eip123107.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
11-K
ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the
fiscal year ended December
31, 2007
Commission
file number 1-7850
A.
|
Full
title of the plan and the address of the plan, if different from that of
the issuer named below:
|
SOUTHWEST GAS CORPORATION
EMPLOYEES’ INVESTMENT PLAN
B.
|
Name
of issuer of the securities held pursuant to the plan and the address of
its principle executive office:
|
SOUTHWEST GAS
CORPORATION
5241
Spring Mountain Road, Post Office Box 98510
Las
Vegas, Nevada 89193-8510
(702)
876-7237
FINANCIAL
STATEMENTS AND EXHIBITS.
Listed
below are all financial statements and exhibits filed as part of this annual
report:
|
(a)
|
Financial
statements, including statements of net assets available for benefits as
of December 31, 2007 and 2006, and the related statement of
changes in net assets available for benefits for the year ended
December 31, 2007 and notes to financial statements, together with
the report thereon of PricewaterhouseCoopers LLP, independent
registered public accounting firm.
|
|
(b)
|
Supplemental
Schedule: Schedule H, Line 4i - Schedule of Assets (Held at End of
Year). All other schedules required by Section 2520.103-10 of
the Department of Labor’s Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and
not included herein have been omitted because they are not
applicable.
|
|
(c)
|
Consent
of PricewaterhouseCoopers LLP, independent registered public accounting
firm.
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the members of the
Southwest Gas Corporation Benefits Committee have duly caused this annual report
to be signed by the undersigned hereunto duly authorized.
SOUTHWEST
GAS CORPORATION
EMPLOYEES’
INVESTMENT PLAN
By
|
/s/
George C. Biehl
|
|
George
C. Biehl
|
|
Executive
Vice President,
|
|
Chief
Financial Officer and
|
|
Corporate
Secretary
|
|
Southwest
Gas Corporation
|
Dated: June 25,
2008
SOUTHWEST
GAS CORPORATION
EMPLOYEES’
INVESTMENT PLAN
FINANCIAL
STATEMENTS AND SUPPLEMENTAL SCHEDULE
AS
OF DECEMBER 31, 2007 AND 2006 AND
FOR
THE YEAR ENDED DECEMBER 31, 2007
Report
of Independent Registered Public Accounting Firm
To the Participants and
Administrator of
Southwest
Gas Corporation Employees’ Investment Plan
In our
opinion, the accompanying statements of net assets available for benefits and
the related statement of changes in net assets available for benefits present
fairly, in all material respects, the net assets available for benefits of
Southwest Gas Corporation Employees’ Investment Plan (the “Plan”) at December
31, 2007 and December 31, 2006, and the changes in net assets available for
benefits for the year ended December 31, 2007 in conformity with accounting
principles generally accepted in the United States of America. These
financial statements are the responsibility of the Plan’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance
with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) as of December
31, 2007 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary
information required by the Department of Labor’s Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's
management. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers
LLP
Los
Angeles, California
June 25,
2008
SOUTHWEST
GAS CORPORATION
|
|
EMPLOYEES'
INVESTMENT PLAN
|
|
|
|
|
|
|
|
|
Statements
of Net Assets Available for Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
Investments (see Note 2)
|
|
$ |
279,186,514 |
|
|
$ |
282,769,463 |
|
Receivable from employer
|
|
|
43,462 |
|
|
|
41,314 |
|
Total assets
|
|
|
279,229,976 |
|
|
|
282,810,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets available for benefits
|
|
$ |
279,229,976 |
|
|
$ |
282,810,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these
statements.
|
|
SOUTHWEST
GAS CORPORATION
|
|
EMPLOYEES'
INVESTMENT PLAN
|
|
|
|
|
|
Statement
of Changes in Net Assets Available for Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
2007
|
|
Additions:
|
|
|
|
Additions to net assets attributed to:
|
|
|
|
Investment income:
|
|
|
|
Net depreciation in fair value of investments (see Note 3)
|
|
$ |
(13,483,228 |
) |
Interest and dividends
|
|
|
17,268,703 |
|
|
|
|
3,785,475 |
|
Less investment expenses
|
|
|
27,435 |
|
|
|
|
3,758,040 |
|
|
|
|
|
|
|
|
|
|
|
Contributions:
|
|
|
|
|
Participant
|
|
|
13,225,121 |
|
Employer
|
|
|
3,638,861 |
|
|
|
|
16,863,982 |
|
|
|
|
|
|
Net additions
|
|
|
20,622,022 |
|
|
|
|
|
|
Deductions:
|
|
|
|
|
Deductions from net assets attributed to:
|
|
|
|
|
Benefits paid to participants
|
|
|
24,202,823 |
|
Net deductions
|
|
|
24,202,823 |
|
|
|
|
|
|
Net decrease
|
|
|
(3,580,801 |
) |
|
|
|
|
|
Net
assets available for benefits:
|
|
|
|
|
Beginning of year
|
|
|
282,810,777 |
|
End of year
|
|
$ |
279,229,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these
statements.
|
|
(1)
Description of Plan
The
following description of the Southwest Gas Corporation Employees’ Investment
Plan (the “Plan”), as amended, provides general
information. Participants should refer to the Plan document for a
more complete description of the Plan’s provisions.
General
The Plan
is a voluntary defined contribution plan covering all employees of Southwest Gas
Corporation (the “Company”). It is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (“ERISA”). The Plan’s
assets invested in Company stock (consisting of (i) Company matching
contributions and (ii) participant deferrals) are designated as an Employee
Stock Ownership Plan (“ESOP”).
The ESOP
invests primarily in qualifying employer securities. The non-ESOP
portion of the Plan is a profit-sharing plan that is qualified under Code
Sections 401(a) and 401(k). The ESOP portion of the Plan is a stock
bonus plan and an employee stock ownership plan that is qualified under Code
Sections 401(a) and 4975(e)(7) and described in ERISA Section
407(d)(6). The profit-sharing plan and the ESOP together are a single
plan under Treasury Regulation Section 1.414(1)-1(b)(1). The Plan
satisfies the requirements of ERISA and the trust fund maintained under the Plan
is tax-exempt under Code Section 501(a).
Contributions
Participants
may contribute up to 60 percent of their annual wages before bonuses and
overtime. However, contributions may not exceed amounts promulgated
by the Internal Revenue Code. The Company contributes to the Plan an
amount equal to 50 percent of a participant’s contribution. The
Company’s maximum contribution is three percent (increasing to three and
one-half percent in 2008) of a participant’s annual compensation before bonuses
and overtime. Beginning June 2008, deferral percentages elected by
participants will also be applied to overtime earnings, however they will not be
matched by the Company.
Participants’
Accounts
Each
participant account is credited with the participant’s contribution and the
portion contributed by the Company. The portion contributed by the
participant is invested in the various funds according to the direction of the
participant. The Company contributions are initially deposited in the
Southwest Gas Stock Fund. Beginning January 1, 2007, participants may
immediately transfer Company matching contributions between and among other
available funds. Upon attaining age 50, participants may elect to
invest future Company matching contributions directly in any available
fund.
Vesting
Participants
are immediately vested in their voluntary contributions plus actual earnings
thereon. Vesting in the contributions made by the Company and in the
earnings thereon is based on years of continuous service as
follows:
|
|
Vested
|
Years of
Service
|
|
Percentage
|
|
|
|
One
but less than two
|
20
|
Two
but less than three
|
40
|
Three
but less than four
|
60
|
Four
but less than five
|
80
|
Five
and over
|
100
|
In the
event of death, retirement, or total disability of a participant, Company
contributions become fully vested irrespective of the years of service at the
date of termination. Forfeitures as a result of a participant’s
termination prior to vesting are reallocated to the remaining participants on a
quarterly basis based on the employer contribution ratio. For the
years ended December 31, 2007 and 2006, forfeitures of non-vested accounts
reallocated to participants were approximately $42,000 and $28,000,
respectively.
Participant
Loans
The Plan
provides that participants may borrow against the balances in their accounts,
subject to certain limitations specified in the Plan. Funds for loans
are obtained through the liquidation of participants’ investment accounts.
Payments on the loans include interest at a rate that approximates the prime
rate, plus two percent. At December 31, 2007, outstanding loans
had annual interest rates ranging from 6.00 percent to 11.50 percent maturing in
2008 through 2012. Principal and interest payments on a participant’s
loan will be credited to the participant’s investment accounts in the same ratio
as ongoing contributions. The maximum repayment period for participant loans is
five years.
Payment
of Benefits
If a
participant terminates employment with the Company as a result of retirement,
death, or permanent and total disability, such participant, or designated
beneficiary in the case of death, will be entitled to receive an amount equal to
the value of his account at the end of the month immediately following
termination of employment. Distributions from the Southwest Gas Stock
Fund will be made in the Company’s common stock plus cash in lieu of fractional
shares. A participant may apply to the Plan Committee to request a
single lump sum payment in cash of the value of the Company’s common stock
otherwise distributable to the participant. Distributions from other
funds will be made in a single lump sum cash payment.
Distributions
under the Plan will begin as soon as practicable, but not later than
April 1 following the end of the Plan year in which the participant attains
age 70-1/2 or terminates employment, if later. If the participant’s
vested account balance is less than $1,000, the participant will receive a
lump-sum distribution or, if the participant so directs, the amount will be
rolled-over into an Individual Retirement Account (“IRA”). If the
participant’s vested account balance is greater than $1,000 but less than
$5,000, the participant’s account will be rolled-over into an IRA unless the
participant requests a lump-sum distribution. If the participant’s
vested account balance is greater than $5,000, the participant may remain in the
Plan, receive a lump-sum distribution, or roll-over the account into an
IRA. A participant who is terminated and does not elect to take a
distribution will continue to receive his share of investment income on all
vested portions of his accounts until electing to receive distributions from the
Plan. All distributions to beneficiaries of a participant must be
made within five years after the participant’s death.
Plan
Expenses
Plan-related
expenses and any other costs of administering the Plan will be paid with funds
from the Plan unless paid by the Company at its discretion. The
Company paid all Plan expenses, except loan origination and maintenance fees,
during 2007. Loan origination and maintenance fees paid by Plan
participants for the year ended December 31, 2007 were
$27,435.
Plan
Administration
Fidelity
Management Trust Company acts as the trustee and Fidelity Investment
Institutional Operations Company, Inc. performs all recordkeeping of the
Plan.
(2)
Summary of Accounting Policies
The
following information describes the Plan’s accounting policies:
Basis
of Accounting
The
financial statements of the Plan are prepared under the accrual method of
accounting.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles (“GAAP”) in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of changes in net assets
during the reporting period. Actual results could differ from those
estimates.
Investment
Valuation and Income Recognition
All
investments of the Plan are stated at quoted market value as of the date of the
statement. Shares of mutual funds are valued at the net asset value
of shares held by the Plan at year end. Common stock of the Company
is traded on a national securities exchange and is valued at the last reported
sales price on the last business day of the Plan year. The Plan
provides for investments in various investment securities including common stock
of the Company. Investment securities, in general, are exposed to
various risks, such as interest rate, credit, and overall market volatility
risks as well as changes in prevailing market and interest rates, increases in
defaults and credit rating downgrades. Due to the level of risk
associated with certain investment securities and the amount invested in the
Company’s common stock, it is reasonably possible that changes in the values of
investment securities will occur in the near term and such changes could
materially affect the amounts reported in the statements of net assets available
for benefits. Loans to participants are valued at their outstanding
principal amount, which approximates fair value.
Purchases
and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date.
(3)
Investments
Investments
representing five percent or more of Plan net assets are:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
2007
|
|
|
2006
|
|
Fidelity
Contrafund
|
|
|
|
|
|
|
(968,385
and 956,907 shares, respectively)
|
|
$ |
70,798,650 |
|
|
$ |
62,390,358 |
|
Southwest
Gas Corporation Common Stock
|
|
|
|
|
|
|
|
|
(2,175,544
and 2,392,620 shares, respectively)
|
|
|
64,765,945 |
|
|
|
91,804,829
|
** |
Fidelity
Low-Priced Stock Fund
|
|
|
|
|
|
|
|
|
(498,421
and 478,736 shares, respectively)
|
|
|
20,500,059 |
|
|
|
20,844,157 |
|
Fidelity
Money Market Trust: Retirement Money Market Portfolio
|
|
|
|
|
|
|
|
|
(17,638,209
and 17,363,432 shares, respectively)
|
|
|
17,638,209 |
|
|
|
17,363,432 |
|
Fidelity
Freedom 2020 Fund
|
|
|
|
|
|
|
|
|
(1,030,371
shares in 2007)
|
|
|
16,290,173 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
* Threshold
percentage not met
|
|
|
|
|
|
|
|
|
**
This amount includes $57,500,933 in nonparticipant-directed investments in
2006.
|
|
|
|
|
|
During
2007, Plan investments (including gains and losses on investments bought and
sold as well as held during the year) depreciated in value by $13,483,228 as
follows:
Southwest
Gas Corporation common stock
|
|
$ |
(18,862,640 |
) |
Mutual
funds
|
|
|
5,379,412 |
|
|
|
$ |
(13,483,228 |
) |
(4)
Related-Party Transactions
Since the
Company’s common stock is an investment held by the Plan, investments in this
common stock represent transactions with parties-in-interest. Certain
other plan investments are short-term deposits and investments, and shares of
mutual funds managed by Fidelity Management Trust Company, the Trustee as
defined by the Plan. These certain plan investments qualify as
parties-in-interest transactions for which a statutory exemption
exists. During the year ended December 31, 2007, the Plan made
purchases of approximately $31.9 million and sales (including
distributions) of approximately $40.5 million of Company common
stock. The following represents investments held by related
parties:
December
31,
|
|
2007
|
|
|
2006
|
|
Southwest
Gas Corporation
|
|
$ |
64,765,945 |
|
|
$ |
91,804,829 |
|
Fidelity
Management Trust Company
|
|
|
169,639,479 |
|
|
|
153,452,842 |
|
|
|
$ |
234,405,424 |
|
|
$ |
245,257,671 |
|
(5)
Plan Termination
Although
the Company expects to continue the Plan indefinitely, it reserves the right to
amend or terminate the Plan at any time. Upon termination, partial
termination, or complete discontinuance of contributions to the Plan, Company
contributions will become fully vested.
(6)
Federal Income Taxes
In
April 2003, the Company received a favorable determination letter from the
IRS stating that the Plan, amended and restated effective October 1, 2001,
qualifies for deferred tax treatment of contributions under Section 401(k) of
the Internal Revenue Code (“IRC”). Although the Plan has been amended
since October 1, 2001, the Plan administrator and the Plan’s tax counsel
believe that the Plan is designed and is currently being operated in compliance
with the applicable requirements of the IRC.
(7)
Recently Issued Accounting Pronouncements
In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (“SFAS”) No. 157, “Fair Value
Measurements.” SFAS No. 157 defines fair value, establishes a
framework for measuring fair value in GAAP, and expands disclosures about fair
value measurements. The provisions of SFAS No. 157 are effective for
the Plan beginning January 1, 2008. The adoption of the standard is
not expected to have a material impact on the financial position or results of
operations of the Plan.
|
|
|
|
|
|
SCHEDULE
I
|
|
|
|
|
|
|
|
|
|
|
SOUTHWEST
GAS CORPORATION
|
|
|
EMPLOYEES’
INVESTMENT PLAN
|
|
|
|
|
|
|
|
|
|
|
E.I.N. 88-0085720
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE
H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
|
|
|
AT
DECEMBER 31, 2007
|
|
|
|
|
|
|
|
|
|
|
Identity
and Description of
|
|
Number
of
|
|
|
Current
|
|
|
Investment
|
|
Shares
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
*
|
Southwest
Gas Corporation Common Stock
|
|
|
2,175,544 |
|
|
$ |
64,765,945 |
|
|
|
|
|
|
|
|
|
|
|
|
Brown
Capital Management Small Company Fund
|
|
|
90,584 |
|
|
|
3,236,551 |
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard
Institutional Index Fund
|
|
|
82,086 |
|
|
|
11,011,067 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Contrafund
|
|
|
968,385 |
|
|
|
70,798,650 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2000 Fund
|
|
|
57,468 |
|
|
|
710,885 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2010 Fund
|
|
|
803,997 |
|
|
|
11,915,241 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2020 Fund
|
|
|
1,030,371 |
|
|
|
16,290,173 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2030 Fund
|
|
|
165,116 |
|
|
|
2,727,710 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2040 Fund
|
|
|
193,539 |
|
|
|
1,883,138 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2050 Fund
|
|
|
7,617 |
|
|
|
87,063 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2005 Fund
|
|
|
17,108 |
|
|
|
201,702 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2015 Fund
|
|
|
139,280 |
|
|
|
1,736,825 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2025 Fund
|
|
|
93,714 |
|
|
|
1,235,155 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2035 Fund
|
|
|
18,907 |
|
|
|
258,645 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom 2045 Fund
|
|
|
8,686 |
|
|
|
98,591 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Freedom Income Fund
|
|
|
44,023 |
|
|
|
504,061 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Growth & Income Portfolio
|
|
|
413,237 |
|
|
|
11,273,099 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Low-Priced Stock Fund
|
|
|
498,421 |
|
|
|
20,500,059 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
Money Market Trust: Retirement Money Market Portfolio
|
|
|
17,638,209 |
|
|
|
17,638,209 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
U.S. Bond Index Fund
|
|
|
1,012,754 |
|
|
|
11,028,887 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Fidelity
U.S. Government Reserve
|
|
|
390 |
|
|
|
390 |
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard
International Growth Fund Admiral Shares
|
|
|
151,778 |
|
|
|
11,987,426 |
|
|
|
|
|
|
|
|
|
|
|
|
Lord
Abbett Small Cap Value Fund
|
|
|
424,651 |
|
|
|
12,493,225 |
|
|
|
|
|
|
|
|
|
|
|
*
|
Temporary
Cash Investments
|
|
|
750,996 |
|
|
|
750,996 |
|
|
|
|
|
|
|
|
|
273,133,693 |
|
|
|
|
|
|
|
|
|
|
|
|
Participant
Loans (with interest ranging from 6.00% to 11.50%)
|
|
|
|
|
|
|
6,052,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
279,186,514 |
|
|
|
|
|
|
|
|
|
|
|
|
* A
party-in-interest for which a statutory exemption exists.
|
|
|
|
|
|
|
|
|
EXHIBIT
23
Consent
of Independent Registered Public Accounting Firm
We hereby
consent to the incorporation by reference in the Registration Statement on
Form S-8 (No. 333-145783) of Southwest Gas Corporation of our report dated
June 25, 2008 relating to the financial statements of Southwest Gas Corporation
Employees' Investment Plan, which appears in this Form 11-K.
/s/
PricewaterhouseCoopers LLP
Los
Angeles, California
June 25,
2008