EX-99.2 3 exhibit992.htm EXHIBIT 99.2 exhibit992.htm
 
 
Funds from Operations (“FFO”) and Adjusted FFO, which is FFO adjusted to account for cash inflows or outflows associated with the deferred energy accounts, are presented here because Sierra Pacific Resources (the “Company”) believes that these measures are useful to investors because the rating agencies use these measures when determining a company’s credit ratings.  The cost of the Company’s debt, the ability of the Company’s subsidiaries to pay dividends to the Company, and other capital and operational costs and expenses are impacted by the Company’s credit ratings.  The Company believes that net income is the most directly comparable GAAP measure to FFO.
 
Since FFO excludes certain items includable in net income, reliance on the measure has limitations; management compensates for these limitations by using the measure simply as a supplemental measure that is weighed in the balance with other GAAP measures.  FFO is not necessarily an indication of the Company’s cash flow available to fund cash needs. Additionally, it should not be used as an alternative to net income when evaluating the Company’s financial performance or to cash flow from operating, investing and financing activities when evaluating the Company’s liquidity or ability to make cash distributions or pay debt service.  The FFO presented by the Company may not be comparable to the FFO presented by other utility companies.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
  
(Dollars in thousands)
  
Sierra Pacific Resources
                                    
Funds From Operations (FFO)
                                    
   
Six Months ended June 30,
       Year Ended December 31,    
LTM June 30,
  
   
2008
    
2007
    
2007
    
2006
    
2005
    
2008
  
                                     
Net Income Applicable to Common Stock
   $ 60,192     $ 41,361     $ 197,295     $ 277,451     $ 82,237     $ 216,126  
                                                 
Adjustments to reconcile net income to net cash from operating activities:
                                              
Depreciation and amortization
     126,411       115,911       235,532       228,875       214,662       246,032  
Deferred taxes and deferred investment tax credit
     88,346       31,661       79,337       136,026       41,609       136,022  
AFUDC (Debt and Equity)
     (44,310 )     (23,887 )     (57,776 )     (35,345 )     (45,013 )     (78,199 )
Reinstatement of deferred energy costs
     -       -       -       (178,825 )     -       -  
Carrying charge on Lenzie plant
     -       (16,080 )     (16,080 )     (33,440 )     -       -  
Reinstated interest on deferred energy
     -       (11,076 )     (11,076 )     -       -       -  
Gain on sale of investment
     -       -       (1,369 )     (62,927 )     -       (1,369 )
Other, net
     (10,992 )     15,782       23,679       24,650       (219 )     (3,095 )
Funds from Operations (Before Deferred Energy Costs)
     219,647       153,672       449,542       356,465       293,276       515,517  
                                                 
Amortization of deferred energy costs - electric
     106,821       88,482       246,907       166,821       188,221       265,246  
Amortization of deferred energy costs - gas
     (865 )     638       701       6,234       1,446       (802 )
Deferral of energy costs - electric plus terminated suppliers
     (73,464 )     30,941       51,311       (45,996 )     (23,063 )     (53,094 )
Deferral of energy costs - gas
     896       (638 )     10,668       436       (2,519 )     12,202  
Payment to terminating supplier
     -       -       -       (65,368 )     -       -  
Proceeds from claim on terminating supplier
     -       -       -       41,365       -       -  
Adjusted Funds from Operations
   $ 253,035     $ 273,095     $ 759,129     $ 459,957     $ 457,361     $ 739,069  
                                                 
Long-term debt
   $ 4,451,781     $  4,291,833     $ 4,137,864     $ 4,001,542     $ 3,817,122     $  4,451,781  
Current maturities of long-term debt
     10,298       109,092       110,285       8,348       58,909       10,298  
Total Debt
   $ 4,462,079     $ 4,400,925     $ 4,248,149     $ 4,009,890     $ 3,876,031     $ 4,462,079  
                                                 
Preferred Stock
   $ -     $ -     $ -     $ -     $ 50,000     $  -  
                                                 
Interest charges
   $  135,804     $  140,286     $ 279,788     $ 311,088     $ 284,927     $  275,306  
AFUDC (Debt)
     19,240       10,708       25,967       17,119       24,691       34,499  
Adjusted Interest Expense
   $ 155,044     $ 150,994     $ 305,755     $ 328,207     $ 309,618     $ 309,805  
                                                 
Total Debt/Funds from operations
                     9.45 x     11.25 x     13.22 x     8.66 x
Total Debt/Adjusted FFO
                     5.60 x     8.72 x     8.47 x     6.04 x
Funds from Operations Interest Coverage
                     2.47 x     2.09 x     1.95 x     2.66 x
Adjusted Funds From Operations Interest Coverage
                     3.48 x     2.40 x     2.48 x     3.39 x
Common Shareholders' Equity
                   $ 2,996,575     $ 2,622,297     $ 2,060,154     $ 3,024,027  
Total Capitalization (including current maturities of long-term debt)
                   $ 7,244,724     $ 6,632,187     $ 5,986,185     $ 7,486,106  
Total Debt/Total Capitalization
                     58.64 %     60.46 %     64.75 %     59.60 %
 
 


RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
  
(Dollars in thousands)
  
Nevada Power Company
                                    
Funds From Operations (FFO)
                                    
   
Six Months ended June 30,
    
Year Ended December 31,
    
LTM June 30,
  
   
2008
    
2007
    
2007
    
2006
    
2005
    
2008
  
                                     
Net Income
   $ 41,146     $ 28,186     $ 165,694     $ 224,540     $ 132,734     $ 178,654  
                                              -  
Adjustments to reconcile net income to net cash from operating activities:
                                             -  
Depreciation and amortization
     82,953       74,594       152,139       141,585       124,098       160,498  
Deferred taxes and deferred investment tax credit
     18,119       9,826       56,868       107,392       86,910       65,161  
AFUDC (Debt and Equity)
     (25,925 )     (11,598 )     (29,057 )     (23,369 )     (41,870 )     (43,384 )
Reinstatement of deferred energy costs
     -       -       -       (178,825 )     -       -  
Carrying charge on Lenzie plant
     -       (16,080 )     (16,080 )     (33,440 )     -       -  
Reinstated interest on deferred energy
     -       (11,076 )     (11,076 )     -       -       -  
Other, net
     (8,562 )     2,587       5,831       3,394       (7,433 )     (5,318 )
Funds from Operations (Before Deferred Energy Costs)
     107,731       76,439       324,319       241,277       294,439       355,611  
                                                 
Amortization of deferred energy costs
     88,210       64,747       203,213       120,499       131,471       226,676  
Deferral of energy costs plus terminated suppliers
     (54,895 )     23,023       15,779       (46,086 )     (31,219 )     (62,139 )
Payment to terminating supplier
     -       -       -       (37,410 )     -       -  
Proceeds from claim on terminating supplier
     -       -       -       26,391       -       -  
Adjusted Funds from Operations
   $ 141,046     $ 164,209     $ 543,311     $ 304,671     $ 394,691     $ 520,148  
                                                 
Long-term debt
   $ 2,664,929     $  2,655,630     $ 2,528,141     $ 2,380,139     $ 2,214,063     $ 2,664,929  
Current maturities of long-term debt
     8,636       7,449       8,642       5,948       6,509       8,636  
Total Debt
   $ 2,673,565     $ 2,663,079     $ 2,536,783     $ 2,386,087     $ 2,220,572     $ 2,673,565  
                                                 
Interest charges
   $ 82,461     $ 88,260     $ 174,667     $ 176,612     $ 134,657     $  168,868  
AFUDC (Debt)
     11,375       5,253       13,196       11,614       23,187       19,318  
Adjusted Interest Expense
   $ 93,836     $ 93,513     $ 187,863     $ 188,226     $ 157,844     $ 188,186  
                                                 
Total Debt/Funds from Operations
                     7.82 x     9.89 x     7.54 x     7.52 x
Total Debt/Adjusted FFO
                     4.67 x     7.83 x     5.63 x     5.14 x
Funds from Operations Interest Coverage
                     2.73 x     2.28 x     2.87 x     2.89 x
Adjusted Funds From Operations Interest Coverage
                     3.89 x     2.62 x     3.50 x     3.76 x
Common Shareholder's Equity
                   $ 2,376,740     $ 2,172,198     $ 1,762,089     $ 2,534,866  
Total Capitalization (including current maturities of long-term debt)
                   $ 4,913,523     $ 4,558,285     $ 3,982,661     $ 5,208,431  
Total Debt/Total Capitalization
                     51.63 %     52.35 %     55.76 %     51.33 %

 

 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
  
(Dollars in thousands)
  
Sierra Pacific Power Company
                                    
Funds From Operations (FFO)
                                    
   
Six Months ended June 30,
    
Year Ended December 31,
    
LTM June 30,
  
   
2008
    
2007
    
2007
    
2006
    
2005
    
2008
  
                                     
Net Income
   $ 35,133     $ 31,976     $ 65,667     $ 57,709     $ 52,074     $ 68,824  
                                                 
Adjustments to reconcile net income to net cash from operating activities:
                                                
Depreciation and amortization
     43,458       41,317       83,393       87,279       90,569       85,534  
Deferred taxes and deferred investment tax credit
     10,537       (7,652 )     (36,713 )     (39,361 )     209       (18,524 )
AFUDC (Debt and Equity)
     (18,385 )     (12,289 )     (28,719 )     (11,976 )     (3,143 )     (34,815 )
Other, net
     2,235       13,216       14,577       16,935       318       3,596  
Funds from Operations (Before Deferred Energy Costs)
     72,978       66,568       98,205       110,586       140,027       104,615  
                                                 
Amortization of deferred energy costs - electric
     18,611       23,735       43,694       46,322       56,750       38,570  
Amortization of deferred energy costs - gas
     (865 )     638       701       6,234       1,446       (802 )
Deferral of energy costs - electric plus terminated suppliers
     (18,569 )     7,918       35,532       90       8,156       9,045  
Deferral of energy costs - gas
     896       (638 )     10,668       436       (2,519 )     12,202  
Payment to terminating supplier
     -       -       -       (27,958 )     -       -  
Proceeds from claim on terminating supplier
     -       -       -       14,974       -       -  
Adjusted Funds from Operations
   $ 73,051     $ 98,221     $ 188,800     $ 150,684     $ 203,860     $ 163,630  
                                                 
Long-term debt
   $ 1,261,788     $ 1,085,764     $ 1,084,550     $ 1,070,858     $ 941,804     $ 1,261,788  
Current maturities of long-term debt
     1,662       101,643       101,643       2,400       52,400       1,662  
Total Debt
   $ 1,263,450     $ 1,187,407     $ 1,186,193     $ 1,073,258     $ 994,204     $ 1,263,450  
                                                 
Preferred Stock
   $ -     $ -     $ -     $ -     $ 50,000       -  
                                                 
Interest charges
   $ 32,466     $ 30,237     $ 60,735     $ 71,506     $ 69,067     $ 62,964  
AFUDC (Debt)
     7,865       5,455       12,771       5,505       1,504       15,181  
Adjusted Interest Expense
   $ 40,331     $ 35,692     $ 73,506     $ 77,011     $ 70,571     $ 78,145  
                                                 
Total Debt/Funds from Operations
                     12.08 x     9.71 x     7.10 x     12.08 x
Total Debt/Adjusted FFO
                     6.28 x     7.12 x     4.88 x     7.72 x
Funds from Operations Interest Coverage
                     2.34 x     2.44 x     2.98 x     2.34 x
Adjusted Funds From Operations Interest Coverage
                     3.57 x     2.96 x     3.89 x     3.09 x
Common Shareholder's Equity
                   $ 1,001,840     $ 884,737     $ 727,777     $ 998,221  
Total Capitalization (including current maturities of long-term debt)
                   $ 2,188,033     $ 1,957,995     $ 1,771,981     $ 2,261,671  
Total Debt/Total Capitalization
                     54.21 %     54.81 %     56.11 %     55.86 %