Note 7 – Equity, Other Comprehensive Income, and Accumulated Other Comprehensive Income

The table below provides details of activity in equity and the redeemable noncontrolling interest during the nine months ended September 30, 2015.


	Southwest Gas Corporation Equity
					Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)												Redeemable Noncontrolling Interest (Temporary Equity)
	Common Stock									Retained Earnings			Non-controlling Interest
(In thousands except per share amounts)	Shares		Amount							Retained Earnings			Non-controlling Interest			Total
DECEMBER 31, 2014		46,523	$	48,153	$	851,381	$	(50,175	)	$	639,164		$	(2,257	)	$	1,486,266		$	20,042
Common stock issuances		852		852		37,467											38,319
Net income (loss)											72,198			80			72,278			454
Redemption value adjustments						5,777					961						6,738			(6,738	)
Foreign currency exchange translation adj.								(1,518	)								(1,518	)		(55	)
Other comprehensive income (loss):
Net actuarial gain (loss) arising during period, less amortization of unamortized benefit plan cost, net of tax								2,124									2,124
Amounts reclassified to net income, net of tax (FSIRS)								1,556									1,556
Dividends declared
Common: $1.215 per share											(57,831	)					(57,831	)

SEPTEMBER 30, 2015		47,375	$	49,005	$	894,625	$	(48,013	)	$	654,492		$	(2,177	)	$	1,547,932		$	13,703

The following information provides insight into amounts impacting Other Comprehensive Income (Loss), both before and after-tax, within the Condensed Consolidated Statements of Comprehensive Income, which also impact Accumulated Other Comprehensive Income in the Company’s Condensed Consolidated Balance Sheets and the associated column in the equity table above. See Note 4 – Derivatives and Fair Value Measurements for additional information on the FSIRS.


Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss)
(Thousands of dollars)
	Three Months Ended September 30, 2015									Three Months Ended September 30, 2014
	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	$	334		$	(127	)	$	207		$	89		$	(34	)	$	55
Amortization of net actuarial (gain)/loss		8,595			(3,266	)		5,329			5,914			(2,247	)		3,667
Regulatory adjustment		(7,787	)		2,959			(4,828	)		(5,178	)		1,968			(3,210	)

Pension plans other comprehensive income (loss)		1,142			(434	)		708			825			(313	)		512

FSIRS (designated hedging activities):
Amounts reclassified into net income		836			(317	)		519			836			(318	)		518

FSIRS other comprehensive income		836			(317	)		519			836			(318	)		518

Foreign currency translation adjustments:
Translation adjustments		(510	)		—			(510	)		—			—			—

Foreign currency other comprehensive income (loss)		(510	)		—			(510	)		—			—			—

Total other comprehensive income (loss)	$	1,468		$	(751	)	$	717		$	1,661		$	(631	)	$	1,030


	Nine Months Ended September 30, 2015									Nine Months Ended September 30, 2014
	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	$	1,001		$	(380	)	$	621		$	266		$	(101	)	$	165
Amortization of net actuarial (gain)/loss		25,786			(9,799	)		15,987			17,742			(6,742	)	$	11,000
Regulatory adjustment		(23,361	)		8,877			(14,484	)		(15,533	)		5,903			(9,630	)

Pension plans other comprehensive income (loss)		3,426			(1,302	)		2,124			2,475			(940	)		1,535

FSIRS (designated hedging activities):
Amounts reclassifed into net income		2,508			(952	)		1,556			2,509			(954	)		1,555

FSIRS other comprehensive income		2,508			(952	)		1,556			2,509			(954	)		1,555

Foreign currency translation adjustments:
Translation adjustments		(1,573	)		—			(1,573	)		—			—			—

Foreign currency other comprehensive income (loss)		(1,573	)		—			(1,573	)		—			—			—

Total other comprehensive income (loss)	$	4,361		$	(2,254	)	$	2,107		$	4,984		$	(1,894	)	$	3,090


	Twelve Months Ended September 30, 2015									Twelve Months Ended September 30, 2014
	Before- Tax Amount			Tax (Expense) or Benefit (1)			Net-of- Tax Amount			Before- Tax Amount			Tax (Expense) or Benefit (1)			Net-of- Tax Amount
Defined benefit pension plans:
Net actuarial gain (loss)	$	(173,646	)	$	65,985		$	(107,661	)	$	100,345		$	(38,131	)	$	62,214
Amortization of prior service cost		1,090			(414	)		676			355			(134	)		221
Amortization of net actuarial (gain)/loss		31,700			(12,046	)		19,654			26,285			(9,988	)		16,297
Prior service cost		(6,661	)		2,531			(4,130	)		—			—			—
Regulatory adjustment		132,480			(50,343	)		82,137			(116,412	)		44,236			(72,176	)

Pension plans other comprehensive income (loss)		(15,037	)		5,713			(9,324	)		10,573			(4,017	)		6,556

FSIRS (designated hedging activities):
Amounts reclassified into net income		3,344			(1,270	)		2,074			3,345			(1,271	)		2,074

FSIRS other comprehensive income (loss)		3,344			(1,270	)		2,074			3,345			(1,271	)		2,074

Foreign currency translation adjustments:
Translation adjustments		(2,232	)		—			(2,232	)		—			—			—

Foreign currency other comprehensive income (loss)		(2,232	)		—			(2,232	)		—			—			—

Total other comprehensive income (loss)	$	(13,925	)	$	4,443		$	(9,482	)	$	13,918		$	(5,288	)	$	8,630

(1)

Tax amounts are calculated using a 38% rate. The Company has elected to indefinitely reinvest the earnings of Centuri’s Canadian subsidiaries in Canada, thus preventing deferred taxes on such earnings. As a result of this assertion, the Company is not recognizing any tax effect or presenting a tax expense or benefit for the currency translation adjustment amount reported in Other Comprehensive Income, as repatriation of earnings is not anticipated.

Approximately $2.1 million of realized losses (net of tax) related to the FSIRS, reported in Accumulated other comprehensive income (“AOCI”) at September 30, 2015, will be reclassified into interest expense within the next 12 months, as the related interest payments on long-term debt occur.

The following table represents a rollforward of AOCI, presented on the Company’s Condensed Consolidated Balance Sheets:


AOCI—Rollforward
(Thousands of dollars)
	Defined Benefit Plans									FSIRS									Foreign Currency Items
	Before-Tax			Tax (Expense) Benefit			After-Tax			Before-Tax			Tax (Expense) Benefit			After-Tax			Before-Tax			Tax (Expense) Benefit		After-Tax			AOCI
Beginning Balance AOCI December 31, 2014	$	(57,211	)	$	21,740		$	(35,471	)	$	(22,688	)	$	8,621		$	(14,067	)	$	(637	)	$	—	$	(637	)	$	(50,175	)

Translation adjustments		—			—			—			—			—			—			(1,573	)		—		(1,573	)		(1,573	)

Other comprehensive income before reclassifications		—			—			—			—			—			—			(1,573	)		—		(1,573	)		(1,573	)
FSIRS amounts reclassified from AOCI (1)		—			—			—			2,508			(952	)		1,556			—			—		—			1,556
Amortization of prior service cost (2)		1,001			(380	)		621			—			—			—			—			—		—			621
Amortization of net actuarial loss (2)		25,786			(9,799	)		15,987			—			—			—			—			—		—			15,987
Regulatory adjustment (3)		(23,361	)		8,877			(14,484	)		—			—			—			—			—		—			(14,484	)

Net current period other comprehensive income (loss)		3,426			(1,302	)		2,124			2,508			(952	)		1,556			(1,573	)		—		(1,573	)		2,107
Less: Translation adjustment attributable to redeemable noncontrolling interest		—			—			—			—			—			—			(55	)		—		(55	)		(55	)

Net current period other comprehensive income (loss) attributable to Southwest Gas Corporation		3,426			(1,302	)		2,124			2,508			(952	)		1,556			(1,518	)		—		(1,518	)		2,162

Ending Balance AOCI September 30, 2015	$	(53,785	)	$	20,438		$	(33,347	)	$	(20,180	)	$	7,669		$	(12,511	)	$	(2,155	)	$	—	$	(2,155	)	$	(48,013	)

(1)

The FSIRS reclassification amounts are included in the Net interest deductions line item on the Condensed Consolidated Statements of Income.

(2)

These AOCI components are included in the computation of net periodic benefit cost (see Note 2 – Components of Net Periodic Benefit Cost for additional details).

(3)

The regulatory adjustment represents the portion of the activity above that is expected to be recovered through rates in the future (the related regulatory asset is included in the Deferred charges and other assets line item on the Condensed Consolidated Balance Sheets).

The following table represents amounts (before income tax impacts) associated with defined benefit plans, and included in AOCI (in the table above), that have not yet been recognized in net periodic benefit cost:


Amounts Recognized in AOCI (Before Tax)
(Thousands of dollars)
	September 30, 2015			December 31, 2014
Net actuarial (loss) gain	$	(413,345	)	$	(439,131	)
Prior service cost		(7,372	)		(8,373	)
Less: amount recognized in regulatory assets		366,932			390,293

Recognized in AOCI	$	(53,785	)	$	(57,211	)