EXHIBIT 99.1
SOUTHWEST GAS CORPORATION
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,
---------------------- ----------------------- -----------------------
1999 1998 1999 1998 1999 1998
---------- ---------- ----------- ----------- ----------- -----------
Gas operating revenues $ 166,679 $ 165,017 $ 445,789 $ 439,380 $ 806,006 $ 734,741
Net cost of gas sold 71,839 73,768 207,725 194,755 342,819 282,771
---------- ---------- ----------- ----------- ----------- -----------
Operating margin 94,840 91,249 238,064 244,625 463,187 451,970
Operations and maintenance expenses 55,378 52,181 108,944 103,031 215,085 206,335
Depreciation, amortization, and general taxes 28,951 27,519 58,074 54,793 115,158 107,288
---------- ---------- ----------- ----------- ----------- -----------
Operating income (loss) 10,511 11,549 71,046 86,801 132,944 138,347
Net interest deductions 14,431 15,314 29,063 31,339 60,008 63,634
Preferred securities distribution 1,369 1,369 2,738 2,738 5,475 5,475
---------- ---------- ----------- ----------- ----------- -----------
Pretax utility income (loss) (5,289) (5,134) 39,245 52,724 67,461 69,238
Utility income tax expense (benefit) (2,196) (1,962) 15,189 20,292 28,361 22,886
---------- ---------- ----------- ----------- ----------- -----------
Net utility income (loss) (3,093) (3,172) 24,056 32,432 39,100 46,352
Other income (expense), net (1,283) (54) (1,367) (1) (4,012) (7,885)
---------- ---------- ----------- ----------- ----------- -----------
Contribution to net income (loss) - gas operations (4,376) (3,226) 22,689 32,431 35,088 38,467
Contribution to net income (loss) - construction services 780 712 1,981 1,008 3,680 2,621
---------- ---------- ----------- ----------- ----------- -----------
Net income (loss) $ (3,596) $ (2,514) $ 24,670 $ 33,439 $ 38,768 $ 41,088
========== ========== =========== =========== =========== ===========
Earnings (loss) per share - gas operations $ (0.14) $ (0.12) $ 0.74 $ 1.18 $ 1.17 $ 1.41
Earnings per share - construction services 0.02 0.03 0.07 0.04 0.12 0.09
---------- ---------- ----------- ----------- ----------- -----------
Basic earnings (loss) per share $ (0.12) $ (0.09) $ 0.81 $ 1.22 $ 1.29 $ 1.50
========== ========== =========== =========== =========== ===========
Diluted earnings (loss) per share $ (0.12) $ (0.09) $ 0.80 $ 1.21 $ 1.28 $ 1.49
========== ========== =========== =========== =========== ===========
Average outstanding common shares 30,621 27,570 30,559 27,509 30,123 27,366
Average shares outstanding (assuming dilution) -- -- 30,830 27,691 30,372 27,525
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.
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------ ------------------------------
1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Gas operating revenues $ 445,789 $ 439,380 $ 806,006 $ 734,741
Net cost of gas sold 207,725 194,755 342,819 282,771
- -----------------------------------------------------------------------------------------------------------------------------------
Operating margin 238,064 244,625 463,187 451,970
Operations and maintenance expenses 108,944 103,031 215,085 206,335
Depreciation, amortization, and general taxes 58,074 54,793 115,158 107,288
- -----------------------------------------------------------------------------------------------------------------------------------
Operating income 71,046 86,801 132,944 138,347
Net interest deductions 29,063 31,339 60,008 63,634
Preferred securities distribution 2,738 2,738 5,475 5,475
- -----------------------------------------------------------------------------------------------------------------------------------
Pretax utility income 39,245 52,724 67,461 69,238
Utility income tax expense 15,189 20,292 28,361 22,886
- -----------------------------------------------------------------------------------------------------------------------------------
Net utility income 24,056 32,432 39,100 46,352
Other income (expense), net (1,367) (1) (4,012) (7,885)
- -----------------------------------------------------------------------------------------------------------------------------------
Contribution to net income - gas operations 22,689 32,431 35,088 38,467
Contribution to net income - construction services 1,981 1,008 3,680 2,621
- -----------------------------------------------------------------------------------------------------------------------------------
Net income $ 24,670 $ 33,439 $ 38,768 $ 41,088
===================================================================================================================================
Earnings per share - gas operations $ 0.74 $ 1.18 $ 1.17 $ 1.41
Earnings per share - construction services 0.07 0.04 0.12 0.09
- -----------------------------------------------------------------------------------------------------------------------------------
Basic earnings per share $ 0.81 $ 1.22 $ 1.29 $ 1.50
===================================================================================================================================
Diluted earnings per share $ 0.80 $ 1.21 $ 1.28 $ 1.49
===================================================================================================================================
Average outstanding common shares 30,559 27,509 30,123 27,366
Average shares outstanding (assuming dilution) 30,830 27,691 30,372 27,525
See Notes to Summary Financial Statements.
SOUTHWEST GAS CORPORATION
SUMMARY BALANCE SHEET
AT JUNE 30, 1999
(In thousands)
(Unaudited)
ASSETS
UTILITY PLANT
Gas plant, net of accumulated depreciation $ 1,477,647
Construction work in progress 35,107
--------------
Net utility plant 1,512,754
--------------
OTHER PROPERTY AND INVESTMENTS
Investment in construction services subsidiary 28,977
Other 43,859
--------------
Total other property and investments 72,836
--------------
CURRENT AND ACCRUED ASSETS
Cash, working funds and temporary cash investments 8,549
Receivables - less reserve of $1,664 for uncollectibles 37,210
Accrued utility revenue 23,000
Other 31,261
--------------
Total current and accrued assets 100,020
--------------
DEFERRED DEBITS
Unamortized debt expense 17,905
Other deferred debits 25,577
--------------
Total deferred debits 43,482
--------------
TOTAL ASSETS $ 1,729,092
==============
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common stockholders' equity
Common stock equity, $1 par, 30,683 shares outstanding $ 463,327
Retained earnings 31,606
--------------
Total common stockholders' equity 494,933 37.1 %
Preferred securities of Southwest Gas Capital I, 9.125% 60,000 4.5
Long-term debt - NOTE 2 780,307 58.4
-------------- -----------------
Total capitalization 1,335,240 100.0 %
-------------- =================
CURRENT AND ACCRUED LIABILITIES
Notes payable 4,320
Accounts payable 34,556
Customer deposits 25,519
Taxes accrued (including income taxes) 48,445
Deferred purchased gas costs 3,006
Other 50,494
--------------
Total current and accrued liabilities 166,340
--------------
DEFERRED CREDITS
Deferred investment tax credits 16,837
Deferred income taxes 160,302
Other 50,373
--------------
Total deferred credits 227,512
--------------
TOTAL CAPITALIZATION AND LIABILITIES $ 1,729,092
==============
See Notes to Summary Financial Statements.
SOUTHWEST GAS CORPORATION
SUMMARY STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1999
(In thousands)
(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net income $ 24,670
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 43,563
Change in receivables and payables 40,677
Change in gas cost related balancing items 60,669
Change in accrued taxes 14,744
Change in deferred taxes (18,077)
Allowance for funds used during construction (1,040)
Other (2,061)
------------
Net cash provided by operating activities 163,145
------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (94,709)
Other 3,523
------------
Net cash used in investing activities (91,186)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock issuances 6,447
Dividends paid (12,529)
Change in notes payable (47,680)
Long-term debt issuances, net 4,000
Retirement of long-term debt (27,000)
------------
Net cash used in financing activities (76,762)
------------
Change in cash and temporary cash investments (4,803)
Cash at beginning of period 13,352
------------
Cash at end of period $ 8,549
============
SUPPLEMENTAL INFORMATION:
Interest paid, net of amounts capitalized $ 29,433
Income taxes, net of refunds $ 16,807
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 - LONG-TERM DEBT:
Revolving credit facility, variable rate $ 173,000
Debentures and notes:
Debentures, 9.75% series F, due 2002 100,000
Debentures, 7.50% series, due 2006 75,000
Debentures, 8% series, due 2026 75,000
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
Medium-term notes, 6.89% series, due 2007 17,500
Medium-term notes, 6.76% series, due 2027 7,500
Medium-term notes, 6.27% series, due 2008 25,000
Industrial development revenue bonds:
Variable-rate bonds, Series A, due 2028 - net of funds held in trust 33,992
7.30% 1992 Series A, due 2027 30,000
7.50% 1992 Series B, due 2032 100,000
6.50% 1993 Series A, due 2033 75,000
Unamortized discount on long-term debt (6,685)
-------------
TOTAL LONG-TERM DEBT $ 780,307
=============
ESTIMATED CURRENT MATURITIES $ --
=============
SOUTHWEST GAS CORPORATION
SELECTED STATISTICAL DATA
JUNE 30, 1999
FINANCIAL STATISTICS
Market value to book value per share at quarter end 177%
Twelve months to date return on equity -- total company 8.2%
-- gas segment 7.8%
Common stock dividend yield at quarter end 2.9%
GAS OPERATIONS SEGMENT
Authorized
Authorized Authorized Return on
Rate Base Rate of Common
Rate Jurisdiction (In thousands) Return Equity
- -------------------------------- -------------- -------------- --------------
Arizona (1) $ 541,104 9.38% 11.25%
Southern Nevada (1) 237,165 9.50 11.55
Northern Nevada (1) 63,986 9.67 11.55
Southern California 69,486 9.94 11.35
Northern California 21,959 10.02 11.35
Paiute Pipeline Company (1) 72,054 9.69 11.60
(1) Estimated amounts based on rate case settlements.
SYSTEM THROUGHPUT BY CUSTOMER CLASS SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------ --------------------------------
(In dekatherms) 1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Residential 37,051,568 39,760,871 55,984,863 57,895,319
Small commercial 15,957,431 16,426,936 26,524,178 26,596,665
Large commercial 3,583,670 4,117,306 7,398,927 7,726,751
Industrial / Other 6,820,395 5,898,152 17,628,228 10,842,440
Transportation 56,621,625 43,892,841 112,865,980 101,434,426
- -----------------------------------------------------------------------------------------------------------------------------------
Total system throughput 120,034,689 110,096,106 220,402,176 204,495,601
===================================================================================================================================
HEATING DEGREE DAY COMPARISON
- -----------------------------------------------------------------------------------------------------------------------------------
Actual 1,432 1,709 2,038 2,358
Ten-year average 1,418 1,414 2,042 2,035
===================================================================================================================================