Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 21, 2015 | |
Document Information [Line Items] | ||
Entity Registrant Name | ONE Gas, Inc. | |
Entity Central Index Key | 1587732 | |
Current Fiscal Year End Date | -19 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 52,593,748 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 |
STATEMENTS_OF_INCOME
STATEMENTS OF INCOME (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Gross Margin | ||
Revenues | $676,531 | $766,178 |
Cost of natural gas | 413,553 | 506,342 |
Net margin | 262,978 | 259,836 |
Operating expenses | ||
Operations and maintenance | 106,561 | 103,499 |
Depreciation and amortization | 31,630 | 31,460 |
General taxes | 15,782 | 15,524 |
Total operating expenses | 153,973 | 150,483 |
Operating income | 109,005 | 109,353 |
Other income | 813 | 633 |
Other expense | -454 | -1,148 |
Interest expense | -11,169 | -12,950 |
Income before income taxes | 98,195 | 95,888 |
Income taxes | -37,814 | -36,812 |
Net income | $60,381 | $59,076 |
Earnings per share (Note 6) | ||
Basic | $1.15 | $1.13 |
Diluted | $1.13 | $1.13 |
Average shares (thousands) | ||
Basic | 52,707 | 52,334 |
Diluted | 53,446 | 52,512 |
Dividends declared per share of stock | $0.30 | $0 |
STATEMENTS_OF_COMPREHENSIVE_IN
STATEMENTS OF COMPREHENSIVE INCOME STATEMENTS OF COMPREHENSIVE INCOME Parenthetical (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
STATEMENTS OF COMPREHENSIVE INCOME Parenthetical [Abstract] | ||
Pension and other postretirement benefit plans, tax | ($88) | $2,124 |
STATEMENTS_OF_COMPREHENSIVE_IN1
STATEMENTS OF COMPREHENSIVE INCOME STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net income | $60,381 | $59,076 |
Other comprehensive income (loss), net of tax | ||
Change in pension and postretirement benefit plan liability, net of tax of $(88) and $2,124, respectively | 140 | -3,393 |
Other comprehensive income (loss), net of tax | 140 | -3,393 |
Comprehensive income | $60,521 | $55,683 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property, plant and equipment | ||
Property, plant and equipment | $4,904,206 | $4,850,201 |
Accumulated depreciation and amortization | 1,578,438 | 1,556,481 |
Net property, plant and equipment | 3,325,768 | 3,293,720 |
Current assets | ||
Cash and cash equivalents | 142,502 | 11,943 |
Accounts receivable, net | 308,850 | 326,749 |
Income tax receivable | 5,590 | 43,800 |
Natural gas in storage | 81,277 | 185,300 |
Regulatory assets (Note 2) | 22,322 | 50,193 |
Other current assets | 43,903 | 49,516 |
Total current assets | 604,444 | 667,501 |
Goodwill and other assets | ||
Regulatory assets (Note 2) | 465,049 | 478,723 |
Goodwill | 157,953 | 157,953 |
Other assets | 52,274 | 51,313 |
Total goodwill and other assets | 675,276 | 687,989 |
Total assets | 4,605,488 | 4,649,210 |
Equity and long-term debt | ||
Common stock, $0.01 par value: authorized 250,000,000 shares; issued and outstanding 52,590,112 shares at March 31, 2015; issued and outstanding 52,083,859 at December 31, 2014 | 526 | 521 |
Paid-in Capital | 1,759,934 | 1,758,796 |
Retained earnings | 84,239 | 39,894 |
Accumulated other comprehensive income (loss) | -5,034 | -5,174 |
Total equity | 1,839,665 | 1,794,037 |
Long-term debt, excluding current maturities | 1,201,310 | 1,201,311 |
Total equity and long-term debt | 3,040,975 | 2,995,348 |
Current liabilities | ||
Current maturities of long-term debt | 6 | 6 |
Notes payable | 0 | 42,000 |
Accounts payable | 105,058 | 159,064 |
Accrued taxes other than income | 47,859 | 44,742 |
Accrued liabilities | 13,648 | 26,019 |
Customer deposits | 60,856 | 60,003 |
Regulatory liabilities | 54,252 | 32,467 |
Other current liabilities | 18,324 | 28,132 |
Total current liabilities | 300,003 | 392,433 |
Deferred credits and other liabilities [Abstract] | ||
Deferred income taxes | 897,458 | 894,585 |
Employee benefit obligations | 286,654 | 287,779 |
Other deferred credits | 80,398 | 79,065 |
Total deferred credits and other liabilities | 1,264,510 | 1,261,429 |
Commitments and contingencies (Note 8) | ||
Total liabilities and equity | $4,605,488 | $4,649,210 |
BALANCE_SHEETS_BALANCE_SHEETS_
BALANCE SHEETS BALANCE SHEETS Parenthetical (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Common stock, par value per share | $0.01 | $0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 52,590,112 | 52,083,859 |
Common stock, shares outstanding | 52,590,112 | 52,083,859 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities | ||
Net income | $60,381 | $59,076 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 31,630 | 31,460 |
Deferred income taxes | 10,460 | 152 |
Share-based compensation expense | 2,484 | 1,794 |
Provision for doubtful accounts | 896 | 891 |
Changes in assets and liabilities: | ||
Accounts receivable | 17,003 | -42,712 |
Income tax receivable | 38,210 | 0 |
Natural gas in storage | 104,023 | 84,474 |
Asset removal costs | -8,168 | -8,107 |
Accounts payable | -53,777 | 6,091 |
Current income taxes payable | 0 | 18,965 |
Accrued taxes other than income | 3,117 | 24,125 |
Accrued liabilities | -12,371 | 10,363 |
Customer deposits | 853 | 1,424 |
Regulatory assets and liabilities | 63,434 | 11,066 |
Other assets and liabilities | -17,085 | -16,964 |
Cash provided by operating activities | 241,090 | 182,098 |
Investing activities | ||
Capital expenditures | -54,914 | -65,731 |
Cash used in investing activities | -54,914 | -65,731 |
Financing activities | ||
Repayments on notes payable, net | -42,000 | 0 |
Issuance of debt, net of discounts | 0 | 1,199,994 |
Long-term debt financing costs | 0 | -10,903 |
Cash Payment to ONEOK Upon Separation | 0 | -1,130,000 |
Issuance of common stock | 2,156 | 17 |
Dividends paid | -15,773 | 0 |
Cash provided by (used in) financing activities | -55,617 | 59,108 |
Change in cash and cash equivalents | 130,559 | 175,475 |
Cash and cash equivalents at beginning of period | 11,943 | 3,171 |
Cash and cash equivalents at end of period | $142,502 | $178,646 |
STATEMENT_OF_CHANGES_IN_EQUITY
STATEMENT OF CHANGES IN EQUITY (USD $) | Total | Common Stock [Member] | Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
In Thousands, except Share data | |||||
Retained earnings, beginning balance at Dec. 31, 2014 | $39,894 | $39,894 | |||
Accumulated Other Comprehensive Income (Loss), beginning balance at Dec. 31, 2014 | -5,174 | 1,758,796 | -5,174 | ||
Total equity, beginning balance at Dec. 31, 2014 | 1,794,037 | ||||
Paid-in Capital, beginning balance at Dec. 31, 2014 | 1,758,796 | ||||
Common Stock Issued, beginning balance at Dec. 31, 2014 | 521 | 521 | |||
Common Stock Issued (in shares), beginning balance at Dec. 31, 2014 | 52,083,859 | 52,083,859 | |||
Cash payment to ONEOK upon separation | 0 | ||||
Net income | 60,381 | 0 | 0 | 60,381 | 0 |
Other comprehensive income | -140 | 0 | 0 | 0 | -140 |
Common stock issued, shares | 506,253 | ||||
Common stock issued, value | 880 | 5 | 875 | 0 | 0 |
Common stock dividends - $0.30 per share | -15,773 | 0 | -263 | -16,036 | 0 |
Retained earnings, ending balance at Mar. 31, 2015 | 84,239 | 84,239 | |||
Accumulated Other Comprehensive Income (Loss), ending balance at Mar. 31, 2015 | -5,034 | 1,759,934 | -5,034 | ||
Total equity, ending balance at Mar. 31, 2015 | 1,839,665 | ||||
Paid-in Capital, ending balance at Mar. 31, 2015 | 1,759,934 | ||||
Common Stock Issued, ending balance at Mar. 31, 2015 | $526 | $526 | |||
Common Stock Issued (in share), ending balance at Mar. 31, 2015 | 52,590,112 | 52,590,112 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Notes) | 3 Months Ended | |
Mar. 31, 2015 | ||
Significant Accounting Policies [Line Items] | ||
SIGNIFICANT ACCOUNTING POLICIES | ||
1 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Our accompanying unaudited financial statements have been prepared pursuant to the rules and regulations of the SEC. These statements also have been prepared in accordance with GAAP and reflect all adjustments that, in our opinion, are necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature. The 2014 year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. These unaudited financial statements should be read in conjunction with the audited financial statements and footnotes in our Annual Report. Due to the seasonal nature of our business, the results of operations for the three months ended March 31, 2015, are not necessarily indicative of the results that may be expected for a 12-month period. | ||
Separation - Prior to January 31, 2014, ONE Gas, Inc. was a wholly owned subsidiary of ONEOK and comprised its former natural gas distribution business. On January 31, 2014, we became an independent, publicly traded company as a result of a distribution by ONEOK of our common stock to ONEOK’s shareholders. Our common stock began trading “regular-way” under the ticker symbol “OGS” on the NYSE on February 3, 2014. | ||
We provide natural gas distribution services to more than 2 million customers through our divisions in Oklahoma, Kansas and Texas through Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, respectively. We serve residential, commercial, industrial and transportation customers in all three states. In addition, we also provide natural gas distribution services to wholesale and public authority customers. | ||
Basis of Presentation - Prior to our separation from ONEOK, our financial statements were derived from ONEOK’s financial statements, which included its natural gas distribution business as if we, for accounting purposes, had been a separate company for all periods presented. The financial statements for periods prior to the separation also include expense allocations for certain corporate functions historically performed by ONEOK, including allocations of general corporate expenses related to executive oversight, accounting, treasury, tax, legal, information technology and other services. We believe our assumptions underlying the financial statements, including the assumptions regarding the allocation of general corporate expenses from ONEOK, are reasonable. However, the financial statements may not include all of the actual expenses that would have been incurred by us and may not reflect our results of operations, financial position and cash flows had we been a separate publicly traded company during the periods presented prior to the separation. | ||
All financial information presented after the separation represents the results of operations, financial position and cash flows of ONE Gas. Accordingly: | ||
• | Our Statement of Income and Comprehensive Income for the three months ended March 31, 2014, consist of the results of ONE Gas for the two months ended March 31, 2014, and the results of ONE Gas Predecessor for the one month ended January 31, 2014. | |
• | Our Statement of Cash Flows for the three months ended March 31, 2014, consists of the results of ONE Gas for the two months ended March 31, 2014, and the results of ONE Gas Predecessor for the one month ended January 31, 2014. | |
Use of Estimates - The preparation of our financial statements and related disclosures in accordance with GAAP requires us to make estimates and assumptions with respect to values or conditions that cannot be known with certainty that affect the reported amount of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenue and expenses during the reporting period. Items that may be estimated include, but are not limited to, the economic useful life of assets, fair value of assets and liabilities, provision for doubtful accounts, unbilled revenues for natural gas delivered but for which meters have not been read, natural gas purchased but for which no invoice has been received, provision for income taxes, including any deferred tax valuation allowances, the results of litigation and various other recorded or disclosed amounts. | ||
We evaluate these estimates on an ongoing basis using historical experience and other methods we consider reasonable based on the particular circumstances. Nevertheless, actual results may differ significantly from the estimates. Any effects on our financial position or results of operations from revisions to these estimates are recorded in the period when the facts that give rise to the revision become known. | ||
Related-Party Transactions - Prior to our separation from ONEOK on January 31, 2014, we had certain transactions with ONEOK, including, but not limited to, natural gas supply, allocated corporate services, employee benefits, cash management, derivatives and long-term lines of credit. Following the separation, any services we continue to receive from ONEOK are now third-party transactions. The remaining related-party transactions were not material. | ||
Segments - We operate in one reportable business segment: regulated public utilities that deliver natural gas to residential, commercial, industrial, wholesale, public authority and transportation customers. The accounting policies for our segment are the same as described in Note 1 of our Notes to the Financial Statements in our Annual Report. We evaluate our financial performance principally on operating income. For the three months ended March 31, 2015, and 2014, we had no single external customer from which we received 10 percent or more of our gross revenues. | ||
Treasury Shares - In February 2015, our Board of Directors authorized us to purchase treasury shares to be used to offset shares issued under our employee and non-employee director equity compensation, dividend reinvestment and employee stock purchase plans. The Board of Directors established an annual limit of $20 million of treasury stock purchases, exclusive of funds received through the dividend reinvestment and employee stock purchase plans. Stock purchases may be made in the open market or in private transactions at times and in amounts that we deem appropriate. There is no guarantee as to the exact number of shares that we may purchase, and we can terminate or limit the program at any time. | ||
Recently Issued Accounting Standards Update - In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which clarifies and converges the revenue recognition principles under GAAP and International Financial Reporting Standards. We are evaluating the impact of this recently issued guidance, which is required to be adopted for our quarterly and annual reports beginning with the first quarter 2017. |
REGULATORY_ASSETS_AND_LIABILIT
REGULATORY ASSETS AND LIABILITIES (Notes) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | |||||||||||||||
Schedule of Regulatory Assets and Liabilities | |||||||||||||||
2 | REGULATORY ASSETS AND LIABILITIES | ||||||||||||||
The tables below present a summary of regulatory assets, net of amortization, and liabilities for the periods indicated: | |||||||||||||||
31-Mar-15 | |||||||||||||||
Current | Noncurrent | Total | |||||||||||||
(Thousands of dollars) | |||||||||||||||
Pension and postretirement benefit costs (see Note 7) | $ | 20,218 | $ | 453,382 | $ | 473,600 | |||||||||
Reacquired debt costs | 812 | 9,527 | 10,339 | ||||||||||||
Other | 1,292 | 2,140 | 3,432 | ||||||||||||
Total regulatory assets, net of amortization | 22,322 | 465,049 | 487,371 | ||||||||||||
Accumulated removal costs (a) | — | (15,038 | ) | (15,038 | ) | ||||||||||
Weather normalization | (8,740 | ) | — | (8,740 | ) | ||||||||||
Over-recovered purchased-gas costs | (44,015 | ) | — | (44,015 | ) | ||||||||||
Ad valorem tax | (1,497 | ) | — | (1,497 | ) | ||||||||||
Total regulatory liabilities | (54,252 | ) | (15,038 | ) | (69,290 | ) | |||||||||
Net regulatory assets (liabilities) | $ | (31,930 | ) | $ | 450,011 | $ | 418,081 | ||||||||
(a) Included in other deferred credits in our Balance Sheets. | |||||||||||||||
31-Dec-14 | |||||||||||||||
Current | Noncurrent | Total | |||||||||||||
(Thousands of dollars) | |||||||||||||||
Under-recovered purchased-gas costs | $ | 28,712 | $ | — | $ | 28,712 | |||||||||
Pension and postretirement benefit costs | 18,108 | 466,684 | 484,792 | ||||||||||||
Reacquired debt costs | 812 | 9,730 | 10,542 | ||||||||||||
Other | 2,561 | 2,309 | 4,870 | ||||||||||||
Total regulatory assets, net of amortization | 50,193 | 478,723 | 528,916 | ||||||||||||
Accumulated removal costs (a) | — | (15,451 | ) | (15,451 | ) | ||||||||||
Weather normalization | (16,516 | ) | — | (16,516 | ) | ||||||||||
Over-recovered purchased-gas costs | (13,055 | ) | — | (13,055 | ) | ||||||||||
Ad valorem tax | (2,896 | ) | — | (2,896 | ) | ||||||||||
Total regulatory liabilities | (32,467 | ) | (15,451 | ) | (47,918 | ) | |||||||||
Net regulatory assets (liabilities) | $ | 17,726 | $ | 463,272 | $ | 480,998 | |||||||||
(a) Included in other deferred credits in our Balance Sheets. | |||||||||||||||
Regulatory assets on our Balance Sheets, as authorized by the various regulatory commissions, are probable of recovery. Base rates are designed to provide a recovery of costs during the period rates are in effect, but do not generally provide for a return on investment for amounts we have deferred as regulatory assets. All of our regulatory assets recoverable through base rates are subject to review by the respective regulatory authorities during future rate proceedings. We are not aware of any evidence that these costs will not be recoverable through either riders or base rates, and we believe that we will be able to recover such costs, consistent with our historical recoveries. | |||||||||||||||
Purchased-gas costs include the costs that have been over- or under-recovered from customers through the purchased-gas cost adjustment mechanisms and also include natural gas utilized in our operations, premiums paid and any cash settlements received from our purchased natural gas call options. |
CREDIT_FACILITIES_Notes
CREDIT FACILITIES (Notes) | 3 Months Ended | |
Mar. 31, 2015 | ||
Line of Credit Facility [Line Items] | ||
Short-term Debt [Text Block] | ||
3 | CREDIT FACILITY AND SHORT-TERM NOTES PAYABLE | |
ONE Gas Credit Agreement - The ONE Gas Credit Agreement contains certain financial, operational and legal covenants. Among other things, these covenants include maintaining ONE Gas’ debt-to-capital ratio of no more than 70 percent at the end of any calendar quarter. The ONE Gas Credit Agreement also contains customary affirmative and negative covenants, including covenants relating to liens, indebtedness of subsidiaries, investments, changes in the nature of business, fundamental changes, transactions with affiliates, burdensome agreements and use of proceeds. In the event of a breach of certain covenants by ONE Gas, amounts outstanding under the ONE Gas Credit Agreement may become due and payable immediately. At March 31, 2015, our debt-to-capital ratio was 40 percent and we were in compliance with all covenants under the ONE Gas Credit Agreement. | ||
The ONE Gas Credit Agreement includes a $50 million sublimit for the issuance of standby letters of credit and also features an option to request an increase in the size of the facility to an aggregate of $1.2 billion from $700 million upon satisfaction of customary conditions, including receipt of commitments from new lenders or increased commitments from existing lenders. Borrowings made under the facility are available for general corporate purposes. The ONE Gas Credit Agreement contains provisions for an applicable margin rate and an annual facility fee, both of which adjust with changes in our credit rating. Based on our current credit ratings, borrowings, if any, will accrue interest at LIBOR plus 79.5 basis points, and the annual facility fee is 8 basis points. | ||
We have a commercial paper program under which we may issue unsecured commercial paper up to a maximum amount of $700 million to fund short-term borrowing needs. The maturities of the commercial paper notes may vary but may not exceed 270 days from the date of issue. The commercial paper notes are generally sold at par less a discount representing an interest factor. | ||
The ONE Gas Credit Agreement is available to repay the commercial paper notes, if necessary. Amounts outstanding under the commercial paper program reduce the borrowing capacity under the ONE Gas Credit Agreement. At March 31, 2015, we had no short-term borrowings, $1.0 million in letters of credit issued under the ONE Gas Credit Agreement and $699.0 million of remaining credit available under the ONE Gas Credit Agreement. |
LONGTERM_DEBT_Notes
LONG-TERM DEBT (Notes) | 3 Months Ended | |
Mar. 31, 2015 | ||
Long-term Debt, Unclassified [Abstract] | ||
Long-term Debt [Text Block] | ||
4 | LONG-TERM DEBT | |
Senior Notes - We have senior notes, consisting of $300 million of 2.07 percent senior notes due 2019, $300 million of 3.61 percent senior notes due 2024 and $600 million of 4.658 percent senior notes due 2044 (collectively, our “Senior Notes”). The indenture governing our Senior Notes includes an event of default upon the acceleration of other indebtedness of $100 million or more. Such events of default would entitle the trustee or the holders of 25 percent in aggregate principal amount of the outstanding Senior Notes to declare those Senior Notes immediately due and payable in full. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Notes) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Comprehensive Income (Loss) Note [Text Block] | |||||||||
5 | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
The following table sets forth the effect of reclassifications from accumulated other comprehensive income (loss) on our Statements of Income for the period indicated: | |||||||||
Details about Accumulated Other Comprehensive | Three Months Ended March 31, | Affected Line Item in the | |||||||
Income (Loss) Components | 2015 | 2014 | Statements of Income | ||||||
(Thousands of dollars) | |||||||||
Pension and other postretirement benefit plan obligations (a) | |||||||||
Amortization of net loss | $ | 12,565 | $ | 8,542 | |||||
Amortization of unrecognized prior service cost | (373 | ) | (303 | ) | |||||
12,192 | 8,239 | ||||||||
Regulatory adjustments (b) | (11,964 | ) | (13,756 | ) | |||||
228 | (5,517 | ) | Income before income taxes | ||||||
(88 | ) | 2,124 | Income tax expense | ||||||
Total reclassifications for the period | $ | 140 | $ | (3,393 | ) | Net income | |||
(a) These components of accumulated other comprehensive income (loss) are included in the computation of net periodic benefit cost. See Note 7 for additional detail of our net periodic benefit cost. | |||||||||
(b) Regulatory adjustments represent pension and other postretirement benefit costs expected to be recovered through rates and are deferred as part of our regulatory assets. See Note 2 for additional disclosures of regulatory assets and liabilities. |
EARNINGS_PER_SHARE_Notes
EARNINGS PER SHARE (Notes) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
EARNINGS PER SHARE [Line Items] | |||||||||||
Earnings Per Share [Text Block] | |||||||||||
6 | EARNINGS PER SHARE | ||||||||||
Basic EPS is based on net income and is calculated based upon the daily weighted-average number of common shares outstanding during the periods presented. Also, this calculation includes fully vested stock awards that have not yet been issued as common stock. Diluted EPS includes the above, plus unvested stock awards granted under our compensation plans, but only to the extent these instruments dilute earnings per share. | |||||||||||
The following tables set forth the computation of basic and diluted EPS from continuing operations for the periods indicated: | |||||||||||
Three Months Ended March 31, 2015 | |||||||||||
Income | Shares | Per Share | |||||||||
Amount | |||||||||||
(Thousands, except per share amounts) | |||||||||||
Basic EPS Calculation | |||||||||||
Net income available for common stock | $ | 60,381 | 52,707 | $ | 1.15 | ||||||
Diluted EPS Calculation | |||||||||||
Effect of dilutive securities | — | 739 | |||||||||
Net income available for common stock and common stock equivalents | $ | 60,381 | 53,446 | $ | 1.13 | ||||||
Three Months Ended March 31, 2014 | |||||||||||
Income | Shares | Per Share | |||||||||
Amount | |||||||||||
(Thousands, except per share amounts) | |||||||||||
Basic EPS Calculation | |||||||||||
Net income available for common stock | $ | 59,076 | 52,334 | $ | 1.13 | ||||||
Diluted EPS Calculation | |||||||||||
Effect of dilutive securities | — | 178 | |||||||||
Net income available for common stock and common stock equivalents | $ | 59,076 | 52,512 | $ | 1.13 | ||||||
On January 31, 2014, 51,941,236 shares of our common stock were distributed to ONEOK shareholders in conjunction with the separation. For comparative purposes, and to provide a more meaningful calculation of weighted-average shares outstanding, we have assumed this amount and any shares associated with fully vested stock awards that have not been issued to be outstanding as of the beginning of each period prior to the separation presented in the calculation of weighted-average shares. | |||||||||||
Dividends - In April 2015, a dividend of $0.30 per share ($1.20 per share on an annualized basis) was declared for shareholders of record on May 15, 2015, payable June 1, 2015. |
EMPLOYEE_BENEFIT_PLANS_Notes
EMPLOYEE BENEFIT PLANS (Notes) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Employee Benefit Plans [Line Items] | ||||||||
EMPLOYEE BENEFIT PLANS | ||||||||
7 | EMPLOYEE BENEFIT PLANS | |||||||
The following tables set forth the components of net periodic benefit cost for our pension and other postretirement benefit plans for the periods indicated: | ||||||||
Pension Benefits | ||||||||
Three Months Ended | Three Months Ended | |||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
(Thousands of dollars) | ||||||||
Components of net periodic benefit cost | ||||||||
Service cost | $ | 3,524 | $ | 2,768 | ||||
Interest cost | 10,652 | 10,948 | ||||||
Expected return on assets | (15,362 | ) | (14,965 | ) | ||||
Amortization of unrecognized prior service cost | 67 | 137 | ||||||
Amortization of net loss | 11,055 | 7,550 | ||||||
Net periodic benefit cost | $ | 9,936 | $ | 6,438 | ||||
Other Postretirement Benefits | ||||||||
Three Months Ended | Three Months Ended | |||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
(Thousands of dollars) | ||||||||
Components of net periodic benefit cost | ||||||||
Service cost | $ | 849 | $ | 1,174 | ||||
Interest cost | 2,666 | 2,901 | ||||||
Expected return on assets | (2,908 | ) | (2,848 | ) | ||||
Amortization of unrecognized prior service cost | (440 | ) | (440 | ) | ||||
Amortization of net loss | 1,510 | 992 | ||||||
Net periodic benefit cost | $ | 1,677 | $ | 1,779 | ||||
We recover qualified pension benefit plan and other postretirement benefit plan costs through rates charged to our customers. Certain utility commissions require that the recovery of these costs be based on specific guidelines. The difference between these regulatory-based amounts and the periodic benefit cost calculated pursuant to GAAP is deferred as a regulatory asset or liability and amortized to expense over periods in which this difference will be recovered in rates, as promulgated by the applicable utility commission. Regulatory adjustments to the net periodic benefit cost were not material for the three month periods ended March 31, 2015 and 2014. |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Notes) | 3 Months Ended | |
Mar. 31, 2015 | ||
Commitments and Contingencies [Line Items] | ||
COMMITMENTS AND CONTINGENCIES | ||
8 | COMMITMENTS AND CONTINGENCIES | |
Environmental Matters - We are subject to multiple historical, wildlife preservation and environmental laws and/or regulations which affect many aspects of our present and future operations. Regulated activities include, but are not limited to, those involving air emissions, storm water and wastewater discharges, handling and disposal of solid and hazardous wastes, wetland preservation, hazardous materials transportation, and pipeline and facility construction. These laws and regulations require us to obtain and/or comply with a wide variety of environmental clearances, registrations, licenses, permits and other approvals. Failure to comply with these laws, regulations, licenses and permits may expose us to fines, penalties and/or interruptions in our operations that could be material to our results of operations. In addition, emission controls and/or other regulatory or permitting mandates under the Clean Air Act and other similar federal and state laws could require unexpected capital expenditures. We cannot assure that existing environmental statutes and regulations will not be revised or that new regulations will not be adopted or become applicable to us. Revised or additional statutes or regulations that result in increased compliance costs or additional operating restrictions could have a material adverse effect on our business, financial condition, results of operations and cash flows. | ||
We own or retain legal responsibility for the environmental conditions at 12 former manufactured natural gas sites in Kansas. These sites contain potentially harmful materials that are subject to control or remediation under various environmental laws and regulations. A consent agreement with the KDHE governs all work at these sites. The terms of the consent agreement allow us to investigate these sites and set remediation activities based upon the results of the investigations and risk analysis. Remediation involves typically the management of contaminated soils and may involve removal of structures and monitoring and/or remediation of groundwater. | ||
We have completed or addressed removal of the source of soil contamination at 11 of the 12 sites according to plans approved by the KDHE. Regulatory closure has been achieved at three of the sites. We have begun site assessment at the remaining site where no active remediation has occurred. | ||
Our expenditures for environmental evaluation, mitigation, remediation and compliance to date have not been significant in relation to our financial position, results of operations or cash flows, and our expenditures related to environmental matters had no material effects on earnings or cash flows during 2015 and 2014. We do not expect to incur material expenditures for these matters in the future. | ||
Pipeline Safety - We are subject to PHMSA regulations, including integrity-management regulations. PHMSA regulations require pipeline companies operating high-pressure transmission pipelines to perform integrity assessments on pipeline segments that pass through densely populated areas or near specifically designated high-consequence areas. In January 2012, the Pipeline Safety, Regulatory Certainty and Job Creation Act was signed into law. The law increased maximum penalties for violating federal pipeline safety regulations and directs the DOT and the Secretary of Transportation to conduct further review or studies on issues that may or may not be material to us. These issues include, but are not limited to, the following: | ||
• | an evaluation of whether natural gas pipeline integrity-management requirements should be expanded beyond current high-consequence areas; | |
• | a verification of records for pipelines in class 3 and 4 locations and high-consequence areas to confirm maximum allowable operating pressures; and | |
• | a requirement to test previously untested pipelines operating above 30 percent yield strength in high-consequence areas. | |
The potential capital and operating expenditures related to this legislation, the associated regulations or other new pipeline safety regulations are unknown. | ||
Legal Proceedings - We are a party to various litigation matters and claims that have arisen in the normal course of our operations. While the results of litigation and claims cannot be predicted with certainty, we believe the reasonably possible losses from such matters, individually and in the aggregate, are not material. Additionally, we believe the probable final outcome of such matters will not have a material adverse effect on our results of operations, financial position or cash flows. |
DERIVATIVE_FINANCIAL_INSTRUMEN
DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Notes) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||
Fair Value Disclosures | |||||
9 | DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | ||||
Accounting Treatment - We record all derivative instruments at fair value, with the exception of normal purchases and normal sales that are expected to result in physical delivery. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it, or if regulatory rulings require a different accounting treatment. | |||||
If certain conditions are met, we may elect to designate a derivative instrument as a hedge to mitigate the risk of exposure to changes in fair values or cash flows. | |||||
The table below summarizes the various ways in which we account for our derivative instruments and the impact on our financial statements: | |||||
Recognition and Measurement | |||||
Accounting Treatment | Balance Sheet | Income Statement | |||
Normal purchases and | - | Recorded at historical cost | - | Change in fair value not recognized in earnings | |
normal sales | |||||
Mark-to-market | - | Recorded at fair value | - | Change in fair value recognized in, and | |
recoverable through, the purchased-gas cost adjustment mechanisms | |||||
We have not elected to designate any of our derivative instruments as hedges. Premiums paid and any cash settlements received associated with the commodity derivative instruments entered into by us are included in, and recoverable through, the purchased-gas cost adjustment mechanisms. | |||||
Determining Fair Value - We define fair value as the price that would be received from the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date. We use the market and income approaches to determine the fair value of our assets and liabilities and consider the markets in which the transactions are executed. We measure the fair value of a group of financial assets and liabilities consistent with how a market participant would price the net risk exposure at the measurement date. | |||||
Fair Value Hierarchy - At each balance sheet date, we utilize a fair value hierarchy to classify fair value amounts recognized or disclosed in our financial statements based on the observability of inputs used to estimate such fair value. The levels of the hierarchy are described below: | |||||
• | Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; | ||||
• | Level 2 - Significant observable pricing inputs other than quoted prices included within Level 1 that are, either directly or indirectly, observable as of the reporting date. Essentially, this represents inputs that are derived principally from or corroborated by observable market data; and | ||||
• | Level 3 - May include one or more unobservable inputs that are significant in establishing a fair value estimate. These unobservable inputs are developed based on the best information available and may include our own internal data. | ||||
We recognize transfers into and out of the levels as of the end of each reporting period. | |||||
Determining the appropriate classification of our fair value measurements within the fair value hierarchy requires management’s judgment regarding the degree to which market data is observable or corroborated by observable market data. We categorize derivatives for which fair value is determined using multiple inputs within a single level, based on the lowest level input that is significant to the fair value measurement in its entirety. | |||||
Derivative Instruments - At March 31, 2015, we had no purchased natural gas call options. At December 31, 2014, we held purchased natural gas call options for the heating season ended March 2015, with total notional amounts of 16.0 Bcf, for which we paid premiums of $6.4 million, and had a fair value of $0.1 million. The premiums paid and any cash settlements received are recorded as part of our unrecovered purchased-gas costs in current regulatory assets as these contracts are included in, and recoverable through, the purchased-gas cost adjustment mechanisms. Additionally, changes in fair value associated with these contracts are deferred as part of our unrecovered purchase gas costs in our Balance Sheets. Our natural gas call options are classified as Level 1 as fair value amounts are based on unadjusted quoted prices in active markets including NYMEX-settled prices. There were no transfers between levels for the three months ended March 31, 2015 and 2014. | |||||
Other Financial Instruments - The approximate fair value of cash and cash equivalents, accounts receivable and accounts payable is equal to book value, due to the short-term nature of these items. Our cash and cash equivalents are comprised of bank and money market accounts and are classified as Level 1. | |||||
Short-term notes payable are due upon demand and, therefore, the carrying amounts approximate fair value and are classified as Level 1. The estimated fair value and book value of our long-term debt, including current maturities, was $1.3 billion and $1.2 billion, respectively, at both March 31, 2015 and December 31, 2014. The estimated fair value of our senior notes at March 31, 2015, was determined using quoted market prices, and are considered Level 2. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | |
Mar. 31, 2015 | ||
Significant Accounting Policies [Line Items] | ||
Basis of Presentation | Basis of Presentation - Prior to our separation from ONEOK, our financial statements were derived from ONEOK’s financial statements, which included its natural gas distribution business as if we, for accounting purposes, had been a separate company for all periods presented. The financial statements for periods prior to the separation also include expense allocations for certain corporate functions historically performed by ONEOK, including allocations of general corporate expenses related to executive oversight, accounting, treasury, tax, legal, information technology and other services. We believe our assumptions underlying the financial statements, including the assumptions regarding the allocation of general corporate expenses from ONEOK, are reasonable. However, the financial statements may not include all of the actual expenses that would have been incurred by us and may not reflect our results of operations, financial position and cash flows had we been a separate publicly traded company during the periods presented prior to the separation. | |
All financial information presented after the separation represents the results of operations, financial position and cash flows of ONE Gas. Accordingly: | ||
• | Our Statement of Income and Comprehensive Income for the three months ended March 31, 2014, consist of the results of ONE Gas for the two months ended March 31, 2014, and the results of ONE Gas Predecessor for the one month ended January 31, 2014. | |
• | Our Statement of Cash Flows for the three months ended March 31, 2014, consists of the results of ONE Gas for the two months ended March 31, 2014, and the results of ONE Gas Predecessor for the one month ended January 31, 2014. | |
Use of Estimates | Use of Estimates - The preparation of our financial statements and related disclosures in accordance with GAAP requires us to make estimates and assumptions with respect to values or conditions that cannot be known with certainty that affect the reported amount of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenue and expenses during the reporting period. Items that may be estimated include, but are not limited to, the economic useful life of assets, fair value of assets and liabilities, provision for doubtful accounts, unbilled revenues for natural gas delivered but for which meters have not been read, natural gas purchased but for which no invoice has been received, provision for income taxes, including any deferred tax valuation allowances, the results of litigation and various other recorded or disclosed amounts. | |
We evaluate these estimates on an ongoing basis using historical experience and other methods we consider reasonable based on the particular circumstances. Nevertheless, actual results may differ significantly from the estimates. Any effects on our financial position or results of operations from revisions to these estimates are recorded in the period when the facts that give rise to the revision become known. | ||
Related-Party Transactions | Related-Party Transactions - Prior to our separation from ONEOK on January 31, 2014, we had certain transactions with ONEOK, including, but not limited to, natural gas supply, allocated corporate services, employee benefits, cash management, derivatives and long-term lines of credit. Following the separation, any services we continue to receive from ONEOK are now third-party transactions. The remaining related-party transactions were not material. | |
Segments | Segments - We operate in one reportable business segment: regulated public utilities that deliver natural gas to residential, commercial, industrial, wholesale, public authority and transportation customers. The accounting policies for our segment are the same as described in Note 1 of our Notes to the Financial Statements in our Annual Report. We evaluate our financial performance principally on operating income. For the three months ended March 31, 2015, and 2014, we had no single external customer from which we received 10 percent or more of our gross revenues. | |
Recently Issued Accounting Standards Update | Recently Issued Accounting Standards Update - In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which clarifies and converges the revenue recognition principles under GAAP and International Financial Reporting Standards. We are evaluating the impact of this recently issued guidance, which is required to be adopted for our quarterly and annual reports beginning with the first quarter 2017. |
DERIVATIVE_FINANCIAL_INSTRUMEN1
DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Policies) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Derivatives and Fair Value Measurement [Abstract] | |||||
Derivatives | Accounting Treatment - We record all derivative instruments at fair value, with the exception of normal purchases and normal sales that are expected to result in physical delivery. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it, or if regulatory rulings require a different accounting treatment. | ||||
If certain conditions are met, we may elect to designate a derivative instrument as a hedge to mitigate the risk of exposure to changes in fair values or cash flows. | |||||
The table below summarizes the various ways in which we account for our derivative instruments and the impact on our financial statements: | |||||
Recognition and Measurement | |||||
Accounting Treatment | Balance Sheet | Income Statement | |||
Normal purchases and | - | Recorded at historical cost | - | Change in fair value not recognized in earnings | |
normal sales | |||||
Mark-to-market | - | Recorded at fair value | - | Change in fair value recognized in, and | |
recoverable through, the purchased-gas cost adjustment mechanisms | |||||
We have not elected to designate any of our derivative instruments as hedges. Premiums paid and any cash settlements received associated with the commodity derivative instruments entered into by us are included in, and recoverable through, the purchased-gas cost adjustment mechanisms. | |||||
Accounting Treatment - We record all derivative instruments at fair value, with the exception of normal purchases and normal sales that are expected to result in physical delivery. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it, or if regulatory rulings require a different accounting treatment. | |||||
If certain conditions are met, we may elect to designate a derivative instrument as a hedge to mitigate the risk of exposure to changes in fair values or cash flows. | |||||
The table below summarizes the various ways in which we account for our derivative instruments and the impact on our financial statements: | |||||
Recognition and Measurement | |||||
Accounting Treatment | Balance Sheet | Income Statement | |||
Normal purchases and | - | Recorded at historical cost | - | Change in fair value not recognized in earnings | |
normal sales | |||||
Mark-to-market | - | Recorded at fair value | - | Change in fair value recognized in, and | |
recoverable through, the purchased-gas cost adjustment mechanisms | |||||
We have not elected to designate any of our derivative instruments as hedges. Premiums paid and any cash settlements received associated with the commodity derivative instruments entered into by us are included in, and recoverable through, the purchased-gas cost adjustment mechanisms. | |||||
Fair Value Measurement | Determining Fair Value - We define fair value as the price that would be received from the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date. We use the market and income approaches to determine the fair value of our assets and liabilities and consider the markets in which the transactions are executed. We measure the fair value of a group of financial assets and liabilities consistent with how a market participant would price the net risk exposure at the measurement date. | ||||
Fair Value Hierarchy - At each balance sheet date, we utilize a fair value hierarchy to classify fair value amounts recognized or disclosed in our financial statements based on the observability of inputs used to estimate such fair value. The levels of the hierarchy are described below: | |||||
• | Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; | ||||
• | Level 2 - Significant observable pricing inputs other than quoted prices included within Level 1 that are, either directly or indirectly, observable as of the reporting date. Essentially, this represents inputs that are derived principally from or corroborated by observable market data; and | ||||
• | Level 3 - May include one or more unobservable inputs that are significant in establishing a fair value estimate. These unobservable inputs are developed based on the best information available and may include our own internal data. | ||||
We recognize transfers into and out of the levels as of the end of each reporting period. | |||||
Determining the appropriate classification of our fair value measurements within the fair value hierarchy requires management’s judgment regarding the degree to which market data is observable or corroborated by observable market data. We categorize derivatives for which fair value is determined using multiple inputs within a single level, based on the lowest level input that is significant to the fair value measurement in its entirety. |
REGULATORY_ASSETS_AND_LIABILIT1
REGULATORY ASSETS AND LIABILITIES (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | |||||||||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES | The tables below present a summary of regulatory assets, net of amortization, and liabilities for the periods indicated: | ||||||||||||||
31-Mar-15 | |||||||||||||||
Current | Noncurrent | Total | |||||||||||||
(Thousands of dollars) | |||||||||||||||
Pension and postretirement benefit costs (see Note 7) | $ | 20,218 | $ | 453,382 | $ | 473,600 | |||||||||
Reacquired debt costs | 812 | 9,527 | 10,339 | ||||||||||||
Other | 1,292 | 2,140 | 3,432 | ||||||||||||
Total regulatory assets, net of amortization | 22,322 | 465,049 | 487,371 | ||||||||||||
Accumulated removal costs (a) | — | (15,038 | ) | (15,038 | ) | ||||||||||
Weather normalization | (8,740 | ) | — | (8,740 | ) | ||||||||||
Over-recovered purchased-gas costs | (44,015 | ) | — | (44,015 | ) | ||||||||||
Ad valorem tax | (1,497 | ) | — | (1,497 | ) | ||||||||||
Total regulatory liabilities | (54,252 | ) | (15,038 | ) | (69,290 | ) | |||||||||
Net regulatory assets (liabilities) | $ | (31,930 | ) | $ | 450,011 | $ | 418,081 | ||||||||
(a) Included in other deferred credits in our Balance Sheets. | |||||||||||||||
31-Dec-14 | |||||||||||||||
Current | Noncurrent | Total | |||||||||||||
(Thousands of dollars) | |||||||||||||||
Under-recovered purchased-gas costs | $ | 28,712 | $ | — | $ | 28,712 | |||||||||
Pension and postretirement benefit costs | 18,108 | 466,684 | 484,792 | ||||||||||||
Reacquired debt costs | 812 | 9,730 | 10,542 | ||||||||||||
Other | 2,561 | 2,309 | 4,870 | ||||||||||||
Total regulatory assets, net of amortization | 50,193 | 478,723 | 528,916 | ||||||||||||
Accumulated removal costs (a) | — | (15,451 | ) | (15,451 | ) | ||||||||||
Weather normalization | (16,516 | ) | — | (16,516 | ) | ||||||||||
Over-recovered purchased-gas costs | (13,055 | ) | — | (13,055 | ) | ||||||||||
Ad valorem tax | (2,896 | ) | — | (2,896 | ) | ||||||||||
Total regulatory liabilities | (32,467 | ) | (15,451 | ) | (47,918 | ) | |||||||||
Net regulatory assets (liabilities) | $ | 17,726 | $ | 463,272 | $ | 480,998 | |||||||||
(a) Included in other deferred credits in our Balance Sheets. |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | The following table sets forth the effect of reclassifications from accumulated other comprehensive income (loss) on our Statements of Income for the period indicated: | ||||||||
Details about Accumulated Other Comprehensive | Three Months Ended March 31, | Affected Line Item in the | |||||||
Income (Loss) Components | 2015 | 2014 | Statements of Income | ||||||
(Thousands of dollars) | |||||||||
Pension and other postretirement benefit plan obligations (a) | |||||||||
Amortization of net loss | $ | 12,565 | $ | 8,542 | |||||
Amortization of unrecognized prior service cost | (373 | ) | (303 | ) | |||||
12,192 | 8,239 | ||||||||
Regulatory adjustments (b) | (11,964 | ) | (13,756 | ) | |||||
228 | (5,517 | ) | Income before income taxes | ||||||
(88 | ) | 2,124 | Income tax expense | ||||||
Total reclassifications for the period | $ | 140 | $ | (3,393 | ) | Net income | |||
(a) These components of accumulated other comprehensive income (loss) are included in the computation of net periodic benefit cost. See Note 7 for additional detail of our net periodic benefit cost. | |||||||||
(b) Regulatory adjustments represent pension and other postretirement benefit costs expected to be recovered through rates and are deferred as part of our regulatory assets. See Note 2 for additional disclosures of regulatory assets and liabilities. |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
EARNINGS PER SHARE [Line Items] | |||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following tables set forth the computation of basic and diluted EPS from continuing operations for the periods indicated: | ||||||||||
Three Months Ended March 31, 2015 | |||||||||||
Income | Shares | Per Share | |||||||||
Amount | |||||||||||
(Thousands, except per share amounts) | |||||||||||
Basic EPS Calculation | |||||||||||
Net income available for common stock | $ | 60,381 | 52,707 | $ | 1.15 | ||||||
Diluted EPS Calculation | |||||||||||
Effect of dilutive securities | — | 739 | |||||||||
Net income available for common stock and common stock equivalents | $ | 60,381 | 53,446 | $ | 1.13 | ||||||
Three Months Ended March 31, 2014 | |||||||||||
Income | Shares | Per Share | |||||||||
Amount | |||||||||||
(Thousands, except per share amounts) | |||||||||||
Basic EPS Calculation | |||||||||||
Net income available for common stock | $ | 59,076 | 52,334 | $ | 1.13 | ||||||
Diluted EPS Calculation | |||||||||||
Effect of dilutive securities | — | 178 | |||||||||
Net income available for common stock and common stock equivalents | $ | 59,076 | 52,512 | $ | 1.13 | ||||||
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Employee Benefit Plans [Line Items] | ||||||||
Schedule of Net Benefit Costs [Table Text Block] | The following tables set forth the components of net periodic benefit cost for our pension and other postretirement benefit plans for the periods indicated: | |||||||
Pension Benefits | ||||||||
Three Months Ended | Three Months Ended | |||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
(Thousands of dollars) | ||||||||
Components of net periodic benefit cost | ||||||||
Service cost | $ | 3,524 | $ | 2,768 | ||||
Interest cost | 10,652 | 10,948 | ||||||
Expected return on assets | (15,362 | ) | (14,965 | ) | ||||
Amortization of unrecognized prior service cost | 67 | 137 | ||||||
Amortization of net loss | 11,055 | 7,550 | ||||||
Net periodic benefit cost | $ | 9,936 | $ | 6,438 | ||||
Other Postretirement Benefits | ||||||||
Three Months Ended | Three Months Ended | |||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
(Thousands of dollars) | ||||||||
Components of net periodic benefit cost | ||||||||
Service cost | $ | 849 | $ | 1,174 | ||||
Interest cost | 2,666 | 2,901 | ||||||
Expected return on assets | (2,908 | ) | (2,848 | ) | ||||
Amortization of unrecognized prior service cost | (440 | ) | (440 | ) | ||||
Amortization of net loss | 1,510 | 992 | ||||||
Net periodic benefit cost | $ | 1,677 | $ | 1,779 | ||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Significant Accounting Policies [Line Items] | |||
Treasury Stock Acquired, Repurchase Authorization | $20 | ||
Common stock, shares authorized | 250,000,000 | 250,000,000 | |
Number of natural gas distribution services customers | 2,000,000 | ||
Segment Reporting, Disclosure of Major Customers | 0 | 0 |
REGULATORY_ASSETS_AND_LIABILIT2
REGULATORY ASSETS AND LIABILITIES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Assets, Current | $22,322 | $50,193 |
Regulatory Assets, Noncurrent | 465,049 | 478,723 |
Regulatory Liability, Current | -54,252 | -32,467 |
Net regulatory assets (liabilities), current | -31,930 | 17,726 |
Net regulatory assets (liabilities), noncurrent | 450,011 | 463,272 |
Net Regulatory Assets | 418,081 | 480,998 |
Accumulated removal costs [Member] | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Liability, Current | 0 | 0 |
Regulatory Liability, Noncurrent | -15,038 | -15,451 |
Regulatory Liabilities | -15,038 | -15,451 |
Weather normalization [Member] | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Liability, Current | -8,740 | -16,516 |
Regulatory Liability, Noncurrent | 0 | 0 |
Regulatory Liabilities | -8,740 | -16,516 |
Over-recovered purchased-gas costs [Member] | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Liability, Current | -44,015 | -13,055 |
Regulatory Liability, Noncurrent | 0 | 0 |
Regulatory Liabilities | -44,015 | -13,055 |
Ad valorem tax [Member] | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Liability, Current | -1,497 | -2,896 |
Regulatory Liability, Noncurrent | 0 | 0 |
Regulatory Liabilities | -1,497 | -2,896 |
Total regulated liabilities [Member] | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Liability, Current | -54,252 | -32,467 |
Regulatory Liability, Noncurrent | -15,038 | -15,451 |
Regulatory Liabilities | -69,290 | -47,918 |
Under-recovered purchased-gas costs [Member] | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Assets, Current | 28,712 | |
Regulatory Assets, Noncurrent | 0 | |
Regulatory Assets | 28,712 | |
Pension and postretirement benefit costs [Member] | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Assets, Current | 20,218 | 18,108 |
Regulatory Assets, Noncurrent | 453,382 | 466,684 |
Regulatory Assets | 473,600 | 484,792 |
Reacquired debt costs [Member] | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Assets, Current | 812 | 812 |
Regulatory Assets, Noncurrent | 9,527 | 9,730 |
Regulatory Assets | 10,339 | 10,542 |
Other regulatory assets [Member] | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Assets, Current | 1,292 | 2,561 |
Regulatory Assets, Noncurrent | 2,140 | 2,309 |
Regulatory Assets | 3,432 | 4,870 |
Total regulatory assets, net of amortization [Member] | ||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||
Regulatory Assets, Current | 22,322 | 50,193 |
Regulatory Assets, Noncurrent | 465,049 | 478,723 |
Regulatory Assets | $487,371 | $528,916 |
CREDIT_FACILITIES_Details
CREDIT FACILITIES (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Line of Credit Facility [Line Items] | ||
Ratio of Indebtedness to Net Capital | 0.4 | |
Commercial paper maximum borrowing capacity | $700,000,000 | |
Commercial Paper | 0 | 42,000,000 |
Letters of Credit Outstanding, Amount | 1,000,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | 699,000,000 | |
Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt Instrument, Covenant Description | The ONE Gas Credit Agreement contains certain financial, operational and legal covenants. Among other things, these covenants include maintaining ONE Gasb debt-to-capital ratio of no more than 70 percent at the end of any calendar quarter. The ONE Gas Credit Agreement also contains customary affirmative and negative covenants, including covenants relating to liens, indebtedness of subsidiaries, investments, changes in the nature of business, fundamental changes, transactions with affiliates, burdensome agreements and use of proceeds. In the event of a breach of certain covenants by ONE Gas, amounts outstanding under the ONE Gas Credit Agreement may become due and payable immediately. | |
Line of Credit Facility, Interest Rate Description | Borrowings, if any, will accrue interest at LIBOR plus 79.5 basis points. | |
Line of credit facility sublimit | 50,000,000 | |
Line Of Credit Facility Option To Increase Borrowing Capacity | 1,200,000,000 | |
Line of Credit Facility, Maximum Borrowing Capacity | $700,000,000 | |
Line of Credit Facility, Commitment Fee Description | The annual facility fee is 8 basis points. |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Debt Instrument [Line Items] | ||
Cash payment to ONEOK upon separation | $0 | ($1,130,000,000) |
Note Payable Due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Covenant Description | The indenture governing our Senior Notes includes an event of default upon the acceleration of other indebtedness of $100 million or more. Such events of default would entitle the trustee or the holders of 25 percent in aggregate principal amount of the outstanding Senior Notes to declare those senior notes immediately due and payable in full. | |
Long-term Debt, Gross | 300,000,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 2.07% | |
Note Payable Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Covenant Description | The indenture governing our Senior Notes includes an event of default upon the acceleration of other indebtedness of $100 million or more. Such events of default would entitle the trustee or the holders of 25 percent in aggregate principal amount of the outstanding Senior Notes to declare those senior notes immediately due and payable in full. | |
Long-term Debt, Gross | 300,000,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 3.61% | |
Notes Payable Due 2044 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Covenant Description | The indenture governing our Senior Notes includes an event of default upon the acceleration of other indebtedness of $100 million or more. Such events of default would entitle the trustee or the holders of 25 percent in aggregate principal amount of the outstanding Senior Notes to declare those senior notes immediately due and payable in full. | |
Long-term Debt, Gross | $600,000,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.66% |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Amortization of net loss | $12,565 | $8,542 |
Amortization of unrecognized prior service cost | -373 | -303 |
Reclassification adjustment, before tax and regulatory adjustments | 12,192 | 8,239 |
Regulatory adjustments | -11,964 | -13,756 |
Reclassification adjustment, before tax | 228 | -5,517 |
Reclassification adjustment, Tax | -88 | 2,124 |
Reclassification adjustment, net of tax | $140 | ($3,393) |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Jan. 31, 2014 |
EARNINGS PER SHARE [Line Items] | |||||
Common stock, shares issued | 52,590,112 | 52,083,859 | 51,941,236 | ||
Basic EPS Calculation | |||||
Net income available for common stock | $60,381 | $59,076 | |||
Weighted Average Number of Shares Outstanding, Basic | 52,707,000 | 52,334,000 | |||
Earnings Per Share, Basic | $1.15 | $1.13 | |||
Diluted EPS Calculation | |||||
Net income available for common stock | 60,381 | 59,076 | |||
Effect of dilutive securities on income | $0 | $0 | |||
Effect of dilutive securities on shares | 739,000 | 178,000 | |||
Weighted Average Number of Shares Outstanding, Diluted | 53,446,000 | 52,512,000 | |||
Earnings Per Share, Diluted | $1.13 | $1.13 | |||
Dividend Declared [Member] | |||||
Dividends | |||||
Common Stock, Dividends, Per Share, Declared | $0.30 | ||||
Common Stock, Dividends, Declared, Annualized Basis | $1.20 |
EMPLOYEE_BENEFIT_PLANS_Details
EMPLOYEE BENEFIT PLANS (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Components of net periodic benefit cost: | ||
Amortization of unrecognized prior service cost | ($373) | ($303) |
Amortization of net loss | 12,565 | 8,542 |
ONE Gas Pension Plans [Member] | ||
Components of net periodic benefit cost: | ||
Service cost | 3,524 | 2,768 |
Interest cost | 10,652 | 10,948 |
Expected return on assets | -15,362 | -14,965 |
Amortization of unrecognized prior service cost | 67 | 137 |
Amortization of net loss | 11,055 | 7,550 |
Net periodic benefit cost | 9,936 | 6,438 |
ONE Gas Postretirement Benefit Plans [Member] | ||
Components of net periodic benefit cost: | ||
Service cost | 849 | 1,174 |
Interest cost | 2,666 | 2,901 |
Expected return on assets | -2,908 | -2,848 |
Amortization of unrecognized prior service cost | -440 | -440 |
Amortization of net loss | 1,510 | 992 |
Net periodic benefit cost | $1,677 | $1,779 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) | Mar. 31, 2015 |
Commitments and Contingencies [Line Items] | |
Number Of Former Manufactured Gas Sites Where We Own Or Retain Legal Responsibility For Environmental Conditions | 12 |
Number of sites where we have completed or addressed removal of the source of soil contamination according to plans approved by KDHE | 11 |
Number of sites where regulatory closure has been achieved | 3 |
Percentage yield of high consequence pipeline areas | 30.00% |
DERIVATIVE_FINANCIAL_INSTRUMEN2
DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
MMcf | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Derivative, Nonmonetary Notional Amount | 16,000 | ||
Premiums recorded in other current assets on natural gas contracts held | $6,400,000 | ||
Fair Value Assets, Transfers between Levels | 0 | 0 | |
Long-term Debt, including current maturities | 1,201,310,000 | 1,201,311,000 | |
Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value, natural gas call options | 100,000 | ||
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Long-term Debt, Fair Value | $1,300,000,000 | $1,300,000,000 |