Atmos Energy 10-Q 2025-12-31

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

or

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-10042

Atmos Energy Corporation

(Exact name of registrant as specified in its charter)

Texas			and						Virginia						75-1743247
(State or other jurisdiction of incorporation or organization)															(IRS employer identification no.)
1800 Three Lincoln Centre
5430 LBJ Freeway
Dallas						Texas									75240
(Address of principal executive offices)															(Zip code)

(972) 934-9227

(Registrant’s telephone number, including area code)

Title of each class						Trading Symbol			Name of each exchange on which registered
Common stock			No Par Value			ATO			New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer			þ			Accelerated filer			¨			Non-accelerated filer			¨			Smaller reporting company			☐			Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No þ

Number of shares outstanding of each of the issuer’s classes of common stock, as of January 30, 2026.

Class									Shares Outstanding
Common stock			No Par Value						165,438,946

GLOSSARY OF KEY TERMS

AEC			Atmos Energy Corporation
AEK			Atmos Energy Kansas Securitization I, LLC
AOCI			Accumulated other comprehensive income
ARM			Annual Rate Mechanism
ASC			Accounting Standards Codification
Bcf			Billion cubic feet
DARR			Dallas Annual Rate Review
FASB			Financial Accounting Standards Board
GAAP			Generally Accepted Accounting Principles
GRIP			Gas Reliability Infrastructure Program
GSRS			Gas System Reliability Surcharge
KCC			Kansas Corporation Commission
Mcf			Thousand cubic feet
MMcf			Million cubic feet
Moody’s			Moody’s Investors Services, Inc.
PRP			Pipeline Replacement Program
RRC			Railroad Commission of Texas
RRM			Rate Review Mechanism
RSC			Rate Stabilization Clause
S&P			Standard & Poor’s Corporation
SAVE			Steps to Advance Virginia Energy
SEC			United States Securities and Exchange Commission
Securitized Utility Tariff Bonds			Series 2023-A Senior Secured Securitized Utility Tariff Bonds
Securitized Utility Tariff Property			As defined in the financing order issued by the KCC in October 2022
SIP			System Integrity Program
SIR			System Integrity Rider
SOFR			Secured Overnight Financing Rate
SRF			Stable Rate Filing
SSIR			System Safety and Integrity Rider
TCJA			Tax Cuts and Jobs Act of 2017
WNA			Weather Normalization Adjustment

PART I. FINANCIAL INFORMATION

ATMOS ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

			December 31, 2025						September 30, 2025
			(Unaudited)
			(In thousands, except share data)
ASSETS
Property, plant and equipment			$	30,322,427					$	29,264,136
Less accumulated depreciation and amortization			4,054,556						3,971,146
Net property, plant and equipment			26,267,871						25,292,990
Current assets
Cash and cash equivalents			367,023						202,687
Restricted cash and cash equivalents			4,488						1,116
Cash and cash equivalents and restricted cash and cash equivalents			371,511						203,803
Accounts receivable, net			731,131						375,509
Gas stored underground			159,529						171,756
Other current assets			373,652						301,627
Total current assets			1,635,823						1,052,695
Securitized intangible asset, net (See Note 9)			72,798						75,127
Goodwill			731,257						731,257
Deferred charges and other assets			1,090,646						1,097,453
			$	29,798,395					$	28,249,522
CAPITALIZATION AND LIABILITIES
Shareholders’ equity
Common stock, no par value (stated at $0.005 per share); 200,000,000 shares authorized; issued and outstanding: December 31, 2025 — 165,434,477 shares; September 30, 2025 — 161,568,384 shares			$	827					$	808
Additional paid-in capital			8,707,686						8,221,455
Accumulated other comprehensive income			470,210						475,015
Retained earnings			5,104,169						4,861,612
Shareholders’ equity			14,282,892						13,558,890
Long-term debt, net			9,553,625						8,907,169
Securitized long-term debt (See Note 9)			68,236						68,236
Total capitalization			23,904,753						22,534,295
Current liabilities
Accounts payable and accrued liabilities			616,867						506,516
Other current liabilities			819,147						835,557
Current maturities of long-term debt			2,250						11,775
Current maturities of securitized long-term debt (See Note 9)			8,767						8,767
Total current liabilities			1,447,031						1,362,615
Deferred income taxes			3,028,313						2,918,347
Regulatory excess deferred taxes			106,099						117,482
Regulatory cost of removal obligation			520,047						532,461
Deferred credits and other liabilities			792,152						784,322
			$	29,798,395					$	28,249,522

See accompanying notes to condensed consolidated financial statements.

ATMOS ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

			Three Months Ended December 31
			2025						2024
			(Unaudited) (In thousands, except per share data)
Operating revenues
Distribution segment			$	1,258,826					$	1,109,335
Pipeline and storage segment			286,633						255,390
Intersegment eliminations			(202,874)						(188,726)
Total operating revenues			1,342,585						1,175,999
Purchased gas cost
Distribution segment			497,036						422,570
Pipeline and storage segment			1,567						(58)
Intersegment eliminations			(202,604)						(188,464)
Total purchased gas cost			295,999						234,048
Operation and maintenance expense			229,810						207,044
Depreciation and amortization expense			194,645						180,533
Taxes, other than income			107,367						94,894
Operating income			514,764						459,480
Other non-operating income			22,231						24,634
Interest charges			33,413						52,925
Income before income taxes			503,582						431,189
Income tax expense			100,618						79,331
Net income			$	402,964					$	351,858
Basic net income per share			$	2.48					$	2.25
Diluted net income per share			$	2.44					$	2.23
Cash dividends per share			$	1.00					$	0.87
Basic weighted average shares outstanding			162,727						156,301
Diluted weighted average shares outstanding			164,871						157,824
Net income			$	402,964					$	351,858
Other comprehensive income (loss), net of tax
Net unrealized holding gains (losses) on available-for-sale securities, net of tax of $0 and $(42)			1						(138)
Cash flow hedges:
Amortization and unrealized gains (losses) on interest rate agreements, net of tax of $(1,338) and $3,492			(4,806)						16,561
Total other comprehensive income (loss)			(4,805)						16,423
Total comprehensive income			$	398,159					$	368,281

See accompanying notes to condensed consolidated financial statements.

ATMOS ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

			Three Months Ended December 31
			2025						2024
			(Unaudited) (In thousands)
Cash Flows From Operating Activities
Net income			$	402,964					$	351,858
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense			194,645						180,533
Deferred income taxes			93,044						71,107
Other			(23,292)						(19,279)
Net assets / liabilities from risk management activities			6,968						1,891

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INTRODUCTION

The following discussion should be read in conjunction with the condensed consolidated financial statements in this Quarterly Report on Form 10-Q and Management’s Discussion and Analysis in our Annual Report on Form 10-K for the year ended September 30, 2025.

Cautionary Statement for the Purposes of the Safe Harbor under the Private Securities Litigation Reform Act of 1995

The statements contained in this Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this Report are forward-looking statements made in good faith by us and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this Report, or any other of our documents or oral presentations, the words “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “goal”, “intend”, “objective”, “plan”, “projection”, “seek”, “strategy”, or similar words are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements relating to our strategy, operations, markets, services, rates, recovery of costs, availability of gas supply, and other factors. 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; 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; failure to attract and retain a qualified workforce; natural disasters, adverse weather, 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; failure of technology that affects the Company's business operations; 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; the impact of new cybersecurity compliance requirements; adverse weather conditions; the impact of legislation to reduce or eliminate greenhouse gas emissions or fossil fuels; 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. Accordingly, while we believe these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. Further, we undertake no obligation to update or revise any of our forward-looking statements whether as a result of new information, future events or otherwise.

OVERVIEW

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

We manage and review our consolidated operations through the following reportable segments:

• The distribution segment is comprised of our regulated natural gas distribution and related sales operations in eight states.

• The pipeline and storage segment is comprised primarily of the regulated pipeline and storage operations of our Atmos Pipeline-Texas division and our natural gas transmission operations in Louisiana.

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

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

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

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

Our critical accounting policies used in the preparation of our consolidated financial statements are described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 and include the following:

• Regulation

• Pension and other postretirement plans

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

RESULTS OF OPERATIONS

Executive Summary

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

The 15 percent year-over-year increase in net income largely reflects positive rate outcomes driven by safety and reliability spending. Additionally, our results for the three months ended December 31, 2025 were favorably impacted by $35.2 million as a result of Texas legislation that became effective during the third quarter of fiscal 2025 related to infrastructure spending. These increases were partially offset by increased employee-related costs, depreciation and property tax expenses, and higher spending on safety and compliance related activities.

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

Capital expenditures for the three months ended December 31, 2025 were $1,033.3 million. Over 85 percent was invested to improve the safety and reliability of our distribution and transportation systems, with a significant portion of this investment incurred under regulatory mechanisms that reduce lag to six months or less.

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

The following discusses the results of operations for each of our operating segments.

Distribution Segment

The distribution segment is comprised of our regulated natural gas distribution and related sales operations in eight states. The primary factors that impact the results of this segment are our ability to earn our authorized rates of return, competitive factors in the energy industry, and economic conditions in our service areas.

Our ability to earn our authorized rates of return is based primarily on our ability to improve the rate design in our various ratemaking jurisdictions to minimize regulatory lag and, ultimately, separate the recovery of our approved rates from customer usage patterns. Improving rate design is a long-term process and is further complicated by the fact that we operate in multiple rate jurisdictions. Under our current rate design, approximately 70 percent of our distribution segment revenues are earned through the first six months of the fiscal year. Additionally, we currently recover approximately 50 percent of our distribution segment revenue, excluding gas costs, through the base customer charge, which partially separates the recovery of our approved rate from customer usage patterns.

Seasonal weather patterns can also affect our distribution operations. However, the effect of weather that is above or below normal is substantially offset through weather normalization adjustments, known as WNA, which have been approved by state regulatory commissions for approximately 97 percent of our residential and commercial revenues in the following states for the following time periods:

Kansas, West Texas			October — May
Tennessee			October — April
Kentucky, Mississippi, Mid-Tex			November — April
Louisiana			December — March
Virginia			January — December

Our distribution operations are also affected by the cost of natural gas. We are generally able to pass the cost of gas through to our customers without markup under purchased gas cost adjustment mechanisms; therefore, increases in the cost of gas are offset by a corresponding increase in revenues. Revenues in our Texas and Mississippi service areas include franchise fees and gross receipts taxes, which are calculated as a percentage of revenue (inclusive of gas costs). Therefore, the amount of these taxes included in revenues is influenced by the cost of gas and the level of gas sales volumes. We record the associated tax expense as a component of taxes, other than income.

The cost of gas typically does not have a direct impact on our operating income because these costs are recovered through our purchased gas cost adjustment mechanisms. However, higher gas costs may adversely impact our accounts receivable collections, resulting in higher bad debt expense. 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 89 percent of our residential and commercial revenues. Additionally, higher gas costs may require us to increase borrowings under our credit facilities, resulting in higher interest expense. Finally, higher gas costs, as well as competitive factors in the industry and general economic conditions may cause customers to conserve or, in the case of industrial consumers, to use alternative energy sources.

Three Months Ended December 31, 2025 compared with Three Months Ended December 31, 2024

Financial and operational highlights for our distribution segment for the three months ended December 31, 2025 and 2024 are presented below.

			Three Months Ended December 31
			2025						2024						Change
			(In thousands, unless otherwise noted)
Operating revenues			$	1,258,826					$	1,109,335					$	149,491
Purchased gas cost			497,036						422,570						74,466
Operating expenses			412,552						370,717						41,835
Operating income			349,238						316,048						33,190
Other non-operating income			5,584						10,084						(4,500)
Interest charges			24,445						34,249						(9,804)
Income before income taxes			330,377						291,883						38,494
Income tax expense			61,142						51,670						9,472
Net income			$	269,235					$	240,213					$	29,022
Consolidated distribution sales volumes — MMcf			75,133						71,924						3,209
Consolidated distribution transportation volumes — MMcf			37,077						37,662						(585)
Total consolidated distribution throughput — MMcf			112,210						109,586						2,624
Consolidated distribution average cost of gas per Mcf sold			$	6.62					$	5.88					$	0.74

Operating income for our distribution segment increased 10.5 percent. Key drivers for the change in operating income include:

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

• a $14.4 million increase in consumption, net of WNA.

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

Partially offset by:

• a $24.8 million increase in depreciation expense and property taxes associated with increased capital investments.

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

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

Additionally, our distribution segment's income before income taxes for the three months ended December 31, 2025 was favorably impacted by $20.0 million as a result of Texas legislation that became effective during the third quarter of fiscal 2025 related to infrastructure spending.

The following table shows our operating income by distribution division, in order of total rate base, for the three months ended December 31, 2025 and 2024. The presentation of our distribution operating income is included for financial reporting purposes and may not be appropriate for ratemaking purposes.

			Three Months Ended December 31
			2025						2024						Change
			(In thousands)
Mid-Tex			$	203,201					$	168,608					$	34,593
Kentucky/Mid-States			40,306						37,430						2,876
Louisiana			33,153						29,303						3,850
West Texas			35,864						26,685						9,179
Mississippi			24,968						34,200						(9,232)
Colorado-Kansas			12,781						13,500						(719)
Other			(1,035)						6,322						(7,357)
Total			$	349,238					$	316,048					$	33,190

Recent Ratemaking Developments

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

Rate Action						Annual Increase (Decrease) in Operating Income						EDIT Impact						Annual Increase (Decrease) in Operating Income Excluding EDIT
						(In thousands)
Annual formula rate mechanisms						$	145,676					$	—					$	145,676
Rate case filings						(23,203)						(11)						(23,214)
						$	122,473					$	(11)					$	122,462

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

Division						Rate Action						Jurisdiction						Operating Income Requested
																		(In thousands)
Colorado-Kansas						Rate Case						Colorado						$	17,556
Colorado-Kansas						Rate Case						Kansas (1)						15,977
Colorado-Kansas						Infrastructure Mechanism						Colorado (2)						409
Colorado-Kansas						Ad Valorem						Kansas (3)						81
																		$	34,023

(1) On January 9, 2026, we reached a settlement agreement for an operating income increase of $12.3 million pending final approval by the Kansas Corporation Commission. We anticipate rates will be implemented March 1, 2026.

(2) The Colorado SSIR rates became effective January 1, 2026 by operation of law.

(3) The Kansas Corporation Commission approved the Ad Valorem filing on January 8, 2026 with rates effective February 1, 2026.

Annual Formula Rate Mechanisms

As an instrument to reduce regulatory lag, formula rate mechanisms allow us to refresh our rates on an annual basis without filing a formal rate case. However, these filings still involve discovery by the appropriate regulatory authorities prior to the final determination of rates under these mechanisms. We currently have formula rate mechanisms in our Louisiana, Mississippi, and Tennessee operations and in substantially all the service areas in our Texas divisions. Additionally, we have specific infrastructure programs in substantially all of our distribution divisions with tariffs in place to permit the investment associated with these programs to have their surcharge rate adjusted annually to recover approved capital costs incurred in a prior test-year period. The following table summarizes our annual formula rate mechanisms by state:

						Annual Formula Rate Mechanisms
State						Infrastructure Programs						Formula Rate Mechanisms
Colorado						System Safety and Integrity Rider (SSIR)						—
Kansas						Gas System Reliability Surcharge (GSRS), System Integrity Program (SIP)						—
Kentucky						Pipeline Replacement Program (PRP)						—
Louisiana						(1)						Rate Stabilization Clause (RSC)
Mississippi						System Integrity Plan (SIP)						Stable Rate Filing (SRF)
Tennessee						(1)						Annual Rate Mechanism (ARM)
Texas						Gas Reliability Infrastructure Program (GRIP), (1)						Dallas Annual Rate Review (DARR), Mid-Tex Rate Review Mechanism (RRM)
Virginia						Steps to Advance Virginia Energy (SAVE)						—

(1) Infrastructure mechanisms in Texas, Louisiana, and Tennessee allow for the deferral of all expenses associated with capital expenditures incurred pursuant to these rules, which primarily consists of interest, depreciation, and other taxes (Texas and Tennessee only), until the next rate proceeding (rate case or annual rate filing), at which time investment and costs would be recoverable through base rates.

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

Division						Jurisdiction						Test Year Ended						Increase in Annual Operating Income						EDIT Impact						Increase in Annual Operating Income Excluding EDIT						Effective Date
																		(In thousands)
2025 Filings:
Colorado-Kansas						Kansas GSRS						06/30/2025						$	1,949					—						$	1,949					12/04/2025
Kentucky/Mid-States						Kentucky PRP						09/30/2026						4,670						—						4,670						10/02/2025
Mid-Tex						Mid-Tex Cities RRM						12/31/2024						138,508						—						138,508						10/01/2025
Kentucky/Mid-States						Virginia - SAVE						09/30/2026						549						—						549						10/01/2025
Total 2025 Filings																		$	145,676					$	—					$	145,676

Rate Case Filings

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

Division						State						Decrease in Annual Operating Income						EDIT Impact						Decrease in Annual Operating Income Excluding EDIT						Effective Date
												(In thousands)
2025 Rate Case Filings:
Mississippi General Rate Case						Mississippi						$	(23,203)					$	(11)					$	(23,214)					12/01/2025
Total 2025 Rate Case Filings												$	(23,203)					$	(11)					$	(23,214)

Pipeline and Storage Segment

Our pipeline and storage segment consists of the regulated pipeline and storage operations of our Atmos Pipeline–Texas Division (APT) and our natural gas transmission operations in Louisiana. APT is an intrastate pipeline in Texas with a heavy concentration in the established natural gas producing areas of central, northern, and eastern Texas, extending into or near the major producing areas of the Barnett Shale, the Texas Gulf Coast, and the Permian Basin of West Texas. APT provides transportation and storage services to our Mid-Tex Division, other third-party local distribution companies, industrial, and electric generation customers, as well as marketers and producers. Over 80 percent of this segment’s revenues are derived from these APT services. These revenues are subject to traditional ratemaking governed by the Texas Railroad Commission (RRC). As part of its pipeline operations, APT owns and operates five underground storage facilities in Texas.

Our natural gas transmission operations in Louisiana are comprised of a 21-mile pipeline located in the New Orleans, Louisiana area that is primarily used to aggregate gas supply for our distribution division in Louisiana under a long-term contract and, on a more limited basis, to third parties. The demand fee charged to our Louisiana distribution division for these services is subject to regulatory approval by the Louisiana Public Service Commission. We also manage two asset management plans, which have been approved by applicable state regulatory commissions. Generally, these asset management plans require us to share with our distribution customers a significant portion of the cost savings earned from these arrangements.

Our pipeline and storage segment is impacted by seasonal weather patterns, competitive factors in the energy industry, and economic conditions in our Texas and Louisiana service areas. Natural gas prices do not directly impact the results of this segment as revenues are derived from the transportation and storage of natural gas. However, natural gas prices and demand for natural gas could influence the level of drilling activity in the supply areas that we serve, which may influence the level of throughput we may be able to transport on our pipelines. Further, natural gas price differences between the various hubs that we serve in Texas could influence the volumes of gas transported for shippers through our Texas pipeline system and rates for such transportation.

The results of APT are also significantly impacted by the natural gas requirements of its local distribution company customers. Additionally, its operations may be impacted by the timing of when costs and expenses are incurred and when these costs and expenses are recovered through its tariffs.

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.

Three Months Ended December 31, 2025 compared with Three Months Ended December 31, 2024

Financial and operational highlights for our pipeline and storage segment for the three months ended December 31, 2025 and 2024 are presented below.

			Three Months Ended December 31
			2025						2024						Change
			(In thousands, unless otherwise noted)
Mid-Tex / Affiliate transportation revenue			$	217,744					$	195,922					$	21,822
Third-party transportation revenue			66,502						56,949						9,553
Other revenue			2,387						2,519						(132)
Total operating revenues			286,633						255,390						31,243
Total purchased gas cost			1,567						(58)						1,625
Operating expenses			119,540						112,016						7,524
Operating income			165,526						143,432						22,094
Other non-operating income			16,647						14,550						2,097
Interest charges			8,968						18,676						(9,708)
Income before income taxes			173,205						139,306						33,899
Income tax expense			39,476						27,661						11,815
Net income			$	133,729					$	111,645					$	22,084
Gross pipeline transportation volumes — MMcf			235,049						217,458						17,591
Consolidated pipeline transportation volumes — MMcf			182,873						169,090						13,783

Operating income for our pipeline and storage segment increased 15.4 percent. Key drivers for the change in operating income include:

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

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

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

Partially offset by:

• a $4.4 million increase in depreciation expense and property taxes associated with increased capital investments.

Additionally, our pipeline and storage segment's income before income taxes for the three months ended December 31, 2025 was favorably impacted by $15.2 million as a result of Texas legislation that became effective during the third quarter of fiscal 2025 related to infrastructure spending.

Liquidity and Capital Resources

The liquidity required to fund our working capital, capital expenditures, and other cash needs is provided from a combination of internally generated cash flows and external debt and equity financing. Additionally, we have a $1.5 billion commercial paper program and four committed revolving credit facilities with $3.1 billion in total availability from third-party lenders. The commercial paper program and credit facilities provide cost-effective, short-term financing until it can be replaced with a balance of long-term debt and equity financing that achieves the Company's desired capital structure. Additionally, we have various uncommitted trade credit lines with our gas suppliers that we utilize to purchase natural gas on a monthly basis.

We have a shelf registration statement on file with the Securities and Exchange Commission (SEC) that allows us to issue up to $8.0 billion in common stock and/or debt securities, which expires December 3, 2027. As of December 31, 2025, $5.2 billion of securities were available for issuance under this shelf registration statement.

We also have an at-the-market (ATM) equity sales program under which we may issue and sell shares of our common stock up to an aggregate offering price of $1.7 billion (including shares of common stock that may be sold pursuant to forward

sale agreements entered into in connection with the ATM equity sales program), which expires December 3, 2027. As of December 31, 2025, $827.1 million of equity was available for issuance under our existing ATM equity sales program. Additionally, as of December 31, 2025, we had $1.1 billion in available proceeds from outstanding forward sale agreements. Additional details are summarized in Note 8 to the condensed consolidated financial statements.

The liquidity provided by these sources is expected to be sufficient to fund the Company's working capital needs and capital expenditure program for the remainder of fiscal year 2026. Additionally, we expect to continue to be able to obtain financing upon reasonable terms as necessary.

The following table presents our capitalization inclusive of short-term debt and the current portion of long-term debt as of December 31, 2025, September 30, 2025 and December 31, 2024:

			December 31, 2025												September 30, 2025												December 31, 2024
			(In thousands, except percentages)
Short-term debt			$	—					—		%				$	—					—		%				$	—					—		%
Long-term debt (1)			9,555,875						40.1		%				8,918,944						39.7		%				8,425,055						39.7		%
Shareholders’ equity			14,282,892						59.9		%				13,558,890						60.3		%				12,780,481						60.3		%
Total			$	23,838,767					100.0		%				$	22,477,834					100.0		%				$	21,205,536					100.0		%

(1) Inclusive of our finance leases, but exclusive of AEK's securitized long-term debt.

Cash Flows

Our internally generated funds may change in the future due to a number of factors, some of which we cannot control. These factors include regulatory changes, the price for our services, demand for such products and services, margin requirements resulting from significant changes in commodity prices, operational risks, and other factors.

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

			Three Months Ended December 31
			2025						2024						Change
			(In thousands)
Total cash provided by (used in)
Operating activities			$	308,058					$	282,022					$	26,036
Investing activities			(1,035,643)						(888,941)						(146,702)
Financing activities			895,293						887,469						7,824
Change in cash and cash equivalents and restricted cash and cash equivalents			167,708						280,550						(112,842)
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period			203,803						308,856						(105,053)
Cash and cash equivalents and restricted cash and cash equivalents at end of period			$	371,511					$	589,406					$	(217,895)

Cash flows from operating activities

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

Cash flows from investing activities

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

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

pipeline and storage segment decreased $36.8 million primarily due to timing of spending for pipeline system safety and reliability in Texas.

Cash flows from financing activities

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

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

In the three months ended December 31, 2024, we received approximately $1.0 billion in net proceeds from the issuance of long-term debt and equity. We completed a public offering of $650 million of 5.00% senior notes due December 2054, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $639.4 million. Additionally, during the three months ended December 31, 2024, we settled 3,300,904 shares that had been sold on a forward basis for net proceeds of $379.5 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. Cash dividends increased due to an 8.1 percent increase in our dividend rate and an increase in shares outstanding.

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

			Three Months Ended December 31
			2025						2024
Shares issued:
Direct Stock Purchase Plan			11,526						12,344
1998 Long-Term Incentive Plan			156,446						137,862
Retirement Savings Plan and Trust			14,737						16,110
Equity Issuance			3,683,384						3,300,904
Total shares issued			3,866,093						3,467,220

Credit Ratings

Our credit ratings directly affect our ability to obtain short-term and long-term financing, in addition to the cost of such financing. In determining our credit ratings, the rating agencies consider a number of quantitative factors, including but not limited to, debt to total capitalization, operating cash flow relative to outstanding debt, operating cash flow coverage of interest, and pension liabilities. In addition, the rating agencies consider qualitative factors such as consistency of our earnings over time, the quality of our management and business strategy, the risks associated with our businesses, and the regulatory structures that govern our rates in the states where we operate.

Our debt is rated by two rating agencies: Standard & Poor’s Corporation (S&P) and Moody’s Investors Service (Moody’s). Currently, our outlook and debt ratings, which are all considered investment grade, are as follows:

			S&P									Moody’s
Senior unsecured long-term debt			A-									A2
Short-term debt			A-2									P-1
Outlook			Stable									Stable

A significant degradation in our operating performance or a significant reduction in our liquidity caused by more limited access to the private and public credit markets as a result of deteriorating global or national financial and credit conditions could trigger a negative change in our ratings outlook or even a reduction in our credit ratings by the two credit rating agencies. This would mean more limited access to the private and public credit markets and an increase in the costs of such borrowings.

A credit rating is not a recommendation to buy, sell, or hold securities. The highest investment grade credit rating is AAA for S&P and Aaa for Moody’s. The lowest investment grade credit rating is BBB- for S&P and Baa3 for Moody’s. Our credit ratings may be revised or withdrawn at any time by the rating agencies, and each rating should be evaluated independently of any other rating. There can be no assurance that a rating will remain in effect for any given period of time or that a rating will not be lowered, or withdrawn entirely, by a rating agency if, in its judgment, circumstances so warrant.

Debt Covenants

We were in compliance with all of our debt covenants as of December 31, 2025. Our debt covenants are described in greater detail in Note 7 to the condensed consolidated financial statements.

Contractual Obligations and Commercial Commitments

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

Risk Management Activities

In our distribution and pipeline and storage segments, we use a combination of physical storage, fixed physical contracts, and fixed financial contracts to reduce our exposure to unusually large winter-period gas price increases. Additionally, we manage interest rate risk by periodically entering into financial instruments to effectively fix the Treasury yield component of the interest cost associated with anticipated financings.

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

			Three Months Ended December 31
			2025						2024
			(In thousands)
Fair value of contracts at beginning of period			$	3,412					$	88,651
Contracts realized/settled			(3,923)						(8,336)
Fair value of new contracts			9						518
Other changes in value			(6,758)						36,055
Fair value of contracts at end of period			(7,260)						116,888
Netting of cash collateral			—						—
Cash collateral and fair value of contracts at period end			$	(7,260)					$	116,888

The fair value of our financial instruments at December 31, 2025 is presented below by time period and fair value source:

			Fair Value of Contracts at December 31, 2025
			Maturity in Years
Source of Fair Value			Less Than 1						1-3						4-5						Greater Than 5						Total Fair Value
			(In thousands)
Prices actively quoted			$	(8,096)					$	836					$	—					$	—					$	(7,260)
Prices based on models and other valuation methods			—						—						—						—						—
Total Fair Value			$	(8,096)					$	836					$	—					$	—					$	(7,260)

OPERATING STATISTICS AND OTHER INFORMATION

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

Distribution Sales and Statistical Data

			Three Months Ended December 31
			2025						2024
METERS IN SERVICE, end of period
Residential			3,169,132						3,136,028
Commercial			259,819						258,052
Industrial			1,477						1,496
Public authority and other			5,629						7,983
Total meters			3,436,057						3,403,559
INVENTORY STORAGE BALANCE — Bcf			73.9						70.1
SALES VOLUMES — MMcf (1)
Gas sales volumes
Residential			40,928						39,363
Commercial			26,293						24,481
Industrial			6,812						6,518
Public authority and other			1,100						1,562
Total gas sales volumes			75,133						71,924
Transportation volumes			38,975						39,538
Total throughput			114,108						111,462

Pipeline and Storage Operations Sales and Statistical Data

			Three Months Ended December 31
			2025						2024
CUSTOMERS, end of period
Industrial			91						93
Other			209						203
Total			300						296
INVENTORY STORAGE BALANCE — Bcf			1.3						1.4
PIPELINE TRANSPORTATION VOLUMES — MMcf (1)			235,049						217,458

Note to preceding tables:

(1)Sales and transportation volumes reflect segment operations, including intercompany sales and transportation amounts.

RECENT ACCOUNTING DEVELOPMENTS

Recent accounting developments, if any, and their impact on our financial position, results of operations and cash flows are described in Note 2 to the condensed consolidated financial statements.