SOUTHWEST GAS CORPORATION EXHIBIT 99
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30,
--------------------- --------------------- ---------------------
1997 1996 1997 1996 1997 1996
--------- --------- --------- --------- --------- ---------
Gas operating revenues $ 107,740 $ 102,713 $ 319,304 $ 291,065 $ 574,600 $ 528,857
Net cost of gas sold 36,723 36,688 121,322 115,157 193,745 188,947
--------- --------- --------- --------- --------- ---------
Operating margin 71,017 66,025 197,982 175,908 380,855 339,910
Operations and maintenance expenses 49,407 48,260 97,855 95,471 200,748 189,718
Depreciation, amortization, and general taxes 25,814 23,721 51,426 47,854 99,171 93,153
--------- --------- --------- --------- --------- ---------
Operating income (loss) (4,204) (5,956) 48,701 32,583 80,936 57,039
Net interest deductions 15,195 13,055 29,456 26,008 56,451 53,002
Preferred securities distribution 1,369 1,369 2,738 2,738 5,475 3,651
--------- --------- --------- --------- --------- ---------
Pretax utility income (loss) (20,768) (20,380) 16,507 3,837 19,010 386
Utility income tax expense (benefit) (8,112) (8,285) 6,328 1,124 7,201 (923)
--------- --------- --------- --------- --------- ---------
Net utility income (loss) (12,656) (12,095) 10,179 2,713 11,809 1,309
Other income (expense), net (91) (294) (390) (243) (571) (683)
--------- --------- --------- --------- --------- ---------
Contribution to net income (loss) - gas operations (12,747) (12,389) 9,789 2,470 11,238 626
Contribution to net income (loss) - construction services (1) 446 (969) 446 1,240 446
Discontinued operations - PriMerit Bank -- -- -- -- -- (18,342)
--------- --------- --------- --------- --------- ---------
Net income (loss) (12,748) (11,943) 8,820 2,916 12,478 (17,270)
Preferred dividends -- -- -- -- -- 117
--------- --------- --------- --------- --------- ---------
Net income (loss) applicable to common stock $ (12,748) $ (11,943) $ 8,820 $ 2,916 $ 12,478 $ (17,387)
========= ========= ========= ========= ========= =========
Earnings (loss) per share - gas operations $ (0.47) $ (0.48) $ 0.36 $ 0.10 $ 0.42 $ 0.02
Earnings (loss) per share - construction services -- 0.02 (0.03) 0.02 0.05 0.02
Earnings (loss) per share - discontinued operations -- -- -- -- -- (0.74)
--------- --------- --------- --------- --------- ---------
Earnings (loss) per share of common stock $ (0.47) $ (0.46) $ 0.33 $ 0.12 $ 0.47 $ (0.70)
========= ========= ========= ========= ========= =========
Average outstanding common shares 27,002 25,817 26,910 25,211 26,733 24,773
========= ========= ========= ========= ========= =========
The summary statements of income 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). However, it 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.
/TABLE
SOUTHWEST GAS CORPORATION
SUMMARY BALANCE SHEET
AT JUNE 30, 1997
(In thousands)
(Unaudited)
ASSETS
UTILITY PLANT
Gas plant, net of accumulated depreciation $ 1,286,792
Construction work in progress 32,985
------------
Net utility plant 1,319,777
------------
OTHER PROPERTY AND INVESTMENTS
Investment in construction services subsidiary 26,426
Other 43,002
------------
Total other property and investments 69,428
------------
CURRENT AND ACCRUED ASSETS
Cash, working funds and temporary cash investments 5,352
Receivables - less reserve of $1,548 for uncollectibles 25,077
Accrued utility revenue 20,541
Deferred purchased gas costs 57,476
Other 27,315
------------
Total current and accrued assets 135,761
------------
DEFERRED DEBITS
Unamortized debt expense 19,207
Other deferred debits 26,233
------------
Total deferred debits 45,440
------------
TOTAL ASSETS $ 1,570,406
============
CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS
CAPITALIZATION
Common stockholders' equity
Common stock equity, $1 par, 27,089 shares outstanding $ 383,661
Retained earnings (accumulated deficit) (152)
------------
Total common stockholders' equity 383,509 32.3%
Preferred securities of Southwest Gas Capital I, 9.125% 60,000 5.1
Long-term debt - NOTE 3 744,531 62.6
------------ --------
Total capitalization 1,188,040 100.0%
------------ ========
CURRENT AND ACCRUED LIABILITIES
Notes payable 86,000
Accounts payable 26,379
Customer deposits 21,693
Other 53,983
------------
Total current and accrued liabilities 188,055
------------
DEFERRED CREDITS
Deferred investment tax credits 18,572
Deferred income taxes 133,745
Other 41,994
------------
Total deferred credits 194,311
------------
TOTAL CAPITALIZATION, LIABILITIES AND DEFERRED CREDITS $ 1,570,406
============
See Notes to Summary Financial Statements.
/TABLE
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997
(In thousands)
(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net income $ 8,820
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization 36,315
Change in receivables and payables 29,982
Change in gas cost related balancing items (68,935)
Change in accrued taxes (13,739)
Change in deferred taxes 26,331
Allowance for funds used during construction (911)
Other 11,039
---------
Net cash provided by operating activities 28,902
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (76,712)
Other (5,296)
---------
Net cash used in investing activities (82,008)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock issuances 6,166
Dividends paid (11,020)
Change in notes payable (35,000)
Long-term debt issuances, net 92,871
---------
Net cash provided by financing activities 53,017
---------
Change in cash and temporary cash investments (89)
Cash at beginning of period 5,441
---------
Cash at end of period $ 5,352
=========
SUPPLEMENTAL INFORMATION:
Interest paid, net of amounts capitalized $ 28,359
Income taxes, net of refunds $ (2,762)
See Notes to Summary Financial Statements.
SOUTHWEST GAS CORPORATION
NOTES TO SUMMARY FINANCIAL STATEMENTS
(In thousands)
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION:
The summary 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 summary 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 loss on the disposition. The sale of PriMerit
to Norwest was completed in July 1996.
NOTE 3 - LONG-TERM DEBT:
Term loan facility $ 200,000
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
Medium-term notes:
Medium-term notes, 7.59% series, due 2017 25,000
Medium-term notes, 7.78% series, due 2022 25,000
Medium-term notes, 7.92% series, due 2027 25,000
Industrial development revenue bonds - net of funds held in trust 226,710
Unamortized discount on long-term debt (7,179)
----------
TOTAL LONG-TERM DEBT $ 744,531
==========
ESTIMATED CURRENT MATURITIES
$ --
==========
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- -------------------------
1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------
Gas operating revenues $ 319,304 $ 291,065 $ 574,600 $ 528,857
Net cost of gas sold 121,322 115,157 193,745 188,947
- -------------------------------------------------------------------------------------------------------------------------
Operating margin 197,982 175,908 380,855 339,910
Operations and maintenance expenses 97,855 95,471 200,748 189,718
Depreciation, amortization, and general taxes 51,426 47,854 99,171 93,153
- -------------------------------------------------------------------------------------------------------------------------
Operating income 48,701 32,583 80,936 57,039
Net interest deductions 29,456 26,008 56,451 53,002
Preferred securities distribution 2,738 2,738 5,475 3,651
- -------------------------------------------------------------------------------------------------------------------------
Pretax utility income 16,507 3,837 19,010 386
Utility income tax expense 6,328 1,124 7,201 (923)
- -------------------------------------------------------------------------------------------------------------------------
Net utility income 10,179 2,713 11,809 1,309
Other income (expense), net (390) (243) (571) (683)
- -------------------------------------------------------------------------------------------------------------------------
Contribution to net income (loss) - gas operations 9,789 2,470 11,238 626
Contribution to net income (loss) - construction services (969) 446 1,240 446
Discontinued operations - PriMerit Bank - NOTE 2 -- -- -- (18,342)
- -------------------------------------------------------------------------------------------------------------------------
Net income (loss) 8,820 2,916 12,478 (17,270)
Preferred dividends -- -- -- 117
- -------------------------------------------------------------------------------------------------------------------------
Net income (loss) applicable to common stock $ 8,820 $ 2,916 $ 12,478 $ (17,387)
=========================================================================================================================
Earnings per share - gas operations $ 0.36 $ 0.10 $ 0.42 $ 0.02
Earnings (loss) per share - construction services (0.03) 0.02 0.05 0.02
Earnings (loss) per share - discontinued operations -- -- -- (0.74)
- -------------------------------------------------------------------------------------------------------------------------
Earnings (loss) per share of common stock $ 0.33 $ 0.12 $ 0.47 $ (0.70)
=========================================================================================================================
Average outstanding common shares 26,910 25,211 26,733 24,773
=========================================================================================================================
See Notes to Summary Financial Statements.
/TABLE
<CSPTION>
SOUTHWEST GAS CORPORATION
SELECTED STATISTICAL DATA
JUNE 30, 1997
FINANCIAL STATISTICS
Market value to book value per share at quarter end 140%
Twelve months to date return on equity -- total company 3.3%
-- gas segment 3.2%
Common stock dividend yield at quarter end 4.1%
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 SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- --------------------------
(In dekatherms) 1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------------------
Residential 32,420,431 28,320,580 49,373,150 41,704,732
Small commercial 14,490,813 13,845,218 24,257,249 22,874,442
Large commercial 4,044,736 4,084,374 7,610,136 7,858,394
Industrial / Other 3,659,318 2,900,420 6,057,093 5,829,712
Transportation 45,544,144 42,930,403 99,434,472 97,566,915
- --------------------------------------------------------------------------------------------------------------------------
Total system throughput 100,159,442 92,080,995 186,732,100 175,834,195
==========================================================================================================================
HEATING DEGREE DAY COMPARISON
- --------------------------------------------------------------------------------------------------------------------------
Actual 1,407 1,250 2,053 1,682
Ten-year average 1,400 1,419 2,019 2,038
==========================================================================================================================
/TABLE