ONE Gas (OGS) 30 Apr 192019 Q1 Earnings call transcript

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

you conference us call. thank quarter our and earnings XXXX morning for on joining first Good This a made replay is will call being be available webcast later live and today. questions. we'll to prepared be our remarks, take After your happy include A reminder, that covered forward-looking expectations XXXX made Securities during by considered XXXX. our predictions be and provision and ONE of Acts that should the this or statements Gas' call statements might are Safe Harbor of Actual any results could forward-looking those materially in projected differ from statements.

that factors refer of discussion cause filings. actual please a For differ, to could to results SEC our

Executive Lawhorn, the Vice Curtis the turn Joining this in Vice President us on to Officer. call over Vice call Chief and Senior and morning Commercial; Officer; And are Financial now Operations; Caron McAnnally, Senior Norton, President, Senior I'll Chief Sid Caron. President President Pierce Dinan, and

Good today. us last diluted $XX.X share Thanks, $X.XX million for and XXXX Net year. or or income everyone, compared $X.XX Brandon. you was same first period per for diluted the quarter $XX.X million thank joining morning, with share for per

quarter Operating compared Our last for new and the year, growth Kansas, net an volumes in in costs. sales to residential in increase rates and period Kansas, weather reflect employee with legal-related normalization Oklahoma $XXX.X Texas. first million higher of Texas first customer million in the and quarter were same results $XXX.X and costs in primarily due

as a tax we through revenues. maturing deferred senior income Kansas, associated deferred taxes a income had $XXX customers, We also with higher our are regulatory and begun In is experienced the Accordingly, to increased replacing notes rate. we accumulated of returning Oklahoma reflected of interest expense of million liability which reduction expense. notes interest also new from million senior amortizing at $XXX excess

benefits As guidance with XX.X% XX.X% percentage our for including the is quarter first tax is lower XXXX, a consistent tax our points and vested year, compared approximately excess with X effective compensation on share-based than for rate, result, prior XXXX.

on the income. to indicated, the customers guidance XXXX. of the declared Gas ADIT is share, as not ONE previously our dividend the same the net of return excess Directors to is company's quarter. with dividend impact consistent Yesterday for The a of per $X.XX expected As material a have previous Board

we we dividend average have to As of indicated a X% dividend and the payout to between be to net ratio XXXX, XX% annual previously, XXXX of expect targeted increase X% income. with XX%

rate Oklahoma is ended of share. the in also XX% We the components reflecting XX% yet Texas. and ONE base the reflected quarter in guidance approved the $X.XX XXXX that We changes with $X.XX rate base regulatory Kansas Authorized our filings, Kansas XX% are Gas other regulatory be rate in billion billion. base, rate and will base in rate additional per approximately $X.XX Oklahoma, in of Curtis? approximately in cases and not over our it approximately which I'll capacity including Curtis is filings. of needs equity estimated do reflected rate paper for anticipate to project with commercial $XXX Dinan Authorized million interim per system in our now not turn reaffirmed that XXXX. in program investments authorized our regulatory under And our $X.XX and proceedings, any recently in capital market or base, and update. we average earnings plus base, share is activity regulatory rate full to as completed defined defined as for XXXX rate completed

Thanks, Caron, good morning, and everyone.

filing test in customer two January filed a XXXX. annual Gas was Oklahoma. March, proposed Oklahoma includes based Let's third year PBRC that rate Rate on case filing In its Change was Performance-Based the XXXX last begin or credits. This since Natural with general and approved

period. to represents for XXXX. This be is attributable X.X% the credit first all PBRC of including to ROE a tax earnings, $XX.X million above that XX-month proposed savings authorized a to are credit over of The returned amounts customers

credit with associated proposed $XX.X The second excess is million ADIT.

one be filed XXXX. have XXXX We more in PBRC to is rate required filing full before in a case

Moving bill separate $XX.X Service's to Service rate excess Kansas Gas rates of net reform for million implemented XXXX. million on order, through Commission of to settlement of a The Kansas refund amortization new approved ADIT. an Corporation of rate February. Gas will In Kansas. increase required this the its to base second we reflects case and Kansas quarter is the see refund and liability its $XX.X during tax in onetime The a the credit. refund Customers customers the credit KCC

which annual of expenditures, Looking filing. all XX% plan approximately of in the the change an subject GSRS, eligible Gas Kansas, through year, GSRS expanded for apply in new With last will this Gas ONE period covering filing. or capital be was The Surcharge XXXX. XXXX will Reliability System we September definition that for next Kansas in to ahead to June to our this legislation passed spending file August, capital

exception Gas Texas point, relates in we've the for Texas. will all or Texas. Texas of effective million $X.X respectively. increases West service excess the reform tax filings in with of to $X.X to March Finally, areas with In this for and GRIP it million our made Texas issues as and rates Program the new in customers ADIT Infrastructure Gas At in anticipate Reliability We of customers dealt July Service be the relating year. of majority this Central

ADIT with regulators I'll our Texas CEO, be will our it will turn addressed. We excess to be Norton. over to now And how determine working Pierce Pierce?

Caron. and Curtis Thanks,

our XXXX, of to improving is centers safety continuously of ahead look unchanged system. we strategy As and the rest and on reliability our focused the

advantage, to required over the our more in We level five $X.X efficient with Powering excellent of build emerging the this support of We next without mindful we would impacts. work thank and to utilization working more our to reliability labor. for able natural goals our of of dedication spending, provide to I their internal better achieve the provides the continue the metrics find not appliances be for financial are joining hard continue to we're gas plan maintain weeks. now forward To expect To that resources logistics, external value our customer than of improved the every efficiency and Financial in our to includes for seeing to look contribution this American day X.X remain ready and we billion want ways Thank all supply to we and at pricing This to chain safety years. customer service. them Association for questions. this employees. and customers. and morning our technologies bill and million of Operator, invest competitive a serve to execute many you to few and in work. Gas system customers capital you advances in the Forum us we and X,XXX capacity

ahead. of [Operator Aga Please Instructions] We'll go question take Zmigrodzka UBS. from our first

Good morning.

Aga. morning, Good

legislation, how In Safety whole? industry please announced could new The Rondon early proposed the most impact to to senators incident. Leonel related Could ONE Act maybe some address you risks Thanks. a as April Gas pipeline's the legislation comment Pipeline recent distribution and

about you Federal clarification. proposed Aga, I at level? the want that's legislation get the talking Are to

Yes.

question. I'll let that Curtis Okay. answer

in in What legislation. pretty is to where we trying This legislation in might We early Federal level the providing handicap point. say have really needed. state go have Aga. would difficult process, at that input the the monitoring Curtis. reviewed the the is, do that say same so I as folks to this And Sure, levels involved where obviously it's and is at

aware at are point. of it So too continuing be But, again, we're a little we what's specific really it's this bit to monitor difficult to and there.

housekeeping a Thank is question. you. And question more second

the colder XQ weather Could weather benefit normal and discuss despite mechanisms? by reported related $X.X margin please ONE Gas how your higher million having weather sales. from in significantly So increased below was can to normalization you

going let Caron I'm Aga, question. answer that to

Caron. Good morning, Aga. This is

So our are perfect. not weather mechanisms normalization

to put normal each they to algorithms their perfectly offset norm they're just obviously. especially Texas set with -- they're in Texas weather parameters. complicated they to don't several don't own So of again, and just jurisdictions or work exactly. with work But weather designed don't back And, they in us

well. the especially really I shoulder shoulder know pickups is sometime as get March but we month So happen months. a that can in not

for Thank you a lot your color.

Thank you, Aga.

we'll next coming of And Please Sighinolfi take question, go it’s our ahead. you. Jefferies. Chris from Thank

guys. morning, good Hey,

Hi. Chris. morning, Good

quick don't The that's A is would for pertained that a simply this flow Curtis that refund earnings? or it's here or to if and Pierce. Kansas Caron. is know cash second given in be quarter, Hey, item, question the I coming periods, recognized prior in

that answer more accounting to Caron Yes, so of one. let Chris, that's I'm question going an

have Good morning. do Caron. Yes, that liability we It's accrued.

in notice an already accrued disclosed we additional and in of XXXX that You'll XXXX. $X.X was we that accrued million remainder

Okay.

accounted next for of it's acute an So see It's to… a lead item sort quarter? the up in been reflected that not we'd

correct. flow for been and It's cash it's accounted

Yes.

release just benefit Caron programs. I I'm on the performance what quarter strong equity to to had in you imagining guys That's that -- Okay. market suspected. And some last night, employee pension I check. first your other or regard some of was the want mentioned it's just non-qualified then with the income line in

have what baseline for or first And you strength exceeded the that those helpful. the any of might Just curious, guidance you plans? performance quarter in guidance, would sort on probably a there the the make be the been is assumption that in have of I in with color guess

in earnings plans. of kind We don't anticipated bake any those on

be essentially to expect them We neutral.

back but there's a the the that So year on could in we experienced perform. it the how in that later markets quarter possibility pickup give first we depending

Okay. lot Thanks the two time. for were That a those is – clean-ups. my

Chris. Thank you,

further you Q&A Since of Instructions] additional the so questions, back call any [Operator for we have remarks. I'll hand or closing End to no

for interest Great. your Thank again, in Gas. you, all, ONE

the July until earnings of quarter for period great conference day. We'll on close in have extends details we our quiet books provide Our call date July. late and early a rest when at in release starts your the second later we a and

today's you concludes your participation. This all Thank call. for

disconnect. now may You