8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

February 22, 2012

El Paso Electric Company

(Exact name of registrant as specified in its charter)

Texas	001-14206	74-0607870
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
Stanton Tower, 100 North Stanton, El Paso, Texas		79901
(Address of principal executive offices)		(Zip Code)

(915) 543-5711

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 22, 2012, the Company announced its financial results for the quarter ended December 31,2011. A copy of the press release containing the announcement and a copy of the presentation at the Company's 4th Quarter 2011 Earnings Conference Call is included as Exhibit 99.01 and Exhibit 99.02 to this Current Report and is incorporated herein by reference. The Company does not intend for this exhibit to be incorporated by reference into future filings under the Securities Exchange Act of 1934.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

99.01Earnings Press Release, dated February 22, 2012

99.02    Presentation at the 4th Quarter 2011 Earnings Conference Call

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

EL PASO ELECTRIC COMPANY

By: /s/    DAVID G. CARPENTER

David G. Carpenter

Senior Vice President and

Chief Financial Officer

(Duly Authorized Officer and

Principal Financial Officer)

Dated: February 22, 2012

EX-99.01

Exhibit 99.01

NEWS RELEASE

For Immediate Release	Contact:	Investor
Date: February 22, 2012	Media	Relations:
	Teresa Souza	Steve Busser
	915/543-5823	915/543-5983
		Lisa Budtke
		915/543-5947

El Paso Electric Announces Fourth Quarter and Annual Financial Results

Overview

• For the fourth quarter of 2011, EE reported net income of $5.5 million, or $0.14 basic and $0.13 diluted earnings per share, respectively. In the fourth quarter of 2010, EE reported net income of $7.5 million, or $0.18 and $0.17 basic and diluted earnings per share, respectively.

• For the twelve months ended December 31, 2011, EE reported net income of $103.5 million, or $2.49 and $2.48 basic and diluted earnings per share, respectively. Net income for the twelve months ended December 31, 2010 was $100.6 million, or $2.32 and $2.31 basic and diluted earnings per share, respectively and income before extraordinary item for the same period was $90.3 million, or $2.08 and $2.07 basic and diluted earnings per share, respectively.

“We were pleased with our earnings for the twelve months ended December 31, 2011. Revenues from retail customers increased 6.3% primarily resulting from the hotter than normal summer weather our service territory experienced this year and the continued growth in the number of customers served,” said David W. Stevens, Chief Executive Officer. “Fourth quarter 2011 earnings declined relative to fourth quarter 2010 earnings largely as the result of increased maintenance at our local generating plants and a reduction of capitalized carrying charges due to placing Newman 5, Phase II in service earlier in the year.”

Page 1 of 14

El Paso Electric ŸP.O.Box 982 Ÿ El Paso, Texas 79960

Earnings Summary

The table and explanations below present the major factors affecting 2011 net income relative to 2010 income before the extraordinary item in 2010.

		Quarter Ended									Twelve Months Ended
		Pre-Tax Effect			After-Tax Income			Basic EPS			Pre-Tax Effect			After-Tax Income			Basic EPS
December 31, 2010					$	7,466		$	0.18					$	90,317		$	2.08
Changes in:
	Retail non-fuel base revenue	$	2,120		1,336			0.03			$	33,647		21,198			0.51
	Transmission revenues	354			223			−			5,075			3,197			0.08
	Operations and maintenance at fossil
	fuel generating plants	(3,652		)	(2,301		)	(0.06		)	(5,913		)	(3,725		)	(0.09		)
	AFUDC	(2,460		)	(2,087		)	(0.05		)	(4,478		)	(3,804		)	(0.09		)
	Customer care expense	(1,545		)	(973		)	(0.02		)	(3,284		)	(2,069		)	(0.05		)
	Transmission and distribution operations
	and maintenance expense	(416		)	(262		)	(0.01		)	(3,117		)	(1,964		)	(0.05		)
	Retained off-system sales margins	(158		)	(100		)	−			(6,247		)	(3,935		)	(0.10		)
	Elimination of Medicare Part D tax benefit	−			−			−			−			4,787			0.11
	Other				2,151			0.06						(463		)	(0.01		)
	Total changes				(2,013		)	(0.05		)				13,222			0.31
December 31, 2011					$	5,453		0.13						$	103,539		2.39
	Change in weighted average number of
	shares							0.01									0.10
December 31, 2011								$	0.14								$	2.49

Fourth Quarter 2011

Earnings for the quarter ended December 31, 2011 when compared to the same period last year were positively affected by:

• Increased retail non-fuel base revenues due to a 2.5% increase in kWh sales to retail customers reflecting increased sales primarily to our large commercial and industrial customers as compared to the same period in 2010 and 1.3% growth in the average number of retail customers served.

Earnings for the quarter ended December 31, 2011 when compared to the same period last year was negatively affected by:

• Increased planned maintenance outages at our local fossil fuel generating plants and freeze protection upgrades.

• Decreased allowance for funds used during construction (“AFUDC”) primarily due to lower balances of construction work in progress subject to AFUDC.

• Increased customer care expense primarily due to an increase in uncollectible customer accounts and increased costs for customer-related activities.

Page 2 of 14

El Paso Electric ŸP.O.Box 982 Ÿ El Paso, Texas 79960

Year to Date

Earnings for the twelve months ended December 31, 2011, when compared to the same period last year, were positively affected by:

• Increased retail non-fuel base revenues due to a 3.1% increase in kWh sales to retail customers reflecting hotter summer weather when we have higher non-fuel base summer rates and 1.4% growth in the average number of retail customers served in 2011 as compared to the same period in 2010. During the twelve months ended December 31, 2011, cooling degree days were 14% above the same period in 2010 and 30% above the 30-year average.

• Lower income taxes in 2011 due to a one-time charge to income tax expense in 2010 to recognize a change in tax law enacted in the Patient Protection and Affordable Care Act to eliminate the tax benefit related to the Medicare Part D subsidies.

• A decrease in the weighted average number of shares outstanding as a result of our common stock repurchase program resulting in an increase in basic earnings per share of $0.10.

• Increased transmission revenues primarily due to a settlement agreement with Tucson Electric Power Company resolving a transmission dispute that resulted in one-time income of $3.9 million, pre-tax and annual revenue of $1.1 million per year.

Earnings for the twelve months ended December 31, 2011, when compared to the same period last year were negatively affected by:

• Decreased off-system sales margins primarily due to lower average market prices for power and an increase in sharing of off-system sales margins with customers from 25% to 90% effective in July 2010.

• Decreased AFUDC primarily due to lower balances of construction work in progress subject to AFUDC.

• Increased maintenance at our local gas-fired generating plants largely as a result of weather-related damage during severe winter weather in February 2011 and freeze protection upgrades.

• Increased customer care expense primarily due to increased costs for customer-related activities, an increase in uncollectible customer accounts, and an increase in payroll costs.

• Increased transmission and distribution operations and maintenance expense primarily due to increased wheeling expense, a reliability study for the North American Electric Reliability Corporation, and an increase in payroll costs.

Retail Non-fuel Base Revenues

Retail non-fuel base revenues increased by $2.1 million, pre-tax, or 1.8% in the fourth quarter of 2011, compared to the same period in 2010 primarily due to: (i) a $0.8 million increase in revenues from large commercial and industrial customers reflecting a 6.8% increase in kWh sales; (ii) a $0.8 million increase in revenues from small commercial and industrial customers reflecting a 4.0% increase in the average number of customers served; (iii) a $0.5 million increase in revenues from residential customers reflecting a 1.1% growth in the average number of customers served. Revenues from other public authorities remained relatively unchanged in the fourth quarter of 2011 compared to the same period last year. Non-fuel base revenues and kilowatt-hour sales are provided by customer class on page 10 of the Release.

For the twelve months ended December 31, 2011, retail non-fuel base revenues increased by $33.6 million, pre-tax, or 6.3% compared to the same period in 2010 primarily due to a 3.1% increase in kWh sales to retail customers, reflecting hotter summer weather when we have higher non-fuel base summer rates, and 1.4% growth in the average number of retail customers served. During the twelve months ended December 31, 2011, cooling degree days were 14% above the same period in 2010 and 30% above the 30-year average. KWh sales

Page 3 of 14

El Paso Electric ŸP.O.Box 982 Ÿ El Paso, Texas 79960

to residential customers and small commercial and industrial customers increased 5.0% and 2.5%, respectively, during the twelve months ended December 31, 2011, compared to the same period last year. Sales to other public authorities increased due to increased sales to Fort Bliss at higher non-fuel base rates. Non-fuel base revenues and kilowatt-hour sales are provided by customer class on page 12 of the Release.

Off-system Sales

We make off-system sales in the wholesale power markets when competitively priced excess power is available from our generating plants and purchased power contracts. Off-system sales margins were negatively affected by lower costs of natural gas that impact the average market prices in the wholesale power markets. Off-system sales margins were also negatively impacted by power purchases required for system reliability during extremely cold weather in February 2011. The Company shared 25% of off-system sales margins with customers and retained 75% of off-system sales margins through June 30, 2010 pursuant to rate agreements in prior years. Effective July 1, 2010, we share 90% of off-system sales margins with customers and retain 10% of off-system sales margins. Retained margins from off-system sales decreased approximately $0.2 million and $6.2 million for the three and twelve months ended December 31, 2011, respectively, compared to the corresponding periods in 2010.

Palo Verde License Extension

On April 21, 2011, the Nuclear Regulatory Commission granted extensions in the operating licenses for all three units at Palo Verde. The operating licenses for Units 1, 2 and 3 will now expire in 2045, 2046, and 2047, respectively. For the second, third and fourth quarters of 2011 combined, the extension of the operating licenses reduced depreciation and amortization expense by approximately $8.2 million and reduced the accretion expense on the Palo Verde asset retirement obligation by approximately $3.1 million.

Rate Matters

We filed a request with the Public Utility Commission of Texas (the “PUCT”) (Docket No. 40094), the City of El Paso, and other Texas cities on February 1, 2012 for a $26.3 million increase in rates charged to customers in Texas. The rate filing was made in response to a resolution adopted by the El Paso City Council requiring us to show cause why our base rates for customers in El Paso city limits should not be reduced. The City of El Paso has until August 4, 2012 to make a determination regarding our base rates in the city. The rate filing used a historical test year ended September 30, 2011, adjusted for known and measurable items, and a return on equity of 10.6%. The filing at the PUCT also includes a request to reconcile $356.5 million of fuel expense for the period July 1, 2009 through September 30, 2011.

On November 15, 2011, the El Paso City Council adopted a resolution that established current rates as temporary rates for our customers residing within the city limits of El Paso. Temporary rates will be effective from November 15, 2011 until a final determination in the rate case is rendered by the PUCT.

While cities in Texas have jurisdiction over rates within their city limits, the PUCT has appellate authority over city rate decisions on a “de novo” basis. Therefore, the ultimate authority to set our Texas electric rates is vested in the PUCT. The Company cannot predict the outcome of this proceeding. If the rate case results in the implementation of lower rates, then the resulting lower rates would have a negative impact on our revenues, net income, and cash from operations.

Capital and Liquidity

We continue to maintain a strong capital structure to ensure access to capital markets at reasonable rates. At December 31, 2011, common stock equity represented 46.3% of our capitalization (common stock equity, long-

Page 4 of 14

El Paso Electric ŸP.O.Box 982 Ÿ El Paso, Texas 79960

term debt and the current maturities of long-term debt, and short-term borrowings under the revolving credit facility). At December 31, 2011, we had a balance of $8.2 million in cash and cash equivalents.

Cash flows from operations for the twelve months ended December 31, 2011 were $251.5 million compared to $239.4 million in the corresponding period in 2010. The increase in cash flows from operations reflects the increase in net income before a non-cash extraordinary gain in 2010. Cash flows were also impacted by an increase in deferred income taxes and an increase in accounts payable, offset by the timing of collection of fuel revenues to recover actual fuel expenses in 2011 compared to 2010. 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, 2011, the Company had an under-recovery of fuel costs, net of refunds, of $26.0 million as compared to an over-recovery, net of refunds, of $1.0 million during the twelve months ended December 31, 2010. At December 31, 2011, we had a net fuel under-recovery balance of $7.0 million, including an under-recovery balance of $9.1 million in Texas partially offset by an over-recovery balance of $2.1 million in New Mexico.

During the twelve months ended December 31, 2011, our primary capital requirements were for the construction and purchase of electric utility plant, the repurchase of common stock, purchases of nuclear fuel, and payment of common stock dividends. Capital requirements for new electric plant were $178.0 million for the twelve months ended December 31, 2011 and $170.0 million for the twelve months ended December 31, 2010.

On March 21, 2011, the Board of Directors authorized repurchases of up to 2.5 million additional shares of the Company's outstanding common stock (the “2011 Plan”). During the twelve months ended December 31, 2011, we repurchased 2,782,455 shares of common stock in the open market at an aggregate cost of $86.5 million, including 280,389 shares repurchased in the fourth quarter at an aggregate cost of $9.2 million as authorized under both our previously authorized plan and under the 2011 Plan. As of December 31, 2011, 393,816 shares remain available for repurchase under the 2011 Plan. The Company may repurchase shares in the open market from time to time.

We maintain a $200 million revolving credit facility for working capital and general corporate purposes and the financing of nuclear fuel through the Rio Grande Resources Trust (“RGRT”). RGRT is the trust through which we finance our portion of nuclear fuel for Palo Verde and is consolidated in the Company's financial statements. In November 2011, we refinanced and extended our $200 million revolving credit facility, which includes an option, subject to lenders' approval, to expand the size to $300 million. The amended facility reduces our borrowing costs and extends the maturity from September 2014 to September 2016. The total amount borrowed for nuclear fuel by RGRT was $123.4 million at December 31, 2011, of which $13.4 million had been borrowed under the revolving credit facility and $110 million was borrowed through senior notes. At December 31, 2010, the total amount borrowed for nuclear fuel by RGRT was $114.7 million of which $4.7 million was borrowed under the revolving credit facility and $110 million was borrowed through senior notes. Interest costs on borrowings to finance nuclear fuel are accumulated by RGRT and charged to us as fuel is consumed and recovered from customers through fuel recovery charges. At December 31, 2011, $20.0 million was outstanding under the revolving credit facility for working capital and general corporate purposes.

On December 30, 2011, we paid $8.8 million of quarterly dividends to shareholders. We have paid a total of $27.2 million in cash dividends during the twelve months ended December 31, 2011. On January 26, 2012, our Board of Directors declared a quarterly cash dividend of $0.22 per share payable on March 30, 2012 to shareholders of record on March 15, 2012. At the current payout rate, we would expect to pay total cash dividends of approximately $35.2 million during 2012. The Board of Directors plans to review the Company's dividend policy annually, in conjunction with the annual shareholders meeting held in the second quarter of each year. Our current expectation is that our payout ratio will trend upward from its current level, with a payout ratio of approximately 45% being the anticipated target for 2012.

Page 5 of 14

El Paso Electric ŸP.O.Box 982 Ÿ El Paso, Texas 79960

We believe we have adequate liquidity through our current cash balances, cash from operations, and our revolving credit facility to meet all of our anticipated cash requirements for the next twelve months. In addition, we anticipate issuing long-term debt in the capital markets to finance capital requirements in 2012. In October 2011, we received approval from the New Mexico Public Regulation Commission and the Federal Energy Regulatory Commission to incrementally issue up to $300 million of long-term debt as and when needed. Obtaining the ability to issue up to $300 million of new long-term debt, from time to time, provides us with the flexibility to access the debt capital markets when needed and when conditions are favorable.

2012 Earnings Guidance

We are providing earnings guidance for 2012 within a range of $2.15 to $2.55 per basic share excluding any impacts of the Texas rate case filed on February 1, 2012.

Conference Call

A conference call to discuss fourth quarter 2011 earnings is scheduled for 10:30 a.m. Eastern Time, February 22, 2012. The dial-in number is 800-598-5161 with a conference ID of 6676054. The conference leader will be Steven P. Busser, Vice President - Treasurer of EE. A replay will run through March 7, 2012 with a dial-in number of 888-203-1112 and a conference ID of 6676054. The conference call and presentation slides will be webcast live on EE'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)  our rates in Texas following the rate case filed on February 1, 2012 pursuant to the El Paso City Council's resolution ordering EE to show cause why our base rates for El Paso customers should not be lower; (ii) 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; (iii) recovery of capital investments and operating costs through rates in Texas and New Mexico; (iv) uncertainties and instability in the general economy and the resulting impact on EE's sales and profitability; (v) unanticipated increased costs associated with scheduled and unscheduled outages; (vi) the size of our construction program and our ability to complete construction on budget and on time; (vii) costs at Palo Verde; (viii) deregulation and competition in the electric utility industry; (ix) possible increased costs of compliance with environmental or other laws, regulations and policies; (x) possible income tax and interest payments as a result of audit adjustments proposed by the IRS; (xi) uncertainties and instability in the financial markets and the resulting impact on EE's ability to access the capital and credit markets; and (xii) 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.

Page 6 of 14

El Paso Electric ŸP.O.Box 982 Ÿ El Paso, Texas 79960

El Paso Electric Company and Subsidiary
Consolidated Statements of Operations
Quarter Ended December 31, 2011 and 2010
(In thousands except for per share data)
(Unaudited)
		2011		2010		Variance
Operating revenues, net of energy expenses:
	Base revenues	$	119,486	$	117,389	$	2,097		(a)
	Off-system sales margins, net of sharing	137		295		(158		)
	Deregulated Palo Verde Unit 3 revenues	3,176		2,863		313
	Other	7,935		5,819		2,116
Operating Revenues Net of Energy Expenses		130,734		126,366		4,368
Other operating expenses:
	Other operations and maintenance	52,094		47,458		4,636
	Palo Verde operations and maintenance	29,660		30,798		(1,138		)
Taxes other than income taxes		12,430		13,451		(1,021		)
Other income (deductions)		446		1,065		(619		)
Earnings Before Interest, Taxes, Depreciation and Amortization		36,996		35,724		1,272			(b)
Depreciation and amortization		20,556		20,875		(319		)
Interest on long-term debt		13,520		13,448		72
AFUDC and capitalized interest		4,044		6,396		(2,352		)
Other interest expense		212		141		71
Income Before Income Taxes		6,752		7,656		(904		)
Income tax expense		1,299		190		1,109
Net Income		$	5,453	$	7,466	$	(2,013	)
Basic Earnings per Share		$	0.14	$	0.18	$	(0.04	)
Diluted Earnings per Share		$	0.13	$	0.17	$	(0.04	)
Dividends declared per share of common stock		$	0.22	$	—	$	0.22
Weighted average number of shares outstanding		39,957		42,415		(2,458		)
Weighted average number of shares and dilutive
	potential shares outstanding	40,210		42,669		(2,459		)

(a) Base revenues exclude fuel recovered through New Mexico base rates of $16.3 million and $16.0 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.

Page 7 of 14

El Paso Electric Company and Subsidiary
Consolidated Statements of Operations
Twelve Months Ended December 31, 2011 and 2010
(In thousands except for per share data)
(Unaudited)
		2011			2010		Variance
Operating revenues, net of energy expenses:
	Base revenues	$	572,078		$	538,252	$	33,826		(a)
	Off-system sales margins, net of sharing	(560		)	5,687		(6,247		)
	Deregulated Palo Verde Unit 3 revenues	14,820			16,103		(1,283		)
	Other	33,019			25,464		7,555			(b)
Operating Revenues Net of Energy Expenses		619,357			585,506		33,851
Other operating expenses:
	Other operations and maintenance	192,155			180,522		11,633
	Palo Verde operations and maintenance	99,507			100,522		(1,015		)
Taxes other than income taxes		55,561			54,489		1,072
Other income (deductions)		3,362			3,477		(115		)
Earnings Before Interest, Taxes, Depreciation and Amortization		275,496			253,450		22,046			(c)
Depreciation and amortization		81,331			81,011		320
Interest on long-term debt		54,115			50,826		3,289
AFUDC and capitalized interest		18,186			19,974		(1,788		)
Other interest expense		989			254		735
Income Before Income Taxes and Extraordinary Item		157,247			141,333		15,914
Income tax expense		53,708			51,016		2,692			(d)
Income Before Extraordinary Item		103,539			90,317		13,222
Extraordinary gain related to Texas regulatory assets, net of income tax expense of $5,769		—			10,286		(10,286		)
Net Income		$	103,539		$	100,603	$	2,936
Basic Earnings per Share:
	Income before extraordinary item	$	2.49		$	2.08	$	0.41
	Extraordinary gain related to Texas regulatory assets, net of tax	—			0.24		(0.24		)
	Net Income	$	2.49		$	2.32	$	0.17
Diluted Earnings per Share:
	Income before extraordinary item	$	2.48		$	2.07	$	0.41
	Extraordinary gain related to Texas regulatory assets, net of tax	—			0.24		(0.24		)
	Net Income	$	2.48		$	2.31	$	0.17
Dividends declared per share of common stock		$	0.66		$	—	$	0.66
Weighted average number of shares outstanding		41,350			43,130		(1,780		)
Weighted average number of shares and dilutive
	potential shares outstanding	41,587			43,294		(1,707		)

(a) Base revenues exclude fuel recovered through New Mexico base rates of $73.5 million and $71.9 million, respectively.

(b) 2011 includes a one-time $3.9 million settlement of a transmission dispute with Tucson Electric Power Company.

(c) 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.

(d) Income tax expense for the twelve months ended December 31, 2010 includes a charge of $4.8 million related to the Patient

Protection and Affordable Care Act which eliminated the tax benefit associated with the Medicare Part D subsidies beginning

in 2013.

Page 8 of 14

El Paso Electric Company and Subsidiary
Cash Flow Summary
Twelve Months Ended December 31, 2011 and 2010
(In thousands and Unaudited)
				2011			2010
Cash flows from operating activities:
	Net income			$	103,539		$	100,603
	Adjustments to reconcile net income to net cash provided by operations:
		Depreciation and amortization of electric plant in service		81,331			81,011
		Extraordinary gain on Texas regulatory assets, net of tax		—			(10,286		)
		Deferred income taxes, net		45,688			27,456
		Other		49,768			36,359
	Change in working capital items:
		Net recovery (deferral) of fuel revenues		(26,001		)	958
		Accounts receivable		(4,663		)	(1,303		)
		Accounts payable		4,401			(9,634		)
		Other		(2,546		)	14,186
			Net cash provided by operating activities	251,517			239,350
Cash flows from investing activities:
	Cash additions to utility property, plant and equipment			(178,041		)	(169,966		)
	Cash additions to nuclear fuel			(39,551		)	(34,277		)
	Decommissioning trust funds			(12,515		)	(11,536		)
	Other			(7,298		)	(8,872		)
			Net cash used for investing activities	(237,405		)	(224,651		)
Cash flows from financing activities:
	Repurchase of common stock			(86,508		)	(33,726		)
	Dividends paid			(27,223		)	—
	Borrowings under the revolving credit facility			28,675			(102,294		)
	Proceeds from issuance of long-term private placement notes			—			110,000
	Other			(32		)	(1,285		)
			Net cash used for financing activities	(85,088		)	(27,305		)
Net decrease in cash and cash equivalents				(70,976		)	(12,606		)
Cash and cash equivalents at beginning of period				79,184			91,790
Cash and cash equivalents at end of period				$	8,208		$	79,184

Page 9 of 14

El Paso Electric Company and Subsidiary Quarter Ended December 31, 2011 and 2010 Sales and Revenues Statistics
							Increase (Decrease)
	2011			2010			Amount			Percentage
MWh sales:
Retail:
Residential	555,143			550,164			4,979			0.9	%
Commercial and industrial, small	536,137			533,313			2,824			0.5	%
Commercial and industrial, large	278,491			260,860			17,631			6.8	%
Sales to public authorities	378,968			362,167			16,801			4.6	%
Total retail sales	1,748,739			1,706,504			42,235			2.5	%
Wholesale:
Sales for resale	10,611			10,103			508			5.0	%
Off-system sales	524,838			658,966			(134,128		)	(20.4	)%
Total wholesale sales	535,449			669,069			(133,620		)	(20.0	)%
Total MWh sales	2,284,188			2,375,573			(91,385		)	(3.8	)%
Operating revenues (in thousands):
Non-fuel base revenues:
Retail:
Residential	$	47,710		$	47,216		$	494		1.0	%
Commercial and industrial, small	40,890			40,096			794			2.0	%
Commercial and industrial, large	10,704			9,897			807			8.2	%
Sales to public authorities	19,782			19,757			25			0.1	%
Total retail non-fuel base revenues	119,086			116,966			2,120			1.8	%
Wholesale:
Sales for resale	400			423			(23		)	(5.4	)%
Total non-fuel base revenues	119,486			117,389			2,097			1.8	%
Fuel revenues (a):
Recovered from customers during the period (b)	35,959			34,707			1,252			3.6	%
Under (over) collection of fuel	(3,607		)	(13,613		)	10,006			(73.5	)%
New Mexico fuel in base rates	16,303			15,982			321			2.0	%
Total fuel revenues	48,655			37,076			11,579			31.2	%
Off-system sales:
Fuel cost	13,959			17,874			(3,915		)	(21.9	)%
Shared margins	1,161			2,514			(1,353		)	(53.8	)%
Retained margins	137			295			(158		)	(53.6	)%
Total off-system sales	15,257			20,683			(5,426		)	(26.2	)%
Other	8,265			6,196			2,069			33.4	%
Total operating revenues	$	191,663		$	181,344		$	10,319		5.7	%
Average number of retail customers:
Residential	337,498			333,844			3,654			1.1	%
Commercial and industrial, small	38,154			36,704			1,450			4.0	%
Commercial and industrial, large	50			49			1			2.0	%
Sales to public authorities	4,477			4,720			(243		)	(5.1	)%
Total	380,179			375,317			4,862			1.3	%

El Paso Electric Company and Subsidiary Quarter Ended December 31, 2011 and 2010 Sales and Revenues Statistics (continued)
			Increase (Decrease)
	2011	2010	Amount		Percentage
Number of retail customers (end of period):
Residential	337,659	334,729	2,930		0.9	%
Commercial and industrial, small	37,942	37,202	740		2.0	%
Commercial and industrial, large	49	50	(1	)	(2.0	)%
Sales to public authorities	4,596	4,841	(245	)	(5.1	)%
Total	380,246	376,822	3,424		0.9	%
Weather statistics			30 Yr Average
Heating degree days	1,097	795	1,049
Cooling degree days	138	131	93

(a) Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $3.2 million and $2.9 million, respectively.

(b) Excludes $11.5 million refund in 2010 related to prior periods Texas deferred fuel revenues.

Page 10 of 14

El Paso Electric Company and Subsidiary
Quarter Ended December 31, 2011 and 2010
Generation and Purchased Power Statistics
					Increase (Decrease)
	2011		2010		Amount		Percentage
Generation and purchased power (MWh):
Palo Verde	1,107,404		1,177,149		(69,745	)	(5.9	)%
Four Corners	161,325		188,904		(27,579	)	(14.6	)%
Gas plants	682,962		613,654		69,308		11.3	%
Total generation	1,951,691		1,979,707		(28,016	)	(1.4	)%
Purchased power	435,515		496,248		(60,733	)	(12.2	)%
Total available energy	2,387,206		2,475,955		(88,749	)	(3.6	)%
Line losses and Company use	103,018		100,382		2,636		2.6	%
Total MWh sold	2,284,188		2,375,573		(91,385	)	(3.8	)%
Palo Verde capacity factor	80.6	%	85.8	%	(5.2	)%
Four Corners capacity factor	71.7	%	83.3	%	(11.6	)%

Page 11 of 14

El Paso Electric Company and Subsidiary Twelve Months Ended December 31, 2011 and 2010 Sales and Revenues Statistics
							Increase (Decrease)
	2011			2010			Amount			Percentage
MWh sales:
Retail:
Residential	2,633,390			2,508,834			124,556			5.0	%
Commercial and industrial, small	2,352,218			2,295,537			56,681			2.5	%
Commercial and industrial, large	1,096,040			1,087,413			8,627			0.8	%
Sales to public authorities	1,579,565			1,542,389			37,176			2.4	%
Total retail sales	7,661,213			7,434,173			227,040			3.1	%
Wholesale:
Sales for resale	62,656			53,637			9,019			16.8	%
Off-system sales	2,687,631			2,822,732			(135,101		)	(4.8	)%
Total wholesale sales	2,750,287			2,876,369			(126,082		)	(4.4	)%
Total MWh sales	10,411,500			10,310,542			100,958			1.0	%
Operating revenues (in thousands):
Non-fuel base revenues:
Retail:
Residential	$	234,086		$	217,615		$	16,471		7.6	%
Commercial and industrial, small	196,093			188,390			7,703			4.1	%
Commercial and industrial, large	45,407			43,844			1,563			3.6	%
Sales to public authorities	94,370			86,460			7,910			9.1	%
Total retail non-fuel base revenues	569,956			536,309			33,647			6.3	%
Wholesale:
Sales for resale	2,122			1,943			179			9.2	%
Total non-fuel base revenues	572,078			538,252			33,826			6.3	%
Fuel revenues: (a)
Recovered from customers during the period (b)	145,130			170,588			(25,458		)	(14.9	)%
Under (over) collection of fuel	13,917			(35,408		)	49,325			—
New Mexico fuel in base rates	73,454			71,876			1,578			2.2	%
Total fuel revenues	232,501			207,056			25,445			12.3	%
Off-system sales:
Fuel cost	74,736			93,516			(18,780		)	(20.1	)%
Shared margins	3,883			6,114			(2,231		)	(36.5	)%
Retained margins	(560		)	5,687			(6,247		)	—
Total off-system sales	78,059			105,317			(27,258		)	(25.9	)%
Other (c)	35,375			26,626			8,749			32.9	%
Total operating revenues	$	918,013		$	877,251		$	40,762		4.6	%
Average number of retail customers:
Residential	336,219			331,869			4,350			1.3	%
Commercial and industrial, small	37,652			36,536			1,116			3.1	%
Commercial and industrial, large	50			49			1			2.0	%
Sales to public authorities	4,626			4,701			(75		)	(1.6	)%
Total	378,547			373,155			5,392			1.4	%

El Paso Electric Company and Subsidiary Twelve Months Ended December 31, 2011 and 2010 Sales and Revenues Statistics (continued)
			Increase (Decrease)
	2011	2010	Amount		Percentage
Number of retail customers (end of period):
Residential	337,659	334,729	2,930		0.9	%
Commercial and industrial, small	37,942	37,202	740		2.0	%
Commercial and industrial, large	49	50	(1	)	(2.0	)%
Sales to public authorities	4,596	4,841	(245	)	(5.1	)%
Total	380,246	376,822	3,424		0.9	%
Weather statistics			30 Yr Average
Heating degree days	2,402	2,273	2,426
Cooling degree days	3,135	2,738	2,410

(a) Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $14.8 million and $16.1 million, respectively.

(b) Excludes $12.0 million and $34.8 million of refunds in 2011 and 2010, respectively, related to prior periods Texas deferred fuel revenues.

(c) 2011 includes a one-time $3.9 million settlement of a transmission dispute with Tucson Electric Power Company.

Page 12 of 14

El Paso Electric Company and Subsidiary
Twelve Months Ended December 31, 2011 and 2010
Generation and Purchased Power Statistics
					Increase (Decrease)
	2011		2010		Amount		Percentage
Generation and purchased power (MWh):
Palo Verde	4,942,055		4,925,313		16,742		0.3	%
Four Corners	647,932		650,236		(2,304	)	(0.4	)%
Gas plants (a)	3,346,789		2,890,110		456,679		15.8	%
Total generation	8,936,776		8,465,659		471,117		5.6	%
Purchased power	2,112,596		2,420,869		(308,273	)	(12.7	)%
Total available energy	11,049,372		10,886,528		162,844		1.5	%
Line losses and Company use	637,872		575,986		61,886		10.7	%
Total MWh sold	10,411,500		10,310,542		100,958		1.0	%
Palo Verde capacity factor	90.7	%	90.4	%	0.3	%
Four Corners capacity factor	75.6	%	72.1	%	3.5	%

(a) 2011 includes 193,460 MWhs for pre-commercial testing of Newman Unit 5 Phase II.

Page 13 of 14

El Paso Electric Company and Subsidiary
Financial Statistics
At December 31, 2011 and 2010
(In thousands, except number of shares, book value per share, and ratios)
Balance Sheet		2011			2010
Cash and cash equivalents		$	8,208		$	79,184
Common stock equity		$	760,251		$	810,375
Long-term debt		816,497			849,745
	Total capitalization	$	1,576,748		$	1,660,120
Current maturities of long-term debt		$	33,300		$	—
Short-term borrowings under the revolving credit facility		$	33,379		$	4,704
Number of shares - end of period		39,959,154			42,571,065
Book value per common share		$	19.03		$	19.04
Common equity ratio		46.3		%	48.7		%
Debt ratio		53.7		%	51.3		%

Page 14 of 14

EX-99.02

El Paso Electric Company 4th Quarter 2011 Earnings Conference Call February 22, 2012 Exhibit 99.02

El Paso Electric R February 22, 2012 Investor Relations 2 Statements in this presentation, other than statements of historical information, are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “act”). Such statements are intended to be made as of the date of this presentation, and the company does not undertake to update any such forward-looking statement. Forward-looking statements involve known and unknown risks and other factors that may cause actual results to differ materially from those expressed in this presentation. In connection with the safe-harbor provisions of the act, the company has set forth below a number of important risks and factors that could cause actual results to differ materially from forward-looking information. Factors that could cause or contribute to such differences include, but are not limited to:  Our rates in Texas following the rate case filed on February 1, 2012 pursuant to the El Paso City Council’s resolution ordering El Paso Electric (EE) to show cause why our base rates for El Paso customers should not be lower  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  Recovery of capital investments and operating costs through rates in Texas and New Mexico  Uncertainties and instability in the general economy and the resulting impact on EE’s sales and profitability  Unanticipated increased costs associated with scheduled and unscheduled outages  The size of our construction program and our ability to complete construction on budget and on time  Costs at Palo Verde (PV)  Deregulation and competition in the electric utility industry  Possible increased costs of compliance with environmental or other laws, regulations and policies  Possible income tax and interest payments as a result of audit adjustments proposed by the IRS  Uncertainties and instability in the financial markets and the resulting impact on EE’s ability to access the capital and credit markets  Other factors detailed by EE in its public filings with the Securities and Exchange Commission. Please refer to EE’s 2010 Form 10K and other 1934 Act Filings Safe Harbor Statement

El Paso Electric R  On March 2, 2012 David Stevens will resign his position as CEO of El Paso Electric in order to pursue another job opportunity  Board of Directors appointed Thomas V. Shockley to assume the responsibilities of the CEO on an interim basis – Thomas V. Shockley • EE Director since May 26, 2010 • Former Vice Chairman and COO of AEP • Former President and COO of CSW, which is now part of AEP • Several executive and management positions in the utility and energy industries  Search for successor will consider both internal and external candidates CEO Transition Update February 22, 2012 Investor Relations 3

El Paso Electric R February 22, 2012 Investor Relations 4  Solid 4th Quarter results due to a 2.5 percent increase in retail kWh sales  Repurchased approximately 280,389 shares at a total cost of $9.2mm during the 4th quarter of 2011  4th quarter dividend of $0.22 per share or $8.8mm Highlights for the 4th Quarter 2011

El Paso Electric R  Financial and Regulatory – Earnings per share (Basic) increased from $2.08 in 2010 (before extraordinary gain) to $2.49 in 2011 – Paid first common stock dividend since 1989 – Repurchased 2,782,455 shares of common stock for $86.5mm which enhanced shareholder value and balanced the Company’s capital structure – Refinanced the revolving credit facility, extending the term and lowering interest costs – Settled a long-standing dispute with Tucson Electric Power over transmission rights on EE’s transmission system – Obtained all necessary regulatory approvals to construct Rio Grande Unit 9  Operational – Completed construction and began commercial operation of the steam generator completing the Combined Cycle Newman Power Plant Unit 5 2011 Accomplishments February 22, 2012 Investor Relations 5

El Paso Electric R February 22, 2012 Investor Relations 6  4th Quarter 2011 (Basic) EPS - $0.14, compared to 4th Quarter 2010 (Basic) EPS of $0.18  YTD 2011 (Basic) EPS - $2.49, compared to YTD 2010 (Basic) EPS of $2.08, before extraordinary item 4th Quarter and YTD 2011 Financial Results

El Paso Electric R  Primary positive drivers: – Increase in retail non-fuel base revenues due to a 2.5% increase in kWh sales and 1.3% growth in the average number of retail customers served - $0.03/share  Primary negative drivers: – Increased planned maintenance outages and freeze protection upgrades at our local generating plants – ($0.06)/share – Decreased AFUDC primarily due to lower balances of construction work in progress subject to AFUDC – ($0.05)/share – Increased customer care expenses due to an increase in uncollectible customer accounts and costs for customer related activities – ($0.02)/share 4th Quarter Key Earnings Drivers February 22, 2012 Investor Relations 7

El Paso Electric R  Primary positive earnings drivers (net of tax): – Higher retail non-fuel base revenues due to a 3.1% increase in kWh sales to retail customers reflecting higher non-fuel summer base rates and a 1.4% increase in the average number of retail customers served – $0.51/share – Decreased income tax expense due to no comparable activity in 2011 relating to the one-time charge to income tax expense in 2010 recognizing the elimination Medicare Part D tax benefits – $0.11/share – Decreased weighted average number of shares outstanding resulting from the common stock repurchase program – $0.10/share – Increased transmission revenue $5.1mm (pre-tax) due to the settlement agreement with Tucson Electric Power that resulted in one-time income of $3.9 million (pre-tax) – $0.08/share YTD Key Earnings Drivers February 22, 2012 Investor Relations 8

El Paso Electric R  Negative earnings drivers (net of tax): – Decreased retained margins on off-system sales due to lower average market prices and increased margin sharing with customers – ($0.10)/share – Decreased AFUDC primarily due to lower balances of CWIP subject to AFUDC – ($0.09)/share – Increased maintenance expense due to weather-related damage and freeze protection upgrades at our local generating plants – ($0.09)/share – Increased customer care expenses due to increased costs for customer- related activities and an increase in uncollectible customer accounts – ($0.05)/share – Increased transmission and distribution O&M expense due to higher wheeling expense, a reliability study for the NERC, and payroll costs – ($0.05)/share YTD Key Earnings Drivers February 22, 2012 Investor Relations 9

El Paso Electric R February 22, 2012 Investor Relations 10 % Change in Retail Non-Fuel Base Revenues and MWh Sales % Change in Retail Non-Fuel Base Revenues and MWh Sales Residential Q4 C&I Small Q4 C&I Large Q4 0.9% 0.5% 6.8% 4.6% 5.0% 2.5% 0.8% 2.4% 1.0% 2.0% 8.2% 0.1% 7.6% 4.1% 3.6% 9.1% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Residential Q4 C&I Small Q4 C&I Large Q4 OPA Q4 Residential YTD C&I Small YTD C&I Large YTD OPA YTD Year-to-Date MWh Revenues 4th Quarter

El Paso Electric R Summary of 2012 Texas Rate Case February 22, 2012 Investor Relations 11  On October 4, 2011, El Paso City Council adopted a resolution requiring EE to show cause why base rates for customers in El Paso should not be reduced  On February 1, 2012, EE filed a rate case with Public Utility Commission of Texas (PUCT), the City of El Paso (City), and other incorporated cities in Texas – Historical test year ended September 30, 2011 (adjusted for known and measurable items) – Return on equity of 10.6% with 53.4% equity  Requested non-fuel base rate increase of $26.3mm – Base rate, interruptible and other revenue increases - $17.6mm – Requesting surcharge of $8.7mm over 12 months for rate case expenses

El Paso Electric R  On November 15, 2011, the El Paso City Council adopted a resolution which established current rates as temporary rates for customers of EE residing within the city limits of El Paso – Temporary rates will be effective from November 15, 2011 until a final determination in the rate case is rendered by the PUCT – Once rates are finalized at the conclusion of the rate proceeding, the PUCT or City : • Shall authorize EE to surcharge bills for the amounts under collected • May order a refund to customers for the amounts over collected • Based upon EE’s proposed rate changes, some customer classes would see refunds and some surcharges Temporary Rates February 22, 2012 Investor Relations 12

El Paso Electric R February 22, 2012 Investor Relations 13  2012 Earnings Guidance range of $2.15 to $2.55 per basic share (excludes impact of 2012 Texas Rate Case)  Key variables: – Base revenue growth of (0.5%) to 1.5% – Increase between 1.0% to 2.0% in total O&M over 2011 amounts – Expected capital expenditures of approximately $242mm 2012 Earnings Guidance

El Paso Electric R Cash Capital Expenditures February 22, 2012 Investor Relations 14 • Primary additions to rate base through 2016 include: – New Generating Plant Additions – Completion of Rio Grande 9 – Four additional LMS 100 units to come on line before end of 2016 – Initial construction of two CCGT’s to come on line in 2018 & 2019 – T&D construction necessary to meet customer growth – Capex at Palo Verde • Construction work in progress of $167mm at December 31, 2011; 2011 expenditures totaled $178mm • Capital expenditures are expected to average approximately $278mm annually through 2016 $0 $50 $100 $150 $200 $250 $300 $350 $400 2012 Est 2013 Est 2014 Est 2015 Est 2016 Est EE Estimated Costs Production Transmission Distribution General $242 $232 $267 $337 $311 (1) Does not include acquisition costs for nuclear fuel. (2) Includes $700 million for new generating capacity including $38 million to complete Rio Grande Unit 9, $186 million to construct two 87 MW gas-fired LMS-100 units that are scheduled to come on line in 2014 and 2015, $174 million for two 87 MW gas-fired LMS- 100 units scheduled to come on line in 2016, $284 million of initial expenditures for two additional 292 MW combined cycle generating units that are anticipated to come on line in 2018 and 2019 and $18 million for anticipated renewable projects to be built in El Paso.

El Paso Electric R February 22, 2012 Investor Relations 15  EE expended $178mm for additions to plant during 2011  EE dividend payments were $27.2mm in 2011 – EE is committed to enhancing long term value and cash returns to shareholders primarily through quarterly cash dividend payments and secondarily through share repurchases – Board will review the dividend policy annually in conjunction with the annual shareholders meeting • Anticipate moving toward a target 45% dividend payout ratio  EE had a cash balance of $8.2mm at December 31, 2011  At December 31, 2011, EE had liquidity of $174.4mm including cash and the revolving credit facility Capital Requirements and Liquidity

February 22, 2012 Investor Relations 16 Questions and Answers