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 | ||||||||||||||||||||||||
Nine Months ended September 30, | Year ended December 31, | LTM September 30, | ||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2008 | |||||||||||||||||||
Net Income Applicable to Common Stock | $ | 210,975 | $ | 193,583 | $ | 197,295 | $ | 277,451 | $ | 82,237 | $ | 214,687 | ||||||||||||
Interest charges | 213,500 | 210,037 | 279,788 | 311,088 | 284,927 | 283,251 | ||||||||||||||||||
Income taxes | 99,146 | 96,796 | 87,555 | 145,605 | 43,118 | 89,905 | ||||||||||||||||||
Depreciation and amortization | 185,656 | 174,787 | 235,532 | 228,875 | 214,662 | 246,401 | ||||||||||||||||||
EBITDA | $ | 709,277 | $ | 675,203 | $ | 800,170 | $ | 963,019 | $ | 624,944 | $ | 834,244 | ||||||||||||
EBITDA/Interest Expense | 3.32 | x | 3.21 | x | 2.86 | x | 3.10 | x | 2.19 | x | 2.95 | x | ||||||||||||
Debt/EBITDA | 6.77 | x | 6.59 | x | 5.31 | x | 4.16 | x | 6.20 | x | 5.76 | x | ||||||||||||
Sierra Pacific Resources | ||||||||||||||||||||||||
Net interest expense | $ | 213,500 | $ | 210,037 | $ | 279,788 | $ | 311,088 | $ | 284,927 | $ | 283,251 | ||||||||||||
Long-Term debt | $ | 4,793,078 | $ | 4,337,745 | $ | 4,137,864 | $ | 4,001,542 | $ | 3,817,122 | $ | 4,793,078 | ||||||||||||
Current maturities of long term debt | 9,794 | 109,614 | 110,285 | 8,348 | 58,909 | 9,794 | ||||||||||||||||||
Total Debt | $ | 4,802,872 | $ | 4,447,359 | $ | 4,248,149 | $ | 4,009,890 | $ | 3,876,031 | $ | 4,802,872 | ||||||||||||
Nevada Power Company | ||||||||||||||||||||||||
EBITDA | ||||||||||||||||||||||||
Nine Months ended September 30, | Year ended December 31, | LTM September 30, | ||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2008 | |||||||||||||||||||
Net Income | $ | 165,482 | $ | 161,280 | $ | 165,694 | $ | 224,540 | $ | 132,734 | $ | 169,896 | ||||||||||||
Interest charges | 130,732 | 132,155 | 174,667 | 176,612 | 134,657 | 173,244 | ||||||||||||||||||
Income taxes | 80,942 | 83,498 | 78,352 | 117,510 | 63,995 | 75,796 | ||||||||||||||||||
Depreciation and amortization | 120,855 | 112,745 | 152,139 | 141,585 | 124,098 | 160,249 | ||||||||||||||||||
EBITDA | $ | 498,011 | $ | 489,678 | $ | 570,852 | $ | 660,247 | $ | 455,484 | $ | 579,185 | ||||||||||||
EBITDA/Interest Expense | 3.81 | x | 3.71 | x | 3.27 | x | 3.74 | x | 3.38 | x | 3.34 | x | ||||||||||||
Debt/EBITDA | 5.99 | x | 5.48 | x | 4.44 | x | 3.61 | x | 4.88 | x | 5.15 | x | ||||||||||||
Nevada Power Company | ||||||||||||||||||||||||
Net interest expense | $ | 130,732 | $ | 132,155 | $ | 174,667 | $ | 176,612 | $ | 134,657 | $ | 173,244 | ||||||||||||
Long-Term debt | $ | 2,975,201 | $ | 2,677,193 | $ | 2,528,141 | $ | 2,380,139 | $ | 2,214,063 | $ | 2,975,201 | ||||||||||||
Current maturities of long term debt | 8,656 | 7,971 | 8,642 | 5,948 | 6,509 | 8,656 | ||||||||||||||||||
Total Debt | $ | 2,983,857 | $ | 2,685,164 | $ | 2,536,783 | $ | 2,386,087 | $ | 2,220,572 | $ | 2,983,857 | ||||||||||||
Sierra Pacific Power Company | ||||||||||||||||||||||||
EBITDA | ||||||||||||||||||||||||
Nine Months ended September 30, | Year ended December 31, | LTM September 30, | ||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2008 | |||||||||||||||||||
Net Income | $ | 68,052 | $ | 57,528 | $ | 65,667 | $ | 57,709 | $ | 52,074 | $ | 76,191 | ||||||||||||
Interest charges | 51,458 | 45,199 | 60,735 | 71,506 | 69,067 | 66,994 | ||||||||||||||||||
Income taxes | 29,423 | 24,468 | 26,009 | 27,829 | 28,379 | 30,964 | ||||||||||||||||||
Depreciation and amortization | 64,801 | 62,043 | 83,393 | 87,279 | 90,569 | 86,151 | ||||||||||||||||||
EBITDA | $ | 213,734 | $ | 189,238 | $ | 235,804 | $ | 244,323 | $ | 240,089 | $ | 260,300 | ||||||||||||
EBITDA/Interest Expense | 4.15 | x | 4.19 | x | 3.88 | x | 3.42 | x | 3.48 | x | 3.89 | x | ||||||||||||
Debt/EBITDA | 6.05 | x | 6.40 | x | 5.03 | x | 4.39 | x | 4.14 | x | 4.97 | x | ||||||||||||
Sierra Pacific Power Company | ||||||||||||||||||||||||
Net interest expense | $ | 51,458 | $ | 45,199 | $ | 60,735 | $ | 71,506 | $ | 69,067 | $ | 66,994 | ||||||||||||
Long-Term debt | $ | 1,292,867 | $ | 1,110,166 | $ | 1,084,550 | $ | 1,070,858 | $ | 941,804 | $ | 1,292,867 | ||||||||||||
Current maturities of long term debt | 1,139 | 101,643 | 101,643 | 2,400 | 52,400 | 1,139 | ||||||||||||||||||
Total Debt | $ | 1,294,006 | $ | 1,211,809 | $ | 1,186,193 | $ | 1,073,258 | $ | 994,204 | $ | 1,294,006 | ||||||||||||