ATMOS ENERGY CORP

Previous wording

Atmos Energy's vision is to be the safest provider of natural gas services. Our commitment to this vision requires significant levels of capital spending to modernize our natural gas distribution system and operating costs to deliver natural gas safely and reliably and in full compliance with the various safety regulations impacting our business. We have the ability to begin recovering a significant portion of our expenditures timely through rate designs and mechanisms that reduce or eliminate regulatory lag and separate the recovery of our approved rate from customer usage patterns. The execution of our capital spending program, the ability to recover these expenditures timely and our ability to access the capital markets to satisfy our financing needs are the primary drivers that affect our financial performance.

Current wording

Atmos Energy's vision is to be the safest provider of natural gas services. Our commitment to this vision requires significant levels of capital spending to modernize our natural gas distribution system and operating costs to deliver natural gas safely and reliably and in compliance with the various safety regulations impacting our business. We have the ability to begin recovering a significant portion of our expenditures timely through rate designs and mechanisms that reduce or eliminate regulatory lag and separate the recovery of our approved rate from customer usage patterns. The execution of our capital spending program, the ability to recover these expenditures timely and our ability to access the capital markets to satisfy our financing needs are the primary drivers that affect our financial performance.

Previous wording

During fiscal 2024, we recorded net income of $1,042.9 million, or $6.83 per diluted share, compared to net income of $885.9 million, or $6.10 per diluted share in the prior year. The year-over-year increase in net income of $157.0 million largely reflects positive rate outcomes driven by safety and reliability spending. Additionally, our fiscal 2024 results were favorably impacted by $21.1 million as a result of legislation that became effective during the first quarter of fiscal 2024 to reduce property tax expenses in Texas and $13.9 million as a result of a change to our bad debt recovery mechanism in Mississippi. These increases were partially offset by increased employee-related costs, depreciation expense, and interest expense.

Current wording

During fiscal 2025, we recorded net income of $1,198.8 million, or $7.46 per diluted share, compared to net income of $1,042.9 million, or $6.83 per diluted share in the prior year. The year-over-year increase in net income of $155.9 million largely reflects positive rate outcomes driven by safety and reliability spending. Additionally, our fiscal 2025 results were favorably impacted by $26.2 million as a result of Texas legislation that became effective during the third quarter of fiscal 2025 related to infrastructure spending. These increases were partially offset by higher bad debt expense, increased employee-related costs, depreciation and property tax expenses, and higher spending on safety and compliance related activities.

Previous wording

During the year ended September 30, 2024, we implemented ratemaking regulatory actions which resulted in an increase in annual operating income of $376.3 million. Excluding the impact of the refund of excess deferred income taxes resulting from previously enacted tax reform legislation, our total fiscal 2024 rate outcomes were $307.1 million. Additionally, we had ratemaking efforts in progress at September 30, 2024, seeking a total increase in annual operating income of $218.0 million.

Current wording

During the year ended September 30, 2025, we implemented ratemaking regulatory actions which resulted in an increase in annual operating income of $333.6 million. Excluding the impact of the refund of excess deferred income taxes resulting from previously enacted tax reform legislation, our total fiscal 2025 rate outcomes were $322.8 million. Additionally, we had ratemaking efforts in progress at September 30, 2025, seeking a total increase in annual operating income of $231.1 million.

Previous wording

During fiscal year 2024, we refunded $133.6 million in excess deferred tax liabilities to customers. These refunds also reduced our income tax expense, resulting in an immaterial impact to our fiscal 2024 and 2023 results.

Current wording

During fiscal year 2025, we refunded $78.8 million in excess deferred tax liabilities to customers. These refunds also reduced our income tax expense, resulting in an immaterial impact to our fiscal 2025 and 2024 results.

Previous wording

Capital expenditures for fiscal 2024 were $2.9 billion. Approximately 83 percent was invested to improve the safety and reliability of our distribution and transportation systems, with a significant portion of this investment incurred under regulatory mechanisms that reduce regulatory lag to six months or less.

Current wording

Capital expenditures for fiscal 2025 were $3.6 billion. Approximately 87 percent was invested to improve the safety and reliability of our distribution and transportation systems, with a significant portion of this investment incurred under regulatory mechanisms that reduce regulatory lag to six months or less.

Previous wording

During fiscal 2024, we completed approximately $2.0 billion of long-term debt and equity financing. As of September 30, 2024, our equity capitalization was 61.0 percent. As of September 30, 2024, we had approximately $4.8 billion in total liquidity, consisting of $307.3 million in cash and cash equivalents, $1,380.6 million in funds available through equity forward sales agreements, and $3,094.4 million in undrawn capacity under our credit facilities.

Current wording

During fiscal 2025, we completed approximately $1.8 billion of long-term debt and equity financing. As of September 30, 2025, our equity capitalization was 60.3 percent. As of September 30, 2025, we had approximately $4.9 billion in total liquidity, consisting of $202.7 million in cash and cash equivalents, $1,558.5 million in funds available through equity forward sales agreements, and $3,094.4 million in undrawn capacity under our credit facilities.

Previous wording

Our ability to earn our authorized rates is based primarily on our ability to improve the rate design in our various ratemaking jurisdictions to minimize regulatory lag and, ultimately, separate the recovery of our approved rates from customer usage patterns. Improving rate design is a long-term process and is further complicated by the fact that we operate in multiple rate jurisdictions. The “Ratemaking Activity” section of this Form 10-K describes our current rate strategy, progress towards implementing that strategy, and recent ratemaking initiatives in more detail. During fiscal 2024, we completed regulatory proceedings in our distribution segment resulting in a $266.8 million increase in annual operating income. Excluding the impact of the refund of excess deferred income taxes resulting from previously enacted tax reform legislation, our total fiscal 2024 annualized rate outcomes in our distribution segment were $234.5 million.

Current wording

Our ability to earn our authorized rates is based primarily on our ability to improve the rate design in our various ratemaking jurisdictions to minimize regulatory lag and, ultimately, separate the recovery of our approved rates from customer usage patterns. Improving rate design is a long-term process and is further complicated by the fact that we operate in multiple rate jurisdictions. The “Ratemaking Activity” section of this Form 10-K describes our current rate strategy, progress towards implementing that strategy, and recent ratemaking initiatives in more detail. During fiscal 2025, we completed regulatory proceedings in our distribution segment resulting in a $256.4 million increase in annual operating income. Excluding the impact of the refund of excess deferred income taxes resulting from previously enacted tax reform legislation, our total fiscal 2025 annualized rate outcomes in our distribution segment were $245.6 million.

Previous wording

Operating income for our distribution segment increased 23.4 percent. Key drivers for the change in operating income include:

Current wording

Operating income for our distribution segment increased 12.8 percent. Key drivers for the change in operating income include:

Previous wording

•a $219.2 million increase in rate adjustments, primarily in our Mid-Tex Division.

Current wording

•a $184.1 million increase in rate adjustments, primarily in our Mid-Tex Division.

Previous wording

•a $24.8 million increase related to residential customer growth, primarily in our Mid-Tex Division, and increased industrial load.

Current wording

•a $26.7 million increase related to residential customer growth, primarily in our Mid-Tex Division, and increased industrial load.

Previous wording

•a $27.8 million decrease in refunds of excess deferred taxes to customers, which is substantially offset in income tax expense.

Current wording

•a $46.3 million decrease in refunds of excess deferred taxes to customers, which is substantially offset in income tax expense.

Previous wording

•a $50.0 million increase in depreciation expense associated with increased capital investments.

Current wording

•a $78.0 million increase in depreciation expense and property taxes associated with increased capital investments.

Previous wording

•a $19.9 million increase in employee-related costs primarily due to an increase in headcount to support company growth.

Current wording

•a $32.6 million increase in employee-related costs primarily due to an increase in headcount to support company growth.

Previous wording

APT annually uses GRIP to recover capital costs incurred in the prior calendar year. On February 27, 2024, APT made a GRIP filing that covered changes in net property, plant and equipment investment from January 1, 2023 through December 31, 2023 with a requested increase in operating income of $82.4 million. On May 14, 2024, the Texas Railroad Commission (RRC) approved the Company's GRIP filing.

Current wording

APT annually uses GRIP to recover capital costs incurred in the prior calendar year. On February 26, 2025, APT made a GRIP filing that covered changes in net property, plant and equipment investment from January 1, 2024 through December 31, 2024 with a requested increase in operating income of $77.2 million. On June 17, 2025, the Texas Railroad Commission (RRC) approved the Company's GRIP filing.

Previous wording

Operating income for our pipeline and storage segment increased 33.8 percent. Key drivers for the change in operating income include:

Current wording

Operating income for our pipeline and storage segment increased 19.1 percent. Key drivers for the change in operating income include:

Previous wording

•a $68.4 million increase due to rate adjustments from the GRIP filings approved in May 2023 and 2024, and the rate case approved in December 2023.

Current wording

•an $89.4 million increase primarily due to rate adjustments from the GRIP filings approved in May 2024 and June 2025, the System Safety and Integrity Rider filing approved in November 2024, and the rate case approved in December 2023.

Previous wording

•a $39.0 million net increase in APT's through-system activities primarily associated with increased spreads.

Current wording

•a $7.7 million increase in APT's through-system activities.

Previous wording

•a $14.5 million increase due to higher capacity contracted by tariff-based customers due to their increased peak day demand.

Current wording

•a $16.5 million increase due to higher capacity contracted by tariff-based customers due to their increased peak day demand.

Previous wording

•an $8.4 million increase in depreciation expense associated with increased capital investments.

Current wording

•a $23.5 million increase in depreciation expense and property taxes associated with increased capital investments.

Previous wording

We have a shelf registration statement on file with the Securities and Exchange Commission (SEC) that allows us to issue up to $5.0 billion in common stock and/or debt securities. As of the date of this report, $1.1 billion of securities remained available for issuance under the shelf registration statement, which expires March 31, 2026.

Current wording

We have a shelf registration statement on file with the Securities and Exchange Commission (SEC) that allows us to issue up to $8.0 billion in common stock and/or debt securities. As of the date of this report, $5.2 billion of securities remained available for issuance under the shelf registration statement, which expires December 3, 2027.

Previous wording

We also have an at-the-market (ATM) equity sales program that allows us to issue and sell shares of our common stock up to an aggregate offering price of $1.0 billion (including shares of common stock that may be sold pursuant to forward sale agreements entered into in connection with the ATM equity sales program), which expires March 31, 2026. As of the date of this report, $10.0 million of equity is available for issuance under this ATM equity sales program. Additionally, as of September 30, 2024, we had $1.4 billion in available proceeds from outstanding forward sale agreements issued under the ATM program.

Current wording

We also have an at-the-market (ATM) equity sales program that allows us to issue and sell shares of our common stock up to an aggregate offering price of $1.7 billion (including shares of common stock that may be sold pursuant to forward sale agreements entered into in connection with the ATM equity sales program), which expires December 3, 2027. As of the date of this report, $828.5 million of equity is available for issuance under this ATM equity sales program. Additionally, as of September 30, 2025, we had $1.6 billion in available proceeds from outstanding forward sale agreements issued under the ATM program.

Previous wording

For the fiscal year ended September 30, 2024, cash flow provided by operating activities was $1,733.7 million compared with $3,459.7 million in the prior year. Fiscal 2023 operating cash flow included $2,021.9 million of cash received as a result of the conclusion of Texas securitization proceedings. Excluding this cash inflow, operating cash flow in fiscal 2023 was $1,437.8 million, and the year-over-year increase in operating cash flow primarily reflects the positive effects of successful rate case outcomes achieved in fiscal 2024 and 2023.

Current wording

For the fiscal year ended September 30, 2025, cash flow provided by operating activities was $2,049.5 million compared with $1,733.7 million in the prior year. The year-over-year increase in operating cash flow primarily reflects the positive effects of successful rate case outcomes achieved in fiscal 2025 and 2024.

Previous wording

Our capital expenditures are primarily used to improve the safety and reliability of our distribution and transmission system through pipeline replacement and system modernization and to enhance and expand our system to meet customer needs. Over the last three fiscal years, approximately 86 percent of our capital spending has been committed to improving the safety and reliability of our system.

Current wording

Our capital expenditures are primarily used to improve the safety and reliability of our distribution and transmission system through pipeline replacement and system modernization and to enhance and expand our system to meet customer needs. Over the last three fiscal years, approximately 85 percent of our capital spending has been committed to improving the safety and reliability of our system.

Previous wording

For the fiscal year ended September 30, 2024, we had $2.9 billion in capital expenditures compared with $2.8 billion for the fiscal year ended September 30, 2023. Capital spending in our distribution segment increased $322.2 million, primarily as a result of increased system modernization and customer growth spending. Capital spending in our pipeline and storage segment decreased $191.0 million, primarily due to the timing of spending for pipeline system safety and reliability in Texas.

Current wording

For the fiscal year ended September 30, 2025, we had $3.6 billion in capital expenditures compared with $2.9 billion for the fiscal year ended September 30, 2024. Capital spending in our distribution segment increased $413.4 million, primarily as a result of increased system modernization and customer growth spending. Capital spending in our pipeline and storage segment increased $210.9 million, primarily due to increased spending for pipeline system safety and reliability in Texas.

Previous wording

Our financing activities provided $1,478.6 million of cash for fiscal year 2024 compared with $696.8 million of cash used by financing activities for fiscal year 2023.

Current wording

Our financing activities provided $1,406.8 million of cash for fiscal year 2025 compared with $1,478.6 million of cash provided by financing activities for fiscal year 2024.

Previous wording

During the fiscal year ended September 30, 2023, we repaid $2.2 billion in long-term debt, and we received approximately $1.6 billion in net proceeds from the issuance of long-term debt and equity. We completed a public offering of $500 million of 5.75% senior notes due October 2052 and $300 million of 5.45% senior notes due October 2032, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $789.4 million. Additionally, during the year ended September 30, 2023, we settled 7,272,261 shares that had been sold on a forward basis for net proceeds of $806.9 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. We also received $171.1 million from the settlement of forward starting interest rate swaps related to a debt issuance completed in October 2023. Cash dividends increased due to an 8.8 percent increase in our dividend rate and an increase in shares outstanding. Finally, Atmos Energy Kansas Securitization I, LLC, a special-purpose, wholly-owned subsidiary of Atmos Energy, issued $95 million in securitized long-term debt.

Current wording

During the fiscal year ended September 30, 2025, we received approximately $1.8 billion in net proceeds from the issuance of long-term debt and equity. We completed a public offering of $650 million of 5.00% senior notes due December 2054, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $639.4 million. We also completed a public offering of $500 million of 5.20% senior notes due August 2035, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $493.7 million. Additionally, during the fiscal year ended September 30, 2025, we settled 5,931,289 shares that had been sold on a forward basis for net proceeds of $698.5 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. We also received $122.9 million from the settlement of forward starting interest rate swaps related to a debt issuance completed in October 2025. Cash dividends increased due to an 8.1 percent increase in our dividend rate and an increase in shares outstanding.

Previous wording

During the fiscal year ended September 30, 2024, we received approximately $2.0 billion in net proceeds from the issuance of long-term debt and equity. We completed a public offering of $500 million of 6.20% senior notes due October 2053 and $400 million of 5.90% senior notes due October 2033, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $889.4 million. We also completed a public offering of $325 million of 5.90% senior notes due October 2033, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $339.0 million. Additionally, during the fiscal year ended September 30, 2024, we settled 6,401,469 shares that had been sold on a forward basis for net proceeds of $750.0 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. We also received $231.1 million from the settlement of forward starting interest rate swaps related to a debt issuance completed in October 2024. Cash dividends increased due to an 8.8 percent increase in our dividend rate and an increase in shares outstanding.

Current wording

During the fiscal year ended September 30, 2024, we received approximately $2.0 billion in net proceeds from the issuance of long-term debt and equity. We completed a public offering of $500 million of 6.20% senior notes due November 2053 and $400 million of 5.90% senior notes due November 2033, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $889.4 million. We also completed a public offering of $325 million of 5.90% senior notes due November 2033, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $339.0 million. Additionally, during the year ended September 30, 2024, we settled 6,401,469 shares that had been sold on a forward basis for net proceeds of $750.0 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. We also received $231.1 million from the settlement of forward starting interest rate swaps related to a debt issuance completed in October 2024. Cash dividends increased due to an 8.8 percent increase in our dividend rate and an increase in shares outstanding.

Previous wording

Our debt is rated by two rating agencies: Standard & Poor’s Corporation (S&P) and Moody’s Investors Service (Moody’s). On April 1, 2024, Moody's reaffirmed its long-term and short-term credit ratings and placed our ratings under negative outlook. As of September 30, 2024, our outlook and current debt ratings, which are all considered investment grade, are as follows:

Current wording

Our debt is rated by two rating agencies: Standard & Poor’s Corporation (S&P) and Moody’s Investors Service (Moody’s). On April 2, 2025, Moody's reaffirmed its short-term credit ratings, downgraded our long-term credit rating to A2, and placed our ratings under stable outlook. Currently, our outlook and current debt ratings, which are all considered investment grade, are as follows:

Previous wording

(3)Finance lease payments shown above include interest totaling $17.6 million. See Note 7 to the consolidated financial statements.

Current wording

(3)Finance lease payments shown above include interest totaling $15.8 million. See Note 7 to the consolidated financial statements.

Previous wording

(4)Operating lease payments shown above include interest totaling $61.6 million. See Note 7 to the consolidated financial statements.

Current wording

(4)Operating lease payments shown above include interest totaling $68.2 million. See Note 7 to the consolidated financial statements.

Previous wording

We maintain supply contracts with several vendors that generally cover a period of up to one year. Commitments for estimated base gas volumes are established under these contracts on a monthly basis at contractually negotiated prices. Commitments for incremental daily purchases are made as necessary during the month in accordance with the terms of individual contracts. Our Mid-Tex Division also maintains a limited number of long-term supply contracts to ensure a reliable source of gas for our customers in its service area which obligate it to purchase specified volumes at market and fixed prices. At September 30, 2024, we were committed to purchase 25.9 Bcf within one year and 38.7 Bcf within two to three years under indexed contracts. At September 30, 2024, we were committed to purchase 6.8 Bcf within one year under fixed price contracts with a weighted average price of $3.10 per Mcf.

Current wording

We maintain supply contracts with several vendors that generally cover a period of up to one year. Commitments for estimated base gas volumes are established under these contracts on a monthly basis at contractually negotiated prices. Commitments for incremental daily purchases are made as necessary during the month in accordance with the terms of individual contracts. Our Mid-Tex Division also maintains a limited number of long-term supply contracts to ensure a reliable source of gas for our customers in its service area which obligate it to purchase specified volumes at market and fixed prices. At September 30, 2025, we were committed to purchase 73.4 Bcf within one year and 114.9 Bcf within two to three years under indexed contracts. At September 30, 2025, we were committed to purchase 21.0 Bcf within one year under fixed price contracts with a weighted average price of $2.70 per Mcf.