LAS VEGAS, Aug. 9 /PRNewswire-FirstCall/ -- Southwest Gas Corporation
(NYSE: SWX) recorded a net loss of $0.07 per share for the second quarter of
2005, a $0.17 improvement from the $0.24 per share loss reported for the
second quarter of 2004.  Net loss for the second quarter of 2005 was
$2.8 million compared to the 2004 second quarter net loss of $8.4 million.
Due to the seasonal nature of the business, net losses during the second and
third quarters are normal and not generally indicative of earnings for a
complete twelve-month period.
    According to Jeffrey W. Shaw, Chief Executive Officer, "The improvement in
operating results is primarily due to increased operating margin in Nevada and
California.  Operating margin benefited from more normal weather this quarter;
coupled with the positive impacts of customer growth, rate relief, and rate
design changes in Nevada and California.  However, Arizona returns continue to
lag, and need to improve in order for the overall financial health of the
Company to improve.  We currently have a general rate case on file in Arizona,
our largest operating area, that addresses rate relief and rate design issues
and we are hopeful of a favorable decision with new rates in place by early
2006."
    For the twelve months ended June 30, 2005, consolidated net income was
$54.1 million, or $1.48 per basic share, compared to $49.7 million, or
$1.45 per basic share, during the twelve-month period ended June 30, 2004.

                    Natural Gas Operations Segment Results

    Second Quarter
    Operating margin, defined as operating revenues less the cost of gas sold,
increased approximately $15 million, or 13 percent, in the second quarter of
2005 compared to the second quarter of 2004.  During the last twelve months,
the Company added 84,000 customers (excluding 19,000 customers associated with
the acquisition of the South Lake Tahoe service territory of Avista
Corporation), an increase of five percent.  This customer growth contributed
an incremental $5 million in operating margin during the quarter.  Incremental
rate relief in Nevada and California added $4 million in margin compared to
the prior-year.  Differences in heating demand caused by weather variations
between quarters resulted in a $6 million increase in margin.
    Operating expenses for the quarter increased $6.7 million, or six percent,
compared to the second quarter of 2004 primarily due to general cost increases
and incremental operating costs associated with serving additional customers.
Net financing costs increased $1.4 million, or seven percent, between periods
primarily due to an increase in average debt outstanding to help finance
growth and higher rates on variable-rate debt.

    Twelve Months to Date
    Operating margin increased $40 million, or seven percent, between periods.
Continuing customer growth contributed an incremental $21 million.  Rate
relief in California and Nevada added $15 million.  Differences in heating
demand caused by weather variations between periods and lower usage due to
conservation and energy efficiencies resulted in a net $4 million margin
increase.  Warmer-than-normal temperatures were experienced during both
periods.  The unfavorable impacts of these factors were approximately
$10 million in the current twelve-month period and $14 million in the prior
period.
    Operating expenses increased $31.9 million, or seven percent, between
periods reflecting general increases in labor and maintenance costs, and
incremental operating costs associated with serving additional customers.
Additional factors included increases in insurance premiums, employee-related
expenses, and compliance costs.
    Net financing costs rose $6.1 million, or seven percent, between periods
primarily due to an increase in average debt outstanding to help finance
growth and higher variable-rate interest costs.
    Southwest Gas Corporation provides natural gas service to approximately
1,663,000 customers in Arizona, Nevada and California.  Its service territory
is centered in the fastest-growing region of the country.

    This press release may contain statements which constitute
"forward-looking statements" within the meaning of the Securities Litigation
Reform Act of 1995 (Reform Act).  All such forward-looking statements are
intended to be subject to the safe harbor protection provided by the Reform
Act.  A number of important factors affecting the business and financial
results of the Company could cause actual results to differ materially from
those stated in the forward-looking statements.  These factors include, but
are not limited to, the impact of weather variations on customer usage,
customer growth rates, changes in natural gas prices, the ability to recover
costs through the PGA mechanism, the effects of regulation/deregulation, the
timing and amount of rate relief, changes in rate design, changes in gas
procurement practices, changes in capital requirements and funding, the impact
of conditions in the capital markets on financing costs, changes in
construction expenditures and financing, changes in operations and maintenance
expenses, future liability claims, changes in pipeline capacity for the
transportation of gas and related costs, acquisitions and management's plans
related thereto, competition, and the ability to raise capital in external
financings.  In addition, the Company can provide no assurance that its
discussions regarding certain trends relating to its financing, operations,
and maintenance expenses will continue in future periods.



                  SOUTHWEST GAS CONSOLIDATED EARNINGS DIGEST
                   (In thousands, except per share amounts)

     QUARTER ENDED JUNE 30,                           2005             2004
     Consolidated Operating Revenues                $361,130         $278,697
     Net Loss                                         $2,817           $8,362
     Average Number of Common Shares Outstanding      37,701           34,741
     Loss Per Share                                    $0.07            $0.24

     SIX MONTHS ENDED JUNE 30,                        2005             2004
     Consolidated Operating Revenues                $904,010         $752,097
     Net Income                                      $30,012          $32,682
     Average Number of Common Shares Outstanding       7,400           34,576
     Basic Earnings Per Share                          $0.80            $0.95
     Diluted Earnings Per Share                        $0.80            $0.94

     TWELVE MONTHS ENDED JUNE 30,                     2005             2004
     Consolidated Operating Revenues              $1,628,973       $1,323,964
     Net Income                                      $54,105          $49,749
     Average Number of Common Shares Outstanding       6,606           34,269
     Basic Earnings Per Share                          $1.48            $1.45
     Diluted Earnings Per Share                        $1.47            $1.44

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