SWX 10-K & 10-Q changes, risk factors and insider trading

Described below (and in Item 7A. Quantitative and Qualitative Disclosures about Market Risk of this report) are risk factors that we have identified that may have a material negative impact on our future financial performance or affect whether we achieve the goals or expectations expressed or implied in any forward-looking statements contained herein. Additional risks or uncertainties not currently known to us, or that we currently deem immaterial, may also ultimately have a material adverse effect on our business, financial condition, prospects, results of operations, or cash flows. We cannot assure our stockholders that any of the events discussed in the risk factors below will not occur. References below to “we,” “us,” and “our” should be read to refer to Southwest Gas Holdings, Inc. and any combination of its subsidiaries, including Southwest Gas Corporation and Centuri Holdings, Inc.Corporation.

Southwest Gas relies on having access to interstate pipelines’ transportation capacity.capacity, including extractive‑sector supply paths and midstream pipeline infrastructure. If these pipelines and related transportation capacity were not available, it could impact Southwest Gas’ ability to meet customers’ full requirements.

Southwest Gas must acquire both sufficient natural gas supplies and interstate pipeline capacity to meet customer requirements. We must contract for reliable and adequate delivery capacity for our distribution system,system while considering the dynamics of the interstate pipeline capacity market, our own on-system resources, as well as the characteristics of our customer base. Interruptions to or reductions of interstate pipeline service caused by physical constraints, other restrictions, excessive customer usage, cyber attacks, or other force majeure events could reduce our normal supply of gas. Restrictions placed on pipelines or the extractive and mid-stream industries could disrupt our business and reduce cash flows and earnings. A prolonged interruption or reduction of interstate pipeline service or availability of natural gas in any of our jurisdictions, particularly during the winter heating season, would reduce cash flow and earnings.

Our ability to implement our business strategy and serve our customers with safe, reliable, and affordable service is dependent upon our continuing ability to attract and retain talented professionals, including executives and other management, and a technically skilled workforce overall, and it impacts our ability to transfer the knowledge and expertise of our workforce to new employees as our agingtenured employees retire. It also impacts our ability to timely deploy on strategic initiatives we plan. Failure to attract, hire, onboard, and adequately train replacementnew and existing employees, including strategic leaders, andincluding tothe transfer of significant internal historicalinstitutional knowledge and expertise to the new employees and management, or the future availability and cost of contract laborlabor, could adversely affect our ability to manage and operate our business, and to execute on our strategic plans, or to do so within the timeframes we plan.

Our collective businessesWe have recently experienced turnover,turnover including at the executive ranks at Centurilevel in 2024.2025. Turnover at thesethis rankslevel cancould limit or delay our ability to deploy on plans, including strategic plans, which could adversely impact our business, service to customers, credibility with regulators, stock price, financial condition, results of operations, and cash flows. In addition, executive leadership transition periods can often be difficult and may result in changes in leadership strategy and style. We can provide no assurances that any associated organizational change, or changes in business strategy, will be beneficial or have the desired impact on the Company.

Certain of our costs, such as operating expenses (including labor, fuel, and materials) at Southwest Gas and Centuri,Gas, and interest and general and administrative expenses at both segmentsSouthwest Gas and the Company could be adversely impacted by periods of heightened inflation, which could have an adverse impact on our results of operations.

In recent years, the consumer price index has increased substantially and may continue to remain at elevated levels for an extended period of time. Federal policies and global events, such as the volatility in prices of oil and natural gas, the recent implementation of,of and potential increase in,in tariffs by the current U.S. presidential administration, retaliatory tariffs as a resultsresult thereof, or the failure of current energy policy intended to combat inflation, asmarket wellinstability, asgeopolitical the conflicts between Russiaconditions and Ukraineconflicts, health crises, and innatural the Middle East,disasters may continue to exacerbate increases in the consumer price index. In addition, during periods of rising inflation, variable interest rates and the interest rates of any newly issued debt securities will likely be higher than those incurred in connection with previous debt issuances, which will further tend to reduce returns to our stockholders. A sustained or further increase in inflation could have a material adverse impact on our operating expenses incurred in connection with, among others, the cost of fuel, labor, equipment/equipment-related, and materials costs, as well as general administrative expenses, operating supplies and expenses, and maintenance of our system, as well as increasing outlays for gas supply passed on to customers and the cost of capital improvements at Southwest Gas, in addition to requiring us to borrow amounts to fund the incremental outlays.

With regard to Southwest Gas, rateRate schedules in each of itsSouthwest Gas’ service territories contain purchased gas adjustment clauses which permit Southwest Gas to file for rate adjustments to recover increases in the cost of purchased gas. Increases in the cost of purchased gas have no direct impact on our profit margins,margins but do affect cash flows and can therefore impact the amount of our capital resources. In order to help cope with the effects of inflation on its operations, Southwest Gas has filed and may file requests for rate increases to cover the increased cost of purchased gas included in a regulatory assetasset, when applicableapplicable, or expense items noted above. However, there can be no assurance that Southwest Gas will be able to obtain timely rate relief to offset the effects of inflation or to timely or adequately cover borrowing costs to fund the increased cost of purchased gas and capital expenditures; and any non-recovery of costs or regulatory lag will reduce our cash flows and earnings. As a result, during periods in which the inflation rate exceeds customer rate increases,increases we may not adequately mitigate the impact of inflation, which may adversely affect our business, financial condition, results of operations, and cash flows.

Inflationary pressures, including any related impacts of increased indebtedness, on customers of both Southwest Gas and Centuri may influence the timely remittance (or any remittance) of customer payments for services, which may adversely affect our cash flows and associated reserves for uncollectible accounts and earnings.

As a result of the inflationary factors discussed above affecting the Company,Company and Southwest Gas, and Centuri, our business, financial condition, results of operations, cash flows, and liquidity could be adversely affected over time.

Our natural gas distribution operations are subject to inherent hazards and risksrisks, such as gas leaks, fires, natural disasters, catastrophic accidents, explosions, pipeline ruptures, and other hazards and risks that may cause unforeseen interruptions, personal injury, or property damage. Our utility infrastructure services operations are reliant on skilled personnel who are trained and qualified to install utility infrastructure under established safety protocols and operator qualification programs, and in conformance with mandated engineering design specifications. Lapses in judgment or failure to follow protocol could lead to warranty and indemnification liabilities or catastrophic accidents,accidents causing property damage or personal injury. Additionally, our facilities, machinery, and equipment, including our pipelines, are subject to third-party damage from construction activities, vandalism, or acts of terrorism. Such incidents could result in severe business disruptions, significant decreases in revenues, and/or significant additional costs to us. Any such incident could have an adverse effect on our financial condition, earnings, and cash flows. In addition, any of these or similar events could result in legal claims against us, cause environmental pollution, personal injury or death claims, damage to our properties or the properties of others, or loss of revenue by us or others.

The Company maintains liability insurance that covers Southwest Gas for some, but not all, risks associated with the operation of our natural gas pipelines and facilities. In connection with these liability insurance policies, each entity is responsible for an initial deductible or self-insured retention amount per incident,incident after which the insurance carriers would be responsible for amounts up to the policy limits. Liability insurance policies at Southwest Gas require us to be responsible for the first $1$1.0 million (self-insured retention) of each incident plus the first $4$4.0 million in total claims above our self-insured retention in the policy year; while Centuri’s self-insured retention amount is $750,000 per occurrence.year. We cannot predict the likelihood that any future event will occur which will result in a claim exceeding these amounts;amounts, however,however a large claim for which we were deemed liable would reduce our earningsearnings, up to and including these self-insurance maximums, and uninsured claims for which we were deemed liable would reduce our earnings in the amount of the claim.claim, net of taxes.

Regulatory and legislative developments related to climate change, or renewable portfolio standardsstandards, or costs for renewables, may adversely affect our operations and financial results.

While natural gas can be more environmentally friendly than many other fuels currently available,available and its use has assisted energy users to comply with stricter environmental air quality standards, there have been several federal and state legislative and regulatory initiatives proposed, some of which have been implemented in recent years, attempting to control or limit the effects of global warming and overall climate change,change including a focus on GHG emissions, such as carbon dioxide or methane. The adoption of this type of legislation by CongressCongress, or similar legislation by state governmentsor local governments, mandating a substantial reduction in GHG emissions, or decarbonization generally, or electrification, could have significant impacts on the utility industry. Any resulting legislation or regulations could result in increased compliance costs or additional operating restrictions on our business, affect the demand for natural gas and utility infrastructure services,gas, or impact the prices we charge our customers.

Furthermore, changes in renewable portfolio standards or costs related to renewable initiatives may result in decreased demand for renewable energynatural gas projects related to Centuri or Southwest Gas. Offshore wind energy and other renewable energy facilities and investments are dependent on the existence of related standards and requirements, and in some cases, government incentives.

Southwest Gas and Centuri may be impacted by the effects of weather and climate change, including physical and transition risks.

Extreme weather events and climate change could adversely impact our businesses.business. To the extent climate change or extreme weather events materially increase temperatures, financial results or our financial position could be adversely affected through lower gas volumes and revenues. While Southwest Gas has in place decoupling mechanisms to guard against weather and volume variability in all three states, lower volumes could protract the period of recovery of certain regulatory mechanisms, and, for jurisdictions in which decoupling benchmarks are designed on a per-customer basis, earnings may deteriorate if these factors cause shifts in population, notably, customers moving away from our service territories.

While Centuri is at times able to benefit by providing storm-restoration services in regard to its customers’ above-ground utility infrastructure, and this type of work generates a higher profit margin than core infrastructure services (due to improved operating efficiencies related to equipment utilization and absorption of fixed costs), climate change could detrimentally result in more frequent and more severe weather events, such as hurricanes, tornadoes, extreme precipitation/flooding, and extreme snow events, increasing the cost of supporting restoration or limiting access to perform the necessary work efficiently or at all. Drought and high temperature variations are common occurrences in the southwestern U.S. and could impact Southwest Gas’ growth and results of operations. In addition, if we were unable to obtain a sufficient supply of natural gas as a result of extreme weather events impacting our suppliers, or if extreme weather events impact our ability to deliver natural gas to our customers, our reputation may suffer, and financial results could be impacted by insufficient cash flows from lower billed revenues and higher borrowing costs, even if decoupling mechanisms permit recognition of revenues for later cash collection under the mechanisms.

Additionally, if the Company does not evolve its business practices to participate in a lower-carbon economy, its business and reputation may be negatively impacted. Although the number of renewable energy sources is growing, it will take time for North America to transition to a lower-carbon economy and will require innovation, technological advancements, and substantial investments that result in new low- and no-carbon energy options. As a builder of both energy and renewable energy infrastructure, and as a natural gas service provider, theSouthwest CompanyGas plays a vital role. Transition activities, such as reducing GHG emissions; investing in RNG, hydrogen, and other sustainable sources of energy; increasing customer participation in energy efficiency programs; displacing higher carbon intensive fuels with natural gas and reducing carbon intensity of fuels we deliver; working with upstream suppliers on certified or responsibly sourced gas; and taking additional measures by offering and using carbon offset purchases, could result in significant capital outlays and increased expenses.

A cybersecurity incident has the potential to disrupt normal business operations, expose sensitive and confidential customer, employee or Company information, and/or lead to physical damages, and may result in legal claims or damage to our reputation.

As a utilitynatural provider and infrastructure servicesgas provider, maintaining business operations is critical for our customers, business partners, suppliers, and employees. Our operations and information technology systems may be vulnerable to ana cyber attack by individuals or organizations intending to disrupt our business operations and information technology systems, even though the Company has implemented policies, procedures, and controls designed to help prevent and detect these activities. Third-party service providers, including those in our supply chain or who have access to customer and employee data or our systems, can also be the target of cyber attacks. We use our information technology systems to manage our intrastate and interstate pipeline and storage operations and other business processes. Disruption of those systems could adversely impact our ability to safely deliver natural gas to our customers and operate our pipeline and storage systems, result in harm to our reputation, and result in adverse financial impacts, including damages from possible legal claims.

We process and store sensitive information,and confidential data, including certain PII, intellectual property, and business proprietary information as part of normal business operations. A cybersecurity breach ofresulting thisin informationunauthorized access could have a material adverse effect on our business reputation, increase our costs, and expose us to monetarymaterial legal claims and other damagesliability from customers, suppliers, business partners, government agencies, and others. The federal and state legislative and regulatory environment surrounding PII, information security, and data privacy is evolving and is likely to become increasingly demanding. Should the Company experience a material breach and/or become subject to additional regulation, it could face substantial compliance costs, reputational damage, and uncertain litigation risks.

PhysicalIn addition, physical damage due to a cybersecurity incident or acts of cyber terrorism could impact our utility sales, transportation, storage, and related services provided to customers and could lead to material liabilities. The Company has taken the initiative in fortifying the core infrastructure that supports the provision of these services. While these measures provide layers of defense to mitigate these risks, there can be no assurance that the measures will be effective against any particular cyber attack. Even though we have insurance coverage in place for cyber-related risks, if such an attack or act of terrorism were to occur, the Company’s operations and financial results could be adversely affected to the extent not fully covered by such insurance.

Southwest Gas Holdings is a holding company that owns all of the shares of common stock of Southwest Gas; until April 22, 2024, all of the shares of common stock of Centuri; and until February 14, 2023, all of the shares of common stock of MountainWestMountainWest. The Company’s businesses were managed within three separate reportable segments until February 2023, our Natural Gas Distribution segment (Southwest Gas), our Utility Infrastructure Services segment (Centuri), and our Pipeline and Storage segment (MountainWest). After February 14, 2023 isand until August 2025, the datebusinesses onwere whichmanaged within two reportable segments, our Natural Gas Distribution segment (Southwest Gas) and our Utility Infrastructure Services segment (Centuri). After the MountainWestdeconsolidation saleof closed).Centuri in August 2025, our business is solely comprised of our Natural Gas Distribution segment.

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 pipelinespipelines, including Great Basin, 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.

As of December 31, 2024,2025, Southwest Gas had approximately 2,258,0002,281,000 residential, commercial, industrial, and other natural gas customers, of which 1,210,0001,224,000 customers were located in Arizona, 841,000849,000 in Nevada, and 207,000208,000 in California. First-time meter sets were approximately 41,00037,000 in 20242025, of which 23,00021,000 were located in Arizona, 17,00015,000 in Nevada, and 1,000 in California; compared to 40,00041,000 in 20232024, of which 24,00023,000 were located in Arizona, 15,00017,000 in Nevada, and 1,000 in California. Residential and commercial customers represented over 99% of the total customer base. During 2024,2025, 53% of operating margin (gas operating 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 general patterns are expected to remain materially consistent for the foreseeable future.future, subject to the ultimate outcome of the Great Basin Expansion Project. Refer to Potential 2028 Great Basin Expansion Project discussion below.

Southwest Gas recognizes operating revenues from the distribution and transportation of natural gas (and related services) to customers. Operating margin is a financial measure defined by management as Regulated operations revenues less the net cost of gas sold. However, operating margin is not specifically defined in U.S. GAAP. Thus, operating margin is considered a non-GAAP measure. Management uses this financial measure because Regulated operations revenues include the net cost of gas sold, which is a tracked cost that is passed through to customers without markup under PGA mechanisms. Fluctuations in the net cost of gas sold impact revenues on a dollar-for-dollar basis, but do not impact operating margin or operating income. Therefore, management believes operating margin provides investors and other interested parties with useful and relevant information to analyze Southwest Gas’ financial performance in a rate-regulated environment. The principal factors affecting changes in operating margin are generalgenerally ratethe relieftiming and amount of updated rates (to better align with Southwest Gas’ cost of service and capital investments, including impacts of infrastructure program recoveriestrackers) and customer growth. Public utility commission decisions on the amount and timing of relief may impact our earnings. Refer to the Summary Operating Results table below for a reconciliation of utility gross margin to operating margin, and refer to Rates and Regulatory Proceedings in this Management’s Discussion and Analysis for details of various rate proceedings.

AllOur of our businessesbusiness 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 other 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.

The items discussed in this Executive Summary are intended to provide an overview of the results of the Company’s,Company’s and Southwest Gas’, and Centuri’sGas’ operations and are covered in greater detail in later sections of management’sthis discussionManagement’s Discussion and analysis.Analysis.

•Finished the year with moreapproximately than $360$576.6 million of cash on a consolidated basis given recovery of earlier under-recovered PGA balances; the Company continuesdid tonot expectissue limitedequity capitalin markets needs through the end of 20252025.

•41,00037,000 first-time meters sets (1.8%1.6% growth rate) added over the past 12 monthsmonths.

Results of Natural Gas DistributionOperations

Contribution to consolidated net income from natural gas distribution operations increased $19$39.1 million between 20242025 and 2023. The increase was2024 primarily due to an increase in Operating margin, offset by increases in Operations and maintenance expense, Net interest deductions, and Depreciation and amortization.:

•$27.6 million, or 9%, higher Depreciation and amortization expense increasedreflecting $8a $672.1 million, or 3%, between years including due to a $720 million, or 7%,6%, increase in average gas plant in service in the current year.year, in addition to $8.0 million in higher amortization related to regulatory account balances noted above. The increase in gas plant was primarily attributable to scheduled pipe replacement activities, new infrastructure, pipeline capacity reinforcement work, and franchise requirements, scheduled pipe replacement activities, and new infrastructure. This increase was offset by a decrease in amortization of regulatory account balances of $6.8 million as noted above.requirements.

•$16.4 million lower Other income decreased(which $16is millionnet betweenof 2024other and 2023,deductions) primarily due to a decline of $17.2 million in interest income compared to the prior year, related to a reduction in carrying charges associated with regulatory account balances, notably,notably PGA balances, which decreased from an asset balance of $553$465.3 million as of December 31, 2023 to a net liability balance of $228$241.6 million as of December 31, 2024. Interest income is earned when these balances are in asset positions and interest expense is incurred when balances are in liability positions.

•$12.4 million higher Net interest deductions increased $12 million between 2024 and 2023 primarily due to the impacts of surcharges/surcredits and deferral activity related to a regulatory mechanism associated with interest on Southwest Gas’ industrial development revenue bonds. Interest also increased due to amounts incurred on the over-collected PGA balance. AdditionallyAdditionally, contributing to the increase was a lower level of debt-related AFUDC, which had the impact of increasing interest expense on a relative basis in 2024.

As of MarchJune 31,30, 2026, Southwest Gas had approximately 2,287,0002,293,000 residential, commercial, industrial, and other natural gas customers, of which 1,227,0001,231,000 customers were located in Arizona, 852,000854,000 in Nevada, and 208,000 in California. Residential and small commercial customers represented over 99% of the total customer base. During the twelve months ended MarchJune 31,30, 2026, approximately 53%52% of operatingOperating margin (Regulated operations revenues less the net cost of gas sold) was earned in Arizona, approximately 35%34% in Nevada, and approximately 12%14% in California. During this same period, Southwest Gas earned approximately 85% of its operatingOperating margin from residential and small commercial customers, approximately 4% from other sales customers, and approximately 11% from transportation customers. These patterns are expected to remain materially consistent for the foreseeable future subject to the ultimate outcome of the Great Basin 2028 expansion project. Refer to Potential 2028 Great Basin 2028 Expansion Project discussion below.

Southwest Gas recognizes operating revenues from the distribution and transportation of natural gas (and related services) to customers. Operating margin is a financial measure defined by management as Regulated operations revenues less the net cost of gas sold. However, operatingOperating margin is not specifically defined in U.S. GAAP. Thus, operatingOperating margin is considered a non-GAAP measure. Management uses this financial measure because Regulated operations revenues include the net cost of gas sold, which is a tracked cost that is passed through to customers without markup under PGA mechanisms. Fluctuations in the net cost of gas sold impact revenues on a dollar-for-dollar basis, but do not impact operatingOperating margin or operating income. Therefore, management believes operatingOperating margin provides investors and other interested parties with useful and relevant information to analyze Southwest Gas’ financial performance in a rate-regulated environment. The principal factors affecting changes in operatingOperating margin are generally the timing and amount of updated rates (to better align with Southwest Gas’ cost of service and capital investments, including impacts of infrastructure trackers) and customer growth. Public utility commission decisions on the amount and timing of relief may impact our earnings. Refer to the Summary Operating Results table below for a reconciliation of Utility gross margin to operatingOperating margin, and refer to Rates and Regulatory Proceedings, in this MD&A,below for details of various rate proceedings.

•If Southwest Gas has over-recovered costs, it records a regulatory liability on the Condensed Consolidated Balance Sheets as deferred purchased gas costs and interest expense on the Condensed Consolidated Statements of Income within the Net interest deductions line item.

(1) In connection with the deconsolidation of Centuri, certain amounts in Corporate and administrative that relate to the Centuri separation have been reclassified to discontinued operations for all periods presented as applicable.

(2) Historically, Southwest Gas Corporation’s operating results have corresponded to the operating results of the Natural Gas Distribution Segment. The amounts reported in the table above differ from the Natural Gas Distribution Segmentsegment for the six months ended June 30, 2025 due to the revision described in our 2025 Annual Report on Form 10-K10-K.

1st2nd Quarter 2026 overview and other recent developments

•Finished the firstsecond quarter of 2026 with approximately $484.8$270.5 million of Cash and cash equivalents on a consolidated basis and nearly $1.2$1.0 billion in available liquidity; the Company does not expect to issue equity in 2026.

•Great Basin completed an open season in April 2026 for available capacity forin theits 2028 expansion project. ProspectivePrecedent shippersAgreements submittedwere incrementalexecuted bidsfor totaling322,000 2.3mcf per day for 2028, for a project total of 948,876 mcf per day. Great Basin received interest of an additional 1.8 billion cubic feet pera day with requested in-service dates ranging from 2028-2035.2029 through 2035.

Historically, the Natural Gas Distribution segment operating results have corresponded to the operating results of Southwest Gas Corporation. The amounts reported in the table abovebelow differ from Southwest Gas Corporation for the three months ended MarchJune 31,30, 2025 period due to the revision described in Note 6 - Previously Issued Condensed Consolidated Financial Statement.

In the three months ended MarchJune 31,30, 2026 compared to the same period in 2025, the decrease in net income of $5.2$4.9 million was primarily due to:

•$6.4$16.2 million higher Income tax expense primarily due to a $12.0 million state income tax benefit recognized in the prior year’s quarter related to a change in state apportionment rates that did not reoccur in the current quarter. The increase was also driven by higher pre-tax income differences,differences theand lower amortization of excess accumulated deferred income taxes,taxes andin nondeductiblethe executivecurrent compensation.quarter.

•$5.9$8.7 million, or 6%,13%, higher Depreciation and amortization expense reflecting a $670.5$726.7 million, or 6%,7%, increase in gas plant in service since the corresponding firstsecond quarter of 2025, in addition to $1.1$4.9 million in higher amortization related to regulatory account balances noted above.below. The increase in plant was attributable to pipeline capacity reinforcement work, franchise requirements, scheduled pipe replacement activities, and new infrastructure.

•$15.1$25.5 million higher Operating margin primarily driven by updated rates that better align with Southwest Gas’ cost of service and capital investments across Arizona and NevadaCalifornia adding approximately $13.2$19.5 million of incremental marginmargin, the majority of which was attributable to the revenue recognized in connection with final approval of the All-Party Settlement, before adjustments to cost of capital, associated with the California general rate case, and $3.1$1.4 million attributable to customer growth, which is reflective of 1.0% net customer growth duringfor theall twelve months ended March 31, 2026. For California, we recorded revenues based on 2025 authorized levels pending the general rate case final decision.territories. Also contributing to the increase werewas $2.0 million attributable to nondecoupled billed margin across Arizona and Nevada and $1.1$4.9 million related to the combined impacts of increases in recovery/return, offset by a comparable increase in depreciation and amortization expense in regulatory account balances noted below. Partially offsetting the increase is $4.7 million attributable to the absence of recovery in the current period, as recovery under the Vintage Steel Pipeline Program was concluded during the first quarter of 2025.above.

In the three months ended MarchJune 31,30, 2026, net income improved by $9.3$47.7 million compared to a net loss in the same period in 2025; the improvement was primarily due to:

In the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, the decrease in net loss of $20.4$39.4 million reflects the absence of Centuri’s operating results in the current period following the completion of its disposition, compared to a full quarter of Centuri’s results included in the prior year period.

In the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, the decrease in net income of $4.8$4.9 million was consistent with the Natural Gas Distribution except for:segment.

•$4.0$20.2 million higher Income tax expense consistent with the Natural Gas Distribution segment explanation combined with a decrease in income taxes of $2.4 million related to the prior year adjustments as described in Noteour 62025 -Annual PreviouslyReport Issuedon CondensedForm Consolidated Financial Statement.10-K.

Southwest Gas operates in a regulated environment across Arizona, Nevada, and California subject to the regulation of the ACC, the PUCN, and the CPUC, respectively, and through interstate pipeline operations at two of Southwest Gas’ subsidiaries that are subject to regulation by the FERC. Regulatory proceedings timely generally endeavor to allow for the timely recovery of infrastructure investments, reducing regulatory lag, and managing the cash‑flow impacts of natural gas price volatility. While mechanisms vary by jurisdiction, they are generally designed to stabilize earnings and primarily affect the timing of cash flows, rather than long‑term returns.

Arizona General Rate Case. On February 27, 2026, Southwest Gas filed a general rate case application seeking an increase of approximately $101.0 million, or 10.4%, of incremental annual revenues, to reflect infrastructure investments and operating costs through November 30, 2025, with a requested twelve- monthtwelve-month post-test year adjustment for non-revenue producing plant. The filing requests a return on common equity of 10.25% and a fair value increment of 0.20% based on an actual equity layer of 50.08% and maintains Arizona’s existing decoupled rate design and existing basic service charges.

The application also proposes a formula-based RAM, which is an annual adjustment intended to reduce regulatory lag by more closely aligning customer rates with authorized returns between rate cases. The proposed RAM contemplates an approved formula to adjust customer rates based on Southwest Gas’ earned return on common equity compared with its authorized return on common equity, subject to a Deadband, where rates would not be adjusted if the earned return on common equity falls outside the prescribed return on common equity deadband.Deadband. Approval of the RAM would replaceeliminate the need for certain existing regulatory tracker mechanisms, including the TEAM and the SIM. New rates from this filing are expected to become effective by April 2027, subject to regulatory approval.

Existing rates are the resultsresult of Southwest Gas’ 2024 Arizona rate case application filed in February 2024. The ACC’s final decision was approved and implemented in March 2025, authorizing 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.

•The SIM supports recovery of eligible non-revenue-producing infrastructure investments related to safety, code compliance, and system integrity. Recovery through the SIM is subject to an annual investment cap of $50 million, with surcharge updates occurring annually. The first SIM surcharge application was filed March 2026, with rates effective April 1, 2026, subject to refund. The ACC approved the SIM surcharge as filed by Southwest Gas in June 2026.

•The DCA is Arizona’s margin decoupling mechanism and removes the direct relationship between volumes sold and revenue earned. Annual DCA filings return or recover over- or under-collected authorized margins. In August 2025, the ACC approved the mostCompany’s recent2025 DCA application, as filed, to recover the under-collected balance as of March 31, 2025, of approximately $40.7 million, which is expected to be recovered over 12 months from the time rates become effective. TheSouthwest Company’sGas’ most recent filing of the DCA Annual Report was made in April 2026, requesting recovery of the under-collected balance of $107.5 million existing as of March 31, 2026,2026. overTo amitigate 15impact monthon period.customer Inbills, addition,Southwest Gas proposed to calculate the CompanyDCA hasrates requestedbased on an extended 15-month period, seasonally adjusted recovery rates,adjusted, with a higher rate applicable in the summer season of May through October and a lower rate applicable in the winter season of November through April. TheSouthwest Company’sGas’ request will be considered by the CommissionACC as soon as practicable.

•On January 27, 2025, Southwest Gas filed a requested modification to the PGA mechanism to increase the GCBA adjustment to allow for a greater credit rate to be implemented than otherwise allowed under existing framework to facilitate the more timely return of the existing over-collected balance. Typical adjustments authorized by previous decisions limit the increase in the GCBA ratebalance to $0.01 per month.customers. The ACC approved Southwest Gas’ request to implement a credit rate of $0.08138 per therm effective the first quarter 2025 and terminates when the GCBA balance is reduced to less than $10.0 million. Additionally, Southwest Gas filed a new request in April 2026 for CommissionACC consideration to increase the applicable Deadband within which theSouthwest CompanyGas may adjustedadjust the Gas Cost Balancing AccountGCBA rate from the currently authorized 10 cents per therm to a proposed 20 cents per therm with a requested effective date of August 2026.

•The TEAM allows for rate adjustments related to changes in income tax-related revenue requirements resulting from federal or state tax legislation and returns/recovers the revenue requirement impact of changes in amortization of EADIT, including that which resulted from the 2017 Tax Cuts and Jobs Act, between general rate cases. The currentprior surcharge rate was designed to recover approximately $5.2 million resulting from changes related to the amortization of EADIT was approved and became effective June 1, 2025. These amounts were recovered through May 31, 2026.

Arizona Affiliate Rules Waiver. In February 2026, Southwest Gas filed an application with the ACC seeking a waiver of certain affiliate rules to allow Southwest Gas Holdings and Southwest Gas Corporation to issue financing to Great Basin for the 2028 Expansionexpansion Project.project. On April 8, 2026, the ACC approved the limited waiver to allow for funding of up to $1.7 billion. Southwest Gas would be required to seek an additional waiver if the project costs are anticipated to exceed this amount.

Nevada Overview. InNevada Nevada,contributes approximately 34% to Southwest Gas’ nextOperating largestmargin. contributorIn to operating margin,Nevada, regulatory frameworks in the state include decoupled rate design and targeted mechanisms that support infrastructure investment while reducing earnings volatility.

Nevada General Rate Case. On March 18, 2026, Southwest Gas filed a general rate case application with the PUCN, seeking an increase of approximately $71.3 million, or 10.8% of incremental annual revenues to reflect infrastructure investments and operating costs through November 30, 20252025. andThe ainitial six-monthrequest certificationwas periodupdated endingto Mayseek 31,an 2026increase of approximately $74 million, to update plant in service and adjust for known changes in labor and pension costs.costs for the certification period ended May 31, 2026. The filing requests a 10.0% return on common equity and an actual equity layer of 50.05%51.35% at the end of the certification period and proposes to maintain Nevada’sthe existing decoupled rate design and basic service charges along with the continuation of the regulatory accounting treatment approved in 2025 to track the actual costs incurred for line location expenses to the level of expense to be established in the general rate case. New rates are expected to become effective in October 2026, subject to regulatory approval.

Existing rates are the resultsresult of Southwest Gas’ 2023 Nevada general rate case application filed in September 2023 and updated with a certification filing primarily for plant placed in service, and incremental annual leak survey costs, through November 2023. Rates became effective in April 2024, authorizing an overall annual settled rate increase of approximately $59.1 million and a return on common equity of 9.5% relative to a hypotheticaltarget 50.0% equity ratio. Included in the settled items were a continuation of full revenue decoupling; authority to continue tracking incremental annual leak survey costs in a regulatory asset; and refreshed depreciation rates.

•The GRA serves as Nevada’s margin decoupling mechanism and is updated through periodicthe filings.ARA Ratesapplication. Updated rates for the GRA and other regulatory mechanisms relatingwere toincluded in the most recently approved filing became effective July 1, 2025. Southwest Gas filed its 2025 ARA filingapplication filed in November 2025 requesting to adjust the GRA rates to recover the approximate $28.2 million balance as of September 30, 2025. In AprilMay 2026, athe PUCN approved an all-party settlement was filed recommending approval of the application as filed, with rates expected to be effective July 1, 2026.

•The DEAA currently facilitates the return of previously over-collected purchased gas costs to customers and would serveserves as the mechanism to collect under-collected purchased gas costs from customers if and when that situation was to occur.customers. The implementation of a DEAA credit of $0.20000 per therm applicable to southern Nevada customers and a credit of $0.25000 per therm applicable to northern Nevada customers became effective July 1, 2025. Subsequent quarterly adjustments, including those in October 2025, January 2026, and April 2026, and July 2026 have been calculated consistentconsistently with the statutory rate cap range of 2.5 cents per quarter, resulting in an increased credit rate of $0.27500$0.30000 in southern Nevada and $0.32500$0.35000 in northern Nevada, as of AprilJuly 1, 2026. The over-collected PGA balance that existed at December 31, 2025 has been reduced to an over-collected balance of approximately $169.1$166.6 million and $30.8$31.5 million in southern and northern Nevada, respectively, at MarchJune 31,30, 2026 from previous levels.2026. The most recent modification of the DEAA is expected to impact near-term liquidity at Southwest Gas when compared to earlier projections over 2025-2026 while modestly reducing interest expense on a net basis.

•Line Locate Activity Expenses Application. In January 2025, 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 recently concluded general rate case. In July 2025, the PUCN approved regulatory accounting treatment beginning January 1, 2025. The proposal did not include carrying charges on the regulatory account balance in order to focus solely on stemming from the financial attrition experienced in between rate cases related to this work. Amounts deferred in the regulatory assets are included for consideration in the recently filed general rate case, and continuation of the regulatory accounting treatment is requested.