LAS VEGAS, Nov. 3 /PRNewswire-FirstCall/ -- Sierra Pacific Resources
(NYSE: SRP) today announced consolidated net income applicable to common stock
of $150.8 million, or 64 cents per share, for the quarter ended September 30,
2008, compared with consolidated net income applicable to common stock of
$152.2 million, or 69 cents per share, for the same period in 2007.
During the first nine months of 2008, the company earned $211 million, or
90 cents per share, compared with $193.6 million, or 87 cents per share, for
the first nine months of 2007. The increase in earnings for the nine-month
period was primarily the result of general rate increases at the company's
utilities, Nevada Power Company and Sierra Pacific Power Company -- now both
doing business as NV Energy -- and an increase in allowance for funds used
during construction. These increases were partially offset by higher interest
charges in 2008 on long-term debt and income recognized in 2007 as a result of
the settlement with the PUCN regarding accrued interest charges.
Michael Yackira, president and chief executive officer of Sierra Pacific
Resources, said, 'We are pleased that our financial and operating results
remain strong despite our slower rate of growth. We continue to concentrate
on programs and infrastructure improvements within Nevada for Nevadans and we
believe these actions are essential to meet the current and future energy
demands for not only our state but the entire nation.
'In keeping with our core three-part energy supply strategy, we continue
to focus on efficiency and conservation programs, moving forward with
renewable energy developments, and adding more efficient generation facilities
utilizing traditional technologies,' Yackira said. 'Just two weeks ago, we
completed the acquisition of the 598-megawatt Bighorn Generation Facility in
southern Nevada, which we will be renaming the Walter M. Higgins Generating
Station in honor of our former Chairman and CEO. This past summer we added 600
megawatts of peaking capacity at our Clark Generating Station in Las Vegas.
Earlier in the year, the 541-megawatt combined cycle generation unit was
completed at our Tracy Generating Station, making the northern Nevada
operations virtually energy independent for the first time.'
Yackira added, 'The current economic downturn has impacted our operations
somewhat, but our state continues to grow. Major resort projects are scheduled
to come on line in southern Nevada over the next two years. We will continue
to deliver reliable service throughout our state.'
Sierra Pacific Resources' two utilities contributed gross margin of
$478.5 million for the quarter ended September 30, 2008, compared with
$476.5 million in the same period in 2007.
Retail megawatt hour sales were down for the two utilities by 1.5 percent
for the third quarter 2008 when compared with the third quarter 2007,
primarily due to decreased usage driven by milder summer weather and a change
in customer usage patterns.
Customer growth remains strong with the average number of residential,
commercial and industrial electric customers in southern Nevada increasing by
.9 percent, 2.9 percent and 3.9 percent, respectively, for the first nine
months of 2008, compared with the average customer counts for the same period
in 2007. In northern Nevada, average residential, commercial and industrial
electric customers increased by 0.7 percent, 2.0 percent and 4.5 percent,
respectively, for the first nine months of 2008, compared with the average
customer counts for the first nine months of 2007.
Webcast Scheduled for 7 a.m. PST Monday November 3
Senior management of Sierra Pacific Resources will review the company's
third quarter 2008 financial results, regulatory issues and other matters
during a conference call and live webcast Monday, November 3, at 7 a.m.
Pacific Standard Time.
The webcast will be accessible on the Sierra Pacific Resources website:
http://www.sierrapacificresources.com.
An archived version of the webcast will remain on the Sierra Pacific
Resources' website for approximately one month following the live webcast. To
listen to a recording of the call by telephone, call (800) 475-6701, and
international callers should dial (320) 365-3844. Use the conference call
access code, 965502, to listen to the recording.
Headquartered in Nevada, Sierra Pacific Resources is a holding company
whose principal subsidiaries are Nevada Power Company, the electric utility
for most of southern Nevada, and Sierra Pacific Power Company, the electric
utility for most of northern Nevada and the Lake Tahoe area of California.
Nevada Power Company and Sierra Pacific Power Company are now both doing
business as NV Energy. NV Energy also distributes natural gas in the
Reno-Sparks area of northern Nevada.
This press release contains forward-looking statements regarding the
future performance of Sierra Pacific Resources and its subsidiaries, Nevada
Power Company d/b/a NV Energy and Sierra Pacific Power Company d/b/a NV Energy
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are subject to a variety of risks and uncertainties that
could cause actual results to differ materially from current expectations. For
Sierra Pacific Resources, these risks and uncertainties include, but are not
limited to, Sierra Pacific Resources' ability to maintain access to the
capital markets, Sierra Pacific Resources' ability to receive dividends from
its subsidiaries, the financial performance of Sierra Pacific Resources'
subsidiaries, particularly Nevada Power Company and Sierra Pacific Power
Company, and the discretion of Sierra Pacific Resources' Board of Directors
with respect to the payment of future dividends based on its periodic review
of factors that ordinarily affect dividend policy, such as current and
prospective financial condition, earnings and liquidity, prospective business
conditions, regulatory factors, and dividend restrictions in Sierra Pacific
Resources' and its subsidiaries' financing agreements. For Nevada Power
Company and Sierra Pacific Power Company, these risks and uncertainties
include, but are not limited to, future economic conditions both nationally
and regionally, changes in the rate of industrial, commercial and residential
growth in their service territories, unfavorable rulings in their pending and
future regulatory filings, their ability to maintain access to the capital
markets for general corporate purposes and to finance construction projects,
their ability to purchase sufficient fuel, natural gas and power to meet their
power demands and natural gas demands for Sierra Pacific Power Company,
financial market conditions, changes in environmental laws and regulations,
and construction risks. Additional cautionary statements regarding other risk
factors that could have an effect on the future performance of Sierra Pacific
Resources, Nevada Power Company and Sierra Pacific Power Company are contained
in their Quarterly Reports on Form 10-Q for the quarter ended June 30, 2008
and their Annual Reports on Form 10-K and/or Form 10-K/A for the year ended
December 31, 2007, each filed with the SEC. The companies undertake no
obligation to release publicly the result of any revisions to these forward-
looking statements that may be made to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
Financial Highlights
(Dollars in thousands, except per share amounts)
(Unaudited)
Sierra Pacific Resources
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
Operating revenues $1,118,131 $1,206,050 $2,761,976 $2,814,375
Other operating
expenses $105,087 $98,399 $295,409 $275,414
Maintenance $20,337 $23,308 $64,931 $77,686
Depreciation and
amortization $59,245 $58,876 $185,656 $174,787
Income taxes $61,148 $69,677 $82,695 $76,166
Taxes other than income $13,701 $13,091 $40,266 $37,710
Operating income $218,952 $213,137 $389,966 $361,498
Other income (expense):
Allowance for other
funds used during
construction $7,865 $9,214 $32,935 $22,393
Income taxes $(4,263) $(4,572) $(16,451) $(20,630)
Interest charges (net
of AFUDC) $77,696 $69,751 $213,500 $210,037
Net Income Applicable
to Common Stock $150,783 $152,222 $210,975 $193,583
Amount per share basic
and diluted - Net
income applicable to
common stock $0.64 $0.69 $0.90 $0.87
Weighted Average
Shares of Common
Stock Outstanding:
Basic - 234,096,559 221,612,243 233,975,552 221,424,682
Diluted - 234,655,132 221,968,802 234,499,269 221,783,424
Capital Structure September 30, 2008 September 30, 2007
Current maturities of
long-term debt $9,794 0.1% $109,614 1.5%
Long-term debt 4,793,078 60.2% 4,337,745 59.8%
Total Debt $4,802,872 60.3% $4,447,359 61.3%
Common shareholders'
equity $3,156,607 39.7% $2,808,253 38.7%
Total Capitalization
(including current
maturities of long-
term debt) $7,959,479 100.0% $7,255,612 100.0%
Nevada Power Company
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
Operating revenues $826,825 $894,226 $1,866,220 $1,887,499
Other operating
expenses $69,432 $61,400 $189,144 $167,401
Maintenance $12,469 $16,360 $42,727 $54,143
Depreciation and
amortization $37,902 $38,151 $120,855 $112,745
Income taxes $54,595 $65,407 $69,592 $65,849
Taxes other than income $8,266 $8,005 $24,015 $22,431
Operating income $165,001 $170,264 $272,865 $259,460
Other income (expense):
Allowance for other
funds used during
construction $6,543 $4,701 $21,093 $11,046
Carrying charge for
Lenzie $- $- $- $16,080
Reinstated interest on
deferred energy $- $- $- $11,076
Income taxes $(3,828) $(3,518) $(11,350) $(17,649)
Interest charges (net
of AFUDC) $48,271 $43,895 $130,732 $132,155
Net Income $124,336 $133,094 $165,482 $161,280
Capital Structure September 30, 2008 September 30, 2007
Current maturities of
long-term debt $8,656 0.2% $7,971 0.2%
Long-term debt 2,975,201 53.0% 2,677,193 53.4%
Total Debt $2,983,857 53.2% $2,685,164 53.6%
Common shareholder's
equity $2,629,078 46.8% $2,323,684 46.4%
Total Capitalization
(including current
maturities of long-
term debt) $5,612,935 100.0% $5,008,848 100.0%
Sierra Pacific Power
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
Operating revenues $291,298 $311,818 $895,737 $926,551
Other operating
expenses $35,474 $36,228 $103,744 $105,070
Maintenance $7,868 $6,948 $22,204 $23,543
Depreciation and
amortization $21,343 $20,726 $64,801 $62,043
Income taxes $10,602 $9,825 $24,213 $20,871
Taxes other than income $5,402 $5,050 $16,128 $15,138
Operating Income $50,108 $38,118 $108,616 $94,242
Other income (expense):
Allowance for other
funds used during
construction $1,322 $4,513 $11,842 $11,347
Income taxes $(683) $(1,104) $(5,210) $(3,597)
Interest charges (net
of AFUDC) $18,992 $14,962 $51,548 $45,199
Net Income $32,919 $25,552 $68,052 $57,528
Capital Structure September 30, 2008 September 30, 2007
Current maturities of
long-term debt $1,139 0.0% $101,643 4.7%
Long-term debt 1,292,867 56.0% 1,110,166 51.7%
Total Debt $1,294,006 56.0% $1,211,809 56.4%
Common shareholder's
equity $1,015,690 44.0% $937,546 43.6%
Total Capitalization
(including current
maturities of long-
term debt) $2,309,696 100.0% $2,149,355 100.0%
Gross margin is presented by Nevada Power Company and Sierra Pacific Power
Company in order to provide information by segment that management believes
aids the reader in determining how profitable the electric and gas business is
at the most fundamental level. Gross margin, which is a 'non-GAAP financial
measure' as defined in accordance with SEC rules, provides a measure of income
available to support the other operating expenses of the business and is
utilized by management in its analysis of its business.
Nevada Power Company d/b/a NV Energy and Sierra Pacific Power Company
d/b/a NV Energy believe presenting gross margin allows the reader to assess
the impact of regulatory treatment and their overall regulatory environment on
a consistent basis. Gross margin, as a percentage of revenue, is primarily
impacted by the fluctuations in regulated electric and natural gas supply
costs versus the fixed rates collected from customers. While these fluctuating
costs impact gross margin as a percentage of revenue, they only impact gross
margin amounts if the costs cannot be passed through to customers. Gross
margin, which Nevada Power Company and Sierra Pacific Power Company calculate
as operating revenues less fuel and purchased power costs, provides a measure
of income available to support the other operating expenses. Gross margin
changes based on such factors as general base rate adjustments (which are
required to be filed by statute every three years) and reflect Nevada Power
Company and Sierra Pacific Power Company's strategy to increase internal power
generation versus purchased power, which generates no gross margin.
Reconciliations between GAAP operating revenues and gross margin are provided
in tables herein. These non-GAAP measures should not be considered as
substitutes for the GAAP measures.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Gross Margin
(Dollars in thousands)
(Unaudited)
Nevada Power Company
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
Operating Revenues:
Electric $826,825 $894,226 $1,866,220 $1,887,499
Energy Costs:
Purchased Power $319,324 $313,487 $577,161 $584,797
Fuel for power generation 240,027 166,284 613,968 471,142
Deferral of energy costs-net (80,191) 54,868 (44,107) 149,531
$479,160 $534,639 $1,147,022 $1,205,470
Gross Margin $347,665 $359,587 $719,198 $682,029
Sierra Pacific Power Company
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
Operating Revenues:
Electric $271,919 $290,979 $758,612 $789,214
Gas 19,379 20,839 137,125 137,337
$291,298 $311,818 $895,737 $926,551
Energy Costs:
Purchased Power $64,005 $96,980 $251,474 $266,599
Fuel for power generation 92,845 71,896 211,137 187,250
Deferral of energy costs-
electric-net (9,384) 11,792 (12,572) 44,423
Gas purchased for resale 13,760 11,661 108,288 103,169
Deferral of energy costs-
gas-net (725) 2,594 (2,296) 4,203
$160,501 $194,923 $556,031 $605,644
Energy Costs by Segment:
Electric $147,466 $180,668 $450,039 $498,272
Gas 13,035 14,255 105,992 107,372
$160,501 $194,923 $556,031 $605,644
Gross Margin by Segment:
Electric $124,453 $110,311 $308,573 $290,942
Gas 6,344 6,584 31,133 29,965
$130,797 $116,895 $339,706 $320,907
SOURCE Sierra Pacific Resources
