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 5, 2008
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
November 5, 2008, 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, 2008. 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:
November 5, 2008
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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 November 5,
2008.
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November
5, 2008
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 $0.38 per share for the
third quarter of 2008, compared to a loss of $0.22 per share recorded during the
third quarter of 2007. Net loss for the third quarter of 2008 was
$16.7 million, compared to a loss of $9.3 million in the prior-year
quarter. 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, “A significant component of the
downturn in quarterly results was the negative return on long-term investments –
a stock market-related, but non-operating, phenomenon. The current
quarter reflects a $3.7 million decline in investment values while the
prior-year quarter included a $355,000 increase in the value of investments
underlying the cash surrender value of company-owned life insurance (“COLI”)
policies. This change accounted for $0.09 per share of the decline
between periods.” From an operations standpoint, Shaw noted that
“Excluding COLI, operating results declined $3.3 million, or $0.07 per
share, between periods, principally in the gas operations segment, as a modest
increase in operating margin and lower financing costs were not sufficient to
offset higher operating costs. The slowdown in the new construction
market coupled with an increasing inventory of
-more-
vacant
existing homes has clearly impacted operating results.” Shaw
concluded by saying, “We know we are in challenging economic times and there is
no ‘quick fix’ available. However, many of our underlying
fundamentals are strong and should allow us to ‘weather the
storm.’ We have an improving capital structure, strong liquidity
position, stable work force, moderate long-term cost increases, and general rate
increase requests in Arizona and California which are nearing
conclusion. As a result, we continue to believe we are positioned for
future long-term improvements.”
For the
twelve months ended September 30, 2008, consolidated net income was
$72.9 million, or $1.69 per basic share, compared to
$86.8 million, or $2.06 per basic share, during the twelve-month
period ended September 30, 2007.
Natural Gas Operations
Segment Results
Third
Quarter
Operating
margin, defined as operating revenues less the cost of gas sold, increased
$1.5 million, or one percent, in the third quarter of 2008 compared to
the third quarter of 2007. Customer growth contributed
$1 million toward the operating margin increase as the Company added 19,000
net new customers during the last twelve months, an increase of
one percent. Rate changes accounted for the remainder of the
increase.
Operating
expenses for the quarter increased $6.4 million, or five percent,
compared to the third quarter of 2007 primarily due to general cost increases
and incremental
-more-
operating
costs (including depreciation) associated with serving additional customers and
facilities upgrades. Other income, which principally includes
interest income, long-term investment returns, and non-utility expenses,
decreased $5 million between periods. This was primarily due to
a $4.1 million decline in returns on long-term investments between
periods. Net financing costs decreased $1.5 million due
principally to a reduction in outstanding debt.
Twelve
Months to Date
Operating
margin increased $10 million, or one percent, between
periods. Customer growth accounted for $8 million of the
increase and rate changes contributed
$2 million. Warmer-than-normal temperatures were experienced
during both twelve-month periods (each with estimated negative impacts to
operating margin of approximately $7 million), resulting in no incremental
impact between the periods.
Operating
expenses increased $7.7 million, or one percent, between periods primarily
due to general cost increases, partially offset by labor efficiencies resulting
from the conversion to electronic meter reading.
Other
income decreased $16.3 million between periods primarily due to a
$10.8 million decrease in returns on long-term investments
($7.3 million loss in the current twelve-month period versus a
$3.5 million gain in the prior-year period) and a $2.4 million
reduction in interest income primarily due to the full recovery of previously
deferred
-more-
purchased
gas cost receivables. Net financing costs between periods decreased
$1.2 million, or one percent, due principally to lower average debt
outstanding.
Southwest
Gas Corporation provides natural gas service to approximately
1,819,000 customers in Arizona, Nevada, and California.
This
press release may contain statements which constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (Reform Act). All such forward-looking statements are
intended to be subject to the safe harbor protection provided by the Reform
Act. A number of important factors affecting the business and
financial results of the Company could cause actual results to differ materially
from those stated in the forward-looking statements. These factors
include, but are not limited to, the impact of weather variations on customer
usage, customer growth rates, conditions in the housing market, the effects of
regulation/deregulation, the timing and amount of rate relief, and changes in
rate design.
-more-
SOUTHWEST GAS CONSOLIDATED EARNINGS DIGEST
(In thousands,
except per share amounts)
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QUARTER
ENDED SEPTEMBER 30,
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2008
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2007
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||||||
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Consolidated
Operating Revenues
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$ | 374,422 | $ | 371,524 | ||||
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Net
Loss
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$ | 16,686 | $ | 9,318 | ||||
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Average
Number of Common Shares Outstanding
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43,581 | 42,448 | ||||||
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Loss
Per Share
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$ | 0.38 | $ | 0.22 | ||||
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NINE
MONTHS ENDED SEPTEMBER 30,
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2008
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2007
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||||||
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Consolidated
Operating Revenues
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$ | 1,635,333 | $ | 1,591,777 | ||||
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Net
Income
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$ | 29,741 | $ | 40,109 | ||||
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Average
Number of Common Shares Outstanding
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43,307 | 42,219 | ||||||
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Basic
Earnings Per Share
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$ | 0.69 | $ | 0.95 | ||||
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Diluted
Earnings Per Share
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$ | 0.68 | $ | 0.94 | ||||
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TWELVE
MONTHS ENDED SEPTEMBER 30,
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2008
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2007
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Consolidated
Operating Revenues
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$ | 2,195,644 | $ | 2,156,892 | ||||
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Net
Income
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$ | 72,878 | $ | 86,816 | ||||
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Average
Number of Common Shares Outstanding
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43,150 | 42,060 | ||||||
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Basic
Earnings Per Share
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$ | 1.69 | $ | 2.06 | ||||
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Diluted
Earnings Per Share
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$ | 1.68 | $ | 2.04 | ||||
-end-
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SOUTHWEST
GAS CORPORATION
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||||||||||||||||||||||||
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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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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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2008
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2007
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2008
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2007
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2008
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2007
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Results
of Consolidated Operations
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Contribution
to net income (loss) - gas operations
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$ | (19,678 | ) | $ | (12,863 | ) | $ | 24,748 | $ | 32,910 | $ | 64,332 | $ | 76,077 | ||||||||||
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Contribution
to net income - construction services
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2,992 | 3,545 | 4,993 | 7,199 | 8,546 | 10,739 | ||||||||||||||||||
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Net
income (loss)
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$ | (16,686 | ) | $ | (9,318 | ) | $ | 29,741 | $ | 40,109 | $ | 72,878 | $ | 86,816 | ||||||||||
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Basic
earnings (loss) per share
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$ | (0.38 | ) | $ | (0.22 | ) | $ | 0.69 | $ | 0.95 | $ | 1.69 | $ | 2.06 | ||||||||||
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Diluted
earnings (loss) per share
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$ | (0.38 | ) | $ | (0.22 | ) | $ | 0.68 | $ | 0.94 | $ | 1.68 | $ | 2.04 | ||||||||||
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Average
outstanding common shares
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43,581 | 42,448 | 43,307 | 42,219 | 43,150 | 42,060 | ||||||||||||||||||
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Average
shares outstanding (assuming dilution)
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- | - | 43,610 | 42,607 | 43,464 | 42,469 | ||||||||||||||||||
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Results
of Natural Gas Operations
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Gas
operating revenues
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$ | 268,450 | $ | 274,748 | $ | 1,362,753 | $ | 1,345,996 | $ | 1,831,523 | $ | 1,838,039 | ||||||||||||
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Net
cost of gas sold
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134,030 | 141,825 | 839,309 | 834,453 | 1,091,050 | 1,107,594 | ||||||||||||||||||
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Operating
margin
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134,420 | 132,923 | 523,444 | 511,543 | 740,473 | 730,445 | ||||||||||||||||||
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Operations
and maintenance expense
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87,489 | 83,222 | 256,298 | 250,847 | 336,659 | 336,934 | ||||||||||||||||||
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Depreciation
and amortization
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41,623 | 39,774 | 123,565 | 117,380 | 163,275 | 155,022 | ||||||||||||||||||
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Taxes
other than income taxes
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8,103 | 7,848 | 27,913 | 28,253 | 37,213 | 37,495 | ||||||||||||||||||
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Operating
income (loss)
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(2,795 | ) | 2,079 | 115,668 | 115,063 | 203,326 | 200,994 | |||||||||||||||||
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Other
income (expense)
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(4,548 | ) | 478 | (6,710 | ) | 5,502 | (7,362 | ) | 8,984 | |||||||||||||||
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Net
interest deductions
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20,521 | 22,003 | 62,811 | 64,466 | 84,781 | 86,018 | ||||||||||||||||||
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Net
interest deductions on subordinated debentures
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1,933 | 1,932 | 5,797 | 5,795 | 7,729 | 7,726 | ||||||||||||||||||
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Income
(loss) before income taxes
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(29,797 | ) | (21,378 | ) | 40,350 | 50,304 | 103,454 | 116,234 | ||||||||||||||||
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Income
tax expense (benefit)
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(10,119 | ) | (8,515 | ) | 15,602 | 17,394 | 39,122 | 40,157 | ||||||||||||||||
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Contribution
to net income (loss) - gas operations
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$ | (19,678 | ) | $ | (12,863 | ) | $ | 24,748 | $ | 32,910 | $ | 64,332 | $ | 76,077 | ||||||||||
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SOUTHWEST
GAS CORPORATION
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||||||||||||||||
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SELECTED
STATISTICAL DATA
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||||||||||||||||
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SEPTEMBER
30, 2008
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FINANCIAL
STATISTICS
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||||||||||||||||
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Market
value to book value per share at quarter end
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131 | % | ||||||||||||||
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Twelve
months to date return on equity -- total
company
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7.3 | % | ||||||||||||||
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--
gas segment
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6.8 | % | ||||||||||||||
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Common
stock dividend yield at quarter end
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3.0 | % | ||||||||||||||
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GAS
OPERATIONS SEGMENT
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||||||||||||||||
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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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$ | 922,721 | 8.40 | % | 9.50 | % | ||||||||||
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Southern
Nevada
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574,285 | 7.64 | 10.50 | |||||||||||||
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Northern
Nevada
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110,309 | 8.56 | 10.50 | |||||||||||||
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Southern
California
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102,703 | 8.74 | 10.38 | |||||||||||||
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Northern
California
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45,487 | 8.74 | 10.38 | |||||||||||||
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Paiute
Pipeline Company (1)
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82,853 | 9.44 | 11.80 | |||||||||||||
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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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||||||||||||||||
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NINE
MONTHS ENDED
|
TWELVE
MONTHS ENDED
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|||||||||||||||
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SEPTEMBER
30,
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SEPTEMBER
30,
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|||||||||||||||
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(In
dekatherms)
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2008
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2007
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2008
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2007
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||||||||||||
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Residential
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56,165,408 | 53,941,505 | 72,030,225 | 71,079,930 | ||||||||||||
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Small
commercial
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24,173,970 | 23,379,275 | 31,861,258 | 31,362,053 | ||||||||||||
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Large
commercial
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9,505,802 | 9,516,396 | 12,745,478 | 12,847,212 | ||||||||||||
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Industrial
/ Other
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7,189,719 | 7,820,051 | 9,722,168 | 11,520,845 | ||||||||||||
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Transportation
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89,208,081 | 89,318,349 | 112,731,940 | 119,677,198 | ||||||||||||
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Total
system throughput
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186,242,980 | 183,975,576 | 239,091,069 | 246,487,238 | ||||||||||||
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HEATING
DEGREE DAY COMPARISON
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||||||||||||||||
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Actual
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1,446 | 1,362 | 1,933 | 1,868 | ||||||||||||
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Ten-year
average
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1,367 | 1,396 | 1,904 | 1,947 | ||||||||||||
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Heating
degree days for prior periods have been recalculated using the current
period customer mix.
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