Revenue

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Note 3 – Revenue

The following information about the Company’s revenues is presented by segment. Southwest encompasses one segment – natural gas operations.

Natural Gas Operations Segment:

Gas operating revenues on the Condensed Consolidated Statements of Income of both the Company and Southwest include revenue from contracts with customers, which is shown below, disaggregated by customer type, and various categories of revenue:



	Three Months Ended						Twelve Months Ended
	March 31,						March 31,
(Thousands of dollars)	2019			2018			2019			2018
Residential	$	417,228		$	344,611		$	959,837		$	859,078
Small commercial	89,610			87,943			256,750			250,331
Large commercial	13,962			15,440			51,714			54,224
Industrial/other	6,478			6,510			23,457			23,085
Transportation	24,902			24,054			87,838			89,081
Revenue from contracts with customers	552,180			478,558			1,379,596			1,275,799
Alternative revenue program revenues (deferrals)	(34,545		)	27,209			(15,775		)	66,788
Other revenues (a)	3,042			(11,454		)	20,271			(8,568		)
Total Gas operating revenues	$	520,677		$	494,313		$	1,384,092		$	1,334,019


(a)	Includes various other revenues which, in the periods presented ending March 31, 2018, were offset by a $14 million reserve against revenue associated with a tax reform savings adjustment.

Utility Infrastructure Services Segment:

The following tables display Centuri’s revenue, reflected as Utility infrastructure services revenues on the Condensed Consolidated Statements of Income of the Company, representing revenue from contracts with customers disaggregated by service and contract types:



(Thousands of dollars)	Three Months Ended				Twelve Months Ended
	March 31,				March 31,
	2019		2018		2019		2018
Service Types:
Gas infrastructure services	$	197,893	$	193,527	$	1,128,048	$	938,342
Electric power infrastructure services	52,301		5,402		79,528		19,893
Other	62,668		61,088		367,554		356,131
Total Utility infrastructure services revenues	$	312,862	$	260,017	$	1,575,130	$	1,314,366



(Thousands of dollars)	Three Months Ended				Twelve Months Ended
	March 31,				March 31,
	2019		2018		2019		2018
Contract Types:
Master services agreement	$	235,655	$	194,464	$	1,143,603	$	932,804
Bid contract	77,207		65,553		431,527		381,562
Total Utility infrastructure services revenues	$	312,862	$	260,017	$	1,575,130	$	1,314,366

Unit priced contracts	$	235,686	$	197,322	$	1,296,783	$	1,013,642
Fixed priced contracts	38,538		25,541		130,295		137,724
Time and materials contracts	38,638		37,154		148,052		163,000
Total Utility infrastructure services revenues	$	312,862	$	260,017	$	1,575,130	$	1,314,366

The following table provides information about contracts receivable and revenue earned on contracts in progress in excess of billings (contract asset), which are both included within Accounts receivable, net of allowances, as well as amounts billed in excess

of revenue earned on contracts (contract liability), which are included in Other current liabilities as of March 31, 2019 and December 31, 2018 on the Company’s Condensed Consolidated Balance Sheets:



(Thousands of dollars)	March 31, 2019		December 31, 2018
Contracts receivable, net	$	160,973	$	186,249
Revenue earned on contracts in progress in excess of billings	97,642		87,520
Amounts billed in excess of revenue earned on contracts	4,588		4,211

The revenue earned on contracts in progress in excess of billings (contract asset) primarily relates to Centuri’s rights to consideration for work completed but not billed and/or approved at the reporting date. These contract assets are transferred to contracts receivable when the rights become unconditional. The amounts billed in excess of revenue earned (contract liability) primarily relates to the advance consideration received from customers for which work has not yet been completed. The change in this contract liability balance from December 31, 2018 to March 31, 2019 is due to revenue recognized of $4.2 million that was included in this item as of January 1, 2019, after which time it became earned and the balance was reduced, and to increases due to cash received, net of revenue recognized during the period related to contracts that commenced during the period.

For contracts that have an original duration of one year or less, Centuri uses the practical expedient applicable to such contracts and does not consider/compute an interest component based on the time value of money. Further, because of the short duration of these contracts, Centuri has not disclosed the transaction price for the remaining performance obligations as of the end of each reporting period or when the Company expects to recognize the revenue.

As of March 31, 2019, Centuri has seventeen contracts that had an original duration of more than one year. The aggregate amount of the transaction price allocated to the unsatisfied performance obligations of these contracts as of March 31, 2019 is $60.7 million. Centuri expects to recognize the remaining performance obligations over the next three years; however, the timing of that recognition is largely within the control of the customer, including when the necessary equipment and materials required to complete the work are provided by the customer.

Utility infrastructure services contracts receivable consists of the following:



(Thousands of dollars)	March 31, 2019			December 31, 2018
Billed on completed contracts and contracts in progress	$	159,829		$	184,100
Other receivables	1,527			2,588
Contracts receivable, gross	161,356			186,688
Allowance for doubtful accounts	(383		)	(439		)
Contracts receivable, net	$	160,973		$	186,249