- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 			 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 9, 1995 		 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 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ ITEM 5. OTHER EVENTS 			 FINANCIAL ANALYST REPORT 				 [LOGO] 			 SOUTHWEST GAS CORPORATION 				 			 FOURTH QUARTER 1994 				 SOUTHWEST GAS - SERVING THE FASTEST-GROWING STATES IN THE NATION Today, Southwest Gas serves one of the fastest-growing areas of the nation. Nevada and Arizona, which combined represent almost 90 percent of the Company's customer base, were national leaders in population and economic growth in 1994. According to the U. S. Bureau of Census, Nevada ranked number one in the nation in population growth in 1994 with a 5.4 percent increase, followed by Arizona at 3.3 percent. Also, in terms of percentage, Nevada led the nation in income growth and ranked second in job growth in 1994, while Arizona ranked among the top ten states in job creation and personal income growth. Judging by the number of businesses moving into Arizona, the number of gaming projects planned in Nevada, and the continued mention of these two states in national surveys and publications, this solid population growth and economic expansion can be expected to continue for many years to come. In fact, the two states are projected to be the fastest-growing states in the nation until beyond the year 2000! That's good news for Southwest Gas, because population growth and economic expansion translate into new customers for the Company. Builder commitments to use natural gas in their tracts have reached record numbers the last three years in the Company's three-state service territory. Although there is a lag from the time a builder makes a commitment until the time when the home is built and a new Southwest Gas customer is connected, the Company can look at those commitments and gauge the number of new customers it will connect in the near future, assuming economic conditions remain the same. Accumulated builder commitments could translate into the addition of as many as 60,000 new customers in 1995. The Company estimates that customer growth will average between 4 and 6 percent annually during the 1995-1997 time period, roughly two to three times the industry average. While the Company's southern Nevada service area continues to experience rapid growth, another significant driver of the Company current growth trend is in Arizona. For example, the Central Arizona Division added nearly 10,600 residential customers in 1994, compared to only 3,800 in 1993 and just 2,600 in 1992. That's a major turn-around for the Company's largest service area. Although, each new customer that signs up for service represents many years of additional margin for the Company, keeping up with this tremendous growth is also a challenge. But it's one that Southwest Gas has been meeting successfully for many years. In 1995 and beyond, the Company will continue to follow its formula for success in meeting the demands of growth. It includes equal measures of: effective planning, financing and development of the gas system; safe, efficient delivery of our product to customers; top-quality service; and a reasonable price. 					 SOUTHWEST GAS CORPORATION 					 SUMMARY STATEMENTS OF INCOME 				 (In thousands, except per share amounts) 						 (Unaudited) 									 YEAR ENDED DECEMBER 31, 								 --------------------------------------- 									 1994 1993 1992 - ------------------------------------------------------------------------------------------------------------- GAS OPERATIONS SEGMENT: Operating revenues $ 599,268 $ 538,149 $ 534,127 Net cost of gas purchased 249,922 212,290 214,152 - ------------------------------------------------------------------------------------------------------------- Operating margin 349,346 325,859 319,975 Operations and maintenance expenses 178,185 169,744 159,883 Depreciation, amortization, and general taxes 82,569 79,136 74,329 - ------------------------------------------------------------------------------------------------------------- Operating income 88,592 76,979 85,763 Net interest deductions 49,465 41,988 35,996 - ------------------------------------------------------------------------------------------------------------- Pre-tax utility income 39,127 34,991 49,767 Utility income tax expense 14,825 12,292 19,730 - ------------------------------------------------------------------------------------------------------------- Net utility income 24,302 22,699 30,037 Other income (expense), net (778) 316 2,177 Arizona pipe replacement disallowance, net --- (9,264) --- - ------------------------------------------------------------------------------------------------------------- Contribution to net income - gas operations segment 23,524 13,751 32,214 - ------------------------------------------------------------------------------------------------------------- 										 FINANCIAL SERVICES SEGMENT: Net interest income after loan loss provision 51,414 51,037 39,632 Net loss from real estate operations (612) (910) (15,286) Other income, net 10,631 12,049 15,392 General and administrative expenses 47,369 52,280 49,465 - ------------------------------------------------------------------------------------------------------------- Pre-tax income (loss) 14,064 9,896 (9,727) Income tax expense 6,391 6,345 91 - ------------------------------------------------------------------------------------------------------------- Net income (loss) before cumulative effect of accounting method change 7,673 3,551 (9,818) Cumulative effect of accounting method change --- 3,045 --- - ------------------------------------------------------------------------------------------------------------- Net income (loss) before carrying cost allocation 7,673 6,596 (9,818) Acquisition carrying costs, net of tax - NOTE 5 (4,896) (4,941) (4,735) - ------------------------------------------------------------------------------------------------------------- Contribution to net income (loss) - financial services segment 2,777 1,655 (14,553) - ------------------------------------------------------------------------------------------------------------- Net income 26,301 15,406 17,661 Preferred & preference dividends 510 741 1,051 - ------------------------------------------------------------------------------------------------------------- Net income applicable to common stock $ 25,791 $ 14,665 $ 16,610 ============================================================================================================= Earnings per share $ 1.22 $ 0.71 $ 0.81 ============================================================================================================= Earnings per share excluding disallowance $ 1.22 $ 1.15 $ 0.81 ============================================================================================================= Average outstanding common shares 21,078 20,729 20,598 ============================================================================================================= 							 				 See Notes to Summary Financial Statements. /TABLE 				 SOUTHWEST GAS CORPORATION 					 BALANCE SHEET 				 AT DECEMBER 31, 1994 					 (In thousands) 					 (Unaudited) 								 ASSETS UTILITY PLANT Gas plant, net of accumulated depreciation $ 1,001,077 Construction work in progress 33,675 									----------- Net utility plant 1,034,752 									----------- OTHER PROPERTY AND INVESTMENTS PriMerit Bank - NOTE 2 175,855 Other 31,615 									----------- Total other property and investments 207,470 									----------- CURRENT AND ACCRUED ASSETS Cash, working funds and temporary cash investments 5,869 Receivables - less reserve of $1,553 for uncollectibles 57,042 Accrued utility revenue 47,533 Deferred purchased gas costs 15,219 Other 29,215 									----------- Total current and accrued assets 154,878 									----------- DEFERRED DEBITS Unamortized debt expense 14,027 Other deferred debits 42,311 									----------- Total deferred debits 56,338 									----------- TOTAL ASSETS $ 1,453,438 									=========== 											 CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS CAPITALIZATION Common stockholders' equity Common stock equity, $1 par, 21,282 shares outstanding $ 296,129 Retained earnings 52,427 									----------- Total common stockholders' equity - NOTE 6 348,556 33.7% Preferred stock equity - NOTE 3 4,000 0.4 Long term debt - NOTE 4 683,263 65.9 									----------- ----- Total capitalization 1,035,819 100.0% 									----------- ===== CURRENT AND ACCRUED LIABILITIES Notes payable 92,000 Accounts payable 48,965 Customer deposits 22,893 Taxes accrued (including income taxes) 42,919 Deferred income taxes 6,943 Other 46,381 									----------- Total current and accrued liabilities 260,101 									----------- DEFERRED CREDITS Deferred investment tax credits 20,741 Deferred income taxes 109,634 Other 27,143 									----------- Total deferred credits 157,518 									----------- TOTAL CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS $ 1,453,438 									=========== 											 											 			 See Notes to Summary Financial Statements. /TABLE 			SOUTHWEST GAS CORPORATION 			 STATEMENT OF CASH FLOWS 		 YEAR ENDED DECEMBER 31, 1994 			 (In thousands) 			 (Unaudited) 					 CASH FLOWS FROM OPERATIONS: Net income $ 26,301 Adjustments to reconcile net income to net cash provided by operating activity: Depreciation and amortization 57,240 Change in receivables and payables (8,686) Change in accrued taxes 354 Undistributed earnings from subsidiaries (7,122) Change in gas cost related balancing items 10,607 Allowance for funds used during construction (805) Change in deferred taxes 3,691 Other 7,216 								---------- Net cash provided from operating activities 88,796 								---------- 					 CASH FLOWS FROM FINANCING ACTIVITIES: Change in notes payable 6,000 Dividends paid (17,411) Net change in long-term debt 69,062 Retirement of preferred stock (4,058) Proceeds from stock issuance 4,773 Other (224) 								---------- Net cash provided from financing activities 58,142 								---------- 					 CASH FLOWS FROM INVESTING ACTIVITIES: Construction expenditures (141,327) Other (1,785) 								---------- Net cash used in investing activities (143,112) 								---------- 					 Change in cash and temporary cash investments 3,826 Cash at beginning of period 2,043 								---------- Cash at end of period $ 5,869 								========== SUPPLEMENTAL INFORMATION: Interest paid, net of amount capitalized $ 55,167 Income taxes, net of refunds $ 2,132 					 		 See Notes to Summary Financial Statements. 			 SOUTHWEST GAS CORPORATION 		 NOTES TO SUMMARY FINANCIAL STATEMENTS 		 (In thousands, except par values) 				 (Unaudited) NOTE 1 - BASIS OF PRESENTATION: The financial statements have been prepared by Southwest Gas Corporation (the Company) using the equity method of accounting for PriMerit Bank (PriMerit). Segmented information is presented within the income statement. The Financial Services segment includes the net income of PriMerit and its subsidiaries on a stand-alone basis, reduced by allocated carrying costs associated with the Company's investment in PriMerit (principally interest) net of taxes. 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 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 two segments. NOTE 2 - INVESTMENT IN PRIMERIT BANK: 	 The financing sources for Southwest's investment in PriMerit consist 	 of approximately $62,400 of 9.375% series D debentures, $20,000 of 	 9.75% series F debentures, and 4,027 shares of common stock. NOTE 3 - PREFERRED STOCK: 	 Cumulative preferred stock, $100 par value, 9.5% series, 	 40 shares outstanding $ 4,000 								 ========= 	 CURRENT REDEMPTION REQUIREMENTS $ 800 								 ========= 							 NOTE 4 - LONG-TERM DEBT: 	 Debt refinanced with term loan bank facility 	 closed January 1995 $ 200,000 	 Debentures: 	 Debentures, 9% series A, due 2011 27,557 	 Debentures, 9% series B, due 2011 31,913 	 Debentures, 8.75% series C, due 2011 19,261 	 Debentures, 9.375% series D, due 2017 120,000 	 Debentures, 10% series E, due 2013 23,079 	 Debentures, 9.75% series F, due 2002 100,000 	 Industrial revenue bonds - net of funds held in trust 172,041 	 Unamortized discount on long-term debt (10,588) 								 --------- 	 TOTAL LONG-TERM DEBT $ 683,263 								 ========= 	 CURRENT MATURITIES $ 5,000 								 ========= NOTE 5 - ACQUISITION CARRYING COSTS, NET: 						 YEAR ENDED DECEMBER 31, 					 --------------------------------- 						 1994 1993 1992 					 --------------------------------- 	 Interest expense $ (7,874) $ (7,874) $ (7,333) 	 Other intercompany expenses (286) (361) (558) 	 Income taxes 3,264 3,294 3,156 					 --------------------------------- 	 ACQUISITION CARRYING COSTS, NET $ (4,896) $ (4,941) $ (4,735) 					 ================================= NOTE 6 - COMMON STOCKHOLDERS' EQUITY: 	 The Company's 1994 Form 10-K reports $339,089 for total stockholders' 	 equity. The $9,467 difference results from the exclusion of PriMerit's 	 unrealized loss on debt securities from common equity in these 	 statements since PriMerit is presented on the equity method of 	 accounting. 				 SOUTHWEST GAS CORPORATION 				 SELECTED STATISTICAL DATA 					 DECEMBER 31, 1994 															 															 FINANCIAL STATISTICS Market value to book value per share at year end 86% Twelve months to date return on equity -- total company 7.6% 				 -- gas segment 7.8% Common stock dividend yield at year end 5.8% 															 															 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 79,812 9.47 10.90 Northern California 5,939 9.49 10.90 Paiute Pipeline Company 61,057 10.09 11.50 															 SYSTEM THROUGHPUT BY CUSTOMER CLASS YEAR ENDED DECEMBER 31, 						 ------------------------------------------- 	(In dekatherms) 1994 1993 1992 - ----------------------------------------------------------------------------------------------- Residential 45,966,773 43,921,257 42,249,330 Small commercial 23,572,285 22,327,742 21,770,538 Large commercial 10,306,232 11,263,387 10,623,560 Industrial / Other 8,341,530 7,543,313 7,908,651 Transportation 91,479,064 72,502,319 65,114,140 - ----------------------------------------------------------------------------------------------- Total system throughput 179,665,884 157,558,018 147,666,219 =============================================================================================== HEATING DEGREE DAY COMPARISON YEAR ENDED DECEMBER 31, 						 ------------------------------------------- 							1994 1993 1992 - ----------------------------------------------------------------------------------------------- Actual 2,427 2,470 2,261 Ten year average 2,387 2,401 2,375 =============================================================================================== /TABLE 						 SOUTHWEST GAS CORPORATION 						 SUMMARY STATEMENTS OF INCOME 					 (In thousands, except per share amounts) 							 (Unaudited) 								 THREE MONTHS ENDED TWELVE MONTHS ENDED 								 DECEMBER 31, DECEMBER 31, 							 --------------------------- --------------------------- 								 1994 1993 1994 1993 							 -------- -------- -------- -------- GAS OPERATIONS SEGMENT: Operating revenues $191,461 $171,350 $599,268 $538,149 Net cost of gas purchased 70,077 56,088 249,922 212,290 							 -------- -------- -------- -------- Operating margin 121,384 115,262 349,346 325,859 Operations and maintenance expenses 46,523 42,966 178,185 169,744 Depreciation, amortization, and general taxes 21,140 19,804 82,569 79,136 							 -------- -------- -------- -------- Operating income 53,721 52,492 88,592 76,979 Net interest deductions 13,278 11,222 49,465 41,988 							 -------- -------- -------- -------- Pre-tax utility income 40,443 41,270 39,127 34,991 Utility income tax expense 15,677 14,821 14,825 12,292 							 -------- -------- -------- -------- Net utility income 24,766 26,449 24,302 22,699 Other income (expense), net (330) 425 (778) 316 Arizona pipe replacement disallowance, net --- (9,264) --- (9,264) 							 -------- -------- -------- -------- Contribution to net income - gas operations segment 24,436 17,610 23,524 13,751 							 -------- -------- -------- -------- FINANCIAL SERVICES SEGMENT: Net interest income after loan loss provision 12,669 13,641 51,414 51,037 Net income (loss) from real estate operations (614) (598) (612) (910) Non-interest income 2,142 4,156 10,631 12,049 General and administrative expenses 11,596 13,066 47,369 52,280 							 -------- -------- -------- -------- Pre-tax income 2,601 4,133 14,064 9,896 Income tax expense 1,270 1,815 6,391 6,345 							 -------- -------- -------- -------- Net income before cumulative effect of accounting method change 1,331 2,318 7,673 3,551 Cumulative effect of accounting method change --- --- --- 3,045 							 -------- -------- -------- -------- Net income before carrying cost allocation 1,331 2,318 7,673 6,596 Acquisition carrying costs, net of tax (1,230) (1,232) (4,896) (4,941) 							 -------- -------- -------- -------- Contribution to net income - financial services segment 101 1,086 2,777 1,655 							 -------- -------- -------- -------- Net income 24,537 18,696 26,301 15,406 Preferred & preference dividends 95 138 510 741 							 -------- -------- -------- -------- Net income applicable to common stock $ 24,442 $ 18,558 $ 25,791 $ 14,665 							 ======== ======== ======== ======== Earnings per share $ 1.15 $ 0.90 $ 1.22 $ 0.71 							 ======== ======== ======== ======== Earnings per share excluding disallowance $ 1.15 $ 1.34 $ 1.22 $ 1.15 							 ======== ======== ======== ======== Average outstanding common shares 21,190 20,913 21,078 20,729 							 ======== ======== ======== ======== The financial statements have been prepared by Southwest Gas Corporation (the Company) using the equity method of accounting for PriMerit Bank (PriMerit). Segmented information is presented within the income statement. The Financial Services segment includes the net income of PriMerit and its subsidiaries on a stand-alone basis, reduced by allocated carrying costs associated with the Company's investment in PriMerit (principally interest) net of taxes. 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 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 two segments. 				 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 					/s/ Edward A. Janov 				_______________________________________ 					 Edward A. Janov 				Controller and Chief Accounting Officer Date: February 9, 1995