SRP Sierra Pacific Resources (New)

LAS VEGAS, July 25 /PRNewswire-FirstCall/ -- Sierra Pacific Resources (NYSE:SRP) today announced consolidated net income applicable to common stock of $36.1 million, or 15 cents per share, for the quarter ended June 30, 2008, compared with net income applicable to common stock of $25.8 million, or 12 cents per share, for the same period in 2007. The improvement in earnings is primarily a result of a rate increase and an increase to allowance for funds used during construction related primarily to the construction of additional generating units at Clark Power Station in Las Vegas and the Tracy Combined Cycle Plant near Reno. During the first six months of 2008, Sierra Pacific Resources earned $60.2 million, or 26 cents per share, compared with $41.4 million, or 19 cents per share, for the first six months of 2007. Michael Yackira, president and chief executive officer of Sierra Pacific Resources, said, "We are very pleased that our financial and operating results remain strong as we address the challenges that lie ahead. The current economic downturn is impacting our operations somewhat, but we are pleased that Nevada's population continues to grow and major resort projects are scheduled to come on line in southern Nevada over the next two years which should improve the economic outlook. "In keeping with our core strategy, we are focused on efficiency and conservation programs, moving forward with renewable energy development and adding efficient traditional generating facilities," Yackira added. "Recently, in order to better serve our growing customer base, we've added 541 megawatts of baseload generation in northern Nevada and by summer's end will have added over 600 megawatts of peaking power in southern Nevada. We've also announced plans to acquire the 598-megawatt, gas-fired, combined cycle Bighorn Generating Station south of Las Vegas, which we expect to close by year end. These projects are consistent with our strategy to help ensure our customers benefit from reliable service and have less dependence on energy markets outside Nevada." Sierra Pacific Resources' utilities contributed gross margin of $304.2 million for the quarter ended June 30, 2008, an increase of 5.7 percent, compared with $287.8 million in the same period in 2007. Retail megawatt hour sales were down 6.1 percent and 2 percent at Nevada Power and Sierra Pacific Power respectively for the second quarter 2008 when compared with the second quarter 2007, primarily due to decreased usage driven by cooler weather and a change in customer usage patterns. Customer growth remains strong with the average number of residential, commercial and industrial electric customers served by Nevada Power increasing by 1.1 percent, 3.1 percent and 3.4 percent, respectively, for the first six-months of 2008 compared with the average customer counts for the same period in 2007. Sierra Pacific Power's average residential, commercial and industrial electric customers increased by 0.9 percent, 2.4 percent and 2 percent, respectively, for the first six months of 2008 compared with the average customer counts for the first six months of 2007. The companies expect to file their Quarterly Reports on Form 10-Q for the period ended June 30, 2008, with the Securities and Exchange Commission on or about August 6, 2008, at which time the Form 10-Q reports will be available without charge through the EDGAR system at the SEC's website. The Form 10-Q reports will also be posted on Sierra Pacific Resources' website, http://www.sierrapacificresources.com/. Webcast Scheduled for 7 a.m. PDT Today Senior management of Sierra Pacific Resources will review the company's second quarter 2008 financial results, regulatory issues and other matters during a conference call and live webcast today, July 25, at 7 a.m. Pacific Daylight 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, 953877, 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 Las Vegas and surrounding areas, and Sierra Pacific Power Company, the electric utility for most of northern Nevada and the Lake Tahoe area of California. Sierra Pacific Power Company 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 and Sierra Pacific Power Company, 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, 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 March 31, 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 Six Months Ended June 30, June 30, 2008 2007 2008 2007 Operating revenues $838,794 $851,894 $1,643,845 $1,608,325 Other operating expenses $98,647 $92,268 $190,322 $177,015 Maintenance $21,472 $30,633 $44,594 $54,378 Depreciation and amortization $64,341 $59,678 $126,411 $115,911 Income taxes $12,928 $7,244 $21,547 $6,489 Taxes other than income $12,658 $11,640 $26,565 $24,619 Operating income $94,201 $86,431 $171,014 $148,361 Other income (expenses): Allowance for other funds used during construction $13,113 $6,612 $25,070 $13,179 Income taxes $(4,099) $(4,675) $(12,188) $(16,058) Interest charges (net of AFUDC) $67,300 $70,617 $135,804 $140,286 Preferred stock dividend requirements $- $- $- $- Net Income Applicable to Common Stock $36,134 $25,754 $60,192 $41,361 Amount per share basic and diluted - Net income applicable to common stock $0.15 $0.12 $0.26 $0.19 Weighted Average Shares of Common Stock Outstanding: Basic - 233,992,721 221,412,345 233,914,046 221,329,347 Diluted - 234,519,562 221,821,195 234,420,336 221,738,312 Capital Structure June 30, 2008 June 30, 2007 Current maturities of long-term debt $10,298 0.1% $109,092 1.5% Long-term debt 4,451,781 59.5% 4,291,833 60.7% Total Debt $4,462,079 59.6% $4,400,925 62.2% Common shareholders' equity $3,024,027 40.4% $2,673,234 37.8% Total Capitalization (including current maturities of long-term debt) $7,486,106 100.0% $7,074,159 100.0% Nevada Power Company Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 Operating revenues $570,223 $575,108 $1,039,395 $993,273 Other operating expenses $62,617 $55,162 $119,712 $106,001 Maintenance $13,608 $20,319 $30,258 $37,783 Depreciation and amortization $42,323 $38,833 $82,953 $74,594 Income taxes $12,865 $8,654 $14,997 $442 Taxes other than income $7,427 $6,692 $15,749 $14,426 Operating income $67,067 $61,228 $107,864 $89,196 Other income (expenses): Allowance for other funds used during construction $7,692 $3,247 $14,550 $6,345 Carrying charge for Lenzie $- $5,998 $- $16,080 Reinstated interest on deferred energy $- $- $- $11,076 Income taxes $(3,131) $(3,553) $(7,522) $(14,131) Interest charges (net of AFUDC) $40,988 $44,268 $82,461 $88,260 Net Income $33,175 $23,604 $41,146 $28,186 Capital Structure June 30, 2008 June 30, 2007 Current maturities of long-term debt $8,636 0.1% $7,449 0.2% Long-term debt 2,664,929 51.2% 2,655,630 54.6% Total Debt $2,673,565 51.3% $2,663,079 54.8% Common shareholder's equity $2,534,866 48.7% $2,200,590 45.2% Total Capitalization (including current maturities of long-term debt) 5,208,431 100.0% $4,863,669 100.0% Sierra Pacific Power Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 Operating revenues $268,567 $276,734 $604,439 $614,733 Other operating expenses $34,765 $35,994 $68,270 $68,842 Maintenance $7,864 $10,314 $14,336 $16,595 Depreciation and amortization $22,018 $20,845 $43,458 $41,317 Income taxes $3,952 $2,686 $13,611 $11,046 Taxes other than income $5,198 $4,902 $10,726 $10,088 Operating Income $24,539 $22,213 $58,508 $56,124 Other income (expenses): Allowance for other funds used during construction $5,421 $3,365 $10,520 $6,834 Income taxes $(953) $(1,282) $(4,527) $(2,493) Interest charges (net of AFUDC) $15,879 $15,454 $32,466 $30,237 Dividend requirements of preferred stock $- $- $- $- Net Income $10,849 $10,008 $35,133 $31,976 Capital Structure June 30, 2008 June 30, 2007 Current maturities of long-term debt $1,662 0.1% $101,643 4.8% Long-term debt 1,261,788 55.8% 1,085,764 51.6% Total Debt $1,263,450 55.9% $1,187,407 56.4% Common shareholder's equity $998,221 44.1% $916,994 43.6% Total Capitalization (including current maturities of long-term debt) $2,261,671 100.0% $2,104,401 100.0% 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 and Sierra Pacific Power Company 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 Six Months Ended June 30, June 30, 2008 2007 2008 2007 Operating Revenues: Electric $570,223 $575,108 $1,039,395 $993,273 Energy Costs: Purchased Power $164,087 $175,716 $257,837 $271,310 Fuel for power generation 209,920 140,773 373,941 304,858 Deferral of energy costs-net (9,691) 67,731 36,084 94,663 $364,316 $384,220 $667,862 $670,831 Gross Margin $205,907 $190,888 $371,533 $322,442 Sierra Pacific Power Company Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 Operating Revenues: Electric $236,415 $245,356 $486,693 $498,235 Gas 32,152 31,378 117,746 116,498 $268,567 $276,734 $604,439 $614,733 Energy Costs: Purchased Power $97,363 $86,309 $187,469 $169,619 Fuel for power generation 60,705 51,285 118,292 115,354 Deferral of energy costs-electric-net (11,695) 18,770 (3,188) 32,631 Gas purchased for resale 27,632 19,862 94,528 91,508 Deferral of energy costs-gas-net (3,774) 3,554 (1,571) 1,609 $170,231 $179,780 $395,530 $410,721 Energy Costs by Segment: Electric $146,373 $156,364 $302,573 $317,604 Gas 23,858 23,416 92,957 93,117 $170,231 $179,780 $395,530 $410,721 Gross Margin by Segment: Electric $90,042 $88,992 $184,120 $180,631 Gas 8,294 7,962 24,789 23,381 $98,336 $96,954 $208,909 $204,012 DATASOURCE: Sierra Pacific Resources CONTACT: analysts, Britta Carlson, +1-702-402-5624, or media, Karl Walquist, +1-775-834-3891, both of Sierra Pacific Resources Web site: http://www.sierrapacificresources.com/

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