SOUTHWEST GAS CORP

Previous wording

Southwest Gas Holdings is a holding company that owns all of the shares of common stock of Southwest Gas; and until April 22, 2024, all of the shares of common stock of Centuri. Consistent with the Company’s earlier determination to simplify the Company’s portfolio of businesses, the Company determined it would pursue a separation of Centuri. In April 2024, the Company and Centuri announced the completion of the Centuri IPO. Following the Centuri IPO, the Company owns approximately 81% of the outstanding Centuri common stock. The Company intends to fully dispose of its ownership in Centuri in one or more disposition transactions, including by way of sales of its shares of Centuri common stock, one or more exchange offers for Company shares, or distributions to Company stockholders via spin-off, or any combination thereof.

Current wording

Southwest Gas Holdings is a holding company that owns all of the shares of common stock of Southwest Gas; and until the Centuri IPO in April 22, 2024, all of the shares of common stock of Centuri. Consistent with the Company’s earlier determination to simplify the Company’s portfolio of businesses, the Company determined it would pursue a separation of Centuri. In April 2024, the Company and Centuri announced the completion of the Centuri IPO. The Company completed subsequent sales of Centuri stock in May, June, and July 2025. Following these sales, the Company owned 53.3% at June 30, 2025 and 52.1% at July 8, 2025 of Centuri. The Company intends to fully dispose of its ownership in Centuri in one or more disposition transactions, including by way of sales of its shares of Centuri common stock, one or more exchange offers for Company shares, or any combination thereof.

Previous wording

Our business includes Southwest Gas, which is engaged in the business of purchasing, distributing, and transporting natural gas for customers in portions of Arizona, Nevada, and California. Southwest Gas is the largest regulated distributor of natural gas in Arizona and Nevada, and also distributes and transports natural gas for customers in portions of California. Additionally, through its subsidiaries, Southwest Gas operates two regulated interstate pipelines serving portions of Nevada and California. Southwest Gas makes investments in infrastructure to support customer demand associated with population growth and economic development activity, and the safe and reliable operation of its system through adherence to integrity management programs.

Current wording

Our business includes Southwest Gas, which is engaged in the business of purchasing, distributing, and transporting natural gas for customers in portions of Arizona, Nevada, and California. Southwest Gas is the largest regulated distributor of natural gas in Arizona and Nevada, and also distributes and transports natural gas for customers in portions of California. Additionally, through its subsidiaries, Southwest Gas operates two regulated interstate pipelines serving portions of Nevada and California. Southwest Gas makes investments in infrastructure to support customer demand associated with population growth and

Previous wording

As of March 31, 2025, Southwest Gas had approximately 2,265,000 residential, commercial, industrial, and other natural gas customers, of which 1,215,000 customers were located in Arizona, 843,000 in Nevada, and 207,000 in California. Over the past twelve months, first-time meter sets were approximately 40,000, of which 23,000 were added in Arizona,16,000 in Nevada, and 1,000 in California, which align with a similar number of new meter sets in these same territories during the twelve months ended March 31, 2024. Residential and small commercial customers represented over 99% of the total customer base. During the twelve months ended March 31, 2025, 53% of operating margin (Regulated operations revenues less the net cost of gas sold) was earned in Arizona, 35% in Nevada, and 12% in California. During this same period, Southwest Gas earned 85% of its operating margin from residential and small commercial customers, 4% from other sales customers, and 11% from transportation customers. These patterns are expected to remain materially consistent for the foreseeable future.

Current wording

As of June 30, 2025, Southwest Gas had approximately 2,272,000 residential, commercial, industrial, and other natural gas customers, of which 1,220,000 customers were located in Arizona, 845,000 in Nevada, and 207,000 in California. Over the past twelve months, first-time meter sets were approximately 40,000, of which 23,000 were added in Arizona,16,000 in Nevada, and 1,000 in California; compared to 40,000 during the twelve months ended June 30, 2024, of which 22,000 were located in Arizona, 16,000 in Nevada, and 2,000 in California. Residential and small commercial customers represented over 99% of the total customer base. During the twelve months ended June 30, 2025, 53% of operating margin (Regulated operations revenues less the net cost of gas sold) was earned in Arizona, 35% in Nevada, and 12% in California. During this same period, Southwest Gas earned 85% of its operating margin from residential and small commercial customers, 4% from other sales customers, and 11% from transportation customers. These patterns are expected to remain materially consistent for the foreseeable future.

Previous wording

Centuri is a strategic infrastructure services company that partners with regulated utilities to build and maintain the energy network that fuels millions of homes and businesses across the U.S. and Canada. With a commitment to serve as long-term partners to customers and communities, Centuri’s employees enable regulated utilities to safely and reliably deliver natural gas and electricity, as well as achieve their goals for environmental sustainability. Centuri operates in 89 primary locations across 46 states and four Canadian provinces. Centuri operates in the U.S., primarily as NPL, Neuco, Linetec, Riggs Distler, and National, and in Canada, primarily as NPL Canada.

Current wording

Centuri is a strategic infrastructure services company that partners with regulated utilities to build and maintain the energy network that fuels millions of homes and businesses across the U.S. and Canada. With a commitment to serve as long-term partners to customers and communities, Centuri’s employees enable regulated utilities to safely and reliably deliver natural gas and electricity, as well as achieve their goals for environmental sustainability. Centuri operates through a family of complementary companies working together across different geographies to establish solid customer relationships and a strong reputation for a wide range of capabilities.

Previous wording

regard to contracted or professional services), and the availability of those resources. Certain of these impacts may be more predominant in certain of our operations, such as with regard to fuel costs for work equipment and skilled/trade labor costs at Centuri.

Current wording

All of our businesses may be impacted by economic conditions that impact businesses generally, such as inflationary impacts on goods and services consumed in the business, rising or sustained high interest rates, labor markets and costs (including in regard to contracted or professional services), and the availability of those resources. Certain of these impacts may be more predominant in certain of our operations, such as with regard to fuel costs for work equipment and skilled/trade labor costs at Centuri.

Previous wording

•Corporate and administrative expenses include $9.8 million in interest expense related to borrowings and approximately $600,000 in Centuri separation costs

Current wording

•Corporate and administrative expenses include $8.6 million in interest expense related to borrowings, $45.4 million in income tax expense related to Centuri common stock sales, and approximately $1.2 million in Centuri separation costs

Previous wording

•40,000 first-time meters sets occurred over the past 12 months

Current wording

•40,000 first-time meters sets occurred over the past 12 months, resulting in a 1.8% growth rate

Previous wording

•Finished the quarter with over $380 million in cash (given collection of previously deferred purchased gas costs)

Current wording

•Finished the quarter with over $323 million in cash (given collection of previously deferred purchased gas costs)

Previous wording

•$163 million capital investment year-to-date

Current wording

•$362.5 million capital investment year-to-date

Previous wording

•Revenues of$550.1 million in the first quarter of 2025 reflect an increase of $22.1 million, or 4%, compared to the first quarter of 2024

Current wording

•Revenues of $724.1 million in the second quarter of 2025 reflect an increase of $52 million, or 8%, compared to the second quarter of 2024

Previous wording

Depreciation and amortization expense increased $8.9 million, or 10%, between quarters, reflecting a$746 million, or 7% increase in average gas plant in service since the corresponding first quarter of 2024, in addition to the$4.8 million in higher amortization related to regulatory account balances noted above. The increase in plant was attributable to pipeline capacity reinforcement work, franchise requirements, scheduled pipe replacement activities, and new infrastructure.

Current wording

Depreciation and amortization expense increased $7.3 million, or 12%, between quarters, reflecting a $733.0 million, or 7%, increase in average gas plant in service since the corresponding second quarter of 2024, in addition to $1.2 million in higher amortization related to regulatory account balances. The increase in plant was attributable to pipeline capacity reinforcement work, franchise requirements, scheduled pipe replacement activities, and new infrastructure.

Previous wording

Other income (which is net of other deductions) decreased$8.8 million between quarters. The decrease was primarily driven by a $5.3 million decrease in values associated with COLI policies and a $4 million decrease in interest income primarily reflecting a reduction in carrying charges associated with regulatory account balances, notably, deferred purchased gas cost balances, which, on a combined basis, decreased from an asset balance of$199 million as of March 31, 2024 to a net liability balance of $282 million as of March 31, 2025. Interest is earned when balances are assets and interest expense is incurred when balances are liabilities.

Current wording

Other income (which is net of other deductions) increased $3.6 million between quarters. The increase was primarily driven by a $4.5 million increase in values associated with COLI policies and a $1.6 million gain on the sale of certain miscellaneous assets. Partially offsetting the overall increase was a $3.3 million decrease in interest income. This decrease primarily reflects a reduction in carrying charges associated with regulatory account balances, notably, deferred purchased gas cost balances. As of June 30, 2025 these balances reflected a net liability position in each of Southwest Gas’ service territories. In contrast, the prior-year quarter reflected a net asset balance in our Arizona and California jurisdictions, contributing to higher interest income in that period. Interest is earned when balances are assets and interest expense is incurred when balances are liabilities.

Previous wording

Southwest Gas’ industrial development revenue bonds. Interest also increased due to amounts incurred on the over-collected PGA balance.

Current wording

Net interest deductions increased approximately $4.9 million in the second quarter of 2025, as compared to the prior-year quarter, primarily due to amounts incurred on the over-collected PGA balance.

Previous wording

Results from natural gas distribution operations improved $7.1 million between the first quarters of 2025 and 2024. The increase was primarily due to anincrease in Operating margin offset by increases in Depreciation and amortization and Net interest deductions and a decrease in Other income.

Current wording

Results from natural gas distribution operations improved approximately $13.2 million between the first six months of 2025 and 2024. The improvement was primarily due to an increase in Operating margin, partially offset by increases in Operations and maintenance expense, Depreciation and amortization, and Net interest deductions, and a decrease in Other income.

Previous wording

Operating margin increased$38.9 million quarter over quarter. Combined rate relief across all our territories added approximately $27 million of incremental margin, and an additional $5 million was attributable to customer growth reflective of approximately 40,000 first-time meter sets added during the last twelve months. The combined impacts of increases in recovery/return associated with regulatory account balances ($4.8 million) and the variable interest expense adjustment mechanism in Nevada ($3.3 million) (for which amortization is recognized in interest expense), also resulted in incremental margin between comparable periods. Partially offsetting these impacts were changes in other miscellaneous revenue and revenue from customers outside of the decoupling mechanisms.

Current wording

Operating margin increased $65.5 million period over period primarily attributable to combined rate relief across all our service territories which added approximately $51.1 million of incremental margin. Approximately $7.6 million of incremental margin was attributable to customer growth, including approximately 40,000 first-time meter sets during the last twelve months. The combined impacts of increases in recovery/return associated with regulatory account balances ($5.9 million) and the variable interest expense adjustment mechanism in Nevada ($4.3 million) (for which amortization is recognized in interest expense), also resulted in incremental margin between comparable periods. Partially offsetting these impacts were changes in other miscellaneous revenue and revenue from customers outside of the decoupling mechanisms.

Previous wording

Net interest deductions increased approximately $8.2 million in the first quarter of 2025, as compared to the prior-year quarter, primarily due to the impacts of surcharges/surcredits and deferral activity related to a regulatory mechanism associated with

Current wording

Net interest deductions increased $13.1 million in the first six months of 2025, as compared to the prior-year period, primarily due to increased interest on amounts incurred on the over-collected PGA balance, as well as the impacts of surcharges/surcredits and deferral activity related to a regulatory mechanism associated with Southwest Gas’ industrial development revenue bonds.

Previous wording

Utility infrastructure services expenses increased $12.9 million, or 3%, in the first quarter of 2025 when compared to the prior-year quarter due primarily to a higher volume of infrastructure services provided, which caused such expenses to increase at a rate generally commensurate with costs necessary to generate the revenue discussed above. Increased margin in the first quarter of 2025, however, was primarily due to the increased profitability of storm work and more efficient utilization of fixed costs in generating the higher level of revenue. Also included in total Utility infrastructure services expenses were general and administrative costs, which decreased approximately $1.4 million between quarters due to a decrease in strategic review costs, as well as a decrease in severance costs and corporate salaries related to restructuring efforts that occurred in the prior year. These decreases were partially offset by an increase in stock-based compensation (which was impacted by forfeitures in the first quarter of 2024) and other incentive compensation, which increased due to improved operating results. Gains on sale of equipment in the first quarter of 2025 and 2024 (reflected as an offset to Utility infrastructure services expenses) were approximately $0.4 million and $0.9 million, respectively.

Current wording

Gains on sale on equipment in the second quarter of 2025 and 2024 (reflected as an offset to Utility infrastructure services expenses) were approximately $0.2 million and $1.1 million, respectively.

Previous wording

The decrease in net interest deductions of $6.2 million between quarters was primarily due to a reduction in the average balance of debt outstanding during the comparative periods.

Current wording

The decrease in net interest deductions of $4.4 million between quarters was primarily due to a reduction in the average debt balance and a decrease in interest rates on outstanding variable-rate borrowings.

Previous wording

Income tax benefit decreased $3.2 million between quarters, primarily due to a decrease in pre-tax loss in the first quarter of 2025.

Current wording

Income tax expense increased $1.6 million between quarters primarily due to an increase in pre-tax income in the second quarter of 2025.

Previous wording

Utility infrastructure services revenues increased $22.1 million, or 4%, in the first quarter of 2025 when compared to the prior-year quarter, driven primarily by increased electric utility infrastructure services revenues of $52.1 million, net of a decrease in gas utility infrastructure services revenues of $30 million. The increase in electric utility infrastructure services revenues was primarily due to an increase in net volumes under existing customer MSAs and incremental bid work, as well as an increase in emergency restoration services revenue of approximately $8.9 million ($18.1 million in the first quarter of 2025 compared to $9.2 million in the first quarter of 2024). This increase was partially offset by a previously anticipated decrease in offshore wind revenue of $22.3 million. The decrease in gas utility infrastructure services revenues was primarily due to a reduction in net volumes under existing customer MSAs, caused in large part to adverse winter weather conditions in several regions, leading to shutdown days and delays, in addition to impacts from lower MSA volumes with certain customers due to their budgetary constraints, including as some approached or met the end of their fiscal years for which their capital budgets had been established.

Current wording

Utility infrastructure services revenues increased $74.0 million, or 6%, in the first six months of 2025 when compared to the corresponding period in the prior-year, driven primarily by an increase in electric utility infrastructure services revenues of $99.5 million, partially offset by a decrease in gas utility infrastructure services revenues of $25.5 million. The increase in electric utility infrastructure services revenues was primarily due to an increase in volumes under MSAs and incremental bid work, partially offset by a decrease in emergency restoration services revenues of approximately $10.5 million and a planned decrease in offshore wind revenues of $35.1 million. The decrease in gas utility infrastructure services revenues was primarily due to a reduction in net volumes under existing customer MSAs in the first quarter caused in large part by adverse weather conditions and certain budgetary constraints, as well as bid project delays that impacted the second quarter of 2025.

Previous wording

Arizona General Rate Case. Southwest Gas filed its 2024 Arizona rate case application in February 2024, proposing an increase in revenue of approximately $126 million and a return on common equity of 10.15%, relative to a 50% target equity ratio, and a proposed twelve-month post-test year adjustment for non-revenue producing plant to reflect the continued significant capital investments in the state and to update rates to more closely align with Southwest Gas’ current level of operations and maintenance expense. The ACC’s final decision in March 2025 authorized an overall annual rate increase of approximately $80.2 million, and a return on common equity of 9.84% relative to a 48.5% equity ratio. Southwest Gas’ proposals for the continuation of full revenue decoupling under the DCA mechanism and a property tax tracking mechanism were approved, but the proposed UGCE mechanism to address timelier recovery of the purchased gas cost portion of uncollectible customer accounts following write-off was ultimately withdrawn in favor of the historical regulatory treatment for uncollectible accounts and related expense. The COYL program was terminated; however, an application will be filed to request recovery of the associated outstanding revenue requirement. Rates associated with the ACC’s decision became effective in March 2025, commensurate with the timing of the rate case order.

Current wording

approximately $80.2 million, and a return on common equity of 9.84% relative to a 48.5% equity ratio. Southwest Gas’ proposals for the continuation of full revenue decoupling under the DCA mechanism and a property tax tracking mechanism were approved, but the proposed UGCE mechanism to address timelier recovery of the purchased gas cost portion of uncollectible customer accounts following write-off was ultimately withdrawn in favor of the historical regulatory treatment for uncollectible accounts and related expense. The legacy COYL program was discontinued; however, an application was filed requesting recovery of the associated outstanding revenue requirement of approximately $5.2 million for work through March 2025. Recovery of the outstanding COYL revenue requirement is requested over three years. Rates associated with the ACC’s decision became effective in March 2025, commensurate with the timing of the rate case order.

Previous wording

Initially included as part of the rate case application, Southwest Gas proposed the establishment of the SIM, a capital tracker designed to support required code and regulatory-related infrastructure replacements in Arizona, which was subsequently bifurcated from the rate case application. A settlement agreement supporting implementation of the SIM was reached with the majority of the parties, including a SIM surcharge effective April 1 each year subject to refund, to recover the revenue requirement associated with eligible plant placed in service by December 31 of the prior calendar year. The settlement will be considered by the ACC at a future open meeting with a final decision anticipated in the third quarter of 2025.

Current wording

Initially included as part of the rate case application, Southwest Gas proposed the establishment of the SIM, a capital tracker designed to support required code and regulatory-related infrastructure replacements in Arizona, which was subsequently bifurcated from the rate case application. A settlement agreement supporting implementation of the SIM was reached with the majority of the parties, including a SIM surcharge effective April 1 each year subject to refund, to recover the revenue requirement associated with eligible plant placed in service by December 31 of the prior calendar year. The settlement considered by the ACC included a surcharge cap of $0.02 per therm, which represented approximately $150 million of annual SIM-related investment. Ultimately, the approved settlement included an amendment, limiting the annual SIM investment to $50 million. Other key provisions of the settlement remain unchanged.

Previous wording

Tax Reform. A TEAM was approved in Southwest Gas’ 2019 general rate case to timely recognize tax rate changes resulting from federal or state tax legislation following the TEAM implementation. In addition, the TEAM tracks and returns/recovers the revenue requirement impact of changes in amortization of EADIT, including that which resulted from 2017 U.S. federal tax reform, compared to the amount authorized in the most recently concluded rate case. Following the inaugural surcredit rate establishment under the TEAM mechanism in December 2022, Southwest Gas filed subsequent TEAM rate applications, including a recent filing, which proposes to update the TEAM surcharge to recover approximately $5.2 million resulting from changes related to the amortization of EADIT. The existing surcredit rate became effective June 1, 2024, and the proposed surcharge rate has been approved to become effective June 1, 2025.

Current wording

Tax Reform. A TEAM was approved in Southwest Gas’ 2019 general rate case to timely recognize tax rate changes resulting from federal or state tax legislation following the TEAM implementation. In addition, the TEAM tracks and returns/recovers the revenue requirement impact of changes in amortization of EADIT, including that which resulted from 2017 U.S. federal tax reform, compared to the amount authorized in the most recently concluded general rate case. Following the inaugural surcredit rate establishment under the TEAM mechanism in December 2022, Southwest Gas filed subsequent TEAM rate applications, including a recent filing, which proposed to update the TEAM surcharge to recover approximately $5.2 million resulting from changes related to the amortization of EADIT. The proposed surcharge rate was approved and became effective June 1, 2025.

Previous wording

General Revenues Adjustment. The GRA, or Nevada decoupling mechanism, was affirmed as part of Southwest Gas’ most recently concluded general rate case and adjustments are included in the ARA filings intended to update rates to recover/return amounts associated with various regulatory mechanisms, including the GRA. Recovery of rates and adjustments thereto as part of the ARA primarily impact cash flows, but not net income overall. Rates for the GRA and other regulatory mechanisms relating to the November 2023 ARA filing became effective May 1, 2024, earlier than the typical July 1 effective date. The

Current wording

General Revenues Adjustment. The GRA, or Nevada decoupling mechanism, was affirmed as part of Southwest Gas’ most recently concluded general rate case and adjustments are included in the ARA filings intended to update rates to recover/return amounts associated with various regulatory mechanisms, including the GRA. Recovery of rates and adjustments thereto as part of the ARA primarily impact cash flows, but not net income overall. Rates for the GRA and other regulatory mechanisms relating to the November 2024 ARA filing, associated with balances as of September 30, 2024, became effective July 1, 2025.

Previous wording

Line Locate Activity Expenses Application. Southwest Gas filed an application with the PUCN for authority to establish regulatory accounting treatment for line locate activity expenses and to establish a damage prevention cost mechanism. This would allow Southwest Gas to track the actual level of line locate costs in operation and maintenance expense and to record, in a regulatory asset or liability account, the difference between amounts incurred and the level established in the most recent general rate case. Approval to establish the damage prevention cost mechanism will provide the means to recover or return the accumulated balance of the line locate expenses tracked in the proposed regulatory account. This proposal is made without carrying charges on the regulatory mechanism balance proposed to be established, focusing solely on stemming the financial attrition suffered in between rate cases related to this work. Hearings are scheduled in June 2025 and resolution of this application is anticipated in the third quarter of 2025.

Current wording

Line Locate Activity Expenses Application. Southwest Gas filed an application with the PUCN for authority to establish regulatory accounting treatment for line locate activity expenses, allowing Southwest Gas to track the actual level of line locate costs in operation and maintenance expense and to record, in a regulatory asset or liability account, the difference between amounts incurred and the level established in the most recent general rate case. In July 2025, the PUCN approved regulatory accounting treatment of the line locate activity expenses, effective January 1, 2025. The proposal did not include carrying

Previous wording

California General Rate Case. Southwest Gas filed its most recent general rate case in September 2024 related to a future test year (2026), originally proposing a statewide revenue increase of approximately $49 million. Southwest Gas later updated its request to $43.7 million through supplemental testimony, requesting a revised revenue increase of $36.6 million for the southern California rate jurisdiction, a decrease of $2.8 million for the northern California rate jurisdiction, and an increase of $9.8 million for the South Lake Tahoe rate jurisdiction. The request is based on a capital structure consisting of 50% long-term debt and 50% common equity with a requested return on common equity of 11.35%, a modest increase compared to the 11.16% currently authorized. A continuation of Southwest Gas’ 2.75% PTY margin attrition adjustment for attrition years 2027 – 2030 is included, as well as continued use of the automatic trigger mechanism in lieu of annual cost of capital filings. Southwest Gas’ filing also includes a risk-based decision-making framework, proposing the continuation of the targeted pipe replacement program, the meter protection program, and COYL Program, along with the addition of a new annual leak survey program, collectively, under the infrastructure reliability and replacement adjustment mechanism umbrella. Authority to establish a damage prevention cost balancing account to record and recover (or return) certain costs associated with damage prevention expenses, specifically those related to line locating activities, was also requested. Consolidation of Southwest Gas’ northern California and South Lake Tahoe rate jurisdictions into a single rate-making jurisdiction was also proposed. Direct testimony from the Public Advocate’s Office was received and hearings are scheduled in the second quarter of 2025. The rate case will continue to be processed during 2025 with a final decision expected in the fourth quarter of 2025, and new rates expected to be effective in January 2026.

Current wording

California General Rate Case. Southwest Gas filed its most recent general rate case in September 2024 related to a future test year (2026), originally proposing a statewide revenue increase of approximately $49 million. Southwest Gas later updated its request to $43.7 million through supplemental testimony, requesting a revised revenue increase of $36.6 million for the southern California rate jurisdiction, a decrease of $2.8 million for the northern California rate jurisdiction, and an increase of $9.8 million for the South Lake Tahoe rate jurisdiction. The request is based on a capital structure consisting of 50% long-term debt and 50% common equity with a requested return on common equity of 11.35%, a modest increase compared to the 11.16% currently authorized. A continuation of Southwest Gas’ 2.75% PTY margin attrition adjustment for attrition years 2027 – 2030 is included, as well as continued use of the automatic trigger mechanism in lieu of annual cost of capital filings. Southwest Gas’ filing also includes a risk-based decision-making framework, proposing the continuation of the targeted pipe replacement program, the meter protection program, and COYL Program, along with the addition of a new annual leak survey program, collectively, under the IRRAM umbrella. Authority to establish a damage prevention cost balancing account to record and recover (or return) certain costs associated with damage prevention expenses, specifically those related to line locating activities, was also requested. Consolidation of Southwest Gas’ northern California and South Lake Tahoe rate jurisdictions into a single rate-making jurisdiction was also proposed. The Public Advocate's Office (Cal Advocates) filed direct testimony April 4, 2025 recommending a statewide revenue increase of approximately $26 million based on a capital structure consisting of 48% common equity and 52% long-term debt, as well as support for the continuation of the 2.75% PTY margin attrition adjustment as well as the automatic trigger mechanism. Cal Advocates also supported Southwest Gas’ proposed infrastructure investments under the IRRAM, though the level of overall investment was slightly lower than the amount proposed by Southwest Gas. As a result of constructive settlement discussions, Southwest Gas and Cal Advocates successfully reached a partial settlement and have agreed to litigate the outstanding issues, limited to capital structure, return on equity and the resultant overall rate of return. The limited-issue hearing was held on July 29, 2025 with a final decision anticipated in the fourth quarter of 2025, and new rates expected to be effective in January 2026.

Previous wording

General Rate Case. Great Basin, a wholly owned subsidiary of Southwest Gas, filed a notice of a change in rates (pursuant to applicable regulations) on March 6, 2024, requesting that rates for its natural gas service subject to the filing be made effective April 6, 2024. The FERC, however, suspended the case for a five-month period, which allowed rates to go into effect, subject to refund, on September 6, 2024. The filing included a request to continue a term-differentiated rate structure, which was adopted as part of Great Basin’s previous general rate case, to provide an overall annual revenue increase of approximately $13 million, and a return on equity of 11.95% and a capital structure of 50% long-term debt and 50% common equity. A primary driver of the increase was approximately $99 million of capital investments, much of which was placed in service by the end of the August 31, 2024 test year. An all-party settlement was reached recommending approval of a $9.6 million revenue increase based on a 9.76% pretax rate of return. Rate base increased to approximately $191 million, a 41% increase over the previously authorized $135.5 million. The settlement was filed with the FERC for final consideration in December 2024, and a Letter Order was issued in March 2025, approving the uncontested settlement. Since no party requested reconsideration, the Letter Order became effective April 2, 2025 and refund amounts in excess of the base tariff rates established in the settlement will be issued by June 2, 2025.

Current wording

General Rate Case. Great Basin, a wholly owned subsidiary of Southwest Gas, filed a notice of a change in rates (pursuant to applicable regulations) on March 6, 2024, requesting that rates for its natural gas service subject to the filing be made effective April 6, 2024. The FERC, however, suspended the case for a five-month period, which allowed rates to go into effect, subject to refund, on September 6, 2024. The filing included a request to continue a term-differentiated rate structure, which was adopted as part of Great Basin’s previous general rate case, to provide an overall annual revenue increase of approximately $13 million, and a return on equity of 11.95% and a capital structure of 50% long-term debt and 50% common equity. A primary driver of the increase was approximately $99 million of capital investments, much of which was placed in service by the end of the August 31, 2024 test year. An all-party settlement was reached recommending approval of a $9.6 million revenue increase based on a 9.76% pretax rate of return. Rate base increased to approximately $191 million, a 41% increase over the previously authorized $135.5 million. The settlement was filed with the FERC for final consideration in December 2024, and a Letter

Previous wording

2028 Expansion Project. In response to inquiries related to available capacity and changing market needs, Great Basin posted notice of a Binding Open Season for a 2028 system expansion. The Binding Open Season, initially scheduled from January 28, 2025 through April 30, 2025 to determine the level of interest of existing and potential shippers for new or

Current wording

2028 Expansion Project. In response to inquiries related to available capacity and changing market needs, Great Basin posted notice of a Binding Open Season for a 2028 system expansion. The Binding Open Season, initially scheduled from January 28, 2025 through April 30, 2025 to determine the level of interest of existing and potential shippers for new or additional firm transportation service, was extended through June 2025 to allow for consideration of alternative in-service date requests as part of the bids, and resulted in a potential incremental capacity of up to ~1.76 Bcf of demand per day.

Previous wording

The rate schedules in all of Southwest Gas’ service territories contain provisions that permit adjustment to rates as the cost of purchased gas changes. These deferred energy provisions and purchased gas adjustment clauses are collectively referred to as “PGA” clauses. Differences between gas costs recovered from customers and amounts paid for gas by Southwest Gas result in over- or under-collections. Balances are recovered from, or refunded to, customers on an ongoing basis with interest. As of March 31, 2025, under-collections in California resulted in an asset of approximately $7 million and over-collections in the Arizona and Nevada territories resulted in a liability of approximately $289 million. The substantial reduction in balances between periods in the table below reflects a combination of specific recovery rates in place to collect the build-up of earlier balances as a result of the cost paid for gas in those earlier periods (rates for which are subject to certain limitations depending on the jurisdiction), and the impacts related to base rates under the mechanisms, which have exceeded the cost of recent gas supply purchases by Southwest Gas.

Current wording

The rate schedules in all of Southwest Gas’ service territories contain provisions that permit adjustment to rates as the cost of purchased gas changes. These deferred energy provisions and purchased gas adjustment clauses are collectively referred to as “PGA” clauses. Differences between gas costs recovered from customers and amounts paid for gas by Southwest Gas result in over- or under-collections. Balances are recovered from, or refunded to, customers on an ongoing basis with interest. As of June 30, 2025, over-collections in each of Southwest Gas’ service territories resulted in a liability of approximately $349 million. The over-collected balances in the table below reflect the impacts related to specific recovery rates under existing mechanisms, which have exceeded the cost of recent gas supply purchases by Southwest Gas.

Previous wording

Filings to change rates in accordance with PGA clauses are subject to audit by state regulatory commission staffs. The operation of the mechanism in California is typically the most responsive to changes in gas supply costs, and maximum rate adjustments for the earlier build-up (positive or negative) apply to Nevada and Arizona; however, refer to the PGA Modification discussion above (in 2025) related to Arizona. PGA changes impact cash flows but have no direct impact on operating margin. However, gas cost deferrals and recoveries can impact comparisons between periods of individual consolidated income statement components. These include Regulated operations revenues, Net cost of gas sold, Net interest deductions, and Other income (deductions).

Current wording

Filings to change rates in accordance with PGA clauses are subject to audit by state regulatory commission staffs. The operation of the mechanism in California is typically the most responsive to changes in gas supply costs, and maximum rate adjustments for the earlier build-up (positive or negative) apply to Nevada and Arizona; however, refer to the PGA Modification discussion above related to Arizona and the DEAA Modificationin Nevada. PGA changes impact cash flows but have no direct impact on operating margin. However, gas cost deferrals and recoveries can impact comparisons between periods of individual consolidated income statement components. These include Regulated operations revenues, Net cost of gas sold, Net interest deductions, and Other income (deductions).

Previous wording

Historically, cash on hand and cash flows from operations have provided a substantial portion of cash used in investing activities (primarily for construction expenditures and property additions). In recent years, Southwest Gas has undertaken substantial pipe replacement activities to fortify system integrity and reliability, including on an accelerated basis in association with certain gas infrastructure replacement programs. This activity has necessitated the issuance of both debt and equity securities to supplement cash flows from operations, before cash reserves built up at the utility in more recent periods, including from collections under the PGA mechanisms. Southwest Gas Holdings and Southwest Gas’ capitalization strategy is to maintain an appropriate balance of equity and debt to preserve investment-grade credit ratings, which help minimize interest costs. Investment-grade credit ratings have been maintained by Southwest Gas Holdings and Southwest Gas.

Current wording

Historically, cash on hand and cash flows from operations have provided a substantial portion of cash used in investing activities (primarily for construction expenditures and property additions). In recent years, Southwest Gas has undertaken substantial pipe replacement activities to fortify system integrity and reliability, including on an accelerated basis in association with certain gas infrastructure replacement programs. This activity has necessitated the issuance of both debt and equity securities to supplement cash flows from operations, before cash reserves built up at the utility in more recent periods, including from collections under the PGA mechanisms. Southwest Gas Holdings and Southwest Gas’ capitalization strategy is to maintain an appropriate balance of equity and debt to preserve investment-grade credit ratings, which help minimize interest costs. Investment-grade credit ratings have been maintained by Southwest Gas Holdings and Southwest Gas. There have been no changes to Southwest Gas Holdings’ or Southwest Gas’ ratings by Standard & Poor’s Ratings Services, Moody’s Investors Service, or Fitch Ratings from those included in the Annual Report on Form 10-K for the year ended December 31, 2024, except that Fitch Ratings adjusted its Issuer ratings outlook for Southwest Gas Holdings’ from Negative to Stable.

Previous wording

Operating Cash Flows. Cash flows provided by consolidated operating activities decreased $252 million in the first three months of 2025 as compared to the same period of 2024. The decrease was primarily driven by the substantial reduction of collection of previously deferred purchased gas costs for Southwest Gas. Recovery rates were in place to collect the earlier build-up of PGA balances, which are collectively now in a net liability position. The remaining difference reflects the impacts of increased earnings and changes in other components of working capital overall.

Current wording

Operating Cash Flows. Cash flows provided by consolidated operating activities decreased $432.7 million in the first six months of 2025 as compared to the same period of 2024. The decrease was primarily driven by the substantial reduction of collection of previously deferred purchased gas costs for Southwest Gas. Recovery rates were in place to collect the earlier

Previous wording

Investing Cash Flows. Cash flows used in investing activities decreased $13 million in the first three months of 2025 as compared to the same period of 2024. The decrease was driven by reduced outflows for construction expenditures and property additions in the first three months of 2025 compared to the same period of 2024, partially offset by proceeds received from the sale of other property in 2024, with no similar inflow in 2025.

Current wording

Investing Cash Flows. Cash flows used in investing activities decreased $29.9 million in the first six months of 2025 as compared to the same period of 2024. The decrease was driven by reduced outflows for construction expenditures and property additions in the first six months of 2025 compared to the same period of 2024, partially offset by a reduction in proceeds received from the sale of other property as compared to 2024.

Previous wording

Financing Cash Flows. Cash flows from consolidated financing activities decreased $70 million in the first three months of 2025 as compared to the same period of 2024. The decrease was primarily due to lower borrowing activity in 2025 and increased repayments under Centuri’s revolving credit and term loan facility.

Current wording

Financing Cash Flows. Cash flows from consolidated financing activities decreased $99.0 million in the first six months of 2025 as compared to the same period of 2024. The decrease included a prepayment on Southwest Gas Holdings’ term loan of $325.0 million and an approximately $95.0 million (net of borrowings) paydown on its revolving credit facility utilizing proceeds from the completion of the Company’s secondary public offerings and private placement sales of the Company’s Centuri stock of $448.7 million. Additionally, in 2024, net financing activities included Centuri’s redemption of the remaining redeemable noncontrolling interest in Linetec for $92.0 million, as well as proceeds received from the Centuri IPO in 2024 of $330.3 million. The remaining difference was primarily due to lower borrowing activity in 2025 and increased repayments under Centuri’s revolving credit and term loan facility.

Previous wording

Corporate and administrative expenses/outflows for Southwest Gas Holdings in the first three months of 2025 overall primarily include interest paid on outstanding borrowings.

Current wording

Corporate and administrative expenses/outflows for Southwest Gas Holdings in the first six months of 2025 overall primarily include interest paid on outstanding borrowings.

Previous wording

The capital requirements and resources of the Company generally are determined independently for the individual business segments. Each business segment is generally responsible for securing its own debt financing sources. However, the holding company may raise funds through stock issuances or other external financing sources in support of each business segment.

Current wording

The capital requirements and resources of the Company generally are determined independently for the individual business segments. Each business segment is generally responsible for securing its own debt financing sources. However, the holding company may raise funds through equity issuances or other external financing sources in support of each business segment.

Previous wording

Operating Cash Flows. Cash flows provided by operating activities decreased approximately $292 million in the first three months of 2025 as compared to the same period of 2024 primarily attributable to the substantial reduction in collection of deferred purchased gas costs (as discussed above), in addition to reflecting cash flows from other working capital changes overall.

Current wording

Operating Cash Flows. Cash flows provided by operating activities decreased approximately $492.4 million in the first six months of 2025 as compared to the same period of 2024 primarily attributable to the substantial reduction in collection of deferred purchased gas costs (as discussed above), in addition to reflecting cash flows from other working capital changes overall.

Previous wording

Investing Cash Flows. Cash used in investing activities decreased $8 million in the first three months of 2025 as compared to the same period of 2024. Outflows for capital expenditures decreased by $28 million between periods, partially offset by inflows from the sale of property in 2024. See also Natural Gas Distribution Segment Construction Expenditures, Debt Maturities, and Financing below.

Current wording

Investing Cash Flows. Cash used in investing activities decreased $21.8 million in the first six months of 2025 as compared to the same period of 2024. Outflows for capital expenditures decreased by $28.9 million between periods, partially offset by greater inflows from the sale of property in 2024 compared to 2025. See also Natural Gas Distribution Segment Construction Expenditures, Debt Maturities, and Financing below.

Previous wording

Financing Cash Flows. Net cash used in financing activities increased $6 million in the first three months of 2025 as compared to the same period of 2024 primarily due to an increase in dividends paid between periods.

Current wording

Financing Cash Flows. Net cash used in financing activities increased $11.2 million in the first six months of 2025 as compared to the same period of 2024, primarily due to an increase in dividends paid between periods.

Previous wording

During the three-month period ended March 31, 2025, construction expenditures for the natural gas distribution segment were $163 million. The majority of these expenditures were associated with new construction and other general plant additions, with the remainder attributable to the replacement of existing transmission and distribution pipeline facilities to fortify system integrity and reliability.

Current wording

During the six-month period ended June 30, 2025, construction expenditures for the natural gas distribution segment were $362.5 million. These expenditures are associated with new construction and other general plant additions, in addition to the replacement of existing transmission and distribution pipeline facilities to fortify system integrity and reliability.