Centuri Holdings, Inc.

Previous wording

Unless the context otherwise requires, references to “we,” “is,” “our,” and “our company” refer to Centuri Holdings, Inc. and its consolidated subsidiaries. This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed within Item 1A. Risk Factors in our 2024 Annual Report. See “Cautionary Note Regarding Forward-Looking Statements.”

Current wording

Unless the context otherwise requires, references to “we,” “is,” “our,” “the Company,” and “our company” refer to Centuri Holdings, Inc. and its consolidated subsidiaries. This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed within Item 1A. Risk Factors in our 2024 Annual Report. See “Cautionary Note Regarding Forward-Looking Statements.”

Previous wording

We use a 52/53-week fiscal year that ends on the Sunday closest to the end of the calendar year. Unless otherwise stated, references to months and quarters throughout relate to fiscal months and quarters rather than calendar months and quarters. The first fiscal six months of 2025 and 2024 ended on June 29, 2025 and June 30, 2024, respectively, and each period had 26 weeks. The second fiscal quarters of 2025 and 2024 each had 13 weeks.

Current wording

We use a 52/53-week fiscal year that ends on the Sunday closest to the end of the calendar year. Unless otherwise stated, references to months and quarters throughout relate to fiscal months and quarters rather than calendar months and quarters. The first fiscal nine months of 2025 and 2024 ended on September 28, 2025 and September 29, 2024, respectively, and each period had 39 weeks. The third fiscal quarters of 2025 and 2024 each had 13 weeks.

Previous wording

On April 17, 2024, the registration statement related to the initial public offering of our common stock (“IPO Registration Statement”) was declared effective, and our common stock began trading on the New York Stock Exchange (“NYSE”) under the ticker “CTRI” (the “Centuri IPO”) on April 18, 2024. On April 22, 2024, the Centuri IPO and a concurrent private placement were completed with final net proceeds of $327.7 million. As of the closing of the Centuri IPO, Southwest Gas Holdings owned 71,665,592 shares of our common stock, or approximately 81% of the total outstanding shares of our common stock.

Current wording

On April 17, 2024, the registration statement related to the initial public offering of Centuri’s common stock was declared effective, and Centuri’s common stock began trading on the New York Stock Exchange (“NYSE”) under the ticker “CTRI” (the “Centuri IPO”) on April 18, 2024. On April 22, 2024, the Centuri IPO and a concurrent private placement were completed with total final net proceeds of $327.7 million. As of the closing of the Centuri IPO, Southwest Gas Holdings owned 71,665,592 shares of Centuri common stock (“CTRI shares”), or approximately 81% of total outstanding CTRI shares.

Previous wording

As Southwest Gas Holdings now owns less than 80% of our outstanding common stock, we are no longer eligible for inclusion in their U.S. federal and certain state income tax returns. As a result, certain deferred tax assets previously recorded under the separate return method were removed from our condensed consolidated balance sheet through an adjustment to additional paid in capital. Separately, in accordance with the Company’s Tax Assets Agreement with Southwest Gas Holdings (as defined and discussed in “Note 13 — Related Parties” to the condensed consolidated financial statements), we were allocated $30.2 million in estimated deferred tax assets (primarily net operating losses) as part of tax deconsolidation, which is treated as a capital contribution from Southwest Gas Holdings in additional paid in capital. Our allocation of deferred tax assets from Southwest Gas Holdings is based on estimates of amounts to be included in Southwest Gas Holdings’ tax returns for 2024 and 2025, and accordingly the allocation may change in future periods until the tax returns are ultimately filed.

Current wording

As Southwest Gas Holdings has now divested all of its ownership of CTRI shares, we are no longer eligible for inclusion in their U.S. federal and state income tax returns. As a result, certain deferred tax assets previously recorded under the separate return method were removed from our condensed consolidated balance sheet through an adjustment to additional paid-in capital. Separately, in accordance with the Company’s Tax Assets Agreement with Southwest Gas Holdings (as defined and discussed in “Note 13 — Related Parties” to the condensed consolidated financial statements), we were allocated $55.4 million in estimated deferred tax assets (primarily net operating losses) as part of tax deconsolidation, which is treated as a capital contribution from Southwest Gas Holdings in additional paid-in capital. Our allocation of deferred tax assets from Southwest Gas Holdings is based on estimates of amounts to be included in Southwest Gas Holdings’ tax returns for 2024 and 2025, and accordingly the allocation may change in future periods until the 2025 tax return is ultimately filed, with any future changes impacting income tax expense on the statement of operations as we are no longer owned by Southwest Gas Holdings.

Previous wording

Our financial results may be impacted by economic conditions that impact businesses generally, such as inflationary impacts on goods and services consumed in the business, regulatory or environmental influences, rising interest rates, labor markets and costs (including in regard to contracted or professional services), and the availability of those resources. Accordingly, our operating results in any particular period may not be indicative of the results that can be expected for any other period.

Current wording

Our financial results may be impacted by economic conditions that impact businesses generally, such as inflationary impacts on goods and services consumed in the business, regulatory or environmental influences, seasonality and severe weather events, rising interest rates, labor markets and costs (including in regard to contracted or professional services), and the availability of those resources. Accordingly, our operating results in any particular period may not be indicative of the results that can be expected for any other period.

Previous wording

The seasonal nature of the industry we serve affects demand for our services. In addition to weather conditions, capital expenditure and maintenance budgets of our customers, as well as the related timing of approvals and seasonal spending patterns, influence our contract revenue and results of operations. Factors affecting our customers and their capital expenditure budgets include, but are not limited to, overall economic conditions, the introduction of new technologies, and our customers’ capital resources, financial performance, and strategic plans. Other factors that may impact our customers and their capital expenditure budgets include new regulations or regulatory actions, merger or acquisition activity involving our customers and the physical maintenance needs of our customers’ infrastructure.

Current wording

The seasonal nature of the industry we serve affects demand for our services. In addition to weather conditions, capital expenditure and maintenance budgets of our customers, as well as the related timing of approvals and seasonal spending patterns, influence our contract revenue and results of operations. Factors affecting our customers and their capital expenditure budgets include, but are not limited to, overall economic conditions, the introduction of new technologies, and our customers’ capital resources, financial performance, and strategic plans. Other factors that may impact our customers and their capital expenditure budgets include new regulations or regulatory actions, merger or acquisition activity involving our customers and the physical maintenance needs of our customers’ infrastructure. We are currently monitoring the U.S. government shutdown that began on October 1, 2025. At this time, the shutdown has not had a material impact on our business, operations, or demand for our services, and we do not currently anticipate a material impact.

Previous wording

Generally, our revenue is lowest during the first quarter of the year due to less favorable winter weather and related working conditions in many of the areas where we perform work. Revenue typically improves as more favorable weather conditions occur during the summer and fall months. In cases of severe weather, such as following a regional storm, we may be engaged to perform restoration activities related to above-ground utility infrastructure, which typically results in higher margins due to higher equipment utilization and the absorption of fixed costs. Alternatively, these severe weather events can also delay projects, negatively impacting our results of operations. Severe weather events and the related impacts on our performance and results are not solely within the control of management and cannot always be predicted or mitigated.

Current wording

Generally, our revenue is lowest during the first fiscal quarter of the year due to less favorable winter weather and related working conditions in many of the areas where we perform work. Revenue typically improves as more favorable weather conditions occur during the summer and fall months. In cases of severe weather, such as following a regional storm, we may be engaged to perform restoration activities related to above-ground utility infrastructure, which typically results in higher margins due to higher equipment utilization and the absorption of fixed costs. Alternatively, these severe weather events can also delay projects, negatively impacting our results of operations. Severe weather events and the related impacts on our performance and results are not solely within the control of management and cannot always be predicted or mitigated.

Previous wording

Under the terms of a majority of our MSAs, materials used in our utility infrastructure service activities are specified, purchased and supplied by customers. However, our operations are affected by increases in prices, whether caused by inflation, tariffs, rising interest rates or other economic factors. We attempt to recover anticipated increases in the cost of labor, equipment, fuel and materials not purchased by customers through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. Our actual costs at times can exceed the contractual caps, and therefore negatively impact our operations. Additionally, rising interest rates on our variable-rate debt could have a negative effect on our business, financial condition and results of operations. Overall, our results for the second quarter of 2025 were not significantly impacted by increases in prices, including due to recently implemented tariffs. We are currently monitoring the impacts of tariffs on the price and availability of our equipment as well as any potential impacts to project scheduling, but we do not currently expect a material effect on our results of operations.

Current wording

Under the terms of a majority of our master service agreements (“MSAs”), materials used in our utility infrastructure service activities are specified, purchased and supplied by customers. However, our operations are affected by increases in prices, whether caused by inflation, tariffs, rising interest rates or other economic factors. We attempt to recover anticipated increases in the cost of labor, equipment, fuel and materials not purchased by customers through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. Our actual costs at times can exceed the contractual caps, and therefore negatively impact our operations. Additionally, rising interest rates on our variable-rate debt could have a negative effect on our business, financial condition and results of operations. Overall, our results for the third fiscal quarter of 2025 were not significantly impacted by increases in prices, including due to recently implemented tariffs. We are currently monitoring the impacts of tariffs on the price and availability of our equipment as well as any potential impacts to project scheduling, but we do not currently expect a material effect on our results of operations.

Previous wording

Backlog as of June 29, 2025 was approximately $5.3 billion, with approximately 92% of backlog related to MSAs. Backlog represents contracted revenue on existing bid agreements as well as estimates of revenue to be realized over the contractual life of existing long-term MSAs. The contractual life of an MSA is defined as the stated length of the contract including any renewal options stated in the contract that we believe our customers are reasonably certain to execute.

Current wording

Backlog as of September 28, 2025 was approximately $5.9 billion, with approximately 86% of backlog related to MSAs. Backlog represents contracted revenue on existing bid agreements as well as estimates of revenue to be realized over the contractual life of existing long-term MSAs. The contractual life of an MSA is defined as the stated length of the contract including any renewal options stated in the contract that we believe our customers are reasonably certain to execute.

Previous wording

Our results of operations, on a consolidated basis and by segment, for the fiscal three and six month periods ended June 29, 2025 and June 30, 2024 are set forth and compared below.

Current wording

Our results of operations, on a consolidated basis and by segment, for the fiscal three- and nine-month periods ended September 28, 2025 and September 29, 2024 are set forth and compared below.

Previous wording

•Revenue from our Canadian Gas segment totaled $55.1 million, reflecting an increase of $8.4 million, or 18.1%, compared to the prior year period, resulting from higher MSA volumes. As a percentage of revenue, gross profit increased to 17.2% in the current period as compared to 15.1% in the same period from the prior year. This increase was primarily attributable to improvements on bid margins, as the prior year period was negatively impacted by performance issues on certain bid projects which did not recur in the current year period.

Current wording

•Revenue from our Canadian Gas segment totaled $74.2 million, reflecting an increase of $20.7 million, or 38.7%, compared to the prior year period, resulting from higher MSA volumes. As a percentage of revenue, gross profit increased to 21.9% in the current period as compared to 20.5% in the same period from the prior year. This increase was attributable to improvements on bid margins, as the prior year period was negatively impacted by performance issues on certain bid projects which did not recur in the current year period.

Previous wording

•Revenue from our Union Electric segment totaled $182.2 million, reflecting an increase of $18.0 million, or 11.0%, compared to the prior year period. This increase was driven by new bid project wins, which was partially offset by a planned decline in offshore wind revenue of $12.8 million due to timing of projects. Emergency restoration services revenue for the Union Electric segment was $3.5 million for the current period compared to $6.1 million for the prior year period. As a percentage of revenue, gross profit increased to 8.4% in the current period as compared to 7.4% in the prior year period due to improved profitability on certain MSA contracts.

Current wording

•Revenue from our Union Electric segment totaled $214.5 million, reflecting an increase of $42.8 million, or 25.0%, compared to the prior year period. This increase was driven by new bid project wins. Storm restoration services revenue for the Union Electric segment was $1.5 million for the current period compared to $6.7 million for the prior year period. As a percentage of revenue, gross profit increased to 9.1% in the current period as compared to 9.0% in the prior year period. Gross margin was positively impacted bymore efficient utilization of fixed costs on higher revenue, slightly offset by the$5.2 million decrease in storm restoration services revenue which resulted in$1.6 million less gross profit.

Previous wording

•Revenue from our Non-Union Electric segment totaled $149.9 million, reflecting an increase of $29.4 million, or 24.4%, compared to the prior year period. This increase was primarily due to an increase in volumes on existing MSAs and partially offset by a decrease in emergency restoration services revenue ($13.5 million in the current year period compared to $30.2 million in the prior year period). As a percentage of revenue, gross profit decreased to 11.0% in the current period compared to 13.5% in the prior year period. Profitability was negatively affected due to a decrease in emergency restoration services.

Current wording

•Revenue from our Non-Union Electric segment totaled $149.0 million, reflecting an increase of $20.1 million, or 15.6%, compared to the prior year period. This increase was primarily due to an increase in volumes on new and existing MSAs, partially offset by a decrease in storm restoration services revenue, as the current fiscal quarter had no storm restoration services revenue compared to unusually high storm restoration services revenue of $34.7 million in the prior year period. As a percentage of revenue, gross profit decreased to 7.1% in the current period compared to 16.6% in the prior year period. Profitability was negatively affected primarily due to the lack of storm restoration services work, as the $34.7 million in revenue on such work in the prior year period resulted in $13.3 million gross profit that did not recur in the current year. The onboarding of a new MSA also weighed on margins, as crews had not yet reached full utilization. Margins on this MSA are expected to improve as crews reach full utilization.

Previous wording

Selling, general and administrative costs increased by $8.3 million, or 39.9%, in the current period compared to the same period in the prior year. The current period included $2.9 million in separation-related costs and other non-recurring professional fees, with no such costs in the prior year period. Incentive compensation also contributed to the increase as general and administrative stock compensation was $1.8 million higher compared to the prior year period due to the timing of new grants, and the prior year period included reversals of portions of incentive compensation due to the timing of terminations. The Company also incurred incremental costs to operate as a standalone public company in the current period.

Current wording

Selling, general and administrative costs increased by $7.7 million, or 28.5%, in the current period compared to the same period in the prior year. This increase was largely driven by an increase in stock-based compensation and accruals for cash-based incentive compensation. We incurred $2.3 million in separation-related costs in the current period, compared to $1.4 million in non-recurring fees for our accounts receivable securitization facility (the “Securitization Facility”) in the prior period. In the current period, we also incurred incremental costs to operate as a standalone public company and to grow our sales and business development function.

Previous wording

The decrease of $4.4 million in interest expense, net in the current period compared to the prior year period was due to a reduction in average debt balance and a reduction in interest rates on outstanding variable-rate borrowings.

Current wording

The increase of $2.3 million in interest expense, net in the current period compared to the prior year period was due to $8.3 million in costs related to the refinance of our credit facility. For additional detail about the refinance, see “Credit Facilities” below and “Note 9 — Long-Term Debt” to the condensed consolidated financial statements. These charges were partially offset by the write-off of $1.7 million in debt issuance costs in the third fiscal quarter of 2024 related to a debt extinguishment, and a reduction in interest rates on outstanding variable-rate borrowings.

Previous wording

The Company’s effective tax rate for the fiscal three months ended June 29, 2025 and June 30, 2024 was 43.4% and (4.2)%, respectively. The tax rates for both periods were impacted by the disproportionate amount of non-deductible expenses in relation to income before income taxes. Additionally, differences in pre-tax income/loss by jurisdiction caused fluctuations in the effective tax rate when comparing periods.

Current wording

Our effective tax rate for the fiscal three months ended September 28, 2025 and September 29, 2024 was 78.9% and 119.9%, respectively. The effective tax rate for the current year period was impacted by the disproportionate amount of non-deductible expenses in relation to income before income taxes and changes in estimates of pre-tax income. The effective tax rate for the prior year period was impacted by the use of the actual effective tax rate instead of the annual effective tax rate, which is discussed in more detail in “Note 11 — Income Taxes” to the condensed consolidated financial statements. Additionally, differences in income (loss) before income taxes by jurisdiction caused fluctuations in the effective tax rate when comparing periods.

Previous wording

The following table summarizes our consolidated results of operations for the fiscal six month periods ended June 29, 2025, and June 30, 2024, including as a percentage of revenue, as well as the dollar and percentage change between fiscal years.

Current wording

The following table summarizes our consolidated results of operations for the fiscal nine-month periods ended September 28, 2025, and September 29, 2024, including as a percentage of revenue, as well as the dollar and percentage change between fiscal years.

Previous wording

•Revenue from our U.S. Gas segment totaled $534.5 million in the fiscal six months ended June 29, 2025, reflecting a decrease of $32.7 million, or 5.8%, compared to the prior year period. This decrease was primarily driven by lower net MSA volumes in the first fiscal quarter of 2025 caused in large part by adverse winter weather conditions and certain customer budgetary constraints, as well as reduced bid revenue associated with timing of projects as certain bid projects were completed prior to the second fiscal quarter of 2025 and new projects in the second fiscal quarter of 2025 were in the early stages of ramping up. These decreases were partially offset by higher MSA volumes in the second fiscal quarter of 2025. As a percentage of revenue, gross profit decreased to 2.2% in the fiscal six months ended June 29, 2025 from 3.7% in the prior year period, primarily driven by inefficiencies due to weather-related work stoppages and delays in the first fiscal quarter of 2025. Revenue from Southwest Gas Corporation totaled $47.2 million during the fiscal six months ended June 29, 2025 compared to $52.0 million in the prior year period.

Current wording

•Revenue from our U.S. Gas segment totaled $946.9 million in the fiscal nine months ended September 28, 2025, reflecting an increase of $13.6 million, or 1.5%, compared to the prior year period. This increase was driven by increased net MSA volumes, with strong performance in the second and third fiscal quarter of 2025 compensating for reduced volumes in the first fiscal quarter of 2025, which was negatively impacted by severe winter weather conditions. The increase in MSA revenue was partially offset by slightly lower bid revenue year-over-year. As a percentage of revenue, gross profit decreased to 4.6% in the fiscal nine months ended September 28, 2025 from 5.3% in the prior year period, primarily driven by inefficiencies due to weather-related work stoppages and delays in the first fiscal quarter of 2025. Revenue from Southwest Gas Corporation totaled $72.0 million during the fiscal nine months ended September 28, 2025 compared to $79.2 million in the prior year period.

Previous wording

•Revenue from our Canadian Gas segment totaled $94.9 million in the fiscal six months ended June 29, 2025, reflecting an increase of $7.3 million, or 8.3%, compared to the prior year period. This increase was primarily due to an increase in net volumes under existing MSAs. As a percentage of revenue, gross profit increased to 17.5% in the fiscal six months ended June 29, 2025 as compared to 11.5% in the prior year period. This increase was primarily attributable to improvements on bid margins, as the prior year period was negatively impacted by performance issues on certain bid projects which did not recur in the current year period.

Current wording

•Revenue from our Canadian Gas segment totaled $169.0 million in the fiscal nine months ended September 28, 2025, reflecting an increase of $27.9 million, or 19.8%, compared to the prior year period. This increase was primarily due to an increase in net volumes under existing MSAs. As a percentage of revenue, gross profit increased to 19.4% in the fiscal nine months ended September 28, 2025 as compared to 14.9% in the prior year period. This increase was primarily attributable to improvements on bid margins, as the prior year period was negatively impacted by performance issues on certain bid projects which did not recur in the current year period.

Previous wording

•Revenue from our Union Electric segment totaled $357.7 million in the fiscal six months ended June 29, 2025, reflecting an increase of $29.6 million, or 9.0%, compared to the prior year period. This increase was driven by new bid project wins, partially offset by a planned decline in offshore wind revenue of $35.1 million due to timing of projects. Emergency restoration services revenue for the Union Electric segment was $5.1 million for the fiscal six months ended June 29, 2025 compared to $13.6 million for the prior year period. As a percentage of revenue, gross profit increased to 7.6% in the fiscal six months ended June 29, 2025 as compared to 7.1% in the prior year period due to improved profitability on certain MSA contracts.

Current wording

•Revenue from our Union Electric segment totaled $572.2 million in the fiscal nine months ended September 28, 2025, reflecting an increase of $72.5 million, or 14.5%, compared to the prior year period. This increase was driven by new bid project wins, partially offset by a planned decline in offshore wind revenue of $35.2 million due to timing of projects and a decrease in storm restoration services revenue of $13.7 million ($6.6 million for the fiscal nine months ended September 28, 2025 compared to $20.3 million for the prior year period). As a percentage of revenue, gross profit increased to 8.2% in the fiscal nine months ended September 28, 2025 as compared to 7.8% in the prior year period driven by more efficient utilization of fixed costs on higher revenue, partially offset by the $13.7 million decrease in storm restoration services revenue, which resulted in $3.8 million less gross profit.

Previous wording

Selling, general and administrative costs increased by $6.1 million, or 12.4% in the current period. The current year period included $4.6 million in separation-related costs and other non-recurring professional fees compared to $2.0 million in similar non-recurring costs in the prior year period. Additionally, stock-based compensation and other incentive compensation increased, partially offset by $5.4 million in severance paid in 2024 that was recorded within selling, general and administrative costs in the prior year period. The Company also incurred incremental costs to operate as a standalone public company in the current year period.

Current wording

Selling, general and administrative costs increased by $13.8 million, or 18.1% in the current period. This increase was largely driven by an increase in stock-based compensation and accruals for cash-based incentive compensation. The current year period also included $6.9 million in separation-related costs and other non-recurring professional fees compared to $3.4 million in similar non-recurring costs (including strategic review costs and securitization facility transaction fees) in the prior year period. These increases were partially offset by $5.7 million in severance paid in 2024 that was recorded within selling, general and administrative costs in the prior year period. In the current year period, we also incurred incremental costs to operate as a standalone public company and to grow our sales and business development function.

Previous wording

Interest expense, net decreased by $10.6 million during the current period compared to the prior year period due to a reduction in average debt balance and a decrease in interest rates on outstanding variable-rate borrowings.

Current wording

Interest expense, net decreased by $8.3 million during the current period compared to the prior year period due to a reduction in average debt balance and a decrease in interest rates on outstanding variable-rate borrowings, net of $8.3 million in costs related to the refinance of our credit facility.

Previous wording

Our effective tax rate for the fiscal six month periods ended June 29, 2025 and June 30, 2024 was 41.4% and 61.1%, respectively. The effective tax rate for both periods was impacted by the disproportionate amount of non-deductible expenses in relation to income (loss) before income taxes. Additionally, differences in income (loss) before income taxes by jurisdiction caused fluctuations in the effective tax rate when comparing periods.

Current wording

Our effective tax rate for the fiscal nine-month periods ended September 28, 2025 and September 29, 2024 was (14.4%) and (3.1%), respectively. The effective tax rate for the current year period was impacted by the disproportionate amount of non-deductible expenses in relation to loss before income taxes. The effective tax rate for the prior year period was impacted by the use of the actual effective tax rate instead of the annual effective tax rate. Additionally, differences in income (loss) before income taxes by jurisdiction caused fluctuations in the effective tax rate when comparing periods.

Previous wording

We prepare and present our financial statements in accordance with GAAP. However, management believes that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income, all of which are measures not presented in accordance with GAAP, provide investors with additional useful information in evaluating our performance. We use these non-GAAP measures internally to evaluate performance and to make financial, investment and operational decisions. We believe that presentation of these non-GAAP measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparisons. Management also believes that providing these non-GAAP measures helps investors evaluate the Company’s operating results in a way that is consistent with how management evaluates such matters.

Current wording

We prepare and present our financial statements in accordance with GAAP. However, management believes that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Base Revenue, Base Gross Profit and Base Gross Profit Margin, all of which are measures not presented in accordance with GAAP, provide investors with additional useful information in evaluating our performance. We use these non-GAAP measures internally to evaluate performance and to make financial, investment and operational decisions. We believe that presentation of these non-GAAP measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparisons. Management also believes that providing these non-GAAP measures helps investors evaluate the Company’s operating results in a way that is consistent with how management evaluates such matters.

Previous wording

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for (i) non-cash stock-based compensation, (ii) separation-related costs, (iii) strategic review costs, (iv) severance costs, and (v) other professional fees. Adjusted EBITDA Margin is defined as the percentage derived from dividing Adjusted EBITDA by revenue. Management believes that EBITDA helps investors gain an understanding of the factors affecting our ongoing cash earnings from which capital investments are made and debt is serviced, and that Adjusted EBITDA provides additional insight by removing certain expenses that are non-recurring and/or non-operational in nature. Management believes that Adjusted EBITDA Margin is useful for the same reason as Adjusted EBITDA, and also provides an additional understanding of how Adjusted EBITDA is impacted by factors other than changes in revenue. Because these non-GAAP metrics, as defined, exclude some, but not all, items that affect comparable GAAP financial measures, these non-GAAP metrics may not be comparable to similarly titled measures of other companies.

Current wording

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for (i) non-cash stock-based compensation, (ii) separation-related costs, (iii) strategic review costs, (iv) severance costs, (v) securitization facility transaction fees, (vi) other professional fees, and (vii) CEO transition costs. Adjusted EBITDA Margin is defined as the percentage derived from dividing Adjusted EBITDA by revenue. Management believes that EBITDA helps investors gain an understanding of the factors affecting our ongoing cash earnings from which capital investments are made and debt is serviced, and that Adjusted EBITDA provides additional insight by removing certain expenses that are non-recurring and/or non-operational in nature. Management believes that Adjusted EBITDA Margin is useful for the same reason as Adjusted EBITDA, and also provides an additional understanding of how Adjusted EBITDA is impacted by factors other than changes in revenue. Because these non-GAAP metrics, as defined, exclude some, but not all, items that affect comparable GAAP financial measures, these non-GAAP metrics may not be comparable to similarly titled measures of other companies.

Previous wording

Adjusted Net Income is defined as net income (loss) adjusted for (i) separation-related costs, (ii) strategic review costs, (iii) severance costs, (iv) amortization of intangible assets, (v) other professional fees, (vi) non-cash stock-based compensation, and (vii) the income tax impact of adjustments that are subject to tax, which is determined using the incremental statutory tax rates of the jurisdictions to which each adjustment relates for the respective periods. Management believes that Adjusted Net Income helps investors understand the profitability of our business when excluding certain expenses that are non-recurring and/or non-operational in nature.

Current wording

Adjusted Net Income is defined as net income (loss) adjusted for (i) separation-related costs, (ii) strategic review costs, (iii) severance costs, (iv) amortization of intangible assets, (v) securitization facility transaction fees, (vi) other professional fees, (vii) CEO transition costs, (viii) loss on debt modification and extinguishment, (ix) non-cash stock-based compensation, and (x) the income tax impact of adjustments that are subject to tax, which is determined using the incremental statutory tax rates of the jurisdictions to which each adjustment relates for the respective periods. Management believes that Adjusted Net Income helps investors understand the profitability of our business when excluding certain expenses that are non-recurring and/or non-operational in nature.

Previous wording

As to certain of the items related to these non-GAAP metrics: (i) non-cash stock-based compensation varies from period to period due to changes in the estimated fair value of performance-based awards, forfeitures and amounts granted; (ii) separation-related costs represent expenses incurred post-Centuri IPO in connection with the separation and stand up of Centuri as its own public company, including costs incurred in association with Southwest Gas Holdings’ sale of its holdings of our common stock and costs incurred in connection with the establishment of Centuri’s Unutilized Tax Assets Agreement with Southwest Gas Holdings and under other separation-related agreements, which are not reflective of our ongoing operations and will not recur following the full separation from Southwest Gas Holdings; (iii) strategic review costs represent expenses incurred during the Centuri IPO and related costs incurred to establish Centuri as a public company leading up to the IPO; (iv) severance costs relate to non-recurring restructuring activities; and (v) other professional fees are non-recurring costs associated with certain one-time events. The most comparable GAAP financial measure and information reconciling the GAAP and non-GAAP financial measures are set forth below.

Current wording

As to certain of the items related to these non-GAAP metrics: (i) non-cash stock-based compensation varies from period to period due to changes in the estimated fair value of performance-based awards, forfeitures and amounts granted; (ii) separation-related costs represent expenses incurred post-Centuri IPO in connection with the separation and stand up of Centuri as its own public company, including costs incurred in association with Southwest Gas Holdings’ sale of its holdings of our common stock and costs incurred in connection with the establishment of Centuri’s Unutilized Tax Assets Settlement Agreement with Southwest Gas Holdings and under other separation-related agreements, which are not reflective of our ongoing operations and will not recur following the full separation from Southwest Gas Holdings; (iii) strategic review costs represent expenses incurred during the Centuri IPO and related costs incurred to establish Centuri as a public company leading up to the IPO; (iv) severance costs relate to non-recurring restructuring activities; (v)

Previous wording

Our primary liquidity needs have historically related to supporting working capital requirements, funding capital expenditures and servicing our debt. As of June 29, 2025 and December 29, 2024, cash and cash equivalents were $28.3 million and $49.0 million, respectively. We believe our capital resources, including existing cash balances, together with our operating cash flows and borrowings under our credit facilities, are sufficient to meet our financial obligations for the next 12 months and the foreseeable future.

Current wording

Our primary liquidity needs have historically related to supporting working capital requirements, funding capital expenditures and servicing our debt. As of September 28, 2025 and December 29, 2024, cash and cash equivalents were $16.1 million and $49.0 million, respectively. We believe our capital resources, including existing cash balances, together with our operating cash flows and borrowings under our credit facilities, are sufficient to meet our financial obligations for the next 12 months and the foreseeable future.

Previous wording

Net cash used in investing activities was $42.6 million in the fiscal six months ended June 29, 2025 compared to $42.3 million for the fiscal six months ended June 30, 2024, an increase of $0.3 million.

Current wording

Net cash used in investing activities was $64.2 million in the fiscal nine months ended September 28, 2025 compared to $59.3 million for the fiscal nine months ended September 29, 2024, an increase of $4.9 million.

Previous wording

The construction industry is capital intensive, andwe expect to continue to incur capital expenditures to meet anticipated needs for our services. For the fiscal six months ended June 29, 2025 and June 30, 2024, we had capital expenditures of $45.2 million and $46.6 million, respectively.

Current wording

The construction industry is capital intensive, andwe expect to continue to incur capital expenditures to meet anticipated needs for our services. For the fiscal nine months ended September 28, 2025 and September 29, 2024, we had capital expenditures of $68.7 million and $66.1 million, respectively.

Previous wording

These items were partially offset by proceeds from the sale of property and equipment of $2.5 million and $4.3 million for the fiscal six month periods ended June 29, 2025 and June 30, 2024, respectively.

Current wording

These items were partially offset by proceeds from the sale of property and equipment of $4.6 million and $6.8 million for the fiscal nine-month periods ended September 28, 2025 and September 29, 2024, respectively.

Previous wording

While we primarily operate in the United States, we also have operations in Canada. Therefore, changes in the value of Canadian dollars affect our financial statements when translated into U.S. dollars. The revenue from our Canadian operations was approximately 7% of total revenue for both the fiscal six month periods ended June 29, 2025 and June 30, 2024. At times, we also enter into transactions in foreign currencies, primarily in Canadian dollars, that subject us to currency risks. We regularly monitor our foreign currency exposure to determine the most effective foreign currency risk mitigation strategies. Currently, we are not party to any foreign currency exchange contracts.

Current wording

While we primarily operate in the United States, we also have operations in Canada. Therefore, changes in the value of Canadian dollars affect our financial statements when translated into U.S. dollars. The revenue from our Canadian operations was approximately 8% and 7% of total revenue for the fiscal nine-month periods ended September 28, 2025 and September 29, 2024, respectively. At times, we also enter into transactions in foreign currencies, primarily in Canadian dollars, that subject us to currency risks. We regularly monitor our foreign currency exposure to determine the most effective foreign currency risk mitigation strategies. Currently, we are not party to any foreign currency exchange contracts.

Previous wording

On July 9, 2025, we entered into the sixth amendment to our amended and restated credit agreement (as amended, the “Credit Agreement”). The Credit Agreement was amended to, among other things, (a) join Centuri Holdings as a borrower; (b) update the change in control provision to permit Southwest Gas Holdings to dispose of its ownership in our common stock below 51% without triggering an event of default under the Credit Agreement; (c) refinance and replace in full the existing term loan facility with an $800 million term loan facility with a maturity date of July 9, 2032, $93.6 million of which is comprised of new term loans used to refinance existing indebtedness and $706.4 million of which was used to refinance existing term loans; (d) increase the maximum principal amount of the senior secured revolving credit facility from $400 million to $450 million; (e) extend the maturity date of the senior secured revolving credit facility from August 27, 2026 to July 9, 2030; (f) make certain adjustments to pricing, including decreasing the interest rate margin applicable to term loans by 0.25% to 2.25% for SOFR Loans (as defined in the Credit Agreement) and 1.25% for Base Rate Loans (as defined in the Credit Agreement); and (g) modify certain covenants.

Current wording

On July 9, 2025, we signed the sixth amendment to our amended and restated credit agreement to refinance and replace in full our existing term loan facility with an $800 million term loan facility, $93.6 million of which is comprised of new term loans used to refinance existing indebtedness and $706.4 million of which was used to refinance existing term loans. This amendment also increased the maximum principal amount of our senior secured revolving credit facility from $400 million to $450 million. This multi-currency facility allows us to request loan advances in either Canadian dollars or U.S. dollars. Amounts borrowed and repaid under the revolving line of credit portion of the facility are available to be re-borrowed.

Previous wording

We have a senior secured revolving credit and term loan multi-currency facility. As of June 29, 2025, the line of credit portion comprised $400 million. Amounts borrowed and repaid are available to be re-borrowed. The term loan facility portion provided approximately $1.145 billion in financing as of August 27, 2021. This multi-currency facility allows us to request loan advances in either Canadian dollars or U.S. dollars. The obligations under the credit agreement are secured by present and future ownership interests in substantially all of our direct and indirect subsidiaries, substantially all of our tangible and intangible personal property, and all products, profits and proceeds of the foregoing. Assets securing the facility totaled $2.0 billion as of both June 29, 2025 and December 29, 2024. During the fiscal six months ended June 29, 2025, the maximum amount outstanding on the combined facility was $878.6 million, at which point $706.4 million was outstanding on the term loan portion of the facility. As of June 29, 2025 and December 29, 2024, $172.2 million and $113.5 million, respectively, was outstanding on the revolving credit facility, in addition to $706.4 million that was outstanding on the term loan portion of the facility for both periods. Also, as of June 29, 2025 and December 29, 2024, there was approximately $171.4 million and $226.1 million, respectively, net of outstanding letters of credit, of unused capacity under the line of credit. We had $68.6 million and $64.6 million of unused letters of credit available as of June 29, 2025 and December 29, 2024, respectively.

Current wording

During the fiscal nine months ended September 28, 2025, the maximum amount outstanding on the combined facility was $916.0 million, at which point $800.0 million was outstanding on the term loan portion of the facility. As of September 28, 2025 and December 29, 2024, $95.8 million and $113.5 million, respectively, was outstanding on the revolving credit facility, in addition to $800.0 million and $706.4 million that was outstanding on the term loan portion of the facility as of September 28, 2025 and December 29, 2024, respectively. Also, as of September 28, 2025 and December 29, 2024, there was approximately $297.8 million and $226.1 million, respectively, net of outstanding letters of credit, of unused capacity under the line of credit. We had $68.6 million and $64.6 million of unused letters of credit available as of September 28, 2025 and December 29, 2024, respectively.

Previous wording

Pursuant to the amendment, we are required to maintain a leverage ratio, on a rolling twelve-month basis, of 4.50 to 1.00 for any future quarter ending prior to September 30, 2026, and 4.00 to 1.00 for any quarter ending on or after September 30, 2026. Under the amended terms of the Credit Agreement, we are also required to maintain, on a rolling four-quarter basis, an interest coverage ratio of greater than a minimum of 2.50 to 1.00.

Current wording

Immediately prior to the sixth amendment, we were required to maintain a leverage ratio of 4.00 to 1.00, and an interest coverage ratio of greater than a minimum of 2.50 to 1.00 under our revolving credit facility. Pursuant to the sixth amendment signed on July 9, 2025, we are now required to maintain a leverage ratio of 4.50 to 1.00 for any future quarter ending prior to September 30, 2026, and 4.00 to 1.00 for any quarter ending on or after September 30, 2026. The requirement to maintain an interest coverage ratio of greater than a minimum of 2.50 to 1.00 remains unchanged. We are currently in compliance with all of our financial covenants under the revolving credit facility.

Previous wording

We currently have six equipment term loans with initial amounts totaling approximately $150 million, with certain owned equipment used as collateral. The loans are serviced in U.S. dollars.

Current wording

As of September 28, 2025, we had six equipment term loans with initial amounts totaling approximately $150 million, with certain owned equipment used as collateral. The loans are serviced in U.S. dollars.

Previous wording

This discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires the use of estimates and assumptions. A summary of our critical accounting policies and estimates is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our 2024 Annual Report. We are required to make estimates and judgments in the preparation of our condensed consolidated financial statements that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures. We continually review these estimates and their underlying assumptions to ensure they are appropriate for the circumstances. Changes in the estimates and assumptions we use could have a material impact on our financial results. During the fiscal six months ended June 29, 2025, there were no material changes in our critical accounting estimates or policies.

Current wording

This discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires the use of estimates and assumptions. A summary of our critical accounting policies and estimates is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our 2024 Annual Report. We are required to make estimates and judgments in the preparation of our condensed consolidated financial statements that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures. We continually review these estimates and their underlying assumptions to ensure they are appropriate for the circumstances. Changes in the estimates and assumptions we use could have a material impact on our financial results. During the fiscal nine months ended September 28, 2025, there were no material changes in our critical accounting estimates or policies.