ONE Gas, Inc announced its fourth quarter and full year 2023
financial results, which included diluted earnings per share of $1.27 and $4.14, respectively. They showed gains in fourth quarter net income as well as for the entire year, mostly because of the rate increases approved by state regulators.
“We had another successful year at ONE Gas. The team’s execution enabled us to deliver results in line with our guidance
despite rapidly changing macroeconomic conditions,” said Robert S. McAnnally, president and chief executive officer.
“As we celebrate ten years as ONE Gas, we remain dedicated to the safe and reliable delivery of natural gas, focused on supporting our growing service territory and committed to long-term value creation.”
• Fourth quarter 2023 net income was $70.7 million, or $1.27 per diluted share, compared with $67.0 million, or $1.23 per
diluted share, in the fourth quarter 2022;
• Full year 2023 net income was $231.2 million, or $4.14 per diluted share, compared with $221.7 million, or $4.08 per diluted
share, last year;
• On Dec. 28, 2023, the Company settled under forward contracts 1,032,403 shares of its common stock for net proceeds of $79.0 million;
• In December 2023, the Company issued $300 million of 5.10 percent senior notes due April 2029; and
• On Jan. 23, 2024, ONE Gas increased the dividend for the first quarter 2024 by 1 cent to $0.66 per share ($2.64 annualized),
payable on March 8, 2024, to shareholders of record at the close of business on Feb. 23, 2024.
ONE Gas had operating income of $107.1 million in the fourth quarter compared to $103.6 million a year earlier, largely because of an increase of $15.6 million from new rates and an increase of $1.9 million in residential sales due to net customer growth.
These increases were partially offset by:
• a decrease of $1.9 million due to lower sales volumes, net of the impact of weather normalization mechanisms;
• an increase of $8.1 million in employee-related costs; and
• an increase of $5.4 million in depreciation expense due to additional capital expenditures being placed in service.
Weather was 12.5 percent warmer than normal for the three months ended Dec. 31, 2023. The impact on operating income
was mitigated by weather normalization mechanisms.
Net income for the three months ended Dec. 31, 2023, includes an increase in interest expense of $1.5 million, excluding the
$2.2 million interest expense increase related to the securitized bonds in Kansas, compared with the same period 2022.
Income tax expense includes a credit for amortization of the regulatory liability associated with excess deferred income taxes
(EDIT) of $6.9 million and $5.5 million for the three months ended Dec. 31, 2023, and 2022, respectively.
Capital expenditures and asset removal costs were $189.6 million for the fourth quarter 2023 compared with $209.6 million
in the same period last year, primarily representing expenditures for system integrity and extension of service to new areas.
For the full year, ONE Gas recorded operating income of $377.6 million, better than the $350 million in 2022. Again, it was due to an increase of $61.6 millon from new rates, a gain of $6.3 million in residential sales and an increase of $4.9 million in ad valorem recoveries.
For the twelve-month 2023 period, other income, net increased $13.7 million compared with 2022, due primarily to a $12.0 million higher return on investments associated with the nonqualified employee benefit plans.
Capital expenditures and asset removal costs were $728.7 million for the twelve-month 2023 period compared with $656.5
million for 2022. The increase was due primarily to expenditures for system integrity and extension of service to new areas.