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 2, 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 May 2,
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 and twelve months ended
March 31, 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:
May 2, 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 May 2,
2008.
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May 2,
2008
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 2008 EARNINGS
Las
Vegas, Nev. – Southwest Gas Corporation (SWX – NYSE) announced consolidated
earnings of $1.14 per basic share for the first quarter of 2008, a $0.05
decrease from the $1.19 per basic share earned during the first quarter of
2007. Consolidated net income was $49.2 million, compared to
$49.8 million in the prior-year quarter.
According
to Jeffrey W. Shaw, Chief Executive Officer, “Our natural gas operations segment
recorded solid operating results in the first quarter of 2008. Cooler
temperatures provided additional operating margin, while operating expense
increases were minimized. Customer growth continued to be affected by
a sluggish new construction housing market as the inventory of unoccupied homes
remained high in our service territories. Also, our construction
services segment experienced a small loss during the first quarter due to
unfavorable winter weather conditions and the continued slow down in the housing
market. We believe this phenomenon is temporary and that construction
results will improve as we move through the warmer weather seasons and the
housing construction market stabilizes.” Shaw closed with a
discussion of the Company’s ongoing rate case proceedings in Arizona and
California indicating “The cases remain on track, with hearings in each
jurisdiction scheduled to be
-more-
For the
twelve months ended March 31, 2008, consolidated net income was
$82.6 million, or $1.94 per basic share, compared to
$89.4 million, or $2.17 per basic share, during the twelve-month
period ended March 31, 2007. The prior twelve-month results
included approximately $0.07 per share related to a nonrecurring property
tax benefit recognized in the second quarter of 2006.
Natural Gas Operations
Segment Results
First
Quarter
Operating
margin, defined as operating revenues less the cost of gas sold, increased
approximately $8 million, or three percent, in the first quarter of
2008 compared to the first quarter of 2007. Differences in heating
demand, caused primarily by weather variations, accounted for $5 million of
the increase in operating margin as overall temperatures in the first half of
the current quarter were somewhat colder compared to the more normal levels
experienced in the first quarter of 2007. Rate relief added
$1 million and customer growth contributed $2 million toward the
operating margin increase as the Company added 20,000 customers during the
last twelve months, an increase of one percent.
-more-
Operating
expenses for the quarter increased $2.5 million, or two percent, compared
to the first quarter of 2007 primarily due to general cost increases, higher
uncollectible expenses, and incremental operating costs associated with serving
additional customers. Labor efficiencies, primarily from the ongoing
electronic meter reading project, mitigated the increase in operating
expenses. Other income decreased $2.9 million primarily due to
negative returns on long-term investments and lower interest income on declining
deferred purchased gas adjustment (PGA) receivable balances. Net
financing costs were relatively flat between periods.
Twelve
Months to Date
Operating
margin increased $21 million, or three percent, between
periods. Rate changes accounted for $11 million of the increase
and customer growth contributed $10 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 $16.9 million, or three percent, between periods
primarily due to general increases in labor and maintenance costs, higher
uncollectible expenses, and incremental operating costs associated with serving
additional customers, partially offset by labor efficiencies primarily from the
ongoing electronic meter reading project. The prior twelve-month
period included a nonrecurring property tax benefit.
-more-
Other
income decreased $6.5 million primarily due to negative returns on
long-term investments and lower interest income on declining deferred PGA
balance receivables. In
addition, other income for the prior-year period included approximately
$1 million of interest income related to the property tax
benefit. Net financing costs between periods increased
$1.9 million, or two percent, primarily due to interest expense associated
with higher deferred PGA balance payables and higher rates on variable-rate
debt.
Southwest
Gas Corporation provides natural gas service to 1,819,000 customers in Arizona,
Nevada, and California.
This
press release may contain statements which constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (Reform Act). All such forward-looking statements are
intended to be subject to the safe harbor protection provided by the Reform
Act. A number of important factors affecting the business and
financial results of the Company could cause actual results to differ materially
from those stated in the forward-looking statements. These factors
include, but are not limited to, the impact of weather variations on customer
usage, customer growth rates, conditions in the housing market, the effects of
regulation/deregulation, the timing and amount of rate relief, and changes in
rate design.
-more-
SOUTHWEST
GAS CONSOLIDATED EARNINGS DIGEST
(In
thousands, except per share amounts)
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QUARTER
ENDED MARCH 31,
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2008
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2007
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Consolidated
Operating Revenues
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$ | 813,607 | $ | 793,716 | ||||
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Net
Income
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$ | 49,152 | $ | 49,764 | ||||
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Average
Number of Common Shares Outstanding
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43,012 | 41,979 | ||||||
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Basic
Earnings Per Share
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$ | 1.14 | $ | 1.19 | ||||
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Diluted
Earnings Per Share
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$ | 1.14 | $ | 1.17 | ||||
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TWELVE
MONTHS ENDED MARCH 31,
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2008
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2007
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Consolidated
Operating Revenues
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$ | 2,171,979 | $ | 2,141,533 | ||||
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Net
Income
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$ | 82,634 | $ | 89,444 | ||||
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Average
Number of Common Shares Outstanding
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42,592 | 41,179 | ||||||
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Basic
Earnings Per Share
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$ | 1.94 | $ | 2.17 | ||||
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Diluted
Earnings Per Share
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$ | 1.92 | $ | 2.15 | ||||
-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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|||||||||||||||
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MARCH
31,
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MARCH
31,
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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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Results
of Consolidated Operations
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Contribution to net income - gas operations
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$ | 49,333 | $ | 48,628 | $ | 73,199 | $ | 78,024 | ||||||||
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Contribution to net income - construction services
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(181 | ) | 1,136 | 9,435 | 11,420 | |||||||||||
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Net income
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$ | 49,152 | $ | 49,764 | $ | 82,634 | $ | 89,444 | ||||||||
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Earnings per share - gas operations
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$ | 1.15 | $ | 1.16 | $ | 1.72 | $ | 1.89 | ||||||||
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Earnings (loss) per share - construction services
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(0.01 | ) | 0.03 | 0.22 | 0.28 | |||||||||||
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Basic earnings per share
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$ | 1.14 | $ | 1.19 | $ | 1.94 | $ | 2.17 | ||||||||
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Diluted earnings per share
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$ | 1.14 | $ | 1.17 | $ | 1.92 | $ | 2.15 | ||||||||
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Average outstanding common shares
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43,012 | 41,979 | 42,592 | 41,179 | ||||||||||||
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Average shares outstanding (assuming dilution)
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43,290 | 42,376 | 42,940 | 41,599 | ||||||||||||
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Results
of Natural Gas Operations
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Gas operating revenues
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$ | 741,300 | $ | 727,015 | $ | 1,829,051 | $ | 1,846,267 | ||||||||
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Net cost of gas sold
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500,699 | 494,211 | 1,092,682 | 1,130,702 | ||||||||||||
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Operating margin
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240,601 | 232,804 | 736,369 | 715,565 | ||||||||||||
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Operations and maintenance expense
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85,206 | 84,535 | 331,879 | 326,951 | ||||||||||||
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Depreciation and amortization
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40,645 | 38,530 | 159,205 | 149,631 | ||||||||||||
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Taxes other than income taxes
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10,194 | 10,467 | 37,280 | 34,844 | ||||||||||||
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Operating income
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104,556 | 99,272 | 208,005 | 204,139 | ||||||||||||
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Other income (expense)
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(1,526 | ) | 1,376 | 1,948 | 8,473 | |||||||||||
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Net interest deductions
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21,352 | 21,148 | 86,640 | 84,760 | ||||||||||||
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Net interest deductions on subordinated debentures
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1,932 | 1,931 | 7,728 | 7,724 | ||||||||||||
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Income before income taxes
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79,746 | 77,569 | 115,585 | 120,128 | ||||||||||||
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Income tax expense
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30,413 | 28,941 | 42,386 | 42,104 | ||||||||||||
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Contribution to net income - gas operations
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$ | 49,333 | $ | 48,628 | $ | 73,199 | $ | 78,024 | ||||||||
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SOUTHWEST
GAS CORPORATION
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SELECTED
STATISTICAL DATA
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MARCH
31, 2008
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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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8.5 | % | ||||||||||||||
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-- gas segment
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8.0 | % | ||||||||||||||
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Common
stock dividend yield at quarter end
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3.2 | % | ||||||||||||||
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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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$ | 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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THREE
MONTHS ENDED
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TWELVE
MONTHS ENDED
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|||||||||||||||
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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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2008
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2007
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2008
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2007
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Residential
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37,718,128 | 36,166,497 | 71,357,953 | 72,855,183 | ||||||||||||
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Small
commercial
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12,745,923 | 12,252,559 | 31,559,927 | 31,783,616 | ||||||||||||
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Large
commercial
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4,148,658 | 4,073,069 | 12,831,661 | 13,222,739 | ||||||||||||
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Industrial
/ Other
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2,908,310 | 3,277,681 | 9,983,129 | 15,303,206 | ||||||||||||
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Transportation
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26,653,871 | 26,640,967 | 112,855,112 | 117,546,127 | ||||||||||||
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Total
system throughput
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84,174,890 | 82,410,773 | 238,587,782 | 250,710,871 | ||||||||||||
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HEATING
DEGREE DAY COMPARISON
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Actual
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1,209 | 1,156 | 1,903 | 1,955 | ||||||||||||
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Ten-year
average
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1,095 | 1,103 | 1,926 | 1,956 | ||||||||||||
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Heating
degree days for prior periods have been recalculated using the current
period customer mix.
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