Southwest Gas Holdings, Inc. Q1 FY2025 earnings call

• Regulatory strategy: Advanced regulatory strategy with constructive outcomes in Arizona and Great Basin rate cases, working collaboratively with regulators to support growth. - Centuri separation: Committed to separating Centuri with options like taxable sell-downs, share exchanges, or tax-free spin-offs; now eligible to file Form S-3 to speed up market transaction execution. - Financial position: Strong balance sheet in 2025 with over $400 million cash on hand and over $1 billion liquidity, providing flexibility for capital investments. - Business growth: Strong economic activity in service territory led to about 40,000 additional new meter sets in the last 12 months.

During the first quarter, Southwest Gas finished with record net income and slightly lower quarter-over-quarter O&M expenses. Centuri's results benefited from a higher volume of work under master services agreements, increased bid work and storm-related activity, but were partially offset by a reduction in offshore wind project revenues. Southwest Gas had more than $400 million of cash on hand across the enterprise as of the first quarter of 2025, with more than $1 billion of liquidity. Southwest Gas contributed about 85% of the customer mix with residential and small commercial customers, while Centuri's results were impacted by non-controlling interest effects at the consolidated level.

• Reaffirmed 2025 utility net income guidance range of $265 million to $275 million. - Expect robust capital spending driven by safety, reliability, and economic activity in service territories. - Finished the quarter with a trailing 12-month ROE of 8.2% after two consecutive years of over 8% ROE.

• Uncertainties surrounding the impacts of future economic conditions and regulatory approvals, which may cause actual results to differ materially from forward-looking statements.

Q: What's the current status of your plans to exit Centuri? And more specifically, has there been any change to interest levels from potential investors in the recent weeks?

A: With respect to Centuri, we're committed to the separation. We have several options, including the ability to file an S-3 now that we're a year past the IPO, and will continue to monitor market conditions.

Q: With the influx of data centers and semiconductor manufacturing into Arizona, can you guys speak to the incremental CapEx, investment opportunities demand presents and potentially how you're engaging with regulators to ensure timely recovery and alignment with long-term rate base growth?

A: From our perspective, we have structures in place to deal with these. We have line extension policies and practices supported by commissions, and will continue to monitor and make adjustments as needed.

Q: The Great Basin open season, is that binding? And then how much CapEx would be associated with that and over what time frame?

A: That is a binding open season. It's open through the end of the month, and we'll have a better indication of future CapEx changes to guidance after it closes.