One Gas, Inc. · NYSE:OGS
One Gas — Q1 2025 Earnings Presentation
42 slides from One Gas's earnings presentation, May 6, 2025
Slide 1: Investor Update
Investor Update June 2025
Slide 2: About Us
71% market share, the largest in Kansas About Us 89% market ONE Gas, Inc. (NYSE: OGS) is a 100-percent regulated share, the largest natural gas utility and is one of the largest natural gas in Oklahoma utilities in the United States. ONE Gas provides natural gas distribution services 13% market shar
Slide 3: Recent Highlights
Recent Highlights Creating Value for a Better Tomorrow Expect upper half of 2025 EPS We estimate $750 Replaced over 450 miles guidance of $4.20-$4.32 & million in 2025 capital of transmission, main 2025-29 EPS growth of 4-6% investments and service lines in 2024 ~24,000 new meter sets Increased stor
Slide 4: Our Strategy
Our Strategy
Slide 5: Serving a Growing Customer Base
Serving a Growing Customer Base Growing demand for natural gas provides long-term growth opportunity • Natural gas is a core energy resource, backed by WSJ Top 25 “Hottest Job energy choice legislation in all jurisdictions Markets” lists 4 cities in ONE Gas service territory1 • Economic growth is dr
Slide 6: Enhancing Capacity & Improving Operational Efficiency
Enhancing Capacity & Improving Operational Efficiency Building a solid foundation for sustainable growth Improved processes and workforce investments increase operating efficiency, capacity and capabilities Investment in workforce development fosters strong performance and retention Managing expense
Slide 7: Financial Outlook
Financial Outlook
Slide 8: 2025 Guidance Summary
2025 Guidance Summary1 Creating long-term value and serving a growing customer base EARNINGS OUTLOOK • Net income for 2025 in a range of $254 - $261 million; expected to achieve the upper half of the range • EPS range of $4.20 - $4.32 per diluted share; expected to achieve the upper half of the rang
Slide 9: Financing Requirements and Activities
Financing Requirements and Activities Maintaining balance sheet strength while investing in growth 2025 dividends and capital investments primarily funded by cash flow from operations of approximately $600-$650 million1 • Expected 2025 short- and long-term financing need of $270-$300 million ~$1.5 b
Slide 10: Five-Year Financial Highlights
Five-Year Financial Highlights Investing in a reliable and growing system CAPITAL INVESTMENTS & RATE BASE AVERAGE ANNUAL GROWTH RATES • Capital investments of ~$4 billion • Based on 2024 EPS of $3.91 ̶ $2.8 billion investment in system integrity and • Long-term net income growth of 7 – 9% replacemen
Slide 11: Long-Term EPS Performance & Outlook
Long-Term EPS Performance & Outlook EPS CAGR 4-6% EPS CAGR 4-6% $5.50 5-Year Forecast (2024-2029*) ~6.0% $5.22 $5.00 10-Year (2014-2024) 6.5% 10-Year (2015-2025G) 6.5% $4.50 15-Year (2014-2029*) 6.3% $4.26 $4.08 $4.14 $4.00 $3.85 $3.91 $3.68 $3.51 $3.50 $3.25 $3.08 $3.00 $2.65 $2.50 $2.24 $2.07 $2.0
Slide 12: Balance Sheet Strength
Balance Sheet Strength Strong credit rating and financing flexibility SENIOR DEBT MATURITIES1 RATING AGENCY RATING OUTLOOK (MILLIONS) Moody’s A3 Stable S&P A- Stable REVOLVING CREDIT FACILITY • $1.35 billion limit • Expires March 2028 ~4.3% weighted average coupon rate2 COMMERCIAL PAPER PROGRAM Excl
Slide 13: Capital Investments
Capital Investments
Slide 14: Well-Defined Capital Investment Plan
Well-Defined Capital Investment Plan Investments ~3x depreciation CAPITAL INVESTMENTS 2025G CAPITAL INVESTMENTS (MILLIONS) BY STATE $762 (MILLIONS) $729 ~$750 $32 $31 $26 $658 $32 $178 $179 $178 Kansas $542 $21 $177 $552 $151 $525 $540 $138 Texas $449 $311 $383 $255 $283 Oklahoma $216 $234 $288 $202
Slide 15: Capital Investments
Capital Investments KANSAS OKLAHOMA TEXAS 2025G: 1.6X DEPRECIATION 2025G: 2.7X DEPRECIATION 2025G: 3.7X DEPRECIATION $306 $288 $311 $286 $287 $257 $256 $242 $215 $185 $188 $159 $169 $151 $139 (MILLIONS) $83 $108 $63 $71 $92 $93 $100 $48 $53 $75 $78 $84 $82 $88 $72 2021 2022 2023 2024 2025G 2021 2022
Slide 16: Rate Base
Rate Base AVERAGE RATE BASE* 2025G AVERAGE RATE BASE* (BILLIONS) BY STATE TOTAL: $5.8 BILLION $5.52 $5.80 $5.15 $4.69 $1.38 billion $4.25 $1.85 billion $2.57 billion 2021 2022 2023 2024 2025G Kansas Oklahoma Texas * See Appendix for definition ~5% growth expected in 2025 CAPITAL INVESTMENTS 16
Slide 17: Regulatory Update
Regulatory Update
Slide 18: Active Regulatory Calendar
Active Regulatory Calendar EQUITY RETURN ON IN PROGRESS JURISDICTION RATES REQUESTED (MILLIONS) FILING DATE RATIO EQUITY Kansas – GSRS $7.2 M Apr-2025 60.21%* 9.5%* Rio Grande Valley - GRIP $3.2 M Apr-2025 59.10% 9.7% Oklahoma – PBRC $41.5 M Feb-2025 58.50% 9.4% APPROVED RATES EFFECTIVE EQUITY RETUR
Slide 19: Oklahoma Natural Gas
Oklahoma Natural Gas PBRC filed February 2025 Performance-based rate change (PBRC) interim filing for annual rate reviews between full rate cases allows recovery of capital investments and operating expenses. 2025 PBRC – ESTIMATED EFFECTIVE DATE JUNE 2025 Incremental Revenue $41.5 million annual rev
Slide 20: Kansas Gas Service
Kansas Gas Service GSRS filed April 2025 Gas System Reliability Surcharge (GSRS) allows for recovery of investments in safety-related projects (includes physical and cyber security) and government-mandated relocations between rate cases 2025 GSRS FILING File GSRS Annually in August, rate case filin
Slide 21: Kansas Gas Service
Kansas Gas Service Approved October; rates effective November 2024 2024 RATE CASE FILING $35 million net increase; $70 million total increase Incremental Revenue ($35 million already recovered through GSRS) Return on Equity N/A File GSRS Annually in August, rate case filing Equity Ratio N/A as neede
Slide 22: Texas Gas Service
Texas Gas Service Central-Gulf GRIP filed February; rates effective May 27 Gas Reliability Infrastructure Program (GRIP) allows for recovery of capital investments made between rate cases CENTRAL-GULF GRIP Incremental Surcharge $15.4 million annual revenue increase Revenue File GRIP Annually in Febr
Slide 23: Texas Gas Service
Texas Gas Service West-North GRIP filed February; rates effective May 27 Gas Reliability Infrastructure Program (GRIP) allows for recovery of capital investments made between rate cases WEST-NORTH GRIP Incremental Surcharge $8.2 million annual revenue increase Revenue File GRIP Annually in February,
Slide 24: Texas Gas Service
Texas Gas Service Rio Grande Valley GRIP filed in April 2025 Gas Reliability Infrastructure Program (GRIP) allows for recovery of capital investments made between rate cases RIO GRANDE VALLEY GRIP – ESTIMATED EFFECTIVE DATE SEP. 2025 Incremental Surcharge $3.2 million annual revenue increase Revenue
Slide 25: Texas Gas Service
Texas Gas Service Approved November; rates effective December 2024 CENTRAL-GULF 2024 RATE CASE FILING Incremental Surcharge $19.3 million annual revenue increase Revenue approved Capital Expenditures $0 million* File GRIP Annually in Pre-Tax Rate of Return 9.09% February, rate case filing as needed;
Slide 26: Customer Affordability
Customer Affordability
Slide 27: 3-to-1 Average Advantage in ONE Gas Territories
3-to-1 Average Advantage in ONE Gas Territories 1 Natural gas price advantage over electricity KWH EQUIVALENT ELECTRICITY VS. NATURAL GAS 14.94¢ 14.22¢ 12.24¢ 2.3x advantage 2.7x advantage 3.2x advantage 6.49¢ 4.50¢ 4.40¢ Texas Oklahoma Kansas ² Avg. retail price of electricity/kWh ³ ONE Gas deliver
Slide 28: Average Annual Residential Customer Bill
Average Annual Residential Customer Bill AVERAGE MONTHLY Cash flow stability RESIDENTIAL CUSTOMER BILL • ~92% of customers are residential $81 • ~70% of revenue less the cost of gas is $73* $71* fixed charges $64* $60 $58 $55 $54 $43 $25 $50 $51 $50 $33 Focus remains on customer $46 $22 $32 $23 affo
Slide 29: Delivering Foundational Energy
Delivering Foundational Energy
Slide 30: Reducing Emissions
Reducing Emissions Operating in an environmentally responsible manner Emissions Reduction Goal By 2035, we expect to achieve a 55% reduction in Scope 1 emissions due to leaks from mains and services, measured from a 2005 baseline and accounting for projected system growth. As of December 31, 2024, w
Slide 31: Emissions Reduction Strategy
Emissions Reduction Strategy Aligned with overall strategy Tightening our system • Pipeline replacement and protection replaces higher emitting pipe with lower-emitting pipe • Advanced leak detection reduces time leaks are active Reducing customer gas usage • Energy efficiency and customer education
Slide 32: ESG Ratings & Company Recognition
ESG Ratings & Company Recognition Robust Disclosures RATING ORGANIZATION 2024 2023 2022 • Full alignment with SASB • Following TCFD recommendations MSCI AAA AA AA • Disclosure of Scope 1 and 2 emissions Sustainalytics 25.8 28.6 30.9 Additional governance documents and reports ISS Corporate Rating C+
Slide 33: Appendix
Appendix
Slide 34: Sustainable Business Model
Sustainable Business Model Focused Business Capital Investment Regulatory Cash Flow Strategy Opportunities Construct Stability ▪ 100% regulated natural ▪ 20+ year vintage ▪ 3 states, multiple ▪ ~ 70% of fixed charges gas distribution utility pipeline replacement jurisdictions for recovery of revenue
Slide 35: Sustainable Business Model
Sustainable Business Model Customer Safe & Reliable Delivering Affordability Energy Foundational Energy ▪ Customer growth ▪ Industry-leading ▪ Committed helps moderate performance in to sustainability per-customer costs employee safety ▪ Energy efficiency and ▪ Leveraging technology ▪ Demonstrated s
Slide 36: Corporate Structure and State Figures
Corporate Structure and State Figures INCORPORATED ENTITY 100% regulated natural gas distribution No levered holding company; all debt issued by ONE Gas, Inc.1 Division capital structures match Corporate capital structure KEY FIGURES 2 Average Number of Customers 651,000 924,000 706,000 Distribution
Slide 37: Authorized Rate Base
Authorized Rate Base As of December 31st, 2024 KANSAS OKLAHOMA TEXAS $2,273 $2,067 $1,854 (MILLIONS) $1,616 $1,726 $1,528 $1,720 $1,330 $1,412 $1,133 $1,197 $1,261 $1,239 $1,336 $1,047 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 APPENDIX 37
Slide 38: Rate Base Definition
Rate Base Definition Authorized Rate Base $5.4 billion (as of March 31, 2025) • Includes capital investments authorized in most recent rate cases and interim filings • Excludes any capital investments since last approved rate cases or filings 2025 Estimated Average Rate Base $5.8 billion • Average o
Slide 39: Comprehensive Regulatory Mechanisms
Comprehensive Regulatory Mechanisms KEY MECHANISMS: KANSAS OKLAHOMA TEXAS Central-Gulf Nov. 2030 West-North Dec. 2028 General Rate Case Filing Deadline 2030 June 2027 Rio Grande Feb. 2030 Valley Interim capital recovery GSRS PBRC GRIP Weather normalization ✓ ✓ ✓ Purchased gas riders (including gas c
Slide 40: Regulatory Construct
Regulatory Construct Governance KANSAS OKLAHOMA TEXAS “Home Rule” with three jurisdictions; Kansas Corporation Commission Oklahoma Corporation Commission Texas Railroad Commission has appellate authority Appointed by the governor to four-year Railroad Commission elected to Elected to six-year stagge
Slide 41: Non-GAAP Reconciliation
Non-GAAP Reconciliation Cash flow from operations before changes in working capital (MILLIONS) 2025 GUIDANCE* Net income $ 257 Depreciation and amortization 298 Deferred taxes 50 Other 23 Cash flow from operations before changes in working capital $ 628 * Amounts shown are estimated midpoints as con
Slide 42: Investor Information
Investor Information Contact information and forward-looking statements Statements contained in this presentation that include or refer to Company expectations, our business outlook, our future plans or predictions relating to ONE Gas, Inc. any matters should be considered forward-looking statements