News Column

El Paso Electric Announces Fourth Quarter and Annual Financial Results

February 24, 2014

EL PASO, Texas--(BUSINESS WIRE)--

El Paso Electric Company (NYSE: EE):

Overview

  • For the fourth quarter of 2013, El Paso Electric Company ("EE") or (the "Company") reported net income of $1.2 million, or $0.03 basic and diluted earnings per share, respectively. In the fourth quarter of 2012, EE reported net income of $4.8 million, or $0.12 basic and diluted earnings per share.
  • For the twelve months ended December 31, 2013, EE reported net income of $88.6 million, or $2.20 basic and diluted earnings per share. Net income for the twelve months ended December 31, 2012 was $90.8 million, or $2.27 and $2.26 basic and diluted earnings per share, respectively.

    “As we have for many years, we continue to experience an increase in the number of customers served. Due to less favorable weather during our summer cooling season and lower revenues from governmental customers, however, we experienced a decline in non-fuel base revenues during both the fourth quarter of 2013 and the twelve months ended December 31, 2013, as compared to the corresponding periods in the prior year,” said Tom Shockley, Chief Executive Officer. “Additionally, our revenues for the twelve months ended December 31, 2013 reflect a carryover impact of the reduction in non-fuel base rates for our Texas customers which became effective May 1, 2012. We are fortunate to be part of a vibrant and growing community and we look forward to continuing to meet the region's expanding energy needs with clean and reliable technology.”

    Earnings Summary

    The table and explanations below present the major factors affecting 2013 net income relative to 2012 net income.

          Quarter Ended   Twelve Months Ended
    Pre-Tax

    Effect

      After-Tax

    Net Income

      Basic EPSPre-Tax

    Effect

      After-Tax

    Net Income

      Basic

    EPS

    December 31, 2012 $ 4,819 $ 0.12 $ 90,846 $ 2.27
    Changes in:
    Operations and maintenance expense $ (3,989 ) (2,632 ) (0.07 ) $ (1,326 ) (875 ) (0.02 )
    Retail non-fuel base revenues (2,510 ) (1,656 ) (0.04 ) (3,784 ) (2,497 ) (0.06 )
    Interest on long-term debt (1,001 ) (660 ) (0.01 ) (4,003 ) (2,642 ) (0.07 )
    Deregulated Palo Verde Unit 3 revenues (592 ) (391 ) (0.01 ) 1,575 1,039 0.02
    Allowance for funds used during construction (439 ) (389 ) (0.01 ) 1,063 900 0.02
    Income tax adjustment 1,200 0.03 1,200 0.03
    Other 900   0.02   612   0.01  
    December 31, 2013 $ 1,191   $ 0.03   $ 88,583   $ 2.20  


    Fourth Quarter 2013

    Income for the quarter ended December 31, 2013, when compared to the same period last year, was negatively affected by:

  • Increased operations and maintenance expense primarily due to (i) a $1.6 million refund of transmission wheeling expense recorded in the fourth quarter of 2012 related to a transmission rate case resolution with no comparable activity in the current period, (ii) an increase in production maintenance expense of $1.9 million due to the timing of planned maintenance, and (iii) increased consulting and legal services related to the analysis of our future involvement at the Four Corners Generating Station.
  • Decreased retail non-fuel base revenues primarily due to milder weather in October at the end of the summer cooling season and due to effects of the federal government sequestration and shutdown in October 2013 on our governmental customers.
  • Increased interest on long-term debt due to interest on $150 million of 3.30% senior notes issued in December 2012.

    Income for the quarter ended December 31, 2013, when compared to the same period last year, was positively affected by:

  • Income tax benefit of $2.7 million recorded in the fourth quarter of 2013 related to positive developments in state income tax audits and settlements partially offset by a $1.5 million tax benefit recorded in the same period last year.

    Other items impacting earnings included lower deregulated Palo Verde Unit 3 revenues reflecting the 2013 fall refueling outage and lower allowance for funds used during construction ("AFUDC") due to a lower balance of construction work in progress subject to AFUDC in the current quarter as compared to the same period last year.

    Year to Date

    Income for the twelve months ended December 31, 2013, when compared to the same period last year, was negatively affected by:

  • Increased interest on long-term debt due to interest on $150 million of 3.30% senior notes issued in December 2012.
  • Decreased retail non-fuel base revenues primarily due to decreased revenues from sales to our commercial and industrial customers reflecting the reduction in our non-fuel base rates in Texas effective on May 1, 2012, and a decline in revenues from our public authority customers.
  • Increased operations and maintenance expense primarily due to increased outside services related to software systems support and improvements, consulting and legal services related to the analysis of our future involvement at the Four Corners Generating Station, and increased maintenance on our distribution plant. These increases were partially offset by a decrease in the provision for uncollectible customer accounts and decreased operations and maintenance expense at Palo Verde primarily due to reduced operations expense at Units 2 and 3.

    Income for the twelve months ended December 31, 2013, when compared to the same period last year, was positively affected by:

  • Income tax benefit of $2.7 million recorded in 2013 related to positive developments in state income tax audits and settlements partially offset by a $1.5 million tax benefit recorded in the same period last year.
  • Increased revenues from retail sales of deregulated Palo Verde Unit 3 power due to a 19.2% increase in power prices in 2013 partially offset by an 8.5% increase in the costs of nuclear fuel and a 3.8% decrease in generation.
  • Increased AFUDC due to higher balances of construction work in progress subject to AFUDC, largely due to construction of Rio Grande Unit 9 placed in service in May 2013.

    Retail Non-fuel Base Revenues

    Retail non-fuel base revenues decreased $2.5 million, pre-tax, or 2.2% in the fourth quarter of 2013 compared to the same period in 2012, reflecting milder weather in October 2013 at the end of the summer cooling season which impacted sales to residential, small commercial, and to a lesser extent public authority customers. Cooling degree days decreased 51% for the fourth quarter of 2013 compared to the same quarter last year, while heating degree days increased 26.8% for the fourth quarter of 2013 compared to the same quarter last year. Cooling degree days decreased by 50% in October 2013 as compared to October 2012 and were 27% below the 10-year average. The month of October is part of our summer cooling season in which we charge higher base rates to residential and small commercial customers. Fourth quarter 2013 sales to public authorities and small commercial and industrial customers were also negatively impacted by the federal government sequestration and shutdown in October. KWh sales to public authorities in the fourth quarter of 2013 decreased approximately 3.6% compared to the same quarter in 2012. KWh sales to small commercial and industrial customers in the fourth quarter of 2013 decreased 0.8% compared to the same quarter in 2012 despite a 1.6% increase in the average number of customers served. KWh sales decreased 2.1% from sales to large commercial and industrial customers and non-fuel base revenues decreased 4.8%. KWh sales to residential customers increased by 1.0% due to a 1.2% increase in the average number of residential customers served. Non-fuel base revenues and kWh sales are provided by customer class on page 10 of this release.

    For the twelve months ended December 31, 2013, retail non-fuel base revenues decreased $3.8 million, pre-tax, or 0.7% compared to the same period in 2012. The decrease in retail non-fuel base revenues was primarily due to decreased revenues from our commercial and industrial customers which reflect the impact of the reduction in non-fuel base rates for our Texas customers which became effective May 1, 2012. Non-fuel base revenues from sales to small commercial and industrial customers and large commercial and industrial customers decreased 1.8% and 4.3%, respectively. Retail non-fuel base revenues from sales to public authorities decreased 1.1%. While the kWh sales to public authorities increased by 0.3% in 2013 compared to 2012, revenues from this customer class reflect the impacts of recently installed solar photovoltaic generation at Fort Bliss and White Sands Missile Range. Additionally, 2013 revenues were negatively impacted by the federal government sequestration and shutdown in October 2013. KWh sales to small commercial and industrial customers decreased 0.7%. The decrease in retail non-fuel base revenues was partially offset by an increase of 1.1% in non-fuel base revenues from sales to residential customers reflecting a 1.2% increase in kWh sales to our residential customer class. The increase in kWh sales to our residential customers reflects a 1.3% increase in the average number of residential customers served. Weather significantly impacts our residential, small commercial, and to a lesser extent, our sales to public authorities. We experienced less favorable weather during our summer cooling season. Cooling degree days decreased 6.3% when compared to the same period last year but were higher than the 10-year average by 2.4%. Heating degree days increased 20.8% over last year and were 8.0% higher than the 10-year average. Non-fuel base revenues and kWh sales are provided by customer class on page 12 of this release.

    Capital and Liquidity

    We continue to maintain a strong capital structure to ensure access to capital markets at reasonable rates. At December 31, 2013, common stock equity represented 48.2% of our capitalization (common stock equity, long-term debt, and short-term borrowings under the revolving credit facility (the"RCF")). At December 31, 2013, we had a balance of $25.6 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 the RCF to meet all of our anticipated cash requirements for the next twelve months. We may also issue long-term debt in the capital markets to finance capital requirements in 2014.

    Cash flows from operations for the twelve months ended December 31, 2013 were $247.5 million compared to $273.1 million in the corresponding period in 2012. The primary factor affecting the decreased cash flow was an under-collection of fuel revenues in 2013 versus an over-recovery in the prior year. 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, 2013, the Company had a fuel under-recovery of $10.8 million compared to an over-recovery of fuel costs, net of refunds, of $11.7 million during the twelve months ended December 31, 2012. At December 31, 2013, we had a net fuel under-recovery balance of $6.2 million, including an under-recovery balance of $7.2 million in Texas and an over-recovery balance of $1.0 million in New Mexico. In October 2013, we implemented an increased fixed fuel factor in Texas which was based upon a formula that reflects projected prices for natural gas.

    During the twelve months ended December 31, 2013, 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 $237.4 million for the twelve months ended December 31, 2013 and $202.4 million for the twelve months ended December 31, 2012. Capital requirements for purchases of nuclear fuel were $30.5 million for the twelve months ended December 31, 2013 and $46.0 million for the twelve months ended December 31, 2012.

    On January 23, 2014, the Board of Directors declared a quarterly cash dividend of $0.265 per share payable on March 31, 2014 to shareholders of record on March 14, 2014. On December 30, 2013, we paid a quarterly cash dividend of $0.265 per share or $10.7 million to shareholders of record on December 13, 2013. We paid a total of $42.0 million in cash dividends during the twelve months ended December 31, 2013. We expect to continue paying quarterly dividends during 2014 and we expect to review the dividend policy in the second quarter of 2014.

    No shares of common stock were repurchased during the twelve months ended December 31, 2013. As of December 31, 2013, 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”). RGRT, the trust through which we finance our portion of nuclear fuel for Palo Verde, is consolidated in the Company's financial statements. On January 14, 2014, we entered into an amended agreement where we have available a $300 million RCF for a term ending January 14, 2019. 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 $124.4 million at December 31, 2013 of which $14.4 million had been borrowed under the RCF and $110 million was borrowed through senior notes. Borrowings by the RGRT for nuclear fuel were $132.2 million as of December 31, 2012, of which $22.2 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. No borrowings were outstanding at December 31, 2013 or December 31, 2012 under the RCF for working capital or general corporate purposes.

    2014 Earnings Guidance

    We are providing earnings guidance for 2014 within a range of $2.10 to $2.50 per basic share.

    Conference Call

    A conference call to discuss fourth quarter 2013 earnings is scheduled for 11:00 A.M. Eastern Time, on February 24, 2014. The dial-in number is 888-438-5519 with a conference ID number of 6936177. The international dial-in number is 719-325-2315. The conference leader will be Steven P. Busser, Vice President - Treasurer. A replay will run through March 10, 2014 with a dial-in number of 888-203-1112 and a conference ID number of 6936177. 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 Company
    Statements of Operations
    Quarter Ended December 31, 2013 and 2012
    (In thousands except for per share data)
    (Unaudited)
         
    20132012Variance
     
    Operating revenues, net of energy expenses:
    Base revenues $ 113,137 $ 115,768 $ (2,631 ) (a)
    Deregulated Palo Verde Unit 3 revenues 2,163 2,755 (592 )
    Other 7,148   7,388   (240 )
    Operating Revenues Net of Energy Expenses122,448125,911(3,463)
     
    Other operating expenses:
    Other operations and maintenance 53,915 49,971 3,944
    Palo Verde operations and maintenance 29,238 29,193 45
    Taxes other than income taxes 12,965 13,812 (847 )
    Other income 1,783   1,077   706  
    Earnings Before Interest, Taxes, Depreciation and Amortization28,11334,012(5,899) (b)
     
    Depreciation and amortization 20,280 19,227 1,053
    Interest on long-term debt 14,806 13,805 1,001
    AFUDC and capitalized interest 5,466 5,837 (371 )
    Other interest expense (25 ) 325   (350 )
    Income (Loss) Before Income Taxes(1,482)6,492(7,974)
     
    Income tax expense (benefit) (2,673 ) 1,673   (4,346 )
     
    Net Income$1,191   $4,819   $(3,628)
     
    Basic Earnings per Share$0.03   $0.12   $(0.09)
     
    Diluted Earnings per Share$0.03   $0.12   $(0.09)
     
    Dividends declared per share of common stock $ 0.265   $ 0.25   $ 0.015  
     
    Weighted average number of shares outstanding 40,135   40,016   119  
     
    Weighted average number of shares and dilutive
    potential shares outstanding 40,135   40,090   45  
     

    (a) Base revenues exclude fuel recovered through New Mexico base rates of $16.1 million and $16.3 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 Company
    Statements of Operations
    Twelve Months Ended December 31, 2013 and 2012
    (In thousands except for per share data)
    (Unaudited)
         
    20132012Variance
     
    Operating revenues, net of energy expenses:
    Base revenues $ 558,670 $ 562,600 $ (3,930 ) (a)
    Deregulated Palo Verde Unit 3 revenues 11,423 9,848 1,575
    Other 31,138   29,106   2,032  
    Operating Revenues Net of Energy Expenses601,231601,554(323)
     
    Other operating expenses:
    Other operations and maintenance 201,515 198,706 2,809
    Palo Verde operations and maintenance 96,708 98,191 (1,483 )
    Taxes other than income taxes 57,747 57,443 304
    Other income 4,307   4,677   (370 )
    Earnings Before Interest, Taxes, Depreciation and Amortization249,568251,891(2,323) (b)
     
    Depreciation and amortization 79,626 78,556 1,070
    Interest on long-term debt 58,635 54,632 4,003
    AFUDC and capitalized interest 21,362 20,312 1,050
    Other interest expense 431   1,190   (759 )
    Income Before Income Taxes132,238137,825(5,587)
     
    Income tax expense 43,655   46,979   (3,324 )
     
    Net Income$88,583   $90,846   $(2,263)
     
    Basic Earnings per Share$2.20   $2.27   $(0.07)
     
    Diluted Earnings per Share$2.20   $2.26   $(0.06)
     
    Dividends declared per share of common stock $ 1.045   $ 0.97   $ 0.075  
     
    Weighted average number of shares outstanding 40,115   39,974   141  
     
    Weighted average number of shares and dilutive
    potential shares outstanding 40,127   40,056   71  
     

    (a) Base revenues exclude fuel recovered through New Mexico base rates of $73.3 million and $74.2 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
    Cash Flow Summary
    Twelve Months Ended December 31, 2013 and 2012
    (In thousands and Unaudited)
       
    20132012
    Cash flows from operating activities:
    Net income $ 88,583 $ 90,846
    Adjustments to reconcile net income to net cash provided by operations:
    Depreciation and amortization of electric plant in service 79,626 78,556
    Amortization of nuclear fuel 42,537 42,953
    Deferred income taxes, net 44,678 43,561
    Other 5,623 4,818
    Change in:
    Net overcollection (undercollection) of fuel revenues (10,843 ) 11,668
    Accounts receivable (2,450 ) 13,448
    Accounts payable 8,180 1,725
    Other (8,459 ) (14,467 )
    Net cash provided by operating activities247,475   273,108  
     
    Cash flows from investing activities:
    Cash additions to utility property, plant and equipment (237,411 ) (202,387 )
    Cash additions to nuclear fuel (30,535 ) (46,009 )
    Decommissioning trust funds (9,343 ) (9,163 )
    Other (5,475 ) (8,495 )
    Net cash used for investing activities(282,764)(266,054)
     
    Cash flows from financing activities:
    Dividends paid (42,049 ) (38,889 )
    Borrowings under the revolving credit facility, net (7,803 ) (11,224 )
    Proceeds from issuance of long-term senior notes 149,682
    Other (324 ) (3,774 )
    Net cash provided by (used for) financing activities(50,176)95,795  
     
    Net increase (decrease) in cash and cash equivalents(85,465)102,849
     
    Cash and cash equivalents at beginning of period111,057   8,208  
     
    Cash and cash equivalents at end of period$25,592   $111,057  


     
    El Paso Electric Company
    Quarter Ended December 31, 2013 and 2012
    Sales and Revenues Statistics
       
    Increase (Decrease)
    20132012Amount   Percentage

    kWh sales (in thousands):

    Retail:
    Residential 540,826 535,277 5,549 1.0 %
    Commercial and industrial, small 535,818 540,078 (4,260 ) (0.8 )%
    Commercial and industrial, large 282,280 288,246 (5,966 ) (2.1 )%
    Public authorities 376,806   390,720   (13,914 ) (3.6 )%
    Total retail sales 1,735,730   1,754,321   (18,591 ) (1.1 )%
    Wholesale:
    Sales for resale 8,919 11,204 (2,285 ) (20.4 )%
    Off-system sales 580,761   647,572   (66,811 ) (10.3 )%
    Total wholesale sales 589,680   658,776   (69,096 ) (10.5 )%
    Total kWh sales 2,325,410   2,413,097   (87,687 ) (3.6 )%

    Operating revenues (in thousands):

    Non-fuel base revenues:
    Retail:
    Residential $ 46,409 $ 46,357 $ 52 0.1 %
    Commercial and industrial, small 37,805 38,718 (913 ) (2.4 )%
    Commercial and industrial, large 9,240 9,701 (461 ) (4.8 )%
    Public authorities 19,378   20,566   (1,188 ) (5.8 )%
    Total retail non-fuel base revenues 112,832 115,342 (2,510 ) (2.2 )%
    Wholesale:
    Sales for resale 305   426   (121 ) (28.4 )%
    Total non-fuel base revenues 113,137   115,768   (2,631 ) (2.3 )%
    Fuel revenues:
    Recovered from customers during the period 31,424 27,468 3,956 14.4 %
    Under collection of fuel 2,480 2,289 191 8.3 %
    New Mexico fuel in base rates 16,082   16,273   (191 ) (1.2 )%
    Total fuel revenues (a) 49,986   46,030   3,956   8.6 %
    Off-system sales:
    Fuel cost 16,862 16,869 (7 ) %
    Shared margins 2,762 2,326 436 18.7 %
    Retained margins 322   274   48   17.5 %
    Total off-system sales 19,946 19,469 477 2.5 %
    Other (b) 7,228   7,535   (307 ) (4.1 )%
    Total operating revenues $ 190,297   $ 188,802   $ 1,495   0.8 %
     

    (a) Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $2.2 million and $2.7 million, respectively.

     

    (b) Represents revenues with no related kWh sales.



     
    El Paso Electric Company
    Quarter Ended December 31, 2013 and 2012
    Other Statistical Data
           
    Increase (Decrease)
    20132012AmountPercentage
     

    Average number of retail customers: (a)

    Residential 349,494 345,325 4,169 1.2 %
    Commercial and industrial, small 39,232 38,633 599 1.6 %
    Commercial and industrial, large 50 51 (1 ) (2.0 )%
    Public authorities 5,046     4,920     126 2.6 %
    Total 393,822     388,929     4,893 1.3 %
     

    Number of retail customers (end of period): (a)

    Residential 349,629 345,567 4,062 1.2 %
    Commercial and industrial, small 39,164 38,494 670 1.7 %
    Commercial and industrial, large 50 50
    Public authorities 5,043     4,896     147 3.0 %
    Total 393,886     389,007     4,879 1.3 %
     

    Weather statistics: (b)

    10-Yr Average
    Heating degree days 1,007 794 954
    Cooling degree days 80 164 111
     

    Generation and purchased power (kWh, in thousands):

    Increase (Decrease)
    20132012AmountPercentage
     
    Palo Verde 1,044,033 1,146,910 (102,877 ) (9.0 )%
    Four Corners 149,173 174,553 (25,380 ) (14.5 )%
    Gas plants 840,477     706,916     133,561 18.9 %
    Total generation 2,033,683 2,028,379 5,304 0.3 %
    Purchased power:
    Photovoltaic 23,828 25,353 (1,525 ) (6.0 )%
    Other 380,720     471,347     (90,627 ) (19.2 )%
    Total purchased power 404,548     496,700     (92,152 ) (18.6 )%
    Total available energy 2,438,231 2,525,079 (86,848 ) (3.4 )%
    Line losses and Company use 112,821     111,982     839 0.7 %

    Total kWh sold

    2,325,410     2,413,097     (87,687 ) (3.6 )%
     

    Palo Verde capacity factor

    76.0

    %

    83.7

    %

    (7.7

    )%

     

    (a) The number of retail customers presented for both the current and prior periods are based on the number of service locations.  Previous presentations of the number of retail customers in 2012 were based on the number of bills rendered including consolidated bills for customers operating multiple facilities.  Management believes that the number of service locations provides a more accurate indicator of customers served than the number of bills rendered.

     

    (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 Company
    Twelve Months Ended December 31, 2013 and 2012
    Sales and Revenues Statistics
         
    Increase (Decrease)
    20132012AmountPercentage

    kWh sales (in thousands):

    Retail:
    Residential 2,679,262 2,648,348 30,914 1.2 %
    Commercial and industrial, small 2,349,148 2,366,541 (17,393 ) (0.7 )%
    Commercial and industrial, large 1,095,379 1,082,973 12,406 1.1 %
    Public authorities 1,622,607   1,617,606   5,001   0.3 %
    Total retail sales 7,746,396   7,715,468   30,928   0.4 %
    Wholesale:
    Sales for resale 61,232 64,266 (3,034 ) (4.7 )%
    Off-system sales 2,472,622   2,614,132   (141,510 ) (5.4 )%
    Total wholesale sales 2,533,854   2,678,398   (144,544 ) (5.4 )%
    Total kWh sales 10,280,250   10,393,866   (113,616 ) (1.1 )%

    Operating revenues (in thousands):

    Non-fuel base revenues:
    Retail:
    Residential $ 236,651 $ 234,095 $ 2,556 1.1 %
    Commercial and industrial, small 184,568 188,014 (3,446 ) (1.8 )%
    Commercial and industrial, large 40,235 42,041 (1,806 ) (4.3 )%
    Public authorities 95,044   96,132   (1,088 ) (1.1 )%
    Total retail non-fuel base revenues 556,498 560,282 (3,784 ) (0.7 )%
    Wholesale:
    Sales for resale 2,172   2,318   (146 ) (6.3 )%
    Total non-fuel base revenues 558,670   562,600   (3,930 ) (0.7 )%
     
    Fuel revenues:
    Recovered from customers during the period (a) 133,481 130,193 3,288 2.5 %
    Under (over) collection of fuel 10,849 (18,539 ) 29,388
    New Mexico fuel in base rates 73,295   74,154   (859 ) (1.2 )%
    Total fuel revenues (b) 217,625   185,808   31,817   17.1 %
     
    Off-system sales:
    Fuel cost 68,241 62,481 5,760 9.2 %
    Shared margins 13,016 9,191 3,825 41.6 %
    Retained margins 1,549   1,098   451   41.1 %
    Total off-system sales 82,806 72,770 10,036 13.8 %
    Other (c) 31,261   31,703   (442 ) (1.4 )%
    Total operating revenues $ 890,362   $ 852,881   $ 37,481   4.4 %
     
     

    (a) Excludes $6.9 million of refunds in 2012 related to prior periods Texas deferred fuel revenues.

     

    (b) Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $11.4 million and $9.8 million, respectively.

     

    (c) Represents revenues with no related kWh sales.



    El Paso Electric Company
    Twelve Months Ended December 31, 2013 and 2012
    Other Statistical Data
         
    Increase (Decrease)
    20132012Amount   Percentage
     

    Average number of retail customers: (a)

    Residential 347,891 343,409 4,482 1.3 %
    Commercial and industrial, small 38,836 38,601 235 0.6 %
    Commercial and industrial, large 50 50
    Public authorities 4,997   4,828   169   3.5 %
    Total 391,774   386,888   4,886   1.3 %
     

    Number of retail customers (end of period): (a)

    Residential 349,629 345,567 4,062 1.2 %
    Commercial and industrial, small 39,164 38,494 670 1.7 %
    Commercial and industrial, large 50 50
    Public authorities 5,043   4,896   147   3.0 %
    Total 393,886   389,007   4,879   1.3 %
     

    Weather statistics: (b)

    10-Yr Average
    Heating degree days 2,426 2,009 2,247
    Cooling degree days 2,695 2,876 2,633
     

    Generation and purchased power (kWh, in thousands):

    Increase (Decrease)
    20132012AmountPercentage
     
    Palo Verde 4,966,233 5,045,772 (79,539 ) (1.6 )%
    Four Corners 635,717 655,108 (19,391 ) (3.0 )%
    Gas plants 3,686,823   3,561,253   125,570   3.5 %

    Total generation

    9,288,773 9,262,133 26,640 0.3 %
    Purchased power:
    Photovoltaic 120,926 103,189 17,737 17.2 %
    Other 1,427,004   1,665,621   (238,617 ) (14.3 )%
    Total purchased power 1,547,930   1,768,810   (220,880 ) (12.5 )%
    Total available energy 10,836,703 11,030,943 (194,240 ) (1.8 )%
    Line losses and Company use 556,453   637,077   (80,624 ) (12.7 )%
    Total kWh sold 10,280,250   10,393,866   (113,616 ) (1.1 )%
     

    Palo Verde capacity factor

    91.1

    %

    92.3

    %

    (1.2

    )%

     

    (a) The number of retail customers presented for both the current and prior periods are based on the number of service locations.  Previous presentations of the number of retail customers in 2012 were based on the number of bills rendered including consolidated bills for customers operating multiple facilities.  Management believes that the number of service locations provides a more accurate indicator of customers served than the number of bills rendered.

     

    (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 Company
    Financial Statistics
    At December 31, 2013 and 2012
    (In thousands, except number of shares, book value per share, and ratios)
       

    Balance Sheet

    20132012
     
    Cash and cash equivalents $ 25,592   $ 111,057  
     
    Common stock equity $ 943,833 $ 824,999
    Long-term debt 999,620   999,535  
    Total capitalization $ 1,943,453   $ 1,824,534  
     
    Short-term borrowings under the revolving credit facility $ 14,352   $ 22,155  
     
    Number of shares - end of period 40,266,706   40,112,078  
     
    Book value per common share $ 23.44   $ 20.57  
     
    Common equity ratio (a) 48.2 % 44.7 %
    Debt ratio 51.8 % 55.3 %
     

    (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 Company

    Media Contacts

    Eddie Gutierrez, 915-543-5763

    eduardo.gutierrez@epelectric.com

    or

    El Paso Electric Investor Relations

    Steve Busser, 915-543-5983

    steve.busser@epelectric.com

    or

    Lisa Budtke, 915-543-5947

    lisa.budtke@epelectric.com


    Source: El Paso Electric Company


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