Other Comprehensive Income and Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2022

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)


	Three Months Ended March 31, 2022						Three Months Ended March 31, 2021
(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	$	44	$	(11)	$	33	$	240	$	(58)	$	182
Amortization of net actuarial (gain)/loss	8,705		(2,089)		6,616		11,149		(2,675)		8,474
Regulatory adjustment	(7,268)		1,745		(5,523)		(9,575)		2,298		(7,277)
Pension plans other comprehensive income (loss)	1,481		(355)		1,126		1,814		(435)		1,379
FSIRS (designated hedging activities):
Amounts reclassified into net income	545		(129)		416		544		(131)		413
FSIRS other comprehensive income (loss)	545		(129)		416		544		(131)		413
Total other comprehensive income (loss) - Southwest Gas Corporation	2,026		(484)		1,542		2,358		(566)		1,792
Foreign currency translation adjustments:
Translation adjustments	1,247		—		1,247		823		—		823
Foreign currency other comprehensive income (loss)	1,247		—		1,247		823		—		823
Total other comprehensive income (loss) - Southwest Gas Holdings, Inc.	$	3,273	$	(484)	$	2,789	$	3,181	$	(566)	$	2,615


	Twelve Months Ended March 31, 2022						Twelve Months Ended March 31, 2021
(Thousands of dollars)	Before- Tax Amount		Tax (Expense) or Benefit (1)		Net-of- Tax Amount		Before- Tax Amount		Tax (Expense) or Benefit (1)		Net-of- Tax Amount
Defined benefit pension plans:
Net actuarial gain/(loss)	$	59,176	$	(14,202)	$	44,974	$	(57,539)	$	13,809	$	(43,730)
Amortization of prior service cost	763		(183)		580		1,106		(266)		840
Amortization of net actuarial (gain)/loss	42,153		(10,117)		32,036		39,521		(9,484)		30,037

Regulatory adjustment	(85,887)		20,614		(65,273)		6,255		(1,502)		4,753
Pension plans other comprehensive income (loss)	16,205		(3,888)		12,317		(10,657)		2,557		(8,100)
FSIRS (designated hedging activities):
Amounts reclassified into net income	2,175		(520)		1,655		2,954		(710)		2,244
FSIRS other comprehensive income (loss)	2,175		(520)		1,655		2,954		(710)		2,244
Total other comprehensive income (loss) - Southwest Gas Corporation	18,380		(4,408)		13,972		(7,703)		1,847		(5,856)
Foreign currency translation adjustments:
Translation adjustments	444		—		444		6,541		—		6,541
Foreign currency other comprehensive income (loss)	444		—		444		6,541		—		6,541
Total other comprehensive income (loss) - Southwest Gas Holdings, Inc.	$	18,824	$	(4,408)	$	14,416	$	(1,162)	$	1,847	$	685

(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 remaining balance of realized losses (net of tax) related to Southwest’s previously settled forward-starting interest rate swap (“FSIRS”), included in AOCI at March 31, 2022, was reclassified into interest expense during the three months ended March 31, 2022.

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


	Defined Benefit Plans						FSIRS						Foreign Currency Items
(Thousands of dollars)	Before-Tax		Tax (Expense) Benefit (4)		After-Tax		Before-Tax		Tax (Expense) Benefit (4)		After-Tax		Before-Tax		Tax (Expense) Benefit		After-Tax		AOCI
Beginning Balance AOCI December 31, 2021	$	(61,182)	$	14,685	$	(46,497)	$	(545)	$	129	$	(416)	$	152	$	—	$	152	$	(46,761)
Translation adjustments	—		—		—		—		—		—		1,247		—		1,247		1,247
Other comprehensive income (loss) before reclassifications	—		—		—		—		—		—		1,247		—		1,247		1,247
FSIRS amount reclassified from AOCI (1)	—		—		—		545		(129)		416		—		—		—		416
Amortization of prior service cost (2)	44		(11)		33		—		—		—		—		—		—		33
Amortization of net actuarial loss (2)	8,705		(2,089)		6,616		—		—		—		—		—		—		6,616
Regulatory adjustment (3)	(7,268)		1,745		(5,523)		—		—		—		—		—		—		(5,523)
Net current period other comprehensive income (loss) attributable to Southwest Gas Holdings, Inc.	1,481		(355)		1,126		545		(129)		416		1,247		—		1,247		2,789
Ending Balance AOCI March 31, 2022	$	(59,701)	$	14,330	$	(45,371)	$	—	$	—	$	—	$	1,399	$	—	$	1,399	$	(43,972)

(1)The FSIRS reclassification amount is included in Net interest deductions on the Company’s Condensed Consolidated Statements of Income.

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

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

(4)Tax amounts are calculated using a 24% rate.

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


	Defined Benefit Plans						FSIRS
(Thousands of dollars)	Before-Tax		Tax (Expense) Benefit (8)		After-Tax		Before-Tax		Tax (Expense) Benefit (8)		After-Tax		AOCI
Beginning Balance AOCI December 31, 2021	$	(61,182)	$	14,685	$	(46,497)	$	(545)	$	129	$	(416)	$	(46,913)
FSIRS amount reclassified from AOCI (5)	—		—		—		545		(129)		416		416
Amortization of prior service cost (6)	44		(11)		33		—		—		—		33
Amortization of net actuarial loss (6)	8,705		(2,089)		6,616		—		—		—		6,616
Regulatory adjustment (7)	(7,268)		1,745		(5,523)		—		—		—		(5,523)
Net current period other comprehensive income attributable to Southwest Gas Corporation	1,481		(355)		1,126		545		(129)		416		1,542
Ending Balance AOCI March 31, 2022	$	(59,701)	$	14,330	$	(45,371)	$	—	$	—	$	—	$	(45,371)

(5) The FSIRS reclassification amount is included in Net interest deductions on Southwest’s Condensed Consolidated Statements of Income.

(6)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).

(7)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).

(8)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:


(Thousands of dollars)	March 31, 2022		December 31, 2021
Net actuarial loss	$	(390,305)	$	(399,010)
Prior service cost	(1,484)		(1,528)
Less: amount recognized in regulatory assets	332,088		339,356
Recognized in AOCI	$	(59,701)	$	(61,182)