Our company operates approximately 42,500 miles of pipeline and other natural gas distribution facilities.

To My Fellow Shareholders and Employees:

At ONE Gas, 2014 was a year of firsts. As a new stand-alone, publicly traded company, it was the first year we were able to devote our full efforts to becoming a premier natural gas distribution company – one that is committed to creating exceptional value for our stakeholders.

We had a major challenge in year one to completely separate ourselves from our predecessor, ONEOK. Rather than spending the next few years relying on ONEOK for information technology services through transition agreements, we made it our goal to dedicate the capital dollars and the hours necessary to stand on our own in the first year. Not only was this accomplished, but we did it with time to spare and on budget. This was vital for us to move forward on a stand-alone basis, so we can fully concentrate our resources on the future of our business.

This year was a first for me as well – my first year as the Chief Executive Officer. I’ve been asked frequently how it felt to step into this role, and I have to say, it’s been rejuvenating. In numerous employee meetings, their questions and comments demonstrate a shared passion for our business and our customers. Our employees’ enthusiasm has shown me the power of people, and the things we can accomplish when we work together. It is humbling to be in this role, and I’m truly enjoying the opportunity and experiences every day.

Our company operates approximately 42,500 miles of pipeline and other natural gas distribution facilities. The separation from ONEOK has enabled us to get back to our roots as a regulated natural gas distribution business. This increased focus has made a major impact, as our 2014 results demonstrate. We believe that ONE Gas is well positioned to maintain this momentum. Natural gas is well positioned to be competitive against other fuel options for decades to come. Right now, natural gas has approximately a 3-to-1 cost advantage compared with electricity. We have a high-quality product that allows people to heat their homes, cook their meals, dry their clothes and enjoy hot water – life’s essentials. And that means we are creating a better tomorrow for our customers.

As we go forward, we have five priorities that we are challenging ourselves to execute on with the same enthusiasm we experienced in our first year as a new company. These priorities include:

• Safety: Safety has always been our top priority and is our most important core value. ONE Gas will always make sure that the safety of our employees, customers and communities comes before everything else.

• High-performing Workforce: It all starts with our people. We are dedicated to attracting and retaining the right people for the right jobs. Our more than 3,300 employees also will benefit from highly engaging employee and leadership development programs.

• Leveraging Technology: This is going to be a big year for us when it comes to implementing software and new technologies. Our plans include new devices for our operations employees that will increase efficiency and productivity; and adding a smart phone application that will offer more self-service options for our customers.

• Regulatory: We strive to continue constructive relationships with regulators that will support our common goal of providing safe, reliable and cost-effective natural gas service to our customers and the communities we serve.

• Growth: In addition to growing by continuing to invest in our systems, we also are seeking opportunities to deliver natural gas to compressed natural gas stations and other alternatives that would contribute to incremental growth regulated transport revenue. We believe that focusing on these priorities will guide us toward a successful future, while providing our customers with life’s essentials.

Pierce H. Norton II

President and Chief Executive Officer,
ONE Gas, Inc.

April 1, 2015

2014 Highlights

Our net income for 2014 exceeded our initial expectations and is expected to grow an average of 5 to 8 percent annually between 2014 and 2019.

At the close of 2014, our stock was trading at new highs. We delivered a total shareholder return of approximately 25 percent in 2014, outperforming our peer group average and the S&P MidCap 400 Utilities Index. Shareholder returns reflect solid operating and financial results and the continued growth we believe is ahead – all of this while maintaining our strong investment grade credit ratings.

For our more than 2 million customers in Oklahoma, Kansas and Texas, we continued our tradition of providing safe, reliable service at competitive costs.

Our total natural gas volumes delivered increased from 2013. The overall average number of customers also grew by 0.6%. Our commitment to customer service was recognized at Oklahoma Natural Gas, which was named a most trusted brand – in both the Southern region and nationally – in the 2014 Utility Trust Brand & Customer Engagement Study conducted by Cogent Energy Reports, the syndicated division of Market Strategies International.

We worked together to define the company’s new mission, vision and core values.

We also created a new brand identity, including logos, and set up our new corporate headquarters in Tulsa, Okla. We’ve entered 2015 with confidence in our business strategy and our employees who will execute on our strategic goals.