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OGS, ONE Gas

Gas Utilities capital-intensive Regulated utility

We are the largest natural gas distributor in Oklahoma and Kansas and the third largest in Texas, in terms of customers.

We provide natural gas distribution services to approximately 2.3 million customers.

We primarily serve residential, commercial, and transportation customers in all three states.

Latest annual: FY2025 10-K

OGS · ONE Gas

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$2.6B

+42.5% YoY · 11% 5-yr CAGR

Vital signs · FY2025, with 5-yr average

Revenue $2.6B 5-yr avg $1.8B

Gross margin 61% 5-yr avg 55%

Operating margin 17.7% 5-yr avg 17.2%

ROIC 6% 5-yr avg 6%

Owner-earnings margin −5% 5-yr avg −17%

Free cash flow margin −5% 5-yr avg −17%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Regulated utility. Returns are set by regulation on an approved rate base; the capital spending regulators approve becomes the growth, recovered through allowed rates.
What moves the needle: Gross margin has run about 57% and operating margin about 18% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. That margin has stayed fairly steady relative to where it runs (14%–21% over the years), so unit growth and cost discipline, not a moving line, are the lever. The cash cycle has run negative through the cycle (a median of −34 days): the operation is paid before it pays, so working capital releases cash as the business grows rather than tying it up. Read this kind of business on rate base and the allowed return. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median 6%, above 15% in 0 of 7 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2022

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22
							Income statement
$1.4B	$1.5B	$1.6B	$1.7B	$1.5B	$1.8B	$2.6B	RevenueRevenue
—	—	—	—	65%	57%	43%	Gross marginGross mgn
$289M	$317M	$288M	$295M	$304M	$310M	$350M	Operating incomeOp. inc.
20.2%	20.6%	17.7%	17.9%	19.8%	17.2%	13.6%	Operating marginOp. mgn
$140M	$163M	$172M	$187M	$196M	$206M	$222M	Net incomeNet inc.
38%	36%	24%	19%	17%	16%	17%	Effective tax rateTax rate
							Cash flow & returns
$291M	$254M	$468M	$310M	$365M	($1.5B)	$1.6B	Operating cash flowOp. cash
$139M	$82M	$287M	$114M	$158M	($1.8B)	$1.3B	Working capital & otherWC & other
$309M	$356M	$394M	$417M	$471M	$495M	$609M	CapexCapex
21.7%	23.1%	24.1%	25.3%	30.8%	27.4%	23.6%	Capex / revenueCapex/rev
($18M)	($103M)	$73M	($107M)	($107M)	($2.0B)	$961M	Owner earningsOwner earn.
−1.3%	−6.7%	4.5%	−6.5%	−7.0%	−112.3%	37.3%	Owner earnings marginOE mgn
($18M)	($103M)	$73M	($107M)	($107M)	($2.0B)	$961M	Free cash flowFCF
−1.3%	−6.7%	4.5%	−6.5%	−7.0%	−112.3%	37.3%	Free cash flow marginFCF mgn
$73M	$88M	$97M	$105M	$114M	$124M	$134M	Dividends paidDiv. paid
$24M	$18M	$0	$0	—	—	—	BuybacksBuybacks
6%	6%	7%	7%	7%	4%	6%	ROICROIC
7%	8%	8%	9%	9%	9%	9%	Return on equityROE
4%	4%	4%	4%	4%	4%	3%	Retained to equityRetained/eq
							Balance sheet
$15M	$14M	$21M	$18M	$8M	$9M	$10M	Cash & investmentsCash+inv
$291M	$299M	$295M	$250M	$293M	$342M	$554M	ReceivablesReceiv.
$132M	$144M	$175M	$120M	$152M	$259M	$360M	Accounts payablePayables
$159M	$155M	$121M	$130M	$141M	$83M	$193M	Operating working capitalOper. WC
$569M	$589M	$543M	$506M	$540M	$2.2B	$1.2B	Current assetsCur. assets
$444M	$673M	$699M	$873M	$797M	$980M	$1.2B	Current liabilitiesCur. liab.
1.3×	0.9×	0.8×	0.6×	0.7×	2.3×	1.0×	Current ratioCurr. ratio
$158M	$158M	$158M	$158M	$158M	$158M	$158M	GoodwillGoodwill
$4.9B	$5.2B	$5.5B	$5.7B	$6.0B	$8.4B	$7.8B	Total assetsAssets
$1.2B	$1.2B	$1.3B	$1.3B	$1.6B	$3.7B	$2.7B	Total debtDebt
$1.2B	$1.2B	$1.3B	$1.3B	$1.6B	$3.7B	$2.7B	Net debt / (cash)Net debt
6.6×	6.9×	5.6×	4.7×	4.9×	5.1×	4.5×	Interest coverageInt. cov.
$1.9B	$2.0B	$2.0B	$2.1B	$2.2B	$2.3B	$2.6B	Shareholders’ equityEquity
0.8%	0.6%	0.5%	0.6%	0.6%	0.6%	0.4%	Stock comp / revenueSBC/rev
							Per share
53.0M	53.0M	53.0M	53.2M	53.4M	53.7M	54.3M	Shares out (diluted)Shares
$26.95	$29.06	$30.81	$31.04	$28.67	$33.70	$47.44	Revenue / shareRev/sh
$2.65	$3.08	$3.25	$3.51	$3.68	$3.85	$4.08	EPS (diluted)EPS
$-0.35	$-1.94	$1.38	$-2.01	$-2.00	$-37.84	$17.69	Owner earnings / shareOE/sh
$-0.35	$-1.94	$1.38	$-2.01	$-2.00	$-37.84	$17.69	Free cash flow / shareFCF/sh
$1.38	$1.66	$1.82	$1.98	$2.14	$2.31	$2.47	Dividends / shareDiv/sh
$5.84	$6.73	$7.44	$7.84	$8.83	$9.23	$11.22	Cap. spending / shareCapex/sh
$35.65	$37.00	$38.52	$40.00	$41.85	$43.77	$47.56	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	6-yr	5-yr
Revenue / share	+9.9%/yr	+10.3%/yr
EPS	+7.5%/yr	+5.8%/yr
Dividends / share	+10.1%/yr	+8.2%/yr
Capital spending / share	+11.5%/yr	+10.8%/yr
Book value / share	+4.9%/yr	+5.2%/yr

The record, charted

FY2016–2022

Each measure over its full record; the current point and the worst year marked.

Share count

54Mpeak FY2022

ROIC

6%low FY2021

Gross margin

43%low FY2022

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$961Mowner earningsvs.$222Mnet incomelow FY2021

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2022

Owner-earnings bridge

FY2018–FY2022cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2022 the business turned $222M of profit into $961M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$222M

Owner earnings$961M · 37% of revenue

	FY2022	FY2021	FY2020	FY2019	FY2018
Reported net income	$222M	$206M	$196M	$187M	$172M
Stock-based compensationreal costnon-cash, but a real cost	+$11M	+$10M	+$10M	+$9M	+$8M
Working capital & othertiming of cash in and out, other non-cash items	+$1.3B	−$1.8B	+$158M	+$114M	+$287M
Cash from operations	$1.6B	($1.5B)	$365M	$310M	$468M
Capital expenditurecash put back in to keep running and to grow	−$609M	−$495M	−$471M	−$417M	−$394M
Owner earnings	$961M	($2.0B)	($107M)	($107M)	$73M
Owner-earnings marginowner earnings ÷ revenue	37%	-112%	-7%	-6%	4%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $11M), owner earnings is nearer $951M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 3.2×

Adequate

Operating income $457M ÷ interest expense $143M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $3.0B · 6.4× operating profit

Heavy net debt

Cash $11M − debt $3.0B

What this means
Netting $11M of cash and short-term investments against $3.0B of debt leaves $3.0B owed, about 6.4× a year's operating profit (6.5× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? -16d

Negative, funded by others

DSO 65 + DIO 0 − DPO 81 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

Return on invested capital 6%

Below average through the cycle

7-yr median, range 4%–7%; 6% latest = NOPAT $376M ÷ invested capital $6.4B

Industry peers: median 6%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 7 years (it ran 6% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin -6%

Consumes cash through the cycle

7-yr median margin, range -112%–37%; latest ($128M) = operating cash $579M − maintenance capex $707M

Industry peers: median 12%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -5% of revenue this year, a -6% median across 7 years. Treating stock comp as the real expense it is (less $15M of SBC) leaves ($143M).
Are earnings backed by cash? 2.19×

Cash-backed

Cash from ops $579M ÷ net income $264M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? —

No surplus to allocate

What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
Investing or harvesting? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Graham’s defensive tests · 3 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $2.6B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.60×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $3.0B vs ($616M) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (7-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (7)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Near

Earnings +33% over the record · +31%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $3.32/share (latest year $4.21), the averaged base the calculator's gate runs on, and book value is $54.81/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2022

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 7 of 7

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 0 of 7 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 19% → 17% (3-yr avg ends)

What this means
Through the cycle the operating margin slipped — about 19% early to 17% lately, median 18% — competition or costs are biting in.
Reinvestment, incremental ROIC 4%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Worst year 2022 · 13.6% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count +0.4%/yr

What this means
Roughly flat share count, little dilution, little buyback.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Raised, but not as a competitor

The filing raises AI among its risks, but in other terms (security, regulation, energy or the like), not as a competitor to its product.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$797M

Cash & short-term investments$11M
Receivables$405M
Other current assets$380M

Current liabilities$1.4B

Debt due within a year$250M
Accounts payable$138M
Other current liabilities$1.0B

Current ratio0.57×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.57×stricter: inventory excluded

Cash ratio0.01×strictest: cash alone against what's due

Working capital($606M)the cushion left after near-term bills

Its current ratio is below 1, which usually reads as strain; here it is likely structural strength. This business collects from customers before it pays suppliers (a negative cash-conversion cycle), so the balance sheet is funded by that float, the way Costco's and Amazon's are. The low ratio can be the edge, not the risk; the cash-conversion cycle and the debt due above say which.

Debt due this year vs. cash$250M due · $11M cash cash alone won't cover the maturities; it leans on refinancing or operating cash · both figures from the Mar 31, 2026 balance sheet

Current ratio, recent quarters0.4× → 0.6×

Deeper floors

Tangible book value$3.0Bequity stripped of goodwill & intangibles

Debt incl. operating leases$2.6B$13M of it operating leases

From the company's latest filing.

How the cash was used, 2016–2022

Over the record, the business generated $1.7B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$3.1B · 177%
Dividends$735M · 43%
Buybacks$42M · 2%

Returned to owners$777M
$735M as dividends and $42M as buybacks.
Source of funding−$2.1B
Reinvestment and shareholder returns ran $2.1B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $1.2B to $2.7B.
Average price paid for buybacks—
Buybacks ran $42M over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count2.6%
The diluted count rose from 53M to 54M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record$2.47/sh
Paid in 7 of the years on record, the per-share dividend growing about 10% a year. It was never cut over the span.
Return on what it retained−74%
Of the earnings it kept rather than paid out ($510M over the span), annual owner earnings (first three years vs last three) fell $376M, so each retained $1 gave back about 0.74 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Pierce H. Norton II	$4.3M	−$1.3M	($2.0B)
2021	Robert S. McAnnally	$2.6M	$2.3M	($2.0B)
2022	Robert S. McAnnally	$3.5M	$2.9M	$961M
2023	Robert S. McAnnally	$4.5M	$1.9M	—
2024	Robert S. McAnnally	$5.2M	$5.0M	—
2025	Robert S. McAnnally	$5.6M	$6.4M	—

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$15M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 3% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why ONE Gas is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2022.

1 of the 5 tests turned up something to look into; the other 4 came back clean.

Look hereDid debt outgrow the business?$1.2B → $2.7B
Debt rose from $1.2B to $2.7B while owner earnings went from about ($16M) to ($392M): the borrowing grew and the earnings that would carry it are not there now. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Pension & retirement, Contingencies as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Gas Utilities

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
OGSONE Gas	$2.6B	57%	17.9%	6%	-6%
SRSpire	$2.5B	53%	18.5%	6%	12%
NFGNational Fuel Gas	$2.2B	86%	31.4%	11%	27%
NJRNew Jersey Resources	$2.0B	37%	12.5%	7%	1%
SWXSouthwest Gas Holdings	$1.9B	51%	12.6%	6%	8%
KNTKKinetik Holdings Inc.	$1.8B	30%	8.1%	3%	22%
NWNNorthwest Natural	$1.3B	—	19.1%	6%	10%
EEExcelerate Energy Inc.	$1.2B	—	19.9%	7%	14%
Group median	—	52%	18.2%	6%	11%

The price

What a price has to assume.

What the price implies

reverse-DCF

ONE Gas is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

Today’s price $

The assumptions Required return 9% Years to get there 10 Revenue growth 0%

Revenue, delivered8%/yr’17→’22

Mature owner-earnings margin 15%

Enter a price to run it.

Owner earnings it must reach—

Margin the price demands—

Owner-earnings margin today−5%

Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

Weigh OGS against another business →

Cite: Owner Scorecard, "ONE Gas (OGS), the owner's record," https://ownerscorecard.com/c/OGS, data as of 2026-07-09.

Manual order: ← OGN its page in the Manual OHI →

Industry order: ← NWN the Gas Utilities chapter OPAL →