0001587732false00015877322024-08-052024-08-05

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)August 5, 2024
(Date of earliest event reported)August 5, 2024

ONE Gas, Inc.
(Exact name of registrant as specified in its charter)
Oklahoma001-3610846-3561936
(State or other jurisdiction(Commission(IRS Employer
of incorporation)File Number)Identification No.)

15 East Fifth Street; Tulsa, OK
(Address of principal executive offices)

74103
(Zip code)

(918) 947-7000
(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:

☐ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common Stock, par value $0.01 per shareOGSNew York Stock Exchange

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).

☐ Emerging growth company

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. ☐


The information disclosed in Items 2.02 and 7.01, including Exhibit 99.1 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 2.02Results of Operations and Financial Condition
On August 5, 2024, we announced our results of operations for the quarter ended June 30, 2024. The news release is furnished as Exhibit 99.1 and incorporated by reference herein.
Item 7.01Regulation FD Disclosure
On August 5, 2024, we announced our results of operations for the quarter ended June 30, 2024 and reaffirmed our 2024 financial guidance. The news release is furnished as Exhibit 99.1 and is incorporated by reference herein.
Item 9.01Financial Statements and Exhibits
(d)Exhibits
Exhibit
Number		Description
99.1
104Cover 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:August 5, 2024By:/s/ Christopher P. Sighinolfi
Christopher P. Sighinolfi
Senior Vice President and
Chief Financial Officer

3

Exhibit 99.1

logoletterheadb27.jpg

August 5, 2024Analyst Contact:Erin Dailey
918-947-7411
Media Contact:Leah Harper
918-947-7123
ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance

TULSA, Okla. - Aug. 5, 2024 - ONE Gas, Inc. (NYSE: OGS) today announced its second quarter financial results and reaffirmed its 2024 financial guidance.

“The first half of 2024 was in line with our expectations, with active rate cases and interim filings progressing well in all jurisdictions,” said Robert S. McAnnally, president and chief executive officer. “We head into the second half of the year with positive momentum and remain focused on executing our strategic plan and safely serving our customers.”

SECOND QUARTER 2024 FINANCIAL RESULTS & HIGHLIGHTS
    
•Second quarter 2024 net income was $27.3 million or $0.48 per diluted share, compared with $32.7 million, or $0.58 per diluted share, in the second quarter 2023;
•Year-to-date 2024 net income was $126.6 million, or $2.23 per diluted share, compared with $135.3 million, or per $2.42 diluted share, in the same period last year;
•On Aug. 2, 2024, a unanimous settlement agreement was signed by all parties to the Kansas Gas Service rate case and filed with the Kansas Corporation Commission (KCC), subject to approval; and
•A quarterly dividend of $0.66 per share ($2.64 annualized) was declared on July 15, 2024, payable on Aug. 30, 2024, to shareholders of record at the close of business on Aug. 14, 2024.    

SECOND QUARTER 2024 FINANCIAL PERFORMANCE

ONE Gas reported operating income of $69.4 million in the second quarter 2024, compared with $64.0 million in the second quarter 2023, which primarily reflects:

•an increase of $14.7 million in revenue from new rates; and
•an increase of $1.6 million in residential sales due primarily to net customer growth in Oklahoma and Texas.
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ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
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These increases were partially offset by:

•an increase of $5.0 million in depreciation and amortization expense from additional capital investment;
•an increase of $1.8 million in employee-related costs due primarily to planned investments in the Company's workforce and ongoing in-sourcing efforts;
•an increase of $1.8 million in outside services, mitigated in part by in-sourcing efforts; and
•a decrease of $1.3 million due to lower sales volumes, net of the impact of weather normalization mechanisms.

Excluding interest related to KGSS-I securitized bonds, net interest expense increased $10.0 million for the three months ending June 30, 2024, due primarily to the issuance of $300 million of 5.10 percent senior notes in December 2023 and the repayment of $300 million of 3.61 percent senior notes and $473 million of 1.10 percent senior notes in February and March 2024, respectively, with commercial paper.

Income tax expense includes a credit for amortization of the regulatory liability associated with excess deferred income taxes (EDIT) of $1.8 million and $3.1 million for the three months ended June 30, 2024, and 2023, respectively.

Capital expenditures and asset removal costs were $194.6 million for the second quarter 2024 compared with $190.2 million in the same period last year, primarily representing expenditures for system integrity and extension of service to new areas.

YEAR-TO-DATE 2024 FINANCIAL PERFORMANCE

Operating income for the six-month 2024 period was $215.3 million, compared with $213.3 million in 2023, which primarily reflects:

•an increase of $25.9 million from new rates; and
•an increase of $3.0 million in residential sales due primarily to net customer growth in Oklahoma and Texas.

These increases were offset partially by:

•an increase of $10.3 million of employee-related costs due primarily to planned investments in the Company's workforce and ongoing in-sourcing efforts;
•an increase of $10.3 million in depreciation and amortization expense from additional capital investment; and
•a decrease of $4.9 million due to lower sales volumes, net of the impact of weather normalization mechanisms.

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ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
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Weather across the service territories for the six-month 2024 period was 13 percent warmer than normal and 6 percent warmer than the same period last year. The impact on operating income was mitigated by weather normalization mechanisms.
Excluding interest related to KGSS-I securitized bonds, net interest expense increased $11.7 million for the six months ended June 30, 2024. Interest expense was primarily impacted by the conversion of the two debt maturities in the first quarter 2024 to commercial paper with a higher weighted average interest rate and the issuance of $300 million of 5.10 percent senior notes in December 2023.

Income tax expense includes a credit for amortization of the regulatory liability associated with EDIT of $11.9 million and $13.0 million for the six months ended June 30, 2024, and 2023, respectively.

Capital expenditures and asset removal costs were $374.0 million for the six-month 2024 period compared with $354.8 million in the same period last year. The increase was due primarily to expenditures for system integrity and extension of service to new areas.

REGULATORY ACTIVITIES UPDATE

In February 2024, Oklahoma Natural Gas filed its annual Performance-Based Rate Change application for the test year ended December 2023. The filing included a requested $31.8 million base rate revenue increase. On May 31, 2024, a settlement was filed with a proposed revenue increase of $31.4 million. On July 15, 2024, the administrative law judge issued a report to the Oklahoma Corporation Commission (OCC) recommending approval of the settlement agreement. New rates went into effect on June 28, 2024, subject to refund until the OCC issues an order. An order is expected in the third quarter of 2024.

In March 2024, Kansas Gas Service submitted an application to the KCC requesting an increase to its base rates reflecting investments in its natural gas distribution system, implementation of a performance-based ratemaking mechanism and residential rate design options that align with customer usage. On Aug. 2, 2024, a unanimous settlement agreement was signed by all parties to the rate case and filed with the KCC. A hearing on the unanimous settlement agreement is scheduled for the week of Aug. 12, 2024.

If the unanimous settlement agreement is approved by the KCC as filed, Kansas Gas Service's net base rates would increase $35 million. Kansas Gas Service was already recovering $35 million from customers through Gas System Reliability Surcharge (GSRS) filings; therefore, this settlement represents a total base rate increase of $70 million. The unanimous settlement agreement stipulates a GSRS pre-tax carrying charge of 8.97 percent for subsequent GSRS filings. According to the Order Setting Procedural Schedule, the KCC will issue an order by Oct. 25, 2024.

In March 2024, Texas Gas Service made a Gas Reliability Infrastructure Program (GRIP) filing for all customers in the West-North service area, requesting a $8.6 million increase to be effective in July 2024. In June 2024, two municipalities denied the requested increase, which Texas
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ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
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Gas Service appealed to the Railroad Commission of Texas (RRC). All other municipalities, and the RRC, approved an increase of $8.5 million or allowed it to take effect with no action. Texas Gas Service implemented the new rates in July 2024, subject to adjustment depending upon the outcome of the appeal.

In February 2024, Texas Gas Service made a GRIP filing for all customers in the Central-Gulf service area, requesting a $12.3 million increase. In May 2024, the RRC and the municipalities approved an increase of $12.2 million, and new rates became effective in June 2024.

In June 2024, Texas Gas Service filed a rate case for all customers in the Central-Gulf service area, requesting a $25.8 million increase. Texas Gas Service has invested approximately $355 million in its Central-Gulf service area natural gas distribution system since its last Central-Gulf service area rate case was finalized in August 2020. A portion of this investment, approximately $342 million, is currently recovered through GRIP. The current filing is based on a 10.25 percent return on equity and a 59.6 percent common equity ratio. New rates are expected to take effect in late 2024.

In May, Texas Gas Service made a GRIP filing for all customers in the Rio Grande Valley service area, requesting a $3.7 million increase to be effective in August 2024.

2024 FINANCIAL GUIDANCE

ONE Gas reaffirmed the financial guidance it issued on Nov. 29, 2023, with 2024 net income expected to be in the range of $214 million to $231 million, or $3.70 to $4.00 per diluted share. Capital expenditures, including asset removal costs, are expected to be approximately $750 million in 2024.

EARNINGS CONFERENCE CALL AND WEBCAST

The ONE Gas executive management team will host a conference call on Tuesday, Aug. 6, 2024, at 11 a.m. Eastern Daylight Time (10 a.m. Central Daylight Time). The call also will be carried live on the ONE Gas website.

To participate in the telephone conference call, dial 833-470-1428, passcode 221538, 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 629830.
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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 Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 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, 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 or Company information; further, increased remote working arrangements have required enhancements and modifications to our information technology infrastructure (e.g. Internet, Virtual Private Network, remote collaboration systems, etc.), and any failures of the technologies, including third-party service providers, that facilitate working remotely could limit our ability to conduct ordinary operations or expose us to increased risk or effect of an attack;
•our ability to manage our operations and maintenance costs;
•the concentration of our operations in Oklahoma, Kansas and Texas;
•changes in regulation of natural gas distribution services, particularly those in Oklahoma, Kansas and Texas;
•the economic climate and, particularly, its effect on the natural gas requirements of our residential and commercial customers;
•the length and severity of a pandemic or other health crisis which could significantly disrupt or prevent us from operating our business in the ordinary course for an extended period;
•competition from alternative forms of energy, including, but not limited to, electricity, solar power, wind power, geothermal energy and biofuels;
•adverse weather conditions and variations in weather, including seasonal effects on demand and/or supply, the occurrence of severe storms in the territories in which we operate, and climate change, and the related effects on supply, demand, and costs;
•indebtedness could make us more vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds and/or place us at competitive disadvantage compared with competitors;
•our ability to secure reliable, competitively priced and flexible natural gas transportation and supply, including decisions by natural gas producers to reduce production or shut-in producing natural gas wells and expiration of existing supply and transportation and storage arrangements that are not replaced with contracts with similar terms and pricing;
•our ability to complete necessary or desirable expansion or infrastructure development projects, which may delay or prevent us from serving our customers or expanding our business;
•operational and mechanical hazards or interruptions;
•adverse labor relations;
•the effectiveness of our strategies to reduce earnings lag, revenue protection strategies and risk mitigation strategies, which may be affected by risks beyond our control such as commodity price volatility, counterparty performance or creditworthiness and interest rate risk;
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ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
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•the capital-intensive nature of our business, and the availability of and access to, in general, funds to meet our debt obligations prior to or when they become due and to fund our operations and capital expenditures, either through (i) cash on hand, (ii) operating cash flow, or (iii) access to the capital markets and other sources of liquidity;
•our ability to obtain capital on commercially reasonable terms, or on terms acceptable to us, or at all;
•limitations on our operating flexibility, earnings and cash flows due to restrictions in our financing arrangements;
•cross-default provisions in our borrowing arrangements, which may lead to our inability to satisfy all of our outstanding obligations in the event of a default on our part;
•changes in the financial markets during the periods covered by the forward-looking statements, particularly those affecting the availability of capital and our ability to refinance existing debt and fund investments and acquisitions to execute our business strategy;
•actions of rating agencies, including the ratings of debt, general corporate ratings and changes in the rating agencies’ ratings criteria;
•changes in inflation and interest rates;
•our ability to recover the costs of natural gas purchased for our customers and any related financing required to support our purchase of natural gas supply;
•impact of potential impairment charges;
•volatility and changes in markets for natural gas and our ability to secure additional and sufficient liquidity on reasonable commercial terms to cover costs associated with such volatility;
•possible loss of local distribution company franchises or other adverse effects caused by the actions of municipalities;
•payment and performance by counterparties and customers as contracted and when due, including our counterparties maintaining ordinary course terms of supply and payments;
•changes in existing or the addition of new environmental, safety, tax and other laws to which we and our subsidiaries are subject, including those that may require significant expenditures, significant increases in operating costs or, in the case of noncompliance, substantial fines or penalties;
•the effectiveness of our risk-management policies and procedures, and employees violating our risk-management policies;
•the uncertainty of estimates, including accruals and costs of environmental remediation;
•advances in technology, including technologies that increase efficiency or that improve electricity’s competitive position relative to natural gas;
•population growth rates and changes in the demographic patterns of the markets we serve, and economic conditions in these areas’ housing markets;
•acts of nature and naturally occurring disasters;
•political unrest and the potential effects of threatened or actual terrorism and war;
•the sufficiency of insurance coverage to cover losses;
•the effects of our strategies to reduce tax payments;
•changes in accounting standards;
•changes in corporate governance standards;
•existence of material weaknesses in our internal controls;
•our ability to comply with all covenants in our indentures and the ONE Gas Credit Agreement, a violation of which, if not cured in a timely manner, could trigger a default of our obligations;
•our ability to attract and retain talented employees, management and directors, and shortage of skilled-labor;
•unexpected increases in the costs of providing health care benefits, along with pension and postemployment health care benefits, as well as declines in the discount rates on, declines in the market value of the debt and equity securities of, and increases in funding requirements for, our defined benefit plans; and
•our ability to successfully complete merger, acquisition or divestiture plans, regulatory or other limitations imposed as a result of a merger, acquisition or divestiture, and the success of the business following a merger, acquisition or divestiture.

These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other factors could also have material adverse effects on our future results. These and other risks are described in greater detail in Part 1, Item 1A, Risk Factors, in our Annual Report. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Other than as required under securities laws, we undertake no obligation to update publicly any forward-looking statement whether as a result of new information, subsequent events or change in circumstances, expectations or otherwise.
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ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
Page 7
APPENDIX

ONE Gas, Inc.
CONSOLIDATED STATEMENTS OF INCOME
Three Months EndedSix Months Ended
 June 30,June 30,
(Unaudited)2024202320242023
(Thousands of dollars, except per share amounts)
Total revenues$354,137 $398,114 $1,112,457 $1,430,257 
Cost of natural gas71,958 130,241 454,961 796,040 
Operating expenses
Operations and maintenance121,732 118,614 254,515 245,298 
Depreciation and amortization72,549 67,547 149,121 138,811 
General taxes18,473 17,690 38,575 36,856 
Total operating expenses212,754 203,851 442,211 420,965 
Operating income69,425 64,022 215,285 213,252 
Other income, net832 2,174 4,340 4,755 
Interest expense, net(36,970)(27,485)(68,327)(57,600)
Income before income taxes33,287 38,711 151,298 160,407 
Income taxes(6,044)(6,022)(24,738)(25,097)
Net income
$27,243 $32,689 $126,560 $135,310 
Earnings per share
Basic$0.48 $0.59 $2.23 $2.43 
Diluted$0.48 $0.58 $2.23 $2.42 
Average shares (thousands)
Basic56,750 55,566 56,740 55,552 
Diluted56,827 55,914 56,813 55,857 
Dividends declared per share of stock$0.66 $0.65 $1.32 $1.30 

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ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
Page 8
APPENDIX

ONE Gas, Inc.
CONSOLIDATED BALANCE SHEETS
 June 30,December 31,
(Unaudited)20242023
Assets
(Thousands of dollars)
Property, plant and equipment  
Property, plant and equipment$8,764,153 $8,468,967 
Accumulated depreciation and amortization2,390,978 2,333,755 
Net property, plant and equipment6,373,175 6,135,212 
Current assets  
Cash and cash equivalents10,744 18,835 
Restricted cash and cash equivalents21,722 20,552 
Total cash, cash equivalents and restricted cash and cash equivalents32,466 39,387 
Accounts receivable, net193,261 347,864 
Materials and supplies86,502 77,649 
Natural gas in storage138,290 187,097 
Regulatory assets114,153 75,308 
Other current assets35,553 37,899 
Total current assets600,225 765,204 
Goodwill and other assets  
Regulatory assets276,009 287,906 
Securitized intangible asset, net278,939 293,619 
Goodwill157,953 157,953 
Other assets138,770 131,100 
Total goodwill and other assets851,671 870,578 
Total assets$7,825,071 $7,770,994 





















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ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
Page 9
APPENDIX

ONE Gas, Inc.
CONSOLIDATED BALANCE SHEETS
(Continued)
 June 30,December 31,
(Unaudited)20242023
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 56,650,838 shares at June 30, 2024; issued and outstanding 56,545,924 shares at December 31, 2023
$567 $565 
Paid-in capital2,038,514 2,028,755 
Retained earnings788,976 737,739 
Accumulated other comprehensive loss(1,184)(1,182)
Total equity2,826,873 2,765,877 
Other long-term debt, excluding current maturities, net of issuance costs1,878,689 1,877,895 
Securitized utility tariff bonds, excluding current maturities, net of issuance costs268,233 282,506 
Total long-term debt, excluding current maturities, net of issuance costs2,146,922 2,160,401 
Total equity and long-term debt4,973,795 4,926,278 
Current liabilities  
Current maturities of other long-term debt13 772,984 
Current maturities of securitized utility tariff bonds28,183 27,430 
Notes payable1,031,500 88,500 
Accounts payable164,963 278,056 
Accrued taxes other than income56,018 68,793 
Regulatory liabilities39,750 66,901 
Customer deposits60,243 62,187 
Other current liabilities76,303 112,370 
Total current liabilities1,456,973 1,477,221 
Deferred credits and other liabilities  
Deferred income taxes789,628 752,068 
Regulatory liabilities485,172 500,478 
Employee benefit obligations20,178 20,265 
Other deferred credits99,325 94,684 
Total deferred credits and other liabilities1,394,303 1,367,495 
Commitments and contingencies
Total liabilities and equity$7,825,071 $7,770,994 
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ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
Page 10
APPENDIX

ONE Gas, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
(Unaudited)20242023
 
(Thousands of dollars)
Operating activities  
Net income$126,560 $135,310 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization149,121 138,811 
Deferred income taxes22,255 11,912 
Share-based compensation expense6,728 6,305 
Provision for doubtful accounts1,775 4,880 
Proceeds from government securitization of winter weather event costs— 197,366 
Changes in assets and liabilities:
Accounts receivable152,828 314,545 
Materials and supplies(8,853)(1,721)
Natural gas in storage48,807 124,463 
Asset removal costs(31,660)(32,551)
Accounts payable(101,495)(198,968)
Accrued taxes other than income(12,775)(23,952)
Customer deposits(1,944)(3,219)
Regulatory assets and liabilities - current(75,496)35,633 
Regulatory assets and liabilities - noncurrent8,826 26,217 
Other assets and liabilities - current(35,126)12,156 
Other assets and liabilities - noncurrent1,375 1,555 
Cash provided by operating activities
250,926 748,742 
Investing activities  
Capital expenditures(342,370)(322,231)
Other investing expenditures(2,381)(1,647)
Other investing receipts2,975 2,462 
Cash used in investing activities
(341,776)(321,416)
Financing activities  
Borrowings (repayments) of notes payable, net943,000 (334,900)
Issuance of common stock3,368 3,175 
Repayment of other long-term debt(773,000)— 
Repayment of securitized utility tariff bonds(13,780)— 
Dividends paid(74,672)(72,006)
Tax withholdings related to net share settlements of stock compensation(987)(2,384)
Cash provided by (used in) financing activities
83,929 (406,115)
Change in cash, cash equivalents, restricted cash and restricted cash equivalents(6,921)21,211 
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period39,387 18,127 
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period$32,466 $39,338 
Supplemental cash flow information:
Cash paid for interest, net of amounts capitalized
$70,201 $47,773 
Cash paid (received) for income taxes, net
$(1,232)$9,174 
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ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
Page 11
APPENDIX

ONE Gas, Inc.
KGSS-I SECURITIZATION

In November 2022, Kansas Gas Service Securitization I, L.L.C. (KGSS-I) issued $336 million of securitized utility tariff bonds. KGSS-I used the proceeds from the issuance to purchase the Securitized Utility Tariff Property from Kansas Gas Service, pay for debt issuance costs, and reimburse Kansas Gas Service for upfront securitization costs paid on behalf of KGSS-I.

Revenues for the three months ended June 30, 2024, include $11.5 million associated with KGSS-I, which is offset by $7.4 million in operating and amortization expense and $4.2 million in net interest expense. Revenues decreased $0.3 million compared to the same period last year, which was offset by the net change of a $0.1 million increase in operating and amortization expense and a $0.3 million decrease in net interest expense.

Revenues for the six months ended June 30, 2024, include $23.2 million associated with KGSS-I, which is offset by $14.9 million in operating and amortization expense and $8.3 in net interest expense. Compared to the same six month period last year, revenues decreased $0.5 million, which was offset by the net change of a $0.4 million increase in amortization and operating expense and a $1.0 million decrease in net interest expense.

The following table summarizes the impact of KGSS-I on the consolidated balance sheets, for the periods indicated:

June 30,December 31,
20242023
(Thousands of dollars)
Restricted cash and cash equivalents$21,722 $20,552 
Accounts receivable4,668 5,133 
Securitized intangible asset, net278,939 293,619 
Total assets$305,329 $319,304 
Current maturities of securitized utility tariff bonds28,183 27,430 
Accounts payable253 393 
Accrued interest6,892 7,207 
Securitized utility tariff bonds, excluding current maturities, net of discounts and issuance costs $5.1 million and $5.3 million, as of June 30, 2024 and December 31, 2023, respectively
268,233 282,506 
Equity1,768 1,768 
Total liabilities and equity$305,329 $319,304 









-more-
ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
Page 12
The following table summarizes the impact of KGSS-I on the consolidated statements of income, for the periods indicated:

Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
(Thousands of dollars)
Operating revenues$11,555 $11,807 $23,226 $23,740 
Operating expense(110)(109)(221)(219)
Amortization expense(7,295)(7,180)(14,680)(14,269)
Interest income152 226 340 301 
Interest expense(4,266)(4,744)(8,593)(9,553)
Income before income taxes$36 $— $72 $— 


-more-
ONE Gas Announces Second Quarter 2024 Financial Results;
Reaffirms 2024 Financial Guidance
August 5, 2024
Page 13
APPENDIX


ONE Gas, Inc.
INFORMATION AT A GLANCE
Three Months EndedSix Months Ended
June 30, June 30,
(Unaudited)
2024202320242023
 (Millions of dollars)
Natural gas sales $306.8$348.3$1,000.9$1,320.0
Transportation revenues$30.3$29.1$70.7$68.0
Securitization customer charges$11.5$11.8$23.2$23.7
Other revenues$5.6$8.9$17.7$18.6
Total revenues$354.2$398.1$1,112.5$1,430.3
Cost of natural gas$72.0$130.2$455.0$796.0
Operating costs $140.3$136.4$293.1$282.2
Depreciation and amortization$72.5$67.5$149.1$138.8
Operating income $69.4$64.0$215.3$213.3
Net income$27.3$32.7$126.6$135.3
Capital expenditures and asset removal costs$194.6$190.2$374.0$354.8
Volumes (Bcf)
Natural gas sales
Residential10.612.862.967.4
Commercial and industrial5.15.722.223.9
Other0.20.41.31.5
Total sales volumes delivered15.918.986.492.8
Transportation52.352.8115.7117.8
Total volumes delivered68.271.7202.1210.6
Average number of customers (in thousands)
Residential2,1062,0902,1082,095
Commercial and industrial163163164164
Other3333
Transportation12121212
Total customers2,2842,2682,2872,274
Heating Degree Days
Actual degree days3785935,1195,465
Normal degree days6696675,8885,904
Percent colder (warmer) than normal weather(43.5)%(11.1)%(13.1)%(7.4)%
Statistics by State
Oklahoma
Average number of customers (in thousands)
926919927922
Actual degree days
1172341,7981,953
Normal degree days
2302282,0302,020
Percent colder (warmer) than normal weather
(49.1)%2.6 %(11.4)%(3.3)%
Kansas
Average number of customers (in thousands)
652649654652
Actual degree days
2213162,4222,567
Normal degree days
3943942,8542,854
Percent colder (warmer) than normal weather
(43.9)%(19.8)%(15.1)%(10.1)%
Texas
Average number of customers (in thousands)
706700706700
Actual degree days
4043899945
Normal degree days
45451,0041,030
Percent colder (warmer) than normal weather
(11.1)%(4.4)%(10.5)%(8.3)%
###
v3.24.2.u1
DEI 8-K Notes
Aug. 05, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Aug. 05, 2024
Entity Registrant Name ONE Gas, Inc.
Entity Central Index Key 0001587732
Title of 12(b) Security Common Stock, par value $0.01 per share
Entity Incorporation, State or Country Code OK
Entity File Number 001-36108
Entity Tax Identification Number 46-3561936
Entity Address, Postal Zip Code 74103
City Area Code (918)
Local Phone Number 947-7000
Trading Symbol OGS
Security Exchange Name NYSE
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Address, Address Line One 15 East Fifth Street
Entity Address, City or Town Tulsa
Entity Address, State or Province OK
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