Las Vegas, NV-based Southwest Gas Corp. Monday reported its second quarter loss had to be increased, following settlement earlier in the month of the pending litigation surrounding its failed merger with ONEOK Inc., the holding company for Oklahoma Natural Gas Co. Southwest said its second quarter loss was now $20.6 million, or 63 cents/share, compared with $11.1 million, or 35 cents/share, recorded for the same period a year earlier.

As a result of its settlement with the Oklahoma utility holding company, Southwest said it booked a $14.5 million pretax charge in the quarter. Excluding that charge, the second quarter 2002 loss would have been 35 cents/share, Southwest said. Another settlement, with Southern Union Co. related to the same failed merger attempts, was announced just prior to ONEOK deal that came last Friday.

“Notwithstanding the impact of the settlements, the second quarter continued the first quarter trend of improved period-over-period operating results, as operating income was $6.3 million higher than the second quarter of 2001,” said Michael O. Maffie, Southwest’s CEO. “However, the operating improvement was tempered by several unfavorable nonoperating factors and an extremely warm April.”

Southwest, which serves almost 1.5 million customers in Nevada, Arizona and the mountain-desert regions of Southern California, said that for the twelve months ended June 30, 2002, net income was $36.8 million, or $1.13 per basic share, compared to $45.5 million, or $1.43 per basic share, during the twelve-month period ended June 30, 2001. Excluding the merger litigation settlements, net income for the current period would have been $45.8 million, or $1.41 per basic share.

In a separate action pending, the California Public Utilities Commission has a proposed $2.6 million disallowance and rebate related to Southwest’s California operations, where customers were complaining last winter about excessively high bills due to last year’s wholesale market price spike.

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