ATO 10-K & 10-Q changes, risk factors and insider trading

The competition for talent has become increasingly intense and we may experience increased employee turnover due to a tightening labor market.intense. If we are unable to recruit and retain an appropriately qualified workforce, the Company could encounter operating challenges primarily due to a loss of institutional knowledge and expertise, errors due to inexperience, or the lengthy time period typically required to adequately train replacement personnel. In addition, higher costs could result from loss of productivity, increased safety compliance issues, or cost of contract labor.

During fiscal 2024,2025, we recorded net income of $1,042.9$1,198.8 million, or $6.83$7.46 per diluted share, compared to net income of $885.9$1,042.9 million, or $6.10$6.83 per diluted share in the prior year. The year-over-year increase in net income of $157.0$155.9 million largely reflects positive rate outcomes driven by safety and reliability spending. Additionally, our fiscal 20242025 results were favorably impacted by $21.1$26.2 million as a result of Texas legislation that became effective during the firstthird quarter of fiscal 20242025 related to reduceinfrastructure property tax expenses in Texas and $13.9 million as a result of a change to our bad debt recovery mechanism in Mississippi.spending. These increases were partially offset by higher bad debt expense, increased employee-related costs, depreciation expense,and property tax expenses, and interesthigher expense.spending on safety and compliance related activities.

•a $50.0$78.0 million increase in depreciation expense and property taxes associated with increased capital investments.

APT annually uses GRIP to recover capital costs incurred in the prior calendar year. On February 27,26, 2024,2025, APT made a GRIP filing that covered changes in net property, plant and equipment investment from January 1, 20232024 through December 31, 20232024 with a requested increase in operating income of $82.4$77.2 million. On MayJune 14,17, 2024,2025, the Texas Railroad Commission (RRC) approved the Company's GRIP filing.

•aan $68.4$89.4 million increase primarily due to rate adjustments from the GRIP filings approved in May 20232024 and June 2025, the System Safety and Integrity Rider filing approved in November 2024, and the rate case approved in December 2023.

•a $39.0$7.7 million net increase in APT's through-system activities primarily associated with increased spreads.activities.

•ana $8.4$23.5 million increase in depreciation expense and property taxes associated with increased capital investments.

We have a shelf registration statement on file with the Securities and Exchange Commission (SEC) that allows us to issue up to $5.0$8.0 billion in common stock and/or debt securities. As of the date of this report, $1.1$5.2 billion of securities remained available for issuance under the shelf registration statement, which expires MarchDecember 31,3, 2026.2027.

We also have an at-the-market (ATM) equity sales program that allows us to issue and sell shares of our common stock up to an aggregate offering price of $1.0$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 MarchDecember 31,3, 2026.2027. As of the date of this report, $10.0$828.5 million of equity is available for issuance under this ATM equity sales program. Additionally, as of September 30, 2024,2025, we had $1.4$1.6 billion in available proceeds from outstanding forward sale agreements issued under the ATM program.

For the fiscal year ended September 30, 2024,2025, cash flow provided by operating activities was $1,733.7$2,049.5 million compared with $3,459.7$1,733.7 million in the prior year. Fiscal 2023 operating cash flow included $2,021.9 million of cash received as a result of the conclusion of Texas securitization proceedings. Excluding this cash inflow, operating cash flow in fiscal 2023 was $1,437.8 million, and theThe year-over-year increase in operating cash flow primarily reflects the positive effects of successful rate case outcomes achieved in fiscal 20242025 and 2023.2024.

For the fiscal year ended September 30, 2024,2025, we had $2.9$3.6 billion in capital expenditures compared with $2.8$2.9 billion for the fiscal year ended September 30, 2023.2024. Capital spending in our distribution segment increased $322.2$413.4 million, primarily as a result of increased system modernization and customer growth spending. Capital spending in our pipeline and storage segment decreasedincreased $191.0$210.9 million, primarily due to the timing ofincreased spending for pipeline system safety and reliability in Texas.

Our financing activities provided $1,478.6$1,406.8 million of cash for fiscal year 20242025 compared with $696.8$1,478.6 million of cash usedprovided by financing activities for fiscal year 2023.2024.

During the fiscal year ended September 30, 2024,2025, we received approximately $2.0$1.8 billion in net proceeds from the issuance of long-term debt and equity. We completed a public offering of $500$650 million of 6.20%5.00% senior notes due OctoberDecember 2053 and $400 million of 5.90% senior notes due October 2033,2054, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $889.4$639.4 million. We also completed a public offering of $325$500 million of 5.90%5.20% senior notes due OctoberAugust 2033,2035, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $339.0$493.7 million. Additionally, during the fiscal year ended September 30, 2024,2025, we settled 6,401,4695,931,289 shares that had been sold on a forward basis for net proceeds of $750.0$698.5 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. We also received $231.1$122.9 million from the settlement of forward starting interest rate swaps related to a debt issuance completed in October 2024.2025. Cash dividends increased due to an 8.88.1 percent increase in our dividend rate and an increase in shares outstanding.

During the fiscal year ended September 30, 2023, we repaid $2.2 billion in long-term debt, and2024, we received approximately $1.6$2.0 billion in net proceeds from the issuance of long-term debt and equity. We completed a public offering of $500 million of 5.75%6.20% senior notes due OctoberNovember 20522053 and $300$400 million of 5.45%5.90% senior notes due OctoberNovember 2032,2033, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $789.4$889.4 million. We also completed a public offering of $325 million of 5.90% senior notes due November 2033, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $339.0 million. Additionally, during the year ended September 30, 2023,2024, we settled 7,272,2616,401,469 shares that had been sold on a forward basis for net proceeds of $806.9$750.0 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. We also received $171.1$231.1 million from the settlement of forward starting interest rate swaps related to a debt issuance completed in October 2023.2024. Cash dividends increased due to an 8.8 percent increase in our dividend rate and an increase in shares outstanding. Finally, Atmos Energy Kansas Securitization I, LLC, a special-purpose, wholly-owned subsidiary of Atmos Energy, issued $95 million in securitized long-term debt.

Our debt is rated by two rating agencies: Standard & Poor’s Corporation (S&P) and Moody’s Investors Service (Moody’s). On April 1,2, 2024,2025, Moody's reaffirmed its long-term and short-term credit ratingsratings, downgraded our long-term credit rating to A2, and placed our ratings under negativestable outlook. As of September 30, 2024,Currently, our outlook and current debt ratings, which are all considered investment grade, are as follows:

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 MarchJune 31,30, 2026 covered service areas located in eight states. In addition, we transport natural gas for others through our distribution and pipeline systems.

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 sixnine months ended MarchJune 31,30, 2026.

During the sixnine months ended MarchJune 31,30, 2026, we recorded net income of $984.9$1,227.6 million, or $5.92$7.33 per diluted share, compared to net income of $837.4$1,023.9 million, or $5.26$6.40 per diluted share for the sixnine months ended MarchJune 31,30, 2025.

The 1820 percent year-over-year increase in net income largely reflects positive rate outcomes driven by safety and reliability spending. Additionally, our results for the sixnine months ended MarchJune 31,30, 2026 were favorably impacted by $93.6$132.4 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 depreciation and property tax expenses andexpenses, higher spending on safety and compliance related activities.activities, and increased employee-related costs.

During the sixnine months ended MarchJune 31,30, 2026, we implemented, or received approval to implement,implemented ratemaking regulatory actions which resulted in an increase in annual operating income of $135.3$355.0 million. Additionally, as of MarchJune 31,30, 2026, we had ratemaking efforts in progress seeking a total increase in annual operating income of $599.2$373.4 million.

Capital expenditures for the sixnine months ended MarchJune 31,30, 2026 were $2,036.9$3,076.3 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 sixnine months ended MarchJune 31,30, 2026, we completed approximately $1.3$2.2 billion of long-term debt and equity financing. As of MarchJune 31,30, 2026, our equity capitalization was 60.959.8 percent. As of MarchJune 31,30, 2026, we had approximately $4.1$4.6 billion in total liquidity, consisting of $125.7$521.0 million in cash and cash equivalents, $890.1$936.8 million in funds available through equity forward sales agreements and $3,094.4 million in undrawn capacity under our credit facilities.

Three Months Ended MarchJune 31,30, 2026 compared with Three Months Ended MarchJune 31,30, 2025

Financial and operational highlights for our distribution segment for the three months ended MarchJune 31,30, 2026 and 2025 are presented below.

•ana $83.0$21.0 million increase in rate adjustments, primarily in our Mid-Tex Division.

Additionally, our distribution segment's income before income taxes for the three months ended MarchJune 31,30, 2026 was favorably impacted by $24.1$26.7 million as a result of Texas legislation that became effective during the third quarter of fiscal 2025 related to infrastructure spending. This amount is reflected in the respective line items in which the costs are incurred, including operating expenses of $23.9$17.8 million and interest charges.

The following table shows our operating income by distribution division, in order of total rate base, for the three months ended MarchJune 31,30, 2026 and 2025. The presentation of our distribution operating income is included for financial reporting purposes and may not be appropriate for ratemaking purposes.

SixNine Months Ended MarchJune 31,30, 2026 compared with SixNine Months Ended MarchJune 31,30, 2025

Financial and operational highlights for our distribution segment for the sixnine months ended MarchJune 31,30, 2026 and 2025 are presented below.

•aan $7.1$8.2 million decrease in refunds of excess deferred taxes to customers.

•aan $10.3$11.7 million increase in system monitoring, line locating, and other compliance-related activities.

Additionally, our distribution segment's income before income taxes for the sixnine months ended MarchJune 31,30, 2026 was favorably impacted by $44.0$70.8 million as a result of Texas legislation that became effective during the third quarter of fiscal 2025 related to infrastructure spending. This amount is reflected in the respective line items in which the costs are incurred, including operating expenses of $29.0$46.8 million and interest charges.

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 sixnine months of fiscal 2026, we implemented, or received approval to implement,implemented regulatory proceedings, resulting in a $135.3$242.8 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.

The following ratemaking efforts seeking $487.0$373.4 million in increased annual operating income were in progress as of MarchJune 31,30, 2026:

The following annual formula rate mechanisms were approvedimplemented during the sixnine months ended MarchJune 31,30, 2026:

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 sixnine months ended MarchJune 31,30, 2026.

APT annually uses GRIP to recover capital costs incurred in the prior calendar year. On February 13, 2026, APT made a GRIP filing that covered changes in net property, plant and equipment investments from January 1, 2025 through December 31, 2025 with a requested increase in operating income of $112.2 million. On May 12, 2026, the RRC approved the Company's GRIP filing.

Three Months Ended MarchJune 31,30, 2026 compared with Three Months Ended MarchJune 31,30, 2025

Financial and operational highlights for our pipeline and storage segment for the three months ended MarchJune 31,30, 2026 and 2025 are presented below.

•a $20.3$35.1 million increase primarily due to rate adjustments from the GRIP filingfilings approved in June 2025.2025 and May 2026.

Additionally, our pipeline and storage segment's income before income taxes for the three months ended MarchJune 31,30, 2026 was favorably impacted by $34.4$12.1 million as a result of Texas legislation that became effective during the third quarter of fiscal 2025 related to infrastructure spending. This amount is reflected in the respective line items in which the costs are incurred, including operating expenses of $30.4$8.6 million and interest charges.

SixNine Months Ended MarchJune 31,30, 2026 compared with SixNine Months Ended MarchJune 31,30, 2025

Financial and operational highlights for our pipeline and storage segment for the sixnine months ended MarchJune 31,30, 2026 and 2025 are presented below.

•a $40.6$75.7 million increase primarily due to rate adjustments from the GRIP filingfilings approved in June 2025.2025 and May 2026.

Additionally, our pipeline and storage segment's income before income taxes for the sixnine months ended MarchJune 31,30, 2026 was favorably impacted by $49.6$61.6 million as a result of Texas legislation that became effective during the third quarter of fiscal 2025 related to infrastructure spending. This amount is reflected in the respective line items in which the costs are incurred, including operating expenses of $33.1$41.7 million and interest charges.

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 MarchJune 31,30, 2026, $5.2$4.5 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 MarchJune 31,30, 2026, $827.1$506.5 million of equity was available for issuance under our existing ATM equity sales program. Additionally, as of MarchJune 31,30, 2026, we had $890.1$936.8 million in available proceeds from outstanding forward sale agreements. Additional details are summarized in Note 8 to the condensed consolidated financial statements.

The following table presents our capitalization inclusive of short-term debt and the current portion of long-term debt as of MarchJune 31,30, 2026, September 30, 2025 and MarchJune 31,30, 2025:

Cash flows from operating, investing, and financing activities for the sixnine months ended MarchJune 31,30, 2026 and 2025 are presented below.

For the sixnine months ended MarchJune 31,30, 2026, we generated cash flow from operating activities of $1,031.5$1,671.5 million compared with $1,205.0$1,701.3 million for the sixnine months ended MarchJune 31,30, 2025. Operating cash flow decreased by $173.4$29.9 million primarily due to the timing of gas cost recoveries.

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 sixnine months ended MarchJune 31,30, 2026, cash used for investing activities was $2,035.8$3,076.1 million compared to $1,717.5$2,593.7 million for the sixnine months ended MarchJune 31,30, 2025. Capital spending in our distribution segment increased $301.1$478.5 million,million primarily as a result of increased system modernization. Capital spending in our pipeline and storage segment increased $5.0 million primarily due to increased spending for pipeline system safety and reliability in Texas and system modernization.

For the sixnine months ended MarchJune 31,30, 2026, our financing activities provided $927.5$1,726.7 million of cash compared with $748.8$1,297.1 million of cash provided by financing activities in the prior-year period.

In the sixnine months ended MarchJune 31,30, 2026, we received approximately $1.3$2.2 billion in net proceeds from the issuance of long-term debt and equity. On October 1, 2025, 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. On June 18, 2026, we completed a public offering of $700 million of 4.75% senior notes due January 2032, and received the net proceeds from the offering, after the underwriting discount and offering expenses, of $694.0 million. Additionally, during the sixnine months ended MarchJune 31,30, 2026, we settled 5,106,7827,084,863 shares that had been sold on a forward basis for net proceeds of $671.6$941.7 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 sixnine months ended MarchJune 31,30, 2025, we received approximately $1.0$1.7 billion in net proceeds from the issuance of long-term debt and equity. We completed a public offering of $650 million of 5.00% senior notes due December 2054, and received net proceeds from the offering, after the underwriting discount and offering expenses, of $639.4 million. We also completed a public offering of $500 million of 5.20% senior notes due August 2035, and received net proceeds from the offering, after the underwriting discount and offering expenses of $493.9 million. Additionally, during the sixnine months ended MarchJune 31,30, 2025, we settled 3,300,9044,907,436 shares that had been sold on a forward basis for net proceeds of $379.5$568.6 million. The net proceeds were used primarily to support capital spending and for other general corporate purposes. Cash dividends increased due to an 8.1 percent increase in our dividend rate and an increase in shares outstanding.

The following table summarizes our share issuances for the sixnine months ended MarchJune 31,30, 2026 and 2025:

We were in compliance with all of our debt covenants as of MarchJune 31,30, 2026. Our debt covenants are described in greater detail in Note 7 to the condensed consolidated financial statements.

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 sixnine months ended MarchJune 31,30, 2026.

The following table shows the components of the change in fair value of our financial instruments for the three and sixnine months ended MarchJune 31,30, 2026 and 2025:

The fair value of our financial instruments at MarchJune 31,30, 2026 is presented below by time period and fair value source:

The following tables present certain operating statistics for our distribution and pipeline and storage segments for the three and sixnine months ended MarchJune 31,30, 2026 and 2025.