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• Like Duke Energy or Xcel Energy, but focused on natural gas distribution.
• Similar to your local electric utility, but providing natural gas instead of electricity.

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• Natural Gas Distribution: Providing regulated natural gas sales and transportation services directly to residential, commercial, and industrial customers.
• Pipeline and Storage: Operating regulated interstate and intrastate natural gas transmission pipelines and storage facilities that connect natural gas supplies to distribution markets.

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Atmos Energy (symbol: ATO) is one of the largest natural gas-only distributors in the United States. The company sells primarily to end-users rather than to other companies for resale.

Atmos Energy serves the following major categories of customers:

1. Residential Customers: This category includes individual households that use natural gas for heating, cooking, water heating, and other domestic purposes. These customers represent the largest number of connections for Atmos Energy across its service territories.
2. Commercial Customers: This segment comprises various businesses and institutions such as restaurants, retail establishments, office buildings, schools, hospitals, and government facilities. They utilize natural gas for space heating, water heating, cooking, and various operational processes.
3. Industrial Customers: This category includes large industrial facilities, manufacturing plants, and other significant enterprises that consume natural gas as a fuel for industrial processes, power generation, or as a feedstock in their operations.

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Kevin Akers, President and Chief Executive Officer

Kevin Akers was named President and Chief Executive Officer in October 2019. Prior to this, he served as Executive Vice President from November 2018 to October 2019, and as Senior Vice President, Safety and Enterprise Services, from January 2017 to October 2018. Akers also held leadership positions as president of the Kentucky/Mid-States Division from May 2007 to October 2016 and president of the Mississippi Division from 2002 to 2007. He joined Atmos Energy in 1991 and previously served as a senior gas engineer for the Indiana Utility Regulatory Commission from 1989 to 1991.

Christopher T. Forsythe, Senior Vice President and Chief Financial Officer

Christopher T. Forsythe was appointed Senior Vice President and Chief Financial Officer in February 2017. He joined Atmos Energy in June 2003, progressing through roles as Director, Financial Reporting (September 2003) and Vice President and Controller (May 2009). Before his tenure at Atmos Energy, Forsythe worked as a senior manager at PricewaterhouseCoopers LLP from 1993 to 2003.

John A. Paris, President, Mid-Tex Division

John A. Paris was named President of the Mid-Tex Division in May 2007, overseeing Atmos Energy's largest division. He joined Atmos Energy in 1985 and has held various positions in operations, marketing, and engineering, including previously serving as president of the Kentucky/Mid-States Division.

Daniel M. Meziere, Vice President of Investor Relations and Treasurer

Daniel M. Meziere was named Vice President of Investor Relations and Treasurer in August 2020. He served as Vice President and Treasurer since 2011 and as Director of Accounting Services for nine years prior to that. Before joining Atmos Energy, Meziere was Vice President of Finance at Hilton Reservations Worldwide and held various roles in the energy industry for over 15 years with Oryx Energy and Santa Fe International.

Karen E. Hartsfield, Senior Vice President, General Counsel, and Corporate Secretary

Karen E. Hartsfield joined Atmos Energy in June 2015 as a Senior Attorney and was promoted to Senior Vice President, General Counsel, and Corporate Secretary in August 2017. Prior to her time at Atmos Energy, she spent 19 years in private practice, most recently as the Managing Partner of the Jackson Lewis LLP Dallas office.

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The key risks to Atmos Energy's business are primarily centered around its substantial capital expenditure plans and the regulatory environment in which it operates.

1. Significant Capital Expenditure and Dependence on Regulatory Cost Recovery: Atmos Energy has embarked on an ambitious multi-year capital expenditure program, projected to be approximately $24 billion between fiscal years 2025 and 2029, primarily for modernizing and upgrading its infrastructure. This significant investment requires external funding and its success hinges on timely and favorable regulatory approvals for cost recovery and rate base growth. Should capital markets become less accommodating, or if there are delays or adverse decisions from regulatory authorities regarding rate adjustments and cost recovery, it could pressure the company's financial returns and strain its resources.
2. Broader Regulatory and Legislative Changes: As a heavily regulated natural gas utility, Atmos Energy's financial performance is intrinsically linked to decisions made by regulatory bodies. Beyond capital expenditure recovery, the evolving regulatory and legislative landscape, including potential shifts in energy policy towards renewable sources and increasingly stringent environmental regulations, could challenge the company's traditional natural gas business model. Such changes could necessitate strategic adaptations to remain competitive and compliant.
3. Volatility in Natural Gas Prices: While Atmos Energy generally has mechanisms to pass on the impact of fluctuating natural gas prices to its customers through rate adjustments, sudden and significant spikes in market gas prices could lead to temporary constraints on its cash flow. The company's free cash flow has notably fluctuated in the past, partly influenced by the timing of these market price movements and subsequent regulatory outcomes.

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Atmos Energy (symbol: ATO) primarily operates within two main addressable markets in the United States: natural gas distribution and natural gas pipeline and storage.

For its natural gas distribution services, the U.S. natural gas distribution market was valued at approximately $170.0 billion in 2024 and is projected to grow to $186.0 billion by 2032, with a compound annual growth rate (CAGR) of 1.0% between 2025 and 2032. Another estimate places the U.S. natural gas distribution market size at $174.7 billion in 2024 and $222.5 billion in 2025.

For its pipeline and storage businesses, the U.S. gas pipeline infrastructure market, which encompasses transmission pipelines, was valued at approximately $1,058.73 billion in 2024. This market is estimated to have grown to $1,149.26 billion in 2025 and is projected to reach around $2,431.55 billion by 2034, expanding at a CAGR of 8.67% between 2025 and 2034.

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1. Capital Investment and Rate Base Expansion

   Atmos Energy has an ambitious capital expenditure program focused on modernizing its natural gas distribution, transmission, and storage systems. The company plans to invest approximately $26 billion in capital through 2030, with about 85% allocated to safety and reliability initiatives. These significant investments are expected to support a 13-15% annual rate base growth, increasing from approximately $21 billion in fiscal 2025 to $40-44 billion by fiscal 2030. A larger rate base allows Atmos Energy to request higher rates from regulators, directly contributing to earnings growth.

2. Constructive Regulatory Environment and Rate Adjustments

   Atmos Energy benefits from a constructive regulatory environment, particularly in Texas, where the majority of its service territory is located. This environment supports predictable cash flows and enables the company to recover costs associated with its substantial capital investment programs. The company actively pursues approximately 20 rate filings per year to implement rate adjustments and earn a fair return on its investments. Recent legislative changes, such as Texas House Bill 4384, are particularly favorable, allowing Atmos Energy to recover over 95% of its capital spending within six months and 99% within 12 months, which is expected to boost revenue and earnings. For instance, in fiscal 2025, new rates worth $333.6 million were implemented, and in year-to-date fiscal 2026, rates worth $146.3 million were implemented.

3. Customer Growth

   Atmos Energy continues to experience strong customer growth, which directly contributes to increased revenue. In fiscal 2024, the company added nearly 3,500 new commercial customers, a 19% increase over the prior fiscal year, and 39 industrial customers expected to consume approximately 8.4 Bcf of gas annually when fully operational. Over the past year, it has added 58,000 residential customers, with over 75% of this growth occurring in Texas. Fiscal year 2025 saw significant customer expansion, with approximately 57,000 residential customers, nearly 3,200 commercial customers, and 29 industrial customers added. This demographic growth in the regions it serves, particularly in Texas, is a positive driver for the company.

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Capital Allocation Decisions (Last 3-5 Years)

Share Issuance

• Atmos Energy entered into a $1.7 billion equity distribution agreement in December 2024, intended for capital investments and general corporate purposes.
• This agreement succeeded a prior $1 billion at-the-market offering program that concluded earlier in 2024.
• The number of shares outstanding has increased year-over-year, with 0.161 billion shares in Q2 2025, representing a 5.07% increase from 2024.

Capital Expenditures

• For fiscal year 2025, Atmos Energy's capital expenditures totaled $3.6 billion, with 87% dedicated to safety and reliability initiatives. The company anticipates capital expenditures to be approximately $3.7 billion for the full fiscal year 2025.
• In fiscal year 2024, capital expenditures were $2.9 billion, with about 83% of the investment focused on safety and reliability projects, including the replacement of over 850 miles of pipeline and more than 55,000 service lines.
• Looking ahead, the company plans approximately $26 billion in capital spending from fiscal year 2026 through 2030, with over 85% allocated to safety and reliability, and anticipates fiscal 2026 capital expenditures of about $4.2 billion.