California
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1-7850
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88-0085720
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(State or other jurisdiction of
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(Commission
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(I.R.S. Employer
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incorporation or organization)
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File Number)
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Identification No.)
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5241 Spring Mountain Road
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Post Office Box 98510
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Las Vegas, Nevada
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89193-8510
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(Address of principal executive offices)
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(Zip Code)
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SOUTHWEST GAS CORPORATION
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Date: November 4, 2015
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/s/ GREGORY J. PETERSON
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Gregory J. Peterson
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Vice President/Controller and
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Chief Accounting Officer
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Exhibit
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No.
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Description
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99
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Press Release and summary financial information dated November 4, 2015.
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·
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Operating margin for the full year 2015 is expected to increase nearly 2% compared to 2014. Margin from customer growth should be similar to 2014. Incremental margin from California and Paiute rate case decisions, as well as new rates associated with infrastructure programs, collectively should approximate the customer growth amount.
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·
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Overall, operating expenses are anticipated to increase approximately 3% compared to 2014. Operations and maintenance expense will be negatively impacted by higher pension costs and other employee-related expenses. Depreciation and general taxes combined should increase consistent with the growth in gas plant in service.
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As a result, operating income for 2015 is forecast to fall about 1% to 2% from the $241.6 million recognized during 2014.
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·
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COLI cash surrender value changes continue to be subject to volatility, and through September, the Company has experienced a decrease (loss) of $2.6 million. More recently, during October, equity markets have rebounded, reversing previously experienced losses. Management cannot predict whether full-year COLI results will reflect income or a loss. Longer-term normal changes in COLI cash surrender values are expected to range from $3 million to $5 million of income on an annual basis.
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·
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Net interest deductions for 2015 are expected to be approximately $4 million less than the $68 million recorded in calendar-year 2014, primarily as a result of IDRB redemptions.
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Integration efforts are now largely complete.
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Revenues are expected to approximate $950 million, which is at the low end of our range of $950 million to $1 billion, due in part to the strong U.S. dollar relative to the Canadian dollar.
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Operating income is expected to be approximately 6% of revenues, excluding revenue of $18 million and a loss reserve of $7.7 million associated with the industrial construction project in Canada.
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Net interest deductions are estimated to be approximately $8 million.
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Collective expectations above are before consideration of earnings attributable to noncontrolling interests.
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Based on the above forecast, contribution to net income, assuming no recovery on the loss contract before year-end, is estimated to range between $22 million and $25 million.
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The natural gas segment is anticipated to grow margin mainly through customer growth, infrastructure tracker mechanisms, expansion projects, and California attrition. Expectations are that operating expenses (excluding any impacts positively or negatively from pension expense) and interest expense will likely offset the anticipated improvement in margin.
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Centuri has a platform that can sustain and grow its business with a strong base of utility clients, with multi-year pipe replacement programs, and as a result, revenues are anticipated to be 7% to 10% greater than expected 2015 revenues.
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Centuri’s operating income is expected to be approximately 5.5% to 6% of revenues.
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QUARTER ENDED SEPTEMBER 30,
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2015
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2014
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||||||
Consolidated Operating Revenues
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$ | 505,396 | $ | 432,475 | ||||
Net Income (Loss)
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$ | (4,734 | ) | $ | 1,970 | |||
Average Number of Common Shares Outstanding
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47,102 | 46,513 | ||||||
Earnings (Loss) Per Share
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$ | (0.10 | ) | $ | 0.04 | |||
Diluted Earnings (Loss) Per Share
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$ | (0.10 | ) | $ | 0.04 | |||
NINE MONTHS ENDED SEPTEMBER 30,
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2015 | 2014 | ||||||
Consolidated Operating Revenues
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$ | 1,778,220 | $ | 1,494,024 | ||||
Net Income
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$ | 72,198 | $ | 82,380 | ||||
Average Number of Common Shares Outstanding
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46,863 | 46,485 | ||||||
Basic Earnings Per Share
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$ | 1.54 | $ | 1.77 | ||||
Diluted Earnings Per Share
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$ | 1.53 | $ | 1.76 | ||||
TWELVE MONTHS ENDED SEPTEMBER 30,
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2015 | 2014 | ||||||
Consolidated Operating Revenues
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$ | 2,405,903 | $ | 2,032,381 | ||||
Net Income
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$ | 130,944 | $ | 139,683 | ||||
Average Number of Common Shares Outstanding
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46,777 | 46,451 | ||||||
Basic Earnings Per Share
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$ | 2.80 | $ | 3.01 | ||||
Diluted Earnings Per Share
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$ | 2.77 | $ | 2.98 |
SOUTHWEST GAS CORPORATION
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SUMMARY UNAUDITED OPERATING RESULTS
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(In thousands, except per share amounts)
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THREE MONTHS ENDED
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NINE MONTHS ENDED
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TWELVE MONTHS ENDED
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SEPTEMBER 30,
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SEPTEMBER 30,
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SEPTEMBER 30,
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2015
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2014
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2015
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2014
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2015
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2014
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Results of Consolidated Operations
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Contribution to net income (loss) - gas operations
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$ | (18,939 | ) | $ | (11,452 | ) | $ | 59,325 | $ | 62,945 | $ | 113,252 | $ | 117,797 | ||||||||||
Contribution to net income - construction services
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14,205 | 13,422 | 12,873 | 19,435 | 17,692 | 21,886 | ||||||||||||||||||
Net income (loss)
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$ | (4,734 | ) | $ | 1,970 | $ | 72,198 | $ | 82,380 | $ | 130,944 | $ | 139,683 | |||||||||||
Basic earnings (loss) per share
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$ | (0.10 | ) | $ | 0.04 | $ | 1.54 | $ | 1.77 | $ | 2.80 | $ | 3.01 | |||||||||||
Diluted earnings (loss) per share
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$ | (0.10 | ) | $ | 0.04 | $ | 1.53 | $ | 1.76 | $ | 2.77 | $ | 2.98 | |||||||||||
Average outstanding common shares
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47,102 | 46,513 | 46,863 | 46,485 | 46,777 | 46,451 | ||||||||||||||||||
Average shares outstanding (assuming dilution)
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- | 46,966 | 47,261 | 46,928 | 47,194 | 46,904 | ||||||||||||||||||
Results of Natural Gas Operations
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Gas operating revenues
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$ | 219,420 | $ | 226,027 | $ | 1,059,178 | $ | 983,999 | $ | 1,457,266 | $ | 1,356,653 | ||||||||||||
Net cost of gas sold
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64,268 | 72,987 | 427,045 | 362,349 | 570,052 | 480,608 | ||||||||||||||||||
Operating margin
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155,152 | 153,040 | 632,133 | 621,650 | 887,214 | 876,045 | ||||||||||||||||||
Operations and maintenance expense
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100,102 | 93,389 | 294,956 | 293,417 | 385,271 | 390,328 | ||||||||||||||||||
Depreciation and amortization
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52,672 | 50,533 | 159,259 | 152,540 | 210,863 | 201,896 | ||||||||||||||||||
Taxes other than income taxes
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11,652 | 11,835 | 37,063 | 34,256 | 50,059 | 45,786 | ||||||||||||||||||
Operating income (loss)
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(9,274 | ) | (2,717 | ) | 140,855 | 141,437 | 241,021 | 238,035 | ||||||||||||||||
Other income (deductions)
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(3,525 | ) | 442 | (611 | ) | 4,902 | 1,652 | 8,989 | ||||||||||||||||
Net interest deductions
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16,259 | 17,159 | 48,104 | 51,445 | 64,958 | 68,656 | ||||||||||||||||||
Income (loss) before income taxes
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(29,058 | ) | (19,434 | ) | 92,140 | 94,894 | 177,715 | 178,368 | ||||||||||||||||
Income tax expense (benefit)
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(10,119 | ) | (7,982 | ) | 32,815 | 31,949 | 64,463 | 60,571 | ||||||||||||||||
Contribution to net income (loss) - gas operations
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$ | (18,939 | ) | $ | (11,452 | ) | $ | 59,325 | $ | 62,945 | $ | 113,252 | $ | 117,797 |
SOUTHWEST GAS CORPORATION
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SELECTED STATISTICAL DATA
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SEPTEMBER 30, 2015
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FINANCIAL STATISTICS
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Market value to book value per share at quarter end
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178 | % | ||||||||||||||
Twelve months to date return on equity -- total company
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8.6 | % | ||||||||||||||
-- gas segment
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7.8 | % | ||||||||||||||
Common stock dividend yield at quarter end
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2.8 | % | ||||||||||||||
Customer to employee ratio at quarter end (gas segment)
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877 to
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1 | ||||||||||||||
GAS OPERATIONS SEGMENT
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Authorized
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Authorized
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Authorized
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Return on
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Rate Base
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Rate of
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Common
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Rate Jurisdiction
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(In thousands)
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Return
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Equity
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Arizona
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$ | 1,070,117 | 8.95 | % | 9.50 | % |
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Southern Nevada
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825,190 | 6.47 | 10.00 | |||||||||||||
Northern Nevada
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115,933 | 7.88 | 9.30 | |||||||||||||
Southern California
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159,277 | 6.83 | 10.10 | |||||||||||||
Northern California
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67,620 | 8.18 | 10.10 | |||||||||||||
South Lake Tahoe
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25,389 | 8.18 | 10.10 | |||||||||||||
Paiute Pipeline Company (1)
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87,158 | 8.46 | 11.00 | |||||||||||||
(1) Estimated amounts based on rate case settlement.
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SYSTEM THROUGHPUT BY CUSTOMER CLASS
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NINE MONTHS ENDED
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TWELVE MONTHS ENDED
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SEPTEMBER 30,
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SEPTEMBER 30,
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(In dekatherms)
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2015 | 2014 | 2015 | 2014 | ||||||||||||
Residential
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46,237,388 | 46,970,931 | 61,004,177 | 65,039,826 | ||||||||||||
Small commercial
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20,672,217 | 20,731,310 | 27,599,071 | 28,374,278 | ||||||||||||
Large commercial
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6,941,922 | 7,211,706 | 9,169,290 | 9,695,271 | ||||||||||||
Industrial / Other
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2,311,208 | 2,285,742 | 3,262,841 | 3,070,083 | ||||||||||||
Transportation
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75,365,415 | 67,868,218 | 98,166,327 | 93,587,810 | ||||||||||||
Total system throughput
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151,528,150 | 145,067,907 | 199,201,706 | 199,767,268 | ||||||||||||
HEATING DEGREE DAY COMPARISON
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Actual
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925 | 1,003 | 1,336 | 1,523 | ||||||||||||
Ten-year average
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1,289 | 1,326 | 1,778 | 1,838 | ||||||||||||
Heating degree days for prior periods have been recalculated using the current period customer mix.
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