LAS VEGAS, Oct. 28 /PRNewswire-FirstCall/ -- Southwest Gas Corporation
(NYSE: SWX) recorded a net loss of $0.46 per share for the third quarter of
2004 compared to a $0.51 per share loss reported for the third quarter of
2003.  Net loss for the third quarter of 2004 was $16.4 million compared to
the 2003 third quarter net loss of $17.4 million.  Current period results
included a nonrecurring income tax benefit of $1.6 million, or $0.05 per
share.  Average shares outstanding increased by 1.6 million, or five percent,
due to issuances under the Company's various stock purchase plans and equity
shelf program.  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, "Natural gas
operating results, excluding the tax benefit, declined between periods as
improvements in operating margin were offset by increased operating costs.
However, there were two notable items during the quarter -- general rate
relief and record customer growth.  In August 2004, we received a decision in
the Nevada general rate case authorizing an annualized rate increase of
$13.7 million effective September 2004.  Of equal importance, as we head into
the winter heating season, the decision included improvements in rate design
to mitigate the impact of weather variations on margin."
    For the twelve months ended September 30, 2004, consolidated net income
was $50.8 million, or $1.47 per basic share, compared to $41.8 million, or
$1.25 per basic share, during the twelve-month period ended September 30,
2003.  An improvement in weather conditions between periods was the primary
reason for the increase.


                    Natural Gas Operations Segment Results

    Third Quarter
    Operating margin, defined as operating revenues less the cost of gas sold,
increased approximately $8 million, or eight percent, in the third quarter of
2004 compared to the third quarter of 2003.  Customer growth contributed an
incremental $5 million in operating margin during the quarter and rate relief
in California and Nevada added $3 million.  During the last twelve months, the
Company added a record 79,000 customers, an increase of five percent.  Another
9,000 customers were added in October 2003 with the acquisition of Black
Mountain Gas Company.
    Operating expenses for the quarter increased $11.1 million, or ten
percent, compared to the third quarter of 2003 primarily due to incremental
costs associated with record customer growth.  Additional factors include
insurance and higher employee-related and regulatory costs.  Net financing
costs rose $773,000 between periods due to an increase in average debt
outstanding to help finance growth, partially offset by interest savings
generated from debt and preferred securities instrument refinancings and a
reduction in interest costs associated with the purchased gas adjustment
account balance.

    Twelve Months to Date
    Operating margin increased $53 million, or ten percent, between periods.
Differences in heating demand caused by weather variations between periods
resulted in a $20 million margin increase as warmer-than-normal temperatures
were experienced during both periods.  During the current period, operating
margin was negatively impacted by $15 million, while in the prior period the
negative impact was $35 million.  Customer growth contributed an incremental
$21 million, while rate relief, principally in California, added $12 million.
    Operating expenses increased $31.9 million, or eight percent, primarily
reflecting incremental costs associated with servicing a growing customer base
coupled with factors previously mentioned.  Net financing costs decreased
$1.1 million, or one percent.  Interest savings generated from the refinancing
of industrial development revenue bonds and preferred securities instruments
were partially offset by costs associated with increased average debt
outstanding.
    Other income decreased $13.3 million between periods.  The prior period
reflected income of $14.6 million associated with the timing of merger-related
insurance recoveries, net of costs.  The current period includes a
$1.8 million improvement in interest income primarily associated with the
unrecovered balance of deferred purchased gas costs.

    Southwest Gas Corporation provides natural gas service to approximately
1,579,000 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, resolution of pending litigation,
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.

    Media Contact:  Roger Buehrer, Las Vegas, NV (702) 876-7132
    Shareholder Contact:  Ken Kenny, Las Vegas, NV (702) 876-7237


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

    QUARTER ENDED SEPTEMBER 30,                         2004           2003
    Consolidated Operating Revenues                 $264,467       $220,162
    Net Loss                                         $16,353        $17,407
    Average Number of Common Shares Outstanding       35,412         33,852
    Loss Per Share                                     $0.46          $0.51

    NINE MONTHS ENDED SEPTEMBER 30,                     2004           2003
    Consolidated Operating Revenues               $1,016,564       $879,299
    Net Income                                       $16,329         $4,028
    Average Number of Common Shares Outstanding       34,857         33,653
    Basic Earnings Per Share                           $0.47          $0.12
    Diluted Earnings Per Share                         $0.47          $0.12


    TWELVE MONTHS ENDED SEPTEMBER 30,                   2004           2003
    Consolidated Operating Revenues               $1,368,269     $1,215,721
    Net Income                                       $50,803        $41,843
    Average Number of Common Shares Outstanding       34,661         33,545
    Basic Earnings Per Share                           $1.47          $1.25
    Diluted Earnings Per Share                         $1.45          $1.24

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