Table of Contents EL PASO ELECTRIC COMPANY STATEMENTS OF CASH FLOWS (In thousands) 55 Years Ended December 31, 2019 2018 2017 Cash Flows From Operating Activities: Net income $ 123,037 $ 84,315 $ 98,261 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of electric plant in service 102,072 96,382 90,843 Amortization of nuclear fuel 41,033 38,176 42,476 Deferred income taxes, net 27,143 29,118 49,394 Allowance for equity funds used during construction (2,545 ) (3,453 ) (3,025 ) Other amortization and accretion 18,278 20,830 18,954 Net losses (gains) on decommissioning trust funds (38,514 ) 12,967 (10,626 ) Other operating activities 844 (38) (692) Change in: Accounts receivable (101) 5,712 (138) Inventories (5,512 ) (4,117 ) (3,073 ) Prepayments and other (897) (4,419) (692) Accounts payable 4,683 (2,233 ) 1,407 Taxes accrued 11,195 (5,487) 1,840 Interest accrued (2,282 ) 4,008 (817 ) Net over-collection of fuel revenues 7,368 4,822 17,093 Other current liabilities (937 ) 9,289 (100 ) Deferred charges and credits (9,721) (475) (12,544) Net cash provided by operating activities 275,144 285,397 288,561 Cash Flows From Investing Activities: Cash additions to utility property, plant and equipment (222,203 ) (240,021 ) (199,896 ) Cash additions to nuclear fuel (36,800) (38,354) (38,481) Insurance proceeds received for equipment — 5,351 9,591 Capitalized interest and AFUDC: Utility property, plant and equipment (6,560 ) (7,065 ) (6,000 ) Nuclear fuel and other (5,729) (5,483) (5,022) Allowance for equity funds used during construction 2,545 3,453 3,025 Decommissioning trust funds: Purchases, including funding of $2.1 million, $2.1 million and $3.8 million, respectively (377,415 ) (86,366 ) (102,920 ) Sales and maturities 370,677 80,732 97,037 Proceeds from sale of property, plant and equipment 368 287 281 Other investing activities (2,409) 4,186 (1,559) Net cash used for investing activities (277,526 ) (283,280 ) (243,944 ) Cash Flows From Financing Activities: Dividends paid (61,718 ) (57,539 ) (53,337 ) Borrowings under the revolving credit facility: Proceeds 566,321 567,894 638,458 Payments (501,727) (692,220) (546,499) Pollution control bonds: Proceeds 100,600 — — Payments (100,600 ) — (33,300 ) Proceeds from issuance of senior notes — 125,000 — Proceeds from issuance of RGRT senior notes — 65,000 — Payments on maturing RGRT senior notes — — (50,000) Other financing activities (2,576 ) (4,342 ) (1,369 ) Net cash provided by (used for) financing activities 300 3,793 (46,047) Net increase (decrease) in cash and cash equivalents (2,082 ) 5,910 (1,430 ) Cash and cash equivalents at beginning of period 12,900 6,990 8,420 Cash and cash equivalents at end of period $ 10,818 $ 12,900 $ 6,990 See accompanying notes to financial statements.