ONE Gas(US:OGS)2020-11-03 22:26Financial Data and Key Metrics Changes - The company updated its 2020 financial guidance, expecting net income to be between $186 million and $198 million, and earnings per diluted share to be between $3.44 and $3.68 [7] - Net income for Q3 2020 was $21.1 million or $0.39 per diluted share, compared to $17.5 million or $0.33 per diluted share in Q3 2019, reflecting a net margin increase of $5.2 million [8] - Operating costs increased by $0.8 million compared to the same period last year, primarily due to COVID-19 related expenses and employee costs [9] Business Line Data and Key Metrics Changes - The increase in net margin was primarily due to $3.7 million from new rates and $2.7 million from residential sales driven by customer growth [8] - Transport revenues and volumes for Q3 2020 were above the same period in 2019, with year-to-date transport revenues flat year-over-year [20] Market Data and Key Metrics Changes - The company reported an average of approximately 24,000 more sales customers year-to-date compared to the same period last year, with a 27% increase in new customer connections [22] - Economic activity is showing positive signs, particularly in Texas and Oklahoma, with over 100 new business relocations or expansions announced in the Austin area, expected to create over 14,000 new jobs [21] Company Strategy and Development Direction - The company is consolidating jurisdictions to improve efficiency, reducing the number of jurisdictions in Texas from 10 to 5 since the spin-off in 2014 [18] - The company is exploring renewable natural gas (RNG) projects and hydrogen production, indicating a commitment to decarbonization and innovation in energy solutions [48][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in being well-prepared for the winter heating season despite the ongoing pandemic, highlighting proactive measures taken for employee safety [38] - The company is monitoring bad debt expenses, which have increased to $8.8 million year-to-date compared to $4.6 million last year, indicating ongoing challenges related to COVID-19 [57] Other Important Information - The board declared a dividend of $0.54 per share, and the authorized rate base was approximately $3.71 billion as of September 30, 2020 [12] - The company has adequate liquidity, with approximately $391 million in its commercial paper program and no plans to issue equity for the remainder of 2020 [14] Q&A Session Summary Question: How is the company preparing for COVID-19 during the winter heating season? - Management has been preparing since March, implementing medical protocols to ensure employee and customer safety, and feels well-prepared for the upcoming challenges [38][39] Question: What is the trend in bad debt as the company heads into winter? - Bad debt expense is currently $8.8 million year-to-date, up from $4.6 million last year, with ongoing monitoring of the situation [57] Question: Is there a regulatory framework for investing in RNG across jurisdictions? - RNG is recoverable in Texas, and there are efforts in Oklahoma to study and potentially integrate RNG into the gas supply [60]