EBITDA represents net income before interest, taxes, depreciation and amortization. EBITDA is presented here because NV Energy, Inc. (the “Company”) considers it a supplemental measure of its performance and believes debt-holders frequently use EBITDA to analyze operating performance and debt service capacity. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:
• | EBITDA does not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments; | |
• | EBITDA does not reflect changes in, or cash requirements for, working capital needs; | |
• | EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debts; | |
• | Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and | |
• | Other companies in this industry may calculate EBITDA differently than we do, which will limit its usefulness as a comparative measure. |
Because of these limitations, the Company’s management relies primarily on our GAAP results as a measure of the Company’s performance and uses EBITDA on a supplemental basis.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
NV Energy, Inc. | ||||||||||||||||||||||||
EBITDA | ||||||||||||||||||||||||
Nine Months ended September 30, | Year Ended December 31, | LTM September 30, | ||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2010 | |||||||||||||||||||
Net Income | $ | 217,971 | $ | 178,785 | $ | 182,936 | $ | 208,887 | $ | 197,295 | $ | 222,122 | ||||||||||||
Interest expense (net of AFUDC(1) - debt) | 241,625 | 250,996 | 334,314 | 300,857 | 279,788 | 324,943 | ||||||||||||||||||
Income tax expense | 115,052 | 80,704 | 75,451 | 95,354 | 87,555 | 109,799 | ||||||||||||||||||
Depreciation and amortization | 249,067 | 240,912 | 321,921 | 260,608 | 235,532 | 330,076 | ||||||||||||||||||
EBITDA | $ | 823,715 | $ | 751,397 | $ | 914,622 | $ | 865,706 | $ | 800,170 | $ | 986,940 | ||||||||||||
EBITDA/Interest expense | 3.41 | x | 2.99 | x | 2.74 | x | 2.88 | x | 2.86 | x | 3.04 | x | ||||||||||||
Total Debt/EBITDA | 6.88 | x | 7.40 | x | 5.95 | x | 6.09 | x | 5.31 | x | 5.74 | x | ||||||||||||
NV Energy, Inc. | ||||||||||||||||||||||||
Interest expense (net of AFUDC(1) - debt) | $ | 241,625 | $ | 250,996 | $ | 334,314 | $ | 300,857 | $ | 279,788 | $ | 324,943 | ||||||||||||
Long-term debt | $ | 5,313,407 | $ | 5,549,052 | $ | 5,303,357 | $ | 5,266,982 | $ | 4,137,864 | $ | 5,313,407 | ||||||||||||
Current maturities of long-term debt | 356,538 | 9,286 | 134,474 | 9,291 | 110,285 | 356,538 | ||||||||||||||||||
Total Debt | $ | 5,669,945 | $ | 5,558,338 | $ | 5,437,831 | $ | 5,276,273 | $ | 4,248,149 | $ | 5,669,945 | ||||||||||||
(1) Allowance for funds used during construction. |
Nevada Power Company | ||||||||||||||||||||||||
EBITDA | ||||||||||||||||||||||||
Nine Months ended September 30, | Year Ended December 31, | LTM September 30, | ||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2010 | |||||||||||||||||||
Net Income | $ | 181,586 | $ | 140,941 | $ | 134,284 | $ | 151,431 | $ | 165,694 | $ | 174,929 | ||||||||||||
Interest expense (net of AFUDC(1) - debt) | 161,496 | 170,535 | 226,252 | 186,822 | 174,667 | 217,213 | ||||||||||||||||||
Income tax expense | 93,216 | 65,857 | 61,652 | 71,382 | 78,352 | 89,011 | ||||||||||||||||||
Depreciation and amortization | 169,330 | 160,869 | 215,873 | 171,080 | 152,139 | 224,334 | ||||||||||||||||||
EBITDA | $ | 605,628 | $ | 538,202 | $ | 638,061 | $ | 580,715 | $ | 570,852 | $ | 705,487 | ||||||||||||
EBITDA/Interest expense | 3.75 | x | 3.16 | x | 2.82 | x | 3.11 | x | 3.27 | x | 3.25 | x | ||||||||||||
Total Debt/EBITDA | 6.44 | x | 6.89 | x | 5.73 | x | 5.84 | x | 4.44 | x | 5.53 | x | ||||||||||||
Nevada Power Company | ||||||||||||||||||||||||
Interest expense (net of AFUDC(1) - debt) | $ | 161,496 | $ | 170,535 | $ | 226,252 | $ | 186,822 | $ | 174,667 | $ | 217,213 | ||||||||||||
Long-term debt | $ | 3,546,724 | $ | 3,701,308 | $ | 3,535,440 | $ | 3,385,106 | $ | 2,528,141 | $ | 3,546,724 | ||||||||||||
Current maturities of long-term debt | 356,538 | 9,286 | 119,474 | 8,691 | 8,642 | 356,538 | ||||||||||||||||||
Total Debt | $ | 3,903,262 | $ | 3,710,594 | $ | 3,654,914 | $ | 3,393,797 | $ | 2,536,783 | $ | 3,903,262 | ||||||||||||
(1) Allowance for funds used during construction. |
Sierra Pacific Power Company | ||||||||||||||||||||||||
EBITDA | ||||||||||||||||||||||||
Nine Months ended September 30, | Year Ended December 31, | LTM September 30, | ||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2010 | |||||||||||||||||||
Net Income | $ | 52,897 | $ | 58,206 | $ | 73,085 | $ | 90,582 | $ | 65,667 | $ | 67,776 | ||||||||||||
Interest expense (net of AFUDC(1) - debt) | 51,141 | 51,473 | 69,413 | 72,712 | 60,735 | 69,081 | ||||||||||||||||||
Income tax expense | 30,066 | 25,926 | 31,225 | 37,603 | 26,009 | 35,365 | ||||||||||||||||||
Depreciation and amortization | 79,737 | 80,043 | 106,048 | 89,528 | 83,393 | 105,742 | ||||||||||||||||||
EBITDA | $ | 213,841 | $ | 215,648 | $ | 279,771 | $ | 290,425 | $ | 235,804 | $ | 277,964 | ||||||||||||
EBITDA/Interest expense | 4.18 | x | 4.19 | x | 4.03 | x | 3.99 | x | 3.88 | x | 4.02 | x | ||||||||||||
Total Debt/EBITDA | 5.99 | x | 6.32 | x | 4.64 | x | 4.81 | x | 5.03 | x | 4.61 | x | ||||||||||||
Sierra Pacific Power Company | ||||||||||||||||||||||||
Interest expense (net of AFUDC(1) - debt) | $ | 51,141 | $ | 51,473 | $ | 69,413 | $ | 72,712 | $ | 60,735 | $ | 69,081 | ||||||||||||
Long-term debt | $ | 1,281,138 | $ | 1,362,002 | $ | 1,282,225 | $ | 1,395,987 | $ | 1,084,550 | $ | 1,281,138 | ||||||||||||
Current maturities of long-term debt | - | - | 15,000 | 600 | 101,643 | - | ||||||||||||||||||
Total Debt | $ | 1,281,138 | $ | 1,362,002 | $ | 1,297,225 | $ | 1,396,587 | $ | 1,186,193 | $ | 1,281,138 | ||||||||||||
(1) Allowance for funds used during construction. |