Declares Second Quarter Dividend
TULSA, Okla., May 6, 2024 /PRNewswire/ -- ONE Gas, Inc. (NYSE: OGS) today announced its first quarter financial results, affirmed its 2024 financial guidance and declared its quarterly dividend.
"Efficient capital execution and our focus on safe operations position us well to serve a growing customer base," said Robert S. McAnnally, president and chief executive officer. "Based on our first quarter results, we remain on track to achieve the midpoint of our 2024 financial guidance."
FIRST QUARTER 2024 FINANCIAL RESULTS & HIGHLIGHTS
FIRST QUARTER 2024 FINANCIAL PERFORMANCE
ONE Gas reported operating income of $145.9 million in the first quarter 2024, compared with $149.2 million in the first quarter 2023, which primarily reflects:
These impacts were partially offset by:
Actual heating degree days across the Company's service areas were 4,741 for the first quarter 2024, 9 percent warmer than normal weather and 3 percent warmer than the same period last year. The impact on operating income was mitigated by weather normalization mechanisms.
Excluding interest related to KGSS-I bonds, net interest expense increased $1.7 million for the three months ending March 31, 2024, due primarily to the issuance of $300 million of 5.10 percent senior notes in December 2023 and the repayment of $300 million of 3.61 percent senior notes and $473 million of 1.10 percent senior notes in February and March 2024, respectively.
Income tax expense includes a credit for amortization of the regulatory liability associated with excess deferred income taxes (EDIT) of $10.1 million and $9.9 million for the three months ended March 31, 2024, and 2023, respectively.
Capital expenditures and asset removal costs were $179.4 million for the first quarter 2024 compared with $164.6 million in the same period last year, primarily representing expenditures for system integrity and extension of service to new areas.
REGULATORY ACTIVITIES UPDATE
In February 2024, Oklahoma Natural Gas filed its annual Performance-Based Rate Change application for the test year ended December 2023. The filing includes a requested $31.8 million base rate revenue increase, $2.4 million energy efficiency incentive and $12.8 million of EDIT to be credited to customers in 2025. A hearing is scheduled for June 4, 2024.
In March 2024, Kansas Gas Service submitted a general rate case requesting an increase in net base rates of $58.1 million. The filing's total request is for a $93.1 million increase, which includes $35.0 million in revenue increase that is already approved and collected through Gas System Reliability Surcharge filings. Kansas Gas Service proposed a performance-based ratemaking mechanism and a rate class designation for residential customers based on annual usage.
In March 2024, Texas Gas Service made a Gas Reliability Infrastructure Program (GRIP) filing for all customers in the West-North service area, requesting a $8.6 million increase to be effective in July 2024.
In February 2024, Texas Gas Service made a GRIP filing for all customers in the Central- Gulf service area, requesting a $12.3 million increase to be effective in June 2024.
2024 FINANCIAL GUIDANCE
ONE Gas affirmed the financial guidance it issued on Nov. 29, 2023, with 2024 net income expected to be in the range of $214 million to $231 million, or $3.70 to $4.00 per diluted share. Capital expenditures, including asset removal costs, are expected to be approximately $750 million in 2024.
EARNINGS CONFERENCE CALL AND WEBCAST
The ONE Gas executive management team will host a conference call on Tuesday, May 7, 2024, at 11 a.m. Eastern Standard Time (10 a.m. Central Standard Time). The call also will be carried live on the ONE Gas website.
To participate in the telephone conference call, dial 833-470-1428, passcode 395585, or log on to www.onegas.com/investors and select Events and Presentations.
If you are unable to participate in the conference call or the webcast, a replay will be available on the ONE Gas website, www.onegas.com, for 30 days. A recording will be available by phone for 7 days. The playback call may be accessed at 866-813-9403, passcode 784068.
ONE Gas, Inc. (NYSE: OGS) is a 100% regulated natural gas utility, and trades on the New York Stock Exchange under the symbol "OGS." ONE Gas is included in the S&P MidCap 400 Index and is one of the largest natural gas utilities in the United States.
Headquartered in Tulsa, Oklahoma, ONE Gas provides a reliable and affordable energy choice to more than 2.3 million customers in Kansas, Oklahoma and Texas. Its divisions include Kansas Gas Service, the largest natural gas distributor in Kansas; Oklahoma Natural Gas, the largest in Oklahoma; and Texas Gas Service, the third largest in Texas, in terms of customers.
For more information and the latest news about ONE Gas, visit onegas.com and follow its social channels: @ONEGas, Facebook, LinkedIn and YouTube.
Some of the statements contained and incorporated in this news release are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The forward-looking statements relate to our anticipated financial performance, liquidity, management's plans and objectives for our future operations, our business prospects, the outcome of regulatory and legal proceedings, market conditions and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. The following discussion is intended to identify important factors that could cause future outcomes to differ materially from those set forth in the forward-looking statements.
Forward-looking statements include the items identified in the preceding paragraph, the information concerning possible or assumed future results of our operations and other statements contained or incorporated in this news release identified by words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "should," "goal," "forecast," "guidance," "could," "may," "continue," "might," "potential," "scheduled," "likely," and other words and terms of similar meaning.
One should not place undue reliance on forward-looking statements, which are applicable only as of the date of this news release. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Those factors may affect our operations, markets, products, services and prices. In addition to any assumptions and other factors referred to specifically in connection with the forward-looking statements, factors that could cause our actual results to differ materially from those contemplated in any forward-looking statement include, among others, the following:
These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other factors could also have material adverse effects on our future results. These and other risks are described in greater detail in Part 1, Item 1A, Risk Factors, in our Annual Report. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Other than as required under securities laws, we undertake no obligation to update publicly any forward- looking statement whether as a result of new information, subsequent events or change in circumstances, expectations or otherwise.
APPENDIX
ONE Gas, Inc. CONSOLIDATED STATEMENTS OF INCOME
| ||||
Three Months Ended | ||||
(Unaudited) | 2024 | 2023 | ||
(Thousands of dollars, except | ||||
Total revenues | $ 758,320 | $ 1,032,143 | ||
Cost of natural gas | 383,003 | 665,799 | ||
Operating expenses Operations and maintenance |
132,783 |
126,683 | ||
Depreciation and amortization | 76,572 | 71,264 | ||
General taxes | 20,102 | 19,166 | ||
Total operating expenses | 229,457 | 217,113 | ||
Operating income | 145,860 | 149,231 | ||
Other income (expense), net | 3,508 | 2,581 | ||
Interest expense, net | (31,357) | (30,115) | ||
Income before income taxes | 118,011 | 121,697 | ||
Income taxes | (18,694) | (19,076) | ||
Net income | $ 99,317 | $ 102,621 | ||
Earnings per share |
$ 1.75 |
$ 1.85 | ||
Diluted | $ 1.75 | $ 1.84 | ||
Average shares (thousands) | ||||
Basic | 56,729 | 55,538 | ||
Diluted | 56,800 | 55,800 | ||
Dividends declared per share of stock |
$ |
0.66 |
$ |
0.65 |
ONE Gas, Inc. CONSOLIDATED BALANCE SHEETS
| ||
March 31, | December 31, | |
(Unaudited) | 2024 | 2023 |
Assets | (Thousands of dollars) | |
Property, plant and equipment Property, plant and equipment |
$ 8,606,475 |
$ 8,468,967 |
Accumulated depreciation and amortization | 2,368,521 | 2,333,755 |
Net property, plant and equipment | 6,237,954 | 6,135,212 |
Current assets Cash and cash equivalents |
11,509 |
18,835 |
Restricted cash and cash equivalents | 9,963 | 20,552 |
Total cash, cash equivalents and restricted cash and cash equivalents | 21,472 | 39,387 |
Accounts receivable, net | 324,505 | 347,864 |
Materials and supplies | 80,349 | 77,649 |
Natural gas in storage | 110,451 | 187,097 |
Regulatory assets | 94,692 | 75,308 |
Other current assets | 32,226 | 37,899 |
Total current assets | 663,695 | 765,204 |
Goodwill and other assets Regulatory assets |
283,851 |
287,906 |
Securitized intangible asset, net | 286,234 | 293,619 |
Goodwill | 157,953 | 157,953 |
Other assets | 134,350 | 131,100 |
Total goodwill and other assets | 862,388 | 870,578 |
Total assets | $ 7,764,037 | $ 7,770,994 |
ONE Gas, Inc. CONSOLIDATED BALANCE SHEETS (Continued)
| ||
March 31, | December 31, | |
(Unaudited) | 2024 | 2023 |
Equity and Liabilities | (Thousands of dollars) | |
Equity and long-term debt | ||
Common stock, $0.01 par value: | ||
authorized 250,000,000 shares; issued and outstanding 56,569,396 shares at March 31, 2024; | ||
issued and outstanding 56,545,924 shares at December 31, 2023 | $ 566 | $ 565 |
Paid-in capital | 2,031,168 | 2,028,755 |
Retained earnings | 799,443 | 737,739 |
Accumulated other comprehensive loss | (1,192) | (1,182) |
Total equity | 2,829,985 | 2,765,877 |
Other long-term debt, excluding current maturities, net of issuance costs | 1,878,260 | 1,877,895 |
Securitized utility tariff bonds, excluding current maturities, net of issuance costs | 268,102 | 282,506 |
Total long-term debt, excluding current maturities, net of issuance costs | 2,146,362 | 2,160,401 |
Total equity and long-term debt | 4,976,347 | 4,926,278 |
Current liabilities Current maturities of other long-term debt |
13 |
772,984 |
Current maturities of securitized utility tariff bonds | 28,183 | 27,430 |
Notes payable | 953,400 | 88,500 |
Accounts payable | 196,583 | 278,056 |
Accrued taxes other than income | 64,405 | 68,793 |
Regulatory liabilities | 34,844 | 66,901 |
Customer deposits | 58,064 | 62,187 |
Other current liabilities | 68,032 | 112,370 |
Total current liabilities | 1,403,524 | 1,477,221 |
Deferred credits and other liabilities Deferred income taxes |
781,316 |
752,068 |
Regulatory liabilities | 487,475 | 500,478 |
Employee benefit obligations | 20,220 | 20,265 |
Other deferred credits | 95,155 | 94,684 |
Total deferred credits and other liabilities | 1,384,166 | 1,367,495 |
Commitments and contingencies | ||
Total liabilities and equity | $ 7,764,037 | $ 7,770,994 |
ONE Gas, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS
| ||
Three Months Ended | ||
March 31, | ||
(Unaudited) | 2024 | 2023 |
(Thousands of dollars) | ||
Operating activities | ||
Net income | $ 99,317 | $ 102,621 |
Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization |
76,572 |
71,264 |
Deferred income taxes | 16,247 | 9,364 |
Share-based compensation expense | 3,117 | 2,821 |
Provision for doubtful accounts | 1,675 | 3,925 |
Proceeds from government securitization of winter weather event costs | ? | 197,366 |
Changes in assets and liabilities: Accounts receivable |
21,684 |
56,336 |
Materials and supplies | (2,700) | (2,160) |
Natural gas in storage | 76,646 | 170,239 |
Asset removal costs | (12,621) | (13,567) |
Accounts payable | (68,117) | (157,533) |
Accrued taxes other than income | (4,388) | (2,204) |
Customer deposits | (4,123) | (1,387) |
Regulatory assets and liabilities - current | (58,520) | 5,585 |
Regulatory assets and liabilities - noncurrent | 2,520 | 21,871 |
Other assets and liabilities - current | (39,312) | 3,573 |
Other assets and liabilities - noncurrent | 265 | 952 |
Cash provided by operating activities | 108,262 | 469,066 |
Investing activities Capital expenditures |
(166,751) |
(151,030) |
Other investing expenditures | (1,259) | (292) |
Other investing receipts | 2,029 | 1,443 |
Cash used in investing activities | (165,981) | (149,879) |
Financing activities Borrowings (repayments) of notes payable, net |
864,900 |
(272,000) |
Repayment of other long-term debt | (773,000) | ? |
Repayment of securitized utility tariff bonds | (13,780) | ? |
Dividends paid | (37,336) | (36,002) |
Tax withholdings related to net share settlements of stock compensation | (980) | (2,386) |
Cash provided by (used in) financing activities | 39,804 | (310,388) |
Change in cash, cash equivalents, restricted cash and restricted cash equivalents | (17,915) | 8,799 |
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 39,387 | 18,127 |
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | $ 21,472 | $ 26,926 |
Supplemental cash flow information: Cash paid for interest, net of amounts capitalized |
$ 41,497 |
$ 33,729 |
Cash paid (received) for income taxes, net | $ (2,797) | $ (1,870) |
ONE Gas, Inc.
KGSS-I SECURITIZATION
In November 2022, Kansas Gas Service Securitization I, L.L.C. (KGSS-I) issued $336 million of securitized utility tariff bonds. KGSS-I used the proceeds from the issuance to purchase the Securitized Utility Tariff Property from Kansas Gas Service, pay for debt issuance costs, and reimburse Kansas Gas Service for upfront securitization costs paid on behalf of KGSS-I.
Revenues for the three months ended March 31, 2024, include $11.7 million associated with KGSS-I, which is offset by $7.5 million in operating and amortization expense and $4.1 million in net interest expense.
The following table summarizes the impact of KGSS-I on the consolidated balance sheets, for the periods indicated:
March 31, | December 31, | |
2024 | 2023 | |
(Thousands of dollars) | ||
Restricted cash and cash equivalents | $ 9,963 | $ 20,552 |
Accounts receivable | 4,694 | 5,133 |
Securitized intangible asset, net | 286,234 | 293,619 |
Current maturities of securitized utility tariff bonds | 28,183 | 27,430 |
Accounts payable | 118 | 394 |
Accrued interest | 2,757 | 7,207 |
Securitized utility tariff bonds, excluding current maturities, net of discounts and issuance costs of $5.2 million and $5.3 million, respectively |
268,102 |
282,506 |
Equity | 1,731 | 1,768 |
The following table summarizes the impact of KGSS-I on the consolidated statements of income, for the periods indicated:
Three Months Ended | ||
2024 | 2023 | |
(Thousands of dollars) | ||
Operating revenues | $ 11,671 | $ 11,933 |
Operating expense | (111) | (110) |
Amortization expense | (7,385) | (7,089) |
Interest income | 188 | 75 |
Interest expense | (4,327) | (4,809) |
Income before income taxes | $ 36 | $ ? |
ONE Gas, Inc. INFORMATION AT A GLANCE
| ||
Three Months Ended | ||
(Unaudited) | 2024 | 2023 |
(Millions of dollars) | ||
Natural gas sales | $ 694.1 | $ 971.8 |
Transportation revenues | $ 40.4 | $ 38.9 |
Securitization customer charges | $ 11.7 | $ 11.9 |
Other revenues | $ 12.1 | $ 9.5 |
Total revenues | $ 758.3 | $ 1,032.1 |
Cost of natural gas | $ 383.0 | $ 665.8 |
Operating costs | $ 152.8 | $ 145.8 |
Depreciation and amortization | $ 76.6 | $ 71.3 |
Operating income | $ 145.9 | $ 149.2 |
Net income | $ 99.3 | $ 102.6 |
Capital expenditures and asset removal costs | $ 179.4 | $ 164.6 |
Volumes (Bcf) Natural gas sales Residential |
52.4 |
54.6 |
Commercial and industrial | 17.0 | 18.1 |
Other | 1.1 | 1.1 |
Total sales volumes delivered | 70.5 | 73.8 |
Transportation | 63.4 | 64.9 |
Total volumes delivered | 133.9 | 138.7 |
Average number of customers (in thousands) Residential |
2,110 |
2,100 |
Commercial and industrial | 165 | 165 |
Other | 3 | 3 |
Transportation | 12 | 12 |
Total customers | 2,290 | 2,280 |
Heating Degree Days Actual degree days |
4,741 |
4,872 |
Normal degree days | 5,219 | 5,237 |
Percent colder (warmer) than normal weather | (9.2) % | (7.0) % |
Statistics by State Oklahoma Average number of customers (in thousands) |
928 |
924 |
Actual degree days | 1,681 | 1,719 |
Normal degree days | 1,800 | 1,792 |
Percent colder (warmer) than normal weather | (6.6) % | (4.1) % |
Kansas Average number of customers (in thousands) |
656 |
656 |
Actual degree days | 2,201 | 2,251 |
Normal degree days | 2,460 | 2,460 |
Percent colder (warmer) than normal weather | (10.5) % | (8.5) % |
Texas Average number of customers (in thousands) |
706 |
700 |
Actual degree days | 859 | 902 |
Normal degree days | 959 | 985 |
Percent colder (warmer) than normal weather | (10.4) % | (8.4) % |
Analyst Contact: | Erin Dailey |
918-947-7411 | |
Media Contact: | Leah Harper |
918-947-7123 |
SOURCE ONE Gas, Inc.
These press releases may also interest you
|