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 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
2 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
March 31, 2023 | December 31, 2022 | |||||||||||||
ASSETS | ||||||||||||||
Regulated operations plant: | ||||||||||||||
Gas plant | $ | $ | ||||||||||||
Less: accumulated depreciation | ( | ( | ||||||||||||
Construction work in progress | ||||||||||||||
Net regulated operations plant | ||||||||||||||
Other property and investments, net | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Accounts receivable, net of allowances | ||||||||||||||
Accrued utility revenue | ||||||||||||||
Income taxes receivable, net | ||||||||||||||
Deferred purchased gas costs | ||||||||||||||
Prepaid and other current assets | ||||||||||||||
Current assets held for sale | ||||||||||||||
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, $ | $ | $ | ||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive loss, net | ( | ( | ||||||||||||
Retained earnings | ||||||||||||||
Total equity | ||||||||||||||
Redeemable noncontrolling interests | ||||||||||||||
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, net | ||||||||||||||
Accrued general taxes | ||||||||||||||
Accrued interest | ||||||||||||||
Other current liabilities | ||||||||||||||
Current liabilities held for sale | ||||||||||||||
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 | $ | $ |
3 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Three Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||||
Regulated operations 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 | ||||||||||||||||||||||||||
Goodwill impairment and loss on sale | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Operating income (loss) | ( | |||||||||||||||||||||||||
Other income and (expenses): | ||||||||||||||||||||||||||
Net interest deductions | ( | ( | ( | ( | ||||||||||||||||||||||
Other income (deductions) | ( | |||||||||||||||||||||||||
Total other income and (expenses) | ( | ( | ( | ( | ||||||||||||||||||||||
Income (loss) before income taxes | ( | |||||||||||||||||||||||||
Income tax expense (benefit) | ( | |||||||||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||||||||
Net income attributable to noncontrolling interests | ||||||||||||||||||||||||||
Net income (loss) attributable to Southwest Gas Holdings, Inc. | $ | $ | $ | ( | $ | |||||||||||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||||||||
Basic | $ | $ | $ | ( | $ | |||||||||||||||||||||
Diluted | $ | $ | $ | ( | $ | |||||||||||||||||||||
Weighted average shares: | ||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Diluted |
4 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Three Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income (loss) | $ | $ | $ | ( | $ | |||||||||||||||||||||
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, net of tax | ||||||||||||||||||||||||||
Comprehensive income (loss) | ( | |||||||||||||||||||||||||
Comprehensive income attributable to noncontrolling interests | ||||||||||||||||||||||||||
Comprehensive income (loss) attributable to Southwest Gas Holdings, Inc. | $ | $ | $ | ( | $ |
5 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Three Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||||||
Net income (loss) | $ | $ | $ | ( | $ | |||||||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Impairment of assets and other charges | ||||||||||||||||||||||||||
Deferred income taxes | ( | |||||||||||||||||||||||||
Gains on sale of property and equipment | ( | ( | ( | ( | ||||||||||||||||||||||
Changes in undistributed stock compensation | ||||||||||||||||||||||||||
Equity AFUDC | ( | ( | ( | |||||||||||||||||||||||
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 deferred charges and other assets | ( | ( | ( | |||||||||||||||||||||||
Changes in other liabilities and deferred credits | ( | ( | ( | ( | ||||||||||||||||||||||
Net cash provided by (used in) operating activities | ( | |||||||||||||||||||||||||
CASH FLOW FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||||
Construction expenditures and property additions | ( | ( | ( | ( | ||||||||||||||||||||||
Acquisition of businesses, net of cash acquired | ( | ( | ||||||||||||||||||||||||
Proceeds from the sale of business, net of cash sold | ||||||||||||||||||||||||||
Changes in customer advances | ( | |||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Net cash provided by (used in) investing activities | ( | ( | ||||||||||||||||||||||||
CASH FLOW FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||||
Issuance of common stock, net | ||||||||||||||||||||||||||
Centuri distribution to redeemable noncontrolling interest | ( | ( | ||||||||||||||||||||||||
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 | ( | ( | ( | ( | ||||||||||||||||||||||
Issuance of short-term debt | ||||||||||||||||||||||||||
Withholding remittance - share-based compensation | ( | ( | ( | ( | ||||||||||||||||||||||
Other, including principal payments on finance leases | ( | ( | ( | ( | ||||||||||||||||||||||
Net cash provided by (used in) financing activities | ( | ( | ||||||||||||||||||||||||
Effects of currency translation on cash and cash equivalents | ( | |||||||||||||||||||||||||
Change in cash and cash equivalents | ( | ( | ||||||||||||||||||||||||
Cash and cash equivalents included in current assets held for sale at beginning of period | ||||||||||||||||||||||||||
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, net | $ | $ | $ | $ |
6 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | ||||||||||||||||
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 | |||||||||||||||||
Ending balances | |||||||||||||||||
Accumulated other comprehensive loss | |||||||||||||||||
Beginning balances | ( | ( | |||||||||||||||
Foreign currency exchange translation adjustment | |||||||||||||||||
Net actuarial gain arising during period, less amortization of unamortized benefit plan cost, net of tax | |||||||||||||||||
FSIRS amounts reclassified to net income, net of tax | |||||||||||||||||
Ending balances | ( | ( | |||||||||||||||
Retained earnings | |||||||||||||||||
Beginning balances | |||||||||||||||||
Net income | |||||||||||||||||
Dividends declared | ( | ( | |||||||||||||||
Redemption value adjustments | ( | ||||||||||||||||
Ending balances | |||||||||||||||||
Total equity ending balances | $ | $ | |||||||||||||||
Dividends declared per common share | $ | $ |
7 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
March 31, 2023 | December 31, 2022 | |||||||||||||
ASSETS | ||||||||||||||
Regulated operations plant: | ||||||||||||||
Gas plant | $ | $ | ||||||||||||
Less: accumulated depreciation | ( | ( | ||||||||||||
Construction work in progress | ||||||||||||||
Net regulated operations plant | ||||||||||||||
Other property and investments, net | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Accounts receivable, net of allowance | ||||||||||||||
Accrued utility revenue | ||||||||||||||
Income taxes receivable, net | ||||||||||||||
Deferred purchased gas costs | ||||||||||||||
Receivable from parent | ||||||||||||||
Prepaid and other current assets | ||||||||||||||
Current assets held for sale | ||||||||||||||
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 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 | ||||||||||||||
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 | March 31, 2023 |
Three Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Regulated operations 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 before income taxes | ||||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ |
9 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Three Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive income, 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 (loss) | ||||||||||||||||||||||||||
Net forward-starting interest rate swaps | ||||||||||||||||||||||||||
Total other comprehensive income, net of tax | ||||||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
10 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Three Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Deferred income taxes | ||||||||||||||||||||||||||
Gain on sale of property | ( | ( | ||||||||||||||||||||||||
Changes in undistributed stock compensation | ||||||||||||||||||||||||||
Equity AFUDC | ( | |||||||||||||||||||||||||
Changes in current assets and liabilities: | ||||||||||||||||||||||||||
Accounts receivable, net of allowance | ( | ( | ( | ( | ||||||||||||||||||||||
Accrued utility revenue | ( | ( | ||||||||||||||||||||||||
Deferred purchased gas costs | ( | ( | ( | ( | ||||||||||||||||||||||
Accounts payable | ( | ( | ||||||||||||||||||||||||
Accrued taxes | ( | |||||||||||||||||||||||||
Other current assets and liabilities | ( | |||||||||||||||||||||||||
Changes in deferred charges and other assets | ( | ( | ( | ( | ||||||||||||||||||||||
Changes in other liabilities and deferred credits | ( | ( | ( | ( | ||||||||||||||||||||||
Net cash provided by (used in) operating activities | ( | ( | ||||||||||||||||||||||||
CASH FLOW FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||||
Construction expenditures and property additions | ( | ( | ( | ( | ||||||||||||||||||||||
Changes in customer advances | ( | |||||||||||||||||||||||||
Other | ( | ( | ||||||||||||||||||||||||
Net cash used in investing activities | ( | ( | ( | ( | ||||||||||||||||||||||
CASH FLOW FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||||
Contributions from parent | ||||||||||||||||||||||||||
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 | ( | ( | ( | |||||||||||||||||||||||
Issuance of 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), net | $ | $ | $ | $ | ( |
11 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Three Months Ended March 31, | ||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||
Common stock shares | ||||||||||||||||||||
Beginning and ending balances | ||||||||||||||||||||
Common stock amount | ||||||||||||||||||||
Beginning and ending balances | $ | $ | ||||||||||||||||||
Additional paid-in capital | ||||||||||||||||||||
Beginning balances | ||||||||||||||||||||
Share-based compensation | ||||||||||||||||||||
Ending balances | ||||||||||||||||||||
Accumulated other comprehensive loss | ||||||||||||||||||||
Beginning balances | ( | ( | ||||||||||||||||||
Net actuarial gain arising during period, less amortization of unamortized benefit plan cost, net of tax | ||||||||||||||||||||
FSIRS amounts reclassified to net income, net of tax | ||||||||||||||||||||
Ending balances | ( | ( | ||||||||||||||||||
Retained earnings | ||||||||||||||||||||
Beginning balances | ||||||||||||||||||||
Net income | ||||||||||||||||||||
Share-based compensation | ( | ( | ||||||||||||||||||
Dividends declared to Southwest Gas Holdings, Inc. | ( | ( | ||||||||||||||||||
Ending balances | ||||||||||||||||||||
Total Southwest Gas Corporation equity ending balances | $ | $ |
12 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
13 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
(Thousands of dollars) | March 31, 2023 | December 31, 2022 | |||||||||
Net cash surrender value of COLI policies | $ | $ | |||||||||
Other property | |||||||||||
Total Southwest Gas Corporation | |||||||||||
Non-regulated property, equipment, and intangibles | |||||||||||
Non-regulated accumulated provision for depreciation and amortization | ( | ( | |||||||||
Other property and investments | |||||||||||
Total Southwest Gas Holdings, Inc. | $ | $ |
14 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
(Thousands of dollars) | Natural Gas Distribution | Utility Infrastructure Services | Total Company | |||||||||||||||||
December 31, 2022 | $ | $ | $ | |||||||||||||||||
Foreign currency translation adjustment | ||||||||||||||||||||
March 31, 2023 | $ | $ | $ |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||||||||
(Thousands of dollars) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Southwest Gas Corporation: | |||||||||||||||||||||||
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) | ( | ||||||||||||||||||||||
Centuri, MountainWest, and Southwest Gas Holdings, Inc.: | |||||||||||||||||||||||
Foreign transaction gain (loss) | ( | ( | |||||||||||||||||||||
Equity AFUDC | |||||||||||||||||||||||
Equity in earnings of unconsolidated investments | |||||||||||||||||||||||
Miscellaneous income and (expense) | ( | ( | ( | ||||||||||||||||||||
Corporate and administrative | ( | ( | |||||||||||||||||||||
Southwest Gas Holdings, Inc. - total other income (deductions) | $ | $ | $ | $ | ( |
15 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
(Thousands of dollars): | Linetec | Drum | Total | |||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | |||||||||||||||||
Net income attributable to redeemable noncontrolling interests | ||||||||||||||||||||
Redemption value adjustments | ||||||||||||||||||||
Redemption of equity interest from noncontrolling party | ( | ( | ||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ |
Three Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Weighted average basic shares | ||||||||||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||
Restricted stock units (1)(2) | ||||||||||||||||||||||||||
Weighted average diluted shares |
16 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
17 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Qualified Retirement Plan | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
Three Months | Twelve Months | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(Thousands of dollars) | |||||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
Amortization of net actuarial loss | |||||||||||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ | |||||||||||||||||||
SERP | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
Three Months | Twelve Months | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(Thousands of dollars) | |||||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Amortization of net actuarial loss | |||||||||||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ | |||||||||||||||||||
PBOP | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
Three Months | Twelve Months | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(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 | March 31, 2023 |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||||||||
(Thousands of dollars) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Residential | $ | $ | $ | $ | |||||||||||||||||||
Small commercial | |||||||||||||||||||||||
Large commercial | |||||||||||||||||||||||
Industrial/other | |||||||||||||||||||||||
Transportation | |||||||||||||||||||||||
Revenue from contracts with customers | |||||||||||||||||||||||
Alternative revenue program revenues (deferrals) | ( | ( | ( | ||||||||||||||||||||
Other revenues (1) | |||||||||||||||||||||||
Total Regulated operations revenues | $ | $ | $ | $ |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||||||||
(Thousands of dollars) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Service Types: | |||||||||||||||||||||||
Gas infrastructure services | $ | $ | $ | $ | |||||||||||||||||||
Electric power infrastructure services | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total Utility infrastructure services revenues | $ | $ | $ | $ |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||||||||
(Thousands of dollars) | 2023 | 2022 * | 2023 | 2022* | |||||||||||||||||||
Contract Types: | |||||||||||||||||||||||
Master services agreement | $ | $ | $ | $ | |||||||||||||||||||
Bid contract | |||||||||||||||||||||||
Total Utility infrastructure services revenues | $ | $ | $ | $ | |||||||||||||||||||
Unit price contracts | $ | $ | $ | $ | |||||||||||||||||||
Fixed price contracts | |||||||||||||||||||||||
Time and materials contracts | |||||||||||||||||||||||
Total Utility infrastructure services revenues | $ | $ | $ | $ |
19 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
(Thousands of dollars) | March 31, 2023 | December 31, 2022 | |||||||||
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) | March 31, 2023 | December 31, 2022 | |||||||||
Billed on completed contracts and contracts in progress | $ | $ | |||||||||
Other receivables | |||||||||||
Contracts receivable, gross | |||||||||||
Allowance for doubtful accounts | ( | ( | |||||||||
Contracts receivable, net | $ | $ |
Three Months Ended March 31, | |||||||||||
(Thousands of dollars) | 2023 | 2022 | |||||||||
Regulated gas transportation and storage revenues | $ | $ | |||||||||
NGL revenues | |||||||||||
Other revenues | |||||||||||
Revenue from contracts with customers | |||||||||||
Other revenues | |||||||||||
Total Regulated operations revenues | $ | $ |
20 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Gross proceeds | $ | |||||||
Less: agent commissions | ( | |||||||
Net proceeds | $ | |||||||
Number of shares sold | ||||||||
Weighted average price per share | $ |
21 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||||||
(Thousands of dollars) | ||||||||||||||||||||||||||
Southwest Gas Corporation: | ||||||||||||||||||||||||||
Debentures: | ||||||||||||||||||||||||||
Notes, | $ | $ | $ | $ | ||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Medium-term notes, | ||||||||||||||||||||||||||
Medium-term notes, | ||||||||||||||||||||||||||
Unamortized discount and debt issuance costs | ( | ( | ||||||||||||||||||||||||
Revolving credit facility and commercial paper | ||||||||||||||||||||||||||
Industrial development revenue 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 | ||||||||||||||||||||||||||
Southwest Gas Corporation total long-term debt, less current maturities | $ | $ | ||||||||||||||||||||||||
Southwest Gas Holdings, Inc.: | ||||||||||||||||||||||||||
Centuri secured term loan facility | $ | $ | $ | $ | ||||||||||||||||||||||
Centuri secured revolving credit facility | ||||||||||||||||||||||||||
Other debt obligations | ||||||||||||||||||||||||||
Unamortized discount and debt issuance costs | ( | ( | ||||||||||||||||||||||||
Less: current maturities | ( | ( | ||||||||||||||||||||||||
Southwest Gas Holdings, Inc. total long-term debt, less current maturities | $ | $ |
22 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
23 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||
(Thousands of dollars) | 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 (loss) | ( | ( | ||||||||||||||||||||||||||||||||||||
FSIRS (designated hedging activities): | ||||||||||||||||||||||||||||||||||||||
Amounts reclassified into net income | ( | |||||||||||||||||||||||||||||||||||||
FSIRS other comprehensive income (loss) | ( | |||||||||||||||||||||||||||||||||||||
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. | $ | $ | ( | $ | $ | $ | ( | $ |
Twelve Months Ended March 31, 2023 | Twelve Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||
(Thousands of dollars) | 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 (loss) | ( | |||||||||||||||||||||||||||||||||||||
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. | $ | $ | ( | $ | $ | $ | ( | $ |
24 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2023 |
Defined Benefit Plans | Foreign Currency Items | |||||||||||||||||||||||||||||||||||||||||||
(Thousands of dollars) | Before-Tax | Tax (Expense) Benefit (3) | After-Tax | Before-Tax | Tax (Expense) Benefit | After-Tax | AOCI | |||||||||||||||||||||||||||||||||||||
Beginning Balance AOCI December 31, 2022 | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
Translation adjustments | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Amortization of prior service cost (1) | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Amortization of net actuarial loss (1) | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Regulatory adjustment (2) | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Net current period other comprehensive income (loss) attributable to Southwest Gas Holdings, Inc. | ( | — | ||||||||||||||||||||||||||||||||||||||||||
Ending Balance AOCI March 31, 2023 | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( |
Defined Benefit Plans | ||||||||||||||||||||
(Thousands of dollars) | Before-Tax | Tax (Expense) Benefit (6) | After-Tax | |||||||||||||||||
Beginning Balance AOCI December 31, 2022 | $ | ( | $ | $ | ( | |||||||||||||||
Amortization of prior service cost (4) | ( | |||||||||||||||||||
Amortization of net actuarial loss (4) | ( | |||||||||||||||||||
Regulatory adjustment (5) | ( | ( | ||||||||||||||||||
Net current period other comprehensive income attributable to Southwest Gas Corporation | ( | |||||||||||||||||||
Ending Balance AOCI March 31, 2023 | $ | ( | $ | $ | ( |
(Thousands of dollars) | March 31, 2023 | December 31, 2022 | ||||||||||||
Net actuarial loss | $ | ( | $ | ( | ||||||||||
Prior service cost | ( | ( | ||||||||||||
Less: amount recognized in regulatory assets | ||||||||||||||
Recognized in AOCI | $ | ( | $ | ( |
25 |
(Thousands of dollars) | March 31, 2023 | December 31, 2022 | |||||||||
Centuri accounts receivable for services provided to Southwest | $ | $ |
(Thousands of dollars) | Natural Gas Distribution | Utility Infrastructure Services | Pipeline and Storage | Other | Total | ||||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Intersegment revenues | — | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Segment net income (loss) | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||
Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Intersegment revenues | — | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Segment net income (loss) | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||
(Thousands of dollars) | Natural Gas Distribution | Utility Infrastructure Services | Pipeline and Storage | Other | Total | ||||||||||||||||||||||||
Twelve Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Intersegment revenues | — | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Segment net income (loss) | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Twelve Months Ended March 31, 2022 | |||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Intersegment revenues | — | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Segment net income (loss) | $ | $ | $ | $ | ( | $ |
26 |
27 |
28 |
29 |
Period Ended March 31, | ||||||||||||||||||||||||||
Three Months | Twelve Months | |||||||||||||||||||||||||
(In thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Contribution to net income (loss) | ||||||||||||||||||||||||||
Natural gas distribution | $ | 134,696 | $ | 111,795 | $ | 177,281 | $ | 180,215 | ||||||||||||||||||
Utility infrastructure services | (11,872) | (23,486) | 13,679 | 17,793 | ||||||||||||||||||||||
Pipeline and storage | (16,288) | 16,930 | (316,951) | 16,930 | ||||||||||||||||||||||
Corporate and administrative | (60,625) | (9,061) | (127,566) | (35,274) | ||||||||||||||||||||||
Net income (loss) | $ | 45,911 | $ | 96,178 | $ | (253,557) | $ | 179,664 | ||||||||||||||||||
Weighted average common shares | 68,265 | 60,737 | 67,413 | 59,919 | ||||||||||||||||||||||
Basic earnings (loss) per share | ||||||||||||||||||||||||||
Consolidated | $ | 0.67 | $ | 1.58 | $ | (3.76) | $ | 3.00 | ||||||||||||||||||
Natural Gas Distribution | ||||||||||||||||||||||||||
Reconciliation of Gross Margin to Operating Margin (Non-GAAP measure) | ||||||||||||||||||||||||||
Utility Gross Margin | $ | 259,364 | $ | 233,882 | $ | 597,222 | $ | 571,051 | ||||||||||||||||||
Plus: | ||||||||||||||||||||||||||
Operations and maintenance (excluding Admin. & General) expense | 79,696 | 73,422 | 317,344 | 276,525 | ||||||||||||||||||||||
Depreciation and amortization expense | 74,650 | 72,114 | 265,579 | 256,814 | ||||||||||||||||||||||
Operating margin | $ | 413,710 | $ | 379,418 | $ | 1,180,145 | $ | 1,104,390 |
30 |
Three Months Ended March 31, | ||||||||||||||
(Thousands of dollars) | 2023 | 2022 | ||||||||||||
Regulated operations revenues | $ | 914,879 | $ | 676,539 | ||||||||||
Net cost of gas sold | 501,169 | 297,121 | ||||||||||||
Operating margin | 413,710 | 379,418 | ||||||||||||
Operations and maintenance expense | 131,188 | 119,636 | ||||||||||||
Depreciation and amortization | 74,650 | 72,114 | ||||||||||||
Taxes other than income taxes | 22,740 | 21,652 | ||||||||||||
Operating income | 185,132 | 166,016 | ||||||||||||
Other income (deductions) | 18,443 | 1,315 | ||||||||||||
Net interest deductions | (38,622) | (26,610) | ||||||||||||
Income before income taxes | 164,953 | 140,721 | ||||||||||||
Income tax expense | 30,257 | 28,926 | ||||||||||||
Contribution to consolidated results | $ | 134,696 | $ | 111,795 |
31 |
Twelve Months Ended March 31, | ||||||||||||||
(Thousands of dollars) | 2023 | 2022 | ||||||||||||
Regulated operations revenues | $ | 2,173,409 | $ | 1,676,397 | ||||||||||
Net cost of gas sold | 993,264 | 572,007 | ||||||||||||
Operating margin | 1,180,145 | 1,104,390 | ||||||||||||
Operations and maintenance expense | 503,480 | 452,051 | ||||||||||||
Depreciation and amortization | 265,579 | 256,814 | ||||||||||||
Taxes other than income taxes | 84,285 | 81,308 | ||||||||||||
Operating income | 326,801 | 314,217 | ||||||||||||
Other income (deductions) | 10,244 | (3,794) | ||||||||||||
Net interest deductions | (127,892) | (102,004) | ||||||||||||
Income before income taxes | 209,153 | 208,419 | ||||||||||||
Income tax expense | 31,872 | 28,204 | ||||||||||||
Contribution to consolidated results | $ | 177,281 | $ | 180,215 |
32 |
Three Months Ended March 31, | ||||||||||||||
(Thousands of dollars) | 2023 | 2022 | ||||||||||||
Utility infrastructure services revenues | $ | 653,293 | $ | 523,877 | ||||||||||
Operating expenses: | ||||||||||||||
Utility infrastructure services expenses | 603,680 | 503,232 | ||||||||||||
Depreciation and amortization | 37,870 | 37,612 | ||||||||||||
Operating income (loss) | 11,743 | (16,967) | ||||||||||||
Other income (deductions) | (680) | (486) | ||||||||||||
Net interest deductions | 22,376 | 11,131 | ||||||||||||
Loss before income taxes | (11,313) | (28,584) | ||||||||||||
Income tax benefit | (1,180) | (6,170) | ||||||||||||
Net loss | (10,133) | (22,414) | ||||||||||||
Net income attributable to noncontrolling interests | 1,739 | 1,072 | ||||||||||||
Contribution to consolidated results | $ | (11,872) | $ | (23,486) |
33 |
Twelve Months Ended March 31, | ||||||||||||||
(Thousands of dollars) | 2023 | 2022 | ||||||||||||
Utility infrastructure services revenues | $ | 2,889,743 | $ | 2,318,563 | ||||||||||
Operating expenses: | ||||||||||||||
Utility infrastructure services expenses | 2,629,766 | 2,123,085 | ||||||||||||
Depreciation and amortization | 155,611 | 130,511 | ||||||||||||
Operating income | 104,366 | 64,967 | ||||||||||||
Other income (deductions) | (1,081) | 683 | ||||||||||||
Net interest deductions | 72,616 | 30,508 | ||||||||||||
Income before income taxes | 30,669 | 35,142 | ||||||||||||
Income tax expense | 10,717 | 11,406 | ||||||||||||
Net income | 19,952 | 23,736 | ||||||||||||
Net income attributable to noncontrolling interests | 6,273 | 5,943 | ||||||||||||
Contribution to consolidated results | $ | 13,679 | $ | 17,793 |
34 |
Three Months Ended March 31, | ||||||||||||||
(Thousands of dollars) | 2023 | 2022 | ||||||||||||
Regulated operations revenues | $ | 35,132 | $ | 66,993 | ||||||||||
Operating expenses: | ||||||||||||||
Net cost of gas sold | 6,368 | 1,797 | ||||||||||||
Operations and maintenance expense | 11,378 | 24,312 | ||||||||||||
Depreciation and amortization | — | 12,920 | ||||||||||||
Taxes other than income taxes | 1,490 | 3,164 | ||||||||||||
Goodwill impairment | 21,215 | — | ||||||||||||
Operating income (loss) | (5,319) | 24,800 | ||||||||||||
Other income (deductions) | 486 | 543 | ||||||||||||
Net interest deductions | 2,200 | 4,382 | ||||||||||||
Income (loss) before income taxes | (7,033) | 20,961 | ||||||||||||
Income tax expense | 9,255 | 4,031 | ||||||||||||
Contribution to consolidated results | $ | (16,288) | $ | 16,930 |
35 |
36 |
37 |
(Thousands of dollars) | March 31, 2023 | December 31, 2022 | March 31, 2022 | |||||||||||||||||
Arizona | $ | 417,931 | $ | 292,472 | $ | 255,472 | ||||||||||||||
Northern Nevada | 80,540 | 27,384 | 13,700 | |||||||||||||||||
Southern Nevada | 415,146 | 122,959 | 93,153 | |||||||||||||||||
California | 56,722 | 7,305 | 5,629 | |||||||||||||||||
$ | 970,339 | $ | 450,120 | $ | 367,954 |
38 |
39 |
40 |
41 |
42 |
43 |
Exhibit 4.01 | - | |||||||||||||
Exhibit 4.02 | - | |||||||||||||
Exhibit 10.1 | - | |||||||||||||
Exhibit 10.2 | - | |||||||||||||
Exhibit 10.3 | - | |||||||||||||
Exhibit 10.4 | - | |||||||||||||
Exhibit 10.5 | - | |||||||||||||
Exhibit 10.6 | - | |||||||||||||
Exhibit 10.7 | - | |||||||||||||
Exhibit 31.01# | - | |||||||||||||
Exhibit 31.02# | - | |||||||||||||
Exhibit 32.01# | - | |||||||||||||
Exhibit 32.02# | - | |||||||||||||
Exhibit 101# | - | The following materials from the Quarterly Report on Form 10-Q of Southwest Gas Holdings, Inc. and Southwest Gas Corporation for the quarter ended March 31, 2023, were formatted in Inline XBRL (Extensible Business Reporting Language): (1) Southwest Gas Holdings, Inc. and Subsidiaries Condensed Consolidated Balance Sheets, (ii) Southwest Gas Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Income, (iii) Southwest Gas Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income, (iv) Southwest Gas Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows, (v) Southwest Gas Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Equity, (vi) Southwest Gas Corporation and Subsidiaries Condensed Consolidated Balance Sheets, (vii) Southwest Gas Corporation and Subsidiaries Condensed Consolidated Statements of Income, (viii) Southwest Gas Corporation and Subsidiaries Condensed Consolidated Statements of Comprehensive Income, (ix) Southwest Gas Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows, (x) Southwest Gas Corporation and Subsidiaries Condensed Consolidated Statements of Equity. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||||||||||
104# | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||||||||
# Filed herewith. |
44 |
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 |
45 |
/s/ KAREN S. HALLER | |||||
Karen S. Haller | |||||
President and Chief Executive Officer | |||||
Southwest Gas Holdings, Inc. |
/s/ ROBERT J. STEFANI | |||||
Robert J. Stefani | |||||
Senior Vice President/Chief Financial Officer | |||||
Southwest Gas Holdings, Inc. |
/s/ KAREN S. HALLER | |||||
Karen S. Haller | |||||
Chief Executive Officer | |||||
Southwest Gas Corporation |
/s/ ROBERT J. STEFANI | |||||
Robert J. Stefani | |||||
Senior Vice President/Chief Financial Officer | |||||
Southwest Gas Corporation |
/s/ Karen S. Haller | |||||
Karen S. Haller President and Chief Executive Officer |
/s/ Robert J. Stefani | |||||
Robert J. Stefani Senior Vice President/Chief Financial Officer |
/s/ Karen S. Haller | |||||
Karen S. Haller Chief Executive Officer |
/s/ Robert J. Stefani | |||||
Robert J. Stefani Senior Vice President/Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par (in USD per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, issued (in shares) | 71,330,991 | 67,119,143 |
Common stock, outstanding (in shares) | 71,330,991 | 67,119,143 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Operating revenues: | ||||
Regulated operations revenues | $ 950,011 | $ 743,532 | $ 2,406,161 | $ 1,743,390 |
Utility infrastructure services revenues | 653,293 | 523,877 | 2,889,743 | 2,318,563 |
Total operating revenues | 1,603,304 | 1,267,409 | 5,295,904 | 4,061,953 |
Operating expenses: | ||||
Net cost of gas sold | 507,537 | 298,918 | 1,007,679 | 573,804 |
Operations and maintenance | 148,908 | 149,303 | 636,371 | 515,759 |
Depreciation and amortization | 112,520 | 122,646 | 460,329 | 400,245 |
Taxes other than income taxes | 24,230 | 24,816 | 92,797 | 84,472 |
Utility infrastructure services expenses | 603,680 | 503,232 | 2,629,766 | 2,123,085 |
Goodwill impairment and loss on sale | 71,230 | 0 | 526,655 | 0 |
Total operating expenses | 1,468,105 | 1,098,915 | 5,353,597 | 3,697,365 |
Operating income | 135,199 | 168,494 | (57,693) | 364,588 |
Other income and (expenses): | ||||
Net interest deductions | (77,334) | (48,363) | (271,721) | (143,597) |
Other income (deductions) | 18,460 | 1,244 | 11,027 | (2,703) |
Total other income and (expenses) | (58,874) | (47,119) | (260,694) | (146,300) |
Income (loss) before income taxes | 76,325 | 121,375 | (318,387) | 218,288 |
Income tax expense | 28,675 | 24,125 | (71,103) | 32,681 |
Net income (loss) | 47,650 | 97,250 | (247,284) | 185,607 |
Net income attributable to noncontrolling interests | 1,739 | 1,072 | 6,273 | 5,943 |
Segment net income (loss) | $ 45,911 | $ 96,178 | $ (253,557) | $ 179,664 |
Earnings (loss) per share: | ||||
Basic (in USD per share) | $ 0.67 | $ 1.58 | $ (3.76) | $ 3.00 |
Diluted (in USD per share) | $ 0.67 | $ 1.58 | $ (3.76) | $ 2.99 |
Weighted average shares: | ||||
Basic (in shares) | 68,265 | 60,737 | 67,413 | 59,919 |
Diluted (in shares) | 68,419 | 60,854 | 67,413 | 60,044 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - Southwest - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Regulated operations revenues | $ 950,011 | $ 743,532 | $ 2,406,161 | $ 1,743,390 |
Operating expenses: | ||||
Net cost of gas sold | 507,537 | 298,918 | 1,007,679 | 573,804 |
Operations and maintenance | 148,908 | 149,303 | 636,371 | 515,759 |
Depreciation and amortization | 112,520 | 122,646 | 460,329 | 400,245 |
Taxes other than income taxes | 24,230 | 24,816 | 92,797 | 84,472 |
Total operating expenses | 1,468,105 | 1,098,915 | 5,353,597 | 3,697,365 |
Operating income | 135,199 | 168,494 | (57,693) | 364,588 |
Other income and (expenses): | ||||
Net interest deductions | (77,334) | (48,363) | (271,721) | (143,597) |
Other income (deductions) | 18,460 | 1,244 | 11,027 | (2,703) |
Total other income and (expenses) | (58,874) | (47,119) | (260,694) | (146,300) |
Income (loss) before income taxes | 76,325 | 121,375 | (318,387) | 218,288 |
Income tax expense | 28,675 | 24,125 | (71,103) | 32,681 |
Segment net income (loss) | 45,911 | 96,178 | (253,557) | 179,664 |
Southwest Gas Corporation | ||||
Regulated operations revenues | 914,879 | 676,539 | 2,173,409 | 1,676,397 |
Operating expenses: | ||||
Net cost of gas sold | 501,169 | 297,121 | 993,264 | 572,007 |
Operations and maintenance | 131,188 | 119,636 | 503,480 | 452,051 |
Depreciation and amortization | 74,650 | 72,114 | 265,579 | 256,814 |
Taxes other than income taxes | 22,740 | 21,652 | 84,285 | 81,308 |
Total operating expenses | 729,747 | 510,523 | 1,846,608 | 1,362,180 |
Operating income | 185,132 | 166,016 | 326,801 | 314,217 |
Other income and (expenses): | ||||
Net interest deductions | (38,622) | (26,610) | (127,892) | (102,004) |
Other income (deductions) | 18,443 | 1,315 | 10,244 | (3,794) |
Total other income and (expenses) | (20,179) | (25,295) | (117,648) | (105,798) |
Income (loss) before income taxes | 164,953 | 140,721 | 209,153 | 208,419 |
Income tax expense | 30,257 | 28,926 | 31,872 | 28,204 |
Segment net income (loss) | $ 134,696 | $ 111,795 | $ 177,281 | $ 180,215 |
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - Southwest - USD ($) $ in Thousands |
Total |
Southwest Gas Corporation |
Common stock shares |
Common stock shares
Southwest Gas Corporation
|
Additional paid-in capital |
Additional paid-in capital
Southwest Gas Corporation
|
Accumulated other comprehensive loss |
Accumulated other comprehensive loss
Southwest Gas Corporation
|
Retained earnings |
Retained earnings
Southwest Gas Corporation
|
---|---|---|---|---|---|---|---|---|---|---|
Beginning balance (in shares) at Dec. 31, 2021 | 60,422,000 | |||||||||
Beginning balance at Dec. 31, 2021 | $ 62,052 | $ 1,824,216 | $ 1,618,911 | $ (46,761) | $ (46,913) | $ 1,114,313 | $ 906,827 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 96,178 | 111,795 | ||||||||
Share-based compensation | 1,705 | (445) | ||||||||
Net actuarial gain arising during period, less amortization of unamortized benefit plan cost, net of tax | 1,126 | 1,126 | ||||||||
FSIRS amounts reclassified to net income, net of tax | $ 416 | $ 416 | 416 | 416 | ||||||
Dividends declared to Southwest Gas Holdings, Inc. | (41,909) | (31,000) | ||||||||
Ending balance (in shares) at Mar. 31, 2022 | 66,849,000 | 47,482,000 | ||||||||
Ending balance at Mar. 31, 2022 | 2,611,534 | $ 68,479 | $ 49,112 | 2,273,837 | 1,620,616 | (43,972) | (45,371) | 1,190,738 | 987,177 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
FSIRS amounts reclassified to net income, net of tax | $ 0 | 0 | ||||||||
Ending balance (in shares) at Mar. 31, 2023 | 71,330,991 | 71,331,000 | 47,482,000 | |||||||
Ending balance at Mar. 31, 2023 | 2,666,130 | $ 72,961 | $ 49,112 | 2,524,631 | 1,624,919 | (43,949) | (38,065) | 742,513 | 1,030,164 | |
Beginning balance (in shares) at Dec. 31, 2022 | 67,119,143 | 67,119,000 | ||||||||
Beginning balance at Dec. 31, 2022 | $ 68,749 | 2,287,183 | 1,622,969 | (44,242) | (38,261) | 747,069 | 935,355 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 45,911 | 134,696 | ||||||||
Share-based compensation | 1,950 | (287) | ||||||||
Net actuarial gain arising during period, less amortization of unamortized benefit plan cost, net of tax | 196 | 196 | ||||||||
FSIRS amounts reclassified to net income, net of tax | $ 0 | 0 | 0 | 0 | ||||||
Dividends declared to Southwest Gas Holdings, Inc. | (44,635) | (39,600) | ||||||||
Ending balance (in shares) at Mar. 31, 2023 | 71,330,991 | 71,331,000 | 47,482,000 | |||||||
Ending balance at Mar. 31, 2023 | $ 2,666,130 | $ 72,961 | $ 49,112 | $ 2,524,631 | $ 1,624,919 | $ (43,949) | $ (38,065) | $ 742,513 | $ 1,030,164 |
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. (together with its subsidiaries, the “Company”) is a holding company, owning all of the shares of common stock of Southwest Gas Corporation (“Southwest” or the “natural gas distribution” segment), all of the shares of common stock of Centuri Group, Inc. (“Centuri,” or the “utility infrastructure services” segment), and until February 14, 2023, all of the shares of common stock of MountainWest Pipelines Holding Company (“MountainWest” or the “pipeline and storage” segment). In December 2022, the Company announced that its Board of Directors (the “Board”) unanimously determined to take strategic actions to simplify the Company’s portfolio of businesses. These actions included entering into a definitive agreement to sell 100% of MountainWest to Williams Partners Operating LLC (“Williams”) for $1.5 billion in total enterprise value, subject to certain adjustments (collectively, the “MountainWest sale”). Additionally, the Company determined it will pursue a spin-off of Centuri (the “Centuri spin-off”), to form a new independent publicly traded utility infrastructure services company. The MountainWest sale closed on February 14, 2023. The Centuri spin-off is expected to be completed in the fourth quarter of 2023 or the first quarter of 2024 and to be tax free to the Company and its stockholders for U.S. federal income tax purposes. See Note 8 - Dispositions for more information. 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 distribution segment are higher during winter periods due to the seasonality incorporated in its regulatory rate structures. Centuri is a strategic utility infrastructure services company dedicated to partnering with North America’s gas and electric providers to build and maintain the energy network that powers millions of homes across the United States (“U.S.”) and Canada. Centuri derives revenue primarily from installation, replacement, repair, and maintenance of energy networks. Centuri operates in the U.S., primarily as NPL, Neuco, Linetec, and Riggs Distler, and in Canada, primarily as NPL Canada. Utility infrastructure services activity is seasonal in many of Centuri’s operating areas. Peak periods are the summer and fall months in colder climate areas, such as the northeastern and midwestern U.S. and in Canada. In warmer climate areas, such as the southwestern and southeastern U.S., utility infrastructure services activity continues year round. Basis of Presentation. The condensed consolidated financial statements of Southwest Gas Holdings, Inc. and subsidiaries and Southwest (with its subsidiaries) included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The year-end 2022 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 during the recently completed quarter, other than the sale of MountainWest, discussed above. 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 as of 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 statement of results for the interim periods, have been made. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2022 Annual Report to Stockholders, which is incorporated by reference into the 2022 Form 10-K. In the first quarter of 2023, management identified a misstatement related to its accounting for the cost of gas sold at Southwest, thereby determining that Net cost of gas sold was overstated in 2021 and 2022 by $2.3 million and $5.7 million, respectively. Southwest made an adjustment in the first quarter of 2023 to reduce Net cost of gas sold and to increase its asset balance for Deferred purchased gas cost by $8 million. Also in the first quarter of 2023, the Company identified an approximately $21 million misstatement related to its initial estimation of the loss recorded upon reclassifying MountainWest as an asset held for sale during the year ended December 31, 2022. Consequently, the impairment loss for the year ended December 31, 2022 was understated by approximately $21 million, which was corrected in the first quarter of 2023. The Company (and Southwest, with respect to Net cost of gas sold) assessed, both quantitatively and qualitatively, the impact of these items on previously issued financial statements, concluding they were not material to any prior period or the current period financial statements. Other Property and Investments. Other property and investments on Southwest’s and the Company’s Condensed Consolidated Balance Sheets includes:
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. The term non-regulated in regard to assets and related balances in the table above is in reference to the non-rate regulated operations of Centuri. Held for sale. The Company and Southwest have classified certain assets associated with its previous corporate headquarters as held for sale during the first quarter of 2023. An agreement for sale was signed in May 2023, subject to certain closing conditions, including possible extension periods. Amounts to be realized above the carrying value are not expected to be material to the financial statements overall. Management determined that the assets met the criteria to be classified as held for sale as of March 31, 2023. As a result, the Company and Southwest reclassified approximately $27 million from Other property and investments to current assets held for sale on their respective Condensed Consolidated Balance Sheets at March 31, 2023. Cash and Cash Equivalents. Cash and cash equivalents of the Company include $32.7 million and $30 million of money market fund investments at March 31, 2023 and December 31, 2022, respectively. The money market fund investments for Southwest were $29.6 million at March 31, 2023 and $17.6 million at December 31, 2022, respectively. These investments fall within Level 2 of the fair value hierarchy, due to the asset valuation methods used by money market funds. Noncash investing activities for the Company and Southwest include capital expenditures that were not yet paid, thereby remaining in accounts payable, the amounts related to which declined by approximately $37.3 million and $34.2 million during the three months ended March 31, 2023, respectively, and increased $5.5 million and $5.7 million during the twelve months ended March 31, 2023, respectively. Accounts Receivable, net of allowances. Following an earlier moratorium on account disconnections amidst the COVID-19 environment, account collection efforts resumed in 2021 in all jurisdictions in which Southwest operates. Ultimately, some accounts that are receivable at the end of any reporting date may not be collected, and if collection is unsuccessful, such accounts are written off. Estimates as to collectibility are made on an ongoing basis. However, Southwest continues to actively work with customers experiencing financial hardship by means of flexible payment options and partnering with assistance agencies. The cost of gas included in customer rates also influences account balances at each reporting date. Deferred Purchased Gas Costs. The various regulatory commissions have established procedures to enable rate-regulated companies to adjust billing rates for changes in the cost of natural gas purchased. The difference between the current cost of gas purchased and the cost of gas recovered in billed rates is deferred. Generally, these deferred amounts are recovered or refunded within one year. Prepaid and other current assets. Prepaid and other current assets for Southwest include, among other things, materials and operating supplies of $79 million at March 31, 2023 and $77.3 million at December 31, 2022 (carried at weighted average cost). Also included in the balance was $207 million as of December 31, 2022 in accrued purchased gas cost, with no corresponding asset balance as of March 31, 2023. Goodwill. Goodwill is assessed as of October 1st each year for impairment, or more frequently, if circumstances indicate it may be more likely than not that the fair value of a reporting unit is less than its carrying value. The Company’s reporting units for goodwill are its operating segments, which are also its reportable segments. Since December 31, 2022, management qualitatively assessed whether events during the first three months of 2023 indicated it was more likely than not that the fair value of our reporting units was less than their carrying value, which if the case, could be an indication of a goodwill impairment. Through management’s assessments during first quarter of 2023, no impairment was deemed to have occurred in the continuing segments of the Company. However, there can be no assurances that future assessments of goodwill will not result in an impairment, and various factors, including changes in the business, strategic initiatives, economic conditions, governmental monetary policies, interest rates, or others, on their own or in combination with each other, could result in the fair value of reporting units being lower than their carrying values. Goodwill in the Natural Gas Distribution and Utility Infrastructure Services segments is included in their respective Condensed Consolidated Balance Sheets as follows:
Other Current Liabilities. Management recognizes in its balance sheets various liabilities that are expected to be settled through future cash payment within the next twelve months, including amounts payable under regulatory mechanisms, customary accrued expenses for employee compensation and benefits, declared but unpaid dividends, and miscellaneous other accrued liabilities. Other current liabilities for the Company include $44.2 million and $41.6 million of dividends declared as of March 31, 2023 and December 31, 2022, respectively. Also included in the balance was $68 million as of March 31, 2023 in accrued purchased gas cost, with no corresponding liability balance as of December 31, 2022. Other Income (Deductions). The following table provides the composition of significant items included in Other income (deductions) in Southwest’s and the Company’s Condensed Consolidated Statements of Income:
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. Interest income primarily relates to Southwest’s regulatory asset balances, including its deferred purchased gas cost mechanisms. Interest income includes carrying charges on regulatory account balances, including deferred purchased gas cost balances, which increased from $368 million as of March 31, 2022 to $970 million as of March 31, 2023. Refer also to Note 2 – Components of Net Periodic Benefit Cost. Redeemable Noncontrolling Interests. In connection with the acquisition of Linetec in November 2018, the previous owner initially retained a 20% equity interest in that entity, with redemption being subject to certain rights based on the passage of time or upon the occurrence of certain triggering events. Effective in 2022, the Company, through Centuri, had the right, but not the obligation, to purchase at fair value (subject to a floor) a portion of the interest held by the previous owner, and in incremental amounts each year thereafter. In March 2022, the parties agreed to a partial redemption, reducing the noncontrolling interest to 15%, and in March 2023, agreeing once again to a 5% redemption (of the 15% then remaining), and to thereby reduce the noncontrolling interest to 10% under the terms of the original agreement. As a result of this most recent election, Centuri accrued $39.9 million as of March 31, 2023, which was paid to the previous owner of Linetec in April 2023. The impact of this transaction has been excluded from the Company’s Condensed Consolidated Statement of Cash Flows for 2023 due to its noncash nature in advance of the April 2023 payment. The remaining balance continuing to be redeemable as of March 31, 2023 is 10% under the terms of the original agreement, with Centuri now owning a 90% stake in Linetec. Certain members of Riggs Distler management have a 1.42% interest in Drum, which is redeemable, subject to certain rights based on the passage of time or upon the occurrence of certain triggering events. Significant changes in the value of the redeemable noncontrolling interests, above a floor determined at the establishment 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. Based on the fair value model employed, the estimated redemption value of the Linetec redeemable noncontrolling interest increased approximately $5.8 million during the three months ended March 31, 2023, notwithstanding the change resulting from the partial redemption noted above. Valuation adjustments also impact retained earnings, as reflected in the Company’s Condensed Consolidated Statement of Equity, but do not impact net income. The following depicts changes to the balances of the redeemable noncontrolling interests:
Earnings Per Share. Basic earnings per share (“EPS”) in each period of this report were calculated by dividing net income attributable to Southwest Gas Holdings, Inc. by the weighted-average number of shares during those periods. Diluted EPS includes additional weighted-average common stock equivalents (performance shares and restricted stock units). Unless otherwise noted, the term “Earnings Per Share” refers to Basic EPS. A reconciliation of the denominator used in Basic and Diluted EPS calculations is shown in the following table:
(1) The number of anti-dilutive restricted stock units excluded from the calculation of diluted shares during the twelve months ended March 31, 2023 is 166,000. (2) The number of securities included 132,000 and 112,000 performance shares during the three months ended March 31, 2023 and 2022, and 149,000 and 114,000 performance shares during the twelve months ended March 31, 2023 and 2022, respectively, the total of which was derived by assuming that target performance will be achieved during the relevant performance period. Income Taxes. The Company’s effective tax rate was 37.6% for the three months ended March 31, 2023, compared to 19.9% for the corresponding period in 2022. The effective tax rate increase was primarily due to the MountainWest sale, and includes the impact of book versus tax basis differences related to the transaction (See Note 8 - Dispositions). Southwest’s effective tax rate was 18.3% for the three months ended March 31, 2023, compared to 20.6% in the prior year quarter. These amounts varied from the statutory rate primarily as the result of the amortization of excess deferred income taxes. In April 2023, the Internal Revenue Service (“IRS”) issued Revenue Procedure 2023-15, which provides a safe harbor method of accounting that taxpayers may use to determine whether expenditures to repair, maintain, replace, or improve natural gas transmission and distribution property must be capitalized for tax purposes. The Company and Southwest are currently reviewing this revenue procedure to determine the potential impact on their financial position, results of operations, and cash flows. Recent Accounting Standards Updates. Accounting pronouncements effective or adopted in 2023: In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The update provides optional guidance for a limited time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting, including when modifying a contract (during the eligibility period covered by the update to the topic) to replace a reference rate affected by reference rate reform. The update applies only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. In December 2022, the FASB issued ASU 2022-06 “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.” The update provides deferral of the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. Management will continue to monitor the impacts this update might have on the Company’s and Southwest’s consolidated financial statements and disclosures, and will reflect such appropriately, in the event that the optional guidance is elected. See also LIBOR discussion in Note 5 – Debt. There are no other recently issued accounting standards updates that are expected to be adopted or material to Southwest or the Company effective in 2023 or thereafter.
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Components of Net Periodic Benefit Cost |
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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 for employees hired before 2022 and a separate unfunded supplemental retirement plan (“SERP”), which is limited to officers also hired before 2022. Southwest also provides limited 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 is a component of an overhead loading process associated with the cost of labor. The overhead process ultimately results in allocation of service cost 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 regulated operations 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. Variability in total net periodic benefit cost between periods, especially with regard to the Qualified Retirement Plan, is subject to changes in underlying actuarial assumptions between periods, notably the discount rate.
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Revenue |
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Revenue | Note 3 – Revenue The following information about the Company’s revenues is presented by segment. Southwest encompasses the natural gas distribution segment. Centuri encompasses the utility infrastructure services segment. MountainWest, commencing January 2022 (following its acquisition) and until its sale in mid-February 2023, encompassed the pipeline and storage segment. Natural Gas Distribution Segment: Southwest’s operating revenues included 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, in addition to other categories of revenue:
(1) Amounts include late fees and other miscellaneous revenues, and may also include the impact of certain regulatory mechanisms. Also includes the impacts of a temporary moratorium on late fees and disconnection for nonpayment during the COVID-19 pandemic. 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 Company identified a misstatement in the first quarter 2022 disclosure which resulted in an understatement of $88.8 million in the master services agreement category and an overstatement by the same amount in the bid contract category. Management concluded this item was not material to the previously issued financial statements and revised the disclosures for the three- and twelve- months ended March 31, 2022. The following table provides information about contracts receivable and revenue earned on contracts in progress in excess of billings (contract assets), both of which are included within Accounts receivable, net of allowances, as well as amounts billed in excess of revenue earned on contracts (contract liabilities), which are included in Other current liabilities as of March 31, 2023 and December 31, 2022 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 right to consideration for work completed but not billed and/or approved for billing 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 relate 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, 2022 to March 31, 2023 increased due to amounts received for services not yet performed, net of revenue recognized. 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. Furthermore, 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 March 31, 2023, Centuri had 62 fixed price contracts with 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 March 31, 2023 was $458.2 million. Centuri expects to recognize the remaining performance obligations over approximately the next two years; however, the timing of that recognition is largely within the control of the customer, including when the necessary materials required to complete the work are provided by the customer. Utility infrastructure services contracts receivable consists of the following:
Pipeline and Storage Segment: MountainWest Regulated operations revenues on the Condensed Consolidated Statements of Income of the Company include revenue from contracts with customers, which is shown below, disaggregated by categories of sales and service activities. The information for 2023 reflects activity from January 1, 2023 through February 13, 2023 (the last full day of ownership).
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Note 4 – Common Stock 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 and Centuri is based on stock awards to be issued in shares of Southwest Gas Holdings, Inc. On April 8, 2021, the Company entered into a Sales Agency Agreement between the Company and BNY Mellon Capital Markets, LLC and J.P. Morgan Securities LLC (the “Equity Shelf Program”) for the offer and sale of up to $500 million of common stock from time to time in an at-the-market offering program. The shares are issued pursuant to the Company’s automatic shelf registration statement on Form S-3 (File No. 333-251074), or “the Universal Shelf.” There was no activity under the Equity Shelf Program during the quarter ended March 31, 2023. The following table provides the life-to-date activity under that program through March 31, 2023:
As of March 31, 2023, the Company had approximately $342 million in common stock available for sale under the program. In March 2023, the Company issued, through a separate prospectus supplement under the Universal Shelf, an aggregate of 4.1 million shares of common stock, at an underwritten public offering price of $60.12 per share, resulting in net proceeds to the Company of $238.4 million, net of an underwriter’s discount of $8.3 million and estimated expenses of the offering. Approximately $140 million (2.3 million shares) of the offering was purchased by certain funds affiliated with Carl C. Icahn, a significant stockholder beneficially owning more that 10% of the outstanding stock of the Company. The Company used the net proceeds to repay outstanding amounts under the Company’s credit facility, with the remaining proceeds used to pay off residual amounts outstanding under the loan entered into in November 2021 in connection with the acquisition of MountainWest and the remainder, for working capital and general corporate purposes. During the three months ended March 31, 2023, the Company issued approximately 54,000 shares of common stock through the Restricted Stock/Unit Plan and Omnibus Incentive Plan. Additionally, during the three months ended March 31, 2023, the Company issued 46,000 shares of common stock through the Dividend Reinvestment and Stock Purchase Plan, raising approximately $2.7 million.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Note 5 – Debt Long-Term Debt Long-term debt is recognized in the Company’s and Southwest’s Condensed Consolidated Balance Sheets generally at the carrying value of the obligations outstanding. Details surrounding the fair value and individual carrying values of instruments are provided in the table that follows.
Southwest has a $400 million credit facility that is scheduled to expire in April 2025. Southwest designates $150 million of associated capacity as long-term debt and the remaining $250 million for working capital purposes. Interest rates for the credit facility are calculated at either the Secured Overnight Financing Rate (“SOFR”) or an “alternate base rate,” plus in each case an applicable margin that is determined based on Southwest’s senior unsecured debt rating. At March 31, 2023, the applicable margin is 1.125% for loans bearing interest with reference to SOFR and 0.125% for loans bearing interest with reference to the alternative base rate. At March 31, 2023, no borrowings were outstanding on the long-term portion (including under the commercial paper program), nor under the short-term portion of the facility. Centuri has a $1.545 billion secured revolving credit and term loan multi-currency facility. Amounts can be borrowed in either Canadian or U.S. dollars. The revolving credit facility matures on August 27, 2026 and the term loan facility matures on August 27, 2028. Interest rates for the revolving credit facility are based on SOFR, plus an applicable margin; the term loan facility is based on LIBOR, plus an applicable margin. The capacity of the line of credit portion of the facility is $400 million; related amounts borrowed and repaid are available to be re-borrowed. The term loan portion of the facility has a limit of $1.145 billion. The obligations under the credit agreement are secured by present and future ownership interests in substantially all direct and indirect subsidiaries of Centuri, substantially all of the tangible and intangible personal property of each borrower, certain of their direct and indirect subsidiaries, and all products, profits, and proceeds of the foregoing. Centuri’s assets securing the facility at March 31, 2023 totaled $2.4 billion. At March 31, 2023, $1.022 billion in borrowings were outstanding under Centuri’s combined secured revolving credit and term loan facility. In March 2023, Southwest issued $300 million aggregate principal amount of 5.450% Senior Notes (the “March 2023 Notes”). The notes will mature in March 2028. Southwest used the net proceeds to repay amounts outstanding under its credit facility and the remainder for general corporate purposes. In April 2023, Southwest Gas Holdings, Inc. entered into a $550 million Term Loan Credit Agreement that matures in October 2024. Southwest Gas Holdings, Inc. utilized a majority of the proceeds to make an equity contribution to Southwest. On April 17, 2023, Southwest utilized the equity contribution to repay, in full, amounts outstanding under its $450 million 364-day term loan entered into in January 2023 (discussed below), with the remainder of the equity contribution used for working capital and general corporate purposes. Short-Term Debt Southwest Gas Holdings, Inc. has a $300 million credit facility that is scheduled to expire in December 2026 and is primarily used for short-term financing needs. Interest rates for the credit facility are calculated at either SOFR or the “alternate base rate,” plus in each case an applicable margin. There was $18 million outstanding under this credit facility as of March 31, 2023. As indicated above, under Southwest’s $400 million credit facility, no short-term borrowings were outstanding at March 31, 2023. In March 2022, Southwest amended its $250 million Term Loan (the “March 2021 Term Loan”), extending the maturity date to March 21, 2023 and replacing LIBOR interest rate benchmarks with SOFR interest rate benchmarks. The proceeds were originally used to fund the increased cost of natural gas supply during the month of February 2021, caused by extreme weather conditions in the central U.S. During the first quarter of 2023, the March 2021 Term Loan was repaid in full by use of Southwest’s credit facility, prior to the issuance of the March 2023 Notes, proceeds from which were used to pay down indebtedness then outstanding under the credit facility, as indicated. On September 26, 2022, Southwest Gas Holdings, Inc. entered into Amendment No. 1 to the 364-day Term Loan Credit Agreement, initially borrowed to fund the acquisition of the equity interests in MountainWest, of which $1.147 billion was outstanding as of December 31, 2022. The Credit Agreement initially provided for a $1.6 billion delayed-draw term loan (the “Term Loan Facility”). In connection with the close of the MountainWest sale on February 14, 2023, $1.075 billion of the proceeds were used to pay down the Term Loan Facility. During the first quarter of 2023, the Company paid down the remaining balance of the Term Loan Facility of approximately $72 million. In January 2023, Southwest entered into a 364-day $450 million term loan agreement. Southwest initially used the proceeds to fund higher than expected natural gas costs for the November 2022 through March 2023 winter period, caused by numerous market forces, including historically low storage levels, unexpected upstream pipeline maintenance events, and cold weather conditions across the western region. As indicated above, the term loan was repaid in full on April 17, 2023. LIBORCertain rates established at LIBOR were scheduled to be discontinued after 2021 as part of reference rate reform, while other LIBOR-based rates are scheduled to be discontinued after June 2023. As of March 31, 2023, the Company had $1.003 billion in outstanding borrowings under Centuri’s term loan facility with reference to LIBOR. Southwest and Southwest Gas Holdings, Inc. had no outstanding borrowings or variable rate debt agreements with reference to LIBOR as of March 31, 2023.
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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 6 – Other Comprehensive Income and Accumulated Other Comprehensive Income The following information presents 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. Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss)
(1)Tax amounts are calculated using a 24% rate. The Company has elected to indefinitely reinvest, in Canada, the earnings of Centuri’s Canadian subsidiaries, thus precluding 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). The following table represents a rollforward of AOCI, presented on the Company’s Condensed Consolidated Balance Sheets and its Condensed Consolidated Statements of Equity:
(1)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). (2)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). (3)Tax amounts are calculated using a 24% rate. The following table represents a rollforward of AOCI, presented on Southwest’s Condensed Consolidated Balance Sheets:
(4)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). (5)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). (6)Tax amounts are calculated using a 24% rate. 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:
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Note 7 – Segment Information The Company had three reportable segments during the first quarter, prior to the MountainWest sale. Southwest comprises the natural gas distribution segment, Centuri comprises the utility infrastructure services segment, and MountainWest comprised the pipeline and storage segment. As a result of the MountainWest sale in February 2023, the information for 2023 presented below for MountainWest reflects activity from January 1, 2023 through February 13, 2023 (the last full day of its ownership by the Company). Centuri accounts for services provided to Southwest at contractual prices. Accounts receivable for these services, which are not eliminated during consolidation, are presented in the table below:
In order to reconcile (below) to net income (loss) 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 financial information pertaining to the natural gas distribution, utility infrastructure services, and pipeline and storage segments are as follows:
The corporate and administrative activities for Southwest Gas Holdings, Inc. in the three-month period ended March 31, 2023 include, among other things, additional amounts related to commitments under the sale agreement with Williams in regard to MountainWest, including a charge of $28.4 million from the post-closing rate case settlement agreement for MountainWest Overthrust Pipeline (pending Federal Energy Regulatory Commission (the “FERC” approval)); and an additional $21 million reflects the final accrued post-closing payment of $7.4 million related to cash and net working capital balances above/below a contract benchmark, with the remaining charge associated with other changes in the assets and liabilities that were not subject to post-closing payment true-up provisions. The post-closing payment of $7.4 million will effectively return approximately the same amount initially paid by Williams to the Company at closing. Other corporate and administrative amounts during this same quarter also reflect residual costs associated with or as a result of the MountainWest sale, as well as $12 million of interest expense, primarily under the loan entered into by Southwest Gas Holdings, Inc. in November 2021 in connection with the acquisition of MountainWest prior to it being paid in full in March 2023 (including $2.5 million in debt issuance costs written off when the debt was repaid). The twelve-month period ended March 31, 2023 included more than $47 million of interest expense under the aforementioned MountainWest acquisition loan, the other items noted above, as well as $35 million in combined costs associated with stockholder activism and the associated proxy contest, the May 2022 settlement with the Icahn group, and costs of a strategic review initiative initiated in 2022. The amounts related to the MountainWest sale, including the rate case settlement, and post-closing adjustments, are included in Goodwill impairment and loss on sale on the Company’s Condensed Consolidated Statement of Income.
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Dispositions |
3 Months Ended |
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Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Dispositions | Note 8 - Dispositions Dispositions In December 2022, the Company announced that the Board unanimously determined to take strategic actions to simplify the Company’s portfolio of businesses. These actions included entering into a definitive agreement to sell 100% of MountainWest to Williams for $1.5 billion in total enterprise value, subject to certain adjustments. The MountainWest sale closed on February 14, 2023. The Company is expected to provide certain services to Williams under a transition services agreement for a brief period, generally not beyond six months from the sale closing date. Additionally, the Company determined it will pursue a spin-off of Centuri to form a new independent publicly traded utility infrastructure services company. The Centuri spin-off is currently expected to be completed by the fourth quarter of 2023 or the end of the first quarter of 2024 and to be tax free to the Company and its stockholders for U.S. federal income tax purposes. The separation of Centuri will be subject to, among other things, finalizing the transaction structure, final approval by the Board, approval by the Arizona Corporation Commission (the “ACC”), the receipt of a favorable private letter ruling by the IRS relating to the tax-free nature of the transaction, and the effectiveness of a registration statement to be filed with the SEC. The application for the private letter ruling was filed with the IRS in March 2023 and the application to the ACC was filed in April 2023. The fair value of the MountainWest assets held-for-sale was previously estimated based on the preliminary closing statement and subject to certain adjustments, including a post-closing payment between the parties related to final working capital balances. The amount of the post-closing payment was finalized in May 2023, prior to the issuance of these financial statements. The Company recognized an additional loss on sale of approximately $21 million during the quarter ended March 31, 2023. This reflects the accrued post-closing payment of $7.4 million related to cash and net working capital balances above/below a contractual benchmark, with the remaining charge associated with other changes in the assets and liabilities that were not subject to post-closing payment true-up provisions. The post-closing payment of $7.4 million will effectively return approximately the same amount initially paid by Williams to the Company at closing. As referred to in Note 7 – Segment Information, on September 22, 2022, the FERC issued an order initiating an investigation, pursuant to section 5 of the Natural Gas Act, to determine whether rates charged by MountainWest Overthrust Pipeline, LLC, a subsidiary of MountainWest, were just and reasonable and setting the matter for hearing (the “Section 5 Rate Case”). Unless earlier settled by the parties, a hearing on the matter was to commence on August 1, 2023 with an initial decision from the presiding administrative law judge due by November 14, 2023. Under the terms of the purchase and sale agreement entered into in connection with the MountainWest sale, the Company is obligated, for a period of four years following the closing of the MountainWest sale, to indemnify Williams and MountainWest for any damages and liabilities resulting from the Section 5 Rate Case, including any reduction to the current applicable rate, up to a cap of $75 million. Williams agreed not to enter into any settlement of the Section 5 Rate Case that would result in damages being paid by the Company under the indemnity arrangement without prior written consent of the Company. In March 2023, the parties agreed to a settlement, which is pending approval by the FERC. As a result, the Company recorded an additional estimated loss of $28.4 million from the disposal of MountainWest in the first quarter of 2023, which is included in Goodwill impairment and loss on sale in the Company’s Condensed Consolidated Statement of Income. Other contingent commitments were part of the agreement as well, which are currently expected to be immaterial.
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Background, Organization, and Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations. Southwest Gas Holdings, Inc. (together with its subsidiaries, the “Company”) is a holding company, owning all of the shares of common stock of Southwest Gas Corporation (“Southwest” or the “natural gas distribution” segment), all of the shares of common stock of Centuri Group, Inc. (“Centuri,” or the “utility infrastructure services” segment), and until February 14, 2023, all of the shares of common stock of MountainWest Pipelines Holding Company (“MountainWest” or the “pipeline and storage” segment). 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 distribution segment are higher during winter periods due to the seasonality incorporated in its regulatory rate structures.Centuri is a strategic utility infrastructure services company dedicated to partnering with North America’s gas and electric providers to build and maintain the energy network that powers millions of homes across the United States (“U.S.”) and Canada. Centuri derives revenue primarily from installation, replacement, repair, and maintenance of energy networks. Centuri operates in the U.S., primarily as NPL, Neuco, Linetec, and Riggs Distler, and in Canada, primarily as NPL Canada. Utility infrastructure services activity is seasonal in many of Centuri’s operating areas. Peak periods are the summer and fall months in colder climate areas, such as the northeastern and midwestern U.S. and in Canada. In warmer climate areas, such as the southwestern and southeastern U.S., utility infrastructure services activity continues year round. |
Basis of Presentation | Basis of Presentation. The condensed consolidated financial statements of Southwest Gas Holdings, Inc. and subsidiaries and Southwest (with its subsidiaries) included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The year-end 2022 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 during the recently completed quarter, other than the sale of MountainWest, discussed above. 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 as of 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 statement of results for the interim periods, have been made. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2022 Annual Report to Stockholders, which is incorporated by reference into the 2022 Form 10-K.
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Cash and Cash Equivalents | Cash and Cash Equivalents. Cash and cash equivalents of the Company include $32.7 million and $30 million of money market fund investments at March 31, 2023 and December 31, 2022, respectively. The money market fund investments for Southwest were $29.6 million at March 31, 2023 and $17.6 million at December 31, 2022, respectively. These investments fall within Level 2 of the fair value hierarchy, due to the asset valuation methods used by money market funds. Noncash investing activities for the Company and Southwest include capital expenditures that were not yet paid, thereby remaining in accounts payable, the amounts related to which declined by approximately $37.3 million and $34.2 million during the three months ended March 31, 2023, respectively, and increased $5.5 million and $5.7 million during the twelve months ended March 31, 2023, respectively.
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Accounts Receivable, net of allowances | Accounts Receivable, net of allowances. Following an earlier moratorium on account disconnections amidst the COVID-19 environment, account collection efforts resumed in 2021 in all jurisdictions in which Southwest operates. Ultimately, some accounts that are receivable at the end of any reporting date may not be collected, and if collection is unsuccessful, such accounts are written off. Estimates as to collectibility are made on an ongoing basis. However, Southwest continues to actively work with customers experiencing financial hardship by means of flexible payment options and partnering with assistance agencies. The cost of gas included in customer rates also influences account balances at each reporting date. |
Deferred Purchased Gas Costs | Deferred Purchased Gas Costs. The various regulatory commissions have established procedures to enable rate-regulated companies to adjust billing rates for changes in the cost of natural gas purchased. The difference between the current cost of gas purchased and the cost of gas recovered in billed rates is deferred. Generally, these deferred amounts are recovered or refunded within one year. |
Prepaid and other current assets | Prepaid and other current assets. Prepaid and other current assets for Southwest include, among other things, materials and operating supplies of $79 million at March 31, 2023 and $77.3 million at December 31, 2022 (carried at weighted average cost). Also included in the balance was $207 million as of December 31, 2022 in accrued purchased gas cost, with no corresponding asset balance as of March 31, 2023. |
Goodwill | Goodwill. Goodwill is assessed as of October 1st each year for impairment, or more frequently, if circumstances indicate it may be more likely than not that the fair value of a reporting unit is less than its carrying value. The Company’s reporting units for goodwill are its operating segments, which are also its reportable segments. Since December 31, 2022, management qualitatively assessed whether events during the first three months of 2023 indicated it was more likely than not that the fair value of our reporting units was less than their carrying value, which if the case, could be an indication of a goodwill impairment. Through management’s assessments during first quarter of 2023, no impairment was deemed to have occurred in the continuing segments of the Company. However, there can be no assurances that future assessments of goodwill will not result in an impairment, and various factors, including changes in the business, strategic initiatives, economic conditions, governmental monetary policies, interest rates, or others, on their own or in combination with each other, could result in the fair value of reporting units being lower than their carrying values. |
Other Current Liabilities | Other Current Liabilities. Management recognizes in its balance sheets various liabilities that are expected to be settled through future cash payment within the next twelve months, including amounts payable under regulatory mechanisms, customary accrued expenses for employee compensation and benefits, declared but unpaid dividends, and miscellaneous other accrued liabilities. |
Earnings Per Share | Earnings Per Share. Basic earnings per share (“EPS”) in each period of this report were calculated by dividing net income attributable to Southwest Gas Holdings, Inc. by the weighted-average number of shares during those periods. Diluted EPS includes additional weighted-average common stock equivalents (performance shares and restricted stock units). Unless otherwise noted, the term “Earnings Per Share” refers to Basic EPS. |
Recent Accounting Standards Updates | Recent Accounting Standards Updates. Accounting pronouncements effective or adopted in 2023: In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The update provides optional guidance for a limited time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting, including when modifying a contract (during the eligibility period covered by the update to the topic) to replace a reference rate affected by reference rate reform. The update applies only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. In December 2022, the FASB issued ASU 2022-06 “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.” The update provides deferral of the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. Management will continue to monitor the impacts this update might have on the Company’s and Southwest’s consolidated financial statements and disclosures, and will reflect such appropriately, in the event that the optional guidance is elected.
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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 on Southwest’s and the Company’s Condensed Consolidated Balance Sheets includes:
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Schedule of Goodwill | Goodwill in the Natural Gas Distribution and Utility Infrastructure Services segments is included in their respective Condensed Consolidated Balance Sheets as follows:
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Schedule of Significant Items Included in Other Income (Deductions) | The following table provides the composition of significant items included in Other income (deductions) in Southwest’s and the Company’s Condensed Consolidated Statements of Income:
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Summary of Redeemable Noncontrolling Interest | The following depicts changes to the balances of the redeemable noncontrolling interests:
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Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the denominator used in Basic and Diluted EPS calculations is shown in the following table:
(1) The number of anti-dilutive restricted stock units excluded from the calculation of diluted shares during the twelve months ended March 31, 2023 is 166,000. (2) The number of securities included 132,000 and 112,000 performance shares during the three months ended March 31, 2023 and 2022, and 149,000 and 114,000 performance shares during the twelve months ended March 31, 2023 and 2022, respectively, the total of which was derived by assuming that target performance will be achieved during the relevant performance period.
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Components of Net Periodic Benefit Cost (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Costs | The service cost component of net periodic benefit costs included in the table below is a component of an overhead loading process associated with the cost of labor. The overhead process ultimately results in allocation of service cost 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 regulated operations 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. Variability in total net periodic benefit cost between periods, especially with regard to the Qualified Retirement Plan, is subject to changes in underlying actuarial assumptions between periods, notably the discount rate.
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Revenue (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Revenue Disaggregated by Service Type and Contract Type | Southwest’s operating revenues included 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, in addition to other categories of revenue:
(1) Amounts include late fees and other miscellaneous revenues, and may also include the impact of certain regulatory mechanisms. Also includes the impacts of a temporary moratorium on late fees and disconnection for nonpayment during the COVID-19 pandemic. 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 Company identified a misstatement in the first quarter 2022 disclosure which resulted in an understatement of $88.8 million in the master services agreement category and an overstatement by the same amount in the bid contract category. Management concluded this item was not material to the previously issued financial statements and revised the disclosures for the three- and twelve- months ended March 31, 2022.MountainWest Regulated operations revenues on the Condensed Consolidated Statements of Income of the Company include revenue from contracts with customers, which is shown below, disaggregated by categories of sales and service activities. The information for 2023 reflects activity from January 1, 2023 through February 13, 2023 (the last full day of ownership).
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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 assets), both of which are included within Accounts receivable, net of allowances, as well as amounts billed in excess of revenue earned on contracts (contract liabilities), which are included in Other current liabilities as of March 31, 2023 and December 31, 2022 on the Company’s Condensed Consolidated Balance Sheets:
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Schedule of Utility Infrastructure Services Contracts Receivable | Utility infrastructure services contracts receivable consists of the following:
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Common Stock (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Common Stock Activity | The following table provides the life-to-date activity under that program through March 31, 2023:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amounts and Estimated Fair Values of Long-Term Debt | Details surrounding the fair value and individual carrying values of instruments are provided in the table that follows.
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Other Comprehensive Income and Accumulated Other Comprehensive Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss) | Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss)
(1)Tax amounts are calculated using a 24% rate. The Company has elected to indefinitely reinvest, in Canada, the earnings of Centuri’s Canadian subsidiaries, thus precluding 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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Schedule of Rollforward of Accumulated Other Comprehensive Income | The following table represents a rollforward of AOCI, presented on the Company’s Condensed Consolidated Balance Sheets and its Condensed Consolidated Statements of Equity:
(1)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). (2)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). (3)Tax amounts are calculated using a 24% rate. The following table represents a rollforward of AOCI, presented on Southwest’s Condensed Consolidated Balance Sheets:
(4)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). (5)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). (6)Tax amounts are calculated using a 24% rate.
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Schedule of 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:
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Accounts Receivable Not Eliminated During Consolidation | Accounts receivable for these services, which are not eliminated during consolidation, are presented in the table below:
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Schedule of Segment Reporting Information | The financial information pertaining to the natural gas distribution, utility infrastructure services, and pipeline and storage segments are as follows:
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Background, Organization, and Summary of Significant Accounting Policies - Schedule of Other Property and Investments (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
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Property, Plant and Equipment [Line Items] | ||
Other property and investments | $ 32,107 | $ 31,075 |
Total | (1,250,327) | (1,281,172) |
Non-regulated property, equipment, and intangibles | 1,698,327 | 1,677,218 |
Non-regulated accumulated provision for depreciation and amortization | (624,693) | (596,518) |
Southwest Gas Corporation | ||
Property, Plant and Equipment [Line Items] | ||
Net cash surrender value of COLI policies | 138,689 | 136,245 |
Other property and investments | 5,897 | 33,152 |
Total | $ (144,586) | $ (169,397) |
Background, Organization, and Summary of Significant Accounting Policies - Schedule of Goodwill (Details) $ in Thousands |
3 Months Ended |
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Mar. 31, 2023
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 787,250 |
Foreign currency translation adjustment | 84 |
Goodwill, ending balance | 787,334 |
Natural Gas Distribution | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 11,155 |
Foreign currency translation adjustment | 0 |
Goodwill, ending balance | 11,155 |
Utility Infrastructure Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 776,095 |
Foreign currency translation adjustment | 84 |
Goodwill, ending balance | $ 776,179 |
Background, Organization, and Summary of Significant Accounting Policies - Schedule of Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Weighted average basic shares (in shares) | 68,265 | 60,737 | 67,413 | 59,919 |
Effect of dilutive securities: | ||||
Restricted stock units (in shares) | 154 | 117 | 0 | 125 |
Weighted average diluted shares (in shares) | 68,419 | 60,854 | 67,413 | 60,044 |
Number of performance share units granted (in shares) | 132 | 112 | 149 | 114 |
Restricted Stock Units (RSUs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 166 |
Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
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Qualified Retirement Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 6,460 | $ 11,028 | $ 39,542 | $ 41,897 |
Interest cost | 14,791 | 11,251 | 48,546 | 41,575 |
Expected return on plan assets | (21,015) | (19,978) | (80,950) | (74,242) |
Amortization of net actuarial loss | 84 | 8,117 | 24,435 | 39,583 |
Net periodic benefit cost | 320 | 10,418 | 31,573 | 48,813 |
SERP | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 62 | 106 | 380 | 501 |
Interest cost | 531 | 360 | 1,612 | 1,433 |
Amortization of net actuarial loss | 249 | 588 | 2,011 | 2,570 |
Net periodic benefit cost | 842 | 1,054 | 4,003 | 4,504 |
PBOP | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 317 | 485 | 1,773 | 1,753 |
Interest cost | 825 | 613 | 2,664 | 2,258 |
Expected return on plan assets | (606) | (807) | (3,027) | (3,236) |
Amortization of prior service costs | 44 | 44 | 175 | 763 |
Net periodic benefit cost | $ 580 | $ 335 | $ 1,585 | $ 1,538 |
Revenue - Summary of Information about Receivables (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
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Revenue from Contract with Customer [Abstract] | ||
Contracts receivable, net | $ 322,558 | $ 394,022 |
Revenue earned on contracts in progress in excess of billings | 279,624 | 238,059 |
Amounts billed in excess of revenue earned on contracts | $ 39,595 | $ 35,769 |
Revenue - Narratives (Details) - Centuri $ in Millions |
Mar. 31, 2023
USD ($)
contract
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Segment Reporting Information [Line Items] | |
Number of contracts with original duration more than one year | contract | 62 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Segment Reporting Information [Line Items] | |
Transaction price allocated to unsatisfied performance obligations of contracts | $ | $ 458.2 |
Transaction price allocated to unsatisfied performance obligations of contracts, period | 2 years |
Revenue - Schedule of Utility Infrastructure Services Contracts Receivable (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
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Disaggregation of Revenue [Line Items] | ||
Contracts receivable, net | $ 322,558 | $ 394,022 |
Utility Infrastructure Services | ||
Disaggregation of Revenue [Line Items] | ||
Contracts receivable, gross | 327,266 | 398,340 |
Allowance for doubtful accounts | (4,708) | (4,318) |
Contracts receivable, net | 322,558 | 394,022 |
Utility Infrastructure Services | Billed on completed contracts and contracts in progress | ||
Disaggregation of Revenue [Line Items] | ||
Contracts receivable, gross | 325,528 | 395,771 |
Utility Infrastructure Services | Other receivables | ||
Disaggregation of Revenue [Line Items] | ||
Contracts receivable, gross | $ 1,738 | $ 2,569 |
Revenue - Schedule of Regulated Operations Revenues: Pipeline and Storage Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
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Segment Reporting Information [Line Items] | ||||
Total Regulated operations revenues | $ 950,011 | $ 743,532 | $ 2,406,161 | $ 1,743,390 |
Pipeline and Storage | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contracts with customers | 35,132 | 66,949 | ||
Other revenues | 0 | 44 | ||
Total Regulated operations revenues | 35,132 | 66,993 | ||
Pipeline and Storage | Regulated gas transportation and storage revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contracts with customers | 34,225 | 61,977 | ||
Pipeline and Storage | NGL revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contracts with customers | 441 | 1,493 | ||
Pipeline and Storage | Other revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contracts with customers | $ 466 | $ 3,479 |
Common Stock - Activity of Equity Shelf Program (Details) - USD ($) |
3 Months Ended | 12 Months Ended | 24 Months Ended | ||
---|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
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Class of Stock [Line Items] | |||||
Net proceeds | $ 239,337,000 | $ 453,495,000 | $ 247,670,000 | $ 618,146,000 | |
Equity Shelf Program | |||||
Class of Stock [Line Items] | |||||
Gross proceeds | $ 158,180,343 | ||||
Less: agent commissions | (1,581,803) | ||||
Net proceeds | $ 156,598,540 | ||||
Number of shares sold (in shares) | 2,302,407 | ||||
Weighted average price per share (in USD per share) | $ 68.70 |
Other Comprehensive Income and Accumulated Other Comprehensive Income - Amounts Recognized Before Tax, Defined Benefit Plans (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Equity [Abstract] | ||
Net actuarial loss | $ (359,780) | $ (360,113) |
Prior service cost | (1,309) | (1,353) |
Less: amount recognized in regulatory assets | 311,005 | 311,124 |
Recognized in AOCI | $ (50,084) | $ (50,342) |
Segment Information - Narratives (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Nov. 30, 2021
USD ($)
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Mar. 31, 2023
USD ($)
segment
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Mar. 31, 2022
USD ($)
|
Mar. 31, 2023
USD ($)
|
Mar. 31, 2022
USD ($)
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Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 3 | ||||
Segment Reporting Information [Line Items] | |||||
Interest expense | $ 77,334 | $ 48,363 | $ 271,721 | $ 143,597 | |
Corporate and administrative | |||||
Segment Reporting Information [Line Items] | |||||
Other costs | 35,000 | ||||
Corporate and administrative | MountainWest Acquisition Loan | |||||
Segment Reporting Information [Line Items] | |||||
Interest expense | $ 12,000 | $ 47,000 | |||
Debt issuance costs written off | $ 2,500 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | MountainWest | |||||
Segment Reporting Information [Line Items] | |||||
Disposition consideration adjustment | 28,400 | ||||
Loss on disposal adjustment | 21,000 | ||||
Accrued post-closing payment | $ 7,400 |
Segment Information - Accounts Receivable Not Eliminated During Consolidation (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Centuri | ||
Segment Reporting Information [Line Items] | ||
Centuri accounts receivable for services provided to Southwest | $ 14,966 | $ 18,067 |
Dispositions (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations - MountainWest - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Sep. 22, 2022 |
Dec. 31, 2022 |
Mar. 31, 2023 |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Ownership percentage disposed | 100.00% | ||
Discontinued operation, consideration | $ 1,500.0 | ||
Transition services agreement, period | 6 months | ||
Loss on disposal adjustment | $ 21.0 | ||
Accrued post-closing payment | 7.4 | ||
Loss contingency, damages sought period | 4 years | ||
Loss contingency, damages sought value (up to) | $ 75.0 | ||
Disposition consideration adjustment | $ 28.4 |
Label | Element | Value |
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Cash And Cash Equivalents Included In Current Assets Held For Sale | swx_CashAndCashEquivalentsIncludedInCurrentAssetsHeldForSale | $ 23,803,000 |
Cash And Cash Equivalents Included In Current Assets Held For Sale | swx_CashAndCashEquivalentsIncludedInCurrentAssetsHeldForSale | 0 |
Cash And Cash Equivalents Included In Current Assets Held For Sale | swx_CashAndCashEquivalentsIncludedInCurrentAssetsHeldForSale | $ 0 |
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