Centuri Holdings, Inc.

Welcome to Southwest Gas Holdings' first quarter 2025 earnings conference call. Today's call is being recorded and our webcast is live. A replay will be available later today and for the next 12 months on the Southwest Gas Holdings website. All participants are currently in the listen-only mode. A question-and-answer session will follow the prepared remarks. If you would like to ask a question at the time, please press star 1 on your phone. I will now turn the call over to Justin Forsberg, Vice President of Investor Relations and Treasurer of Southwest Gas Holdings. Please go ahead.

Thanks, and hello, everyone. Thanks for joining the call today. This morning, we issued and posted to Southwest Gas Holdings' website our first quarter 2025 earnings release and the associated Form 10-Q. The slides accompanying today's call are also available on Southwest Gas Holdings' website. We'll refer to those slides by number throughout the call today. Please note that on today's call, we will address certain factors that may impact 2025 earnings and discuss longer-term guidance. Information that will be discussed today contains forward-looking statements. These statements are based on management's assumptions on what the future holds, but are subject to several risks and uncertainties, including uncertainties surrounding the impacts of future economic conditions and regulatory approvals. This cautionary note, as well as a note regarding non-GAAP measures, is included on slides two and three of this presentation, in today's press release, and in our filings with the Securities and Exchange Commission, which we encourage you to review. These risks and uncertainties may cause actual results to differ materially from statements made today. We caution against placing undue reliance on any forward-looking statements, and we assume no obligation to update any such statement. As shown on slide four, on today's call we have Karen Holler, President and CEO of Southwest Gas Holdings, and Rob Stefani, Chief Financial Officer of Southwest Gas Holdings, as well as Justin Brown, President of Southwest Gas Corporation, and other members of the management team available to answer your questions during the Q&A portion of the call today. I'll now turn the call over to Karen.

Thanks, Justin. Thank you for joining us today. to discuss the Southwest Gas Holdings results and outlook. We want to briefly address the delay in the timing for our earnings announcement and call. Century had an issue arise late in the process of finalizing its financial statements for the quarter that caused a delay in the process of issuing the Century financial statements. That delay caused a corresponding delay for us as Century remains a consolidated subsidiary. The issue has now been resolved and we do not intend to go into any further detail on this topic. We look forward to discussing our Q1 results with you today. Starting with slide five, during the first quarter, we continued to make considerable progress positioning Southwest Gas for long-term success and growth. We advanced our regulatory strategy with constructive outcomes in our Arizona and Great Basin rate cases, and we continued to work collaboratively with our regulators to implement regulatory frameworks, that support the significant growth we are experiencing in the communities we serve. We continue to see tangible benefits from our utility optimization strategy. Southwest Gas finished the quarter with record net income and slightly lower quarter-over-quarter O&M expenses and remains committed to its culture of continuous improvement and optimization. With the Arizona rate case decision now behind us, We are confident in reaffirming each of Southwest Gas' previously communicated guidance ranges, including our net income range of $265 to $275 million for the full year. We continue to expect robust capital spending driven by the need for safety and reliability, as well as economic activity in our service territories. I will discuss guidance in more detail later. Following two consecutive years of a return on equity of over 8%, we finished the quarter with a trailing 12-month ROE of 8.2%. Southwest Gas Holdings continues to press forward on our transformational strategy of becoming a premier fully regulated natural gas utility. We continue to monitor market conditions with respect to our separation strategy options for Sentry. and we remain focused on completing the separation in a manner that is beneficial to our stockholders. As you can see on slide six, we remain on track with achieving our 2025 strategic priorities. As I mentioned earlier, we received final approval of our Great Basin rate case and a constructive decision in our Arizona rate case in March. Justin Brown will discuss our regulatory progress and strategy in more detail in a moment, But I will note that we feel confident in our regulatory strategy as we focus our efforts on the system improvement mechanism in Arizona and on our outstanding California rate case proceeding. As it relates to plans for century, we remain committed to separating century, and we will provide further updates on timing and structure when available. Of the remaining separation options, we may ultimately separate or some combination thereof. We have also preserved the alternative of a tax-free spin-off of the remaining share position. However, if a taxable transaction is executed, the ability to execute a tax-free spin will no longer be possible. The successful execution of a sell-down or share exchange is contingent on favorable market and other conditions. Now that we are more than a year past the century IPO, Sentry is eligible to file a form S3 to register our remaining Sentry shares, which we expect will shorten the process of executing a sale transaction in the market. We continue to gauge market conditions for executing on our possible separation options. Regardless of the form of an initial taxable transaction, whether it be a sell-down or share exchange, both of those options would remain on the table for further separation steps as we the initial transaction. Our 2025 financing plan continues to include the extension of the existing $550 million term loan facility at Southwest Gas Holdings and the issuance of less than $100 million of new equity under our existing ATM program. These capital markets efforts are contingent on, among other things, the successful execution of century separation transactions. and all of our 2025 equity needs may be avoided depending on the timing and form of the century separation. As noted on slide seven, we have carried our strong balance sheet position into 2025, and it provides us with the flexibility to be thoughtful in our approach to capital investments and our efforts to deliver stockholder value. I'll highlight a few of our team's achievements on slide seven. At the utility, we continue to see robust growth because of strong economic activity in our service area, which has led to about 40,000 additional new meter sets during the last 12 months. As of the first quarter of 2025, we had more than $400 million of cash on hand across the enterprise, with more than $1 billion of liquidity, which enables us to honor our commitments and execute the remainder of our 2025 strategy. We remain excited about the future of the company. Now to Justin.