Southwest Gas Holdings, Inc. · NYSE:SWX
Southwest Gas — Q1 2025 Earnings Presentation
34 slides from Southwest Gas's earnings presentation, May 12, 2025
Slide 1: Earnings Conference Call First Quarter 2025 Results
Earnings Conference Call First Quarter 2025 Results May 12, 2025
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 subsidia
Slide 3: Non-GAAP Measures
Non-GAAP Measures 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 a
Slide 4: Speakers and Agenda
SPEAKERS Speakers and Agenda KAREN HALLER ROB STEFANI JUSTIN BROWN PRESIDENT AND CEO CFO PRESIDENT SOUTHWEST GAS HOLDINGS SOUTHWEST GAS HOLDINGS SOUTHWEST GAS CORPORATION PRESENTATION AGENDA Strategic and Business Update Regulatory and Economic Update Financial Update Guidance and Outlook
Slide 5: SWX: Becoming a Premier, Fully Regulated Natural Gas Utility
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 Committed to Delive
Slide 6: Advancing SWX's 2025 Strategic Priorities
Advancing SWX’s 2025 Strategic Priorities 2025 Utility and Regulatory Strategy AZ Rate Case Approval Complete ✓ 1Q 2025 GBGTC Rate Case Approval Complete ✓ 1Q 2025 AZ SIM1 Capital Tracker Approval 3Q 2025 CA Rate Case Approval 4Q 2025 Utility Optimization Executing Planned Initiatives Ongoing Centur
Slide 7: Delivering Strong Results
Delivering Strong Results 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 Limited capital markets needs through the end of 2025; finished the
Slide 8: Regulatory and Economic Update
Regulatory and Economic Update
Slide 9: Current Rate Case Activity
Current Rate Case Activity SWG remains committed to a purposeful regulatory strategy intended to minimize regulatory lag Nevada Arizona1 California Requested Requested Requested Requested Docket # 23-09012 Docket # G-01551A-23-0341 Docket # RP24-514-000 Docket # A2409001 Filing Date Sept. 11, 2023 F
Slide 10: Regulatory Updates - Arizona
Regulatory Updates - Arizona Rate Case Activity Arizona Rate Case Outcome On March 27, 2025, the ACC approved an increase in rates effective on approval. » The $80.2M revenue increase represents 64% of the original request Southwest Gas and Staff Stipulation1 ACC Final Decision » Adjusted for FVI4 e
Slide 11: Regulatory Updates – Arizona SIM
Regulatory Updates – Arizona SIM Capital Tracker Mechanism Proposed System Integrity Mechanism (SIM) Encompasses all required safety-related infrastructure investments that account for ~40% of Southwest Gas’ Arizona dedicated infrastructure Capital Budget. Settlement Agreement Summary Key Objectives
Slide 12: Regulatory Update - California
Regulatory Update - California 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. Southwest Gas Public Adv
Slide 13: Strong Demand Dynamics Supporting Value Creation
Strong Demand Dynamics Supporting Value Creation Strong Economic Growth Projected Across Service Areas • From 2025 to 2030, projected population growth of 4.40% in Arizona and $4.3B 6.0 – 8.0% 3.42% in Nevada, compared to the 2.40% average growth in the US1 Capital Investment Rate Base Growth4 • Con
Slide 14: Financial Update
Financial Update | 14
Slide 15: 1Q 2025 SWX Adjusted Diluted Earnings Per Share Walk
1Q 2025 SWX Adjusted Diluted Earnings Per Share Walk Adjusted Earnings Per Share1 Financial Highlights Favorable Unfavorable • SWG received higher margin from rate relief and customer growth; partially offset by higher interest expense, higher D&A, and lower other income $1.65 $0.18 $0.02 • Centuri
Slide 16: 1Q 2025 SWG GAAP Net Income
Year-over-year net income (loss) drivers include: 1Q 2025 SWG GAAP Net Income (parentheses indicate unfavorable net income drivers) favorable impact unfavorable impact NATURAL GAS DISTRIBUTION SEGMENT Operating Margin1 • $27 million – Combined rate relief GAAP Net Income ($ in millions) • $5 million
Slide 17: 2025 Financing Plan
2025 Financing Plan Assumptions » Centuri assumed to be consolidated through 2025 » All SWX financing assumptions pending further Sources & Uses Sources & Uses Centuri separation transactions ($ in billions)1 ($ in billions)1 » Significant cash previously collected from PGA at $1.1 $1.1 $1.1 $1.1 Eq
Slide 18: Balance Sheet Strength
Balance Sheet Strength SWX and SWG are committed to maintaining an investment grade profile Net Debt1 ($ in billions) Credit Ratings and Outlook3 Total PGA2 Net Debt Moody’s Standard and Poor’s Fitch Cash Net Debt less Debt Balance PGA Ratings Outlook Ratings Outlook Ratings Outlook $0.7 $0.0 $0.7 n
Slide 19: Guidance and Outlook
Guidance and Outlook SOUTHWEST GAS
Slide 20: SWG 2025 and Forward-Looking Financial Guidance
SWG 2025 and Forward-Looking Financial Guidance 2025 Guidance Reaffirmed Net Income1 $265 - $275 million CapEx ~$880 million Forward-Looking Guidance 2025 – 2029 base yr 2025 Reaffirmed Net Income2 (CAGR) 6.0% - 8.0% Rate Base2 (CAGR) 6.0% - 8.0% CapEx3 $4.3 billion Notes: 1 Assumes $3 - $5 million
Slide 21: Positioned to Unlock Significant Stockholder Value
Positioned to Unlock Significant Stockholder Value Strengthening strategic flexibility through the Positive regulatory developments and strong separation of Centuri organic rate base growth Optimizing the utility to deliver value through Maintaining balance sheet flexibility and financial discipline
Slide 22: Contact Information
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 May 12, 2025 | 22
Slide 23: Appendix
Appendix
Slide 24: Maintaining a Competitive Dividend
Maintaining a Competitive Dividend Upon completion of the full separation of Centuri, Southwest Gas Holdings plans to target a dividend payout ratio in line with gas utility peers SWX Annual Dividend Per Share • Southwest Gas Holdings is committed to paying a competitive dividend $2.48 $2.48 $2.48 $
Slide 25: Utility Optimization Progress
Utility Optimization Progress 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. Initiat
Slide 26: Summary of Gas Cost Balances and Recovery Mechanisms
Summary of Gas Cost Balances and Recovery Mechanisms PGA1 Receivable Balance and Recovery Mechanism Summary Dec. 2024 March 2025 Gas Cost Rate Receivable (Payable) Receivable (Payable) State Carrying Cost Rate Adjustment Balance Balance Frequency ($ in millions) ($ in millions) AZ $(47.0) $(48.1) 1-
Slide 27: SWG Net Income Drivers and Assumptions
SWG Net Income Drivers and Assumptions Drivers 2025 2026 - 2029 Arizona rates Assumes rate case effective March filings and outcomes 2025 in line with historical Rate Relief GBGTC rates cadence and finalized March experience 2025 Customer Growth Anticipate customer growth of ~1.4% per year O&M
Slide 28: Regulatory Update - Nevada
Regulatory Update - Nevada Rate Case Activity Nevada Rate Case1 Outcome Summary Dollars in millions Proposed Revenue Increase2 $73.9 ~98% of request after Depreciation Expense ($6.8) depreciation adjustment and Authorized $59 million Cost of Service Adjustment ($1.6) before adjustments Stipulated Re
Slide 29: Regulatory Update – GBGTC
Regulatory Update – GBGTC Rate Case Activity GBGTC Rate Case Outcome1 On March 3, 2025, FERC approved an increase in rates. Requested Approved Target Equity Ratio 56% 50% Return on Equity 13.05% 11.95%3 Pre-Tax Rate of 11.18% 9.76%4 Return Rate Base $206 million (~$99 million increase) $191 million
Slide 30: SWG Regulatory Update
Great Basin 2026 – Expansion Project In April 2025, GBGTC filed an application with the FERC seeking approval to abandon and SWG Regulatory Update replace certain pipeline facilities and grant a CPCN to construct and operate certain facilities to increase firm transportation capacity on its Carson,
Slide 31: Economic Impact of Semiconductor Manufacturing and Data Centers
Economic Impact of Semiconductor Manufacturing and Data Centers » Arizona and Nevada are high-potential areas for data center growth » How might Southwest Gas stand to benefit from additional data center economic activity? We believe that in Arizona and Nevada » Regulatory framework exists to suppor
Slide 32: 1Q 2025 Financial Results
1Q 2025 Financial Results CONSOLIDATED 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 - -
Slide 33: Summary of Operating Results
Summary of Operating Results NATURAL GAS DISTRIBUTION SEGMENT 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
Slide 34: Non-GAAP Measures
Non-GAAP Measures ($ in thousands, except per share amounts) Three m onths ended Tw elv March 31, SWX Adjusted Net Incom e and Adjusted EPS 2025 2024 Adjusted SWX income and adjusted EPS for the three months ended March 31, 2024 SWX net income $ 113,870 $ 87,737 and the three months ended March 31,
Southwest Gas Holdings — Q1 2025 Earnings Presentation on 6ix