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) May 5, 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 May 5,
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
March 31, 2010. 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:
May 5, 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 May 5,
2010.
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May 5,
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
FIRST QUARTER 2010 EARNINGS
Las
Vegas, Nev. – Southwest Gas Corporation (NYSE: SWX) announced consolidated
earnings of $1.43 per basic share for the first quarter of 2010, a $0.30
increase from the $1.13 per basic share earned during the first quarter of
2009. Consolidated net income was $64.6 million for the first
quarter of 2010, compared to $50 million for the prior-year
quarter.
According
to Jeffrey W. Shaw, Chief Executive Officer, “Our net income of
$64.6 million in the first quarter of 2010 is a significant improvement
over the prior year. The natural gas segment experienced higher
operating results as rate relief and a return to more normal weather combined
for a $23 million increase in operating margin over the prior-year
quarter. You may remember that in 2009, Arizona experienced one of
its warmest winters in the past 100 years. Our sensible cost
controls kept operating cost increases to a minimum, which also contributed to
the stronger earnings.” Shaw concluded by saying, “We remain focused
on the core fundamentals of our business, and believe we are seeing the results
of that strategy. These results include a recent Standard &
Poor’s credit rating outlook revision to positive from stable, which could
ultimately lead to lower financing costs for the Company and our
customers.”
-more-
For the
twelve months ended March 31, 2010, consolidated net income was
$102.1 million, or $2.27 per basic share, compared to
$61.8 million, or $1.41 per basic share, during the twelve-month
period ended March 31, 2009. The increase between periods
reflected higher operating margin, a significant improvement in other income,
and lower financing costs. Other income in the current twelve-month
period includes an $11.6 million ($0.26 per share) increase in the cash
surrender values of company-owned life insurance (“COLI”) policies, while the
prior twelve-month period included an $11.5 million ($0.26 per share)
decrease in COLI policies.
Natural Gas Operations
Segment Results
First
Quarter
Operating
margin, defined as operating revenues less the cost of gas sold, increased
$23 million in the first quarter of 2010 compared to the first quarter of
2009. Differences in heating demand, caused primarily by weather
variations, provided $13 million of the operating margin increase as
temperatures in the current quarter were relatively normal, while temperatures
were significantly warmer than normal in the first quarter of
2009. Rate relief provided $10 million of the operating margin
increase, consisting of $9 million in Nevada and $1 million in
California. Customer growth had a negligible impact as 9,000 net
new customers were added during the last twelve months.
Operating
expenses for the quarter increased $2.1 million, or two percent,
compared to the first quarter of 2009 primarily due to higher employee-related
and general costs. Lower depreciation rates in the Nevada rate
jurisdictions mitigated the increase.
-more-
Other
income, which principally includes returns on COLI policies and non-utility
expenses, improved $1.3 million between quarters. This was
primarily due to a favorable swing in the cash surrender values of COLI
policies. Net financing costs were virtually unchanged.
Twelve
Months to Date
Operating
margin increased $37 million between periods. Rate relief and
rate changes provided a net $18 million increase, consisting of rate relief
of $16 million in Arizona, $11 million in Nevada, and $3 million
in California, partially offset by a decrease of $12 million related to the
return to a seasonal margin methodology in California in
2009. Differences in heating demand caused primarily by weather
variations between periods resulted in a $23 million operating margin
increase as warmer-than-normal temperatures were experienced during both periods
(during the twelve-month period of 2010, operating margin was negatively
impacted by $5 million, while the negative impact in the twelve-month
period of 2009 was $28 million). Customer growth contributed
$1 million in operating margin. Conservation, resulting from
current economic conditions and energy efficiency, negatively impacted operating
margin by an estimated $5 million.
-more-
Operating
expenses increased $12.3 million, or two percent, between periods
principally due to general cost increases and higher employee-related benefit
costs. The increase was mitigated by somewhat lower staffing
levels. Despite additional plant in service, depreciation expense
decreased slightly due to lower depreciation rates in California and Nevada rate
jurisdictions.
Other
income improved $21.6 million between periods. This was
primarily due to the net change in the cash surrender values of COLI
policies. Net financing costs decreased $6 million between
periods due to a reduction in outstanding debt and lower interest rates on
variable-rate debt.
Southwest
Gas Corporation provides natural gas service to 1,830,000 customers in Arizona,
Nevada, and California.
This
press release may contain statements which constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995 (Reform Act). All such forward-looking statements are
intended to be subject to the safe harbor protection provided by the Reform
Act. A number of important factors affecting the business and
financial results of the Company could cause actual results to differ materially
from those stated in the forward-looking statements. These factors
include, but are not limited to, the impact of weather variations on customer
usage, customer growth rates, conditions in the housing market, the effects of
regulation/deregulation, the timing and amount of rate relief, changes in rate
design, and the impacts of stock market volatility.
-more-
SOUTHWEST
GAS CONSOLIDATED EARNINGS DIGEST
(In
thousands, except per share amounts)
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QUARTER
ENDED MARCH 31,
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2010
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2009
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||||||
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Consolidated
Operating Revenues
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$ | 668,751 | $ | 689,862 | ||||
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Net
Income
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$ | 64,648 | $ | 49,981 | ||||
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Average
Number of Common Shares Outstanding
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45,221 | 44,424 | ||||||
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Basic
Earnings Per Share
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$ | 1.43 | $ | 1.13 | ||||
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Diluted
Earnings Per Share
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$ | 1.42 | $ | 1.12 | ||||
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TWELVE
MONTHS ENDED MARCH 31,
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2010 | 2009 | ||||||
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Consolidated
Operating Revenues
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$ | 1,872,713 | $ | 2,020,998 | ||||
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Net
Income
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$ | 102,149 | $ | 61,802 | ||||
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Average
Number of Common Shares Outstanding
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44,948 | 43,825 | ||||||
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Basic
Earnings Per Share
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$ | 2.27 | $ | 1.41 | ||||
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Diluted
Earnings Per Share
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$ | 2.26 | $ | 1.40 | ||||
-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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TWELVE
MONTHS ENDED
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MARCH
31,
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MARCH
31,
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|||||||||||||||
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2010
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2009
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2010
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2009
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Results
of Consolidated Operations
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Contribution
to net income - gas operations
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$ | 65,317 | $ | 49,852 | $ | 94,885 | $ | 54,266 | ||||||||
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Contribution
to net income - construction services
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(669 | ) | 129 | 7,264 | 7,536 | |||||||||||
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Net
income
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$ | 64,648 | $ | 49,981 | $ | 102,149 | $ | 61,802 | ||||||||
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Basic
earnings per share
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$ | 1.43 | $ | 1.13 | $ | 2.27 | $ | 1.41 | ||||||||
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Diluted
earnings per share
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$ | 1.42 | $ | 1.12 | $ | 2.26 | $ | 1.40 | ||||||||
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Average
outstanding common shares
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45,221 | 44,424 | 44,948 | 43,825 | ||||||||||||
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Average
shares outstanding (assuming dilution)
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45,595 | 44,680 | 45,287 | 44,118 | ||||||||||||
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Results
of Natural Gas Operations
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Gas
operating revenues
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$ | 614,509 | $ | 635,106 | $ | 1,594,246 | $ | 1,685,201 | ||||||||
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Net
cost of gas sold
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352,255 | 395,810 | 823,075 | 951,088 | ||||||||||||
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Operating
margin
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262,254 | 239,296 | 771,171 | 734,113 | ||||||||||||
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Operations
and maintenance expense
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86,705 | 84,662 | 350,985 | 338,116 | ||||||||||||
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Depreciation
and amortization
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42,696 | 42,339 | 167,207 | 168,031 | ||||||||||||
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Taxes
other than income taxes
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9,766 | 10,111 | 36,973 | 36,697 | ||||||||||||
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Operating
income
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123,087 | 102,184 | 216,006 | 191,269 | ||||||||||||
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Other
income (deductions)
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(531 | ) | (1,786 | ) | 7,845 | (13,729 | ) | |||||||||
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Net
interest deductions
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18,024 | 18,182 | 73,933 | 79,926 | ||||||||||||
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Net
interest deductions on subordinated debentures
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1,912 | 1,933 | 7,710 | 7,730 | ||||||||||||
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Income
before income taxes
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102,620 | 80,283 | 142,208 | 89,884 | ||||||||||||
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Income
tax expense
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37,303 | 30,431 | 47,323 | 35,618 | ||||||||||||
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Contribution
to net income - gas operations
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$ | 65,317 | $ | 49,852 | $ | 94,885 | $ | 54,266 | ||||||||
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SOUTHWEST
GAS CORPORATION
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SELECTED
STATISTICAL DATA
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MARCH
31, 2010
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FINANCIAL
STATISTICS
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Market
value to book value per share at quarter end
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117 | % | ||||||||||||||
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Twelve
months to date return on equity -- total
company
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9.3 | % | ||||||||||||||
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-- gas segment
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9.1 | % | ||||||||||||||
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Common
stock dividend yield at quarter end
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3.3 | % | ||||||||||||||
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GAS
OPERATIONS SEGMENT
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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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||||||||||||||
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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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84,717 | 9.47 | 12.00 | |||||||||||||
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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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THREE
MONTHS ENDED
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TWELVE
MONTHS ENDED
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MARCH
31,
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MARCH
31,
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|||||||||||||||
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(In
dekatherms)
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2010 | 2009 | 2010 | 2009 | ||||||||||||
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Residential
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34,501,432 | 31,971,846 | 69,503,179 | 64,752,340 | ||||||||||||
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Small
commercial
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11,599,524 | 11,158,027 | 29,863,922 | 29,867,581 | ||||||||||||
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Large
commercial
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3,394,893 | 3,798,409 | 11,320,605 | 12,161,895 | ||||||||||||
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Industrial
/ Other
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1,705,063 | 2,304,803 | 6,662,608 | 9,166,640 | ||||||||||||
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Transportation
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25,741,783 | 26,921,730 | 103,209,444 | 116,686,840 | ||||||||||||
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Total
system throughput
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76,942,695 | 76,154,815 | 220,559,758 | 232,635,296 | ||||||||||||
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HEATING
DEGREE DAY COMPARISON
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Actual
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1,128 | 1,018 | 1,932 | 1,712 | ||||||||||||
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Ten-year
average
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1,103 | 1,092 | 1,894 | 1,890 | ||||||||||||
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Heating
degree days for prior periods have been recalculated using the current
period customer mix.
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