<PAGE>
===============================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 1997
Commission File Number 1-7850
SOUTHWEST GAS CORPORATION
(Exact name of registrant as specified in its charter)
California 88-0085720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Common Stock, $1 Par Value, 27,274,352 shares as of November 4, 1997
===============================================================================
1<PAGE>
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SOUTHWEST GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars, except par value)
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -------------
ASSETS (Unaudited)
<S> <C> <C>
Utility plant
Gas plant $ 1,845,875 $ 1,732,405
Less: accumulated depreciation (545,807) (505,984)
Acquisition adjustments 4,354 5,866
Construction work in progress 34,686 46,170
------------- -------------
Net utility plant 1,339,108 1,278,457
------------- -------------
Other property and investments 70,764 71,245
------------- -------------
Current assets
Cash and cash equivalents 12,910 8,280
Accounts receivable, net of allowances 45,801 69,000
Accrued utility revenue 21,725 46,500
Income tax benefit 35,557 --
Deferred tax benefit -- 8,009
Deferred purchased gas costs 64,805 --
Prepaids and other current assets 34,119 28,029
------------- -------------
Total current assets 214,917 159,818
------------- -------------
Deferred charges and other assets 54,299 50,749
------------- -------------
Total assets $ 1,679,088 $ 1,560,269
============= =============
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock, $1 par (authorized - 45,000,000 shares; issued
and outstanding - 27,222,856 and 26,732,688 shares) $ 28,853 $ 28,363
Additional paid-in capital 357,404 349,132
Retained earnings (accumulated deficit) (21,429) 2,121
------------- -------------
Total common equity 364,828 379,616
Redeemable preferred securities of Southwest Gas Capital I 60,000 60,000
Long-term debt, less current maturities 778,942 665,221
------------- -------------
Total capitalization 1,203,770 1,104,837
------------- -------------
Current liabilities
Current maturities of long-term debt 6,123 6,675
Short-term debt 109,000 121,000
Accounts payable 33,432 49,951
Customer deposits 21,536 21,133
Accrued taxes 25,720 9,977
Accrued interest 11,110 9,800
Deferred taxes 15,071 --
Deferred purchased gas costs -- 9,432
Other current liabilities 48,486 33,369
------------- -------------
Total current liabilities 270,478 261,337
------------- -------------
Deferred income taxes and other credits
Deferred income taxes and investment tax credits 157,967 152,063
------------- -------------
Other deferred credits 46,873 42,032
------------- -------------
Total deferred income taxes and other credits 204,840 194,095
------------- -------------
Total capitalization and liabilities $ 1,679,088 $ 1,560,269
============= =============
The accompanying notes are an integral part of these statements.
</TABLE>
2<PAGE>
<PAGE>
<TABLE>
SOUTHWEST GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED 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>
Operating revenues:
Gas operating revenues $ 95,009 $ 85,534 $ 414,313 $ 376,599 $ 584,075 $ 522,958
Construction revenues 33,689 39,721 86,554 60,619 123,635 60,619
---------- ---------- ---------- ---------- ---------- ----------
Total operating revenues 128,698 125,255 500,867 437,218 707,710 583,577
---------- ---------- ---------- ---------- ---------- ----------
Operating expenses:
Net cost of gas sold 28,508 24,027 149,830 139,184 198,226 182,001
Operations and maintenance 50,310 49,086 148,165 144,557 201,972 192,239
Depreciation and amortization 21,636 19,455 62,563 54,046 82,216 69,334
Taxes other than income taxes 7,371 7,365 22,482 22,228 28,410 29,129
Construction expenses 28,121 33,726 77,542 51,815 110,416 51,815
---------- ---------- ---------- ---------- ---------- ----------
Total operating expenses 135,946 133,659 460,582 411,830 621,240 524,518
---------- ---------- ---------- ---------- ---------- ----------
Operating income (loss) (7,248) (8,404) 40,285 25,388 86,470 59,059
---------- ---------- ---------- ---------- ---------- ----------
Other income and (expenses):
Net interest deductions (16,115) (14,016) (46,362) (40,445) (60,830) (54,143)
Preferred securities distributions (1,368) (1,368) (4,106) (4,106) (5,475) (5,019)
Other income (deductions), net (467) (11) (609) (214) (1,132) (681)
---------- ---------- ---------- ---------- ---------- ----------
Total other income and (expenses) (17,950) (15,395) (51,077) (44,765) (67,437) (59,843)
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations before income taxes (25,198) (23,799) (10,792) (19,377) 19,033 (784)
Income tax expense (benefit) (9,512) (9,161) (3,926) (7,655) 7,603 (571)
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations (15,686) (14,638) (6,866) (11,722) 11,430 (213)
Net loss from discontinued operations -- -- -- -- -- (18,864)
---------- ---------- ---------- ---------- ---------- ----------
Net income (loss) (15,686) (14,638) (6,866) (11,722) 11,430 (19,077)
Preferred stock dividend requirements -- -- -- -- -- 22
---------- ---------- ---------- ---------- ---------- ----------
Net income (loss) applicable to common stock $ (15,686) $ (14,638) $ (6,866) $ (11,722) $ 11,430 $ (19,099)
========== ========== ========== ========== ========== ==========
Earnings (loss) per share from continuing operations $ (0.58) $ (0.55) $ (0.25) $ (0.46) $ 0.42 $ (0.01)
Loss per share from discontinued operations -- -- -- -- -- (0.74)
---------- ---------- ---------- ---------- ---------- ----------
Earnings (loss) per share of common stock $ (0.58) $ (0.55) $ (0.25) $ (0.46) $ 0.42 $ (0.75)
========== ========== ========== ========== ========== ==========
Dividends paid per share of common stock $ 0.205 $ 0.205 $ 0.615 $ 0.615 $ 0.82 $ 0.82
========== ========== ========== ========== ========== ==========
Average number of common shares outstanding 27,149 26,477 26,990 25,636 26,902 25,382
========== ========== ========== ========== ========== ==========
The accompanying notes are an integral part of these statements.
</TABLE>
3<PAGE>
<PAGE>
<TABLE>
SOUTHWEST GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of dollars)
(Unaudited)
<CAPTION>
NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ---------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss) $ (6,866) $ (11,722) $ 11,430 $ (19,077)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 62,563 54,046 82,216 69,334
Deferred income taxes 28,984 1,282 45,155 2,807
Changes in current assets and liabilities:
Accounts receivable, net of allowances 23,199 8,453 (3,140) (9,917)
Accrued utility revenue 24,775 23,613 (1,438) (1,243)
Deferred purchased gas costs (74,237) 6,776 (104,357) 3,800
Accounts payable (16,519) (15,986) 4,431 5,122
Accrued taxes (19,814) (7,653) (31,300) (10,025)
Other current assets and liabilities 13,742 480 15,760 1,148
Other 530 911 9,595 (1,049)
Undistributed loss from
discontinued operations -- -- -- 17,371
----------- ----------- ----------- -----------
Net cash provided by operating activities 36,357 60,200 28,352 58,271
----------- ----------- ----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES:
Construction expenditures and property additions (120,449) (141,948) (197,336) (191,517)
Proceeds from bank sale -- 191,662 -- 191,662
Other (4,974) (29,163) 2,077 (24,828)
----------- ----------- ----------- -----------
Net cash provided by (used in) investing activities (125,423) 20,551 (195,259) (24,683)
----------- ----------- ----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES:
Issuance of common stock 8,762 14,365 12,507 18,625
Issuance of trust originated preferred securities, net -- -- -- 57,713
Reacquisition of preferred stock -- -- -- (4,000)
Dividends paid (16,583) (15,852) (22,042) (20,960)
Issuance of long-term debt, net 118,992 159,486 124,382 176,786
Retirement of long-term debt, net (5,475) (247,020) (6,986) (247,025)
Issuance (repayment) of short-term debt (12,000) 1,483 67,575 (17,517)
Other -- -- -- (48)
----------- ----------- ----------- -----------
Net cash provided by (used in) financing activities 93,696 (87,538) 175,436 (36,426)
----------- ----------- ----------- -----------
Change in cash and temporary cash investments 4,630 (6,787) 8,529 (2,838)
Cash at beginning of period 8,280 11,168 4,381 7,219
----------- ----------- ----------- -----------
Cash at end of period $ 12,910 $ 4,381 $ 12,910 $ 4,381
=========== =========== =========== ===========
Supplemental information:
Interest paid, net of amounts capitalized $ 44,126 $ 47,718 $ 56,416 $ 61,720
=========== =========== =========== ===========
Income taxes, net of refunds $ (2,694) $ 18,610 $ (2,623) $ 12,880
=========== =========== =========== ===========
The accompanying notes are an integral part of these statements.
</END TABLE>
4<PAGE>
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS. Southwest Gas Corporation (the Company) is
comprised of two segments: Natural gas operations (Southwest or the natural
gas operations segment) and construction services. Southwest purchases,
transports, and distributes natural gas to customers in portions of Arizona,
Nevada, and California. Natural gas sales are seasonal, peaking during the
winter months. Variability in weather from normal temperatures can materially
impact results of operations. Northern Pipeline Construction Co. (Northern or
the construction services segment), a wholly owned subsidiary, is a full-
service underground piping contractor which provides utility companies with
trenching and installation, replacement, and maintenance services for energy
distribution systems.
DISCONTINUED OPERATIONS. In July 1996, the Company completed the sale of
the assets and liabilities of PriMerit Bank (the Bank) to Norwest Corporation.
The results of operations of the Bank are shown as discontinued operations in
the accompanying financial statements.
BASIS OF PRESENTATION. The consolidated financial statements included
herein have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The preparation
of the consolidated financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates. In the
opinion of management, all adjustments, consisting of normal recurring items
and estimates necessary for a fair presentation of the results for the interim
periods, have been made. It is suggested that these consolidated financial
statements be read in conjunction with the financial statements and the notes
thereto included in the Company's 1996 Annual Report to Shareholders, which is
incorporated by reference into the Form 10-K, and 1997 quarterly reports on
Form 10-Q.
INTERCOMPANY TRANSACTIONS. During the nine months ended September 30,
1997, the construction services segment recognized $26 million of revenues
generated from contracts with Southwest. At September 30, 1997, accounts
receivable for these services was $3.1 million. The accounts receivable
balance, revenues, and associated profits are included in the consolidated
financial statements of the Company and were not eliminated during
consolidation. Statement of Financial Accounting Standards (SFAS) No. 71,
"Accounting for the Effects of Certain Types of Regulation," provides that
intercompany profits on sales to regulated affiliates should not be eliminated
in consolidation if the sales price is reasonable and if future revenues
approximately equal to the sales price will result from the rate-making process.
Management believes these two criteria are being met.
5<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company is principally engaged in the business of purchasing,
transporting, and distributing natural gas. Southwest is the largest
distributor in Arizona, selling and transporting natural gas in most of
southern, central, and northwestern Arizona, including the Phoenix and Tucson
metropolitan areas. Southwest is also the largest distributor and transporter
of natural gas in Nevada, and serves the Las Vegas metropolitan area and
northern Nevada. In addition, Southwest distributes and transports natural
gas in portions of California, including the Lake Tahoe area in northern
California and high desert and mountain areas in San Bernardino County.
Southwest purchases, transports, and distributes natural gas to approximately
1,124,000 residential, commercial, industrial and other customers, of which
58 percent are located in Arizona, 32 percent are in Nevada, and 10 percent
are in California. During the twelve months ended September 30, 1997,
Southwest earned 55 percent of operating margin in Arizona, 35 percent in
Nevada, and 10 percent in California. During this same period, Southwest
earned 62 percent of operating margin from residential customers, 23 percent
from commercial customers, and 15 percent from industrial and other customers.
These patterns are consistent with prior years and are expected to continue.
Northern is a full-service underground piping contractor which provides
utility companies with trenching and installation, replacement, and
maintenance services for energy distribution systems.
CAPITAL RESOURCES AND LIQUIDITY
The capital requirements and resources of the Company generally are determined
independently for the natural gas operations and construction services
segments. Each business activity is generally responsible for securing its
own financing sources. The capital requirements and resources of the
construction services segment are not material to the overall capital
requirements and resources of the Company.
Southwest continues to experience significant population growth throughout its
service territories. This growth has required large amounts of capital to
finance the investment in infrastructure, in the form of new transmission and
distribution plant, to satisfy consumer demand. Southwest estimates
construction expenditures during the three-year period ending
December 31, 1999 will be approximately $468 million. During the three-year
period, cash flow from operating activities (net of dividends) is estimated to
fund approximately one-half of the gas operations total construction
expenditures. A portion of the construction expenditure funding will be
provided by $30 million of funds held in trust, at December 31, 1996, from the
issuance of industrial development revenue bonds (IDRB). The remaining cash
requirements are expected to be provided by external financing sources. The
timing, types, and amounts of these additional external financings will be
dependent on a number of factors, including conditions in the capital markets,
timing and amounts of rate relief, and growth levels in Southwest service
areas. These external financings may include the issuance of both debt and
equity securities, bank and other short-term borrowings, and other forms of
financing. Due to the significant size of the current construction program,
differences between estimated and actual results are expected to occur.
Actual events, and the timing of those events, frequently do not occur as
expected, and can impact, favorably or unfavorably, anticipated cash flows.
For the twelve months ended September 30, 1997, natural gas construction
expenditures totaled $184 million. Approximately 78 percent of these
expenditures represents new construction and the balance represents costs
associated with routine replacement of existing transmission, distribution and
general plant. Financing for recent construction expenditures and for other
corporate purposes was provided primarily by the issuances of medium-term
notes in January, February, June and September 1997 totaling $100 million and
a $16 million issuance of commercial paper in February 1997.
6<PAGE>
<PAGE>
Cash flows from operating activities during the nine and twelve months ended
September 30, 1997 were negatively affected by increases in the cost of gas
during the fourth quarter of 1996 and first quarter of 1997. Higher gas costs
coupled with refunds to customers of previously overcollected amounts shifted
the deferred purchased gas cost balance from a $39.6 million payable, at
September 30, 1996, to a $64.8 million receivable, at September 30, 1997, a
$104 million change. Southwest must first obtain regulatory approval before
changing the rates it charges for recovery of gas costs.
The increase in the cost of gas resulted from several factors including
reduced natural gas storage supplies nationwide following colder-than-normal
temperatures in the East and Midwest during the winter heating season of
1995/1996. Domestic storage supplies were not fully replenished during the
summer months of 1996 because natural gas prices did not fall as much as
expected, and companies were shifting to "just-in-time" delivery practices in
lieu of storage. Reduced availability coupled with increased weather-related
demand for supplies during the winter heating season of 1996/1997 were the
primary reasons for the increased cost of natural gas. These increases not
only impacted Southwest, but local gas distribution companies throughout the
country.
Southwest intends to file for recovery of the accumulated balances in all
applicable rate jurisdictions. In January 1997, Southwest submitted a
purchased gas cost adjustment (PGA) filing with the Public Utilities
Commission of Nevada (PUCN). In April 1997, the filing was amended. In
September 1997, annual increases of $10.1 million, or 9 percent, in the
southern Nevada rate jurisdiction and $6 million, or 14 percent, in the
northern Nevada rate jurisdiction were granted effective September 1997. In
approving the increase, the PUCN indicated the PGA mechanism may need to be
replaced with one that includes a price incentive mechanism. The Company had
recommended during the hearing process that the PUCN adopt such a mechanism.
In June 1997, Southwest submitted an additional PGA filing with the PUCN.
This annual PGA filing addressed the increased costs of natural gas since the
beginning of 1997 as well as the recovery of costs previously deferred. In
September 1997, the filing was amended to reflect changes necessary as a
result of the September 1997 order on the previous PGA filing. If approved as
amended, the filing would result in annual increases, above the revenue levels
approved in the previous PGA order, of $23.1 million, or 18 percent, in the
southern Nevada rate jurisdiction and $8.4 million, or 17 percent, in the
northern Nevada rate jurisdiction. Hearings on this filing commenced in
October 1997 and are ongoing. A final decision is expected from the PUCN
prior to year-end.
In September 1997, Southwest submitted a PGA filing with the California Public
Utilities Commission (CPUC) to increase rates annually by $10 million, or 19
percent, in the southern California rate jurisdiction. The rates are expected
to become effective by December 1997.
7<PAGE>
<PAGE>
RESULTS OF CONSOLIDATED OPERATIONS
Quarterly Analysis
- ------------------
Contribution to Net Loss
Three Months Ended September 30,
--------------------------------
(Thousands of dollars)
1997 1996
---------- ----------
Natural gas operations $ (16,771) $ (16,256)
Construction services 1,085 1,618
---------- ----------
Net loss $ (15,686) $ (14,638)
========== ==========
Loss per share for the quarter ended September 30, 1997 was $0.58, compared to
a $0.55 loss per share recorded during the corresponding quarter of the prior
year. Natural gas operations results declined $0.01 per share. See separate
discussion at RESULTS OF NATURAL GAS OPERATIONS for changes as they relate to
gas operations. Construction services results declined $0.02 per share from
the previous period primarily resulting from lower-than-anticipated revenues.
Revenues declined 15 percent due to project cancellations and curtailments in
portions of California, Washington, Missouri, and Kansas. Northern has
reorganized and closed offices in some of these areas and is pursuing new
contracts in other areas to improve profitability. Average shares
outstanding increased 672,000 shares between years primarily resulting from
continuing issuances under the Company Dividend Reinvestment and Stock
Purchase Plan.
Nine-Month Analysis
- -------------------
Contribution to Net Loss
Nine Months Ended September 30,
-------------------------------
(Thousands of dollars)
1997 1996
---------- ----------
Natural gas operations $ (6,982) $ (13,786)
Construction services 116 2,064
---------- ----------
Net loss $ (6,866) $ (11,722)
========== ==========
Loss per share for the nine months ended September 30, 1997 was $0.25, a $0.21
improvement from a per share loss of $0.46 recorded during the corresponding
nine months of the previous year. Loss from natural gas operations improved
$0.28 per share. See separate discussion at RESULTS OF NATURAL GAS OPERATIONS
for changes as they relate to gas operations. Construction services earnings
per share were $0.01 during the current period. In the prior period,
construction services contributed $0.08 per share, however, those results
excluded the months of January through April 1996 which are typically loss
months. In addition, the decline was a result of various project
cancellations and curtailments. To improve profitability, Northern is
pursuing new contracts and has reorganized and closed some offices. Average
shares outstanding increased 1.4 million shares between years primarily due to
a 1.4 million share issuance in April 1996 to acquire Northern and issuances
under the Company Dividend Reinvestment and Stock Purchase Plan.
8<PAGE>
<PAGE>
Twelve-Month Analysis
- ---------------------
Contribution to Net Income (Loss)
Twelve Months Ended September 30,
---------------------------------
(Thousands of dollars)
1997 1996
---------- ----------
Continuing operations
Natural gas operations $ 10,723 $ (2,277)
Construction services 707 2,064
---------- ----------
11,430 (213)
Discontinued operations--financial services -- (18,864)
---------- ----------
Net income (loss) $ 11,430 $ (19,077)
========== ==========
Earnings per share for the twelve months ended September 30, 1997 were $0.42,
a $0.43 increase from the $0.01 per share loss from continuing operations
recorded during the prior twelve-month period. Earnings contributed from
natural gas operations increased $0.49 per share. See separate discussion at
RESULTS OF NATURAL GAS OPERATIONS for changes as they relate to gas
operations. Construction services results declined $0.06 per share from the
previous period. The decline was primarily the result of project
cancellations and curtailments. Northern has closed some offices and is
pursuing new contracts to improve profitability. Discontinued operations
posted a $0.74 per share loss during the prior year. Average shares
outstanding increased 1.5 million shares between periods primarily due to a
1.4 million share issuance in April 1996 to acquire Northern and issuances
under the Company Dividend Reinvestment and Stock Purchase Plan.
The following table sets forth the ratios of earnings to fixed charges for the
Company:
For the Twelve Months Ended
--------------------------------
September 30, December 31,
1997 1996
------------- ------------
Ratios of earnings to fixed charges 1.25 1.15
For the purposes of computing the ratios of earnings to fixed charges,
earnings are defined as the sum of pretax income from continuing operations
plus fixed charges. Fixed charges consist of all interest expense including
capitalized interest, one-third of rent expense (which approximates the
interest component of such expense), preferred securities distributions and
amortized debt costs.
9<PAGE>
<PAGE>
RESULTS OF NATURAL GAS OPERATIONS
Quarterly Analysis
- ------------------
Three Months Ended
September 30,
-------------------------
(Thousands of dollars)
1997 1996
---------- ----------
Gas operating revenues $ 95,009 $ 85,534
Net cost of gas sold 28,508 24,027
---------- ----------
Operating margin 66,501 61,507
Operations and maintenance expense 50,310 49,086
Depreciation and amortization 18,873 17,012
Taxes other than income taxes 7,371 7,365
---------- ----------
Operating loss (10,053) (11,956)
Other income (expense), net (2) (23)
---------- ----------
Loss before interest and income taxes (10,055) (11,979)
Net interest deductions 15,736 13,318
Preferred securities distributions 1,368 1,368
Income tax expense (benefit) (10,388) (10,409)
---------- ----------
Contribution to consolidated net loss $ (16,771) $ (16,256)
========== ==========
Contribution from natural gas operations declined $515,000 compared to the
third quarter of 1996. The decline was principally the result of higher
operating and financing expenses incurred as a result of the expansion and
upgrading of the gas system to accommodate continued customer growth,
partially offset by an improvement in margin.
Operating margin increased $5 million, or eight percent, in the third quarter
of 1997 when compared to the third quarter of 1996. The operating margin
improvement was primarily the result of customer growth and general rate
relief granted in Arizona jurisdictions effective September 1997. Southwest
added approximately 60,000 customers during the past twelve months, a six
percent increase.
Operations and maintenance expenses increased $1.2 million, or two percent,
reflecting general increases in labor, purchased goods and services.
Depreciation expense and general taxes increased $1.9 million, or eight
percent, as a result of construction activities. Average gas plant in service
increased $178 million, or 11 percent, as compared to the third quarter of
1996. The increase reflects ongoing capital expenditures for the upgrade of
existing operating facilities and the expansion of the system to accommodate
continued customer growth.
Financing costs increased $2.4 million, or 16 percent, over the prior period.
This increase is primarily attributed to higher short-term borrowings
outstanding during the current quarter and an increase in long-term debt
reflecting $100 million of medium-term note issuances during 1997. The
increase in short-term debt reflects the need for short-term financing to
cover higher gas costs experienced during the fourth quarter of 1996 and first
quarter of 1997.
10<PAGE>
<PAGE>
Nine-Month Analysis
- -------------------
Nine Months Ended
September 30,
-------------------------
(Thousands of dollars)
1997 1996
---------- ----------
Gas operating revenues $ 414,313 $ 376,599
Net cost of gas sold 149,830 139,184
---------- ----------
Operating margin 264,483 237,415
Operations and maintenance expense 148,165 144,557
Depreciation and amortization 55,188 50,003
Taxes other than income taxes 22,482 22,228
---------- ----------
Operating income 38,648 20,627
Other income (expense), net (650) (298)
---------- ----------
Income before interest and income taxes 37,998 20,329
Net interest deductions 45,192 39,324
Preferred securities distributions 4,106 4,106
Income tax expense (benefit) (4,318) (9,315)
---------- ----------
Contribution to consolidated net loss $ (6,982) $ (13,786)
========== ==========
Contribution to consolidated net loss improved $6.8 million compared to the
nine months ended September 1996. The improvement was the result of an
increase in operating margin, offset somewhat by higher operating and
financing expenses.
Operating margin increased $27.1 million, or 11 percent, during the nine
months ended September 1997 compared to the same period in 1996 due primarily
to continued customer growth throughout the Southwest service areas, general
rate relief granted in Nevada jurisdictions effective July 1996, and more
favorable weather conditions during the first quarter of 1997 relative to the
first quarter of 1996.
Operations and maintenance expenses increased $3.6 million, or two percent,
reflecting increases in labor and maintenance costs along with incremental
operating expenses associated with providing service to the growing Southwest
customer base.
Depreciation expense and general taxes increased $5.4 million, or eight
percent, resulting from an increase in average gas plant in service of $167
million, or ten percent. This increase reflects capital expenditures for the
upgrade of existing operating facilities and the expansion of the system to
accommodate new customers being added to the system.
Financing costs increased $5.9 million, or 14 percent, during the nine months
ended September 1997, over the comparative prior period. Average total debt
outstanding during the period increased due to the financing of construction
expenditures and working capital needs and included higher short-term debt,
the issuance of medium-term notes during 1997, and the drawdown of IDRB funds
held in trust.
11<PAGE>
<PAGE>
Twelve-Month Analysis
- ---------------------
Twelve Months Ended
September 30,
------------------------
(Thousands of dollars)
1997 1996
---------- ----------
Gas operating revenues $ 584,075 $ 522,958
Net cost of gas sold 198,226 182,001
---------- ----------
Operating margin 385,849 340,957
Operations and maintenance expense 201,972 192,239
Depreciation and amortization 72,628 65,291
Taxes other than income taxes 28,410 29,129
---------- ----------
Operating income 82,839 54,298
Other income (expense), net (1,112) (765)
---------- ----------
Income before interest and income taxes 81,727 53,533
Net interest deductions 58,871 53,022
Preferred securities distributions 5,475 5,019
Income tax expense (benefit) 6,658 (2,231)
---------- ----------
Contribution to consolidated net income (loss) $ 10,723 $ (2,277)
========== ==========
Contribution to consolidated net income increased $13 million compared
to the corresponding twelve-month period ended September 1996. The
increase was the result of an improvement in operating margin, offset
somewhat by higher operating and financing expenses.
Operating margin increased $44.9 million due to customer growth, rate
relief, and improved, but warmer-than-normal, weather conditions.
Southwest billed an average of 61,000 more customers per month than
during the previous twelve-month period which contributed approximately
$10 million of additional margin. General rate relief, primarily
related to Nevada jurisdictions, contributed $15 million incrementally
to operating margin. Weather-related variances between periods
resulted in a $20 million increase in operating margin from weather-
sensitive customers. On a weather-normalized basis, operating margin
would have been approximately $12 million greater than actually
reported for the twelve months ended September 30, 1997 and $32 million
higher in the previous period.
Operations and maintenance expenses increased $9.7 million, or five
percent, reflecting increases in labor and maintenance costs along with
incremental operating expenses associated with providing service to the
steadily growing Southwest customer base.
Depreciation expense and general taxes increased $6.6 million, or seven
percent, as a result of construction activities. Average gas plant in
service for the current twelve-month period increased $162 million, or
ten percent, compared to the corresponding period a year ago. This was
attributed to the upgrade of existing operating facilities and the
expansion of the system to accommodate customer growth.
Financing costs increased $6.3 million, or 11 percent, during the
twelve months ended September 30, 1997 over the comparative prior
period. Average total debt outstanding during the period increased due
to the financing of construction expenditures and working capital needs
and included higher short-term debt, the issuance of medium-term notes
during 1997, and the drawdown of IDRB funds held in trust.
Additionally, the current year reflects the full annual cost of the
$60 million preferred securities issued in October 1995.
12<PAGE>
<PAGE>
RATES AND REGULATORY PROCEEDINGS
ARIZONA
In November 1996, Southwest filed a general rate application with the
Arizona Corporation Commission (ACC) seeking approval to increase
revenues by $49.3 million annually for both of its Arizona rate
jurisdictions. Southwest was seeking rate relief for increased
operating costs, changes in financing costs, and improvements and
additions to the distribution system. In August 1997, the ACC
approved a settlement of the general rate case providing the Company
with a $32 million general rate increase effective September 1, 1997.
The settlement achieved a number of favorable rate design improvements
and tariff restructuring changes including consolidation of the
southern and central Arizona rate jurisdictions for ratemaking purposes
and better matching of rates with the costs of serving various customer
classes. The timing of the increase is important to the Company because
it provides the benefit of having new rates in place before the start of
the 1997/1998 winter heating season.
FERC
In July 1996, Paiute Pipeline Company, a wholly owned subsidiary of the
Company, filed a general rate case with the Federal Energy Regulatory
Commission (FERC) seeking approval to increase revenues by $6.9 million
annually. Paiute is seeking rate relief for increased costs associated
with transmission system additions and improvements, higher
depreciation rates, operating cost increases including labor, and an
increase in the allowed rate of return. Interim rates reflecting the
increased revenues became effective in January 1997, subject to refund
until a final order is issued. In June 1997, a settlement agreement was
filed with the FERC which, if approved, would authorize a $3.2 million general
rate increase effectve January 1997. An order approving the settlement
agreement was issued in October 1997 and is expected to become final in
November 1997. Paiute has accrued a liability to customers for the difference
between the rates collected since January 1997 and the estimated amount of rate
relief to ultimately be granted. Refunds for this difference will be made to
customers within 60 days of the effective date.
CALIFORNIA
NORTHERN CALIFORNIA EXPANSION PROJECT. In 1995, Southwest initiated a
multi-year, three-phase construction project to expand its northern
California service territory and extend service into Truckee,
California. (See Note 8 of the Notes to Consolidated Financial
Statements of the 1996 Annual Report to Shareholders, incorporated by
reference into the Form 10-K, for additional background information.)
In July 1997, Southwest filed an application requesting authorization
from the California Public Utilities Commission (CPUC) to modify the
terms and conditions of the certificate of public convenience and
necessity granted by the CPUC in 1995.
In the new application, Southwest is requesting that the cost cap of
$29.1 million, originally approved by the CPUC, be increased to $46.8
million; that the scope of Phase III construction be revised to include
2,900 of the initially proposed 4,200 customers; and that Southwest be
permitted to collect contributions or advances from customer applicants
desiring service in the expansion area who were not identified to
receive service during the expansion phases as modified within the new
application. Southwest has proposed to recover the incremental costs
above the original cost cap on a dollar-for-dollar basis through a
surcharge mechanism. In August 1997, the Office of Ratepayer Advocates filed
a protest to the Southwest application indicating that the terms of
the original agreement should be adhered to. In September, a hearing was
held to discuss the filing and related protest. Southwest has until
December 1997, to file additional comments related to the protest.
Management expects the CPUC to issue a final decision during the first
quarter of 1998.
13<PAGE>
<PAGE>
For 1997, construction work on this project has been limited to the
installation of services and meters off existing mains for
approximately 900 additional customers at a cost of approximately
$1 million. Phase III, if approved as modified in the July 1997
application, would be completed during the 1998 and 1999 construction
seasons with construction expenditures estimated at $11 million.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued two
new accounting pronouncements. Statement of Financial Accounting
Standards (SFAS) No. 128, "Earnings per Share," establishes standards
for computing and presenting earnings per share (EPS). This statement
replaces the presentation of primary EPS with basic EPS and fully
diluted EPS with diluted EPS. It also requires the presentation of
basic and diluted EPS on the face of the income statement for all
entities with complex capital structures and requires a reconciliation
of the numerator and denominator of the basic EPS computation to the
numerator and denominator of the diluted EPS computation. This
statement becomes effective December 31, 1997. The Company has
reviewed the requirements of SFAS No. 128 and does not anticipate any
material changes in EPS amounts previously reported.
The second pronouncement issued was SFAS No. 129, "Disclosure of
Information about Capital Structure." SFAS No. 129 reaffirms standards
for disclosing information about an entity's capital structure. The
statement becomes effective December 31, 1997. The disclosure
requirements of this standard are not anticipated to significantly
change current reporting practices of the Company.
In June 1997, the Financial Accounting Standards Board issued two new
accounting pronouncements. SFAS No. 130, "Reporting Comprehensive
Income," establishes standards for reporting and displaying
comprehensive income and its components in a full set of general-
purpose financial statements. The components are required to be
reported in a financial statement that is displayed with the same
prominence as other financial statements. This statement becomes
effective January 1, 1998. The Company has reviewed the requirements
of SFAS No. 130 and does not expect any material change to its current
financial statement presentation format.
The second pronouncement issued was SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131
establishes standards for the way that public business enterprises
report information about operating segments in annual financial
statements and requires that those enterprises report selected
information about operating segments in interim financial reports
issued to shareholders. The statement becomes effective for 1998
annual financial statements. The disclosure requirements of this
statement are not expected to significantly change current reporting
practices of the Company.
14<PAGE>
<PAGE>
PART II - OTHER INFORMATION
ITEMS 1-5 None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this
report on Form 10-Q:
Exhibit 3 (ii) Amended Bylaws of Southwest Gas
Corporation.
Exhibit 12 Computation of Ratios of Earnings to
Fixed Charges and Ratios of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends.
Exhibit 27 Financial Data Schedule (filed
electronically only)
(b) Reports on Form 8-K
On September 17, 1997, the Company filed a Form 8-K
which announced the retirement of Kenny C. Guinn as
director and chairman of the Southwest Gas Corporation
Board of Directors and the appointment of Thomas Y.
Hartley as chairman.
The Company filed a Form 8-K, dated November 4, 1997,
reporting summary financial information for the
quarter ended September 30, 1997.
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 thereunto duly authorized.
Southwest Gas Corporation
------------------------------------------------------
(Registrant)
Date: November 10, 1997
/s/ Edward A. Janov
------------------------------------------------------
Edward A. Janov
Vice President/Controller and Chief Accounting Officer
15<PAGE>
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
3(ii) Amended Bylaws of Southwest Gas Corporation.
12 Computation of Ratios of Earnings to Fixed Charges and Ratios of
Earnings to Combined Fixed Charges and Preferred Stock Dividends
27 Financial Data Schedule (filed electronically only)<PAGE>
</TABLE>
<PAGE>
Exhibit 3(ii)
BYLAWS
OF
SOUTHWEST GAS CORPORATION
ARTICLE I
SECTION 1. PRINCIPAL OFFICE
The principal office for the transaction of the business of the corporation is
hereby fixed and located at 5241 Spring Mountain Road, in the City of Las
Vegas, County of Clark, State of Nevada.
SECTION 2. OTHER OFFICES
Branch or subordinate offices may at any time be established by the Board of
Directors at any place or places where the corporation is qualified to do
business.
SECTION 3. TERMINOLOGY
All personal pronouns used herein are employed in a generic sense and are
intended and deemed to be neutral in gender.
ARTICLE II
MEETING OF SHAREHOLDERS
SECTION 1. REGULAR MEETING
Commencing in May, 1988, the regular annual meeting of the shareholders shall
be held at the principal office of the corporation, or at such other place
within or without the State of California as the officers of the corporation
may deem convenient and appropriate, at 10 a.m. on the second Thursday of May
of each year, if not a legal holiday, and if a legal holiday, then at 10 a.m.
on the next succeeding business day, for the purpose of electing a Board of
Directors and transacting such other business as properly may come before the
meeting; provided, however, that the Board of Directors may, by resolution,
establish a different date not more than 120 days thereafter if, in its sole
discretion, it deems such postponement appropriate.
1<PAGE>
<PAGE>
SECTION 2. SPECIAL MEETINGS
Except in those instances where a particular manner of calling a meeting of
the shareholders is prescribed by law or elsewhere in these Bylaws, a special
meeting of the shareholders may be called at any time by the Chief Executive
Officer or other officers acting for him or by the Board of Directors, or by
the holders of not less than one-third of the voting shares then issued and
outstanding. Each call for a special meeting of the shareholders shall state
the time, place, and the purpose of such meeting; if made by the Board of
Directors, it shall be by resolution duly adopted by a majority vote and
entered in the minutes; if made by an authorized officer or by the
shareholders, it shall be in writing and signed by the person or persons
making the same, and unless the office of Secretary be vacant, delivered to
the Secretary. No business shall be transacted at a special meeting other than
as is stated in the call and the notice based thereon.
SECTION 3. NOTICE OF REGULAR AND SPECIAL MEETINGS
OF THE SHAREHOLDERS
Notice of each regular and special meeting of the shareholders of the
corporation shall be given by mailing to each shareholder a notice of the
time, place and purpose of such meeting addressed to him at his address as it
appears upon the books of the corporation. Each such notice shall be deposited
in the United States Mail with the postage thereon prepaid at least ten days
prior to the time fixed for such meeting. If the address of any such
shareholder does not appear on the books of the corporation and his post
office address is unknown to the person mailing such notices, the notice shall
be addressed to him at the principal office of the corporation.
SECTION 4. QUORUM
At any meeting of the shareholders, the presence in person or by proxy of the
holders of a majority of the shares entitled to vote at any meeting shall
constitute a quorum for the transaction of business, except when it is
otherwise provided by law. Any regular or special meeting of the shareholders
may adjourn from day to day or from time to time if, for any reason, there are
not present in person or by proxy the holders of a majority of the shares
entitled to vote at said meeting. Such adjournment and the reasons therefor
shall be recorded in the minutes of the proceedings.
SECTION 5. WAIVER OF NOTICE
When all the shareholders of the corporation are present at any meeting, or
when the shareholders not represented thereat give their written consent to
the holding thereof at the time and place the meeting is held, and such
written consent is made a part of the records of such meeting, the proceedings
had at such meeting are valid, irrespective of the manner in which the meeting
is called or the place where it is held.
2<PAGE>
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. NUMBER--QUORUM
The business of the corporation shall be managed by a Board of Directors,
whose number shall be not fewer than eleven (11) nor greater than fourteen
(14), as the Board of Directors or the shareholders by amendment of these
Bylaws may establish, provided, however, that a reduction in the authorized
number of directors shall not remove any director prior to the expiration of
his term of office, and provided further that the shareholders may, pursuant
to law, establish a different and definite number of directors or different
maximum and minimum numbers of directors by amendment of the Articles of
Incorporation or by a duly adopted amendment to these Bylaws. A majority of
the prescribed number of directors shall be necessary to constitute a quorum
for the trans- action of business. At a meeting at which a quorum is present,
every decision or act of a majority of the directors present made or done when
duly assembled shall be valid as the act of the Board of Directors, provided
that a minority of the directors, in the absence of a quorum, may adjourn from
day to day but may transact no business.
SECTION 2. EXACT NUMBER OF DIRECTORS
The number of directors of the corporation is hereby established, pursuant to
the provisions of Section 1 of this Article III, as twelve (12).
SECTION 3. ELECTION AND TERM OF OFFICE
The directors shall be elected at each annual meeting of shareholders, but if
any such annual meeting is not held, or the directors are not elected thereat,
the directors may be elected at any special meeting of shareholders held for
that purpose. All directors shall hold office until their respective
successors are elected and qualified.
SECTION 4. VACANCIES
Vacancies in the Board of Directors may be filled by a majority of the
remaining directors, though they be less than a quorum, and each director so
elected shall hold office until his successor is qualified following the
election at the next annual meeting of the shareholders or at any special
meeting of shareholders duly called for that purpose prior to such annual
meeting. A vacancy shall be deemed to exist in case the shareholders (or the
Board of Directors, within the provisions of Section 1 of this Article III)
shall increase the authorized number of directors, but shall fail, for a
period of thirty days from the effective date of such increase, to elect the
additional directors so provided for, or in case the shareholders fail at any
time to elect the full number of authorized directors. When one or more of the
3<PAGE>
<PAGE>
directors shall give notice to the Board of Directors of his or their
resignation from said Board, effective at a future date, the Board of
Directors shall have the power to fill such vacancy or vacancies to take
effect when such resignation or resignations become effective. Each director
so appointed shall hold office during the remainder of the term of office of
the resigning director or directors or until their successors are appointed
and qualify.
SECTION 5. FIRST MEETING OF DIRECTORS
Immediately following each annual meeting of shareholders, the Board of
Directors shall hold a regular meeting for the purpose of organization,
election of officers, and the transaction of other business. Notice of such
meeting is hereby dispensed with.
SECTION 6. REGULAR MEETINGS
Commencing in 1991, the time for other regular meetings of the Board of
Directors, when held, shall be 8 a.m. on the third Tuesday of January, July,
September and November, the first Tuesday of March and the second Wednesday of
May, unless a different schedule is established by a resolution of the Board.
If any regular meeting date shall fall on a legal holiday, then the regular
meeting date shall be the business day next following.
SECTION 7. SPECIAL MEETINGS
A special meeting of the Board of Directors shall be held whenever called by
the Chief Executive Officer or other officer acting for him, or by three
directors. Any and all business may be transacted at a special meeting. Each
call for a special meeting shall be in writing, signed by the person or
persons making the same, addressed and delivered to the Secretary, and shall
state the time and place of such meeting.
SECTION 8. NOTICE OF REGULAR AND SPECIAL MEETINGS OF THE DIRECTORS
No notice shall be required to be given of any regular meeting of the Board of
Directors, but each director shall take notice thereof. Notice of each special
meeting of the Board of Directors shall be given to each of the directors by
mailing to each of them a copy of such notice at least five days prior to the
time affixed for such meeting to the address of such director as shown on the
books of the corporation. If his address does not appear on the books of the
corporation, then such notice shall be addressed to him at the principal
office of the corporation.
SECTION 9. WAIVER OF NOTICE
When all the directors of the corporation are present at any meeting of the
Board of Directors, however called or noticed, and sign a written consent
thereto on the record of such meeting, or if the majority of the directors are
present, and if those not present sign in writing a waiver of notice of such
4<PAGE>
<PAGE>
meeting, whether prior to or after the holding of such meeting, which waiver
shall be filed with the Secretary of the corporation, the transactions of such
meeting are as valid as if had at a meeting regularly called and noticed.
SECTION 10. ACTION BY UNANIMOUS CONSENT OF DIRECTORS
Any action required or permitted to be taken by the Board of Directors may be
taken without a meeting if all members of the Board shall individually or
collectively consent in writing to such action. Such written consent or
consents shall be filed with the minutes of the proceedings of the Board, and
such action by written consent shall have the same force and effect as if
approved or taken at a regular meeting duly held. Any certificate or other
document which relates to action so taken shall state that the action was
taken by unanimous written consent of the Board of Directors without a
meeting, and that these Bylaws authorize the directors to so act.
SECTION 11. TELEPHONIC PARTICIPATION IN MEETINGS
Members of the Board may participate in a meeting through use of conference
telephone or similar communications equipment, so long as all members
participating in such meeting can hear one another. Participation in a meeting
pursuant to this section shall constitute presence in person at such meeting.
ARTICLE IV
POWERS OF DIRECTORS
SECTION 1. The directors shall have power:
1. To call special meetings of the shareholders when they deem it necessary,
and they shall call a meeting at any time upon the written request of
shareholders holding one-third of all the voting shares:
2. To appoint and remove at pleasure all officers and agents of the
corporation, prescribe their duties, fix their compensation, and require from
them as necessary security for faithful service;
3. To create and appoint committees, offices, officers and agents of the
corporation, and to prescribe and from time to time change their duties and
compensation, but no committee shall be created and no member appointed
thereto except upon approval of a majority of the whole Board of Directors;
and
4. To conduct, manage, and control the affairs and business of the
corporation and to make rules and regulations not inconsistent with the laws
of the State of California, or the Bylaws of the corporation, for the guidance
of the officers and management of the affairs of the corporation.
5<PAGE>
<PAGE>
ARTICLE V
DUTIES OF DIRECTORS
SECTION 1. It shall be the duty of the directors:
1. To cause to be kept a complete record of all their minutes and acts, and
of the proceedings of the shareholders, and present a full statement at the
regular annual meeting of the shareholders, showing in detail the assets and
liabilities of the corporation, and generally the condition of its affairs. A
similar statement shall be presented at any other meeting of the shareholders
when theretofore required by persons holding at least one-half of the voting
shares of the corporation;
2. To declare dividends out of the profits arising from the conduct of the
business, whenever such profits shall, in the opinion of the directors,
warrant the same;
3. To oversee the actions of all officers and agents of the corporation, see
that their duties are properly performed; and
4. To cause to be issued to the shareholders, in proportion to their several
interests, certificates of stock.
ARTICLE VI
OFFICERS
SECTION 1. The officers shall include a Chairman of the Board of Directors, a
Chief Executive Officer, who may be designated Chairman, a President, a
Secretary, a Treasurer, a Controller, and may include one or more Executive
Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant Vice
Presidents, Assistant Secretaries, and Assistant Treasurers. All such officers
shall be elected by and hold office at the pleasure of the Board of Directors,
provided that the Chief Executive Officer shall have authority to dismiss any
other officer. Any director shall be eligible to be the Chairman of the Board
of Directors and any two or more of such offices may be held by the same
person, except that the Chief Executive Officer or President may not also hold
the office of Secretary. Any officer may exercise any of the powers of any
other officer in the manner specified in these Bylaws, as specified from time
to time by the Board of Directors, and/or as specified from time to time by
the Chief Executive Officer or senior officer acting in his or her absence or
incapacity, and any such acting officer shall perform such duties as may be
assigned to him or her.
6<PAGE>
<PAGE>
ARTICLE VII
FEES AND COMPENSATION
SECTION 1. Directors shall be reimbursed for their expenses, and shall be
compensated for their services as directors in such amounts as the Board may
fix by resolution. Nothing herein con- tained shall be construed to preclude
any director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise, and receiving compensation therefor.
ARTICLE VIII
INDEMNIFICATION
SECTION 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Each person who was or is a party or is threatened to be made a party to or is
involved in any threatened, pending or completed action, suit or proceeding,
formal or informal, whether brought in the name of the corporation or
otherwise and whether of a civil, criminal, administrative or investigative
nature (hereinafter a "proceeding"), by reason of the fact that he or she, or
a person of whom he or she is the legal representative, is or was a director
or officer of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis of such
proceeding is an alleged action or inaction in an official capacity or in any
other capacity while serving as a director or officer, shall, subject to the
terms of any agreement between the corporation and such person, be indemnified
and held harmless by the corporation to the fullest extent permissible under
California law and the corporation's Articles of Incorporation, against all
costs, charges, expenses, liabilities and losses (including attorneys' fees,
judgments, fines, ERISA excise tax or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith, and such indemnification shall continue as to a person who has
ceased to be a director or officer and shall inure to the benefit of his or
her heirs, executors and administrators; provided, however, that (a) the
corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the Board of the
corporation, (b) the corporation shall indemnify such person seeking
indemnification in connection with a proceeding (or part thereof) other than a
proceeding by or in the name of the corporation to procure a judgment in its
favor only if any settlement of such a proceeding is approved in writing by
the corporation, and (c) that no such person shall be indemnified (i) except
to the extent that the aggregate of losses to be indemnified exceeds the
amount of such losses for which the director or officer is paid pursuant to
any directors' and officers' liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
7<PAGE>
<PAGE>
such person for an accounting of profits made from the purchase or sale by
such person of securities of the corporation pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any federal, state or local statutory law; (iii) if a
court of competent jurisdiction finally determines that any indemnification
hereunder is unlawful; (iv) for acts or omissions involving intentional
misconduct or knowing and culpable violation of law; (v) for acts or omissions
that the director or officer believes to be contrary to the best interests of
the corporation or its shareholders or that involve the absence of good faith
on the part of the director or officer; (vi) for any transaction for which the
director or officer derived an improper personal benefit; (vii) for acts or
omissions that show a reckless disregard for the director's or officer's duty
to the corporation or its shareholders in circumstances in which the director
or officer was aware, or should have been aware, in the ordinary course of
performing his or her duties, of a risk of serious injury to the corporation
or its shareholders; (viii) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's or
officer's duties to the corporation or its shareholders; (ix) for costs,
charges, expenses, liabilities and losses arising under Section 310 or 316 of
the General Corporation Law of California (the "Law"); and (x) as to
circumstances in which indemnity is expressly prohibited by Section 317 of the
Law. The right to indemnification conferred in this Article shall be a
contract right and shall include the right to be paid by the corporation
expenses incurred in defending any proceeding in advance of its final
disposition; provided, however, that if the Law requires the payment of such
expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, such advances shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or
officer, to repay all amounts to the corporation if it shall be ultimately
determined that such person is not entitled to be indemnified.
SECTION 2. INDEMNIFICATION OF EMPLOYEES AND AGENTS
A person who was or is a party or is threatened to be made a party to or is
involved in any proceedings by reason of the fact that he or she is or was an
employee or agent of the corporation or is or was serving at the request of
the corporation as an employee or agent of another enterprise, including
service with respect to employee benefit plans, whether the basis of such
action is an alleged action or inaction in an official capacity or in any
other capacity while serving as an employee or agent, may, subject to the
terms of any agreement between the corporation and such person, be indemnified
and held harmless by the corporation to the fullest extent permitted by
California law and the corporation's Articles of Incorporation, against all
costs, charges, expenses, liabilities and losses (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement), reasonably incurred or suffered by such person in
connection therewith. The immediately preceding sentence is not intended to
be and shall not be considered to confer a contract right on any employee or
agent (other than directors and officers) of the corporation.
8<PAGE>
<PAGE>
SECTION 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT
If a claim under Section 1 of this Article is not paid in full by the
corporation within 30 days after a written claim has been received by the
corporation, the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall also be entitled to be paid the expense
of prosecuting such claim. Neither the failure of the corporation (including
its Board, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is permissible in the circumstances because he or she has met the
applicable standard of conduct, if any, nor an actual determination by the
corporation (including its Board, independent legal counsel, or its
shareholders) that the claimant has not met the applicable standard of
conduct, shall be a defense to the action or create a presumption for the
purpose of an action that the claimant has not met the applicable standard of
conduct.
SECTION 4. SUCCESSFUL DEFENSE
Notwithstanding any other provision of this Article, to the extent that a
director or officer has been successful on the merits or otherwise (including
the dismissal of an action without prejudice or the settlement of a proceeding
or action without admission of liability) in defense of any proceeding
referred to in Section 1 or in defense of any claim, issue or matter therein,
he or she shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred in connection therewith.
SECTION 5. NON-EXCLUSIVITY OF RIGHTS
The right to indemnification provided by this Article shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute, bylaw, agreement, vote of shareholders or disinterested directors or
otherwise.
SECTION 6. INSURANCE
The corporation may maintain insurance, at its expense, to protect itself and
any director, officer, employee or agent of the corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the corporation would have the
power to indemnify such person against such expense, liability or loss under
the law.
SECTION 7. EXPENSES AS A WITNESS
To the extent that any director, officer, employee or agent of the corporation
is by reason of such position, or a position with another entity at the
9<PAGE>
<PAGE>
request of the corporation, a witness in any action, suit or proceeding, he or
she shall be indemnified against all costs and expenses actually and
reasonably incurred by him or her on his or her behalf in connection
therewith.
SECTION 8. INDEMNITY AGREEMENTS
The corporation may enter into agreements with any director, officer, employee
or agent of the corporation providing for indemnification to the fullest
extent permissible under the law and the corporation's Articles of
Incorporation.
SECTION 9. SEPARABILITY
Each and every paragraph, sentence, term and provision of this Article is
separate and distinct so that if any paragraph, sentence, term or provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or
unenforceability of any other paragraph, sentence, term or provision hereof.
To the extent required, any paragraph, sentence, term or provision of this
Article may be modified by a court of competent jurisdiction to preserve its
validity and to provide the claimant with, subject to the limitations set
forth in this Article and any agreement between the corporation and claimant,
the broadest possible indemnification permitted under applicable law.
SECTION 10. EFFECT OF REPEAL OR MODIFICATION
Any repeal or modification of this Article shall not adversely affect any
right of indemnification of a director or officer existing at the time of such
repeal or modification with respect to any action or omission occurring prior
to such repeal or modification."
ARTICLE IX
CHAIRMAN OF THE BOARD
SECTION 1. If there shall be a Chairman of the Board of Directors, he shall,
when present, preside at all meetings of the stockholders and the Board of
Directors, and perform such other duties as the Bylaws or the Board of
Directors shall require of him.
ARTICLE X
CHIEF EXECUTIVE OFFICER; OTHER EXECUTIVE OFFICERS
SECTION 1. The Board of Directors shall, at their first regular meeting,
elect such officers as are required by Article VI hereof and such additional
officers authorized by Article VI hereof as the Board, in its discretion, may
choose to elect. If at any time the Chief Executive Officer shall be unable to
10<PAGE>
<PAGE>
act, the President (if there shall be one who is not also the Chief Executive
Officer) shall act in his place and perform his duties; if the President or
next most senior officer is unable to perform such duties, then the vice
presidents, in such sequence as the Board of Directors may specify, shall act.
If all the foregoing shall be unable to act, the senior officer among them
shall appoint some other person in whom shall be vested, for the time being,
all the duties and functions of Chief Executive Officer, to act until the
Board of Directors can be convened and elect appropriate officers. The Chief
Executive Officer (or person acting as such) shall:
1. Preside (if there shall be no Chairman of the Board of Directors or in his
absence) over all meetings of the shareholders and directors;
2. Sign in behalf of the corporation contracts and other instruments in
writing within the scope of his authority or if, when, and as directed so to
do by the Board of Directors, but nothing herein shall limit the power of the
Board of Directors to authorize such contracts and other instruments in
writing to be signed by any other officer or person or limit the power of the
Chief Executive Officer to delegate his authority in any such matter to
another officer or other officers of the corporation. The Chief Executive
Officer or any other officer specified by the Board of Directors may sign
certificates of stock as provided in Article XIII hereof;
3. Delegate duties and responsibilities to any other officers and/or
employees of the corporation in any manner not prohibited by these Bylaws or
by the Board of Directors, and change such duties and responsibilities so
delegated from time to time at will;
4. Call the directors together when he deems it necessary, and have, subject
to the advice of the directors, direction of the affairs of the corporation;
and
5. Generally discharge such other duties as may be required of him by the
Bylaws of the corporation.
ARTICLE XI
SECRETARY
SECTION 1. The Board of Directors shall elect a Secretary:
1. It shall be the duty of the Secretary to keep a record of proceedings of
the Board of Directors and of the shareholders, and to keep the corporate seal
of the corporation. He shall be responsible for maintaining proper records
showing the number of shares of stock of all classes and series issued and
transferred by any shareholder, and the dates of such issuance and transfer;
11<PAGE>
<PAGE>
2. Whenever it is provided in these Bylaws that notice shall be given either
of regular or special meetings of the shareholders, regular or special
meetings of the directors, or otherwise, such notice shall be given by the
Secretary or by the Chief Executive Officer or by any person designated by
either of them, or by any authorized person who shall have signed the call for
such meeting. Any notice which the Secretary may give or serve, or act
required to be done by him, may with like effect be given or served or done by
or under the direction of an Assistant Secretary;
3. The Secretary shall discharge such other duties as pertain to his office
or which may be prescribed by the Board of Directors.
ARTICLE XII
TREASURER
SECTION 1. The Treasurer shall receive and keep all the funds of the
corporation and pay them out only on checks or otherwise, as directed by the
Board of Directors; provided, however, that the Board of Directors may provide
for a depository of the funds of the corporation, and may by resolution
prescribe the manner in which said funds shall be drawn from said depository.
ARTICLE XIII
CERTIFICATES OF STOCK
SECTION 1. Certificates of stock shall be of such form and device as the
Board of Directors may direct, and shall be signed by the genuine or facsimile
signatures of the Chairman and Chief Executive Officer or the President or any
authorized Vice President and the Secretary or an Assistant Secretary. Each
certificate shall express on its face its number, date of issuance, the number
of shares for which and the person to whom it is issued, the kind of shares
represented by said certificate, and such other matters as may be required by
law. Certificates of stock may be issued prior to full payment, in harmony
with all permits issued by regulatory authorities having jurisdiction in the
premises, or as is otherwise allowed by law, but any certificate issued prior
to full payment must show on its face what amount has been paid thereon.
ARTICLE XIV
TRANSFER OF STOCK
SECTION 1. Shares of stock of the corporation may be transferred at any time
by the holders, or by power of attorney, or by their legal representative, by
endorsement on the certificate of stock, but no transfer is valid until the
surrender of the endorsed certificate. A surrendered certificate shall be
12<PAGE>
<PAGE>
delivered up for cancellation before a new one is issued in lieu thereof, and
the Secretary shall preserve the certificate so canceled or a suitable record
thereof. If, however, a certificate is lost or destroyed, the Board of
Directors may order a new certificate issued as is by law required or
permitted.
ARTICLE XV
VOTING
SECTION 1. At all corporate meetings, each shareholder, either in person or
by proxy, shall be entitled to as many votes as he owns shares of stock;
however, every shareholder entitled to vote at any election for directors
shall have the right to cumulate his votes.
SECTION 2. PROXIES
Every person entitled to vote or execute consents shall have the right to do
so either in person or by one or more agents authorized by a written proxy
executed by such person or his duly authorized agent and filed with the
Secretary of the corporation; provided that no such proxy shall be valid after
the expiration of eleven (11) months from the date of its execution, unless
the person executing it specifies therein the length of time for which such
proxy is to continue in force, which in no case shall exceed seven (7) years
from the date of its execution.
ARTICLE XVI
INDEBTEDNESS
SECTION 1. The Board of Directors shall have power to incur indebtedness, and
the terms and amount thereof shall be entered in the minutes. The Board of
Directors shall have the power to secure said indebtedness, or any obligation
or obligations of the corporation, by pledge, mortgage, deed of trust, or
other security given upon any property owned by it or in which it has any
interest.
ARTICLE XVII
REGISTRAR AND/OR TRANSFER AGENT
SECTION 1. The Board of Directors may designate and appoint one or more
registrars and/or transfer agents for the registration of the stock of the
corporation, and make such rules and regulations for the registrations of
stock at the office of such registrars and/or transfer agents as may to the
Board of Directors seem desirable. The corporation may act as its own
transfer agent, at the direction of the Board of Directors. The Board of
Directors may, in its discretion, fix a transfer fee for transfer of stock
certificates.
13<PAGE>
<PAGE>
ARTICLE XVIII
MISCELLANEOUS
SECTION 1. MEETINGS. NOTICE. WHEN CONCLUSIVE.
An entry made in the minutes of the directors or shareholders, pursuant to
resolution or recital, to the effect that the notice of such meeting required
by these Bylaws to be given has been given, shall be conclusive upon the
corporation, its directors, shareholders, and all other persons that such
notice has been duly given in proper form and substance to the proper persons
and for the requisite length of time.
ARTICLE XIX
SEAL
SECTION 1. The Board of Directors shall provide a suitable seal containing
the name of the corporation, the years of its creation, and other appropriate
words, and may alter the same at pleasure.
ARTICLE XX
AMENDMENTS TO BYLAWS
SECTION 1. POWER OF SHAREHOLDERS
New Bylaws may be adopted or these Bylaws may be amended or repealed by the
vote of shareholders entitled to exercise a majority of the voting power of
the corporation or by the written assent of such shareholders, except as
otherwise provided by law or by the Articles of Incorporation.
SECTION 2. POWER OF DIRECTORS
Subject to the right of the shareholders as provided in Section 1 of this
Article XX to adopt, amend or repeal Bylaws, the Board of Directors may adopt,
amend or repeal any of the Bylaws of this corporation, except that the powers
of the Board of Directors to change, and/or establish the authorized number of
directors of this corporation shall be as set forth in Article III of these
Bylaws.
- - - - - - - - - - - - - - - - -
14<PAGE>
<PAGE>
I hereby certify that the foregoing is a full, true, and correct copy of the
Bylaws of Southwest Gas Corporation, a California corporation, as in effect on
the date hereof.
WITNESS my hand this 15th day of September, 1997.
__________________________________
George C. Biehl
Senior Vice President/Chief Financial
Officer and Corporate Secretary
15<PAGE>
<PAGE>
<TABLE>
EXHIBIT 12
SOUTHWEST GAS CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Thousands of dollars)
<CAPTION>
FOR THE TWELVE MONTHS ENDED
----------------------------------------------------------------------------
SEPT. 30, DECEMBER 31,
----------- ---------------------------------------------------------------
CONTINUING OPERATIONS 1997 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Fixed charges:
A) Interest expense $ 60,987 $ 54,674 $ 52,844 $ 48,688 $ 40,883 $ 35,533
B) Amortization 1,155 1,494 1,569 1,426 1,330 1,183
C) Interest portion of rentals 7,234 6,629 4,435 4,743 4,556 4,468
D) Preferred securities distributions 5,475 5,475 913 -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total fixed charges $ 74,851 $ 68,272 $ 59,761 $ 54,857 $ 46,769 $ 41,184
=========== =========== =========== =========== =========== ===========
2. Earnings (as defined):
E) Pretax income from
continuing operations $ 19,033 $ 10,448 $ 3,493 $ 38,119 $ 21,959 $ 49,752
Fixed Charges (1. above) 74,851 68,272 59,761 54,857 46,769 41,184
----------- ----------- ----------- ----------- ----------- -----------
Total earnings as defined $ 93,884 $ 78,720 $ 63,254 $ 92,976 $ 68,728 $ 90,936
=========== =========== =========== =========== =========== ===========
3. Ratio of earnings to fixed charges 1.25 1.15 1.06 1.69 1.47 2.21
=========== =========== =========== =========== =========== ===========
FOR THE TWELVE MONTHS ENDED
----------------------------------------------------------------------------
ADJUSTED FOR INTEREST ALLOCATED TO SEPT. 30, DECEMBER 31,
DISCONTINUED OPERATIONS ----------- ---------------------------------------------------------------
1997 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- -----------
1. Fixed charges
A) Interest expense $ 60,987 $ 54,674 $ 52,844 $ 48,688 $ 40,883 $ 35,533
B) Amortization 1,155 1,494 1,569 1,426 1,330 1,183
C) Interest portion of rentals 7,234 6,629 4,435 4,743 4,556 4,468
D) Preferred securities distributions 5,475 5,475 913 -- -- --
E) Allocated interest [1] -- -- 9,636 7,874 7,874 7,333
----------- ----------- ----------- ----------- ----------- -----------
Total fixed charges $ 74,851 $ 68,272 $ 69,397 $ 62,731 $ 54,643 $ 48,517
=========== =========== =========== =========== =========== ===========
2. Earnings (as defined):
F) Pretax income from
continuing operations $ 19,033 $ 10,448 $ 3,493 $ 38,119 $ 21,959 $ 49,752
Fixed Charges (1. above) 74,851 68,272 69,397 62,731 54,643 48,517
----------- ----------- ----------- ----------- ----------- -----------
Total earnings as defined $ 93,884 $ 78,720 $ 72,890 $ 100,850 $ 76,602 $ 98,269
=========== =========== =========== =========== =========== ===========
3. Ratio of earnings to fixed charges 1.25 1.15 1.05 1.61 1.40 2.03
=========== =========== =========== =========== =========== ===========
</TABLE>
[1] Represents allocated interest through the period ended December 31, 1995.
Carrying costs for the period subsequent to year end through the
disposition of the discontinued operations were accrued and recorded as
disposal costs.
<PAGE>
<PAGE>
<TABLE>
EXHIBIT 12
SOUTHWEST GAS CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
(Thousands of dollars)
<CAPTION>
FOR THE TWELVE MONTHS ENDED
----------------------------------------------------------------------------
SEPT. 30, DECEMBER 31,
----------- ---------------------------------------------------------------
CONTINUING OPERATIONS 1997 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Combined fixed charges:
A) Total fixed charges $ 74,851 $ 68,272 $ 59,761 $ 54,857 $ 46,769 $ 41,184
B) Preferred dividends [1] -- -- 404 826 1,183 1,623
----------- ----------- ----------- ----------- ----------- -----------
Total fixed charges and
preferred dividends $ 74,851 $ 68,272 $ 60,165 $ 55,683 $ 47,952 $ 42,807
=========== =========== =========== =========== =========== ===========
2. Earnings $ 93,884 $ 78,720 $ 63,254 $ 92,976 $ 68,728 $ 90,936
=========== =========== =========== =========== =========== ===========
3. Ratio of earnings to fixed charges
and preferred dividends 1.25 1.15 1.05 1.67 1.43 2.12
=========== =========== =========== =========== =========== ===========
FOR THE TWELVE MONTHS ENDED
----------------------------------------------------------------------------
ADJUSTED FOR INTEREST ALLOCATED TO SEPT. 30, DECEMBER 31,
DISCONTINUED OPERATIONS ----------- ---------------------------------------------------------------
1997 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- -----------
1. Combined fixed charges
A) Total fixed charges $ 74,851 $ 68,272 $ 69,397 $ 62,731 $ 54,643 $ 48,517
B) Preferred dividends [1] -- -- 404 826 1,183 1,623
----------- ----------- ----------- ----------- ----------- -----------
Total fixed charges and
preferred dividends $ 74,851 $ 68,272 $ 69,801 $ 63,557 $ 55,826 $ 50,140
=========== =========== =========== =========== =========== ===========
2. Earnings $ 93,884 $ 78,720 $ 72,890 $ 100,850 $ 76,602 $ 98,269
=========== =========== =========== =========== =========== ===========
3. Ratio of earnings to fixed charges
and preferred dividends 1.25 1.15 1.04 1.59 1.37 1.96
=========== =========== =========== =========== =========== ===========
</TABLE>
[1] Preferred and preference dividends have been adjusted to represent the
pretax earnings necessary to cover such dividend requirements.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Southwest
Gas Corporation's Form 10-Q for the quarter ended September 30, 1997 and is
qualified in its entirety before reference to such financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,339,108
<OTHER-PROPERTY-AND-INVEST> 70,764
<TOTAL-CURRENT-ASSETS> 214,917
<TOTAL-DEFERRED-CHARGES> 54,299
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,679,088
<COMMON> 28,853
<CAPITAL-SURPLUS-PAID-IN> 357,404
<RETAINED-EARNINGS> (21,429)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 364,828
0
0
<LONG-TERM-DEBT-NET> 778,942
<SHORT-TERM-NOTES> 109,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 6,123
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 420,195<F1>
<TOT-CAPITALIZATION-AND-LIAB> 1,679,088
<GROSS-OPERATING-REVENUE> 500,867
<INCOME-TAX-EXPENSE> (3,926)
<OTHER-OPERATING-EXPENSES> 460,582
<TOTAL-OPERATING-EXPENSES> 460,582
<OPERATING-INCOME-LOSS> 40,285
<OTHER-INCOME-NET> (4,715)<F2>
<INCOME-BEFORE-INTEREST-EXPEN> 35,570
<TOTAL-INTEREST-EXPENSE> 46,362
<NET-INCOME> (6,866)
0
<EARNINGS-AVAILABLE-FOR-COMM> (6,866)
<COMMON-STOCK-DIVIDENDS> 16,583
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 36,357
<EPS-PRIMARY> (0.25)
<EPS-DILUTED> (0.25)
<FN>
<F1>Includes: trust originated preferred securities of $60,000, current
liabilities, net of current long-term debt, maturities and short-term debt of
$155,355, and deferred income taxes and other credits of $204,840.
<F2>Includes distributions related to trust originated preferred securities of
$4,106.
</FN>
<PAGE>
</TABLE>
