TULSA, Okla.,
July 31,
2023 /PRNewswire/ -- ONE Gas, Inc. (NYSE: OGS)
today announced its second quarter financial results and reaffirmed
its 2023 financial guidance.
"We enter the second half of the year focused on safety and
capital plan execution," said Robert S.
McAnnally, president and chief executive officer. "Our team
continues to meet the needs of our growing customer base while
managing costs and prioritizing personal and system safety."
SECOND QUARTER 2023 FINANCIAL RESULTS &
HIGHLIGHTS
- Second quarter 2023 net income was $32.7
million, or $0.58 per diluted
share, compared with $32.1 million,
or $0.59 per diluted share, in the
second quarter 2022;
- Year-to-date 2023 net income was $135.3
million, or $2.42 per diluted
share, compared with $131.0 million,
or $2.42 per diluted share, in the
same period last year;
- Actual heating degree days across the Company's service areas
were 593 in the second quarter 2023, 11.1% warmer than normal and
6.6% warmer than the same period last year; and
- A quarterly dividend of $0.65 per
share ($2.60 annualized) was declared
on July 17, 2023, payable on
Sept. 1, 2023, to shareholders of
record at the close of business on Aug. 16,
2023.
SECOND QUARTER 2023 FINANCIAL PERFORMANCE
ONE Gas reported operating income of $64.0 million in the second quarter 2023,
compared with $58.6 million in the
second quarter 2022, which primarily reflects:
- an increase of $14.1 million from
new rates; and
- an increase of $1.1 million in
residential sales due primarily to net customer growth in
Oklahoma and Texas.
These increases were offset partially by:
- an increase of $6.7 million in
employee-related costs; and
- a decrease of $1.7 million due to
lower sales volumes, net of the impact of weather normalization
mechanisms.
Weather across the service territories for the second quarter
was 6.6% warmer than the prior year and 11.1% warmer than normal
for the three months ended June 30,
2023. The impact on operating income was mitigated by
weather normalization mechanisms.
For the three months ended June 30,
2023, other income, net, increased $6.2 million compared with the same period last
year, due primarily to a $5.9 million
increase in the market value of investments associated with
nonqualified employee benefit plans.
Net income for the three months ended June 30, 2023,
includes an increase in interest expense of $11.2 million, including $4.7 million in interest expense related to the
Kansas securitization. Interest
expense also increased primarily due to a higher weighted average
interest rate on commercial paper borrowings and the issuance of
$300 million of 4.25% senior notes in
August 2022.
Income tax expense includes a credit for amortization of the
regulatory liability associated with excess deferred income taxes
(EDIT) of $3.1 million and
$3.0 million for the three months
ended June 30, 2023, and 2022,
respectively.
Capital expenditures and asset removal costs were $41.1 million higher for the second quarter 2023
compared with the same period last year, due primarily to
expenditures for system integrity and extension of service to new
areas.
YEAR-TO-DATE 2023 FINANCIAL PERFORMANCE
Operating income for the six-month 2023 period was $213.3 million, compared with $199.3 million in 2022, which primarily
reflects:
- an increase of $31.4 million from
new rates; and
- an increase of $3.1 million in
residential sales due primarily to net customer growth in
Oklahoma and Texas.
These increases were offset partially by:
- an increase of $10.8 million in
employee-related costs;
- a decrease of $3.3 million due to
lower sales volumes, net of the impact of weather normalization
mechanisms; and
- an increase of $2.4 million in
bad debt expense.
Weather across the service territories for the six-month 2023
period was 7.4% warmer than normal and 13.7% warmer than the same
period last year. The impact on operating income was mitigated by
weather normalization mechanisms.
For the six-month 2023 period, other income, net increased
$12.9 million compared with the same
period last year, due primarily to a $10.3
million increase in the market value of investments
associated with nonqualified employee benefit plans and a
$1.1 million decrease in net periodic
benefit costs other than service cost.
Income tax expense includes a credit for amortization of the
regulatory liability associated with EDIT of $13.0 million and $10.9
million for the six months ended June
30, 2023, and 2022, respectively.
Interest expense increased $25.7
million for the six months ended June
30, 2023, which includes an increase of $9.6 million related to the Kansas securitization. Interest expense was
also impacted by a higher weighted average interest rate on
commercial paper borrowings and the issuance of $300 million of 4.25% senior notes in
August 2022.
Capital expenditures and asset removal costs were $354.8 million for the six-month 2023 period
compared with $272.0 million in the
same period last year. The increase was due primarily to
expenditures for system integrity and extension of service to new
areas.
For the six months ended June 30,
2023, the Company executed forward sale agreements for
shares of its common stock through an underwritten offering and its
at-the-market equity program. No shares of common stock have been
settled under these forward sale agreements. Had all shares been
settled as of June 30, 2023, it would
have generated net proceeds of $248.7
million, as detailed below:
June 30,
2023
|
Maturity
|
Shares
Sold
|
Net Proceeds
Available
(in
thousands)
|
Forward
Price
|
At-the-Market Equity
Program
|
|
|
|
December 29,
2023
|
289,403
|
$
21,780
|
$
75.26
|
December 31,
2024
|
926,465
|
73,906
|
$
79.77
|
Total At-the-Market
Equity Program
|
1,215,868
|
$
95,686
|
$
78.70
|
Equity Forward
Agreement
|
|
|
|
December 29,
2023
|
1,400,000
|
107,095
|
$
76.50
|
December 31,
2024
|
600,000
|
45,898
|
$
76.50
|
Total Equity
Forward Agreement
|
2,000,000
|
$
152,993
|
$
76.50
|
Total forward sale
agreements
|
3,215,868
|
$
248,679
|
$
77.33
|
On June 30, 2023, $226.1 million of equity was available for
issuance under the at-the-market equity program.
REGULATORY ACTIVITIES UPDATE
In March 2023, Oklahoma Natural
Gas filed its annual Performance-Based Rate Change application for
the test year ending December 2022.
The filing included a requested $27.6
million base rate revenue increase, a $2.5 million energy efficiency incentive and
$11.9 million of EDIT to be credited
to customers in 2024. In July 2023,
the Oklahoma Corporation Commission issued an order approving a
settlement with a revenue increase of $26.3
million, a $2.5 million energy
efficiency incentive, and a $12.6
million EDIT credit. New rates went into effect on
June 29, 2023.
In February 2023, Texas Gas
Service made Gas Reliability Infrastructure Program (GRIP) filings
for all customers in the Central-Gulf service area, requesting an
$11.5 million increase to be
effective in June 2023. All the
municipalities and the Railroad Commission of Texas (RRC), approved the increase or allowed
it to take effect with no action, in June
2023.
In March 2023, Texas Gas Service
made GRIP filings for all customers in the West-North service area,
requesting a $7.4 million increase to
be effective in July 2023. In
June 2023, the municipalities of
El Paso, Socorro and Anthony denied the requested increase, which
Texas Gas Service appealed to the RRC. All other municipalities,
and the RRC, approved an increase of $7.3
million or allowed it to take effect with no action. Texas
Gas Service implemented the new rates in June 2023, subject to adjustment depending upon
the outcome of the appeal.
In June 2023, Texas Gas Service
filed a rate case for all customers in the Rio Grande Valley
service area, requesting a $9.8
million increase. New rates are expected to take effect in
late 2023 or early 2024.
2023 FINANCIAL GUIDANCE
ONE Gas reaffirmed its financial guidance issued on Nov. 30, 2022, with 2023 net income and earnings
per share expected to be in the range of $224 million to $238
million, and $4.02 to
$4.26 per diluted share. Capital
expenditures, including asset removal costs, are expected to be
approximately $675 million in
2023.
EARNINGS CONFERENCE CALL AND WEBCAST
The ONE Gas executive management team will host a conference
call on Tuesday, Aug. 1, 2023, at
11 a.m. Eastern Daylight Time
(10 a.m. Central Daylight 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 585035, 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 459462.
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:
- 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 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;
- the concentration of our operations in Oklahoma, Kansas, and Texas;
- 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 and other laws 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, and economic conditions in these areas'
housing markets;
- acts of nature and the potential effects of threatened or
actual terrorism and war, including recent events in Europe;
- 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.
APPENDIX
|
|
ONE Gas,
Inc.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
(Unaudited)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(Thousands of
dollars, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
398,114
|
|
$
428,975
|
|
$
1,430,257
|
|
$
1,400,434
|
|
|
|
|
|
|
|
|
|
Cost of natural
gas
|
|
130,241
|
|
188,251
|
|
796,040
|
|
828,197
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Operations and
maintenance
|
|
118,614
|
|
110,579
|
|
245,298
|
|
225,674
|
Depreciation and
amortization
|
|
67,547
|
|
55,043
|
|
138,811
|
|
112,180
|
General
taxes
|
|
17,690
|
|
16,533
|
|
36,856
|
|
35,057
|
Total operating
expenses
|
|
203,851
|
|
182,155
|
|
420,965
|
|
372,911
|
Operating
income
|
|
64,022
|
|
58,569
|
|
213,252
|
|
199,326
|
Other income (expense),
net
|
|
2,174
|
|
(3,983)
|
|
4,755
|
|
(8,128)
|
Interest expense,
net
|
|
(27,485)
|
|
(16,320)
|
|
(57,600)
|
|
(31,915)
|
Income before income
taxes
|
|
38,711
|
|
38,266
|
|
160,407
|
|
159,283
|
Income taxes
|
|
(6,022)
|
|
(6,191)
|
|
(25,097)
|
|
(28,274)
|
Net
income
|
|
$
32,689
|
|
$
32,075
|
|
$
135,310
|
|
$
131,009
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.59
|
|
$
0.59
|
|
$
2.43
|
|
$
2.42
|
Diluted
|
|
$
0.58
|
|
$
0.59
|
|
$
2.42
|
|
$
2.42
|
|
|
|
|
|
|
|
|
|
Average shares
(thousands)
|
|
|
|
|
|
|
|
|
Basic
|
|
55,566
|
|
54,262
|
|
55,552
|
|
54,092
|
Diluted
|
|
55,914
|
|
54,335
|
|
55,857
|
|
54,183
|
Dividends declared per
share of stock
|
|
$
0.65
|
|
$
0.62
|
|
$
1.30
|
|
$
1.24
|
APPENDIX
|
|
ONE Gas,
Inc.
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
(Unaudited)
|
|
2023
|
|
2022
|
Assets
|
|
(Thousands of
dollars)
|
Property, plant and
equipment
|
|
|
|
|
Property, plant and
equipment
|
|
$
8,117,663
|
|
$
7,834,557
|
Accumulated
depreciation and amortization
|
|
2,261,035
|
|
2,205,717
|
Net property, plant
and equipment
|
|
5,856,628
|
|
5,628,840
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
7,332
|
|
9,681
|
Restricted cash and
cash equivalents
|
|
32,006
|
|
8,446
|
Total cash, cash
equivalents and restricted cash and cash equivalents
|
|
39,338
|
|
18,127
|
Accounts receivable,
net
|
|
234,409
|
|
553,834
|
Materials and
supplies
|
|
72,594
|
|
70,873
|
Natural gas in
storage
|
|
144,742
|
|
269,205
|
Regulatory
assets
|
|
64,912
|
|
275,572
|
Other current
assets
|
|
31,294
|
|
29,997
|
Total current
assets
|
|
587,289
|
|
1,217,608
|
Goodwill and other
assets
|
|
|
|
|
Regulatory
assets
|
|
304,614
|
|
330,831
|
Securitized intangible
asset, net
|
|
309,569
|
|
323,838
|
Goodwill
|
|
157,953
|
|
157,953
|
Other
assets
|
|
119,069
|
|
117,326
|
Total goodwill and
other assets
|
|
891,205
|
|
929,948
|
Total
assets
|
|
$
7,335,122
|
|
$
7,776,396
|
APPENDIX
|
|
ONE Gas,
Inc.
|
CONSOLIDATED BALANCE
SHEETS
|
(Continued)
|
|
|
June
30,
|
|
December
31,
|
(Unaudited)
|
|
2023
|
|
2022
|
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 55,446,841 shares at June 30, 2023;
issued
and outstanding 55,349,954 shares at December 31, 2022
|
|
$
554
|
|
$
553
|
Paid-in
capital
|
|
1,940,446
|
|
1,932,714
|
Retained
earnings
|
|
714,530
|
|
651,863
|
Accumulated other
comprehensive loss
|
|
(704)
|
|
(704)
|
Total
equity
|
|
2,654,826
|
|
2,584,426
|
Other long-term debt,
excluding current maturities, net of issuance costs
|
|
1,580,263
|
|
2,352,400
|
Securitized utility
tariff bonds, excluding current maturities, net of issuance
costs
|
|
295,949
|
|
309,343
|
Total long-term debt,
excluding current maturities, net of issuance costs
|
|
1,876,212
|
|
2,661,743
|
Total equity and
long-term debt
|
|
4,531,038
|
|
5,246,169
|
Current
liabilities
|
|
|
|
|
Current maturities of
other long-term debt
|
|
772,838
|
|
12
|
Current maturities of
securitized utility tariff bonds
|
|
34,201
|
|
20,716
|
Notes
payable
|
|
217,100
|
|
552,000
|
Accounts
payable
|
|
154,121
|
|
360,493
|
Accrued taxes other
than income
|
|
54,400
|
|
78,352
|
Regulatory
liabilities
|
|
79,686
|
|
47,867
|
Customer
deposits
|
|
54,635
|
|
57,854
|
Other current
liabilities
|
|
87,110
|
|
72,125
|
Total current
liabilities
|
|
1,454,091
|
|
1,189,419
|
Deferred credits and
other liabilities
|
|
|
|
|
Deferred income
taxes
|
|
727,184
|
|
698,456
|
Regulatory
liabilities
|
|
512,633
|
|
529,441
|
Employee benefit
obligations
|
|
19,620
|
|
19,587
|
Other deferred
credits
|
|
90,556
|
|
93,324
|
Total deferred credits
and other liabilities
|
|
1,349,993
|
|
1,340,808
|
Commitments and
contingencies
|
|
|
|
|
Total liabilities and
equity
|
|
$
7,335,122
|
|
$
7,776,396
|
APPENDIX
|
|
ONE Gas,
Inc.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Six Months
Ended
|
|
|
June
30,
|
(Unaudited)
|
|
2023
|
|
2022
|
|
|
(Thousands of
dollars)
|
Operating
activities
|
|
|
|
|
Net income
|
|
$
135,310
|
|
$
131,009
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
138,811
|
|
112,180
|
Deferred income
taxes
|
|
11,912
|
|
(18,780)
|
Share-based
compensation expense
|
|
6,305
|
|
5,699
|
Provision for doubtful
accounts
|
|
4,880
|
|
2,511
|
Proceeds from
government securitization of winter weather event costs
|
|
197,366
|
|
—
|
Changes in assets and
liabilities:
|
|
|
|
|
Accounts
receivable
|
|
314,545
|
|
100,955
|
Materials and
supplies
|
|
(1,721)
|
|
(7,927)
|
Natural gas in
storage
|
|
124,463
|
|
(18,660)
|
Asset removal
costs
|
|
(32,551)
|
|
(20,919)
|
Accounts
payable
|
|
(198,968)
|
|
(92,887)
|
Accrued taxes other
than income
|
|
(23,952)
|
|
(8,852)
|
Customer
deposits
|
|
(3,219)
|
|
(2,177)
|
Regulatory assets and
liabilities - current
|
|
35,633
|
|
43,697
|
Regulatory assets and
liabilities - noncurrent
|
|
26,217
|
|
56,135
|
Other assets and
liabilities - current
|
|
12,156
|
|
8,234
|
Other assets and
liabilities - noncurrent
|
|
1,555
|
|
(3,541)
|
Cash provided by
operating activities
|
|
748,742
|
|
286,677
|
Investing
activities
|
|
|
|
|
Capital
expenditures
|
|
(322,231)
|
|
(251,060)
|
Other investing
expenditures
|
|
(1,647)
|
|
(1,332)
|
Other investing
receipts
|
|
2,462
|
|
891
|
Cash used in investing
activities
|
|
(321,416)
|
|
(251,501)
|
Financing
activities
|
|
|
|
|
Repayments of notes
payable, net
|
|
(334,900)
|
|
(3,900)
|
Issuance of common
stock
|
|
3,175
|
|
37,104
|
Dividends
paid
|
|
(72,006)
|
|
(66,821)
|
Tax withholdings
related to net share settlements of stock compensation
|
|
(2,384)
|
|
(3,026)
|
Cash used in financing
activities
|
|
(406,115)
|
|
(36,643)
|
Change in cash, cash
equivalents, restricted cash and restricted cash
equivalents
|
|
21,211
|
|
(1,467)
|
Cash, cash
equivalents, restricted cash and restricted cash equivalents at
beginning of
period
|
|
18,127
|
|
8,852
|
Cash, cash
equivalents, restricted cash and restricted cash equivalents at end
of period
|
|
$
39,338
|
|
$
7,385
|
Supplemental cash flow
information:
|
|
|
|
|
Cash paid for
interest, net of amounts capitalized
|
|
$
47,773
|
|
$
41,600
|
Cash paid for income
taxes, net
|
|
$
9,174
|
|
$
16,200
|
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 June 30, 2023, include
an increase of $11.8 million
associated with KGSS-I, which is offset by $7.3 million in amortization and operating
expense and $4.5 million in net
interest expense. Revenues for the six months ended June 30,
2023, include an increase of $23.7
million associated with KGSS-I, which is offset by
$14.5 million in amortization and
operating expense and $9.2 million in
net interest expense.
The following table summarizes the impact of KGSS-I on the
consolidated balance sheets:
|
June
30,
|
|
December
31,
|
|
2023
|
|
2022
|
|
(Thousands of
dollars)
|
Restricted cash and
cash equivalents
|
$
32,006
|
|
$
8,446
|
Accounts
receivable
|
3,157
|
|
4,862
|
Securitized intangible
asset, net
|
309,569
|
|
323,838
|
Current maturities of
securitized utility tariff bonds
|
34,201
|
|
20,716
|
Accounts
payable
|
1,483
|
|
3,204
|
Accrued
interest
|
11,418
|
|
2,202
|
Securitized utility
tariff bonds, excluding current maturities, net of $5.9 million of
discounts and
issuance costs
|
295,949
|
|
309,343
|
Equity
|
1,681
|
|
1,681
|
The following table summarizes the impact of KGSS-I on the
consolidated statements of income, for the period indicated:
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2023
|
|
|
(Thousands of
dollars)
|
Operating
revenues
|
|
$
11,807
|
|
$
23,740
|
Operating
expense
|
|
(109)
|
|
(219)
|
Amortization
expense
|
|
(7,180)
|
|
(14,269)
|
Interest
income
|
|
226
|
|
301
|
Interest
expense
|
|
(4,744)
|
|
(9,553)
|
Income before income
taxes
|
|
$
—
|
|
$
—
|
APPENDIX
|
|
ONE Gas,
Inc.
|
INFORMATION AT A
GLANCE
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
June
30,
|
|
|
June
30,
|
(Unaudited)
|
2023
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
(Millions of
dollars)
|
|
|
|
|
|
|
Natural gas
sales
|
$
|
348.3
|
|
$
|
393.2
|
|
$
|
1,320.0
|
|
$
|
1,320.2
|
Transportation
revenues
|
$
|
29.1
|
|
$
|
28.0
|
|
|
68.0
|
|
|
64.8
|
Securitization customer
charges
|
$
|
11.8
|
|
$
|
0.0
|
|
$
|
23.7
|
|
$
|
0.0
|
Other
revenues
|
$
|
8.9
|
|
$
|
7.8
|
|
$
|
18.6
|
|
$
|
15.4
|
Total
revenues
|
$
|
398.1
|
|
$
|
429.0
|
|
$
|
1,430.3
|
|
$
|
1,400.4
|
Cost of natural
gas
|
$
|
130.2
|
|
$
|
188.3
|
|
$
|
796.0
|
|
$
|
828.2
|
Operating
costs
|
$
|
136.4
|
|
$
|
127.1
|
|
$
|
282.2
|
|
$
|
260.7
|
Depreciation and
amortization
|
$
|
67.5
|
|
$
|
55.0
|
|
$
|
138.8
|
|
$
|
112.2
|
Operating
income
|
$
|
64.0
|
|
$
|
58.6
|
|
$
|
213.3
|
|
$
|
199.3
|
Net income
|
$
|
32.7
|
|
$
|
32.1
|
|
$
|
135.3
|
|
$
|
131.0
|
Capital expenditures
and asset removal costs
|
$
|
190.2
|
|
$
|
149.1
|
|
$
|
354.8
|
|
$
|
272.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
sales
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
12.8
|
|
|
13.8
|
|
|
67.4
|
|
|
74.4
|
Commercial and
industrial
|
|
5.7
|
|
|
6.2
|
|
|
23.9
|
|
|
25.6
|
Other
|
|
0.4
|
|
|
0.6
|
|
|
1.5
|
|
|
1.7
|
Total sales volumes
delivered
|
|
18.9
|
|
|
20.6
|
|
|
92.8
|
|
|
101.7
|
Transportation
|
|
52.8
|
|
|
53.4
|
|
|
117.8
|
|
|
120.5
|
Total volumes
delivered
|
|
71.7
|
|
|
74.0
|
|
|
210.6
|
|
|
222.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
customers (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
2,090
|
|
|
2,084
|
|
|
2,095
|
|
|
2,085
|
Commercial and
industrial
|
|
163
|
|
|
163
|
|
|
164
|
|
|
164
|
Other
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
Transportation
|
|
12
|
|
|
12
|
|
|
12
|
|
|
12
|
Total
customers
|
|
2,268
|
|
|
2,262
|
|
|
2,274
|
|
|
2,264
|
|
|
|
|
|
|
|
|
|
|
|
|
Heating Degree
Days
|
|
|
|
|
|
|
|
|
|
|
|
Actual degree
days
|
|
593
|
|
|
635
|
|
|
5,465
|
|
|
6,334
|
Normal degree
days
|
|
667
|
|
|
672
|
|
|
5,904
|
|
|
5,924
|
Percent colder (warmer)
than normal weather
|
|
(11.1) %
|
|
|
(5.5) %
|
|
|
(7.4) %
|
|
|
6.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Statistics by
State
|
|
|
|
|
|
|
|
|
|
|
|
Oklahoma
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
customers (in thousands)
|
|
919
|
|
|
915
|
|
|
922
|
|
|
916
|
Actual degree
days
|
|
234
|
|
|
219
|
|
|
1,953
|
|
|
2,204
|
Normal degree
days
|
|
228
|
|
|
228
|
|
|
2,020
|
|
|
2,020
|
Percent colder (warmer)
than normal weather
|
|
2.6 %
|
|
|
(3.9) %
|
|
|
(3.3) %
|
|
|
9.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Kansas
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
customers (in thousands)
|
|
649
|
|
|
650
|
|
|
652
|
|
|
652
|
Actual degree
days
|
|
316
|
|
|
399
|
|
|
2,567
|
|
|
2,931
|
Normal degree
days
|
|
394
|
|
|
394
|
|
|
2,854
|
|
|
2,855
|
Percent colder (warmer)
than normal weather
|
|
(19.8) %
|
|
|
1.3 %
|
|
|
(10.1) %
|
|
|
2.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
customers (in thousands)
|
|
700
|
|
|
697
|
|
|
700
|
|
|
696
|
Actual degree
days
|
|
43
|
|
|
17
|
|
|
945
|
|
|
1,199
|
Normal degree
days
|
|
45
|
|
|
50
|
|
|
1,030
|
|
|
1,049
|
Percent colder (warmer)
than normal weather
|
|
(4.4) %
|
|
|
(66.0) %
|
|
|
(8.3) %
|
|
|
14.3 %
|
Analyst
Contact:
|
Erin
Dailey
918-947-7411
|
Media
Contact:
|
Leah
Harper
918-947-7123
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/one-gas-announces-second-quarter-2023-financial-results-reaffirms-2023-financial-guidance-301889517.html
SOURCE ONE Gas, Inc.