☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Texas
|
and
|
Virginia
|
|
75-1743247
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(IRS employer
identification no.)
|
|||
|
|
|
|
||
1800 Three Lincoln Centre
|
|
|
|||
5430 LBJ Freeway
|
|
|
|||
Dallas
|
Texas
|
|
75240
|
||
(Address of principal executive offices)
|
|
(Zip code)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
|
Common stock
|
No Par Value
|
ATO
|
New York Stock Exchange
|
Large accelerated filer
|
þ
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
Class
|
|
Shares Outstanding
|
|
Common stock
|
No Par Value
|
|
122,266,316
|
|
|
AEC
|
Atmos Energy Corporation
|
AOCI
|
Accumulated other comprehensive income
|
ARM
|
Annual Rate Mechanism
|
ASC
|
Accounting Standards Codification
|
Bcf
|
Billion cubic feet
|
DARR
|
Dallas Annual Rate Review
|
ERISA
|
Employee Retirement Income Security Act of 1974
|
FASB
|
Financial Accounting Standards Board
|
FERC
|
Federal Energy Regulatory Commission
|
GAAP
|
Generally Accepted Accounting Principles
|
GRIP
|
Gas Reliability Infrastructure Program
|
GSRS
|
Gas System Reliability Surcharge
|
Mcf
|
Thousand cubic feet
|
MMcf
|
Million cubic feet
|
Moody’s
|
Moody’s Investors Services, Inc.
|
NTSB
|
National Transportation Safety Board
|
PPA
|
Pension Protection Act of 2006
|
PRP
|
Pipeline Replacement Program
|
RRC
|
Railroad Commission of Texas
|
RRM
|
Rate Review Mechanism
|
RSC
|
Rate Stabilization Clause
|
S&P
|
Standard & Poor’s Corporation
|
SAVE
|
Steps to Advance Virginia Energy
|
SEC
|
United States Securities and Exchange Commission
|
SIR
|
System Integrity Rider
|
SRF
|
Stable Rate Filing
|
SSIR
|
System Safety and Integrity Rider
|
TCJA
|
Tax Cuts and Jobs Act of 2017
|
WNA
|
Weather Normalization Adjustment
|
Item 1.
|
Financial Statements
|
|
Three Months Ended December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(Unaudited)
(In thousands, except per
share data)
|
||||||
Operating revenues
|
|
|
|
||||
Distribution segment
|
$
|
828,504
|
|
|
$
|
838,835
|
|
Pipeline and storage segment
|
148,176
|
|
|
134,470
|
|
||
Intersegment eliminations
|
(101,117
|
)
|
|
(95,523
|
)
|
||
Total operating revenues
|
875,563
|
|
|
877,782
|
|
||
|
|
|
|
||||
Purchased gas cost
|
|
|
|
||||
Distribution segment
|
397,558
|
|
|
437,732
|
|
||
Pipeline and storage segment
|
99
|
|
|
(358
|
)
|
||
Intersegment eliminations
|
(100,789
|
)
|
|
(95,209
|
)
|
||
Total purchased gas cost
|
296,868
|
|
|
342,165
|
|
||
|
|
|
|
||||
Operation and maintenance expense
|
152,245
|
|
|
138,600
|
|
||
Depreciation and amortization expense
|
105,062
|
|
|
96,065
|
|
||
Taxes, other than income
|
68,607
|
|
|
64,488
|
|
||
Operating income
|
252,781
|
|
|
236,464
|
|
||
Other non-operating income (expense)
|
4,887
|
|
|
(7,723
|
)
|
||
Interest charges
|
27,229
|
|
|
27,849
|
|
||
Income before income taxes
|
230,439
|
|
|
200,892
|
|
||
Income tax expense
|
51,766
|
|
|
43,246
|
|
||
Net income
|
$
|
178,673
|
|
|
$
|
157,646
|
|
Basic net income per share
|
$
|
1.47
|
|
|
$
|
1.38
|
|
Diluted net income per share
|
$
|
1.47
|
|
|
$
|
1.38
|
|
Cash dividends per share
|
$
|
0.575
|
|
|
$
|
0.525
|
|
Basic weighted average shares outstanding
|
121,113
|
|
|
113,800
|
|
||
Diluted weighted average shares outstanding
|
121,359
|
|
|
113,832
|
|
||
|
|
|
|
||||
Net income
|
$
|
178,673
|
|
|
$
|
157,646
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
||||
Net unrealized holding losses on available-for-sale securities, net of tax of $0 and $0
|
(1
|
)
|
|
—
|
|
||
Cash flow hedges:
|
|
|
|
||||
Amortization and unrealized loss on interest rate agreements, net of tax of $311 and $(6,580)
|
1,053
|
|
|
(22,258
|
)
|
||
Total other comprehensive income (loss)
|
1,052
|
|
|
(22,258
|
)
|
||
Total comprehensive income
|
$
|
179,725
|
|
|
$
|
135,388
|
|
|
|
|
|
|
Three Months Ended December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(Unaudited)
(In thousands)
|
||||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net income
|
$
|
178,673
|
|
|
$
|
157,646
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
105,062
|
|
|
96,065
|
|
||
Deferred income taxes
|
46,726
|
|
|
40,339
|
|
||
Other
|
(616
|
)
|
|
6,231
|
|
||
Net assets / liabilities from risk management activities
|
4,143
|
|
|
(2,458
|
)
|
||
Net change in operating assets and liabilities
|
(161,543
|
)
|
|
(133,139
|
)
|
||
Net cash provided by operating activities
|
172,445
|
|
|
164,684
|
|
||
Cash Flows From Investing Activities
|
|
|
|
||||
Capital expenditures
|
(529,186
|
)
|
|
(416,404
|
)
|
||
Debt and equity securities activities, net
|
(1,602
|
)
|
|
(963
|
)
|
||
Other, net
|
2,553
|
|
|
2,074
|
|
||
Net cash used in investing activities
|
(528,235
|
)
|
|
(415,293
|
)
|
||
Cash Flows From Financing Activities
|
|
|
|
||||
Net decrease in short-term debt
|
(464,915
|
)
|
|
(575,780
|
)
|
||
Net proceeds from equity offering
|
259,005
|
|
|
494,734
|
|
||
Issuance of common stock through stock purchase and employee retirement plans
|
4,267
|
|
|
4,241
|
|
||
Proceeds from issuance of long-term debt
|
799,450
|
|
|
596,994
|
|
||
Cash dividends paid
|
(69,557
|
)
|
|
(58,722
|
)
|
||
Debt issuance costs
|
(7,738
|
)
|
|
(6,432
|
)
|
||
Net cash provided by financing activities
|
520,512
|
|
|
455,035
|
|
||
Net increase in cash and cash equivalents
|
164,722
|
|
|
204,426
|
|
||
Cash and cash equivalents at beginning of period
|
24,550
|
|
|
13,771
|
|
||
Cash and cash equivalents at end of period
|
$
|
189,272
|
|
|
$
|
218,197
|
|
|
December 31,
2019 |
|
September 30,
2019 |
||||
|
(In thousands)
|
||||||
Regulatory assets:
|
|
|
|
||||
Pension and postretirement benefit costs
|
$
|
83,783
|
|
|
$
|
86,089
|
|
Infrastructure mechanisms(1)
|
108,997
|
|
|
131,894
|
|
||
Deferred gas costs
|
10,386
|
|
|
23,766
|
|
||
Recoverable loss on reacquired debt
|
6,102
|
|
|
6,551
|
|
||
Deferred pipeline record collection costs
|
27,414
|
|
|
26,418
|
|
||
Rate case costs
|
1,052
|
|
|
1,346
|
|
||
Other
|
4,324
|
|
|
8,483
|
|
||
|
$
|
242,058
|
|
|
$
|
284,547
|
|
Regulatory liabilities:
|
|
|
|
||||
Regulatory excess deferred taxes(2)
|
$
|
721,049
|
|
|
$
|
726,307
|
|
Regulatory cost of service reserve(3)
|
4,747
|
|
|
5,238
|
|
||
Regulatory cost of removal obligation
|
519,538
|
|
|
528,893
|
|
||
Deferred gas costs
|
42,142
|
|
|
14,112
|
|
||
Asset retirement obligation
|
17,054
|
|
|
17,054
|
|
||
APT annual adjustment mechanism
|
72,732
|
|
|
78,402
|
|
||
Other
|
17,755
|
|
|
16,120
|
|
||
|
$
|
1,395,017
|
|
|
$
|
1,386,126
|
|
(1)
|
Infrastructure mechanisms in Texas and Louisiana allow for the deferral of all eligible expenses associated with capital expenditures incurred pursuant to these rules, including the recording of interest on deferred expenses until the next rate proceeding (rate case or annual rate filing), at which time investment and costs would be recoverable through base rates.
|
(2)
|
The Tax Cuts and Jobs Act of 2017 (the "TCJA") resulted in the remeasurement of the net deferred tax liability included in our rate base. Of this amount, $21.7 million as of December 31, 2019 and $21.2 million as of September 30, 2019 is recorded in other current liabilities. These liabilities are being returned to customers in most of our jurisdictions on a provisional basis over 15 to 46 years until formal orders establish the final refund periods.
|
(3)
|
Effective January 1, 2018, regulators in each of our service areas required us to establish a regulatory liability for the difference in recoverable federal taxes included in revenues based on the former 35% federal statutory rate and the new 21% federal statutory rate for service provided on or after January 1, 2018. The period and timing of the return of this liability to utility customers is being determined by regulators in each of our jurisdictions.
|
•
|
The distribution segment is primarily comprised of our regulated natural gas distribution and related sales operations in eight states.
|
•
|
The pipeline and storage segment is comprised primarily of the pipeline and storage operations of our Atmos Pipeline-Texas division and our natural gas transmission operations in Louisiana.
|
|
Three Months Ended December 31, 2019
|
||||||||||||||
|
Distribution
|
|
Pipeline and Storage
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Operating revenues from external parties
|
$
|
827,840
|
|
|
$
|
47,723
|
|
|
$
|
—
|
|
|
$
|
875,563
|
|
Intersegment revenues
|
664
|
|
|
100,453
|
|
|
(101,117
|
)
|
|
—
|
|
||||
Total operating revenues
|
828,504
|
|
|
148,176
|
|
|
(101,117
|
)
|
|
875,563
|
|
||||
Purchased gas cost
|
397,558
|
|
|
99
|
|
|
(100,789
|
)
|
|
296,868
|
|
||||
Operation and maintenance expense
|
114,352
|
|
|
38,221
|
|
|
(328
|
)
|
|
152,245
|
|
||||
Depreciation and amortization expense
|
76,074
|
|
|
28,988
|
|
|
—
|
|
|
105,062
|
|
||||
Taxes, other than income
|
60,243
|
|
|
8,364
|
|
|
—
|
|
|
68,607
|
|
||||
Operating income
|
180,277
|
|
|
72,504
|
|
|
—
|
|
|
252,781
|
|
||||
Other non-operating income
|
1,954
|
|
|
2,933
|
|
|
—
|
|
|
4,887
|
|
||||
Interest charges
|
16,362
|
|
|
10,867
|
|
|
—
|
|
|
27,229
|
|
||||
Income before income taxes
|
165,869
|
|
|
64,570
|
|
|
—
|
|
|
230,439
|
|
||||
Income tax expense
|
36,112
|
|
|
15,654
|
|
|
—
|
|
|
51,766
|
|
||||
Net income
|
$
|
129,757
|
|
|
$
|
48,916
|
|
|
$
|
—
|
|
|
$
|
178,673
|
|
Capital expenditures
|
$
|
404,247
|
|
|
$
|
124,939
|
|
|
$
|
—
|
|
|
$
|
529,186
|
|
|
Three Months Ended December 31, 2018
|
||||||||||||||
|
Distribution
|
|
Pipeline and Storage
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Operating revenues from external parties
|
$
|
838,181
|
|
|
$
|
39,601
|
|
|
$
|
—
|
|
|
$
|
877,782
|
|
Intersegment revenues
|
654
|
|
|
94,869
|
|
|
(95,523
|
)
|
|
—
|
|
||||
Total operating revenues
|
838,835
|
|
|
134,470
|
|
|
(95,523
|
)
|
|
877,782
|
|
||||
Purchased gas cost
|
437,732
|
|
|
(358
|
)
|
|
(95,209
|
)
|
|
342,165
|
|
||||
Operation and maintenance expense
|
105,767
|
|
|
33,147
|
|
|
(314
|
)
|
|
138,600
|
|
||||
Depreciation and amortization expense
|
69,709
|
|
|
26,356
|
|
|
—
|
|
|
96,065
|
|
||||
Taxes, other than income
|
56,190
|
|
|
8,298
|
|
|
—
|
|
|
64,488
|
|
||||
Operating income
|
169,437
|
|
|
67,027
|
|
|
—
|
|
|
236,464
|
|
||||
Other non-operating expense
|
(6,477
|
)
|
|
(1,246
|
)
|
|
—
|
|
|
(7,723
|
)
|
||||
Interest charges
|
18,210
|
|
|
9,639
|
|
|
—
|
|
|
27,849
|
|
||||
Income before income taxes
|
144,750
|
|
|
56,142
|
|
|
—
|
|
|
200,892
|
|
||||
Income tax expense
|
30,365
|
|
|
12,881
|
|
|
—
|
|
|
43,246
|
|
||||
Net income
|
$
|
114,385
|
|
|
$
|
43,261
|
|
|
$
|
—
|
|
|
$
|
157,646
|
|
Capital expenditures
|
$
|
302,545
|
|
|
$
|
113,859
|
|
|
$
|
—
|
|
|
$
|
416,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
||||||||||||||
|
Distribution
|
|
Pipeline and Storage
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Property, plant and equipment, net
|
$
|
9,083,765
|
|
|
$
|
3,166,658
|
|
|
$
|
—
|
|
|
$
|
12,250,423
|
|
Total assets
|
$
|
13,599,293
|
|
|
$
|
3,389,655
|
|
|
$
|
(2,600,823
|
)
|
|
$
|
14,388,125
|
|
|
September 30, 2019
|
||||||||||||||
|
Distribution
|
|
Pipeline and Storage
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Property, plant and equipment, net
|
$
|
8,737,590
|
|
|
$
|
3,050,079
|
|
|
$
|
—
|
|
|
$
|
11,787,669
|
|
Total assets
|
$
|
12,579,741
|
|
|
$
|
3,279,323
|
|
|
$
|
(2,491,445
|
)
|
|
$
|
13,367,619
|
|
|
Three Months Ended December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands, except per share amounts)
|
||||||
Basic Earnings Per Share
|
|
|
|
||||
Net income
|
$
|
178,673
|
|
|
$
|
157,646
|
|
Less: Income allocated to participating securities
|
136
|
|
|
135
|
|
||
Income available to common shareholders
|
$
|
178,537
|
|
|
$
|
157,511
|
|
Basic weighted average shares outstanding
|
121,113
|
|
|
113,800
|
|
||
Net income per share — Basic
|
$
|
1.47
|
|
|
$
|
1.38
|
|
Diluted Earnings Per Share
|
|
|
|
||||
Income available to common shareholders
|
$
|
178,537
|
|
|
$
|
157,511
|
|
Effect of dilutive shares
|
—
|
|
|
—
|
|
||
Income available to common shareholders
|
$
|
178,537
|
|
|
$
|
157,511
|
|
Basic weighted average shares outstanding
|
121,113
|
|
|
113,800
|
|
||
Dilutive shares
|
246
|
|
|
32
|
|
||
Diluted weighted average shares outstanding
|
121,359
|
|
|
113,832
|
|
||
Net income per share - Diluted
|
$
|
1.47
|
|
|
$
|
1.38
|
|
|
Three Months Ended December 31, 2019
|
||||||
|
Distribution
|
|
Pipeline and Storage
|
||||
|
(In thousands)
|
||||||
Gas sales revenues:
|
|
|
|
||||
Residential
|
$
|
552,076
|
|
|
$
|
—
|
|
Commercial
|
211,314
|
|
|
—
|
|
||
Industrial
|
24,925
|
|
|
—
|
|
||
Public authority and other
|
13,022
|
|
|
—
|
|
||
Total gas sales revenues
|
801,337
|
|
|
—
|
|
||
Transportation revenues
|
26,640
|
|
|
152,010
|
|
||
Miscellaneous revenues
|
6,786
|
|
|
5,155
|
|
||
Revenues from contracts with customers
|
834,763
|
|
|
157,165
|
|
||
Alternative revenue program revenues
|
(6,751
|
)
|
|
(8,989
|
)
|
||
Other revenues
|
492
|
|
|
—
|
|
||
Total operating revenues
|
$
|
828,504
|
|
|
$
|
148,176
|
|
|
Three Months Ended December 31, 2018
|
||||||
|
Distribution
|
|
Pipeline and Storage
|
||||
|
(In thousands)
|
||||||
Gas sales revenues:
|
|
|
|
||||
Residential
|
$
|
547,928
|
|
|
$
|
—
|
|
Commercial
|
218,938
|
|
|
—
|
|
||
Industrial
|
34,537
|
|
|
—
|
|
||
Public authority and other
|
13,285
|
|
|
—
|
|
||
Total gas sales revenues
|
814,688
|
|
|
—
|
|
||
Transportation revenues
|
25,400
|
|
|
147,424
|
|
||
Miscellaneous revenues
|
6,950
|
|
|
1,682
|
|
||
Revenues from contracts with customers
|
847,038
|
|
|
149,106
|
|
||
Alternative revenue program revenues
|
(8,739
|
)
|
|
(14,636
|
)
|
||
Other revenues
|
536
|
|
|
—
|
|
||
Total operating revenues
|
$
|
838,835
|
|
|
$
|
134,470
|
|
•
|
We elected to bundle our lease and non-lease components as a single component for all asset classes.
|
•
|
We elected not to perform the following:
|
◦
|
Evaluate existing or expired land easements prior to October 1, 2019 to determine if they are leases.
|
◦
|
Include short-term leases in the calculation of our lease liability.
|
◦
|
Evaluate existing or expired contracts to determine if they are leases.
|
◦
|
Assess lease classification for existing or expired leases.
|
◦
|
Review initial direct costs for existing leases.
|
◦
|
Use hindsight in order to determine the lease term or impairment of our ROU assets.
|
|
December 31, 2019
|
Weighted average remaining lease term (years)
|
|
Finance lease
|
19.00
|
Operating leases
|
10.78
|
|
December 31, 2019
|
|
Weighted average discount rate
|
|
|
Finance lease
|
9.57
|
%
|
Operating leases
|
2.91
|
%
|
|
Three Months Ended December 31, 2019
|
||
|
(In thousands)
|
||
Finance lease cost
|
$
|
73
|
|
Operating lease cost
|
9,925
|
|
|
Total lease cost
|
$
|
9,998
|
|
|
Balance Sheet Classification
|
December 31, 2019
|
||
|
|
(In thousands)
|
||
Assets
|
|
|
||
Finance lease
|
Net Property, Plant and Equipment
|
$
|
2,522
|
|
Operating leases
|
Deferred charges and other assets
|
223,486
|
|
|
Total right-of-use assets
|
|
$
|
226,008
|
|
Liabilities
|
|
|
||
Current
|
|
|
||
Finance lease
|
Current maturities of long-term debt
|
$
|
50
|
|
Operating leases
|
Other current liabilities
|
30,099
|
|
|
Noncurrent
|
|
|
||
Finance lease
|
Long-term debt
|
2,484
|
|
|
Operating leases
|
Deferred credits and other liabilities
|
200,997
|
|
|
Total lease liabilities
|
|
$
|
233,630
|
|
|
Three Months Ended December 31, 2019
|
||
|
(In thousands)
|
||
Cash paid amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows used for operating leases
|
$
|
8,840
|
|
Right-of-use assets obtained in exchange for lease obligations
|
|
||
Operating leases
|
$
|
6,812
|
|
|
Total
|
Finance Lease
|
Operating Leases
|
||||||
|
(In thousands)
|
||||||||
Year 1
|
$
|
35,719
|
|
$
|
244
|
|
$
|
35,475
|
|
Year 2
|
35,954
|
|
249
|
|
35,705
|
|
|||
Year 3
|
32,230
|
|
254
|
|
31,976
|
|
|||
Year 4
|
27,421
|
|
259
|
|
27,162
|
|
|||
Year 5
|
18,981
|
|
264
|
|
18,717
|
|
|||
Thereafter
|
127,745
|
|
4,222
|
|
123,523
|
|
|||
Total lease payments
|
278,050
|
|
5,492
|
|
272,558
|
|
|||
Less: Imputed interest
|
44,420
|
|
2,958
|
|
41,462
|
|
|||
Total
|
$
|
233,630
|
|
$
|
2,534
|
|
$
|
231,096
|
|
Reported as of December 31, 2019
|
|
|
|
||||||
Short-term lease liabilities
|
$
|
30,149
|
|
$
|
50
|
|
$
|
30,099
|
|
Long-term lease liabilities
|
203,481
|
|
2,484
|
|
200,997
|
|
|||
Total lease liabilities
|
$
|
233,630
|
|
$
|
2,534
|
|
$
|
231,096
|
|
|
Operating
Leases(1)
|
|
Capital Lease
|
||||
|
(In thousands)
|
||||||
2020
|
$
|
21,017
|
|
|
$
|
243
|
|
2021
|
20,416
|
|
|
248
|
|
||
2022
|
19,370
|
|
|
253
|
|
||
2023
|
18,071
|
|
|
258
|
|
||
2024
|
15,718
|
|
|
263
|
|
||
Thereafter
|
105,544
|
|
|
4,343
|
|
||
Total minimum lease payments
|
$
|
200,136
|
|
|
5,608
|
|
|
Less amount representing interest
|
|
|
3,018
|
|
|||
Present value of net minimum lease payments
|
|
|
$
|
2,590
|
|
(1)
|
Future minimum lease payments do not include amounts for fleet leases and other de minimis items that can be renewed beyond the initial lease term. The Company anticipates renewing the leases beyond the initial term, but the anticipated payments associated with the renewals do not meet the definition of expected minimum lease payments and therefore are not included above. Expected payments are $17.6 million in 2020, $18.0 million in 2021, $11.8 million in 2022, $8.5 million in 2023, $5.4 million 2024 and $2.7 million thereafter.
|
|
December 31, 2019
|
|
September 30, 2019
|
||||
|
(In thousands)
|
||||||
Unsecured 3.00% Senior Notes, due 2027
|
$
|
500,000
|
|
|
$
|
500,000
|
|
Unsecured 2.625% Senior Notes, due 2029
|
300,000
|
|
|
—
|
|
||
Unsecured 5.95% Senior Notes, due 2034
|
200,000
|
|
|
200,000
|
|
||
Unsecured 5.50% Senior Notes, due 2041
|
400,000
|
|
|
400,000
|
|
||
Unsecured 4.15% Senior Notes, due 2043
|
500,000
|
|
|
500,000
|
|
||
Unsecured 4.125% Senior Notes, due 2044
|
750,000
|
|
|
750,000
|
|
||
Unsecured 4.30% Senior Notes, due 2048
|
600,000
|
|
|
600,000
|
|
||
Unsecured 4.125% Senior Notes, due 2049
|
450,000
|
|
|
450,000
|
|
||
Unsecured 3.375% Senior Notes, due 2049
|
500,000
|
|
|
—
|
|
||
Medium-term note Series A, 1995-1, 6.67%, due 2025
|
10,000
|
|
|
10,000
|
|
||
Unsecured 6.75% Debentures, due 2028
|
150,000
|
|
|
150,000
|
|
||
Finance lease obligations (see Note 6)
|
2,534
|
|
|
—
|
|
||
Total long-term debt
|
4,362,534
|
|
|
3,560,000
|
|
||
Less:
|
|
|
|
||||
Original issue (premium) / discount on unsecured senior notes and debentures
|
703
|
|
|
193
|
|
||
Debt issuance cost
|
37,496
|
|
|
30,355
|
|
||
Current maturities
|
50
|
|
|
—
|
|
||
|
$
|
4,324,285
|
|
|
$
|
3,529,452
|
|
|
Common stock
|
|
Additional
Paid-in Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings |
|
Total
|
|||||||||||||
|
Number of
Shares |
|
Stated
Value |
|
||||||||||||||||||
|
(In thousands, except share and per share data)
|
|||||||||||||||||||||
Balance, September 30, 2018
|
111,273,683
|
|
|
$
|
556
|
|
|
$
|
2,974,926
|
|
|
$
|
(83,647
|
)
|
|
$
|
1,878,116
|
|
|
$
|
4,769,951
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
157,646
|
|
|
157,646
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,258
|
)
|
|
—
|
|
|
(22,258
|
)
|
|||||
Cash dividends ($0.525 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,722
|
)
|
|
(58,722
|
)
|
|||||
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,210
|
)
|
|
8,210
|
|
|
—
|
|
|||||
Common stock issued:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Public and other stock offerings
|
5,434,812
|
|
|
27
|
|
|
498,948
|
|
|
—
|
|
|
—
|
|
|
498,975
|
|
|||||
Stock-based compensation plans
|
184,464
|
|
|
1
|
|
|
2,602
|
|
|
—
|
|
|
—
|
|
|
2,603
|
|
|||||
Balance, December 31, 2018
|
116,892,959
|
|
|
$
|
584
|
|
|
$
|
3,476,476
|
|
|
$
|
(114,115
|
)
|
|
$
|
1,985,250
|
|
|
$
|
5,348,195
|
|
|
|
Maturity
|
|
|
|
|||||||||||||
|
|
September 30, 2020
|
|
March 31, 2020
|
|
Total
|
||||||||||||
|
|
Shares
|
Price(1)
|
|
Shares
|
Price(1)
|
|
Shares
|
Price(1)
|
|||||||||
Available Balance
September 30, 2019 |
|
2,474,162
|
|
|
|
2,155,698
|
|
|
|
4,629,860
|
|
|
||||||
Q1 Issuance
|
|
339,574
|
|
$
|
107.40
|
|
|
—
|
|
$
|
—
|
|
|
339,574
|
|
$
|
107.40
|
|
Q1 Settlement
|
|
(564,362
|
)
|
$
|
100.21
|
|
|
(2,155,698
|
)
|
$
|
93.88
|
|
|
(2,720,060
|
)
|
$
|
95.22
|
|
Available Balance
December 31, 2019 |
|
2,249,374
|
|
|
|
—
|
|
|
|
2,249,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Issued price as disclosed is calculated as the weighted average price for activity occurring during the quarter.
|
|
Available-
for-Sale
Securities
|
|
Interest Rate
Agreement
Cash Flow
Hedges
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
September 30, 2019
|
$
|
132
|
|
|
$
|
(114,715
|
)
|
|
$
|
(114,583
|
)
|
Other comprehensive loss before reclassifications
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
1,053
|
|
|
1,053
|
|
|||
Net current-period other comprehensive income (loss)
|
(1
|
)
|
|
1,053
|
|
|
1,052
|
|
|||
December 31, 2019
|
$
|
131
|
|
|
$
|
(113,662
|
)
|
|
$
|
(113,531
|
)
|
|
Available-
for-Sale
Securities
|
|
Interest Rate
Agreement
Cash Flow
Hedges
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
September 30, 2018
|
$
|
8,124
|
|
|
$
|
(91,771
|
)
|
|
$
|
(83,647
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(22,716
|
)
|
|
(22,716
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
458
|
|
|
458
|
|
|||
Net current-period other comprehensive loss
|
—
|
|
|
(22,258
|
)
|
|
(22,258
|
)
|
|||
Cumulative effect of accounting change
|
(8,210
|
)
|
|
—
|
|
|
(8,210
|
)
|
|||
December 31, 2018
|
$
|
(86
|
)
|
|
$
|
(114,029
|
)
|
|
$
|
(114,115
|
)
|
|
Three Months Ended December 31
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In thousands)
|
||||||||||||||
Components of net periodic pension cost:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
4,653
|
|
|
$
|
4,045
|
|
|
$
|
3,366
|
|
|
$
|
2,702
|
|
Interest cost(1)
|
5,843
|
|
|
6,799
|
|
|
2,653
|
|
|
2,961
|
|
||||
Expected return on assets(1)
|
(7,079
|
)
|
|
(7,113
|
)
|
|
(2,625
|
)
|
|
(2,665
|
)
|
||||
Amortization of prior service cost (credit)(1)
|
(58
|
)
|
|
(58
|
)
|
|
43
|
|
|
43
|
|
||||
Amortization of actuarial (gain) loss(1)
|
(1,271
|
)
|
|
1,608
|
|
|
(334
|
)
|
|
(2,045
|
)
|
||||
Net periodic pension cost
|
$
|
2,088
|
|
|
$
|
5,281
|
|
|
$
|
3,103
|
|
|
$
|
996
|
|
|
|
|
|
|
|
|
|
(1)
|
The components of net periodic cost other than the service cost component are included in the line item other non-operating expense in the condensed consolidated statement of comprehensive income or are capitalized on the condensed consolidated balance sheets as a regulatory asset or liability, as described in Note 2 to the financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019.
|
|
|
|
|
||||||
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
||||
|
|
|
(In thousands)
|
||||||
December 31, 2019
|
|
|
|
|
|
||||
Not Designated As Hedges:
|
|
|
|
|
|
||||
Commodity contracts
|
Other current assets /
Other current liabilities
|
|
$
|
1,213
|
|
|
$
|
(8,391
|
)
|
Commodity contracts
|
Deferred charges and other assets /
Deferred credits and other liabilities
|
|
158
|
|
|
(439
|
)
|
||
Total
|
|
|
1,371
|
|
|
(8,830
|
)
|
||
Gross / Net Financial Instruments
|
|
|
$
|
1,371
|
|
|
$
|
(8,830
|
)
|
|
|
|
|
||||||
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
||||
|
|
|
(In thousands)
|
||||||
September 30, 2019
|
|
|
|
|
|
||||
Not Designated As Hedges:
|
|
|
|
|
|
||||
Commodity contracts
|
Other current assets /
Other current liabilities
|
|
$
|
1,586
|
|
|
$
|
(4,552
|
)
|
Commodity contracts
|
Deferred charges and other assets /
Deferred credits and other liabilities
|
|
225
|
|
|
(1,249
|
)
|
||
Total
|
|
|
1,811
|
|
|
(5,801
|
)
|
||
Gross / Net Financial Instruments
|
|
|
$
|
1,811
|
|
|
$
|
(5,801
|
)
|
|
Three Months Ended December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Increase (decrease) in fair value:
|
|
|
|
||||
Interest rate agreements
|
$
|
—
|
|
|
$
|
(22,716
|
)
|
Recognition of losses in earnings due to settlements:
|
|
|
|
||||
Interest rate agreements
|
1,053
|
|
|
458
|
|
||
Total other comprehensive income (loss) from hedging, net of tax
|
$
|
1,053
|
|
|
$
|
(22,258
|
)
|
|
Interest Rate
Agreements
|
||
|
(In thousands)
|
||
Next twelve months
|
$
|
(4,212
|
)
|
Thereafter
|
(109,450
|
)
|
|
Total
|
$
|
(113,662
|
)
|
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)(1)
|
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|
Netting and
Cash
Collateral
|
|
December 31, 2019
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
$
|
—
|
|
|
$
|
1,371
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,371
|
|
Debt and equity securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Registered investment companies
|
44,468
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,468
|
|
|||||
Bond mutual funds
|
26,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,150
|
|
|||||
Bonds(2)
|
—
|
|
|
32,055
|
|
|
—
|
|
|
—
|
|
|
32,055
|
|
|||||
Money market funds
|
—
|
|
|
1,453
|
|
|
—
|
|
|
—
|
|
|
1,453
|
|
|||||
Total debt and equity securities
|
70,618
|
|
|
33,508
|
|
|
—
|
|
|
—
|
|
|
104,126
|
|
|||||
Total assets
|
$
|
70,618
|
|
|
$
|
34,879
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
105,497
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
$
|
—
|
|
|
$
|
8,830
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,830
|
|
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)(1)
|
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|
Netting and
Cash
Collateral
|
|
September 30, 2019
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
$
|
—
|
|
|
$
|
1,811
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,811
|
|
Debt and equity securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Registered investment companies
|
41,406
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,406
|
|
|||||
Bond mutual funds
|
25,966
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,966
|
|
|||||
Bonds(2)
|
—
|
|
|
31,915
|
|
|
—
|
|
|
—
|
|
|
31,915
|
|
|||||
Money market funds
|
—
|
|
|
2,596
|
|
|
—
|
|
|
—
|
|
|
2,596
|
|
|||||
Total debt and equity securities
|
67,372
|
|
|
34,511
|
|
|
—
|
|
|
—
|
|
|
101,883
|
|
|||||
Total assets
|
$
|
67,372
|
|
|
$
|
36,322
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
103,694
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
$
|
—
|
|
|
$
|
5,801
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,801
|
|
(1)
|
Our Level 2 measurements consist of over-the-counter options and swaps, which are valued using a market-based approach in which observable market prices are adjusted for criteria specific to each instrument, such as the strike price, notional amount or basis differences, municipal and corporate bonds, which are valued based on the most recent available quoted market prices and money market funds that are valued at cost.
|
(2)
|
Our investments in bonds are considered available-for-sale debt securities in accordance with current accounting guidance.
|
|
December 31, 2019
|
|
September 30, 2019
|
||||
|
(In thousands)
|
||||||
Carrying Amount
|
$
|
4,360,000
|
|
|
$
|
3,560,000
|
|
Fair Value
|
$
|
4,927,756
|
|
|
$
|
4,216,249
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
The distribution segment is primarily comprised of our regulated natural gas distribution and related sales operations in eight states.
|
•
|
The pipeline and storage segment is comprised primarily of the pipeline and storage operations of our Atmos Pipeline-Texas division and our natural gas transmission operations in Louisiana.
|
•
|
Regulation
|
•
|
Unbilled revenue
|
•
|
Pension and other postretirement plans
|
•
|
Impairment assessments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kansas, West Texas
|
October — May
|
Tennessee
|
October — April
|
Kentucky, Mississippi, Mid-Tex
|
November — April
|
Louisiana
|
December — March
|
Virginia
|
January — December
|
|
Three Months Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
|
(In thousands, unless otherwise noted)
|
||||||||||
Operating revenues
|
$
|
828,504
|
|
|
$
|
838,835
|
|
|
$
|
(10,331
|
)
|
Purchased gas cost
|
397,558
|
|
|
437,732
|
|
|
(40,174
|
)
|
|||
Operating expenses
|
250,669
|
|
|
231,666
|
|
|
19,003
|
|
|||
Operating income
|
180,277
|
|
|
169,437
|
|
|
10,840
|
|
|||
Other non-operating income (expense)
|
1,954
|
|
|
(6,477
|
)
|
|
8,431
|
|
|||
Interest charges
|
16,362
|
|
|
18,210
|
|
|
(1,848
|
)
|
|||
Income before income taxes
|
165,869
|
|
|
144,750
|
|
|
21,119
|
|
|||
Income tax expense
|
36,112
|
|
|
30,365
|
|
|
5,747
|
|
|||
Net income
|
$
|
129,757
|
|
|
$
|
114,385
|
|
|
$
|
15,372
|
|
Consolidated distribution sales volumes — MMcf
|
99,061
|
|
|
101,698
|
|
|
(2,637
|
)
|
|||
Consolidated distribution transportation volumes — MMcf
|
40,497
|
|
|
41,048
|
|
|
(551
|
)
|
|||
Total consolidated distribution throughput — MMcf
|
139,558
|
|
|
142,746
|
|
|
(3,188
|
)
|
|||
Consolidated distribution average cost of gas per Mcf sold
|
$
|
4.01
|
|
|
$
|
4.30
|
|
|
$
|
(0.29
|
)
|
•
|
a $27.0 million net increase in rate adjustments, primarily in our Mid-Tex, Mississippi, Louisiana and West Texas Divisions.
|
•
|
a $4.0 million increase from customer growth primarily in our Mid-Tex Division.
|
•
|
a $1.4 million decrease in net consumption, primarily due to warmer weather than the prior year period.
|
•
|
a $9.2 million increase in depreciation expense and property taxes associated with increased capital investments.
|
•
|
a $3.1 million increase in pipeline maintenance and related activities.
|
•
|
a $2.5 million increase in employee costs as we increased service-related headcount during fiscal 2019 to support operations in our fastest growing service territories.
|
|
Three Months Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Mid-Tex
|
$
|
78,295
|
|
|
$
|
72,406
|
|
|
$
|
5,889
|
|
Kentucky/Mid-States
|
23,281
|
|
|
24,452
|
|
|
(1,171
|
)
|
|||
Louisiana
|
24,293
|
|
|
22,153
|
|
|
2,140
|
|
|||
West Texas
|
17,766
|
|
|
15,823
|
|
|
1,943
|
|
|||
Mississippi
|
22,414
|
|
|
19,588
|
|
|
2,826
|
|
|||
Colorado-Kansas
|
13,736
|
|
|
13,789
|
|
|
(53
|
)
|
|||
Other
|
492
|
|
|
1,226
|
|
|
(734
|
)
|
|||
Total
|
$
|
180,277
|
|
|
$
|
169,437
|
|
|
$
|
10,840
|
|
Rate Action
|
|
Annual Increase in
Operating Income
|
||
|
|
(In thousands)
|
||
Annual formula rate mechanisms
|
|
$
|
56,727
|
|
Rate case filings
|
|
—
|
|
|
Other rate activity
|
|
—
|
|
|
|
|
$
|
56,727
|
|
Division
|
|
Rate Action
|
|
Jurisdiction
|
|
Operating Income Requested
|
||
|
|
|
|
|
|
(In thousands)
|
||
Colorado-Kansas
|
|
Infrastructure Mechanism
|
|
Colorado (1)
|
|
$
|
2,082
|
|
Colorado-Kansas
|
|
Ad Valorem
|
|
Kansas (2)
|
|
353
|
|
|
Colorado-Kansas
|
|
Rate Case
|
|
Kansas
|
|
3,697
|
|
|
Kentucky/Mid-States
|
|
Formula Rate Mechanism
|
|
Tennessee
|
|
726
|
|
|
West Texas
|
|
Rate Case
|
|
West Texas Triangle
|
|
(242
|
)
|
|
|
|
|
|
|
|
$
|
6,616
|
|
(1)
|
The Colorado Public Utilities Commission approved the SSIR implementation at their December 17, 2019 meeting with rates effective January 1, 2020.
|
(2)
|
The Kansas Corporation Commission approved the Ad Valorem filing on January 16, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Formula Rate Mechanisms
|
||
State
|
|
Infrastructure Programs
|
|
Formula Rate Mechanisms
|
|
|
|
|
|
Colorado
|
|
System Safety and Integrity Rider (SSIR)
|
|
—
|
Kansas
|
|
Gas System Reliability Surcharge (GSRS)
|
|
—
|
Kentucky
|
|
Pipeline Replacement Program (PRP)
|
|
—
|
Louisiana
|
|
(1)
|
|
Rate Stabilization Clause (RSC)
|
Mississippi
|
|
System Integrity Rider (SIR)
|
|
Stable Rate Filing (SRF)
|
Tennessee
|
|
—
|
|
Annual Rate Mechanism (ARM)
|
Texas
|
|
Gas Reliability Infrastructure Program (GRIP), (1)
|
|
Dallas Annual Rate Review (DARR), Rate Review Mechanism (RRM)
|
Virginia
|
|
Steps to Advance Virginia Energy (SAVE)
|
|
—
|
(1)
|
Infrastructure mechanisms in Texas and Louisiana allow for the deferral of all expenses associated with capital expenditures incurred pursuant to these rules, which primarily consists of interest, depreciation and other taxes (Texas only), until the next rate proceeding (rate case or annual rate filing), at which time investment and costs would be recoverable through base rates.
|
Division
|
|
Jurisdiction
|
|
Test Year
Ended
|
|
Increase (Decrease) in
Annual
Operating
Income
|
|
Effective
Date
|
||
|
|
|
|
(In thousands)
|
||||||
2020 Filings:
|
|
|
|
|
|
|
|
|
||
Mississippi
|
|
Mississippi - SIR
|
|
10/31/2020
|
|
$
|
7,586
|
|
|
11/01/2019
|
Mississippi
|
|
Mississippi - SRF
|
|
10/31/2020
|
|
6,886
|
|
|
11/01/2019
|
|
Kentucky/Mid-States
|
|
Virginia - SAVE
|
|
09/30/2020
|
|
84
|
|
|
10/01/2019
|
|
Kentucky/Mid-States
|
|
Kentucky PRP
|
|
09/30/2020
|
|
2,912
|
|
|
10/01/2019
|
|
Mid-Tex
|
|
Mid-Tex Cities RRM
|
|
12/31/2018
|
|
34,380
|
|
|
10/01/2019
|
|
West Texas
|
|
West Texas Cities RRM
|
|
12/31/2018
|
|
4,879
|
|
|
10/01/2019
|
|
Total 2020 Filings
|
|
|
|
|
|
$
|
56,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
|
(In thousands, unless otherwise noted)
|
||||||||||
Mid-Tex / Affiliate transportation revenue
|
$
|
113,163
|
|
|
$
|
101,727
|
|
|
$
|
11,436
|
|
Third-party transportation revenue
|
30,300
|
|
|
31,035
|
|
|
(735
|
)
|
|||
Other revenue
|
4,713
|
|
|
1,708
|
|
|
3,005
|
|
|||
Total operating revenues
|
148,176
|
|
|
134,470
|
|
|
13,706
|
|
|||
Total purchased gas cost
|
99
|
|
|
(358
|
)
|
|
457
|
|
|||
Operating expenses
|
75,573
|
|
|
67,801
|
|
|
7,772
|
|
|||
Operating income
|
72,504
|
|
|
67,027
|
|
|
5,477
|
|
|||
Other non-operating income (expense)
|
2,933
|
|
|
(1,246
|
)
|
|
4,179
|
|
|||
Interest charges
|
10,867
|
|
|
9,639
|
|
|
1,228
|
|
|||
Income before income taxes
|
64,570
|
|
|
56,142
|
|
|
8,428
|
|
|||
Income tax expense
|
15,654
|
|
|
12,881
|
|
|
2,773
|
|
|||
Net income
|
$
|
48,916
|
|
|
$
|
43,261
|
|
|
$
|
5,655
|
|
Gross pipeline transportation volumes — MMcf
|
223,712
|
|
|
238,855
|
|
|
(15,143
|
)
|
|||
Consolidated pipeline transportation volumes — MMcf
|
156,529
|
|
|
170,527
|
|
|
(13,998
|
)
|
|
|
|
|
|
|
Issue Quarter
|
Issued Under
|
Shares Available
|
Net Proceeds Available
(In thousands)
|
Maturity
|
Forward Price
|
|||||
June 30, 2019
|
ATM
|
486,201
|
|
$
|
49,063
|
|
9/30/2020
|
$
|
100.91
|
|
September 30, 2019
|
ATM
|
1,423,599
|
|
154,125
|
|
9/30/2020
|
$
|
108.70
|
|
|
December 31, 2019
|
ATM
|
339,574
|
|
36,385
|
|
9/30/2020
|
$
|
107.40
|
|
|
Total
|
|
2,249,374
|
|
$
|
239,573
|
|
|
|
|
December 31, 2019
|
|
September 30, 2019
|
|
December 31, 2018
|
|||||||||||||||
|
(In thousands, except percentages)
|
|||||||||||||||||||
Short-term debt
|
$
|
—
|
|
|
—
|
%
|
|
$
|
464,915
|
|
|
4.8
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Long-term debt
|
4,324,335
|
|
|
41.4
|
%
|
|
3,529,452
|
|
|
36.2
|
%
|
|
3,659,779
|
|
|
40.6
|
%
|
|||
Shareholders’ equity
|
6,127,775
|
|
|
58.6
|
%
|
|
5,750,223
|
|
|
59.0
|
%
|
|
5,348,195
|
|
|
59.4
|
%
|
|||
Total
|
$
|
10,452,110
|
|
|
100.0
|
%
|
|
$
|
9,744,590
|
|
|
100.0
|
%
|
|
$
|
9,007,974
|
|
|
100.0
|
%
|
|
Three Months Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Total cash provided by (used in)
|
|
|
|
|
|
||||||
Operating activities
|
$
|
172,445
|
|
|
$
|
164,684
|
|
|
$
|
7,761
|
|
Investing activities
|
(528,235
|
)
|
|
(415,293
|
)
|
|
(112,942
|
)
|
|||
Financing activities
|
520,512
|
|
|
455,035
|
|
|
65,477
|
|
|||
Change in cash and cash equivalents
|
164,722
|
|
|
204,426
|
|
|
(39,704
|
)
|
|||
Cash and cash equivalents at beginning of period
|
24,550
|
|
|
13,771
|
|
|
10,779
|
|
|||
Cash and cash equivalents at end of period
|
$
|
189,272
|
|
|
$
|
218,197
|
|
|
$
|
(28,925
|
)
|
|
Three Months Ended December 31
|
||||
|
2019
|
|
2018
|
||
Shares issued:
|
|
|
|
||
Direct Stock Purchase Plan
|
17,772
|
|
|
20,559
|
|
1998 Long-Term Incentive Plan
|
164,549
|
|
|
184,464
|
|
Retirement Savings Plan and Trust
|
21,097
|
|
|
23,417
|
|
Equity Issuance
|
2,720,060
|
|
|
5,390,836
|
|
Total shares issued
|
2,923,478
|
|
|
5,619,276
|
|
|
S&P
|
|
Moody’s
|
||
Senior unsecured long-term debt
|
A
|
|
A1
|
||
Short-term debt
|
A-1
|
|
P-1
|
|
Three Months Ended December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Fair value of contracts at beginning of period
|
$
|
(3,990
|
)
|
|
$
|
(55,218
|
)
|
Contracts realized/settled
|
(2,863
|
)
|
|
6,458
|
|
||
Fair value of new contracts
|
105
|
|
|
484
|
|
||
Other changes in value
|
(711
|
)
|
|
(35,393
|
)
|
||
Fair value of contracts at end of period
|
(7,459
|
)
|
|
(83,669
|
)
|
||
Netting of cash collateral
|
—
|
|
|
—
|
|
||
Cash collateral and fair value of contracts at period end
|
$
|
(7,459
|
)
|
|
$
|
(83,669
|
)
|
|
Fair Value of Contracts at December 31, 2019
|
||||||||||||||||||
|
Maturity in Years
|
|
|
||||||||||||||||
Source of Fair Value
|
Less
Than 1
|
|
1-3
|
|
4-5
|
|
Greater
Than 5
|
|
Total
Fair
Value
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Prices actively quoted
|
$
|
(7,178
|
)
|
|
$
|
(281
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7,459
|
)
|
Prices based on models and other valuation methods
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Fair Value
|
$
|
(7,178
|
)
|
|
$
|
(281
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7,459
|
)
|
|
Three Months Ended December 31
|
||||||
|
2019
|
|
2018
|
||||
METERS IN SERVICE, end of period
|
|
|
|
||||
Residential
|
3,020,990
|
|
|
2,988,920
|
|
||
Commercial
|
276,455
|
|
|
273,032
|
|
||
Industrial
|
1,664
|
|
|
1,682
|
|
||
Public authority and other
|
8,554
|
|
|
8,386
|
|
||
Total meters
|
3,307,663
|
|
|
3,272,020
|
|
||
|
|
|
|
||||
INVENTORY STORAGE BALANCE — Bcf
|
58.1
|
|
|
56.7
|
|
||
SALES VOLUMES — MMcf(1)
|
|
|
|
||||
Gas sales volumes
|
|
|
|
||||
Residential
|
58,780
|
|
|
59,864
|
|
||
Commercial
|
31,253
|
|
|
31,583
|
|
||
Industrial
|
6,855
|
|
|
8,174
|
|
||
Public authority and other
|
2,173
|
|
|
2,077
|
|
||
Total gas sales volumes
|
99,061
|
|
|
101,698
|
|
||
Transportation volumes
|
42,274
|
|
|
42,851
|
|
||
Total throughput
|
141,335
|
|
|
144,549
|
|
||
OPERATING REVENUES (000’s)(1)(2)
|
|
|
|
||||
Gas sales revenues
|
|
|
|
||||
Residential
|
$
|
546,450
|
|
|
$
|
540,439
|
|
Commercial
|
210,287
|
|
|
217,060
|
|
||
Industrial
|
24,868
|
|
|
34,472
|
|
||
Public authority and other
|
12,922
|
|
|
13,107
|
|
||
Total gas sales revenues
|
794,527
|
|
|
805,078
|
|
||
Transportation revenues
|
26,542
|
|
|
25,350
|
|
||
Other gas revenues(3)
|
7,435
|
|
|
8,407
|
|
||
Total operating revenues
|
$
|
828,504
|
|
|
$
|
838,835
|
|
Average cost of gas per Mcf sold
|
$
|
4.01
|
|
|
$
|
4.30
|
|
|
Three Months Ended December 31
|
||||||
|
2019
|
|
2018
|
||||
CUSTOMERS, end of period
|
|
|
|
||||
Industrial
|
94
|
|
|
93
|
|
||
Other
|
242
|
|
|
242
|
|
||
Total
|
336
|
|
|
335
|
|
||
|
|
|
|
||||
INVENTORY STORAGE BALANCE — Bcf
|
1.4
|
|
|
1.0
|
|
||
PIPELINE TRANSPORTATION VOLUMES — MMcf(1)
|
223,712
|
|
|
238,855
|
|
||
OPERATING REVENUES (000’s)(1)(2)
|
$
|
148,176
|
|
|
$
|
134,470
|
|
(1)
|
Sales volumes and revenues reflect segment operations, including intercompany sales and transportation amounts.
|
(2)
|
Operating revenues include revenues from our alternative revenue programs as defined in Note 2 to the financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019.
|
(3)
|
Other gas revenues include impacts of the TCJA.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
Description
|
Page Number or
Incorporation by
Reference to
|
3.1
|
|
Restated Articles of Incorporation of Atmos Energy Corporation - Texas (As Amended Effective February 3, 2010)
|
|
3.2
|
|
Restated Articles of Incorporation of Atmos Energy Corporation - Virginia (As Amended Effective February 3, 2010)
|
|
3.3
|
|
Amended and Restated Bylaws of Atmos Energy Corporation (as of February 5, 2019)
|
|
15
|
|
|
|
31
|
|
|
|
32
|
|
|
|
101.INS
|
|
XBRL 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.SCH
|
|
Inline XBRL Taxonomy Extension Schema
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Labels Linkbase
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
|
104
|
|
Cover 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
|
*
|
These certifications, which were made pursuant to 18 U.S.C. Section 1350 by the Company’s Chief Executive Officer and Chief Financial Officer, furnished as Exhibit 32 to this Quarterly Report on Form 10-Q, will not be deemed to be filed with the Commission or incorporated by reference into any filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates such certifications by reference.
|
|
|
|
ATMOS ENERGY CORPORATION
(Registrant)
|
|
|
|
By: /s/ CHRISTOPHER T. FORSYTHE
|
|
|
|
Christopher T. Forsythe
Senior Vice President and Chief Financial Officer
(Duly authorized signatory)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Atmos Energy Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ JOHN K. AKERS
|
|
|
John K. Akers
|
|
|
President and
|
|
|
Chief Executive Officer
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Atmos Energy Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions):
|
(a)
|
All significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ CHRISTOPHER T. FORSYTHE
|
|
|
Christopher T. Forsythe
|
|
|
Senior Vice President and
|
|
|
Chief Financial Officer
|
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ JOHN K. AKERS
|
|
|
John K. Akers
|
|
|
President and
|
|
|
Chief Executive Officer
|
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ CHRISTOPHER T. FORSYTHE
|
|
|
Christopher T. Forsythe
|
|
|
Senior Vice President and
|
|
|
Chief Financial Officer
|
|
|