EXHIBIT 99.1
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 | ||||||||||||
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Net Income Applicable to Common Stock | $ | 208,887 | $ | 197,295 | $ | 277,451 | ||||||
Interest charges (including AFUDC(1) ) | 300,857 | 279,788 | 311,088 | |||||||||
Income taxes | 95,354 | 87,555 | 145,605 | |||||||||
Depreciation and amortization | 260,608 | 235,532 | 228,875 | |||||||||
EBITDA | $ | 865,706 | $ | 800,170 | $ | 963,019 | ||||||
EBITDA/Interest charges | 2.88 | x | 2.86 | x | 3.10 | x | ||||||
Total Debt/EBITDA | 6.09 | x | 5.31 | x | 4.16 | x | ||||||
NV Energy, Inc. | ||||||||||||
Interest charges (including AFUDC(1) ) | $ | 300,857 | $ | 279,788 | $ | 311,088 | ||||||
Long-term debt | $ | 5,266,982 | $ | 4,137,864 | $ | 4,001,542 | ||||||
Current maturities of long-term debt | 9,291 | 110,285 | 8,348 | |||||||||
Total Debt | $ | 5,276,273 | $ | 4,248,149 | $ | 4,009,890 | ||||||
Nevada Power Company | ||||||||||||
EBITDA | ||||||||||||
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Net Income | $ | 151,431 | $ | 165,694 | $ | 224,540 | ||||||
Interest charges (including AFUDC(1) ) | 186,822 | 174,667 | 176,612 | |||||||||
Income taxes | 71,382 | 78,352 | 117,510 | |||||||||
Depreciation and amortization | 171,080 | 152,139 | 141,585 | |||||||||
EBITDA | $ | 580,715 | $ | 570,852 | $ | 660,247 | ||||||
EBITDA/Interest charges | 3.11 | x | 3.27 | x | 3.74 | x | ||||||
Total Debt/EBITDA | 5.84 | x | 4.44 | x | 3.61 | x | ||||||
Nevada Power Company | ||||||||||||
Interest charges (including AFUDC(1) ) | $ | 186,822 | $ | 174,667 | $ | 176,612 | ||||||
Long-term debt | $ | 3,385,106 | $ | 2,528,141 | $ | 2,380,139 | ||||||
Current maturities of long-term debt | 8,691 | 8,642 | 5,948 | |||||||||
Total Debt | $ | 3,393,797 | $ | 2,536,783 | $ | 2,386,087 | ||||||
Sierra Pacfic Power Company | ||||||||||||
EBITDA | ||||||||||||
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Net Income | $ | 90,582 | $ | 65,667 | $ | 57,709 | ||||||
Interest charges (including AFUDC(1) ) | 72,712 | 60,735 | 71,506 | |||||||||
Income taxes | 37,603 | 26,009 | 27,829 | |||||||||
Depreciation and amortization | 89,528 | 83,393 | 87,279 | |||||||||
EBITDA | $ | 290,425 | $ | 235,804 | $ | 244,323 | ||||||
EBITDA/Interest charges | 3.99 | x | 3.88 | x | 3.42 | x | ||||||
Total Debt/EBITDA | 4.81 | x | 5.03 | x | 4.39 | x | ||||||
Sierra Pacific Power Company | ||||||||||||
Interest charges (including AFUDC(1) ) | $ | 72,712 | $ | 60,735 | $ | 71,506 | ||||||
Long-term debt | $ | 1,395,987 | $ | 1,084,550 | $ | 1,070,858 | ||||||
Current maturities of long-term debt | 600 | 101,643 | 2,400 | |||||||||
Total Debt | $ | 1,396,587 | $ | 1,186,193 | $ | 1,073,258 | ||||||
(1) Allowance for Funds Used During Construction or Allowance for Borrowed Funds Used During Construction |