10-KPeriod: FY2017

ATMOS ENERGY CORP Annual Report, Year Ended Sep 30, 2017

Filed November 13, 2017For Securities:ATO

Summary

Atmos Energy Corporation (ATO) reported strong performance in its 2017 10-K filing, highlighting a significant increase in net income to $396.4 million, or $3.73 per diluted share, compared to the previous year. This growth was driven by successful rate outcomes across its regulated distribution and pipeline segments, which more than offset warmer weather conditions. The company's strategic focus on reducing regulatory lag and investing in infrastructure safety and reliability continues to yield positive results. Furthermore, Atmos Energy completed the divestiture of its non-regulated natural gas marketing business in January 2017, fully exiting this segment and redeploying proceeds to support infrastructure investments. The company maintained its commitment to shareholder value with a 7.8% increase in its quarterly dividend for fiscal year 2018, reflecting a stable financial position and positive outlook.

Financial Highlights

44 data points
Beta

Revenue

$2.76B

Net Income

$396.42M

14.4% Net Margin

EPS (Diluted)

$3.73

Total Assets

$10.75B

Cash & Equivalents

$26.41M

Free Cash Flow

$867.09M

Financial Statements
Beta
Revenue$2.76B
Operating Income$735.63M
Interest Expense$120.18M
Net Income$396.42M
EPS (Basic)$3.73
EPS (Diluted)$3.73
Shares Outstanding (Basic)106.10M
Shares Outstanding (Diluted)106.10M

Key Highlights

  • 1Net income increased to $396.4 million, or $3.73 per diluted share, in fiscal year 2017, up from $350.1 million in fiscal year 2016.
  • 2The company successfully divested its non-regulated natural gas marketing business (AEM) effective January 1, 2017, allowing it to focus solely on its regulated operations.
  • 3Capital expenditures totaled $1.14 billion in fiscal year 2017, with over 80% dedicated to improving the safety and reliability of its distribution and transmission systems.
  • 4The company's dividend increased by 7.8% for fiscal year 2018, demonstrating confidence in its financial performance and commitment to returning value to shareholders.
  • 5Atmos Energy utilizes various ratemaking mechanisms, including formula rate mechanisms and infrastructure programs, to reduce regulatory lag and ensure timely recovery of capital investments.
  • 6The company maintained investment-grade credit ratings from S&P and Moody's, with a stable outlook as of September 30, 2017.
  • 7Gross profit increased across both the Distribution and Pipeline and Storage segments, reflecting positive rate adjustments and operational efficiencies.

Frequently Asked Questions

In fiscal year 2017, Atmos Energy reported a net income of $396.4 million, or $3.73 per diluted share, representing a significant increase from the previous year. This growth was primarily driven by favorable rate outcomes in its regulated segments, which successfully offset the impact of warmer weather.

Yes, Atmos Energy completed the sale of its non-regulated natural gas marketing business (Atmos Energy Marketing, LLC) in January 2017. This strategic move allowed the company to fully exit this segment and focus on its core regulated distribution and pipeline operations.

Atmos Energy employs several strategies to manage regulatory lag and recover capital investments. These include formula rate mechanisms in four states for annual rate adjustments, infrastructure programs in most states for annual recovery of qualifying capital expenditures, and the ability to defer certain costs for future recovery. These mechanisms aim to recover over 95% of capital expenditures within six months.

The company's capital expenditure program, totaling $1.14 billion in fiscal year 2017, is heavily focused on enhancing the safety and reliability of its distribution and transmission systems. To support its growth and operations, Atmos Energy utilizes a combination of internally generated cash flows and external debt/equity financing. Reflecting its financial strength and commitment to shareholders, the company increased its quarterly dividend by 7.8% for fiscal year 2018.