ONE Gas (OGS) Issues 2024 Financial Guidance

ONE Gas, Inc. (NYSE: OGS) today issued financial guidance for 2024.

"As we look to 2024, we remain focused on executing our business strategy, anchored by system reinforcements and a continued expansion of core capabilities to meet growing customer demand," said Robert S. McAnnally, president and chief executive officer. "While rapidly altered macroeconomic conditions momentarily accentuate the lag inherent in our 100% regulated model, our focus remains on long-term value creation as we provide service to a region that is growing and values the integral role natural gas will play well into the future."

2024 FINANCIAL GUIDANCE

ONE Gas (the "Company") expects 2024 net income to be in the range of $214 million to $231 million, with earnings per diluted share of $3.70 to $4.00. The midpoint of 2024 guidance is net income of $223 million and earnings per diluted share of $3.85.

The Company's 2024 earnings guidance includes the benefit of new rates and customer growth, offset by higher operating expenses, including employee-related and contractor costs, depreciation expense from capital investments, and interest expense due to higher interest rates. It also assumes normal weather.

Capital investments, including asset removal costs, are expected to be approximately $750 million in 2024, primarily targeted for system integrity and replacement projects. Capital investments for extensions to new customers are expected to be approximately $170 million, primarily as a result of continued growth opportunities in Texas and Oklahoma. The anticipated average rate base for 2024 is $5.55 billion, calculated consistent with utility ratemaking in each jurisdiction.

FIVE-YEAR FINANCIAL GROWTH RATES

For the five years ending 2028, capital investments, including asset removal costs, are expected to be in the range of $750 million to $950 million per year, or approximately $4.25 billion for the five-year period, including growth capital of approximately $1.10 billion. The increase in capital supports estimated average rate base growth of 7% to 9% per year through 2028.

Net income is expected to increase by an average of 7% to 9% annually through 2028, with diluted earnings per share of 4% to 6%.

Operating costs over the five years are expected to increase on average approximately 5% per year.

The Company estimates total net long-term financing needs for the period 2024 through 2028 of approximately $2.3 billion, of which approximately 45% to 50% is expected to be equity. The Company expects to settle approximately 1.69 million shares and 2.9 million shares of forward equity sales by year-end 2023 and 2024, respectively, with anticipated net proceeds of approximately $130 million and $220 million. The forward equity sales already secured for 2024 settlement are in support of the Company's articulated five-year equity financing needs.

The Company expects to achieve an average annual dividend growth rate of 1% to 2% through 2028, subject to board of directors' approval, with a target dividend payout ratio of 55% to 65% of net income.

CONFERENCE CALL, WEBCAST AND INVESTOR PRESENTATION

The ONE Gas executive management team will conduct a conference call on Thursday, Nov. 30, 2023, at 8 a.m. Eastern Standard Time (7 a.m. Central Standard Time). The call also will be carried live on the ONE Gas website.

To participate in the telephone conference call, dial 833-470-1428, passcode 242602, or log on to www.onegas.com/investors and select Events and Presentations.

If you are unable to participate in the conference call or the webcast, a replay will be available on the ONE Gas website, www.onegas.com, for 30 days. A recording will be available by phone for seven days. The playback call may be accessed at 866-813-9403, passcode 169828.

Additional information can be found in the 2024 Financial Guidance investor presentation on the ONE Gas website at https://www.onegas.com/investors/financials-and-filings/guidance.

Guidance estimates may be impacted by the variables in the forward-looking statements listed below.

ONE Gas, Inc. (NYSE: OGS) is a 100% regulated natural gas utility, and trades on the New York Stock Exchange under the symbol "OGS." ONE Gas is included in the S&P MidCap 400 Index and is one of the largest natural gas utilities in the United States.

Headquartered in Tulsa, Oklahoma, ONE Gas provides a reliable and affordable energy choice to more than 2.3 million customers in Kansas, Oklahoma and Texas. Its divisions include Kansas Gas Service, the largest natural gas distributor in Kansas; Oklahoma Natural Gas, the largest in Oklahoma; and Texas Gas Service, the third largest in Texas, in terms of customers.

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