Exhibit 99.01

NEWS RELEASE

 

For Immediate Release Date: November 2, 2011		Contact: Media Teresa Souza 915/543-5823		Investor Relations: Steve Busser 915/543-5983 Rachelle Williams 915/543-2257

El Paso Electric Announces Third Quarter Financial Results

Overview

 

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For the third quarter of 2011, EE reported net income of $58.3 million, or $1.41 and $1.40 basic and diluted earnings per share. In the third quarter of 2010, EE reported net income of $60.2 million, or $1.40 and $1.39 basic and diluted earnings per share, and income before extraordinary item of $49.9 million, or $1.16 and $1.15 basic and diluted earnings per share, respectively.

 

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For the nine months ended September 30, 2011, EE reported net income of $98.1 million, or $2.33 and $2.32 basic and diluted earnings per share. Net income for the nine months ended September 30, 2010 was $93.1 million, or $2.14 and $2.13 basic and diluted earnings per share, and income before extraordinary item for the same period was $82.9 million, or $1.90 and $1.89 basic and diluted earnings per share, respectively.

“Our strong third quarter results are primarily the result of the hotter than normal summer weather our service territory has experienced this year,” said David W. Stevens, Chief Executive Officer. “We established a new native peak record of 1,711MW in August 2011 which is almost a 6% increase over the 2010 peak. The third quarter 2011 results also included a favorable $4.5 million settlement in a dispute over transmission services.”

 

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El Paso Electric — P.O. Box 982 — El Paso, Texas 79960

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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												Nine Months Ended
		Pre-Tax Effect				After-Tax Income				Basic EPS				Pre-Tax Effect				After-Tax Income				Basic EPS
September 30, 2010						$	49,896			$	1.16							$	82,852			$	1.90
Changes in:
Retail non-fuel base revenue		$	13,566				8,547				0.21			$	31,527				19,862				0.47
Transmission revenues			3,430				2,161				0.05				4,721				2,974				0.07
Outside services			490				309				0.01				(2,169	)			(1,367	)			(0.03	)
AFUDC			(1,761	)			(1,486	)			(0.04	)			(2,018	)			(1,717	)			(0.04	)
Taxes other than income taxes			(503	)			(317	)			(0.01	)			(2,093	)			(1,319	)			(0.03	)
Deregulated Palo Verde Unit 3 revenues			(101	)			(64	)			—				(1,596	)			(1,006	)			(0.03	)
Retained off-system sales margins			(66	)			(41	)			—				(6,089	)			(3,836	)			(0.09	)
Elimination of Medicare Part D tax benefit			—				—				—				—				4,787				0.11
Other							(684	)			(0.02	)							(3,144	)			(0.08	)
September 30, 2011						$	58,321				1.36							$	98,086				2.25
Change in weighted average number of shares											0.05												0.08
September 30, 2011										$	1.41											$	2.33

Third Quarter 2011

Earnings for the quarter ended September 30, 2011 when compared to the same period last year were positively affected by:

 

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Increased retail non-fuel base revenues due to a 3.9% increase in kWh sales to retail customers reflecting hotter summer weather in the third quarter of 2011 as compared to the same period in 2010 and 1.7% growth in the average number of customers served. During the three months ended September 30, 2011, cooling degree days were over 11% above the same period in 2010 and 27% above the 30-year average.

 

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Increased transmission revenues due to a settlement agreement with Tucson Electric Power Company involving a transmission dispute that resulted in one-time income of $4.5 million, pre-tax.

 

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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 $0.05.

Earnings for the quarter ended September 30, 2011 when compared to the same period last year was negatively affected by:

 

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

 

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El Paso Electric — P.O. Box 982 — El Paso, Texas 79960

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Year to Date

Earnings for the nine months ended September 30, 2011 when compared to the same period last year, were positively affected by:

 

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Increased retail non-fuel base revenues due to a 3.2% increase in kWh sales to retail customers primarily due to hotter summer weather and a 1.5% growth in the average number of customers served in 2011 as compared to the same period in 2010. During the nine months ended September 30, 2011, cooling degree days were 15% above the same period in 2010 and 29% above the 30-year average. In addition, the increase reflects higher non-fuel base summer rates for Texas customers.

 

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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.

 

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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 $0.08.

 

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Increased transmission revenues primarily due to a settlement agreement with Tucson Electric Power Company involving a transmission dispute that resulted in one-time income of $4.1 million, pre-tax.

Earnings for the nine months ended September 30, 2011 when compared to the same period last year were negatively affected by:

 

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Decreased off-system sales margins 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. Off-system sales margins were negatively impacted by power purchases required for system reliability during extremely cold weather in February 2011 and when wildfires in June 2011 threatened key transmission lines in eastern Arizona and western New Mexico. The cost of this power was reserved pending a request for recovery.

 

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

 

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Increased outside services primarily related to regulatory activities and additional outside services related to software systems support and improvements.

 

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Increased taxes other than income taxes due to increased revenue-related taxes in Texas and estimated property taxes.

 

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Decreased deregulated Palo Verde Unit 3 revenues in 2011 due to lower proxy market prices, increased nuclear fuel prices, and decreased generation at Palo Verde Unit 3 in 2011.

Retail Non-fuel Base Revenues

Retail non-fuel base revenues increased by $13.6 million, pre-tax, or 7.6% in the third quarter of 2011 compared to the same period in 2010 primarily due to a 3.9% increase in kWh sales to retail customers reflecting hotter summer weather and 1.7% growth in the average number of customers served. During the three months ended September 30, 2011, cooling degree days were over 11% above the same period in 2010 and 27% above the 30-year average. KWh sales to residential customers and small commercial and industrial customers increased 9.8% and 3.9%, respectively, in the third quarter. 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 10 of the Release.

For the nine months ended September 30, 2011, retail non-fuel base revenues increased by $31.5 million, pre-tax, or 7.5% compared to the same period in 2010 primarily due to a 3.2% increase in kWh sales to retail customers, reflecting hotter summer weather, and 1.5% growth in the average number of customers served.

 

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El Paso Electric — P.O. Box 982 — El Paso, Texas 79960

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During the nine months ended September 30, 2011, cooling degree days were 15% above the same period in 2010 and 29% above the 30-year average. KWh sales to residential customers and small commercial and industrial customers increased 6.1% and 3.1%, respectively, during the nine months ended September 30, 2011 compared to the same period last year. The increase in retail non-fuel base revenues is also due to the seasonal non-fuel base rates which became effective July 1, 2010 in Texas and which are higher in the summer months of May to October and lower in the winter months of November to April. 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. 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. Off-system sales margins were negatively impacted by power purchases required for system reliability during extremely cold weather in February 2011 and when wildfires in June 2011 threatened key transmission lines in eastern Arizona and western New Mexico. We reserved for the cost of this power pending a request for recovery. Retained margins from off-system sales, including the reliability purchases, decreased approximately $0.1 million and $6.1 million for the three and nine months ended September 30, 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 and third quarters of 2011 combined, the extension of the operating licenses reduced depreciation and amortization expense by approximately $5.3 million and reduced the accretion expense on the Palo Verde asset retirement obligation by approximately $2.0 million.

Rate Matters

On October 4, 2011, the El Paso City Council (the “City”) adopted a resolution ordering us to show cause why our base rates for electric service within the city limits of El Paso should not be lowered (the “Show Cause Order”) which the Company has appealed as discussed below. Pursuant to the Show Cause Order, we would be required to file a rate case with the City no later than February 1, 2012. The City would then have until the 185^th day after the date that we file our rate case to make a determination regarding our base rates in the City of El Paso. On the same date we file our rate case with the City for rates inside the city limits, we plan to file a rate case with the other cities in our Texas service area and with the Public Utility Commission of Texas (PUCT) for rates outside any city limits.

The City conducted a hearing on temporary rates on October 25, 2011, and has scheduled an additional hearing on November 15, 2011. The revenues collected under temporary rates will be subject to true-up to the final rates approved by the PUCT. The ultimate authority to set our Texas electric rates is vested in the PUCT.

On October 27, 2011, we filed an appeal with the PUCT to set aside the City’s Show Cause Order or in the alternative issue an order staying the City’s Show Cause Order and corresponding jurisdictional deadlines until the City can establish that it has complied with Texas statutes. We intend to vigorously defend our rates, which were lawfully approved only last year by the City and the PUCT as just and reasonable. If the City succeeds in

 

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El Paso Electric — P.O. Box 982 — El Paso, Texas 79960

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implementing lower rates, 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 September 30, 2011, common stock equity represented 48.4% of our capitalization (common stock equity, long-term debt and the current maturities of long-term debt, and short-term borrowings under the revolving credit facility). At September 30, 2011, we had a balance of $7.7 million in cash and cash equivalents.

Cash flows from operations for the nine months ended September 30, 2011 were $178.9 million compared to $163.6 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, 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 nine months ended September 30, 2011, the Company had an under-recovery of fuel costs, net of refunds, of $29.6 million as compared to an under-recovery, net of refunds, of $1.3 million during the nine months ended September 30, 2010. At September 30, 2011, we had a net fuel under-recovery balance of $10.6 million, including an under-recovery balance of $12.2 million in Texas partially offset by an over-recovery balance of $1.6 million in New Mexico.

During the nine months ended September 30, 2011, our primary capital requirements were for the construction and purchase of electric utility plant, purchases of nuclear fuel, the repurchase of common stock, and payment of common stock dividends. Capital requirements for new electric plant were $129.7 million for the nine months ended September 30, 2011 compared to $124.8 million for the nine months ended September 30, 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 nine months ended September 30, 2011, we repurchased 2,502,066 shares of common stock in the open market at an aggregate cost of $77.3 million including 1,591,317 shares repurchased in the third quarter at an aggregate cost of $51.0 million as authorized under both our previously authorized plan and under the 2011 Plan. As of September 30, 2011, 674,205 shares remain available for repurchase under the 2011 Plan. The Company currently expects to continue to 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. The revolving credit facility has a term ending September 2014. The total amount borrowed for nuclear fuel by RGRT was $127.8 million at September 30, 2011 of which $17.8 million had been borrowed under the revolving credit facility and $110 million was borrowed through senior notes. At September 30, 2010, the total amount borrowed for nuclear fuel by RGRT was $124.1 million of which $14.1 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. No borrowings were outstanding at September 30, 2011 under the revolving credit facility for working capital and general corporate purposes.

On September 30, 2011, we paid $9.2 million of quarterly dividends to shareholders. We have paid a total of $18.4 million in cash dividends during the nine months ended September 30, 2011. We expect to pay total cash dividends of approximately $27.6 million during 2011.

 

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El Paso Electric — P.O. Box 982 — El Paso, Texas 79960

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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 may seek to issue debt in the capital markets to finance capital requirements.

In October 2011, we received approval from the New Mexico Public Regulation Commission and the Federal Energy Regulatory Commission to amend and restate our $200 million revolving credit facility, which includes an option, subject to lenders’ approval, to expand the size to $300 million, and to incrementally issue up to $300 million of long-term debt as and when needed. The amended and restated facility will reduce our borrowing costs and extend the maturity from September 2014 to September 2016. 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.

2011 Earnings Guidance

We are revising our 2011 earnings guidance to a range of $2.40 to $2.60 per basic share from a range of $2.20 to $2.50 per basic share.

Conference Call

A conference call to discuss third quarter 2011 earnings is scheduled for 10:30 a.m. Eastern Time, November 2, 2011. The dial-in number is 888-466-4587 with a conference ID of 4631255. The conference leader will be Steven P. Busser, Vice President – Treasurer of EE. A replay will run through November 16, 2011 with a dial-in number of 888-203-1112 and a conference ID of 4631255. 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) 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) our rates in El Paso following the El Paso City Council’s resolution ordering EE to show cause why our base rates for El Paso customers should not be lower; (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.

 

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El Paso Electric — P.O. Box 982 — El Paso, Texas 79960

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El Paso Electric Company and Subsidiary

Consolidated Statements of Operations

Quarter Ended September 30, 2011 and 2010

(In thousands except for per share data)

(Unaudited)

 

		2011				2010				Variance
Operating revenues, net of energy expenses:
Base revenues		$	192,948			$	179,641			$	13,307	(a)
Off-system sales margins, net of sharing			157				223				(66	)
Deregulated Palo Verde Unit 3 revenues			3,790				3,891				(101	)
Other			11,859				8,064				3,795	(b)
Operating Revenues Net of Energy Expenses			208,754				191,819				16,935
Other operating expenses:
Other operations and maintenance			48,715				49,189				(474	)
Palo Verde operations and maintenance			20,881				21,722				(841	)
Taxes other than income taxes			16,628				16,125				503
Other income (deductions)			83				1,210				(1,127	)
Earnings Before Interest, Taxes, Depreciation and Amortization			122,613				105,993				16,620	(c)
Depreciation and amortization			20,315				20,685				(370	)
Interest on long-term debt			13,571				12,936				635
AFUDC and capitalized interest			3,505				4,744				(1,239	)
Other interest expense			243				48				195
Income Before Income Taxes and Extraordinary Item			91,989				77,068				14,921
Income tax expense			33,668				27,172				6,496
Income Before Extraordinary Item			58,321				49,896				8,425
Extraordinary gain related to Texas regulatory assets, net of income tax expense of $5,769			—				10,286				(10,286	)
Net Income		$	58,321			$	60,182			$	(1,861	)
Basic Earnings per Share:
Income before extraordinary item		$	1.41			$	1.16			$	0.25
Extraordinary gain related to Texas regulatory assets, net of tax			—				0.24				(0.24	)
Net Income		$	1.41			$	1.40			$	0.01
Diluted Earnings per Share:
Income before extraordinary item		$	1.40			$	1.15			$	0.25
Extraordinary gain related to Texas regulatory assets, net of tax			—				0.24				(0.24	)
Net Income		$	1.40			$	1.39			$	0.01
Dividends declared per share of common stock		$	0.44			$	—			$	0.44
Weighted average number of shares outstanding			41,308				42,921				(1,613	)
Weighted average number of shares and dilutive potential shares outstanding			41,565				43,104				(1,539	)

 

(a)	Base revenues exclude fuel recovered through New Mexico base rates of $23.6 million and $22.3 million, respectively.

(b)	Includes $4.5 million related to the 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.

 

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El Paso Electric Company and Subsidiary

Consolidated Statements of Operations

Nine Months Ended September 30, 2011 and 2010

(In thousands except for per share data)

(Unaudited)

 

		2011				2010				Variance
Operating revenues, net of energy expenses:
Base revenues		$	452,592			$	420,863			$	31,729	(a)
Off-system sales margins, net of sharing			(697	)			5,392				(6,089	)
Deregulated Palo Verde Unit 3 revenues			11,644				13,240				(1,596	)
Other			25,084				19,645				5,439	(b)
Operating Revenues Net of Energy Expenses			488,623				459,140				29,483
Other operating expenses:
Other operations and maintenance			140,061				133,064				6,997
Palo Verde operations and maintenance			69,847				69,724				123
Taxes other than income taxes			43,131				41,038				2,093
Other income (deductions)			2,916				2,413				503
Earnings Before Interest, Taxes, Depreciation and Amortization			238,500				217,727				20,773	(c)
Depreciation and amortization			60,775				60,136				639
Interest on long-term debt			40,595				37,378				3,217
AFUDC and capitalized interest			14,142				13,578				564
Other interest expense			777				113				664
Income Before Income Taxes and Extraordinary Item			150,495				133,678				16,817
Income tax expense			52,409				50,826				1,583	(d)
Income Before Extraordinary Item			98,086				82,852				15,234
Extraordinary gain related to Texas regulatory assets, net of income tax expense of $5,769			—				10,286				(10,286	)
Net Income		$	98,086			$	93,138			$	4,948
Basic Earnings per Share:
Income before extraordinary item		$	2.33			$	1.90			$	0.43
Extraordinary gain related to Texas regulatory assets, net of tax			—				0.24				(0.24	)
Net Income		$	2.33			$	2.14			$	0.19
Diluted Earnings per Share:
Income before extraordinary item		$	2.32			$	1.89			$	0.43
Extraordinary gain related to Texas regulatory assets, net of tax			—				0.24				(0.24	)
Net Income		$	2.32			$	2.13			$	0.19
Dividends declared per share of common stock		$	0.44			$	—			$	0.44
Weighted average number of shares outstanding			41,819				43,370				(1,551	)
Weighted average number of shares and dilutive potential shares outstanding			42,051				43,505				(1,454	)

 

(a)	Base revenues exclude fuel recovered through New Mexico base rates of $57.2 million and $55.9 million, respectively.

(b)	Includes $4.1 million related to the 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 nine months ended September 30, 2010 includes a charge of $4,787 related to the Patient Protection and Affordable Care Act which eliminated of the tax benefit associated with the Medicare Part D subsidies beginning in 2013.

 

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El Paso Electric Company and Subsidiary

Cash Flow Summary

Nine Months Ended September 30, 2011 and 2010

(In thousands and Unaudited)

 

		2011				2010
Cash flows from operating activities:
Net income		$	98,086			$	93,138
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization of electric plant in service			60,775				60,136
Extraordinary gain on Texas regulatory assets, net of tax			—				(10,286	)
Deferred income taxes, net			46,338				17,088
Other			38,438				27,701
Change in working capital items:
Net recovery (deferral) of fuel revenues			(29,608	)			(1,322	)
Accounts receivable			(43,709	)			(42,661	)
Other			8,555				19,810
Net cash provided by operating activities			178,875				163,604
Cash flows from investing activities:
Cash additions to utility property, plant and equipment			(129,651	)			(124,839	)
Cash additions to nuclear fuel			(33,925	)			(33,889	)
Decommissioning trust funds			(9,473	)			(8,271	)
Other			(7,065	)			(5,877	)
Net cash used for investing activities			(180,114	)			(172,876	)
Cash flows from financing activities:
Repurchase of common stock			(64,783	)			(30,217	)
Dividends paid			(18,415	)			—
Borrowings under the revolving credit facility			13,089				(92,898	)
Proceeds from issuance of long-term private placement notes			—				110,000
Other			(92	)			(2,455	)
Net cash used for financing activities			(70,201	)			(15,570	)
Net decrease in cash and cash equivalents			(71,440	)			(24,842	)
Cash and cash equivalents at beginning of period			79,184				91,790
Cash and cash equivalents at end of period		$	7,744			$	66,948

 

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El Paso Electric Company and Subsidiary

Quarter Ended September 30, 2011 and 2010

Sales and Revenues Statistics

 

										Increase (Decrease)
		2011				2010				Amount				Percentage
MWh sales:
Retail:
Residential			899,708				819,294				80,414				9.8	%
Commercial and industrial, small			703,479				676,894				26,585				3.9	%
Commercial and industrial, large			279,339				300,845				(21,506	)			(7.1	%)
Sales to public authorities			452,370				450,895				1,475				0.3	%
Total retail sales			2,334,896				2,247,928				86,968				3.9	%
Wholesale:
Sales for resale			21,046				17,019				4,027				23.7	%
Off-system sales			726,753				804,558				(77,805	)			(9.7	%)
Total wholesale sales			747,799				821,577				(73,778	)			(9.0	%)
Total MWh sales			3,082,695				3,069,505				13,190				0.4	%
Operating revenues (in thousands):
Non-fuel base revenues:
Retail:
Residential		$	82,465			$	75,411			$	7,054				9.4	%
Commercial and industrial, small			64,929				61,857				3,072				5.0	%
Commercial and industrial, large			13,597				13,126				471				3.6	%
Sales to public authorities			31,570				28,601				2,969				10.4	%
Total retail non-fuel base revenues			192,561				178,995				13,566				7.6	%
Wholesale:
Sales for resale			387				646				(259	)			(40.1	%)
Total non-fuel base revenues			192,948				179,641				13,307				7.4	%
Fuel revenues (a):
Recovered from customers during the period (b)			49,636				52,600				(2,964	)			(5.6	%)
Under (over) collection of fuel			3,786				(9,703	)			13,489				—
New Mexico fuel in base rates			23,626				22,312				1,314				5.9	%
Total fuel revenues			77,048				65,209				11,839				18.2	%
Off-system sales:
Fuel cost			23,258				26,119				(2,861	)			(11.0	%)
Shared margins			1,310				1,879				(569	)			(30.3	%)
Retained margins			157				223				(66	)			(29.6	%)
Total off-system sales			24,725				28,221				(3,496	)			(12.4	%)
Other (c)			12,912				7,271				5,641				77.6	%
Total operating revenues		$	307,633			$	280,342			$	27,291				9.7	%
Average number of retail customers:
Residential			336,738				332,920				3,818				1.1	%
Commercial and industrial, small			38,292				36,150				2,142				5.9	%
Commercial and industrial, large			51				48				3				6.3	%
Sales to public authorities			4,637				4,420				217				4.9	%
Total			379,718				373,538				6,180				1.7	%
Number of retail customers (end of period):
Residential			337,088				333,162				3,926				1.2	%
Commercial and industrial, small			38,441				36,592				1,849				5.1	%
Commercial and industrial, large			51				49				2				4.1	%
Sales to public authorities			4,601				4,803				(202	)			(4.2	%)
Total			380,181				374,606				5,575				1.5	%
Weather statistics											30 Yr Average
Heating degree days			—				—				3
Cooling degree days			1,787				1,603				1,406

 

(a)	Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $3.8 million and $3.9 million, respectively.

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

(c)	2011 includes $4.5 million related to the settlement of a transmission dispute with Tucson Electric Power Company.

 

Page 10 of 14

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El Paso Electric Company and Subsidiary

Quarter Ended September 30, 2011 and 2010

Generation and Purchased Power Statistics

 

										Increase (Decrease)
		2011				2010				Amount				Percentage
Generation and purchased power (MWh):
Palo Verde			1,322,790				1,375,883				(53,093	)			(3.9	%)
Four Corners			174,628				173,298				1,330				0.8	%
Gas plants			1,190,045				957,079				232,966				24.3	%
Total generation			2,687,463				2,506,260				181,203				7.2	%
Purchased power			616,113				768,878				(152,765	)			(19.9	%)
Total available energy			3,303,576				3,275,138				28,438				0.9	%
Line losses and Company use			220,881				205,633				15,248				7.4	%
Total MWh sold			3,082,695				3,069,505				13,190				0.4	%
Palo Verde capacity factor			96.3	%			100.2	%			(3.9	%)
Four Corners capacity factor			79.6	%			75.5	%			4.1	%

 

Page 11 of 14

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El Paso Electric Company and Subsidiary

Nine Months Ended September 30, 2011 and 2010

Sales and Revenues Statistics

 

										Increase (Decrease)
		2011				2010				Amount				Percentage
MWh sales:
Retail:
Residential			2,078,247				1,958,670				119,577				6.1	%
Commercial and industrial, small			1,816,081				1,762,224				53,857				3.1	%
Commercial and industrial, large			817,549				826,553				(9,004	)			(1.1	%)
Sales to public authorities			1,200,597				1,180,222				20,375				1.7	%
Total retail sales			5,912,474				5,727,669				184,805				3.2	%
Wholesale:
Sales for resale			52,045				43,534				8,511				19.6	%
Off-system sales			2,162,793				2,163,766				(973	)			—
Total wholesale sales			2,214,838				2,207,300				7,538				0.3	%
Total MWh sales			8,127,312				7,934,969				192,343				2.4	%
Operating revenues (in thousands):
Non-fuel base revenues:
Retail:
Residential		$	186,376			$	170,399			$	15,977				9.4	%
Commercial and industrial, small			155,203				148,294				6,909				4.7	%
Commercial and industrial, large			34,703				33,947				756				2.2	%
Sales to public authorities			74,588				66,703				7,885				11.8	%
Total retail non-fuel base revenues			450,870				419,343				31,527				7.5	%
Wholesale:
Sales for resale			1,722				1,520				202				13.3	%
Total non-fuel base revenues			452,592				420,863				31,729				7.5	%
Fuel revenues (a):
Recovered from customers during the period (b)			109,171				135,881				(26,710	)			(19.7	%)
Under (over) collection of fuel			17,524				(21,795	)			39,319				—
New Mexico fuel in base rates			57,151				55,894				1,257				2.2	%
Total fuel revenues			183,846				169,980				13,866				8.2	%
Off-system sales:
Fuel cost			60,777				75,642				(14,865	)			(19.7	%)
Shared margins			2,722				3,600				(878	)			(24.4	%)
Retained margins			(697	)			5,392				(6,089	)			—
Total off-system sales			62,802				84,634				(21,832	)			(25.8	%)
Other (c)			27,110				20,430				6,680				32.7	%
Total operating revenues		$	726,350			$	695,907			$	30,443				4.4	%
Average number of retail customers:
Residential			335,792				331,210				4,582				1.4	%
Commercial and industrial, small			37,484				36,479				1,005				2.8	%
Commercial and industrial, large			50				49				1				2.0	%
Sales to public authorities			4,675				4,695				(20	)			(0.4	%)
Total			378,001				372,433				5,568				1.5	%
Number of retail customers (end of period):
Residential			337,088				333,162				3,926				1.2	%
Commercial and industrial, small			38,441				36,592				1,849				5.1	%
Commercial and industrial, large			51				49				2				4.1	%
Sales to public authorities			4,601				4,803				(202	)			(4.2	%)
Total			380,181				374,606				5,575				1.5	%
Weather statistics											30 Yr Average
Heating degree days			1,305				1,478				1,376
Cooling degree days			2,997				2,607				2,317

 

(a)	Includes deregulated Palo Verde Unit 3 revenues for the New Mexico jurisdiction of $11.6 million and $13.2 million, respectively.

(b)	Excludes $12.0 million and $23.3 million of refunds in 2011 and 2010, respectively, related to prior periods Texas deferred fuel revenues.

(c)	2011 includes $4.1 million related to the settlement of a transmission dispute with Tucson Electric Power Company.

 

 

Page 12 of 14

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El Paso Electric Company & Subsidiary

Nine Months Ended September 30, 2011 and 2010

Generation and Purchased Power Statistics

 

										Increase (Decrease)
		2011				2010				Amount				Percentage
Generation and purchased power (MWh):
Palo Verde			3,834,651				3,748,164				86,487				2.3	%
Four Corners			486,607				461,332				25,275				5.5	%
Gas plants (a)			2,663,827				2,276,456				387,371				17.0	%
Total generation			6,985,085				6,485,952				499,133				7.7	%
Purchased power			1,677,081				1,924,621				(247,540	)			(12.9	%)
Total available energy			8,662,166				8,410,573				251,593				3.0	%
Line losses and Company use			534,854				475,604				59,250				12.5	%
Total			8,127,312				7,934,969				192,343				2.4	%
Palo Verde capacity factor			94.1	%			92.0	%			2.1	%
Four Corners capacity factor			76.8	%			68.4	%			8.4	%

 

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

 

Page 13 of 14

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El Paso Electric Company and Subsidiary

Financial Statistics

At September 30, 2011 and 2010

(In thousands, except number of shares, book value per share, and ratios)

 

Balance Sheet		2011				2010
Cash and cash equivalents		$	7,744			$	66,948
Common stock equity		$	812,852			$	790,763
Long-term debt			816,484				849,733
Total capitalization		$	1,629,336			$	1,640,496
Current maturities of long-term debt		$	33,300			$	—
Short-term borrowings under the revolving credit facility		$	17,793			$	14,100
Number of shares - end of period			40,249,088				42,612,026
Book value per common share		$	20.20			$	18.56
Common equity ratio			48.4	%			47.8	%
Debt ratio			51.6	%			52.2	%

 

Page 14 of 14