1 _______________________________________________________________________________ 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 14, 1996 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 _______________________________________________________________________________ 2 ITEM 5. OTHER EVENTS On February 14, 1996, 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 year ended December 31, 1995. The financial information released is included herein. This information is summary in nature, and should not be considered complete financial statements. ITEM 7. EXHIBITS 99.1 Summary Statements of Income 99.2 Financial Analyst Report - Fourth Quarter 1995 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 14, 1996 /s/ Edward A. Janov -------------------------- Edward A. Janov Controller and Chief Accounting Officer 3 EXHIBIT TABLE 99.1 Summary Statements of Income 99.2 Financial Analyst Report - Fourth Quarter 1995
EXHIBIT 99.1 SOUTHWEST GAS CORPORATION SUMMARY STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited)
In January 1996, the Company reached an agreement to sell PriMerit to Norwest Corporation. The discontinued operations segment includes the net income of PriMerit and its subsidiaries on a stand-alone basis as adjusted, reduced by allocated carrying costs associated with the Company's investment in PriMerit (principally interest) net of taxes. The discontinued operations segment also includes the estimated loss on the disposition.THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, -------------------- -------------------- 1995 1994 1995 1994 --------- --------- --------- --------- GAS OPERATIONS SEGMENT: Operating margin - weather normalized $ 122,542 $ 121,384 $ 364,046 $ 349,346 Weather related impacts (19,000) 0 (28,000) 0 --------- --------- --------- --------- Operating margin realized 103,542 121,384 336,046 349,346 Operations and maintenance expenses 47,682 46,523 187,969 178,185 Depreciation, amortization, and general taxes 22,189 21,140 89,665 82,569 --------- --------- --------- --------- Operating income 33,671 53,721 58,412 88,592 Net interest deductions 13,697 13,278 53,354 49,465 Preferred securities distribution 913 0 913 0 --------- --------- --------- --------- Pre-tax utility income 19,061 40,443 4,145 39,127 Utility income tax expense 7,309 15,677 858 14,825 --------- --------- --------- --------- Net utility income 11,752 24,766 3,287 24,302 Other income (expense), net (243) (330) (633) (778) --------- --------- --------- --------- Contribution to net income (loss) - gas operations segment 11,509 24,436 2,654 23,524 --------- --------- --------- --------- DISCONTINUED OPERATIONS: Net income - PriMerit Bank 2,823 1,331 8,618 7,673 Acquisition carrying costs, net of tax (1,494) (1,230) (5,961) (4,896) --------- --------- --------- --------- Net income from discontinued segment 1,329 101 2,657 2,777 SAIF assessment, net of tax (7,170) 0 (7,170) 0 Loss on disposal of discontinued operations, net of tax (13,023) 0 (13,023) 0 --------- --------- --------- --------- Contribution to net income (loss) from discontinued operations (18,864) 101 (17,536) 2,777 --------- --------- --------- --------- Net income (loss) (7,355) 24,537 (14,882) 26,301 Preferred & preference dividends 22 95 307 510 --------- --------- --------- --------- Net income (loss) applicable to common stock $ (7,377) $ 24,442 $ (15,189) $ 25,791 ========= ========= ========= ========= Earnings (loss) per share from gas segment $ 0.47 $ 1.15 $ 0.10 $ 1.09 Earnings (loss) per share from discontinued operations (0.24) 0.00 (0.20) 0.13 Earnings (loss) per share from disposal (0.53) 0.00 (0.56) 0.00 --------- --------- --------- --------- Earnings (loss) per share of common stock $ (0.30) $ 1.15 $ (0.66) $ 1.22 ========= ========= ========= ========= Average outstanding common shares 24,350 21,190 23,167 21,078 ========= ========= ========= =========
1 EXHIBIT 99.2 SOUTHWEST GAS CORPORATION SUMMARY STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited)
YEAR ENDED DECEMBER 31, ---------------------------------------- 1995 1994 1993 - ---------------------------------------------------------------------------------------------------------- GAS OPERATIONS SEGMENT: Operating revenues $ 563,502 $ 599,268 $ 538,149 Net cost of gas purchased 227,456 249,922 212,290 - ---------------------------------------------------------------------------------------------------------- Operating margin 336,046 349,346 325,859 Operations and maintenance expenses 187,969 178,185 169,744 Depreciation, amortization, and general taxes 89,665 82,569 79,136 - ---------------------------------------------------------------------------------------------------------- Operating income 58,412 88,592 76,979 Net interest deductions 53,354 49,465 41,988 Preferred securities distribution 913 -- -- - ---------------------------------------------------------------------------------------------------------- Pre-tax utility income 4,145 39,127 34,991 Utility income tax expense 858 14,825 12,292 - ---------------------------------------------------------------------------------------------------------- Net utility income 3,287 24,302 22,699 Other income (expense), net (633) (778) (8,948) - ---------------------------------------------------------------------------------------------------------- Contribution to net income - gas operations segment 2,654 23,524 13,751 - ---------------------------------------------------------------------------------------------------------- DISCONTINUED OPERATIONS - NOTE 1: Net income - PriMerit Bank 8,618 7,673 6,596 Acquisition carrying costs, net of tax - NOTE 5 (5,961) (4,896) (4,941) - ---------------------------------------------------------------------------------------------------------- Net income from discontinued segment 2,657 2,777 1,655 SAIF assessment, net of tax (7,170) -- -- Loss on disposal of discontinued operations, net of tax (13,023) -- -- - ---------------------------------------------------------------------------------------------------------- Contribution to net income (loss) from discontinued operations (17,536) 2,777 1,655 - ---------------------------------------------------------------------------------------------------------- Net income (loss) (14,882) 26,301 15,406 Preferred & preference dividends 307 510 741 - ---------------------------------------------------------------------------------------------------------- Net income (loss) applicable to common stock $ (15,189) $ 25,791 $ 14,665 ========================================================================================================== Earnings (loss) per share from gas segment $ 0.10 $ 1.09 $ 0.63 ========================================================================================================== Earnings (loss) per share from discontinued operations $ (0.20) $ 0.13 $ 0.08 ========================================================================================================== Earnings (loss) per share from disposal $ (0.56) $ -- $ -- ========================================================================================================== Earnings (loss) per share of common stock $ (0.66) $ 1.22 $ 0.71 ========================================================================================================== Average outstanding common shares 23,167 21,078 20,729 ========================================================================================================== See Notes to Summary Financial Statements. /TABLE 2
SOUTHWEST GAS CORPORATION BALANCE SHEET AT DECEMBER 31, 1995 (In thousands) (Unaudited) ASSETS UTILITY PLANT Gas plant, net of accumulated depreciation $ 1,111,072 Construction work in progress 26,678 ------------ Net utility plant 1,137,750 ------------ OTHER PROPERTY AND INVESTMENTS PriMerit Bank - NOTE 2 175,493 Other 31,093 ------------ Total other property and investments 206,586 ------------ CURRENT AND ACCRUED ASSETS Cash, working funds and temporary cash investments 10,887 Receivables - less reserve of $1,227 for uncollectibles 37,592 Accrued utility revenue 43,900 Other 48,454 ------------ Total current and accrued assets 140,833 ------------ DEFERRED DEBITS Unamortized debt expense 13,538 Other deferred debits 33,586 ------------ Total deferred debits 47,124 ------------ TOTAL ASSETS $ 1,532,293 ============ CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS CAPITALIZATION Common stockholders' equity Common stock equity, $1 par, 24,467 shares outstanding $ 338,728 Retained earnings 17,322 ------------ Total common stockholders' equity 356,050 31.1% Preferred securities - NOTE 3 60,000 5.2 Long-term debt - NOTE 4 727,945 63.7 ------------ ------------ Total capitalization 1,143,995 100.0% ------------ ============ CURRENT AND ACCRUED LIABILITIES Notes payable 37,000 Accounts payable 41,823 Customer deposits 21,406 Taxes accrued (including income taxes) 29,101 Deferred purchased gas costs 32,776 Other 48,026 ------------ Total current and accrued liabilities 210,132 ------------ DEFERRED CREDITS Deferred investment tax credits 19,874 Deferred income taxes 119,311 Other 38,981 ------------ Total deferred credits 178,166 ------------ TOTAL CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS $ 1,532,293 ============ See Notes to Summary Financial Statements. /TABLE 3
SOUTHWEST GAS CORPORATION STATEMENT OF CASH FLOWS TWELVE MONTHS ENDED DECEMBER 31, 1995 (In thousands) (Unaudited) CASH FLOWS FROM OPERATIONS: Net income (loss) $ (14,882) Adjustments to reconcile net income to net cash provided from operating activities: Depreciation and amortization 62,492 Change in gas cost related balancing items 52,790 Change in accrued taxes (13,818) Change in receivables and payables 13,490 Loss on disposition 13,023 Change in deferred taxes (15,223) Undistributed earnings from subsidiaries (1,279) Allowance for funds used during construction (1,229) Other 2,034 ------------ Net cash provided from operating activities 97,398 ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from preferred securities issuance 57,713 Change in notes payable (55,000) Net proceeds from stock issuance 44,844 Long-term debt issuance, net 47,122 Dividends paid (19,575) Retirement of preferred stock (4,000) Other (48) ------------ Net cash provided from financing activities 71,056 ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Construction expenditures (166,059) Other 2,623 ------------ Net cash used in investing activities (163,436) ------------ Change in cash and temporary cash investments 5,018 Cash at beginning of period 5,869 ------------ Cash at end of period $ 10,887 ============ SUPPLEMENTAL INFORMATION: Interest paid, net of amount capitalized $ 52,741 Income taxes, net of refunds $ 22,313 See Notes to Summary Financial Statements. /TABLE 4 NOTE 5 - ACQUISITION CARRYING COSTS, NET OF TAX:
SOUTHWEST GAS CORPORATION NOTES TO SUMMARY FINANCIAL STATEMENTS (In thousands, except par values) (Unaudited) NOTE 1 - DISCONTINUED OPERATIONS: In January 1996, the Company reached an agreement to sell PriMerit to Norwest Corporation. The discontinued operations segment includes the net income of PriMerit and its subsidiaries on a stand-alone basis as adjusted, reduced by allocated carrying costs associated with the Company's investment in PriMerit (principally interest) net of taxes. The discontinued operations segment also includes the estimated loss on the disposition. NOTE 2 - INVESTMENT IN PRIMERIT BANK: The capital structure supports both the investment in PriMerit and the investment in the gas segment. Financing costs allocable to PriMerit are determined based on the average investment in PriMerit throughout the year. NOTE 3 - PREFERRED SECURITIES: Preferred securities of SWG Capital I, $25 per security, 9.125%, 2.4 million units outstanding $ 60,000 ============ NOTE 4 - LONG-TERM DEBT: Commercial paper facility $ 200,000 Debentures: Debentures, 9% series A, due 2011 26,890 Debentures, 9% series B, due 2011 31,213 Debentures, 8.75% series C, due 2011 18,353 Debentures, 9.375% series D, due 2017 120,000 Debentures, 10% series E, due 2013 23,069 Debentures, 9.75% series F, due 2002 100,000 Industrial development revenue bonds - net of funds held in trust 218,386 Unamortized discount on long-term debt (9,966) ------------ TOTAL LONG-TERM DEBT $ 727,945 ============ ESTIMATED CURRENT MATURITIES $ 120,000 ============
YEAR ENDED DECEMBER 31, ---------------------------------------------- 1995 1994 1993 ------------ ------------ ------------ Interest expense $ (9,636) $ (7,874) $ (7,874) Other intercompany expenses (297) (286) (361) Income taxes 3,972 3,264 3,294 ------------ ------------ ------------ ACQUISITION CARRYING COSTS, NET OF TAX $ (5,961) $ (4,896) $ (4,941) ============ ============ ============ /TABLE 5
SOUTHWEST GAS CORPORATION SELECTED STATISTICAL DATA DECEMBER 31, 1995 FINANCIAL STATISTICS Market value to book value per share at year end 121% Twelve months to date return on equity -- total company (4.1)% -- gas segment 0.8% Common stock dividend yield at year end 4.7%
GAS OPERATIONS SEGMENT Authorized Authorized Authorized Return on Rate Base Rate of Common Rate Jurisdiction (In thousands) Return Equity - ----------------- -------------- -------------- -------------- Central Arizona $ 267,348 9.13% 10.75% Southern Arizona 157,620 9.12 11.00 Southern Nevada 184,673 8.89 11.55 Northern Nevada 47,695 9.16 11.55 Southern California 69,486 9.94 11.35 Northern California 8,357 10.02 11.35 Paiute Pipeline Company 61,057 10.09 12.50
SYSTEM THROUGHPUT BY CUSTOMER CLASS YEAR ENDED DECEMBER 31, ----------------------------------------------- (In dekatherms) 1995 1994 1993 - ------------------------------------------------------------------------------------------------------- Residential 42,273,436 45,966,773 43,921,257 Small commercial 22,949,195 23,572,285 22,327,742 Large commercial 8,344,066 10,306,232 11,263,387 Industrial / Other 7,021,718 8,341,530 7,543,313 Transportation 101,601,123 91,479,064 72,502,319 - ------------------------------------------------------------------------------------------------------- Total system throughput 182,189,538 179,665,884 157,558,018 =======================================================================================================
YEAR ENDED DECEMBER 31, ----------------------------------------------- HEATING DEGREE DAY COMPARISON 1995 1994 1993 - ------------------------------------------------------------------------------------------------------- Actual 2,084 2,427 2,470 Ten year average 2,326 2,387 2,401 =======================================================================================================