ONE Gas Inc · Q4 2020 earnings

Briefing

ONE Gas reported positive Q4 2020 financial results, but also addressed the impact of the February winter weather event and affirmed its 2021 financial guidance.

ONE Gas announced its fourth quarter 2020 financial results, reporting diluted earnings per share of $1.09. The company is also addressing the impact of the recent winter storm, which significantly impacted supply, demand, and market pricing for natural gas in its service territories.

• Fourth quarter net income was $58.3 million, or $1.09 per diluted share, compared with $51.2 million, or $0.96 per diluted share, in the fourth quarter 2019.
• The company experienced unprecedented market pricing for natural gas costs in its Kansas, Oklahoma, and Texas jurisdictions due to the historic winter storm.
• ONE Gas entered into a two-year term loan facility providing for a $2.5 billion unsecured term loan to cover natural gas purchases resulting from the weather event.
• The company is working with regulators to extend the recovery periods of gas purchase costs to reduce the immediate impact on customers.

Headline financials

Revenue & EPS history

The company affirms its initial guidance issued on Jan. 19, 2021, when it announced that 2021 net income is expected to be in the range of $198 million to $210 million, or $3.68 to $3.92 per diluted share. Capital expenditures, including asset removal costs, are expected to be approximately $540 million in 2021, with nearly 70% of these expenditures targeted for system integrity and the balance primarily for customer growth. The company's guidance assumes, among other things, the deferral of extraordinary costs associated with the February 2021 winter weather event, including natural gas purchases and other costs related to the procurement and transportation of gas supply including the associated financing costs.