Atmos Energy Corporation 2014 Summary Annual Report
Investing
for Safety
Never before has so
much capital gone
into modernizing the
natural gas infrastructure
in the United States.
Atmos Energy is a leader in pipeline mod-
ernization. Since 2007, it has invested about
$5 billion dollars to renew and expand its
distribution and transmission systems and to
improve customer service. About 70 percent
of that capital spending has been dedicated
to increasing safety and reliability.
A LEADER IN MODERNIZATION
DOLLARS IN MILLIONS
$800
$600
$400
$200
$0
2010
2011
2012
2013
2014
TOTAL CAPITAL EXPENDITURES
SAFETY AND RELIABILITY EXPENDITURES
During fiscal 2014, Atmos Energy replaced nearly 475 miles of natural
gas pipelines. Near Hopkinsville, Kentucky, the Kentucky/Mid-States
Division installed 5.5 miles of coated steel pipe as the final phase of a
multi-year project to replace some 25 miles of aging bare steel pipeline.
The line brings gas to customers in area communities while supporting
growth by industrial customers in nearby industrial parks. It effectively
doubles the throughput of the former pipeline and allows more storage
gas to be used from the company’s nearby St. Charles storage field.
1
In the Flow Lab at Atmos Energy’s Charles K. Vaughan Center in
Plano, Texas, construction operators Jason Gilson and Stephen
Ancira learn about remote control shut-off valves from Fred Bev-
ersdorf, manager of technical training. Shut-off valves increase the
safety on our transmission pipelines and larger mains by enabling
our control centers to respond quickly if a pressure anomaly occurs.
Investing
for Safety
America’s natural gas industry is pursuing an unprecedented program
to enhance the safety, reliability and capacity of its 2.4 million miles
of pipelines.
According to the U.S. Department of Transportation (DOT), pipelines rank as the country’s safest mode of
transportation.
The industry’s outstanding safety record is the result of nearly 45 years of major pipeline improvements.
To enhance this excellent record, natural gas companies are planning to replace an estimated 8.4 percent of
their 1.3 million miles of gas distribution pipelines and 6.8 percent of 895,000 miles of service lines.
Atmos Energy is a leader in pipeline modernization. Since 2007, it has invested about $5 billion dollars
to renew and expand its distribution and transmission systems and to improve customer service. About 70
percent of that capital spending has been dedicated to increasing safety and reliability.
AMERICA’S SAFEST GAS COMPANY
“Our goal is to be the safest natural gas distributor in the nation,” says Kim Cocklin, president and CEO of
Atmos Energy Corporation.
“Our goal is more than an aspirational ideal. It is a commitment we make to our customers, communities,
regulators and investors,” he says. “Every employee has taken a pledge to strive to be incident-free every day.”
To make a safe system even safer, Atmos Energy has fostered a “culture of safety” in the following ways:
> In 2010, Atmos Energy opened the Charles K. Vaughan Center, the
finest technical training facility in the natural gas distribution industry.
> The company’s training instructors are all seasoned experts with
many years of operating experience.
> Its service technicians and construction operators continually train
and recertify to meet federal Operator Qualification requirements.
> Its Coaching in the Moment safety program engages employees
to be accountable not only for their own safety, but also to protect
their fellow employees and others at a worksite.
> Its AtmoSpirit enculturation program for all employees stresses
safety as the highest priority.
ATMOS ENERGY: INVESTING FOR SAFETY
3
Atmos Energy has already removed all cast iron pipelines from its system
in seven states. As part of our comprehensive pipeline infrastructure
program, we will replace all remaining cast iron pipe.
The 50 states, which often set more stringent reg-
ulations than federal laws, have stepped up their own
pipeline safety programs. The states have primary
responsibility for regulating natural gas distribution
systems and intrastate pipelines. Federal funding
provides about half the cost of the states’ pipeline in-
spection and enforcement programs, and this support
has helped states focus on pipeline renewal.
SETTING PRIORITIES
The Pipeline and Hazardous Materials Safety
Administration (PHMSA) within the DOT has
identified cast iron and unprotected bare steel pipe-
lines as the pipeline segments to begin replacing first.
These materials were once state-of-the-art tech-
nology, enhancing safety and reliability by displacing
earlier piping materials like creosoted wood or clay
pipe. However, pipelines have continually improved
because of better pipe manufacturing, construction
practices, and operation and maintenance.
Cast iron pipe was first used in the 1830s and
continued being installed until the early 1950s.
Bare steel pipelines were used extensively for gas
mains from the 1900s to the 1960s. Until pipeline
coatings were required by federal mandate in 1970,
some transmission and distribution operators con-
tinued to install bare steel pipelines, particularly in
areas of the country with drier climates.
Atmos Energy has already removed all cast iron
pipelines from its system in seven states. As part of
our comprehensive pipeline infrastructure program,
we will replace all remaining cast iron pipe and
will rehabilitate or replace the remaining bare steel
pipelines in our system.
“Realizing our goal to be the nation’s safest gas
utility requires us to invest significant amounts for
rehabilitating, fortifying and replacing our regulated
infrastructure,” Cocklin says.
The company’s fiscal 2015 capital expenditures are
projected to be between $900 million and $1.0 billion,
with more than 75 percent of these expenditures
earmarked to improve safety and reliability. Capital
spending in each of the fiscal years 2016 through 2018
should be between $900 million and $1.1 billion.
CALL TO ACTION
There are many reasons for modernizing aging
pipelines at this time: industry initiatives, federal
laws, safety concerns, regulatory directives, rate-
making mechanisms, environmental goals, energy
efficiency, economic development, favorable debt
and equity pricing, and low natural gas prices with
abundant supplies.
Federal oversight of natural gas pipeline safety
began with the Natural Gas Pipeline Safety Act
of 1968. The law required the U.S. Department of
Transportation to establish minimum safety stan-
dards for new pipeline facilities and for the trans-
portation of natural gas.
In 2011, then-DOT Secretary Ray LaHood
announced a national “Call to Action,” directing the
CEOs of pipeline companies to conduct a compre-
hensive review of their pipeline systems.
The secretary acknowledged that safety and
regulatory needs vary in each state. But he called on
state legislators and regulators to enact innovative
rate structures that fit their unique circumstances.
LaHood emphasized the need for regulators
to allow timely recovery of these replacement
investments. He said that traditional ratemaking
approaches can impede the imperative to make
improvements.
ATMOS ENERGY: INVESTING FOR SAFETY
Cast iron distribution mains top the list of pipelines scheduled for
replacement across the country. Although some cast iron lines have
operated safely for more than 100 years, aging iron pipe can turn
brittle and crack if the ground shifts or the pipe is damaged by
excavation. Behind houses in Highland Park, Texas, Juan Gomez
(top right), a senior field construction coordinator, oversees
replacing a cast iron main with high-density polyethylene pipe.
Pipelines
transport
natural gas to
more than
177
M I L L I O N
Americans
throughout
the U.S.
4
We plan to replace between 450 and 500 miles of distribution
pipelines, 70 to 90 miles of transmission pipelines and some 25,000
customer service lines during fiscal 2015.
ENSURING PIPELINE INTEGRITY
A LONG-TERM UNDERTAKING
Although much of the nation’s current natural gas
infrastructure was installed before 1970, the effect
of age is not the only factor—or the most significant
one—for assessing a pipeline’s fitness for service.
Along with the material that a pipe is made of,
operators must consider construction practices and
other factors that could affect pipeline integrity. Soil
conditions, erosion, drought, rainfall, wind, tree
roots, maintenance records, whether a line has a
protective coating, the proximity to populated loca-
tions and data collected from a variety of inspection
methods—all have a bearing on a pipeline’s integrity.
In 2004, federal regulations began requiring
operators of natural gas transmission pipelines to
conduct integrity management programs for their
pipeline systems. A similar regulation took effect for
natural gas distribution pipelines in 2011.
Integrity management programs require a
comprehensive examination of pipeline infra-
structure. Federal and state rules require pipeline
operators to assess threats to their system, apply risk
analysis to grade the significance of those threats
and take both preventative and mitigative actions
to protect the public from incidents. Our integrity
management plans are shared with the safety regula-
tors in each of the states we serve.
Integrity management programs can involve
running precise instruments through the pipeline,
called pigging, to search for corrosion or cracks,
excavating around the line to directly inspect the
pipe’s condition or performing a hydrostatic pres-
sure test of a line segment to ensure it can withstand
much higher-than-normal pressure.
Based on risk analysis and integrity management
data, Atmos Energy currently expects to replace
its existing cast iron and most of its bare steel and
vintage plastic pipelines during the next two decades.
We also plan to continue replacing between 75 miles
and 100 miles a year of older coated steel pipelines.
During fiscal 2014, Atmos Energy replaced about
375 miles of distribution pipelines, some 95 miles
of transmission pipelines and approximately 23,000
service lines to customers’ premises.
We plan to replace between 450 and 500 miles of
distribution pipelines, 70 to 90 miles of transmission
pipelines and some 25,000 customer service lines
during fiscal 2015. Replacements of cast iron pipe in
the Mid-Tex Division should increase by one-third,
from about 60 miles in fiscal 2014 to about 80 miles
in fiscal 2015.
FISCAL 2015 PROJECTED PIPELINE REPLACEMENTS
DISTRIBUTION PIPELINES: 450– 500 MILES
CAST IRON
COATED STEEL
VINTAGE PLASTIC
BARE STEEL
SERVICE LINES
TRANSMISSION PIPELINES: 70 –90 MILES
0
50
100
150
200 MILES
ATMOS ENERGY: INVESTING FOR SAFETY
Replacing aging pipelines in communities involves a constant watch
for safety and close coordination with local authorities, emergency
officials and affected customers. In Gretna, Louisiana, a suburb
of New Orleans, Atmos Energy is modernizing its distribution
pipelines in older sections of the city by replacing bare steel pipe
with high-density polyethylene pipe.
Today,
natural gas
utilities spend
more than
$19
B I L L I O N
annually to
help enhance
the safety
of natural
gas delivery
systems.
25,000 SERVICES
7
39
S T A T E S
have adopted
accelerated
infrastructure
replacement
programs.
No matter the material or age of the pipe, replacement crews take
extra precautions to maintain service to surrounding customers, provide
for traffic control and communicate with emergency and city services.
The company has worked since the 1980s to
remove its most vulnerable cast iron pipe, and elimi-
nating the remaining sections is a key component of
our comprehensive infrastructure program.
An American Gas Foundation study found in
2012 that replacing cast iron pipe costs from $1.5
million to $5 million a mile, on average. Replacing
it requires close coordination with all city depart-
ments—streets, water, sewer, police and fire—and
with other utilities that have lines running in the
same corridors.
The majority of the pipeline mileage that Atmos
Energy expects to replace is bare steel. Some 4,000
miles of this bare steel pipe do not have a low-
current flow of electricity around them to stop
corrosion of the metal. Cathodic protection on all
new steel pipelines has been required by federal
regulations since 1970, and it must be installed on
bare steel pipe if any corrosion is ever found.
No matter the material or age of the pipe, replace-
ment crews take extra precautions to maintain service
to surrounding customers, provide for traffic control
and communicate with emergency and city services.
PAYING FOR PROGRESS
Under traditional cost-of-service ratemaking,
utility infrastructure investments are recovered after
the investment is in the ground and the regulator
approves the costs in a rate case. This process, which
originated in the early years of the 20th century, can
cause a long lag between when the company spends
its dollars for infrastructure replacements and when
it begins recovering the investment.
Under traditional ratemaking, when investments
are subject to a long lag time from the investment
to the recovery, the utility must bear the carrying
costs without an opportunity to recover these
prudent expenditures.
That ultimately translates into higher interest
charges and requires a rate case to be filed each year,
a time-consuming and costly activity for the utility
and its customers.
Therefore, timely cost recovery of all prudently
incurred safety and reliability investments is of ut-
most importance to the financial stability of natural
gas utilities.
ATMOS ENERGY CONTINUES TO FOCUS ON MODERNIZING ITS SYSTEM
DISTRIBUTION PIPELINES: 67,000 TOTAL MILES
POLYETHYLENE
PLASTIC
˜10%
COATED STEEL
PLASTIC
CAST
IRON
PROTECTED
BARE STEEL
UNPROTECTED
BARE STEEL
TRANSMISSION PIPELINES: 6,600 TOTAL MILES
ATMOS PIPELINE–TEXAS
5,600 MILES
UTILITY DIVISIONS
1,000 MILES
Atmos Energy inspected about 800 miles of pipelines in fiscal 2014 to ensure their fitness for service as part of our
ongoing integrity management programs. Near Manor, Texas, Project Engineer Tatiana Perry discusses with a
contractor preparations for a hydrostatic pressure test of a 30-inch transmission pipeline. After sealing off a section
of the line, water is pumped in and pressurized to well above the line’s maximum allowable operating pressure and
then is held at that pressure for a minimum of eight hours. Stress testing the pipeline helps assure that it can meet
federal and state regulations and can operate safely even under extreme conditions.
8
9
New or improved infrastructure reduces natural gas leaks, leading to
greater safety and reliability, and it lowers ongoing expenses charged to
customers for operation and maintenance.
INNOVATIVE RATEMAKING
SUPPORTING SUSTAINABILITY
Many utility regulators recognize the need to
promptly, but efficiently, replace aging pipelines
for greater safety as well as the enormous capital
demands that natural gas pipeline operators face.
Today most of the states where Atmos Energy op-
erates allow some form of accelerated rate treatment
for expenses that are outsized, volatile and generally
outside the utility’s control. Rate mechanisms, as
they are called, recover a wide variety of expenses.
Currently, 39 states allow rate mechanisms to
recover replacement costs for natural gas pipelines
and related infrastructure. That’s an increase from
only 11 states that permitted infrastructure improve-
ment mechanisms in 2007.
Infrastructure improvement programs, cost track-
ers, rate surcharges and deferral accounts specifically
allow the recovery of infrastructure investment costs
as they occur. Annual formula ratemaking is more
general with recovery of infrastructure investments,
as well as other costs, between rate cases.
These infrastructure mechanisms promote the
efficient recovery of the largest component in a
natural gas utility’s cost of service without pursuing
contentious rate cases. And, virtually any rate mech-
anism can be reviewed and adjusted in the utility’s
next filed rate case.
As many public officials have concluded, keeping
natural gas distributors financially healthy is vital.
By allowing innovative rate treatment, regulators
balance their duty to treat utility investors fairly and
to ensure that customers receive safe, reliable and
economical service.
In 2013, the National Association of Regulatory
Utility Commissioners (NARUC) essentially ratified
this approach. NARUC passed a resolution “that
state commissions should explore, examine, and
consider adopting alternative rate recovery mecha-
nisms as necessary to accelerate the modernization,
replacement and expansion of the nation’s natural
gas pipeline systems.”
ATMOS ENERGY: INVESTING FOR SAFETY
Regulators are approving alternative recovery mechanisms for natural
gas infrastructure to foster other public policies, too, such as environmental
improvement, energy efficiency and economic development.
New or improved infrastructure reduces natural gas leaks, leading to
greater safety and reliability, and it lowers ongoing expenses charged to cus-
tomers for operation and maintenance.
Leaks reported by natural gas utilities to PHMSA have declined dramatical-
ly since 1991. Leaks on mains declined by 43 percent through 2010, and leaks
on service lines went down 50 percent by 2010.
From 2010 to 2013, Atmos Energy’s leak count fell by 43 percent, which
was three times better than the national average.
When assessing the effects on the environment, natural gas is far superior
to other fossil fuels. Electricity generated with natural gas is about 92 percent
efficient per British thermal unit (Btu), compared with 32 percent efficiency
for coal-fired generation. When comparing the total fuel cycle from wellhead
to burner tip, natural gas comes out far ahead on saving energy and doing
more work per unit of energy consumed.
REGULATED PIPELINE SPANS TEXAS
> 5,600 MILES OF INTRASTATE TRANSMISSION
Granite Wash
Formation
> FIVE STORAGE FACILITIES WITH 46 BILLION
CUBIC FEET OF WORKING GAS CAPACITY
> TRANSPORTED 714 BCF IN FISCAL 2014
Barnett Shale
Permian
Basin
Waha Hub
ATMOS PIPELINE–TEXAS
NATURAL GAS SUPPLY BASINS
Eagle Ford
Shale
Haynesville/
Bossier Shale
Carthage
Hub
Katy Hub
Atmos Pipeline –Texas transports natural gas across the state of Texas primarily to serve our Mid-Tex Division and
other local distribution companies. With continuing economic growth in the state, APT is enhancing its capabilities
in the Waco-to-Austin corridor and other areas to assure high reliability to its customers and to connect new
sources of natural gas at competitive prices.
11
Atmos Energy’s pipeline infrastructure investments are occurring at
an opportune time. Financing costs for both debt and equity have been
favorable. And, the cost of natural gas has remained relatively low.
CO2 AND OTHER EMISSIONS ARE MUCH
LESS WITH NATURAL GAS THAN WITH COAL
COAL
NATURAL GAS
227,052,854
POUNDS OF CO2 PER YEAR
91,743,152
POUNDS OF CO2 PER YEAR
331,545
POUNDS OF NOX PER YEAR
6,273
POUNDS OF NOX PER YEAR
740,450
POUNDS OF SO2 PER YEAR
784
POUNDS OF SO2 PER YEAR
Source: American Clean Skies Foundation
FUELING THE FUTURE
Natural gas is the essential fuel to achieve key
environmental goals of fewer pollutants and cleaner
air. For this reason, major environmental groups
support using more natural gas, especially to replace
coal for generating electricity.
Approximately 28 percent of the electricity in the
United States today is generated at 1,700 natural gas-
fired power plants. Virtually all new power plants
built during the past decade use natural gas for fuel
because of its abundant domestic supply, low cost
and low emissions.
With the rapid retirements of many coal-fired
power plants, natural gas is becoming the country’s
foundation fuel source as well as the backup fuel to
complement renewables development. To supply
more gas-fired power plants, new natural gas pipe-
lines and greater capacity on existing transmission
lines are needed.
The U.S. Energy Information Administration
projects that total natural gas consumption in the
United States will grow from 25 trillion cubic feet
(Tcf) a year today to 30 Tcf by 2040. This growth will
be caused by the increased use of gas
both to generate electricity and to fuel
manufacturing and process industries.
In 2013, for example, Mississippi
allows Atmos Energy to spend up to $5 million a
year on infrastructure expansions to support new
industrial projects and added jobs.
Historically, it has been difficult to justify extend-
ing natural gas pipelines to certain industrial projects
because the initial expected gas volumes and reve-
nues were insufficient to pay for the investment. This
new Mississippi program funds gas infrastructure
investments for their first 10 years in service. Any
new gas revenues generated by the investments will
help recoup the cost of the program, which is being
paid for by customers in Mississippi.
ADVANTAGEOUS TIMING
Atmos Energy’s pipeline infrastructure in-
vestments are occurring at an opportune time.
Financing costs for both debt and equity have been
favorable. And, the cost of natural gas has remained
relatively low.
Because of extremely low interest rates, issu-
ing debt has been very attractive for companies,
like Atmos Energy, that must raise hundreds of
millions of dollars of new capital each year. The
company has taken advantage of this opportunity
not only to refinance its debt issues at lower prices,
but also to lock in a portion of the interest rate on
future debt refinancings.
At the same time, investors have expressed strong
confidence in Atmos Energy’s stock. Accordingly,
the market price of Atmos Energy shares has risen
during the period from October 1, 2010, to October
1, 2014, at a compounded average growth rate of
approximately 13 percent a year.
Atmos Energy has issued more than 10.2 million
shares of common stock during the past four fiscal
years to raise additional capital and to keep its
debt-to-capitalization ratio in balance.
CO2
Natural gas is
the foundation
fuel of our
economy
and meets
27
P E R C E N T
of the nation’s
energy needs
today.
ATMOS ENERGY: INVESTING FOR SAFETY
regulators adopted a policy to en-
courage more expansion of the state’s
natural gas infrastructure to attract
industrial investment and to promote
economic development. The state’s
Public Service Commission approved
a Supplemental Growth Rider that
Brad McDaniel, senior service technician, reviews drawings of
Atmos Energy’s pipeline supplying gas to the new Yokohama Tire
Company plant at West Point, Mississippi. Now in the first phase of a
four-phase expansion program, the complex eventually will employ
2,000 workers and will exceed 100 acres under roof by 2018.
Working with the Mississippi Public Service Commission, Atmos
Energy secured a special economic development rider to help recover
infrastructure costs that support new industry and jobs for the state.
12
ATMOS ENERGY: INVESTING FOR SAFETY
Taking into account our significant future investments to modernize and
expand our infrastructure, we forecast that an average residential
customer’s monthly gas bill should remain below $60 through fiscal 2018.
LOW CONSUMER GAS BILLS
A CONSENSUS OF SUPPORT
Our nation has many reasons to support pipeline
infrastructure investments and many groups in
favor of these programs: natural gas utilities, safety
regulators, gas producers, royalty owners, pipeline
operators, environmental groups, labor unions,
major manufacturers, elected officials, civic leaders
and consumers.
These groups realize that pipeline improvement
programs benefit the American people in so many
ways: public safety, energy reliability, abundant fuel
supplies, environmental improvements, consumer
savings, new jobs and economic development.
For Atmos Energy, our reasons to modernize
and expand our core infrastructure encompass all of
these. Our obligation to serve—safely, reliably and
efficiently—our 1,400 communities and 3 million
customers underlies why we are investing for safety.
By 2015, low
natural gas
prices and an
abundance
of domestic
gas supply
should raise
annual U.S.
disposable
household
income by
$2,000.
ATMOS ENERGY’S AVERAGE RESIDENTIAL CUSTOMER BILL REMAINS
AFFORDABLE EVEN WITH PIPELINE MODERNIZATION INVESTMENTS
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Projected for fiscal years 2015 through 2018, assuming normal weather
North America’s rapidly growing abundance of
natural gas produced from shale formations is keep-
ing gas supplies high and prices low.
The respected Potential Gas Committee’s latest
biennial assessment of the United States’ natural
gas resources found a total available future supply
of 2,688 Tcf—more than a 100-year supply. It is
the largest gas resource evaluation recorded in the
committee’s 48-year history.
Natural gas spot prices since October 2008 have
remained in the range of $3 to $5 per 1,000 cubic
feet (Mcf). By contrast, from 2003 to 2008, weekly
spot prices had fluctuated from a low of about $4.50
to as much as $14.50 per Mcf. The U.S. Department
of Energy forecasts spot prices will stay between $5
and $6 per Mcf through 2023.
As a result, the accelerated recovery of large
pipeline infrastructure investments
is having little effect on America’s
residential gas utility bills, in gener-
al, and on those of Atmos Energy’s
customers, in particular.
Since 2007, our average residen-
tial customer’s monthly bill, on an
annualized basis, has stayed below
$60 and has been among the lowest
household costs. Our average resi-
dential bill in fiscal 2014 was $57.
Taking into account our signifi-
cant future investments to modern-
ize and expand our infrastructure,
we forecast that an average resi-
dential customer’s monthly gas bill
with normal consumption should
remain below $60 through fiscal
2018. Our customers are essentially
receiving significantly increased
value at no increase in cost.
2007
ATMOS ENERGY: INVESTING FOR SAFETY
A precision thermal fuser joins sections of high-density polyethylene
pipe being installed along an Atmos Energy right of way. Advances
in pipeline technology make new pipeline infrastructure not
only much safer, but also more economical. Fused pipe joints are
as strong as the pipe itself and should last for decades to prevent
leaks and lower maintenance costs.
$60
$40
$20
$0
15
To Our Shareholders
Three years ago, we made a sea change in Atmos Energy’s core growth
strategy, and today it is benefiting our investors, customers and communities.
Kim R. Cocklin
President and
Chief Executive Officer
Our strategy had been to grow through
acquisitions of strategically situated natural gas
distribution assets.
As our founding chairman, Charles K.
Vaughan, noted last year on Atmos Energy’s
30th anniversary, had he and the board of
directors not staked out that strategy—one com-
pletely counterintuitive to the rest of the utility
industry at the time—Atmos Energy would not
have survived. The company was a regional gas
utility in West Texas with little or no customer
growth to sustain it.
By diversifying and growing through 10
major acquisitions over two decades, Charlie
and his successor, Bob Best, built one of the
largest and best-managed natural gas utility sys-
tems in the United States. Atmos Energy not only has remained independent,
but also has prospered beyond all expectations. It has expanded into many
states, and its regulated distribution and pipeline operations have produced
steady growth in earnings and dividends.
Today Atmos Energy has amassed such a sound portfolio of integrated assets
that investing in our own operations yields much better returns than acquir-
ing more distribution assets. Our six regulated distribution divisions and our
Texas regulated intrastate pipeline produce stable and predictable results for
our investors, our customers and the communities we serve. Our nonregulated
business also adds value to our portfolio of assets.
Although we do not rule out acquisitions, we are dedicated to growth for the
foreseeable future from investing principally in our regulated assets.
A CLEAR FOCUS
Even more importantly, our growth strategy is designed to advance our goal
of becoming the nation’s safest natural gas utility.
Fortunately, the states we serve began recognizing the need to modernize
infrastructure before the rest of the nation. Legislatures and regulatory author-
ities in our states have promulgated or approved rate design that encourages
investments to replace or fortify infrastructure and significantly reduces the lag
time in recovering those investments.
Today we are recovering and earning on approximately 91 percent of our
infrastructure investments within six months after a test year ends and on 96
percent of our investments within 12 months.
This balanced regulatory treatment resulted in our capital spending in
fiscal 2014 of $835.3 million. Our projected capital investments in fiscal 2015
should be between $900 million and $1.0 billion.
This significant level of capital spending will further our journey toward be-
coming the country’s safest utility and will increase our future shareholder value.
FISCAL 2014 HIGHLIGHTS
$2.96
earnings per diluted share, a
12% increase over fiscal 2013
$1.48
per share annual dividend
15.5%
total shareholder return
$835.3
million in capital expenditures
$134.0
million annual approved operating
income increase from rate activities
6.2%
reduced weighted average cost
of long-term debt
CREDIT UPGRADES
Standard & Poor’s: A-
Moody’s Investor Service: A2
17
Earnings Growth Through Infrastructure Investments and Rate Mechanisms
CONSTRUCTIVE REGULATORY MECHANISMS SUPPORT EFFICIENT CONVERSION
OF OUR RATE-BASE GROWTH OPPORTUNITIES INTO OUR FINANCIAL RESULTS
$900 MILLION TO $1.1 BILLION
IN ANNUAL CAPITAL INVESTMENTS
THROUGH FISCAL 2018
9% –10% COMPOUNDED
AVERAGE GROWTH RATE
CONSTRUCTIVE RATE MECHANISMS
REDUCING REGULATORY LAG
6% TO 8% CONSOLIDATED
EARNINGS-PER-SHARE GROWTH
FISCAL 2015 ESTIMATED CAPITAL RECOVERY
6% –8% INCREASE ANNUALLY
S
R
A
L
L
O
D
F
O
S
N
O
I
L
L
I
B
N
I
E
S
A
B
E
T
A
R
$8.0
$6.0
$4.0
$2.0
$0.0
91%
5%
2012
2018E
EARNING ON INVESTMENT:
WITHIN 0–6 MONTHS
REGULATED PIPELINE
WITHIN 7–12 MONTHS
REGULATED DISTRIBUTION
GREATER THAN 12 MONTHS
2012 2013 2014 2015E 2018E
$4.00
$3.00
$2.00
$1.00
$0.00
EXCEPTIONAL RESULTS
REGULATORY OUTCOMES
In fiscal 2014, we achieved exceptional results that demonstrate
the benefits of our realigned growth strategy.
Consolidated net income increased 19 percent from $243.2
million in fiscal 2013 to $289.8 million in fiscal 2014. Earnings
per diluted share went up 32 cents, from $2.64 in fiscal 2013 to
$2.96 in fiscal 2014. The year-over-year increase marked our 12th
consecutive year of growth in earnings per share.
Dividends paid per share were $1.48, an increase of 8 cents, or
5.7 percent, over the previous year’s dividend. Our payout ratio
of between 50 percent and 55 percent remains below that of most
utilities, allowing for continued annual increases in our dividend.
Total shareholder return in fiscal 2014 was 15.5 percent. Our
three-year total return to shareholders since implementing our
new strategy in fiscal 2012 was 63.8 percent. That compares with
an average shareholder return among 11 “peer” companies during
the same three-year period of 56.4 percent.
As a sign of confidence in the direction the company is headed,
our board of directors in November 2014 increased the annual
dividend again by 8 cents a share. The indicated dividend for fiscal
2015 is $1.56 a share. This marked our 31st consecutive annual
dividend increase.
More than 75 percent of our capital expenditures in fiscal 2014
were dedicated to safety and reliability. Atmos Energy’s total regu-
lated rate base grew by $578.0 million to approximately $4.9 billion.
Our growth strategy is designed to increase the value of our
regulated rate base between 9 percent and 10 percent on a com-
pounded annual basis through fiscal 2018. The timely recovery of
our infrastructure investments and regulated expenses through
constructive regulatory mechanisms is the key driver of our finan-
cial results.
During fiscal 2014, we implemented new rates from 18 filings.
When combined with regulatory deferrals, these rate outcomes
should result in operating income increases of approximately
$134.0 million.
About $115.2 million of these operating income increases
resulted from filings in Texas, where almost 70 percent of our
regulated assets are located.
We forecast adding during the next four fiscal years between
$100 million and $135 million annually in operating income
increases from rate adjustments.
WEATHER EFFECTS
Weather, which was 20 percent colder than normal in fiscal
2014, boosted the earnings of our regulated distribution seg-
ment, regulated pipeline segment and nonregulated segment. Six
of the eight states we serve recorded the coldest heating season in
the past 15 years.
18
The effects of colder weather increased the throughput
for all three operating segments and added about $17.1
million, or 17 cents per diluted share, to fiscal 2014 consol-
idated net income.
Atmos Pipeline–Texas (APT), our intrastate natural gas
transmission and storage system, transported 714 billion
cubic feet of gas during fiscal 2014. APT’s system overlays
the prolific Barnett Shale natural gas basin and reaches other
producing and shale-gas areas. Its pipelines span across Texas
with connections to the state’s three major natural gas hubs
at Waha, Katy and Carthage.
APT has been adding capabilities to transport reliable
and affordable gas supplies to serve primarily our Mid-
Tex Division and other local gas distribution customers in
Texas. These investments also help APT transport natural
gas reliably to new and existing electric power plants and
industrial facilities.
Higher natural gas consumption during fiscal 2014 also
created more volatility in wholesale gas prices.
Our nonregulated segment was able to take great advan-
tage of the market opportunities caused by the wider spreads
in gas prices. Atmos Energy Marketing—which buys, sells
and arranges transportation for large volumes of natural gas
at competitive prices to major customers in some 20 states
and to our own system—nearly tripled its year-over-year
contributions to fiscal 2014 consolidated earnings.
Because we assume a return to normal weather in fiscal
2015, we do not anticipate our nonregulated segment
repeating these results.
FINANCING
To raise additional capital, we sold 9.2 million shares of
our common stock in February 2014 at $44.00 a share. We
used the $390.2 million of net proceeds from the offering to
fund infrastructure improvements, to repay short-term debt
under our commercial paper program and to support other
corporate needs.
In October 2014, we replaced $500 million of maturing
4.95 percent senior notes with $500 million of 4.125 percent
senior notes due October 2044. The issuance will reduce our
weighted average cost of long-term debt and will save about
$8 million annually in interest expense.
We also have taken advantage of historically low interest
rates to lock in Treasury yield components of interest rates
for two planned future refinancings for retiring debt. For
our $250 million of 6.35 percent 10-year senior notes
maturing in June 2017, the Treasury component of the
future issue will effectively be fixed at 3.367 percent. The
Treasury component for refinancing our $450 million of
8.50 percent 10-year senior notes that mature in March 2019
will effectively be fixed at 3.857 percent. The refinancings
will lower our weighted average cost of debt and will extend
weighted average maturities.
At the end of the fiscal year on September 30, 2014, our
balance sheet was strong with a debt-to-total-capitalization
ratio of 46.2 percent. We had nearly $1.2 billion in available
liquidity to meet our expected financial requirements.
Rating agencies have recognized the strengths of our bal-
ance sheet, constructive regulatory outcomes and peer-lead-
ing growth in earnings per share. Our corporate credit
ratings were upgraded during the fiscal year by Moody’s
Investors Service from Baa1 to A2 and by Standard & Poor’s
from BBB+ to A-.
OUTLOOK
We have issued Atmos Energy’s fiscal 2015 earnings
guidance to be between $2.90 and $3.05 per diluted share,
excluding net unrealized margins.
Our capital expenditures for fiscal 2015 through fiscal
2018 are projected to be between $900 million and $1.1
billion annually. We expect to finance this growth through
$800 million to $1.0 billion of incremental financing.
In turn, we forecast that the value of our rate base will
increase at a compounded annual growth rate from fiscal
2012 to fiscal 2018 of between 9 percent and 10 percent,
with a total value by the end of fiscal 2018 of between $7.2
billion and $7.4 billion.
Earnings growth of 6 percent to 8 percent, combined
with a dividend yield in the range of 3 percent, should
provide our shareholders an attractive total annual return
between 9 percent and 11 percent.
Significantly, the approximately $4 billion we plan to
invest in infrastructure improvements during the next four
fiscal years should have little effect on our customers’ total
bills. With delivered natural gas prices forecast to remain
stable in the range of $5 to $6 per 1,000 cubic feet and
assuming normal weather, our average residential customer’s
monthly bill should remain well below $60.
AMERICA’S SAFEST GAS COMPANY
In this annual report, we discuss the significant level of
capital expenditures we are making in all the states we serve
to modernize and expand our natural gas transmission and
delivery system. We are a leader in our industry in pursuing
these improvements and are proud of the exceptional efforts
by our employees to achieve these results.
Our goal is to be the safest natural gas company in
America. It is a continuing journey toward that goal, but we
are fully committed and well on our way to achieving that
distinction. It is a goal that will protect and benefit our
customers, communities, employees and investors for
decades to come.
Kim R. Cocklin
President and Chief Executive Officer
November 24, 2014
19
Financial Highlights
Year Ended September 30 — Dollars in thousands, except per share data
2014
2013
Change
Operating revenues
Gross profit
$ 4,940,916
$ 1,582,426
$ 3,875,460
$ 1,412,050
Regulated distribution net income — continuing operations
Regulated distribution net income — discontinued operations
Regulated pipeline net income
Nonregulated net income — continuing operations
Nonregulated net loss — discontinued operations
Total
Total assets
Total capitalization*
Net income per share from continuing operations — diluted
Net income per share from discontinued operations — diluted
Net income per share — diluted
Cash dividends per share
Book value per share at end of year
Regulated distribution throughput — continuing operations (MMcf)
Regulated distribution throughput — discontinued operations (MMcf)
Consolidated regulated distribution throughput (MMcf)
Consolidated regulated pipeline transportation volumes (MMcf)
Consolidated nonregulated delivered gas sales volumes (MMcf)
Meters in service at end of year
Return on average shareholders’ equity
Shareholders’ equity as a percentage of total capitalization
(including short-term debt) at end of year
Shareholders of record
Weighted average shares outstanding — diluted (000s)
$
$
171,585
—
86,191
32,041
—
289,817
$ 8,594,704
$ 5,542,218
2.96
$
—
$
2.96
$
1.48
$
30.74
$
451,803
—
451,803
493,360
377,441
3,115,069
$
$
150,856
12,851
68,260
11,582
(355)
243,194
$ 7,934,268
$ 5,036,080
2.50
$
0.14
$
2.64
$
1.40
$
28.47
$
392,306
4,731
397,037
467,178
343,669
3,011,980
9.9%
9.7%
53.8%
15,807
97,608
47.8%
16,662
91,711
27.5%
12.1%
13.7%
(100.0)%
26.3%
176.6%
100.0%
19.2%
8.3%
10.1%
18.4%
(100.0)%
12.1%
5.7%
8.0%
15.2%
(100.0)%
13.8%
5.6%
9.8%
3.4%
2.1%
12.6%
(5.1)%
6.4%
*Total capitalization represents the sum of shareholders’ equity and long-term debt, excluding current maturities.
Summary Annual Report
The financial information presented in this report about Atmos Energy Corporation is condensed. Our complete financial statements, including
notes as well as management’s discussion and analysis of our financial condition and results of operations, are presented in our Annual Report
on Form 10-K. Atmos Energy’s chief executive officer and its chief financial officer have executed all certifications with respect to the financial
statements contained therein and have completed management’s report on internal control over financial reporting, which are required under the
Sarbanes-Oxley Act of 2002 and related rules and regulations of the Securities and Exchange Commission. Investors may request, without charge,
our Annual Report on Form 10-K for the fiscal year ended September 30, 2014, by calling Investor Relations at 972-855-3729 between 8 a.m. and
5 p.m. Central time. Our Annual Report on Form 10-K also is available on Atmos Energy’s website at www.atmosenergy.com. Additional investor
information is presented on pages 31 and 32 of this report.
Natural gas pipeline operators are benefiting from significant
improvements in both plastic and steel pipe. High-density polyeth-
ylene pipe is now being used for many duties that had required the
tensile strength and pressure capacity of metal. Equally important,
advances in alloys, coatings and manufacturing methods are
producing coated-steel pipe that is even stronger and more resistant
to corrosion. As a result, replacement and expansion pipelines now
being installed by Atmos Energy and other pipeline operators should
be safer, last longer and require less maintenance.
21
Atmos Energy at a Glance
Year Ended September 30
2014
2013
Meters in service
Residential
Commercial
Industrial
Public authority and other
Total meters
Heating degree days*
Actual (weighted average)
Percent of normal
Regulated distribution sales volumes — continuing operations (MMcf)
Residential
Commercial
Industrial
Public authority and other
Total
Regulated distribution transportation volumes — continuing operations (MMcf)
Total regulated distribution throughput — continuing operations (MMcf)
Regulated distribution sales volumes — discontinued operations (MMcf)
Regulated distribution transportation volumes — discontinued operations (MMcf)
Intersegment activity (MMcf)
Consolidated regulated distribution throughput (MMcf)
Consolidated regulated pipeline transportation volumes (MMcf)
Consolidated nonregulated delivered gas sales volumes (MMcf)
Operating revenues (000s)
Regulated distribution sales revenues
Residential
Commercial
Industrial
Public authority and other
Total regulated distribution sales revenues
Transportation revenues
Other gas revenues
Total regulated distribution revenues
Regulated pipeline revenues
Nonregulated revenues
Total operating revenues (000s)
Other statistics
Gross plant (000s)
Net plant (000s)
Miles of pipe
Employees
* Heating degree days are adjusted for service areas with weather-normalized operations.
2,846,664
258,404
1,530
8,471
3,115,069
2,755,831
244,652
1,500
9,997
3,011,980
2,685
102%
2,729
103%
187,431
105,074
15,746
9,069
317,320
147,776
465,096
—
—
(13,293)
451,803
493,360
377,441
$ 1,933,099
876,042
90,536
64,779
2,964,456
64,049
27,707
3,056,212
92,166
1,792,538
$ 4,940,916
$ 8,447,700
$ 6,725,906
73,248
4,761
154,823
88,850
15,678
9,811
269,162
136,357
405,519
3,611
1,120
(13,213)
397,037
467,178
343,669
$ 1,512,495
661,930
81,155
60,557
2,316,137
55,938
22,343
2,394,418
89,011
1,392,031
$ 3,875,460
$ 7,722,019
$ 6,030,655
72,884
4,720
22
Condensed Consolidated Balance Sheets
Year Ended September 30 — Dollars in thousands, except share data
2014
2013
Assets
Property, plant and equipment
Construction in progress
Less accumulated depreciation and amortization
Net property, plant and equipment
Current assets
Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of
$23,992 in 2014 and $20,624 in 2013
Gas stored underground
Other current assets
Total current assets
Goodwill
Deferred charges and other assets
Capitalization and Liabilities
Shareholders’ equity
Common stock, no par value (stated at $.005 per share);
200,000,000 shares authorized; issued and outstanding:
2014 – 100,388,092 shares, 2013 – 90,640,211 shares
Additional paid-in capital
Accumulated other comprehensive income (loss)
Retained earnings
Shareholders’ equity
Long-term debt
Total capitalization
Current liabilities
Accounts payable and accrued liabilities
Other current liabilities
Short-term debt
Total current liabilities
Deferred income taxes
Regulatory cost of removal obligation
Pension and postretirement liabilities
Deferred credits and other liabilities
$ 8,200,121
247,579
8,447,700
1,721,794
6,725,906
$ 7,446,272
275,747
7,722,019
1,691,364
6,030,655
42,258
66,199
343,400
278,917
111,265
775,840
742,029
350,929
$ 8,594,704
301,992
244,741
64,201
677,133
741,363
485,117
$ 7,934,268
$
502
2,180,151
(12,393)
917,972
3,086,232
2,455,986
5,542,218
311,604
402,351
196,695
910,650
1,286,616
445,387
340,963
68,870
$ 8,594,704
$
453
1,765,811
38,878
775,267
2,580,409
2,455,671
5,036,080
241,611
368,891
367,984
978,486
1,164,053
359,299
358,787
37,563
$ 7,934,268
23
Condensed Consolidated Statements of Income
Year Ended September 30 — Dollars in thousands, except per share data
2014
2013
2012
Operating revenues
Regulated distribution segment
Regulated pipeline segment
Nonregulated segment
Intersegment eliminations
Purchased gas cost
Regulated distribution segment
Regulated pipeline segment
Nonregulated segment
Intersegment eliminations
Gross profit
Operating expenses
Operation and maintenance
Depreciation and amortization
Taxes, other than income
Asset impairments
Total operating expenses
Operating income
Miscellaneous expense, net
Interest charges
Income from continuing operations before income taxes
Income tax expense
Income from continuing operations
Income from discontinued operations, net of tax ($0, $3,986 and $10,066)
Gain on sale of discontinued operations, net of tax ($0, $2,909 and $3,519)
Net income
Basic earnings per share
Income per share from continuing operations
Income per share from discontinued operations
Net income per share — basic
Diluted earnings per share
Income per share from continuing operations
Income per share from discontinued operations
Net income per share — diluted
Weighted average shares outstanding:
Basic
Diluted
$ 3,061,546
318,459
2,067,292
(506,381)
4,940,916
$ 2,399,493
268,900
1,587,914
(380,847)
3,875,460
$ 2,145,330
247,351
1,348,982
(305,501)
3,436,162
1,885,031
—
1,979,337
(505,878)
3,358,490
1,582,426
505,154
253,987
211,936
—
971,077
611,349
(5,235)
129,295
476,819
187,002
289,817
—
—
289,817
2.96
—
2.96
2.96
—
2.96
$
$
$
$
$
1,318,257
—
1,524,583
(379,430)
2,463,410
1,412,050
488,020
235,079
187,072
—
910,171
501,879
(197)
128,385
373,297
142,599
230,698
7,202
5,294
243,194
2.54
0.14
2.68
2.50
0.14
2.64
1,122,587
—
1,293,858
(304,022)
2,112,423
1,323,739
453,613
237,525
181,073
5,288
877,499
446,240
(14,644)
141,174
290,422
98,226
192,196
18,172
6,349
216,717
2.12
0.27
2.39
2.10
0.27
2.37
$
$
$
$
$
$
$
$
$
$
97,606
97,608
90,533
91,711
90,150
91,172
24
Condensed Consolidated Statements of Cash Flows
Year Ended September 30 — Dollars in thousands
2014
2013
2012
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash
provided by operating activities:
Asset impairments
Gain on sale of discontinued operations
Depreciation and amortization:
Charged to depreciation and amortization
Charged to other accounts
Deferred income taxes
Stock-based compensation
Debt financing costs
Other
Changes in assets and liabilities
Net cash provided by operating activities
Cash Flows Used in Investing Activities
Capital expenditures
Proceeds from the sale of discontinued operations
Other, net
Net cash used in investing activities
Cash Flows from Financing Activities
Net increase (decrease) in short-term debt
Net proceeds from issuance of long-term debt
Net proceeds from equity offering
Settlement of Treasury lock agreements
Repayment of long-term debt
Cash dividends paid
Repurchase of common stock
Repurchase of equity awards
Issuance of common stock
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
$
289,817
$
243,194
$
216,717
—
—
253,987
969
189,952
25,531
9,409
(428)
(29,251)
739,986
(835,251)
—
(2,325)
(837,576)
(165,865)
—
390,205
—
—
(146,248)
—
(8,717)
4,274
73,649
(23,941)
66,199
42,258
$
—
(8,203)
236,928
679
141,336
17,814
8,480
(2,887)
(24,214)
613,127
(845,033)
153,023
(4,904)
(696,914)
(208,070)
493,793
—
(66,626)
(131)
(128,115)
—
(5,150)
46
85,747
1,960
64,239
66,199
$
5,288
(9,868)
246,093
484
104,319
19,222
8,147
(493)
(2,992)
586,917
(732,858)
128,223
(4,625)
(609,260)
354,141
—
—
—
(257,034)
(125,796)
(12,535)
(5,219)
1,606
(44,837)
(67,180)
131,419
64,239
$
25
Report of Independent Registered Public Accounting Firm on Condensed Financial Statements
The Board of Directors and Shareholders of Atmos Energy Corporation
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of Atmos Energy Corporation at September 30, 2014 and 2013, and the
related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each
of the three years in the period ended September 30, 2014 (not presented separately herein); and in our report
dated November 6, 2014, we expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed consolidated financial statements
as of September 30, 2014 and 2013 and for each of the three years in the period ended September 30, 2014
(presented on pages 23 through 25) is fairly stated, in all material respects, in relation to the consolidated
financial statements from which it has been derived.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the effectiveness of Atmos Energy Corporation’s internal control over financial reporting as
of September 30, 2014, based on criteria established in Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated
November 6, 2014 (not presented separately herein) expressed an unqualified opinion thereon.
Dallas, Texas
November 6, 2014
26
Condensed Financial and Statistical Summary 2010–2014
Year Ended September 30
2014
2013
2012
2011
2010
Balance Sheet Data at September 30 (000s)
Capital expenditures
Net property, plant and equipment
Working capital
Total assets
Shareholders’ equity
Long-term debt, excluding current maturities
Total capitalization
Income Statement Data
Operating revenues (000s)
Gross profit (000s)
Income from continuing operations (000s)
Income from discontinued operations, net of tax (000s)
Net income (000s)
Income per share from continuing operations—diluted
Income per share from discontinued operations—diluted
Net income per diluted share
Common Stock Data
Shares outstanding (000s)
End of year
Weighted average—diluted
Cash dividends per share
Shareholders of record
Market price— High
Low
End of year
Book value per share at end of year
Price/Earnings ratio at end of year
Market/Book ratio at end of year
Annualized dividend yield at end of year
Customers and Volumes (as metered)
Consolidated regulated distribution sales
volumes (MMcf)
Consolidated regulated distribution transportation
volumes (MMcf)
Consolidated regulated distribution throughput (MMcf)
Consolidated regulated pipeline transportation
volumes (MMcf)
Consolidated nonregulated delivered gas
sales volumes (MMcf)
Meters in service at end of year
Regulated distribution average cost of gas per Mcf sold
Regulated distribution average transportation fee per Mcf
Statistics
Return on average shareholders’ equity
Number of employees
Net regulated distribution plant per meter
Regulated distribution operation and maintenance
expense per meter
Meters per employee—regulated distribution
Times interest earned before income taxes
$ 835,251
6,725,906
(134,810)
8,594,704
3,086,232
2,455,986
5,542,218
$ 4,940,916
1,582,426
289,817
—
289,817
2.96
—
2.96
$
$
$
$
$
100,388
97,608
1.48
15,807
53.40
41.08
47.70
30.74
16.11
1.55
3.1%
$
845,033
6,030,655
(301,353)
7,934,268
2,580,409
2,455,671
5,036,080
$
732,858
5,475,604
(447,992)
7,495,675
2,359,243
1,956,305
4,315,548
$ 3,875,460
1,412,050
230,698
12,496
243,194
2.50
0.14
2.64
$ 3,436,162
1,323,739
192,196
24,521
216,717
2.10
0.27
2.37
$
$
$
$
$
90,640
91,711
1.40
16,662
45.19
33.20
42.59
28.47
16.13
1.50
3.3%
$
$
$
$
$
90,240
91,172
1.38
17,775
36.94
30.60
35.79
26.14
15.10
1.37
3.9%
$
$
$
$
$
$
$
622,965
5,147,918
143,355
7,282,871
2,255,421
2,206,117
4,461,538
4,286,435
1,300,820
189,588
18,013
207,601
2.07
0.20
2.27
$
542,636
4,793,075
(290,887)
6,763,791
2,178,348
1,809,551
3,987,899
$ 4,661,060
1,314,136
189,851
15,988
205,839
2.03
0.17
2.20
90,296
90,652
1.36
18,680
34.98
28.87
32.45
24.98
14.30
1.30
4.2%
$
$
$
$
$
90,164
92,422
1.34
19,738
30.06
26.41
29.25
24.16
13.30
1.21
4.6%
317,320
272,773
255,725
289,927
322,628
134,483
451,803
124,264
397,037
135,258
390,983
134,093
424,020
131,547
454,175
493,360
467,178
466,527
435,012
428,599
377,441
3,115,069
5.94
$
0.47
$
$
$
9.9%
4,761
1,670
124
679
4.63
$
$
$
$
343,669
3,011,980
4.91
0.45
9.7%
4,720
1,567
126
662
4.01
$
$
$
$
351,628
3,116,589
4.64
0.43
9.3%
4,759
1,468
118
680
3.27
$
$
$
$
384,799
3,213,191
5.30
0.46
9.1%
4,949
1,362
111
676
3.13
$
$
$
$
353,853
3,186,040
5.77
0.46
9.1%
4,913
1,243
114
676
3.09
27
Atmos Energy Officers
Senior Management Team
Regulated Divisions
Kim R. Cocklin
President and
Chief Executive Officer
Bret J. Eckert
Senior Vice President and
Chief Financial Officer
Louis P. Gregory
Senior Vice President,
General Counsel and
Corporate Secretary
Michael E. Haefner
Senior Vice President,
Human Resources
Marvin L. Sweetin
Senior Vice President,
Utility Operations
28
J. Kevin Akers
President,
Kentucky/Mid-States Division
Richard A. Erskine
President,
Atmos Pipeline–Texas Division
David E. Gates
President,
Mississippi Division
Gary W. Gregory
President,
Colorado-Kansas Division
Tom S. Hawkins, Jr.
President,
Louisiana Division
John A. Paris
President,
Mid-Tex Division
David J. Park
President,
West Texas Division
J. Kevin Akers
President,
Kentucky/Mid-States Division
Richard A. Erskine
President,
Atmos Pipeline–Texas Division
David E. Gates
President,
Mississippi Division
Gary W. Gregory
President,
Colorado-Kansas Division
Tom S. Hawkins, Jr.
President,
Louisiana Division
John A. Paris
President,
Mid-Tex Division
David J. Park
President,
West Texas Division
Atmos Energy Officers
Nonregulated Operations
Shared Services (continued)
Mark S. Bergeron
President,
Atmos Energy Holdings, Inc.
Shared Services
Verlon R. Aston, Jr.
Vice President,
Governmental and
Public Affairs
Clay C. Cash
Vice President,
Customer Service
Conrad E. Gruber
Vice President,
Strategic Planning
Kenneth M. Malter
Vice President,
Gas Supply and Services
John S. McDill
Vice President,
Pipeline Safety
Edward Pace McDonald IV
Vice President, Tax
Christopher T. Forsythe
Vice President and Controller
Daniel M. Meziere
Vice President and Treasurer
Susan K. Giles
Vice President,
Investor Relations
Richard J. Gius
Vice President and
Chief Information Officer
29
Board of Directors
R
Robert W. Best
Kim R. Cocklin
Richard W. Douglas
Ruben E. Esquivel
Chairman of the Board,
Atmos Energy Corporation
Dallas, Texas
Board member since 1997
Committee: Executive
(Chair)
President and
Chief Executive Officer,
Atmos Energy Corporation
Dallas, Texas
Board member since 2009
Executive Vice President,
Jones Lang LaSalle LLC
Dallas, Texas
Board member since 2007
Committees: Human
Resources, Nominating and
Corporate Governance,
Work Session/Annual Meeting
Vice President for
Community and Corporate
Relations, UT Southwestern
Medical Center
Dallas, Texas
Board member since 2008
Committees: Audit,
Human Resources
Richard K. Gordon
Robert C. Grable
Dr. Thomas C. Meredith
Nancy K. Quinn
General Partner,
Juniper Capital LP and
Juniper Energy LP
Houston, Texas
Board member since 2001
Committees: Human
Resources (Chair),
Executive, Nominating and
Corporate Governance
Partner, Kelly Hart &
Hallman LLP
Fort Worth, Texas
Board member since 2009
Committees: Audit,
Human Resources,
Work Session/Annual Meeting
President, Effective
Leadership LLC
Oxford, Mississippi
Board member since 1995
Committees: Work Session/
Annual Meeting (Chair),
Executive, Human Resources,
Nominating and Corporate
Governance
Independent Energy
Consultant
Key Biscayne, Florida
Board member since 2004
Lead Director since 2013
Committees: Audit (Chair),
Executive, Nominating and
Corporate Governance
Richard A. Sampson
Stephen R. Springer
Richard Ware II
Charles K. Vaughan
General Partner and Founder,
RS Core Capital, LLC
Denver, Colorado
Board member since 2012
Committees: Audit,
Human Resources
Retired Senior Vice President
and General Manager,
Midstream Division,
The Williams Companies, Inc.
Fort Myers Beach, Florida
Board member since 2005
Committee: Work Session/
Annual Meeting
Chairman and President,
Amarillo National Bank
Amarillo, Texas
Board member since 1994
Committees: Nominating
and Corporate Governance
(Chair), Audit,
Executive, Work Session/
Annual Meeting
Honorary Director,
Retired Chairman
of the Board and
Retired Lead Director,
Atmos Energy Corporation
Dallas, Texas
Board member from
1983 to 2012
30
Corporate Information
Common Stock Listing
New York Stock Exchange. Trading symbol: ATO
Stock Transfer Agent and Registrar
American Stock Transfer & Trust Company, LLC
Operations Center
6201 15th Avenue
Brooklyn, New York 11219
800-543-3038
To inquire about your Atmos Energy common stock, please call AST
at the telephone number above. You may use the agent’s interactive
voice response system 24 hours a day to learn about transferring stock
or to check your recent account activity, all without the assistance of
a customer service representative. Please have available your Atmos
Energy shareholder account number and your Social Security or federal
taxpayer ID number.
To speak to an AST customer service representative, please call the
same number between 8 a.m. and 8 p.m. Eastern time, Monday through
Thursday, or 8 a.m. to 5 p.m. Eastern time on Friday.
You also may send an email message on our transfer agent’s website
at www.amstock.com. Please refer to Atmos Energy in your email
message and include your Atmos Energy shareholder account number.
Independent Registered Public Accounting Firm
Ernst & Young LLP
One Victory Park
Suite 2000
2323 Victory Avenue
Dallas, Texas 75219
214-969-8000
Form 10-K
Atmos Energy Corporation’s Annual Report on Form 10-K is available at
no charge from Investor Relations, Atmos Energy Corporation, P.O. Box
650205, Dallas, Texas 75265-0205 or by calling 972-855-3729 between
8 a.m. and 5 p.m. Central time. Atmos Energy’s Form 10-K also may be
viewed on Atmos Energy’s website at www.atmosenergy.com.
Annual Meeting of Shareholders
The 2015 Annual Meeting of Shareholders will be held at the Charles K.
Vaughan Center, 3697 Mapleshade Lane, Plano, Texas 75075 on Wednes-
day, February 4, 2015, at 9:00 a.m. Central time.
Direct Stock Purchase Plan
Atmos Energy has a Direct Stock Purchase Plan that is available to all
investors. For an Enrollment Application Form and a Plan Prospectus,
please call AST at 800-543-3038. The Prospectus is also available at
www.atmosenergy.com. You may also obtain information by writing to
Investor Relations, Atmos Energy Corporation, P.O. Box 650205, Dallas,
Texas 75265-0205.
This is not an offer to sell, or a solicitation to buy, any securities of
Atmos Energy Corporation. Shares of Atmos Energy common stock
purchased through the Direct Stock Purchase Plan will be offered only
by Prospectus.
Atmos Energy on the Internet
Information about Atmos Energy is available on the Internet at www.
atmosenergy.com. Our website includes news releases, current and
historical financial reports, other investor data, corporate governance
documents, management biographies, customer information and facts
about Atmos Energy’s operations.
Atmos Energy Corporation Contacts
To contact Atmos Energy’s Investor Relations, call 972-855-3729
between 8 a.m. and 5 p.m. Central time or send an email message to
InvestorRelations@atmosenergy.com.
Securities analysts and investment managers, please contact:
Susan K. Giles
Vice President, Investor Relations
972-855-3729 (voice) 972-855-3040 (fax)
InvestorRelations@atmosenergy.com
31
Forward-looking Statements
The matters discussed or incorporated by reference in this Summary Annual Report 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 report are for-
ward-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 report or any other
of the Company’s 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 for-
ward-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 report. These risks and uncertainties are discussed in
the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2014. 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. Further, the Company undertakes
no obligation to update or revise any of its forward-looking statements, whether as a result of new information,
future events or otherwise.
Other Information
You can view this Summary Annual Report, our Annual Report on Form 10-K and other financial documents for
fiscal 2014 and previous years at www.atmosenergy.com.
If you are a shareholder who would like to receive our Summary Annual Report and other company documents
electronically in the future, please sign up for electronic distribution. It’s convenient and easy, and it saves the costs
to produce and distribute these materials.
To receive these documents by electronic delivery next year, please visit www.atmosenergy.com or www.proxyvote.
com to give your consent. Please remember that accessing our Summary Annual Report and other company docu-
ments over the Internet may result in charges to you from your Internet service provider or telephone company.
© 2014 Atmos Energy Corporation. All rights reserved.
Atmos Energy® is a registered trademark of Atmos Energy Corporation.
Cover: Texas State Highway Loop 12, the inner beltway surrounding Dallas, is among the busiest transportation
corridors in the Dallas-Fort Worth Metroplex. Beneath the highway lies another major transportation artery, Atmos
Energy’s Line DT-3. This 24-inch pipeline transports natural gas for thousands of homes and businesses in the Dal-
las central business district, the I-35 corridor, Irving, Las Colinas, Arlington, Grand Prairie and the Mid-Cities. It also
provides essential pressure control for the region and lets us dispatch gas supplies either north or south, depending
on our customers’ demands. All DT-3 pipe and related facilities in Irving and Las Colinas are being replaced by
fiscal 2016 to ensure long-term safety and reliability. It is one of Atmos Energy’s major multi-year pipeline projects.
Page 16: Phil Watkins (left), project manager and senior engineer, and Roy Moss, a district operations manager,
survey an inventory of 30-inch coated steel pipe that will be installed during fiscal 2015. Along with related 24-inch
and 12-inch transmission projects, the new pipelines will fortify Atmos Pipeline–Texas’ capabilities to transport
natural gas from two of its natural gas storage fields to meet the growing needs of the Mid-Tex Division and other
Atmos Pipeline–Texas customers. The total project will cost an estimated $200 million to $230 million.
Opposite: Near the beautiful Sabine National Forest in western Louisiana, 2.5 miles of 6-inch advanced polyeth-
ylene pipeline is being installed to replace a bare steel main that serves the city of Many. The project is one of many
under way today in our Louisiana Division to replace aging pipelines. It is the result of the Louisiana Public Service
Commission authorizing in June 2014 an infrastructure deferral mechanism for safety and reliability projects.
32
Atmos Energy Corporation
P.O. Box 650205
Dallas, Texas 75265-0205
atmosenergy.com