February 19, 2013

El Paso Electric Announces Fourth Quarter and Annual Financial Results

EL PASO, Texas--(BUSINESS WIRE)-- El Paso Electric (NYSE:EE):

Overview

  • For the fourth quarter of 2012, EE reported net income of $4.8 million, or $0.12 basic and diluted earnings per share. In the fourth quarter of 2011, EE reported net income of $5.5 million, or $0.14 and $0.13 basic and diluted earnings per share, respectively.
  • For the twelve months ended December 31, 2012, EE reported net income of $90.8 million, or $2.27 and $2.26 basic and diluted earnings per share, respectively. Net income for the twelve months ended December 31, 2011 was $103.5 million, or $2.49 and $2.48 basic and diluted earnings per share, respectively.

"We were pleased with the overall financial results for the year which included increased kWh retail sales reflecting steady customer growth in our service territory," said Tom Shockley, Chief Executive Officer. "Our earnings for the fourth quarter of 2012 were consistent with our expectations given the Texas rate decrease, which went into effect on May 1, 2012, and the milder winter weather in our service territory."

Earnings Summary

The table and explanations below present the major factors affecting 2012 net income relative to 2011 net income.

       

Quarter Ended

Twelve Months Ended

Pre-Tax
Effect

 

   

After-Tax
Net
Income

 

   

Basic
EPS

 

Pre-Tax
Effect

 

   

After-Tax
Net
Income

 

   

Basic
EPS

 

December 31, 2011

$ 5,453 $ 0.14 $ 103,539 $ 2.49
Changes in:
  Allowance for Funds Used During Construction $ 1,786 1,559 0.04 $ 1,991 1,745 0.04
Non Palo Verde O&M 2,123 1,401 0.04 (6,551 ) (4,324 ) (0.11 )
Depreciation and amortization expense 1,329 877 0.02 2,775 1,831 0.05
Transmission revenues 83 55 (2,705 ) (1,785 ) (0.04 )
Retail non-fuel base revenues (3,744 ) (2,471 ) (0.06 ) (9,674 ) (6,385 ) (0.16 )
Deregulated Palo Verde Unit 3 revenues (421 ) (278 ) (0.01 ) (4,972 ) (3,282 ) (0.08 )
Other (1,777 ) (0.05 ) (493 )  
December 31, 2012 $ 4,819   $ 0.12 $ 90,846   $ 2.19
Change in weighted average number of shares   0.08  
December 31, 2012 $ 0.12   $ 2.27  
 

Fourth Quarter 2012

Income for the quarter ended December 31, 2012, when compared to the same period last year, was positively affected by:

  • Increased allowance for funds used during construction ("AFUDC") due to higher balances of construction work in progress subject to AFUDC.
  • Decreased non Palo Verde O&M primarily due to decreased transmission operating expense resulting from a $1.6 million credit recorded in the fourth quarter of 2012 related to the settlement of a rate case for the purchase of transmission with no comparable activity in the fourth quarter of 2011, decreased planned maintenance outages at our local fossil-fuel generating plants, and decreased customer accounts and service expense, partially offset by increased administrative and general expense.
  • Decreased depreciation and amortization due to reduced depreciation rates on gas-fired generating units and on transmission and distribution plant as a result of the Texas rate case settlement.

Income for the quarter ended December 31, 2012, when compared to the same period last year, was negatively affected by:

  • Decreased retail non-fuel base revenues due to a reduction in non-fuel base rates for our Texas customers, and a 3.6% decrease in kWh sales to our residential customers due to milder winter weather in the three months ended December 31, 2012 compared to the same period in 2011.

Year to Date

Earnings for the twelve months ended December 31, 2012, when compared to the same period last year, were positively affected by:

  • A decrease in the weighted average number of shares outstanding as a result of our 2011 repurchases of common stock.
  • Decreased depreciation and amortization expense due to a reduction in depreciation rates for Palo Verde reflecting the approval of a license extension for Palo Verde by the NRC in April 2011, and reduced depreciation rates on gas-fired generating units and on transmission and distribution plant as a result of the Texas rate case settlement in 2012. The depreciation rate reductions were partially offset by higher depreciation expense due to an increase in depreciable plant.
  • Increased AFUDC primarily due to higher balances of construction work in progress subject to AFUDC.

Earnings for the twelve months ended December 31, 2012, when compared to the same period last year, were negatively affected by:

  • Decreased retail non-fuel base revenues due to a 4.1% and 7.4% decrease in non-fuel base revenues from sales to small commercial and industrial customers and large commercial and industrial customers, respectively. Revenues from these customer classes decreased primarily due to a reduction in non-fuel base rates in Texas effective May 1, 2012. KWh sales to large commercial and industrial customers also decreased 1.2%.
  • Increased non Palo Verde O&M primarily due to increased employee pension and benefits expense reflecting lower discount rates used to determine pension and other postretirement benefits costs, and increased fossil-fuel plant O&M expense primarily due to the timing of planned maintenance of our gas-fired generating units, partially offset by decreased customer accounts and service expense.
  • Decreased revenues from retail sales of deregulated Palo Verde Unit 3 power due to lower proxy market prices associated with the decline in natural gas prices, an 11% decrease in generation at Palo Verde Unit 3 due to the March 17 through April 17, 2012 refueling outage with no comparable outage in the prior year, and an 18.4% increase in the cost of nuclear fuel burned.
  • Decreased transmission revenues due to a 2011 settlement agreement with Tucson Electric Power Company involving a transmission dispute that resulted in one-time income of $3.9 million, pre-tax, recorded in the third quarter of 2011.

Retail Non-fuel Base Revenues

Retail non-fuel base revenues decreased $3.7 million, pre-tax, or 3.1% in the fourth quarter of 2012 compared to the same period in 2011 due to a reduction in non-fuel base rates for our Texas customers which became effective May 1, 2012 and primarily impacted commercial and industrial customers. Non-fuel base revenues from sales to small commercial and industrial customers and large commercial and industrial customers decreased 5.3% and 9.4%, respectively, in the fourth quarter. The decrease in non-fuel base revenues was also due to a decrease in kWh sales in our residential customer class reflecting milder winter weather in the three months ended December 31, 2012 compared to the same period in 2011. Heating degree days decreased 27.6% in the fourth quarter of 2012 compared to the same period in 2011, and were 16.5% below the 10-year average. KWH sales to public authorities increased 3.1% and non-fuel base revenues from public authorities increased 4.0%. Non-fuel base revenues and kilowatt-hour sales are provided by customer class on page 10 of the release.

For the twelve months ended December 31, 2012, retail non-fuel base revenues decreased by $9.7 million, pre-tax, or 1.7% compared to the same period in 2011. The decrease in revenues was due to a reduction in non-fuel base rates to Texas customers which primarily impacted commercial and industrial customers. Non-fuel base revenues from sales to small commercial and industrial customers and large commercial and industrial customers decreased 4.1% and 7.4%, respectively. In addition, increased use of lower interruptible rates and decreased consumption by several large commercial and industrial customers contributed to the decrease in non-fuel base revenues. KWh sales to large commercial and industrial customers decreased 1.2%. KWh sales to small commercial and industrial customers increased 0.6% primarily due to the 0.8% increase in the average number of customers served. KWh sales to residential customers increased 0.6% due to the 1.4% increase in the average number of customers served despite significantly milder weather in 2012 compared to 2011. During the twelve months ended December 31, 2012, cooling degree days decreased 8.3% when compared to the same period in 2011 but were 9.2% above the 10-year average. Heating degree days decreased 16.4% during the twelve months ended December 31, 2012 when compared to the same period in 2011 and were 9.8% below the 10-year average. KWh sales to public authorities increased 2.4% and non-fuel base revenues from public authorities increased 1.9%. Non-fuel base revenues and kilowatt-hour sales are provided by customer class on page 12 of the release.

Rate Matters

On April 17, 2012, the City Council of El Paso, Texas approved the settlement of our 2012 Texas retail rate case in PUCT Docket No. 40094. For Texas service areas outside of the city limits of El Paso, the settlement was filed with the PUCT, and the PUCT approved the settlement, on May 18, 2012. In the settlement, we agreed to a reduction in our non-fuel base rates of $15 million annually, with the decrease being allocated primarily to Texas commercial and industrial customer classes. The rate decrease was effective May 1, 2012. The settlement also allowed us to revise the depreciation rates for our gas-fired generating units and for transmission and distribution plant that lowers depreciation expense by $4.1 million annually.

Capital and Liquidity

In December 2012, we issued $150 million of 3.30% Senior Notes, due to mature on December 15, 2022, to fund construction expenditures and to repay the outstanding balance of our revolving credit facility (the "RCF") used for working capital and general corporate purposes. We continue to maintain a strong capital structure in which common stock equity represented 44.7% of our capitalization (common stock equity, long-term debt, and short-term borrowings under the RCF). The 3.30% Senior Note issuance, cash from operations, and our RCF are expected to provide the liquidity needed by the Company to fund its capital requirements for the next 12 months. In addition, we should continue to have access to the capital markets on favorable terms. At December 31, 2012, we had a balance of $111.1 million in cash and cash equivalents.

Cash flows from operations for the twelve months ended December 31, 2012 were $273.1 million compared to $251.5 million in the corresponding period in 2011. The primary factor affecting the increased cash flow was an increase in the collection of deferred fuel revenues in 2012. The difference between fuel revenues collected and fuel expense incurred is deferred to be either refunded (over-recoveries) or surcharged (under-recoveries) to customers in the future. During the twelve months ended December 31, 2012, the Company had a fuel over-recovery, net of refunds, of $11.7 million, as compared to an under-recovery of fuel costs, net of refunds, of $26.0 million during the twelve months ended December 31, 2011. At December 31, 2012, we had a net fuel over-recovery balance of $4.6 million, including $2.3 million in Texas and $2.3 million in New Mexico.

During the twelve months ended December 31, 2012, our primary capital requirements were for the construction and purchase of electric utility plant, purchases of nuclear fuel, and payment of common stock dividends. Capital requirements for new electric plant were $202.4 million for the twelve months ended December 31, 2012 and $178.0 million for the twelve months ended December 31, 2011. Capital requirements for purchases of nuclear fuel were $46.0 million for the twelve months ended December 31, 2012 and $39.6 million for the twelve months ended December 31, 2011. Rio Grande Resources Trust (the "RGRT") is the trust through which we finance our portion of nuclear fuel for Palo Verde and is consolidated in the Company's financial statements.

On January 17, 2013, the Board of Directors declared a quarterly cash dividend of $0.25 per share payable on March 29, 2013 to shareholders of record on March 14, 2013. On December 28, 2012, we paid $10.0 million of dividends to shareholders. We paid a total of $38.9 million in cash dividends during the twelve months ended December 31, 2012. We expect to continue paying quarterly dividends during 2013 and we expect to review the dividend policy in the second quarter of 2013.

No shares of common stock were repurchased during the twelve months ended December 31, 2012. As of December 31, 2012, a total of 393,816 shares remain available for repurchase under the currently authorized stock repurchase program. The Company may repurchase shares in the open market from time to time.

On August 28, 2012, we completed a refunding transaction related to our 2005 Series A refunding pollution control bonds totaling $59.2 million in which new pollution control bonds totaling $59.2 million were issued at a fixed rate of 4.5%. The bonds are unsecured and will mature in 2042. On August 28, 2012, we also completed a remarketing transaction related to our 2002 Series A refunding pollution control bonds totaling $33.3 million in which new pollution control bonds totaling $33.3 million were issued at a fixed rate of 1.875%. The bonds are unsecured and mature in 2032 although they are due to be remarketed in 2017.

We maintain the RCF for working capital and general corporate purposes and financing of nuclear fuel through the RGRT. The RCF has a term ending September 2016. On March 29, 2012, we increased the aggregate unsecured borrowing available under the RCF from $200 million to $300 million. The terms of the agreement provide that amounts we borrow under the RCF may also be used for working capital and general corporate purposes. The total amount borrowed for nuclear fuel by RGRT was $132.2 million at December 31, 2012 of which $22.2 million had been borrowed under the RCF and $110 million was borrowed through senior notes. Borrowings by RGRT for nuclear fuel were $123.4 million as of December 31, 2011, of which $13.4 million had been borrowed under the RCF and $110 million was borrowed through senior notes. Interest costs on borrowings to finance nuclear fuel are accumulated by RGRT and charged to us as fuel is consumed and recovered through fuel recovery charges. No borrowings were outstanding at December 31, 2012 under the RCF for working capital or general corporate purposes. At December 31, 2011, $20.0 million was outstanding under the RCF for working capital and general corporate purposes.

2013 Earnings Guidance

We are providing earnings guidance for 2013 within a range of $2.20 to $2.60 per basic share.

Conference Call

A conference call to discuss fourth quarter 2012 earnings is scheduled for 9:00 A.M. Eastern Daylight Time, on February 19, 2013. The dial-in number is 888-428-9480 with a conference ID number of 1634701. The conference leader will be Steven P. Busser, Vice President - Treasurer. A replay will run through March 6, 2013 with a dial-in number of 888-203-1112 and a conference ID number of 1634701. The conference call and presentation slides will be webcast live on the Company's website found at http://www.epelectric.com. A replay of the webcast will be available shortly after the call.

Safe Harbor

This news release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This information may involve risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: (i) increased prices for fuel and purchased power and the possibility that regulators may not permit EE to pass through all such increased costs to customers or to recover previously incurred fuel costs in rates; (ii) recovery of capital investments and operating costs through rates in Texas and New Mexico; (iii) uncertainties and instability in the general economy and the resulting impact on EE's sales and profitability; (iv) unanticipated increased costs associated with scheduled and unscheduled outages; (v) the size of our construction program and our ability to complete construction on budget and on time; (vi) costs at Palo Verde; (vii) deregulation and competition in the electric utility industry; (viii) possible increased costs of compliance with environmental or other laws, regulations and policies; (ix) possible income tax and interest payments as a result of audit adjustments proposed by the IRS or state taxing authorities; (x) uncertainties and instability in the financial markets and the resulting impact on EE's ability to access the capital and credit markets; and (xi) other factors detailed by EE in its public filings with the Securities and Exchange Commission. EE's filings are available from the Securities and Exchange Commission or may be obtained through EE's website, http://www.epelectric.com. Any such forward-looking statement is qualified by reference to these risks and factors. EE cautions that these risks and factors are not exclusive. EE does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of EE except as required by law.

 
El Paso Electric Company and Subsidiary
Consolidated Statements of Operations
Quarter Ended December 31, 2012 and 2011
(In thousands except for per share data)
(Unaudited)
           

2012

2011

Variance

 
Operating revenues, net of energy expenses:
Base revenues $ 115,768 $ 119,486 $ (3,718 ) (a)
Deregulated Palo Verde Unit 3 proxy market pricing 2,755 3,176 (421 )
Other 7,388   8,072   (684 )
Operating Revenues Net of Energy Expenses 125,911 130,734 (4,823 )
 
Other operating expenses:
Other operations and maintenance 49,971 52,094 (2,123 )
Palo Verde operations and maintenance 29,193 29,660 (467 )
Taxes other than income taxes 13,812 12,430 1,382
Other income (deductions) 1,077   446   631  
Earnings Before Interest, Taxes, Depreciation and Amortization 34,012 36,996 (2,984 ) (b)
 
Depreciation and amortization 19,227 20,556 (1,329 )
Interest on long-term debt 13,805 13,520 285
AFUDC and capitalized interest 5,837 4,044 1,793
Other interest expense 325   212   113  
Income Before Income Taxes 6,492 6,752 (260 )
 
Income tax expense 1,673   1,299   374  
 
Net Income $ 4,819   $ 5,453   $ (634 )
 
Basic Earnings per Share $ 0.12   $ 0.14   $ (0.02 )
 
Diluted Earnings per Share $ 0.12   $ 0.13   $ (0.01 )
 
Dividends declared per share of common stock $ 0.25   $ 0.22   $ 0.03  
 
Weighted average number of shares outstanding 40,016   39,957   59  
 
Weighted average number of shares and dilutive
potential shares outstanding 40,090   40,210   (120 )
 

(a)

Base revenues exclude fuel recovered through New Mexico base rates of $16.3 million and $16.3 million, respectively.

(b)

EBITDA is a non-GAAP financial measure and is not a substitute for net income or other measures of financial performance in accordance with GAAP.
 
 
El Paso Electric Company and Subsidiary
Consolidated Statements of Operations
Twelve Months Ended December 31, 2012 and 2011
(In thousands except for per share data)
(Unaudited)
           

2012

2011

Variance

 
Operating revenues, net of energy expenses:
Base revenues $ 562,600 $ 572,078 $ (9,478 ) (a)
Deregulated Palo Verde Unit 3 proxy market pricing 9,848 14,820 (4,972 )
Other 29,106   32,459   (3,353 ) (b)
Operating Revenues Net of Energy Expenses 601,554 619,357 (17,803 )
 
Other operating expenses:
Other operations and maintenance 198,706 192,155 6,551
Palo Verde operations and maintenance 98,191 99,507 (1,316 )
Taxes other than income taxes 57,443 55,561 1,882
Other income (deductions) 4,677   3,362   1,315  
Earnings Before Interest, Taxes, Depreciation and Amortization 251,891 275,496 (23,605 ) (c)
 
Depreciation and amortization 78,556 81,331 (2,775 )
Interest on long-term debt 54,632 54,115 517
AFUDC and capitalized interest 20,312 18,186 2,126
Other interest expense 1,190   989   201  
Income Before Income Taxes 137,825 157,247 (19,422 )
 
Income tax expense 46,979   53,708   (6,729 )
 
Net Income $ 90,846   $ 103,539   $ (12,693 )
 
Basic Earnings per Share $ 2.27   $ 2.49   $ (0.22 )
 
Diluted Earnings per Share $ 2.26   $ 2.48   $ (0.22 )
 
Dividends declared per share of common stock $ 0.97   $ 0.66   $ 0.31  
 
Weighted average number of shares outstanding 39,974   41,350   (1,376 )
 
Weighted average number of shares and dilutive
potential shares outstanding 40,056   41,587   (1,531 )
 

(a)

Base revenues exclude fuel recovered through New Mexico base rates of $74.2 million and $73.5 million, respectively.

(b)

2011 includes $3.9 million related to the settlement of a transmission dispute with Tucson Electric Power Company.

(c)

EBITDA is a non-GAAP financial measure and is not a substitute for net income or other measures of financial performance in accordance with GAAP.
 
 
El Paso Electric Company and Subsidiary
Cash Flow Summary
Twelve Months Ended December 31, 2012 and 2011
(In thousands and Unaudited)
             

2012

2011

Cash flows from operating activities:
Net income $ 90,846 $ 103,539
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization of electric plant in service 78,556 81,331
Deferred income taxes, net 43,561 45,688
Other 47,771 49,768
Change in:
Net overcollection (undercollection) of fuel revenues 11,668 (26,001 )
Accounts receivable 13,448 (4,663 )
Other (12,742 ) 1,855  
Net cash provided by operating activities 273,108   251,517  
 
Cash flows from investing activities:
Cash additions to utility property, plant and equipment (202,387 ) (178,041 )
Cash additions to nuclear fuel (46,009 ) (39,551 )
Decommissioning trust funds (9,163 ) (12,515 )
Other (8,495 ) (7,298 )

Net cash used for investing activities

(266,054 ) (237,405 )
 
Cash flows from financing activities:
Repurchase of common stock (86,508 )
Dividends paid (38,889 ) (27,223 )
Borrowings under the revolving credit facility (11,224 ) 28,675
Proceeds from issuance of long-term senior notes 149,682
Other (3,774 ) (32 )
Net cash provided by (used for) financing activities 95,795   (85,088 )
 
Net increase (decrease) in cash and cash equivalents 102,849 (70,976 )
 
Cash and cash equivalents at beginning of period 8,208   79,184  
 
Cash and cash equivalents at end of period $ 111,057   $ 8,208  
 
 
El Paso Electric Company and Subsidiary
Quarter Ended December 31, 2012 and 2011
Sales and Revenues Statistics
                   
Increase (Decrease)  
2012 2011 Amount    

Percentage

MWh sales:

Retail:
Residential 535,277 555,143 (19,866 ) (3.6 )%
Commercial and industrial, small 540,078 536,137 3,941 0.7 %
Commercial and industrial, large 288,246 278,491 9,755 3.5 %
Public authorities 390,720   378,968   11,752   3.1 %
Total retail sales 1,754,321   1,748,739   5,582   0.3 %
Wholesale:
Sales for resale 11,204 10,611 593 5.6 %
Off-system sales 647,572   524,838   122,734   23.4 %
Total wholesale sales 658,776   535,449   123,327   23.0 %
Total MWh sales 2,413,097   2,284,188   128,909   5.6 %
Operating revenues (in thousands):
Non-fuel base revenues:
Retail:
Residential $ 46,357 $ 47,710 $ (1,353 ) (2.8 )%
Commercial and industrial, small 38,718 40,890 (2,172 ) (5.3 )%
Commercial and industrial, large 9,701 10,704 (1,003 ) (9.4 )%
Public authorities 20,566   19,782   784   4.0 %
Total retail non-fuel base revenues 115,342 119,086 (3,744 ) (3.1 )%
Wholesale:
Sales for resale 426   400   26   6.5 %
Total non-fuel base revenues 115,768   119,486   (3,718 ) (3.1 )%
Fuel revenues:
Recovered from customers during the period 27,468 35,959 (8,491 ) (23.6 )%
Under (over) collection of fuel 2,289 (3,607 ) 5,896
New Mexico fuel in base rates (a) 16,273   16,303   (30 ) (0.2 )%
Total fuel revenues 46,030   48,655   (2,625 ) (5.4 )%
Off-system sales:
Fuel cost 16,869 13,959 2,910 20.8 %
Shared margins 2,326 1,161 1,165
Retained margins 274   137   137   100.0 %
Total off-system sales 19,469 15,257 4,212 27.6 %
Other 7,535   8,265   (730 ) (8.8 )%
Total operating revenues $ 188,802   $ 191,663   $ (2,861 ) (1.5 )%
 

(a)

Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $2.7 million and $3.2 million, respectively.
 
 
El Paso Electric Company and Subsidiary
Quarter Ended December 31, 2012 and 2011
Other Statistical Data
                   
Increase (Decrease)  
2012 2011 Amount Percentage
 

Average number of retail customers:

Residential 342,076 337,498 4,578 1.4 %
Commercial and industrial, small 37,883 38,154 (271 ) (0.7 )%
Commercial and industrial, large 51 50 1 2.0 %
Public authorities 4,687   4,477   210   4.7 %
Total 384,697   380,179   4,518   1.2 %
 

Number of retail customers (end of period):

Residential 341,682 337,659 4,023 1.2 %
Commercial and industrial, small 37,712 37,942 (230 ) (0.6 )%
Commercial and industrial, large 50 49 1 2.0 %
Public authorities 4,654   4,596   58   1.3 %
Total 384,098   380,246   3,852   1.0 %
 

Weather statistics:

10 Yr Average
Heating degree days 794 1,097 951
Cooling degree days 164 138 119
 

Generation and purchased power (MWh):

Increase (Decrease)  
2012 2011 Amount Percentage
 
Palo Verde 1,146,910 1,107,404 39,506 3.6 %
Four Corners 174,553 161,325 13,228 8.2 %
Gas plants 706,814   682,962   23,852   3.5 %
Total generation 2,028,277 1,951,691 76,586 3.9 %
Purchased power 496,700   447,980   48,720   10.9 %
Total available energy 2,524,977 2,399,671 125,306 5.2 %
Line losses and Company use 111,880   115,483   (3,603 ) (3.1 )%
Total MWh sold 2,413,097   2,284,188   128,909   5.6 %

Palo Verde capacity factor

83.7

%

80.6

%

3.1

%

 
 
El Paso Electric Company and Subsidiary
Twelve Months Ended December 31, 2012 and 2011
Sales and Revenues Statistics
                   
Increase (Decrease)  
2012 2011 Amount     Percentage

MWh sales:

Retail:
Residential 2,648,348 2,633,390 14,958 0.6 %
Commercial and industrial, small 2,366,541 2,352,218 14,323 0.6 %
Commercial and industrial, large 1,082,973 1,096,040 (13,067 ) (1.2 )%
Public authorities 1,617,606   1,579,565   38,041   2.4 %
Total retail sales 7,715,468   7,661,213   54,255   0.7 %
Wholesale:
Sales for resale 64,266 62,656 1,610 2.6 %
Off-system sales 2,614,132   2,687,631   (73,499 ) (2.7 )%
Total wholesale sales 2,678,398   2,750,287   (71,889 ) (2.6 )%
Total MWh sales 10,393,866   10,411,500   (17,634 ) (0.2 )%

Operating revenues (in thousands):

Non-fuel base revenues:
Retail:
Residential $ 234,095 $ 234,086 $ 9
Commercial and industrial, small 188,014 196,093 (8,079 ) (4.1 )%
Commercial and industrial, large 42,041 45,407 (3,366 ) (7.4 )%
Public authorities 96,132   94,370   1,762   1.9 %
Total retail non-fuel base revenues 560,282 569,956 (9,674 ) (1.7 )%
Wholesale:
Sales for resale 2,318   2,122   196   9.2 %
Total non-fuel base revenues 562,600   572,078   (9,478 ) (1.7 )%
Fuel revenues:
Recovered from customers during the period (a) 130,193 145,130 (14,937 ) (10.3 )%
Under (over) collection of fuel (18,539 ) 13,917 (32,456 )
New Mexico fuel in base rates (b) 74,154   73,454   700   1.0 %
Total fuel revenues 185,808   232,501   (46,693 ) (20.1 )%
Off-system sales:
Fuel cost 62,481 74,736 (12,255 ) (16.4 )%
Shared margins 9,191 3,883 5,308
Retained margins 1,098   (560 ) 1,658  
Total off-system sales 72,770 78,059 (5,289 ) (6.8 )%
Other (c) 31,703   35,375   (3,672 ) (10.4 )%
Total operating revenues $ 852,881   $ 918,013   $ (65,132 ) (7.1 )%
 

(a)

Excludes $6.9 million and $12.0 million of refunds in 2012 and 2011, respectively, related to prior periods Texas deferred fuel revenues.

(b)

Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $9.8 million and $14.8 million, respectively.

(c)

2011 includes $3.9 million related to the settlement of a transmission dispute with Tucson Electric Power Company.
 
 
El Paso Electric Company and Subsidiary
Twelve Months Ended December 31, 2012 and 2011
Other Statistical Data
                 
Increase (Decrease)  
2012 2011 Amount Percentage
 

Average number of retail customers:

Residential 340,962 336,219 4,743 1.4 %
Commercial and industrial, small 37,966 37,652 314 0.8 %
Commercial and industrial, large 50 50
Public authorities 4,610     4,626     (16 ) (0.3 )%
Total 383,588     378,547     5,041   1.3 %
 

Number of retail customers (end of period):

Residential 341,682 337,659 4,023 1.2 %
Commercial and industrial, small 37,712 37,942 (230 ) (0.6 )%
Commercial and industrial, large 50 49 1 2.0 %
Public authorities 4,654     4,596     58   1.3 %
Total 384,098     380,246     3,852   1.0 %
 

Weather statistics:

10 Yr Average
Heating degree days 2,009 2,402 2,228
Cooling degree days 2,876 3,135 2,633
 

Generation and purchased power (MWh):

Increase (Decrease)  
2012 2011 Amount Percentage
 
Palo Verde 5,045,772 4,942,055 103,717 2.1 %
Four Corners 655,108 647,932 7,176 1.1 %
Gas plants (a) 3,560,763     3,346,789     213,974   6.4 %
Total generation 9,261,643 8,936,776 324,867 3.6 %
Purchased power 1,768,810     2,135,124     (366,314 ) (17.2 )%
Total available energy 11,030,453 11,071,900 (41,447 ) (0.4 )%
Line losses and Company use 636,587     660,400     (23,813 ) (3.6 )%
Total MWh sold 10,393,866     10,411,500     (17,634 ) (0.2 )%

Palo Verde capacity factor

92.3

%

90.7

%

1.6

%

 

(a)

2011 gas plant generation includes 193,460 MWhs related to pre-commercial testing of Newman Unit 5 Phase II. Newman Unit 5 Phase II began commercial operation on April 30, 2011.

 
 
El Paso Electric Company and Subsidiary
Financial Statistics
At December 31, 2012 and 2011
(In thousands, except number of shares, book value per share, and ratios)
         
Balance Sheet 2012 2011
 
Cash and cash equivalents $ 111,057   $ 8,208  
 
Common stock equity $ 824,999 $ 760,251
Long-term debt 999,535   816,497  
Total capitalization $ 1,824,534   $ 1,576,748  
 
Current maturities of long-term debt $   $ 33,300  
 
Short-term borrowings under the revolving credit facility $ 22,155   $ 33,379  
 
Number of shares - end of period 40,112,078   39,959,154  
 
Book value per common share $ 20.57   $ 19.03  
 
Common equity ratio (a) 44.7 % 46.3 %
Debt ratio 55.3 % 53.7 %
 

(a)

The capitalization component includes common stock equity, long-term debt and the current maturities of long-term debt, and short-term borrowings under the revolving credit facility.

 

El Paso Electric
Media:
Teresa Souza, 915-543-5823
or
Analysts:
Steve Busser, 915-543-5983
or
Greg Shearman, 915-543-4022

Source: El Paso Electric

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