Q2 2024 ONE Gas Inc Earnings Call Transcript
Key Points
- ONE Gas Inc (OGS) reported a positive momentum entering the second half of the year with constructive regulatory activity in all jurisdictions.
- The company successfully reduced outside service costs related to line locating by insourcing, leading to a decrease in O&M expenses.
- Revenue from new rates contributed $14.7 million to operating income year over year, with additional growth from residential and commercial customer bases in Oklahoma and Texas.
- ONE Gas Inc (OGS) reaffirmed its 2024 financial guidance, including net income of $214 million to $231 million, and earnings per diluted share of $3.70 to $4.
- The company achieved a AAA ESG rating from MSCI and a prime corporate rating from ISS, highlighting its focus on safety, climate risk management, and sound governance practices.
- Net income for the second quarter decreased to $27 million or $0.48 per diluted share, compared to $33 million or $0.58 per diluted share in the same period of 2023.
- Operations and maintenance expenses increased by 3% year over year, primarily due to expected increases in employee-related costs.
- Interest expenses were approximately $10 million higher than the same period in 2023, reflecting the issuance of $300 million of 5.1% senior notes and the maturity of lower coupon notes.
- Depreciation and amortization expenses were approximately $5 million higher than the prior year, reflecting an increase in net property, plant, and equipment due to higher capital investment.
- The Kansas settlement agreement does not contain a stated ROE, capital structure, or rate base, which may lead to uncertainties in financial projections.
Good day, and welcome to the ONE Gas 2024 second-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.
Good morning, and thank you for joining us on our second-quarter 2024 earnings conference call. This call is being webcast live, and a replay will be available later today. After our prepared remarks, we are happy to take your questions.
A reminder that statements made during this call that might include ONE Gas expectations or predictions should be considered forward-looking statements and are covered by the safe harbor provision of the Private Securities Litigation Reform Act of 1995, the Securities Act of 1933 and the Securities and Exchange Act of 1934, each as amended. Actual results could differ materially from those projected in any forward-looking statements. For a discussion of factors that could cause actual results to differ, please refer to our SEC filings.
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