ONE Gas (OGS) Issues FY25 Guidance

ONE Gas, Inc. (NYSE: OGS) today issued financial guidance for 2025 and updated its five-year growth rates.

"We enter 2025 focused on creating long-term value for our stakeholders, supporting growing customer demand, and enhancing the safety and reliability of our system," said Robert S. McAnnally, president and chief executive officer. "Our strategic plan supports a long runway of growth opportunities and investments in system reinforcements."

2025 FINANCIAL GUIDANCE

ONE Gas (the "Company") expects 2025 net income to be in the range of $254 million to $261 million, with earnings per diluted share of $4.20 to $4.32. The midpoints of 2025 guidance are net income of $257 million and earnings per diluted share of $4.26.

The Company's 2025 earnings guidance includes the benefit of new rates and customer growth, partially offset by higher operating expenses, including employee-related and contractor costs, depreciation expense from capital investments, and interest expense.

Capital investments, including asset removal costs, are expected to be approximately $750 million in 2025, primarily targeted for system integrity and replacement projects. Capital investments for extensions to new customers are expected to be approximately $180 million, largely due to continued growth opportunities in Texas and Oklahoma. The anticipated average rate base for 2025 is $5.8 billion.

The Company has outstanding forward sale agreements covering approximately 3.6 million shares of its common stock at an average price of approximately $77 per share. Had all forward shares been settled at the end of the third quarter, net proceeds would have been approximately $275 million. The Company expects to settle approximately $245 million of its outstanding equity under forward sale agreements at year-end 2024 and roll forward approximately $30 million to settlement in 2025.

FIVE-YEAR FINANCIAL GROWTH RATES

For the five years ending 2029, capital investments, including asset removal costs, are expected to be in the range of $750 million to $850 million per year, or approximately $4.0 billion for the five-year period, including growth capital of approximately $1.0 billion. Capital expenditures support estimated average rate base growth of 7% to 9% per year through 2029.

Annual net income and diluted earnings per share are expected to increase by an average of 7% to 9% and 4% to 6%, respectively, over the long term and the Company expects to be at the high end of these respective ranges through 2029.

Operating costs over the five-year period are expected to increase an average of approximately 4% per year, down from the 5% average annual increase indicated in the 2024 guidance.

The Company estimates total net long-term financing needs for the period 2025 through 2029 of approximately $1.5 billion, of which approximately 40% is expected to be equity.

Consistent with last year's guidance, the Company expects to achieve an average annual dividend growth rate of 1% to 2% through 2029, subject to the 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, Dec. 5, 2024, 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 934495, 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 503269.

Additional information can be found in the 2025 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.

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