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 | ||||||||||||
N/A |
☒ | 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, 2024 |
2 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
March 31, 2024 | December 31, 2023 | |||||||||||||
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, $ issued and outstanding - | $ | $ | ||||||||||||
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 | ||||||||||||||
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, 2024 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
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 | ||||||||||||||
Other income and (expenses): | ||||||||||||||
Net interest deductions | ( | ( | ||||||||||||
Other income | ||||||||||||||
Total other (expenses) | ( | ( | ||||||||||||
Income before income taxes | ||||||||||||||
Income tax expense | ||||||||||||||
Net income | ||||||||||||||
Net income (loss) attributable to noncontrolling interests | ( | |||||||||||||
Net income attributable to Southwest Gas Holdings, Inc. | $ | $ | ||||||||||||
Earnings per share: | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | $ | $ | ||||||||||||
Weighted average shares: | ||||||||||||||
Basic | ||||||||||||||
Diluted |
4 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net income | $ | $ | ||||||||||||
Other comprehensive income, net of tax | ||||||||||||||
Defined benefit pension plans: | ||||||||||||||
Amortization of prior service cost | ||||||||||||||
Amortization of net actuarial loss | ||||||||||||||
Regulatory adjustment | ( | ( | ||||||||||||
Net defined benefit pension plans | ||||||||||||||
Foreign currency translation adjustments | ( | |||||||||||||
Total other comprehensive income (loss), net of tax | ( | |||||||||||||
Comprehensive income | ||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interests | ( | |||||||||||||
Comprehensive income attributable to Southwest Gas Holdings, Inc. | $ | $ |
5 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income 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 | ( | ( | ||||||||||||
Proceeds from the sale of business, net of cash sold | ||||||||||||||
Proceeds from the sale of property | ||||||||||||||
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 short-term portion of credit facility | ( | |||||||||||||
Change in long-term credit facility and commercial paper | ( | |||||||||||||
Issuance of short-term debt | ||||||||||||||
Repayment 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, 2024 |
Three Months Ended March 31, | |||||||||||||||||
2024 | 2023 | ||||||||||||||||
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 | |||||||||||||||||
Promissory notes in association with redeemable noncontrolling interest | |||||||||||||||||
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 | |||||||||||||||||
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, 2024 |
March 31, 2024 | December 31, 2023 | |||||||||||||
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 | ||||||||||||||
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: | ||||||||||||||
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, 2024 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
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 | ||||||||||||||
Total other (expenses) | ( | ( | ||||||||||||
Income before income taxes | ||||||||||||||
Income tax expense | ||||||||||||||
Net income | $ | $ |
9 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net income | $ | $ | ||||||||||||
Other comprehensive income, net of tax | ||||||||||||||
Defined benefit pension plans: | ||||||||||||||
Amortization of prior service cost | ||||||||||||||
Amortization of net actuarial loss | ||||||||||||||
Regulatory adjustment | ( | ( | ||||||||||||
Net defined benefit pension plans | ||||||||||||||
Total other comprehensive income, net of tax | ||||||||||||||
Comprehensive income | $ | $ |
10 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
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 | ||||||||||||||
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 | ( | ( | ||||||||||||
Proceeds from the sale of property | ||||||||||||||
Changes in customer advances | ( | ( | ||||||||||||
Other | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
CASH FLOW FROM FINANCING ACTIVITIES: | ||||||||||||||
Dividends paid | ( | ( | ||||||||||||
Issuance of long-term debt, net | ||||||||||||||
Change in long-term credit facility and commercial paper | ( | |||||||||||||
Issuance of short-term debt | ||||||||||||||
Repayment of short-term debt | ( | |||||||||||||
Withholding remittance - share-based compensation | ( | ( | ||||||||||||
Other | ( | ( | ||||||||||||
Net cash provided by (used in) 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, net | $ | $ |
11 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
Three Months Ended March 31, | |||||||||||||||||
2024 | 2023 | ||||||||||||||||
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 | |||||||||||||||||
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, 2024 |
13 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
(Thousands of dollars) | March 31, 2024 | December 31, 2023 | |||||||||
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, 2024 |
(Thousands of dollars) | Natural Gas Distribution | Utility Infrastructure Services | Total Company | |||||||||||||||||
December 31, 2023 | $ | $ | $ | |||||||||||||||||
Foreign currency translation adjustment | ( | ( | ||||||||||||||||||
March 31, 2024 | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
(Thousands of dollars) | 2024 | 2023 | |||||||||
Southwest Gas Corporation: | |||||||||||
Change in COLI policies | $ | $ | |||||||||
Interest income | |||||||||||
Equity AFUDC | |||||||||||
Other components of net periodic benefit cost | |||||||||||
Miscellaneous expense | ( | ( | |||||||||
Southwest Gas Corporation - total other income (deductions) | |||||||||||
Centuri, MountainWest, and Southwest Gas Holdings, Inc.: | |||||||||||
Foreign transaction gain (loss) | ( | ||||||||||
Equity AFUDC | |||||||||||
Equity in earnings (loss) 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, 2024 |
(Thousands of dollars): | Linetec | Drum | Total | |||||||||||||||||
Balance, December 31, 2023 | $ | $ | $ | |||||||||||||||||
Net income (loss ) attributable to redeemable noncontrolling interests | ( | ( | ||||||||||||||||||
Redemption value adjustments | ||||||||||||||||||||
Redemption of equity interest from noncontrolling party | ( | ( | ( | |||||||||||||||||
Balance, March 31, 2024 | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Weighted average basic shares | ||||||||||||||
Effect of dilutive securities: | ||||||||||||||
Restricted stock units (1) | ||||||||||||||
Weighted average diluted shares |
16 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
17 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
Qualified Retirement Plan | |||||||||||
March 31, | |||||||||||
Three Months | |||||||||||
2024 | 2023 | ||||||||||
(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 | |||||||||||
2024 | 2023 | ||||||||||
(Thousands of dollars) | |||||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Amortization of net actuarial loss | |||||||||||
Net periodic benefit cost | $ | $ | |||||||||
PBOP | |||||||||||
March 31, | |||||||||||
Three Months | |||||||||||
2024 | 2023 | ||||||||||
(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, 2024 |
Three Months Ended March 31, | |||||||||||
(Thousands of dollars) | 2024 | 2023 | |||||||||
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, | |||||||||||
(Thousands of dollars) | 2024 | 2023* | |||||||||
Service Types: | |||||||||||
Gas infrastructure services | $ | $ | |||||||||
Electric power infrastructure services | |||||||||||
Other | |||||||||||
Total Utility infrastructure services revenues | $ | $ |
19 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
Three Months Ended March 31, | |||||||||||
(Thousands of dollars) | 2024 | 2023 | |||||||||
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 | $ | $ |
(Thousands of dollars) | March 31, 2024 | December 31, 2023 | |||||||||
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, 2024 | December 31, 2023 | |||||||||
Billed on completed contracts and contracts in progress | $ | $ | |||||||||
Other receivables | |||||||||||
Contracts receivable, gross | |||||||||||
Allowance for doubtful accounts | ( | ( | |||||||||
Contracts receivable, net | $ | $ |
20 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
21 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||||||
(Thousands of dollars) | ||||||||||||||||||||||||||
Southwest Gas Corporation: | ||||||||||||||||||||||||||
Debentures: | ||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
Medium-term notes, | ||||||||||||||||||||||||||
Medium-term notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
Notes, | ||||||||||||||||||||||||||
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, 2024 |
23 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||
(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 | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Total other comprehensive income (loss) - Southwest Gas Corporation | ( | ( | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | ||||||||||||||||||||||||||||||||||||
Total other comprehensive income (loss) - Southwest Gas Holdings, Inc. | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ |
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, 2023 | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
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, 2024 | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( |
Defined Benefit Plans | ||||||||||||||||||||
(Thousands of dollars) | Before-Tax | Tax (Expense) Benefit (6) | After-Tax | |||||||||||||||||
Beginning Balance AOCI December 31, 2023 | $ | ( | $ | $ | ( | |||||||||||||||
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, 2024 | $ | ( | $ | $ | ( |
24 |
SOUTHWEST GAS HOLDINGS, INC. | Form 10-Q | |||||||
SOUTHWEST GAS CORPORATION | March 31, 2024 |
(Thousands of dollars) | March 31, 2024 | December 31, 2023 | ||||||||||||
Net actuarial loss | $ | ( | $ | ( | ||||||||||
Prior service cost | ( | ( | ||||||||||||
Less: amount recognized in regulatory assets | ||||||||||||||
Recognized in AOCI | $ | ( | $ | ( |
(Thousands of dollars) | March 31, 2024 | December 31, 2023 | |||||||||
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, 2024 | |||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Intersegment revenues | — | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Segment net income (loss) | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Intersegment revenues | — | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Segment net income (loss) | $ | $ | ( | $ | ( | $ | ( | $ |
25 |
26 |
27 |
28 |
Period Ended March 31, | ||||||||||||||
Three Months | ||||||||||||||
(In thousands, except per share amounts) | 2024 | 2023 | ||||||||||||
Contribution to net income | ||||||||||||||
Natural gas distribution | $ | 135,825 | $ | 134,696 | ||||||||||
Utility infrastructure services | (36,230) | (11,872) | ||||||||||||
Pipeline and storage | — | (16,288) | ||||||||||||
Corporate and administrative | (11,858) | (60,625) | ||||||||||||
Net income | $ | 87,737 | $ | 45,911 | ||||||||||
Weighted average common shares | 71,728 | 68,265 | ||||||||||||
Basic earnings per share | ||||||||||||||
Consolidated | $ | 1.22 | $ | 0.67 | ||||||||||
Natural Gas Distribution | ||||||||||||||
Reconciliation of Gross Margin to Operating Margin (Non-GAAP measure) | ||||||||||||||
Utility Gross Margin | $ | 256,808 | $ | 259,364 | ||||||||||
Plus: | ||||||||||||||
Operations and maintenance (excluding Admin. & General) expense | 81,305 | 79,696 | ||||||||||||
Depreciation and amortization expense | 84,823 | 74,650 | ||||||||||||
Operating margin | $ | 422,936 | $ | 413,710 |
29 |
Three Months Ended March 31, | ||||||||||||||
(Thousands of dollars) | 2024 | 2023 | ||||||||||||
Regulated operations revenues | $ | 1,052,933 | $ | 914,879 | ||||||||||
Net cost of gas sold | 629,997 | 501,169 | ||||||||||||
Operating margin | 422,936 | 413,710 | ||||||||||||
Operations and maintenance expense | 130,866 | 131,188 | ||||||||||||
Depreciation and amortization | 84,823 | 74,650 | ||||||||||||
Taxes other than income taxes | 22,903 | 22,740 | ||||||||||||
Operating income | 184,344 | 185,132 | ||||||||||||
Other income | 18,100 | 18,443 | ||||||||||||
Net interest deductions | 36,444 | 38,622 | ||||||||||||
Income before income taxes | 166,000 | 164,953 | ||||||||||||
Income tax expense | 30,175 | 30,257 | ||||||||||||
Contribution to consolidated results | $ | 135,825 | $ | 134,696 |
30 |
Three Months Ended March 31, | ||||||||||||||
(Thousands of dollars) | 2024 | 2023 | ||||||||||||
Utility infrastructure services revenues | $ | 528,023 | $ | 653,293 | ||||||||||
Operating expenses: | ||||||||||||||
Utility infrastructure services expenses | 515,643 | 603,680 | ||||||||||||
Depreciation and amortization | 34,319 | 37,870 | ||||||||||||
Operating income (loss) | (21,939) | 11,743 | ||||||||||||
Other income (deductions) | 32 | (680) | ||||||||||||
Net interest deductions | 24,099 | 22,376 | ||||||||||||
Loss before income taxes | (46,006) | (11,313) | ||||||||||||
Income tax benefit | (9,601) | (1,180) | ||||||||||||
Net loss | (36,405) | (10,133) | ||||||||||||
Net income (loss) attributable to noncontrolling interests | (175) | 1,739 | ||||||||||||
Contribution to consolidated results | $ | (36,230) | $ | (11,872) |
31 |
32 |
33 |
(Thousands of dollars) | March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||||
Arizona | $ | 135,899 | $ | 251,416 | $ | 417,931 | ||||||||||||||
Northern Nevada | 3,103 | 45,757 | 80,540 | |||||||||||||||||
Southern Nevada | 38,873 | 218,761 | 415,146 | |||||||||||||||||
California | 20,807 | 36,951 | 56,722 | |||||||||||||||||
$ | 198,682 | $ | 552,885 | $ | 970,339 |
34 |
35 |
36 |
37 |
38 |
39 |
Exhibit 10.1 | - | ||||||||||
Exhibit 10.2 | - | ||||||||||
Exhibit 10.3 | - | ||||||||||
Exhibit 10.4 | - | ||||||||||
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, 2024, 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. |
40 |
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 |
41 |
/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, 2024 |
Dec. 31, 2023 |
---|---|---|
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) | 71,665,592 | 71,563,750 |
Common stock, outstanding (in shares) | 71,665,592 | 71,563,750 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 87,562 | $ 47,650 |
Defined benefit pension plans: | ||
Amortization of prior service cost | 33 | 33 |
Amortization of net actuarial loss | 1,451 | 253 |
Regulatory adjustment | (1,100) | (90) |
Net defined benefit pension plans | 384 | 196 |
Foreign currency translation adjustments | (2,819) | 97 |
Total other comprehensive income (loss), net of tax | (2,435) | 293 |
Comprehensive income | 85,127 | 47,943 |
Comprehensive income (loss) attributable to noncontrolling interests | (175) | 1,739 |
Comprehensive income attributable to Southwest Gas Holdings, Inc. | $ 85,302 | $ 46,204 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - Southwest - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Net income | $ 87,562 | $ 47,650 |
Defined benefit pension plans: | ||
Amortization of prior service cost | 33 | 33 |
Amortization of net actuarial loss | 1,451 | 253 |
Regulatory adjustment | (1,100) | (90) |
Net defined benefit pension plans | 384 | 196 |
Total other comprehensive income (loss), net of tax | (2,435) | 293 |
Comprehensive income | 85,127 | 47,943 |
Southwest Gas Corporation | ||
Net income | 135,825 | 134,696 |
Defined benefit pension plans: | ||
Amortization of prior service cost | 33 | 33 |
Amortization of net actuarial loss | 1,451 | 253 |
Regulatory adjustment | (1,100) | (90) |
Net defined benefit pension plans | 384 | 196 |
Total other comprehensive income (loss), net of tax | 384 | 196 |
Comprehensive income | $ 136,209 | $ 134,892 |
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, 2022 | 67,119,000 | 47,482,000 | ||||||||
Beginning balance at Dec. 31, 2022 | $ 68,749 | $ 49,112 | $ 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 | ||||||||
Dividends declared to Southwest Gas Holdings, Inc. | (44,635) | (39,600) | ||||||||
Ending balance (in shares) at Mar. 31, 2023 | 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, 2023 | 71,563,750 | 71,564,000 | 47,482,000 | |||||||
Beginning balance at Dec. 31, 2023 | $ 73,194 | $ 49,112 | 2,541,790 | 2,156,577 | (43,787) | (40,548) | 738,839 | 1,018,474 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 87,737 | 135,825 | ||||||||
Share-based compensation | (259) | (327) | ||||||||
Net actuarial gain arising during period, less amortization of unamortized benefit plan cost, net of tax | 384 | 384 | ||||||||
Dividends declared to Southwest Gas Holdings, Inc. | (44,699) | (41,699) | ||||||||
Ending balance (in shares) at Mar. 31, 2024 | 71,665,592 | 71,665,000 | 47,482,000 | |||||||
Ending balance at Mar. 31, 2024 | $ 3,277,539 | $ 73,295 | $ 49,112 | $ 2,547,485 | $ 2,156,318 | $ (46,222) | $ (40,164) | $ 781,683 | $ 1,112,273 |
Background, Organization, and Summary of Significant Accounting Policies |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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), and through the first quarter of 2024, all of the shares of common stock of Centuri Group, Inc. (“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). References throughout this document in reference to “Centuri” relate to Centuri Group, Inc., for earlier periods or more recently, to Centuri Holdings, Inc. 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”). The MountainWest sale closed on February 14, 2023. As part of this simplification strategy, the Company previously communicated that it would pursue a separation of Centuri. In April 2024, the Company announced the completion of an initial public offering (“IPO”) of Centuri Holdings, Inc. common stock, with the issuance of 14,260,000 shares ($0.01 par value) at $21.00 per share, along with a private placement of 2,591,929 shares at the same public offering price with Icahn Partners LP and Icahn Partners Master Fund LP, investment entities associated with Carl C. Icahn. The Company owns approximately 81% of Centuri following these events. Through the first quarter of 2024 and leading up to the IPO, Centuri continued to be wholly owned by Southwest Gas Holdings, Inc. Centuri continues to be consolidated as part of these financial statements, and will continue to be consolidated until such time as the conditions for consolidation are no longer met. Centuri now makes separate filings with the Securities and Exchange Commission (the “SEC”) as a public company. The Company’s common stock continues to trade under the ticker symbol “SWX,” while Centuri’s common stock trades under the ticker symbol “CTRI.” As part of the IPO and related undertakings, and to ultimately facilitate a full separation of Centuri over periods ahead, multiple agreements were executed between the Company and Centuri, including a Separation Agreement, a Tax Matters Agreement, and a Registration Rights Agreement. Centuri’s new Board of Directors includes certain overlapping board members with the Company, including Andrew W. Evans, Anne L. Mariucci, and Karen S. Haller (the Company’s Chief Executive Officer). See also Note 8 - Dispositions. 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, highlighted by the significant amount of cash existing as of the end of the first quarter of 2024, reflective of the collection of gas cost under purchased gas cost mechanisms as a component of customer bills. While mechanisms exist in all states in which Southwest operates, which effectively and primarily decouple authorized operating cost recovery and profitability from the volume of natural gas sold, thereby also incentivizing energy conservation, 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 SEC. The year-end 2023 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. 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, as well as 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 of Southwest and the Company included in our 2023 Annual Report on Form 10-K for the fiscal year ended December 31, 2023. 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 earlier period or to the period of correction. Other Property and Investments. Other property and investments on Southwest’s and the Company’s Condensed Consolidated Balance Sheets includes:
Held for sale. In the first quarter of 2023, the Company and Southwest concluded certain assets associated with their previous corporate headquarters met the criteria to be classified as held for sale. 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 in the first quarter of 2023. In 2023, the Company and Southwest recorded an estimated loss of $5.2 million on the assets based upon an updated fair value less costs to sell. The sale was completed in January 2024. Cash and Cash Equivalents. Cash and cash equivalents of the Company include $407.4 million and $48.9 million of money market fund investments at March 31, 2024 and December 31, 2023, respectively. Of these amounts, $407.2 million and $38.6 million at March 31, 2024 and December 31, 2023, respectively, were held by Southwest. Refer to discussion above regarding recent collections under Southwest’s purchased gas adjustment mechanisms. Noncash investing activities include capital expenditures that were not yet paid, thereby remaining in accounts payable, amounts related to which declined by approximately $20.8 million and $9.6 million during the three months ended March 31, 2024, for the Company and Southwest, respectively; and declined approximately $37.3 million and $34.2 million during the three months ended March 31, 2023, for the Company and Southwest, respectively. The Company and Southwest expanded their presentation in the first quarter 2024 to show the Change in short-term portion of credit facility and Repayment of short-term debt as separate line items within their Condensed Consolidated Statements of Cash Flows. The comparable prior-year period has been updated to reflect this change. Prepaid and other current assets. Prepaid and other current assets for the Company and Southwest include, among other things, materials and operating supplies of $80.9 million at March 31, 2024 and $83.4 million at December 31, 2023 (carried at weighted average cost). Goodwill. Goodwill is assessed as of October 1 each year for impairment, or more frequently, if circumstances indicate an impairment to the carrying value of goodwill may have occurred. The Company’s reporting units for goodwill are its operating segments, which are also its reportable segments. Since December 31, 2023, management qualitatively assessed whether events during the first three months of 2024 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, no impairment was deemed to have occurred in the continuing segments of the Company. Goodwill in the Natural Gas Distribution and Utility Infrastructure Services segments is included in the 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 $44.4 million of dividends declared as of both March 31, 2024 and December 31, 2023, respectively. Also included in the balance for the Company and Southwest was $120.3 million and $87.6 million in accrued purchased gas cost as of March 31, 2024 and December 31, 2023, respectively. 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:
Interest income primarily relates to Southwest’s regulatory asset balances, including its deferred purchased gas cost mechanisms, the combined balance of which ranged from $970 million as of March 31, 2023 to $199 million as of March 31, 2024. 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, agreed to a partial 5% redemption (of the 15% then remaining). Then again in April 2023, Centuri paid $39.9 million to the previous owner, thereby reducing the balance continuing to be redeemable at that time to 10% under the terms of the original agreement. In March 2024, the parties entered into an agreement to redeem the remaining 10% equity interest for $92 million, which resulted in Centuri owning all of the equity interest in Linetec as of March 31, 2024. The Company paid the $92 million in April, in accordance with the agreement. The impact of this transaction has been excluded from the Company’s Condensed Consolidated Statement of Cash Flows for the first quarter of 2024 due to its noncash nature during the period. Separately, certain members of Riggs Distler management have a 1.41% interest in Drum, which is redeemable, subject to certain rights based on the passage of time or upon the occurrence of certain triggering events. A portion of the redeemable noncontrolling interest was funded through promissory notes made to noncontrolling interest holders bearing interest at the prime rate plus 2%. During the first quarter of 2024, Centuri forgave all outstanding promissory notes and unpaid interest owed from the Riggs Distler noncontrolling interest holders and in exchange obtained 0.47% portion of the equity interest in Drum that had been funded through these notes. This comprises most of the change noted below as redemption of Drum interests during the quarter. Additionally, during the first quarter of 2024, Centuri reached an agreement to purchase 0.13% of the noncontrolling interest in Drum for $0.8 million, the majority which was accrued in March 2024 and ultimately paid in April 2024. The impact of the accrued amount has been excluded from the Company’s Condensed Consolidated Statement of Cash Flows for the first quarter of 2024 due to the noncash nature in advance of the April 2024 payment. The remaining noncontrolling interest in Drum outstanding as of March 31, 2024 was 0.81%, with Centuri owning over 99% of Drum following these 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. 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 securities included 136,000 and 132,000 performance shares during the three months ended March 31, 2024 and March 31, 2023, 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 16.3% for the three months ended March 31, 2024, compared to 37.6% for the corresponding period in 2023. The effective rate decrease was primarily due to the MountainWest sale in 2023, which also included the impact of book versus tax basis differences related to the transaction (See Note 8 - Dispositions). Southwest’s effective tax rate was 18.2% for the three months ended March 31, 2024, compared to 18.3% for the corresponding period in 2023. 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 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. Recently issued accounting pronouncement that will be effective in 2024 and later periods: In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The update, among other amendments, requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, as well as an amount and description of the composition of other segment items to reconcile to segment profit or loss, and also requires the title and position of the entity’s CODM to be disclosed. The update additionally extends certain annual disclosures to interim periods. The provisions of the update are effective for fiscal years beginning after December 15, 2023 and interim periods within the fiscal years beginning after December 15, 2024. Early adoption is permitted. Management is evaluating the impacts this update might have on the Company’s and Southwest’s disclosures. Recently issued accounting pronouncement that will be effective after 2024: In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The update, among other amendments, provides for enhanced income tax information primarily through changes in the rate reconciliation and income taxes paid. The update is effective for annual periods beginning after December 15, 2024; early adoption is permitted. Management is evaluating the impacts this update might have on the Company’s and Southwest’s disclosures.
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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 (those hired before 2022) and a separate unfunded supplemental retirement plan (“SERP”), which is limited to officers 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 | Note 3 – Revenue The following information about the Company’s revenues is presented by segment. Southwest encompasses the natural gas distribution segment and Centuri encompasses the utility infrastructure services 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. Utility Infrastructure Services Segment: During the fourth quarter of 2023, Utility infrastructure services segment management, in connection with Centuri’s planned separation, changed its service type revenue classification to align with changes in its organizational structure, and as a result, prior year “other” revenue has been recast into gas infrastructure services or electric power infrastructure services to reflect these changes, with no impact to revenue overall. 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 three months ended March 31, 2023 were previously presented as: Gas infrastructure services of $297,408, Electric power infrastructure services of $233,640, and Other of $122,245.
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) at Centuri, which are included in Other current liabilities as of March 31, 2024 and December 31, 2023 on the Company’s Condensed Consolidated Balance Sheets:
Revenue earned on contracts in progress in excess of billings (contract assets) that are not expected to be recognized within a year from the financial statement date are not included in the table above, and were $16.5 million as of March 31, 2024, and $0.2 million as of December 31, 2023. These non-current balances were included in Deferred charges and other assets on the Company’s Condensed Consolidated Balance Sheets. These contract assets primarily relate to Centuri’s rights to consideration for work completed, but not billed and/or approved for billing at the reporting date, and are transferred to contracts receivable when the rights become unconditional. The amounts billed in excess of revenue earned primarily relate to the advance consideration received from customers for which work has not yet been completed. The decrease in the contract liability balance from December 31, 2023 to March 31, 2024 of $30 million was due to revenue recognized during the period, net of new payments received in advance of work performed. 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, 2024, Centuri had 53 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, 2024 was $277 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:
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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 (for award grants prior to 2024 that continue to be subject to time-based vesting) is based on stock awards to be issued in shares of Southwest Gas Holdings, Inc. In November 2023, the Company and Southwest jointly filed an automatic shelf registration statement (File No. 333-275774), which became effective upon filing. The prior shelf registration expired in December 2023. Upon expiration of the prior shelf registration, the Company’s equity shelf program was terminated. The Company intends to enter into a similar program during 2024. During the three months ended March 31, 2024, the Company issued approximately 67,000 shares of common stock through the Omnibus Incentive Plan. Additionally, during the three months ended March 31, 2024, the Company issued 35,000 shares of common stock through the Dividend Reinvestment and Stock Purchase Plan, raising approximately $2.4 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, 2024, 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, 2024, 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 and term loan facility are based on either a “base rate,” SOFR or the Canadian Dollar Offered Rate (“CDOR”), 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, 2024 totaled $2.4 billion. At March 31, 2024, $1.1 billion in borrowings were outstanding under Centuri’s combined secured revolving credit and term loan facility. On March 22, 2024, Centuri amended the financial covenants of its revolving credit facility to increase the maximum total net leverage ratio for the fiscal quarter ending March 31, 2024 to a ratio of 5.75 to 1.00, for the fiscal quarter ending June 30, 2024 to a ratio of 6.00 to 1.00, and for the fiscal quarter ending September 30, 2024 to a ratio of 5.75 to 1.00. In addition, this amendment increased the adjusted maximum total net leverage ratio financial covenants, which are applicable in the event that a “Qualified IPO” (as defined in the amendment) is consummated, for each of the fiscal quarters ending March 31, 2024, June 30, 2024, and September 30, 2024. The terms of the Centuri credit facility otherwise remain unchanged. Following the IPO and private placement, Centuri used approximately $316 million of proceeds to pay down $156 million of debt under the existing line of credit and $160 million of debt under the term loan portion of the facility, with the remainder intended for 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 $94 million outstanding under this credit facility as of March 31, 2024. In April 2023, Southwest Gas Holdings, Inc. entered into a $550 million Term Loan Credit Agreement (the “Term Loan”) that matures in October 2024. Southwest Gas Holdings, Inc. utilized a majority of the proceeds to make an equity contribution to Southwest. As indicated above, under Southwest’s $400 million credit facility, no short-term borrowings were outstanding at March 31, 2024.
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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 has two reportable segments. Southwest comprises the natural gas distribution segment and Centuri comprises the utility infrastructure services segment. As a result of the MountainWest sale in February 2023 (previously comprising the pipeline and storage segment), the information for the three months ended March 31, 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 the table 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 months ending March 31, 2024 include approximately $11 million of interest expense, including amounts incurred under the $550 million Term Loan entered into in April 2023, along with $2.7 million in costs associated with the planned separation of Centuri, offset by tax benefits experienced during the quarter.
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Dispositions |
3 Months Ended |
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Mar. 31, 2024 | |
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 in an all-cash transaction to Williams for $1.5 billion in total enterprise value, subject to certain adjustments. The MountainWest sale was completed in February 2023. Additionally, the Company determined it would pursue a separation of Centuri to form a new independent publicly traded utility infrastructure services company. As discussed in Note 1 - Background, Organization, and Summary of Significant Accounting Policies, in April 2024, the Company and Centuri Holdings, Inc. announced the completion of an IPO of 12,400,000 shares of Centuri’s common stock at a price of $21.00 per share. Centuri granted the underwriters a 30-day option to purchase up to an additional 1,860,000 shares of its common stock, which was exercised. In addition, Centuri announced the concurrent private placement of an additional 2,591,929 shares at a price equal to the IPO price. Centuri’s common stock is listed on the New York Stock Exchange under the symbol “CTRI” and began trading on April 18, 2024. The net proceeds to Centuri from the IPO and the concurrent private placement, after deducting underwriting discounts and commissions of $18 million and estimated offering expenses, were approximately $329 million. Centuri used the proceeds to repay a portion (approximately $316 million) of outstanding indebtedness under its revolving credit and term loan facility, with the remainder for general corporate purposes. After completion of the IPO, and above undertakings, the Company continues to own approximately 81.0% of all ownership interests in Centuri. The Company intends to further reduce its ownership in future periods through sales of its remaining Centuri shares into the market, a distribution of Centuri shares to Company stockholders, or an exchange of Centuri shares for Southwest Gas Holdings, Inc. shares, or a combination thereof. The Company entered into several agreements with Centuri Holdings, Inc. in connection with the IPO and the planned separation, providing a framework for the relationship between the Company and Centuri after the IPO.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Net income (loss) | $ 87,737 | $ 45,911 |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Background, Organization, and Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
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), and through the first quarter of 2024, all of the shares of common stock of Centuri Group, Inc. (“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). References throughout this document in reference to “Centuri” relate to Centuri Group, Inc., for earlier periods or more recently, to Centuri Holdings, Inc. 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, highlighted by the significant amount of cash existing as of the end of the first quarter of 2024, reflective of the collection of gas cost under purchased gas cost mechanisms as a component of customer bills. While mechanisms exist in all states in which Southwest operates, which effectively and primarily decouple authorized operating cost recovery and profitability from the volume of natural gas sold, thereby also incentivizing energy conservation, 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.
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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 SEC. The year-end 2023 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. 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, as well as 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 of Southwest and the Company included in our 2023 Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
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Held for sale | Held for sale. In the first quarter of 2023, the Company and Southwest concluded certain assets associated with their previous corporate headquarters met the criteria to be classified as held for sale. 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 in the first quarter of 2023. In 2023, the Company and Southwest recorded an estimated loss of $5.2 million on the assets based upon an updated fair value less costs to sell. The sale was completed in January 2024. |
Cash and Cash Equivalents | Cash and Cash Equivalents. Cash and cash equivalents of the Company include $407.4 million and $48.9 million of money market fund investments at March 31, 2024 and December 31, 2023, respectively. Of these amounts, $407.2 million and $38.6 million at March 31, 2024 and December 31, 2023, respectively, were held by Southwest. Refer to discussion above regarding recent collections under Southwest’s purchased gas adjustment mechanisms. Noncash investing activities include capital expenditures that were not yet paid, thereby remaining in accounts payable, amounts related to which declined by approximately $20.8 million and $9.6 million during the three months ended March 31, 2024, for the Company and Southwest, respectively; and declined approximately $37.3 million and $34.2 million during the three months ended March 31, 2023, for the Company and Southwest, respectively.
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Prepaid and other current assets | Prepaid and other current assets. Prepaid and other current assets for the Company and Southwest include, among other things, materials and operating supplies of $80.9 million at March 31, 2024 and $83.4 million at December 31, 2023 (carried at weighted average cost).
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Goodwill | Goodwill. Goodwill is assessed as of October 1 each year for impairment, or more frequently, if circumstances indicate an impairment to the carrying value of goodwill may have occurred. The Company’s reporting units for goodwill are its operating segments, which are also its reportable segments. Since December 31, 2023, management qualitatively assessed whether events during the first three months of 2024 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, no impairment was deemed to have occurred in the continuing segments of the Company. |
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. |
Redeemable Noncontrolling Interests | 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. Valuation adjustments also impact retained earnings, as reflected in the Company’s Condensed Consolidated Statement of Equity, but do not impact net income. |
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. |
Income Taxes | Income Taxes. The Company’s effective tax rate was 16.3% for the three months ended March 31, 2024, compared to 37.6% for the corresponding period in 2023. The effective rate decrease was primarily due to the MountainWest sale in 2023, which also included the impact of book versus tax basis differences related to the transaction (See Note 8 - Dispositions). Southwest’s effective tax rate was 18.2% for the three months ended March 31, 2024, compared to 18.3% for the corresponding period in 2023. 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 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.
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Recent Accounting Standards Updates | Recent Accounting Standards Updates. Recently issued accounting pronouncement that will be effective in 2024 and later periods: In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The update, among other amendments, requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, as well as an amount and description of the composition of other segment items to reconcile to segment profit or loss, and also requires the title and position of the entity’s CODM to be disclosed. The update additionally extends certain annual disclosures to interim periods. The provisions of the update are effective for fiscal years beginning after December 15, 2023 and interim periods within the fiscal years beginning after December 15, 2024. Early adoption is permitted. Management is evaluating the impacts this update might have on the Company’s and Southwest’s disclosures. Recently issued accounting pronouncement that will be effective after 2024: In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The update, among other amendments, provides for enhanced income tax information primarily through changes in the rate reconciliation and income taxes paid. The update is effective for annual periods beginning after December 15, 2024; early adoption is permitted. Management is evaluating the impacts this update might have on the Company’s and Southwest’s disclosures.
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Background, Organization, and Summary of Significant Accounting Policies (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 the 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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Schedule 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:
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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] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule 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. 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 three months ended March 31, 2023 were previously presented as: Gas infrastructure services of $297,408, Electric power infrastructure services of $233,640, and Other of $122,245.
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Schedule 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) at Centuri, which are included in Other current liabilities as of March 31, 2024 and December 31, 2023 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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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable for Services | 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, 2024 |
Dec. 31, 2023 |
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Property, Plant and Equipment [Line Items] | ||
Other property and investments | $ 38,091 | $ 37,220 |
Non-regulated property, equipment, and intangibles | 1,750,380 | 1,752,094 |
Non-regulated accumulated provision for depreciation and amortization | (691,872) | (675,632) |
Total | 1,252,861 | 1,266,340 |
Southwest Gas Corporation | ||
Property, Plant and Equipment [Line Items] | ||
Net cash surrender value of COLI policies | 150,182 | 146,546 |
Other property and investments | 6,080 | 6,112 |
Total | $ 156,262 | $ 152,658 |
Background, Organization, and Summary of Significant Accounting Policies - Schedule of Goodwill (Details) $ in Thousands |
3 Months Ended |
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Mar. 31, 2024
USD ($)
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Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 789,729 |
Foreign currency translation adjustment | (2,523) |
Goodwill, ending balance | 787,206 |
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 | 778,574 |
Foreign currency translation adjustment | (2,523) |
Goodwill, ending balance | $ 776,051 |
Background, Organization, and Summary of Significant Accounting Policies - Other Income (Deductions) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
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Other income (deductions) | ||
Total other income (deductions) | $ 18,121 | $ 18,460 |
Corporate and administrative | ||
Other income (deductions) | ||
Total other income (deductions) | (11) | 270 |
Southwest Gas Corporation | ||
Other income (deductions) | ||
Change in COLI policies | 3,600 | 2,400 |
Interest income | 9,776 | 12,471 |
Equity AFUDC | 1,839 | 0 |
Other components of net periodic benefit cost | 4,131 | 4,959 |
Miscellaneous income and (expense) | (1,246) | (1,387) |
Total other income (deductions) | 18,100 | 18,443 |
Centuri, MountainWest And Southwest Gas Holdings, Inc. | ||
Other income (deductions) | ||
Foreign transaction gain (loss) | 102 | (690) |
Equity AFUDC | 0 | 82 |
Equity in earnings (loss) of unconsolidated investments | (113) | 360 |
Miscellaneous income and (expense) | $ 43 | $ (5) |
Background, Organization, and Summary of Significant Accounting Policies - Schedule of Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Weighted average basic shares (in shares) | 71,728 | 68,265 |
Effect of dilutive securities: | ||
Restricted stock units (in shares) | 154 | 154 |
Weighted average diluted shares (in shares) | 71,882 | 68,419 |
Number of performance share units granted (in shares) | 136 | 132 |
Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Qualified Retirement Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 7,063 | $ 6,460 |
Interest cost | 15,097 | 14,791 |
Expected return on plan assets | (21,953) | (21,015) |
Amortization of net actuarial loss | 1,577 | 84 |
Net periodic benefit cost | 1,784 | 320 |
SERP | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 61 | 62 |
Interest cost | 542 | 531 |
Amortization of net actuarial loss | 333 | 249 |
Net periodic benefit cost | 936 | 842 |
PBOP | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 322 | 317 |
Interest cost | 794 | 825 |
Expected return on plan assets | (565) | (606) |
Amortization of prior service costs | 44 | 44 |
Net periodic benefit cost | $ 595 | $ 580 |
Revenue - Summary of Information about Receivables (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
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Revenue from Contract with Customer [Abstract] | ||
Contracts receivable, net | $ 287,815 | $ 347,454 |
Revenue earned on contracts in progress in excess of billings | 257,830 | 269,808 |
Amounts billed in excess of revenue earned on contracts | $ 13,648 | $ 43,694 |
Revenue - Narrative (Details) $ in Millions |
3 Months Ended | |
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Mar. 31, 2024
USD ($)
contract
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Dec. 31, 2023
USD ($)
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Segment Reporting Information [Line Items] | ||
Contract assets increase (decrease) | $ 16.5 | $ 0.2 |
Decrease of contract liability | $ 30.0 | |
Centuri | ||
Segment Reporting Information [Line Items] | ||
Number of contracts with original duration more than one year | contract | 53 | |
Centuri | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | ||
Segment Reporting Information [Line Items] | ||
Transaction price allocated to unsatisfied performance obligations of contracts | $ 277.0 | |
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, 2024 |
Dec. 31, 2023 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Contracts receivable, net | $ 287,815 | $ 347,454 |
Utility Infrastructure Services | ||
Disaggregation of Revenue [Line Items] | ||
Contracts receivable, gross | 287,885 | 349,966 |
Allowance for doubtful accounts | (70) | (2,512) |
Contracts receivable, net | 287,815 | 347,454 |
Utility Infrastructure Services | Billed on completed contracts and contracts in progress | ||
Disaggregation of Revenue [Line Items] | ||
Contracts receivable, gross | 285,896 | 348,021 |
Utility Infrastructure Services | Other receivables | ||
Disaggregation of Revenue [Line Items] | ||
Contracts receivable, gross | $ 1,989 | $ 1,945 |
Common Stock - Narrative (Details) shares in Thousands, $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
shares
| |
Omnibus Incentive Plan | |
Class of Stock [Line Items] | |
Common stock issued (in shares) | 67 |
Dividend Reinvestment and Stock Purchase Plan | |
Class of Stock [Line Items] | |
Common stock issued (in shares) | 35 |
Common stock issued, amount | $ | $ 2.4 |
Other Comprehensive Income and Accumulated Other Comprehensive Income - Amounts Recognized Before Tax, Defined Benefit Plans (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Equity [Abstract] | ||
Net actuarial loss | $ (360,058) | $ (361,968) |
Prior service cost | (1,134) | (1,178) |
Less: amount recognized in regulatory assets | 308,346 | 309,794 |
Recognized in AOCI | $ (52,846) | $ (53,352) |
Segment Information - Narrative (Details) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024
USD ($)
segment
|
Mar. 31, 2023
USD ($)
|
Apr. 30, 2023
USD ($)
|
|
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 2 | ||
Segment Reporting Information [Line Items] | |||
Interest expense | $ 71,605,000 | $ 77,334,000 | |
SWH term loan facility | Secured Debt | |||
Segment Reporting Information [Line Items] | |||
Interest expense | 11,000,000 | ||
Debt instrument face amount | $ 550,000,000 | ||
Corporate and administrative | |||
Segment Reporting Information [Line Items] | |||
Spinoff transaction costs | $ 2,700,000 |
Segment Information - Accounts Receivable Not Eliminated During Consolidation (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Centuri accounts receivable for services provided to Southwest | $ 843,133 | $ 886,549 |
Centuri | Related Party | ||
Segment Reporting Information [Line Items] | ||
Centuri accounts receivable for services provided to Southwest | $ 8,409 | $ 13,017 |
Label | Element | Value |
---|---|---|
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 | $ 23,803,000 |
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