ONE Gas Issues 2020 Financial Guidance; Narrows 2019 Guidanc
TULSA, Okla., Jan. 21, 2020 /PRNewswire/ -- ONE Gas, Inc. (NYSE: OGS) today announced that its 2020 net income is expected to be in the range of $186 million to $198 million, or $3.44 to $3.68 per diluted share. The midpoint of 2020 net income guidance for ONE Gas (the Company) is $192 million, or $3.56 per diluted share.
The Company also narrowed its 2019 guidance to earnings of $3.49 to $3.53 per diluted share from the previous range of $3.39 to $3.57 per diluted share. Capital expenditures, including asset removal costs, are expected to be approximately $470 million in 2019.
The Company's 2020 earnings guidance includes the benefit of new rates, offset by higher depreciation expense from capital investments and assumes normal weather. For 2019, the Company's preliminary estimate is that the net income impact of colder weather on sales volumes, net of weather normalization mechanisms, was an increase of $4.9 million.
Capital expenditures, including asset removal costs, are expected to be approximately $475 million in 2020, with approximately 70% of these expenditures targeted for system integrity and replacement projects.
The Company expects to achieve an 8.4% return on equity in 2020, which assumes an average rate base of $3.9 billion calculated consistent with utility ratemaking in each jurisdiction.
Earnings per share is expected to increase by an average of 5% to 7% annually between 2019 and 2024; however, the timing and frequency of regulatory filings will impact the growth rate in any individual year.
Capital expenditures, including asset removal costs, are expected to be in the range of $475 million to $525 million per year between 2020 and 2024, leading to rate base growth averaging 7% per year between 2019 and 2024.
The average annual dividend growth rate is expected to be 6% to 8% between 2019 and 2024, with a target dividend payout ratio of 55% to 65% of net income, all subject to board of directors' approval.
See Table 1 below for details of 2020 earnings guidance. Additional information can be found in the 2020 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.
ONE Gas, Inc. (NYSE: OGS) is a 100% regulated natural gas utility, and trades on the New York Stock Exchange under the symbol "OGS." ONE Gas is included in the S&P MidCap 400 Index and is one of the largest natural gas utilities in the United States.
ONE Gas, headquartered in Tulsa, Oklahoma, provides natural gas distribution services to more than 2 million customers in Kansas, Oklahoma and Texas. Its divisions include Kansas Gas Service, the largest natural gas distributor in Kansas; Oklahoma Natural Gas, the largest in Oklahoma; and Texas Gas Service, the third largest in Texas, in terms of customers.
For more information, visit the website at www.onegas.com.
Some of the statements contained and incorporated in this news release are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The forward-looking statements relate to our anticipated financial performance, liquidity, management's plans and objectives for our future operations, our business prospects, the outcome of regulatory and legal proceedings, market conditions and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. The following discussion is intended to identify important factors that could cause future outcomes to differ materially from those set forth in the forward-looking statements.
Forward-looking statements include the items identified in the preceding paragraph, the information concerning possible or assumed future results of our operations and other statements contained or incorporated in this news release identified by words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "should," "goal," "forecast," "guidance," "could," "may," "continue," "might," "potential," "scheduled," "likely," and other words and terms of similar meaning.
One should not place undue reliance on forward-looking statements, which are applicable only as of the date of this news release. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Those factors may affect our operations, markets, products, services and prices. In addition to any assumptions and other factors referred to specifically in connection with the forward-looking statements, factors that could cause our actual results to differ materially from those contemplated in any forward-looking statement include, among others, the following:
These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other factors could also have material adverse effects on our future results. These and other risks are described in greater detail in Part 1, Item 1A, Risk Factors, in our Annual Report. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Other than as required under securities laws, we undertake no obligation to update publicly any forward-looking statement whether as a result of new information, subsequent events or change in circumstances, expectations or otherwise.
ONE Gas, Inc.
(Millions of dollars, except per share amount)
Cost of natural gas
Operations and maintenance
Depreciation and amortization
Total operating expenses
Other income (expense), net
Income before income taxes
Earnings per share, diluted*
*Represents midpoint of guidance range.
Analyst Contact: Brandon Lohse
Media Contact: Leah Harper
SOURCE ONE Gas, Inc.