Good day, and welcome to the ONE Gas First Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Brandon Lohse. Please go ahead.

Good morning, and thank you for joining us on our first quarter 2020 earnings conference call. This call is being webcast live and a replay will be made available later today. After our prepared remarks, we will be happy to take your questions. A reminder that statements made during this call that might include ONE Gas' expectations or predictions should be considered forward-looking statements and are covered by the Safe Harbor provision of the Securities Acts of 1933 and '34. Actual results could differ materially from those projected in any forward-looking statement, and include, among others, impacts of the length and severity of a pandemic or other health crisis, such as the recent outbreak of COVID-19. For a discussion of other factors that could cause actual results to differ, please refer to our SEC filings. Joining us on the call this morning are Pierce Norton, President and Chief Executive Officer; Caron Lawhorn, Senior Vice President and Chief Financial Officer; Sid McAnnally, Senior Vice President, Operations; and Curtis Dinan, Senior Vice President, Commercial. And now, I'll turn the call over to Pierce.

Thanks, Brandon. Good morning, everyone, and thank you for joining us on the call today. For the first time in our lifetime, we're faced with an event that has impacted our economy, our businesses and our daily lives. It has impacted every person in some way. There is a good chance many of us on this call have lost a family member or friend due to the COVID-19 virus. To those people, the ONE Gas family extends our deepest condolences and heartfelt sympathies. We are sorry for your loss. Because of the COVID-19 pandemic, the call today will be different. We will spend most of our time talking about how the virus and the government reactions to COVID-19 have affected our business. And more importantly, give you insight into our organization's thought processes for dealing with uncertainty. Caron Lawhorn will begin with a brief update of our first quarter results; Sid McAnnally will cover the operational details; Curtis Dinan will update you on the commercial environment we are seeing and our regulatory activity. And then Caron will summarize how we view the financial impacts. Our business continuity plan which provides a framework during the crisis is based on three principles: anticipation, awareness, and agility. We support our decisions around these principles with our core values of safety, ethics, inclusion and diversity, service, and value. As Sid, Curtis, and Caron give you examples of our current business environment, you will have a better understanding of the culture that is ONE Gas. A culture based on collaborating around two questions: What if things are not as they seem, and what else can we do to solve challenges and create opportunities? I will return later with my closing remarks, but now here is Caron with our first quarter results.

Thanks, Pierce. Good morning, everyone. As Pierce noted, COVID-19 has had a significant impact around the world, in this country, and in our service territories. Despite that, our business performed well in the first quarter, and we experienced no material financial impact from the pandemic. Net income was $91.7 million or $1.72 per diluted share compared with $93.7 million or $1.76 per diluted share in the first quarter of 2019. Our first quarter results reflect an increase in net margin at $6.2 million over the same period last year, which includes new rates in Kansas and Texas and residential customer growth. We experienced warmer weather in 2020 compared with 2019, which contributed to a $5 million decrease in net margin from lower volumes, net of weather normalization. Operating costs for the first quarter were $3.1 million lower than the same period last year, which includes a $4.3 million decrease in the expense associated with the change in the value of liability for our non-qualified employee benefit plans relative to the prior year. Other expense net increased $6.2 million in the first quarter 2020 compared with the first quarter 2019, which includes a $6.7 million decrease in the value of investments associated with non-qualified employee benefit plans. Combined, the net impact of non-qualified employee benefit plans was a decrease to pre-tax income of $2.4 million in the first quarter 2020 versus 2019. Our capital expenditures and asset removal costs increased $29 million this quarter compared with the first quarter last year. Our strong start to the year sets us up well as we continue to execute our capital plan during these challenging times. We expect the capital spending will be about $475 million for the full year. Yesterday, the ONE Gas Board of Directors declared a dividend of $0.54 per share, unchanged from the previous quarter. This dividend is consistent with our guidance for 2020. And now, I'll turn it over to Sid McAnnally to begin an update on our operations related to COVID-19.

Thank you, Caron, and good morning. Our business continuity plan allowed us to quickly establish a cross-functional pandemic task force representative of the entire organization, and to initiate daily task force and senior leadership meetings. Collectively, we developed a multi-tiered response plan that adjusts how we work based on the risk level of virus-related activity in our operating areas. This framework focused on the most critical areas of the crisis: the health of our employees and customers, tracking critical data, deploying employees to work remotely where possible, adjusting field operating protocols, and monitoring our supply chain. I'll provide more context around each of these five critical areas. First, safety continues to be our top priority, which is why we established employee COVID-19 protocols. At the onset of the COVID-19 outbreak in our service territories, we began directing employees with potential exposure or flu-like symptoms to an independent medical adviser for a screening process that determined that the employees should self-quarantine, consult with a physician, or could safely return to work. This screening process has made a significant impact on the ongoing health and safety of our workforce. We initially quarantined 7% of our workforce based on this process, and today that number is less than 1.5%. Approximately 20% of our workforce has used this screening service. As of April 23, we've had a total of 26 employees who have tested for the virus, with four employees testing positive. We are pleased to report at this time we have no hospitalizations or fatalities from COVID-19. Second, we've been tracking critical data every day. We have provided daily reports to the organization, summarizing COVID-19 related cases on the national and state levels, as well as ONE Gas employee data as we watch trends in our operating areas. We also established a special account code to capture COVID-19 related expenses such as personal protective equipment, the cost of sanitizing high-use workspaces and vehicles, and medical advisory services. We are also seeing decreases in other expenses, such as travel. Third, we quickly deployed the employees who could work remotely over a three-day period. We currently have approximately 50% of our 3,600 employees working from home. Prior to the pandemic, we were in the process of deploying the always-on Virtual Private Network to company-owned devices as part of the cyber initiative to further protect our assets. This allows our employees to easily and securely access all of their systems and resources as if they were physically sitting in our offices. All of our systems, including Internet bandwidth, are operating normally. For employees who continue to work in our facilities, we have reconfigured workspaces to allow for appropriate social distancing. Fourth, we have made operating adjustments for our field employees. We have two goals in mind: adjust to avoid customer contact where feasible, and if not feasible protect our employees and the customer. We have suspended elective work that results in planned customer outages, which would have required us to enter customer homes. Our call center personnel are screening all customer service orders to determine possible COVID-19 exposure in the premises and we perform further screening when our service technicians arrive on-site before deciding to enter the premises. We've adopted additional personal protective equipment practices based on recommendations from the Centers for Disease Control and the Occupational Safety and Health Administration, primarily focused around the use of respirators and cloth masks. The employees are not allowed to enter a customer's home where there is a known possibility of illness or exposure to COVID-19, unless responding to an emergency or an outage. In those cases, additional personal protective protocols go into place, including a disposable full-body suit and the presence of one of our safety trainers. At all other customer appointments, our employees are practicing social distancing and wearing the appropriate PPE, including respirators. We currently have an adequate supply of respirators and N95 masks and continue to monitor our PPE supply closely. We are also screening for elevated temperatures at our large service centers and we are in the process of installing automated thermal image temperature screening stations to be deployed at certain locations to allow entry only to those employees who do not have an elevated fever. Finally, we are closely monitoring our supply chain. To date, we have not experienced procurement issues, and we have adequate inventory on site for all operations and related activities. Pricing has not been impacted to date but certainly could be in the future, so it is one of the factors we continue to monitor. Our supply chain group has long-standing contacts with significant manufacturers in our sector, and it has been in close contact with them to review their operations and create redundancy where possible. With respect to the supply of natural gas, our supply portfolios include a diverse group of suppliers and storage providers. We have not experienced and do not anticipate issues with acquiring adequate supplies of natural gas to serve our sales customers. And now, I'll turn over to Curtis Dinan.

Thank you, Sid, and good morning, everyone. My first comments will address the impact of COVID-19 on our commercial activities, followed by a regulatory update. Across all three of our states, orders issued by the governors related to COVID-19 declared construction and essential business. Construction activity with our builders and developers has remained robust through the first four months of 2020 including single and multifamily construction as well as commercial developments. We anticipated a slowdown as city permitting offices were closed, but the backlog of permitted projects has allowed construction activity to continue, and we are not seeing any significant impact from the pandemic. As is typical in all years, we have seen some project delays, but these have been offset by new projects that are moving forward. Accordingly, we are maintaining our expectations for growth capital project spending. Continuing the trend we experienced in 2019, our customer growth rates for sales customers remain strong. The moratoriums on disconnects had a slight impact on our first quarter totals, but we have not typically had a large number of disconnects during the first quarter. With the disconnect moratoriums extending to May 15, we will see higher customer counts in the second quarter that are not necessarily reflective of higher growth rates in our business. We have approximately 12,000 transport customers on our system that represented $114 million or 12% of our net margin in 2019. Our 40 largest transport customers account for $28 million or 25% of our 2019 transport revenues. To date, two of these customers, one in the automotive industry and one in the residential shingle business, have temporarily suspended operations. Outside of our 40 largest transport customers, we have also had 19 other businesses that have reduced operations or temporarily or permanently suspended operations. Collectively, we anticipate a negative impact to revenues of approximately $100,000 per month from these transport customers based on their current level of business activity. Although we have suspended disconnections for delinquent accounts until May 15, we continue to contact our customers with past-due accounts to offer flexible payment arrangements and have waived late payment fees in an effort to help our customers affected by the pandemic bring their accounts current. We have also been working with our regulators to issue accounting orders to allow for the establishment of regulatory assets for the impact of COVID-19 on our business. These orders generally allow for the deferral of pandemic-related expenses, including increased costs for bad debts, personal protective equipment, facility sanitization costs, medical advisory services, costs for testing and treating employees that have potentially been exposed to COVID-19, and other necessary costs to address the impacts of the pandemic, as well as certain lost revenues. The Railroad Commission of Texas has issued an order and we are working with our regulators in Kansas and Oklahoma to obtain similar orders. Moving on to our other regulatory activity. In Oklahoma, a performance-based rate change filing in February requesting an increase in base rates of $11.8 million will be the first increase in Oklahoma since early 2016. New rates are expected to be effective in August 2020 as required base in 2021. In Texas, in December 2019, for all customers in the Central Texas and Gulf Coast service areas, we requested to consolidate the Gulf Coast service area with Central Texas and increase rates by $15.6 million. If approved, new rates are expected to become effective in the third quarter of 2020 and our number of jurisdictions in Texas will decrease to 5 from 6. Our filing is based on a return on equity of 10% and a capital structure with equity of approximately 62%. We estimate that a 25 basis point change in ROE would change the revenue requirement by approximately $950,000 and a 1% change in equity by approximately $350,000. Texas Gas Service also made a Gas Reliability Infrastructure Program or GRIP filing for all customers in the West Texas service area for a $4.7 million increase. We anticipate that new rates will be effective in the third quarter of 2020. And now, I'll turn it back to Caron.

Thanks, Curtis. As you heard from Sid and Curtis, COVID-19 has not impeded our work in the field, including our capital spending on both system integrity and growth projects. To summarize what you've heard regarding how our earnings are being impacted by COVID-19, we expect a reduction in revenues from customers temporarily or permanently impacted by the pandemic; we expect higher bad debts as a result of the moratoriums on disconnects; and we expect to incur incremental expenses for other COVID-19 related costs. We also expect reductions in expenses in some areas, such as expenses for travel. With respect to our sales customers, which accounted for over 86% of our net margin for the first quarter 2020, partly associated to the customer growth, which has continued to remain strong. With over 70% of our net margin coming from fixed charges, our exposure to volumetric risk is limited. We believe the accounting orders that we have or expect to receive in these states will allow us to seek recovery in future proceedings of incremental expenses and certain lost revenues associated with COVID-19. These accounting orders are expected to mitigate the impact of lost revenues and net increases in expenses on earnings; however, amounts expected to be deferred for later regulatory recovery under the accounting orders must be probable of recovery in order to be recorded under Generally Accepted Accounting Principles. As a result, there could be a delay in the recognition for financial reporting purposes of amounts that may ultimately be approved for recovery until the conclusion of future regulatory proceedings. Based on what we know currently, we are affirming our guidance range with net income expected to be in the range of $186 million to $198 million or $3.44 to $3.58 per diluted share. However, downside risk to 2020 earnings associated with the impact of COVID-19 exists and could result in net income and earnings per share below the midpoint of the range. From a liquidity perspective, we expect lower cash flows resulting primarily from the effects of the moratorium on disconnects. At March 31, 2020, we had short-term liquidity available through our commercial paper program and cash on hand totaling $235.2 million. We have a $700 million credit facility to support our commercial paper program and a $250 million after-market program for the issuance of equity. Earlier this month, we entered into a second revolving credit agreement which provides an additional $215 million of liquidity over the next year. Further, our investment-grade credit ratings and strong balance sheet provide us access to the financial markets for the issuance of long-term debt and equity. We believe our sources of liquidity are adequate to support our current and planned level of operations. Now I will turn it back over to Pierce for some closing comments.

Thank you, Caron, Curtis, and Sid. In closing today, I'd like to thank all the medical staff in our service territories for the heroic work they do, especially during this pandemic. I also want to send our appreciation to the first responders on the front line, firefighters, law enforcement, paramedics, and utility workers. They too deserve recognition for the critical life services they provide every day. Thanks to the diligence of each ONE Gas employee to the pandemic protocols and our focus on our core values, we've been able to continue running our business with minimal disruptions. I'm extremely proud of our employees and want to give special thanks to each of them for their continued professionalism under stress, resolve when there is no clear end, poised in the face of uncertainty, and moral courage to do the right thing. We are fortunate to work in an industry that strives to make every natural gas utility better through collaboration. Once again, our trade organization, the American Gas Association, organized calls with subject matter experts that are proving to be beneficial in navigating this process in real time. Thank you AGA for what you do. As a natural gas utility, we have an important role in serving our communities and our customers. And that includes taking the necessary precautions to protect our sales and the people around us. We will get through this pandemic by relying on the same values we use to address any challenge we face in our business. Thank you all, again, for joining us this morning. Operator, we're now ready for questions.

Yes. And we'll go first to Shahriar Pourreza with Guggenheim.

Hi, good morning. It's actually Constantine here for Shahriar. That was a very thorough result. Thank you very much and I understand the challenging times that we're all in. So kind of one of the questions that we had was understanding that kind of the first quarter results kind of represented a lot of weather headwinds and there is some potential slowdowns kind of related to COVID. How are you guys thinking about kind of under a return to normal weather scenario going forward on your sales forecast and kind of growth numbers in terms of customer counts, and in general, kind of throughput? And does that require any kind of regulatory rethinking or regulatory outcomes to realign future earnings with and how you're thinking about that?

Yes, so you're sitting in for Shahriar, right?

Yes, it's Constantine.

Thanks, Connie. So a couple of things; as we've been in the moratorium with the disconnects that we would be starting at this time of the year, we haven't at this point, and that suspended until at least May 15. So, even if we get to that point in those moratoriums, on that date, it will still take a period of time before we would ramp up to our normal operations in our customer service groups as well as in field operations to deal with those. So my comments earlier about seeing perhaps some elevated numbers in our customer counts, that's really what I was trying to address with that. Again, a couple of other comments on there; I believe one related to how we're thinking about weather. And as you know, we have weather normalization in all of our service territories and you saw that in the results that while we had much warmer weather in the first quarter, and it did impact our sales volumes that was partially offset due to the impacts of weather normalization, and that's really what those mechanisms are designed to achieve. So when we give guidance, whether it's as we think about it for the balance of the year, or we're giving it at the beginning of the year, we always assume normal weather in that guidance. And then you'll see some pluses and minuses from that as we go through the year as weather does vary. Was that all the items in your question?

Yes, that answers that one. And I guess just shifting a little bit more to a long-term view on regulatory outcomes and kind of ROEs as you're consolidating jurisdictions and kind of filing for the rate cases, where do you see kind of ROEs trending, and specifically kind of understanding that there is some systematic ROE gap with kind of having capital deployed and just not getting the recovery of every single cost. Is that kind of standing to improve with kind of this next round of rate cases through 2020-2021?

Yes, so, a couple of points there. The first one, as I mentioned in my prepared comments, the rate case or the PBR filing that we have in Oklahoma, right now, this will be the first rate increase in Oklahoma since early 2016. So that's been a number of periods since we've had an increase there. And the intent of whether it's a GRIP filing or a GSRS or a cluster of these different mechanisms that we have, what those represent are smaller filings that are meant to get more timely recovery of the capital dollars that we're spending. So we do continue to see those helping to close that gap and to get more timely recovery. So, as an example of that again pointing to Kansas, where we have the new GSRS mechanism that we filed under for the first time last year, you might remember that was only a partial period. This year will be the first year that it covers a full 12-month period, and there is more capital that's eligible in that mechanism today than there used to be. And so we've talked about how much of our capital is subjected to annual filings in the past that's been about 80%, but now what we're giving guidance to is that about 90% of our capital is recovered through or addressed through annual filings. So all of those things are helping to continue to progress as we have been over the past six years.

Yes, that's very helpful. Thank you, guys. I'll jump back in queue.

We'll go next to Aga Zmigrodzka with UBS.

Good morning. Hope you're all safe and healthy. My first question is OGS has roughly 72% of revenues from fixed charges. Could you discuss how it fluctuates throughout the year? What percent of fixed charge do you expect in 2Q versus 1Q?

Aga, this is Curtis. We have not typically broken down our guidance by quarter in that manner. However, you could probably get a general idea since we report our volumes each quarter by the different types of customers and also provide the fixed charges for our sales customers. I don't have the data with me right now, but if you're looking for an estimate, that would be a good way to approach it. Generally speaking, as you move into those months with lower volumes, the net margin tends to be higher. Therefore, in the second and third quarters, while volumetric charges will be lower, the fixed charges will represent a larger percentage of the total net margin. Historically, whether viewed quarterly or annually, we don't see much fluctuation due to changes in volume.

Have you noticed any effects from social distancing on your pending rate cases for both filings? Is there a possibility that commissions will postpone decisions to avoid increasing customer bills during the pandemic?

Yes. In one instance, we have, Aga, in our Central Texas, Gulf Coast consolidation case, before the hearing date, before the ALJ was extended until May 20, and that was due to the Texas regulatory, the RRC, basically moving to a working remotely situation and a desire not to have that hearing as a virtual hearing. And so the anticipation is or that there was a new procedural schedule that was approved and that extended all of those dates by about a month. So we have seen a small impact, but that's the only one I can really point to you right now.

Last question is on the ATM program that you issued in February. When does OGS plan to issue equity under the program and what is the target equity issuance in this year?

Good morning, Aga. This is Caron. Our guidance indicates that we are issuing some equity this year. We have not been more specific about the amount or the exact timing of that. With the additional liquidity that we got through our $250 million revolving credit agreement earlier this month, we have the luxury, if you will, of being opportunistic in how we access the market. And so we are still evaluating what's the best approach for us to take.

Thank you for taking my question.

Thank you, Aga. Hope you are safe as well.

We'll go next to Chris Sighinolfi with Jefferies.

Hey, team, good morning. Thanks very much for the update. I think detailing all the ways you have responded and budgeted for COVID, exactly what our team was hoping to review this morning. So I do appreciate it. I do have a couple of follow-ups. I think probably two for Sid and maybe two for Caron. Sid, I know you historically rely on some non-employee contract labor in the normal course of operations. I may have missed this in your prepared comments. I apologize if I did. But can you just touch on that element of the operations? And if you've suspended those folks what the pathway you're thinking about for returning them to working for you?

Yes, sure. Chris, good morning. Thank you for the question. You're right; we do rely on external contract labor. But we were able to coordinate pretty closely with our contractors as this risk emerged, not only to check their health from an execution standpoint but also to look at their safety practices, to look at their PPE practices, and we were able to execute as you heard from Caron on the capital plan year-to-date in a way that suggests that that process was a success. We don't anticipate constraints going forward. We make room for that; we plan for that, but right now we don't anticipate that being an issue for us going forward.

Okay. I know everyone has spoken this morning, including Caron and Curtis, about maintaining the capital plan for the entire year. It seems that while some projects may not be moving forward, others are available to take their place. You also mentioned some operational changes related to COVID, the adoption of technology, and working conditions. I'm curious about the longer-term organization of OGS' operating teams and structure. What aspects of the changes you've made in response to the virus might become more permanent? I'm envisioning a scenario where you see efficiency gains from being pushed into rapidly adopting certain practices. I'm just interested in your thoughts on any potential lasting impacts from this early phase.

Yes, there are a number of things that we've seen, Chris; kind of an over-the-top has been increased communications because we are working remotely in many environments. The communications required to make sure that we were aligned from a management standpoint. We've found to be really effective and I would anticipate that I always felt like we were an organization that communicated very efficiently and often, but we've learned that the additional communication has been even more helpful. I think we'll continue that. To speak specifically to some practices, we have begun to do some training remotely using cameras that have been effective and efficient. I think we will continue to do that where it's appropriate. We have learned some things about how to best utilize PPE and how to train around that. We stepped up our training considerably to be sure that our employees have the knowledge that they needed. We felt like it was adequate before, but we wanted to go above and beyond in this environment. I think we've found ways to be more effective doing that training. We've also made some improvements in our supply chain as we were trying to manage that risk. So we've been in touch with our suppliers, as I mentioned in the prepared remarks. But to be a bit more specific, one of the things that we've done is not only look for redundancies, but also probed our contracting partners a bit on their own supply chains to make sure that we didn't have a level 2 supplier that we're feeding them with some critical element that might be a shortage that they had not thought of or they had seen. I want to thank our supply chain group. They have really done outstanding work, not only identifying additional PPE resources, and we have seen no lack of PPE. We haven't had to throttle our work due to an unavailability of PPE, but they've also worked with our suppliers to keep our normal work channel flowing, and we have not seen constraints nor do we anticipate any at this point.

Thank you for those additional comments. I have two finance-related questions. Caron, could you remind me about the non-qualified benefit plan performance and its impact on your other income line? I would like to know what you initially incorporated for that in the financial guidance for the year to get a sense of the magnitude of the initial quarter delta.

Similar to how we report weather in our guidance, we assume normal weather conditions. We also expect a typical level of performance for our non-qualified plans. To provide some context, if you look back at ONE Gas's history, the cost of the liabilities is included in operating costs, while the associated assets are reflected in other income and expenses. Annually, that net income or expense has varied from a negative expense of $2 million to a positive income of $1.3 million. Over time, these fluctuations are not substantial, but we do observe them from quarter to quarter and year to year, as we noticed in the first quarter. Since the markets have improved after March 31, we anticipate recovering some of that, while we primarily expect a stable performance from those plans.

Okay. That's helpful. And when you record those, I know there's some of your peers that also flagged this because it's a more regular or larger ticket item relative to the size of your company. And when they quote it, they quoted, it's the same number pre- and post-tax. Is that true for you as well? Or is that when you quote another income impact, when we think about an EPS impact, do we tax effect that?

You would tax effect, and I'm quoting a pre-tax number.

Okay. You mentioned some of this earlier, and I understand that the accounting rules create certain challenges. From what I gathered in your prepared remarks, it seems you might not fully recognize some of the regulatory initiatives you are undertaking. Later, once these are formally acknowledged by the regulator, there might be adjustments, which could lead to better outcomes. Did I capture that correctly?

You did. For example, we currently only have an accounting order in one state and are still waiting on the other two. There could be some uncertainty in determining what can be deferred under those accounting orders. A simple example is bad debt expense, which may complicate the distinction between what is COVID-related and what is normal bad debt expense. So there's a bit of ambiguity there. Additionally, for accounting purposes, we need to determine that any regulatory asset we establish is probable of recovery. There may be interpretations of those orders that we ultimately decide to follow, but from an accounting perspective, we haven't met the criteria necessary to record it yet. This could lead to some discrepancies.

You touched on something I was curious about, which is the overlap of your service territories with production regions for crude, natural gas, and natural gas liquids. We're observing an impact on activity and employment levels. While it is related to COVID, it may not be solely due to it. I'm interested in how you view the programs as they have been structured this year. I understand that two states have not yet approved them, but how might that line be addressed? It's a complicated question, so any insights would be appreciated.

Chris, this is Pierce. Let me try to answer your question, although I may not do it complete justice. Regarding supply and prices, customers definitely benefit from a lower price environment, but prices can drop too low, which becomes detrimental to the exploration and production as well as the midstream sectors. We are nearing that critical point, particularly with crude oil. As net exporters of natural gas from primarily Texas and Oklahoma, our main priority will be to address our state’s needs first. Therefore, any price reductions would likely impact other regions of the country rather than the areas where we consume. We are also entering a time of year when gas prices tend to drop, but electric prices usually rise. Many of us who have been in the midstream business have experienced these downturns before. When prices get too low, rig activity decreases, leading to restrained supply and eventually a rebound in prices. I recall experiencing similar situations in West Texas in 1986 when oil prices fell to $10 a barrel. Those of us who have been in the industry long enough have seen this cycle before. COVID may add some complications, but the situation is fundamentally driven by supply and demand. I’m not sure if I fully answered your question, but I hope this provides some insight.

My question was focused on the bad debt aspect, specifically regarding customers in your service area who are facing difficulties due to COVID and the impacts of stay-at-home orders on their businesses, particularly non-energy sectors. Curtis mentioned some transport customers who have either temporarily or indefinitely halted operations. Additionally, many customers are part of the oil and gas industry, which is currently facing its own challenges that are partly due to COVID and partly due to other factors. I'm interested in how you view the programs that have been structured or conceived this year. I understand that two of the states have not yet approved, but I wonder how that distinction might be managed. It's a complex question, but any insights you could provide would be appreciated.

Chris, it's also a good chance to remind everybody that in Texas, two-thirds of our customer base and rate base is in El Paso and in Austin. And those are two areas that are probably the least impacted by the downturn in oil and gas as related to loss of jobs.

Got you. Well, thanks a lot for the time, guys. I took a lot this morning, and I appreciate all the comments.

Thank you.

At this time, there is no response. I'll turn the call back to Brandon Lohse.

Thank you all, again, for your interest in ONE Gas. As noted in our earnings news release, an updated investor presentation is available in the Investor Relations section of our website. Our quiet period for the second quarter starts when we close our books in early July and extends until we release earnings in late July. We'll provide details on the conference call at a later date. Have a great day, and stay safe. Thank you.

This does conclude today's conference. We thank you for your participation.