Brandon Lohse IR
Curtis Dinan SVP & CFO
Pierce Norton President, CEO & Director
Sarah Akers Wells Fargo Securities
Christopher Sighinolfi Jefferies
Call transcript
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Good day, and welcome to the ONE Gas Second Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Mr. Brandon Lohse. Please go ahead.

Brandon Lohse

you conference us call. thank quarter our and earnings XXXX morning, for on joining second Good This a made replay is will call being be available. webcast live and

questions prepared We completion take happy will your be of remarks. our to upon

differ As Actual considered that expectations include from call statements. this Securities materially might provision and statements of that results are a and should the ONE Acts be of in safe statements harbor reminder, projected predictions during any conference made or could forward-looking Gas 'XX. covered XXXX those by the forward-looking

to factors please For could discussion of that to cause filings. actual SEC results differ, our refer

speaker, this first Gas. Vice of Dinan, Senior ONE President and Curtis? Our is Financial Officer morning, Chief Curtis

Curtis Dinan

Beginning quarter share financial the same with with income year. for Thanks, share, was per $X.XX XXXX Net per our diluted for you Good Brandon. everyone, today. and results. second morning, million million or compared thank diluted the or $XX.X $XX.X $X.XX last us for period joining

first As volumes net results Kansas from in from XXXX sales Higher quarter, and in compared reflect XXXX. XXXX that weather customers. were higher in normalization, and in rates new our transportation colder of primarily Texas the with from approved increases quarter weather volumes second

million higher, medical employee the share and days XX% prior Operating degree per heating last increased quarter, the plan second with year. During than colder XX% than the Net increased basis, were costs were on $X.X compared earnings the with $X.X period $X.XX an normal the margin expenses. colder compared year. period same million or and due last for same accruals incentive to year quarter

was income regulatory to we of $X.X in difference federal and The have resulted tax in the deferral quarter, by orders regulatory based tax revenues our new regulatory $X.X statutory the $X income statutory rate. this reduction or our This million established a million In revenue income and XX% have impact partially that offset reform. of the our reversing between compliance of included been the accounting reduction tax. establishment liability timing created income positive quarter tax second a difference tax impact our this the XX% XXXX, rate expense. we This with in liability for billion net results the on each tax first a $X.XX a partially of rates to calculated in experienced taxes $X.XX negative authority our and reduction quarter. in jurisdictions, Regarding expense the our in a in the

to reverse We expect remaining quarter. third in the most $X.XX the of

tax the of will reform distribution negligible, is to our effect annual earnings continue the impact of it While quarterly timing profile. and

Our it. some seasonality to has earnings profile

Gas quarter, will payout increase reform this lower, So $XXX ratio million. previous $XXX of of to income. ONE a have guidance XXXX in Earlier be is updated indicated XXXX to million and dividend the dividend where this like Board versa. month, quarters impact earnings quarter. the negative the declared This second Directors the are company's per $X.XX of the share, vice as consistent and with seasonal tax same to X% net a with be of income we as XXXX the between to guidance range We of dividend we average annual for to XXXX, X% targeted net expect XX% XX% previously, our dividend

a O&M finalization to to This XXXX. transportation guidance impacts the in is revenues $X updated stronger increase million expense Included Our and $X a relates decrease to colder and the X.X%. the in are first change total guidance an share per of of to diluted nonservice OPEB not expected of our positive $X.XX in reflects pension weather other service with and of be the a million does from expense. that achieved completed the expense. guidance, after was cost we issued $X.XX but and ROE range originally Earnings to half change

base in We also rate million Oklahoma. And June approximately other to expenditures it $XXX our components Gas expansions, million. a increase relates XX, guidance At President primarily in to rate will to Oklahoma, Pierce we $XXX system base XXXX changes our XX% of over updated Norton, to and rate billion, that in This XX% in Chief latest XXXX, capital range billion. including now that our in the system Texas. and proceedings, Executive rate being interim base, turn was and rate that have With XX% since our Kansas, average cases filings, Pierce? of filings, approximately our and in defined $X established project base regulatory ONE additional those rate I'll $X.X our of full occurred base with authorized current in regulatory XXXX as rate our the in officer. investments

Pierce Norton

and on we'll application second of administrative case in a XXXX. July take and we XX, sometime since includes questions then credit Curtis, We the general annual recent change I'd January on good rates, in law an $X.X like to rate Thanks, quarter. that March, our Beginning to give judge morning, our service performance-based the approved was Oklahoma. reform. rate in we the which you filed third had million tax order everyone. In impact base in activity regulatory hearing areas a We and update that. after our of identified expect the before an the

for million XXXX, to Infrastructure the in new rates increase took refund an tax received rate. which to decrease between filings to by July. to Gas of onetime federal the of $X.X or tax the made the January $X.X Texas X, Program offset implemented. million This Area the all due to West the We the date the for rates the in System Reliability reduction for effect in approval for million, under is for period rate changes when in $X.X were GRIP, increase Service Now May customers was taxes. distributed income A

to is tax period the effect the implemented. $X.X XXXX, a Central for rate made rates to of million $X.X rates A for when GRIP increase that into made all approval federal January under date offset New refund the X, Area increase due the reduction the was by in July new were income million changes received decrease in to the of rates also for went the Service million in to for onetime customers This tax. filings. $X.X Texas the May between we

Now request its increase gas and would on the Kansas operating investments $XX.X to on of The has system distribution in Kansas. would reflecting and $XX Kansas the net and approximately On June the with cost invested residential Since Commission of for income KCC, on return the Gas equity requested Corporation customer's common last the necessary bill in XX% system. based by a ratio. rates in rates XX, general Kansas to rate increase filed in the equity million, natural in gas reliability million million. of safety increase the a operating request in improvements changes net a and or a facilities. maintain systems case, Filing increase in $XXX an its result Gas is natural average XX.X% $X.XX Service per This month. Service

on in operating For is our every XX million. point income $X.X basis approximately requested the ROE, the change impact

million. customers. has in on XXX The Gas focus filing sometime The thank the to billion approved XXXX. Kansas and first $XXX our commitment For plus previously are impact million expected requested $X.X to income To the employees in the ratio, approximately for compared Service's $X is our new natural operating last every GSRS in quarter to ready of rate eligible KCC equity close, and to days rate we them like included questions. are attention our with investments. and base our now filing consider rates and X% represents a deliver be to for effective case, their Operator, change I'd reliably our safely of to outstanding turn gas X,XXX


will Fargo. [Operator we take first Instructions]. question Akers from with And Sarah our Wells

Sarah Akers

weather Can like you because XXX% the place. I in and on looks normalization but had expand Oklahoma, cold thought mechanisms, normalization you was Kansas it weather in weather just the

can you walk through that? So just

Pierce Norton

normalization you a now So differently, little goes do for have is states. our Meaning that, XXX% the it the bit act X shoulder But to would've weather all way. When what of weather either as the year. the weather doesn't months, in one between weather norm in perfectly. warm Sarah, extremely we probably swap the cold easiest you in works or have norm way weather explain one in given throughout a extremely territories weather

you that But time you for us works get any -- those in extremely can when an weather. really get So cold year. you have well for little the imperfection it majority bit months, of into a shoulder the

Sarah Akers

Got it.

Okay. the volumes this transportation drivers And can about of you the year? higher then talk

Pierce Norton

amount of transportation arena. colder other part volumes. have in due weather, it transportation weather. the the to Well, is And to weather a you of you just slight is sensitivity When our the do have some volume growth actually

Sarah Akers

did level then Got you end QX growth it. what with? And lastly, customer of

Pierce Norton

think about, overall overall, territories. It's about I three area, somewhere that X.X%, in


Instructions]. And Sighinolfi [Operator hear will from with Jefferies. we next Chris

Christopher Sighinolfi

Just at year. the reclassification pension I tax me, of to last the just actually. some your think two changes. can think I Curtis some me might it for questions you of they're with guidance One was remind for is, that expense both end know with do at there I have -- And

and are about And best so what guidance with remind and update to other, to me the you how can them? between O&M parts those regard in moving just about think

Curtis Dinan

O&M year. that cost. cost the service And we the adopted were might that cost what does X, between those only you O&M separates other think and is goes I all stays the this on Previously, into pension line. January pension so expense. expenses in down of Chris, OPEB to in of service and the January nonservice cost be and nonservice cost it X Beginning standard referring

of issued last our that look and what is final cost and the in service that going and our so forma split numbers between between 'XX when year's guidance XX-K, we provided like didn't year. forward. guidance post-adoption pro in we non-service What earlier for happened actual have XX so in the would 'XX comparable standard, this we it's And

it as bit a expense. of that going And so other this resulted little opposed being O&M to in back so that expense have in we in all update, and into

Christopher Sighinolfi


of have some with the update between do So those to the did items? interplay two guidance

Curtis Dinan

It the the total, geography change did. income just the in No on statement.

Christopher Sighinolfi

obviously That's performance. you leading Okay. the and the the weather mentioned obviously, results, follow-up for norm very And weather throughput helpful. the better and dynamics, is, timing for to profile strong transportation the some super me obviously then

in Just right interpreting or curious to potential am guess am I guys assuming to mean related capital very, one, And two, what flow in that. does questions, the that of a of terms working in I that I way? the statement, year? back half as had capital very draws the the strong a means benefit two benefit. working it's pivot you But cash

Curtis Dinan

in Pierce couple comments a his the a So as -- of moving totals. were of this on going the in of parts Part several that some year. half of taxes collected or talked those in about first it refund

of half. So we'll have gas one though in colder the that we had. back with The continuing more We drivers storage. is much the bigger winter pulled of the that out --

so to this at the injection levels haven't And returned -- we our normal yet point.

process that cost a in we're are the reinjecting out at pulled the we of gas the We than difference now. ground. lower gas But is,

don't So We a still more least. the we ground. to put roughly have but have we in, XX XX gas Bcf full Bcf storage, in that's of put

of So the that past the we we'll extent the working half in last cap the to seen not year some winters. just few have use in

Christopher Sighinolfi


But given how than Is a you in -- to just still have [ph] past it price cold at to point in was the So might understanding? per is that clear back where relative lower to stood more was. M inventory with. cycles it going begin in

Curtis Dinan

right. exactly Yes, correct. That's


call for Lohse, And back questions, over with closing to or further turn remarks. any Mr. I'd the like no additional to

Brandon Lohse

us you this for Thank joining morning.

provide when our late Our the later extends quiet your third in conference starts early on quarter the Have date. October we call rest We'll until we period details great books day. in release a for earnings at of and a close October.


And that does conclude for our call you your participation. for today. Thank

disconnect. now You may