Slides
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Earnings Conference Call First Quarter 2025 Results May 12, 2025
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| 2 Forward-Looking Statements Unless context otherwise requires, in this presentation, references to “we”, “us” and “our” are to Southwest Gas Holdings, Inc. (NYSE: SWX) (“Southwest Gas Holdings” or the “Company” or “SWX”) together with its current and former consolidated subsidiaries, which include, among others, Southwest Gas Corporation ("Southwest Gas", “SWG”, “Utility” or “Natural Gas Distribution” segment), Centuri Holdings, Inc. and Centuri Group, Inc. (“Centuri” or “Utility Infrastructure Services” segment), Great Basin Gas Transmission Company (“Great Basin” or “GBGTC”), and Corporate and Administrative (“HoldCo”). This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, without limitation, statements regarding the Company and the Company's expectations or intentions regarding the future. These forward-looking statements can often be identified by the use of words such as "will", "predict", "continue", "forecast", "expect", "believe", "anticipate", "outlook", "could", "target", "project", "intend", "plan", “pursue”, "seek", "estimate", "should", "may" and "assume", as well as variations of such words and similar expressions referring to the future, and include (without limitation) statements regarding our expectations for our utility infrastructure services and natural gas operations, estimated future capital expenditures, projected rate base growth, increasing demands from new semiconductor manufacturing facilities and data centers and related economic activity, O&M per customer expectations, our 2025 financial guidance and expected value drivers, 2025 – 2029 financial guidance and expected value drivers, 2025 financing plan, expectations with respect to future dividends, expectations with respect to a separation of our remaining interests in Centuri, and the future performance of the Company, Southwest Gas Corporation and Centuri. The Company can provide no assurances that a separation of our remaining interests in Centuri will occur on the expected timeline or at all. For purposes of any forward-looking consolidated financial information at Southwest Gas Holdings, full consolidation of Centuri has been assumed in this presentation. A number of important factors affecting the business and financial results could cause actual results to differ materially from those stated in the forward-looking statements. These factors include, but are not limited to, the proposedtransactionstructureand timing of a separationof our remaininginterestsin Centuri, the timing and impact of executing (or not executing) on such transaction alternatives, the timing and amount of rate relief, changes in rate design, customer growth rates, the effects of regulation/deregulation, the timing and magnitude of utility optimization opportunities, tax reform and related regulatory decisions, the impacts of construction activity at Centuri, the potential for, and the impact of, a credit rating downgrade, future earnings trends, inflation, increasing interest rates, sufficiency of labor markets and similar resources, seasonal patterns, current and future litigation, the costs and effect of stockholder activism, and the impacts of stock market volatility. In addition, the Company can provide no assurance that its discussions about future operating margin, operating income, COLI earnings, interest expense, and capital expenditures of the natural gas distribution segment will occur. The Company does not assume any obligation to update the forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise. Forward-looking statements are based on assumptions which we believe are reasonable, based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions are subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including without limitation, those discussed under the heading “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosure about Market Risk” in the Company’s most recent Annual Report on Form 10-K and in the Company’s, Centuri’s, and Southwest Gas Corporation’s current and periodic reports, including our Quarterly Reports on Form 10-Q, filed from time to time with the SEC, and other reports that we file with the SEC from time to time. New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time to time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. The statements in this presentation are made as of the date hereof, even if subsequently made available on our website or otherwise. We do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. Safe Harbor Statement May 12, 2025
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| 3 This presentation contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These non-GAAP measures include (i) Southwest Gas Holdings adjusted earnings (loss) per share, (ii) Southwest Gas Holdings adjusted net income (loss), (iii) Corporate and Administrative adjusted earnings (loss) per share, (iv) Corporate and Administrative adjusted net income (loss), (v) utility infrastructure services adjusted earnings (loss) per share, and (viii) utility infrastructure services segment adjusted net income (loss). Management uses these non-GAAP measures internally to evaluate performance and in making financial and operational decisions. Management believes that its presentation of these measures provides investors greater transparency with respect to its results of operations and that these measures are useful for a period-to-period comparison of results. Management also believes that providing these non-GAAP financial measures helps investors evaluate the Company’s operating performance, profitability, and business trends in a way that is consistent with how management evaluates such performance. The amortization of certain acquisition intangible assets applies to our utility infrastructure services segment adjusted net income (loss) and therefore applies to adjusted net income at the Southwest Gas Holdings consolidated level as well. We believe this adjustment is a common adjustment in the infrastructure services industry and that this adjustment allows investors to more clearly compare earnings performance with Centuri peer performance; as such, beginning with the first quarter of 2024, the Company has presented this adjustment now that Centuri has completed its IPO and has begun as a public company. For comparison, the Company has recast adjusted net income for the first quarter period of 2024 in this presentation,to add amortization of certain intangible assets in order to align the presentation of adjusted net income between periods, including related tax effects. We do not provide a reconciliation of forward-looking Non-GAAP Measures to the corresponding forward-looking GAAP measure due to our inability to project special charges and certain expenses. Following Centuri’s IPO, we are no longer reporting Utility InfrastructureServices EBITDA and Adjusted EBITDA. Centuri will report those metrics in its own earnings materials. Non-GAAP Measures May 12, 2025
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Speakers and Agenda ROB STEFANI CFO SOUTHWEST GAS HOLDINGS KAREN HALLER PRESIDENT AND CEO SOUTHWEST GAS HOLDINGS PRESENTATION AGENDA Strategic and Business Update Regulatory and Economic Update Financial Update Guidance and Outlook SPEAKERS JUSTIN BROWN PRESIDENT SOUTHWEST GAS CORPORATION
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SWX: Becoming a Premier, Fully Regulated Natural Gas Utility Positioned for Continued Growth and Success » Safely delivering reliable, sustainable and affordable energy solutions to growing, high-demand service territories » Clear strategic focus on optimizing utility performance » Working collaboratively with regulators to drive constructive regulatory outcomes to complement strong organic rate base growth » Partnering with stakeholders to support investment opportunities in emerging technology energy initiatives » Committed to pursue pure-play utility strategy through disposition of remaining interest in Centuri Committed to Delivering Value for SWX Stockholders » Expect 2025 utility net income to fall within $265 - $275 million guidance range » Utility targeting 6.0% to 8.0% net income growth and 6.0% to 8.0% rate base growth from 2025- 20291 » Improving earned return on equity through constructive regulatory outcomes, utility optimization, and cost management efforts » Delivering competitive dividend to stockholders » Maintaining strong investment grade balance sheet Notes: 1. Net income and rate base CAGR: base year 2025 | 5| 5May 12, 2025May 12, 2025
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| 6 Notes: Checkmark denotes items that have been completed 1 System Integrity Mechanism (“SIM”) 2 At-the-Market (“ATM”) Advancing SWX’s 2025 Strategic Priorities May 12, 2025 Centuri Separation Further Advance Separation Pending 2025 Financing Plan SWX $550M Term Loan Extension Pending Centuri Exit Path 2Q 2025 SWX <$100M Equity Issuance Under ATM2 Program Pending Centuri Exit Path 2Q – 4Q 2025 SWX $300M Revolving Credit Facility Extension 3Q – 4Q 2025 2025 Utility and Regulatory Strategy AZ Rate Case Approval 1Q 2025 GBGTC Rate Case Approval 1Q 2025 AZ SIM1 Capital Tracker Approval 3Q 2025 CA Rate Case Approval 4Q 2025 Utility Optimization Executing Planned Initiatives Ongoing Complete ✓ ✓Complete
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Limited capital markets needs through the end of 2025; finished the quarter with $406 million in consolidated cash Corporate and administrative expenses for the first quarter included $9.8 million in interest expense related to outstanding borrowings and $0.6 million in Centuri separation costs Non-GAAP adjustments primarily related to the amortization of intangible assets and Centuri separation costs GAAP Net income of ~$143 million, $7.1 million quarter-over-quarter increase Approximately 40,000 new meter sets added during the last 12 months, leading to a 1.8% customer growth rate over the same period AZ general rate case approved (~$80.2 million revenue increase), including an increase in allowed return on equity (9.84%) and an allowed equity capitalization of 48.5% Operations and maintenance (“O&M”) expense decreased by 1.1% over the first three months of 2025 compared with the same period in 2024, reflecting utility optimization and cost discipline Advancing regulatory strategy: AZ general rates approved; GBGTC rate case approved; AZ SIM settlement with Staff and RUCO; and CA rate case in progress Cash balance at March 31, 2025 of $386 million Delivering Strong Results | 7 | 7 May 12, 2025
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Regulatory and Economic Update
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| 9 Current Rate Case Activity SWG remains committed to a purposeful regulatory strategy intended to minimize regulatory lag May 12, 2025 Notes: 1 Additional details of bifurcated SIM hearings provided on Slide 11 2 Updated to reflect actual costs as of August 2024; original revenue increase requested was $16 million 3 Updated to reflect authorized revenues from the 2025 margin and North Lake Tahoe lateral attrition adjustments; original revenue increase requested was ~$50 million Docket # 23-09012 Filing Date Sept. 11, 2023 Requested ROE 10.00% Cap Structure 50% Debt / 50% Equity Revenue Increase ~$74 million Requested Authorized Order Date April 8, 2024 Effective Date April 15, 2024 ROE 9.5% Cap Structure 50% Debt / 50% Equity Revenue Increase ~$59 million Docket # G-01551A-23-0341 Filing Date Feb. 2, 2024 Requested ROE 10.15%, 0.81% FVI Cap Structure 50% Debt / 50% Equity Revenue Increase ~$126 million Requested Authorized Docket # RP24-514-000 Filing Date March 6, 2024 Requested ROE 13.05% Cap Structure 44% Debt / 56% Equity Revenue Increase ~$13 million2 Requested Nevada Arizona1 California Docket # A2409001 Filing Date Sept. 5, 2024 Requested ROE 11.35% Cap Structure 50% Debt / 50% Equity Revenue Increase ~$44 million Requested Procedural Schedule Intervenor Testimony April 4, 2025 Rebuttal Testimony May 9, 2025 Hearing June 10, 2025 Rates Effective January 2026 Order Date March 27, 2025 Effective Date March 27, 2025 ROE 9.84% Cap Structure 51.5% Debt / 48.5% Equity Revenue Increase ~$80.2 million Authorized Order Date March 3 , 2025 Effective Date September 6, 2024 ROE 11.95% Cap Structure 50% Debt / 50% Equity Revenue Increase ~$9.6 million
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| 10 Notes: 1 Docket Number: G-01551A-23-0341, which can be viewed on the Arizona Corporation Commission website 2 Staff testimony supports full 12-month PTY adjustments, while amounts in staff testimony included estimates through August 2024 3 Decoupled rate schedules consistent with those currently authorized 4 Fair Value Increment (“FVI”) Rate Case Activity Arizona Rate Case Outcome On March 27, 2025, the ACC approved an increase in rates effective on approval. Southwest Gas and Staff Stipulation1 ACC Final Decision Target Equity Ratio 48.5% 48.5% ROE 9.65% 9.84% Fair Value Return on Rate Base 0.73% 0.0% Rate Base $3.3 billion2 $3.2 billion2 Post-Test Year (“PTY”) Rate Base Adjustments 12 months2 12 months2 Revenue Increase ~$95.9 million ~$80.2 million Notes » Continuation of full revenue decoupling3, Tax Expense Adjustor Mechanism, Property Tax Deferral Mechanism » ~$33 million increase in O&M » Test year from 11/1/22 – 10/31/23 with $229 million of rate base requested in the post test year period of 11/1/23 – 10/31/24 » No significant changes to rate design » Discontinuation of the current Customer-Owned Yard Line program May 12, 2025 » The $80.2M revenue increase represents 64% of the original request » Adjusted for FVI4 exclusion, the $80.2M increase equates to 74% of the original ask » No disallowance on rate base or O&M » Full 12-month post-test year rate base adjustment Before March 2025 Effective March 2025 Equity Ratio 50% 48.5% Return on Equity 9.30% 9.84% Fair Value Increment 0 0 Rate Base ~$2.6B ~$3.2B Regulatory Updates - Arizona
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| 11May 12, 2025 Key Objectives • Enhance Safety • Minimize Regulatory Lag • Minimize Customer Bill Impact • Reduce Frequency of Rate Case Filings Proposed System Integrity Mechanism (SIM) Encompasses all required safety-related infrastructure investments that account for ~40% of Southwest Gas’ Arizona dedicated infrastructure Capital Budget. Rate effective each April, subject to refund, beginning April 2026 Southwest Gas, Staff, and RUCO published an unopposed settlement agreement ahead of the May hearing Settlement Agreement Summary Capital Tracker Mechanism Regulatory Updates – Arizona SIM Procedural Schedule Settlement Hearing May 2025 Expected Decision 3Q 2025 Rates Effective April 2026 » First SIM rate filing expected March 1, 2026 » Southwest Gas agrees to file a new general rate case no later than three years after the first SIM Surcharge Application » Rate base prudency determination provided in the first rate case following the initial SIM filing » SIM charge capped at 2.0 cents per therm per year » SIM efficiency credit - the annual revenue requirement of each SIM filing is reduced by 5% with full amount eligible for collection in the following general rate case » Anticipated final decision from Commission on proposed SIM settlement agreement no later than 8/1/2025
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» ~$16 million increase in O&M » Proposed consolidation of its Northern CA and South Lake Tahoe rate jurisdictions » Damage Prevention Costs tracker » No significant changes to rate design » Infrastructure Reliability and Replacement Adjustment Mechanism (“IRRAM”) | 12 Regulatory Update - California Notes: 1 Application 24-09-001, which can be viewed on the California Public Utilities Commission website 2 Post-test Year Margin (“PTYM”) adjustment for 2027-2030 3 Customer-owned yard line Rate Case Activity California Rate Case Filing Summary In September 2024, SWG filed a rate case1 requesting a revenue increase of ~$50 million, updated to ~$44 million as of February 2025 with rates anticipated to become effective January 2026. Target Equity Ratio 50% 48.5% Return on Equity 11.35% 9.5% Rate Base $720 million $709 million Proposed Revenue Increase ~$43.7 million ~$26 million Procedural Schedule Intervenor Testimony April 4, 2025 Rebuttal Testimony May 9, 2025 Hearing June 10, 2025 Requested ~$285 million increase in rate base, or 65% IRRAM Programs totaling ~$200 million over 5-year rate case cycle • Targeted Pipe Replacement • School COYL3 Replacement • Meter Protection • Annual Leak Survey with Advance Mobile Leak Detection Notes » 2026 Test Year » 2.75% PTYM2, with adjustments for excess accumulated deferred income taxes and major pipeline replacements (~$40 million) » Continuation of the automatic trigger mechanism May 12, 2025 Rates Effective January 1, 2026 Southwest Gas Public Advocate’s Office
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| 13 $4.1 $4.5 $5.0 $5.4 $5.8 $6.4 $6.9 2019A 2020A 2021A 2022A 2023A 2024A 2025E $4.3B Capital Investment to Support Growth Plan Highlights 50% in Safety & Integrity Management 30% in New Business Rate Base2 ($ in billions) 5 Yr. Rate Base CAGR ~9% (2019-2024) Strong Economic Growth Projected Across Service Areas Notes: 1 S&P Global Capital IQ, April 16, 2025 2 Rate base amounts reflect estimated total investment in facilities to provide utility service, less estimated retirements, depreciation, and deferred taxes plus working capital as of 12/31 of each year depicted. This is different than our authorized rate base, which is the rate base approved by our regulatory bodies in our most recent rate cases and that is reflected in current rates • From 2025 to 2030, projected population growth of 4.40% in Arizona and 3.42% in Nevada, compared to the 2.40% average growth in the US1 • Continued growth in First-Time Meter Sets Targeting 50/50 capital structure 3 Strong Demand Dynamics Supporting Value Creation ~40k First-Time Meter Sets during the twelve months ended March, 31 2025 May 12, 2025 6.0 – 8.0% Rate Base Growth4 Estimated 2025 – 2029 3 2025E rate base assumes CapEx at 2025 guidance (~$880 million) 4 Rate base CAGR: base year 2025
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Financial Update | 14
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$1.37 $1.65 $0.09 $0.18 $0.02 Q1 2024 SWG Centuri HoldCo Q1 2025 Adjusted Earnings Per Share1 Favorable Unfavorable May 12, 2025| 15 1Q 2025 SWX Adjusted Diluted Earnings Per Share Walk Financial Highlights • SWG received higher margin from rate relief and customer growth; partially offset by higher interest expense, higher D&A, and lower other income • Centuri earnings impacted by higher volume of work under MSAs2, bid work and storm work as well as lower interest expense; partially offset by a reduction in offshore wind • HoldCo earnings impacted by lower overall operating expenses and interest expense Notes: table may not add due to rounding 1 Adjusted SWX income and adjusted EPS for the three months ended March 31, 2024 and the three months ended March 31, 2025, adjust for strategic review and Centuri separation costs, and the amortization of intangible assets (both of which exclude amounts related to noncontrolling interests) 2 Master Services Agreements (“MSAs”)
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$135.8 $142.9 $38.9 $1.5 ($9.8) ($8.8) ($8.2) ($6.5) 1Q 2024 Operating Margin O&M D&A and General Taxes Other Income Net Interest Deductions Income Tax 1Q 2025 GAAP Net Income ($ in millions) Favorable Unfavorable NATURALGAS DISTRIBUTION SEGMENT Operating Margin1 • $27 million – Combined rate relief • $5 million – Customer growth • $3 million – Nevada VIER2 • $5 million – Regulatory amortization (offset in D&A below) Year-over-year net income (loss) drivers include: (parentheses indicate unfavorablenet income drivers) favorable impact unfavorable impact May 12, 2025 | 16 1Q 2025 SWG GAAP Net Income Interest • Driven by higher variable debt costs, including interest expense associated with regulatory account balances, including the PGA4 mechanisms, as well as industrial development revenue bonds that are amortized through interest expense Highest quarterly net income on record Notes: Chart may not add due to rounding 1 Remaining variance primarily relates to miscellaneous revenue and customers outside of the decoupling mechanism 2 Variable Interest Expense Rate Mechanism (related to Clark County Industrial Development Revenue Bonds) 3Increase in plant was attributable to pipeline capacity reinforcement work, franchise requirements, scheduled pipe replacement activities, and new infrastructure 4Purchased Gas Cost Adjustment (“PGA”) D&A and General Taxes • Increase in depreciation reflective of a 7% increase in average gas plant in service since the first quarter of 20243 • ($5 million) – Higher amortization associated with regulatory account recoveries (offset in operating margin above) Other Income • ($5 million) – Decrease in values associated with company- owned life insurance • ($4 million) - Decline in interest income related to carrying charges associated with the elevated deferred PGA4 balance O&M • O&M decrease resulting in flat year-over-year O&M per customer
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May 12, 2025| 17 2025 Financing Plan $1.0 $0.9 $0.1 $0.2 $1.1 $1.1 Sources Uses Sources & Uses ($ in billions)1 CapEx at SWG & Centuri $0.9 $0.9 $0.1 $0.2 $1.1 $1.1 Sources Uses Sources & Uses ($ in billions)1 Cash Flow from Operations (includes Centuri) Dividend to stockholders2 Cash Flow from Operations CapEx Dividend to SWX Assumptions » Centuri assumed to be consolidated through 2025 » All SWX financing assumptions pending further Centuri separation transactions » Significant cash previously collected from PGA at Southwest Gas » Beginning cash and cash flow from operations expected to fully fund capital plan with modest equity from SWX; small SWG revolver draws toward end of the year » SWX expects to issue less than $100 million of equity in 2025, all through existing ATM program, pending Centuri exit path » No significant debt financing or refinancing expected at Southwest Gas in 2025 » Amend/extend all or part of the Southwest Gas Holdings $550 million Term Loan facility as well as its existing revolving credit facility in 2025 Notes: 1 Amounts may not add, due to rounding 2 All future dividends will be subject to approval by the Board of Directors both before and following the full completion of the separation Equity infusion from SWX & modest SWG revolver usage Equity issuance
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Balance Sheet Strength May 12, 2025 | 18 Credit Ratings and Outlook3 Moody’s Standard and Poor’s Fitch Ratings Outlook Ratings Outlook Ratings Outlook Baa2 Stable BBB- Positive BBB Negative Baa1 Stable BBB Positive A- Stable Ba3 Stable B+ Credit Watch Developing Not Rated Not Rated Net Debt1 ($ in billions) Total Debt Cash Net Debt PGA2 Balance Net Debt less PGA $0.7 $0.0 $0.7 n/a $0.7 $3.5 $0.4 $3.1 $(0.3) $3.4 $0.9 $0.04 $0.8 n/a $0.8 SWX and SWG are committed to maintaining an investment grade profile Notes: table may not add due to rounding 1 As of 03/31/2025 2 PGA Balances include purchased gas costs net of amounts received/refunded to or from customers 3 Issuer ratings shown for Southwest Gas Holdings and Centuri; Senior unsecured long-term ratings shown for Southwest Gas Corporation 4 Centuri cash as of 03/31/2025: $15.3 million
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Guidance and Outlook
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| 20 Notes: 1 Assumes $3 - $5 million COLI earnings 2 Net Income and Rate Base CAGR: base year 2025 3 5-year Capital Expenditures 2025 – 2029 Net Income1 $265 - $275 million CapEx ~$880 million Net Income2 (CAGR) 6.0% - 8.0% Rate Base2 (CAGR) 6.0% - 8.0% CapEx3 $4.3 billion 2025 Guidance Forward-Looking Guidance 2025 – 2029 base yr 2025 Reaffirmed Reaffirmed SWG 2025 and Forward-Looking Financial Guidance May 12, 2025
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Strengtheningstrategic flexibility throughthe separation of Centuri Maintaining balance sheet flexibility and investment grade credit ratings Positive regulatory developmentsand strong organic rate base growth Optimizing the utility to deliver value through financial discipline, operationalexcellence, and constructive regulatory relationships Safely delivering reliable, sustainable, and affordable energy solutions for new and existing customers, with a dedicated focus on service Capital expenditureplan supported by increased economic developmentand customer growth throughoutour service areas May 12, 2025 | 21 Positioned to Unlock Significant Stockholder Value Well positioned to continue delivering sustainable energy options for our customers Limited capital markets needs Optimizing utility performance
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May 12, 2025 | 22 Contact Information Investors & Analysts Justin S. Forsberg Vice President of Investor Relations & Treasurer (702) 364-3135 justin.forsberg@swgas.com Media Sean Corbett Manager, Corporate Communications (702) 364-3310 corpcomms@swgas.com
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Appendix
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Maintaining a Competitive Dividend $1.18 $1.32 $1.46 $1.62 $1.80 $1.98 $2.08 $2.18 $2.28 $2.38 $2.48 $2.48 $2.48 $2.48 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A 2023A 2024A 2025E SWX Annual Dividend Per Share Upon completion of the full separation of Centuri, Southwest Gas Holdings plans to target a dividend payout ratio in line with gas utility peers Notes: 1 All future dividends will be subject to approval by the Board of Directors both before and following the full completion of the separation • Southwest Gas Holdings is committed to paying a competitive dividend • Southwest Gas Holdings has paid a dividend every year since 1956 • Upon completion of the separation of Centuri, Southwest Gas Holdings plans to target a dividend payout ratio in line with gas utility peers1 • Until the planned separation of Centuri has been completed, Southwest Gas Holdings expects to continue to pay its regular quarterly dividend1 • Expect to size post-separation dividend off of future run rate earnings considering expected rate relief in Arizona, California, and Nevada1 | 24May 12, 2025
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Utility Optimization Progress | 25May 12, 2025 SWG remains committed to its culture of continuous improvement and optimization and actively identifies opportunities to generate long-term benefits for all stakeholders and to support its goal of achieving flat O&M per customer over the current forecast period. Accelerating our Pursuit of Excellence: Striving to be a leader in safety, quality, customer service, operational performance, and cost management. Initiative playbook contains several initiatives intended to drive value and long-term improvement across the organization. Initiative Playbook Expecting to increase O&M savings to achieve nearly flat O&M per customer over the forecast period. Anticipating Results NNV Strategy Alignment & Change Leadership Southern Nevada Solar Projects at our Corporate, North & South Facilities Huddle board deployment in Victorville, CA Construction Department 2025 Focus Areas » Financial Systems Strategy & Consolidation » Large Customer Portals & Customer Interaction Phone System » Ongoing Utility & Resource Optimization » Application Rationalization & Software Optimization » Warehouse Optimization » Lean Operating System Development » Digital Field Forms Enablement » Accounts Payable Automation » Data Management Strategy Development » AZ Solar
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May 12, 2025 | 26 Summary of Gas Cost Balances and Recovery Mechanisms Notes: charts and tables may not add due to rounding 1 PGA refers to FERC Acct. 191 2 Using a 12-month rolling average, to account for changes in the cost of gas SWG purchased on behalf of its customers, with no pr ofit to SWG 3 The gas cost rate is adjusted monthly based on a one -month forecast cost of gas plus the difference in the prior month’s over or under recovery of the PGA balance State Dec. 2024 Receivable (Payable) Balance ($ in millions) March 2025 Receivable (Payable) Balance ($ in millions) Carrying Cost Rate Gas Cost Rate Adjustment Frequency AZ $(47.0) $(48.1) 1-Year Treasury Rate Monthly2 NV $(195.3) $(241.1) Weighted Average Cost of Capital Quarterly2 CA $13.9 $7.0 Commercial Paper Rate Monthly3 Total $(228.3) $(282.2) PGA1 Receivable Balance and Recovery Mechanism Summary
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May 12, 2025 | 27 SWG Net Income Drivers and Assumptions Drivers 2025 2026 - 2029 Rate Relief Arizona rates effective March 2025 GBGTC rates finalized March 2025 Customer Growth Anticipate customer growth of ~1.4% per year O&M Targeting flat O&M per customer D&A Increased YoY CapEx to support continued customer growth as well as one-time projects Expect declining capital to depreciation ratio over the forecast period Financing Assumptions Targeting 50/50 utility capital structure over time Assumes rate case filings and outcomes in line with historical cadence and experience
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| 28 Regulatory Update - Nevada Rate Case Activity Notes: tables may not add due to rounding 1 Docket 23-09012, which can be viewed on the Public Utilities Commission of Nevada website 2 As of November 30, 2023 Certification. Request at test year was $69.8M 3 Weighted average of Southern and Northern Nevada, based on application as filed Nevada Rate Case1 Outcome Summary Dollars in millions Proposed Revenue Increase2 $73.9 Depreciation Expense ($6.8) Cost of Service Adjustment ($1.6) Stipulated Revenue Increase ~$65.6 Cost of Capital Adjustment ($6.5) Authorized Revenue Increase $59.1 ~98% of request after depreciation adjustment and before adjustments to cost of capital ~$297 million increase in rate base Cost of Capital Requested at Certification Authorized Target Equity Ratio 50% 50% Return on Equity 10.00% 9.5% Cost of Debt 4.51% NNV 4.50% SNV Southwest Gas’ Position SWG Nevada3 $191.95 Peer Group4 $254.43 Authorized $59 million revenue increase in Nevada; rates became effective in April 2024 O&M per customer May 12, 2025 4 As of December 31, 2022, utilizing average of peer group natural gas utilities (ATO, NJR, NWN, OGS, SR, & NI)
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| 29 Regulatory Update – GBGTC Rate Case Activity Requested Approved Target Equity Ratio 56% 50% Return on Equity 13.05% 11.95%3 Pre-Tax Rate of Return 11.18% 9.76%4 Rate Base $206 million (~$99 million increase) $191 million (~$55 million increase) Proposed Test Year Revenue Increase ~$13 million2 ~$9.6 Million Notes » An all-party black-box settlement was filed December 26, 2024 » Estimated annual margin increase of approximately $9.6 million and a pre- tax rate of return of 9.76%3 » Presiding Administrative Law Judge filed a Certification of Uncontested Settlement January 20, 2025 recommending approval without modification Notes: 1 Application RP24-514-000, which can be viewed on the Federal Energy Regulatory Commission website 2 Updated to reflect actual costs as of August 2024; original revenue increase requested was $16 million 3 Blackbox settlement – as calculated by GBGTC 4 Compared to 9.90% pre-tax rate of return currently authorized May 12, 2025 GBGTC Rate Case Outcome1 On March 3, 2025, FERC approved an increase in rates.
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| 30 SWG Regulatory Update Other Regulatory Activity | 30 Arizona Gas Cost Balancing Account (GCBA) In response to lower purchased gas costs, Southwest Gas filed an application in January to return an over-collected GCBA balance of ~$46 million to customers. The ACC approved the request in March, with rates effective April 2025. Nevada Annual Rate Adjustment Filing The Public Utilities Commission of Nevada approved an all-party settlement for the Company's 2024 Application in April authorizing a statewide increase of ~$27 million. Rates will become effective July 1, 2025. California Fort Irwin Expansion Project CPUC approved the expansion of service territory in Southern California to accommodate the construction of an ~21-mile pipeline to extend service to the Army’s National Training Center at Fort Irwin. California Hydrogen Demonstration Project Application pending before California Public Utilities Commission for approval of a hydrogen- blending demonstration project in Northern California. Nevada Service Territory Expansion Application In response to customer demand, Southwest Gas filed an application with the Public Utilities Commission of Nevada seeking authority to expand its Northern Nevada service territory within a county that it presently serves and is contiguous to its existing service territory. The PUCN approved the Stipulation in March 2025. Great Basin 2024 – Expansion Project In April 2024, the FERC issued the order approving GBGTC’s application to abandon and replace certain pipeline facilities and grant a CPCN1 to construct and operate certain facilities to expand the transportation capacity of the system. The current project estimate is ~$15 million and is now expected to be placed in service in 2025. Damage Prevention Cost Tracking Mechanism Filing Application filed with the Public Utilities Commission of Nevada in December 2024 requesting regulatory accounting treatment for line locate activity-related expenses and to establish the Damage Prevention Cost Tracking Mechanism. If approved, Southwest Gas will track the level of expense actually incurred to the level of expense established in the most recent general rate case and recover from or return to customers the difference. Spring Creek Expansion Compliance Stipulation The Public Utilities Commission of Nevada approved an all-party settlement supporting the continued expansion of natural gas infrastructure in Spring Creek, Nevada. The Company's application was required to review the progress of the project to ensure continuation was in the public interest. Great Basin Binding Open Season In response to inquiries related to available capacity and changing market needs, Great Basin posted notice of a Binding Open Season, for a 2028 Expansion, which considers expanding its existing transmission facilities downstream of Ruby Pipeline's Opal Valley Receipt Point with Great Basin to meet additional and/or changing market needs. The Binding Open Season, from January 28, 2025, through April 30, 2025, to determine the level of interest of existing and potential shippers for new or additional firm transportation service was extended through May 28, 2025 to allow bidders to propose various in-service dates. May 12, 2025 Arizona Natural Gas Infrastructure and Storage Docket In February of 2025, the Arizona Corporation Commission opened a docket to inquire into the expansion of natural gas infrastructure and storage in Arizona to address resource adequacy of natural gas infrastructure needed to meet growing demand. Great Basin 2026 – Expansion Project In April 2025, GBGTC filed an application with the FERC seeking approval to abandon and replace certain pipeline facilities and grant a CPCN to construct and operate certain facilities to increase firm transportation capacity on its Carson, North Tahoe and South Tahoe Laterals. The current project estimate is ~$19 million and is expected to be placed in service in 2026. Nevada Senate Bill 417 Senate Bill 417 would require the Public Utilities Commission of Nevada to adopt regulations to establish procedures for a natural gas utility to apply to the Commission for approval of an alternative rate-making plan which includes performance-based rates, formula rates, multi-year rate plans, an earnings sharing mechanism, decoupling mechanism, or any other rate-making mechanism authorized by the Commission by regulation. The bill passed unanimously out of the Senate Committee on Growth and Infrastructure and out of the full Senate in April 2025 and is on track to be considered by the Assembly. Notes: 1 Certificate of Public Necessity and Convenience (“CPCN”)
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May 12, 2025 | 31 Economic Impact of Semiconductor Manufacturing and Data Centers Electric infrastructure constraints driving potential interstate pipeline expansion inquiries AI data center power demands substantially larger than traditional data centers We believe that in Arizona and Nevada » Regulatory framework exists to support these prospective customers » Potential returns commensurate with authorized rate of return » Infrastructure additions could help support additional economic and development activity » Arizona and Nevada are high-potential areas for data center growth » How might Southwest Gas stand to benefit from additional data center economic activity? Tract is working to permit a 2,000-acre, 1.8-gigawatt data center campus in Buckeye, AZ which is located in the suburbs of Phoenix. Notes: Use of these trademarks does not imply a relationship with Southwest Gas. Each trademark is owned by the mark owner, and no affiliation or endorsement of Southwest Gas is implied by the trademark owners. See Great Basin Binding Open Season on slide 30.
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1Q 2025 Financial Results CONSOLIDATED May 12, 2025| 32 Notes: table may not add due to rounding 1 Adjusted SWX income and adjusted EPS for the three months ended March 31, 2024 and the three months ended March 31, 2025, adjust for strategic review and Centuri separation costs, and the amortization of intangible assets (both of which exclude amounts related to noncontrolling interests) Three Months Ended Twelve Months Ended Results of Consolidated Operations March 31, (in millions, except per share items) 2025 2024 Natural gas distribution income 142.9$ 135.8$ Utility infrastructure services loss (20.0) (36.2) Pipeline and storage loss - - Corporate and administrative loss (9.1) (11.9) Net income 113.9 87.7 Non-GAAP adjustments(1) 5.5 10.7 Adjusted net income 119.4$ 98.5$ Basic earnings per share 1.58$ 1.22$ Diluted earnings per share 1.58$ 1.22$ Basic adjusted earnings per share 1.66$ 1.37$ Diluted adjusted earnings per share 1.65$ 1.37$ Weighted average common shares 72.012 71.728 Weighted average diluted shares 72.138 71.882
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Summary of Operating Results NATURALGAS DISTRIBUTION SEGMENT May 12, 2025 | 33 Three Months Ended Twelve Months Ended Results of Natural Gas Distribution March 31, (in thousands of dollars) 2025 2024 Regulated operations revenues 746,416$ 1,052,933$ Net cost of gas sold 284,579 629,997 Operating margin 461,837 422,936 Operations and maintenance expense 129,407 130,866 Depreciation and amortization 93,690 84,823 Taxes other than income taxes 23,761 22,903 Operating income 214,979 184,344 Other income 9,302 18,100 Net interest deductions 44,631 36,444 Income before income taxes 179,650 166,000 Income tax expense 36,708 30,175 Segment net income 142,942$ 135,825$
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Non-GAAP Measures May 12, 2025 | 34 Adjusted SWX income and adjusted EPS for the three months ended March 31, 2024 and the three months ended March 31, 2025, adjust for strategic review and Centuri separation costs, and the amortization of intangible assets (both of which exclude amounts related to noncontrolling interests). Adjusted Corporate and Administrative loss and adjusted EPS for the three months ended March 31, 2024 and the three months ended March 31, 2025 adjust for Centuri separation costs (excluding amounts related to noncontrollinginterests). There were no adjustments at Southwest Gas Corporation for the period. We do not provide a reconciliation of forward-looking Non-GAAP Measures to the corresponding forward-looking GAAP measure due to our inability to project special charges and certain expenses. ($ in thousands, except per share amounts) Adjusted Centuri net income (loss) and adjusted EPS for the three months ended March 31, 2024 and March 31, 2025 adjust for strategic review costs, including the Centuri separation, and the amortization of intangible assets. Three months ended Twelve months ended March 31, SWX Adjusted Net Income and Adjusted EPS 2025 2024 SWX net income 113,870$ 87,737$ Strategic review and Centuri separation 1,888 6,602 Amortization of intangible assets 5,397 6,668 Income tax effect of adjustments (1,784) (2,546) SWX adjusted net income 119,371$ 98,461$ Weighted average diluted shares 72,138 71,882 SWX adjusted EPS 1.65$ 1.37$ Corporate & Admin. Adjusted Net Loss and Adjusted EPS Corporate and Admin. net loss (9,104)$ (11,858)$ Centuri separation cost 584 2,725 Income tax effect of adjustments (140) (654) Corporate and Admin. adjusted net loss (8,660)$ (9,787)$ Weighted average diluted shares 72,138 71,882 Corporate and Admin. adjusted EPS (0.12)$ (0.14)$ Centuri Adjusted Net Income and Adjusted EPS 2025 2024 Centuri net loss (19,968)$ (36,230)$ Strategic review costs, including Centuri separation 1,304 3,877 Amortization of intangibles 5,397 6,668 Income tax impact of adjustments (1,644) (1,892) Centuri adjusted net loss (14,911)$ (27,577)$ Weighted average diluted shares 72,138 71,882 Centuri adjusted EPS (0.21)$ (0.38)$