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)
                                    
   
Three Months ended March 31,
    
Year Ended December 31,
    
LTM March 31,
  
   
2009
    
2008(1)
    
2008
    
2007(1)
    
2006(1)
    
2009
  
                                     
Net Income (Loss)
   $ (22,244 )   $ 24,058     $ 208,887     $ 197,295     $ 277,451     $ 162,585  
                                                 
Adjustments to reconcile net income to net cash from operating activities:
                                  
                                                 
Depreciation and amortization
     78,048       62,070       260,608       235,532       228,875       276,586  
Deferred taxes and deferred investment tax credit
     5,264       9,482       52,060       79,337       136,026       47,842  
AFUDC(2) (Debt and Equity)
     (11,364 )     (21,109 )     (67,968 )     (57,776 )     (35,345 )     (58,223 )
Reinstatement of deferred energy costs
     -       -       -       -       (178,825 )     -  
Carrying charge on Lenzie plant
     -       -       -       (16,080 )     (33,440 )     -  
Reinstated interest on deferred energy
     -       -       -       (11,076 )     -       -  
Gain on sale of investment
     -       -       -       (1,369 )     (62,927 )     -  
Other, net
     16,836       (9,394 )     100,482       71,543       53,561       126,712  
Funds from Operations (Before Deferred Energy Costs)
     66,540       65,107       554,069       497,406       385,376       555,502  
                                                 
Amortization of deferred energy costs, net of deferrals
     45,803       58,847       2,717       309,587       127,495       (10,327 )
Payment to terminating supplier
     -       -       -       -       (65,368 )     -  
Proceeds from claim on terminating supplier
     -       -       -       -       41,365       -  
Adjusted Funds from Operations
   $ 112,343     $ 123,954     $ 556,786     $ 806,993     $ 488,868     $ 545,175  
                                                 
Long-term debt
     5,485,643       4,137,617     $ 5,266,982     $ 4,137,864     $ 4,001,542       5,485,643  
Current maturities of long-term debt
     8,885       110,168       9,291       110,285       8,348       8,885  
Total Debt
   $ 5,494,528     $ 4,247,785     $ 5,276,273     $ 4,248,149     $ 4,009,890     $ 5,494,528  
                                                 
                                                 
Interest charges
     82,633       68,504     $ 300,857     $ 279,788     $ 311,088       314,986  
AFUDC(2) (Debt)
     5,146       9,152       29,527       25,967       17,119       25,521  
Adjusted Interest Expense
   $ 87,779     $ 77,656     $ 330,384     $ 305,755     $ 328,207     $ 340,507  
                                                 
Total Debt/Funds from operations
                     9.52 x     8.54 x     10.41 x     9.89 x
Total Debt/Adjusted FFO
                     9.48 x     5.26 x     8.20 x     10.08 x
Funds from Operations Interest Coverage
                     2.68 x     2.63 x     2.17 x     2.63 x
Adjusted Funds From Operations Interest Coverage
               2.69 x     3.64 x     2.49 x     2.60 x
Common Shareholders' Equity
                   $ 3,131,186     $ 2,996,575     $ 2,622,297     $ 3,086,337  
Total Capitalization (including current maturities of long-term debt)
             $ 8,407,459     $ 7,244,724     $ 6,632,187     $ 8,580,865  
Total Debt/Total Capitalization
                     62.76 %     58.64 %     60.46 %     64.03 %
                                                 
                                                 
(1) Certain financial statement line items of prior period's information have been re-grouped or reclassified to conform with current period presentation. The re-grouping or reclassifications have not affected previously reported results of operations or common shareholders' equity.
  
                                                 
(2) Allowance for Funds Used During Construction or Allowance for Borrowed Funds Used During Construction.
                  

 
1
 



RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
  
(Dollars in thousands)
  
   
Nevada Power Company
  
Funds From Operations (FFO)
                                    
   
Three Months ended March 31,
    
Year Ended December 31,
    
LTM March 31,
  
   
2009
    
2008(1)
    
2008
    
2007(1)
    
2006(1)
    
2009
  
                                     
Net Income (Loss)
   $ (35,151 )   $ 7,971     $ 151,431     $ 165,694     $ 224,540     $ 108,309  
                                                 
Adjustments to reconcile net income to net cash from operating activities:
                                          
                                                 
Depreciation and amortization
     52,363       40,630       171,080       152,139       141,585       182,813  
Deferred taxes and deferred investment tax credit
     19,424       (14,443 )     45,039       56,868       107,392       78,906  
AFUDC(2) (Debt and Equity)
     (10,183 )     (12,213 )     (45,980 )     (29,057 )     (23,369 )     (43,950 )
Reinstatement of deferred energy costs
     -       -       -       -       (178,825 )     -  
Carrying charge on Lenzie plant
     -       -       -       (16,080 )     (33,440 )     -  
Reinstated interest on deferred energy
     -       -       -       (11,076 )     -       -  
Other, net
     10,269       (6,784 )     73,209       38,821       25,783       90,262  
Funds from Operations (Before Deferred Energy Costs)
     36,722       15,161       394,779       357,309       263,666       416,340  
                                                 
Amortization of deferred energy costs, net of deferrals
     35,928       44,042       4,211       218,992       74,413       (3,903 )
Payment to terminating supplier
     -       -       -       -       (37,410 )     -  
Proceeds from claim on terminating supplier
     -       -       -       -       26,391       -  
Adjusted Funds from Operations
   $ 72,650     $ 59,203     $ 398,990     $ 576,301     $ 327,060     $ 412,437  
                                                 
Long-term debt
     3,596,840       2,564,629     $ 3,385,106     $ 2,528,141     $ 2,380,139       3,596,840  
Current maturities of long-term debt
     8,885       8,616       8,691       8,642       5,948       8,885  
Total Debt
   $ 3,605,725     $ 2,573,245     $ 3,393,797     $ 2,536,783     $ 2,386,087     $ 3,605,725  
                                                 
Interest charges
   $ 55,043     $ 41,473     $ 186,822     $ 174,667     $ 176,612       200,392  
AFUDC(2) (Debt)
     4,562       5,355       20,063       13,196       11,614       19,270  
Adjusted Interest Expense
   $ 59,605     $ 46,828     $ 206,885     $ 187,863     $ 188,226     $ 219,662  
                                                 
                                                 
Total Debt/Funds from Operations
                     8.60 x     7.10 x     9.05 x     8.66 x
Total Debt/Adjusted FFO
                     8.51 x     4.40 x     7.30 x     8.74 x
Funds from Operations Interest Coverage
                     2.91 x     2.90 x     2.40 x     2.90 x
Adjusted Funds From Operations Interest Coverage
               2.93 x     4.07 x     2.74 x     2.88 x
Common Shareholder's Equity
                   $ 2,627,567     $ 2,376,740     $ 2,172,198     $ 2,570,426  
Total Capitalization (including current maturities of long-term debt)
             $ 6,021,364     $ 4,913,523     $ 4,558,285     $ 6,176,151  
Total Debt/Total Capitalization
                     56.36 %     51.63 %     52.35 %     58.38 %
                                                 
                                                 
(1) Certain financial statement line items of prior period's information have been re-grouped or reclassified to conform with current period presentation. The re-grouping or reclassifications have not affected previously reported results of operations or common shareholders's equity.
  
                                                 
(2) Allowance for Funds Used During Construction or Allowance for Borrowed Funds Used During Construction.
                          

 
2
 


RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
  
(Dollars in thousands)
  
   
Sierra Pacific Power Company
  
Funds From Operations (FFO)
                                    
   
Three Months ended March 31,
    
Year Ended December 31,
    
LTM March 31,
  
   
2009
    
2008(1)
    
2008
    
2007(1)
    
2006(1)
    
2009
  
                                     
Net Income
   $ 19,136     $ 24,284     $ 90,582     $ 65,667     $ 57,709     $ 85,434  
                                               
Adjustments to reconcile net income to net cash from operating activities:
                                          
                                                 
Depreciation and amortization
     25,685       21,440       89,528       83,393       87,279       93,773  
Deferred taxes and deferred investment tax credit
     8,597       9,629       24,598       (36,713 )     (39,361 )     23,566  
AFUDC(2) (Debt and Equity)
     (1,181 )     (8,896 )     (21,988 )     (28,719 )     (11,976 )     (14,273 )
Other, net
     6,395       (1,310 )     22,872       29,451       23,457       30,577  
Funds from Operations (Before Deferred Energy Costs)
     58,632       45,147       205,592       113,079       117,108       219,077  
                                                 
Amortization of deferred energy costs, net of deferrals
     9,875       14,805       (1,494 )     90,595       53,082       (6,424 )
Payment to terminating supplier
     -       -       -       -       (27,958 )     -  
Proceeds from claim on terminating supplier
     -       -       -       -       14,974       -  
Adjusted Funds from Operations
   $ 68,507     $ 59,952     $ 204,098     $ 203,674     $ 157,206     $ 212,653  
                                                 
Long-term debt
   $ 1,402,964     $ 1,083,870     $ 1,395,987     $ 1,084,550     $ 1,070,858     $ 1,402,964  
Current maturities of long-term debt
   $ -     $ 101,552       600       101,643       2,400       -  
Total Debt
   $ 1,402,964     $ 1,185,422     $ 1,396,587     $ 1,186,193     $ 1,073,258     $ 1,402,964  
                                                 
                                                 
Interest charges
   $ 17,927     $ 16,587     $ 72,712     $ 60,735     $ 71,506     $ 74,052  
AFUDC(2) (Debt)
     584       3,797       9,464       12,771       5,505       6,251  
Adjusted Interest Expense
   $ 18,511     $ 20,384     $ 82,176     $ 73,506     $ 77,011     $ 80,303  
                                                 
                                                 
                                                 
Total Debt/Funds from Operations
                     6.79 x     10.49 x     9.16 x     6.40 x
Total Debt/Adjusted FFO
                     6.84 x     5.82 x     6.83 x     6.60 x
Funds from Operations Interest Coverage
                     3.50 x     2.54 x     2.52 x     3.73 x
Adjusted Funds From Operations Interest Coverage
               3.48 x     3.77 x     3.04 x     3.65 x
Common Shareholder's Equity
                   $ 877,961     $ 1,001,840     $ 884,737     $ 975,406  
Total Capitalization (including current maturities of long-term debt)
             $ 2,274,548     $ 2,188,033     $ 1,957,995     $ 2,378,370  
Total Debt/Total Capitalization
                     61.40 %     54.21 %     54.81 %     58.99 %
                                                 
                                                 
(1) Certain financial statement line items of prior period's information have been re-grouped or reclassified to conform with current period presentation. The re-grouping or reclassifications have not affected previously reported results of operations or common shareholders's equity.
  
                                                 
(2) Allowance for Funds Used During Construction or Allowance for Borrowed Funds Used During Construction.
    

 
3