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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, 2021
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 April 30, 2021.
ClassShares Outstanding
Common stockNo Par Value130,671,944



GLOSSARY OF KEY TERMS
 
AECAtmos Energy Corporation
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
LIBORLondon Interbank Offered Rate
McfThousand cubic feet
MMcfMillion cubic feet
Moody’sMoody’s Investors Services, Inc.
NTSBNational Transportation Safety Board
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
SIRSystem Integrity Rider
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,
2021
September 30,
2020
 (Unaudited)
 (In thousands, except
share data)
ASSETS
Property, plant and equipment$16,752,585 $15,957,221 
Less accumulated depreciation and amortization2,712,997 2,601,874 
Net property, plant and equipment14,039,588 13,355,347 
Current assets
Cash and cash equivalents865,311 20,808 
Accounts receivable, net (See Note 5)469,595 230,595 
Gas stored underground50,043 111,950 
Other current assets235,485 107,905 
Total current assets1,620,434 471,258 
Goodwill731,257 731,257 
Deferred charges and other assets (See Note 8)3,017,531 801,170 
$19,408,810 $15,359,032 
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, 2021 — 130,667,109 shares; September 30, 2020 — 125,882,477 shares
$653 $629 
Additional paid-in capital4,853,703 4,377,149 
Accumulated other comprehensive income (loss)140,471 (57,589)
Retained earnings2,826,098 2,471,014 
Shareholders’ equity7,820,925 6,791,203 
Long-term debt7,316,404 4,531,779 
Total capitalization15,137,329 11,322,982 
Current liabilities
Accounts payable and accrued liabilities263,597 235,775 
Other current liabilities607,525 546,461 
Current maturities of long-term debt177 165 
Total current liabilities871,299 782,401 
Deferred income taxes1,658,000 1,456,569 
Regulatory excess deferred taxes639,496 697,764 
Regulatory cost of removal obligation465,104 457,188 
Deferred credits and other liabilities637,582 642,128 
$19,408,810 $15,359,032 
See accompanying notes to condensed consolidated financial statements.
3


ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
 Three Months Ended March 31
 20212020
(Unaudited)
(In thousands, except per
share data)
Operating revenues
Distribution segment$1,282,674 $933,005 
Pipeline and storage segment154,168 146,237 
Intersegment eliminations(117,769)(101,577)
Total operating revenues1,319,073 977,665 
Purchased gas cost
Distribution segment691,147 418,935 
Pipeline and storage segment113 202 
Intersegment eliminations(117,451)(101,254)
Total purchased gas cost573,809 317,883 
Operation and maintenance expense156,375 147,824 
Depreciation and amortization expense118,636 105,916 
Taxes, other than income88,449 74,604 
Operating income381,804 331,438 
Other non-operating income (expense)2,834 (2,989)
Interest charges26,096 22,171 
Income before income taxes358,542 306,278 
Income tax expense61,788 66,632 
Net income
$296,754 $239,646 
Basic net income per share$2.30 $1.95 
Diluted net income per share$2.30 $1.95 
Cash dividends per share$0.625 $0.575 
Basic weighted average shares outstanding129,161 122,916 
Diluted weighted average shares outstanding129,164 122,997 
Net income$296,754 $239,646 
Other comprehensive income (loss), net of tax
Net unrealized holding losses on available-for-sale securities, net of tax of $19 and $49
(66)(163)
Cash flow hedges:
Amortization and unrealized gain on interest rate agreements, net of tax of $39,887 and $312
138,005 1,053 
Total other comprehensive income137,939 890 
Total comprehensive income$434,693 $240,536 
See accompanying notes to condensed consolidated financial statements.
4


ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Six Months Ended March 31
 20212020
(Unaudited)
(In thousands, except per
share data)
Operating revenues
Distribution segment$2,159,324 $1,761,509 
Pipeline and storage segment313,881 294,413 
Intersegment eliminations(239,652)(202,694)
Total operating revenues2,233,553 1,853,228 
Purchased gas cost
Distribution segment1,102,219 816,493 
Pipeline and storage segment(1,131)301 
Intersegment eliminations(239,019)(202,043)
Total purchased gas cost862,069 614,751 
Operation and maintenance expense295,018 300,069 
Depreciation and amortization expense233,921 210,978 
Taxes, other than income161,901 143,211 
Operating income680,644 584,219 
Other non-operating income8,906 1,898 
Interest charges48,106 49,400 
Income before income taxes641,444 536,717 
Income tax expense127,012 118,398 
Net income$514,432 $418,319 
Basic net income per share$4.01 $3.43 
Diluted net income per share$4.01 $3.42 
Cash dividends per share$1.25 $1.15 
Basic weighted average shares outstanding128,098 122,015 
Diluted weighted average shares outstanding128,100 122,179 
Net income$514,432 $418,319 
Other comprehensive income (loss), net of tax
Net unrealized holding losses on available-for-sale securities, net of tax of $37 and $49
(129)(164)
Cash flow hedges:
Amortization and unrealized gain on interest rate agreements, net of tax of $57,282 and $623
198,189 2,106 
Total other comprehensive income198,060 1,942 
Total comprehensive income$712,492 $420,261 
See accompanying notes to condensed consolidated financial statements.
5


ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 Six Months Ended March 31
 20212020
(Unaudited)
(In thousands)
Cash Flows From Operating Activities
Net income$514,432 $418,319 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization expense233,921 210,978 
Deferred income taxes128,725 110,664 
Other(938)7,144 
Net assets / liabilities from risk management activities(1,954)1,310 
Net change in Winter Storm Uri regulatory asset (See Note 8)(2,093,534) 
Net change in other operating assets and liabilities(182,898)(114,640)
Net cash provided by (used in) operating activities
(1,402,246)633,775 
Cash Flows From Investing Activities
Capital expenditures(845,728)(994,737)
Debt and equity securities activities, net(5,506)(1,131)
Other, net5,171 4,631 
Net cash used in investing activities
(846,063)(991,237)
Cash Flows From Financing Activities
Net decrease in short-term debt (264,992)
Net proceeds from equity offering460,678 258,047 
Issuance of common stock through stock purchase and employee retirement plans8,291 8,321 
Proceeds from issuance of long-term debt2,797,346 799,450 
Cash dividends paid(159,348)(140,077)
Debt issuance costs(14,155)(7,738)
Net cash provided by financing activities
3,092,812 653,011 
Net increase in cash and cash equivalents
844,503 295,549 
Cash and cash equivalents at beginning of period20,808 24,550 
Cash and cash equivalents at end of period$865,311 $320,099 

See accompanying notes to condensed consolidated financial statements.
6


ATMOS ENERGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2021
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 three million residential, commercial, public authority and industrial customers through our six regulated distribution divisions, which at March 31, 2021, 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.    Unaudited Financial Information
These consolidated interim-period financial statements have been prepared in accordance with accounting principles generally accepted in the United States on the same basis, aside from accounting policy changes noted below, 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, 2020. 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, 2020. Because of seasonal and other factors, the results of operations for the six-month period ended March 31, 2021 are not indicative of our results of operations for the full 2021 fiscal year, which ends September 30, 2021.
Except as described in Note 6 and Note 8 to the unaudited condensed consolidated financial statements regarding recent activity related to our revolving credit facilities and securitization legislation, no events have occurred subsequent to the balance sheet date that would require recognition or disclosure in the unaudited condensed consolidated financial statements.
Significant accounting policies
Except as noted below, related to the change in policies as a result of our adoption of new accounting standards, 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, 2020.
During the second quarter of fiscal 2021, we completed our goodwill impairment assessment. 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.
Accounting pronouncements adopted in fiscal 2021
Effective October 1, 2020, we adopted new accounting guidance that requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model. Under this model, we estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. The new guidance also introduces a new impairment recognition model for available-for-sale debt securities that will require credit losses to be recorded through an allowance account. We adopted the new guidance using a modified retrospective method. The adoption of this standard did not have a material impact on our financial position, results of operations and cash flows and no adjustments were made to October 1, 2020 opening balances as a result of this adoption. As required under the modified retrospective method of adoption, results for the reporting period beginning after October 1, 2020 are presented under Accounting Standards Codification (ASC) 326, while prior period amounts are not adjusted. See Notes 5 and 12 to the unaudited condensed consolidated financial statements for further discussion of implementation of the standard.
Accounting pronouncements that will be effective after fiscal 2021
In March 2020, the Financial Accounting Standards Board (FASB) issued optional guidance which will ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The amendments provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected
7


by the cessation of the London Interbank Offered Rate (LIBOR). The amendments can be elected immediately, as of March 12, 2020, through December 31, 2022. We are currently evaluating if we will apply the optional guidance as we assess the impact of the cessation of LIBOR on our current contracts and hedging relationships and the potential impact on our financial position, results of operations and cash flows.
Regulatory assets and liabilities
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 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.
Significant regulatory assets and liabilities as of March 31, 2021 and September 30, 2020 included the following:
March 31,
2021
September 30,
2020
 (In thousands)
Regulatory assets:
Pension and postretirement benefit costs$143,685 $149,089 
Infrastructure mechanisms(1)
189,154 183,943 
Winter Storm Uri incremental costs(2)
2,093,534  
Deferred gas costs19,636 40,593 
Recoverable loss on reacquired debt4,165 4,894 
Deferred pipeline record collection costs30,415 29,839 
Other6,093 6,283 
$2,486,682 $414,641 
Regulatory liabilities:
Regulatory excess deferred taxes(3)
$702,393 $718,651 
Regulatory cost of removal obligation531,625 531,096 
Deferred gas costs122,864 19,985 
Asset retirement obligation20,348 20,348 
APT annual adjustment mechanism44,291 57,379 
Other25,828 19,554 
$1,447,349 $1,367,013 
 
(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)Includes extraordinary gas costs incurred during Winter Storm Uri and related carrying costs. See Note 8 to the unaudited condensed consolidated financial statements for further information. This amount is recorded within deferred charges and other assets on the condensed consolidated balance sheet as of March 31, 2021.
(3)Includes amount from the remeasurement of the net deferred tax liability included in our rate base as a result of the Tax Cuts and Jobs Act of 2017 (the "TCJA") and a Kansas legislative change enacted in fiscal 2020. Of this amount, $62.9 million as of March 31, 2021 and $20.9 million as of September 30, 2020 is recorded in other current liabilities. These liabilities are currently being returned to customers in most of our jurisdictions on a provisional basis over 15 to 69 years until formal orders establish the final refund periods. During the six months ended March 31, 2021, our effective income tax rate decreased from 22.1% to 19.8%, primarily due to the approval of the amortization of excess deferred income taxes to APT customers.

As of March 31, 2021, we received regulatory orders in most states to defer into a regulatory asset all expenses, beyond the normal course of business, related to Coronavirus Disease 2019 (COVID-19 or virus), including bad debt expense. As of March 31, 2021, no amounts have been recorded as regulatory assets or liabilities for expenses related to COVID-19.
3.    Segment Information

 We manage and review our consolidated operations through the following reportable segments:
8



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, 2020.
Income statements and capital expenditures for the three and six months ended March 31, 2021 and 2020 by segment are presented in the following tables:
 Three Months Ended March 31, 2021
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Operating revenues from external parties$1,281,826 $37,247 $— $1,319,073 
Intersegment revenues848 116,921 (117,769)— 
Total operating revenues1,282,674 154,168 (117,769)1,319,073 
Purchased gas cost
691,147 113 (117,451)573,809 
Operation and maintenance expense123,990 32,703 (318)156,375 
Depreciation and amortization expense85,667 32,969  118,636 
Taxes, other than income78,615 9,834  88,449 
Operating income303,255 78,549  381,804 
Other non-operating income (expense)(760)3,594  2,834 
Interest charges14,017 12,079  26,096 
Income before income taxes
288,478 70,064  358,542 
Income tax expense56,142 5,646  61,788 
Net income$232,336 $64,418 $ $296,754 
Capital expenditures$296,184 $92,735 $ $388,919 

 Three Months Ended March 31, 2020
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Operating revenues from external parties$932,296 $45,369 $— $977,665 
Intersegment revenues709 100,868 (101,577)— 
Total operating revenues933,005 146,237 (101,577)977,665 
Purchased gas cost
418,935 202 (101,254)317,883 
Operation and maintenance expense115,851 32,296 (323)147,824 
Depreciation and amortization expense76,265 29,651  105,916 
Taxes, other than income68,413 6,191  74,604 
Operating income253,541 77,897  331,438 
Other non-operating income (expense)(5,191)2,202  (2,989)
Interest charges10,797 11,374  22,171 
Income before income taxes
237,553 68,725  306,278 
Income tax expense50,489 16,143  66,632 
Net income$187,064 $52,582 $ $239,646 
Capital expenditures$373,313 $92,238 $ $465,551 
9


 Six Months Ended March 31, 2021
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Operating revenues from external parties$2,157,713 $75,840 $— $2,233,553 
Intersegment revenues1,611 238,041 (239,652)— 
Total operating revenues2,159,324 313,881 (239,652)2,233,553 
Purchased gas cost
1,102,219 (1,131)(239,019)862,069 
Operation and maintenance expense232,792 62,859 (633)295,018 
Depreciation and amortization expense168,537 65,384  233,921 
Taxes, other than income142,967 18,934  161,901 
Operating income512,809 167,835  680,644 
Other non-operating income75 8,831  8,906 
Interest charges24,729 23,377  48,106 
Income before income taxes
488,155 153,289  641,444 
Income tax expense102,127 24,885  127,012 
Net income$386,028 $128,404 $ $514,432 
Capital expenditures$602,200 $243,528 $ $845,728 
 Six Months Ended March 31, 2020
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Operating revenues from external parties$1,760,136 $93,092 $— $1,853,228 
Intersegment revenues1,373 201,321 (202,694)— 
Total operating revenues1,761,509 294,413 (202,694)1,853,228 
Purchased gas cost
816,493 301 (202,043)614,751 
Operation and maintenance expense230,203 70,517 (651)300,069 
Depreciation and amortization expense152,339 58,639  210,978 
Taxes, other than income128,656 14,555  143,211 
Operating income433,818 150,401  584,219 
Other non-operating income (expense)(3,237)5,135  1,898 
Interest charges27,159 22,241  49,400 
Income before income taxes
403,422 133,295  536,717 
Income tax expense86,601 31,797  118,398 
Net income$316,821 $101,498 $ $418,319 
Capital expenditures$777,560 $217,177 $ $994,737 

Balance sheet information at March 31, 2021 and September 30, 2020 by segment is presented in the following tables:
 March 31, 2021
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Property, plant and equipment, net$10,465,072 $3,574,516 $ $14,039,588 
Total assets$18,661,545 $3,799,037 $(3,051,772)$19,408,810 
10


 September 30, 2020
 DistributionPipeline and StorageEliminationsConsolidated
 (In thousands)
Property, plant and equipment, net$9,944,978 $3,410,369 $ $13,355,347 
Total assets$14,578,176 $3,647,907 $(2,867,051)$15,359,032 

4.    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 7 to the unaudited condensed consolidated financial statements, when the impact is dilutive. Basic and diluted earnings per share for the three and six months ended March 31, 2021 and 2020 are calculated as follows:

 Three Months Ended March 31Six Months Ended March 31
 2021202020212020
 (In thousands, except per share amounts)
Basic Earnings Per Share
Net income$296,754 $239,646 $514,432 $418,319 
Less: Income allocated to participating securities
199 178 350 314 
Income available to common shareholders
$296,555 $239,468 $514,082 $418,005 
Basic weighted average shares outstanding
129,161 122,916 128,098 122,015 
Net income per share — Basic
$2.30 $1.95 $4.01 $3.43 
Diluted Earnings Per Share
Income available to common shareholders$296,555 $239,468 $514,082 $418,005 
Effect of dilutive shares
    
Income available to common shareholders
$296,555 $239,468 $514,082 $418,005 
Basic weighted average shares outstanding
129,161 122,916 128,098 122,015 
Dilutive shares3 81 2 164 
Diluted weighted average shares outstanding
129,164 122,997 128,100 122,179 
Net income per share - Diluted
$2.30 $1.95 $4.01 $3.42 

5.    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, 2020. 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, 2021 and 2020.
11


Three Months Ended March 31, 2021Three Months Ended March 31, 2020
DistributionPipeline and StorageDistributionPipeline and Storage
(In thousands)
Gas sales revenues:
Residential$893,720 $ $596,315 $ 
Commercial326,182  230,779  
Industrial31,066  25,628  
Public authority and other20,227  14,662  
Total gas sales revenues1,271,195  867,384  
Transportation revenues30,973 151,565 28,504 154,748 
Miscellaneous revenues3,325 3,878 6,986 1,335 
Revenues from contracts with customers1,305,493 155,443 902,874 156,083 
Alternative revenue program revenues(1)
(23,313)(1,275)29,638 (9,846)
Other revenues494  493  
Total operating revenues$1,282,674 $154,168 $933,005 $146,237 

Six Months Ended March 31, 2021Six Months Ended March 31, 2020
DistributionPipeline and StorageDistributionPipeline and Storage
(In thousands)
Gas sales revenues:
Residential$1,485,554 $ $1,148,391 $ 
Commercial535,129  442,093  
Industrial55,774  50,553  
Public authority and other33,289  27,684  
Total gas sales revenues2,109,746  1,668,721  
Transportation revenues58,740 316,326 55,144 306,758 
Miscellaneous revenues5,721 9,026 13,772 6,490 
Revenues from contracts with customers2,174,207 325,352 1,737,637 313,248 
Alternative revenue program revenues(1)
(15,872)(11,471)22,887 (18,835)
Other revenues989  985  
Total operating revenues$2,159,324 $313,881 $1,761,509 $294,413 
(1)    In our distribution segment, we have weather-normalization adjustment mechanisms that serve to mitigate the effects of weather on our revenue. Additionally, 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 regulatorily determined revenue benchmark.
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. The receivable balances are short term and generally do not extend beyond one month. To minimize credit risk, we assess the credit worthiness of new customers, require deposits where necessary, assess late fees, pursue collection activities and disconnect service for nonpayment. After disconnection, accounts are written off when deemed uncollectible.
As described in Note 2 to the unaudited condensed consolidated financial statements, on October 1, 2020, we adopted new accounting guidance which requires credit losses on our accounts receivable to be measured using an expected credit loss model over the entire contractual term from the date of initial recognition. At each reporting period, we assess the allowance for uncollectible accounts based on historical experience, current conditions and consideration of expected future conditions. Circumstances which could affect our estimates include, but are not limited to, customer credit issues, the level of natural gas prices, customer deposits and general economic conditions.
12


Due to the COVID-19 pandemic, in March 2020 we temporarily suspended disconnecting customers for nonpayment and stopped charging late fees. We are actively working with our customers experiencing financial hardship to offer flexible payment options and directing them to aid agencies for financial assistance. Our allowance for uncollectible accounts reflects the expected impact on our customers’ ability to pay when we resume disconnection activity.
Rollforwards of our allowance for uncollectible accounts for the three and six months ended March 31, 2021 are presented in the table below. The allowance excludes the gas cost portion of customers’ bills for approximately 78 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.
 Three Months Ended March 31, 2021