Southwest Gas (SWX)

Risks

• Southwest relies on having access to interstate pipelines’ transportation capacity. If these pipelines and related transportation capacity were not available, it could impact Southwest’s ability to meet customers’ full requirements.
• Failure to attract and retain an appropriately qualified employee workforce could adversely affect our collective operations.
• Loss of one or more significant customers at Centuri or MountainWest could adversely affect results.
• Fixed-price contracts at Centuri are subject to potential losses that could adversely affect results of operations.
• The nature of our operations presents inherent risks of loss that could adversely affect our results of operations.
• Weather conditions in our operating areas can adversely affect operations, financial position, and cash flows.
• A cybersecurity incident has the potential to disrupt normal business operations, expose sensitive information, and/or lead to physical damages, and may result in legal claims or damage to our reputation.
• Reliance on third-party suppliers and subcontractors.
• Disruptions in labor relations with Centuri’s employees could adversely affect results of operations.
• Changing and uncertain work environment and conditions at Centuri.
• We have a substantial amount of indebtedness maturing in the near term, which may expose us to the risk of default, and could adversely affect our financial condition, restrict our operations and our ability to obtain additional capital to fund our operations and limit our ability to react to changes in the economy or our industry.
• We may be unable to successfully integrate business acquisitions into our business and realize the anticipated benefits of the acquisitions.
• As a holding company, Southwest Gas Holdings, Inc. depends on operating subsidiaries to meet financial obligations.
• Utility infrastructure segment clients’ budgetary constraints, regulatory support or decisions, and financial condition could adversely impact work awarded.
• Southwest’s and MountainWest’s liquidity, and in certain circumstances our earnings, may be reduced from historical amounts or expectations during periods in which natural gas prices are rising significantly or are more volatile.
• Southwest’s earnings may be materially impacted due to volatility in the cash surrender value of our company-owned life insurance policies during periods in which stock market changes are significant.
• The cost of providing pension and postretirement benefits is subject to changes in pension asset values, changing demographics, and actuarial assumptions which may have an adverse effect on our financial results.
• Uncertain economic conditions may affect Southwest’s ability to finance capital expenditures.
• Our business could be negatively affected as a result of actions of activist shareholders.
• COVID-19 and the impacts to our business, results of operations, cash flows, and financial condition remains uncertain.
• The Company is currently subject to, and may in the future be subject to, litigation or threatened litigation, which may result in liability exposure that could have a material adverse effect on its business and results of operations.
• Governmental policies and regulatory actions can reduce Southwest’s and/or MountainWest’s earnings or cash flows.
• Southwest may not be able to rely on rate decoupling to maintain stable financial position, results of operations, and cash flows.
• Southwest and MountainWest may be subject to increased costs related to the operation of natural gas pipelines under recent regulations concerning natural gas pipeline safety, which could have an adverse effect on our results of operations, financial condition, and/or cash flows.
• Our delivery and related systems require numerous permits and other approvals from various federal, state, and local governmental agencies, and others to operate its business, including for pipeline expansion or infrastructure development; any failure to obtain or maintain required permits or approvals, or other factors that could prevent or delay planned development, could negatively affect our business and results of operations.
• We may not be able to complete a separation of Centuri from Southwest Gas Holdings on the expected timeline or at all.
• The Company may pursue acquisitions and other strategic transactions, the success of which may impact our results of operations, cash flows, and financial condition.
• The Company’s operating results may be adversely impacted by an economic downturn.
• A significant reduction in Southwest Gas Holdings, Inc. and Southwest’s credit ratings could materially and adversely affect our business, financial condition, and results of operations.