Company: ATO
Filing Date: 2025-11-14
Form Type: 10-K
Source: 0000731802-25-000056
Chunk: 71

Company: ATMOS ENERGY CORP
Filing Date: 2025-11-14
Form: 10-K
Item: Item 7
Chunk 71
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 be claimed on tax returns.  The amount does not include interest and penalties that may be applied to these positions. See Note 15 to the consolidated financial statements for further details.

We maintain supply contracts with several vendors that generally cover a period of up to one year. Commitments for estimated base gas volumes are established under these contracts on a monthly basis at contractually negotiated prices. Commitments for incremental daily purchases are made as necessary during the month in accordance with the terms of individual contracts. Our Mid-Tex Division also maintains a limited number of long-term supply contracts to ensure a reliable source of gas for our customers in its service area which obligate it to purchase specified volumes at market and fixed prices.  At September 30, 2025, we were committed to purchase 73.4 Bcf within one year and 114.9 Bcf within two to three years under indexed contracts. At September 30, 2025, we were committed to purchase 21.0 Bcf within one year under fixed price contracts with a weighted average price of $2.70 per Mcf. 

Risk Management Activities

In our distribution and pipeline and storage segments, we use a combination of physical storage, fixed physical contracts, and fixed financial contracts to reduce our exposure to unusually large winter-period gas price increases. Additionally, we manage interest rate risk by entering into financial instruments to effectively fix the Treasury yield component of the interest cost associated with anticipated financings.

We record our financial instruments as a component of risk management assets and liabilities, which are classified as current or noncurrent based upon the anticipated settlement date of the underlying financial instrument. Substantially all of our financial instruments are valued using external market quotes and indices.

The following table shows the components of the change in fair value of our financial instruments for the fiscal year ended September 30, 2025 (in thousands):

Fair value of contracts at September 30, 2024$88,651 Contracts realized/settled(130,755)Fair value of new contracts5,181 Other changes in value40,335 Fair value of contracts at September 30, 20253,412 Netting of cash collateral— Cash collateral and fair value of contracts at September 30, 2025$3,412 

The fair value of our financial instruments at September 30, 2025, is presented below by time period and fair value source:

 Fair Value of Contracts at September 30, 2025 Maturity in years Source