ONE Gas(US:OGS)2026-02-19 17:00Financial Data and Key Metrics Changes - For the full year 2025, net income totaled $264 million, or $4.37 per diluted share, compared to $223 million and $3.91 in 2024, representing a year-over-year increase of approximately 18.4% in net income and 11.8% in EPS [6][10] - Adjusted net income for the fourth quarter was $90 million, or $1.48 per diluted share, compared with $78 million and $1.35 in the same period in 2024, indicating a 15.4% increase in adjusted net income and 9.6% in adjusted EPS [9][10] - Capital expenditures totaled $760 million for the year, with O&M expenses up approximately 5% over 2024, slightly above the 4% CAGR guidance [6][11] Business Line Data and Key Metrics Changes - The company completed $760 million worth of capital investment projects during 2025, with $170 million dedicated to serving a growing customer base [16] - The company added about 23,000 new residential customers each year, which helps spread costs more efficiently and maintain affordability [17] Market Data and Key Metrics Changes - The company delivered over 3 billion cubic feet of gas to customers during Winter Storm Fern, with over 80% of the gas supply shielded from temporary price increases due to strategic investments [4][5] - The Texas Railroad Commission approved a $14.4 million revenue increase, a 9.8% return on equity, and a 59.9% equity ratio [14] Company Strategy and Development Direction - The company is focused on disciplined execution of its capital plan to support growth while ensuring affordability, safety, and reliability [16] - The introduction of non-GAAP adjustments to financial reports aims to provide a clearer view of performance within the Texas regulatory model [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or surpassing EPS guidance for the 12th consecutive year, with long-term adjusted net income growth expected at 7%-9% and adjusted EPS growth at 5%-7% [5][10] - The company anticipates a $12 million variance in adjusted net income due to the impact of Texas House Bill 4384, which will be reflected in future financial reports [9] Other Important Information - The company has broken ground on a project to serve an advanced manufacturing plant outside of El Paso, expected to be in service by the third quarter of this year [17] - The company is also supporting proposed legislation in Kansas to allow for more efficient recovery of capital investments [15] Q&A Session Summary Question: Inquiry about non-GAAP adjustments and their impact on capital structure - Management explained that the timing of the adjustments was influenced by the finalization of Texas legislation and that it does not significantly affect capital market plans initially [25][27] Question: Competitive landscape regarding growth opportunities - Management highlighted the importance of having a competitive advantage in serving facilities and noted that regulatory transparency often serves as a tiebreaker against midstream providers [28][30] Question: Potential benefits from proposed Kansas legislation - Management indicated that the proposed bill would expand the types of capital included in filings, potentially increasing customer impact from $0.80 to $1.35 per month [36][39] Question: Guidance assumptions regarding Texas rate case outcomes - Management confirmed that the guidance for adjusted EPS levels incorporates the latest Texas rate case outcome [45] Question: Cash component of regulatory adjustments - Management clarified that while the accrual and deferral do not directly translate to cash, they will lead to larger cash flow items once included in future filings [46]