OGS 10-K & 10-Q changes, risk factors and insider trading

We are subject to all the risks and hazards typically associated with the natural gas distribution business that could affect the public safety as well as the reliability of our distribution system. Operating risks include, but are not limited to, leaks, accidents, pipeline rupturesruptures, and the breakdown or failure of equipment or processes. Other operational hazards and unforeseen interruptions include adverse weather conditions, third-party damage to our system, accidents, explosions, fires, the collision of equipment or vehicles with our pipeline facilitiesfacilities, and catastrophic events, such as severe weather events, hurricanes, thunderstorms, tornadoes, wildfires, sustained extreme temperatures, earthquakes, floods, acts of terrorism, pandemics and other health crises, or other similar events beyond our control. Climate change could cause these catastrophic events to become more severe or more frequent. It is also possible that our facilities, or those of our counterparties or service providers, could be direct targets or indirect casualties of an act of terrorism, including cyber-attacks. These issues could result in legal liability, repair and remediation costs, increased operating costs, significantly increased capital expenditures, regulatory fines and penaltiespenalties, and other costscosts, and diminish customer confidence.

Our general liability, cyber, and property insurance policies for many of these hazards and risks are subject to certain limits, deductibles, and policy exclusions. The insurance proceeds received for any loss of, or any damage to, any of our systems or facilities or to third parties may not be sufficient to restore the total loss or damage. Further, the proceeds of any such insurance may not be received in a timely manner. The occurrence of any of the foregoing could have a material adverse effect on our financial condition, results of operationsoperations, and cash flows.

Our ability to implement our business strategy, satisfy our regulatory requirements, and serve our customers is dependent upon our ability to continue to recruit and employ a skilled, agile, diverse, and engaged workforce consisting of talented and experienced managers, professionalprofessional, and technical employees. The competition for talent has become increasingly intense and we may experience increased employee turnover due to a tight labor market. If we are unable to recruit and retain an appropriately qualified workforce, we could encounter operating challenges primarily due to a loss of institutional knowledge and expertise, errors due to inexperience, or the lengthy time period typically required to adequately train replacement personnel.personnel adequately. In addition, higher costs could result from loss of productivity, increased safety compliance issues, or cost of contract labor. Additionally, approximately 18 percent of our employees are represented by collective-bargaining units under collective-bargaining agreements. Disputes over the agreements or failure to timely and effectively renegotiate new agreements upon their expiration could have a negative effect on our business, financial condition and results of operationsoperations, or result in a work stoppage. Any future work stoppage could, depending on the breadth and the length of the work stoppage, have a material adverse effect on our financial condition, results of operationsoperations, and cash flows.

The availabilityunavailability of adequate natural gas pipeline transportation and storage capacity andor a decrease in natural gas supply may decrease and impair our ability to meet customers’ natural gas requirementsrequirements, and our financial condition may be adversely affected.

In order toTo meet customers’ natural gas demands, we rely on and must obtain sufficient natural gas supplies,supply, pipeline transportationtransportation, and storage capacity from third parties. If we are unable to obtain these, our ability to meet our customers’ natural gas requirements could be impaired. If a substantial disruption to or reduction in natural gas supply, pipeline capacitycapacity, or storage capacity occurred due to operational failures or disruptions, legislative or regulatory actions, hurricanes, tornadoes, wildfires, floods, earthquakes, extreme cold weather, acts of terrorism, or cyber-attackscyber-attacks, or acts of war, our operations or financial results could be adversely affected.

Due to technological advances, we have become more reliant on technology to effectively operate our business.business effectively. We use computer programs and applications to help run our business, including an enterprise resource planning system that integrates data and reporting activities across the Company. Additionally, certain portions of our IT systems and infrastructure are provided or maintained by third-party vendors. The failure of these or other similarly important technologies, the lack of alternative technologies, or our inability to have these technologies supported, updated, expanded, or integrated into other technologies, could hinder our operations, and adversely impact our financial condition and results of operations.

While ourOur Company employs a comprehensive cybersecurity program, with robust technical defenses and implemented policies, procedures, and controls,controls aimed at protecting our information technology, operational technology, and data systems from acts of terrorism, cyber-attackscyber-attacks, and security breaches,breaches. ourOur programprogram, however, cannot guarantee the prevention nor mitigation of all incidents. Any cyber breaches or physical security attacks, or threats of such attacks, that affect our IT systems, distribution facilities, customers, supplierssuppliers, and third-party service providers or any financial data could disrupt normal business operations, expose sensitive information, and/or lead to physical damagesdamage that may have a material adverse effect on our business. A severe attack or security breach could adversely affect our business reputation, diminish customer confidence, disrupt operations, subject us to financial liability or increased regulation, increase our costscosts, and expose us to material legal claims and liability which may not be fully covered by insurance, and our business, financial condition, results of operationsoperations, and cash flows could be adversely affected. As cyber or physical security attacks become more frequent and sophisticated, we could be required to incur increased costs to strengthen our systems or to obtain additional insurance coverage against potential losses. Federal and state regulatory agencies, such as DHS and TSA, are increasingly focused on risks related to physical security and cybersecurity in general and have promulgated more stringent security regulations specifically for certain federal contractors and critical infrastructure sectors, including natural gas distribution. Any failure to comply with such government regulations may have a material adverse effect on our results of operations and financial condition. Despite Company policy restrictions on AI, whitelisting of sites, and contractual limitations on vendors’ use of AI, there is also a risk of inadvertent sharing of confidential or proprietary data through the inappropriate use of open AI tools.

We are subject to various risks associated with climate change which could increase our operating costs or restrict our opportunities in new or existing markets, adversely affecting our financial results, growth, cash flowsflows, and results of operations.

We are subject to the federal, state, and local regulation of the safety of our systems and operations, including pipeline safety, system integrity, and the safety of our employees and facilities that may require significant expenditures or, in the case of noncompliance, substantial fines or penalties.

We are subject to regulation under federal pipeline safety statutes promulgated by PHMSA, DOT, OSHA, and any analogous state regulations. These include safety requirements for the design, construction, operation, and maintenance of pipelines, including transmission and distribution pipelines. Additionally, the workplaces associated with our facilities are subject to the requirements of DOT and OSHA,OSHA and comparable state statutes that regulate the protection of the health and safety of workers. Compliance with existing or new laws and regulations may result in increased capital, operatingoperating, and other costs which may not be recoverable in rates from our customers or may impact materially our competitive position relative to other energy providers. The failure to comply with these laws, regulationsregulations, and other requirements, or an accident or injury to employees could expose us to civil or criminal liability, enforcement actions, fines, penalties, or injunctive measures that may not be recoverable through our rates and could have a material adverse effect on our business, financial condition, results of operations, cash flows, and reputation.

We are subject to federal, state, and local laws, rulesrules, and regulations that could impact our ability to earn a reasonable rate of return on our invested capital and to fully recover our invested capital, operating costs, and natural gas costs.

We are subject to regulatory oversight from various federal, state, and local regulatory authorities, including the OCC, KCC, RRCRRC, and various municipalities in Texas. Regulatory actions from these authorities relate to allowed rates of return, rate design and construct, and purchased gas and operating cost recovery. Therefore, our returns are continuously monitored and are subject to challenge for their reasonableness by regulatory authorities or third-party intervenors. Our ability to obtain timely future rate increases depends on regulatory discretion and therefore, there can be no assurance that we will be able to obtain rate increases, fully recover our costscosts, or that our authorized rates of return will continue at the current levels, which could adversely impact our results of operations, financial condition, and cash flows.

We are subject to environmental regulations and legislation, including those intended to address climate change, which could increase our operating costs, adversely affecting our financial results, growth, cash flowsflows, and results of operations.

We are subject to laws, regulationsregulations, and other legal requirements enacted or adopted by federal, statestate, and local governmental authorities, including the EPA and any analogous state agencies, relating to protection of the environment, including those that govern discharges of substances into the air and water, the management and disposal of hazardous substances and waste, the clean-up of contaminated sites, groundwater quality and availability, plant and wildlife protection, as well as work practices related to employee health and safety. Environmental legislation also requires that our facilities, sites, and other properties associated with our operations be operated, maintained, abandoned, and reclaimed to the satisfaction of applicable regulatory authorities. The failure to comply with any laws, regulations, permitspermits, and other requirements, or the discovery of presently unknown environmental conditions, could expose us to civil or criminal liability, enforcement actions and regulatory fines and penalties and could have a material adverse effect on our business, financial condition, results of operationsoperations, and cash flows.

International, federal, regionalregional, and/or state legislative and/or regulatory initiatives may attempt to regulate greenhouse gas emissions, including carbon dioxide and methane, as a response to the threat of climate change. Various states and municipalities have adopted or are considering adopting legislation, regulationsregulations, or other regulatory initiatives that are focused on areas such as greenhouse gas cap and trade programs, carbon taxes, reporting and tracking programs, and restrictions on emissions. Such laws or regulations could impose costs tied to carbon emissions, operational requirements or restrictions, or additional charges to fund energy efficiency activities. They could also incentivize alternative energy sources, impose costs or restrictions on end users of natural gas, or result in other costs or requirements, such as costs associated with the adoption of new infrastructure and technology to respond to new mandates.

Our business and operations are subject to regulation by a number of federal agencies, including but not limited to, FERC, CFTC, IRS, DOT, PHMSAPHMSA, and various state agencies in Oklahoma, Kansas, and Texas, and we are subject to numerous other federal and state laws and regulations. Future changes to laws, regulationsregulations, and policies may impair our ability to compete for business or recover costs and could adversely affect our cash flows, restrict our ability to make capital investmentsinvestments, and may cause us to increase debt and take other actions to conserve cash. Any compliance failure related to these laws and regulations may result in fines, penaltiespenalties, or injunctive measures affecting our operating assets. The fines or penalties for noncompliance with laws and regulations may not be recoverable through our rates. Our failure to comply with applicable regulations could result in fines, penaltiespenalties, and a material adverse effect on our business, financial condition, results of operationsoperations, and cash flows.

FINANCIAL, ECONOMICECONOMIC, AND MARKET RISKS

Unfavorable economic and market conditions could adversely affect our financial condition, earnings, cash flowsflows, and limit our future growth.

Weakening economic activity in our markets, caused by factors such as inflationinflation, andtariffs, high interest rates, and supply chain disruptions could result in a loss of existing customers, a decline in energy consumption, or fewer new customers, especially in newly constructed homes and other buildings,buildings. or a decline in energy consumption, anyAny of whichthese conditions could adversely affect our revenues or restrict our future growth. These conditions may make it more difficult for customers to pay their natural gas bills, leading to slow collections and higher-than-normal levels of accounts receivable, which in turn could increase our financing requirements and bad debt expense. Customers may also experience difficulties paying their natural gas bills in the instance of severe weather events that result in higher usage and higher natural gas prices, reducing our collections and increasing our financing requirements and bad debt expense,expense. whichThis could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity, and prospects.

We cannot predict the timing, severity, or duration of any future economic slowdowns or natural gas market disruptions. Fluctuations and uncertainties in the economy may result in higher interest rates and inflationary pressures on the costs of goods, services, and labor. This could increase our expenses and capital spending and decrease our cash flows if we are not able to recover or recover timely such increased costs from our customers. The foregoing could adversely affect our business, financial condition, results of operationsoperations, and cash flows.

We provide natural gas distribution services to customers in Oklahoma, Kansas, and Texas. Changes in the populations, regional economies, politics, regulations, regulatory decisions by state and local regulatory authorities, and weather patterns of these states could adversely impact our financial condition, results of operationsoperations, and cash flows.

The inability to access capital or significant increases in the cost of capital could adversely affect our results of operations, cash flowsflows, and financial condition.

In addition, the breach of any covenants or any payment obligations in any of these debt agreements will result in an event of default under the applicable debt instrument. If an event of default were to occur, the holders of the defaulted debt may have the ability to cause all amounts outstanding with respect to that debt to be due and payable, subject to applicable grace periods. This could trigger cross-defaults under our other debt agreements, including our Senior Notes. Forced repayment of some or all of our indebtedness could require us to incur new debt at a higher cost, which would have an adverse impact on our financial condition, results of operationsoperations, and cash flows.

We may pursue acquisitions, divestitures, and other strategic opportunities which, if not successful, may adversely impact our results of operations, cash flowsflows, and financial condition.

As part of our strategic objectives, we may pursue acquisitions to complement or expand our business, as well as divestitures and other strategic opportunities. We may not be able to successfully negotiate, finance or receive regulatory approval for future acquisitions or integrate the acquired businesses with our existing business and services. These efforts may also distract our management and employees from day-to-day operations and require substantial commitments of time and resources. Future acquisitions could result in potentially dilutive issuances of equity securities, a decrease in our liquidity as a result of our using a significant portion of our available cash or borrowing capacity to finance the acquisition, the incurrence of debt, contingent liabilities andliabilities, amortization expensesexpenses, and substantial goodwill. The effects of these strategic decisions may have long-term implications that are not likely to be known to us in the short-term. We may be materially and adversely affected if we are unable to successfully integrate businesses that we acquire.

We are a 100-percent regulated natural gas distribution company. As such, our regulators determine the rates we are allowed to charge for our service based on the revenue requirements needed to achieve our authorized rates of return. We earn revenues from the delivery of natural gas, but do not earn a profit on the natural gas that we deliver, as those costs are passed through to our customers at cost. The primary components of our revenue requirements are the amount of capital invested in our business, which is also known as rate base, our allowed rate of return on our capital investmentsinvestments, and our recoverable operating expenses, including depreciation, interest expenseexpense, and income taxes. The variable component of our rates is dependent on the consumption of natural gas, which is impacted primarily by the weather and, to a lesser extent, economic activity. While we have WNA mechanisms that adjust customers’ bills when actual HDDs differ from normalized HDDs, these mechanisms are in place for only a portion of the year, except in Kansas, and do not offset all fluctuations in usage resulting from weather variability. Accordingly, the weather can have either a positive or negative impact on our financial performance.

Our financial performance is contingent on a number of factors, including: (1) our regulatory construct, including the rates we are allowed to charge for our service, and the authorized rates of return on our investments in rate base; (2) the consumption of natural gas, which impacts the amount of natural gas salesrevenues derived from the variable component of our rates; (3) customer growth; (4) our operating performance; and (5) the perceived value of natural gas relative to other energy sources, particularly electricity, which influences our customers’ choice of natural gas to provide a portion of their energy needs.

Credit Facility - In October 2024,2025, we enteredamended intoand an agreement that increased the capacity ofrestated the ONE Gas Credit AgreementAgreement. During this process we increased the capacity to $1.5 billion from $1.35 billion from $1.275 billion with commitments from existing lenders and the addition of aone new lender.lender Otherand thanreduction of three lenders. The term of the increasedagreement commitments,was theextended maturityto date,October 30, 2030, from March 16, 2028,2028. The expansion option in the revolver was set at an additional $750 million, and all other terms and conditions of the ONE Gas Credit Agreement remainare materially unchanged.

Commercial Paper - In OctoberDecember 2024,2025, we increased the capacity of our commercial paper program to $1.35$1.5 billion from $1.275$1.35 billion.

In DecemberMay 2024, we amended the two forward sale agreements2025, we entered into inan Septemberunderwriting 2023 to extend the maturity date of 223,000agreement and 180,000a forward sale agreement for 2,500,000 shares of our common stock, to December 31, 2025 from December 31, 2024.stock. The amended forward sale agreementsagreement provideprovides for settlement on a date, or dates, to be specified at our discretiondiscretion, but which will occur no later than December 31, 2025.2026.

In February 2023, we entered into an at-the-market equity distribution agreement under which we may issue and sell shares of our common stock with an aggregate offering price up to $300 million. This at-the-market equity program replaced our previous at-the-market equity program, which began in February 2020, and expired in February 2023. Sales of common stock are made by means of ordinary brokers’ transactions on the NYSE,NYSE and the NYSE Texas, in block transactionstransactions, or as otherwise agreed to between us and the sales agent. We are under no obligation to offer and sell common stock under the program. At December 31, 2024,2025, we had $225.5 million of equity available for issuance under the program.

The following table summarizes all of our outstanding forward sale agreementsagreement at December 31, 20242025:

InOklahoma March- 2023,On February 27, 2025, Oklahoma Natural Gas filed its required PBRC application for the year ended December 2022.31, 2024. The filed request included a $27.6$41.5 million base rate revenue increase, $2.5$2.4 million energy efficiency incentive, and $11.9$13.2 million of estimated EDIT to be credited to customers in 2024.2026. OnThe Juneparties 13, 2023,reached a settlement inwhich the case was filed withincluded a proposed$41.1 million base rate revenue increase of $26.3 million,increase, a $2.5$2.4 million energy efficiency incentive, and a $12.6$17.9 million of estimated EDIT credit. Pursuant to itsbe tariff,credited Oklahomato Naturalcustomers Gasin placedFebruary new2026. ratesOn intoJune effect12, 2025, the administrative law judge recommended approval of the settlement. Rates were implemented on June 29,27, 2023.2025, In July 2023,and the OCC issued an order approving the settlement.settlement on July 23, 2025.

Kansas - In AugustApril 2023,2025, Kansas Gas Service submitted an application to the KCC requesting an increase of approximately $8.0$7.2 million related to its GSRS. TheIn July 2025, the KCC issuedapproved ana order$7.2 inmillion November 2023 authorizing the increase, and the new surcharge becameincrease effective onAugust December 1, 2023.2025.

West-North Service Area - In February 2024,2025, Texas Gas Service made a GRIP filing for all customers in the Central-Gulfpreviously designated West-North service area, requesting a $12.3$8.2 million increase to be effective in June 2024.2025. In May 2024,2025, the RRC and municipalities approved an increase of $12.2$8.2 million, and new rates became effective in June 2024.2025.

Rio Grande ValleyCentral-Gulf Service Area - In MayFebruary 2024,2025, Texas Gas Service made a GRIP filing for all customers in the Riopreviously Grandedesignated ValleyCentral-Gulf service area, requesting a $3.7$15.4 million increase to be effective in AugustJune 2024.2025. In AugustMay 2024,2025, the RRC and municipalities approved an increase of $3.6$15.4 million, and new rates became effective in SeptemberJune 2024.2025.

We operate in one reportable business segment: regulated public utilities that deliver natural gas to residential, commercialcommercial, and transportation customers. We evaluate our financial performance principally on net income.

Selected Financial Results - Net income was $264.2 million, or $4.37 per diluted share, $222.9 million, or $3.91 per diluted share, $231.2and million,$231.2, or $4.14 per diluted share, and $221.7 million, or $4.08 per diluted share, for the years ended December 31, 2025, 2024, 2023 and 2022,2023, respectively.

Natural gas sales to customers represent revenue from contracts with customers through implied contracts established by our tariffs and rates approved by regulatory authorities, as well as revenues from regulatory mechanisms related to natural gas sales. Additionally, naturalNatural gas sales also include recovery of the cost of natural gas.

Our average cost of gas rate decreased to $5.32 per Mcf for the year ended December 31, 2024, compared to $7.08 per Mcf in the prior year. Cost of natural gas includes commodity purchases, fuel, storage, transportation, hedging costscosts, and settlement proceeds for natural gas price volatility mitigation programs approved by our regulators and other gas purchase costs recovered through our cost of natural gas regulatory mechanismsmechanisms. andCost of natural gas does not include an allocation of general operating costs or depreciation and amortization. These regulatory mechanisms provide a method of recovering natural gas costs on an ongoing basis without a profit. Therefore, although our revenues will fluctuate with the cost of natural gas that we pass-throughpass through to our customers, operating income is not affected by fluctuations in the cost of natural gas.

•an increase of $67.9$116.0 million from new rates; and

•an increase of $6.3$6.6 million in residential sales due to net customer growth in Oklahomaall andthree Texas.states.

•an increase of $2.2$17.0 million in fleetemployee-related expensecosts;

•an increase of $1.9$14.7 million in outsidead-valorem servicestaxes; and

•an increase of $1.7$3.8 million in insuranceoutside expense.services;

Revenues forFor the year ended December 31, 2024,2025, includerevenues reflect an increase of $3.0 million and a decrease in interest expense, net, of $4.3$1.4 million associated with KGSS-I, which isare offset by a decrease of $2.5$4.5 million increase in amortization and operating expense and $1.7 million in interest expense, net.expense.

Other Factors Affecting Net Income - Other factors that affect net income for the year ended December 31, 2024,2025, compared with 2023,2024, include ana decrease of $2.0$0.8 million in other income, net and ana increasedecrease of $31.9$4.4 million in interest expense, net. The decrease in other income, net is due primarily to a $1.2$2.4 million decrease in the gaincredit onfor non-service costs associated with pension and other postemployment benefits, offset partially by a $1.0 million increase in the market value of investments associated with our nonqualified deferred compensation plans. The increasedecrease in interest expense is due primarily to commercial paper borrowings at lower rates and the issuanceimplementation of $300Texas millionHouse ofBill 5.10 percent senior notes due 2029 in December 2023, the reopening of the 5.10 percent senior notes in August 2024 in which we issued an additional $250 million, and repayment of $300 million of 3.61 percent senior notes due February 2024 and $473 million of 1.10 percent senior notes due March 2024 upon maturity with commercial paper.4384.

Capital Expenditures and Asset Removal Costs - Our capital expenditures program includes expenditures for pipeline integrity, extending service to new areas, reinforcing and increasing system capabilities, pipeline replacements, automated meter reading, government-mandated pipeline relocations, fleet, facilities, IT assets, and cybersecurity. It is our practice to maintain and upgrade our infrastructure, facilitiesfacilities, and systems to ensure safe, reliable, and efficient operations. Asset removal costs include expenditures associated with the replacement or retirement of long-lived assets that result from the construction, developmentdevelopment, and/or normal use of our assets, primarily our pipeline assets.

Capital expenditures and asset removal costs increaseddecreased $33.4$2.6 million for 2024,2025, compared with 2023, due primarily to expenditures for system integrity and extension of service to new areas.2024. Our capital expenditures and asset removal costs are expected to be approximately $750$800 million for 2025.2026. While we did not experience a significant impact to our capital expenditure program during the year ended December 31, 2024,2025, our future capital expenditure activity is dependent on a number ofseveral factors, including economic conditions and our supply chains for contract labor, materialsmaterials, and supplies.

The increase in the average number of customers for 2024,2025, compared with 2023,2024, is due primarily to the connection of new customers resulting from the extension and expansion of our system in our service areas. For 2025 and 2024, our average customer count includes 23,000 new customer connections compared to 23,400 in 2023.each year.

The impact of weather on residential and commercial natural gas sales is mitigatedtempered by WNA mechanisms in all jurisdictions.

•Texas - An average of HDDs authorized in our most recent rate proceeding in each jurisdiction and weighted using a rolling 10-year average of actual natural gas distribution sales volumes by service area.volumes.

•9 weather stations and natural gas distribution sales volumes by service area for Texas.

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 outcome of such matters will not have a material adverse effect on our results of operations, financial positionposition, or cash flows. See Note 15 of the Notes to Consolidated Financial Statements in this Annual Report for information with respect to legal proceedings.

General - We have relied primarily on operating cash flowflow, commercial paper, and commercialequity paperforward agreements for our liquidity and capital resource requirements. We fund operating expenses, working capital requirements, including purchases of natural gas, and capital expenditures primarily with cash from operationsoperations, commercial paper, and commercialsettlements paper.of equity forward agreements.

Our stable cash flow and earnings profile is due to the significant residential component of our customer base, the fixed-charge component of our natural gas sales revenuesrevenues, and the rate mechanisms that we have in place. Additionally, we have rate mechanisms in place in our jurisdictions that reduce the lag in earning a return on our capital expenditures and provide for recovery of certain changes in our cost of service by allowing for adjustments to rates between rate cases. We anticipate that our cash flow generated from operations and our expected short- and long-term financing arrangements will enable us to maintain our current and planned level of operations and provide us flexibility to finance our infrastructure investments. Our ability to access capital markets for debt and equity financing under reasonable terms depends on market conditions, our financial conditioncondition, and credit ratings.

Short-term Debt - The ONE Gas Credit Agreement contains certain financial, operationaloperational, and legal covenants. Among other things, these covenants include maintaining ONE Gas’ total debt-to-capital ratioratio, excluding the debt of KGSS-I, of no more than 70 percent at the end of any calendar quarter. At December 31, 2024,2025, our total debt-to-capital ratioratio, excluding KGSS-I, was 51.847.6 percent and we were in compliance with all covenants under the ONE Gas Credit Agreement. Excluding the debt of KGSS-I, which is non-recourse to us, our total debt-to-capital ratio was 49.5 percent. We may reduce the unutilized portion of the ONE Gas Credit Agreement in whole or in part without premium or penalty. The ONE Gas Credit Agreement contains customary events of default. Upon the occurrence of certain events of default, the obligations under the ONE Gas Credit Agreement may be accelerated and the commitments may be terminated.

Dividend - In MayAugust 2026, we declared a dividend of $0.68 per share ($2.72 per share on an annualized basis) for shareholders of record as of MayAugust 18,17, 2026, payable on JuneAugust 2,31, 2026.

Oklahoma - On February 26, 2026, Oklahoma Natural Gas filed its required PBRC application for the year ended December 31, 2025. The filed request included a $28.7 million base rate revenue increase, $2.6 million energy efficiency incentive, and $14.4 million of estimated EDIT to be credited to customers in 2027. AAt the hearing beforeon June 11, 2026, the administrative law judge isrecommended scheduledapproval forof Junethe 11,application 2026.as Ratesfiled. maySubsequent beto implementedthe hearing, exceptions to the administrative law judge’s oral ruling were filed at the OCC as well as an appeal to the Oklahoma Supreme Court. Interim rates subject to refund were implemented on June 26, 2026.2026, in compliance with the PBRC tariff.

Texas - In March 2026, Texas Gas Service made a GRIP filing for all customers requesting a $36.9 million increase to be effective in July 2026. In June 2026, the RRC approved an increase of $36.9 million, and new rates became effective in July 2026.

Selected Financial Results - For the three months ended MarchJune 31,30, 2026, net income was $128.7$46.8 million, or $2.04$0.74 per diluted share, compared with $119.4$32.0 million, or $1.98$0.53 per diluted shareshare, in the same period last year. Adjusted net income was $133.4$52.1 million, or $2.11$0.82 adjusted net income per diluted share, for the three months ended June 30, 2026 compared with adjusted net income of $120.1$32.7 million, or $1.99$0.54 adjusted net income per diluted share, in the same period last year. For the six months ended June 30, 2026, net income was $175.5 million, or $2.78 per diluted share, compared with $151.5 million, or $2.51 per diluted share, in the same period last year. Adjusted net income was $185.5 million, or $2.94 adjusted net income per diluted share, for the six months ended June 30, 2026 compared with adjusted net income of $152.8 million, or $2.53 adjusted net income per diluted share, in the same period last year. See the “Non‑GAAPNon-GAAP Financial Measures” section for a reconciliation of the Company’s GAAP net income and GAAP EPS to adjusted net income and adjusted net income per share.

Operating income increased $9.1$10.7 million for the three months ended MarchJune 31,30, 2026, compared with the same period last year, due primarily to anthe increase of $27.3 million in revenue from new rates.following:

•an increase of $1.3$16.4 million in outsiderevenue servicesfrom new rates; and

Weather across our service territories for the first quarter of 2026 was 24.628 percent warmer than the prior year.year for the three months ended June 30, 2026 and 25 percent warmer than the prior year for the six months ended June 30, 2026. The impact on operating income was temperedmitigated by our weather normalization mechanisms.

Other Factors Affecting Net Income - Other factors that affected net income for the three months ended MarchJune 31,30, 2026, compared to the same period last year, include aan decreaseincrease of $2.6 million in other income (expense), net due primarily to a $1.5credit of $2.4 million decreasedue to the change in netfederal periodictax benefitregulation creditfor other than service costs andsecuritization, a $0.9$1.7 million decreaseincrease in the market value of investments associated with our nonqualified deferred compensation plans.plan, partially offset by a $1.3 million decrease in net periodic benefit credit other than service costs.

Additionally, net income for the three and six months ended MarchJune 31,30, 2026, compared with the same periodperiods last year, includes a decreasedecreases in interest expense, net of $3.3$4.2 million and $7.5 million, respectively, due primarily to a lower weighted averageweighted-average interest rate on commercial paper borrowings and the implementation of Texas Rule House Bill 4384.

EDIT - Income tax expense reflects credits for the amortization of the regulatory liability associated with EDIT that were returned to customers of $9.5$3.3 million and $8.1$2.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and credits of $12.8 million and $10.2 million for the six months ended June 30, 2026 and 2025, respectively.

Capital expenditures and asset removal costs were $8.1$1.8 million and $9.9 million lower for the three and six months ended MarchJune 31,30, 2026, compared with the same periodperiods last year. Our full-year capital expenditures and asset removal costs are expected to be approximately $800 million for 2026.

Non-GAAP Financial Measures - Adjusted net income and adjusted net income per share are calculated as GAAP net income plus the deferral of an equity portion of a carrying cost attributable to shareholders’ investment capitalized for regulatory purposes but not for financial reporting purposes. These carrying costs relate to property, plant and equipment that has been placed in service, but not yet reflected in baseTexas rates. Property, plant and equipment placed in service may vary by quarter based on the timing and complexity of projects, weather impacts, construction completion schedules, contractor activities, and other operational factors. During the three months ended June 30, 2026, we placed $53.8 million of property, plant and equipment in service eligible for this treatment, compared with $62.6 million in the same period last year. For the six months ended June 30, 2026, we placed $125.3 million of property, plant and equipment in service eligible for this treatment, compared with $125.5 million in the same period last year. Adjusted net income and adjusted net income per share should not be considered in isolation or as a substitute for GAAP net income or GAAP EPS.

The increase in the average number of customers for the periods presented is due primarily to the connection of new customers resulting from the extension and expansion of our system in our service areas. For the three months ended MarchJune 31,30, 2026, our average customer count includes approximately 4,800 new customer connections duringin the period. For the six months ended June 30, 2026, our average customer count includes approximately 9,600 new customer connections in the period. For the year ended December 31, 2025, our average customer count included approximately 23,000 new customer connections.

Actual HDDs are based on the quarter-to-datequarter weighted average of:

The ONE Gas Credit Agreement contains certain financial, operational, and legal covenants. Among other things, these covenants include maintaining ONE Gas’ total debt-to-capital ratio, excluding the debt of KGSS-I, of no more than 70 percent at the end of any calendar quarter. At MarchJune 31,30, 2026, our total debt-to-capital ratio, excluding KGSS-I, was 47.1 percent and we were in compliance with all covenants under the ONE Gas Credit Agreement. We may reduce the unutilized portion of the ONE Gas Credit Agreement in whole or in part without premium or penalty. The ONE Gas Credit Agreement contains customary events of default. Upon the occurrence of certain events of default, theour obligations under the ONE Gas Credit Agreement may be accelerated and the commitments may be terminated.

At MarchJune 31,30, 2026, we had approximately $2.4 million in letters of credit issued and no borrowings under the ONE Gas Credit Agreement, with approximately $1.5 billion of remaining credit, which is available to repay our commercial paper borrowings and for other permitted purposes.

Under our commercial paper program, we may issue unsecured commercial paper up to the maximum amount of $1.5 billion to fund short-term borrowing needs. The maturities of the commercial paper vary but may not exceed 270 days from the date of issue. Commercial paper is generally sold at par less a discount representing an interest factor. At MarchJune 31,30, 2026 and December 31, 2025, we had $759.7$770.8 million and $737.4 million of commercial paper outstanding with a weighted-average interest rate of 4.144.09 percent and 3.94 percent, respectively.

Senior Notes - At MarchJune 31,30, 2026, our long-term debt-to-capital ratio was 40.3 percent, exclusive of KGSS-I debt.

At MarchJune 31,30, 2026, we had outstanding $2.2 billion of Senior Notes with none due within the next year. 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.

Depending on the series, we may redeem our Senior Notes at par, plus accrued and unpaid interest to the redemption date, starting one month, three months, or six months,months before their maturity dates. Prior to these dates, we may redeem these Senior Notes, in whole or in part, at a redemption price equal to the principal amount, plus accrued and unpaid interest and a make-whole premium. The redemption price will never be less than 100 percent of the principal amount of the respective Senior Note, plus accrued and unpaid interest to the redemption date. Our Senior Notes are senior unsecured obligations, ranking equally in right of payment with all of our existing and future unsecured senior indebtedness.

Credit Ratings - Our credit ratings at MarchJune 31,30, 2026, were:

Securitized Utility Tariff Bonds - At MarchJune 31,30, 2026, we had outstanding $242.5 million of 5.486 percent KGSS-I Securitized Utility Tariff Bonds with $31.4 million due within the next year. The bonds are governed by an indenture between KGSS-I and the indenture trustee. The indenture contains certain covenants that restrict KGSS-I’s ability to sell, transfer, convey, exchange, or otherwise dispose of its assets.

At-the-Market Equity Program - In February 2026, we entered into an at-the-market equity distribution agreement under which we may issue and sell shares of our common stock with an aggregate offering price up to $225 million. Sales of common stock are made by means of ordinary brokers’ transactions on the NYSE and the NYSE Texas, in block transactions or as otherwise agreed to between us and the sales agent. We are under no obligation to offer and sell common stock under the program. At MarchJune 31,30, 2026, we had $204.4 million of equity available for issuance under the program. Had we fully settled all 506,607 shares sold under our forward sale agreements, as of June 30, 2026, we would have generated net proceeds of approximately $41.5 million.

Operating cash flows were lower for the threesix months ended MarchJune 31,30, 2026, compared with the prior period, due primarily to working capital changes related to anthe increaserecovery inof regulatory assets.assets, net.

Investing Cash Flows - Cash used in investing activities decreased for the threesix months ended MarchJune 31,30, 2026, compared with the prior period, due primarily to the timing of capital expenditures for system integrity and extension of service to new areas.

Financing Cash Flows - Cash used in financing activities decreased for the threesix months ended MarchJune 31,30, 2026, compared with the prior period, due primarily to higher net commercial paper repayments in 2025.

Environmental Matters - We are subject to multiple laws and regulations regarding protection of the environment and natural and cultural resources, 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, plant and wildlife protection, hazardous materials use, storage, and 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 or the discovery of presently unknown environmental conditions 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 CAA 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, and results of operations. Our expenditures for environmental investigation and remediation 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 the three and six months ended MarchJune 31,30, 20262026, and 2025.

Pursuant to the AAO, costs approved for recovery in a future rate proceeding are to be amortized over a 15-year period. The unamortized amounts are not included in rate base or accumulate carrying charges. Following a determination that future investigation and remediation work approved by the KDHE exceeds $32.0 million, net of any related insurance recoveries, Kansas Gas Service is required to file an application with the KCC for approval to increase the $32.0 million cap. At MarchJune 31,30, 2026 and December 31, 2025, we have deferred $30.6$30.3 million and $30.1 million, respectively, for accrued investigation and remediation costs, net of insurance proceeds, pursuant to our AAO.

We also own or retain legal responsibility for certain environmental conditions at a former MGP site in Texas. At the request of the TCEQ, we began investigating the level and extent of contamination associated with the site under their Texas Risk Reduction Program. A preliminary site investigation revealed that this site contains contaminants generally associated with MGP sites and is subject to control or remediation under various environmental laws and regulations. At MarchJune 31,30, 2026, estimated costs associated with expected remediation activities for this site are not material.

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 the three and six months ended MarchJune 31,30, 20262026, and 2025. The reserve for remediation of our MGP sites was $13.2$13.0 million and $13.7 million at MarchJune 31,30, 2026 and December 31, 2025, respectively.

Environmental Footprint - 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 regulations that result in increased compliance costs or additional operating restrictions could have a material adverse effect on our business, financial condition, and results of operations. Our expenditures for environmental investigation and remediation 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 for the three and six months ended MarchJune 31,30, 20262026, and 2025.

PHMSA promulgates various regulations related to pipeline safety. As part of the Consolidated Appropriations Act, 2021, the PIPES Act reauthorized PHMSA through 2023 and directed the agency to move forward with several regulatory actions. Outstanding regulatory actions include the “Pipeline Safety: Safety of Gas Distribution Pipelines” and “Pipeline Safety: Gas Pipeline Leak Detection” proposed rulemakings. On May 28, 2026, PHMSA hosted a meeting of the Gas Pipeline Advisory Committee to cover the proposed “Pipeline Safety: Safety of Gas Distribution Pipelines” rule. PHMSA is anticipating publishing the final rule to the Federal Register in December of 2026. The “Pipeline Safety: Gas Pipeline Leak Detection” proposed rule would require operators of new and existing transmission and distribution pipeline facilities to conduct certain leak detection and repair programs and require facility inspection and maintenance plans to align with those regulations. On January 20, 2025, an executive order began a regulatory freeze on all rulemakings that were not yet effective pending further review. On July 8, 2026, PHMSA published the NPRM for Gas Transmission Pipelines Repair Criteria in the Federal Register. This rule proposes to modernize and clarify anomaly response criteria. To the extent such rulemakings impose more stringent requirements on our facilities, we may be required to incur expenditures that may be material.

•cyber-attacks, which,which continue to increase in volume and sophistication, or breaches of technology systems that could disrupt our operations or result in the loss or exposure of confidential or sensitive customer, employee, vendor, counterparty, or Company information; further, increased remote working arrangements have required enhancements and modifications to our IT infrastructure (e.g. Internet, Virtual Private Network, remote collaboration systems, etc.), and any failures of the technologies, including those provided by third-party service providers, that facilitate working remotely could limit our ability to conduct ordinary operations or expose us to increased risk or effect of an attack;

•indebtedness, which could make us more vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds and/or place us at a competitive disadvantage compared with competitors;