ONE Gas (OGS) 5 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to the ONE Gas Third Quarter Earnings Conference Call and Webcast. Today's conference is being recorded. At this time, I would like to turn the conference over to Erin Dailey. Please go ahead, Ms. Dailey.

Elliot. you, Thank and third everyone, for us joining Good XXXX thank earnings our quarter conference on morning, you call. This call be will a and is being available webcast later live, replay today. XXXX made we're Gas the ONE or Private the provisions Act XXXX, covered predictions and forward-looking Reform take prepared by might considered expectations happy of be Securities Securities and as our call that each Litigation Exchange remarks, your After Act and XXXX, of questions. Statements Act statements during should the this include harbor of to Securities the are safe of amended. materially those differ could results statements. forward-looking in Actual from projected any

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

Chris and on Chief this Joining the over Sighinolfi, I'll Dinan, McAnally, Curtis morning Vice call President call the President now Vice to Operating Financial Officer. And Sid Sid. Chief and President Executive turn and Officer; us are Senior Senior Officer; and Chief

earn and Erin, and and improved interest expectations outcomes. morning, you Gas. everyone. to in which in with capital moments. embedded Thank fair Thanks, execution recoup and joining Operational good in a in regulatory interest equity Both again us will higher efforts quarterly the and Central-Gulf raise in our Curtis have Kansas completed than the company-wide the sheet. of EPS XXXX, our the us environment rate activity, year case regulatory our line results to in narrow made at cases in which million for the few and strong to of opportunity be thanks ONE including of our in $XXX this for your to constructive We delivered an year. to speak our rate original still us a Texas, return settlement of We've the financial $X.XX our rate midpoint constructive also expenditures We system $X.XX guidance guidance. We a anticipate all both $X.XX, our capital a on given conclusion preserving case expect for of while settlements and balance resulted now of investments we've structure. allow range rate to significant

it quarter. Now to discuss for Chris? turn over our Chris the performance financial I'll to

good morning, Sid, and everyone. Thanks,

narrowing $X.XX. There As noted, in and factors [Audio are share forecast key are EPS in we expected be range earnings our is raising several earnings of Sid our guidance. the now to $X.XX the at raise. Gap] to guidance play per

cut rates. in effect First it's September paper commercial is on rate the Fed tethered and

year the previously, reduced As rates rate and I've not reduction point did noted in basis Fed's equivalent any September XX we by this cuts quickly rate assume CP amount. an our

yielded about has and while concerns the benefit. election, paper have to our treasury caused in utilization the action, market of longer-term U.S. commercial wake U.S. of deficit rates Fed's the So dynamics rise a

constructive the regulatory efficiently interim from our plan Second, rate we of than through and that conclusions all outcomes timing financial shepherd regulatory this year. the part our for Sid process A we captured uplift goes parties. implementations earlier to ability embedded some in teams major file noted, each our to to cases their X had in the acceptable and for mechanisms, to smoothly credit due being

last the O&M expenses benefiting O&M X-year in average management. increases focus in expectation early our achieve been out able the the prior of expense In noted over to increases calls, Sid years. year-to-date. in a about guidance we've from moderation of the Third, Curtis and higher multiyear just years cost moderation initiatives X% pace O&M period. we're an annual with on our faster we spoken have with some and up on for Through to year, X%

efficiencies and costs. Our territory our has hold contractor flexibility, productivity. dollars, saved our down and service of much enhancing helped generating across in-source program to produced line locating workforce

Finally, bad favorable across bad winter effectively past resume plan. this has and disconnection year have last weather territories we dynamics proven due lower actively expense address gas moratoria lower resulted activities lifted originally debt traditional to When COVID-related in debt than combined our expense year, and accounts. we fully favorable prices efforts, with Those planned.

our results. to year. period million income in Net was diluted per Turning $XX.X third share $X.XX the $XX.X million same or compared with quarter last $X.XX or

primarily million Third new quarter offset from was million quarter. expense net income an first excluding revenue the in in of by in $XX.X the refinancings impact partially we which KGSS-X, included rates due interest to increase experienced $XX.X

related labor-related As primarily third quarter and higher the in to expected, operations maintenance expenses increase as costs. compared last to an year, were

O&M X% about noted guidance, XXXX, I to long-term to but compared plan. with XXXX favorable been our As slightly previously, higher expenses consistent our year-to-date our have

mentioned of been an we shares needs $XX year. need satisfied quarter's senior Those of X.XX%. term share. issue approximately I rate proceeds $XXX -- long-term long its of effective quarter X.X end, company the equity August, Had have for agreements net financing last an of on last $XXX reopener average The met our The its would our to aggregating we additional per million As million. forward approximately April the settlement to stock price settled at we call, this notes notes million agreements of $XXX our reopened an due all have common $XXX approximately senior shares through XXXX for year. million. In at received X.X% XXXX cover million our at issued

Gas sheet the the Directors to balance end our debt current our the from ratings. projected share, $X.XX comfortably with quarter. dividend Board guidelines declared ratio strong. of per noted, unchanged within adjusted to remains prior of our above CFO XX%, the for a year Yesterday, Sid ONE As credit

financial I'll look you. plan year, to continuing we As with updated our to in out we execute to forward close things the guidance. Curtis, line our turn

I'll regulatory Thank our you, morning, good start with update everyone. an Chris, activities. and on

black Corporation box or structure with a does a the ROE, is settlement, of base. settlement rate a the agreement Sid net contain rate stated million. that approved Commission noted, $XX of the meaning As capital formally It our increase Kansas not case

New effect X. went November into rates on

That a go We Central law includes equity settlement rates the also layer. rate judge equity Gulf month, of rate reached $XX.X a commission effect approval, on settlement million cycle Gas rate new final of a commission into to administrative for return a Texas X.X% recommended approval. Service the of we case increase, approval expect Upon settlement. and the XX.X% the Last December. final first of billing pending

commercial to and operating Turning activities.

our capital finish to of $XXX expect within million. We planned XXXX budget

territory we turn closing of our have the our Over for system. And meet remarks. Sid increase the deployment operational several capital needs service over years, capabilities to the increased annual planned growing and steadily of and reliability our I'll it now to past

that all Chris forward to us a In continue our you, look we and We for closing, million strong Curtis. to our to prepare of you serve Thank customers. finish XXXX. the as gas opportunities thank Thank this natural to our the their and joining I morning. for dedication coworkers as each affordable in X.X await customers year and us safely we reliable for deliver

[Operator Instructions].

comes Smith move is with with question Julian on line your to Jefferies. [indiscernible] open. We Julian First from Fremont Ladenburg. Paul

do guess in the Congratulations of my on a December? expect guidance? good to timing we XXXX quarter. your happen first with question has that Should I to

ago so It forward. serves feel And years our worked serves we before well. utility Paul, a our the changed could well well. think few meetings, to like guidance investment speak we we that's December we guidance plan allow us about issued to week cadence our community and us it freely guidance and the

into plan same as we ahead. go cadence that So follow to we the year

think, also, the in far Great. I go-forward O&M, and on you sort made about you've go or talked sort declining, would about that we earlier as O&M then trajectory you've a O&M -- of so basis And then and out on be talked not? time of declining should a you in expectation that an progress still expect higher

Yes, convey we've opportunity what for moderation Paul, was Chris. I the that's we this we a see Again, successful safe and as the anticipated, a on pressure that as -- we've move is front this robust forward. expectation. end, in still to we in experiencing morning I but as trying cadence been not think inflationary the -- is

in that be X would is of base question sort I of with to do every last expect filing Kansas the have years? Is And we maybe cadence. then planned Oklahoma? having to And rate any like there Great. sort should

is we're full file there to required rate case -- under a 'XX. And Curtis. rate a tariff, this of our Oklahoma by Paul, June XX

do each haven't continue future, a except portion the PBR year with on filing year that state. get filings to interim we other we annual into GSRS of rate with spend we large So we captures course the case plans In point. just capital completed we'll that to Kansas, the declared any for until which each remain that in our that and

Securities. Mizuho to We now with turn Christopher Jeffrey

you pattern of accelerating about you're to few years? for quarters just at quarter your of and -- growth customer guys and the Maybe where out, growth line that trend has target you over this longer-term talk is could longer with in have the of kind kind seeing next jurisdictions just expect looking you kind that put followed in the what the and

right a the firming XXXX. activity is a of you're here this in And Chris, bit Curtis. saw we that that latter little of part

rates not think impact in the that homes are on those mortgages. only of still higher mortgage I the that but home and that has have also effects we're lower on seeing already buyers,

have move unless see want bit move. you a to a of of so reluctance And folks necessarily to they to

same the bit. And They're activity a thing. cognizant slowed costs. of that builder side, very the then so And carrying little on

need new hasn't housing so sets and front meter as been there quickly. pickup the is quite seen the positive What a of inventory thus in for And permits. in level the we've

know see that happens we And the depending that just that strengthening market. don't to of a with it's recover. sign we're what I to seen so that we've some think a expect past of that's years. rates, we interest positive to continuing see couple But a acceleration, thawing upon should starting what rapid And in

us and commercial want interest just you stand out trajectory as us then long-term Got And the million kind as far how did you thereabouts? that $XXX kind could much kind add-on, after and remind kind between to remind where you it. of of debt on you could paper of into you balance of expense, term

that is could Chris. This equity Chris. Nice expect. I you. you financing sure, did that settlement hear mention would the that, to -- we from On That the be next Yes, forwards.

least that's cadence, experience. at you several the the look and If been last year, we years around the at do end our of that historical in

you the would at and paper long-term would look retained the the So financing course August in between we forwards -- company the reduce for at settlements reopener earnings the year this did can the year that and of the of settle satisfy would end, that the to that year-end over and commercial needs. balance the satisfy

similar other investments paper recall, rate and authorized base finance we commercial types are base investments. that in to of and use of As gas in yet rate not you storage

going always done to and commercial long-term in level we're So we year prior. years then debt needs, balance. of equity, we similar will match to and And financing paper have have some both how this

one And quick Great. follow-up. just maybe

You had the of mentioned the lifting kind expense. on and the COVID seeing the restrictions bad some debt progress on moratorium of

kind you do go? kind of that see of opportunities that much have more is been -- played of to those Just out? how Or fully

in Chris, this in from And not you functioning look it's at if at really big Curtis a little expected point, the we're a numbers. the activity, our normal of will, and is here. are, some creates just you But again. this bit where really when really the moratorium. changes us up normal we from again, effects any of It comparison to of of it's back year-over-year normalized caught for terms

to [Operator now We Jamieson Instructions]. Ward Jefferies. with turn

the specific higher level your term little Somewhat longer guidance. to question there, bit a looking on last following and but

potentially point point point cut baked As to we're moment, your us of correct sort X% had the but looking X were was think at of we're don't at looking this at guidance included the me case. XX think think, by controversial cut don't this you basis and you And that's had, in I into XXXX. could cuts that I towards pass which at the cuts you have if the looking you've year, that's Thursday, what I XX basis rate maybe whether you September, XXXX on then too another potentially remind please in not after

what's but just expectations. to baked it there to might you're there, as So a new getting lot us Would guidance preparing thoughts relative more hypotheticals of that And headroom just in guidance package? you be bit like like today. hear prior your seems your a in remind

Chris. Sure, Jamieson. hear to is This Good from you.

cuts of So when We assumed assumed the XXXX. had year, guidance we we established last had XXX in no in XXXX. reduction basis had points

last Fed XX got out, pointed from or should month say. reduction you of as basis already, we points in So the I September,

changed expectation We have our not year-end 'XX. through

would that So to go. XX leave

later market this for XX calls points basis week. right, consensus You're

We you terms what us XX% X% COVID. if our terms the Fed really for that look X, neutral X.X%. call prior Federal of of R-star normalization of Reserve's between look commercial plan it in of shaped to where process assumed normalization the getting the was at would What and of have our rate, to is its Federal that. And sort down in rates, put they that's level, which what delta you funds the what at territory. paper speaks down sheet GDP an balance sub a get to line to in not back time the X% to about then Reserve examination to and if was the and policy rate And

like ONE back now team for That would remarks. concludes session. Gas I hand closing to the the to question-and-answer

you forward New of to We many you your ONE in again York week Thank for of look all conferences the December. Gas. second in seeing at interest

the Our call starts when date. close a late details quiet We'll fourth January and we for day. the on at provide conference February. period we earnings later our a in in quarter great release extends Have until books early

Third Gas Webcast. Earnings ONE Call and the concludes Conference Quarter This

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