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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

     
þ
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 2005

OR

     
o
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM                TO
             
    Registrant, Address of        
Commission File   Principal Executive Offices and Telephone   I.R.S. employer   State of
Number   Number   Identification Number   Incorporation
 
            
1-08788
  SIERRA PACIFIC RESOURCES   88-0198358   Nevada
  P.O. Box 10100        
  (6100 Neil Road)        
  Reno, Nevada 89520-0400 (89511)        
  (775) 834-4011        
 
            
2-28348
  NEVADA POWER COMPANY   88-0420104   Nevada
  6226 West Sahara Avenue        
  Las Vegas, Nevada 89146        
  (702) 367-5000        
 
            
0-00508
  SIERRA PACIFIC POWER COMPANY   88-0044418   Nevada
  P.O. Box 10100        
  (6100 Neil Road)        
  Reno, Nevada 89520-0400 (89511)        
  (775) 834-4011        

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether any registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Sierra Pacific Resources;     Yes þ No o;        Nevada Power Company            Yes o No þ; Sierra Pacific Power Company;     Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

     
Class
  Outstanding at May 3, 2004
Common Stock, $1.00 par value of Sierra Pacific Resources
  117,569,828 Shares

Sierra Pacific Resources is the sole holder of the 1,000 shares of outstanding Common Stock, $1.00 stated value, of Nevada Power Company. Sierra Pacific Resources is the sole holder of the 1,000 shares of outstanding Common Stock, $3.75 stated value, of Sierra Pacific Power Company.

This combined Quarterly Report on Form 10-Q is separately filed by Sierra Pacific Resources, Nevada Power Company and Sierra Pacific Power Company. Information contained in this document relating to Nevada Power Company is filed by Sierra Pacific Resources and separately by Nevada Power Company on its own behalf. Nevada Power Company makes no representation as to information relating to Sierra Pacific Resources or its subsidiaries, except as it may relate to Nevada Power Company. Information contained in this document relating to Sierra Pacific Power Company is filed by Sierra Pacific Resources and separately by Sierra Pacific Power Company on its own behalf. Sierra Pacific Power Company makes no representation as to information relating to Sierra Pacific Resources or its subsidiaries, except as it may relate to Sierra Pacific Power Company.

 
 

 

Table of Contents

SIERRA PACIFIC RESOURCES
NEVADA POWER COMPANY
SIERRA PACIFIC POWER COMPANY
QUARTERLY REPORTS ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2005

CONTENTS

PART I — FINANCIAL INFORMATION

         
ITEM 1. Financial Statements
        
 
        
Sierra Pacific Resources -
        
    3  
 
        
    5  
 
        
    6  
 
        
Nevada Power Company -
        
    7  
 
        
    8  
 
        
    9  
 
        
Sierra Pacific Power Company -
        
    10  
 
        
    11  
 
        
    12  
 
        
    13  
 
        
    28  
    32  
    35  
    40  
 
        
    48  
 
        
    49  
 
        
       
    49  
 
        
    55  
 
        
    55  
 
        
    55  
 
        
    56  
 EX-10.1 Collective Bargaining Agreement dated as of February 1, 2005
 Ex-31.1 Section 302 Certification of CEO
 Ex-31.2 Section 302 Certification of CFO
 Ex-32.1 Section 906 Certification of CEO
 Ex-32.2 Section 906 Certification of CFO

2

Table of Contents

SIERRA PACIFIC RESOURCES

CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
                 
    March 31,     December 31,  
    2005     2004  
ASSETS
                
Utility Plant at Original Cost:
                
Plant in service
   $ 6,664,413     $ 6,604,449  
Less accumulated provision for depreciation
     2,123,904       2,083,434  
 
            
 
     4,540,509       4,521,015  
Construction work-in-progress
     502,417       405,911  
 
            
 
     5,042,926       4,926,926  
 
            
Investments and other property, net
     62,739       64,596  
 
            
 
                
Current Assets:
                
Cash and cash equivalents
     282,739       266,328  
Restricted cash and investments (Note 1)
     75,667       88,452  
Accounts receivable less allowance for uncollectible accounts:
                
2005-$36,689; 2004-$36,197
     292,319       320,676  
Deferred energy costs — electric (Note 1)
     128,288       148,008  
Deferred energy costs — gas (Note 1)
     4,346       3,106  
Materials, supplies and fuel, at average cost
     77,245       76,193  
Risk management assets (Note 5)
     60,947       14,585  
Deposits and prepayments for energy
     36,582       54,767  
Other
     32,915       37,494  
 
            
 
     991,048       1,009,609  
 
            
 
                
Deferred Charges and Other Assets:
                
Goodwill (Note 8)
     22,877       22,877  
Deferred energy costs — electric (Note 1)
     506,656       526,159  
Deferred energy costs — gas (Note 1)
     1,699       2,491  
Regulatory tax asset
     280,032       279,766  
Other regulatory assets
     480,909       487,762  
Risk management regulatory assets — net (Note 5)
     —       6,673  
Unamortized debt issuance expense
     65,187       67,204  
Other
     119,693       114,297  
 
            
 
     1,477,053       1,507,229  
 
            
Assets of Discontinued Operations
     20,115       20,107  
 
            
TOTAL ASSETS
   $ 7,593,881     $ 7,528,467  
 
            

The accompanying notes are an integral part of the financial statements.

(Continued)

3

Table of Contents

SIERRA PACIFIC RESOURCES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)

                 
    March 31,     December 31,  
    2005     2004  
CAPITALIZATION AND LIABILITIES
                
Capitalization:
                
Common shareholders’ equity
   $ 1,488,158     $ 1,498,616  
Preferred stock
     50,000       50,000  
Long-term debt
     4,060,012       4,081,281  
 
            
 
     5,598,170       5,629,897  
 
            
Current Liabilities:
                
Current maturities of long-term debt
     28,593       8,491  
Accounts payable
     196,160       179,559  
Accrued interest
     88,227       69,246  
Dividends declared
     1,044       1,046  
Accrued salaries and benefits
     23,825       28,547  
Deferred income taxes
     34,081       54,501  
Risk management liabilities (Note 5)
     2,085       9,902  
Accrued taxes
     4,919       5,470  
Contract termination liabilities (Note 6)
     304,334       303,460  
Other current liabilities
     40,643       38,702  
 
            
 
     723,911       698,924  
 
            
Commitments and Contingencies (Note 6)
                
 
                
Deferred Credits and Other Liabilities:
                
Deferred income taxes
     532,191       512,760  
Deferred investment tax credit
     41,249       42,064  
Regulatory tax liability
     39,762       40,575  
Customer advances for construction
     148,060       142,703  
Accrued retirement benefits
     78,970       67,907  
Risk management regulatory liability — net (Note 5)
     35,128       —  
Contract termination liabilities (Note 6)
     36,984       36,753  
Regulatory liabilities
     262,314       257,495  
Other
     86,942       89,189  
 
            
 
     1,261,600       1,189,446  
 
            
Liabilities of Discontinued Operations
     10,200       10,200  
 
            
TOTAL CAPITALIZATION AND LIABILITIES
   $ 7,593,881     $ 7,528,467  
 
            

The accompanying notes are an integral part of the financial statements.

(Concluded)

4

Table of Contents

SIERRA PACIFIC RESOURCES

CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
                 
    Three Months Ended  
    March 31,  
    2005     2004  
OPERATING REVENUES:
           As Revised (Note 1)
Electric
   $ 581,144     $ 528,374  
Gas
     67,538       59,476  
Other
     292       267  
 
            
 
     648,974       588,117  
 
            
OPERATING EXPENSES:
                
Operation:
                
Purchased power
     220,152       193,491  
Fuel for power generation
     110,002       103,157  
Gas purchased for resale
     53,480       47,917  
Deferred energy costs disallowed
     —       1,586  
Deferral of energy costs — electric — net
     40,116       47,889  
Deferral of energy costs — gas — net
     (328 )     (1,407 )
Impairment of goodwill
     —       11,695  
Other
     87,590       73,089  
Maintenance
     22,946       24,888  
Depreciation and amortization
     52,789       49,937  
Taxes:
                
Income tax benefit
     (7,830 )     (22,062 )
Other than income
     11,109       11,851  
 
            
 
     590,026       542,031  
 
            
OPERATING INCOME
     58,948       46,086  
 
                
OTHER INCOME (EXPENSE):
                
Allowance for other funds used during construction
     3,809       1,373  
Interest accrued on deferred energy
     6,108       6,549  
Disallowed merger costs
     —       (5,890 )
Other income
     10,139       8,639  
Other expense
     (4,266 )     (3,125 )
Income taxes
     (3,264 )     (1,558 )
 
            
 
     12,526       5,988  
 
            
Total Income Before Interest Charges
     71,474       52,074  
 
                
INTEREST CHARGES:
                
Long-term debt
     78,427       75,460  
Other
     6,166       21,587  
Allowance for borrowed funds used during construction
     (4,603 )     (2,173 )
 
            
 
     79,990       94,874  
 
            
 
                
LOSS FROM CONTINUING OPERATIONS
     (8,516 )     (42,800 )
 
                
DISCONTINUED OPERATIONS:
                
 
                
Income (Loss) from discontinued operations (net of income taxes (benefits) of $3 and $(353) respectively)
     5       (675 )
 
            
 
                
NET LOSS
     (8,511 )     (43,475 )
Preferred stock dividend requirements of subsidiary
     975       975  
 
            
DEFICIT APPLICABLE TO COMMON STOCK
   $ (9,486 )   $ (44,450 )
 
            
 
                
Amount per share basic and diluted — (Note 7)
                
Loss from continuing operations
   $ (0.07 )   $ (0.37 )
Deficit applicable to common stock
   $ (0.08 )   $ (0.38 )
 
                
Weighted Average Shares of Common Stock Outstanding — basic and diluted
     117,549,912       117,239,947  
 
            

The accompanying notes are an integral part of the financial statements.

5

Table of Contents

SIERRA PACIFIC RESOURCES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
                 
    For the three months ended  
    March 31,  
    2005     2004  
CASH FLOWS FROM OPERATING ACTIVITIES:
           As Revised (Note 1)
Net Loss
   $ (8,511 )   $ (43,475 )
Non-cash items included in net loss:
                
Depreciation and amortization
     52,789       49,941  
Deferred taxes and deferred investment tax credit
     (4,442 )     (20,991 )
AFUDC and capitalized interest
     (8,412 )     (3,546 )
Amortization of deferred energy costs — electric
     54,647       56,743  
Amortization of deferred energy costs — gas
     (466 )     2,015  
Deferred energy costs disallowed
     —       1,586  
Goodwill impairment
     —       11,695  
Other non-cash
     511       (37,997 )
Changes in certain assets and liabilities:
                
Accounts receivable
     28,357       28,787  
Deferral of energy costs — electric
     (15,423 )     (15,338 )
Deferral of energy costs — gas
     18       (3,487 )
Materials, supplies and fuel
     (1,052 )     4,893  
Other current assets
     22,764       (1,536 )
Accounts payable
     16,601       (5,559 )
Escrow payment for terminating suppliers
     —       (35,161 )
Other current liabilities
     17,214       21,675  
Change in net assets of discontinued operations
     (8 )     70  
Other assets
     (39,527 )     14,468  
Other liabilities
     32,792       1,486  
 
            
Net Cash from Operating Activities
     147,852       26,269  
 
            
 
                
CASH FLOWS FROM INVESTING ACTIVITIES:
                
Additions to utility plant
     (165,101 )     (70,656 )
AFUDC and other charges to utility plant
     8,412       3,546  
Customer advances for construction
     5,357       4,903  
Contributions in aid of construction
     4,032       6,769  
 
            
Net cash used for utility plant
     (147,300 )     (55,438 )
Investments in subsidiaries and other property — net
     4,043       1,692  
 
            
Net Cash used by Investing Activities
     (143,257 )     (53,746 )
 
            
 
                
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Decrease in short-term borrowings
     —       (25,000 )
Change in restricted cash and investments
     12,786       (129,863 )
Proceeds from issuance of long-term debt
     —       335,000  
Retirement of long-term debt
     (1,167 )     (174,863 )
Sale of common stock, net of issuance cost
     1,174       81  
Dividends paid
     (977 )     (968 )
 
            
Net Cash from Financing Activities
     11,816       4,387  
 
            
 
                
Net Increase (Decrease) in Cash and Cash Equivalents
     16,411       (23,090 )
Beginning Balance in Cash and Cash Equivalents
     266,328       181,757  
 
            
Ending Balance in Cash and Cash Equivalents
   $ 282,739     $ 158,667  
 
            
Supplemental Disclosures of Cash Flow Information:
                
Cash paid during period for:
                
Interest
   $ 64,509     $ 70,044  
 
                
Noncash Activities:
                
Transfer of Regulatory Asset
   $ —     $ 197,998  

The accompanying notes are an integral part of the financial statements

6

Table of Contents

NEVADA POWER COMPANY

CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
                 
    March 31,     December 31,  
    2005     2004  
ASSETS
                
Utility Plant at Original Cost:
                
Plant in service
   $ 4,056,242     $ 4,015,125  
Less accumulated provision for depreciation
     1,133,579       1,112,335  
 
            
 
     2,922,663       2,902,790  
Construction work-in-progress
     449,693       355,431  
 
            
 
     3,372,356       3,258,221  
 
            
 
                
Investments and other property, net
     28,954       30,809  
 
            
 
                
Current Assets:
                
Cash and cash equivalents
     187,716       243,323  
Restricted cash (Note 1)
     50,311       50,311  
Accounts receivable less allowance for uncollectible accounts:
                
2005-$30,984; 2004-$30,900
     164,201       178,077  
Deferred energy costs — electric (Note 1)
     101,020       126,074  
Materials, supplies and fuel, at average cost
     41,953       44,858  
Risk management assets (Note 5)
     26,996       5,092  
Deposits and prepayments for energy
     15,849       23,091  
Other
     23,302       23,721  
 
            
 
     611,348       694,547  
 
            
Deferred Charges and Other Assets:
                
Deferred energy costs — electric (Note 1)
     363,782       375,120  
Regulatory tax asset
     168,390       167,221  
Other regulatory assets
     273,670       277,450  
Risk management regulatory assets — net (Note 5)
     —       3,555  
Unamortized debt issuance expense
     42,591       43,802  
Other
     30,871       32,815  
 
            
 
     879,304       899,963  
 
            
TOTAL ASSETS
   $ 4,891,962     $ 4,883,540  
 
            
 
                
CAPITALIZATION AND LIABILITIES
                
Capitalization:
                
Common shareholder’s equity
   $ 1,407,563     $ 1,436,788  
Long-term debt
     2,272,669       2,275,690  
 
            
 
     3,680,232       3,712,478  
 
            
Current Liabilities:
                
Current maturities of long-term debt
     6,195       6,091  
Accounts payable
     132,406       114,242  
Accounts payable, affiliated companies
     1,303       3,920  
Accrued interest
     57,051       40,677  
Dividends declared
     399       399  
Accrued salaries and benefits
     10,468       12,780  
Deferred income taxes
     23,083       36,981  
Risk management liabilities (Note 5)
     549       3,555  
Accrued taxes
     3,194       2,441  
Contract termination liabilities (Note 6)
     212,231       211,620  
Other current liabilities
     29,811       27,651  
 
            
 
     476,690       460,357  
 
            
Commitments and Contingencies (Note 6)
               
Deferred Credits and Other Liabilities:
                
Deferred income taxes
 &nbs