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) October 29, 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 offies) (Zip Code)
Registrant's telephone number, including area code: (702) 876-7237
ITEM 5. OTHER EVENTS
On October 29, 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 September 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 - Third 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: October 29, 1998 /s/ EDWARD A. JANOV
-----------------------------
Edward A. Janov
Vice President/Controller and
Chief Accounting Officer
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,
---------------------- --------------------- ---------------------
1998 1997 1998 1997 1998 1997
--------- --------- --------- --------- --------- ---------
Gas operating revenues $ 128,229 $ 95,009 $ 567,609 $ 414,313 $ 767,961 $ 584,075
Net cost of gas sold 51,499 28,508 246,254 149,830 305,762 198,226
--------- --------- --------- --------- --------- ---------
Operating margin 76,730 66,501 321,355 264,483 462,199 385,849
Operations and maintenance expenses 50,765 50,310 153,796 148,165 206,790 201,972
Depreciation, amortization, and general taxes 28,262 26,244 83,055 77,670 109,306 101,038
--------- --------- --------- --------- --------- ---------
Operating income (loss) (2,297) (10,053) 84,504 38,648 146,103 82,839
Net interest deductions 15,467 15,736 46,806 45,192 63,365 58,867
Preferred securities distribution 1,368 1,368 4,106 4,106 5,475 5,475
--------- --------- --------- --------- --------- ---------
Pretax utility income (loss) (19,132) (27,157) 33,592 (10,650) 77,263 18,497
Utility income tax expense (benefit) (7,550) (10,421) 12,742 (4,093) 25,757 7,225
--------- --------- --------- --------- --------- ---------
Net utility income (loss) (11,582) (16,736) 20,850 (6,557) 51,506 11,272
Other income (expense), net (212) (35) (213) (425) (8,062) (549)
--------- --------- --------- --------- --------- ---------
Contribution to net income (loss) - gas operations (11,794) (16,771) 20,637 (6,982) 43,444 10,723
Contribution to net income (loss) - construction services 849 1,085 1,857 116 2,385 707
--------- --------- --------- --------- --------- ---------
Net income (loss) $ (10,945) $ (15,686) $ 22,494 $ (6,866) $ 45,829 $ 11,430
========= ========= ========= ========= ========= =========
Earnings (loss) per share - gas operations $ (0.41) $ (0.62) $ 0.74 $ (0.26) $ 1.56 $ 0.40
Earnings per share - construction services 0.03 0.04 0.06 0.01 0.09 0.02
--------- --------- --------- --------- --------- ---------
Basic earnings (loss) per share $ (0.38) $ (0.58) $ 0.80 $ (0.25) $ 1.65 $ 0.42
========= ========= ========= ========= ========= =========
Diluted earnings (loss) per share $ (0.38) $ (0.58) $ 0.80 $ (0.25) $ 1.64 $ 0.42
========= ========= ========= ========= ========= =========
Average outstanding common shares 29,050 27,149 28,028 26,990 27,846 26,902
Average shares outstanding (assuming dilution) -- -- 28,216 -- 28,022 27,021
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)
NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
1998 1997 1998 1997
- ---------------------------------------------------------------------------------------------------------------------------
Gas operating revenues $ 567,609 $ 414,313 $ 767,961 $ 584,075
Net cost of gas sold 246,254 149,830 305,762 198,226
- ---------------------------------------------------------------------------------------------------------------------------
Operating margin 321,355 264,483 462,199 385,849
Operations and maintenance expenses 153,796 148,165 206,790 201,972
Depreciation, amortization, and general taxes 83,055 77,670 109,306 101,038
- ---------------------------------------------------------------------------------------------------------------------------
Operating income 84,504 38,648 146,103 82,839
Net interest deductions 46,806 45,192 63,365 58,867
Preferred securities distribution 4,106 4,106 5,475 5,475
- ---------------------------------------------------------------------------------------------------------------------------
Pretax utility income (loss) 33,592 (10,650) 77,263 18,497
Utility income tax expense (benefit) 12,742 (4,093) 25,757 7,225
- ---------------------------------------------------------------------------------------------------------------------------
Net utility income (loss) 20,850 (6,557) 51,506 11,272
Other income (expense), net (213) (425) (8,062) (549)
- ---------------------------------------------------------------------------------------------------------------------------
Contribution to net income (loss) - gas operations 20,637 (6,982) 43,444 10,723
Contribution to net income (loss) - construction services 1,857 116 2,385 707
- ---------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 22,494 $ (6,866) $ 45,829 $ 11,430
===========================================================================================================================
Earnings (loss) per share - gas operations $ 0.74 $ (0.26) $ 1.56 $ 0.40
Earnings per share - construction services 0.06 0.01 0.09 0.02
- ---------------------------------------------------------------------------------------------------------------------------
Basic earnings (loss) per share $ 0.80 $ (0.25) $ 1.65 $ 0.42
===========================================================================================================================
Diluted earnings (loss) per share $ 0.80 $ (0.25) $ 1.64 $ 0.42
===========================================================================================================================
Average outstanding common shares 28,028 26,990 27,846 26,902
Average shares outstanding (assuming dilution) 28,216 -- 28,022 27,021
See Notes to Summary Financial Statements.
/TABLE
SOUTHWEST GAS CORPORATION
SUMMARY BALANCE SHEET
AT SEPTEMBER 30, 1998
(In thousands)
(Unaudited)
ASSETS
UTILITY PLANT
Gas plant, net of accumulated depreciation $ 1,387,598
Construction work in progress 37,833
------------
Net utility plant 1,425,431
------------
OTHER PROPERTY AND INVESTMENTS
Investment in construction services subsidiary 26,896
Other 46,561
------------
Total other property and investments 73,457
------------
CURRENT AND ACCRUED ASSETS
Cash, working funds and temporary cash investments 6,846
Receivables - less reserve of $914 for uncollectibles 31,088
Accrued utility revenue 22,500
Deferred purchased gas costs 59,740
Other 40,407
------------
Total current and accrued assets 160,581
------------
DEFERRED DEBITS
Unamortized debt expense 18,566
Other deferred debits 27,760
------------
Total deferred debits 46,326
------------
TOTAL ASSETS $ 1,705,795
============
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common stockholders' equity
Common stock equity, $1 par, 30,285 shares outstanding $ 453,546
Retained earnings 720
------------
Total common stockholders' equity 454,266 34.5%
Preferred securities of Southwest Gas Capital I, 9.125% 60,000 4.6
Long-term debt - NOTE 2 801,198 60.9
------------ -----
Total capitalization 1,315,464 100.0%
------------ =====
CURRENT AND ACCRUED LIABILITIES
Notes payable 31,000
Accounts payable 31,695
Customer deposits 22,918
Taxes accrued (including income taxes) 23,904
Other 59,016
------------
Total current and accrued liabilities 168,533
------------
DEFERRED CREDITS
Deferred investment tax credits 17,488
Deferred income taxes 153,369
Other 50,941
------------
Total deferred credits 221,798
------------
TOTAL CAPITALIZATION AND LIABILITIES $ 1,705,795
============
See Notes to Summary Financial Statements.
/TABLE
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998
(In thousands)
(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net income $ 22,494
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 59,539
Change in receivables and payables 34,837
Change in gas cost related balancing items 30,009
Change in accrued taxes 22,012
Change in deferred taxes (9,134)
Allowance for funds used during construction (1,401)
Other (1,934)
---------
Net cash provided by operating activities 156,422
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (124,358)
Other (3,518)
---------
Net cash used in investing activities (127,876)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock issuances 63,846
Dividends paid (17,460)
Change in notes payable (111,000)
Long-term debt issuances, net 29,571
---------
Net cash used in financing activities (35,043)
---------
Change in cash and temporary cash investments (6,497)
Cash at beginning of period 13,343
---------
Cash at end of period $ 6,846
=========
SUPPLEMENTAL INFORMATION:
Interest paid, net of amounts capitalized $ 45,396
Income taxes, net of refunds $ 6,406
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 - 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
Medium-term notes, 6.27% series, due 2008 25,000
Industrial development revenue bonds:
Variable-rate bonds, Series A, due 2028 - net of funds held in trust 28,201
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 (7,003)
---------
TOTAL LONG-TERM DEBT $ 801,198
=========
ESTIMATED CURRENT MATURITIES $ --
=========
/TABLE
SOUTHWEST GAS CORPORATION
SELECTED STATISTICAL DATA
SEPTEMBER 30, 1998
FINANCIAL STATISTICS
Market value to book value per share at quarter end 136%
Twelve months to date return on equity -- total company 11.2%
-- gas segment 11.1%
Common stock dividend yield at quarter end 4.0%
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 21,470 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 NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ---------------------------
(In dekatherms) 1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
Residential 44,893,515 37,427,296 58,021,097 49,848,278
Small commercial 20,332,720 18,289,465 26,703,795 24,485,468
Large commercial 6,116,845 5,951,794 7,819,232 7,638,423
Industrial / Other 13,206,848 5,967,696 15,842,753 7,291,800
Transportation 73,183,218 80,285,401 95,983,545 102,952,681
- --------------------------------------------------------------------------------------------------------------------------------
Total system throughput 157,733,146 147,921,652 204,370,422 192,216,650
================================================================================================================================
HEATING DEGREE DAY COMPARISON
- --------------------------------------------------------------------------------------------------------------------------------
Actual 1,749 1,357 2,365 1,974
Ten-year average 1,452 1,430 2,042 2,019
================================================================================================================================
/TABLE
