Southwest Gas Holdings, Inc.

Good morning and welcome to the Southwest Gas Holdings first quarter earning conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Tom Moran, General Counsel, Southwest Gas Holdings. Please go ahead.

Thank you, Vaishnavi. Hello, everyone, and welcome to the Southwest Gas Holdings first quarter 2023 earnings call. Throughout the call, we will be referencing presentation slides, which we have posted on our investor relations website. I'm joined on today's call by Karen Haller, President and CEO of Southwest Gas Holdings. Rob Stefani, Senior Vice President and Chief Financial Officer. Justin Brown, President of Southwest Gas Corporation. Paul Daly, President and CEO of Century Group. And Chad Van Sweden, the CFO of Century Group. Please note that on today's call, the company will address certain factors that may impact this year's earnings and provide some longer-term guidance. Some of the information that will be discussed today contains forward-looking statements. These statements are based on management's assumptions, which may or may not come true, and you should refer to the language on slides two and three of this presentation and in the press release, as well as our SEC filings for a description of the factors that may cause actual results to differ from our forward-looking statements. All forward-looking statements are made as of today and we assume no obligation to update any such statement.

I'll now turn the call over to Karen. Thanks, Tom. I'm pleased you're joining us today to discuss the Southwest Gas Holding's first quarter results. Turning to slide five, we are making significant process on our transformational strategy of returning Southwest Gas to its core foundation as a premier fully regulated natural gas utility. We are enhancing efficiency and productivity across our operations and pursuing constructive break-case outcomes of the utility, while also preparing Sentry for its future as a strong, stand-alone infrastructure services leader. Customer growth and demand remain strong, and we continue to benefit from population growth across our As a result, we believe Southwest Gas is uniquely positioned for continued growth and success as we safely address the needs of our customers, invest in the communities we serve, and deliver value for our shareholders. We are strategically deploying capital, investing in our operations so that we can meet the demand for safe, reliable, and affordable energy solutions. while working constructively with our regulators and legislators to complement our strong organic rate-based growth. We are confident in our momentum and remain on track to deliver 5 to 7 percent CAGR in rate-based growth over the next three years, while also maintaining a strong investment-grade balance sheet and delivering a competitive dividend to our stockholders. As you can see on slide six, We are making excellent progress on our 2023 strategic priorities. We completed several key strategic milestones during the first quarter, including the $1.5 billion sale of Mountain West and the RAS-RES process earlier this year to confirm our financing plan for 2023. Under the financing plan, during the first quarter, we issued $247 million of equity at Southwest Holdings, and $300 million of debt at Southwest Gas. In mid-April, we issued a $550 million term loan at Southwest Holdings. We continue to see limited near-term equity needs for 2024 and 2025 and anticipate equity needs of less than $100 million in total through the end of 2025. We remain on track with the century spend. We submitted an IRS private letter ruling requesting requests during the first quarter, and filed notice of intent with the ACC in April. Our team is now focused on the SEC Form 10 submission. As previously stated, we expect to complete the spend of centuries during the fourth quarter of 2023 or the first quarter of 2024. At the utility, we are focused on the utility optimization review and will begin prioritizing initiatives later this year, as I will cover in more detail. Of note on the regulatory side, in the quarter, we finalized our Arizona general rate case, which led to the ACC's approval and authorization of the largest revenue increase in Southwest gas industry, $54 million, with rates effective February 1, 2023. We also filed a proposed change to the Arizona PGA recovery mechanism in late February, And lastly, we expect to file our Nevada rate case in the third quarter of this year. We are pleased with our continued progress and our strategic plan is on track. On slide seven, we walked through our strong first quarter performance at Southwest and Century. We are proud to announce that at the utility, we delivered the highest quarterly net income on records. we experienced another quarter of strong customer growth, adding 42,000 new meter sets over the last 12 months, while continuing to make investments to ensure our system remains safe and reliable for the benefit of our customers. At Century, we announced record-setting first quarter revenue and EBITDA. This strong first quarter performance reduced Century's last 12 months net debt to EBITDA the prior quarter. Sentry also grew its offshore wind portfolio and showcased continued growth of its strong base of gas and electric utility customers. As Paul will discuss, Sentry continues to win new business based on the strength of its relationships and capabilities and is well positioned to play a critical role in the continuing energy transition. As shown on slide 8, We've been actively advancing a multi-step evaluation process to optimize the performance of the utility through a comprehensive review and identification of potential optimization opportunities. We recently hired consultants, including a top business and management firm, to complement the work we have been doing internally to assist us in our deep dive review into the current cost structure of the utility. This review is about ensuring the investments we are making are efficient, targeted, and positively contributing to building a solid foundation for future success. We anticipate this identification process will continue through the second quarter, and then we will refine and develop prioritized action plans by identifying cost savings and efficiency opportunities to execute on over the next couple of years This process will help support the tremendous growth we have across our service territory, pass on savings to our customers, improve ROEs, and result in positive returns for our stockholders. We also believe these efforts will complement our commitment to delivering excellent customer service and operational efficiency. As I mentioned previously, we added 42,000 new utility customers during the past 12 months and expect to continue to benefit from strong demographic and economic growth in the Southwest. Between 2023 and 2028, population growth is projected to be 3.76% in Arizona and 3.9% in Nevada. New customer growth combined with our pipeline replacement activities associated with our safety and integrity management programs are the cornerstones of our $2 billion three-year capital expenditure program. We are committed to working collaboratively with our regulators to ensure these investments get moved into rate-based in a timely manner, either through rate cases or tracker programs. These commitments and efforts have delivered approximately 10% authorized rate-based CAGR over the past five years, and we expect to continue to grow our rate base at a compound annual growth rate of 5% to 7% over the next three years. I will now turn the call over to Rob, who will review our financial performance for the quarter.