Atmos Energy delivers natural gas to homes and businesses and charges other companies to move and store gas. In the first nine months of fiscal 2026, its net profit rose 19.9%, helped by higher approved rates and new Texas rules for recovering infrastructure costs. Yet investment in its system exceeded cash from operations by $1.40 billion. The company’s expansion therefore depends on both collecting approved customer charges and continuing to raise debt and equity.
Analysis period: quarter and nine months ended June 30, 2026. Research cutoff: October 22, 2026, New York date. Subsequent developments below include the October 9 financing; financial results remain those reported through June.
Source: Atmos Energy fiscal 2026 third-quarter Form 10-Q, consolidated statements, pp. 3–6, and management discussion, pp. 29–38.
1. Higher customer charges mattered more than higher gas volumes
Atmos earned more even though its distribution system delivered less gas. This is possible because much of its income pays for maintaining an available network, rather than simply rewarding each additional unit of gas sold.
Regulators allow Atmos to charge customers for approved operating costs and investment, including a return on the money tied up in the network. About half of distribution revenue excluding gas costs comes from a base customer charge. Weather adjustments cover approximately 97% of residential and commercial revenue during the applicable periods, helping offset unusually warm or cold conditions. These protections reduce the effect of lower usage on earnings.
Operating profit is the amount left after running costs, before financing items and income taxes. Net profit includes those items.
The distinction between a quarter and the first nine months matters. The April–June quarter comes after the main winter heating season. Atmos normally earns about 70% of distribution revenue in the first six months of its fiscal year, so multiplying the June quarter by four would give a misleading annual picture.
| Consolidated reported results; USD millions except per-share amounts and percentages | April–June 2025 | April–June 2026 | October 2024–June 2025 | October 2025–June 2026 |
|---|---|---|---|---|
| Revenue | 838.8 | 879.1 | 3,965.3 | 4,184.0 |
| Operating profit | 252.1 | 320.4 | 1,340.5 | 1,600.0 |
| Net profit | 186.4 | 242.7 | 1,023.9 | 1,227.6 |
| Operating margin, calculated | 30.1% | 36.4% | 33.8% | 38.2% |
| Net margin, calculated | 22.2% | 27.6% | 25.8% | 29.3% |
| Diluted earnings per share, USD | 1.16 | 1.43 | 6.40 | 7.33 |
Source: Form 10-Q, consolidated income statements, pp. 4–5; distribution rate design, p. 30. A margin is profit divided by revenue: it shows the share of each sales dollar left as profit.
Nine-month revenue increased 5.5%, while operating profit increased 19.4%. Revenue is a less direct measure of progress here because Atmos generally passes purchased gas costs to customers without a markup. Changes in gas prices can move revenue and expenses together without adding profit. Consolidated purchased gas cost fell from $1,067.1 million to $971.5 million, contributing to the increase in the reported profit-to-revenue ratio.
Both businesses improved, but for partly different reasons:
| Segment operating profit; USD millions | Nine months ended June 2025 | Nine months ended June 2026 | Change |
|---|---|---|---|
| Distribution | 895.2 | 1,024.2 | 129.0 |
| Pipeline and storage | 445.3 | 575.8 | 130.5 |
| Consolidated total | 1,340.5 | 1,600.0 | 259.5 |
Source: Form 10-Q, segment results, pp. 31–32 and 36. These disclosed segment operating profits reconcile to consolidated operating profit; intersegment revenue is eliminated in consolidated revenue.
In distribution, rate adjustments added $151.7 million to nine-month operating profit. Customer growth and additional industrial demand contributed $13.7 million. These gains faced real costs: depreciation and property taxes increased $69.2 million, compliance work increased $11.7 million, and employee costs increased $9.3 million. The result was growth from a larger, better-paid network, alongside higher costs to run it.
The gains were concentrated. Mid-Tex operating profit increased $137.7 million, more than the whole distribution segment’s increase, while Mississippi profit fell $23.2 million. The filing does not provide a complete explanation of each division’s change, but the comparison establishes that the improvement was uneven across territories.
Pipeline and storage benefited from $75.7 million of rate adjustments, $12.1 million from customers reserving more capacity for their peak needs, and $33.8 million from transporting gas across locations with different market prices. The capacity business can grow even when total volumes barely move: gross pipeline volumes rose only 0.5% over the nine months. The market-price opportunity has a different outlook, examined in Section 5.
Source: Form 10-Q, distribution drivers and divisional results, pp. 31–32; pipeline drivers and volumes, pp. 35–36. The listed drivers are selected management explanations, not complete arithmetic bridges.
2. Texas rules brought some earnings forward before customer collections
Part of the profit improvement came from postponing expense recognition, with future recovery still subject to regulatory review. This is an important benefit of the investment program, but it does not put cash in the bank when the accounting entry is made.
A new pipe can start serving customers before its cost is fully reflected in their bills. Texas legislation and the implementing rule allow eligible financing costs, depreciation, and property taxes during that gap to be recorded as an asset for future recovery. An asset of this kind represents costs the utility expects to collect through later rates. Without the permitted deferral, the relevant amounts would reduce current earnings sooner.
The Railroad Commission of Texas adopted Rule 7.7102 in February 2026 to implement House Bill 4384. Costs remain subject to a review of whether they were reasonable and prudent. Amounts disallowed after collection through interim rates can have to be refunded with interest. The rule improves the route from investment to recovery; it does not remove regulatory judgment.
Source: Railroad Commission of Texas adoption of Rule 7.7102, approved February 24, 2026, memorandum and adoption preamble, pp. 1–5 of the PDF.
The filing identifies the following favorable effects from the Texas infrastructure legislation. These are pretax amounts, not increases in net profit after tax.
| Effect disclosed for fiscal 2026; USD millions | April–June quarter | First nine months |
|---|---|---|
| Distribution: lower operating expenses | 17.8 | 46.8 |
| Pipeline and storage: lower operating expenses | 8.6 | 41.7 |
| Lower interest charges, both segments combined, calculated | 12.4 | 43.9 |
| Total favorable effect on pretax profit | 38.8 | 132.4 |
Calculation notes: The distribution pretax totals are $26.7 million for the quarter and $70.8 million for nine months; pipeline totals are $12.1 million and $61.6 million. The interest amounts are the differences between these totals and the disclosed operating-expense amounts. This table describes an effect within reported earnings, not a separate adjusted earnings measure or a complete comparison with prior-year deferrals. A tax amount specific to this effect is not supplied, so no after-tax adjustment is estimated.
Source: Form 10-Q, Texas legislation explanations, pp. 31–32 and 35–36; infrastructure mechanisms, Note 3 and p. 33.
The balance sheet shows the growing amount awaiting recovery. Assets recorded under infrastructure mechanisms increased from $314.0 million in September 2025 to $425.3 million in June 2026. That $111.2 million increase covers mechanisms in Texas, Louisiana, and Tennessee. It is a change in the amount still on the books, after additions and recovery, rather than another measure of the $132.4 million income effect.
Reported interest charges fell from $144.5 million to $115.3 million even as debt grew. The $43.9 million Texas interest benefit helps explain this apparent contradiction. Earlier agreements used to manage interest rates, called hedges, also reduced nine-month interest charges by $18.4 million, compared with $15.4 million a year earlier. The income statement therefore cannot be read as a simple measure of the cash coupons owed on the bonds.
Income taxes partly restrained profit growth: the nine-month effective tax rate increased from 19.1% to 20.3%. Atmos has improved its ability to recognize a return while it invests, but continued cash collection under the approved mechanisms remains essential.
Source: Form 10-Q, Note 3, regulatory assets; Note 12, income taxes; Note 13, interest-rate hedges; consolidated income statement, p. 5.
3. Faster construction widened the cash requirement
Operations financed only 54.3% of capital spending in the first nine months, down from 65.5% a year earlier. The reason was a combination of faster investment and less favorable cash-collection timing.
Management’s purpose is to replace and modernize the network, improve safety and reliability, and serve growing communities. Its August presentation identified about $1.52 billion spent repairing and replacing distribution and transmission pipelines and $367 million replacing service lines. Safety and reliability spending totaled approximately $2.72 billion. The company groups these projects by their safety purpose, without separating all spending into maintenance and expansion.
Source: Atmos fiscal 2026 third-quarter earnings presentation, August 6, 2026, slide 7. Rounded spending categories; total capital spending below follows the 10-Q cash-flow statement.
Nine-month capital spending increased 18.4%. Distribution investment accounted for the increase: it rose from $1,890.0 million to $2,380.4 million, while pipeline and storage investment edged down from $707.8 million to $695.8 million. The filing attributes the overall increase primarily to greater system modernization.
| Cash generated and allocated; USD millions | Nine months ended June 2025 | Nine months ended June 2026 |
|---|---|---|
| Cash from operations | 1,701.3 | 1,671.5 |
| Capital spending, shown as a positive use of cash | 2,597.8 | 3,076.3 |
| Cash remaining after capital spending, calculated | -896.5 | -1,404.8 |
| Cash dividends paid | 412.3 | 490.7 |
| Cash remaining after capital spending and dividends, calculated | -1,308.8 | -1,895.5 |
Calculation notes: “Cash remaining after capital spending” is free cash flow as used here: reported operating cash flow minus the cash-flow statement’s capital expenditures. It is a calculated, non-GAAP measure. The final row subtracts dividends actually paid; it is the amount still to be covered before other investing activity, financing, and changes in cash balances.
Source: Form 10-Q, cash-flow statement, p. 6; segment capital spending, pp. 9–10; investing discussion, pp. 37–38.
Net profit increased $203.7 million, but operating cash fell $29.9 million. The main offset was the cash absorbed by changes in other operating assets and liabilities: $399.6 million, compared with $34.8 million a year earlier. In everyday terms, earnings and the related collections and payments arrived at different times. Management attributes the decline in operating cash mainly to when gas costs were recovered from customers. The filing does not break the full $399.6 million into individual causes, so that amount should not be described entirely as unpaid customer bills.
Depreciation and deferred taxes also explain why operating cash exceeded net profit. Depreciation allocates earlier investment costs to current earnings without repeating the original cash payment. Deferred taxes reflect differences between the timing of tax expense in the accounts and tax obligations. Both are added back when reconciling profit to cash. The complete reconciliation appears in the calculation notes.
This need for outside funding predates the latest quarter. Full-year comparisons also show the system receiving more investment than operations generated in cash.
| Full fiscal years ended September 30; USD millions | 2024 | 2025 |
|---|---|---|
| Cash from operations | 1,733.7 | 2,049.5 |
| Capital spending | 2,937.1 | 3,561.4 |
| Cash remaining after capital spending, calculated | -1,203.4 | -1,511.9 |
The current shortfall continues that pattern, with faster construction adding to the amount that needs financing.
Sources: Form 10-Q, pp. 6 and 37; 2025 annual report, consolidated cash-flow statement, p. 43; SEC company facts, annual operating-cash and capital-expenditure facts for fiscal 2024 and 2025.
4. Funding is available, but it carries interest and share dilution
Atmos had substantial access to funding at June 30, while continuing to rely on new borrowing and shares. Its $4.6 billion liquidity figure combines several resources; only $521.0 million was unrestricted cash already held.
The other components were $3,094.4 million of unused bank facilities and $936.8 million available from agreements to issue shares later. Drawing a bank facility creates debt. Settling those share agreements for cash expands the share count. These resources support construction, but have different costs from cash already generated by customers.
During the nine months, Atmos received $941.7 million from settling forward share sales. It also issued $1.3 billion in bond principal. Management says the funds primarily supported capital spending and general corporate needs. This financing allowed cash to increase while the company invested and paid dividends.
The balance sheet expanded accordingly. Net property and equipment rose $2.72 billion to $28.02 billion, accounting for most of the $3.34 billion increase in total assets. Common shareholders’ equity rose $1.70 billion through new shares and retained profit. Financing debt, including finance leases but excluding the separately funded Kansas securitization, increased from $8.92 billion to $10.25 billion.
Source: Form 10-Q, balance sheet, p. 3; Notes 7–9; liquidity and financing discussion, pp. 36–38.
There was no commercial paper or bank borrowing outstanding at June 30. The main bank facilities mature in March 2029 and March 2031. The loan agreements measure debt as a share of total capital, including shareholders’ funds. That measure was 41%, below its 70% maximum, and Atmos reported compliance with all debt covenants. That leaves room under the covenant, although it is not an unlimited borrowing budget: credit ratings and the cost of maintaining the system also matter.
Near-term bond maturities are spread over several years:
| Bonds outstanding at June 30, 2026; excludes leases and Kansas securitized debt | Principal, USD millions |
|---|---|
| June 2027, 3.00% notes | 500.0 |
| July 2028, 6.75% debentures | 150.0 |
| September 2029, 2.625% notes | 500.0 |
| Remaining bonds, due 2031–2056 | 9,075.0 |
| Total bond principal | 10,225.0 |
Source: Form 10-Q, Note 7, pp. 15–16. The $502.5 million balance-sheet amount due within a year includes the $500 million 2027 notes and finance-lease maturities.
Applying each bond’s stated interest rate, or coupon, to its June 30 principal gives approximately $454.5 million of annual contractual interest. This calculation excludes leases, Kansas securitized bonds, and any future financing. It is a full-year coupon calculation on the closing debt balance, not nine-month interest expense or cash interest paid. It shows why the accounting reduction in interest discussed earlier does not eliminate the funding burden.
After the quarter, Atmos completed another $700 million bond issue on October 9, receiving approximately $691.4 million after offering costs. The notes mature in November 2036 and carry a 6.000% coupon, equivalent to $42.0 million of annual contractual interest. The transaction demonstrates continued market access after the 10-Q; it does not provide an updated cash balance or establish the net change in debt since June.
Sources: Form 10-Q, Note 7, individual debt terms; October 9, 2026 Form 8-K, Item 1.01.
Atmos also finances the use of service centers through leases recorded as debt. Finance-lease debt rose from $47.2 million to $101.2 million by June. The latest detailed operating-lease schedule, dated September 30, 2025, showed $375.8 million of future payments, including $56.5 million in fiscal 2026. The annual report also identified service-center leases not yet begun. Those older schedules provide context, rather than an updated June total.
Sources: Form 10-Q, Note 7; 2025 annual report, Note 7, pp. 58–59.
New shares helped preserve an equity share of capitalization near 60%, but spread profit across more shares. The diluted average share count increased 4.7%, so nine-month earnings per share rose 14.5%, less than net profit’s 19.9% increase. Most actual new shares came from capital raising: forward settlements issued 7.085 million shares, compared with 0.261 million under the long-term incentive plan. Another 6.129 million shares remained available under forward agreements at June 30, with settlement dates through June 2027.
Cash dividends increased to $490.7 million as both the dividend per share and share count increased. The financing statement reports no share-repurchase cash outflow. Atmos is adding equity to finance the network, and the resulting dilution is part of the cost of that strategy.
Source: Form 10-Q, Note 5, earnings per share; Note 8, equity and forward agreements; share issuance table, p. 38; cash-flow statement, p. 6.
5. Customer growth supports the network, while new pipelines challenge market-based gains
Approved rates and reserved capacity provide a firmer earnings base than wider gas-price differences. The distinction matters because new competing pipelines can reduce the opportunity to earn more by moving gas between markets.
Atmos connected more premises, but its distribution system sold and transported less gas during the nine months. This helps explain why rate protection mattered more than growth in physical deliveries.
| Distribution operating measures | 2025 | 2026 | Change |
|---|---|---|---|
| Meters in service at June 30 | 3,391,806 | 3,424,601 | 1.0% |
| Gas sold, first nine months; billion cubic feet | 256.085 | 229.995 | -10.2% |
| Gas sold and transported, first nine months; billion cubic feet | 374.391 | 344.756 | -7.9% |
Source: Form 10-Q, distribution results, p. 31, and meters in service, pp. 39–40. Volume rows are consolidated measures excluding intercompany activity. Changes are calculated from the unrounded source values.
Atmos’s distribution network faces limited direct competition from other gas distributors within its service areas, but electricity competes for heating, hot water, and cooking. That makes the cost and reliability of gas service relevant to future customer choices even where the physical distribution network is established.
Sources: Form 10-Q, distribution results, p. 31, and operating statistics, pp. 39–40; 2025 annual report, “Competition,” pp. 13–14. Consolidated throughput excludes intercompany activity; the separate operating-statistics table includes it.
For Atmos Pipeline–Texas, moving gas from a cheaper location to a more expensive one can attract additional transportation business. Nine-month operating profit benefited by $33.8 million from these through-system activities, primarily because price differences widened. But customers share in the benefit: the regulatory mechanism allocates 75% of the difference between qualifying non-tariff revenue and its benchmark to tariff customers. The associated regulatory liability rose from $99.4 million to $182.5 million. This is an amount owed through the customer adjustment mechanism, not ordinary financing debt.
The $33.8 million management-reported operating-profit driver should not be reduced by another assumed 75%. The revenue-sharing mechanism is already part of the reported accounts. Gross transportation receipts would overstate what Atmos retains.
Source: Form 10-Q, Note 6, revenue sharing; Note 3, APT annual adjustment liability; pipeline operating discussion, pp. 34–36.
Competitors have added routes out of the Permian Basin. Kinder Morgan reported that its Gulf Coast Express expansion entered service on June 23, adding approximately 570 million cubic feet per day of capacity. Energy Transfer’s August update said Hugh Brinson was in commercial service and expected to reach its full first-phase capacity of 1.5 billion cubic feet per day by September 1. That capacity target was a forecast in the release, not proof of the eventual ramp-up.
Additional routes give producers more ways to move gas away from a crowded supply area. Our inference is that this can narrow the price differences supporting Atmos’s through-system gains. It can also improve supply access for gas users. For Atmos, the direct business consequence is that the recent market-based uplift is less dependable than rates approved to pay for its network; the sources do not quantify a future loss for Atmos.
Sources: Kinder Morgan second-quarter 2026 results, July 22, 2026, “Other News—Natural Gas Pipelines”; Energy Transfer second-quarter 2026 results, August 4, 2026, “Strategic Highlights.”
6. Safety execution and customer bills set limits on the investment program
Large safety budgets need to produce better operating practices as well as new equipment. Federal investigations show why repair priorities, records, and emergency response matter.
In March 2026, the National Transportation Safety Board concluded that Atmos had identified leaks at least eight weeks before the January 2024 Jackson, Mississippi, explosions but had not repaired them. Soil movement loosened pipe connections. Investigators also identified weaknesses in leak monitoring and service-line records, and issued eight recommendations to Atmos covering matters including vulnerable connections, leak checks, records, and public education.
Those findings make execution central to the business outlook. Replacing pipes can address physical weaknesses, while better records and faster responses address failures that a construction budget alone cannot solve. They can require additional operating work alongside capital investment.
Source: NTSB, “Unrepaired Leaks Led to Natural Gas Pipeline Explosions in Mississippi”, March 26, 2026, findings and recommendations.
A separate May 28, 2026 Dallas apartment explosion killed three people. The NTSB page reviewed for this analysis still described that investigation as ongoing and its information as preliminary. It reported drilling by a third-party contractor before the explosion and a gas line whose location had not been identified and marked. Those facts raise questions about excavation coordination; they do not establish final responsibility for the accident.
Source: NTSB investigation PLD26FR007, “What Happened,” footnote 2, and investigation status, reviewed at the research cutoff.
Atmos says it is cooperating with investigators. Its 10-Q also discusses litigation and environmental matters for which losses above recorded amounts are possible but not reasonably estimable. Management believes excess losses would not materially affect the company. That is management’s assessment, rather than a disclosed maximum loss. The business exposure includes claims, remedial work, and closer regulatory scrutiny; the filing provides no basis for assigning a dollar amount to all of them.
Source: Form 10-Q, Note 11, “Litigation and Environmental Matters,” p. 21.
Customer affordability is the other constraint. Gas-cost recovery protects Atmos’s margin, but customers still face the fuel charge and the cost of infrastructure. At June 30, Mid-Tex had commitments for 69.2 billion cubic feet of indexed-price gas within a year, plus 7.9 billion cubic feet at a weighted fixed price of $3.03 per thousand cubic feet. The indexed portion leaves future bills exposed to market prices even though the company also uses storage and hedges.
Atmos recorded $22.0 million of provisions for uncollectible accounts over the nine months. Its allowance increased to $51.3 million, rather than being released into earnings. Recovery mechanisms cover the gas-cost portion for approximately 89% of customers, limiting company losses but not removing the need for customers to pay. Successful rate recovery thus depends on both regulatory approval and a service customers can afford.
Source: Form 10-Q, Note 11, gas purchase commitments; Note 6, customer receivables and allowance; Note 13, commodity risk management. The allowance reconciliation appears below.
7. The business can keep growing if approved investment becomes collected cash
Atmos has a workable route to further earnings growth, supported by rate approvals and financing access; its main test is turning a larger network into cash while improving safety. The evidence supports continued investment capacity, with substantial ongoing funding needs.
At June 30, implemented rate actions represented $355.0 million of annual operating-income increases: $242.8 million in distribution and $112.2 million for APT. Another $373.4 million was requested in proceedings then in progress. These are annualized amounts, not profit already earned during the nine months. Their contributions depend on the effective dates, costs, and final decisions. The totals also include changes in refunds of earlier tax savings to customers; the related income-tax benefit is outside operating profit.
There was some movement after the June reporting date. Colorado’s approved $10.8 million increase took effect July 1, and Louisiana implemented $30.3 million from that date subject to refund. Atmos’s August presentation put total implemented annualized increases at $396.1 million, with $334.1 million still in progress. The latter amount remained a request, not assured earnings.
Sources: Form 10-Q, executive summary, p. 29, rate activity, pp. 32–35; third-quarter earnings presentation, slide 3, status as of August 5, 2026.
Management’s August outlook called for fiscal 2026 diluted earnings per share of $8.40–$8.50 and approximately $4.2 billion of capital spending. The spending plan implied another $1.12 billion after June. Its longer plan called for approximately $26 billion over fiscal 2026–2030, with more than 80% devoted to safety and reliability. These plans explain why one successful bond issue does not end the financing task.
The operating assessment would improve with timely collection of approved charges, effective safety remediation, and new capacity commitments that support the expanding network. It would weaken if recovery delays or disallowances forced Atmos to carry more costs, safety failures increased spending and liabilities, or competing pipelines reduced market-based transportation earnings faster than approved rates replaced them.
The October bond issue confirms that capital remained available after the quarter. Full-year operating results were still ahead of the research cutoff: the company’s October 6 announcement scheduled them for November 4, with fiscal 2027 guidance and a refreshed five-year plan discussed November 5. Until those results are reported, the latest evidence supports an expanding regulated business whose earnings growth is stronger than its ability to fund investment entirely from operations.
Sources: August 5, 2026 earnings release, “Outlook”; Form 10-Q, investment plan, p. 29; October 9 financing disclosure, Item 1.01; October 6 year-end results announcement.
Reporting basis and calculation notes
Reporting basis: Atmos Energy Corporation, CIK 0000731802, Form 10-Q, accession 0000731802-26-000102, filed August 5, 2026, for June 30, 2026. The quarter is April 1–June 30; the cumulative period is October 1, 2025–June 30, 2026. Comparisons use the corresponding prior-year periods, except balance-sheet comparisons against September 30, 2025. The statements use U.S. GAAP and consolidate subsidiaries, including Atmos Energy Kansas Securitization I, LLC, or AEK. Interim statements are unaudited and were reviewed by the independent accountant.
Source: SEC filing index; Form 10-Q, cover, Notes 1–2 and 9, and accountant’s review, p. 27.
Reporting basis: The research cutoff is October 22, 2026. Later developments are identified by their own dates. Guidance is the August forecast, not a claim that every subsequent management communication reaffirmed it. The latest company transaction used is dated October 9; no September-year-end financial statement is inferred from that transaction. The supplied filing text is the financial foundation, with relevant figures checked against SEC XBRL facts and primary company or regulatory documents.
Calculation notes: How the balance sheet grew
The table checks where the larger asset base sits and how it was funded. Receivables are amounts customers owe, including gas already used but not yet billed. The stored-gas row measures the recorded dollar cost of inventory.
| Consolidated balances; USD millions | September 30, 2025 | June 30, 2026 |
|---|---|---|
| Net property and equipment | 25,292.990 | 28,015.610 |
| Cash, including restricted cash | 203.803 | 525.809 |
| Customer receivables, net | 375.509 | 469.455 |
| Gas stored underground | 171.756 | 154.429 |
| Other current assets | 301.627 | 351.150 |
| Right to collect Kansas storm costs | 75.127 | 68.026 |
| Goodwill | 731.257 | 731.257 |
| Deferred charges and other assets | 1,097.453 | 1,269.803 |
| Total assets | 28,249.522 | 31,585.539 |
| Total liabilities, calculated | 14,690.632 | 16,327.481 |
| Shareholders’ equity | 13,558.890 | 15,258.058 |
Calculation notes: Assets equal liabilities plus equity at both dates. June liabilities of $16,327.481 million plus equity of $15,258.058 million equal $31,585.539 million; September liabilities of $14,690.632 million plus equity of $13,558.890 million equal $28,249.522 million.
Property investment is the main source of asset growth. Other claims also matter: total regulatory assets increased from $608.7 million to $741.6 million, including the infrastructure costs discussed in Section 2. These amounts are already included in other current assets and deferred charges. Goodwill, the extra amount recorded when acquiring businesses, was unchanged; the annual assessment found no need for a write-down. The right to collect Kansas storm costs fell by $7.1 million as that portion was charged to expense during the recovery period.
The liabilities include both borrowed money and operating obligations. Accounts payable and accrued liabilities fell from $506.5 million to $436.7 million, while other current liabilities rose from $835.6 million to $896.3 million. Deferred income-tax liabilities increased from $2,918.3 million to $3,263.0 million. Their $344.6 million balance-sheet increase is not identical to the cash-flow statement’s $300.7 million deferred-tax adjustment: one is the change in a balance, the other an adjustment to period profit.
Source: Form 10-Q, balance sheet, p. 3; Notes 2–3, 6, and 9.
Calculation notes: Profit, cash, and the closing cash balance
This reconciliation shows why profit and cash from operations differ. Minus signs indicate reductions. The final adjustment combines cash tied up in operating assets with changes in amounts owed to suppliers and others.
| Reconciliation; USD millions | Nine months ended June 2025 | Nine months ended June 2026 |
|---|---|---|
| Net profit | 1,023.863 | 1,227.552 |
| Add depreciation and amortization | 549.069 | 591.853 |
| Add deferred income taxes | 214.609 | 300.650 |
| Other profit-to-cash adjustments | -49.402 | -50.435 |
| Changes from risk-management assets and liabilities | -1.966 | 1.417 |
| Changes in other operating assets and liabilities | -34.841 | -399.571 |
| Cash from operations | 1,701.332 | 1,671.466 |
Calculation notes: The $203.689 million increase in profit, $42.784 million increase in depreciation, $86.041 million increase in deferred taxes, and $2.350 million combined improvement in the other two adjustment lines were offset by $364.730 million of additional cash absorption in operating assets and liabilities. Together they produce the $29.866 million decline in operating cash.
Opening cash of $203.803 million plus operating inflow of $1,671.466 million, less investing outflow of $3,076.132 million, plus financing inflow of $1,726.672 million equals closing cash of $525.809 million. Other investing activity was a net $0.149 million inflow, explaining the small difference between capital spending and total investing outflow.
Closing cash includes $4.856 million restricted to AEK, leaving $520.953 million unrestricted. AEK’s $72.609 million of securitized debt is consolidated, but its creditors have no recourse to Atmos and its assets cannot settle Atmos obligations. Texas customer rate-relief bonds are obligations of a separate finance corporation, not Atmos debt. These distinctions explain why management’s capitalization measure excludes AEK debt while the consolidated balance sheet includes it.
Source: Form 10-Q, cash-flow statement, p. 6; Note 9; capitalization table, p. 37.
Calculation notes: New shares and retained profit explain the equity increase
Equity is the shareholders’ recorded interest in the company. The bridge distinguishes new capital, profit retained after dividends, and gains that accounting holds outside current net profit.
| Consolidated equity bridge, October 2025–June 2026 | USD millions |
|---|---|
| Opening shareholders’ equity | 13,558.890 |
| Common stock and additional paid-in capital increase | 984.533 |
| Net profit | 1,227.552 |
| Dividends recorded against retained earnings | -498.309 |
| Other comprehensive loss | -14.608 |
| Closing shareholders’ equity | 15,258.058 |
Calculation notes: Common stock increased $0.037 million and additional paid-in capital increased $984.496 million. Equity entries for public and other offerings totaled $954.145 million; stock-compensation-plan entries totaled $30.388 million. These are changes in recorded equity, not a substitute for cash proceeds. Retained earnings rose $729.243 million, equal to profit less the dividends recorded above. Actual cash dividends were $490.698 million, so the equity dividend entry is not used in the cash allocation table.
The accumulated balance of gains held outside current net profit declined from $475.015 million to $460.407 million. Of the $14.608 million reduction, $14.366 million was previously recorded hedge gains moving into earnings, net of tax; $0.242 million concerned securities. The hedge gains are being used over the lives of the related loans to reduce reported interest charges. Issued and outstanding shares increased from 161,568,384 to 168,986,249; the reconciliation contains no treasury-stock repurchase or retirement movement.
Source: Form 10-Q, Note 8, equity reconciliation and accumulated other comprehensive income, pp. 17–19; cash-flow statement, p. 6.
Calculation notes: Growth, earnings per share, and customer credit
Growth rates use unrounded source figures. Nine-month net-profit growth is ($1,227.552 million ÷ $1,023.863 million − 1) × 100 = 19.9%; quarter-only growth is ($242.689 million ÷ $186.429 million − 1) × 100 = 30.2%. Nine-month operating margin increased by 4.4 percentage points, from 33.8% to 38.2%. A percentage-point change is the difference between two percentages, not their relative growth rate.
Earnings per share uses the filing’s two-class calculation, which first allocates a small amount of profit to participating share awards. Nine-month income available to common shareholders was $1,227.182 million in 2026 and $1,023.441 million in 2025. Dividing by 167.352 million and 159.798 million diluted average shares gives the reported $7.33 and $6.40. Forward share agreements enter the diluted count when their effect is dilutive; that average count differs from shares outstanding on the closing date.
The allowance for unpaid customer accounts reconciles as follows, in USD millions: opening allowance $45.259 + provision $21.998 − write-offs $17.679 + recoveries $1.769 = closing allowance $51.347. The comparable prior-year calculation is $37.056 + $24.786 − $17.263 + $1.781 = $46.360. Lower provisions than a year earlier therefore do not establish a reserve release.
Source: Form 10-Q, Notes 5–6 and consolidated statements.
Reporting basis: SEC company-fact checks selected the stated filing accession, USD units, matching dates, and consolidated facts; quarterly and cumulative contexts were checked separately. Figures shown to one decimal may not sum exactly because of rounding.
This analysis is for information and education and is not investment advice.
