Southwest Gas Holdings, Inc. Q3 FY2025 earnings call

• Completed disposition of Centuri, fully paying down holding company debt and reinvesting capital in core business.
• S&P upgraded Southwest Gas Holdings and Southwest Gas Corporation's debt credit ratings to BBB+ with stable outlooks.
• Made progress on Great Basin expansion, with efforts to finalize Precedent Agreements and potential supplemental open season.
• Filed first triennial resource plan in Nevada as required by Senate Bill 281, with expected final decision in 2026.
• Outlined potential timelines for alternative ratemaking in Nevada and Arizona, including filing rate cases and expected effective dates.
• Achieved cost optimization with year-to-date operations and maintenance growth below inflation rate.

Southwest Gas' utility business saw higher margins supported by rate relief and customer growth, but was offset by higher operating and maintenance expenses, depreciation, and net interest. The company successfully disposed of Centuri, fully paying down holding company debt. Southwest Gas' trailing 12-month return on equity (ROE) improved to 8.3%. Revenue contribution is primarily from the natural gas regulated business, with the disposition of Centuri being a significant event in restructuring the business.

• Reaffirmed 2025 net income guidance range of $265 million to $275 million, now guiding toward the top end of the range.
• Reaffirmed other guidance metrics, excluding impacts of 2028 Great Basin expansion and alternative ratemaking in Arizona and Nevada.
• Plans to refresh 2026 guidance in year-end call, evaluating assumptions then.
• Expect robust capital spending driven by safety, reliability, and economic activity.

• Uncertainties surrounding future economic conditions.
• Regulatory approvals uncertainties.
• Potential incrementality of the Great Basin capital project to current estimates.

Q: Follow up on Great Basin time lines, CapEx range, and capital cost assumptions.

A: Justin Brown mentioned they're finalizing Precedent Agreements within the next week, may hold a supplemental open season, and expect to update guidance in February call. CapEx range and capital cost assumptions will be refined as the project scope is zeroed in.

Q: On CFO transition and cash position usage for Great Basin.

A: Karen Haller stated the Board is conducting internal and external search for CFO, with existing finance team able to handle duties in interim. Cash is in short-term investments and will be used as construction for Great Basin ramps up as the project is refined.

Q: On formula rates in Arizona and Nevada, including how they work and time lines.

A: Justin Brown explained formula rates in Arizona and Nevada will be refined through ongoing rate cases, with timelines for filings, decisions, and true-up processes expected to be clarified as rate cases progress