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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) November 4, 1997
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 November 4, 1997, 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, 1997. 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 1997
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: November 4, 1997 /s/ EDWARD A. JANOV
--------------------------
Edward A. Janov
Vice President/Controller and
Chief Accounting Officer
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EXHIBIT INDEX
Exhibit
Number Description
------- ----------------------------------------------
99 Financial Analyst Report -- Third Quarter 1997<PAGE>
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<TABLE> SOUTHWEST GAS CORPORATION
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
-------------------- -------------------- --------------------
1997 1996 1997 1996 1997 1996
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Gas operating revenues $ 95,009 $ 85,534 $414,313 $376,599 $584,075 $522,958
Net cost of gas sold 28,508 24,027 149,830 139,184 198,226 182,001
-------- -------- -------- -------- -------- --------
Operating margin 66,501 61,507 264,483 237,415 385,849 340,957
Operations and maintenance expenses 50,310 49,086 148,165 144,557 201,972 192,239
Depreciation, amortization, and general taxes 26,244 24,377 77,670 72,231 101,038 94,420
-------- -------- -------- -------- -------- --------
Operating income (loss) (10,053) (11,956) 38,648 20,627 82,839 54,298
Net interest deductions 15,736 13,320 45,192 39,328 58,867 53,025
Preferred securities distribution 1,368 1,368 4,106 4,106 5,475 5,019
-------- -------- -------- -------- -------- --------
Pretax utility income (loss) (27,157) (26,644) (10,650) (22,807) 18,497 (3,746)
Utility income tax expense (benefit) (10,421) (10,445) (4,093) (9,321) 7,225 (2,012)
-------- -------- -------- -------- -------- --------
Net utility income (loss) (16,736) (16,199) (6,557) (13,486) 11,272 (1,734)
Other income (expense), net (35) (57) (425) (300) (549) (543)
-------- -------- -------- -------- -------- --------
Contribution to net income (loss) - gas operations (16,771) (16,256) (6,982) (13,786) 10,723 (2,277)
Contribution to net income (loss) - construction services 1,085 1,618 116 2,064 707 2,064
Discontinued operations - PriMerit Bank -- -- -- -- -- (18,864)
-------- -------- -------- -------- -------- --------
Net income (loss) (15,686) (14,638) (6,866) (11,722) 11,430 (19,077)
Preferred dividends -- -- -- -- -- 22
-------- -------- -------- -------- -------- --------
Net income (loss) applicable to common stock $(15,686) $(14,638) $ (6,866) $(11,722) $ 11,430 $(19,099)
======== ======== ======== ======== ======== ========
Earnings (loss) per share - gas operations $ (0.62) $ (0.61) $ (0.26) $ (0.54) $ 0.40 $ (0.09)
Earnings per share - construction services 0.04 0.06 0.01 0.08 0.02 0.08
Loss per share - discontinued operations -- -- -- -- -- (0.74)
-------- -------- -------- -------- -------- --------
Earnings (loss) per share of common stock $ (0.58) $ (0.55) $ (0.25) $ (0.46) $ 0.42 $ (0.75)
======== ======== ======== ======== ======== ========
Average outstanding common shares 27,149 26,477 26,990 25,636 26,902 25,382
======== ======== ======== ======== ======== ========
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>
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<TABLE>
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ -------------------------
1997 1996 1997 1996
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gas operating revenues $ 414,313 $ 376,599 $ 584,075 $ 522,958
Net cost of gas sold 149,830 139,184 198,226 182,001
- -----------------------------------------------------------------------------------------------------------------------------
Operating margin 264,483 237,415 385,849 340,957
Operations and maintenance expenses 148,165 144,557 201,972 192,239
Depreciation, amortization, and general taxes 77,670 72,231 101,038 94,420
- -----------------------------------------------------------------------------------------------------------------------------
Operating income 38,648 20,627 82,839 54,298
Net interest deductions 45,192 39,328 58,867 53,025
Preferred securities distribution 4,106 4,106 5,475 5,019
- -----------------------------------------------------------------------------------------------------------------------------
Pretax utility income (loss) (10,650) (22,807) 18,497 (3,746)
Utility income tax expense (benefit) (4,093) (9,321) 7,225 (2,012)
- -----------------------------------------------------------------------------------------------------------------------------
Net utility income (loss) (6,557) (13,486) 11,272 (1,734)
Other income (expense), net (425) (300) (549) (543)
- -----------------------------------------------------------------------------------------------------------------------------
Contribution to net income (loss) - gas operations (6,982) (13,786) 10,723 (2,277)
Contribution to net income (loss) - construction services 116 2,064 707 2,064
Discontinued operations - PriMerit Bank - NOTE 2 -- -- -- (18,864)
- -----------------------------------------------------------------------------------------------------------------------------
Net income (loss) (6,866) (11,722) 11,430 (19,077)
Preferred dividends -- -- -- 22
- -----------------------------------------------------------------------------------------------------------------------------
Net income (loss) applicable to common stock $ (6,866) $ (11,722) $ 11,430 $ (19,099)
=============================================================================================================================
Earnings (loss) per share - gas operations $ (0.26) $ (0.54) $ 0.40 $ (0.09)
Earnings per share - construction services 0.01 0.08 0.02 0.08
Loss per share - discontinued operations -- -- -- (0.74)
- -----------------------------------------------------------------------------------------------------------------------------
Earnings (loss) per share of common stock $ (0.25) $ (0.46) $ 0.42 $ (0.75)
=============================================================================================================================
Average outstanding common shares 26,990 25,636 26,902 25,382
==============================================================================================================================
See Notes to Summary Financial Statements.
/TABLE
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<TABLE>
<CAPTION>
SOUTHWEST GAS CORPORATION
SUMMARY BALANCE SHEET
AT SEPTEMBER 30, 1997
(In thousands)
(Unaudited)
<S> <C> <C>
ASSETS
UTILITY PLANT
Gas plant, net of accumulated depreciation $ 1,304,422
Construction work in progress 34,686
------------
Net utility plant 1,339,108
------------
OTHER PROPERTY AND INVESTMENTS
Investment in construction services subsidiary 27,511
Other 46,228
------------
Total other property and investments 73,739
------------
CURRENT AND ACCRUED ASSETS
Cash, working funds and temporary cash investments 11,055
Receivables - less reserve of $1,265 for uncollectibles 21,893
Accrued utility revenue 21,725
Deferred purchased gas costs 64,805
Other 40,083
------------
Total current and accrued assets 159,561
------------
DEFERRED DEBITS
Unamortized debt expense 19,147
Other deferred debits 29,634
------------
Total deferred debits 48,781
------------
TOTAL ASSETS $ 1,621,189
============
CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS
CAPITALIZATION
Common stockholders' equity
Common stock equity, $1 par, 27,223 shares outstanding $ 386,257
Retained earnings (accumulated deficit) (21,429)
------------
Total common stockholders' equity 364,828 30.5%
Preferred securities of Southwest Gas Capital I, 9.125% 60,000 5.0
Long-term debt - NOTE 3 770,592 64.5
------------ --------
Total capitalization 1,195,420 100.0%
------------ ========
CURRENT AND ACCRUED LIABILITIES
Notes payable 108,000
Accounts payable 28,824
Customer deposits 21,536
Other 66,654
------------
Total current and accrued liabilities 225,014
------------
DEFERRED CREDITS
Deferred investment tax credits 18,355
Deferred income taxes 136,249
Other 46,151
------------
Total deferred credits 200,755
------------
TOTAL CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS $ 1,621,189
============
See Notes to Summary Financial Statements.
/TABLE
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SOUTHWEST GAS CORPORATION
SUMMARY STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(In thousands)
(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net income (loss) $ (6,866)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 55,188
Change in receivables and payables 35,072
Change in gas cost related balancing items (66,369)
Change in accrued taxes (20,563)
Change in deferred taxes 28,669
Allowance for funds used during construction (1,292)
Other 7,017
----------
Net cash provided by operating activities 30,856
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (115,523)
Other (7,890)
----------
Net cash used in investing activities (123,413)
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock issuances 8,762
Dividends paid (16,583)
Change in notes payable (13,000)
Long-term debt issuances, net 118,992
----------
Net cash provided by financing activities 98,171
----------
Change in cash and temporary cash investments 5,614
Cash at beginning of period 5,441
----------
Cash at end of period $ 11,055
===========
SUPPLEMENTAL INFORMATION:
Interest paid, net of amounts capitalized $ 43,012
Income taxes, net of refunds $ (2,762)
See Notes to Summary Financial Statements.
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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 - DISCONTINUED OPERATIONS:
In January 1996, the Company reached an agreement to sell PriMerit Bank
(PriMerit) to Norwest Corporation. Discontinued operations includes the net
income of PriMerit and its subsidiaries on a stand-alone basis as adjusted,
reduced by allocated carrying costs associated with the Company's investment
in PriMerit (principally interest) net of taxes. Discontinued operations also
includes the loss on the disposition. The sale of PriMerit to Norwest was
completed in July 1996.
NOTE 3 - LONG-TERM DEBT:
Term loan facility $ 200,000
Debentures:
Debentures, 9.75% series F, due 2002 100,000
Debentures, 7 1/2% series, due 2006 75,000
Debentures, 8% series, due 2026 75,000
Medium-term notes:
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 - net of funds held in trust 227,830
Unamortized discount on long-term debt (7,238)
---------
TOTAL LONG-TERM DEBT $ 770,592
=========
ESTIMATED CURRENT MATURITIES $ --
=========
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<TABLE>
SOUTHWEST GAS CORPORATION
SELECTED STATISTICAL DATA
SEPTEMBER 30, 1997
FINANCIAL STATISTICS
Market value to book value per share at quarter end 146%
Twelve months to date return on equity -- total company 3.0%
-- gas segment 3.1%
Common stock dividend yield at quarter end 4.2%
GAS OPERATIONS SEGMENT
<CAPTION> Authorized
Authorized Authorized Return on
Rate Base Rate of Common
Rate Jurisdiction (In thousands) Return Equity
- ----------------------- -------------- ---------- ------------
<S> <C> <C> <C> <C>
Arizona $ 541,104 9.38% 11.25%
Southern Nevada 237,165 9.50 11.55
Northern Nevada 63,986 9.67 11.55
Southern California 69,486 9.94 11.35
Northern California 9,521 10.02 11.35
Paiute Pipeline Company 61,057 10.09 12.50
SYSTEM THROUGHPUT BY CUSTOMER CLASS NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------ ------------------------------
(In dekatherms) 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------------
Residential 37,427,296 32,797,699 49,848,278 41,718,026
Small commercial 18,289,465 17,470,268 24,485,468 22,920,354
Large commercial 5,951,794 5,890,686 7,638,423 7,603,142
Industrial / Other 5,967,696 4,046,550 7,291,800 5,604,019
Transportation 80,285,401 74,153,452 102,952,681 97,187,490
- ---------------------------------------------------------------------------------------------------------------------------------
Total system throughput 147,921,652 134,358,655 192,216,650 175,033,031
=================================================================================================================================
HEATING DEGREE DAY COMPARISON
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Actual 1,445 1,282 2,062 1,682
Ten-year average 1,433 1,438 2,022 2,046
=================================================================================================================================
</TABLE)<PAGE>
</TABLE>
