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,
  
   
2009
    
2008(1)
    
2008
    
2007(1)
    
2006(1)
    
2009
  
                                     
Net Income (Loss)
   $ (3,861 )   $ 60,192     $ 208,887     $ 197,295     $ 277,451     $ 144,834  
                                                 
Adjustments to reconcile net income to net cash from operating activities:
                                                
Depreciation and amortization
     158,371       126,411       260,608       235,532       228,875       292,568  
Deferred taxes and deferred investment tax credit
     68,588       88,346       52,060       79,337       136,026       32,302  
AFUDC(2) (Debt and Equity)
     (26,934 )     (44,310 )     (67,968 )     (57,776 )     (35,345 )     (50,592 )
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
     37,256       (10,992 )     100,482       71,543       53,561       148,730  
Funds from Operations (Before Deferred Energy Costs)
     233,420       219,647       554,069       497,406       385,376       567,842  
                                                 
Amortization of energy costs, net of deferrals
     141,802       33,388       2,717       309,587       127,495       111,131  
Payment to terminating supplier
     -       -       -       -       (65,368 )     -  
Proceeds from claim on terminating supplier
     -       -       -       -       41,365       -  
Adjusted Funds from Operations
   $ 375,222     $ 253,035     $ 556,786     $ 806,993     $ 488,868     $ 678,973  
                                                 
Long-term debt
     5,571,799       4,451,781     $ 5,266,982     $ 4,137,864     $ 4,001,542       5,571,799  
Current maturities of long-term debt
     9,085       10,298       9,291       110,285       8,348       9,085  
Total Debt
   $ 5,580,884     $ 4,462,079     $ 5,276,273     $ 4,248,149     $ 4,009,890     $ 5,580,884  
                                                 
                                                 
Interest charges
   $  166,192     $ 135,804     $ 300,857     $ 279,788     $ 311,088     $ 331,245  
AFUDC(2) (Debt)
     12,168       19,240       29,527       25,967       17,119       22,455  
Adjusted Interest Expense
   $ 178,360     $ 155,044     $ 330,384     $ 305,755     $ 328,207     $ 353,700  
                                                 
Total Debt/Funds from operations
                     9.52 x     8.54 x     10.41 x     9.83 x
Total Debt/Adjusted FFO
                     9.48 x     5.26 x     8.20 x     8.22 x
Funds from Operations Interest Coverage
                     2.68 x     2.63 x     2.17 x     2.61 x
Adjusted Funds From Operations Interest Coverage
                     2.69 x     3.64 x     2.49 x     2.92 x
Common Shareholders' Equity
                   $ 3,131,186     $ 2,996,575     $ 2,622,297     $ 3,083,773  
Total Capitalization (including current maturities of long-term debt)
                   $ 8,407,459     $ 7,244,724     $ 6,632,187     $ 8,664,657  
Total Debt/Total Capitalization
                     62.76 %     58.64 %     60.46 %     64.41 %
                                                 
                                                 
(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.
                  
                                                 

 
 
 


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,
  
 
  
2009
    
2008(1)
    
2008
    
2007(1)
    
2006(1)
    
2009
  
                                     
Net Income (Loss)
   $ (22,650 )   $ 41,146     $ 151,431     $ 165,694     $ 224,540     $ 87,635  
                                                 
Adjustments to reconcile net income to net cash from operating activities:
                                                
                                               
Depreciation and amortization
     105,873       82,953       171,080       152,139       141,585       194,000  
Deferred taxes and deferred investment tax credit
     51,494       18,119       45,039       56,868       107,392       78,414  
AFUDC(2) (Debt and Equity)
     (23,841 )     (25,925 )     (45,980 )     (29,057 )     (23,369 )     (43,896 )
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
     19,797       (8,562 )     73,209       38,821       25,783       101,568  
Funds from Operations (Before Deferred Energy Costs)
     130,673       107,731       394,779       357,309       263,666       417,721  
                                                 
Amortization of deferred energy costs, net of deferrals
     96,612       33,315       4,211       218,992       74,413       67,508  
Payment to terminating supplier
     -       -       -       -       (37,410 )     -  
Proceeds from claim on terminating supplier
     -       -       -       -       26,391       -  
Adjusted Funds from Operations
   $ 227,285     $ 141,046     $ 398,990     $ 576,301     $ 327,060     $ 485,229  
                                                 
Long-term debt
   $ 3,712,016     $  2,664,929     $ 3,385,106     $ 2,528,141     $ 2,380,139     $  3,712,016  
Current maturities of long-term debt
     9,085       8,636       8,691       8,642       5,948       9,085  
Total Debt
   $ 3,721,101     $ 2,673,565     $ 3,393,797     $ 2,536,783     $ 2,386,087     $ 3,721,101  
                                                 
Interest charges
   $ 112,180     $ 82,461     $ 186,822     $ 174,667     $ 176,612     $ 216,541  
AFUDC(2) (Debt)
     10,668       11,375       20,063       13,196       11,614       19,356  
Adjusted Interest Expense
   $ 122,848     $ 93,836     $ 206,885     $ 187,863     $ 188,226     $ 235,897  
                                                 
 
                                                
Total Debt/Funds from Operations
                     8.60 x     7.10 x     9.05 x     8.91 x
Total Debt/Adjusted FFO
                     8.51 x     4.40 x     7.30 x     7.67 x
Funds from Operations Interest Coverage
                     2.91 x     2.90 x     2.40 x     2.77 x
Adjusted Funds From Operations Interest Coverage
                     2.93 x     4.07 x     2.74 x     3.06 x
Common Shareholder's Equity
                   $ 2,627,567     $ 2,376,740     $ 2,172,198     $ 2,542,948  
Total Capitalization (including current maturities of long-term debt)
             $ 6,021,364     $ 4,913,523     $ 4,558,285     $ 6,264,049  
Total Debt/Total Capitalization
                     56.36 %     51.63 %     52.35 %     59.40 %
                                                 
                                                 
(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.
                  

 
 
 
 

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,
  
   
2009
    
2008(1)
    
2008
    
2007(1)
    
2006(1)
    
2009
  
                                     
Net Income
   $ 33,940     $ 35,133     $ 90,582     $ 65,667     $ 57,709     $ 89,389  
                                                 
Adjustments to reconcile net income to net cash from operating activities:
                                                
                                               
Depreciation and amortization
     52,498       43,458       89,528       83,393       87,279       98,568  
Deferred taxes and deferred investment tax credit
     33,688       10,537       24,598       (36,713 )     (39,361 )     47,749  
AFUDC(2) (Debt and Equity)
     (3,093 )     (18,385 )     (21,988 )     (28,719 )     (11,976 )     (6,696 )
Other, net
     17,364       2,235       22,872       29,451       23,457       38,001  
Funds from Operations (Before Deferred Energy Costs)
     134,397       72,978       205,592       113,079       117,108       267,011  
                                                 
Amortization of deferred energy costs, net of deferrals
     45,190       73       (1,494 )     90,595       53,082       43,623  
Payment to terminating supplier
     -       -       -       -       (27,958 )     -  
Proceeds from claim on terminating supplier
     -       -       -       -       14,974       -  
Adjusted Funds from Operations
   $ 179,587     $ 73,051     $ 204,098     $ 203,674     $ 157,206     $ 310,634  
                                                 
Long-term debt
   $ 1,373,992     $ 1,261,788     $ 1,395,987     $ 1,084,550     $ 1,070,858     $ 1,373,992  
Current maturities of long-term debt
     -       1,662       600       101,643       2,400       -  
Total Debt
   $ 1,373,992     $ 1,263,450     $ 1,396,587     $ 1,186,193     $ 1,073,258     $ 1,373,992  
                                                 
                                                 
Interest charges
   $ 34,686     $ 32,466     $ 72,712     $ 60,735     $ 71,506     $ 74,932  
AFUDC(2) (Debt)
     1,500       7,865       9,464       12,771       5,505       3,099  
Adjusted Interest Expense
   $ 36,186     $ 40,331     $ 82,176     $ 73,506     $ 77,011     $ 78,031  
                                                 
                                                 
                                                 
Total Debt/Funds from Operations
                     6.79 x     10.49 x     9.16 x     5.15 x
Total Debt/Adjusted FFO
                     6.84 x     5.82 x     6.83 x     4.42 x
Funds from Operations Interest Coverage
                     3.50 x     2.54 x     2.52 x     4.42 x
Adjusted Funds From Operations Interest Coverage
                     3.48 x     3.77 x     3.04 x     4.98 x
Common Shareholder's Equity
                   $ 877,961     $ 1,001,840     $ 884,737     $ 970,218  
Total Capitalization (including current maturities of long-term debt)
             $ 2,274,548     $ 2,188,033     $ 1,957,995     $ 2,344,210  
Total Debt/Total Capitalization
                     61.40 %     54.21 %     54.81 %     58.61 %
                                                 
                                                 
(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.