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NYSE:EE 68.40 -0.01 -0.01% Volume: Learn more July 29, 2020
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El Paso Electric Announces Second Quarter Financial Results

August 05, 2009

Overview

  • For the second quarter 2009, EE reported net income of $15.4 million, or $0.34 basic and diluted earnings per share. In the second quarter of 2008, EE reported net income of $19.2 million, or $0.43 basic and diluted earnings per share.
  • For the six months ended June 30, 2009, EE reported net income of $25.0 million, or $0.56 basic and diluted earnings per share. Net income for the six months ended June 30, 2008 was $33.7 million, or $0.75 basic and diluted earnings per share.


Earnings Summary

The table and explanations below present the major factors affecting 2009 net income relative to 2008 net income.



Second Quarter 2009
Earnings for the quarter ended June 30, 2009 when compared to the same period last year, were positively affected by:

  • Lower O&M costs at our fossil-fueled generating plants as more planned major maintenance was performed in the second quarter 2008 (Newman Unit 3 and Four Corners Unit 5 generating units) than was performed in the second quarter 2009 (Newman Unit 4 and Rio Grande Unit 8 generating units).
  • Increased AFUDC and capitalized interest in 2009 due to higher balances of construction work in progress subject to AFUDC partially offset by lower capitalized interest on nuclear fuel due to lower interest rates.
  • Higher retail non-fuel base revenues in 2009 primarily due to a 4.4% increase in kWh sales to residential customers partially offset by a decline in sales to commercial and industrial customers.


  • Decreased revenues from retail sales of deregulated Palo Verde Unit 3 power as the unit did not operate for most of April and May 2009 due to its planned refueling outage and a lower proxy market price in June 2009.
  • An increase in impairments and losses on equity securities in our Palo Verde decommissioning trust funds in 2009 compared to 2008.
  • Increased interest expense on long-term debt as a result of the June 2008 issuance of $150 million of 7.5% Senior Notes partially offset by lower interest rates on the revolving credit facility used to finance nuclear fuel.
  • Lower retained margins on off-system sales as a result of reduced margins per MWh due to lower market prices.
Year to Date


  • Lower O&M costs at our fossil-fueled generating plants as more planned major maintenance was performed in the first six months of 2008 (Newman Unit 3, Four Corners Unit 5, and Copper generating units) than was performed in the first six months of 2009 (Rio Grande Unit 8 and Newman Unit 4 generating units).
  • Increased AFUDC and capitalized interest in 2009 due to higher balances of construction work in progress subject to AFUDC partially offset by lower capitalized interest on nuclear fuel due to lower interest rates.


  • Lower retained margins on off-system sales primarily as a result of reduced margins per MWh due to lower market power prices.
  • Increased interest expense on long-term debt as a result of the June 2008 issuance of $150 million of 7.5% Senior Notes and higher interest rates on pollution control bonds partially offset by lower interest rates on the revolving credit facility used to finance nuclear fuel.
  • Decreased revenues from retail sales of deregulated Palo Verde Unit 3 power as the unit did not operate for most of April and May 2009 due to its planned refueling outage.
  • An increase in impairments and losses on equity securities in our Palo Verde decommissioning trust funds in 2009 compared to 2008.
  • Lower retail non-fuel base revenues in 2009 primarily due to a 17.4% decrease in kWh sales to large commercial and industrial customers and a 1.5% decrease in kWh sales to small commercial and industrial customers partially offset by a 0.8% increase in kWh sales to residential customers.
Retail Non-fuel Base Revenues




Palo Verde Operations


Off-system Sales








Capital and Liquidity










2009 Earnings Guidance


Conference Call
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Safe Harbor
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