Southwest Gas Holdings — Second Quarter 2026 Earnings Summary

Financial Performance

• Consolidated operating revenues were $358.2 million for the three months ended June 30, 2026, compared to $396.3 million in the prior year period; revenues were $943.3 million for the six months ended June 30, 2026, compared to $1.14 billion in the prior year period.
• Net income from continuing operations was $42.1 million for the three months ended June 30, 2026, an increase of $42.9 million compared to a loss of $0.7 million in the prior year period; net income from continuing operations was $180.5 million for the six months ended June 30, 2026, an increase of $47.0 million compared to $133.6 million in the prior year period.
• Adjusted net income from continuing operations was $32.4 million for the three months ended June 30, 2026, an increase of $5.9 million compared to $26.5 million in the prior year period; adjusted net income from continuing operations was $180.5 million for the six months ended June 30, 2026, an increase of $19.7 million compared to $160.8 million in the prior year period.
• Consolidated earnings per diluted share from continuing operations were $0.58 for the three months ended June 30, 2026, compared to $(0.01) in the prior year period; consolidated earnings per diluted share from continuing operations were $2.49 for the six months ended June 30, 2026, compared to $1.85 in the prior year period.
• Adjusted consolidated earnings per diluted share from continuing operations were $0.45 for the three months ended June 30, 2026, compared to $0.37 in the prior year period; adjusted consolidated earnings per diluted share from continuing operations were $2.49 for the six months ended June 30, 2026, compared to $2.23 in the prior year period.
• The Natural Gas Distribution segment delivered a 12-month ended Utility return on equity (ROE) of 8.1% and an adjusted Utility ROE of 8.0%.
• The Natural Gas Distribution segment reported a gross margin of $158.4 million and an operating margin of $319.7 million for the three months ended June 30, 2026.
• The company ended the quarter with $270.5 million in cash and cash equivalents and nearly $1.0 billion in available liquidity.
• Discontinued operations resulted in a loss of $0 for the three and six months ended June 30, 2026, compared to losses of $39.4 million and $59.8 million, respectively, in the prior year periods, reflecting the absence of Centuri Holdings, Inc. results following its disposition.

Guidance and Future Outlook

• The Company reaffirmed 2026 earnings per share from continuing operations guidance of $4.17 to $4.32 per share.
• The Company reaffirmed 2026 capital expenditures guidance of approximately $1.25 billion.
• The Company reaffirmed 2026-2030 adjusted earnings per share from continuing operations CAGR guidance of 12.0% to 14.0%.
• The Company reaffirmed 2026-2030 capital expenditures guidance of $6.3 billion.
• The Company reaffirmed 2026-2030 rate base CAGR guidance of 9.5% to 11.5%.
• Long-term guidance metrics are based on $1.7 billion of incremental capital related to the Great Basin 2028 Expansion Project over the five-year period and do not reflect the updated $2.3 billion capital estimate.
• The Company does not expect 2026 capital expenditures guidance to be materially impacted by the updated Great Basin 2028 Expansion Project estimates.
• The Company plans to incorporate updated Great Basin 2028 Expansion Project estimates into long-term capital expenditure, rate base, and earnings guidance expectations in conjunction with its annual five-year planning refresh cycle concluding in February.

Business Segments and Product Lines

• The Natural Gas Distribution segment achieved 1% net customer growth during the twelve months ended June 30, 2026.
• The Great Basin 2028 Expansion Project secured binding precedent agreements (BPAs) totaling approximately 1 billion cubic feet (Bcf) per day of contracted demand.
• The Great Basin 2028 Expansion Project has expressions of interest for an additional ~1.8 Bcf for requested in-service dates ranging from 2029 through 2035.
• The Great Basin 2028 Expansion Project is projected to require approximately $2.3 billion in estimated capital investment and generate potential annual incremental margin of $270 million to $300 million once in service.
• The Company invested $520.0 million in infrastructure modernization and expansion during the first six months of 2026, including approximately $115 million toward the Great Basin 2028 Expansion Project.
• Southwest Gas Corporation's Arizona System Integrity Mechanism rates became effective on April 1, 2026, supporting timely recovery of eligible safety and reliability investments subject to an annual capital investment cap of $50 million.
• Southwest Gas filed Nevada certification materials for the Nevada general rate case, increasing its requested annual revenue increase to approximately $74 million.
• The Nevada Triennial Resource Plan was approved, including prudency pre-determinations for approximately $186 million of capital investments.
• The California Public Utilities Commission issued a constructive decision on non-cost-of-capital components of the rate case, providing approximately $40 million of incremental annual revenue and recognizing approximately $9.7 million of incremental net income in the second quarter related to previously deferred first quarter revenue.
• The final decision on the cost-of-capital component of the California rate case is expected in August.

Market and Competitive Landscape

• The Company serves over 2 million customers throughout Arizona, Nevada, and California.
• The customer to employee ratio for the gas segment was 942 to 1 at quarter end.
• The market value to book value per share was 156% at quarter end.
• The common stock dividend yield was 2.9% at quarter end.

Risks and Challenges

• Forward-looking statements regarding the Great Basin 2028 Expansion Project, including projected demand, capacity, capital expenditures, and investment opportunities, are subject to risks including regulatory approvals, capital construction costs, and the potential for actual results to differ materially.
• Risks include the timing and amount of rate case filings, approvals, and rate relief, as well as changes in rate design and net customer growth rates.
• Potential risks include credit rating downgrades, future earnings trends, inflation, labor market sufficiency, seasonal patterns, current and future litigation, and stock market volatility.
• The Company notes that actual results could differ from forward-looking statements regarding earnings per share, operating margin, operating income, COLI earnings, interest expense, and capital expenditures.

Management Commentary and Tone

• Justin Brown, President and CEO, expressed encouragement regarding progress in advancing rate cases in all three states and securing binding commitments for the Great Basin 2028 expansion project.
• Management described the California regulatory outcome as a "constructive step" reflecting collaborative engagement with regulators to align cost recovery with investment timing.
• Management stated they remain optimistic about the Great Basin expansion, noting strong commercial interest and growing contracted demand.
• Management emphasized a focus on executing growth and regulatory priorities while delivering long-term value creation for stakeholders.
• Management highlighted significant quarter-over-quarter growth in earnings per share from continuing operations driven by constructive regulatory outcomes, infrastructure investment recovery, and disciplined operational execution.

Other Key Points

• The disposition of Centuri Holdings, Inc. was completed, resulting in the absence of its operating results in the current period compared to the prior year.
• The Company repaid a $550.0 million term loan in the summer of 2025, contributing to lower net interest deductions in the current period.
• The Company recognized a $12.0 million state income tax benefit in the prior year related to a change in state apportionment rates that did not recur in the current period.
• The Company filed FERC certificate (CPCN) application preparations for the Great Basin 2028 Expansion Project, expected to be filed later in 2026.
• Project shippers executing BPAs are required to post surety and execute minimum twenty-year Transportation Service Agreements upon FERC approval to maintain the project schedule.
• The Company's conference call and webcast were scheduled for August 5, 2026, at 11:00 a.m. ET.