Overview

Information included in this report primarily covers our activities during fiscal year 2023. We’ve also included a few examples of our efforts from late 2022 and early 2024 to provide context on our progress and direction. Additionally, certain data points included in the report are measured on a calendar year basis and reflect information for calendar year 2023.

We align our reporting with the International Sustainability Standards Board and the Sustainability Accounting Standards Board (SASB)^[1]. We also continue to report ESG metrics through the American Gas Association’s ESG/Sustainability template and the Global Reporting Initiative (GRI) index. This report has been developed under the oversight of the Corporate Responsibility Committee of our Board of Directors.

[1] Atmos Energy began incorporating TCFD recommendations in 2021. In October 2023, the TCFD released its final status report and was disbanded and incorporated into the ISSB. Our 2023 report maintains a similar level of transparency as our previous reports and, since the disbandment of TCFD, we have maintained disclosures aligned with the SASB standards.

CAUTIONARY STATEMENT This material includes forward-looking statements. These statements can be identified because they use words such as “anticipate,” “believe,” “estimate,” “may,” “could,” “expect,” “forecast,” “target,” “goal,” “intend,” “objective,” “plan,” “projection,” “seek,” “strategy,” or similar words. Similarly, statements that describe future plans or strategies and future emissions reductions are forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. These risks and uncertainties include the following: federal, state, and local regulatory and political trends and decisions; increased federal regulatory oversight and potential penalties; possible increased federal, state, and local regulation of the safety of our operations; the impact of greenhouse gas emissions or other legislation or regulations intended to address climate change; possible significant costs and liabilities resulting from pipeline integrity and other similar programs and related repairs; the impact of climate change; increased dependence on technology that may hinder the Company’s business if such technologies fail; our ability to continue to access the credit and capital markets to execute our business strategy; the impact of adverse economic conditions on our customers; and other risk factors discussed under Part I, Item 1A, Risk Factors, and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Cautionary Statement for the Purposes of the Safe Harbor under the Private Securities Litigation Reform Act of 1995 in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, which should be read in conjunction with the forward-looking statements in this report. Atmos Energy undertakes no obligation to update or revise any of our forward-looking statements whether as a result of new information, future events, or otherwise.

MATERIALITY STATEMENT Throughout this report, we report on issues material to our stakeholders in this context. It should not be confused with materiality for financial or regulatory purposes. Issues deemed material for the purposes of this report may not be considered material for SEC reporting purposes.

Overview and Vision

Atmos Energy Corporation (Atmos Energy), an S&P 500 company headquartered in Dallas, Texas, is the country’s largest natural gas-only distributor. We safely deliver reliable, efficient, and abundant natural gas to more than 3.3 million residential, commercial and public authority and industrial customers in over 1,400 communities across eight states. Atmos Energy also manages proprietary pipeline and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas.

Our vision is for Atmos Energy to be the Safest provider of natural gas services. We aim to be recognized for Exceptional Customer Service, for being a Great Employer, and for achieving Superior Financial Results.

Our Environmental, Social and Governance (ESG) strategy aligns with our vision of being the safest provider of natural gas, with our culture founded on AtmoSpirit principles, and with our purpose and corporate strategy. In fiscal year 2022, a team of senior leaders defined material topics that align with our vision, principles, purpose, strategy, and geographic footprint. These material topics affect our customers, employees, communities, regulatory agencies, and other stakeholders in the regions where we operate. The material topics support our vision by promoting investing in safety, focusing on operational and environmental sustainability, hiring and training a diverse and engaged workforce, and Fueling Safe and Thriving Communities.

Employees

Atmos Energy’s culture, AtmoSpirit, has been the foundation of our enduring success for over 25 years. AtmoSpirit principles, listed below, reflect the beliefs and behaviors we embrace as a company and strive to embody as individuals at work, in our communities, and at home.

In their first few weeks, every Atmos Energy employee is introduced to the AtmoSpirit principles and attends Atmos Energy Essentials, an introductory program facilitated by fellow employees who exemplify AtmoSpirit.

Financial Overview

Atmos Energy is committed to creating sustainable, long-term value. In fiscal year 2023, earnings per diluted share rose for the 21^st consecutive year, and dividends increased for the 39^th consecutive year. We invested $2.8 billion in modernizing our distribution and transmission system. Our consistent investment in the safety and reliability of our assets supports our 6% to 8% long-term earnings and dividend per share growth target.

Customers

Atmos Energy has a long-standing tradition of Fueling Safe and Thriving Communities. We have grown from 279,000 customers in 1983 to more than 3.3 million customers today. With over 79,000 miles of distribution and transmission pipelines, our company has regulated utility operations in Colorado, Kansas, Kentucky, Louisiana, Mississippi, Tennessee, Texas, and Virginia. We safely provide reliable, efficient and abundant natural gas to residential, commercial, and industrial customers. To foster a positive customer experience, we encourage feedback through surveys and promote natural gas safety.

Operations Overview

Atmos Energy started in the Panhandle of Texas in 1906 and has since grown to become the largest natural gas-only distributor in the U.S., with operations in eight states. We work closely with state and federal regulators to safely deliver reliable, efficient, and abundant natural gas across all our divisions.

• Atmos Pipeline-Texas (APT) Division
• Colorado-Kansas Division
• Kentucky/Mid-States Division
• Louisiana Division
• Mid-Tex Division
• Mississippi Division
• West Texas Division

Map of Our Service Areas

We also own and operate 17 underground gas storage facilities, totaling over 66 billion cubic feet (Bcf) in working capacity in Kansas, Kentucky, Mississippi, and Texas. Atmos Pipeline-Texas, with approximately 5,700 miles of transmission pipelines across the state, manages approximately 80% of this working storage capacity. It provides transportation and storage services to local distribution companies behind its intrastate pipeline system.

Bethel Underground Gas Storage

The Bethel Underground Gas Storage facility, owned and operated by Atmos Pipeline–Texas, consists of three caverns solution-mined in domal salt. Two caverns, previously placed in service in 1989 and 1991, historically have provided large volumes of gas (up to 600,000 million cubic feet per day; MCFD) to the APT pipeline system during periods of high demand or supply disruptions. Given the significant growth in north Texas, additional storage capacity was needed to maintain safe and reliable service to our APT customers. A third cavern was placed into service in December 2022, providing an incremental 750,000 MCFD, positioning APT to continue to meet the growing demand of north Texas.

Industry Quick Facts^[1]

Natural gas is an important part of the energy solution in the United States even as renewable energy sources are developed and explored. Natural gas is affordable, reliable, and vital in maintaining the resiliency of our nation’s energy system, contributing to a lower carbon economy that meets our nation’s climate goals.^[1] The U.S. Energy Information Administration projects natural gas to be 30% to 50% less than the price of other fuels through 2050, making it a competitive energy source for consumers well into the future.^[2]

The frequency and severity of extreme weather events highlight the importance of reliable natural gas systems, diversified supply portfolios, system versatility, and underground storage capacity to fuel our energy needs now and in the future. Atmos Energy is in the business of safely transporting a reliable and efficient product, that helps communities grow and thrive. We create jobs, help protect the environment, store natural gas to meet customer demand, maintain system resiliency throughout the year, and provide efficient energy access to families across America.

[1] Source: American Gas Association Playbook

[2] Source: EIA Annual Energy Outlook 2020 report and AGA 2024 Playbook