VARIABLE INTEREST ENTITES (Notes)

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

VARIABLE INTEREST ENTITY

KGSS-I is a special-purpose, wholly owned subsidiary of ONE Gas that was formed for the purpose of issuing securitized bonds to recover extraordinary costs incurred by Kansas Gas Service resulting from Winter Storm Uri. On November 18, 2022, the securitized financing was complete. KGSS-I’s assets cannot be used to settle ONE Gas’ obligations and the holders of the Securitized Utility Tariff Bonds have no recourse against ONE Gas. See Note 5 for additional information about the securitization financing.

KGSS-I is considered to be a variable interest entity. As a result, KGSS-I is included in the consolidated financial statements of ONE Gas. No gain or loss was recognized upon initial consolidation.

The following table summarizes the impact of KGSS-I on our consolidated balance sheets:


	December 31,		December 31,
	2023		2022
	(Thousands of dollars)
Restricted cash and cash equivalents	$	20,552	$	8,446
Accounts receivable	5,133		4,862
Securitized intangible asset, net	293,619		323,838
Current maturities of securitized utility tariff bonds	27,430		20,716
Accounts payable	394		3,204
Accrued interest	7,207		2,202
Securitized utility tariff bonds, excluding current maturities, net of discounts and issuance costs of $5.3 million and $5.9 million, respectively	282,506		309,343
Equity	1,768		1,681

The following table summarizes the impact of KGSS-I on our consolidated statements of income:


	Year Ended December 31,
	2023		2022
	(Thousands of dollars)
Operating revenues	$	48,677	$	5,769
Operating expense	(440)		(52)
Amortization expense	(30,219)		(3,521)
Interest income	696		6
Interest expense	(18,552)		(2,202)
Income before income taxes	$	162	$	—

The following table summarizes the amortization expense related to the securitized intangible asset expected to be recognized in our consolidated statements of income:


For the year ending:	(Thousands of dollars)
2024	$	27,843
2025	$	29,391
2026	$	31,025
2027	$	32,751
2028	$	34,572