Declares Fourth Quarter Dividend
TULSA, Okla., Nov. 4, 2024 /PRNewswire/ — ONE Gas, Inc. (NYSE: OGS) today announced its third quarter financial results, increased the midpoint of its 2024 EPS guidance and declared its quarterly dividend.
“Through company-wide effort and focused execution, we have raised and narrowed our 2024 financial guidance, all while maintaining a healthy balance sheet,” said Robert S. McAnnally, president and chief executive officer. “As we approach the end of the year, we are poised to deliver strong financial results, serve our customers and strategically position the company for the opportunities that lie ahead.”
THIRD QUARTER 2024 FINANCIAL RESULTS & HIGHLIGHTS
Third quarter net income was $19.3 million, or $0.34 per diluted share, compared with $25.2 million, or $0.45 per diluted share, in the third quarter 2023;
Year-to-date net income was $145.8 million, or $2.56 per diluted share, compared with $160.5 million, or $2.87 per diluted share, in the same period last year;
The Company raised and tightened 2024 diluted earnings per share guidance to a range of $3.85 to $3.95, from a previous range of $3.70 to $4.00;
In October, the Company entered into agreements to increase the capacity of the ONE Gas Credit Agreement and the commercial paper program each to $1.35 billion from $1.275 billion;
On Sept. 27, 2024, the parties to Texas Gas Service’s Central-Gulf rate case filed an uncontested settlement agreement for an increase of $19.3 million, based on a 9.7 percent return on equity and a 59.6 percent common equity ratio, subject to approval;
In August, the Company reopened its 5.10 percent senior notes of $300 million to issue an additional $250 million at an effective rate of 4.87 percent, aggregating its senior notes due April 2029 to $550 million; and
The board of directors declared a quarterly dividend of $0.66 per share ($2.64 annualized), payable on Dec. 4, 2024, to shareholders of record at the close of business on Nov. 19, 2024.
THIRD QUARTER 2024 FINANCIAL PERFORMANCE
ONE Gas reported operating income of $59.5 million in the third quarter, compared with $57.2 million in the third quarter 2023, due primarily to an increase of $17.5 million from new rates.
The increase was partially offset by:
an increase of $3.7 million in depreciation and amortization expense from additional capital investment;
an increase of $6.1 million in employee-related costs, due primarily to planned investments in the Company’s workforce and ongoing in-sourcing efforts; and
an increase of $2.0 million in outside services.
Excluding interest related to KGSS-I securitized bonds, net interest expense increased $11.5 million for the three months ending Sept. 30, 2024. Interest expense was primarily impacted by the conversion of the two debt maturities in the first quarter 2024 to commercial paper with a higher weighted average interest rate, the issuance of $300 million of 5.10 percent senior notes in December 2023 and the reopening of the 5.10 percent senior notes in August 2024 to issue an additional $250 million.
Income tax expense includes a credit for amortization of the regulatory liability associated with excess deferred income taxes (EDIT) of $1.5 million and $2.5 million for the three months ended Sept. 30, 2024, and 2023, respectively.
Capital expenditures and asset removal costs were $197.7 million for the third quarter 2024 compared with $184.3 million in the same period last year, primarily representing expenditures for system integrity and extension of service to new areas.
YEAR-TO-DATE 2024 FINANCIAL PERFORMANCE
Operating income for the nine-month 2024 period was $274.8 million, compared with $270.5 million in 2023, which primarily reflects:
an increase of $43.3 million in revenue from new rates; and
an increase of $5.1 million in residential sales due primarily to net customer growth in Oklahoma and Texas.
These increases were offset partially by:
an increase of $16.5 million of employee-related costs due primarily to planned investments in the Company’s workforce and ongoing in-sourcing efforts;
an increase of $14.0 million in depreciation and amortization expense from additional capital investment;
an increase of $2.1 million due to ad valorem taxes;
an increase of $1.0 million due to insurance expense;
an increase of $1.9 million in fleet costs; and
a decrease of $5.9 million in revenue due to lower sales volumes, largely offset by the impact of weather normalization mechanisms.
Excluding interest related to KGSS-I securitized bonds, net interest expense increased $23.2 million for the nine months ended Sept. 30, 2024. Interest expense was primarily impacted by the conversion of the two debt maturities in the first quarter 2024 to commercial paper with a higher weighted average interest rate, the issuance of $300 million of 5.10 percent senior notes in December 2023 and the reopening of the 5.10 percent senior notes in August 2024 to issue an additional $250 million.
Income tax expense includes a credit for amortization of the regulatory liability associated with EDIT of $13.4 million and $15.5 million for the nine months ended Sept. 30, 2024, and 2023, respectively.
Capital expenditures and asset removal costs were $571.7 million for the nine-month 2024 period compared with $539.1 million in the same period last year. The increase was due primarily to 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 included a requested $31.8 million base rate revenue increase. In August 2024, the Oklahoma Corporation Commission issued an order approving a settlement with a revenue increase of $31.4 million. New rates went into effect in June 2024.
In March 2024, Kansas Gas Service submitted an application to the Kansas Corporation Commission (KCC) requesting an increase to its base rates reflecting investments in its natural gas distribution system. On Oct. 3, 2024, the KCC issued an order approving the parties’ unanimous settlement agreement and new rates became effective on Nov. 1, 2024. Kansas Gas Service’s net base rates will increase by $35 million. Kansas Gas Service was already recovering $35 million from customers through the Gas System Reliability Surcharge (GSRS) filings; therefore, this settlement represents a total base rate increase of $70 million. The unanimous settlement agreement stipulates a GSRS pre-tax carrying charge of 8.97 percent for subsequent GSRS filings.
In March 2024, Texas Gas Service made a Gas Reliability Infrastructure Program (GRIP) filing in the West-North service area, requesting an $8.6 million increase. Two municipalities denied the requested increase, but their denials were overturned by the Texas Railroad Commission (RRC). All other municipalities, and the RRC, approved an increase of $8.5 million or allowed it to take effect with no action. Texas Gas Service implemented new rates in July 2024.
In June 2024, Texas Gas Service filed a rate case in the Central-Gulf service area, requesting a $25.8 million increase. Texas Gas Service has invested approximately $355 million in its Central-Gulf service area natural gas distribution system since its last Central-Gulf service area rate case was finalized in August 2020. A portion of this investment, approximately $342 million, is currently recovered through GRIP. On Sept. 27, 2024, the parties filed an uncontested settlement agreement for an increase of $19.3 million based on a 9.7 percent return on equity and a 59.6 percent common equity ratio. In October 2024, the Administrative Law Judge issued a proposal for decision recommending the settlement be approved. If the settlement is approved by the RRC, new rates are expected to take effect in December 2024.
In May, Texas Gas Service made a GRIP filing for all customers in the Rio Grande Valley service area, requesting a $3.7 million increase. In August 2024, the RRC and municipalities approved an increase of $3.6 million, and new rates became effective in September 2024.
INCOME TAX UPDATE
In 2024, the Internal Revenue Service issued Revenue Procedure 2024-15, which allows for the deferral of income taxes on securitization bond proceeds received from a qualifying state financing entity. In 2022, Oklahoma Natural Gas received $1.3 billion in securitization bond proceeds and reported this amount as income on its federal income tax return for that year. Following the new revenue procedure, the Company amended its 2022 federal tax return to request a refund of $55.5 million, pending review and approval by the Internal Revenue Service. Consequently, as of Sept. 30, 2024, the Company recorded a receivable from the Internal Revenue Service to reflect the anticipated refund, along with a deferred tax liability to account for the future tax obligation. Those items do not impact current earnings. Additionally, the Company plans to file an amended Oklahoma corporate income tax return in the fourth quarter of 2024 to request a state refund of $1.5 million.
2024 FINANCIAL GUIDANCE INCREASED
The Company raised and narrowed its 2024 financial guidance, with net income expected to be in the range of $219 million to $226 million, compared with its previously announced range of $214 million to $231 million. Earnings per diluted share are expected to be approximately $3.85 to $3.95, compared with the previously announced range of $3.70 to $4.00. The midpoint of 2024 earnings per diluted share guidance increased to $3.90, compared with the previous guidance midpoint of $3.85.
Capital expenditures, including asset removal costs, are still 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, Nov. 5, 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 002088, 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 seven days. The playback call may be accessed at 866-813-9403, passcode 631642.
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, costs, liquidity, 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:
our ability to recover costs, income taxes and amounts equivalent to the cost of property, plant and equipment, regulatory assets and our allowed rate of return in our regulated rates or other recovery mechanisms;
cyber-attacks, which, according to experts, continue to increase in volume and sophistication, or breaches of technology systems that could disrupt our operations or result in the loss or exposure of confidential or sensitive customer, employee, vendor, counterparty, or Company information; further, increased remote working arrangements have required enhancements and modifications to our information technology infrastructure (e.g. Internet, Virtual Private Network, remote collaboration systems, etc.), and any failures of the technologies, including third-party service providers, that facilitate working remotely could limit our ability to conduct ordinary operations or expose us to increased risk or effect of an attack;
our ability to manage our operations and maintenance costs;
changes in regulation of natural gas distribution services, particularly those in Oklahoma, Kansas and Texas;
the economic climate and, particularly, its effect on the natural gas requirements of our residential and commercial customers;
the length and severity of a pandemic or other health crisis which could significantly disrupt or prevent us from operating our business in the ordinary course for an extended period;
competition from alternative forms of energy, including, but not limited to, electricity, solar power, wind power, geothermal energy and biofuels;
adverse weather conditions and variations in weather, including seasonal effects on demand and/or supply, the occurrence of severe storms in the territories in which we operate, and climate change, and the related effects on supply, demand, and costs;
indebtedness could make us more vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds and/or place us at competitive disadvantage compared with competitors;
our ability to secure reliable, competitively priced and flexible natural gas transportation and supply, including decisions by natural gas producers to reduce production or shut-in producing natural gas wells and expiration of existing supply and transportation and storage arrangements that are not replaced with contracts with similar terms and pricing;
our ability to complete necessary or desirable expansion or infrastructure development projects, which may delay or prevent us from serving our customers or expanding our business;
operational and mechanical hazards or interruptions;
adverse labor relations;
the effectiveness of our strategies to reduce earnings lag, revenue protection strategies and risk mitigation strategies, which may be affected by risks beyond our control such as commodity price volatility, counterparty performance or creditworthiness and interest rate risk;
the capital-intensive nature of our business, and the availability of and access to, in general, funds to meet our debt obligations prior to or when they become due and to fund our operations and capital expenditures, either through (i) cash on hand, (ii) operating cash flow, or (iii) access to the capital markets and other sources of liquidity;
our ability to obtain capital on commercially reasonable terms, or on terms acceptable to us, or at all;
limitations on our operating flexibility, earnings and cash flows due to restrictions in our financing arrangements;
cross-default provisions in our borrowing arrangements, which may lead to our inability to satisfy all of our outstanding obligations in the event of a default on our part;
changes in the financial markets during the periods covered by the forward-looking statements, particularly those affecting the availability of capital and our ability to refinance existing debt and fund investments and acquisitions to execute our business strategy;
actions of rating agencies, including the ratings of debt, general corporate ratings and changes in the rating agencies’ ratings criteria;
changes in inflation and interest rates;
our ability to recover the costs of natural gas purchased for our customers and any related financing required to support our purchase of natural gas supply;
impact of potential impairment charges;
volatility and changes in markets for natural gas and our ability to secure additional and sufficient liquidity on reasonable commercial terms to cover costs associated with such volatility;
possible loss of local distribution company franchises or other adverse effects caused by the actions of municipalities;
payment and performance by counterparties and customers as contracted and when due, including our counterparties maintaining ordinary course terms of supply and payments;
changes in existing or the addition of new environmental, safety, tax, cybersecurity and other laws or regulations to which we and our subsidiaries are subject, including those that may require significant expenditures, significant increases in operating costs or, in the case of noncompliance, substantial fines or penalties;
the effectiveness of our risk-management policies and procedures, and employees violating our risk-management policies;
the uncertainty of estimates, including accruals and costs of environmental remediation;
advances in technology, including technologies that increase efficiency or that improve electricity’s competitive position relative to natural gas;
population growth rates and changes in the demographic patterns of the markets we serve in Oklahoma, Kansas and Texas, and economic conditions in these areas;
acts of nature and naturally occurring disasters;
political unrest and the potential effects of threatened or actual terrorism and war;
the sufficiency of insurance coverage to cover losses;
the effects of our strategies to reduce tax payments;
changes in accounting standards;
changes in corporate governance standards;
existence of material weaknesses in our internal controls;
our ability to comply with all covenants in our indentures and the ONE Gas Credit Agreement, a violation of which, if not cured in a timely manner, could trigger a default of our obligations;
our ability to attract and retain talented employees, management and directors, and shortage of skilled-labor;
unexpected increases in the costs of providing health care benefits, along with pension and postemployment health care benefits, as well as declines in the discount rates on, declines in the market value of the debt and equity securities of, and increases in funding requirements for, our defined benefit plans; and
our ability to successfully complete merger, acquisition or divestiture plans, regulatory or other limitations imposed as a result of a merger, acquisition or divestiture, and the success of the business following a merger, acquisition or divestiture.
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.
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APPENDIX |
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ONE Gas, Inc. |
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|
CONSOLIDATED STATEMENTS OF INCOME |
||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||
|
September 30, |
June 30, |
|||||||
|
(Unaudited) |
2024 |
2023 |
2024 |
2023 |
||||
|
(Thousands of dollars, except per share amounts) |
||||||||
|
Total revenues |
$ 340,398 |
$ 335,816 |
$ 1,452,855 |
$ 1,766,073 |
||||
|
Cost of natural gas |
59,632 |
70,910 |
514,593 |
866,950 |
||||
|
Operating expenses |
||||||||
|
Operations and maintenance |
130,743 |
121,623 |
385,258 |
366,921 |
||||
|
Depreciation and amortization |
72,126 |
68,435 |
221,247 |
207,246 |
||||
|
General taxes |
18,448 |
17,645 |
57,023 |
54,501 |
||||
|
Total operating expenses |
221,317 |
207,703 |
663,528 |
628,668 |
||||
|
Operating income |
59,449 |
57,203 |
274,734 |
270,455 |
||||
|
Other income, net |
2,982 |
55 |
7,322 |
4,810 |
||||
|
Interest expense, net |
(39,148) |
(27,961) |
(107,475) |
(85,561) |
||||
|
Income before income taxes |
23,283 |
29,297 |
174,581 |
189,704 |
||||
|
Income taxes |
(4,015) |
(4,108) |
(28,753) |
(29,205) |
||||
|
Net income |
$ 19,268 |
$ 25,189 |
$ 145,828 |
$ 160,499 |
||||
|
Earnings per share |
||||||||
|
Basic |
$ 0.34 |
$ 0.45 |
$ 2.57 |
$ 2.89 |
||||
|
Diluted |
$ 0.34 |
$ 0.45 |
$ 2.56 |
$ 2.87 |
||||
|
Average shares (thousands) |
||||||||
|
Basic |
56,825 |
55,624 |
56,768 |
55,576 |
||||
|
Diluted |
57,093 |
55,975 |
56,906 |
55,897 |
||||
|
Dividends declared per share of stock |
$ 0.66 |
$ 0.65 |
$ 1.98 |
$ 1.95 |
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|
APPENDIX |
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ONE Gas, Inc. |
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|
CONSOLIDATED BALANCE SHEETS |
|||
|
September 30, |
December 31, |
||
|
(Unaudited) |
2024 |
2023 |
|
|
Assets |
(Thousands of dollars) |
||
|
Property, plant and equipment |
|||
|
Property, plant and equipment |
$ 8,937,502 |
$ 8,468,967 |
|
|
Accumulated depreciation and amortization |
2,432,659 |
2,333,755 |
|
|
Net property, plant and equipment |
6,504,843 |
6,135,212 |
|
|
Current assets |
|||
|
Cash and cash equivalents |
18,797 |
18,835 |
|
|
Restricted cash and cash equivalents |
9,961 |
20,552 |
|
|
Total cash, cash equivalents and restricted cash and cash equivalents |
28,758 |
39,387 |
|
|
Accounts receivable, net |
176,248 |
347,864 |
|
|
Materials and supplies |
94,392 |
77,649 |
|
|
Natural gas in storage |
180,795 |
187,097 |
|
|
Regulatory assets |
130,854 |
75,308 |
|
|
Other current assets |
79,455 |
37,899 |
|
|
Total current assets |
690,502 |
765,204 |
|
|
Goodwill and other assets |
|||
|
Regulatory assets |
269,925 |
287,906 |
|
|
Securitized intangible asset, net |
272,510 |
293,619 |
|
|
Goodwill |
157,953 |
157,953 |
|
|
Other assets |
143,692 |
131,100 |
|
|
Total goodwill and other assets |
844,080 |
870,578 |
|
|
Total assets |
$ 8,039,425 |
$ 7,770,994 |
|
|
APPENDIX |
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|
ONE Gas, Inc. |
|||
|
CONSOLIDATED BALANCE SHEETS |
|||
|
(Continued) |
|||
|
September 30, |
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 55,655,255 shares at September 30, 2024; |
$ 567 |
$ 565 |
|
|
Paid-in capital |
2,042,568 |
2,028,755 |
|
|
Retained earnings |
770,416 |
737,739 |
|
|
Accumulated other comprehensive loss |
(929) |
(1,182) |
|
|
Total equity |
2,812,622 |
2,765,877 |
|
|
Other long-term debt, excluding current maturities, net of issuance costs |
2,131,448 |
1,877,895 |
|
|
Securitized utility tariff bonds, excluding current maturities, net of issuance costs |
253,434 |
282,506 |
|
|
Total long-term debt, excluding current maturities, net of issuance costs |
2,384,882 |
2,160,401 |
|
|
Total equity and long-term debt |
5,197,504 |
4,926,278 |
|
|
Current liabilities |
|||
|
Current maturities of other long-term debt |
14 |
772,984 |
|
|
Current maturities of securitized utility tariff bonds |
28,956 |
27,430 |
|
|
Notes payable |
951,400 |
88,500 |
|
|
Accounts payable |
146,821 |
278,056 |
|
|
Accrued taxes other than income |
71,829 |
68,793 |
|
|
Regulatory liabilities |
27,652 |
66,901 |
|
|
Customer deposits |
72,537 |
62,187 |
|
|
Other current liabilities |
88,405 |
112,370 |
|
|
Total current liabilities |
1,387,614 |
1,477,221 |
|
|
Deferred credits and other liabilities |
|||
|
Deferred income taxes |
851,378 |
752,068 |
|
|
Regulatory liabilities |
483,287 |
500,478 |
|
|
Employee benefit obligations |
20,030 |
20,265 |
|
|
Other deferred credits |
99,612 |
94,684 |
|
|
Total deferred credits and other liabilities |
1,454,307 |
1,367,495 |
|
|
Commitments and contingencies |
|||
|
Total liabilities and equity |
$ 8,039,425 |
$ 7,770,994 |
|
|
APPENDIX |
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ONE Gas, Inc. |
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|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||
|
Nine Months Ended |
|||
|
September 30, |
|||
|
(Unaudited) |
2024 |
2023 |
|
|
(Thousands of dollars) |
|||
|
Operating activities |
|||
|
Net income |
$ 145,828 |
$ 160,499 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||
|
Depreciation and amortization |
221,247 |
207,246 |
|
|
Deferred income taxes |
82,052 |
14,733 |
|
|
Share-based compensation expense |
10,458 |
9,259 |
|
|
Provision for doubtful accounts |
3,736 |
7,164 |
|
|
Proceeds from government securitization of winter weather event costs |
— |
197,366 |
|
|
Changes in assets and liabilities: |
|||
|
Accounts receivable |
167,880 |
369,203 |
|
|
Materials and supplies |
(16,743) |
(4,045) |
|
|
Natural gas in storage |
6,302 |
64,798 |
|
|
Asset removal costs |
(48,135) |
(48,779) |
|
|
Accounts payable |
(116,385) |
(189,663) |
|
|
Accrued taxes other than income |
3,036 |
(10,825) |
|
|
Customer deposits |
10,350 |
9,139 |
|
|
Regulatory assets and liabilities – current |
(106,051) |
17,884 |
|
|
Regulatory assets and liabilities – noncurrent |
13,374 |
28,667 |
|
|
Other assets and liabilities – current |
(67,145) |
7,656 |
|
|
Other assets and liabilities – noncurrent |
(4,023) |
2,222 |
|
|
Cash provided by operating activities |
305,781 |
842,524 |
|
|
Investing activities |
|||
|
Capital expenditures |
(523,590) |
(490,338) |
|
|
Other investing expenditures |
(3,760) |
(3,194) |
|
|
Other investing receipts |
5,122 |
4,121 |
|
|
Cash used in investing activities |
(522,228) |
(489,411) |
|
|
Financing activities |
|||
|
Borrowings (repayments) of notes payable, net |
862,900 |
(225,050) |
|
|
Issuance of other long-term debt, net of premiums |
253,651 |
— |
|
|
Issuance of common stock |
3,368 |
3,176 |
|
|
Repayment of other long-term debt |
(773,000) |
— |
|
|
Repayment of securitized utility tariff bonds |
(27,939) |
(20,716) |
|
|
Dividends paid |
(112,064) |
(108,049) |
|
|
Tax withholdings related to net share settlements of stock compensation |
(1,098) |
(2,563) |
|
|
Cash provided by (used in) financing activities |
205,818 |
(353,202) |
|
|
Change in cash, cash equivalents, restricted cash and restricted cash equivalents |
(10,629) |
(89) |
|
|
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 |
$ 28,758 |
$ 18,038 |
|
|
Supplemental cash flow information: |
|||
|
Cash paid for interest, net of amounts capitalized |
$ 110,667 |
$ 78,798 |
|
|
Cash paid (received) for income taxes, net |
$ (1,232) |
$ 17,051 |
|
APPENDIX
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 Sept. 30, 2024, include $10.5 million associated with KGSS-I, which is offset by $6.5 million in operating and amortization expense and $3.9 million in net interest expense. Revenues decreased $1.5 million compared to the same period last year, which was offset by the net change of a $1.1 million decrease in operating and amortization expense and a $0.4 million decrease in net interest expense.
Revenues for the nine months ended Sept. 30, 2024, include $33.7 million associated with KGSS-I, which is offset by $21.4 million in operating and amortization expense and $12.2 in net interest expense. Compared to the same nine month period last year, revenues decreased $2.0 million, which was offset by the net change of a $0.7 million decrease in amortization and operating expense and a $1.3 million decrease in net interest expense.
The following table summarizes the impact of KGSS-I on the consolidated balance sheets, for the periods indicated:
|
September 30, |
December 31, |
||
|
2024 |
2023 |
||
|
(Thousands of dollars) |
|||
|
Restricted cash and cash equivalents |
$ 9,961 |
$ 20,552 |
|
|
Accounts receivable |
4,499 |
5,133 |
|
|
Securitized intangible asset, net |
272,510 |
293,619 |
|
|
Total assets |
$ 286,970 |
$ 319,304 |
|
|
Current maturities of securitized utility tariff bonds |
28,956 |
27,430 |
|
|
Accounts payable |
222 |
393 |
|
|
Accrued interest |
2,627 |
7,207 |
|
|
Securitized utility tariff bonds, excluding current maturities, net of discounts and issuance costs |
253,434 |
282,506 |
|
|
Equity |
1,731 |
1,768 |
|
|
Total liabilities and equity |
$ 286,970 |
$ 319,304 |
|
The following table summarizes the impact of KGSS-I on the consolidated statements of income, for the periods indicated:
|
Three Months Ended |
Nine Months Ended |
||||||
|
September 30, |
September 30, |
||||||
|
2024 |
2023 |
2024 |
2023 |
||||
|
(Thousands of dollars) |
|||||||
|
Operating revenues |
$ 10,515 |
$ 12,014 |
$ 33,741 |
$ 35,754 |
|||
|
Operating expense |
(111) |
(113) |
(332) |
(332) |
|||
|
Amortization expense |
(6,429) |
(7,489) |
(21,109) |
(21,758) |
|||
|
Interest income |
199 |
259 |
539 |
560 |
|||
|
Interest expense |
(4,138) |
(4,548) |
(12,731) |
(14,101) |
|||
|
Income before income taxes |
$ 36 |
$ 123 |
$ 108 |
$ 123 |
|||
|
APPENDIX |
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|
ONE Gas, Inc. |
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|
INFORMATION AT A GLANCE |
|||||||||||
|
Three Months Ended |
Nine Months Ended |
||||||||||
|
September 30, |
September 30, |
||||||||||
|
(Unaudited) |
2024 |
2023 |
2024 |
2023 |
|||||||
|
(Millions of dollars) |
|||||||||||
|
Natural gas sales |
$ |
289.8 |
$ |
286.0 |
$ |
1,290.7 |
$ |
1,606.0 |
|||
|
Transportation revenues |
$ |
30.6 |
$ |
29.6 |
$ |
101.3 |
$ |
97.6 |
|||
|
Securitization customer charges |
$ |
10.5 |
$ |
12.0 |
$ |
33.7 |
$ |
35.8 |
|||
|
Other revenues |
$ |
9.5 |
$ |
8.2 |
$ |
27.2 |
$ |
26.7 |
|||
|
Total revenues |
$ |
340.4 |
$ |
335.8 |
$ |
1,452.9 |
$ |
1,766.1 |
|||
|
Cost of natural gas |
$ |
59.6 |
$ |
70.9 |
$ |
514.6 |
$ |
867.0 |
|||
|
Operating costs |
$ |
149.2 |
$ |
139.3 |
$ |
442.3 |
$ |
421.4 |
|||
|
Depreciation and amortization |
$ |
72.1 |
$ |
68.4 |
$ |
221.2 |
$ |
207.2 |
|||
|
Operating income |
$ |
59.5 |
$ |
57.2 |
$ |
274.8 |
$ |
270.5 |
|||
|
Net income |
$ |
19.3 |
$ |
25.2 |
$ |
145.8 |
$ |
160.5 |
|||
|
Capital expenditures and asset removal costs |
$ |
197.7 |
$ |
184.3 |
$ |
571.7 |
$ |
539.1 |
|||
|
Volumes (Bcf) |
|||||||||||
|
Natural gas sales |
|||||||||||
|
Residential |
7.5 |
8.6 |
70.4 |
76.0 |
|||||||
|
Commercial and industrial |
4.0 |
4.1 |
26.2 |
28.0 |
|||||||
|
Other |
0.2 |
0.2 |
1.5 |
1.7 |
|||||||
|
Total sales volumes delivered |
11.7 |
12.9 |
98.1 |
105.7 |
|||||||
|
Transportation |
48.1 |
51.3 |
163.7 |
169.1 |
|||||||
|
Total volumes delivered |
59.8 |
64.2 |
261.8 |
274.8 |
|||||||
|
Average number of customers (in thousands) |
|||||||||||
|
Residential |
2,096 |
2,076 |
2,103 |
2,088 |
|||||||
|
Commercial and industrial |
161 |
160 |
163 |
163 |
|||||||
|
Other |
3 |
3 |
3 |
3 |
|||||||
|
Transportation |
12 |
12 |
12 |
12 |
|||||||
|
Total customers |
2,272 |
2,251 |
2,281 |
2,266 |
|||||||
|
Heating Degree Days |
|||||||||||
|
Actual degree days |
8 |
1 |
5,127 |
5,466 |
|||||||
|
Normal degree days |
56 |
56 |
5,944 |
5,960 |
|||||||
|
Percent colder (warmer) than normal weather |
* |
* |
(14) % |
(8) % |
|||||||
|
Statistics by State |
|||||||||||
|
Oklahoma |
|||||||||||
|
Average number of customers (in thousands) |
920 |
912 |
924 |
918 |
|||||||
|
Actual degree days |
0 |
0 |
1,798 |
1,953 |
|||||||
|
Normal degree days |
9 |
8 |
2,039 |
2,028 |
|||||||
|
Percent colder (warmer) than normal weather |
* |
* |
(12) % |
(4) % |
|||||||
|
Kansas |
|||||||||||
|
Average number of customers (in thousands) |
647 |
641 |
652 |
649 |
|||||||
|
Actual degree days |
8 |
1 |
2,430 |
2,568 |
|||||||
|
Normal degree days |
45 |
46 |
2,899 |
2,900 |
|||||||
|
Percent colder (warmer) than normal weather |
* |
* |
(16) % |
(11) % |
|||||||
|
Texas |
|||||||||||
|
Average number of customers (in thousands) |
705 |
698 |
705 |
699 |
|||||||
|
Actual degree days |
0 |
0 |
899 |
945 |
|||||||
|
Normal degree days |
2 |
2 |
1,006 |
1,032 |
|||||||
|
Percent colder (warmer) than normal weather |
* |
* |
(11) % |
(8) % |
|||||||
|
*Not meaningful |
|||||||||||
|
Analyst Contact: |
Erin Dailey 918-947-7411 |
|
Media Contact: |
Leah Harper 918-947-7123 |
SOURCE ONE Gas, Inc.
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