ONE Gas(US:OGS)2022-11-02 00:24Financial Data and Key Metrics Changes - The company narrowed its 2022 net income guidance to a range of $217 million to $226 million, with earnings per diluted share of $4 to $4.16 [14] - For Q3 2022, net income was $23.7 million or $0.44 per diluted share, compared to $20.3 million or $0.38 per diluted share in the same period last year, reflecting a 16.7% increase in earnings [15] - Operating income increased by $5.3 million or 13% over the same period last year, driven by new rates and residential customer growth [15] - Operating costs rose by $9.4 million compared to Q3 2021, with significant increases in outside services and employee-related costs [16] - Interest expense increased by $4.2 million compared to Q3 2021, influenced by higher natural gas prices and increased working capital needs [17] Business Line Data and Key Metrics Changes - The company added nearly 20,000 new customer connections in the nine months ending September 30, a 16% increase compared to the same timeframe in 2021 [29] - New rates reflecting a $19.6 million revenue increase went into effect in July, with interim rates subject to final approval [25] Market Data and Key Metrics Changes - Building permits have declined from historic highs but remained resilient, with increased activity in major metropolitan areas [30] - The I-35 corridor from Kansas City to San Antonio is recognized as the fastest population and job growth region in the US [30] Company Strategy and Development Direction - The company is focused on customer affordability and managing costs amid decade-high inflation and geopolitical conflicts affecting natural gas prices [10] - There is a commitment to clean energy goals and the development of renewable natural gas (RNG) projects [31] - The company plans to file a voluntary RNG tariff in Oklahoma and explore similar options in other jurisdictions [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as inflation and supply chain disruptions but expressed confidence in completing the 2022 capital program and executing in 2023 [34] - The company remains optimistic about growth in Texas and Oklahoma, citing continued economic development and population influx [48][49] Other Important Information - The company executed forward sales agreements for approximately 570,000 shares of common stock, generating potential net proceeds of about $94 million [19] - The Board of Directors declared a dividend of $0.62 per share, unchanged from the previous quarter [23] Q&A Session Summary Question: Capital expenditures for 2022 - The company confirmed it remains on track to complete the $650 million capital expenditure target for 2022, with several large projects in progress [39] Question: Interest in unregulated RNG - Management expressed interest in participating in RNG projects as a means to connect generators with customers seeking lower carbon fuel, while maintaining focus on organic growth opportunities [42][43] Question: Pressure on customer bills - The company emphasized its efforts to help customers moderate usage and manage costs while maintaining a reliable and safe system [45][46] Question: Pace of housing development - Management remains confident in growth in Texas and Oklahoma, noting record connections made and continued economic development despite some signs of slowing in the housing market [47][48]