California
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001-37976
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81‑3881866
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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 HOLDINGS, INC.
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Date: November 6, 2018
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/s/ LORI L. COLVIN
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Lori L. Colvin
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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 6, 2018.
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·
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Operating margin for the full year 2018 is anticipated to benefit from customer growth (similar to 2017), infrastructure tracker mechanisms, expansion projects, and California attrition. Combined, these items are expected to produce nearly 2% in incremental margin compared to 2017. Operating margin (but not net income overall) in 2018 is expected to include a reduction of approximately $20 million due to tax reform benefits in 2018 planned to be returned to customers. Income tax expense will also be reduced due to benefits of the reduction in the U.S. corporate federal income tax rate.
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·
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On a comparative basis, operations and maintenance expense is expected to track generally with inflationary changes and customer growth rates (combined approximately 3%) plus the impacts of a
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·
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On a comparative basis (excluding the effect of lower income tax rates on operating margin), operating income is expected to be relatively flat to modestly higher between years.
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·
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Net interest deductions for 2018 are expected to increase by $10 million to $12 million compared to 2017 primarily due to an increase in outstanding debt associated with ongoing capital expenditures.
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·
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Changes in cash surrender values of COLI policies will continue to be subject to volatility. Management generally anticipates longer term normal increases in COLI cash surrender values to range from $3 million to $5 million on an annual basis.
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·
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The one-time benefit from tax reform due to remeasurement of deferred tax balances in 2017 will not recur.
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·
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Capital expenditures in 2018 are estimated to be approximately $670 million, in support of customer growth, system improvements, and accelerated pipe replacement programs.
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·
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Centuri has a strong base of large utility clients (many with multi-year pipe replacement programs) that are expected to sustain, and over time, grow its business. Revenues for 2018 are anticipated to be 12% to 16% greater than 2017 levels.
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·
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Operating income is expected to be approximately 5% to 5.5% of revenues.
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·
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Based on the current interest rate environment, net interest deductions for 2018 are expected to be between $13 million and $14 million.
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·
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Changes in foreign exchange rates could influence results.
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QUARTER ENDED SEPTEMBER 30,
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2018
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2017
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||||||
Consolidated Operating Revenues
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$
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668,146
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$
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593,153
|
||||
Net Income applicable to Southwest Gas Holdings
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$
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12,331
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$
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10,204
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||||
Average Number of Common Shares
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49,493
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47,628
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||||||
Basic Earnings Per Share
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$
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0.25
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$
|
0.21
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||||
Diluted Earnings Per Share
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$
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0.25
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$
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0.21
|
||||
Reconciliation of Revenue to Operating Margin (Non-GAAP measure)
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||||||||
Natural Gas Segment Revenues
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$
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217,523
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$
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213,059
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||||
Less: Net Cost of Gas Sold
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49,903
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45,539
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||||||
Operating Margin
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$
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167,620
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$
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167,520
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||||
NINE MONTHS ENDED SEPTEMBER 30,
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2018 | 2017 | ||||||
Consolidated Operating Revenues
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$
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2,093,359
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$
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1,808,359
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||||
Net Income applicable to Southwest Gas Holdings
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$
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112,973
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$
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97,376
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||||
Average Number of Common Shares
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48,916
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47,577
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||||||
Basic Earnings Per Share
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$
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2.31
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$
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2.05
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||||
Diluted Earnings Per Share
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$
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2.31
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$
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2.03
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||||
Reconciliation of Revenue to Operating Margin (Non-GAAP measure)
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||||||||
Natural Gas Segment Revenues
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$
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987,515
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$
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935,823
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||||
Less: Net Cost of Gas Sold
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319,101
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261,839
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||||||
Operating Margin
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$
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668,414
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$
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673,984
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TWELVE MONTHS ENDED SEPTEMBER 30,
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2018
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2017
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||||||
Consolidated Operating Revenues
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$
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2,833,792
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$
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2,449,884
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||||
Net Income applicable to Southwest Gas Holdings
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$
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209,438
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$
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162,556
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||||
Average Number of Common Shares
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48,728
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47,553
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||||||
Basic Earnings Per Share
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$
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4.30
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$
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3.42
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||||
Diluted Earnings Per Share
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$
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4.29
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$
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3.39
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||||
Reconciliation of Revenue to Operating Margin (Non-GAAP measure)
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||||||||
Natural Gas Segment Revenues
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$
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1,354,000
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$
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1,276,308
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||||
Less: Net Cost of Gas Sold
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412,307
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334,888
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||||||
Operating Margin
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$
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941,693
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$
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941,420
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SOUTHWEST GAS HOLDINGS, INC.
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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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||||||||||||||||||||||
2018
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2017
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2018
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2017
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2018
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2017
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|||||||||||||||||||
Results of Consolidated Operations
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||||||||||||||||||||||||
Contribution to net income (loss) - gas operations
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$
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(13,670
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)
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$
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(4,024
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)
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$
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79,301
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$
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82,436
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$
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153,683
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$
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134,323
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||||||||||
Contribution to net income - infrastructure services
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26,798
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14,335
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35,034
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15,717
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57,677
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29,010
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||||||||||||||||||
Corporate and administrative
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(797
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)
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(107
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)
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(1,362
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)
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(777
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)
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(1,922
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)
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(777
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)
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||||||||||||
Net income
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$
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12,331
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$
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10,204
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$
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112,973
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$
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97,376
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$
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209,438
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$
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162,556
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||||||||||||
Basic earnings per share
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$
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0.25
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$
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0.21
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$
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2.31
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$
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2.05
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$
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4.30
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$
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3.42
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||||||||||||
Diluted earnings per share
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$
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0.25
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$
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0.21
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$
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2.31
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$
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2.03
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$
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4.29
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$
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3.39
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||||||||||||
Average common shares
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49,493
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47,628
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48,916
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47,577
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48,728
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47,553
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||||||||||||||||||
Average shares (assuming dilution)
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49,553
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47,986
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48,968
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47,912
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48,781
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47,896
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||||||||||||||||||
Results of Natural Gas Operations
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||||||||||||||||||||||||
Gas operating revenues
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$
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217,523
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$
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213,059
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$
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987,515
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$
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935,823
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$
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1,354,000
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$
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1,276,308
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||||||||||||
Net cost of gas sold
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49,903
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45,539
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319,101
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261,839
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412,307
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334,888
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||||||||||||||||||
Operating margin
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167,620
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167,520
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668,414
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673,984
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941,693
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941,420
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||||||||||||||||||
Operations and maintenance expense
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104,657
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97,359
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312,055
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298,827
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404,549
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393,632
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||||||||||||||||||
Depreciation and amortization
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47,924
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46,194
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145,549
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153,643
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193,828
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212,693
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||||||||||||||||||
Taxes other than income taxes
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15,036
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14,046
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44,959
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43,325
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59,580
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56,221
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||||||||||||||||||
Operating income
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3
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9,921
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165,851
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178,189
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283,736
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278,874
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||||||||||||||||||
Other income (deductions)
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836
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(1,775
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)
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(5,861
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)
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(5,824
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)
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(6,425
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)
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(9,200
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)
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|||||||||||||
Net interest deductions
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20,399
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17,421
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59,803
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51,622
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77,914
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69,464
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||||||||||||||||||
Income (loss) before income taxes
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(19,560
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)
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(9,275
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)
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100,187
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120,743
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199,397
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200,210
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||||||||||||||||
Income tax expense (benefit)
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(5,890
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)
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(5,251
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)
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20,886
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38,307
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45,714
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65,887
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||||||||||||||||
Contribution to net income (loss) - gas operations
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$
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(13,670
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)
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$
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(4,024
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)
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$
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79,301
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$
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82,436
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$
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153,683
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$
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134,323
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||||||||||
SOUTHWEST GAS HOLDINGS, INC.
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||||||||||||||||
SELECTED STATISTICAL DATA
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||||||||||||||||
SEPTEMBER 30, 2018
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||||||||||||||||
FINANCIAL STATISTICS
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||||||||||||||||
Market value to book value per share at quarter end
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201
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%
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||||||||||||||
Twelve months to date return on equity -- total company
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11.3
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%
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||||||||||||||
-- gas segment
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9.3
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%
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||||||||||||||
Common stock dividend yield at quarter end
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2.6
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%
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||||||||||||||
Customer to employee ratio at quarter end (gas segment)
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883 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
|
|||||||||||||
Arizona
|
$
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1,324,902
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7.42
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%
|
9.50
|
% |
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|||||||||
Southern Nevada
|
825,190
|
6.55
|
10.00
|
|||||||||||||
Northern Nevada
|
115,933
|
7.88
|
9.30
|
|||||||||||||
Southern California
|
159,277
|
6.83
|
10.10
|
|||||||||||||
Northern California
|
67,620
|
8.18
|
10.10
|
|||||||||||||
South Lake Tahoe
|
25,389
|
8.18
|
10.10
|
|||||||||||||
Paiute Pipeline Company (1)
|
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
|
TWELVE MONTHS ENDED
|
|||||||||||||||
SEPTEMBER 30,
|
SEPTEMBER 30,
|
|||||||||||||||
(In dekatherms)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Residential
|
51,451,146
|
52,686,233
|
66,192,054
|
68,487,722
|
||||||||||||
Small commercial
|
22,470,986
|
22,517,956
|
29,720,732
|
29,785,014
|
||||||||||||
Large commercial
|
7,031,675
|
6,982,756
|
9,305,024
|
9,141,347
|
||||||||||||
Industrial / Other
|
2,798,927
|
2,467,513
|
3,713,018
|
3,267,840
|
||||||||||||
Transportation
|
79,636,397
|
75,374,535
|
101,702,526
|
97,341,909
|
||||||||||||
Total system throughput
|
163,389,131
|
160,028,993
|
210,633,354
|
208,023,832
|
||||||||||||
HEATING DEGREE DAY COMPARISON
|
||||||||||||||||
Actual
|
1,049
|
1,145
|
1,380
|
1,580
|
||||||||||||
Ten-year average
|
1,212
|
1,250
|
1,692
|
1,745
|
||||||||||||
Heating degree days for prior periods have been recalculated using the current period customer mix.
|