exhibit99.htm

August 9, 2010

Media Contact: Cynthia Messina, Las Vegas, NV (702) 876-7132

Shareholder Contact: Ken Kenny, Las Vegas, NV (702) 876-7237

For Immediate Release

SOUTHWEST GAS CORPORATION

REPORTS SECOND QUARTER 2010 RESULTS

Las Vegas, Nev. – Southwest Gas Corporation (NYSE: SWX) recorded a net loss of $0.02 per share for the second quarter of 2010, compared to a net loss of $0.01 per share recorded for the second quarter of 2009. Consolidated net loss was $933,000 for the second quarter of 2010, compared to a net loss of $594,000 for the prior-year quarter. The current quarter includes a $3.6 million ($0.08 per share) decrease in the cash surrender values of company-owned life insurance (“COLI”) policies, while the corresponding prior-year quarter included a $3.7 million ($0.08 per share) increase in COLI policies. Due to 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, “Overall, we are pleased with second quarter 2010 operating results for our core business activities. When compared to the second quarter of 2009, natural gas segment operating margin was up over $8 million, operating expenses were relatively flat, and financing costs were down $1.6 million. The bottom-line results for our construction services subsidiary also improved by $1 million over the prior-year quarter.” Shaw concluded by saying, “Recently, Moody’s upgraded our credit rating to Baa2 from Baa3 and both Fitch and

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Standard & Poor’s revised our credit rating outlook to positive from stable. It’s gratifying to achieve these affirmative changes in such challenging economic conditions.”

For the twelve months ended June 30, 2010, consolidated net income was $101.8 million, or $2.26 per basic share, compared to $63.9 million, or $1.45 per basic share, during the twelve-month period ended June 30, 2009. The increase between periods reflects higher operating margin, a significant improvement in other income, and lower financing costs. Other income in the current twelve-month period includes a $4.3 million ($0.10 per share) increase in the cash surrender values of COLI policies, while the prior twelve-month period included a $7.4 million ($0.17 per share) decrease in COLI policies.

Natural Gas Operations Segment Results

Second Quarter

Operating margin, defined as operating revenues less the cost of gas sold, increased $8 million in the second quarter of 2010 compared to the second quarter of 2009. Differences in heating demand, caused primarily by weather variations in Arizona, provided $4 million of the operating margin increase as temperatures in the current quarter were relatively normal, while temperatures were warmer than normal in the second quarter of 2009. Rate relief provided $4 million of the operating margin increase, consisting of $3 million in Nevada and $1 million in California. Customer growth provided a minimal benefit as 16,000 net new customers were added during the last twelve months.

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Operating expenses for the quarter were virtually unchanged when compared to the second quarter of 2009. Other income, which principally includes returns on COLI policies and non-utility expenses, decreased $7.6 million between periods. This was primarily due to a negative swing in the cash surrender values of COLI policies. Net financing costs decreased $1.6 million primarily due to the redemption of $100 million of subordinated debentures in March 2010.

Twelve Months to Date

Operating margin increased $45 million between periods. Rate relief and rate changes provided a net $18 million increase, consisting of rate relief of $10 million in Arizona, $14 million in Nevada, and $3 million in California, partially offset by a decrease of $9 million related to the return to a seasonal margin methodology in California in 2009. Differences in heating demand caused primarily by weather variations between periods resulted in a $29 million operating margin increase as temperatures in the current period were relatively normal, while temperatures were significantly warmer than normal in the prior-year period. Customer growth contributed $1 million in operating margin. Conservation, resulting from economic conditions and energy efficiency, negatively impacted operating margin by an estimated $3 million.

Operating expenses increased $9.1 million, or two percent, between periods principally due to general cost increases and higher employee-related benefit costs. The increase was mitigated by a decline in uncollectible expense. Despite additional plant in service, depreciation expense decreased slightly due to lower depreciation rates in California and Nevada rate jurisdictions.

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Other income improved $10.9 million between periods. This was primarily due to the net change in the cash surrender values of COLI policies. Net financing costs decreased $5.2 million between periods due to a reduction in outstanding debt, the redemption of the subordinated debentures, and lower interest rates on variable-rate debt.

Southwest Gas Corporation provides natural gas service to 1,825,000 customers in Arizona, Nevada, and California.

This press release may contain statements which constitute “forward-looking statements” within the meaning of the Private 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, conditions in the housing market, the effects of regulation/deregulation, the timing and amount of rate relief, changes in rate design, and the impacts of stock market volatility.

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SOUTHWEST GAS CONSOLIDATED EARNINGS DIGEST

(In thousands, except per share amounts)

QUARTER ENDED JUNE 30,	2010		2009

Consolidated Operating Revenues	$	385,825	$	387,648

Net Loss	$	933	$	594

Average Number of Common Shares Outstanding		45,391		44,730

Loss Per Share	$	0.02	$	0.01

SIX MONTHS ENDED JUNE 30,		2010		2009

Consolidated Operating Revenues	$	1,054,576	$	1,077,510

Net Income	$	63,715	$	49,387

Average Number of Common Shares Outstanding		45,306		44,578

Basic Earnings Per Share	$	1.41	$	1.11

Diluted Earnings Per Share	$	1.39	$	1.10

TWELVE MONTHS ENDED JUNE 30,		2010		2009

Consolidated Operating Revenues	$	1,870,890	$	1,961,342

Net Income	$	101,810	$	63,933

Average Number of Common Shares Outstanding		45,113		44,176

Basic Earnings Per Share	$	2.26	$	1.45

Diluted Earnings Per Share	$	2.24	$	1.44

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SOUTHWEST GAS CORPORATION
SUMMARY UNAUDITED OPERATING RESULTS
(In thousands, except per share amounts)



	THREE MONTHS ENDED						SIX MONTHS ENDED					TWELVE MONTHS ENDED
	JUNE 30,						JUNE 30,					JUNE 30,
	2010			2009			2010			2009		2010		2009

Results of Consolidated Operations
Contribution to net income (loss) - gas operations	$	(4,101	)	$	(2,736	)	$	61,216		$	47,116	$	93,520	$	56,437
Contribution to net income - construction services		3,168			2,142			2,499			2,271		8,290		7,496
Net income (loss)	$	(933	)	$	(594	)	$	63,715		$	49,387	$	101,810	$	63,933

Basic earnings (loss) per share	$	(0.02	)	$	(0.01	)	$	1.41		$	1.11	$	2.26	$	1.45
Diluted earnings (loss) per share	$	(0.02	)	$	(0.01	)	$	1.39		$	1.10	$	2.24	$	1.44

Average outstanding common shares		45,391			44,730			45,306			44,578		45,113		44,176
Average shares outstanding (assuming dilution)		-			-			45,698			44,848		45,484		44,461




Results of Natural Gas Operations
Gas operating revenues	$	305,269		$	316,744		$	919,778		$	951,850	$	1,582,771	$	1,648,942
Net cost of gas sold		147,736			167,685			499,991			563,495		803,126		914,193
Operating margin		157,533			149,059			419,787			388,355		779,645		734,749
Operations and maintenance expense		86,935			86,846			173,640			171,508		351,074		341,359
Depreciation and amortization		42,146			41,873			84,842			84,212		167,480		168,607
Taxes other than income taxes		9,616			9,504			19,382			19,615		37,085		36,585
Operating income		18,836			10,836			141,923			113,020		224,006		188,198
Other income (deductions)		(5,176	)		2,423			(5,707	)		637		246		(10,670	)
Net interest deductions		18,862			18,531			36,886			36,713		74,264		77,519
Net interest deductions on subordinated debentures		-			1,932			1,912			3,865		5,778		7,730
Income (loss) before income taxes		(5,202	)		(7,204	)		97,418			73,079		144,210		92,279
Income tax expense (benefit)		(1,101	)		(4,468	)		36,202			25,963		50,690		35,842
Contribution to net income (loss) - gas operations	$	(4,101	)	$	(2,736	)	$	61,216		$	47,116	$	93,520	$	56,437

SOUTHWEST GAS CORPORATION
SELECTED STATISTICAL DATA
JUNE 30, 2010


FINANCIAL STATISTICS
Market value to book value per share at quarter end		118	%
Twelve months to date return on equity -- total company		9.2	%
-- gas segment		8.9	%
Common stock dividend yield at quarter end		3.4	%


GAS OPERATIONS SEGMENT
							Authorized
	Authorized			Authorized			Return on
	Rate Base			Rate of			Common
Rate Jurisdiction	(In thousands)			Return			Equity
Arizona	$	1,066,108			8.86	%		10.00	%
Southern Nevada		819,717			7.40			10.15
Northern Nevada		116,584			8.29			10.15
Southern California		143,851			7.87			10.50
Northern California		52,285			8.99			10.50
South Lake Tahoe		11,815			8.99			10.50
Paiute Pipeline Company (1)		84,717			9.47			12.00

(1) Estimated amounts based on rate case settlements.

SYSTEM THROUGHPUT BY CUSTOMER CLASS
	SIX MONTHS ENDED						TWELVE MONTHS ENDED
	JUNE 30,						JUNE 30,
(In dekatherms)		2010			2009			2010		2009
Residential		47,556,591			43,542,586			70,987,598		64,514,089
Small commercial		18,216,906			17,326,439			30,312,892		29,331,177
Large commercial		6,179,464			6,690,623			11,212,962		12,189,966
Industrial / Other		3,014,098			3,964,783			6,311,663		8,749,530
Transportation		49,168,221			51,909,999			101,647,613		112,965,316
Total system throughput		124,135,280			123,434,430			220,472,728		227,750,078


HEATING DEGREE DAY COMPARISON
Actual		1,446			1,252			2,017		1,727
Ten-year average		1,335			1,323			1,895		1,875


Heating degree days for prior periods have been recalculated using the current period customer mix.