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El Paso Electric Announces Third Quarter Financial Results

October 28, 2009

Overview

  • For the third quarter 2009, EE reported net income of $33.9 million, or $0.76 basic and diluted earnings per share. In the third quarter of 2008, EE reported net income of $33.1 million, or $0.74 basic and diluted earnings per share.
  • For the nine months ended September 30, 2009, EE reported net income of $59.0 million, or $1.31 basic and diluted earnings per share. Net income for the nine months ended September 30, 2008 was $66.8 million, or $1.49 and $1.48 basic and diluted earnings per share, respectively.


Earnings Summary






Third Quarter 2009



  • Higher retail non-fuel base revenues in 2009 primarily due to a 13.6% increase in kWh sales to residential customers and a 6.1% increase in kWh sales to public authorities.
  • Increased interest and investment income primarily due to a decrease of $2.5 million in impairments and losses on equity securities in our Palo Verde decommissioning trust funds in the third quarter of 2009 when compared to the third quarter of 2008.



  • Lower retained margins on off-system sales as lower market prices resulted in reduced margins per MWh and a 20% decline in MWh sold in the third quarter of 2009 compared to the third quarter of 2008.
  • Decreased revenues from retail sales of deregulated Palo Verde Unit 3 power due to lower proxy market prices in the third quarter of 2009 compared to the same period in 2008.
  • Increased administrative and general expense due to increased accruals for employee incentive compensation and increased pension and benefits costs related to increased costs of postretirement benefits and medical insurance.
  • Increased Palo Verde administrative and general expense partially offset by a decrease in operating costs at all three units in the third quarter of 2009 when compared to the same period last year.
Year to Date


  • Higher retail non-fuel base revenues in 2009 primarily due to a 5.8% increase in kWh sales to residential customers and a 2.5% increase in kWh sales to public authorities partially offset by a 13.5% decrease in kWh sales to large commercial and industrial customers.
  • Lower O&M costs at our fossil-fueled generating plants as more planned major maintenance was performed in the first nine months of 2008 than was performed in the first nine months of 2009.
  • 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.
  • Decreased revenues from retail sales of deregulated Palo Verde Unit 3 power due to lower proxy market prices and lower sales due mostly to a planned refueling outage in April and May 2009.
  • 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.
  • An increase in impairments and losses on equity securities in our Palo Verde decommissioning trust funds in 2009 compared to 2008.
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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