ATMOS ENERGY CORP (ATO)

Atmos Energy Corporation is a natural gas-only distributor and an S&P 500 company headquartered in Dallas, incorporated in Texas and Virginia. It delivers natural gas through regulated sales and transportation arrangements to approximately 3.4 million residential, commercial, public authority, and industrial customers in eight states located primarily in the South. It also operates one of the largest intrastate pipelines in Texas by miles of pipe. Its stated vision is to be the safest provider of natural gas services, and its operating strategy centers on modernizing its business and infrastructure while reducing regulatory lag.

The company reports two segments. The distribution segment covers regulated natural gas distribution and related sales in eight states through six divisions: Mid-Tex (about 1.83 million meters, including the Dallas/Fort Worth Metroplex), Kentucky/Mid-States (Kentucky, Tennessee and Virginia), Louisiana, West Texas (Amarillo, Lubbock, Midland), Mississippi, and Colorado-Kansas. The pipeline and storage segment consists mainly of the regulated pipeline and storage operations of the Atmos Pipeline-Texas (APT) division and a 21-mile natural gas transmission pipeline in the New Orleans area, which aggregates gas supply for the Louisiana distribution division and serves third parties on a limited basis. APT owns and operates five underground storage facilities in Texas, and the company also manages two regulator-approved asset management plans for distribution affiliates.

Distribution customers are served under non-exclusive franchise agreements granted by cities and towns; at September 30, 2025 the company held 1,010 franchises with terms generally of five to 35 years. APT's system is concentrated in the central, northern and eastern Texas gas-producing areas and extends toward the Barnett Shale, the Texas Gulf Coast and the Permian Basin. It provides transportation and storage to the Mid-Tex Division, other local distribution companies, industrial and electric generation customers, marketers, and producers. Rates are set by state regulators, such as the Railroad Commission of Texas and the Louisiana Public Service Commission, to cover costs plus a reasonable return on invested capital. Purchased gas cost adjustment mechanisms pass gas costs through to customers. Formula rate mechanisms and infrastructure programs allow annual rate adjustments, and weather normalization adjustment mechanisms in seven states protect roughly 97 percent of residential and commercial distribution revenues from weather effects.

Gas supply comes from independent producers and marketers, chosen mostly through competitive bidding, on base load and peaking terms. Major fiscal 2025 suppliers included ARM Energy Management, ConocoPhillips, EnLink Gas Marketing, Targa Gas Marketing, and Tenaska Marketing Ventures. The distribution divisions use 33 interstate and intrastate pipeline transportation companies, and APT delivers most of the Mid-Tex Division's supply. Estimated peak-day supply availability is about 5.4 Bcf, against peak-day customer sales of about 4.2 Bcf on February 19, 2025. The company can interrupt or curtail service to certain customers to maintain deliveries to high-priority customers.