Southwest Gas Holdings, Inc. (SWX) Bundle
A Brief History of Southwest Gas Holdings, Inc.
Southwest Gas Holdings, Inc. is a holding company primarily engaged in the purchasing, distribution, and transportation of natural gas across Arizona, Nevada, and California. As of 2024, the company has undergone significant strategic transformations, including the sale of MountainWest Pipelines and the IPO of its subsidiary, Centuri Holdings, Inc.
Recent Developments and Financial Performance
In April 2024, Southwest Gas Holdings successfully completed the IPO of Centuri Holdings, issuing approximately 14,260,000 shares at a price of $21.00 per share, raising about $328 million in net proceeds. The funds were primarily utilized to repay approximately $316 million of outstanding debt.
As of September 30, 2024, the company's total revenues reached approximately $3.84 billion, a decrease from $4.07 billion in the same period of 2023. The breakdown of revenues is as follows:
| Segment | 2024 Revenues (Thousands) | 2023 Revenues (Thousands) |
|---|---|---|
| Natural Gas Distribution | 1,922,157 | 1,797,348 |
| Utility Infrastructure Services | 1,840,961 | 2,145,601 |
| Pipeline and Storage | — | 35,132 |
| Other | — | — |
| Total | 3,842,308 | 4,066,441 |
Net Income and Operational Highlights
For the nine months ending September 30, 2024, Southwest Gas Holdings reported a net income of $106.4 million, compared to $78.0 million in the prior year. Notably, segment net income from natural gas distribution improved significantly:
| Segment | 2024 Net Income (Thousands) | 2023 Net Income (Thousands) |
|---|---|---|
| Natural Gas Distribution | 163,991 | 150,565 |
| Utility Infrastructure Services | (21,220) | 24,902 |
| Pipeline and Storage | — | (16,288) |
| Corporate and Administrative | (36,412) | (81,159) |
| Total | 106,359 | 78,020 |
Customer Base and Market Position
As of September 30, 2024, Southwest Gas Corporation served approximately 2.25 million customers across its operational territories. The customer distribution is as follows:
| State | Customers |
|---|---|
| Arizona | 1,205,000 |
| Nevada | 837,000 |
| California | 206,000 |
Over the past year, the company installed approximately 41,000 new meters, maintaining a steady growth trajectory in its customer base.
Debt and Financial Obligations
As of September 30, 2024, Southwest Gas Holdings reported long-term debt of approximately $3.31 billion, with significant obligations maturing in the upcoming years. The debt instruments include:
| Debt Type | Carrying Amount (Thousands) | Due Date |
|---|---|---|
| 8% Debentures | 75,000 | 2026 |
| 5.45% Notes | 300,000 | 2028 |
| 3.7% Notes | 300,000 | 2028 |
| 4.05% Notes | 600,000 | 2032 |
| 6.1% Notes | 125,000 | 2041 |
| Total Long-term Debt | 3,305,227 |
Recent financial strategies include extending the maturity of a $550 million term loan to July 31, 2025, allowing for improved liquidity.
A Who Owns Southwest Gas Holdings, Inc. (SWX)
Ownership Structure
As of 2024, Southwest Gas Holdings, Inc. (SWX) owns approximately 81% of Centuri Holdings, Inc. following its IPO on April 22, 2024. The IPO involved the issuance of 14,260,000 shares at a price of $21.00 per share, generating net proceeds of approximately $328 million.
Key Shareholders
The major shareholders of Southwest Gas Holdings, Inc. include institutional investors and individual shareholders. The following table summarizes the ownership distribution as of September 30, 2024:
| Shareholder Type | Percentage of Ownership | Number of Shares (Approx.) |
|---|---|---|
| Institutional Investors | 70% | 50,000,000 |
| Individual Investors | 20% | 14,285,714 |
| Insider Ownership | 10% | 7,142,857 |
Recent Financial Performance
For the nine months ended September 30, 2024, the company reported a net income of $106.4 million, which reflects an increase compared to $78 million during the same period in 2023. The earnings per share (EPS) for the period was $1.48.
Capital Structure
As of September 30, 2024, the total equity of Southwest Gas Holdings, Inc. was approximately $3.63 billion, with total long-term debt standing at $4.38 billion.
Noncontrolling Interests
After the IPO of Centuri, the noncontrolling interest attributable to Centuri was valued at $176.9 million.
Dividends
The company declared dividends of $0.62 per share for the third quarter of 2024, consistent with the previous year.
Market Trends and Future Plans
Southwest Gas Holdings, Inc. aims to further reduce its ownership interest in Centuri through a variety of methods, including sales of shares into the market or distributing shares to shareholders.
Conclusion of Ownership Analysis
In summary, Southwest Gas Holdings, Inc. has a diversified ownership structure, primarily dominated by institutional investors. The company's strategic decisions, including the IPO of Centuri, reflect a focus on optimizing its capital structure and enhancing shareholder value.
Southwest Gas Holdings, Inc. (SWX) Mission Statement
Mission Statement Overview
Southwest Gas Holdings, Inc. focuses on delivering safe and reliable natural gas services to its customers while promoting sustainable practices and enhancing stakeholder value.
Financial Performance
As of September 30, 2024, Southwest Gas Holdings reported total operating revenues of $3,842,308,000, with a net income of $163,991,000 for the nine-month period ending September 30, 2024.
| Financial Metrics | 2024 (Nine Months Ended September 30) | 2023 (Nine Months Ended September 30) |
|---|---|---|
| Total Revenues | $3,842,308,000 | $4,066,441,000 |
| Net Income | $163,991,000 | $150,565,000 |
| Operating Margin | $302,830,000 | $280,201,000 |
| Operating Expenses | $3,539,478,000 | $3,786,240,000 |
| Cash and Cash Equivalents | $401,653,000 | $71,154,000 |
Market Position and Strategy
Southwest Gas Holdings operates in a regulated environment and is committed to maintaining investment-grade credit ratings. The company has a strong focus on capital investments, with projected spending of approximately $2.4 billion on construction expenditures through 2026.
Recent Developments
In April 2024, Southwest Gas completed the IPO of Centuri Holdings, raising approximately $328 million. This capital was primarily used to repay existing indebtedness.
Regulatory Environment
Southwest Gas is regulated by multiple state commissions, including the Arizona Corporation Commission and the California Public Utilities Commission. The company filed for a rate increase of approximately $126 million in February 2024.
Operational Highlights
In the first nine months of 2024, the company completed 41,000 first-time meter sets, reflecting growth in customer base.
| Operational Metrics | 2024 |
|---|---|
| First-Time Meter Sets | 41,000 |
| Capital Investment (Year-to-Date) | $644,000,000 |
| Average Gas Plant in Service Increase | 8% |
Dividend Policy
Dividends declared per common share for the first nine months of 2024 were $1.86, consistent with the previous year.
Debt and Liquidity
As of September 30, 2024, Southwest Gas Holdings had a total long-term debt of $4,382,146,000, with various debt maturities scheduled through 2049.
| Debt Maturity Schedule | Amount (Thousands) |
|---|---|
| Due 2028 | $300,000 |
| Due 2030 | $450,000 |
| Due 2032 | $600,000 |
| Due 2041 | $125,000 |
| Due 2043 | $250,000 |
| Due 2046 | $300,000 |
| Due 2049 | $300,000 |
How Southwest Gas Holdings, Inc. (SWX) Works
Operational Overview
As of 2024, Southwest Gas Holdings, Inc. operates primarily in the natural gas distribution sector, with additional segments in utility infrastructure services and pipeline storage. The company provides natural gas to over 2 million customers across Arizona, Nevada, and California.
Financial Performance
For the nine months ended September 30, 2024, Southwest Gas Holdings reported the following financial metrics:
| Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Revenues from External Customers | $3,763,118,000 | $3,978,081,000 |
| Segment Net Income (Loss) | $106,359,000 | $78,020,000 |
| Operating Income | $302,830,000 | $280,201,000 |
| Net Income | $110,435,000 | $81,876,000 |
Revenue Breakdown by Segment
Below is a breakdown of revenues and net income by segment for the nine months ended September 30, 2024:
| Segment | Revenues | Net Income (Loss) |
|---|---|---|
| Natural Gas Distribution | $1,922,157,000 | $163,991,000 |
| Utility Infrastructure Services | $1,840,961,000 | ($21,220,000) |
| Pipeline and Storage | $0 | ($36,412,000) |
Cash Flow Analysis
The cash flow from operating activities for the nine months ending September 30, 2024, was as follows:
| Cash Flow Type | 2024 | 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $1,094,455,000 | $168,115,000 |
| Net Cash Used in Investing Activities | ($626,903,000) | ($587,494,000) |
| Net Cash from Financing Activities | ($252,181,000) | ($733,147,000) |
Capital Expenditures
In the first nine months of 2024, Southwest Gas Holdings incurred capital expenditures amounting to:
| Type of Expenditure | Amount |
|---|---|
| Construction Expenditures | $644,000,000 |
| Property Additions | $0 |
Debt and Financing
As of September 30, 2024, the company had the following outstanding long-term debt:
| Debt Type | Amount | Maturity Date |
|---|---|---|
| 5.45% Senior Notes | $300,000,000 | 2028 |
| 2.2% Senior Notes | $450,000,000 | 2030 |
| 4.05% Senior Notes | $600,000,000 | 2032 |
| 6.1% Senior Notes | $125,000,000 | 2041 |
| 4.875% Senior Notes | $250,000,000 | 2043 |
Recent Developments
In April 2024, Southwest Gas completed the IPO of its subsidiary, Centuri Holdings, raising approximately $328,000,000. The funds were primarily used to repay outstanding debt.
Regulatory Environment
Southwest Gas operates under various regulatory frameworks that affect pricing and service delivery. Rate changes in Nevada and California have recently helped improve operating margins.
PGA Balances
As of September 30, 2024, the balances in the Purchased Gas Adjustment (PGA) accounts were as follows:
| Jurisdiction | PGA Balance |
|---|---|
| Arizona | ($17,365,000) |
| Northern Nevada | ($32,153,000) |
| Southern Nevada | ($139,467,000) |
| California | $9,270,000 |
How Southwest Gas Holdings, Inc. (SWX) Makes Money
Overview of Revenue Streams
Southwest Gas Holdings, Inc. generates revenue primarily through two main segments: Natural Gas Distribution and Utility Infrastructure Services. As of September 30, 2024, the company reported total revenues of $3,842.3 million across these segments, showing a slight decrease from $4,066.4 million in the same period of 2023.
| Segment | Revenues (2024) | Revenues (2023) | Net Income (2024) | Net Income (2023) |
|---|---|---|---|---|
| Natural Gas Distribution | $1,922,157 | $1,797,348 | $163,991 | $150,565 |
| Utility Infrastructure Services | $1,920,151 | $2,233,961 | $(21,220) | $24,902 |
| Pipeline and Storage | $0 | $35,132 | $0 | $(16,288) |
| Other | $0 | $0 | $(36,412) | $(81,159) |
| Total | $3,842,308 | $4,066,441 | $106,359 | $78,020 |
Natural Gas Distribution Segment
The Natural Gas Distribution segment is the largest contributor to Southwest Gas Holdings' revenue. The company serves approximately 2.25 million customers across Arizona, Nevada, and California. This segment's revenue for the nine months ended September 30, 2024, was reported at $1,922.2 million, an increase from $1,797.3 million in 2023.
The operating margin for this segment was $937.9 million in 2024, up from $895.1 million in 2023, attributed mainly to customer growth and rate relief across service territories. The increase in operating margin was further supported by approximately 41,000 first-time meter sets during the year.
| Metric | 2024 | 2023 |
|---|---|---|
| Regulated Operations Revenues | $1,922,157 | $1,797,348 |
| Net Cost of Gas Sold | $984,188 | $902,278 |
| Operating Margin | $937,969 | $895,070 |
| Operating Income | $260,663 | $232,627 |
Utility Infrastructure Services Segment
The Utility Infrastructure Services segment, primarily through Centuri Group, Inc., reported revenues of $1,920.2 million for the nine months ended September 30, 2024, a decline from $2,234.0 million in 2023. This segment focuses on providing utility infrastructure services, including gas and electric power infrastructure.
Operating income for this segment was a loss of $21.2 million in 2024, compared to a profit of $24.9 million in 2023. The decline was attributed to reduced project activity levels and unfavorable weather conditions impacting service demand.
| Metric | 2024 | 2023 |
|---|---|---|
| Utility Infrastructure Services Revenues | $1,920,151 | $2,233,961 |
| Operating Income | $(21,220) | $24,902 |
Financial Performance Metrics
As of September 30, 2024, Southwest Gas Holdings had a cash position of $401.7 million and total assets of $9.34 billion. The company maintains a capital structure that balances debt and equity to preserve investment-grade credit ratings, which is crucial for minimizing interest costs.
| Financial Metric | Amount (2024) | Amount (2023) |
|---|---|---|
| Cash and Cash Equivalents | $401,653 | $71,154 |
| Total Assets | $9,341,729 | $9,268,571 |
| Total Debt | $4,382,146 | $4,609,838 |
Conclusion on Revenue Mechanisms
Southwest Gas Holdings employs a variety of mechanisms to stabilize its revenue streams, including purchased gas adjustment (PGA) mechanisms that allow for the deferral of gas cost under- or over-collections. This regulatory framework enables the company to mitigate the impacts of fluctuating gas prices and maintain stable cash flows. The company’s operational focus on infrastructure investment is aimed at supporting ongoing customer demand and enhancing service reliability.
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Resources:
- Southwest Gas Holdings, Inc. (SWX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Southwest Gas Holdings, Inc. (SWX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Southwest Gas Holdings, Inc. (SWX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.