Exhibit 99.1
For Immediate Release
Feb. 23, 2010
PNM Resources Reports Solid 2009 Earnings
First Choice Power posts strong year; PNM utility results improve
Management to discuss 2010 earnings outlook during conference call today
FOURTH-QUARTER SUMMARY
| ● | Quarterly GAAP (generally accepted accounting principles) losses of $0.19 per diluted share, compared with losses of $0.82 per diluted share in 2008 |
| ● | Quarterly ongoing results of $0.00 per diluted share, compared with losses of $0.14 per diluted share in 2008 |
2009 SUMMARY
| ● | GAAP earnings of $1.36 per diluted share, compared with losses of $3.24 per diluted share in 2008 |
| ● | Ongoing earnings of $0.94 per diluted share, compared with $0.10 per diluted share in 2008 |
(ALBUQUERQUE, N.M.) – PNM Resources (NYSE: PNM) today reported unaudited 2009 year-end consolidated GAAP earnings of $124.3 million, or $1.36 per diluted share, compared with 2008 losses of $270.6 million, or $3.24 per diluted share.
Year-end unaudited, consolidated ongoing earnings were $86.3 million, or $0.94 per diluted share, compared with 2008 earnings of $8.2 million, or $0.10 per diluted share. Ongoing earnings exclude various special items. Reconciliations of GAAP to non-GAAP measures such as ongoing earnings and EBITDA (earnings before interest charges, income taxes, depreciation and amortization) are shown in the attached schedules 1 through 8.
“Our 2009 results, which are a dramatic improvement over 2008, reflect a better regulatory framework for our utilities, significant improvement by First Choice Power and modest growth for Optim Energy,” said Jeff Sterba, PNM Resources chairman and CEO. “Clearly, 2009 was an important and successful year for PNM Resources and our subsidiaries.
“We are cautiously optimistic for 2010 as the nation digs its way out of the economic downturn, which has affected all of our subsidiaries’ financial performance,” Sterba said. “Nevertheless, uncertainty remains regarding environmental regulatory initiatives and cost pressures that pose challenges for our utilities and the electric utility industry.”
(MORE)PNM Resources Reports 2009 Earnings 2-23-10 p. 2 of 6
FOURTH-QUARTER RESULTS
As expected, fourth-quarter financial performance resulted in a loss for the company. PNM Resources reported quarterly unaudited consolidated GAAP losses of $17.3 million, or $0.19 per diluted share, compared with losses of $73.0 million, or $0.82 per diluted share, in 2008. Unaudited, consolidated ongoing losses were $0.2 million, compared with losses of $12.5 million, or $0.14 per diluted share, in 2008.
Quarterly GAAP results reflect write-down of Optim Energy’s inventory of NOX emission allowances that had been issued by the Texas Commission on Environmental Quality. The write-down reflects a decrease in the current market value of these allowances. PNM Resources' share of Optim Energy's after-tax write-down was $15.6 million for the quarter. In addition, quarterly GAAP results include the $3.0 million after-tax expense related to the settlement of disputes regarding the California energy crisis of 2000-2001, which is subject to FERC approval.
SEGMENT REPORTING OF 2009 YEAR-END EARNINGS
Regulated Operations
PNM – a vertically integrated electric utility in New Mexico with distribution, transmission and generation assets.
| ● | PNM reported ongoing earnings of $45.8 million, or $0.50 per diluted share, compared with $15.7 million, or $0.19 per diluted share, in 2008. GAAP earnings were $19.5 million, or $0.21 per diluted share, compared with losses of $67.0 million, or $0.82 per diluted share, in 2008. |
| · | Higher retail rates implemented in July and the ability to recover fuel costs through the fuel and purchased power cost adjustment clause, combined with the impact of a full year of the 2008 rate increase, improved earnings. Load declined 1.7 percent in 2009 compared with 2008. |
TNMP – an electric transmission and distribution utility in Texas.
| ● | TNMP reported ongoing earnings of $11.9 million, or $0.13 per diluted share, compared with $23.2 million, or $0.28 per diluted share, in 2008. GAAP earnings were $12.2 million, or $0.13 per diluted share, compared with losses of $8.8 million, or $0.11 per diluted share, in 2008. |
| ● | Higher distribution maintenance costs, increased pension and benefit expenses and higher financing costs more than offset the September implementation of new transmission and distribution rates. |
Unregulated Operations
First Choice Power – an unregulated retail electric provider in Texas.
| ● | First Choice Power reported ongoing earnings of $40.5 million, or $0.44 per diluted share, compared with losses of $23.8 million, or $0.28 per diluted share, in 2008. GAAP earnings were $44.4 million, or $0.48 per diluted share, compared with 2008 losses of $177.6 million, or $2.13 per diluted share. |
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PNM Resources Reports 2009 Earnings 2-23-10 p. 3 of 6
● | Lower purchased power prices significantly improved average retail margins throughout the year and more than offset an 8.9 percent reduction of sales volumes. Bad-debt expense decreased from $51.8 million in 2008 to $41.2 million in 2009. As a percent of sales revenue, bad-debt expense decreased from 8.2 percent in 2008 to 7.8 percent in 2009. |
Optim Energy – jointly owned by PNM Resources and a subsidiary of Cascade Investment, L.L.C., Optim Energy owns interests in three generating assets in Texas, totaling nearly 1,200 megawatts.
| ● | PNM Resources’ share of Optim Energy net ongoing losses was $0.6 million, or $0.01 per diluted share, compared with 2008 losses of $2.5 million, or $0.03 per diluted share. GAAP losses were $18.2 million, or $0.20 per diluted share, compared with 2008 losses of $17.9 million, or $0.21 per diluted share. GAAP losses were driven primarily by write-downs associated with emission allowances in both years and impairment charges in 2008. |
| ● | PNM Resources' share of Optim Energy's ongoing EBITDA was $31.9 million, compared with $24.5 million in 2008. Improvement resulted from the addition of Cedar Bayou 4, favorable hedged positions, Twin Oaks Power fuel savings and operational cost reductions. |
Corporate/Other – a segment that reflects costs at the PNM Resources holding company, mainly comprised of interest expense related to debt. For the purposes of this news release, the Corporate/Other segment excludes the results of Optim Energy as reported above.
| ● | Corporate/Other reported ongoing losses of $18.9 million, or $0.20 per diluted share, compared with 2008 ongoing losses of $26.4 million, or $0.32 per diluted share. GAAP losses were $4.3 million, or $0.04 per diluted share, compared with GAAP losses of $34.0 million, or $0.39 per diluted share, in 2008. |
● | Less outstanding debt, lower interest rates for short-term debt and the repurchase of certain senior unsecured notes reduced financing costs by $17.3 million. |
Discontinued Operations
PNM Gas: On Jan. 30, 2009, PNM completed the sale of its natural gas utility to New Mexico Gas Co.
| ● | PNM Gas operations contributed $7.7 million, or $0.08 per diluted share, to ongoing earnings prior to its sale. |
2010 EARNINGS GUIDANCE
PNM Resources today announced its 2010 earnings guidance range. Management expects 2010 ongoing earnings to be in the range of $0.60 to $0.72 per diluted share. The 2010 earnings range reflects lower projected earnings from First Choice Power due to declining average retail margins. Ongoing earnings from the company’s regulated electric operations are projected to grow 5 percent to 15 percent in 2010 compared with 2009 results.
Management will discuss the 2010 earnings outlook in more detail during the 2009 earnings call.
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PNM Resources Reports 2009 Earnings 2-23-10 p. 4 of 6
2009 EARNINGS CALL: 9 AM EST TODAY
PNM Resources will discuss 2009 earnings results and the 2010 outlook during a live conference call and Web cast today at 9 a.m. Eastern. Speaking on the call will be Jeff Sterba, PNM Resources chairman and CEO; Pat Vincent-Collawn, PNM Resources president and COO; and Chuck Eldred, PNM Resources executive vice president and CFO.
A live webcast of the call will be archived at http://www.pnmresources.com/investors/events.cfm. Listeners are encouraged to visit the Web site at least 30 minutes before the event to register, download and install any necessary audio software.
Investors, analysts and other participants can listen to the live conference call by dialing (888) 389-5997 (toll free) or (719) 325-2499 (toll) five to 10 minutes prior to the event and referencing “the PNM Resources 2009 earnings conference call.” A telephone replay will be available at noon Eastern until midnight March 2 by dialing (888) 203-1112 (toll free) or (719) 457-0820 (toll) and using confirmation code 7026411.
Supporting material for PNM Resources’ earnings announcements can be viewed and downloaded at http://www.pnmresources.com/investors/results.cfm.
E-MAIL ALERTS, RSS FEEDS AVAILABLE
PNM Resources encourages analysts, investors and other interested parties to visit www.PNMResources.com and register to automatically receive company financial information by e-mail or RSS feeds. Once registered, participants can choose from a menu to automatically receive requested information, including news releases, notices of webcasts and filings with the U.S. Securities and Exchange Commission. Participants can unsubscribe at any time and will not receive information that was not requested.
Background:
PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2009 consolidated operating revenues from continuing operations of $1.6 billion. Through its utility and energy subsidiaries, PNM Resources has more than 2,710 megawatts of generation resources and serves electricity to more than 875,300 homes and businesses in New Mexico and Texas. The company also has a 50-percent ownership of Optim Energy, which owns nearly 1,200 megawatts of generation resources. For more information, visit the company’s Web site at www.PNMResources.com.
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PNM Resources Reports 2009 Earnings 2-23-10 p. 5 of 6
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this news release that relate to future events or PNM Resources', PNM's, or TNMP's (collectively, the "Companies") expectations, projections, estimates, intentions, goals, targets and strategies, are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates and the Companies assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, the Companies caution readers not to place undue reliance on these statements. The Companies' business, financial condition, cash flow and operating results are influenced by many factors, which are often beyond their control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. These factors include conditions affecting the Company’s ability to access the financial markets and negotiate new credit facilities for those expiring in 2011 and 2012, or Optim Energy’s access to additional debt financing following the utilization of its existing credit facility, including actions by ratings agencies affecting the Company’s credit ratings; the recession, its consequent extreme disruption in the credit markets, and its impacts on the electricity usage of the Company’s customers; state and federal regulatory and legislative decisions and actions, including appeals of prior regulatory proceedings, and including provisions relating to climate change, reduction of green house gases, coal combustion byproducts, and other power plant emissions; the ability of PNM to meet the renewable energy requirements established by the N.M. Public Regulation Commission, including the resource diversity requirement, within the specified cost parameters, and the Company’s ability to obtain federal and/or state funding and incentives for the development of alternative or renewable energy; the ability of PNM to successfully utilize a future test year in a rate filing with the NMPRC, including PNM’s ability to accurately forecast operating and capital expenditures and withstand challenges by regulators and intervenors; the performance of generating units, including the Palo Verde Nuclear Generating Station, the San Juan Generating Station, the Four Corners Plant, and Optim Energy generating units, and transmission systems; the risk that Optim Energy desires to expand its generation capacity but is unable to identify and implement profitable acquisitions or that PNM Resources and ECJV will not agree to make additional capital contributions to Optim Energy; the potential unavailability of cash from PNM Resources’ subsidiaries or Optim Energy due to regulatory, statutory or contractual restrictions; the impacts of the decline in the values of marketable equity securities on the trust funds maintained to provide nuclear decommissioning funding and pension and other postretirement benefits, including the levels of funding and expense; the ability of First Choice Power to attract and retain customers and collect amounts billed; changes in ERCOT protocols; changes in the cost of power acquired by First Choice Power; collections experience; insurance coverage available for claims made in litigation; fluctuations in interest rates; weather; water supply; changes in fuel costs; availability of fuel supplies; uncertainty regarding the requirements and related costs of decommissioning power plants owned or partially owned by PNM and Optim Energy and coal mines supplying certain PNM power plants, as well as the ability to recover decommissioning costs through charges to customers; the risk that replacement power costs incurred by PNM related to not meeting the specified capacity factor for its generating units under its Emergency FPPAC will not be approved by the NMPRC; the risk that PNM may not be able to renew rights-of-way on Native American lands or that the costs of rights-of-way are not allowed to be recovered through rates charged to customers; the effectiveness of risk management and commodity risk transactions; seasonality and other changes in supply and demand in the market for electric power; the impact of mandatory energy efficiency measures on customer energy usage; variability of wholesale power prices and natural gas prices; volatility and liquidity in the wholesale power markets and the natural gas markets; uncertainty regarding the ongoing validity of government programs for emission allowances; the risk that the resolution of the bankruptcy of the Lyondell Chemical Company results in significant adverse impacts on the operations of the Altura Cogen facility and Optim Energy; changes in the competitive environment in the electric industry; the risk that the Company and Optim Energy may have to commit to substantial capital investments and additional operating costs to comply with new environmental requirements including possible future requirements to address concerns about global climate change, and the resultant impacts on the operations and economic viability of generating plants in which PNM and Optim Energy have interests; the risks associated with completion of generation, transmission, distribution, and other projects, including construction delays and unanticipated cost overruns; uncertainty surrounding the status of PNM’s participation in jointly-owned projects resulting from the scheduled expiration of the operational documents for the projects beginning in 2015 and potential changes in the objectives of the participants in the projects; the outcome of legal proceedings; changes in applicable accounting principles, and the performance of state, regional, and national economies.
Non-GAAP Financial Measures
PNM Resources (“the Company”) uses ongoing earnings and ongoing earnings per diluted share (or ongoing diluted earnings per share) and EBITDA (earnings before interest charges, income taxes, depreciation and amortization) and ongoing EBITDA to evaluate the operations of the Company and to establish goals for management and employees. While the Company believes these financial measures are appropriate and useful for investors, they are not measures presented in accordance with generally accepted accounting principles in the U.S. (GAAP). The Company does not intend for these measures, or any piece of these measures, to represent any financial measure as defined by GAAP. Furthermore, the Company’s calculations of these measures as presented may or may not be comparable to similarly titled measures used by other companies.
CONTACTS:
Analysts Analysts & Media
Gina Jacobi Frederick Bermudez
Director, Investor Relations (505) 241-4831
(505) 241-2211
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PNM Resources
Schedule 1
2009 Reconciliation of Ongoing to GAAP Earnings
(Preliminary and Unaudited)
| Quarter Ended December 31, 2009 | |||||||||
| (in thousands) | |||||||||
| Utilities | First | Optim | Corp/ | ||||||
PNM Electric | TNMP Electric | PNM Gas | Choice | Energy (50%) | Other | PNMR | |||
| Ongoing Earnings (Loss) | $ 4,040 | $ 2,827 | $ - | $ 2,812 | $ (3,425) | $ (6,477) | $ (223) | ||
| Adjusting items, net of income tax effects* | |||||||||
| Mark-to-market impact of economic hedges | (84) | - | - | 1,559 | 228 | - | 1,703 | ||
| Gain on sale of gas operations** | - | - | (527) | - | - | - | (527) | ||
| Settlement of California energy crisis legal proceeding | (2,981) | - | - | - | - | - | (2,981) | ||
| Net change in unrealized impairments of NDT securities | 990 | - | - | - | - | - | 990 | ||
| Post sale discontinued operations | - | - | (552) | - | - | - | (552) | ||
| Regulatory disallowances | (155) | - | - | - | - | - | (155) | ||
| Write-down of emission allowances | - | - | - | - | (15,582) | - | (15,582) | ||
| Total Adjustments | (2,230) | - | (1,079) | 1,559 | (15,354) | - | (17,104) | ||
| GAAP Earnings (Loss) Attributable to PNMR: | |||||||||
| Continuing Operations | 1,810 | 2,827 | 4,371 | (18,779) | (6,477) | (16,248) | |||
| Discontinued Operations | (1,079) | (1,079) | |||||||
| Net Earnings (Loss) | $ 1,810 | $ 2,827 | $ (1,079) | $ 4,371 | $ (18,779) | $ (6,477) | $ (17,327) | ||
| Year Ended December 31, 2009 | |||||||||
| (in thousands) | |||||||||
| Utilities | First | Optim | Corp/ | ||||||
PNM Electric | TNMP Electric | PNM Gas | Choice | Energy (50%) | Other | PNMR | |||
| Ongoing Earnings (Loss) | $ 45,788 | $ 11,909 | $ 7,687 | $ 40,453 | $ (558) | $ (18,939) | $ 86,340 | ||
| Adjusting items, net of income tax effects* | |||||||||
| Business improvement plan | (319) | - | - | - | - | 349 | 30 | ||
| CapRock settlement | - | - | - | - | - | 9,062 | 9,062 | ||
| Depreciation associated with sale of gas assets | - | - | 1,112 | - | - | - | 1,112 | ||
| Mark-to-market impact of economic hedges | 2,857 | - | - | 3,962 | (2,070) | - | 4,749 | ||
| Gain on reacquired debt | - | - | - | - | - | 4,415 | 4,415 | ||
| Gain on sale of gas operations** | - | - | 65,341 | - | - | - | 65,341 | ||
| Settlement of California energy crisis legal proceeding | (19,312) | - | - | - | - | - | (19,312) | ||
| Interest on uncertain tax positions | 3,534 | - | - | - | - | - | 3,534 | ||
| Net change in unrealized impairments of NDT securities | 3,550 | - | - | - | - | - | 3,550 | ||
| Post sale discontinued operations | - | - | (3,339) | - | - | 6 | (3,333) | ||
| Regulatory recoveries (disallowances) | (16,233) | 257 | - | - | - | - | (15,976) | ||
| Sale of water rights | - | - | - | - | - | 768 | 768 | ||
| Work continuance planning | (382) | - | - | - | - | - | (382) | ||
| Write-down of emission allowances | - | - | - | - | (15,582) | - | (15,582) | ||
| Total Adjustments | (26,305) | 257 | 63,114 | 3,962 | (17,652) | 14,600 | 37,976 | ||
| GAAP Earnings (Loss) Attributable to PNMR: | |||||||||
| Continuing Operations | 19,483 | 12,166 | 44,415 | (18,210) | (4,339) | 53,515 | |||
| Discontinued Operations | 70,801 | 70,801 | |||||||
| Net Earnings (Loss) | $ 19,483 | $ 12,166 | $ 70,801 | $ 44,415 | $ (18,210) | $ (4,339) | $ 124,316 | ||
| * Income tax effects calculated using tax rates of 35.65% for First Choice and TNMP and 39.59% for all other segments unless otherwise indicated. | |||||||||
| ** Gain on sale of PNM Gas is net of income taxes (benefit) of $(346) and $33,085 for the quarter and year. | |||||||||
PNM Resources
Schedule 2
2008 Reconciliation of Ongoing to GAAP Earnings
(Preliminary and Unaudited)
| Quarter Ended December 31, 2008 | |||||||||
| (in thousands) | |||||||||
| Utilities | First | Optim | Corp/ | ||||||
PNM Electric | TNMP Electric | PNM Gas | Choice | Energy (50%) | Other | PNMR | |||
| Ongoing Earnings (Loss) | $ (3,700) | $ 5,581 | $ 6,951 | $ (9,935) | $ (5,508) | $ (5,871) | $ (12,482) | ||
| Adjusting items, net of income tax effects* | |||||||||
| Acquisition/Divestiture | (686) | - | (4) | - | - | (748) | (1,438) | ||
| Business improvement plan | (358) | 62 | (169) | - | - | (2,092) | (2,557) | ||
| Depreciation on gas assets | - | - | 3,299 | - | - | - | 3,299 | ||
| Mark-to-market impact of economic hedges | (455) | - | (72) | (1,690) | 5,148 | - | 2,931 | ||
| Impairment of goodwill** | - | - | - | (39,297) | - | - | (39,297) | ||
| Impairment of other intangible assets | - | - | - | (24,951) | - | - | (24,951) | ||
| Net change in unrealized impairments of NDT securities | (3,356) | - | - | - | - | - | (3,356) | ||
| Speculative trading | - | - | - | (680) | - | - | (680) | ||
| Texas deferred tax adjustments | - | 2,494 | - | - | - | 3,000 | 5,494 | ||
| Total Adjustments | (4,855) | 2,556 | 3,054 | (66,618) | 5,148 | 160 | (60,555) | ||
| GAAP Earnings (Loss) Attributable to PNMR: | |||||||||
| Continuing Operations | (8,555) | 8,137 | (76,553) | (360) | (5,711) | (83,042) | |||
| Discontinued Operations | 10,005 | 10,005 | |||||||
| Net Earnings (Loss) | $ (8,555) | $ 8,137 | $ 10,005 | $ (76,553) | $ (360) | $ (5,711) | $ (73,037) | ||
| Year Ended December 31, 2008 | |||||||||
| (in thousands) | |||||||||
| Utilities | First | Optim | Corp/ | ||||||
| PNM Electric | TNMP Electric | PNM Gas | Choice | Energy (50%) | Other | PNMR | |||
| Ongoing Earnings (Loss) | $ 15,684 | $ 23,224 | $ 21,944 | $ (23,795) | $ (2,531) | $ (26,360) | $ 8,166 | ||
| Adjusting items, net of income tax effects* | |||||||||
| Acquisition/Divestiture | (2,170) | - | (13) | - | - | (4,096) | (6,279) | ||
| Afton write-down | (1,199) | - | - | - | - | - | (1,199) | ||
| Business improvement plan | (165) | (84) | (312) | - | - | (6,526) | (7,087) | ||
| Depreciation on gas assets | - | - | 13,004 | - | - | - | 13,004 | ||
| Mark-to-market impact of economic hedges | (3,471) | - | (1) | (2,136) | 1,901 | - | (3,707) | ||
| Gain on sale of merchant portfolio | 3,083 | - | - | - | - | - | 3,083 | ||
| Impairment of goodwill** | (51,143) | (34,456) | - | (88,755) | - | - | (174,354) | ||
| Impairment of other intangible assets | - | - | - | (30,822) | (6,978) | - | (37,800) | ||
| Interest on uncertain tax positions | (1,922) | 29 | 6 | 66 | - | 12 | (1,809) | ||
| Net change in unrealized impairments of NDT securities | (7,426) | - | - | - | - | - | (7,426) | ||
| Regulatory disallowances | (18,273) | - | - | - | - | - | (18,273) | ||
| Speculative trading | - | - | - | (32,131) | (739) | - | (32,870) | ||
| Texas deferred tax adjustments | - | 2,494 | - | - | - | 3,000 | 5,494 | ||
| Write-down of emission allowances | - | - | - | - | (9,587) | - | (9,587) | ||
| Total Adjustments | (82,686) | (32,017) | 12,684 | (153,778) | (15,403) | (7,610) | (278,810) | ||
| GAAP Earnings (Loss) Attributable to PNMR: | |||||||||
| Continuing Operations | (67,002) | (8,793) | (177,573) | (17,934) | (33,970) | (305,272) | |||
| Discontinued Operations | 34,628 | 34,628 | |||||||
| Net Earnings (Loss) | $ (67,002) | $ (8,793) | $ 34,628 | $(177,573) | $ (17,934) | $ (33,970) | $ (270,644) | ||
| * Income tax effects calculated using tax rates of 35.65% for First Choice and TNMP and 39.59% for all other segments unless otherwise indicated. | |||||||||
| **Impairment of goodwill has no income tax effects. | |||||||||
PNM Resources
Schedule 3
2009 Reconciliation of Ongoing to GAAP Earnings Per Share
(Preliminary and Unaudited)
| Quarter Ended December 31, 2009 | |||||||||
| (earnings per diluted share) | |||||||||
| Utilities | First | Optim | Corp/ | ||||||
PNM Electric | TNMP Electric | PNM Gas | Choice | Energy (50%) | Other | PNMR | |||
| Ongoing Earnings (Loss) | $ 0.04 | $ 0.03 | $ 0.00 | $ 0.03 | $ (0.04) | $ (0.06) | $ 0.00 | ||
| Adjusting items | |||||||||
| Mark-to-market impact of economic hedges | - | - | - | 0.01 | - | - | 0.01 | ||
| Gain on sale of gas operations | - | - | - | - | - | - | - | ||
| Settlement of California energy crisis legal proceeding | (0.03) | - | - | - | - | - | (0.03) | ||
| Net change in unrealized impairments of NDT securities | 0.01 | - | - | - | - | - | 0.01 | ||
| Post sale discontinued operations | - | - | (0.01) | - | - | - | (0.01) | ||
| Regulatory disallowances | - | - | - | - | - | - | - | ||
| Write-down of emission allowances | - | - | - | - | (0.17) | - | (0.17) | ||
| Total Adjustments | (0.02) | - | (0.01) | 0.01 | (0.17) | - | (0.19) | ||
| GAAP Earnings (Loss) Attributable to PNMR: | |||||||||
| Continuing Operations | 0.02 | 0.03 | 0.04 | (0.21) | (0.06) | (0.18) | |||
| Discontinued Operations | (0.01) | (0.01) | |||||||
| Net Earnings (Loss) | $ 0.02 | $ 0.03 | $ (0.01) | $ 0.04 | $ (0.21) | $ (0.06) | $ (0.19) | ||
| Average Diluted Shares Outstanding: 91,873,667 | |||||||||
| Year Ended December 31, 2009 | |||||||||
| (earnings per diluted share) | |||||||||
| Utilities | First | Optim | Corp/ | ||||||
| PNM Electric | TNMP Electric | PNM Gas | Choice | Energy (50%) | Other | PNMR | |||
| Ongoing Earnings (Loss) | $ 0.50 | $ 0.13 | $ 0.08 | $ 0.44 | $ (0.01) | $ (0.20) | $ 0.94 | ||
| Adjusting items | |||||||||
| Business improvement plan | - | - | - | - | - | - | - | ||
| CapRock settlement | - | - | - | - | - | 0.10 | 0.10 | ||
| Depreciation associated with sale of gas assets | - | - | 0.01 | - | - | - | 0.01 | ||
| Mark-to-market impact of economic hedges | 0.03 | - | - | 0.04 | (0.02) | - | 0.05 | ||
| Gain on reacquired debt | - | - | - | - | - | 0.05 | 0.05 | ||
| Gain on sale of gas operations | - | 0.72 | - | - | - | 0.72 | |||
| Settlement of California energy crisis legal proceeding | (0.21) | - | - | - | - | - | (0.21) | ||
| Interest on uncertain tax positions | 0.04 | - | - | - | - | - | 0.04 | ||
| Net change in unrealized impairments of NDT securities | 0.03 | - | - | - | - | - | 0.03 | ||
| Post sale discontinued operations | - | - | (0.03) | - | - | - | (0.03) | ||
| Regulatory recoveries (disallowances) | (0.18) | - | - | - | - | - | (0.18) | ||
| Sale of water rights | - | - | - | - | - | 0.01 | 0.01 | ||
| Work continuance planning | - | - | - | - | - | - | - | ||
| Write-down of emission allowances | - | - | - | - | (0.17) | - | (0.17) | ||
| Total Adjustments | (0.29) | 0.00 | 0.70 | 0.04 | (0.19) | 0.16 | 0.42 | ||
| GAAP Earnings (Loss) Attributable to PNMR: | |||||||||
| Continuing Operations | 0.21 | 0.13 | 0.48 | (0.20) | (0.04) | 0.58 | |||
| Discontinued Operations | 0.78 | 0.78 | |||||||
| Net Earnings (Loss) | $ 0.21 | $ 0.13 | $ 0.78 | $ 0.48 | $ (0.20) | $ (0.04) | $ 1.36 | ||
| Average Diluted Shares Outstanding: 91,670,611 | |||||||||
PNM Resources
Schedule 4
2008 Reconciliation of Ongoing to GAAP Earnings Per Share
(Preliminary and Unaudited)
| Quarter Ended December 31, 2008 | |||||||||
| (earnings per diluted share) | |||||||||
| Utilities | First | Optim | Corp/ | ||||||
PNM Electric | TNMP Electric | PNM Gas | Choice | Energy (50%) | Other | PNMR | |||
| Ongoing Earnings (Loss) | $ (0.04) | $ 0.06 | $ 0.08 | $ (0.11) | $ (0.06) | $ (0.07) | $ (0.14) | ||
| Adjusting items | |||||||||
| Acquisition/Divestiture | (0.01) | - | - | - | - | (0.01) | (0.02) | ||
| Business improvement plan | - | - | - | - | - | (0.02) | (0.02) | ||
| Depreciation on gas assets | - | - | 0.04 | - | - | - | 0.04 | ||
| Mark-to-market impact of economic hedges | (0.01) | - | - | (0.02) | 0.06 | - | 0.03 | ||
| Impairment of goodwill** | - | - | - | (0.44) | - | - | (0.44) | ||
| Impairment of other intangible assets | - | - | - | (0.28) | - | - | (0.28) | ||
| Net change in unrealized impairments of NDT securities | (0.04) | - | - | - | - | - | (0.04) | ||
| Speculative trading | - | - | - | (0.01) | - | - | (0.01) | ||
| Texas deferred tax adjustments | - | 0.03 | - | - | - | 0.03 | 0.06 | ||
| Total Adjustments | (0.06) | 0.03 | 0.04 | (0.75) | 0.06 | - | (0.68) | ||
| GAAP Earnings (Loss) Attributable to PNMR: | |||||||||
| Continuing Operations | (0.10) | 0.09 | (0.86) | 0.00 | (0.07) | (0.94) | |||
| Discontinued Operations | 0.12 | 0.12 | |||||||
| Net Earnings (Loss) | $ (0.10) | $ 0.09 | $ 0.12 | $ (0.86) | $ 0.00 | $ (0.07) | $ (0.82) | ||
| Average Diluted Shares Outstanding: 88,823,719 | |||||||||
| Year Ended December 31, 2008 | |||||||||
| (earnings per diluted share) | |||||||||
| Utilities | First | Optim | Corp/ | ||||||
PNM Electric | TNMP Electric | PNM Gas | Choice | Energy (50%) | Other | PNMR | |||
| Ongoing Earnings (Loss) | $ 0.19 | $ 0.28 | $ 0.26 | $ (0.28) | $ (0.03) | $ (0.32) | $ 0.10 | ||
| Adjusting items | |||||||||
| Acquisition/Divestiture | (0.03) | - | - | - | - | (0.04) | (0.07) | ||
| Afton write-down | (0.02) | - | - | - | - | - | (0.02) | ||
| Business improvement plan | - | - | - | - | - | (0.07) | (0.07) | ||
| Depreciation on gas assets | - | - | 0.16 | - | - | - | 0.16 | ||
| Mark-to-market impact of economic hedges | (0.04) | - | - | (0.03) | 0.02 | - | (0.05) | ||
| Gain on sale of merchant portfolio | 0.03 | - | - | - | - | - | 0.03 | ||
| Impairment of goodwill | (0.61) | (0.42) | - | (1.06) | - | - | (2.09) | ||
| Impairment of other intangible assets | - | - | - | (0.37) | (0.08) | - | (0.45) | ||
| Interest on uncertain tax positions | (0.03) | - | - | - | - | - | (0.03) | ||
| Net change in unrealized impairments of NDT securities | (0.09) | - | - | - | - | - | (0.09) | ||
| Regulatory disallowances | (0.22) | - | - | - | - | - | (0.22) | ||
| Speculative trading | - | - | - | (0.39) | (0.01) | - | (0.40) | ||
| Texas deferred tax adjustments | - | 0.03 | - | - | - | 0.04 | 0.07 | ||
| Write-down of emission allowances | - | - | - | - | (0.11) | - | (0.11) | ||
| Total Adjustments | (1.01) | (0.39) | 0.16 | (1.85) | (0.18) | (0.07) | (3.34) | ||
| GAAP Earnings (Loss) Attributable to PNMR: | |||||||||
| Continuing Operations | (0.82) | (0.11) | (2.13) | (0.21) | (0.39) | (3.66) | |||
| Discontinued Operations | 0.42 | 0.42 | |||||||
| Net Earnings (Loss) | $ (0.82) | $ (0.11) | $ 0.42 | $ (2.13) | $ (0.21) | $ (0.39) | $ (3.24) | ||
| Average Diluted Shares Outstanding: 83,467,701 | |||||||||
PNM Resources
Schedule 5
Segment Reconciliation of GAAP Net Earnings to Ongoing EBITDA
(Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization)
(Preliminary and Unaudited)
(in millions)
| Quarter Ended December 31, 2009 | ||||||||||||||
PNM Electric | TNMP Electric | PNM Gas | First Choice | Corporate & Other* | PNMR Consolidated | |||||||||
| GAAP Net Earnings (Loss) Attributable to PNMR | $1.8 | $2.8 | ($1.1) | $4.4 | ($25.2) | ($17.3) | ||||||||
| Interest charges | 17.6 | 7.8 | 0.0 | 0.4 | 5.1 | 30.9 | ||||||||
| Income taxes | 2.4 | 1.7 | (0.7) | 3.1 | (16.2) | (9.7) | ||||||||
| Depreciation and amortization | 22.6 | 9.4 | 0.0 | 0.4 | 3.8 | 36.2 | ||||||||
| EBITDA | 44.4 | 21.7 | (1.8) | 8.3 | (32.5) | 40.1 | ||||||||
| Ongoing adjustments (before tax) | 4.8 | 0.0 | 1.8 | (2.5) | 25.3 | 29.4 | ||||||||
| Ongoing EBITDA | $49.2 | $21.7 | $0.0 | $5.8 | ($7.2) | $69.5 | ||||||||
| Year Ended December 31, 2009 | ||||||||||||||
PNM Electric | TNMP Electric | PNM Gas | First Choice | Corporate & Other* | PNMR Consolidated | |||||||||
| GAAP Net Earnings (Loss) Attributable to PNMR | $19.5 | $12.2 | $70.8 | $44.4 | ($22.6) | $124.3 | ||||||||
| Interest charges | 69.1 | 27.8 | 1.0 | 2.8 | 22.5 | 123.2 | ||||||||
| Income taxes | 13.7 | 8.0 | 36.7 | 25.6 | (18.5) | 65.5 | ||||||||
| Depreciation and amortization | 91.4 | 37.3 | 0.0 | 1.8 | 16.7 | 147.2 | ||||||||
| EBITDA | 193.7 | 85.3 | 108.5 | 74.6 | (1.9) | 460.2 | ||||||||
| Ongoing adjustments (before tax) | 42.0 | (0.5) | (93.0) | (6.1) | 5.2 | (52.4) | ||||||||
| Ongoing EBITDA | $235.7 | $84.8 | $15.5 | $68.5 | $3.3 | $407.8 | ||||||||
| * Corporate & Other segment includes equity in net earnings (loss) of Optim Energy. See Schedule 7 for calculation of Optim Energy ongoing EBITDA. | ||||||||||||||
PNM Resources
Schedule 6
Segment Reconciliation of GAAP Net Earnings to Ongoing EBITDA
(Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization)
(Preliminary and Unaudited)
(in millions)
| Quarter Ended December 31, 2008 | ||||||||||||
PNM Electric | TNMP Electric | PNM Gas | First Choice | Corporate & Other* | PNMR Consolidated | |||||||
| GAAP Net Earnings (Loss) Attributable to PNMR | ($8.6) | $8.1 | $10.0 | ($76.6) | ($5.9) | ($73.0) | ||||||
| Interest charges | 17.8 | 4.8 | 3.3 | 1.5 | 9.8 | 37.2 | ||||||
| Income taxes | (4.9) | 0.5 | 6.7 | (19.2) | (11.9) | (28.8) | ||||||
| Depreciation and amortization | 21.5 | 11.7 | 0.0 | 0.7 | 4.3 | 38.2 | ||||||
| EBITDA | 25.8 | 25.1 | 20.0 | (93.6) | (3.7) | (26.4) | ||||||
| Ongoing adjustments (before tax) | 7.1 | (0.1) | 0.4 | 81.5 | (3.8) | 85.1 | ||||||
| Ongoing EBITDA | $32.9 | $25.0 | $20.4 | ($12.1) | ($7.5) | $58.7 | ||||||
| Year Ended December 31, 2008 | ||||||||||||
| PNM Electric | TNMP Electric | PNM Gas | First Choice | Corporate & Other* | PNMR Consolidated | |||||||
| GAAP Net Earnings (Loss) Attributable to PNMR | ($67.0) | ($8.8) | $34.6 | ($177.6) | ($51.8) | ($270.6) | ||||||
| Interest charges | 69.9 | 18.3 | 13.2 | 4.0 | 40.8 | 146.2 | ||||||
| Income taxes | (10.0) | 11.1 | 23.0 | (47.6) | (44.4) | (67.9) | ||||||
| Depreciation and amortization | 85.7 | 38.7 | 0.0 | 2.4 | 17.6 | 144.4 | ||||||
| EBITDA | 78.6 | 59.3 | 70.8 | (218.8) | (37.8) | (47.9) | ||||||
| Ongoing adjustments (before tax) | 98.6 | 34.6 | 0.5 | 189.3 | 42.0 | 365.0 | ||||||
| Ongoing EBITDA | $177.2 | $93.9 | $71.3 | ($29.5) | $4.2 | $317.1 | ||||||
| * Corporate & Other segment includes equity in net earnings (loss) of Optim Energy. See Schedule 7 for calculation of Optim Energy ongoing EBITDA. | ||||||||||||
PNM Resources
Schedule 7
Calculation of Optim Energy Ongoing EBITDA
(Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization)
(Preliminary and Unaudited)
| Quarter Ended | Year Ended | |||
| December 31, 2009 | December 31, 2009 | |||
| (in millions) | ||||
| GAAP Net Earnings | $ (61.7) | $ (56.8) | ||
| Interest expense | 4.2 | 13.8 | ||
| Income tax | (0.5) | (0.2) | ||
| Depreciation and amortization expense | 11.4 | 37.2 | ||
| Purchase accounting amortizations | 5.1 | 11.3 | ||
| Mark-to-market impact of economic hedges | (0.3) | 6.9 | ||
| Write-down of emission allowances | 51.6 | 51.6 | ||
| Ongoing Optim Energy EBITDA | 9.8 | 63.8 | ||
| 50 percent of Ongoing EBITDA (PNMR share) | $ 4.9 | $ 31.9 | ||
| Quarter Ended | Year Ended | |||
| December 31, 2008 | December 31, 2008 | |||
| (in millions) | ||||
| GAAP Net Earnings | $ (1.6) | $ (60.5) | ||
| Interest expense | 4.2 | 19.2 | ||
| Income tax | 0.1 | (0.1) | ||
| Depreciation and amortization expense | 7.7 | 30.6 | ||
| Impairment of intangible assets | 0.0 | 23.0 | ||
| Mark-to-market impact of economic hedges | (17.1) | (6.3) | ||
| Purchase accounting amortizations | 6.6 | 8.9 | ||
| Speculative trading | 0.0 | 2.4 | ||
| Write-down of emission allowances | 0.0 | 31.7 | ||
| Ongoing Optim Energy EBITDA | (0.1) | 48.9 | ||
| 50 percent of Ongoing EBITDA (PNMR share) | $ - | $ 24.5 | ||
PNM Resources
Schedule 8
Reconciliation of Ongoing (non-GAAP) Net Earnings
to GAAP Consolidated Statement of Earnings (Loss)
(Preliminary and Unaudited)
(in thousands, except per share data)
| Year Ended December 31, | ||||||||||||||
| 2009 | 2008 | |||||||||||||
| GAAP | Adjustments | Ongoing | GAAP | Adjustments | Ongoing | |||||||||
| (in thousands, except per share data) | ||||||||||||||
| Operating revenues | $1,647,744 | $ 31,842 | (a) | $1,679,586 | $1,959,522 | $ (7,497) | (i) | $1,952,025 | ||||||
| Cost of energy | 717,989 | 28,930 | (b) | 746,919 | 1,239,854 | (50,899) | (k) | 1,188,955 | ||||||
| Gross margin | 929,755 | 2,912 | 932,667 | 719,668 | 43,402 | 763,070 | ||||||||
| Other operating expenses | 589,864 | (30,523) | (c) | 559,341 | 805,120 | (272,500) | (l) | 532,620 | ||||||
| Depreciation and amortization | 147,949 | (2,829) | (d) | 145,120 | 144,362 | (1,410) | (d) | 142,952 | ||||||
| Operating income (loss) | 191,942 | 36,264 | 228,206 | (229,814) | 317,312 | 87,498 | ||||||||
| Equity in net earnings (loss) of Optim Energy | (30,145) | 29,222 | (e) | (923) | (29,687) | 25,497 | (m) | (4,190) | ||||||
| Net other income (deductions) | 55,159 | (35,260) | (f) | 19,899 | 4,075 | 15,534 | (n) | 19,609 | ||||||
| Interest charges | (122,205) | - | (122,205) | (132,955) | 4,758 | (o) | (128,197) | |||||||
| Earnings (Loss) before Income Taxes | 94,751 | 30,226 | 124,977 | (388,381) | 363,101 | (25,280) | ||||||||
| Income Taxes (Benefit) | 28,818 | 16,978 | (g) | 45,796 | (90,816) | 78,786 | (g) | (12,030) | ||||||
| Earnings (Loss) from Continuing Operations | 65,933 | 13,248 | 79,181 | (297,565) | 284,315 | (13,250) | ||||||||
| Earnings from Discontinued Operations, net | ||||||||||||||
| of Income Taxes | 70,801 | (63,114) | (h) | 7,687 | 34,628 | (12,684) | (p) | 21,944 | ||||||
| Net Earnings (Loss) | 136,734 | (49,866) | 86,868 | (262,937) | 271,631 | 8,694 | ||||||||
| Earnings Attributable to Valencia Non-controlling | ||||||||||||||
| Interest | (11,890) | 11,890 | (d) | - | (7,179) | 7,179 | (d) | - | ||||||
| Preferred Stock Dividend Requirements of Subsidiary | (528) | - | (528) | (528) | - | (528) | ||||||||
| Net Earnings (Loss) Attributable to PNMR | $ 124,316 | $ (37,976) | $ 86,340 | $ (270,644) | $ 278,810 | $ 8,166 | ||||||||
| Earnings (Loss) from Continuing Operations Attributable to PNMR per Common Share: | ||||||||||||||
| Basic | $ 0.58 | $ 0.28 | $ 0.86 | $ (3.66) | $ 3.50 | $ (0.16) | ||||||||
| Diluted | $ 0.58 | $ 0.28 | $ 0.86 | $ (3.66) | $ 3.50 | $ (0.16) | ||||||||
| Net Earnings (Loss) Attributable to PNMR per Common Share: | ||||||||||||||
| Basic | $ 1.36 | $ (0.42) | $ 0.94 | $ (3.24) | $ 3.34 | $ 0.10 | ||||||||
| Diluted | $ 1.36 | $ (0.42) | $ 0.94 | $ (3.24) | $ 3.34 | $ 0.10 | ||||||||
| Average common shares outstanding: | ||||||||||||||
| Basic | 91,435 | 83,468 | ||||||||||||
| Diluted | 91,671 | 83,468 | ||||||||||||
| (a) | Mark-to-market impact of economic hedges $(127); Settlement of legal proceeding $31,969 | |||||||||||||
| (b) | Mark-to-market impact of economic hedges $10,754; Consolidation of Valencia $18,176 | |||||||||||||
| (c) | Business improvement plan $37; Post sale discontinued operations $6; Work continuance planning $(633); Regulatory recoveries/disallowances $(26,476); Consolidation of Valencia $(3,457) | |||||||||||||
| (d) | Consolidation of Valencia | |||||||||||||
| (e) | Mark-to-market impact of economic hedges $3,429; Write-down of emission allowances $25,793 | |||||||||||||
| (f) | Net change in unrealized impairments of NDT securities $(5,816); Business improvement plan $(10); Gain on reaquired debt $(7,312); Sale of water rights $(1,272); Interest on uncertain tax positions $(5,850); CapRock settlement $(15,000) | |||||||||||||
| (g) | Net taxes on nonrecurring items | |||||||||||||
| (h) | Depreciation associated with sale of gas assets $(1,112); Gain on sale of gas operations $(65,341); Post sale discontinued operations $3,339 | |||||||||||||
| (i) | Mark-to-market impact of economic hedges $(1,062); Speculative trading $49,931; Gain on sale of merchant portfolio $(56,366) | |||||||||||||
| (k) | Mark-to-market impact of economic hedges $(10,037); Gain on sale of merchant portfolio $(51,263); Consolidation of Valencia $10,401 | |||||||||||||
| (l) | Business improvement plan $(10,982); Acquisition/Divestiture $(5,929); Regulatory disallowances $(30,248); Impairment of intangible assets $(221,769); Afton write-down $(1,985); Consolidation of Valencia $(1,587) | |||||||||||||
| (m) | Mark-to-market impact of economic hedges $(2,827); Speculative trading $1,223; Impairment of intangible assets $11,231; Write-off of emission allowances $15,870 | |||||||||||||
| (n) | Business improvement plan $227; Interest on uncertain tax positions $3,014; Net change in unrealized impairments of NDT securities $12,293 | |||||||||||||
| (o) | Acquisition/Divestiture $4,533; Consolidation of Valencia $225 | |||||||||||||
| (p) | Acquisition/Divestiture $13; Business improvement plan $312; Depreciation on gas assets $(13,004); Mark-to-market impact of economic hedges $1; Interest on uncertain tax positions $(6) | |||||||||||||
PNM RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(Unaudited)
| Year Ended December 31, | ||||||||||||
| 2009 | 2008 | 2007 | ||||||||||
| (In thousands, except per share amounts) | ||||||||||||
| Operating Revenues: | ||||||||||||
| Electric | $ | 1,647,485 | $ | 1,959,241 | $ | 1,912,824 | ||||||
| Other | 259 | 281 | 1,205 | |||||||||
| Total operating revenues | 1,647,744 | 1,959,522 | 1,914,029 | |||||||||
| Operating Expenses: | ||||||||||||
| Cost of energy | 717,989 | 1,239,854 | 1,121,525 | |||||||||
| Administrative and general | 262,282 | 253,311 | 214,588 | |||||||||
| Energy production costs | 185,228 | 193,899 | 201,483 | |||||||||
| Impairment of goodwill and other intangible assets | - | 221,769 | - | |||||||||
| Regulatory disallowances | 27,542 | 30,248 | - | |||||||||
| Depreciation and amortization | 147,949 | 144,362 | 135,695 | |||||||||
| Transmission and distribution costs | 63,311 | 58,702 | 57,774 | |||||||||
| Taxes other than income taxes | 51,501 | 47,191 | 57,922 | |||||||||
| Total operating expenses | 1,455,802 | 2,189,336 | 1,788,987 | |||||||||
| Operating income (loss) | 191,942 | (229,814 | ) | 125,042 | ||||||||
| Other Income and Deductions: | ||||||||||||
| Interest income | 28,389 | 24,096 | 43,154 | |||||||||
| Gains (losses) on investments held by NDT | 4,502 | (15,233 | ) | 11,599 | ||||||||
| Other income | 31,629 | 6,478 | 7,443 | |||||||||
| Equity in net earnings (loss) of Optim Energy | (30,145 | ) | (29,687 | ) | 7,581 | |||||||
| Other deductions | (9,361 | ) | (11,266 | ) | (11,552 | ) | ||||||
| Net other income (deductions) | 25,014 | (25,612 | ) | 58,225 | ||||||||
| Interest Charges | 122,205 | 132,955 | 120,155 | |||||||||
| Earnings (Loss) before Income Taxes | 94,751 | (388,381 | ) | 63,112 | ||||||||
| Income Taxes (Benefit) | 28,818 | (90,816 | ) | 3,226 | ||||||||
| Earnings (Loss) from Continuing Operations | 65,933 | (297,565 | ) | 59,886 | ||||||||
| Earnings from Discontinued Operations, net of Income | ||||||||||||
| Taxes of $36,687, $22,957, and $10,394 | 70,801 | 34,628 | 15,516 | |||||||||
| Net Earnings (Loss) | 136,734 | (262,937 | ) | 75,402 | ||||||||
| Earnings Attributable to Valencia Non-controlling Interest | (11,890 | ) | (7,179 | ) | - | |||||||
| Preferred Stock Dividend Requirements of Subsidiary | (528 | ) | (528 | ) | (528 | ) | ||||||
| Net Earnings (Loss) Attributable to PNMR | $ | 124,316 | $ | (270,644 | ) | $ | 74,874 | |||||
| Earnings (Loss) from Continuing Operations Attributable to PNMR per Common Share: | ||||||||||||
| Basic | $ | 0.58 | $ | (3.66 | ) | $ | 0.77 | |||||
| Diluted | $ | 0.58 | $ | (3.66 | ) | $ | 0.76 | |||||
| Net Earnings (Loss) Attributable to PNMR per Common Share: | ||||||||||||
| Basic | $ | 1.36 | $ | (3.24 | ) | $ | 0.98 | |||||
| Diluted | $ | 1.36 | $ | (3.24 | ) | $ | 0.96 | |||||
| Dividends Declared per Common Share | $ | 0.500 | $ | 0.605 | $ | 0.920 | ||||||
PNM RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| December 31, | ||||||||
| 2009 | 2008 | |||||||
| (In thousands) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 14,641 | $ | 140,619 | ||||
| Special deposits | 52 | 3,480 | ||||||
| Accounts receivable, net of allowance for uncollectible accounts of $12,783 and $21,466 | 106,593 | 119,174 | ||||||
| Unbilled revenues | 78,274 | 81,126 | ||||||
| Other receivables | 77,672 | 73,083 | ||||||
| Materials, supplies, and fuel stock | 50,631 | 49,397 | ||||||
| Regulatory assets | 7,476 | 1,541 | ||||||
| Derivative instruments | 50,619 | 51,250 | ||||||
| Income taxes receivable | 129,171 | 49,584 | ||||||
| Current assets of discontinued operations | - | 107,986 | ||||||
| Other current assets | 63,076 | 75,393 | ||||||
| Total current assets | 578,205 | 752,633 | ||||||
| Other Property and Investments: | ||||||||
| Investment in PVNGS lessor notes | 137,511 | 168,729 | ||||||
| Equity investment in Optim Energy | 195,666 | 239,950 | ||||||
| Investments held by NDT | 137,032 | 111,671 | ||||||
| Other investments | 25,528 | 32,966 | ||||||
| Non-utility property, net of accumulated depreciation of $3,779 and $2,582 | 7,923 | 9,135 | ||||||
| Total other property and investments | 503,660 | 562,451 | ||||||
| Utility Plant: | ||||||||
| Plant in service and plant held for future use | 4,693,530 | 4,476,745 | ||||||
| Less accumulated depreciation and amortization | 1,611,496 | 1,545,950 | ||||||
| 3,082,034 | 2,930,795 | |||||||
| Construction work in progress | 181,078 | 202,556 | ||||||
| Nuclear fuel, net of accumulated amortization of $19,456 and $16,018 | 69,337 | 58,674 | ||||||
| Net utility plant | 3,332,449 | 3,192,025 | ||||||
| Deferred Charges and Other Assets: | ||||||||
| Regulatory assets | 524,136 | 629,141 | ||||||
| Goodwill | 321,310 | 321,310 | ||||||
| Other intangible assets, net of accumulated amortization of $5,272 and $4,672 | 26,567 | 27,167 | ||||||
| Derivative instruments | 2,413 | 25,620 | ||||||
| Non-current assets of discontinued operations | - | 561,915 | ||||||
| Other deferred charges | 71,181 | 75,720 | ||||||
| Total deferred charges and other assets | 945,607 | 1,640,873 | ||||||
| $ | 5,359,921 | $ | 6,147,982 | |||||
PNM RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| December 31, | ||||||||
| 2009 | 2008 | |||||||
| (In thousands, except share information) | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Short-term debt | $ | 198,000 | $ | 744,667 | ||||
| Current installments of long-term debt | 2,125 | 205,694 | ||||||
| Accounts payable | 111,432 | 174,068 | ||||||
| Accrued interest and taxes | 45,341 | 51,618 | ||||||
| Regulatory liabilities | 908 | 1,746 | ||||||
| Derivative instruments | 24,025 | 33,951 | ||||||
| Current liabilities of discontinued operations | - | 77,082 | ||||||
| Other current liabilities | 181,442 | 139,562 | ||||||
| Total current liabilities | 563,273 | 1,428,388 | ||||||
| Long-term Debt | 1,565,206 | 1,379,011 | ||||||
| Deferred Credits and Other Liabilities: | ||||||||
| Accumulated deferred income taxes | 531,166 | 572,719 | ||||||
| Accumulated deferred investment tax credits | 20,518 | 23,834 | ||||||
| Regulatory liabilities | 350,324 | 327,175 | ||||||
| Asset retirement obligations | 70,963 | 63,492 | ||||||
| Accrued pension liability and postretirement benefit cost | 281,923 | 246,136 | ||||||
| Derivative instruments | 4,549 | 6,934 | ||||||
| Non-current liabilities of discontinued operations | - | 94,615 | ||||||
| Other deferred credits | 121,394 | 149,237 | ||||||
| Total deferred credits and other liabilities | 1,380,837 | 1,484,142 | ||||||
| Total liabilities | 3,509,316 | 4,291,541 | ||||||
| Commitments and Contingencies (See Note 16) | ||||||||
| Cumulative Preferred Stock of Subsidiary | ||||||||
| without mandatory redemption requirements ($100 stated value, 10,000,000 shares authorized: | ||||||||
| issued and outstanding 115,293 shares) | 11,529 | 11,529 | ||||||
| Equity: | ||||||||
| PNMR Convertible Preferred Stock, Series A, without mandatory redemption requirements | ||||||||
| (no stated value, 10,000,000 shares authorized: issued and outstanding 477,800 shares) | 100,000 | 100,000 | ||||||
| PNMR common stockholders’ equity: | ||||||||
| Common stock outstanding (no par value, 120,000,000 shares authorized: issued | ||||||||
| and outstanding 86,673,174 and 86,531,644 shares) | 1,289,890 | 1,288,168 | ||||||
| Accumulated other comprehensive income (loss), net of income taxes | (46,057 | ) | 30,948 | |||||
| Retained earnings | 405,884 | 327,290 | ||||||
| Total PNMR common stockholders’ equity | 1,649,717 | 1,646,406 | ||||||
| Non-controlling interest in Valencia | 89,359 | 98,506 | ||||||
| Total equity | 1,839,076 | 1,844,912 | ||||||
| $ | 5,359,921 | $ | 6,147,982 | |||||
PNM RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Year Ended December 31, | ||||||||||||
| 2009 | 2008 | 2007 | ||||||||||
| (In thousands) | ||||||||||||
| Cash Flows From Operating Activities: | ||||||||||||
| Net earnings (loss) | $ | 136,734 | $ | (262,937 | ) | $ | 75,402 | |||||
| Adjustments to reconcile net earnings (loss) to net cash flows from operating activities: | ||||||||||||
| Depreciation and amortization | 173,446 | 167,111 | 179,396 | |||||||||
| Amortization of prepayments on PVNGS firm-sales contracts | (26,150 | ) | (16,637 | ) | - | |||||||
| Bad debt expense | 44,071 | 59,635 | 20,265 | |||||||||
| Deferred income tax expense (benefit) | 27,727 | (46,692 | ) | 35,423 | ||||||||
| Equity in net (earnings) loss of Optim Energy | 30,145 | 29,687 | (7,581 | ) | ||||||||
| Net unrealized (gains) losses on derivatives | (9,570 | ) | 7,370 | 9,138 | ||||||||
| Realized (gains) losses on investments held by NDT | (4,502 | ) | 15,233 | (11,599 | ) | |||||||
| Realized loss on Altura contribution | - | - | 3,089 | |||||||||
| Impairment of goodwill and other intangible assets | - | 221,769 | 3,380 | |||||||||
| Impairment of utility plant | - | - | 19,500 | |||||||||
| Gain on sale of PNM Gas | (98,425 | ) | - | - | ||||||||
| Gain on reacquired debt | (7,317 | ) | - | - | ||||||||
| Amortization of fair value of acquired Twin Oaks sales contract | - | - | (35,073 | ) | ||||||||
| Stock based compensation expense | 2,188 | 3,261 | 7,557 | |||||||||
| Regulatory disallowances | 27,542 | 30,248 | - | |||||||||
| Settlement of legal proceeding | 31,969 | - | - | |||||||||
| Other, net | (5,789 | ) | (6,345 | ) | (5,131 | ) | ||||||
| Changes in certain assets and liabilities: | ||||||||||||
| Accounts receivable and unbilled revenues | (79,546 | ) | (42,702 | ) | (41,137 | ) | ||||||
| Materials, supplies, and fuel stock | (1,083 | ) | (9,921 | ) | (104 | ) | ||||||
| Other current assets | 47,559 | (34,399 | ) | 19,147 | ||||||||
| Other assets | 725 | (28,300 | ) | (4,316 | ) | |||||||
| Accounts payable | (70,540 | ) | 2,516 | 4,423 | ||||||||
| Accrued interest and taxes | (94,996 | ) | (16,051 | ) | (6,402 | ) | ||||||
| Other current liabilities | (20,980 | ) | 3,314 | (26,588 | ) | |||||||
| Other liabilities | (15,502 | ) | 12,465 | (15,728 | ) | |||||||
| Net cash flows from operating activities | 87,706 | 88,625 | 223,061 | |||||||||
| Cash Flows From Investing Activities: | ||||||||||||
| Utility plant additions | (288,031 | ) | (344,951 | ) | (455,944 | ) | ||||||
| Proceeds from sales of investments held by NDT | 124,054 | 180,296 | 163,642 | |||||||||
| Purchases of investments held by NDT | (129,833 | ) | (185,439 | ) | (172,327 | ) | ||||||
| Proceeds from sale of PNM Gas | 652,933 | - | - | |||||||||
| Transaction costs for sale of PNM Gas | (11,162 | ) | - | - | ||||||||
| Proceeds from sales of utility plant | - | 1,458 | 55,041 | |||||||||
| Return of principal on PVNGS lessor notes | 27,068 | 22,506 | 22,842 | |||||||||
| Investments in Optim Energy | - | - | (45,040 | ) | ||||||||
| Distributions from Optim Energy | - | - | 362,282 | |||||||||
| Change in restricted special deposits | 359 | 7,493 | (7,852 | ) | ||||||||
| Other, net | 4,338 | (2,078 | ) | 3,825 | ||||||||
| Net cash flows from investing activities | 379,726 | (320,715 | ) | (73,531 | ) | |||||||
PNM RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Year Ended December 31, | ||||||||||||
| 2009 | 2008 | 2007 | ||||||||||
| (In thousands) | ||||||||||||
| Cash Flows From Financing Activities: | ||||||||||||
| Short-term borrowings (repayments), net | (546,667 | ) | 78,767 | (98,445 | ) | |||||||
| Long-term borrowings | 345,242 | 452,750 | 20,000 | |||||||||
| Repayment of long-term debt | (352,084 | ) | (450,826 | ) | (102,284 | ) | ||||||
| Issuance of common stock | 1,245 | 250,956 | 4,281 | |||||||||
| Proceeds from stock option exercise | - | 86 | 11,001 | |||||||||
| Purchase of common stock to satisfy stock awards | (951 | ) | (1,401 | ) | (18,267 | ) | ||||||
| Excess tax benefits (tax shortfall) from stock-based payment arrangements | (760 | ) | (560 | ) | 12 | |||||||
| Payments received on PVNGS firm-sales contracts | 30,737 | 88,509 | - | |||||||||
| Dividends paid | (46,229 | ) | (58,026 | ) | (70,864 | ) | ||||||
| Equity transactions with Valencia’s owner | (13,639 | ) | - | - | ||||||||
| Debt issuance costs and other | (10,329 | ) | (5,312 | ) | (592 | ) | ||||||
| Net cash flows from financing activities | (593,435 | ) | 354,943 | (255,158 | ) | |||||||
| Change in Cash and Cash Equivalents | (126,003 | ) | 122,853 | (105,628 | ) | |||||||
| Cash and Cash Equivalents at Beginning of Year | 140,644 | 17,791 | 123,419 | |||||||||
| Cash and Cash Equivalents at End of Year | $ | 14,641 | $ | 140,644 | $ | 17,791 | ||||||
| Supplemental Cash Flow Disclosures: | ||||||||||||
| Interest paid, net of capitalized interest | $ | 118,798 | $ | 144,944 | $ | 121,845 | ||||||
| Income taxes paid (refunded), net | $ | 118,160 | $ | (2,751 | ) | $ | (21,390 | ) | ||||
| Supplemental schedule of noncash investing and financing activities: | ||||||||||||
| As of June 1, 2007, PNMR contributed its ownership of Altura to Optim Energy at a fair value of $549.6 million after an adjustment for working capital changes. See Note 22. In conjunction with the contribution, PNMR removed Altura’s assets and liabilities from its balance sheet as follows: | ||||||||||||
| Current assets | $ | 22,529 | ||||||
| Utility plant, net | 575,906 | |||||||
| Deferred charges | 46,018 | |||||||
| Total assets contributed | 644,453 | |||||||
| Current liabilities | 63,268 | |||||||
| Deferred credits and other liabilities | 38,095 | |||||||
| Total liabilities contributed | 101,363 | |||||||
| Other comprehensive income | (12,651 | ) | ||||||
| Total liabilities and OCI contributed | 88,712 | |||||||
| Net contribution to Optim Energy | $ | 555,741 | ||||||
| Utility plant purchased in 2007 through assumption of long-term debt that eliminates | ||||||||
| a portion of investment in PVNGS lessor notes in consolidation. See Note 2. | $ | 41,152 | ||||||
| Activities related to consolidation of Valencia: | ||||||||
| Initial consolidation at May 30, 2008: | ||||||||
| Utility plant additions | $ | 87,310 | ||||||
| Increase in short-term borrowings | 82,468 | |||||||
| Non-controlling interest transactions as of July 10, 2008: | ||||||||
| Reduction in short-term borrowings | 88,059 | |||||||
| Increase in non-controlling interest in Valencia | 90,148 | |||||||
| Convertible preferred stock issued under forward purchase contract upon | ||||||||
| tender of senior unsecured notes | $ | 100,000 | ||||||
The following table shows PNM Electric operating revenues by customer class, including intersegment revenues and average number of customers:
| Year Ended December 31, | Change | |||||||||||||||||||
| 2009 | 2008(1) | 2007(1) | 2009/2008 | 2008/2007 | ||||||||||||||||
| (In millions, except customers) | ||||||||||||||||||||
| Residential | $ | 321.0 | $ | 296.1 | $ | 265.4 | $ | 24.9 | $ | 30.7 | ||||||||||
| Commercial | 330.6 | 326.4 | 294.8 | 4.2 | 31.6 | |||||||||||||||
| Industrial | 79.5 | 100.7 | 100.0 | (21.2 | ) | 0.7 | ||||||||||||||
| Public authority | 19.8 | 19.1 | 15.1 | 0.7 | 4.0 | |||||||||||||||
| Transmission | 36.1 | 33.2 | 32.3 | 2.9 | 0.9 | |||||||||||||||
| Firm requirements wholesale | 29.0 | 46.9 | 46.3 | (17.9 | ) | 0.6 | ||||||||||||||
| Other sales for resale | 140.3 | 345.9 | 396.6 | (205.6 | ) | (50.7 | ) | |||||||||||||
| Mark-to-market activity | 0.1 | 56.6 | (44.3 | ) | (56.5 | ) | 100.9 | |||||||||||||
| Other | 11.6 | 18.0 | 30.8 | (6.4 | ) | (12.7 | ) | |||||||||||||
| $ | 968.0 | $ | 1,242.9 | $ | 1,137.0 | $ | (274.9 | ) | $ | 106.0 | ||||||||||
| Average retail customers (thousands) | 499.0 | 495.3 | 489.4 | 3.7 | 5.9 | |||||||||||||||
(1) The customer class revenues have been reclassified to be consistent with the current year presentation.
The following table shows PNM Electric GWh sales by customer class:
| Year Ended December 31, | Change | |||||||||||||||||||
| 2009 | 2008(1) | 2007(1) | 2009/2008 | 2008/2007 | ||||||||||||||||
| (Gigawatt hours) | ||||||||||||||||||||
| Residential | 3,264.4 | 3,221.9 | 3,208.6 | 42.5 | 13.3 | |||||||||||||||
| Commercial | 3,899.1 | 4,029.8 | 4,006.4 | (130.7 | ) | 23.4 | ||||||||||||||
| Industrial | 1,454.5 | 1,657.6 | 1,920.1 | (203.1 | ) | (262.5 | ) | |||||||||||||
| Public authority | 249.6 | 253.1 | 236.7 | (3.5 | ) | 16.4 | ||||||||||||||
| Firm requirements wholesale | 689.7 | 1,123.5 | 1,121.7 | (433.8 | ) | 1.8 | ||||||||||||||
| Other sales for resale | 3,996.3 | 5,095.2 | 6,897.3 | (1,098.9 | ) | (1,802.1 | ) | |||||||||||||
| 13,553.6 | 15,381.1 | 17,390.8 | (1,827.5 | ) | (2,009.7 | ) | ||||||||||||||
(1) The customer class volumes have been reclassified to be consistent with the current year presentation.
The following table shows TNMP Electric operating revenues by customer class, including intersegment revenues, and average number of customers:
| Year Ended December 31, | Change | |||||||||||||||||||
| 2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
| (In millions, except customers) | ||||||||||||||||||||
| Residential | $ | 74.7 | $ | 71.7 | $ | 69.5 | $ | 3.0 | $ | 2.2 | ||||||||||
| Commercial | 73.3 | 72.8 | 70.1 | 0.5 | 2.7 | |||||||||||||||
| Industrial | 12.1 | 13.8 | 7.9 | (1.7 | ) | 5.9 | ||||||||||||||
| Other | 32.5 | 32.0 | 32.9 | 0.6 | (0.9 | ) | ||||||||||||||
| $ | 192.6 | $ | 190.3 | $ | 180.4 | $ | 2.4 | $ | 9.9 | |||||||||||
Average customers (thousands) (1) | 230.9 | 229.5 | 226.2 | 1.4 | 3.3 | |||||||||||||||
| (1) | Under TECA, customers of TNMP Electric in Texas have the ability to choose First Choice or any other REP to provide energy. The average customers reported above include 86,575, 112,638, and 137,015 customers of TNMP Electric at December 31, 2009, 2008, and 2007 who have chosen First Choice as their REP. These customers are also included in the First Choice segment. |
The following table shows TNMP Electric GWh sales by customer class:
| Year Ended December 31, | Change | |||||||||||||||||||
| 2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
(Gigawatt hours)(1) | ||||||||||||||||||||
| Residential | 2,582.6 | 2,533.0 | 2,520.6 | 49.6 | 12.4 | |||||||||||||||
| Commercial | 2,216.9 | 2,206.2 | 2,196.0 | 10.7 | 10.2 | |||||||||||||||
| Industrial | 1,983.2 | 2,094.8 | 1,927.9 | (111.6 | ) | 166.9 | ||||||||||||||
| Other | 107.1 | 107.5 | 100.6 | (0.4 | ) | 6.9 | ||||||||||||||
| 6,889.8 | 6,941.5 | 6,745.1 | (51.7 | ) | 196.4 | |||||||||||||||
| (1) | The GWh sales reported above include 1,131.9, 1,563.3, and 2,018.1 GWhs for December 31, 2009, 2008, and 2007 used by customers of TNMP Electric who have chosen First Choice as their REP. These GWhs are also included below in the First Choice segment. |
The following table shows First Choice operating revenues by customer class, including intersegment revenues, and actual number of customers:
| Year Ended December 31, | Change | |||||||||||||||||||
| 2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
| (In millions, except customers) | ||||||||||||||||||||
| Residential | $ | 349.6 | $ | 407.3 | $ | 390.3 | $ | (57.7 | ) | $ | 17.0 | |||||||||
| Mass-Market | 25.7 | 52.7 | 61.0 | (27.0 | ) | (8.3 | ) | |||||||||||||
| Mid-Market | 133.1 | 149.3 | 141.6 | (16.2 | ) | 7.7 | ||||||||||||||
| Trading gains (losses) | - | (49.9 | ) | (3.6 | ) | 49.9 | (46.3 | ) | ||||||||||||
| Other | 20.4 | 22.8 | 11.4 | (2.4 | ) | 11.4 | ||||||||||||||
| $ | 528.8 | $ | 582.2 | $ | 600.7 | $ | (53.4 | ) | $ | (18.5 | ) | |||||||||
Actual customers (thousands) (1,2) | 225.0 | 237.4 | 258.4 | (12.4 | ) | (21.0 | ) | |||||||||||||
| (1) | See note above in the TNMP Electric segment discussion about the impact of TECA. |
| (2) | Due to the competitive nature of First Choice’s business, actual customer count at December 31 is presented in the table above as a more representative business indicator than the average customers that are shown in the table for TNMP customers. |
The following table shows First Choice GWh electric sales by customer class:
| Year Ended December 31, | Change | |||||||||||||||||||
| 2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
(Gigawatt hours(1)) | ||||||||||||||||||||
| Residential | 2,441.6 | 2,547.5 | 2,796.9 | (105.9 | ) | (249.4 | ) | |||||||||||||
| Mass-Market | 145.6 | 278.3 | 371.8 | (132.7 | ) | (93.5 | ) | |||||||||||||
| Mid-Market | 1,063.6 | 1,176.8 | 1,197.3 | (113.2 | ) | (20.5 | ) | |||||||||||||
| Other | 9.7 | 16.3 | 21.1 | (6.6 | ) | (4.8 | ) | |||||||||||||
| 3,660.5 | 4,018.9 | 4,387.1 | (358.4 | ) | (368.2 | ) | ||||||||||||||
(1) See note above in the TNMP Electric segment discussion about the impact of TECA.
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