News Releases

Sierra Pacific Resources Reports Second Quarter Earnings

Jul 17, 1996

Sierra Pacific Resources
Contact: Malyn Malquist or Victor Pena
Phone: (775)834-5400 (Malquist); (775)834-5800 (Pena)

For Immediate Release

Sierra Pacific Resources (NYSE: SRP) on July 17 reported second quarter net income of 49 cents per share of common stock versus 37 cents for the same period last year. When adjusted for non-utility and one-time items, such as the gain on a land sale in 1996 and a 1995 customer refund associated with the settlement of a disputed coal contract, net income was up by 2 percent compared to the same quarter in 1995. Net income available for common shareholders for the second quarter was $14.8 million. For the 12-month period ended June 30, 1996, net income per share was $2.14 compared to $1.83 for the 12 months ended June 30, 1995. Revenues for the 12-month period ended June 30, 1996, were lower by 3 percent compared to the same period in 1995 due to land sales in the second half of 1994 by the company's non-utility real estate subsidiary, and a rate decrease in the second quarter of 1995 for all Nevada electric customers.

Second quarter 1996 earnings for Sierra Pacific Power Co., the company's principal subsidiary, were up due to increased energy sales resulting from customer growth and lower energy costs. Earnings also increased by 6 cents per share after taxes due to a one-time write off of $2.9 million in the second quarter of 1995 related to a 1978 coal purchase contract. The availability of low cost natural gas supplies from the Tuscarora natural gas pipeline to fuel Sierra Pacific's Tracy Station generating units also contributed to the earnings growth.

Expenses related to the proposed merger with The Washington Water Power Company, which was terminated in June 1996, have been substantially recognized in earnings in prior periods. The impact on second quarter 1996 earnings is limited to final expenses associated with the cessation of merger activities.

Second quarter 1996 earnings for the company's Tuscarora Gas Pipeline Co. subsidiary accounted for an earnings increase of approximately 2 cents per share after taxes. The Tuscarora gas pipeline was placed in service in December 1995 and has experienced profitable operations for the full second quarter 1996.

Lands of Sierra, the company's real estate subsidiary, contributed earnings of approximately 4 cents per share after taxes resulting from the sale of property located in Tahoe City, Calif. The sale is consistent with Sierra Pacific's strategic goal of profitably exiting the real estate business.

"Preparations for the merger greatly strengthened our position as a stand-alone company," said Malyn Malquist, senior vice president and chief financial officer."We've reduced our work force and streamlined our operations. In addition, we recently signed long-term contracts to provide electric service to many of our largest electric customers, including several major gold mines."

Sierra Pacific Resources is the holding company for Sierra Pacific Power Co., an electric, natural gas and water utility that serves most of northern Nevada and parts of northeastern California. Other subsidiaries include the Tuscarora Gas Pipeline Co. and Lands of Sierra.