Actionable news
0
All posts from Actionable news
Actionable news in OGS: ONE GAS Inc,

ONE Gas Announces First-quarter 2016 Financial Results

TULSA, Okla., May 2, 2016 /PRNewswire/ -- ONE Gas, Inc. OGS, +2.05% today announced financial results for its first quarter 2016; declared its quarterly dividend; and reaffirmed its 2016 financial guidance.

Highlights include:

  • First-quarter 2016 net income was $64.7 million, or $1.22 per diluted share, compared with $60.4 million, or $1.13 per diluted share, in the first quarter 2015;
  • Actual heating degree days across the company's service areas were 4,550 in the first quarter 2016, 14 percent warmer than normal and 18 percent warmer than the same period last year; and
  • The board of directors declared a quarterly dividend of 35 cents per share, or $1.40 per share on an annualized basis, payable on June 1, 2016, to shareholders of record at the close of business on May 16, 2016.

"New rates and warmer weather in our service territories impacted first quarter results," said Pierce H. Norton II, president and chief executive officer. "Safety, investing in the integrity and reliability of our systems and delivering excellent customer service continue to be priorities for ONE Gas as we execute on our long-term strategic plan."

FIRST-QUARTER 2016 FINANCIAL PERFORMANCE

ONE Gas reported operating income of $116.1 million in the first quarter 2016, compared with $109.0 million in the first quarter 2015.

Net margin increased by $9.6 million compared with first quarter 2015, which primarily reflects:

  • A $13.8 million increase from new rates in Oklahoma and Texas;
  • A $1.0 million increase attributed to net residential customer growth in Oklahoma and Texas;
  • A $2.8 million decrease due to lower sales volumes, net of weather normalization, primarily from warmer weather in the first quarter 2016 compared with the first quarter 2015; and
  • A $1.9 million decrease due primarily to lower transportation volumes from weather-sensitive customers in Kansas and Oklahoma.

First-quarter 2016 operating costs were $121.8 million, compared with $122.4 million in the first quarter 2015, which primarily reflects:

  • A $2.5 million decrease in outside service expenses, fleet and other costs;
  • A $2.4 million decrease from the deferral of separation costs incurred in 2014 that was approved in Oklahoma as a regulatory asset in the recent rate proceeding;
  • A $1.3 million decrease in information technology expenses;
  • A $3.6 million increase in employee-related expenses; and
  • A $2.8 million increase in legal expenses.

First-quarter 2016 depreciation and amortization expense was $34.7 million, compared with $31.6 million in the first quarter 2015, due primarily to an increase in depreciation expense from capital investments placed in service.

Capital expenditures were $75.3 million for the first quarter 2016, compared with $54.9 million in the first quarter 2015.

The company ended the first quarter with $52.7 million of cash and cash equivalents, no short-term borrowings and $1.0 million in letters of credit, leaving $699.0 million of credit available under its $700 million credit facility. The total debt-to-capitalization ratio at March 31, 2016, was 39 percent.

Key Statistics: More detailed information is listed in the tables.

  • Actual heating degree days in the Oklahoma service area were 1,565 in the first quarter 2016, 12 percent warmer than normal and 18 percent warmer than the same period last year;
  • Actual heating degree days in the Kansas service area were 2,120 in the first quarter 2016, 15 percent warmer than normal and 16 percent warmer than the same period last year;
  • Actual heating degree days in the Texas service area were 865 in the first quarter 2016, 13 percent warmer than normal and 22 percent warmer than the same period last year;
  • Residential natural gas sales volumes were 51.7 billion cubic feet (Bcf) in the first quarter 2016, down 14 percent compared with the same period last year;
  • Total natural gas sales volumes were 67.1 Bcf in the first quarter 2016, down 14 percent compared with the same period last year;
  • Natural gas transportation volumes were 59.2 Bcf in the first quarter 2016, down 3 percent compared with the same period last year; and
  • Total natural gas volumes delivered were 126.3 Bcf in the first quarter 2016, down 9 percent compared with the same period last year.

REGULATORY ACTIVITY

Oklahoma

In January 2016, the Oklahoma Corporation Commission approved a joint stipulation and settlement agreement for an increase in Oklahoma Natural Gas' base rates of $29,995,000. The agreement includes the continuation, with certain modifications, of the Performance Based Rate Change tariff, which was established in 2009.

Kansas

On May 2, 2016, Kansas Gas Service filed a request with the Kansas Corporation Commission (KCC) for an increase in base rates, reflecting system investments and operating costs necessary to maintain the safety and reliability of its natural gas distribution system. Kansas Gas Service's request, if approved, represents a net base rate increase of $28 million. Kansas Gas Service is already recovering $7.4 million from customers through the Gas System Reliability Surcharge (GSRS), resulting in a total base rate increase of $35.4 million. This request would increase the...


More