ONE Gas, Inc. Q4 FY2025 earnings call

• Winter Storm Fern response: Employees performed well, post-Uri investments enhanced reliability with over 80% gas supply shielded from price increases during the storm. - Financial results: 2025 financials in line with revised guidance, 12 consecutive years of meeting or surpassing initial EPS guidance midpoint, introduced non-GAAP adjustments to reflect Texas legislation impact. - Regulatory and legislation: Texas rate case approved $14.4 million revenue increase, 3 Texas jurisdictions consolidated, supported Kansas legislation for more efficient capital recovery, planned filings in multiple states. - Operations and commerce: Completed $760 million capital investment in 2025, including ~$120 million investment for a project in Southeastern Oklahoma, broke ground on a project for an advanced manufacturing plant outside El Paso, added ~23,000 residential customers annually, in-sourcing program reduced excavation damage rate

2025 net income totaled $264 million or $4.37 per diluted share. Adjusted net income for the fourth quarter was $90 million or $1.48 per diluted share; full year adjusted net income was $271 million or $4.48 per diluted share. Capital expenditures totaled $760 million for the year. O&M expense for the full year was up approximately 5% over 2024. Interest expense in the quarter was $2.9 million lower year-over-year. Balance sheet remains strong with S&P and Moody's affirming stable outlooks

2026 expected adjusted net income in the range of $306 million to $314 million and adjusted earnings per share in the range of $4.83 to $4.95. Long-term expected adjusted net income growth of 7% to 9% and adjusted EPS growth of 5% to 7%. Assumed no further rate cuts in 2026

Interest rate fluctuations may affect financial performance. Legislative changes may impact capital recovery. Uncertainties in project execution

Q: Congrats to Curtis. I'm sure he's looking forward to saving all that time on conference calls talking through only one Texas regulatory jurisdiction at this point.

A: Curtis Dinan thanked Gabe Moreen, and Christopher Sighinolfi explained about the final order in Texas rate case and no material effect on capital market for now.

Q: Is there any way that you could frame the potential benefit from that proposed Kansas legislation you mentioned, whether earned ROE or net income?

A: Curtis Dinan said the Kansas legislation is in early stages, proposed bill cleared House, expands qualifying capital, cap increases from $0.80 to $1.35 per month but still early.

Q: Does the guidance and the adjusted EPS level, does that assume the latest Texas rate case outcome essentially that you just got in terms of what cost of capital is being embedded in there?

A: Christopher Sighinolfi said guidance embedded best estimate and is close to Texas rate case outcome.

Q: How are treasuries and the current kind of treasury curve lining up against your guidance expectations at this point?

A: Christopher Sighinolfi said market performance favorable to refinancing embedded but term loan matures in September so cautious