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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) February 10, 1999
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<PAGE>
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ITEM 5. OTHER EVENTS
On February 10, 1999, 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 December 31, 1998. 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 - Fourth Quarter 1998
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: February 10, 1999 /s/ EDWARD A. JANOV
-----------------------------
Edward A. Janov
Vice President/Controller and
Chief Accounting Officer
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EXHIBIT 99
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- ----------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Gas operating revenues $ 231,988 $ 200,352 $ 799,597 $ 614,665
Net cost of gas sold 83,595 59,508 329,849 209,338
---------- ---------- ---------- ----------
Operating margin 148,393 140,844 469,748 405,327
Operations and maintenance expenses 55,376 52,994 209,172 201,159
Depreciation, amortization, and general taxes 28,822 26,251 111,877 103,921
---------- ---------- ---------- ----------
Operating income 64,195 61,599 148,699 100,247
Net interest deductions 15,478 16,559 62,284 61,751
Preferred securities distribution 1,369 1,369 5,475 5,475
---------- ---------- ---------- ----------
Pretax utility income 47,348 43,671 80,940 33,021
Utility income tax expense 20,722 13,015 33,464 8,922
---------- ---------- ---------- ----------
Net utility income 26,626 30,656 47,476 24,099
Other income (expense), net (2,433) (7,849) (2,646) (8,274)
---------- ---------- ---------- ----------
Contribution to net income - gas operations 24,193 22,807 44,830 15,825
Contribution to net income - construction services 850 528 2,707 644
---------- ---------- ---------- ----------
Net income $ 25,043 $ 23,335 $ 47,537 $ 16,469
========== ========== ========== ==========
Earnings per share - gas operations $ 0.80 $ 0.83 $ 1.57 $ 0.59
Earnings per share - construction services 0.03 0.02 0.09 0.02
---------- ---------- ---------- ----------
Basic earnings per share $ 0.83 $ 0.85 $ 1.66 $ 0.61
========== ========== ========== ==========
Diluted earnings per share $ 0.82 $ 0.85 $ 1.65 $ 0.61
========== ========== ========== ==========
Average outstanding common shares 30,339 27,303 28,611 27,069
Average shares outstanding (assuming dilution) 30,591 27,442 28,815 27,193
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 principals (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>
YEAR ENDED DECEMBER 31,
------------------------------------------
1998 1997 1996
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gas operating revenues $ 799,597 $ 614,665 $ 546,361
Net cost of gas sold 329,849 209,338 187,580
- -------------------------------------------------------------------------------------------------
Operating margin 469,748 405,327 358,781
Operations and maintenance expenses 209,172 201,159 198,364
Depreciation, amortization, and general taxes 111,877 103,921 95,599
- -------------------------------------------------------------------------------------------------
Operating income 148,699 100,247 64,818
Net interest deductions 62,284 61,751 53,003
Preferred securities distribution 5,475 5,475 5,475
- -------------------------------------------------------------------------------------------------
Pretax utility income 80,940 33,021 6,340
Utility income tax expense 33,464 8,922 1,997
- -------------------------------------------------------------------------------------------------
Net utility income 47,476 24,099 4,343
Other income (expense), net (2,646) (8,274) (424)
- -------------------------------------------------------------------------------------------------
Contribution to net income - gas operations 44,830 15,825 3,919
Contribution to net income - construction services 2,707 644 2,655
- -------------------------------------------------------------------------------------------------
Net income $ 47,537 $ 16,469 $ 6,574
=================================================================================================
Earnings per share - gas operations $ 1.57 $ 0.59 $ 0.15
Earnings per share - construction services 0.09 0.02 0.10
- -------------------------------------------------------------------------------------------------
Basic earnings per share $ 1.66 $ 0.61 $ 0.25
=================================================================================================
Diluted earnings per share $ 1.65 $ 0.61 $ 0.25
=================================================================================================
Average outstanding common shares 28,611 27,069 25,888
Average shares outstanding (assuming dilution) 28,815 27,193 25,955
See Notes to Summary Financial Statements.
/TABLE
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<TABLE>
<CAPTION>
SOUTHWEST GAS CORPORATION
SUMMARY BALANCE SHEET
AT DECEMBER 31, 1998
(In thousands)
(Unaudited)
<S> <C> <C>
ASSETS
UTILITY PLANT
Gas plant, net of accumulated depreciation $ 1,411,882
Construction work in progress 47,480
------------
Net utility plant 1,459,362
------------
OTHER PROPERTY AND INVESTMENTS
Investment in construction services subsidiary 27,746
Other 45,199
------------
Total other property and investments 72,945
------------
CURRENT AND ACCRUED ASSETS
Cash, working funds and temporary cash investments 13,352
Receivables - less reserve of $1,345 for uncollectibles 68,061
Accrued utility revenue 56,873
Deferred purchased gas costs 57,595
Other 25,800
------------
Total current and accrued assets 221,681
------------
DEFERRED DEBITS
Unamortized debt expense 18,355
Other deferred debits 27,059
------------
Total deferred debits 45,414
------------
TOTAL ASSETS $ 1,799,402
============
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common stockholders' equity
Common stock equity, $1 par, 30,410 shares outstanding $ 456,880
Retained earnings 19,520
------------
Total common stockholders' equity 476,400 35.6%
Preferred securities of Southwest Gas Capital I, 9.125% 60,000 4.5
Long-term debt - NOTE 2 803,416 59.9
------------ -----
Total capitalization 1,339,816 100.0%
------------ =====
CURRENT AND ACCRUED LIABILITIES
Notes payable 52,000
Accounts payable 58,755
Customer deposits 24,333
Taxes accrued (including income taxes) 33,701
Other 63,277
------------
Total current and accrued liabilities 232,066
------------
DEFERRED CREDITS
Deferred investment tax credits 17,271
Deferred income taxes 160,844
Other 49,405
------------
Total deferred credits 227,520
------------
TOTAL CAPITALIZATION AND LIABILITIES $ 1,799,402
============
See Notes to Summary Financial Statements.
/TABLE
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SOUTHWEST GAS CORPORATION
SUMMARY STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1998
(In thousands)
(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net income $ 47,537
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 80,231
Change in receivables and payables (7,656)
Change in gas cost related balancing items 31,146
Change in accrued taxes 31,809
Change in deferred taxes 688
Allowance for funds used during construction (2,362)
Other 13,329
---------
Net cash provided by operating activities 194,722
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (179,313)
Other (768)
---------
Net cash used in investing activities (180,081)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock issuances 67,180
Dividends paid (23,676)
Change in notes payable (90,000)
Long-term debt issuances, net 31,864
---------
Net cash used in financing activities (14,632)
---------
Change in cash and temporary cash investments 9
Cash at beginning of period 13,343
---------
Cash at end of period $ 13,352
=========
SUPPLEMENTAL INFORMATION:
Interest paid, net of amounts capitalized $ 60,175
Income taxes, net of refunds $ 4,490
See Notes to Summary Financial Statements.
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<CAPTION>
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.
<S> <C>
NOTE 2 - LONG-TERM DEBT:
Term loan facility $ 200,000
Debentures and notes:
Debentures, 9.75% series F, due 2002 100,000
Debentures, 7.50% series, due 2006 75,000
Debentures, 8% series, due 2026 75,000
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
Medium-term notes, 6.27% series, due 2008 25,000
Industrial development revenue bonds:
Variable-rate bonds, Series A, due 2028 - net of funds held in trust 30,316
7.30% 1992 Series A, due 2027 30,000
7.50% 1992 Series B, due 2032 100,000
6.50% 1993 Series A, due 2033 75,000
Unamortized discount on long-term debt (6,900)
---------
TOTAL LONG-TERM DEBT $ 803,416
=========
ESTIMATED CURRENT MATURITIES $ --
=========
/TABLE
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<TABLE>
<CAPTION>
SOUTHWEST GAS CORPORATION
SELECTED STATISTICAL DATA
DECEMBER 31, 1998
FINANCIAL STATISTICS
Market value to book value per share at year end 170%
Twelve months to date return on equity -- total company 11.0%
-- gas segment 10.8%
Common stock dividend yield at year end 3.1%
<S> <C> <C> <C>
GAS OPERATIONS SEGMENT
Authorized
Authorized Authorized Return on
Rate Base Rate of Common
Rate Jurisdiction (In thousands) Return Equity
- ----------------- ------------- ---------- ----------
Arizona (1) $ 541,104 9.38% 11.25%
Southern Nevada (1) 237,165 9.50 11.55
Northern Nevada (1) 63,986 9.67 11.55
Southern California 69,486 9.94 11.35
Northern California 21,825 10.02 11.35
Paiute Pipeline Company (1) 61,602 9.69 11.60
(1) Estimated amounts based on rate case settlements.
SYSTEM THROUGHPUT BY CUSTOMER CLASS
YEAR ENDED DECEMBER 31,
---------------------------------------------------
(In dekatherms) 1998 1997 1996
- ---------------------------------------------------------------------------------------
Residential 58,694,167 50,554,880 45,050,591
Small commercial 26,993,684 24,660,541 23,834,362
Large commercial 7,932,567 7,654,182 7,502,980
Industrial / Other 16,705,989 8,603,601 5,444,985
Transportation 100,137,195 103,085,729 96,820,733
- ---------------------------------------------------------------------------------------
Total system throughput 210,463,602 194,558,933 178,653,651
=======================================================================================
YEAR ENDED DECEMBER 31,
---------------------------------------------------
HEATING DEGREE DAY COMPARISON 1998 1997 1996
- ---------------------------------------------------------------------------------------
Actual 2,321 1,971 1,900
Ten-year average 2,043 2,018 2,036
=======================================================================================
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