El Paso Electric Company (NYSE:EE):
Overview
- For the second quarter of 2017, El Paso
Electric Company ("EE" or the "Company") reported net income of
$36.1 million, or $0.89 basic and diluted earnings per share. In
the second quarter of 2016, EE reported net income of $22.3
million, or $0.55 basic and diluted earnings per share.
- For the six months ended June 30, 2017,
EE reported net income of $32.1 million, or $0.79 basic and diluted
earnings per share. Net income for the six months ended June 30,
2016 was $16.5 million, or $0.41 basic and diluted earnings per
share.
"During the second quarter of 2017, our region continued to
experience solid growth and we set a new native system peak of
1,935 MW on June 22, 2017, which is 2.3%, or 43 MW, higher than the
peak we established on July 14, 2016. Additionally, the Texas
Community Solar Program began commercial operation, which was
celebrated with a successful subscriber open house," said Mary
Kipp, President and Chief Executive Officer. "Our improved overall
financial results for the second quarter were largely due to the
new rates that we began to recognize in August 2016, the resolution
of the 2016 Texas fuel reconciliation, continued customer growth,
and warmer weather conditions."
Earnings Summary
The table and explanations below present the major factors
affecting second quarter and first half of 2017 net income relative
to second quarter and first half of 2016 net income, respectively,
(in thousands except per share data):
Quarter Ended Six Months
Ended After-
After- Pre-Tax Tax Basic
Pre-Tax Tax Basic Effect Effect
EPS Effect Effect EPS June 30, 2016 $
22,284 $ 0.55 $ 16,476 $ 0.41 Changes in: Retail non-fuel base
revenues 18,557 12,062 0.30 23,726 15,421 0.38 Palo Verde
performance rewards, net 5,005 3,253 0.08 5,005 3,253 0.08
Investment and interest income 3,195 2,477 0.06 4,252 3,289 0.08
Depreciation and amortization 1,357 882 0.02 2,716 1,765 0.04
Allowance for funds used during construction (2,071 ) (1,838 )
(0.05 ) (4,459 ) (3,923 ) (0.10 ) Administrative and general
expense (2,214 ) (1,438 ) (0.04 ) (1,567 ) (1,019 ) (0.02 ) Taxes
other than income taxes (1,945 ) (1,264 ) (0.03 ) (2,863 ) (1,860 )
(0.05 ) Interest on long-term debt (109 ) (71 ) — (1,877 ) (1,220 )
(0.03 ) Other (281 ) — (105 ) —
June 30, 2017 $ 36,066 $ 0.89 $ 32,077
$ 0.79
Financial Effect of the Public Utility Commission of Texas
("PUCT") Final Order
On August 25, 2016, the PUCT issued its final order in the
Company's rate case in Docket No. 44941 ("PUCT Final Order"). The
PUCT Final Order had a significant effect on the Company's three
and six months ended June 30, 2017 financial results, the impacts
of which are reflected in the table above and discussed below. For
financial reporting purposes, the Company deferred any recognition
of the Company's request in its 2015 Texas retail rate case until
it received the PUCT Final Order in August 2016. Accordingly, it
recorded in the third quarter of 2016 the cumulative effect of the
PUCT Final Order that related back to January 12, 2016. The impact
of the PUCT Final Order recorded in August 2016 relating to the
three and six months ended June 30, 2016 would have increased net
income by approximately $8.0 million and $12.6 million,
respectively.
Second Quarter 2017
Income for the quarter ended June 30, 2017, when compared to the
quarter ended June 30, 2016, was positively affected by (presented
on a pre-tax basis):
- Increased retail non-fuel base revenues
primarily due to the non-fuel base rate increase approved in the
PUCT Final Order. The second quarter of 2016 did not include
approximately $11.3 million of retail non-fuel base revenues for
the period from April 1, 2016 through June 30, 2016, which revenues
were not recognized until the PUCT Final Order was approved in
August 2016. Warmer weather and the 1.8% growth in the average
number of retail customers served also contributed to the increase
in retail non-fuel base revenues in the quarter ended June 30,
2017.
- Palo Verde performance rewards,
associated with the 2013 to 2015 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. 46308 for the period from April 2013 through March 2016,
were recorded in June 2017 with no comparable amount in the quarter
ended June 30, 2016.
- Increased investment and interest
income primarily due to higher realized gains on securities sold
from the Company’s Palo Verde decommissioning trust in the second
quarter of 2017 compared to the second quarter of 2016.
- Decreased depreciation and amortization
primarily due to (i) reductions of approximately $2.9 million
resulting from changes in depreciation rates as approved in the
PUCT Final Order and in the final order in the Company's 2015 New
Mexico retail rate case and (ii) the sale of the Company's interest
in Units 4 and 5 of the Four Corners Power Plant. These decreases
were partially offset by increases in plant, including Montana
Power Station ("MPS") Units 3 and 4, which were placed in service
in May and September 2016, respectively.
Income for the quarter ended June 30, 2017, when compared to the
quarter ended June 30, 2016, was negatively affected by (presented
on a pre-tax basis):
- Decreased allowance for funds used
during construction ("AFUDC") due to (i) lower balances of
construction work in progress ("CWIP"), primarily due to MPS Units
3 and 4 being placed in service in May and September 2016,
respectively, and (ii) a reduction in the AFUDC rate effective
January 2017.
- Increased administrative and general
("A&G") expenses primarily due to timing of the accrual of
employee incentive compensation and an annual merit increase.
- Increased taxes other than income taxes
primarily due to increased revenue related taxes and increased
property valuations in Texas as a result of MPS Units 3 and 4 being
placed in service in 2016.
First Six Months of 2017
Income for the six months ended June 30, 2017, when compared to
the six months ended June 30, 2016, was positively affected by
(presented on a pre-tax basis):
- Increased retail non-fuel base revenues
primarily due to the non-fuel base rate increase approved in the
PUCT Final Order. The six months ended June 30, 2016 did not
include approximately $17.2 million of retail non-fuel base
revenues for the period from January 12, 2016 through June 30,
2016, which revenues were not recognized until the PUCT Final Order
was approved in August 2016. The 1.7% growth in the average number
of retail customers served also contributed to the increase in
retail non-fuel base revenues.
- Increased investment and interest
income primarily due to higher realized gains on securities sold
from the Company’s Palo Verde decommissioning trust during the six
months ended June 30, 2017 compared to the six months ended June
30, 2016.
- Palo Verde performance rewards,
associated with the 2013 to 2015 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. 46308 for the period from April 2013 through March 2016,
were recorded in June 2017 with no comparable amount during the six
months ended June 30, 2016.
- Decreased depreciation and amortization
primarily due to (i) reductions of approximately $5.8 million
resulting from changes in depreciation rates as approved in the
PUCT Final Order and in the final order in the Company's 2015 New
Mexico retail rate case and (ii) the sale of the Company's interest
in Units 4 and 5 of the Four Corners Power Plant. These decreases
were partially offset by increases in plant, including MPS Units 3
and 4, which were placed in service in 2016.
Income for the six months ended June 30, 2017, when compared to
the six months ended June 30, 2016, was negatively affected by
(presented on a pre-tax basis):
- Decreased AFUDC due to (i) lower
balances of CWIP, primarily due to MPS Units 3 and 4 being placed
in service in 2016 and (ii) a reduction in the AFUDC rate effective
January 2017.
- Increased taxes other than income taxes
primarily due to increased revenue related taxes and increased
property valuations in Texas as a result of MPS Units 3 and 4 being
placed in service in 2016. These increases were partially offset by
decreased property taxes in New Mexico due to decreased property
valuations.
- Increased interest on long-term debt
primarily due to the $150 million principal amount of senior notes
issued in March 2016.
- Increased A&G expenses primarily
due to timing of the accrual of employee incentive compensation and
an annual merit increase.
Retail Non-fuel Base Revenues
Excluding the $11.3 million PUCT Final Order impact, for the
second quarter of 2017, retail non-fuel base revenues increased
$7.3 million pre-tax, or 4.5%, compared to the second quarter of
2016. This increase primarily includes (i) a $4.3 million increase
in revenues from residential customers due to a 6.7% increase in
kWh sales which were driven by warmer weather and a 1.6% increase
in the average number of residential customers, (ii) a $1.2 million
increase in revenues from sales to public authorities due to a 4.5%
increase in kWh sales which were driven by warmer weather, and
(iii) a $1.1 million increase in revenues from small commercial and
industrial customers due to a 2.2% increase in kWh sales which were
driven by a 2.5% increase in the average number of small commercial
and industrial customers. Cooling degree days increased 14.8% in
the quarter ended June 30, 2017, when compared to the quarter ended
June 30, 2016. Cooling degree days for the second quarter ended
June 30, 2017 were 4.5% above the 10-year average. The Company
experienced an overall 1.8% increase in the average number of
customers served. Non-fuel base revenues and kWh sales for the
quarter ended June 30, 2017 are provided by customer class on page
12 of this news release.
Excluding the $17.2 million PUCT Final Order impact, for the six
months ended June 30, 2017, retail non-fuel base revenues increased
$6.5 million pre-tax, or 2.4%, compared to the six months ended
June 30, 2016. This increase primarily includes (i) a $3.5 million
increase in revenues from residential customers due to a 1.7%
increase in kWh sales which were driven by a 1.5% increase in the
average number of residential customers served and (ii) a $2.1
million increase in revenues from small commercial and industrial
customers due to a 1.2% increase in kWh sales which were driven by
a 3.2% increase in the average number of small commercial and
industrial customers served. The Company experienced an overall
1.7% increase in the average number of customers served. Weather
had minimal impact in the six months ended June 30, 2017, when
compared to the six months ended June 30, 2016 due to milder
weather in the first quarter of 2017 offsetting warmer weather in
the second quarter of 2017. Non-fuel base revenues and kWh sales
for the six months ended June 30, 2017 are provided by customer
class on page 14 of this news release.
The second quarter of 2017 and the first half of 2017 included
approximately $0.9 million and $1.7 million, respectively, of base
revenues associated with the Four Corners surcharge which was
established in the PUCT Final Order. This surcharge represents $3.7
million of annualized base revenue and in accordance with the PUCT
Final Order, was discontinued in July 2017.
Rate Cases
2017 Texas Retail Rate Case Filing
On February 13, 2017, the Company filed with the City of El
Paso, other municipalities incorporated in the Company's Texas
service territory and the PUCT in Docket No. 46831, a request for
an increase in non-fuel base revenues of approximately $42.5
million. On July 21, 2017, the Company filed its rebuttal testimony
modifying the requested increase to $39.2 million. The decrease
from the original request related primarily to the transfer of the
recovery of $3.0 million of the rate case expenses to a separate
proceeding. Hearings on the merits of this rate case are scheduled
to begin on August 21, 2017. The Company requested, pursuant to its
statutory right, to have its new rates relate back for consumption
on and after July 18, 2017, which is the 155th day after the filing
of the rate case. The difference in rates that would have been
billed will be surcharged or refunded to customers after the PUCT's
final order in Docket No. 46831. The PUCT has the authority to
require the Company to surcharge or refund such difference over a
period not to exceed 18 months. The Company cannot predict the
outcome or the timing of the rate case at this time.
Texas Fuel Reconciliation Proceeding
On June 29, 2017, the PUCT approved a settlement in the Texas
fuel reconciliation proceeding designated as PUCT Docket No. 46308.
The settlement provides for the reconciliation of $436.6 million of
fuel and purchased power costs incurred from April 1, 2013 through
March 31, 2016. The financial results for the quarter ended June
30, 2017 include a $5.0 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 2013 to 2015 performance periods net of
disallowed fuel and purchased power costs as approved in the
settlement.
Quarterly Cash Dividend
On May 25, 2017, our Board of Directors approved an increase to
the quarterly cash dividend to $0.335 per share of common stock
from our previous quarterly rate of $0.31 per share. This
represents an increase in the annualized cash dividend from $1.24
to $1.34 per share. The dividend increase commenced with the June
30, 2017 dividend payment. On July 27, 2017, our Board of Directors
declared a quarterly cash dividend of $0.335 per share payable on
September 29, 2017 to shareholders of record as of the close of
business on September 15, 2017.
Capital and Liquidity
In March 2016, we issued $150 million in aggregate principal
amount of 5.00% Senior Notes due December 1, 2044 to repay
outstanding short-term borrowings on our Revolving Credit Facility
("RCF") used for working capital and general corporate purposes,
which may include funding capital expenditures. We continue to
maintain a strong capital structure in which common stock equity
represented 42.7% of our capitalization (common stock equity,
long-term debt, current maturities of long-term debt and short-term
borrowings under the RCF) as of June 30, 2017. At June 30, 2017, we
had a balance of $11.3 million in cash and cash equivalents. Based
on current projections, we believe that we will have adequate
liquidity through our current cash balances, cash from operations
and available borrowings under our RCF to meet all of our
anticipated cash requirements for the next twelve months including
the maturity of $50.0 million aggregate principal amount of our
Series B 4.47% Senior Notes (maturing on August 15, 2017) and $33.3
million aggregate principal amount of 2012 Series A 1.875%
Pollution Control Bonds which are subject to mandatory tender for
purchase on September 1, 2017.
Cash flows from operations for the six months ended June 30,
2017 were $68.0 million, compared to $40.7 million for the six
months ended June 30, 2016. The primary factors contributing to the
increase in cash flows from operations were (i) the increase in net
income and deferred income taxes and (ii) changes in accounts
payable and accounts receivable. A component of cash flows from
operations is the change in net over-collection and
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,
2017, we had fuel over-recoveries of $2.7 million compared to
under-recoveries of fuel costs of $2.0 million during the six
months ended June 30, 2016. At June 30, 2017, we had a net fuel
under-recovery balance of $8.2 million, including an under-recovery
of $8.5 million in Texas offset by an over-recovery of $0.3 million
in New Mexico. Contributing to the under-recovery balance in Texas
is the recognition of $5.0 million resulting from the settlement of
the Texas fuel reconciliation in the second quarter of 2017. On
November 30, 2016, we filed a request to increase our Texas fixed
fuel factor by approximately 28.8% to reflect increased fuel
expenses primarily related to an increase in the price of natural
gas used to generate power. The increase in our Texas fixed fuel
factor was effective on an interim basis on January 1, 2017 and was
approved by the PUCT on January 10, 2017.
During the six months ended June 30, 2017, our primary capital
requirements were for the construction and purchase of our electric
utility plant, payments of common stock dividends and purchases of
nuclear fuel. Capital requirements for new electric utility plant
were $108.1 million for the six months ended June 30, 2017 and
$102.8 million for the six months ended June 30, 2016. Capital
expenditures for 2017 are expected to be approximately $215.0
million. Capital requirements for purchases of nuclear fuel were
$20.6 million for the six months ended June 30, 2017, and
$20.5 million for the six months ended June 30, 2016.
On June 30, 2017, we paid a quarterly cash dividend of $0.335
per share, or $13.6 million, to shareholders of record as of the
close of business on June 16, 2017. We paid a total of $26.2
million in cash dividends during the six months ended June 30,
2017. At the current dividend rate, we expect to pay cash dividends
of approximately $53.4 million during 2017.
No shares of common stock were repurchased during the six months
ended June 30, 2017. As of June 30, 2017, a total of 393,816 shares
remain available for repurchase under our currently authorized
stock repurchase program. We may in the future make purchases of
our common stock in open market transactions at prevailing prices
and may engage in private transactions where appropriate.
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 our financial statements. On January 9, 2017, we exercised the
option to extend the maturity of the RCF by one year to January 14,
2020 and to increase the size of the facility by $50 million to
$350 million. We still have the option to extend the facility by
one additional year to January 2021 and to increase the RCF by up
to $50 million (up to a total of $400 million) upon the
satisfaction of certain conditions, more fully set forth in the
agreement, including obtaining commitments from lenders or third
party financial institutions. The total amount borrowed for nuclear
fuel by the RGRT, excluding debt issuance costs, was $133.9 million
at June 30, 2017, of which $38.9 million had been borrowed under
the RCF, and $95.0 million was borrowed through the issuance of
senior notes. Borrowings by the RGRT for nuclear fuel, excluding
debt issuance costs, were $129.6 million as of June 30, 2016, of
which $34.6 million had been borrowed under the RCF and $95.0
million was borrowed through the issuance of 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, 2017, $140.0 million was
outstanding under the RCF for working capital and general corporate
purposes, which may include funding capital expenditures. At June
30, 2016, $67.0 million was outstanding under the RCF for working
capital and general corporate purposes. Total aggregate borrowings
under the RCF at June 30, 2017 were $178.9 million with an
additional $171.1 million available to borrow, after giving
consideration to the January 2017 $50 million increase.
We received approval from the New Mexico Public Regulation
Commission ("NMPRC") on October 7, 2015, and from the Federal
Energy Regulatory Commission ("FERC") on October 19, 2015, to issue
up to $310 million in long-term debt and to guarantee the issuance
of up to $65 million of debt by the RGRT to finance future
purchases of nuclear fuel and to refinance existing nuclear fuel
debt obligations. We also requested approval from the FERC to
continue to utilize our existing RCF without change from the FERC’s
previously approved authorization. The FERC authorization is
effective from November 15, 2015 through November 15, 2017. The
approvals granted in these cases supersede prior approvals. Under
this authorization, on March 24, 2016, we issued $150 million in
aggregate principal amount of 5.00% Senior Notes due December 1,
2044. These senior notes constitute an additional issuance of our
5.00% Senior Notes due 2044, of which $150 million was previously
issued on December 1, 2014, for a total principal amount
outstanding of $300 million.
2017 Earnings Guidance
On February 13, 2017, the Company filed a rate case in Texas as
discussed above. The outcome of this case could have a significant
impact on the Company's results of operations in 2017. Since we
cannot predict the outcome of this rate case at this time, the
Company is not currently providing earnings guidance.
Conference Call
A conference call to discuss our financial results for the
second quarter of 2017 is scheduled for 10:30 A.M. Eastern
Time, on August 2, 2017. The dial-in number is 888-471-3831 with a
conference ID number of 1899332. The international dial-in number
is 719-325-2359. The conference leader will be Lisa Budtke,
Director-Treasury Services and Investor Relations. A replay will
run through August 16, 2017 with a dial-in number of 888-203-1112
and a conference ID number of 1899332. 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 are forward-looking
statements made pursuant to the safe harbor provisions of the
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. This
information may involve risks and uncertainties that could cause
actual results to differ materially from such forward-looking
statements. Additional information concerning factors that could
cause actual results to differ materially from those expressed in
forward-looking statements is contained in EE's most recently filed
periodic reports and in other filings made by EE with the U.S.
Securities and Exchange Commission ("SEC"), and include, but is 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) full and timely 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, including distributed generation; (v) unanticipated
increased costs associated with scheduled and unscheduled outages
of generating plant; (vi) unanticipated maintenance, repair, or
replacement costs for generation, transmission, or distribution
facilities and the recovery of proceeds from insurance policies
providing coverage for such costs; (vii) the size of our
construction program and our ability to complete construction on
budget and on time; (viii) potential delays in our construction
schedule due to legal challenges or other reasons; (ix) costs at
Palo Verde; (x) deregulation and competition in the
electric utility industry; (xi) possible increased costs of
compliance with environmental or other laws, regulations and
policies; (xii) possible income tax and interest payments as a
result of audit adjustments proposed by the IRS or state taxing
authorities; (xiii) uncertainties and instability in the
financial markets and the resulting impact on EE's ability to
access the capital and credit markets; (xiv) possible physical or
cyber attacks, intrusions or other catastrophic events; and
(xv) other factors of which we are currently unaware or deem
immaterial. EE's filings are available from the SEC 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. Management cautions against putting undue reliance on
forward-looking statements or projecting any future results based
on such statements or present or prior earnings levels.
Forward-looking statements speak only as of the date of this news
release, and EE does not undertake to update any forward-looking
statement contained herein.
El Paso Electric Company Statements of
Operations Quarter Ended June 30, 2017 and 2016 (In
thousands except for per share data) (Unaudited)
2017 2016
Variance Operating revenues $ 251,843 $
217,865 $ 33,978
Energy expenses: Fuel 49,173
43,143 6,030 Purchased and interchanged power 16,721
13,610 3,111 65,894
56,753 9,141
Operating revenues net
of energy expenses 185,949 161,112
24,837
Other operating expenses: Other
operations 59,835 56,817 3,018 Maintenance 20,415 20,426 (11 )
Depreciation and amortization 22,495 23,852 (1,357 ) Taxes other
than income taxes 17,265 15,320
1,945 120,010 116,415
3,595
Operating income 65,939
44,697 21,242
Other income
(deductions): Allowance for equity funds used during
construction 726 2,133 (1,407 ) Investment and interest income, net
6,786 3,591 3,195 Miscellaneous non-operating income 39 145 (106 )
Miscellaneous non-operating deductions (530 ) (890 )
360 7,021 4,979
2,042
Interest charges (credits): Interest on
long-term debt and revolving credit facility 18,407 18,298 109
Other interest 762 272 490 Capitalized interest (1,344 ) (1,253 )
(91 ) Allowance for borrowed funds used during construction
(711 ) (1,375 ) 664 17,114
15,942 1,172
Income before income
taxes 55,846 33,734 22,112
Income tax expense
19,780 11,450 8,330
Net
income $ 36,066 $ 22,284
$ 13,782 Basic earnings per
share $ 0.89 $ 0.55
$ 0.34 Diluted earnings per
share $ 0.89 $ 0.55
$ 0.34 Dividends declared per share
of common stock $ 0.335 $ 0.310 $ 0.025
Weighted average number of shares outstanding 40,409
40,345 64
Weighted average number of shares and
dilutive potential shares outstanding
40,526 40,399 127
El Paso Electric Company Statements of
Operations Six Months Ended June 30, 2017 and 2016
(In thousands except for per share data) (Unaudited)
2017 2016
Variance Operating revenues $ 423,178 $
375,674 $ 47,504
Energy expenses Fuel 85,779 77,462 8,317
Purchased and interchanged power 30,394 23,256
7,138 116,173 100,718
15,455
Operating revenues net of energy
expenses 307,005 274,956
32,049
Other operating expenses: Other operations
115,958 115,204 754 Maintenance 41,405 37,941 3,464 Depreciation
and amortization 44,429 47,145 (2,716 ) Taxes other than income
taxes 32,995 30,132 2,863
234,787 230,422 4,365
Operating income 72,218 44,534
27,684
Other income (deductions): Allowance
for equity funds used during construction 1,541 4,469 (2,928 )
Investment and interest income, net 10,772 6,520 4,252
Miscellaneous non-operating income 124 801 (677 ) Miscellaneous
non-operating deductions (1,270 ) (1,356 ) 86
11,167 10,434 733
Interest charges (credits):
Interest on long-term debt and revolving credit facility 36,774
34,897 1,877 Other interest 1,182 834 348 Capitalized interest
(2,638 ) (2,495 ) (143 ) Allowance for borrowed funds used during
construction (1,502 ) (3,033 ) 1,531
33,816 30,203 3,613
Income before income taxes 49,569 24,765 24,804
Income
tax expense 17,492 8,289
9,203
Net income $ 32,077
$ 16,476 $ 15,601
Basic earnings per share $ 0.79
$ 0.41 $ 0.38
Diluted earnings per share $ 0.79
$ 0.41 $ 0.38
Dividends declared per share of common stock $ 0.645
$ 0.605 $ 0.040
Weighted average number of shares
outstanding 40,398 40,335 63
Weighted average number of shares and
dilutive potential shares outstanding
40,499 40,381 118
El Paso Electric Company Cash Flow Summary
Six Months Ended June 30, 2017 and 2016 (In thousands and
Unaudited) 2017 2016
Cash flows from operating activities: Net income $ 32,077 $
16,476 Adjustments to reconcile net income to net cash provided by
operations: Depreciation and amortization of electric plant in
service 44,429 47,145 Amortization of nuclear fuel 21,100 21,957
Deferred income taxes, net 15,339 6,695 Net gains on sale of
decommissioning trust funds (7,357 ) (3,498 ) Other 7,809 4,422
Change in: Accounts receivable (32,684 ) (39,117 ) Net
under/over-collection of fuel revenues 2,667 (1,990 ) Accounts
payable (1,262 ) (9,345 ) Other (14,127 ) (2,052 )
Net cash provided by operating activities
67,991 40,693 Cash
flows from investing activities: Cash additions to utility
property, plant and equipment (108,113 ) (102,785 ) Cash additions
to nuclear fuel (20,647 ) (20,478 ) Decommissioning trust funds
(3,429 ) (4,225 ) Other (3,343 ) (2,161 )
Net cash
used for investing activities (135,532 )
(129,649 ) Cash flows from financing
activities: Dividends paid (26,157 ) (24,474 ) Borrowings
(repayments) under the revolving credit facility, net 97,310
(40,124 ) Proceeds from issuance of senior notes — 157,052 Other
(757 ) (2,040 )
Net cash provided by financing
activities 70,396 90,414
Net increase in cash and cash equivalents
2,855 1,458 Cash and cash equivalents at
beginning of period 8,420
8,149 Cash and cash equivalents at end of
period $ 11,275 $ 9,607
El Paso Electric Company Quarter Ended June
30, 2017 and 2016 Sales and Revenues Statistics
Increase (Decrease)
2017 2016 Amount
Percentage
kWh sales (in
thousands):
Retail: Residential 724,656 679,035 45,621 6.7 % Commercial and
industrial, small 647,377 633,714 13,663 2.2 % Commercial and
industrial, large 276,391 270,908 5,483 2.0 % Sales to public
authorities 423,374 405,277 18,097 4.5
% Total retail sales 2,071,798 1,988,934
82,864 4.2 % Wholesale: Sales for resale 21,718 20,668 1,050
5.1 % Off-system sales 374,861 450,801 (75,940
) (16.8 )% Total wholesale sales 396,579 471,469
(74,890 ) (15.9 )% Total kWh sales 2,468,377
2,460,403 7,974 0.3 %
Operating
revenues (in thousands):
Non-fuel base revenues: Retail: Residential $ 75,027 $ 62,679 $
12,348 19.7 % Commercial and industrial, small 57,090 54,707 2,383
4.4 % Commercial and industrial, large 10,443 9,489 954 10.1 %
Sales to public authorities 27,544 24,672
2,872 11.6 % Total retail non-fuel base revenues (a) 170,104
151,547 18,557 12.2 % Wholesale: Sales for resale 859
826 33 4.0 % Total non-fuel base revenues
170,963 152,373 18,590 12.2 % Fuel
revenues: Recovered from customers during the period 57,148 26,219
30,929 — Under collection of fuel (b) 5,822 6,096 (274 ) (4.5 )%
New Mexico fuel in base rates (c) — 16,602
(16,602 ) — Total fuel revenues (d) 62,970 48,917
14,053 28.7 % Off-system sales: Fuel cost
8,833 8,398 435 5.2 % Shared margins 1,089 852 237 27.8 % Retained
margins 403 213 190 89.2 % Total
off-system sales 10,325 9,463 862 9.1 % Other (e) 7,585
7,112 473 6.7 % Total operating revenues $
251,843 $ 217,865 $ 33,978 15.6 % (a) 2016 excludes
$11.3 million of relate back revenues in Texas from April 2016
through June 2016 which were recorded in August 2016. (b) 2017
includes $5.0 million related to the Palo Verde performance
rewards, net. (c) Historically, fuel and purchased power costs in
the New Mexico jurisdiction were recorded through base rates and a
Fuel and Purchased Power Cost Adjustment Clause (the "FPPCAC") that
accounts for the changes in the costs of fuel relative to the
amount included in base rates. Effective July 1, 2016, with the
implementation of the NMPRC Final Order, these costs are no longer
recovered through base rates but are recovered through the FPPCAC.
(d) Includes deregulated Palo Verde Unit 3 revenues for the New
Mexico jurisdiction of $2.2 million and $1.9 million in 2017 and
2016, respectively. (e) Represents revenues with no related kWh
sales.
El Paso Electric Company Quarter
Ended June 30, 2017 and 2016 Other Statistical Data
Increase
(Decrease) 2017 2016 Amount
Percentage
Average number of
retail customers: (a)
Residential 367,686 361,812 5,874 1.6 % Commercial and industrial,
small 41,860 40,832 1,028 2.5 % Commercial and industrial, large 48
49 (1 ) (2.0 )% Sales to public authorities 5,622
5,274 348 6.6 % Total 415,216
407,967 7,249 1.8 %
Number of retail
customers (end of period): (a)
Residential 368,328 362,417 5,911 1.6 % Commercial and industrial,
small 41,653 40,901 752 1.8 % Commercial and industrial, large 48
49 (1 ) (2.0 )% Sales to public authorities 5,603
5,251 352 6.7 % Total 415,632
408,618 7,014 1.7 %
Weather
statistics: (b)
10-Yr Average Cooling degree days 1,108 965 1,060 Heating
degree days 45 75 68
Generation and
purchased power (kWh, in thousands):
Increase (Decrease) 2017 2016 Amount
Percentage Palo Verde 1,151,530 1,165,459 (13,929 )
(1.2 )% Four Corners (c) — 82,143 (82,143 ) — Gas plants
1,055,911 1,032,440 23,471 2.3 %
Total generation 2,207,441 2,280,042 (72,601 ) (3.2 )% Purchased
power: Photovoltaic 91,921 88,765 3,156 3.6 % Other 307,904
239,329 68,575 28.7 % Total
purchased power 399,825 328,094
71,731 21.9 % Total available energy 2,607,266 2,608,136
(870 ) — Line losses and Company use 138,889
147,733 (8,844 ) (6.0 )% Total kWh sold
2,468,377 2,460,403 7,974 0.3 %
Palo Verde capacity factor
84.8
%
85.8
%
(1.0
)%
Palo Verde O&M expenses (d)
$
25,931
$
24,048
$
1,883
(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. (c) The Company sold its
interest in Four Corners on July 6, 2016. (d) Represents the
Company's 15.8% interest in Palo Verde.
El Paso
Electric Company Six Months Ended June 30, 2017 and 2016
Sales and Revenues Statistics
Increase (Decrease) 2017
2016 Amount Percentage
kWh sales (in
thousands):
Retail: Residential 1,269,784 1,248,120 21,664 1.7 % Commercial and
industrial, small 1,147,967 1,133,940 14,027 1.2 % Commercial and
industrial, large 529,389 515,834 13,555 2.6 % Sales to public
authorities 758,937 751,512 7,425
1.0 % Total retail sales 3,706,077
3,649,406 56,671 1.6 % Wholesale: Sales for resale
32,639 32,509 130 0.4 % Off-system sales 971,623
1,029,474 (57,851 ) (5.6 )% Total wholesale sales
1,004,262 1,061,983 (57,721 ) (5.4 )%
Total kWh sales 4,710,339 4,711,389
(1,050 ) —
Operating
revenues (in thousands):
Non-fuel base revenues: Retail: Residential $ 126,337 $ 110,422 $
15,915 14.4 % Commercial and industrial, small 90,875 86,847 4,028
4.6 % Commercial and industrial, large 18,343 17,582 761 4.3 %
Sales to public authorities 45,094 42,072
3,022 7.2 % Total retail non-fuel base revenues (a)
280,649 256,923 23,726 9.2 % Wholesale: Sales for resale
1,322 1,195 127 10.6 % Total non-fuel
base revenues 281,971 258,118 23,853
9.2 % Fuel revenues: Recovered from customers during
the period 104,768 48,753 56,015 — Under (over) collection of fuel
(b) (c) (2,708 ) 1,993 (4,701 ) — New Mexico fuel in base rates (d)
— 32,828 (32,828 ) — Total fuel
revenues (e) 102,060 83,574 18,486
22.1 % Off-system sales: Fuel cost 20,361 16,890
3,471 20.6 % Shared margins 3,302 3,407 (105 ) (3.1 )% Retained
margins 862 573 289 50.4 % Total
off-system sales 24,525 20,870 3,655 17.5 % Other (f) 14,622
13,112 1,510 11.5 % Total operating
revenues $ 423,178 $ 375,674 $ 47,504 12.6 %
(a) 2016 excludes $17.2 million of relate back revenues in Texas
from January 12, 2016 through June 30, 2016 which were recorded in
August 2016. (b) Includes the portion of DOE refunds related to
spent fuel storage of $1.4 million and $1.6 million in 2017 and
2016, respectively, that were credited to customers through the
applicable fuel adjustment clauses. (c) 2017 includes $5.0 million
related to the Palo Verde performance rewards, net. (d)
Historically, fuel and purchased power costs were recorded through
base rates and a Fuel and Purchased Power Cost Adjustment Clause
(the "FPPCAC") that accounts for the changes in the costs of fuel
relative to the amount included in base rates. Effective July 1,
2016, with the implementation of the NMPRC Final Order, these costs
are no longer recovered through base rates but are recovered
through the FPPCAC. (e) Includes deregulated Palo Verde Unit 3
revenues for the New Mexico jurisdiction of $5.0 million and $4.0
million in 2017 and 2016, respectively. (f) Represents revenue with
no related kWh sales.
El Paso Electric Company
Six Months Ended June 30, 2017 and 2016 Other Statistical
Data Increase
(Decrease) 2017 2016 Amount
Percentage
Average number of
retail customers: (a)
Residential 366,497 360,929 5,568 1.5 % Commercial and industrial,
small 41,968 40,684 1,284 3.2 % Commercial and industrial, large 49
49 — — Sales to public authorities 5,528 5,324
204 3.8 % Total 414,042
406,986 7,056 1.7 %
Number of retail
customers (end of period): (a)
Residential 368,328 362,417 5,911 1.6 % Commercial and industrial,
small 41,653 40,901 752 1.8 % Commercial and industrial, large 48
49 (1 ) (2.0 )% Sales to public authorities 5,603
5,251 352 6.7 % Total 415,632
408,618 7,014 1.7 %
Weather
statistics: (b)
10-YearAverage
Cooling degree days 1,180 988 1,093 Heating degree days 855 1,129
1,203
Generation and
purchased power (kWh, in thousands):
Increase (Decrease) 2017 2016 Amount
Percentage Palo Verde 2,515,057 2,545,956 (30,899 )
(1.2 )% Four Corners (c) — 163,149 (163,149 ) — Gas plants
1,626,736 1,669,870 (43,134 ) (2.6 )%
Total generation 4,141,793 4,378,975 (237,182 ) (5.4 )% Purchased
power: Photovoltaic 156,656 156,529 127 0.1 % Other 671,279
444,486 226,793 51.0 % Total
purchased power 827,935 601,015
226,920 37.8 % Total available energy 4,969,728 4,979,990
(10,262 ) (0.2 )% Line losses and Company use 259,389
268,601 (9,212 ) (3.4 )% Total kWh sold
4,710,339 4,711,389 (1,050 ) —
Palo Verde capacity factor
93.1
%
93.7
%
(0.6
)%
Palo Verde O&M expenses (d)
$
47,539
$
46,391
$
1,148
(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. (c) The Company sold its
interest in Four Corners on July 6, 2016. (d) Represents the
Company's 15.8% interest in Palo Verde.
El Paso
Electric Company Financial Statistics At June 30,
2017 and 2016 (In thousands, except number of shares, book
value per common share, and ratios)
Balance Sheet 2017 2016 Cash and cash
equivalents $ 11,275 $ 9,607 Common stock
equity $ 1,085,826 $ 1,010,940 Long-term debt 1,195,748
1,278,301 Total capitalization $ 2,281,574
$ 2,289,241 Current maturities of long-term
debt $ 83,268 $ — Short-term borrowings under
the revolving credit facility $ 178,884 $ 101,614
Number of shares - end of period 40,596,665
40,520,871 Book value per common share $ 26.75
$ 24.95 Common equity ratio (a) 42.7 % 42.3 %
Debt ratio 57.3 % 57.7 % (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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170802005327/en/
El Paso Electric CompanyMedia ContactEddie Gutierrez,
915-543-5763eduardo.gutierrez@epelectric.comorInvestor
RelationsLisa Budtke,
915-543-5947lisa.budtke@epelectric.com
Excelerate Energy (NYSE:EE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Excelerate Energy (NYSE:EE)
Historical Stock Chart
From Apr 2023 to Apr 2024