Southwest Gas Holdings, Inc. Reports Second Quarter 2025 Financial Results, Reaffirms Guidance

Regulatory Progress and Cost Management Improve Trailing 12-Month Utility ROE to 8.3%

Nevada Enacts Law Enabling Alternative Ratemaking for Natural Gas Utilities

CTRI Follow-on Offerings Drive Over $470 million in Debt Reduction, Strengthening Balance Sheet

LAS VEGAS, Aug. 6, 2025 /PRNewswire/ — Southwest Gas Holdings, Inc. (NYSE:SWX) (“Southwest Gas Holdings” or “Company”) today reported results for its second quarter ended June 30, 2025. This earnings release should be read in conjunction with the Form 10-Q and earnings slides, which are concurrently being posted at www.swgasholdings.com.

“This quarter we continued to improve operational and financial performance at Southwest Gas Corporation, and we saw constructive regulatory developments in both Arizona and Nevada. The Arizona Corporation Commission (“ACC”) approved a capital tracker program; and, in Nevada, Governor Lombardo signed Senate Bill 417 allowing for alternative ratemaking, which we anticipate will have positive impacts on price stability, regulatory cost reduction, and consumer protection enhancements,” said Karen Haller, President and Chief Executive Officer at Southwest Gas Holdings. “Additionally, with the successful closing of two follow-on offerings and associated private placement sales of Centuri Holdings, Inc. (NYSE:CTRI) (“Centuri”) common stock, Southwest Gas Holdings reduced its ownership of Centuri to approximately 52%, continuing our transformation into a premier, pure-play, fully regulated natural gas business. We used proceeds from these transactions to reduce debt by over $470 million, further strengthening our balance sheet. We remain committed to fully separating Centuri and are evaluating the timing of further separation transactions with the objectives of optimizing value and limiting execution risk,” added Haller.

“Looking forward, we have begun negotiations on initial precedent agreements with potential new shippers at Great Basin Gas Transmission Company, as the 2028 Expansion Project binding open season capacity demand increased to about 1.76 billion cubic (“Bcf”) feet per day from the approximately 1.25 Bcf amount we previously announced in June,” concluded Haller.

Recent Operational and Financial Highlights

• Southwest Gas Holdings closed two follow-on offerings of Centuri common stock, with net proceeds used to reduce the Company’s debt by ~$470 million;
• Southwest Gas Corporation (“Southwest Gas”, “Utility”, or “Natural Gas Distribution”) delivered Utility return on period-end equity of 8.3% over the 12 months ended June 30, 2025, and earnings growth of 22% over 2Q 2024;
• In June 2025, Nevada Governor Lombardo signed Senate Bill 417, new legislation allowing Southwest Gas to apply to the Public Utilities Commission of Nevada for alternative ratemaking plans;
• System Integrity Mechanism approved by ACC, with a $50 million cap on qualifying capital;
• After reopening the Great Basin Gas Transmission Company’s 2028 Expansion Project binding open season, Southwest Gas has received expanded potential demand of up to ~1.76 Bcf per day and potential estimated incremental capital investment opportunity of ~$1.2 billion to $1.6 billion, with an anticipated expansion rate between $14 and $17 per dekatherm per month and a minimum of 20 years for each transportation service agreement;
• Southwest Gas added approximately 40,000 new meter sets during the 12 months ended June 30, 2025, resulting in a 1.8% customer growth rate over the same period;
• Southwest Gas received approval, for rates effective July 2025, to reduce customer rates in order to accelerate the return to Nevada customers of the amount of purchased gas costs over-collected under its purchased gas cost recovery mechanism (“PGA”) in the state;
• As of June 30, 2025, the Company had $356 million of cash, and more than $1.0 billion in available liquidity.

Earnings Reconciliation Table

The table below provides a reconciliation of net income attributable to Southwest Gas Holdings for the three months ended June 30, 2025, from the same period in 2024 (items are in millions and are before related income tax impact unless otherwise noted):

Southwest Gas Holdings’ second quarter net income declined by $31.2 million compared to the same period in the prior year, primarily the result of the impacts related to income taxes on the sale of Centuri stock. These sale transactions eliminated the Company’s ability to include Centuri in its consolidated federal and certain state income tax returns, and to pursue a tax-free disposition, which resulted in the recognition of tax expense on book-to-tax differences relating to the Company’s investment in Centuri. This impact is expected to be partially offset by lower tax expense following the disposition of the remaining Centuri stake. Southwest Gas’ net income improvement of $6.1 million was driven by regulatory improvements to operating margin, while Centuri also showed an improvement of $0.7 million in net income during the second quarter. Southwest Gas Holdings’ adjusted net income was $16.1 million higher than the second quarter of 2024, representing a 71% increase.

Southwest Gas Holdings’ year-to-date net income declined by $5.1 million compared to the same period in the prior year, primarily the result of the impacts of the sale of Centuri stock as discussed in the quarterly drivers above. Southwest Gas’ year-to-date net income improvement of $13.2 million was driven by regulatory improvements to operating margin, while Centuri also showed an improvement of $17.0 million in net loss during the same period. Southwest Gas Holdings’ year-to-date adjusted net income was $37.0 million, or 31%, higher than the same period of the prior year.

Southwest Gas / Natural Gas Distribution – Second Quarter 2025

Key drivers of second quarter 2025 net income as compared to second quarter 2024 include:

• Increased operating margin contributed $26.6 million. Combined rate relief across all our service territories added approximately $23.7 million of incremental margin, and an additional $2.5 million was attributable to customer growth, as approximately 40,000 first-time meter sets were added during the last twelve months;
• Operations and maintenance expense increased $7.0 million. The increase was primarily driven by an increase in employee-related labor and benefit costs of $5.0 million and certain external contractor and professional services expenses in various areas of the business. These increases were partially offset by reductions in leak survey and line locating expenses;
• Depreciation and amortization expense and other taxes increased $9.3 million, including an increase in depreciation on gas plant, driven by a 7% increase in average gas plant in service since the second quarter of 2024;
• Other income improved $3.6 million, driven primarily by a $4.5 million increase in values associated with company-owned life insurance (“COLI”) as well as a $1.6 million one-time non-operating gain on an asset sale. These increases were partially offset by a $3.3 million decline in interest income related to carrying charges associated with regulatory account balances, notably, deferred purchased gas adjustment (“PGA”) cost balances, which drove other income lower. On a combined basis, deferred PGA cost balances changed from a net liability balance of $82 million as of June 30, 2024, to a net liability balance of $349 million as of June 30, 2025;
• Interest expense increased $4.9 million compared to the second quarter of 2024, due to higher interest incurred on the over-collected balance of the PGA account, compared with the interest income recorded in other income during last year’s second quarter. Additionally, the regulatory treatment related to Southwest Gas’ industrial development revenue bonds (offset in margin) that are amortized through interest expense drove interest expense higher;
• Income taxes increased $2.9 million, principally resulting from higher pre-tax net income.

Southwest Gas / Natural Gas Distribution – Year-To-Date 2025

Key drivers of year-to-date 2025 net income as compared to the corresponding period in 2024 include:

• Increase in operating margin contributed $65.5 million period-over-period primarily attributable to combined rate relief across all of our service territories, which added approximately $51.1 million of incremental margin, and an additional $7.6 million was attributable to customer growth, including approximately 40,000 first-time meter sets during the last twelve months. Increases in recoveries and returns associated with regulatory account balances and the variable interest expense adjustment mechanism in Nevada (for which amortization is recognized in interest expense), along with revenue from customers outside of the decoupling mechanisms combined to increase margin by $6.7 million;
• Operations and maintenance expense increased $5.6 million, or 2%, between periods. The increase was primarily driven by employee-related labor and benefit costs of $4 million, insurance costs of $2.3 million, and external contractor and professional services expenses. These increases, along with others, were partially offset by a reduction in leak survey and line locating costs;
• Depreciation and amortization expense and other taxes increased $19.0 million, including an increase in depreciation on gas plant, driven by a 7% increase in average gas plant in service since the corresponding period of 2024. $5.9 million in higher amortization expenses associated with recovery of regulatory program balances further contributed to the increase;
• Other income decreased approximately $5.2 million. Interest income declined $7.3 million between periods primarily reflecting a reduction to carrying charges associated with regulatory account balances, notably, deferred PGA cost balances, which decreased from a net liability balance of $82 million …

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