Sierra Pacific Power Medical and Dental Plan Trust

PART X, LINE 2:

“The trusts, established under the plan to hold the plan's net assets, are qualified pursuant to section 501(c)(9) of the internal revenue code (irc), and, accordingly, the trusts' net investment income is exempt from income taxes. The plan has not received a tax determination letter from the irs. However the plan administrator and the plan's tax counsel believe that the plan is currently designed and being operated in compliance with the applicable requirements of the irc. Therefore, no provision for income taxes has been included in the plan's financial statements. It is the intent of the company to make any modifications or amendments to the plan necessary to maintain such qualification. Accounting principles generally accepted in the united states of america require plan administrator to evaluate tax positions taken by the plan and recognize a tax liability (or asset) for any uncertain position that more likely than not would not be sustained upon examination by the irs. The plan administrator has analyzed the tax positions taken by the plan, and has concluded that as of december 31, 2013, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The plan is subject to routine audits by the irs; however, there are currently no audits for any tax periods in progress. The plan administrator believes it is no longer subject to income tax examinations for years prior to 2010.”