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 4, 2009
SOUTHWEST
GAS CORPORATION
(Exact
name of registrant as specified in its charter)
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California
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1-7850
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88-0085720
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(State
or other jurisdiction of
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(Commission
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(I.R.S.
Employer
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incorporation
or organization)
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File
Number)
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Identification
No.)
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5241
Spring Mountain Road
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Post
Office Box 98510
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Las
Vegas, Nevada
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89193-8510
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (702) 876-7237
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item
2.02 Results
of Operations and Financial Condition.
On August
4, 2009, Southwest Gas Corporation (the Company) released summary financial
information to the general public, including the investment community, regarding
the Company’s operating performance for the quarter, six, and twelve months
ended June 30, 2009. A copy of the Company’s press release and summary financial
information is attached hereto as Exhibit 99.
This Form
8-K and the attached exhibit are provided under Item 2.02 of Form 8-K and are
furnished to, but not filed with, the Securities and Exchange
Commission.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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SOUTHWEST
GAS CORPORATION
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Date:
August 4, 2009
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/s/
ROY R. CENTRELLA
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Roy
R. Centrella
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Vice
President/Controller and
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Chief
Accounting Officer
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EXHIBIT
INDEX
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Exhibit
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No.
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Description
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99
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Press
Release and summary financial information dated August 4,
2009.
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August 4,
2009
Media
Contact: Sonya Headen, Las Vegas, NV (702) 364-3411
Shareholder
Contact: Ken Kenny, Las Vegas, NV (702) 876-7237
For
Immediate Release
SOUTHWEST
GAS CORPORATION
REPORTS
SECOND QUARTER 2009 RESULTS
Las
Vegas, Nev. – Southwest Gas Corporation (NYSE: SWX) recorded a net loss of
$0.01 per share for the second quarter of 2009, compared to a loss of $0.06
per share recorded during the second quarter of 2008. Consolidated
net loss was $594,000, compared to a loss of $2.7 million 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, “Second quarter results improved
compared to the same period last year primarily due to increases in the return
on investments this quarter versus declines in the corresponding prior-year
quarter. Operationally, we are feeling the effects of the recession
on our service areas and our company, particularly in regards to growth and
declining customer usage, but we are encouraged by the progress we continue to
make. Our improved cash flows and stronger balance sheet prompted
Standard and Poor’s to raise its corporate credit rating on Southwest Gas from
BBB- to BBB in April of this year. We remain focused on providing
safe and reliable service, controlling operating expenses and capital
expenditures, and seeking stable returns through the regulatory
process. We expect a decision in the pending $30.5 million
Nevada general rate request by November 1, and
-more-
we
anticipate a form of ‘decoupled’ rate design in that case. We also
continue to participate in a productive rulemaking proceeding in Arizona that
deals with energy efficiency standards and alternatives for a decoupled rate
design.”
For the
twelve months ended June 30, 2009, consolidated net income was
$63.9 million, or $1.45 per basic share, compared to
$80.2 million, or $1.87 per basic share, during the twelve-month
period ended June 30, 2008.
Natural Gas Operations
Segment Results
Second
Quarter
Operating
margin, defined as operating revenues less the cost of gas sold, increased by
approximately $1 million in the second quarter of 2009 compared to the
second quarter of 2008. Net rate changes positively impacted margin
by approximately $4 million, consisting of rate relief of $6 million
in Arizona and $1 million in California, partially offset by a
$3 million decrease related to the return to a seasonal margin methodology
in California. Conservation resulting from current economic
conditions and energy efficiency negatively impacted operating margin by
$2 million. Weather changes between quarters resulted in a
$1 million margin decrease as somewhat warmer-than-normal temperatures were
experienced during both quarters. Customer growth was not a factor as
only 3,000 net new customers (on a comparative seasonally adjusted basis)
were added during the last twelve months.
-more-
Operating
expenses for the quarter increased $3.7 million, or three percent, compared
to the second quarter of 2008 primarily due to incremental operating costs
(including depreciation) associated with facilities upgrades and general cost
increases. Other income increased $3.1 million between quarters
as the cash surrender values of company-owned life insurance (“COLI”) policies
increased by $3.7 million in the second quarter of 2009 compared to a
reduction of $500,000 in the prior-year quarter, partially offset by lower
interest income. Net financing costs decreased $2.4 million due
principally to a reduction in outstanding debt and lower interest rates on
variable-rate debt.
Twelve
Months to Date
Operating
margin decreased a net $4 million between periods. Rate relief
and rate changes provided $28 million of operating margin, consisting of
rate relief of $17 million in Arizona and $2 million in California,
and nearly $9 million of timing differences related to the return to a
seasonal margin methodology in California. Customer growth
contributed $2 million in operating margin. Differences in
heating demand caused primarily by weather variations between periods resulted
in a $22 million operating margin decrease as warmer-than-normal
temperatures were experienced during both periods (during the twelve-month
period of 2009, operating margin was negatively impacted by $29 million,
while the negative impact in the twelve-month period of 2008 was
$7 million). Conservation resulting from current economic
conditions and energy efficiency negatively impacted operating margin by
$12 million.
-more-
Operating
expenses increased $15.8 million, or three percent, between periods due to
incremental operating costs (including depreciation) associated with facilities
upgrades and general cost increases. The increase was somewhat
mitigated by labor efficiencies primarily resulting from the conversion to
electronic meter reading.
Other
income, which principally includes interest income, changes in cash surrender
values of COLI policies, and non-utility expenses, decreased $8.3 million
between periods. This was primarily due to a $4.1 million
incremental decline in the cash surrender values of COLI policies between
periods and lower interest income on investments and deferred purchased gas cost
receivables that are now recovered. Net financing costs decreased
$8.7 million, or nine percent, due to a reduction in outstanding debt and
lower interest rates on variable-rate debt.
Southwest
Gas Corporation provides natural gas service to 1,809,000 customers in Arizona,
Nevada, and California.
This
press release may contain statements which constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995 (Reform Act). All such forward-looking statements are
intended to be subject to the safe harbor protection provided by the Reform
Act. A number of important factors affecting the business and
financial results of the Company could cause actual results to differ materially
from those stated in the forward-looking statements. These factors
include, but are not limited to, the impact of weather variations on customer
usage, customer growth rates, conditions in the housing market, the effects of
regulation/deregulation, the timing and amount of rate relief, changes in rate
design, and the impacts of stock market volatility.
-more-
SOUTHWEST
GAS CONSOLIDATED EARNINGS DIGEST
(In
thousands, except per share amounts)
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QUARTER
ENDED JUNE 30,
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2009
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2008
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||||||
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Consolidated
Operating Revenues
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$ | 387,648 | $ | 447,304 | ||||
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Net
Loss
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$ | 594 | $ | 2,725 | ||||
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Average
Number of Common Shares Outstanding
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44,730 | 43,324 | ||||||
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Loss
Per Share
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$ | 0.01 | $ | 0.06 | ||||
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SIX
MONTHS ENDED JUNE 30,
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2009
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2008
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||||||
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Consolidated
Operating Revenues
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$ | 1,077,510 | $ | 1,260,911 | ||||
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Net
Income
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$ | 49,387 | $ | 46,427 | ||||
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Average
Number of Common Shares Outstanding
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44,578 | 43,168 | ||||||
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Basic
Earnings Per Share
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$ | 1.11 | $ | 1.08 | ||||
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Diluted
Earnings Per Share
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$ | 1.10 | $ | 1.07 | ||||
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TWELVE
MONTHS ENDED JUNE 30,
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2009
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2008
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Consolidated
Operating Revenues
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$ | 1,961,342 | $ | 2,192,746 | ||||
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Net
Income
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$ | 63,933 | $ | 80,246 | ||||
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Average
Number of Common Shares Outstanding
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44,176 | 42,865 | ||||||
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Basic
Earnings Per Share
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$ | 1.45 | $ | 1.87 | ||||
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Diluted
Earnings Per Share
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$ | 1.44 | $ | 1.86 | ||||
-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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2009
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2008
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2009
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2008
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2009
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2008
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Results
of Consolidated Operations
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Contribution to net income (loss) - gas operations
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$ | (2,736 | ) | $ | (4,907 | ) | $ | 47,116 | $ | 44,426 | $ | 56,437 | $ | 71,147 | ||||||||||
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Contribution to net income - construction services
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2,142 | 2,182 | 2,271 | 2,001 | 7,496 | 9,099 | ||||||||||||||||||
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Net income (loss)
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$ | (594 | ) | $ | (2,725 | ) | $ | 49,387 | $ | 46,427 | $ | 63,933 | $ | 80,246 | ||||||||||
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Basic earnings (loss) per share
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$ | (0.01 | ) | $ | (0.06 | ) | $ | 1.11 | $ | 1.08 | $ | 1.45 | $ | 1.87 | ||||||||||
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Diluted earnings (loss) per share
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$ | (0.01 | ) | $ | (0.06 | ) | $ | 1.10 | $ | 1.07 | $ | 1.44 | $ | 1.86 | ||||||||||
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Average outstanding common shares
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44,730 | 43,324 | 44,578 | 43,168 | 44,176 | 42,865 | ||||||||||||||||||
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Average shares outstanding (assuming dilution)
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- | - | 44,848 | 43,466 | 44,461 | 43,186 | ||||||||||||||||||
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Results
of Natural Gas Operations
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Gas operating revenues
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$ | 316,744 | $ | 353,003 | $ | 951,850 | $ | 1,094,303 | $ | 1,648,942 | $ | 1,837,821 | ||||||||||||
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Net cost of gas sold
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167,685 | 204,580 | 563,495 | 705,279 | 914,193 | 1,098,845 | ||||||||||||||||||
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Operating margin
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149,059 | 148,423 | 388,355 | 389,024 | 734,749 | 738,976 | ||||||||||||||||||
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Operations and maintenance expense
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86,846 | 83,603 | 171,508 | 168,809 | 341,359 | 332,392 | ||||||||||||||||||
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Depreciation and amortization
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41,873 | 41,297 | 84,212 | 81,942 | 168,607 | 161,426 | ||||||||||||||||||
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Taxes other than income taxes
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9,504 | 9,616 | 19,615 | 19,810 | 36,585 | 36,958 | ||||||||||||||||||
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Operating income
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10,836 | 13,907 | 113,020 | 118,463 | 188,198 | 208,200 | ||||||||||||||||||
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Other income (expense)
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2,423 | (636 | ) | 637 | (2,162 | ) | (10,670 | ) | (2,336 | ) | ||||||||||||||
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Net interest deductions
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18,531 | 20,938 | 36,713 | 42,290 | 77,519 | 86,263 | ||||||||||||||||||
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Net interest deductions on subordinated debentures
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1,932 | 1,932 | 3,865 | 3,864 | 7,730 | 7,728 | ||||||||||||||||||
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Income (loss) before income taxes
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(7,204 | ) | (9,599 | ) | 73,079 | 70,147 | 92,279 | 111,873 | ||||||||||||||||
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Income tax expense (benefit)
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(4,468 | ) | (4,692 | ) | 25,963 | 25,721 | 35,842 | 40,726 | ||||||||||||||||
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Contribution to net income (loss) - gas operations
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$ | (2,736 | ) | $ | (4,907 | ) | $ | 47,116 | $ | 44,426 | $ | 56,437 | $ | 71,147 | ||||||||||
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SOUTHWEST
GAS CORPORATION
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||||||||||||||||
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SELECTED
STATISTICAL DATA
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||||||||||||||||
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JUNE
30, 2009
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||||||||||||||||
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FINANCIAL
STATISTICS
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||||||||||||||||
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Market
value to book value per share at quarter end
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92 | % | ||||||||||||||
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Twelve
months to date return on equity -- total
company
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6.1 | % | ||||||||||||||
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-- gas segment
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5.7 | % | ||||||||||||||
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Common
stock dividend yield at quarter end
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4.3 | % | ||||||||||||||
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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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|||||||||||||
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Arizona
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$ | 1,066,108 | 8.86 | % | 10.00 | % | ||||||||||
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Southern
Nevada
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574,285 | 7.79 | 10.50 | |||||||||||||
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Northern
Nevada
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110,309 | 8.56 | 10.50 | |||||||||||||
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Southern
California
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143,851 | 7.87 | 10.50 | |||||||||||||
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Northern
California
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52,285 | 8.99 | 10.50 | |||||||||||||
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South
Lake Tahoe
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11,815 | 8.99 | 10.50 | |||||||||||||
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Paiute
Pipeline Company (1)
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82,853 | 9.44 | 11.80 | |||||||||||||
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(1) Estimated
amounts based on rate case settlements.
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||||||||||||||||
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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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2009
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2008
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2009
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2008
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||||||||||||
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Residential
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43,542,586 | 49,527,119 | 64,514,089 | 72,103,049 | ||||||||||||
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Small
commercial
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17,326,439 | 19,450,739 | 29,331,177 | 31,897,674 | ||||||||||||
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Large
commercial
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6,690,623 | 7,012,801 | 12,189,966 | 12,843,607 | ||||||||||||
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Industrial
/ Other
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3,964,783 | 4,985,400 | 8,749,530 | 9,829,586 | ||||||||||||
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Transportation
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51,909,999 | 55,363,664 | 112,965,316 | 113,673,633 | ||||||||||||
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Total
system throughput
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123,434,430 | 136,339,723 | 227,750,078 | 240,347,549 | ||||||||||||
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HEATING
DEGREE DAY COMPARISON
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||||||||||||||||
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Actual
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1,253 | 1,427 | 1,727 | 1,937 | ||||||||||||
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Ten-year
average
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1,323 | 1,341 | 1,876 | 1,906 | ||||||||||||
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Heating
degree days for prior periods have been recalculated using the current
period customer mix.
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