QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Commission File Number | Exact name of registrant as specified in its charter and principal office address and telephone number | State of Incorporation | I.R.S. Employer Identification No. | |||||
Securities registered pursuant to Section 12(b) of the Act: | ||||
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company | ||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company | ||||||
1 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
2 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
June 30, 2019 | December 31, 2018 | |||||||
ASSETS | ||||||||
Utility plant: | ||||||||
Gas plant | $ | $ | ||||||
Less: accumulated depreciation | ( | ) | ( | ) | ||||
Construction work in progress | ||||||||
Net utility plant | ||||||||
Other property and investments | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | ||||||||
Accounts receivable, net of allowances | ||||||||
Accrued utility revenue | ||||||||
Income taxes receivable | ||||||||
Deferred purchased gas costs | ||||||||
Prepaid and other current assets | ||||||||
Total current assets | ||||||||
Noncurrent assets: | ||||||||
Goodwill | ||||||||
Deferred income taxes | ||||||||
Deferred charges and other assets | ||||||||
Total noncurrent assets | ||||||||
Total assets | $ | $ | ||||||
CAPITALIZATION AND LIABILITIES | ||||||||
Capitalization: | ||||||||
Common stock, $1 par (authorized - 60,000,000 shares; issued and outstanding - 54,321,217 and 53,026,848 shares) | $ | $ | ||||||
Additional paid-in capital | ||||||||
Accumulated other comprehensive income (loss), net | ( | ) | ( | ) | ||||
Retained earnings | ||||||||
Total Southwest Gas Holdings, Inc. equity | ||||||||
Noncontrolling interest | ( | ) | ||||||
Total equity | ||||||||
Redeemable noncontrolling interest | ||||||||
Long-term debt, less current maturities | ||||||||
Total capitalization | ||||||||
Current liabilities: | ||||||||
Current maturities of long-term debt | ||||||||
Short-term debt | ||||||||
Accounts payable | ||||||||
Customer deposits | ||||||||
Income taxes payable | ||||||||
Accrued general taxes | ||||||||
Accrued interest | ||||||||
Deferred purchased gas costs | ||||||||
Other current liabilities | ||||||||
Total current liabilities | ||||||||
Deferred income taxes and other credits: | ||||||||
Deferred income taxes and investment tax credits | ||||||||
Accumulated removal costs | ||||||||
Other deferred credits and other long-term liabilities | ||||||||
Total deferred income taxes and other credits | ||||||||
Total capitalization and liabilities | $ | $ | ||||||
3 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Three Months Ended June 30, | Six Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||
Gas operating revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Utility infrastructure services revenues | ||||||||||||||||||||||||
Total operating revenues | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Net cost of gas sold | ||||||||||||||||||||||||
Operations and maintenance | ||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||
Taxes other than income taxes | ||||||||||||||||||||||||
Utility infrastructure services expenses | ||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||
Other income and (expenses): | ||||||||||||||||||||||||
Net interest deductions | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Other income (deductions) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Total other income and (expenses) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Income before income taxes | ||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | ( | ) | ( | ) | ||||||||||||||||||||
Net income attributable to Southwest Gas Holdings, Inc. | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Average number of common shares | ||||||||||||||||||||||||
Average shares (assuming dilution) | ||||||||||||||||||||||||
4 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Three Months Ended June 30, | Six Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Net income | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Other comprehensive income (loss), net of tax | ||||||||||||||||||||||||
Defined benefit pension plans: | ||||||||||||||||||||||||
Net actuarial gain (loss) | ( | ) | ( | ) | ||||||||||||||||||||
Amortization of prior service cost | ||||||||||||||||||||||||
Amortization of net actuarial loss | ||||||||||||||||||||||||
Regulatory adjustment | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
Net defined benefit pension plans | ( | ) | ||||||||||||||||||||||
Forward-starting interest rate swaps (“FSIRS”): | ||||||||||||||||||||||||
Amounts reclassified into net income | ||||||||||||||||||||||||
Net forward-starting interest rate swaps | ||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Total other comprehensive income (loss), net of tax | ( | ) | ||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interests | ( | ) | ( | ) | ||||||||||||||||||||
Comprehensive income attributable to Southwest Gas Holdings, Inc. | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
5 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Six Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | ||||||||||||||||
Deferred income taxes | ||||||||||||||||
Changes in current assets and liabilities: | ||||||||||||||||
Accounts receivable, net of allowances | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Accrued utility revenue | ( | ) | ( | ) | ||||||||||||
Deferred purchased gas costs | ( | ) | ||||||||||||||
Accounts payable | ( | ) | ( | ) | ||||||||||||
Accrued taxes | ( | ) | ( | ) | ( | ) | ||||||||||
Other current assets and liabilities | ( | ) | ( | ) | ||||||||||||
Gains on sale | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Changes in undistributed stock compensation | ||||||||||||||||
Equity AFUDC | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Changes in other assets and deferred charges | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Changes in other liabilities and deferred credits | ( | ) | ||||||||||||||
Net cash provided by operating activities | ||||||||||||||||
CASH FLOW FROM INVESTING ACTIVITIES: | ||||||||||||||||
Construction expenditures and property additions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Acquisition of businesses, net of cash acquired | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Changes in customer advances | ||||||||||||||||
Miscellaneous inflows | ||||||||||||||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
CASH FLOW FROM FINANCING ACTIVITIES: | ||||||||||||||||
Issuance of common stock, net | ||||||||||||||||
Dividends paid | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Issuance of long-term debt, net | ||||||||||||||||
Retirement of long-term debt | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Change in credit facility and commercial paper | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Change in short-term debt | ( | ) | ( | ) | ( | ) | ||||||||||
Principal payments on finance lease obligations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Redemption of Centuri shares from noncontrolling parties | ( | ) | ||||||||||||||
Withholding remittance - share-based compensation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net cash provided by financing activities | ||||||||||||||||
Effects of currency translation on cash and cash equivalents | ( | ) | ( | ) | ||||||||||||
Change in cash and cash equivalents | ( | ) | ( | ) | ||||||||||||
Cash and cash equivalents at beginning of period | ||||||||||||||||
Cash and cash equivalents at end of period | $ | $ | $ | $ | ||||||||||||
Supplemental information: | ||||||||||||||||
Interest paid, net of amounts capitalized | $ | $ | $ | $ | ||||||||||||
Income taxes paid (received) | $ | $ | $ | ( | ) | $ | ||||||||||
6 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Common stock shares | |||||||||||||||||
Beginning balances | |||||||||||||||||
Common stock issuances | |||||||||||||||||
Ending balances | |||||||||||||||||
Common stock amount | |||||||||||||||||
Beginning balances | $ | $ | $ | $ | |||||||||||||
Common stock issuances | |||||||||||||||||
Ending balances | |||||||||||||||||
Additional paid-in capital | |||||||||||||||||
Beginning balances | |||||||||||||||||
Common stock issuances | |||||||||||||||||
Change in ownership of noncontrolling interest | ( | ) | ( | ) | ( | ) | |||||||||||
Ending balances | |||||||||||||||||
Accumulated other comprehensive income (loss) | |||||||||||||||||
Beginning balances | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Foreign currency exchange translation adjustment | ( | ) | ( | ) | |||||||||||||
Net actuarial gain (loss) arising during period, less amortization of unamortized benefit plan cost, net of tax | |||||||||||||||||
FSIRS amounts reclassified to net income, net of tax | |||||||||||||||||
Reclassification of excess deferred taxes | ( | ) | |||||||||||||||
Ending balances | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Retained earnings | |||||||||||||||||
Beginning balances | |||||||||||||||||
Net income | |||||||||||||||||
Dividends declared | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Reclassification of excess deferred taxes | |||||||||||||||||
Ending balances | |||||||||||||||||
Total Southwest Gas Holdings, Inc. equity ending balances | |||||||||||||||||
Noncontrolling interest | |||||||||||||||||
Beginning balances | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Net income (loss) | ( | ) | |||||||||||||||
Change in ownership of noncontrolling interest | |||||||||||||||||
Ending balances | ( | ) | ( | ) | |||||||||||||
Total equity ending balances | $ | $ | $ | $ | |||||||||||||
Dividends declared per common share | $ | $ | $ | $ | |||||||||||||
7 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
June 30, 2019 | December 31, 2018 | |||||||
ASSETS | ||||||||
Utility plant: | ||||||||
Gas plant | $ | $ | ||||||
Less: accumulated depreciation | ( | ) | ( | ) | ||||
Construction work in progress | ||||||||
Net utility plant | ||||||||
Other property and investments | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | ||||||||
Accounts receivable, net of allowances | ||||||||
Accrued utility revenue | ||||||||
Income taxes receivable | ||||||||
Deferred purchased gas costs | ||||||||
Prepaid and other current assets | ||||||||
Total current assets | ||||||||
Noncurrent assets: | ||||||||
Goodwill | ||||||||
Deferred charges and other assets | ||||||||
Total noncurrent assets | ||||||||
Total assets | $ | $ | ||||||
CAPITALIZATION AND LIABILITIES | ||||||||
Capitalization: | ||||||||
Common stock | $ | $ | ||||||
Additional paid-in capital | ||||||||
Accumulated other comprehensive income (loss), net | ( | ) | ( | ) | ||||
Retained earnings | ||||||||
Total equity | ||||||||
Long-term debt, less current maturities | ||||||||
Total capitalization | ||||||||
Current liabilities: | ||||||||
Short-term debt | ||||||||
Accounts payable | ||||||||
Customer deposits | ||||||||
Accrued general taxes | ||||||||
Accrued interest | ||||||||
Deferred purchased gas costs | ||||||||
Payable to parent | ||||||||
Other current liabilities | ||||||||
Total current liabilities | ||||||||
Deferred income taxes and other credits: | ||||||||
Deferred income taxes and investment tax credits, net | ||||||||
Accumulated removal costs | ||||||||
Other deferred credits and other long-term liabilities | ||||||||
Total deferred income taxes and other credits | ||||||||
Total capitalization and liabilities | $ | $ | ||||||
8 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Three Months Ended June 30, | Six Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Gas operating revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Net cost of gas sold | ||||||||||||||||||||||||
Operations and maintenance | ||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||
Taxes other than income taxes | ||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||
Other income and (expenses): | ||||||||||||||||||||||||
Net interest deductions | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Other income (deductions) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Total other income and (expenses) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Income from continuing operations before income taxes | ||||||||||||||||||||||||
Income tax expense (benefit) | ( | ) | ( | ) | ||||||||||||||||||||
Net income | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
9 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Three Months Ended June 30, | Six Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Net income | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Other comprehensive income (loss), net of tax | ||||||||||||||||||||||||
Defined benefit pension plans: | ||||||||||||||||||||||||
Net actuarial gain (loss) | ( | ) | ( | ) | ||||||||||||||||||||
Amortization of prior service cost | ||||||||||||||||||||||||
Amortization of net actuarial loss | ||||||||||||||||||||||||
Regulatory adjustment | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
Net defined benefit pension plans | ( | ) | ||||||||||||||||||||||
Forward-starting interest rate swaps (“FSIRS”): | ||||||||||||||||||||||||
Amounts reclassified into net income | ||||||||||||||||||||||||
Net forward-starting interest rate swaps | ||||||||||||||||||||||||
Total other comprehensive income (loss), net of tax | ( | ) | ||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
10 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Six Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net Income | $ | $ | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | ||||||||||||||||
Deferred income taxes | ||||||||||||||||
Changes in current assets and liabilities: | ||||||||||||||||
Accounts receivable, net of allowances | ( | ) | ( | ) | ||||||||||||
Accrued utility revenue | ( | ) | ( | ) | ||||||||||||
Deferred purchased gas costs | ( | ) | ||||||||||||||
Accounts payable | ( | ) | ( | ) | ||||||||||||
Accrued taxes | ( | ) | ( | ) | ( | ) | ||||||||||
Other current assets and liabilities | ( | ) | ( | ) | ||||||||||||
Changes in undistributed stock compensation | ||||||||||||||||
Equity AFUDC | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Changes in other assets and deferred charges | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Changes in other liabilities and deferred credits | ( | ) | ||||||||||||||
Net cash provided by operating activities | ||||||||||||||||
CASH FLOW FROM INVESTING ACTIVITIES: | ||||||||||||||||
Construction expenditures and property additions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Changes in customer advances | ||||||||||||||||
Miscellaneous inflows (outflows) | ( | ) | ( | ) | ||||||||||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
CASH FLOW FROM FINANCING ACTIVITIES: | ||||||||||||||||
Contributions from parent | ||||||||||||||||
Dividends paid | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Issuance of long-term debt, net | ||||||||||||||||
Change in credit facility and commercial paper | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Change in short-term debt | ( | ) | ( | ) | ||||||||||||
Withholding remittance - share-based compensation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net cash provided by financing activities | ||||||||||||||||
Change in cash and cash equivalents | ( | ) | ( | ) | ||||||||||||
Cash and cash equivalents at beginning of period | ||||||||||||||||
Cash and cash equivalents at end of period | $ | $ | $ | $ | ||||||||||||
Supplemental information: | ||||||||||||||||
Interest paid, net of amounts capitalized | $ | $ | $ | $ | ||||||||||||
Income taxes paid (received) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
11 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Common stock shares | |||||||||||||||||
Beginning and ending balances | |||||||||||||||||
Common stock amount | |||||||||||||||||
Beginning and ending balances | $ | $ | $ | $ | |||||||||||||
Additional paid-in capital | |||||||||||||||||
Beginning balances | |||||||||||||||||
Share-based compensation | |||||||||||||||||
Contributions from Southwest Gas Holdings, Inc. | |||||||||||||||||
Ending balances | |||||||||||||||||
Accumulated other comprehensive income (loss) | |||||||||||||||||
Beginning balances | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Net actuarial gain (loss) arising during period, less amortization of unamortized benefit plan cost, net of tax | |||||||||||||||||
FSIRS amounts reclassified to net income, net of tax | |||||||||||||||||
Reclassification of excess deferred taxes | ( | ) | |||||||||||||||
Ending balances | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Retained earnings | |||||||||||||||||
Beginning balances | |||||||||||||||||
Net income (loss) | |||||||||||||||||
Share-based compensation | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Dividends declared to Southwest Gas Holdings, Inc. | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Reclassification of excess deferred taxes | |||||||||||||||||
Ending balances | |||||||||||||||||
Total Southwest Gas Corporation equity ending balances | $ | $ | $ | $ | |||||||||||||
12 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
13 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
June 30, 2019 | December 31, 2018 | ||||||
Southwest Gas Corporation: | |||||||
Net cash surrender value of COLI policies | $ | $ | |||||
Other property | |||||||
Total Southwest Gas Corporation | |||||||
Centuri property, equipment, and intangibles | |||||||
Centuri accumulated depreciation/amortization | ( | ) | ( | ) | |||
Other property | |||||||
Total Southwest Gas Holdings, Inc. | $ | $ | |||||
June 30, 2019 | December 31, 2018 | ||||||
Centuri accounts receivable for services provided to Southwest | $ | $ | |||||
14 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
(Thousands of dollars) | Natural Gas Operations | Utility Infrastructure Services | Total Company | ||||||||
December 31, 2018 | $ | $ | $ | ||||||||
Measurement-period adjustments - Linetec acquisition (a) | ( | ) | ( | ) | |||||||
Foreign currency translation adjustment | |||||||||||
June 30, 2019 | $ | $ | $ | ||||||||
Three Months Ended | Six Months Ended | Twelve Months Ended | |||||||||||||||||||||
June 30, | June 30, | June 30, | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Southwest Gas Corporation - natural gas operations segment: | |||||||||||||||||||||||
Change in COLI policies | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Interest income | |||||||||||||||||||||||
Equity AFUDC | |||||||||||||||||||||||
Other components of net periodic benefit cost | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Miscellaneous income and (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Southwest Gas Corporation - total other income (deductions) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Utility infrastructure services segment: | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Foreign transaction gain (loss) | ( | ) | ( | ) | |||||||||||||||||||
Miscellaneous income and (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Centuri - total other income (deductions) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Corporate and administrative | |||||||||||||||||||||||
Consolidated Southwest Gas Holdings, Inc. - total other income (deductions) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||
15 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
16 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
17 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Qualified Retirement Plan | |||||||||||||||||||||||
Period Ended June 30, | |||||||||||||||||||||||
Three Months | Six Months | Twelve Months | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
(Thousands of dollars) | |||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Amortization of net actuarial loss | |||||||||||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||
SERP | |||||||||||||||||||||||
Period Ended June 30, | |||||||||||||||||||||||
Three Months | Six Months | Twelve Months | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
(Thousands of dollars) | |||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Interest cost | |||||||||||||||||||||||
Amortization of net actuarial loss | |||||||||||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||
PBOP | |||||||||||||||||||||||
Period Ended June 30, | |||||||||||||||||||||||
Three Months | Six Months | Twelve Months | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
(Thousands of dollars) | |||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Amortization of prior service costs | |||||||||||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||
18 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Three Months Ended | Six Months Ended | Twelve Months Ended | |||||||||||||||||||||
June 30, | June 30, | June 30, | |||||||||||||||||||||
(Thousands of dollars) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Residential | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Small commercial | |||||||||||||||||||||||
Large commercial | |||||||||||||||||||||||
Industrial/other | |||||||||||||||||||||||
Transportation | |||||||||||||||||||||||
Revenue from contracts with customers | |||||||||||||||||||||||
Alternative revenue program revenues (deferrals) | ( | ) | ( | ) | |||||||||||||||||||
Other revenues (a) | ( | ) | ( | ) | |||||||||||||||||||
Total Gas operating revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||
(Thousands of dollars) | Three Months Ended | Six Months Ended | Twelve Months Ended | ||||||||||||||||||||
June 30, | June 30, | June 30, | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Service Types: | |||||||||||||||||||||||
Gas infrastructure services | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Electric power infrastructure services | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total Utility infrastructure services revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||
(Thousands of dollars) | Three Months Ended | Six Months Ended | Twelve Months Ended | ||||||||||||||||||||
June 30, | June 30, | June 30, | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Contract Types: | |||||||||||||||||||||||
Master services agreement | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Bid contract | |||||||||||||||||||||||
Total Utility infrastructure services revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Unit priced contracts | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Fixed priced contracts | |||||||||||||||||||||||
Time and materials contracts | |||||||||||||||||||||||
Total Utility infrastructure services revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||
19 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
(Thousands of dollars) | June 30, 2019 | December 31, 2018 | |||||
Contracts receivable, net | $ | $ | |||||
Revenue earned on contracts in progress in excess of billings | |||||||
Amounts billed in excess of revenue earned on contracts | |||||||
(Thousands of dollars) | June 30, 2019 | December 31, 2018 | |||||
Billed on completed contracts and contracts in progress | $ | $ | |||||
Other receivables | |||||||
Contracts receivable, gross | |||||||
Allowance for doubtful accounts | ( | ) | ( | ) | |||
Contracts receivable, net | $ | $ | |||||
20 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
• | To use the “package”, which is a set of three practical expedients that must be elected as a package and applied consistently to all of Southwest’s and Centuri’s leases. These include: not reassessing whether any expired or existing contracts are or contain leases; not reassessing the lease classification for expired or existing leases (that is, existing operating and capital leases in accordance with current lease guidance will in each case be classified as operating and finance leases, respectively, under the updated guidance); and not reassessing initial direct costs for any existing leases. |
• | To utilize the practical expedient to exclude all easements in place prior to January 1, 2019 from treatment under Topic 842. However, Southwest will evaluate new easements entered into after the effective date of the standard to determine if the arrangements should be accounted for as leases. |
• | To make an accounting policy election by asset class to include both the lease and non-lease components (as defined in the guidance) as a single component. |
• | To make an accounting policy election to not apply Topic 842 to short-term leases, as permitted. |
• | To not elect to use hindsight in determining the lease term and in assessing impairment of ROU assets. |
• | To utilize a portfolio approach to effectively account for the operating lease ROU assets and liabilities with regard to certain equipment leases at Centuri. |
21 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
(Thousands of dollars) | Three Months Ended | Six Months Ended | ||||
June 30, 2019 | June 30, 2019 | |||||
Southwest: | ||||||
Operating lease cost | $ | $ | ||||
Centuri: | ||||||
Operating lease cost | $ | $ | ||||
Finance lease cost: | ||||||
Amortization of ROU assets | $ | $ | ||||
Interest on lease liabilities | ||||||
Total finance lease cost | ||||||
Short-term lease cost | ||||||
Total lease cost | $ | $ | ||||
(Thousands of dollars) | Southwest | Centuri | Consolidated Total | ||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | $ | $ | ||||||||
Operating cash flows from finance leases | |||||||||||
Financing cash flows from finance leases | |||||||||||
ROU assets obtained in exchange for lease obligations: | |||||||||||
Operating leases | $ | $ | $ | ||||||||
Finance leases | |||||||||||
22 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
(Thousands of dollars) | June 30, 2019 | ||
Southwest: | |||
Operating leases: | |||
Net Utility Plant | $ | ||
Other current liabilities | $ | ||
Other deferred credits and other long-term liabilities | |||
Total operating lease liabilities | $ | ||
Weighted average remaining lease term (in years) | |||
Weighted average discount rate | % | ||
Centuri: | |||
Operating leases: | |||
Other property and investments | $ | ||
Other current liabilities | |||
Other deferred credits and other long-term liabilities | |||
Total operating lease liabilities | $ | ||
Finance leases: | |||
Other property and investments | $ | ||
Other current liabilities | |||
Other deferred credits and other long-term liabilities | |||
Total finance lease liabilities | $ | ||
Weighted average remaining lease term (in years) | |||
Operating leases | |||
Finance leases | |||
Weighted average discount rate | |||
Operating leases | % | ||
Finance leases | % | ||
23 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
(Thousands of dollars) | Operating leases | ||
Southwest: | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total lease payments | |||
Less imputed interest | |||
Total | $ | ||
(Thousands of dollars) | Operating leases | Finance leases | |||||
Centuri: | |||||||
2020 | $ | $ | |||||
2021 | |||||||
2022 | |||||||
2023 | |||||||
2024 | |||||||
Thereafter | |||||||
Total lease payments | |||||||
Less imputed interest | |||||||
Total | $ | $ | |||||
2018 | 2017 | |||||||
Southwest Gas Corporation | $ | $ | ||||||
Centuri | ||||||||
Consolidated rental payments/lease expense | $ | $ | ||||||
Southwest | Centuri | Consolidated Total | ||||||||||
2019 | $ | $ | $ | |||||||||
2020 | ||||||||||||
2021 | ||||||||||||
2022 | ||||||||||||
2023 | ||||||||||||
Thereafter | ||||||||||||
Total minimum lease payments | $ | $ | $ | |||||||||
24 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
June 30, 2019 | December 31, 2018 | ||||
Contract notional amounts | |||||
Three Months Ended | Six Months Ended | Twelve Months Ended | |||||||||
(Thousands of dollars) | June 30, 2019 | June 30, 2019 | June 30, 2019 | ||||||||
Paid to counterparties | $ | $ | $ | ||||||||
Received from counterparties | $ | $ | $ | ||||||||
25 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
June 30, 2019 | |||||||||||||||
Swap Position | |||||||||||||||
Instrument | Balance Sheet Location | Asset Derivatives | Liability Derivatives | Net Total | Offsetting Balance Sheet Location (Regulatory Asset/(Liability)) | ||||||||||
Swaps | Deferred charges and other assets | $ | $ | ( | ) | $ | Other deferred credits | ||||||||
Swaps | Other current liabilities | ( | ) | ( | ) | Prepaid and other current assets | |||||||||
Swaps | Other deferred credits | ( | ) | ( | ) | Deferred charges and other assets | |||||||||
Total | $ | $ | ( | ) | $ | ( | ) | ||||||||
December 31, 2018 | |||||||||||||||
Swap Position | |||||||||||||||
Instrument | Balance Sheet Location | Asset Derivatives | Liability Derivatives | Net Total | Offsetting Balance Sheet Location (Regulatory Asset/(Liability)) | ||||||||||
Swaps | Prepaid and other current assets | $ | $ | ( | ) | $ | Other current liabilities | ||||||||
Swaps | Other current liabilities | ( | ) | ( | ) | Prepaid and other current assets | |||||||||
Swaps | Other deferred credits | ( | ) | ( | ) | Deferred charges and other assets | |||||||||
Total | $ | $ | ( | ) | $ | ( | ) | ||||||||
Gross proceeds | $ | ||
Less: agent commissions | ( | ) | |
Net proceeds | $ | ||
Number of shares sold | |||
Weighted average price per share | $ | ||
26 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
27 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
June 30, 2019 | December 31, 2018 | |||||||||||||||
Carrying Amount | Market Value | Carrying Amount | Market Value | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Southwest Gas Corporation: | ||||||||||||||||
Debentures: | ||||||||||||||||
Notes, 4.45%, due 2020 | $ | $ | $ | $ | ||||||||||||
Notes, 6.1%, due 2041 | ||||||||||||||||
Notes, 3.875%, due 2022 | ||||||||||||||||
Notes, 4.875%, due 2043 | ||||||||||||||||
Notes, 3.8%, due 2046 | ||||||||||||||||
Notes, 3.7%, due 2028 | ||||||||||||||||
Notes, 4.15%, due 2049 | ||||||||||||||||
8% Series, due 2026 | ||||||||||||||||
Medium-term notes, 7.78% series, due 2022 | ||||||||||||||||
Medium-term notes, 7.92% series, due 2027 | ||||||||||||||||
Medium-term notes, 6.76% series, due 2027 | ||||||||||||||||
Unamortized discount and debt issuance costs | ( | ) | ( | ) | ||||||||||||
Revolving credit facility and commercial paper | ||||||||||||||||
Industrial development revenue bonds: | ||||||||||||||||
Variable-rate bonds: | ||||||||||||||||
Tax-exempt Series A, due 2028 | ||||||||||||||||
2003 Series A, due 2038 | ||||||||||||||||
2008 Series A, due 2038 | ||||||||||||||||
2009 Series A, due 2039 | ||||||||||||||||
Unamortized discount and debt issuance costs | ( | ) | ( | ) | ||||||||||||
Less: current maturities | ||||||||||||||||
Long-term debt, less current maturities - Southwest Gas Corporation | $ | $ | ||||||||||||||
Centuri: | ||||||||||||||||
Centuri term loan facility | $ | $ | $ | $ | ||||||||||||
Unamortized debt issuance costs | ( | ) | ( | ) | ||||||||||||
Centuri secured revolving credit facility | ||||||||||||||||
Centuri other debt obligations | ||||||||||||||||
Less: current maturities | ( | ) | ( | ) | ||||||||||||
Long-term debt, less current maturities - Centuri | $ | $ | ||||||||||||||
Consolidated Southwest Gas Holdings, Inc.: | ||||||||||||||||
Southwest Gas Corporation long-term debt | $ | $ | ||||||||||||||
Centuri long-term debt | ||||||||||||||||
Less: current maturities | ( | ) | ( | ) | ||||||||||||
Long-term debt, less current maturities - Southwest Gas Holdings, Inc. | $ | $ | ||||||||||||||
28 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
29 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | |||||||||||||||||||||||
Before- Tax Amount | Tax (Expense) or Benefit (1) | Net-of- Tax Amount | Before- Tax Amount | Tax (Expense) or Benefit (1) | Net-of- Tax Amount | |||||||||||||||||||
Defined benefit pension plans: | ||||||||||||||||||||||||
Amortization of prior service cost | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
Amortization of net actuarial (gain)/loss | ( | ) | ( | ) | ||||||||||||||||||||
Regulatory adjustment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Pension plans other comprehensive income | ( | ) | ( | ) | ||||||||||||||||||||
FSIRS (designated hedging activities): | ||||||||||||||||||||||||
Amounts reclassified into net income | ( | ) | ( | ) | ||||||||||||||||||||
FSIRS other comprehensive income | ( | ) | ( | ) | ||||||||||||||||||||
Total other comprehensive income - Southwest Gas Corporation | ( | ) | ( | ) | ||||||||||||||||||||
Foreign currency translation adjustments: | ||||||||||||||||||||||||
Translation adjustments | ( | ) | ( | ) | ||||||||||||||||||||
Foreign currency other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||||||||||
Total other comprehensive income - Southwest Gas Holdings, Inc. | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | |||||||||||||||||||||||
Before- Tax Amount | Tax (Expense) or Benefit (1) | Net-of- Tax Amount | Before- Tax Amount | Tax (Expense) or Benefit (1) | Net-of- Tax Amount | |||||||||||||||||||
Defined benefit pension plans: | ||||||||||||||||||||||||
Amortization of prior service cost | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
Amortization of net actuarial (gain)/loss | ( | ) | ( | ) | ||||||||||||||||||||
Regulatory adjustment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Pension plans other comprehensive income | ( | ) | ( | ) | ||||||||||||||||||||
FSIRS (designated hedging activities): | ||||||||||||||||||||||||
Amounts reclassified into net income | ( | ) | ( | ) | ||||||||||||||||||||
FSIRS other comprehensive income | ( | ) | ( | ) | ||||||||||||||||||||
Total other comprehensive income - Southwest Gas Corporation | ( | ) | ( | ) | ||||||||||||||||||||
Foreign currency translation adjustments: | ||||||||||||||||||||||||
Translation adjustments | ( | ) | ( | ) | ||||||||||||||||||||
Foreign currency other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||||||||||
Total other comprehensive income - Southwest Gas Holdings, Inc. | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
30 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Twelve Months Ended June 30, 2019 | Twelve Months Ended June 30, 2018 | |||||||||||||||||||||||
Before- Tax Amount | Tax (Expense) or Benefit (1) | Net-of- Tax Amount | Before- Tax Amount | Tax (Expense) or Benefit (1) | Net-of- Tax Amount | |||||||||||||||||||
Defined benefit pension plans: | ||||||||||||||||||||||||
Net actuarial gain/(loss) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||
Amortization of prior service cost | ( | ) | ( | ) | ||||||||||||||||||||
Amortization of net actuarial (gain)/loss | ( | ) | ( | ) | ||||||||||||||||||||
Regulatory adjustment | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Pension plans other comprehensive income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
FSIRS (designated hedging activities): | ||||||||||||||||||||||||
Amounts reclassified into net income | ( | ) | ( | ) | ||||||||||||||||||||
FSIRS other comprehensive income | ( | ) | ( | ) | ||||||||||||||||||||
Total other comprehensive income (loss) - Southwest Gas Corporation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Foreign currency translation adjustments: | ||||||||||||||||||||||||
Translation adjustments | ( | ) | ( | ) | ||||||||||||||||||||
Foreign currency other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||||||||||
Total other comprehensive income (loss) - Southwest Gas Holdings, Inc. | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||
(1) | Tax amounts are calculated using a |
Defined Benefit Plans | FSIRS | Foreign Currency Items | ||||||||||||||||||||||||||||||||||||||
Before-Tax | Tax (Expense) Benefit (4,5) | After-Tax (5) | Before-Tax | Tax (Expense) Benefit (4,5) | After-Tax (5) | Before-Tax | Tax (Expense) Benefit | After-Tax | AOCI | |||||||||||||||||||||||||||||||
Beginning Balance AOCI December 31, 2018 | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | — | $ | ( | ) | $ | ( | ) | |||||||||||||||
Translation adjustments | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
FSIRS amounts reclassified from AOCI (1) | — | — | — | ( | ) | — | — | — | ||||||||||||||||||||||||||||||||
Amortization of prior service cost (2) | ( | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Amortization of net actuarial loss (2) | ( | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Regulatory adjustment (3) | ( | ) | ( | ) | — | — | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||
Net current period other comprehensive income (loss) attributable to Southwest Gas Holdings, Inc. | ( | ) | ( | ) | — | |||||||||||||||||||||||||||||||||||
Ending Balance AOCI June 30, 2019 | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | — | $ | ( | ) | $ | ( | ) | |||||||||||||||
(1) | The FSIRS reclassification amounts are included in Net interest deductions on the Company’s Condensed Consolidated Statements of Income. |
(2) | These AOCI components are included in the computation of net periodic benefit cost (see Note 2 – Components of Net Periodic Benefit Cost for additional details). |
(3) | The regulatory adjustment represents the portion of the activity above that is expected to be recovered through rates in the future (the related regulatory asset is included in Deferred charges and other assets on the Company’s Condensed Consolidated Balance Sheets). |
31 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
(4) | Tax amounts are calculated using a |
(5) | The beginning balances depict amounts attributable to the individual components of AOCI (Defined Benefit Plans and FSIRS) following the adoption of ASU No. 2018-02, with no impact to the total balance of AOCI resulting from the depiction. |
Defined Benefit Plans | FSIRS | |||||||||||||||||||||||||||
Before-Tax | Tax (Expense) Benefit (9,10) | After-Tax (10) | Before-Tax | Tax (Expense) Benefit (9,10) | After-Tax (10) | AOCI | ||||||||||||||||||||||
Beginning Balance AOCI December 31, 2018 | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||||||
FSIRS amounts reclassified from AOCI (6) | — | — | — | ( | ) | |||||||||||||||||||||||
Amortization of prior service cost (7) | ( | ) | — | — | — | |||||||||||||||||||||||
Amortization of net actuarial loss (7) | ( | ) | — | — | — | |||||||||||||||||||||||
Regulatory adjustment (8) | ( | ) | ( | ) | — | — | — | ( | ) | |||||||||||||||||||
Net current period other comprehensive income attributable to Southwest Gas Corporation | ( | ) | ( | ) | ||||||||||||||||||||||||
Ending Balance AOCI June 30, 2019 | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||||||
(6) | The FSIRS reclassification amounts are included in Net interest deductions on Southwest’s Condensed Consolidated Statements of Income. |
(7) | These AOCI components are included in the computation of net periodic benefit cost (see Note 2 – Components of Net Periodic Benefit Cost for additional details). |
(8) | The regulatory adjustment represents the portion of the activity above that is expected to be recovered through rates in the future (the related regulatory asset is included in Deferred charges and other assets on Southwest’s Condensed Consolidated Balance Sheets). |
(9) | Tax amounts are calculated using a |
(10) | The beginning balances depict amounts attributable to the individual components of AOCI (Defined Benefit Plans and FSIRS) following the adoption of ASU No. 2018-02, with no impact to the total balance of AOCI resulting from the depiction. |
June 30, 2019 | December 31, 2018 | |||||||
Net actuarial (loss) gain | $ | ( | ) | $ | ( | ) | ||
Prior service cost | ( | ) | ( | ) | ||||
Less: amount recognized in regulatory assets | ||||||||
Recognized in AOCI | $ | ( | ) | $ | ( | ) | ||
32 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Natural Gas Operations | Utility Infrastructure Services | Other | Total | ||||||||||||
Three Months Ended June 30, 2019 | |||||||||||||||
Revenues from external customers | $ | $ | $ | $ | |||||||||||
Intersegment revenues | — | ||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Segment net income (loss) | $ | $ | $ | ( | ) | $ | |||||||||
Three Months Ended June 30, 2018 | |||||||||||||||
Revenues from external customers | $ | $ | $ | $ | |||||||||||
Intersegment revenues | — | ||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Segment net income (loss) | $ | $ | $ | ( | ) | $ | |||||||||
Natural Gas Operations | Utility Infrastructure Services | Other | Total | ||||||||||||
Six Months Ended June 30, 2019 | |||||||||||||||
Revenues from external customers | $ | $ | $ | $ | |||||||||||
Intersegment revenues | — | ||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Segment net income (loss) | $ | $ | $ | ( | ) | $ | |||||||||
Six Months Ended June 30, 2018 | |||||||||||||||
Revenues from external customers | $ | $ | $ | $ | |||||||||||
Intersegment revenues | — | ||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Segment net income (loss) | $ | $ | $ | ( | ) | $ | |||||||||
Natural Gas Operations | Utility Infrastructure Services | Other | Total | ||||||||||||
Twelve Months Ended June 30, 2019 | |||||||||||||||
Revenues from external customers | $ | $ | $ | $ | |||||||||||
Intersegment revenues | — | ||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Segment net income (loss) | $ | $ | $ | ( | ) | $ | |||||||||
Twelve Months Ended June 30, 2018 | |||||||||||||||
Revenues from external customers | $ | $ | $ | $ | |||||||||||
Intersegment revenues | — | ||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Segment net income (loss) | $ | $ | $ | ( | ) | $ | |||||||||
33 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
(Thousands of dollars): | Redeemable Noncontrolling Interest | ||
Balance, December 31, 2018 | $ | ||
Net income attributable to redeemable noncontrolling interest | |||
Balance, June 30, 2019 | $ | ||
34 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Acquisition Date | Measurement Period Adjustments | Revised Acquisition Date | ||||||||||
Cash and cash equivalents | $ | $ | — | $ | ||||||||
Accounts receivable | ( | ) | ||||||||||
Revenue earned on contracts in progress in excess of billings | ( | ) | ||||||||||
Prepaid expenses and other current assets | ||||||||||||
Property and equipment | ( | ) | ||||||||||
Intangible assets | ||||||||||||
Goodwill | ( | ) | ||||||||||
Total assets acquired | ( | ) | ||||||||||
Accounts payable | — | |||||||||||
Accrued liabilities | ||||||||||||
Deferred compensation and related accrued taxes | — | |||||||||||
Redeemable noncontrolling interest | — | |||||||||||
Total liabilities assumed and noncontrolling interest | ||||||||||||
Net assets acquired | $ | $ | ( | ) | $ | |||||||
35 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
36 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Period Ended June 30, | ||||||||||||||||||||||||
Three Months | Six Months | Twelve Months | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||
Contribution to net income | ||||||||||||||||||||||||
Natural gas operations | $ | 3,369 | $ | 2,622 | $ | 106,758 | $ | 92,971 | $ | 152,629 | $ | 163,329 | ||||||||||||
Utility infrastructure services | 18,918 | 19,236 | 10,887 | 8,235 | 47,629 | 45,213 | ||||||||||||||||||
Corporate and administrative | (231 | ) | (307 | ) | (780 | ) | (564 | ) | (1,758 | ) | (1,231 | ) | ||||||||||||
Net income | $ | 22,056 | $ | 21,551 | $ | 116,865 | $ | 100,642 | $ | 198,500 | $ | 207,311 | ||||||||||||
Average number of common shares | 53,935 | 48,826 | 53,654 | 48,622 | 51,914 | 48,338 | ||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||
Consolidated | $ | 0.41 | $ | 0.44 | $ | 2.18 | $ | 2.07 | $ | 3.82 | $ | 4.29 | ||||||||||||
Natural Gas Operations | ||||||||||||||||||||||||
Reconciliation of Revenue to Operating Margin (Non-GAAP measure) | ||||||||||||||||||||||||
Gas operating revenues | $ | 258,711 | $ | 275,679 | $ | 779,388 | $ | 769,992 | $ | 1,367,124 | $ | 1,349,536 | ||||||||||||
Less: Net cost of gas sold | 65,182 | 83,466 | 257,786 | 269,198 | 407,976 | 407,943 | ||||||||||||||||||
Operating margin | $ | 193,529 | $ | 192,213 | $ | 521,602 | $ | 500,794 | $ | 959,148 | $ | 941,593 | ||||||||||||
• | 34,000 net new customers (1.7% growth rate) during the last 12 months |
• | Other income improved $1.4 million from returns on Company-Owned Life Insurance policies |
• | Filed for preapproval to expand service into Spring Creek, Nevada |
• | $57 million Arizona general rate case filed in May 2019 |
• | Revenues increased $59.1 million (including $56.7 million from Linetec) |
• | 2nd quarter 2018 revenues included a $9 million settlement of a water pipe replacement project contract dispute |
• | Depreciation and amortization expense includes an incremental $6 million due to the Linetec acquisition |
37 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Three Months Ended | ||||||||
June 30, | ||||||||
2019 | 2018 | |||||||
(Thousands of dollars) | ||||||||
Gas operating revenues | $ | 258,711 | $ | 275,679 | ||||
Net cost of gas sold | 65,182 | 83,466 | ||||||
Operating margin | 193,529 | 192,213 | ||||||
Operations and maintenance expense | 104,991 | 105,208 | ||||||
Depreciation and amortization | 49,343 | 47,664 | ||||||
Taxes other than income taxes | 15,126 | 14,666 | ||||||
Operating income | 24,069 | 24,675 | ||||||
Other income (deductions) | 1,592 | (2,094 | ) | |||||
Net interest deductions | 23,345 | 20,149 | ||||||
Income before income taxes | 2,316 | 2,432 | ||||||
Income tax benefit | (1,053 | ) | (190 | ) | ||||
Contribution to consolidated net income | $ | 3,369 | $ | 2,622 | ||||
38 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Six Months Ended | ||||||||
June 30, | ||||||||
2019 | 2018 | |||||||
(Thousands of dollars) | ||||||||
Gas operating revenues | $ | 779,388 | $ | 769,992 | ||||
Net cost of gas sold | 257,786 | 269,198 | ||||||
Operating margin | 521,602 | 500,794 | ||||||
Operations and maintenance expense | 210,533 | 207,398 | ||||||
Depreciation and amortization | 106,955 | 97,625 | ||||||
Taxes other than income taxes | 31,332 | 29,923 | ||||||
Operating income | 172,782 | 165,848 | ||||||
Other income (deductions) | 7,538 | (6,697 | ) | |||||
Net interest deductions | 46,444 | 39,404 | ||||||
Income before income taxes | 133,876 | 119,747 | ||||||
Income tax expense | 27,118 | 26,776 | ||||||
Contribution to consolidated net income | $ | 106,758 | $ | 92,971 | ||||
39 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Twelve Months Ended | ||||||||
June 30, | ||||||||
2019 | 2018 | |||||||
(Thousands of dollars) | ||||||||
Gas operating revenues | $ | 1,367,124 | $ | 1,349,536 | ||||
Net cost of gas sold | 407,976 | 407,943 | ||||||
Operating margin | 959,148 | 941,593 | ||||||
Operations and maintenance expense | 407,948 | 397,251 | ||||||
Depreciation and amortization | 201,146 | 192,098 | ||||||
Taxes other than income taxes | 61,307 | 58,590 | ||||||
Operating income | 288,747 | 293,654 | ||||||
Other income (deductions) | (3,005 | ) | (9,036 | ) | ||||
Net interest deductions | 88,780 | 74,936 | ||||||
Income before income taxes | 196,962 | 209,682 | ||||||
Income tax expense | 44,333 | 46,353 | ||||||
Contribution to consolidated net income | $ | 152,629 | $ | 163,329 | ||||
40 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Three Months Ended | ||||||||
June 30, | ||||||||
2019 | 2018 | |||||||
(Thousands of dollars) | ||||||||
Utility infrastructure services revenues | $ | 454,300 | $ | 395,204 | ||||
Operating expenses: | ||||||||
Utility infrastructure services expenses | 402,199 | 352,671 | ||||||
Depreciation and amortization | 20,999 | 13,643 | ||||||
Operating income | 31,102 | 28,890 | ||||||
Other income (deductions) | (477 | ) | (632 | ) | ||||
Net interest deductions | 3,457 | 3,308 | ||||||
Income before income taxes | 27,168 | 24,950 | ||||||
Income tax expense | 7,474 | 5,714 | ||||||
Net income | 19,694 | 19,236 | ||||||
Net income attributable to noncontrolling interest | 776 | — | ||||||
Contribution to consolidated net income attributable to Centuri | $ | 18,918 | $ | 19,236 | ||||
41 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Six Months Ended | ||||||||
June 30, | ||||||||
2019 | 2018 | |||||||
(Thousands of dollars) | ||||||||
Utility infrastructure services revenues | $ | 767,162 | $ | 655,221 | ||||
Operating expenses: | ||||||||
Utility infrastructure services expenses | 702,664 | 611,623 | ||||||
Depreciation and amortization | 40,926 | 26,160 | ||||||
Operating income | 23,572 | 17,438 | ||||||
Other income (deductions) | 398 | (369 | ) | |||||
Net interest deductions | 6,726 | 6,504 | ||||||
Income before income taxes | 17,244 | 10,565 | ||||||
Income tax expense | 5,006 | 3,127 | ||||||
Net income | 12,238 | 7,438 | ||||||
Net income (loss) attributable to noncontrolling interest | 1,351 | (797 | ) | |||||
Contribution to consolidated net income attributable to Centuri | $ | 10,887 | $ | 8,235 | ||||
42 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Twelve Months Ended | ||||||||
June 30, | ||||||||
2019 | 2018 | |||||||
(Thousands of dollars) | ||||||||
Utility infrastructure services revenues | $ | 1,634,226 | $ | 1,409,263 | ||||
Operating expenses: | ||||||||
Utility infrastructure services expenses | 1,478,730 | 1,296,629 | ||||||
Depreciation and amortization | 72,162 | 52,078 | ||||||
Operating income | 83,334 | 60,556 | ||||||
Other income (deductions) | 529 | (272 | ) | |||||
Net interest deductions | 14,412 | 11,357 | ||||||
Income before income taxes | 69,451 | 48,927 | ||||||
Income tax expense | 20,299 | 4,364 | ||||||
Net income | 49,152 | 44,563 | ||||||
Net income (loss) attributable to noncontrolling interest | 1,523 | (650 | ) | |||||
Contribution to consolidated net income attributable to Centuri | $ | 47,629 | $ | 45,213 | ||||
43 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
44 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
45 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
46 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
47 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
June 30, 2019 | December 31, 2018 | June 30, 2018 | ||||||||||
Arizona | $ | (87,692 | ) | $ | (72,878 | ) | $ | (9,167 | ) | |||
Northern Nevada | 9,967 | 4,928 | (4,555 | ) | ||||||||
Southern Nevada | 48,273 | (5,951 | ) | (7,364 | ) | |||||||
California | (2,041 | ) | (933 | ) | (5,279 | ) | ||||||
$ | (31,493 | ) | $ | (74,834 | ) | $ | (26,365 | ) | ||||
48 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
49 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
50 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
51 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
52 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
53 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Exhibit 4.01 | ||
Exhibit 4.02 | ||
Exhibit 4.03 | ||
Exhibit 31.01 | - | |
Exhibit 31.02 | - | |
Exhibit 32.01 | - | |
Exhibit 32.02 | - | |
Exhibit 101.INS | - | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
Exhibit 101SCH | - | XBRL Schema Document |
Exhibit 101.CAL | - | XBRL Calculation Linkbase Document |
Exhibit 101.DEF | - | XBRL Definition Linkbase Document |
Exhibit 101.LAB | - | XBRL Label Linkbase Document |
Exhibit 101.PRE | - | XBRL Presentation Linkbase Document |
54 | ||
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |
SOUTHWEST GAS CORPORATION | June 30, 2019 | |
Southwest Gas Holdings, Inc. |
(Registrant) |
/s/ LORI L. COLVIN |
Lori L. Colvin |
Vice President/Controller and Chief Accounting Officer |
Southwest Gas Corporation |
(Registrant) |
/s/ LORI L. COLVIN |
Lori L. Colvin |
Vice President/Controller and Chief Accounting Officer |
55 | ||
1. | I have reviewed this quarterly report on Form 10-Q of Southwest Gas Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ JOHN P. HESTER | |
John P. Hester | |
President and Chief Executive Officer | |
Southwest Gas Holdings, Inc. | |
1. | I have reviewed this quarterly report on Form 10-Q of Southwest Gas Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ GREGORY J. PETERSON | |
Gregory J. Peterson | |
Senior Vice President/Chief Financial Officer | |
Southwest Gas Holdings, Inc. | |
1. | I have reviewed this quarterly report on Form 10-Q of Southwest Gas Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ JOHN P. HESTER | |
John P. Hester | |
President and Chief Executive Officer | |
Southwest Gas Corporation | |
1. | I have reviewed this quarterly report on Form 10-Q of Southwest Gas Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a.) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b.) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c.) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d.) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ GREGORY J. PETERSON | |
Gregory J. Peterson | |
Senior Vice President/Chief Financial Officer | |
Southwest Gas Corporation | |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
/s/ John P. Hester | |
John P. Hester President and Chief Executive Officer | |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
/s/ Gregory J. Peterson | |
Gregory J. Peterson Senior Vice President/Chief Financial Officer | |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Southwest Gas Corporation at the dates and for the periods indicated. |
/s/ John P. Hester | |
John P. Hester President and Chief Executive Officer | |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Southwest Gas Corporation at the dates and for the periods indicated. |
/s/ Gregory J. Peterson | |
Gregory J. Peterson Senior Vice President/Chief Financial Officer | |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Common stock, par (in USD per share) | $ 1 | $ 1 |
| Common stock, authorized (in shares) | 60,000,000 | 60,000,000 |
| Common stock, issued (in shares) | 53,026,848 | |
| Common stock, outstanding (in shares) | 54,321,217 | 53,026,848 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Operating revenues: | ||||||
| Gas operating revenues | $ 258,711 | $ 275,679 | $ 779,388 | $ 769,992 | $ 1,367,124 | $ 1,349,536 |
| Utility infrastructure services revenues | 454,300 | 395,204 | 767,162 | 655,221 | 1,634,226 | 1,409,263 |
| Total operating revenues | 713,011 | 670,883 | 1,546,550 | 1,425,213 | 3,001,350 | 2,758,799 |
| Operating expenses: | ||||||
| Net cost of gas sold | 65,182 | 83,466 | 257,786 | 269,198 | 407,976 | 407,943 |
| Operations and maintenance | 105,293 | 105,435 | 211,538 | 207,786 | 410,145 | 398,051 |
| Depreciation and amortization | 70,342 | 61,307 | 147,881 | 123,785 | 273,308 | 244,176 |
| Taxes other than income taxes | 15,126 | 14,666 | 31,332 | 29,923 | 61,307 | 58,590 |
| Utility infrastructure services expenses | 402,199 | 352,671 | 702,664 | 611,623 | 1,478,730 | 1,296,629 |
| Total operating expenses | 658,142 | 617,545 | 1,351,201 | 1,242,315 | 2,631,466 | 2,405,389 |
| Operating income | 54,869 | 53,338 | 195,349 | 182,898 | 369,884 | 353,410 |
| Other income and (expenses): | ||||||
| Net interest deductions | (26,831) | (23,652) | (53,228) | (46,283) | (103,616) | (86,978) |
| Other income (deductions) | 1,146 | (2,706) | 7,985 | (7,040) | (2,401) | (9,270) |
| Total other income and (expenses) | (25,685) | (26,358) | (45,243) | (53,323) | (106,017) | (96,248) |
| Income before income taxes | 29,184 | 26,980 | 150,106 | 129,575 | 263,867 | 257,162 |
| Income tax expense (benefit) | 6,352 | 5,429 | 31,890 | 29,730 | 63,844 | 50,501 |
| Net income | 22,832 | 21,551 | 118,216 | 99,845 | 200,023 | 206,661 |
| Net income (loss) attributable to noncontrolling interests | 776 | 0 | 1,351 | (797) | 1,523 | (650) |
| Net income attributable to Southwest Gas Holdings, Inc. | $ 22,056 | $ 21,551 | $ 116,865 | $ 100,642 | $ 198,500 | $ 207,311 |
| Basic earnings per share (in USD per share) | $ 0.41 | $ 0.44 | $ 2.18 | $ 2.07 | $ 3.82 | $ 4.29 |
| Diluted earnings per share (in USD per share) | $ 0.41 | $ 0.44 | $ 2.18 | $ 2.07 | $ 3.82 | $ 4.28 |
| Average number of common shares (in shares) | 53,935 | 48,826 | 53,654 | 48,622 | 51,914 | 48,338 |
| Average shares (assuming dilution) (in shares) | 54,003 | 48,880 | 53,716 | 48,671 | 51,977 | 48,387 |
| Southwest Gas Corporation | ||||||
| Operating revenues: | ||||||
| Gas operating revenues | $ 258,711 | $ 275,679 | $ 779,388 | $ 769,992 | $ 1,367,124 | $ 1,349,536 |
| Operating expenses: | ||||||
| Net cost of gas sold | 65,182 | 83,466 | 257,786 | 269,198 | 407,976 | 407,943 |
| Operations and maintenance | 104,991 | 105,208 | 210,533 | 207,398 | 407,948 | 397,251 |
| Depreciation and amortization | 49,343 | 47,664 | 106,955 | 97,625 | 201,146 | 192,098 |
| Taxes other than income taxes | 15,126 | 14,666 | 31,332 | 29,923 | 61,307 | 58,590 |
| Total operating expenses | 234,642 | 251,004 | 606,606 | 604,144 | 1,078,377 | 1,055,882 |
| Operating income | 24,069 | 24,675 | 172,782 | 165,848 | 288,747 | 293,654 |
| Other income and (expenses): | ||||||
| Net interest deductions | (23,345) | (20,149) | (46,444) | (39,404) | (88,780) | (74,936) |
| Other income (deductions) | 1,592 | (2,094) | 7,538 | (6,697) | (3,005) | (9,036) |
| Total other income and (expenses) | (21,753) | (22,243) | (38,906) | (46,101) | (91,785) | (83,972) |
| Income before income taxes | 2,316 | 2,432 | 133,876 | 119,747 | 196,962 | 209,682 |
| Income tax expense (benefit) | (1,053) | (190) | 27,118 | 26,776 | 44,333 | 46,353 |
| Net income | 3,369 | 2,622 | 106,758 | 92,971 | 152,629 | 163,329 |
| Net income attributable to Southwest Gas Holdings, Inc. | $ 3,369 | $ 2,622 | $ 106,758 | $ 92,971 | $ 152,629 | $ 163,329 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Net income | $ 22,832 | $ 21,551 | $ 118,216 | $ 99,845 | $ 200,023 | $ 206,661 |
| Defined benefit pension plans: | ||||||
| Net actuarial gain (loss) | 0 | 0 | 0 | 0 | (15,524) | (32,701) |
| Amortization of prior service cost | 242 | 254 | 483 | 508 | 990 | 922 |
| Amortization of net actuarial loss | 4,441 | 6,387 | 8,883 | 12,774 | 21,658 | 20,662 |
| Regulatory adjustment | (4,064) | (5,744) | (8,128) | (11,490) | (2,895) | 8,212 |
| Net defined benefit pension plans | 619 | 897 | 1,238 | 1,792 | 4,229 | (2,905) |
| Forward-starting interest rate swaps (“FSIRS”): | ||||||
| Amounts reclassified into net income | 636 | 636 | 1,271 | 1,271 | 2,541 | 2,308 |
| Net forward-starting interest rate swaps | 636 | 636 | 1,271 | 1,271 | 2,541 | 2,308 |
| Foreign currency translation adjustments | 787 | (690) | 1,578 | (1,601) | 169 | (679) |
| Total other comprehensive income (loss), net of tax | 2,042 | 843 | 4,087 | 1,462 | 6,939 | (1,276) |
| Comprehensive income | 24,874 | 22,394 | 122,303 | 101,307 | 206,962 | 205,385 |
| Comprehensive income (loss) attributable to noncontrolling interests | 776 | 0 | 1,351 | (797) | 1,523 | (668) |
| Comprehensive income attributable to Southwest Gas Holdings, Inc. | 24,098 | 22,394 | 120,952 | 102,104 | 205,439 | 206,053 |
| Southwest Gas Corporation | ||||||
| Net income | 3,369 | 2,622 | 106,758 | 92,971 | 152,629 | 163,329 |
| Defined benefit pension plans: | ||||||
| Net actuarial gain (loss) | 0 | 0 | 0 | 0 | (15,524) | (32,701) |
| Amortization of prior service cost | 242 | 254 | 483 | 508 | 990 | 922 |
| Amortization of net actuarial loss | 4,441 | 6,387 | 8,883 | 12,774 | 21,658 | 20,662 |
| Regulatory adjustment | (4,064) | (5,744) | (8,128) | (11,490) | (2,895) | 8,212 |
| Net defined benefit pension plans | 619 | 897 | 1,238 | 1,792 | 4,229 | (2,905) |
| Forward-starting interest rate swaps (“FSIRS”): | ||||||
| Amounts reclassified into net income | 636 | 636 | 1,271 | 1,271 | 2,541 | 2,308 |
| Net forward-starting interest rate swaps | 636 | 636 | 1,271 | 1,271 | 2,541 | 2,308 |
| Total other comprehensive income (loss), net of tax | 1,255 | 1,533 | 2,509 | 3,063 | 6,770 | (597) |
| Comprehensive income | $ 4,624 | $ 4,155 | $ 109,267 | $ 96,034 | $ 159,399 | $ 162,732 |
Background, Organization, and Summary of Significant Accounting Policies |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Background, Organization, and Summary of Significant Accounting Policies | Note 1 – Background, Organization, and Summary of Significant Accounting Policies Nature of Operations. Southwest Gas Holdings, Inc. is a holding company, owning all of the shares of common stock of Southwest Gas Corporation (“Southwest” or the “natural gas operations” segment) and all of the shares of common stock of Centuri Group, Inc. (“Centuri,” or the “utility infrastructure services” segment). At the annual meeting of shareholders of Southwest Gas Holdings, Inc., held on May 2, 2019, shareholders voted to approve changing the state of incorporation for Southwest Gas Holdings, Inc. from California to Delaware. The reincorporation remains subject to certain regulatory approvals, which are currently pending. Southwest is engaged in the business of purchasing, distributing, and transporting natural gas for customers in portions of Arizona, Nevada, and California. Public utility rates, practices, facilities, and service territories of Southwest are subject to regulatory oversight. The timing and amount of rate relief can materially impact results of operations. Natural gas purchases and the timing of related recoveries can materially impact liquidity. Results for the natural gas operations segment are higher during winter periods due to the seasonality incorporated in its regulatory rate structures. Centuri is a comprehensive utility infrastructure services enterprise dedicated to delivering a diverse array of solutions to North America’s gas and electric providers. Centuri derives revenue from installation, replacement, repair, and maintenance of energy distribution systems, and developing industrial construction solutions. Centuri operations are generally conducted under the business names of NPL Construction Co. (“NPL”), NPL Canada Ltd. (“NPL Canada”), New England Utility Constructors, Inc. (“Neuco”) and Linetec Services, LLC (“Linetec”). Utility infrastructure services activity is seasonal in most of Centuri’s operating areas. Peak periods are the summer and fall months in colder climate areas, such as the northeastern and midwestern United States (“U.S”) and in Canada. In warmer climate areas, such as the southwestern and southeastern U.S., utility infrastructure services activity continues year round. In November 2017, Centuri acquired Neuco, thereby expanding its core services in the northeast region of the U.S. Additionally, in November 2018, Centuri expanded its operations in the southeast region of the U.S. through the acquisition of an 80% interest in Linetec. See Note 12 – Business Acquisitions for more information. Basis of Presentation. The condensed consolidated financial statements for Southwest Gas Holdings, Inc. and subsidiaries (the “Company”) and Southwest included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The year-end condensed balance sheet data was derived from audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. No substantive change has occurred with regard to the Company’s business segments on the whole, or in the primary businesses comprising those segments as a result of the foregoing acquisitions of Neuco and Linetec. The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, all adjustments, consisting of normal recurring items and estimates necessary for a fair depiction of results for the interim periods, have been made. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the 2018 Annual Report to Shareholders, which is incorporated by reference into the 2018 Form 10-K. Centuri, through its subsidiary, NPL, had historically held a 65% interest in a venture to market natural gas engine-driven heating, ventilating, and air conditioning technology and products. During the second quarter of 2018, an additional $1 million of capital was contributed by NPL, thereby increasing NPL’s ownership interest to 95%. During the second quarter of 2019, the remaining 5% ownership interest was assumed by NPL. The carrying amount of the noncontrolling interest has been adjusted with a corresponding charge to Additional paid-in capital on the Company’s Consolidated Balance Sheet. Fair Value Measurements. Certain assets and liabilities are reported at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP states that a fair value measurement should be based on the assumptions that market participants would use in pricing the asset or liability and establishes a fair value hierarchy that ranks the inputs used to measure fair value by their reliability. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to fair values derived from unobservable inputs (Level 3 measurements). Financial assets and liabilities are categorized in their entirety based on the lowest level of input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that a company has the ability to access at the measurement date. Level 2 – inputs other than quoted prices included within Level 1 that are observable for similar assets or liabilities, either directly or indirectly. Level 3 – unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The Company primarily used quoted market prices and other observable market pricing information in valuing cash and cash equivalents, derivatives, long-term debt outstanding, and assets of the qualified pension plan and postretirement benefit plans required to be recorded and/or disclosed at fair value. Other Property and Investments. Other property and investments on the Condensed Consolidated Balance Sheets includes (thousands of dollars):
Included in the table above are the net cash surrender values of company-owned life insurance (“COLI”) policies. These life insurance policies on members of management and other key employees are used by Southwest to indemnify itself against the loss of talent, expertise, and knowledge, as well as to provide indirect funding for certain nonqualified benefit plans. Cash and Cash Equivalents. For purposes of reporting consolidated cash flows, cash and cash equivalents include cash on hand and financial instruments with original maturities of three months or less. Such investments are carried at cost, which approximates market value. Cash and cash equivalents for Southwest and the Company also include money market fund investments totaling approximately $19.6 million and $23.8 million, respectively, at June 30, 2019, and $18 million and $59.9 million, respectively, at December 31, 2018, which fall within Level 2 of the fair value hierarchy, due to the asset valuation methods used by money market funds. Typical non-cash investing activities for Southwest include customer advances applied as contributions toward utility construction activity and capital expenditures that were not paid as of quarter end that are included in accounts payable. Amounts related to such activities were immaterial for the periods presented herein. Non-cash investing activities for the twelve months ended June 30, 2019 included $31.3 million of purchase consideration related to the Linetec acquisition by Centuri, in the form of liabilities incurred that remained unpaid as of June 30, 2019; such amounts are included in Other current liabilities on the Condensed Consolidated Balance Sheets of the Company. Also, see Recent Accounting Standards Updates and Note 4 – Leases for information related to right-of-use assets obtained in exchange for lease liabilities, which are non-cash investing and financing activities. Intercompany Transactions. Centuri recognizes revenues generated from contracts with Southwest (see Note 10 – Segment Information). Centuri’s accounts receivable for these services are presented in the table below (thousands of dollars):
The accounts receivable balance, revenues, and associated profits are included in the condensed consolidated financial statements of the Company and Southwest and were not eliminated during consolidation in accordance with accounting treatment for rate-regulated entities. Income Taxes. In 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted. The TCJA had significant impacts on the taxation of business entities, including specific provisions related to regulated public utilities. The more significant changes that impacted the Company and Southwest include the reduction in the corporate federal income tax rate from 35% to 21%, and limiting the utilization of net operating losses (“NOLs”) to 80% of taxable income, with the ability to indefinitely carryforward unutilized NOLs to reduce future taxable income. Prepaid and Other Current Assets. Prepaid and other current assets includes gas pipe materials and operating supplies of $62 million at June 30, 2019 and $56 million at December 31, 2018 (carried at weighted average cost), in addition to $52 million at June 30, 2019 and $74 million at December 31, 2018 related to a regulatory asset associated with the Arizona decoupling mechanism (an alternative revenue program). Goodwill. Goodwill is assessed as of October 1st each year for impairment, or more frequently, if circumstances indicate an impairment to the carrying value of goodwill may have occurred. Management of the Company and Southwest considered its reporting units and segments and determined that its segments and reporting units remain consistent between periods presented below, and that no change was necessary with regard to the level at which goodwill is assessed for impairment. No impairment was deemed to have occurred in the first six months of 2019.
(a) See Note 12 – Business Acquisitions for details regarding Linetec measurement-period adjustments. Other Current Liabilities. Other current liabilities for Southwest include $24.7 million and $23.5 million of dividends declared by Southwest Gas Corporation, but not yet paid to Southwest Gas Holdings, Inc. at June 30, 2019 and December 31, 2018, respectively. In addition, the balances in both periods include amounts payable under regulatory mechanisms in the next twelve months and miscellaneous other accrued liabilities. Other Income (Deductions). The following table provides the composition of significant items included in Other income (deductions) in the Condensed Consolidated Statements of Income (thousands of dollars):
Included in the table above is the change in cash surrender values of COLI policies (including net death benefits recognized). Current tax regulations provide for tax-free treatment of life insurance (death benefit) proceeds. Therefore, changes in the cash surrender values of COLI policies, as they progress towards the ultimate death benefits, are also recorded without tax consequences. Refer also to Note 2 – Components of Net Periodic Benefit Cost. Recent Accounting Standards Updates. Accounting pronouncements adopted in 2019: In February 2016, the Financial Accounting Standards Board (“FASB”) issued the update “Leases (Topic 842).” Under the update, lessees were required to recognize a lease liability for the obligation to make lease payments, measured on a discounted basis; and a right-of-use asset for the right to use, or control the use of, a specified asset for the lease term. The Company and Southwest adopted Topic 842 in the first quarter of 2019 through an optional transition method, which was elected, permitting the application of the provisions of the standard at the adoption date, rather than to earlier comparative periods. As a result, the Company and Southwest have not recast prior periods to reflect the adoption of this standard. See Note 4 – Leases. Accounting pronouncements that will be effective after 2019: In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 update “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The update requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The inputs currently used to estimate credit losses will still be used; however, they may be adapted to reflect the full amount of expected losses. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All entities may adopt the amendments in this update earlier as of fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is evaluating what impact, if any, this update might have on the Company’s and Southwest’s consolidated financial statements and disclosures. In January 2017, the FASB issued ASU 2017-04 “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” Currently, unless meeting the criteria for qualitative assessment only, an entity is required to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit, requiring a hypothetical purchase price allocation to measure the amount of a goodwill impairment. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. Under the update, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment. The amount of any goodwill impairment calculated under the update could vary from the calculation under existing guidance, largely due to the consideration to be given to unrecognized differences between the fair value and carrying values of the other assets and liabilities in the reporting unit under the new guidance. The amendments should be applied on a prospective basis. The update is effective for fiscal and interim periods beginning after December 15, 2019. Early adoption has been permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Management is evaluating the impacts this update might have on the Company’s and Southwest’s consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-15 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The update generally aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement (that is a service contract) with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Once capitalized, the update requires the entity to expense the amount capitalized over the term of the hosting arrangement, including reasonably certain renewal periods. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the amendments in this update is permitted for interim and related annual fiscal periods after December 15, 2018. Management is evaluating the impacts this update might have on the Company’s and Southwest’s consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-14 “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” This update removes disclosures that are no longer considered cost-beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. The update applies to all employers that sponsor defined benefit pension or other postretirement plans. The update is effective for fiscal years ending after December 15, 2020. Upon adoption, the Company and Southwest will modify their disclosures to conform to the requirements of the update. In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The update is intended to improve the effectiveness of fair value measurement disclosures and removes the following disclosure requirements: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. The update also modifies or clarifies for investments in certain entities that calculate net asset value, a requirement to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse (in cases when the timing has been communicated or announced publicly). It also clarifies communication requirements about measurement uncertainty as of the reporting date. For certain unobservable inputs, an entity may disclose other quantitative information in lieu of the weighted average if it would be a more reasonable and rational method to reflect the distribution of inputs to the measurements. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Management is evaluating the impacts this update might have on its disclosures.
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Components of Net Periodic Benefit Cost |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Net Periodic Benefit Cost | Note 2 – Components of Net Periodic Benefit Cost Southwest has a noncontributory qualified retirement plan with defined benefits covering substantially all employees and a separate unfunded supplemental retirement plan (“SERP”) which is limited to officers. Southwest also provides postretirement benefits other than pensions (“PBOP”) to its qualified retirees for health care, dental, and life insurance. The service cost component of net periodic benefit costs included in the table below are components of an overhead loading process associated with the cost of labor. The overhead process ultimately results in allocation of that portion of overall net periodic benefit costs to the same accounts to which productive labor is charged. As a result, service costs become components of various accounts, primarily operations and maintenance expense, net utility plant, and deferred charges and other assets for both the Company and Southwest. The other components of net periodic benefit cost are reflected in Other income (deductions) on the Condensed Consolidated Statements of Income of each entity.
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Revenue |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | Note 3 – Revenue The following information about the Company’s revenues is presented by segment. Southwest encompasses one segment – natural gas operations. Natural Gas Operations Segment: Gas operating revenues on the Condensed Consolidated Statements of Income of both the Company and Southwest include revenue from contracts with customers, which is shown below, disaggregated by customer type, and various categories of revenue:
(a) Comprised of various other revenue impacts, including $(1.1) million, $(2.9) million, and $(3.9) million for the three, six, and twelve months ending June 30, 2019, respectively; and, $1.6 million during the three months, and $(12.5) million in both the six and twelve months ending June 30, 2018 related to tax reform savings reserves/adjustments. Utility Infrastructure Services Segment: The following tables display Centuri’s revenue, reflected as Utility infrastructure services revenues on the Condensed Consolidated Statements of Income of the Company, representing revenue from contracts with customers disaggregated by service and contract types:
The following table provides information about contracts receivable and revenue earned on contracts in progress in excess of billings (contract asset), which are both included within Accounts receivable, net of allowances, as well as amounts billed in excess of revenue earned on contracts (contract liability), which are included in Other current liabilities as of June 30, 2019 and December 31, 2018 on the Company’s Condensed Consolidated Balance Sheets:
The revenue earned on contracts in progress in excess of billings (contract asset) primarily relates to Centuri’s rights to consideration for work completed but not billed and/or approved at the reporting date. These contract assets are transferred to contracts receivable when the rights become unconditional. The amounts billed in excess of revenue earned (contract liability) primarily relates to the advance consideration received from customers for which work has not yet been completed. The change in this contract liability balance from December 31, 2018 to June 30, 2019 is due to revenue recognized of $4.2 million that was included in this item as of January 1, 2019, after which time it became earned and the balance was reduced, and to increases due to cash received, net of revenue recognized during the period related to contracts that commenced during the period. For contracts that have an original duration of one year or less, Centuri uses the practical expedient applicable to such contracts and does not consider/compute an interest component based on the time value of money. Further, because of the short duration of these contracts, Centuri has not disclosed the transaction price for the remaining performance obligations as of the end of each reporting period or when the Company expects to recognize the revenue. As of June 30, 2019, Centuri has eighteen contracts that had an original duration of more than one year. The aggregate amount of the transaction price allocated to the unsatisfied performance obligations of these contracts as of June 30, 2019 is $64.8 million. Centuri expects to recognize the remaining performance obligations over the next three years; however, the timing of that recognition is largely within the control of the customer, including when the necessary equipment and materials required to complete the work are provided by the customer. Utility infrastructure services contracts receivable consists of the following:
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Leases |
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | Note 4 – Leases The Company and Southwest adopted FASB Topic 842 as of January 1, 2019. In association with the adoption, the Company recorded adjustments to its Condensed Consolidated Balance Sheet to record right-of-use (“ROU”) assets and lease liabilities of $58.4 million and $60.8 million, respectively. Included in those amounts, Southwest recorded $1.9 million related to both its ROU assets and lease liabilities. Neither the Company nor Southwest experienced a material impact to the Condensed Consolidated Statements of Income from the adoption and no cumulative-effect adjustment to the opening balance of retained earnings was recognized. Management elected to adopt the standard under the optional transition method (refer to Recent Accounting Standards Updates in Note 1 – Background, Organization, and Summary of Significant Accounting Policies), and elected the following Topic 842 practical expedients and accounting policy elections:
Southwest and Centuri determine if an arrangement is a lease at inception. ROU assets represent the right to use an underlying asset for the lease term; lease liabilities represent obligations to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of Southwest’s and Centuri’s leases do not provide an implicit interest rate, an incremental borrowing rate based on information available at commencement is used in determining the present value of lease payments; an implicit rate, if readily determinable, is used. Lease terms utilized in the computations may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Southwest’s leases are comprised primarily of operating leases of buildings, land, and equipment. Southwest has no finance leases and no significant short-term leases. Southwest’s leases have a remaining term of 1 to 10 years, some of which include options to extend the lease up to 3 years. Southwest is currently not a lessor in any significant lease arrangements. Southwest’s ROU assets are included in Gas plant, and its lease liabilities are included in, depending upon maturity, Other current liabilities or Other deferred credits and other long-term liabilities on the Company’s and Southwest’s Condensed Consolidated Balance Sheet as of June 30, 2019. Centuri has operating and finance leases for corporate and field offices, construction equipment, and transportation vehicles. Centuri is currently not a lessor in any significant lease arrangements. Centuri’s leases have remaining lease terms of 1 to 14 years. Some of these include options to extend the leases, generally for optional terms of up to 5 years, and some include options to terminate the leases within 1 year. Centuri’s equipment leases may include variable payment terms in addition to the fixed lease payments if machinery is used in excess of the standard work periods. These variable payments are not probable of occurring under the current operating environment and have not been included in consideration of lease payments. Due to the seasonality of Centuri’s business, expense for short-term leases will fluctuate throughout the year with higher expense incurred during the warmer months. Short-term leases of Centuri are not accounted for under the provisions of Topic 842, as permitted. Centuri’s ROU assets are included in Other property and investments, and its lease liabilities for operating and finance leases are included, depending upon maturity, in Other current liabilities or Other deferred credits and other long-term liabilities on the Company’s Condensed Consolidated Balance Sheet as of June 30, 2019. The components of lease expense were as follows:
Supplemental cash flow information related to leases for the six months ended June 30, 2019 was as follows:
Supplemental information related to leases, including location in the Condensed Consolidated Balance Sheets, is as follows:
The following are schedules of maturities of lease liabilities as of June 30, 2019:
As the Company and Southwest adopted Topic 842 using the optional transition method referred to in Note 1 – Background, Organization, and Summary of Significant Accounting Policies, the recent annual disclosure of rental and lease payments as of December 31, 2018 in accordance with Topic 840 is presented in the table below (thousands of dollars):
The following is a schedule of future minimum lease payments for operating leases (with initial or remaining terms in excess of one year) as of December 31, 2018 (thousands of dollars):
As of December 31, 2018 Centuri leased certain construction equipment under capital leases arrangements which were not significant.
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| Leases | Note 4 – Leases The Company and Southwest adopted FASB Topic 842 as of January 1, 2019. In association with the adoption, the Company recorded adjustments to its Condensed Consolidated Balance Sheet to record right-of-use (“ROU”) assets and lease liabilities of $58.4 million and $60.8 million, respectively. Included in those amounts, Southwest recorded $1.9 million related to both its ROU assets and lease liabilities. Neither the Company nor Southwest experienced a material impact to the Condensed Consolidated Statements of Income from the adoption and no cumulative-effect adjustment to the opening balance of retained earnings was recognized. Management elected to adopt the standard under the optional transition method (refer to Recent Accounting Standards Updates in Note 1 – Background, Organization, and Summary of Significant Accounting Policies), and elected the following Topic 842 practical expedients and accounting policy elections:
Southwest and Centuri determine if an arrangement is a lease at inception. ROU assets represent the right to use an underlying asset for the lease term; lease liabilities represent obligations to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of Southwest’s and Centuri’s leases do not provide an implicit interest rate, an incremental borrowing rate based on information available at commencement is used in determining the present value of lease payments; an implicit rate, if readily determinable, is used. Lease terms utilized in the computations may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Southwest’s leases are comprised primarily of operating leases of buildings, land, and equipment. Southwest has no finance leases and no significant short-term leases. Southwest’s leases have a remaining term of 1 to 10 years, some of which include options to extend the lease up to 3 years. Southwest is currently not a lessor in any significant lease arrangements. Southwest’s ROU assets are included in Gas plant, and its lease liabilities are included in, depending upon maturity, Other current liabilities or Other deferred credits and other long-term liabilities on the Company’s and Southwest’s Condensed Consolidated Balance Sheet as of June 30, 2019. Centuri has operating and finance leases for corporate and field offices, construction equipment, and transportation vehicles. Centuri is currently not a lessor in any significant lease arrangements. Centuri’s leases have remaining lease terms of 1 to 14 years. Some of these include options to extend the leases, generally for optional terms of up to 5 years, and some include options to terminate the leases within 1 year. Centuri’s equipment leases may include variable payment terms in addition to the fixed lease payments if machinery is used in excess of the standard work periods. These variable payments are not probable of occurring under the current operating environment and have not been included in consideration of lease payments. Due to the seasonality of Centuri’s business, expense for short-term leases will fluctuate throughout the year with higher expense incurred during the warmer months. Short-term leases of Centuri are not accounted for under the provisions of Topic 842, as permitted. Centuri’s ROU assets are included in Other property and investments, and its lease liabilities for operating and finance leases are included, depending upon maturity, in Other current liabilities or Other deferred credits and other long-term liabilities on the Company’s Condensed Consolidated Balance Sheet as of June 30, 2019. The components of lease expense were as follows:
Supplemental cash flow information related to leases for the six months ended June 30, 2019 was as follows:
Supplemental information related to leases, including location in the Condensed Consolidated Balance Sheets, is as follows:
The following are schedules of maturities of lease liabilities as of June 30, 2019:
As the Company and Southwest adopted Topic 842 using the optional transition method referred to in Note 1 – Background, Organization, and Summary of Significant Accounting Policies, the recent annual disclosure of rental and lease payments as of December 31, 2018 in accordance with Topic 840 is presented in the table below (thousands of dollars):
The following is a schedule of future minimum lease payments for operating leases (with initial or remaining terms in excess of one year) as of December 31, 2018 (thousands of dollars):
As of December 31, 2018 Centuri leased certain construction equipment under capital leases arrangements which were not significant.
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Derivatives |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives | Note 5 – Derivatives In managing its natural gas supply portfolios, Southwest has historically entered into fixed- and variable-price contracts, which qualify as derivatives. Additionally, Southwest utilizes fixed-for-floating swap contracts (“Swaps”) to supplement its fixed-price contracts. The fixed-price contracts, firm commitments to purchase a fixed amount of gas in the future at a fixed price, qualify for the normal purchases and normal sales exception that is allowed for contracts that are probable of delivery in the normal course of business, and are exempt from fair value reporting. The variable-price contracts qualify as derivative instruments; however, because the contract prices are the prevailing prices at the future transaction dates, the contracts have no determinable fair value. The Swap contract prices are determined at the beginning of each month to reflect that month’s published first of month index price and are recorded at fair value. Southwest does not utilize derivative financial instruments for speculative purposes, nor does it have trading operations. The fixed-price contracts and Swaps are utilized by Southwest under its volatility mitigation programs to effectively fix the price on a portion (up to 25% in the Arizona and California jurisdictions) of its natural gas supply portfolios. The maturities of the Swaps highly correlate to forecasted purchases of natural gas, with the longest maturity date of the Swaps being October 2020. Under such contracts, Southwest pays the counterparty a fixed rate and receives from the counterparty a floating rate per MMBtu (“dekatherm”) of natural gas. Only the net differential is actually paid or received. The differential is calculated based on the notional amounts under the contracts, which are detailed in the table below (thousands of dekatherms):
The following table shows the amounts Southwest paid to and received from counterparties for settlements of matured Swaps:
Pursuant to regulatory deferral accounting treatment for rate-regulated entities, unrealized gains and losses in fair value of the Swaps are recorded as a regulatory asset and/or liability. When the Swaps mature, any prior positions held are reversed and the settled position is recorded as an increase or decrease of purchased gas under the related purchase gas adjustment (“PGA”) mechanism in determining the deferred PGA balances. Neither changes in fair value nor settled amounts of Swaps have a direct effect on earnings or other comprehensive income, since following settlement, amounts are reflected in Net cost of gas sold at the same time they are included in Gas operating revenues through updates to the PGA component of rates. Previously, Southwest entered into forward-starting interest rate swaps (“FSIRS”), the settled positions for which are immaterial and continue to be amortized from Accumulated other comprehensive income (loss) into interest expense. The estimated fair value of Southwest’s Swaps were determined at June 30, 2019 and December 31, 2018 using futures settlement prices for the delivery of natural gas at Henry Hub adjusted by the price of future settlement bases, which reflect the difference between the price of natural gas at a given delivery basin and the Henry Hub pricing points. These Level 2 inputs are observable in the marketplace throughout the full term of the Swaps and have been credit-risk adjusted with no significant impact to the overall fair value measurement. The following table sets forth the fair value of the Swaps and their location in the Condensed Consolidated Balance Sheets for both the Company and Southwest (thousands of dollars). It also sets forth the location of regulatory assets or liabilities offsetting, dollar-for-dollar, the fair value of the Swaps (pursuant to Southwest’s rate-regulation): Fair values of derivatives not designated as hedging instruments:
Master netting arrangements exist with each counterparty that provide for the net settlement (in the settlement month) of all contracts through a single payment. As applicable, management has elected to reflect the net amounts in its balance sheets. There was no outstanding collateral associated with the Swaps during either period shown in the above table.
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||
| Common Stock | Note 6 – Common Stock Only shares of the Company’s common stock are publicly traded on the New York Stock Exchange, under the ticker symbol “SWX.” Share-based compensation related to Southwest is based on stock awards of Southwest Gas Corporation to be issued in shares of Southwest Gas Holdings, Inc. On May 8, 2019, the Company filed with the SEC an automatic shelf registration statement on Form S-3 (File No. 333-231297), which became effective upon filing, for the offer and sale of up to $300 million of common stock from time to time in at-the-market offerings under the prospectus included therein and in accordance with the Sales Agency Agreement, dated May 8, 2019, between the Company and BNY Mellon Capital Markets, LLC (the “Equity Shelf Program”). The following table provides the activity under the Equity Shelf Program for the quarter and life-to-date ended June 30, 2019:
As of June 30, 2019, the Company had up to $225,000,229 of common stock available for sale under the program. Net proceeds from the sales of shares of common stock under the Equity Shelf Program are intended for general corporate purposes, including the acquisition of property for the construction, completion, extension or improvement of pipeline systems and facilities located in and around the communities served by Southwest. Net proceeds during the six months ended June 30, 2019 were contributed to, and reflected in the records of, Southwest (as a capital contribution from Southwest Gas Holdings, Inc.). During the quarter ended March 31, 2019, the Company sold approximately 278,000 shares of common stock under a previously effective equity shelf program. Those issuances reflected the remaining shares available under that previous program. During the six months ended June 30, 2019, the Company issued approximately 76,000 shares of common stock through the Restricted Stock/Unit Plan and Management Incentive Plan. Also during the six months ended June 30, 2019, the Company issued 67,000 shares of common stock through the Dividend Reinvestment and Stock Purchase Plan (“DRSPP”), raising approximately $5.5 million. On May 2, 2019, at the Company’s annual meeting of shareholders, the Company’s shareholders approved an amendment to the Company’s Articles of Incorporation to increase the number of shares of common stock available for issuance from 60,000,000 to 120,000,000. However, the Company has not filed such amendment to its Articles of Incorporation as it intends to cause such increase in availability of shares of common stock to take effect in connection with the Delaware reincorporation.
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Long-Term Debt |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt | Note 7 – Long-Term Debt Long-term debt is recognized in the Company’s and Southwest’s balance sheets generally at the carrying value of the obligations outstanding. However, details surrounding the fair value and individual carrying values of instruments are discussed below or provided in the table that follows. Southwest believes its revolving credit facility (including commercial paper) and the variable-rate Industrial Development Revenue Bonds (“IDRBs”) approximate their carrying values. The revolving credit facility and IDRBs are categorized as Level 1 due to Southwest’s ability to access similar debt arrangements at measurement dates with comparable terms, including variable/market rates. Additionally, the revolving credit facility is generally repaid quickly and the IDRBs have interest rates that reset frequently. The fair values of Southwest’s debentures (which includes senior and medium-term notes) were determined utilizing a market-based valuation approach, where fair values are determined based on evaluated pricing data, such as broker quotes and yields for similar securities adjusted for observable differences. Significant inputs used in the valuation generally include benchmark yield curves, credit ratings, and issuer spreads. The external credit rating, coupon rate, and maturity of each security are considered in the valuation, as applicable. The fair values of debentures are categorized as Level 2 (observable market inputs based on market prices of similar securities). The Centuri secured revolving credit and term loan facility and Centuri’s other debt obligations (not actively traded) are categorized as Level 3, based on significant unobservable inputs to their fair values. Because Centuri’s debt is not publicly traded, fair values for the secured revolving credit and term loan facility and other debt obligations were based on a conventional discounted cash flow methodology and utilized current market pricing yield curves, across Centuri’s debt maturity spectrum, of other industrial bonds with an assumed credit rating comparable to the Company’s.
Southwest has a $400 million credit facility that is scheduled to expire in March 2022. Southwest designates $150 million of capacity related to the facility as long-term debt and has designated the remaining $250 million for working capital purposes. Interest rates for the credit facility are calculated at either the London Interbank Offered Rate (“LIBOR”) or an “alternate base rate,” plus in each case an applicable margin that is determined based on Southwest’s senior unsecured debt rating. At June 30, 2019, the applicable margin is 1% for loans bearing interest with reference to LIBOR and 0% for loans bearing interest with reference to the alternative base rate. At June 30, 2019, $46 million was outstanding on the long-term portion (including $0 under the commercial paper program, discussed below) and no borrowings were outstanding on the short-term portion of this credit facility (see Note 8 – Short-Term Debt). Southwest has a $50 million commercial paper program. Any issuance under the commercial paper program is supported by Southwest’s current revolving credit facility and, therefore, does not represent additional borrowing capacity under the credit facility. Borrowings under the commercial paper program are designated as long-term debt. Interest rates for the program are calculated at the then current commercial paper rate. At June 30, 2019, as noted above, no borrowings were outstanding under the commercial paper program. In May 2019, Southwest issued $300 million in 4.15% Senior Notes at a discount of 0.051%. The notes will mature in June 2049. The net proceeds were used to repay a portion of amounts then outstanding under its credit facility and commercial paper program. In November 2018, Centuri, in association with the acquisition of Linetec, amended and restated its senior secured revolving credit and term loan facility, increasing the capacity from $450 million to $590 million; the amended facility is scheduled to expire in November 2023. This facility includes a revolving credit facility and a term loan facility. The line of credit portion of the facility is $325 million; amounts borrowed and repaid under the revolving credit facility are available to be re-borrowed. The term loan facility portion has a limit of approximately $265 million. The $590 million revolving credit and term loan facility is secured by substantially all of Centuri’s assets except those explicitly excluded under the terms of the agreement (including owned real estate and certain certificated vehicles). Centuri’s assets securing the facility at June 30, 2019 totaled $1.3 billion. At June 30, 2019, $341 million in borrowings were outstanding under the Centuri facility. It is currently anticipated that LIBOR may be discontinued as a benchmark or reference rate after 2021. As of June 30, 2019, no borrowings were outstanding for the holding company under its credit facility (see Note 8 – Short-Term Debt), and therefore, there was no related indebtedness with reference to LIBOR. However, all of Southwest’s outstanding borrowings of $46 million noted above under its credit facility and approximately $215 million of Centuri’s indebtedness under its facility have interest rates with reference to LIBOR and credit facility maturity dates that extend beyond 2021. The outstanding amounts reflect approximately 2% of total Southwest long-term debt and 11% of long-term debt (including current maturities) for the Company overall. The Company intends to continue to monitor developments with respect to alternative rates and take appropriate steps, that will include Southwest and Centuri working with lenders to determine the appropriate alternative reference rate for variable rate indebtedness, in order to mitigate the impact of the discontinuation on financial condition and results of operations. However, at this time the Company and Southwest can provide no assurances as to the impact a LIBOR discontinuation will have on their financial condition or results of operations. Any alternative rate may be less predictable or less attractive than LIBOR.
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Short-Term Debt |
6 Months Ended |
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Jun. 30, 2019 | |
| Debt Disclosure [Abstract] | |
| Short-Term Debt | Note 8 – Short-Term Debt Southwest Gas Holdings, Inc. has a $100 million credit facility that is scheduled to expire in March 2022. There were no borrowings outstanding under this credit facility at June 30, 2019. As discussed in Note 7 – Long-Term Debt, Southwest has a $400 million credit facility that is scheduled to expire in March 2022, of which $250 million has been designated by management for working capital purposes. Southwest had no short-term borrowings outstanding at June 30, 2019 under this facility.
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Other Comprehensive Income and Accumulated Other Comprehensive Income |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Comprehensive Income and Accumulated Other Comprehensive Income | Note 9 – Other Comprehensive Income and Accumulated Other Comprehensive Income The following information provides insight into amounts impacting the Company’s Other comprehensive income (loss), both before and after-tax impacts, within the Condensed Consolidated Statements of Comprehensive Income, which also impact Accumulated other comprehensive income (“AOCI”) in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Equity. See Note 5 – Derivatives for additional information on the FSIRS. Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss) (Thousands of dollars)
Approximately $2.5 million of realized losses (net of tax) related to the FSIRS, reported in Accumulated other comprehensive income (loss) at June 30, 2019, will be reclassified into interest expense within the next 12 months as the related interest payments on long-term debt occur. The following table represents a rollforward of AOCI, presented on the Company’s Condensed Consolidated Balance Sheets (thousands of dollars):
The following table represents a rollforward of AOCI, presented on Southwest’s Condensed Consolidated Balance Sheets (thousands of dollars):
The following table represents amounts (before income tax impacts) included in AOCI (in the tables above), that have not yet been recognized in net periodic benefit cost (thousands of dollars):
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Segment Information |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Information | Note 10 – Segment Information The Company has two reportable segments: natural gas operations and utility infrastructure services. Southwest has a single reportable segment that is referred to herein as the natural gas operations segment of the Company. In order to reconcile to net income as disclosed in the Condensed Consolidated Statements of Income, an Other column is included associated with impacts of corporate and administrative activities related to Southwest Gas Holdings, Inc. The following tables present revenues from external customers, intersegment revenues, and segment net income for the two reportable segments (thousands of dollars):
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Redeemable Noncontrolling Interests |
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| Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||
| Redeemable Noncontrolling Interests | Note 11 – Redeemable Noncontrolling Interest In connection with the acquisition of Linetec in November 2018, the previous owner retained a 20% equity interest in Linetec, the reduction of which is subject to certain rights based on the passage of time or upon the occurrence of certain triggering events. Effective January 2022, the Company has the right, but not the obligation, to purchase at fair value (subject to a floor) a portion of the interest held by the noncontrolling party, and in incremental amounts each year thereafter. The shares subject to the election accumulate (if earlier elections are not made) such that 100% of the interest retained by the noncontrolling party is subject to the election beginning in 2024. If the Company does not exercise its rights at each or any of the specified intervals, the noncontrolling party has the ability, but not the obligation, to exit their investment retained by requiring Centuri to purchase a similar portion of their interest up to the maximum cumulative amounts specified at each interval discussed above. The Company has determined that this noncontrolling interest is a redeemable noncontrolling interest and, in accordance with SEC guidance, is classified as mezzanine equity (temporary equity) in the Company’s Condensed Consolidated Balance Sheets. Significant changes in the value of the redeemable noncontrolling interest, above a floor established at the acquisition date, are recognized as they occur, and the carrying value is adjusted as necessary at each reporting date. The fair value is estimated using a market approach that utilizes certain financial metrics from guideline public companies of similar industry and operating characteristics. However, the carrying value of the redeemable noncontrolling interest was greater than its fair value as of June 30, 2019, and no previous upward redemption value adjustments were made following the acquisition date. SEC guidance indicates that a redemption value adjustment would not be made under these circumstances. The following depicts the change to the balance of the redeemable noncontrolling interest:
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Business Acquisitions |
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| Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Acquisitions | Note 12 – Business Acquisitions In November 2018, the Company, through its subsidiaries, led principally by Centuri, completed the acquisition of an 80% interest in a privately held infrastructure services business, Linetec, with the remaining 20% retained by the seller. See the Company’s 2018 Form 10-K for additional information about this acquisition. Assets acquired and liabilities assumed in the transaction were recorded, generally, at their acquisition date fair values. Transaction costs associated with the acquisition were expensed as incurred. The Company’s allocation of the purchase price was based on an evaluation of the appropriate fair values and represented management’s best estimate based on available data (including market data, data regarding customers of the acquired business, terms of acquisition-related agreements, analysis of historical and projected results, and other types of data). The analysis included consideration of types of intangibles that were acquired, including customer relationships, trade names, and customer contracts. Certain payments were estimated as of the acquisition date and will be adjusted when paid or as estimates change based on available data; the final purchase accounting has not yet been completed. Further refinement is expected to occur, including potential changes to income taxes and intangibles, as well as additional consideration payments held back. Subsequent to the acquisition date and through June 30, 2019, Centuri recorded a net reduction to the overall purchase price of $20.1 million related to the combined effects of a mutual tax election under Internal Revenue Code Section 338(h)(10), working capital adjustments, and other refinements to the valuation, which impacted the remaining unremitted consideration. In addition, approximately $19.5 million of previously unremitted consideration was paid during the three months ending June 30, 2019. As of that date, remaining unpaid consideration was $31.3 million. The preliminary estimated fair values of assets acquired and liabilities assumed as of November 30, 2018, are as follows (millions of dollars):
The Company incurred and expensed acquisition costs of $6.9 million for the twelve months ended June 30, 2019 which are included in Utility infrastructure services expenses on the Company’s Condensed Consolidated Statement of Income. No acquisition-related costs were incurred during the three and six months ended June 30, 2019, and no significant impacts to earnings resulted from the measurement-period adjustments reflected above. The preliminary allocation of the purchase price of Linetec was accounted for in accordance with applicable accounting guidance. Goodwill consists of the value associated with the assembled workforce, consolidation of operations, and the estimated economic value attributable to future opportunities related to the transaction. As the business of Linetec was deemed an asset purchase for tax purposes, the tax-basis goodwill is expected to be deductible for tax purposes. During 2019, values at the acquisition date were adjusted, as reflected in the table above, on the Company’s Condensed Consolidated Balance Sheets.
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Background, Organization, and Summary of Significant Accounting Policies (Policies) |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Nature of Operations | Nature of Operations. Southwest Gas Holdings, Inc. is a holding company, owning all of the shares of common stock of Southwest Gas Corporation (“Southwest” or the “natural gas operations” segment) and all of the shares of common stock of Centuri Group, Inc. (“Centuri,” or the “utility infrastructure services” segment). At the annual meeting of shareholders of Southwest Gas Holdings, Inc., held on May 2, 2019, shareholders voted to approve changing the state of incorporation for Southwest Gas Holdings, Inc. from California to Delaware. The reincorporation remains subject to certain regulatory approvals, which are currently pending. Southwest is engaged in the business of purchasing, distributing, and transporting natural gas for customers in portions of Arizona, Nevada, and California. Public utility rates, practices, facilities, and service territories of Southwest are subject to regulatory oversight. The timing and amount of rate relief can materially impact results of operations. Natural gas purchases and the timing of related recoveries can materially impact liquidity. Results for the natural gas operations segment are higher during winter periods due to the seasonality incorporated in its regulatory rate structures. Centuri is a comprehensive utility infrastructure services enterprise dedicated to delivering a diverse array of solutions to North America’s gas and electric providers. Centuri derives revenue from installation, replacement, repair, and maintenance of energy distribution systems, and developing industrial construction solutions. Centuri operations are generally conducted under the business names of NPL Construction Co. (“NPL”), NPL Canada Ltd. (“NPL Canada”), New England Utility Constructors, Inc. (“Neuco”) and Linetec Services, LLC (“Linetec”). Utility infrastructure services activity is seasonal in most of Centuri’s operating areas. Peak periods are the summer and fall months in colder climate areas, such as the northeastern and midwestern United States (“U.S”) and in Canada. In warmer climate areas, such as the southwestern and southeastern U.S., utility infrastructure services activity continues year round. In November 2017, Centuri acquired Neuco, thereby expanding its core services in the northeast region of the U.S. Additionally, in November 2018, Centuri expanded its operations in the southeast region of the U.S. through the acquisition of an 80% interest in Linetec. See Note 12 – Business Acquisitions for more information.
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| Basis of Presentation | Basis of Presentation. The condensed consolidated financial statements for Southwest Gas Holdings, Inc. and subsidiaries (the “Company”) and Southwest included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The year-end condensed balance sheet data was derived from audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. No substantive change has occurred with regard to the Company’s business segments on the whole, or in the primary businesses comprising those segments as a result of the foregoing acquisitions of Neuco and Linetec. The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, all adjustments, consisting of normal recurring items and estimates necessary for a fair depiction of results for the interim periods, have been made. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the 2018 Annual Report to Shareholders, which is incorporated by reference into the 2018 Form 10-K.
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| Fair Value Measurements | Fair Value Measurements. Certain assets and liabilities are reported at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP states that a fair value measurement should be based on the assumptions that market participants would use in pricing the asset or liability and establishes a fair value hierarchy that ranks the inputs used to measure fair value by their reliability. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to fair values derived from unobservable inputs (Level 3 measurements). Financial assets and liabilities are categorized in their entirety based on the lowest level of input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that a company has the ability to access at the measurement date. Level 2 – inputs other than quoted prices included within Level 1 that are observable for similar assets or liabilities, either directly or indirectly. Level 3 – unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The Company primarily used quoted market prices and other observable market pricing information in valuing cash and cash equivalents, derivatives, long-term debt outstanding, and assets of the qualified pension plan and postretirement benefit plans required to be recorded and/or disclosed at fair value.
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| Cash and Cash Equivalents | Cash and Cash Equivalents. For purposes of reporting consolidated cash flows, cash and cash equivalents include cash on hand and financial instruments with original maturities of three months or less. Such investments are carried at cost, which approximates market value. Cash and cash equivalents for Southwest and the Company also include money market fund investments totaling approximately $19.6 million and $23.8 million, respectively, at June 30, 2019, and $18 million and $59.9 million, respectively, at December 31, 2018, which fall within Level 2 of the fair value hierarchy, due to the asset valuation methods used by money market funds. Typical non-cash investing activities for Southwest include customer advances applied as contributions toward utility construction activity and capital expenditures that were not paid as of quarter end that are included in accounts payable. Amounts related to such activities were immaterial for the periods presented herein. Non-cash investing activities for the twelve months ended June 30, 2019 included $31.3 million of purchase consideration related to the Linetec acquisition by Centuri, in the form of liabilities incurred that remained unpaid as of June 30, 2019; such amounts are included in Other current liabilities on the Condensed Consolidated Balance Sheets of the Company.
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| Income Taxes | Income Taxes. In 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted. The TCJA had significant impacts on the taxation of business entities, including specific provisions related to regulated public utilities. The more significant changes that impacted the Company and Southwest include the reduction in the corporate federal income tax rate from 35% to 21%, and limiting the utilization of net operating losses (“NOLs”) to 80% of taxable income, with the ability to indefinitely carryforward unutilized NOLs to reduce future taxable income.
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| Goodwill | Goodwill. Goodwill is assessed as of October 1st each year for impairment, or more frequently, if circumstances indicate an impairment to the carrying value of goodwill may have occurred. Management of the Company and Southwest considered its reporting units and segments and determined that its segments and reporting units remain consistent between periods presented below, and that no change was necessary with regard to the level at which goodwill is assessed for impairment. |
| Recent Accounting Standards Updates | Recent Accounting Standards Updates. Accounting pronouncements adopted in 2019: In February 2016, the Financial Accounting Standards Board (“FASB”) issued the update “Leases (Topic 842).” Under the update, lessees were required to recognize a lease liability for the obligation to make lease payments, measured on a discounted basis; and a right-of-use asset for the right to use, or control the use of, a specified asset for the lease term. The Company and Southwest adopted Topic 842 in the first quarter of 2019 through an optional transition method, which was elected, permitting the application of the provisions of the standard at the adoption date, rather than to earlier comparative periods. As a result, the Company and Southwest have not recast prior periods to reflect the adoption of this standard. See Note 4 – Leases. Accounting pronouncements that will be effective after 2019: In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 update “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The update requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The inputs currently used to estimate credit losses will still be used; however, they may be adapted to reflect the full amount of expected losses. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All entities may adopt the amendments in this update earlier as of fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is evaluating what impact, if any, this update might have on the Company’s and Southwest’s consolidated financial statements and disclosures. In January 2017, the FASB issued ASU 2017-04 “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” Currently, unless meeting the criteria for qualitative assessment only, an entity is required to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit, requiring a hypothetical purchase price allocation to measure the amount of a goodwill impairment. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. Under the update, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment. The amount of any goodwill impairment calculated under the update could vary from the calculation under existing guidance, largely due to the consideration to be given to unrecognized differences between the fair value and carrying values of the other assets and liabilities in the reporting unit under the new guidance. The amendments should be applied on a prospective basis. The update is effective for fiscal and interim periods beginning after December 15, 2019. Early adoption has been permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Management is evaluating the impacts this update might have on the Company’s and Southwest’s consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-15 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The update generally aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement (that is a service contract) with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Once capitalized, the update requires the entity to expense the amount capitalized over the term of the hosting arrangement, including reasonably certain renewal periods. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the amendments in this update is permitted for interim and related annual fiscal periods after December 15, 2018. Management is evaluating the impacts this update might have on the Company’s and Southwest’s consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-14 “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” This update removes disclosures that are no longer considered cost-beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. The update applies to all employers that sponsor defined benefit pension or other postretirement plans. The update is effective for fiscal years ending after December 15, 2020. Upon adoption, the Company and Southwest will modify their disclosures to conform to the requirements of the update. In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The update is intended to improve the effectiveness of fair value measurement disclosures and removes the following disclosure requirements: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. The update also modifies or clarifies for investments in certain entities that calculate net asset value, a requirement to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse (in cases when the timing has been communicated or announced publicly). It also clarifies communication requirements about measurement uncertainty as of the reporting date. For certain unobservable inputs, an entity may disclose other quantitative information in lieu of the weighted average if it would be a more reasonable and rational method to reflect the distribution of inputs to the measurements. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Management is evaluating the impacts this update might have on its disclosures.
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Background, Organization, and Summary of Significant Accounting Policies (Tables) |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Other Property and Investments | Other Property and Investments. Other property and investments on the Condensed Consolidated Balance Sheets includes (thousands of dollars):
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| Accounts Receivable for Services | Centuri’s accounts receivable for these services are presented in the table below (thousands of dollars):
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| Schedule of Goodwill |
(a) See Note 12 – Business Acquisitions for details regarding Linetec measurement-period adjustments.
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| Other Income (Deductions) | Other Income (Deductions). The following table provides the composition of significant items included in Other income (deductions) in the Condensed Consolidated Statements of Income (thousands of dollars):
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Components of Net Periodic Benefit Cost (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Net Periodic Benefit Costs | The service cost component of net periodic benefit costs included in the table below are components of an overhead loading process associated with the cost of labor. The overhead process ultimately results in allocation of that portion of overall net periodic benefit costs to the same accounts to which productive labor is charged. As a result, service costs become components of various accounts, primarily operations and maintenance expense, net utility plant, and deferred charges and other assets for both the Company and Southwest. The other components of net periodic benefit cost are reflected in Other income (deductions) on the Condensed Consolidated Statements of Income of each entity.
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Revenue (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Revenue Disaggregated by Service Type and Contract Type | The following tables display Centuri’s revenue, reflected as Utility infrastructure services revenues on the Condensed Consolidated Statements of Income of the Company, representing revenue from contracts with customers disaggregated by service and contract types:
Gas operating revenues on the Condensed Consolidated Statements of Income of both the Company and Southwest include revenue from contracts with customers, which is shown below, disaggregated by customer type, and various categories of revenue:
(a) Comprised of various other revenue impacts, including $(1.1) million, $(2.9) million, and $(3.9) million for the three, six, and twelve months ending June 30, 2019, respectively; and, $1.6 million during the three months, and $(12.5) million in both the six and twelve months ending June 30, 2018 related to tax reform savings reserves/adjustments.
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| Summary of Information about Receivables, Revenue Earned on Contracts in Progress in Excess of Billings, Which are Included Within Accounts Receivable, Net of Allowances, and Amounts Billed in Excess of Revenue Earned on Contracts | The following table provides information about contracts receivable and revenue earned on contracts in progress in excess of billings (contract asset), which are both included within Accounts receivable, net of allowances, as well as amounts billed in excess of revenue earned on contracts (contract liability), which are included in Other current liabilities as of June 30, 2019 and December 31, 2018 on the Company’s Condensed Consolidated Balance Sheets:
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| Schedule of Construction Services Contracts Receivable | Utility infrastructure services contracts receivable consists of the following:
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Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Lease Expense, and Supplemental Cash Flow Information Related to Leases | The components of lease expense were as follows:
Supplemental cash flow information related to leases for the six months ended June 30, 2019 was as follows:
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| Supplemental Information Related to Leases Included in Balance Sheet | Supplemental information related to leases, including location in the Condensed Consolidated Balance Sheets, is as follows:
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| Schedule of Maturities of Operating Lease Liabilities | The following are schedules of maturities of lease liabilities as of June 30, 2019:
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| Schedule of Maturities of Finance Lease Liabilities | The following are schedules of maturities of lease liabilities as of June 30, 2019:
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| Schedule of Rental and Lease Payments | As the Company and Southwest adopted Topic 842 using the optional transition method referred to in Note 1 – Background, Organization, and Summary of Significant Accounting Policies, the recent annual disclosure of rental and lease payments as of December 31, 2018 in accordance with Topic 840 is presented in the table below (thousands of dollars):
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| Schedule of Future Minimum Rental Payments for Operating Leases | The following is a schedule of future minimum lease payments for operating leases (with initial or remaining terms in excess of one year) as of December 31, 2018 (thousands of dollars):
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Derivatives (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notional Amounts under Swaps Contracts | The differential is calculated based on the notional amounts under the contracts, which are detailed in the table below (thousands of dekatherms):
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| Paid to and Received from Counterparties for Settlements of Matured Swaps | The following table shows the amounts Southwest paid to and received from counterparties for settlements of matured Swaps:
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| Fair Values of Swaps in Consolidated Balance Sheets | Fair values of derivatives not designated as hedging instruments:
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Common Stock (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||
| Schedule of Common Stock Activity | The following table provides the activity under the Equity Shelf Program for the quarter and life-to-date ended June 30, 2019:
|
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Long-Term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Carrying Amounts and Estimated Fair Values of Long-Term Debt | The Centuri secured revolving credit and term loan facility and Centuri’s other debt obligations (not actively traded) are categorized as Level 3, based on significant unobservable inputs to their fair values. Because Centuri’s debt is not publicly traded, fair values for the secured revolving credit and term loan facility and other debt obligations were based on a conventional discounted cash flow methodology and utilized current market pricing yield curves, across Centuri’s debt maturity spectrum, of other industrial bonds with an assumed credit rating comparable to the Company’s.
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Other Comprehensive Income and Accumulated Other Comprehensive Income (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss) | Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss) (Thousands of dollars)
(1) Tax amounts are calculated using a 24% rate following the December 22, 2017 enactment date of U.S. tax reform. For periods prior to the enactment date (and included in specific line items of the tables for the twelve months ended June 30, 2018), tax amounts were calculated using a 38% rate. The tax effect of before-tax amounts remaining in the balance of Accumulated other comprehensive income (loss) as of June 30, 2019 is effectively computed using a 24% tax rate overall. With regard to foreign currency translation adjustments, the Company has elected to indefinitely reinvest the earnings of Centuri’s Canadian subsidiaries in Canada, thus preventing deferred taxes on such earnings. As a result of this assertion, and no repatriation of earnings anticipated, the Company is not recognizing a tax effect or presenting a tax expense or benefit for currency translation adjustments reported in Other comprehensive income (loss).
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| Rollforward of Accumulated Other Comprehensive Income | The following table represents a rollforward of AOCI, presented on the Company’s Condensed Consolidated Balance Sheets (thousands of dollars):
The following table represents a rollforward of AOCI, presented on Southwest’s Condensed Consolidated Balance Sheets (thousands of dollars):
(10) The beginning balances depict amounts attributable to the individual components of AOCI (Defined Benefit Plans and FSIRS) following the adoption of ASU No. 2018-02, with no impact to the total balance of AOCI resulting from the depiction.
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| Amount Recognized Before Income Tax in Accumulated Other Comprehensive Income | The following table represents amounts (before income tax impacts) included in AOCI (in the tables above), that have not yet been recognized in net periodic benefit cost (thousands of dollars):
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Segment Reporting Information | The following tables present revenues from external customers, intersegment revenues, and segment net income for the two reportable segments (thousands of dollars):
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Redeemable Noncontrolling Interests (Tables) |
6 Months Ended | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||
| Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||
| Summary of Redeemable Noncontrolling Interest | The following depicts the change to the balance of the redeemable noncontrolling interest:
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Business Acquisitions (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Fair Values of Assets Acquired and Liabilities Assumed | The preliminary estimated fair values of assets acquired and liabilities assumed as of November 30, 2018, are as follows (millions of dollars):
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Background, Organization, and Summary of Significant Accounting Policies - Schedule of Other Property and Investments (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Investment [Line Items] | ||
| Other property | $ 15,004 | $ 14,153 |
| Total | 761,652 | 623,551 |
| Southwest Gas Corporation | ||
| Investment [Line Items] | ||
| Net cash surrender value of COLI policies | 125,491 | 114,405 |
| Other property | 1,720 | 1,741 |
| Total | 127,211 | 116,146 |
| Centuri | ||
| Investment [Line Items] | ||
| Centuri property, equipment, and intangibles | 952,120 | 792,191 |
| Centuri accumulated depreciation/amortization | $ (332,683) | $ (298,939) |
Background, Organization, and Summary of Significant Accounting Policies - Accounts Receivable for Services (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Centuri | ||
| Segment Reporting Information [Line Items] | ||
| Centuri accounts receivable for services provided to Southwest | $ 19,260 | $ 18,830 |
Background, Organization, and Summary of Significant Accounting Policies- Other Income (Deductions) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Other income (deductions) | ||||||
| Total other income (deductions) | $ 1,146 | $ (2,706) | $ 7,985 | $ (7,040) | $ (2,401) | $ (9,270) |
| Southwest Gas Corporation | ||||||
| Other income (deductions) | ||||||
| Total other income (deductions) | 1,592 | (2,094) | 7,538 | (6,697) | (3,005) | (9,036) |
| Operating Segments | Natural Gas Operations | Southwest Gas Corporation | ||||||
| Other income (deductions) | ||||||
| Change in COLI policies | 3,400 | 2,000 | 11,000 | 1,300 | 6,500 | 6,900 |
| Interest income | 1,822 | 1,377 | 3,419 | 2,795 | 6,644 | 4,401 |
| Equity AFUDC | 1,007 | 357 | 1,967 | 586 | 5,008 | 1,773 |
| Other components of net periodic benefit cost | (3,765) | (5,264) | (7,530) | (10,529) | (18,060) | (20,241) |
| Miscellaneous income and (expense) | (872) | (564) | (1,318) | (849) | (3,097) | (1,869) |
| Total other income (deductions) | 1,592 | (2,094) | 7,538 | (6,697) | (3,005) | (9,036) |
| Operating Segments | Utility Infrastructure Services | Centuri | ||||||
| Other income (deductions) | ||||||
| Interest income | 0 | 1 | 0 | 2 | 86 | 4 |
| Foreign transaction gain (loss) | 21 | 202 | 552 | 349 | (19) | (207) |
| Miscellaneous income and (expense) | (498) | (835) | (154) | (720) | 462 | (69) |
| Total other income (deductions) | (477) | (632) | 398 | (369) | 529 | (272) |
| Corporate and administrative | ||||||
| Other income (deductions) | ||||||
| Total other income (deductions) | $ 31 | $ 20 | $ 49 | $ 26 | $ 75 | $ 38 |
Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Qualified Retirement Plan | ||||||
| Defined Benefit Plan Disclosure [Line Items] | ||||||
| Service cost | $ 6,466 | $ 7,139 | $ 12,932 | $ 14,278 | $ 27,209 | $ 25,974 |
| Interest cost | 12,251 | 11,044 | 24,503 | 22,087 | 46,590 | 45,129 |
| Expected return on plan assets | (15,061) | (14,688) | (30,122) | (29,377) | (59,500) | (56,975) |
| Amortization of net actuarial loss | 5,589 | 8,028 | 11,178 | 16,057 | 27,236 | 28,059 |
| Net periodic benefit cost | 9,245 | 11,523 | 18,491 | 23,045 | 41,535 | 42,187 |
| SERP | ||||||
| Defined Benefit Plan Disclosure [Line Items] | ||||||
| Service cost | 67 | 61 | 133 | 122 | 256 | 276 |
| Interest cost | 440 | 414 | 880 | 829 | 1,709 | 1,770 |
| Amortization of net actuarial loss | 255 | 376 | 510 | 751 | 1,261 | 1,472 |
| Net periodic benefit cost | 762 | 851 | 1,523 | 1,702 | 3,226 | 3,518 |
| PBOP | ||||||
| Defined Benefit Plan Disclosure [Line Items] | ||||||
| Service cost | 319 | 369 | 638 | 737 | 1,374 | 1,471 |
| Interest cost | 762 | 687 | 1,524 | 1,374 | 2,898 | 2,990 |
| Expected return on plan assets | (789) | (930) | (1,578) | (1,860) | (3,436) | (3,539) |
| Amortization of prior service costs | 318 | 334 | 635 | 668 | 1,302 | 1,335 |
| Net periodic benefit cost | $ 610 | $ 460 | $ 1,219 | $ 919 | $ 2,138 | $ 2,257 |
Revenue - Additional Information (Detail) $ in Millions |
6 Months Ended |
|---|---|
|
Jun. 30, 2019
USD ($)
Segment
Contract
| |
| Southwest Gas Corporation | |
| Segment Reporting Information [Line Items] | |
| Number of operating segment | Segment | 1 |
| Centuri | |
| Segment Reporting Information [Line Items] | |
| Change in contract liability, revenue recognized | $ | $ 4.2 |
| Number of contracts with original duration more than one year | Contract | 18 |
Revenue - Revenue Performance Obligation (Details) - Centuri - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 $ in Millions |
Jun. 30, 2019
USD ($)
|
|---|---|
| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
| Transaction price allocated to unsatisfied performance obligations of contracts | $ 64.8 |
| Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 years |
Revenue - Schedule of Gas Operating Revenue (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Disaggregation of Revenue [Line Items] | ||||||
| Revenue from contracts with customers | $ 253,408 | $ 261,699 | $ 805,588 | $ 740,257 | $ 1,371,305 | $ 1,289,256 |
| Alternative revenue program revenues (deferrals) | 3,392 | 10,393 | (31,153) | 37,602 | (22,776) | 67,046 |
| Other revenues | 1,911 | 3,587 | 4,953 | (7,867) | 18,595 | (6,766) |
| Total Gas operating revenues | 258,711 | 275,679 | 779,388 | 769,992 | 1,367,124 | 1,349,536 |
| Tax Reform Savings Revenue Adjustments | ||||||
| Disaggregation of Revenue [Line Items] | ||||||
| Other revenues | (1,100) | 1,600 | (2,900) | (12,500) | (3,900) | (12,500) |
| Residential | ||||||
| Disaggregation of Revenue [Line Items] | ||||||
| Revenue from contracts with customers | 164,873 | 166,702 | 582,101 | 511,313 | 958,008 | 867,338 |
| Small commercial | ||||||
| Disaggregation of Revenue [Line Items] | ||||||
| Revenue from contracts with customers | 50,184 | 55,653 | 139,794 | 143,596 | 251,281 | 254,966 |
| Large commercial | ||||||
| Disaggregation of Revenue [Line Items] | ||||||
| Revenue from contracts with customers | 11,123 | 13,134 | 25,085 | 28,574 | 49,703 | 54,577 |
| Industrial/other | ||||||
| Disaggregation of Revenue [Line Items] | ||||||
| Revenue from contracts with customers | 5,413 | 5,491 | 11,891 | 12,001 | 23,379 | 23,533 |
| Transportation | ||||||
| Disaggregation of Revenue [Line Items] | ||||||
| Revenue from contracts with customers | $ 21,815 | $ 20,719 | $ 46,717 | $ 44,773 | $ 88,934 | $ 88,842 |
Revenue - Summary of Information about Receivables (Detail) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
| Revenue from Contract with Customer [Abstract] | ||
| Contracts receivable, net | $ 205,571 | $ 186,249 |
| Revenue earned on contracts in progress in excess of billings | 118,529 | 87,520 |
| Amounts billed in excess of revenue earned on contracts | $ 6,786 | $ 4,211 |
Revenue - Schedule of Construction Services Contracts Receivable (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Revenue from Contract with Customer [Abstract] | ||
| Billed on completed contracts and contracts in progress | $ 207,057 | $ 184,100 |
| Other receivables | 1,863 | 2,588 |
| Contracts receivable, gross | 208,920 | 186,688 |
| Allowance for doubtful accounts | (3,349) | (439) |
| Contracts receivable, net | $ 205,571 | $ 186,249 |
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
| Lessee, Lease, Description [Line Items] | ||
| Total lease cost | $ 7,045 | $ 12,873 |
| Southwest Gas Corporation | ||
| Lessee, Lease, Description [Line Items] | ||
| Operating lease cost | 409 | 815 |
| Centuri | ||
| Lessee, Lease, Description [Line Items] | ||
| Operating lease cost | 3,238 | 6,043 |
| Amortization of ROU assets | 34 | 69 |
| Interest on lease liabilities | 7 | 14 |
| Total finance lease cost | 41 | 83 |
| Short-term lease cost | $ 3,357 | $ 5,932 |
Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
|---|---|
| Finance leases | |
| Total | $ 708 |
| Centuri | |
| Operating leases | |
| 2020 | 10,714 |
| 2021 | 9,551 |
| 2022 | 8,736 |
| 2023 | 7,548 |
| 2024 | 5,992 |
| Thereafter | 34,239 |
| Total lease payments | 76,780 |
| Less imputed interest | 13,630 |
| Total | 63,150 |
| Finance leases | |
| 2020 | 349 |
| 2021 | 157 |
| 2022 | 168 |
| 2023 | 72 |
| 2024 | 35 |
| Thereafter | 0 |
| Total lease payments | 781 |
| Less imputed interest | 73 |
| Total | 708 |
| Southwest Gas Corporation | |
| Operating leases | |
| 2020 | 1,018 |
| 2021 | 534 |
| 2022 | 213 |
| 2023 | 102 |
| 2024 | 78 |
| Thereafter | 287 |
| Total lease payments | 2,232 |
| Less imputed interest | 135 |
| Total | $ 2,097 |
Leases - Schedule of Rental and Lease Payments (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
| Lessee, Lease, Description [Line Items] | ||
| Rental payments/lease expense | $ 64,047 | $ 67,236 |
| Southwest Gas Corporation | ||
| Lessee, Lease, Description [Line Items] | ||
| Rental payments/lease expense | 4,556 | 4,926 |
| Centuri | ||
| Lessee, Lease, Description [Line Items] | ||
| Rental payments/lease expense | $ 59,491 | $ 62,310 |
Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
|---|---|
| Lessee, Lease, Description [Line Items] | |
| 2019 | $ 10,951 |
| 2020 | 8,019 |
| 2021 | 6,059 |
| 2022 | 5,326 |
| 2023 | 3,760 |
| Thereafter | 10,688 |
| Total minimum lease payments | 44,803 |
| Southwest Gas Corporation | |
| Lessee, Lease, Description [Line Items] | |
| 2019 | 898 |
| 2020 | 363 |
| 2021 | 299 |
| 2022 | 163 |
| 2023 | 79 |
| Thereafter | 177 |
| Total minimum lease payments | 1,979 |
| Centuri | |
| Lessee, Lease, Description [Line Items] | |
| 2019 | 10,053 |
| 2020 | 7,656 |
| 2021 | 5,760 |
| 2022 | 5,163 |
| 2023 | 3,681 |
| Thereafter | 10,511 |
| Total minimum lease payments | $ 42,824 |
Derivatives - Additional Information (Detail) - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
| Derivative [Line Items] | ||
| Derivative collateral outstanding | $ 0 | $ 0 |
| Arizona | ||
| Derivative [Line Items] | ||
| Natural gas portfolios, maximum % rate | 25.00% | |
| California | ||
| Derivative [Line Items] | ||
| Natural gas portfolios, maximum % rate | 25.00% |
Derivatives - Notional Amounts under Swaps Contracts (Detail) - MMBTU MMBTU in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
| Contract notional amounts | 17,309 | 13,387 |
Derivatives - Paid to and Received from Counterparties for Settlements of Matured Swaps (Detail) - Southwest Gas Corporation - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended |
|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Jun. 30, 2019 |
|
| Derivative [Line Items] | |||
| Paid to counterparties | $ 4,265 | $ 6,147 | $ 8,997 |
| Received from counterparties | $ 0 | $ 1,047 | $ 1,647 |
Short-Term Debt (Detail) - USD ($) |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Short-term Debt [Line Items] | ||
| Short term borrowings outstanding | $ 0 | $ 152,000,000 |
| Southwest Gas Corporation | ||
| Short-term Debt [Line Items] | ||
| Short term borrowings outstanding | 0 | $ 152,000,000 |
| Southwest Gas Corporation | $100 Million Credit Facility | ||
| Short-term Debt [Line Items] | ||
| Credit facility maximum borrowing capacity | 100,000,000 | |
| Short term borrowings outstanding | 0 | |
| Southwest Gas Corporation | $400 Million Credit Facility | ||
| Short-term Debt [Line Items] | ||
| Credit facility maximum borrowing capacity | 400,000,000 | |
| Short term borrowings outstanding | 0 | |
| Line of credit designated for working capital purposes | $ 250,000,000 |
Other Comprehensive Income and Accumulated Other Comprehensive Income - Additional Information (Detail) $ in Millions |
Jun. 30, 2019
USD ($)
|
|---|---|
| Equity [Abstract] | |
| Amount of FSIRS existing AOCI losses expected to reclassified income in next twelve months | $ 2.5 |
Other Comprehensive Income and Accumulated Other Comprehensive Income - Amounts Recognized Before Tax, Defined Benefit Plans (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Equity [Abstract] | ||
| Net actuarial (loss) gain | $ (423,676) | $ (435,364) |
| Prior service cost | (2,398) | (3,033) |
| Less: amount recognized in regulatory assets | 372,475 | 383,170 |
| Recognized in AOCI | $ (53,599) | $ (55,227) |
Segment Information - Additional Information (Detail) |
6 Months Ended |
|---|---|
|
Jun. 30, 2019
Segment
| |
| Segment Reporting [Abstract] | |
| Number of segments | 2 |
Redeemable Noncontrolling Interests - Additional Information (Detail) |
Jun. 30, 2019 |
Nov. 30, 2018 |
|---|---|---|
| Noncontrolling Interest [Line Items] | ||
| Percentage of interest retained by noncontrolling party subject to election | 100.00% | |
| Linetec | ||
| Noncontrolling Interest [Line Items] | ||
| Ownership percentage by noncontrolling owners | 20.00% |
Redeemable Noncontrolling Interests - Summary of Redeemable Noncontrolling Interest (Detail) $ in Thousands |
6 Months Ended |
|---|---|
|
Jun. 30, 2019
USD ($)
| |
| Movement In Redeemable Noncontrolling Interest [Roll Forward] | |
| Balance, December 31, 2018 | $ 81,831 |
| Net income attributable to redeemable noncontrolling interest | 1,351 |
| Balance, June 30, 2019 | $ 83,182 |
Business Acquisitions - Narrative (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | |
|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Jun. 30, 2019 |
Jun. 30, 2019 |
Nov. 30, 2018 |
|
| Linetec | |||||
| Business Acquisition [Line Items] | |||||
| Ownership percentage by noncontrolling owners | 20.00% | ||||
| Linetec | |||||
| Business Acquisition [Line Items] | |||||
| Reduction to purchase price | $ 20,100,000 | ||||
| Payments to acquisition | $ 19,500,000 | ||||
| Remaining unpaid consideration | 31,300,000 | $ 31,300,000 | $ 31,300,000 | $ 31,300,000 | |
| Acquisition costs | $ 0 | $ 0 | $ 6,900,000 | ||
| Centuri | Linetec | |||||
| Business Acquisition [Line Items] | |||||
| Percentage of voting interests acquired | 80.00% |