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Southwest Gas Corporation Announces 2015 Earnings
According to
During the fourth quarter of 2015, consolidated net income was
Natural Gas Operations Segment Results
Full Year 2015
Operating margin, defined as operating revenues less the cost of gas sold, increased $14 million between years. New customers contributed $8 million in operating margin during 2015 as approximately 26,000 net new customers were added during the year. Combined rate relief in the
Operations and maintenance expenses increased
Other income and deductions, which principally includes changes in the cash surrender values of COLI policies and non-utility expenses, decreased
Fourth Quarter
Operating margin increased $4 million between quarters including $2 million attributable to customer growth. A combined $1 million of rate relief in the
Operations and maintenance expenses increased
Net interest deductions decreased
Construction Services Segment Results
Full Year 2015
Revenues increased $269 million between years due to additional pipe replacement work and the inclusion of a full year of revenues from the Link-Line group of companies acquired in
Depreciation and amortization expense increased
Fourth Quarter
Revenues increased
Depreciation and amortization expense increased
Outlook for 2016
Natural Gas Segment:
- Operating margin for 2016 is anticipated to benefit from customer growth (similar to 2015), infrastructure tracker mechanisms, expansion projects, and
California attrition. Combined, these items are expected to produce approximately 3% in incremental margin. Additionally, new rates established to recoverNevada conservation and energy efficiency program costs are expected to increase margin by approximately$11 million , but will be offset by a similar increase in amortization expense. - Operations and maintenance expense is expected to be relatively flat as higher general costs and costs associated with customer growth should be substantially offset by a decrease in pension costs. Depreciation and general taxes should increase consistent with the growth in gas plant in service (approximately 5% to 6%) plus the amortization of
Nevada conservation and energy efficiency program costs noted above. - Operating income is expected to increase by 4% to 5% between years.
- Net interest deductions for 2016 are expected to be approximately
$5 million to $7 million higher than 2015, primarily due to an anticipated increase in average outstanding debt associated with capital expenditures. - Changes in cash surrender values of COLI policies will continue to be subject to volatility, as evidenced by a
$500,000 loss in 2015 compared to$5.3 million of income in 2014. Management generally anticipates longer term normal increases in COLI cash surrender values to range from$3 million to $5 million on an annual basis. - Capital expenditures in 2016 are estimated at
$460 million , in support of customer growth, system improvements, and accelerated pipe replacement programs.
Construction Services Segment:
- Centuri has a strong base of large utility clients (many with multi-year pipe replacement programs) that can sustain and grow its business. Revenues for 2016 are anticipated to be 3% to 7% greater than 2015 levels.
- Operating income is expected to be approximately 5.5% to 6% of revenues.
- Based on the current interest rate environment, net interest deductions for 2016 are expected to be between
$6.5 million and $7.5 million . - These collective expectations are before consideration of the portion of earnings attributable to the noncontrolling interests. Additionally, changes in foreign exchange rates could influence results.
This press release may contain statements which constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (Reform Act). All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. A number of important factors affecting the business and financial results of the Company could cause actual results to differ materially from those stated in the forward-looking statements. These factors include, but are not limited to, the timing and amount of rate relief, changes in rate design, customer growth rates, the effects of regulation/deregulation, the impacts of construction activity at Centuri, future earnings trends, seasonal patterns, and the impacts of stock market volatility. In addition, the Company can provide no assurance that its discussions about future operating margin, operations and maintenance expenses, operating income, depreciation and general taxes, COLI cash surrender values, financing expenses, and capital expenditures of the natural gas segment will occur. Likewise, the Company can provide no assurance that discussions regarding construction services segment revenues, operating income, and net interest deductions will transpire. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its Web site or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
SOUTHWEST GAS CONSOLIDATED EARNINGS DIGEST |
||||
(In thousands, except per share amounts) |
||||
YEAR ENDED DECEMBER 31, |
2015 |
2014 |
||
Consolidated Operating Revenues |
$ 2,463,625 |
$ 2,121,707 |
||
Net Income |
$ 138,317 |
$ 141,126 |
||
Average Number of Common Shares Outstanding |
46,992 |
46,494 |
||
Basic Earnings Per Share |
$ 2.94 |
$ 3.04 |
||
Diluted Earnings Per Share |
$ 2.92 |
$ 3.01 |
||
QUARTER ENDED DECEMBER 31, |
2015 |
2014 |
||
Consolidated Operating Revenues |
$ 685,405 |
$ 627,683 |
||
Net Income |
$ 66,119 |
$ 58,746 |
||
Average Number of Common Shares Outstanding |
47,377 |
46,451 |
||
Basic Earnings Per Share |
$ 1.40 |
$ 1.26 |
||
Diluted Earnings Per Share |
$ 1.38 |
$ 1.25 |
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SOURCE
Media, Sonya Headen, Las Vegas, NV (702) 364-3411, or Shareholders, Ken Kenny, Las Vegas, NV (702) 876-7237