Atmos Energy

Phase A — Understand the business

Lens 1 · Company Overview

Atmos Energy is the largest pure-play regulated natural-gas-only utility in the US — no electricity, no unregulated retail, no generation. It does two things, both rate-regulated:

1. Distribution segment — delivers gas to ~3.4 million residential, commercial, public-authority and industrial customers across eight states (Texas, Louisiana, Mississippi, Tennessee, Kentucky, Virginia, Colorado, Kansas) through six divisions. Mid-Tex (Dallas/Fort Worth, 1.83M meters) is the crown jewel.
2. Pipeline & Storage segment — Atmos Pipeline–Texas (APT), one of the largest intrastate pipelines in Texas (Barnett Shale / Permian / Gulf Coast reach) plus five underground storage facilities and a 21-mile Louisiana transmission line. Over 80% of segment revenue is APT services, much of it transporting gas to Atmos's own Mid-Tex distribution division.

The business model in one sentence: spend capital modernizing pipe → get it into rate base under fast-recovery mechanisms → earn an authorized return on equity (~9.3%–9.8% across jurisdictions, 11.45% at APT) → repeat. The "product" is regulatory execution, not gas. Gas cost is a pure pass-through — purchased-gas-cost adjustment mechanisms mean distribution operating income is "generally not affected by fluctuations in the cost of gas."

Contract / payment structure: rates set by ~8 state commissions + the Texas Railroad Commission (APT). The differentiator is regulatory lag minimization — formula rate mechanisms in four states + infrastructure surcharges (GRIP in Texas, SSIR, SIR, PRP, SAVE, etc.) in all states. Management states it can begin recovering ~95% of capex within six months and substantially all within twelve months. Weather Normalization Adjustments (WNA) cover ~97% of residential/commercial revenue in seven states, and bad-debt riders cover ~89% — so weather and gas-price volatility are largely neutralized at the margin line.

Suppliers (gas procurement, competitively bid): ARM Energy, Cima Energy, ConocoPhillips, ECO Energy, EnLink, Sequent, Symmetry, Targa, Tenaska, Texla. Customers: ~3.4M end meters; APT's biggest customer is Atmos's own Mid-Tex division. Competitors: other gas LDCs (ONE Gas, NJR, Spire, Southwest Gas, NW Natural) — but they don't compete for territory (franchises are non-exclusive but de facto monopolies); the real competition is electrification and alternative energy.

Lens 2 · Supply Chain

Map: gas producers/marketers → interstate & intrastate pipelines + storage → APT (intrastate Texas) → Atmos distribution divisions → 3.4M end customers.

• Upstream (gas molecules): independent producers + the 10 named marketers above. Bought firm, base-load + peaking, at market prices via competitive bid. Peak-day availability ~5.4 Bcf; FY25 peak-day demand 4.2 Bcf (Feb 19, 2025). Critically — Atmos does not take commodity price risk (full pass-through), so this leg is a reliability concern, not a margin concern.
• Transport into the system: 33 pipeline transportation companies (interstate + intrastate), many with "no-notice" storage service for daily balancing. Mid-Tex gas is delivered primarily by Atmos's own APT division — a vertically-integrated chokepoint Atmos controls.
• The asset itself: the pipe in the ground. ~$26B of capex coming 2026–2030 (below) is the supply chain — replacing steel/cast-iron with modern materials. The single-source dependency that matters most is internal: APT is the critical artery for Mid-Tex (the largest, most profitable division), and APT's recent Line WA Phase II (44 miles of 36-inch pipe west of Fort Worth) plus five interconnects (~100,000 Mcf/d added) directly serve DFW growth.
• Materials/labor inflation is the named cost risk to the capex program; recovery is "ultimately" assured by the regulatory framework but "full recovery is not assured."

Chokepoint verdict: the chain is unusually self-contained for a utility — Atmos owns the most important midstream link (APT) and faces no commodity-margin exposure. The vulnerability is concentration (see Lens 13), not supplier fragility.

Lens 3 · Competitive Advantages (moats)

This is a textbook regulated-monopoly moat, and an above-average one within the LDC peer group.

1. Regulated geographic monopoly + non-exclusive franchises. 1,010 franchises at FY25, terms 5–35 years, "historically… successfully renewed." No competitor builds a parallel gas network.
2. Best-in-class regulatory lag reduction — the real differentiator. Recovering ~95% of capex within 6 months is a structural advantage vs. peers stuck in multi-year rate-case cycles. It converts a capital-intensive utility into a near-real-time earner on invested capital, which is why ATO sustains a higher multiple than the LDC group.
3. Scale. ~$21B rate base (FY25), the largest pure-play gas LDC — gives cost-of-capital and procurement advantages smaller peers (ONE Gas ~$4.6B cap, NJR ~$4.8B, Spire ~$4.4B) can't match.
4. Texas regulatory tailwind. Texas HB 4384 (effective Q3 FY25) accelerates infrastructure-spending recovery and added $93.6M to first-half FY26 results — a state-level structural edge given ~70%+ of the business is Texas-centric.
5. Bargaining power: strong over customers (monopoly, inelastic demand for heating), weak-but-managed over regulators (the entire game), neutral over gas suppliers (competitive bid, pass-through).

The moat's soft underbelly: it is granted by regulators and can be clawed back by them — and the NTSB safety findings (Lens 10) hand Mississippi/PHMSA regulators exactly the leverage to do so. A moat made of regulatory goodwill erodes fastest when you kill customers.

Lens 4 · Segments

All `` from the consolidated and segment tables. Atmos reports two segments.

Net income by segment (fiscal years, $K):

Operating income by segment ($K): Distribution 963,390 (FY25) vs 854,434 (FY24), +12.8%; Pipeline & Storage 596,581 vs 500,928, +19.1%. Consolidated operating income 1,559,971 (FY25) vs 1,355,362 (FY24), +15.1%.

Consolidated revenue ($K): Total operating revenues 4,702,755 (FY25) vs 4,165,187 (FY24) vs 4,275,357 (FY23). Note revenue is a noisy line for ATO because it includes pass-through gas cost (total purchased gas cost 1,066,054 FY25) — operating income is the signal, revenue is the noise.

Distribution by division — operating income (FY25, $K): Mid-Tex 532,570 (the engine, +14.6% YoY), Kentucky/Mid-States 112,894, Louisiana 109,268, Mississippi 94,654 (–2.9%), West Texas 73,138, Colorado-Kansas 37,341 (–12.8%). Mid-Tex alone is ~55% of distribution operating income.

Trend & cause: Pipeline & Storage is the faster-accelerating segment (APT GRIP filings + through-system spread capture + Texas HB 4384). Distribution growth is rate-adjustment-driven (+$184.1M rate increases FY25, mostly Mid-Tex) plus modest customer growth (+$26.7M). The geographic story is Texas-concentration intensifying — Mid-Tex + West Texas + APT are all Texas, and 76% of recent customer adds are Texas. This is the moat and the concentration risk in one fact.

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Phase B — Measure performance

Lens 5 · Earnings Result (latest print — fiscal Q2 2026, period ended 2026-03-31)

The latest reported quarter beat and management RAISED full-year guidance — a genuinely strong print.

Q2 FY26 consolidated ($K, vs Q2 FY25):

• Total operating revenues 1,962,402 vs 1,950,502 (+0.6% — flat because gas-cost pass-through fell; purchased gas cost dropped to 667,318 from 779,233)
• Operating income 764,804 vs 628,939 (+21.6%)
• Net income 581,899 vs 485,576 (+19.8%)
• Diluted EPS $3.47 vs $3.03 (+14.5%) — note EPS grows slower than net income due to share dilution (the equity-funding model; see Lens 10/13)

Six months FY26: net income 984,863 vs 837,434 (+17.6%); diluted EPS $5.92 vs $5.26 (+12.5%).

Segment drivers (Q2): Distribution operating income +17.0% (+$83.0M rate adjustments, Mid-Tex-led); Pipeline & Storage operating income +37.0% (+$20.3M GRIP rate adjustments, +$8.6M APT through-system on wider spreads).

vs consensus: Q2 adjusted EPS $3.47 beat the Zacks consensus $3.37 by ~3%.

Guidance — RAISED: FY2026 EPS guidance lifted to $8.40–$8.50 from $8.15–$8.35 at the Q2 report; quarterly dividend $1.00 ($4.00 annualized, +14.9%).

Balance-sheet flags: Operating cash flow for H1 FY26 was $1,031.5M, down from $1,205.0M — flagged as "timing of gas cost recoveries," a working-capital timing item, not a deterioration. Capex H1 FY26 $2,036.9M (well ahead of H1 FY25's $1,730.9M — front-loaded). Equity capitalization 60.9% (Mar 31, 2026). Total liquidity ~$4.1B.

Market reaction: the beat + raise "reinforced [a] bullish earnings growth narrative" per Simply Wall St; the stock trades ~$169.64 (2026-06-17), mid-range of its 52-week $149.98–$192.51.

Unusual vs own history: APT captured spreads averaged $4.35 in H1 FY26 vs $1.80 prior year — a ~$0.08/share through-system tailwind that is weather/basis-driven and not structurally recurring (management attributed it to constrained takeaway + warm winter). Strip that out and the underlying rate-base-driven growth is still solid but the headline beat is partly cyclical.

Lens 6 · Earnings Calls (sentiment trend)

No transcripts on disk; sourced ``. Across the FY26 calls (Q1 reported Feb, Q2 reported May), management tone is confident and consistent — the classic "boring on purpose" utility cadence with a clear escalation:

• Recurring phrases: "safety and reliability," "reduce regulatory lag," "modernize our system," "6–8% EPS growth," "well-capitalized."
• What's new / escalating: explicit dividend +14.9% language and a raised FY26 range — management is leaning into the growth story, not hedging. The $26B / 2026–2030 capex plan and the rate-base-to-$40-44B-by-2030 framing are now front-and-center.
• What they conspicuously do NOT volunteer on calls: the NTSB Mississippi findings. The fatal incidents and the March 26, 2026 probable-cause finding are disclosed in the 10-Q legal note but are not a call talking point — a tone gap worth watching.

Sentiment trend: steady-to-improving on the financial narrative; silent on the safety overhang. That asymmetry is itself a signal.

Lens 7 · Comps

ATO is the largest pure-play regulated gas LDC — peers are smaller and ATO carries a premium multiple for its rate-base growth + regulatory-lag advantage. Multiples are ``, mid-2026, and vary by aggregator (I show ranges and label rather than fabricate precision).

5-year average ROE: n/a as a clean 5-yr average; spot signal: FY25 net income $1,198.8M on ~$13.56B equity ≈ ~8.8% ROE, consistent with authorized ROEs of 9.3–9.8% net of regulatory lag and equity-heavy cap structure.

Read: ATO trades at a premium to the LDC peer group (forward ~19–21x vs OGS ~20x trailing, NJR mid-teens) and yields less (2.25% vs peers' 3–4%). The market is paying up for (a) the largest, fastest-growing rate base, (b) the regulatory-lag moat, and (c) the Dividend-Aristocrat compounding. You are not buying this cheap relative to the group — the premium is the bull case and the bear case simultaneously.

Lens 8 · Stock-Price Catalysts (last ~5 years pattern; ``)

The pattern for ATO is classic bond-proxy utility — it reacts to (1) the rate-base/EPS-growth narrative, (2) rate-case outcomes, and increasingly (3) the data-center/Texas-demand secular story; it is relatively insulated from gas-price swings (pass-through).

• Earnings beats + guidance raises move it modestly (the Q2 FY26 beat-and-raise to $8.40–8.50 reinforced the bull narrative).
• Interest rates are the dominant macro driver — as a ~2.25%-yield, 60%-equity-financed, capital-intensive name, ATO is rate-sensitive; the Moody's downgrade to A2 (April 2, 2025, stable outlook) is a marginal cost-of-capital negative.
• Texas regulatory wins (HB 4384, GRIP approvals) are now genuine catalysts given Texas concentration.
• The new variable: the Mississippi safety findings (March 26, 2026). Utility stocks can de-rate sharply on safety/liability events (cf. PG&E). So far the market has shrugged (stock mid-range), but a PHMSA penalty or civil litigation could be a discrete negative catalyst the tape has not yet priced.
• 52-week range $149.98–$192.51; ~10% below the average analyst target of $190.14.

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Phase C — Judge people & books

Lens 9 · Management

CEO: J. Kevin Akers — named President & CEO October 2019 (~6.5-year tenure); a long-tenured Atmos insider who rose through operations (former president of the Mississippi and then Kentucky/Mid-States divisions).

1. Track record: has delivered the financial story — net income $885.9M (FY23) → $1,042.9M (FY24) → $1,198.8M (FY25), 43 consecutive years of dividend increases sustained on his watch, rate base ~doubling toward $40-44B by 2030. The execution machine is genuinely excellent.
2. Tenure & skin in the game: insiders own ~2.5% of the company — typical for a large-cap utility, not founder-level alignment. Comp ~$8.45M total FY25 (salary $1.15M, bonus $2.10M, stock $5.18M) — heavily equity/performance-weighted, with performance RSUs tied to a cumulative-EPS target.
3. Capital-allocation history: ~85–87% of capex is safety/reliability (rate-base accretive); funds growth with a disciplined ~60% equity / 40% debt structure; ATM + forward-equity program to fund without over-levering. ROE ~8.8% — sound but not spectacular, by design (regulated). No buybacks (issues equity to fund growth — the right call for a rate-base compounder).
4. Red flags (governance): none of the classic ones — no related-party deals, no promotional behavior, comp is in line with peers. The real red flag is operational, not financial: the NTSB's finding that Atmos's leak-management and integrity-management programs (i.e., management systems) caused two deaths is a leadership-accountability question, not just an accounting one (Lens 10).
5. Archetype: professional manager / operator-CEO running a mature regulated compounder — exactly the right profile for this stage. Average management tenure 7.9 yrs, board 11.8 yrs — stable, deep.

Lens 10 · Forensic Red Flags

Accounting quality is high and clean; the genuine red flags are (a) safety/liability and (b) the equity-dilution funding model — not the books.

Accounting / financial-statement review:

• Revenue recognition: clean — regulated tariff revenue with pass-through gas cost; the risk is that revenue is inflated/deflated by gas-cost pass-through (immaterial to income). No aggressive recognition.
• Regulatory assets/liabilities: large but normal for a utility — regulatory assets $708.5M, regulatory liabilities $1,277.9M (Mar 31, 2026). Includes $424.6M infrastructure-mechanism deferrals (recoverable). Worth monitoring that deferred costs are ultimately recovered, but the fast-recovery framework makes impairment risk low.
• Cash flow vs earnings: FY25 operating cash flow $2,049.5M vs net income $1,198.8M — cash flow comfortably exceeds earnings (D&A $734.7M + deferred taxes $268.6M), healthy. H1 FY26 OCF dipped on gas-cost-recovery timing — a working-capital item, not an earnings-quality flag.
• SBC: tiny ($12.7M FY25) — no non-GAAP flattering. Atmos reports essentially on a GAAP basis. Clean.
• Goodwill/intangibles: not a material concern; the balance sheet is real PP&E (pipe).
• Leases: modest ($354.8M total lease liabilities); three new service-center leases commencing FY26 ($116.5M future payments). Immaterial.
• Debt: total long-term debt $8,982M (Sept 30, 2025), all unsecured senior notes, well-laddered (only $10M due FY26, $500M FY27, $7,775M thereafter). Total-debt-to-cap 41% (covenant max 70%) — ample headroom. Moody's A2 / investment grade.
• The one financial "watch": persistent share issuance. Shares outstanding rose from ~140.9M (Sept 2022) to ~161.6M (Sept 2025) → ~165–166M now — ~5–6M shares/year issued via public offerings + forward sales + ATM ($1.7B program, $827.1M available). This is how the growth is funded and it is why EPS grows slower than net income (FY26 6M: NI +17.6% but EPS +12.5%). Not a red flag in itself (standard for a rate-base compounder), but it caps per-share upside and means dilution is a permanent headwind to watch. NOL carryforwards $435.3M (tax-effected) provide a real cash-tax shield.

Regulatory findings (required sub-section):

• SEC Litigation Releases & AAERs: None. Verified via SEC EDGAR EFTS (LR + AAER) for 2021-06-23 to 2026-06-23.
• 10-K Item 3 / 10-Q Note 11 (Legal Proceedings) — MATERIAL, quote directly: Two fatal natural-gas incidents under active investigation. Jackson, Mississippi — incidents Jan 24 & 27, 2024, one fatality; NTSB issued its final report March 26, 2026 with a safety-recommendation letter to Atmos. Avondale, Louisiana — incident Dec 2, 2024, one fatality; NTSB preliminary report Dec 30, 2024, investigation ongoing. Management's position: "any amounts exceeding the accruals will not have a material adverse impact." That is management's opinion, not a resolved outcome.
• Non-SEC enforcement (web search): The NTSB final report (2026-03-26) determined the probable cause of the Jackson explosions was "Atmos Energy Corporation's inadequate leak management program, which allowed… known natural gas leaks… to be left unrepaired for at least 8 weeks," with contributing factors of an "inadequate integrity management program" and an "ineffective public awareness program." The NTSB also found Atmos "did not maintain complete records for many of its service lines in Mississippi.". PHMSA, the Mississippi PSC and other regulators are co-parties to the investigation; as of this dossier no specific PHMSA civil-penalty amount or DOJ charge is confirmed in public sources — the exposure is open-ended and unquantified.

Forensic verdict: the accounting is clean and conservative (this is a well-run utility, not a financial-engineering story). The forensic risk is physical and legal — the NTSB has put Atmos's own safety management systems on record as the probable cause of two deaths, which (a) invites PHMSA/state penalties and civil litigation of unknown size, and (b) hands rate regulators a reason to scrutinize the very recovery mechanisms that are the moat.

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Phase D — Project & stress-test

Lens 11 · Forward Projection (EPS, next three fiscal years — FY2026/27/28)

Built bottom-up from the latest actuals + management's own framework. No forecast.ts logged (unattended --watchlist run).

Anchors: FY25 diluted EPS $7.46. Management raised FY26 guidance to $8.40–$8.50. Long-term framework: 6–8% EPS growth off the 2026 midpoint, dividend +~15%, rate base $21B → $40-44B by 2030, ~$26B capex 2026–2030, targeting ~$10.80–$11.20 EPS by 2030.

Input lines (base case): (1) rate-base growth ~13–14%/yr drives the bulk; (2) ~95% fast recovery keeps lag minimal; (3) ~3–4% annual share dilution from the equity-funding model is the principal drag pulling net-income growth (~mid-teens) down to per-share growth (~7–8%); (4) Texas HB 4384 + APT through-system are tailwinds but the latter is partly cyclical; (5) Moody's A2 means a modestly higher cost of debt on the ~$8.9B+ note stack as it refinances.

Brier forecast (would-be, NOT logged): "ATO FY27 diluted EPS ≥ $9.00, p≈0.62" — high base-rate confidence given the regulated compounding machine and management's track record of hitting the 6–8% framework, discounted for dilution variability and the safety tail.

Lens 12 · Bull vs Bear

Bull case. The single best-run pure-play gas LDC in the US, compounding rate base ~13–14%/yr (→ $40-44B by 2030) behind a regulatory-lag machine that recovers ~95% of capex within six months — a structural edge peers lack. 43 straight years of dividend increases (one of only three utility Dividend Aristocrats), +15% latest hike, 6–8% durable EPS growth visible through 2030. Texas concentration is a feature in 2026: HB 4384 accelerates recovery, DFW + Permian growth + the Texas data-center/gas-power demand wave feed both Mid-Tex distribution and APT throughput. Pristine balance sheet (41% debt/cap, A2, well-laddered, no commodity-margin risk). A beat-and-raise just lifted FY26 to $8.40–8.50. This is the definition of a sleep-well-at-night compounder.

Bear case (2–3 things that could permanently impair).

1. Safety/liability de-rating. The NTSB named Atmos's own management systems as the probable cause of two fatal explosions. A material PHMSA penalty, civil verdicts, or — worst case — a regulator-imposed acceleration of pipe replacement or a clawback of favorable recovery mechanisms would hit both earnings and the multiple. Utilities can de-rate violently on safety/liability (the tail is real even if the base case is "immaterial").
2. Valuation + rate sensitivity. At ~20x forward and a 2.25% yield (a premium to the 3–4%-yielding peer group), ATO already prices the growth. It is a long-duration bond proxy — a higher-for-longer rate regime compresses the multiple regardless of operational execution. ~10% below average target leaves thin margin of safety.
3. The dilution tax + electrification drift. Funding ~$26B of capex with ~3–4%/yr equity issuance permanently caps per-share compounding below net-income growth. Layer on the multi-decade secular risk that building electrification/decarbonization policy slowly shrinks the gas-distribution franchise, and the terminal-value story has a question mark a pure-play gas name can't fully answer.

Pre-mortem (18 months out, thesis broke): the most likely break is #1 compounding into #2 — a PHMSA penalty + plaintiff verdicts from Mississippi/Louisiana hit the headlines, a state commission opens a prudence review of deferred safety costs, and the market re-rates ATO from "premium compounder" to "utility with a liability overhang" just as rates stay elevated — the multiple goes from ~20x to ~16x and the stock is down 20–25% even with EPS still growing.

Multiples too high? Relative to the LDC group, yes, modestly — but the premium is earned by the growth rate and moat. The asymmetry is that the premium gives back fast if either the growth or the safety narrative cracks.

Contrarian view (what the market is refusing to see): the consensus treats ATO as a pure beneficiary of the Texas data-center gas-demand boom while under-weighting that the same growth requires building/operating more pipe in a company the NTSB just said can't reliably manage the leaks on the pipe it already has. The bull story (more Texas pipe) and the bear story (Atmos's pipe-safety management failed fatally) run through the same asset base.

Lens 13 · Devil's Advocate (short-seller)

Dismantling the bull case.

• Where revenue/earnings is concentrated: Texas is the whole story. Mid-Tex is ~55% of distribution operating income; add West Texas + APT and the company is overwhelmingly a leveraged bet on Texas regulation and Texas gas economics. The 10-Q explicitly lists "the concentration of our operations in Texas" as a risk factor. One adverse turn at the Texas Railroad Commission or a Texas-specific shock (winter-storm liability redux — recall Uri required $3.5B of Texas securitization bonds + $95M Kansas securitization) hits a disproportionate share of earnings.
• Why the moat is weaker than bulls think: the moat is regulatory permission, and Atmos just gave its regulators (Mississippi PSC, PHMSA, and by reputational spillover the Texas RRC) a documented, fatal safety failure as ammunition. The fast-recovery mechanisms that are the moat are discretionary regulatory grants — a prudence review of deferred safety costs is exactly the lever that could turn the moat into a liability.
• Most dangerous competitor bulls underestimate: not another LDC — it's electrification + decarbonization policy and the slow structural decline of residential gas hookups in a warming, electrifying economy. A pure-play gas distributor has no Plan B; diversified utilities (with electric + renewables) do.
• Worst capital-allocation / accounting concerns: none egregious — but the permanent ~3–4%/yr dilution is a quiet wealth transfer from per-share growth to balance-sheet growth, and the large regulatory-asset balance ($708.5M) assumes recovery that a hostile post-incident commission could challenge.
• What must hold for today's price: (1) 6–8% EPS growth uninterrupted through 2030; (2) the Mississippi/Louisiana liabilities stay "immaterial"; (3) rates don't stay high enough to compress a 20x multiple; (4) Texas stays a tailwind, not a tail risk. If growth disappoints by 20–30% (say EPS growth halves to 3–4% on a safety-cost drag + dilution + a soft rate cycle), a premium utility multiple is unjustifiable and the stock could see ~16x × ~$8.7 ≈ $140, ~17% below spot, before any liability charge.
• The single scenario that permanently impairs: a catastrophic, clearly-Atmos-fault incident in a major Texas market (the Uri/PG&E template) triggering a state-led prudence review that strips the fast-recovery mechanisms — converting the best regulatory framework in the LDC space into the most scrutinized. Low probability, but the NTSB findings just raised it from "tail" to "named."

Lens 14 · Management Questions (ordered by information value)

1. Post the NTSB final report, what is your quantified exposure (PHMSA penalty range, civil-litigation reserves, accrued vs. possible) for the Jackson MS and Avondale LA incidents, and why do you still characterize it as "not material"?
2. The NTSB found your leak-management and integrity-management programs were the probable cause of two deaths — what specific, board-overseen changes have you made to those systems (not just the pipe), and across how many of your 8 states?
3. How much of the ~$26B 2026–2030 capex is now accelerated/incremental specifically to remediate the safety/records deficiencies the NTSB identified, and is that incremental spend fully recoverable, or does it carry prudence risk?
4. Have any of your state commissions (especially the Texas RRC and Mississippi PSC) signaled a prudence review of your deferred safety costs or your formula-rate/infrastructure recovery mechanisms in light of the findings?
5. Quantify the Texas data-center / gas-power demand opportunity for both Mid-Tex distribution and APT — incremental load, capex, and rate-base contribution through 2030 — and how firm are those volumes?
6. APT captured spreads averaged $4.35 in H1 FY26 vs $1.80 prior year. How much of the FY26 raise is this cyclical spread capture vs. structural rate-base earnings, and what is a normalized through-system spread?
7. Your equity-funding model dilutes ~3–4%/yr. At what point does the dilution drag force a choice between the 6–8% EPS-growth target and the balance-sheet/credit-rating discipline?
8. Moody's downgraded you to A2 in April 2025 — what's the path back to A1, and what does the downgrade cost you in incremental interest on the ~$8.9B+ note stack as it refinances?
9. With ~70%+ of earnings in Texas, what is your concrete diversification or de-risking plan, and how do you stress-test a second Winter-Storm-Uri-scale Texas event?
10. What is your 10–20 year answer to building electrification and gas-decarbonization policy — is there any scenario in which the residential gas franchise structurally shrinks, and how is the rate base protected if so?
11. What ROE are you actually earning vs. authorized across jurisdictions, and where is the largest persistent regulatory-lag gap you have not yet closed?
12. How concentrated is APT's throughput among its largest non-affiliate shippers, and what is the contract tenor / renewal risk?
13. What is the realistic timeline and outcome range for the $599.2M of rate cases in progress (as of Mar 31, 2026)?
14. How do you think about total shareholder return at a 2.25% yield — well below the 3–4% LDC peer group — and is the dividend-growth-over-yield trade still right for your investor base?
15. What single risk on the 3–5 year horizon do you lose the most sleep over, and what would change your capital-allocation priorities?

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