Q4 2025 Southwest Gas Holdings Inc Earnings Call

February 25, 2026

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 a listen-only mode.

A question and answer session will follow the prepared remarks.

if you would like to ask a question during that time, please press star then the number 1 on your telephone keypad,

If you would like to withdraw your questions, please press star 2.

I will not turn the call over to Tyler franic manager of investor relations of Southwest Gas Holdings.

Thank you, John. And hello everyone. We appreciate you joining the call today. This morning, we issued and posted to Southwest Gas Holdings website, our fourth quarter and full year, 2025 earnings release and filed the associated form 10K.

The slides accompanying to 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 2026 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 our subject to several risks and uncertainties including uncertainties surrounding the impacts of future economic conditions regulatory approvals and a significant Capital project at Great Basin, gas transmission company.

This cautionary, note as well as a note regarding non-gaap measures is included. On, slide 2 and 3 of this presentation in today's press, release, and in our filings, with the Securities and Exchange Commission. All of 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 4 on. Today's call, we have Karen Hower, president and CEO of Southwest Gas Holdings. Justin forsberg, Chief Financial Officer of and treasurer of Southwest Gas Holdings, and Justin Brown, president of Southwest Gas Corporation as well as other members of the management team available to answer your questions during the Q&A portion of the call today.

I will now turn the call over to Karen.

Thanks, Tyler.

Good morning, everyone.

It's turned the page.

With the successful disposition of Sentry in September, an important Milestone, that completed our transition to a fully regulated natural gas business.

This strategic step enabled us to fully pay down the remaining holding company debt.

Strengthened our balance sheet and unlocked, meaningful Capital to reinvest in our core operations.

With our Focus. Now fully centered on our regulated natural gas business. We are approaching 2026 with a stronger foundation, and greater flexibility to execute on our strategic priorities, and the opportunities ahead.

As a result of our full separation of century, termination of the icon, cooperation agreement and strong strategic position. I determined that after nearly 3 decades with the company, it is the right time for me to retire.

1 of the most significant responsibilities of a CEO and board of directors is to plan for the CEO of succession. The board was prepared for this Milestone and appointed Justin Brown as Southwest gases. Next CEO, effective May 8th,

President of our utility operations over the last few years. Justin has played a critical role in executing on our strategy, and positioning the company for future success.

He has a proven track record leading our utility operations and the board has full confidence in him as Southwest gases. Next chief executive officer.

Justin and I have worked closely together for many years and I'm confident that he is the Right leader to guide the company in its next phase.

I will remain involved as an adviser to the company through the end of this year to ensure a smooth transition.

With that. Let's turn to slide 5.

In 2025, we delivered, strong financial performance with Southwest gases, adjusted. Net income finishing above the top end of our previously stated guidance range.

Effective cost management and constructive regulatory outcomes.

Gather these.

And our commitment to driving consistent sustainable value for our customers and shareholders.

We also remain optimistic about the future as we introduce 2026 and long-term guidance ranges, which we will cover in more detail later.

We are initiating a 4.17 to 4.32 per share 2026, adjusted earnings per share. Guidance range from continuing operations.

We expect to see significant earnings per share growth of 12 to 14% from 2025, to 2030 driven, by anticipated improvements in our regulatory environments.

With inclusion of Arizona formula rates and alternative rate making in the Nevada.

Along with opportunity, we project to materialize at Great Basin in Northern Nevada.

Because of these opportunities, this growth is expected to be front-end loaded over the first 3 years. So we expect the earnings growth rate to be even higher through 2028 to 2029. J4 will walk you through the guidance, in a few minutes.

As we move to 2026, our strategy Is Anchored. In operational, excellence, Financial discipline, and Regulatory progress.

The work we accomplished in 2025, positioned us to focus on the priorities that we believe matter most in the year ahead, continuing to improve returns advancing customer focused Investments, strengthening our regulatory Frameworks and capturing growth opportunities across the service territories.

Of note, we will. We were pleased to announce earlier today. The port of directors approved, a 4%, increase in our annual dividend to beginning with the second quarter 2026 payout.

We intend to maintain a disciplined strategy focused on investing in the companies Capital plans while sustaining responsible annual dividend growth.

On the next slide, I will outline the key priorities that will guide our efforts throughout 2026.

As you can see on slide 6, we achieved a lot in 2025 with an active regulatory calendar. The introduction of and progress made on the 2028, great base and Expansion Project. The completion of our financing plan and of course the simplification of our business model through the full separation of cry.

We are initiating our 2026 strategic priorities for the first time in decades as a fully regulated, natural gas business.

We are excited to direct our attention entirely to executing our regulatory strategy, achieving the next steps of the Great Basin project and preserving our balance sheet strength by implementing our 2026 financing plan.

On slide 7. I'd like to highlight the following the completion of our Century disposition, smpp upgraded, Southwest Gas Holdings, issuer and Southwest, Gas Corporation, senior unsecured long-term debt credit ratings each to Triple B plus with stable outlooks,

This enhanced corporate risk profile. Further demonstrates the positive impact of our simplification strategy.

As of the end of 2025, our cash balance was nearly 600 million, which we expect to utilize to fully fund current year dividend payments, and to redeploy during 2026 into the utility business.

And we had more than 1.3 billion of liquidity across the business, which enables us to make strategic Investments that are expected to generate stable long-term returns

I'd also like to highlight the utility substantial net income growth, which was primarily driven by positive regulatory outcomes and strong economic activity in our service area and further enhanced by cost optimization efforts.

We are enthusiastic about the company's future and we are confident in the promising opportunities ahead.

With that, I'll turn the call over to Justin for a regulatory and economic update.

Thank you, Karen for your generous work. And more importantly, thank you for your leadership and contributions to selfless gas over the past 29 years. I'm grateful for both our friendship and your continued partnership during this transition.

And delivering safe reliable and affordable, natural, gas service.

We have a strong Foundation, a clear strategy and the right team to deliver.

I'm confident in our ability to execute our plan with discipline and create long-term value for our stockholders while simultaneously, driving meaningful outcomes. For all our stakeholders.

Let me begin. My portion of the presentation by turning your attention to slide 9 where I'd like to begin with key regulatory developments in both Nevada and Arizona, as we prepare to file rate cases, and what we anticipate will be Catalyst for better. Aligning Capital recovery with our investments. Thereby improving long-term earnings visibility,

In Arizona, we anticipate filing our rate case this week with new rates next year and we plan to file our Nevada rate case, next month and under the statutory. 210 day process, new rates would become effective in the fourth quarter of this year.

Justin Brown: The right team to deliver. I'm confident in our ability to execute our plan with discipline and create long-term value for our stockholders, while simultaneously driving meaningful outcomes for all our stakeholders. Let me begin my portion of the presentation by turning your attention to slide 9, where I'd like to begin with key regulatory developments in both Nevada and Arizona as we prepare to file rate cases and what we anticipate will be catalysts for better aligning capital recovery with our investments, thereby improving long-term earnings visibility. In Arizona, we anticipate filing our rate case this week with new rates next year, and we plan to file our Nevada rate case next month, and under the statutory 210-day process, new rates would become effective in the Q4 of this year.

Importantly, both States now allow for potential alternative rate making adjustments, following approval of a general rate case.

While any mechanism remains subject to regulatory approval, we view these Frameworks as constructive steps toward reducing regulatory, lag and better, aligning Capital recovery.

This slide provides a potential timeline for how our alternative rate making opportunities in Nevada and Arizona could develop over the next few years and we remain confident in our ability to work collaboratively with all stakeholders on meeting these milestones.

While any mechanism remains subject to regulatory approval, we view these developments as constructive steps toward reducing regulatory lag and enhancing Capital recovery alignment.

Justin Brown: Importantly, both states now allow for potential alternative rate-making adjustments following approval of a general rate case. While any mechanism remains subject to regulatory approval, we view these frameworks as constructive steps toward reducing regulatory lag and better aligning capital recovery. This slide provides a potential timeline for how our alternative rate-making opportunities in Nevada and Arizona could develop over the next few years, and we remain confident in our ability to work collaboratively with all stakeholders on meeting these milestones. While any mechanism remains subject to regulatory approval, we view these developments as constructive steps toward reducing regulatory lag and enhancing capital recovery alignment. In Nevada, Senate Bill 417, signed into law in June of 2025 by Governor Joe Lombardo, authorizes alternative rate-making plans.

Importantly, both States now allow for potential alternative rate making adjustments, following approval of a general rate case.

In Nevada, Senate, Bill 417 signed into law in June of 2025, by Governor Joel Lombardo authorizes, alternative rate, making plans, the Public Utilities Commission of Nevada has continued. Its rulemaking workshops to implement the legislation with recent sessions focused, on draft policy, language and stakeholder consensus.

While any mechanism remains subject to regulatory approval, we view these Frameworks as constructive steps toward reducing regulatory, lag and better, aligning Capital recovery.

We are encouraged by the progress, and we continue to work collaboratively with all stakeholders. We currently expect the rulemaking to conclude in the coming months, which could allow alternative rate making adjustments to begin as early as 2028.

This slide provides a potential timeline for how our alternative rate-making opportunities in Nevada and Arizona could develop over the next few years, and we remain confident in our ability to work collaboratively with all stakeholders on meeting these milestones.

While any mechanism remains subject to regulatory approval, we view these developments as constructive steps toward reducing regulatory lag and enhancing Capital recovery alignment.

In Arizona, the Arizona Corporation Commission, adopted a policy statement in December of 2024 signaling their openness to having regulated utilities proposed formula rate plans as part of future rate cases and the commission recently approved, its first Formula rate plan last week.

Justin Brown: The Public Utilities Commission of Nevada has continued its rulemaking workshops to implement the legislation, with recent sessions focused on draft policy language and stakeholder consensus. We are encouraged by the progress. We continue to work collaboratively with all stakeholders. We currently expect the rulemaking to conclude in the coming months, which could allow alternative rate-making adjustments to begin as early as 2028. In Arizona, the Arizona Corporation Commission adopted a policy statement in December 2024, signaling their openness to having regulated utilities propose formula rate plans as part of future rate cases. The commission recently approved its first formula rate plan last week. We have developed a formula rate plan that will be included in our rate case filing, which I will discuss in more detail on the next slide.

We have developed a formula rate plan, that will be included in our rate case filing, which I will discuss in more detail on the next slide. Overall, we believe these regulatory developments represent. Meaningful progress toward a modernized regulatory construct in both jurisdictions

turning to slide 10 as mentioned, we expect to file our Arizona rate case this week with race anticipated to become effective in April of next year,

Key elements of our filing include a revenue increase of over 100 million dollars with a proposed rate base of 3.9 billion and a requested. Roe of 10.25% plus the fair value return on rate base of 20 basis points, relative to our equity ratio of approximately 50%.

Justin Brown: Overall, we believe these regulatory developments represent meaningful progress toward a modernized regulatory construct in both jurisdictions. Turning to slide 10, as mentioned, we expect to file our Arizona rate case this week, with rates anticipated to become effective in April of next year. Key elements of our filing include a revenue increase of over $100 million, with a proposed rate base of $3.9 billion and a requested ROE of 10.25%, plus a fair value return on rate base of 20 basis points, relative to our equity ratio of approximately 50%. This case is primarily driven by the need to start recovering on the nearly $900 million in capital investments we've made for the benefit of our Arizona customers to ensure safe and reliable natural gas service.

We have developed a formula rate plan, that will be included in our rate case filing, which I will discuss in more detail on the next slide.

This case is primarily driven by the need to start recovering on the nearly 900 million Capital Investments. We've made for the benefit of our Arizona customers to ensure safe and reliable Natural, Gas Service. These Investments result in a proposed increase in rate base of roughly 700 million, including post, test your adjustments of approximately 360 million through November of 2026,

Overall, we believe these regulatory developments represent meaningful progress toward a modernized regulatory construct in both jurisdictions.

Turning to slide 10 as mentioned, we expect to file our Arizona rate case this week, with rates anticipated to become effective in April of next year.

As I mentioned previously, we will also be including a formula rate adjustment proposal. The Proposal resembles, the guidelines established in the commission's policy statement, as well as some of the other recent utility proposals currently, pending in front of the commission including the mechanism. The commission approved, last week, we are looking forward to working with all stakeholders to effectuate, a constructive outcome that minimizes bill impacts the customers and allows them

Key elements of our filing include a revenue increase of over hundred million dollars with a proposed rate base of 3.9 billion and a requested. Roe of 10.25% plus a fair value return on rate base of 20 basis points, relative to our equity ratio of approximately 50%.

Justin Brown: These investments result in a proposed increase in rate base of roughly $700 million, including post-test year adjustments of approximately $360 million through November 2026. As I mentioned previously, we will also be including a formula rate adjustment proposal. The proposal resembles the guidelines established in the Commission's policy statement, as well as some of the other recent utility proposals currently pending in front of the Commission, including the mechanism the Commission approved last week. We are looking forward to working with all stakeholders to effectuate a constructive outcome that minimizes bill impacts to customers and allows us to more timely recover our capital investments. On average, the proposed revenue increase in our case translates to an expected bill impact of approximately $5 per month for our residential customers.

Us to more timely recover, our Capital Investments on average, the proposed Revenue increase in our case translates to an expected Bill impact of approximately 5 dollars per month. For our residential customers, we believe our proposal reflects a balanced approach that, enhances safety and infrastructure reliability while maintaining customer affordability, and as always, the outcome remains subject to commissioner review and approval.

This case is primarily driven by the need to start recovering on the nearly 900 million Capital Investments. We've made for the benefit of our Arizona customers to ensure safe and reliable natural gas Services. These Investments result in a proposed increase in rate base of roughly 700 million, including post, test your adjustments of approximately 360 million through November of 2026,

As I mentioned previously, we will also be including a formula rate adjustment proposal. The Proposal resembles, the guidelines established in the commission's policy statement, as well as some of the other recent utility proposals currently, pending in front of the commission including the mechanism. The commission approved, last week we are looking forward to working with all stakeholders to effectuate a constructive outcome that minimizes bill impacts. The customers and allows us to more timely recover our Capital Investments.

Justin Brown: We believe our proposal reflects a balanced approach that enhances safety and infrastructure reliability while maintaining customer affordability, and as always, the outcome remains subject to Commission review and approval. Moving to slide 11, we are initiating 2026 and long-term capital guidance, which now incorporates the 2028 Great Basin expansion project. This marks the first time we have included the Great Basin project in our forward outlook, and this represents an important evolution in our capital plan. While our capital plan remains anchored in utility distribution investments, underpinned by our commitment to safety, reliability, system modernization, and meeting the needs of our growing customer base, in 2026, we anticipate early-stage spending related to Great Basin expansion, including engineering, environmental reviews, permitting, and other pre-construction activities necessary to support an efficient project timeline.

On average, the proposed revenue increase in our case translates to an expected bill impact of approximately $5 per month for our residential customers.

In 2026, we anticipate early stage, spending related to Great Basin expansion including engineering environmental reviews permitting and other pre-construction activities necessary to support an project timeline.

We believe our proposal reflects a balanced approach that enhances safety and infrastructure reliability while maintaining customer affordability. And as always, the outcome remains subject to Commission of review and approval.

Over the next 5 years, we expect to invest approximately 6.3 billion with roughly 73%, directed towards Southwest Gas and 27% toward Great Basin. This Capital mix positions. Great Basin is a growing contributor to the company's growth story and long-term earnings platform. These Investments support. An expected 5-year rate, based kegger of approximately 9 and a half to 11 and a half percent. The inclusion of Great Basin provides incremental upside and diversification beyond our distribution system Investments That We Believe will maintain a sustainable growth. Trajectory of nearly 7% over the same period.

Justin Brown: Over the next 5 years, we expect to invest approximately $6.3 billion, with roughly 73% directed towards Southwest Gas and 27% toward Great Basin. This capital mix positions Great Basin as a growing contributor to the company's growth story and long-term earnings platform. These investments support an expected 5-year rate base CAGR of approximately 9.5% to 11.5%. The inclusion of Great Basin provides incremental upside and diversification beyond our distribution system investments that we believe will maintain a sustainable growth trajectory of nearly 7% over the same period. We believe the combination of our distribution investments, coupled with new opportunities emerging through Great Basin, provide a compelling long-term capital framework for the company and offer meaningful earnings and cash flow growth for our investors.

Engineering, environmental reviews, permitting, and other pre-construction activities necessary to support an efficient project timeline.

We believe the combination of our distribution Investments coupled with new opportunities emerging through Great Basin, provide a compelling long-term capital framework for the company and offer meaningful earnings and cash flow growth for our investors.

Returning to slide 12, we continue to advance the 2028 Great Basin Expansion Project and remain on schedule across engineering regulatory preparation and Commercial milestones. In December, we executed binding precedent. Agreements, following a successful Open Season resulting in nearly 800 million. Cubic feet per day of incremental capacity commitments. This supports an estimated 1.7,

10 billion, capital investment opportunity and reflects strong market demand for expanded. Transmission capacity, upon placing the project in service. We estimate, incremental annual margin of approximately 215 to 245 million.

Justin Brown: Turning to slide 12, we continue to advance the 2028 Great Basin expansion project and remain on schedule across engineering, regulatory preparation, and commercial milestones. In December, we executed binding precedent agreements following a successful open season, resulting in nearly 800 million cubic feet per day of incremental capacity commitments. This supports an estimated $1.7 billion capital investment opportunity and reflects strong market demand for expanded transmission capacity. Upon placing the project in service, we estimate incremental annual margin of approximately $215 to $245 million, representing a significant step-up in our Great Basin earnings profile. We expect to file our formal CPCN application before the end of this year, following the completion of our engineering design, environmental, and cultural field work.

Representing a significant step up in our Great Basin earnings profile. We expect to file our formal cpcn application. Before the end of this year, following the completion of our engineering design, Environmental and Cultural field work.

The fur and NEPA review. Processes are expected to occur during 2027 with construction to begin following, for approval. And with anticipated in-service date near the end of 2028.

Turning to slide 12, we continue to advance the 2028 Great Basin Expansion Project and remain on schedule across engineering, regulatory preparation, and commercial milestones. In December, we executed binding precedent agreements, following a successful open season resulting in nearly 800 million cubic feet per day of incremental capacity commitments.

This supports an estimated 1.7 billion capital, investment opportunity and reflects strong market demand for expanded. Transmission capacity, upon placing the project in service. We estimate, incremental annual margin of approximately 215 to 245 million.

We recently achieved an important Milestone with pre-filing approval from the fur. The fur also encouraged evaluation of potential eligibility under title 41, of the fast act, which is designed to streamline Federal permitting through enhanced. Inter agency coordination. We are currently assessing that pathway and its potential implications for project timing.

Justin Brown: The FERC and NEPA review processes are expected to occur during 2027, with construction to begin following FERC approval and with anticipated in-service date near the end of 2028. We recently achieved an important milestone with pre-filing approval from the FERC. The FERC also encouraged evaluation of potential eligibility under Title 41 of the FAST Act, which is designed to streamline federal permitting through enhanced interagency coordination. We are currently assessing that pathway and its potential implications for project timing. As with any large-scale infrastructure project, timing remains subject to regulatory approvals, permitting outcomes, and supply chain dynamics. That said, we are proactively managing contractor engagement and procurement planning to mitigate execution risk and preserve schedule integrity. Capital deployment will ramp up as we move from engineering and permitting into construction in late 2027 and early 2028.

Representing a significant step up in our Great Basin earnings profile. We expect to file our formal CPCN application before the end of this year, following the completion of our engineering design and environmental and cultural field work.

As with any large scale infrastructure project timing remains subject to regulatory approvals permitting, outcomes, and supply chain dynamics. That said we are proactively managing contractor engagement and procurement planning to mitigate execution risk and preserve schedule. Integrity. Capital deployment will ramp up as we move from engineering and permitting into Construction, in late 2027 and early 2028. We expect to acrew AFC on pre-service,

Capital moderating near-term earnings impacts.

The FERC and NEPA review processes are expected to occur during 2027, with construction to begin following FERC approval and an anticipated in-service date near the end of 2028. We recently achieved an important milestone with pre-filing approval from the FERC. The FERC also encouraged evaluation of potential eligibility under Title 41 of the FAST Act, which is designed to streamline federal permitting through enhanced interagency coordination. We are currently assessing that pathway and its potential implications for project timing.

From a financing standpoint, we are targeting a balanced 50/50. Debt to equity structure. Debt is expected to be funded through Southwest Gas, Bond issuances. While Equity requirements will be supported through a combination of holding company, leverage capacity and modest Equity issuances including use of our existing ATM program. This approach supports project execution, while preserving credit quality and long-term Financial flexibility, preserving the strength of our balance sheet.

We will continue to provide updates as we achieve key Milestones throughout the course of this year. And with that, I'll turn the call over to j4 who will review our financial performance for the year.

Thank you, Justin.

Justin Brown: We expect to accrue AFUDC on pre-service capital, moderating near-term earnings impacts. From a financing standpoint, we are targeting a balanced 50/50 debt-to-equity structure. Debt is expected to be funded through Southwest Gas bond issuances, while equity requirements will be supported through a combination of holding company leverage capacity and modest equity issuances, including use of our existing ATM program. This approach supports project execution while preserving credit quality and long-term financial flexibility, preserving the strength of our balance sheet. We will continue to provide updates as we achieve key milestones throughout the course of this year. With that, I'll turn the call over to Jay Foer, who will review our financial performance for the year.

As with any large-scale infrastructure project timing, remains subject to regulatory approvals permitting, outcomes and supply chain dynamics. That said we are proactively managing contractor engagement and procurement planning to mitigate execution risk and preserve schedule. Integrity. Capital deployment will ramp up as we move from engineering and permitting into Construction, in late 2027 and early 2028. We expect to

crew if you'd see on pre-service Capital moderating near-term earnings impacts,

According to slide 14 while consolidating the Gap earnings per diluted. Share for 2025. We're $6.08 this included discontinued operations. During the year, the company completed the sale of its remaining shares of century on September 5th. 2025, representing a full exit and qualifying Sentry for discontinued operations reporting.

the transaction generated a net gain of approximately 260 million which when combined with the century performance throughout our period of ownership during the year, contributed $2.83 per diluted share to consolidate a gap earnings,

From a financing standpoint, we are targeting a balanced 50/50 debt-to-equity structure. Debt is expected to be funded through Southwest Gas bond issuances, while equity requirements will be supported through a combination of holding company leverage capacity and modest equity issuances, including use of our existing ATM program. This approach supports project execution while preserving credit quality and long-term financial flexibility, maintaining the strength of our balance sheet.

you can refer to slide 32 in the appendix for a detailed breakdown of Consolidated earnings per for the year,

Justin Forsberg: Thank you, Justin. Turning to Slide 14, while consolidated GAAP earnings per diluted share for 2025 were $6.08, this included discontinued operations. During the year, the company completed the sale of its remaining shares of Centuri on 5 September 2025, representing a full exit and qualifying Centuri for discontinued operations reporting. The transaction generated a net gain of approximately $260 million, which, when combined with the Centuri performance throughout our period of ownership during the year, contributed $2.83 per diluted share to consolidated GAAP earnings. You can refer to Slide 32 in the appendix for a detailed breakdown of consolidated earnings for the year. Here, we present adjusted earnings per share from continuing operations, so you can clearly see the underlying business performance.

Here we present adjusted earnings per share from continuing operations, so you can clearly see the underlying business performance.

Thank you, Justin.

as shown on the slide adjusted earnings per diluted share from continuing operations increased nearly 19% from $3.07, in 2024, to $3.65 in 2025 representing, a 58 Cent Improvement year-over-year

According to slide 14, while consolidating, the Gap earnings per diluted share for 2025 were $6.08. This included discontinued operations. During the year, the company completed the sale of its remaining shares of Century on September 5th, 2025, representing a full exit and qualifying Century for discontinued operations reporting.

As well as significantly lower financing costs at Holdings.

Southwest Gas earnings benefited from rate relief and continued customer growth contributing approximately 30 cents per share to eps.

The transaction generated a net gain of approximately 260 million which when combined with the century performance throughout our period of ownership during the year, contributed $2.83 for diluted share to consolidate a gap earnings.

You can refer to slide 32 in the appendix for a detailed breakdown of consolidated earnings per share for the year.

Justin Forsberg: As shown on the slide, adjusted earnings per diluted share from continuing operations increased nearly 19% from $3.07 in 2024 to $3.65 in 2025, representing a $0.58 improvement year-over-year. This increase was driven by focused execution in our natural gas distribution business, as well as significantly lower financing costs and holdings. Southwest Gas earnings benefited from rate relief and continued customer growth, contributing approximately $0.30 per share to EPS. These margin benefits were partially offset by increased depreciation and amortization tied to ongoing capital investment, higher interest expense, primarily related to regulatory account balances from over-collected purchased gas costs, and modestly higher operations and maintenance expense.

Here we present adjusted earnings per share from continuing operations, so you can clearly see the underlying business performance.

These margin benefits were partially offset by increased depreciation and amortization tied to ongoing capital investment, higher interest, expense primarily related to regulatory account balances from over-collected purchase, gas costs and modestly, higher operations and maintenance expense.

As shown on the slide, adjusted earnings per diluted share from continuing operations increased nearly 19%, from $3.07 in 2024 to $3.65 in 2025, representing a 58 cent improvement year-over-year.

This debt payoff was the primary driver of the Improvement in earnings shown on the table.

Increase was driven by focused execution in our Natural Gas Distribution business as well as significantly lower financing costs at Holdings.

Learning to slide 15 you'll see the year-over-year. Walk from 2024 to 2025 adjusted net income for Southwest Gas.

Adjusted net income, increased by 8.7%, from 261.2 million in 2024 to 283.9 million. In 2025 representing an improvement of nearly 23 million dollars year-over-year

Justin Forsberg: Lower overall expenses of the holding company were driven by a significant reduction in interest expense following the full repayment of prior holdco debt using proceeds from the Centuri transactions. This debt payoff was the primary driver of the improvement in earnings shown on the table. Turning to Slide 15, you'll see the year-over-year walk from 2024 to 2025 adjusted net income for Southwest Gas. Adjusted net income increased by 8.7% from $261.2 million in 2024 to $283.9 million in 2025, representing an improvement of nearly $23 million year-over-year.

Benefited from rate relief and continued customer growth contributing approximately 30 cents per share. To EPS these margin benefits, were partially offset by increased depreciation and amortization tied to ongoing capital investment. Higher interest expense primarily related to regulatory account balances from over-collected purchased gas costs and modestly, higher operations and maintenance expense.

These results were nearly 9 million dollars above the high end of our net income guidance, driven largely by higher than forecasted COI results. Higher interest income from elevated cash balances and some delayed in-service dates which resulted in DNA coming in modestly, lower than anticipated.

Lower overall expenses at the holding company were driven by a significant reduction in interest expense following the full repayment of Prior whole code debt. Using proceeds from the century transactions. This debt payoff was the primary driver of the Improvement in earnings shown on the table.

The primary driver of the year-over-year increase was a near nearly 120 million Improvement in operating margin. This reflects approximately 95.2 million of combined rate relief primarily from the outcome of our Arizona rate case.

Looking to slide 15, you'll see the year-over-year walk from 2024 to 2025 adjusted net income for Southwest Gas.

11.5 million of margin from continued, customer growth, as well as approximately 8 million dollars related to recovery, and return mechanisms and 5.9 million from the variable interest expense adjustment mechanism in Nevada. Associated with the RBS.

Justin Forsberg: These results were nearly $9 million above the high end of our net income guidance, driven largely by higher than forecasted COLI results, higher interest income from elevated cash balances, and some delayed in-service dates, which resulted in D&A coming in modestly lower than anticipated. The primary driver of the year-over-year increase was nearly $120 million improvement in operating margin. This reflects approximately $95.2 million of combined rate relief, primarily from the outcome of our Arizona rate case, $11.5 million of margin from continued customer growth, as well as approximately $8 million related to recovery and return mechanisms, and $5.9 million from the variable interest expense adjustment mechanism in Nevada associated with the IDRBs. These last two margin improvements are each wholly offset within operating income through D&A and interest expense, respectively.

Adjusted net income increased by 8.7%, from $261.2 million in 2024 to $283.9 million in 2025, representing an improvement of nearly $23 million year-over-year.

These last 2 margin improvements, are each wholly offset within operating income through DNA and interest expense respectively.

On M increased 16.8 million compared with the prior year.

Results were nearly $9 million above the high end of our net income guidance, driven largely by higher than forecasted COI results. Higher interest income from elevated cash balances and some delayed in-service dates resulted in DNA coming in modestly lower than anticipated.

Excluding incentive compensation expense that came in above Target. The increase was approximately 1.9% over the prior year.

The primary driver of the year-over-year increase was a near nearly 120 million dollar Improvement. In operating margin. This reflects approximately 95.2 million of combined rate relief primarily from the outcome of our Arizona rate case.

Other drivers included higher employee related, labor costs, higher cloud computing, expenses and higher outside Services costs. These costs increases were partially offset by reductions in leak survey and line load kating expenses.

Overall onm finish the year, close to budget reflecting, our efforts to manage costs while safely and reliably delivering natural gas service to our customers.

11.5% and 5.9 million from the variable interest expense adjustment mechanism in Nevada. Associated with the RBS.

Justin Forsberg: O&M increased $16.8 million compared with the prior year. Excluding incentive compensation expense that came in above target, the increase was approximately 1.9% over the prior year. Other drivers included higher employee-related labor costs, higher cloud computing expenses, and higher outside services costs. These cost increases were partially offset by reductions in leak survey and line locating expenses. Overall, O&M finished the year close to budget, reflecting our efforts to manage costs, while safely and reliably delivering natural gas service to our customers.

These last 2 margin improvements, are each wholly offset within operating income through DNA and interest expense respectively.

O&M increased $16.8 million compared with the prior year.

Depreciation and amortization, increase 27.6 million driven by a 7% increase in average, gas plant in service. As we continue to invest in pipeline replacement system, reinforcement and new infrastructure for the benefit of customers along with an approximately 8 million dollar higher amortization related to regulatory count balance. Is that I mentioned being offset in margin among ago.

Excluding incentive compensation expense that came in above Target. The increase was approximately 1.9% over the prior year.

Other drivers included higher employee-related labor costs, higher cloud computing expenses, and higher outside services costs. These cost increases were partially offset by reductions in leak survey and line locating expenses.

Other income declined by a net, 1.9 million several offsetting items. Contributed to this decrease, with an expected 12.6 million decline in interest income related to carrying charges on deferred PGA, balances being the largest

Justin Forsberg: Depreciation and Amortization increased $27.6 million, driven by a 7% increase in average gas plan and service as we continue to invest in pipeline replacement, system reinforcement, and new infrastructure for the benefit of customers, along with an approximately $8 million higher amortization related to regulatory account balances that I mentioned being offset in margin a moment ago. Other income declined by a net $1.9 million. Several offsetting items contributed to this decrease, with an expected $12.6 million decline in interest income related to carrying charges on deferred PGA balances being the largest. This decline was partially offset by an increase in company-owned life insurance asset values, gains on the sale of miscellaneous assets, and the timing differences in contributions to the Southwest Gas Foundation compared with 2024.

Overall onm finished the year, close to budget reflecting, our efforts to manage costs while safely and reliably delivering natural gas service to our customers.

this decline was partially offset by an increase in company-owned life, insurance asset values games on the sales miscellaneous assets and the timing differences in contributions to the Southwest Gas Foundation, compared to 2024

Net, interest, deductions increase 19.4 million driven largely by at the anticipated, interest, incurred on over-collected PGA, balances and higher variable interest expense adjustment mechanism amounts in Nevada associated with RBS.

Depreciation and amortization increased $27.6 million, driven by a 7% increase in average gas plant in service, as we continue to invest in pipeline replacement, system reinforcement, and new infrastructure for the benefit of customers. This includes approximately $8 million higher amortization related to regulatory account balances that I mentioned being offset in margin a moment ago.

As I mentioned, a moment ago, the impact of operating margin operating income of variable interest associated with the Nevada, idbs is wholly offset in margin.

Other income declined by a net $1.9 million, with several offsetting items. Contributing to this decrease was an expected $12.6 million decline in interest income related to carrying charges on deferred PGA balances, with this being the largest contributor.

Taxes. Other than income taxes, made up largely of property taxes. Increased 5.1 million while income tax expense was also higher year-over-year due to increased pre-tax income.

Justin Forsberg: Net interest deductions increased $19.4 million, driven largely by the anticipated interest incurred on over-collected PGA balances and higher variable interest expense adjustment mechanism amounts in Nevada associated with IDRBs. As I mentioned a moment ago, the impact to operating margin, operating income of variable interest associated with the Nevada IDRBs is wholly offset in margin. Taxes other than income taxes, made up largely of property taxes, increased $5.1 million, while income tax expense was also higher year-over-year due to increased pre-tax income. You'll note that partially offsetting GAAP net income was a $16.4 million state income tax apportionment benefit associated with certain one-time events, and we have adjusted this income tax benefit for non-GAAP presentation to reflect the true run rate net income at Southwest Gas.

This decline was partially offset by an increase in company-owned life insurance asset values. Gains on the sales miscellaneous assets and the timing differences in contributions to the Southwest Gas Foundation, compared with 2024

You'll note that partially offsetting gaap. Net income was a 16.4 million state income tax, a portion that benefits associated with certain 1-time events and we have adjusted its income tax benefit for non-gaap presentation to reflect the true run rate, net income at Southwest Gas.

Net interest deductions increased $19.4 million, driven largely by the anticipated interest incurred on over-collected PGA balances and higher variable interest expense adjustment mechanism amounts in Nevada associated with RBS.

And the impacts of taxes.

As I mentioned a moment ago, the impact of operating margins and operating income of variable interest associated with the Nevada RBS is wholly offset in margin.

Moving on to slide 16. We outline our expected near-term, financing plan, which reflects disciplined funding supported by a strong liquidity position.

Taxes, other than income taxes, made up largely of property taxes, increased $5.1 million, while income tax expense was also higher year-over-year due to increased pre-tax income.

We enter 2026 with a significant beginning Consolidated, cash balance of nearly $600 million largely representing the remaining proceeds from the century separation completed in September 2025, after having utilized a portion of those excess proceeds to pay dividends to stockholders during the second half of 202025.

Justin Forsberg: In summary, the year-over-year improvement in adjusted net income is a clean, regulated utility story, driven by strong operating margin growth from rate relief and customer additions, partially offset by modestly higher O&M, and by higher D&A interest expense and the impacts of taxes. Moving on to slide 16, we outline our expected near-term financing plan, which reflects disciplined funding supported by a strong liquidity position. We enter 2026 with a significant beginning consolidated cash balance of nearly $600 million, largely representing the remaining proceeds from the Centuri separation completed in September 2025, after having utilized a portion of those excess proceeds to pay dividends to stockholders during the second half of 2025.

In summary the year-over-year Improvement in adjusted. Net, income is a clean regulated. Utility story driven by strong operating margin growth from rate relief and customer editions partially offset by modestly, higher onm, and buy and buy higher DNA, interest expense and the impacts of taxes.

The liquidity at the whole Co provides meaningful Financial flexibility as we execute our Capital program and we plan to fully fund stockholder dividends in 2026, using that holding company cash while also planning to infuse. Nearly the same amount of equity into Southwest Gas to fund our 2026 Capital plan.

The execution of this plan is projected to result in a nominal amount of cash on hand at Southwest Gas Holdings at year end 2026.

Expected near-term financing plan which reflects disciplined funding supported by a strong liquidity position.

During 2026, we expect approximately 325 million of net, Southwest Gas, Bond issuances, along with modest, revolver usage at the operating company.

Importantly, we do not anticipate any Equity issuance needs during the year under the existing ATM program.

The.

Justin Forsberg: The liquidity at the holdco provides meaningful financial flexibility as we execute our capital program. We plan to fully fund stockholder dividends in 2026 using that holding company cash, while also planning to infuse nearly the same amount of equity into Southwest Gas to fund our 2026 capital plan. The execution of this plan is projected to result in a nominal amount of cash on hand at Southwest Gas Holdings at year-end 2026. During 2026, we expect approximately $325 million of net Southwest Gas bond issuances, along with modest revolver usage at the operating company. Importantly, we do not anticipate any equity issuance needs during the year under the existing ATM program. Across the company, our $1.25 billion capital plan is the primary use of funds.

2525 bill.

We enter 2026 with a significant beginning consolidated cash balance of nearly $600 million, largely representing the remaining proceeds from the Century separation completed in September 2025, after having utilized a portion of those excess proceeds to pay dividends to stockholders during the second half of 2025.

Memory use of funds. This investment includes approximately 925 million of natural gas distribution system. Infrastructure expenditures with the balance of the plan, supporting our planned 2028, Great Basin Expansion Project.

The liquidity at the HoldCo provides meaningful financial flexibility as we execute our capital program, and we plan to fully fund stockholder dividends in 2026 using that holding company cash, while also planning to infuse nearly the same amount of equity into Southwest Gas to fund our 2026 capital plan.

The execution of this plan is projected to result in a nominal amount of cash on hand at Southwest Gas Holdings at year-end 2026.

Overall our 2026 plan, reflects balanced funding strong, internal cast, generation disciplined, capital investment, and a clear path to executing our growth step strategies. Without the need for incremental external equity.

During 2026, we expect approximately $325 million of net Southwest Gas bond issuances, along with modest revolver usage at the operating company.

Importantly, we do not anticipate any equity issuance needs during the year under the existing ATM program.

Looking further out and turning to slide 17. We highlight how our credit strategy is intentionally aligned with our long-term capital plan and why we believe maintaining a solid, Triple B Plus profile is the optimal position for Southwest Gas Holdings during this investment cycle.

Justin Forsberg: This investment includes approximately $925 million of natural gas distribution system infrastructure expenditures, with the balance of the plan supporting our planned 2028 Great Basin expansion project. Overall, our 2026 plan reflects balanced funding, strong internal cash generation, disciplined capital investment, and a clear path to executing our growth strategy without the need for incremental external equity. Looking further out and turning to slide 17, we highlight how our credit strategy is intentionally aligned with our long-term capital plan, and why we believe maintaining a solid BBB+ profile is the optimal position for Southwest Gas Holdings during this investment cycle. For 2025, we calculate S&P-adjusted FFO to debt of approximately 19.7% at Southwest Gas Holdings and 18.6% at Southwest Gas Corporation.

For 2025, we calculate S&P adjusted ffo to debt of approximately 19.7% at Southwest Gas Holdings and 18.6% at Southwest Gas Corporation.

Across the company are 1.25 billion. Capital plan is the primary use of funds. This investment includes approximately 925 million of natural gas distribution system infrastructure expenditures with the balance of the plan supporting our planned 2028, Great Basin Expansion Project.

These levels, sit well above s&p's, 13%. Downgrade threshold for each entity and above our targeted, long-term. Operating range of greater than 17%

Overall our 2026 plan, reflects balanced funding strong, internal cash generation disciplined, capital investment, and a clear path to executing our growth step strategy without the need for incremental external equity.

This long-term credit metric strategy is targeted to provide more than 300 basis points of cushion above the downgrade trigger at any point in our forecast, period, which we believe is an appropriate level of planned Headroom to absorb potential. Exogenous events such as volatility and whether commodity prices interest rates and the timing of regulatory outcomes

This discipline credit positioning supports a balanced 50/50 capital structure at Southwest Gas and preserves efficient access to debt markets. As we execute the more than 6 billion dollars of planned investment through 2030.

Justin Forsberg: These levels sit well above S&P's 13% downgrade threshold for each entity and above our targeted long-term operating range of greater than 17%. This long-term credit metric strategy is targeted to provide more than 300 basis points of cushion above the downgrade trigger at any point in our forecast period, which we believe is an appropriate level of planned headroom to absorb potential exogenous events, such as volatility in weather, commodity prices, interest rates, and the timing of regulatory outcomes. This disciplined credit positioning supports a balanced 50/50 capital structure at Southwest Gas and preserves efficient access to debt markets as we execute the more than $6 billion of planned investment through 2030.

For 2025, we calculate S&P adjusted ffo to debt of approximately 19.7% at Southwest Gas Holdings and 18.6% at Southwest Gas Corporation.

Due to our strength and balance sheet and credit cushion. We believe we can forego high volume Equity issuances, while utilizing the ATM for modest Equity needs as well as the reestablished hulco leverage capacity as financing levers.

These levels, sit well above s&p's, 13%. Downgrade threshold for each entity and above our targeted, long-term. Operating range of greater than 17%

Just, as importantly, this approach directly supports our stockholder value framework by maintaining visible Headroom above downgrade thresholds. We believe this discipline will preserve lower cost Capital Access and create the foundation for consistent annual dividend growth. While retaining important flexibility during peace investment gear.

This long-term credit metric strategy is targeted to provide more than 300 basis points of cushion above the downgrade trigger at any point in our forecast period, which we believe is an appropriate level of planned headroom to absorb potential exogenous events, such as volatility in weather, commodity prices, interest rates, and the timing of regulatory outcomes.

In short, our objective is not to maximize a single single credit metric, but to intentionally manage the balance sheet to sustain Triple B plus through the capitol cycle.

Justin Forsberg: Due to our strengthened balance sheet and credit cushion, we believe we can forgo high-volume equity issuances while utilizing the ATM for modest equity needs, as well as the reestablished holdco leverage capacity as financing levers. Just as importantly, this approach directly supports our stockholder value framework. By maintaining visible headroom above downgrade thresholds, we believe this discipline will preserve lower-cost capital access and create the foundation for consistent annual dividend growth, while retaining important flexibility during peak investment years. In short, our objective is not to maximize a single credit metric, but to intentionally manage the balance sheet to sustain triple B plus through the capital cycle. That discipline allows us to fund growth efficiently, protect our investment-grade profile, and deliver durable long-term value to stockholders.

That discipline allows us to fund growth efficiently. Protect our investment grade profile and deliver durable long-term value to stockholders.

Due to our strength and balance sheet and credit cushion. We believe we can forego high-volume Equity issuances, while utilizing the ATM for modest Equity needs as well as the reestablished hoco leverage capacity as financing levers.

As we highlighted on the prior slide maintaining strong credit metrics as a core priority, for both Southwest Gas Holdings and Southwest Gas Corporation. Slide 18, reinforced structure liquidity position and ratings profile support that commitment and provide flexibility as we execute our plan.

On a Consolidated basis. Total net debt at year end 2024 was approximately 3.2 billion dollars after adjusting for the nearly 600 million dollars of cash on hand and the roughly $300 million of purchase, gas costs or PGA balances.

notably, all of our outstanding debt is held by the utility

In short, our objective is not to maximize a single single credit metric, but to intentionally manage the balance sheet to sustain Triple B plus through the capitol cycle.

You'll see all of our current credit ratings on the right hand side of the slide, both entities, maintain, solid investment grade profiles with stable, outlooks from all 3 major agencies.

That discipline allows us to fund growth efficiently, protect our investment grade profile, and deliver durable, long-term value to stockholders.

Justin Forsberg: As we highlighted on the prior slide, maintaining strong credit metrics is a core priority for both Southwest Gas Holdings and Southwest Gas Corporation. Slide 18 reinforces how our current capital structure, liquidity position, and ratings profile support that commitment and provide flexibility as we execute our plan. On a consolidated basis, total net debt at year-end 2025 was approximately $3.2 billion, after adjusting for the nearly $600 million of cash on hand and the roughly $300 million of purchased gas costs, or PGA balances. Notably, all of our outstanding debt is held by the utility. You'll see all of our current credit ratings on the right-hand side of the slide. Both entities maintain solid investment-grade profiles with stable outlooks from all three major agencies.

Strategy.

The company has paid a dividend every year since 1956 reflecting, the durability of our regulated utility model,

As we highlighted on the prior slide maintaining strong credit metrics as a core priority, for both Southwest Gas Holdings and Southwest Gas Corporation, slide, 18 reinforces how our current capital structure, liquidity position and ratings, profile support that commitment and provide flexibility as we execute our plan.

Today, we announced that our board approved a 4% increase in the annual dividend, bringing it to an annualized 2 hours and 58 cents per share for 2026.

From 2.48 cents previously.

On a Consolidated basis. Total net debt at year end, 2025 was approximately 3.2 billion dollars after adjusting, for the nearly 600 million dollars of cash on hand and the roughly $300 million of purchase, gas costs or PGA balances.

notably, all of our outstanding debt is held by the utility

We intend to recommend future annual dividend increases to the board while maintaining a disciplined strategy focused on investing more than 6 billion dollars in the company's Capital plans and sustaining responsible annual dividend growth.

Justin Forsberg: Turning to slide 19, returning value to stockholders through consistent dividend growth remains a core component of our long-term strategy. The company has paid a dividend every year since 1956, reflecting the durability of our regulated utility model. Today, we announced that our board approved a 4% increase in the annual dividend, bringing it to an annualized $2.58 per share for 2026, up from $2.48 previously. We intend to recommend future annual dividend increases to the board while maintaining a disciplined strategy focused on investing more than $6 billion in the company's capital plans and sustaining responsible annual dividend growth.

You'll see all of our current credit ratings on the right-hand side of the slide. Both entities maintain solid investment grade profiles with stable outlooks from all three major agencies.

During the slide. 19 return value to stockholders through consistent dividend growth remains at core component of our long-term strategy.

Looking further ahead is earnings and cash flows. Strengthened, particularly as the plan 2028, Great Basin project comes into service. And as projected regulatory outcomes, improve this disciplined framework creates meaningful upside potential for larger dividend increases over time, as cash earnings grow

Of our regulated utility model.

Moving out of slide 21. I'll walk through our newly initiated 2026 and forward-looking financial guidance.

Today, we announced that our board approved a 4% increase in the annual dividend, bringing it to an annualized $2.58 per share for 2026, up from $2.48 previously.

We are initiating both 2026, guidance, and long-term targets that reflect our current expectations for improvement in the regulatory construct, in both Arizona and Nevada, as well as the projected contribution from the potential 2028. Great Basin Expansion Project.

Building on strong, 2025 performance as a base year.

Justin Forsberg: Looking further ahead, as earnings and cash flows strengthen, particularly as the planned 2028 Great Basin project comes into service and as projected regulatory outcomes improve, this disciplined framework creates meaningful upside potential for larger dividend increases over time as cash earnings grow. Moving now to slide 21, I'll walk through our newly initiated 2026 and forward-looking financial guidance. We are initiating both 2026 guidance and long-term targets that reflect our current expectations for improvement in the regulatory construct in both Arizona and Nevada, as well as the projected contribution from the potential 2028 Great Basin expansion project. Building on strong 2025 performance as a base year, we are initiating 2026 EPS guidance to land in the range of $4.17 to $4.32 per share.

We intend to recommend future annual dividend increases to the Board while maintaining a disciplined strategy focused on investing more than $6 billion in the Company's capital plans and sustaining responsible annual dividend growth.

We are initiating 2026, EPS guidance to land in the range of 4.17 to 4.32 cents per share.

We expect the primary drivers of our projected performance to be continued, operating margin expansion at Southwest Gas supported by ongoing customer growth and rate relief across all our jurisdictions.

Looking further ahead, as earnings and cash flows strengthen—particularly as the Plan 2028 Great Basin project comes into service—and as projected regulatory outcomes improve, this disciplined framework creates meaningful upside potential for larger dividend increases over time as cash earnings grow.

In addition, we expect meaningfully lower interest, expense related to hold code debt following the elimination of all debt outstanding at that level,

Moving out of slide 21, I'll walk through our newly initiated 2026 and forward-looking financial guidance.

while further outline the underlying assumption supporting our plans on the next slide.

Overall, the combination of strong core utility fundamentals and a more solid capital structure supports our confidence in the 2026 earnings Outlook.

Building on strong, 2025 performance as a base year.

Looking further out. We are targeting a 5-year, adjusted, EPS compound annual growth, rate of 12 to 14% through 2030.

This growth trajectory.

Justin Forsberg: We expect the primary drivers of our projected performance to be continued operating margin expansion at Southwest Gas, supported by ongoing customer growth and rate relief across all our jurisdictions. In addition, we expect meaningfully lower interest expense related to holdco debt, following the elimination of all debt outstanding at that level. I'll further outline the underlying assumptions supporting our plans on the next slide. Overall, the combination of strong core utility fundamentals and a more solid capital structure supports our confidence in the 2026 earnings outlook. Looking further out, we are targeting a five-year adjusted EPS compound annual growth rate of 12% to 14% through 2030.

We are initiating 2026, EPS guidance to land in the range of 4.17 to 4.32 cents per share. We expect the primary drivers of our projected performance to be continued, operating margin expansion at Southwest Gas supported by ongoing customer growth and rate relief across all our jurisdictions.

Using an adjusted 2025 base year. Reflects continued customer editions expected Improvement in rate relief, mechanisms and discipline cost management. Along with incremental earnings from the Expansion Project at Great Basin. As we currently expect it to come into service in late 2028.

In addition, we expect meaningfully lower interest, expense related to hold code debt following the elimination of all debt outstanding at that level,

We'll further outline the underlying assumptions supporting our plans on the next slide.

Overall, the combination of strong core utility fundamentals and a more solid capital structure supports our confidence in the 2026 earnings outlook.

As Karen mentioned earlier, we currently expect our growth rate to be front-end loaded through 2028 and 2029 with about a 15 to 17% EPS growth rate over those periods. Depending on how you model the timing of construction spending and Associated afdc earnings, as well as the anticipated Improvement in earned rois from 2026 to 2028.

Justin Forsberg: This growth trajectory, using an adjusted 2025 base year, reflects continued customer additions, expected improvement in rate relief mechanisms, and disciplined cost management, along with incremental earnings from the expansion project at Great Basin, as we currently expect it to come into service in late 2028. As Karen mentioned earlier, we currently expect our growth rate to be front-end loaded through 2028 and 2029, with about a 15% to 17% EPS growth rate over those periods, depending on how you model the timing of construction spending and associated AFUDC earnings, as well as the anticipated improvement in earned ROEs from 2026 to 2028. As Justin Brown mentioned a moment ago, large projects are always subject to regulatory approvals, permitting outcomes, and supply chain dynamics, and our robust plan is also contingent on regulatory outcomes.

Looking further out. We are targeting a 5-year, adjusted, EPS compound, annual growth, rate of 12 to 14% through 2030. This growth trajectory

As Justin Brown mentioned a moment ago, large projects are always subject to regulatory approvals permitting, outcomes and supply chain Dynamics. And our robust plan is also contingent on regulatory outcomes.

We expect robust rate based growth supported by Capital expenditures of approximately 1.25 billion dollars in 2026. With a total of approximately 6.3 billion for the 5 years ending in 2030.

This Capital plan is focused on safety. Sifted system, Integrity, reliability, and new business distribution system, growth in the utility. Along, with the incremental investment required, to support the growing transmission business.

We are also initiating a 5-year rate based kegger of 9.5% to 11.5%. Also starting from a 2025 base which is approximately 6.7 billion dollars.

Justin Forsberg: We expect robust rate base growth, supported by capital expenditures of approximately $1.25 billion in 2026, with a total of approximately $6.3 billion for the five years ending in 2030. This capital plan is focused on safety, system integrity, reliability, and new business distribution system growth of the utility, along with the incremental investment required to support the growing transmission business. We are also initiating a five-year rate base CAGR of 9.5% to 11.5%, also starting from a 2025 base, which is approximately $6.7 billion. Notably, when excluding the 2028 Great Basin expansion project, our run rate utility rate base growth is expected to be about 7% annually over the same period.

Notably when excluding the 2028 Great Basin Expansion Project our run rate utility rate based growth is expected to be about 7% annually over the same period.

Now, turning to slide 2022.

We Show additional detail on the fundamental drivers and financing assumptions that underpin our guidance Outlook through 2030.

We expect robust rate based growth supported by Capital expenditures of approximately 1.25 billion dollars in 2026. With a total of approximately 6.3 billion for the 5 years ending in 2030.

This capital plan is focused on safety, system integrity, reliability, and new business distribution system growth in the utility, along with the incremental investment required to support the growing transmission business.

Beginning with margin our plan reflects a clear regulatory Cadence across our jurisdictions as Justin previously, outlined the potential implementation of formula and alternative base rate mechanisms in both Arizona and Nevada are expected to meaningfully impact margin. As we refresh rates and implement, the expected regulatory improvements

Further out we expect incremental contributions, from our other jurisdictions.

We are also initiating a 5-year rate based kegger of 9.5% to 11.5%. Also starting from a 2025 base which is approximately 6.7 billion dollars.

Supporting this regulatory roadmap. We expect steady customer growth of approximately 1.4% annually across our service territories.

Notably when excluding the 2028 Great Basin Expansion Project our run rate utility rate based growth is expected to be about 7% annually over the same period.

Justin Forsberg: Now turning to slide 22, we show additional detail on the fundamental drivers and financing assumptions that underpin our guidance outlook through 2030. Beginning with margin, our plan reflects a clear regulatory cadence across our jurisdictions. As Justin previously outlined, the potential implementation of formula and alternative-based rate mechanisms in both Arizona and Nevada are expected to meaningfully impact margin as we refresh rates and implement the expected regulatory improvements. Further out, we expect incremental contributions from our other jurisdictions. Supporting this regulatory roadmap, we expect steady customer growth of approximately 1.4% annually across our service territories. For O&M, we remain focused on operational discipline with our target to keep O&M flat on a per-customer basis, excluding the non-service component of pension costs.

Now, turning to slide 2022.

On a per customer basis, excluding the non-service component of pension costs.

We show additional detail on the fundamental drivers and financing assumptions that underpin our guidance outlook through 2030.

We assume approximately 6 to 7 million dollars, annually, from company-owned life insurance. And we plan for normal natural, gas price fluctuations based on current forward pricing curves over the planning Horizon.

Beginning with margin our plan reflects a clear regulatory Cadence across our jurisdiction as Justin previously, outlined the potential implementation of formula and alternative base rate mechanisms in both Arizona and Nevada are expected to meaningfully impact margin. As we refresh rates and implement, the expected regulatory improvements

With respect to income taxes. We expect that utilizing existing net, operating losses should M minimize cash, tax payments and result in an effective tax rate in the High Teens, barring any future, corporate income tax policy changes.

Further out, we expect incremental contributions from our other jurisdictions.

Supporting this regulatory roadmap. We expect steady customer growth of approximately 1.4% annually across our service territories.

We utilize currently anticipated forward, corporate debt curves as we model interest expense. When incorporating future Bond issuances, the timing of bond issuances is consistent with the capital plan, we outlined earlier, as I mentioned, our strategy is designed to preserve balance, sheet, strength, and flexibility while funding our elevated. Capital plan back to you Karen.

Justin Forsberg: We assume approximately $6 to 7 million annually from company-owned life insurance. We plan for normal natural gas price fluctuations based on current forward pricing curves over the planning horizon. With respect to income taxes, we expect that utilizing existing net operating losses should minimize cash tax payments and result in an effective tax rate in the high teens, barring any future corporate income tax policy changes. We utilize currently anticipated forward corporate debt curves as we model interest expense when incorporating future bond issuances. The timing of bond issuances is consistent with the capital plan we outlined earlier. As I mentioned, our strategy is designed to preserve balance sheet strength and flexibility while funding our elevated capital plan. Back to you, Karen.

For onm, we remain focused on operational discipline with our Target to keep onm flat on a per customer basis, excluding the non-service component of pension costs.

6 to 7 million dollars, annually, from company-owned, life insurance and we plan for normal natural, gas price fluctuations based on current forward pricing curves over the planning Horizon.

Thank you, j4. Before we move into the Q&A portion of the call, I'd like to draw your attention to slide 23 where we highlight our commitment to delivering exceptional customer service, discipline financial management. Maintaining a constructive regulatory engagement and preserving strategic flexibility while advancing our strategic priorities and achieving strong financial performance.

With respect to income taxes, we expect that utilizing existing net operating losses should minimize cash tax payments and result in an effective tax rate in the high teens, barring any future corporate income tax policy changes.

I am confident in our trajectory as a leading Pure Play.

Fully regulated natural gas business.

The team is focused on ensuring we safely reliably and affordably meet the needs of our customers every day, in order to deliver value to our stockholders,

With that, let's open the call for questions.

As I mentioned, our strategy is designed to preserve balance sheet strength and flexibility, while funding our elevated capital plan.

Karen: Thank you, J4. Before we move into the Q&A portion of the call, I'd like to draw your attention to slide 23, where we highlight our commitment to delivering exceptional customer service, disciplined financial management, maintaining a constructive regulatory engagement, and preserving strategic flexibility while advancing our strategic priorities and achieving strong financial performance. I am confident in our trajectory as a leading pure-play, fully regulated natural gas business. The team is focused on ensuring we safely, reliably, and affordably meet the needs of our customers every day in order to deliver value to our stockholders. With that, let's open the call for questions.

Karen Haller: Thank you, J4. Before we move into the Q&A portion of the call, I'd like to draw your attention to slide 23, where we highlight our commitment to delivering exceptional customer service, disciplined financial management, maintaining a constructive regulatory engagement, and preserving strategic flexibility while advancing our strategic priorities and achieving strong financial performance. I am confident in our trajectory as a leading pure-play, fully regulated natural gas business. The team is focused on ensuring we safely, reliably, and affordably meet the needs of our customers every day in order to deliver value to our stockholders. With that, let's open the call for questions.

Back to you, Karen.

Thank you. If you wish to ask a question, please press star then the number 1 on your telephone keypad.

You may remove your cell from The Key by pressing start to.

We'll take our first question from Julian, dumolin Smith from Jeffrey. Your line is now open.

Thank you, J4. Before we move into the Q&A portion of the call, I'd like to draw your attention to slide 23, where we highlight our commitment to delivering exceptional customer service and disciplined financial management, maintaining constructive regulatory engagement, and preserving strategic flexibility while advancing our strategic priorities and achieving strong financial performance.

I am confident in our trajectory as a leading pure play.

Hey, good morning, team, uh, just really nicely done. I got to say at the outset that this incredible update lots to ask here but really got acknowledged at the outset and obviously um, Karen and Justin um, congrats to each of you respectively here, uh really uh, great. High note here. Um,

Fully regulated natural gas business.

The team is focused on ensuring we safely, reliably, and affordably meet the needs of our customers every day, in order to deliver value to our stockholders.

With that, let's open the call for questions.

Operator: Thank you. If you wish to ask a question, please press star, then the number 1 on your telephone keypad. You may remove yourself from the queue by pressing star 2. We'll take our first question from Julien Dumoulin-Smith from Jefferies. Your line is now open.

Thank you. If you wish to ask a question, please press star, then the number 1 on your telephone keypad.

You may remove your cell from the queue by pressing star 2.

We will take our first question from Julian, dumolin Smith from Jeffrey. Your line is now open.

Julien Dumoulin-Smith: Hey, good morning, team. Just really nicely done, I got to say at the outset, that was an incredible update. Lots to ask here, but really got to acknowledge it at the outset. Obviously, Karen, Justin, congrats to each of you respectively here. Really great high note here. If I can pivot into the questions real quickly, though, just to kind of start at the top, I'm sure others will have a bunch. Just talk about the equity, right? I mean, big plan, big chunk that you guys are biting off here. How do you think about the timing of equity? Have you engaged with the rating agencies? To what extent are you going to get some latitude or give yourselves latitude in the FFO metrics through the construction cycle here? Just trying to gauge.

If if if I can pivot into the questions real quickly though, um, just to to kind of start at the top, I'm sure others will have a bunch, um, just talk about the equity, right? I mean, big plan, big chunk that you guys are biting off here. How do you think about the timing of equity have you engaged with the rating agencies? So what extent are you going to get some latitude or give yourselves latitude in the effort of metrics through the construction cycle here? Just trying to gauge. Obviously, you've disclosed 26, Equity, or lack thereof. But how are you thinking about the ramp? Um, 2728? Um, and I, that's the first question I got to follow up

Hey, good morning, team, uh, just really nicely done. I got to say at the outset that this incredible update lots to ask here but really got acknowledged at the outset and obviously um, Karen Justin, um, congrats to each of you respectively here, uh, really uh, great. High note here. Um,

Julien Dumoulin-Smith: Obviously, you've disclosed 26 equity or lack thereof, but how are you thinking about the ramp, 27, 28, and that's the first question. I got a follow-up.

If if I can pivot into the questions real quickly though, um, just to to kind of start at the top, I'm sure others will have a bunch, um, just talk about the equity, right? I mean, big plan, big chunk that you guys are biting off here. How do you think about the timing of equity have you engaged with the rating agencies, to what extent are you going to get some latitude or give yourselves latitude in the F of metrics through the construction cycle here? Just trying to gauge. Obviously, you've disclosed 26, Equity, or lack thereof. But how are you thinking about the ramp? Um, 2728? Um, and that's the first question I got to follow up.

Karen: Thank you, first of all, I appreciate it. I'll let J4 answer that question.

Karen Haller: Thank you, first of all, I appreciate it. I'll let J4 answer that question.

Justin Forsberg: Yeah, I appreciate the question, Julien, and I think it's a good question. You know, when you think about, I'll start with kind of the credit metrics things. Like, obviously, we have more than 500 basis points above our downgrade threshold at this point, and we are committing to targeting that, of greater than 300 basis points in the plan. When you think about our anticipated equity needs for our capital plan at the utility, we think we can utilize some pretty significant leverage capacity as a holding company, you know, first to sort of offset those with really minimal equity needs. I think a way to think about it, obviously, as you mentioned, we don't anticipate anything needing anything in this year.

Thank you. First of all. I appreciate it. Um, and I'll let uh, Jay for answer that question. Yeah, I appreciate the questions Julian. I think it's a good question. You know, when you think about the, the I'll start with kind of the credit metrics things. Like obviously we have more than 500 basis points above our downgrade Threshold at this point and and we are committing to targeting that, um, up greater than 300 basis points in the plan. So, when you think about our anticipated Equity needs for our Capital plan at the utility, we think we can utilize, um, some pretty significant leverage capacity at the holding company. You know, first sort of offset those with really minimal, Equity needs. I think a way to think about it, obviously, as you mentioned we don't anticipate anything um, needing anything in this year. But you know, when you want to go for a basis, you know, I think the way I would put it is when you think about, uh, we have a shelf that expires at the end of 2026, we'll be renewing and extending that shelf, but we don't anticipate um upsizing our

existing 340 million ATM.

Yeah, that yeah, that yeah, I suppose that's a signaling in. And of itself is how you think about the total equities, you'll need to the plan, right?

Justin Forsberg: When you want to go forward basis, you know, I think the way I would put it is when you think about, we have a shelf that expires at the end of 2026, we'll be renewing and extending that shelf, but we don't anticipate upsizing our existing $340 million ATM.

Thank you. First of all. I appreciate it. Um, and I'll let uh, Jay for answer that question. Yeah, I appreciate the questions Julian. I think it's a good question. You know, when you think about the, the I'll start with kind of the credit metrics things. Like obviously we have more than 500 basis points above our downgrade Threshold at this point and and we are committing to targeting that greater than 300 basis points in the plan. So, when you think about our anticipated Equity needs for our Capital plan at the utility, we think we can utilize, um, some pretty significant leverage capacity in the holding company. You know, first, a sort of offset those with really minimal, Equity needs. I think a way to think about it, obviously is you mentioned. We don't anticipate anything um, needing anything in this year. But you know when you want to go for a basis, you know, I think the way I would put it is when you think about, uh, we have a shelf that expires at the end of 2026 will be renewing and extending that shelf, but we don't anticipate um upsizing our

Existing 340 million ATM.

Julien Dumoulin-Smith: Yeah. That, I suppose that's a signaling in and of itself as to how you think about the total equity needs you'll need through the plan, right?

Um, yeah, we think so. Excellent. And then, yeah, indeed. Thank you. And then, look, let's talk about the project itself, right? I mean you you talked about this um, capacity subscribed of nearly 800, um, mcf. Can you elaborate a little bit about the the total scope of the project here? I mean, obviously you got some incremental interest above that. Um, just talk a little bit about what the customer interest was and to the extent that the 1.7 could have ever go. Larger. I just want to try to tackle that here um at the outset as well just in terms of like the the the the total eventual opportunity here and or any other interests that that has emerged here. I mean you talk about data centers in Nevada and ultimately serve that that kind of customer load. What are you seeing on that front just to to hit that um as well.

Yeah, that yeah, that yeah, I suppose that's a signaling in and of itself is how you think about the total equities you'll need through the plan, right?

Justin Forsberg: Yep. Yeah, we think so.

Julien Dumoulin-Smith: Excellent. Yeah, indeed. Thank you. Look, let's talk about the project itself, right? I mean, you talk about this capacity subscribed of nearly 800 Mcf. Can you elaborate a little bit about the total scope of the project here? I mean, obviously, you got some incremental interest above that. Just talk a little bit about what the customer interest was and to the extent that the 1.7 could have ever go larger. I just want to try to tackle that here at the outset as well, just in terms of, like, the total eventual opportunity here and/or any other interest that does emerge here. I mean, you talk about data centers in Nevada and ultimately serve that kind of customer load. What are you seeing on that front?

Julien Dumoulin-Smith: Just to hit that, as well.

Justin Forsberg: Yeah. Hey, Julien, it's Justin. Yeah, to your point, you know, we went through kind of elongated multi open season process last year, and a lot of that was driven by just different inbound inquiries we received. I think as we've described in the past, at some point in time, we had to, you know, kind of coalesce around an in-service date that the majority were focused on, so we picked the 2028 number. That's really kind of what we locked in on those customers that were interested in service by, you know, kind of end of calendar year 28, we had to kind of draw the line.

Um, yeah, we think so. Excellent. And then, yeah, indeed. Thank you. And then, look, let's talk about the project itself, right? I mean you you talked about this um, capacity subscribed of nearly 800, um, mcf. Can you elaborate a little bit about the the total scope of the project here? I mean, obviously you got some incremental interest above that. Um, just talk a little bit about what the customer interest was and to the extent that the 1.7 could have ever go. Larger. I just want to try to tackle that here um at the outset as well just in terms of like the the the the total eventual opportunity here and or any other interests that that has emerged here. I mean you talk about data centers in Nevada and ultimately serve that that kind of customer logo. What are you seeing on that front? Just to to hit that uh as well?

And process last year. And a lot of that was driven by just different inbound. Inquiries, we received and I think as we've described in the past at some point, in time, we had to, you know, kind of coalesce around an in-service date that the majority were focused on. And so we picked the 2028 number and that's really kind of what we locked in on those customers that were interested in service by, you know, kind of end a calendar year 28, we had to kind of draw the line. And so, I think to your point when we think about kind of future demand future interest, I think, you know, there's definitely some there because we had received uh, much more inbound requests than what actually signed up. But again, I think you have to look at it in terms of kind of the timing of the different interests and people's projects and kind of what they anticipate timing. So I think a couple things as we move forward that I would, I would encourage you to think about is is 1 as we continue to work on the design aspects. Um, you know, obviously when we have

Justin Forsberg: I think to your point, when we think about kind of future demand, future interest, I think, you know, there's definitely some there because we had received much more inbound requests than what actually signed up. Again, I think you have to look at it in terms of kind of the timing of the different interests and people's projects and kind of what they anticipate timing. I think a couple of things as we move forward that I would encourage you to think about is one, as we continue to work on the design aspects, you know, obviously, when we have, you know, signed up capacity at a certain dekatherm a day-

Have you know, signed up capacity at a certain deck of them a day when you design the system, it doesn't come in at that exact number, it's virtually impossible. So we're going to when we complete the design, we'll compare that, you know, design a kind of efficient design to what capacity it'll actually hold. If there's an opportunity to do a supplemental Open Season to fill up any remaining capacity based on the design, we'll do that. I think we feel confident that there's demand there and interests that people would take that and then

I think when we think about dates Beyond 2028, we'll continue to work with prospective shippers on kind of what their interest is, what their timing is. And we can always look to evaluate, you know, again, kind of a, maybe another open season for a different date down the road.

Justin Brown: when you design the system, it doesn't come in at that exact number. It's virtually impossible. When we complete the design, we'll compare that, you know, design, kind of efficient design to what capacity it'll actually hold. If there's an opportunity to do a supplemental open season to fill up any remaining capacity based on the design, we'll do that. I think we feel confident that there's demand there and interest that people would take that. I think when we think about dates beyond 2028, we'll continue to work with prospective shippers on kind of what their interest is, what their timing is, and we can always look to evaluate, you know, again, kind of a, maybe another open season for a different date down the road.

We've described in the past at some point in time, we had to, you know, kind of coalesce around an inservice date that the majority were focused on. And so we picked the 2028 number and that's really kind of what we locked in on those customers that were interested in service by, you know, kind of end a calendar year 28, we had to kind of draw the line. And so, I think to your point when we think about kind of future demand future interest, I think, you know, there's definitely some there because we had received uh, much more inbound requests than what actually signed up. But again, I think you have to look at it in terms of kind of the timing of the different interests and people's projects and kind of what they anticipate timing. So I think a couple things as we move forward that I would, I would encourage you to think about is is 1 as we continue to work on the design aspects. Um you know, obviously when we have, you know, signed up capacity at a certain deck of them a day when you design the system, it doesn't come in at that exact.

Right. Last Nuance here. If I can squeeze it in just the Cadence of earnings uplift. I mean, obviously it's back and waited here. But can you speak to, you know, the that as well as the what you're thinking on, um, closing the gap on on lag here in Arizona and Nevada, as well as part of this, uh, updated plan.

The exact number—it's virtually impossible. So we're going to, when we complete the design, we'll compare that, you know, design, a kind of efficient design, to what capacity it'll actually hold. If there's an opportunity to do a supplemental Open Season to fill up any remaining capacity based on the design, we'll do that. I think we feel confident that there's demand there and interest, that people would take that. And then I think, when we think about dates beyond 2028, we'll continue to work with prospective shippers on.

Kind of what their interest is what their timing is. And we can always look to evaluate, you know, again, kind of a, maybe another open season for a different date down the road.

Julien Dumoulin-Smith: Right. Last nuance here, if I can squeeze it in, just the cadence of earnings uplift. I mean, obviously, it's back-end weighted here, but can you speak to, you know, that as well as the, what you're thinking on closing the gap on lag here in Arizona and Nevada as well as part of this updated plan?

Justin Brown: I'll start with kind of the regulatory construct and kind of how we're looking about, you know, our continual effort and focus on reducing regulatory lag in our jurisdiction. Obviously, as I mentioned in my prepared remarks, you know, this next couple of years is gonna be very big for us in terms of we've got two sizable rate cases we're getting ready to file. We think they're really gonna be a catalyst moving forward in terms of being able to request formula rate adjustments as part of the rate case or in Nevada's case, you know, as using this rate case as kind of the springboard for that.

Yeah, I'll I'll uh I'll start with kind of the, the regulatory construct and kind of how we're looking about, you know, our continual effort and focus on, reducing regulatory lag in our jurisdiction. So obviously, as I mentioned, uh, in my prepared remarks, you know, this, uh, this next couple of years is going to be very big for us. In terms of, we've got 2 sizable rate cases, we're getting ready to file. We think they're really going to be a catalyst, uh, moving forward. In terms of being able to request um, formula rate adjustments as part of the rate case or or uh, in Nevada's case, you know, you know, as using this rate cases as kind of the springboard for that. And so I think when we think about kind of those mechanisms and how they're going to be designed, obviously each state is going to be a little bit different, but I think you can look at the UN.

Gas, gas decision from last week. And I think that's a pretty good proxy when you think about the facts and circumstances of UNS gas kind of triangulating that with the policy statement. And then some of the other proposals that are pending, you know, I think we've always said we kind of look at, you know, hopefully being able to, you know, reduce kind of what has been kind of our historical, um, gap of of 160 basis, points, between on any time, I think in combination with Nevada and Arizona, we're hoping to, to cut off about a 100 basis points is what our what our goal is so

Justin Brown: I think when we think about kind of those mechanisms and how they are going to be designed, obviously each state is going to be a little bit different. I think you can look at the UNS Gas decision from last week, and I think that is a pretty good proxy when you think about the facts and circumstances of UNS Gas, kind of triangulating that with the policy statement and then some of the other proposals that are pending. You know, I think we've always said we kind of look at, you know, hopefully being able to, you know, reduce kind of what has been kind of our historical gap of 160 basis points between on any time. I think in combination with Nevada and Arizona, we are hoping to cut off about 100 basis points is what our goal is, so.

Yeah, I'll I'll uh I'll start with kind of the, the regulatory construct and kind of how we're looking about, you know, our continual effort and focus on, reducing regulatory lag in our jurisdiction. So obviously, as I mentioned, uh, in my prepared remarks, you know, this, uh, this next couple years is going to be very big for us. In terms of we've got 2 sizes of rate cases, we're getting ready to file. We think they're really going to be a catalyst, uh, moving forward. In terms of being able to request um, formula rate adjustments as part of the rate case or or uh, in Nevada's case, you know, you know, as using this rate cases as kind of the springboard for that. And so I think when we think about kind of those mechanisms and how they're going to be designed, obviously each State's going to be a little bit different, but I think you can look at the ins gas decision from last week and I think that's a pretty good proxy when you think about the facts and circumstances of you.

Yeah, Julie and I can hit talk a little bit more about the case and just like Karen and I both mentioned, right their guidance and CFS is really more front-end loaded, uh which I think is kind of what you're getting at. Like we have the run, run rate rate based growth for the underlying LDC of about 7% which really supports something that you kind of sort of model if you will through the whole 5 year plan at that, at that

Justin Forsberg: Julian, I can hit, talk a little bit more about the case. Just like Karen and I both mentioned, right, their guidance, the EPS, is really more front-end loaded, which I think is kind of what you're getting at, right? We have the run rate base growth at the underlying LDC of about 7%, which really supports something that you kind of sort of model, if you will, through the whole five-year plan at that, at that earnings trajectory. Because as we tighten up that lag, it should be aligned pretty well with rate base growth, the earnings, EPS growth should be, especially with the minimal equity issuances expectations.

S gas kind of triangulating that with the policy statement. And then some of the other proposals that are pending, you know, I think we've always said we kind of look at, you know, hopefully being able to, you know, reduce kind of what has been kind of our historical, um, gap of of 160 basis, points, between on any time, I think in combination with Nevada and Arizona, we're hoping to, to cut off about a 100 basis points is what our what our goal is so

Earnings trajectory because it was, as we tighten up that lag, it should be aligned pretty well with with rate based growth earnings, EPS growth should be, especially with the minimal Equity issuances expectations. But I think when you think about these other things that Justin just mentioned, plus the inservice anticipated, a Great Basin. Um that's where I pointed to the you know, we see about 15 to 17% EPS growth rate over over sort of that 28 to 29 from now.

Excellent. Thank you guys for clarifying. Best of luck on Google grass. Again, I got to say

Thanks Julie. Thank you.

Your next question comes from the line of Eli josen from JP Morgan Chase. Your line is now open.

Yeah, Julia I can hit talk a little bit more about the case. Just like Karen and I both mentioned right, they're guidance. CPS is really more front end loaded, which I think is kind of what you're getting at. Like we have the run run, run rate rate based growth for the underlying LDC of about 7% which really supports something that you can kind of sort of model if you will through the whole 5 year plan at that, at that.

Justin Forsberg: I think when you think about these other things that Justin just mentioned, plus the in-service anticipated at Great Basin, that's where I pointed to the, you know, we see about 15% to 17% EPS growth rate over sort of that 2028 to 2029 from now.

2030 when we start to see the full benefit of Great Basin, um what that earnings contribution could look like on a run rate basis and you know because it I I think about some real inflection sort of in that 2030 time period based on those earnings contributions. Thanks.

Earnings trajectory because it was, as we tighten up that lag, it should be aligned pretty well with with rate based growth earrings. The EPS growth should be, especially with the minimal Equity issuances expectations. But I think when you think about these other things that Justin just mentioned, plus the inservice anticipated, a Great Basin. Um that's where I pointed to the you know, we see about 15 to 17% EPS growth rate over over sort of that 28 to 29 from now.

Julien Dumoulin-Smith: Excellent. Thank you guys for clarifying. Best of luck and congrats again, I got to say.

Justin Forsberg: Thanks, Julian.

Justin Brown: Thank you.

Excellent. Thank you, guys, for clarifying. Best of luck in Google Ads. Again, I’ve got to say.

Thanks Julie. Thank you.

Operator: Your next question comes from the line of Eli Josan from JPMorgan Chase. Your line is now open.

Eli Josan: Hey, guys. Thanks. Maybe just thinking about the kind of post-Great Basin in-service earnings contribution. I know you've talked quite a bit about, you know, the back half versus the front half of the earnings CAGR. Can you just talk about maybe in 2030, when we start to see the full benefit of Great Basin, what that earnings contribution could look like on a run rate basis? You know, because I can, I think about some real inflection sort of in that 2030 time period based on those earnings contributions. Thanks.

Elias Josan: Hey, guys. Thanks. Maybe just thinking about the kind of post-Great Basin in-service earnings contribution. I know you've talked quite a bit about, you know, the back half versus the front half of the earnings CAGR. Can you just talk about maybe in 2030, when we start to see the full benefit of Great Basin, what that earnings contribution could look like on a run rate basis? You know, because I can, I think about some real inflection sort of in that 2030 time period based on those earnings contributions. Thanks.

Your next question comes from the line of Eli Josen from JPMorgan Chase. Your line is now open.

Yeah Eli I think that's where we can point to the margin that that we that Justin mentioned, right? The 215 million to 245 million expected margin that we will get out of Great Basin and and with the with the sort of end of the year toward the end of the year, in service date, in 2028, that margin contribution is expected fully in 29 and in 30 because you, I'll just remind, you know, you and everybody on the call that we are expecting once we

Uh, you know, prior to inservice that we would execute minimum 20 year transportation service agreements.

And you know cuz it I I think about some real inflection sort of in that 2030 time. Period based on those earnings contributions. Thanks.

that we would bring in in that margin and then, so that's kind of the great basing contribution if you will, for those outer 2 years to margin and then you've got, as I mentioned, a moment ago, the 7% kind of rate based growth in the underlying utility

Justin Forsberg: Yeah, Eli. I think that's where we can point to the margin that Justin mentioned, right? The $215 million to $245 million expected margin that we'll get out of Great Basin. With a sort of end of the year, toward the end of the year in-service date, 2028, that margin contribution expected fully in 2029 and in 2030. Because I'll just remind, you know, you and everybody on the call that we are expecting once we, you know, prior to in-service, that we would execute minimum 20-year transportation service agreements, that we would bring in that margin. That's kind of the Great Basin contribution, if you will, for those outer two years to margin.

Yeah Eli I think that's where we can point to the margin that that we that Justin mentioned, right? That 215 million to 245 million expected margin that we will get out of Great Basin and and with the with the sort of end of the year toward the end of the year in service date in 2028.

Got it and then yeah, I think you touched on it a bit in the previous response. But just if we think about sort of the language in the slides that discuss rate case outcomes in line with historical experience, can we just bifurcate that between sort of percentage of asked in the rate case outcomes themselves but then if the formula rate adjustments would be incremental to that. Um,

um, and just think about the earnings contributions from those and that language, specifically,

That margin contribution, expected fully in 2019 and in '30. Um, because you—I'll just remind you and everybody on the call that we are expecting, once we—

Uh, you know, prior to in-service, we would execute a minimum 20-year transportation service agreements.

Justin Forsberg: You've got, as I mentioned a moment ago, the 7% kind of rate base growth of the underlying utility.

Hey, Eli, it's Justin. Yeah, I think that's a, that's a fair way to look at it in terms of kind of just our historical uh, success if you will in terms of the spread between our ask and what we receive. Um and and I think that's that's a reasonable way to look at it.

That we were bringing in that margin, and then so that's kind of the great basing contribution, if you will, for those outer two years to margin. And then you've got, as I mentioned a moment ago, the 7% kind of rate-based growth in the underlying utility.

Eli Josan: Got it. You know, I think you touched on a bit in the previous response, but just if we think about sort of the language in the slides that discuss rate case outcomes in line with historical experience, can we just bifurcate that between sort of percentage of ask in the rate case outcomes themselves? If the formula rate adjustments would be incremental to that, and just think about the earnings contributions from those and that language specifically.

Elias Josan: Got it. You know, I think you touched on a bit in the previous response, but just if we think about sort of the language in the slides that discuss rate case outcomes in line with historical experience, can we just bifurcate that between sort of percentage of ask in the rate case outcomes themselves? If the formula rate adjustments would be incremental to that, and just think about the earnings contributions from those and that language specifically.

Great. Thanks guys.

Your next question comes from the line of Chris ellinghaus from seybert, William shank, your line is now open.

Hey everybody, how are you? Uh, congratulations, Karen and Justin uh have a great uh retirement Karen.

um,

I really appreciate the new disclosures by the way.

Um, Justin can you talk about the

Got it, and then—yeah, I think you touched on it a bit in the previous response. But just, if we think about sort of the language in the slides that discuss rate case outcomes in line with historical experience, can we just bifurcate that between sort of percentage of asked in the rate case outcomes themselves, but then if the formula rate adjustments would be incremental to that? Um, and just think about the earnings contributions from those and that language, specifically.

Justin Brown: Hey, Eli, it's Justin. Yeah, I think that's a fair way to look at it in terms of kind of just our historical success, if you will, in terms of the spread between our ask and what we receive. I think that's a reasonable way to look at it.

progress in the Nevada workshops thus far and and any thoughts you have

Hey, Chris. Yeah, uh you bet so um,

Hey, Eli, it's Justin. Yeah, I think that's a—that's a fair way to look at it in terms of kind of just our historical, uh, success, if you will, in terms of the spread between our ask and what we receive. Um, and I think that's—that's a reasonable way to look at it.

Eli Josan: Great. Thanks, guys.

Elias Josan: Great. Thanks, guys.

Great. Thanks guys.

Operator: Your next question comes from the line of Chris Ellinghaus from Siebert Williams Shank. Your line is now open.

Julien Dumoulin-Smith: Hey, everybody. How are you? Congratulations, Karen and Justin. Have a great retirement, Karen. I really appreciate the new disclosures, by the way.

Chris Ellinghaus: Hey, everybody. How are you? Congratulations, Karen and Justin. Have a great retirement, Karen. I really appreciate the new disclosures, by the way.

Your next question comes from the line of Chris Ellinghaus from Seaport. William Shank, your line is now open.

You know, the legislation was passed last summer, they held their first Workshop uh September held another 1 in January and February. And again it's just you know kind of working through putting together kind of draft language, draft regulations. I think the the good thing about the commission is they really kind of put an emphasis on trying to get consensus, among the stakeholders. So, there's a lot of work around, kind of just, you know,

Hey everybody, how are you? Uh, congratulations, Karen and Justin. Uh, have a great, uh, retirement account, and—

um,

Chris Ellinghaus (Sieber: Justin, can you talk about the progress in the Nevada workshops thus far and any thoughts you have?

I really appreciate the new disclosures by the way.

Chris Ellinghaus (Sieber: Justin, can you talk about the progress in the Nevada workshops thus far and any thoughts you have?

Um, just in—can you talk about the...

Progress in the Nevada workshops thus far, and any thoughts you have?

Justin Brown: Hey, Chris. Yeah, you bet. You know, the legislation was passed last summer. They held their first workshop, September, held another one in January and February. Again, it's just, you know, kind of working through, putting together kind of draft language, draft regulations. I think the good thing about the commission is they really kind of put an emphasis on trying to get consensus among the stakeholders. There's a lot of work around kind of just, you know, evaluating kind of the competing interests of different language people want, what's required by the legislation. There's just a lot of back and forth on working on that consensus. We had our last workshop was just last week, last Friday, I believe, and I think we feel pretty good about we're getting near the end.

Evaluating kind of the competing interests of different language. People want, what's required by the legislation so they're just a lot of back and forth on working on that consensus. Um, we had, uh, our last Workshop was just uh, last week last Friday I believe and I think we feel pretty good about we're getting near the end and so we anticipate, you know probably getting some kind of draft consensus uh regulations out from the commission here over the next month or 2.

okay, that helps

um, Visa V, the ins gas outcome, um, have you got any thoughts about Roe and

You know, relative to your discussion about the 100 basis, point Improvement targets. Um, does that incorporate? You know, your thoughts about where their head is on Roe?

Hey Chris. Yeah uh you bet so um you know the legislation was passed last summer, they held their first Workshop uh September helped another 1 in January and February. And again it's just you know kind of working through putting together kind of draft language draft regulations. I think the the good thing about the commission is they really kind of put an emphasis on trying to get consensus among the stakeholders. So, there's a lot of work around kind of just, you know, evaluating kind of the competing interests of different language. People want, what's required by the

Justin Brown: We anticipate, you know, probably getting some kind of draft consensus regulations out from the commission here over the next month or two.

Chris Ellinghaus (Sieber: Okay, that helps. Vis-a-vis the UNS Gas outcome, have you got any thoughts about ROE? You know, relative to your discussion about the 100 basis point improvement target, does that incorporate, you know, your thoughts about where their head is on ROE?

Legislation. So they're just a lot of back and forth on working on that consensus. Um, we had, uh, our last Workshop was just uh, last week last Friday I believe and I think we feel pretty good about we're getting near the end and so we anticipate you know, probably getting some kind of draft consensus uh regulations out from the commission here over the next month or 2.

okay, that helps

um,

Visa V, the ins gas outcome.

Uh yeah, Chris this is Justin again, I think I think generally speaking I mean that decision obviously just came out last week, but I think we've always kind of looked at that and and I think I think 1 of the things that we're going to see is that was I think 1 the very first decision the commission came out with and I thought that it was very much kind of directionally positive uh generally constructive and I think we're going to and I think they've said this all along that they want to kind of get cases in and kind of evaluate what they look like for each utility for for for large.

Um, have you got any thoughts about ROE and, you know, relative to your discussion about the 100 basis point improvement targets? Um, does that incorporate, you know, your thoughts about where

They're head is on Roe.

Justin Brown: Yeah. Chris, this is Justin again. I think generally speaking, I mean, that decision obviously just came out last week, but I think we've always kind of looked at that. I think one of the things that we're going to see is that was, I think, one, the very first decision the commission came out with, and I thought that it was very much kind of directionally positive, generally constructive. I think we're gonna. I think they've said this all along, that they want to kind of get cases in and kind of evaluate what they look like for each utility, for larger gas, smaller gas, electrics.

And and see where we end up with the different utilities.

Okay. And I, I guess this is uh, somewhat of

a, a difficult question but the the 7% sort of longer term base,

um,

Justin Brown: I think we're going to learn a lot more as APS and TEP kind of go through their process, then as we continue to work with stakeholders on ours. I think, you know, the good thing is I think the parameters are kind of there when you look at the different proposals, when you look at the policy statement, when you look at the recent UNS Gas case, that I think the fairway is kind of defined for everybody, so we'll be able to kind of all work and see where we end up with the different utilities.

Uh yeah, Chris this is Justin again, I think I think generally speaking I mean that decision obviously just came out last week, but I think we've always kind of looked at that. And and I think I think 1 of the things that we're going to see is that was I think 1 the very first decision the commission came out with and I thought that it was very much kind of directionally positive uh, generally constructive and I think we're going to and I think they've said this all along that they want to kind of get cases in and kind of evaluate what they look like for each utility for for, for larger, gas, smaller gas, electrics. So I think we're going to learn a lot more as, uh, AP.

Southwest Gas rate based growth. That you talked about, I assume that not necessarily Consolidated and maybe the 230 sort of, uh, endpoint is part of it. But, um, that's, uh, doesn't include any kinds of upsides that you see, for a Great Basin longer term. Is that right?

Chris Ellinghaus (Sieber: Okay. I guess this is somewhat of a difficult question, but the 7% sort of longer-term base Southwest Gas rate base growth that you talked about, I assume that's not necessarily consolidated and maybe the 2030 sort of endpoint is part of it. That's doesn't include any kinds of upsides that you see for Great Basin longer term. Is that right?

S and TP kind of go through their process. And then as we continue to work with stakeholders on ours, but I think you know, the good thing is is I think the the parameters are kind of there. Uh, when you look at the different proposals, when you look at the policy statement, when you look at the recent UNS gas case that I think, I think the fairways kind of defined for everybody and so we'll be able to kind of all work and and see where we end up with the different utilities.

this is uh, somewhat of

A difficult question, but the 7% is sort of a longer-term base.

um,

Yeah, Chris Justin again. Yeah, you're you're spot on. That's just kind of you know, when we think about the, you know, the historical and kind of the current investment in the utility, that's really what that was designed is to kind of, you know, we expect kind of consistent strong growth at the utility and that's what that reflects. So it doesn't include anything that would be kind of a 1-off or any additional, Great Basin, um, opportunities, that may come down the road, uh, and may materialize over time, okay?

Lastly um when when you're talking about utilizing parent leverage for the Great Basin funding, do you expect that to be permanent? Do you ever expect to push down, um, any of the financing costs integrate basin?

Southwest Gas rate based growth that you talked about, I assume that's not necessarily Consolidated and maybe the 2030 sort of, uh, endpoint is part of it. But, um, that's, uh, doesn't include any kinds of upsides that you see, for a Great Basin longer term. Is that right?

Justin Brown: Yeah, Chris, Justin again. Yeah, you're spot on. That's just kind of, you know, when we think about the, you know, the historical and kind of the current investment in the utility, that's really what that was designed, is to kind of. You know, we expect kind of consistent, strong growth at the utility, and that's what that reflects. It doesn't include anything that would be kind of a one-off or any additional Great Basin opportunities that may come down the road and may materialize over time.

Chris Ellinghaus (Sieber: Okay. Lastly, when you're talking about utilizing parent leverage for the Great Basin funding, do you expect that to be permanent? Do you ever expect to push down any of the financing costs into Great Basin?

Yeah, I think it's a great question Chris. Um you know, from our perspective I think 1 way to look at that is we we don't expect it to be permanent, I'll say that. Uh, because we, we do expect, you know, I I I I think what, I'll what, I'll what I'll go with this is, you know, we've sold. We've sold Century, which is a an asset that was not contributing to the dividend and we have these dollars to deploy redeploy into an asset which is expected to to Really throw off a lot of cash. Um, earnings at the back end, once it goes into service and so Great Basin will have the capacity to give a pretty sizable dividend to the parent which will help us eat into whatever leverage we put on the parent, um, at that point in time.

Yeah, Chris Justin again. Yeah, you're you're spot on. That's just kind of you know when we think about the, you know, the historical and kind of the current investment in the utility, that's really what that was designed is to kind of, you know we expect kind of consistent strong growth at the utility and that's what that reflects. So it doesn't include anything that would be kind of a 1-off or any additional, Great Basin, um, opportunities, that may come down the road and may materialize over time, okay? And lastly, um, when when you're talking about utilizing parent leverage for the Great Basin funding, do you expect that to be permanent? Do you ever expect to push down? Um any of the financing costs to integrate basin?

Justin Brown: Yeah, I think it's a great question, Chris. you know, from our perspective, I think one way to look at that is we don't expect it to be permanent, I'll say that. because we do expect, you know, I think what I'll where I'll go with this is, you know, we sold Centuri, which is an asset that was not contributing to the dividend, and we have these dollars to deploy, redeploy into an asset, which is expected to really throw off a lot of cash earnings at the back end once it goes into service. Great Basin will have the capacity to give a pretty sizable dividend to the parent, which will help us eat into whatever leverage we put on the parent at that point in time.

Okay. Let me, let me ask you 1 more thing. Um, can we see you? Talked about maybe having some larger upside to the dividend growth. Uh, later, can we presume? That's once great basins in service?

Yeah, I think that's fair. Kind of kind of along the same lines.

What I just mentioned.

Great, thanks. A bunch. Appreciate the details.

Thanks Chris. Thank you.

I said a reminder, if you have a question, please press star 1.

Your next question comes from the line of Gabe moiraine from mizuho. Your line is now open.

Chris Ellinghaus (Sieber: Okay, let me ask you one more thing. You talked about maybe having some larger upside to the dividend growth later. Can we presume that's once Great Basin's in service?

Yeah, I think it's a great question Chris. Um you know, from our perspective I think 1 way to look at that is we we don't expect it to be permanent, I'll say that. Um because we we do expect, you know, I I I I think what, I'll what I'll where I'll go with this is, you know, we sold, we sold Sentry which is a an asset that was not contributing to the dividend and we have these dollars to deploy redeploy into an asset which is expected to to Really throw off a lot of cash. Um, earnings at the back end, once it goes into service and so Great Basin will have the capacity to give a pretty sizable dividend to the parent which will help us eat into whatever leverage we put on the parent, um, at that point in time.

Hey, good morning. Good morning everyone. Just uh, congrats again to Karen and Justin. I just had 1 question around great based on, although it's a little bit multi-part. I wanted to dig down a little bit deeper in terms of

locking down or squaring away some of the variables here around cost. Whether it's ENC compressors, you know, pipe just kind of where you really stand in that process.

Okay. Let me, let me ask you 1 more thing. Um, can we see you? Talked about maybe having some larger upside to the dividend growth. Uh, later, can we presume that to 1 scrape basins in service?

Justin Brown: Yeah, I think that's fair. Kind of along the same lines, what I just mentioned.

Yeah, I think that's fair. Kind of kind of along the same lines.

And how you might be thinking about. Do you risking some of that at this moment. Um, so maybe if I could if if you can address that, that'd be great.

Chris Ellinghaus (Sieber: Okay, great. Thanks a bunch. Appreciate the details.

What I just mentioned.

Justin Brown: Thanks, Chris.

Okay, great. Thanks a bunch. Appreciate the details.

[Analyst]: Thank you.

Operator: As a reminder, if you have a question, please press Star one. Your next question comes from the line of Gabe Morin from Mizuho. Your line is now open.

Thanks Chris. Thank you.

As a reminder, if you have a question, please press star 1.

Gabriel Moreen: Hey, good morning, good morning, everyone. Just, congrats again to Karen and Justin. I just had one question around Great Basin, although it's a little bit multipart. I wanted to dig down a little bit deeper in terms of locking down or squaring away some of the variables here around cost, whether it's E&C, compressors, you know, pipe, just kind of where you really stand in that process and how you might be thinking about de-risking some of that at this moment. Maybe if you can address that'd be great.

Your next question comes from the line of Gabe Moiraine from Mizuho. Your line is now open.

Hey, good morning or good morning everyone. Just uh, congrats again to Karen and Justin, I just had 1 question around Great Basin although it's a little bit multi-part, I wanted to dig down a little bit deeper in terms of

Yeah, Gabe. It's Justin. Um, yeah. As I indicated in, in my remarks, I mean, I think we're working, we're trying to be very proactive from a supply chain standpoint. Uh, working, you know, going through the pre-filing process with Ferg, uh, to just really kind of mitigate any of those kind of typical project risks, if you will, obviously, you know, shipper risk is another 1 in terms of, you know. Uh, and that's why we went through kind of a an elongated process to kind of make sure that we had firm pressing and agreements signed up. Uh in order to kind of again try to mitigate risk

Locking down or squaring away some of the variables here around cost. Whether it's ENC compressors, you know, pipe just kind of where you really stand in that process and how you might be thinking about de-risking some of that at this moment.

Um, so maybe if I could, if, if you can address that, that'd be great.

Justin Brown: Yeah, Gabe, it's Justin. Yeah, as I indicated in my remarks, I mean, where I think we're working, we're trying to be very proactive from a supply chain standpoint, working, you know, going through the pre-filing process with FERC, to just really kind of mitigate any of those kind of typical project risks, if you will. Obviously, you know, shipper risk is another one in terms of, you know, that's why we went through kind of an elongated process to kind of make sure that we had firm precedent agreements signed up, in order to kind of, again, try to mitigate risk associated with the project. We'll continue to kind of work through those processes.

Justin Brown: I think to your point on kind of where we sit right now, we feel like that's a pretty good estimate of what the cost is. Obviously, working through with our EPC contractor and different things. I think one of the things that I would say is when we make the anticipated filing with FERC at the end of this year, for the formal application, you know, we'll have an updated cost at that point in time. I think that's a good marker for kind of, you know, we're going with what we believe is kind of our best estimate right now. When we go through this process, we're gonna know more in nine months. When we make that filing with FERC, you know, we'll be able to dial that in even a little bit more.

It cost to be.

Yeah, Gabe. It's Justin. Um, yeah. As I indicated in, in my remarks, I mean, where I think we're working, we're trying to be very proactive from a supply chain standpoint. Uh, working, you know, going through the pre-filing process with Ferg, uh, to just really kind of mitigate any of those kind of typical project risks. If you will, obviously, you know, shipper risk is another 1 in terms of, you know. Uh, and that's why we went through kind of a an elongated process to kind of make sure that we had firm pressing, an agreement signed up uh in order to kind of again try to mitigate risk associated with the project um we'll continue to kind of work through those those processes. I think to your point on kind of where we sit right now. We feel like that's a pretty good estimate of what the cost is.

And maybe maybe I can just Gabe. I can just add something. I think you're getting at as well. Um,

You know, it is a balance which I think is what you're kind of pointing to between, you know, trying to minimize the spending prior to getting a certificate from the farc. Um, with

Making sure that we're mitigating some of these supply chain issues that Justin talked about. And so, from that perspective, the president agreement is just as a reminder. I think you guys know this, but, um, it does require, um, a certain amount of shity that the shippers have to put up as we spend, as we carefully spend, um, dollars in these, this early this early time period.

Justin Brown: That's kind of a good mile marker, if you will, to keep a lookout on in terms of kind of what we anticipate the final project cost to be.

Justin Forsberg: And maybe-

Gabriel Moreen: And, uh-

Obviously working through with our EPC contractor and different things. Um, I think 1 of the things that I would say is when we when we make the anticipated filing with ferc at the end of this year, uh for the formal application, you know, we'll have an updated cost at that point in time. So I think that's a good marker for kind of, you know we're going with what we believe is kind of our best estimate right now. Um, when we go through this process we're going to know more in 9 months. And uh when we make that filing with first, you know we'll be able to dial that in even a little bit more. And so that that's kind of a good um, mile marker if you will to kind of to keep a lookout on in terms of kind of what what we anticipate the the final project cost to be.

Justin Forsberg: Maybe, Gabe, I can just add something I think you're getting at as well. You know, it is a balance, which I think is what you're kind of pointing to, between, you know, trying to minimize the spending prior to getting a certificate from the FERC, with making sure that we're mitigating some of these supply chain issues that Justin talked about. From that perspective, the precedent agreement is just as a reminder, I think you guys know this, but, it does require a certain amount of surety that the shippers have to put up, as we carefully spend dollars in this early time period.

Thanks guys and I Know It 1 question but 1 minor follow-up to the extent. You're going through the Open Season and you got 800 million a day and capacity to what extent were were not further Upstream, constraints on procuring gas or capacity a constraint on some of your customers here signing up for capacity.

um, you know, it is a balance which I think is what you're kind of pointing to between, you know, trying to minimize the spending prior to getting a certificate from the ferc, um, with

Uh, yeah, Gabe, this is Justin. Again, I I think that's really is, is our understanding, is our customers have an expressed, any restrictions in that regard. Obviously, that's something that they're responsible for where we provide the the pipeline for them to to flow the gas supplies that they purchase through. Um but yeah, we're not aware of that. I think our understanding is there's there's sufficient capacity on on the Upstream suppliers as well to to meet those needs.

Gabriel Moreen: Thanks, guys. I know I only have one question, but one minor follow-up. To the extent you're going through the open season, and you've got 800 million a day of capacity, to what extent were not further upstream constraints on procuring gas or capacity, a constraint on some of your customers here signing up for capacity?

making sure that we're mitigating some of these supply chain issues that Justin talked about. And so, from that perspective, the president agreement is just as a reminder. I think you guys know this, but, um, it does require, um, a certain amount of shity that the shippers have to put up as we spend, as we carefully spend, um, dollars in these, this early this early time period.

Great. Thanks. Josh.

Your next question comes from the line of Ryan Levine from City Group, your line is now open.

Thanks guys and I Know It 1 question but 1 minor follow up to the extent. You're going through the Open Season and you got 800 million a day and capacity to what extent were were not further Upstream, constraints on procuring gas or capacity a constraint on some of your customers here signing up for capacity.

Justin Brown: Yeah, Gabe, this is Justin again. I think that's really our understanding is our customers haven't expressed any restrictions in that regard. Obviously, that's something that they're responsible for, where we provide the pipeline for them to flow the gas supplies that they purchase through. Yeah, we're not aware of that. I think our understanding is there's sufficient capacity on the upstream suppliers as well to meet those needs.

Um, hello, I had a couple questions around the, just your guidance in your by 2030. Are you assuming that you're going to be at the 300 basis, point distance from the 13% downgrade threshold? Uh, is that embedded in in plans, or or any car you could share around what's actually in your 2030 estimate?

Gabriel Moreen: Great. Thanks, Justin.

Great. Thanks. Josh.

Operator: Your next question comes from the line of Ryan Levine from Citigroup. Your line is now open.

Ryan Levine: Hello. I had a couple questions around the just your guidance. By 2030, are you assuming that you're gonna be at that 300 basis point distance from the 13% downgrade threshold? Is that embedded in plans, or any color you could share around what's actually in your 2030 estimate?

Your next question comes from the line of Ryan Levine from City Group, your line is now open.

Yeah, I think that's a good question. I think the way you should look about, folks should look at the greater than 300 basis points. Sort of Target that we have out there really is kind of in the trough as we hit the maximum leverage, um, at the hold CO, as we're, as we're, you know, whatever we have in our plan, right? As far as offsetting the equity needs using some old, some old code leverage. So it's not necessarily by 2030. I think based on, you know, kind of what I mentioned earlier in 1 of the q&a's around what great base and be able to you know, is that permanent debt of the hold code which I said it's not right? So you you'd actually see some I think some improvement in our in the current plan. We have out there and we'd see some improvement in the SFO to debt metrics, um, about that trough year, which is likely that 2028 here.

Justin Forsberg: I think that's a good question. I think the way folks should look at the greater than 300 basis points sort of target that we have out there, really is kind of in the trough as we hit the maximum leverage at the holdco, as we're, you know, whatever we have in our plan, right, as far as offsetting the equity needs using some holdco leverage. It's not necessarily by 2030. I think based on, you know, kind of what I mentioned earlier in one of the Q&As around, you know, is that permanent debt of the holdco? Which I said it's not, right?

Um, hello, I had a couple questions around the, just your guidance in your by 2030. Are you assuming that you're going to be at that 300 basis, point distance from the 13% downgrade threshold? Uh, is that embedded in in plans, or or any car you can share around what's actually in your 2030 estimate.

Okay. And then similarly around the regulatory lag Improvement in your plan is the 100s embedded in the 13% EPS growth rate or is that

If if they, if you exceed that, would you be above that? Or or or kind of conversely, if you underperform is that are those the key drivers of the Outlook?

Justin Forsberg: You'd actually see some, I think, some improvement in the current plan we have out there, we'd see some improvement in the FFO to debt metrics above that trough year, which is likely that 2028 year.

Yeah, Ryan it's Justin. Yeah, I think the guidance that we provide, we we've made some reasonable assumptions around kind of the timing of formula rates and kind of what that might look like. So that's embedded in that in that range.

Okay, well congratulations to Karen and Justin and appreciate the comprehensive update.

Thanks Ryan. Thank you.

Yeah, I think that's a good question. I think the way you should look about, folks should look at the greater than 300 basis points. Sort of Target that we have out there really is kind of in the trough as we hit the maximum leverage, um, at the hold CO, as we're, as we're, you know, whatever we have in our plan, right? As far as offsetting the equity needs using some volts, some cold Co leverage so it's not necessarily by 2030. I think based on, you know, kind of what I mentioned earlier in 1 of the q&a's around what great base and be able to you know is that permanent debt of the hold code which I said it's not right? So you you'd actually see some I think some improvement in our in the current plan we have out there and we'd see some improvement in the SFO to debt metrics. Um above that trough year, which is likely that 2028 here.

Ryan Levine: Okay. Similarly, around the regulatory lag improvement in your plan, is the 100 basis points embedded in the 13% EPS growth rate, or if you exceed that, would you be above that? Kind of conversely, if you underperform, are those the key drivers of the outlook?

Your next question comes from the line of Paul tra month from leaden. Your line is now open.

Okay. And then similarly, around the regulatory lag—improvement in your plan—is the 100 basis points embedded in the 13% EPS growth rate, or is that...

is, uh, to Karen uh, and also uh to Justin

If if they, if you exceed that, would you be above that? Or or or kind of conversely, if you underperform is that are those the key drivers of the Outlook?

Justin Brown: Ryan, it's Justin. I think the guidance that we provide, we've made some reasonable assumptions around kind of the timing of formula rates and kind of what that might look like. That's embedded in that, in that range.

Ryan Levine: Okay. Well, congratulations to Karen and Justin, and appreciate the comprehensive update.

Um, really 2 questions 1. If, if I go back to Justin's earlier, comment of 15 to 17% through, sort of Great Basin, uh which I guess the First full year would be 2029 if I use that, I would come up with uh, 2029 uh, of somewhere between 640 and 680. Am I thinking about that correctly or am I missing something there?

Justin Forsberg: Thanks, Ryan.

Okay, well, congratulations to Karen and Justin, and I appreciate the comprehensive update.

[Analyst]: Thank you.

Thanks Ron. Thank you.

Operator: Your next question comes from the line of Paul Tremont from Ladenburg. Your line is now open.

Your next question comes from the line of Paul Tramont from Leaden. Your line is now open.

Paul Tremont: Thanks a lot, and congratulations on the update, and best wishes to Karen and also to Justin. Really two questions. One, if I go back to Justin's earlier comment of 15% to 17% through sort of Great Basin, which I guess the first full year would be 2029. If I use that, I would come up with 2029 of somewhere between $640 and $680. Am I thinking about that correctly, or am I missing something there?

I think you are thinking about the Run rate in terms of how I mentioned it and meaning that and and also the 2029 is that first full year of in service.

thanks a lot and uh, congratulations on uh, on the update and, uh, best wishes uh, to Karen uh, and also uh, to Justin

And so obviously it depends on how how you think about the timing of modeling construction spending and Associated a CDC earnings as far as the ramp up, when you look at that. But I think the, um, you know

In terms of that full inservice year, that would be expected in the plan in 2029.

Am I thinking about that correctly, or am I missing something there?

Justin Forsberg: Yeah, Paul, appreciate the question. Obviously, we can't give you the sort of guidance on that precision when you get out that far, but I think you are thinking about the run rate in terms of how I mentioned it, also the 2029 is that first full year of in-service.

Great. Um, and then my other question relates to uh, the ruko challenge to the policy statement, which, uh, had initially uh, been turned down by the courts but I understand uh, that at a higher level. Uh, there's now a hearing uh, that's

And scheduled on on their complaint.

Um, any comments on um,

Justin Brown: Obviously, it depends on how you think about the timing of modeling construction spending and associated AFUDC earnings as far as the ramp-up when you look at that. I think the, you know, in terms of that full in-service year, that would be expected in the plan in 2029.

When you get out that far—but I think you are thinking about the run rate in terms of how I mentioned it, and meaning that—and also, the 2029 is that first full year of in-service.

That update and and what you're expecting, uh, to come out of that.

And so obviously it depends on how you think about the timing of modeling construction spending and associated CDC earnings as far as the ramp-up, when you look at that. But I think the, um, you know,

Paul Tremont: Great. Then my other question relates to the RUCO challenge to the policy statement, which had initially been turned down by the courts. I understand that at a higher level, there's now a hearing that's been scheduled on their complaint. Any comments on that update and what you're expecting to come out of that?

In terms of that full in-service year, that would be expected in the plan in 2029.

Hey, Paul, it's Justin. Yeah, I I I think our our thoughts are kind of consistent. I don't think anything's changed from how we viewed the The Challenge from ruko from the beginning, through the process where the court,

Um, and then my other question relates to, uh, the Ruko challenge to the policy statement, which, uh, had initially, uh, been turned down by the courts, but I understand, uh, that at a higher level, uh, there's now a hearing, uh, that's been scheduled on their complaint.

um, any comments on um,

That update, and what you're expecting to come out of that.

Justin Brown: Hey, Paul, it's Justin. Yeah, I think our thoughts are kind of consistent. I don't think anything's changed from how we viewed the challenge from RUCO from the beginning through the process, where the court kind of denied it and then decided, the Superior Court decided to give them kind of their day in court. We, you know, this is kind of part of the normal process. They have an opportunity to make their argument. I think we feel pretty strongly that there's a long precedent of, you know, the commission being able to have exclusive jurisdiction over rate-making and doing things as part of a rate case. I think you look at all the different regulatory mechanisms that have withstood judgment over time. I think from our perspective, we're not overly concerned.

Um, kind of denied it, and then decided the Superior Court decided to give them kind of their day in court. So, we, you know, this is kind of part of the normal process. They have an opportunity to make their argument. I think we, we feel pretty strongly that there's a long precedent of, you know, the commission being able to have exclusive jurisdiction over rate, making and doing things as part of a rate case. And I think you look at all the different regulatory mechanisms and uh that have withstood judgment over time. So I think from our perspective we're not overly concerned uh haven't seen anything that causes us to be overly concerned about that challenge or kind of the procedural posture. That it's currently in.

And I guess if I look at the initial Court ruling, I mean I thought it was more a sort of a technical issue in terms of having a certain amount of time to file and they missed that deadline.

Um, when the Superior Court, uh, opened that up, I mean, did they just sort of disregard that time limit?

Justin Brown: I haven't seen anything that causes us to be overly concerned about that challenge or kind of the procedural posture that it's currently in.

Yeah. My my recollection Paul was, there was kind of a couple different aspects that you're right. It was kind of initially denied on a technicality, which is why they appealed it. And then the court, ultimately said, no, they need to have their opportunity to be heard and that's kind of my understanding of the, the posture of the case. Right now is that they have an opportunity to make their arguments with the apella court.

Paul Tremont: I guess if I look at the initial court ruling, I mean, I thought it was more sort of a technical issue in terms of having a certain amount of time to file, and they missed that deadline. When the Superior Court opened that up, I mean, did they just sort of disregard that time limit?

Um, kind of denied it, and then decided—the Superior Court decided—to give them kind of their day in court. So, we, you know, this is kind of part of the normal process. They have an opportunity to make their argument. I think we feel pretty strongly that there's a long precedent of, you know, the commission being able to have exclusive jurisdiction over rate-making and doing things as part of a rate case. And I think if you look at all the different regulatory mechanisms, and, uh, that have withstood judgment over time. So, I think from our perspective we're not overly concerned, uh, haven't seen anything that causes us to be overly concerned about that challenge or kind of the procedural posture that it's currently in.

Great. Uh, thank you very much. That's it for me.

Great. Thanks, Paul. Thank you.

This concludes the Q&A portion of today's conference, I would now like to turn the call back over to Tyler franic for closing remarks.

And I guess if I look at the initial court ruling, I mean, I thought it was more a sort of technical issue in terms of having a certain amount of time to file, and they missed that deadline.

Um, when the Superior Court, uh, opened that up, I mean, did they just sort of disregard that time limit?

Justin Brown: Yeah, my recollection, Paul, was there was kind of a couple different aspects, but you're right. It was kind of initially denied on a technicality, which is why they appealed it, and then the court ultimately said, no, they need to have their opportunity to be heard. That's kind of my understanding of the posture of the case right now, is that they have an opportunity to make their arguments with the appellate court.

Thanks again. John and thank you all for joining us today. And for your questions, this concludes our conference call, we appreciate your interest in Southwest Gas Holdings and look forward to speaking with many of you soon.

This concludes today's Southwest Gas Holdings, fourth quarter and full year, 2025 earnings call and webcast. You may now disconnect your line at this time. Have a

Paul Tremont: Great. Thank you very much. That's it for me.

Justin Brown: Great. Thanks, Paul.

Great. Uh, thank you very much. That's it for me.

Chris Ellinghaus (Sieber: Thank you.

Operator: This concludes the Q&A portion of today's conference. I would now like to turn the call back over to Tyler Franek for closing remarks.

Great. Thanks, Paul. Thank you.

This concludes the Q&A portion of today's conference, I would now like to turn the call back over to Tyler franic for closing remarks.

Tyler Franek: Thanks again, John. Thank you all for joining us today and for your questions. This concludes our conference call. We appreciate your interest in Southwest Gas Holdings and look forward to speaking with many of you soon.

Thanks again, John, and thank you all for joining us today and for your questions. This concludes our conference call. We appreciate your interest in Southwest Gas Holdings and look forward to speaking with many of you soon.

Operator: This concludes the Southwest Gas Holdings Q4 and full year 2025 earnings call and webcast. You may now disconnect your line at this time. Have a wonderful-

This concludes today's Southwest Gas Holdings fourth quarter and full year 2025 earnings call and webcast. You may now disconnect your line at this time. Have a great day.

Q4 2025 Southwest Gas Holdings Inc Earnings Call

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