Atmos Energy (ATO) 10-K risk factor changes: FY2018 vs FY2017

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

These mechanisms work to effectively reduce the regulatory lag [removed: inherent in the ratemaking process.]

Any adverse changes in economic conditions in the United States, especially in the states in which we operate, could adversely affect the financial resources of many domestic [removed: households and lead to an increase in mortgage defaults and significant decreases in the values of our customers’ homes and investment assets.][added: households.]

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

[removed: Inflation and increased] [added: Increased] gas costs could adversely impact our customer base and customer collections and increase our level of indebtedness.

[removed: In addition, rapid] [added: Rapid] increases in the costs of purchased gas would cause us to experience a significant increase in short-term debt.

We are exposed to market risks that are beyond our control, which could adversely affect our financial [removed: results and capital requirements.][added: results.]

[removed: Over 50] [added: Approximately 70] percent of our [removed: distribution customers and most of our pipeline and storage assets and] [added: consolidated] operations are located in the State of Texas.

This could adversely impact our business [removed: if, as a result,] [added: if] our customer growth [removed: slows, reducing our ability to make capital expenditures,] [added: slows] or if our customers further conserve their use of gas, resulting in reduced gas purchases and customer billings.

We have weather-normalized rates for [removed: over 95] [added: approximately 97] percent of our residential and commercial meters in our distribution operations, which substantially mitigates the adverse effects of warmer-than-normal weather for meters in those service areas.

We must make significant capital expenditures [removed: to renew or replace our facilities] on a long-term basis to [added: modernize our distribution and transmission system to] improve the safety and reliability [removed: of our facilities] and to comply with the safety rules and regulations issued by the regulatory authorities responsible for the service areas we operate.

[removed: The] [added: Although the] average age of the employee base of Atmos Energy [removed: has been increasing for a number of years, with] [added: is not significantly changing year over year, there are still] a number of employees [removed: becoming] [added: who will become] eligible to retire within the next five to 10 years.

If we were unable to hire appropriate personnel [added: or contractors] to fill future needs, the Company could encounter operating challenges and increased costs, primarily due to a loss of knowledge, errors due to inexperience or the lengthy time period typically required to adequately train replacement personnel.

In addition, higher costs could result from [removed: the increased use of contractors to replace retiring employees,] loss of productivity or increased safety compliance issues.

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

However, in recent years, natural gas distribution and pipeline companies have [removed: continued to face] [added: faced] increasing federal, state and local oversight of the safety of their operations.

We are [added: also] subject to laws, regulations and other legal requirements enacted or adopted by federal, state and local governmental authorities relating to protection of the environment and health and safety matters, including those that govern discharges of substances into the air and water, the management and disposal of hazardous substances and waste, the clean-up of contaminated sites, groundwater quality and availability, plant and wildlife protection, as well as work practices related to employee health and safety.

If we were unable to deliver natural gas to our customers, our financial results would be impacted by lost revenues, and we generally would have to [removed: seek approval from regulators to recover restoration costs.]

inherent in the ratemaking process.

Our operations involve a number of hazards and operating risks inherent in storing and transporting natural gas that could affect the public safety and reliability of our distribution system.

While Atmos Energy, with the support from each of its regulatory commissions, is accelerating the replacement of aging pipeline infrastructure, operating issues such as as leaks, accidents, equipment problems and incidents, including explosions and fire, could result in legal liability, repair and remediation costs, increased operating costs, significant increased capital expenditures, regulatory fines and penalties and other costs and a loss of customer confidence.

satisfy our liquidity requirements.

seek approval from regulators to recover restoration costs.

Over time, inflation has caused increases in some of our operating expenses and has required assets to be replaced at higher costs.

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

Historically, we have been able to budget and control operating expenses and investments within the amounts authorized to be collected in rates and intend to continue to do so.

However, the ability to control expenses is an important factor that could impact future financial results.

We are subject to environmental regulations which could adversely affect our operations or financial results.

Our 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.

These risks and uncertainties include the following: [removed: our ability to continue to access the credit] [added: state] and [removed: capital markets to satisfy our liquidity requirements;] [added: local] regulatory trends and decisions, including the impact of rate proceedings before various state regulatory commissions; [added: increased federal regulatory oversight and potential penalties; possible increased federal, state and local regulation of] the [removed: impact] [added: safety] of [removed: adverse economic conditions on] our [removed: customers;] [added: operations;] the [removed: effects of inflation] [added: inherent hazards] and [removed: changes] [added: risks involved] in [removed: the availability] [added: distributing, transporting] and [removed: price of] [added: storing] natural gas; the [removed: availability and accessibility] [added: capital-intensive nature] of [removed: contracted gas supplies, interstate pipeline and/or storage services;] [added: our business; our ability to continue to access the credit and capital markets to execute our business strategy;] market risks beyond our control affecting our risk management activities, including commodity price volatility, counterparty [removed: creditworthiness or] performance [added: or creditworthiness] and interest rate risk; the concentration of our [removed: distribution and pipeline and storage] operations in Texas; [added: the impact of adverse economic conditions on our customers; changes in the availability and price of natural gas; the availability and accessibility of contracted gas supplies, interstate pipeline and/or storage services;] increased competition from energy suppliers and alternative forms of energy; adverse weather conditions; [removed: the capital-intensive nature of our distribution and pipeline and storage businesses;] increased costs of providing health care [removed: benefits] [added: benefits,] along with pension and postretirement health care benefits and increased funding requirements; the inability to continue to hire, train and retain [removed: appropriate personnel; possible increased federal, state and local regulation of the safety of our operations; increased federal regulatory oversight] [added: operational, technical] and [removed: potential penalties; the impact of environmental regulations on our business;] [added: managerial personnel;] the impact of climate change or related additional legislation or regulation in the future; the [removed: 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 [removed: systems;] [added: systems or result in the loss or exposure of confidential or sensitive customer, employee or Company information;] 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.

Non-GAAP Financial [removed: Measure][added: Measures]

[removed: The] [added: Our operations are affected by the] cost of [removed: gas] [added: natural gas, which] 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.

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

As such, the following discussion and analysis of our financial performance will reference [removed: gross profit] [added: Contribution Margin] rather than operating revenues and purchased gas cost individually.

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

[removed: In recent years we] [added: We] have [removed: implemented] [added: the ability to begin recovering a significant portion of these investments timely through] rate designs [added: and mechanisms] that reduce or eliminate regulatory lag and separate the recovery of our approved rate from customer usage patterns.

Capital expenditures for fiscal [removed: 2017] [added: 2018] totaled [removed: $1,137.1] [added: $1,467.6] million.

We funded [removed: over 75 percent of] our current-year capital [removed: expenditure] [added: expenditures] program primarily through operating cash flows of [removed: $867.1] [added: $1,124.7] million.

The net proceeds from [removed: these issuances] [added: the issuance] were primarily used to repay [removed: maturing long-term debt, reduce] short-term debt [added: under our commercial paper program, to fund capital spending] and for general corporate [removed: purposes, including funding a portion of our fiscal 2017 capital expenditures.][added: purposes.]

As a result of the continued contribution and stability of our earnings, cash flows and capital structure, our Board of Directors increased the quarterly dividend by [removed: 7.8] [added: 8.2%] percent for fiscal [removed: 2018.][added: 2019.]

The following table presents our consolidated financial highlights for the fiscal years ended September 30, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015.][added: 2016.]

| | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Operating revenues | $ | [removed: 2,759,735] [added: 3,115,546] | | | $ | [removed: 2,454,648] [added: 2,759,735] | | | $ | [removed: 2,926,985] [added: 2,454,648] | |

| Purchased gas cost | [removed: 925,536] [added: 1,167,848] | | | | [removed: 746,192] [added: 925,536] | | | | [removed: 1,295,675] [added: 746,192] | | |

| Operating expenses | [removed: 1,106,653] [added: 1,224,564] | | | | [removed: 1,051,226] [added: 1,106,653] | | | | [removed: 1,019,078] [added: 1,051,226] | | |

| Operating income | [removed: 727,546] [added: 723,134] | | | | [removed: 657,230] [added: 727,546] | | | | [removed: 612,232] [added: 657,230] | | |

| Interest charges | [removed: 120,182] [added: 106,646] | | | | [removed: 114,812] [added: 120,182] | | | | [removed: 116,241] [added: 114,812] | | |

| Income from continuing operations before income taxes | [removed: 604,094] [added: 611,144] | | | | [removed: 542,184] [added: 604,094] | | | | [removed: 495,172] [added: 542,184] | | |

| Net income from continuing operations | [removed: 382,711] [added: 603,064] | | | | [removed: 345,542] [added: 382,711] | | | | [removed: 305,623] [added: 345,542] | | |

| Net income from discontinued operations | [removed: 13,710] [added: —] | | | | [removed: 4,562] [added: 13,710] | | | | [removed: 9,452] [added: 4,562] | | |

| Net income | $ | [removed: 396,421] [added: 603,064] | | | $ | [removed: 350,104] [added: 396,421] | | | $ | [removed: 315,075] [added: 350,104] | |

| Diluted net income from continuing operations per share | $ | [removed: 3.60] [added: 5.43] | | | $ | [removed: 3.33] [added: 3.60] | | | $ | [removed: 3.00] [added: 3.33] | |

| Diluted net income from discontinued operations per share | [removed: 0.13] [added: —] | | | | [removed: 0.05] [added: 0.13] | | | | [removed: 0.09] [added: 0.05] | | |

| Diluted net income per share | $ | [removed: 3.73] [added: 5.43] | | | $ | [removed: 3.38] [added: 3.73] | | | $ | [removed: 3.09] [added: 3.38] | |

| Distribution segment | $ | [removed: 268,369] [added: 442,966] | | | $ | [removed: 233,830] [added: 268,369] | | | $ | [removed: 205,820] [added: 233,830] | |

| Pipeline and storage segment | [removed: 114,342] [added: 160,098] | | | | [removed: 111,712] [added: 114,342] | | | | [removed: 99,803] [added: 111,712] | | |

| Net income from discontinued natural gas marketing operations | [removed: 13,710] [added: —] | | | | [removed: 4,562] [added: 13,710] | | | | [removed: 9,452] [added: 4,562] | | |

[removed: Gross profit] [added: Contribution margin] 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 associated tax expense as a component of taxes, other than [removed: income.]

Although changes in revenue related taxes arising from changes in gas costs affect [removed: gross profit,] [added: Contribution Margin,] over time the impact is offset within operating income.

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

During fiscal [removed: 2017,] [added: 2018,] we completed [removed: 18] [added: 16] regulatory proceedings in our distribution segment, [removed: which should result] [added: resulting] in [removed: a $91.2] [added: an $8.9] million increase in annual operating income.

Financial and operational highlights for our distribution segment for the fiscal years ended September 30, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] are presented below.

| | For the Fiscal Year Ended September 30 | | | | | | | | | | | [removed: | | | | | | | |]

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

| | (In thousands, unless otherwise noted) | | | | | | | | | | | [removed: | | | | | | | |]

| Operating revenues | $ | [removed: 2,649,175] [added: 3,003,047] | | | $ | [removed: 2,339,778] [added: 2,649,175] | | | $ | [removed: 2,821,362] [added: 2,339,778] | | | $ | [removed: 309,397] [added: 353,872] | | | $ | [removed: (481,584] [added: 309,397] | [removed: )] |

| Purchased gas cost | [removed: 1,269,456] [added: 1,559,836] | | | | [removed: 1,058,576] [added: 1,269,456] | | | | [removed: 1,574,447] [added: 1,058,576] | | | | [removed: 210,880] [added: 290,380] | | | | [removed: (515,871] [added: 210,880] | | [removed: )] |

| Operating expenses | [removed: 874,077] [added: 962,344] | | | | [removed: 839,318] [added: 874,077] | | | | [removed: 824,223] [added: 839,318] | | | | [removed: 34,759] [added: 88,267] | | | | [removed: 15,095] [added: 34,759] | | |

Further, the term Contribution Margin is not intended to represent operating income, the most comparable GAAP financial measure, as an indicator of operating performance and is not necessarily comparable to similarly titled measures reported by other companies.

As described further in Note 12, the enactment of the Tax Cuts and Jobs Act of 2017 (the "TCJA") required us to remeasure our deferred tax assets and liabilities at our new federal statutory income tax rate as of December 22, 2017.

The remeasurement of our net deferred tax liabilities resulted in the recognition of a non-cash income tax benefit of $158.8 million for the fiscal year ended September 30, 2018.

Due to the non-recurring nature of this benefit, we believe that income from continuing operations and diluted earnings per share from continuing operations before the non-cash income tax benefit provide a more relevant measure to analyze our financial performance than income from continuing operations and consolidated diluted earnings per share from continuing operations in order to allow investors to better analyze our core results and allow the information to be presented on a comparative basis to the prior year.

Accordingly, the following discussion and analysis of our financial performance will reference adjusted income from continuing operations and diluted earnings per share, which is calculated as follows:

| | 2018 | | | | 2017 | | | | Change | | |

| Income from continuing operations | $ | 603,064 | | | $ | 382,711 | | | $ | 220,353 | |

| TCJA non-cash income tax benefit | (158,782 | | ) | | — | | | | (158,782 | | ) |

| Adjusted income from continuing operations | $ | 444,282 | | | $ | 382,711 | | | $ | 61,571 | |

| Consolidated diluted EPS from continuing operations | $ | 5.43 | | | $ | 3.60 | | | $ | 1.83 | |

| Diluted EPS from TCJA non-cash income tax benefit | (1.43 | | ) | | — | | | | (1.43 | | ) |

| Adjusted diluted EPS from continuing operations | $ | 4.00 | | | $ | 3.60 | | | $ | 0.40 | |

Our commitment to modernizing our natural gas distribution and transmission systems requires a significant level of capital spending.

The execution of our capital spending program, the ability to recover these investments timely and our ability to access the capital markets to satisfy our financing needs are the primary drivers that affect our financial performance.

During fiscal 2018, we recorded income from continuing operations of $603.1 million, or $5.43 per diluted share, compared to income from continuing operations of $382.7 million, or $3.60 per diluted share in the prior year.

After adjusting for the nonrecurring benefit recognized after implementing the TCJA, we recognized adjusted income from continuing operations of $444.3 million, or $4.00 per diluted share for the year ended September 30, 2018, compared to adjusted income from continuing operations of $382.7 million, or $3.60 per diluted share for the year ended September 30, 2017.

The year-over-year increase of $61.6 million, or 16 percent, largely reflects rate increases driven by safety and reliability spending, weather that was 36 percent colder than the prior year, customer growth in our distribution business and the impact of the TCJA on our effective income tax rate, partially offset by reduced revenues as a result of implementing the TCJA.

During the year ended September 30, 2018, we completed 18 regulatory proceedings, resulting in an increase in annual operating income of $80.1 million and had 11 ratemaking efforts in progress at September 30, 2018, seeking a total increase in annual operating income of $52.8 million.

Additionally, we issued $400 million of common stock during the year ended September 30, 2018.

On October 4, 2018, we completed a public offering of $600 million 4.30% senior notes due 2048.

We received net proceeds from the offering, after underwriting discount and estimated offering expenses of approximately $591 million, that were used to repay working capital borrowings pursuant to our commercial paper program.

The effective interest rate of these notes is 4.37% after giving effect to the offering costs.

TCJA Impact

The TCJA introduced several significant changes to corporate income tax laws in the United States, which have been reflected in our consolidated financial statements for the year ended September 30, 2018.

As a rate regulated entity, the effects of lower tax rates included in our cost of service rates will ultimately flow through to our utility customers in the form of adjusted rates.

Therefore, the favorable impact of the reduction in our federal statutory income tax rate on our financial performance will be limited to items that impact our income before income taxes in the current period that have not yet been reflected in our rates (most notably increases to and decreases in commission-approved regulatory assets and liabilities recorded on our consolidated balance sheet) and market-based revenues that are earned from customers who utilize our assets.

Note 12 to the consolidated financial statements details the various impacts of the TCJA on our financial position and results from operations.

The most significant changes are summarized as follows:

| • | Because our fiscal year started on October 1, 2017, our federal statutory income tax rate for fiscal 2018 was reduced from 35% to 24.5%. Our effective income tax rate for fiscal 2018 was 27.5%, before the effect of the return of the excess deferred tax liability and the one-time, non-cash income tax benefit. Our federal statutory income tax rate declined to 21% on October 1, 2018. |

| • | As a result of implementing the TCJA, we remeasured our net deferred tax liability using our new federal statutory income tax rate, which reduced our net deferred tax liability by $905.3 million. Of this amount, $746.5 million was reclassified to a regulatory liability called excess deferred tax liability. The remaining $158.8 million was recognized as a one-time, non-cash income tax benefit in our consolidated statement of income for the year ended September 30, 2018. |

| • | Atmos Energy supports our regulators' efforts to ensure our utility customers receive the full benefits of changes in our cost of service rates arising from tax reform. Income taxes, like other costs, are passed through to our customers in our rates; however, changes to customer rates must be approved by our regulators. |

| ◦ | Beginning in the second quarter of fiscal 2018, we established regulatory liabilities in all our jurisdictions for the difference in taxes included in our cost of service rates that have been calculated based on a 35% statutory income tax rate and a 21% statutory income tax rate, which reduced our revenues. We have received approval from most of our regulators to adjust customer rates for the lower statutory income tax rate. |

| ◦ | We have also received approval from regulators in several of our states to return amounts to customers related to the regulatory liability recorded for differences in our cost of service rates due to the change in the statutory income tax rate within one year. |

| ◦ | We have received approval from regulators in several of our states to begin returning the Excess Deferred Tax Liability created upon implementation of the TCJA, as discussed above, over a period ranging from 18 to 40 years. For the year ended September 30, 2018, we amortized $1.6 million of this regulatory liability. |

| • | The enactment of the TCJA is expected to reduce our future cash flows from operations primarily due to 1) the collection of taxes at a lower rate and 2) the return of regulatory liabilities established in response to the enactment of the TCJA and regulatory activities to our utility customers. We intend to externally finance this reduction in operating cash flow in a balanced fashion in order to maintain an equity-to-total-capitalization ratio ranging from 50% to 60% to maintain our current credit ratings. |

| | (In thousands, except per share data) | | | | | | | | | | |

| Income tax expense | 166,862 | | | | 221,383 | | | | 196,642 | | |

| One-time, non-cash income tax benefit | (158,782 | | ) | | — | | | | — | | |

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

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

Our operations are affected by the cost of natural gas.

Additionally, we have significantly increased investments in the safety and reliability of our natural gas distribution and transmission infrastructure.

This increased level of investment and timely recovery of these investments through our various regulatory mechanisms has resulted in increased earnings and operating cash flow in recent years.

This trend continued during fiscal 2017 as net income increased to $396.4 million, or $3.73 per diluted share for the year ended September 30, 2017, compared with net income of $350.1 million or $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 12 percent warmer than the prior year.

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.

The proceeds from the sale were redeployed to fund infrastructure investments in our remaining businesses.

As a result of the sale, we have fully exited the nonregulated gas marketing business.

Fiscal 2016 and 2017 spending under these and other mechanisms enabled the Company to complete 19 regulatory filings during fiscal 2017 that should increase annual operating income from regulated operations by $104.2 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.

As we continue to invest in the safety and reliability of our distribution and transmission systems, we expect our capital spending will increase in future periods.

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.

under our credit facilities resulting in higher interest expense.

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

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

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

| • | a $47.5 million net increase in rate adjustments. Our Mid-Tex Division accounted for $20.9 million of this increase. We also experienced increases in our Mississippi and West Texas Divisions. |

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

| • | Customer growth, primarily in our Mid-Tex, Louisiana and Tennessee service areas, which contributed an incremental $6.6 million. |

Net income for the year ended September 30, 2016 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.

are derived from the transportation of natural gas.

Further, natural gas price differences between the various hubs that we serve determine the market value for transportation services between those geographic areas.

However, GRIP also requires a utility to file a statement of intent at least once every five years to review its costs and expenses, including capital costs filed for recovery under GRIP.

On August 1, 2017, a final order was issued in our most recent APT rate case, resulting in a $13 million increase in annual operating income.

This agreement replaces the existing agreement that expired in September 2017.

| Gross profit | 454,524 | | | | 427,254 | | | | 384,395 | | | | 27,270 | | | | 42,859 | | |

Net income for our pipeline and storage segment increased 12 percent, primarily due to a $42.9 million increase in gross profit, partially offset by a $17.1 million increase in operating expenses.

The increase in gross profit primarily reflects a $39.6 million increase in rates from the approved 2015 and 2016 GRIP filings.

Additionally, gross profit reflects a $3.6 million increase from the sale of excess retention gas, which was offset by a $4.0 million decrease in through-system volumes and lower storage and blending fees due to warmer weather in the current year compared to the prior year.

Accordingly, these operations have been reported as discontinued operations.

| Gross profit | 25,920 | | | | 36,972 | | | | 49,239 | | | | (11,052 | | ) | | (12,267 | | ) |

Net income for our natural gas marketing segment decreased 52 percent compared to fiscal 2015 primarily due to lower gross profit.

The $12.3 million year-over-year decrease in gross profit was primarily due to a decrease in asset optimization margins combined with a decrease in delivered gas margins.

As a result of warmer weather, we modified storage positions to meet customer needs throughout the winter and captured less favorable spread values on the related supply repurchases.

Additionally, we experienced an increase in storage demand fees related primarily to higher park and loan activity.

Delivered gas margins decreased primarily due to a three percent decrease in consolidated sales volumes due to warmer weather.

Interest-rate risk [removed: results from our portfolio of debt and equity instruments that] [added: is the potential increased cost] we [added: could incur when we] issue [added: debt instruments or] to provide financing and liquidity for our business activities.

We conduct risk management activities in our [removed: distribution,] [added: distribution and] pipeline and storage [removed: segments, and formerly, in our natural gas marketing segment.][added: segments.]

Had interest rates associated with our short-term borrowings increased by an average of one percent, our [added: net] interest expense would have increased by approximately [removed: $4.3] [added: $0.2] million during [removed: 2017.][added: 2018.]

Additionally, interest-rate risk could affect our ability to issue cost effective equity instruments.

In our distribution segment, we use a combination of physical storage, fixed-price forward contracts and financial instruments, primarily over-the-counter swap and option contracts, in an effort to minimize the impact of natural gas price volatility on our customers during the winter heating season.

In our distribution 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 natural gas marketing segment, we previously managed our exposure to the risk of natural gas price changes and 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 deliver [added: safe, clean, reliable, efficient, affordable and abundant] 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 South.

[removed: Effective] [added: As more fully described in Note 15, effective] January 1, 2017, we sold all of the equity interests of [removed: Atmos Energy Marketing, LLC (AEM)] [added: 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 [added: natural] gas marketing business.

As of September 30, [removed: 2017,] [added: 2018,] 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 [removed: states and storage assets located in Kentucky and Tennessee.] [added: states.] |

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

The following table summarizes key information about [removed: these] [added: our six regulated natural gas distribution] divisions, presented in order of total rate base.

At September 30, [removed: 2017,] [added: 2018,] we held [removed: 1,008] [added: 1,013] franchises having terms generally ranging from five to 35 years.

| Mid-Tex | | Texas, including the Dallas/Fort Worth Metroplex | | 550 | | [removed: 1,672,581] [added: 1,697,171] |

| Kentucky/Mid-States | | Kentucky | | 230 | | [removed: 181,638] [added: 182,510] |

| West Texas | | Amarillo, Lubbock, Midland | | 80 | | [removed: 311,188] [added: 313,828] |

| Colorado-Kansas | | Colorado | | 170 | | [removed: 118,410] [added: 120,384] |

| | | Kansas | | | | [removed: 135,141] [added: 135,820] |

These rates are intended to be sufficient to cover the costs of conducting [removed: business and to provide] [added: business, including] a reasonable return on invested capital.

Therefore, although substantially all of our distribution operating revenues fluctuate with the cost of gas that we purchase, distribution [removed: gross profit (which is] [added: Contribution Margin (a Non-GAAP measure] defined as operating revenues less purchased gas cost) is generally not affected by fluctuations in the cost of gas.

[added: Major suppliers during fiscal 2018 were Castleton Commodities Merchant Trading L.P., CenterPoint] Energy Services, Inc., Concord Energy LLC, ConocoPhillips Company, Devon Gas Services, L.P., [added: DTE Energy Trading Inc., Mieco Inc.,] Sequent Energy Management, L.P., Targa Gas Marketing [removed: LLC, Tenaska Gas Storage,] LLC and [removed: Texla Energy Management, Inc.][added: Tenaska Gas Storage & Marketing Ventures, LLC.]

The peak-day demand for our distribution operations in fiscal [removed: 2017] [added: 2018] was on January [removed: 6, 2017,] [added: 16, 2018,] when sales to customers reached approximately [removed: 3.6] [added: 3.8] Bcf.

Through [removed: it's] [added: its] 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.

[removed: Gross profit] [added: Revenues] earned from transportation and storage services for APT [removed: is] [added: are] subject to traditional ratemaking governed by the RRC.

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 [removed: filing] [added: of which] was completed in [added: August] 2017.

Our natural gas transmission operations in Louisiana are comprised of a proprietary 21-mile pipeline located in [added: the] New Orleans, Louisiana [added: area] 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.

We also manage two asset management plans in Louisiana [removed: with] [added: that serve] distribution affiliates of the Company, which have been approved by applicable state regulatory commissions.

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

| • | Infrastructure programs in place in the majority of our states that provide for an annual adjustment to rates for qualifying capital expenditures. Through our annual formula rate mechanisms and infrastructure programs, we have the ability to recover over [removed: 95] [added: 85] percent of our capital expenditures within six [added: months and 99 percent within twelve] months. |

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

The following table provides a jurisdictional rate summary for our regulated [removed: operations.][added: operations as of September 30, 2018.]

| Atmos Pipeline — Texas | | Texas | | [removed: 08/01/2017] [added: 05/22/2018] | | [removed: $1,767,600] [added: $2,122,194] | | 8.87% | | 47/53 | 11.50% |

| | | Colorado SSIR | | [removed: 01/01/2017] [added: 01/01/2018] | | [removed: 13,500] [added: 29,855] | | 7.82% | | 48/52 | 9.60% |

| Kentucky/Mid-States | | Kentucky [removed: |] [added: - PRP] | [removed: 08/15/2016] | [added: 09/2017] | [removed: 335,833] | [added: 4,981] | [removed: (3)] | | [removed: (3)] | [removed: (3)] [added: 10/14/2016] |

| | | [removed: Tennessee] [added: Tennessee(8)] | | 06/01/2017 | | 302,953 | | 7.49% | | 47/53 | 9.80% |

| | | Virginia | | [removed: 11/07/2016] [added: 12/27/2016] | | 47,581 | | (3) | | (3) | (3) |

| Mid-Tex Cities | | [removed: Texas] [added: Texas(9)] | | 06/01/2017 | | 2,362,937(2) | | 8.36% | | 45/55 | 10.50% |

| Mid-Tex — Dallas | | Texas | | [removed: 06/01/2017] [added: 02/14/2018] | | [removed: 2,273,567(2)] [added: (3)] | | [removed: 8.38%] [added: (3)] | | [removed: 41/59] [added: (3)] | [removed: 10.10%] [added: (3)] |

| [added: Mississippi] | | Mississippi - SIR | | [removed: 01/01/2017 |] [added: 10/2017] | [removed: 21,345] | [added: 3,334] | [removed: 7.85%] | | [removed: 47/53] | [removed: 9.73%] [added: 01/01/2017] |

| [added: Mississippi] | | Mississippi - SGR | | [removed: 01/01/2017 |] [added: 10/2017] | [removed: 17,437] | [added: 1,292] | [removed: 9.04%] | | [removed: 47/53] | [removed: 12.00%] [added: 01/01/2017] |

| West Texas(4) | | [removed: Texas] [added: Texas(10)] | | 03/15/2017 | | (3) | | (3) | | (3) | 10.50% |

| | | Texas-GRIP | | [removed: 05/23/2017] [added: 06/05/2018] | | [removed: 476,665] [added: 507,831] | | 8.57% | | 48/52 | 10.50% |

| Kentucky/Mid-States | | Kentucky | | Yes | | No | | [removed: Yes] [added: No] | Yes | | November-April |

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

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

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

Since 2011, our operating strategy has focused on modernizing our distribution and transmission system to improve safety and reliability.

Since that time, our capital expenditures have increased approximately 13% annually.

Additionally, during this period, we have added new or modified existing regulatory mechanisms to reduce regulatory lag.

Our ability to increase capital spending annually to modernize our system has increased our rate base, which has resulted in rising earnings per share and shareholder value.

| | | Tennessee | | | | 150,661 |

| | | Virginia | | | | 24,396 |

| Louisiana | | Louisiana | | 270 | | 362,233 |

| Mississippi | | Mississippi | | 110 | | 269,333 |

Additionally, AEM utilized proprietary and customer-owned transportation and storage assets to provide various services to its customers requested.

| Colorado-Kansas | | Colorado | | 05/03/2018 | | 134,726 | | 7.55% | | 44/56 | 9.45% |

| | | Kansas GSRS | | 02/27/2018 | | 12,514 | | (3) | | (3) | (3) |

| Kentucky/Mid-States | | Kentucky | | 05/03/2018 | | 427,646 | | 7.41% | | 47/53 | 9.70% |

| Louisiana | | Trans La | | 05/01/2018 | | 169,120 | | 7.26% | | 49/51 | 9.80% |

| | | LGS | | 07/01/2018 | | 419,080 | | 7.55% | | 44/56 | 9.80% |

| Mississippi | | Mississippi(7) | | 01/01/2018 | | 377,954 | | 7.47% | | 47/53 | 9.67% |

| | | Mississippi - SIR(7) | | 01/01/2018 | | 70,141 | | 7.60% | | 47/53 | 9.92% |

| | | Mississippi - SGR | | 01/01/2018 | | 23,718 | | 8.70% | | 47/53 | 12.00% |

| (7) | The Mississippi Public Service Commission approved a settlement at its meeting on October 23, 2018, which included a rate base of $541.7 million, an authorized return of 7.81%, a debt/equity ratio of 45/55 and an authorized ROE of 10.24%. New rates were implemented November 1, 2018. |

| (8) | The Tennessee Public Utility Commission approved the Formula Rate Mechanism filing at its meeting on October 15, 2018, which included a rate base of $351.8 million, an authorized return of 7.26%, a debt/equity ratio of 49/51 and an authorized ROE of 9.8%. |

| (9) | The Mid-Tex Cities approved the Formula Rate Mechanism filing with rates effective October 1, 2018, which included a rate base of $2,587.3 million, an authorized return of 7.87%, a debt/equity ratio of 42/58 and an authorized ROE of 9.80%. |

| (10) | The West Texas Cities approved the Formula Rate Mechanism filing with rates effective October 1, 2018, which included a rate base of $505.7 million, an authorized return of 7.87%, a debt/equity ratio of 42/58 and an authorized ROE of 9.80%. |

The ratemaking outcomes for fiscal 2018 include the effect of tax reform legislation enacted effective January 1, 2018 and do not reflect the true economic benefit of the outcomes because they do not include the corresponding income tax benefit we will receive due to the decrease in our statutory tax rate.

| Mid-Tex | | Formula Rate Mechanism | | Mid-Tex Cities (1) (2) | | $ | 28,036 | |

| Mid-Tex | | Rate Case | | ATM Cities (1) | | 4,252 | | |

| Mississippi | | Infrastructure Mechanism | | Mississippi (1) (3) | | 7,976 | | |

| Mississippi | | Formula Rate Mechanism | | Mississippi (1) (3) | | 4,119 | | |

| Kentucky/Mid-States | | Formula Rate Mechanism True-Up | | Tennessee (1) (5) | | (3,220 | | ) |

| West Texas | | Formula Rate Mechanism | | WT Cities (1) (6) | | 4,030 | | |

| West Texas | | Rate Case | | Environs (1) (7) | | (485 | | ) |

| | | | | | | $ | 52,830 | |

| (1) | The filing amount reflects a 21% federal income tax rate resulting from the Tax Cuts and Jobs Act of 2017 (TCJA). |

| (2) | The Mid-Tex Cities approved a rate increase of $17.6 million effective October 1, 2018. |

| (3) | The Mississippi Public Service Commission approved a settlement at its meeting on October 23, 2018, for a combined $7.0 million increase. New rates were implemented November 1, 2018. |

| (4) | The Tennessee Public Utility Commission approved the Formula Rate Mechanism filing, which included $0.4 million related to the May 2017 true-up, at its October 15, 2018 meeting. |

| --- | --- |

| (5) | The Tennessee Formula Rate Mechanism Test Period Ended May 2018 reflects the discontinuance of the prior year true-up. |

| | |

| --- | --- |

| (6) | The West Texas Cities approved a rate increase of $2.8 million effective October 1, 2018. |

| | |

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

We believe the successful execution of this strategy has delivered excellent shareholder value.

Over the last six years, regulatory mechanisms designed to minimize regulatory lag have enabled us to make significant capital investments to fortify and upgrade our distribution and transmission systems.

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

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

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

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

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

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

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.

Generally, each

| Colorado-Kansas | | Colorado | | 01/01/2016 | | 129,094 | | 7.82% | | 48/52 | 9.60% |

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

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

| 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% |

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

Substantially all of our regulated revenues in the fiscal years ended September 30, 2017, 2016 and 2015 were derived from sales at rates set by or subject to approval by local or state authorities.

| | | | | | |

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

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

| | ARM (2) True-Up | Tennessee | 850 | | |

| | | | $ | 59,435 | |

| (1) | The Steps to Advance Virginia Energy (SAVE) Plan, the Pipeline Replacement Program (PRP) and the System Integrity Rider (SIR) surcharges relate to long-term programs to replace aging infrastructure. |

| (2) | The Annual Rate Mechanism (ARM) is a formula rate mechanism that refreshes the Company's rates on an annual basis. |

| (3) | The Mississippi Supplemental Growth Rider (SGR) permits the Company to pursue eligible industrial growth projects beyond the division's normal main extension policies with prior approval from the Mississippi Public Service Commission. For fiscal 2017, the Commission approved a total of $13.2 million and has also approved $10.2 million under the program for fiscal 2018. |

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

We currently have formula rate mechanisms in our Louisiana, Mississippi and Tennessee operations and in substantially all of our Texas divisions.

Additionally, we have specific infrastructure programs in substantially all of our distribution divisions and our Atmos Pipeline - Texas Division with tariffs in place to permit the investment associated with these programs to have their surcharge rate adjusted annually to recover approved capital costs incurred in a prior test-year period.

| | | | | | | (In thousands) | | | | |

| Mississippi | | Mississippi-SIR | | 10/2017 | | 3,334 | | | | 01/01/2017 |

| Mississippi | | Mississippi-SGR | | 10/2017 | | 1,292 | | | | 01/01/2017 |

| Kentucky/Mid-States | | Virginia-SAVE | | 09/2016 | | 118 | | | | 10/01/2015 |

| 2015 Filings: | | | | | | | | | | |

| Louisiana | | LGS | | 12/2014 | | $ | 1,321 | | | 07/01/2015 |

| West Texas | | West Texas Environs | | 12/2014 | | 697 | | | | 06/12/2015 |

| Mid-Tex | | Mid-Tex Environs | | 12/2014 | | 1,158 | | | | 06/01/2015 |

| Mid-Tex | | Mid-Tex Cities | | 12/2014 | | 16,801 | | | | 06/01/2015 |

| Mid-Tex | | Mid-Tex DARR | | 09/2014 | | 4,420 | | | | 06/01/2015 |

| West Texas | | West Texas ALDC | | 12/2014 | | 4,593 | | | | 05/01/2015 |

For the fiscal year ended September 30, [removed: 2017][added: 2018]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ [removed: 229.45)] [added: 229.405)] is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

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: 2017,] [added: 2018,] was [removed: $8,146,262,574.][added: $9,175,655,493.]

As of November 8, [removed: 2017,] [added: 2018,] the registrant had [removed: 106,112,709] [added: 111,352,649] 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: 7, 2018] [added: 6, 2019] are incorporated by reference into Part III of this report.

| [Glossary of Key [removed: Terms](#sE2EF87EF0A875D9E857C97AF1FA6E09B)] [added: Terms](#sDF1F3183FCEF53FF8B8CE56743D84783)] | | [removed: [3](#sE2EF87EF0A875D9E857C97AF1FA6E09B)] [added: [3](#sDF1F3183FCEF53FF8B8CE56743D84783)] |

| Item 1. | [removed: [Business](#s0C385F5AF4A45F51AFB688B4A7204317)] [added: [Business](#sAF84D91D69CF5A0F800B48EB889917D8)] | [removed: [4](#s0C385F5AF4A45F51AFB688B4A7204317)] [added: [4](#sAF84D91D69CF5A0F800B48EB889917D8)] |

| Item 1A. | [Risk [removed: Factors](#s74DF8A2D975C564FB095B577F0932DC8)] [added: Factors](#s4A270027E45E5DC68FBC5E0F0FE7FE1F)] | [removed: [13](#s74DF8A2D975C564FB095B577F0932DC8)] [added: [13](#s4A270027E45E5DC68FBC5E0F0FE7FE1F)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#s9AA10D4014515066921F3263BEA6B429)] [added: Comments](#sC361E2ED1F465EF1A0448ED2B51AFEE2)] | [removed: [17](#s9AA10D4014515066921F3263BEA6B429)] [added: [17](#sC361E2ED1F465EF1A0448ED2B51AFEE2)] |

| Item 2. | [removed: [Properties](#sEEDC0C4B10895766B60A601EDFAD7171)] [added: [Properties](#s22E16B9FD7B6512D91ED0D367F23DDBD)] | [removed: [17](#sEEDC0C4B10895766B60A601EDFAD7171)] [added: [17](#s22E16B9FD7B6512D91ED0D367F23DDBD)] |

| Item 3. | [Legal [removed: Proceedings](#s6D2F6C403659543EABECAD621CF13907)] [added: Proceedings](#sC6B92F113ECD56899E954A73DCE1AF04)] | [removed: [18](#s6D2F6C403659543EABECAD621CF13907)] [added: [18](#sC6B92F113ECD56899E954A73DCE1AF04)] |

| Item 4. | Mine Safety Disclosures | [removed: [18](#s64F428BE7E5D50278241E1C935A3CD50)] [added: [18](#s866AC8A7CDE8597091E9731597B58EEB)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s0CA149D42E295C95A20FF2D4A05D2109)] [added: Securities](#sFDA5933D186E5785A4E027F0679DCB5F)] | [removed: [19](#s0CA149D42E295C95A20FF2D4A05D2109)] [added: [19](#sFDA5933D186E5785A4E027F0679DCB5F)] |

| Item 6. | [Selected Financial [removed: Data](#s32A8C36B6079560991163ECF1698644F)] [added: Data](#sABEC2A20739B55EBA3DC32E4A3F0960A)] | [removed: [21](#s32A8C36B6079560991163ECF1698644F)] [added: [21](#sABEC2A20739B55EBA3DC32E4A3F0960A)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s3F36CDBDEE2F55379702D633E8BDA28C)] [added: Operations](#s78A088FCE52755068C4CE6621844C3FA)] | [removed: [22](#sC084EF354F015FF78FE3F7CAE1CD7DE7)] [added: [22](#s9043EB115A1E52C6AF03EE7086887C29)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s7358633D85715CC9A28EF42D6713E218)] [added: Risk](#s05019CCC2BE95685B9A190C0DE625387)] | [removed: [37](#s7358633D85715CC9A28EF42D6713E218)] [added: [38](#s05019CCC2BE95685B9A190C0DE625387)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#s04E142538FE0598789DD8E408177653E)] [added: Data](#s98E5AA1B9729591496571D8B90C672FE)] | [removed: [38](#s04E142538FE0598789DD8E408177653E)] [added: [40](#s98E5AA1B9729591496571D8B90C672FE)] |

| Item 9. | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#s6AF6169DFEB65196A7F97D05A9F0090F)] [added: Disclosure](#s1118DCE772435AE0B7526981C4AB67A2)] | [removed: [88](#s6AF6169DFEB65196A7F97D05A9F0090F)] [added: [92](#s1118DCE772435AE0B7526981C4AB67A2)] |

| Item 9A. | [Controls and [removed: Procedures](#s381B4AB431EB5D49BD63E7306FA86D3E)] [added: Procedures](#sEAC2275ECEE857368E2045AD947C8595)] | [removed: [88](#s381B4AB431EB5D49BD63E7306FA86D3E)] [added: [92](#sEAC2275ECEE857368E2045AD947C8595)] |

| Item 9B. | [Other [removed: Information](#sD5008A6E9E365EF7B1A1DDCB58080F61)] [added: Information](#s4574E46AFB8557C4A19981AF5F2D0CE4)] | [removed: [90](#sD5008A6E9E365EF7B1A1DDCB58080F61)] [added: [94](#s4574E46AFB8557C4A19981AF5F2D0CE4)] |

| Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#s35398B172E1F5E9B8149F1645413F3BA)] [added: Governance](#s88DD9AE223505A03B452083A4F790970)] | [removed: [90](#s35398B172E1F5E9B8149F1645413F3BA)] [added: [94](#s88DD9AE223505A03B452083A4F790970)] |

| Item 11. | [Executive [removed: Compensation](#s2D38EC95979959F4A3374EA30F111E76)] [added: Compensation](#sF4F44D7DBCAD5F84B6D48EA05802E789)] | [removed: [91](#s2D38EC95979959F4A3374EA30F111E76)] [added: [95](#sF4F44D7DBCAD5F84B6D48EA05802E789)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s1051900F4BC753FBB9C12ABC5C28C562)] [added: Matters](#s009B44F2F77A59FFBFAE16A05E3A135C)] | [removed: [91](#s1051900F4BC753FBB9C12ABC5C28C562)] [added: [95](#s009B44F2F77A59FFBFAE16A05E3A135C)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sB3AFE47472A35A3891724BAA5283D61F)] [added: Independence](#s07959A68637D514CB920634EE578258E)] | [removed: [91](#sB3AFE47472A35A3891724BAA5283D61F)] [added: [95](#s07959A68637D514CB920634EE578258E)] |

| Item 14. | [Principal Accountant Fees and [removed: Services](#sEC3BF289068C57C2BC01DFE06997A4A5)] [added: Services](#sCEA44CDDA1695971BB75A32004588B12)] | [removed: [91](#sEC3BF289068C57C2BC01DFE06997A4A5)] [added: [95](#sCEA44CDDA1695971BB75A32004588B12)] |

| Item 15. | [Exhibits and Financial Statement [removed: Schedules](#sFE9530FCC6BF51F88D208863843B5CB0)] [added: Schedules](#s32AF2771DA0A52EEB4275919984A328D)] | [removed: [91](#s1160DE5AEABE58B8BBF60B39606E5910)] [added: [95](#s32B3DEB03FCD50C6B90173FA923CD949)] |

| ATO | Trading symbol for Atmos Energy Corporation common stock on the [removed: New York Stock Exchange] [added: NYSE] |

| [removed: Gross Profit] [added: Contribution Margin] | Non-GAAP measure defined as operating revenues less purchased gas cost |

| Mid-Tex Cities | Represents all incorporated cities other than [removed: Dallas,] [added: Dallas and Mid-Tex ATM Cities,] or approximately [removed: 80] [added: 72] percent of the Mid-Tex Division’s [removed: customers, with whom a settlement agreement was reached during the fiscal 2008 second quarter.] [added: customers.] |

| SGR | Supplemental Growth [removed: Filing] [added: Rider] |

10-K 1 ato201893010-k.htm 10-K

| Adjusted diluted EPS from continuing operations | Non-GAAP measure defined as diluted earnings per share from continuing operations before the one-time, non-cash income tax benefit |

| Adjusted income from continuing operations | Non-GAAP measure defined as income from continuing operations before the one-time, non-cash income tax benefit |

| Mid-Tex ATM Cities | Represents a coalition of 47 incorporated cities or approximately 8 percent of the Mid-Tex Division's customers. |

| PHMSA | Pipeline and Hazardous Materials Safety Administration |

| TCJA | Tax Cuts and Jobs Act of 2017 |

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

(Do not check if a smaller reporting company)

| | |

| KPSC | Kentucky Public Service Commission |

| PAP | Pension Account Plan |

At September 30, [removed: 2017,] [added: 2018,] in our distribution segment, we owned an aggregate of [removed: 70,605] [added: 70,071] miles of underground distribution and transmission mains throughout our distribution systems.

These mains are located on easements or [removed: rights-of-way which generally provide for perpetual use.][added: rights-of-way.]

Through our pipeline and storage segment we owned [removed: 5,682] [added: 5,678] miles of gas transmission lines as well.

The following table summarizes certain information regarding our underground gas storage facilities at September 30, [removed: 2017:][added: 2018:]

| Texas | | 46,083,549 | | | 15,878,025 | | | 61,961,574 | | | [removed: 1,559,000] [added: 1,710,000] | |

The following table summarizes our contracted storage capacity at September 30, [removed: 2017:][added: 2018:]

| | | Colorado-Kansas Division | | [removed: 5,129,562] [added: 6,129,562] | | | [removed: 124,830] [added: 136,996] | |

| | | Mid-Tex Division | | [removed: 3,500,000] [added: 5,500,000] | | | [removed: 175,000] [added: 225,000] | |

| | | Trans Louisiana Gas Pipeline, Inc. | | [removed: 1,674,000] [added: 1,000,000] | | | [removed: 67,507] [added: 47,500] | |

We also maintain field offices throughout our service territory, [removed: the majority] [added: some] of which are located in leased facilities.

| Kentucky | | 7,956,991 | | | 9,562,283 | | | 17,519,274 | | | 158,100 | |

| Total | | 13,103,562 | | | 14,305,200 | | | 27,408,762 | | | 234,100 | |

| Louisiana | | 411,040 | | | 256,900 | | | 667,940 | | | 56,000 | |

| Total | | 46,494,589 | | | 16,134,925 | | | 62,629,514 | | | 1,766,000 | |

| Total | | 59,598,151 | | | 30,440,125 | | | 90,038,276 | | | 2,000,100 | |

| | | Louisiana Division | | 2,536,779 | | | 174,805 | |

| | | Mississippi Division | | 5,083,801 | | | 163,627 | |

| Total | | | | 32,425,245 | | | 1,088,167 | |

| Total Contracted Storage Capacity | | | | 33,425,245 | | | 1,135,667 | |

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

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

| Louisiana | | 438,583 | | | 300,973 | | | 739,556 | | | 56,000 | |

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

| Total | | 59,550,299 | | | 30,484,198 | | | 90,034,497 | | | 1,849,100 | |

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

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

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

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

Our stock trades on the New York Stock Exchange under the trading symbol “ATO.” The [removed: high and low sale prices and] dividends paid per share of our common stock for fiscal [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] are listed below.

| | [removed: Fiscal 2017] | [removed: | | | | | | | | | | |] Fiscal [removed: 2016 | | | |] [added: 2018] | | | | [added: Fiscal 2017] | | |

| Quarter ended: | | | | | | | | | [removed: | | | | | | | | | | | | | | |]

The number of record holders of our common stock on October 31, [removed: 2017] [added: 2018] was [removed: 13,341.][added: 12,550.]

We sold no securities during fiscal [removed: 2017] [added: 2018] 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 [added: (S&P 500)] and the cumulative total return of [removed: two different] [added: a] customized peer company [removed: groups, the New Comparison Company Index and] [added: group,] the [removed: Old] Comparison Company Index.

The [removed: 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: 2012] [added: 2013] in our common stock, the S&P 500 [removed: Index] and in the common stock of the companies in the [removed: New and Old] Comparison Company Indices, as well as a reinvestment of dividends paid on such investments throughout the period.

[removed: ][added: ]

| | [removed: 9/30/2012 | | |] 9/30/2013 | | | 9/30/2014 | | | 9/30/2015 | | | 9/30/2016 | | | 9/30/2017 | | [added: | 9/30/2018 | |]

The [removed: 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 the index are Alliant Energy Corporation, [added: Ameren Corporation,] CenterPoint Energy, Inc., CMS Energy Corporation, DTE Energy Company, National Fuel Gas Company, [removed: NextEra Energy, Inc.,] NiSource Inc., ONE Gas, Inc., [removed: Spire,] [added: Spire] Inc. (formerly The Laclede Group, Inc.), Vectren Corporation, WEC Energy Group, Inc., WGL Holdings, Inc., and Xcel Energy, Inc. [removed: 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, Inc.(1), Questar Corporation(1), TECO Energy, Inc.(1), Spire, Inc. (formerly The Laclede Group, Inc.), Vectren Corporation and WGL Holdings, Inc.]

| (1) | [removed: AGL Resources Inc., Piedmont Natural Gas Company, Inc., Questar Corporation and TECO Energy,] [added: WGL Holdings] Inc. [removed: were] [added: was] acquired prior to September 30, [removed: 2017.] [added: 2018.] As a result, the cumulative total return of [removed: these companies] [added: this company] is not included in the [removed: 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: 2017.][added: 2018.]

| Total equity compensation plans approved by security holders | [removed: 1,143,243] [added: 1,041,519] | | | — | | | | [removed: 2,035,861] [added: 1,752,235] | |

| (1) | Comprised of a total of [removed: 478,367] [added: 422,996] time-lapse restricted stock units, [removed: 361,381] [added: 343,952] director share units and [removed: 303,495] [added: 274,571] performance-based restricted stock units at the target level of performance granted under our 1998 Long-Term Incentive Plan. |

| | | | | | | | | |

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

| | | | | | | | | |

| December 31 | | $ | 0.485 | | | $ | 0.450 | |

| March 31 | | 0.485 | | | | 0.450 | | |

| June 30 | | 0.485 | | | | 0.450 | | |

| September 30 | | 0.485 | | | | 0.450 | | |

| | | $ | 1.94 | | | $ | 1.80 | |

| Atmos Energy Corporation | 100.00 | | | 115.52 | | | 145.03 | | | 190.13 | | | 218.98 | | | 250.80 | |

| S&P 500 Stock Index | 100.00 | | | 119.73 | | | 119.00 | | | 137.36 | | | 162.92 | | | 192.10 | |

| Peer Group | 100.00 | | | 116.03 | | | 128.49 | | | 158.62 | | | 185.66 | | | 196.95 | |

| 1998 Long-Term Incentive Plan | 1,041,519 | | (1) | $ | — | | | 1,752,235 | |

| Total | 1,041,519 | | | $ | — | | | 1,752,235 | |

The high and low prices listed are the closing NYSE quotes, as reported on the NYSE composite tape, for shares of our common stock:

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

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

| | High | | | | Low | | | | Dividends Paid | | | | High | | | | Low | | | | Dividends Paid | | |

| December 31 | $ | 74.73 | | | $ | 68.96 | | | $ | 0.45 | | | $ | 64.25 | | | $ | 57.82 | | | $ | 0.42 | |

| March 31 | 80.40 | | | | 73.21 | | | | 0.45 | | | | 74.33 | | | | 61.74 | | | | 0.42 | | |

| June 30 | 85.54 | | | | 78.90 | | | | 0.45 | | | | 81.32 | | | | 70.60 | | | | 0.42 | | |

| September 30 | 88.69 | | | | 82.42 | | | | 0.45 | | | | 81.16 | | | | 71.88 | | | | 0.42 | | |

| | | | | | | | | | $ | 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 | |

| | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Operating revenues | $ | [removed: 2,759,735] [added: 3,115,546] | | | $ | [removed: 2,454,648] [added: 2,759,735] | | | $ | [removed: 2,926,985] [added: 2,454,648] | | | $ | [removed: 3,243,904] [added: 2,926,985] | | | $ | [removed: 2,572,488] [added: 3,243,904] | |

| [removed: Gross profit] [added: Contribution margin] | $ | [removed: 1,834,199] [added: 1,947,698] | | | $ | [removed: 1,708,456] [added: 1,834,199] | | | $ | [removed: 1,631,310] [added: 1,708,456] | | | $ | [removed: 1,521,844] [added: 1,631,310] | | | $ | [removed: 1,377,392] [added: 1,521,844] | |

| Income from continuing operations | $ | [removed: 382,711] [added: 603,064] | | | $ | [removed: 345,542] [added: 382,711] | | | $ | [removed: 305,623] [added: 345,542] | | | $ | [removed: 270,331] [added: 305,623] | | | $ | [removed: 232,378] [added: 270,331] | |

| Net income | $ | [removed: 396,421] [added: 603,064] | | | $ | [removed: 350,104] [added: 396,421] | | | $ | [removed: 315,075] [added: 350,104] | | | $ | [removed: 289,817] [added: 315,075] | | | $ | [removed: 243,194] [added: 289,817] | |

| Diluted income per share from continuing operations | $ | [removed: 3.60] [added: 5.43] | | | $ | [removed: 3.33] [added: 3.60] | | | $ | [removed: 3.00] [added: 3.33] | | | $ | [removed: 2.76] [added: 3.00] | | | $ | [removed: 2.52] [added: 2.76] | |

| Diluted net income per share | $ | [removed: 3.73] [added: 5.43] | | | $ | [removed: 3.38] [added: 3.73] | | | $ | [removed: 3.09] [added: 3.38] | | | $ | [removed: 2.96] [added: 3.09] | | | $ | [removed: 2.64] [added: 2.96] | |

| Cash dividends declared per share | $ | [removed: 1.80] [added: 1.94] | | | $ | [removed: 1.68] [added: 1.80] | | | $ | [removed: 1.56] [added: 1.68] | | | $ | [removed: 1.48] [added: 1.56] | | | $ | [removed: 1.40] [added: 1.48] | |

| Net property, plant and equipment(1) | $ | [removed: 9,259,182] [added: 10,371,147] | | | $ | [removed: 8,268,606] [added: 9,259,182] | | | $ | [removed: 7,416,700] [added: 8,268,606] | | | $ | [removed: 6,709,926] [added: 7,416,700] | | | $ | [removed: 6,013,975] [added: 6,709,926] | |

| Total assets | $ | [removed: 10,749,596] [added: 11,874,437] | | | $ | [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] | |

| Shareholders’ equity | $ | [removed: 3,898,666] [added: 4,769,951] | | | $ | [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] | |

| Long-term debt (excluding current maturities) | [removed: 3,067,045] [added: 2,493,665] | | | | [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] | | |

| Total capitalization | $ | [removed: 6,965,711] [added: 7,263,616] | | | $ | [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] | |

| (1) | Amounts shown are net of assets held for sale related to the divestiture of our natural gas marketing [removed: business.] [added: business for fiscal years 2014 through 2016.] |

| [Report of independent registered public accounting [removed: firm](#s5DFB691370B75189A426F20EFC7EA635)] [added: firm](#s8DCFDA3CFA4C5B1EAEDC89BEA1E4B2F8)] | [removed: [39](#s5DFB691370B75189A426F20EFC7EA635)] [added: [41](#s8DCFDA3CFA4C5B1EAEDC89BEA1E4B2F8)] |

| [removed: Consolidated] [added: [Consolidated] balance sheets at September 30, [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017](#s4000E6BB50EC5170B75920C9AA79D710)] | [removed: [40](#sE56C8406D81853569FCCCC435CBD0C45)] [added: [42](#s4000E6BB50EC5170B75920C9AA79D710)] |

| [removed: Consolidated] [added: [Consolidated] statements of income for the years ended September 30, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016](#sB6D28558627956A497C6DFD9789EA843)] | [removed: [41](#s266F27C765065E93BB178F7690495BB3)] [added: [43](#sB6D28558627956A497C6DFD9789EA843)] |

| [removed: Consolidated] [added: [Consolidated] statements of comprehensive income for the years ended September 30, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016](#s30BA41331A4F592C837DCB65343C7A4B)] | [removed: [42](#sAE22F764B8525AFAB87E3975E8F8093A)] [added: [44](#s30BA41331A4F592C837DCB65343C7A4B)] |

| [removed: Consolidated] [added: [Consolidated] statements of shareholders' equity for the years ended September 30, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016](#sE0B2C890B1405E08AB3115C2DF1027BC)] | [removed: [43](#s4CBC7FF023AF5EA1A7645FDD92BD4A68)] [added: [45](#sE0B2C890B1405E08AB3115C2DF1027BC)] |

| [removed: Consolidated] [added: [Consolidated] statements of cash flow for the years ended September 30, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016](#s4A99E6A6969957FFAF55EF291E434FA0)] | [removed: [44](#s2D993F0C50965746A11626EE5585DA4E)] [added: [46](#s4A99E6A6969957FFAF55EF291E434FA0)] |

| [Notes to consolidated financial [removed: statements](#sEDDB2FAA1B4D57AEBEFDCCCAF6F68C1E)] [added: statements](#sD293DF81710050C896832E89A45F4205)] | [removed: [45](#sEDDB2FAA1B4D57AEBEFDCCCAF6F68C1E)] [added: [47](#sD293DF81710050C896832E89A45F4205)] |

| [Selected Quarterly Financial Data [removed: (Unaudited)](#s41608E524A3C513396172862738C29B8)] [added: (Unaudited)](#s937E5E97F10E53C2A6030BF79715706E)] | [removed: [86](#s41608E524A3C513396172862738C29B8)] [added: [90](#s937E5E97F10E53C2A6030BF79715706E)] |

| Financial statement schedule for the years ended September 30, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] | |

| [Schedule II. Valuation and Qualifying [removed: Accounts](#s6C0C81182EE655F4AE6C42075733C2BA)] [added: Accounts](#sF4DA03425D9A54DF9972A0D4E496DF85)] | [removed: [95](#s4C0DEBF7910A5E33A9433356B4A67CDD)] [added: [103](#sF4DA03425D9A54DF9972A0D4E496DF85)] |

[removed: The] [added: To the Shareholders and the] Board of Directors [removed: and Shareholders] of [added: Atmos Energy Corporation]

We have audited the accompanying consolidated balance sheets of Atmos Energy Corporation [added: (the “Company“)] as of September 30, [removed: 2017 and 2016,] [added: 2018] and [added: 2017,] the related consolidated statements of income, comprehensive income, [removed: shareholders’] [added: shareholders‘] equity, and cash [removed: flows] [added: flows,] for each of the three years in the period ended September 30, [removed: 2017.][added: 2018, and the related notes and financial statement schedule listed in the Index at Item 8 (collectively referred to as the "financial statements").]

These financial statements [removed: and schedule] are the responsibility of the [removed: Company’s] [added: Company‘s] management.

Our responsibility is to express an opinion on [removed: these] [added: the Company‘s] financial statements [removed: and schedule] based on our audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material [removed: misstatement.][added: misstatement, whether due to error or fraud.]

[removed: An audit includes] [added: Such procedures include] examining, on a test basis, evidence [removed: supporting] [added: regarding] the amounts and disclosures in the financial statements.

[removed: An audit] [added: Our audits] also [removed: includes assessing] [added: included evaluating] the accounting principles used and significant estimates made by management, as well as evaluating the overall [added: presentation of the] financial [removed: statement presentation.][added: statements.]

In our opinion, the [added: consolidated] financial statements [removed: referred to above] present fairly, in all material respects, the [removed: consolidated] financial position of [removed: Atmos Energy Corporation at] [added: the Company as of] September 30, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the [removed: consolidated] results of its operations and its cash flows for each of the three years in the period ended September 30, [removed: 2017,] [added: 2018,] in conformity with [removed: U.S.] [added: US] generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States), Atmos Energy Corporation’s] [added: States) (PCAOB), the Company's] internal control over financial reporting as of September 30, [removed: 2017,] [added: 2018,] based on criteria established in Internal [removed: Control — Integrated] [added: Control-Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November 13, [removed: 2017] [added: 2018] expressed an unqualified opinion thereon.

| | [added: 2018 | | | |] 2017 | | | | 2016 | | |

| Property, plant and equipment | $ | [removed: 11,001,910] [added: 12,217,648] | | | $ | [removed: 9,958,627] [added: 11,001,910] | |

| Construction in progress | [removed: 299,394] [added: 349,725] | | | | [removed: 183,879] [added: 299,394] | | |

| Less accumulated depreciation and amortization | [removed: 2,042,122] [added: 2,196,226] | | | | [removed: 1,873,900] [added: 2,042,122] | | |

| Net property, plant and equipment | [removed: 9,259,182] [added: 10,371,147] | | | | [removed: 8,268,606] [added: 9,259,182] | | |

| Cash and cash equivalents | [removed: 26,409] [added: 13,771] | | | | [removed: 47,534] [added: 26,409] | | |

| Accounts receivable, less allowance for doubtful accounts of [removed: $10,865] [added: $14,795] in [removed: 2017] [added: 2018] and [removed: $11,056] [added: $10,865] in [removed: 2016] [added: 2017] | [removed: 222,263] [added: 253,295] | | | | [removed: 215,880] [added: 222,263] | | |

| Gas stored underground | [removed: 184,653] [added: 165,732] | | | | [removed: 179,070] [added: 184,653] | | |

| Other current assets | [removed: 106,321] [added: 46,055] | | | | [removed: 88,085] [added: 106,321] | | |

| Total current assets | [removed: 539,646] [added: 478,853] | | | | [removed: 681,686] [added: 539,646] | | |

| Goodwill | [removed: 730,132] [added: 730,419] | | | | [removed: 726,962] [added: 730,132] | | |

| Deferred charges and other assets | [removed: 220,636] [added: 294,018] | | | | [removed: 305,019] [added: 220,636] | | |

| Common stock, no par value (stated at $.005 per share); 200,000,000 shares authorized; issued and outstanding: [removed: 2017] [added: 2018] — [removed: 106,104,634] [added: 111,273,683] shares, [removed: 2016] [added: 2017] — [removed: 103,930,560] [added: 106,104,634] shares | $ | [removed: 531] [added: 556] | | | $ | [removed: 520] [added: 531] | |

| Additional paid-in capital | [removed: 2,536,365] [added: 2,974,926] | | | | [removed: 2,388,027] [added: 2,536,365] | | |

| Accumulated other comprehensive loss | [removed: (105,254] [added: (83,647] | | ) | | [removed: (188,022] [added: (105,254] | | ) |

| Retained earnings | [removed: 1,467,024] [added: 1,878,116] | | | | [removed: 1,262,534] [added: 1,467,024] | | |

| Shareholders’ equity | [removed: 3,898,666] [added: 4,769,951] | | | | [removed: 3,463,059] [added: 3,898,666] | | |

| Long-term debt | [removed: 3,067,045] [added: 2,493,665] | | | | [removed: 2,188,779] [added: 3,067,045] | | |

| Total capitalization | [removed: 6,965,711] [added: 7,263,616] | | | | [removed: 5,651,838] [added: 6,965,711] | | |

| Commitments and contingencies [added: (See Note 11)] | | | | | | | |

Opinion on the Financial Statements

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We have served as the Company‘s auditor since 1983.

| | 2018 | | | | 2017 | | |

| | 12,567,373 | | | | 11,301,304 | | |

| | $ | 11,874,437 | | | $ | 10,749,596 | |

| Regulatory excess deferred taxes (See Note 12) | 739,670 | | | | — | | |

| | $ | 11,874,437 | | | $ | 10,749,596 | |

| Net income | $ | 603,064 | | | $ | 396,421 | | | $ | 350,104 | |

| Net income | — | | | — | | | | — | | | | — | | | | 603,064 | | | | 603,064 | | |

| Other comprehensive income | — | | | — | | | | — | | | | 44,541 | | | | — | | | | 44,541 | | |

| Cumulative effect of accounting change (1) | — | | | — | | | | — | | | | (22,934 | | ) | | 22,934 | | | | — | | |

| Public offering | 4,558,404 | | | 22 | | | | 395,070 | | | | — | | | | — | | | | 395,092 | | |

| Direct stock purchase plan | 131,213 | | | 1 | | | | 11,322 | | | | — | | | | — | | | | 11,323 | | |

| Retirement savings plan | 94,081 | | | — | | | | 8,240 | | | | — | | | | — | | | | 8,240 | | |

| 1998 Long-term incentive plan | 385,351 | | | 2 | | | | 3,469 | | | | — | | | | — | | | | 3,471 | | |

| Balance, September 30, 2018 | 111,273,683 | | | $ | 556 | | | $ | 2,974,926 | | | $ | (83,647 | ) | | $ | 1,878,116 | | | $ | 4,769,951 | |

| (1) | See Note 2, "Recent Accounting Pronouncements" for additional information. |

| Net income | $ | 603,064 | | | $ | 396,421 | | | $ | 350,104 | |

| One-time income tax benefit | (158,782 | | ) | | — | | | | — | | |

| Other | (1,518 | | ) | | — | | | | — | | |

The APT division provides transportation and storage services to our Mid-Tex Division, other third-party local distribution companies, industrial and electric generation customers, as well as marketers and producers.

As part of its pipeline operations, APT manages five underground storage facilites in Texas.

Substantially all of our regulatory assets are recorded as a component of deferred charges and other assets and a portion of our regulatory liabilities are recorded as a component of other current liabilities and deferred credits and other liabilities.

Deferred gas costs are recorded either in other current assets or liabilities and our regulatory excess deferred taxes and regulatory cost of removal obligation are reported separately.

| | 2018 | | | | 2017 | | |

| | $ | 143,811 | | | $ | 176,798 | |

| Regulatory excess deferred taxes(3) | $ | 744,895 | | | $ | — | |

| Regulatory cost of service reserve(4) | 22,508 | | | | — | | |

| APT annual adjustment mechanism | 35,228 | | | | — | | |

| Pension and postretirement benefit costs | 69,113 | | | | — | | |

| | $ | 1,510,997 | | | $ | 555,657 | |

| (3) | The TCJA resulted in the remeasurement of the net deferred tax liability included in our rate base. Of this amount, $5.2 million is recorded in other current liabilities. The period and timing of the return of the excess deferred taxes is being determined by regulators in each of our jurisdictions. See Note 12 for further information. |

| (4) | Effective January 1, 2018, regulators in each of our service areas required us to establish a regulatory liability for the difference in recoverable federal taxes included in revenues based on the former 35% federal statutory rate and the new 21% federal statutory rate for service provided on or after January 1, 2018. The period and timing of the return of this liability to utility customers is being determined by regulators in each of our jurisdictions. See Note 12 for further information. |

recovered through the expected future cash flows.

We test goodwill for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit.

Although not applicable for the fiscal 2018 analysis, if the qualitative assessment resulted in impairment indicators, we would then use a present value technique based on discounted cash flows to estimate the fair value of our reporting units.

Beginning on October 1, 2018, changes in fair value of our equity available for sale securities will be recorded in net income as discussed further below in the Recent accounting pronouncements section.

Our audits also included the financial statement schedule listed in the Index at Item 8.

Also, in our opinion, the related financial statement schedule, when considered in relation to the financial statements taken as a whole, presents fairly, in all material respects the financial information set forth therein.

November 13, 2017

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

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

| 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 | | |

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

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

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

| Balance, September 30, 2014 | 100,388,092 | | | $ | 502 | | | $ | 2,180,151 | | | $ | (12,393 | ) | | $ | 917,972 | | | $ | 3,086,232 | |

| Net income | — | | | — | | | | — | | | | — | | | | 315,075 | | | | 315,075 | | |

| Other comprehensive loss | — | | | — | | | | — | | | | (96,937 | | ) | | — | | | | (96,937 | | ) |

| Repurchase of equity awards | (148,464 | ) | | (1 | | ) | | (7,984 | | ) | | — | | | | — | | | | (7,985 | | ) |

| Direct stock purchase plan | 176,391 | | | 1 | | | | 10,625 | | | | — | | | | — | | | | 10,626 | | |

| Retirement savings plan | 398,047 | | | 2 | | | | 20,324 | | | | — | | | | — | | | | 20,326 | | |

| 1998 Long-term incentive plan | 664,752 | | | 3 | | | | 2,263 | | | | — | | | | — | | | | 2,266 | | |

| Repurchase of equity awards | — | | | | — | | | | (7,985 | | ) |

The APT division transports natural gas to our Mid-Tex Division, transports natural gas for third parties and manages five underground storage reservoirs in Texas.

On October 29, 2016, we entered into a Membership Interest Purchase Agreement (the Agreement) with CenterPoint Energy Services, Inc., a subsidiary of CenterPoint Energy, Inc. (CES) to sell all of the equity interests of AEM.

The transaction closed on January 3, 2017, with an effective date of January 1, 2017.

AEM’s historical financial results are reflected in the Company’s consolidated financial statements as discontinued operations, which required retrospective application to financial information for all periods presented.

Please refer to Note 15 for further information.

Our discontinued natural gas marketing segment was primarily engaged in an unregulated natural gas marketing business, conducted by Atmos Energy Marketing (AEM).

The natural gas marketing business operated primarily in the Midwest and Southeast and was based in Houston, Texas.

This business provided natural gas management and transportation services to municipalities, regulated distribution companies, including certain divisions of Atmos Energy, and third parties.

regulated entities that meet certain criteria to reflect the authorized recovery of costs due to regulatory decisions in their financial statements.

| | $ | 176,798 | | | $ | 263,623 | |

| | $ | 555,657 | | | $ | 514,725 | |

We use a present value technique based on discounted cash flows to estimate the fair

value of our reporting units.

As of September 30, 2016, the Company netted $25.7 million of cash held in margin accounts into its current and noncurrent risk management liabilities.

We

Investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient are not categorized within the fair value hierarchy, as required by accounting guidance adopted in the current fiscal year and includes common collective trusts and investments in limited partnerships held by our pension plans, as described in Note 7.

We are currently still evaluating the impact to our financial statement presentation and related disclosures.

We are currently evaluating the potential impact of this new guidance.

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

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

| Operating revenues from external parties | $ | 2,819,977 | | | $ | 107,008 | | | $ | — | | | $ | — | | | $ | 2,926,985 | |

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: 2017] [added: 2018] 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: 2017,] [added: 2018,] 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.

[removed: The] [added: To the Shareholders and the] Board of Directors [removed: and Shareholders] of [added: Atmos Energy Corporation]

We have audited Atmos Energy Corporation’s internal control over financial reporting as of September 30, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control [removed: —] [added: -] Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

[removed: Atmos Energy Corporation’s] [added: The Company’s] management is responsible for maintaining effective internal control over financial [removed: reporting,] [added: reporting] and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

We conducted our audit in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

In our opinion, Atmos Energy Corporation [added: (the Company)] maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2017,] [added: 2018,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States), the consolidated balance sheets as of September 30, 2017 and 2016, and] [added: States) (PCAOB),] the [removed: related] [added: 2018] consolidated [added: financial] statements of [removed: income, comprehensive income, shareholders’ equity, and cash flows for each of] the [removed: three years in the period ended September 30, 2017 of Atmos Energy Corporation] [added: Company] and our report dated November 13, [removed: 2017] [added: 2018] 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: 2017] [added: 2018] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

| November 13, 2018 | | |

Opinion on Internal Control over Financial Reporting

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Definition and Limitations of Internal Control Over Financial Reporting

November 13, 2018

| November 13, 2017 | | |

Atmos Energy Corporation

November 13, 2017

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: 7, 2018.][added: 6, 2019.]

The following table sets forth certain information as of September 30, [removed: 2017,] [added: 2018,] regarding the executive officers of the Company.

| Name | [added: |] Age | | Years of Service | | Office Currently Held |

| [removed: Kim R. Cocklin] [added: Michael E. Haefner] | [removed: 66] | [added: 58] | [removed: 11] | [added: 10] | [added: | President,] Chief Executive Officer and Director |

| Christopher T. Forsythe | [removed: 46] | [added: 47] | [removed: 14] | [added: 15] | [added: |] Senior Vice President and Chief Financial Officer |

| David J. Park | [removed: 46] | [added: 47] | [removed: 13] | [added: 14] | [added: |] Senior Vice President, Utility Operations |

| John K. Akers | [removed: 54] | [added: 55] | [removed: 26] | [added: 27] | [added: |] Senior Vice President, Safety and Enterprise Services |

| Karen E. Hartsfield | [removed: 47] | [added: 48] | [removed: 2] | [added: 3] | [added: |] Senior Vice President, General Counsel and Corporate Secretary |

| John M. Robbins | [removed: 47] | [added: 48] | [removed: 4] | [added: 5] | [added: |] Senior Vice President, Human Resources |

In this role, Mr. Akers is responsible for customer service, [added: facilities management,] safety and [removed: training,] supply chain [removed: and facilities management and][added: management.]

[removed: Prior to his promotion, Mr. Akers served as the] [added: He was later named] President of the Kentucky/Mid-States Division [removed: from] [added: in] May [removed: 2007 to] [added: 2007, a position he held until] December 2016.

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: 7, 2018.][added: 6, 2019.]

A copy of the Company’s Code of Conduct is posted on the Company’s website at www.atmosenergy.com under “Corporate [removed: Governance.”] [added: Responsibility.”] In addition, any amendment to or waiver granted from a provision of the Company’s Code of Conduct will be posted on the Company’s website under “Corporate [removed: Governance.”][added: Responsibility.”]

| | | | | | | |

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

| | | | | | | |

| Kim R. Cocklin | | 67 | | 12 | | Executive Chairman of the Board |

Prior to joining Atmos Energy in 2004, Mr. Park had 10 years of experience in the industry.

Mr. Akers joined the company in 1991.

Mr. Akers assumed increased responsibilities over time and was named President of the Mississippi Division in 2002.

| | | | | | |

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

| Michael E. Haefner | 57 | | 9 | | President and Chief Operating Officer and Director |

workforce development.

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

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: 7, 2018.][added: 6, 2019.]

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: 7, 2018.][added: 6, 2019.]

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: 7, 2018.][added: 6, 2019.]

| | |

| --- | --- |

Item 14.

Principal Accountant Fees and Services.

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 7, 2018.

PART IV

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 6, 2019.

PART IV

| | | | | |

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

| Exhibit Number | | Description | | Page Number or Incorporation by Reference to |

| | | Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession | | |

| 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 29, 2016 | | [Exhibit 2.1 to Form 8-K dated October 29, 2016 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312516753686/d283961dex21.htm) |

| | | Articles of Incorporation and Bylaws | | |

| 3.1 | | Restated Articles of Incorporation of Atmos Energy Corporation - Texas (As Amended Effective February 3, 2010) | | [Exhibit 3.1 to Form 10-Q dated March 31, 2010 (File No. 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) | | [Exhibit 3.2 to Form 10-Q dated March 31, 2010 (File No. 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) | | [Exhibit 3.1 to Form 8-K dated September 28, 2015 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312515330944/d29285dex31.htm) |

| | | Instruments Defining Rights of Security Holders, Including Indentures | | |

| 4.1 | | Specimen Common Stock Certificate (Atmos Energy Corporation) | | [Exhibit 4.1 to Form 10-K for fiscal year ended September 30, 2012 (File No. 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 | | [Exhibit 4.11(a) to Form S-3 dated August 31, 2004 (File No. 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 | | [Exhibit 4.8 to Form S-3 dated August 31, 2004 (File No. 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 | | [Exhibit 99.3 to Form 8-K dated May 15, 2001 (File No. 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 | | [Exhibit 4.1 to Form 8-K dated June 11, 2007 (File No. 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 | | [Exhibit 4.1 to Form 8-K dated March 26, 2009 (File No. 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 | | [Exhibit 99.2 to Form 8-K dated July 22, 1998 (File No. 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 | | [Exhibit 10(2)(g) to Form 10-K for fiscal year ended September 30, 2004 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095013404017924/d20385exv10w2xgy.txt) |

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

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

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

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

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

| 4.7(h) | | Global Security for the 4.125% Senior Notes due 2044 | | [Exhibit 4.3 to Form 8-K dated June 8, 2017 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312517198618/d411353dex43.htm) |

| | | Material Contracts | | |

| 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 | | [Exhibit 10.1 to Form 8-K dated October 1, 2015 (File No. 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 | | [Exhibit 10.1 to Form 8-K dated October 5, 2016 (File No. 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 | | [Exhibit 10.1 to Form 8-K dated September 22, 2016 (File No. 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. | | [Exhibit 1.1 to Form 8-K dated March 28, 2016 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312516519807/d168211dex11.htm) |

| | | Executive Compensation Plans and Arrangements | | |

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

| 10.3(b)* | | Form of Atmos Energy Corporation Change in Control Severance Agreement - Tier II | | [Exhibit 10.7(b) to Form 10-K for fiscal year ended September 30, 2010 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095012310105040/d77592exv10w7wb.htm) |

| 10.4(a)* | | Atmos Energy Corporation Executive Retiree Life Plan | | [Exhibit 10.31 to Form 10-K for fiscal year ended September 30, 1997 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/0000930661-97-002911.txt) |

| 10.4(b)* | | Amendment No. 1 to the Atmos Energy Corporation Executive Retiree Life Plan | | [Exhibit 10.31(a) to Form 10-K for fiscal year ended September 30, 1997 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/0000930661-97-002911.txt) |

| 10.5* | | Atmos Energy Corporation Annual Incentive Plan for Management (as amended and restated October 1, 2016) | | [Exhibit 10.5 to Form 10-K for fiscal year ended September 30, 2016 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180216000066/ato20160930ex-105.htm) |

| 10.6(a)* | | Atmos Energy Corporation Supplemental Executive Benefits Plan, Amended and Restated in its Entirety August 7, 2007 | | [Exhibit 10.8(a) to Form 10-K for fiscal year ended September 30, 2008 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095013408020908/d65248exv10w8xay.htm) |

| 10.6(b)* | | Form of Individual Trust Agreement for the Supplemental Executive Benefits Plan | | [Exhibit 10.3 to Form 10-Q for quarter ended December 31, 2000 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095013401000895/d83952ex10-3.txt) |

| 10.7(a)* | | Atmos Energy Corporation Supplemental Executive Retirement Plan (As Amended and Restated, Effective as of January 1, 2016) | | [Exhibit 10.7(a) to Form 10-K for fiscal year ended September 30, 2016 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180216000066/ato20160930ex-107a.htm) |

| 10.7(b)* | | Atmos Energy Corporation Performance-Based Supplemental Executive Benefits Plan Trust Agreement, Effective Date December 1, 2000 | | [Exhibit 10.1 to Form 10-Q for quarter ended December 31, 2000 (File No. 1-10042](http://www.sec.gov/Archives/edgar/data/731802/000095013401000895/d83952ex10-1.txt)) |

| 10.8* | | Atmos Energy Corporation Account Balance Supplemental Executive Retirement Plan (As Amended and Restated, Effective as of January 1, 2016) | | [Exhibit 10.8 to Form 10-K for fiscal year ended September 30, 2016 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180216000066/ato20160930ex-108.htm) |

Date: November 13, [removed: 2017][added: 2018]

| /s/ MICHAEL E. HAEFNER | | President, Chief Executive Officer and Director | | November 13, [removed: 2017] [added: 2018] |

| /s/ CHRISTOPHER T. FORSYTHE | | Senior Vice President and Chief Financial Officer | | November 13, [removed: 2017] [added: 2018] |

| /s/ RICHARD M. THOMAS | | Vice President and Controller (Principal Accounting Officer) | | November 13, [removed: 2017] [added: 2018] |

| /s/ KIM R. COCKLIN | | Executive Chairman of the Board | | November 13, [removed: 2017] [added: 2018] |

| /s/ ROBERT W. BEST | | Director | | November 13, [removed: 2017] [added: 2018] |

| /s/ KELLY H. COMPTON | | Director | | November 13, [removed: 2017] [added: 2018] |

| /s/ RICHARD [removed: W. DOUGLAS] [added: K. GORDON] | | Director | | November 13, [removed: 2017] [added: 2018] |

| /s/ RUBEN E. ESQUIVEL | | Director | | November 13, [removed: 2017] [added: 2018] |

| /s/ RAFAEL G. GARZA | | Director | | November 13, [removed: 2017] [added: 2018] |

| /s/ RICHARD [removed: K. GORDON] [added: A. SAMPSON] | | Director | | November 13, [removed: 2017] [added: 2018] |

| /s/ ROBERT C. GRABLE | | Director | | November 13, [removed: 2017] [added: 2018] |

| /s/ NANCY K. QUINN | | Director | | November 13, [removed: 2017] [added: 2018] |

| /s/ RICHARD [removed: A. SAMPSON] [added: WARE II] | | Director | | November 13, [removed: 2017] [added: 2018] |

| /s/ STEPHEN R. SPRINGER | | Director | | November 13, [removed: 2017] [added: 2018] |

Three Years Ended September 30, [removed: 2017][added: 2018]

| Exhibit Number | | Description | | Page Number or Incorporation by Reference to |

| | | Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession | | |

| 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 29, 2016 | | [Exhibit 2.1 to Form 8-K dated October 29, 2016 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312516753686/d283961dex21.htm) |

| | | Articles of Incorporation and Bylaws | | |

| 3.1 | | Restated Articles of Incorporation of Atmos Energy Corporation - Texas (As Amended Effective February 3, 2010) | | [Exhibit 3.1 to Form 10-Q dated March 31, 2010 (File No. 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) | | [Exhibit 3.2 to Form 10-Q dated March 31, 2010 (File No. 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) | | [Exhibit 3.1 to Form 8-K dated September 28, 2015 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312515330944/d29285dex31.htm) |

| | | Instruments Defining Rights of Security Holders, Including Indentures | | |

| 4.1 | | Specimen Common Stock Certificate (Atmos Energy Corporation) | | [Exhibit 4.1 to Form 10-K for fiscal year ended September 30, 2012 (File No. 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 | | [Exhibit 4.11(a) to Form S-3 dated August 31, 2004 (File No. 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 | | [Exhibit 4.8 to Form S-3 dated August 31, 2004 (File No. 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 | | [Exhibit 99.3 to Form 8-K dated May 15, 2001 (File No. 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 | | [Exhibit 4.1 to Form 8-K dated June 11, 2007 (File No. 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 | | [Exhibit 4.1 to Form 8-K dated March 26, 2009 (File No. 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 | | [Exhibit 99.2 to Form 8-K dated July 22, 1998 (File No. 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 | | [Exhibit 10(2)(g) to Form 10-K for fiscal year ended September 30, 2004 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095013404017924/d20385exv10w2xgy.txt) |

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

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

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

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

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

| 4.7(h) | | Global Security for the 4.125% Senior Notes due 2044 | | [Exhibit 4.3 to Form 8-K dated June 8, 2017 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312517198618/d411353dex43.htm) |

| 4.7(i) | | Global Security for the 4.300% Senior Notes due 2048 | | [Exhibit 4.2 to Form 8-K dated October 4, 2018 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312518293134/d627444dex42.htm) |

| 4.7(j) | | Global Security for the 4.300% Senior Notes due 2048 | | [Exhibit 4.3 to Form 8-K dated October 4, 2018 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312518293134/d627444dex43.htm) |

| | | Material Contracts | | |

| 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 | | [Exhibit 10.1 to Form 8-K dated October 1, 2015 (File No. 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 | | [Exhibit 10.1 to Form 8-K dated October 5, 2016 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180216000059/ato20161005exhibit101.htm) |

| 10.1(c) | | [Second Amendment to Revolving Credit Agreement, dated as of September 7, 2017, 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](https://www.sec.gov/Archives/edgar/data/731802/000073180218000039/ato20180930ex-101c.htm) | | |

| 10.1(d) | | 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 | | [Exhibit 10.1 to Form 8-K dated September 22, 2016 (File No. 1-10042](http://www.sec.gov/Archives/edgar/data/731802/000073180216000057/ato20160922exhibit101.htm)) |

| 10.1(e) | | [First Amendment to Term Loan Agreement, dated as of September 7, 2017, by and among Atmos Energy Corporation, the lenders from time to time parties thereto (the "Lenders") and Branch Banking and Trust Company, in its capacity as administrative agent for the Lenders](https://www.sec.gov/Archives/edgar/data/731802/000073180218000039/firstamendmenttotermloanag.htm) | | |

| 10.2 | | Equity Distribution Agreement, dated as of November 14, 2017, among Atmos Energy Corporation, Goldman, Sachs & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC | | [Exhibit 1.1 to Form 8-K dated November 14, 2017 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312517342698/d415276dex11.htm) |

| | | Executive Compensation Plans and Arrangements | | |

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

| 10.3(b)* | | Form of Atmos Energy Corporation Change in Control Severance Agreement - Tier II | | [Exhibit 10.7(b) to Form 10-K for fiscal year ended September 30, 2010 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095012310105040/d77592exv10w7wb.htm) |

| 10.4(a)* | | Atmos Energy Corporation Executive Retiree Life Plan | | [Exhibit 10.31 to Form 10-K for fiscal year ended September 30, 1997 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/0000930661-97-002911.txt) |

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

| 10.4(b)* | | Amendment No. 1 to the Atmos Energy Corporation Executive Retiree Life Plan | | [Exhibit 10.31(a) to Form 10-K for fiscal year ended September 30, 1997 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/0000930661-97-002911.txt) |

| 10.5* | | Atmos Energy Corporation Annual Incentive Plan for Management (as amended and restated October 1, 2016) | | [Exhibit 10.5 to Form 10-K for fiscal year ended September 30, 2016 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180216000066/ato20160930ex-105.htm) |

| 10.6(a)* | | Atmos Energy Corporation Supplemental Executive Benefits Plan, Amended and Restated in its Entirety August 7, 2007 | | [Exhibit 10.8(a) to Form 10-K for fiscal year ended September 30, 2008 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095013408020908/d65248exv10w8xay.htm) |

| 10.6(b)* | | Form of Individual Trust Agreement for the Supplemental Executive Benefits Plan | | [Exhibit 10.3 to Form 10-Q for quarter ended December 31, 2000 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095013401000895/d83952ex10-3.txt) |

The exhibits listed in the accompanying Exhibits Index are filed as part of this Form 10-K.

The exhibits numbered 10.3(a) through 10.11(c) are management contracts or compensatory plans or arrangements.

| Richard W. Douglas | | | | |

| /s/ RICHARD WARE II | | Director | | November 13, 2017 |

| 2015 | | | | | | | | | | | | | | | | | | | | |

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

EXHIBITS INDEX