, interstate pipeline and/or
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storage services; increased competition from energy suppliers and alternative forms of energy; adverse weather conditions; the impact of climate change; the inability to continue to hire, train and retain operational, technical and managerial personnel; increased dependence on technology that may hinder the Company's business if such technologies fail; the threat of cyber-attacks or acts of cyber-terrorism that could disrupt our business operations and information technology systems or result in the loss or exposure of confidential or sensitive customer, employee or Company information; natural disasters, terrorist activities or other events and other risks and uncertainties discussed herein, all of which are difficult to predict and many of which are beyond our control; the capital-intensive nature of our business; our ability to continue to access the credit and capital markets to execute our business strategy; market risks beyond our control affecting our risk management activities, including commodity price volatility, counterparty performance or creditworthiness and interest rate risk; the concentration of our operations in Texas; the impact of adverse economic conditions on our customers; changes in the availability and price of natural gas; increased costs of providing health care benefits, along with pension and postretirement health care benefits and increased funding requirements; and the outbreak of COVID-19 and its impact on business and economic conditions.
Accordingly, while we believe 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. Further, the company undertakes no obligation to update or revise any of our forward-looking statements whether as a result of new information, future events or otherwise.
About Atmos Energy
Atmos Energy Corporation, an S&P 500 company headquartered in Dallas, is the country’s largest natural gas-only distributor. We safely deliver reliable, affordable, efficient and abundant natural gas to more than 3 million distribution customers in over 1,400 communities across eight states located primarily in the South. As part of our vision to be the safest provider of natural gas services, we are modernizing our business and infrastructure while continuing to invest in safety, innovation, environmental sustainability and our communities. Atmos Energy manages proprietary pipeline and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas. Find us online at http://www.atmosenergy.com, Facebook, Twitter, Instagram and YouTube.
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 IncomeThree Months Ended June 30
(000s except per share)20222021
Operating revenues
Distribution segment
$773,311 $558,750 
Pipeline and storage segment
183,412 162,987 
Intersegment eliminations
(140,294)(116,184)
816,429 605,553 
Purchased gas cost
Distribution segment
390,559 202,050 
Pipeline and storage segment
(1,347)691 
Intersegment eliminations
(140,053)(115,871)
249,159 86,870 
Operation and maintenance expense182,325 184,470 
Depreciation and amortization134,231 119,348 
Taxes, other than income96,127 81,475 
Operating income154,587 133,390 
Other non-operating income13,263 5,887 
Interest charges26,190 20,962 
Income before income taxes141,660 118,315 
Income tax expense13,113 15,904 
Net income$128,547 $102,411 
Basic net income per share$0.92 $0.78 
Diluted net income per share$0.92 $0.78 
Cash dividends per share$0.680 $0.625 
Basic weighted average shares outstanding139,881 131,358 
Diluted weighted average shares outstanding140,227 131,486 

 Three Months Ended June 30
Summary Net Income by Segment (000s)20222021
Distribution$57,401 $53,289 
Pipeline and storage71,146 49,122 
Net income$128,547 $102,411 

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Atmos Energy Corporation
Financial Highlights, continued (Unaudited)

Statements of IncomeNine Months Ended June 30
(000s except per share)20222021
Operating revenues
Distribution segment
$3,356,279 $2,718,074 
Pipeline and storage segment
510,077 476,868 
Intersegment eliminations
(387,322)(355,836)
3,479,034 2,839,106 
Purchased gas cost
Distribution segment
1,881,212 1,304,269 
Pipeline and storage segment
(3,075)(440)
Intersegment eliminations
(386,437)(354,890)
1,491,700 948,939 
Operation and maintenance expense504,787 479,488 
Depreciation and amortization395,461 353,269 
Taxes, other than income271,506 243,376 
Operating income815,580 814,034 
Other non-operating income27,178 14,793 
Interest charges74,969 69,068 
Income before income taxes767,789 759,759 
Income tax expense65,034 142,916 
Net income$702,755 $616,843 
Basic net income per share$5.13 $4.77 
Diluted net income per share$5.12 $4.77 
Cash dividends per share$2.04 $1.875 
Basic weighted average shares outstanding136,799 129,185 
Diluted weighted average shares outstanding137,055 129,229 

 Nine Months Ended June 30
Summary Net Income by Segment (000s)20222021
Distribution$505,823 $439,317 
Pipeline and storage196,932 177,526 
Net income$702,755 $616,843 
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Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
 
Condensed Balance SheetsJune 30,September 30,
(000s)20222021
Net property, plant and equipment$16,556,603 $15,063,970 
Cash and cash equivalents328,075 116,723 
Accounts receivable, net375,257 342,967 
Gas stored underground223,993 178,116 
Other current assets2,354,526 2,200,909 
Total current assets3,281,851 2,838,715 
Goodwill731,257 731,257 
Deferred charges and other assets1,085,773 974,720 
$21,655,484 $19,608,662 
Shareholders' equity$9,268,171 $7,906,889 
Long-term debt5,759,164 4,930,205 
Total capitalization15,027,335 12,837,094 
Accounts payable and accrued liabilities397,058 423,222 
Other current liabilities660,629 686,681 
Current maturities of long-term debt2,201,430 2,400,452 
Total current liabilities3,259,117 3,510,355 
Deferred income taxes1,936,658 1,705,809 
Regulatory excess deferred taxes425,960 549,227 
Deferred credits and other liabilities1,006,414 1,006,177 
$21,655,484 $19,608,662 
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Atmos Energy Corporation
Financial Highlights, continued (Unaudited)
 
Condensed Statements of Cash FlowsNine Months Ended June 30
(000s)20222021
Cash flows from operating activities
Net income$702,755 $616,843 
Depreciation and amortization395,461 353,269 
Deferred income taxes40,899 144,195 
Other(15,941)378 
Change in Winter Storm Uri long-term regulatory asset— (2,088,536)
Changes in other assets and liabilities(193,858)(184,616)
Net cash provided by (used in) operating activities929,316 (1,158,467)
Cash flows from investing activities
Capital expenditures(1,726,039)(1,357,960)
Debt and equity securities activities, net3,594 (2,363)
Other, net7,876 8,006 
Net cash used in investing activities(1,714,569)(1,352,317)
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of premium/discount798,802 2,797,346 
Net proceeds from equity issuances675,320 460,678 
Issuance of common stock through stock purchase and employee retirement plans11,670 12,121 
Repayment of long-term debt(200,000)— 
Cash dividends paid(279,256)(241,260)
Debt issuance costs(8,196)(14,288)
Other(1,735)— 
Net cash provided by financing activities996,605 3,014,597 
Net increase in cash and cash equivalents211,352 503,813 
Cash and cash equivalents at beginning of period116,723 20,808 
Cash and cash equivalents at end of period$328,075 $524,621 
 
 Three Months Ended June 30Nine Months Ended June 30
Statistics2022202120222021
Consolidated distribution throughput (MMcf as metered)
79,314 76,128 376,754 395,841 
Consolidated pipeline and storage transportation volumes (MMcf)
146,422 153,166 411,884 428,331 
Distribution meters in service3,430,476 3,387,451 3,430,476 3,387,451 
Distribution average cost of gas$8.69 $4.89 $7.33 $4.73 
###
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