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 6,
2007
SOUTHWEST
GAS CORPORATION
(Exact
name of registrant as specified in its charter)
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California
|
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
|
|
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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||
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Post
Office Box 98510
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||
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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
November 6, 2007, 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, nine, and twelve
months ended September 30, 2007. 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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|
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Date:
November 6, 2007
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|
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/s/
ROY R. CENTRELLA
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|
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Roy
R. Centrella
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|
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Vice
President/Controller and
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|
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Chief
Accounting Officer
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EXHIBIT
INDEX
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Exhibit
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||
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No.
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Description
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|
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99
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Press
Release and summary financial information dated November 6,
2007.
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November
6, 2007
Media
Contact: Cynthia Messina, Las Vegas, NV (702) 876-7132
Shareholder
Contact: Ken Kenny, Las Vegas, NV (702) 876-7237
SWX-NYSE
For
Immediate Release
SOUTHWEST
GAS CORPORATION
REPORTS
THIRD QUARTER RESULTS
Las
Vegas
– Southwest Gas Corporation recorded a net loss of $0.22 per share for the
third quarter of 2007, a $0.04 improvement from the loss of $0.26 per share
recorded during the third quarter of 2006. Net loss for the third
quarter of 2007 was $9.3 million, compared to a loss of $10.7 million
in the prior period. Due to the seasonal nature of the business, net
losses during the second and third quarters are normal and not generally
indicative of earnings for a complete twelve-month period.
According
to Jeffrey W. Shaw, Chief Executive Officer, “Although quarterly results
improved, much of the improvement is attributable to a reallocation of operating
margin between periods in our California jurisdictions (from the first quarter
into the second and third quarters). After adjusting for the
reallocation, incremental operating margin from rate relief and customer growth
totaled approximately $2 million in the current quarter, whereas operating
costs increased by $5 million. Customer growth continues to
moderate as the Company added 48,000 customers over the past 12
months.”
Looking
ahead, Shaw noted, “We recently filed a $50 million general rate increase
request in Arizona to help recover rising operating costs and infrastructure
investments. We are also supporting rate design changes which, if
approved, would encourage
-more-
energy
efficiency and also shield the Company and its customers from weather-related
volatility. We hope to have new rates in place in about a
year.”
For
the
twelve months ended September 30, 2007, consolidated net income was
$86.8 million, or $2.06 per basic share, compared to
$67.4 million, or $1.69 per basic share, during the twelve-month
period ended September 30, 2006. Results for the prior
twelve-month period include net nonrecurring charges of approximately $0.09
per
share.
Natural
Gas Operations Segment Results
Third
Quarter
Operating
margin, defined as operating revenues less the cost of gas sold, increased
$8 million, or seven percent, in the third quarter of 2007 compared to
the third quarter of 2006. Rate changes (primarily from implementing
a California equalized margin tracker mechanism, effective January 2007)
accounted for $7 million of the increase in operating margin compared to
the prior year. New customers accounted for the remaining incremental
operating margin during the quarter as the Company added 48,000 customers
during the last twelve months, an increase of three percent.
Operating
expenses for the quarter increased $5 million, or four percent,
compared to the third quarter of 2006 primarily due to general cost increases
and incremental
-more-
operating
costs associated with serving additional customers. A reduction in
property tax rates mitigated the overall operating expense
increase.
Net
financing costs increased $1.2 million between periods primarily due to
higher rates on variable-rate debt and interest expense associated with deferred
purchased gas cost balances.
Twelve
Months to Date
Operating
margin increased $61 million between periods. Rate relief in
Arizona and California added $31 million. Customer growth
contributed an incremental $16 million. Differences in heating
demand, caused primarily by weather variations, resulted in a $14 million
increase in operating margin as warmer-than-normal temperatures were experienced
during both periods (during the current twelve-month period the negative impact
was $7 million, while the negative impact during the prior twelve-month
period was $21 million).
Operating
expenses increased $28.5 million, or six percent, between periods primarily
due to general increases in labor and maintenance costs, and incremental
operating costs associated with serving additional customers. Higher
uncollectible and employee-related costs also contributed to the
increase. Net financing costs increased slightly between periods
primarily due to higher rates on variable-rate debt.
-more-
Southwest
Gas Corporation provides natural gas service to approximately
1,800,000 customers in Arizona, Nevada, and California. Its
service territory is centered in the fastest-growing region of the
country.
This
press release may contain statements which constitute "forward-looking
statements" within the meaning of the Securities Litigation Reform Act of 1995
(Reform Act). All such forward-looking statements are intended to be
subject to the safe harbor protection provided by the Reform Act. A
number of important factors affecting the business and financial results of
the
Company could cause actual results to differ materially from those stated in
the
forward-looking statements. These factors include, but are not
limited to, the impact of weather variations on customer usage, customer growth
rates, the effects of regulation/deregulation, the timing and amount of rate
relief, and changes in rate design.
-more-
SOUTHWEST
GAS CONSOLIDATED EARNINGS DIGEST
(In
thousands, except per share amounts)
|
QUARTER
ENDED SEPTEMBER 30,
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2007
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2006
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||||||
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Consolidated
Operating Revenues
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$ |
371,524
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$ |
351,800
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||||
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Net
Loss
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$ |
9,318
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$ |
10,736
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||||
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Average
Number of Common Shares Outstanding
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42,448
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40,982
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||||||
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Loss
Per Share
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$ |
0.22
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$ |
0.26
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||||
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NINE
MONTHS ENDED SEPTEMBER 30,
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2007
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2006
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||||||
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Consolidated
Operating Revenues
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$ |
1,591,777
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$ |
1,459,643
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||||
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Net
Income
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$ |
40,109
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$ |
37,153
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||||
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Average
Number of Common Shares Outstanding
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42,219
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40,221
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||||||
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Basic
Earnings Per Share
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$ |
0.95
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$ |
0.92
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||||
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Diluted
Earnings Per Share
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$ |
0.94
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$ |
0.91
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||||
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TWELVE
MONTHS ENDED SEPTEMBER 30,
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2007
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2006
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||||||
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Consolidated
Operating Revenues
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$ |
2,156,892
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$ |
1,956,638
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||||
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Net
Income
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$ |
86,816
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$ |
67,408
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||||
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Average
Number of Common Shares Outstanding
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42,060
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39,957
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||||||
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Basic
Earnings Per Share
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$ |
2.06
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$ |
1.69
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||||
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Diluted
Earnings Per Share
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$ |
2.04
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$ |
1.67
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||||
-end-
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SOUTHWEST
GAS CORPORATION
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||||||||||||||||||||||||
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SUMMARY
UNAUDITED OPERATING RESULTS
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||||||||||||||||||||||||
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(In
thousands, except per share amounts)
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||||||||||||||||||||||||
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THREE
MONTHS ENDED
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NINE
MONTHS ENDED
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TWELVE
MONTHS ENDED
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||||||||||||||||||||||
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SEPTEMBER
30,
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SEPTEMBER
30,
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SEPTEMBER
30,
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||||||||||||||||||||||
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2007
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2006
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2007
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2006
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2007
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2006
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|||||||||||||||||||
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Results
of Consolidated Operations
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||||||||||||||||||||||||
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Contribution to net income (loss) - gas operations
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$ | (12,863 | ) | $ | (13,780 | ) | $ |
32,910
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$ |
28,306
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$ |
76,077
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$ |
54,975
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||||||||||
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Contribution to net income - construction services
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3,545
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3,044
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7,199
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8,847
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10,739
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12,433
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||||||||||||||||||
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Net income (loss)
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$ | (9,318 | ) | $ | (10,736 | ) | $ |
40,109
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$ |
37,153
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$ |
86,816
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$ |
67,408
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||||||||||
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Earnings (loss) per share - gas operations
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$ | (0.30 | ) | $ | (0.34 | ) | $ |
0.78
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$ |
0.70
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$ |
1.81
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$ |
1.38
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||||||||||
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Earnings per share - construction services
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0.08
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0.08
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0.17
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0.22
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0.25
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0.31
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||||||||||||||||||
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Basic earnings (loss) per share
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$ | (0.22 | ) | $ | (0.26 | ) | $ |
0.95
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$ |
0.92
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$ |
2.06
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$ |
1.69
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||||||||||
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Diluted earnings (loss) per share
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$ | (0.22 | ) | $ | (0.26 | ) | $ |
0.94
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$ |
0.91
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$ |
2.04
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$ |
1.67
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||||||||||
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Average outstanding common shares
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42,448
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40,982
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42,219
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40,221
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42,060
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39,957
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||||||||||||||||||
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Average shares outstanding (assuming dilution)
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-
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-
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42,607
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40,610
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42,469
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40,343
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||||||||||||||||||
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Results
of Natural Gas Operations
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||||||||||||||||||||||||
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Gas operating revenues
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$ |
274,748
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$ |
273,041
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$ |
1,345,996
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$ |
1,235,351
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$ |
1,838,039
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$ |
1,658,259
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||||||||||||
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Net cost of gas sold
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141,825
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148,527
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834,453
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760,847
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1,107,594
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989,281
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||||||||||||||||||
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Operating margin
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132,923
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124,514
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511,543
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474,504
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730,445
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668,978
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||||||||||||||||||
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Operations and maintenance expense
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83,222
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79,446
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250,847
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234,716
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336,934
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322,475
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||||||||||||||||||
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Depreciation and amortization
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39,774
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36,896
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117,380
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109,012
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155,022
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143,925
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||||||||||||||||||
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Taxes other than income taxes
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7,848
|
9,515
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28,253
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25,752
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37,495
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34,515
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||||||||||||||||||
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Operating income
|
2,079
|
(1,343 | ) |
115,063
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105,024
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200,994
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168,063
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|||||||||||||||||
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Other income (expense)
|
478
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1,686
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5,502
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6,567
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8,984
|
8,801
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||||||||||||||||||
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Net interest deductions
|
22,003
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20,808
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64,466
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64,015
|
86,018
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85,366
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||||||||||||||||||
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Net interest deductions on subordinated debentures
|
1,932
|
1,931
|
5,795
|
5,793
|
7,726
|
7,724
|
||||||||||||||||||
|
Income (loss) before income taxes
|
(21,378 | ) | (22,396 | ) |
50,304
|
41,783
|
116,234
|
83,774
|
||||||||||||||||
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Income tax expense (benefit)
|
(8,515 | ) | (8,616 | ) |
17,394
|
13,477
|
40,157
|
28,799
|
||||||||||||||||
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Contribution to net income (loss) - gas operations
|
$ | (12,863 | ) | $ | (13,780 | ) | $ |
32,910
|
$ |
28,306
|
$ |
76,077
|
$ |
54,975
|
||||||||||
|
SOUTHWEST
GAS CORPORATION
|
||||||||||||||||
|
SELECTED
STATISTICAL DATA
|
||||||||||||||||
|
SEPTEMBER
30, 2007
|
||||||||||||||||
|
FINANCIAL
STATISTICS
|
||||||||||||||||
|
Market
value to book value per share at quarter end
|
128 | % | ||||||||||||||
|
Twelve
months to date return on equity -- total
company
|
9.5 | % | ||||||||||||||
|
-- gas segment
|
8.7 | % | ||||||||||||||
|
Common
stock dividend yield at quarter end
|
3.0 | % | ||||||||||||||
|
GAS
OPERATIONS SEGMENT
|
||||||||||||||||
|
Authorized
|
||||||||||||||||
|
Authorized
|
Authorized
|
Return
on
|
||||||||||||||
|
Rate
Base
|
Rate
of
|
Common
|
||||||||||||||
|
Rate
Jurisdiction
|
(In
thousands)
|
Return
|
Equity
|
|||||||||||||
|
Arizona
|
$ |
922,721
|
8.40 | % |
9.50
|
%
|
||||||||||
|
Southern
Nevada
|
574,285
|
7.64
|
10.50
|
|||||||||||||
|
Northern
Nevada
|
110,309
|
8.56
|
10.50
|
|||||||||||||
|
Southern
California
|
102,703
|
8.74
|
10.38
|
|||||||||||||
|
Northern
California
|
45,487
|
8.74
|
10.38
|
|||||||||||||
|
Paiute
Pipeline Company (1)
|
82,853
|
9.44
|
11.80
|
|||||||||||||
|
(1) Estimated
amounts based on rate case settlements.
|
||||||||||||||||
|
SYSTEM
THROUGHPUT BY CUSTOMER CLASS
|
||||||||||||||||
|
NINE
MONTHS ENDED
|
TWELVE
MONTHS ENDED
|
|||||||||||||||
|
SEPTEMBER
30,
|
SEPTEMBER
30,
|
|||||||||||||||
|
(In
dekatherms)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
|
Residential
|
53,941,505
|
50,622,071
|
71,079,930
|
66,524,478
|
||||||||||||
|
Small
commercial
|
23,379,275
|
23,002,870
|
31,362,053
|
30,743,143
|
||||||||||||
|
Large
commercial
|
9,516,396
|
9,494,716
|
12,847,212
|
12,171,919
|
||||||||||||
|
Industrial
/ Other
|
7,820,051
|
11,223,458
|
11,520,845
|
14,745,872
|
||||||||||||
|
Transportation
|
89,318,349
|
87,164,947
|
119,677,198
|
118,671,745
|
||||||||||||
|
Total
system throughput
|
183,975,576
|
181,508,062
|
246,487,238
|
242,857,157
|
||||||||||||
|
HEATING
DEGREE DAY COMPARISON
|
||||||||||||||||
|
Actual
|
1,363
|
1,314
|
1,870
|
1,756
|
||||||||||||
|
Ten-year
average
|
1,398
|
1,405
|
1,949
|
1,968
|
||||||||||||
|
Heating
degree days for prior periods have been recalculated using the
current
period customer mix.
|
||||||||||||||||