- ------------------------------------------------------------------------------ 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) November 4, 1997 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 - ------------------------------------------------------------------------------ ITEM 5. OTHER EVENTS On November 4, 1997, 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 ended September 30, 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 -- Third 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: November 4, 1997 /s/ EDWARD A. JANOV -------------------------- Edward A. Janov Vice President/Controller and Chief Accounting Officer EXHIBIT INDEX Exhibit Number Description ------- ---------------------------------------------- 99 Financial Analyst Report -- Third Quarter 1997
SOUTHWEST GAS CORPORATION SUMMARY STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED TWELVE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, -------------------- -------------------- -------------------- 1997 1996 1997 1996 1997 1996 -------- -------- -------- -------- -------- -------- Gas operating revenues $ 95,009 $ 85,534 $414,313 $376,599 $584,075 $522,958 Net cost of gas sold 28,508 24,027 149,830 139,184 198,226 182,001 -------- -------- -------- -------- -------- -------- Operating margin 66,501 61,507 264,483 237,415 385,849 340,957 Operations and maintenance expenses 50,310 49,086 148,165 144,557 201,972 192,239 Depreciation, amortization, and general taxes 26,244 24,377 77,670 72,231 101,038 94,420 -------- -------- -------- -------- -------- -------- Operating income (loss) (10,053) (11,956) 38,648 20,627 82,839 54,298 Net interest deductions 15,736 13,320 45,192 39,328 58,867 53,025 Preferred securities distribution 1,368 1,368 4,106 4,106 5,475 5,019 -------- -------- -------- -------- -------- -------- Pretax utility income (loss) (27,157) (26,644) (10,650) (22,807) 18,497 (3,746) Utility income tax expense (benefit) (10,421) (10,445) (4,093) (9,321) 7,225 (2,012) -------- -------- -------- -------- -------- -------- Net utility income (loss) (16,736) (16,199) (6,557) (13,486) 11,272 (1,734) Other income (expense), net (35) (57) (425) (300) (549) (543) -------- -------- -------- -------- -------- -------- Contribution to net income (loss) - gas operations (16,771) (16,256) (6,982) (13,786) 10,723 (2,277) Contribution to net income (loss) - construction services 1,085 1,618 116 2,064 707 2,064 Discontinued operations - PriMerit Bank -- -- -- -- -- (18,864) -------- -------- -------- -------- -------- -------- Net income (loss) (15,686) (14,638) (6,866) (11,722) 11,430 (19,077) Preferred dividends -- -- -- -- -- 22 -------- -------- -------- -------- -------- -------- Net income (loss) applicable to common stock $(15,686) $(14,638) $ (6,866) $(11,722) $ 11,430 $(19,099) ======== ======== ======== ======== ======== ======== Earnings (loss) per share - gas operations $ (0.62) $ (0.61) $ (0.26) $ (0.54) $ 0.40 $ (0.09) Earnings per share - construction services 0.04 0.06 0.01 0.08 0.02 0.08 Loss per share - discontinued operations -- -- -- -- -- (0.74) -------- -------- -------- -------- -------- -------- Earnings (loss) per share of common stock $ (0.58) $ (0.55) $ (0.25) $ (0.46) $ 0.42 $ (0.75) ======== ======== ======== ======== ======== ======== Average outstanding common shares 27,149 26,477 26,990 25,636 26,902 25,382 ======== ======== ======== ======== ======== ======== 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. This 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. SOUTHWEST GAS CORPORATION SUMMARY STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited)
NINE MONTHS ENDED TWELVE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------ ------------------------- 1997 1996 1997 1996 - ----------------------------------------------------------------------------------------------------------------------------- Gas operating revenues $ 414,313 $ 376,599 $ 584,075 $ 522,958 Net cost of gas sold 149,830 139,184 198,226 182,001 - ----------------------------------------------------------------------------------------------------------------------------- Operating margin 264,483 237,415 385,849 340,957 Operations and maintenance expenses 148,165 144,557 201,972 192,239 Depreciation, amortization, and general taxes 77,670 72,231 101,038 94,420 - ----------------------------------------------------------------------------------------------------------------------------- Operating income 38,648 20,627 82,839 54,298 Net interest deductions 45,192 39,328 58,867 53,025 Preferred securities distribution 4,106 4,106 5,475 5,019 - ----------------------------------------------------------------------------------------------------------------------------- Pretax utility income (loss) (10,650) (22,807) 18,497 (3,746) Utility income tax expense (benefit) (4,093) (9,321) 7,225 (2,012) - ----------------------------------------------------------------------------------------------------------------------------- Net utility income (loss) (6,557) (13,486) 11,272 (1,734) Other income (expense), net (425) (300) (549) (543) - ----------------------------------------------------------------------------------------------------------------------------- Contribution to net income (loss) - gas operations (6,982) (13,786) 10,723 (2,277) Contribution to net income (loss) - construction services 116 2,064 707 2,064 Discontinued operations - PriMerit Bank - NOTE 2 -- -- -- (18,864) - ----------------------------------------------------------------------------------------------------------------------------- Net income (loss) (6,866) (11,722) 11,430 (19,077) Preferred dividends -- -- -- 22 - ----------------------------------------------------------------------------------------------------------------------------- Net income (loss) applicable to common stock $ (6,866) $ (11,722) $ 11,430 $ (19,099) ============================================================================================================================= Earnings (loss) per share - gas operations $ (0.26) $ (0.54) $ 0.40 $ (0.09) Earnings per share - construction services 0.01 0.08 0.02 0.08 Loss per share - discontinued operations -- -- -- (0.74) - ----------------------------------------------------------------------------------------------------------------------------- Earnings (loss) per share of common stock $ (0.25) $ (0.46) $ 0.42 $ (0.75) ============================================================================================================================= Average outstanding common shares 26,990 25,636 26,902 25,382 ============================================================================================================================== See Notes to Summary Financial Statements. /TABLE
SOUTHWEST GAS CORPORATION SUMMARY BALANCE SHEET AT SEPTEMBER 30, 1997 (In thousands) (Unaudited) ASSETS UTILITY PLANT Gas plant, net of accumulated depreciation $ 1,304,422 Construction work in progress 34,686 ------------ Net utility plant 1,339,108 ------------ OTHER PROPERTY AND INVESTMENTS Investment in construction services subsidiary 27,511 Other 46,228 ------------ Total other property and investments 73,739 ------------ CURRENT AND ACCRUED ASSETS Cash, working funds and temporary cash investments 11,055 Receivables - less reserve of $1,265 for uncollectibles 21,893 Accrued utility revenue 21,725 Deferred purchased gas costs 64,805 Other 40,083 ------------ Total current and accrued assets 159,561 ------------ DEFERRED DEBITS Unamortized debt expense 19,147 Other deferred debits 29,634 ------------ Total deferred debits 48,781 ------------ TOTAL ASSETS $ 1,621,189 ============ CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS CAPITALIZATION Common stockholders' equity Common stock equity, $1 par, 27,223 shares outstanding $ 386,257 Retained earnings (accumulated deficit) (21,429) ------------ Total common stockholders' equity 364,828 30.5% Preferred securities of Southwest Gas Capital I, 9.125% 60,000 5.0 Long-term debt - NOTE 3 770,592 64.5 ------------ -------- Total capitalization 1,195,420 100.0% ------------ ======== CURRENT AND ACCRUED LIABILITIES Notes payable 108,000 Accounts payable 28,824 Customer deposits 21,536 Other 66,654 ------------ Total current and accrued liabilities 225,014 ------------ DEFERRED CREDITS Deferred investment tax credits 18,355 Deferred income taxes 136,249 Other 46,151 ------------ Total deferred credits 200,755 ------------ TOTAL CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS $ 1,621,189 ============ See Notes to Summary Financial Statements. /TABLE SOUTHWEST GAS CORPORATION SUMMARY STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1997 (In thousands) (Unaudited) CASH FLOWS FROM OPERATIONS: Net income (loss) $ (6,866) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 55,188 Change in receivables and payables 35,072 Change in gas cost related balancing items (66,369) Change in accrued taxes (20,563) Change in deferred taxes 28,669 Allowance for funds used during construction (1,292) Other 7,017 ---------- Net cash provided by operating activities 30,856 ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Construction expenditures (115,523) Other (7,890) ---------- Net cash used in investing activities (123,413) ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from stock issuances 8,762 Dividends paid (16,583) Change in notes payable (13,000) Long-term debt issuances, net 118,992 ---------- Net cash provided by financing activities 98,171 ---------- Change in cash and temporary cash investments 5,614 Cash at beginning of period 5,441 ---------- Cash at end of period $ 11,055 =========== SUPPLEMENTAL INFORMATION: Interest paid, net of amounts capitalized $ 43,012 Income taxes, net of refunds $ (2,762) 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: 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 227,830 Unamortized discount on long-term debt (7,238) --------- TOTAL LONG-TERM DEBT $ 770,592 ========= ESTIMATED CURRENT MATURITIES $ -- ========= SOUTHWEST GAS CORPORATION SELECTED STATISTICAL DATA SEPTEMBER 30, 1997 FINANCIAL STATISTICS Market value to book value per share at quarter end 146% Twelve months to date return on equity -- total company 3.0% -- gas segment 3.1% Common stock dividend yield at quarter end 4.2% GAS OPERATIONS SEGMENT
Authorized Authorized Authorized Return on Rate Base Rate of Common Rate Jurisdiction (In thousands) Return Equity - ----------------------- -------------- ---------- ------------ Arizona $ 541,104 9.38% 11.25% Southern Nevada 237,165 9.50 11.55 Northern Nevada 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 61,057 10.09 12.50 SYSTEM THROUGHPUT BY CUSTOMER CLASS NINE MONTHS ENDED TWELVE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------ ------------------------------ (In dekatherms) 1997 1996 1997 1996 - --------------------------------------------------------------------------------------------------------------------------------- Residential 37,427,296 32,797,699 49,848,278 41,718,026 Small commercial 18,289,465 17,470,268 24,485,468 22,920,354 Large commercial 5,951,794 5,890,686 7,638,423 7,603,142 Industrial / Other 5,967,696 4,046,550 7,291,800 5,604,019 Transportation 80,285,401 74,153,452 102,952,681 97,187,490 - --------------------------------------------------------------------------------------------------------------------------------- Total system throughput 147,921,652 134,358,655 192,216,650 175,033,031 ================================================================================================================================= HEATING DEGREE DAY COMPARISON - --------------------------------------------------------------------------------------------------------------------------------- Actual 1,445 1,282 2,062 1,682 Ten-year average 1,433 1,438 2,022 2,046 =================================================================================================================================