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El Paso Electric Announces Third Quarter Financial Results

November 4, 2015 6:50 AM

EL PASO, Texas--(BUSINESS WIRE)-- El Paso Electric (NYSE: EE):

Overview

"Our third quarter results are primarily the result of the hotter than normal summer weather our service territory experienced during the quarter ended September 30, 2015," said Tom Shockley, Chief Executive Officer. "Our retail kWh sales grew 7.0% over the third quarter of 2014, which set a record for kWh consumption for our service territory during any calendar quarter. Further, we reached a new native system peak of 1,794 megawatts in August 2015. Although these accomplishments were largely the result of hotter weather conditions, they illustrate that we operate in 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 2015 net income relative to 2014 net income:

Quarter Ended Nine Months Ended
After- After-
Tax Tax
Pre-Tax Net Basic Pre-Tax Net Basic
Effect Income EPS Effect Income EPS
September 30, 2014 $ 52,476 $ 1.30 $ 87,187 $ 2.16
Changes in:
Retail non-fuel base revenues $ 14,050 9,133 0.23 $ 12,869 8,365 0.21
Investment and interest income 3,539 2,825 0.07 4,027 3,232 0.08
Allowance for funds used during construction (2,811 ) (2,518 ) (0.06 ) (2,274 ) (2,107 ) (0.05 )
Interest on long-term debt (1,848 ) (1,202 ) (0.03 ) (5,640 ) (3,667 ) (0.09 )
Depreciation and amortization (1,695 ) (1,102 ) (0.03 ) (4,744 ) (3,084 ) (0.08 )
Palo Verde operations and maintenance (1,527 ) (992 ) (0.03 ) 339 221 0.01
Deregulated Palo Verde Unit 3 (1,409 ) (915 ) (0.02 ) (4,362 ) (2,835 ) (0.07 )
Transmission and distribution O&M (548 ) (356 ) (0.01 ) (2,820 ) (1,832 ) (0.05 )
O&M at fossil-fuel generating plants (26 ) (17 ) — (4,305 ) (2,799 ) (0.07 )
Palo Verde performance rewards, net — — — (2,143 ) (1,415 ) (0.04 )
Other (592 ) (0.02 ) 4 —
September 30, 2015 $ 56,740 $ 1.40 $ 81,270 $ 2.01

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, operations and maintenance expense, property taxes and interest cost.

Third Quarter 2015

Income for the quarter ended September 30, 2015, when compared to the same period last year, was positively affected by:

Income for the quarter ended September 30, 2015, when compared to the same period last year, was negatively affected by:

Year to Date

Income for the nine months ended September 30, 2015, when compared to the same period last year, was positively affected by:

Income for the nine months ended September 30, 2015, when compared to the same period last year, was negatively affected by:

Retail Non-fuel Base Revenues

Retail non-fuel base revenues increased $14.1 million, pre-tax, or 7.7% in the third quarter of 2015, compared to the same period in 2014. This increase includes a $9.5 million increase in revenues from residential customers and a $1.8 million increase in revenues from our small commercial and industrial customers reflecting hotter summer weather in the third quarter of 2015 when compared to 2014. Retail non-fuel base revenues from large commercial and industrial customers increased $1.4 million. Retail non-fuel revenues from sales to public authorities increased $1.3 million reflecting an 8.2% increase in kWh sales. Cooling degree days increased 22.4% for the third quarter of 2015, compared to the same quarter last year, and were 15.9% above the 10-year average. Non-fuel base revenues and kWh sales are provided by customer class on page 11 of this release.

For the nine months ended September 30, 2015, retail non-fuel base revenues increased $12.9 million, or 2.9% compared to the same period in 2014. This increase includes a $10.4 million increase in revenues from residential customers and a $1.9 million increase in revenues from small commercial and industrial customers reflecting hotter summer weather and an increase of 1.3% and 1.8%, respectively, in the average number of customers. KWh sales to public authorities increased 1.6% while revenue declined by $0.7 million due to a military installation moving a portion of their load to an interruptible rate. Retail non-fuel revenues from large commercial and industrial customers increased $1.2 million. Cooling degree days increased 6.3% in 2015, when compared to the same period last year, and were 4.7% over the 10-year average. Heating degree days increased 15.7% for the nine months of 2015, compared to the same period last year, and were 3.3% below the 10-year average. Non-fuel base revenues and kWh sales are provided by customer class on page 13 of this release.

Capital and Liquidity

We continue to maintain a strong capital structure in which common stock equity represented 44.9% 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 September 30, 2015, we had a balance of $12.6 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 our Revolving Credit Facility ("RCF") to meet all of our anticipated cash requirements for the next 12 months. We may also issue long-term debt in the capital markets in early 2016 to finance capital requirements and reduce amounts outstanding on our RCF. At September 30, 2015, $85.0 million was outstanding under the RCF for working capital and general corporate purposes.

Cash flows from operations for the nine months ended September 30, 2015 were $176.4 million, compared to $174.6 million in the corresponding period in 2014. A component of cash flows from operations is the change in net over-collection and under-collection of fuel revenues. The difference between fuel revenues collected and fuel expense incurred is deferred to be either refunded (over-recoveries) or surcharged (under-recoveries) to customers in the future. During the nine months ended September 30, 2015, the Company had a fuel over-recovery of $10.9 million compared to an under-recovery of fuel costs of $1.2 million during the nine months ended September 30, 2014. At September 30, 2015, we had a net fuel over-recovery balance of $1.6 million, including an under-recovery of $2.4 million in Texas, and an over-recovery of $4.0 million in the New Mexico and FERC jurisdictions. 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 nine months ended September 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 $211.5 million for the nine months ended September 30, 2015 and $189.3 million for the nine months ended September 30, 2014. Capital expenditures for 2015 are expected to be $278.7 million. Capital requirements for purchases of nuclear fuel were $30.5 million for the nine months ended September 30, 2015, and $28.8 million for the nine months ended September 30, 2014.

On September 30, 2015, we paid a quarterly cash dividend of $0.295 per share, or $11.9 million, to shareholders of record as of September 16, 2015. We paid a total of $35.1 million in cash dividends during the nine months ended September 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 nine months ended September 30, 2015. As of September 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. In August 2015, the RGRT $15.0 million Series A 3.67% Senior Notes matured and were paid utilizing funds borrowed from the RCF. The total amount borrowed for nuclear fuel by the RGRT was $128.7 million at September 30, 2015, of which $33.7 million had been borrowed under the RCF, and $95.0 million was borrowed through senior notes. Borrowings by the RGRT for nuclear fuel were $127.5 million as of September 30, 2014, of which $17.5 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 September 30, 2015, $85.0 million was outstanding under the RCF for working capital and general corporate purposes. At September 30, 2014, $72.0 million was outstanding under the RCF for working capital and general corporate purposes.

We received approval from the New Mexico Public Regulation Commission on October 7, 2015, and from the Federal Energy Regulatory Commission ("FERC") on October 19, 2015, to issue up to $310 million in new long-term debt and to guarantee the issuance of up to $65 million of new debt by the RGRT to finance future purchases of nuclear fuel and to refinance existing nuclear fuel debt obligations. We also requested approval from the FERC to continue to utilize our existing RCF without change from the Commission’s previously approved authorization. The FERC authorization is effective from November 15, 2015 through November 15, 2017. The approvals granted in these cases supersede prior approvals.

2015 Earnings Guidance

We are adjusting and narrowing our earnings guidance for 2015 to a range of $1.95 to $2.10 per basic share from the previous range of $1.75 to $2.05.

Conference Call

A conference call to discuss third quarter 2015 financial results is scheduled for 10:30 A.M. Eastern Time, on November 4, 2015. The dial-in number is 888-461-2024 with a conference ID number of 4633829. The international dial-in number is 719-325-2361. The conference leader will be Lisa Budtke, Assistant Treasurer. A replay will run through November 18, 2015 with a dial-in number of 888-203-1112 and a conference ID number of 4633829. 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.

El Paso Electric Company
Statements of Operations
Quarter Ended September 30, 2015 and 2014
(In thousands except for per share data)
(Unaudited)
2015 2014 Variance
Operating revenues, net of energy expenses:
Base revenues $ 197,620 $ 183,405 $ 14,215 (a)
Deregulated Palo Verde Unit 3 revenues 2,535 3,944 (1,409 )
Other 9,240 7,702 1,538
Operating Revenues Net of Energy Expenses 209,395 195,051 14,344
Other operating expenses:
Other operations and maintenance 57,699 54,417 3,282
Palo Verde operations and maintenance 22,016 20,489 1,527
Taxes other than income taxes 19,253 17,964 1,289
Other income 5,747 1,389 4,358
Earnings Before Interest, Taxes, Depreciation and Amortization 116,174 103,570 12,604 (b)
Depreciation and amortization 22,380 20,685 1,695
Interest on long-term debt 16,465 14,617 1,848
AFUDC and capitalized interest 4,435 7,308 (2,873 )
Other interest expense 424 438 (14 )
Income Before Income Taxes 81,340 75,138 6,202
Income tax expense 24,600 22,662 1,938
Net Income $ 56,740 $ 52,476 $ 4,264
Basic Earnings per Share $ 1.40 $ 1.30 $ 0.10
Diluted Earnings per Share $ 1.40 $ 1.30 $ 0.10
Dividends declared per share of common stock $ 0.295 $ 0.280 $ 0.015
Weighted average number of shares outstanding 40,289 40,214 75

Weighted average number of shares and dilutive potential shares outstanding

40,330 42,065 (1,735 )
(a) Base revenues exclude fuel recovered through New Mexico base rates of $23.2 million and $22.4 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
Nine Months Ended September 30, 2015 and 2014
(In thousands except for per share data)
(Unaudited)
2015 2014 Variance
Operating revenues, net of energy expenses:
Base revenues $ 451,648 $ 438,613 $ 13,035 (a)
Deregulated Palo Verde Unit 3 revenues 7,541 11,903 (4,362 )
Palo Verde performance rewards, net — 2,220 (2,220 )
Other 23,001 22,331 670
Operating Revenues Net of Energy Expenses 482,190 475,067 7,123
Other operating expenses:
Other operations and maintenance 160,685 153,515 7,170
Palo Verde operations and maintenance 67,702 68,041 (339 )
Taxes other than income taxes 48,844 48,883 (39 )
Other income 11,324 8,642 2,682
Earnings Before Interest, Taxes, Depreciation and Amortization 216,283 213,270 3,013 (b)
Depreciation and amortization 67,080 62,336 4,744
Interest on long-term debt 49,443 43,803 5,640
AFUDC and capitalized interest 17,540 19,853 (2,313 )
Other interest expense 941 899 42
Income Before Income Taxes 116,359 126,085 (9,726 )
Income tax expense 35,089 38,898 (3,809 )
Net Income $ 81,270 $ 87,187 $ (5,917 )
Basic Earnings per Share $ 2.01 $ 2.16 $ (0.15 )
Diluted Earnings per Share $ 2.01 $ 2.16 $ (0.15 )
Dividends declared per share of common stock $ 0.870 $ 0.825 $ 0.045
Weighted average number of shares outstanding 40,268 40,181 87

Weighted average number of shares and dilutive potential shares outstanding

40,300 40,209 91
(a) Base revenues exclude fuel recovered through New Mexico base rates of $55.8 million and $55.6 million, respectively.
(b) Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a non-generally accepted accounting principles ("GAAP") financial measure and is not a substitute for net income or other measures of financial performance in accordance with GAAP.
El Paso Electric Company
Cash Flow Summary
Nine Months Ended September 30, 2015 and 2014
(In thousands and Unaudited)
2015 2014
Cash flows from operating activities:
Net income $ 81,270 $ 87,187
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization of electric plant in service 67,080 62,336
Amortization of nuclear fuel 32,864 33,942
Deferred income taxes, net 32,090 35,990
Net gains on sale of decommissioning trust funds (7,886 ) (3,791 )
Other 4,655 2,111
Change in:
Accounts receivable (33,156 ) (47,331 )
Net over-collection (under-collection) of fuel revenues 10,934 (1,233 )
Accounts payable (14,397 ) 3,557
Other 2,976 1,869
Net cash provided by operating activities 176,430 174,637
Cash flows from investing activities:
Cash additions to utility property, plant and equipment (211,516 ) (189,273 )
Cash additions to nuclear fuel (30,483 ) (28,772 )
Decommissioning trust funds (6,240 ) (6,988 )
Other (9,106 ) (2,805 )
Net cash used for investing activities (257,345 ) (227,838 )
Cash flows from financing activities:
Dividends paid (35,138 ) (33,261 )
Borrowings under the revolving credit facility, net 104,161 75,176
Payment on maturing RGRT senior notes (15,000 ) —
Other (1,039 ) (896 )
Net cash provided by financing activities 52,984 41,019
Net decrease in cash and cash equivalents (27,931 ) (12,182 )
Cash and cash equivalents at beginning of period 40,504 25,592
Cash and cash equivalents at end of period $ 12,573 $ 13,410
El Paso Electric Company
Quarter Ended September 30, 2015 and 2014
Sales and Revenues Statistics
Increase (Decrease)
2015 2014 Amount Percentage

kWh sales (in thousands):

Retail:
Residential 1,000,997 894,525 106,472 11.9 %
Commercial and industrial, small 718,897 694,928 23,969 3.4 %
Commercial and industrial, large 270,240 276,226 (5,986 ) (2.2 )%
Public authorities 459,212 424,445 34,767 8.2 %
Total retail sales 2,449,346 2,290,124 159,222 7.0 %
Wholesale:
Sales for resale 22,126 19,211 2,915 15.2 %
Off-system sales 711,934 740,153 (28,219 ) (3.8 )%
Total wholesale sales 734,060 759,364 (25,304 ) (3.3 )%
Total kWh sales 3,183,406 3,049,488 133,918 4.4 %

Operating revenues (in thousands):

Non-fuel base revenues:
Retail:
Residential $ 90,803 $ 81,296 $ 9,507 11.7 %
Commercial and industrial, small 62,966 61,143 1,823 3.0 %
Commercial and industrial, large 13,327 11,929 1,398 11.7 %
Public authorities 29,588 28,266 1,322 4.7 %
Total retail non-fuel base revenues 196,684 182,634 14,050 7.7 %
Wholesale:
Sales for resale 936 771 165 21.4 %
Total non-fuel base revenues 197,620 183,405 14,215 7.8 %
Fuel revenues:
Recovered from customers during the period 39,614 54,405 (14,791 ) (27.2 )%
Over collection of fuel (a) (101 ) (12,136 ) 12,035 99.2 %
New Mexico fuel in base rates 23,215 22,416 799 3.6 %
Total fuel revenues (b) 62,728 64,685 (1,957 ) (3.0 )%
Off-system sales:
Fuel cost 17,920 22,007 (4,087 ) (18.6 )%
Shared margins 2,446 5,126 (2,680 ) (52.3 )%
Retained margins 435 605 (170 ) (28.1 )%
Total off-system sales 20,801 27,738 (6,937 ) (25.0 )%
Other (c) 8,564 7,817 747 9.6 %
Total operating revenues $ 289,713 $ 283,645 $ 6,068 2.1 %
(a) 2014 includes a Department of Energy refund related to spent fuel storage of $8.3 million.
(b) Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $2.5 million and $3.9 million, respectively.
(c) Represents revenues with no related kWh sales.
El Paso Electric Company
Quarter Ended September 30, 2015 and 2014
Other Statistical Data
Increase (Decrease)
2015 2014 Amount Percentage

Average number of retail customers: (a)

Residential 357,913 353,075 4,838 1.4 %
Commercial and industrial, small 40,368 39,730 638 1.6 %
Commercial and industrial, large 49 49 — —
Public authorities 5,240 5,112 128 2.5 %
Total 403,570 397,966 5,604 1.4 %

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

Residential 358,421 353,640 4,781 1.4 %
Commercial and industrial, small 40,385 39,813 572 1.4 %
Commercial and industrial, large 49 49 — —
Public authorities 5,232 5,126 106 2.1 %
Total 404,087 398,628 5,459 1.4 %

Weather statistics: (b)

10-Yr Average
Heating degree days — — 1
Cooling degree days 1,732 1,415 1,495

Generation and purchased power (kWh, in thousands):

Increase (Decrease)
2015 2014 Amount Percentage
Palo Verde 1,374,274 1,370,091 4,183 0.3 %
Four Corners 162,771 164,665 (1,894 ) (1.2 )%
Gas plants 1,351,775 1,289,419 62,356 4.8 %
Total generation 2,888,820 2,824,175 64,645 2.3 %
Purchased power:
Photovoltaic 77,104 65,854 11,250 17.1 %
Other 421,571 320,869 100,702 31.4 %
Total purchased power 498,675 386,723 111,952 28.9 %
Total available energy 3,387,495 3,210,898 176,597 5.5 %
Line losses and Company use 204,089 161,410 42,679 26.4 %
Total kWh sold 3,183,406 3,049,488 133,918 4.4 %

Palo Verde capacity factor

100.1

%

99.8

%

0.3

%

(a) The number of retail customers is based on the number of service locations.
(b) A degree day is recorded for each degree that the average outdoor temperature varies from a standard of 65 degrees Fahrenheit.
El Paso Electric Company
Nine Months Ended September 30, 2015 and 2014
Sales and Revenues Statistics
Increase (Decrease)
2015 2014 Amount Percentage

kWh sales (in thousands):

Retail:
Residential 2,203,590 2,087,558 116,032 5.6 %
Commercial and industrial, small 1,835,931 1,809,477 26,454 1.5 %
Commercial and industrial, large 802,182 794,891 7,291 0.9 %
Public authorities 1,222,187 1,202,403 19,784 1.6 %
Total retail sales 6,063,890 5,894,329 169,561 2.9 %
Wholesale:
Sales for resale 54,575 51,931 2,644 5.1 %
Off-system sales 1,913,215 2,003,020 (89,805 ) (4.5 )%
Total wholesale sales 1,967,790 2,054,951 (87,161 ) (4.2 )%
Total kWh sales 8,031,680 7,949,280 82,400 1.0 %

Operating revenues (in thousands):

Non-fuel base revenues:
Retail:
Residential $ 197,165 $ 186,718 $ 10,447 5.6 %
Commercial and industrial, small 148,800 146,939 1,861 1.3 %
Commercial and industrial, large 31,455 30,220 1,235 4.1 %
Public authorities 72,163 72,837 (674 ) (0.9 )%
Total retail non-fuel base revenues 449,583 436,714 12,869 2.9 %
Wholesale:
Sales for resale 2,065 1,899 166 8.7 %
Total non-fuel base revenues 451,648 438,613 13,035 3.0 %
Fuel revenues:
Recovered from customers during the period 102,985 126,107 (23,122 ) (18.3 )%
Under (over) collection of fuel (a) (10,933 ) 1,223 (12,156 ) —
New Mexico fuel in base rates 55,765 55,643 122 0.2 %
Total fuel revenues (b) 147,817 182,973 (35,156 ) (19.2 )%
Off-system sales:
Fuel cost 41,204 61,470 (20,266 ) (33.0 )%
Shared margins 8,698 14,515 (5,817 ) (40.1 )%
Retained margins 955 1,729 (774 ) (44.8 )%
Total off-system sales 50,857 77,714 (26,857 ) (34.6 )%
Other (c) 22,645 21,662 983 4.5 %
Total operating revenues $ 672,967 $ 720,962 $ (47,995 ) (6.7 )%
(a)

Includes a Department of Energy refund related to spent fuel storage of $5.8 million and $8.3 million, respectively. 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 $7.5 million and $11.9 million, respectively.
(c) Represents revenues with no related kWh sales.
El Paso Electric Company
Nine Months Ended September 30, 2015 and 2014
Other Statistical Data
Increase (Decrease)
2015 2014 Amount Percentage

Average number of retail customers: (a)

Residential 356,388 351,813 4,575 1.3 %
Commercial and industrial, small 40,207 39,477 730 1.8 %
Commercial and industrial, large 49 49 — —
Public authorities 5,243 5,090 153 3.0 %
Total 401,887 396,429 5,458 1.4 %

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

Residential 358,421 353,640 4,781 1.4 %
Commercial and industrial, small 40,385 39,813 572 1.4 %
Commercial and industrial, large 49 49 — —
Public authorities 5,232 5,126 106 2.1 %
Total 404,087 398,628 5,459 1.4 %

Weather statistics: (b)

10-Yr Average
Heating degree days 1,206 1,042 1,247
Cooling degree days 2,695 2,535 2,574

Generation and purchased power (kWh, in thousands):

Increase (Decrease)
2015 2014 Amount Percentage
Palo Verde 3,940,370 3,926,066 14,304 0.4 %
Four Corners 473,416 436,889 36,527 8.4 %
Gas plants 3,046,330 2,884,707 161,623 5.6 %
Total generation 7,460,116 7,247,662 212,454 2.9 %
Purchased power:
Photovoltaic 223,818 174,038 49,780 28.6 %
Other 827,478 974,317 (146,839 ) (15.1 )%
Total purchased power 1,051,296 1,148,355 (97,059 ) (8.5 )%
Total available energy 8,511,412 8,396,017 115,395 1.4 %
Line losses and Company use 479,732 446,737 32,995 7.4 %
Total kWh sold 8,031,680 7,949,280 82,400 1.0 %

Palo Verde capacity factor

96.7

%

96.4

%

0.3

%

(a) The number of retail customers presented is based on the number of service locations.
(b) A degree day is recorded for each degree that the average outdoor temperature varies from a standard of 65 degrees Fahrenheit.
El Paso Electric Company
Financial Statistics
At September 30, 2015 and 2014
(In thousands, except number of shares, book value per share, and ratios)
Balance Sheet 2015 2014
Cash and cash equivalents $ 12,573 $ 13,410
Common stock equity $ 1,020,795 $ 1,015,857
Long-term debt 1,134,258 984,688
Total capitalization $ 2,155,053 $ 2,000,545
Current maturities of long-term debt $ — $ 15,000
Short-term borrowings under the revolving credit facility $ 118,693 $ 89,528
Number of shares - end of period 40,426,668 40,357,982
Book value per common share $ 25.25 $ 25.17
Common equity ratio (a) 44.9 % 48.3 %
Debt ratio 55.1 % 51.7 %
(a) The capitalization component includes common stock equity, long-term debt and the current maturities of long-term debt, and short-term borrowings under the RCF.

El Paso Electric

Media Contact

Eddie Gutierrez, 915-543-5763

[email protected]

or

Investor Relations

Lisa Budtke, 915-543-5947

[email protected]

Source: El Paso Electric

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