Earnings Labs

Southwest Gas Holdings, Inc. (SWX)

Q1 2014 Earnings Call· Mon, May 12, 2014

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Transcript

Operator

Operator

Good day, ladies and gentlemen, and welcome to the Southwest Gas 2014 First Quarter Earnings Conference Call. My name is Estaban, and I will be your operator for today. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ken Kenny, Vice President, Finance and Treasurer.

Kenneth Kenny

Management

Jeffrey Shaw

Management

Roy Centrella

Management

John Hester

Management

Jeffrey Shaw

Management

Kenneth Kenny

Management

Operator

Operator

(Operator Instructions) Looks like our first question comes from Matt Tucker with KeyBanc Capital Markets. Matt Tucker – KeyBanc Capital Markets: Hi, gentlemen good afternoon. First question is on the legal accrual. You mentioned an incident and it sounded like unfortunately someone may have been hurt. Is there anything more you can tell us about the nature of this incident and was it one incident, or multiple incidents? : Matt, it’s our general practice to not comment on potential pending legal matters. I think the important thing to remember is that the $5 million accrual we took in the first quarter of this year is unusual. It’s not that bad things don’t happen. It’s just that they just don’t happen to this extent on a frequent basis. So obviously by virtue of the fact we made that accrue, we are expecting future costs that we would need to pay and so therefore we made the accrual. And again we have insurance for above a certain amount and we have accrued up to that amount for that particular incident. That’s about all that we really can comment on.

Jeffrey Shaw

Management

Matt Tucker – KeyBanc Capital Markets: Okay. I understand the sensitivity. Would it be fair to say this was a safety issue and can you tell us whether, if there were injuries, whether it was an employee injured versus a customer or third party?

Jeffrey Shaw

Management

Matt Tucker – KeyBanc Capital Markets: Okay, fair enough. Thank you. At NPL, I guess outside of the weather issues, which I think for anyone else who lives in the Northeast are fairly understandable. Would you say that underlying margins would have been intact? And I guess another way of asking it maybe would be, are you seeing any changing in pricing?

Jeffrey Shaw

Management

Matt Tucker – KeyBanc Capital Markets: Okay. And would you be able to give us ballpark sense, quantify possibly how much work in terms of revenue that you expected to incur in the first quarter was pushed out due to weather?

Jeffrey Shaw

Management

Matt Tucker – KeyBanc Capital Markets: Okay and just last question. Equipment sales at NPL provided a nice small offset to cost there. We've seen that occasionally over the past few quarters. Can you just talk about how much is left to do there? Should we continue to expect this to be a slight tailwind going forward?

Jeffrey Shaw

Management

Roy Centrella

Management

It’s is a little bit of -- they closed one of their offices or at least part of the business in one of the offices. And so that led to some equipment sales during the period that may not have occurred otherwise. But over the course of the year you will probably see them, similar to last year. Matt Tucker – KeyBanc Capital Markets: Okay. Thanks guys. That's helpful. I'll jump back in the queue.

Operator

Operator

(Operator Instructions) The next question comes from Matt Tucker with KeyBanc Capital Markets. Matt Tucker – KeyBanc Capital Markets: Customer growth came in pretty close to your guidance for the full year. Maybe you could just comment on the economic outlook in your core territory and any changes you’ve noticed since the last call?

Jeffrey Shaw

Management

Matt Tucker – KeyBanc Capital Markets: Thanks, Jeff. That's great color. Next question, the proposed – the LNG facility you guys proposed in Arizona in January, I don't think you’re expecting a decision by now. But I guess any update on the process there at the ACC?

Jeffrey Shaw

Management

John Hester

Management

Matt Tucker – KeyBanc Capital Markets: Thanks, guys. Last question on the California rate case. I guess, do you have a sense for how maybe unusual it is to have an alternative proposed decision come out late in the game like it seems to have here? And are you aware of past cases like this how things played out in a similar scenario?

John Hester

Management

Matt Tucker – KeyBanc Capital Markets: And, sorry if I missed this, if the case, if you do get a decision next month, when would the rates become effective?

John Hester

Management

Matt Tucker – KeyBanc Capital Markets: Okay, great. Thanks, guys. That's all I had.

Operator

Operator

Our next question comes from John Hanson with Praesidis. John Hanson – Praesidis Asset Management: Good afternoon, guys. Just one follow-up here on the California case. Some of the companies out there get -- in some of their cases, get retroactive treatment. Do we have any kind of that coming, or is that we are going to pick up from the time we get the order?

John Hester

Management

John Hanson – Praesidis Asset Management: :

John Hester

Management

John Hanson – Praesidis Asset Management: Okay. Just to make sure I heard that. We’ll see how that plays out because I think it is scheduled for June 12. Hopefully it will get it taken care of. Good. Thanks.

Operator

Operator

That concludes our question-and-answer session. I’ll now turn the call back to Ken Kenny for closing comments.