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,
---------------------- ----------------------
1996 1995 1996 1995
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Gas operating revenues $ 376,599 $ 417,143 $ 522,958 $ 608,604
Net cost of gas purchased 139,184 184,639 182,001 254,716
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Operating margin 237,415 232,504 340,957 353,888
Operations and maintenance expenses 144,557 140,287 192,239 186,808
Depreciation, amortization, and general taxes 72,231 67,476 94,420 88,616
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Operating income 20,627 24,741 54,298 78,464
Net interest deductions 39,328 39,657 53,025 52,936
Preferred securities distribution 4,106 -- 5,019 --
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Pretax utility income (loss) (22,807) (14,916) (3,746) 25,528
Utility income tax expense (benefit) (9,321) (6,451) (2,012) 9,226
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Net utility income (loss) (13,486) (8,465) (1,734) 16,302
Other income (expense), net (300) (390) (543) (721)
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Contribution to net income (loss) - gas operations (13,786) (8,855) (2,277) 15,581
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Equity in earnings of construction services subsidiary 2,391 -- 2,391 --
Acquisition carrying costs, net of tax (327) -- (327) --
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Contribution to net income (loss) - construction services 2,064 -- 2,064 --
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Discontinued operations - PriMerit Bank - NOTE 2 -- 1,328 (18,864) 1,429
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Net income (loss) (11,722) (7,527) (19,077) 17,010
Preferred & preference dividends -- 285 22 380
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Net income (loss) applicable to common stock $ (11,722) $ (7,812) $ (19,099) $ 16,630
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Earnings (loss) per share from gas operations $ (0.54) $ (0.40) $ (0.09) $ 0.68
Earnings per share from construction services 0.08 -- 0.08 --
Earnings (loss) per share from discontinued operations -- 0.06 (0.74) 0.06
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Earnings (loss) per share of common stock $ (0.46) $ (0.34) $ (0.75) $ 0.74
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Average outstanding common shares 25,636 22,768 25,382 22,370
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See Notes to Summary Financial Statements.
2
SOUTHWEST GAS CORPORATION
SUMMARY BALANCE SHEET
AT SEPTEMBER 30, 1996
(In thousands)
(Unaudited)
ASSETS
UTILITY PLANT
Gas plant, net of accumulated depreciation $ 1,187,432
Construction work in progress 39,077
------------
Net utility plant 1,226,509
------------
OTHER PROPERTY AND INVESTMENTS
Investment in discontinued operations - PriMerit Bank - NOTE 2 --
Investment in construction services subsidiary 26,549
Other 41,547
------------
Total other property and investments 68,096
------------
CURRENT AND ACCRUED ASSETS
Cash, working funds and temporary cash investments 3,252
Receivables - less reserve of $1,381 for uncollectibles 18,420
Accrued utility revenue 20,287
Other 48,622
------------
Total current and accrued assets 90,581
------------
DEFERRED DEBITS
Unamortized debt expense 19,756
Other deferred debits 34,382
------------
Total deferred debits 54,138
------------
TOTAL ASSETS $ 1,439,324
============
CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS
CAPITALIZATION
Common stockholders' equity
Common stock equity, $1 par, 26,566 shares outstanding $ 373,750
Retained earnings (accumulated deficit) (10,683)
------------
Total common stockholders' equity 363,067 33.8%
Preferred securities of Southwest Gas Capital I, 9.125% 60,000 5.6
Long-term debt - NOTE 3 652,182 60.6
------------ -----
Total capitalization 1,075,249 100.0%
------------ =====
CURRENT AND ACCRUED LIABILITIES
Notes payable 38,000
Accounts payable 24,319
Customer deposits 20,946
Taxes accrued (including income taxes) 20,971
Deferred purchased gas costs 39,552
Other 33,851
------------
Total current and accrued liabilities 177,639
------------
DEFERRED CREDITS
Deferred investment tax credits 19,223
Deferred income taxes 125,831
Other 41,382
------------
Total deferred credits 186,436
------------
TOTAL CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS $ 1,439,324
============
See Notes to Summary Financial Statements.
3
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1996
(In thousands)
(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net income (loss) $ (11,722)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 50,003
Change in receivables and payables 21,634
Change in gas cost related balancing items 7,659
Change in accrued taxes (8,130)
Change in deferred taxes 2,802
Allowance for funds used during construction (1,358)
Other (1,237)
----------
Net cash provided by operating activities 59,651
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (141,171)
Investment in construction services subsidiary (24,158)
Proceeds from sale of bank 191,662
Other (24,877)
----------
Net cash provided by investing activities 1,456
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock issuances 11,022
Stock issuance - construction services acquisition 24,000
Dividends paid (15,852)
Change in notes payable 1,000
Long-term debt issuance, net 155,486
Long-term debt retirements (244,398)
----------
Net cash used in financing activities (68,742)
----------
Change in cash and temporary cash investments (7,635)
Cash at beginning of period 10,887
----------
Cash at end of period $ 3,252
==========
SUPPLEMENTAL INFORMATION:
Interest paid, net of amounts capitalized $ 47,141
Income taxes paid, net of refunds $ 18,186
See Notes to Summary Financial Statements.
4
SOUTHWEST GAS CORPORATION
NOTES TO SUMMARY FINANCIAL STATEMENTS
(In thousands)
(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 its construction
services subsidiary. 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 operating segments.
NOTE 2 - DISCONTINUED OPERATIONS:
In January 1996, the Company reached an agreement to sell PriMerit Bank
(PriMerit) to Norwest Corporation. Discontinued operations 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. Discontinued
operations also includes the estimated loss on the disposition. The sale
of PriMerit to Norwest was completed in July 1996.
NOTE 3 - LONG-TERM DEBT:
Commercial paper facility $ 184,000
Debentures:
Debentures, 9.75% series F, due 2002 100,000
Debentures, 7 1/2% series, due 2006 75,000
Debentures, 8% series, due 2026 75,000
Industrial development revenue bonds - net of funds held in trust 225,057
Unamortized discount on long-term debt (6,875)
---------
TOTAL LONG-TERM DEBT $ 652,182
=========
ESTIMATED CURRENT MATURITIES $ --
=========
5
SOUTHWEST GAS CORPORATION
SELECTED STATISTICAL DATA
SEPTEMBER 30, 1996
FINANCIAL STATISTICS
Market value to book value per share at quarter end 128%
Twelve months to date return on equity -- total company (5.1)%
-- gas segment (0.7)%
Common stock dividend yield at quarter 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 237,165 9.50 11.55
Northern Nevada 63,986 9.67 11.55
Southern California 69,486 9.94 11.35
Northern California 9,521 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) 1996 1995 1996 1995
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Residential 32,797,699 33,353,107 41,718,026 46,149,190
Small commercial 17,470,268 17,499,110 22,920,354 23,928,594
Large commercial 5,890,686 6,631,610 7,603,142 8,960,538
Industrial / Other 4,046,550 5,464,247 5,604,019 7,708,746
Transportation 74,153,452 78,567,084 97,187,490 100,930,733
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Total system throughput 134,358,655 141,515,158 175,033,031 187,677,801
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HEATING DEGREE DAY COMPARISON
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Actual 1,280 1,381 1,680 2,106
Ten year average 1,445 1,432 2,032 2,038
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