UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported) February 25, 2010
SOUTHWEST
GAS CORPORATION
(Exact
name of registrant as specified in its charter)
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California
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1-7850
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88-0085720
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(State
or other jurisdiction of
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(Commission
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(I.R.S.
Employer
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incorporation
or organization)
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File
Number)
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Identification
No.)
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5241
Spring Mountain Road
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Post
Office Box 98510
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Las
Vegas, Nevada
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89193-8510
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (702) 876-7237
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item
2.02 Results
of Operations and Financial Condition.
On
February 25, 2010, Southwest Gas Corporation (the Company) released summary
financial information to the general public, including the investment community,
regarding the Company’s operating performance for the quarter and twelve months
ended December 31, 2009. A copy of the Company’s press release and summary
financial information is attached hereto as Exhibit 99.
This Form
8-K and the attached exhibit are provided under Item 2.02 of Form 8-K and are
furnished to, but not filed with, the Securities and Exchange
Commission.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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SOUTHWEST
GAS CORPORATION
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Date:
February 25, 2010
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/s/
ROY R. CENTRELLA
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Roy
R. Centrella
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Vice
President/Controller and
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Chief
Accounting Officer
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EXHIBIT
INDEX
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Exhibit
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No.
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Description
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99
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Press
Release and summary financial information dated February 25,
2010.
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February
25, 2010
Media
Contact: Cynthia Messina, Las Vegas, NV (702) 876-7132
Shareholder
Contact: Ken Kenny, Las Vegas, NV (702) 876-7237
For
Immediate Release
SOUTHWEST
GAS CORPORATION ANNOUNCES 2009 EARNINGS
Las
Vegas, Nev. – Southwest Gas Corporation (NYSE: SWX) reported consolidated
earnings of $1.95 per basic share for 2009, a $0.55 per share increase
from the $1.40 per basic share earned in 2008. Consolidated net
income for 2009 was $87.5 million, compared to $61 million during
2008.
According
to Jeffrey W. Shaw, Chief Executive Officer, “Higher operating income from the
natural gas segment and a positive swing in the contribution from other income
were the principal drivers behind our improved earnings. As a result
of our efforts to work with state regulatory commissions to improve and bring
stability to our revenues and cash flows, we realized rate relief during 2009 in
all jurisdictions we serve. In addition, we now have an improved rate
design in Nevada that, like in California, will enable us to more aggressively
encourage conservation by our customers.”
Shaw
concluded by saying, “Improved earnings and cash flows, a decrease in capital
expenditures, improvements in rate design, and sensible cost controls have all
combined to strengthen our financial position, despite the current economic
downturn. We will continue to focus on the core fundamentals of our
business to make further improvements.”
-more-
During
the fourth quarter of 2009, consolidated net income was $46.4 million, or
$1.03 per basic share, versus $31.2 million, or $0.71 per basic share, for
the fourth quarter of 2008.
Natural Gas Operations
Segment Results
Full
Year 2009
Operating
margin, defined as operating revenues less the net cost of gas sold, increased
$13 million between periods. Rate relief provided
$30 million toward the operating margin increase, consisting of
$25 million in Arizona, $3 million in California, and $2 million
in Nevada. Conservation, resulting from current economic conditions
and energy efficiency, negatively impacted operating margin by an estimated
$11 million. Differences in heating demand caused primarily by
weather variations between years resulted in a $7 million operating margin
decrease as warmer-than-normal temperatures were experienced during both years
(during 2009, operating margin was negatively impacted by $18 million,
while the negative impact in 2008 was $11 million). Customer
growth contributed $1 million of the operating margin
increase.
Operations
and maintenance expenses increased $10.3 million, or three percent,
between years principally due to general cost increases and higher
employee-related benefit costs, partially offset by slightly lower staffing
levels. Despite additional plant in service, depreciation expense
increased less than one percent due to lower depreciation rates in
California and Nevada rate jurisdictions.
-more-
Other
income, which principally includes interest income, changes in cash surrender
values of company-owned life insurance (“COLI”) policies, and non-utility
expenses, improved $20.1 million between years. This was
primarily due to an $8.5 million ($0.19 per share) increase in the
cash surrender values of COLI policies in 2009 compared to a decline of
$12 million ($0.28 per share) in 2008. Net financing costs
decreased $9 million between years due to a reduction in outstanding debt
and lower interest rates on variable-rate debt.
Fourth
Quarter
Operating
margin increased $17 million, or eight percent, in the fourth quarter
of 2009 compared to the fourth quarter of 2008. Differences in
heating demand caused by weather variations between periods resulted in an
$11 million operating margin increase due primarily to warmer-than-normal
temperatures experienced during 2008. Rate relief ($5 million in
Arizona, $2 million in Nevada, $1 million in California) accounted for
$8 million of the increase and customer growth contributed
$1 million. However, conservation, energy efficiency, and
challenging economic conditions on consumption negatively impacted operating
margin by $3 million.
Operating
expenses for the quarter increased $8.3 million, or six percent,
compared to the fourth quarter of 2008 primarily due to increases in
employee-related and general costs. Timing was a factor as certain
costs incurred in the fourth quarter of 2009 were incurred earlier in the year
during 2008. Lower depreciation rates in Nevada and California rate
jurisdictions mitigated the increase.
-more-
Other
income improved $8.8 million between periods. This was primarily
due to a $1.6 million increase in the cash surrender values of COLI
policies in the fourth quarter of 2009 compared to a decline of
$5.7 million in the fourth quarter of 2008. Net financing costs
decreased $1.8 million due principally to a reduction in outstanding debt
and lower interest rates on variable-rate debt.
Southwest
Gas Corporation provides natural gas service to 1,824,000 customers in Arizona,
Nevada, and California.
This
press release may contain statements which constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995 (Reform Act). All such forward-looking statements are
intended to be subject to the safe harbor protection provided by the Reform
Act. A number of important factors affecting the business and
financial results of the Company could cause actual results to differ materially
from those stated in the forward-looking statements. These factors
include, but are not limited to, the impact of weather variations on customer
usage, customer growth rates, conditions in the housing market, the effects of
regulation/deregulation, the timing and amount of rate relief, changes in rate
design, and the impacts of stock market volatility.
-more-
SOUTHWEST
GAS CORPORATION CONSOLIDATED EARNINGS DIGEST
(In
thousands, except per share amounts)
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YEAR
ENDED DECEMBER 31,
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2009
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2008
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Consolidated
Operating Revenues
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$ | 1,893,824 | $ | 2,144,743 | ||||
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Net
Income
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$ | 87,482 | $ | 60,973 | ||||
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Average
Number of Common Shares Outstanding
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44,752 | 43,476 | ||||||
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Basic
Earnings Per Share
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$ | 1.95 | $ | 1.40 | ||||
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Diluted
Earnings Per Share
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$ | 1.94 | $ | 1.39 | ||||
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QUARTER
ENDED DECEMBER 31,
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||||||||
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Consolidated
Operating Revenues
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$ | 498,805 | $ | 509,410 | ||||
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Net
Income
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$ | 46,392 | $ | 31,232 | ||||
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Average
Number of Common Shares Outstanding
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44,990 | 43,980 | ||||||
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Basic
Earnings Per Share
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$ | 1.03 | $ | 0.71 | ||||
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Diluted
Earnings Per Share
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$ | 1.02 | $ | 0.71 | ||||
-end-
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SOUTHWEST
GAS CORPORATION
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SUMMARY
UNAUDITED OPERATING RESULTS
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(In
thousands, except per share amounts)
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THREE
MONTHS ENDED
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YEAR
ENDED
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DECEMBER
31,
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DECEMBER
31,
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|||||||||||||||
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2009
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2008
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2009
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2008
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Results
of Consolidated Operations
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Contribution
to net income - gas operations
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$ | 43,671 | $ | 28,999 | $ | 79,420 | $ | 53,747 | ||||||||
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Contribution
to net income - construction services
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2,721 | 2,233 | 8,062 | 7,226 | ||||||||||||
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Net
income
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$ | 46,392 | $ | 31,232 | $ | 87,482 | $ | 60,973 | ||||||||
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Basic
earnings per share
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$ | 1.03 | $ | 0.71 | $ | 1.95 | $ | 1.40 | ||||||||
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Diluted
earnings per share
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$ | 1.02 | $ | 0.71 | $ | 1.94 | $ | 1.39 | ||||||||
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Average
outstanding common shares
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44,990 | 43,980 | 44,752 | 43,476 | ||||||||||||
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Average
shares outstanding (assuming dilution)
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45,362 | 44,264 | 45,062 | 43,775 | ||||||||||||
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Results
of Natural Gas Operations
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Gas
operating revenues
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$ | 427,973 | $ | 428,642 | $ | 1,614,843 | $ | 1,791,395 | ||||||||
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Net
cost of gas sold
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198,617 | 216,668 | 866,630 | 1,055,977 | ||||||||||||
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Operating
margin
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229,356 | 211,974 | 748,213 | 735,418 | ||||||||||||
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Operations
and maintenance expense
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91,661 | 82,362 | 348,942 | 338,660 | ||||||||||||
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Depreciation
and amortization
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41,237 | 42,772 | 166,850 | 166,337 | ||||||||||||
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Taxes
other than income taxes
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9,438 | 8,867 | 37,318 | 36,780 | ||||||||||||
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Operating
income
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87,020 | 77,973 | 195,103 | 193,641 | ||||||||||||
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Other
income (deductions)
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2,001 | (6,759 | ) | 6,590 | (13,469 | ) | ||||||||||
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Net
interest deductions
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18,474 | 20,285 | 74,091 | 83,096 | ||||||||||||
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Net
interest deductions on subordinated debentures
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1,933 | 1,932 | 7,731 | 7,729 | ||||||||||||
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Income
before income taxes
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68,614 | 48,997 | 119,871 | 89,347 | ||||||||||||
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Income
tax expense
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24,943 | 19,998 | 40,451 | 35,600 | ||||||||||||
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Contribution
to net income - gas operations
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$ | 43,671 | $ | 28,999 | $ | 79,420 | $ | 53,747 | ||||||||
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SOUTHWEST
GAS CORPORATION
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SELECTED
STATISTICAL DATA
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DECEMBER
31, 2009
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FINANCIAL
STATISTICS
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Market
value to book value per share at year end
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117 | % | ||||||||||
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Twelve
months to date return on equity -- total
company
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8.1 | % | ||||||||||
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-- gas
segment
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7.8 | % | ||||||||||
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Common
stock dividend yield at year end
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3.3 | % | ||||||||||
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GAS
OPERATIONS SEGMENT
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||||||||||||
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Authorized
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||||||||||||
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Authorized
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Authorized
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Return
on
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||||||||||
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Rate
Base
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Rate
of
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Common
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Rate
Jurisdiction
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(In
thousands)
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Return
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Equity
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Arizona
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$ | 1,066,108 | 8.86 | % | 10.00 | % | ||||||
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Southern
Nevada
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819,717 | 7.40 | 10.15 | |||||||||
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Northern
Nevada
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116,584 | 8.29 | 10.15 | |||||||||
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Southern
California
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143,851 | 7.87 | 10.50 | |||||||||
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Northern
California
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52,285 | 8.99 | 10.50 | |||||||||
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South
Lake Tahoe
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11,815 | 8.99 | 10.50 | |||||||||
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Paiute
Pipeline Company (1)
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82,853 | 9.44 | 11.80 | |||||||||
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(1) Estimated
amounts based on rate case settlements.
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SYSTEM
THROUGHPUT BY CUSTOMER CLASS
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YEAR
ENDED DECEMBER 31,
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(In
dekatherms)
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2009 | 2008 | 2007 | |||||||||
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Residential
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66,973,593 | 70,498,622 | 69,806,322 | |||||||||
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Small
commercial
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29,422,425 | 31,455,477 | 31,066,563 | |||||||||
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Large
commercial
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11,724,121 | 12,512,144 | 12,756,072 | |||||||||
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Industrial
/ Other
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7,262,348 | 9,770,147 | 10,352,500 | |||||||||
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Transportation
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104,389,391 | 116,418,981 | 112,842,208 | |||||||||
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Total
system throughput
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219,771,878 | 240,655,371 | 236,823,665 | |||||||||
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HEATING
DEGREE DAY COMPARISON
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Actual
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1,824 | 1,902 | 1,849 | |||||||||
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Ten-year
average
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1,882 | 1,894 | 1,935 | |||||||||
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Heating
degree days for prior periods have been recalculated using the current
period customer
mix.
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