LAS VEGAS, Nov. 2 /PRNewswire-FirstCall/ -- Southwest Gas Corporation
recorded a net loss of $0.43 per share for the third quarter of 2005, a $0.03
improvement from the $0.46 per share loss reported for the third quarter of
2004. Net loss for the third quarter of 2005 was $16.4 million, matching the
net loss of $16.4 million recorded in the third quarter of 2004. The third
quarter 2004 results included a nonrecurring income tax benefit of
$1.6 million, or $0.05 per share. The change in net loss per share resulted
from an increase in average shares outstanding of 3.1 million, or nine
percent, between the third quarters of 2004 and 2005 due to issuances under
the Company's various stock plans. Because of 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 prior-year tax benefit, improved between
quarters due to system-wide customer growth and rate relief and rate design
changes in Nevada and California. A continuing, significant focus of ours is
improving Arizona returns and in that regard we recently completed the hearing
process for the current general rate case. We presented compelling testimony
supporting our overall rate request and the need for changes in rate design.
We remain hopeful of a reasonable decision in the first quarter of 2006."
Shaw also commented on natural gas supplies and rising natural gas prices.
"We fully expect natural gas supplies to be available for the winter season,
but continue to monitor prices closely. We have also participated in
regulatory proceedings in each of our three states to address ways of
minimizing customer impacts. To that end, we are encouraging conservation,
weatherization, and use of Company-sponsored billing programs that allow for
leveling of payments."
For the twelve months ended September 30, 2005, consolidated net income
was $54 million, or $1.44 per basic share, compared to $50.8 million, or
$1.47 per basic share, during the twelve-month period ended September 30,
2004. Results for the twelve months ended September 30, 2004 included
nonrecurring income tax benefits of $3.6 million, or approximately $0.10 per
basic share.
Natural Gas Operations Segment Results
Third Quarter
Operating margin, defined as operating revenues less the cost of gas sold,
increased approximately $7 million, or seven percent, in the third quarter of
2005 compared to the third quarter of 2004. During the last twelve months,
the Company added 79,000 customers (excluding 19,000 customers associated with
the acquisition of the South Lake Tahoe service territory of Avista
Corporation), an increase of five percent. Customer growth contributed an
incremental $4 million in operating margin during the quarter. Incremental
rate relief in Nevada and California added $3 million in margin compared to
the prior year.
Operating expenses for the quarter increased $5.3 million, or five
percent, compared to the third quarter of 2004 primarily due to general cost
increases and incremental operating costs associated with serving additional
customers.
Twelve Months to Date
Operating margin increased approximately $39 million, or seven percent,
between periods. Continuing customer growth contributed an incremental
$20 million. Rate relief in California and Nevada added $15 million.
Differences in heating demand caused by weather variations between periods,
net of 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 $26.1 million, or six percent, between
periods reflecting general increases in operations and maintenance costs as
well as incremental costs (including depreciation and general taxes)
associated with serving additional customers. Additional factors included
increases in insurance premiums, uncollectible expenses, employee-related
expenses, and compliance costs.
Net financing costs rose $5.9 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
1,677,000 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 SEPTEMBER 30, 2005 2004
Consolidated Operating Revenues $313,278 $264,467
Net Loss $16,444 $16,353
Average Number of Common Shares Outstanding 38,528 35,412
Loss Per Share $0.43 $0.46
NINE MONTHS ENDED SEPTEMBER 30, 2005 2004
Consolidated Operating Revenues $1,217,288 $1,016,564
Net Income $13,568 $16,329
Average Number of Common Shares Outstanding 37,780 34,857
Basic Earnings Per Share $0.36 $0.47
Diluted Earnings Per Share $0.36 $0.47
TWELVE MONTHS ENDED SEPTEMBER 30, 2005 2004
Consolidated Operating Revenues $1,677,784 $1,368,269
Net Income $54,014 $50,803
Average Number of Common Shares Outstanding 37,392 34,661
Basic Earnings Per Share $1.44 $1.47
Diluted Earnings Per Share $1.43 $1.45
SOURCE Southwest Gas Corporation
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Related links:
http://www.swgas.com
CONTACT:
Media, Cynthia Messina, +1-702-876-7132, or
Shareholders, Ken Kenny, +1-702-876-7237, both of Southwest Gas
Corporation
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