EX-99.2 3 exhibit99-2.htm EXHIBIT 99.2 exhibit99-2.htm
EXHIBIT 99.2
 
    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 NV Energy, Inc. (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 (loss) is the most directly comparable GAAP measure to FFO.
 
    Since FFO excludes certain items includable in net income (loss), 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 (loss) when evaluating the Company’s financial performance or to cash flow from (used by) 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)
  
NV Energy, Inc.
  
Funds From Operations (FFO)
                                    
   
Six Months ended June 30,
    
Year Ended December 31,
    
LTM June 30,
  
   
2010
    
2009
    
2009
    
2008
    
2007
    
2010
  
                                     
Net Income (Loss)
   $ 35,225     $ (3,861 )   $ 182,936     $ 208,887     $ 197,295     $ 222,022  
                                                 
Adjustments to reconcile net income to net cash from operating activities:
                                                
                                               
Depreciation and amortization
     165,644       158,371       321,921       260,608       235,532       329,194  
Deferred taxes and deferred investment tax credit
     18,160       68,588       111,219       52,060       79,337       60,791  
AFUDC(1) (debt and equity)
     (23,955 )     (26,934 )     (44,503 )     (67,968 )     (57,776 )     (41,524 )
Carrying charge on Lenzie Generating Station
     -       -       -       -       (16,080 )     -   
Reinstated interest on deferred energy
     -       -       -       -       (11,076 )     -   
Gain on sale of asset
     (7,575 )     -       -       -       (1,369 )     (7,575  )
Other, net
     50,347       37,256       (2,004 )     100,482       71,543       11,087  
FFO (before deferred energy)
     237,846       233,420       569,569       554,069       497,406       573,995  
Deferred energy
     92,909       141,802       306,406       2,717       309,587       257,513  
Adjusted FFO
   $ 330,755     $ 375,222     $ 875,975     $ 556,786     $ 806,993     $ 831,508  
                                                 
Long-term debt
   $ 5,242,442     $ 5,571,799     $ 5,303,357     $ 5,266,982     $ 4,137,864     $ 5,242,442  
Current maturities of long-term debt
     357,163       9,085       134,474       9,291       110,285       357,163  
Total Debt
   $ 5,599,605     $ 5,580,884     $ 5,437,831     $ 5,276,273     $ 4,248,149     $ 5,599,605  
                                                 
                                                 
Interest expense (net of AFUDC(1) - debt)
   $ 160,836     $ 166,192     $ 334,314     $ 300,857     $ 279,788     $ 328,958  
AFUDC(1) (debt)
     10,864       12,168       20,229       29,527       25,967       18,925  
Adjusted Interest Expense
   $ 171,700     $ 178,360     $ 354,543     $ 330,384     $ 305,755     $ 347,883  
                                                 
Total Debt/FFO
                     9.55 x     9.52 x     8.54 x     9.76 x
Total Debt/Adjusted FFO
                     6.21 x     9.48 x     5.26 x     6.73 x
FFO Adjusted Interest Coverage
                     2.61 x     2.68 x     2.63 x     2.65 x
Adjusted FFO Interest Coverage
                     3.47 x     2.69 x     3.64 x     3.39 x
Shareholders' Equity
                   $ 3,223,922     $ 3,131,186     $ 2,996,575     $ 3,210,763  
Total Capitalization (including current maturities of long-term debt)
             $ 8,661,753     $ 8,407,459     $ 7,244,724     $ 8,810,368  
Total Debt/Total Capitalization
                     62.78 %     62.76 %     58.64 %     63.56 %
                                                 
 
(1)
Allowance for borrowed funds used during construction or allowance for equity funds used during construction.

 
1
 


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,
  
 
  
2010
    
2009
    
2009
    
2008
    
2007
    
2010
  
                                     
Net Income (Loss)
   $ 17,458     $ (22,650 )   $ 134,284     $ 151,431     $ 165,694     $ 174,392  
                                                 
Adjustments to reconcile net income to net cash from operating activities:
                                                
                                               
Depreciation and amortization
     112,755       105,873       215,873       171,080       152,139       222,755  
Deferred taxes and deferred investment tax credit
     9,137       51,494       96,831       45,039       56,868       54,474  
AFUDC(1) (debt and equity)
     (21,736 )     (23,841 )     (38,209 )     (45,980 )     (29,057 )     (36,104 )
Carrying charge on Lenzie Generating Station
     -       -       -       -       (16,080 )     -  
Reinstated interest on deferred energy
     -       -       -       -       (11,076 )     -  
Other, net
     30,186       19,797       (34,291 )     73,209       38,821       (23,902 )
FFO (before deferred energy)
     147,800       130,673       374,488       394,779       357,309       391,615  
Deferred energy
     72,096       96,612       216,629       4,211       218,992       192,113  
Adjusted FFO
   $ 219,896     $ 227,285     $ 591,117     $ 398,990     $ 576,301     $ 583,728  
                                                 
Long-term debt
   $ 3,475,347     $ 3,712,016     $ 3,535,440     $ 3,385,106     $ 2,528,141     $ 3,475,347  
Current maturities of long-term debt
     357,163       9,085       119,474       8,691       8,642       357,163  
Total Debt
   $ 3,832,510     $ 3,721,101     $ 3,654,914     $ 3,393,797     $ 2,536,783     $ 3,832,510  
                                                 
Interest expense (net of AFUDC(1) - debt)
   $ 107,352     $ 112,180     $ 226,252     $ 186,822     $ 174,667     $ 221,424  
AFUDC(1)  (debt)
     9,976       10,668       17,184       20,063       13,196       16,492  
Adjusted Interest Expense
   $ 117,328     $ 122,848     $ 243,436     $ 206,885     $ 187,863     $ 237,916  
                                                 
Total Debt/FFO
                     9.76 x     8.60 x     7.10 x     9.79 x
Total Debt/Adjusted FFO
                     6.18 x     8.51 x     4.40 x     6.57 x
FFO Adjusted Interest Coverage
                     2.54 x     2.91 x     2.90 x     2.65 x
Adjusted FFO Interest Coverage
                     3.43 x     2.93 x     4.07 x     3.45 x
Shareholder's Equity
                   $ 2,650,039     $ 2,627,567     $ 2,376,740     $ 2,614,530  
Total Capitalization (including current maturities of long-term debt)
             $ 6,304,953     $ 6,021,364     $ 4,913,523     $ 6,447,040  
Total Debt/Total Capitalization
                     57.97 %     56.36 %     51.63 %     59.45 %
                                                 
 
(1)
Allowance for borrowed funds used during construction or allowance for equity funds used during construction.

 
2
 

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,
  
   
2010
    
2009
    
2009
    
2008
    
2007
    
2010
  
                                     
Net Income
   $ 28,435     $ 33,940     $ 73,085     $ 90,582     $ 65,667     $ 67,580  
                                                 
Adjustments to reconcile net income to net cash from operating activities:
                                                
                                               
Depreciation and amortization
     52,889       52,498       106,048       89,528       83,393       106,439  
Deferred taxes and deferred investment tax credit
     6,440       33,688       32,548       24,598       (36,713 )     5,300  
AFUDC(1)  (debt and equity)
     (2,219 )     (3,093 )     (6,293 )     (21,988 )     (28,719 )     (5,419 )
Gain on sale of asset     (7,575 )      -         -       -        -        (7,575 ) 
Other, net
     19,209       17,364       30,368       22,872       29,451       32,213  
FFO (before deferred energy)
     97,179       134,397       235,756       205,592       113,079       198,538  
Deferred energy
     20,813       45,190       89,777       (1,494 )     90,595       65,400  
Adjusted FFO
   $ 117,992     $ 179,587     $ 325,533     $ 204,098     $ 203,674     $ 263,938  
                                                 
Long-term debt
   $ 1,281,500     $ 1,373,992     $ 1,282,225     $ 1,395,987     $ 1,084,550     $ 1,281,500  
Current maturities of long-term debt
     -       -       15,000       600       101,643       -  
Total Debt
   $ 1,281,500     $ 1,373,992     $ 1,297,225     $ 1,396,587     $ 1,186,193     $ 1,281,500  
                                                 
                                                 
Interest expense (net of AFUDC(1) - debt)
   $ 34,158     $ 34,686     $ 69,413     $ 72,712     $ 60,735     $ 68,885  
AFUDC(1)  (debt)
     888       1,500       3,044       9,464       12,771       2,432  
Adjusted Interest Expense
   $ 35,046     $ 36,186     $ 72,457     $ 82,176     $ 73,506     $ 71,317  
                                                 
Total Debt/FFO
                     5.50 x     6.79 x     10.49 x     6.45 x
Total Debt/Adjusted FFO
                     3.98 x     6.84 x     5.82 x     4.86 x
FFO Adjusted Interest Coverage
                     4.25 x     3.50 x     2.54 x     3.78 x
Adjusted FFO Interest Coverage
                     5.49 x     3.48 x     3.77 x     4.70 x
Shareholder's Equity
                   $ 1,009,258     $ 877,961     $ 1,001,840     $ 1,012,710  
Total Capitalization (including current maturities of long-term debt)
                   $ 2,306,483     $ 2,274,548     $ 2,188,033     $ 2,294,210  
Total Debt/Total Capitalization
                     56.24 %     61.40 %     54.21 %     55.86 %
                                                 
 
(1)
Allowance for borrowed funds used during construction or allowance for equity funds used during construction.

 
3