News Releases
Sierra Pacific Announces Fourth Quarter Earnings
Feb 19, 2001
9:00pm
Sierra Pacific Resources
Contact: Karl Walquist (775) 834-3891;
Bob Sagan (775) 834-4834
Phone: See above
For Immediate Release
Reno, Nev. -- Sierra Pacific Resources (NYSE: SRP) today reported significant losses for the fourth quarter of 2000, reflecting the growing and unrecovered cost of purchased power in the volatile wholesale market. Wholesale costs were up by 115% and 130% for Nevada Power and Sierra Pacific Power, respectively, Sierra Pacific's utility subsidiaries. The company reported a net loss of $18.2 million or 23 cents per share for common stock for the quarter ended Dec. 31, 2000. For year-end 2000, the company reported a net loss of $39.8 million or 51 cents per shareÂ- a 177% drop from 1999.
"This loss is clear evidence that this problem is real and growing,"said Mark Ruelle, senior vice president and chief financial officer of Sierra Pacific."Our employees have done a magnificent job keeping the lights on in Nevada and reducing expenses throughout our operations during this extraordinary period. However, without some rate relief, the cost of fuel and power is close to crippling our ability to serve the needs of our customers."
Ruelle said the company has reduced regular operational expenses by nearly ten percent as a result of the merger of Nevada Power and Sierra Pacific Resources, but the savings are dwarfed by the soaring cost of fuel and power throughout the Western states. The losses posted by the company are due primarily to nearly $258 million of unanticipated fuel and purchased power cost for the quarter and $889 million for the year. Quarterly operating expenses amounted to $571 million, up 69% from the same quarter in 1999 before adjusting for the deferred energy write-off incurred in 1999. Operating expenses for the year were $2.2 billion, up 107% from the prior year before the 1999 write-off.
"The Company has filed a Comprehensive Energy Plan with the Public Utilities Commission of Nevada to address the unprecedented dislocation in the energy markets and its impact on the company,"Ruelle said.
Nevada Power Company:
Net loss for Nevada Power for the year was $7.9 million compared to 1999 net income of $94.7 million, excluding the deferred energy write-off incurred in 1999. Retail revenues for the year to date increased by $140 million (15%) over 1999 to $1 billion due to warmer than normal weather and customer growth. The cost of purchased and generated power increased by 115% due to higher fuel and purchased power prices and higher volumes. Other operating and maintenance expenses decreased by 9.4% or $18.1 million from 1999 mainly due to efficiencies resulting from the merger.
Sierra Pacific Power Company:
Net income for Sierra Pacific Power Company for the year was $2.1 million compared to net income of $66.2 million for the prior year. Retail revenues for the year to date increased by $29.5 million (4%) over 1999 to $702.1 million (including revenue from discontinued water operations). Electric retail revenues increased by 5% over 1999 due to warmer than normal weather and customer growth. The cost of purchased and generated power increased by 130% primarily as a result of higher prices.
Natural gas local distribution company revenues were 1% higher than in 1999 due to an increase in customers partially offset by mild winter weather. The cost of natural gas purchased for sales to customers increased by 22.1% compared to 1999, despite the lower gas sales. The increase in natural gas costs was primarily due to higher natural gas costs on a per therm basis.
As the Company began experiencing the dislocation in the energy markets it negotiated a global agreement among the utilities, regulators and other parties that granted a net $48 million rate increase to Nevada Power in order to recover increased fuel and purchased power costs. The agreement also allows monthly rate adjustments to reflect changes in fuel and purchased power costs for both Nevada Power and Sierra Pacific Power Company. However, this agreement took effect in July before the most recent surge in wholesale fuel and power costs.
To date, Nevada Power has filed for and the PUCN has approved an additional $85.5 million of monthly fuel and purchased power annual rate increases and Sierra Pacific Power Company has filed for and the PUCN has approved $48.9 million in annual rate increases. Although both utilities are increasing electric rates to recover higher fuel and purchased power costs, the mechanism for adjusting rates is insufficient as it lags changes in actual energy costs and is capped. Consequently, high fuel and purchased power costs are likely to continue affecting earnings negatively until the Comprehensive Energy Plan is implemented or energy costs decline.
Headquartered in Reno, Nevada, Sierra Pacific Resources is a holding company whose principal subsidiaries are Nevada Power Company, the electric utility for southern Nevada, and Sierra Pacific Power Company, the electric utility for most of northern Nevada and the Lake Tahoe area of California, and a natural gas and water distributor in the Reno-Sparks area. Other subsidiaries include the Tuscarora Gas Pipeline Company, which owns 50% interest in an interstate natural gas transmission partnership and Sierra Pacific Communications, a telecommunications company.
Sierra Pacific announced in November 1999 its intention to acquire Portland General Electric from Enron Corporation. The proposed transaction is subject to customary regulatory approvals.
Sierra Pacific Resources'executives will discuss the fourth quarter financial results during a live webcast today, Feb. 20, at 7 a.m. Pacific Standard Time. Interested parties can access the webcast using this link:www.sierrapacificresources.com/investors/newsClick on the StreetFusion icon to access the webcast.
This press release contains forward-looking statements regarding the future performance of Sierra Pacific Resources. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties include, in addition to those discussed herein, all of the factors discussed in the company's Annual Report on Form 10-K for the year ended Dec. 31, 1999, and its Form 10-Q for the quarter ended September 30, 2000. These reports have been filed with the Securities and Exchange Commission and are available without charge through the EDGAR system at its Web site,www.sec.gov.
Sierra Pacific Resources Financial Highlights
(In thousands, except for per share amounts)
Fourth Quarter
Year Ended December 31
* Includes results from the discontinued water operations.
** 1999 amounts exclude the $56 million after tax deferred energy write-off
Note:1999 amounts reflect the three month and twelve month results of operations for Nevada Power Company and reflect the three month and five month results of operations of Sierra Pacific Resources for the period ended Dec. 30, 1999, due to purchase accounting for the merger between Sierra Pacific Resources and Nevada Power Company.
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Contact: Karl Walquist (775) 834-3891;
Bob Sagan (775) 834-4834
Phone: See above
For Immediate Release
Reno, Nev. -- Sierra Pacific Resources (NYSE: SRP) today reported significant losses for the fourth quarter of 2000, reflecting the growing and unrecovered cost of purchased power in the volatile wholesale market. Wholesale costs were up by 115% and 130% for Nevada Power and Sierra Pacific Power, respectively, Sierra Pacific's utility subsidiaries. The company reported a net loss of $18.2 million or 23 cents per share for common stock for the quarter ended Dec. 31, 2000. For year-end 2000, the company reported a net loss of $39.8 million or 51 cents per shareÂ- a 177% drop from 1999.
"This loss is clear evidence that this problem is real and growing,"said Mark Ruelle, senior vice president and chief financial officer of Sierra Pacific."Our employees have done a magnificent job keeping the lights on in Nevada and reducing expenses throughout our operations during this extraordinary period. However, without some rate relief, the cost of fuel and power is close to crippling our ability to serve the needs of our customers."
Ruelle said the company has reduced regular operational expenses by nearly ten percent as a result of the merger of Nevada Power and Sierra Pacific Resources, but the savings are dwarfed by the soaring cost of fuel and power throughout the Western states. The losses posted by the company are due primarily to nearly $258 million of unanticipated fuel and purchased power cost for the quarter and $889 million for the year. Quarterly operating expenses amounted to $571 million, up 69% from the same quarter in 1999 before adjusting for the deferred energy write-off incurred in 1999. Operating expenses for the year were $2.2 billion, up 107% from the prior year before the 1999 write-off.
"The Company has filed a Comprehensive Energy Plan with the Public Utilities Commission of Nevada to address the unprecedented dislocation in the energy markets and its impact on the company,"Ruelle said.
Nevada Power Company:
Net loss for Nevada Power for the year was $7.9 million compared to 1999 net income of $94.7 million, excluding the deferred energy write-off incurred in 1999. Retail revenues for the year to date increased by $140 million (15%) over 1999 to $1 billion due to warmer than normal weather and customer growth. The cost of purchased and generated power increased by 115% due to higher fuel and purchased power prices and higher volumes. Other operating and maintenance expenses decreased by 9.4% or $18.1 million from 1999 mainly due to efficiencies resulting from the merger.
Sierra Pacific Power Company:
Net income for Sierra Pacific Power Company for the year was $2.1 million compared to net income of $66.2 million for the prior year. Retail revenues for the year to date increased by $29.5 million (4%) over 1999 to $702.1 million (including revenue from discontinued water operations). Electric retail revenues increased by 5% over 1999 due to warmer than normal weather and customer growth. The cost of purchased and generated power increased by 130% primarily as a result of higher prices.
Natural gas local distribution company revenues were 1% higher than in 1999 due to an increase in customers partially offset by mild winter weather. The cost of natural gas purchased for sales to customers increased by 22.1% compared to 1999, despite the lower gas sales. The increase in natural gas costs was primarily due to higher natural gas costs on a per therm basis.
As the Company began experiencing the dislocation in the energy markets it negotiated a global agreement among the utilities, regulators and other parties that granted a net $48 million rate increase to Nevada Power in order to recover increased fuel and purchased power costs. The agreement also allows monthly rate adjustments to reflect changes in fuel and purchased power costs for both Nevada Power and Sierra Pacific Power Company. However, this agreement took effect in July before the most recent surge in wholesale fuel and power costs.
To date, Nevada Power has filed for and the PUCN has approved an additional $85.5 million of monthly fuel and purchased power annual rate increases and Sierra Pacific Power Company has filed for and the PUCN has approved $48.9 million in annual rate increases. Although both utilities are increasing electric rates to recover higher fuel and purchased power costs, the mechanism for adjusting rates is insufficient as it lags changes in actual energy costs and is capped. Consequently, high fuel and purchased power costs are likely to continue affecting earnings negatively until the Comprehensive Energy Plan is implemented or energy costs decline.
Headquartered in Reno, Nevada, Sierra Pacific Resources is a holding company whose principal subsidiaries are Nevada Power Company, the electric utility for southern Nevada, and Sierra Pacific Power Company, the electric utility for most of northern Nevada and the Lake Tahoe area of California, and a natural gas and water distributor in the Reno-Sparks area. Other subsidiaries include the Tuscarora Gas Pipeline Company, which owns 50% interest in an interstate natural gas transmission partnership and Sierra Pacific Communications, a telecommunications company.
Sierra Pacific announced in November 1999 its intention to acquire Portland General Electric from Enron Corporation. The proposed transaction is subject to customary regulatory approvals.
Sierra Pacific Resources'executives will discuss the fourth quarter financial results during a live webcast today, Feb. 20, at 7 a.m. Pacific Standard Time. Interested parties can access the webcast using this link:www.sierrapacificresources.com/investors/newsClick on the StreetFusion icon to access the webcast.
This press release contains forward-looking statements regarding the future performance of Sierra Pacific Resources. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties include, in addition to those discussed herein, all of the factors discussed in the company's Annual Report on Form 10-K for the year ended Dec. 31, 1999, and its Form 10-Q for the quarter ended September 30, 2000. These reports have been filed with the Securities and Exchange Commission and are available without charge through the EDGAR system at its Web site,www.sec.gov.
Sierra Pacific Resources Financial Highlights
(In thousands, except for per share amounts)
Fourth Quarter
| 2000 | 1999 | Change | |
| Operating Revenues* | $610,946 | $409,924 | 49.0% |
| Operating Expenses* ** | $571,030 | $337,616 | 69.1% |
| Net (Loss) Income Available for Common before 1999 deferred write-off | $(18,219) | $26,813 | (167.9%) |
| Net (Loss) Available for common as reported | $(18,219) | $(29,187) | (37.6%) |
| Average Shares Outstanding | 78,459 | 69,493 | 12.9% |
| Net (Loss) Income Per Share before 1999 deferred write-off | $(0.23) | $ 0.39 | (159.0%) |
| Net (Loss) Per Share as reported | $(0.23) | $(0.42) | (45.2%) |
Year Ended December 31
| 2000 | 1999 | Change | |
| Operating Revenues* | $2,391,303 | $1,309,131 | 82.7% |
| Operating Expenses* ** | $2,242,645 | $1,081,973 | 107.3% |
| Net (Loss) Income Available for Common before 1999 deferred write-off | $(39,781) | $107,750 | (137.0%) |
| Net (Loss) Income Available for Common as reported | $(39,781) | $51,750 | (177.0%) |
| Average Shares Outstanding | 78,435 | 62,577 | 25.3% |
| Net (Loss) Income Per Share before 1999 deferred write-off | $(0.51) | $1.72 | (129.5%) |
| Net (Loss) Income Per Share as reported | $(0.51) | $0.83 | (161.5%) |
* Includes results from the discontinued water operations.
** 1999 amounts exclude the $56 million after tax deferred energy write-off
Note:1999 amounts reflect the three month and twelve month results of operations for Nevada Power Company and reflect the three month and five month results of operations of Sierra Pacific Resources for the period ended Dec. 30, 1999, due to purchase accounting for the merger between Sierra Pacific Resources and Nevada Power Company.
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