Southwest Gas Holdings, Inc. Q4 FY2025 earnings call

• Karen Haller mentioned the successful disposition of Centuri in September 2025, completing the transition to a fully regulated natural gas business, which strengthened the balance sheet and allowed reinvestment in core operations. She announced her retirement and the Board appointed Justin Brown as the next CEO effective May 8. • Justin Brown discussed key regulatory developments in Nevada and Arizona, expecting to file rate cases in Arizona this week and Nevada next month, with potential formula rate adjustments. He also talked about the 2028 Great Basin expansion project, including engineering, regulatory preparation, and commercial milestones. • Justin Forsberg walked through financial performance, noting adjusted earnings per diluted share from continuing operations increase, breakdown of adjusted net income changes, and outlined near-term financing plan and long-term credit strategy, emphasizing disciplined funding and balanced capital structure. He also discussed returning value to stockholders through dividend growth and outlined 2026 and forward-looking financial guidance based on regulatory improvements and Great Basin project contribution

In 2025, Southwest Gas adjusted net income finished above the top end of its previously stated guidance range, driving adjusted return on equity to 8.3%. Southwest Gas earnings benefited from rate relief and continued customer growth. Adjusted earnings per diluted share from continuing operations increased nearly 19% from $3.07 in 2024 to $3.65 in 2025. Southwest Gas adjusted net income increased by 8.7% from $261.2 million in 2024 to $283.9 million in 2025. The company initiated a $4.17 to $4.32 per share 2026 adjusted earnings per share guidance range from continuing operations, expecting significant earnings per share growth of 12% to 14% from 2025 to 2030, front-end loaded over the first 3 years

• Initiated 2026 adjusted earnings per share guidance range from continuing operations at $4.17 to $4.32 per share. • Expect significant earnings per share growth of 12% to 14% from 2025 to 2030, front-end loaded over the first 3 years, with higher growth through 2028 to 2029. • 2026 capital plan includes approximately $1.25 billion, with total $6.3 billion for 5 years ending 2030, 73% for Southwest Gas and 27% for Great Basin. • Target 5-year adjusted EPS compound annual growth rate of 12% to 14% through 2030, with 5-year rate base CAGR of 9.5% to 11.5%, excluding Great Basin project run rate utility rate base growth of about 7% annually

• Uncertainties surrounding impacts of future economic conditions. • Regulatory approvals uncertainties. • Significant capital project at Great Basin Gas Transmission Company with timing subject to regulatory approvals, permitting outcomes, and supply chain dynamics. • Risks related to potential bill impacts to customers in rate case outcomes. • Risks associated with supply chain dynamics affecting large scale infrastructure projects like Great Basin expansion

Q: Talk about the equity, timing of equity, engagement with rating agencies and latitude in metrics through construction cycle.

A: Justin Forsberg mentioned credit metrics with more than 500 basis points above downgrade threshold, targeting greater than 300 basis points, minimal equity needs in 2026, and no anticipated upsizing of existing ATM.

Q: Elaborate on Great Basin project scope, customer interest, and eventual opportunity.

A: Justin Brown discussed elongated open season process, signed up nearly 800 MCF capacity, with potential for future demand and interest, and design aspects to compare with actual capacity.

Q: Cadence of earnings uplift and closing regulatory lag gap in Arizona and Nevada.

A: Justin Brown talked about regulatory construct efforts to reduce lag, aiming to cut off about 100 basis points, and Justin Forsberg mentioned front-end loaded earnings growth and alignment with rate base growth.

Q: Post Great Basin and service earnings contribution in 2030.

A: Justin Forsberg mentioned expected $215 million to $245 million incremental annual margin from Great Basin, with margin contribution fully in 2029 and 2030.

Q: Progress in Nevada workshops, ROE thoughts, and 7% rate base growth.

A: Justin Forsberg discussed Nevada workshop progress, working on draft regulations and consensus, Justin Brown mentioned constructive parameters from UNS Gas case and 7% rate base growth being for utility only.

Q: Great Basin cost, derisking, and upstream constraints.

A: Justin Brown talked about proactive supply chain management, updated cost with FERC filing, and Justin Forsberg mentioned precedent agreements and no upstream constraints known.

Q: 300 basis point distance from downgrade threshold and regulatory lag improvement in outlook.

A: Justin Forsberg said greater than 300 basis points target in trough year, and Justin Brown said guidance includes reasonable assumptions on formula rates and regulatory lag improvement.

Q: Great Basin earnings and 15%-17% growth through 2029.

A: Justin Forsberg mentioned run rate and first full year in-service in 2029.

Q: RUCO challenge update.

A: Justin Forsberg said it's part of normal process, with RUCO having opportunity to make arguments, and no overconcern as regulatory mechanisms have withstood judgment