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 organic growth and 40,000 new meter sets in the last year.

• Positive regulatory developments and robust capital expenditure plans support continued rate base and net income growth.

• Centuri completed an IPO in April 2024, with SWX retaining an 81% stake valued at $1.8 billion, and proceeds used to reduce Centuri's debt.

Strategic priorities and growth outlook

• Transitioning to a fully regulated natural gas utility with a focus on safety, reliability, and disciplined cost management.

• Projected rate base CAGR of 6.5%-7.5% and net income CAGR of 10%-12% from 2024-2026, with 90%-95% of capital plans funded by internal cash.

• Limited near-term equity needs (less than $100 million in 2024) and an investment-grade balance sheet.

• Multiple regulatory rate cases filed or approved in NV, AZ, and CA, supporting future earnings and rate base growth.

• Ongoing utility optimization initiatives target flat O&M per customer and enhanced operational efficiency.

Regulatory and operational highlights

• Nevada rate case approved in April 2024, authorizing a $59 million revenue increase and a 9.5% allowed ROE.

• Arizona rate case filed in February 2024, seeking a $126 million revenue increase and a 10.15% ROE, with rates expected effective April 2025.

• GBGTC rate case filed in March 2024, requesting a $16 million revenue increase; California rate case filing anticipated in 3Q 2024.

• Strong customer satisfaction, ranking #1 in the West for business and large residential gas utilities for four consecutive years.

• Significant investments in safety, system integrity, and environmental initiatives, including renewable natural gas and hydrogen blending projects.