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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 10, 1998
SOUTHWEST GAS CORPORATION
(Exact name of registrant as specified in its charter)
California 1-7850 88-0085720
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
5241 Spring Mountain Road
Post Office Box 98510
Las Vegas, Nevada 89193-8510
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 876-7237
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ITEM 5. OTHER EVENTS
On February 10, 1998, Southwest Gas Corporation (the Company)
released summary financial information to the general public,
including the investment community, regarding the Company's
operating performance and financial position for the quarter and year
ended December 31, 1997. The financial information released is included
herein. This information is summary in nature and should not be
considered complete financial statements.
ITEM 7. EXHIBITS
99 Financial Analyst Report -- Fourth Quarter 1997
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.
SOUTHWEST GAS CORPORATION
Date: February 10, 1998 /s/ EDWARD A. JANOV
-----------------------------
Edward A. Janov
Vice President/Controller and
Chief Accounting Officer
EXHIBIT INDEX
Exhibit Description
Number
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99 Financial Analyst Report - Fourth Quarter 1997
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
Operating margin $ 140,844 $ 121,366 $ 405,327 $ 358,781
Operations and maintenance expenses 52,994 53,807 201,159 198,364
Depreciation, amortization, and general taxes 26,251 23,368 103,921 95,599
---------- ---------- ---------- ----------
Operating income 61,599 44,191 100,247 64,818
Net interest deductions 16,559 13,675 61,751 53,003
Preferred securities distribution 1,369 1,369 5,475 5,475
---------- ---------- ---------- ----------
Pretax utility income 43,671 29,147 33,021 6,340
Utility income tax expense 13,015 11,318 8,922 1,997
---------- ---------- ---------- ----------
Net utility income 30,656 17,829 24,099 4,343
Other income (expense), net (7,849) (124) (8,274) (424)
---------- ---------- ---------- ----------
Contribution to net income - gas operations 22,807 17,705 15,825 3,919
Contribution to net income - construction services 528 591 644 2,655
---------- ---------- ---------- ----------
Net income $ 23,335 $ 18,296 $ 16,469 $ 6,574
========== ========== ========== ==========
Earnings per share - gas operations $ 0.83 $ 0.67 $ 0.59 $ 0.15
Earnings per share - construction services 0.02 0.02 0.02 0.10
---------- ---------- ---------- ----------
Earnings per share of common stock $ 0.85 $ 0.69 $ 0.61 $ 0.25
========== ========== ========== ==========
Average outstanding common shares 27,303 26,640 27,069 25,888
========== ========== ========== ==========
The summary statements of income have been prepared by Southwest Gas Corporation
(the Company) using the equity method of accounting for its construction
services subsidiary. The presentation is not in accordance with generally
accepted accounting principles (GAAP). However, it produces the same net income
as the consolidated financial statements and, in management's opinion, is a fair
representation of the operations and contributions to net income of the Company's
operating segments.
/TABLE
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
YEAR ENDED DECEMBER 31,
-----------------------------------------
1997 1996 1995
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Gas operating revenues $ 614,665 $ 546,361 $ 563,502
Net cost of gas sold 209,338 187,580 227,456
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Operating margin 405,327 358,781 336,046
Operations and maintenance expenses 201,159 198,364 187,969
Depreciation, amortization, and general taxes 103,921 95,599 89,665
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Operating income 100,247 64,818 58,412
Net interest deductions 61,751 53,003 53,354
Preferred securities distribution 5,475 5,475 913
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Pretax utility income 33,021 6,340 4,145
Utility income tax expense 8,922 1,997 858
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Net utility income 24,099 4,343 3,287
Other income (expense), net (8,274) (424) (633)
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Contribution to net income - gas operations 15,825 3,919 2,654
Contribution to net income - construction services 644 2,655 --
Discontinued operations - PriMerit Bank - NOTE 2 -- -- (17,536)
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Net income (loss) 16,469 6,574 (14,882)
Preferred dividends -- -- 307
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Net income (loss) applicable to common stock $ 16,469 $ 6,574 $ (15,189)
=============================================================================================================
Earnings per share - gas operations $ 0.59 $ 0.15 $ 0.10
Earnings per share - construction services 0.02 0.10 --
Earnings (loss) per share - discontinued operations -- -- (0.76)
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Earnings (loss) per share of common stock $ 0.61 $ 0.25 $ (0.66)
=============================================================================================================
Average outstanding common shares 27,069 25,888 23,167
=============================================================================================================
See Notes to Summary Financial Statements.
/TABLE
SOUTHWEST GAS CORPORATION
SUMMARY BALANCE SHEET
AT DECEMBER 31, 1997
(In thousands)
(Unaudited)
ASSETS
UTILITY PLANT
Gas plant, net of accumulated depreciation $ 1,321,000
Construction work in progress 39,294
------------
Net utility plant 1,360,294
OTHER PROPERTY AND INVESTMENTS ------------
Investment in construction services subsidiary 25,039
Other 42,062
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Total other property and investments 67,101
------------
CURRENT AND ACCRUED ASSETS
Cash, working funds and temporary cash investments 13,343
Receivables - less reserve of $1,578 for uncollectibles 60,432
Accrued utility revenue 54,373
Deferred purchased gas costs 86,952
Other 27,593
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Total current and accrued assets 242,693
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DEFERRED DEBITS
Unamortized debt expense 19,119
Other deferred debits 29,959
------------
Total deferred debits 49,078
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TOTAL ASSETS $ 1,719,166
============
CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS
CAPITALIZATION
Common stockholders' equity
Common stock equity, $1 par, 27,387 shares outstanding $ 389,700
Retained earnings (accumulated deficit) (3,721)
------------
Total common stockholders' equity 385,979 31.7%
Preferred securities of Southwest Gas Capital I, 9.125% 60,000 4.9
Long-term debt - NOTE 3 771,931 63.4
------------ ------------
Total capitalization 1,217,910 100.0%
------------ ============
CURRENT AND ACCRUED LIABILITIES
Notes payable 142,000
Accounts payable 59,537
Customer deposits 21,945
Taxes accrued (including income taxes) 1,892
Other 61,223
------------
Total current and accrued liabilities 286,597
------------
DEFERRED CREDITS
Deferred investment tax credits 18,139
Deferred income taxes 147,662
Other 48,858
------------
Total deferred credits 214,659
------------
TOTAL CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS $ 1,719,166
============
See Notes to Summary Financial Statements.
/TABLE
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1997
(In thousands)
(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net income $ 16,469
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 74,528
Change in receivables and payables (3,097)
Change in gas cost related balancing items (99,145)
Change in accrued taxes (8,160)
Change in deferred taxes 48,902
Allowance for funds used during construction (1,572)
Other 16,968
----------
Net cash provided by operating activities 44,893
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (163,868)
Other (4,472)
----------
Net cash used in investing activities (168,340)
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock issuances 12,205
Dividends paid (22,177)
Change in notes payable 21,000
Long-term debt issuances, net 120,321
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Net cash provided by financing activities 131,349
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Change in cash and temporary cash investments 7,902
Cash at beginning of period 5,441
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Cash at end of period $ 13,343
==========
SUPPLEMENTAL INFORMATION:
Interest paid, net of amounts capitalized $ 57,380
Income taxes, net of refunds $ (33,887)
See Notes to Summary Financial Statements.
SOUTHWEST GAS CORPORATION
NOTES TO SUMMARY FINANCIAL STATEMENTS
(In thousands)
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION:
The summary financial statements have been prepared by Southwest Gas
Corporation (the Company) using the equity method of accounting for its
construction services subsidiary. This presentation is not in accordance
with generally accepted accounting principles (GAAP), and certain
information and footnote disclosures normally included in financial
statements prepared in accordance with GAAP have been omitted. The
summary financial statement presentation in this report produces the
same net income as the consolidated financial statements and, in
management's opinion, is a fair representation of the operations and
contributions to net income of the Company's operating segments.
NOTE 2 - DISCONTINUED OPERATIONS:
In January 1996, the Company reached an agreement to sell PriMerit Bank
(PriMerit) to Norwest Corporation. Discontinued operations includes the
net income of PriMerit and its subsidiaries on a stand-alone basis as
adjusted, reduced by allocated carrying costs associated with the
Company's investment in PriMerit (principally interest) net of taxes.
Discontinued operations also includes the loss on the disposition.
The sale of PriMerit to Norwest was completed in July 1996.
NOTE 3 - LONG-TERM DEBT:
Term loan facility $ 200,000
Debentures:
Debentures, 9.75% series F, due 2002 100,000
Debentures, 7 1/2% series, due 2006 75,000
Debentures, 8% series, due 2026 75,000
Medium-term notes, 7.59% series, due 2017 25,000
Medium-term notes, 7.78% series, due 2022 25,000
Medium-term notes, 7.92% series, due 2027 25,000
Medium-term notes, 6.89% series, due 2007 17,500
Medium-term notes, 6.76% series, due 2027 7,500
Industrial development revenue bonds - net of funds held in trust 229,074
Unamortized discount on long-term debt (7,143)
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TOTAL LONG-TERM DEBT $ 771,931
==========
ESTIMATED CURRENT MATURITIES $ --
==========
SOUTHWEST GAS CORPORATION
SELECTED STATISTICAL DATA
DECEMBER 31, 1997
FINANCIAL STATISTICS
Market value to book value per share at year end 133%
Twelve months to date return on equity -- total company 4.3%
-- gas segment 4.5%
Common stock dividend yield at year end 4.4%
GAS OPERATIONS SEGMENT
Authorized
Authorized Authorized Return on
Rate Base Rate of Common
Rate Jurisdiction (In thousands) Return Equity
- -------------------------- -------------- ----------- ----------
Arizona (1) (2) $ 541,104 9.38% 11.25%
Southern Nevada (1) 237,165 9.50 11.55
Northern Nevada (1) 63,986 9.67 11.55
Southern California 69,486 9.94 11.35
Northern California 9,521 10.02 11.35
Paiute Pipeline Company (1) 61,602 9.69 11.60
(1) Estimated amounts based on rate case settlements.
(2) Southern and Central Arizona rate jurisdictions were consolidated effective September 1997.
SYSTEM THROUGHPUT BY CUSTOMER CLASS
YEAR ENDED DECEMBER 31,
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(In dekatherms) 1997 1996 1995
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Residential 50,554,880 45,050,591 42,273,436
Small commercial 24,660,541 23,834,362 22,949,195
Large commercial 7,654,182 7,502,980 8,344,066
Industrial / Other 8,603,601 5,444,985 7,021,718
Transportation 103,085,729 96,820,733 101,601,123
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Total system throughput 194,558,933 178,653,651 182,189,538
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YEAR ENDED DECEMBER 31,
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HEATING DEGREE DAY COMPARISON 1997 1996 1995
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Actual 1,976 1,899 1,779
Ten-year average 2,022 2,041 2,027
======================================================================================================================
/TABLE
