ONE Gas Announces First Quarter 2026 Financial Results; Affirms 2026 Financial Guidance

ONE Gas Announces First Quarter 2026 Financial Results; Affirms 2026 Financial Guidance May 4, 2026 Declares Second Quarter Dividend Analyst call and webcast scheduled tomorrow, May 5 at 11 a.m. EDT , /PRNewswire/ -- ONE Gas, Inc. (NYSE: OGS) today announced its first quarter 2026 financial results, affirmed its 2026 financial guidance and declared its quarterly dividend. "Our positive performance through a historically warm winter underscores the resilience of our business model and our ability to drive long‑term value while sustaining customer affordability," said Robert S. McAnnally, chief executive officer. "We are confident in our strategic plan and remain on track to achieve our 2026 financial guidance." FINANCIAL RESULTS & HIGHLIGHTS First quarter 2026 net income was $128.7 million, or $2.04 per diluted share, compared with $119.4 million, or $1.98 per diluted share, in the same period last year;First quarter 2026 adjusted net income was $133.4 million, or $2.11 per diluted share, compared with $120.1 million, or $1.99 per diluted share, in the same period last year;While weather across the Company's service areas was 20.5 percent warmer than normal and 24.6 percent warmer than the prior year, the impact on operating income was tempered by weather normalization mechanisms;In February 2026, the Company entered into an at-the-market equity distribution agreement under which it may issue and sell shares of common stock with an aggregate offering price up to $225 million;For the ninth consecutive year, ONE Gas was awarded the American Gas Association Safety Achievement Award for excellence in employee safety; andThe board of directors declared a quarterly dividend of $0.68 per share ($2.72 annualized), payable on June 2, 2026, to shareholders of record at the close of business on May 18, 2026. FIRST QUARTER 2026 FINANCIAL PERFORMANCE ONE Gas reported operating income of $189.6 million in the first quarter, compared with $180.5 million in the first quarter 2025, which primarily reflects an increase of $27.3 million from new rates. This increase was partially offset by: an increase of $6.8 million in employee-related costs due, in part, to planned investments in the Company's workforce;an increase of $1.3 million in outside services; anda decrease of $8.9 million in revenue due to lower sales and transport volumes, net of the impact of weather normalization mechanisms. Excluding interest related to KGSS-I securitized bonds, net interest expense decreased $3.0 million for the three months ending March 31, 2026. The decrease in interest expense is primarily due to commercial paper borrowings at lower rates and the implementation of Texas House Bill 4384. Income tax expense includes a credit for amortization of the regulatory liability associated with excess deferred income taxes (EDIT) of $9.5 million and $8.1 million for the three months ended March 31, 2026, and 2025, respectively. Capital expenditures and asset removal costs were $169.6 million for the first quarter 2026 compared with $177.7 million in the same period last year, primarily representing expenditures for system integrity and extension of service to new areas. REGULATORY ACTIVITIES UPDATE In April 2026, Kansas House Bill 2435 was signed into law, amending the Gas System Reliability Surcharge (GSRS) statute effective July 1, 2026. The amendment expands the qualifying infrastructure investments eligible for recovery to include all utility plant investments (excluding allocated corporate costs other than cyber-security related investments), increases the maximum monthly residential surcharge to $1.35 from $0.80 and provides added filing flexibility by allowing one GSRS filing per calendar year, rather than once every 365 days. In March 2026, Texas Gas Service made a Gas Reliability Infrastructure Program filing for all customers requesting a $36.9 million revenue increase to be effective in July 2026. In February 2026, Oklahoma Natural Gas filed its annual Performance-Based Rate Change application for the test year ended December 2025. The filing includes a requested $28.7 million base rate revenue increase, $2.6 million energy efficiency incentive and $14.4 million of estimated EDIT to be credited to customers in 2027. A hearing is scheduled for June 11, 2026. Rates may be implemented subject to refund on June 26, 2026. 2026 FINANCIAL GUIDANCE ONE Gas affirmed the financial guidance it issued on Dec. 1, 2025, as supplemented on Feb. 18, 2026. For 2026, net income is expected to be in the range of $294 million to $302 million, or $4.65 to $4.77 per diluted share, while adjusted net income is expected to be in the range of $306 million to $314 million, or $4.83 to $4.95 per diluted share. The Company continues to expect long-term GAAP and adjusted net income growth of 7 to 9 percent and GAAP and adjusted net income per diluted share growth of 5 to 7 percent, consistent with its established five-year financial outlook. Capital investments, including asset removal costs, are expected to be approximately $800 million in 2026. Capital investments for extensions to new customers are expected to be approximately $230 million. EARNINGS CONFERENCE CALL AND WEBCAST The ONE Gas executive management team will host a conference call on Tuesday, May 5, 2026, 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 800-715-9871, passcode 3280987, 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 1-800-770-2030, passcode 3280987. NON-GAAP DISCLOSURE STATEMENT This news release includes financial results and guidance for ONE Gas with respect to adjusted net income and adjusted net income per share, which are non-GAAP financial measures as defined by the Securities and Exchange Commission. Adjusted net income and adjusted net income per share are calculated as GAAP net income plus the deferral of an equity portion of a carrying cost attributable to shareholders' investment capitalized for regulatory purposes but not for financial reporting purposes. These carrying costs relate to property, plant and equipment that has been placed in service, but not yet reflected in base rates. Adjusted net income and adjusted net income per share should not be considered in isolation or as a substitute for GAAP net income or GAAP earnings per share. Management believes these non‑GAAP measures provide useful information because they offer a more complete view of our overall regulatory economics, reflect the period-specific effects of certain regulatory mechanisms designed to mitigate regulatory lag associated with property, plant and equipment placed in service prior to regulatory action, and reflect the impact of regulatory timing differences that arise under the Company's rate-setting framework. These adjustments, net of applicable tax effects, are expected to recur as a result of the Company's regulatory framework and are a consistent part of our earnings profile. A reconciliation of the Company's GAAP net income and GAAP earnings per share to adjusted net income and adjusted net income per share is provided in the Appendix. --------------------------------------------------------------------------------------------------------------------- ONE Gas, Inc. (NYSE: OGS) is a 100% regulated natural gas utility, and trades on the New York Stock Exchange and the NYSE Texas under the symbol "OGS." ONE Gas is included in the S&P MidCap 400 Index and is one of the largest natural gas utilities in the United States. Headquartered in Tulsa, Oklahoma, ONE Gas provides a reliable and affordable energy choice to more than 2.3 million customers in Kansas, Oklahoma and Texas. Its divisions include Kansas Gas Service, the largest natural gas distributor in Kansas; Oklahoma Natural Gas, the largest in Oklahoma; and Texas Gas Service, the third largest in Texas, in terms of customers. For more information and the latest news about ONE Gas, visit onegas.com and follow its social channels: @ONEGas, Facebook, LinkedIn and YouTube. Some of the statements contained and incorporated in this news release are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The forward-looking statements relate to our anticipated financial performance, liquidity, management's plans and objectives for our future operations, our business prospects, the outcome of regulatory and legal proceedings, market conditions and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. The following discussion is intended to identify important factors that could cause future outcomes to differ materially from those set forth in the forward-looking statements. Forward-looking statements include the items identified in the preceding paragraph, the information concerning possible or assumed future results of our operations and other statements contained or incorporated in this news release identified by words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "should," "goal," "forecast," "guidance," "could," "may," "continue," "might," "potential," "scheduled," "likely," and other words and terms of similar meaning. One should not place undue reliance on forward-looking statements, which are applicable only as of the date of this news release. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Those factors may affect our operations, costs, liquidity, markets, products, services and prices. In addition to any assumptions and other factors referred to specifically in connection with the forward-looking statements, factors that could cause our actual results to differ materially from those contemplated in any forward-looking statement include, among others, the following: our ability to recover costs, income taxes and amounts equivalent to the cost of property, plant and equipment, regulatory assets and our allowed rate of return in our regulated rates or other recovery mechanisms;cyber-attacks, which, according to experts, continue to increase in volume and sophistication, or breaches of technology systems that could disrupt our operations or result in the loss or exposure of confidential or sensitive customer, employee, vendor, counterparty, or Company information; further, increased remote working arrangements have required enhancements and modifications to our information technology infrastructure (e.g. Internet, Virtual Private Network, remote collaboration systems, etc.), and any failures of the technologies, including third-party service providers, that facilitate working remotely could limit our ability to conduct ordinary operations or expose us to increased risk or effect of an attack;our ability to manage our operations and maintenance costs;changes in regulation of natural gas distribution services, particularly those in Oklahoma, Kansas and Texas;the economic climate and, particularly, its effect on the natural gas requirements of our residential and commercial customers;the length and severity of a pandemic or other health crisis which could significantly disrupt or prevent us from operating our business in the ordinary course for an extended period;competition from alternative forms of energy, including, but not limited to, electricity, solar power, wind power, geothermal energy and biofuels;adverse weather conditions and variations in weather, including seasonal effects on demand and/or supply, the occurrence of severe storms in the territories in which we operate, 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, storage, 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 upstream transportation, storage, and natural gas purchased for our customers and any related financing required to support our purchase of natural gas supply;impact of potential impairment charges;volatility and changes in markets for natural gas and our ability to secure additional and sufficient liquidity on reasonable commercial terms to cover costs associated with such volatility;possible loss of local distribution company franchises or other adverse effects caused by the actions of municipalities;payment and performance by counterparties and customers as contracted and when due, including our counterparties maintaining ordinary course terms of supply and payments;changes in existing or the addition of new environmental, safety, tax, cybersecurity and other laws or regulations to which we and our subsidiaries are subject, including those that may require significant expenditures, significant increases in operating costs or, in the case of noncompliance, substantial fines or penalties;the effectiveness of our risk-management policies and procedures, and employees violating our risk-management policies;the uncertainty of estimates, including accruals and costs of environmental remediation;advances in technology, including technologies that increase efficiency or that improve electricity's competitive position relative to natural gas;population growth rates and changes in the demographic patterns of the markets we serve in Oklahoma, Kansas and Texas, and economic conditions in these areas;acts of nature and naturally occurring disasters;political unrest and the potential effects of threatened or actual terrorism and war;the sufficiency of insurance coverage to cover losses;the effects of our strategies to reduce tax payments;changes in accounting standards;changes in corporate governance standards;existence of material weaknesses in our internal controls;our ability to comply with all covenants in our indentures and the ONE Gas Credit Agreement, a violation of which, if not cured in a timely manner, could trigger a default of our obligations;our ability to attract and retain talented employees, management and directors, and shortage of skilled-labor;unexpected increases in the costs of providing health care benefits, along with pension and postemployment health care benefits, as well as declines in the discount rates on, declines in the market value of the debt and equity securities of, and increases in funding requirements for, our defined benefit plans; andour 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 March 31, (Unaudited) 2026 2025 (Thousands of dollars, except per share amounts) Total revenues $ 831,711 $ 935,190 Cost of natural gas 393,576 512,462 Operating expenses Operations and maintenance 146,947 135,295 Depreciation and amortization 76,785 81,704 General taxes 24,811 25,230 Total operating expenses 248,543 242,229 Operating income 189,592 180,499 Other income (expense), net (2,097) 518 Interest expense, net (32,358) (35,697) Income before income taxes 155,137 145,320 Income taxes (26,464) (25,901) Net income $ 128,673 $ 119,419 Earnings per share Basic $ 2.05 $ 1.99 Diluted $ 2.04 $ 1.98 Average shares (thousands) Basic 62,913 60,077 Diluted 63,204 60,266 Dividends declared per share of stock $ 0.68 $ 0.67 APPENDIX ONE Gas, Inc. CONSOLIDATED BALANCE SHEETS March 31, December 31, (Unaudited) 2026 2025 Assets (Thousands of dollars) Property, plant and equipment Property, plant and equipment $ 9,852,116 $ 9,734,150 Accumulated depreciation and amortization 2,640,623 2,611,952 Net property, plant and equipment 7,211,493 7,122,198 Current assets Cash and cash equivalents 11,354 10,620 Restricted cash and cash equivalents 11,639 23,107 Total cash, cash equivalents and restricted cash and cash equivalents 22,993 33,727 Accounts receivable, net 405,157 461,631 Materials and supplies 92,987 97,595 Income tax receivable 55,552 55,552 Natural gas in storage 123,920 176,451 Regulatory assets 61,487 49,504 Other current assets 34,544 41,424 Total current assets 796,640 915,884 Goodwill and other assets Regulatory assets 252,048 256,225 Securitized intangible asset, net 226,359 233,786 Goodwill 157,953 157,953 Pension and other postemployment benefits 47,175 47,012 Other assets 133,933 120,026 Total goodwill and other assets 817,468 815,002 Total assets $ 8,825,601 $ 8,853,084 APPENDIX ONE Gas, Inc. CONSOLIDATED BALANCE SHEETS (Continued) March 31, December 31, (Unaudited) 2026 2025 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 62,761,990 shares at March 31, 2026; issued and outstanding 62,692,392 shares at December 31, 2025 $ 628 $ 627 Paid-in capital 2,530,435 2,530,137 Retained earnings 994,838 909,355 Accumulated other comprehensive income (loss) (179) 4 Total equity 3,525,722 3,440,123 Other long-term debt, excluding current maturities, net of issuance costs 2,133,350 2,133,018 Securitized utility tariff bonds, excluding current maturities, net of issuance costs 206,970 223,020 Total long-term debt, excluding current maturities, net of issuance costs 2,340,320 2,356,038 Total equity and long-term debt 5,866,042 5,796,161 Current liabilities Current maturities of other long-term debt, net of issuance costs 249,798 249,674 Current maturities of securitized utility tariff bonds, net of issuance costs 31,404 30,566 Notes payable 759,700 737,400 Accounts payable 137,587 222,102 Accrued taxes other than income 71,272 75,568 Regulatory liabilities 21,638 57,277 Customer deposits 54,901 52,871 Other current liabilities 75,980 106,400 Total current liabilities 1,402,280 1,531,858 Deferred credits and other liabilities Deferred income taxes 999,420 963,874 Regulatory liabilities 441,041 451,620 Other deferred credits 116,818 109,571 Total deferred credits and other liabilities 1,557,279 1,525,065 Commitments and contingencies Total liabilities and equity $ 8,825,601 $ 8,853,084 APPENDIX ONE Gas, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended (Unaudited) 2026 2025 (Thousands of dollars) Operating activities Net income $ 128,673 $ 119,419 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 76,785 81,704 Deferred income taxes 23,293 19,146 Share-based compensation expense 3,837 3,656 Provision for doubtful accounts 2,896 2,331 Changes in assets and liabilities: Accounts receivable 53,578 (40,690) Materials and supplies 4,608 3,681 Natural gas in storage 52,531 92,498 Asset removal costs (13,081) (11,089) Accounts payable (78,600) (72,871) Accrued taxes other than income (4,296) 2,245 Customer deposits 2,030 (1,320) Regulatory assets and liabilities - current (51,927) 73,872 Regulatory assets and liabilities - noncurrent 5,894 9,425 Other assets and liabilities - current (26,105) (11,650) Other assets and liabilities - noncurrent (3,803) 7,102 Cash provided by operating activities 176,313 277,459 Investing activities Capital expenditures (156,533) (166,597) Other investing expenditures (2,697) (2,427) Other investing receipts 5,130 1,179 Cash used in investing activities (154,100) (167,845) Financing activities Borrowings (repayments) of notes payable, net 22,300 (102,700) Repayment of other long-term debt (4) (4) Repayment of securitized utility tariff bonds (15,356) (14,547) Dividends paid (42,678) (40,153) Tax withholdings related to net share settlements of stock compensation (4,050) (2,559) Construction advances 6,841 — Cash provided by financing activities (32,947) (159,963) Change in cash, cash equivalents, restricted cash and restricted cash equivalents (10,734) (50,349) Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 33,727 78,537 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 22,993 $ 28,188 Supplemental cash flow information: Cash paid for interest, net of amounts capitalized $ 32,628 $ 36,268 Cash paid (received) for state income taxes $ — $ — Cash paid (received) for federal income taxes $ — $ — APPENDIX The following table reconciles the Company's GAAP net income and GAAP earnings per share to adjusted net income and adjusted net income per share: ONE Gas, Inc. Three Months Ended March 31, 2026 2025 (Thousands of dollars, except per share amounts) Net income - GAAP $ 128,673 $ 119,419 Other income - deferred carrying cost (a) 4,725 648 Income taxes (a) — — Adjusted net income - non-GAAP $ 133,398 $ 120,067 Earnings per share - GAAP Basic $ 2.05 $ 1.99 Diluted $ 2.04 $ 1.98 Adjusted net income per share - non-GAAP Basic $ 2.12 $ 2.00 Diluted $ 2.11 $ 1.99 Average shares (thousands) Basic 62,913 60,077 Diluted 63,204 60,266 (a) The allowance for earnings on shareholders' investment capitalized for regulatory purposes but not for financial reporting purposes applied to property, plant and equipment placed in service, but not yet reflected in rates as authorized by our regulators or state law. This increases book income but is non-taxable, creating a permanent tax difference. ONE Gas, Inc. 2026 Financial Guidance: Reconciliation of non-GAAP to GAAP: Low Mid High (Thousands of dollars, except per share amounts) Net income - GAAP $ 294,000 $ 298,000 $ 302,000 Other income - deferred carrying cost (a) 11,890 11,919 12,000 Income taxes (a) — — — Adjusted net income - non-GAAP $ 305,890 $ 309,919 $ 314,000 Earnings per share - GAAP Basic $ 4.67 $ 4.73 $ 4.79 Diluted $ 4.65 $ 4.71 $ 4.77 Adjusted net income per share - non-GAAP Basic $ 4.86 $ 4.92 $ 4.98 Diluted $ 4.83 $ 4.89 $ 4.95 Average shares (thousands) Basic 62,995 62,995 62,995 Diluted 63,350 63,350 63,350 (a) The allowance for earnings on shareholders' investment capitalized for regulatory purposes but not for financial reporting purposes applied to property, plant and equipment placed in service, but not yet reflected in rates as authorized by our regulators or state law. This increases book income but is non-taxable, creating a permanent tax difference. APPENDIX ONE Gas, Inc. INFORMATION AT A GLANCE Three Months Ended March 31, (Unaudited) 2026 2025 (Millions of dollars) Natural gas sales $ 769.9 $ 870.4 Transportation revenues 40.1 43.8 Securitization customer charges 11.0 11.6 Other revenues 10.7 9.4 Total revenues $ 831.7 $ 935.2 Cost of natural gas 393.5 512.5 Operating costs 171.8 160.5 Depreciation and amortization 76.8 81.7 Operating income $ 189.6 $ 180.5 Net income $ 128.7 $ 119.4 Capital expenditures and asset removal costs $ 169.6 $ 177.7 Volumes (Bcf) Natural gas sales Residential 44.0 58.9 Commercial and industrial 15.0 19.2 Other 0.9 1.2 Total sales volumes delivered 59.9 79.3 Transportation 59.1 65.3 Total volumes delivered 119.0 144.6 Average number of customers (in thousands) Residential 2,138 2,125 Commercial and industrial 163 165 Other 3 3 Transportation 11 12 Total customers 2,315 2,305 Heating Degree Days Actual degree days 4,159 5,513 Normal degree days 5,232 5,231 Percent colder (warmer) than normal weather (21) % 5 % Statistics by State Oklahoma Average number of customers (in thousands) 939 934 Actual degree days 1,411 1,916 Normal degree days 1,798 1,797 Percent colder (warmer) than normal weather (22) % 7 % Kansas Average number of customers (in thousands) 660 659 Actual degree days 2,070 2,610 Normal degree days 2,486 2,486 Percent colder (warmer) than normal weather (17) % 5 % Texas Average number of customers (in thousands) 716 712 Actual degree days 678 987 Normal degree days 948 948 Percent colder (warmer) than normal weather (28) % 4 % Analyst Contact: Erin Dailey 918-947-7441 Media Contact: Leah Harper 918-947-7123 View original content:https://www.prnewswire.com/news-releases/one-gas-announces-first-quarter-2026-financial-results-affirms-2026-financial-guidance-302761595.html SOURCE ONE Gas, Inc.