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 1, 2009
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 1,
2009, 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, 2009. 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 1, 2009
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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 1, 2009.
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May 1,
2009
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 2009 EARNINGS
Las
Vegas, Nev. – Southwest Gas Corporation (NYSE: SWX) announced consolidated
earnings of $1.13 per basic share for the first quarter of 2009, a $0.01
decrease from the $1.14 per basic share earned during the first quarter of
2008. Consolidated net income was $50 million for the first
quarter of 2009, compared to $49.2 million for the prior-year
quarter. The decline in per share earnings reflects an increase
between periods in the number of outstanding common shares.
According
to Jeffrey W. Shaw, Chief Executive Officer, “We believe we managed the business
well in the areas we could control as operating costs were held in check, our
liquidity position remained strong, our capital structure improved, and
financing costs were reduced. Unfortunately cold weather eluded us,
particularly in Arizona which experienced one of the warmest winters in the past
100 years, resulting in reduced operating margin between
periods. The warm weather coupled with recessionary conditions offset
recently granted rate relief and a nearly $12 million margin reallocation
in California.”
Shaw also
noted several recent events, “In April 2009, we filed a $30.5 million
general rate case in Nevada, our first in five years, which includes a request
to decouple rates
-more-
from
usage under recently established Public Utilities Commission of Nevada
rules. This case should be concluded before the next heating
season. Also in April, Standard & Poor’s upgraded our debt
ratings to BBB from BBB-, a notable achievement in today’s volatile economic
environment.”
For the
twelve months ended March 31, 2009, consolidated net income was
$61.8 million, or $1.41 per basic share, compared to
$82.6 million, or $1.94 per basic share, during the twelve-month
period ended March 31, 2008. The reduction between periods
reflected lower operating income, primarily due to warm weather, a reduced
contribution from the Company’s construction services subsidiary, and noncash
charges related to significant declines in the cash surrender values of
company-owned life insurance (“COLI”) policies during the second half of
2008.
Natural Gas Operations
Segment Results
First
Quarter
Operating
margin, defined as operating revenues less the cost of gas sold, decreased a net
$1 million in the first quarter of 2009 compared to the first quarter of
2008. Rate relief and rate changes positively impacted margin by
approximately $22 million, consisting of $9 million in Arizona,
$1 million of rate relief in California and nearly $12 million related
to the return to a seasonal margin methodology in
California. Differences in heating demand, caused primarily by
weather variations, negatively impacted operating margin by $17 million as
overall temperatures in the current quarter were significantly warmer than
normal ($13 million), while temperatures were somewhat
-more-
colder
than normal ($4 million) in the first quarter of 2008. Energy
efficiency and conservation resulting from current economic conditions
negatively impacted operating margin by $6 million. Customer
growth had a negligible positive impact as 2,000 net new customers were
added during the last twelve months.
Operating
expenses for the quarter increased $1.1 million, or one percent, compared
to the first quarter of 2008 primarily due to higher depreciation expense,
partially offset by labor efficiencies associated with cost containment
efforts. Other income (expense) was virtually unchanged between
quarters as the cash surrender value of COLI polices decreased by
$1.6 million in the first quarter of 2009 compared to a reduction of
$2.1 million in the prior-year quarter. Net financing costs
decreased $3.2 million due principally to a reduction in outstanding debt,
including the redemption of $75 million of debt in December 2008, and
lower interest rates on variable-rate debt.
Twelve
Months to Date
Operating
margin decreased a net $2 million between periods. Rate relief
and rate changes provided $25 million of operating margin, consisting of
$11 million in Arizona, $2 million of rate relief in California and
nearly $12 million related to the return to a seasonal margin methodology
in California. Modest customer growth contributed
$4 million. Differences in heating demand caused primarily by
weather variations between periods resulted in a $21 million operating
margin decrease as warmer-than-normal temperatures were experienced during both
periods (during the twelve-month period of 2009, operating margin was negatively
impacted by $28 million, while the
-more-
negative
impact in the twelve-month period of 2008 was
$7 million). Energy efficiency and conservation resulting from
current economic conditions negatively impacted operating margin by
$10 million.
Operating
expenses increased $14.5 million, or three percent, between periods due to
incremental operating costs (primarily depreciation) associated with facilities
upgrades and general cost increases. The increase was mitigated by
labor efficiencies primarily resulting from the conversion to electronic meter
reading.
Other
income, which principally includes interest income, returns on COLI policies,
and non-utility expenses, decreased $15.7 million between
periods. This was primarily due to a $10.6 million decline in
the cash surrender value of COLI policies between periods and lower interest
income due to the recovery of deferred purchased gas cost
receivables. Net financing costs decreased $6.7 million, or
seven percent, due to a reduction in outstanding debt and lower interest rates
on variable-rate debt.
Southwest
Gas Corporation provides natural gas service to 1,821,000 customers in Arizona,
Nevada, and California.
This
press release may contain statements which constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995 (Reform Act). All such forward-looking statements are
intended to be subject to the safe harbor protection provided by the Reform
Act. A number of important factors affecting the business and
financial results of the Company could cause actual results to differ materially
from those stated in the forward-looking statements. These factors
include, but are not limited to, the impact of weather variations on customer
usage, customer growth rates, conditions in the housing market, the effects of
regulation/deregulation, the timing and amount of rate relief, changes in rate
design, and the impacts of stock market volatility.
-more-
SOUTHWEST
GAS CONSOLIDATED EARNINGS DIGEST
(In
thousands, except per share amounts)
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QUARTER
ENDED MARCH 31,
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2009
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2008
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||||||
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Consolidated
Operating Revenues
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$ | 689,862 | $ | 813,607 | ||||
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Net
Income
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$ | 49,981 | $ | 49,152 | ||||
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Average
Number of Common Shares Outstanding
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44,424 | 43,012 | ||||||
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Basic
Earnings Per Share
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$ | 1.13 | $ | 1.14 | ||||
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Diluted
Earnings Per Share
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$ | 1.12 | $ | 1.14 | ||||
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TWELVE
MONTHS ENDED MARCH 31,
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2009
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2008
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Consolidated
Operating Revenues
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$ | 2,020,998 | $ | 2,171,979 | ||||
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Net
Income
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$ | 61,802 | $ | 82,634 | ||||
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Average
Number of Common Shares Outstanding
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43,825 | 42,592 | ||||||
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Basic
Earnings Per Share
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$ | 1.41 | $ | 1.94 | ||||
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Diluted
Earnings Per Share
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$ | 1.40 | $ | 1.92 | ||||
-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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2009
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2008
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2009
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2008
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Results
of Consolidated Operations
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Contribution
to net income - gas operations
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$ | 49,852 | $ | 49,333 | $ | 54,266 | $ | 73,199 | ||||||||
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Contribution
to net income - construction services
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129 | (181 | ) | 7,536 | 9,435 | |||||||||||
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Net
income
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$ | 49,981 | $ | 49,152 | $ | 61,802 | $ | 82,634 | ||||||||
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Basic
earnings per share
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$ | 1.13 | $ | 1.14 | $ | 1.41 | $ | 1.94 | ||||||||
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Diluted
earnings per share
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$ | 1.12 | $ | 1.14 | $ | 1.40 | $ | 1.92 | ||||||||
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Average
outstanding common shares
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44,424 | 43,012 | 43,825 | 42,592 | ||||||||||||
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Average
shares outstanding (assuming dilution)
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44,680 | 43,290 | 44,118 | 42,940 | ||||||||||||
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Results
of Natural Gas Operations
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Gas
operating revenues
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$ | 635,106 | $ | 741,300 | $ | 1,685,201 | $ | 1,829,051 | ||||||||
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Net
cost of gas sold
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395,810 | 500,699 | 951,088 | 1,092,682 | ||||||||||||
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Operating
margin
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239,296 | 240,601 | 734,113 | 736,369 | ||||||||||||
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Operations
and maintenance expense
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84,662 | 85,206 | 338,116 | 331,879 | ||||||||||||
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Depreciation
and amortization
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42,339 | 40,645 | 168,031 | 159,205 | ||||||||||||
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Taxes
other than income taxes
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10,111 | 10,194 | 36,697 | 37,280 | ||||||||||||
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Operating
income
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102,184 | 104,556 | 191,269 | 208,005 | ||||||||||||
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Other
income (expense)
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(1,786 | ) | (1,526 | ) | (13,729 | ) | 1,948 | |||||||||
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Net
interest deductions
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18,182 | 21,352 | 79,926 | 86,640 | ||||||||||||
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Net
interest deductions on subordinated debentures
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1,933 | 1,932 | 7,730 | 7,728 | ||||||||||||
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Income
before income taxes
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80,283 | 79,746 | 89,884 | 115,585 | ||||||||||||
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Income
tax expense
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30,431 | 30,413 | 35,618 | 42,386 | ||||||||||||
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Contribution
to net income - gas operations
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$ | 49,852 | $ | 49,333 | $ | 54,266 | $ | 73,199 | ||||||||
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SOUTHWEST
GAS CORPORATION
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SELECTED
STATISTICAL DATA
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MARCH
31, 2009
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FINANCIAL
STATISTICS
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Market
value to book value per share at quarter end
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86 | % | ||||||||||||||
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Twelve
months to date return on equity -- total
company
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6.0 | % | ||||||||||||||
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-- gas segment
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5.6 | % | ||||||||||||||
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Common
stock dividend yield at quarter end
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4.5 | % | ||||||||||||||
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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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574,285 | 7.79 | 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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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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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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2009
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2008
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2009
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2008
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Residential
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31,971,846 | 37,718,128 | 64,752,340 | 71,357,953 | ||||||||||||
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Small
commercial
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11,158,027 | 12,745,923 | 29,867,581 | 31,559,927 | ||||||||||||
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Large
commercial
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3,798,409 | 4,148,658 | 12,161,895 | 12,831,661 | ||||||||||||
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Industrial
/ Other
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2,304,803 | 2,908,310 | 9,166,640 | 9,983,129 | ||||||||||||
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Transportation
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26,921,730 | 26,653,871 | 116,686,840 | 112,855,112 | ||||||||||||
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Total
system throughput
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76,154,815 | 84,174,890 | 232,635,296 | 238,587,782 | ||||||||||||
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HEATING
DEGREE DAY COMPARISON
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||||||||||||||||
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Actual
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1,019 | 1,209 | 1,712 | 1,903 | ||||||||||||
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Ten-year
average
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1,092 | 1,095 | 1,890 | 1,926 | ||||||||||||
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Heating
degree days for prior periods have been recalculated using the current
period customer mix.
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