Exhibit 99.01
 | |||
www.epelectric.com | |||
News Release | ||
For Immediate Release | ||
Date: August 5, 2015 | ||
El Paso Electric Announces Second Quarter Financial Results
Overview
• | For the second quarter of 2015, El Paso Electric Company ("EE" or the "Company") reported net income of $21.1 million, or $0.52 basic and diluted earnings per share. In the second quarter of 2014, EE reported net income of $30.1 million, or $0.75 basic and diluted earnings per share. |
• | For the six months ended June 30, 2015, EE reported net income of $24.5 million, or $0.61 basic and diluted earnings per share. Net income for the six months ended June 30, 2014 was $34.7 million, or $0.86 basic and diluted earnings per share. |
“Despite the mild weather we experienced in the second quarter, we are pleased to announce that we reached a new native system peak of 1,787 megawatts on June 22, 2015. This represents a 1.2% increase over our previous peak of 1,766 megawatts experienced in 2014 and is consistent with our continued growth in the average number of total customers served of 1.4% in 2015," said Tom Shockley, Chief Executive Officer. "As anticipated, regulatory lag has adversely impacted earnings due to the Montana Power Station Units 1 and 2 and other assets being placed into service in the first quarter. Our operating expenses increased without corresponding increases in our rates. As we previously commented, we filed for an increase in base rates for our New Mexico service territory on May 11, 2015. We also plan to file for a base rate increase in our Texas territory in early August 2015; and we expect new rates to become effective early in the second quarter of 2016 in both jurisdictions.”
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El Paso Electric Ÿ P.O.Box 982 Ÿ El Paso, Texas 79960 | ||
Earnings Summary
The table and explanations below present the major factors affecting 2015 net income relative to 2014 net income:
Quarter Ended | Six Months Ended | |||||||||||||||||||||||
Pre-Tax Effect | After-Tax Net Income | Basic EPS | Pre-Tax Effect | After-Tax Net Income | Basic EPS | |||||||||||||||||||
June 30, 2014 | $ | 30,096 | $ | 0.75 | $ | 34,711 | $ | 0.86 | ||||||||||||||||
Changes in: | ||||||||||||||||||||||||
O&M at fossil-fuel generating plants | $ | (4,171 | ) | (2,711 | ) | (0.07 | ) | $ | (4,280 | ) | (2,782 | ) | (0.07 | ) | ||||||||||
Allowance for funds used during construction | (1,769 | ) | (1,567 | ) | (0.04 | ) | 537 | 411 | 0.01 | |||||||||||||||
Palo Verde performance rewards, net | (2,143 | ) | (1,415 | ) | (0.04 | ) | (2,143 | ) | (1,415 | ) | (0.04 | ) | ||||||||||||
Depreciation and amortization | (2,052 | ) | (1,333 | ) | (0.03 | ) | (3,049 | ) | (1,981 | ) | (0.05 | ) | ||||||||||||
Retail non-fuel base revenues | (1,899 | ) | (1,234 | ) | (0.03 | ) | (1,181 | ) | (768 | ) | (0.02 | ) | ||||||||||||
Interest on long-term debt | (1,888 | ) | (1,227 | ) | (0.03 | ) | (3,792 | ) | (2,465 | ) | (0.06 | ) | ||||||||||||
Deregulated Palo Verde Unit 3 | (1,672 | ) | (1,086 | ) | (0.03 | ) | (2,953 | ) | (1,919 | ) | (0.05 | ) | ||||||||||||
Palo Verde operation and maintenance | 2,358 | 1,533 | 0.04 | 1,866 | 1,212 | 0.03 | ||||||||||||||||||
Other | 16 | — | (474 | ) | — | |||||||||||||||||||
June 30, 2015 | $ | 21,072 | $ | 0.52 | $ | 24,530 | $ | 0.61 | ||||||||||||||||
Regulatory Lag
The completion of Montana Power Station ("MPS") Units 1 & 2 (including common plant, transmission lines and substation) and the Eastside Operations Center ("EOC") are having a negative impact on the Company's 2015 financial results relative to 2014 due to regulatory lag associated with the placement in service of these assets without a corresponding increase in revenues. The primary impact from these assets being placed in service include a reduction in amounts capitalized for allowance for funds used during construction ("AFUDC"), and increases in depreciation, operation and maintenance expense, property taxes and interest cost.
Second Quarter 2015
Income for the quarter ended June 30, 2015, when compared to the same period last year, was negatively affected by:
• | Increased operation and maintenance expense related to our fossil-fuel generating plants, primarily due to an increased level of maintenance activity at the Newman and Four Corners plants; and operation and maintenance expense at MPS in 2015, with no comparable expense during the same period last year. |
• | Decreased AFUDC due to lower balances of construction work in progress (“CWIP”), primarily due to MPS Units 1 & 2, and the EOC being placed in service during the first quarter of 2015. |
• | Recognition of Palo Verde performance rewards associated with the 2009 to 2012 performance periods, net of disallowed fuel and purchased power costs related to the resolution of the Texas fuel reconciliation proceeding designated as PUCT Docket No. 41852 recorded in June 2014 with no comparable amount in the current period. |
• | Increased depreciation and amortization related to an increase in depreciable plant, primarily due to MPS Units 1 & 2, and the EOC being placed in service during the first quarter of 2015. |
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El Paso Electric Ÿ P.O.Box 982 Ÿ El Paso, Texas 79960 | ||
• | Decreased retail non-fuel base revenues, primarily due to (i) decreased revenues from sales to public authorities due to a 3.5% decrease in kWh sales and a military installation moving a portion of their load to an interruptible rate, and (ii) decreased revenues from our residential customers reflecting lower per customer energy usage primarily due to milder weather during the quarter compared to the same period in 2014, partially offset by a 1.3% increase in the average number of residential customers. |
• | Increased interest on long-term debt due to the interest accrued on the $150 million senior notes issued in December 2014. |
• | Decreased deregulated Palo Verde Unit 3 revenues, primarily due to a 13.3% decrease in proxy market prices reflecting a decline in the price of natural gas and a 36.9% decrease in generation due in part to a Unit 3 planned 2015 spring refueling outage that was completed in May 2015 with no comparable outage in 2014. |
Income for the quarter ended June 30, 2015, when compared to the same period last year, was positively affected by decreased Palo Verde operation and maintenance expense in the second quarter of 2015.
Year to Date
Income for the six months ended June 30, 2015, when compared to the same period last year, was negatively affected by:
• | Increased operation and maintenance expense related to our fossil-fuel generating plants, primarily due to an increased level of maintenance activity at the Newman and Four Corners plants; and operation and maintenance expense at MPS in 2015, with no comparable expense during the same period last year. |
• | Increased interest on long-term debt due to the interest accrued on the $150 million senior notes issued in December 2014. |
• | Increased depreciation and amortization related to an increase in depreciable plant, primarily due to MPS Units 1 & 2 and the EOC being placed in service during the first quarter of 2015. |
• | Decreased deregulated Palo Verde Unit 3 revenues, primarily due to a 26.1% decrease in proxy market prices, reflecting a decline in the price of natural gas and an 18.8% decrease in generation due primarily to a Unit 3 planned spring refueling outage that was completed in May 2015 with no comparable outage in 2014. |
• | Recognition of Palo Verde performance rewards associated with the 2009 to 2012 performance periods, net of disallowed fuel and purchased power costs related to the resolution of the Texas fuel reconciliation proceeding designated as PUCT Docket No. 41852 recorded in June 2014 with no comparable amount in the current period. |
• | Decreased retail non-fuel base revenues, primarily due to decreased revenues of $2.0 million from sales to public authorities due to a 1.9% decrease in kWh sales and a military installation moving a portion of their load to an interruptible rate, partially offset by a $0.9 million increase in non-fuel base revenues from our residential customers reflecting a 1.3% increase in the average number of residential customers served, partially offset by milder weather during 2015. |
Income for the six months ended June 30, 2015, when compared to the same period last year, was positively affected by:
• | Decreased Palo Verde operation and maintenance expenses in the second quarter of 2015. |
• | Increased amounts of AFUDC capitalized due to higher balances of construction work in process that existed prior to MPS Units 1 and 2, and the EOC being placed in service during the first quarter of 2015. |
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El Paso Electric Ÿ P.O.Box 982 Ÿ El Paso, Texas 79960 | ||
Retail Non-fuel Base Revenues
Retail non-fuel base revenues decreased $1.9 million, pre-tax, or 1.3% in the second quarter of 2015 compared to the same period in 2014, despite total customer growth of 1.4%. This decrease includes a $1.6 million decrease from sales to public authorities reflecting a military installation moving a portion of their load to an interruptible rate as well as a 3.5% decrease in kWh sales reflecting energy savings from energy conservation and efficiency programs and the use of solar distributed generation at military installations. Retail non-fuel base revenues from residential customers decreased $0.4 million due to a 1.4% decrease in kWh sales reflecting milder weather during the quarter compared to the same period in 2014, despite a 1.3% increase in the average number of residential customers. Cooling degree days decreased 15.2% for the second quarter of 2015, compared to the same quarter last year, and were 11.5% below the 10-year average. Non-fuel base revenues and kWh sales are provided by customer class on page 10 of this release.
For the six months ended June 30, 2015, retail non-fuel base revenues decreased $1.2 million, or 0.5% compared to the same period in 2014. This decrease includes a $2.0 million decrease from sales to public authorities reflecting a military installation moving a portion of their load to an interruptible rate as well as a 1.9% decrease in kWh sales reflecting energy savings from energy conservation and efficiency programs and the use of solar distributed generation at military installations. Retail non-fuel base revenues from residential customers increased $0.9 million due to a 1.3% increase in the average number of customers served, partially offset by milder weather during 2015. Non-fuel base revenues and kWh sales are provided by customer class on page 12 of this release.
Commercial Operation of Montana Power Station Units 1 and 2
During March 2015, the Company placed into commercial operation the first two generating units at MPS and the related common facilities and transmission systems at a cost of approximately $227.2 million. The two state-of-the-art 88-MW simple cycle aero-derivative combustion turbines are powered by natural gas and have quick start capabilities which allow the units to go from off-line to full output in less than 10 minutes, thus increasing overall power grid stability, and work in concert with our renewable energy sources. These two units will generate enough energy to power more than 80,000 homes.
Quarterly Cash Dividend
On May 28, 2015, the Board of Directors approved an increase to the quarterly cash dividend to $0.295 per share of common stock from our previous quarterly rate of $0.28 per share. This represents an increase in the annualized cash dividend from $1.12 to $1.18 per share. The dividend increase commenced with the June 30, 2015 payment. On July 23, 2015, the Board of Directors declared a quarterly cash dividend of $0.295 per share payable on September 30, 2015 to shareholders of record as of September 16, 2015.
Capital and Liquidity
We continue to maintain a strong capital structure in which common stock equity represented 43.5% of our capitalization (common stock equity, long-term debt, current maturities of long-term debt, and short-term borrowings under the revolving credit facility). At June 30, 2015, we had a balance of $10.4 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 Revolving Credit Facility ("RCF") to meet all of our anticipated cash requirements for the next 12 months including the $15 million maturity of our Series A 3.67% Senior Notes (due August 2015). We may also issue long-term debt in the capital markets in late 2015 or early 2016 to finance capital requirements.
Cash flows from operations for the six months ended June 30, 2015 were $60.4 million, compared to $57.0 million in the corresponding period in 2014. A component of cash flows from operations is the change in net over-
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El Paso Electric Ÿ P.O.Box 982 Ÿ El Paso, Texas 79960 | ||
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, 2015, the Company had a fuel over-recovery of $10.8 million compared to an under-recovery of fuel costs of $13.4 million during the six months ended June 30, 2014. At June 30, 2015, we had a net fuel over-recovery balance of $1.5 million, including $1.1 million in Texas and $0.4 million in New Mexico. On April 15, 2015, we filed a request to lower our Texas fixed fuel factor by approximately 24% to reflect a change in fuel costs primarily related to a reduction in natural gas prices. This decrease was effective with May 2015 billings.
During the six months ended June 30, 2015, 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 utility plant were $147.0 million for the six months ended June 30, 2015 and $106.0 million for the six months ended June 30, 2014. Capital expenditures for 2015 are expected to be $276.3 million. Capital requirements for purchases of nuclear fuel were $22.4 million for the six months ended June 30, 2015 and $17.7 million for the six months ended June 30, 2014.
On June 30, 2015, we paid a quarterly cash dividend of $0.295 per share, or $11.9 million to shareholders of record on June 16, 2015. We paid a total of $23.2 million in cash dividends during the six months ended June 30, 2015. At the current dividend rate, we expect to pay cash dividends of approximately $47.1 million during 2015.
No shares of common stock were repurchased during the six months ended June 30, 2015. As of June 30, 2015, 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 (the "RGRT"). The RGRT, the trust through which we finance our portion of nuclear fuel for Palo Verde, is consolidated in the Company's financial statements. The RCF has a term ending January 14, 2019. The aggregate unsecured borrowing available under the RCF is $300 million. We may increase the RCF by up to $100 million (up to a total of $400 million) during the term of the agreement, upon the satisfaction of certain conditions, more fully set forth in the agreement, including obtaining commitments from lenders or third party financial institutions. The amounts we borrow under the RCF may be used for working capital and general corporate purposes. The total amount borrowed for nuclear fuel by the RGRT was $128.1 million at June 30, 2015, of which $18.1 million had been borrowed under the RCF, and $110.0 million was borrowed through senior notes. Borrowings by the RGRT for nuclear fuel were $126.8 million as of June 30, 2014, of which $16.8 million had been borrowed under the RCF and $110.0 million was borrowed through senior notes. Interest costs on borrowings to finance nuclear fuel are accumulated by the RGRT and charged to us as fuel is consumed and recovered through fuel recovery charges. At June 30, 2015, $110.0 million was outstanding under the RCF for working capital and general corporate purposes. At June 30, 2014, $81.0 million was outstanding under the RCF for working capital and general corporate purposes.
2015 Earnings Guidance
We are adjusting our earnings guidance for 2015 to a range of $1.75 to $2.05 per basic share from the previous range of $1.75 to 2.15.
Conference Call
A conference call to discuss second quarter 2015 financial results is scheduled for 10:30 A.M. Eastern Time, on August 5, 2015. The dial-in number is 888-503-8169 with a conference ID number of 3216276. The international
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El Paso Electric Ÿ P.O.Box 982 Ÿ El Paso, Texas 79960 | ||
dial-in number is 719-325-2454. The conference leader will be Lisa Budtke, Assistant Treasurer. A replay will run through August 19, 2015 with a dial-in number of 888-203-1112 and a conference ID number of 3216276. 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) 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; (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; (xiii) possible physical or cyber attacks, intrusions or other catastrophic events; and (xiv) 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.
Media Contacts | |
Eddie Gutierrez | |
915.543.5763 | |
eduardo.gutierrez@epelectric.com | |
Investor Relations | |
Lisa Budtke | |
915.543.5947 | |
lisa.budtke@epelectric.com | |
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El Paso Electric Ÿ P.O.Box 982 Ÿ El Paso, Texas 79960 | ||
El Paso Electric Company | |||||||||||||
Statements of Operations | |||||||||||||
Quarter Ended June 30, 2015 and 2014 | |||||||||||||
(In thousands except for per share data) | |||||||||||||
(Unaudited) | |||||||||||||
2015 | 2014 | Variance | |||||||||||
Operating revenues, net of energy expenses: | |||||||||||||
Base revenues | $ | 149,171 | $ | 151,061 | $ | (1,890 | ) | (a) | |||||
Deregulated Palo Verde Unit 3 revenues | 1,879 | 3,551 | (1,672 | ) | |||||||||
Palo Verde performance rewards, net | — | 2,220 | (2,220 | ) | |||||||||
Other | 6,903 | 7,169 | (266 | ) | |||||||||
Operating Revenues Net of Energy Expenses | 157,953 | 164,001 | (6,048 | ) | |||||||||
Other operating expenses: | |||||||||||||
Other operations and maintenance | 53,675 | 50,034 | 3,641 | ||||||||||
Palo Verde operations and maintenance | 23,838 | 26,196 | (2,358 | ) | |||||||||
Taxes other than income taxes | 15,433 | 15,557 | (124 | ) | |||||||||
Other income | 634 | 1,914 | (1,280 | ) | |||||||||
Earnings Before Interest, Taxes, Depreciation and Amortization | 65,641 | 74,128 | (8,487 | ) | (b) | ||||||||
Depreciation and amortization | 23,135 | 21,083 | 2,052 | ||||||||||
Interest on long-term debt | 16,495 | 14,607 | 1,888 | ||||||||||
AFUDC and capitalized interest | 4,920 | 6,709 | (1,789 | ) | |||||||||
Other interest expense | 354 | 288 | 66 | ||||||||||
Income Before Income Taxes | 30,577 | 44,859 | (14,282 | ) | |||||||||
Income tax expense | 9,505 | 14,763 | (5,258 | ) | |||||||||
Net Income | $ | 21,072 | $ | 30,096 | $ | (9,024 | ) | ||||||
Basic Earnings per Share | $ | 0.52 | $ | 0.75 | $ | (0.23 | ) | ||||||
Diluted Earnings per Share | $ | 0.52 | $ | 0.75 | $ | (0.23 | ) | ||||||
Dividends declared per share of common stock | $ | 0.295 | $ | 0.28 | $ | 0.015 | |||||||
Weighted average number of shares outstanding | 40,270 | 40,181 | 89 | ||||||||||
Weighted average number of shares and dilutive | |||||||||||||
potential shares outstanding | 40,303 | 40,212 | 91 | ||||||||||
(a) | Base revenues exclude fuel recovered through New Mexico base rates of $16.4 million and $17.1 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. | ||||||||||||
Page 7 of 14
El Paso Electric Company | |||||||||||||
Statements of Operations | |||||||||||||
Six Months Ended June 30, 2015 and 2014 | |||||||||||||
(In thousands except for per share data) | |||||||||||||
(Unaudited) | |||||||||||||
2015 | 2014 | Variance | |||||||||||
Operating revenues, net of energy expenses: | |||||||||||||
Base revenues | $ | 254,028 | $ | 255,208 | $ | (1,180 | ) | (a) | |||||
Deregulated Palo Verde Unit 3 revenues | 5,006 | 7,959 | (2,953 | ) | |||||||||
Palo Verde performance rewards, net | — | 2,220 | (2,220 | ) | |||||||||
Other | 13,761 | 14,629 | (868 | ) | |||||||||
Operating Revenues Net of Energy Expenses | 272,795 | 280,016 | (7,221 | ) | |||||||||
Other operating expenses: | |||||||||||||
Other operations and maintenance | 102,986 | 99,098 | 3,888 | ||||||||||
Palo Verde operations and maintenance | 45,686 | 47,552 | (1,866 | ) | |||||||||
Taxes other than income taxes | 29,591 | 30,919 | (1,328 | ) | |||||||||
Other income | 5,577 | 7,253 | (1,676 | ) | |||||||||
Earnings Before Interest, Taxes, Depreciation and Amortization | 100,109 | 109,700 | (9,591 | ) | (b) | ||||||||
Depreciation and amortization | 44,700 | 41,651 | 3,049 | ||||||||||
Interest on long-term debt | 32,978 | 29,186 | 3,792 | ||||||||||
AFUDC and capitalized interest | 13,105 | 12,545 | 560 | ||||||||||
Other interest expense | 517 | 461 | 56 | ||||||||||
Income Before Income Taxes | 35,019 | 50,947 | (15,928 | ) | |||||||||
Income tax expense | 10,489 | 16,236 | (5,747 | ) | |||||||||
Net Income | $ | 24,530 | $ | 34,711 | $ | (10,181 | ) | ||||||
Basic Earnings per Share | $ | 0.61 | $ | 0.86 | $ | (0.25 | ) | ||||||
Diluted Earnings per Share | $ | 0.61 | $ | 0.86 | $ | (0.25 | ) | ||||||
Dividends declared per share of common stock | $ | 0.575 | $ | 0.545 | $ | 0.030 | |||||||
Weighted average number of shares outstanding | 40,257 | 40,165 | 92 | ||||||||||
Weighted average number of shares and dilutive | |||||||||||||
potential shares outstanding | 40,285 | 40,181 | 104 | ||||||||||
(a) | Base revenues exclude fuel recovered through New Mexico base rates of $32.6 million and $33.2 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. | ||||||||||||
Page 8 of 14
El Paso Electric Company | |||||||||||
Cash Flow Summary | |||||||||||
Six Months Ended June 30, 2015 and 2014 | |||||||||||
(In thousands and Unaudited) | |||||||||||
2015 | 2014 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 24,530 | $ | 34,711 | |||||||
Adjustments to reconcile net income to net cash provided by operations: | |||||||||||
Depreciation and amortization of electric plant in service | 44,700 | 41,651 | |||||||||
Amortization of nuclear fuel | 21,379 | 21,877 | |||||||||
Deferred income taxes, net | 8,789 | 15,141 | |||||||||
Net gains on sale of decommissioning trust funds | (3,563 | ) | (2,967 | ) | |||||||
Other | 2,588 | 631 | |||||||||
Change in: | |||||||||||
Accounts receivable | (20,782 | ) | (33,585 | ) | |||||||
Net over-collection (under-collection) of fuel revenues | 10,833 | (13,369 | ) | ||||||||
Accounts payable | (15,528 | ) | 1,983 | ||||||||
Other | (12,571 | ) | (9,102 | ) | |||||||
Net cash provided by operating activities | 60,375 | 56,971 | |||||||||
Cash flows from investing activities: | |||||||||||
Cash additions to utility property, plant and equipment | (147,040 | ) | (105,999 | ) | |||||||
Cash additions to nuclear fuel | (22,424 | ) | (17,690 | ) | |||||||
Decommissioning trust funds | (3,871 | ) | (4,550 | ) | |||||||
Other | (6,480 | ) | (2,151 | ) | |||||||
Net cash used for investing activities | (179,815 | ) | (130,390 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Dividends paid | (23,220 | ) | (21,969 | ) | |||||||
Borrowings under the revolving credit facility, net | 113,540 | 83,420 | |||||||||
Other | (1,020 | ) | (928 | ) | |||||||
Net cash provided by financing activities | 89,300 | 60,523 | |||||||||
Net decrease in cash and cash equivalents | (30,140 | ) | (12,896 | ) | |||||||
Cash and cash equivalents at beginning of period | 40,504 | 25,592 | |||||||||
Cash and cash equivalents at end of period | $ | 10,364 | $ | 12,696 | |||||||
Page 9 of 14
El Paso Electric Company | ||||||||||||||||||||
Quarter Ended June 30, 2015 and 2014 | ||||||||||||||||||||
Sales and Revenues Statistics | ||||||||||||||||||||
Increase (Decrease) | ||||||||||||||||||||
2015 | 2014 | Amount | Percentage | |||||||||||||||||
kWh sales (in thousands): | ||||||||||||||||||||
Retail: | ||||||||||||||||||||
Residential | 640,940 | 650,003 | (9,063 | ) | (1.4 | )% | ||||||||||||||
Commercial and industrial, small | 626,968 | 620,630 | 6,338 | 1.0 | % | |||||||||||||||
Commercial and industrial, large | 278,822 | 292,113 | (13,291 | ) | (4.5 | )% | ||||||||||||||
Public authorities | 419,882 | 434,930 | (15,048 | ) | (3.5 | )% | ||||||||||||||
Total retail sales | 1,966,612 | 1,997,676 | (31,064 | ) | (1.6 | )% | ||||||||||||||
Wholesale: | ||||||||||||||||||||
Sales for resale | 20,504 | 20,328 | 176 | 0.9 | % | |||||||||||||||
Off-system sales | 517,752 | 565,853 | (48,101 | ) | (8.5 | )% | ||||||||||||||
Total wholesale sales | 538,256 | 586,181 | (47,925 | ) | (8.2 | )% | ||||||||||||||
Total kWh sales | 2,504,868 | 2,583,857 | (78,989 | ) | (3.1 | )% | ||||||||||||||
Operating revenues (in thousands): | ||||||||||||||||||||
Non-fuel base revenues: | ||||||||||||||||||||
Retail: | ||||||||||||||||||||
Residential | $ | 59,422 | $ | 59,828 | $ | (406 | ) | (0.7 | )% | |||||||||||
Commercial and industrial, small | 53,864 | 53,675 | 189 | 0.4 | % | |||||||||||||||
Commercial and industrial, large | 9,879 | 9,963 | (84 | ) | (0.8 | )% | ||||||||||||||
Public authorities | 25,317 | 26,915 | (1,598 | ) | (5.9 | )% | ||||||||||||||
Total retail non-fuel base revenues | 148,482 | 150,381 | (1,899 | ) | (1.3 | )% | ||||||||||||||
Wholesale: | ||||||||||||||||||||
Sales for resale | 689 | 680 | 9 | 1.3 | % | |||||||||||||||
Total non-fuel base revenues | 149,171 | 151,061 | (1,890 | ) | (1.3 | )% | ||||||||||||||
Fuel revenues: | ||||||||||||||||||||
Recovered from customers during the period | 28,949 | 40,529 | (11,580 | ) | (28.6 | )% | ||||||||||||||
Under collection of fuel (a) | 4,855 | 15,369 | (10,514 | ) | (68.4 | )% | ||||||||||||||
New Mexico fuel in base rates | 16,437 | 17,132 | (695 | ) | (4.1 | )% | ||||||||||||||
Total fuel revenues (b) | 50,241 | 73,030 | (22,789 | ) | (31.2 | )% | ||||||||||||||
Off-system sales: | ||||||||||||||||||||
Fuel cost | 10,419 | 18,000 | (7,581 | ) | (42.1 | )% | ||||||||||||||
Shared margins | 2,316 | 2,645 | (329 | ) | (12.4 | )% | ||||||||||||||
Retained margins | 164 | 322 | (158 | ) | (49.1 | )% | ||||||||||||||
Total off-system sales | 12,899 | 20,967 | (8,068 | ) | (38.5 | )% | ||||||||||||||
Other (c) | 7,197 | 6,743 | 454 | 6.7 | % | |||||||||||||||
Total operating revenues | $ | 219,508 | $ | 251,801 | $ | (32,293 | ) | (12.8 | )% | |||||||||||
(a) | 2014 includes $2.2 million related to Palo Verde performance rewards, net. | |||||||||||||||||||
(b) | Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $1.9 million and $3.6 million, respectively. | |||||||||||||||||||
(c) | Represents revenues with no related kWh sales. | |||||||||||||||||||
Page 10 of 14
El Paso Electric Company | |||||||||||||
Quarter Ended June 30, 2015 and 2014 | |||||||||||||
Other Statistical Data | |||||||||||||
Increase (Decrease) | |||||||||||||
2015 | 2014 | Amount | Percentage | ||||||||||
Average number of retail customers: (a) | |||||||||||||
Residential | 356,495 | 352,035 | 4,460 | 1.3 | % | ||||||||
Commercial and industrial, small | 40,213 | 39,482 | 731 | 1.9 | % | ||||||||
Commercial and industrial, large | 50 | 49 | 1 | 2.0 | % | ||||||||
Public authorities | 5,273 | 5,108 | 165 | 3.2 | % | ||||||||
Total | 402,031 | 396,674 | 5,357 | 1.4 | % | ||||||||
Number of retail customers (end of period): (a) | |||||||||||||
Residential | 356,932 | 352,340 | 4,592 | 1.3 | % | ||||||||
Commercial and industrial, small | 40,356 | 39,557 | 799 | 2.0 | % | ||||||||
Commercial and industrial, large | 49 | 49 | — | — | % | ||||||||
Public authorities | 5,298 | 5,079 | 219 | 4.3 | % | ||||||||
Total | 402,635 | 397,025 | 5,610 | 1.4 | % | ||||||||
Weather statistics: (b) | 10-Yr Average | ||||||||||||
Heating degree days | 53 | 84 | 66 | ||||||||||
Cooling degree days | 929 | 1,095 | 1,050 | ||||||||||
Generation and purchased power (kWh, in thousands): | Increase (Decrease) | ||||||||||||
2015 | 2014 | Amount | Percentage | ||||||||||
Palo Verde | 1,203,902 | 1,191,898 | 12,004 | 1.0 | % | ||||||||
Four Corners | 173,427 | 137,988 | 35,439 | 25.7 | % | ||||||||
Gas plants | 1,025,980 | 1,027,544 | (1,564 | ) | (0.2 | )% | |||||||
Total generation | 2,403,309 | 2,357,430 | 45,879 | 1.9 | % | ||||||||
Purchased power: | |||||||||||||
Photovoltaic | 87,655 | 79,385 | 8,270 | 10.4 | % | ||||||||
Other | 164,194 | 320,130 | (155,936 | ) | (48.7 | )% | |||||||
Total purchased power | 251,849 | 399,515 | (147,666 | ) | (37.0 | )% | |||||||
Total available energy | 2,655,158 | 2,756,945 | (101,787 | ) | (3.7 | )% | |||||||
Line losses and Company use | 150,290 | 173,088 | (22,798 | ) | (13.2 | )% | |||||||
Total kWh sold | 2,504,868 | 2,583,857 | (78,989 | ) | (3.1 | )% | |||||||
Palo Verde capacity factor | 88.6 | % | 87.8 | % | 0.8 | % | ||||||
(a) | The number of retail customers is based on the number of service locations. | |||||||||||
(b) | A degree day is recorded for each degree that the average outdoor temperature varies from a standard of 65 degrees Fahrenheit. | |||||||||||
Page 11 of 14
El Paso Electric Company | ||||||||||||||||||||
Six Months Ended June 30, 2015 and 2014 | ||||||||||||||||||||
Sales and Revenues Statistics | ||||||||||||||||||||
Increase (Decrease) | ||||||||||||||||||||
2015 | 2014 | Amount | Percentage | |||||||||||||||||
kWh sales (in thousands): | ||||||||||||||||||||
Retail: | ||||||||||||||||||||
Residential | 1,202,593 | 1,193,033 | 9,560 | 0.8 | % | |||||||||||||||
Commercial and industrial, small | 1,117,034 | 1,114,549 | 2,485 | 0.2 | % | |||||||||||||||
Commercial and industrial, large | 531,942 | 518,665 | 13,277 | 2.6 | % | |||||||||||||||
Public authorities | 762,975 | 777,958 | (14,983 | ) | (1.9 | )% | ||||||||||||||
Total retail sales | 3,614,544 | 3,604,205 | 10,339 | 0.3 | % | |||||||||||||||
Wholesale: | ||||||||||||||||||||
Sales for resale | 32,449 | 32,720 | (271 | ) | (0.8 | )% | ||||||||||||||
Off-system sales | 1,201,281 | 1,262,867 | (61,586 | ) | (4.9 | )% | ||||||||||||||
Total wholesale sales | 1,233,730 | 1,295,587 | (61,857 | ) | (4.8 | )% | ||||||||||||||
Total kWh sales | 4,848,274 | 4,899,792 | (51,518 | ) | (1.1 | )% | ||||||||||||||
Operating revenues (in thousands): | ||||||||||||||||||||
Non-fuel base revenues: | ||||||||||||||||||||
Retail: | ||||||||||||||||||||
Residential | $ | 106,362 | $ | 105,422 | $ | 940 | 0.9 | % | ||||||||||||
Commercial and industrial, small | 85,834 | 85,796 | 38 | — | % | |||||||||||||||
Commercial and industrial, large | 18,128 | 18,291 | (163 | ) | (0.9 | )% | ||||||||||||||
Public authorities | 42,575 | 44,571 | (1,996 | ) | (4.5 | )% | ||||||||||||||
Total retail non-fuel base revenues | 252,899 | 254,080 | (1,181 | ) | (0.5 | )% | ||||||||||||||
Wholesale: | ||||||||||||||||||||
Sales for resale | 1,129 | 1,128 | 1 | 0.1 | % | |||||||||||||||
Total non-fuel base revenues | 254,028 | 255,208 | (1,180 | ) | (0.5 | )% | ||||||||||||||
Fuel revenues: | ||||||||||||||||||||
Recovered from customers during the period | 63,371 | 71,702 | (8,331 | ) | (11.6 | )% | ||||||||||||||
Under (over) collection of fuel (a) | (10,832 | ) | 13,359 | (24,191 | ) | — | % | |||||||||||||
New Mexico fuel in base rates | 32,550 | 33,227 | (677 | ) | (2.0 | )% | ||||||||||||||
Total fuel revenues (b) | 85,089 | 118,288 | (33,199 | ) | (28.1 | )% | ||||||||||||||
Off-system sales: | ||||||||||||||||||||
Fuel cost | 23,284 | 39,463 | (16,179 | ) | (41.0 | )% | ||||||||||||||
Shared margins | 6,252 | 9,389 | (3,137 | ) | (33.4 | )% | ||||||||||||||
Retained margins | 520 | 1,124 | (604 | ) | (53.7 | )% | ||||||||||||||
Total off-system sales | 30,056 | 49,976 | (19,920 | ) | (39.9 | )% | ||||||||||||||
Other (c) | 14,081 | 13,845 | 236 | 1.7 | % | |||||||||||||||
Total operating revenues | $ | 383,254 | $ | 437,317 | $ | (54,063 | ) | (12.4 | )% | |||||||||||
(a) | 2015 includes a DOE refund related to spent fuel storage of $5.8 million and 2014 includes $2.2 million related to Palo Verde performance rewards, net. | |||||||||||||||||||
(b) | Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $5.0 million and $8.0 million, respectively. | |||||||||||||||||||
(c) | Represents revenues with no related kWh sales. | |||||||||||||||||||
Page 12 of 14
El Paso Electric Company | |||||||||||||
Six Months Ended June 30, 2015 and 2014 | |||||||||||||
Other Statistical Data | |||||||||||||
Increase (Decrease) | |||||||||||||
2015 | 2014 | Amount | Percentage | ||||||||||
Average number of retail customers: (a) | |||||||||||||
Residential | 355,625 | 351,183 | 4,442 | 1.3 | % | ||||||||
Commercial and industrial, small | 40,127 | 39,350 | 777 | 2.0 | % | ||||||||
Commercial and industrial, large | 50 | 50 | — | — | % | ||||||||
Public authorities | 5,245 | 5,078 | 167 | 3.3 | % | ||||||||
Total | 401,047 | 395,661 | 5,386 | 1.4 | % | ||||||||
Number of retail customers (end of period): (a) | |||||||||||||
Residential | 356,932 | 352,340 | 4,592 | 1.3 | % | ||||||||
Commercial and industrial, small | 40,356 | 39,557 | 799 | 2.0 | % | ||||||||
Commercial and industrial, large | 49 | 49 | — | — | % | ||||||||
Public authorities | 5,298 | 5,079 | 219 | 4.3 | % | ||||||||
Total | 402,635 | 397,025 | 5,610 | 1.4 | % | ||||||||
Weather statistics: (b) | 10-Yr Average | ||||||||||||
Heating degree days | 1,206 | 1,042 | 1,246 | ||||||||||
Cooling degree days | 963 | 1,120 | 1,078 | ||||||||||
Generation and purchased power (kWh, in thousands): | Increase (Decrease) | ||||||||||||
2015 | 2014 | Amount | Percentage | ||||||||||
Palo Verde | 2,566,096 | 2,555,975 | 10,121 | 0.4 | % | ||||||||
Four Corners | 310,645 | 272,224 | 38,421 | 14.1 | % | ||||||||
Gas plants | 1,694,555 | 1,595,288 | 99,267 | 6.2 | % | ||||||||
Total generation | 4,571,296 | 4,423,487 | 147,809 | 3.3 | % | ||||||||
Purchased power: | |||||||||||||
Photovoltaic | 146,714 | 108,184 | 38,530 | 35.6 | % | ||||||||
Other | 405,907 | 653,448 | (247,541 | ) | (37.9 | )% | |||||||
Total purchased power | 552,621 | 761,632 | (209,011 | ) | (27.4 | )% | |||||||
Total available energy | 5,123,917 | 5,185,119 | (61,202 | ) | (1.2 | )% | |||||||
Line losses and Company use | 275,643 | 285,327 | (9,684 | ) | (3.4 | )% | |||||||
Total kWh sold | 4,848,274 | 4,899,792 | (51,518 | ) | (1.1 | )% | |||||||
Palo Verde capacity factor | 95.0 | % | 94.6 | % | 0.4 | % | ||||||
(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. | |||||||||||
Page 13 of 14
El Paso Electric Company | |||||||||
Financial Statistics | |||||||||
At June 30, 2015 and 2014 | |||||||||
(In thousands, except number of shares, book value per share, and ratios) | |||||||||
Balance Sheet | 2015 | 2014 | |||||||
Cash and cash equivalents | $ | 10,364 | $ | 12,696 | |||||
Common stock equity | $ | 984,678 | $ | 973,828 | |||||
Long-term debt | 1,134,231 | 999,665 | |||||||
Total capitalization | $ | 2,118,909 | $ | 1,973,493 | |||||
Current maturities of long-term debt | $ | 15,000 | $ | — | |||||
Short-term borrowings under the revolving credit facility | $ | 128,072 | $ | 97,772 | |||||
Number of shares - end of period | 40,425,884 | 40,352,024 | |||||||
Book value per common share | $ | 24.36 | $ | 24.13 | |||||
Common equity ratio (a) | 43.5 | % | 47.0 | % | |||||
Debt ratio | 56.5 | % | 53.0 | % | |||||
(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. | ||||||||
Page 14 of 14
