El Paso Electric Company (NYSE:EE):
Overview
- For the second quarter of 2014, El Paso
Electric Company ("EE" or the "Company") reported net income of
$30.1 million, or $0.75 basic and diluted earnings per share. In
the second quarter of 2013, EE reported net income of $29.2
million, or $0.73 and $0.72 basic and diluted earnings per share,
respectively.
- For the six months ended June 30, 2014,
EE reported net income of $34.7 million, or $0.86 basic and diluted
earnings per share. Net income for the six months ended June 30,
2013 was $36.8 million, or $0.92 basic and diluted earnings per
share.
“El Paso Electric achieved several significant milestones in the
second quarter of 2014. First, we began construction of our new
Montana Power Station Units 1 and 2; second, we reached a new
native system peak of 1,766 MW on June 4, 2014, and continue to see
growth in the number of customers we serve; and, finally, we
successfully settled our 2013 Texas fuel reconciliation case. This
settlement covers $545.3 million of fuel and purchased power
expenses incurred during the 45-month period of July 1, 2009
through March 31, 2013,” said Tom Shockley, Chief Executive
Officer. “Our earnings for the second quarter of 2014 were slightly
ahead of the corresponding quarter of 2013 and include Palo Verde
performance rewards realized after settling the Texas fuel
reconciliation proceeding which added $0.04 earnings per share in
our most recent quarter.”
Earnings Summary
The table and explanations below present the major factors
affecting 2014 net income relative to 2013 net income:
Quarter Ended
Six Months Ended Pre-Tax
Effect
After-TaxNetIncome
BasicEPS
Pre-TaxEffect
After-TaxNetIncome
BasicEPS
June 30, 2013 $ 29,193 $ 0.73 $ 36,827 $ 0.92 Changes in: Palo
Verde performance rewards, net $ 2,143 1,415 0.04 $ 2,143 1,415
0.04 Allowance for funds used during construction 1,395 1,242 0.03
1,699 1,525 0.04 Miscellaneous income and deductions 1,624 1,072
0.03 3,192 2,107 0.05 Investment and interest income 71 27 — 3,081
2,436 0.06 Taxes other than income taxes (1,710 ) (1,128 ) (0.03 )
(4,290 ) (2,831 ) (0.07 ) Depreciation and amortization (1,521 )
(1,005 ) (0.03 ) (2,721 ) (1,796 ) (0.05 ) Retail non-fuel base
revenues (883 ) (583 ) (0.02 ) (5,676 ) (3,746 ) (0.09 ) Other (137
) — (1,226 ) (0.04 ) June 30, 2014 $ 30,096 $ 0.75
$ 34,711 $ 0.86
Second Quarter 2014
Income for the quarter ended June 30, 2014, when compared to the
same period last year, was positively affected by:
- Recognition of Palo Verde performance
rewards associated with the 2009 to 2012 performance periods, net
of disallowed fuel and purchased power costs related to the
resolution of the Texas fuel reconciliation proceeding designated
as PUCT Docket No. 41852.
- Increased allowance for funds used
during construction ("AFUDC") due to higher balances of
construction work in progress subject to AFUDC.
- Increased miscellaneous income and
deductions, primarily due to gains recognized on the sale of assets
in 2014 with no comparable activity in the same period of 2013, and
decreased donations.
Income for the quarter ended June 30, 2014, when compared to the
same period last year, was negatively affected by:
- Increased taxes other than income taxes
primarily due to higher property taxes.
- Increased depreciation and amortization
due to increased depreciable plant balances including Rio Grande
Unit 9, which began commercial operation on May 13, 2013.
- Decreased retail non-fuel base revenues
primarily due to a $0.8 million reduction in non-fuel base revenues
from sales to our residential customers reflecting a 1.5% decrease
in kWh sales due to milder weather in the second quarter of 2014
compared to the same period last year.
Year to Date
Income for the six months ended June 30, 2014, when compared to
the same period last year, was positively affected by:
- Increased investment and interest
income primarily due to net realized gains on equity investments in
our Palo Verde decommissioning trust funds compared to the same
period last year.
- Increased miscellaneous income and
deductions, primarily due to the gains recognized on the sale of
assets in 2014 with no comparable activity in the same period last
year, and decreased donations.
- Increased AFUDC due to higher balances
of construction work in progress subject to AFUDC.
- Recognition of Palo Verde performance
rewards associated with the 2009 to 2012 performance periods, net
of disallowed fuel and purchased power costs related to the
resolution of the Texas fuel reconciliation proceeding designated
as PUCT Docket No. 41852.
Income for the six months ended June 30, 2014, when compared to
the same period last year, was negatively affected by:
- Decreased retail non-fuel base revenues
primarily due to a $4.8 million reduction in non-fuel base revenues
from sales to our residential customers reflecting a 5.2% decrease
in kWh sales due to milder weather in 2014, particularly in the
first quarter of 2014, when compared to the same period last
year.
- Increased taxes other than income taxes
primarily due to higher property taxes including a one-time
adjustment to the 2013 Arizona property tax rate recorded during
the first quarter of 2014.
- Increased depreciation and amortization
due to increased depreciable plant balances including Rio Grande
Unit 9, which began commercial operation on May 13, 2013.
Retail Non-fuel Base Revenues
Retail non-fuel base revenues decreased $0.9 million, pre-tax,
or 0.6% in the second quarter of 2014 compared to the same period
in 2013. This decrease reflects milder weather in the second
quarter of 2014, which impacted sales to residential, small
commercial, and to a lesser extent public authority customers.
Cooling degree days decreased 3.8% for the second quarter of 2014
compared to the same quarter last year but remained higher than the
10-year average by 4.2%. KWh sales to residential customers
decreased by 1.5%, despite a 1.3% increase in the average number of
residential customers served. KWh sales to small commercial and
industrial customers in the second quarter of 2014 decreased 1.7%
compared to the same quarter in 2013, despite a 1.9% increase in
the average number of customers served. Retail non-fuel base
revenues from sales to public authorities increased slightly,
primarily due to demand charges, despite a 0.5% decrease in kWh
sales to public authorities compared to the same quarter in 2013.
Retail non-fuel base revenues and kWh sales to large commercial and
industrial customers were relatively unchanged for the quarter.
Non-fuel base revenues and kWh sales are provided by customer class
on page 10 of this release.
For the six months ended June 30, 2014, retail non-fuel base
revenues decreased $5.7 million, pre-tax, or 2.2% compared to the
same period in 2013. This decrease reflects milder weather in the
first six months of 2014, which impacted sales to residential,
small commercial, and to a lesser extent public authority
customers. Heating degree days decreased 26.6% for the six months
of 2014 compared to the same period last year and were 17.0% below
the 10-year average. Cooling degree days decreased 4.4% compared to
the same period last year but remained higher than the 10-year
average by 4.0%. KWh sales to residential customers decreased by
5.2% despite a 1.3% increase in the average number of residential
customers served. KWh sales to small commercial and industrial
customers decreased 1.6% compared to the same period in 2013,
despite a 2.0% increase in the average number of customers served.
KWh sales to large commercial and industrial customers decreased
3.4% and non-fuel base revenues decreased 1.5%. While kWh sales to
public authorities in the six months of 2014 decreased
approximately 2.3% compared to the same period in 2013, non-fuel
base revenues increased slightly due to demand charges. Non-fuel
base revenues and kWh sales are provided by customer class on page
12 of this release.
Texas Fuel Reconciliation Proceeding
On July 11, 2014, the PUCT approved a settlement in the Texas
fuel reconciliation proceeding designated as PUCT Docket No. 41852.
The settlement provides for the reconciliation of fuel and
purchased power costs incurred from July 1, 2009 through March 31,
2013. The quarter ended June 30, 2014 financial results includes a
$2.1 million, pre-tax increase to income reflecting the settlement
of the Texas fuel reconciliation proceeding. This amount includes
Palo Verde performance rewards associated with the 2009 to 2012
performance periods net of disallowed fuel and purchased power
costs as determined by the PUCT.
Quarterly Cash Dividend
On May 29, 2014, the Board of Directors approved an increase to
the quarterly cash dividend to $0.28 per share of common stock from
our previous quarterly rate of $0.265 per share. This represents an
increase in the annualized cash dividend from $1.06 to $1.12 per
share. The dividend increase commenced with the June 30, 2014
payments. On July 24, 2014, the Board of Directors declared a
quarterly cash dividend of $0.28 per share payable on September 30,
2014 to shareholders of record on September 15, 2014.
Capital and Liquidity
We continue to maintain a strong capital structure to ensure
access to capital markets at reasonable rates. At June 30, 2014,
common stock equity represented 47.0% of our capitalization (common
stock equity, long-term debt, and short-term borrowings under the
revolving credit facility (the "RCF")). At June 30, 2014, we had a
balance of $12.7 million in cash and cash equivalents. We expect to
issue long-term debt in the capital markets in 2014 or early 2015
to repay short-term borrowings and finance capital requirements.
Based on current projections, we believe that we will have adequate
liquidity through the issuance of long-term debt, our current cash
balances, cash from operations, and available borrowings under the
RCF to meet all of our anticipated cash requirements for the next
twelve months.
Cash flows from operations for the six months ended June 30,
2014 were $57.0 million compared to $51.4 million in the
corresponding period in 2013. The primary factors affecting the
increased cash flow were the funding of $17.9 million for employee
pension and other post-retirement benefit plans in the first six
months of 2013 compared to $6.9 million in the first six months of
2014, and a decrease in accounts receivable due to the timing of
customer payments. These increases in cash flows from operations
were partially offset by an increase in the under-collection of
fuel revenues. 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 six months ended June 30, 2014, the Company
had a fuel under-recovery of $13.4 million compared to an
under-recovery of fuel costs of $8.9 million during the six months
ended June 30, 2013. At June 30, 2014, we had a net fuel
under-recovery balance of $19.6 million, including an
under-recovery balance of $17.2 million in Texas, $2.3 million in
New Mexico, and $0.1 million for our FERC customer. On April 15,
2014, we filed a request to increase our Texas fixed fuel factor by
6.9% to reflect increases in prices for natural gas. This increase
received final approval on May 28, 2014 and was effective with May
2014 billings.
During the six months ended June 30, 2014, our primary capital
requirements were for the construction and purchase of electric
utility plant, payment of common stock dividends, and purchases of
nuclear fuel. Capital requirements for new electric plant were
$106.0 million for the six months ended June 30, 2014 and $110.3
million for the six months ended June 30, 2013. Capital
expenditures for 2014 are expected to be $316 million as we
construct the Montana Power Station and related transmission
facilities. Capital requirements for purchases of nuclear fuel were
$17.7 million for the six months ended June 30, 2014 and
$16.9 million for the six months ended June 30, 2013.
On June 30, 2014, we paid a quarterly cash dividend of $0.28 per
share, or $11.3 million to shareholders of record on June 13, 2014.
We paid a total of $22.0 million in cash dividends during the six
months ended June 30, 2014. At the current dividend rate, we expect
to pay cash dividends of approximately $44.6 million during
2014.
No shares of common stock were repurchased during the six months
ended June 30, 2014. As of June 30, 2014, 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.
We maintain the RCF for working capital and general corporate
purposes and financing of nuclear fuel through the Rio Grande
Resources Trust ("RGRT"). The RGRT, the trust through which we
finance our portion of nuclear fuel for Palo Verde, is consolidated
in the Company's financial statements. The RCF has a term ending
January 14, 2019. The aggregate unsecured borrowing available under
the RCF is $300 million. We may increase the RCF by up to $100
million (up to a total of $400 million) during the term of the
agreement, upon the satisfaction of certain conditions, more fully
set forth in the agreement, including obtaining commitments from
lenders or third party financial institutions. The amounts we
borrow under the RCF may be used for working capital and general
corporate purposes. The total amount borrowed for nuclear fuel by
the RGRT was $126.8 million at June 30, 2014 of which $16.8 million
had been borrowed under the RCF and $110 million was borrowed
through senior notes. Borrowings by the RGRT for nuclear fuel were
$130.3 million as of June 30, 2013, of which $20.3 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 the RGRT and charged to us as fuel is consumed and
recovered through fuel recovery charges. At June 30, 2014, $81.0
million was outstanding under the RCF for working capital and
general corporate purposes and we expect to refinance the working
capital and general corporate borrowings on the RCF with long-term
debt in late 2014 or early 2015. At June 30, 2013, $6.0 million was
outstanding under the RCF for working capital or general corporate
purposes.
2014 Earnings Guidance
We are narrowing our earnings guidance for 2014 to $2.15 to
$2.40 per basic share from the previous range of $2.10 to
$2.50.
Conference Call
A conference call to discuss second quarter 2014 financial
results is scheduled for 10:30 A.M. Eastern Daylight Time, on
August 6, 2014. The dial-in number is 888-401-4669 with a
conference ID number of 6099953. The international dial-in number
is 719-785-1753. The conference leader will be John Boomer, Vice
President, Treasurer. A replay will run through August 20, 2014
with a dial-in number of 888-203-1112 and a conference ID number of
6099953. The replay international dial-in number is 719-457-0820.
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) changes in customers' demand for
electricity as a result of energy efficiency initiatives and
emerging competing services and technologies; (v) unanticipated
increased costs associated with scheduled and unscheduled outages
of generating plant; (vi) the size of our construction program and
our ability to complete construction on budget; (vii) potential
delays in our construction schedule due to legal challenges or
other reasons; (viii) costs at Palo Verde;
(ix) deregulation and competition in the electric utility
industry; (x) possible increased costs of compliance with
environmental or other laws, regulations and policies;
(xi) possible income tax and interest payments as a result of
audit adjustments proposed by the IRS or state taxing authorities;
(xii) uncertainties and instability in the financial markets
and the resulting impact on EE's ability to access the capital and
credit markets; and (xiii) 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 CompanyStatements of
OperationsQuarter Ended June 30, 2014 and 2013(In
thousands except for per share data)(Unaudited)
2014 2013
Variance Operating revenues, net of energy expenses:
Base revenues $ 151,061 $ 151,966 $ (905 ) (a) Deregulated Palo
Verde Unit 3 revenues 3,551 3,177 374 Palo Verde performance
rewards, net 2,220 — 2,220 Other 7,169 7,628 (459 )
Operating Revenues Net of Energy Expenses 164,001
162,771 1,230 Other operating expenses: Other
operations and maintenance 50,034 49,843 191 Palo Verde operations
and maintenance 26,196 25,175 1,021 Taxes other than income taxes
15,557 13,847 1,710 Other income 1,914 202 1,712
Earnings Before Interest, Taxes, Depreciation and
Amortization 74,128 74,108 20 (b)
Depreciation and amortization 21,083 19,562 1,521 Interest on
long-term debt 14,607 14,610 (3 ) AFUDC and capitalized interest
6,709 5,340 1,369 Other interest expense 288 154 134
Income Before Income Taxes 44,859
45,122 (263 ) Income tax expense 14,763
15,929 (1,166 )
Net Income $
30,096 $ 29,193 $
903 Basic Earnings per Share $
0.75 $ 0.73 $ 0.02
Diluted Earnings per Share $
0.75 $ 0.72 $ 0.03
Dividends declared per share of common stock $ 0.28
$ 0.265 $ 0.015 Weighted average number
of shares outstanding 40,181 40,112 69
Weighted average number of shares and
dilutive potential shares outstanding
40,212 40,160 52
(a) Base revenues exclude fuel recovered through New Mexico base
rates of $17.1 million and $17.6 million, respectively.
(b) Earnings before interest, taxes, depreciation and amortization
("EBITDA") is a non-generally accepted accounting principles
("GAAP") financial measure and is not a substitute for net income
or other measures of financial performance in accordance with GAAP.
El Paso Electric CompanyStatements of
OperationsSix Months Ended June 30, 2014 and 2013(In
thousands except for per share data)(Unaudited)
2014 2013 Variance
Operating revenues, net of energy expenses: Base revenues $ 255,208
$ 260,846 $ (5,638 ) (a) Deregulated Palo Verde Unit 3 revenues
7,959 6,213 1,746 Palo Verde performance rewards, net 2,220 — 2,220
Other 14,629 15,726 (1,097 )
Operating Revenues
Net of Energy Expenses 280,016 282,785
(2,769 ) Other operating expenses: Other
operations and maintenance 99,098 96,081 3,017 Palo Verde
operations and maintenance 47,552 47,456 96 Taxes other than income
taxes 30,919 26,629 4,290 Other income 7,253 963
6,290
Earnings Before Interest, Taxes, Depreciation and
Amortization 109,700 113,582 (3,882
) (b) Depreciation and amortization 41,651 38,930
2,721 Interest on long-term debt 29,186 29,206 (20 ) AFUDC and
capitalized interest 12,545 10,928 1,617 Other interest expense 461
303 158
Income Before Income Taxes
50,947 56,071 (5,124 ) Income
tax expense 16,236 19,244 (3,008 )
Net
Income $ 34,711 $ 36,827
$ (2,116 ) Basic Earnings per
Share $ 0.86 $ 0.92
$ (0.06 ) Diluted Earnings per
Share $ 0.86 $ 0.92
$ (0.06 ) Dividends declared per share
of common stock $ 0.545 $ 0.515 $ 0.03
Weighted average number of shares outstanding 40,165 40,095
70
Weighted average number of shares and
dilutive potential shares outstanding
40,181 40,119 62
(a) Base revenues exclude fuel recovered through New Mexico base
rates of $33.2 million and $34.6 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
CompanyCash Flow SummarySix Months Ended June 30,
2014 and 2013(In thousands and Unaudited)
2014 2013 Cash flows from operating
activities: Net income $ 34,711 $ 36,827 Adjustments to
reconcile net income to net cash provided by operations:
Depreciation and amortization of electric plant in service 41,651
38,930 Amortization of nuclear fuel 21,877 21,897 Deferred income
taxes, net 15,141 16,888 Other (2,336 ) 2,993 Change in: Accounts
receivable (33,585 ) (43,626 ) Net undercollection of fuel revenues
(13,369 ) (8,940 ) Accounts payable 1,983 2,733 Other (a) (9,102 )
(16,315 )
Net cash provided by operating activities
56,971 51,387 Cash flows from
investing activities: Cash additions to utility property, plant
and equipment (105,999 ) (110,279 ) Cash additions to nuclear fuel
(17,690 ) (16,879 ) Decommissioning trust funds (4,550 ) (4,552 )
Other (2,151 ) (2,331 )
Net cash used for investing
activities (130,390 ) (134,041 )
Cash flows from financing activities: Dividends paid
(21,969 ) (20,714 ) Borrowings under the revolving credit facility,
net 83,420 4,164 Other (928 ) (207 )
Net cash provided by (used
for) financing activities 60,523 (16,757
) Net decrease in cash and cash equivalents
(12,896 ) (99,411 ) Cash and
cash equivalents at beginning of period 25,592
111,057 Cash and cash equivalents at end of
period $ 12,696 $ 11,646
(a) Includes funding of $6.9 million for employee
pension and other post-retirement benefit plans for the six months
ended June 30, 2014, compared to funding of $17.9 million for the
six months ended June 30, 2013.
El Paso Electric
CompanyQuarter Ended June 30, 2014 and 2013Sales and
Revenues Statistics
Increase (Decrease) 2014 2013
Amount Percentage
kWh sales (in
thousands):
Retail: Residential 650,003 659,825 (9,822 ) (1.5 )% Commercial and
industrial, small 620,630 631,246 (10,616 ) (1.7 )% Commercial and
industrial, large 292,113 292,282 (169 ) (0.1 )% Public authorities
434,930 437,248 (2,318 ) (0.5 )% Total retail sales
1,997,676 2,020,601 (22,925 ) (1.1 )% Wholesale:
Sales for resale 20,328 20,141 187 0.9 % Off-system sales 565,853
532,334 33,519 6.3 % Total wholesale sales
586,181 552,475 33,706 6.1 % Total kWh sales
2,583,857 2,573,076 10,781 0.4 %
Operating
revenues (in thousands):
Non-fuel base revenues: Retail: Residential $ 59,828 $ 60,631 $
(803 ) (1.3 )% Commercial and industrial, small 53,675 53,729 (54 )
(0.1 )% Commercial and industrial, large 9,963 10,021 (58 ) (0.6 )%
Public authorities 26,915 26,883 32 0.1 %
Total retail non-fuel base revenues 150,381 151,264 (883 ) (0.6 )%
Wholesale: Sales for resale 680 702 (22 ) (3.1 )%
Total non-fuel base revenues 151,061 151,966 (905 )
(0.6 )% Fuel revenues: Recovered from customers during the period
40,529 32,368 8,161 25.2 % Under collection of fuel (a) 15,369
12,788 2,581 20.2 % New Mexico fuel in base rates 17,132
17,642 (510 ) (2.9 )% Total fuel revenues (b) 73,030
62,798 10,232 16.3 % Off-system sales: Fuel cost
18,000 14,993 3,007 20.1 % Shared margins 2,645 2,246 399 17.8 %
Retained margins 322 273 49 17.9 % Total
off-system sales 20,967 17,512 3,455 19.7 % Other (c) 6,743
7,838 (1,095 ) (14.0 )% Total operating revenues $ 251,801
$ 240,114 $ 11,687 4.9 % (a) 2014
includes $2.2 million related to Palo Verde performance rewards,
net. (b) Includes deregulated Palo Verde Unit 3 revenues for the
New Mexico jurisdiction of $3.6 million and $3.2 million,
respectively. (c) Represents revenues with no related kWh sales.
El Paso Electric CompanyQuarter Ended June
30, 2014 and 2013Other Statistical Data
Increase (Decrease) 2014
2013 Amount Percentage
Average number of
retail customers: (a)
Residential 352,035 347,360 4,675 1.3
%
Commercial and industrial, small 39,482 38,739 743 1.9 % Commercial
and industrial, large 49 49 — — Public authorities 5,108
4,978 130 2.6 % Total 396,674 391,126
5,548 1.4 %
Number of retail
customers (end of period): (a)
Residential 352,340 347,866 4,474 1.3 % Commercial and industrial,
small 39,557 38,801 756 1.9 % Commercial and industrial, large 49
49 — — Public authorities 5,079 5,012 67 1.3 %
Total 397,025 391,728 5,297 1.4 %
Weather
statistics: (b)
10-Yr Average Heating degree days 84 81 69 Cooling degree
days 1,095 1,138 1,051
Generation and
purchased power (kWh, in thousands):
Increase (Decrease) 2014 2013 Amount
Percentage Palo Verde 1,191,898 1,219,051 (27,153 )
(2.2 )% Four Corners 137,988 140,027 (2,039 ) (1.5 )% Gas plants
1,027,544 1,001,564 25,980 2.6 % Total
generation 2,357,430 2,360,642 (3,212 ) (0.1 )% Purchased power:
Photovoltaic 79,385 38,363 41,022 — Other 321,504 335,019
(13,515 ) (4.0 )% Total purchased power 400,889
373,382 27,507 7.4 % Total available energy 2,758,319
2,734,024 24,295 0.9 % Line losses and Company use 174,462
160,948 13,514 8.4 % Total kWh sold 2,583,857
2,573,076 10,781 0.4 %
Palo Verde capacity factor
87.8
%
89.6
%
(1.8
)%
(a)
The number of retail customers is based on
the number of service locations.
(b)
A degree day is recorded for each degree
that the average outdoor temperature varies from a standard of 65
degrees Fahrenheit.
El Paso Electric CompanySix Months Ended June 30,
2014 and 2013Sales and Revenues Statistics
Increase (Decrease)
2014 2013 Amount Percentage
kWh sales (in
thousands):
Retail: Residential 1,193,033 1,258,331 (65,298 ) (5.2 )%
Commercial and industrial, small 1,114,549 1,132,950 (18,401 ) (1.6
)% Commercial and industrial, large 518,665 536,867 (18,202 ) (3.4
)% Public authorities 777,958 796,332 (18,374 ) (2.3
)% Total retail sales 3,604,205 3,724,480 (120,275 )
(3.2 )% Wholesale: Sales for resale 32,720 32,140 580 1.8 %
Off-system sales 1,262,867 1,208,261 54,606
4.5 % Total wholesale sales 1,295,587 1,240,401
55,186 4.4 % Total kWh sales 4,899,792 4,964,881
(65,089 ) (1.3 )%
Operating
revenues (in thousands):
Non-fuel base revenues: Retail: Residential $ 105,422 $ 110,239 $
(4,817 ) (4.4 )% Commercial and industrial, small 85,796 86,504
(708 ) (0.8 )% Commercial and industrial, large 18,291 18,569 (278
) (1.5 )% Public authorities 44,571 44,444 127
0.3 % Total retail non-fuel base revenues 254,080 259,756 (5,676 )
(2.2 )% Wholesale: Sales for resale 1,128 1,090 38
3.5 % Total non-fuel base revenues 255,208 260,846
(5,638 ) (2.2 )% Fuel revenues: Recovered from
customers during the period 71,702 59,095 12,607 21.3 % Under
collection of fuel (a) 13,359 8,946 4,413 49.3 % New Mexico fuel in
base rates 33,227 34,551 (1,324 ) (3.8 )% Total fuel
revenues (b) 118,288 102,592 15,696 15.3 %
Off-system sales: Fuel cost 39,463 31,156 8,307 26.7 %
Shared margins 9,389 6,247 3,142 50.3 % Retained margins 1,124
749 375 50.1 % Total off-system sales 49,976
38,152 11,824 31.0 % Other (c) 13,845 15,814 (1,969 )
(12.5 )% Total operating revenues $ 437,317 $ 417,404
$ 19,913 4.8 % (a) 2014 includes $2.2 million related
to Palo Verde performance rewards, net. (b) Includes deregulated
Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $8.0
million and $6.2 million, respectively. (c) Represents revenues
with no related kWh sales.
El Paso Electric
CompanySix Months Ended June 30, 2014 and 2013Other
Statistical Data Increase
(Decrease) 2014 2013 Amount
Percentage
Average number of
retail customers: (a)
Residential 351,183 346,757 4,426 1.3 % Commercial and industrial,
small 39,350 38,571 779 2.0 % Commercial and industrial, large 50
49 1 2.0 % Public authorities 5,078 4,966 112
2.3 % Total 395,661 390,343 5,318 1.4 %
Number of retail
customers (end of period): (a)
Residential 352,340 347,866 4,474 1.3 % Commercial and industrial,
small 39,557 38,801 756 1.9 % Commercial and industrial, large 49
49 — — Public authorities 5,079 5,012 67 1.3 %
Total 397,025 391,728 5,297 1.4 %
Weather
statistics: (b)
10-Yr Average Heating degree days 1,042 1,419 1,255 Cooling
degree days 1,120 1,171 1,077
Generation and
purchased power (kWh, in thousands):
Increase (Decrease) 2014 2013 Amount
Percentage Palo Verde 2,555,975 2,552,933 3,042 0.1 %
Four Corners 272,224 324,070 (51,846 ) (16.0 )% Gas plants
1,595,288 1,610,927 (15,639 ) (1.0 )% Total
generation 4,423,487 4,487,930 (64,443 ) (1.4 )% Purchased power:
Photovoltaic 108,184 66,063 42,121 63.8 % Other 653,448
656,024 (2,576 ) (0.4 )% Total purchased power 761,632
722,087 39,545 5.5 % Total available energy
5,185,119 5,210,017 (24,898 ) (0.5 )% Line losses and Company use
285,327 245,136 40,191 16.4 % Total kWh sold
4,899,792 4,964,881 (65,089 ) (1.3 )%
Palo Verde capacity factor
94.6
%
94.5
%
0.1
%
(a)
The number of retail customers presented
is based on the number of service locations.
(b)
A degree day is recorded for each degree
that the average outdoor temperature varies from a standard of 65
degrees Fahrenheit.
El Paso Electric CompanyFinancial
StatisticsAt June 30, 2014 and 2013(In thousands,
except number of shares, book value per share, and ratios)
Balance Sheet 2014 2013
Cash and cash equivalents $ 12,696 $ 11,646
Common stock equity $ 973,828 $ 848,427 Long-term debt 999,665
999,576 Total capitalization $ 1,973,493 $
1,848,003 Short-term borrowings under the revolving
credit facility $ 97,772 $ 26,319 Number of
shares - end of period 40,352,024 40,250,257
Book value per common share $ 24.13 $ 21.08
Common equity ratio (a) 47.0 % 45.3 % Debt ratio 53.0 % 54.7 %
(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 RCF.
El Paso Electric CompanyMedia ContactsEddie Gutierrez,
915-543-5763eduardo.gutierrez@epelectric.comorInvestor
RelationsJohn Boomer,
915-543-4347john.boomer@epelectric.comorLisa Budtke,
915-543-5947lisa.budtke@epelectric.com
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