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EL PASO ELECTRIC ANNOUNCES 1992 FIRST QUARTER FINANCIAL RESULTS

 EL PASO ELECTRIC ANNOUNCES 1992 FIRST QUARTER FINANCIAL RESULTS
 EL PASO, Texas, May 14 /PRNewswire/ -- El Paso Electric Company (NASDAQ: ELPAQ), which filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code on Jan. 8, 1992, and is currently in the process of reorganizing, reported a net loss applicable to common stock in the amount of $5,851,000 (or $.16 per common share) for the quarter ended March 31, 1992. The loss for the first quarter of 1992 compares to a net loss applicable to common stock in the amount of $5,050,000 (or $.14 per common share) for the same quarter in 1991.
 The loss in 1992 is attributable to cash rates collected from customers that were not sufficient to recover the costs of providing service, including a return on investment, and the recognition of approximately $3.9 million of net reorganization expenses in connection with the bankruptcy proceedings. However, the 1992 loss applicable to common stock has been offset partially by the bankruptcy-related discontinuation of accruing interest on obligations not secured by first or second mortgages and dividends on preferred stock.
 Despite the loss for the first quarter of 1992, total system firm energy sales for the quarter increased 16.1 percent compared to the same quarter in 1991, primarily due to sales to Comision Federal de Electridad (CFE), the national electric utility of Mexico, and increased native system sales of 9.1 percent. The increase in native system sales is primarily due to increased sales at Fort Bliss compared to sales during the deployment of troops for Operation Desert Storm in 1991, and increased sales to an industrial customer which expanded its facilities. The number of customers from March 31, 1991, to March 31, 1992, increased at an annual rate of 2.3 percent.
 Operating revenues increased for the quarter ended March 31, 1992, compared to the quarter ended March 31, 1991, primarily due to (i) cash base rate increases of approximately $37 million (computed on an annual basis) granted by Texas regulators in November 1991; and (ii) an $11.9 million surcharge, to be billed over a 12-month period which began November 1991, related to recovery of regulatory expenses; (iii) increased native system kilowatt-hour sales, as discussed above; and (iv) the commencement of sales to CFE on May 1, 1991.
 In May 1992, the Imperial Irrigation District (IID), a wholesale customer based in Southern California, began receiving 50 megawatts of contingent capacity in addition to its current 100 megawatts of firm capacity. The company has a long-term power sales agreement with IID providing for the sale of 100 megawatts of firm capacity to IID through April 2002, and the sale of 50 megawatts of contingent capacity beginning in May 1992 and continuing through the end of the contract.
 The Bankruptcy Court has extended the period during which the company has the exclusive right to propose a plan of reorganization in the bankruptcy proceedings to Sept. 8, 1992, and to solicit acceptances thereof to Nov. 9, 1992. The company is continuing the process of formulating its plan of reorganization.
 On May 8, 1992, the 261st District Court of Travis county, Texas, entered and order granting the company's Motion for Partial Summary Judgment in pending civil litigation involving the receivership of First Service Life Insurance Company. The Court entered a favorable declaratory judgment that: (i) the company did not violate any provision of the Texas Insurance Code, or other provision of law, by contracting for, and receiving, a security interest in collateral to secure performance of contracts of annuity; (ii) the company's interest in such collateral is not unenforceable because such collateral secures the performance of contracts of annuity; (iii) the company and other persons who purchased contracts of annuity from First Service, which did not have a license to conduct the business of insurance in Texas, did not violate any provision of the Texas Insurance code or other law by purchasing such contracts of annuity from an unlicensed company; and (iv) contracts of annuity purchased in Texas by the company and other persons from First Service are not unenforceable because they were purchased from an unlicensed company.
 The company believes the granting of its Motion for Partial Summary Judgment disposes of any allegation that the purchase or collateralization of the annuities purchased from First Service was tainted by illegality.
 An alert was declared at Unit 3 of the Palo Verde Nuclear Generating Station on May 4, 1992, due to the loss of control room annunciators and supporting computers which are part of the plant monitoring system. Annunciators are audible and visual indicators for monitoring plant parameters. Alert is the next to lowest of four emergency classifications at a nuclear power plant. The supporting computers were recovered the first day of the alert and the repair of the annunciator system was completed and the alert terminated on May 6, 1992. The unit was removed from service on May 7, 1992, while additional testing of the annunciator system and supporting computers continued. It is expected that Unit 3 will return to service within the next few days. The alert applied only to Unit 3. Unit 1 currently is out of service for scheduled maintenance and refueling. Unit 2 is operating at full capacity.
 El Paso Electric Company is an electric utility serving approximately 250,000 customers in El Paso, Texas and an area of the Rio Grande Valley in West Texas and Southern New Mexico. The company currently owns or leases a 15.8 percent interest in each of the three 1,270-megawatt nuclear units at the Palo Verde Nuclear Generating Station located near Phoenix, Ariz.
 EL PASO ELECTRIC COMPANY
 (Unaudited -- In thousands except per share data)
 Three Months Ended
 3/31/92 3/31/91
 Operating revenues $ 121,985 $ 102,372
 Operating expenses 104,038 95,581
 Net loss before
 reorganization
 items (A) (2,086) (2,777)
 Net loss (5,851) (2,777)
 Net loss applicable
 to common stock (5,851) (5,050)
 Weighted average number
 of common shares
 outstanding 35,525 35,503
 Net loss per weighted
 average shares of
 common stock $ (0.16) $ (0.14)
 (A) -- Reorganization items were incurred due to the company filing of a voluntary petition for reorganization in bankruptcy.
 -0- 5/14/92
 /CONTACT: Russell Gibson of El Paso Electric Company, 915-543-4377.
 (ELPAQ) CO: El Paso Electric Company ST: Texas IN: UTI SU: ERN


PS -- NY113 -- 0517 05/14/92 18:36 EDT
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Date:May 14, 1992
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