(Date of report) | January 18, 2017 |
(Date of earliest event reported) | January 17, 2017 |
Oklahoma | 001-36108 | 46-3561936 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification No.) |
The information disclosed in Item 7.01, including Exhibits 99.1 and 99.2 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing. | ||
Item 7.01 | Regulation FD Disclosure | |
On January 17, 2017, we issued our 2017 financial guidance and updated our expected five-year financial and dividend growth rates, increased our capital expenditure forecast and disclosed how a new accounting standard impacts guidance. | ||
We also announced that our board of directors declared a cash dividend of 42 cents per share of common stock. | ||
The news releases are furnished as Exhibit 99.1 and 99.2 and incorporated by reference herein. | ||
Item 8.01 | Other Events | |
On January 17, 2017, our board of directors declared a cash dividend of 42 cents per share of common stock, payable March 10, 2017, to shareholders of record at the close of business February 24, 2017. | ||
Item 9.01 | Financial Statements and Exhibits | |
(d) | Exhibits | |
Exhibit Number | Description | |
99.1 | Financial Guidance news release issued by ONE Gas, Inc. dated January 17, 2017. | |
99.2 | Dividend news release issued by ONE Gas, Inc. dated January 17, 2017. |
ONE Gas, Inc. | |||
Date: | January 18, 2017 | By: | /s/ Curtis L. Dinan |
Curtis L. Dinan Senior Vice President, Chief Financial Officer and Treasurer |
Exhibit Number | Description | |
99.1 | Financial Guidance news release issued by ONE Gas, Inc. dated January 17, 2017. | |
99.2 | Dividend news release issued by ONE Gas, Inc. dated January 17, 2017. |
January 17, 2017 | Analyst Contact: | Andrew Ziola 918-947-7163 | |
Media Contact: | Jennifer Rector 918-947-7571 |
• | our ability to recover operating costs and amounts equivalent to income taxes, costs of property, plant and equipment and regulatory assets in our regulated rates; |
• | our ability to manage our operations and maintenance costs; |
• | changes in regulation, including the application of market rates by state and local agencies; |
• | the economic climate and, particularly, its effect on the natural gas requirements of our residential and commercial industrial customers; |
• | competition from alternative forms of energy, including, but not limited to, electricity, solar power, wind power, geothermal energy and biofuels; |
• | conservation efforts of our customers; |
• | variations in weather, including seasonal effects on demand, the occurrence of storms and disasters, and climate change; |
• | indebtedness could make us more vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds and/or place us at competitive disadvantage compared with competitors; |
• | our ability to secure reliable, competitively priced and flexible natural gas transportation and supply, including decisions by natural gas producers to reduce production or shut-in producing natural gas wells and expiration of existing supply, and transportation and storage arrangements that are not replaced with contracts with similar terms and pricing; |
• | the mechanical integrity of facilities operated; |
• | operational hazards and unforeseen operational interruptions; |
• | adverse labor relations; |
• | the effectiveness of our strategies to reduce earnings lag, margin protection strategies and risk mitigation strategies; |
• | our ability to generate sufficient cash flows to meet all our cash needs; |
• | changes in the financial markets during the periods covered by the forward-looking statements, particularly those affecting the availability of capital and our ability to refinance existing debt and fund investments and acquisitions; |
• | actions of rating agencies, including the ratings of debt, general corporate ratings and changes in the rating agencies’ ratings criteria; |
• | changes in inflation and interest rates; |
• | our ability to purchase and sell assets at reasonable prices and on other reasonable terms; |
• | our ability to recover the costs of natural gas purchased for our customers; |
• | impact of potential impairment charges; |
• | volatility and changes in markets for natural gas; |
• | possible loss of LDC franchises or other adverse effects caused by the actions of municipalities; |
• | payment and performance by counterparties and customers as contracted and when due; |
• | changes in regulation of natural gas distribution services, particularly those in Oklahoma, Kansas and Texas; |
• | changes in law resulting from new federal or state legislation; |
• | changes in environmental, safety, tax and other laws to which we and our subsidiaries are subject; |
• | advances in technology; |
• | population growth rates and changes in the demographic patterns of the markets we serve; |
• | acts of nature and the potential effects of threatened or actual terrorism, including cyber attacks or breaches of technology systems and war; |
• | the sufficiency of insurance coverage to cover losses; |
• | the effects of our strategies to reduce tax payments; |
• | the effects of litigation and regulatory investigations, proceedings, including our rate cases, or inquiries; |
• | changes in accounting standards; |
• | changes in corporate governance standards; |
• | discovery of material weaknesses in our internal controls; |
• | our ability to attract and retain talented employees, management and directors; |
• | the results of financing efforts, including our ability to obtain financing on favorable terms, which can be affected by various factors, including our credit ratings and general economic conditions; |
• | declines in the discount rates on, declines in the market value of the debt and equity securities of, and increases in funding requirements for, our defined benefit plans; |
• | the ability to successfully complete merger, acquisition or divestiture plans, regulatory or other limitations imposed as a result of a merger, acquisition or divestiture, and the success of the business following a merger, acquisition or divestiture; |
• | the final resolutions or outcomes with respect to our contingent and other corporate liabilities related to the natural gas distribution business and any related actions for indemnification made pursuant to the Separation and Distribution Agreement with ONEOK; and |
• | the costs associated with increased regulation and enhanced disclosure and corporate governance requirements pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. |
ONE Gas, Inc. | |||||||||||||
EARNINGS GUIDANCE* | |||||||||||||
2017 Guidance | Adoption of | ||||||||||||
Before | Accounting | 2017 | |||||||||||
(Unaudited) | Adoption | Standard** | Guidance | ||||||||||
(Millions of dollars) | |||||||||||||
Operating income | |||||||||||||
Net margin | $ | 924 | $ | — | $ | 924 | |||||||
Operations and maintenance | 419 | — | 419 | ||||||||||
Depreciation and amortization | 155 | — | 155 | ||||||||||
General taxes | 57 | — | 57 | ||||||||||
Operating income | 293 | — | 293 | ||||||||||
Other income (expense) | (1 | ) | — | (1 | ) | ||||||||
Interest expense | (45 | ) | — | (45 | ) | ||||||||
Income before income taxes | 247 | — | 247 | ||||||||||
Income taxes | (94 | ) | 4 | (90 | ) | ||||||||
Net income | $ | 153 | $ | 4 | $ | 157 | |||||||
Earnings per share, diluted | $ | 2.89 | $ | 0.08 | $ | 2.97 | |||||||
2017 | |||||||||||||
Guidance | |||||||||||||
(Millions of dollars) | |||||||||||||
Capital expenditures | |||||||||||||
System integrity and replacements | $ | 255 | |||||||||||
Customer growth | 72 | ||||||||||||
Other | 23 | ||||||||||||
Total capital expenditures | $ | 350 | |||||||||||
*Amounts shown are midpoints of ranges provided. | |||||||||||||
** New accounting standard for share-based compensation. |
January 17, 2017 | Analyst Contact: | Andrew Ziola 918-947-7163 | |
Media Contact: | Jennifer Rector 918-947-7571 |
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