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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) July 27, 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 July 27, 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 ended June 30, 1998. 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 -- Second Quarter 1998
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: July 27, 1998 /s/ EDWARD A. JANOV
-----------------------------
Edward A. Janov
Vice President/Controller and
Chief Accounting Officer
EXHIBIT 99
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30,
--------------------- --------------------- ---------------------
1998 1997 1998 1997 1998 1997
--------- --------- --------- --------- --------- ---------
Gas operating revenues $ 165,017 $ 107,740 $ 439,380 $ 319,304 $ 734,741 $ 574,600
Net cost of gas sold 73,768 36,723 194,755 121,322 282,771 193,745
--------- --------- --------- --------- --------- ---------
Operating margin 91,249 71,017 244,625 197,982 451,970 380,855
Operations and maintenance expenses 52,181 49,407 103,031 97,855 206,335 200,748
Depreciation, amortization, and general taxes 27,519 25,814 54,793 51,426 107,288 99,171
--------- --------- --------- --------- --------- ---------
Operating income (loss) 11,549 (4,204) 86,801 48,701 138,347 80,936
Net interest deductions 15,314 15,195 31,339 29,456 63,634 56,451
Preferred securities distribution 1,369 1,369 2,738 2,738 5,475 5,475
--------- --------- --------- --------- --------- ---------
Pretax utility income (loss) (5,134) (20,768) 52,724 16,507 69,238 19,010
Utility income tax expense (benefit) (1,962) (8,112) 20,292 6,328 22,886 7,201
--------- --------- --------- --------- --------- ---------
Net utility income (loss) (3,172) (12,656) 32,432 10,179 46,352 11,809
Other income (expense), net (54) (91) (1) (390) (7,885) (571)
--------- --------- --------- --------- --------- ---------
Contribution to net income (loss) - gas operations (3,226) (12,747) 32,431 9,789 38,467 11,238
Contribution to net income (loss) - construction services 712 (1) 1,008 (969) 2,621 1,240
--------- --------- --------- --------- --------- ---------
Net income (loss) $ (2,514) $ (12,748) $ 33,439 $ 8,820 $ 41,088 $ 12,478
========= ========= ========= ========= ========= =========
Earnings (loss) per share - gas operations $ (0.12) $ (0.47) $ 1.18 $ 0.36 $ 1.41 $ 0.42
Earnings (loss) per share - construction services 0.03 0.00 0.04 (0.03) 0.09 0.05
--------- --------- --------- --------- --------- ---------
Basic earnings (loss) per share $ (0.09) $ (0.47) $ 1.22 $ 0.33 $ 1.50 $ 0.47
========= ========= ========= ========= ========= =========
Diluted earnings (loss) per share $ (0.09) $ (0.47) $ 1.21 $ 0.33 $ 1.49 $ 0.46
========= ========= ========= ========= ========= =========
Average outstanding common shares 27,570 27,002 27,509 26,910 27,366 26,733
Average shares outstanding (assuming dilution) -- -- 27,691 27,022 27,525 26,839
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.
/TABLE
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
1998 1997 1998 1997
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Gas operating revenues $ 439,380 $ 319,304 $ 734,741 $ 574,600
Net cost of gas sold 194,755 121,322 282,771 193,745
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Operating margin 244,625 197,982 451,970 380,855
Operations and maintenance expenses 103,031 97,855 206,335 200,748
Depreciation, amortization, and general taxes 54,793 51,426 107,288 99,171
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Operating income 86,801 48,701 138,347 80,936
Net interest deductions 31,339 29,456 63,634 56,451
Preferred securities distribution 2,738 2,738 5,475 5,475
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Pretax utility income 52,724 16,507 69,238 19,010
Utility income tax expense 20,292 6,328 22,886 7,201
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Net utility income 32,432 10,179 46,352 11,809
Other income (expense), net (1) (390) (7,885) (571)
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Contribution to net income - gas operations 32,431 9,789 38,467 11,238
Contribution to net income - construction services 1,008 (969) 2,621 1,240
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Net income $ 33,439 $ 8,820 $ 41,088 $ 12,478
===================================================================================================================================
Earnings per share - gas operations $ 1.18 $ 0.36 $ 1.41 $ 0.42
Earnings (loss) per share - construction services 0.04 (0.03) 0.09 0.05
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Basic earnings per share $ 1.22 $ 0.33 $ 1.50 $ 0.47
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Diluted earnings per share $ 1.21 $ 0.33 $ 1.49 $ 0.46
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Average outstanding common shares 27,509 26,910 27,366 26,733
Average shares outstanding (assuming dilution) 27,691 27,022 27,525 26,839
See Notes to Summary Financial Statements.
/TABLE
SOUTHWEST GAS CORPORATION
SUMMARY BALANCE SHEET
AT JUNE 30, 1998
(In thousands)
(Unaudited)
ASSETS
UTILITY PLANT
Gas plant, net of accumulated depreciation $ 1,364,094
Construction work in progress 36,898
-----------
Net utility plant 1,400,992
-----------
OTHER PROPERTY AND INVESTMENTS
Investment in construction services subsidiary 26,047
Other 54,824
-----------
Total other property and investments 80,871
-----------
CURRENT AND ACCRUED ASSETS
Cash, working funds and temporary cash investments 4,843
Receivables - less reserve of $1,557 for uncollectibles 37,226
Accrued utility revenue 21,500
Deferred purchased gas costs 63,302
Other 24,530
-----------
Total current and accrued assets 151,401
-----------
DEFERRED DEBITS
Unamortized debt expense 18,707
Other deferred debits 28,248
-----------
Total deferred debits 46,955
-----------
TOTAL ASSETS $ 1,680,219
===========
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common stockholders' equity
Common stock equity, $1 par, 27,625 shares outstanding $ 394,332
Retained earnings 18,396
-----------
Total common stockholders' equity 412,728 33.1%
Preferred securities of Southwest Gas Capital I, 9.125% 60,000 4.8
Long-term debt - NOTE 2 774,963 62.1
----------- ------
Total capitalization 1,247,691 100.0%
----------- ======
CURRENT AND ACCRUED LIABILITIES
Notes payable 75,900
Accounts payable 30,866
Customer deposits 22,459
Taxes accrued (including income taxes) 25,042
Other 58,698
-----------
Total current and accrued liabilities 212,965
-----------
DEFERRED CREDITS
Deferred investment tax credits 17,705
Deferred income taxes 151,532
Other 50,326
-----------
Total deferred credits 219,563
-----------
TOTAL CAPITALIZATION AND LIABILITIES $ 1,680,219
===========
See Notes to Summary Financial Statements.
/TABLE
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1998
(In thousands)
(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net income $ 33,439
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 38,976
Change in receivables and payables 28,393
Change in gas cost related balancing items 23,389
Change in accrued taxes 23,150
Change in deferred taxes (5,048)
Allowance for funds used during construction (929)
Other 10,648
---------
Net cash provided by operating activities 152,018
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (78,972)
Other (12,104)
---------
Net cash used in investing activities (91,076)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock issuances 4,632
Dividends paid (11,274)
Change in notes payable (66,100)
Long-term debt issuances, net 3,300
---------
Net cash used in financing activities (69,442)
---------
Change in cash and temporary cash investments (8,500)
Cash at beginning of period 13,343
---------
Cash at end of period $ 4,843
=========
SUPPLEMENTAL INFORMATION:
Interest paid, net of amounts capitalized $ 30,262
Income taxes, net of refunds $ 1,388
See Notes to Summary Financial Statements.
/TABLE
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 - LONG-TERM DEBT:
Term loan facility $ 200,000
Debentures and notes:
Debentures, 9.75% series F, due 2002 100,000
Debentures, 7.50% 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:
Variable-rate bonds, Series A, due 2028 - net of funds held in trust 26,911
7.30% 1992 Series A, due 2027 30,000
7.50% 1992 Series B, due 2032 100,000
6.50% 1993 Series A, due 2033 75,000
Unamortized discount on long-term debt (6,948)
---------
TOTAL LONG-TERM DEBT $ 774,963
=========
ESTIMATED CURRENT MATURITIES $ --
=========
/TABLE
SOUTHWEST GAS CORPORATION
SELECTED STATISTICAL DATA
JUNE 30, 1998
FINANCIAL STATISTICS
Market value to book value per share at quarter end 164%
Twelve months to date return on equity -- total company 10.4%
-- gas 10.2%
Common stock dividend yield at quarter end 3.4%
GAS OPERATIONS SEGMENT
Authorized
Authorized Authorized Return on
Rate Base Rate of Common
Rate Jurisdiction (In thousands) Return Equity
- ---------------------------- -------------- ---------- ----------
Arizona (1) $ 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 21,350 10.02 11.35
Paiute Pipeline Company (1) 61,602 9.69 11.60
(1) Estimated amounts based on rate case settlements.
SYSTEM THROUGHPUT BY CUSTOMER CLASS SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30,
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(In dekatherms) 1998 1997 1998 1997
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Residential 39,760,871 32,420,431 57,895,319 49,373,150
Small commercial 16,426,936 14,490,813 26,596,665 24,257,249
Large commercial 4,117,306 4,044,736 7,726,751 7,610,136
Industrial / Other 5,898,152 3,659,318 10,842,440 6,057,093
Transportation 43,892,841 45,544,144 101,434,426 99,434,472
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Total system throughput 110,096,106 100,159,442 204,495,601 186,732,100
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HEATING DEGREE DAY COMPARISON
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Actual 1,717 1,322 2,369 1,971
Ten-year average 1,420 1,398 2,044 2,020
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/TABLE
