Atmos Energy (ATO) 10-K risk factor changes: FY2021 vs FY2020

[removed: Federal,] [added: However, federal,] regional and/or state legislative and/or regulatory initiatives may attempt to control or limit the causes of climate change, including greenhouse gas emissions, such as carbon dioxide and methane.

[removed: They could also provide a cost advantage to alternative energy sources, impose] costs or restrictions on end users of natural gas, or result in other costs or requirements, such as costs associated with the adoption of new infrastructure and technology to respond to new mandates.

While Atmos Energy, with the support from each of its regulatory commissions, is accelerating the replacement of [removed: aging] pipeline infrastructure, operating issues such 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.

If a substantial disruption to or reduction in interstate natural gas pipelines’ transmission and storage capacity occurred due to operational failures or disruptions, legislative or regulatory actions, hurricanes, tornadoes, floods, [added: extreme cold weather,] terrorist or cyber-attacks or acts of war, our operations or financial results could be adversely affected.

In the case of industrial customers, such as manufacturing plants, adverse economic conditions, including higher gas costs, could cause these customers to use alternative sources of energy, such as electricity, or bypass our systems in favor of special [removed: competitive contracts with lower per-unit costs.]

We have weather-normalized rates for approximately [removed: 97] [added: 96] percent of our residential and commercial revenues in our distribution operations, which substantially mitigates the adverse effects of warmer-than-normal weather for meters in those service areas.

[removed: Such climate] [added: Climate] change could [added: also] cause shifts in population, including customers moving away from our service territories.

It could also result in more frequent and more severe weather events, such as hurricanes and tornadoes, which could increase our costs to repair damaged facilities and restore service to our [removed: customers.][added: customers or impact the cost of gas.]

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

Also, companies in our industry may face a heightened risk of exposure to actual acts of terrorism, which could subject our operations to increased [added: risks.]

Additionally, should economic conditions deteriorate, our industrial customers could seek alternative energy sources, which could result in lower [removed: sales] [added: transportation] volumes.

Rapid increases in the costs of purchased gas would cause us to experience a significant increase in short-term [added: or long-term] debt.

Increases in purchased gas costs also slow our natural gas distribution collection efforts as customers are more likely to delay the payment of their gas bills, leading to higher than normal [added: accounts receivable.]

The outbreak of COVID-19 [added: or any other pandemic] and [removed: its] [added: their] impact on business and economic conditions could negatively affect our business, results of operations and financial condition.

The scale and scope of the [removed: recent] COVID-19 outbreak, the resulting pandemic, [added: any other future pandemic,] and [removed: the] [added: their] impact on the economy and financial markets could adversely affect the Company’s business, results of operations and financial condition.

[removed: As] [added: Regarding COVID-19, as] an essential business, the Company continues to provide natural gas services and has implemented business continuity and emergency response plans to continue to provide natural gas services to customers and support the Company’s operations, while taking health and safety measures such as implementing worker distancing measures and using a remote workforce where possible.

However, there is no assurance that the continued spread of COVID-19 and efforts to contain the virus [removed: (including, but not limited to, voluntary and mandatory quarantines, restrictions on travel, limiting gatherings of people, and reduced operations and extended closures of many businesses and institutions)] will not materially impact our business, results of operations and financial condition.

Six of the eight states in which we operate have passed legislation to block attempts by local governments to limit the types of energy available to customers.

They could also provide a cost advantage to alternative energy sources, impose

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competitive contracts with lower per-unit costs.

To the extent climate change results in temperatures that differ materially from temperatures we are currently experiencing, financial results could be adversely affected through lower gas volumes and revenues.

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systems or serve our customers timely.

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risks.

accounts receivable.

In particular, the continued spread of COVID-19 and efforts to contain the virus could:

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| • | impact customer demand for natural gas, particularly from commercial and industrial customers; |

| • | reduce the availability and productivity of our employees and contractors; |

| • | cause us to experience an increase in costs as a result of our emergency measures, delayed payments from our customers and uncollectable accounts; |

| • | cause the Company’s contractors, suppliers and other business partners to be unable to fulfill their contractual obligations; |

| • | result in our inability to meet the requirements of the covenants in our existing credit facilities, including covenants regarding the ratio of indebtedness to total capitalization; |

| • | cause a deterioration in our financial metrics or the business environment that impacts our credit ratings; |

| • | impact our liquidity position and cost of and ability to access funds from financial institutions and capital markets; and |

| • | cause other unpredictable events. |

The situation surrounding COVID-19 remains fluid and the likelihood of an impact on the Company that could be material increases the longer the virus impacts activity levels in the United States.

Therefore, it is difficult to predict with certainty the potential impact of the virus on the Company’s business, results of operations and financial condition.

To the extent the COVID-19 pandemic has an adverse impact on the Company’s business, results of operations and financial condition, it may also have the effect of heightening many of the other risk factors disclosed herein, such as those relating to 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 performance or creditworthiness and interest rate risk; and the impact of adverse economic conditions on our customers.

[removed: These risks and uncertainties include the following: federal, state and local regulatory and political trends and decisions, including the impact of rate proceedings before] various state regulatory commissions; increased federal regulatory oversight and potential penalties; possible increased federal, state and local regulation of the safety of our operations; the impact of greenhouse gas emissions or other legislation or regulations intended to address climate change; possible significant costs and liabilities resulting from pipeline integrity and other similar programs and related repairs; the inherent hazards and risks involved in distributing, transporting and storing 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; the impact of climate change; the inability to continue to hire, train and retain operational, technical and managerial personnel; increased dependence on technology that may hinder the Company's business if such technologies fail; the threat of cyber-attacks or acts of cyber-terrorism that could disrupt our business operations and information technology 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; the capital-intensive nature of 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 performance or creditworthiness and interest rate risk; the concentration of our operations in Texas; the impact of adverse economic conditions on our customers; changes in the availability and price of natural gas; increased costs of providing health care benefits, along with pension and postretirement health care benefits and increased funding requirements; [added: and] the outbreak of COVID-19 and its impact on business and economic conditions.

| [removed: Critical Accounting] [added: Critical Accounting] Policy | [added: | |] Summary of Policy | [added: | |] Factors Influencing Application of the Policy | [added: | |]

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

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

| Pension and other postretirement plans | [added: | |] Pension and other postretirement plan costs and liabilities are determined on an actuarial basis using a September 30 measurement date and are affected by numerous assumptions and estimates including the market value of plan assets, estimates of the expected return on plan assets, assumed discount rates and current demographic and actuarial mortality data. The assumed discount rate and the expected return are the assumptions that generally have the most significant impact on our pension costs and liabilities. The assumed discount rate, the assumed health care cost trend rate and assumed rates of retirement generally have the most significant impact on our postretirement plan costs and liabilities. The discount rate is utilized principally in calculating the actuarial present value of our pension and postretirement obligations and net periodic pension and postretirement benefit plan costs. When establishing our discount rate, we consider high quality corporate bond rates based on bonds available in the marketplace that are suitable for settling the obligations, changes in those rates from the prior year and the implied discount rate that is derived from matching our projected benefit disbursements with currently available high quality corporate bonds. The expected long-term rate of return on assets is utilized in calculating the expected return on plan assets component of our annual pension and postretirement plan costs. We estimate the expected return on plan assets by evaluating expected bond returns, equity risk premiums, asset allocations, the effects of active plan management, the impact of periodic plan asset rebalancing and historical performance. We also consider the guidance from our investment advisors in making a final determination of our expected rate of return on assets. To the extent the actual rate of return on assets realized over the course of a year is greater than or less than the assumed rate, that year’s annual pension or postretirement plan costs are not affected. Rather, this gain or loss reduces or increases future pension or postretirement plan costs over a period of approximately ten to twelve years. The market-related value of our plan assets represents the fair market value of the plan assets, adjusted to smooth out short-term market fluctuations over a five-year period. The use of this methodology will delay the impact of current market fluctuations on the pension expense for the period. We estimate the assumed health care cost trend rate used in determining our postretirement net expense based upon our actual health care cost experience, the effects of recently enacted legislation and general economic conditions. Our assumed rate of retirement is estimated based upon our annual review of our participant census information as of the measurement date. | [added: | |] General economic and market conditions Assumed investment returns by asset class Assumed future salary increases Assumed discount rate Projected timing of future cash disbursements Health care cost experience trends Participant demographic information Actuarial mortality assumptions Impact of legislation Impact of regulation | [added: | |]

| Impairment assessments | [added: | |] We review the carrying value of our long-lived assets, including goodwill and identifiable intangibles, whenever events or changes in circumstance indicate that such carrying values may not be recoverable, and at least annually for goodwill, as required by U.S. accounting standards. The evaluation of our goodwill balances and other long-lived assets or identifiable assets for which uncertainty exists regarding the recoverability of the carrying value of such assets involves the assessment of future cash flows and external market conditions and other subjective factors that could impact the estimation of future cash flows including, but not limited to the commodity prices, the amount and timing of future cash flows, future growth rates and the discount rate. Unforeseen events and changes in circumstances or market conditions could adversely affect these estimates, which could result in an impairment charge. | [added: | |] General economic and market conditions Projected timing and amount of future discounted cash flows Judgment in the evaluation of relevant data | [added: | |]

As described further in Note [removed: 13] [added: 14] to the consolidated financial statements, due to the passage of Kansas House Bill 2585, we remeasured our deferred tax liability and updated our state deferred tax rate.

Due to the non-recurring nature of [removed: these benefits,] [added: this benefit,] we believe that net income and diluted net income per share before the non-cash income tax [removed: benefits] [added: benefit] provide a more relevant measure to analyze our financial performance than net income and diluted net income per share in order to allow investors to better analyze our core results and allow the information to be presented on a comparative basis.

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

| | [added: | | 2021 | | | | | |] 2020 | | | | [removed: 2019] | | [added: 2019] | | [removed: 2018] | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | | | [removed: 2019] [added: | | 2020] vs. [removed: 2018] [added: 2019] | | |

| | [added: | |] (In thousands, except per share data) | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| Net income | [added: | |] $ | [removed: 601,443] [added: 665,563] | | | [added: | |] $ | [removed: 511,406] [added: 601,443] | | | [added: | |] $ | [removed: 603,064] [added: 511,406] | | | [added: | |] $ | [removed: 90,037] [added: 64,120] | | | [added: | |] $ | [removed: (91,658] [added: 90,037] | [removed: )] |

| Non-cash income tax benefits | [removed: (20,962] | | [removed: )] [added: —] | | [added: | | | | (20,962) | | | | | |] — | | | | [removed: (158,782] | | [removed: )] [added: 20,962] | | [removed: (20,962] | | [removed: )] | | [removed: 158,782] [added: (20,962)] | | |

| Adjusted net income | [added: | |] $ | [removed: 580,481] [added: 665,563] | | | [added: | |] $ | [removed: 511,406] [added: 580,481] | | | [added: | |] $ | [removed: 444,282] [added: 511,406] | | | [added: | |] $ | [removed: 69,075] [added: 85,082] | | | [added: | |] $ | [removed: 67,124] [added: 69,075] | |

| Diluted net income per share | [added: | |] $ | [removed: 4.89] [added: 5.12] | | | [added: | |] $ | [removed: 4.35] [added: 4.89] | | | [added: | |] $ | [removed: 5.43] [added: 4.35] | | | [added: | |] $ | [removed: 0.54] [added: 0.23] | | | [added: | |] $ | [removed: (1.08] [added: 0.54] | [removed: )] |

| Diluted EPS from non-cash income tax benefits | [removed: (0.17] | | [removed: )] [added: —] | | [added: | | | | (0.17) | | | | | |] — | | | | [removed: (1.43] | | [removed: )] [added: 0.17] | | [removed: (0.17] | | [removed: )] | | [removed: 1.43] [added: (0.17)] | | |

| Adjusted diluted net income per share | [added: | |] $ | [removed: 4.72] [added: 5.12] | | | [added: | |] $ | [removed: 4.35] [added: 4.72] | | | [added: | |] $ | [removed: 4.00] [added: 4.35] | | | [added: | |] $ | [removed: 0.37] [added: 0.40] | | | [added: | |] $ | [removed: 0.35] [added: 0.37] | |

During fiscal [removed: 2020,] [added: 2021,] we recorded net income of [removed: $601.4] [added: $665.6] million, or [removed: $4.89] [added: $5.12] per diluted share, compared to net income of [removed: $511.4] [added: $601.4] million, or [removed: $4.35] [added: $4.89] per diluted share in the prior year.

After adjusting for a nonrecurring income tax benefit recognized during fiscal 2020, [removed: we recorded] adjusted net income [removed: of] [added: was] $580.5 million, or $4.72 per diluted share [removed: for] [added: in] the [removed: year ended September 30, 2020.][added: prior year.]

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

| | [removed: 2020] | | [added: 2021] | | [removed: 2019] | | | | [removed: 2018] [added: 2020] | | | [added: | | | 2019 | | |]

| | [added: | |] (In thousands) | | | | | | | | | | | [added: | | | |]

| Distribution segment | [added: | |] $ | [removed: 395,664] [added: 445,862] | | | [added: | |] $ | [removed: 328,814] [added: 395,664] | | | [added: | |] $ | [removed: 442,966] [added: 328,814] | |

| Pipeline and storage segment | [removed: 205,779] | | [added: 219,701] | | [removed: 182,592] | | | | [removed: 160,098] [added: 205,779] | | | [added: | | | 182,592 | | |]

| Net income | [added: | |] $ | [removed: 601,443] [added: 665,563] | | | [added: | |] $ | [removed: 511,406] [added: 601,443] | | | [added: | |] $ | [removed: 603,064] [added: 511,406] | |

The year-over-year increase in adjusted net income of [removed: $69.1 million, or 14 percent,] [added: $85.1 million] largely reflects positive rate outcomes driven by safety and reliability spending and [added: distribution] customer [removed: growth] [added: growth, partially offset by lower service order revenues and higher bad debt expense] in our distribution [removed: business.][added: segment due to the temporary suspension of collection activities during the pandemic and increased spending on system maintenance activities.]

During the year ended September 30, [removed: 2020,] [added: 2021,] we implemented ratemaking regulatory actions which resulted in an increase in annual operating income of [removed: $160.2 million and had ratemaking efforts in progress at September 30, 2020, seeking a total increase in annual operating income of $131.9] [added: $185.7] million.

As of the date of this report, we have received approval to implement [removed: $106.6] [added: $25.0] million of this amount in the first quarter of fiscal [removed: 2021.][added: 2022.]

Capital expenditures for fiscal [removed: 2020] [added: 2021] increased [removed: 14] [added: 2] percent period-over-period, to [removed: $1.9] [added: $2.0] billion.

Over 85 percent was invested to improve the safety and reliability of our distribution and [removed: transmission] [added: transportation] systems, with a significant portion of this investment incurred under regulatory mechanisms that reduce regulatory lag to six months or less.

As of September 30, [removed: 2020, our equity capitalization was 60 percent and] [added: 2021,] we had approximately [removed: $2.6] [added: $2.9] billion in total liquidity, including cash and cash equivalents and funds available through equity forward sales agreements.

As a result of the continued [removed: contribution and] stability of our earnings, cash flows and capital structure, our Board of Directors increased the quarterly dividend by [removed: 8.7%] [added: 8.8%] percent for fiscal [removed: 2021.][added: 2022.]

[removed: Distribution Segment][added: Distribution Segment]

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

Therefore, the amount of these taxes included in [removed: revenue] [added: revenues] is influenced by the cost of gas and the level of gas sales volumes.

This risk is currently mitigated by rate design that allows us to collect from our customers the gas cost portion of our bad debt expense on approximately [removed: 78] [added: 79] percent of our residential and commercial revenues.

During fiscal [removed: 2020,] [added: 2021,] we completed [removed: 17] regulatory proceedings in our distribution [removed: segment,] [added: segment] resulting in a [removed: $110.9] [added: $141.8] million increase in annual operating income.

Financial and operational highlights for our distribution segment for the fiscal years ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] are presented below.

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

| Operating revenues | [added: | |] $ | [removed: 2,626,993] [added: 3,241,973] | | | [added: | |] $ | [removed: 2,745,461] [added: 2,626,993] | | | [added: | |] $ | [removed: 3,003,047] [added: 2,745,461] | | | [added: | |] $ | [removed: (118,468] [added: 614,980] | [removed: )] | | [added: | |] $ | [removed: (257,586] [added: (118,468)] | [removed: )] |

These risks and uncertainties include the following: federal, state and local regulatory and political trends and decisions, including the impact of rate proceedings before

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

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

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Excluding the impact of the refund of excess deferred income taxes resulting from previously enacted tax reform legislation, our total fiscal 2021 rate outcomes were $226.2 million.

Additionally, we had ratemaking efforts in progress at September 30, 2021, seeking a total increase in annual operating income of $56.5 million.

Excluding the impact of the refund of excess deferred income taxes resulting from previously enacted tax reform legislation, we have received approval to implement $68.5 million during the first quarter of fiscal 2022.

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During fiscal year 2021, we refunded $55.9 million in excess deferred tax liabilities to customers.

The refunds reduced operating income and reduced our annual effective income tax rate to 18.8% in fiscal 2021 compared with 19.5% in fiscal 2020.

During fiscal 2021, we completed over $3.4 billion of long-term debt and equity financing, including $2.2 billion of incremental financing issued to pay for the purchased gas costs incurred during Winter Storm Uri.

As of September 30, 2021, our equity capitalization was 51.9 percent.

Excluding the $2.2 billion of incremental financing, our equity capitalization was 60.6 percent.

Excluding the impact of the refund of excess deferred income taxes resulting from previously enacted tax reform legislation, our total fiscal 2021 annualized rate outcomes in our distribution segment were $182.3 million.

Our distribution operations are also affected by the cost of natural gas.

We are generally able to pass the cost of gas through to our customers without markup under purchased gas cost adjustment mechanisms; therefore, increases in the cost of gas are offset by a corresponding increase in revenues.

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- a $3.8 million decrease in employee related costs.

- a $5.0 million decrease in travel and entertainment expense.

- a $12.8 million increase in pipeline maintenance and related activities.

- a $5.1 million increase in insurance expense.

The year-over- year change in other non-operating expense and interest charges of $22.4 million primarily reflects increased amortization of prior service cost associated with our Retiree Medical Plan, as presented in Note 12 to the consolidated financial statements.

During fiscal 2021, we refunded $29.4 million in excess deferred taxes in the distribution segment, which reduced operating income year over year and reduced the annual effective income tax rate for this segment to 20.6% compared with 21.6% in the prior year.

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| | | | For the Fiscal Year Ended September 30 | | | | | | | | | | | | | | | | | | | | | | | | | | |

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Additionally, 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.

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We continue to execute our strategy well while managing the ongoing impacts of the Coronavirus Disease 2019 (COVID-19) pandemic.

Approximately 95 percent of our employees continue to work remotely as we provide essential services to ensure the safety and functionality of our critical infrastructure while taking precautions to provide a safe work environment for employees and customers.

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We did not experience a material change in year-over-year residential revenue in our distribution segment due to COVID-19; however, we did experience a 10

percent year-over-year decline in nonresidential revenue, including service and other revenues, primarily during the third and fourth fiscal quarter.

The decline is partially offset by a reduction in certain operating and maintenance expenses.

During fiscal 2020, we completed over $1.6 billion of long-term debt and equity financing.

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| (1) | In accordance with our adoption of new accounting standards, changes in comprehensive income statement presentation were implemented on a retrospective basis and impacted previously issued financial statements for fiscal 2018. |

| • | a $11.7 million decrease in operating expense in response to COVID-19: |

| ◦ | $8.1 million associated with travel and entertainment and training. |

| ◦ | $3.6 million associated with lower overtime/standby costs and benefit costs. |

| • | a $18.4 million decrease attributable to COVID-19: |

| ◦ | $5.9 million decrease in net consumption and transportation during the third and fourth fiscal quarter, primarily due to a 13 percent decrease in commercial volumes. |

| • | a $4.5 million increase in information technology spending to support the modernization of our systems. |

On May 20, 2020, the RRC approved the Company's GRIP filing.

The year-over-year change in other non-operating income and interest charges of $5.6 million reflects increased AFUDC primarily due to increased capital spending, partially offset by an increase in interest expense due to the issuance of long-term debt during fiscal 2020.

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The year-over-year increase in operating cash flows reflects positive cash effects of rate case outcomes achieved in fiscal 2019 and working capital changes, primarily as a result of the timing of gas cost recoveries under our purchase gas cost mechanisms.

We allocate our capital spending among our service areas using risk management models and subject matter experts to identify, assess and develop a plan of action to address our highest risk facilities.

We have regulatory mechanisms in most of our service areas that provide the opportunity to include approved capital costs in rate base on a periodic basis without being required to file a rate case.

These mechanisms permit us a reasonable opportunity to earn a fair return on our investment without compromising safety or reliability.

A portion of the net proceeds was used to repay at maturity our $450 million 8.50% unsecured senior notes and the related settlement of our interest rate swaps for $90.1 million, to repay at maturity our $125 million floating rate term loan, to reduce short-term debt, to support our capital spending and for other general corporate purposes.

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On December 16, 2019, Moody's upgraded our senior unsecured long-term debt rating to A1 and changed their outlook to stable, citing our strong credit metrics as a result of continued improvement in rate design to minimize regulatory lag and our balanced fiscal policy.

| Outlook | | Stable | | | | Stable | | |

| Interest charges(2) | 3,925,475 | | | | 194,092 | | | | 381,386 | | | | 378,984 | | | | 2,971,013 | | |

| Finance leases(3) | 16,477 | | | | 741 | | | | 1,513 | | | | 1,557 | | | | 12,666 | | |

| Operating leases(4) | 278,181 | | | | 40,049 | | | | 70,176 | | | | 41,573 | | | | 126,383 | | |

| Pension and postretirement benefit plan contributions(6) | 423,505 | | | | 60,553 | | | | 133,694 | | | | 85,792 | | | | 143,466 | | |

| Total contractual obligations | $ | 9,236,574 | | | $ | 297,450 | | | $ | 817,690 | | | $ | 517,906 | | | $ | 7,603,528 | |

Our risk management activities and related accounting treatment are described in further detail in Note [removed: 14] [added: 15] to the consolidated financial statements.

Had interest rates associated with our short-term borrowings increased by an average of one percent, our interest expense would not have materially increased during [removed: 2020.][added: 2021.]

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| | | | | | |

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

| | |

| --- | --- |

[removed: | • |] [added: -] operating our business exceptionally well [removed: |]

Since 2011, our operating strategy has focused on modernizing our distribution and transmission system [removed: to improve safety and reliability.][added: while reducing regulatory lag.]

As of September 30, [removed: 2020,] [added: 2021,] we manage and review our consolidated operations through the following reportable segments:

[removed: | • |] [added: -] The *distribution segment* is primarily comprised of our regulated natural gas distribution and related sales operations in eight states. [removed: |]

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

| Division | | [added: | | | |] Service Areas | | [added: | | | |] Communities Served | | [added: | | | |] Customer Meters | [added: | |]

| Mid-Tex | | [added: | | | |] Texas, including the Dallas/Fort Worth Metroplex | | [added: | | | |] 550 | | [removed: 1,751,898] | [added: | | | 1,791,482 | | |]

| Kentucky/Mid-States | | [added: | | | |] Kentucky | | [added: | | | |] 230 | | [removed: 182,639] | [added: | | | 183,937 | | |]

| West Texas | | [added: | | | |] Amarillo, Lubbock, Midland | | [added: | | | |] 80 | | [removed: 320,085] | [added: | | | 326,419 | | |]

| Colorado-Kansas | | [added: | | | |] Colorado | | [added: | | | |] 170 | | [removed: 123,423] | [added: | | | 125,241 | | |]

At September 30, [removed: 2020,] [added: 2021,] we held [removed: 1,023] [added: 1,025] franchises having terms generally ranging from five to 35 years.

[removed: A] significant number of our franchises expire each year, which require renewal prior to the end of their terms.

Purchased gas cost adjustment mechanisms represent a [added: traditional and] common form of cost adjustment mechanism.

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

Supply arrangements consist of both base load and [removed: swing supply (peaking)] [added: peaking] quantities and are contracted from our suppliers on a firm basis with various terms at market prices.

Base load quantities are those that flow at a constant level throughout the month and [removed: swing supply] [added: peaking] quantities provide the flexibility to change daily quantities to match increases or decreases in requirements related to weather conditions.

Except for local production purchases, we select our natural gas suppliers through a competitive bidding process by periodically requesting proposals from [removed: suppliers that have demonstrated that they can provide reliable service.][added: suppliers.]

We select these suppliers based on their ability to [added: reliably] deliver gas supply to our designated firm pipeline receipt points at the lowest reasonable cost.

Major suppliers during fiscal [removed: 2020] [added: 2021] were Castleton Commodities Merchant Trading L.P., [removed: CenterPoint] [added: Cima Energy, LP, Concord] Energy [removed: Services, Inc., ConocoPhillips Company, Devon Gas Services, L.P.,] [added: LLC,] EnLink Gas Marketing LP, [added: ETC Gas Marketing LTD,] Hartree Partners, L.P., [added: Kinder Morgan Texas Pipeline LLC,] Symmetry Energy Solutions, LLC, Targa Gas Marketing [removed: LLC, Texla Energy Management, Inc.] [added: LLC] and Twin Eagle Resources Management, LLC.

The combination of base [removed: load, peaking] [added: load] and [removed: spot purchase] [added: peaking] agreements, coupled with the withdrawal of gas held in storage, allows us the flexibility to adjust to changes in weather, which minimizes our need to enter into long-term firm commitments.

The peak-day demand for our distribution operations in fiscal [removed: 2020] [added: 2021] was on [removed: November 12, 2019,] [added: February 14, 2021,] when sales to customers reached approximately [removed: 2.7] [added: 4.3] Bcf.

Currently, our distribution divisions utilize [removed: 37] [added: 35] pipeline transportation companies, both interstate and intrastate, to transport our natural gas.

To maintain our deliveries to high priority customers, we have the ability, and have exercised our right, to [added: interrupt or] curtail [removed: deliveries] [added: service] to certain customers [removed: under the terms of interruptible] [added: pursuant to] contracts [removed: or] [added: and] applicable state regulations or statutes.

[removed: Curtailment] [added: Interruption and curtailment] rights provide us the flexibility to meet the human-needs requirements of our customers on a [removed: firm] [added: reliable] basis.

Priority allocations imposed by federal and state regulatory agencies, as well as other factors beyond our control, may affect our ability to meet the demands of [added: some of] our customers.

APT is one of the largest intrastate pipeline operations in Texas with a heavy concentration in the established natural gas-producing areas of central, northern and eastern Texas, extending into or near the major producing areas [added: of the Barnett Shale, the Texas Gulf Coast and the Permian Basin of West Texas.]

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

[removed: | • |] [added: -] Formula rate mechanisms in place in four states that provide for an annual rate review and adjustment to rates. [removed: |]

[removed: | • | Infrastructure programs in place in all 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 approximately 90 percent of our capital expenditures within six months and substantially all of our capital expenditures within twelve months. [removed: |]

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

[removed: | • |] [added: -] WNA mechanisms in seven states that serve to minimize the effects of weather on approximately [removed: 97] [added: 96] percent of our distribution residential and commercial revenues. [removed: |]

[removed: | • |] [added: -] The ability to recover the gas cost portion of bad debts in five states. [removed: |]

The following table provides a jurisdictional rate summary for our regulated operations as of September 30, [removed: 2020.][added: 2021.]

| Division | | [added: | | | |] Jurisdiction | | [removed: Effective Date] [added: | | | | Effective Date] of [removed: Last Rate/GRIP] [added: Last Rate/GRIP] Action | | [added: | | | |] Rate Base (thousands)(1) | | [added: | | | |] Authorized Rate of Return(1) | | [added: | | | |] Authorized Debt/ Equity Ratio(1) | [added: | |] Authorized Return on Equity(1) | [added: | |]

| Atmos Pipeline — Texas | | [added: | | | |] Texas | | [removed: 05/20/2020] | | [removed: $2,698,343] | | [added: 05/11/2021 | | | | | | $2,924,585 | | | | | |] 8.87% | | [added: | | | |] 47/53 | [added: | |] 11.50% | [added: | |]

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

| | | [added: | | | |] Colorado SSIR | | [removed: 01/01/2020] | | [removed: 56,507] | | [added: 01/01/2021 | | | | | | 78,265 | | | | | |] 7.55% | | [added: | | | |] 44/56 | [added: | |] 9.45% | [added: | |]

| | | [added: | | | |] Kansas | | [added: | | | |] 04/01/2020 | | [added: | | | |] 242,314 | | [added: | | | |] 7.03% | | [added: | | | |] 44/56 | [added: | |] 9.10% | [added: | |]

| [added: Colorado-Kansas] | | [added: | | | |] Kansas GSRS | | [removed: 05/01/2019] | | [removed: 26,322] | | [removed: (4)] [added: 12/2018] | | [removed: (4)] | [removed: (4)] | [added: | | 1,562 | | | | | | 05/01/2019 | | |]

| Kentucky/Mid-States | | [added: | | | |] Kentucky | | [added: | | | |] 05/08/2019 | | [added: | | | |] 424,929 | | [added: | | | |] 7.49% | | [added: | | | |] 42/58 | [added: | |] 9.65% | [added: | |]

- investing in safety, innovation and environmental sustainability, and

- achieving superior financial results.

This operating strategy has allowed us to increase our capital expenditures approximately 13 percent per year to improve safety and reliability and to reduce methane emissions from our system.

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

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

| | | | | | | Tennessee | | | | | | | | | | | | 159,461 | | |

| | | | | | | Virginia | | | | | | | | | | | | 24,746 | | |

| Louisiana | | | | | | Louisiana | | | | | | 270 | | | | | | 373,207 | | |

| Mississippi | | | | | | Mississippi | | | | | | 110 | | | | | | 272,993 | | |

| | | | | | | Kansas | | | | | | | | | | | | 139,763 | | |

Table of Contents

The gas is delivered into our systems by various pipeline companies, withdrawals of gas from proprietary and contracted storage assets and base load and peaking arrangements, as needed.

Table of Contents

electric generation customers, marketers and producers.

- Infrastructure programs in place in all of our states that provide for an annual adjustment to rates for qualifying capital expenditures.

Table of Contents

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

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

| | | | | | | Kansas GSRS | | | | | | 02/01/2021 | | | | | | 16,917 | | | | | | 7.03% | | | | | | 44/56 | | | 9.10% | | |

| | | | | | | Tennessee | | | | | | 06/01/2021 | | | | | | 421,189 | | | | | | 7.62% | | | | | | 40/60 | | | 9.80% | | |

| Louisiana | | | | | | Louisiana | | | | | | 07/01/2021 | | | | | | 837,325 | | | | | | 7.30% | | | | | | (4) | | | (4) | | |

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

| Mid-Tex | | | | | | Mid-Tex Cities(6) | | | | | | 12/01/2020 | | | | | | 3,726,295(5) | | | | | | 7.53% | | | | | | 42/58 | | | 9.80% | | |

| | | | | | | Dallas | | | | | | 06/09/2021 | | | | | | 4,293,195(5) | | | | | | 7.57% | | | | | | 41/59 | | | 9.80% | | |

| Mississippi | | | | | | Mississippi(7) | | | | | | 11/01/2020 | | | | | | 474,216 | | | | | | 7.81% | | | | | | (4) | | | (4) | | |

| | | | | | | Mississippi - SIR(7) | | | | | | 11/01/2020 | | | | | | 247,414 | | | | | | 7.81% | | | | | | (4) | | | (4) | | |

| West Texas | | | | | | West Texas Cities(8) (10) | | | | | | 12/01/2020 | | | | | | 660,893(9) | | | | | | 7.53% | | | | | | 42/58 | | | 9.80% | | |

| | | | | | | West Texas - ALDC | | | | | | 06/01/2021 | | | | | | 751,829(9) | | | | | | 7.35% | | | | | | (4) | | | (4) | | |

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

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

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Table of Contents

These rate bases, rates of return, debt/equity ratios and returns on equity are not necessarily indicative of current or future rate bases, rates of return or returns on equity.

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

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

Additionally, the ratemaking outcomes for the rate activity in fiscal 2021 include the refund of excess deferred income taxes 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 fiscal 2021 rate outcomes for ratemaking activities were $226.2 million.

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

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

| Kentucky/Mid-States | | | | | | Rate Case | | | | | | Kentucky (2) | | | | | | 14,394 | | |

| | |

| --- | --- |

| • | investing in our people and infrastructure |

| • | enhancing our culture. |

This operating strategy also allows us to reduce methane emissions from our system.

Since that time, our capital expenditures have increased approximately 14 percent annually.

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

| | | | | | | |

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

| | | Tennessee | | | | 156,820 |

| | | Virginia | | | | 24,493 |

| Louisiana | | Louisiana | | 270 | | 368,332 |

| Mississippi | | Mississippi | | 110 | | 267,482 |

| | | Kansas | | | | 138,009 |

We do not anticipate any problems with obtaining additional gas supply as needed for our customers.

of the Barnett Shale, the Texas Gulf Coast and the Permian Basin of West Texas.

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

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

| | | Tennessee | | 06/01/2019 | | 389,061 | | 7.79% | | 42/58 | 9.80% |

| Louisiana | | Louisiana | | 07/01/2020 | | 747,021 | | 7.57% | | 42/58 | 9.80% |

| Mid-Tex | | Mid-Tex Cities(6) | | 10/01/2019 | | 3,052,562(5) | | 7.83% | | 42/58 | 9.80% |

| | | Dallas | | 09/01/2020 | | 3,510,508(5) | | 7.83% | | 40/60 | 9.80% |

| Mississippi | | Mississippi(7) | | 11/01/2019 | | 448,533 | | 7.81% | | (4) | (4) |

| | | Mississippi - SIR(7) | | 11/01/2019 | | 185,844 | | 7.81% | | (4) | (4) |

| West Texas | | West Texas Cities(8) (10) | | 10/01/2019 | | 591,513(9) | | 7.83% | | 42/58 | 9.80% |

| | | West Texas - ALDC | | 04/28/2020 | | 671,738(9) | | 8.57% | | 48/52 | 10.50% |

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

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

| | | | | | | | | |

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

| | | | | | | $ | 131,887 | |

| (2) | On September 30, 2020, the Kentucky Public Service Commission approved a rate increase of $1.6 million effective October 1, 2020. |

| (3) | The Mid-Tex Cities approved a rate increase of $82.6 million with new rates to be implemented on December 1, 2020. |

(4) The Mississippi Public Service Commission approved an increase in operating income of $10.6 million for the SIR filing and $5.9 million for the SRF filing.

| (5) | The West Texas Cities approved a rate increase of $5.6 million with new rates to be implemented on December 1, 2020. |

| | | | | |

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

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

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

| West Texas | | Amarillo, Lubbock, Dalhart and Channing | | 12/2018 | | 5,692 | | | | 05/01/2019 |

See Note [removed: 12] [added: 13] to the consolidated financial statements, which is incorporated in this Item 3 by reference.

| | | | | | |

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

| | |

| --- | --- |

[removed: Form 10-K][added: Form 10-K]

[removed: ☑ANNUAL] [added: ☑ ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, [removed: 2020][added: 2021]

[removed: ☐TRANSITION] [added: ☐ TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file [removed: number 1-10042][added: number 1-10042]

Atmos Energy [removed: Corporation][added: Corporation]

[removed: Texas and Virginia 75-1743247][added: Texas and Virginia 75-1743247]

[removed: Dallas, Texas 75240][added: Dallas, Texas 75240]

[removed: (972) 934-9227][added: (972) 934-9227]

| Table of each class | | [added: | | | |] Trading Symbol | [added: | |] Name of each exchange on which registered | [added: | |]

| Common stock | [added: | |] No Par Value | [added: | |] ATO | [added: | |] New York Stock Exchange | [added: | |]

| Large accelerated filer | [added: | |] ☑ | [added: | |] Accelerated filer | [added: | |] ☐ | [added: | |] Non-accelerated filer | [added: | |] ☐ | [added: | |] Smaller reporting company | [added: | |] ☐ | [added: | |] Emerging growth company | [added: | |] ☐ | [added: | |]

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: 2020,] [added: 2021,] was [removed: $11,938,304,144.][added: $12,737,499,573.]

As of November [removed: 6, 2020,] [added: 5, 2021,] the registrant had [removed: 125,889,456] [added: 132,425,817] 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: 3, 2021] [added: 9, 2022] are incorporated by reference into Part III of this report.

| | | [added: | | | |] Page | [added: | |]

| [removed: [Glossary] [added: [Glossary] of Key [removed: Terms](#s68A7E5474EDD53D0A29C1A80D30AB823)] [added: Terms](#i6630617b9bc44580898f2a211346a55c_10)] | | [removed: [3](#s68A7E5474EDD53D0A29C1A80D30AB823)] | [added: | | | [3](#i6630617b9bc44580898f2a211346a55c_10) | | |]

| | [added: | |] Part I | | [added: | | | |]

| Item 1. | [removed: [Business](#sBC2ABCEA73FD5486BA337D43F29F25AE)] | [removed: [4](#sBC2ABCEA73FD5486BA337D43F29F25AE)] | [added: [Business](#i6630617b9bc44580898f2a211346a55c_16) | | | [4](#i6630617b9bc44580898f2a211346a55c_16) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#sD4C13C1B3EEB5F9190535ED5E51DAC82)] [added: Factors](#i6630617b9bc44580898f2a211346a55c_19)] | [removed: [13](#sD4C13C1B3EEB5F9190535ED5E51DAC82)] | [added: | [14](#i6630617b9bc44580898f2a211346a55c_19) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#sB02E62D577FE56308C20F399C8E4F6A9)] [added: Comments](#i6630617b9bc44580898f2a211346a55c_22)] | [removed: [19](#sB02E62D577FE56308C20F399C8E4F6A9)] | [added: | [18](#i6630617b9bc44580898f2a211346a55c_22) | | |]

| Item 2. | [removed: [Properties](#s58FB28FC5EBF5714A0BFC14AD874DD67)] | [removed: [19](#s58FB28FC5EBF5714A0BFC14AD874DD67)] | [added: [Properties](#i6630617b9bc44580898f2a211346a55c_25) | | | [18](#i6630617b9bc44580898f2a211346a55c_25) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#s8880BAC386F9553E8F6087E0A76371CC)] [added: Proceedings](#i6630617b9bc44580898f2a211346a55c_28)] | [removed: [20](#s8880BAC386F9553E8F6087E0A76371CC)] | [added: | [19](#i6630617b9bc44580898f2a211346a55c_28) | | |]

| Item 4. | [added: | |] Mine Safety Disclosures | [removed: [20](#s835CD99BE8D752DAAAFBA2F052DEBF67)] | [added: | [19](#i6630617b9bc44580898f2a211346a55c_31) | | |]

| | [added: | |] Part II | | [added: | | | |]

| Item 5. | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sEF77355624DB5473BAEABFF1FFCBE86C)] [added: Securities](#i6630617b9bc44580898f2a211346a55c_37)] | [removed: [20](#sEF77355624DB5473BAEABFF1FFCBE86C)] | [added: | [20](#i6630617b9bc44580898f2a211346a55c_37) | | |]

| Item 6. | [added: | |] [Selected Financial [removed: Data](#s5229267E70725ED387FA4091596BC2BA)] [added: Data](#i6630617b9bc44580898f2a211346a55c_40)] | [removed: [22](#s5229267E70725ED387FA4091596BC2BA)] | [added: | [21](#i6630617b9bc44580898f2a211346a55c_40) | | |]

| Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s73D0855ECD8458D08F2F2217763DDADD)] [added: Operations](#i6630617b9bc44580898f2a211346a55c_73)] | [removed: [23](#sF1E86D9812F9560EBC14617E02D1844A)] | [added: | [21](#i6630617b9bc44580898f2a211346a55c_43) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s20F95B4C3B6D5C54845579FE6885A772)] [added: Risk](#i6630617b9bc44580898f2a211346a55c_76)] | [removed: [34](#s20F95B4C3B6D5C54845579FE6885A772)] | [added: | [34](#i6630617b9bc44580898f2a211346a55c_76) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#sFB0DA4C3C29C5C59B2B09678D8D90297)] [added: Data](#i6630617b9bc44580898f2a211346a55c_79)] | [removed: [36](#sFB0DA4C3C29C5C59B2B09678D8D90297)] | [added: | [35](#i6630617b9bc44580898f2a211346a55c_79) | | |]

| Item 9. | [added: | |] [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#s033E99B4F0B55B729ACD8201D13E0D97)] [added: Disclosure](#i6630617b9bc44580898f2a211346a55c_187)] | [removed: [84](#s033E99B4F0B55B729ACD8201D13E0D97)] | [added: | [85](#i6630617b9bc44580898f2a211346a55c_187) | | |]

| Item 9A. | [added: | |] [Controls and [removed: Procedures](#sC7892CCCC9E15E7B9230AF39764E21DD)] [added: Procedures](#i6630617b9bc44580898f2a211346a55c_190)] | [removed: [84](#sC7892CCCC9E15E7B9230AF39764E21DD)] | [added: | [85](#i6630617b9bc44580898f2a211346a55c_190) | | |]

| Item 9B. | [added: | |] [Other [removed: Information](#sE7727D52054F5843BF4A0F4E2EE2284F)] [added: Information](#i6630617b9bc44580898f2a211346a55c_193)] | [removed: [86](#sE7727D52054F5843BF4A0F4E2EE2284F)] | [added: | [87](#i6630617b9bc44580898f2a211346a55c_193) | | |]

| | [added: | |] Part III | | [added: | | | |]

| Item 10. | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s82567F0EB58F5AA8B35E6B3EB99671CC)] [added: Governance](#i6630617b9bc44580898f2a211346a55c_199)] | [removed: [86](#s82567F0EB58F5AA8B35E6B3EB99671CC)] | [added: | [87](#i6630617b9bc44580898f2a211346a55c_199) | | |]

| Item 11. | [added: | |] [Executive [removed: Compensation](#sBE968D2E23925396B4E717D7546CD0FF)] [added: Compensation](#i6630617b9bc44580898f2a211346a55c_202)] | [removed: [87](#sBE968D2E23925396B4E717D7546CD0FF)] | [added: | [88](#i6630617b9bc44580898f2a211346a55c_202) | | |]

| Item 12. | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s3A7FC308F8B15DF1AF245D3564DDEAB2)] [added: Matters](#i6630617b9bc44580898f2a211346a55c_205)] | [removed: [87](#s3A7FC308F8B15DF1AF245D3564DDEAB2)] | [added: | [88](#i6630617b9bc44580898f2a211346a55c_205) | | |]

| Item 13. | [added: | |] [Certain Relationships and Related Transactions, and Director [removed: Independence](#s4E3C3BC9400E53F48F6C5A51C952638B)] [added: Independence](#i6630617b9bc44580898f2a211346a55c_208)] | [removed: [87](#s4E3C3BC9400E53F48F6C5A51C952638B)] | [added: | [88](#i6630617b9bc44580898f2a211346a55c_208) | | |]

| Item 14. | [added: | |] [Principal Accountant Fees and [removed: Services](#sD04386731D695617B159AD98BE3B5790)] [added: Services](#i6630617b9bc44580898f2a211346a55c_211)] | [removed: [87](#sD04386731D695617B159AD98BE3B5790)] | [added: | [88](#i6630617b9bc44580898f2a211346a55c_211) | | |]

| | [added: | |] Part IV | | [added: | | | |]

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| NGPA | | | Natural Gas Policy Act of 1978 | | |

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| NGA | Natural Gas Act of 1938 |

| SGR | Supplemental Growth Rider |

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At September 30, [removed: 2020,] [added: 2021,] in our distribution segment, we owned an aggregate of [removed: 71,558] [added: 71,921] miles of underground distribution and transmission mains throughout our distribution systems.

Through our pipeline and storage segment we also owned [removed: 5,684] [added: 5,699] miles of gas transmission lines.

The following table summarizes certain information regarding our underground gas storage facilities at September 30, [removed: 2020:][added: 2021:]

| State | | [added: | | | |] Usable [removed: Capacity (Mcf)] [added: Capacity (Mcf)] | | | [added: | | |] Cushion Gas (Mcf)(1) | | | [removed: Total Capacity (Mcf)] | | | [removed: Maximum Daily Delivery Capability (Mcf)] [added: Total Capacity (Mcf)] | | [added: | | | | Maximum Daily Delivery Capability (Mcf) | | |]

| *Distribution Segment* | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| Kentucky | | [added: | | | |] 7,956,991 | | | [added: | | |] 9,562,283 | | | [added: | | |] 17,519,274 | | | [removed: 158,100] | | [added: | 146,660 | | |]

| Kansas | | [added: | | | |] 3,239,000 | | | [added: | | |] 2,300,000 | | | [added: | | |] 5,539,000 | | | [removed: 45,000] | | [added: | 32,000 | | |]

| Mississippi | | [added: | | | |] 1,907,571 | | | [added: | | |] 2,442,917 | | | [added: | | |] 4,350,488 | | | [removed: 31,000] | | [added: | 29,136 | | |]

| *Total* | | [added: | | | |] 13,103,562 | | | [added: | | |] 14,305,200 | | | [added: | | |] 27,408,762 | | | [removed: 234,100] | | [added: | 207,796 | | |]

| *Pipeline and Storage Segment* | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

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

| Louisiana | | [added: | | | |] 411,040 | | | [added: | | |] 256,900 | | | [added: | | |] 667,940 | | | [added: | | |] 56,000 | | [added: |]

| *Total* | | [added: | | | |] 46,494,589 | | | [added: | | |] 16,134,925 | | | [added: | | |] 62,629,514 | | | [added: | | |] 1,766,000 | | [added: |]

| Total | | [added: | | | |] 59,598,151 | | | [added: | | |] 30,440,125 | | | [added: | | |] 90,038,276 | | | [removed: 2,000,100] | | [added: | 1,973,796 | | |]

[removed: | (1) | Cushion] [added: (1)Cushion] gas represents the volume of gas that must be retained in a facility to maintain reservoir pressure. [removed: |]

The following table summarizes our contracted storage capacity at September 30, [removed: 2020:][added: 2021:]

| Segment | | [added: | | | |] Division/Company | | [removed: Maximum Storage Quantity (MMBtu)] | | | [added: | Maximum Storage Quantity (MMBtu) | | | | | |] Maximum Daily Withdrawal Quantity (MDWQ)(1) | | [added: |]

| *Distribution Segment* | | | | | | | | | [added: | | | | | | | | | | | |]

| | | [added: | | | |] Colorado-Kansas Division | | [added: | | | |] 6,343,728 | | | [added: | | |] 147,965 | | [added: |]

| | | [added: | | | |] Kentucky/Mid-States Division | | [added: | | | |] 8,175,103 | | | [added: | | |] 226,320 | | [added: |]

| | | [added: | | | |] Louisiana Division | | [added: | | | |] 2,594,875 | | | [added: | | |] 177,765 | | [added: |]

| | | [added: | | | |] Mid-Tex Division | | [removed: 4,000,000] | | | [removed: 150,000] | [added: 5,000,000] | [added: | | | | | 190,000 | | |]

| | | [added: | | | |] Mississippi Division | | [added: | | | |] 5,099,536 | | | [added: | | |] 164,764 | | [added: |]

| | | [added: | | | |] West Texas Division | | [added: | | | |] 5,500,000 | | | [added: | | |] 176,000 | | [added: |]

| *Total* | | | | [removed: 31,713,242] | | | [removed: 1,042,814] | | [added: | | | 32,713,242 | | | | | | 1,082,814 | | |]

| *Pipeline and Storage Segment* | | | | | | | | | [added: | | | | | | | | | | | |]

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

| Total Contracted Storage Capacity | | | | [removed: 32,713,242] | | | [removed: 1,090,314] | | [added: | | | 33,713,242 | | | | | | 1,130,314 | | |]

[removed: | (1) | Maximum] [added: (1)Maximum] daily withdrawal quantity (MDWQ) amounts will fluctuate depending upon the season and the month. [removed: Unless otherwise noted, MDWQ amounts represent the MDWQ amounts as of November 1, which is the beginning of the winter heating season. |]

Table of Contents

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Unless otherwise noted, MDWQ amounts represent the MDWQ amounts as of November 1, which is the beginning of the winter heating season.

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Table of Contents

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Our stock trades on the New York Stock Exchange under the trading symbol “ATO.” The dividends paid per share of our common stock for fiscal [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] are listed below.

| | | [added: | | | |] Fiscal [removed: 2020] [added: 2021] | | | | [added: | |] Fiscal [removed: 2019] [added: 2020] | | |

| Quarter ended: | | | | | | | | | [added: | | | | | |]

| December 31 | | [added: | | | |] $ | [removed: 0.575] [added: 0.625] | | | [added: | |] $ | [removed: 0.525] [added: 0.575] | |

| March 31 | | [removed: 0.575] | | | | [removed: 0.525] [added: 0.625] | | | [added: | | | 0.575 | | |]

| June 30 | | [removed: 0.575] | | | | [removed: 0.525] [added: 0.625] | | | [added: | | | 0.575 | | |]

| September 30 | | [removed: 0.575] | | | | [removed: 0.525] [added: 0.625] | | | [added: | | | 0.575 | | |]

As of October 31, [removed: 2020,] [added: 2021,] there were [removed: 11,199] [added: 10,590] holders of record of our common stock.

We sold no securities during fiscal [removed: 2020] [added: 2021] 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 (S&P [removed: 500),] [added: 500) and] the total return of the S&P 500 Utilities Industry [removed: Index and the cumulative total return of the customized peer company group described in Part II, Item 5 of our Annual Report on Form 10-K for fiscal 2019, referred to herein as the Old Comparison Company] Index.

The graph and table below assume that $100.00 was invested on September 30, [removed: 2015] [added: 2016] in our common stock, the S&P [removed: 500,] [added: 500 and] the S&P 500 Utilities Industry Index [removed: and in the common stock of the companies in the Old Comparison Company Index,] [added: ax,] as well as a reinvestment of dividends paid on such investments throughout the period.

among Atmos Energy Corporation, S&P 500 [removed: Index,][added: Index and]

S&P 500 Utilities Industry [removed: Index and Old Comparison Company] Index

[removed: ][added: ]

| | [added: | |] Cumulative Total Return | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| | [removed: 9/30/2015] | | [removed: |] 9/30/2016 | | | [added: | | |] 9/30/2017 | | | [added: | | |] 9/30/2018 | | | [added: | | |] 9/30/2019 | | | [added: | | |] 9/30/2020 | | [added: | | | | 9/30/2021 | | |]

The following table sets forth the number of securities authorized for issuance under our equity compensation plans at September 30, [removed: 2020.][added: 2021.]

| | [added: | |] Number [removed: of securities] [added: of securities] to be [removed: issued upon] [added: issued upon] exercise [removed: of outstanding] [added: of outstanding] options, warrants and rights | | | [removed: Weighted-average exercise] [added: | | | Weighted-average exercise] price [removed: of outstanding options, warrants] [added: of outstanding options, warrants] and rights | | | | [added: | |] Number of securities [removed: remaining available] [added: remaining available] for future [removed: issuance under] [added: issuance under] equity [removed: compensation plans] [added: compensation plans] (excluding [removed: securities reflected] [added: securities reflected] in column (a)) | | [added: |]

| Equity compensation plans approved by security holders: | | | | | | | | | | [added: | | | | | | | |]

| [removed: Total equity] [added: Equity] compensation plans [added: not] approved by security holders | [removed: 952,586] | | [added: —] | [added: | | | | |] — | | | | [removed: 1,288,782] | | [added: — | | |]

| [removed: Equity] [added: Total equity] compensation plans [removed: not] approved by security holders | [removed: —] | | [added: 944,962] | [removed: —] | | | | [added: |] — | | [added: | | | | 1,054,190 | | |]

[removed: | (1) | Comprised] [added: (1)Comprised] of a total of [removed: 355,481] [added: 328,369] time-lapse restricted stock units, [removed: 361,039] [added: 377,385] director share units and [removed: 236,066] [added: 239,208] performance-based restricted stock units at the target level of performance granted under our 1998 Long-Term Incentive Plan. [removed: |]

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| | | | | | | $ | 2.50 | | | | | $ | 2.30 | |

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| Atmos Energy Corporation | | | 100.00 | | | | | | 115.17 | | | | | | 131.91 | | | | | | 163.30 | | | | | | 140.06 | | | | | | 132.61 | | |

| S&P 500 Stock Index | | | 100.00 | | | | | | 118.61 | | | | | | 139.85 | | | | | | 145.80 | | | | | | 167.89 | | | | | | 218.27 | | |

| S&P 500 Utilities Stock Index | | | 100.00 | | | | | | 112.03 | | | | | | 115.31 | | | | | | 146.56 | | | | | | 139.28 | | | | | | 154.61 | | |

| | | | (a) | | | | | | (b) | | | | | | (c) | | |

| 1998 Long-Term Incentive Plan | | | 944,962 | | | (1) | | | $ | — | | | | | 1,054,190 | | |

| Total | | | 944,962 | | | | | | $ | — | | | | | 1,054,190 | | |

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| | | $ | 2.30 | | | $ | 2.10 | |

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

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| Atmos Energy Corporation | 100.00 | | | 131.10 | | | 151.00 | | | 172.94 | | | 214.09 | | | 183.63 | |

| S&P 500 Stock Index | 100.00 | | | 115.43 | | | 136.91 | | | 161.43 | | | 168.30 | | | 193.80 | |

| S&P 500 Utilities Stock Index | 100.00 | | | 117.37 | | | 131.49 | | | 135.34 | | | 172.02 | | | 163.47 | |

| Old Comparison Company Index(1) | 100.00 | | | 123.44 | | | 143.69 | | | 152.10 | | | 198.43 | | | 188.11 | |

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| (1) | The Old Comparison Company Index reflects the cumulative total return of the group of utility companies described in Part II, Item 5 of our Annual Report on Form 10-K for fiscal 2019, except that Vectren Corporation has since been acquired, and as a result, its cumulative total return is not included in the graph. |

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| | (a) | | | (b) | | | | (c) | |

| 1998 Long-Term Incentive Plan | 952,586 | | (1) | $ | — | | | 1,288,782 | |

| Total | 952,586 | | | $ | — | | | 1,288,782 | |

No disclosure required by Regulation S-K.

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The following table sets forth selected financial data of the Company and should be read in conjunction with the consolidated financial statements included herein.

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| | Fiscal Year Ended September 30 | | | | | | | | | | | | | | | | | | |

| | 2020 | | | | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | |

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

| Results of Operations | | | | | | | | | | | | | | | | | | | |

| Operating revenues | $ | 2,821,137 | | | $ | 2,901,848 | | | $ | 3,115,546 | | | $ | 2,759,735 | | | $ | 2,454,648 | |

| Operating income(1) | $ | 824,099 | | | $ | 746,058 | | | $ | 727,934 | | | $ | 735,628 | | | $ | 665,368 | |

| Income from continuing operations | $ | 601,443 | | | $ | 511,406 | | | $ | 603,064 | | | $ | 382,711 | | | $ | 345,542 | |

| Net income | $ | 601,443 | | | $ | 511,406 | | | $ | 603,064 | | | $ | 396,421 | | | $ | 350,104 | |

| Diluted income per share from continuing operations | $ | 4.89 | | | $ | 4.35 | | | $ | 5.43 | | | $ | 3.60 | | | $ | 3.33 | |

| Diluted net income per share | $ | 4.89 | | | $ | 4.35 | | | $ | 5.43 | | | $ | 3.73 | | | $ | 3.38 | |

| Cash dividends declared per share | $ | 2.30 | | | $ | 2.10 | | | $ | 1.94 | | | $ | 1.80 | | | $ | 1.68 | |

| Financial Condition | | | | | | | | | | | | | | | | | | | |

| Net property, plant and equipment(2) | $ | 13,355,347 | | | $ | 11,787,669 | | | $ | 10,371,147 | | | $ | 9,259,182 | | | $ | 8,268,606 | |

| Total assets | $ | 15,359,032 | | | $ | 13,367,619 | | | $ | 11,874,437 | | | $ | 10,749,596 | | | $ | 10,010,889 | |

| Capitalization: | | | | | | | | | | | | | | | | | | | |

| Shareholders’ equity | $ | 6,791,203 | | | $ | 5,750,223 | | | $ | 4,769,951 | | | $ | 3,898,666 | | | $ | 3,463,059 | |

| Long-term debt (excluding current maturities) | 4,531,779 | | | | 3,529,452 | | | | 2,493,665 | | | | 3,067,045 | | | | 2,188,779 | | |

| Total capitalization | $ | 11,322,982 | | | $ | 9,279,675 | | | $ | 7,263,616 | | | $ | 6,965,711 | | | $ | 5,651,838 | |

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| (1) | In accordance with our adoption of new accounting standards, changes in comprehensive income statement presentation were implemented on a retrospective basis and impacted previously issued financial statements for the fiscal years ended 2016 through 2018. |

| (2) | Amounts shown are net of assets held for sale related to the divestiture of our natural gas marketing business for fiscal year 2016. |

Index to financial statements and financial statement [removed: schedule:][added: schedules:]

| | [added: | |] Page | [added: | |]

| [Report of independent registered public accounting [removed: firm](#s53B209D0B2775A62A227B53D55EC2F49)] [added: firm](#i6630617b9bc44580898f2a211346a55c_82)] | [removed: [37](#s53B209D0B2775A62A227B53D55EC2F49)] | [added: | [36](#i6630617b9bc44580898f2a211346a55c_82) | | |]

| Financial statements and supplementary data: | | [added: | | | |]

| [Consolidated balance sheets at September 30, [removed: 2020] [added: 2021] and [removed: 2019](#sF952EEE30B0C5E8A8A79B4699829A3FA)] [added: 2020](#i6630617b9bc44580898f2a211346a55c_85)] | [removed: [39](#sF952EEE30B0C5E8A8A79B4699829A3FA)] | [added: | [38](#i6630617b9bc44580898f2a211346a55c_85) | | |]

| [Consolidated statements of comprehensive income for the years ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#sD78D639BD9A55D3DAF6D6EE643BAECF0)] [added: 2019](#i6630617b9bc44580898f2a211346a55c_91)] | [removed: [40](#sD78D639BD9A55D3DAF6D6EE643BAECF0)] | [added: | [39](#i6630617b9bc44580898f2a211346a55c_91) | | |]

| [Consolidated statements of shareholders' equity for the years ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#s6887CE40410F5BE8BE732576AF7A42B3)] [added: 2019](#i6630617b9bc44580898f2a211346a55c_97)] | [removed: [41](#s6887CE40410F5BE8BE732576AF7A42B3)] | [added: | [40](#i6630617b9bc44580898f2a211346a55c_97) | | |]

| [Consolidated statements of cash flow for the years ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#s19BF856E02195E849CB3BB9854FE898D)] [added: 2019](#i6630617b9bc44580898f2a211346a55c_103)] | [removed: [42](#s19BF856E02195E849CB3BB9854FE898D)] | [added: | [41](#i6630617b9bc44580898f2a211346a55c_103) | | |]

[removed: | [Notes to consolidated financial statements](#s84B8E127802A50E985DE938E109CC71B) | [43](#s84B8E127802A50E985DE938E109CC71B) |][added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)]

All [removed: other] financial statement schedules are omitted because the required information is not present, or not present in amounts sufficient to require submission of the schedule or because the information required is included in the financial statements and accompanying notes thereto.

We have audited the accompanying consolidated balance sheets of Atmos Energy Corporation (the “Company“) as of September 30, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of comprehensive income, shareholders‘ equity, and cash flows, for each of the three years in the period ended September 30, [removed: 2020,] [added: 2021,] and the related notes [removed: and financial statement schedule listed in the Index at Item 8] (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company [removed: as of] [added: at] September 30, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended September 30, [removed: 2020,] [added: 2021,] in conformity with US generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control [removed: -] [added: —] Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November [removed: 13, 2020] [added: 12, 2021] expressed an unqualified opinion thereon.

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

The communication of the critical audit matter does not alter in any way our opinion on the [added: consolidated] financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

| | [added: | |] Determination of Capital Costs | [added: | |]

| *Description of the Matter* | [added: | |] As more fully described in Note 2 to the financial statements, the Company capitalizes the direct and indirect costs of construction. Once a project is completed, it is placed into service and included in the Company’s rate base. Costs of maintenance and repairs that are not included in the Company’s rate base are charged to expense. For the year ended September 30, [removed: 2020,] [added: 2021,] the Company capitalized approximately [removed: $1.9] [added: $2.0] billion of construction-related costs for regulated property, plant and equipment. Auditing management’s identification of capital additions and maintenance and repairs expense involved significant effort and auditor judgment. These amounts have both a higher magnitude and a higher likelihood of potential misstatement. As a cost-based, rate-regulated entity, the rates charged to customers are designed to recover the entity’s costs and provide a rate of return on rate base. Net property, plant and equipment is the most significant component of the Company’s rate base. As a result, inappropriate capitalization of costs could affect the amount, timing and classification of revenues and expenses in the [removed: consolidated] financial statements. | [added: | |]

| *How We Addressed the Matter in Our Audit* | [added: | |] We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the initial determination and approval of expenditures for either capital additions or maintenance and repair. For example, we selected a sample of projects initiated during the year to evaluate the effectiveness of management’s review controls to determine the proper categorization of project expenditures as either capitalizable costs or current-period expense. Our audit procedures included, among others, testing a sample of projects initiated during the year, including the evaluation of the nature of the project, with Company personnel outside of accounting and financial reporting. For example, we evaluated project setup through inspection of each project’s description for compliance with the Company’s capitalization policy as described in Note 2 and a series of inquiries of the project approver to understand how they assessed whether projects should be treated as capital or expense. Other audit procedures included evaluating whether the descriptions and amounts included on third-party invoices either support or contradict the project classification as capital, evaluating the appropriateness of individuals capitalizing direct labor charges to projects by assessing the relevance of their job function to the capital project, and recalculating other overhead costs capitalized to projects. | [added: | |]

| | [added: | |] September 30 | | | | | | | [added: | |]

| | [added: | | 2021 | | | | | |] 2020 | | | | [added: | |] 2019 | | |

| | [added: | |] (In thousands, except share data) | | | | | | | [added: | |]

| ASSETS | | | | | | | | [added: | | | |]

| Property, plant and equipment | [added: | |] $ | [removed: 15,539,166] [added: 17,258,547] | | | [added: | |] $ | [removed: 13,758,899] [added: 15,539,166] | |

| Construction in progress | [removed: 418,055] | | [added: 626,551] | | [removed: 421,694] | | | [added: | 418,055 | | |]

| Less accumulated depreciation and amortization | [removed: 2,601,874] | | [added: 2,821,128] | | [removed: 2,392,924] | | | [added: | 2,601,874 | | |]

| Net property, plant and equipment | [removed: 13,355,347] | | [added: 15,063,970] | | [removed: 11,787,669] | | | [added: | 13,355,347 | | |]

| Current assets | | | | | | | | [added: | | | |]

| Cash and cash equivalents [added: at beginning of year] | [added: | |] 20,808 | | | | [added: | |] 24,550 | | | [added: | | | 13,771 | | |]

| Accounts receivable, less allowance for [removed: doubtful] [added: uncollectible] accounts of [removed: $29,949] [added: $64,471] in [removed: 2020] [added: 2021] and [removed: $15,899] [added: $29,949] in [removed: 2019] [added: 2020] | [removed: 230,595] | | [added: 342,967] | | [removed: 230,571] | | | [added: | 230,595 | | |]

| Gas stored underground | [removed: 111,950] | | [added: 178,116] | | [removed: 130,138] | | | [added: | 111,950 | | |]

| Other current assets [added: (See Note 9)] | [removed: 107,905] | | [added: 2,200,909] | | [removed: 72,772] | | | [added: | 107,905 | | |]

| Total current assets | [removed: 471,258] | | [added: 2,838,715] | | [removed: 458,031] | | | [added: | 471,258 | | |]

| Goodwill | [added: | |] 731,257 | | | | [removed: 730,706] | | [added: 731,257] | [added: | |]

| Deferred charges and other assets [added: (See Note 9)] | [removed: 801,170] | | [added: 974,720] | | [removed: 391,213] | | | [added: | 801,170 | | |]

| CAPITALIZATION AND LIABILITIES | | | | | | | | [added: | | | |]

| Shareholders’ equity | | | | | | | | [added: | | | |]

| Common stock, no par value (stated at $0.005 per share); 200,000,000 shares authorized; issued and outstanding: [removed: 2020] [added: 2021] — [removed: 125,882,477] [added: 132,419,754] shares; [removed: 2019] [added: 2020] — [removed: 119,338,925] [added: 125,882,477] shares | [added: | |] $ | [removed: 629] [added: 662] | | | [added: | |] $ | [removed: 597] [added: 629] | |

| Additional paid-in capital | [removed: 4,377,149] | | [added: 5,023,751] | | [removed: 3,712,194] | | | [added: | 4,377,149 | | |]

| Accumulated other comprehensive [removed: loss] [added: income (loss)] | [removed: (57,589] | | [removed: )] [added: 69,803] | | [removed: (114,583] | | [removed: )] | [added: | (57,589) | | |]

| Retained earnings | [removed: 2,471,014] | | [added: 2,812,673] | | [removed: 2,152,015] | | | [added: | 2,471,014 | | |]

| [Notes to consolidated financial statements](#i6630617b9bc44580898f2a211346a55c_106) | | | [42](#i6630617b9bc44580898f2a211346a55c_106) | | |

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Table of Contents

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Table of Contents

| | | | 2021 | | | | | | 2020 | | |

| | | | 17,885,098 | | | | | | 15,957,221 | | |

| | | | $ | 19,608,662 | | | | | $ | 15,359,032 | |

| | | | $ | 19,608,662 | | | | | $ | 15,359,032 | |

Table of Contents

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| Net income | | | $ | 665,563 | | | | | $ | 601,443 | | | | | $ | 511,406 | |

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Table of Contents

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| Common stock issued: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 665,563 | | | | | | 665,563 | | |

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| Common stock issued: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Public offering | | | 6,130,875 | | | | | | 31 | | | | | | 606,636 | | | | | | — | | | | | | — | | | | | | 606,667 | | |

| Retirement savings plan | | | 84,265 | | | | | | 1 | | | | | | 8,125 | | | | | | — | | | | | | — | | | | | | 8,126 | | |

| 1998 Long-term incentive plan | | | 242,216 | | | | | | 1 | | | | | | 3,091 | | | | | | — | | | | | | — | | | | | | 3,092 | | |

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| [Selected Quarterly Financial Data (Unaudited)](#s98628580213254C7A7AD301F34199C20) | [82](#s98628580213254C7A7AD301F34199C20) |

| Financial statement schedule for the years ended September 30, 2020, 2019 and 2018 | |

| [Schedule II. Valuation and Qualifying Accounts](#sD88480B0026A5DD88DA505367ECB9AF9) | [95](#sD88480B0026A5DD88DA505367ECB9AF9) |

November 13, 2020

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| | 15,957,221 | | | | 14,180,593 | | |

| | $ | 15,359,032 | | | $ | 13,367,619 | |

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| Balance, September 30, 2017 | 106,104,634 | | | $ | 531 | | | $ | 2,536,365 | | | $ | (105,254 | ) | | $ | 1,467,024 | | | $ | 3,898,666 | |

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

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

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

| Cumulative effect of accounting change | — | | | — | | | | — | | | | (8,210 | | ) | | 8,210 | | | | — | | |

| Retirement savings plan | 78,941 | | | — | | | | 8,222 | | | | — | | | | — | | | | 8,222 | | |

| Net increase (decrease) in short-term debt | (464,915 | | ) | | (110,865 | | ) | | 128,035 | | |

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

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2.

| | $ | 414,641 | | | $ | 284,547 | |

| Regulatory cost of service reserve | 1,716 | | | | 5,238 | | |

| Other | 17,838 | | | | 16,120 | | |

| | $ | 1,367,013 | | | $ | 1,386,126 | |

| (2) | Due to the passage of the Kansas House Bill 2585, on June 1, 2020, we remeasured our deferred tax liability and updated our state deferred tax rate resulting in a $12.1 million regulatory liability as of September 30, 2020. The remaining amount reflects the remeasurement of the net deferred tax liability included in our rate base as a result of the Tax Cuts and Jobs Act of 2017 (the TCJA). Of this amount, $20.9 million as of September 30, 2020 and $21.2 million as of September 30, 2019 is recorded in other current liabilities. See Note 13 for further information. |

As of September 30, 2020, we received regulatory orders in most states to defer into a regulatory asset all expenses, beyond the normal course of business, related to Coronavirus Disease 2019 (COVID-19), including bad debt expense.

As of September 30, 2020, no amounts have been recorded as regulatory assets or liabilities for expenses related to COVID-19.

the RRC.

We establish an allowance for doubtful accounts to reduce the net receivable balance to the amount we reasonably expect to collect based on our collection experience or where we are aware of a specific customer’s inability or reluctance to pay.

However, if circumstances change, our estimate of the recoverability of accounts receivable could be affected.

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The costs of

Accretion of the asset retirement obligation due to the passage of time is recorded as an operating expense.

See Note 6 for further discussion regarding the accounting polices for these leases.

For the valuation performed as of September 30, 2020, decreases in the discount rate resulted in actuarial losses that increased our plan obligations.

The change in presentation of these costs was implemented on a retrospective basis as required by the guidance.

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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: 2020] [added: 2021] 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: 2020,] [added: 2021,] 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.

| /s/ JOHN K. AKERS | | [added: | | | |] /s/ CHRISTOPHER T. FORSYTHE | [added: | |]

| John K. Akers | | [added: | | | |] Christopher T. Forsythe | [added: | |]

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

We have audited Atmos Energy Corporation’s internal control over financial reporting as of September 30, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Atmos Energy Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2020,] [added: 2021,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: 2020] [added: 2021] consolidated financial statements of the Company and our report dated November [removed: 13, 2020] [added: 12, 2021] 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: 2020] [added: 2021] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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| November 12, 2021 | | | | | | | | |

November 12, 2021

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| November 13, 2020 | | |

November 13, 2020

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Information regarding directors [removed: and delinquent Section 16(a) reports, if applicable,] is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February [removed: 3, 2021.][added: 9, 2022.]

The following table sets forth certain information as of September 30, [removed: 2020,] [added: 2021,] regarding the executive officers of the Company.

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

| John K. Akers | | [removed: 57] | | [removed: 29] | | [added: 58 | | | | | | 30 | | | | | |] President, Chief Executive Officer and Director | [added: | |]

| Christopher T. Forsythe | | [removed: 49] | | [removed: 17] | | [added: 50 | | | | | | 18 | | | | | |] Senior Vice President and Chief Financial Officer | [added: | |]

| David J. Park | | [removed: 49] | | [removed: 26] | | [added: 50 | | | | | | 27 | | | | | |] Senior Vice President, Utility Operations | [added: | |]

| Karen E. Hartsfield | | [removed: 50] | | [removed: 5] | | [added: 51 | | | | | | 6 | | | | | |] Senior Vice President, General Counsel and Corporate Secretary | [added: | |]

| John M. Robbins | | [removed: 50] | | [removed: 7] | | [added: 51 | | | | | | 8 | | | | | |] Senior Vice President, Human Resources | [added: | |]

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 [removed: Directors is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February 3, 2021.]

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

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Directors is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February 9, 2022.

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| Kim R. Cocklin | | 69 | | 14 | | Executive Chairman of the Board |

Kim R.

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

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

Mr. Cocklin joined the Company in June 2006 and served as President and Chief Operating Officer of the Company from October 1, 2008 through September 30, 2010, after having served as Senior Vice President, Regulated Operations from October 2006 through September 2008.

Mr. Cocklin was appointed to the Board of Directors on November 10, 2009.

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 also under "Corporate Governance" under the "Corporate Responsibility" tab.

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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: 3, 2021,] [added: 9, 2022,] under the captions [removed: "Human Resources Committee Report,"] [added: "Director Compensation,"] "Compensation Discussion and Analysis," "Other Executive Compensation Matters" and "Named Executive Officer Compensation."

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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: 3, 2021,] [added: 9, 2022,] under the heading "Beneficial Ownership of Common Stock." Information concerning our equity compensation plans is provided in Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities”, of this Annual Report on Form 10-K.

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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: 3, 2021,] [added: 9, 2022,] under the heading "Corporate Governance and Other Board Matters," [added: and] "Proposal One – Election of [removed: Directors," and "Director Compensation."][added: Directors."]

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Information on our principal accountant’s fees and services is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February [removed: 3, 2021,] [added: 9, 2022,] under the heading "Proposal [removed: Three] [added: Two] – Ratification of Appointment of Independent Registered Public Accounting Firm."

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The financial statements [removed: and financial statement schedule] listed in the Index to Financial Statements in [added: Part II,] Item 8 are filed as part of this Form 10-K.

| [removed: Exhibit Number] [added: Exhibit Number] | | [added: | | | |] Description | | [added: | | | |] Page Number [removed: or Incorporation by Reference] [added: or Incorporation by Reference] to | [added: | |]

| | | [added: | | | |] *Articles of Incorporation and Bylaws* | | | [added: | | | | | |]

| 3.1 | | [added: | | | |] Restated Articles of Incorporation of Atmos Energy Corporation - Texas (As Amended Effective February 3, 2010) | | [added: | | | |] [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) | [added: | |]

| 3.2 | | [added: | | | |] Restated Articles of Incorporation of Atmos Energy Corporation - Virginia (As Amended Effective February 3, 2010) | | [added: | | | |] [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) | [added: | |]

| 3.3 | | [added: | | | |] Amended and Restated Bylaws of Atmos Energy Corporation (as of February 5, 2019) | | [added: | | | |] [Exhibit 3.1 to Form 8-K dated February 5, 2019 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180219000009/ato20190211exhibit31.htm) | [added: | |]

| | | [added: | | | |] *Instruments Defining Rights of Security Holders, Including Indentures* | | | [added: | | | | | |]

| 4.1(a) | | [added: | | | |] Specimen Common Stock Certificate (Atmos Energy Corporation) | | [added: | | | |] [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) | [added: | |]

| [removed: 4.1(b)] [added: 10.14(a)*] | | [removed: Description of Registrant's Securities] | | [added: | | Atmos Energy Corporation 1998 Long-Term Incentive Plan (as amended and restated November 6, 2019) | | | | | |] [Exhibit [removed: 4.1(b)] [added: 10.11(a)] to Form 10-K for fiscal year ended September 30, 2019 (File No. [removed: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180219000037/ato2019930ex-41b.htm)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180219000037/ato2019930ex-1011a.htm)] | [added: | |]

| 4.2 | | [added: | | | |] Indenture dated as of November 15, 1995 between United Cities Gas Company and Bank of America Illinois, Trustee | | [added: | | | |] [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) | [added: | |]

| 4.3 | | [added: | | | |] Indenture dated as of July 15, 1998 between Atmos Energy Corporation and U.S. Bank Trust National Association, Trustee | | [added: | | | |] [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) | [added: | |]

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

| 4.5 | | [added: | | | |] Indenture dated as of March 26, 2009 between Atmos Energy Corporation and U.S. Bank National Corporation, Trustee | | [added: | | | |] [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) | [added: | |]

| 4.6(a) | | [added: | | | |] Debenture Certificate for the 6 3/4% Debentures due 2028 | | [added: | | | |] [Exhibit 99.2 to Form 8-K dated July 29, 1998 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/0000950134-98-006211.txt) | [added: | |]

| 4.6(b) | | [added: | | | |] Global Security for the 5.95% Senior Notes due 2034 | | [added: | | | |] [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) | [added: | |]

| [removed: 4.6(c)] [added: 4.6(d)] | | [added: | | | |] Global Security for the 5.5% Senior Notes due 2041 | | [added: | | | |] [Exhibit 4.2 to Form 8-K dated June 13, 2011 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000095012311058729/d82963exv4w2.htm) | [added: | |]

| [removed: 4.6(d)] [added: 4.6(f)] | | [added: | | | |] Global Security for the 4.15% Senior Notes due 2043 | | [added: | | | |] [Exhibit 4.2 to Form 8-K dated January [removed: 11,] [added: 15,] 2013 (File No. [removed: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312513010106/d466114dex42.htm)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312513013261/d468171dex42.htm)] | [added: | |]

| [removed: 4.6(e)] [added: 4.6(h)] | | [added: | | | |] Global Security for the 4.125% Senior Notes due 2044 | | [added: | | | |] [Exhibit 4.2 to Form 8-K dated October 17, 2014 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180214000028/ato20141017exhibit42.htm) | [added: | |]

| [removed: 4.6(f)] [added: 4.6(k)] | | [added: | | | |] Global Security for the [removed: 3.000%] [added: 4.300%] Senior Notes due [removed: 2027] [added: 2048] | | [added: | | | |] [Exhibit 4.2 to Form 8-K dated [removed: June 8, 2017] [added: October 4, 2018] (File No. [removed: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312517198618/d411353dex42.htm)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312518293134/d627444dex42.htm)] | [added: | |]