ATMOS ENERGY CORP

Previous wording

Atmos Energy and our subsidiaries are engaged in the regulated natural gas distribution and pipeline and storage businesses. We distribute natural gas through sales and transportation arrangements to over 3.3 million residential, commercial, public authority, and industrial customers throughout our six distribution divisions, which at June 30, 2025 covered service areas located in eight states. In addition, we transport natural gas for others through our distribution and pipeline systems.

Current wording

Atmos Energy and our subsidiaries are engaged in the regulated natural gas distribution and pipeline and storage businesses. We distribute natural gas through sales and transportation arrangements to approximately 3.4 million residential, commercial, public authority, and industrial customers throughout our six distribution divisions, which at December 31, 2025 covered service areas located in eight states. In addition, we transport natural gas for others through our distribution and pipeline systems.

Previous wording

We anticipate making significant capital expenditures for the foreseeable future to modernize our distribution and transmission system, to comply with the safety rules and regulations issued by the regulatory authorities responsible for the service areas in which we operate, and to prepare to serve the growing needs of the communities we serve. Between fiscal years 2025 and 2029, we anticipate spending approximately $24 billion, with more than 80 percent dedicated to safety and reliability spending. The magnitude and allocation of these expenditures may be affected by factors such as new policy and regulations, population growth, and increased labor and materials costs. Although we believe these costs are ultimately recoverable through our rates based on the regulatory frameworks currently available to us, full recovery is not assured.

Current wording

We anticipate making significant capital expenditures for the foreseeable future to modernize our distribution and transmission system, to comply with the safety rules and regulations issued by the regulatory authorities responsible for the service areas in which we operate, and to prepare to serve the growing needs of the communities we serve. Between fiscal years 2026 and 2030, we anticipate spending approximately $26 billion, with more than 80 percent dedicated to safety and reliability spending. The magnitude and allocation of these expenditures may be affected by factors such as new policy and regulations, population growth, and increased labor and materials costs. Although we believe these costs are ultimately recoverable through our rates based on the regulatory frameworks currently available to us, full recovery is not assured.

Previous wording

Our condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States. Preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosures of contingent assets and liabilities. We based our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. On an ongoing basis, we evaluate our estimates, including those related to the allowance for doubtful accounts, legal and environmental accruals, insurance accruals, pension and postretirement obligations, deferred income taxes, and the valuation of goodwill and other long-lived assets. Actual results may differ from such estimates.

Current wording

Our condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States. Preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosures of contingent assets and liabilities. We based our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from such estimates.

Previous wording

Our critical accounting policies are reviewed periodically by the Audit Committee of our Board of Directors. There were no significant changes to these critical accounting policies during the nine months ended June 30, 2025.

Current wording

Our critical accounting policies are reviewed periodically by the Audit Committee of our Board of Directors. There were no significant changes to these critical accounting policies during the three months ended December 31, 2025.

Previous wording

During the nine months ended June 30, 2025, we recorded net income of $1,023.9 million, or $6.40 per diluted share, compared to net income of $908.9 million, or $6.00 per diluted share for the nine months ended June 30, 2024.

Current wording

During the three months ended December 31, 2025, we recorded net income of $403.0 million, or $2.44 per diluted share, compared to net income of $351.9 million, or $2.23 per diluted share for the three months ended December 31, 2024.

Previous wording

The 13 percent year-over-year increase in net income largely reflects positive rate outcomes driven by safety and reliability spending, partially offset by higher bad debt expense, depreciation and property tax expenses, and higher spending on certain operating expenses.

Current wording

The 15 percent year-over-year increase in net income largely reflects positive rate outcomes driven by safety and reliability spending. Additionally, our results for the three months ended December 31, 2025 were favorably impacted by $35.2 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 increased employee-related costs, depreciation and property tax expenses, and higher spending on safety and compliance related activities.

Previous wording

During the nine months ended June 30, 2025, we implemented, or received approval to implement, ratemaking regulatory actions which resulted in an increase in annual operating income of $321.8 million. Additionally, as of June 30, 2025, we had ratemaking efforts in progress seeking a total increase in annual operating income of $248.7 million.

Current wording

During the three months ended December 31, 2025, we implemented, or received approval to implement, ratemaking regulatory actions which resulted in an increase in annual operating income of $122.5 million. Additionally, as of December 31, 2025, we had ratemaking efforts in progress seeking a total increase in annual operating income of $34.0 million.

Previous wording

Capital expenditures for the nine months ended June 30, 2025 were $2,597.8 million. Approximately 86 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 lag to six months or less.

Current wording

Capital expenditures for the three months ended December 31, 2025 were $1,033.3 million. Over 85 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 lag to six months or less.

Previous wording

During the nine months ended June 30, 2025, we completed approximately $1.7 billion of long-term debt and equity financing. As of June 30, 2025, our equity capitalization was 60.0 percent. As of June 30, 2025, we had approximately $5.5 billion in total liquidity, consisting of $709.4 million in cash and cash equivalents, $1,684.4 million in funds available through equity forward sales agreements and $3,094.4 million in undrawn capacity under our credit facilities.

Current wording

During the three months ended December 31, 2025, we completed approximately $1.1 billion of long-term debt and equity financing. As of December 31, 2025, our equity capitalization was 59.9 percent. As of December 31, 2025, we had approximately $4.6 billion in total liquidity, consisting of $367.0 million in cash and cash equivalents, $1,088.9 million in funds available through equity forward sales agreements and $3,094.4 million in undrawn capacity under our credit facilities.

Previous wording

•a $33.4 million increase in rate adjustments, primarily in our Mid-Tex Division.

Current wording

•a $47.7 million increase in rate adjustments, primarily in our Mid-Tex Division.

Previous wording

•a $7.2 million increase related to residential customer growth, primarily in our Mid-Tex Division, and increased industrial load.

Current wording

•a $5.8 million increase related to residential customer growth, primarily in our Mid-Tex Division, and increased industrial load.

Previous wording

•a $4.9 million increase in employee-related costs primarily due to an increase in headcount to support company growth.

Current wording

•a $4.3 million increase in employee-related costs primarily due to an increase in headcount to support company growth.

Previous wording

•a $7.5 million increase in system monitoring, line locating, and other compliance-related activities.

Current wording

•an $8.7 million increase in system monitoring, line locating, and other compliance-related activities.

Previous wording

The amounts described in the following sections represent the operating income that was requested or received in each rate filing, which may not necessarily reflect the stated amount referenced in the final order, as certain operating costs may have changed as a result of a commission’s or other governmental authority’s final ruling. During the first nine months of fiscal 2025, we implemented, or received approval to implement, regulatory proceedings, resulting in a $244.6 million increase in annual operating income as summarized below. Our ratemaking outcomes include the refund (return) of excess deferred income taxes (EDIT) resulting from previously enacted tax reform legislation and do not reflect the true economic benefit of the outcomes because they do not include the corresponding income tax benefit. Excluding these amounts, our total rate outcomes for ratemaking activities for the nine months ended June 30, 2025 were $232.5 million.

Current wording

The amounts described in the following sections represent the operating income that was requested or received in each rate filing, which may not necessarily reflect the stated amount referenced in the final order, as certain operating costs may have changed as a result of a commission’s or other governmental authority’s final ruling. During the first three months of fiscal 2026, we implemented, or received approval to implement, regulatory proceedings, resulting in a $122.5 million increase in annual operating income as summarized below. Our ratemaking outcomes include the refund (return) of excess deferred income taxes (EDIT) resulting from previously enacted tax reform legislation and do not reflect the true economic benefit of the outcomes because they do not include the corresponding income tax benefit.

Previous wording

The following ratemaking efforts seeking $248.7 million in increased annual operating income were in progress as of June 30, 2025:

Current wording

The following ratemaking efforts seeking $34.0 million in increased annual operating income were in progress as of December 31, 2025:

Previous wording

The following annual formula rate mechanisms were approved during the nine months ended June 30, 2025:

Current wording

The following annual formula rate mechanisms were approved during the three months ended December 31, 2025:

Previous wording

A rate case is a formal request from Atmos Energy to a regulatory authority to increase rates that are charged to our customers. Rate cases may also be initiated when the regulatory authorities request us to justify our rates. This process is referred to as a “show cause” action. Adequate rates are intended to provide for recovery of the Company’s costs as well as a fair rate of return and ensure that we continue to deliver reliable, reasonably priced natural gas service safely to our customers. The following table summarizes the rate cases completed in our distribution segment during the nine months ended June 30, 2025.

Current wording

A rate case is a formal request from Atmos Energy to a regulatory authority to increase rates that are charged to our customers. Rate cases may also be initiated when the regulatory authorities request us to justify our rates. This process is referred to as a “show cause” action. Adequate rates are intended to provide for recovery of the Company’s costs as well as a fair rate of return and ensure that we continue to deliver reliable, reasonably priced natural gas service safely to our customers. The following table summarizes the rate cases completed in our distribution segment during the three months ended December 31, 2025.

Previous wording

•a $17.4 million increase primarily due to rate adjustments from the GRIP filings approved in May 2024 and 2025 and the System Safety and Integrity Rider filing approved in November 2024.

Current wording

•a $20.2 million increase primarily due to rate adjustments from the GRIP filing approved in June 2025.

Previous wording

•a $4.2 million increase due to higher capacity contracted by tariff-based customers due to their increased peak day demand.

Current wording

•a $3.8 million increase due to higher capacity contracted by tariff-based customers due to their increased peak day demand.

Previous wording

•a $12.4 million increase in APT's through-system activities primarily associated with increased volumes and spreads.

Current wording

•a $7.4 million increase in APT's through-system activities primarily associated with increased spreads.

Previous 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, which expires December 3, 2027. As of June 30, 2025, $5.8 billion of securities were available for issuance under this shelf registration statement.

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, which expires December 3, 2027. As of December 31, 2025, $5.2 billion of securities were available for issuance under this shelf registration statement.

Previous wording

We also have an at-the-market (ATM) equity sales program under which we may 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 June 30, 2025, $828.5 million of equity was available for issuance under our existing ATM equity sales program. Additionally, as of June 30, 2025, we had $1.7 billion in available proceeds from outstanding forward sale agreements. Additional details are summarized in Note 8 to the condensed consolidated financial statements.

Current wording

We also have an at-the-market (ATM) equity sales program under which we may 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 December 31, 2025, $827.1 million of equity was available for issuance under our existing ATM equity sales program. Additionally, as of December 31, 2025, we had $1.1 billion in available proceeds from outstanding forward sale agreements. Additional details are summarized in Note 8 to the condensed consolidated financial statements.

Previous wording

Cash flows from operating, investing, and financing activities for the nine months ended June 30, 2025 and 2024 are presented below.

Current wording

Cash flows from operating, investing, and financing activities for the three months ended December 31, 2025 and 2024 are presented below.

Previous wording

For the nine months ended June 30, 2025, we generated cash flow from operating activities of $1,701.3 million compared with $1,403.1 million for the nine months ended June 30, 2024. Operating cash flow increased $298.3 million primarily due to the positive effects of successful rate case outcomes achieved in fiscal 2024.

Current wording

For the three months ended December 31, 2025, we generated cash flow from operating activities of $308.1 million compared with $282.0 million for the three months ended December 31, 2024. Operating cash flow increased $26.0 million primarily due to the positive effects of successful rate case outcomes achieved in fiscal 2025.

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, over 85 percent of our capital spending has been committed to improving the safety and reliability of our system.

Previous wording

For the nine months ended June 30, 2025, cash used for investing activities was $2,593.7 million compared to $2,119.1 million for the nine months ended June 30, 2024. Capital spending in our distribution segment increased $230.7 million, primarily as a result of increased system modernization and customer growth spending. Capital spending in our pipeline and storage segment increased $237.9 million primarily due to increased spending for pipeline system safety and reliability in Texas.

Current wording

For the three months ended December 31, 2025, cash used for investing activities was $1,035.6 million compared to $888.9 million for the three months ended December 31, 2024. Capital spending in our distribution segment increased $178.9 million, primarily as a result of increased system modernization and customer growth spending. Capital spending in our pipeline and storage segment decreased $36.8 million primarily due to timing of spending for pipeline system safety and reliability in Texas.

Previous wording

For the nine months ended June 30, 2025, our financing activities provided $1,297.1 million of cash compared with $1,376.0 million of cash provided by financing activities in the prior-year period.

Current wording

For the three months ended December 31, 2025, our financing activities provided $895.3 million of cash compared with $887.5 million of cash provided by financing activities in the prior-year period.

Previous wording

In the nine months ended June 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 $339.7 million. Additionally, during the nine months ended June 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. Cash dividends increased due to an 8.8 percent increase in our dividend rate and an increase in shares outstanding.

Current wording

In the three months ended December 31, 2025, we received approximately $1.1 billion in net proceeds from the issuance of long-term debt and equity. We completed a public offering of $600 million of 5.45% senior notes due January 2056, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $590.0 million. Additionally, during the three months ended December 31, 2025, we settled 3,683,384 shares that had been sold on a forward basis for net proceeds of $472.0 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. Cash dividends increased due to a 14.9 percent increase in our dividend rate and an increase in shares outstanding.

Previous wording

In the nine months ended June 30, 2025, we received approximately $1.7 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 $493.9 million. Additionally, during the nine months ended June 30, 2025, we settled 4,907,436 shares that had been sold on a forward basis for net proceeds of $568.6 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. Cash dividends increased due to an 8.1 percent increase in our dividend rate and an increase in shares outstanding.

Current wording

In the three months ended December 31, 2024, we received approximately $1.0 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. Additionally, during the three months ended December 31, 2024, we settled 3,300,904 shares that had been sold on a forward basis for net proceeds of $379.5 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. Cash dividends increased due to an 8.1 percent increase in our dividend rate and an increase in shares outstanding.

Previous wording

The following table summarizes our share issuances for the nine months ended June 30, 2025 and 2024:

Current wording

The following table summarizes our share issuances for the three months ended December 31, 2025 and 2024:

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 2, 2025, Moody's reaffirmed its short-term credit rating, downgraded our long-term credit rating to A2, and placed our ratings under stable outlook. Currently, our outlook and 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). Currently, our outlook and debt ratings, which are all considered investment grade, are as follows:

Previous wording

Except as noted in Note 11 to the condensed consolidated financial statements, there were no significant changes in our contractual obligations and commercial commitments during the nine months ended June 30, 2025.

Current wording

Except as noted in Note 11 to the condensed consolidated financial statements, there were no significant changes in our contractual obligations and commercial commitments during the three months ended December 31, 2025.

Previous wording

The following table shows the components of the change in fair value of our financial instruments for the three and nine months ended June 30, 2025 and 2024:

Current wording

The following table shows the components of the change in fair value of our financial instruments for the three months ended December 31, 2025 and 2024:

Previous wording

The following tables present certain operating statistics for our distribution and pipeline and storage segments for the three and nine months ended June 30, 2025 and 2024.

Current wording

The following tables present certain operating statistics for our distribution and pipeline and storage segments for the three months ended December 31, 2025 and 2024.