NV Energy Second Quarter Results Benefit From Warmer Weather; Earnings Guidance Affirmed

27 Jul, 2012, 07:00 ET from NV Energy, Inc.

LAS VEGAS, July 27, 2012 /PRNewswire/ -- NV Energy, Inc. (NYSE: NVE) today announced financial results for the three- and six-month periods ended June 30, 2012.

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NV Energy, Inc.

Consolidated Results

Periods Ended June 30

Net Income

EPS

($ in millions)

(diluted)

2012

2011

2012

2011

Three Months

$

69.4

$

12.9

$

0.29

$

0.05

Six Months

81.6

15.2

0.34

0.06

"Our improved results in the second quarter were largely due to unusually warm weather, higher earnings associated with our investment in the Harry Allen Generating Station, and settlement proceeds," said Michael Yackira, NV Energy president and chief executive officer.  "Operating and maintenance expenses were virtually unchanged, reflecting the continued success of our cost control efforts.  We have made investments over the past five years to reduce Nevada's dependence on purchased power.  This investment strategy has resulted in residential customer rates that are about the same as they were five years ago."

The warmer weather increased results for the second quarter of 2012 by an estimated $0.11 per share compared to the second quarter of 2011 and by approximately $0.07 per share compared to historically normal conditions.  Mild weather in the second quarter of 2011 had adversely affected earnings by about $0.04 per share compared with historically normal conditions. Cooling degree-days in southern Nevada in the second quarter of 2012 were 44 percent greater than the same period in 2011, and 23 percent greater than normal.

As previously disclosed, adjustments associated with a May 2011 regulatory decision reduced results for the second quarter of 2011 by $0.03 per share ($8.6 million pre-tax).

Earnings Guidance

As announced on May 8, 2012, NV Energy expects to earn between $1.15 and $1.25 per share for the year 2012.  For the first half of 2012, earnings were $0.34 per share.

"Results for the first half of the year exceeded our expectations," Yackira said.  "With summer still underway and third quarter weather a key variable for full-year results, we are making no changes to our earnings guidance range for 2012 at present.  However, assuming normal weather in the second half of the year, there is the potential for annual earnings to be at the upper end of the range."

Key factors expected to drive financial results in 2012 and beyond are shown in the "Second Quarter 2012: Financial Results" presentation posted on www.nvenergy.com this morning.  Management's earnings expectations assume actual weather for the first half of 2012, normal weather for the remainder of the year, and other drivers listed in the presentation.  The estimated impact of weather on earnings is based on assumed relationships between cooling and heating degree-days and demand, with normal conditions based on 20-year averages.

Webcast Scheduled for 7 a.m. PDT today, Friday, July 27, 2012

Senior management of NV Energy will review the company's second quarter 2012 financial results and other matters during a conference call and live webcast today, Friday, July 27, at 7 a.m. Pacific Daylight Time.

The webcast will be accessible on the NV Energy website at: www.nvenergy.com.

A taped replay will be available on the company's website and by telephone for approximately 30 days.  To listen to the replay by telephone, call (800) 475-6701. International callers should dial (320) 365-3844. Use the conference call access code, 252400.

Headquartered in Las Vegas, NV Energy, Inc. is a holding company whose principal subsidiaries, Nevada Power Company and Sierra Pacific Power Company, are doing business as NV Energy. Serving a combined 45,592 square-mile service territory, NV Energy provides a wide range of energy services and products to approximately 2.4 million citizens of Nevada and nearly 40 million tourists annually.

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the future performance of NV Energy, Inc. and its subsidiaries, Nevada Power Company and Sierra Pacific Power Company both d/b/a NV Energy. Forward-looking statements include earnings guidance and estimates or forecasts of operating and financial metrics.  These statements reflect current expectations of future conditions and events and as such are subject to a variety of risks, uncertainties and assumptions that could cause actual results to differ materially from current expectations. These risks, uncertainties and assumptions  include, but are not limited to, NV Energy Inc.'s ability to maintain access to the capital markets, NV Energy Inc.'s ability to receive dividends from its subsidiaries, the financial performance of NV Energy Inc.'s subsidiaries, particularly Nevada Power Company and Sierra Pacific Power Company both d/b/a NV Energy, and the discretion of NV Energy Inc.'s 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 NV Energy Inc.'s and its subsidiaries' financing agreements. For Nevada Power Company and Sierra Pacific Power Company both d/b/a NV Energy, 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, their ability to procure sufficient renewable energy sources in each compliance year to satisfy the Nevada Renewable Energy Portfolio Standard, changes in environmental laws and regulations, construction risks, including but not limited to those associated with the ON Line project, their ability to maintain access to the capital markets for general corporate purposes and to finance construction projects, employee workforce factors, unseasonable weather, drought, wildfire and other natural phenomena, explosions, fires, accidents, mechanical breakdowns that may occur while operating and maintaining an electric and natural gas system,  their ability to purchase sufficient fuel, natural gas and power to meet their power demands and natural gas demands for Sierra Pacific Power Company d/b/a NV Energy, financial market conditions, and unfavorable rulings in their pending and future regulatory filings. Further risks, uncertainties and assumptions that may cause actual results to differ from current expectations pertain to weather conditions, customer and sales growth, plant outages, operations and maintenance expense, depreciation and allowance for funds used during construction, interest rates and expense, cash flow and regulatory matters.  Additional cautionary statements regarding other risk factors that could have an effect on the future performance of NV Energy, Inc., Nevada Power Company and Sierra Pacific Power Company both d/b/a NV Energy are contained in their Annual Reports on Form 10-K for the year ended December 31, 2011, and quarterly reports on Form 10-Q for the period ended March 31, 2012, each filed with the Securities and Exchange Commission. NV Energy Inc., Nevada Power Company and Sierra Pacific Power Company both d/b/a NV Energy 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.

NV ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands, Except Per Share Amounts)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2012

2011

2012

2011

OPERATING REVENUES

$

740,698

$

674,931

$

1,352,118

$

1,315,914

OPERATING EXPENSES:

Fuel for power generation

112,585

156,803

229,620

303,141

Purchased power

164,092

160,308

281,208

295,324

Gas purchased for resale

9,492

24,984

41,109

77,616

Deferred energy

10,490

(8,106)

(1,249)

(10,058)

Energy efficiency program costs

24,600

-

44,025

-

Other operating expenses

103,371

97,547

206,972

203,521

Maintenance

24,650

32,186

57,176

61,948

Depreciation and amortization

96,316

89,606

187,178

172,708

Taxes other than income

14,266

14,684

28,775

30,929

Total Operating Expenses

559,862

568,012

1,074,814

1,135,129

OPERATING INCOME

180,836

106,919

277,304

180,785

OTHER INCOME (EXPENSE):

Interest expense

(net of AFUDC-debt: $1,908, $2,835, $3,503 and $9,045)

(74,564)

(80,879)

(152,495)

(158,222)

Interest income (expense) on regulatory items

(1,977)

(1,379)

(4,179)

(2,267)

AFUDC-equity

2,319

3,522

4,251

11,164

Other income

6,291

1,756

10,485

4,740

Other expense

(4,640)

(9,087)

(7,700)

(13,743)

Total Other Income (Expense)

(72,571)

(86,067)

(149,638)

(158,328)

Income Before Income Tax Expense

108,265

20,852

127,666

22,457

Income tax expense

38,826

7,964

46,054

7,239

NET INCOME

69,439

12,888

81,612

15,218

Other comprehensive income (loss):

Change in compensation retirement benefits liability and amortization

(Net of taxes $(83), $(394), $(172) and $(1,009))

154

731

309

1,873

Change in market value of risk management assets and liabilities

(Net of taxes $123, $0, $264 and $0)

(229)

-

(475)

-

OTHER COMPREHENSIVE INCOME (LOSS)

(75)

731

(166)

1,873

COMPREHENSIVE INCOME

$

69,364

$

13,619

$

81,446

$

17,091

Amount per share basic and diluted

Net income per share - basic

$

0.29

$

0.05

$

0.35

$

0.06

Net income per share - diluted

$

0.29

$

0.05

$

0.34

$

0.06

Weighted Average Shares of Common Stock Outstanding - basic

235,999,750

235,867,068

235,999,750

235,697,687

Weighted Average Shares of Common Stock Outstanding - diluted

237,903,276

237,278,546

237,715,070

237,027,656

Dividends Declared Per Share of Common Stock

$

0.17

$

0.12

$

0.30

$

0.24

NV ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Share Amounts)

(Unaudited)

June 30,

December 31,

2012

2011

ASSETS

Current Assets: 

Cash and cash equivalents

$

122,768

$

145,944

Accounts receivable less allowance for uncollectible accounts:

2012 - $7,171; 2011 - $8,150

437,492

355,091

Materials, supplies and fuel, at average cost

146,454

129,663

Current income taxes receivable

-

82

Deferred income taxes

134,426

104,958

Other current assets

35,263

36,782

Total Current Assets

876,403

772,520

Utility Property:

Plant in service

12,025,938

11,923,717

Construction work-in-progress

617,591

487,427

Total

12,643,529

12,411,144

Less accumulated provision for depreciation

3,300,961

3,184,071

Total Utility Property, Net

9,342,568

9,227,073

Investments and other property, net

57,634

57,021

Deferred Charges and Other Assets:

Deferred energy

95,599

102,525

Regulatory assets

1,161,651

1,186,127

Regulatory asset for pension plans

209,698

215,656

Other deferred charges and assets

79,230

74,206

Total Deferred Charges and Other Assets

1,546,178

1,578,514

TOTAL ASSETS

$

11,822,783

$

11,635,128

(Continued)

NV ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Share Amounts)

(Unaudited)

June 30,

December 31,

LIABILITIES AND SHAREHOLDERS' EQUITY

2012

2011

Current Liabilities:

Current maturities of long-term debt

$

8,054

$

139,985

Accounts payable

321,962

312,990

Accrued expenses

118,020

128,144

Deferred energy

245,126

245,164

Other current liabilities

72,034

65,572

Total Current Liabilities

765,196

891,855

Long-term debt

5,130,322

5,008,931

Commitments and Contingencies

Deferred Credits and Other Liabilities:

Deferred income taxes

1,367,358

1,306,510

Deferred investment tax credit

14,861

16,140

Accrued retirement benefits

97,258

92,351

Regulatory liabilities

521,731

486,259

Other deferred credits and liabilities

509,332

427,003

Total Deferred Credits and Other Liabilities

2,510,540

2,328,263

Shareholders' Equity:

Common stock, $1.00 par value; 350 million shares authorized

235,999,750 issued and outstanding for 2012 and 2011

236,000

236,000

Other paid-in capital

2,713,736

2,713,736

Retained earnings

475,089

464,277

Accumulated other comprehensive loss

(8,100)

(7,934)

Total Shareholders' Equity

3,416,725

3,406,079

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

11,822,783

$

11,635,128

(Concluded)

NV ENERGY, INC.

FREE CASH FLOW AND CONSOLIDATED OPERATING STATISTICS

(Unaudited)

FREE CASH FLOW

(dollars in thousands)

Six Months Ended June 30,

Change from

2012

2011

Prior Year

Free Cash Flow*

$

31,104

$

(107,688)

128.9

%

*

Free cash flow is a non-GAAP financial measure as defined by the SEC.  See the "Non-GAAP Financial Measures" section for additional information and GAAP reconciliation.    

ELECTRIC SALES - MWh's

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

Change from

Prior Year

Change in

Average

Customers

2012

2011

Change from

Prior Year

Change in

Average

Customers

Residential

2,801

2,248

24.6

%

1.3

%

4,937

4,372

12.9

%

1.3

%

Commercial

1,873

1,760

6.4

%

0.3

%

3,490

3,330

4.8

%

-

%

Industrial

2,727

2,669

2.2

%

(2.0)

%

5,011

4,968

0.9

%

(2.3)

%

TOTAL RETAIL

7,401

6,677

10.8

%

1.2

%

13,438

12,670

6.1

%

1.1

%

GAS SALES - Dth

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

Change from

Prior Year

2012

2011

Change from

Prior Year

Residential

1,263

1,718

(26.5)

%

4,970

5,680

(12.5)

%

Commercial

685

837

(18.2)

%

2,565

2,838

(9.6)

%

Industrial

247

316

(21.8)

%

723

887

(18.5)

%

TOTAL RETAIL

2,195

2,871

(23.5)

%

8,258

9,405

(12.2)

%

ELECTRIC SOURCES - MWh's

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

Change from

Prior Year

2012

2011

Change from

Prior Year

Generated

5,009

4,464

12.2

%

9,474

8,286

14.3

%

Purchased

3,046

2,822

7.9

%

5,083

5,504

(7.6)

%

TOTAL

8,055

7,286

14,557

13,790

DEGREE DAYS

Three Months Ended June 30,

Six Months Ended June 30,

% Change From

% Change From

2012

2011

Normal*

Prior Year

Normal

2012

2011

Normal*

Prior Year

Normal

SOUTH

Heating

62

85

77

(27.1)

%

(19.5)

%

986

1,131

1,112

(12.8)

%

(11.3)

%

Cooling

1,417

985

1,153

43.9

%

22.9

%

1,458

1,017

1,181

43.4

%

23.5

%

NORTH

Heating

548

883

715

(37.9)

%

(23.4)

%

2,676

3,198

2,943

(16.3)

%

(9.1)

%

Cooling

235

112

179

109.8

%

31.3

%

235

112

179

109.8

%

31.3

%

*

Normal = 20-year average

NEVADA POWER COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2012

2011

2012

2011

OPERATING REVENUES

$

553,143

$

473,898

$

948,831

$

863,966

OPERATING EXPENSES:

Fuel for power generation

81,258

114,744

161,807

215,814

Purchased power

135,276

122,408

216,807

217,974

Deferred energy

5,053

2,350

7,224

9,080

Energy efficiency program costs

21,200

-

36,974

-

Other operating expenses

68,650

61,935

135,112

127,036

Maintenance

16,988

19,325

40,061

41,662

Depreciation and amortization

69,131

61,913

134,121

119,586

Taxes other than income

8,596

9,046

17,050

19,104

Total Operating Expenses

406,152

391,721

749,156

750,256

OPERATING INCOME

146,991

82,177

199,675

113,710

OTHER INCOME (EXPENSE):

Interest expense

(net of AFUDC-debt: $1,314, $2,330, $2,493 and $8,120)

(52,602)

(55,736)

(107,007)

(107,769)

Interest income (expense) on regulatory items

(1,849)

126

(3,865)

761

AFUDC-equity

1,577

2,855

2,990

9,953

Other income

5,392

568

7,101

2,114

Other expense

(2,993)

(5,179)

(4,339)

(7,911)

Total Other Expense

(50,475)

(57,366)

(105,120)

(102,852)

Income Before Income Tax Expense

96,516

24,811

94,555

10,858

Income tax expense

34,219

8,748

33,574

3,815

NET INCOME

62,297

16,063

60,981

7,043

Other comprehensive income:

Change in compensation retirement benefits liability and amortization

(Net of taxes $(38), $(108), $(70) and $(513))

64

200

127

953

COMPREHENSIVE INCOME

$

62,361

$

16,263

$

61,108

$

7,996

NEVADA POWER COMPANY

 CONSOLIDATED OPERATING STATISTICS

(Unaudited)

ELECTRIC SALES - MWh's

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

Change from

Prior Year

Change in

Average

Customers

2012

2011

Change from

Prior Year

Change in

Average

Customers

Residential

2,331

1,781

30.9

%

1.6

%

3,867

3,310

16.8

%

1.5

%

Commercial

1,149

1,073

7.1

%

0.5

%

2,107

1,988

6.0

%

0.3

%

Industrial

2,040

2,027

0.6

%

(2.7)

%

3,691

3,723

(0.9)

%

(2.6)

%

TOTAL RETAIL

5,520

4,881

13.1

%

1.4

%

9,665

9,021

7.1

%

1.4

%

ELECTRIC SOURCES - MWh's

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

Change from

Prior Year

2012

2011

Change from

Prior Year

Generated

3,871

3,487

11.0

%

7,158

6,260

14.3

%

Purchased

1,997

1,718

16.2

%

3,023

3,301

(8.4)

%

TOTAL

5,868

5,205

10,181

9,561

SIERRA PACIFIC POWER COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2012

2011

2012

2011

OPERATING REVENUES:

Electric

$

168,007

$

164,582

$

337,813

$

343,199

Gas

19,544

36,448

65,466

108,742

Total Operating Revenues

187,551

201,030

403,279

451,941

OPERATING EXPENSES:

Fuel for power generation

31,327

42,059

67,813

87,327

Purchased power

28,816

37,900

64,401

77,350

Gas purchased for resale

9,492

24,984

41,109

77,616

Deferral of energy - electric - net

4,314

(11,898)

(8,356)

(23,829)

Deferral of energy - gas - net

1,123

1,442

(117)

4,691

Energy efficiency program costs

3,400

-

7,051

-

Other operating expenses

33,654

34,687

70,086

74,903

Maintenance

7,662

12,861

17,115

20,286

Depreciation and amortization

27,185

27,693

53,057

53,122

Taxes other than income

5,625

5,599

11,488

11,623

Total Operating Expenses

152,598

175,327

323,647

383,089

OPERATING INCOME

34,953

25,703

79,632

68,852

OTHER INCOME (EXPENSE):

Interest expense