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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 March 31, 2024
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)
TexasandVirginia75-1743247
(State or other jurisdiction of
incorporation or organization)
(IRS employer
identification no.)
1800 Three Lincoln Centre
5430 LBJ Freeway
DallasTexas75240
(Address of principal executive offices)(Zip code)
(972934-9227
(Registrant’s telephone number, including area code)
Title of each classTrading SymbolName of each exchange on which registered
Common stockNo Par ValueATONew 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 filerþAccelerated filer¨Non-accelerated filer¨Smaller reporting companyEmerging 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 May 3, 2024.
ClassShares Outstanding
Common stockNo Par Value150,877,056



GLOSSARY OF KEY TERMS
 
AECAtmos Energy Corporation
AEKAtmos Energy Kansas Securitization I, LLC
AOCIAccumulated other comprehensive income
ARMAnnual Rate Mechanism
ASCAccounting Standards Codification
BcfBillion cubic feet
DARRDallas Annual Rate Review
FASBFinancial Accounting Standards Board
GAAPGenerally Accepted Accounting Principles
GRIPGas Reliability Infrastructure Program
GSRSGas System Reliability Surcharge
KCCKansas Corporation Commission
McfThousand cubic feet
MMcfMillion cubic feet
Moody’sMoody’s Investors Services, Inc.
PRPPipeline Replacement Program
RRCRailroad Commission of Texas
RRMRate Review Mechanism
RSCRate Stabilization Clause
S&PStandard & Poor’s Corporation
SAVESteps to Advance Virginia Energy
SECUnited States Securities and Exchange Commission
Securitized Utility Tariff BondsSeries 2023-A Senior Secured Securitized Utility Tariff Bonds
Securitized Utility Tariff PropertyAs defined in the financing order issued by the KCC in October 2022
SIPSystem Integrity Program
SIRSystem Integrity Rider
SOFRSecured Overnight Financing Rate
SRFStable Rate Filing
SSIRSystem Safety and Integrity Rider
TCJATax Cuts and Jobs Act of 2017
WNAWeather Normalization Adjustment

2


PART I. FINANCIAL INFORMATION
Item 1.Financial Statements

ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS 
March 31,
2024
September 30,
2023
 (Unaudited)
 (In thousands, except
share data)
ASSETS
Property, plant and equipment$24,283,917 $22,898,374 
Less accumulated depreciation and amortization3,469,354 3,291,791 
Net property, plant and equipment20,814,563 19,606,583 
Current assets
Cash and cash equivalents262,497 15,404 
Restricted cash and cash equivalents1,272 3,844 
Cash and cash equivalents and restricted cash and cash equivalents263,769 19,248 
Accounts receivable, net
596,433 328,654 
Gas stored underground144,128 245,830 
Other current assets
428,105 292,036 
Total current assets1,432,435 885,768 
Securitized intangible asset, net (See Note 9)
87,279 92,202 
Goodwill731,257 731,257 
Deferred charges and other assets
939,106 1,201,158 
$24,004,640 $22,516,968 
CAPITALIZATION AND LIABILITIES
Shareholders’ equity
Common stock, no par value (stated at $0.005 per share); 200,000,000 shares authorized; issued and outstanding: March 31, 2024 — 150,874,552 shares; September 30, 2023 — 148,492,783 shares
$754 $742 
Additional paid-in capital6,953,761 6,684,120 
Accumulated other comprehensive income495,700 518,528 
Retained earnings4,168,424 3,666,674 
Shareholders’ equity11,618,639 10,870,064 
Long-term debt, net7,444,855 6,554,133 
Securitized long-term debt (See Note 9)
81,261 85,078 
Total capitalization19,144,755 17,509,275 
Current liabilities
Accounts payable and accrued liabilities367,887 336,083 
Other current liabilities677,706 763,086 
Short-term debt 241,933 
Current maturities of long-term debt1,591 1,568 
Current maturities of securitized long-term debt (See Note 9)
8,001 9,922 
Total current liabilities1,055,185 1,352,592 
Deferred income taxes2,486,024 2,304,974 
Regulatory excess deferred taxes216,284 253,212 
Regulatory cost of removal obligation506,860 497,017 
Deferred credits and other liabilities595,532 599,898 
$24,004,640 $22,516,968 
See accompanying notes to condensed consolidated financial statements.
3


ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
 Three Months Ended March 31
 20242023
(Unaudited)
(In thousands, except per
share data)
Operating revenues
Distribution segment$1,589,181 $1,500,210 
Pipeline and storage segment223,487 184,424 
Intersegment eliminations(165,441)(143,661)
Total operating revenues1,647,227 1,540,973 
Purchased gas cost
Distribution segment788,643 809,023 
Pipeline and storage segment840 621 
Intersegment eliminations(165,188)(143,433)
Total purchased gas cost624,295 666,211 
Operation and maintenance expense199,899 194,716 
Depreciation and amortization expense165,087 148,317 
Taxes, other than income106,956 109,091 
Operating income550,990 422,638 
Other non-operating income16,687 17,406 
Interest charges55,442 37,370 
Income before income taxes512,235 402,674 
Income tax expense80,212 45,003 
Net income
$432,023 $357,671 
Basic net income per share$2.85 $2.48 
Diluted net income per share$2.85 $2.48 
Cash dividends per share$0.805 $0.740 
Basic weighted average shares outstanding151,271 143,941 
Diluted weighted average shares outstanding151,297 143,987 
Net income$432,023 $357,671 
Other comprehensive income (loss), net of tax
Net unrealized holding gains (losses) on available-for-sale securities, net of tax of $(15) and $39
(50)134 
Cash flow hedges:
Amortization and unrealized gains (losses) on interest rate agreements, net of tax of $7,850 and $(8,806)
27,158 (30,467)
Total other comprehensive income (loss)27,108 (30,333)
Total comprehensive income$459,131 $327,338 
See accompanying notes to condensed consolidated financial statements.





4


ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 Six Months Ended March 31
 20242023
(Unaudited)
(In thousands, except per
share data)
Operating revenues
Distribution segment$2,694,519 $2,940,636 
Pipeline and storage segment434,656 371,053 
Intersegment eliminations(323,481)(286,707)
Total operating revenues2,805,694 3,024,982 
Purchased gas cost
Distribution segment1,285,305 1,690,938 
Pipeline and storage segment844 (237)
Intersegment eliminations(322,985)(286,241)
Total purchased gas cost963,164 1,404,460 
Operation and maintenance expense366,244 379,732 
Depreciation and amortization expense329,695 294,337 
Taxes, other than income196,496 202,629 
Operating income950,095 743,824 
Other non-operating income34,573 38,597 
Interest charges107,317 74,130 
Income before income taxes877,351 708,291 
Income tax expense134,036 78,760 
Net income$743,315 $629,531 
Basic net income per share$4.93 $4.40 
Diluted net income per share$4.93 $4.40 
Cash dividends per share$1.61 $1.48 
Basic weighted average shares outstanding150,534 142,881 
Diluted weighted average shares outstanding150,547 142,963 
Net income$743,315 $629,531 
Other comprehensive income (loss), net of tax
Net unrealized holding gains on available-for-sale securities, net of tax of $71 and $64
246 221 
Cash flow hedges:
Amortization and unrealized losses on interest rate agreements, net of tax of $(6,669) and $(2,409)
(23,074)(8,336)
Total other comprehensive loss(22,828)(8,115)
Total comprehensive income$720,487 $621,416 
See accompanying notes to condensed consolidated financial statements.
5


ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 Six Months Ended March 31
 20242023
(Unaudited)
(In thousands)
Cash Flows From Operating Activities
Net income$743,315 $629,531 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense329,695 294,337 
Deferred income taxes110,098 59,060 
Other(28,023)(27,496)
Net assets / liabilities from risk management activities1,683 (1,482)
Net change in Winter Storm Uri current regulatory asset
 2,021,889 
Net change in other operating assets and liabilities(164,895)(83,123)
Net cash provided by operating activities
991,873 2,892,716 
Cash Flows From Investing Activities
Capital expenditures(1,415,526)(1,415,349)
Debt and equity securities activities, net(1,010)(4,560)
Other, net7,272 9,519 
Net cash used in investing activities
(1,409,264)(1,410,390)
Cash Flows From Financing Activities
Net decrease in short-term debt(241,933)(184,967)
Net proceeds from equity issuances254,022 359,683 
Issuance of common stock through stock purchase and employee retirement plans7,771 7,910 
Proceeds from issuance of long-term debt898,275 797,258 
Proceeds from term loan 2,020,000 
Repayment of term loan (2,020,000)
Repayment of long-term debt (2,200,000)
Repayment of securitized debt(5,738) 
Cash dividends paid(241,565)(210,725)
Debt issuance costs(8,920)(7,864)
Net cash provided by (used in) financing activities
661,912 (1,438,705)
Net increase in cash and cash equivalents and restricted cash and cash equivalents
244,521 43,621 
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period19,248 51,554 
Cash and cash equivalents and restricted cash and cash equivalents at end of period$263,769 $95,175 
See accompanying notes to condensed consolidated financial statements.
6


ATMOS ENERGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2024
1.    Nature of Business
Atmos Energy Corporation (“Atmos Energy” or the “Company”) and its subsidiaries are engaged in the regulated natural gas distribution and pipeline and storage businesses. Our distribution business is subject to federal and state regulation and/or regulation by local authorities in each of the states in which our regulated divisions and subsidiaries operate.
Our distribution business delivers natural gas through sales and transportation arrangements to over 3.3 million residential, commercial, public authority and industrial customers through our six regulated distribution divisions, which at March 31, 2024, covered service areas located in eight states.
Our pipeline and storage business, which is also subject to federal and state regulations, includes the transportation of natural gas to our Texas and Louisiana distribution systems and the management of our underground storage facilities used to support our distribution business in various states.
    
2.    Summary of Significant Accounting Policies
Basis of Presentation
These consolidated interim-period financial statements have been prepared in accordance with accounting principles generally accepted in the United States on the same basis as those used for the Company’s audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. In the opinion of management, all material adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been made to the unaudited consolidated interim-period financial statements. These consolidated interim-period financial statements are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with the audited consolidated financial statements of Atmos Energy Corporation included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Because of seasonal and other factors, the results of operations for the six-month period ended March 31, 2024 are not indicative of our results of operations for the full 2024 fiscal year, which ends September 30, 2024.
Significant accounting policies
Our accounting policies are described in Note 2 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.
During the second quarter of fiscal 2024, we completed our annual goodwill impairment assessment using a qualitative assessment, as permitted under U.S. GAAP. We test for goodwill at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit. Based on the assessment performed, we determined that our goodwill was not impaired.
No events have occurred subsequent to the balance sheet date that would require recognition or disclosure in the condensed consolidated financial statements.
Recently issued accounting pronouncements
In November 2023, the Financial Accounting Standards Board (FASB) issued guidance which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others. The amendment is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied retrospectively. This amendment will be effective for our Form 10-K for fiscal 2025 and our Form 10-Q for the first quarter of fiscal 2026. We are currently evaluating the impact this may have on our financial statement disclosures.
In December 2023, the FASB issued guidance which provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. The amendment is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied prospectively; however, retrospective application is also permitted. This amendment will be effective for our Form 10-K for fiscal 2026. We are currently evaluating the impact this amendment may have on our financial statement disclosures.

7


    
3.    Regulation
Accounting principles generally accepted in the United States require cost-based, rate-regulated entities that meet certain criteria to reflect the authorized recovery of costs due to regulatory decisions in their financial statements. As a result, certain costs are permitted to be capitalized rather than expensed because they can be recovered through rates. We record certain costs as regulatory assets when future recovery through customer rates is considered probable. Regulatory liabilities are recorded when it is probable that revenues will be reduced for amounts that will be credited to customers through the ratemaking process. Substantially all of our regulatory assets are recorded as a component of other current assets and deferred charges and other assets and our regulatory liabilities are recorded as a component of other current liabilities and deferred credits and other liabilities. Deferred gas costs are recorded either in other current assets or liabilities.
Regulatory assets and liabilities as of March 31, 2024 and September 30, 2023 included the following:
March 31,
2024
September 30,
2023
 (In thousands)
Regulatory assets:
Pension and postretirement benefit costs$16,174 $20,629 
Infrastructure mechanisms (1)
210,795 229,996 
Winter Storm Uri incremental costs15,510 32,115 
Deferred gas costs25,928 148,297 
Regulatory excess deferred taxes (2)
51,654 47,549 
Recoverable loss on reacquired debt3,154 3,238 
Deferred pipeline record collection costs66,535 54,008 
Other15,618 19,096 
$405,368 $554,928 
Regulatory liabilities:
Regulatory excess deferred taxes (2)
$315,020 $384,513 
Regulatory cost of removal obligation594,815 582,867 
Deferred gas costs57,680 23,093 
APT annual adjustment mechanism40,233 49,894 
Pension and postretirement benefit costs205,718 215,913 
Other35,315 28,054 
$1,248,781 $1,284,334 
 
(1)Infrastructure mechanisms in Texas, Louisiana, and Tennessee allow for the deferral of all eligible expenses associated with capital expenditures incurred pursuant to these rules, including the recording of interest on deferred expenses until the next rate proceeding (rate case or annual rate filing), at which time investment and costs would be recoverable through base rates.
(2)Regulatory excess deferred taxes represent changes in our net deferred tax liability related to our cost of service ratemaking due to the enactment of Tax Cuts and Jobs Act of 2017 (the "TCJA") and a Kansas legislative change enacted in fiscal 2020. See Note 12 to the condensed consolidated financial statements for further information.
Securitization
Kansas
See Note 9 to the condensed consolidated financial statements for securitization and other information related to Atmos Energy Kansas Securitization I, LLC (AEK).
Texas
In March 2023, the Texas Natural Gas Securitization Finance Corporation (the Finance Corporation), with the authority of the Texas Public Finance Authority (TPFA), issued $3.5 billion in customer rate relief bonds with varying scheduled final maturities from 12 to 18 years. The bonds are obligations of the Finance Corporation, payable from the customer rate relief charges and other bond collateral, and are not an obligation of Atmos Energy. We began collecting the customer rate relief charges on October 1, 2023, and any such property collected is solely owned by the Finance Corporation and not available to pay creditors of Atmos Energy.
8


Additionally, we deferred $32.4 million in carrying costs incurred after September 1, 2022. Effective October 1, 2023, we began recovering a portion of these carrying costs. We have recorded $4.6 million and $21.2 million as a current asset in other current assets as of March 31, 2024 and September 30, 2023. We anticipate recovering the remaining $10.9 million in future regulatory filings and have recorded this amount as a long-term asset in deferred charges and other assets as of March 31, 2024.

4.    Segment Information

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

The distribution segment is primarily comprised of our regulated natural gas distribution and related sales operations in eight states.
The pipeline and storage segment is comprised primarily of the pipeline and storage operations of our Atmos Pipeline-Texas division and our natural gas transmission operations in Louisiana.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies found in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.
Income statements and capital expenditures for the three and six months ended March 31, 2024 and 2023 by segment are presented in the following tables:
 Three Months Ended March 31, 2024
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Operating revenues from external parties$1,588,394 $58,833 $— $1,647,227 
Intersegment revenues787 164,654 (165,441)— 
Total operating revenues1,589,181 223,487 (165,441)1,647,227 
Purchased gas cost
788,643 840 (165,188)624,295 
Operation and maintenance expense154,956 45,196 (253)199,899 
Depreciation and amortization expense121,384 43,703  165,087 
Taxes, other than income98,008 8,948  106,956 
Operating income426,190 124,800  550,990 
Other non-operating income9,359 7,328  16,687 
Interest charges36,784 18,658  55,442 
Income before income taxes
398,765 113,470  512,235 
Income tax expense56,073 24,139  80,212 
Net income$342,692 $89,331 $ $432,023 
Capital expenditures$532,997 $112,879 $ $645,876 

9


 Three Months Ended March 31, 2023
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Operating revenues from external parties$1,499,437 $41,536 $— $1,540,973 
Intersegment revenues773 142,888 (143,661)— 
Total operating revenues1,500,210 184,424 (143,661)1,540,973 
Purchased gas cost
809,023 621 (143,433)666,211 
Operation and maintenance expense151,353 43,591 (228)194,716 
Depreciation and amortization expense106,310 42,007  148,317 
Taxes, other than income98,200 10,891  109,091 
Operating income335,324 87,314  422,638 
Other non-operating income7,465 9,941  17,406 
Interest charges21,420 15,950  37,370 
Income before income taxes
321,369 81,305  402,674 
Income tax expense32,895 12,108  45,003 
Net income$288,474 $69,197 $ $357,671 
Capital expenditures$424,989 $194,700 $ $619,689 
 Six Months Ended March 31, 2024
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Operating revenues from external parties$2,693,013 $112,681 $— $2,805,694 
Intersegment revenues1,506 321,975 (323,481)— 
Total operating revenues2,694,519 434,656 (323,481)2,805,694 
Purchased gas cost
1,285,305 844 (322,985)963,164 
Operation and maintenance expense282,571 84,169 (496)366,244 
Depreciation and amortization expense241,069 88,626  329,695 
Taxes, other than income178,903 17,593  196,496 
Operating income706,671 243,424  950,095 
Other non-operating income15,198 19,375  34,573 
Interest charges71,365 35,952  107,317 
Income before income taxes
650,504 226,847  877,351 
Income tax expense86,375 47,661  134,036 
Net income$564,129 $179,186 $ $743,315 
Capital expenditures$1,072,155 $343,371 $ $1,415,526 

10


 Six Months Ended March 31, 2023
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Operating revenues from external parties$2,939,130 $85,852 $— $3,024,982 
Intersegment revenues1,506 285,201 (286,707)— 
Total operating revenues2,940,636 371,053 (286,707)3,024,982 
Purchased gas cost
1,690,938 (237)(286,241)1,404,460 
Operation and maintenance expense287,822 92,376 (466)379,732 
Depreciation and amortization expense211,974 82,363  294,337 
Taxes, other than income182,822 19,807  202,629 
Operating income567,080 176,744  743,824 
Other non-operating income14,239 24,358  38,597 
Interest charges44,259 29,871  74,130 
Income before income taxes
537,060 171,231  708,291 
Income tax expense54,118 24,642  78,760 
Net income$482,942 $146,589 $ $629,531 
Capital expenditures$868,533 $546,816 $ $1,415,349 
Balance sheet information at March 31, 2024 and September 30, 2023 by segment is presented in the following tables:
 March 31, 2024
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Net property, plant and equipment$15,346,551 $5,468,012 $ $20,814,563 
Total assets$23,212,086 $5,776,113 $(4,983,559)$24,004,640 
 September 30, 2023
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Net property, plant and equipment$14,402,578 $5,204,005 $ $19,606,583 
Total assets$21,716,467 $5,504,972 $(4,704,471)$22,516,968 

5.    Earnings Per Share
We use the two-class method of computing earnings per share because we have participating securities in the form of non-vested restricted stock units with a nonforfeitable right to dividend equivalents, for which vesting is predicated solely on the passage of time. The calculation of earnings per share using the two-class method excludes income attributable to these participating securities from the numerator and excludes the dilutive impact of those shares from the denominator. Basic weighted average shares outstanding is calculated based upon the weighted average number of common shares outstanding during the periods presented. Also, this calculation includes fully vested stock awards that have not yet been issued as common stock. Additionally, the weighted average shares outstanding for diluted EPS includes the incremental effects of the forward sale agreements, discussed in Note 8 to the condensed consolidated financial statements, when the impact is dilutive.
11


Basic and diluted earnings per share for the three and six months ended March 31, 2024 and 2023 are calculated as follows:
 Three Months Ended March 31Six Months Ended March 31
 2024202320242023
 (In thousands, except per share amounts)
Basic Earnings Per Share
Net income$432,023 $357,671 $743,315 $629,531 
Less: Income allocated to participating securities
255 212 442 381 
Income available to common shareholders
$431,768 $357,459 $742,873 $629,150 
Basic weighted average shares outstanding
151,271 143,941 150,534 142,881 
Net income per share — Basic
$2.85 $2.48 $4.93 $4.40 
Diluted Earnings Per Share
Income available to common shareholders$431,768 $357,459 $742,873 $629,150 
Effect of dilutive shares
    
Income available to common shareholders
$431,768 $357,459 $742,873 $629,150 
Basic weighted average shares outstanding
151,271 143,941 150,534 142,881 
Dilutive shares26 46 13 82 
Diluted weighted average shares outstanding
151,297 143,987 150,547 142,963 
Net income per share — Diluted$2.85 $2.48 $4.93 $4.40 

6.    Revenue and Accounts Receivable
Revenue
Our revenue recognition policy is fully described in Note 2 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. The following tables disaggregate our revenue from contracts with customers by customer type and segment and provide a reconciliation to total operating revenues, including intersegment revenues, for the three and six months ended March 31, 2024 and 2023.
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
DistributionPipeline and StorageDistributionPipeline and Storage
(In thousands)
Gas sales revenues:
Residential$1,065,296 $ $943,090 $ 
Commercial404,701  398,812  
Industrial30,419  45,044  
Public authority and other21,120  22,686  
Total gas sales revenues1,521,536  1,409,632  
Transportation revenues37,607 223,159 33,511 190,248 
Miscellaneous revenues3,724 2,162 2,662 1,152 
Revenues from contracts with customers1,562,867 225,321 1,445,805 191,400 
Alternative revenue program revenues22,315 (1,834)53,910 (6,976)
Other revenues3,999  495  
Total operating revenues$1,589,181 $223,487 $1,500,210 $184,424 
12


Six Months Ended March 31, 2024Six Months Ended March 31, 2023
DistributionPipeline and StorageDistributionPipeline and Storage
(In thousands)
Gas sales revenues:
Residential$1,792,978 $ $1,896,141 $ 
Commercial681,954  787,479  
Industrial58,650  104,259  
Public authority and other35,704  45,512  
Total gas sales revenues2,569,286  2,833,391  
Transportation revenues71,374 438,464 65,673 385,500 
Miscellaneous revenues6,367 5,204 4,944 3,874 
Revenues from contracts with customers2,647,027 443,668 2,904,008 389,374 
Alternative revenue program revenues39,716 (9,012)35,588 (18,321)
Other revenues7,776  1,040  
Total operating revenues$2,694,519 $434,656 $2,940,636 $371,053 
We have alternative revenue programs in each of our segments. In our distribution segment, we have weather-normalization adjustment mechanisms that serve to mitigate the effects of weather on our revenue. In our pipeline and storage segment, APT has a regulatory mechanism that requires that we share with its tariffed customers 75% of the difference between the total non-tariffed revenues earned during a test period and a revenue benchmark established by the RRC. With the completion of APT's most recent rate case in December 2023, the revenue benchmark was increased from $69.4 million to $106.9 million. Other revenues includes AEK revenues (see Note 9 to the condensed consolidated financial statements) and other miscellaneous revenues.
Accounts receivable and allowance for uncollectible accounts
Accounts receivable arise from natural gas sales to residential, commercial, industrial, public authority and other customers. Our accounts receivable balance includes unbilled amounts which represent a customer’s consumption of gas from the date of the last cycle billing through the last day of the month. Our policy related to the accounting for our accounts receivable and allowance for uncollectible accounts is fully described in Note 2 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. During the six months ended March 31, 2024, there were no material changes to this policy. Rollforwards of our allowance for uncollectible accounts for the three and six months ended March 31, 2024 and 2023 are presented in the table below. The allowance excludes the gas cost portion of customers’ bills for approximately 88 percent of our customers as we have the ability to collect these gas costs through our gas cost recovery mechanisms in most of our jurisdictions.
In December 2023, the Mississippi Public Service Commission approved the recovery of uncollectible accounts through our purchased gas cost mechanism over a two-year period rather than through our annual filing mechanism over a one-year period. As a result of this decision, we recorded a $13.9 million reduction to bad debt expense during the first quarter of fiscal 2024. Of this amount, $9.7 million represents future recovery of customer receivables previously written off since April 2022 but not yet recovered through our rates. This amount increased our deferred gas cost regulatory asset. The remaining $4.2 million reduction represents a reversal of our allowance for uncollectible accounts for customer balances that have not yet been written off.
 Three Months Ended March 31, 2024
 (In thousands)
Beginning balance, December 31, 2023$35,406 
Current period provisions12,797 
Write-offs charged against allowance(5,859)
Recoveries of amounts previously written off361 
Ending balance, March 31, 2024
$42,705 
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 Three Months Ended March 31, 2023
 (In thousands)
Beginning balance, December 31, 2022$47,613 
Current period provisions13,009 
Write-offs charged against allowance(8,333)
Recoveries of amounts previously written off462 
Ending balance, March 31, 2023
$52,751 
 Six Months Ended March 31, 2024
 (In thousands)
Beginning balance, September 30, 2023
$40,840 
Current period provisions19,547 
Write-offs charged against allowance(14,616)
Recoveries of amounts previously written off1,126 
Mississippi recovery of uncollectible accounts(4,192)
Ending balance, March 31, 2024
$42,705 
 Six Months Ended March 31, 2023
 (In thousands)
Beginning balance, September 30, 2022
$49,993 
Current period provisions20,242 
Write-offs charged against allowance(18,754)
Recoveries of amounts previously written off1,270 
Ending balance, March 31, 2023
$52,751 


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7.    Debt
The nature and terms of our debt instruments and credit facilities are described in detail in Note 8 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Other than as described below, there were no material changes in the terms of our debt instruments during the six months ended March 31, 2024.
Long-term debt at March 31, 2024 and September 30, 2023 consisted of the following:
March 31, 2024September 30, 2023
 (In thousands)
Unsecured 3.00% Senior Notes, due June 2027
$500,000 $500,000 
Unsecured 2.625% Senior Notes, due September 2029
500,000 500,000 
Unsecured 1.50% Senior Notes, due January 2031
600,000 600,000 
Unsecured 5.45% Senior Notes, due October 2032
300,000 300,000 
Unsecured 5.90% Senior Notes, due October 2033

400,000  
Unsecured 5.95% Senior Notes, due October 2034
200,000 200,000 
Unsecured 5.50% Senior Notes, due June 2041
400,000 400,000 
Unsecured 4.15% Senior Notes, due January 2043
500,000 500,000 
Unsecured 4.125% Senior Notes, due October 2044
750,000 750,000 
Unsecured 4.30% Senior Notes, due October 2048
600,000 600,000 
Unsecured 4.125% Senior Notes, due March 2049
450,000 450,000 
Unsecured 3.375% Senior Notes, due September 2049
500,000 500,000 
Unsecured 2.85% Senior Notes, due February 2052
600,000 600,000 
Unsecured 5.75% Senior Notes, due October 2052
500,000 500,000 
Unsecured 6.20% Senior Notes, due October 2053
500,000  
Medium-term note Series A, 1995-1, 6.67%, due December 2025
10,000 10,000 
Unsecured 6.75% Debentures, due July 2028
150,000 150,000 
Finance lease obligations49,670 50,393 
Total long-term debt7,509,670 6,610,393 
Less:
Original issue discount on unsecured senior notes and debentures7,617 6,104 
Debt issuance cost55,607 48,588 
Current maturities of long-term debt1,591 1,568 
Total long-term debt, net$7,444,855 $6,554,133 
On October 10, 2023, we completed a public offering of $500 million of 6.20% senior notes due October 2053, with an effective interest rate of 5.56%, after giving effect to the offering costs and settlement of our interest rate swaps, and $400 million of 5.90% senior notes due October 2033, with an effective interest rate of 4.35%, after giving effect to the offering costs and settlement of our interest rate swaps. The net proceeds from the offering, after the underwriting discount and offering expenses, of $889.4 million were used for general corporate purposes.
Short-term debt
We utilize short-term debt to 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. Our short-term borrowing requirements are driven primarily by construction work in progress and the seasonal nature of the natural gas business.
Our short-term borrowing requirements are satisfied through a combination of a $1.5 billion commercial paper program and four committed revolving credit facilities with third-party lenders that provide $3.1 billion of total working capital funding.
Our commercial paper program is supported by a five-year unsecured $1.5 billion credit facility that was replaced on March 28, 2024, with a new five-year senior unsecured $1.5 billion credit facility that expires on March 28, 2029. This new facility bears interest at a base rate or at a Term SOFR-based rate for the applicable interest period, plus a margin ranging from zero percent to 0.25 percent for base rate advances or a margin ranging from 0.75 percent to 1.25 percent for Term SOFR-based advances, based on the Company’s credit ratings. Additionally, the facility contains a $250 million accordion feature, which provides the opportunity to increase the total committed loan to $1.75 billion. At March 31, 2024, there were no amounts
15


outstanding under our commercial paper program. At September 30, 2023, there was $241.9 million outstanding under our commercial paper program.
We also had a $900 million three-year unsecured revolving credit facility, which was replaced on March 28, 2024, with a new $1.5 billion three-year senior unsecured credit facility, which expires March 28, 2027 and is used to provide additional working capital funding. This new facility bears interest at a base rate or at a Term SOFR-based rate for the applicable interest period, plus a margin ranging from zero percent to 0.25 percent for base rate advances or a margin ranging from 0.75 percent to 1.25 percent for Term SOFR-based advances, based on the Company's credit ratings. Additionally, the facility contains a $250 million accordion feature, which provides the opportunity to increase the total committed loan to $1.75 billion. At March 31, 2024 and September 30, 2023, there were no borrowings outstanding under this facility.
Additionally, we have a $50 million 364-day unsecured facility, which was renewed April 1, 2024 and is used to provide working capital funding. There were no borrowings outstanding under this facility as of March 31, 2024 and September 30, 2023.
Finally, we have a $50 million 364-day unsecured revolving credit facility, which was renewed March 31, 2024 and is used to issue letters of credit and to provide working capital funding. At March 31, 2024, there were no borrowings outstanding under this facility; however, outstanding letters of credit reduced the total amount available to us to $44.4 million.
Debt covenants
The availability of funds under these credit facilities is subject to conditions specified in the respective credit agreements, all of which we currently satisfy. These conditions include our compliance with financial covenants and the continued accuracy of representations and warranties contained in these agreements. We are required by the financial covenants in each of these facilities to maintain, at the end of each fiscal quarter, a ratio of total-debt-to-total-capitalization of no greater than 70 percent. At March 31, 2024, our total-debt-to-total-capitalization ratio, as defined in the agreements, was 40 percent. In addition, both the interest margin and the fee that we pay on unused amounts under certain of these facilities are subject to adjustment depending upon our credit ratings.
These credit facilities and our public indentures contain usual and customary covenants for our business, including covenants substantially limiting liens, substantial asset sales and mergers. Additionally, our public debt indentures relating to our senior notes and debentures, as well as certain of our revolving credit agreements, each contain a default provision that is triggered if outstanding indebtedness arising out of any other credit agreements in amounts ranging from in excess of $15 million to in excess of $100 million becomes due by acceleration or if not paid at maturity. We were in compliance with all of our debt covenants as of March 31, 2024. If we were unable to comply with our debt covenants, we would likely be required to repay our outstanding balances on demand, provide additional collateral or take other corrective actions.

8.    Shareholders' Equity
The following tables present a reconciliation of changes in stockholders' equity for the three and six months ended March 31, 2024 and 2023.
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 Common stockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive Income
(Loss)
Retained
Earnings
Total
Number of
Shares
Stated
Value
 (In thousands, except share and per share data)
Balance, September 30, 2023
148,492,783 $742 $6,684,120 $518,528 $3,666,674 $10,870,064 
Net income— — — — 311,292 311,292 
Other comprehensive loss— — — (49,936)— (49,936)
Cash dividends ($0.805 per share)
— — — — (119,898)(119,898)
Common stock issued:
Public and other stock offerings2,177,864 11 257,757 — — 257,768 
Stock-based compensation plans163,750 1 3,918 — — 3,919 
Balance, December 31, 2023150,834,397 754 6,945,795 468,592 3,858,068 11,273,209 
Net income— — — — 432,023 432,023 
Other comprehensive income— — — 27,108 — 27,108 
Cash dividends ($0.805 per share)
— — — — (121,667)(121,667)
Common stock issued:
Public and other stock offerings34,687 — 4,025 — — 4,025 
Stock-based compensation plans5,468 — 3,941 — — 3,941 
Balance, March 31, 2024150,874,552 $754 $6,953,761 $495,700 $4,168,424 $11,618,639 
 Common stockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive Income
(Loss)
Retained
Earnings
Total
Number of
Shares
Stated
Value
 (In thousands, except share and per share data)
Balance, September 30, 2022
140,896,598 $704 $5,838,118 $369,112 $3,211,157 $9,419,091 
Net income— — — — 271,860 271,860 
Other comprehensive income— — — 22,218 — 22,218 
Cash dividends ($0.74 per share)
— — — — (104,552)(104,552)
Common stock issued:
Public and other stock offerings2,147,210 11 223,768 — — 223,779 
Stock-based compensation plans111,953 1 3,877 — — 3,878 
Balance, December 31, 2022143,155,761 716 6,065,763 391,330 3,378,465 9,836,274 
Net income— — — — 357,671 357,671 
Other comprehensive loss— — — (30,333)— (30,333)
Cash dividends ($0.74 per share)
— — — — (106,173)(106,173)
Common stock issued:
Public and other stock offerings1,316,930 6 143,808 — — 143,814 
Stock-based compensation plans11,959 — 3,952 — — 3,952 
Balance, March 31, 2023144,484,650 $722 $6,213,523 $360,997 $3,629,963 $10,205,205 
Shelf Registration, At-the-Market Equity Sales Program and Equity Issuances
We have a shelf registration statement with the Securities and Exchange Commission (SEC) that allows us to issue up to $5.0 billion in common stock and/or debt securities, which expires March 31, 2026. At March 31, 2024, $3.1 billion of securities were available for issuance under this shelf registration statement.
We 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 $1.0 billion through March 31, 2026 (including shares of common stock that may be sold pursuant to forward sale agreements entered into concurrently with the ATM equity sales program).
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During the six months ended March 31, 2024, we executed forward sales under our ATM equity sales program with various forward sellers who borrowed and sold 5,917,899 shares of our common stock at an aggregate price of $678.9 million. During the six months ended March 31, 2024, we also settled forward sale agreements with respect to 2,144,558 shares that had been borrowed and sold by various forward sellers under the ATM program for net proceeds of $254.0 million. As of March 31, 2024, $81.6 million of equity was available for issuance under our existing ATM program. Additionally, we had $889.7 million in available proceeds from outstanding forward sale agreements, as detailed below.
MaturityShares AvailableNet Proceeds Available
(In thousands)
Forward Price
September 30, 2024861,655 $101,838 $118.19 
December 31, 20242,176,974 251,971 $115.74 
June 30, 20254,695,737 535,871 $114.12 
Total7,734,366 $889,680 $115.03 
Accumulated Other Comprehensive Income (Loss)
We record deferred gains (losses) in AOCI related to available-for-sale debt securities and interest rate agreement cash flow hedges. Deferred gains (losses) for our available-for-sale debt securities are recognized in earnings upon settlement, while deferred gains (losses) related to our interest rate agreement cash flow hedges are recognized in earnings on a straight-line basis over the life of the related financing. The following tables provide the components of our accumulated other comprehensive income (loss) balances, net of the related tax effects allocated to each component of other comprehensive income (loss).
Available-
for-Sale
Securities
Interest Rate
Agreement
Cash Flow
Hedges
Total
 (In thousands)
September 30, 2023$(369)$518,897 $518,528