Page 47 - SWGas Annual Report 2015

Centuri has $36.8 million and $48.2 million of intangible assets (varies due to foreign currency translation) at
December 31, 2015 and 2014, respectively, as detailed in the following table (thousands of dollars):

Gross Carrying Accumulated Net Carrying

December 31, 2015 Amount Amortization Amount
Customer relationships
Trade names and trademarks $31,226 $(2,070) $29,156
Customer contracts backlog 8,621 (1,331) 7,290
Noncompete agreement 1,606 (1,606) —
437 (110) 327
Total
$41,890 $(5,117) $36,773
December 31, 2014
Customer relationships Gross Carrying Accumulated Net Carrying
Trade names and trademarks
Customer contracts backlog Amount Amortization Amount
Noncompete agreement
$37,059 $ (524) $36,535
Total 10,208 (241) 9,967
1,912 (724) 1,188
519 (34) 485

$49,698 $(1,523) $48,175

The intangible assets (other than goodwill and software-related intangibles) are included in Other property and
investments in the Consolidated Balance Sheets. The estimated future amortization of the intangible assets for the
next five years is as follows (in thousands):

2016 $2,809
2017 2,809
2018 2,605
2019 1,971
2020 1,906

See Note 2 – Utility Plant and Leases for additional information regarding natural gas operations intangible assets.

Accumulated Removal Costs. Approved regulatory practices allow Southwest to include in depreciation expense
a component to recover removal costs associated with utility plant retirements. In accordance with the Securities
and Exchange Commission (“SEC”) position on presentation of these amounts, management reclassifies estimated
removal costs from accumulated depreciation to accumulated removal costs within the liabilities section of the
Consolidated Balance Sheets. Amounts fluctuate between periods depending on the level of replacement work
performed, the estimated cost of removal in rates and the actual cost of removal experienced.

Gas Operating Revenues. Revenues are recorded when customers are billed. Customer billings are based on
monthly meter reads and are calculated in accordance with applicable tariffs and state and local laws, regulations,
and agreements. An estimate of the margin associated with natural gas service provided, but not yet billed, to
residential and commercial customers from the latest meter reading date to the end of the reporting period is also
recognized as accrued utility revenue. Revenues also include the net impacts of margin tracker/decoupling
accruals.

Southwest Gas Corporation