El Paso Electric Announces First Quarter Financial Results

Apr 23, 2001, 01:00 ET from El Paso Electric Company

    EL PASO, Texas, April 23 /PRNewswire Interactive News Release/ -- El Paso
 Electric (Amex:   EE) ("EPE") today reported net income before extraordinary
 item of $18.6 million, representing $0.36 basic and diluted earnings per
 share, for the quarter ended March 31, 2001.  This compares with net income
 before extraordinary item of $8.6 million, or $0.16 and $0.15 basic and
 diluted earnings per share, respectively, for the same period a year ago.
     The increase of $0.21 diluted earnings per share before extraordinary item
 is primarily attributable to the combined after-tax effects of:
 
 
                                                                   Diluted
                                                    Income         Earnings
                                                   Variance       Per Share
                                                (In thousands)
 
     Economy sales margins                         $11,687          $0.22
     Retail kWh sales                                3,315           0.06
     Energy expenses not recovered in EPE's
       New Mexico service area                      (3,372)         (0.06)
     Maintenance expense due to scheduled outages   (1,824)         (0.04)
     Repurchases of common stock                       ---           0.03
     Other                                             232            ---
                                                   $10,038          $0.21
 
 
     EPE's fuel contracts with variable-pricing provisions, as well as
 substantially all of its purchased power requirements, are exposed to
 fluctuations in prices due to unpredictable factors, including weather, which
 impact supply and demand.  This exposure is substantially mitigated through
 the operation of the Texas Commission rules and EPE's energy cost recovery
 clauses ("fuel clauses") in certain wholesale rates.  Under these rules and
 fuel clauses, energy costs are passed through to customers.  However, in EPE's
 New Mexico service area pursuant to a rate freeze which expires at the end of
 April 2001, and under certain wholesale contracts, energy costs are included
 in base rates and are not subject to periodic reconciliation or adjustment for
 fluctuations in such costs.  The average energy costs incurred for these
 customers currently exceed the energy costs that were incorporated into the
 applicable rates.  EPE will make a filing in its New Mexico jurisdiction by
 the end of April 2001 seeking to reflect these increased gas and purchased
 power costs in its New Mexico rates.  Approximately 40% of EPE's estimated gas
 requirements for the next nine months will be acquired through contracts with
 fixed-pricing provisions and the remaining requirements will be acquired
 through contracts with variable-pricing provisions.  Based on these
 projections and assuming an average variable price of $5.67 per mmbtu, EPE
 could incur increased gas expenses which may not be recovered from New Mexico
 and certain wholesale customers over the next nine months of approximately
 $2.2 million, net of tax, as compared to actual gas expenses incurred in the
 comparable nine month period in 2000.
     As reported previously, EPE made minimal sales directly to the California
 ISO during early December 2000 and has an outstanding receivable as of
 March 31, 2001 of approximately $0.2 million from the California ISO.  EPE
 will evaluate future sales to the California market and will make such sales
 in a manner which minimizes the credit risk and which takes into account the
 credit worthiness of the counter party.
     Net income was $18.6 million for the quarter ended March 31, 2001 compared
 to $8.0 million for the same period in 2000.  Basic earnings per share for the
 quarter ended March 31, 2001 was $0.36 compared to $0.15 for the same period
 in 2000.  Diluted earnings per share for the quarter ended March 31, 2001 was
 $0.36 compared to $0.14 for the same period in 2000.
     EPE's Board of Directors previously approved two stock repurchase programs
 allowing EPE to purchase up to twelve million of its outstanding shares of
 common stock.  As of April 13, 2001, EPE had repurchased 9,833,929 shares for
 approximately $104.7 million, including commissions.  EPE will make purchases
 primarily in the open market at prevailing prices and will also engage in
 private transactions, if appropriate.  Any repurchased shares will be
 available for issuance under employee benefit and stock option plans, or may
 be retired.
     From June 1, 1996 through March 31, 2001, EPE repurchased approximately
 $353.7 million of first mortgage bonds as part of an aggressive deleveraging
 program.  No first mortgage bonds were repurchased during the first quarter of
 2001.  EPE will repay the remaining $34.6 million of Series B First Mortgage
 Bonds at their maturity on May 1, 2001 from cash on hand.  Common stock equity
 as a percentage of capitalization, excluding current maturities of long-term
 debt and financing and capital lease obligations, has increased from 19% at
 June 30, 1996 to 37% at March 31, 2001.  The amount and timing of future
 repurchases of first mortgage bonds and common stock will depend upon market
 conditions, the availability of cash to meet bond maturities and other
 operating and capital requirements, and the comparative economic value of
 alternative uses of cash.
     Earnings before interest, income taxes, depreciation and amortization
 ("EBITDA") for the three months ended March 31, 2001, compared to the same
 period in 2000, are as follows (in thousands):
 
 
     Three months ended March 31, 2000                          $53,499
     Changes in:
       Economy sales margins                                     19,158
       Retail kWh sales                                           5,435
       Energy expenses not recovered in EPE's New Mexico
        service area                                             (5,528)
       Maintenance expense due to scheduled outages              (2,990)
       Other                                                        600
     Three months ended March 31, 2001                          $70,174
 
 
     EBITDA should not be considered an alternative to net income as an
 indicator of operating performance or an alternative to cash flows from
 operating activities as a measure of liquidity.
     EPE posts monthly customer growth, MWh sales, climate, and stock and debt
 repurchase data on the EPE web site found at http://www.epelectric.com.  This
 data is located on the "Financial" web page of the web site.
 
     El Paso Electric is an electric utility serving approximately
 305,000 retail customers in El Paso, Texas and areas of the Rio Grande valley
 in west Texas and southern New Mexico, and providing electric service to
 wholesale customers in southern New Mexico, Texas, California and Mexico.
 EPE's common stock trades on the American Stock Exchange under the symbol EE.
 
     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 increased prices for fuel and
 purchased power, the possibility that regulators may not permit EPE to pass
 through all such increased costs to customers, the costs of unscheduled
 outages and other factors detailed by EPE in its public filings with the
 Securities and Exchange Commission.
 
 
      El Paso Electric Company's results of operations for the three months
      ended March 31, 2001 and 2000 are as follows (In thousands except for
      share data):
 
                                                   Three Months Ended March 31,
                                                     2001              2000
 
     Operating revenues (A)                        $192,879          $138,045
     Fuel expense                                    49,452            27,110
     Purchased and interchanged power
      expense                                        16,611             3,489
     Other operating expenses                        79,060            74,654
     Other income (deductions)                          261            (1,082)
     Interest charges                                17,618            17,501
     Income tax expense                              11,801             5,649
     Extraordinary loss on extinguishments
      of debt, net (B)                                  ---               553
       Net income                                   $18,598            $8,007
 
     Basic earnings per share:
       Income before extraordinary item               $0.36             $0.16
       Extraordinary loss on
        extinguishments of debt, net                    ---              0.01
         Net income                                   $0.36             $0.15
     Weighted average number of common
      shares outstanding                         51,015,982        55,299,922
 
     Diluted earnings per share:
       Income before extraordinary item               $0.36             $0.15
       Extraordinary loss on
        extinguishments of debt, net                    ---              0.01
         Net income                                   $0.36             $0.14
     Weighted average number of common
      shares and dilutive potential common
      shares outstanding                         51,989,157        55,812,310
 
     (A)  Includes MiraSol Energy Services revenues of $1.5 million and
          $1.0 million, respectively.
     (B)  Net of income tax benefit of approximately $0.4 million.
 
 
      El Paso Electric Company's results of operations for the twelve months
      ended March 31, 2001 and 2000 are as follows (In thousands except for
      share data):
 
                                                  Twelve Months Ended March 31,
                                                     2001              2000
 
     Operating revenues (A)                        $756,483          $578,962
     Fuel expense (B)                               181,889           102,845
     Purchased and interchanged power
      expense                                        74,339            14,737
     Other operating expenses                       315,317           303,926
     Other income (deductions) (C)                    1,554           (10,404)
     Interest charges (D)                            71,242            79,102
     Income tax expense                              45,048            25,041
     Extraordinary loss on extinguishments
      of debt, net (E)                                1,219             3,889
     Net income                                      68,983            39,018
     Preferred stock:
       Redemption costs                                 ---                10
     Net income applicable to common stock          $68,983           $39,008
 
     Basic earnings per common share:
       Income before extraordinary item               $1.32             $0.74
       Extraordinary loss on
        extinguishments of debt, net                   0.02              0.07
         Net income                                   $1.30             $0.67
     Weighted average number of common
      shares outstanding                         53,124,544        57,994,205
 
     Diluted earnings per common share:
       Income before extraordinary item               $1.30             $0.73
       Extraordinary loss on
        extinguishments of debt, net                   0.02              0.06
         Net income                                   $1.28             $0.67
     Weighted average number of common
      shares and dilutive potential common
      shares outstanding                         54,044,220        58,504,483
 
      (A)  Includes MiraSol Energy Services revenues of $5.8 million and
           $3.0 million, respectively.
      (B)  The twelve-month period ended March 31, 2000 includes a $6.6 million
           credit adjustment to previously accrued coal reclamation costs based
           on an updated study.
      (C)  The twelve-month period ended March 31, 2000 includes a
           $16.5 million expense related to the Las Cruces settlement.
      (D)  The twelve-month period ended March 31, 2000 includes a $4.1 million
           write-off of interest capitalized prior to 1999 on nuclear fuel.
      (E)  Net of income tax benefit of approximately $0.8 million and
           $2.5 million, respectively.
 
 
      Three Months Ended March 31, 2001 and 2000 (In thousands):
                                                                    Increase
                                               2001        2000     (Decrease)
     Electric kWh Sales:
        Retail                              1,442,647   1,340,181     7.6%
        Sales for Resale                      322,420     271,730    18.7% (A)
        Economy Sales                         354,959     605,882   (41.4%)(B)
           Total                            2,120,026   2,217,793    (4.4%)
 
     Operating Revenues:
        Retail                               $122,827    $107,937    13.8%
        Sales for Resale                       18,291      12,911    41.7% (C)
        Economy Sales                          47,502      14,769   221.6% (D)
        MiraSol Energy Services (E)             1,489         978    52.2%
        Other (E)                               2,770       1,450    91.0% (F)
           Total                             $192,879    $138,045    39.7%
 
     Capital Expenditures                     $17,547     $15,250
 
     Cash Interest Payments                   $15,074     $16,507
 
     Depreciation and Amortization            $22,157     $21,789
 
     EBITDA                                   $70,174     $53,499
 
 
      Twelve Months Ended March 31, 2001 and 2000 (In thousands):
                                                                    Increase
                                              2001         2000    (Decrease)
     Electric kWh Sales:
        Retail                              6,217,208   5,883,837     5.7%
        Sales for Resale                    1,333,230   1,030,445    29.4% (G)
        Economy Sales                       1,463,365   1,636,786   (10.6%)(B)
           Total                            9,013,803   8,551,068     5.4%
 
     Operating Revenues:
        Retail                               $545,198    $478,962    13.8%
        Sales for Resale                       75,542      51,707    46.1% (H)
        Economy Sales                         117,651      39,214   200.0% (E)
        MiraSol Energy Services (F)             5,751       2,987    92.5%
        Other (F)                              12,341       6,092   102.6% (I)
           Total                             $756,483    $578,962    30.7%
 
     Capital Expenditures                     $69,257     $54,449
 
     Cash Interest Payments                   $62,708     $69,768
 
     Depreciation and Amortization            $87,369     $89,918
 
     EBITDA                                  $273,861    $236,968
 
      (A)  Primarily due to increased kWh sales to Imperial Irrigation District
           ("IID").
      (B)  Primarily due to decreased power production and availability
           resulting from increased maintenance outages of the Company's
           generating units.
      (C)  Primarily due to increased energy expenses that are passed through
           directly to certain wholesale customers.
      (D)  Primarily due to (i) increased margins and (ii) higher prices as a
           result of increased energy expenses.
      (E)  Represents revenues with no related kWh sales.
      (F)  Primarily due to increased transmission revenues.
      (G)  Primarily due to (i) increased kWh sales to IID and (ii) sales to
           CFE as a result of a contract that was effective from June through
           August 2000 with no comparable sales to CFE in the prior period.
      (H)  Primarily due to (i) increased energy expenses that are passed
           through directly to certain wholesale customers and (ii) sales to
           CFE as noted above.
      (I)  Primarily due to margins on energy swaps and increased transmission
           revenues.
 
 
      At March 31, 2001 and 2000 (In thousands):
 
                                                      2001              2000
 
     Cash and temporary investments                 $42,875           $31,852
 
     Common Stock Equity                           $421,099          $405,483
     Long-Term Debt                                 715,033           775,553
     Financing and Capital Lease
      Obligations                                       ---            23,420
           Total Capitalization                  $1,136,132        $1,204,456
 
     Current Maturities of Long-Term Debt
      and Financing and Capital Lease
      Obligations                                   $80,573           $23,321
 
     Book Value Per Common Share                      $8.24             $7.42
 
 
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SOURCE El Paso Electric Company
    EL PASO, Texas, April 23 /PRNewswire Interactive News Release/ -- El Paso
 Electric (Amex:   EE) ("EPE") today reported net income before extraordinary
 item of $18.6 million, representing $0.36 basic and diluted earnings per
 share, for the quarter ended March 31, 2001.  This compares with net income
 before extraordinary item of $8.6 million, or $0.16 and $0.15 basic and
 diluted earnings per share, respectively, for the same period a year ago.
     The increase of $0.21 diluted earnings per share before extraordinary item
 is primarily attributable to the combined after-tax effects of:
 
 
                                                                   Diluted
                                                    Income         Earnings
                                                   Variance       Per Share
                                                (In thousands)
 
     Economy sales margins                         $11,687          $0.22
     Retail kWh sales                                3,315           0.06
     Energy expenses not recovered in EPE's
       New Mexico service area                      (3,372)         (0.06)
     Maintenance expense due to scheduled outages   (1,824)         (0.04)
     Repurchases of common stock                       ---           0.03
     Other                                             232            ---
                                                   $10,038          $0.21
 
 
     EPE's fuel contracts with variable-pricing provisions, as well as
 substantially all of its purchased power requirements, are exposed to
 fluctuations in prices due to unpredictable factors, including weather, which
 impact supply and demand.  This exposure is substantially mitigated through
 the operation of the Texas Commission rules and EPE's energy cost recovery
 clauses ("fuel clauses") in certain wholesale rates.  Under these rules and
 fuel clauses, energy costs are passed through to customers.  However, in EPE's
 New Mexico service area pursuant to a rate freeze which expires at the end of
 April 2001, and under certain wholesale contracts, energy costs are included
 in base rates and are not subject to periodic reconciliation or adjustment for
 fluctuations in such costs.  The average energy costs incurred for these
 customers currently exceed the energy costs that were incorporated into the
 applicable rates.  EPE will make a filing in its New Mexico jurisdiction by
 the end of April 2001 seeking to reflect these increased gas and purchased
 power costs in its New Mexico rates.  Approximately 40% of EPE's estimated gas
 requirements for the next nine months will be acquired through contracts with
 fixed-pricing provisions and the remaining requirements will be acquired
 through contracts with variable-pricing provisions.  Based on these
 projections and assuming an average variable price of $5.67 per mmbtu, EPE
 could incur increased gas expenses which may not be recovered from New Mexico
 and certain wholesale customers over the next nine months of approximately
 $2.2 million, net of tax, as compared to actual gas expenses incurred in the
 comparable nine month period in 2000.
     As reported previously, EPE made minimal sales directly to the California
 ISO during early December 2000 and has an outstanding receivable as of
 March 31, 2001 of approximately $0.2 million from the California ISO.  EPE
 will evaluate future sales to the California market and will make such sales
 in a manner which minimizes the credit risk and which takes into account the
 credit worthiness of the counter party.
     Net income was $18.6 million for the quarter ended March 31, 2001 compared
 to $8.0 million for the same period in 2000.  Basic earnings per share for the
 quarter ended March 31, 2001 was $0.36 compared to $0.15 for the same period
 in 2000.  Diluted earnings per share for the quarter ended March 31, 2001 was
 $0.36 compared to $0.14 for the same period in 2000.
     EPE's Board of Directors previously approved two stock repurchase programs
 allowing EPE to purchase up to twelve million of its outstanding shares of
 common stock.  As of April 13, 2001, EPE had repurchased 9,833,929 shares for
 approximately $104.7 million, including commissions.  EPE will make purchases
 primarily in the open market at prevailing prices and will also engage in
 private transactions, if appropriate.  Any repurchased shares will be
 available for issuance under employee benefit and stock option plans, or may
 be retired.
     From June 1, 1996 through March 31, 2001, EPE repurchased approximately
 $353.7 million of first mortgage bonds as part of an aggressive deleveraging
 program.  No first mortgage bonds were repurchased during the first quarter of
 2001.  EPE will repay the remaining $34.6 million of Series B First Mortgage
 Bonds at their maturity on May 1, 2001 from cash on hand.  Common stock equity
 as a percentage of capitalization, excluding current maturities of long-term
 debt and financing and capital lease obligations, has increased from 19% at
 June 30, 1996 to 37% at March 31, 2001.  The amount and timing of future
 repurchases of first mortgage bonds and common stock will depend upon market
 conditions, the availability of cash to meet bond maturities and other
 operating and capital requirements, and the comparative economic value of
 alternative uses of cash.
     Earnings before interest, income taxes, depreciation and amortization
 ("EBITDA") for the three months ended March 31, 2001, compared to the same
 period in 2000, are as follows (in thousands):
 
 
     Three months ended March 31, 2000                          $53,499
     Changes in:
       Economy sales margins                                     19,158
       Retail kWh sales                                           5,435
       Energy expenses not recovered in EPE's New Mexico
        service area                                             (5,528)
       Maintenance expense due to scheduled outages              (2,990)
       Other                                                        600
     Three months ended March 31, 2001                          $70,174
 
 
     EBITDA should not be considered an alternative to net income as an
 indicator of operating performance or an alternative to cash flows from
 operating activities as a measure of liquidity.
     EPE posts monthly customer growth, MWh sales, climate, and stock and debt
 repurchase data on the EPE web site found at http://www.epelectric.com.  This
 data is located on the "Financial" web page of the web site.
 
     El Paso Electric is an electric utility serving approximately
 305,000 retail customers in El Paso, Texas and areas of the Rio Grande valley
 in west Texas and southern New Mexico, and providing electric service to
 wholesale customers in southern New Mexico, Texas, California and Mexico.
 EPE's common stock trades on the American Stock Exchange under the symbol EE.
 
     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 increased prices for fuel and
 purchased power, the possibility that regulators may not permit EPE to pass
 through all such increased costs to customers, the costs of unscheduled
 outages and other factors detailed by EPE in its public filings with the
 Securities and Exchange Commission.
 
 
      El Paso Electric Company's results of operations for the three months
      ended March 31, 2001 and 2000 are as follows (In thousands except for
      share data):
 
                                                   Three Months Ended March 31,
                                                     2001              2000
 
     Operating revenues (A)                        $192,879          $138,045
     Fuel expense                                    49,452            27,110
     Purchased and interchanged power
      expense                                        16,611             3,489
     Other operating expenses                        79,060            74,654
     Other income (deductions)                          261            (1,082)
     Interest charges                                17,618            17,501
     Income tax expense                              11,801             5,649
     Extraordinary loss on extinguishments
      of debt, net (B)                                  ---               553
       Net income                                   $18,598            $8,007
 
     Basic earnings per share:
       Income before extraordinary item               $0.36             $0.16
       Extraordinary loss on
        extinguishments of debt, net                    ---              0.01
         Net income                                   $0.36             $0.15
     Weighted average number of common
      shares outstanding                         51,015,982        55,299,922
 
     Diluted earnings per share:
       Income before extraordinary item               $0.36             $0.15
       Extraordinary loss on
        extinguishments of debt, net                    ---              0.01
         Net income                                   $0.36             $0.14
     Weighted average number of common
      shares and dilutive potential common
      shares outstanding                         51,989,157        55,812,310
 
     (A)  Includes MiraSol Energy Services revenues of $1.5 million and
          $1.0 million, respectively.
     (B)  Net of income tax benefit of approximately $0.4 million.
 
 
      El Paso Electric Company's results of operations for the twelve months
      ended March 31, 2001 and 2000 are as follows (In thousands except for
      share data):
 
                                                  Twelve Months Ended March 31,
                                                     2001              2000
 
     Operating revenues (A)                        $756,483          $578,962
     Fuel expense (B)                               181,889           102,845
     Purchased and interchanged power
      expense                                        74,339            14,737
     Other operating expenses                       315,317           303,926
     Other income (deductions) (C)                    1,554           (10,404)
     Interest charges (D)                            71,242            79,102
     Income tax expense                              45,048            25,041
     Extraordinary loss on extinguishments
      of debt, net (E)                                1,219             3,889
     Net income                                      68,983            39,018
     Preferred stock:
       Redemption costs                                 ---                10
     Net income applicable to common stock          $68,983           $39,008
 
     Basic earnings per common share:
       Income before extraordinary item               $1.32             $0.74
       Extraordinary loss on
        extinguishments of debt, net                   0.02              0.07
         Net income                                   $1.30             $0.67
     Weighted average number of common
      shares outstanding                         53,124,544        57,994,205
 
     Diluted earnings per common share:
       Income before extraordinary item               $1.30             $0.73
       Extraordinary loss on
        extinguishments of debt, net                   0.02              0.06
         Net income                                   $1.28             $0.67
     Weighted average number of common
      shares and dilutive potential common
      shares outstanding                         54,044,220        58,504,483
 
      (A)  Includes MiraSol Energy Services revenues of $5.8 million and
           $3.0 million, respectively.
      (B)  The twelve-month period ended March 31, 2000 includes a $6.6 million
           credit adjustment to previously accrued coal reclamation costs based
           on an updated study.
      (C)  The twelve-month period ended March 31, 2000 includes a
           $16.5 million expense related to the Las Cruces settlement.
      (D)  The twelve-month period ended March 31, 2000 includes a $4.1 million
           write-off of interest capitalized prior to 1999 on nuclear fuel.
      (E)  Net of income tax benefit of approximately $0.8 million and
           $2.5 million, respectively.
 
 
      Three Months Ended March 31, 2001 and 2000 (In thousands):
                                                                    Increase
                                               2001        2000     (Decrease)
     Electric kWh Sales:
        Retail                              1,442,647   1,340,181     7.6%
        Sales for Resale                      322,420     271,730    18.7% (A)
        Economy Sales                         354,959     605,882   (41.4%)(B)
           Total                            2,120,026   2,217,793    (4.4%)
 
     Operating Revenues:
        Retail                               $122,827    $107,937    13.8%
        Sales for Resale                       18,291      12,911    41.7% (C)
        Economy Sales                          47,502      14,769   221.6% (D)
        MiraSol Energy Services (E)             1,489         978    52.2%
        Other (E)                               2,770       1,450    91.0% (F)
           Total                             $192,879    $138,045    39.7%
 
     Capital Expenditures                     $17,547     $15,250
 
     Cash Interest Payments                   $15,074     $16,507
 
     Depreciation and Amortization            $22,157     $21,789
 
     EBITDA                                   $70,174     $53,499
 
 
      Twelve Months Ended March 31, 2001 and 2000 (In thousands):
                                                                    Increase
                                              2001         2000    (Decrease)
     Electric kWh Sales:
        Retail                              6,217,208   5,883,837     5.7%
        Sales for Resale                    1,333,230   1,030,445    29.4% (G)
        Economy Sales                       1,463,365   1,636,786   (10.6%)(B)
           Total                            9,013,803   8,551,068     5.4%
 
     Operating Revenues:
        Retail                               $545,198    $478,962    13.8%
        Sales for Resale                       75,542      51,707    46.1% (H)
        Economy Sales                         117,651      39,214   200.0% (E)
        MiraSol Energy Services (F)             5,751       2,987    92.5%
        Other (F)                              12,341       6,092   102.6% (I)
           Total                             $756,483    $578,962    30.7%
 
     Capital Expenditures                     $69,257     $54,449
 
     Cash Interest Payments                   $62,708     $69,768
 
     Depreciation and Amortization            $87,369     $89,918
 
     EBITDA                                  $273,861    $236,968
 
      (A)  Primarily due to increased kWh sales to Imperial Irrigation District
           ("IID").
      (B)  Primarily due to decreased power production and availability
           resulting from increased maintenance outages of the Company's
           generating units.
      (C)  Primarily due to increased energy expenses that are passed through
           directly to certain wholesale customers.
      (D)  Primarily due to (i) increased margins and (ii) higher prices as a
           result of increased energy expenses.
      (E)  Represents revenues with no related kWh sales.
      (F)  Primarily due to increased transmission revenues.
      (G)  Primarily due to (i) increased kWh sales to IID and (ii) sales to
           CFE as a result of a contract that was effective from June through
           August 2000 with no comparable sales to CFE in the prior period.
      (H)  Primarily due to (i) increased energy expenses that are passed
           through directly to certain wholesale customers and (ii) sales to
           CFE as noted above.
      (I)  Primarily due to margins on energy swaps and increased transmission
           revenues.
 
 
      At March 31, 2001 and 2000 (In thousands):
 
                                                      2001              2000
 
     Cash and temporary investments                 $42,875           $31,852
 
     Common Stock Equity                           $421,099          $405,483
     Long-Term Debt                                 715,033           775,553
     Financing and Capital Lease
      Obligations                                       ---            23,420
           Total Capitalization                  $1,136,132        $1,204,456
 
     Current Maturities of Long-Term Debt
      and Financing and Capital Lease
      Obligations                                   $80,573           $23,321
 
     Book Value Per Common Share                      $8.24             $7.42
 
 
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 SOURCE  El Paso Electric Company