ONE Gas, Inc.

Thank you, Matt. Good morning, everyone, and thank you for joining us on our first quarter 2024 earnings conference call. This call is being webcast live, and a replay will be available later today. After our prepared remarks, we're happy to take your questions. Statements made during this call that might include one gas expectations or predictions should be considered forward-looking statements. and are covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Securities Act of 1933, and the Securities and Exchange Act of 1934, each as amended. Actual results could differ materially from those projected in any forward-looking statement. For discussion of factors that could cause actual results to differ, please refer to our SEC filings. Joining us on the call this morning are Sid McAnally, President and Chief Executive Officer, Chris Signolfi, Senior Vice President and Chief Financial Officer, and Curtis Steinen, Senior Vice President and Chief Operating Officer. And now I'll turn the call over to Sid.

Thanks Erin, and good morning everyone. We're happy to be with you this morning to discuss our first quarter performance. Based on our first quarter financial results, we're on track to achieve the midpoint of our 2024 financial guidance, despite warm winter weather in our service territory. Our success is made possible by the management of O&M expenses, realizing the efficiencies of bringing functions such as line locating in-house, and the diligence of our coworkers in the execution of our strategic plan. We continue to add new meters, which enhances affordability for our customers and we're engaging in regulatory activity as planned, helping us address the impact of recent economic developments as we maintain our system and fund our growing business. We remain focused on our primary mission, the safe delivery of reliable natural gas to our customers. We recently learned that we received the American Gas Association Safety Award for having the lowest rate of significant injuries among our peer companies for the seventh year in a row. This is a remarkable achievement and one that requires a renewed commitment each day to keep our coworkers and customers safe and to operate in a way that's environmentally responsible. I'm also pleased to announce that as of December 31, 2023, we've achieved a 50% reduction in emissions due to leaks by executing our safety-driven pipeline replacement plan. This progress keeps us on track to reach our stated 2035 goal of reducing emissions associated with mains and services by 55%, measured from a 2005 baseline, even as we continue to grow our system. We also learned that we achieved a AAA ESG rating from MSCI due to our management of safety and climate-related risks. We will continue to provide robust disclosures around our ESG policies and practices and will proactively identify and address related risks. Now I'll turn it over to Chris to discuss our financial performance for the quarter. Chris?

Thanks, Sid, and good morning, everyone. As Sid noted, we had solid financial performance this quarter, despite the headwinds posed by elevated interest rates and persistent inflation. Our teams continue to do a great job managing the risks we can control. Net income for the first quarter was $99 million, or $1.75 per diluted share, compared with the $103 million, or $1.84, in the same period, 2023. Although weather across our service territories for the first quarter was 9% warmer than normal, the impact on earnings was not material due to our effective weather normalization mechanisms. First quarter revenues reflect an increase of $11.2 million from new rates and $1.3 million from continued growth in our customer base. First quarter O&M expenses were approximately 5% higher than the first quarter last year. continuing the moderating trend we experienced throughout 2023 as process efficiencies and the benefits of our insourcing efforts have borne fruit. We expect these initiatives to continue to help counterbalance inflationary pressures and as a reminder, project operating expenses to grow by approximately 5% per year through 2028. Other income net increased nearly a million dollars compared to the same period last year primarily due to increases in the market value of investments associated with our non-qualified employee benefit plans. Excluding the amounts related to KGSS-1, interest expense in the first quarter was $1.2 million, or roughly 7% higher than the same period in 2023, which reflects higher rates on commercial paper balances, the issuance of $300 million of 5.1% senior notes in December, and the maturity of lower coupon notes in February and March. Last fall, we expanded both our credit facility and commercial paper program each to $1.2 billion from $1 billion. Our short-term debt at March 31st is elevated compared to year-end 2023 as we pre-funded our February maturity with a senior note issuance in December and initially absorbed our March maturity with commercial paper. We will look to issue long-term debt and exercise our equity-forward sales agreements later in the year as construction work in progress becomes used and useful. Also, while our jurisdictions provide effective weather normalization mechanisms, which mitigated the earnings impact of the warm weather we experienced in the first quarter, cash flows were affected as we did not monetize as much gas and storage as we would have under normal weather conditions. Higher initial storage balances mean we will inject less this refill season, and so we expect the storage-related cash flow impacts to be offset as we move through the next two quarters. We have forward sales agreements for approximately 3.6 million shares of our common stock with settlement by the end of 2024 at an average price of nearly $77 per share. Had all forward shares been settled at quarter end, we would have received net proceeds of approximately $274 million. We also have approximately $225 million of equity available for issuance under our at-the-market equity program. With forward sales executed last year, we have largely satisfied our equity needs for 2024. Yesterday, the One Gas Board of Directors declared a dividend of 66 cents per share unchanged from the previous quarter. We affirm our 2024 financial guidance, including net income of $214 million to $231 million, earnings per diluted share of $3.70 to $4, and capital investments of approximately $750 million. Finally, last quarter I've noted the market's vigorous debate about the pace, timing, and magnitude of potential interest rate cuts from the Federal Reserve. a discussion which remains very much alive today and to which the market appears highly responsive. Accordingly, I thought it worth repeating that our 2024 financial guidance is not predicated upon any rate cuts occurring this year. We did not assume that that would happen. Moreover, given heightened market volatility and consensus interest rate forecasts which continue to fluctuate, we outline the modeling assumptions which underpin our five-year guidance in our investor presentations. and I'd point your attention back to them for a sense of our multi-year expectations. And now I'll turn it over to Curtis.