Southwest Gas Holdings (SWX) Investor Presentation summary

Financial performance and business overview

• 2023 revenue reached $2.5 billion with net income of $242.2 million and adjusted net income of $248.6 million; rate base estimated at $5.8 billion as of year-end 2023.

• Centuri, the infrastructure services segment, reported $2.9 billion in 2023 revenue and $282.5 million in adjusted EBITDA, with a 9.7% margin.

• The company serves over 2.2 million customers across Arizona, Nevada, and California, with strong customer growth and high satisfaction ratings.

• Strategic focus includes separation of Centuri, maintaining investment grade credit ratings, and optimizing utility operations for value creation.

• 2024 utility net income guidance is $228–$238 million, with $830 million in capital expenditures planned and a 3-year CapEx forecast of $2.4 billion.

Growth strategy and capital allocation

• Rate base CAGR projected at 6.5–7.5% and net income CAGR at 10–12% from 2024–2026, driven by disciplined capital deployment and regulatory outcomes.

• 90–95% of 2024–2026 capital plans expected to be funded through internally generated cash, limiting near-term equity needs.

• Recent IPO of Centuri generated $329 million in net proceeds, used to reduce Centuri debt by $316 million; SWX retains 81% ownership valued at $1.8 billion.

• Capital expenditures focus on safety, reliability, and supporting new customer growth, with 53% allocated to safety/integrity and 28% to new business.

• Limited near-term refinancing needs and a strong balance sheet support ongoing investment and dividend commitments.

Regulatory and operational highlights

• Positive regulatory developments include a $59 million revenue increase in Nevada (effective April 2024) and pending rate cases in Arizona and California.

• Regulatory framework features full revenue decoupling, capital trackers, and mechanisms to minimize regulatory lag and support infrastructure investment.

• O&M per customer targeted to remain flat through 2026, supported by optimization initiatives and disciplined cost management.

• Customer satisfaction remains high, with a 95% average rating and #1 ranking in the West by J.D. Power for four consecutive years.

• Environmental initiatives include renewable natural gas, hydrogen blending studies, and a carbon offset program, with a 20% GHG reduction target by 2025.