Southwest Gas Holdings, Inc. Q1 FY2026 earnings call

• Regulatory strategy advancement: Filed rate cases in two largest jurisdictions seeking combined revenue increase of approx $172 million. In Arizona, a general rate case with formula rate mechanism and system integrity mechanism capital tracker was filed. In Nevada, a general rate case was filed, and the PUCN's final order was expected, with an approved triennial resource plan having prudency predeterminations for ~$225 million of capital investment. - Great Basin progress: Completed an open season for the 2028 expansion project with bids totaling 2.5 billion cubic feet per day of incremental capacity, working to convert interest into binding precedent agreements. Karen Howler noted a solid start to the year, optimism about the company's outlook, and affirmed 2026 and long-term guidance ranges. Justin Brown discussed the Great Basin open season and 2028 expansion project details.

In the first quarter, earnings per share from continuing operations was $1.91. At the utility, solid performance was driven by rate increases in Arizona and customer growth. At the holding company level, results improved due to lower interest expense and higher interest income, offset in part by higher income taxes. Operating margin rose by $15.1 million, with contributions from rate relief in Arizona and customer growth. Operations and maintenance expense increased by $2.1 million. Depreciation and amortization went up by $5.9 million. Other income declined by $3.6 million. Interest expense saw a modest increase. Income taxes increased. The utility's net customer growth was 1% over the past 12 months.

• Affirmed 2026 adjusted EPS range of $4.17 to $4.32 and long-term growth range of 12% to 14%. - Capital plan on track with expected $1.25 billion investment in 2026 and $6.3 billion over the next five years, focused on safety, reliability, and system growth. - Anticipated rate-based CAGR of 9.5 to 11.5 percent through 2030.

• Uncertainties related to future economic conditions, regulatory approvals, and significant capital projects, which could cause actual results to differ materially from forward-looking statements.

Q: Regarding Great Basin, talk about the potential to ramp beyond 0.6 BCF a day, the process of converting interest, margin versus capex, and the timeline.

A: Justin Brown stated that the process involves working with shippers on precedent agreements, gauging sizing, and that the timeline will become clearer as the negotiation process progresses.

Q: Seek more detail on the types of customers driving the Great Basin open season interest.

A: Justin Brown mentioned that it's a confidential process, but they can point to publicly available articles about growth in the region until contracts are signed.

Q: Given the potential scale-up of Great Basin, how the strategy around long lead time items is evolving.

A: Justin Brown said they have started working with suppliers on pipe and compression and will closely manage longer lead time items.

Q: About California, the impact of the Semper decision on the California gas business.

A: Justin Brown said they are aware of larger investor-owned utility decisions but focus on their own proceedings.

Q: Given the potential Great Basin scaling up, the timeline for communicating the 28 - 35 period.

A: Justin Brown said the focus is on working with shippers to finalize contracts and hopes to provide a clearer timeline by the next call or earlier if information is available.