ONE Gas, Inc.

Good morning and thank you for joining us to discuss our fourth quarter and year end 2024 financial results. This call is being webcast live and a replay will be available later today. After our prepared remarks, we are happy to take your questions. A reminder that 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 statements. For a discussion of factors that could cause actual results to differ, please refer to our SEC filings. Joining me on the call this morning are Sid McAnally, President and Chief Executive Officer, Chris Signolfi, Senior Vice President and Chief Financial Officer, and Curtis Dynan, Senior Vice President and Chief Operating Officer. And now I'll turn the call over to Sid.

Thanks Erin, and good morning everyone. I'd like to start this morning by acknowledging and thanking our coworkers who have been working in heavy snow, ice, and wind chills as low as 25 degrees below zero to keep our customers safe and warm. As always, our team in the field is rising to the challenge and remains committed to our primary objectives, providing natural gas service and prioritizing the safety and wellbeing of our customers and communities. They have our support and our respect. We're pleased to report that 2024 marked another successful year for OneGas. We've once again delivered earnings and capital execution as projected in our guidance Thanks to physical conservatism and planning, our strong execution has allowed us to perform at expected levels. Last quarter, we raised the midpoint of our EPS guidance from $3.85 to $3.90 as company-wide initiatives produced a faster pace of O&M expense moderation than we had expected and short-term interest rates dropped faster than our plan had forecast. We exceeded the midpoint of this elevated guidance achieving full year earnings per diluted share of $3.91. We've met or exceeded the midpoint of our year ahead EPS guidance for the 11th consecutive year, every year since our company separated from One Oak in 2014. Alongside strong financial performance, we've also made significant strides in modernizing and reinforcing our distribution system. We completed our cast iron replacement plan in 2019, eliminating the most leak-prone pipe from our system. 2024 marked another milestone as we finished our bare steel service line replacement program in Kansas. These projects have made our system safer and helped us reduce leak-related emissions by over 50% in 2005. Robust customer growth continues. In 2024, we set 23,000 new meters across our service territory. with growth occurring in every major metro area across our three states. There's still a need for new housing in Kansas, Oklahoma, and Texas, which, together with focused economic development, is driving increased demand for natural gas across our region, a demand we are well positioned to meet. We are also exploring opportunities to supply natural gas for power generation addressing the needs of data centers, industrial applications, and electric providers seeking a reliable power source. Now I'll turn it over to Chris to discuss financial details for the quarter and the year. Chris?

Thanks, Sid, and good morning, everyone. As Sid noted, with solid fourth quarter results, we surpassed the full year EPS guidance midpoint we revised higher last quarter. Gap net income for the fourth quarter was $77 million, or $1.34 per diluted share, compared with $71 million and $1.27 in the same period in 2023. For the full year, GapNet income was $223 million or $3.91 per diluted share, compared with $231 million and $4.14 in 2023. Although weather across our service territory in the fourth quarter was approximately 24% warmer than normal, the impact on earnings was not material due to the effective weather normalization mechanisms we have in each of our three states. Fourth quarter revenues reflect an increase of $24.6 million from new rates, thanks to the work of our teams in successfully executing our regulatory strategy. O&M expenses for the year were up approximately 4%, highlighted by just a 2.4% year-over-year increase in the fourth quarter. Our teams have done a great job managing O&M, and the investments we're making support our growth and system modernization strategies. Excluding amounts related to KGSS-1, depreciation and amortization expense was $4.7 million higher year over year, reflecting an increase in net property, plant, and equipment due to our elevated level of capital investments. Other income, net, decreased $4.6 million compared with the same quarter of 2023, primarily due to a $1.1 million unrealized decrease in the market value of investments associated with our non-qualified employee benefit plans. Comparatively, in the fourth quarter last year, these investments experienced a $3.2 million increase in value. Excluding amounts related to KGSS-1, Interest expense in the quarter was $10.4 million higher year over year, primarily reflecting higher rates on long-term debt issuances over the past year and higher commercial paper balances. We benefited from the rate cuts instituted by the Federal Reserve last fall, as we had not factored in any rate cuts in 2024. As a reminder, while the market continues to debate the pace and timing and magnitude of additional rate action from the Federal Reserve, Our 2025 guidance does not assume any additional rate cuts occur. While we would be pleased to see interest rates decrease even further this year, our forecasts do not assume this will happen. In December, we settled approximately 3.16 million shares of our common stock under our at-the-market equity program and forward contracts for net proceeds of $246 million. As planned, we also amended our forward sale agreements to extend the maturity date on the remaining shares to December 31, 2025. We utilized the proceeds to pay down short-term debt, which is how we fund construction work in progress and gas storage purchases, and for other general corporate purposes. As of December 31, we had $914.6 million of commercial paper outstanding, with a weighted average interest rate of 4.77%, and $45.4 million of short-term investments stemming from our equity settlements, which were used to pay down additional CP in the first days of the new year. Our balance sheet remains strong. In December, S&P affirmed its A- credit rating and stable outlook, and earlier this month, Moody's affirmed its A3 rating and stable outlook. 2024 cash flow metrics were several hundred basis points above our respective downgrade threshold at both agencies, and our financial plan supports similar performance going forward. Our capital expenditures and asset removal costs for the fourth quarter were $190 million, bringing our total for the year to $762 million, compared with $729 million in 2023. The increase is primarily attributable to system integrity projects and the extension of service to new areas to further customer growth. As of year end, the authorized rate base was approximately $5.4 billion, and we estimate our average rate base for 2025 will be approximately $5.8 billion. In January, the One Gas Board of Directors declared a dividend of 67 cents per share an increase of one cent from the prior quarter. And lastly, we reiterate our 2025 financial guidance, including net income of $254 million to $261 million, earnings per diluted share of $4.20 to $4.32, and capital expenditures and asset removal costs of approximately $750 million. With that, Curtis, I'll turn it over to you.