ONE Gas Issues 2015 Financial Guidance; Lifts Five-year Outlook

(RTTNews) - ONE Gas Inc. (OGS) announced that its 2015 net income is expected to be in the range of $108 million to $118 million, reflecting the benefits of new rates and customer growth.

The midpoint for ONE Gas' 2015 net income guidance is $113 million, an increase of approximately 6 percent compared with the midpoint of $107 million estimated for 2014, which was updated on November 3, 2014. The midpoint for 2015 operating income guidance is $233 million.

ONE Gas' 2015 earnings guidance primarily reflects the benefit of new rates approved in 2014, residential customer growth in Texas and Oklahoma, and the impact of lower costs related to the separation from ONEOK compared with 2014. These benefits are offset partially by higher depreciation expenses due to continued capital investments and higher expected employee-related costs driven primarily by increased pension costs.

Capital expenditures are expected to be $300 million in 2015. More than 70 percent of these expenditures are targeted for system integrity and replacement projects. Information technology investments related to the separation were substantially completed in 2014.

ONE Gas expects net income to increase by an average of 5 to 8 percent annually between 2014 and 2019, compared with the previously estimated range of 4 to 6 percent between 2014 and 2018. ONE Gas' rate base is expected to grow an average of 5 to 6 percent per year between 2014 and 2019.

Capital expenditures are expected to be in the range of $300 million to $325 million per year between 2015 and 2019, compared with the previously estimated range of $240 million to $285 million, primarily due to increased system integrity and replacement investments.

ONE Gas also increased its expected average annual dividend growth rate to 6 to 8 percent between 2014 and 2019, compared with the previous estimate of 5 percent, with a targeted dividend payout ratio of 55 to 65 percent of net income, subject to ONE Gas board approval.