Good day, and thank you for standing by. Welcome to the Acquisition of Riggs Distler Conference Call. At this time, all participants are in a listen-only mode. After this speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Mr. Ken Kenny, VP of Finance and Treasury. You may begin. Thank you, LaShawna. Thank you, everyone, for joining us this morning. Southwest Gas Holdings, via our Centuri subsidiary, will acquire Riggs Distler & Company, and management on this call will discuss the details of the transaction. The call is being broadcast live over the internet. For those of you who would like to access the webcast, please visit our website at www.swgasholdings.com and click on the call link. We have slides on the internet which will accompany our discussion. Our lawyers have asked me to remind you that some of the information that will be discussed contains forward-looking statements. These statements are based on management's assumptions, which may or may not come true, and you should refer to the language on slide two of our discussion materials for a description of the factors that may cause actual results to differ from our forward-looking statements. All forward-looking statements are made as of today, and we assume no obligation to update any such statement. As noted on slide three, today's management participants include Mr. John Hester, President and Chief Executive Officer of Southwest Gas Holdings, Mr. Paul Daily, President and Chief Executive Officer of Centuri Group, and Mr. Greg Peterson, Senior Vice President, Chief Financial Officer of Southwest Gas Holdings. Management will provide an overview of the transaction, including the strategic rationale for acquiring Riggs Distler. Following our prepared remarks, we are happy to take questions. We ask that you keep your questions to the topics related to the Riggs Distler acquisition. With that said, I'd like to turn the time over to John Hester. John? Thanks, Ken. For today's call, we provide an agenda on slide four. I will start out the call with a summary of the transaction, followed by some detail on the strategic rationale. Following me will be Paul Daily, who will give an overview of Riggs Distler and talk about how the transaction enhances our business mix and growth optionality of Centuri. Greg Peterson will follow Paul and talk about the financial overview, detailing how it's expected to be accretive to earnings and long-term growth. I'll conclude with a wrap-up on how easily Southwest Gas Holdings offers a compelling investment to shareholders. Turning to slide five, we have a summary of the transaction. An overview of the transaction includes the following components. This is an all-cash acquisition for $855 million. It has an implied EV to 2022 estimated EBITDA multiple of 8.4 times, which we believe is an attractive value compared to our publicly traded peers. It will be fully funded by new Centuri debt. The acquisition maintains a healthy balance sheet with ongoing commitment to investment-grade credit ratings. We expect it to provide earnings accretion in the first full year of operations. It supports Southwest Gas Holdings' dividend growth, and it is expected to close in the third quarter of this year. The strategic rationale for this acquisition is strong. It includes the facts that it aligns with our communicated strategy of expanding Centuri into the union electric utility distribution business. It builds on demonstrated Southwest Gas Holdings' ability to deliver long-term organic and inorganic growth. It maintains our focus on operations driving revenue from regulated utility cost-of-service customers. It results in a more comprehensive utility infrastructure services platform with growth in 5G telecom and renewables. It augments Southwest Gas's ESG profile with renewable project experience and access to offshore wind services, and targeting substantial revenue growth opportunity of $600 million through 2024. Moving to slide six, we believe Southwest Gas and Centuri continue to provide a well-aligned partnership. Our shared vision includes a regulated utility cost-of-service focus, an appreciation of the nuances of regulated utility models, a common cultural focus on safety and quality, infrastructure spending and replacement themes, shared market knowledge and utility relationships, operating scale best practices, and an extensive talent base, and shared procurement and cost efficiencies. The outcomes for investors include increased EPS and dividend growth, additional cash flow to support investments, improved scale and diversification, increased access to electric utility growth markets, enhanced ESG-related opportunities, a broader scope of investment opportunities, and increased future optionality. In summary, the acquisition provides greater scale, long-term growth, and strategic optionality. With that, I will turn the call over to Paul Daily, Centuri CEO, for further insights on the great value this acquisition brings Southwest Gas Holdings shareholders. Thank you, John. Our last acquisition, which has been very successful, was Linetec during November of 2018. This was our first entry into non-union electric utility distribution services markets. During these past three years, we've been able to double the size of Linetec. As John mentioned, we have followed our communicated strategy of expanding into the union electric utility distribution services market. In doing so, we've been very patient and focused on finding the perfect fit for combining it with our existing industry-leading utility services platform. We believe Riggs Distler is that perfect fit with us. As Riggs Distler meets all of our targeted acquisition strategy criteria, we are very excited about them joining the Centuri team later this year and together creating a premier diversified utility services group. As a unionized electric utility platform, Riggs Distler balances Centuri's electric service offering to both the union and non-union markets while, importantly, maintaining our low-risk, recurring, MSA-driven utility distribution services profile. Their geographic profile, or footprint, is extremely complementary in the Northeast and has virtually no customer overlap as far as services go. Riggs provides access to attractive service adjacencies with outsized growth prospects in electrification, 5G, and renewables. Equally important, there is a strong cultural and values alignment with a shared focus on safety, commitment to operational excellence, and delivering high-quality, reliable, and essential services to customers. There is a very great fit with strong synergies between the management team at Riggs and that of Centuri. Turning to slide eight to provide an overview of Riggs Distler, founded in 1909, next month Riggs Distler will have been in business for 112 years. They are a very experienced, trusted provider of MSA-oriented, unionized utility installation and repair services across the Mid-Atlantic and the Northeast. They generate strong margins across their differentiated service profile of electric utility, 5G, natural gas distribution, renewables, and more services for other services with 2021 estimated EBITDA margin of 12%. With its geographic strength in the Northeast and Mid-Atlantic, it has a diverse customer base and low customer concentration. No one customer accounts for more than 12% of revenue. It has strong relationships with over 150 unions and access to a strong base of 1,500 highly skilled employees. We were particularly attracted to its diversified business mix, which, as I mentioned earlier, and John mentioned in regards to ESG, includes 5G and renewable services. This will allow us to serve additional customers with an increased array of complementary capabilities and partner with those customers on their long-term programmatic infrastructure spending plans. Looking at their five business lines during 2021, it is estimated that the electric utility line will generate greater than 60% of their gross profit and a gross margin of 19%. These services include both overhead and underground distribution, substations—they can do the greenfield all the way from the ground up, both electrical and civil—and local area transmission systems for utility-owned systems. Important to note that they do not do high-risk cross-country electric transmission lines. Gas distribution for LDCs, again, they don't do high-risk cross-country pipelines. They stick to gas distribution work for LDCs. It's approximately 8% of the gross profit and includes pressure upgrade work, gas meter rebuilds, regulator stations, and ESG-related line LDC pipe replacement and methane reduction-related leak repairs. The third business line, which we're very excited about, is 5G, a very fast-growing market, about 7% of gross profit at 20% margins. Important to note that primarily all this work is placement of 5G equipment on utility poles for utilities in the hot zone. Thus, it requires the use of trained, electrical-skilled resources, which presents a high barrier to entry. Services also include long-term maintenance and repair. We look to cross-sell this to our non-union electric distribution side of the house. Renewables, another fast-growing market, is about 6% of gross profit. There are very significant multiple offshore wind opportunities along the Northeast for steel fabrication, assembly, substation, T-line, and distribution work. It's important to note that they don't work offshore. All the opportunities are onshore. It's also important to note that these are real opportunities that they've been on, and there's a strong possibility that several of them may come to fruition at a very near term. The other category primarily supports both utility work and electric renewables, but other low-risk industrial-type work, 17% of the gross profit and 13% margin. They do work like environmental matting, which provides temporary access roads and lay down areas for their own work, but also for their utility clients. It's interesting to note, too, on the renewables side in ESG, they've also built a civil and selective mechanical and electrical fabrication scope of work of a hydrogen facility for a large international client. Moving to slide nine and taking a closer look at RDC's customer base and footprint, you'll see that it has a blue-chip, long-tenured customer base with an average of 25 years across its top customers. That's consistent with Centuri's DNA, which is an average of 24 years with our customers. As I said earlier, there's virtually no crossover of services or customer overlap, which presents significant cross-selling opportunities. The customer concentration, which is in the dark blue, is in the Northeast, but as you can see, the company provides out-of-system storm work extending south and west as far as Texas. This storm work will be complementary to existing Linetec resources. While Riggs Distler's businesses presently focus in the Mid-Atlantic and Northeast regions, we see there's great potential for statewide growth into adjacent geographic markets. Some of those in the gray are where National Powerl ine presently operates for gas distribution. And in those, we can expand electric to new clients that are new clients, but we can also cross-sell electric to combo utilities where National Powerl ine already provides gas. Turning to slide 10, you can see the geographic breadth of the two companies combined later this year. Bringing the two platforms together will create a leader in North America with more than 10,500 employees that will serve customers across 39 states and three Canadian provinces. Reiterating the point I made earlier, the transaction will also enhance Centuri's service offerings for existing customers and enable it to serve additional customers with an increased array of complementary capabilities. Turning to slide 11, you can see that this acquisition reinforces our business profile, which is centered around low-risk, recurring, MSA-driven utility projects. With Riggs Distler & Company, our competitive position will be even stronger than it is today. As you know, one thing that differentiates us from our peers is that we do not have exposure to cross-country pipeline or cross-country electric transmission projects. Now with RDC, we have access to the high-growth renewables and 5G markets. We perform low-risk services primarily to utilities. We do not swing for home runs, do not swing for the fence. We focus on what is in our wheelhouse, which is singles and doubles. These services are those services that utilities formerly performed all in-house and some still do. We are, as Greg Peterson often says, practically as close to low risk as a utility as one can get without being an actual utility. As a result, we are positioned to continue our position as a high-growth EBITDA leader compared to our peers, with the lowest volatility compared to our peers. Turning to slide 12, which shows the transformation of Centuri from 2017 to when we close our RDC later this year. In the last four years, we've transformed Centuri from a low-growth infrastructure services company focused on gas utility customers to a high-growth, diversified utility services company. With the addition of National Powerl ine, which is based out of Arizona, Linetec, and now Riggs Distler & Company, we have doubled and significantly diversified our revenue base. We've increased our margins by over 300 basis points and our expected growth rate from low single digits to mid-double digits. Electric gross profit during 2021 on a pro forma basis would be approximately the same as gas: 41% of the total for electric, 42% for gas. With this transformation, Centuri today will be, at the end of the year, stronger, more diverse, lower risk, and more attractive part of Southwest Gas Holdings than ever before. Riggs Distler & Company is that perfect addition to Centuri. Turning to slide 13, RDC's value to the Centuri business is further reflected when you look at the significant revenue growth potential that John already mentioned. The acquisition offers significant incremental growth through access to new customers and contracts, cross-selling opportunities, geographic expansion, and opportunities in 5G and renewables. With the latter, as I mentioned, there are significant near and long-term opportunities in offshore wind. The growth opportunities we expect to generate an estimated $1 billion in revenue for RDC by 2024, representing a $600 million growth of revenue over that five-year period. As you can see, RDC provides compelling multi-pronged growth avenues that will create significant long-term value, not just for Centuri, but Southwest Gas Holdings shareholders as well, which makes RDC the perfect addition to Southwest Gas Holdings. I'm now going to hand the call over to Greg Peterson, who will go into detail on the financials of the transaction. Greg? Thanks, Paul. Turning to slide 14, you can see that we have put some bullet points together for you to talk about the financing plan that we will use at Centuri to make the Riggs Distler acquisition. Centuri has arranged through Wells Fargo a fully committed $1.3 billion financing package. That will include the $855 million acquisition purchase price, as well as the transaction and financing and working capital requirements. We will also refinance the existing Centuri debt under revolving credit facilities and establish new revolving credit facilities in the future. As was in the past, we will be using supported and stabilized financing package that will be secured by the assets of Centuri in this acquisition. The Centuri balance sheet has adequate capacity to fully finance this acquisition. There will be no requirements for SWX, the holding company, to issue equity or debt securities on behalf of Centuri to facilitate this transaction. No separate guarantees by SWX or the utility Southwest Gas Corporation. Centuri will be able to continue the cash dividends that they have paid to SWX in the past, thus facilitating SWX's ability to pay dividends to its shareholders. Some of the advantages of the Centuri-level debt financing is that the current market for infrastructure services debt financing, we believe, is very attractive, and we expect to have good, low-cost financing for this acquisition. It does maximize the capital structure at Centuri and at the holding company for earnings accretion. By financing the entire transaction at Centuri, we only have a single workstream to work with, thus helping us in ensuring that we will have a timely closing. In summary, SWX will have a healthy, consolidated balance sheet, and we do have a commitment to Southwest Gas Holdings and Southwest Gas Corporation to maintain investment-grade credit ratings. Turning to slide 15, some of the financial impacts and opportunities with this transaction. As you're aware, in our earnings conference call for the first quarter in May of this year, we provided EPS guidance along with line item guidance and some long-term expectations. Clearly, this transaction will have an impact on those items. I wanted to bring to your attention, and using some of the information that is in the original guidance, that certainly our 2021 EPS guidance will be impacted to some degree by this acquisition, including the net operating results of the acquisition of Riggs Distler once it's completed in the third quarter, the initial transaction fees, the legal, accounting, and advisory fees, the amortization of some of those financing fees, and then amortization of finite life intangibles. That information will become available to us and be more determinable once the acquisition is completed, and we will provide additional information on that. That amortization of finite life intangibles does include customer relationships, which Paul talked about, trade names, and contract backlog. We're very pleased with the relationship that Riggs Distler has with its utility customers and know that some of the value of this transaction lies in those customer relationships. The 2021 utility line item guidance, which included the expected increase in operating margin, the operating income as a percentage of revenues, and the COLI expectations and capital expenditures of approximately $700 million a year are not expected to change after the Riggs Distler acquisition. The Centuri line item guidance, however, will have some changes to it. Revenues originally were expected to increase 1-4% over 2020. With the acquisition, those numbers will be higher. Operating income, again, as part of a percentage of revenues, we will reassess that guidance. Certainly, interest expense with the financing of this acquisition at the Centuri level will change substantially. Net income expectations related to non-controlling interest may have some modifications. On the long-term expectations from the holding company, and we had provided two items for that. The equity issuances through the at-the-market or ATM program were estimated at $600 million-$800 million. We expect that that information will remain constant. The targeted dividend payout ratio of 55%-65% we believe will remain unchanged in 2021. For the utility, we talked about a $3.5 billion capital expenditure program over the next five years, again, equating to about $700 million a year. Rate-based growth expected to be 7.5% during that five-year period. That guidance, again, no changes are expected there. On the utility infrastructure services long-term expectations, the revenue growth range of 5%-8% we expect will be ratcheted up, and we will provide that information in the future. Operating income and the EBITDA levels, again, we will provide that updated guidance following the transaction close expected in Q3 of 2021. A couple of other items on the business mix impact. As you remember, Centuri and the infrastructure services group provided net income as part of the consolidated net income in the upper 20% range. We expect that now with the Riggs Distler acquisition to range in the low to mid-30% by 2022. Also, the credit rating impacts we have met with the rating agencies, and I think you may see some things from them over the course of the next few days while they assess this transaction and the potential impact it may have on the credit ratings of SWX and potentially SWG. Again, as I noted at the bottom of that page, we will provide updated guidance following the transaction close expected in Q3. With that, I will turn the call back to John to wrap us up for the day. John? Thanks, Greg. Turning to slide 16, we believe the acquisition materially enhances the ESG profile of Centuri and Southwest Gas Holdings. Riggs Distler contributes to an attractive Southwest Gas Holdings ESG profile, which includes our tracking and reducing of direct carbon emissions, helping customers reduce carbon emissions, making sure we keep our employees safe, our engagement in our local communities, and our focus on diversity, equity, and inclusion. Incremental enhancements with the instant transaction include the adoption of Centuri's greenhouse gas reduction goal, important opportunities in renewables, which include things like EV charging infrastructure, smart meters, fuel cells, RNG, battery storage, microgrids, the offshore wind services that we mentioned earlier, a continued commitment to safety, and Riggs Distler's engagement in the local community. Moving to slide 17. In summary, we believe the Riggs Distler acquisition offers a compelling investment opportunity for shareholders. It underscores our commitment to creating long-term shareholder value, including earnings per share growth from complementary utility-focused businesses, dividend support, and cash flow production, maintaining a healthy investment-grade balance sheet and enhanced ESG profile. Centuri brings value to Southwest Gas Holdings shareholders over a range of future scenarios through continued transaction integration and execution of our growth plan, enhanced diversification from a service offerings and geographic footprint perspective, and improved strategic optionality. Our near-term focus areas will be on transaction execution and financing, successful onboarding of Riggs Distler, delivering growth for Centuri and Holdings, and our ongoing shareholder engagement. With that, I'll now return the call to Ken. Thanks, John. This concludes our overview of the Riggs Distler acquisition. For those who have accessed our slides, we also included an appendix with additional slides that include other pertinent information about this transaction. These slides can be reviewed at your convenience. Our operator, LaShawna, will now explain the process for asking questions. Ladies and gentlemen, at this time, if you would like to ask a question, please press star followed by the number one on your telephone keypad. Again, it is star one for questions. We'll pause for just a moment. Once again, ladies and gentlemen, if you have a question, please press star one. You have a question from the line of Ryan Levine with Citi. Good morning. Good morning. Congratulations on the transaction. I guess a couple points. Given that this increases the size of Centuri, how are you thinking about the longer-term strategic plan for that platform? Does this set the stage for considering a spin or IPOing of that business? Ryan, this is John. We think that the Centuri platform continues to be a really good partner with Southwest Gas. We think that the focus on our utility services, whether they're regulated or unregulated, the opportunity to lean into electrics, renewables, and 5G with increased earnings and cash flows, we think it's a really good partner. While it does increase the optionality for Centuri looking down the line, we think it's a good partner, and we plan on keeping it and continuing to grow it. We think there's a lot of continued growth promise in the organization. Okay. On the financing plan, given it's completely debt financed, how does this position the company on equity over the coming years? Is there an expectation that there'll be some capital raised in the more junior part of the capital structure to right-size the balance sheet? Yeah, Ryan, this is Greg. As we mentioned, it is all debt financed, and the ATM usage that we've talked about previously for the utility, we expect to remain the same. As always, though, we will remain opportunistic as we watch the stock prices as well as the debt markets, and we will find the optimal way to do this. Currently, we have a fully committed debt financing in place, and we will watch for opportunities in the future to do that. It is really expected, though, that this Riggs Distler acquisition will provide significant cash flows to pay down the debt that was incurred in the acquisition, and we will use that methodology to bring us back closer to the 50/50 debt and equity mix that we had at holdings previously. In your prepared comments, there was a lot of discussion around offshore wind exposure. Can you be a little more specific around what types of projects that you identified in that revenue synergy or revenue growth tied to offshore wind? Yeah, Ryan, this is Paul. I really don't want to and can't mention the client because of NDA, but they're very big, and Riggs' scope will be entirely onshore, doing fabrication assembly of steel that then is turned over to the offshore contractors that install it offshore. In addition, they will, from basically the high watermark, be participants in doing routine—or not routine, but normal electric distribution substation and T-lines, which T-lines for renewable works are usually a lot smaller. Type work. It's very good, and it's very big opportunities in the near term and long term. Okay. Thank you for that. And maybe just the last question for me. This is a sizable transaction for your business. Should we look for more to leverage this platform for more incremental add-on acquisitions, or is this more discreet in nature given the attributes of this asset package? Ryan, this is John. I think that this transaction really puts in place that piece of the puzzle that Paul referred to earlier. We've been talking to our investors for a couple of years on how we wanted to move into a unionized electric contractor that helped us expand our geographic approach, and this definitely does that 100%. I think looking forward, we'll continue to look for opportunities to add additional companies if we think that they serve the interests of our customers and our shareholders. I don't expect that this is necessarily a stage where we're going to significantly ramp up our activity with other companies. Appreciate the color. Thank you. You have a question from the line of Vedula Murti with Hudson Bay Capital. Okay. Good Good morning. Morning. You said that the implied EBITDA multiple for 2022 on the transaction was 8.4 times. That implies that the EBITDA for 2022 would be approximately $100 million. On 2021, on the $560 million of revenue, 12% EBITDA margin there, it is about $57 million for 2021. Is that correct in terms of that type of those numbers and that type of an increase earlier? Yeah. This is Greg Peterson. We provided that information. I think you have done a good job with the calculations, and we do expect sizable growth between 2020 and 2021, and then, as you mentioned, between 2021 and 2022. Paul mentioned in his slides and his discussion a sizable $600 million type change over the four years on the revenue side, and we think that that is very achievable, and we look forward to significant growth at Riggs Distler. And for DD&A, what's the incremental? What's the associated DD&A and kind of the term of DD&A that we should use? You're talking about depreciation? Yes. Depreciation and amortization. Yeah. Yeah. One of the things that's going to come into play, and we will certainly provide more information on that, including some pro forma information in the subsequent SEC filing, that will set forth the increases in depreciation both from the acquisition and then from some of these intangibles that I've mentioned earlier. All that information is not yet available to the company, but as we complete the acquisition, we will provide the incremental costs both on an interest expense side as well as a depreciation and amortization side. That will be forthcoming subsequent to the acquisition. I guess what I'm trying to think about is I'm trying to think about depreciation amortization life on an $855 million asset, basically speaking. Are we talking like a 15-20 year type of depreciation period, or what type of life or how should we think about? Yeah. If we're talking about the regular equipment, I would guess that most of that is going to be in a shorter time frame, maybe more in the 7-10 year type time frame. Again, the intangibles that I mentioned, customer relationships and those things, could extend beyond that period. Again, more information to come once we actually make the acquisition and have done the allocation of the purchase price. Thank you. You have a question from the line of Stephen D'Ambrisi with Granite Lane. Hi guys. Thank you very much for taking my question. Congratulations on the transaction. Can you just give a little bit of flavor? It's kind of like what Vedula was asking, but you gave EBITDA margin. Can you talk at all to operating margin? I mean, that's what you guys have typically guided to on the Centuri side. And so can you give a flavor as to what the operating margins look like at this business? Just start there. Yeah, Stephen, this is Greg. Again, I think in this early part of the process, we wanted to provide that high-level guidance of what the EBITDA multiples would be to give the market an opportunity to do this while we flush out all the detailed information that will come in the operating income side of this, including depreciation and amortization that I mentioned earlier. We will be providing that, and as I mentioned, we will provide pro forma financial information as we're required to under the SEC regulations once this transaction closes. I think you'll be able to then see pro forma basis what depreciation and the operating income will be. Prior to that, we opted to provide just this high-level guidance to help the market in their assessment. Okay. Can you give a flavor at all as to what level the committed financing is at from an interest expense standpoint? Is it around where the utility borrows at? Is there a material premium to it? I mean, obviously, you were borrowing before on your revolver, so I assume the interest cost steps up, but just trying to get an order of magnitude. Yeah. This is Greg again, Steven. We will be meeting with the rating agencies, Centuri will, on a standalone basis, and that will be the assessment in working with them what level that this debt will be rated. I do not believe it would be a surprise to the market that this level of rating will be something less than the utility, and that is why we will be working with the rating agencies, as Paul mentioned. I guess as he referenced to me, Centuri is about as close to being a utility as you can be without being a utility. We are optimistic, and we are working with the rating agencies to get the best financing terms possible. We believe that this industry, the infrastructure services industry, has a strong position right now, and we expect that to have some positive influences on the level of interest expense. Until we can flush those things out up through the close, expected in Q3, I do not think we have any other information other than to say we will work towards the lowest interest rate possible and the most favorable terms. Just so I am clear, is this bank lines and term loans, or are you issuing bonds? Yeah. I am sorry. Yeah. This will be term loans. This will be term loans through a bank consortium that will be led by Wells Fargo. Okay. Okay. That is all I had. I appreciate the time. Great. Thank you. Thanks. Ladies and gentlemen, there are no additional questions in queue at this time, I'll turn it back over to management for closing remarks. Thank you, LaShawna. Thank you all for your time today. This concludes our call, and we appreciate your participation and interest in Southwest Gas Holdings. Have a great day. Ladies and gentlemen, this does conclude today's conference call. You may now all disconnect. Everyone, have a great day.