EXHIBIT 99.1
EBITDA represents net income before interest, taxes, depreciation and amortization. EBITDA is presented here because Sierra Pacific Resources (the “Company”) considers it a supplemental measure of its performance and believes debt-holders frequently use EBITDA to analyze operating performance and debt service capacity. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:
• | EBITDA does not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments; |
• | EBITDA does not reflect changes in, or cash requirements for, working capital needs; |
• | EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debts; |
• | Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and |
• | Other companies in this industry may calculate EBITDA differently than we do, which will limit its usefulness as a comparative measure. |
Because of these limitations, the Company’s management relies primarily on our GAAP results as a measure of the Company’s performance and uses EBITDA on a supplemental basis.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Sierra Pacific Resources | ||||||||||||||||||||||||
EBITDA | ||||||||||||||||||||||||
Six Months ended June 30, | Year ended December 31, | LTM June 30, | ||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2008 | |||||||||||||||||||
Net Income Applicable to Common Stock | $ | 60,192 | $ | 41,361 | $ | 197,295 | $ | 277,451 | $ | 82,237 | $ | 216,126 | ||||||||||||
Interest charges | 135,804 | 140,286 | 279,788 | 311,088 | 284,927 | 275,306 | ||||||||||||||||||
Income taxes | 33,735 | 22,547 | 87,555 | 145,605 | 43,118 | 98,743 | ||||||||||||||||||
Depreciation and amortization | 126,411 | 115,911 | 235,532 | 228,875 | 214,662 | 246,032 | ||||||||||||||||||
EBITDA | $ | 356,142 | $ | 320,105 | $ | 800,170 | $ | 963,019 | $ | 624,944 | $ | 836,207 | ||||||||||||
EBITDA/Interest Expense | 2.62 | x | 2.28 | x | 2.86 | x | 3.10 | x | 2.19 | x | 3.04 | x | ||||||||||||
Debt/EBITDA | 12.53 | x | 13.75 | x | 5.31 | x | 4.16 | x | 6.20 | x | 5.34 | x | ||||||||||||
Sierra Pacific Resources | ||||||||||||||||||||||||
Net interest expense | $ | 135,804 | $ | 140,286 | $ | 279,788 | $ | 311,088 | $ | 284,927 | $ | 275,306 | ||||||||||||
Long-Term debt | $ | 4,451,781 | $ | 4,291,833 | $ | 4,137,864 | $ | 4,001,542 | $ | 3,817,122 | $ | 4,451,781 | ||||||||||||
Current maturities of long term debt | 10,298 | 109,092 | 110,285 | 8,348 | 58,909 | 10,298 | ||||||||||||||||||
Total Debt | $ | 4,462,079 | $ | 4,400,925 | $ | 4,248,149 | $ | 4,009,890 | $ | 3,876,031 | $ | 4,462,079 | ||||||||||||
Nevada Power Company | ||||||||||||||||||||||||
EBITDA | ||||||||||||||||||||||||
Six Months ended June 30, | Year ended December 31, | LTM June 30, | ||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2008 | |||||||||||||||||||
Net Income | $ | 41,146 | $ | 28,186 | $ | 165,694 | $ | 224,540 | $ | 132,734 | $ | 178,654 | ||||||||||||
Interest charges | 82,461 | 88,260 | 174,667 | 176,612 | 134,657 | 168,868 | ||||||||||||||||||
Income taxes | 22,519 | 14,573 | 78,352 | 117,510 | 63,995 | 86,298 | ||||||||||||||||||
Depreciation and amortization | 82,953 | 74,594 | 152,139 | 141,585 | 124,098 | 160,498 | ||||||||||||||||||
EBITDA | $ | 229,079 | $ | 205,613 | $ | 570,852 | $ | 660,247 | $ | 455,484 | $ | 594,318 | ||||||||||||
EBITDA/Interest Expense | 2.78 | x | 2.33 | x | 3.27 | x | 3.74 | x | 3.38 | x | 3.52 | x | ||||||||||||
Debt/EBITDA | 11.67 | x | 12.95 | x | 4.44 | x | 3.61 | x | 4.88 | x | 4.50 | x | ||||||||||||
Nevada Power Company | ||||||||||||||||||||||||
Net interest expense | $ | 82,461 | $ | 88,260 | $ | 174,667 | $ | 176,612 | $ | 134,657 | $ | 168,868 | ||||||||||||
Long-Term debt | $ | 2,664,929 | $ | 2,655,630 | $ | 2,528,141 | $ | 2,380,139 | $ | 2,214,063 | $ | 2,664,929 | ||||||||||||
Current maturities of long term debt | 8,636 | 7,449 | 8,642 | 5,948 | 6,509 | 8,636 | ||||||||||||||||||
Total Debt | $ | 2,673,565 | $ | 2,663,079 | $ | 2,536,783 | $ | 2,386,087 | $ | 2,220,572 | $ | 2,673,565 | ||||||||||||
Sierra Pacific Power Company | ||||||||||||||||||||||||
EBITDA | ||||||||||||||||||||||||
Six Months ended June 30, | Year ended December 31, | LTM June 30, | ||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2008 | |||||||||||||||||||
Net Income | $ | 35,133 | $ | 31,976 | $ | 65,667 | $ | 57,709 | $ | 52,074 | $ | 68,824 | ||||||||||||
Interest charges | 32,466 | 30,237 | 60,735 | 71,506 | 69,067 | 62,964 | ||||||||||||||||||
Income taxes | 18,138 | 13,539 | 26,009 | 27,829 | 28,379 | 30,608 | ||||||||||||||||||
Depreciation and amortization | 43,458 | 41,317 | 83,393 | 87,279 | 90,569 | 85,534 | ||||||||||||||||||
EBITDA | $ | 129,195 | $ | 117,069 | $ | 235,804 | $ | 244,323 | $ | 240,089 | $ | 247,930 | ||||||||||||
EBITDA/Interest Expense | 3.98 | x | 3.87 | x | 3.88 | x | 3.42 | x | 3.48 | x | 3.94 | x | ||||||||||||
Debt/EBITDA | 9.78 | x | 10.14 | x | 5.03 | x | 4.39 | x | 4.14 | x | 5.10 | x | ||||||||||||
Sierra Pacific Power Company | ||||||||||||||||||||||||
Net interest expense | $ | 32,466 | $ | 30,237 | $ | 60,735 | $ | 71,506 | $ | 69,067 | $ | 62,964 | ||||||||||||
Long-Term debt | $ | 1,261,788 | $ | 1,085,764 | $ | 1,084,550 | $ | 1,070,858 | $ | 941,804 | $ | 1,261,788 | ||||||||||||
Current maturities of long term debt | 1,662 | 101,643 | 101,643 | 2,400 | 52,400 | 1,662 | ||||||||||||||||||
Total Debt | $ | 1,263,450 | $ | 1,187,407 | $ | 1,186,193 | $ | 1,073,258 | $ | 994,204 | $ | 1,263,450 | ||||||||||||