ONE Gas (OGS) Guides FY16 EPS Above Consensus

ONE Gas, Inc. (NYSE: OGS) today announced that its 2016 net income is expected to be in the range of $127 million to $137 million, or approximately $2.40 to $2.60 per diluted share. The midpoint for ONE Gas' 2016 net income guidance is $132 million, or $2.50 per diluted share.

(Street sees FY16 EPS of $2.37)

ONE Gas expects 2015 net income to be in the range of $118 million to $120 million due primarily to lower operating expenses. The previous guidance range of $113 million to $118 million was provided on Oct. 28, 2015.

ONE Gas' 2016 earnings guidance primarily reflects the benefit of new rates and residential customer growth in Texas and Oklahoma. These benefits are offset partially by higher employee-related costs and higher depreciation expense due to capital investments.

Capital expenditures are expected to be $305 million in 2016. More than 70 percent of these expenditures are targeted for system integrity and replacement projects.

Guidance estimates may be impacted by the variables listed in the forward-looking statements below. Additional information is available in the guidance table on the ONE Gas website.

FIVE-YEAR GROWTH FORECAST UPDATED

ONE Gas expects net income and earnings per share to increase by an average of 5 to 8 percent annually between 2015 and 2020. ONE Gas' rate base is expected to grow an average of approximately 5 percent per year between 2015 and 2020. The impact of bonus depreciation from the recently enacted federal legislation has been reflected in this guidance.

Capital expenditures are expected to be in the range of $305 million to $325 million per year between 2016 and 2020.

ONE Gas is increasing its expected average annual dividend growth rate to 8 to 10 percent between 2015 and 2020, compared with the previous estimated range of 6 to 8 percent between 2014 and 2019, with a target dividend payout ratio of 55 to 65 percent of net income, all subject to its board of directors' approval.

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