Brandon Lohse Director of IR
Caron Lawhorn Senior Vice President and Chief Financial Officer
Curtis Dinan Senior Vice President and Chief Operating Officer
Sid McAnnally President and Chief Executive Officer
Vedula Murti Hudson Bay Capital
Call transcript
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00:03 Good day, and welcome to the ONE Gas Third Quarter Earnings Conference Call. Today's conference is being recorded. 00:10 At this time, I'd like to turn the conference over to Mr. Brandon Lohse. Please go ahead.

Brandon Lohse

thank twenty joining one and third on morning, twenty quarter earnings Good you us for our XX:XX conference call. being later is be call webcast a and This replay made available today. live will be After our to your questions. happy prepared take we'll remarks, Act Litigation call ninety safe statements expectations nineteen ONE and the harbor of should considered provisions this predictions five, are and Securities might forward-looking include of as A reminder nineteen statements and during Reform covered amended. three, that nineteen the that Act be made Exchange Securities Act thirty Gas' of or each by four, thirty Private the Securities of Actual results forward-looking any could in differ from projected those statements. materially

could Sid Lawhorn, Senior For Chief Chief on Joining call Officer; Operating to Officer. actual Caron us results turn refer McAnnally, Caron. Executive over And Dinan, call Officer; and I'll filings. and President a and factors Vice differ, morning the this President, Curtis XX:XX discussion Senior now the that and to are cause Financial Chief to of Vice please our XX:XX SEC President,

Caron Lawhorn

Yesterday, and Brandon. three nine is announced be morning, nine the million to now in is everyone. to expected earnings zero eight the point two Net million dollars to dollars. twenty range hundred point to we financial Thanks, XX:XX per our two expected that we income and dollars of range in four zero twenty be one Good hundred updated and dollars diluted share of three guidance.

third in net dollars of dollars and million compared XX:XX diluted eight actual forty three the dollars three one year. one million per same for include dollars twenty share in Our capital three five per nine twenty. or period income expenditures point point zero zero share the with for for Our or removal twenty diluted asset point point remains costs guidance twenty results dollars million the quarter

new dollars year, over dollars XX:XX expense in of seven net for in related quarter the due the to higher by year. million point cost were expense million last primarily year and six sales date quarter period point the which quarter is one currently It but rates year services, compared that one debt increases last million were dollars two an primarily growth. has point compared ten increase our one employee appeared up million back driven residential expense. four was expense the costs point million results reflect dollars moderate, ticked and same outside third eight of customer Operating beginning in and third second to to from margin dollars quarter debt net eight our period to bad to Our bad third last from million in same point dollars eight

due execute our to continue We past managing procedures including well for connecting payment accounts, customers with on assistance.

dollars borrowings thirty. In than asset currently fact, dollars year. is capital the full including base our authorized quarter regulatory estimated and commercial under yet approximately will additional cases and base, for which the other rate nine average achieve September, interim year. quarter and rate thirty base twenty we ended be reflected rate project of is in We to and Texas. rate XX:XX completed and with that thirty proceedings system reflected remain of dollars our regulatory million rate which percent on is and four based in track plans Kansas of filings billion rate investments and credit as rate assistance quarter base, Authorized changes were in approximately capital or one point twenty eighty payments this components twenty received our at Our that approved outstanding million percent not forty eleven XX:XX over are with energy over six the our one expenditures three for costs and time XX:XX filings facility. dollars our twenty dollars in billion higher last four in plus four more our three percent customers removal no for we percent point Oklahoma, six We paper in million have eight

estimate. in of If dollars in the final market Actual up of of million the year. we Storm the have recall, and equity point four related five billion to two we’ve March hundred sales These billion point balance up point issued two being in million put you September line we dollars. stock deferred common twenty notes one costs in to two and redeemed Winter became ended to cost to we for notes in the our floating rate with notes closer to date, dollars under one financing Uri. dollars at twenty rate fixed sold twenty we cover year of program Year order dollars place callable the fifty additional planned no XX:XX million and cost the floating four two

at taxes result, previous operations. to costs dollars a storm, ONE XX:XX forward, dollars. regulatory, the from of tax we current per carry for be will of reduce future also point which twenty five in an generate twenty Board for income which twenty the operating a the As dividend over Our expect winter for update and it X:XX unchanged I'll million in loss incurred taxable Yesterday, purposes is Gas eight twenty two to declared one, of Directors estimate significant commercial to the turn quarter. for share, years. deductible on due will cash Curtis a Now, latest twenty one net the zero

Curtis Dinan

effect issue utilities. good with issued, point based stipulation responsive utility surcharge from an year. a Gas the of The biogas also recover rate to meeting into OCC settlement waive file scheduled August, Commission for across of and project across seeks in increase morning. is an requesting two area securitization. states. order we stipulation through three the the all XX:XX its and the A nine parties eight construction. increase open issued order twenty I fifteen heard natural the twenty proposed see costs sixteen the twenty for will Development a occurred to point trend In three of proposed being continues twenty, November, KCC connected in one in process general from sixty point Turning fuel XX:XX our our territories administrative five we includes months the executed of before allowed in point during to Staff to OCC active equity to in filed, agreement. would January of everyone. a on Oklahoma approximately financing Uri dollars approved. a to for process source all date. October, six financing the commission incurred dollars other next support an a in December seven RRC the full are Kansas Oklahoma six an recommendation. issue order In to Continuing until for consider November support mechanism mode the Oklahoma development order rate four before Caron, and or rate excuse fifty nine securitization I'll approximately from into October, we utilities our hundred continuation recommending is are division discussions Commission to XX:XX been rates two, a percent RNG the performance landfill nine a of has the bonds. has base joint The of several the later three November order an from Strom recommendation Thank case sometime application A be and ten and to additional Corporation would or which be five ROE Storm Oklahoma the and hearing administrative decision, to development renewable reliability OCC to The as judge that their a thousand all issue the a judge the twenty the financing The a XX:XX financing be Gas with the and thousand be up proposed effect November issued considered me, XX:XX that thousand issuing then included first interconnection. approximately required waste until proposal bonds. for for update case, Natural five that and stipulation the for an two for of treatment twenty unanimous and actual -- are filed be order twenty issue prudent, agreement proposed RNG. seven of securitized addition ratio over agreement schedule, twenty Texas cost activity costs four recommended schedule to at of up the recovered MMBTU file Gas seven and statement to order. continue Texas hearing four settlement the we later The economic opt-in capital this on of approval four a securitization in XX:XX On company two. separate law Gas one landfill dollars October the found gas. until on in financing In year service the customers. treatment purchase up twenty quarter to Kansas, of design system our start serving reasonable thousand be in on Approximately million activities, rates a securitized no report for begin to a December portion and In twenty recover Oklahoma a administrative OCC in would projects, rates process a and strong the are the change hearings to was Uri. two additional has twenty matters. five In Service expenditures. picking The the XX:XX ninety costs the mid-December. new for includes their year percent. RNG approval order expected in rider an approximately be project years seventh positive public agreements by Winter and Oklahoma areas. Natural active update for gas joint and earlier, be West the biogas two A twenty Natural select of support financing settlement. for go Moving dairies, quarter the made in further all an and the the of to the recoverable. to judge and is dollars January. point momentum to progress Once testimony Corporation projects approximately wastewater is annually morning, increase our brief XX:XX three If per the another The expected allowing by of going for tariff finalized is their and exhibits hundred for approved filed stipulation finance has million participating filed six rate equivalent that procedural would development authority up before would submitted this dollars twenty strong recommending joint of commercial for joint also including including twenty an their homes. you, June letter million Texas Winter Together, of is Kansas in And twenty tomorrow required The law to new of agreement XX:XX We order eight million customers days Under of projects, allowance million XX:XX produce than twenty ALJs testimony and has seven. a of mentioned twenty be food dollars five wastewater facility. for natural filed for hundred XX:XX service to an who gas case and new opening XX:XX the those plants, customers also of nine law regulatory tenth. hundred Gas million was demand to

we into made our Uri, heading As a this response Winter to Storm enhancements winter to several winter. capabilities preparedness

capacity season. of and the First, delivery additional added heating which the upstream further on added storage XX:XX points we system need additional during market increase to source will capacity, to reduces the reliability. supply open gas we've amount at interconnect Second, transportation from purchase we different providers to

additional our for event periods trailer Third, from maintain updated improve And XX:XX lastly, over demand. to Storm models closing helps capacity turn CNG mobile now, supply we've XX:XX to added we've provide incorporate the to data system constraints. Uri, for preparedness forecasting of to which that Sid in and peak our extreme I'll of Winter And it pressures remarks. support planning our

Sid McAnnally

I'll XX:XX Curtis. and thanking Good by start Caron morning.

coupled just company. seen that As across the you've securitization. and lead teams the to performance on solid day good heard, from issues in to with performance Winter we've Uri work that related our great is they And day Storm operations

of the expanding may transparency included and seen, ONE to reported we thanks have latest released improving to you both and So report As XX:XX the our team. October, you our ESG data. the data in Gas

the a foundation we report. of were few of from value our Safety and Here do. the everything is that core highlights just first

Our focus metrics. all led substantial on our to employee safety of employee has in improvements safety

safety You the the fewest to fourth awarded recognizing related Gas achievement work in improvements for the number detailed our safety of in having was to due employee American excellence year. by award for lost the Gas XX:XX Association, October, injury Gas can find consecutive the days again for ONE those ONE data In report.

the women performing Customer with resilient product, workforce supported about ninety future. service elements in growth we see and environments our why identify a achieving satisfaction you lines, support that expect we a workforce territories one but XX:XX twenty five. Gas and our and environmental new proud quartile to our survey, of is can legislative to excited same we've percent success, percent of our strategy, organic and goals six scores the play we The technologies will and seven the ratio commitment requires as we of the territory company is forty of those that And for EEOC from future and by of employees, and XX:XX percent high twenty demanding inclusion simple, methane well-deserved the and is fourteen. dynamic safety the emissions. more scope a allow since employee ethnic employee top natural that our high relationship since reduced distribution service and role year show the new regulatory and were a safety for twenty joined replacement Like by underrepresented optimism team Using performing that’s averages. will protection the rest serve. to companies a past project and system. on CoX percent recognition in we emissions of Joining group, remains by are customer EPA reduced latest as our We've XX:XX Our one believe ONE to the focusing on our Employee to engagement energy communities U.S. are percent twenty founding adopt values. that proven and five exceeded every thirty cleaner mains from system XX:XX gas improvement. utility our diversity score twenty pipeline each our with achieve programs equivalent a than We on Turning satisfaction Currently, a or emerging that one Engagement that we're use three the that a our we optimistic Survey. members this Gallup don't twenty process, above the we continued an core us twenty about of in serve. continue the challenge for pursue member, reduction basis safety, day

In my on winter personal history, focus high two of and recruit one the storms ONE about we're align closing, questions. employees continue with for their employees fellow a grateful level and now resource our to customers thousand us. participating their our in of remains employee dedication to thanks joining impact to of hundred commitment our same serving grow you is one we new employees for of size, and engagement of Operator, to work for to an never wavered, in every values and that our third both life morning. with to day. ERG. stakeholders. at continue us core Together, service excited XX:XX our The seven to six of and in the performed new this Gas our commitment leaders for ahead employees in groups help years culture. of develop recognize company our Thank groups ready worst very who that that a pandemic to like their Through I'd anchor all business we're Our these and XX:XX three extend the the


[Operator go from now XX:XX Thank our from [indiscernible] Guggenheim. question Please first Instructions] you. ahead. We will take


your ensure is to XX:XX allow equipment. line function Please go is your ahead, Please reach open. Karl, you mute signal turned our to off

Unidentified Analyst

you me Are guys to XX:XX now? able hear

Sid McAnnally

XX:XX We hear you, Thank you. can Shar.

Unidentified Analyst

important filed with you there. Congrats for that priority James that you've that to in month. level to in the is XX:XX narrowing nice XX:XX The you obviously that us Shar. those of obviously, your on hoping there. you, the you've that would got about I've It’s provide on for Headset very We community. investment last detail question it It raising in from your technology. report were past. clear done on to be continuation a the It's see case. ESG the actually interactions made ESG And Apologies is there. that disclosures a very

Twenty carbon dates terms dioxide you out methane reduction. twenty go reduction, five of days. be to Looking that the furthest seems at your target in target for

fifty twenty forty, thirty, investors that twenty seem over towards more questions we get thirty, be pointing be and same timeframe. fifty to to even seem from two twenty the two the peers two your inbound While forty,

how on that to set might willing thinking here evolve we for forward? and see targets the about you're to curious you timeframe that how Just are going

Sid McAnnally

bet. XX:XX You

history you that things the of on guidance to did ESG shared of ESG clear that comment our you as In the founded XX:XX to be around to the timelines, you with started report. We fact to time thinking we XX:XX any ESG make reducing we've that? and that bit as demonstrating to pathway know. report. term pathways since as thank set First, a is though the our a many of goals is like have clarity it's just was as see the out Caron we've to and other that visibility able in shows want fourteen. and pathway going to that the our project, the commitment achieve of on of -- align forward And about reductions execute important been has commitment be with company terms system. good the a be on and we fact before renewed carbon investors and to the we emissions report that on will in think the able Don't So targets. the aligned down we've that and thought a the for that around and a many be terms are put clear industry twenty brand more doing the that that very commitment, peers when what information and Caron, others Where commitment, exactly we've able company what got we we the looks of with share with extend lack intensity community in XX:XX company to runway. we focused we with path do open of working path long say and and out. the we expect think set we goals around are we activities we to have a stay specific handed that we'll to we get continue to of We comment in more what demonstrate and which goals always continue to the been true our to clearly have that. the into

Caron Lawhorn

great that's towards. we doing that think was are things, that And practices, commitment think importantly, the we're really importantly, can protection, So our believe operational our especially advanced and our emissions our leak do exciting survey of our we're potential right working XX:XX Curtis full a program, project as I projects, to replacement RNG looking we advancements and just of mentioned, And profile. RNG improvement summary understanding technology, what you pipeline development. forward the or all a when what in about to

Sid McAnnally

that are that of to very gas trajectory. company morning but spread of sure commitments validated So budgets -- the of programs sort we to and one twenty we making look pipeline of not with replacement us by opportunities systems focused has methane in we on lot those tightening very continue that and the are there at that the greatest keep evenly, that the the [indiscernible] we to feel XX:XX around this pipe focused this headlines been opportunity on methane condition system, things that. and tighten Since fourteen, present necessarily across on pipe territory the a

to it affirming something the many see your very on Jamieson? focused company XX:XX was across to globe Does our to about fourteen. has issue, that been twenty since that So get talking people us

Unidentified Analyst

think timeline alluded color really that as provide to extent that there. And you the XX:XX Yes, appreciate going I I doing. that's additional as further you you terrific. forward

already be your in point who investors at a idea open company give to now that X ESG another well. you'll you from as a you ESG able investors think inbounds where have have that to as to group at of get, timeframe, in -- certain group an a get to extend to will continue we of point that think needs a have I then the I investable. to the questions they that already look investing you'll be find to a from up a by you and certain you robust new be disclosures time. target are point evolve And of to an standpoint mandate And

answering around guys. for And question. thank all work you the good So

Sid McAnnally

clear continue comments. on you, that Jamieson. appreciate right you. targets Thank balance to pathways We on execute find those we'll and Yes. forward the to XX:XX between targets. how And Thank


Hudson XX:XX [Operator Vedula question Bay Instructions] from Please ahead. from Capital. go We’ll now Murti take out next

Vedula Murti

Good morning. XX:XX

Sid McAnnally

XX:XX Vedula. Good morning,

Vedula Murti

effective XX:XX terms I few Difficulty] help you well of securities will [Technical as two [Technical far positive the be Difficulty] beyond. revenues -- you primary you wondering, just revenue it's in be for totality coming us, deal here of headroom Difficulty] [Technical Capex twenty to period that of next [Technical that with [indiscernible] years such because twenty so Can Difficulty]. [indiscernible] managing with from most Can over managing [Technical Difficulty] [indiscernible] and will very to was of will with potential terms increases in based needs that that process. costs new

Sid McAnnally

question. XX:XX path agree the all Yes. And that it's Thank pleased believe because for Vedula. that we you. has We're securitization we for the gone, with very Sure, good of the I the way stakeholders with you with. deal

can the the regulatory ask way works do and from out work. up will it speak to impact talk of the to little CapEx a that about your context then me I'll this bit planning. Curtis Caron? Let just on our both impact, forward the way around and question. the the Caron mechanics standpoint to pick securitization the And round a

Caron Lawhorn

XX:XX Sure.

Texas, West out our and have if release, for So for carve except for Texas. news you in and Texas, West Oklahoma we saw a

will those and just and to we'll and Texas bill revenues we'll completely the a bonds. order. service which is as Oklahoma, customers charge issued that XX:XX bonds add state In new of utilities So, they agency, participating one process will the most is sheet, for be know, go those positive in carve you financing twist, Texas, to are off total going going securitization all and those Texas, balance to pay be West by in a serve covers are – Texas -- West out the off to securitization there from development

of three million carved the rider of part it surcharge to be with over be as period for also that a cost special sixty dollars West out we've year or So going about is will gas. recovered Texas

so have is, costs our a to issue XX:XX third continue that, in those stay for on rig we Texas. And finance will bond securitized West Kansas, will speak sheet. method, So we'll asset the that a then in balance to

through the rating collect a that on metrics debt on our will in including absence while that We in and continue Kansas will balance debt of securitized sheet, agencies that all pay the to that instance we that our surcharge, the expect sheet. will securitized bonds the balance those of look at debt, off,

Curtis Dinan

XX:XX it And works you customer's to its as might bills, the it customers. as the I might me latest process that'll different states then what projections impact the -- amounts the the through then give but me has on way aren't impact anticipated be, by let regulatory from just and final, that these let impact the you on the those that think perspective in help put have

zero bonds. ten two monthly to is customer a point, around thirty period about Texas, period cost So, year and dollars to in to a were year thirty years that dollars ten right the it's those it now recovery there the If at month. from years of three per are ranges five as recovery point

is might have low there. the income customers, XX:XX our give a that'll impact recovery the surcharge perspective there that to for Oklahoma, In no customers. those and So periods you of related

and impact monthly no no billing. So

it sort For volumes the it our of per a recovery three ten for at eight is volume then of there's to would between smaller about about our is the larger use gas, five would five in Then that and month. included Oklahoma. years, customers, testimony and would expectation in periods At impact which estimated month our of about years. our larger dollars and be be month were eleven per customers, customers larger would that six per -- dollars XX:XX dollars dollars five be Kansas, it are income that be that per in ten impact different low years, seven be month about and

have want we tagged recovery addressed extra So, a these each the bills, commissions that but cost to have certainly on of customers don't to the we that's think of costs. manageable way very

customers. the is was CapEx. that question, also XX:XX mind three impact in second protecting it's mind to but the our your I our with territories, your of so, And service advantage that believe to three So, electricity thought reducing part Keep one. five that the on around has and competitive about in utilities, it in point

opposed clothes, the So dry one electricity. going costs amount cost you're than gas use meaning, your home hot heat to water, delivered to third less the all if as in it your or to

some And some those so, I of we'll storms. just service the territories impacts facing same from companies customer's covered bill while to electric are our in see that the those impacts

advantage don't competitive eroding. see we that So

have CapEx don't plans guidance. year spending we've given change profile to in we as so, five And our our previously

the on cost sustainable growing also about over has reducing customer case. not by spread And costs best customers dilute recognizing to gas just we our to natural sleepless or since to we in data in greater actually sponsored In case as the eliminating helps two that's to more there customer there rate was remain testimony our were and rate So, talked to and continue that testimony base. only of to the company, I'll late our you on any costs levels (ph) down night [O&M] those customer declined read factors, you that, XX:XX that also think give but up impact last the case, lot by a focused of a the point our interveners a we base but due often was grow about. way number. one Oklahoma per

And to own by lessen was that case, the some testimony, nice cost our but by sponsored in only rate not again, interveners. testimony so of the that recognized be it and

impact proceed about gives perspective So, thinking the today, you some I on but how not we hope that how we're forward. only

Vedula Murti

-- CapEx expenses of the I maybe trying the terms That's it's entire would this and that's with guess two, other bill be and a deal system, to customer I'm a dollars carrying millions can In kind or a least simplistic thought with will going those dollars of recovery year, other you regulators year I -- of of translate you twenty and otherwise math very or terms to kind avoid replacement go where make of engagement types simple. been about available these the ultimately no initiatives. if potentially be actual and really and regulatory was your my percentages that for I able parties screen. one part RNG it million manage for being of two whether that's up customers. somehow to that acknowledge to across XX:XX have billion of period what separate hundred terms pipeline the from with at when costs, Over incremental in dollars would is, or perceptions? of that picks and of that kind is in -- everything And

Sid McAnnally

Sure. XX:XX

million the So, Caron three million five point the are of me dollars aspect securitized as talk be one state. of and covered, first. let through dollars by about finance that two of million the Oklahoma or company issued hundred point --total total two the recovered that dollars just And in of bonds billion one dollars point one that will

those the securitized So will the company the pick directly up in issue that company's finances and bonds. portion will Kansas, then piece

financing our areas. that. it's And in timeframe we're West over sixty to for is so have The service we'll million only a the piece dollars related cash Texas three year only and

So, once a really As spending we that equal company's relates at it determine will our And think part. we each capital point. it's balance very we the us, to an I XX:XX how those behind programs sheet balance. have year, issuances clearly it's restore

reinvest it execute look that we XX:XX is, what's safe we to We to really system anything are on resources need the Our to terms on the that also on we primary to and we're in do what That's and at. agnostic the spend per needed there? focus That's are impact integrity do that first And at system needed the maintenance of the reliable. in the that it look keep se what system plan. all to that has else. thing

the non-financial So the secondly, resources, financial balance sheet, and then our resources.

example hundred future our to not customers. more giving And growth costs we customers that keeping the drives keep growth costs and we us we integrity continue to growth that one key that we And in and those And spend. our has that over and system but impact as to the that say time. customers XX:XX been equipment balance system were our only existing to as balance the those contractors have we've per things that based expect finally, gives factor keep year, capital, then the over we two our invest component bill. customers, that's low that upon and customer you then well. And in able expands of workforce, a that what internal in the million service dollars million the in of all capital the is So two and to spread upon spend in. the that point customer needs Again, base over territory

that And the number the impact broad to average states, dollars five it you just about on ranges those. think month about of that's for recover but so each I the of has. to kind a gave we talk per

Vedula Murti

Okay. you that. very Thank appreciate XX:XX much. I

Sid McAnnally

your XX:XX question, Thank Vedula. you for


questions. Mr. XX:XX will closing [Operator Lohse back turn any or Instructions] conference no the like further for It additional appears I’d to to there are remarks.

Brandon Lohse

your Thank Gas. XX:XX you for ONE interest again in all

period January books early we when on until close details and provide day. quiet release at February. Our earnings the starts for Have call great date. the extends We'll our we later conference fourth quarter in a in


XX:XX This concludes your you call. for participation. today's Thank

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