1 EXHIBIT 99
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- --------------------
1995 1994 1995 1994
-------- -------- -------- --------
GAS OPERATIONS SEGMENT:
Operating revenues $417,143 $407,808 $608,604 $579,158
Net cost of gas purchased 184,639 179,846 254,716 235,934
-------- -------- -------- --------
Operating margin 232,504 227,962 353,888 343,224
Operations and maintenance expenses 140,287 131,662 186,808 174,629
Depreciation, amortization, and general taxes 67,476 61,430 88,616 81,233
-------- -------- -------- --------
Operating income 24,741 34,870 78,464 87,362
Net interest deductions 39,657 36,187 52,936 47,408
-------- -------- -------- --------
Pre-tax utility income (loss) (14,916) (1,317) 25,528 39,954
Utility income tax expense (benefit) (6,451) (853) 9,226 13,969
-------- -------- -------- --------
Net utility income (loss) (8,465) (464) 16,302 25,985
Other income (expense), net (390) (165) (721) 260
Arizona pipe replacement disallowance, net --- (283) --- (9,547)
-------- -------- -------- --------
Contribution to net income (loss) - gas operations segment (8,855) (912) 15,581 16,698
-------- -------- -------- --------
FINANCIAL SERVICES SEGMENT:
Net interest income after loan loss provision 39,124 38,745 51,793 52,386
Net income (loss) from real estate operations (316) 2 (930) (596)
Other income, net 8,241 8,489 10,383 12,645
General and administrative expenses 36,528 35,773 48,124 48,839
-------- -------- -------- --------
Pre-tax income 10,521 11,463 13,122 15,596
Income tax expense 4,726 5,121 5,996 6,936
-------- -------- -------- --------
Net income before carrying cost allocation 5,795 6,342 7,126 8,660
Acquisition carrying costs, net of tax - NOTE 5 (4,467) (3,666) (5,697) (4,897)
-------- -------- -------- --------
Contribution to net income - financial services segment 1,328 2,676 1,429 3,763
-------- -------- -------- --------
Net income (loss) (7,527) 1,764 17,010 20,461
Preferred & preference dividends 285 415 380 554
-------- -------- -------- --------
Net income (loss) applicable to common stock $ (7,812) $ 1,349 $ 16,630 $ 19,907
======== ======== ======== ========
Earnings (loss) per share $ (0.34) $ 0.06 $ 0.74 $ 0.95
======== ======== ======== ========
Earnings (loss) per share excluding disallowances --- $ 0.07 --- $ 1.40
======== ======== ======== ========
Average outstanding common shares 22,768 21,040 22,370 21,008
======== ======== ======== ========
See Notes to Summary Financial Statements.
2
SOUTHWEST GAS CORPORATION
BALANCE SHEET
AT SEPTEMBER 30, 1995
(In thousands)
(Unaudited)
ASSETS
UTILITY PLANT
Gas plant, net of accumulated depreciation $1,079,316
Construction work in progress 23,966
----------
Net utility plant 1,103,282
----------
OTHER PROPERTY AND INVESTMENTS
PriMerit Bank - NOTE 2 181,150
Other 35,547
----------
Total other property and investments 216,697
----------
CURRENT AND ACCRUED ASSETS
Cash, working funds and temporary cash investments 7,096
Receivables - less reserve of $1,025 for uncollectibles 19,132
Accrued utility revenue 19,044
Other 42,046
----------
Total current and accrued assets 87,318
----------
DEFERRED DEBITS
Unamortized debt expense 13,779
Other deferred debits 38,227
----------
Total deferred debits 52,006
----------
TOTAL ASSETS $1,459,303
==========
CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS
CAPITALIZATION
Common stockholders' equity
Common stock equity, $1 par, 24,230 shares outstanding $ 336,713
Retained earnings 29,828
----------
Total common stockholders' equity - NOTE 6 366,541 33.9%
Preferred stock equity - NOTE 3 4,000 0.4
Long-term debt - NOTE 4 711,010 65.7
---------- -----
Total capitalization 1,081,551 100.0%
---------- -----
CURRENT AND ACCRUED LIABILITIES
Notes payable 56,000
Accounts payable 20,720
Customer deposits 21,208
Taxes accrued (including income taxes) 31,464
Deferred purchased gas costs 35,752
Other 47,649
----------
Total current and accrued liabilities 212,793
----------
DEFERRED CREDITS
Deferred investment tax credits 20,089
Deferred income taxes 118,094
Other 26,776
----------
Total deferred credits 164,959
----------
TOTAL CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS $1,459,303
==========
See Notes to Summary Financial Statements.
3
SOUTHWEST GAS CORPORATION
STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995
(In thousands)
(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net income (loss) $ (7,527)
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization 47,204
Change in receivables and payables 34,410
Change in accrued taxes (36,119)
Undistributed earnings from subsidiaries (5,717)
Change in gas cost related balancing items 56,745
Allowance for funds used during construction (918)
Change in deferred taxes 7,808
Other 6,793
---------
Net cash provided from operating activities 102,679
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in notes payable (36,000)
Dividends paid (14,468)
Net change in long-term debt 27,280
Net proceeds from stock issuance 40,584
Other (604)
---------
Net cash provided from financing activities 16,792
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (116,596)
Other (1,648)
---------
Net cash used in investing activities (118,244)
---------
Change in cash and temporary cash investments 1,227
Cash at beginning of period 5,869
---------
Cash at end of period $ 7,096
=========
SUPPLEMENTAL INFORMATION:
Interest paid, net of amount capitalized $ 48,375
Income taxes, net of refunds $ 26,143
See Notes to Summary Financial Statements.
4
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 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 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 investment in PriMerit under the equity
method.
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:
Commercial paper facility $ 200,000
Debentures:
Debentures, 9% series A, due 2011 26,895
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 revenue bonds - net of funds held in trust 201,602
Unamortized discount on long-term debt (10,122)
-----------
TOTAL LONG-TERM DEBT $ 711,010
===========
CURRENT MATURITIES $ 5,000
===========
NOTE 5 - ACQUISITION CARRYING COSTS, NET:
NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
1995 1994 1995 1994
--------- --------- --------- ---------
Interest expense $ (7,227) $ (5,904) $ (9,195) $ (7,873)
Other intercompany expenses (218) (206) (301) (289)
Income taxes 2,978 2,444 3,799 3,265
--------- --------- --------- ---------
ACQUISITION CARRYING COSTS, NET $ (4,467) $ (3,666) $ (5,697) $ (4,897)
========= ========= ========= =========
NOTE 6 - COMMON STOCKHOLDERS' EQUITY:
For purposes of this report, common stockholders' equity excludes
PriMerit's unrealized gain on debt securities available for sale since
PriMerit is presented on the equity method of accounting.
/TABLE
5
SOUTHWEST GAS CORPORATION
SELECTED STATISTICAL DATA
SEPTEMBER 30, 1995
FINANCIAL STATISTICS
Book value per share at quarter end - NOTE 6 $15.13
Market value to book value per share at quarter end 103%
Twelve months to date return on equity -- total company 4.6%
-- gas segment 5.2%
Common stock dividend yield at quarter end 5.2%
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 NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
(In dekatherms) 1995 1994 1995 1994
----------- ----------- ----------- -----------
Residential 33,353,107 33,170,690 46,149,190 44,669,464
Small commercial 17,499,110 17,142,799 23,928,594 23,036,438
Large commercial 6,631,610 7,977,308 8,960,538 10,763,075
Industrial / Other 5,464,247 6,097,028 7,708,746 7,784,681
Transportation 78,567,084 69,115,417 100,930,733 88,210,595
----------- ----------- ----------- -----------
Total system throughput 141,515,158 133,503,242 187,677,801 174,464,253
=========== =========== =========== ===========
HEATING DEGREE DAY COMPARISON
Actual 1,590 1,593 2,434 2,326
Ten year average 1,645 1,681 2,351 2,387