exhibit99-2.htm

EXHIBIT 99.2

Funds from Operations (“FFO”) and Adjusted FFO, which is FFO adjusted to account for cash inflows or outflows associated with the deferred energy accounts, are presented here because NV Energy, Inc. (the “Company”) believes that these measures are useful to investors because the rating agencies use these measures when determining a company’s credit ratings. The cost of the Company’s debt, the ability of the Company’s subsidiaries to pay dividends to the Company, and other capital and operational costs and expenses are impacted by the Company’s credit ratings. The Company believes that net income (loss) is the most directly comparable GAAP measure to FFO.

Since FFO excludes certain items includable in net income, reliance on the measure has limitations; management compensates for these limitations by using the measure simply as a supplemental measure that is weighed in the balance with other GAAP measures. FFO is not necessarily an indication of the Company’s cash flow available to fund cash needs. Additionally, it should not be used as an alternative to net income when evaluating the Company’s financial performance or to cash flow from operating, investing and financing activities when evaluating the Company’s liquidity or ability to make cash distributions or pay debt service. The FFO presented by the Company may not be comparable to the FFO presented by other utility companies.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
NV Energy, Inc.
Funds From Operations (FFO)
	Year Ended December 31,
	2009			2008			2007(1)

Net Income	$	182,936		$	208,887		$	197,295

Adjustments to reconcile net income to net cash from operating activities:

Depreciation and amortization		321,921			260,608			235,532
Deferred taxes and deferred investment tax credit		111,219			52,060			79,337
AFUDC (2) (debt and equity)		(44,503	)		(67,968	)		(57,776	)
Carrying charge on Lenzie Generating Station		-			-			(16,080	)
Reinstated interest on deferred energy		-			-			(11,076	)
Gain on sale of investment		-			-			(1,369	)
Other, net		(2,004	)		100,482			71,543
FFO (Before Deferred Energy)		569,569			554,069			497,406
Deferred energy		306,406			2,717			309,587
Adjusted FFO	$	875,975		$	556,786		$	806,993

Long-term debt	$	5,303,357		$	5,266,982		$	4,137,864
Current maturities of long-term debt		134,474			9,291			110,285
Total Debt	$	5,437,831		$	5,276,273		$	4,248,149


Interest expense (net of AFUDC - debt) (2)	$	334,314		$	300,857		$	279,788
AFUDC (2) (debt)		20,229			29,527			25,967
Adjusted Interest Expense	$	354,543		$	330,384		$	305,755

Total Debt/FFO		9.55	x		9.52	x		8.54	x
Total Debt/Adjusted FFO		6.21	x		9.48	x		5.26	x
FFO Interest Coverage		2.61	x		2.68	x		2.63	x
Adjusted FFO Interest Coverage		3.47	x		2.69	x		3.64	x
Total Shareholders' Equity	$	3,223,922		$	3,131,186		$	2,996,575
Total Capitalization (including current maturities of long-term debt)	$	8,661,753		$	8,407,459		$	7,244,724
Total Debt/Total Capitalization		62.78	%		62.76	%		58.64	%

(1)	Certain financial statement line items of prior year’s information have been re-grouped or reclassified to conform with current year presentation. The re-groupings or reclassifications have not affected previously reported results of operations or total shareholders’ equity.
(2)	Allowance for borrowed funds used during construction or allowance for equity funds used during construction.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
Nevada Power Company
Funds From Operations (FFO)
	Year Ended December 31,
	2009			2008			2007(1)

Net Income	$	134,284		$	151,431		$	165,694

Adjustments to reconcile net income to net cash from operating activities:

Depreciation and amortization		215,873			171,080			152,139
Deferred taxes and deferred investment tax credit		96,831			45,039			56,868
AFUDC (2) (debt and equity)		(38,209	)		(45,980	)		(29,057	)
Carrying charge on Lenzie Generating Station		-			-			(16,080	)
Reinstated interest on deferred energy		-			-			(11,076	)
Other, net		(34,291	)		73,209			38,821
FFO (Before Deferred Energy)		374,488			394,779			357,309
Deferred energy		216,629			4,211			218,992
Adjusted FFO	$	591,117		$	398,990		$	576,301

Long-term debt	$	3,535,440		$	3,385,106		$	2,528,141
Current maturities of long-term debt		119,474			8,691			8,642
Total Debt	$	3,654,914		$	3,393,797		$	2,536,783

Interest expense (net of AFUDC - debt) (2)	$	226,252		$	186,822		$	174,667
AFUDC (2) (debt)		17,184			20,063			13,196
Adjusted Interest Expense	$	243,436		$	206,885		$	187,863

Total Debt/FFO		9.76	x		8.60	x		7.10	x
Total Debt/Adjusted FFO		6.18	x		8.51	x		4.40	x
FFO Interest Coverage		2.54	x		2.91	x		2.90	x
Adjusted FFO Interest Coverage		3.43	x		2.93	x		4.07	x
Total Shareholder's Equity	$	2,650,039		$	2,627,567		$	2,376,740
Total Capitalization (including current maturities of long-term debt)	$	6,304,953		$	6,021,364		$	4,913,523
Total Debt/Total Capitalization		57.97	%		56.36	%		51.63	%

(1)	Certain financial statement line items of prior year’s information have been re-grouped or reclassified to conform with current year presentation. The re-groupings or reclassifications have not affected previously reported results of operations or total shareholder's equity.
(2)	Allowance for borrowed funds used during construction or allowance for equity funds used during construction.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
Sierra Pacific Power Company
Funds From Operations (FFO)
	Year Ended December 31,
	2009			2008			2007(1)

Net Income	$	73,085		$	90,582		$	65,667

Adjustments to reconcile net income to net cash from operating activities:

Depreciation and amortization		106,048			89,528			83,393
Deferred taxes and deferred investment tax credit		32,548			24,598			(36,713	)
AFUDC (2) (debt and equity)		(6,293	)		(21,988	)		(28,719	)
Other, net		30,368			22,872			29,451
Funds from Operations (Before Deferred Energy Costs)		235,756			205,592			113,079
Deferred energy		89,777			(1,494	)		90,595
Adjusted FFO	$	325,533		$	204,098		$	203,674

Long-term debt	$	1,282,225		$	1,395,987		$	1,084,550
Current maturities of long-term debt		15,000			600			101,643
Total Debt	$	1,297,225		$	1,396,587		$	1,186,193


Interest expense (net of AFUDC debt) (2)	$	69,413		$	72,712		$	60,735
AFUDC (2) (debt)		3,044			9,464			12,771
Adjusted Interest Expense	$	72,457		$	82,176		$	73,506

Total Debt/FFO		5.50	x		6.79	x		10.49	x
Total Debt/Adjusted FFO		3.98	x		6.84	x		5.82	x
FFO Interest Coverage		4.25	x		3.50	x		2.54	x
Adjusted FFO Interest Coverage		5.49	x		3.48	x		3.77	x
Total Shareholder's Equity	$	1,009,258		$	877,961		$	1,001,840
Total Capitalization (including current maturities of long-term debt)	$	2,306,483		$	2,274,548		$	2,188,033
Total Debt/Total Capitalization		56.24	%		61.40	%		54.21	%

(1)	Certain financial statement line items of prior year’s information have been re-grouped or reclassified to conform with current year presentation. The re-groupings or reclassifications have not affected previously reported results of operations or total shareholder's equity.
(2)	Allowance for borrowed funds used during construction or allowance for equity funds used during construction.