Welcome to Southwest Gas Holdings' Fourth Quarter And Full Year 2024 Earnings Conference Call. Today's call is being recorded, and our webcast is live. A replay will be available later today and for the next 12 months on the Southwest Gas Holdings website. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the prepared remarks. If you would like to ask a question at that time, please press star one on your phone. I will now turn the call over to Justin Forsberg, Vice President of Investor Relations and Treasurer of Southwest Gas Holdings. Thanks, Konstantin, and hello, everyone. Thanks for joining the call today. This morning, we issued and posted to Southwest Gas Holdings' website our fourth quarter and full year 2024 earnings release and the associated Form 10-K. The slides accompanying today's call are also available on Southwest Gas Holdings' website. We'll refer to those slides by number throughout the call today. Please note that on today's call, we will address certain factors that may impact 2025 earnings and discuss some longer-term guidance. Some of the information that will be discussed today contains forward-looking statements. These statements are based on management's assumptions and what the future holds, but are subject to several risks and uncertainties, including uncertainties surrounding the impacts of future economic conditions and regulatory approvals. This cautionary note, as well as a note regarding non-GAAP measures, is included on slides two and three of this presentation in today's press release and in our filings with the Securities and Exchange Commission, which we encourage you to review. These risks and uncertainties may cause actual results to differ materially from statements made today. We caution against placing undue reliance on any forward-looking statements, and we assume no obligation to update any such statement. As shown on slide four, on today's call, we have Karen Haller, President and CEO of Southwest Gas Holdings, and Rob Stefani, Chief Financial Officer of Southwest Gas Holdings, as well as Justin Brown, President of Southwest Gas Corporation, and other members of the management team available to answer your questions during the Q&A portion of the call today. I'll now turn the call over to Karen. Thanks, Justin. Thank you for joining us today to discuss the Southwest Gas Holdings' results and outlook. Starting with slide five, Southwest Gas Holdings continues to press forward on our transformational strategy of becoming a premier, fully regulated natural gas utility. Following the successful Centuri IPO last April and recent onboarding of Chris Brown as the new Sentry CEO, we continue to monitor market conditions with respect to our separation strategy options, and we remain very focused on completing the separation of Sentry in a manner that is beneficial to shareholders. I'm extremely proud of the team's dedication and commitment throughout 2024, as we made significant progress positioning the utility for long-term success and growth. We advanced our regulatory strategy and are seeing positive impacts as we recover investments in enhancing safety, reliability, and our ability to meet the needs of our growing customer base. We have also begun to see tangible benefits of our utility optimization strategy. The utility finished the year with record annual operating margin performance and the second straight year of a return on equity over 8%. Customer growth and demand remain strong, and the entire Southwest Gas team is focused on safely addressing the needs of our customers, investing in the communities we serve, and delivering value for our shareholders. We are strategically deploying capital and investing in our operations so that we can meet our customers' demand for safe, reliable, and affordable energy solutions. Southwest Gas has strong momentum heading into 2025, and we expect utility net income to land within the range of $265-$275 million for the full year. We expect net income growth will be driven by margin improvements related to our regulatory strategy, as well as our continued cost management efforts. Looking further out, we are planning for robust capital spending driven by economic activity in our service territories, which we expect to drive strong rate based growth. You can see our refreshed guidance metrics on the slide, and I'll discuss our short and long-term guidance expectations in more detail later on the call. I also want to reiterate our commitment to further improving our earned utility return on equity, maintaining investment-grade balance sheets, and paying competitive dividends to our shareholders. As you can see on slide six, we achieved all our 2024 strategic priorities. We strengthened our balance sheets across the enterprise, increasing liquidity and preserving financial flexibility while meaningfully advancing our regulatory strategy. As it relates to plans for Centuri's full separation, we onboarded a CEO at Centuri and continue to gauge market conditions for executing disposition transactions. As a reminder of the remaining separation options, we may ultimately separate the business through a series of taxable sell-downs or share exchanges, which exit path could include some combination thereof. The successful execution of a sell-down or share exchange is contingent on favorable market conditions, so we have currently preserved the alternative of a tax-free spin. We expect our significant $1.5 billion net operating loss balance could serve as an offset to any taxable transactions. As a reminder, if we do execute a taxable transaction, the ability to execute a tax-free spin will no longer be possible. However, regardless of the form of an initial taxable transaction, whether it be a sell-down or share exchange, both of those options would remain on the table for further separation as we further downsize our ownership beyond the initial transaction. We remain committed to separating Sentry, and we will provide further updates on timing and structure when available. On the right-hand side of the slide, you can see another priority in 2025 is our financing plan, which potentially includes the need to extend either all or a portion of the existing $550 million term loan facility at the Holdco, and expected issuances of less than $100 million of new equity under our existing ATM program. Both of these items are contingent on successful execution of Sentry separation plans, and some or all of these capital markets needs could be avoided pending the form of the Sentry separation. Justin Brown will discuss our regulatory progress and strategy in more detail in a moment, but I will note that while we have much ahead of us in 2025, we feel we are on track to achieve our regulatory and operational priorities. As noted on slide seven, our strong balance sheet provides us with the flexibility to be thoughtful in our approach to capital investments and our efforts to deliver shareholder value. I'll highlight a few of our team's achievements on slide seven. At the utility, we continue to see strong growth as a result of strong economic activity that continues to drive significant in-migration, with about 41,000 new meter sets added during the last 12 months. At the end of 2024, we had more than $360 million of cash on hand across the enterprise, enabling us to honor our commitments and execute our 2025 strategy. We remain excited about the future of the company. Now to Justin. Thanks, Karen. On slide nine, you'll see an overview of the progress we made on our regulatory strategy. In early 2024, we completed our general rate case in Nevada with a positive outcome, receiving approval to start recovering on the nearly $300 million of investments we've made to ensure safe and reliable service to our customers, which resulted in a revenue increase of approximately $59 million, which represents 98% of our request after consideration to proposals on depreciation rates and cost of capital. At Great Basin, refreshed rates went into effect in September, subject to refund, and were later adjusted in November to reflect settlement rates, and we anticipate a final decision being issued by April. Our $50 million California case is progressing on schedule and as expected. We are scheduled to receive intervenor testimony in April with a hearing this summer and new rates effective in January of 2026. I'll discuss Arizona in more detail on the next slide, but I'm pleased with the progress we've made on refreshing rates and minimizing regulatory lag in each of our jurisdictions as we remain steadfast in our commitment to working collaboratively with our regulators on constructive outcomes. Turning to slide 10, our Arizona rate case continues to progress on schedule, with the ALJ issuing a recommended opinion and order last week. We intend, excuse me, to continue to work with the commission staff and file comments reiterating the fair and balanced nature of the stipulated issues that were agreed upon at the time of hearing, including a $96 million revenue increase and an ROE of 9.65% and a fair value increment of 0.73%. The commission is scheduled to vote on our case March 27th. You may recall our application included a proposal to implement a capital tracker program referred to as our System Integrity Mechanism, or SIM. The proposal, if accepted, will allow us to implement a surcharge each year to recover the non-revenue-producing investments we made in the prior year. These are investments primarily related to the safety and reliability of our system, which represents approximately 40% of the company's annual capital investments in Arizona each year. Given the circumstances of the inability of a staff witness to testify last November, we are appreciative of the parties and the administrative law judge's decision to hold a separate hearing on the SIM rather than to further postpone our entire case. You'll see on the slide that the commission staff has been supportive of our proposal on this mechanism, and a final separate hearing on the SIM is scheduled for May. Given the intent of the mechanism and mechanically how it is designed to work, we do not believe a May hearing will impact our desire to utilize the mechanism to reduce regulatory lag beginning in 2026 if the mechanism is ultimately approved by the commission. Consistent with the Arizona Corporation Commission's expressed desires to reduce regulatory lag, the commission released a constructive policy statement that would allow utilities to file formula rate plans in future rate cases as an option to reduce regulatory lag. I refer you to the commission statement that was issued last December for full details, but we believe this is another constructive positive step that the commission has taken to address timelier cost recovery, reduce regulatory burden, and enhance administrative efficiency in Arizona. Turning to slide 11, as Karen noted, economic activity and demand for natural gas service remains strong throughout our service territory, and we continue to invest in the communities in which we operate. I've highlighted for you on previous calls the activity in Arizona in the advanced manufacturing space, as well as the potential throughout our service territories for additional data center growth. The growth in Arizona in these sectors has driven the Arizona Corporation Commission earlier this month to open a docket to address resource adequacy of natural gas infrastructure and storage in the state. These, as well as continued growth in the entertainment, hospitality, manufacturing, warehouse and logistics, and mining sectors, continue to drive significant in-migration throughout our service territories. The economic activity and development associated with these projects is expected to drive further upside to our already strong customer growth that Karen noted during her opening remarks today. You'll see on slide 11 the population growth projections for Arizona and Nevada from S&P Global are expected to continue to outpace the national average over the next five years. For Southwest Gas, we believe this economic development activity and resulting population growth will translate to more meter sets for residential and small commercial customers, which currently represents 85% of our existing customer mix. We continue to see greater than 90% of all new construction built in our service territories becoming Southwest Gas customers. With that growth comes the need for increased infrastructure investment in order to support both new and existing customers as we respond to requests for new gas service and work to ensure the safety and reliability of our entire system. Based on our recently refreshed capital expenditures and rate-based growth models, we now expect to invest about $4.3 billion over the next five years to support safety, reliability, and economic development across our service territory. We currently expect these investments to translate to a compound annual growth rate and rate base of 6%-8% from 2025 to 2029. About 50% of this planned spending is needed for safety and reliability, and approximately 30% of the projected plan relates to economic development and new business growth. And with that, I'll turn the call over to Rob, who will review our financial performance for the year. Thanks, Justin. On slide 13, we provide a consolidated earnings walk on an adjusted basis. During 2024, the utility benefited from rate relief and continued customer growth. This improvement was partially offset by higher interest expense and lower other income, both of which are primarily related to changes in regulatory balances associated with the PGA mechanism, as well as modest increases in O&M and depreciation and amortization, all of which are discussed in detail on the next slide. Sentry's consolidated results were lower for 2024, as 2023 had benefited from higher offshore wind work and above-average natural gas bid work that did not recur in 2024. 2024 also saw unforeseen reduction in the volume of work under MSAs in Sentry's natural gas business lines. Partially offsetting these decreases, Centuri saw lower interest expense over the period due to IPO-related debt reduction, as well as the benefits from a securitization transaction during the second half of 2024. In addition to the impacts from the removal of MountainWest in 2023, the holding company had lower overall operating expenses, partially offset by higher interest expense compared to 2023, primarily associated with higher variable interest rate impacts associated with the term loan and the amounts outstanding on the holding company revolving credit facility. In the appendix, we provide a reconciliation of adjustments by operating company. The vast majority of the 2024 adjustments relate to the amortization of intangible assets and receivable securitization-related costs at Sentry and separation-related transaction adjustments, while in 2023, adjustments also include the impacts from the loss on the sale and previous integration of MountainWest, as well as consulting fees related to utility optimization. Moving on to slide 14, you will see the year-over-year performance drivers for our utility, Southwest Gas Corporation. In 2024, utility operating margin increased by $72.5 million compared to 2023. This improvement was driven primarily by $66 million of increased rate relief resulting from prior investments in Nevada and California. In addition, we saw $12 million of improved margin as a result of customer growth throughout our service areas. The remaining increase largely relates to the combined impacts of certain infrastructure and similar tracking mechanism surcharge components, which, combined with the variable interest expense adjustment mechanism in Nevada, resulted in $9 million higher operating margin this quarter. These increases were partially offset by about $7 million of lower regulatory amortization, of which a comparable decrease is reflected in amortization expense. We also were impacted by about $11 million of out-of-period adjusting entries that relate to net cost of gas sold in prior years, the largest of which relates to a previously disclosed in 2023 $8 million benefit that did not recur in 2024. O&M was relatively flat on a per-customer basis year-over-year. The modest net increase of $9.2 million, or roughly 2%, is less than inflation observed in the broader macroeconomic measures over the same period. The overall increase in O&M primarily related to compensation components and leak survey line locating activities. These modest increases were partially offset by a reduction in external contractor and professional services costs, which primarily related to cost optimization consulting fees that occurred in 2023 and were adjusted out of net income in our presentation of earnings last year. We remain confident that we will be able to achieve our goal of keeping O&M costs nearly flat on a per-customer basis through the forecast period, though we expect these results could be non-linear. The $9.3 million increase in depreciation, amortization, and general taxes was largely associated with the 8% increase in average gas plant in service compared to 2023, partially offset by the decreased amortization related to regulatory account balances noted earlier in the discussion of margin changes. Other income decreased approximately $16 million, primarily driven by a $17.2 million decrease in interest income related to less carrying charges associated with lower regulatory account balances, notably the deferred purchased gas cost balances, which flipped from a receivable balance from customers of nearly $550 million in December 2023 to a net liability balance of about $230 million at this year's end. Interest expense at the utility increased by $12.4 million from 2023, primarily due to interest incurred on the over-collected balance of the PGA, as well as regulatory treatment timing related to the utility's industrial development revenue bonds and a lower level of debt related to AFUDC. Partially offsetting these impacts was a decrease in interest related to the payoff of a $450 million term loan in April of 2023. Moving on to slide 15, we provide our 2025 financing plan for both Southwest Gas Holdings and Southwest Gas Corporation, which, for simplicity, assumes consolidation of Sentry for the entirety of the year. To the extent Sentry ceases to be consolidated in 2025, we plan to adjust this as needed depending on the timing and successful execution of further separation market events. Southwest Gas Holdings finished 2024 with more than $360 million of cash on hand and more than $1 billion of liquidity on a consolidated basis following a full collection from utility customers of previously deferred natural gas costs, as well as Sentry's paydown of debt using proceeds from the IPO. We highlight that the holding company balance sheet could improve further if divestiture of Sentry shares results in increased cash at Southwest Gas Holdings, which will depend on the form of separation and market conditions, among other things. We expect cash flow from operations to more than fund the entire capital expenditure program forecasted in 2025. In addition, based on the strength of our balance sheet and successful recent refinancing efforts, the only capital markets needs over the next 12 months, depending on remaining Centuri separation execution form, relate to less than $100 million of equity needs in 2025, which we would expect to be covered through the ATM. We also expect a potential extension of a portion or all of the term loan facility at the holding company to beyond the July 31st maturity date. We also plan to amend and extend the holding company revolving credit facility sometime during 2025 ahead of its December 2026 maturity. Of note, we do not currently foresee the need for any significant debt capital markets new issuance activity at the utility until the spring of 2026. As Karen noted earlier, Southwest Gas Holdings remains committed to paying a competitive dividend to our stockholders. We plan to pay the same dividend in 2025, which we expect would result in a competitive payout ratio. We will continue to balance factors such as projected capital requirements, impacts to credit ratings, the competitiveness of the dividend yield, economic conditions, and other factors, and we'll review the dividend policy for any changes post further separation execution and deconsolidation of Sentry. At Holdings, we reiterate our plan to target a solid investment-grade balance sheet. Moving to slide 16, we take a look at our balance sheet strength and our commitment to maintaining an investment-grade profile. On the left-hand side, we walk through net debt by operating company. We finished 2024 with more than $360 million of cash, largely due to the full collection of the previous deferred purchased gas costs from the winter of 2022 to 2023. As a result, at the utility, the PGA balance has now flipped to a liability balance of about $230 million as of December 31st, 2024. This is compared to the asset balance of nearly $550 million that I mentioned a moment ago in 2023. In the appendix on slide 24, additional details are provided on the PGA balance. We continue to expect the large utility cash balance to significantly obviate the need to pursue additional financing in the near term. Back to you, Karen. Thanks, Rob. Our 2024 results illustrate the progress we continue to make executing our strategy, and we are committed to building on that momentum throughout 2025 and beyond. On slide 18, we show our utility guidance for 2025, along with our refreshed forward-looking guidance at the utility. We currently expect 2025 utility net income to be in the range of $265-$275 million. We believe that our regulatory efforts and strong regional economic outlook in our service territories will drive 2025 results above that which we saw in 2024. When 2024 earnings are normalized for the benefits we received from higher-than-anticipated interest income from the impacts of elevated cash and PGA balances, one-time costs, and COLI, our forecasted earnings for 2025 result in an 8%-9% growth rate above 2024. In addition, we expect significantly higher margin growth through regulatory proceedings as a result of the investments we've made for the benefit of our customers to be partially offset by the impacts of costs from inflation, higher depreciation and amortization expenses, higher expected interest expense related to variable rate bonds, and forecasted year-over-year tax impacts. Partially due to anticipated economic activity, we are expecting 2025 utility CapEx to be approximately $880 million, which would be a modest increase above 2024 CapEx. Looking further out, we expect compound annual growth rate for net income at the utility to fall within the range of 6%-8% from 2025 to 2029. While we continue to expect that the regulatory cycle will result in non-linear net income growth over the forecast period, our regulatory strategy and our plan to achieve a flat O&M per customer trend over the same period are expected to be important components of our growth story going forward. You can find additional long-term drivers in the appendix of our presentation on slide 26. We have also provided our forward-looking CapEx spending plans, now showing a five-year forecast of about $4.3 billion from 2025 to 2029. We expect our rate-based compounded annual growth rate to be in the range of 6%-8% over that five-year period. Each of our forward-looking forecasts' compounded annual growth rates are calculated off of a 2025 base year. As Rob mentioned, we will continue to pay the same dividend while we work to effectuate the further separation of Centuri. Before we open the call up to questions, I want to point to slide 19 and emphasize that our teams are focused on executing our strategic priorities, delivering strong financial results, and providing exceptional service to our customers. At Southwest Gas Holdings, we are confident in our path forward as a premier pure-play natural gas utility. We plan to continue delivering steady organic rate-based growth through strong regional demand dynamics, as well as earnings growth through financial discipline, operational excellence, and constructive regulatory relationships. We'll continue to execute the next steps to fully separate Sentry to create a more attractive value proposition for stockholders. With that, I'd like to open the call for questions. At this time, if you would like to ask a question, please press Star 1 on your telephone keypad. You may remove yourself from the queue by pressing Star 2. Your first question comes from the line of Chris Ellinghaus from Siebert Williams. Please go ahead. Hey, everybody. How are you? Good morning, Chris. Good morning. Karen, you talked about the non-linear growth. With the formula rates prospectively in Arizona, do you see some convergence towards a more linear kind of relationship over time? I think when I speak to the non-linear, certainly under our current regulatory structure, it's non-linear, and I think if we're able to get more of a formula rate in place, absolutely, it would be more of a linear growth, I would expect. Okay. And Karen, you also mentioned - I can't remember what language you used - but market conditions. I presume that means price for Sentry. Is that what you meant? And the stock's somewhat depressed at the moment. Does that factor into your timing thinking right now? You want to see how the new CEO does, I guess, would be the way to put it? Certainly positively, since we do have onboarded Chris Brown, and he has been with the company for just about three months now, and we think that is a real positive and one of the first steps that was important towards moving towards our next steps on separation. I would just indicate that we're watching and looking at all of the market conditions that would impact and assessing our different options on a go-forward basis. I would not limit it to just a price consideration. Okay. Given that you're in an evaluation mode, does that suggest that the process could extend into next year? We'll continue to watch the market conditions. As I've indicated before, we'll update you as soon as we have more that we can share with shareholders. But I will emphasize that we are very focused on moving forward with our separation. Okay. Justin, you talked about gas adequacy. Do you have an opinion at this point? And given sort of prospectively the load growth in your region, you certainly can expect a lot of new gas generation. So does that represent an upside in your view to sort of what your longer-term CapEx looks like today? Hey, Chris. Yeah, I mean, I think it can. A lot of times, some of the generation is sited closer to the interstate facilities, so less of us. But I think it's that continued migration across our service territory through that economic development that trickles down into our core business. And I think just the general sentiment of moving into a direction where natural gas is a good thing for our economy, it's a clean burning fuel, I think just that general sentiment is also helpful. Does sort of your perspective on the growth and how it will affect residential and small commercial sort of factor into what the ACC is getting at also, or are they more thinking about the large load customers? I think it's in all of the above, Chris. Okay. I Okay. I appreciate it. I think it's just the need for affordable, reliable, sustainable energy, and viewing natural gas as a key component of that across the board. Okay. Thank you. As a reminder, if you'd like to ask a question, please press Star 1 on your telephone keypad. Your next question comes from the line of Stephen D'Ambrisi from Ladenburg. Please go ahead. Hi. Thanks very much for taking my question. Good morning. Good morning. Hey, Steven. Hey, everyone. I just had two quick ones. The first one is just, does the updated utility net income CAGR assume any impact from the pending SIM mechanism or a future filing, like subsequent GRC filing under the ACC formula rate policy statement? Hi. This is Rob Stefani. Yeah, the range doesn't include the formula, and we don't have the SIM tracker in that range as well. Okay. I guess the follow-up there would be just, I understand SIM, that's obviously still outstanding, but on the formula rate, is that just, are you looking to see, I guess, how do you see that moving forward? Are you looking for one of the electrics to file under the plan, or is that going to be tested somehow, or will there be a rulemaking, or what's the next steps there to get you comfortable with that structure? Hey, Steven, it's Justin. Yeah, I mean, I think we're comfortable now. It's just a timing issue, right? We're in the last inning of our rate case, and so it's something we would look to as part of our next case. I know UNS Gas, who just filed the end of the year last year, amended their rate case as a result of the policy statement. I know APS is looking to file, I think, a rate case later this year, I believe. So I'm sure they would include a proposal. So I think it's just a timing thing from our perspective, kind of given where we were in flight with our pending case and kind of the timing of when that policy statement came out. But I think directionally, it's very positive. Obviously, we'll be monitoring those dockets to see if there's anything we can learn for how this is actually implemented on a go-forward so that when we get to the point of our next case and an opportunity to include a proposal, we'll have the benefit of kind of seeing how this is shaking out over time. Okay. And then I guess just from a high level, 6%-8% utility net income CAGR is in line with the rate-based CAGR. So just from the highest level, that would kind of imply that earned ROEs are flat across the projection period. And I know you've talked about focus on improving earned ROEs. So am I right to think that to the extent some of these mechanisms kind of move forward or you see a future filing under a formula rate plan, we should see earned—that would be a driver of earned ROE improvement in the future? Yeah. I mean, I think obviously if we get a tracker and take it step by step, if we get a tracker in Arizona in the near term, it would start to take effect beginning in 2026, just given the timing of the tracker mechanic. But yes, as we receive kind of regulatory outcomes that are favorable, whether it be a tracker or formula, we would expect the ROE to improve and move more toward a higher ROE and higher implied growth rate. And was there a second part to your question? No, that was it. Thank you. I appreciate it. Thanks very much for the time. That was all I had. This concludes the question-and-answer portion of today's conference. I would now like to turn the call back over to Justin Forsberg for closing remarks. Thanks, everybody, for joining the call today. And for your interest in Southwest Gas, we look forward to seeing many of you soon. This concludes today's Southwest Gas Holdings fourth quarter and full year 2024 earnings call in webcast. You may disconnect your line at this time. Have a wonderful day.