One Gas, Inc. · NYSE:OGS
One Gas — FY2020 Earnings Presentation
17 slides from One Gas's earnings presentation, Jan 22, 2020
Slide 1: 2020 Financial Guidance
Exhibit 99.3 2020 FINANCIAL GUIDANCE January 21, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained in this presentation that include company expectations or predictions should be considered forward-looking statements that are covered by the safe harbor provisions of the Securities Act of 1933 and the Securities and Exchange Act of 1934. It is import
Slide 3: 2020 Guidance Summary
2020 Guidance Summary Initiated Jan. 21, 2020 DILUTED EPS 2020 $3.51 $3.56 • Net income range of $186 ‒ $198 million $3.25 • EPS range of $3.44 ‒ $3.68 per diluted share $3.08 • Estimated average rate base of $3.91 billion $2.65 • Average rate base growth of 7% between 2019 ‒ 2024 2016 2017 2018 201
Slide 4: Growing Dividends Building Shareholder Value
Growing Dividends Building Shareholder Value DIVIDENDS & PAYOUT RATIO Quarterly dividend: $2.16 $2.00 54 cents per share in 2020* $1.84 • $1.68 • Target dividend payout ratio $1.40 57% 61% of 55 ‒ 65% of net income 57% 55% 53% *Subject to board approval 2016 2017 2018 2019G 2020G Expected average an
Slide 5: Return on Equity
Return on Equity 8.1% 8.3%* 8.4%* Continue to minimize the gap between allowed 7.7% 7.9% and actual returns Authorized ROE by state: • Kansas ‒ Not stated due to black box settlement; KGS estimates ROE embedded in GSRS pre-tax carrying charge is ~ 9.3% • Oklahoma ‒ 9% to 10% band, with a 9.5% midpoi
Slide 6: Cash Flow Sources and Uses
Cash Flow Sources and Uses $591 $591 Dividends and capital expenditures primarily funded by Financing cash flow from operations requirements $174 Capital ) expenditures and $700 million revolving credit facility supports financing asset removal ILLIONS costs needs through the commercial paper progra
Slide 7: Manageable Debt Profile, Strong Liquidity Position
Manageable Debt Profile Strong Liquidity Position – Sept. 30, 2019 DEBT MATURITIES LIQUIDITY PROFILE (MILLIONS) (MILLIONS) $600 $700 $400 $300 4.658% $396 4.500% 3.610% 2024 2044 2048 Credit Facility Short-term Borrowings* * Includes commercial paper and letters of credit 7 | ONE Gas, Inc. FINANCIAL
Slide 8: Capital Expenditures & Rate Base
CAPITAL EXPENDITURES & RATE BASE
Slide 9: Well-Defined Capital Investment Plan
Well-Defined Capital Investment Plan CAPITAL INVESTMENTS* 2020E CAPITAL RECOVERY TIMING (MILLIONS) $485-$525/year $470 $475 10% $442 $418 $178 $190 $158 $151 90% 2017 2018 2019G 2020G 2021-2024 Subject to annual filings Other Depreciation *Totals include capital expenditures and asset removal costs
Slide 10: Capital Expenditures with Asset Removal Costs
Capital Expenditures with Asset Removal Costs OKLAHOMA TEXAS KANSAS 2019: 2.5X DEPRECIATION 2019: 3.6X DEPRECIATION 2019: 1.9X DEPRECIATION $191 * $180 $181 * $173 $166 * $156 * $126 $128 * $149 $123 $123 * $136 $122 $105 $106 $67 ) $64 $78 $52 $69 $74 $47 $50 ILLIONS $67 $64 $40 $43 (M $34 $37 $29
Slide 11: Rate Base Growth
Rate Base Growth ESTIMATED AVERAGE RATE BASE* 2020 ESTIMATED AVERAGE RATE BASE (BILLIONS) TOTAL: $3.91 BILLION* $3.91 $3.62 $3.18 $3.36 $2.96 $1.14 billion $1.65 billion $1.12 billion 2016 2017 2018 2019G 2020G Oklahoma Kansas Texas * For definition of estimated average rate base, see Rate Base Defi
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Slide 13: 2020 Guidance Table (Unaudited)
2020 Guidance Table (Unaudited) 2020 (Millions of dollars, except per share amount) Total revenues* $ 1,567 Cost of natural gas 574 Operating expenses Operations and maintenance 435 Depreciation and amortization 190 General taxes 61 Total operating expenses 686 Operating income 307 Other income (exp
Slide 14: Authorized Rate Base
Authorized Rate Base OKLAHOMA¹ KANSAS² TEXAS¹ $1,475 4 $1,407 3 $1,257 $1,202 4 $1,033 $1,068 4 $947 $986 $979 $925 $895 $826 $822 $781 $745 $639 ) ILLIONS (M 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 ¹ Rate bases presented in this table are those from the last
Slide 15: Rate Base Definition
Rate Base Definition Authorized Rate Base – $3.63 billion (as of December 2019) • Includes capital investments authorized in most recent rate case and interim filings • Does not include any capital investments since last approved rate case or filings 2020G Estimated Average Rate Base – $3.91 billion
Slide 16: Non-GAAP Information
Non-GAAP Information ONE Gas has disclosed in this presentation cash flow from operations before changes in working capital, which is a non-GAAP financial measure. Cash flow from operations before changes in working capital is used as a measure of the company's financial performance. Cash flow from
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation Cash Flow From Operations Before Changes in Working Capital* 2020** (MILLIONS) GUIDANCE Net Income $ 192 Depreciation and amortization 190 Deferred taxes 20 Other 15 Cash flow from operations before changes in working capital $ 417 * Amounts shown are midpoints of ranges prov