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) August 6, 2008
SOUTHWEST
GAS CORPORATION
(Exact
name of registrant as specified in its charter)
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California
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1-7850
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88-0085720
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(State
or other jurisdiction of
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(Commission
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(I.R.S.
Employer
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incorporation
or organization)
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File
Number)
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Identification
No.)
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5241
Spring Mountain Road
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Post
Office Box 98510
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Las
Vegas, Nevada
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89193-8510
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (702) 876-7237
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item
2.02 Results
of Operations and Financial Condition.
On August
6, 2008, Southwest Gas Corporation (the Company) released summary financial
information to the general public, including the investment community, regarding
the Company’s operating performance for the quarter, six, and twelve months
ended June 30, 2008. A copy of the Company’s press release and summary financial
information is attached hereto as Exhibit 99.
This Form
8-K and the attached exhibit are provided under Item 2.02 of Form 8-K and are
furnished to, but not filed with, the Securities and Exchange
Commission.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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SOUTHWEST
GAS CORPORATION
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Date:
August 6, 2008
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/s/
ROY R. CENTRELLA
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Roy
R. Centrella
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Vice
President/Controller and
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Chief
Accounting Officer
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EXHIBIT
INDEX
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Exhibit
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No.
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Description
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99
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Press
Release and summary financial information dated August 6,
2008.
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August 6,
2008
Media
Contact: Cynthia Messina, Las Vegas, NV (702) 876-7132
Shareholder
Contact: Ken Kenny, Las Vegas, NV (702) 876-7237
For
Immediate Release
SOUTHWEST
GAS CORPORATION
REPORTS
SECOND QUARTER 2008 RESULTS
Las
Vegas, Nev. – Southwest Gas Corporation (SWX – NYSE) recorded a net loss of
$0.06 per basic share for the second quarter of 2008, compared to a loss of
$0.01 per basic share recorded during the second quarter of
2007. Consolidated net loss was $2.7 million, compared to a loss
of $337,000 in the prior-year quarter. Due to the seasonal nature of
the business, net losses during the second and third quarters are normal and not
generally indicative of earnings for a complete twelve-month
period.
According
to Jeffrey W. Shaw, Chief Executive Officer, “Given the current, challenging
economic environment, we were encouraged with the overall operating results for
the quarter. However, both our gas operations and construction
services segments were negatively impacted by the new construction market
slowdown. In addition, the quarterly net loss reflected negative
returns on long-term investments related to stock market
declines. Looking ahead, we believe we are poised for improvement
when currently vacant homes become occupied (and customers begin taking service)
and as market returns recover.” Shaw also noted that, “rate case
hearings concluded during the quarter in the Company’s Arizona general rate case
application, and hearings are scheduled later this summer in our California
general rate case. We remain cautiously
-more-
optimistic
that fair outcomes will be achieved before the winter heating season in Arizona,
and by year-end in California.”
For the
twelve months ended June 30, 2008, consolidated net income was
$80.2 million, or $1.87 per basic share, compared to
$85.4 million, or $2.05 per basic share, during the twelve-month
period ended June 30, 2007.
Natural Gas Operations
Segment Results
Second
Quarter
Operating
margin, defined as operating revenues less the cost of gas sold, increased
approximately $2.6 million, or two percent, in the second quarter of
2008 compared to the second quarter of 2007. Customer growth
contributed $2 million toward the operating margin increase as the Company
added 19,000 customers during the last twelve months, an increase of
one percent. Weather changes between periods accounted for the
remaining increase.
Operating
expenses for the quarter increased $2.4 million, or two percent, compared
to the second quarter of 2007 primarily due to general cost increases, higher
uncollectible expenses, and incremental operating costs associated with serving
additional customers. Labor efficiencies, resulting primarily from
the conversion to electronic meter reading, mitigated the increase in operating
expenses. Other income, which principally includes interest income,
long-term investment returns, and non-utility expenses, decreased
$4.3 million between periods. This was primarily due to
negative
-more-
returns
on long-term investments in the current quarter versus positive returns in the
prior year’s quarter. Net financing costs were relatively flat
between periods.
Twelve
Months to Date
Operating
margin increased $17 million, or two percent, between
periods. Rate changes accounted for $9 million of the increase
and customer growth contributed $8 million. Warmer-than-normal
temperatures were experienced during both twelve-month periods (each with
estimated negative impacts to operating margin of approximately
$7 million), resulting in no incremental impact between the
periods.
Operating
expenses increased $6.3 million, or one percent, between periods primarily
due to general increases in labor and maintenance costs, higher uncollectible
expenses, and incremental operating costs associated with serving additional
customers, partially offset by labor efficiencies resulting primarily from the
electronic meter reading conversion.
Other
income decreased $12.5 million between periods primarily due to negative
returns on long-term investments in the current twelve-month period (versus
favorable returns in the prior-year period) and lower interest income due to the
full recovery of previously deferred purchased gas cost receivables. The
prior-year period also included non-recurring gains on dispositions of
miscellaneous properties. Net financing costs between periods
increased $1.4 million, or two percent, primarily due to interest expense
associated with higher deferred PGA balance payables and higher rates on
variable-rate debt.
Southwest
Gas Corporation provides natural gas service to 1,819,000 customers in Arizona,
Nevada, and California.
This
press release may contain statements which constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (Reform Act). All such forward-looking statements are
intended to be subject to the safe harbor protection provided by the Reform
Act. A number of important factors affecting the business and
financial results of the Company could cause actual results to differ materially
from those stated in the forward-looking statements. These factors
include, but are not limited to, the impact of weather variations on customer
usage, customer growth rates, conditions in the housing market, the effects of
regulation/deregulation, the timing and amount of rate relief, and changes in
rate design.
-more-
SOUTHWEST
GAS CONSOLIDATED EARNINGS DIGEST
(In
thousands, except per share amounts)
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QUARTER
ENDED JUNE 30,
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2008
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2007
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Consolidated
Operating Revenues
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$ | 447,304 | $ | 426,537 | ||||
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Net
Loss
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$ | 2,725 | $ | 337 | ||||
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Average
Number of Common Shares Outstanding
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43,324 | 42,226 | ||||||
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Basic
Loss Per Share
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$ | 0.06 | $ | 0.01 | ||||
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SIX
MONTHS ENDED JUNE 30,
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2008
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2007
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Consolidated
Operating Revenues
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$ | 1,260,911 | $ | 1,220,253 | ||||
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Net
Income
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$ | 46,427 | $ | 49,427 | ||||
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Average
Number of Common Shares Outstanding
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43,168 | 42,103 | ||||||
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Basic
Earnings Per Share
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$ | 1.08 | $ | 1.17 | ||||
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Diluted
Earnings Per Share
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$ | 1.07 | $ | 1.16 | ||||
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TWELVE
MONTHS ENDED JUNE 30,
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2008
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2007
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||||||
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Consolidated
Operating Revenues
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$ | 2,192,746 | $ | 2,137,168 | ||||
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Net
Income
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$ | 80,246 | $ | 85,398 | ||||
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Average
Number of Common Shares Outstanding
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42,865 | 41,691 | ||||||
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Basic
Earnings Per Share
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$ | 1.87 | $ | 2.05 | ||||
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Diluted
Earnings Per Share
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$ | 1.86 | $ | 2.03 | ||||
-end-
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SOUTHWEST
GAS CORPORATION
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||||||||||||||||||||||||
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SUMMARY
UNAUDITED OPERATING RESULTS
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(In
thousands, except per share amounts)
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THREE
MONTHS ENDED
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SIX
MONTHS ENDED
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TWELVE
MONTHS ENDED
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||||||||||||||||||||||
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JUNE
30,
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JUNE
30,
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JUNE
30,
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||||||||||||||||||||||
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2008
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2007
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2008
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2007
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2008
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2007
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Results
of Consolidated Operations
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Contribution
to net income (loss) - gas operations
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$ | (4,907 | ) | $ | (2,855 | ) | $ | 44,426 | $ | 45,773 | $ | 71,147 | $ | 75,160 | ||||||||||
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Contribution
to net income - construction services
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2,182 | 2,518 | 2,001 | 3,654 | 9,099 | 10,238 | ||||||||||||||||||
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Net
income (loss)
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$ | (2,725 | ) | $ | (337 | ) | $ | 46,427 | $ | 49,427 | $ | 80,246 | $ | 85,398 | ||||||||||
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Earnings
(loss) per share - gas operations
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$ | (0.11 | ) | $ | (0.07 | ) | $ | 1.03 | $ | 1.09 | $ | 1.66 | $ | 1.80 | ||||||||||
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Earnings
per share - construction services
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0.05 | 0.06 | 0.05 | 0.08 | 0.21 | 0.25 | ||||||||||||||||||
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Basic
earnings (loss) per share
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$ | (0.06 | ) | $ | (0.01 | ) | $ | 1.08 | $ | 1.17 | $ | 1.87 | $ | 2.05 | ||||||||||
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Diluted
earnings (loss) per share
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$ | (0.06 | ) | $ | (0.01 | ) | $ | 1.07 | $ | 1.16 | $ | 1.86 | $ | 2.03 | ||||||||||
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Average
outstanding common shares
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43,324 | 42,226 | 43,168 | 42,103 | 42,865 | 41,691 | ||||||||||||||||||
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Average
shares outstanding (assuming dilution)
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- | - | 43,466 | 42,516 | 43,186 | 42,126 | ||||||||||||||||||
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Results
of Natural Gas Operations
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Gas
operating revenues
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$ | 353,003 | $ | 344,233 | $ | 1,094,303 | $ | 1,071,248 | $ | 1,837,821 | $ | 1,836,332 | ||||||||||||
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Net
cost of gas sold
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204,580 | 198,417 | 705,279 | 692,628 | 1,098,845 | 1,114,296 | ||||||||||||||||||
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Operating
margin
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148,423 | 145,816 | 389,024 | 378,620 | 738,976 | 722,036 | ||||||||||||||||||
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Operations
and maintenance expense
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83,603 | 83,090 | 168,809 | 167,625 | 332,392 | 333,158 | ||||||||||||||||||
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Depreciation
and amortization
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41,297 | 39,076 | 81,942 | 77,606 | 161,426 | 152,144 | ||||||||||||||||||
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Taxes
other than income taxes
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9,616 | 9,938 | 19,810 | 20,405 | 36,958 | 39,162 | ||||||||||||||||||
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Operating
income
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13,907 | 13,712 | 118,463 | 112,984 | 208,200 | 197,572 | ||||||||||||||||||
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Other
income (expense)
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(636 | ) | 3,648 | (2,162 | ) | 5,024 | (2,336 | ) | 10,192 | |||||||||||||||
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Net
interest deductions
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20,938 | 21,315 | 42,290 | 42,463 | 86,263 | 84,823 | ||||||||||||||||||
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Net
interest deductions on subordinated debentures
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1,932 | 1,932 | 3,864 | 3,863 | 7,728 | 7,725 | ||||||||||||||||||
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Income
(loss) before income taxes
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(9,599 | ) | (5,887 | ) | 70,147 | 71,682 | 111,873 | 115,216 | ||||||||||||||||
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Income
tax expense (benefit)
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(4,692 | ) | (3,032 | ) | 25,721 | 25,909 | 40,726 | 40,056 | ||||||||||||||||
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Contribution
to net income (loss) - gas operations
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$ | (4,907 | ) | $ | (2,855 | ) | $ | 44,426 | $ | 45,773 | $ | 71,147 | $ | 75,160 | ||||||||||
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SOUTHWEST
GAS CORPORATION
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SELECTED
STATISTICAL DATA
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||||||||||||||||
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JUNE
30, 2008
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||||||||||||||||
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FINANCIAL
STATISTICS
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Market
value to book value per share at quarter end
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125 | % | ||||||||||||||
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Twelve
months to date return on equity -- total
company
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8.1 | % | ||||||||||||||
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--
gas segment
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7.6 | % | ||||||||||||||
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Common
stock dividend yield at quarter end
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3.0 | % | ||||||||||||||
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GAS
OPERATIONS SEGMENT
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||||||||||||||||
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Authorized
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||||||||||||||||
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Authorized
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Authorized
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Return
on
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||||||||||||||
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Rate
Base
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Rate
of
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Common
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||||||||||||||
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Rate
Jurisdiction
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(In
thousands)
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Return
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Equity
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Arizona
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$ | 922,721 | 8.40 | % | 9.50 | % | ||||||||||
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Southern
Nevada
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574,285 | 7.64 | 10.50 | |||||||||||||
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Northern
Nevada
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110,309 | 8.56 | 10.50 | |||||||||||||
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Southern
California
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102,703 | 8.74 | 10.38 | |||||||||||||
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Northern
California
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45,487 | 8.74 | 10.38 | |||||||||||||
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Paiute
Pipeline Company (1)
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82,853 | 9.44 | 11.80 | |||||||||||||
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(1) Estimated
amounts based on rate case settlements.
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||||||||||||||||
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SYSTEM
THROUGHPUT BY CUSTOMER CLASS
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||||||||||||||||
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SIX
MONTHS ENDED
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TWELVE
MONTHS ENDED
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|||||||||||||||
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JUNE
30,
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JUNE
30,
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|||||||||||||||
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(In
dekatherms)
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2008
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2007
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2008
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2007
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||||||||||||
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Residential
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49,527,119 | 47,230,392 | 72,103,049 | 71,106,776 | ||||||||||||
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Small
commercial
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19,450,739 | 18,619,628 | 31,897,674 | 31,420,924 | ||||||||||||
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Large
commercial
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7,012,801 | 6,925,266 | 12,843,607 | 12,966,442 | ||||||||||||
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Industrial
/ Other
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4,985,400 | 5,508,314 | 9,829,586 | 13,613,692 | ||||||||||||
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Transportation
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55,363,664 | 54,532,239 | 113,673,633 | 117,886,894 | ||||||||||||
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Total
system throughput
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136,339,723 | 132,815,839 | 240,347,549 | 246,994,728 | ||||||||||||
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HEATING
DEGREE DAY COMPARISON
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||||||||||||||||
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Actual
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1,427 | 1,338 | 1,937 | 1,868 | ||||||||||||
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Ten-year
average
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1,341 | 1,369 | 1,906 | 1,948 | ||||||||||||
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Heating
degree days for prior periods have been recalculated using the current
period customer mix.
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