Atmos Energy (ATO) 10-K risk factor changes: FY2017 vs FY2016

Our long-term debt is currently rated as “investment grade” by Standard & Poor’s [removed: Corporation,] [added: Corporation and] Moody’s Investors Service, Inc. [removed: and Fitch Ratings, Ltd.] Similar to most companies, we rely upon access to both short-term and long-term credit and capital markets to satisfy our liquidity requirements.

If adverse credit conditions were to cause a significant limitation on our access to the private [added: credit] and public capital markets, we could see a reduction in our liquidity.

A significant reduction in our liquidity could in turn trigger a negative change in our ratings outlook or even a reduction in our credit ratings by one or more of the [removed: three] credit rating agencies.

[removed: Our regulated distribution and regulated pipeline segments] [added: We] are subject to regulatory oversight from various state and local regulatory authorities in the eight states that we [removed: serve in our regulated distribution and pipeline segments.][added: serve.]

As a result, our customers could seek to use [removed: even] less gas and make it more difficult for them to pay their gas bills.

This, in turn, [removed: would probably] [added: could] increase our financing requirements.

We have a process in place to continually review the adequacy of our [removed: distribution] gas rates in relation to the increasing cost of providing service and the inherent regulatory lag in adjusting those gas rates.

If we are unable to obtain these, either from our suppliers’ inability to deliver [added: the contracted commodity or the inability to secure replacement quantities, our financial condition and results of operations may be adversely affected.]

[removed: Our regulated operations] [added: We] are generally insulated from commodity price risk through [removed: its] [added: our] purchased gas cost mechanisms.

However, increases in interest rates could adversely affect our future financial [removed: results.][added: results to the extent that we do not recover our actual interest expense in our rates.]

The concentration of our [removed: distribution, pipeline and storage] operations in the State of Texas exposes our operations and financial results to economic conditions, weather patterns and regulatory decisions in Texas.

Over 50 percent of our [removed: regulated] distribution customers and most of our [removed: regulated] pipeline [added: and storage] assets and operations are located in the State of Texas.

In residential and commercial customer markets, our [removed: regulated] distribution operations compete with other energy products, such as electricity and propane.

Our [removed: regulated] pipeline [added: and storage] operations historically have faced limited competition from other existing intrastate pipelines and gas marketers seeking to provide or arrange transportation, storage and other services for customers.

We have weather-normalized rates for over 95 percent of our residential and commercial meters in our [removed: regulated] distribution [removed: business,] [added: operations,] which substantially mitigates the adverse effects of warmer-than-normal weather for meters in those service areas.

In addition, our [removed: regulated distribution and regulated pipeline] operating results may continue to vary somewhat with the actual temperatures during the winter heating season.

Additionally, sustained cold weather could challenge our ability to adequately meet customer demand in our [removed: natural gas distribution and pipeline and storage] operations.

In addition, we must continually build new capacity [removed: in our regulated distribution and regulated pipeline operations] to serve the growing needs of the communities we serve.

The liquidity required to fund our [added: working capital,] capital expenditures and other cash needs is provided from a [removed: variety] [added: combination] of [removed: sources, including our] [added: internally generated] cash flows [removed: from operations, borrowings under our short-term lending facilities, and, from time to time, funds raised from the public] [added: and external] debt and equity [removed: capital markets.][added: financing.]

The impact of additional costs which are likely to be passed on to the Company [removed: are] [added: is] difficult to measure at this time.

We constantly monitor and maintain our pipeline and distribution [removed: system] [added: systems] to ensure that natural gas is delivered safely, reliably and efficiently through our network of more than [removed: 72,000] [added: 75,000] miles of pipeline and distribution lines.

FERC has regulatory authority over some of our operations, including [removed: sales of natural gas in] the [removed: wholesale gas market and the] use and release of interstate pipeline and storage capacity.

FERC has adopted rules designed to prevent market power abuse and market manipulation and to promote compliance with FERC’s other rules, policies and orders by companies engaged in the [added: sale, purchase, transportation or storage of natural gas in interstate commerce.]

The operations and financial results of the Company could be adversely impacted as a result of climate [removed: changes] [added: change] or related additional legislation or regulation in the future.

To the extent climate [removed: changes occur,] [added: change occurs,] our businesses could be adversely impacted, although we believe it is likely that any such resulting impacts would occur very gradually over a long period of time and thus would be difficult to quantify with any degree of specificity.

To the extent climate [removed: changes] [added: change] would result in warmer temperatures in our service territories, financial results could be adversely affected through lower gas volumes and revenues.

Such climate [removed: changes] [added: change] could also cause shifts in population, including customers moving away from our service territories near the Gulf Coast in Louisiana and Mississippi.

Our [removed: regulated distribution and regulated pipeline businesses] [added: operations] involve a number of hazards and operating risks that cannot be completely avoided, such as leaks, accidents and operational problems, which could cause loss of human life, as well as substantial financial losses resulting from property damage, damage to the environment and to our operations.

However, because some of our [removed: pipeline, storage] [added: transmission pipeline] and [removed: distribution] [added: storage] facilities are near or are in populated areas, any loss of human life or adverse financial results resulting from such events could be large.

We use our information technology systems to manage our distribution and intrastate pipeline [added: and storage] operations and other business processes.

Disruption of those systems could adversely impact our ability to safely deliver natural gas to our customers, operate our pipeline [added: and storage] systems or serve our customers timely.

Our operations are capital-intensive.

Further, if our credit ratings were downgraded, we could be required to provide additional liquidity to our nonregulated segment because the commodity financial instrument markets could become unavailable to us.

Our nonregulated segment depends primarily upon an intercompany lending facility between AEH and Atmos Energy to finance its working capital needs, supplemented by two small credit facilities with outside lenders.

Our ability to provide this liquidity to AEH for our nonregulated operations is limited by the terms of the lending arrangement with AEH, which is subject to annual approval by one state regulatory commission.

the contracted commodity or the inability to secure replacement quantities, our financial condition and results of operations may be adversely affected.

Although our nonregulated operations represent only about five percent of our consolidated financial results, commodity price volatility experienced in this business segment could lead to some minor volatility in our earnings.

Our nonregulated segment manages margins and limits risk exposure on the sale of natural gas inventory or the offsetting fixed-price purchase or sale commitments for physical quantities of natural gas through the use of a variety of financial instruments.

However, contractual limitations could adversely affect our ability to withdraw gas from storage, which could cause us to purchase gas at spot prices in a rising market to obtain sufficient volumes to fulfill customer contracts.

We could also realize financial losses on our efforts to limit risk as a result of volatility in the market prices of the underlying commodities or if a counterparty fails to perform under a contract.

Finally, within our nonregulated operations, AEM competes with other natural gas marketers to provide natural gas management and other related services primarily to smaller customers requiring higher levels of balancing, scheduling and other related management services.

AEM has experienced increased competition in recent years from competitors who offer lower cost, basic services.

Sustained cold weather could adversely affect our nonregulated operations as we may be required to purchase gas at spot rates in a rising market to obtain sufficient volumes to fulfill some customer contracts.

The regulated natural gas distribution and pipeline business is capital-intensive.

sale, purchase, transportation or storage of natural gas in interstate commerce.

These risks and uncertainties include the following: our ability to continue to access the credit [added: and capital] markets to satisfy our liquidity requirements; regulatory trends and decisions, including the impact of rate proceedings before various state regulatory commissions; the impact of adverse economic conditions on our customers; the effects of inflation and changes in the availability and price of natural gas; the availability and accessibility of contracted gas supplies, interstate pipeline and/or storage services; market risks beyond our control affecting our risk management activities, including commodity price volatility, counterparty creditworthiness or performance and interest rate risk; the concentration of our [removed: distribution,] [added: distribution and] pipeline and storage operations in Texas; increased competition from energy suppliers and alternative forms of energy; adverse weather conditions; the capital-intensive nature of our [removed: regulated] distribution [removed: business;] [added: and pipeline and storage businesses;] increased costs of providing health care benefits along with pension and postretirement health care benefits and increased funding requirements; the inability to continue to hire, train and retain appropriate personnel; possible increased federal, state and local regulation of the safety of our operations; increased federal regulatory oversight and potential penalties; the impact of environmental regulations on our business; the impact of climate [removed: changes] [added: change] or related additional legislation or regulation in the future; the inherent hazards and risks involved in operating our distribution and pipeline and storage businesses; the threat of cyber-attacks or acts of cyber-terrorism that could disrupt our business operations and information technology systems; natural disasters, terrorist activities or other events and other risks and uncertainties discussed herein, all of which are difficult to predict and many of which are beyond our control.

Our significant accounting policies are discussed in [removed: Note] [added: Notes] 2 [added: and 15] to our consolidated financial statements.

| Regulation | Our [removed: regulated] distribution and pipeline operations meet the criteria of a cost-based, rate-regulated entity under accounting principles generally accepted in the United States. Accordingly, the financial results for these operations reflect the effects of the ratemaking and accounting practices and policies of the various regulatory commissions to which we are subject. As a result, certain costs that would normally be expensed under accounting principles generally accepted in the United States are permitted to be capitalized or deferred on the balance sheet because it is probable they can be recovered through rates. Further, regulation may impact the period in which revenues or expenses are recognized. The amounts expected to be recovered or recognized are based upon historical experience and our understanding of the regulations. Discontinuing the application of this method of accounting for regulatory assets and liabilities or changes in the accounting for our various regulatory mechanisms could significantly increase our operating expenses as fewer costs would likely be capitalized or deferred on the balance sheet, which could reduce our net income. | Decisions of regulatory authorities Issuance of new regulations or regulatory mechanisms Assessing the probability of the recoverability of deferred costs Continuing to meet the criteria of a cost-based, rate regulated entity for accounting purposes |

| Unbilled Revenue | We follow the revenue accrual method of accounting for [removed: regulated] distribution segment revenues whereby revenues attributable to gas delivered to customers, but not yet billed under the cycle billing method, are estimated and accrued and the related costs are charged to expense. [removed: On occasion,] [added: When permitted,] we [removed: are permitted to] implement [removed: new] rates that have not been formally approved by our regulatory authorities, [removed: which are] subject to [removed: refund. We] [added: refund.We] recognize this revenue and establish a reserve for amounts that could be refunded based on our experience for the jurisdiction in which the rates were implemented. | Estimates of delivered sales volumes based on actual tariff information and weather information and estimates of customer consumption and/or behavior Estimates of purchased gas costs related to estimated deliveries Estimates of [removed: uncollectible] amounts billed subject to refund |

Atmos Energy [removed: Corporation] strives to operate [removed: its] [added: our] businesses safely and reliably while delivering superior shareholder value.

This trend continued during fiscal [removed: 2016] [added: 2017] as net income increased to [removed: $350.1] [added: $396.4] million, or [removed: $3.38] [added: $3.73] per diluted share for the year ended September 30, [removed: 2016,] [added: 2017,] compared with net income of [removed: $315.1] [added: $350.1] million or [removed: $3.09] [added: $3.38] per diluted share in the prior year.

The year-over-year increase largely reflects positive rate outcomes, which more than offset weather that was [removed: 25] [added: 12] percent warmer than the prior [removed: year and increased pipeline maintenance and integrity spending.][added: year.]

Capital expenditures for fiscal [removed: 2016] [added: 2017] totaled [removed: $1,087.0] [added: $1,137.1] million.

Fiscal [removed: 2015] [added: 2016 and 2017] spending under these and other mechanisms enabled the Company to complete [removed: 20] [added: 19] regulatory filings during fiscal [removed: 2016] [added: 2017] that should increase annual operating income from regulated operations by [removed: $122.5] [added: $104.2] million.

[removed: We] [added: Additionally, during fiscal 2017 we] issued [removed: 1.4] [added: 1.3] million shares [removed: of common stock] [added: under our ATM program] and received [removed: $98.6 million in] net proceeds [removed: under the ATM program in fiscal 2016.][added: of $98.8 million.]

The proceeds from the sale [removed: will be] [added: were] redeployed to fund infrastructure [removed: investment] [added: investments] in [removed: the regulated business.][added: our remaining businesses.]

[removed: Upon completion] [added: As a result] of the sale, we [removed: will] have fully exited the nonregulated gas marketing business.

As a result of the continued contribution and stability of our [removed: regulated] earnings, cash flows and capital structure, our Board of Directors increased the quarterly dividend by [removed: 7.1] [added: 7.8] percent for fiscal [removed: 2017.][added: 2018.]

The following table presents our consolidated financial highlights for the fiscal years ended September 30, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014.][added: 2015.]

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Net [removed: income(1)] [added: income] | $ | [removed: 350,104] [added: 396,421] | | | $ | [removed: 315,075] [added: 350,104] | | | $ | [removed: 289,817] [added: 315,075] | |

| Diluted net income per [removed: share(1)] [added: share] | $ | [removed: 3.38] [added: 3.73] | | | $ | [removed: 3.09] [added: 3.38] | | | $ | [removed: 2.96] [added: 3.09] | |

| Net income | $ | [removed: 350,104] [added: 396,421] | | | $ | [removed: 315,075] [added: 350,104] | | | $ | [removed: 289,817] [added: 315,075] | |

[removed: Regulated] Distribution Segment

The primary factors that impact the results of our [removed: regulated] distribution operations are our ability to earn our authorized rates of return, [removed: the cost of natural gas,] competitive factors in the energy industry and economic conditions in our service areas.

Our ability to earn our authorized rates is based primarily on our ability to improve the rate design in our various ratemaking jurisdictions [removed: by reducing or eliminating] [added: to minimize] regulatory lag and, ultimately, [removed: separating] [added: separate] the recovery of our approved [removed: margins] [added: rates] from customer usage patterns.

We are generally able to pass the cost of gas through to our customers without markup under purchased gas cost adjustment mechanisms; [removed: therefore the cost of gas typically does not have an impact on our gross profit as] [added: therefore,] increases in the cost of gas are offset by a corresponding increase in revenues.

[removed: However, gross] [added: Gross] profit in our Texas and Mississippi service areas include franchise fees and gross receipt taxes, which are calculated as a percentage of revenue (inclusive of gas costs).

We record the [added: associated] tax expense as a [added: component of taxes, other than income.]

Although the cost of gas typically does not have a direct impact on our gross profit, higher gas costs may adversely impact our accounts receivable collections, resulting in higher bad debt expense, and may require us to increase borrowings [removed: under our credit facilities resulting in higher interest expense.]

During fiscal [removed: 2016,] [added: 2017,] we completed [removed: 19] [added: 18] regulatory proceedings in our [removed: regulated] distribution segment, which should result in a [removed: $81.8] [added: $91.2] million increase in annual operating income.

Financial and operational highlights for our [removed: regulated] distribution segment for the fiscal years ended September 30, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] are presented below.

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2016] [added: 2017] vs. [removed: 2015] [added: 2016] | | | | [removed: 2015] [added: 2016] vs. [removed: 2014] [added: 2015] | | |

| Consolidated [removed: regulated] distribution transportation volumes — MMcf | [removed: 133,378] [added: 141,540] | | | | [removed: 135,972] [added: 133,378] | | | | [removed: 134,483] [added: 135,972] | | | | [removed: (2,594] [added: 8,162] | | [removed: )] | | [removed: 1,489] [added: (2,594] | | [added: )] |

| Consolidated [removed: regulated] distribution average cost of gas per Mcf sold | $ | [removed: 4.20] [added: 5.14] | | | $ | [removed: 5.20] [added: 4.09] | | | $ | [removed: 5.94] [added: 5.11] | | | $ | [removed: (1.00] [added: 1.05] | [removed: )] | | $ | [removed: (0.74] [added: (1.02] | ) |

Net income for our [removed: regulated] distribution segment increased [removed: 13] [added: 15] percent, primarily due to a [removed: $35.2] [added: $98.5] million increase in gross profit, partially offset by a [removed: $15.8] [added: $34.8] million increase in operating expenses.

| • | The impact of weather that was 25 percent warmer than the prior year, before adjusting for weather normalization mechanisms. Therefore, although sales volumes declined [removed: 17] [added: 16] percent, gross margin experienced just a $3.4 million decline from lower consumption. |

Net income for the year ended September 30, 2016 [removed: includes] [added: included] a $5.0 million income tax benefit for equity awards that vested during the current year as a result of adopting the new stock-based accounting guidance, as described in Note 2 to our consolidated financial statements.

Fiscal year ended September 30, [removed: 2015] [added: 2017] compared with fiscal year ended September 30, [removed: 2014][added: 2016]

Net income for our [removed: regulated] distribution segment increased [removed: 19] [added: 14] percent, primarily due to a [removed: $61.1] [added: $34.3] million increase in gross profit, partially offset by a [removed: $25.5] [added: $15.1] million increase in operating expenses.

| • | a [removed: $70.6] [added: $72.4] million net increase in rate adjustments, primarily in our Mid-Tex, [removed: West Texas, Kentucky/Mid-States] [added: Louisiana, Mississippi] and [removed: Colorado-Kansas] [added: West Texas] Divisions. |

The increase in operating expenses, which include operation and maintenance expense, bad debt expense, depreciation and amortization expense and taxes, other than income, was primarily due to increased depreciation expense [added: and property taxes] associated with increased capital [removed: investments and] [added: investments, higher employee-related costs,] increased [removed: ad valorem] [added: revenue-related taxes, as discussed above,] and [removed: franchise taxes.][added: higher pipeline maintenance and related activities, partially offset by lower legal costs.]

The following table shows our operating income by [removed: regulated] distribution division, in order of total rate base, for the fiscal years ended September 30, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014.][added: 2015.]

The presentation of our [removed: regulated] distribution operating income is included for financial reporting purposes and may not be appropriate for ratemaking purposes.

[removed: Regulated] Pipeline [added: and Storage] Segment

Non-GAAP Financial Measure

Our operations are affected by the cost of natural gas.

The cost of gas is passed through to our customers without markup and includes commodity price, transportation, storage, injection and withdrawal fees and settlements of financial instruments used to mitigate commodity price risk.

These costs are reflected in the income statement as purchased gas cost.

Therefore, increases in the cost of gas are offset by a corresponding increase in revenues.

Accordingly, we believe Gross Profit, a non-GAAP financial measure defined as operating revenues less purchased gas cost, is a better indicator of our financial performance than operating revenues as it provides a useful and more relevant measure to analyze our financial performance.

As such, the following discussion and analysis of our financial performance will reference gross profit rather than operating revenues and purchased gas cost individually.

Results for fiscal 2017 include $0.13 per diluted share from discontinued operations.

In January 2017, we completed the sale of our nonregulated natural gas marketing business.

We received $140.3 million in cash proceeds, including working capital and recognized a net gain of $0.03 per diluted share on the sale in the second quarter of fiscal 2017.

We funded over 75 percent of our current-year capital expenditure program primarily through operating cash flows of $867.1 million.

In addition, we acquired EnLink Pipeline in the first fiscal quarter of 2017 for an all–cash price of $86.1 million, inclusive of working capital.

The acquisition of EnLink Pipeline increased the capacity on our APT intrastate pipeline to serve transportation customers in North Texas, which continues to experience significant population growth.

We intend to fund future investments through a combination of internally generated cash flows and external debt and equity financing.

During fiscal 2017 we received net proceeds of $885 million through the issuance of long-term debt and $99 million through the issuance of common stock.

The net proceeds from these issuances were primarily used to repay maturing long-term debt, reduce short-term debt and for general corporate purposes, including funding a portion of our fiscal 2017 capital expenditures.

| Operating revenues | $ | 2,759,735 | | | $ | 2,454,648 | | | $ | 2,926,985 | |

| Purchased gas cost | 925,536 | | | | 746,192 | | | | 1,295,675 | | |

| Operating expenses | 1,106,653 | | | | 1,051,226 | | | | 1,019,078 | | |

| Operating income | 727,546 | | | | 657,230 | | | | 612,232 | | |

| Interest charges | 120,182 | | | | 114,812 | | | | 116,241 | | |

| Income from continuing operations before income taxes | 604,094 | | | | 542,184 | | | | 495,172 | | |

| Net income from continuing operations | 382,711 | | | | 345,542 | | | | 305,623 | | |

| Net income from discontinued operations | 13,710 | | | | 4,562 | | | | 9,452 | | |

| Diluted net income from continuing operations per share | $ | 3.60 | | | $ | 3.33 | | | $ | 3.00 | |

| Diluted net income from discontinued operations per share | 0.13 | | | | 0.05 | | | | 0.09 | | |

| | | | | | | | | | | | |

| Distribution segment | $ | 268,369 | | | $ | 233,830 | | | $ | 205,820 | |

| Pipeline and storage segment | 114,342 | | | | 111,712 | | | | 99,803 | | |

| Net income from continuing operations | 382,711 | | | | 345,542 | | | | 305,623 | | |

| Net income from discontinued natural gas marketing operations | 13,710 | | | | 4,562 | | | | 9,452 | | |

The distribution segment is primarily comprised of our regulated natural gas distribution and related sales operations in eight states.

under our credit facilities resulting in higher interest expense.

| Operating revenues | $ | 2,649,175 | | | $ | 2,339,778 | | | $ | 2,821,362 | | | $ | 309,397 | | | $ | (481,584 | ) |

| Purchased gas cost | 1,269,456 | | | | 1,058,576 | | | | 1,574,447 | | | | 210,880 | | | | (515,871 | | ) |

| Gross profit | 1,379,719 | | | | 1,281,202 | | | | 1,246,915 | | | | 98,517 | | | | 34,287 | | |

| Operating expenses | 874,077 | | | | 839,318 | | | | 824,223 | | | | 34,759 | | | | 15,095 | | |

| Operating income | 505,642 | | | | 441,884 | | | | 422,692 | | | | 63,758 | | | | 19,192 | | |

| Miscellaneous income (expense) | (1,695 | | ) | | 1,171 | | | | 284 | | | | (2,866 | | ) | | 887 | | |

| Interest charges | 79,789 | | | | 78,238 | | | | 83,087 | | | | 1,551 | | | | (4,849 | | ) |

| | | |

| --- | --- | --- |

| Critical Accounting Policy | Summary of Policy | Factors Influencing Application of the Policy |

| Contingencies | In the normal course of business, we are confronted with issues or events that may result in a contingent liability. These generally relate to uncollectible receivables, lawsuits, claims made by third parties or the action of various regulatory agencies. We recognize these contingencies in our consolidated financial statements when we determine, based on currently available facts and circumstances it is probable that a liability has been incurred or an asset will not be recovered, and an amount can be reasonably estimated. Actual results may differ from estimates, depending on actual outcomes or changes in the facts or expectations surrounding each potential exposure. Changes in the estimates related to contingencies could have a negative impact on our consolidated results of operations, cash flows or financial position. Our contingencies are further discussed in Note 11 to our consolidated financial statements. | Currently available facts Management’s estimate of future resolution |

| Financial instruments and hedging activities | We use financial instruments to mitigate commodity price risk and interest rate risk. The objectives for using financial instruments have been tailored to meet the needs of our regulated and nonregulated businesses. These objectives are more fully described in Note 13 to the consolidated financial statements. We record all of our financial instruments on the balance sheet at fair value as required by accounting principles generally accepted in the United States, with changes in fair value ultimately recorded in the income statement. The recognition of the changes in fair value of these financial instruments recorded in the income statement is contingent upon whether the financial instrument has been designated and qualifies as a part of a hedging relationship or if regulatory rulings require a different accounting treatment. Our accounting elections for financial instruments and hedging activities utilized are more fully described in Note 13 to the consolidated financial statements. The criteria used to determine if a financial instrument meets the definition of a derivative and qualifies for hedge accounting treatment are complex and require management to exercise professional judgment. Further, as more fully discussed below, significant changes in the fair value of these financial instruments could materially impact our financial position, results of operations or cash flows. Finally, changes in the effectiveness of the hedge relationship could impact the accounting treatment. | Designation of contracts under the hedge accounting rules Judgment in the application of accounting guidance Assessment of the probability that future hedged transactions will occur Changes in market conditions and the related impact on the fair value of the hedged item and the associated designated financial instrument Changes in the effectiveness of the hedge relationship |

| Fair Value Measurements | We report certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The assets and liabilities we recognize at fair value are subject to potentially significant volatility based on numerous considerations including, but not limited to changes in commodity prices, interest rates, maturity and timing of settlement. Prices actively quoted on national exchanges are used to determine the fair value of most of our assets and liabilities recorded on our balance sheet at fair value. Within our nonregulated operations, we utilize a mid-market pricing convention (the mid-point between the bid and ask prices) for determining fair value measurement, as permitted under current accounting standards. Values derived from these sources reflect the market in which transactions involving these financial instruments are executed. We utilize models and other valuation methods to determine fair value when external sources are not available. Values are adjusted to reflect the potential impact of an orderly liquidation of our positions over a reasonable period of time under then-current market conditions. We believe the market prices and models used to value these financial instruments represent the best information available with respect to the market in which transactions involving these financial instruments are executed, the closing exchange and over-the-counter quotations, time value and volatility factors underlying the contracts. Fair-value estimates also consider our own creditworthiness and the creditworthiness of the counterparties involved. Our counterparties consist primarily of financial institutions and major energy companies. This concentration of counterparties may materially impact our exposure to credit risk resulting from market, economic or regulatory conditions. We seek to minimize counterparty credit risk through an evaluation of their financial condition and credit ratings and the use of collateral requirements under certain circumstances. | General economic and market conditions Volatility in underlying market conditions Maturity dates of financial instruments Creditworthiness of our counterparties Creditworthiness of Atmos Energy Impact of credit risk mitigation activities on the assessment of the creditworthiness of Atmos Energy and its counterparties |

We funded our capital expenditure program primarily through operating cash flows of $795.0 million, net short-term borrowings and the issuance of common stock, including the At-the-Market Equity Sales (ATM) Program described below.

We intend to fund this level of investment through available operating cash flows, the issuance of long-term debt securities and, to a lesser extent, the issuance of equity.

In order to strengthen our ability to meet our financing needs, we:

- Entered into an ATM equity distribution agreement in March 2016 under which we may issue and sell shares of our common stock, up to an aggregate offering price of $200 million.

- Executed in September 2016 a new three-year, $200 million multi-draw term loan agreement with a syndicate of three lenders.

The term loan will be used to refinance existing indebtedness and for working capital, capital expenditures and other general corporate purposes.

- Amended our existing five-year $1.25 billion unsecured credit facility in October 2016, which increased the committed loan to $1.5 billion and extended the facility through September 25, 2021.

The amended facility also retains the $250 million accordion feature, which allows for an increase in the total committed loan amount to $1.75 billion.

On May 13, 2016, Standard & Poor’s Corporation upgraded our senior unsecured debt rating to A from A- and upgraded our short-term debt rating to A-1 from A-2, with a ratings outlook of stable, citing strong financial performance largely due to our ability to timely recover capital investments.

On October 31, 2016, we announced the proposed sale of AEM to CenterPoint Energy Services, Inc. The transaction will include the transfer of approximately 800 delivered gas customers and AEM’s related asset optimization business at an all cash price of $40.0 million plus working capital at the date of closing.

No material gain or loss is currently anticipated in connection with the closing of this transaction.

| Operating revenues | $ | 3,349,949 | | | $ | 4,142,136 | | | $ | 4,940,916 | |

| Gross profit | 1,744,896 | | | | 1,680,017 | | | | 1,582,426 | | |

| Operating expenses | 1,076,878 | | | | 1,048,622 | | | | 971,077 | | |

| Operating income | 668,018 | | | | 631,395 | | | | 611,349 | | |

| Interest charges | 115,948 | | | | 116,241 | | | | 129,295 | | |

| Income before income taxes | 550,477 | | | | 510,765 | | | | 476,819 | | |

| | |

| --- | --- |

| (1) | Unrealized gains/losses in our nonregulated operations during fiscal 2016, 2015 and 2014 increased/(decreased) net income by $0.7 million, $(1.5) million and $5.8 million, or $0.01, $(0.01) and $0.06 per diluted share. |

Regulated operations contributed 95 percent, 95 percent and 89 percent to our consolidated net income for fiscal years 2016, 2015 and 2014.

| Regulated distribution segment | $ | 232,370 | | | $ | 204,813 | | | $ | 171,585 | |

| Regulated pipeline segment | 101,689 | | | | 94,662 | | | | 86,191 | | |

| Nonregulated segment | 16,045 | | | | 15,600 | | | | 32,041 | | |

Accordingly, we believe gross profit is a better indicator of our financial performance than revenues.

component of taxes, other than income.

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Gross profit | $ | 1,272,805 | | | $ | 1,237,577 | | | $ | 1,176,515 | | | $ | 35,228 | | | $ | 61,062 | |

| Operating expenses | 833,221 | | | | 817,428 | | | | 791,947 | | | | 15,793 | | | | 25,481 | | |

| Operating income | 439,584 | | | | 420,149 | | | | 384,568 | | | | 19,435 | | | | 35,581 | | |

| Miscellaneous income (expense) | 455 | | | | (377 | | ) | | (381 | | ) | | 832 | | | | 4 | | |

| Interest charges | 79,404 | | | | 84,132 | | | | 94,918 | | | | (4,728 | | ) | | (10,786 | | ) |

| Income before income taxes | 360,635 | | | | 335,640 | | | | 289,269 | | | | 24,995 | | | | 46,371 | | |

In our [removed: regulated] distribution [removed: segment,] [added: and pipeline and storage segments,] we use a combination of physical storage, fixed physical contracts and fixed financial contracts to protect us and our customers against unusually large winter period gas price increases.

In our [removed: nonregulated] [added: natural gas marketing] segment, we [removed: manage] [added: previously managed] our exposure to the risk of natural gas price changes and [removed: lock] [added: locked] in our gross profit margin through a combination of storage and financial instruments including futures, over-the-counter and exchange-traded options and swap contracts with counterparties.

We purchase natural gas for our [removed: regulated] distribution operations.

Substantially all of the costs of gas purchased for [removed: regulated] distribution operations are recovered from our customers through purchased gas cost adjustment mechanisms.

Therefore, our [removed: regulated] distribution operations have limited commodity price risk exposure.

Had interest rates associated with our short-term borrowings increased by an average of one percent, our interest expense would have increased by approximately [removed: $6.4] [added: $4.3] million during [removed: 2016.][added: 2017.]

We conduct risk management activities in our distribution, pipeline and storage segments, and formerly, in our natural gas marketing segment.

We conduct risk management activities through both our regulated distribution and nonregulated segments.

Regulated distribution segment

Nonregulated segment

Our nonregulated segment is also exposed to risks associated with changes in the market price of natural gas.

For our nonregulated segment, we use a sensitivity analysis to estimate commodity price risk.

For purposes of this analysis, we estimate commodity price risk by applying a $0.50 change in the forward NYMEX price to our net open position (including existing storage and related financial contracts) at the end of each period.

Based on AEH’s net open position (including existing storage and related financial contracts) at September 30, 2016 of 0.1 Bcf, a $0.50 change in the forward NYMEX price would have had an impact of less than $0.1 million on our consolidated net income.

Changes in the difference between the indices used to mark to market our physical inventory (Gas Daily) and the related fair-value hedge (NYMEX) can result in volatility in our reported net income; but, over time, gains and losses on the sale of storage gas inventory will be offset by gains and losses on the fair-value hedges.

Based upon our net physical position at September 30, 2016 and assuming our hedges would still qualify as highly effective, a $0.50 change in the difference between the Gas Daily and NYMEX indices would impact our reported net income by approximately $5.9 million.

Additionally, these changes could cause us to recognize a risk management liability, which would require us to place cash into an escrow account to collateralize this liability position.

This, in turn, would reduce the amount of cash we would have on hand to fund our working capital needs.

Atmos Energy Corporation, headquartered in Dallas, Texas, and incorporated in Texas and Virginia, is [removed: engaged primarily in] [added: one of] the [removed: regulated natural gas distribution and pipeline businesses as well as other nonregulated natural gas businesses.][added: country’s largest natural-gas-only distributors based on number of customers.]

We deliver natural gas through regulated sales and transportation arrangements to over three million residential, commercial, public authority and industrial customers in eight states located primarily in the [removed: South, which makes us one of the country’s largest natural-gas-only distributors based on number of customers.][added: South.]

[removed: Our] [added: Through December 31, 2016, we were also engaged in certain] nonregulated businesses [removed: provide] [added: that provided] natural gas management, marketing, transportation and storage services to municipalities, local gas distribution companies, including certain of our natural gas distribution [removed: divisions] [added: divisions,] and industrial customers principally in the Midwest and Southeast.

Over the last [removed: five] [added: six] years, [removed: we] [added: regulatory mechanisms designed to minimize regulatory lag] have [removed: achieved growth by making] [added: enabled us to make] significant capital investments to fortify and upgrade our distribution and transmission [removed: systems and successfully recovering these investments through regulatory mechanisms designed to minimize regulatory lag.][added: systems.]

[removed: | • | The regulated] [added: Our] distribution [removed: segment, which includes our] [added: segment is primarily comprised of the] regulated [added: natural gas] distribution and related sales [added: and storage] operations [removed: |][added: in our six regulated natural gas distribution divisions, which are used to support our regulated natural gas distribution operations in those states.]

| • | The [removed: regulated] pipeline [removed: segment, which includes] [added: and storage segment is comprised primarily of] the pipeline and storage operations of our Atmos [removed: Pipeline — Texas Division] [added: Pipeline-Texas division] and [added: our natural gas transmission operations in Louisiana.] |

[removed: | • | The nonregulated segment, which includes] [added: Our pipeline and storage segment consists of the pipeline and storage operations of APT and] our [removed: nonregulated] natural gas [removed: management, nonregulated natural gas transmission, storage and other services. |][added: transmission operations in Louisiana.]

[removed: Regulated] Distribution Segment Overview

At September 30, [removed: 2016,] [added: 2017,] we held [removed: 1,003] [added: 1,008] franchises having terms generally ranging from five to 35 years.

| Mid-Tex | | Texas, including the Dallas/Fort Worth Metroplex | | 550 | | [removed: 1,649,291] [added: 1,672,581] |

| Kentucky/Mid-States | | Kentucky | | 230 | | [removed: 179,717] [added: 181,638] |

| West Texas | | Amarillo, Lubbock, Midland | | 80 | | [removed: 308,988] [added: 311,188] |

| Colorado-Kansas | | Colorado | | 170 | | [removed: 117,017] [added: 118,410] |

In addition, we transport natural gas for others through our distribution [removed: system.][added: systems.]

Purchased gas cost adjustment mechanisms provide natural gas distribution companies a method of recovering purchased gas costs on an ongoing basis without filing a rate case because they provide a dollar-for-dollar offset to increases or decreases in [added: the cost] natural [removed: gas distribution gas costs.][added: gas.]

Under the performance-based ratemaking [removed: adjustment,] [added: adjustments,] purchased gas costs savings are shared between the utility and its customers.

Our supply of natural gas is provided by a variety of suppliers, including independent producers, marketers and pipeline [removed: companies and] [added: companies,] withdrawals of gas from proprietary and contracted storage [removed: assets.][added: assets and peaking and spot purchase agreements, as needed.]

[removed: Major suppliers during fiscal 2016 were] [added: Energy Services, Inc.,] Concord Energy LLC, ConocoPhillips Company, Devon Gas Services, L.P., [removed: Gulf South Pipeline Company LP,] Sequent Energy Management, [removed: LP,] [added: L.P.,] Targa Gas Marketing LLC, Tenaska Gas Storage, [removed: LLC, Texas][added: LLC and Texla Energy Management, Inc.]

The peak-day demand for our distribution operations in fiscal [removed: 2016] [added: 2017] was on January [removed: 10, 2016,] [added: 6, 2017,] when sales to customers reached approximately [removed: 2.5] [added: 3.6] Bcf.

Currently, our distribution [removed: divisions, except for our Mid-Tex Division,] [added: divisions] utilize [removed: 40] [added: 38] pipeline transportation companies, both interstate and intrastate, to transport our natural gas.

[removed: Regulated] Pipeline [added: and Storage] Segment Overview

Through [removed: it,] [added: it's system,] APT provides transportation and storage services to our Mid-Tex Division, other third party local distribution companies, industrial and electric generation customers, marketers and producers.

GRIP allows us to include in our rate base annually approved capital costs incurred in the prior calendar year provided that we file a complete rate case at least once every five [removed: years.][added: years, the most recent filing was completed in 2017.]

[removed: Generally, each] regulatory authority reviews rate requests and establishes a rate structure intended to generate revenue sufficient to cover the costs of conducting business and to provide a reasonable return on invested capital.

| • | Infrastructure programs in place in the majority of our states that provide for an annual [removed: rate] adjustment to rates for qualifying capital expenditures. Through our annual formula rate mechanisms and infrastructure programs, we have the ability to recover over [removed: 90] [added: 95] percent of our capital expenditures within six months. |

| • | Authorization in tariffs, statute or commission rules that allows us to defer certain elements of our cost of service [removed: until they are included in rates,] such as depreciation, ad valorem taxes and pension [removed: costs.] [added: costs, until they are included in rates.] |

| • | WNA mechanisms in seven states that serve to minimize the effects of weather on approximately 97 percent of our distribution gross [removed: margin.] [added: profit.] |

| Atmos Pipeline [removed: —] [added: -] Texas [removed: — GRIP] | [added: GRIP] | Texas | [removed: | 05/03/2016 | | 722,700(2) | | 9.36% |] [added: $] | [removed: N/A] [added: 28,988] | [removed: 11.80%] |

| | | Colorado SSIR | | [removed: 01/01/2016] [added: 01/01/2017] | | [removed: 9,478] [added: 13,500] | | 7.82% | | 48/52 | 9.60% |

| | | Kansas | | 03/17/2016 | | 200,564 | | [removed: (4)] [added: (3)] | | [removed: (4)] [added: (3)] | [removed: (4)] [added: (3)] |

| Kentucky/Mid-States | | Kentucky | | 08/15/2016 | | 335,833 | | [removed: (4)] [added: (3)] | | [removed: (4)] [added: (3)] | [removed: (4)] [added: (3)] |

| West [removed: Texas(5)] [added: Texas(4)] | | Texas | | [removed: 03/15/2016] [added: 03/15/2017] | | [removed: (4)] [added: (3)] | | [removed: (4)] [added: (3)] | | [removed: (4)] [added: (3)] | 10.50% |

| | | Texas-GRIP | | [removed: 05/03/2016] [added: 05/23/2017] | | [removed: 419,976] [added: 476,665] | | 8.57% | | 48/52 | 10.50% |

| Division | | Jurisdiction | | Bad Debt [removed: Rider(6)] [added: Rider(5)] | | Formula Rate | | Infrastructure Mechanism | Performance Based Rate [removed: Program(7)] [added: Program(6)] | | WNA Period |

| West [removed: Texas(5)] [added: Texas(4)] | | Texas | | Yes | | Yes | | Yes | No | | October-May |

| [removed: (3)] [added: (2)] | The Mid-Tex Rate Base amounts for the Mid-Tex Cities and [added: Mid-Tex] Dallas [removed: areas] [added: areas, combined,] represent “system-wide”, or 100 percent, of the Mid-Tex Division’s rate base. |

| [removed: (4)] [added: (3)] | A rate base, rate of return, return on equity or debt/equity ratio was not included in the respective state commission’s final decision. |

| [removed: (5)] [added: (4)] | On April 1, 2014, a rate case settlement approved by the West Texas Cities reestablished an annual rate mechanism for all West Texas Division cities except Amarillo, Channing, Dalhart and Lubbock. |

| [removed: (6)] [added: (5)] | The bad debt rider allows us to recover from ratepayers the gas cost portion of uncollectible accounts. |

| [removed: (7)] [added: (6)] | The performance-based rate program provides incentives to distribution companies to minimize purchased gas costs by allowing the companies and its customers to share the purchased gas costs savings. |

Effective January 1, 2017, we sold all of the equity interests of Atmos Energy Marketing, LLC (AEM) to CenterPoint Energy Services, Inc. (CES), a subsidiary of CenterPoint Energy Inc. As a result of the sale, Atmos Energy has fully exited the nonregulated gas marketing business.

The timely recovery of these investments has increased our rate base which has resulted in rising earnings per share during this time.

As of September 30, 2017, we manage and review our consolidated operations through the following three reportable segments:

| • | The distribution segment is primarily comprised of our regulated natural gas distribution and related sales operations in eight states and storage assets located in Kentucky and Tennessee. |

| • | The natural gas marketing segment is comprised of our discontinued natural gas marketing business. |

| | | Tennessee | | | | 147,620 |

| | | Virginia | | | | 24,153 |

| Louisiana | | Louisiana | | 270 | | 359,920 |

| Mississippi | | Mississippi | | 110 | | 270,754 |

| | | Kansas | | | | 135,141 |

Major suppliers during fiscal 2017 were BP Energy Company, Castleton Commodities Merchant Trading L.P., CenterPoint

Our natural gas transmission operations in Louisiana are comprised of a proprietary 21-mile pipeline located in New Orleans, Louisiana that is primarily used to aggregate gas supply for our distribution division in Louisiana under a long-term contract and on a more limited basis, to third parties.

The demand fee charged to our Louisiana distribution division for these services is subject to regulatory approval by the Louisiana Public Service Commission.

We also manage two asset management plans in Louisiana with distribution affiliates of the Company, which have been approved by applicable state regulatory commissions.

Generally, these asset management plans require us to share with our distribution customers a significant portion of the cost savings earned from these arrangements.

Natural Gas Marketing Segment Overview

Through December 31, 2016, we were engaged in a nonregulated natural gas marketing business, which was conducted by Atmos Energy Marketing (AEM).

AEM’s primary business was to aggregate and purchase gas supply, arrange transportation and storage logistics and ultimately deliver gas to customers at competitive prices.

As more fully described in Note 15, effective January 1, 2017, we sold all of the equity interests of AEM to CenterPoint Energy Services, Inc., a subsidiary of CenterPoint Energy Inc. As a result of the sale, Atmos Energy has fully exited the nonregulated natural gas marketing business.

Accordingly, these operations have been reported as discontinued operations.

Generally, each

| Atmos Pipeline — Texas | | Texas | | 08/01/2017 | | $1,767,600 | | 8.87% | | 47/53 | 11.50% |

| | | Kansas GSRS | | 02/09/2017 | | 6,633 | | (3) | | (3) | (3) |

| | | Kentucky PRP | | 11/14/2016 | | 38,173 | | 7.71% | | 51/49 | 9.80% |

| | | Tennessee | | 06/01/2017 | | 302,953 | | 7.49% | | 47/53 | 9.80% |

| | | Virginia | | 11/07/2016 | | 47,581 | | (3) | | (3) | (3) |

| Louisiana | | Trans La | | 04/01/2017 | | 156,200 | | 7.50% | | 47/53 | 9.80% |

| | | LGS | | 07/01/2017 | | 385,435 | | 7.43% | | 47/53 | 9.80% |

| Mid-Tex Cities | | Texas | | 06/01/2017 | | 2,362,937(2) | | 8.36% | | 45/55 | 10.50% |

| Mid-Tex — Dallas | | Texas | | 06/01/2017 | | 2,273,567(2) | | 8.38% | | 41/59 | 10.10% |

| Mississippi | | Mississippi | | 01/12/2017 | | 387,252 | | 7.85% | | 47/53 | 9.73% |

| | | Mississippi - SIR | | 01/01/2017 | | 21,345 | | 7.85% | | 47/53 | 9.73% |

| | | Mississippi - SGR | | 01/01/2017 | | 17,437 | | 9.04% | | 47/53 | 12.00% |

| Colorado-Kansas | Rate Case | Colorado | 2,916 | | |

| | Rate Case | Kentucky | 4,778 | | |

| Mississippi | SIR (1) | Mississippi | 8,111 | | |

| | SGR (3) | Mississippi | 1,385 | | |

| | SRF | Mississippi | 4,214 | | |

| | | | $ | 59,435 | |

| (4) | On October 27, 2017, we received a final order from the Kentucky Public Service Commission approving this increase. |

| | |

| --- | --- |

We operate the Company through the following three segments:

Our regulated distribution segment is comprised of our six regulated natural gas distribution divisions.

This segment represents approximately 65 percent of our consolidated net income.

| | | Tennessee | | | | 143,942 |

| | | Virginia | | | | 23,820 |

| Louisiana | | Louisiana | | 280 | | 358,972 |

| Mississippi | | Mississippi | | 110 | | 269,750 |

| | | Kansas | | | | 134,012 |

Additionally, the natural gas supply for our Mid-Tex Division includes peaking and spot purchase agreements.

Gas Transmission Corporation, Texla Energy Management, Inc. and Atmos Energy Marketing, LLC and Trans Louisiana Gas Pipeline, Inc., which are wholly owned subsidiaries in our nonregulated segment.

Our regulated pipeline segment consists of the regulated pipeline and storage operations of APT.

This segment represents approximately 30 percent of our consolidated operations.

Nonregulated Segment Overview

Our nonregulated operations are conducted through Atmos Energy Holdings, Inc. (AEH), a wholly-owned subsidiary of Atmos Energy Corporation, and typically represent approximately five percent of our consolidated net income.

AEH's primary business is to buy, sell and deliver natural gas at competitive prices to approximately 1,000 customers located primarily in the Midwest and Southeast areas of the United States.

AEH accomplishes this objective by aggregating and purchasing gas supply, arranging transportation and storage logistics and effectively managing commodity price risk.

AEH also earns storage and transportation demand fees primarily from our regulated distribution operations in Louisiana and Kentucky.

These demand fees are subject to regulatory oversight and are renewed periodically.

| Atmos Pipeline — Texas | | Texas | | 05/01/2011 | | $807,733 | | 9.36% | | 50/50 | 11.80% |

| | | Tennessee | | 06/01/2016 | | 274,595 | | 7.72% | | 47/53 | 9.80% |

| | | Virginia | | 04/01/2016 | | 49,132 | | (4) | | (4) | 9.00% - 10.00% |

| Louisiana | | Trans La | | 04/01/2016 | | 138,692 | | 7.79% | | 46/54 | 9.80% |

| | | LGS | | 07/01/2016 | | 350,837 | | 7.73% | | 46/54 | 9.80% |

| Mid-Tex Cities | | Texas | | 06/01/2016 | | 2,130,568(3) | | 8.43% | | 45/55 | 10.50% |

| Mid-Tex — Dallas | | Texas | | 06/01/2016 | | 2,076,415(3) | | 8.28% | | 43/57 | 10.10% |

| Mississippi | | Mississippi | | 12/21/2015 | | 357,646 | | 7.94% | | 47/53 | 9.88% |

| | | Mississippi - SGR | | 12/03/2015 | | 3,475 | | 9.37% | | 47/53 | 12.00% |

| (2) | This APT rate base represents the incremental rate base approved through annual GRIP filings since APT's last rate case in 2011. |

| | | | $ | 14,897 | |

| 2014 Filings: | | | | | | | | | | |

| Louisiana | | LGS | | 12/2013 | | $ | 1,383 | | | 07/01/2014 |

| West Texas | | West Texas | | 12/2013 | | 858 | | | | 06/17/2014 |

| Mid-Tex | | Environs | | 12/2013 | | 881 | | | | 05/22/2014 |

| Atmos Pipeline — Texas | | Texas | | 12/2013 | | 45,589 | | | | 05/06/2014 |

| Louisiana | | Trans La | | 09/2013 | | 550 | | | | 04/01/2014 |

| Colorado-Kansas | | Kansas | | 09/2013 | | 882 | | | | 02/01/2014 |

| Mid-Tex | | Mid-Tex Cities | | 12/2012 | | 12,497 | | | | 11/01/2013 |

| Kentucky/Mid-States | | Kentucky | | 09/2014 | | 2,493 | | | | 10/01/2013 |

For the fiscal year ended September 30, [removed: 2016][added: 2017]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated [removed: filer or] [added: filer,] a smaller reporting [added: company or an emerging growth] company.

See definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting company” [added: and "emerging growth company"] in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨ [added: Emerging growth company ¨]

The aggregate market value of the common voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter, March 31, [removed: 2016,] [added: 2017,] was [removed: $7,463,087,078.][added: $8,146,262,574.]

As of November [removed: 9, 2016,] [added: 8, 2017,] the registrant had [removed: 103,964,735] [added: 106,112,709] shares of common stock outstanding.

Portions of the registrant’s Definitive Proxy Statement to be filed for the Annual Meeting of Shareholders on February [removed: 8, 2017] [added: 7, 2018] are incorporated by reference into Part III of this report.

| [Glossary of Key [removed: Terms](#s23F674823CCA5C52933B2C1F5E87C6F6)] [added: Terms](#sE2EF87EF0A875D9E857C97AF1FA6E09B)] | | [removed: [3](#s23F674823CCA5C52933B2C1F5E87C6F6)] [added: [3](#sE2EF87EF0A875D9E857C97AF1FA6E09B)] |

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| Item 11. | [Executive [removed: Compensation](#sBFB228010E07549DABE8B395FB22B4A3)] [added: Compensation](#s2D38EC95979959F4A3374EA30F111E76)] | [removed: [101](#sBFB228010E07549DABE8B395FB22B4A3)] [added: [91](#s2D38EC95979959F4A3374EA30F111E76)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sAA3231B7D33958D88DFF8A7CB665503B)] [added: Matters](#s1051900F4BC753FBB9C12ABC5C28C562)] | [removed: [101](#sAA3231B7D33958D88DFF8A7CB665503B)] [added: [91](#s1051900F4BC753FBB9C12ABC5C28C562)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sEB2EE70AC1425C74805DFF4E940DE206)] [added: Independence](#sB3AFE47472A35A3891724BAA5283D61F)] | [removed: [101](#sEB2EE70AC1425C74805DFF4E940DE206)] [added: [91](#sB3AFE47472A35A3891724BAA5283D61F)] |

| Item 14. | [Principal Accountant Fees and [removed: Services](#s2206273DB640532681DBA040C33C4C73)] [added: Services](#sEC3BF289068C57C2BC01DFE06997A4A5)] | [removed: [101](#s2206273DB640532681DBA040C33C4C73)] [added: [91](#sEC3BF289068C57C2BC01DFE06997A4A5)] |

| Item 15. | [Exhibits and Financial Statement [removed: Schedules](#sD070143C027F51E8884FF0FA35A24E24)] [added: Schedules](#sFE9530FCC6BF51F88D208863843B5CB0)] | [removed: [101](#s685E4EE86252542282AAF1CD4C5F3B66)] [added: [91](#s1160DE5AEABE58B8BBF60B39606E5910)] |

10-K 1 ato2017093010-k.htm 10-K

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

| ARM | Annual Rate Mechanism |

| DARR | Dallas Annual Rate Review |

| Gross Profit | Non-GAAP measure defined as operating revenues less purchased gas cost |

| NGA | Natural Gas Act of 1938 |

| PRP | Pipeline Replacement Program |

| SAVE | Steps to Advance Virginia Energy |

| SGR | Supplemental Growth Filing |

| SIR | System Integrity Rider |

| SSIR | System Safety and Integrity Rider |

10-K 1 ato2016093010-k.htm 10-K

| APS | Atmos Pipeline and Storage, LLC |

| CFTC | Commodity Futures Trading Commission |

| Fitch | Fitch Ratings, Ltd. |

At September 30, [removed: 2016,] [added: 2017,] in our [removed: regulated] distribution segment, we owned an aggregate of [removed: 70,593] [added: 70,605] miles of underground distribution and transmission mains throughout our distribution systems.

Through our [removed: regulated] pipeline [added: and storage] segment we owned [removed: 5,446] [added: 5,682] miles of gas transmission lines as [removed: well as 111 miles of transmission and gathering lines through our nonregulated segment.][added: well.]

The following table summarizes certain information regarding our underground gas storage facilities at September 30, [removed: 2016:][added: 2017:]

| [removed: Regulated] Distribution Segment | | | | | | | | | | | | |

| [removed: Regulated Pipeline Segment —] Texas | | 46,083,549 | | | 15,878,025 | | | 61,961,574 | | | [removed: 1,235,000] [added: 1,559,000] | |

| Total | | 59,550,299 | | | 30,484,198 | | | 90,034,497 | | | [removed: 1,539,600] [added: 1,849,100] | |

The following table summarizes our contracted storage capacity at September 30, [removed: 2016:][added: 2017:]

| [removed: Regulated] Distribution Segment | | | | | | | | |

| | | Kentucky/Mid-States Division | | [removed: 11,181,603] [added: 8,175,103] | | | [removed: 268,739] [added: 226,739] | |

| | | West Texas Division | | [removed: 4,500,000] [added: 5,000,000] | | | [removed: 146,000] [added: 161,000] | |

| Kentucky | | 7,881,596 | | | 9,562,283 | | | 17,443,879 | | | 158,100 | |

| Total | | 13,028,167 | | | 14,305,200 | | | 27,333,367 | | | 234,100 | |

| Pipeline and Storage Segment | | | | | | | | | | | | |

| Total | | 46,522,132 | | | 16,178,998 | | | 62,701,130 | | | 1,615,000 | |

| | | Colorado-Kansas Division | | 5,129,562 | | | 124,830 | |

| | | Louisiana Division | | 2,480,779 | | | 173,605 | |

| | | Mississippi Division | | 3,823,800 | | | 126,334 | |

| Total | | | | 28,109,244 | | | 987,508 | |

| Pipeline and Storage Segment | | | | | | | | |

| | | | | | | | | |

| Total Contracted Storage Capacity | | | | 29,783,244 | | | 1,055,015 | |

| Kentucky | | 4,442,696 | | | 6,322,283 | | | 10,764,979 | | | 105,100 | |

| Total | | 9,589,267 | | | 11,065,200 | | | 20,654,467 | | | 181,100 | |

| Nonregulated Segment | | | | | | | | | | | | |

| Kentucky | | 3,438,900 | | | 3,240,000 | | | 6,678,900 | | | 67,500 | |

| Total | | 3,877,483 | | | 3,540,973 | | | 7,418,456 | | | 123,500 | |

| | | Colorado-Kansas Division | | 5,261,909 | | | 118,889 | |

| | | Louisiana Division | | 2,595,619 | | | 179,347 | |

| | | Mississippi Division | | 3,554,535 | | | 151,334 | |

| Total | | | | 30,593,666 | | | 1,039,309 | |

| Nonregulated Segment | | | | | | | | |

| | | Atmos Energy Marketing, LLC | | 8,026,869 | | | 250,937 | |

| Total | | | | 9,700,869 | | | 318,444 | |

| Total Contracted Storage Capacity | | | | 40,294,535 | | | 1,357,753 | |

The headquarters for our nonregulated operations are in Houston, Texas, with offices in Houston and other locations, primarily in leased facilities.

Our stock trades on the New York Stock Exchange under the trading symbol “ATO.” The high and low sale prices and dividends paid per share of our common stock for fiscal [removed: 2016] [added: 2017] and [removed: 2015] [added: 2016] are listed below.

| | Fiscal [removed: 2016] [added: 2017] | | | | | | | | | | | | Fiscal [removed: 2015] [added: 2016] | | | | | | | | | | |

| December 31 | $ | [removed: 64.25] [added: 74.73] | | | $ | [removed: 57.82] [added: 68.96] | | | $ | [removed: 0.42] [added: 0.45] | | | $ | [removed: 58.08] [added: 64.25] | | | $ | [removed: 47.35] [added: 57.82] | | | $ | [removed: 0.39] [added: 0.42] | |

| March 31 | [removed: 74.33] [added: 80.40] | | | | [removed: 61.74] [added: 73.21] | | | | [removed: 0.42] [added: 0.45] | | | | [removed: 58.81] [added: 74.33] | | | | [removed: 52.02] [added: 61.74] | | | | [removed: 0.39] [added: 0.42] | | |

| June 30 | [removed: 81.32] [added: 85.54] | | | | [removed: 70.60] [added: 78.90] | | | | [removed: 0.42] [added: 0.45] | | | | [removed: 56.41] [added: 81.32] | | | | [removed: 51.28] [added: 70.60] | | | | [removed: 0.39] [added: 0.42] | | |

| September 30 | [removed: 81.16] [added: 88.69] | | | | [removed: 71.88] [added: 82.42] | | | | [removed: 0.42] [added: 0.45] | | | | [removed: 58.18] [added: 81.16] | | | | [removed: 51.48] [added: 71.88] | | | | [removed: 0.39] [added: 0.42] | | |

The number of record holders of our common stock on October 31, [removed: 2016] [added: 2017] was [removed: 14,108.][added: 13,341.]

We sold no securities during fiscal [removed: 2016] [added: 2017] that were not registered under the Securities Act of 1933, as amended.

The performance graph and table below compares the yearly percentage change in our total return to shareholders for the last five fiscal years with the total return of the S&P 500 Stock Index and the cumulative total return of [removed: a] [added: two different] customized peer company [removed: group,] [added: groups,] the [added: New] Comparison Company [added: Index and the Old Comparison Company] Index.

The [added: New] Comparison Company Index is comprised of natural gas distribution companies with similar revenues, market capitalizations and asset bases to that of the Company.

The graph and table below assume that $100.00 was invested on September 30, [removed: 2011] [added: 2012] in our common stock, the S&P 500 Index and in the common stock of the companies in the [added: New and Old] Comparison Company [removed: Index,] [added: Indices,] as well as a reinvestment of dividends paid on such investments throughout the period.

[removed: ][added: ]

| | [removed: 9/30/2011 | | |] 9/30/2012 | | | 9/30/2013 | | | 9/30/2014 | | | 9/30/2015 | | | 9/30/2016 | | [added: | 9/30/2017 | |]

The [added: New] Comparison Company Index reflects the cumulative total return of companies in our peer group, which is comprised of a hybrid group of utility companies, primarily natural gas distribution companies, recommended by our independent executive compensation consulting firm and approved by the Board of Directors.

The companies in [removed: our peer group] [added: the index] are [added: Alliant Energy Corporation, CenterPoint Energy, Inc., CMS Energy Corporation, DTE Energy Company, National Fuel Gas Company, NextEra Energy, Inc., NiSource Inc., ONE Gas, Inc., Spire, Inc. (formerly The Laclede Group, Inc.), Vectren Corporation, WEC Energy Group, Inc., WGL Holdings, Inc., and Xcel Energy, Inc. The Old Comparison Company Index includes] AGL Resources Inc.(1), CenterPoint Energy, Inc., CMS Energy Corporation, NiSource Inc., ONE Gas, Inc., Piedmont Natural Gas Company, [removed: Inc.,] [added: Inc.(1),] Questar Corporation(1), TECO Energy, Inc.(1), Spire, Inc. (formerly The Laclede Group, Inc.), Vectren Corporation and WGL Holdings, Inc.

| (1) | AGL Resources Inc., [added: Piedmont Natural Gas Company, Inc.,] Questar Corporation and TECO Energy, Inc. were acquired prior to September 30, [removed: 2016.] [added: 2017.] As a result, the cumulative total return of these companies is not included in the [added: Old] Comparison Company Index represented in the graph above. |

The following table sets forth the number of securities authorized for issuance under our equity compensation plans at September 30, [removed: 2016.][added: 2017.]

| Total equity compensation plans approved by security holders | [removed: 1,338,162] [added: 1,143,243] | | | — | | | | [removed: 2,359,106] [added: 2,035,861] | |

| (1) | Comprised of a total of [removed: 614,588] [added: 478,367] time-lapse restricted stock units, [removed: 326,249] [added: 361,381] director share units and [removed: 397,325] [added: 303,495] performance-based restricted stock units at the target level of performance granted under our 1998 Long-Term Incentive Plan. |

| | | | | | | | | | $ | 1.80 | | | | | | | | | | | $ | 1.68 | |

| Atmos Energy Corporation | 100.00 | | | 123.32 | | | 142.46 | | | 178.85 | | | 234.47 | | | 270.05 | |

| S&P 500 Index | 100.00 | | | 119.34 | | | 142.89 | | | 142.02 | | | 163.93 | | | 194.44 | |

| Old Comparison Company Index | 100.00 | | | 118.55 | | | 140.49 | | | 154.76 | | | 197.60 | | | 240.77 | |

| New Comparison Company Index | 100.00 | | | 115.80 | | | 135.84 | | | 149.18 | | | 186.87 | | | 222.79 | |

| 1998 Long-Term Incentive Plan | 1,143,243 | | (1) | $ | — | | | 2,035,861 | |

| Total | 1,143,243 | | | $ | — | | | 2,035,861 | |

| | | | | | | | | | $ | 1.68 | | | | | | | | | | | $ | 1.56 | |

| Atmos Energy Corporation | 100.00 | | | 114.96 | | | 141.77 | | | 163.78 | | | 205.60 | | | 269.55 | |

| S&P 500 Index | 100.00 | | | 130.20 | | | 155.39 | | | 186.05 | | | 184.91 | | | 213.44 | |

| Peer Group | 100.00 | | | 117.20 | | | 137.59 | | | 161.70 | | | 179.33 | | | 232.91 | |

| 1998 Long-Term Incentive Plan | 1,338,162 | | (1) | $ | — | | | 2,359,106 | |

| Total | 1,338,162 | | | $ | — | | | 2,359,106 | |

On September 28, 2011, the Board of Directors approved a program authorizing the repurchase of up to five million shares of common stock over a five-year period.

The program expired on September 30, 2016 and will not be renewed.

We did not repurchase any shares during fiscal 2016 under the program.

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012(1)] [added: 2013] | | |

| Net income | $ | [removed: 350,104] [added: 396,421] | | | $ | [removed: 315,075] [added: 350,104] | | | $ | [removed: 289,817] [added: 315,075] | | | $ | [removed: 243,194] [added: 289,817] | | | $ | [removed: 216,717] [added: 243,194] | |

| Diluted [added: net] income per share [removed: from continuing operations] | $ | [removed: 3.38] [added: 3.73] | | | $ | [removed: 3.09] [added: 3.38] | | | $ | [removed: 2.96] [added: 3.09] | | | $ | [removed: 2.50] [added: 2.96] | | | $ | [removed: 2.10] [added: 2.64] | |

| Cash dividends declared per share | $ | [removed: 1.68] [added: 1.80] | | | $ | [removed: 1.56] [added: 1.68] | | | $ | [removed: 1.48] [added: 1.56] | | | $ | [removed: 1.40] [added: 1.48] | | | $ | [removed: 1.38] [added: 1.40] | |

| Total assets | $ | [removed: 10,010,889] [added: 10,749,596] | | | $ | [removed: 9,075,072] [added: 10,010,889] | | | $ | [removed: 8,581,006] [added: 9,075,072] | | | $ | [removed: 7,919,069] [added: 8,581,006] | | | $ | [removed: 7,484,518] [added: 7,919,069] | |

| Shareholders’ equity | $ | [removed: 3,463,059] [added: 3,898,666] | | | $ | [removed: 3,194,797] [added: 3,463,059] | | | $ | [removed: 3,086,232] [added: 3,194,797] | | | $ | [removed: 2,580,409] [added: 3,086,232] | | | $ | [removed: 2,359,243] [added: 2,580,409] | |

| Long-term debt (excluding current maturities) | [removed: 2,188,779] [added: 3,067,045] | | | | [removed: 2,437,515] [added: 2,188,779] | | | | [removed: 2,442,288] [added: 2,437,515] | | | | [removed: 2,440,472] [added: 2,442,288] | | | | [removed: 1,945,148] [added: 2,440,472] | | |

| Total capitalization | $ | [removed: 5,651,838] [added: 6,965,711] | | | $ | [removed: 5,632,312] [added: 5,651,838] | | | $ | [removed: 5,528,520] [added: 5,632,312] | | | $ | [removed: 5,020,881] [added: 5,528,520] | | | $ | [removed: 4,304,391] [added: 5,020,881] | |

| Operating revenues | $ | 2,759,735 | | | $ | 2,454,648 | | | $ | 2,926,985 | | | $ | 3,243,904 | | | $ | 2,572,488 | |

| Gross profit | $ | 1,834,199 | | | $ | 1,708,456 | | | $ | 1,631,310 | | | $ | 1,521,844 | | | $ | 1,377,392 | |

| Income from continuing operations | $ | 382,711 | | | $ | 345,542 | | | $ | 305,623 | | | $ | 270,331 | | | $ | 232,378 | |

| Diluted income per share from continuing operations | $ | 3.60 | | | $ | 3.33 | | | $ | 3.00 | | | $ | 2.76 | | | $ | 2.52 | |

| Net property, plant and equipment(1) | $ | 9,259,182 | | | $ | 8,268,606 | | | $ | 7,416,700 | | | $ | 6,709,926 | | | $ | 6,013,975 | |

| (1) | Amounts shown are net of assets held for sale related to the divestiture of our natural gas marketing business. |

| Operating revenues | $ | 3,349,949 | | | $ | 4,142,136 | | | $ | 4,940,916 | | | $ | 3,875,460 | | | $ | 3,436,162 | |

| Gross profit | $ | 1,744,896 | | | $ | 1,680,017 | | | $ | 1,582,426 | | | $ | 1,412,050 | | | $ | 1,323,739 | |

| Income from continuing operations | $ | 350,104 | | | $ | 315,075 | | | $ | 289,817 | | | $ | 230,698 | | | $ | 192,196 | |

| Diluted net income per share | $ | 3.38 | | | $ | 3.09 | | | $ | 2.96 | | | $ | 2.64 | | | $ | 2.37 | |

| Net property, plant and equipment(2) | $ | 8,280,511 | | | $ | 7,430,580 | | | $ | 6,725,906 | | | $ | 6,030,655 | | | $ | 5,475,604 | |

| | |

| --- | --- |

| (1) | Financial results for fiscal 2012 reflect a $5.3 million pre-tax loss for the impairment of certain assets. |

| (2) | Amounts shown for fiscal 2012 are net of assets held for sale. |

| [Report of independent registered public accounting [removed: firm](#sB9AA3BA755205CF084D3199D3CBBE432)] [added: firm](#s5DFB691370B75189A426F20EFC7EA635)] | [removed: [45](#sB9AA3BA755205CF084D3199D3CBBE432)] [added: [39](#s5DFB691370B75189A426F20EFC7EA635)] |

| Consolidated balance sheets at September 30, [removed: 2016] [added: 2017] and [removed: 2015] [added: 2016] | [removed: [46](#s8ECE97B1DD0C5D2AAF2E89F50D25FFB2)] [added: [40](#sE56C8406D81853569FCCCC435CBD0C45)] |

| Consolidated statements of income for the years ended September 30, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: [47](#s8576A038216D5DABBC4EFCAA8F4C4469)] [added: [41](#s266F27C765065E93BB178F7690495BB3)] |

| Consolidated statements of comprehensive income for the years ended September 30, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: [48](#s09F35AF3A9035800943C1905E5024C7E)] [added: [42](#sAE22F764B8525AFAB87E3975E8F8093A)] |

| Consolidated statements of shareholders' equity for the years ended September 30, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: [49](#s679D7004E6585B5095B7DE8C2BF9E727)] [added: [43](#s4CBC7FF023AF5EA1A7645FDD92BD4A68)] |

| Consolidated statements of cash flow for the years ended September 30, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: [50](#s47E022F085AF5673A3779797EDE097FC)] [added: [44](#s2D993F0C50965746A11626EE5585DA4E)] |

| [Notes to consolidated financial [removed: statements](#s47F041E7A5955B60B2FB01AC3C9EAEBE)] [added: statements](#sEDDB2FAA1B4D57AEBEFDCCCAF6F68C1E)] | [removed: [51](#s47F041E7A5955B60B2FB01AC3C9EAEBE)] [added: [45](#sEDDB2FAA1B4D57AEBEFDCCCAF6F68C1E)] |

| [Selected Quarterly Financial Data [removed: (Unaudited)](#sFF7E8EA5A9B05C15844589D9520D720A)] [added: (Unaudited)](#s41608E524A3C513396172862738C29B8)] | [removed: [97](#sFF7E8EA5A9B05C15844589D9520D720A)] [added: [86](#s41608E524A3C513396172862738C29B8)] |

| Financial statement schedule for the years ended September 30, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | |

| [Schedule II. Valuation and Qualifying [removed: Accounts](#s3F9CFA6F420F589DB72B03C32210CFC4)] [added: Accounts](#s6C0C81182EE655F4AE6C42075733C2BA)] | [removed: [105](#sD30CF6D626E5513DB4A3E328F3B37D60)] [added: [95](#s4C0DEBF7910A5E33A9433356B4A67CDD)] |

We have audited the accompanying consolidated balance sheets of Atmos Energy Corporation as of September 30, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] 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, [removed: 2016.][added: 2017.]

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Atmos Energy Corporation at September 30, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and the consolidated results of its operations and its cash flows for each of the three years in the period ended September 30, [removed: 2016,] [added: 2017,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Atmos Energy Corporation’s internal control over financial reporting as of September 30, [removed: 2016,] [added: 2017,] based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November [removed: 14, 2016] [added: 13, 2017] expressed an unqualified opinion thereon.

| | [added: 2017 | | | |] 2016 | | | | 2015 | | |

| [removed: Property,] [added: Net property,] plant and equipment | $ | [removed: 9,987,078 | | | $ | 8,959,702] [added: 11,905] | |

| Cash and cash equivalents | [removed: 47,534] [added: 26,409] | | | | [removed: 28,653] [added: 47,534] | | |

| Other current assets | [removed: 100,829 | | | | 65,890] [added: 5,968] | | |

| Total current assets | [removed: 681,686] [added: 539,646] | | | | [removed: 626,306] [added: 681,686] | | |

| Deferred charges and other assets | [removed: 305,285] [added: 220,636] | | | | [removed: 275,484] [added: 305,019] | | |

| Common stock, no par value (stated at $.005 per share); 200,000,000 shares authorized; issued and outstanding: [removed: 2016] [added: 2017] — [removed: 103,930,560] [added: 106,104,634] shares, [removed: 2015] [added: 2016] — [removed: 101,478,818] [added: 103,930,560] shares | $ | [removed: 520] [added: 531] | | | $ | [removed: 507] [added: 520] | |

| Additional paid-in capital | [removed: 2,388,027] [added: 2,536,365] | | | | [removed: 2,230,591] [added: 2,388,027] | | |

| Accumulated other comprehensive loss | [removed: (188,022] [added: (105,254] | | ) | | [removed: (109,330] [added: (188,022] | | ) |

| Retained earnings | [removed: 1,262,534] [added: 1,467,024] | | | | [removed: 1,073,029] [added: 1,262,534] | | |

| Shareholders’ equity | [removed: 3,463,059] [added: 3,898,666] | | | | [removed: 3,194,797] [added: 3,463,059] | | |

| Long-term debt | [removed: 2,188,779] [added: 3,067,045] | | | | [removed: 2,437,515] [added: 2,188,779] | | |

| Total capitalization | [removed: 5,651,838] [added: 6,965,711] | | | | [removed: 5,632,312] [added: 5,651,838] | | |

| Accounts payable and accrued liabilities | [removed: 259,434 | | | | 238,942] [added: $] | [added: 72,268] | |

| Short-term debt | [removed: 829,811] [added: 447,745] | | | | [removed: 457,927] [added: 829,811] | | |

| Current maturities of long-term debt | [removed: 250,000] [added: —] | | | | [removed: —] [added: 250,000] | | |

| Total current liabilities | [removed: 1,788,281] [added: 1,013,443] | | | | [removed: 1,154,823] [added: 1,788,281] | | |

| Deferred income taxes | [removed: 1,603,056] [added: 1,878,699] | | | | [removed: 1,411,315] [added: 1,603,056] | | |

| Regulatory cost of removal obligation | [removed: 424,281] [added: 485,420] | | | | [removed: 427,553] [added: 424,281] | | |

| Pension and postretirement liabilities | [removed: 297,743] [added: 230,588] | | | | [removed: 287,373] [added: 297,743] | | |

| Deferred credits and other liabilities | [removed: 245,690] [added: 175,735] | | | | [removed: 161,696] [added: 245,374] | | |

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Operating expenses | [added: 7,874] | | | | [added: 26,184] | | | | [added: 30,076] | | |

| Depreciation and amortization | [removed: 293,096] [added: 319,633] | | | | [removed: 274,796] [added: 293,096] | | | | [removed: 253,987] [added: 274,796] | | |

| Interest charges | [removed: 115,948] [added: 83,087] | | | | [removed: 116,241] [added: 33,154] | | | | [removed: 129,295] [added: —] | | | [added: | — | | | | 116,241 | | |]

| Net [removed: income] [added: Income] | $ | [removed: 350,104] [added: 396,421] | | | $ | [removed: 315,075] [added: 350,104] | | | $ | [removed: 289,817] [added: 315,075] | |

| [removed: Basic net] [added: Net] income per share [added: - basic and diluted] | $ | [removed: 3.38] [added: 3.73] | | | $ | [removed: 3.09] [added: 3.38] | | | $ | [removed: 2.96] [added: 3.09] | |

November 13, 2017

| | 2017 | | | | 2016 | | |

| Property, plant and equipment | $ | 11,001,910 | | | $ | 9,958,627 | |

| Construction in progress | 299,394 | | | | 183,879 | | |

| | 11,301,304 | | | | 10,142,506 | | |

| Less accumulated depreciation and amortization | 2,042,122 | | | | 1,873,900 | | |

| Accounts receivable, less allowance for doubtful accounts of $10,865 in 2017 and $11,056 in 2016 | 222,263 | | | | 215,880 | | |

| Gas stored underground | 184,653 | | | | 179,070 | | |

| Current assets of disposal group classified as held for sale | — | | | | 151,117 | | |

| Goodwill | 730,132 | | | | 726,962 | | |

| Noncurrent assets of disposal group classified as held for sale | — | | | | 28,616 | | |

| | $ | 10,749,596 | | | $ | 10,010,889 | |

| Current liabilities of disposal group classified as held for sale | — | | | | 72,900 | | |

| Other current liabilities | 332,648 | | | | 439,085 | | |

| Noncurrent liabilities of disposal group held for sale | — | | | | 316 | | |

| | $ | 10,749,596 | | | $ | 10,010,889 | |

| Distribution segment | $ | 2,649,175 | | | $ | 2,339,778 | | | $ | 2,821,362 | |

| Pipeline and storage segment | 457,030 | | | | 427,196 | | | | 384,957 | | |

| Intersegment eliminations | (346,470 | | ) | | (312,326 | | ) | | (279,334 | | ) |

| Total operating revenues | 2,759,735 | | | | 2,454,648 | | | | 2,926,985 | | |

| Distribution segment | 1,269,456 | | | | 1,058,576 | | | | 1,574,447 | | |

| Pipeline and storage segment | 2,506 | | | | (58 | | ) | | 562 | | |

| Intersegment eliminations | (346,426 | | ) | | (312,326 | | ) | | (279,334 | | ) |

| Total purchased gas cost | 925,536 | | | | 746,192 | | | | 1,295,675 | | |

| Operation and maintenance expense | 546,798 | | | | 538,592 | | | | 516,406 | | |

| Depreciation and amortization expense | 319,448 | | | | 290,791 | | | | 272,408 | | |

| Taxes, other than income | 240,407 | | | | 221,843 | | | | 230,264 | | |

| Operating income | 727,546 | | | | 657,230 | | | | 612,232 | | |

| Miscellaneous expense, net | (3,270 | | ) | | (234 | | ) | | (819 | | ) |

| Interest charges | 120,182 | | | | 114,812 | | | | 116,241 | | |

| Income from continuing operations before income taxes | 604,094 | | | | 542,184 | | | | 495,172 | | |

| Income tax expense | 221,383 | | | | 196,642 | | | | 189,549 | | |

| Income from continuing operations | 382,711 | | | | 345,542 | | | | 305,623 | | |

| Income from discontinued operations, net of tax ($6,841, $3,731 and $6,141) | 10,994 | | | | 4,562 | | | | 9,452 | | |

| Gain on sale of discontinued operations, net of tax ($10,215, $0 and $0) | 2,716 | | | | — | | | | — | | |

| Income per share from continuing operations | $ | 3.60 | | | $ | 3.33 | | | $ | 3.00 | |

| Income per share from discontinued operations | 0.13 | | | | 0.05 | | | | 0.09 | | |

| Net income | $ | 396,421 | | | $ | 350,104 | | | $ | 315,075 | |

| Net income | — | | | — | | | | — | | | | — | | | | 396,421 | | | | 396,421 | | |

| Other comprehensive income | — | | | — | | | | — | | | | 82,768 | | | | — | | | | 82,768 | | |

Atmos Energy Corporation

November 14, 2016

| Construction in progress | 184,062 | | | | 280,398 | | |

| | 10,171,140 | | | | 9,240,100 | | |

| Less accumulated depreciation and amortization | 1,890,629 | | | | 1,809,520 | | |

| Net property, plant and equipment | 8,280,511 | | | | 7,430,580 | | |

| Accounts receivable, less allowance for doubtful accounts of $13,367 in 2016 and $15,283 in 2015 | 300,007 | | | | 295,160 | | |

| Gas stored underground | 233,316 | | | | 236,603 | | |

| Goodwill | 743,407 | | | | 742,702 | | |

| | $ | 10,010,889 | | | $ | 9,075,072 | |

| Other current liabilities | 449,036 | | | | 457,954 | | |

| Regulated distribution segment | $ | 2,291,866 | | | $ | 2,763,835 | | | $ | 3,061,546 | |

| Regulated pipeline segment | 408,833 | | | | 370,112 | | | | 318,459 | | |

| Nonregulated segment | 1,066,363 | | | | 1,472,209 | | | | 2,067,292 | | |

| Intersegment eliminations | (417,113 | | ) | | (464,020 | | ) | | (506,381 | | ) |

| | 3,349,949 | | | | 4,142,136 | | | | 4,940,916 | | |

| Regulated distribution segment | 1,019,061 | | | | 1,526,258 | | | | 1,885,031 | | |

| Regulated pipeline segment | — | | | | — | | | | — | | |

| Nonregulated segment | 1,002,573 | | | | 1,399,349 | | | | 1,979,337 | | |

| Intersegment eliminations | (416,581 | | ) | | (463,488 | | ) | | (505,878 | | ) |

| | 1,605,053 | | | | 2,462,119 | | | | 3,358,490 | | |

| Gross profit | 1,744,896 | | | | 1,680,017 | | | | 1,582,426 | | |

| Operation and maintenance | 560,766 | | | | 541,868 | | | | 505,154 | | |

| Taxes, other than income | 223,016 | | | | 231,958 | | | | 211,936 | | |

| Total operating expenses | 1,076,878 | | | | 1,048,622 | | | | 971,077 | | |

| Operating income | 668,018 | | | | 631,395 | | | | 611,349 | | |

| Miscellaneous expense, net | (1,593 | | ) | | (4,389 | | ) | | (5,235 | | ) |

| Income before income taxes | 550,477 | | | | 510,765 | | | | 476,819 | | |

| Income tax expense | 200,373 | | | | 195,690 | | | | 187,002 | | |

| Weighted average shares outstanding: | | | | | | | | | | | |

| Basic | 103,524 | | | | 101,892 | | | | 97,606 | | |

| Diluted | 103,524 | | | | 101,892 | | | | 97,608 | | |

| Balance, September 30, 2013 | 90,640,211 | | | $ | 453 | | | $ | 1,765,811 | | | $ | 38,878 | | | $ | 775,267 | | | $ | 2,580,409 | |

| Net income | — | | | — | | | | — | | | | — | | | | 289,817 | | | | 289,817 | | |

| Other comprehensive loss | — | | | — | | | | — | | | | (51,271 | | ) | | — | | | | (51,271 | | ) |

| Repurchase of equity awards | (190,134 | ) | | (1 | | ) | | (8,716 | | ) | | — | | | | — | | | | (8,717 | | ) |

| Public offering | 9,200,000 | | | 46 | | | | 390,159 | | | | — | | | | — | | | | 390,205 | | |

| Direct stock purchase plan | 83,150 | | | 1 | | | | 4,066 | | | | — | | | | — | | | | 4,067 | | |

| 1998 Long-term incentive plan | 653,130 | | | 3 | | | | 5,214 | | | | — | | | | (864 | | ) | | 4,353 | | |

| Outside directors stock-for-fee plan | 1,735 | | | — | | | | 81 | | | | — | | | | — | | | | 81 | | |

Based on this evaluation, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of September 30, [removed: 2016] [added: 2017] to provide reasonable assurance that information required to be disclosed by us, including our consolidated entities, in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms, including a reasonable level of assurance that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Based on our evaluation under the framework in Internal Control-Integrated Framework issued by COSO and applicable Securities and Exchange Commission rules, our management concluded that our internal control over financial reporting was effective as of September 30, [removed: 2016,] [added: 2017,] in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

| [added: President,] Chief Executive Officer and Director | | Senior Vice President and Chief Financial Officer |

We have audited Atmos Energy Corporation’s internal control over financial reporting as of September 30, [removed: 2016,] [added: 2017,] based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Atmos Energy Corporation maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2016,] [added: 2017,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of September 30, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] 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, [removed: 2016] [added: 2017] of Atmos Energy Corporation and our report dated November [removed: 14, 2016] [added: 13, 2017] expressed an unqualified opinion thereon.

We did not make any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Act) during the fourth quarter of the fiscal year ended September 30, [removed: 2016] [added: 2017] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

| /s/ MICHAEL E. HAEFNER | | /s/ CHRISTOPHER T. FORSYTHE |

| Michael E. Haefner | | Christopher T. Forsythe |

| November 13, 2017 | | |

November 13, 2017

| /s/ KIM R. COCKLIN | | /s/ BRET J. ECKERT |

| Kim R. Cocklin | | Bret J. Eckert |

| November 14, 2016 | | |

November 14, 2016

Information regarding directors and compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February [removed: 8, 2017.][added: 7, 2018.]

The following table sets forth certain information as of September 30, [removed: 2016,] [added: 2017,] regarding the executive officers of the Company.

| Kim R. Cocklin | [removed: 65] [added: 66] | | [removed: 10] [added: 11] | | Chief Executive Officer and Director |

| Michael E. Haefner | [removed: 56] [added: 57] | | [removed: 8] [added: 9] | | President and Chief Operating Officer and Director |

| [removed: Bret J. Eckert] [added: Christopher T. Forsythe] | [removed: 49] [added: 46] | | [removed: 4] [added: 14] | | Senior Vice President and Chief Financial Officer |

| [removed: Marvin L. Sweetin] [added: John K. Akers] | [removed: 53] [added: 54] | | [removed: 16] [added: 26] | | Senior Vice President, Safety and Enterprise Services |

| [removed: Louis P. Gregory] [added: Karen E. Hartsfield] | [removed: 61] [added: 47] | | [removed: 16] [added: 2] | | Senior Vice President, General Counsel and Corporate Secretary |

[removed: Cocklin] [added: Haefner] was named President and Chief Executive [removed: Officer] [added: Officer,] effective October 1, [removed: 2010, and Chief Executive Officer of the Company on October 1, 2015.][added: 2017.]

[added: Mr.] Haefner joined the Company in June 2008 as Senior Vice President, Human Resources.

[removed: Sweetin] [added: Park] was named Senior Vice [removed: President,] [added: President of] Utility [removed: Operations in November 2011.][added: Operations, effective January 1, 2017.]

In this role, Mr. [removed: Sweetin was] [added: Park is] responsible for the operations of [removed: our] [added: Atmos Energy’s] six utility [removed: divisions,] [added: divisions] as well as [removed: customer service, safety and training.][added: gas supply.]

[removed: Gregory] [added: Hartsfield] was named Senior Vice [removed: President and] [added: President,] General Counsel [removed: in September 2000 as well as] [added: and] Corporate Secretary [removed: in June 2012.][added: of Atmos Energy, effective August 7, 2017.]

[removed: Park] [added: (Matt) Robbins] was named Senior Vice [removed: President of Utility Operations on October 28, 2016,] [added: President, Human Resources,] effective January 1, 2017.

Prior to this promotion, Mr. Park served as the President of the West Texas [removed: Division.][added: Division from July 2012 to December 2016.]

Mr. Park [removed: has] also served as Vice President of Rates and Regulatory Affairs in the Mid-Tex Division and previously held positions in Engineering and Public Affairs.

Identification of the members of the Audit Committee of the Board of Directors as well as the Board of Directors’ determination as to whether one or more audit committee financial experts are serving on the Audit Committee of the Board of Directors is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February [removed: 8, 2017.][added: 7, 2018.]

| David J. Park | 46 | | 13 | | Senior Vice President, Utility Operations |

| John M. Robbins | 47 | | 4 | | Senior Vice President, Human Resources |

Cocklin was named Executive Chairman of the Board on October 1, 2017.

From October 1, 2010 through September 30, 2015, Mr. Cocklin served the Company as President and Chief Executive Officer and from October 1, 2015 through September 30, 2017, as Chief Executive Officer.

Christopher T.

Forsythe was named Senior Vice President and Chief Financial Officer effective February 1, 2017.

Mr. Forsythe joined the Company in June 2003 and prior to his promotion, served as the Company's Vice President and Controller from May 2009 through January 2017.

John K.

(Kevin) Akers was named Senior Vice President, Safety and Enterprise Services, effective January 1, 2017.

In this role, Mr. Akers is responsible for customer service, safety and training, supply chain and facilities management and

workforce development.

Prior to his promotion, Mr. Akers served as the President of the Kentucky/Mid-States Division from May 2007 to December 2016.

Mr. Akers also previously served as the President of the Mississippi Division.

Karen E.

Ms. Hartsfield joined the Company in June 2015, after having served in private practice for 19 years, most recently as Managing Partner of Jackson Lewis LLP in its Dallas office from July 2013 to June 2015.

Prior to joining Jackson Lewis as a partner in January 2009, Ms. Hartsfield was a partner with Baker Botts LLP in Dallas.

John M.

Mr. Robbins joined the Company in May 2013 and prior to this promotion served as Vice President, Human Resources from February 2015 to December 2016.

Before joining Atmos Energy, Matt had over 20 years of experience in human resources.

Bret J.

Eckert joined the Company in June 2012 as Senior Vice President, and on October 1, 2012 he was appointed Chief Financial Officer.

Prior to joining the Company, Mr. Eckert was an Assurance Partner with Ernst & Young LLP where he developed extensive accounting and financial experience in the natural gas industry over his 22-year career.

Marvin L.

On October 1, 2015, Mr. Sweetin was promoted to the position of Senior Vice President of Safety and Enterprise Services.

In addition to having overall responsibility for safety and compliance for the Company, Mr. Sweetin has responsibility for business process and change management, new operations technology evaluation and deployment, supply chain and facilities management and workforce development.

On November 3, 2016, Mr. Sweetin notified the Board of Directors of his retirement from the Company effective December 31, 2016.

Louis P.

In this role, Mr. Park will be responsible for the operations of Atmos Energy’s six utility divisions as well as gas supply.

Information on executive compensation is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February [removed: 8, 2017.][added: 7, 2018.]

Security ownership of certain beneficial owners and of management is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February [removed: 8, 2017.][added: 7, 2018.]

Information on certain relationships and related transactions as well as director independence is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February [removed: 8, 2017.][added: 7, 2018.]

Information on our principal accountant’s fees and services is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February [removed: 8, 2017.][added: 7, 2018.]

The exhibits numbered 10.3(a) through [removed: 10.12] [added: 10.11(c)] are management contracts or compensatory plans or arrangements.

| | | | | [removed: Bret J. Eckert] [added: Christopher T. Forsythe] Senior Vice President and Chief Financial Officer |

Date: November [removed: 14, 2016][added: 13, 2017]

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints [removed: Kim R.][added: Michael E.]

[removed: Eckert,] [added: Forsythe,] or either of them acting alone or together, as his true and lawful attorney-in-fact and agent with full power to act alone, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, may lawfully do or cause to be done by virtue hereof.

| /s/ [removed: KIM R. COCKLIN] [added: MICHAEL E. HAEFNER] | | [added: President,] Chief Executive Officer and Director | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ [removed: BRET J. ECKERT] [added: CHRISTOPHER T. FORSYTHE] | | Senior Vice President and Chief Financial Officer | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ [removed: CHRISTOPHER T. FORSYTHE] [added: RICHARD M. THOMAS] | | Vice President and Controller (Principal Accounting Officer) | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ KELLY H. COMPTON | | Director | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ RICHARD W. DOUGLAS | | Director | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ RUBEN E. ESQUIVEL | | Director | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ RAFAEL G. GARZA | | Director | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ RICHARD K. GORDON | | Director | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ ROBERT C. GRABLE | | Director | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ NANCY K. QUINN | | Director | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ RICHARD A. SAMPSON | | Director | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ STEPHEN R. SPRINGER | | Director | | November [removed: 14, 2016] [added: 13, 2017] |

| /s/ RICHARD WARE II | | Director | | November [removed: 14, 2016] [added: 13, 2017] |

Three Years Ended September 30, [removed: 2016][added: 2017]

| | | By: | | /s/ CHRISTOPHER T. FORSYTHE |

Haefner and Christopher T.

| Richard M. Thomas | | | | |

| /s/ KIM R. COCKLIN | | Executive Chairman of the Board | | November 13, 2017 |

| /s/ ROBERT W. BEST | | Director | | November 13, 2017 |

| 2017 | | | | | | | | | | | | | | | | | | | | |

| Allowance for doubtful accounts | $ | 11,056 | | | $ | 12,269 | | | $ | — | | | $ | 12,460 | | (1) | | $ | 10,865 | |

| Allowance for doubtful accounts | $ | 12,934 | | | $ | 10,414 | | | $ | — | | | $ | 12,292 | | (1) | | $ | 11,056 | |

| Allowance for doubtful accounts | $ | 20,659 | | | $ | 15,923 | | | $ | — | | | $ | 23,648 | | (1) | | $ | 12,934 | |

| | | | | |

| | | By: | | /s/ BRET J. ECKERT |

Cocklin and Bret J.

| /s/ MICHAEL E. HAEFNER | | President, Chief Operating Officer and Director | | November 14, 2016 |

| Bret J. Eckert | | | | |

| /s/ ROBERT W. BEST | | Chairman of the Board | | November 14, 2016 |

| /s/ THOMAS C. MEREDITH | | Director | | November 14, 2016 |

| Thomas C. Meredith | | | | |

| Allowance for doubtful accounts | $ | 15,283 | | | $ | 10,397 | | | $ | — | | | $ | 12,313 | | (1) | | $ | 13,367 | |

| Allowance for doubtful accounts | $ | 23,992 | | | $ | 15,082 | | | $ | — | | | $ | 23,791 | | (1) | | $ | 15,283 | |

| 2014 | | | | | | | | | | | | | | | | | | | | |

| Allowance for doubtful accounts | $ | 20,624 | | | $ | 19,491 | | | $ | — | | | $ | 16,123 | | (1) | | $ | 23,992 | |

| 2.1 | | Membership Interest Purchase Agreement by and between Atmos Energy Holdings, Inc. as Seller and CenterPoint Energy Services, Inc. as Buyer, dated as of October [removed: 29] [added: 29,] 2016 | | [removed: Exhibit] [added: [Exhibit] 2.1 to Form 8-K dated October 29, 2016 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312516753686/d283961dex21.htm)] |

| 3.1 | | Restated Articles of Incorporation of Atmos Energy Corporation - Texas (As Amended Effective February 3, 2010) | | [removed: Exhibit] [added: [Exhibit] 3.1 to Form 10-Q dated March 31, 2010 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095012310045280/d72740exv3w1.htm)] |

| 3.2 | | Restated Articles of Incorporation of Atmos Energy Corporation - Virginia (As Amended Effective February 3, 2010) | | [removed: Exhibit] [added: [Exhibit] 3.2 to Form 10-Q dated March 31, 2010 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095012310045280/d72740exv3w2.htm)] |

| 3.3 | | Amended and Restated Bylaws of Atmos Energy Corporation (as of September 28, 2015) | | [removed: Exhibit] [added: [Exhibit] 3.1 to Form 8-K dated September 28, 2015 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312515330944/d29285dex31.htm)] |

| 4.1 | | Specimen Common Stock Certificate (Atmos Energy Corporation) | | [removed: Exhibit] [added: [Exhibit] 4.1 to Form 10-K for fiscal year ended September 30, 2012 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312512466518/d434993dex41.htm)] |

| 4.2 | | Indenture dated as of November 15, 1995 between United Cities Gas Company and Bank of America Illinois, Trustee | | [removed: Exhibit] [added: [Exhibit] 4.11(a) to Form S-3 dated August 31, 2004 (File No. [removed: 333-118706)] [added: 333-118706)](http://www.sec.gov/Archives/edgar/data/731802/000095013404013042/d18054exv4w11xay.txt)] |

| 4.3 | | Indenture dated as of July 15, 1998 between Atmos Energy Corporation and U.S. Bank Trust National Association, Trustee | | [removed: Exhibit] [added: [Exhibit] 4.8 to Form S-3 dated August 31, 2004 (File No. [removed: 333-118706)] [added: 333-118706)](http://www.sec.gov/Archives/edgar/data/731802/000095013404013042/d18054exv4w8.txt)] |

| 4.4 | | Indenture dated as of May 22, 2001 between Atmos Energy Corporation and SunTrust Bank, Trustee | | [removed: Exhibit] [added: [Exhibit] 99.3 to Form 8-K dated May 15, 2001 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000093066101500728/dex993.txt)] |

| 4.5 | | Indenture dated as of June 14, 2007, between Atmos Energy Corporation and U.S. Bank National Association, Trustee | | [removed: Exhibit] [added: [Exhibit] 4.1 to Form 8-K dated June 11, 2007 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095013407013414/d47544exv4w1.htm)] |

| 4.6 | | Indenture dated as of March 23, 2009 between Atmos Energy Corporation and U.S. Bank National Corporation, Trustee | | [removed: Exhibit] [added: [Exhibit] 4.1 to Form 8-K dated March 26, 2009 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095013409006158/d66980exv4w1.htm)] |

| 4.7(a) | | Debenture Certificate for the 6 3/4% Debentures due 2028 | | [removed: Exhibit] [added: [Exhibit] 99.2 to Form 8-K dated July 22, 1998 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/0000950134-98-006211.txt)] |

| 4.7(b) | | Global Security for the 5.95% Senior Notes due 2034 | | [removed: Exhibit] [added: [Exhibit] 10(2)(g) to Form 10-K for fiscal year ended September 30, 2004 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095013404017924/d20385exv10w2xgy.txt)] |

| [removed: 4.7(c)] [added: 4.7(g)] | | Global Security for the [removed: 6.35%] [added: 3.000%] Senior Notes due [removed: 2017] [added: 2027] | | [removed: Exhibit] [added: [Exhibit] 4.2 to Form 8-K dated June [removed: 11, 2007] [added: 8, 2017] (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312517198618/d411353dex42.htm)] |

| [removed: 4.7(d)] [added: 4.7(c)] | | Global Security for the 8.50% Senior Notes due 2019 | | [removed: Exhibit] [added: [Exhibit] 4.2 to Form 8-K dated March 26, 2009 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095013409006158/d66980exv4w2.htm)] |

| [removed: 4.7(e)] [added: 4.7(d)] | | Global Security for the 5.5% Senior Notes due 2041 | | [removed: Exhibit] [added: [Exhibit] 4.2 to Form 8-K dated June 10, 2011 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095012311058729/d82963exv4w2.htm)] |

| [removed: 4.7(f)] [added: 4.7(e)] | | Global Security for the 4.15% Senior Notes due 2043 | | [removed: Exhibit] [added: [Exhibit] 4.2 to Form 8-K dated January 8, 2013 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312513010106/d466114dex42.htm)] |

| [removed: 4.7(g)] [added: 4.7(f)] | | Global Security for the 4.125% Senior Notes due 2044 | | [removed: Exhibit] [added: [Exhibit] 4.2 to Form 8-K dated October 15, 2014 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180214000028/ato20141017exhibit42.htm)] |

| 10.1(a) | | Revolving Credit Agreement, dated as of September 25, 2015 among Atmos Energy Corporation, the Lenders from time to time parties thereto, Crédit Agricole Corporate and Investment Bank as Administrative Agent, and Mizuho Bank Ltd., as Syndication Agent | | [removed: Exhibit] [added: [Exhibit] 10.1 to Form 8-K dated October 1, 2015 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312515335478/d39736dex101.htm)] |

| 10.1(b) | | First Amendment to Revolving Credit Agreement, dated as of October 5, 2016, by and among Atmos Energy Corporation, the lenders from time to time parties thereto (the "Lenders") and Credit Agricole Corporate and Investment Bank, in its capacity as administrative agent for the Lenders | | [removed: Exhibit] [added: [Exhibit] 10.1 to Form 8-K dated October 5, 2016 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180216000059/ato20161005exhibit101.htm)] |

| 10.1(c) | | Term Loan Agreement, dated as of September 22, 2016, by and among Atmos Energy Corporation, the Lenders from time to time parties thereto and Branch Banking and Trust Company as Administrative Agent | | [removed: Exhibit] [added: [Exhibit] 10.1 to Form 8-K dated September 22, 2016 (File No. [removed: 1-10042)] [added: 1-10042](http://www.sec.gov/Archives/edgar/data/731802/000073180216000057/ato20160922exhibit101.htm))] |

| 10.2 | | Equity Distribution Agreement, dated as of March 28, 2016, among Atmos Energy Corporation, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC. | | [removed: Exhibit] [added: [Exhibit] 1.1 to Form 8-K dated March 28, 2016 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312516519807/d168211dex11.htm)] |

| 10.3(a)* | | Form of Atmos Energy Corporation Change in Control Severance Agreement - Tier I | | [removed: Exhibit] [added: [Exhibit] 10.7(a) to Form 10-K for fiscal year ended September 30, 2010 (File No. [removed: 1-10042)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095012310105040/d77592exv10w7wa.htm)] |