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Southwest Gas Corporation (NYSE:SWX)

Q1 2014 Earnings Conference Call

May 8, 2014 4:30 p.m. ET

Executives

Jeffrey W. Shaw – President & Chief Executive Officer

Kenneth J. Kenny - Vice President of Finance and Treasurer

Roy R. Centrella - Chief Financial Officer and Senior Vice President

John P. Hester - Executive Vice President

Analysts

Matt Tucker – KeyBanc Capital Markets

John Hanson – Praesidis Asset Management

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

Thank you, Estaban. Welcome to Southwest Gas Corporation's 2014 First Quarter Earnings Conference Call. As Estaban said, my name is Ken Kenny, and I am the Vice President of Finance and Treasurer. Our conference call is being broadcast live over the Internet. For those of you who would like to access the webcast, please visit our website at www.swgas.com and click on the conference call link. We will have slides on the internet, which can be accessed to follow our presentation. Today, we have Mr. Jeffrey W. Shaw, Southwest's President and Chief Executive Officer; Mr. John P. Hester, Executive Vice President; and Mr. Roy R. Centrella, Senior Vice President, Chief Financial Officer; and other members of senior management to provide a brief overview of the company’s operations and earnings ended March 31, 2014 and a full year outlook for 2014.

Our general practice is not to provide earnings projections. Therefore, no attempt will be made to project earnings for 2014. Rather, the company will address those factors that may impact this coming year's earnings. Further, our lawyers have asked me to remind you that some of the information that will be discussed contains forward-looking statements. These statements are based on management's assumptions, which may or may not come true, and you should refer to the language on slide 2 in the press release and also our SEC filings for a description of factors that may cause actual results to differ from our forward-looking statements. All forward-looking statements are made as of today, and we assume no obligation to update any such statement.

With that said, I'd like to turn the time over to Jeff.

Jeffrey Shaw

Thank you, Ken. Good afternoon and thank you for joining us on this call today. What we’d like to do is first of all start off with Slide 3, 2014 first quarter highlights. It was the third highest quarterly earnings in the company’s history. There are a few things however that we wanted to highlight, discuss and address maybe on a more forward-looking basis as we go through the call today. First of all, with respect to the California rate case, we are disappointed that we don’t have a decision yet, but we’re going to get a decision. And we’re cautiously optimistic we’ll have that decision sometime before the end of the second quarter. That will bring some additional rate relief. While it’s not a significant number, it’s enough to warrant mention and discussion. So John will cover that off today.

Also, we had a legal accrual that occurred in the first quarter. Let me just make a couple of comments on that. We think we do a good job providing a safe environment for our customers and employees. Heaven knows safety is paramount in our company. We’ve established protocols for monitoring and maintaining our gas distribution system as well as safe driving standards for the many vehicles we have on the road. Yet unfortunately despite these efforts sometimes we have incidents and I think property and sometimes people get hurt, and sometimes these injuries can be severe. Clearly taking a full self-insured retention plus aggregate amount in one $5 million legal accrual is unusual. We wanted to talk about that today. Historically there are a few incidences of the dollar impact to this degree. So it’s not a usual thing here year in and year out. We simply do not have actual incidents of this magnitude on a frequent basis. So, enough said on that for now. We’ll talk some more about that, but that is embedded on our O&M costs in the first quarter.

And then we had extreme weather conditions at NPL and just we’ll talk some more about that but suffice it to say when we go into an area and we set up operations in an area, there is overheads that’s embedded in that area and we can’t be so nimble if the weather doesn’t cooperate to pick up and move away and not incur the costs. We’re there. We have contracts we have to execute for the customers. And so we’re there ready to do them and sometimes we’re just subject to the weather. Now that being said, we’ll talk a little bit more about that, but management is convinced that they will be able to recover to a large degree in the current year and we’ll talk some more about that on a going forward basis.

COLI returns, we talk about COLI on a regular basis, the market fluctuations, the underlying insurance policies we have. They were basically normal in the first quarter whereas in the prior year first quarter, they were exceedingly higher than normal. And therefore there is a reduction in the COLI this year. So we want to mention that. We are continuing to remain focused on our strategy of building long term shareholder value. We are not moving off our core strategies. They have worked for us. We think they’re going to continue to work for us. We’re optimistic about the prospect for the duration of 2014. So that’s an overview as we get into the call here today.

Call outline on slide 4, first of all we’re going to talk about consolidated earnings for the first quarter and 12 months ended March 31, 2014. We’ll touch on the gas segment, financial performance and other issues. We’ll talk about NPL Construction Co. We’ll talk about their earnings in the first quarter and we’ll talk about regulation and some of the initiatives we have in front of us presently. And then I will finalize the call with a 2014 outlook update.

So with that, I’m going to turn the time over moving to slide 5 to Roy Centrella, our Chief Financial Officer. Roy?

Roy Centrella

Thank you, Jeff. Good afternoon. I will spend a few minutes reviewing our most recent operating results. Slide 5 provides a summary by segment of operating results for the three and 12 month periods ended March 2014 and 2013.

Net income for the first quarter declined $10 million between periods from $81 million to $71 million, while basic earnings per share declined from $1.75 to $1.52. Results for both operating segments were lower. For the 12 month period, consolidated net income of $135 million and basic EPS of $2.92, were relatively consistent with prior period results.

Let's now go through each segment, beginning with gas operations on Slide 6. Net income declined from $79.3 million during the first quarter last year to $72.6 million during this year’s first quarter. Operating margin increased $2 million. This was more than offset by operating expense increases which totaled $8 million. And as Jeff noted, most of the operating costs increase resulted from the $5 million legal accrual. Both other income and net interest reductions had unfavorable, but expected variances between periods also.

Slide 7 breaks down the change in operating margin between quarters. The primary cause of the increase was $3 million of incremental margin from the addition of 26,000 net new customers since March 2013. This equates to a 1.4% customer growth rate. You’ll note that margin growth was lower than expected due to the delay in receiving a final order on our California general rate case which John will discuss shortly.

Slide 8 discusses operating and financing costs. O&M would have been flat between quarters, but for the legal accrual mainly due to lower extension expense which offset general cost increase. Depreciation expense increased 7%, which was relatively consistent with the growth in gas plant and service. For the full year of 2014, taking into consideration the legal accrual, we now forecast total operating cost increases of about 3%, which is at the high end of the 2% to 3% range we discussed at yearend.

Moving to slide 9, you’ll find the other income and deductions summary schedule. Other income declined $2.5 million between periods as income on COLI policies came in at $900,000, which we review as in a normal range. Last year, COLI income totaled $3.8 million, which was extremely high and consistent with the significant stock market gains that occurred in the broader marketplace.

Next, we’ll move to the 12 month results on slide 10. Gas segment net income for the current 12 month period of $117 million was about $1 million higher than the prior period. There were a number of offsetting variances which led to the modest increase. Those are summarized on Slide 11. Operating income declined $11.3 million despite a $19 million improvement in operating margins. Depreciation, the legal accruals discussed previously and higher pension costs during 2013 were the most significant unfavorable factors. On the positive side, other income increased $7 million between periods due to outsized COLI returns and cessation of pipe replacement costs disallowances. Additionally, net interest deductions declined $1.6 million due to the previously undertaken debt refinancing and redemptions.

Now we’ll move to slide 12, NPL results. During the three months ended March 2014, NPL experienced a loss of $1.8 million compared to net income of $1.5 million in the prior year quarter. Now, quarter one is traditionally NPL’s weakest due to the number of sizeable customers they have in the east and mid-west regions in the country where construction work is largely dictated by weather. In a moment we’ll provide weather charts which display the severity and duration of the bad weather which influenced 2014 results.

Slide 13 shows that despite the poor weather, NPL did increase operating revenues $2 million between periods. Completion of several big projects and increased work in the western half of the country were mainly responsible. However, construction expenses increased $6.5 million as project delays which affected revenue recognition did not ratably translate to cost reductions. Fixed costs such as lease expense, G&A, workforce retainers etc., were still incurred.

On slide 14 is a graphical depiction of US weather conditions for the first quarter of 2014. As you can see, seven of NPL’s service areas in the east and mid-west portions of the country experienced prolonged and extreme cold weather conditions, including several with near record lows. Fortunately, more recent weather conditions are improved and NPL is working hard to make up for the lost time. We are optimistic that as the year progresses, they’ll be able to complete the vast majority of work they’ve contracted for and reach or modestly exceed 2013 profit levels.

Slide 15 shows the most recent 12 month period during which NPL’s net income fell modestly from $18.6 million to $17.9 million.

And slide 16 summarizes that 12 month’s activity. Revenues increased $53.6 million between 12 month periods as pipe replacement activity was very strong. Of course the poor first quarter weather did have a somewhat adverse effect on this increase.

Construction expenses increased $51.1 million between periods. Recall that we’ve added A&G to support NPL’s side and complexity, and also that we recorded a $4 million legal settlement during the second half of 2013.

Finally, depreciation expense picked up $3.6 million due to equipment purchases to support revenue growth.

Let me now turn the time over to John Hester to provide a regulatory update.

John Hester

Thanks, Roy. Starting with Slide 17, we have an update on the status of our California rate case filing, a rate case application originally filed at the end of 2012 anticipating new rates effective January 1 of this year. Recall that in the original application we requested general revenue increase of $11.6 million for 2014, along with subsequent attrition increases for years 2015 through 2018. While the administrative laws judging the proceeding initially issued a draft decision in December of last year, she determined that a number of required supporting schedules from that originally included in the proposed decision, resulting in her withdrawing the initial proposed decision and reissuing it for the accompanying schedules on February 11. The original and revised drafts provided for a $7.5 million increase for 2014 along with 2.95% annual attrition allowances for years 2015 through 2018.

In the interim, the office of rate payer advocates initiated expert in meetings with commissioners expressing concerns about several components of the proposed decision. In response to some of these concerns, the administrative law judge issued a second revised proposed decision on April 18 that reduced the proposed 2014 revenue increase to approximately $7.2 million. Shortly thereafter, President Peevey's office issued an alternate decision that further reduced 2014 revenues by about $50,000, reduced 2015 through 2018 attrition year increases to 2.75% and eliminated Southwest’s proposed infrastructure liability and replacement mechanisms. At this point we anticipate a final decision next month.

Moving to Slide 18, we have a quick update on several of the company’s other regulatory proceedings. Southwest continues to make progress in its efforts to improve the safety and reliability of the system with the use of infrastructure replacement mechanisms in Nevada. Southwest is currently underway in its 2014 replacement efforts which were authorized by the Public Utility Commission of Nevada in January. Recall that Southwest proposed and the commission approved $18.9 million of replacement work for northern and southern Nevada this calendar year. In addition, we’re very excited about making our initial filing next month pursuant to the Nevada Commission’s new gas infrastructure recovery mechanism regulations. That new regulations provides for Southwest to make annual filings in June for replacement work contemplated during the next calendar year.

Our Arizona customer in the outlying program is also proceeding nicely. This program was initially approved as part of the Southwest Arizona rate case settlement in December 2011 and was most recently expanded earlier this year to include replacement of non-leaking customer lines. Southwest submits an annual surcharge request to the Arizona Commission to recover the costs of this program. The existing surcharge covers approximately $600,000 of costs annually and Southwest has proposed increasing that cost recovery level to $1.5 million annually effective in June. The commission’s decision on a new surcharge proposal is expected in the next several weeks. Also in Arizona, Arizona Corporation Commission’s review of Southwest proposed liquefied natural gas storage facility in southern Arizona is proceeding on schedule. They’ve received numerous staff data requests on a proposal, have furnished staff our responses and are now awaiting the staff to issue a report on its review of the project. A final commission decision on the matter is expected later this year.

Finally, with respect to our Paiute Pipeline subsidiary, we are still conducting pre-filing activities related to the proposal for a 35 mile, $35 million lateral from Ruby Pipeline to Elko. The formal application for the new lateral is expected to be submitted next month. Also related to Paiute is the ongoing proceeding for the rate case application that was filed in February. That application seeks a $9.5 million revenue increase effective subject to refund in September. A decision from the commission on that proceeding is expected next year.

With that, I will turn the call back to Jeff.

Jeffrey Shaw

Thank you. What we’ll do is touch upon beginning on slide 19, just give an outlook from the construction services business. Basically the weather delays are now behind us. Conditions in early 2014 as we mentioned hindered the normal construction work. However, we’re moving forward there in an extradited fashion and expect to complete the work awarded under contracts. NPL management remains constantly optimistic that they can -- that earnings for the NPL will be consistent with 2013 results. The board and senior management has charged NPL management to grow revenues by approximately 5% to 8% on average for the long term. 2014 revenue, the revenue change 2014 may be slightly more modest than that range. We think over the long term we still have the opportunity to do that.

Slide 20. With respect to the natural gas operation segment of the business, the incremental margin from rate relief will be slightly less than expected due to the delay in the California rate case decision. That being said, we can count on that year in and year out on a going forward basis. So we’re anxiously anticipating a decision in the second quarter. We expect net customer growth somewhere in the 1.5% range. Operating costs we believe will increase somewhere in the 3% range.

We expect a net pension expense decrease in 2014 of approximately $7 million, offset somewhat by that legal accrual that we referred to earlier of $5 million. Financing costs due to our $250 million debt facility we did the prior year expected to increase by about $5 million to $6 million.

Finally the changes in the company life insurance cash surrender values will likely continue to be subject to volatility. Over the long run, we expect year in year out to see about a $3 million to $5 million increase. We are going to continue our expanded focus on infrastructure replacement mechanisms, with mechanisms in Nevada and Arizona contributing modestly to 2014 results. And again as John discussed in some detail, we are anticipating the pipeline new rates to be effective in late September subject to refund.

On Slide 21, with respect to estimated construction expenditures, 2014 construction expenditures are estimated to be about $375 million. I would point you to the pie chart. Franchise and other replacement is about 49% of that amount. That’s a pretty similar -- that’s a pretty embedded number that you’re going to see year in year out that we would normally do to replace and update our infrastructure.

Growth will be at roughly 29% so about $107 million of that $375 million. General plant, that’s a pretty typical number that you see there. Replacement under trackers, we want to continue to increase that to the extent we can, $31million or about 8% of that number where we are protecting the shareholder in between rate cases with these trackers. I know we have other roughly 1%.

Construction expenditures on a trailing 12 ended March were $337 million, $301 million for the prior period by comparison. Operating cash flows were $298 million and provided approximately three quarters of construction expenditures and dividends requirements for the 12 month period ended March 31st 2014. Construction expenditures over the next three years, ’14, ’15, ’16 are expected to be approximately $1.1 billion. Southwest plans to accelerate projects that improve system flexibility and reliability, including early vintage plastic pipe that would also I believe help to continue to improve the safety of our system which is always paramount to us. Finally, operating cash flows are expected to provide approximately 85% of funds required for those construction expenditures over the next three years.

With that I will turn the call back to Ken.

Kenneth Kenny

Thanks, Jeff. That concludes our prepared presentation. For those of you who have access to our slides, we have also provided an appendix with slides that includes other pertinent information about Southwest Gas, and can be reviewed at your convenience. Our operator, Estaban, will now explain the process for asking questions.

Question-and-Answer Session

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?

Jeffrey Shaw

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.

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

I really can’t comment on that. Suffice it to say this was not some unusual thing. It was just an incident that happened to occur. And so unfortunately one of those things that will happen from time to time and we go to great lengths to ensure the safety of our system, probably an industry leader in many ways. We have people sitting on committees national and some that chair of those committees and I think we have practices that are industry leading. Notwithstanding, occasionally we have an incident and we had one on this one.

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

I wouldn’t say there is any dramatic changing in pricing. I would say the margins may be impacted slightly. Because of the fact we have overhead, we had to continue to incur during our slowdown or shutdown during this cold winter. But the team is going to continue to move forward and try to get the work done that it’s contracted to do for the customers. So I don’t expect a dramatic change, but a little change this year as result of that.

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

I don’t know that we’ve disclosed that number just now off the top of my head giving you a number. Suffice it to say from a bottom line perspective, we expect our results to meet if not exceed 2013 notwithstanding the slowdown.

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

They typically year in and year out had equipment sale. They have a pretty well thought out strategy for buying and selling equipment. They don’t hold it too long. I don’t think you are going to see significant fluctuation unless the business goes way north because of growth or way south because of a lack of growth. But I don’t expect to see anything more significant other than what we have disclosed. So I don’t think there’s anything to overly focus on with respect to that year-over-year in terms of the change.

Roy Centrella

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 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

Sure. What I could say about unemployment in all three service areas, it has improved. It’s come down. It still is ahead of, however, the national average, Nevada being the most ahead of the national average, Arizona the best of the three. If you take a look at employment growth numbers, they are somewhat encouraging. Southern Nevada area is about double in terms of employment growth. I think it was in the neighborhood of 1.7% in the prior year and pushing -- let’s see if I get the right number here. I’m looking it up. Yeah 1.7%, it’s up to 3.8% on a trailing 12 ended ‘14. So that’s encouraging, it’s not dramatic. It’s not a home run, but we love to see things that are directionally positive. I think it’s going to continue to be gradual just based upon what we hear, what we read, what we -- the people we talk to. We think it’s going to be a gradual recovery in Nevada. Arizona continues on with a fairly flat employment increase. Employment growth increase was about 1.9% this year as opposed to 1.8% last year.

So it’s directionally positive. We don’t get overly excited but we are not depressed either. So I guess that’s maybe the best way to comment on that. We are seeing some building going on. We are continuing to see whittling away the excess inventory of unoccupied homes. That’s growth -- those are growth numbers could come in with no associated capital. So that’s a nice thing that occurs. So fundamentally, though, growth is going to drive construction in the residential and commercial areas. And so we are going to see more dramatic numbers than we’ve seen if we’re going to see dramatic growth in housing. So I think a 1.5% growth rate we believe is probably a good growth rate to bank on going forward.

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

Let me let John -- let me just say this. I will make one quick comment then I’m going to turn it over to John to give you more details. What is encouraging is that we have not run into any headwinds with the commission yet. So we are cautiously optimistic we’ll get a decision by the end of the year. Now exactly what that will look like, that’s for the commission to decide, but it’s a great initiative. It’s a win-win-win. The shareholder wins. The customer wins from a reliability standpoint. So I’ll let John speak to that really as far as timing and where we are at in the process.

John Hester

Hi Matt. I think that pretty much s Jeff has indicated, the process in Arizona is on schedule. We’ve had meetings with the commission staff. We’ve had meetings with the RUCO as well as the commissioners. The staff gave us a lot of questions on the project. Personally I thought they were pretty good questions. They were pretty thorough. They weren’t necessarily reflective of any hostility towards the project. I think that a lot of people see the operational value in that facility being down in Southern Arizona. I guess that I will just say that it is on schedule and the next thing that we are anticipating is a report back from the staff to the commission on their review of the project.

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

Yes Matt. I don’t think that having an alternate proposed decision come out in the California rate case or frankly than any other type of proceeding in California is particularly unusual. We have had alternate decisions come out in previous dockets for us. I think when you look at materiality of first year revenue differential between the current draft from the judge and the alternate proposed decision from Peevey’s office, they’re pretty small. I think even if you look at the post-test year adjustments moving from 2.95% to potentially 2.75%, it isn’t necessarily that big of a deduction from what the judge had proposed.

We’ve had meetings with the commissioners as well and I don’t anticipate that you are going to see any other decisions come out and any other proposal decisions come out. I think we are optimistic that we will have a final resolution of the matter next month and one other thing to keep in mind in California rates for us is that we are on a five year rate case cycle. So while we would have liked to have new rates by January1, once these new rates do get put in place, they are going to be in place for quite a while. So we are looking forward to a near term resolution to the case.

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

They would become effective as of the date of the commissioner’s decision.

Matt Tucker – KeyBanc Capital Markets

Okay, great. Thanks, guys. That's all I had.

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

We don’t know and probably don’t expect at this point, John that we are to have any kind of retroactive treatment. I think that one of the requests that we had put in relatively early in the process was to have a memorandum account established. The judge never moved that proposal forward because I think she anticipated that this case was going to be resolved fairly shortly. We’ve had a couple of months delay on top of that. So no, I don’t think that we are going to have any special retroactive treatment back to January 1 of this year. But again I think that if you look at this as a five year rate case process, while we would have preferred to have those rates effective January 1, at this point we are just looking forward to a relatively speedy conclusion of the matter.

John Hanson – Praesidis Asset Management

In your monologue where you mentioned that Chairman Peevey has an alternate that has some different treatment for the infrastructure fees or something like that, I didn't quite understand what you were saying there.

John Hester

Yes. In our original case we had proposed that what we call an infrastructure liability and replacement mechanism be established. This is kind of similar to what we currently have in place under Nevada regulation. And what that mechanism would have provided for was for us to make annual filings at the California commission on projects that we would like to undertake that were outside of the original rate case process. And then the judge’s proposed decision as it currently stands, she is recommending that that mechanism be approved and in the alternate draft that came out of President Peevey’s office, he is recommending or that draft is recommending that the mechanism be denied.

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

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

Kenneth Kenny

Thank you, Estaban. This concludes our conference call. We appreciate your participation and interest in Southwest Gas Corporation. Have a good week. Thank you.

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