Financial Data and Key Metrics Changes - The trailing twelve-month return on equity (ROE) increased to 8.3% from 8% in the previous two years [7] - Full year net income guidance is reaffirmed at $265 million to $275 million [9][40] - The utility reported record net income for 2025 with modest increases in operating and maintenance (O&M) expenses compared to the previous year [9] Business Line Data and Key Metrics Changes - The utility segment saw higher margins supported by rate relief and continued customer growth, with a $26.6 million increase in utility operating margin [28][30] - O&M expenses increased by $7 million, primarily due to higher labor and benefit costs [31] - Other income increased by $3.6 million, driven by gains from COLI policies and a one-time nonoperating gain [32] Market Data and Key Metrics Changes - Approximately 40,000 new meter sets were added over the last twelve months, indicating robust growth in the utility's service area [14][26] - The Great Basin expansion project received significant interest, with potential capacity requests estimated at 1.76 billion cubic feet per day [15][17] Company Strategy and Development Direction - The company aims to position itself as a premier pure play, fully regulated natural gas business, focusing on operational and financial performance improvements [6] - The regulatory strategy includes pursuing alternative ratemaking in Nevada, which is expected to reduce regulatory lag and support price stability [7][22] - The company plans to invest approximately $4.3 billion over the next five years to support safety, reliability, and economic development [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the regulatory strategy and the positive economic outlook in service areas, which supports growth [40] - The company is optimistic about the impacts of the new legislation in Nevada and the completion of the Arizona rate case [20][21] - Management highlighted the importance of maintaining a strong balance sheet to support capital investments and stockholder value [13][38] Other Important Information - The company successfully executed two secondary public offerings of Century shares, generating over $470 million in net proceeds used to repay debt [10][34] - The company no longer expects to issue new equity under its ATM program in 2025 [13][35] - The balance sheet remains strong, with over $350 million in cash and more than $1 billion in liquidity [14][38] Q&A Session Summary Question: Clarification on Great Basin expansion and return profile - Management confirmed that the increase in the project cost range is purely volume-driven from additional shipper requests for capacity [45][46] Question: Timeline for Nevada rate case and alternative rate making - Management indicated that the Nevada rate case and the new legislation could work complementarily, and they do not see an advantage in delaying the next rate case [50][51] Question: Duration and cadence of Arizona rate case - Management is evaluating the timing of the next Arizona rate case and the potential for formula rates, considering ongoing rate cases in the state [60][61] Question: Clarification on COLI gains and interest savings - Management confirmed that the COLI gains contributed positively to the corporate segment, and interest savings from debt repayment will continue to benefit the company [64][65] Question: Confidence in Great Basin project and CPCN filing - Management expressed confidence in proceeding with the CPCN filing once sufficient precedent agreements are signed, indicating strong project viability [68][70]

Core Insights - The company reported a trailing 12-month utility return on equity (ROE) of 8.3% as of June 30, 2025, reflecting improvements in regulatory progress and cost management [6][29] - The Arizona Corporation Commission approved a capital tracker program, and Nevada enacted Senate Bill 417, allowing for alternative ratemaking for natural gas utilities, which is expected to enhance price stability and consumer protection [2][6] - The company successfully reduced its debt by over $470 million through follow-on offerings of Centuri Holdings, strengthening its balance sheet and moving towards a pure-play regulated natural gas business [2][6] Financial Performance - For the second quarter ended June 30, 2025, the company reported a net loss of $12.9 million, a decline of $31.2 million compared to the same period in 2024, primarily due to tax impacts from the sale of Centuri stock [8][9] - Adjusted net income for the second quarter was $38.6 million, representing a 71% increase compared to the same quarter in 2024 [8][29] - Year-to-date net income for 2025 was $100.987 million, a decrease of $5.1 million compared to the previous year, while adjusted net income was $37 million higher than the same period in 2024 [9][29] Operational Highlights - The company added approximately 40,000 new meter sets over the 12 months ending June 30, 2025, resulting in a customer growth rate of 1.8% [6] - The Great Basin Gas Transmission Company's 2028 Expansion Project saw increased capacity demand, rising to about 1.76 billion cubic feet per day from 1.25 billion cubic feet previously announced [3][6] - The company had $356 million in cash and over $1 billion in available liquidity as of June 30, 2025 [6] Segment Performance - The natural gas distribution segment contributed $33.677 million to net income in Q2 2025, up from $27.594 million in Q2 2024, while utility infrastructure services contributed $5.771 million [4][6] - Corporate and administrative net loss increased to $52.331 million in Q2 2025, impacted by tax expenses related to the Centuri stock sale [15][16] - Centuri's net loss improved by $17 million year-to-date, driven by higher work volume under master services agreements [13][16] Future Outlook - The company reaffirmed its 2025 net income guidance of $265 million to $275 million and capital expenditures of approximately $880 million to support customer growth and system improvements [17][19] - The company anticipates a compound annual growth rate (CAGR) of 6.0% to 8.0% for adjusted net income from 2025 to 2029 [19]