EXHIBIT 99.01
| El Paso Electric |  |
NEWS RELEASE
| For Immediate Release | Contact: | Investor | ||
| Date: November 2, 2006 | Media | Relations: | ||
| Teresa Souza | Steve Busser | |||
| 915/543-5823 | 915/543-5983 | |||
| Rachelle Williams | ||||
| 915/543-2257 |
El Paso Electric Announces Third Quarter Financial Results
Overview
| • | For the third quarter 2006, EE reported net income of $27.1 million, or $0.57 and $0.56 basic and diluted earnings per share, respectively. In the third quarter of 2005, EE had net income of $28.0 million, or $0.59 and $0.58 basic and diluted earnings per share, respectively. |
| • | For the nine months ended September 30, 2006, EE reported net income of $51.6 million, or $1.07 and $1.06 basic and diluted earnings per share, respectively. Net income for the nine months ended September 30, 2005 was $28.8 million, or $0.60 basic and diluted earnings per share. |
“Earnings in the quarter ended September 30, 2006 declined slightly as continued growth in retail customers was offset by unusually wet and mild summer weather and higher expenses at the Palo Verde nuclear plant.” said Gary Hedrick, President and CEO. “We were pleased to be able to repurchase approximately 1.8 million shares of our common stock under our stock repurchase programs during the quarter ended September 30, 2006.”
Earnings Summary
The table and explanations below present the major factors affecting 2006 net income relative to 2005:
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||
Pre-tax Effect | After-tax Net Income | Basic EPS | Pre-tax Effect | After-tax Net Income | Basic EPS | |||||||||||||||||||
September 30, 2005 | $ | 28,012 | $ | 0.59 | $ | 28,807 | $ | 0.60 | ||||||||||||||||
Changes in: | ||||||||||||||||||||||||
Depreciation | $ | 1,871 | 1,160 | 0.02 | $ | 15,218 | 9,435 | 0.20 | ||||||||||||||||
Wheeling revenue | 1,536 | 952 | 0.02 | 5,758 | 3,570 | 0.07 | ||||||||||||||||||
Texas fuel accrual | 1,458 | 904 | 0.02 | 1,458 | 904 | 0.02 | ||||||||||||||||||
Extinguishment of debt | 30 | 19 | — | 19,448 | 12,058 | 0.25 | ||||||||||||||||||
Income tax adjustment | — | — | — | 6,174 | 6,174 | 0.13 | ||||||||||||||||||
Taxes other than income | (2,554 | ) | (1,583 | ) | (0.03 | ) | (7,023 | ) | (4,354 | ) | (0.09 | ) | ||||||||||||
Palo Verde O&M | (1,609 | ) | (998 | ) | (0.02 | ) | (11,121 | ) | (6,895 | ) | (0.14 | ) | ||||||||||||
Fossil fuel plant maintenance | (585 | ) | (362 | ) | (0.01 | ) | (6,898 | ) | (4,277 | ) | (0.09 | ) | ||||||||||||
Base revenue | (423 | ) | (262 | ) | — | 8,221 | 5,097 | 0.11 | ||||||||||||||||
Interest on long-term debt | (25 | ) | (16 | ) | — | 5,837 | 3,619 | 0.07 | ||||||||||||||||
Other | (930 | ) | (750 | ) | (0.02 | ) | (4,038 | ) | (2,509 | ) | (0.06 | ) | ||||||||||||
September 30, 2006 | $ | 27,076 | $ | 0.57 | $ | 51,629 | $ | 1.07 | ||||||||||||||||
Third Quarter
Earnings for the quarter ended September 30, 2006 when compared to the same period last year were positively affected by:
| • | Decreased depreciation expense as a result of completing the recovery, in July 2005, of certain fresh-start accounting related assets over the period of the Texas Rate Stipulation. |
| • | Increased transmission wheeling revenues in 2006. |
| • | An accrual recorded in 2005 for a fuel disallowance in a Texas fuel reconciliation with no comparable activity in 2006. |
Earnings for the quarter ended September 30, 2006 when compared to the same period last year were negatively affected by:
| • | Increased taxes other than income taxes primarily due to increased revenue-related taxes. Revenue-related tax increases included an increase in the gross receipts tax rate in the City of El Paso in August 2005 and higher taxable revenues including the collection of fuel surcharges in Texas. |
| • | Increased Palo Verde non-fuel operations and maintenance expenses in 2006, as discussed below. |
| • | Higher maintenance costs at our gas-fired generating plants. |
| • | A decrease in base rate revenues due to unusually mild and wet summer weather in the third quarter of 2006. |
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El Paso Electric· P.O. Box 982· El Paso, Texas 79960
Nine Months Ended
Earnings for the nine months ended September 30, 2006 when compared to the same period last year were positively affected by:
| • | The loss on extinguishment of debt incurred in 2005 related to the refinancing of our first mortgage bonds in May 2005 with no comparable activity in 2006. |
| • | Decreased depreciation expense as a result of completing the recovery, in July 2005, of certain fresh-start accounting related assets over the period of the Texas Rate Stipulation. |
| • | Higher retail base revenues due to a 2.2% increase in retail kilowatt-hour sales in 2006, primarily due to growth in customers served. |
| • | A reduction in income tax expense in 2006 to recognize the change in tax rates resulting from changes in the Texas franchise (income) tax law in May 2006. This adjustment was a non-cash change in the second quarter of 2006. |
| • | Decreased interest on long-term debt in 2006 resulting from refinancing our first mortgage bonds in May 2005 and reissuing and remarketing pollution control bonds in August 2005. |
| • | Increased transmission wheeling revenues in 2006. |
| • | An accrual recorded in 2005 for a fuel disallowance in a Texas fuel reconciliation proceeding with no comparable activity in 2006. |
Earnings for the nine months ended September 30, 2006 when compared to the same period last year were negatively affected by:
| • | Increased Palo Verde non-fuel operations and maintenance expenses in 2006 as discussed below. |
| • | Increased taxes other than income taxes primarily due to increased revenue-related taxes. Revenue-related tax increases included an increase in the gross receipts tax rate in the City of El Paso in August 2005 and higher taxable revenues including the collection of fuel surcharges in Texas. |
| • | Higher maintenance costs at our gas-fired generating plants. |
Key Earnings Drivers
Our earnings are largely influenced by base revenues from retail electric customers, operations at Palo Verde, and off-systems sales margins.
Retail Base Revenues
Retail base revenues decreased by $0.4 million, pretax or 0.3% in the third quarter of 2006 compared to the same period in 2005 due to decreased revenues from residential customers. Residential base revenues decreased by $1.3 million or 2.4% in the third quarter of 2006 compared to the same period in 2005 primarily due to mild and wet summer weather in the third quarter of 2006. During the third quarter of 2006, cooling degree days were over 15% below both last year and the 10-year average. The impact of mild weather on residential sales was partially offset by a 2.6% increase in the average number of residential customers.
The decrease in residential base revenue was also partially offset by increases in base revenues from small commercial and industrial customers, large commercial and industrial customers, and sales to public authorities. The impact of the mild and wet summer weather in the third quarter of 2006 on small commercial and industrial customers was offset by an increase in sales due to a 3.4% increase in average number of customers served resulting in a 0.7% increase in revenues. Likewise, sales to other public authorities increased as a result of a 1.0% increase in the average number of customers served.
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El Paso Electric· P.O. Box 982· El Paso, Texas 79960
Retail base revenues for the nine-months ended September 30, 2006 increased $8.2 million or 2.4% largely due to a 2.7% increase in the average number of customers served. The mild weather in the third quarter of 2006 was largely offset by warmer summer weather in the second quarter of 2006. Cooling degree days for the nine months ended September 30, 2006 were approximately 3% and 1% below 2005 and the 10-year average, respectively. As a result, retail base revenues for the residential, small commercial and industrial and other public authorities customer classes increased primarily due to customer growth.
Palo Verde Operations
We own approximately 600 megawatts (undivided interest) of generating capacity in the three generating units at the Palo Verde nuclear power station. The operation of Palo Verde not only affects our ability to make off-system sales, but also impacts fuel costs to native load customers and represents a significant portion of our non-fuel operating expenses. Generation from Palo Verde declined 14.9% in the nine months ended September 30, 2006 compared to the same period in 2005 primarily due to reduced output from Palo Verde Unit 1. As previously disclosed, Palo Verde Unit 1 operated at significantly reduced power levels from December 25, 2005 until March 18, 2006 and did not operate from March 18, 2006 until early July 2006 while repairs and modifications were made to one of its shutdown cooling lines. Palo Verde Unit 1 reached full capacity on July 16, 2006. Palo Verde Unit 1 experienced a 27 day outage in September and October 2006 to replace pressurizer heaters. Palo Verde operations and maintenance costs increased $11.1 million, pretax, or $0.24 per share for the nine months ended September 30, 2006 compared to the same period last year primarily due to the repairs and modifications at Unit 1 and a scheduled Unit 3 maintenance and refueling outage in the second quarter of 2006.
Off-system Sales
We continue to 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 table below shows megawatt-hours of off-system sales and the pretax margins realized and retained by us from sales for the quarter and nine month periods ended September 30, 2006 and 2005:
| Quarter Ended September 30 | Nine Months Ended September 30 | |||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||
MWh sales | 379,279 | 360,157 | 1,055,256 | 1,193,299 | ||||||||
Total margins (in thousands) | $ | 5,495 | $ | 4,493 | $ | 13,997 | $ | 18,154 | ||||
Retained margins (in thousands) | $ | 4,440 | $ | 3,629 | $ | 11,317 | $ | 12,044 | ||||
For the quarter ended September 30, 2006, retained margins from off-system sales increased approximately $0.8 million, pretax, over the corresponding period in 2005 primarily due to the increase in off-system kilowatt-hour sales of 5.3% and an increase in the average margin per megawatt-hour. For the nine months ended September 30, 2006, our retained margins decreased approximately $0.7 million, pretax, reflecting a reduction in off-system kilowatt-hour sales of 11.6% for the current period when compared to the same period last year, primarily due to reduced output from Palo Verde. Partially offsetting the lower margins was our retention of a higher percentage of margins in Texas which increased in July 2005 to 75% compared to the previous 50% as a result of the new rate agreement with the City of El Paso. The margin sharing provisions of the rate settlement are subject to approval by the Public Utility Commission of Texas (PUCT). A decision from the PUCT is expected in December 2006 or January 2007. The Company is unable to predict how the PUCT will rule in this matter. The table below shows on a per MWh basis, revenues, costs and margins from off-system sales for the first three quarters of 2006 and 2005:
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El Paso Electric· P.O. Box 982· El Paso, Texas 79960
Quarter Ended | Average Revenue Per MWh | Average Cost of Energy Per MWh | Average Margin Per MWh | ||||||
March 31, 2005 | $ | 45.49 | $ | 24.15 | $ | 21.34 | |||
June 30, 2005 | $ | 47.45 | $ | 42.86 | $ | 4.59 | |||
September 30, 2005 | $ | 65.64 | $ | 53.16 | $ | 12.48 | |||
March 31, 2006 | $ | 68.99 | $ | 49.07 | $ | 19.92 | |||
June 30, 2006 | $ | 48.39 | $ | 45.70 | $ | 2.69 | |||
September 30, 2006 | $ | 63.97 | $ | 49.48 | $ | 14.49 | |||
Capital and Liquidity
At September 30, 2006, common stock equity comprised 47.5% of our permanent capitalization (common stock, long-term debt and the current portion of long-term debt and financing obligations).
Cash flows from operations for the nine months ended September 30, 2006 increased to $176 million from $83 million in the corresponding period in 2005 due to our ability to recover fuel costs on a current basis and the recovery of deferred fuel revenues through fuel surcharges. In the nine month period ended September 30, 2006, we collected $43.1 million of deferred fuel revenues in Texas through fuel surcharges. In the nine month period ended September 30, 2005, $44 million of fuel costs were deferred for future recovery. In Texas, fuel costs are recovered through a fixed fuel factor which may be adjusted twice a year. We record deferred fuel revenues and a deferred asset for the under-recovery of fuel costs until they can be recovered from Texas customers. In October 2005, we began recovering through a fuel surcharge $53.6 million of fuel under-recoveries over a 24-month period. In February 2006, we increased our fuel factors on an interim basis and implemented an additional fuel surcharge to recover $34 million of fuel under-recoveries, including interest through the surcharge period, over a twelve-month period.
The increase in cash flows from operations has allowed us to internally finance additional investments in electric utility plant, to repurchase common stock and to increase our balance of cash and temporary investments by $37.6 million in 2006. During the third quarter of 2006, EE repurchased 1,798,100 shares of common stock in the open market at an aggregate cost of $41.4 million. No common stock or long-term debt was repurchased during the first or second quarter of 2006. In September 2006, the Board of Directors authorized the repurchase of up to 2.3 million shares of common stock (the 2006 Plan). The shares authorized under the 2006 Plan were in addition to the shares which remained available under a buyback program previously approved by the Board of Directors in February 2004 (the 2004 Plan). During the third quarter of 2006, EE completed the repurchase of all shares available under the 2004 Plan. As of September 30, 2006, approximately 2.2 million shares remain available for repurchase under the 2006 Plan.
Conference Call
A conference call to discuss third quarter 2006 earnings is scheduled for 4 p.m. Eastern Time, Thursday, November 2, 2006. The dial-in number is 800-369-1839 with a passcode of 2006. The conference leader will be Scott Wilson, Executive Vice President and Chief Financial and Administrative Officer of EE. A replay will run through November 18, 2006. The dial-in number is 800-427-1760 and a passcode is not required for the replay. The conference call and presentation slides will be webcast live on EE’s website found athttp://www.epelectric.com. A replay of the webcast will be available shortly after the call.
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El Paso Electric· P.O. Box 982· El Paso, Texas 79960
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; (ii) determinations by regulators that may adversely affect EE’s ability to recover previously incurred fuel costs in rates; (iii) fluctuations in off-system sales margins due to uncertainty in the economy power market and the availability of generating units; (iv) disallowance of the retention of 75% of off-system sales margins by the PUCT; (v) unanticipated increased costs associated with scheduled and unscheduled outages; (vi) the cost of replacing steam generators for Palo Verde Unit 3 and other costs at Palo Verde; (vii) the costs of legal defense and possible judgments which may accrue as the result of ongoing litigation or any regulatory proceeding; (viii) deregulation of the electric utility industry; (ix) reduced wholesale margins; (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; (xii) possible warranty obligations attributable to MiraSol Energy Services, a subsidiary of EE; (xiii) a possible reduction in the reliability of our service and possible added expense in the event of a strike by, or lock out of, our union employees; 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.
Page 6 of 14
El Paso Electric· P.O. Box 982· El Paso, Texas 79960
El Paso Electric Company and Subsidiary
Consolidated Statements of Operations
Quarter Ended September 30, 2006 and 2005
(In thousands except for per share data)
(Unaudited)
| 2006 | 2005 | Variance | ||||||||||
Operating revenues, net of energy expenses: | ||||||||||||
Base revenues | $ | 130,663 | $ | 131,086 | $ | (423 | ) (a) | |||||
Off-system sales margins, net of sharing | 4,440 | 3,629 | 811 | |||||||||
Other | 5,725 | 2,519 | 3,206 | (b) | ||||||||
Operating Revenues Net of Energy Expenses | 140,828 | 137,234 | 3,594 | |||||||||
Other Operating Expenses: | ||||||||||||
Other operations and maintenance | 42,732 | 41,207 | 1,525 | |||||||||
Palo Verde operations and maintenance | 15,295 | 13,686 | 1,609 | |||||||||
Taxes other than income taxes | 14,867 | 12,313 | 2,554 | |||||||||
Loss on extinguishment of debt | — | 30 | (30 | ) | ||||||||
Other income | 472 | 397 | 75 | |||||||||
Earnings Before Interest, Taxes, Depreciation and Amortization | 68,406 | 70,395 | (1,989 | ) (c) | ||||||||
Depreciation and amortization | 16,879 | 18,750 | (1,871 | ) | ||||||||
Interest on long-term debt | 8,896 | 8,870 | 26 | |||||||||
Capitalized interest and other | (235 | ) | (1,315 | ) | 1,080 | |||||||
Income Before Income Taxes | 42,866 | 44,090 | (1,224 | ) | ||||||||
Income tax expense | 15,790 | 16,078 | (288 | ) | ||||||||
Net Income | $ | 27,076 | $ | 28,012 | $ | (936 | ) | |||||
Basic Earnings per Share | $ | 0.57 | $ | 0.59 | $ | (0.02 | ) | |||||
Diluted Earnings per Share | $ | 0.56 | $ | 0.58 | $ | (0.02 | ) | |||||
Weighted average number of shares outstanding | 47,844 | 47,827 | 17 | |||||||||
Weighted average number of shares and dilutive potential shares outstanding | 48,381 | 48,591 | (210 | ) | ||||||||
Notes: Reference is made to the narrative for explanations of significant variances.
| (a) | Base revenues exclude fuel recovered through New Mexico base rates of $8.9 million and $9.0 million, respectively. |
| (b) | Other revenues includes transmission wheeling revenues, fuel revenues in excess of energy expenses, and miscellaneous service revenues. |
| (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. |
Page 7 of 14
El Paso Electric Company and Subsidiary
Consolidated Statements of Operations
Nine Months Ended September 30, 2006 and 2005
(In thousands except for per share data)
(Unaudited)
| 2006 | 2005 | Variance | ||||||||||
Operating revenues, net of energy expenses: | ||||||||||||
Base revenues | $ | 343,372 | $ | 335,151 | $ | 8,221 | (a) | |||||
Off-system sales margins, net of sharing | 11,317 | 12,044 | (727 | ) | ||||||||
Other | 16,370 | 6,528 | 9,842 | (b) | ||||||||
Operating Revenues Net of Energy Expenses | 371,059 | 353,723 | 17,336 | |||||||||
Other Operating Expenses: | ||||||||||||
Other operations and maintenance | 129,183 | 118,095 | 11,088 | |||||||||
Palo Verde operations and maintenance | 55,540 | 44,419 | 11,121 | |||||||||
Taxes other than income taxes | 39,785 | 32,762 | 7,023 | |||||||||
Loss on extinguishments of debt | — | 19,448 | (19,448 | ) | ||||||||
Other income | 695 | 1,376 | (681 | ) | ||||||||
Earnings Before Interest, Taxes, Depreciation and Amortization | 147,246 | 140,375 | 6,871 | (c) | ||||||||
Depreciation and amortization | 50,957 | 66,175 | (15,218 | ) | ||||||||
Interest on long-term debt | 26,450 | 32,287 | (5,837 | ) | ||||||||
Capitalized interest and other | (2,342 | ) | (3,477 | ) | 1,135 | |||||||
Income Before Income Taxes | 72,181 | 45,390 | 26,791 | |||||||||
Income tax expense | 20,552 | 16,583 | 3,969 | |||||||||
Net Income | $ | 51,629 | $ | 28,807 | $ | 22,822 | ||||||
Basic Earnings per Share | $ | 1.07 | $ | 0.60 | $ | 0.47 | ||||||
Diluted Earnings per Share | $ | 1.06 | $ | 0.60 | $ | 0.46 | ||||||
Weighted average number of shares outstanding | 48,085 | 47,647 | 438 | |||||||||
Weighted average number of shares and dilutive potential shares outstanding | 48,570 | 48,183 | 387 | |||||||||
Notes: Reference is made to the narrative for explanations of significant variances.
| (a) | Base revenues exclude fuel recovered through New Mexico base rates of $23.2 million and $22.6 million, respectively. |
| (b) | Other revenues includes transmission wheeling revenues, fuel revenues in excess of energy expenses, and miscellaneous service revenues. |
| (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. |
Page 8 of 14
El Paso Electric Company and Subsidiary
Cash Flow Summary
Nine Months Ended September 30, 2006 and 2005
(In thousands and Unaudited)
| 2006 | 2005 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 51,629 | $ | 28,807 | ||||
Adjustments to reconcile net income to net cash provided by operations: | ||||||||
Depreciation and amortization of electric plant in service | 50,957 | 66,175 | ||||||
Deferred income taxes, net | 11,000 | 22,983 | ||||||
Loss on extinguishment of debt | — | 19,448 | ||||||
Other | 21,137 | 20,720 | ||||||
Change in working capital items: | ||||||||
Net recovery (deferral) of fuel revenues | 40,996 | (44,481 | ) | |||||
Other | (32 | ) | (30,932 | ) | ||||
Net cash provided by operating activities | 175,687 | 82,720 | ||||||
Cash flows from investing activities: | ||||||||
Cash additions to utility property, plant and equipment | (65,507 | ) | (58,352 | ) | ||||
Cash additions to nuclear fuel | (11,175 | ) | (9,888 | ) | ||||
Decommissioning trust funds | (6,244 | ) | (6,035 | ) | ||||
Other | (1,289 | ) | (75 | ) | ||||
Net cash used for investing activities | (84,215 | ) | (74,350 | ) | ||||
Cash flows from financing activities: | ||||||||
Repurchases of treasury stock | (41,392 | ) | — | |||||
Reacquisition and remarketing of debt | — | (381,847 | ) | |||||
Issuance of new debt | — | 397,688 | ||||||
Nuclear fuel financing obligation | 2,461 | (1,264 | ) | |||||
Other | 1,289 | (28,187 | ) (a) | |||||
Net cash provided by (used for) financing activities | (37,642 | ) | (13,610 | ) | ||||
Net increase (decrease) in cash and temporary investments | 53,830 | (5,240 | ) | |||||
Cash and temporary investments at beginning of period | 7,956 | 29,401 | ||||||
Cash and temporary investments at end of period | $ | 61,786 | $ | 24,161 | ||||
Cash Interest Payments | $ | 19,296 | $ | 35,034 | ||||
| (a) | Includes $22.4 million in 2005 to settle cash flow hedge associated with the issuance of senior notes in June 2005. |
Page 9 of 14
El Paso Electric Company and Subsidiary
Quarter Ended September 30, 2006 and 2005
Sales and Revenues Statistics
| 2006 | 2005 | Increase (Decrease) | ||||||||
MWh sales: | ||||||||||
Retail: | ||||||||||
Residential | 653,852 | 673,092 | (2.9% | ) | ||||||
Commercial and industrial, small | 629,222 | 642,342 | (2.0% | ) | ||||||
Commercial and industrial, large | 317,599 | 309,002 | 2.8% | |||||||
Sales to public authorities | 379,711 | 374,459 | 1.4% | |||||||
Total retail sales | 1,980,384 | 1,998,895 | (0.9% | ) | ||||||
Wholesale: | ||||||||||
Sales for resale | 12,323 | 12,800 | (3.7% | ) | ||||||
Off-system sales | 379,279 | 360,157 | 5.3% | |||||||
Total wholesale sales | 391,602 | 372,957 | 5.0% | |||||||
Total MWh sales | 2,371,986 | 2,371,852 | 0.0% | |||||||
Operating revenues (in thousands): | ||||||||||
Base revenues: | ||||||||||
Retail: | ||||||||||
Residential | $ | 54,884 | $ | 56,230 | (2.4% | ) | ||||
Commercial and industrial, small | 45,615 | 45,300 | 0.7% | |||||||
Commercial and industrial, large | 10,773 | 10,577 | 1.9% | |||||||
Sales to public authorities | 18,890 | 18,471 | 2.3% | |||||||
Total retail base revenues | 130,162 | 130,578 | (0.3% | ) | ||||||
Wholesale: | ||||||||||
Sales for resale | 501 | 508 | (1.4% | ) | ||||||
Total base revenues | 130,663 | 131,086 | (0.3% | ) | ||||||
Fuel revenues: | ||||||||||
Recovered from customers during the period | 65,419 | (a) | 47,852 | 36.7% | ||||||
Under/(over) collection of fuel | (6,483 | ) | 26,408 | (124.5% | ) | |||||
New Mexico fuel in base revenues | 8,925 | 8,959 | (0.4% | ) | ||||||
Total fuel revenues | 67,861 | 83,219 | (18.5% | ) | ||||||
Off-system sales | 24,263 | 23,640 | 2.6% | |||||||
Other | 6,162 | 4,086 | 50.8% | (b) | ||||||
Total operating revenues | $ | 228,949 | $ | 242,031 | (5.4% | ) | ||||
Off-system sales (in thousands): | ||||||||||
Gross margins | $ | 5,495 | $ | 4,493 | 22.3% | |||||
Retained margins | 4,440 | 3,629 | 22.3% | |||||||
Average number of retail customers: | ||||||||||
Residential | 309,299 | 301,580 | 2.6% | |||||||
Commercial and industrial, small | 32,762 | 31,677 | 3.4% | |||||||
Commercial and industrial, large | 59 | 60 | (1.7% | ) | ||||||
Sales to public authorities | 4,780 | 4,733 | 1.0% | |||||||
Total | 346,900 | 338,050 | 2.6% | |||||||
Number of retail customers (end of period): | ||||||||||
Residential | 309,996 | 302,351 | 2.5% | |||||||
Commercial and industrial, small | 32,806 | 31,781 | 3.2% | |||||||
Commercial and industrial, large | 59 | 60 | (1.7% | ) | ||||||
Sales to public authorities | 4,767 | 4,749 | 0.4% | |||||||
Total | 347,628 | 338,941 | 2.6% | |||||||
| 10 Yr Average | ||||||||||
Weather statistics | ||||||||||
Heating degree days | — | — | 1 | |||||||
Cooling degree days | 1,223 | 1,521 | 1,450 | |||||||
| (a) | Excludes $17.4 million of prior periods deferred fuel revenues recovered through Texas fuel surcharge for the three months ended September 30, 2006. |
| (b) | Primarily due to increased transmission revenues. |
Page 10 of 14
El Paso Electric Company
Quarter Ended September 30, 2006 and 2005
Generation and Purchased Power Statistics
| 2006 | 2005 | Increase (Decrease) | |||||||
Generation and purchased power (MWh): | |||||||||
Palo Verde | 1,195,808 | 1,165,294 | 2.6 | % | |||||
Four Corners | 209,090 | 206,882 | 1.1 | % | |||||
Gas plants | 663,225 | 847,711 | (21.8 | %) | |||||
Total generation | 2,068,123 | 2,219,887 | (6.8 | %) | |||||
Purchased power | 460,567 | 326,178 | 41.2 | % | |||||
Total available energy | 2,528,690 | 2,546,065 | (0.7 | %) | |||||
Line losses and Company use | 156,704 | 174,213 | (10.1 | %) | |||||
Total | 2,371,986 | 2,371,852 | 0.0 | % | |||||
Palo Verde capacity factor | 88.3 | % | 87.8 | % | |||||
Four Corners capacity factor | 91.1 | % | 90.1 | % |
Page 11 of 14
El Paso Electric Company and Subsidiary
Nine Months Ended September 30, 2006 and 2005
Sales and Revenues Statistics
| 2006 | 2005 | Increase (Decrease) | ||||||||
MWh sales: | ||||||||||
Retail: | ||||||||||
Residential | 1,643,387 | 1,608,976 | 2.1 | % | ||||||
Commercial and industrial, small | 1,659,965 | 1,631,809 | 1.7 | % | ||||||
Commercial and industrial, large | 885,747 | 883,862 | 0.2 | % | ||||||
Sales to public authorities | 1,024,746 | 977,947 | 4.8 | % | ||||||
Total retail sales | 5,213,845 | 5,102,594 | 2.2 | % | ||||||
Wholesale: | ||||||||||
Sales for resale | 36,003 | 34,016 | 5.8 | % | ||||||
Off-system sales | 1,055,256 | 1,193,299 | (11.6 | %) | ||||||
Total wholesale sales | 1,091,259 | 1,227,315 | (11.1 | %) | ||||||
Total MWh sales | 6,305,104 | 6,329,909 | (0.4 | %) | ||||||
Operating revenues (in thousands): | ||||||||||
Base revenues: | ||||||||||
Retail: | ||||||||||
Residential | $ | 137,070 | $ | 134,062 | 2.2 | % | ||||
Commercial and industrial, small | 123,057 | 120,190 | 2.4 | % | ||||||
Commercial and industrial, large | 29,977 | 29,674 | 1.0 | % | ||||||
Sales to public authorities | 51,859 | 49,885 | 4.0 | % | ||||||
Total retail base revenues | 341,963 | 333,811 | 2.4 | % | ||||||
Wholesale: | ||||||||||
Sales for resale | 1,409 | 1,340 | 5.1 | % | ||||||
Total base revenues | 343,372 | 335,151 | 2.5 | % | ||||||
Fuel revenues: | ||||||||||
Recovered from customers during the period | 173,218 | (a) | 116,070 | 49.2 | % | |||||
Under/(over) collection of fuel | 1,472 | 44,461 | (96.7 | %) | ||||||
New Mexico fuel in base revenues | 23,181 | 22,603 | 2.6 | % | ||||||
Total fuel revenues | 197,871 | 183,134 | 8.0 | % | ||||||
Off-system sales | 64,964 | 62,024 | 4.7 | % | ||||||
Other | 16,967 | 10,207 | 66.2 | %(b) | ||||||
Total operating revenues | $ | 623,174 | $ | 590,516 | 5.5 | % | ||||
Off-system sales (in thousands): | ||||||||||
Gross margins | $ | 13,997 | $ | 18,154 | (22.9 | %) | ||||
Retained margins | 11,317 | 12,044 | (6.0 | %) | ||||||
Average number of retail customers: | ||||||||||
Residential | 307,553 | 299,641 | 2.6 | % | ||||||
Commercial and industrial, small | 32,483 | 31,462 | 3.2 | % | ||||||
Commercial and industrial, large | 58 | 59 | (1.7 | %) | ||||||
Sales to public authorities | 4,800 | 4,618 | 3.9 | % | ||||||
Total | 344,894 | 335,780 | 2.7 | % | ||||||
Number of retail customers (end of period): | ||||||||||
Residential | 309,996 | 302,351 | 2.5 | % | ||||||
Commercial and industrial, small | 32,806 | 31,781 | 3.2 | % | ||||||
Commercial and industrial, large | 59 | 60 | (1.7 | %) | ||||||
Sales to public authorities | 4,767 | 4,749 | 0.4 | % | ||||||
Total | 347,628 | 338,941 | 2.6 | % | ||||||
| 10 Yr Average | ||||||||||
Weather statistics | ||||||||||
Heating degree days | 1,040 | 1,291 | 1,309 | |||||||
Cooling degree days | 2,385 | 2,465 | 2,420 | |||||||
| (a) | Excludes $43.1 million of prior periods deferred fuel revenues recovered through Texas fuel surcharge for the nine months ended September 30, 2006. |
| (b) | Primarily due to increased transmission revenues. |
Page 12 of 14
El Paso Electric Company
Nine Months Ended September 30, 2006 and 2005
Generation and Purchased Power Statistics
| 2006 | 2005 | Increase (Decrease) | |||||||
Generation and purchased power (MWh): | |||||||||
Palo Verde | 2,779,666 | 3,265,382 | (14.9 | %) | |||||
Four Corners | 627,722 | 584,957 | 7.3 | % | |||||
Gas plants | 1,701,301 | 2,026,943 | (16.1 | %) | |||||
Total generation | 5,108,689 | 5,877,282 | (13.1 | %) | |||||
Purchased power | 1,689,201 | 958,133 | 76.3 | % | |||||
Total available energy | 6,797,890 | 6,835,415 | (0.5 | %) | |||||
Line losses and Company use | 492,786 | 505,506 | (2.5 | %) | |||||
Total | 6,305,104 | 6,329,909 | (0.4 | %) | |||||
Palo Verde capacity factor | 69.5 | % | 82.9 | % | |||||
Four Corners capactiy factor | 90.7 | % | 86.5 | % |
Page 13 of 14
El Paso Electric Company and Subsidiary
Financial Statistics
At September 30, 2006 and 2005
(In thousands, except number of shares, book value per share, and ratios)
Balance Sheet | 2006 | 2005 | ||||||
Cash and Temporary Investments | $ | 61,786 | $ | 24,161 | ||||
Common Stock Equity | $ | 575,303 | $ | 552,022 | ||||
Long-term Debt, Net of Current Portion | 590,858 | 590,832 | ||||||
Financing Obligations, Net of Current Portion | 22,711 | 19,092 | ||||||
Total Capitalization | $ | 1,188,872 | $ | 1,161,946 | ||||
Current Portion of Long-Term Debt and Financing Obligations | $ | 21,655 | $ | 20,842 | ||||
Number of Shares - End of Period | 46,679,740 | 47,985,765 | ||||||
Book Value Per Common Share | $ | 12.32 | $ | 11.50 | ||||
Common Equity Ratio | 47.5 | % | 46.7 | % | ||||
Debt Ratio | 52.5 | % | 53.3 | % | ||||
Page 14 of 14