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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



Form 10-Q



QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2002


Commission File Number 1-7850


SOUTHWEST GAS CORPORATION
(Exact name of registrant as specified in its charter)




California
(State or other jurisdiction of
incorporation or organization)


5241 Spring Mountain Road
Post Office Box 98510
Las Vegas, Nevada
(Address of principal executive offices)
  
 88-0085720
(I.R.S. Employer
Identification No.)


89193-8510
(Zip Code)


Registrant's telephone number, including area code: (702) 876-7237


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes |X|   No |_|

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date.


Common Stock, $1 Par Value, 33,204,416 shares as of November 4, 2002.





PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SOUTHWEST GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars, except par value)


SEPTEMBER 30,
2002
DECEMBER 31,
2001
ASSETS (Unaudited)
Utility plant:            
    Gas plant $ 2,722,650   $ 2,561,937  
    Less: accumulated depreciation   (856,911 )   (789,751 )
    Acquisition adjustments   2,759     2,894  
    Construction work in progress   55,427     50,491  
 
 
        Net utility plant   1,923,925     1,825,571  
 
 
Other property and investments   88,711     92,511  
 
 
Current assets:  
    Cash and cash equivalents   9,237     32,486  
    Accounts receivable, net of allowances   85,970     155,382  
    Accrued utility revenue   29,072     63,773  
    Income taxes receivable, net   25,403     26,697  
    Deferred income taxes   207     --  
    Deferred purchased gas costs   --     83,501  
    Prepaids and other current assets   47,312     38,310  
 
 
        Total current assets   197,201     400,149  
 
 
Deferred charges and other assets   50,772     51,381  
 
 
Total assets $  2,260,609   $ 2,369,612  
 
 
                             CAPITALIZATION AND LIABILITIES  
Capitalization:  
    Common stock, $1 par (authorized - 45,000,000 shares; issued  
        and outstanding - 33,161,904 and 32,492,832 shares) $ 34,792   $ 34,123  
    Additional paid-in capital   484,515     470,410  
    Retained earnings   42,480     56,667  
 
 
        Total common equity   561,787     561,200  
    Redeemable preferred securities of Southwest Gas Capital I   60,000     60,000  
    Long-term debt, less current maturities   1,098,834     796,351  
 
 
        Total capitalization   1,720,621     1,417,551  
 
 
Current liabilities:  
    Current maturities of long-term debt   6,922     307,641  
    Short-term debt   --     93,000  
    Accounts payable   51,640     109,167  
    Customer deposits   32,680     30,288  
    Accrued general taxes   33,770     32,069  
    Accrued interest   19,624     20,423  
    Deferred income taxes   --     24,154  
    Deferred purchased gas costs   28,528     --  
    Other current liabilities   38,046     36,299  
 
 
        Total current liabilities   211,210     653,041  
 
 
Deferred income taxes and other credits:  
    Deferred income taxes and investment tax credits   241,668     217,804  
    Other deferred credits   87,110     81,216  
 
 
        Total deferred income taxes and other credits   328,778     299,020  
 
 
Total capitalization and liabilities $ 2,260,609   $ 2,369,612  
 
 

The accompanying notes are an integral part of these statements.


2


SOUTHWEST GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)


  THREE MONTHS ENDED
SEPTEMBER 30,
  NINE MONTHS ENDED
SEPTEMBER 30,
  TWELVE MONTHS ENDED
SEPTEMBER 30,
  2002
   2001
   2002
   2001
   2002
   2001
  
Operating revenues:                                    
    Gas operating revenues $ 167,187   $ 188,966   $ 834,817   $ 862,482   $ 1,165,437   $ 1,158,051  
    Construction revenues   56,676     57,128     149,670     150,070     203,186     195,177  
 
 
 
 
 
 
 
        Total operating revenues   223,863     246,094     984,487     1,012,552     1,368,623     1,353,228  
 
 
 
 
 
 
 
Operating expenses:  
    Net cost of gas sold   70,060     99,113     449,345     508,282     618,610     639,157  
    Operations and maintenance   65,924     63,466     196,259     187,727     261,558     248,396  
    Depreciation and amortization   33,015     29,706     96,052     87,791     126,709     115,348  
    Taxes other than income taxes   8,673     8,070     26,482     25,009     34,253     32,140  
    Construction expenses   49,528     50,336     132,325     133,123     180,106     173,942  
 
 
 
 
 
 
 
        Total operating expenses   227,200     250,691     900,463     941,932     1,221,236     1,208,983  
 
 
 
 
 
 
 
Operating income   (3,337 )   (4,597 )   84,024     70,620     147,387     144,245  
 
 
 
 
 
 
 
Other income and (expenses):  
    Net interest deductions   (19,784 )   (20,253 )   (59,710 )   (60,780 )   (79,661 )   (80,036 )
    Preferred securities distributions   (1,368 )   (1,368 )   (4,106 )   (4,106 )   (5,475 )   (5,475 )
    Merger litigation settlement   --     --     (14,500 )   --     (14,500 )   --  
    Other income (deductions)   (2,629 )   159     3,816     4,825     7,955     4,724  
 
 
 
 
 
 
 
        Total other income and (expenses)   (23,781 )   (21,462 )   (74,500 )   (60,061 )   (91,681 )   (80,787 )
 
 
 
 
 
 
 
Income (loss) before income taxes   (27,118 )   (26,059 )   9,524     10,559     55,706     63,458  
Income tax expense (benefit)   (10,982 )   (9,571 )   3,374     4,378     18,581     24,755  
 
 
 
 
 
 
 
Net income (loss) $ (16,136 ) $ (16,488 ) $ 6,150   $ 6,181   $ 37,125   $ 38,703  
 
 
 
 
 
 
 
Basic earnings (loss) per share $ (0.49 ) $ (0.51 ) $ 0.19   $ 0.19   $ 1.13   $ 1.21  
 
 
 
 
 
 
 
Diluted earnings (loss) per share $ (0.49 ) $ (0.51 ) $ 0.19   $ 0.19   $ 1.12   $ 1.20  
 
 
 
 
 
 
 
Dividends paid per share $ 0.205   $ 0.205   $ 0.615   $ 0.615   $ 0.82   $ 0.82  
 
 
 
 
 
 
 
Average number of common shares outstanding   33,065     32,231     32,862     32,019     32,752     31,920  
Average shares outstanding (assuming dilution)   --     --     33,132     32,290     33,028     32,191  

The accompanying notes are an integral part of these statements.


3


SOUTHWEST GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of dollars)
(Unaudited)


  NINE MONTHS ENDED
SEPTEMBER 30,
  TWELVE MONTHS ENDED
SEPTEMBER 30,
  2002
   2001
   2002
   2001
  
CASH FLOW FROM OPERATING ACTIVITIES:                        
     Net income $ 6,150   $ 6,181   $ 37,125   $ 38,703  
     Adjustments to reconcile net income to net  
        cash provided by operating activities:  
          Depreciation and amortization   96,052     87,791     126,709     115,348  
          Deferred income taxes   (497 )   (13,106 )   1,434     57,235  
          Changes in current assets and liabilities:  
            Accounts receivable, net of allowances   69,412     31,676     17,963     (34,632 )
            Accrued utility revenue   34,701     31,900     (3,099 )   (1,600 )
            Deferred purchased gas costs   112,029     (20,268 )   140,860     (94,655 )
            Accounts payable   (57,527 )   (125,314 )   (17,725 )   14,140  
            Accrued taxes   2,995     26,996     (5,235 )   (14,893 )
            Other current assets and liabilities   (5,755 )   28,216     80     (25,480 )
          Other   (7,285 )   26,265     (5,422 )   24,547  
 
 
 
 
 
          Net cash provided by operating activities   250,275     80,337     292,690     78,713