OGS 8-K
ONE Gas, Inc. (OGS)
8-K
2024-12-04
For: 2024-12-04
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April 09, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
| (Date of report) | |||||
| (Date of earliest event reported) | December 4, 2024 | ||||
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction | (Commission | (IRS Employer | ||||||||||||
| of incorporation) | File Number) | Identification No.) | ||||||||||||
(Address of principal executive offices)
(Zip code)
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 7.01 | Regulation FD Disclosure | |||||||
On December 4, 2024, we issued a news release announcing our 2025 financial guidance and updated five-year growth rates, and posted an investor presentation with additional information to our website. The news release and the investor presentation are furnished as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein. These materials are also available on our website, www.onegas.com. The information disclosed in Item 7.01, including Exhibits 99.1 and 99.2 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing. | ||||||||
| Item 9.01 | Financial Statements and Exhibits | |||||||
| (d) | Exhibits | |||||||
| Exhibit Number | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
2
SIGNATURE
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| ONE Gas, Inc. | |||||||||||
| Date: | December 4, 2024 | By: | /s/ Christopher P. Sighinolfi | ||||||||
| Christopher P. Sighinolfi Senior Vice President and Chief Financial Officer | |||||||||||
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Exhibit 99.1
| December 4, 2024 | Analyst Contact: | Erin Dailey 918-947-7411 | |||||||||
| Media Contact: | Leah Harper 918-947-7123 | ||||||||||
ONE Gas Issues 2025 Financial Guidance
TULSA, Okla. - Dec. 4, 2024 - ONE Gas, Inc. (NYSE: OGS) today issued financial guidance for 2025 and updated its five-year growth rates.
“We enter 2025 focused on creating long-term value for our stakeholders, supporting growing customer demand, and enhancing the safety and reliability of our system,” said Robert S. McAnnally, president and chief executive officer. “Our strategic plan supports a long runway of growth opportunities and investments in system reinforcements.”
2025 FINANCIAL GUIDANCE
ONE Gas (the “Company”) expects 2025 net income to be in the range of $254 million to $261 million, with earnings per diluted share of $4.20 to $4.32. The midpoints of 2025 guidance are net income of $257 million and earnings per diluted share of $4.26.
The Company’s 2025 earnings guidance includes the benefit of new rates and customer growth, partially offset by higher operating expenses, including employee-related and contractor costs, depreciation expense from capital investments, and interest expense.
Capital investments, including asset removal costs, are expected to be approximately $750 million in 2025, primarily targeted for system integrity and replacement projects. Capital investments for extensions to new customers are expected to be approximately $180 million, largely due to continued growth opportunities in Texas and Oklahoma. The anticipated average rate base for 2025 is $5.8 billion.
The Company has outstanding forward sale agreements covering approximately 3.6 million shares of its common stock at an average price of approximately $77 per share. Had all forward shares been settled at the end of the third quarter, net proceeds would have been approximately $275 million. The Company expects to settle approximately $245 million of its outstanding equity under forward sale agreements at year-end 2024 and roll forward approximately $30 million to settlement in 2025.
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ONE Gas Issues 2025 Financial Guidance
Dec. 4, 2024
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FIVE-YEAR FINANCIAL GROWTH RATES
For the five years ending 2029, capital investments, including asset removal costs, are expected to be in the range of $750 million to $850 million per year, or approximately $4.0 billion for the five-year period, including growth capital of approximately $1.0 billion. Capital expenditures support estimated average rate base growth of 7% to 9% per year through 2029.
Annual net income and diluted earnings per share are expected to increase by an average of 7% to 9% and 4% to 6%, respectively, over the long term and the Company expects to be at the high end of these respective ranges through 2029.
Operating costs over the five-year period are expected to increase an average of approximately 4% per year, down from the 5% average annual increase indicated in the 2024 guidance.
The Company estimates total net long-term financing needs for the period 2025 through 2029 of approximately $1.5 billion, of which approximately 40% is expected to be equity.
Consistent with last year's guidance, the Company expects to achieve an average annual dividend growth rate of 1% to 2% through 2029, subject to the board of directors’ approval, with a target dividend payout ratio of 55% to 65% of net income.
CONFERENCE CALL, WEBCAST AND INVESTOR PRESENTATION
The ONE Gas executive management team will conduct a conference call on Thursday, Dec. 5, 2024, at 8 a.m. Eastern Standard Time (7 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 934495, 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 503269.
Additional information can be found in the 2025 Financial Guidance investor presentation on the ONE Gas website at https://www.onegas.com/investors/financials-and-filings/guidance.
Guidance estimates may be impacted by the variables in the forward-looking statements listed
below.
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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.
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ONE Gas Issues 2025 Financial Guidance
Dec. 4, 2024
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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;
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ONE Gas Issues 2025 Financial Guidance
Dec. 4, 2024
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•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 and the Middle East;
•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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December 2024 2025 Financial Guidance
FORWARD LOOKING STATEMENTS | 2HIGHLIGHTS | 2 71% market share, the largest in Kansas 89% market share, the largest in Oklahoma 13% market share, the third largest in Texas ONE Gas, Inc. (NYSE: OGS) is a 100-percent regulated natural gas utility and is one of the largest natural gas utilities in the United States. ONE Gas provides natural gas distribution services to approximately 2.3 million customers in Kansas, Oklahoma and Texas. Its largest natural gas distribution markets by customer count are Oklahoma City and Tulsa, Oklahoma; Kansas City, Wichita and Topeka, Kansas; and Austin and El Paso, Texas. We deliver natural gas for a better tomorrow. About Us
Financial Outlook
FINANCIAL OUTLOOK | 4 2025 Guidance Summary1 EARNINGS OUTLOOK • Net income for 2025 in a range of $254 - $261 million • EPS range of $4.20 - $4.32 per diluted share • Assumes 60.5 million diluted shares outstanding CAPITAL INVESTMENTS • 2025 capital investments of $750 million, with approximately $180 million attributed to customer growth • Average rate base of $5.8 billion in 2025 FINANCING ACTIVITIES • Completed debt issuance in August 2024; the next maturity not until 2029 • Forward sale agreements covering ~3.6M shares are already in place at prices averaging ~$77/share • Expect adjusted CFO/Debt of 19-20%2 Creating long-term value and serving a growing customer base 1 Issued Dec. 4, 2024, based on most recent 2024 projected EPS midpoint of $3.90 2 Internal estimate based on Moody's methodology
FINANCIAL OUTLOOK | 5 Financing Requirements 2025 dividends and capital investments primarily funded by cash flow from operations of approximately $600-$650 million 1 • Expected 2025 short- and long-term financing need of $270-$300 million ~$1.5 billion net long-term financing needs through 2029, of which ~40% is expected to be equity issuances • Forward sale agreements covering ~3.6 million shares have already been executed at prices averaging approximately $77/share (~$275 million in total 2 ) • Plan to settle ~$245 million at year-end 2024 and roll forward ~$30 million for year-end 2025 settlement. With existing 2025 forwards, net new 2025-29 equity raises amount to ~37.5% of total funding need Maintaining Balance Sheet Strength 1 2025 expectation, before changes in working capital. See non-GAAP information in Appendix 2 Expected net proceeds of ~$275M had all the shares settled as of September 30, 2024
FINANCIAL OUTLOOK | 6 Five-Year Financial Highlights CAPITAL INVESTMENTS & RATE BASE • Capital investments of approximately $4.0 billion ̶ $2.8 billion investment in system integrity and replacement projects ̶ Growth capital of $1.0 billion • Estimated average 2025 rate base1 of $5.8 billion • Average annual rate base growth of 7 – 9% • Expect adjusted CFO/Debt to rise to ~21% by 20292 Investing in a Reliable and Growing System AVERAGE ANNUAL GROWTH RATES • Based off 2024 updated guidance midpoint of $3.90 • Long-term net income growth of 7 – 9% ̶ For 2024-2029 period, expect to be at the high end of the range ̶ In addition to capital investment, key drivers include: ▪ Regulatory outcomes ▪ Operating cost increases averaging ~4% annually • Long-term earnings per diluted share growth of 4 – 6% ̶ For 2024-2029 period, expect to be at the high end of the range • Dividend growth of 1 – 2%3 ̶ Balances shareholder returns with internal investment in growth ̶ Holds payout ratio proximate to our 55 – 65% target 1 For definition of average rate base, see Appendix 2 Internal estimate based on Moody's methodology 3 Subject to Board approval
FINANCIAL OUTLOOK | 7 $2.07 $2.24 $2.65 $3.08 $3.25 $3.51 $3.68 $3.85 $4.08 $4.14 $3.90 $4.26 $5.22 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024G 2025G 2026 2027 2028 2029* Long-Term EPS Performance & Outlook EPS CAGR 4-6% Note: 2024 & 2025 EPS represent mid-points of respective guidance ranges. *2029 EPS is implied by the high end of the guided 4-6% 2024-2029 EPS CAGR. 5-Year Forecast (2024G - 2029*) ~6.0% 10-Year (2014 - 2024G) 6.5% 10-Year (2015 - 2025G) 6.6% 15-Year (2014 - 2029*) 6.3% EPS CAGRs
FINANCIAL OUTLOOK | 8 Balance Sheet Strength RATING AGENCY RATING OUTLOOK Moody’s A3 Stable S&P A- Stable REVOLVING CREDIT FACILITY • $1.35 billion limit • Expires March 2028 COMMERCIAL PAPER PROGRAM • $1.35 billion limit Strong credit rating and financing flexibility SENIOR DEBT MATURITIES * (MILLIONS) ~4.3% weighted average coupon rate * * Excluding KGSS-I long-term debt associated with Winter Storm Uri of ~$287M at 5.486% due 2032 * As of September 30, 2024
Capital Investments
CAPITAL INVESTMENTS | 10 $383 $449 $525 $552 $540 $138 $177 $178 $172 $179 $21 $32 $26 $26 $31 $202 $216 $234 $252 $283 2021 2022 2023 2024G 2025G CAPITAL INVESTMENTS (MILLIONS) System Integrity Customer Growth Other/IT Depreciation $542 $658 $729 ~$750 ~$750 Well-Defined Capital Investment Plan Investments ~ 3x Depreciation Kansas $151 Oklahoma $288 Texas $311 2025G CAPITAL INVESTMENTS BY STATE (MILLIONS) Note: Capital investments include asset removal costs and accruals
CAPITAL INVESTMENTS | 11 Capital Investments $139 $159 $185 $169 $151 $72 $75 $78 $83 $92 2021 2022 2023 2024G 2025G KANSAS 2024G: 2.0X DEPRECIATION $188 $242 $256 $288 $311 $48 $53 $63 $69 $83 2021 2022 2023 2024G 2025G TEXAS 2024G: 4.2X DEPRECIATION (M IL L IO N S ) Note: Capital investments include asset removal costs and accruals 2024G: 2.9X DEPRECIATION $215 $257 $286 $293 $288 $82 $88 $93 $100 $108 2021 2022 2023 2024G 2025G OKLAHOMA
CAPITAL INVESTMENTS | 12 $1.38 billion $2.57 billion $1.85 billion 2025G AVERAGE RATE BASE* BY STATE TOTAL: $5.8 BILLION Kansas Oklahoma Texas Rate Base $4.25 $4.69 $5.15 $5.55 $5.80 2021 2022 2023 2024G 2025G AVERAGE RATE BASE* (BILLIONS) * See Appendix for definition ~5% growth expected in 2025
Our Strategy
OUR STRATEGY | 14 Serving a Growing Customer Base Growing Demand for Natural Gas Provides Long-Term Growth Opportunity Economic growth creates durable residential and commercial development and drives system expansion Balanced growth across service territory, led by Oklahoma City, Austin and El Paso Strong support for natural gas with energy choice legislation in all jurisdictions ~$25 billion in new manufacturing projects announced since 2021 WSJ Top 25 “Hottest Job Markets” lists 4 cities in ONE Gas service territory1 #5 Oklahoma City #7 Austin #12 Kansas City #21 Tulsa Forbes Top 15 “Best Cities to Move to in 2024” includes 5 ONE Gas cities2 #3 Oklahoma City #4 Wichita #6 Tulsa #12 El Paso #14 Austin 1 The Wall Street Journal partnered with Moody’s Analytics to rank markets based on unemployment rate, labor-force participation rate, change in employment levels, size of labor forces and wages. 2 Forbes Home experts ranked cities based on value, quality of life, job market and desirability.
OUR STRATEGY | 15 Enhancing Capacity & Improving Operational Efficiency Constructing a Foundation for Growth Improved processes and workforce investments increase operating capacity and capabilities Investment in workforce development fosters strong performance and retention Managing expenses helps preserve customer affordability Coordinated capital execution supports safety, reliability, and system expansion Mainline extension projects provide flexibility in serving new commercial and housing developments In-sourcing key positions creates efficiencies that help drive down O&M expenses
Appendix
APPENDIX | 17 Recent Regulatory Filings C O M P L E T E D JURISDICTION APPROVED RATES (MILLIONS) EFFECTIVE DATE EQUITY RATIO RETURN ON EQUITY Central-Gulf – Rate Case $19.3 M Dec-2024 59.58% 9.7% Kansas – Rate Case $35.0 M (net) Nov-2024 N/A N/A* Rio Grande Valley – GRIP $3.6 M Sep-2024 59.10% 9.7% Oklahoma – PBRC $31.4 M Jul-2024 58.50% 9.4% West-North – GRIP $8.5 M Jul-2024 59.74% 9.6% Central-Gulf – GRIP $12.2 M Jun-2024 59.00% 9.5% Rio Grande Valley – Rate Case $5.9 M Jan-2024 59.10% 9.7% Kansas – GSRS $8.0 M Dec-2023 N/A 9.3%* West-North – GRIP $7.3 M Jul-2023 59.74% 9.6% Central-Gulf – GRIP $11.5 M Jun-2023 59.00% 9.5% Oklahoma – PBRC $26.3 M Jun-2023 58.50% 9.4% West-North – Rate Case $8.8 M Feb-2023 59.74% 9.6% * Kansas Gas Service’s regulatory filings approved in February 2019 and October 2024, respectively, settled without a stated rate base, rate of return, authorized debt/equity ratio or authorized return on equity within the settlement. This reflects Kansas Gas Service’s estimate of rate base from those rate cases, adjusted for approved GSRS filings and return on equity embedded in the pre-tax carrying charge utilized in its GSRS filings.
APPENDIX | 18 Authorized Rate Base $1,616 $1,726 $1,854 $2,067 $2,273 2020 2021 2022 2023 2024 OKLAHOMA * Kansas Gas Service’s most recent completed rate case, approved in October 2024, was settled without a determination of rate base and reflects Kansas Gas Service’s estimate of rate base contained within the settlement. (M IL L IO N S ) $1,133 $1,197 $1,261 $1,330 $1,412 2020 2021 2022 2023 2024 KANSAS* $1,047 $1,239 $1,336 $1,528 $1,720 2020 2021 2022 2023 2024 TEXAS As of November 30, 2024
APPENDIX | 19 Rate Base Definition Authorized Rate Base $5.4 billion (as of Nov. 30, 2024) • Includes capital investments authorized in most recent rate cases and interim filings • Excludes any capital investments since last approved rate cases or filings 2025 Estimated Average Rate Base $5.8 billion • Average of rate base per book at beginning and end of year • Includes capital investments and other changes in rate base not yet approved for recovery
APPENDIX | 20 (MILLIONS) 2025 GUIDANCE * Net income $ 257 Depreciation and amortization 298 Deferred taxes 50 Other 23 Cash flow from operations before changes in working capital $ 628 Non-GAAP Reconciliation Cash Flow From Operations Before Changes in Working Capital * Amounts shown are estimated midpoints as contemplated in 2025 guidance Non-GAAP Information: ONE Gas has disclosed in this presentation cash flow from operations before changes in working capital, which is a non-GAAP financial measure. Cash flow from operations before changes in working capital is used as a measure of the company's financial performance. Cash flow from operations before changes in working capital is defined as net income adjusted for depreciation and amortization, deferred income taxes, and certain other noncash items. This non-GAAP financial measure is useful to investors as an indicator of financial performance of the company to generate cash flows sufficient to support our capital expenditure programs and pay dividends to our investors. ONE Gas cash flow from operations before changes in working capital should not be considered in isolation or as a substitute for net income or any other measure of financial performance presented in accordance with GAAP. This non-GAAP financial measure excludes some, but not all, items that affect net income. Additionally, this calculation may not be comparable with similarly titled measures of other companies. A reconciliation of cash flow from operations before changes in working capital to the most directly comparable GAAP measure are included in this presentation.
APPENDIX | 21 Investor Information Contact Information and Forward-looking Statements Statements contained in this presentation that include or refer to Company expectations, our business outlook, our future plans or predictions relating to any matters should be considered forward-looking statements that are covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Securities Act of 1933 and the Securities and Exchange Act of 1934, each as amended. All statements, other than statements of historical facts, included in this presentation are forward-looking statements. Words such as “anticipates,” “expects,” “projects,” “intends,” “goals,” “plans,” “potential,” “might,” “believes,” “target,” “objective,” “strategy,” “opportunity,” “pursue,” “budgets,” “outlook,” “trends,” “focus,” “on schedule,” “on track,” “poised,” “slated,” “seeks,” “estimates,” “forecasts,” “guidance,” “scheduled,” “continues,” “may,” “will,” “would,” “should,” “could,” “likely,” and variations of such words and similar expressions are intended to identify such forward-looking statements. One should not place undue reliance on forward-looking statements. In addition, statements that refer to or are based on estimates, forecasts, projections, uncertain events or assumptions, including statements relating to market opportunities, future products or processes and the expected availability and benefits of such products or processes, and anticipated trends in our businesses or the markets relevant to them, including those developments relating to regulation and litigation trends and developments, also identify forward-looking statements. Such statements are based on management's expectations as of the date of this investor presentation, unless an earlier date is indicated, and involve many risks and uncertainties, known and unknown, that could cause actual results, performance or achievements to differ materially from those expressed or implied in these forward-looking statements. It is important to note that the actual results could differ materially from those projected in such forward-looking statements. Important risks and uncertainties that could cause actual results to differ materially from the company's expectations include, but are not limited to, our ability to recover, manage and maintain costs; regulatory or legislative changes in the jurisdictions in which we operate; the length and severity of unpredictable events, including, but not limited to, pandemics, threatened terrorism, war or cyber-attacks or breaches, or extreme weather events, including those related to climate change; the competitive implications of alternative sources of energy and efforts to conserve energy; our competitive position, including, but not limited to our ability to secure competitive sourcing and pricing and our ability to compete with respect to expansion and infrastructure; the economic climate and our comparable economic position; our access to capital and the restrictions that result from our current capital arrangements; the effectiveness of our risk mitigation and compliance efforts; the uncertainties of any estimates or assumptions we use in our projections; our strategic and transactional efforts and future plans; and costs and uncertainties relating to our workforce, and other risks and uncertainties, including those that are set forth in ONE Gas’ earnings release dated Nov. 4, 2024, which is included as an exhibit to ONE Gas’ Form 8-K furnished to the SEC on such date. For additional information regarding these and other factors that could cause actual results to differ materially from such forward-looking statements, refer to ONE Gas’ Securities and Exchange Commission (SEC) filings., including the Company's most recent reports on Forms 10-K and 10-Q. Copies of the Company’s Form 10-K, 10-Q and 8-K reports may be obtained by visiting our “Investors” website under “Financials & Filings” at https://www.onegas.com/investors/financials-and-filings/quarterly-results/default.aspx or the SEC’s website at www.sec.gov. Other unpredictable or unknown factors not discussed in this presentation could also have material adverse effects on the Company, its operations or the outcomes described in the forward-looking statements in this presentation or in the Company’s filings with the SEC. All future cash dividends discussed in this presentation are subject to the approval of the ONE Gas board of directors. All references in this presentation to guidance are based on news releases or disclosures issued on or before Dec. 5, 2024, and are not being updated or affirmed by this presentation. ONE Gas does not undertake, and expressly disclaims any duty, to update any statement made in this presentation, whether as a result of new information, new developments or otherwise, except to the extent that disclosure may be required by law. ONE Gas, Inc. 15 E 5th Street Tulsa, OK 74103 www.onegas.com Erin Dailey Director, Investor Relations and Sustainability (918) 947-7411 [email protected]