Atmos Energy (ATO) 10-K risk factor changes: FY2022 vs FY2021

[removed: These] [added: Regulatory authorities in the states we serve have approved various infrastructure and annual rate adjustment] mechanisms [removed: work] to effectively reduce the regulatory lag inherent in the ratemaking process.

[removed: However, regulatory] [added: Regulatory] lag could significantly increase if the regulatory authorities modify or terminate these rate mechanisms.

The regulatory process also involves the risk that regulatory authorities may (i) review our purchases of natural gas and adjust the amount of our gas costs that we pass through to our customers or (ii) limit [added: or disallow] the costs we may have incurred from our cost of service that can be recovered from customers.

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

[added: 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.

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 [added: competitive contracts with lower per-unit costs.]

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

In addition, higher costs could result from loss of [removed: productivity or] [added: productivity,] increased safety compliance [removed: issues.][added: issues, or cost of contract labor.]

These tools and systems support critical functions [removed: including,] [added: including] scheduling and dispatching of service technicians, automated meter reading systems, customer care and billing, operational plant logistics, management [removed: reporting,] [added: reporting] and external financial reporting.

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

[removed: Any attack on such systems that would] result in the unauthorized release of customer, employee or other confidential or sensitive data could have a material adverse effect on our business reputation, increase our costs and expose us to additional material legal claims and liability.

We are subject to market risks beyond our control, including (i) commodity price volatility caused by market supply and demand dynamics, counterparty performance or counterparty [removed: creditworthiness,] [added: creditworthiness] and (ii) interest rate risk.

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

Any adverse changes in economic conditions in the [removed: United States, especially in the] states in which we [removed: operate,] [added: operate] could adversely affect the financial resources of many domestic households.

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

gas in interstate commerce.

Failure to attract and retain a qualified workforce could adversely affect our results of operations.

The competition for talent has become increasingly intense and we may experience increased employee turnover due to a tightening labor market.

Additionally, our ability to operate is contingent on maintaining a healthy workforce and a safe working environment.

As a provider of essential services, we have an obligation to provide natural gas services to customers.

Incidents of COVID-19 or any other future pandemic in our workforce could challenge the availability of our workforce which could threaten the continuity of our business operations.

Technology and Cybersecurity Risks

Any attack on such systems that would

Compliance with and changes in cybersecurity requirements have a cost and operational impact on our business, and failure to comply with such laws and regulations could adversely impact our reputation, results of operations, financial condition and/or cash flows.

As cyber-attacks are becoming more sophisticated, U.S. government warnings have indicated that critical infrastructure assets, including pipeline infrastructure, may be specifically targeted by certain groups.

In 2021, the Transportation Security Administration (TSA) announced two new security directives in response to a ransomware attack on the Colonial Pipeline that occurred earlier in the year.

These directives require critical pipeline owners to comply with mandatory reporting measures, designate a cybersecurity coordinator, provide vulnerability assessments, and ensure compliance with certain cybersecurity requirements.

Such directives or other requirements may require expenditure of significant additional resources to respond to cyber-attacks, to continue to modify or enhance protective measures, or to assess, investigate and remediate any critical infrastructure security vulnerabilities.

Any failure to comply with such government regulations or failure in our cybersecurity protective measures may result in enforcement actions that may have a material adverse effect on our business, results of operations and financial condition.

In addition, there is no certainty that costs incurred related to securing against threats will be recovered through rates.

Climate Risks

As climate change occurs, our businesses could be adversely impacted.

However, in the last several years, a number of regulatory authorities in the states we serve have approved rate mechanisms that provide for annual adjustments to rates that allow us to recover the cost of investments made to replace existing infrastructure or reflect changes in our cost of service.

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

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competitive contracts with lower per-unit costs.

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

The inability to continue to hire, train and retain operational, technical and managerial personnel could adversely affect our results of operations.

Although the average age of the employee base of Atmos Energy is not significantly changing year over year, there are still a number of employees who will become eligible to retire within the next five to 10 years.

The inability to hire, train and retain new operational, technical and managerial personnel adequately and to transfer institutional knowledge and expertise could adversely affect our ability to manage and operate our business.

If we were unable to hire, train and retain appropriately qualified personnel, our results of operations could be adversely affected.

systems or serve our customers timely.

With respect to interest rate risk, we have been operating in a relatively low interest-rate environment in recent years compared to historical norms for both short and long-term interest rates.

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

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

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 will not materially impact our business, results of operations and financial condition.

[added: 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; [removed: 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; [removed: adverse weather conditions; the impact of climate change; the inability to continue] [added: failure] to [removed: hire, train] [added: attract] and retain [removed: operational, technical] [added: a qualified workforce; natural disasters, terrorist activities or other events] and [removed: managerial personnel;] [added: other risks and uncertainties discussed herein, all of which are difficult to predict and many of which are beyond our control;] 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; [removed: 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 [removed: 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 [removed: 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] [added: new cybersecurity compliance] requirements; [removed: and] [added: adverse weather conditions;] the [removed: outbreak of COVID-19 and its] impact [removed: on business and economic conditions.][added: of]

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | |

| Net income | | | $ | [removed: 665,563] [added: 774,398] | | | | | $ | [removed: 601,443] [added: 665,563] | | | | | $ | [removed: 511,406] [added: 601,443] | | | | | $ | [removed: 64,120] [added: 108,835] | | | | | $ | [removed: 90,037] [added: 64,120] | |

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

| Adjusted net income | | | $ | [removed: 665,563] [added: 774,398] | | | | | $ | [removed: 580,481] [added: 665,563] | | | | | $ | [removed: 511,406] [added: 580,481] | | | | | $ | [removed: 85,082] [added: 108,835] | | | | | $ | [removed: 69,075] [added: 85,082] | |

| Diluted net income per share | | | $ | [removed: 5.12] [added: 5.60] | | | | | $ | [removed: 4.89] [added: 5.12] | | | | | $ | [removed: 4.35] [added: 4.89] | | | | | $ | [removed: 0.23] [added: 0.48] | | | | | $ | [removed: 0.54] [added: 0.23] | |

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

| Adjusted diluted net income per share | | | $ | [removed: 5.12] [added: 5.60] | | | | | $ | [removed: 4.72] [added: 5.12] | | | | | $ | [removed: 4.35] [added: 4.72] | | | | | $ | [removed: 0.40] [added: 0.48] | | | | | $ | [removed: 0.37] [added: 0.40] | |

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Distribution segment | | | $ | [removed: 445,862] [added: 521,977] | | | | | $ | [removed: 395,664] [added: 445,862] | | | | | $ | [removed: 328,814] [added: 395,664] | |

| Pipeline and storage segment | | | [removed: 219,701] [added: 252,421] | | | | | | [removed: 205,779] [added: 219,701] | | | | | | [removed: 182,592] [added: 205,779] | | |

| Net income | | | $ | [removed: 665,563] [added: 774,398] | | | | | $ | [removed: 601,443] [added: 665,563] | | | | | $ | [removed: 511,406] [added: 601,443] | |

During fiscal [removed: 2021,] [added: 2022,] we recorded net income of [removed: $665.6] [added: $774.4] million, or [removed: $5.12] [added: $5.60] per diluted share, compared to net income of [removed: $601.4] [added: $665.6] million, or [removed: $4.89] [added: $5.12] per diluted share in the prior year.

The year-over-year increase in [removed: adjusted] net income of [removed: $85.1] [added: $108.8] million largely reflects positive rate outcomes driven by safety and reliability spending and distribution customer growth, partially offset by [removed: lower service order revenues and higher bad debt expense] [added: an increase] in [removed: our distribution segment due to the temporary suspension of collection activities during the pandemic and] [added: employee related costs,] increased spending on system maintenance [removed: activities.][added: activities and an increase in depreciation expense and property taxes associated with increased capital investments.]

During the year ended September 30, [removed: 2021,] [added: 2022,] we implemented ratemaking regulatory actions which resulted in an increase in annual operating income of [removed: $185.7] [added: $174.9] million.

Excluding the impact of the refund of excess deferred income taxes resulting from previously enacted tax reform legislation, our total fiscal [removed: 2021] [added: 2022] rate outcomes were [removed: $226.2] [added: $215.6] million.

Additionally, we had ratemaking efforts in progress at September 30, [removed: 2021,] [added: 2022,] seeking a total increase in annual operating income of [removed: $56.5] [added: $144.5] million.

Excluding the impact of the refund of excess deferred income taxes resulting from previously enacted tax reform legislation, [removed: we have received approval to implement $68.5 million during the first quarter of] [added: our total] fiscal [removed: 2022.][added: 2022 annualized rate outcomes in our distribution segment were $136.8 million.]

During fiscal year [removed: 2021,] [added: 2022,] we refunded [removed: $55.9] [added: $167.8] million in excess deferred tax liabilities to customers.

The refunds reduced operating income and reduced our annual effective income tax rate to [removed: 18.8%] [added: 9.1%] in fiscal [removed: 2021] [added: 2022] compared with [removed: 19.5%] [added: 18.8%] in fiscal [removed: 2020.][added: 2021.]

[removed: During fiscal 2021, we completed over $3.4 billion of long-term debt and equity financing, including] [added: (2)Excluding the] $2.2 billion of incremental financing issued to pay for the purchased gas costs incurred during Winter Storm [removed: Uri.][added: Uri, our equity capitalization ratio would have been 61.3% and 60.6% at September 30, 2022 and 2021.]

As of September 30, [removed: 2021,] [added: 2022,] our equity capitalization was [removed: 51.9] [added: 53.6] percent.

Excluding the $2.2 billion of incremental [removed: financing,] [added: financing issued in conjunction with Winter Storm Uri,] our equity capitalization was [removed: 60.6] [added: 61.3] percent.

As of September 30, [removed: 2021,] [added: 2022,] we had approximately [removed: $2.9] [added: $3.1] billion in total liquidity, [removed: including] [added: consisting of $51.6 million in] cash and cash [removed: equivalents and] [added: equivalents, $776.6 million in] funds available through equity forward sales [removed: agreements.][added: agreements and $2,309.4 million in undrawn capacity under our credit facilities.]

As a result of the continued stability of our earnings, cash flows and capital structure, our Board of Directors increased the quarterly dividend by 8.8% percent for fiscal [removed: 2022.][added: 2023.]

During fiscal [removed: 2021,] [added: 2022,] we completed regulatory proceedings in our distribution segment resulting in a [removed: $141.8] [added: $96.2] million increase in annual operating income.

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: 79] [added: 81] percent of our residential and commercial revenues.

Financial and operational highlights for our distribution segment for the fiscal years ended September 30, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] are presented below.

| Operating revenues | | | $ | [removed: 3,241,973] [added: 4,035,194] | | | | | $ | [removed: 2,626,993] [added: 3,241,973] | | | | | $ | [removed: 2,745,461] [added: 2,626,993] | | | | | $ | [removed: 614,980] [added: 793,221] | | | | | $ | [removed: (118,468)] [added: 614,980] | |

| Purchased gas cost | | | [removed: 1,501,695] [added: 2,210,302] | | | | | | [removed: 1,071,227] [added: 1,501,695] | | | | | | [removed: 1,268,591] [added: 1,071,227] | | | | | | [removed: 430,468] [added: 708,607] | | | | | | [removed: (197,364)] [added: 430,468] | | |

| Operating expenses | | | [removed: 1,121,764] [added: 1,220,347] | | | | | | [removed: 1,027,523] [added: 1,121,764] | | | | | | [removed: 1,006,098] [added: 1,027,523] | | | | | | [removed: 94,241] [added: 98,583] | | | | | | [removed: 21,425] [added: 94,241] | | |

| Operating income | | | [removed: 618,514] [added: 604,545] | | | | | | [removed: 528,243] [added: 618,514] | | | | | | [removed: 470,772] [added: 528,243] | | | | | | [removed: 90,271] [added: (13,969)] | | | | | | [removed: 57,471] [added: 90,271] | | |

| Other non-operating income (expense) | | | [removed: (20,694)] [added: 6,946] | | | | | | [removed: (1,265)] [added: (20,694)] | | | | | | [removed: 6,241] [added: (1,265)] | | | | | | [removed: (19,429)] [added: 27,640] | | | | | | [removed: (7,506)] [added: (19,429)] | | |

| Interest charges | | | [removed: 36,629] [added: 49,921] | | | | | | [removed: 39,634] [added: 36,629] | | | | | | [removed: 60,031] [added: 39,634] | | | | | | [removed: (3,005)] [added: 13,292] | | | | | | [removed: (20,397)] [added: (3,005)] | | |

| Income before income taxes | | | [removed: 561,191] [added: 561,570] | | | | | | [removed: 487,344] [added: 561,191] | | | | | | [removed: 416,982] [added: 487,344] | | | | | | [removed: 73,847] [added: 379] | | | | | | [removed: 70,362] [added: 73,847] | | |

| Income tax expense | | | [removed: 115,329] [added: 39,593] | | | | | | [removed: 105,147] [added: 115,329] | | | | | | [removed: 88,168] [added: 105,147] | | | | | | [removed: 10,182] [added: (75,736)] | | | | | | [removed: 16,979] [added: 10,182] | | |

| Non-cash income tax benefit (1) | | | — | | | | | | [removed: (13,467)] [added: —] | | | | | | [removed: —] [added: (13,467)] | | | | | | [removed: 13,467] [added: —] | | | | | | [removed: (13,467)] [added: 13,467] | | |

| Net income | | | $ | [removed: 445,862] [added: 521,977] | | | | | $ | [removed: 395,664] [added: 445,862] | | | | | $ | [removed: 328,814] [added: 395,664] | | | | | $ | [removed: 50,198] [added: 76,115] | | | | | $ | [removed: 66,850] [added: 50,198] | |

| Consolidated distribution sales volumes — MMcf | | | [removed: 308,833] [added: 292,266] | | | | | | [removed: 291,650] [added: 308,833] | | | | | | [removed: 315,476] [added: 291,650] | | | | | | [removed: 17,183] [added: (16,567)] | | | | | | [removed: (23,826)] [added: 17,183] | | |

| Consolidated distribution transportation volumes — MMcf | | | [removed: 152,513] [added: 152,709] | | | | | | [removed: 147,387] [added: 152,513] | | | | | | [removed: 155,078] [added: 147,387] | | | | | | [removed: 5,126] [added: 196] | | | | | | [removed: (7,691)] [added: 5,126] | | |

greenhouse gas emissions or other legislation or regulations intended to address climate change; the impact of climate change; 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; and increased costs of providing health care benefits, along with pension and postretirement health care benefits and increased funding requirements.

Capital expenditures for fiscal 2022 were $2.4 billion.

During fiscal 2022, we completed approximately $1.6 billion of long-term debt and equity financing.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 2022 vs. 2021 | | | | | | 2021 vs. 2020 | | |

Additional key drivers for the change in operating income include:

- a $24.9 million decrease in bad debt expense, primarily due to the resumption of collection activities in late fiscal 2021 following the expiration of pandemic-related collection moratoriums.

- a $17.3 million decrease in consumption, net of WNA, primarily due to the decline in residential consumption during the second fiscal quarter.

- a $25.5 million increase in employee related costs driven by increased headcount, increased number of service orders performed and higher benefits costs.

The year-over-year change in other non-operating income (expense) of $27.6 million primarily reflects lower non-service costs related to our postretirement medical plan, partially offset by an increase in unrealized losses on equity investments.

Interest charges increased $13.3 million due to the issuance of long-term debt during fiscal 2022 and interest expense recognized in fiscal 2022 related to debt incurred as a result of Winter Storm Uri.

As described in Note 9 to the consolidated financial statements, interest related to the incremental financing incurred as a result of Winter Storm Uri was deferred through December 31, 2021 pursuant to a regulatory order issued by the State of Texas.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 2022 vs. 2021 | | | | | | 2021 vs. 2020 | | |

On May 18, 2022, the Texas Railroad Commission approved the Company's GRIP filing.

The demand fee our Louisiana natural gas transmission pipeline charges to our Louisiana distribution division increases five percent annually and has been approved by the Louisiana Public Service Commission until September 30, 2027.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 2022 vs. 2021 | | | | | | 2021 vs. 2020 | | |

Fiscal year ended September 30, 2022 compared with fiscal year ended September 30, 2021

Additional drivers for the change in operating income include:

INFLATION REDUCTION ACT OF 2022

In August 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the Inflation Reduction Act) into law.

The Inflation Reduction Act includes a new corporate alternative minimum tax (the Corporate AMT) of 15% on the adjusted financial statement income (AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period.

We currently anticipate this tax will apply to us within the next four to five years.

The impact on our financial position, results of operations and cash flows is dependent on future guidance from the U.S. government.

Also, the Inflation Reduction Act imposes a methane emissions charge for methane emissions in excess of 25,000 metric tons carbon dioxide equivalent per year.

Based on our preliminary evaluation of the regulations, we currently do not anticipate this provision of the Inflation Reduction Act will have a material impact on our financial position, results of operations or cash flows.

Additionally, the Inflation

Reduction Act imposes an excise tax of 1% tax on the fair market value of net stock repurchases made after December 31, 2022.

The impact of this provision will be dependent on the extent of share repurchases made in future periods.

On September 27, 2022, we settled $500 million of forward starting interest rate swaps associated with a planned debt issuance that was completed on October 3, 2022.

| | | | | | | $ | 1,350,000 | | | | | | | |

| | | | 2022 | | | | | | | | | | | | 2021 | | | | | | | | |

| Short-term debt | | | $ | 184,967 | | | | | 1.1 | | % | | | | $ | — | | | | | — | | % |

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 2022 vs. 2021 | | | | | | 2021 vs. 2020 | | |

Fiscal 2021 operating cash flow included $2.1 billion of cash paid for gas costs incurred during Winter Storm Uri.

Excluding this cash outflow, operating cash flow in fiscal 2021 was $996.1 million.

We completed a public offering of $600 million of 2.85% senior notes due 2052.

We also received $197.1 million from the settlement of forward starting interest rate swaps related to a debt issuance completed in October 2022.

Additionally, Moody's placed our ratings under negative outlook.

In February 2022, Moody’s reaffirmed its long-term and short-term credit ratings and revised our outlook from negative to stable.

| Interest charges (2) | | | 4,098,799 | | | | | | 232,370 | | | | | | 423,684 | | | | | | 422,487 | | | | | | 3,020,258 | | |

| Finance leases (3) | | | 73,193 | | | | | | 3,313 | | | | | | 6,813 | | | | | | 7,070 | | | | | | 55,997 | | |

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 | | |

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

After adjusting for a nonrecurring income tax benefit recognized during fiscal 2020, adjusted net income was $580.5 million, or $4.72 per diluted share in the prior year.

As of the date of this report, we have received approval to implement $25.0 million of this amount in the first quarter of fiscal 2022.

Capital expenditures for fiscal 2021 increased 2 percent period-over-period, to $2.0 billion.

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.

- a $3.8 million decrease in employee related costs.

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

- an $18.2 million increase in bad debt expense primarily due to the temporary suspension of collection activities.

- an $8.4 million decrease in service order revenues primarily due to the temporary suspension of collection activities.

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.

On May 11, 2021, the Texas Railroad Commission approved an increase in operating income of $43.9 million.

In February 2021, the RRC approved a reduction in revenue of $106.6 million to refund excess deferred tax liabilities to customers over 35 months.

On December 21, 2016, the Louisiana Public Service Commission approved an annual increase of five percent to the demand fee charged by our natural gas transmission pipeline for each of the next 10 years, effective October 1, 2017.

- an $8.2 million net decrease in APT's thru-system activities primarily associated with the tightening of regional spreads driven by increased competing takeaway capacity in the Permian Basin.

lenders.

During fiscal 2021, we entered into forward starting interest rate swaps to effectively fix the Treasury yield component associated with $1.4 billion of planned issuances of unsecured senior notes.

During fiscal 2021, we settled swaps of $600 million with a net receipt of $62.2 million.

On October 1, 2021, the notes were issued as planned.

| Fiscal 2023 | | | | | | 500,000 | | | | | | 1.66 | | % |

| | | | | | | $ | 1,850,000 | | | | | | | |

(2)Excluding the $2.2 billion of incremental financing issued to pay for the purchased gas costs incurred during Winter Storm Uri, our equity capitalization ratio would have been 60.6%.

We received net proceeds from these offerings, after the underwriting discount and offering expenses, of $791.7 million.

| Interest charges (2) | | | 4,268,559 | | | | | | 221,325 | | | | | | 418,664 | | | | | | 412,654 | | | | | | 3,215,916 | | |

| Finance leases (3) | | | 29,809 | | | | | | 1,342 | | | | | | 2,753 | | | | | | 2,846 | | | | | | 22,868 | | |

| Operating leases (4) | | | 271,074 | | | | | | 41,822 | | | | | | 68,043 | | | | | | 39,359 | | | | | | 121,850 | | |

| Pension and postretirement benefit plan contributions (6) | | | 315,298 | | | | | | 26,126 | | | | | | 59,252 | | | | | | 90,829 | | | | | | 139,091 | | |

| Total contractual obligations | | | $ | 12,282,801 | | | | | $ | 495,884 | | | | | $ | 2,781,504 | | | | | $ | 555,688 | | | | | $ | 8,449,725 | |

The $1.1 billion of 0.625% senior notes and $1.1 billion floating rate senior notes that were issued in March 2021 contractually mature in 2023; however, we intend to repay these after the receipt of securitization funds, which we expect will occur in the next twelve months.

As such, we have classified the senior notes as current maturities of long-term debt as of September 30, 2021.

| Prices actively quoted | | | $ | 49,804 | | | | | $ | 94,522 | | | | | $ | 81,091 | | | | | $ | — | | | | | $ | 225,417 | |

| Total Fair Value | | | $ | 49,804 | | | | | $ | 94,522 | | | | | $ | 81,091 | | | | | $ | — | | | | | $ | 225,417 | |

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: 2021.][added: 2022.]

Table of Contents

We safely deliver reliable, affordable, efficient and abundant natural gas through regulated sales and transportation arrangements to [removed: over three] [added: approximately 3.3] million residential, commercial, public authority and industrial customers in eight states located primarily in the South.

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

As of September 30, [removed: 2021,] [added: 2022,] we manage and review our consolidated operations through the following reportable segments:

| Mid-Tex | | | | | | Texas, including the Dallas/Fort Worth Metroplex | | | | | | 550 | | | | | | [removed: 1,791,482] [added: 1,822,036] | | |

| Kentucky/Mid-States | | | | | | Kentucky | | | | | | 230 | | | | | | [removed: 183,937] [added: 184,547] | | |

| West Texas | | | | | | Amarillo, Lubbock, Midland | | | | | | 80 | | | | | | [removed: 326,419] [added: 329,378] | | |

| Colorado-Kansas | | | | | | Colorado | | | | | | 170 | | | | | | [removed: 125,241] [added: 127,565] | | |

At September 30, [removed: 2021,] [added: 2022,] we held [removed: 1,025] [added: 1,028] franchises having terms generally ranging from five to 35 years.

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

Major suppliers during fiscal [removed: 2021] [added: 2022] were [removed: Castleton Commodities Merchant Trading L.P., Cima Energy, LP, Concord Energy LLC,] [added: ConocoPhillips Company,] EnLink Gas Marketing LP, [removed: ETC Gas Marketing LTD,] [added: Enterprise Navitas Midstream Midland Basin LLC, EOG Resources, Inc.,] Hartree Partners, L.P., [removed: Kinder Morgan Texas Pipeline] [added: Sequent Energy Management] LLC, Symmetry Energy Solutions, LLC, Targa Gas Marketing [removed: LLC] [added: LLC, Texla Energy Management, Inc.] and Twin Eagle [removed: Resources] [added: Resource] Management, LLC.

The peak-day demand for our distribution operations in fiscal [removed: 2021] [added: 2022] was on February [removed: 14, 2021,] [added: 3, 2022,] when sales to customers reached approximately [removed: 4.3] [added: 3.6] Bcf.

Currently, our distribution divisions utilize [removed: 35] [added: 38] pipeline transportation companies, both interstate and intrastate, to transport our natural gas.

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

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

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

- The ability to recover the gas cost portion of bad debts in five [removed: states.][added: states which represents approximately 81 percent of our distribution residential and commercial revenues.]

The following table provides a jurisdictional rate summary for our regulated operations as of September 30, [removed: 2021.][added: 2022.]

| Atmos Pipeline — Texas | | | | | | Texas | | | | | | [removed: 05/11/2021] [added: 05/18/2022] | | | | | | [removed: $2,924,585] [added: $3,432,180] | | | | | | 8.87% | | | | | | 47/53 | | | 11.50% | | |

| | | | | | | Colorado SSIR | | | | | | [removed: 01/01/2021] [added: 01/01/2022] | | | | | | [removed: 78,265] [added: 98,695] | | | | | | 7.55% | | | | | | 44/56 | | | 9.45% | | |

| | | | | | | Kansas GSRS | | | | | | [removed: 02/01/2021] [added: 02/01/2022] | | | | | | [removed: 16,917] [added: 35,612] | | | | | | 7.03% | | | | | | 44/56 | | | 9.10% | | |

| | | | | | | Virginia-SAVE | | | | | | [removed: 10/01/2020] [added: 10/01/2021] | | | | | | [removed: 3,509] [added: 7,466] | | | | | | 7.43% | | | | | | 42/58 | | | 9.20% | | |

| | | | | | | Mid-Tex [removed: -] ATM Cities | | | | | | [removed: 06/11/2021] [added: 06/10/2022] | | | | | | [removed: 4,307,060(5)] [added: 5,121,370(5)] | | | | | | 7.97% | | | | | | 40/60 | | | 9.80% | | |

| | | | | | | Mid-Tex [removed: -] Environs | | | | | | [removed: 09/01/2021] [added: 06/10/2022] | | | | | | [removed: 4,307,060(5)] [added: 5,121,376(5)] | | | | | | 7.97% | | | | | | 40/60 | | | 9.80% | | |

| | | | | | | West Texas - ALDC | | | | | | [removed: 06/01/2021] [added: 06/11/2022] | | | | | | [removed: 751,829(9)] [added: 857,631(9)] | | | | | | 7.35% | | | | | | [removed: (4)] [added: 41/59] | | | (4) | | |

| | | | | | | West Texas - Environs | | | | | | [removed: 06/11/2021] [added: 06/11/2022] | | | | | | [removed: 765,101(9)] [added: 855,152(9)] | | | | | | 7.97% | | | | | | 40/60 | | | 9.80% | | |

(2)The bad debt rider allows us to recover from customers the gas cost portion of [removed: bad debts.][added: customer accounts that have been written off.]

(6)The Mid-Tex Cities approved the Formula Rate Mechanism filing with rates effective [removed: December] [added: October] 1, [removed: 2021,] [added: 2022,] which included a rate base of [removed: $4,394.5] [added: $5,235.0] million, an authorized return of [removed: 7.36%,] [added: 7.28%,] a debt/equity ratio of 42/58 and an authorized ROE of 9.80%.

(7)The Mississippi Public Service Commission approved a settlement at its meeting on October [removed: 14, 2021,] [added: 4, 2022,] which included a rate base of [removed: $797.6] [added: $915.6] million and an authorized return of [removed: 7.81%.][added: 7.53%.]

New rates were implemented November 1, [removed: 2021.][added: 2022.]

(8)The West Texas Cities includes all West Texas Division cities except Amarillo, [removed: Channing,] [added: Lubbock,] Dalhart and [removed: Lubbock] [added: Channing] (ALDC).

(10)The West Texas Cities approved the Formula Rate Mechanism filing with rates effective [removed: December] [added: October] 1, [removed: 2021,] [added: 2022,] which included a rate base of [removed: $759.0] [added: $855.3] million, an authorized return of [removed: 7.36%,] [added: 7.28%,] a debt/equity ratio of 42/58 and an authorized ROE of 9.80%.

The following [removed: table summarizes] [added: tables summarize] the annualized ratemaking outcomes we implemented in each of the last three fiscal years.

| Annual formula rate mechanisms | | | | | | $ | [removed: 181,459] [added: 160,857] | | | | | $ | [removed: 160,857] [added: —] | | | | | $ | [removed: 114,810] [added: 160,857] | |

| Rate case filings | | | | | | [removed: 5,119] [added: (1,057)] | | | | | | [removed: (1,057)] [added: —] | | | | | | [removed: 1,656] [added: (1,057)] | | |

| Other ratemaking activity | | | | | | (877) | | | | | | [removed: 353] [added: —] | | | | | | [removed: 214] [added: (877)] | | |

[removed: Additionally, the] [added: Our] ratemaking outcomes [removed: for the rate activity in fiscal 2021] include the refund [added: (return)] of excess deferred income taxes [added: (EDIT)] resulting from previously enacted tax reform legislation and do not reflect the true economic benefit of the outcomes because they do not include the corresponding income tax benefit.

The following ratemaking efforts seeking [removed: $56.5] [added: $144.5] million in annual operating income were initiated during fiscal [removed: 2021] [added: 2022] but had not been completed or implemented as of September 30, [removed: 2021:][added: 2022:]

| Kentucky/Mid-States | | | | | | Infrastructure Mechanism | | | | | | Virginia (1) | | | | | | [removed: $] [added: 477] | [removed: 350] | |

| Kentucky/Mid-States | | | | | | Infrastructure Mechanism | | | | | | Kentucky [added: (2)] | | | | | | [removed: 3,506] [added: 1,904] | | |

| Mid-Tex | | | | | | Formula Rate Mechanism | | | | | | Mid-Tex Cities (3) | | | | | | [removed: 29,707] [added: 92,615] | | |

We will be recognized for exceptional customer service, for being a great employer and for achieving superior financial results.

This operating strategy supports continued investment in safety, innovation, environmental sustainability and our communities.

| | | | | | | Tennessee | | | | | | | | | | | | 162,392 | | |

| | | | | | | Virginia | | | | | | | | | | | | 24,898 | | |

| Louisiana | | | | | | Louisiana | | | | | | 270 | | | | | | 376,515 | | |

| Mississippi | | | | | | Mississippi | | | | | | 110 | | | | | | 273,934 | | |

| | | | | | | Kansas | | | | | | | | | | | | 140,959 | | |

years; the most recent of which was completed in August 2017.

| | | | | | | Kansas SIP | | | | | | 04/01/2022 | | | | | | 5,881 | | | | | | 7.03% | | | | | | 44/56 | | | 9.10% | | |

| Kentucky/Mid-States | | | | | | Kentucky | | | | | | 05/20/2022 | | | | | | 568,506 | | | | | | 6.82% | | | | | | 45/55 | | | 9.23% | | |

| | | | | | | Tennessee | | | | | | 07/01/2022 | | | | | | 447,448 | | | | | | 7.53% | | | | | | 39/61 | | | 9.80% | | |

| Louisiana | | | | | | Louisiana | | | | | | 07/01/2022 | | | | | | 942,422 | | | | | | 7.30% | | | | | | (4) | | | (4) | | |

| Mid-Tex | | | | | | Mid-Tex Cities(6) | | | | | | 12/01/2021 | | | | | | 4,394,489(5) | | | | | | 7.36% | | | | | | 42/58 | | | 9.80% | | |

| | | | | | | Mid-Tex — Dallas | | | | | | 05/25/2022 | | | | | | 5,051,984(5) | | | | | | 7.41% | | | | | | 41/59 | | | 9.80% | | |

| Mississippi | | | | | | Mississippi(7) | | | | | | 11/01/2021 | | | | | | 473,932 | | | | | | 7.81% | | | | | | (4) | | | (4) | | |

| | | | | | | Mississippi - SIR(7) | | | | | | 11/01/2021 | | | | | | 323,695 | | | | | | 7.81% | | | | | | (4) | | | (4) | | |

| West Texas | | | | | | West Texas Cities(8) (10) | | | | | | 12/01/2021 | | | | | | 758,951(9) | | | | | | 7.36% | | | | | | 42/58 | | | 9.80% | | |

| Rate Action | | | | | | Annual Increase (Decrease) in Operating Income | | | | | | EDIT Impact | | | | | | Annual Increase (Decrease) in Operating Income Excluding EDIT | | |

| *2022 Filings:* | | | | | | | | | | | | | | | | | | | | |

| Annual formula rate mechanisms | | | | | | $ | 169,354 | | | | | $ | 33,249 | | | | | $ | 202,603 | |

| Rate case filings | | | | | | 5,938 | | | | | | 7,379 | | | | | | 13,317 | | |

| Other ratemaking activity | | | | | | (370) | | | | | | — | | | | | | (370) | | |

| Total 2022 Filings | | | | | | $ | 174,922 | | | | | $ | 40,628 | | | | | $ | 215,550 | |

| Annual formula rate mechanisms | | | | | | $ | 181,459 | | | | | $ | 39,306 | | | | | $ | 220,765 | |

| Rate case filings | | | | | | 5,119 | | | | | | 1,168 | | | | | | 6,287 | | |

| Total 2021 Filings | | | | | | $ | 185,701 | | | | | $ | 40,474 | | | | | $ | 226,175 | |

| Other ratemaking activity | | | | | | 353 | | | | | | — | | | | | | 353 | | |

| Total 2020 Filings | | | | | | $ | 160,153 | | | | | $ | — | | | | | $ | 160,153 | |

| Colorado-Kansas | | | | | | Rate Case | | | | | | Colorado | | | | | | $ | 7,554 | |

| Colorado-Kansas | | | | | | Rate Case | | | | | | Kansas | | | | | | 7,989 | | |

| | | | | | | | | | | | | | | | | | | $ | 144,453 | |

(2) On August 12, 2022, the Kentucky Public Service Commission approved a rate increase of $1.9 million effective October 2, 2022, subject to refund.

New rates were implemented on October 1, 2022.

(4) The Mississippi Public Service Commission (MPSC) approved an increase in operating income of $8.6 million for the SIR filing.

(5) The West Texas Cities approved a rate increase of $7.3 million.

New rates were implemented on October 1, 2022.

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

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

| *2022 Filings:* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Louisiana | | | | | | Louisiana (1) | | | | | | 12/2021 | | | | | | 17,650 | | | | | | (10,389) | | | | | | 7,261 | | | | | | 07/01/2022 | | |

We intend to achieve this vision by:

- operating our business exceptionally well

- 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.

Our core values include focusing on our employees and customers while conducting our business with honesty and integrity.

We continue to strengthen our culture through ongoing communications with our employees and enhanced employee training.

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

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

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

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

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

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

Table of Contents

electric generation customers, marketers and producers.

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

| | | | | | | 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% | | |

| | | | | | | Annual Increase (Decrease) to Operating Income For the Fiscal Year Ended September 30 | | | | | | | | | | | | | | |

| Rate Action | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| | | | | | | $ | 185,701 | | | | | $ | 160,153 | | | | | $ | 116,680 | |

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 | | |

| | | | | | | | | | | | | | | | | | | $ | 56,484 | |

(2) The Kentucky rate case filing also includes the $3.5 million related to the annual Kentucky pipeline replacement program.

New rates will be implemented on December 1, 2021.

The MPSC also approved a reduction in operating income of $5.6 million for the SRF filing, which includes $4.3 million related to the refund of excess deferred income taxes that will be offset by lower income tax expense.

(5) The West Texas Cities approved a rate increase of $0.2 million, which includes $3.3 million related to the refund of excess deferred income taxes that will be offset by lower income tax expense.

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

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

| *2019 Filings:* | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Louisiana | | | | | | LGS | | | | | | 12/2018 | | | | | | 7,124 | | | | | | 07/01/2019 | | |

| Mid-Tex | | | | | | Environs | | | | | | 12/2018 | | | | | | 2,435 | | | | | | 06/04/2019 | | |

| West Texas | | | | | | Environs | | | | | | 12/2018 | | | | | | 1,005 | | | | | | 06/04/2019 | | |

| Mid-Tex | | | | | | DARR | | | | | | 09/2018 | | | | | | 9,452 | | | | | | 06/01/2019 | | |

For the fiscal year ended September 30, [removed: 2021][added: 2022]

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: 2021,] [added: 2022,] was [removed: $12,737,499,573.][added: $16,491,263,629.]

As of November [removed: 5, 2021,] [added: 7, 2022,] the registrant had [removed: 132,425,817] [added: 140,900,576] 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: 9, 2022] [added: 8, 2023] are incorporated by reference into Part III of this report.

| [Glossary of Key [removed: Terms](#i6630617b9bc44580898f2a211346a55c_10)] [added: Terms](#ida4f7f98a70343ee8162371bd239b9cc_10)] | | | | | | [removed: [3](#i6630617b9bc44580898f2a211346a55c_10)] [added: [3](#ida4f7f98a70343ee8162371bd239b9cc_10)] | | |

| Item 1. | | | [removed: [Business](#i6630617b9bc44580898f2a211346a55c_16)] [added: [Business](#ida4f7f98a70343ee8162371bd239b9cc_16)] | | | [removed: [4](#i6630617b9bc44580898f2a211346a55c_16)] [added: [4](#ida4f7f98a70343ee8162371bd239b9cc_16)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i6630617b9bc44580898f2a211346a55c_19)] [added: Factors](#ida4f7f98a70343ee8162371bd239b9cc_19)] | | | [removed: [14](#i6630617b9bc44580898f2a211346a55c_19)] [added: [14](#ida4f7f98a70343ee8162371bd239b9cc_19)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i6630617b9bc44580898f2a211346a55c_22)] [added: Comments](#ida4f7f98a70343ee8162371bd239b9cc_22)] | | | [removed: [18](#i6630617b9bc44580898f2a211346a55c_22)] [added: [19](#ida4f7f98a70343ee8162371bd239b9cc_22)] | | |

| Item 2. | | | [removed: [Properties](#i6630617b9bc44580898f2a211346a55c_25)] [added: [Properties](#ida4f7f98a70343ee8162371bd239b9cc_25)] | | | [removed: [18](#i6630617b9bc44580898f2a211346a55c_25)] [added: [19](#ida4f7f98a70343ee8162371bd239b9cc_25)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i6630617b9bc44580898f2a211346a55c_28)] [added: Proceedings](#ida4f7f98a70343ee8162371bd239b9cc_28)] | | | [removed: [19](#i6630617b9bc44580898f2a211346a55c_28)] [added: [20](#ida4f7f98a70343ee8162371bd239b9cc_28)] | | |

| Item 4. | | | Mine Safety Disclosures | | | [removed: [19](#i6630617b9bc44580898f2a211346a55c_31)] [added: [20](#ida4f7f98a70343ee8162371bd239b9cc_31)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i6630617b9bc44580898f2a211346a55c_37)] [added: Securities](#ida4f7f98a70343ee8162371bd239b9cc_37)] | | | [removed: [20](#i6630617b9bc44580898f2a211346a55c_37)] [added: [20](#ida4f7f98a70343ee8162371bd239b9cc_37)] | | |

| Item 6. | | | [Selected Financial [removed: Data](#i6630617b9bc44580898f2a211346a55c_40)] [added: Data](#ida4f7f98a70343ee8162371bd239b9cc_40)] | | | [removed: [21](#i6630617b9bc44580898f2a211346a55c_40)] [added: [22](#ida4f7f98a70343ee8162371bd239b9cc_40)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i6630617b9bc44580898f2a211346a55c_73)] [added: Operations](#ida4f7f98a70343ee8162371bd239b9cc_76)] | | | [removed: [21](#i6630617b9bc44580898f2a211346a55c_43)] [added: [22](#ida4f7f98a70343ee8162371bd239b9cc_46)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i6630617b9bc44580898f2a211346a55c_76)] [added: Risk](#ida4f7f98a70343ee8162371bd239b9cc_79)] | | | [removed: [34](#i6630617b9bc44580898f2a211346a55c_76)] [added: [34](#ida4f7f98a70343ee8162371bd239b9cc_79)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i6630617b9bc44580898f2a211346a55c_79)] [added: Data](#ida4f7f98a70343ee8162371bd239b9cc_82)] | | | [removed: [35](#i6630617b9bc44580898f2a211346a55c_79)] [added: [35](#ida4f7f98a70343ee8162371bd239b9cc_82)] | | |

| Item 9. | | | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i6630617b9bc44580898f2a211346a55c_187)] [added: Disclosure](#ida4f7f98a70343ee8162371bd239b9cc_178)] | | | [removed: [85](#i6630617b9bc44580898f2a211346a55c_187)] [added: [85](#ida4f7f98a70343ee8162371bd239b9cc_178)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i6630617b9bc44580898f2a211346a55c_190)] [added: Procedures](#ida4f7f98a70343ee8162371bd239b9cc_181)] | | | [removed: [85](#i6630617b9bc44580898f2a211346a55c_190)] [added: [85](#ida4f7f98a70343ee8162371bd239b9cc_181)] | | |

| Item 9B. | | | [Other [removed: Information](#i6630617b9bc44580898f2a211346a55c_193)] [added: Information](#ida4f7f98a70343ee8162371bd239b9cc_184)] | | | [removed: [87](#i6630617b9bc44580898f2a211346a55c_193)] [added: [87](#ida4f7f98a70343ee8162371bd239b9cc_184)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i6630617b9bc44580898f2a211346a55c_199)] [added: Governance](#ida4f7f98a70343ee8162371bd239b9cc_190)] | | | [removed: [87](#i6630617b9bc44580898f2a211346a55c_199)] [added: [87](#ida4f7f98a70343ee8162371bd239b9cc_190)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i6630617b9bc44580898f2a211346a55c_202)] [added: Compensation](#ida4f7f98a70343ee8162371bd239b9cc_193)] | | | [removed: [88](#i6630617b9bc44580898f2a211346a55c_202)] [added: [88](#ida4f7f98a70343ee8162371bd239b9cc_193)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i6630617b9bc44580898f2a211346a55c_205)] [added: Matters](#ida4f7f98a70343ee8162371bd239b9cc_196)] | | | [removed: [88](#i6630617b9bc44580898f2a211346a55c_205)] [added: [88](#ida4f7f98a70343ee8162371bd239b9cc_196)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i6630617b9bc44580898f2a211346a55c_208)] [added: Independence](#ida4f7f98a70343ee8162371bd239b9cc_199)] | | | [removed: [88](#i6630617b9bc44580898f2a211346a55c_208)] [added: [88](#ida4f7f98a70343ee8162371bd239b9cc_199)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#i6630617b9bc44580898f2a211346a55c_211)] [added: Services](#ida4f7f98a70343ee8162371bd239b9cc_202)] | | | [removed: [88](#i6630617b9bc44580898f2a211346a55c_211)] [added: [88](#ida4f7f98a70343ee8162371bd239b9cc_202)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#i6630617b9bc44580898f2a211346a55c_226)] [added: Schedules](#ida4f7f98a70343ee8162371bd239b9cc_217)] | | | [removed: [88](#i6630617b9bc44580898f2a211346a55c_217)] [added: [88](#ida4f7f98a70343ee8162371bd239b9cc_208)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i6630617b9bc44580898f2a211346a55c_220)] [added: Summary](#ida4f7f98a70343ee8162371bd239b9cc_211)] | | | [removed: [92](#i6630617b9bc44580898f2a211346a55c_220)] [added: [93](#ida4f7f98a70343ee8162371bd239b9cc_211)] | | |

| SIP | | | System Integrity Program | | |

| SOFR | | | Secured Overnight Financing Rate | | |

Table of Contents

At September 30, [removed: 2021,] [added: 2022,] in our distribution segment, we owned an aggregate of [removed: 71,921] [added: 73,243] miles of underground distribution and transmission mains throughout our distribution systems.

Through our pipeline and storage segment we also owned [removed: 5,699] [added: 5,652] miles of gas transmission lines.

The following table summarizes certain information regarding our underground gas storage facilities at September 30, [removed: 2021:][added: 2022:]

The following table summarizes our contracted storage capacity at September 30, [removed: 2021:][added: 2022:]

| | | | | | | Mid-Tex Division | | | | | | [removed: 5,000,000] [added: 6,000,000] | | | | | | [removed: 190,000] [added: 230,000] | | |

| | | | | | | Mississippi Division | | | | | | [removed: 5,099,536] [added: 5,299,536] | | | | | | [removed: 164,764] [added: 202,764] | | |

| | | | | | | West Texas Division | | | | | | [removed: 5,500,000] [added: 5,000,000] | | | | | | [removed: 176,000] [added: 161,000] | | |

| *Total* | | | | | | | | | | | | [removed: 32,713,242] [added: 33,413,242] | | | | | | [removed: 1,082,814] [added: 1,145,814] | | |

| Total Contracted Storage Capacity | | | | | | | | | | | | [removed: 33,713,242] [added: 34,413,242] | | | | | | [removed: 1,130,314] [added: 1,193,314] | | |

Table of Contents

Table of Contents

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: 2021] [added: 2022] and [removed: 2020] [added: 2021] are listed below.

| | | | | | | Fiscal [removed: 2021] [added: 2022] | | | | | | Fiscal [removed: 2020] [added: 2021] | | |

| December 31 | | | | | | $ | [removed: 0.625] [added: 0.680] | | | | | $ | [removed: 0.575] [added: 0.625] | |

| March 31 | | | | | | [removed: 0.625] [added: 0.680] | | | | | | [removed: 0.575] [added: 0.625] | | |

| June 30 | | | | | | [removed: 0.625] [added: 0.680] | | | | | | [removed: 0.575] [added: 0.625] | | |

| September 30 | | | | | | [removed: 0.625] [added: 0.680] | | | | | | [removed: 0.575] [added: 0.625] | | |

As of October 31, [removed: 2021,] [added: 2022,] there were [removed: 10,590] [added: 10,052] holders of record of our common stock.

We sold no securities during fiscal [removed: 2021] [added: 2022] that were not registered under the Securities Act of 1933, as amended.

The graph and table below assume that $100.00 was invested on September 30, [removed: 2016] [added: 2017] in our common stock, the S&P 500 and the S&P 500 Utilities Industry Index ax, as well as a reinvestment of dividends paid on such investments throughout the period.

[removed: ][added: ]

| | | | [removed: 9/30/2016] [added: 9/30/2017] | | | | | | [removed: 9/30/2017] [added: 9/30/2018] | | | | | | [removed: 9/30/2018] [added: 9/30/2019] | | | | | | [removed: 9/30/2019] [added: 9/30/2020] | | | | | | [removed: 9/30/2020] [added: 9/30/2021] | | | | | | [removed: 9/30/2021] [added: 9/30/2022] | | |

The following table sets forth the number of securities authorized for issuance under our equity compensation plans at September 30, [removed: 2021.][added: 2022.]

| Total equity compensation plans approved by security holders | | | [removed: 944,962] [added: 696,744] | | | | | | — | | | | | | [removed: 1,054,190] [added: 874,481] | | |

(1)Comprised of a total of [removed: 328,369] [added: 301,403] time-lapse restricted stock units, [removed: 377,385] [added: 195,184] director share units and [removed: 239,208] [added: 200,157] performance-based restricted stock units at the target level of performance granted under our 1998 Long-Term Incentive Plan.

| | | | | | | $ | 2.72 | | | | | $ | 2.50 | |

| Atmos Energy Corporation | | | 100.00 | | | | | | 114.53 | | | | | | 141.78 | | | | | | 121.61 | | | | | | 115.14 | | | | | | 136.38 | | |

| S&P 500 Stock Index | | | 100.00 | | | | | | 117.91 | | | | | | 122.93 | | | | | | 141.55 | | | | | | 184.02 | | | | | | 155.55 | | |

| S&P 500 Utilities Stock Index | | | 100.00 | | | | | | 102.93 | | | | | | 130.82 | | | | | | 124.32 | | | | | | 138.01 | | | | | | 145.71 | | |

| 1998 Long-Term Incentive Plan | | | 696,744 | | | (1) | | | $ | — | | | | | 874,481 | | |

| Total | | | 696,744 | | | | | | $ | — | | | | | 874,481 | | |

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

Table of Contents

| 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 | | |

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

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

| [Report of independent registered public accounting [removed: firm](#i6630617b9bc44580898f2a211346a55c_82)] [added: firm](#ida4f7f98a70343ee8162371bd239b9cc_85) (PCAOB ID: 42)] | | | [removed: [36](#i6630617b9bc44580898f2a211346a55c_82)] [added: [36](#ida4f7f98a70343ee8162371bd239b9cc_85)] | | |

| [Consolidated balance sheets at September 30, [removed: 2021] [added: 2022] and [removed: 2020](#i6630617b9bc44580898f2a211346a55c_85)] [added: 2021](#ida4f7f98a70343ee8162371bd239b9cc_88)] | | | [removed: [38](#i6630617b9bc44580898f2a211346a55c_85)] [added: [38](#ida4f7f98a70343ee8162371bd239b9cc_88)] | | |

| [Consolidated statements of comprehensive income for the years ended September 30, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019](#i6630617b9bc44580898f2a211346a55c_91)] [added: 2020](#ida4f7f98a70343ee8162371bd239b9cc_91)] | | | [removed: [39](#i6630617b9bc44580898f2a211346a55c_91)] [added: [39](#ida4f7f98a70343ee8162371bd239b9cc_91)] | | |

| [Consolidated statements of shareholders' equity for the years ended September 30, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019](#i6630617b9bc44580898f2a211346a55c_97)] [added: 2020](#ida4f7f98a70343ee8162371bd239b9cc_94)] | | | [removed: [40](#i6630617b9bc44580898f2a211346a55c_97)] [added: [40](#ida4f7f98a70343ee8162371bd239b9cc_94)] | | |

| [Consolidated statements of cash flow for the years ended September 30, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019](#i6630617b9bc44580898f2a211346a55c_103)] [added: 2020](#ida4f7f98a70343ee8162371bd239b9cc_97)] | | | [removed: [41](#i6630617b9bc44580898f2a211346a55c_103)] [added: [41](#ida4f7f98a70343ee8162371bd239b9cc_97)] | | |

| [Notes to consolidated financial [removed: statements](#i6630617b9bc44580898f2a211346a55c_106)] [added: statements](#ida4f7f98a70343ee8162371bd239b9cc_100)] | | | [removed: [42](#i6630617b9bc44580898f2a211346a55c_106)] [added: [42](#ida4f7f98a70343ee8162371bd239b9cc_100)] | | |

We have audited the accompanying consolidated balance sheets of Atmos Energy Corporation (the [removed: “Company“)] [added: Company)] as of September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of comprehensive income, [removed: shareholders‘ equity,] [added: shareholders’ equity] and cash [removed: flows,] [added: flows] for each of the three years in the period ended September 30, [removed: 2021,] [added: 2022,] and the related notes (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 at September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended September 30, [removed: 2021,] [added: 2022,] in conformity with [removed: US] [added: U.S.] generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: Company's] [added: Company’s] internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November [removed: 12, 2021] [added: 14, 2022] expressed an unqualified opinion thereon.

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

| *Description of the Matter* | | | 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: 2021,] [added: 2022,] the Company capitalized approximately [removed: $2.0] [added: $2.4] 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 financial statements. | | |

| | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| Property, plant and equipment | | | $ | [removed: 17,258,547] [added: 19,402,271] | | | | | $ | [removed: 15,539,166] [added: 17,258,547] | |

| Construction in progress | | | [removed: 626,551] [added: 835,868] | | | | | | [removed: 418,055] [added: 626,551] | | |

| Less accumulated depreciation and amortization | | | [removed: 2,821,128] [added: 2,997,900] | | | | | | [removed: 2,601,874] [added: 2,821,128] | | |

| Net property, plant and equipment | | | [removed: 15,063,970] [added: 17,240,239] | | | | | | [removed: 13,355,347] [added: 15,063,970] | | |

| Cash and cash equivalents | | | [removed: 116,723] [added: 51,554] | | | | | | [removed: 20,808] [added: 116,723] | | |

| Accounts receivable, less allowance for uncollectible accounts of [removed: $64,471] [added: $49,993] in [removed: 2021] [added: 2022] and [removed: $29,949] [added: $64,471] in [removed: 2020] [added: 2021] | | | [removed: 342,967] [added: 363,708] | | | | | | [removed: 230,595] [added: 342,967] | | |

| Gas stored underground | | | [removed: 178,116] [added: 357,941] | | | | | | [removed: 111,950] [added: 178,116] | | |

| Other current assets (See Note 9) | | | [removed: 2,200,909] [added: 2,274,490] | | | | | | [removed: 107,905] [added: 2,200,909] | | |

| Total current assets | | | [removed: 2,838,715] [added: 3,047,693] | | | | | | [removed: 471,258] [added: 2,838,715] | | |

| Deferred charges and other assets (See Note 9) | | | [removed: 974,720] [added: 1,173,800] | | | | | | [removed: 801,170] [added: 974,720] | | |

| Common stock, no par value (stated at $0.005 per share); 200,000,000 shares authorized; issued and outstanding: [removed: 2021] [added: 2022] — [removed: 132,419,754] [added: 140,896,598] shares; [removed: 2020] [added: 2021] — [removed: 125,882,477] [added: 132,419,754] shares | | | $ | [removed: 662] [added: 704] | | | | | $ | [removed: 629] [added: 662] | |

| Additional paid-in capital | | | [removed: 5,023,751] [added: 5,838,118] | | | | | | [removed: 4,377,149] [added: 5,023,751] | | |

| Accumulated other comprehensive income [removed: (loss)] | | | [removed: 69,803] [added: 369,112] | | | | | | [removed: (57,589)] [added: 69,803] | | |

| Retained earnings | | | [removed: 2,812,673] [added: 3,211,157] | | | | | | [removed: 2,471,014] [added: 2,812,673] | | |

| Shareholders’ equity | | | [removed: 7,906,889] [added: 9,419,091] | | | | | | [removed: 6,791,203] [added: 7,906,889] | | |

| Long-term debt | | | [removed: 4,930,205] [added: 5,760,647] | | | | | | [removed: 4,531,779] [added: 4,930,205] | | |

| Total capitalization | | | [removed: 12,837,094] [added: 15,179,738] | | | | | | [removed: 11,322,982] [added: 12,837,094] | | |

| Accounts payable and accrued liabilities | | | [removed: 423,222] [added: 496,019] | | | | | | [removed: 235,775] [added: 423,222] | | |

| Other current liabilities | | | [removed: 686,681] [added: 720,157] | | | | | | [removed: 546,461] [added: 686,681] | | |

| Current maturities of long-term debt | | | [removed: 2,400,452] [added: 2,201,457] | | | | | | [removed: 165] [added: 2,400,452] | | |

| Total current liabilities | | | [removed: 3,510,355] [added: 3,602,600] | | | | | | [removed: 782,401] [added: 3,510,355] | | |

| Deferred income taxes | | | [removed: 1,705,809] [added: 1,999,505] | | | | | | [removed: 1,456,569] [added: 1,705,809] | | |

| Regulatory excess deferred taxes (See Note 14) | | | [removed: 549,227] [added: 385,213] | | | | | | [removed: 697,764] [added: 549,227] | | |

| Regulatory cost of removal obligation | | | [removed: 468,688] [added: 487,631] | | | | | | [removed: 457,188] [added: 468,688] | | |

| Deferred credits and other liabilities | | | [removed: 537,489] [added: 538,302] | | | | | | [removed: 642,128] [added: 537,489] | | |

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Distribution segment | | | $ | [removed: 3,241,973] [added: 4,035,194] | | | | | $ | [removed: 2,626,993] [added: 3,241,973] | | | | | $ | [removed: 2,745,461] [added: 2,626,993] | |

| Pipeline and storage segment | | | [removed: 637,347] [added: 693,660] | | | | | | [removed: 609,339] [added: 637,347] | | | | | | [removed: 567,024] [added: 609,339] | | |

November 14, 2022

| | | | 2022 | | | | | | 2021 | | |

| | | | 20,238,139 | | | | | | 17,885,098 | | |

| | | | $ | 22,192,989 | | | | | $ | 19,608,662 | |

| Short-term debt | | | 184,967 | | | | | | — | | |

| | | | $ | 22,192,989 | | | | | $ | 19,608,662 | |

| Net income | | | $ | 774,398 | | | | | $ | 665,563 | | | | | $ | 601,443 | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 774,398 | | | | | | 774,398 | | |

| Other comprehensive income | | | — | | | | | | — | | | | | | — | | | | | | 299,309 | | | | | | — | | | | | | 299,309 | | |

| Public offering | | | 7,907,883 | | | | | | 40 | | | | | | 776,765 | | | | | | — | | | | | | — | | | | | | 776,805 | | |

| 1998 Long-term incentive plan | | | 427,929 | | | | | | 2 | | | | | | 2,396 | | | | | | — | | | | | | — | | | | | | 2,398 | | |

| Balance, September 30, 2022 | | | 140,896,598 | | | | | | $ | 704 | | | | | $ | 5,838,118 | | | | | $ | 369,112 | | | | | $ | 3,211,157 | | | | | $ | 9,419,091 | |

| Net income | | | $ | 774,398 | | | | | $ | 665,563 | | | | | $ | 601,443 | |

| Other | | | (1,735) | | | | | | — | | | | | | — | | |

| | | | 2022 | | | | | | 2021 | | |

| | | | $ | 2,605,372 | | | | | $ | 2,521,441 | |

| | | | $ | 1,358,907 | | | | | $ | 1,424,195 | |

certain the option will be exercised.

In November 2021, the Financial Accounting Standards Board (FASB) issued guidance which will require disclosure about government assistance in the notes to the financial statements.

The amendment requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy, including information about the nature of the transactions and the related accounting policy used to account for the transactions, the line items on the balance sheet and income statement that are affected by the transactions and the significant terms and conditions of the transactions, including commitments and contingencies.

The amendment was effective for us beginning October 1, 2022; however, we elected to adopt this amendment during the first quarter of fiscal 2022 as permitted by the guidance.

As discussed in Note 7, on March 31, 2022, we amended and restated our $1.5 billion credit facility and our $900 million unsecured revolving credit agreement which, among other things, included amending the interest rate provisions applicable to borrowings under this agreement to utilize the secured overnight financing rate as the reference rate, rather than LIBOR.

In addition, we have evaluated the temporary expedients and options available under this guidance and identified the financial instruments to which the expedients could be applied, if deemed necessary.

As of September 30, 2022, we have not applied any expedients or options available under these Accounting Standards Updates.

| | | | Year Ended September 30, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Operating revenues from external parties | | | $ | 4,031,936 | | | | | $ | 169,726 | | | | | | | | | | | $ | — | | | | | $ | 4,201,662 | |

| Intersegment revenues | | | 3,258 | | | | | | 523,934 | | | | | | | | | | | | (527,192) | | | | | | — | | |

| Total operating revenues | | | 4,035,194 | | | | | | 693,660 | | | | | | | | | | | | (527,192) | | | | | | 4,201,662 | | |

| Purchased gas cost | | | 2,210,302 | | | | | | (1,583) | | | | | | | | | | | | (526,063) | | | | | | 1,682,656 | | |

| Operation and maintenance expense | | | 518,443 | | | | | | 192,847 | | | | | | | | | | | | (1,129) | | | | | | 710,161 | | |

| Depreciation and amortization expense | | | 387,858 | | | | | | 147,797 | | | | | | | | | | | | — | | | | | | 535,655 | | |

| Taxes, other than income | | | 314,046 | | | | | | 38,162 | | | | | | | | | | | | — | | | | | | 352,208 | | |

| Operating income | | | 604,545 | | | | | | 316,437 | | | | | | | | | | | | — | | | | | | 920,982 | | |

| Interest charges | | | 49,921 | | | | | | 52,890 | | | | | | | | | | | | — | | | | | | 102,811 | | |

| Income before income taxes | | | 561,570 | | | | | | 290,338 | | | | | | | | | | | | — | | | | | | 851,908 | | |

| Income tax expense | | | 39,593 | | | | | | 37,917 | | | | | | | | | | | | — | | | | | | 77,510 | | |

| Net income | | | $ | 521,977 | | | | | $ | 252,421 | | | | | | | | | | | $ | — | | | | | $ | 774,398 | |

| Capital expenditures | | | $ | 1,675,798 | | | | | $ | 768,622 | | | | | | | | | | | $ | — | | | | | $ | 2,444,420 | |

| | | | September 30, 2022 | | | | | | | | | | | | | | | | | | | | |

| Property, plant and equipment, net | | | $ | 12,723,532 | | | | | $ | 4,516,707 | | | | | $ | — | | | | | $ | 17,240,239 | |

Table of Contents

November 12, 2021

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

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

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

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

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

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 511,406 | | | | | | 511,406 | | |

| Other comprehensive loss | | | — | | | | | | — | | | | | | — | | | | | | (22,726) | | | | | | — | | | | | | (22,726) | | |

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

| Public offering | | | 7,574,111 | | | | | | 38 | | | | | | 694,065 | | | | | | — | | | | | | — | | | | | | 694,103 | | |

| 1998 Long-term incentive plan | | | 299,612 | | | | | | 2 | | | | | | 2,946 | | | | | | — | | | | | | — | | | | | | 2,948 | | |

| Proceeds from the sale of discontinued operations | | | — | | | | | | — | | | | | | 4,000 | | |

| | | | $ | 2,521,441 | | | | | $ | 414,641 | |

| | | | $ | 1,424,195 | | | | | $ | 1,367,013 | |

Purchased gas cost adjustment mechanisms provide gas distribution companies a method of recovering purchased gas costs on an ongoing basis without filing a rate case to address all of their non-gas costs.

As of September 30, 2021 and 2020, we had asset retirement obligations of $18.4 million and $20.3 million.

Additionally, we had $12.8 million and $14.4 million of asset retirement costs recorded as a component of property, plant and equipment that will be depreciated over the remaining life of the underlying associated assets.

Effective October 1, 2020, we adopted new accounting guidance that requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model.

Under this model, we estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument.

We adopted the new guidance using a modified retrospective method.

The adoption of this standard did not have a material impact on our financial position, results of operations and cash flows and no adjustments were made to October 1, 2020 opening balances as a result of this adoption.

As required under the modified retrospective method of adoption, results for the reporting period beginning after October 1, 2020 are presented under Accounting Standards Codification (ASC) 326, while prior period amounts are not adjusted.

See Notes 5 and 16 to the consolidated financial statements for further discussion of implementation of the standard.

*Accounting pronouncements that will be effective after fiscal 2021*

The amendments can be elected immediately, as of March 12, 2020, through December 31, 2022.

As we implement the cessation of LIBOR into our current contracts and hedging relationships, we expect to elect the optional guidance to ease the potential burden in accounting.

| Operating revenues from external parties | | | $ | 2,742,824 | | | | | $ | 159,024 | | | | | $ | — | | | | | $ | 2,901,848 | |

| Intersegment revenues | | | 2,637 | | | | | | 408,000 | | | | | | (410,637) | | | | | | — | | |

| Total operating revenues | | | 2,745,461 | | | | | | 567,024 | | | | | | (410,637) | | | | | | 2,901,848 | | |

| Purchased gas cost | | | 1,268,591 | | | | | | (360) | | | | | | (409,394) | | | | | | 858,837 | | |

| Operation and maintenance expense | | | 480,222 | | | | | | 151,329 | | | | | | (1,243) | | | | | | 630,308 | | |

| Depreciation and amortization expense | | | 283,697 | | | | | | 107,759 | | | | | | — | | | | | | 391,456 | | |

| Taxes, other than income | | | 242,179 | | | | | | 33,010 | | | | | | — | | | | | | 275,189 | | |

| Operating income | | | 470,772 | | | | | | 275,286 | | | | | | — | | | | | | 746,058 | | |

| Interest charges | | | 60,031 | | | | | | 43,122 | | | | | | — | | | | | | 103,153 | | |

| Income before income taxes | | | 416,982 | | | | | | 233,327 | | | | | | — | | | | | | 650,309 | | |

| Income tax expense | | | 88,168 | | | | | | 50,735 | | | | | | — | | | | | | 138,903 | | |

| Net income | | | $ | 328,814 | | | | | $ | 182,592 | | | | | $ | — | | | | | $ | 511,406 | |

| Capital expenditures | | | $ | 1,274,613 | | | | | $ | 418,864 | | | | | $ | — | | | | | $ | 1,693,477 | |

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: 2021] [added: 2022] 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: 2021,] [added: 2022,] 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.

We have audited Atmos Energy Corporation’s internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] 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: 2021,] [added: 2022,] 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: 2021] [added: 2022] consolidated financial statements of the Company and our report dated November [removed: 12, 2021] [added: 14, 2022] 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: 2021] [added: 2022] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

| November 14, 2022 | | | | | | | | |

November 14, 2022

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

November 12, 2021

Information regarding directors is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February [removed: 9, 2022.][added: 8, 2023.]

The following table sets forth certain information as of September 30, [removed: 2021,] [added: 2022,] regarding the executive officers of the Company.

| John K. Akers | | | | | | [removed: 58] [added: 59] | | | | | | [removed: 30] [added: 31] | | | | | | President, Chief Executive Officer and Director | | |

| Christopher T. Forsythe | | | | | | [removed: 50] [added: 51] | | | | | | [removed: 18] [added: 19] | | | | | | Senior Vice President and Chief Financial Officer | | |

| [removed: David J. Park] [added: John S. McDill] | | | | | | [removed: 50] [added: 58] | | | | | | [removed: 27] [added: 35] | | | | | | Senior Vice President, Utility Operations | | |

| Karen E. Hartsfield | | | | | | [removed: 51] [added: 52] | | | | | | [removed: 6] [added: 7] | | | | | | Senior Vice President, General Counsel and Corporate Secretary | | |

| John M. Robbins | | | | | | [removed: 51] [added: 52] | | | | | | [removed: 8] [added: 9] | | | | | | Senior Vice President, Human Resources | | |

[removed: Park] [added: McDill] was named Senior Vice [removed: President of] [added: President,] Utility Operations, effective [removed: January] [added: October] 1, [removed: 2017.][added: 2021.]

In this role, Mr. [removed: Park] [added: McDill] is responsible for the operations of Atmos [removed: Energy’s] [added: Energy's] six utility divisions as well as gas supply.

Mr. [removed: Park's] [added: McDill's] years of service include [removed: 10 years at] [added: that with Mississippi Valley Gas,] a company acquired by Atmos Energy in [removed: 2004.][added: 2002.]

Directors is incorporated herein by reference to the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders on February [removed: 9, 2022.][added: 8, 2023.]

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

John S.

Prior to this promotion, Mr. McDill served as Vice President, Pipeline Safety from May 2012 to September 2021.

Mr. McDill also served as Vice President of Operations in our Mississippi Division.

David J.

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

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

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: 9, 2022,] [added: 8, 2023,] under the captions "Director Compensation," "Compensation Discussion and Analysis," "Other Executive Compensation Matters" and "Named Executive Officer Compensation."

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: 9, 2022,] [added: 8, 2023,] 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.

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: 9, 2022,] [added: 8, 2023,] under the heading "Corporate Governance and Other Board Matters," and "Proposal One – Election of Directors."

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: 9, 2022,] [added: 8, 2023,] under the heading "Proposal Two – Ratification of Appointment of Independent Registered Public Accounting Firm."

| 4.1(b) | | | | | | [removed: [Description] [added: Description] of Registrant's [removed: Securities](https://www.sec.gov/Archives/edgar/data/731802/000073180221000040/ato2021930ex-41b.htm)] [added: Securities] | | | | | | [added: [Exhibit 4.1(b) to Form 10-K for fiscal year ended September 30, 2021 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180221000040/ato2021930ex-41b.htm)] | | |

| [removed: 10.1] [added: 10.1(a)] | | | | | | Revolving Credit Agreement, dated as of March 31, 2021, among Atmos Energy Corporation, Crédit Agricole Corporate and Investment Bank, as the Administrative Agent, the agents, arrangers and bookrunners named therein, and the lenders named therein | | | | | | [Exhibit 10.1 to Form 8-K dated March 31, 2021 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/0000731802/000119312521104000/d143871dex101.htm) | | |

| [removed: 10.2] [added: 10.2(a)] | | | | | | Revolving Credit Agreement, dated as of March 31, 2021, among Atmos Energy Corporation, Crédit Agricole Corporate and Investment Bank, as the Administrative Agent, the agents, arrangers and bookrunners named therein, and the lenders named therein | | | | | | [Exhibit 10.2 to Form 8-K dated March 31, 2021 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/0000731802/000119312521104000/d143871dex102.htm) | | |

| [removed: 10.3] [added: 10.1(b)] | | | | | | [removed: Term Loan] [added: First Amendment to Revolving Credit] Agreement, dated as of [removed: April 9, 2020,] [added: March 31, 2022,] among Atmos Energy Corporation, Credit Agricole Corporate and Investment Bank, as the Administrative Agent, [removed: Canadian Imperial Bank of Commerce, New York Branch, as Syndication Agent, Credit Agricole Corporate and Investment Bank and Canadian Imperial Bank of Commerce, New York Branch, as Joint Lead Arrangers] [added: the agents, arrangers] and [removed: Joint-Bookrunners,] [added: bookrunners named therein,] and the lenders named therein | | | | | | [Exhibit [removed: 10.1] [added: 10.2] to Form 8-K dated April [removed: 13, 2020] [added: 1, 2022] (File No. [removed: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312520105377/d898305dex101.htm)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312522093660/d279855dex102.htm)] | | |

| [removed: 10.4(a)] [added: 10.3(a)] | | | | | | Equity Distribution Agreement, dated as of February 12, 2020, among Atmos Energy Corporation and the Managers and Forward Purchasers named in Schedule A thereto | | | | | | [Exhibit 1.1 to Form 8-K dated February 12, 2020 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312520032442/d884844dex11.htm) | | |

| [removed: 10.4(b)] [added: 10.3(b)] | | | | | | Form of Master Forward Sale Confirmation | | | | | | [Exhibit 1.2 to Form 8-K dated February 12, 2020 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312520032442/d884844dex12.htm) | | |

| [removed: 10.5(a)] [added: 10.4(a)] | | | | | | Equity Distribution Agreement, dated as of June 29, 2021, among Atmos Energy Corporation and the Managers and Forward Purchasers named in Schedule A thereto | | | | | | [Exhibit 1.1 to Form 8-K dated June 29, 2021 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/0000731802/000119312521203514/d188387dex11.htm) | | |

| [removed: 10.5(b)] [added: 10.4(b)] | | | | | | Form of Master Forward Sale Confirmation | | | | | | [Exhibit 1.2 to Form 8-K dated June 29, 2021 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/0000731802/000119312521203514/d188387dex12.htm) | | |

| 10.11* | | | | | | Atmos Energy Corporation Account Balance Supplemental Executive Retirement Plan (As Amended and Restated, Effective as of January 1, [removed: 2016)] [added: 2022)] | | | | | | [Exhibit [removed: 10.8] [added: 10.1] to Form [removed: 10-K for fiscal year ended September 30, 2016] [added: 10-Q dated December 31, 2021] (File No. [removed: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180216000066/ato20160930ex-108.htm)] [added: 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180222000008/ato20211231ex-101.htm)] | | |

| 10.14(a)* | | | | | | [removed: Atmos] [added: [Atmos] Energy Corporation 1998 Long-Term Incentive Plan (as amended and restated [removed: November 6, 2019)] [added: February 3, 2021)](https://www.sec.gov/Archives/edgar/data/731802/000073180222000037/ato20220930ex-1014a.htm)] | | | | | | [removed: [Exhibit 10.11(a) to Form 10-K for fiscal year ended September 30, 2019 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000073180219000037/ato2019930ex-1011a.htm)] | | |

| 21 | | | | | | [Subsidiaries of the [removed: registrant](https://www.sec.gov/Archives/edgar/data/731802/000073180221000040/ato2021930ex-21.htm)] [added: registrant](https://www.sec.gov/Archives/edgar/data/731802/000073180222000037/ato20220930ex-21.htm)] | | | | | | | | |

| 23.1 | | | | | | [Consent of independent registered public accounting firm, Ernst & Young [removed: LLP](https://www.sec.gov/Archives/edgar/data/731802/000073180221000040/ato2021930ex-231.htm)] [added: LLP](https://www.sec.gov/Archives/edgar/data/731802/000073180222000037/ato20220930ex-231.htm)] | | | | | | | | |

| 24 | | | | | | Power of Attorney | | | | | | Signature page of Form 10-K for fiscal year ended September 30, [removed: 2021] [added: 2022] | | |

| 31 | | | | | | [Rule 13a-14(a)/15d-14(a) [removed: Certifications](https://www.sec.gov/Archives/edgar/data/731802/000073180221000040/ato2021930ex-31.htm)] [added: Certifications](https://www.sec.gov/Archives/edgar/data/731802/000073180222000037/ato20220930ex-31.htm)] | | | | | | | | |

| 32 | | | | | | [Section 1350 [removed: Certifications](https://www.sec.gov/Archives/edgar/data/731802/000073180221000040/ato2021930ex-32.htm)] [added: Certifications](https://www.sec.gov/Archives/edgar/data/731802/000073180222000037/ato20220930ex-32.htm)] | | | | | | | | |

| 4.6(ff) | | | | | | Officers' Certificate dated January 14, 2022 | | | | | | [Exhibit 4.1 to Form 8-K dated January 14, 2022 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312522009852/d290117dex41.htm) | | |

| 4.6(gg) | | | | | | Global Security for the 2.625% Senior Notes due 2029 | | | | | | [Exhibit 4.2 to Form 8-K dated January 14, 2022 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312522009852/d290117dex42.htm) | | |

| 4.6(hh) | | | | | | Officers' Certificate dated October 3, 2022 | | | | | | [Exhibit 4.1 to Form 8-K dated October 3, 2022 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312522256711/d394732dex41.htm) | | |

| 4.6(ii) | | | | | | Global Security for the 5.450% Senior Notes due 2032 | | | | | | [Exhibit 4.2 to Form 8-K dated October 3, 2022 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312522256711/d394732dex42.htm) | | |

| 4.6(jj) | | | | | | Global Security for the 5.750% Senior Notes due 2052 | | | | | | [Exhibit 4.3 to Form 8-K dated October 3, 2022 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312522256711/d394732dex43.htm) | | |

| 10.2(b) | | | | | | First Amendment to Revolving Credit Agreement, dated as of March 31, 2022, among Atmos Energy Corporation, Credit Agricole Corporate and Investment Bank, as the Administrative Agent, the agents, arrangers and bookrunners named therein, and the lenders named therein | | | | | | [Exhibit 10.1 to Form 8-K dated April 1, 2022 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312522093660/d279855dex101.htm) | | |

| 10.5(a) | | | | | | Equity Distribution Agreement, dated as of March 23, 2022, among Atmos Energy Corporation and the Managers and Forward Purchases named in Schedule A thereto | | | | | | [Exhibit 1.1 to Form 8-K dated March 23, 2022 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312522082801/d337834dex11.htm) | | |

| 10.5(b) | | | | | | Form of Master Forward Sale Confirmation | | | | | | [Exhibit 1.2 to Form 8-K dated March 23, 2022 (File No. 1-10042)](http://www.sec.gov/Archives/edgar/data/731802/000119312522082801/d337834dex12.htm) | | |

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

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

Date: November [removed: 12, 2021][added: 14, 2022]

| /s/ KIM R. COCKLIN | | | | | | Chairman of the Board | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ JOHN K. AKERS | | | | | | President, Chief Executive Officer and Director | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ CHRISTOPHER T. FORSYTHE | | | | | | Senior Vice President and Chief Financial Officer | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ RICHARD M. THOMAS | | | | | | Vice President and Controller (Principal Accounting Officer) | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ KELLY H. COMPTON | | | | | | Director | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ SEAN DONOHUE | | | | | | Director | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ RAFAEL G. GARZA | | | | | | Director | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ RICHARD K. GORDON | | | | | | Director | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ NANCY K. QUINN | | | | | | Director | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ RICHARD A. SAMPSON | | | | | | Director | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ DIANA J. WALTERS | | | | | | Director | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ FRANK YOHO | | | | | | Director | | | | | | November [removed: 12, 2021] [added: 14, 2022] | | |

| /s/ JOHN C. ALE | | | | | | Director | | | | | | November 14, 2022 | | |

| John C. Ale | | | | | | | | | | | | | | |

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

| /s/ ROBERT W. BEST | | | | | | Director | | | | | | November 12, 2021 | | |

| Robert W. Best | | | | | | | | | | | | | | |

| /s/ ROBERT C. GRABLE | | | | | | Director | | | | | | November 12, 2021 | | |

| Robert C. Grable | | | | | | | | | | | | | | |

| /s/ STEPHEN R. SPRINGER | | | | | | Director | | | | | | November 12, 2021 | | |

| Stephen R. Springer | | | | | | | | | | | | | | |

| /s/ RICHARD WARE II | | | | | | Director | | | | | | November 12, 2021 | | |

| Richard Ware II | | | | | | | | | | | | | | |