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THE SECURITIES EXCHANGE ACT OF 1934
Commission File | Registrant, Address of Principal Executive Offices and Telephone | I.R.S. Employer | State of | |||
Number | Number | Identification Number | Incorporation | |||
1-08788 | SIERRA PACIFIC RESOURCES | 88-0198358 | Nevada | |||
P.O. Box 30150 (6100 Neil Road) | ||||||
Reno, Nevada 89520-3150 (89511) | ||||||
(775) 834-4011 | ||||||
2-28348 | NEVADA POWER COMPANY | 88-0420104 | Nevada | |||
6226 West Sahara Avenue | ||||||
Las Vegas, Nevada 89146 | ||||||
(702) 367-5000 | ||||||
0-00508 | SIERRA PACIFIC POWER COMPANY | 88-0044418 | Nevada | |||
P.O. Box 10100 (6100 Neil Road) | ||||||
Reno, Nevada 89520-0024 (89511) | ||||||
(775) 834-4011 |
(Title of each class) | (Name of exchange on which registered) | |
Securities registered pursuant to Section 12(b) of the Act: | ||
Securities of Sierra Pacific Resources: | ||
Common Stock, $1.00 par value | New York Stock Exchange | |
7.803% Senior Notes Due 2012 | New York Stock Exchange | |
Securities registered pursuant to Section 12(g) of the Act: | ||
Securities of Nevada Power Company: | ||
Common Stock, $1.00 stated value | ||
Securities of Sierra Pacific Power Company: | ||
Common Stock, $3.75 par value |
NEVADA POWER COMPANY
SIERRA PACIFIC POWER COMPANY
ANNUAL REPORT ON FORM 10-K
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MWH Sales (Billed and Unbilled) | ||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||
Residential | 9,033,142 | 42.3 | % | 8,288,309 | 41.3 | % | 7,981,116 | 40.1 | % | |||||||||||||||
Commercial & Industrial: | ||||||||||||||||||||||||
Gaming/Recreation/Restaurants | 3,736,608 | 17.5 | % | 3,711,790 | 18.5 | % | 3,587,428 | 18.0 | % | |||||||||||||||
All Other Retail | 8,049,753 | 37.7 | % | 7,454,595 | 37.1 | % | 7,038,692 | 35.4 | % | |||||||||||||||
Total Retail | 20,819,503 | 97.5 | % | 19,454,694 | 96.9 | % | 18,607,236 | 93.5 | % | |||||||||||||||
Wholesale | 244,128 | 1.2 | % | 278,527 | 1.4 | % | 870,398 | 4.4 | % | |||||||||||||||
Sales to Public Authorities | 281,369 | 1.3 | % | 349,912 | 1.7 | % | 408,927 | 2.1 | % | |||||||||||||||
Total | 21,345,000 | 100 | % | 20,083,133 | 100 | % | 19,886,561 | 100 | % | |||||||||||||||
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Forecasted Electric Capacity | ||||||||||||||||||||
Requirements and Resources (MW) | ||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011(4) | ||||||||||||||||
Total Requirements (1) | 6,745 | 7,026 | 7,360 | 7,668 | 7,971 | |||||||||||||||
Resources: | ||||||||||||||||||||
Company-owned existing generation | 2,854 | 2,854 | 2,854 | 2,854 | 2,854 | |||||||||||||||
Company-owned new generation (2) | 413 | 619 | 619 | 619 | ||||||||||||||||
Contracts for power purchases | 3,891 | 1,346 | 1,374 | 1,381 | 1,507 | |||||||||||||||
Total Resources | 6,745 | 4,613 | 4,847 | 4,854 | 4,980 | |||||||||||||||
Total Additional Required (3) | — | 2,413 | 2,513 | 2,814 | 2,991 | |||||||||||||||
(1) | Includes system peak load plus planning reserves. | |
(2) | Clark Station peaking units operational in 2008 and 2009. | |
(3) | Additional Required is the difference between the total required and currently committed resources. Additional required represents the amount needed to achieve the forecasted system peak plus a planning reserve margin. | |
(4) | Does not include the Ely Energy Center, as the Ely Energy Center is not expected to be operational until December 2011. |
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2006 | 2005 | 2004 | ||||||||||||||||||||||
MWh | % of Total | MWh | % of Total | MWh | % of Total | |||||||||||||||||||
NPC Company Generation | ||||||||||||||||||||||||
Gas/Oil | 8,093,020 | 36.1 | % | 2,465,064 | 11.7 | % | 2,557,166 | 12.3 | % | |||||||||||||||
Coal | 4,067,209 | 18.2 | % | 5,629,139 | 26.9 | % | 5,913,062 | 28.4 | % | |||||||||||||||
Total Generated | 12,160,229 | 54.3 | % | 8,094,203 | 38.6 | % | 8,470,228 | 40.7 | % | |||||||||||||||
Purchased Power | ||||||||||||||||||||||||
Hydro | 465,983 | 2.0 | % | 409,309 | 2.0 | % | 450,086 | 2.2 | % | |||||||||||||||
Spot, Firm and Non-Firm | 7,453,758 | 33.3 | % | 10,301,589 | 49.0 | % | 9,458,794 | 45.5 | % | |||||||||||||||
Non-Utility Purchases | 2,328,653 | 10.4 | % | 2,183,484 | 10.4 | % | 2,410,381 | 11.6 | % | |||||||||||||||
Total Purchased | 10,248,394 | 45.7 | % | 12,894,382 | 61.4 | % | 12,319,261 | 59.3 | % | |||||||||||||||
Total System | 22,408,623 | 100.0 | % | 20,988,585 | 100.0 | % | 20,789,489 | 100.0 | % | |||||||||||||||
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Average Consumption Cost & Percentage Contribution to Total Fuel Requirement | ||||||||||||||||||||||||
Gas | Coal | Oil | ||||||||||||||||||||||
$/MMBtu | Percent | $/MMBtu | Percent | $/MMBtu | Percent | |||||||||||||||||||
2006 | 7.40 | 58.8 | % | 1.63 | 41.1 | % | 16.66 | 0.1 | % | |||||||||||||||
2005 | 6.18 | 32.7 | % | 1.59 | 67.1 | % | 13.50 | 0.1 | % | |||||||||||||||
2004 | 6.13 | 27.3 | % | 1.33 | 72.6 | % | 8.75 | 0.1 | % | |||||||||||||||
2003 | 5.70 | 40.9 | % | 1.41 | 59.0 | % | 5.28 | 0.1 | % | |||||||||||||||
2002 | 5.41 | 38.9 | % | 1.37 | 60.9 | % | 5.77 | 0.2 | % |
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Company Name | ||||||||
(Counterparty) | Quantity (MW) | Contract Termination | ||||||
State of Nevada, Colorado River Commission | 200 MW | 2017 | ||||||
Nevada Sun Peak Limited Partnership | 222 MW | 2016 | ||||||
Las Vegas Cogeneration II | 224 MW | 2013 | ||||||
Southern Nevada Water Authority | 125 MW | 2013 | ||||||
California Department of Water Resources | 233 MW | 2013 | ||||||
Mirant | 200 MW | 2008 | ||||||
Mirant(1) | 100 MW | 2007 | ||||||
Mirant(1) | 25 MW | 2007 |
(1) | Effective from June 15th through September 15th each year. |
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• | Long-term and short-term firm point-to-point transmission service (“guaranteed” service with fixed delivery and receipt points), | ||
• | Non-firm point-to-point service (“as available” service with fixed delivery and receipt points), and | ||
• | Network transmission service (equivalent to the service NPC provides for NPC’s bundled retail customers). |
2007 | 2008-2011 | 5 - Year | ||||||||||
Electric Facilities | ||||||||||||
Generation | $ | 537,998 | $ | 3,082,351 | $ | 3,620,349 | ||||||
Distribution | 211,551 | 888,550 | 1,100,101 | |||||||||
Transmission | 140,041 | 1,103,075 | 1,243,116 | |||||||||
Other | 136,438 | 403,882 | 540,320 | |||||||||
Total | $ | 1,026,028 | $ | 5,477,858 | $ | 6,503,886 | ||||||
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2007 | 2008-2011 | Total 5 - Year | ||||||||||
Construction Expenditures | $ | 1,026,028 | $ | 5,477,858 | $ | 6,503,886 | ||||||
AFUDC | (23,373 | ) | (487,761 | ) | (511,134 | ) | ||||||
Net Salvage/ Cost of Removal | (1,800 | ) | (7,400 | ) | (9,200 | ) | ||||||
Net Customer Advances and CIAC | (20,800 | ) | (85,305 | ) | (106,105 | ) | ||||||
Total Cash Requirements | $ | 980,055 | $ | 4,897,392 | $ | 5,877,447 | ||||||
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MWH Sales (Billed and Unbilled) | ||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||
Retail: | ||||||||||||||||||||||||
Residential | 2,480,681 | 28.2 | % | 2,381,389 | 25.5 | % | 2,295,944 | 23.8 | % | |||||||||||||||
Commercial and Industrial: | ||||||||||||||||||||||||
Mining | 1,873,177 | 21.3 | % | 2,716,309 | 29.1 | % | 2,686,716 | 27.8 | % | |||||||||||||||
All Other | 4,356,878 | 49.5 | % | 4,136,208 | 44.3 | % | 4,160,567 | 43.0 | % | |||||||||||||||
Total Retail | 8,710,736 | 99.0 | % | 9,233,906 | 98.9 | % | 9,143,227 | 94.6 | % | |||||||||||||||
Wholesale | 69,757 | 0.8 | % | 81,856 | 0.9 | % | 505,986 | 5.2 | % | |||||||||||||||
Streetlights | 15,502 | 0.2 | % | 15,105 | 0.2 | % | 14,932 | 0.2 | % | |||||||||||||||
TOTAL | 8,795,995 | 100 | % | 9,330,867 | 100 | % | 9,664,145 | 100 | % | |||||||||||||||
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Forecasted Electric Capacity | ||||||||||||||||||||
Requirements and Resources (MW) | ||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011(4) | ||||||||||||||||
Total Requirements (1) | 1,870 | 2,051 | 2,134 | 2,177 | 2,211 | |||||||||||||||
Resources: | ||||||||||||||||||||
Company-owned existing generation | 1,023 | 1,023 | 1,035 | 1,035 | 1,035 | |||||||||||||||
Company-owned new generation (2) | 514 | 514 | 514 | 514 | ||||||||||||||||
Contracts for power purchases | 847 | 257 | 213 | 261 | 279 | |||||||||||||||
Currently Committed Resources | 1,870 | 1,794 | 1,762 | 1,810 | 1,828 | |||||||||||||||
Additional Required (3) | — | 257 | 372 | 367 | 383 | |||||||||||||||
(1) | Includes system peak load plus planning reserves. | |
(2) | New generation in 2008 for Tracy combined cycle facility at 514 MW. | |
(3) | Additional Required represents the difference between the current committed resources and the total resources needed to achieve the forecasted system peak plus a planning reserve margin. | |
(4) | Does not include the Ely Energy Center, as the Ely Energy Center is not expected to be operational until December 2011. |
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2006 | 2005 | 2004 | ||||||||||||||||||||||
MWh | % of Total | MWh | % of Total | MWh | % of Total | |||||||||||||||||||
SPPC Company Generation | ||||||||||||||||||||||||
Gas/Oil | 2,210,532 | 23.4 | % | 2,345,196 | 23.9 | % | 2,562,103 | 24.8 | % | |||||||||||||||
Coal | 1,848,591 | 19.7 | % | 2,000,719 | 20.4 | % | 2,018,715 | 19.6 | % | |||||||||||||||
Hydro | 0 | N/A | 33,355 | 0.3 | % | 24,090 | 0.2 | % | ||||||||||||||||
Total Generated | 4,059,123 | 43.1 | % | 4,379,270 | 44.6 | % | 4,604,908 | 44.6 | % | |||||||||||||||
Purchased Power | ||||||||||||||||||||||||
Spot, Firm and Non-Firm | 4,392,896 | 46.8 | % | 4,778,786 | 48.7 | % | 4,845,650 | 46.9 | % | |||||||||||||||
Non-Utility Purchases | 941,445 | 10.1 | % | 662,261 | 6.7 | % | 873,868 | 8.5 | % | |||||||||||||||
Total Purchased | 5,334,341 | 56.9 | % | 5,441,047 | 55.4 | % | 5,719,518 | 55.4 | % | |||||||||||||||
Total System | 9,393,464 | 100.0 | % | 9,820,317 | 100.0 | % | 10,324,426 | 100.0 | % | |||||||||||||||
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Gas | Coal | Oil | ||||||||||||||||||||||
$/MMBtu | Percent | $/MMBtu | Percent | $/MMBtu | Percent | |||||||||||||||||||
2006 | 8.92 | 55.85 | % | 1.83 | 43.88 | % | 10.15 | .27 | % | |||||||||||||||
2005 | 7.87 | 56.81 | % | 1.67 | 43.08 | % | 7.37 | .11 | % | |||||||||||||||
2004 | 7.32 | 53.11 | % | 1.39 | 44.93 | % | 6.14 | 1.96 | % | |||||||||||||||
2003 | 6.68 | 59.11 | % | 1.60 | 40.79 | % | 6.92 | .10 | % | |||||||||||||||
2002 | 4.42 | 41.10 | % | 1.68 | 58.70 | % | 5.69 | .20 | % |
Energy Provider | Capacity | Expiration | ||
Pacificorp | 75 MW | 2009 | ||
Barrick | 8 MW | 2008 |
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• | Long-term and short-term firm point-to-point transmission service (“guaranteed” service with fixed delivery and receipt points), | ||
• | Non-firm point-to-point service (“as available” service with fixed delivery and receipt points), and | ||
• | Network transmission service (equivalent to the service SPPC provides for SPPC’s bundled retail customers). |
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Northwest | 68,664 | decatherms per day firm | (Annual) | |||||
Paiute | 68,696 | decatherms per day firm | (November through March) | |||||
Paiute | 61,044 | decatherms per day firm | (April through October) | |||||
Paiute | 23,000 | decatherms per day firm | (LNG tank to Reno/Sparks) | |||||
Nova | 130,217 | decatherms per day firm | (Annual) | |||||
ANG | 128,932 | decatherms per day firm | (Annual) | |||||
GTN | 130,169 | decatherms per day firm | (November through April) | |||||
GTN | 69,899 | decatherms per day firm | (May through October) | |||||
Tuscarora | 132,823 | decatherms per day firm | (Annual) |
Williams: | 281,242 | decatherms inventory capability at Jackson Prairie | ||||
12,687 | decatherms withdrawal capability per day from Jackson Prairie | |||||
Paiute | 303,604 | Decatherms inventory capability at Paiute LNG | ||||
23,000 | LNG Storage |
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2007 | 2008-2011 | 5 - Year | ||||||||||
Electric Facilities: | ||||||||||||
Generation | $ | 309,256 | $ | 871,233 | $ | 1,180,489 | ||||||
Distribution | 61,596 | 262,460 | 324,056 | |||||||||
Transmission | 54,301 | 328,646 | 382,947 | |||||||||
Other | 29,258 | 123,852 | 153,110 | |||||||||
Total | 454,411 | 1,586,191 | 2,040,602 | |||||||||
Gas Facilities: | ||||||||||||
Distribution | 16,652 | 70,944 | 87,596 | |||||||||
Other | 80 | 339 | 419 | |||||||||
Total | 16,732 | 71,283 | 88,015 | |||||||||
Common Facilities | 15,349 | 64,965 | 80,314 | |||||||||
TOTAL | $ | 486,492 | $ | 1,722,439 | $ | 2,208,931 | ||||||
2007 | 2008-2011 | Total 5 - Year | ||||||||||
Construction Expenditures | $ | 486,492 | $ | 1,722,439 | $ | 2,208,931 | ||||||
AFUDC | (28,926 | ) | (120,038 | ) | (148,964 | ) | ||||||
Net Salvage/ Cost of Removal | (2,800 | ) | (11,465 | ) | (14,265 | ) | ||||||
Net Customer Advances and CIAC | (22,000 | ) | (90,230 | ) | (112,230 | ) | ||||||
Total Cash Requirements | $ | 432,766 | $ | 1,500,706 | $ | 1,933,472 | ||||||
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• | Installation of commercially-proven pollution controls coupled with an emphasis on continued operational excellence to achieve further plant efficiency improvements. SPR’s new natural gas-fired generating plants require the combustion of far less fuel than older facilities to produce each kilowatt hour of electrical output. As new generation is added to the system, SPR is concurrently evaluating and eliminating older, less efficient units from its fleet. |
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• | Maintenance of robust demand-side management programs, including energy efficiency and conservation education and support. These programs increase the adoption of energy-efficient equipment by our customers, thereby creating savings on energy bills and potentially delaying the need for additional power plant, transmission, and distribution construction. | ||
• | Development of technology solutions through funding and participation in collaborative research programs for advanced coal technologies, as well as potential options for carbon sequestration. SPR is reserving space in its proposed Ely Energy Center design that will allow the retrofit of carbon capture technology once it becomes commercially viable. | ||
• | Expansion of company owned renewable energy sources and continued use of purchase power agreements and investments that focus on lower or non-emitting generation resources. The State of Nevada mandates that an increasing percentage of the energy SPR sells must come from renewable sources, reaching 20 percent by 2015. With two large-scale solar projects presently under construction in the State, by the end of 2007, Nevada will be number one in the nation for solar watts generated per person and the percentage of solar to total kilowatt hours sold. |
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• | prevailing market prices for coal, oil, natural gas and other fuels used in generation plants, including associated transportation costs, and supplies of such commodities; | ||
• | changes in the regulatory framework for the commodities markets that they rely on for purchased power and fuel; | ||
• | liquidity in the general wholesale electricity market; | ||
• | the actions of external parties, such as the FERC or independent system operators, that may impose price limitations and other mechanisms to address some of the volatility in the western energy markets; | ||
• | weather conditions impacting demand for electricity or availability of hydroelectric power or fuel supplies; | ||
• | union and labor relations; | ||
• | natural disasters, wars, acts of terrorism, embargoes and other catastrophic events; and | ||
• | changes in federal and state energy and environmental laws and regulations. |
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Number of | Winter MW | Summer MW | Commercial Operation | |||||||||||||||
Plant Name | Type | Fuel | Units | Capacity | Capacity | Year | ||||||||||||
Clark (1) | Combined Cycle | Gas/Oil | 6 | 506 | 430 | 1979, 1979, 1980, 1982, 1993, 1994 | ||||||||||||
Gas | Gas/Oil | 1 | 63 | 54 | 1973 | |||||||||||||
Sunrise | Steam | Gas | 1 | 82 | 80 | 1964 | ||||||||||||
Gas | Gas/Oil | 1 | 81 | 70 | 1974 | |||||||||||||
Harry Allen | Gas | Gas/Oil | 2 | 168 | 144 | 1995, 2006 | ||||||||||||
Chuck Lenzie (2) | Combined Cycle | Gas | 6 | 1,220 | 1,102 | 2006 | ||||||||||||
Silverhawk (3) | Combined Cycle | Gas | 3 | 449 | 395 | 2004 | ||||||||||||
Mohave (4)(5) | Steam | Coal | 0 | 0 | 0 | 1971, 1971 | ||||||||||||
Navajo (6) | Steam | Coal | 3 | 255 | 255 | 1974, 1975, 1976 | ||||||||||||
Reid Gardner (7) | Steam | Coal | 4 | 324 | 324 | 1965, 1968, 1976, 1983 | ||||||||||||
Total | 27 | 3,148 | 2,854 | |||||||||||||||
(1) | The two combined cycles at Clark each consist of two gas turbines, two Heat Recovery Steam Generators (HRSG), and one steam turbine. In 1993 and 1994, the original four gas turbines (1979-1982) were combined with four new HRSGs and two new steam turbines to form the combined cycles. | |
(2) | The two combined cycles at Lenzie each consist of two gas turbines, two HRSGs and one steam turbine. | |
(3) | The acquisition of a 75% ownership interest in the 599 MW Silverhawk power station from Pinnacle West was consummated in 2006. Southern Nevada Water Authority continues to hold a 25% ownership interest in the plant. The combined cycle plant consists of two gas turbines, two HRSGs and one steam turbine. | |
(4) | Per a 1999 Consent Decree, Mohave ceased operation on December 31, 2005. The PUCN approved establishing regulatory accounts related to the shutdown. See Note 5, Jointly Owned Facilities and Note 13, Commitments and Contingencies, Regulatory Contingencies, of the Notes to Financial Statements for further discussion. | |
(5) | Prior to the shut down, the total summer net capacity of the Mohave Generating Station was 1,580 MW. Southern California Edison is the operating agent and NPC has a 14% interest in the Station. | |
(6) | NPC has an 11.3% interest in the Navajo Generating Station. The total capacity of the Station is 2,250 MW. Salt River Project is the operator (21.7% interest). There are four other partners: U.S. Bureau of Reclamation (24.3% interest), Los Angeles Dept. of Water & Power (21.2% interest), Arizona Public Service Co (14% interest), and Tucson Electric Power (7.5% interest). | |
(7) | Reid Gardner Unit No. 4 is co-owned by the California Department of Water Resources (CDWR) (67.8%) and NPC (32.2%); NPC is the operating agent. NPC is entitled to 25 MW of base load capacity and 235 MW of peaking capacity from that Unit, subject to the following limitations: 1,500 hours/year, 300 hours/month, and 8 hours/day. There was a 15 MW upgrade to the Unit in 1990, which is now under CDWR’s control; the total summer net capacity of the Unit, subject to heat input limitation, is 257 MW. Reid Gardner Units 1, 2, and 3, subject to heat input limitations, are 100 MW each; the total net capacity of the Station is 557 MW. |
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Number of | Winter MW | Summer MW | Commercial Operation | |||||||||||||||
Plant Name | Type | Fuel | Units | Capacity | Capacity | Year | ||||||||||||
Ft. Churchill | Steam | Gas/Oil | 2 | 226 | 226 | 1968, 1971 | ||||||||||||
Tracy | Steam | Gas/Oil | 3 | 244 | 244 | 1963, 1965, 1974 | ||||||||||||
Tracy 4&5 (1) | Combined Cycle | Gas | 2 | 108 | 104 | 1996, 1996 | ||||||||||||
Clark Mtn. CT’s | Gas | Gas/Oil | 2 | 144 | 132 | 1994, 1994 | ||||||||||||
Valmy (2) | Steam | Coal | 2 | 261 | 261 | 1981, 1985 | ||||||||||||
Other (3) | Gas, Diesels | Propane, Oil | 13 | 60 | 56 | 1960-1970 | ||||||||||||
Total | 24 | 1,043 | 1,023 | |||||||||||||||
(1) | Tracy 4&5 were part of the Pinõn Pine Integrated Coal Gasification Combined Cycle power plant located at Tracy Station. This project was part of the Department of Energy’s Clean Coal Demonstration Program. Although the coal gasification portion of the facility has never proven operational, the combined cycle unit has been operating on natural gas since 1996. The combined cycle consists of one combustion turbine, one HRSG, and one steam turbine. In 2003, SPPC installed duct burners, which added 15 MW of capacity. | |
(2) | Valmy is co-owned by Idaho Power Company (50%) and SPPC (50%); SPPC is the operator. The Plant has a total net capacity of 522 MW. | |
(3) | There are 3 combustion turbines and 10 diesel units included in the “Other” category. |
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ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (SPR) |
2006 | 2005 | |||||||||||||||
High | Low | High | Low | |||||||||||||
First Quarter | $ | 14.60 | $ | 12.68 | $ | 11.30 | $ | 9.00 | ||||||||
Second Quarter | 14.35 | 12.68 | 13.05 | 10.11 | ||||||||||||
Third Quarter | 14.91 | 13.30 | 15.36 | 12.05 | ||||||||||||
Fourth Quarter | 17.50 | 14.29 | 15.20 | 12.34 |
Title of Class | Number of Record Holders | |||
Common Stock: | $1.00 Par Value | As of February 23, 2007:17,515 |
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Year ended December 31, | ||||||||||||||||||||
(dollars in thousands; except per share amounts) | ||||||||||||||||||||
2006(1) | 2005(2) | 2004(3) | 2003(4) | 2002(5) | ||||||||||||||||
Operating Revenues | $ | 3,355,950 | $ | 3,030,242 | $ | 2,824,796 | $ | 2,787,543 | $ | 2,984,604 | ||||||||||
Operating Income (Loss) | $ | 488,797 | $ | 358,678 | $ | 333,858 | $ | 260,314 | $ | (28,939 | ) | |||||||||
Income (Loss) from Continuing Operations | $ | 279,792 | $ | 86,137 | $ | 30,842 | $ | (117,286 | ) | $ | (297,733 | ) | ||||||||
Income (Loss) from Continuing Operations Per Average Common Share — Basic and Diluted | $ | 1.34 | $ | 0.46 | $ | 0.17 | $ | (1.01 | ) | $ | (2.92 | ) | ||||||||
Total Assets | $ | 8,832,076 | $ | 7,870,546 | $ | 7,528,467 | $ | 7,063,758 | $ | 7,110,639 | ||||||||||
Long-Term Debt | $ | 4,001,542 | $ | 3,817,122 | $ | 4,081,281 | $ | 3,579,674 | $ | 3,194,966 | ||||||||||
Dividends Declared Per Common Share | $ | — | $ | — | $ | — | $ | — | $ | 0.20 | ||||||||||
(1) | Income from continuing operations, for the year ended December 31, 2006, includes reinstatement of deferred energy of approximately $180 million and a $62.9 million gain on the sale of Tuscarora Gas Pipeline Company’s partnership interest in Tuscarora Gas Transmission Company. | |
(2) | Income from continuing operations, for the year ended December 31, 2005, includes a charge of $54 million for the inducement of debt conversion and the reversal of $20.9 million in interest charges as a result of settlements with terminated suppliers. | |
(3) | Income from continuing operations, for the year ended December 31, 2004, includes the reversal of $39.8 million in interest expense due to the decision on the appeal of the Enron bankruptcy judgment and the write-off of $47.1 million in disallowed plant costs at SPPC. | |
(4) | Loss from continuing operations, for the year ended December 31, 2003, was negatively affected by an unrealized net loss of $46.1 million on the derivative instrument associated with the issuance of SPR’s $300 million Convertible Notes, $91 million write-off of deferred energy costs by NPC and SPPC and approximately $52 million of interest charges related to the Enron litigation. | |
(5) | Loss from continuing operations and total assets, for the year ended December 31, 2002, was severely affected by the write-off of deferred energy costs and related carrying charges of $523 million as a result of the PUCN decision in NPC’s and SPPC’s deferred energy cases disallowing $434 million and $53 million, respectively, of deferred purchased fuel and power costs. |
Year ended December 31, | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
2006(1) | 2005(2) | 2004(3) | 2003(4) | 2002(5) | ||||||||||||||||
Operating Revenues | $ | 2,124,081 | $ | 1,883,267 | $ | 1,784,092 | $ | 1,756,146 | $ | 1,901,034 | ||||||||||
Operating Income (Loss) | $ | 351,272 | $ | 228,827 | $ | 216,490 | $ | 183,733 | $ | (104,003 | ) | |||||||||
Net Income (Loss) | $ | 224,540 | $ | 132,734 | $ | 104,312 | $ | 19,277 | $ | (235,070 | ) | |||||||||
Total Assets | $ | 5,987,515 | $ | 5,173,921 | $ | 4,883,540 | $ | 4,210,759 | $ | 4,166,988 | ||||||||||
Long-Term Debt | $ | 2,380,139 | $ | 2,214,063 | $ | 2,275,690 | $ | 1,899,709 | $ | 1,683,310 | ||||||||||
Dividends Declared — Common Stock | $ | 48,917 | $ | 35,258 | $ | 45,373 | $ | — | $ | 10,000 | ||||||||||
(1) | Income from continuing operations, for the year ended December 31, 2006, includes reinstatement of deferred energy of approximately $180 million. |
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(2) | For the year ended 2005, Income from Continuing Operations included the reversal of $17.7 million in interest charges as a result of settlements with terminated suppliers. | |
(3) | Net Income for the year ended December 31, 2004 included the reversal of $27.5 million in interest expense due to the decision on the appeal of the Enron bankruptcy judgment. | |
(4) | Net Income for the year ended December 31, 2003 included a $46 million write-off of deferred energy costs and $36 million of interest charges related to the Enron litigation. | |
(5) | Net Loss and Total Assets for the year ended December 31, 2002 was severely affected by the write-off of $465 million of deferred purchased fuel and power costs and related carrying charges. |
Year ended December 31, | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
2006 | 2005(1) | 2004(2) | 2003(3) | 2002(4) | ||||||||||||||||
Operating Revenues | $ | 1,230,230 | $ | 1,145,697 | $ | 1,035,660 | $ | 1,029,866 | $ | 1,081,034 | ||||||||||
Operating Income | $ | 120,017 | $ | 116,304 | $ | 111,245 | $ | 68,566 | $ | 55,292 | ||||||||||
Net Income (Loss) | $ | 57,709 | $ | 52,074 | $ | 18,577 | $ | (23,275 | ) | $ | (13,968 | ) | ||||||||
Total Assets | $ | 2,807,837 | $ | 2,546,301 | $ | 2,524,320 | $ | 2,362,469 | $ | 2,457,516 | ||||||||||
Preferred Stock | $ | — | $ | 50,000 | $ | 50,000 | $ | 50,000 | $ | 50,000 | ||||||||||
Long-Term Debt | $ | 1,070,858 | $ | 941,804 | $ | 994,309 | $ | 912,800 | $ | 914,788 | ||||||||||
Dividends Declared — Common Stock | $ | 24,619 | $ | 23,933 | $ | — | $ | 18,530 | $ | 44,900 | ||||||||||
Dividends Declared — Preferred Stock | $ | 975 | $ | 3,900 | $ | 3,900 | $ | 3,900 | $ | 3,900 | ||||||||||
(1) | Income from Continuing Operations, for the year ended December 31, 2005, includes the reversal in the fourth quarter of $3.2 million in interest expense related to settlement with terminated suppliers. | |
(2) | Net Income from Continuing Operations, for the year ended December 31, 2004, was affected by the write-off of $47.1 million in disallowed plant costs and the reversal of interest expense of $12.3 million due to the decision on the appeal of the Enron Bankruptcy judgment and a reduction to income tax expense of $3.3 million as a result of a flow-through adjustment for pension funding. | |
(3) | Loss from Continuing Operations, for the year ended December 31, 2003, was affected by the write off of $45 million in June 2003 of disallowed deferred energy costs and interest charges of $16 million related to the Enron litigation. | |
(4) | Loss from Continuing Operations, for the year ended December 31, 2002, was severely affected by the write-off of $58 million of deferred purchased fuel and power costs and related carrying charges. |
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ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
(1) | unfavorable or untimely rulings in rate cases filed or to be filed by NPC and SPPC (collectively referred to as the Utilities) with the Public Utility Commission of Nevada (PUCN), including the periodic applications to recover costs for fuel and purchased power that have been recorded by the Utilities in their deferred energy accounts, and deferred natural gas costs recorded by SPPC for its gas distribution business; | ||
(2) | the ability and terms upon which SPR, NPC and SPPC will be able to access the capital markets to support their requirements for working capital, including amounts necessary for construction and acquisition costs and other capital expenditures, as well as to finance deferred energy costs, particularly in the event of unfavorable rulings by the PUCN, untimely regulatory approval for such financings, and/or a downgrade of the current debt ratings of SPR, NPC, or SPPC; | ||
(3) | whether the Utilities will be able to continue to obtain fuel and power from their suppliers on favorable payment terms and favorable prices, particularly in the event of unanticipated power demands (for example, due to unseasonably hot weather), sharp increases in the prices for fuel and/or power or a ratings downgrade; | ||
(4) | changes in environmental laws or regulations, including the imposition of significant new limits on emissions from electric generating facilities, such as requirements to reduce carbon dioxide (CO2) emissions, other greenhouse gases and/or other pollutants in response to climate change legislation; | ||
(5) | wholesale market conditions, including availability of power on the spot market, which affect the prices the Utilities have to pay for power as well as the prices at which the Utilities can sell any excess power; | ||
(6) | changes in the rate of industrial, commercial, and residential growth in the service territories of the Utilities; | ||
(7) | the effect that any construction risks may have on our business, such as the risk of delays in permitting, changes in environmental laws, securing adequate skilled labor, cost and availability of materials and equipment, equipment failure, work accidents, fire or explosions, business interruptions, possible cost overruns, delay of in-service dates, and pollution and environmental damage; | ||
(8) | whether the Utilities can procure sufficient renewable energy sources in each compliance year to satisfy the Nevada Portfolio Standard; | ||
(9) | whether NPC will be successful in obtaining PUCN approval to recover the outstanding balance of its other regulatory assets and other merger costs recorded in connection with the 1999 merger between SPR and NPC in a future general rate case; | ||
(10) | whether the Utilities will be able to continue to pay SPR dividends under the terms of their respective financing and credit agreements, their regulatory order from the PUCN, and limitations imposed by the Federal Power Act; | ||
(11) | unseasonable weather and other natural phenomena, which, in addition to affecting the Utilities’ customers’ demand for power, can have a potentially serious impact on the Utilities’ ability to procure adequate supplies of fuel or purchased power to serve their respective customers and on the cost of procuring such supplies; | ||
(12) | the effect that any future terrorist attacks, wars, threats of war, or epidemics may have on the tourism and gaming industries in Nevada, particularly in Las Vegas, as well as on the economy in general; | ||
(13) | the final outcome of the proceedings to reverse the PUCN’s 2004 decision on SPPC’s 2003 General Rate Case, which disallowed the recovery of a portion of SPPC’s costs, expenses and investment in the Piñon Pine Project; |
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(14) | the timing of the PUCN’s decision regarding the time period NPC is to recover the approximate $180 million of deferred energy that were disallowed in 2002 and were reinstated by the Nevada Supreme Court in July 2006; | ||
(15) | the timing and final outcome of the PUCN’s decision regarding the Utilities’ recovery of deferred energy costs associated with claims for terminated supplier contracts; | ||
(16) | employee workforce factors, including changes in collective bargaining unit agreements, strikes or work stoppages; | ||
(17) | changes in tax or accounting matters or other laws and regulations to which SPR or the Utilities are subject; | ||
(18) | the effect of existing or future Nevada, California or federal legislation or regulations affecting electric industry restructuring, including laws or regulations which could allow additional customers to choose new electricity suppliers or change the conditions under which they may do so; | ||
(19) | changes in the business or power demands of the Utilities’ major customers, including those engaged in gold mining or gaming, which may result in changes in the demand for services of the Utilities, including the effect on the Nevada gaming industry of the opening of additional Indian gaming establishments in California and other states; | ||
(20) | unusual or unanticipated changes in normal business operations, including unusual maintenance or repairs; | ||
(21) | future economic conditions, including inflation rates and monetary policy; and | ||
(22) | financial market conditions, including changes in availability of capital or interest rate fluctuations. |
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• | Critical Accounting Policies and Estimates |
• | Recent Pronouncements |
• | For each of SPR, NPC and SPPC: |
• | Results of Operations | ||
• | Analysis of Cash Flows | ||
• | Liquidity and Capital Resources | ||
• | Energy Supply (Utilities) | ||
• | Regulatory Proceedings (Utilities) |
• | the July 2006, Nevada Supreme Court ruling which allows NPC to recover approximately $180 million ($117 million, after tax) of the previously disallowed deferred energy costs, for further discussion of the legal proceeding, see Note 13, Commitments and Contingencies of the Notes to Financial Statements; | ||
• | the $40.9 million gain on sale of the partnership interest in Tuscarora Gas Transmission Company (TGTC) held by Tuscarora Gas Pipeline Company’s (TGPC), a wholly owned subsidiary of SPR; | ||
• | improved operating income (excluding the approximate $180 million reinstatement); | ||
• | other income of $21.7 million for the carrying charge on Lenzie; | ||
• | early tender fees of $6.9 million for the extinguishment of $85 million of SPR’s 8.625% Senior Notes and $25 million of SPR’s 7.803% Senior Notes; and | ||
• | a charge recorded in 2005 for $35.1 million in early debt conversion fees associated with SPR’s convertible notes. |
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• | increases in operating income primarily resulting from general rate cases decided in 2004 as well as continued customer growth; | ||
• | increases in Allowance for Other Funds used During Construction and Allowance for Borrowed Funds used During Construction, for a total of approximately $29.3 million, primarily due to the construction of the Chuck Lenzie Generating Station; | ||
• | lower interest expenses due to refinancing activities; | ||
• | reversal of interest for energy suppliers on settled disputes of approximately $13.6 million. |
• | early conversion fees of the Convertible Notes of approximately $35.1 million after taxes and unamortized debt issuance costs and legal fees associated with the various financing transactions of approximately $6.3 million after taxes; | ||
• | legal fees of approximately $7.4 million. |
• | The completion of the Lenzie generating station, a nominally rated 1,200 MW natural gas-fired high efficiency combined cycle power plant acquired from Duke Energy (“Lenzie”). | ||
• | In January 2006, NPC completed the $208 million purchase of a 75 percent ownership interest in the Silverhawk Generating Facility (“Silverhawk”) from Pinnacle West Capital Corporation (“Pinnacle West”), Pinnacle West Energy Corporation, a wholly-owned subsidiary of Pinnacle West, and GenWest, LLC. Silverhawk is a 560-megawatt, natural gas-fueled high efficiency combined-cycle electric generating facility located 20 miles northeast of Las Vegas. | ||
• | The completion of an 80 MW combustion turbine at NPC’s Harry Allen site. |
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• | issuance of $325 million of NPC’s 6.5% General and Refunding Mortgage Notes, Series O, due 2018 | ||
• | issuance of $370 million of NPC’s 6.65% General and Refunding Mortgage Notes, Series N, due 2036 | ||
• | issuance of $210 million of NPC’s 5.95% General and Refunding Mortgage Notes, Series M, due 2016 | ||
• | issuance of $92.5 million of various NPC Pollution Control Refunding Revenue Bonds | ||
• | increases to NPC’s and SPPC’s Revolving Credit facilities to $600 million and $350 million, respectively | ||
• | issuance of $300 million of SPPC’s 6.0% General and Refunding Mortgage Notes, Series M, due 2016 | ||
• | issuance of $268 million of SPPC’s Pollution Control and Gas and Water Facilities Refunding Revenue Bonds, Series 2006, 2006A, 2006B and 2006C | ||
• | SPR tendered for and extinguished approximately $85 million of SPR’s 8.625% Senior Notes and approximately $25 million of SPR’s 7.803% Senior Notes | ||
• | redemptions of various NPC debt of approximately $667.8 million | ||
• | redemption and payments of various SPPC debt of approximately $487 million | ||
• | redemption of $50 million of SPPC’s Series A Preferred Stock |
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Expiration | ||||||||||||||||
Deferred Tax Asset | Valuation Allowance | Net Deferred Tax Asset | Period | |||||||||||||
Federal NOL | $ | 213,024 | $ | — | $ | 213,024 | 2020-2023 | |||||||||
State NOL | 1,058 | — | 1,058 | 2008-2013 | ||||||||||||
Research and development credit | 3,764 | — | 3,764 | 2021-2025 | ||||||||||||
Alternative minimum tax credit | 8,696 | — | 8,696 | indefinite | ||||||||||||
Arizona state coal credits | 1,292 | 732 | 560 | 2007-2011 | ||||||||||||
Total | $ | 227,834 | $ | 732 | $ | 227,102 | ||||||||||
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Change in | Impact on | Impact on | ||||||
Actuarial Assumption | Assumption | PBO | PC | |||||
(dollars in millions) | Incr/(Decr) | Incr/(Decr) | Incr/(Decr) | |||||
Discount Rate | 1 | % | $(82.4) | $(10.8) | ||||
Rate of Return on Plan Assets | 1 | % | N/A | $ (5.3) |
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Change in | Impact on | Impact on | ||||
Actuarial Assumption | Assumption | APBO | PBC | |||
(dollars in millions) | Incr/(Decr) | Incr/(Decr) | Incr/(Decr) | |||
Discount Rate | 1% | $(21.4) | $(1.9) | |||
Health Care Cost Trend Rate | 1% | $19.6 | $3.4 | |||
Rate of Return on Plan Assets | 1% | N/A | $(0.8) |
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Available Liquidity as of December 31, 2006 (in millions) | ||||||||||||
SPR | NPC | SPPC | ||||||||||
Cash and Cash Equivalents | $ | 24.7 | $ | 36.6 | $ | 53.3 | ||||||
Balance available on Revolving Credit Facility | N/A | 545.0 | 340.6 | |||||||||
Total Available Liquidity | $ | 24.7 | $ | 581.6 | $ | 393.9 | ||||||
2006 | 2005 | |||||||||||||||
Current Maturities of Long-Term Debt | $ | 8,348 | 0.1 | % | $ | 58,909 | 1.0 | % | ||||||||
Long-Term Debt | 4,001,542 | 60.3 | % | 3,817,122 | 63.8 | % | ||||||||||
Preferred Stock | — | — | % | 50,000 | 0.8 | % | ||||||||||
Common Equity | 2,622,297 | 39.6 | % | 2,060,154 | 34.4 | % | ||||||||||
Total | $ | 6,632,187 | 100 | % | $ | 5,986,185 | 100 | % | ||||||||
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Payment Due by Period | ||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | ||||||||||||||||||||||
NPC/SPPC Long-Term Debt Maturities | $ | 8,348 | $ | 329,468 | $ | 102,738 | $ | 7,843 | $ | 369,734 | $ | 2,654,363 | $ | 3,472,494 | ||||||||||||||
NPC/SPPC Long-Term Debt Interest Payments | 215,941 | 203,602 | 192,614 | 192,188 | 175,159 | 1,663,305 | 2,642,809 | |||||||||||||||||||||
SPR Long-Term Debt Maturities | — | — | — | — | — | 549,209 | 549,209 | |||||||||||||||||||||
SPR Long-Term Debt Interest Payments | 42,541 | 42,541 | 42,541 | 42,541 | 42,541 | 135,707 | 348,412 | |||||||||||||||||||||
Purchased Power | 462,402 | 368,810 | 323,215 | 323,882 | 323,541 | 3,925,708 | 5,727,558 | |||||||||||||||||||||
Coal and Natural Gas | 451,269 | 147,851 | 123,467 | 95,525 | 82,856 | 544,908 | 1,445,876 | |||||||||||||||||||||
Long -Term Service Agreements(1) | 15,979 | 13,867 | 24,267 | 22,037 | 12,148 | 123,783 | 212,081 | |||||||||||||||||||||
Capital Purchase Agreements | 13,121 | — | — | — | — | — | 13,121 | |||||||||||||||||||||
Southern Operations Center Lease | 875 | 3,000 | 3,075 | 3,180 | 3,260 | 65,320 | 78,710 | |||||||||||||||||||||
Operating Leases | 17,160 | 17,443 | 15,184 | 12,748 | 4,219 | 101,046 | 167,800 | |||||||||||||||||||||
Total Contractual Cash Obligations | $ | 1,227,636 | $ | 1,126,582 | $ | 827,101 | $ | 699,944 | $ | 1,013,458 | $ | 9,763,349 | $ | 14,658,070 | ||||||||||||||
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Rating Agency | ||||||||||
DBRS | Fitch | Moody’s | S&P | |||||||
SPR | Sr. Unsecured Debt | BB (low) | BB- | B1 | B | |||||
NPC | Sr.Secured Debt | BBB (low)* | BBB-* | Bal | BB+ | |||||
NPC | Sr.Unsecured Debt | Not rated | BB | Not rated | B | |||||
SPPC | Sr.Secured Debt | BBB (low)* | BBB-* | Bal | BB+ |
* | Ratings are investment grade |
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1. | Financing Authority from the PUCN. In February 2006 NPC received PUCN authorization to enter into financings of $1.78 billion, which amount included $600 million for the revolving credit facility (described above). NPC has issued approximately $100 million of the new debt authorized under the PUCN Order. NPC’s only remaining authority under this PUCN Order allows NPC to refinance its existing debt and to use its $600 million revolving credit facility. | ||
2. | Limits on Bondable Property. To the extent that NPC has the ability to issue debt under the most restrictive covenants in its financing agreements and has financing authority to do so from the PUCN, NPC’s ability to issue secured debt is still limited by the amount of bondable property or retired bonds that can be used to issue debt under its General and Refunding Mortgage Indenture. As of December 31, 2006, NPC had the capacity to issue $672 million of General and Refunding Mortgage Securities. | ||
3. | Financial Covenants in its and SPR’s financing agreements. The terms of certain SPR debt further prohibit NPC and SPPC from incurring additional indebtedness unless certain conditions have been met. In addition to the SPR debt, the terms of certain NPC debt and the revolving credit facility restrict NPC from incurring any additional indebtedness unless certain covenants are satisfied. See Note 8, Debt Covenant and Other Restrictions of the Notes to Financial Statements in this report. |
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1. | Financing Authority from the PUCN. In February 2006, SPPC received PUCN authorization to enter into financings of $1.36 billion which amount includes $350 million for the revolving credit facility (described above). SPPC has issued $21 million of the new debt authorized in the PUCN Order. SPPC’s remaining authority under this PUCN Order allows SPPC to use its $350 million revolving credit facility, to issue $349 million in new debt, and to refinance existing debt as specified in the order. | ||
2. | Limits on Bondable Property. To the extent that SPPC has the ability to issue debt under the most restrictive covenants in its financing agreements and has financing authority to do so from the PUCN, SPPC’s ability to issue secured debt is still limited by the amount of bondable property or retired bonds that can be used to issue debt under the General and Refunding Mortgage Indenture. As of December 31, 2006, SPPC has the capacity to issue $381 million of General and Refunding Mortgage Securities. | ||
3. | Financial Covenants in its and SPR’s financing agreements. The terms of certain SPR debt further prohibit SPPC and NPC from incurring additional indebtedness unless certain conditions have been met. In addition to the SPR debt, the terms of certain SPPC debt and the revolving credit facility restrict SPPC from incurring any additional indebtedness unless certain covenants are satisfied. See Note 8, Debt Covenant and Other Restrictions of the Notes to Financial Statements in this report. |
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(1) | the PUCN-approved long-term IRP filed every three years, which has a twenty-year planning horizon; | ||
(2) | the Energy Supply Plan (“ESP”), which is an intermediate term resource procurement and risk management plan that establishes the supply portfolio strategies within which intermediate term resource requirements will be met, has a one to three year planning horizon; and | ||
(3) | tactical execution activities with a one-month to twelve-month focus. |
• | Maintaining an energy supply plan that balances the goals of minimizing costs, risks and price volatility (retail price stability), while maximizing reliability and predictability of supply. | ||
• | Investigating feasible commercial options to execute the ESP. | ||
• | Applying quantitative techniques and diligence commensurate with risk to evaluate and execute each transaction. | ||
• | Monitoring the portfolio against evolving market conditions and managing the resource optimization options. | ||
• | Ensuring transparent and well-documented decisions and execution processes. |
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• | Optimize the tradeoff between overall fuel and purchase power cost and market price and supply risk. | ||
• | Pursue in-region capacity to enhance long-term regional reliability. | ||
• | Represent the set of transactions/products available in the market. | ||
• | Reduce credit risk—in a market with some counter-parties in weak financial conditions. | ||
• | Procure to match a difficult load profile, to the extent possible. | ||
• | Hedge the gas price risk exposure in the fuel portfolio through the purchase of a set of risk management options. | ||
• | Manage energy price risk through ongoing intermediate and short-term optimization activities (e.g., optimizing the dispatch of NPC generation and/or buying directly from the market). |
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Year Ended December 31, | ||||||||||||||||||||
Change from | Change from | |||||||||||||||||||
2006 | Prior Year % | 2005 | Prior Year % | 2004 | ||||||||||||||||
Operating Revenues: | ||||||||||||||||||||
Electric | $ | 2,124,081 | 12.8 | % | $ | 1,883,267 | 5.6 | % | $ | 1,784,092 | ||||||||||
Energy Costs: | ||||||||||||||||||||
Purchased power | 764,850 | -20.6 | % | 963,888 | 26.1 | % | 764,347 | |||||||||||||
Fuel for power generation | 552,959 | 99.6 | % | 277,083 | 17.7 | % | 235,404 | |||||||||||||
Deferral of energy costs disallowed | — | — | -100.0 | % | 1,586 | |||||||||||||||
Deferral of energy costs-net | 92,322 | -302.2 | % | (45,668 | ) | -133.6 | % | 135,973 | ||||||||||||
$ | 1,410,131 | 18.0 | % | $ | 1,195,303 | 5.1 | % | $ | 1,137,310 | |||||||||||
Gross Margin before reinstatement of Deferred Energy | $ | 713,950 | 3.8 | % | $ | 687,964 | 6.4 | % | $ | 646,782 | ||||||||||
Reinstatement of Deferred Energy | $ | 178,825 | N/A | $ | — | N/A | $ | — | ||||||||||||
Gross Margin after reinstatement of Deferred Energy | $ | 892,775 | 29.8 | % | $ | 687,964 | 6.4 | % | $ | 646,782 | ||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||
Change | ||||||||||||||||||||
Change from | from Prior | |||||||||||||||||||
Amount | Prior year | Amount | year | Amount | ||||||||||||||||
Electric Operating Revenues: | ||||||||||||||||||||
Residential | $ | 975,568 | 18.5 | % | $ | 823,095 | 7.9 | % | $ | 762,907 | ||||||||||
Commercial | 442,477 | 12.0 | % | 395,016 | 6.1 | % | 372,271 | |||||||||||||
Industrial | 631,762 | 12.8 | % | 560,059 | 5.7 | % | 529,916 | |||||||||||||
Retail Revenues | 2,049,807 | 15.3 | % | 1,778,170 | 6.8 | % | 1,665,094 | |||||||||||||
Other1 | 74,274 | -29.3 | % | 105,097 | -11.7 | % | 118,998 | |||||||||||||
Total Revenues | $ | 2,124,081 | 12.8 | % | $ | 1,883,267 | 5.6 | % | $ | 1,784,092 | ||||||||||
Retail sales in thousands of megawatt-hours (MWh) | 20,820 | 7.0 | % | 19,455 | 4.6 | % | 18,607 | |||||||||||||
Average retail revenue per MWh | $ | 98.45 | 7.7 | % | $ | 91.40 | 2.1 | % | $ | 89.49 |
1 | Primarily wholesale, as discussed below |
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2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior Year | Amount | Prior Year | Amount | ||||||||||||||||
Purchased Power | $ | 764,850 | -20.6 | % | $ | 963,888 | 26.1 | % | $ | 764,347 | ||||||||||
Purchased power in thousands of MWh | 10,248 | -20.5 | % | 12,894 | 4.7 | % | 12,319 | |||||||||||||
Average cost per MWh of Purchased power | $ | 74.63 | -0.2 | % | $ | 74.75 | 20.5 | % | $ | 62.05 |
2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior year | Amount | Prior year | Amount | ||||||||||||||||
Fuel for Power Generation | $ | 552,959 | 99.6 | % | $ | 277,083 | 17.7 | % | $ | 235,404 | ||||||||||
Thousands of MWhs generated | 12,160 | 50.2 | % | 8,094 | -4.4 | % | 8,470 | |||||||||||||
Average fuel cost per MWh of Generated Power | $ | 45.47 | 32.8 | % | $ | 34.23 | 23.2 | % | $ | 27.79 |
• | With the addition of Silverhawk and Lenzie it was more economical for NPC to rely on its own generation rather than the purchase of power. As a result, the increase in volume of MWh’s generated increased significantly compared to the prior year. |
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• | The shutdown of Mohave as of the beginning of the year increased the cost per MWh of generated power. Although Silverhawk and Lenzie are highly efficient generation stations, the cost of coal is substantially lower than the cost of natural gas. Mohave generation during 2005 represented approximately 17% of total generation. | ||
• | Hedging instruments purchased when gas prices were escalating as a result of the 2005 hurricanes in the southern United States increased fuel for power generation costs. The settlement of these instruments during 2006 negatively impacted the average cost per MWh as natural gas prices were decreasing during this period. |
2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior year | Amount | Prior year | Amount | ||||||||||||||||
Reinstatement of deferred energy | $ | (178,825 | ) | $ | — | $ | — | |||||||||||||
Deferred energy costs disallowed | — | — | 1,586 | |||||||||||||||||
Deferral of energy costs-net | 92,322 | N/A | (45,668 | ) | N/A | 135,973 | ||||||||||||||
$ | (86,503 | ) | $ | (45,668 | ) | $ | 137,559 | |||||||||||||
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2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior year | Amount | Prior year | Amount | ||||||||||||||||
Allowance for other funds used during construction | $ | 11,755 | -37.1 | % | $ | 18,683 | 341.7 | % | $ | 4,230 | ||||||||||
Allowance for borrowed funds used during construction | 11,614 | -49.9 | % | 23,187 | 304.1 | % | 5,738 | |||||||||||||
$ | 23,369 | -44.2 | % | $ | 41,870 | 320.0 | % | $ | 9,968 | |||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior year | Amount | Prior year | Amount | ||||||||||||||||
Other operating expense | $ | 218,120 | 3.4 | % | $ | 211,039 | 14.9 | % | $ | 183,736 | ||||||||||
Maintenance expense | $ | 61,899 | 18.9 | % | $ | 52,040 | -8.7 | % | $ | 57,030 | ||||||||||
Depreciation and amortization | $ | 141,585 | 14.1 | % | $ | 124,098 | 4.4 | % | $ | 118,841 | ||||||||||
Interest charges on long-term debt | $ | 171,188 | 7.6 | % | $ | 159,106 | 4.2 | % | $ | 152,764 | ||||||||||
Interest for energy suppliers | $ | — | N/A | $ | (14,825 | ) | -38.7 | % | $ | (24,171 | ) | |||||||||
Interest charges-other | $ | 17,038 | 25.6 | % | $ | 13,563 | -6.7 | % | $ | 14,533 | ||||||||||
Carrying charge for Lenzie | $ | (33,440 | ) | N/A | $ | — | N/A | $ | — | |||||||||||
Interest accrued on deferred energy | $ | (21,902 | ) | 7.6 | % | $ | (20,350 | ) | 0.7 | % | $ | (20,199 | ) | |||||||
Other income | $ | (16,992 | ) | -33.7 | % | $ | (25,626 | ) | 12.2 | % | $ | (22,844 | ) | |||||||
Disallowed merger costs | N/A | $ | — | N/A | $ | 3,961 | ||||||||||||||
Other expense | $ | 8,480 | -0.5 | % | $ | 8,525 | 27.9 | % | $ | 6,665 |
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Available Liquidity as of December 31, 2006 (in millions) | ||||
NPC | ||||
Cash and Cash Equivalents | $ | 36.6 | ||
Balance available on Revolving Credit Facility | 545.0 | |||
Total Available Liquidity1 | $ | 581.6 | ||
1 | As of February 23, 2007, NPC had approximately $476.3 million available under its revolving credit facility. |
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2006 | 2005 | |||||||||||||||
Current Maturities of Long-Term Debt | $ | 5,948 | 0.1 | % | $ | 6,509 | 0.2 | % | ||||||||
Long-Term Debt | 2,380,139 | 52.2 | % | 2,214,063 | 55.6 | % | ||||||||||
Common Equity | 2,172,198 | 47.7 | % | 1,762,089 | 44.2 | % | ||||||||||
Total | $ | 4,558,285 | 100 | % | $ | 3,982,661 | 100 | % | ||||||||
Payment Due by Period | ||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | ||||||||||||||||||||||
Long-Term Debt Maturities | $ | 5,948 | $ | 7,068 | $ | 22,138 | $ | 7,843 | $ | 369,734 | $ | 1,986,113 | $ | 2,398,844 | ||||||||||||||
Long-Term Debt Interest Payments | 153,962 | 154,367 | 154,228 | 153,812 | 136,782 | 1,261,214 | 2,014,365 | |||||||||||||||||||||
Purchased Power | 310,988 | 257,739 | 239,361 | 244,305 | 242,671 | 2,868,242 | 4,163,306 | |||||||||||||||||||||
Coal and Natural Gas | 250,201 | 62,833 | 50,075 | 47,107 | 34,438 | 183,550 | 628,204 | |||||||||||||||||||||
Long -Term Service Agreements(1) | 15,979 | 13,867 | 24,267 | 22,037 | 12,148 | 123,783 | 212,081 | |||||||||||||||||||||
Southern Operations Center Lease | 875 | 3,000 | 3,075 | 3,180 | 3,260 | 65,320 | 78,710 | |||||||||||||||||||||
Operating Leases | 6,525 | 7,146 | 6,253 | 5,161 | 3,441 | 64,459 | 92,985 | |||||||||||||||||||||
Total Contractual Cash Obligations | $ | 744,478 | $ | 506,020 | $ | 499,397 | $ | 483,445 | $ | 802,474 | $ | 6,552,681 | $ | 9,588,495 | ||||||||||||||
(1) | Does not include equipment and services contracts related to the new peaking units at Clark Generating Station, entered into in February 2007. |
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• | $39.5 million principal amount of 6.60% Clark County’s Pollution Control Refunding Revenue Bonds, Series 1992B, | ||
• | $20 million principal amount of 6.375% Coconino County’s Pollution Control Revenue Bonds, Series 1996, | ||
• | $20 million principal amount of 5.80% Coconino County’s Pollution Control Revenue Bonds, Series 1997B, and | ||
• | $13 million principal amount of 5.35% Coconino County’s Pollution Control Refunding Revenue Bonds, Series 1995E. |
• | fund the early redemption of $78 million aggregate principal amounts of NPC’s 7.2% Industrial Development Revenue Bonds, Series 1992 C, due 2022, | ||
• | fund the early redemption, in June 2006, of approximately $72.2 million aggregate principal amount of NPC’s 7.75% Junior Subordinated Debentures due 2038 (when the debentures were repaid upon redemption, the proceeds from the repayment were used to simultaneously redeem an equal amount of the 7.75% Cumulative Quarterly Preferred Securities of NVP Capital III, a wholly-owned subsidiary of NPC), | ||
• | repay amounts outstanding under NPC’s revolving credit facility. |
• | fund the early redemption of $35 million aggregate principal amount of NPC’s 8.50% Series Z First Mortgage Bonds due 2023 plus approximately $1 million of associated redemption premiums, | ||
• | fund the early redemption of $105 million aggregate principal amount of 6.70% Industrial Development Revenue Bonds, due 2022, and | ||
• | fund the early redemption of approximately $122.5 million aggregate principal amount of NPC’s 8.20% Junior Subordinated Debentures due 2037 (when the debentures were repaid upon redemption, the proceeds from the repayment were used to simultaneously redeem an equal amount of the 8.20% Cumulative Quarterly Preferred Securities of NVP Capital I, a wholly-owned subsidiary of NPC). |
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1. | Financing Authority from the PUCN. In February 2006, NPC received PUCN authorization to enter into financings of $1.78 billion, which amount included $600 million for the revolving credit facility (described above). NPC has issued approximately $100 million of the new debt authorized under the PUCN Order. NPC’s only remaining authority under this PUCN Order allows NPC to refinance its existing debt and to use its $600 million revolving credit facility. | ||
2. | Limits on Bondable Property. To the extent that NPC has the ability to issue debt under the most restrictive covenants in its financing agreements and has financing authority to do so from the PUCN, NPC’s ability to issue secured debt is still limited by the amount of bondable property or retired bonds that can be used to issue debt under its General and Refunding Mortgage Indenture. As of December 31, 2006, NPC had the capacity to issue $672 million of General and Refunding Mortgage Securities. | ||
3. | Financial Covenants in its and SPR’s financing agreements. The terms of certain SPR debt further prohibit NPC and SPPC from incurring additional indebtedness unless certain conditions have been met. See SPR’s Limitations on Indebtedness for details of these restrictions. In addition to the SPR debt, the terms of NPC’s Series G Notes, which mature in 2013, NPC’s Series I Notes, which mature in 2012, NPC’s Series L Notes, which mature in 2015, and NPC’s Second Amended and Restated Revolving Credit Facility restrict NPC from incurring any additional indebtedness unless certain covenants are satisfied (See Note 8, Debt Covenant and Other Restrictions). If NPC’s Series G Notes, Series I Notes, or the Series L Notes are upgraded to investment grade by both Moody’s and S&P, these restrictions will be suspended and will no longer be in effect so long as the applicable series of securities remains investment grade. |
1. | 70% of net utility property additions | ||
2. | the principal amount of retired General and Refunding Mortgage Securities, and/or | ||
3. | the principal amount of first mortgage bonds retired after October 2001. |
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Rating Agency | ||||||||||
DBRS | Fitch | Moody’s | S&P | |||||||
NPC | Sr.Secured Debt | BBB (low)* | BBB-* | Bal | BB+ | |||||
NPC | Sr.Unsecured Debt | Not rated | BB | Not rated | B |
* | Ratings are investment grade |
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Year Ended December 31, | ||||||||||||||||||||
Change from | Change from | |||||||||||||||||||
2006 | Prior Year | 2005 | Prior Year | 2004 | ||||||||||||||||
Operating Revenues: | ||||||||||||||||||||
Electric | $ | 1,020,162 | 5.5 | % | $ | 967,427 | 9.7 | % | $ | 881,908 | ||||||||||
Gas | 210,068 | 17.8 | % | 178,270 | 15.9 | % | 153,752 | |||||||||||||
$ | 1,230,230 | 7.4 | % | $ | 1,145,697 | 10.6 | % | $ | 1,035,660 | |||||||||||
Energy Costs: | ||||||||||||||||||||
Purchased power | $ | 344,590 | -2.1 | % | $ | 352,098 | 15.5 | % | $ | 304,955 | ||||||||||
Fuel for power generation | 247,626 | 6.0 | % | 233,653 | 4.3 | % | 224,074 | |||||||||||||
Gas purchased for resale | 160,739 | 14.1 | % | 140,850 | 15.9 | % | 121,526 | |||||||||||||
Deferral of energy costs-electric-net | 47,043 | 480.1 | % | 8,110 | 14.9 | % | 7,060 | |||||||||||||
Deferral of energy costs-gas-net | 6,947 | -1027.5 | % | (749 | ) | -81.9 | % | (4,136 | ) | |||||||||||
$ | 806,945 | 9.9 | % | $ | 733,962 | 12.3 | % | $ | 653,479 | |||||||||||
Energy Costs by Segment: | ||||||||||||||||||||
Electric | $ | 639,259 | 7.6 | % | $ | 593,861 | 10.8 | % | $ | 536,089 | ||||||||||
Gas | 167,686 | 19.7 | % | 140,101 | 19.3 | % | 117,390 | |||||||||||||
$ | 806,945 | 9.9 | % | $ | 733,962 | 12.3 | % | $ | 653,479 | |||||||||||
Gross Margin by Segment: | ||||||||||||||||||||
Electric | $ | 380,903 | 2.0 | % | $ | 373,566 | 8.0 | % | $ | 345,819 | ||||||||||
Gas | 42,382 | 11.0 | % | 38,169 | 5.0 | % | 36,362 | |||||||||||||
$ | 423,285 | 2.8 | % | $ | 411,735 | 7.7 | % | $ | 382,181 | |||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior year | Amount | Prior year | Amount | ||||||||||||||||
Electric Operating Revenues: | ||||||||||||||||||||
Residential | $ | 319,140 | 12.9 | % | $ | 282,655 | 13.4 | % | $ | 249,287 | ||||||||||
Commercial | 370,617 | 13.9 | % | 325,456 | 10.3 | % | 294,956 | |||||||||||||
Industrial | 299,163 | -10.3 | % | 333,621 | 12.8 | % | 295,882 | |||||||||||||
Retail revenues | 988,920 | 5.0 | % | 941,732 | 12.1 | % | 840,125 | |||||||||||||
Other | 31,242 | 21.6 | % | 25,695 | -38.5 | % | 41,783 | |||||||||||||
Total Revenues | $ | 1,020,162 | 5.5 | % | $ | 967,427 | 9.7 | % | $ | 881,908 | ||||||||||
Retail sales in thousands of megawatt-hours (MWh) | 8,711 | -5.7 | % | 9,234 | 1.0 | % | 9,143 | |||||||||||||
Average retail revenue per MWh | $ | 113.53 | 11.3 | % | $ | 101.99 | 11.0 | % | $ | 91.89 |
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2006 | 2005 | 2004 | ||||||||||||||||||
Change | Change | |||||||||||||||||||
from Prior | from Prior | |||||||||||||||||||
Amount | year | Amount | year | Amount | ||||||||||||||||
Gas Operating Revenues: | ||||||||||||||||||||
Residential | $ | 120,734 | 25.4 | % | $ | 96,292 | 18.5 | % | $ | 81,262 | ||||||||||
Commercial | 54,316 | 22.6 | % | 44,286 | 13.5 | % | 39,019 | |||||||||||||
Industrial | 20,509 | 21.0 | % | 16,953 | 37.4 | % | 12,336 | |||||||||||||
Retail revenues | 195,559 | 24.1 | % | 157,531 | 18.8 | % | 132,617 | |||||||||||||
Wholesale | 11,650 | -34.5 | % | 17,786 | -1.9 | % | 18,122 | |||||||||||||
Miscellaneous | 2,859 | -3.2 | % | 2,953 | -2.0 | % | 3,013 | |||||||||||||
Total Revenues | $ | 210,068 | 17.8 | % | $ | 178,270 | 15.9 | % | $ | 153,752 | ||||||||||
Retail sales in thousands of decatherms | 15,058 | 1.6 | % | 14,819 | 6.6 | % | 13,896 | |||||||||||||
Average retail revenues per decatherm | $ | 12.99 | 22.2 | % | $ | 10.63 | 11.4 | % | $ | 9.54 |
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2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior Year | Amount | Prior Year | Amount | ||||||||||||||||
Purchased Power | $ | 344,590 | -2.1 | % | $ | 352,098 | 15.5 | % | $ | 304,955 | ||||||||||
Purchased power in thousands of MWh | 5,334 | -2.0 | % | 5,441 | -4.9 | % | 5,719 | |||||||||||||
Average cost per MWh of Purchased power | $ | 64.60 | -0.2 | % | $ | 64.71 | 21.4 | % | $ | 53.32 |
2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior year | Amount | Prior year | Amount | ||||||||||||||||
Fuel for Power Generation | $ | 247,626 | 6.0 | % | $ | 233,653 | 4.3 | % | $ | 224,074 | ||||||||||
Thousands of MWh generated | 4,059 | -7.3 | % | 4,379 | -4.9 | % | 4,605 | |||||||||||||
Average fuel cost per MWh of Generated Power | $ | 61.01 | 14.3 | % | $ | 53.36 | 9.7 | % | $ | 48.66 |
2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior year | Amount | Prior year | Amount | ||||||||||||||||
Gas Purchased for Resale | $ | 160,739 | 14.1 | % | $ | 140,850 | 15.9 | % | $ | 121,526 | ||||||||||
Gas Purchased for Resale (in thousands of decatherms) | 17,491 | 5.4 | % | 16,592 | -6.1 | % | 17,673 | |||||||||||||
Average Cost per decatherm | $ | 9.19 | 8.2 | % | $ | 8.49 | 23.4 | % | $ | 6.88 |
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2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior year | Amount | Prior year | Amount | ||||||||||||||||
Deferred energy costs — electric — net | $ | 47,043 | N/A | $ | 8,110 | 14.9 | % | $ | 7,060 | |||||||||||
Deferred energy costs — gas — net | 6,947 | N/A | (749 | ) | -81.9 | % | (4,136 | ) | ||||||||||||
Total | $ | 53,990 | $ | 7,361 | $ | 2,924 | ||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior year | Amount | Prior year | Amount | ||||||||||||||||
Allowance for other funds used during construction | $ | 6,471 | 294.8 | % | $ | 1,639 | -4.6 | % | $ | 1,718 | ||||||||||
Allowance for borrowed funds used during construction | 5,505 | 266.0 | % | 1,504 | -47.2 | % | 2,849 | |||||||||||||
$ | 11,976 | 281.0 | % | $ | 3,143 | -31.2 | % | $ | 4,567 | |||||||||||
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2006 | 2005 | 2004 | ||||||||||||||||||
Change from | Change from | |||||||||||||||||||
Amount | Prior year | Amount | Prior year | Amount | ||||||||||||||||
Other operating expense | $ | 141,350 | 7.2 | % | $ | 131,901 | 3.0 | % | $ | 128,091 | ||||||||||
Maintenance expense | $ | 31,273 | 17.2 | % | $ | 26,690 | 22.0 | % | $ | 21,877 | ||||||||||
Depreciation and amortization | $ | 87,279 | -3.6 | % | $ | 90,569 | 4.3 | % | $ | 86,806 | ||||||||||
Interest charges on long-term debt | $ | 71,869 | 3.8 | % | $ | 69,240 | -2.9 | % | $ | 71,312 | ||||||||||
Interest for energy suppliers | $ | — | N/A | $ | (2,396 | ) | -78.2 | % | $ | (10,999 | ) | |||||||||
Interest charges-other | $ | 5,142 | 38.0 | % | $ | 3,727 | -30.6 | % | $ | 5,367 | ||||||||||
Interest accrued on deferred energy | $ | (5,996 | ) | -15.5 | % | $ | (7,092 | ) | 38.2 | % | $ | (5,133 | ) | |||||||
Other income | $ | (9,412 | ) | 58.5 | % | $ | (5,940 | ) | 74.4 | % | $ | (3,406 | ) | |||||||
Disallowed merger costs | $ | — | N/A | $ | — | N/A | $ | 1,929 | ||||||||||||
Plant costs disallowed | $ | — | N/A | $ | — | N/A | $ | 47,092 | ||||||||||||
Other expense | $ | 8,422 | 12.4 | % | $ | 7,493 | 30.9 | % | $ | 5,726 |
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Available Liquidity as of December 31, 2006 (in millions) | ||||
SPPC | ||||
Cash and Cash Equivalents | $ | 53.3 | ||
Balance available on Revolving Credit Facility | 340.6 | |||
Total Available Liquidity1 | $ | 393.9 | ||
1 | As of February 23, 2007, SPPC had approximately $331.1 million available under its revolving credit facility. Additionally, if necessary, SPPC has the ability to issue additional debt, as discussed under Limitations on Indebtedness. |
2006 | 2005 | |||||||||||||||
Current Maturities of Long-Term Debt | $ | 2,400 | 0.1 | % | $ | 52,400 | 3.00 | % | ||||||||
Long-Term Debt | 1,070,858 | 54.7 | % | 941,804 | 53.1 | % | ||||||||||
Preferred Stock | — | 50,000 | 2.8 | % | ||||||||||||
Common Equity | 884,737 | 45.2 | % | 727,777 | 41.1 | % | ||||||||||
Total | $ | 1,957,995 | 100.0 | % | $ | 1,771,981 | 100 | % | ||||||||
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Payment Due by Period | ||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | ||||||||||||||||||||||
Long-Term Debt Maturities | $ | 2,400 | $ | 322,400 | $ | 80,600 | $ | — | $ | — | $ | 668,250 | $ | 1,073,650 | ||||||||||||||
Long-Term Debt Interest Payments | 61,979 | 49,235 | 38,386 | 38,377 | 38,377 | 402,091 | 628,445 | |||||||||||||||||||||
Purchased Power | 163,165 | 125,161 | 98,028 | 93,836 | 95,231 | 1,308,566 | 1,883,987 | |||||||||||||||||||||
Coal and Natural Gas | 201,068 | 85,018 | 73,392 | 48,418 | 48,418 | 361,358 | 817,672 | |||||||||||||||||||||
Capital Purchase Agreements | 13,121 | — | — | — | — | — | 13,121 | |||||||||||||||||||||
Operating Leases | 10,635 | 10,297 | 8,931 | 7,587 | 778 | 36,587 | 74,815 | |||||||||||||||||||||
Total Contractual Cash Obligations | $ | 452,368 | $ | 592,111 | $ | 299,337 | $ | 188,218 | $ | 182,804 | $ | 2,776,852 | $ | 4,491,690 | ||||||||||||||
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• | $17.5 million principal amount of 6.65% Washoe County’s Gas Facilities Refunding Revenue Bonds, Series 1987 | ||
• | $20 million principal amount of 6.55% Washoe County’s Gas Facilities Refunding Revenue Bonds, Series 1990 | ||
• | $21.2 million principal amount of 6.70% Washoe County’s Gas Facilities Refunding Revenue Bonds, Series 1992 | ||
• | $75 million principal amount of 6.65% Washoe County’s Water Facilities Refunding Revenue Bonds, Series 1987 | ||
• | $45 million principal amount of 6.30% Washoe County’s Gas and Water Facilities Refunding Revenue Bonds, Series 1987 | ||
• | $30 million principal amount of 5.90% Washoe County’s Gas and Water Facilities Refunding Revenue Bonds, Series 1993B | ||
• | $9.8 million principal amount of 5.90% Washoe County’s Water Facilities Refunding Revenue Bonds, Series 1993A | ||
• | $39.5 million principal amount of 6.55% Humboldt County’s Pollution Control Refunding Revenue Bonds, Series 1987 | ||
• | $10.25 million principal amount of 6.30% Humboldt County’s Pollution Control Refunding Revenue Bonds, Series 1992A |
• | fund the early redemption of $110 million aggregate principal amount of SPPC’s Collateralized Medium Term 6.95% to 8.61% Series A Notes due 2022; | ||
• | fund the early redemption of $58 million aggregate principal amount of SPPC’s Collateralized Medium Term 7.10% to 7.14% Series B Notes due 2023; | ||
• | pay for maturing debt of $30 million aggregate principal amount of SPPC’s Collateralized Medium Term 6.81% to 6.83% Series C Notes due 2006; and | ||
• | pay for $51 million in connection with the redemption of $50 million of SPPC’s Series A Preferred Stock (two million shares of stock were redeemed at a redemption price per share of $25.683, plus accrued dividends to the redemption date of $.4875 per share). | ||
• | pay for maturing debt of $20 million aggregate principal amount of SPPC’s Collateralized Medium Term 6.62% to 6.65% Series C Notes due 2006. |
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1. | Financing Authority from the PUCN. In February 2006, SPPC received PUCN authorization to enter into financings of $1.36 billion which amount includes $350 million for the revolving credit facility (described above). SPPC has issued $21 million of the new debt authorized in the PUCN Order. SPPC’s remaining authority under this PUCN Order allows SPPC to use its $350 million revolving credit facility, to issue $349 million in new debt, and to refinance existing debt as specified in the order. | ||
2. | Limits on Bondable Property. To the extent that SPPC has the ability to issue debt under the most restrictive covenants in its financing agreements and has financing authority to do so from the PUCN, SPPC’s ability to issue secured debt is still limited by the amount of bondable property or retired bonds that can be used to issue debt under the General and Refunding Mortgage Indenture. As of December 31, 2006, SPPC has the capacity to issue $381 million of General and Refunding Mortgage Securities. | ||
3. | Financial Covenants in its and SPR’s financing agreements. The terms of certain SPR debt further prohibit SPPC and NPC from incurring additional indebtedness unless certain conditions have been met. See SPR’s Limitations on Indebtedness for details of these restrictions. In addition to the SPR debt, the terms of SPPC’s Series H Notes and SPPC’s Amended and Restated Revolving Credit Agreement restrict SPPC from issuing additional indebtedness unless certain covenants are satisfied. See Note 8, Debt Covenant and Other Restrictions. |
1. | 70% of net utility property additions; | ||
2. | the principal amount of retired General and Refunding Mortgage Securities; and/or | ||
3. | the principal amount of first mortgage bonds retired after October 2001. |
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Rating Agency | ||||||||||
DBRS | Fitch | Moody’s | S&P | |||||||
SPPC | Sr.Secured Debt | BBB (low)* | BBB-* | Ba1 | BB+ |
* | Ratings are investment grade |
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• | NPC 2007 Deferred Energy Rate Case and BTER Update |
Application to create a new DEAA rate and to update the going forward BTER. In this application, NPC requests to decrease rates by $33.2 million, a decrease of 1.6% while recovering $75 million of deferred fuel and purchased power costs. NPC has requested the amortization to begin June 1, 2007 and to continue for a fourteen month period. |
• | NPC 2007 Western Energy Crisis Rate Case |
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• | NPC 2006 General Rate Case |
• | SPPC 2006 Nevada Electric Deferred Energy Rate Case and BTER Update |
• | SPPC 2006 Nevada Western Energy Crisis Rate Case |
• | NPC 2001 Deferred Energy Case |
• | NPC 2006 Deferred Energy Rate Case and BTER Update |
• | SPPC 2006 Nevada Natural Gas and Propane Deferred Energy Rate Case and BTER Update |
• | SPPC 2005 Nevada Electric Deferred Energy Rate Case and BTER Update |
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Application to create a new electric DEAA rate and to update the electric BTER. In April 2006, the PUCN approved a new Electric BTER, which will increase purchased fuel and power revenues by an estimated $31 million. In June 2006, the PUCN approved a negotiated settlement, which granted SPPC full recovery of $46.7 million in deferred costs during a two year period beginning July 2006. |
• | SPPC 2005 Nevada Electric General Rate Case |
Application to reset electric general rates. In April, 2006, the PUCN authorized a 10.6% ROE and 8.96% ROR and ordered SPPC to reduce general revenues for electric services by approximately $14 million. |
• | SPPC 2005 Nevada Gas General Rate Case |
Application to reset gas general rates. In April 2006, the PUCN authorized a 10.6% ROE and 7.98% ROR and ordered SPPC to increase general revenues for gas services by approximately $4.5 million. |
• | SPPC 2006 California Energy Cost Adjustment Clause Rate Case |
Application to reset energy rates. The total request sought to collect an additional $11.2 million annually for deferred and going forward costs related to fuel and power purchases. The two requested rate increases total 16.5%. In October 2006, the CPUC approved the application as filed, with an effective date of November 1, 2006. |
• | SPPC 2005 California General Rate Case |
Application to reset General Rates. In August 2006, the CPUC approved a settlement agreement, which beginning on September 2006, allowed SPPC to collect an estimated $4.1 million of additional general revenues. |
• | Increase annual general revenues by $172.4 million which is approximately an 8% increase | ||
• | Set the Return on Equity and Rate of Return at 11.40% and 9.41%, respectively | ||
• | Recover 100% of the amortization of the 1999 NPC/SPPC merger costs rather than the 80% recovery that is currently in general rates | ||
• | Implement the PUCN’s previous orders regarding incentive ratemaking for the Chuck Lenzie Generating Station | ||
• | Implement new depreciation rates |
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• | Requested approval to construct the following supply side resources: |
1. | Two 750 MW critical coal fired generation units at the proposed Ely Energy Center in White Pine County, Nevada estimated to be in service by 2011 and 2013 respectively. Also, part of this project is a 250-mile 500 kV transmission line to integrate the new generation into both NPC’s and SPPC’s systems and to allow delivery of geothermal resources from Northern Nevada to NPC and solar powered generation from Southern Nevada to SPPC. |
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2. | Construction of 600 MW of gas fired combustion turbine peaking generation, 400 MW in service by 2008 and 200 MW in service by 2009. |
• | Requested the PUCN to designate the Ely Energy Center and the 500kV transmission intertie as critical facilities under Nevada regulations and requested incentive ratemaking treatment including “CWIP in rate base” during construction and, upon completion, a 2% enhanced ROE and accumulation of depreciation expense in a regulatory asset account from the time the plants are placed in service until they are included in rates. | ||
• | Outlined initiatives, including NPC ownership positions in renewable energy projects, which are expected to enable NPC to meet Nevada’s Portfolio Standards. | ||
• | Requested approval of four new demand side programs and to increase spending on eight existing demand side programs. | ||
• | Outlined NPC’s ten-year $4.7 billion budget for all of the proposed initiatives. |
• | Incentive ratemaking treatment for the initial $300 million project development costs. | ||
• | NPC’s request for a specific enhanced ROE in this docket; however, NPC stated it would resubmit a request for an enhanced ROE in a future filing. |
• | Supply Side Resources |
1. | PUCN granted the Utilities’ request to proceed with the development of Phase I of the Ely Energy Center and accompanying transmission line. The PUCN also approved the Utilities’ request of $300 million for development activities associated with the Ely Energy Center with a limitation of $155 million placed on expenditures until the Utilities have obtained the final air permit. The PUCN approved the request to initially allocate the costs between NPC and SPPC using an 80/20 cost allocation, respectively. Furthermore, the PUCN granted NPC’s request for critical facility designation, thereby allowing it to qualify for incentives to be determined at a later date. | ||
The PUCN also directed the Utilities, upon receipt of the air permit, to prepare and submit a subsequent filing in the form of a resource plan amendment (“Ely Energy Center Amendment”) in which they will ask for PUCN approval to proceed with the construction of the Ely Energy Center and transmission line based on detailed engineering, construction and cost estimates, and a refined project schedule. | |||
2. | The PUCN approved NPC’s request to construct 600 MW of nominally rated quick start combustion turbine units at the Clark Station at a cost of approximately $395 million, with approximately 400 MWs of peaking capacity to be installed prior to the summer of 2008 and approximately 200 MWs of additional peaking capacity to installed prior to the summer of 2009. |
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• | Electric general revenue increase: $27 million or 3.4% effective May 1, 2006 | ||
• | Gas general revenue increase: $8.3 million or 5.4%, effective May 1, 2006 | ||
• | Electric Return on Equity and Rate of Return: 11.4% and 9.27% respectively | ||
• | Gas Return on Equity and Rate of Return: 11.4% and 8.29% respectively | ||
• | Approval to continue to recover an allocated amount of the 1999 NPC/SPPC merger costs from Electric customers | ||
• | Approval to recover an allocated amount of the 1999 NPC/SPPC merger costs from Gas customers | ||
• | New depreciation rates for Gas and Electric facilities |
• | Electric general revenue decrease: approximately $14 million annually or 1.5% effective May 1, 2006. | ||
• | Gas general revenue increase: $4.5 million annually or 2.3%, effective May 1, 2006. | ||
• | Electric Return on Equity and Rate of Return: 10.6% and 8.96% respectively. | ||
• | Gas Return on Equity and Rate of Return: 10.6% and 7.98% respectively. | ||
• | Approval to continue recovery of SPPC’s allocated amount of the 1999 NPC/SPPC merger costs and goodwill from Electric customers. | ||
• | Approval to recover an allocated amount of the 1999 NPC/SPPC merger costs and goodwill from Gas customers. | ||
• | New depreciation rates for Gas and Electric facilities. | ||
• | Deferred recovery of legal expenses related to the Enron purchased power contract litigation. |
• | Requested approval to construct two 750 MW critical coal fired generation units at the proposed Ely Energy Center in White Pine County, Nevada estimated to be in service by 2011 and 2013 respectively. Also, part of this project is a 250-mile 500 kV transmission line to integrate the new generation into both NPC’s and SPPC’s systems and to allow delivery of geothermal resources from Northern Nevada to NPC and solar powered generation from Southern Nevada to SPPC. The Utilities are currently estimating that 80% of the costs will be allocated to NPC and 20% will be allocated to SPPC. | ||
• | Requested the PUCN to designate the Ely Energy Center and the 500kV transmission intertie as critical facilities under Nevada regulations and requested incentive ratemaking treatment including “CWIP in rate base” during construction and, upon completion, a 2% enhanced ROE and accumulation of depreciation expense in a regulatory asset account from the time the plants are placed in service until they are included in rates. | ||
• | Requested approval to make certain enhancements to SPPC’s existing fleet of generators. | ||
• | Provided a $3.8 billion total estimate for the Ely Energy Center and outlines SPPC’s cost for other proposed initiatives totaling approximately $15 million. |
• | Incentive ratemaking treatment for the initial $300 million project development costs. | ||
• | SPPC’s request for a specific enhanced ROE in this docket; however, SPPC stated it would resubmit a request for an enhanced ROE in a future filing. |
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• | Supply Side Resources | ||
The PUCN granted the Utilities’ request to proceed with the development of Phase I of the Ely Energy Center and accompanying transmission line. The PUCN also approved the Utilities’ request of $300 million for development activities associated with the Ely Energy Center with a limitation of $155 million placed on expenditures until the Utilities have obtained the final air permit. The PUCN approved the request to initially allocate the costs between NPC and SPPC using an 80/20 cost allocation, respectively. Furthermore, the PUCN granted SPPC’s request for critical facility designation, thereby allowing it to qualify for incentives to be determined at a later date. |
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Fair | ||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | Value | |||||||||||||||||||||||||
Long-term Debt | ||||||||||||||||||||||||||||||||
SPR | ||||||||||||||||||||||||||||||||
Fixed Rate | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 549,209 | $ | 549,209 | $ | 568,541 | ||||||||||||||||
Average Interest Rate | — | — | — | — | — | 7.75 | % | 7.75 | % | |||||||||||||||||||||||
NPC | ||||||||||||||||||||||||||||||||
Fixed Rate | $ | 15 | $ | 15 | $ | — | $ | — | $ | 364,000 | $ | 1,776,835 | $ | 2,140,865 | $ | 2,246,234 | ||||||||||||||||
Average Interest Rate | 8.17 | % | 8.17 | % | — | — | 8.14 | % | 6.58 | % | 6.85 | % | ||||||||||||||||||||
Variable Rate | $ | — | $ | — | $ | 15,000 | $ | — | $ | — | $ | 192,500 | $ | 207,500 | $ | 207,500 | ||||||||||||||||
Average Interest Rate | — | — | 3.63 | % | — | — | 3.57 | % | 3.57 | % | ||||||||||||||||||||||
SPPC | ||||||||||||||||||||||||||||||||
Fixed Rate | $ | 2,400 | $ | 322,400 | $ | 80,600 | $ | — | $ | — | $ | 400,000 | $ | 805,400 | $ | 819,744 | ||||||||||||||||
Average Interest Rate | 6.40 | % | 7.99 | % | 5.01 | % | — | — | 6.06 | % | 6.73 | % | ||||||||||||||||||||
Variable Rate | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 268,250 | $ | 268,250 | $ | 268,250 | ||||||||||||||||
Average Interest Rate | — | — | — | — | — | 3.62 | % | 3.62 | % | |||||||||||||||||||||||
Total Debt | $ | 2,415 | $ | 322,415 | $ | 95,600 | $ | — | $ | 364,000 | $ | 3,186,794 | $ | 3,971,224 | $ | 4,110,269 | ||||||||||||||||
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Expected Maturity Date | ||||||||||||||||||||||||||||||||
Fair | ||||||||||||||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | Thereafter | Total | Value | |||||||||||||||||||||||||
Long-term Debt | ||||||||||||||||||||||||||||||||
SPR | ||||||||||||||||||||||||||||||||
Fixed Rate | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 659,142 | $ | 659,142 | $ | 689,131 | ||||||||||||||||
Average Interest Rate | 7.86 | % | 7.86 | % | ||||||||||||||||||||||||||||
NPC | ||||||||||||||||||||||||||||||||
Fixed Rate | $ | 15 | $ | 17 | $ | 13 | $ | 162,500 | $ | — | $ | 1,741,048 | $ | 1,903,593 | $ | 1,979,608 | ||||||||||||||||
Average Interest Rate | 8.17 | % | 8.17 | % | 8.17 | % | 10.88 | % | 7.20 | % | 7.52 | % | ||||||||||||||||||||
Variable Rate | $ | 15,000 | $ | 150,000 | $ | 100,000 | $ | 265,000 | $ | 265,000 | ||||||||||||||||||||||
Average Interest Rate | 1.74 | % | 5.50 | % | 1.74 | % | 3.87 | % | ||||||||||||||||||||||||
SPPC | ||||||||||||||||||||||||||||||||
Fixed Rate | $ | 52,400 | $ | 2,400 | $ | 322,400 | $ | 80,420 | $ | — | $ | 537,250 | $ | 994,870 | $ | 1,013,385 | ||||||||||||||||
Average Interest Rate | 6.73 | % | 6.40 | % | 7.99 | % | 5.01 | % | 6.75 | % | 7.01 | % | ||||||||||||||||||||
Total Debt | $ | 52,415 | $ | 2,417 | $ | 322,413 | $ | 257,920 | $ | 150,000 | $ | 3,037,440 | $ | 3,822,605 | $ | 3,947,124 | ||||||||||||||||
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Page | ||||
Reports of Independent Registered Public Accounting Firm | 95 | |||
Financial Statements: | ||||
Sierra Pacific Resources: | ||||
Consolidated Balance Sheets as of December 31, 2006 and 2005 | 98 | |||
Consolidated Income Statements for the Years Ended December 31, 2006, 2005 and 2004 | 99 | |||
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2006, 2005 and 2004 | 100 | |||
Consolidated Statements of Common Shareholders’ Equity for the Years Ended December 31, 2006, 2005 and 2004 | 101 | |||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004 | 102 | |||
Consolidated Statements of Capitalization as of December 31, 2006 and 2005 | 103 | |||
Nevada Power Company: | ||||
Consolidated Balance Sheets as of December 31, 2006 and 2005 | 105 | |||
Consolidated Income Statements for the Years Ended December 31, 2006, 2005 and 2004 | 106 | |||
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2006, 2005 and 2004 | 107 | |||
Consolidated Statements of Common Shareholder’s Equity for the Years Ended December 31, 2006, 2005 and 2004 | 108 | |||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004 | 109 | |||
Consolidated Statements of Capitalization as of December 31, 2006 and 2005 | 110 | |||
Sierra Pacific Power Company: | ||||
Consolidated Balance Sheets as of December 31, 2006 and 2005 | 111 | |||
Consolidated Income Statements for the Years Ended December 31, 2006, 2005 and 2004 | 112 | |||
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2006, 2005 and 2004 | 113 | |||
Consolidated Statements of Common Shareholder’s Equity for the Years Ended December 31, 2006, 2005 and 2004 | 114 | |||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004 | 115 | |||
Consolidated Statements of Capitalization as of December 31, 2006 and 2005 | 116 | |||
Notes to Financial Statements for Sierra Pacific Resources, Nevada Power Company and Sierra Pacific Power Company | 117 |
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Reno, Nevada
Reno, Nevada
March 1, 2007
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Nevada Power Company
Las Vegas, Nevada
Reno, Nevada
March 1, 2007
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Sierra Pacific Power Company
Reno, Nevada
Reno, Nevada
March 1, 2007
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CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
December 31, | ||||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Utility Plant at Original Cost: | ||||||||
Plant in service | $ | 7,954,337 | $ | 6,801,916 | ||||
Less accumulated provision for depreciation | 2,333,357 | 2,169,316 | ||||||
5,620,980 | 4,632,600 | |||||||
Construction work-in-progress | 466,018 | 765,005 | ||||||
6,086,998 | 5,397,605 | |||||||
Investments and other property, net (Note 4) | 34,325 | 82,771 | ||||||
Current Assets: | ||||||||
Cash and cash equivalents | 115,709 | 172,735 | ||||||
Restricted cash and investments | — | 67,245 | ||||||
Accounts receivable less allowance for uncollectible accounts: 2006-$39,566; 2005-$36,229 | 415,082 | 413,234 | ||||||
Deferred energy costs — electric (Note 1) | 168,260 | 253,697 | ||||||
Deferred energy costs — gas (Note 1) | — | 5,825 | ||||||
Materials, supplies and fuel, at average cost | 103,757 | 88,445 | ||||||
Risk management assets (Note 9) | 27,305 | 50,226 | ||||||
Deferred income taxes (Note 10) | 55,546 | — | ||||||
Deposits and prepayments for energy | 15,968 | 45,054 | ||||||
Other | 31,580 | 26,544 | ||||||
933,207 | 1,123,005 | |||||||
Deferred Charges and Other Assets: | ||||||||
Goodwill (Note 18) | 469 | 22,877 | ||||||
Deferred energy costs — electric (Note 1) | 382,286 | 255,312 | ||||||
Deferred energy costs — gas (Note 1) | — | 845 | ||||||
Regulatory tax asset (Note 10) | 263,170 | 249,261 | ||||||
Regulatory asset for pension plans (Note 1) | 223,218 | — | ||||||
Other regulatory assets | 668,624 | 568,145 | ||||||
Risk management assets (Note 9) | 7,586 | — | ||||||
Risk management regulatory assets — net (Note 9) | 122,911 | — | ||||||
Unamortized debt issuance costs | 67,106 | 63,395 | ||||||
Other | 42,176 | 107,330 | ||||||
1,777,546 | 1,267,165 | |||||||
TOTAL ASSETS | $ | 8,832,076 | $ | 7,870,546 | ||||
CAPITALIZATION AND LIABILITIES | ||||||||
Capitalization: | ||||||||
Common shareholders’ equity | $ | 2,622,297 | $ | 2,060,154 | ||||
Preferred stock | — | 50,000 | ||||||
Long-term debt | 4,001,542 | 3,817,122 | ||||||
6,623,839 | 5,927,276 | |||||||
Current Liabilities: | ||||||||
Current maturities of long-term debt | 8,348 | 58,909 | ||||||
Accounts payable | 282,463 | 263,100 | ||||||
Accrued interest | 56,426 | 58,585 | ||||||
Dividends declared | 73 | 1,043 | ||||||
Accrued salaries and benefits | 33,146 | 32,186 | ||||||
Current income taxes payable (Note 10) | 5,914 | 3,159 | ||||||
Deferred income taxes (Note 10) | — | 129,041 | ||||||
Risk management liabilities (Note 9) | 123,065 | 16,580 | ||||||
Accrued taxes | 6,290 | 6,540 | ||||||
Contract termination liabilities | ��� | 129,000 | ||||||
Other current liabilities | 60,349 | 56,724 | ||||||
576,074 | 754,867 | |||||||
Commitments and Contingencies (Note 13) | ||||||||
Deferred Credits and Other Liabilities: | ||||||||
Deferred income taxes (Note 10) | 791,428 | 451,924 | ||||||
Deferred investment tax credit | 35,218 | 38,625 | ||||||
Regulatory tax liability (Note 10) | 34,075 | 38,224 | ||||||
Customer advances for construction | 91,895 | 170,061 | ||||||
Accrued retirement benefits | 226,420 | 71,810 | ||||||
Risk management liabilities (Note 9) | 10,746 | — | ||||||
Risk management regulatory liability — net (Note 9) | — | 15,605 | ||||||
Regulatory liabilities (Note 1) | 301,903 | 284,438 | ||||||
Other | 140,478 | 117,716 | ||||||
1,632,163 | 1,188,403 | |||||||
TOTAL CAPITALIZATION AND LIABILITIES | $ | 8,832,076 | $ | 7,870,546 | ||||
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CONSOLIDATED INCOME STATEMENTS
(Dollars in Thousands, Except Per Share Amounts)
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
OPERATING REVENUES: | ||||||||||||
Electric | $ | 3,144,243 | $ | 2,850,694 | $ | 2,666,000 | ||||||
Gas | 210,068 | 178,270 | 153,752 | |||||||||
Other | 1,639 | 1,278 | 5,044 | |||||||||
3,355,950 | 3,030,242 | 2,824,796 | ||||||||||
OPERATING EXPENSES: | ||||||||||||
Operation: | ||||||||||||
Purchased power | 1,109,440 | 1,315,986 | 1,069,302 | |||||||||
Fuel for power generation | 800,585 | 510,736 | 459,478 | |||||||||
Gas purchased for resale | 160,739 | 140,850 | 121,526 | |||||||||
Deferred energy costs disallowed | — | — | 1,586 | |||||||||
Deferral of energy costs — electric – net | 139,365 | (37,558 | ) | 143,033 | ||||||||
Deferral of energy costs — gas – net | 6,947 | (749 | ) | (4,136 | ) | |||||||
Impairment of goodwill | — | — | 11,695 | |||||||||
Reinstatement of deferred energy (Note 13) | (178,825 | ) | — | — | ||||||||
Other | 367,198 | 363,802 | 335,998 | |||||||||
Maintenance | 93,172 | 78,730 | 78,907 | |||||||||
Depreciation and amortization | 228,875 | 214,662 | 205,922 | |||||||||
Taxes: | ||||||||||||
Income taxes (Note 10) | 91,571 | 39,185 | 22,739 | |||||||||
Other than income | 48,086 | 45,920 | 44,888 | |||||||||
2,867,153 | 2,671,564 | 2,490,938 | ||||||||||
OPERATING INCOME | 488,797 | 358,678 | 333,858 | |||||||||
OTHER INCOME (EXPENSE): | ||||||||||||
Allowance for other funds used during construction | 18,226 | 20,322 | 5,948 | |||||||||
Interest accrued on deferred energy | 27,898 | 27,442 | 25,332 | |||||||||
Early debt conversion fees | — | (54,000 | ) | — | ||||||||
Disallowed merger costs | — | — | (5,890 | ) | ||||||||
Disallowed plant costs | — | — | (47,092 | ) | ||||||||
Carrying charge for Lenzie (Note 1) | 33,440 | — | — | |||||||||
Gain on sale of investment | 62,927 | — | — | |||||||||
Other income | 37,123 | 41,200 | 35,313 | |||||||||
Other expense | (23,497 | ) | (18,645 | ) | (13,770 | ) | ||||||
Income (taxes) / benefits (Note 10) | (54,034 | ) | (3,933 | ) | 4,689 | |||||||
102,083 | 12,386 | 4,530 | ||||||||||
Total Income Before Interest Charges | 590,880 | 371,064 | 338,388 | |||||||||
INTEREST CHARGES: | ||||||||||||
Long-term debt | 294,488 | 302,668 | 313,305 | |||||||||
Interest for Energy Suppliers (Note 13) | — | (17,221 | ) | (35,170 | ) | |||||||
Other | 33,719 | 24,171 | 37,998 | |||||||||
Allowance for borrowed funds used during construction | (17,119 | ) | (24,691 | ) | (8,587 | ) | ||||||
311,088 | 284,927 | 307,546 | ||||||||||
INCOME FROM CONTINUING OPERATIONS | 279,792 | 86,137 | 30,842 | |||||||||
DISCONTINUED OPERATIONS: | ||||||||||||
Gain on the sale of discontinued operations (net of income taxes of ($877)) | — | — | 1,629 | |||||||||
PREFERRED STOCK DIVIDEND REQUIREMENTS OF SUBSIDIARY AND PREMIUM ON REDEMPTION | 2,341 | 3,900 | 3,900 | |||||||||
NET INCOME APPLICABLE TO COMMON STOCK | $ | 277,451 | $ | 82,237 | $ | 28,571 | ||||||
Amount per share basic and diluted — (Note 16) | ||||||||||||
Income from continuing operations | $ | 1.34 | $ | 0.46 | $ | 0.17 | ||||||
Gain on sale of discontinued operations | $ | — | $ | — | $ | 0.01 | ||||||
Net income applicable to common stock | $ | 1.33 | $ | 0.44 | $ | 0.16 | ||||||
Weighted Average Shares of Common Stock Outstanding — basic | 208,531,134 | 185,548,314 | 183,080,475 | |||||||||
Weighted Average Shares of Common Stock Outstanding — diluted | 209,020,896 | 185,932,504 | 183,400,303 | |||||||||
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in Thousands)
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
NET INCOME APPLICABLE TO COMMON STOCK | $ | 277,451 | $ | 82,237 | $ | 28,571 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||
Change in market value of risk management assets and liabilities as of December 31 (Net of taxes of $1,155 and ($950) in 2005 and 2004, respectively) | — | (2,146 | ) | 1,763 | ||||||||
Minimum pension liability adjustment (Net of taxes of ($1,132), $1,569 and ($15,486) in 2006, 2005 and 2004, respectively) | 2,106 | (4,311 | ) | 29,404 | ||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | 2,106 | (6,457 | ) | 31,167 | ||||||||
COMPREHENSIVE INCOME | $ | 279,557 | $ | 75,780 | $ | 59,738 | ||||||
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CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS’ EQUITY
(Dollars in Thousands)
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Common Stock: | ||||||||||||
Balance at Beginning of Year | $ | 200,792 | $ | 117,469 | $ | 117,236 | ||||||
Stock issuance/exchange, CSIP, DRP, ESPP and other | 20,238 | 83,323 | 233 | |||||||||
Balance at end of year | 221,030 | 200,792 | 117,469 | |||||||||
Other Paid-In Capital: | ||||||||||||
Balance at Beginning of Year | 2,220,896 | 1,818,453 | 1,815,202 | |||||||||
Premium on issuance/exchange of common stock | 260,600 | 405,767 | 563 | |||||||||
Common Stock issuance costs | (857 | ) | (6,486 | ) | — | |||||||
Revaluation of investment | — | 119 | 1,690 | |||||||||
Value of derivative transferred to equity | — | — | — | |||||||||
CSIP, DRP, ESPP and other | 2,605 | 3,043 | 998 | |||||||||
Balance at End of Year | 2,483,244 | 2,220,896 | 1,818,453 | |||||||||
Retained Earnings (Deficit): | ||||||||||||
Balance at Beginning of Year | (355,883 | ) | (438,112 | ) | (466,683 | ) | ||||||
Net Income applicable to Common Stock | 277,451 | 82,237 | 28,571 | |||||||||
Common stock dividends declared, net of adjustments | — | (8 | ) | — | ||||||||
Balance at End of Year | (78,432 | ) | (355,883 | ) | (438,112 | ) | ||||||
Accumulated Other Comprehensive Income (Loss): | ||||||||||||
Balance at Beginning of Year | (5,651 | ) | 806 | (30,361 | ) | |||||||
Adoption of SFAS No. 133 - Accounting for Derivative Instruments and Hedging Activities | ||||||||||||
Change in market value of risk management assets and liabilities as of December 31 (Net of taxes of $1,155 and ($950) in 2005 and 2004, respectively) | — | (2,146 | ) | 1,763 | ||||||||
Minimum pension liability adjustment (Net of taxes of ($1,132), $1,569 and ($15,486) in 2006, 2005 and 2004, respectively) | 2,106 | (4,311 | ) | 29,404 | ||||||||
Balance at End of Year | (3,545 | ) | (5,651 | ) | 806 | |||||||
Total Common Shareholders’ Equity at End of Year | $ | 2,622,297 | $ | 2,060,154 | $ | 1,498,616 | ||||||
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
For the Year Ended December 31 | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net Income applicable to common stock | $ | 277,451 | $ | 82,237 | $ | 28,571 | ||||||
Non-cash items included in net income (loss): | ||||||||||||
Depreciation and amortization | 228,875 | 214,662 | 205,922 | |||||||||
Deferred taxes and deferred investment tax credit | 136,026 | 41,609 | 33,690 | |||||||||
AFUDC | (18,226 | ) | (45,013 | ) | (14,536 | ) | ||||||
Amortization of deferred energy costs – electric | 166,821 | 188,221 | 265,418 | |||||||||
Amortization of deferred energy costs – gas | 6,234 | 1,446 | 3,242 | |||||||||
Deferred energy costs disallowed | — | — | 1,586 | |||||||||
Goodwill impairment | — | — | 11,695 | |||||||||
Plant costs disallowed | — | — | 47,092 | |||||||||
Reinstatement of deferred energy | (178,825 | ) | — | — | ||||||||
Carrying charge on Lenzie plant | (33,440 | ) | — | — | ||||||||
Gain on sale of investment | (62,927 | ) | — | — | ||||||||
Impairment of assets of subsidiary | — | — | 10,997 | |||||||||
Gain on sale of discontinued operations | — | — | (2,506 | ) | ||||||||
Other | 24,650 | (219) | (23,453) | |||||||||
Changes in certain assets and liabilities: | ||||||||||||
Accounts receivable | (43,214 | ) | (92,452 | ) | (19,198 | ) | ||||||
Deferral of energy costs – electric | (54,737 | ) | (241,103 | ) | (152,140 | ) | ||||||
Deferral of energy costs – gas | 436 | (2,519 | ) | (7,480 | ) | |||||||
Deferral of energy costs — terminated suppliers | 8,741 | 218,040 | 4,551 | |||||||||
Materials, supplies and fuel | (15,312 | ) | (12,251 | ) | 3,331 | |||||||
Other current assets | 24,050 | 20,663 | 5,721 | |||||||||
Accounts payable | (2,739 | ) | 55,985 | 13,623 | ||||||||
Payment to terminating supplier | (65,368 | ) | — | (61,129 | ) | |||||||
Proceeds from claim on terminating supplier | 41,365 | — | — | |||||||||
Other current liabilities | 2,356 | (162,416 | ) | 20,306 | ||||||||
Risk Management assets and liabilities | (5,950 | ) | (6,685 | ) | 8,487 | |||||||
Other assets | (10,122 | ) | (9,950 | ) | 6,168 | |||||||
Other liabilities | 3,297 | (15,659 | ) | (42,476 | ) | |||||||
Net Cash from Operating Activities | 429,442 | 234,596 | 347,482 | |||||||||
CASH FLOWS USED BY INVESTING ACTIVITIES: | ||||||||||||
Additions to utility plant | (986,019 | ) | (686,394 | ) | (614,411 | ) | ||||||
AFUDC | 18,226 | 45,013 | 14,536 | |||||||||
Customer advances for construction | 17,348 | 27,358 | 16,197 | |||||||||
Contributions in aid of construction | 38,792 | 23,351 | 26,457 | |||||||||
Proceeds from sale of investment | 99,730 | — | — | |||||||||
Proceeds from sale of discontinued operations | — | — | 4,471 | |||||||||
Investments in subsidiaries and other property — net | 8,423 | 10,200 | 16,299 | |||||||||
Net Cash used by Investing Activities | (803,500 | ) | (580,472 | ) | (536,451 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Increase in short-term borrowings | — | — | (25,000 | ) | ||||||||
Change in restricted cash and investments | 3,612 | 23,711 | 27,382 | |||||||||
Proceeds from issuance of long-term debt | 2,491,883 | 370,211 | 965,000 | |||||||||
Retirement of long-term debt | (2,407,745 | ) | (373,938 | ) | (693,538 | ) | ||||||
Redemption of preferred stock | (51,366 | ) | — | — | ||||||||
Sale of common stock, net of issuance cost | 282,594 | 236,208 | 3,488 | |||||||||
Dividends paid | (1,945 | ) | (3,911 | ) | (3,821 | ) | ||||||
Net Cash from Financing Activities | 317,033 | 252,281 | 273,511 | |||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | (57,025 | ) | (93,595 | ) | 84,542 | |||||||
Beginning Balance in Cash and Cash Equivalents | 172,734 | 266,330 | 181,789 | |||||||||
Ending Balance in Cash and Cash Equivalents | $ | 115,709 | $ | 172,735 | $ | 266,331 | ||||||
Supplemental Disclosures of Cash Flow Information: | ||||||||||||
Cash paid during period for: | ||||||||||||
Interest | $ | 338,665 | $ | 330,889 | $ | 339,718 | ||||||
Income taxes | $ | 4,726 | $ | — | $ | — | ||||||
Noncash Activities: | ||||||||||||
Exchange of Convertible Debt for SPR Common Stock | $ | — | $ | 248,168 | $ | — |
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CONSOLIDATED STATEMENTS OF CAPITALIZATION
(Dollars in Thousands, Except Per Share Amounts)
December 31 | ||||||||
2006 | 2005 | |||||||
Common Shareholder’s Equity: | ||||||||
Common stock, $1.00 par value, authorized 350 million; issued and outstanding 2006: 221,030,000 shares; issued and outstanding 2005: 200,792,000 shares issued and outstanding | $ | 221,030 | $ | 200,792 | ||||
Other paid-in capital | 2,483,244 | 2,220,896 | ||||||
Retained Deficit | (78,432 | ) | (355,883 | ) | ||||
Accumulated other comprehensive Income (Loss) | (3,545 | ) | (5,651 | ) | ||||
Total Common Shareholder’s Equity | 2,622,297 | 2,060,154 | ||||||
Preferred Stock of Subsidiaries: | ||||||||
Not subject to mandatory redemption; 2005: 2,000,000 shares outstanding; $25 stated value | ||||||||
SPPC Class A Series 1; $1.95 dividend | — | 50,000 | ||||||
Long-Term Debt: | ||||||||
Secured Debt | ||||||||
First Mortgage Bonds | ||||||||
8.50% NPC Series Z due 2023 | — | 35,000 | ||||||
Debt Secured by First Mortgage Bonds | ||||||||
Revenue Bonds | ||||||||
Nevada Power Company | ||||||||
6.60% NPC Series 1992B due 2019 | — | 39,500 | ||||||
6.70% NPC Series 1992A due 2022 | — | 105,000 | ||||||
7.20% NPC Series 1992C due 2022 | — | 78,000 | ||||||
Sierra Pacific Power Company | ||||||||
6.35% SPPC Series 1992B due 2012 | — | 1,000 | ||||||
6.55% SPPC Series 1987 due 2013 | — | 39,500 | ||||||
6.30% SPPC Series 1987 due 2014 | — | 45,000 | ||||||
6.65% SPPC Series 1987 due 2017 | — | 92,500 | ||||||
6.55% SPPC Series 1990 due 2020 | — | 20,000 | ||||||
6.30% SPPC Series 1992A due 2022 | — | 10,250 | ||||||
5.90% SPPC Series 1993A due 2023 | — | 9,800 | ||||||
5.90% SPPC Series 1993B due 2023 | — | 30,000 | ||||||
6.70% SPPC Series 1992 due 2032 | — | 21,200 | ||||||
Medium Term Notes | ||||||||
Sierra Pacific Power Company | ||||||||
6.62% to 6.83% SPPC Series C due 2006 | — | 50,000 | ||||||
6.95% to 8.61% SPPC Series A due 2022 | — | 110,000 | ||||||
7.10% to 7.14% SPPC Series B due 2023 | — | 58,000 | ||||||
Subtotal | — | 744,750 | ||||||
Debt Secured by General and Refunding Mortgage Securities | ||||||||
Nevada Power Company | ||||||||
10.88% NPC Series E due 2009 | — | 162,500 | ||||||
8.25% NPC Series A due 2011 | 350,000 | 350,000 | ||||||
6.50% NPC Series I due 2012 | 130,000 | 130,000 | ||||||
9.00% NPC Series G due 2013 | 227,500 | 227,500 | ||||||
5.875% NPC Series L due 2015 | 250,000 | 250,000 | ||||||
5.95% NPC Series M due 2016 | 210,000 | — | ||||||
6.65% NPC Series N due 2036 | 370,000 | — | ||||||
6.50% NPC Series O due 2018 | 325,000 | — | ||||||
Subtotal | 1,862,500 | 1,120,000 | ||||||
(Continued)
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CONSOLIDATED STATEMENTS OF CAPITALIZATION
(Dollars in Thousands, Except Per Share Amounts)
December 31 | ||||||||
2006 | 2005 | |||||||
Sierra Pacific Power Company | ||||||||
8.00% SPPC Series A due 2008 | 320,000 | 320,000 | ||||||
6.25% SPPC Series H due 2012 | 100,000 | 100,000 | ||||||
6.00% SPPC Series M due 2016 | 300,000 | — | ||||||
5.00% SPPC Series 2001 due 2036 | 80,000 | 80,000 | ||||||
Subtotal | 800,000 | 500,000 | ||||||
Variable Rate Notes | ||||||||
Nevada Power Company | ||||||||
NPC PCRB Series 2000B due 2009 | 15,000 | 15,000 | ||||||
NPC IDRB Series 2000A due 2020 | 100,000 | 100,000 | ||||||
NPC PCRB Series 2006 due 2036 | 39,500 | — | ||||||
NPC PCRB Series 2006A due 2032 | 40,000 | — | ||||||
NPC PCRB Series 2006B due 2039 | 13,000 | — | ||||||
NPC Revolving Credit Facility | — | 150,000 | ||||||
Subtotal | 207,500 | 265,000 | ||||||
Sierra Pacific Power Company | ||||||||
SPPC PCRB Series 2006 due 2029 | 49,750 | — | ||||||
SPPC PCRB Series 2006A due 2031 | 58,700 | — | ||||||
SPPC PCRB Series 2006B due 2036 | 75,000 | — | ||||||
SPPC PCRB Series 2006C due 2036 | 84,800 | — | ||||||
Subtotal | 268,250 | — | ||||||
Unsecured Debt | ||||||||
Revenue Bonds | ||||||||
Nevada Power Company | ||||||||
5.30% NPC Series 1995D due 2011 | 14,000 | 14,000 | ||||||
5.35% NPC Series 1995E due 2022 | — | 13,000 | ||||||
5.45% NPC Series 1995D due 2023 | 6,300 | 6,300 | ||||||
5.50% NPC Series 1995C due 2030 | 44,000 | 44,000 | ||||||
5.60% NPC Series 1995A due 2030 | 76,750 | 76,750 | ||||||
5.90% NPC Series 1995B due 2030 | 85,000 | 85,000 | ||||||
5.80% NPC Series 1997B due 2032 | — | 20,000 | ||||||
5.90% NPC Series 1997A due 2032 | 52,285 | 52,285 | ||||||
6.38% NPC Series 1996 due 2036 | — | 20,000 | ||||||
Subtotal | 278,335 | 331,335 | ||||||
Other Notes | ||||||||
Sierra Pacific Resources | ||||||||
7.803% SPR Senior Notes due 2012 | 74,170 | 99,142 | ||||||
8.625% SPR Notes due 2014 | 250,039 | 335,000 | ||||||
6.75% SPR Senior Notes due 2017 | 225,000 | 225,000 | ||||||
Subtotal, excluding current portion | 549,209 | 659,142 | ||||||
Unamortized bond premium and discount, net | (11,813 | ) | (3,495 | ) | ||||
Nevada Power Company | ||||||||
8.2% Junior Subordinated Debentures of NPC, due 2037 | — | 122,548 | ||||||
7.75% Junior Subordinated Debentures of NPC, due 2038 | — | 72,165 | ||||||
Subtotal | — | 194,713 | ||||||
Obligations under capital leases | 50,479 | 56,921 | ||||||
Current maturities and sinking fund requirements | (8,348 | ) | (58,909 | ) | ||||
Other, excluding current portion | 5,430 | 7,665 | ||||||
Total Long-Term Debt | 4,001,542 | 3,817,122 | ||||||
TOTAL CAPITALIZATION | $ | 6,623,839 | $ | 5,927,276 | ||||
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CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
December 31, | ||||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Utility Plant at Original Cost: | ||||||||
Plant in service | $ | 5,187,665 | $ | 4,106,489 | ||||
Less accumulated provision for depreciation | 1,276,192 | 1,128,209 | ||||||
3,911,473 | 2,978,280 | |||||||
Construction work-in-progress | 238,518 | 698,206 | ||||||
4,149,991 | 3,676,486 | |||||||
Investments and other property, net (Note 4) | 22,176 | 29,249 | ||||||
Current Assets: | ||||||||
Cash and cash equivalents | 36,633 | 98,681 | ||||||
Restricted cash | — | 52,374 | ||||||
Accounts receivable less allowance for uncollectible accounts: | ||||||||
2006-$32,834; 2005-$30,386 | 244,623 | 232,086 | ||||||
Accounts receivable, affiliated companies | — | 3,738 | ||||||
Deferred energy costs — electric (Note 1) | 129,304 | 186,355 | ||||||
Materials, supplies and fuel, at average cost | 60,754 | 46,835 | ||||||
Risk management assets (Note 9) | 16,378 | 22,404 | ||||||
Deferred income taxes (Note 10) | 72,294 | — | ||||||
Deposits and prepayments for energy | 7,056 | 16,303 | ||||||
Other | 19,901 | 16,075 | ||||||
586,943 | 674,851 | |||||||
Deferred Charges and Other Assets: | ||||||||
Deferred energy costs — electric (Note 1) | 359,589 | 214,587 | ||||||
Regulatory tax asset (Note 10) | 153,471 | 155,304 | ||||||
Regulatory asset for pension plans (Note 1) | 113,646 | |||||||
Other regulatory assets (Note 1) | 440,369 | 362,567 | ||||||
Risk management assets | 5,379 | — | ||||||
Risk management regulatory assets — net (Note 9) | 83,886 | — | ||||||
Unamortized debt issuance costs | 38,856 | 37,157 | ||||||
Other | 33,209 | 23,720 | ||||||
1,228,405 | 793,335 | |||||||
TOTAL ASSETS | $ | 5,987,515 | $ | 5,173,921 | ||||
CAPITALIZATION AND LIABILITIES | ||||||||
Capitalization: | ||||||||
Common shareholder’s equity | $ | 2,172,198 | $ | 1,762,089 | ||||
Long-term debt | 2,380,139 | 2,214,063 | ||||||
4,552,337 | 3,976,152 | |||||||
Current Liabilities: | ||||||||
Current maturities of long-term debt | 5,948 | 6,509 | ||||||
Accounts payable | 148,003 | 164,169 | ||||||
Accounts payable, affiliated companies | 20,656 | — | ||||||
Accrued interest | 37,010 | 33,031 | ||||||
Dividends declared | 13,545 | 397 | ||||||
Accrued salaries and benefits | 14,989 | 15,537 | ||||||
Current income taxes payable (Note 10) | 3,981 | 3,159 | ||||||
Intercompany Income taxes payable | 884 | — | ||||||
Deferred income taxes (Note 10) | — | 57,392 | ||||||
Risk management liabilities (Note 9) | 84,674 | 10,125 | ||||||
Accrued taxes | 2,671 | 2,817 | ||||||
Contract termination liabilities | — | 89,784 | ||||||
Other current liabilities | 48,225 | 46,425 | ||||||
380,586 | 429,345 | |||||||
Commitments and Contingencies (Note 13) | ||||||||
Deferred Credits and Other Liabilities: | ||||||||
Deferred income taxes (Note 10) | 599,747 | 362,973 | ||||||
Deferred investment tax credit | 15,213 | 16,832 | ||||||
Regulatory tax liability (Note 10) | 13,451 | 15,068 | ||||||
Customer advances for construction | 60,040 | 98,056 | ||||||
Accrued retirement benefits | 90,474 | 22,203 | ||||||
Risk management liabilities (Note 9) | 7,061 | — | ||||||
Risk management regulatory liability — net (Note 9) | — | 590 | ||||||
Regulatory liabilities (Note 1) | 171,298 | 173,527 | ||||||
Other | 97,308 | 79,175 | ||||||
1,054,592 | 768,424 | |||||||
TOTAL CAPITALIZATION AND LIABILITIES | $ | 5,987,515 | $ | 5,173,921 | ||||
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CONSOLIDATED INCOME STATEMENTS
(Dollars in Thousands)
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
OPERATING REVENUES: | ||||||||||||
Electric | $ | 2,124,081 | $ | 1,883,267 | $ | 1,784,092 | ||||||
OPERATING EXPENSES: | ||||||||||||
Operation: | ||||||||||||
Purchased power | 764,850 | 963,888 | 764,347 | |||||||||
Fuel for power generation | 552,959 | 277,083 | 235,404 | |||||||||
Deferred energy costs disallowed | — | — | 1,586 | |||||||||
Deferral of energy costs-net | 92,322 | (45,668 | ) | 135,973 | ||||||||
Reinstatement of deferred energy (Note 13) | (178,825 | ) | — | — | ||||||||
Other | 218,120 | 211,039 | 183,736 | |||||||||
Maintenance | 61,899 | 52,040 | 57,030 | |||||||||
Depreciation and amortization | 141,585 | 124,098 | 118,841 | |||||||||
Taxes: | ||||||||||||
Income taxes (Note 10) | 91,781 | 46,425 | 45,135 | |||||||||
Other than income | 28,118 | 25,535 | 25,550 | |||||||||
1,772,809 | 1,654,440 | 1,567,602 | ||||||||||
OPERATING INCOME | 351,272 | 228,827 | 216,490 | |||||||||
OTHER INCOME (EXPENSE): | ||||||||||||
Allowance for other funds used during construction | 11,755 | 18,683 | 4,230 | |||||||||
Interest accrued on deferred energy | 21,902 | 20,350 | 20,199 | |||||||||
Disallowed merger costs | — | — | (3,961 | ) | ||||||||
Carrying charge for Lenzie (Note 1) | 33,440 | — | — | |||||||||
Other income | 16,992 | 25,626 | 22,844 | |||||||||
Other expense | (8,480 | ) | (8,525 | ) | (6,665 | ) | ||||||
Income taxes (Note 10) | (25,729 | ) | (17,570 | ) | (11,437 | ) | ||||||
49,880 | 38,564 | 25,210 | ||||||||||
Total Income Before Interest Charges | 401,152 | 267,391 | 241,700 | |||||||||
INTEREST CHARGES: | ||||||||||||
Long-term debt | 171,188 | 159,106 | 152,764 | |||||||||
Interest for Energy Suppliers (Note 13) | — | (14,825 | ) | (24,171 | ) | |||||||
Other | 17,038 | 13,563 | 14,533 | |||||||||
Allowance for borrowed funds used during construction | (11,614 | ) | (23,187 | ) | (5,738 | ) | ||||||
176,612 | 134,657 | 137,388 | ||||||||||
NET INCOME | $ | 224,540 | $ | 132,734 | $ | 104,312 | ||||||
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in Thousands)
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
NET INCOME | $ | 224,540 | $ | 132,734 | $ | 104,312 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||||||||||
Change in market value of risk management assets and liabilities as of December 31 (Net of taxes of $785, and ($688) in 2005 and 2004, respectively) | — | (1,460 | ) | 1,277 | ||||||||
Minimum pension liability adjustment (Net of taxes of ($520), $740 and ($1,205) in 2006, 2005 and 2004, respectively) | 965 | (2,769 | ) | 2,239 | ||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | 965 | (4,229 | ) | 3,516 | ||||||||
COMPREHENSIVE INCOME | $ | 225,505 | $ | 128,505 | $ | 107,828 | ||||||
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CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER’S EQUITY
(Dollars in Thousands)
December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Common Stock: | ||||||||||||
Balance at Beginning of Year and End of Year | $ | 1 | $ | 1 | $ | 1 | ||||||
Other Paid-In Capital: | ||||||||||||
Balance at Beginning of Year | 1,808,848 | 1,576,794 | 1,377,106 | |||||||||
Transfer of Goodwill | — | — | 197,998 | |||||||||
Revaluation of investment | — | 119 | 1,690 | |||||||||
Transfer of pension assets | 33,521 | — | — | |||||||||
Capital infusion from parent | 200,000 | 231,935 | — | |||||||||
Balance at End of Year | 2,042,369 | 1,808,848 | 1,576,794 | |||||||||
Retained Earnings (Deficit): | ||||||||||||
Balance at Beginning of Year | (43,422 | ) | (140,898 | ) | (199,837 | ) | ||||||
Income for the year | 224,540 | 132,734 | 104,312 | |||||||||
Common stock dividends declared | (48,917 | ) | (35,258 | ) | (45,373 | ) | ||||||
Balance at End of Year | 132,201 | (43,422 | ) | (140,898 | ) | |||||||
Accumulated Other Comprehensive Income (Loss): | ||||||||||||
Balance at Beginning of Year | (3,338 | ) | 891 | (2,625 | ) | |||||||
Change in market value of risk management assets and liabilities as of December 31 (Net of taxes of $785 and ($688) in 2005 and 2004, respectively) | — | (1,460 | ) | 1,277 | ||||||||
Minimum pension liability adjustment (Net of taxes of ($520), $740 and ($1,205) in 2006, 2005 and 2004, respectively) | 965 | (2,769 | ) | 2,239 | ||||||||
Balance at End of Year | (2,373 | ) | (3,338 | ) | 891 | |||||||
Total Common Shareholder’s Equity at End of Year | $ | 2,172,198 | $ | 1,762,089 | $ | 1,436,788 | ||||||
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
For the Year Ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net Income | $ | 224,540 | $ | 132,734 | $ | 104,312 | ||||||
Non-cash items included in net loss: | ||||||||||||
Depreciation and amortization | 141,585 | 124,098 | 118,841 | |||||||||
Deferred taxes and deferred investment tax credit | 107,392 | 86,910 | 57,066 | |||||||||
AFUDC | (11,755 | ) | (41,870 | ) | (9,969 | ) | ||||||
Amortization of deferred energy costs | 120,499 | 131,471 | 228,765 | |||||||||
Deferred energy costs disallowed | — | — | 1,586 | |||||||||
Reinstatement of deferred energy | (178,825 | ) | — | |||||||||
Carrying charge on Lenzie plant | (33,440 | ) | — | |||||||||
Other | 3,394 | (7,433 | ) | (44,149 | ) | |||||||
Changes in certain assets and liabilities: | ||||||||||||
Accounts receivable | (35,191 | ) | (57,746 | ) | (7,247 | ) | ||||||
Deferral of energy costs | (49,982 | ) | (186,338 | ) | (117,543 | ) | ||||||
Deferral of energy costs — terminated suppliers | 3,896 | 155,119 | 4,551 | |||||||||
Materials, supplies and fuel | (13,919 | ) | (1,977 | ) | (3,782 | ) | ||||||
Other current assets | 5,421 | 14,434 | 14,522 | |||||||||
Accounts payable | (2,431 | ) | 30,855 | 10,350 | ||||||||
Payment to terminating supplier | (37,410 | ) | — | (50,311 | ) | |||||||
Proceeds from claim on terminating supplier | 26,391 | — | — | |||||||||
Other current liabilities | 5,083 | (107,575 | ) | 10,504 | ||||||||
Risk Management assets and liabilities | (2,219 | ) | (6,597 | ) | 4,454 | |||||||
Other assets | (9,902 | ) | (9,950 | ) | 6,168 | |||||||
Other liabilities | (2,946 | ) | (31,926 | ) | 14,522 | |||||||
Net Cash from Operating Activities | 260,181 | 224,209 | 342,640 | |||||||||
CASH FLOWS USED BY INVESTING ACTIVITIES: | ||||||||||||
Additions to utility plant | (670,441 | ) | (546,748 | ) | (482,484 | ) | ||||||
AFUDC | 11,755 | 41,870 | 9,969 | |||||||||
Customer advances for construction | 10,417 | 18,813 | 8,067 | |||||||||
Contributions in aid of construction | 21,241 | 8,544 | 10,703 | |||||||||
Investments in subsidiaries and other property — net | 7,363 | 1,875 | 5,404 | |||||||||
Net Cash used by Investing Activities | (619,665 | ) | (475,646 | ) | (448,341 | ) | ||||||
CASH FLOWS FROM (USED BY) FINANCING ACTIVITIES: | ||||||||||||
Change in restricted cash and investments | — | — | 2,600 | |||||||||
Proceeds from issuance of long-term debt | 1,687,726 | 150,000 | 530,000 | |||||||||
Retirement of long-term debt | (1,554,521 | ) | (238,486 | ) | (283,498 | ) | ||||||
Additional investment by parent company | 200,000 | 230,541 | — | |||||||||
Dividends paid | (35,769 | ) | (35,260 | ) | (44,975 | ) | ||||||
Net Cash from Financing Activities | 297,436 | 106,795 | 204,127 | |||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | (62,048 | ) | (144,642 | ) | 98,426 | |||||||
Beginning Balance in Cash and Cash Equivalents | 98,681 | 243,323 | 144,897 | |||||||||
Ending Balance in Cash and Cash Equivalents | $ | 36,633 | $ | 98,681 | $ | 243,323 | ||||||
Supplemental Disclosures of Cash Flow Information: | ||||||||||||
Cash paid during period for: | ||||||||||||
Interest | $ | 190,023 | $ | 173,775 | $ | 161,126 | ||||||
Income taxes | $ | 4,714 | $ | — | $ | — | ||||||
Noncash Activities: | ||||||||||||
Transfer of Regulatory Asset | $ | — | $ | — | $ | 197,998 |
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CONSOLIDATED STATEMENTS OF CAPITALIZATION
(Dollars in Thousands, Except Per Share Amounts)
December 31 | ||||||||
2006 | 2005 | |||||||
Common Shareholder’s Equity: | ||||||||
Common stock, $1.00 par value, 1,000 shares authorized, issued and Outstanding | $ | 1 | $ | 1 | ||||
Other paid-in capital | 2,042,369 | 1,808,848 | ||||||
Retained Earning (Deficit) | 132,201 | (43,422 | ) | |||||
Accumulated other comprehensive Income (Loss) | (2,373 | ) | (3,338 | ) | ||||
Total Common Shareholder’s Equity | 2,172,198 | 1,762,089 | ||||||
Long-Term Debt: | ||||||||
Secured Debt | ||||||||
First Mortgage Bonds | ||||||||
8.50% Series Z due 2023 | — | 35,000 | ||||||
Debt Secured by First Mortgage Bonds | ||||||||
Revenue Bonds | ||||||||
6.60% Series 1992B due 2019 | — | 39,500 | ||||||
6.70% Series 1992A due 2022 | — | 105,000 | ||||||
7.20% Series 1992C due 2022 | — | 78,000 | ||||||
Subtotal | — | 257,500 | ||||||
Debt Secured by General and Refunding Mortgage Securities | ||||||||
10.88% Series E due 2009 | — | 162,500 | ||||||
8.25% Series A due 2011 | 350,000 | 350,000 | ||||||
6.50% Series I due 2012 | 130,000 | 130,000 | ||||||
9.00% Series G due 2013 | 227,500 | 227,500 | ||||||
5.875% Series L due 2015 | 250,000 | 250,000 | ||||||
5.95% Series M due 2016 | 210,000 | — | ||||||
6.65% Series N due 2036 | 370,000 | — | ||||||
6.00% Series O due 2018 | 325,000 | — | ||||||
Subtotal | 1,862,500 | 1,120,000 | ||||||
Variable Rate Notes | ||||||||
PCRB Series 2000B due 2009 | 15,000 | 15,000 | ||||||
IDRB Series 2000A due 2020 | 100,000 | 100,000 | ||||||
PCRB Series 2006 due 2036 | 39,500 | — | ||||||
PCRB Series 2006A due 2032 | 40,000 | — | ||||||
PCRB Series 2006B due 2039 | 13,000 | — | ||||||
Revolving Credit Facility | — | 150,000 | ||||||
Subtotal | 207,500 | 265,000 | ||||||
Unsecured Debt | ||||||||
Revenue Bonds | ||||||||
5.30% Series 1995D due 2011 | 14,000 | 14,000 | ||||||
5.35% Series 1995E due 2022 | — | 13,000 | ||||||
5.45% Series 1995D due 2023 | 6,300 | 6,300 | ||||||
5.50% Series 1995C due 2030 | 44,000 | 44,000 | ||||||
5.60% Series 1995A due 2030 | 76,750 | 76,750 | ||||||
5.90% Series 1995B due 2030 | 85,000 | 85,000 | ||||||
5.80% Series 1997B due 2032 | — | 20,000 | ||||||
5.90% Series 1997A due 2032 | 52,285 | 52,285 | ||||||
6.38% Series 1996 due 2036 | — | 20,000 | ||||||
Subtotal | 278,335 | 331,335 | ||||||
Unamortized bond premium and discount, net | (12,757 | ) | (4,942 | ) | ||||
8.2% Junior Subordinated Debentures due 2037 | — | 122,548 | ||||||
7.75% Junior Subordinated Debentures due 2038 | — | 72,165 | ||||||
Subtotal | — | 194,713 | ||||||
Obligations under capital leases | 50,479 | 56,921 | ||||||
Current maturities and sinking fund requirements | (5,948 | ) | (6,509 | ) | ||||
Other, excluding current portion | 30 | 45 | ||||||
Total Long-Term Debt | 2,380,139 | 2,214,063 | ||||||
TOTAL CAPITALIZATION | $ | 4,552,337 | $ | 3,976,152 | ||||
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CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
December 31, | ||||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Utility Plant at Original Cost: | ||||||||
Plant in service | $ | 2,766,672 | $ | 2,695,427 | ||||
Less accumulated provision for depreciation | 1,057,165 | 1,041,107 | ||||||
1,709,507 | 1,654,320 | |||||||
Construction work-in-progress | 227,500 | 66,799 | ||||||
1,937,007 | 1,721,119 | |||||||
Investments and other property, net (Note 4) | 609 | 842 | ||||||
Current Assets: | ||||||||
Cash and cash equivalents | 53,260 | 38,153 | ||||||
Restricted cash | — | 14,871 | ||||||
Accounts receivable less allowance for uncollectible accounts: | ||||||||
2006-$6,732; 2005-$5,842 | 170,106 | 180,973 | ||||||
Accounts receivable, affiliated companies | — | 40,278 | ||||||
Deferred energy costs — electric (Note 1) | 38,956 | 67,342 | ||||||
Deferred energy costs — gas (Note 1) | — | 5,825 | ||||||
Materials, supplies and fuel, at average cost | 42,990 | 41,608 | ||||||
Risk management assets (Note 9) | 10,927 | 27,822 | ||||||
Deposits and prepayments for energy | 8,912 | 28,751 | ||||||
Other | 11,184 | 9,547 | ||||||
336,335 | 455,170 | |||||||
Deferred Charges and Other Assets: | ||||||||
Deferred energy costs — electric (Note 1) | 22,697 | 40,725 | ||||||
Deferred energy costs — gas (Note 1) | — | 845 | ||||||
Regulatory tax asset (Note 10) | 109,699 | 93,957 | ||||||
Regulatory asset for pension plans (Note 1) | 106,666 | — | ||||||
Other regulatory assets | 228,255 | 205,578 | ||||||
Risk management assets (Note 9) | 2,207 | — | ||||||
Risk management regulatory assets – net (Note 9) | 39,025 | — | ||||||
Unamortized debt issuance costs | 17,981 | 12,693 | ||||||
Other | 7,356 | 15,372 | ||||||
533,886 | 369,170 | |||||||
TOTAL ASSETS | $ | 2,807,837 | $ | 2,546,301 | ||||
CAPITALIZATION AND LIABILITIES | ||||||||
Capitalization: | ||||||||
Common shareholder’s equity | $ | 884,737 | $ | 727,777 | ||||
Preferred stock | — | 50,000 | ||||||
Long-term debt | 1,070,858 | 941,804 | ||||||
1,955,595 | 1,719,581 | |||||||
Current Liabilities: | ||||||||
Current maturities of long-term debt | 2,400 | 52,400 | ||||||
Accounts payable | 89,743 | 56,661 | ||||||
Accounts payable, affiliated companies | 11,769 | — | ||||||
Accrued interest | 7,200 | 10,993 | ||||||
Dividends declared | 6,736 | 968 | ||||||
Accrued salaries and benefits | 15,209 | 14,032 | ||||||
Intercompany income taxes payable (Note 10) | 9,055 | 49,673 | ||||||
Deferred income taxes (Note 10) | 8,881 | 21,832 | ||||||
Risk management liabilities (Note 9) | 38,391 | 6,455 | ||||||
Accrued taxes | 3,407 | 3,541 | ||||||
Contract termination liabilities | — | 39,216 | ||||||
Other current liabilities | 12,125 | 10,299 | ||||||
204,916 | 266,070 | |||||||
Commitments and Contingencies (Note 13) | ||||||||
Deferred Credits and Other Liabilities: | ||||||||
Deferred income taxes (Note 10) | 278,515 | 244,244 | ||||||
Deferred investment tax credit | 20,005 | 21,793 | ||||||
Regulatory tax liability (Note 10) | 20,624 | 23,156 | ||||||
Customer advances for construction | 31,855 | 72,005 | ||||||
Accrued retirement benefits | 124,254 | 40,269 | ||||||
Risk management liabilities (Note 9) | 3,685 | — | ||||||
Risk management regulatory liability — net (Note 9) | — | 15,015 | ||||||
Regulatory liabilities (Note 1) | 130,605 | 110,911 | ||||||
Other | 37,783 | 33,257 | ||||||
647,326 | 560,650 | |||||||
TOTAL CAPITALIZATION AND LIABILITIES | $ | 2,807,837 | $ | 2,546,301 | ||||
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CONSOLIDATED INCOME STATEMENTS
(Dollars in Thousands)
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
OPERATING REVENUES: | ||||||||||||
Electric | $ | 1,020,162 | $ | 967,427 | $ | 881,908 | ||||||
Gas | 210,068 | 178,270 | 153,752 | |||||||||
1,230,230 | 1,145,697 | 1,035,660 | ||||||||||
OPERATING EXPENSES: | ||||||||||||
Operation: | ||||||||||||
Purchased power | 344,590 | 352,098 | 304,955 | |||||||||
Fuel for power generation | 247,626 | 233,653 | 224,074 | |||||||||
Gas purchased for resale | 160,739 | 140,850 | 121,526 | |||||||||
Deferral of energy costs — electric — net | 47,043 | 8,110 | 7,060 | |||||||||
Deferral of energy costs — gas — net | 6,947 | (749 | ) | (4,136 | ) | |||||||
Other | 141,350 | 131,901 | 128,091 | |||||||||
Maintenance | 31,273 | 26,690 | 21,877 | |||||||||
Depreciation and amortization | 87,279 | 90,569 | 86,806 | |||||||||
Taxes: | ||||||||||||
Income taxes (Note 10) | 23,570 | 26,038 | 14,978 | |||||||||
Other than income | 19,796 | 20,233 | 19,184 | |||||||||
1,110,213 | 1,029,393 | 924,415 | ||||||||||
OPERATING INCOME | 120,017 | 116,304 | 111,245 | |||||||||
OTHER INCOME (EXPENSE): | ||||||||||||
Allowance for other funds used during construction | 6,471 | 1,639 | 1,718 | |||||||||
Interest accrued on deferred energy | 5,996 | 7,092 | 5,133 | |||||||||
Disallowed merger costs | — | — | (1,929 | ) | ||||||||
Plant costs disallowed | — | — | (47,092 | ) | ||||||||
Other income | 9,412 | 5,940 | 3,406 | |||||||||
Other expense | (8,422 | ) | (7,493 | ) | (5,726 | ) | ||||||
Income (taxes) / benefits (Note 10) | (4,259 | ) | (2,341 | ) | 14,653 | |||||||
9,198 | 4,837 | (29,837 | ) | |||||||||
Total Income Before Interest Charges | 129,215 | 121,141 | 81,408 | |||||||||
INTEREST CHARGES: | ||||||||||||
Long-term debt | 71,869 | 69,240 | 71,312 | |||||||||
Interest for Energy Suppliers (Note 13) | — | (2,396 | ) | (10,999 | ) | |||||||
Other | 5,142 | 3,727 | 5,367 | |||||||||
Allowance for borrowed funds used during construction and capitalized interest | (5,505 | ) | (1,504 | ) | (2,849 | ) | ||||||
71,506 | 69,067 | 62,831 | ||||||||||
NET INCOME | 57,709 | 52,074 | 18,577 | |||||||||
Dividend Requirements and premium on redemption of preferred stock | 2,341 | 3,900 | 3,900 | |||||||||
Earnings applicable to common stock | $ | 55,368 | $ | 48,174 | $ | 14,677 | ||||||
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in Thousands)
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
NET INCOME | $ | 57,709 | $ | 52,074 | $ | 18,577 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||||||||||
Change in market value of risk management assets and liabilities as of December 31 (net of taxes of $370 and ($323) in 2005 and 2004, respectively) | — | (686 | ) | 600 | ||||||||
Minimum pension liability adjustment (net of taxes of ($462), $632 and $65 in 2006, 2005 and 2004, respectively) | 861 | (1,173 | ) | (123 | ) | |||||||
OTHER COMPREHENSIVE INCOME (LOSS) | 861 | (1,859 | ) | 477 | ||||||||
COMPREHENSIVE INCOME | $ | 58,570 | $ | 50,215 | $ | 19,054 | ||||||
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CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER’S EQUITY
(Dollars in Thousands)
December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Common Stock: | ||||||||||||
Balance at Beginning of Year and End of Year | $ | 4 | $ | 4 | $ | 4 | ||||||
Other Paid-In Capital: | ||||||||||||
Balance at Beginning of Year | 810,103 | 810,103 | 713,633 | |||||||||
Transfer of Goodwill (Note 19) | 18,888 | — | 96,470 | |||||||||
Transfer of pension assets | 31,462 | — | — | |||||||||
Capital infusion from parent | 75,000 | — | — | |||||||||
Balance at End of Year | 935,453 | 810,103 | 810,103 | |||||||||
Retained Earnings (Deficit): | ||||||||||||
Balance at Beginning of Year | (80,538 | ) | (104,779 | ) | (119,456 | ) | ||||||
Income (Loss) from continuing operations before preferred dividends | 57,709 | 52,074 | 18,577 | |||||||||
Preferred stock redemption | (1,366 | ) | — | — | ||||||||
Preferred stock dividends declared | (975 | ) | (3,900 | ) | (3,900 | ) | ||||||
Common stock dividends declared | (24,619 | ) | (23,933 | ) | — | |||||||
Balance at End of Year | (49,789 | ) | (80,538 | ) | (104,779 | ) | ||||||
Accumulated Other Comprehensive Income (Loss): | ||||||||||||
Balance at Beginning of Year | (1,792 | ) | 67 | (410 | ) | |||||||
Change in market value of risk management assets and liabilities as of December 31 (Net of taxes of $370 and ($323) in 2005 and 2004, respectively) | — | (686 | ) | 600 | ||||||||
Minimum pension liability adjustment (Net of taxes of ($462), $632 and $65 in 2006, 2005 and 2004, respectively) | 861 | (1,173 | ) | (123 | ) | |||||||
Balance at End of Year | (931 | ) | (1,792 | ) | 67 | |||||||
Total Common Shareholder’s Equity at End of Year | $ | 884,737 | $ | 727,777 | $ | 705,395 | ||||||
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
For the Year Ended December 31 | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net Income | $ | 57,709 | $ | 52,074 | $ | 18,577 | ||||||
Non-cash items included in net income (loss): | ||||||||||||
Depreciation and amortization | 87,279 | 90,569 | 86,806 | |||||||||
Deferred taxes and deferred investment tax credit | (39,361 | ) | 209 | 11,640 | ||||||||
AFUDC | (6,471 | ) | (3,143 | ) | (4,567 | ) | ||||||
Amortization of deferred energy costs — electric | 46,322 | 56,750 | 36,653 | |||||||||
Amortization of deferred energy costs — gas | 6,234 | 1,446 | 3,241 | |||||||||
Plant costs disallowed | — | — | 47,092 | |||||||||
Other | 16,935 | 318 | 474 | |||||||||
Changes in certain assets and liabilities: | ||||||||||||
Accounts receivable | 36,171 | (11,631 | ) | (19,677 | ) | |||||||
Deferral of energy costs – electric | (4,755 | ) | (54,765 | ) | (34,598 | ) | ||||||
Deferral of energy costs – gas | 436 | (2,519 | ) | (7,480 | ) | |||||||
Deferral of energy costs – terminated suppliers | 4,845 | 62,921 | — | |||||||||
Materials, supplies and fuel | (1,382 | ) | (10,272 | ) | 7,113 | |||||||
Other current assets | 18,204 | 3,106 | (10,086 | ) | ||||||||
Accounts payable | 19,670 | 11,573 | 2,153 | |||||||||
Payment to terminating supplier | (27,958 | ) | — | (10,818 | ) | |||||||
Proceeds from claim on terminating supplier | 14,974 | — | — | |||||||||
Other current liabilities | (925 | ) | (48,603 | ) | 5,567 | |||||||
Risk Management assets and liabilities | (3,731 | ) | (88 | ) | 4,033 | |||||||
Other assets | (220 | ) | — | — | ||||||||
Other liabilities | 6,461 | 12,186 | (8,844 | ) | ||||||||
Net Cash from Operating Activities | 230,437 | 160,131 | 127,279 | |||||||||
CASH FLOWS (USED BY) INVESTING ACTIVITIES: | ||||||||||||
Additions to utility plant | (315,578 | ) | (139,646 | ) | (131,927 | ) | ||||||
AFUDC | 6,471 | 3,143 | 4,567 | |||||||||
Customer advances for construction | 6,931 | 8,545 | 8,130 | |||||||||
Contributions in aid of construction | 17,551 | 14,807 | 15,754 | |||||||||
Investments in subsidiaries and other property — net | 233 | 157 | (82 | ) | ||||||||
Net Cash used by Investing Activities | (284,392 | ) | (112,994 | ) | (103,558 | ) | ||||||
CASH FLOWS FROM (USED BY) FINANCING ACTIVITIES: | ||||||||||||
Decrease in short-term borrowings | — | — | (25,000 | ) | ||||||||
Change in restricted cash and investments | 3,612 | 2,034 | 3,130 | |||||||||
Proceeds from issuance of long-term debt | 804,157 | — | 100,000 | |||||||||
Retirement of long-term debt | (742,514 | ) | (2,504 | ) | (99,491 | ) | ||||||
Redemption of preferred stock | (51,366 | ) | — | — | ||||||||
Investment by parent company | 75,000 | — | — | |||||||||
Dividends paid | (19,827 | ) | (27,833 | ) | (3,900 | ) | ||||||
Net Cash from (used by) Financing Activities | 69,062 | (28,303 | ) | (25,261 | ) | |||||||
Net Increase (Decrease) in Cash and Cash Equivalents: | 15,107 | 18,834 | (1,540 | ) | ||||||||
Beginning Balance in Cash and Cash Equivalents: | 38,153 | 19,319 | 20,859 | |||||||||
Ending Balance in Cash and Cash Equivalents | $ | 53,260 | $ | 38,153 | $ | 19,319 | ||||||
Supplemental Disclosures of Cash Flow Information: | ||||||||||||
Cash paid during period for: | ||||||||||||
Interest | $ | 83,327 | $ | 71,496 | $ | 77,529 | ||||||
Income taxes | $ | 12 | $ | — | $ | — | ||||||
Noncash Activities: | ||||||||||||
Transfer of Regulatory Asset (Note 18) | $ | 18,888 | $ | — | $ | 96,470 |
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CONSOLIDATED STATEMENTS OF CAPITALIZATION
(Dollars in Thousands, Except Per Share Amounts)
December 31 | ||||||||
2006 | 2005 | |||||||
Common Shareholder’s Equity: | ||||||||
Common stock, $3.75 par value, 20,000,000 shares authorized, 1,000 shares issued and outstanding | $ | 4 | $ | 4 | ||||
Other paid-in capital | 935,453 | 810,103 | ||||||
Retained Deficit | (49,789 | ) | (80,538 | ) | ||||
Accumulated other comprehensive Income (Loss) | (931 | ) | (1,792 | ) | ||||
Total Common Shareholder’s Equity | 884,737 | 727,777 | ||||||
Cumulative Preferred Stock: | ||||||||
Not subject to mandatory redemption; 2,000,000 shares outstanding; $25 stated value | — | 50,000 | ||||||
SPPC Class A Series 1; $1.95 dividend | ||||||||
Long-Term Debt: | ||||||||
Secured Debt | ||||||||
Debt Secured by First Mortgage Bonds | ||||||||
Revenue Bonds | ||||||||
6.35% Series 1992B due 2012 | — | 1,000 | ||||||
6.55% Series 1987 due 2013 | — | 39,500 | ||||||
6.30% Series 1987 due 2014 | — | 45,000 | ||||||
6.65% Series 1987 due 2017 | — | 92,500 | ||||||
6.55% Series 1990 due 2020 | — | 20,000 | ||||||
6.30% Series 1992A due 2022 | — | 10,250 | ||||||
5.90% Series 1993A due 2023 | — | 9,800 | ||||||
5.90% Series 1993B due 2023 | — | 30,000 | ||||||
6.70% Series 1992 due 2032 | — | 21,200 | ||||||
Medium Term Notes | ||||||||
6.62% to 6.83% Series C due 2006 | — | 50,000 | ||||||
6.95% to 8.61% Series A due 2022 | — | 110,000 | ||||||
7.10% to 7.14% Series B due 2023 | — | 58,000 | ||||||
Subtotal | — | 487,250 | ||||||
Debt Secured by General and Refunding Mortgage Securities | ||||||||
8.00% Series A due 2008 | 320,000 | 320,000 | ||||||
6.25% Series H due 2012 | 100,000 | 100,000 | ||||||
6.00% Series M due 2016 | 300,000 | — | ||||||
5.00% Series 2001 due 2036 | 80,000 | 80,000 | ||||||
Subtotal | 800,000 | 500,000 | ||||||
Variable Rate Notes | ||||||||
PCRB Series 2006 due 2029 | 49,750 | — | ||||||
PCRB Series 2006A due 2031 | 58,700 | — | ||||||
PCRB Series 2006B due 2036 | 75,000 | — | ||||||
PCRB Series 2006C due 2036 | 84,800 | — | ||||||
Subtotal | 268,250 | — | ||||||
Unsecured Debt | ||||||||
Unamortized bond premium and discount, net | (392 | ) | (666 | ) | ||||
Current maturities and sinking fund requirements | (2,400 | ) | (52,400 | ) | ||||
Other, excluding current portion | 5,400 | 7,620 | ||||||
Total Long-Term Debt | 1,070,858 | 941,804 | ||||||
TOTAL CAPITALIZATION | $ | 1,955,595 | $ | 1,719,581 | ||||
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117
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OTHER REGULATORY ASSETS AND LIABILITIES
AS OF DECEMBER 31, 2006 | As of | ||||||||||||||||||||||
Remaining | Receiving Regulatory Treatment | Pending | December | ||||||||||||||||||||
(dollars in thousands) | Amortization | Earning a | Not Earning | Regulatory | 2006 | 31, 2005 | |||||||||||||||||
DESCRIPTION | Period | Return(1) | a Return | Treatment | Total | Total | |||||||||||||||||
Regulatory Assets | |||||||||||||||||||||||
Loss on reacquired debt | Term of Related Debt | $ | 87,154 | $ | — | $ | — | $ | 87,154 | $ | 57,804 | ||||||||||||
Lenzie | 52,456 | 52,456 | — | ||||||||||||||||||||
Mohave plant and deferred costs | 2026 | 21,582 | — | (3,747 | ) | 17,835 | 28,280 | ||||||||||||||||
Clark Units 1-3 | Various thru 2015 | 11,545 | — | 5,190 | 16,735 | 13,136 | |||||||||||||||||
Piñon Pine | Various thru 2029 | 35,236 | 6,155 | 610 | 42,001 | 43,502 | |||||||||||||||||
Plant assets | Various thru 2031 | 2,876 | — | — | 2,876 | 3,058 | |||||||||||||||||
Asset Retirement Obligations | — | 16,112 | 16,112 | 14,904 | |||||||||||||||||||
Nevada divestiture costs | 2012 | 23,983 | — | — | 23,983 | 28,497 | |||||||||||||||||
Merger transition/transaction costs | 2016 | — | 28,916 | — | 28,916 | 32,569 | |||||||||||||||||
Merger severance/relocation | 2016 | — | 15,884 | — | 15,884 | 17,951 | |||||||||||||||||
Merger goodwill | 2046 | — | 293,199 | — | 293,199 | 281,739 | |||||||||||||||||
California restructure costs | Thru 2009 | 979 | 880 | — | 1,859 | 2,459 | |||||||||||||||||
Conservation programs | Thru 2012 | 2,574 | — | 50,701 | 53,275 | 24,144 | |||||||||||||||||
Legal Costs | — | — | 8,376 | 8,376 | 9,558 | ||||||||||||||||||
Other costs | Thru 2017 | 1,708 | 2,363 | 3,892 | 7,963 | 10,544 | |||||||||||||||||
Subtotal | $ | 187,637 | $ | 347,397 | $ | 133,590 | $ | 668,624 | $ | 568,145 | |||||||||||||
Pensions-SFAS 158 | — | — | 223,218 | 223,218 | — | ||||||||||||||||||
Total regulatory assets | $ | 187,637 | $ | 347,397 | $ | 356,808 | $ | 891,842 | $ | 568,145 | |||||||||||||
Regulatory Liabilities | |||||||||||||||||||||||
Cost of Removal | Various | $ | 283,641 | $ | — | $ | — | $ | 283,641 | $ | 246,960 | ||||||||||||
Gain on Property Sales | Various thru 2008 | 4,531 | — | — | 4,531 | 11,285 | |||||||||||||||||
SO2 Allowances | Various thru 2012 | 745 | — | — | 745 | 536 | |||||||||||||||||
Gas Transportation Contract | — | — | — | — | 17,542 | ||||||||||||||||||
Plant liability | 2008 | 1,038 | — | — | 1,038 | 2,049 | |||||||||||||||||
Impact Charge | 2008 | 2,722 | — | — | 2,722 | 6,066 | |||||||||||||||||
Depreciation-Customer Advances | — | — | 8,775 | 8,775 | — | ||||||||||||||||||
Other | 2008 | — | 326 | 125 | 451 | — | |||||||||||||||||
Total regulatory liabilities | $ | 292,677 | $ | 326 | $ | 8,900 | $ | 301,903 | $ | 284,438 | |||||||||||||
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OTHER REGULATORY ASSETS AND LIABILITIES
AS OF DECEMBER 31, 2006 | As of | ||||||||||||||||||||||
Remaining | Receiving Regulatory Treatment | Pending | December | ||||||||||||||||||||
(dollars in thousands) | Amortization | Earning a | Not Earning | Regulatory | 2006 | 31, 2005 | |||||||||||||||||
DESCRIPTION | Period | Return (1) | a Return | Treatment | Total | Total | |||||||||||||||||
Regulatory Assets | |||||||||||||||||||||||
Loss on reacquired debt | Term of Related Debt | $ | 60,026 | $ | — | $ | — | $ | 60,026 | $ | 39,392 | ||||||||||||
Lenzie | — | — | 52,456 | 52,456 | — | ||||||||||||||||||
Mohave plant and deferred costs | 2026 | 21,582 | — | (3,747 | ) | 17,835 | 28,280 | ||||||||||||||||
Clark Units 1-3 | Various thru 2015 | 11,545 | — | 5,190 | 16,735 | 13,136 | |||||||||||||||||
Asset Retirement Obligations | — | — | 11,081 | 11,081 | 10,204 | ||||||||||||||||||
Nevada divestiture costs | 2012 | 14,665 | — | — | 14,665 | 17,459 | |||||||||||||||||
Merger transition/transaction costs | 2014 | — | 20,237 | — | 20,237 | 22,838 | |||||||||||||||||
Merger severance/relocation | 2014 | — | 7,397 | — | 7,397 | 8,417 | |||||||||||||||||
Merger Goodwill | 2044 | — | 184,386 | — | 184,386 | 189,088 | |||||||||||||||||
Conservation programs | — | — | 42,636 | 42,636 | 19,048 | ||||||||||||||||||
Legal Costs | — | — | 8,376 | 8,376 | 9,558 | ||||||||||||||||||
Other costs | 2008 | 649 | — | 3,890 | 4,539 | 5,147 | |||||||||||||||||
Subtotal | $ | 108,467 | $ | 212,020 | $ | 119,882 | $ | 440,369 | $ | 362,567 | |||||||||||||
Pensions-SFAS 158 | — | — | $ | 113,646 | $ | 113,646 | — | ||||||||||||||||
Total regulatory assets | $ | 108,467 | $ | 212,020 | $ | 233,528 | $ | 554,015 | $ | 362,567 | |||||||||||||
Regulatory Liabilities | |||||||||||||||||||||||
Cost of Removal | Various | $ | 162,196 | $ | — | $ | — | $ | 162,196 | $ | 144,164 | ||||||||||||
Gain on Property Sales | Various thru 2008 | 4,531 | — | — | 4,531 | 11,285 | |||||||||||||||||
SO2 Allowances | Various thru 2012 | 745 | — | — | 745 | 536 | |||||||||||||||||
Gas Transportation Contract | — | — | — | — | 17,542 | ||||||||||||||||||
Depreciation-Customer Advances | — | — | 3,701 | 3,701 | — | ||||||||||||||||||
Other | — | — | 125 | 125 | — | ||||||||||||||||||
Total regulatory liabilities | $ | 167,472 | $ | — | $ | 3,826 | $ | 171,298 | $ | 173,527 | |||||||||||||
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OTHER REGULATORY ASSETS AND LIABILITIES
AS OF DECEMBER 31, 2006 | As of | |||||||||||||||||||||
Remaining | Receiving Regulatory Treatment | Pending | December | |||||||||||||||||||
(dollars in thousands) | Amortization | Earning a | Not Earning | Regulatory | 2006 | 31, 2005 | ||||||||||||||||
DESCRIPTION | Period | Return (1) | a Return | Treatment | Total | Total | ||||||||||||||||
Regulatory assets | ||||||||||||||||||||||
Loss on reacquired debt | Term of Related Debt | $ | 27,128 | $ | — | $ | — | $ | 27,128 | $ | 18,412 | |||||||||||
Piñon Pine | Various thru 2029 | 35,236 | 6,155 | 610 | 42,001 | 43,502 | ||||||||||||||||
Plant assets | Various thru 2031 | 2,876 | — | — | 2,876 | 3,058 | ||||||||||||||||
Asset Retirement Obligations | — | — | 5,031 | 5,031 | 4,700 | |||||||||||||||||
Nevada divestiture costs | 2012 | 9,318 | — | — | 9,318 | 11,038 | ||||||||||||||||
Merger transition/transaction costs | 2016 | — | 8,679 | — | 8,679 | 9,731 | ||||||||||||||||
Merger severance/relocation | 2016 | — | 8,487 | — | 8,487 | 9,534 | ||||||||||||||||
Merger goodwill | 2046 | — | 108,813 | — | 108,813 | 92,651 | ||||||||||||||||
California Restructure Costs | Thru 2009 | 979 | 880 | — | 1,859 | 2,459 | ||||||||||||||||
Conservation Programs | Thru 2012 | 2,574 | — | 8,065 | 10,639 | 5,096 | ||||||||||||||||
Other costs | Various thru 2017 | 1,059 | 2,363 | 2 | 3,424 | 5,397 | ||||||||||||||||
Subtotal | $ | 79,170 | $ | 135,377 | $ | 13,708 | $ | 228,255 | $ | 205,578 | ||||||||||||
Pensions-SFAS 158 | — | — | 106,666 | 106,666 | — | |||||||||||||||||
Total regulatory assets | $ | 79,170 | $ | 135,377 | $ | 120,374 | $ | 334,921 | $ | 205,578 | ||||||||||||
Regulatory Liabilities | ||||||||||||||||||||||
Cost of Removal | Various | $ | 121,445 | $ | — | $ | — | $ | 121,445 | $ | 102,796 | |||||||||||
Plant liability | 2008 | 1,038 | — | — | 1,038 | 2,049 | ||||||||||||||||
Impact Charge | 2008 | 2,722 | — | — | 2,722 | 6,066 | ||||||||||||||||
Depreciation-Customer Advances | — | — | 5,074 | 5,074 | — | |||||||||||||||||
Other | 2008 | — | 326 | — | 326 | — | ||||||||||||||||
Total regulatory liabilities | $ | 125,205 | $ | 326 | $ | 5,074 | $ | 130,605 | $ | 110,911 | ||||||||||||
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December 31, 2006 | ||||||||||||||||||
NPC | SPPC | SPPC | SPR | |||||||||||||||
Description | Electric | Electric | Gas | Total | ||||||||||||||
Unamortized balances approved for collection in current rates | ||||||||||||||||||
Electric — NPC Period 1 | (Reinstatement of deferred energy)(1) | $ | 178,825 | $ | — | $ | — | $ | 178,825 | |||||||||
Electric — NPC Period 3 | (effective 4/05, 2 years) | (4,067 | ) | — | — | (4,067 | ) | |||||||||||
Electric — SPPC Period 3 | (effective 6/05, 27 months) | — | 6,034 | — | 6,034 | |||||||||||||
Electric — NPC Period 4 | (effective 4/05, 2 years) | 6,347 | — | — | 6,347 | |||||||||||||
Electric — NPC Period 5 | (effective 8/06, 2 years) | 153,720 | — | — | 153,720 | |||||||||||||
Electric — SPPC Period 5 | (effective 7/06, 2 years) | — | 27,657 | — | 27,657 | |||||||||||||
Nat. Gas — Per 6, LPG — Per 5 | (effective 12/06, 1 year) | — | — | 902 | 902 | |||||||||||||
Balances pending PUCN approval | 72,280 | 16,220 | — | 88,500 | ||||||||||||||
Cumulative CPUC Balance | — | 9,956 | — | 9,956 | ||||||||||||||
Balances accrued since end of periods submitted for PUCN approval | 1,693 | (14,479 | ) | (1,014 | ) | (13,800 | ) | |||||||||||
Claims for terminated supply contracts(2) | 80,095 | 16,265 | — | 96,360 | ||||||||||||||
Total | $ | 488,893 | $ | 61,653 | $ | (112 | )(3) | $ | 550,434 | |||||||||
Current Assets | ||||||||||||||||||
Deferred energy costs — electric | $ | 129,304 | $ | 38,956 | $ | — | $ | 168,260 | ||||||||||
Deferred Assets | ||||||||||||||||||
Deferred energy costs — electric | 359,589 | 22,697 | — | 382,286 | ||||||||||||||
Current Liabilities Deferred energy costs — gas | — | — | (112 | ) | (112 | ) | ||||||||||||
Total | $ | 488,893 | $ | 61,653 | $ | (112 | ) | $ | 550,434 | |||||||||
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December 31, 2005 | ||||||||||||||||||
NPC | SPPC | SPPC | SPR | |||||||||||||||
Description | Electric | Electric | Gas | Total | ||||||||||||||
Unamortized balances approved for collection in current rates | ||||||||||||||||||
Electric — NPC Period 2 | (effective 5/03, 3 years) | $ | (1,199 | ) | $ | — | $ | — | $ | (1,199 | ) | |||||||
Electric — NPC Period 3 | (effective 4/05, 2 years) | 48,564 | — | — | 48,564 | |||||||||||||
Electric — SPPC Period 3 | (effective 6/05, 27 months) | — | 23,208 | — | 23,208 | |||||||||||||
Electric — NPC Period 4 | (effective 4/05, 2 years) | 71,490 | — | — | 71,490 | |||||||||||||
Electric — SPPC Period 4 | (effective 6/05, 1 year) | — | 9,101 | — | 9,101 | |||||||||||||
Natural Gas — Period 5 | (effective 11/05, 1 year) | — | — | 4,454 | 4,454 | |||||||||||||
LPG Gas Period 3 | (effective 11/04, 2 years) | — | — | 36 | 36 | |||||||||||||
LPG Gas Period 4 | (effective 11/05, 1 year) | — | — | 130 | 130 | |||||||||||||
Balances pending PUCN approval | 171,447 | 41,180 | — | 212,627 | ||||||||||||||
Cumulative CPUC Balance | — | 6,699 | — | 6,699 | ||||||||||||||
Balances accrued since end of periods submitted for PUCN approval | 26,647 | 6,768 | 2,050 | 35,465 | ||||||||||||||
Claims for terminated supply contracts(2) | 83,993 | 21,111 | — | 105,104 | ||||||||||||||
Total | $ | 400,942 | $ | 108,067 | $ | 6,670 | $ | 515,679 | ||||||||||
Current Assets | ||||||||||||||||||
Deferred energy costs — electric | $ | 186,355 | $ | 67,342 | $ | — | $ | 253,697 | ||||||||||
Deferred energy costs — gas | — | — | 5,825 | 5,825 | ||||||||||||||
Deferred Assets | ||||||||||||||||||
Deferred energy costs — electric | 214,587 | 40,725 | — | 255,312 | ||||||||||||||
Deferred energy costs — gas | — | — | 845 | 845 | ||||||||||||||
Total | $ | 400,942 | $ | 108,067 | $ | 6,670 | $ | 515,679 | ||||||||||
(1) | Amount not in current rates. As discussed in Note 13, Commitments and Contingencies, Nevada Power Company 2001 Deferred Energy Case. | |
(2) | Amounts related to claims for terminated supply contracts are discussed in Note 13, Commitments and Contingencies. | |
(3) | Credits represent over-collections, that is, the extent to which gas or fuel and purchased power costs recovered through rates exceed actual gas or fuel and purchased power costs |
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Adjustments to | Regulatory | |||||||||||||||
Before | Adopt SFAS | Accounting | Balance after | |||||||||||||
Adoption | 158 | Adjustments | Adoption | |||||||||||||
ASSETS | ||||||||||||||||
Non-current Benefit Asset | $ | 55,921 | $ | (55,921 | ) | $ | — | $ | — | |||||||
Regulatory Asset | $ | — | $ | — | $ | 114,261 | $ | 114,261 | ||||||||
LIABILITIES | ||||||||||||||||
Current Benefit Liability | $ | — | $ | (1,482 | ) | $ | — | $ | (1,482 | ) | ||||||
Non-current Benefit Liability | $ | (9,809 | ) | $ | (99,454 | ) | $ | — | $ | (109,263 | ) | |||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||
Accumulated Other Comprehensive (Income) Loss | $ | (46,112 | ) | $ | 156,857 | $ | (114,261 | ) | $ | (3,516 | ) |
Adjustments to | Regulatory | |||||||||||||||
Before | Adopt SFAS | Accounting | Balance after | |||||||||||||
Adoption | 158 | Adjustment | Adoption | |||||||||||||
ASSETS | ||||||||||||||||
Non-current Benefit Asset | $ | 10,182 | $ | (10,182 | ) | $ | — | $ | — | |||||||
Regulatory Asset | $ | — | $ | — | $ | 108,956 | $ | 108,956 | ||||||||
LIABILITIES | ||||||||||||||||
Non-current Benefit Liability | $ | (52,778 | ) | $ | (56,178 | ) | $ | — | $ | (108,956 | ) | |||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||
Accumulated Other Comprehensive (Income) Loss | $ | 42,596 | $ | 66,360 | $ | (108,956 | ) | $ | — |
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NPC | SPPC | Total | Reconciling | |||||||||||||||||||||||||
December 31, 2006 | Electric | Electric | Electric | Gas | All Other | Eliminations | Consolidated | |||||||||||||||||||||
Operating Revenues | $ | 2,124,081 | $ | 1,020,162 | 3,144,243 | $ | 210,068 | $ | 1,639 | — | $ | 3,355,950 | ||||||||||||||||
Operating income | 351,272 | 108,908 | 460,180 | 11,109 | 17,508 | — | 488,797 | |||||||||||||||||||||
Operating income taxes | 91,781 | 20,020 | 111,801 | 3,550 | (23,780 | ) | — | 91,571 | ||||||||||||||||||||
Depreciation | 141,585 | 79,580 | 221,165 | 7,699 | 11 | — | 228,875 | |||||||||||||||||||||
Interest expense on long term debt | 171,188 | 66,416 | 237,604 | 5,453 | 51,431 | — | 294,488 | |||||||||||||||||||||
Assets | 5,987,515 | 2,476,483 | 8,463,998 | 275,294 | 36,724 | 56,060 | 8,832,076 | |||||||||||||||||||||
Capital expenditures | 670,441 | 282,641 | 953,082 | 32,937 | — | — | 986,019 |
NPC | SPPC | Total | Reconciling | |||||||||||||||||||||||||
December 31, 2005 | Electric | Electric | Electric | Gas | All Other | Eliminations | Consolidated | |||||||||||||||||||||
Operating Revenues | $ | 1,883,267 | $ | 967,427 | $ | 2,850,694 | $ | 178,270 | $ | 1,278 | — | $ | 3,030,242 | |||||||||||||||
Operating income | 228,827 | 107,213 | 336,040 | 9,091 | 13,547 | — | 358,678 | |||||||||||||||||||||
Operating income taxes | 46,425 | 24,209 | 70,634 | 1,829 | (33,278 | ) | — | 39,185 | ||||||||||||||||||||
Depreciation | 124,098 | 82,676 | 206,774 | 7,893 | (5 | ) | — | 214,662 | ||||||||||||||||||||
Interest expense on long term debt | 159,106 | 63,040 | 222,146 | 6,200 | 74,322 | — | 302,668 | |||||||||||||||||||||
Assets | 5,173,921 | 2,218,938 | 7,392,859 | 245,707 | 150,324 | 81,656 | 7,870,546 | |||||||||||||||||||||
Capital expenditures | 546,748 | 121,767 | 668,515 | 17,879 | — | — | 686,394 |
NPC | SPPC | Total | Reconciling | |||||||||||||||||||||||||
December 31, 2004 | Electric | Electric | Electric | Gas | All Other | Eliminations | Consolidated | |||||||||||||||||||||
Operating Revenues | $ | 1,784,092 | $ | 881,908 | $ | 2,666,000 | $ | 153,752 | $ | 5,044 | — | $ | 2,824,796 | |||||||||||||||
Operating income | 216,490 | 103,513 | 320,003 | 7,732 | 6,123 | — | 333,858 | |||||||||||||||||||||
Operating income taxes | 45,135 | 12,740 | 57,875 | 2,238 | (37,374 | ) | — | 22,739 | ||||||||||||||||||||
Depreciation | 118,841 | 79,298 | 198,139 | 7,508 | 275 | — | 205,922 | |||||||||||||||||||||
Interest expense on long term debt | 152,764 | 64,729 | 217,493 | 6,583 | 89,229 | — | 313,305 | |||||||||||||||||||||
Assets | 4,883,540 | 2,226,949 | 7,110,489 | 232,092 | 120,607 | 65,279 | 7,528,467 | |||||||||||||||||||||
Capital expenditures | 482,484 | 117,329 | 599,813 | 14,598 | — | — | 614,411 |
2006 | 2005 | 2004 | ||||||||||
Cash | $ | 53,260 | $ | 53,024 | $ | 35,783 | ||||||
Other regulatory assets | — | 19,265 | 21,124 | |||||||||
Deferred charges-other | 2,800 | 9,367 | 8,372 | |||||||||
$ | 56,060 | $ | 81,656 | $ | 65,279 | |||||||
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• | Increase annual general revenues by $172.4 million which is approximately an 8% increase | ||
• | Set the Return on Equity and Rate of Return at 11.40% and 9.41%, respectively | ||
• | Recover 100% of the amortization of the 1999 NPC/SPPC merger costs rather than the 80% recovery that is currently in general rates | ||
• | Implement the PUCN’s previous orders regarding incentive ratemaking for the Chuck Lenzie Generating Station | ||
• | Implement new depreciation rates |
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• | recovery of $147.6 million, with a carrying charge, and a $48.1 million disallowance; | ||
• | a three-year amortization of the balance commencing on May 19, 2003; | ||
• | a reduction in the Base Tariff Energy Rate (BTER) to an effective non-residential rate of $0.04322 per kWh, and an effective residential rate of $0.04186 per kWh. |
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• | Electric general revenue increase: $27 million or 3.4% effective May 1, 2006 | ||
• | Gas general revenue increase: $8.3 million or 5.4%, effective May 1, 2006 | ||
• | Electric Return on Equity and Rate of Return: 11.4% and 9.27% respectively | ||
• | Gas Return on Equity and Rate of Return: 11.4% and 8.29% respectively | ||
• | Approval to continue to recover an allocated amount of the 1999 NPC/SPPC merger costs from Electric customers | ||
• | Approval to recover an allocated amount of the 1999 NPC/SPPC merger costs from Gas customers | ||
• | New depreciation rates for Gas and Electric facilities |
• | Electric general revenue decrease: approximately $14 million annually or 1.5% effective May 1, 2006. | ||
• | Gas general revenue increase: $4.5 million annually or 2.3%, effective May 1, 2006. | ||
• | Electric Return on Equity and Rate of Return: 10.6% and 8.96% respectively. | ||
• | Gas Return on Equity and Rate of Return: 10.6% and 7.98% respectively. | ||
• | Approval to continue recovery of SPPC’s allocated amount of the 1999 NPC/SPPC merger costs and goodwill from Electric customers. | ||
• | Approval to recover an allocated amount of the 1999 NPC/SPPC merger costs and goodwill from Gas customers. | ||
• | New depreciation rates for Gas and Electric facilities. | ||
• | Deferred recovery of legal expenses related to the Enron purchased power contract litigation |
• | SPPC was allowed to recover a $40 million increase in annual rates. |
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• | SPPC was allowed a Return on Equity (ROE) of 10.25%, and an overall Rate of Return (ROR) of 9.26%, an improvement over SPPC’s previous ROE and ROR, which were 10.17% and 8.61%, respectively. SPPC had sought an ROE of 12.4% and ROR of 10.03%. | ||
• | The agreement accepted SPPC’s requested accounting treatment as filed in its application for purposes of recording revenues, expenses and assets with the following exception. Accounting issues common to SPPC’s general rate case and NPC’s general rate case that was decided by the PUCN in March 2004, in Docket No. 03-10001, are treated as set forth in the PUCN’s Order on NPC’s general rate case, except for merger costs. The accounting treatment for merger costs and goodwill established in the NPC decision will apply to the recovery of these costs by SPPC, except that SPPC will include in rates 100% of the costs as filed until recovery is reset by the PUCN in SPPC’s next general rate application. | ||
• | Required SPPC to file a set of recommended quality of service and customer service measurements to be used in future general rate case proceedings. In July 2004, SPPC and NPC jointly filed with the PUCN their recommended quality of service and customer service measurements. |
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December 31, | ||||||||
2006 | 2005 | |||||||
Investment in Tuscarora Gas Transmission Company (1) | $ | 590 | $ | 30,898 | ||||
Cash Value-Life Insurance | 12,891 | 13,281 | ||||||
Non-utility property of NEICO | 5,101 | 4,948 | ||||||
NVPCT-I & NVPCT-III | — | 5,841 | ||||||
Decatur/Gilmore/Cheyenne/Centennial | 4,184 | 5,179 | ||||||
Other non-utility Property | 11,559 | 22,624 | ||||||
$ | 34,325 | $ | 82,771 | |||||
(1) | Tuscarora Gas Pipeline Company (TGPC), which is wholly owned by SPR, sold its interest in Tuscarora Gas Transmission Company during December 2006 for approximately $100 million. The gain on the sale of the investment was approximately $40.9 million after taxes. |
December 31, | ||||||||
2006 | 2005 | |||||||
Cash Value-Life Insurance | $ | 12,891 | $ | 13,281 | ||||
Non-utility property of NEICO | 5,101 | 4,948 | ||||||
NVPCT–I & NVPCT-III | — | 5,841 | ||||||
Decatur/Gilmore/Cheyenne/Centennial | 4,184 | 5,179 | ||||||
$ | 22,176 | $ | 29,249 | |||||
December 31, | ||||||||
2006 | 2005 | |||||||
Non-utility Property | $ | 609 | $ | 842 | ||||
Construction | ||||||||||||||||||||
% | Plant | Accumulated | Net Plant | Work in | ||||||||||||||||
Joint Facility | Owned | in Service | Depreciation | in Service | Progress | |||||||||||||||
NPC | ||||||||||||||||||||
Navajo Facility | 11.3 | $ | 240,350 | $ | 127,507 | $ | 112,843 | $ | 562 | |||||||||||
Reid Gardner No. 4 | 32.2 | 127,970 | 79,425 | 48,545 | 7,538 | |||||||||||||||
Silverhawk | 75.0 | 235,241 | 27,097 | 208,144 | 60 | |||||||||||||||
Total NPC | $ | 603,561 | $ | 234,029 | $ | 369,532 | $ | 8,160 | ||||||||||||
SPPC | ||||||||||||||||||||
Valmy Facility | 50.0 | $ | 293,236 | $ | 171,660 | $ | 121,576 | $ | 9,132 |
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SPR Holding Co. and | ||||||||||||||||
NPC | SPPC | Other Subs. | SPR Consolidated | |||||||||||||
2007 | $ | 5,948 | $ | 2,400 | $ | — | $ | 8,348 | ||||||||
2008 | 7,068 | 322,400 | — | 329,468 | ||||||||||||
2009 | 22,138 | 80,600 | — | 102,738 | ||||||||||||
2010 | 7,843 | — | — | 7,843 | ||||||||||||
2011 | 369,734 | — | — | 369,734 | ||||||||||||
412,731 | 405,400 | — | 818,131 | |||||||||||||
Thereafter | 1,986,113 | 668,250 | 549,209 | 3,203,572 | ||||||||||||
2,398,844 | 1,073,650 | 549,209 | 4,021,703 | |||||||||||||
Unamortized Premium (Discount) Amount | (12,757 | ) | (392 | ) | 1,336 | (11,813 | ) | |||||||||
Total | $ | 2,386,087 | $ | 1,073,258 | $ | 550,545 | $ | 4,009,890 | ||||||||
• | $39.5 million principal amount of Clark County’s Pollution Control Refunding Revenue Bonds, Series 1992B, | ||
• | $20 million principal amount of Coconino County’s Pollution Control Revenue Bonds, Series 1996, | ||
• | $20 million principal amount of Coconino County’s Pollution Control Revenue Bonds, Series 1997B, and | ||
• | $13 million principal amount of Coconino County’s Pollution Control Revenue Bonds, Series 1995E. |
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• | fund the early redemption of $78 million aggregate principal amounts of NPC’s 7.2% Industrial Development Revenue Bonds, Series 1992 C, due 2022, | ||
• | fund the early redemption, in June 2006, of approximately $72.2 million aggregate principal amount of NPC’s 7.75% Junior Subordinated Debentures due 2038 (when the debentures were repaid upon redemption, the proceeds from the repayment were used to simultaneously redeem an equal amount of the 7.75% Cumulative Quarterly Preferred Securities of NVP Capital III, a wholly-owned subsidiary of NPC), | ||
• | repay amounts outstanding under NPC’s revolving credit facility. |
• | fund the early redemption of $35 million aggregate principal amount of NPC’s 8.50% Series Z First Mortgage Bonds due 2023 plus approximately $1 million of associated redemption premiums, | ||
• | fund the early redemption of $105 million aggregate principal amount of 6.70% Industrial Development Revenue Bonds, due 2022, and | ||
• | fund the early redemption of approximately $122.5 million aggregate principal amount of NPC’s 8.20% Junior Subordinated Debentures due 2037 (when the debentures were repaid upon redemption, the proceeds from the repayment were used to simultaneously redeem an equal amount of the 8.20% Cumulative Quarterly Preferred Securities of NVP Capital I, a wholly-owned subsidiary of NPC). |
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• | $17.5 million principal amount of 6.65% Washoe County’s Gas Facilities Refunding Revenue Bonds, Series 1987 | ||
• | $20 million principal amount of 6.55% Washoe County’s Gas Facilities Refunding Revenue Bonds, Series 1990 | ||
• | $21.2 million principal amount of 6.70% Washoe County’s Gas Facilities Refunding Revenue Bonds, Series 1992 | ||
• | $75 million principal amount of 6.65% Washoe County’s Water Facilities Refunding Revenue Bonds, Series 1987 | ||
• | $45 million principal amount of 6.30% Washoe County’s Gas and Water Facilities Refunding Revenue Bonds, Series 1987 | ||
• | $30 million principal amount of 5.90% Washoe County’s Gas and Water Facilities Refunding Revenue Bonds, Series 1993B | ||
• | $9.8 million principal amount of 5.90% Washoe County’s Water Facilities Refunding Revenue Bonds, Series 1993A | ||
• | $39.5 million principal amount of 6.55% Humboldt County’s Pollution Control Refunding Revenue Bonds, Series 1987 | ||
• | $10.25 million principal amount of 6.30% Humboldt County’s Pollution Control Refunding Revenue Bonds, Series 1992A |
• | fund the early redemption of $110 million aggregate principal amount of SPPC’s Collateralized Medium Term 6.95% to 8.61% Series A Notes due 2022; | ||
• | fund the early redemption of $58 million aggregate principal amount of SPPC’s Collateralized Medium Term 7.10% to 7.14% Series B Notes due 2023; | ||
• | pay for maturing debt of $30 million aggregate principal amount of SPPC’s Collateralized Medium Term 6.81% to 6.83% Series C Notes due 2006; | ||
• | pay for $51 million in connection with the redemption of $50 million of SPPC’s Series A Preferred Stock (two million shares of stock were redeemed at a redemption price per share of $25.683, plus accrued dividends to the redemption date of $.4875 per share); and | ||
• | pay for maturing debt of $20 million aggregate principal amount of SPPC’s Collateralized Medium Term 6.62% to 6.65% Series C Notes due 2006. |
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2007 | $ | 5,933 | ||
2008 | 7,053 | |||
2009 | 7,138 | |||
2010 | 7,843 | |||
2011 | 5,734 | |||
Thereafter | 16,778 |
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• | The following notes and credit agreement limit the amount of payments in respect of common stock that NPC may make to SPR: |
o | NPC’s 57/8 General and Refunding Mortgage Notes, Series L, due 2015, which were issued in November 2004, | ||
o | NPC’s Revolving Credit Agreement, which was amended and restated in November 2005, | ||
o | NPC’s 61/2% General and Refunding Mortgage Notes, Series I, due 2012, which were issued in April 2004, and | ||
o | NPC’s 9% General and Refunding Mortgage Notes, Series G, due 2013, which were issued in August 2003. |
o | those payments do not exceed $60 million for any one calendar year, | ||
o | those payments comply with any regulatory restrictions then applicable to NPC, and | ||
o | the ratio of consolidated cash flow to fixed charges for NPC’s most recently ended four full fiscal quarters immediately preceding the date of payment is at least 1.75 to 1. |
o | under the Series G, Series I and Series L Notes, $25 million from the date of the issuance of the Series G, Series I and Series L Notes, respectively. | ||
o | Under the Second Amended and Restated Revolving Credit Facility, $50 million from the date of the establishment of the Amended and Restated Revolving Credit Facility. |
i. | there are no defaults or events of default with respect to the Series G, I and L Notes or the Revolving NPC Credit Agreement, | ||
ii. | NPC has a ratio of consolidated cash flow to fixed charges for NPC’s most recently ended four full fiscal quarters immediately preceding the payment date of at least 2 to 1, and | ||
iii. | the total amount of such dividends is less than: |
• | the sum of 50% of NPC’s consolidated net income measured on a annual basis cumulative of all quarters from the date of issuance of the applicable series of Notes, the Bond or Credit Agreement, plus | ||
• | 100% of NPC’s aggregate net cash proceeds from contributions to its common equity capital or the issuance or sale of certain equity or convertible debt securities of NPC, plus | ||
• | the lesser of cash return of capital or the initial amount of certain restricted investments, plus | ||
• | the fair market value of NPC’s investment in certain subsidiaries. |
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• | The following notes and credit facility limit the amount of payments in respect of common stock that SPPC may make to SPR: |
o | SPPC’s Revolving Credit Agreement, which was amended and restated in November 2005, and | ||
o | SPPC’s 61/4 % General and Refunding Mortgage Notes, Series H, due 2012, which were issued in April 2004. |
o | those payments do not exceed $50 million for any one calendar year, | ||
o | those payments comply with any regulatory restrictions then applicable to SPPC, and | ||
o | the ratio of consolidated cash flow to fixed charges for SPPC’s most recently ended four full fiscal quarters immediately preceding the date of payment is at least 1.75 to 1. |
i. | there are no defaults or events of default with respect to the Series H Notes or the SPPC Revolving Credit Agreement, | ||
ii. | SPPC has a ratio of consolidated cash flow to fixed charges for SPPC’s most recently ended four full fiscal quarters immediately preceding the payment date of at least 2 to 1, and | ||
iii. | the total amount of such dividends is less than: |
• | the sum of 50% of SPPC’s consolidated net income measured on a annual basis cumulative of all quarters from the date of issuance of the Series H Notes or the establishment of the Revolving Credit Agreement, plus | ||
• | 100% of SPPC’s aggregate net cash proceeds from contributions to its common equity capital or the issuance or sale of certain equity or convertible debt securities of SPPC, plus | ||
• | the lesser of cash return of capital or the initial amount of certain restricted investments, plus | ||
• | the fair market value of SPPC’s investment in certain subsidiaries. |
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Rating Agency | ||||||||||
DBRS | Fitch | Moody’s | S&P | |||||||
SPR | Sr. Unsecured Debt | BB (low) | BB- | B1 | B | |||||
NPC | Sr. Secured Debt | BBB (low)* | BBB-* | Bal | BB+ | |||||
NPC | Sr. Unsecured Debt | Not rated | BB | Not rated | B | |||||
SPPC | Sr. Secured Debt | BBB (low)* | BBB-* | Bal | BB+ |
* | Ratings are investment grade |
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December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||||||||
(dollars in millions) | (dollars in millions) | |||||||||||||||||||||||
SPR | NPC | SPPC | SPR | NPC | SPPC | |||||||||||||||||||
Risk management assets- current | $ | 27.3 | $ | 16.4 | $ | 10.9 | $ | 50.2 | $ | 22.4 | $ | 27.8 | ||||||||||||
Risk management assets- noncurrent | $ | 7.6 | $ | 5.4 | $ | 2.2 | $ | — | $ | — | $ | — | ||||||||||||
Total risk management assets | $ | 34.9 | $ | 21.8 | $ | 13.1 | $ | 50.2 | $ | 22.4 | $ | 27.8 | ||||||||||||
Risk management liabilities- current | $ | 123.1 | $ | 84.7 | $ | 38.4 | $ | 16.6 | $ | 10.1 | $ | 6.5 | ||||||||||||
Risk management liabilities- noncurrent | $ | 10.8 | $ | 7.1 | $ | 3.7 | $ | — | $ | — | $ | — | ||||||||||||
Total risk management liabilities | $ | 133.9 | $ | 91.8 | $ | 42.1 | $ | 16.6 | $ | 10.1 | $ | 6.5 | ||||||||||||
Risk management regulatory net assets (liabilities) | $ | 122.9 | $ | 83.9 | $ | 39.0 | $ | (15.6 | ) | $ | (.6 | ) | $ | (15.0 | ) |
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2006 | 2005 | 2004 | ||||||||||
Provision (benefit) for income taxes | ||||||||||||
Current | ||||||||||||
Federal | $ | 5,914 | $ | 3,159 | $ | (161 | ) | |||||
State | — | — | — | |||||||||
Total current | 5,914 | 3,159 | (161 | ) | ||||||||
Deferred | ||||||||||||
Federal | 144,919 | 43,833 | 24,448 | |||||||||
State | 494 | 1,688 | (775 | ) | ||||||||
Total deferred | 145,413 | 45,521 | 23,673 | |||||||||
Amortization of excess deferred taxes | (2,315 | ) | (2,123 | ) | (2,196 | ) | ||||||
Amortization of investment tax credits | (3,407 | ) | (3,439 | ) | (3,266 | ) | ||||||
Total provision for income taxes | $ | 145,605 | $ | 43,118 | $ | 18,050 | ||||||
Income statement classification of provision (benefit) for income taxes | ||||||||||||
Operating income | $ | 91,571 | $ | 39,185 | $ | 22,739 | ||||||
Other income | 54,034 | 3,933 | (4,689 | ) | ||||||||
Total | $ | 145,605 | $ | 43,118 | $ | 18,050 | ||||||
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2006 | 2005 | 2004 | ||||||||||
Income from continuing operations | $ | 279,792 | $ | 86,137 | $ | 30,842 | ||||||
Total income tax expense (benefit) | 145,605 | 43,118 | 18,050 | |||||||||
Pretax income | 425,397 | 129,255 | 48,892 | |||||||||
Statutory tax rate | 35 | % | 35 | % | 35 | % | ||||||
Federal income tax expense at statutory rate | 148,889 | 45,239 | 17,112 | |||||||||
Depreciation related to difference in costs basis for tax purposes | 4,709 | 4,559 | 4,834 | |||||||||
Allowance for funds used during construction — equity | (6,379 | ) | (7,113 | ) | (2,082 | ) | ||||||
ITC amortization | (3,407 | ) | (3,439 | ) | (3,266 | ) | ||||||
Goodwill | 2,600 | 2,230 | 6,332 | |||||||||
Convertible bond mark to market and interest accretion | — | 2,132 | 2,786 | |||||||||
Pension benefit plan | 338 | (945 | ) | (3,684 | ) | |||||||
Research and development credit | (3,764 | ) | — | — | ||||||||
Other — net | 2,619 | 455 | (632 | ) | ||||||||
Provision for income taxes before effect of income tax settlements | $ | 145,605 | $ | 43,118 | $ | 21,400 | ||||||
Effective tax rate before effect of income tax settlements | 34.2 | % | 33.3 | % | 43.8 | % | ||||||
Effects of income tax settlements | — | (3,350 | ) | |||||||||
Provision for income taxes | $ | 145,605 | $ | 43,118 | $ | 18,050 | ||||||
Effective tax rate | 34.2 | % | 33.3 | % | 36.9 | % | ||||||
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2006 | 2005 | |||||||
Deferred income tax assets | ||||||||
Net operating loss and credit carryovers | $ | 227,834 | $ | 247,135 | ||||
Employee benefit plans | 71,820 | 10,190 | ||||||
Customer advances | 32,163 | 59,522 | ||||||
Gross-ups received on contribution in aid of construction and customer advances | 31,113 | 25,862 | ||||||
Deferred revenues | 1,586 | 11,303 | ||||||
Provision for contract termination | 508 | 63,427 | ||||||
Other | 22,128 | 19,765 | ||||||
Subtotal | 387,152 | 437,204 | ||||||
Deferred income tax assets associated with regulatory matters | ||||||||
Excess deferred income taxes | 15,111 | 17,426 | ||||||
Unamortized investment tax credit | 18,964 | 20,798 | ||||||
Subtotal | 34,075 | 38,224 | ||||||
Total deferred income tax assets before valuation allowance | 421,227 | 475,428 | ||||||
Valuation allowance | (732 | ) | (984 | ) | ||||
Total deferred income tax assets after valuation allowance | $ | 420,495 | $ | 474,444 | ||||
Deferred income tax liabilities | ||||||||
Excess of tax depreciation over book depreciation | $ | 540,338 | $ | 560,702 | ||||
Deferred energy | 192,653 | 180,488 | ||||||
Regulatory assets | 101,375 | 20,139 | ||||||
Other | 64,791 | 44,819 | ||||||
Subtotal | 899,157 | 806,148 | ||||||
Deferred income tax liabilities associated with regulatory matters | ||||||||
Tax benefits flowed through to customers | 263,170 | 249,262 | ||||||
Total deferred income tax liability | $ | 1,162,327 | $ | 1,055,410 | ||||
Net deferred income tax liability | $ | 512,737 | $ | 369,928 | ||||
Net deferred income tax liability associated with regulatory matters | 229,095 | 211,038 | ||||||
Total net deferred income tax liability | $ | 741,832 | $ | 580,966 | ||||
2006 | 2005 | |||||||
Tax benefits flowed through to customers | ||||||||
Related to property | $ | 106,175 | $ | 98,330 | ||||
Related to goodwill | 156,995 | 150,931 | ||||||
Regulatory tax asset | 263,170 | 249,261 | ||||||
Liberalized depreciation at rates in excess of current rates | 15,111 | 17,426 | ||||||
Unamortized investment tax credits | 18,964 | 20,798 | ||||||
Regulatory tax liability | 34,075 | 38,224 | ||||||
Net regulatory tax asset | $ | 229,095 | $ | 211,037 | ||||
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Expiration | ||||||||||||||||
Deferred Tax Asset | Valuation Allowance | Net Deferred Tax Asset | Period | |||||||||||||
Federal NOL | $ | 213,024 | $ | — | $ | 213,024 | 2020-2023 | |||||||||
State NOLs | 1,058 | — | 1,058 | 2008-2013 | ||||||||||||
Research and development credit | 3,764 | — | 3,764 | 2021-2025 | ||||||||||||
Alternative minimum tax credit | 8,696 | — | 8,696 | indefinite | ||||||||||||
Arizona coal credits | 1,292 | 732 | 560 | 2007-2011 | ||||||||||||
Total | $ | 227,834 | $ | 732 | $ | 227,102 | ||||||||||
2006 | 2005 | 2004 | ||||||||||
Provision (benefit) for income taxes | ||||||||||||
Current | ||||||||||||
Federal | $ | 4,865 | $ | 3,159 | $ | 6 | ||||||
State | — | — | — | |||||||||
Total current | 4,865 | 3,159 | 6 | |||||||||
Deferred | ||||||||||||
Federal | 114,741 | 63,873 | 58,762 | |||||||||
State | 268 | (449 | ) | (67 | ) | |||||||
Total deferred, net | 115,009 | 63,424 | 58,695 | |||||||||
Amortization of excess deferred taxes | (745 | ) | (778 | ) | (499 | ) | ||||||
Amortization of investment tax credits | (1,619 | ) | (1,810 | ) | (1,630 | ) | ||||||
Total provision for income taxes | $ | 117,510 | $ | 63,995 | $ | 56,572 | ||||||
Income statement classification of provision for income taxes | ||||||||||||
Operating income | $ | 91,781 | $ | 46,425 | $ | 45,135 | ||||||
Other income | 25,729 | 17,570 | 11,437 | |||||||||
Total | $ | 117,510 | $ | 63,995 | $ | 56,572 | ||||||
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2006 | 2005 | 2004 | ||||||||||
Income from continuing operations | $ | 224,540 | $ | 132,734 | $ | 104,312 | ||||||
Total income tax expense | 117,510 | 63,995 | 56,572 | |||||||||
Pretax income | 342,050 | 196,729 | 160,884 | |||||||||
Statutory tax rate | 35 | % | 35 | % | 35 | % | ||||||
Federal income tax expense at statutory rate | 119,718 | 68,855 | 56,309 | |||||||||
Depreciation related to difference in cost basis for tax purposes | 2,192 | 1,880 | 2,144 | |||||||||
Allowance for funds used during construction — equity | (4,114 | ) | (6,539 | ) | (1,481 | ) | ||||||
ITC amortization | (1,619 | ) | (1,810 | ) | (1,630 | ) | ||||||
Goodwill | 1,646 | 1,386 | 1,732 | |||||||||
Research and development credit | (1,666 | ) | — | — | ||||||||
Other — net | 1,353 | 223 | (502 | ) | ||||||||
Provision for income taxes before effect of income tax settlements | $ | 117,510 | $ | 63,995 | $ | 56,572 | ||||||
Effective tax rate | 34.4 | % | 32.5 | % | 35.2 | % | ||||||
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2006 | 2005 | |||||||
Deferred income tax assets | ||||||||
Net operating loss and credit carryovers | $ | 137,344 | $ | 129,420 | ||||
Employee benefit plans | 29,997 | (530 | ) | |||||
Customer advances | 21,014 | 34,320 | ||||||
Gross-ups received on contributions in aid of construction and customer advances | 21,844 | 18,424 | ||||||
Deferred revenues | 1,586 | 11,303 | ||||||
Provision for contract termination | (4 | ) | 43,737 | |||||
Other — net | 14,207 | 12,797 | ||||||
Subtotal | 225,988 | 249,471 | ||||||
Deferred income tax assets associated with regulatory matters | �� | |||||||
Excess deferred income taxes | 5,259 | 6,005 | ||||||
Unamortized investment tax credit | 8,192 | 9,063 | ||||||
Subtotal | 13,451 | 15,068 | ||||||
Total deferred income tax assets before valuation allowance | 239,439 | 264,539 | ||||||
Valuation allowance | (732 | ) | (984 | ) | ||||
Total deferred income tax assets after valuation allowance | $ | 238,707 | $ | 263,555 | ||||
Deferred income tax liabilities | ||||||||
Excess of tax depreciation over book depreciation | $ | 345,135 | $ | 349,056 | ||||
Deferred energy | 171,113 | 140,330 | ||||||
Regulatory assets | 59,092 | 11,061 | ||||||
Other — net | 43,299 | 28,169 | ||||||
Subtotal | 618,639 | 528,616 | ||||||
Deferred income tax liabilities associated with regulatory matters | ||||||||
Tax benefits flowed through to customers | 153,471 | 155,304 | ||||||
Subtotal | 153,471 | 155,304 | ||||||
Total deferred income tax liability | $ | 772,110 | $ | 683,920 | ||||
Net deferred income tax liability | $ | 393,383 | $ | 280,129 | ||||
Net deferred income tax liability associated with regulatory matters | 140,020 | 140,236 | ||||||
Total net deferred income tax liability | $ | 533,403 | $ | 420,365 | ||||
2006 | 2005 | |||||||
Tax benefits flowed through to customers | ||||||||
Related to property | $ | 55,177 | $ | 54,371 | ||||
Related to goodwill | 98,294 | 100,933 | ||||||
Regulatory tax asset | 153,471 | 155,304 | ||||||
Liberalized depreciation at rates in excess of current rates | 5,259 | 6,005 | ||||||
Unamortized investment tax credits | 8,192 | 9,063 | ||||||
Regulatory tax liability | 13,451 | 15,068 | ||||||
Net regulatory tax asset | $ | 140,020 | $ | 140,236 | ||||
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Expiration | ||||||||||||||||
Type of Carryforward | Deferred Tax Asset | Valuation Allowance | Net Deferred Tax Asset | Period | ||||||||||||
Federal NOL | $ | 125,681 | $ | — | $ | 125,681 | 2020-2023 | |||||||||
State NOL | 9 | — | 9 | 2008 | ||||||||||||
Research and development credit | 1,666 | — | 1,666 | 2021-2025 | ||||||||||||
Alternative minimum tax credit | 8,696 | — | 8,696 | indefinite | ||||||||||||
Arizona coal credits | 1,292 | 732 | 560 | 2007-2011 | ||||||||||||
Total | $ | 137,344 | $ | 732 | $ | 136,612 | ||||||||||
2006 | 2005 | 2004 | ||||||||||
Provision (benefit) for income taxes | ||||||||||||
Current | ||||||||||||
Federal | $ | 28,497 | $ | 67,291 | $ | 690 | ||||||
State | — | — | — | |||||||||
Total current | 28,497 | 67,291 | 690 | |||||||||
Deferred | ||||||||||||
Federal | 2,464 | (38,074 | ) | 3,676 | ||||||||
State | 226 | 2,136 | (708 | ) | ||||||||
Total deferred | 2,690 | (35,938 | ) | 2,968 | ||||||||
Amortization of excess deferred taxes | (1,570 | ) | (1,345 | ) | (1,697 | ) | ||||||
Amortization of investment tax credits | (1,788 | ) | (1,629 | ) | (1,636 | ) | ||||||
Total provision for income taxes | $ | 27,829 | $ | 28,379 | $ | 325 | ||||||
Income statement classification of provision (benefit) for income taxes | ||||||||||||
Operating income | $ | 23,570 | $ | 26,038 | $ | 14,978 | ||||||
Other income | 4,259 | 2,341 | (14,653 | ) | ||||||||
Total | $ | 27,829 | $ | 28,379 | $ | 325 | ||||||
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2006 | 2005 | 2004 | ||||||||||
Income from continuing operations | $ | 57,709 | $ | 52,075 | $ | 18,577 | ||||||
Total income tax expense | 27,829 | 28,379 | 325 | |||||||||
Pretax income | 85,538 | 80,454 | 18,902 | |||||||||
Statutory tax rate | 35 | % | 35 | % | 35 | % | ||||||
Federal income tax expense (benefit) at statutory rate | 29,938 | 28,159 | 6,616 | |||||||||
Depreciation related to difference in cost basis for tax purposes | 2,517 | 2,678 | 2,691 | |||||||||
Allowance for funds used during construction — equity | (2,265 | ) | (574 | ) | (601 | ) | ||||||
ITC amortization | (1,788 | ) | (1,629 | ) | (1,636 | ) | ||||||
Goodwill | 954 | 844 | 506 | |||||||||
Pension benefit plan | 338 | (945 | ) | (3,684 | ) | |||||||
Research and development credit | (2,097 | ) | — | — | ||||||||
Other — net | 232 | (154 | ) | (217 | ) | |||||||
Provision for income taxes before effect of income tax settlements | $ | 27,829 | $ | 28,379 | $ | 3,675 | ||||||
Effective tax rate before effects of income tax settlements | 32.5 | % | 35.3 | % | 19.4 | % | ||||||
Effects of income tax settlements | — | — | (3,350 | ) | ||||||||
Provision for income taxes | $ | 27,829 | $ | 28,379 | $ | 325 | ||||||
Effective tax rate | 32.5 | % | 35.3 | % | 1.7 | % | ||||||
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2006 | 2005 | |||||||
Deferred income tax assets | ||||||||
Net operating loss and credit carryforwards | $ | 6,233 | $ | 6,127 | ||||
Employee benefit plans | 39,191 | 9,997 | ||||||
Customer advances | 11,149 | 25,202 | ||||||
Gross-ups received on contributions in aid of construction and customer advances | 9,269 | 7,438 | ||||||
Provision for contract termination | 200 | 19,378 | ||||||
Other | 7,761 | 6,658 | ||||||
Subtotal | 73,803 | 74,800 | ||||||
Deferred income tax assets associated with regulatory matters | ||||||||
Excess deferred income taxes | 9,852 | 11,421 | ||||||
Unamortized investment tax credit | 10,772 | 11,735 | ||||||
Subtotal | 20,624 | 23,156 | ||||||
Total deferred income tax assets | $ | 94,427 | $ | 97,956 | ||||
Deferred income tax liabilities | ||||||||
Excess of tax depreciation over book depreciation | $ | 195,203 | $ | 211,645 | ||||
Deferred energy | 21,540 | 40,158 | ||||||
Regulatory assets | 41,346 | 9,079 | ||||||
Other | 14,035 | 9,193 | ||||||
Subtotal deferred tax liabilities | 272,124 | 270,075 | ||||||
Deferred income tax liabilities associated with regulatory matters | ||||||||
Tax benefits flowed through to customers | 109,699 | 93,957 | ||||||
Total deferred income tax liability | $ | 381,823 | $ | 364,032 | ||||
Net deferred income tax liability | $ | 198,321 | $ | 195,275 | ||||
Net deferred income tax liability associated with regulatory matters | 89,075 | 70,801 | ||||||
Total net deferred income tax liability | $ | 287,396 | $ | 266,076 | ||||
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2006 | 2005 | |||||||
Tax benefits flowed through to customers | ||||||||
Related to property | $ | 50,998 | $ | 43,959 | ||||
Related to goodwill | 58,701 | 49,998 | ||||||
Regulatory tax asset | 109,699 | 93,957 | ||||||
Liberalized depreciation at rates in excess of current rates | 9,852 | 11,421 | ||||||
Unamortized investment tax credits | 10,772 | 11,735 | ||||||
Regulatory tax liability | 20,624 | 23,156 | ||||||
Net regulatory tax asset | $ | 89,075 | $ | 70,801 | ||||
Expiration | ||||||||||||||||
Type of Carryforward | Deferred Tax Asset | Valuation Allowance | Net Deferred Tax Asset | Period | ||||||||||||
Federal NOL | $ | 5,184 | $ | — | $ | 5,184 | 2020-2023 | |||||||||
State NOL | 1,049 | — | 1,049 | 2010-2013 | ||||||||||||
Total | $ | 6,233 | $ | — | $ | 6,233 | ||||||||||
Other Postretirement | ||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Change in benefit obligations | ||||||||||||||||
Benefit obligation, beginning of year | $ | 625,451 | $ | 519,785 | $ | 179,184 | $ | 162,013 | ||||||||
Service cost | 23,033 | 18,481 | 3,533 | 3,281 | ||||||||||||
Interest cost | 36,627 | 32,248 | 10,283 | 9,858 | ||||||||||||
Plan Participants’ contributions | — | — | 1,445 | 1,180 | ||||||||||||
Actuarial loss (gain) | (18,713 | ) | 71,536 | (10,770 | ) | 10,258 | ||||||||||
Gross Benefits paid | (20,960 | ) | (20,257 | ) | (11,998 | ) | (8,112 | ) | ||||||||
less: federal subsidy on benefits paid | N/A | N/A | (515 | ) | — | |||||||||||
Plan amendments | (65 | ) | 2,935 | — | 695 | |||||||||||
Acquisitions/divestitures | — | — | — | — | ||||||||||||
Special Termination Benefits | — | 723 | — | 11 | ||||||||||||
Curtailments | — | — | — | — | ||||||||||||
Settlements | — | — | — | — | ||||||||||||
Benefit obligation, end of year | $ | 645,373 | $ | 625,451 | $ | 171,162 | $ | 179,184 | ||||||||
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Pension Benefits | Other Postretirement Benefits | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Discount rate | 6.00 | % | 5.75 | % | 6.00 | % | 5.75 | % | ||||||||
Rate of compensation increase | 4.50 | % | 4.50 | % | N/A | N/A |
Effect on the postretirement benefit obligation | 2006 | 2005 | ||||||
Effect of a 1-percentage point increase | $ | 18,823 | $ | 21,237 | ||||
Effect of a 1-percentage point decrease | $ | (15,657 | ) | $ | (17,410 | ) |
Other Postretirement | ||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Change in plan assets | ||||||||||||||||
Fair value of plan assets, beginning of year | $ | 488,766 | $ | 436,291 | $ | 53,223 | $ | 50,484 | ||||||||
Adjustment to beginning of year value | — | — | — | (1,766 | ) | |||||||||||
Actual return on plan assets | 34,424 | 55,706 | 8,015 | 386 | ||||||||||||
Employer contributions | 32,329 | 17,026 | 12,550 | 10,928 | ||||||||||||
Plan participants’ contributions | — | — | 1,445 | 1,303 | ||||||||||||
Gross benefits paid | (20,960 | ) | (20,257 | ) | (11,998 | ) | (8,112 | ) | ||||||||
Acquisitions | — | — | — | — | ||||||||||||
Special termination benefits | — | — | — | — | ||||||||||||
Settlements | — | — | — | — | ||||||||||||
Expenses paid | (299 | ) | — | — | — | |||||||||||
Fair value of plan assets, end of year | $ | 534,260 | $ | 488,766 | $ | 63,235 | $ | 53,223 | ||||||||
Target Allocation Percentage of Plan Assets at Year End | ||||||||||||
Asset Category | 2007 | 2006 | 2005 | |||||||||
Equity securities | 60 | % | 60 | % | 60 | % | ||||||
Debt securities | 39 | 39 | 39 | |||||||||
Other | 1 | 1 | 1 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
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Target Allocation Percentage of Plan Assets at Year End | ||||||||||||
Asset Category | 2007 | 2006 | 2005 | |||||||||
Equity securities | 60 | % | 60 | % | 60 | % | ||||||
Debt securities | 39 | 39 | 39 | |||||||||
Other | 1 | 1 | 1 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
Other Postretirement | |||||||||||||||||||||
Pension Benefits | Benefits | ||||||||||||||||||||
Funded Status, end of year: | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||
Fair value of plan assets | $ | 534,260 | $ | 488,767 | $ | 63,236 | $ | 53,223 | |||||||||||||
Benefit obligations | $ | (645,373 | ) | $ | (625,451 | ) | $ | (172,192 | ) | $ | (179,184 | ) | |||||||||
Funded status | $ | (111,113 | ) | $ | (136,684 | ) | $ | (108,956 | ) | $ | (125,961 | ) | |||||||||
Unrecognized net actuarial (gain)/loss | N/A | 166,157 | N/A | 77,919 | |||||||||||||||||
Unrecognized prior service (credit)/cost | N/A | 14,543 | N/A | 1,228 | |||||||||||||||||
Unrecognized net transition (asset)/obligation | N/A | — | N/A | 6,405 | |||||||||||||||||
Contribution between measurement date and fiscal year end | 368 | 15,332 | — | 4,101 | |||||||||||||||||
Amount recognized, end of year | $ | (110,745 | ) | $ | 59,348 | $ | (108,956 | ) | $ | (36,308 | ) | ||||||||||
Other Postretirement | ||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||
Amounts recognized in the statement | ||||||||||||||||
of financial position consist of: | 2006 | 2005 | 2006 | 2005 | ||||||||||||
Noncurrent asset | $ | — | N/A | $ | — | N/A | ||||||||||
Current liability | (1,482 | ) | N/A | — | N/A | |||||||||||
Noncurrent liability | (109,263 | ) | N/A | (108,956 | ) | N/A | ||||||||||
Prepaid benefit cost | N/A | $ | 75,769 | N/A | N/A | |||||||||||
Accrued benefit cost | N/A | (16,421 | ) | N/A | $ | (36,308 | ) | |||||||||
Additional minimum liability | N/A | (7,950 | ) | N/A | N/A | |||||||||||
Intangible asset | N/A | 15 | N/A | N/A | ||||||||||||
Accumulated other comprehensive income | N/A | 7,935 | N/A | N/A | ||||||||||||
Net amount recognized | $ | (110,745 | ) | $ | 59,348 | $ | (108,956 | ) | $ | (36,308 | ) | |||||
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Other Postretirement | ||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||
Amounts recognized as other | ||||||||||||||||
regulatory assets: | 2006 | 2005 | 2006 | 2005 | ||||||||||||
Net actuarial (gain)/loss | $ | 101,674 | N/A | $ | 102,413 | N/A | ||||||||||
Prior service (credit)/cost | 12,587 | N/A | 1,107 | N/A | ||||||||||||
Transition (asset)/obligation | — | N/A | 5,436 | N/A | ||||||||||||
$ | 114,261 | N/A | $ | 108,956 | N/A | |||||||||||
Other | ||||||||
Pension Benefits | Postretirement | |||||||
Benefits | ||||||||
Actuarial (gain)/loss | $ | 7,184 | $ | 3,259 | ||||
Prior service (credit)/cost | 1,629 | 122 | ||||||
Transition (asset)/obligation | — | 969 |
Projected Benefit Obligation Exceeds | Accumulated Benefit Obligation Exceeds | |||||||||||||||
the Fair Value of Plan’s Assets | the Fair Value of Plan’s Assets | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Projected benefit obligation, end of year | $ | 645,373 | $ | 625,451 | $ | 25,890 | $ | 27,225 | ||||||||
Accumulated benefit obligation, end of year | — | — | 23,768 | 24,703 | ||||||||||||
Fair value of plan assets, end of year | 534,260 | 488,766 | — | — |
Pension Benefits | Other Postretirement Benefits | |||||||||||
Company contributions | ||||||||||||
2007 (expected) | $ | 1,482 | $12,465 | |||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||
Expected Federal | ||||||||||||
Gross | Subsidy | |||||||||||
Expected benefit payments | ||||||||||||
2007 | 23,595 | 9,209 | 597 | |||||||||
2008 | 24,903 | 9,812 | 670 | |||||||||
2009 | 26,668 | 10,372 | 770 | |||||||||
2010 | 28,684 | 11,028 | 853 | |||||||||
2011 | 30,887 | 11,611 | 843 | |||||||||
2012-2016 | 196,777 | 66,337 | 4,993 |
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Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | |||||||||||||||||||
Service cost | $ | 23,033 | $ | 18,481 | $ | 17,988 | $ | 3,533 | $ | 3,281 | $ | 3,058 | ||||||||||||
Interest cost | 36,627 | 32,248 | 30,273 | 10,283 | 9,858 | 9,258 | ||||||||||||||||||
Expected return on plan assets | (40,729 | ) | (36,167 | ) | (30,632 | ) | (4,919 | ) | (3,862 | ) | (4,100 | ) | ||||||||||||
Amortization of: | ||||||||||||||||||||||||
Actuarial (gain)/loss | 9,778 | 6,454 | 8,971 | 4,614 | 3,782 | 4,129 | ||||||||||||||||||
Prior service (credit)/cost | 1,892 | 1,714 | 1,714 | 122 | 63 | 63 | ||||||||||||||||||
Transition (asset)/obligation | — | — | — | 969 | 969 | 969 | ||||||||||||||||||
Curtailment (gain)/loss | — | — | — | — | — | — | ||||||||||||||||||
Settlement (gain)/loss / Special termination charges | — | 723 | — | — | 11 | — | ||||||||||||||||||
Total net benefit cost | $ | 30,601 | $ | 23,453 | $ | 28,314 | $ | 14,602 | $ | 14,102 | $ | 13,377 | ||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | |||||||||||||||||||
Service cost | $ | 12,900 | $ | 10,328 | $ | 9,770 | $ | 1,052 | $ | 887 | $ | 798 | ||||||||||||
Interest cost | 17,466 | 15,064 | 13,824 | 2,105 | 1,977 | 1,892 | ||||||||||||||||||
Expected return on plan assets | (18,265 | ) | (16,025 | ) | (12,564 | ) | (1,079 | ) | (832 | ) | (885 | ) | ||||||||||||
Amortization of: | ||||||||||||||||||||||||
Actuarial (gain)/loss | — | — | — | 940 | 758 | 844 | ||||||||||||||||||
Prior service (credit)/cost | 1,677 | 1,499 | 1,499 | 122 | 63 | 63 | ||||||||||||||||||
Transition (asset)/obligation | 4,636 | 2,995 | 4,069 | 969 | 969 | 969 | ||||||||||||||||||
Curtailment (gain)/loss | — | — | — | — | — | — | ||||||||||||||||||
Settlement (gain)/loss / Special termination charges | — | 723 | — | — | 11 | — | ||||||||||||||||||
Total net benefit cost | $ | 18,414 | $ | 14,584 | $ | 16,598 | $ | 4,109 | $ | 3,833 | $ | 3,681 | ||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | |||||||||||||||||||
Service cost | $ | 8,989 | $ | 7,470 | $ | 7,540 | $ | 2,417 | $ | 2,264 | $ | 2,135 | ||||||||||||
Interest cost | 18,224 | 16,526 | 15,820 | 8,114 | 7,793 | 7,284 | ||||||||||||||||||
Expected return on plan assets | (21,617 | ) | (19,418 | ) | (17,558 | ) | (3,715 | ) | (2,929 | ) | (3,114 | ) | ||||||||||||
Amortization of: | ||||||||||||||||||||||||
Actuarial (gain)/loss | — | — | — | 3,646 | 2,994 | 3,252 | ||||||||||||||||||
Prior service (credit)/cost | 212 | 212 | 213 | — | — | — | ||||||||||||||||||
Transition (asset)/obligation | 4,880 | 3,320 | 4,715 | — | — | — | ||||||||||||||||||
Curtailment (gain)/loss | — | — | — | — | — | — | ||||||||||||||||||
Settlement (gain)/loss / Special termination charges | — | — | — | — | — | — | ||||||||||||||||||
Total net benefit cost | $ | 10,688 | $ | 8,110 | $ | 10,730 | $ | 10,462 | $ | 10,122 | $ | 9,557 | ||||||||||||
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Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | |||||||||||||||||||
Discount rate | 5.75 | % | 6.10 | % | 6.00 | % | 5.75 | % | 6.10 | % | 6.00 | % | ||||||||||||
Expected Return on Plan Assets | 8.25 | % | 8.25 | % | 8.50 | % | 8.25 | % | 8.25 | % | 8.50 | % | ||||||||||||
Rate of compensation increase | 4.50 | % | 4.50 | % | 4.50 | % | N/A | N/A | N/A |
One percentage point change: | 2006 | 2005 | 2004 | |||||||||
Effect on total of service and interest cost components | ||||||||||||
Effect of a 1-percentage point increase in health care trend | 1,669 | 1,872 | 1,845 | |||||||||
Effects of a 1-percentage point decrease in health care trend | (1,360 | ) | (1,503 | ) | (1,486 | ) |
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2006 | 2005 | 2004 | ||||||||||||||||||||||
Weighted- | Weighted- | Weighted- | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||||
Nonqualified Stock Options | Shares | Price | Shares | Price | Shares | Price | ||||||||||||||||||
Outstanding at beginning of year | 1,077,772 | $ | 14.38 | 1,227,950 | $ | 15.91 | 1,371,869 | $ | 16.33 | |||||||||||||||
Granted | 176,416 | $ | 13.29 | 169,036 | $ | 10.10 | 45,000 | $ | 7.29 | |||||||||||||||
Exercised | 55,000 | $ | 5.69 | 28,000 | $ | 6.83 | 18,000 | $ | 5.39 | |||||||||||||||
Forfeited | — | $ | — | 291,214 | $ | 18.73 | 170,919 | $ | 17.41 | |||||||||||||||
Outstanding at end of year | 1,199,188 | $ | 14.66 | 1,077,772 | $ | 14.38 | 1,227,950 | $ | 15.91 | |||||||||||||||
Intrinsic value of options exercised | $ | 571,190 | $ | — | $ | 147,240 | $ | — | $ | 33,920 | ||||||||||||||
Fair value of options vested | $ | 246,798 | $ | — | $ | 36,750 | $ | — | $ | 111,011 | ||||||||||||||
Options exercisable at year-end | 943,085 | $ | 15.25 | 928,368 | $ | 15.07 | 1,215,450 | $ | 15.99 | |||||||||||||||
Weighted-average grant date fair value of options granted1: | ||||||||||||||||||||||||
Average of all grants for: | ||||||||||||||||||||||||
2006 | $ | 4.82 | ||||||||||||||||||||||
2005 | $ | 5.52 | ||||||||||||||||||||||
2004 | $ | 4.96 |
(1) | The fair value of each nonqualified option has been estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants issued in 2006, 2005 and 2004: |
Average | Average | Average | ||||||||||||||
Dividend | Expected | Risk- | Average Expected | |||||||||||||
Year of Option Grant | Yield | Volatility | Free Rate of Return | Life | ||||||||||||
2006 | 0.00 | % | 27.06 | % | 4.51 | % | 6 years | |||||||||
2005 | 0.00 | % | 39.56 | % | 2.32 | % | 10 years | |||||||||
2004 | 0.00 | % | 52.60 | % | 4.79 | % | 10 years |
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted | Number | Number Vested and | ||||||||||||||||||
Average | Outstanding at | Remaining | Weighted Average | Exercisable at | ||||||||||||||||
Year of Grant | Exercise Price | 12/31/06 | Contractual Life | Exercise Price | 12/31/06 | |||||||||||||||
1997 | $ | 19.97 | 3,188 | < 1 year | $ | 19.97 | 3,188 | |||||||||||||
1998 | $ | 24.93 | 15,840 | 1 years | $ | 24.93 | 15,840 | |||||||||||||
1999 | $ | 25.35 | 36,440 | 2 years | $ | 25.35 | 36,440 | |||||||||||||
2000 | $ | 16.00 | 400,000 | 2.6 - 3 years | $ | 16.00 | 400,000 | |||||||||||||
2001 | $ | 15.08 | 151,540 | 4 - 4.9 years | $ | 15.08 | 151,540 | |||||||||||||
2002 | $ | 14.05 | 241,360 | 5 - 5.9 years | $ | 14.05 | 241,360 | |||||||||||||
2004 | $ | 7.29 | 25,000 | 7.5 years | $ | 7.29 | 25,000 | |||||||||||||
2005 | $ | 10.10 | 149,404 | 8.2 - 8.4 years | $ | 10.10 | 69,717 | |||||||||||||
2006 | $ | 13.29 | 176,416 | 9.1 years | $ | 13.29 | — | |||||||||||||
Weighted Average Remaining Contractual Life | 5.03 years | 4.12 years | ||||||||||||||||||
Intrinsic Value | $ | 3,136,677 | $ | 1,975,871 |
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2/7/2006 | 2/7/2005 | 1/16/2004 | ||||||||||
Shares Granted | 675,056 | 214,596 | 280,082 | |||||||||
Value per Share | $ | 10.03 | $ | 9.58 | $ | 7.99 |
Average | Average Risk- | Weighted | ||||||||||||||
Average | Expected | Free Rate of | Average Fair | |||||||||||||
Year | Dividend Yield | Volatility | Return | Value | ||||||||||||
2006 | 0.00 | % | 39.03 | % | 4.57 | % | $ | 13.93 |
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Average | ||||||||||||||||
Average | Average | Risk-Free | Weighted | |||||||||||||
Dividend | Expected | Rate of | Average | |||||||||||||
Year | Yield | Volatility | Return | Fair Value | ||||||||||||
2006 | 0.00 | % | 19.73 | % | 4.95 | % | $ | 2.62 | ||||||||
2005 | 0.00 | % | 35.87 | % | 2.23 | % | $ | 2.65 | ||||||||
2004 | 0.00 | % | 52.60 | % | 1.79 | % | $ | 2.24 |
Purchased Power | ||||||||||||
NPC | SPPC | SPR(1) | ||||||||||
2007 | $ | 310,988 | $ | 163,165 | $ | 462,402 | ||||||
2008 | 257,739 | 125,161 | 368,810 | |||||||||
2009 | 239,361 | 98,028 | 323,215 | |||||||||
2010 | 244,305 | 93,836 | 323,882 | |||||||||
2011 | 242,671 | 95,231 | 323,541 | |||||||||
Thereafter | 2,868,242 | 1,308,566 | 3,925,708 |
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Coal and Gas | Transportation | |||||||||||||||||||||||
NPC | SPPC | Total | NPC | SPPC | Total | |||||||||||||||||||
2007 | $ | 202,156 | $ | 127,037 | $ | 329,193 | $ | 48,045 | $ | 74,031 | $ | 122,076 | ||||||||||||
2008 | 26,019 | 26,919 | 52,938 | 36,814 | 58,099 | 94,913 | ||||||||||||||||||
2009 | 13,261 | 24,964 | 15,138 | 36,814 | 48,428 | 85,242 | ||||||||||||||||||
2010 | 10,293 | — | 10,293 | 36,814 | 48,418 | 85,232 | ||||||||||||||||||
2011 | — | — | — | 34,438 | 48,418 | 82,856 | ||||||||||||||||||
Thereafter | — | — | — | 183,550 | 361,358 | 544,908 |
Long Term Service Agreements (1) | ||||||||||||
Lenzie | Silverhawk | Total | ||||||||||
2007 | $ | 11,258 | $ | 4,721 | $ | 15,979 | ||||||
2008 | 11,258 | 2,609 | 13,867 | |||||||||
2009 | 11,258 | 13,009 | 24,267 | |||||||||
2010 | 11,258 | 10,779 | 22,037 | |||||||||
2011 | 9,062 | 3,086 | 12,148 | |||||||||
Thereafter | 90,340 | 33,443 | 123,783 |
Operating Leases | ||||||||||||
NPC | SPPC | Total | ||||||||||
2007 | $ | 6,525 | $ | 10,635 | $ | 17,160 | ||||||
2008 | 7,146 | 10,297 | 17,443 | |||||||||
2009 | 6,253 | 8,931 | 15,184 | |||||||||
2010 | 5,161 | 7,587 | 12,748 | |||||||||
2011 | 3,441 | 778 | 4,219 | |||||||||
Thereafter | 64,459 | 36,587 | 101,046 |
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Amount | Shares Outstanding | |||||||||||||||
Preferred Stock | 2006 | 2005 | 2006 | 2005 | ||||||||||||
Not subject to mandatory redemption SPPC Class A Series 1 | $ | — | $ | 50,000 | — | 2,000,000 | ||||||||||
Total Preferred Stock | $ | — | $ | 50,000 | — | 2,000,000 | ||||||||||
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Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Basic EPS | ||||||||||||
Numerator ($000) | ||||||||||||
Income from continuing operations | $ | 279,792 | $ | 86,137 | $ | 30,842 | ||||||
Gain on sale of discontinued operations | $ | — | $ | — | $ | 1,629 | ||||||
Net income applicable to common stock | $ | 277,451 | $ | 62,198 | $ | 18,310 | ||||||
Net income applicable to convertible notes | $ | — | $ | 20,039 | $ | 10,261 | ||||||
Net income used for basic calculation | $ | 277,451 | $ | 82,237 | $ | 28,571 | ||||||
Denominator | ||||||||||||
Weighted average number of common shares outstanding | 208,531,134 | 140,334,552 | 117,331,365 | |||||||||
Shares from conversion of notes | — | 45,213,762 | 65,749,110 | |||||||||
208,531,134 | 185,548,314 | 183,080,475 | ||||||||||
Per Share Amounts | ||||||||||||
Income from continuing operations | $ | 1.34 | $ | 0.46 | $ | 0.17 | ||||||
Gain on sale of discontinued operations | $ | — | $ | — | $ | 0.01 | ||||||
Net income applicable to common stock | $ | 1.33 | $ | 0.44 | $ | 0.16 | ||||||
Net income applicable to convertible notes | $ | — | $ | 0.44 | $ | 0.16 | ||||||
Diluted EPS | ||||||||||||
Numerator ($000) | ||||||||||||
Income from continuing operations | $ | 279,792 | $ | 86,137 | $ | 30,842 | ||||||
Gain on sale of discontinued operations | $ | — | $ | — | $ | 1,629 | ||||||
Net income applicable to common stock | $ | 277,451 | $ | 82,237 | $ | 28,571 | ||||||
Denominator (1) | ||||||||||||
Weighted average number of shares outstanding before dilution | 208,531,134 | 140,334,552 | 117,331,365 | |||||||||
Stock options | 91,119 | 47,255 | 24,949 | |||||||||
Executive long term incentive plan – restricted | 113,456 | 187,810 | 242,679 | |||||||||
Non-Employee Director stock plan | 30,754 | 21,193 | 15,028 | |||||||||
Employee stock purchase plan | 3,345 | 3,925 | 15,028 | |||||||||
Performance Shares | 251,088 | 124,007 | 22,144 | |||||||||
Convertible Stock | — | 45,213,762 | 65,749,110 | |||||||||
209,020,896 | 185,932,504 | 183,400,303 | ||||||||||
Per Share Amounts | ||||||||||||
Income from continuing operations | $ | 1.34 | $ | 0.46 | $ | 0.17 | ||||||
Gain on sale of discontinued operations | $ | — | $ | — | $ | 0.01 | ||||||
Net income applicable to common stock | $ | 1.33 | $ | 0.44 | $ | 0.16 |
(1) | The denominator does not include stock equivalents resulting from the options issued under the Nonqualified stock option plan for the years ended December 31, 2006, 2005, and 2004, due to conversion prices being higher than market prices for all periods. Under the nonqualified stock option plan for the years ended December 31, 2006, 2005, and 2004, 932,946, 917,623 and 1,146,728 shares, respectively, would be included. The denominator also does not include stock equivalents resulting from the conversion of the Corporate PIES, for the year ended December 31, 2004. The amounts that would be included in the calculation, if the conversion price were met would be 17.3 million shares. |
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SIERRA PACIFIC RESOURCES | ||||||||||||||||
2006 Quarter Ended | ||||||||||||||||
Revised | Revised | Revised | ||||||||||||||
March | June | September | December | |||||||||||||
Operating Revenues | $ | 707,056 | $ | 821,919 | $ | 1,081,967 | $ | 745,008 | ||||||||
Operating Income(5) | $ | 59,577 | $ | 90,683 | $ | 283,793 | (1) | $ | 54,744 | |||||||
Income from continuing operation(5) | $ | 2,217 | $ | 29,202 | $ | 222,246 | $ | 26,127 | ||||||||
Net income applicable to common stock | $ | 1,242 | $ | 27,836 | $ | 222,246 | $ | 26,127 | ||||||||
Income per share-Basic and diluted: | ||||||||||||||||
From continuing operations | $ | 0.01 | $ | 0.15 | $ | 1.05 | $ | 0.12 | ||||||||
Net income applicable to common stock | $ | 0.01 | $ | 0.14 | $ | 1.05 | $ | 0.12 |
2005 Quarter Ended | ||||||||||||||||
Revised | Revised | Revised | ||||||||||||||
March | June | September | December | |||||||||||||
Operating Revenues | $ | 648,996 | $ | 701,038 | $ | 959,126 | $ | 721,082 | ||||||||
Operating Income | $ | 58,953 | $ | 80,894 | $ | 162,750 | $ | 56,081 | ||||||||
Income from continuing operations (6) | $ | (8,511 | ) | $ | 10,026 | $ | 61,993 | (3) | $ | 22,629 | ||||||
Net Income (loss) applicable to common stock | $ | (9,486 | ) | $ | 9,051 | $ | 61,018 | $ | 21,654 | |||||||
Income (loss) per share-Basic and diluted: | ||||||||||||||||
From continuing operations | $ | (0.07 | ) | $ | 0.05 | $ | 0.34 | $ | 0.12 | |||||||
Net Income (loss) applicable to common stock | $ | (0.08 | ) | $ | 0.05 | $ | 0.33 | $ | 0.11 |
(1) | In the third quarter of 2006, operating income includes the reinstatement of deferred energy of approximately $180 million. | |
(2) | In the fourth quarter of 2006, income from continuing operations includes a gain of $62.9 million due to the sale of TGPC’s partnership interest in TGTC. | |
(3) | In the third quarter of 2005, income from continuing operations includes a charge of $54 million for the inducement for debt conversion. | |
(4) | In the fourth quarter of 2005, income from continuing operations includes the reversal of $20.9 million in interest charges as a result of settlements with terminated suppliers. | |
(5) | Operating Income and Income from Continuing Operations differs from amounts previously reported in the March 31, June 30, and September 30, 2006 10Q’s by a reduction of ($9), ($48), and ($15), respectively, due to SPCOM being classified as assets held for use rather than as discontinued operation. See Note 18 Discontinued Operations and Disposal and Impairment of Long-Lived Assets. |
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(6) | Operating Income and Income from Continuing Operations differs from amounts previously reported in the March 31, June 30 and September 2005 10Q’s by $5, $1 and ($134), respectively, due to SPCOM being classified as assets held for use rather than as discontinued operations. See Note 18 Discontinued Operations and Disposal and Impairment of Long-lived Assets. |
NEVADA POWER | ||||||||||||||||
2006 Quarter Ended | ||||||||||||||||
March | June | September | December | |||||||||||||
Operating Revenues | $ | 381,275 | $ | 543,869 | $ | 776,235 | $ | 422,702 | ||||||||
Operating Income | $ | 25,663 | $ | 62,019 | $ | 244,920 | (1) | $ | 18,670 | |||||||
NET INCOME (LOSS) | $ | (3,296 | ) | $ | 28,456 | $ | 211,113 | $ | (11,733 | ) | ||||||
2005 Quarter Ended | ||||||||||||||||
March | June | September | December | |||||||||||||
Operating Revenues | $ | 354,134 | $ | 451,384 | $ | 675,181 | $ | 402,568 | ||||||||
Operating Income | $ | 23,265 | $ | 54,031 | $ | 126,173 | $ | 25,358 | ||||||||
NET INCOME (LOSS) | $ | (8,033 | ) | $ | 20,969 | $ | 99,472 | $ | 20,326 | (2) | ||||||
(1) | In the third quarter of 2006, operating income includes the reinstatement of deferred energy costs of approximately $180 million. | |
(2) | In the fourth quarter of 2005, income from continuing operations includes the reversal of $17.7 million in interest charges as a result of settlements with terminated suppliers. |
SIERRA PACIFIC POWER | ||||||||||||||||
2006 Quarter Ended | ||||||||||||||||
March | June | September | December | |||||||||||||
Operating Revenues | $ | 325,497 | $ | 277,319 | $ | 305,445 | $ | 321,969 | ||||||||
Operating Income | $ | 29,991 | $ | 24,803 | $ | 36,543 | $ | 28,680 | ||||||||
NET INCOME | $ | 13,272 | $ | 8,999 | $ | 20,028 | $ | 15,410 | ||||||||
Earnings (deficit) applicable to common stock | $ | 12,297 | $ | 7,633 | $ | 20,028 | $ | 15,410 | ||||||||
2005 Quarter Ended | ||||||||||||||||
March | June | September | December | |||||||||||||
Operating Revenues | $ | 294,548 | $ | 249,335 | $ | 283,683 | $ | 318,131 | ||||||||
Operating Income (loss) | $ | 29,519 | $ | 21,710 | $ | 38,139 | $ | 26,936 | ||||||||
NET INCOME | $ | 12,137 | $ | 4,899 | $ | 21,858 | $ | 13,180 | (1) | |||||||
Earnings (deficit) applicable to common stock | $ | 11,162 | $ | 3,924 | $ | 20,883 | $ | 12,205 | ||||||||
(1) | In the fourth quarter of 2005, income includes the reversal of $3.2 million in interest expense due to the settlement with Enron. |
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Reno, Nevada
Reno, Nevada
March 1, 2007
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• | Assess the performance of individuals against key organizational objectives and reward performance that either meets or exceeds those objectives. | ||
• | Ensure continuity of superior performance and retention of key executives. | ||
• | Attract qualified candidates. |
• | Cash Compensation |
o | Salary | ||
o | Short Term Incentive Plan (STIP) | ||
o | Cash allowance |
• | Equity Compensation—Long Term Incentive Plan (LTIP) |
o | Non-Qualified Stock Options | ||
o | Performance Shares |
• | Retirement Plans |
o | Pension Plan (Qualified Plan) | ||
o | Non-Qualified Restoration Plan | ||
o | Non-Qualified Supplemental Executive Retirement Plan (SERP) | ||
o | Non Qualified Deferred Compensation Program |
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o | the incentive compensation set and paid in recent years; | ||
o | the desire to ensure that a substantial portion of total compensation is based upon performance; | ||
o | the relative importance of the corporate, business unit and individual goals in any given year; and | ||
o | competitive information, analyses and recommendations provided by Towers Perrin. |
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Financial Performance | 30 | % | ||
Customer Perception | 30 | % | ||
Business Unit Performance | 20 | % | ||
Individual Performance Assessment | 20 | % |
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• | total shareholder return against the Dow Jones Utility Index; | ||
• | recovery of deferred energy disallowed in NPC’s 2001 Deferred Energy Case; | ||
• | restoration of investment grade status for the Utilities’ senior secured debt; | ||
• | a satisfactory achievement of regulatory and litigation milestones as measured by the Board; | ||
• | restoration of the common stock dividend; and | ||
• | attaining Public Utilities Commission of Nevada approval and securing all necessary licenses and permits required to commence construction of the Ely Energy Center. |
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Performance | Shares Earned | |||
Below 35th Percentile | 0% of grant | |||
35th Percentile | 50% of grant | |||
50th Percentile | 100% of grant | |||
75th Percentile | 150% of grant |
(1.325% x “Final Average Earnings” x “Benefit Accrual Service”) + (0.475% x “Excess Compensation” x “Benefit Accrual Service” up to 35 year maximum)
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• | Housing Allowances (for alternate work locations) | ||
• | Executive Physical Programs | ||
• | Tax gross ups on specific expenses |
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Change in | ||||||||||||||||||||||||||||||||||||
Non- | Qualified and | |||||||||||||||||||||||||||||||||||
Equity | Non-Qualified | All Other | ||||||||||||||||||||||||||||||||||
Stock Awards | Option | Incentive | Deferred | Compensation | ||||||||||||||||||||||||||||||||
Name and Principal | Bonus ($) | ($) | Awards ($) | Plan ($) | Compensation | ($) | ||||||||||||||||||||||||||||||
Position | Year | Salary ($) | (1) | (2) | (2) | (3) | ($)(6) | (7) | Total ($) | |||||||||||||||||||||||||||
Walter M. Higgins (5) | 2006 | $ | 743,654 | $ | 333,333 | $ | 1,998,892 | $ | — | $ | 594,750 | $ | 1,719,679 | $ | 180,705 | $ | 5,571,013 | |||||||||||||||||||
Chairman of the Board, President, and Chief Executive Officer | ||||||||||||||||||||||||||||||||||||
Michael W. Yackira (5) | 2006 | $ | 373,846 | $ | — | $ | 260,466 | $ | 376,527 | $ | 200,000 | $ | 196,991 | $ | 57,577 | $ | 1,465,408 | |||||||||||||||||||
Corporate Executive Vice President, Chief Financial Officer | ||||||||||||||||||||||||||||||||||||
Paul J. Kaleta (4) | 2006 | $ | 268,846 | $ | 65,000 | $ | 174,601 | $ | 221,505 | $ | 150,000 | $ | 41,554 | $ | 341,498 | $ | 1,263,004 | |||||||||||||||||||
Corporate Sr. Vice President, General Counsel | ||||||||||||||||||||||||||||||||||||
Roberto R. Denis | 2006 | $ | 297,693 | $ | — | $ | 218,097 | $ | 324,913 | $ | 165,000 | $ | 189,990 | $ | 58,108 | $ | 1,253,800 | |||||||||||||||||||
Corporate Sr. Vice President, Energy Supply | ||||||||||||||||||||||||||||||||||||
Jeffrey L. Ceccarelli | 2006 | $ | 332,115 | $ | — | $ | 229,241 | $ | 62,908 | $ | 165,000 | $ | 394,995 | $ | 88,640 | $ | 1,272,899 | |||||||||||||||||||
Corporate Sr. Vice President, Service Delivery and Operations |
(1) | In 2006, Mr. Higgins received a retention incentive payment in the amount of $333,333, and Mr. Kaleta was paid a signing bonus in the amount of $65,000. | |
(2) | “Stock Awards” consists of the values for performance shares and restricted stock; “Option Awards” consists of the values for non-qualified stock options. Assumptions used to value these awards are consistent with contemporary practices for their accounting treatment and recognized in accordance with SFAS No. 123R “Share Based Payments” in 2006. Reference Note 12, Stock Compensation Plans, of the Footnotes to the Consolidated Financial Statements. | |
(3) | The amounts presented for Non-Equity Incentive Plan awards consist of payments under the Short-Term Incentive Plan earned in 2006, and are calculated using base salary which could differ from the amount reported in the “Salary” column. | |
(4) | Mr. Kaleta was appointed to the position of Corporate Senior Vice President and General Counsel in February 2006. | |
(5) | Effective February 15, 2007, Mr. Higgins’ is Chairman and Chief Executive Officer of SPR, and Mr. Yackira is President and Chief Operating Officer of SPR. | |
(6) | Deferred Compensation reflects the following factors that result in an increase in value: |
i. | Increase in final average pay resulting primarily from increases in incentive compensation payments made in 2006 | ||
ii. | Increase in service (by 1 year) used to calculate the benefit | ||
iii. | Decrease in period to time before commencement (by 1 year) |
The increase in incentive compensation payments reflects the achievement of targeted goals and the overall improved financial health of the company. Final average pay for purposes of the calculation of the amounts shown in this table includes 2006 compensation in the averaging period, replacing the 2001 compensation for Restoration Plan purposes and 2003 compensation for SERP purposes that would be used in the prior year calculations. | ||
(7) | Amounts for All Other Compensation include the following for 2006: |
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Walter M. | Michael | Paul J. | Roberto R. | Jeffrey L. | ||||||||||||||||
Description | Higgins | W. Yackira | Kaleta | Denis | Ceccarelli | |||||||||||||||
SPR contributions to the 401k deferred compensation plan | $ | 13,200 | $ | 13,200 | $ | 9,154 | $ | 13,200 | $ | 13,200 | ||||||||||
Imputed income on group term life insurance and premiums paid for executive term life policies | $ | 14,666 | $ | 4,281 | $ | 1,840 | $ | 3,600 | $ | 2,464 | ||||||||||
Cash in lieu of forgone vacation | $ | 47,308 | $ | 25,096 | $ | 14,331 | $ | 29,308 | $ | 15,977 | ||||||||||
Cash allowance to be used at the discretion of the executive | $ | 30,000 | $ | 15,000 | $ | 11,077 | $ | 12,000 | $ | 15,000 | ||||||||||
Housing Allowance (for alternate work location) | $ | 75,531 | $ | — | $ | — | $ | — | $ | 42,000 | ||||||||||
Relocation Expense | $ | — | $ | — | $ | 261,084 | $ | — | $ | — | ||||||||||
Tax gross up on relocation expenses | $ | — | $ | — | $ | 44,012 | $ | — | $ | — | ||||||||||
Total | $ | 180,705 | $ | 57,577 | $ | 341,498 | $ | 58,108 | $ | 88,641 |
Exercise | Grant Date | |||||||||||||||||||||||||||||||||||||||||||
All | All | or Base | Fair Value | |||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under | Estimated Future Payouts Under | Other | Other | Price of | of Stock or | |||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Awards | Equity Incentive Plan Awards | Stock | Option | Option | Option | |||||||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | Awards | Awards | Awards | Awards | |||||||||||||||||||||||||||||||||||
Name | Grant Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/sh) | ($) | |||||||||||||||||||||||||||||||||
Walter M. Higgins Performance Shares | 08/04/2006 | 42,500 | 450,000 | 500,000 | $ | 7,225,000 | ||||||||||||||||||||||||||||||||||||||
Short-Term Incentive Plan | 01/01/2006 | $ | 594,750 | |||||||||||||||||||||||||||||||||||||||||
Michael W. Yackira Options | 02/07/2006 | 17,527 | $ | 13.29 | $ | 84,558 | ||||||||||||||||||||||||||||||||||||||
Performance Shares | 02/07/2006 | 10,432 | 20,864 | 31,296 | $ | 96,879 | ||||||||||||||||||||||||||||||||||||||
Short-Term Incentive Plan | 01/01/2006 | $ | 200,000 | |||||||||||||||||||||||||||||||||||||||||
Paul J. Kaleta Options | 02/01/2006 | 30,000 | $ | 13.10 | $ | 144,600 | ||||||||||||||||||||||||||||||||||||||
Options | 02/07/2006 | 8,224 | $ | 13.29 | $ | 39,675 | ||||||||||||||||||||||||||||||||||||||
Options | 02/07/2006 | 2,112 | $ | 13.29 | $ | 10,189 | ||||||||||||||||||||||||||||||||||||||
Options | 02/07/2006 | 14,405 | $ | 13.29 | $ | 69,496 | ||||||||||||||||||||||||||||||||||||||
Performance Shares | 02/07/2006 | 8,575 | 17,149 | 25,724 | $ | 79,629 | ||||||||||||||||||||||||||||||||||||||
Restricted Shares | 02/07/2006 | 5,643 | $ | 74,995 | ||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive Plan | 01/01/2006 | $ | 150,000 | |||||||||||||||||||||||||||||||||||||||||
Roberto R. Denis Options | 02/07/2006 | 13,445 | $ | 13.29 | $ | 64,864 | ||||||||||||||||||||||||||||||||||||||
Performance Shares | 02/07/2006 | 8,003 | 16,005 | 24,008 | $ | 74,317 | ||||||||||||||||||||||||||||||||||||||
Short-Term Incentive Plan | 01/01/2006 | $ | 165,000 | |||||||||||||||||||||||||||||||||||||||||
Jeffrey L. Ceccarelli Options | 02/07/2006 | 14,886 | $ | 13.29 | $ | 71,816 | ||||||||||||||||||||||||||||||||||||||
Performance Shares | 02/07/2006 | 8,860 | 17,720 | 26,580 | $ | 82,280 | ||||||||||||||||||||||||||||||||||||||
Short-Term Incentive Plan | 01/01/2006 | $ | 165,000 |
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1. | Mr. Higgins’ performance share grant of 500,000 shares, dated August 4, 2006, was awarded per an employment agreement executed on that date. Of this amount, 65,000 shares were earned and issued in October 2006. The value of these vested shares is reflected in the “Summary Compensation Table,” and the remaining unvested portion is included in the “Outstanding Equity Awards at Fiscal Year-End Table.” A total of 353,282 outstanding performance shares from his previous employment agreement, signed in 2003, were cancelled upon the execution of this new agreement. According to the terms of his new employment agreement, Mr. Higgins is entitled to receive the following performance shares with the achievement of certain criteria, if they are met by June 1, 2008: |
i. | Shareholder return as measured by the Dow Jones Utility Index: |
1. | if SPR is positioned in the 40th percentile, 42,500 shares will be awarded. | ||
2. | if SPR is positioned at or above the 50th percentile, 85,000 shares will be awarded. | ||
3. | if SPR is positioned at or above the 70th percentile, 135,000 shares will be awarded. |
ii. | Recover all of the deferred energy charges previously denied in the 2002 PUCN deferred energy case, 50,000 shares, with final assessment of achievement to be at the discretion of the Board of Directors. | ||
iii. | Restore investment grade status for the senior secured debt of the Utilities, 100,000 shares, no award if goal is not attained. | ||
iv. | Satisfactory achievement of remaining regulatory and litigation milestones, as measured by the Board of Directors, 65,000 shares, final award to be at the discretion of the Board of Directors. | ||
v. | Restore quarterly common stock dividend, 100,000 shares, no award if goal is not attained. | ||
vi. | Attain PUCN approval and secure all necessary licenses and permits required to commence construction of the proposed Ely plant, 50,000 shares, number of shares awarded to be at the discretion of the Board of Directors. |
2. | The performance share grants dated February 7, 2006 have a three year performance and vesting period ending on December 31, 2008. |
i. | The threshold represents the minimum acceptable performance which, if attained, results in payment of 50% of the target award. | ||
Performance below the minimum acceptable level results in no award earned. | |||
ii. | The target indicates a level of outstanding performance and which, if attained, results in payment of 100% of the target award. | ||
iii. | The maximum represents a level indicative of exceptional performance which, if attained, results in a payment of 150% of the target award. |
3. | For the executives listed above all option grants dated February 7, 2006 will vest over three years at one-third per year, except for the option to purchase 30,000 shares and 2,112 shares, as described in footnote(4) below, granted to Mr. Kaleta. | |
4. | In addition to the above grants, upon his hire Mr. Kaleta was also granted: |
i. | an option award of 30,000 shares, with a one year vesting period beginning on the grant date of February 1, 2006. | ||
ii. | a restricted shares award of 5,643 shares, with a grant date of February 7, 2006, which was fully vested on December 31, 2006. | ||
iii. | an option award of 2,112 shares which will vest only upon the restoration of the quarterly common stock dividend before February 7, 2010. |
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OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||
Equity | Equity | |||||||||||||||||||||||||||||||||||
Incentive | Incentive | |||||||||||||||||||||||||||||||||||
Plan | Plan | |||||||||||||||||||||||||||||||||||
Awards: | Awards: | |||||||||||||||||||||||||||||||||||
Number | Market or | |||||||||||||||||||||||||||||||||||
Equity | Number | Market | of | Payout | ||||||||||||||||||||||||||||||||
Incentive | of | Value of | Unearned | Value of | ||||||||||||||||||||||||||||||||
Plan | Shares | Shares or | Shares, | Unearned | ||||||||||||||||||||||||||||||||
Awards: | or Units | Units of | Units or | Shares, | ||||||||||||||||||||||||||||||||
Number of | Number of | Number of | of Stock | Stock | Other | Units or | ||||||||||||||||||||||||||||||
Securities | Securities | Securities | that | that Have | Rights | Other | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Have | Not | that Have | Rights that | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Option | Not | Vested | Not | Have Not | ||||||||||||||||||||||||||||
Options (#) | Options (#) | Unearned | Exercise | Expiration | Vested | ($) | Vested | Vested ($) | ||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | Options (#) | Price ($) | Date | (#) | (1) | (#) | (1) | |||||||||||||||||||||||||||
Walter M. Higgins | ||||||||||||||||||||||||||||||||||||
Options - 08/04/2000 | (2) | 400,000 | $ | 16.00 | 02/19/2009 | |||||||||||||||||||||||||||||||
Options - 01/01/2001 | (3) | 110,130 | $ | 14.80 | 01/02/2011 | |||||||||||||||||||||||||||||||
Options - 01/01/2002 | (3) | 123,900 | $ | 15.58 | 01/02/2012 | |||||||||||||||||||||||||||||||
Performance Shares -08/04/2006 | (4) | 435,000 | $ | 7,321,050 | ||||||||||||||||||||||||||||||||
Michael W. Yackira | ||||||||||||||||||||||||||||||||||||
Options - 02/07/2005 | (3) | 6,212 | 12,426 | $ | 10.05 | 02/08/2015 | ||||||||||||||||||||||||||||||
Options - 02/07/2005 | (5) | 4,660 | $ | 10.05 | 02/08/2015 | |||||||||||||||||||||||||||||||
Options - 02/07/2006 | (3) | 17,527 | $ | 13.29 | 02/08/2016 | |||||||||||||||||||||||||||||||
Performance Shares -02/07/2005 | (6) | 15,775 | $ | 265,501 | 7,887 | $ | 132,731 | |||||||||||||||||||||||||||||
Performance Shares -02/07/2005 | (7) | 5,915 | $ | 99,550 | ||||||||||||||||||||||||||||||||
Performance Shares -02/07/2006 | (6) | 6,954 | $ | 117,035 | 13,910 | $ | 234,106 | |||||||||||||||||||||||||||||
Paul J. Kaleta | ||||||||||||||||||||||||||||||||||||
Options - 02/01/2006 | (8) | 30,000 | $ | 13.10 | 02/02/2016 | |||||||||||||||||||||||||||||||
Options - 02/07/2006 | (3) | 8,224 | $ | 13.29 | 02/08/2015 | |||||||||||||||||||||||||||||||
Options - 02/07/2006 | (5) | 2,112 | $ | 13.29 | 02/08/2015 | |||||||||||||||||||||||||||||||
Options - 02/07/2006 | (3) | 14,405 | $ | 13.29 | 02/08/2016 | |||||||||||||||||||||||||||||||
Performance Shares -02/07/2006 | (6) | 6,959 | $ | 117,120 | 3,479 | $ | 58,551 | |||||||||||||||||||||||||||||
Performance Shares -02/07/2006 | (7) | 2,610 | $ | 43,927 | ||||||||||||||||||||||||||||||||
Performance Shares -02/07/2006 | (6) | 5,716 | $ | 96,196 | 11,433 | $ | 192,421 | |||||||||||||||||||||||||||||
Roberto R. Denis | ||||||||||||||||||||||||||||||||||||
Options - 02/07/2005 | (3) | 3,700 | 7,401 | $ | 10.05 | 02/08/2015 | ||||||||||||||||||||||||||||||
Options - 02/07/2005 | (5) | 2,775 | $ | 10.05 | 02/08/2015 | |||||||||||||||||||||||||||||||
Options - 02/07/2006 | (3) | 13,445 | $ | 13.29 | 02/08/2016 | |||||||||||||||||||||||||||||||
Performance Shares -02/07/2005 | (6) | 9,396 | $ | 158,131 | 4,697 | $ | 79,054 | |||||||||||||||||||||||||||||
Performance Shares -02/07/2005 | (7) | 3,523 | $ | 59,292 | ||||||||||||||||||||||||||||||||
Performance Shares -02/07/2006 | (6) | 5,334 | $ | 89,779 | 10,671 | $ | 179,585 | |||||||||||||||||||||||||||||
Jeffrey L. Ceccarelli | ||||||||||||||||||||||||||||||||||||
Options - 01/01/1998 | (3) | 7,920 | $ | 24.93 | 01/02/2008 | |||||||||||||||||||||||||||||||
Options - 01/01/1999 | (3) | 7,920 | $ | 24.22 | 01/02/2009 | |||||||||||||||||||||||||||||||
Options - 08/01/1999 | (9) | 10,300 | $ | 26.00 | 08/02/2009 | |||||||||||||||||||||||||||||||
Options - 01/01/2001 | (3) | 22,510 | $ | 14.80 | 01/02/2011 | |||||||||||||||||||||||||||||||
Options - 01/01/2002 | (3) | 34,500 | $ | 15.58 | 01/02/2012 | |||||||||||||||||||||||||||||||
Options - 02/07/2005 | (3) | 4,842 | 9,685 | $ | 10.05 | 02/08/2015 | ||||||||||||||||||||||||||||||
Options - 02/07/2005 | (5) | 3,632 | $ | 10.05 | 02/08/2015 | |||||||||||||||||||||||||||||||
Options - 02/07/2006 | (3) | 14,886 | $ | 13.29 | 02/08/2016 | |||||||||||||||||||||||||||||||
Performance Shares -02/07/2005 | (6) | 12,295 | $ | 206,930 | 6,147 | $ | 103,449 | |||||||||||||||||||||||||||||
Performance Shares -02/07/2005 | (7) | 4,611 | $ | 77,603 | ||||||||||||||||||||||||||||||||
Performance Shares -02/07/2006 | (6) | 5,906 | $ | 99,399 | 11,814 | $ | 198,828 |
(1) | Market Value is based on the December 31, 2006, closing trading price of SPR stock of $16.83; all incentive plan performance share awards are shown as achieving the target level of performance, which results in a 100% payout of the award. | ||
(2) | This grant vests over a four year period, one quarter each year beginning one year after grant date. | ||
(3) | These option awards vest over a three year period, one third each year beginning one year after grant date. | ||
(4) | Mr. Higgins was awarded 500,000 shares upon signing a new employment agreement in August 2006. These shares are to be earned upon the achievement of certain objectives prior to the expiration of the employment agreement in June 2008. Details of the performance criteria to be met are included in Footnote 1 to the “Grants of Plan-Based Awards” table. | ||
(5) | This grant will be earned upon the restoration of SPR’s common stock dividend within five years of grant date. | ||
(6) | These performance share awards are paid at the end of a three year performance period (measured from the date of grant) if the specified performance measures are achieved. | ||
(7) | This grant will be earned upon the return of NPC and SPPC to investment grade within three years of the award. | ||
(8) | This award was granted to Mr. Kaleta upon his hire in 2006 and will vest at the end of one year from date of grant. | ||
(9) | This award was granted to Mr. Ceccarelli upon the consummation of the merger between SPR and NPC, and vested one third each year over a three year period commencing January 2000. |
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OPTION AWARDS | STOCK AWARDS | |||||||||||||||
Number of Shares | Value Realized on | Number of Shares | Value Realized on | |||||||||||||
Acquired on | Exercise ($) | Acquired on | Vesting ($) | |||||||||||||
Name | Exercise (#) | (1) | Vesting (#) | (2) | ||||||||||||
Walter M. Higgins | ||||||||||||||||
Performance Shares | 65,000 | $ | 982,150 | |||||||||||||
Restricted Shares | 42,300 | $ | 711,909 | |||||||||||||
Michael W. Yackira | ||||||||||||||||
Options | 30,000 | $ | 300,450 | |||||||||||||
Restricted Shares | 12,544 | $ | 211,116 | |||||||||||||
Restricted Shares | 39,894 | $ | 671,416 | |||||||||||||
Paul J. Kaleta | ||||||||||||||||
Restricted Shares | 5,643 | $ | 94,972 | |||||||||||||
Roberto R. Denis | ||||||||||||||||
Options | 25,000 | $ | 270,740 | |||||||||||||
Restricted Shares | 3,334 | $ | 44,676 | |||||||||||||
Restricted Shares | 7,600 | $ | 127,908 | |||||||||||||
Restricted Shares | 25,931 | $ | 436,419 | |||||||||||||
Jeffrey L. Ceccarelli | ||||||||||||||||
Restricted Shares | 11,270 | $ | 189,674 | |||||||||||||
Restricted Shares | 33,245 | $ | 559,513 |
(1) | The value realized on exercise is calculated as the fair market value on the date of exercise, less the exercise price of the option. | |
(2) | The value realized on vesting is calculated as the market value on the vesting date. |
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Number of | ||||||||||||||
Years | Present Value of | Payments | ||||||||||||
Credited | Accumulated | During Last | ||||||||||||
Name | Plan Name | Service | Benefit | Fiscal Year | ||||||||||
Walter M. Higgins (1) | SPR Retirement Plan | 10.250 | $ | 401,006 | $ | — | ||||||||
SPR Restoration Plan | 10.250 | $ | 1,902,151 | $ | — | |||||||||
SPR SERP Plan | 15.167 | $ | 5,119,017 | $ | — | |||||||||
Michael W. Yackira (2) | SPR Retirement Plan | 3.667 | $ | 107,353 | $ | — | ||||||||
SPR Restoration Plan | 3.667 | $ | 163,656 | $ | — | |||||||||
SPR SERP Plan | 3.667 | $ | 240,339 | $ | — | |||||||||
Paul J. Kaleta (3) | SPR Retirement Plan | 0.667 | $ | 17,571 | $ | — | ||||||||
SPR Restoration Plan | 0.667 | $ | 5,490 | $ | — | |||||||||
SPR SERP Plan | 0.667 | $ | 18,494 | $ | — | |||||||||
Roberto R. Denis (4) | SPR Retirement Plan | 3.083 | $ | 96,097 | $ | — | ||||||||
SPR Restoration Plan | 3.083 | $ | 101,882 | $ | — | |||||||||
SPR SERP Plan | 6.083 | $ | 505,277 | $ | — | |||||||||
Jeffrey L. Ceccarelli (5) | SPR Retirement Plan | 31.000 | $ | 779,706 | $ | — | ||||||||
SPR Restoration Plan | 31.000 | $ | 657,860 | $ | — | |||||||||
SPR SERP Plan | 32.083 | $ | 570,835 | $ | — |
(1) | Mr. Higgins’ benefit under the SERP plan includes 4 years, 11 months of imputed service. | |
(2) | Mr. Yackira will become vested in all plans in 1 year, 4 months. | |
(3) | Mr. Kaleta will become vested in all plans in 4 years, 4 months. | |
(4) | Mr. Denis’ benefit under the SERP plan includes 3 years of imputed service for attaining age 62; he will be vested in all plans in 1 year, 11 months. | |
(5) | Mr. Ceccarelli’s benefit under the SERP plan includes 1 year, 1 month of imputed service. |
i. | Pension economic assumptions utilized for SPR’s FAS 158 financial reporting for fiscal year 2006, were used for the calculations. | ||
ii. | SPR reports using an early measurement date of September 30 and that date has been used in all calculations for the above table, and these assumptions are outlined below: |
a. | The discount rate was 6.0% for 2006 | ||
b. | Postretirement mortality is based on the RP 2000 mortality table, projected to 2015 | ||
c. | There was assumed to be no pre-retirement mortality, turnover, or disability | ||
d. | Retirement age was assumed to be the greater of age 62 and current age |
iii. | The demographic assumptions used are also consistent with pension financial reporting, with the exception as required by SEC guidance, that pre-retirement decrements are not used. |
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Reason for Termination | ||||||||||||||||||||||||||||
Voluntary | For Cause | Death | Disability | Retirement | Without | Change-in- | ||||||||||||||||||||||
Type of Benefit | (1) (8) | (2) (9) | (9) | (3) (9) | (4) | Cause (5) (10) | Control (6) (11) | |||||||||||||||||||||
Cash Severance (7) | $ | 1,687,500 | $ | — | $ | 562,500 | $ | 562,500 | $ | 1,687,500 | $ | 1,312,500 | $ | 2,625,000 | ||||||||||||||
Life Insurance Proceeds (18) | $ | 2,750,000 | ||||||||||||||||||||||||||
Cash LTIP Award | ||||||||||||||||||||||||||||
Lump Sum Pension Equivalent (16) | ||||||||||||||||||||||||||||
Equity Benefits(12) | ||||||||||||||||||||||||||||
Performance Shares | $ | 1,144,659 | $ | 1,144,659 | $ | 1,144,659 | $ | 1,144,659 | $ | 1,144,659 | $ | 7,321,050 | ||||||||||||||||
Restricted Stock | ||||||||||||||||||||||||||||
401k Shares | ||||||||||||||||||||||||||||
Unexercisable Options | ||||||||||||||||||||||||||||
Retirement Benefits (13) (17) | ||||||||||||||||||||||||||||
SPR Retirement Plan | $ | 36,216 | $ | 18,108 | $ | 36,216 | $ | 36,216 | $ | 36,216 | $ | 36,216 | ||||||||||||||||
SPR Restoration Plan | $ | 169,284 | $ | 84,636 | $ | 169,284 | $ | 169,284 | $ | 169,284 | $ | 169,284 | ||||||||||||||||
SPR SERP Plan | $ | 447,984 | $ | 223,992 | $ | 447,984 | $ | 447,984 | $ | 447,984 | $ | 447,984 | ||||||||||||||||
Retiree Medical | ||||||||||||||||||||||||||||
Unvested Deferred Compensation | ||||||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||
Health & Welfare (14) | $ | 52,720 | $ | 114,429 | $ | 72,599 | ||||||||||||||||||||||
Outplacement | ||||||||||||||||||||||||||||
Perquisites | ||||||||||||||||||||||||||||
Tax Gross-Ups (15) | $ | 3,813,167 | ||||||||||||||||||||||||||
Total of All Benefits (19) | $ | 3,538,363 | $ | — | $ | 4,783,895 | $ | 2,360,643 | $ | 3,485,643 | $ | 3,225,072 | $ | 14,485,300 | ||||||||||||||
Reason for Termination | ||||||||||||||||||||||||||||
Without | Change-in- | |||||||||||||||||||||||||||
Voluntary | For Cause | Death | Disability | Retirement | Cause (5) | Control (6) | ||||||||||||||||||||||
Type of Benefit | (1) (8) | (2) (9) | (9) | (3) (9) | (4) | (10) | (11) | |||||||||||||||||||||
Cash Severance (7) | $ | 375,000 | — | — | $ | 375,000 | $ | 375,000 | $ | 375,000 | $ | 1,687,500 | ||||||||||||||||
Life Insurance Proceeds (18) | $ | 1,063,000 | ||||||||||||||||||||||||||
Cash LTIP Award | ||||||||||||||||||||||||||||
Lump Sum Pension Equivalent (16) | $ | 1,192,714 | ||||||||||||||||||||||||||
Equity Benefits(12) | ||||||||||||||||||||||||||||
Performance Shares | $ | 1,132,161 | $ | 1,132,161 | $ | 1,132,161 | $ | 1,132,161 | $ | 1,132,161 | $ | 1,520,338 | ||||||||||||||||
Restricted Stock | ||||||||||||||||||||||||||||
401k Shares | ||||||||||||||||||||||||||||
Unexercisable Options | $ | 177,891 | $ | 177,891 | $ | 177,891 | $ | 177,891 | $ | 177,891 | $ | 177,891 | ||||||||||||||||
Retirement Benefits (13) (17) | ||||||||||||||||||||||||||||
SPR Retirement Plan | $ | 8,016 | $ | 8,016 | ||||||||||||||||||||||||
SPR Restoration Plan | $ | 11,472 | $ | 11,472 | ||||||||||||||||||||||||
SPR SERP Plan | $ | 18,312 | $ | 18,312 | ||||||||||||||||||||||||
Retiree Medical | ||||||||||||||||||||||||||||
Unvested Deferred Compensation | ||||||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||
Health & Welfare (14) | $ | 65,362 | ||||||||||||||||||||||||||
Outplacement | ||||||||||||||||||||||||||||
Perquisites | ||||||||||||||||||||||||||||
Tax Gross-Ups (15) | ||||||||||||||||||||||||||||
Total of All Benefits (19) | $ | 1,685,052 | $ | — | $ | 2,373,052 | $ | 1,685,052 | $ | 1,685,052 | $ | 1,722,852 | $ | 4,681,605 | ||||||||||||||
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Reason for Termination | ||||||||||||||||||||||||||||
Without | Change-in- | |||||||||||||||||||||||||||
Voluntary | For Cause | Death | Disability | Retirement | Cause (5) | Control (6) | ||||||||||||||||||||||
Type of Benefit | (1) (8) | (2) (9) | (9) | (3) (9) | (4) | (10) | (11) | |||||||||||||||||||||
Cash Severance (7) | $ | 300,000 | — | — | $ | 300,000 | $ | 300,000 | $ | 300,000 | $ | 1,305,000 | ||||||||||||||||
Life Insurance Proceeds (18) | $ | 850,000 | ||||||||||||||||||||||||||
Cash LTIP Award | ||||||||||||||||||||||||||||
Lump Sum Pension Equivalent (16) | $ | 523,994 | ||||||||||||||||||||||||||
Equity Benefits(12) | ||||||||||||||||||||||||||||
Performance Shares | $ | 329,182 | $ | 329,182 | $ | 329,182 | $ | 329,182 | $ | 329,182 | $ | 603,187 | ||||||||||||||||
Restricted Stock | ||||||||||||||||||||||||||||
401k Shares | ||||||||||||||||||||||||||||
Unexercisable Options | $ | 199,483 | $ | 199,483 | $ | 199,483 | $ | 199,483 | $ | 199,483 | $ | 199,483 | ||||||||||||||||
Retirement Benefits (13) (17) | ||||||||||||||||||||||||||||
SPR Retirement Plan | $ | 1,920 | $ | 1,920 | ||||||||||||||||||||||||
SPR Restoration Plan | $ | 696 | $ | 696 | ||||||||||||||||||||||||
SPR SERP Plan | $ | 2,052 | $ | 2,052 | ||||||||||||||||||||||||
Retiree Medical | ||||||||||||||||||||||||||||
Unvested Deferred Compensation | ||||||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||
Health & Welfare (14) | $ | 58,406 | ||||||||||||||||||||||||||
Outplacement | ||||||||||||||||||||||||||||
Perquisites | ||||||||||||||||||||||||||||
Tax Gross-Ups (15) | ||||||||||||||||||||||||||||
Total of All Benefits (19) | $ | 828,665 | $ | — | $ | 1,378,665 | $ | 828,665 | $ | 828,665 | $ | 833,333 | $ | 2,694,738 | ||||||||||||||
Reason for Termination | ||||||||||||||||||||||||||||
Without | Change-in- | |||||||||||||||||||||||||||
Voluntary | For Cause | Death | Disability | Retirement | Cause (5) | Control (6) | ||||||||||||||||||||||
Type of Benefit | (1) (8) | (2) (9) | (9) | (3) (9) | (4) | (10) | (11) | |||||||||||||||||||||
Cash Severance (7) | $ | 300,000 | — | — | $ | 300,000 | $ | 300,000 | $ | 300,000 | $ | 1,350,000 | ||||||||||||||||
Life Insurance Proceeds (18) | $ | 850,000 | ||||||||||||||||||||||||||
Cash LTIP Award | ||||||||||||||||||||||||||||
Lump Sum Pension Equivalent (16) | $ | 1,202,928 | ||||||||||||||||||||||||||
Equity Benefits(12) | ||||||||||||||||||||||||||||
Performance Shares | $ | 1,069,769 | $ | 1,069,769 | $ | 1,069,769 | $ | 1,069,769 | $ | 1,069,769 | $ | 1,404,043 | ||||||||||||||||
Restricted Stock | ||||||||||||||||||||||||||||
401k Shares | ||||||||||||||||||||||||||||
Unexercisable Options | $ | 191,220 | $ | 191,220 | $ | 191,220 | $ | 191,220 | $ | 191,220 | $ | 191,220 | ||||||||||||||||
Retirement Benefits (13) (17) | ||||||||||||||||||||||||||||
SPR Retirement Plan | $ | 8,232 | $ | 8,232 | ||||||||||||||||||||||||
SPR Restoration Plan | $ | 7,632 | $ | 7,632 | ||||||||||||||||||||||||
SPR SERP Plan | $ | 13,500 | $ | 13,500 | ||||||||||||||||||||||||
Retiree Medical | ||||||||||||||||||||||||||||
Unvested Deferred Compensation | ||||||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||
Health & Welfare (14) | $ | 58,406 | ||||||||||||||||||||||||||
Outplacement | ||||||||||||||||||||||||||||
Perquisites | ||||||||||||||||||||||||||||
Tax Gross-Ups (15) | ||||||||||||||||||||||||||||
Total of All Benefits (19) | $ | 1,560,989 | $ | — | $ | 2,110,989 | $ | 1,560,989 | $ | 1,560,989 | $ | 1,590,353 | $ | 4,235,961 | ||||||||||||||
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Reason for Termination | ||||||||||||||||||||||||||||
Without | Change-in- | |||||||||||||||||||||||||||
Voluntary | For Cause | Death | Disability | Retirement | Cause (5) | Control (6) | ||||||||||||||||||||||
Type of Benefit | (1) (8) | (2) (9) | (9) | (3) (9) | (4) | (10) | (11) | |||||||||||||||||||||
Cash Severance (7) | $ | 335,000 | — | — | $ | 335,000 | $ | 335,000 | $ | 335,000 | $ | 1,507,500 | ||||||||||||||||
Life Insurance Proceeds (18) | $ | 1,003,000 | ||||||||||||||||||||||||||
Cash LTIP Award | ||||||||||||||||||||||||||||
Lump Sum Pension Equivalent (16) | $ | 343,276 | ||||||||||||||||||||||||||
Equity Benefits(12) | ||||||||||||||||||||||||||||
Performance Shares | $ | 925,689 | $ | 925,689 | $ | 925,689 | $ | 925,689 | $ | 925,689 | $ | 1,245,723 | ||||||||||||||||
Restricted Stock | ||||||||||||||||||||||||||||
401k Shares | ||||||||||||||||||||||||||||
Unexercisable Options | $ | 142,990 | $ | 142,990 | $ | 142,990 | $ | 142,990 | $ | 142,990 | $ | 142,990 | ||||||||||||||||
Retirement Benefits (13) (17) | ||||||||||||||||||||||||||||
SPR Retirement Plan | $ | 60,876 | $ | 52,476 | $ | 60,876 | $ | 60,876 | $ | 60,876 | $ | 60,876 | ||||||||||||||||
SPR Restoration Plan | $ | 51,372 | $ | 44,292 | $ | 51,372 | $ | 51,372 | $ | 51,372 | $ | 51,372 | ||||||||||||||||
SPR SERP Plan | $ | 42,972 | $ | 37,044 | $ | 42,972 | $ | 42,972 | $ | 42,972 | $ | 42,972 | ||||||||||||||||
Retiree Medical | ||||||||||||||||||||||||||||
Unvested Deferred Compensation | ||||||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||
Health & Welfare (14) | $ | 61,761 | ||||||||||||||||||||||||||
Outplacement | ||||||||||||||||||||||||||||
Perquisites | ||||||||||||||||||||||||||||
Tax Gross-Ups (15) | ||||||||||||||||||||||||||||
Total of All Benefits (19) | $ | 1,558,899 | $ | — | $ | 2,205,491 | $ | 1,558,899 | $ | 1,558,899 | $ | 1,558,899 | $ | 3,456,470 | ||||||||||||||
(1) | Voluntary Terminationis defined for Mr. Higgins consistent with his employment agreement dated August 4, 2006. The document provides for a benefit equal to continued salary through June 1, 2008, provided he voluntarily resigns with the Board’s consent prior to June 1, 2008. In addition, he would be eligible to receive a pro-rata payment for all Short Term Incentive Awards, which equals 75% of base pay for 2006, and which otherwise would have been earned but unpaid by that date. For each of the other named executives, Voluntary Termination is defined as the executive resigning for good cause consistent with the terms of his employment agreement. | |
(2) | Termination For Causerequires SPR to terminate the employment relationship based on one of the provisions of the most recent employment agreement, such as fraud or gross misconduct. | |
(3) | Termination on the basis ofDisabilityassumes the disability prevents the executive from successfully fulfilling the duties of his position. This calculation assumes the qualifying event occurred on or before June 1, 2006, that SPR gave 30 days notice of termination, and the termination was effective December 31, 2006. Also for purposes of this calculation, it has been assumed that the CEO does not exercise the appeal provision of the disability determination process. | |
(4) | Termination on the basis ofRetirementassumes that the executive voluntarily resigned and is eligible to retire effective December 31, 2006. | |
(5) | Termination Without Causerequires SPR to decide to terminate the employment relationship without notice or providing a reason. | |
(6) | TheChange-in-Controlcalculation assumes that the executive was terminated at some point following a corporate change-in-control with an effective date of December 31, 2006. | |
(7) | Cash Severance is defined as all those payments owed or owing to the executive which are payable in cash under the different termination scenarios. While different payments may be paid in a lump sum or over a period of time, for the purpose of these calculations, the payments are assumed to be made in a lump sum within five days of the termination date. In addition, it is assumed that all accrued and unused vacation time for 2006 has been either used or paid, and all salary has been paid through the last day of the year. | |
(8) | The value of Mr. Higgins’ Cash Severance following a Voluntary Termination has been set at 1.5 times his annual base salary and target annual bonus award. As per footnote 1, by agreement, Mr. Higgins is eligible for continued salary payments through June 1, 2008, if he were to voluntarily resign with the Board’s Consent effective December 31, 2006. For all other executives, the value is calculated based on the formula of one times annual base salary. | |
(9) | In relation to the Cash Severance for Death, Disability or For Cause, the amount represents the executive’s pro-rata portion of his annual incentive award, which for 2006 had a performance period end date of December 31, 2006. Therefore, the payment of the annual incentive award would be earned but unpaid on December 31, 2006, provided any annual incentive performance measures were fulfilled. For purposes of this calculation, it is assumed the executive fulfilled the performance measures at “target” in relation to any annual incentive award. | |
(10) | The value of the Cash Severance for Termination without Cause represents one-time base annual earnings plus target incentive award. | |
(11) | The value of the Cash Severance for termination following a Change-in-Control, represents two times base earnings plus target annual bonus award, as per Mr. Higgins’ most recent employment agreement. For all other named executive officers the values represent three times the annual base earnings plus the target annual bonus award. | |
(12) | Equity awards are valued based on the trading price of SPR’s common stock at close of business on December 31, 2006 of $16.83. In addition, the calculations reflect any provisions in the employment or change-in-control agreements, in regard to accelerated vesting of outstanding performance or other share awards, as well as the immediate right to exercise any outstanding and unvested stock options. The values are based on the assumption that any unvested portion of performance shares would have been vested had the performance cycle not been truncated. Also, any pro-rata calculations are based on the initial grant date from the start of the performance cycle through December 31, 2006. | |
(13) | The value of any retirement benefits is calculated as the amount of any projected single life annuity for one year at the executive’s normal retirement, or the first date he would be eligible to receive an unreduced benefit. The value shown reflects the amount of any benefit accrued as of December 31, 2006, and assumes the executive voluntarily terminates employment on that date to retire. The following assumptions were listed for this calculation: |
i. | Annuity conversion interest rate was 4.73% for 2006. | ||
ii. | The mortality table used for lump sum conversions was GAR 94 Unisex. | ||
iii. | Retirement age was assumed to be the greater of age 55 and current age. |
(14) | The value of the health and welfare benefits to be provided to an executive and his family, if appropriate, is based on the value of his current elections prior to termination. The calculation assumes no change in benefit elections over the span of any continuation period. For each of the named |
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executives, except Mr. Higgins, the opportunity to continue in the health program, at the full cost and expense of SPR, beyond employment, is available for up to 36 months following a change-in-control. Mr. Higgins is only eligible for an additional 24 months following a change-in-control, as per his most recent employment agreement. However, Mr. Higgins is eligible for continued participation through June 1, 2008, provided he voluntarily resigns with the Board’s consent, and in the event of termination without cause, Mr. Higgins is eligible for continued coverage for up to 36 months. | ||
(15) | Mr. Higgins is the only named executive who is eligible for a gross-up of any severance payments following a change-in-control, based on calculations for parachute payments. All of the other executives’ severance payments are subject to reduction in the event the payment exceeds the threshold for parachute payments, set by IRC Section 280(g), which is defined as 2.99 times his 5 year average W-2 earnings for the 5 years immediately prior to termination. For purposes of these calculations, these values represent the maximum amount payable to each executive which would then be subject to reduction at the time of termination. | |
(16) | The Lump Sum Pension Service Equivalent is based on the provisions of each named executive’s employment or change-in-control agreement, which provides for a lump sum cash payment equal to the actuarial equivalent of three additional years of service, calculated from the date of termination, under all pension plans. In the case of Mr. Higgins, the value of this benefit is equal to zero since any grant for additional years of service under the plan, would not enhance his already accrued and vested benefit based on his current age and eligibility to retire. | |
(17) | In addition, each of the named executives would be eligible to receive: |
a. | All fully vested amounts, which might be distributable consistent with the law, under SPR’s Non-qualified deferred compensation program, as presented in the “Non-Qualified Deferred Compensation” table | ||
b. | All fully vested amounts under SPR’s 401(k) defined contribution plan, which all employees participate in; the 2006 contribution for each named executive is included in the “Summary Compensation Table”. |
(18) | Each named executive officer is covered by SPR’s Basic Life Insurance Program through CIGNA (1.5 times salary), and an Executive Life Insurance Program through Paragon with benefits payable to a designated beneficiary in the event of death ranging from $400,000 to $500,000. In addition to the basic amounts, SPR provides for accidental death and dismemberment coverage (1.5 times salary) and business travel accident insurance of $1,000,000 for each of the named executive officers with the exception of Mr. Higgins. In regard to Mr. Higgins, SPR contracts directly with CIGNA and Paragon to provide coverage and pays the premium on a policy with Pacific Life Insurance Company as well as a policy administered by M. Benefits Solutions. For the purpose of these calculations the qualifying event for each named executive is assumed to be for natural causes at December 31, 2006, and not as part of any business travel or accident. | |
(19) | This total includes values for annuities that were calculated for retirement benefits that are payable monthly over a period of time, that may or may not be realized at the values disclosed. |
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Aggregate | ||||||||||||||||||||
Executive | Registrant | Withdrawals/ | ||||||||||||||||||
Contributions in | Contribution in | Aggregate | Distributions in | Aggregate Balance | ||||||||||||||||
Last Fiscal Year | Last Fiscal Year | Earnings in Last | Last Fiscal Year | at Last Fiscal Year- | ||||||||||||||||
Name | ($) | ($) | Fiscal Year ($) | ($) | End ($) | |||||||||||||||
Walter M. Higgins | 42,175 | — | 3,576 | — | 45,751 | |||||||||||||||
Michael W. Yackira | 18,000 | — | 4,724 | — | 38,442 | |||||||||||||||
Paul J. Kaleta | 5,004 | — | 72 | — | 5,075 | |||||||||||||||
Roberto R. Denis | 8,190 | — | 584 | — | 8,774 | |||||||||||||||
Jeffrey L. Ceccarelli | 12,900 | — | 1,033 | — | 13,933 |
Change in | ||||||||||||||||||||||||||||
Fees | Pension Value | |||||||||||||||||||||||||||
Earned or | Non-Equity | and Nonqualified | ||||||||||||||||||||||||||
Paid in | Stock | Option | Incentive Plan | Deferred | All Other | |||||||||||||||||||||||
Cash | Awards | Awards | Compensation | Compensation | Compensation | Total | ||||||||||||||||||||||
Name | ($) | ($) | ($) | ($) | Earnings | ($) | ($) | |||||||||||||||||||||
Mr. Anderson | $ | 50,809 | $ | 35,000 | — | — | — | — | $ | 85,809 | ||||||||||||||||||
Ms. Coleman | 43,609 | 35,000 | — | — | — | — | 78,609 | |||||||||||||||||||||
Ms. Corbin | 46,609 | 35,000 | — | — | — | — | 81,609 | |||||||||||||||||||||
Mr. Day* (1) | 39,200 | 35,000 | — | — | — | — | 74,200 | |||||||||||||||||||||
Mr. Donnelley* | 35,513 | 57,000 | — | — | — | — | 92,513 | |||||||||||||||||||||
Mr. Herbst * | 45,809 | 35,000 | — | — | — | — | 80,809 | |||||||||||||||||||||
Mr. O’Reilly * (1) | 24,800 | 57,000 | — | — | — | — | 81,800 | |||||||||||||||||||||
Mr. Satre * (1) | 39,800 | 57,000 | — | — | — | — | 96,800 | |||||||||||||||||||||
Mr. Snyder (1) | 56,200 | 35,000 | — | — | — | — | 91,200 | |||||||||||||||||||||
Mr. Turner* (1) | 57,200 | 35,000 | — | — | — | — | 92,200 |
* | Chair of Committee | |
(1) | The Director elected to defer payment of the stock award until such time as he is no longer a Director of SPR, although the receipt of the stock award is reflected in the Stock Awards column. |
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COMPENSATION COMMITTEE James R. Donnelley,Chair Joseph B. Anderson, Jr. Mary Lee Coleman Theodore J. Day |
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NPC | SPPC | SPR Consolidated (d) | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
Audit Fees (a) | $ | 1,403,150 | $ | 1,359,499 | $ | 1,328,825 | $ | 1,295,521 | $ | 3,016,025 | $ | 3,270,514 | ||||||||||||
Audit Related Fees (b) | 10,000 | — | 10,500 | 36,308 | 20,500 | 94,693 | ||||||||||||||||||
All Other Fees (c) | — | — | — | — | 75,000 | 29,560 | ||||||||||||||||||
Total | $ | 1,413,150 | $ | 1,359,499 | $ | 1,339,325 | $ | 1,331,829 | $ | 3,111,525 | $ | 3,394,767 | ||||||||||||
(a) | Fees for audit services billed in 2006 and 2005 consisted of: |
§ | Audit of the companies financial statements. | ||
§ | Reviews of the companies quarterly financial statements. | ||
§ | Comfort letters, regulatory audits, consents and other services related to SEC matters. |
(b) | Fees for audit related services billed in 2006 and 2005 consisted of: |
§ | Sarbanes-Oxley Act, Section 404 advisory services. | ||
§ | Agreed upon procedures. |
(c) | Fees for all other services billed in 2006 and 2005 consisted of permitted non-audit services, such as: |
§ | Income tax assistance. |
(d) | 2005 Audit fees have been adjusted from information previously presented to reflect fees for audit services relating to the audit of the 2005 financial statements, including internal controls over financial reporting for SPR, billed subsequent to the filing of the 2006 proxy statement. |
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1. | The service is not an audit, review or other attest service; | ||
2. | The aggregate amount of all such services provided under this provision does not exceed the lesser of $50,000 or five percent of total fees paid to the independent auditor in a given fiscal year; | ||
3. | Such services were not recognized at the time of the engagement to be non-audit services; | ||
4. | Such services are promptly brought to the attention of the Audit Committee and approved by the Audit Committee or its designee; and | ||
5. | The service and fee are specifically disclosed in the Proxy Statement as meeting thede minimisrequirements. |
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Page | ||||||||
1. | Financial Statements: | |||||||
Reports of Independent Registered Public Accounting Firm | 95 | |||||||
Sierra Pacific Resources: | ||||||||
Consolidated Balance Sheets as of December 31, 2006 and 2005 | 98 | |||||||
Consolidated Income Statements for the Years Ended December 31, 2006, 2005 and 2004 | 99 | |||||||
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2006, 2005 and 2004 | 100 | |||||||
Consolidated Statements of Common Shareholders’ Equity for the Years Ended December 31, 2006, 2005 and 2004 | 101 | |||||||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004 | 102 | |||||||
Consolidated Statements of Capitalization as of December 31, 2006 and 2005 | 103 | |||||||
Nevada Power Company: | ||||||||
Consolidated Balance Sheets as of December 31, 2006 and 2005 | 105 | |||||||
Consolidated Income Statements for the Years Ended December 31, 2006, 2005 and 2004 | 106 | |||||||
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2006, 2005 and 2004 | 107 | |||||||
Consolidated Statements of Common Shareholder’s Equity for the Years Ended December 31, 2006, 2005 and 2004 | 108 | |||||||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004 | 109 | |||||||
Consolidated Statements of Capitalization as of December 31, 2006 and 2005 | 110 | |||||||
Sierra Pacific Power Company: | ||||||||
Consolidated Balance Sheets as of December 31, 2006 and 2005 | 111 | |||||||
Consolidated Income Statements for the Years Ended December 31, 2006, 2005 and 2004 | 112 | |||||||
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2006, 2005 and 2004 | 113 | |||||||
Consolidated Statements of Common Shareholder’s Equity for the Years Ended December 31, 2006, 2005 and 2004 | 114 | |||||||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004 | 115 | |||||||
Consolidated Statements of Capitalization as of December 31, 2006 and 2005 | 116 | |||||||
Notes to Financial Statements for Sierra Pacific Resources, Nevada Power Company and Sierra Pacific Power Company | 117 | |||||||
2. | Financial Statement Schedules: | |||||||
Schedule I – Condensed Financial Statements of Sierra Pacific Resources | 206 | |||||||
Schedule II – Consolidated Valuation and Qualifying Accounts | 207 | |||||||
All other schedules have been omitted because they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto. Columns omitted from schedules have been omitted because the information is not applicable. | ||||||||
3. | Exhibits: | |||||||
Exhibits are listed in the Exhibit Index on pages 209 to 218. |
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SIERRA PACIFIC RESOURCES NEVADA POWER COMPANY SIERRA PACIFIC POWER COMPANY | ||||
By /s/ Walter M. Higgins | ||||
Walter M. Higgins | ||||
Chairman, Chief Executive Officer and Director | ||||
February 28, 2007 | ||||
/s/ | William D. Rogers | /s/ | John E. Brown | |||||
Chief Financial Officer (Principal Financial Officer) | Controller (Principal Accounting Officer) | |||||||
/s/ | Mary Lee Coleman | /s/ | Jerry E. Herbst | |||||
Director | Director | |||||||
/s/ | Krestine M. Corbin | /s/ | John F. O’Reilly | |||||
Director | Director | |||||||
/s/ | Theodore J. Day | /s/ | Clyde T. Turner | |||||
Director | Director | |||||||
/s/ | James R. Donnelley | /s/ | Joseph B. Anderson, Jr. | |||||
Director | Director | |||||||
/s/ | Philip G. Satre | /s/ | Donald D. Snyder. | |||||
Director | Director | |||||||
/s/ | Michael W. Yackira | /s/ | Brian J. Kennedy | |||||
Director | Director |
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SCHEDULE 1
CONDENSED BALANCE SHEETS
(Dollars in Thousands)
December 31, | ||||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Investments and other property, net (Note 4) | $ | 3,045,872 | $ | 2,539,689 | ||||
Current Assets: | ||||||||
Cash and cash equivalents | 25,206 | 35,185 | ||||||
Accounts receivable less allowance for uncollectible accounts: | ||||||||
2006-$0 | 1,755 | — | ||||||
Dividends receivable from subsidiary | 20,208 | 321 | ||||||
Materials, supplies and fuel, at average cost | 13 | 2 | ||||||
Deferred income taxes | 138 | — | ||||||
Other | 420 | 946 | ||||||
47,740 | 36,454 | |||||||
Deferred Charges and Other Assets: | ||||||||
Goodwill (Note 18) | 469 | 22,877 | ||||||
Regulatory asset for pension plans | 2,906 | — | ||||||
Unamortized debt issuance costs | 10,269 | 13,545 | ||||||
Deferred income tax benefit | 105,010 | 148,451 | ||||||
Other | 1,611 | 68,240 | ||||||
120,265 | 253,113 | |||||||
TOTAL ASSETS | $ | 3,213,877 | $ | 2,829,256 | ||||
CAPITALIZATION AND LIABILITIES | ||||||||
Capitalization: | ||||||||
Common shareholders’ equity | $ | 2,622,297 | $ | 2,060,154 | ||||
Long-term debt | 550,545 | 661,255 | ||||||
3,172,842 | 2,721,409 | |||||||
Current Liabilities: | ||||||||
Accounts payable | 8,581 | 75,723 | ||||||
Accrued interest | 12,216 | 14,561 | ||||||
Accrued salaries and benefits | 2,948 | 2,617 | ||||||
Deferred income taxes | — | 144 | ||||||
Accrued taxes | 212 | 182 | ||||||
23,957 | 93,227 | |||||||
Commitments and Contingencies (Note 13) | ||||||||
Deferred Credits and Other Liabilities: | ||||||||
Accrued retirement benefits | 11,691 | 11,124 | ||||||
Other | 5,387 | 3,496 | ||||||
17,078 | 14,620 | |||||||
TOTAL CAPITALIZATION AND LIABILITIES | $ | 3,213,877 | $ | 2,829,256 | ||||
SCHEDULE 1
CONDENSED INCOME STATEMENTS
(Dollars in Thousands)
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
OPERATING EXPENSES: | ||||||||||||
Operation: | ||||||||||||
Impairment of goodwill | $ | — | $ | — | $ | 11,695 | ||||||
Other | 5,952 | 19,006 | 15,114 | |||||||||
Taxes: | ||||||||||||
Income taxes (benefits) | (23,595 | ) | (33,078 | ) | (39,332 | ) | ||||||
Other than income | 172 | 152 | 132 | |||||||||
(17,471 | ) | (13,920 | ) | (12,391 | ) | |||||||
OPERATING INCOME | 17,471 | 13,920 | 12,391 | |||||||||
OTHER INCOME (EXPENSE): | ||||||||||||
Early debt conversion fees | — | (54,000 | ) | — | ||||||||
Subsidiary earnings | 324,152 | 185,777 | 122,626 | |||||||||
Other income | 4,236 | 1,573 | 545 | |||||||||
Other expense | (6,595 | ) | (2,627 | ) | (1,379 | ) | ||||||
Income (taxes) / benefits | 1,157 | 18,799 | 596 | |||||||||
322,950 | 149,522 | 122,388 | ||||||||||
Total Income Before Interest Charges | 340,421 | 163,442 | 134,779 | |||||||||
INTEREST CHARGES: | ||||||||||||
Long-term debt | 51,431 | 74,323 | 88,323 | |||||||||
Other | 11,539 | 6,882 | 17,885 | |||||||||
62,970 | 81,205 | 106,208 | ||||||||||
Net Income Applicable to Common Stock | $ | 277,451 | $ | 82,237 | $ | 28,571 | ||||||
Amount per share basic and diluted — (Note 7) | ||||||||||||
Net Income Applicable to Common Stock | $ | 1.33 | $ | 0.44 | $ | 0.16 | ||||||
Weighted Average Shares of Common Stock Outstanding — basic | 208,531,134 | 185,548,314 | 183,080,475 | |||||||||
Weighted Average Shares of Common Stock Outstanding — diluted | 209,020,896 | 185,932,504 | 183,400,303 | |||||||||
SCHEDULE 1
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net Cash used by Operating Activities | (59,166 | ) | (147,993 | ) | (130,541 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Investments in subsidiaries and other property — net | (284,490 | ) | (231,182 | ) | (7,853 | ) | ||||||
Dividends received from subsidiaries | 161,793 | 65,819 | 57,152 | |||||||||
Net Cash used by Investing Activities | (122,697 | ) | (165,363 | ) | 49,299 | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Change in restricted cash and investments | — | 21,677 | 21,652 | |||||||||
Proceeds from issuance of long-term debt | — | 220,211 | 335,000 | |||||||||
Retirement of long-term debt | (110,710 | ) | (132,949 | ) | (290,883 | ) | ||||||
Sale of common stock, net of issuance cost | 282,594 | 236,208 | 3,488 | |||||||||
Net Cash from Financing Activities | 171,884 | 345,147 | 69,257 | |||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | (9,979 | ) | 31,791 | (11,985 | ) | |||||||
Beginning Balance in Cash and Cash Equivalents | 35,185 | 3,394 | 15,379 | |||||||||
Ending Balance in Cash and Cash Equivalents | $ | 25,206 | $ | 35,185 | $ | 3,394 | ||||||
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Schedule II — Consolidated Valuation and Qualifying Accounts
For The Years Ended December 31, 2006, 2005 and 2004
(Dollars in Thousands)
Provision for Uncollectible Accounts | ||||
Balance at January 1, 2004 | $ | 44,917 | ||
Provision charged to income | 10,813 | |||
Amounts written off, less recoveries | (19,533 | ) | ||
Balance at December 31, 2004 | $ | 36,197 | ||
Balance at January 1, 2005 | $ | 36,197 | ||
Provision charged to income | 9,550 | |||
Amounts written off, less recoveries | (9,519 | ) | ||
Balance at December 31, 2005 | $ | 36,228 | ||
Balance at January 1, 2006 | $ | 36,228 | ||
Provision charged to income | 13,476 | |||
Amounts written off, less recoveries | (10,138 | ) | ||
Balance at December 31, 2006 | $ | 39,566 | ||
Schedule II — Consolidated Valuation and Qualifying Accounts
For The Years Ended December 31, 2006, 2005 and 2004
(Dollars in Thousands)
Provision for Uncollectible Accounts | ||||
Balance at January 1, 2004 | $ | 40,297 | ||
Provision charged to income | 7,794 | |||
Amounts written off, less recoveries | (17,190 | ) | ||
Balance at December 31, 2004 | $ | 30,901 | ||
Balance at January 1, 2005 | $ | 30,901 | ||
Provision charged to income | 6,966 | |||
Amounts written off, less recoveries | (7,481 | ) | ||
Balance at December 31, 2005 | $ | 30,386 | ||
Balance at January 1, 2006 | $ | 30,386 | ||
Provision charged to income | 10,795 | |||
Amounts written off, less recoveries | (8,347 | ) | ||
Balance at December 31, 2006 | $ | 32,834 | ||
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Schedule II — Consolidated Valuation and Qualifying Accounts
For The Years Ended December 31, 2006, 2005 and 2004
(Dollars in Thousands)
Provision for Uncollectible Accounts | ||||
Balance at January 1, 2004 | $ | 4,620 | ||
Provision charged to income | 3,019 | |||
Amounts written off, less recoveries | (2,343 | ) | ||
Balance at December 31, 2004 | $ | 5,296 | ||
Balance at January 1, 2005 | $ | 5,296 | ||
Provision charged to income | 2,584 | |||
Amounts written off, less recoveries | (2,038 | ) | ||
Balance at December 31, 2005 | $ | 5,842 | ||
Balance at January 1, 2006 | $ | 5,842 | ||
Provision charged to income | 2,681 | |||
Amounts written off, less recoveries | (1,791 | ) | ||
Balance at December 31, 2006 | $ | 6,732 | ||
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• | Restated and Amended Articles of Incorporation of Sierra Pacific Resources, dated May 24, 2006 (filed as Exhibit 3.1 to Form 10-Q for quarter ended June 30, 2006). | ||
• | By-laws of Sierra Pacific Resources as amended through May 3, 2005 (filed as Exhibit 3.1 to Form 8-K filed May 9, 2005). |
• | Restated Articles of Incorporation of Nevada Power Company, dated July 28, 1999 (filed as Exhibit 3(B) to Form 10-K for year ended December 31, 1999). | ||
• | Amended and Restated By-Laws of Nevada Power Company dated July 28, 1999 (filed as Exhibit 3(C) to Form 10-K for year ended December 31, 1999). |
• | Restated Articles of Incorporation of Sierra Pacific Power Company dated October 25, 2006 (filed as Exhibit 3.1 to Form 10-Q for the quarter ended September 30, 2006). | ||
• | By-laws of Sierra Pacific Power Company, as amended through November 13, 1996 (filed as Exhibit (3)(A) to Form 10-K for the year ended December 31, 1996). | ||
• | Articles of Incorporation of Piñon Pine Corp., dated December 11, 1995 (filed as Exhibit (3)(A) to Form 10-K for the year ended December 31, 1995). | ||
• | Articles of Incorporation of Piñon Pine Investment Co., dated December 11, 1995 (filed as Exhibit (3)(B) to Form 10-K for the year ended December 31, 1995). | ||
• | Agreement of Limited Liability Company of Piñon Pine Company, L.L.C., dated December 15, 1995, between Piñon Pine Corp., Piñon Pine Investment Co. and GPSF-B INC 1995 (filed as Exhibit (3)(C) to Form 10-K for the year ended December 31, 1995). | ||
• | Amended and Restated Limited Liability Company Agreement of SPPC Funding LLC dated as of April 9, 1999, in connection with the issuance of California rate reduction bonds (filed as Exhibit (3)(A) to Form 10-K for the year ended December 31, 1999). |
• | Indenture between Sierra Pacific Resources and The Bank of New York, dated May 1, 2000, for the issuance of debt securities (filed as Exhibit 4.1 to Form 8-K dated May 22, 2000). |
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• | Officers’ Certificate dated August 12, 2005, establishing the terms of Sierra Pacific Resources’ 6 3/4% Senior Notes due 2017 (filed as Exhibit 4.1 to Form 10-Q for the quarter ended September 30, 2005). | ||
• | Form of Sierra Pacific Resources’ 6 3/4% Senior Notes due 2017 (filed as Exhibit 4.2 to Form 10-Q for the quarter ended September 30, 2005). | ||
• | Officers’ Certificate dated June 14, 2005, establishing the terms of Sierra Pacific Resources’ 7.803% Senior Notes due 2007 (filed as Exhibit 99.1 to Form 8-K filed June 16, 2005). | ||
• | Indenture, dated March 19, 2004, between Sierra Pacific Resources and the Bank of New York, as Trustee, in connection with the issuance of 8 5/8% Senior Notes due 2014 (filed as Exhibit 4.1 to Form 10-Q for the quarter ended March 31, 2004). | ||
• | Form of Sierra Pacific Resources’ 8 5/8% Senior Notes due 2014 (filed as Exhibit 4.1 to Form 10-Q for the quarter ended March 31, 2004). |
• | General and Refunding Mortgage Indenture, dated May 1, 2001, between Nevada Power Company and The Bank of New York, as Trustee (filed as Exhibit 4.1(a) to Form 10-Q for the quarter ended June 30, 2001). | ||
• | First Supplemental Indenture, dated as of May 1, 2001, establishing Nevada Power Company’s 8.25% General and Refunding Mortgage Bonds, Series A, due June 1, 2011 (filed as Exhibit 4.1(b) to Form 10-Q for the quarter ended June 30, 2001). | ||
• | Officer’s Certificate establishing the terms of Nevada Power Company’s 8.25% General and Refunding Mortgage Bonds, Series A, due June 1, 2011 (filed as Exhibit 4.l(c) to Form 10-Q for the quarter ended June 30, 2001). | ||
• | Form of Nevada Power Company’s 8.25% General and Refunding Mortgage Bonds, Series A, due June 1, 2011 (filed as Exhibit 4.1(d) to Form 10-Q for the quarter ended June 30, 2001). | ||
• | Officer’s Certificate establishing the terms of Nevada Power Company’s 9% General and Refunding Mortgage Notes, Series G, due 2013 (filed as Exhibit 4.1 to Form 10-Q for the quarter ended September 30, 2003). | ||
• | Form of Nevada Power Company’s 9% General and Refunding Mortgage Notes, Series G, due 2013 (filed as Exhibit 4.2 to Form 10-Q for the quarter ended September 30, 2003). | ||
• | Officer’s Certificate establishing the terms of Nevada Power Company’s 6 1/2% General and Refunding Mortgage Notes, Series I, due 2012 (filed as Exhibit 4.1 to Form 10-Q for quarter ended June 30, 2004). | ||
• | Form of Nevada Power Company’s 6 1/2% General and Refunding Mortgage Notes, Series I due 2012 (filed as Exhibit 4.2 to Form 10-Q for quarter ended June 30, 2004). | ||
• | Officer’s Certificate establishing the terms of Nevada Power Company’s 5 7/8% General and Refunding Mortgage Notes, Series L, due 2015 (filed as Exhibit 4(A) to Form 10-K filed for year ended December 31, 2005). | ||
• | Form of Nevada Power Company’s 5 7/8% General and Refunding Mortgage Notes, Series L, due 2015 (filed as Exhibit 4(B) to Form 10-K filed for year ended December 31, 2005). |
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• | Officer’s Certificate establishing the terms of Nevada Power Company’s 5.95% General and Refunding Mortgage Notes, Series M, due 2016 (filed as Exhibit 4(A) to Form 10-K for the year ended December 31, 2005). | ||
• | Form of Nevada Power Company’s 5.95% General and Refunding Mortgage Notes, Series M, due 2016 (filed as Exhibit 4(B) to Form 10-K for the year ended December 31, 2005). | ||
• | Officer’s Certificate establishing the terms of Nevada Power Company’s 6.650% General and Refunding Mortgage Notes, Series N, due 2036 (filed as Exhibit 4.1 to Form 10-Q for the quarter ended March 31, 2006. | ||
• | Form of Nevada Power Company’s 6.650% General and Refunding Mortgage Notes, Series N, due 2036 (filed as Appendix A to Exhibit 4.1 to Form 10-Q for the quarter ended March 31, 2006). | ||
• | Officer’s Certificate establishing the terms of Nevada Power Company’s 6.50% General and Refunding Mortgage Notes, Series O, due 2018 (filed as Exhibit 4.7 to Form S-4 filed June 7, 2006). | ||
• | Form of 6.50% General and Refunding Mortgage Notes, Series O, due 2018 (included in Exhibit 4.7) (filed as Appendix A to Exhibit 4.7 to Form S-4 filed June 7, 2006). |
• | General and Refunding Mortgage Indenture, dated as of May 1, 2001, between Sierra Pacific Power Company and The Bank of New York as Trustee (filed as Exhibit 4.2(a) to Form 10-Q for the quarter ended June 30, 2001). | ||
• | First Supplemental Indenture, dated as of May 1, 2001, establishing Sierra Pacific Power Company’s 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 (filed as Exhibit 4.2(b) to Form 10-Q for the quarter ended June 30, 2001). | ||
• | *(A) Second Supplemental Indenture, dated as of October 30, 2006, to subject additional properties of Sierra Pacific Power Company located in the State of California to the lien of the General and Refunding Mortgage Indenture and to correct defects in the original Indenture. | ||
• | Officer’s Certificate establishing the terms of Sierra Pacific Power Company’s 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 (filed as Exhibit 4.2(c) to Form 10-Q for the quarter ended June 30, 2001). | ||
• | Form of Sierra Pacific Power Company’s 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 (filed as Exhibit 4.2(d) to Form 10-Q for the quarter ended June 30, 2001). | ||
• | Officer’s Certificate establishing the terms of Sierra Pacific Power Company’s 6 1/4% General and Refunding Mortgage Bonds, Series H, due 2012 (filed as Exhibit 4.4 to Form 10-Q for the quarter ended March 31, 2004). | ||
• | Form of Sierra Pacific Power Company’s 6 1/4% General and Refunding Mortgage Bonds, Series H, due 2012 (filed as Exhibit 4.5 to Form 10-Q for the quarter ended March 31, 2004). | ||
• | Officer’s Certificate establishing the terms of Sierra Pacific Power Company’s General and Refunding Mortgage Notes, Series J, due 2009 (filed as Exhibit 4(E) to Form 10-K for the year ended December 31, 2004). |
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• | Form of Sierra Pacific Power Company’s General and Refunding Mortgage Notes, Series J, due 2009 (filed as Exhibit 4(F) to Form 10-K for the year ended December 31, 2004). | ||
• | Officer’s Certificate establishing the terms of Sierra Pacific Power Company’s 6% General and Refunding Mortgage Notes, Series M, due 2016 (filed as Exhibit 4.4 to Form 10-Q for the quarter ended March 31, 2006). | ||
• | Form of Sierra Pacific Power Company’s 6% General and Refunding Mortgage Notes, Series M, due 2016 (filed as Appendix A to Exhibit 4.4 to Form 10-Q for the quarter ended March 31, 2006). | ||
• | Indenture dated as of April 9, 1999 between SPPC Funding LLC and Bankers Trust Company of California, N.A., in connection with the issuance of California rate reduction bonds (filed as Exhibit 4(C) to Form 10-K for the year ended December 31, 1999). | ||
• | First Series Supplement dated as of April 9, 1999 to Indenture between SPPC Funding LLC and Bankers Trust Company of California, N.A., in connection with the issuance of California rate reduction bonds (filed as Exhibit 4(D) to Form 10-K for year ended December 31, 1999). | ||
• | Form of SPPC Funding LLC Notes, Series 1999-1, in connection with the issuance of California rate reduction bonds (filed as Exhibit 4(E) to Form 10-K for year ended December 31, 1999). |
• | Employment Agreement for Walter M. Higgins (filed as Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2003). | ||
• | Amendment to Employment Agreement for Walter M. Higgins (filed as Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2006). | ||
• | Michael W. Yackira Employment Letter dated March 17, 2003 (filed as Exhibit 10(A) to Form 10-K for the year ended December 31, 2002). | ||
• | Paul J. Kaleta Employment Letter dated January 9, 2006 (filed as Exhibit 10(A) to Form 10-K for the year ended December 31, 2005). | ||
• | Stephen R. Wood Employment Letter dated June 29, 2004 (filed as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2004). | ||
• | Roberto Denis Employment Letter dated July 11, 2003 (filed as Exhibit 10(B) to Form 10-K for the year ended December 31, 2003). | ||
• | Change in Control Agreement by and among Sierra Pacific Resources and the following officers (individually): Jeffrey L. Ceccarelli, Donald L. Shalmy, Michael W. Yackira, Roberto Denis, Stephen R. Wood and Paul J. Kaleta in substantially the same form as the Change in Control Agreement dated May 21, 2001 by and between Sierra Pacific Resources and Dennis D. Schiffel (filed as Exhibit 10(C) to Form 10-K for the year ended December 30, 2001). | ||
• | Change in Control Agreement by and among Sierra Pacific Resources and the following officers (individually): Mary O. Simmons and John E. Brown in substantially the same form as the Change in Control Agreement dated May 21, 2001 by and between Sierra Pacific Resources and John E. Brown (filed as Exhibit 10(D) to Form 10-K for the year ended December 30, 2001). | ||
• | Sierra Pacific Resources’ 2004 Executive Long-Term Incentive Plan (filed as Appendix A to 2004 Proxy Statement). |
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• | Sierra Pacific Resources’ Non-Employee Director Stock Plan (filed as Exhibit 99.2 to Form S-8 dated December 13, 1999). | ||
• | Sierra Pacific Resources’ Employee Stock Purchase Plan (filed as Exhibit 99.3 to Form S-8 dated December 13, 1999). |
• | *(A) Lease, dated December 11, 2006, between Nevada Power Company as lessee and Beltway Business Park Warehouse No. 2, LLC as lessor, relating to Nevada Power Company’s South Operations Center facility. | ||
• | Second Amended and Restated Credit Agreement, dated as of November 4, 2005, among Nevada Power Company, Wachovia Bank, as administrative agent, the Lenders from time to time party thereto and the other parties named therein (filed as Exhibit 10.1 to the Form 10-Q for the quarter ended September 30, 2005). | ||
• | Amendment and Consent, dated April 19, 2006, to the Second Amended and Restated Credit Agreement, dated November 4, 2005, among Nevada Power Company, Wachovia Bank, National Association, as Administrative Agent, the Lenders from time to time party thereto and the other parties named therein (filed as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2006). | ||
• | Financing Agreement between Clark County, Nevada and Nevada Power Company, dated August 1, 2006 (relating to Clark County, Nevada $39,500,000 Pollution Control Refund Revenue Bonds Series 2006) (filed as Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2006). | ||
• | Financing Agreement between Coconino County, Arizona Pollution Control Corporation and Nevada Power Company, dated August 1, 2006 (relating to Coconino County, Arizona $40,000,000 Pollution Control Corporation Refunding Revenue Bonds Series 2006A) (filed as Exhibit 10.2 to Form 10-Q for the quarter ended September 30, 2006). | ||
• | Financing Agreement between Coconino County, Arizona Pollution Control Corporation and Nevada Power Company, dated August 1, 2006 (relating to Coconino County, Arizona Pollution Control Corporation $13,000,000 Pollution Control Refunding Revenue Bonds Series 2006B) (filed as Exhibit 10.3 to Form 10-Q for the quarter ended September 30, 2006). | ||
• | Financing Agreement No. 1 between Clark County, Nevada and Nevada Power Company, dated June 1, 2000 (Series 2000A) (filed as Exhibit 10(O) to Form 10-K for the year ended December 31, 2000). | ||
• | Financing Agreement No. 2 between Clark County, Nevada and Nevada Power Company, dated June 1, 2000 (Series 2000B) (filed as Exhibit 10(P) to Form 10-K for the year ended December 31, 2000). | ||
• | Financing Agreement between Clark County, Nevada and Nevada Power Company, dated November 1, 1997 (relating to Clark County, Nevada $52,285,000 Industrial Development Revenue Bonds, Series 1997A) (filed as Exhibit 10.83 to Form 10-K, File No. 1-4698, for the year ended December 31, 1997). | ||
• | Financing Agreement between Clark County, Nevada and Nevada Power Company dated October 1, 1995 (relating to Clark County, Nevada $76,750,000 Industrial Development Revenue Bonds, Series 1995A) (filed as Exhibit 10.75 to Form 10-K, File No. 1-4698, for the year ended December 31, 1995). |
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• | Financing Agreement between Clark County, Nevada and Nevada Power Company dated October 1, 1995 (relating to Clark County, Nevada $85,000,000 Industrial Development Refunding Revenue Bonds, Series 1995B) (filed as Exhibit 10.76 to Form 10-K, File No. 1-4698, for the year ended December 31, 1995). | ||
• | Financing Agreement between Clark County, Nevada and Nevada Power Company dated October 1, 1995 (relating to Clark County, Nevada $76,750,000 Industrial Development Revenue Bonds, Series 1995A and $44,000,000 Industrial Development Refunding Revenue Bonds, Series 1995C) (filed as Exhibit 10.77 to Form 10-K, File No. 1-1698, for the year ended December 31, 1995). | ||
• | Financing Agreement between Clark County, Nevada and Nevada Power Company dated October 1, 1995 (relating to Clark County, Nevada $20,300,000 Pollution Control Refunding Revenue Bonds, Series 1995D) (filed as Exhibit 10.78 to Form 10-K, File No. 1-4698, for the year ended December 31, 1995). | ||
• | Financing Agreement between Clark County, Nevada and Nevada Power Company dated October 1, 1992 (Relating to Industrial Development Refunding Revenue Bonds, Series 1992C) (filed as Exhibit 10.67 to Form 10-K, File No. 1-4698, for the year ended December 31, 1992). | ||
• | Financing Agreement between Clark County, Nevada and Nevada Power Company dated June 1, 1992 (Relating to Clark County, Nevada $105,000,000 Industrial Development Revenue Bonds, Series 1992A) (filed as Exhibit 10.65 to Form 10-K, File No. 1-4698, for the year ended December 31, 1992). | ||
• | Collective Bargaining Agreement dated as of February 1, 2005, effective through February 1, 2008, between Nevada Power Company and the International Brotherhood of Electrical Workers Local Union No. 396 (filed as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2005). | ||
• | Engineering, Procurement and Construction Agreement dated October 13, 2004 between Nevada Power Company and Fluor Enterprises, Inc. and Exhibit A thereto (filed as Exhibit 10.3 and Exhibit 10.4 to Form 10-Q for the quarter ended September 30, 2004). | ||
• | Contract for Sale of Electrical Energy between the State of Nevada and Nevada Power Company, dated July 8, 1987 (filed as Exhibit 10.39 to Form 10-K, File No. 1-4698, for the year ended December 31, 1987). | ||
• | Participation Agreement Reid Gardner Unit No. 4 dated July 11, 1979 between Nevada Power Company and California Department of Water Resources (filed as Exhibit 5.34 to Form S-7, File No. 2-65097). | ||
• | Amended Mohave Project Coal Slurry Pipeline Agreement dated May 26, 1976 between Peabody Coal Company and Black Mesa Pipeline, Inc. (Exhibit B to Exhibit 10.18) (filed as Exhibit 5.36 to Form S-7, File No. 2-56356). | ||
• | Amended Mohave Project Coal Supply Agreement dated May 26, 1976 between Nevada Power Company and Southern California Edison Company, Department of Water and Power of the City of Los Angeles, Salt River Project Agricultural Improvement and Power District and the Peabody Coal Company (filed as Exhibit 5.35 to Porto S-7, File No. 2-56356). | ||
• | Navajo Project Co-Tenancy Agreement dated March 23, 1976 between Nevada Power Company, Arizona Public Service Company, Department of Water and Power of the City of Los Angeles, Salt River Project Agricultural Improvement and Power District, Tucson Gas & Electric Company and the United States of America (filed as Exhibit 5.31 to Form 8-K, File No. 1-4696, April 1974). |
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• | Mohave Operating Agreement dated July 6, 1970 between Nevada Power Company, Salt River Project Agricultural Improvement and Power District, Southern California Edison Company and Department of Water and Power of the City of Los Angeles (filed as Exhibit 13.26F to Form S-1, File No. 2-38314). | ||
• | Navajo Project Coal Supply Agreement dated June 1, 1970 between Nevada Power Company, the United States of America, Arizona Public Service Company, Department of Water and Power of the City of Los Angeles, Salt River Project Agricultural District Tucson Gas & Electric Company and the Peabody Coal Company (filed as Exhibit 13.27B to Form S-1, File No. 2-38314). | ||
• | Eldorado System Conveyance and Co-Tenancy Agreement dated December 20, 1967 between Nevada Power Company and Salt River Project Agricultural Improvement and Power District and Southern California Edison Company (filed as Exhibit 13.30 to Form S-9, File No. 2-28348). | ||
• | Mohave Project Plant Site Conveyance and Co-Tenancy Agreement dated May 29, 1967 between Nevada Power Company and Salt River Project Agricultural Improvement and Power District and Southern California Edison Company (filed as Exhibit 13.27 to Form S-9, File No. 2-28348). | ||
• | Settlement Agreement dated December 19, 2003, between Nevada Power Company, Pinnacle West Energy Corporation and Southern Nevada Water Authority (filed as Exhibit 10(G) to the Form 10-K for the year ended December 31, 2003). | ||
• | Sublease Agreement between Powveg Leasing Corp., as Lessor and Nevada Power Company as lessee, dated January 1, 1984 for lease of administrative headquarters (the primary term of the sublease ends in 2014 and the lessee has the option to extend the term up to 25 additional years) (filed as Exhibit 10.31 to Form 10-K, File No. 1-4698, for the year ended December 31, 1983). |
• | Amended and Restated Credit Agreement, dated as of November 4, 2005 among Sierra Pacific Power Company, Wachovia Bank, National Association, as administrative agent, the Lenders from time to time party thereto and the other parties named therein (filed as Exhibit 10.2 to the Form 10-Q for the quarter ended September 30, 2005). | ||
• | Amendment and Consent, dated April 19, 2006, to the Amended and Restated Credit Agreement, dated November 4, 2005, among Sierra Pacific Power Company, Wachovia Bank, National Association, as Administrative Agent, the Lenders from time to time party thereto and the other parties named therein (filed as Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2006). | ||
• | *(B) Financing Agreement dated November 1, 2006 between Humboldt County, Nevada and Sierra Pacific Power Company dated November 1, 2006 (relating to Humboldt County, Nevada $49,750,000 Pollution Control Refunding Revenue Bonds (Sierra Pacific Power Company Project) Series 2006). | ||
• | *(C) Financing Agreement dated November 1, 2006 between Washoe County, Nevada and Sierra Pacific Power Company dated November 1, 2006 (relating to Washoe County, Nevada $58,750,000 Gas Facilities Control Refunding Revenue Bonds (Sierra Pacific Power Company Project) Series 2006A). | ||
• | *(D) Financing Agreement dated November 1, 2006 between Washoe County, Nevada and Sierra Pacific Power Company dated November 1, 2006 (relating to Washoe County, Nevada $75,000,000 Water Facilities Control Refunding Revenue Bonds (Sierra Pacific Power Company Project) Series 2006B). | ||
• | *(E) Financing Agreement dated November 1, 2006 between Washoe County, Nevada and Sierra Pacific Power Company dated November 1, 2006 (relating to Washoe County, Nevada $84,800,000 Gas and Water Facilities Control Refunding Revenue Bonds (Sierra Pacific Power Company Project) Series 2006C). | ||
• | Financing Agreement dated as of March 1, 2001 between Sierra Pacific Power Company and Washoe County, Nevada relating to the Washoe County, Nevada Water Facilities Refunding Revenue Bonds (Sierra Pacific Power Company Project) Series 2001 (filed as Exhibit 10(O) to Form 10-K for the year ended December 31, 2001). |
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• | Transition Property Purchase and Sale Agreement dated as of April 9, 1999 between Sierra Pacific Power Company and SPPC Funding LLC in connection with the issuance of California rate reduction bonds (filed as Exhibit 10(B) to Form 10-K for the year ended December 31, 1999). | ||
• | Transition Property Servicing Agreement dated as of April 9, 1999 between Sierra Pacific Power Company and SPPC Funding LLC in connection with the issuance of California rate reduction bonds (filed as Exhibit 10(C) to Form 10-K for the year ended December 31, 1999). | ||
• | Administrative Services Agreement dated as of April 9, 1999 between Sierra Pacific Power Company and SPPC Funding LLC in connection with the issuance of California rate reduction bonds (filed as Exhibit 10(D) b Form 10-K for the year ended December 31, 1999). | ||
• | Collective Bargaining Agreement dated January 1, 2003, effective through December 31, 2005 between Sierra Pacific Power Company and the International Brotherhood of Electrical Workers Local No. 1245 (filed as Exhibit 10(J) to the Form 10-K for the year ended December 31, 2003). | ||
• | Settlement Agreement and Mutual Release dated May 8, 1992 between Sierra Pacific Power Company and Coastal States Energy Company (filed as Exhibit (10)(D) to Form 10-K for the year ended December 31, 1992; confidential portions omitted and filed separately with the Securities and Exchange Commission). | ||
• | Coal Supply Agreement dated January 1, 2002 between Sierra Pacific Power Company and Arch Coal Sales Company, Inc. (5 year term ending on December 31, 2006) (filed as Exhibit 10(R) to Form 10-K for the year ended December 31, 2001). | ||
• | Coal Sales Agreement dated May 16, 1978 between Sierra Pacific Power Company and Coastal States Energy Company (confidential portions omitted and flied separately with lie Securities and Exchange Commission) (filed as Exhibit 5-GG to Registration No. 2-62476). | ||
• | Amendment No. 1 dated November 8, 1983 to Coal Sales Agreement dated May 16, 1978 between Sierra Pacific Power Company and Coastal States Energy Company (filed as Exhibit(10)(B) to Form 10-K for the year ended December 31, 1991). | ||
• | Amendment No. 2 dated February 25, 1987 to Coal Sales Agreement dated May 16, 1978 between Sierra Pacific Power Company and Coastal Stores Energy Company (filed as Exhibit (10)(A) to Form 10-K for the year ended December 31, 1993). | ||
• | Amendment No. 3 dated May 8, 1992 to Coal Sales Agreement dated May 16, 1978 between Sierra Pacific Power Company and Coastal States Energy Company (filed as Exhibit (10(B) to Form 10-K for the year ended December 31, 1992; confidential portions omitted and filed separately with the Securities and Exchange Commission). | ||
• | Lease dated January 30, 1986 between Sierra Pacific Power Company and Silliman Associates Limited Partnership relating to the Company’s corporate headquarters building (filed as Exhibit(10)(I) to Form 10-K for the year ended December 31, 1992). | ||
• | Letter of Amendment dated May 18, 1987 to Lease dated January 30, 1986 between Sierra Pacific Power Company and Silliman Associates Limited Partnership relating to the company’s corporate headquarters building (filed as Exhibit (10)(K) to Form 10-K for the year ended December 31, 1993). |
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• | Unit Redemption, Release, and Sale Agreement entered into by and among Touch America, Inc., Sierra Pacific Communications, and Sierra Touch America LLC, dated as of September 9, 2002 (filed as Exhibit 10.4 to Form 10-Q for the quarter ended September 30, 2002). | ||
• | Amended and Restated Conduit Sale Agreement dated September 11, 2002, made by and between Sierra Pacific Communications and Quest Communications Corporation (filed as Exhibit 10.5 to Form 10-Q for the quarter ended September 30, 2002). |
• | Nevada Power Company and Sierra Pacific Power Company are wholly owned subsidiaries and, in accordance with Paragraph 6 of SFAS No. 128 (Earnings Per Share), earnings per share data have been omitted. |
• | *(A) Statement regarding computation of Ratios of Earnings to Fixed Charges. |
• | *(B) Statement regarding computation of Ratios of Earnings to Fixed Charges. |
• | *(C) Statement regarding computation of Ratios of Earnings to Fixed Charges. |
• | Nevada Power Company, a Nevada Corporation. | ||
Sierra Pacific Power Company, a Nevada Corporation. | |||
Great Basin Energy Company, a Nevada Corporation. | |||
Lands of Sierra Inc., a Nevada Corporation. | |||
Sierra Energy Company dba e-three, a Nevada Corporation. | |||
Sierra Gas Holdings Company, a Nevada Corporation. | |||
Sierra Pacific Energy Company, a Nevada Corporation. | |||
Sierra Water Development Company, a Nevada Corporation. | |||
Tuscarora Gas Pipeline Company, a Nevada Corporation. | |||
Tuscarora Gas Operating Company, a Nevada Corporation. |
• | Nevada Electric Investment Company, a Nevada Corporation. | ||
Commonsite, Inc., a Nevada Corporation. |
• | Piñon Pine Company, a Nevada Corporation. | ||
Piñon Pine Investment Company, a Nevada Corporation. | |||
Piñon Pine Investment Co. LLC, a Nevada Limited Liability Company. | |||
GPSF-B, a Delaware Corporation. | |||
SPPC Funding LLC, a Delaware Limited Liability Company. |
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• | *(A) Consent of Independent Registered Public Accounting Firm in connection with Sierra Pacific Resources’ Registration Statements No. 333-77523 (Common Stock Investment Plan) on Form S-3, No. 333-92651 (Employees’ Stock Ownership Plan, Executive Long-Term Incentive Plan, and Non-Employee Director Stock Plan) on Form S-8, No. 333-72160 (Post-Effective Amendment to Registration) on Form S-3/A and Registration Statement No. 333-135752 (automatic shelf registration statement of securities of well-known seasoned issuers) on Form S-3. |
• | *(B) Consent of Independent Registered Public Accounting Firm in connection with Nevada Power Company’s Registration Statement on Form S-3, No. 333-130189 (shelf registration statement). |
• | *(C) Consent of Independent Registered Public Accounting Firm in connection with Sierra Pacific Power Company’s Registration Statement on Form S-3, No. 333-130191 (shelf registration statement). |
• | *(31.1) Annual Certification of Chief Executive Officer of Sierra Pacific Resources Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
• | *(31.2) Annual Certification of Chief Executive Officer of Nevada Power Company Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
• | *(31.3) Annual Certification of Chief Executive Officer of Sierra Pacific Power Company Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
• | *(31.4) Annual Certification of Chief Financial Officer of Sierra Pacific Resources Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
• | *(31.5) Annual Certification of Chief Financial Officer of Nevada Power Company Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
• | *(31.6) Annual Certification of Chief Financial Officer of Sierra Pacific Power Company Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
• | *(32.1) Certification of Chief Executive Officer of Sierra Pacific Resources Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
• | *(32.2) Certification of Chief Executive Officer of Nevada Power Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
• | *(32.3) Certification of Chief Executive Officer of Sierra Pacific Power Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
• | *(32.4) Certification of Chief Financial Officer of Sierra Pacific Resources Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
• | *(32.5) Certification of Chief Financial Officer of Nevada Power Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
• | *(32.6) Certification of Chief Financial Officer of Sierra Pacific Power Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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