8-KMaterial AgreementsExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (May 8, 2024)

Filed May 8, 2024For Securities:ATO

Summary

Atmos Energy Corporation (ATO) announced the execution of a new Equity Distribution Agreement on May 8, 2024, establishing an at-the-market (ATM) equity offering program with an aggregate offering price of up to $1 billion. This program follows the completion of its prior ATM offering. The agreement allows Atmos Energy to sell shares of its common stock through designated managers acting as sales agents, primarily on the New York Stock Exchange at market prices. This new capital raise is intended to fund capital expenditures, with a focus on enhancing the safety and reliability of its utility system, as well as for general corporate purposes. The company also has the option to enter into forward sale agreements, which could alter the timing and nature of proceeds received. Investors should note the commission structure and the possibility of not receiving proceeds if forward sale agreements are cash or net share settled.

Key Highlights

  • 1Atmos Energy has launched a new $1 billion at-the-market (ATM) equity offering program through an Equity Distribution Agreement.
  • 2The new program replaces a prior ATM offering that has been completed.
  • 3Proceeds are designated for capital spending aimed at improving system safety and reliability, and for general corporate purposes.
  • 4The agreement allows for sales through intermediaries acting as sales agents on the NYSE at prevailing market prices.
  • 5Atmos Energy has the flexibility to suspend or terminate sales under the agreement at any time.
  • 6The company can also utilize forward sale agreements, which may affect the timing and receipt of net proceeds.
  • 7A commission of 1.00% will be paid to managers for shares sold through them as sales agents.

Frequently Asked Questions

The primary purpose of the Equity Distribution Agreement is to establish a new at-the-market equity offering program that allows Atmos Energy to sell up to $1 billion of its common stock. The proceeds are intended to fund capital expenditures, primarily for enhancing the safety and reliability of its utility system, and for general corporate purposes.

Shares will be sold through designated managers acting as sales agents, typically via ordinary brokers' transactions on the New York Stock Exchange at market prices. Sales can also occur in block transactions or as otherwise agreed upon. The company can also elect to sell shares as principal to a manager at an agreed-upon price.

Forward sale agreements allow Atmos Energy to agree today on a sale of shares at a future date. In connection with these agreements, a forward purchaser will typically borrow shares and sell them immediately to hedge. Atmos Energy will receive proceeds upon physical settlement of these agreements. However, if Atmos Energy elects to cash settle or net share settle, it may not receive any proceeds, or could even owe cash or shares to the forward purchaser.

Managers acting as sales agents will be entitled to a commission of 1.00% of the gross offering proceeds for shares sold through them. Additionally, in connection with forward sale agreements, the relevant forward seller receives a commission of 1.00% of the volume weighted average sales price of borrowed shares.