Exhibit 99.1
PNM Reports 2000 Earnings Up 21.3 Percent to $2.53 Per Share
ALBUQUERQUE, N.M., January 24, 2001 -- PNM, Public Service Company of New Mexico
(NYSE:PNM), today reported net earnings for the year ended December 31, 2000, of
$100.9 million, or $2.53 per share of common stock (diluted), a 21.3 percent
increase over 1999 net earnings of $83.2 million, or $2.01 per share.
Earnings in both 1999 and 2000 included certain special gains and charges. These
items, decreased 2000 earnings by a net $0.05 per share, compared to a net
increase of $0.10 per share in the previous year. PNM net earnings from ongoing
operations (before special gains and charges) were $102.6 million, or $2.58 per
share (diluted) in 2000, compared to $78.5 million, or $1.91 per share, in 1999.
For the final quarter of 2000, PNM reported earnings from ongoing operations of
$0.58 per share (diluted) compared to $0.43 per share in the same period in
1999. In the quarter, PNM recorded a special charge of $0.17 per share for the
write-off of certain regulatory assets and $0.06 for costs related to PNM's
proposed acquisition of Western Resources' electric utility assets. Net earnings
in the fourth quarter were $14.1 million, or $0.35 per share (diluted), on total
operating revenues of $461.5 million, compared to net earnings of $16.9 million,
or $0.41 per share, on total operating revenues of $282.7 million in the prior
year.
PNM operating revenues for the year totaled $1.61 billion, up from $1.16 billion
in 1999. Most of the increase in revenues and earnings for 2000 came from PNM's
continued success in the wholesale power business, according to PNM Chairman,
President and Chief Executive Officer Jeff Sterba.
Wholesale power sales totaled 12.4 million megawatt-hours (MWh) for the year, up
about 11 percent over 1999. Revenues from wholesale power sales totaled $748.2
million in 2000, compared to $365.4 million in the prior year.
"PNM's power trading operation benefited from brisk demand and generally high
wholesale prices throughout the West last year," Sterba said. "However, our
wholesale strategy has positioned PNM for long-term success in these markets
regardless of short-term price trends. Our experienced trading team,
strategically located generating plants, and a marketing approach tailored to
our resources have allowed PNM to record substantial gains in wholesale revenues
not just last year, but every year since 1995."
Commenting on dislocations in the California electric power market, Sterba noted
that only a small proportion of PNM power trades are into the California market.
In the fourth quarter, PNM took a reserve of $8.5 million to reflect the
company's risk in the wholesale market. "While under continual review, we
believe this reserve adequately covers our exposure in this market environment
at this time," Sterba said.
"Given our strong performance in 2000, we are raising our earnings guidance for
2001 to between $2.60 and $2.70 a share," Sterba said. That figure excludes
estimated expenses for PNM's proposed acquisition of Western Resources' electric
utility assets.
4
Exhibit 99.1 (continued)
The company experienced a 4.2 percent growth in retail electric sales in 2000.
Retail electric revenues decreased 0.7 percent during the year, however, due to
the effect of an electric rate reduction implemented in the third quarter of
1999.
Gas revenues increased 35.2 percent to $319.9 million in 2000, from $236.7
million in 1999. Pursuant to regulatory order, PNM purchases natural gas in the
open market and resells to customers at cost. As a result, natural gas gross
margin (gas operating revenues less gas purchased for resale) increased only
slightly from $123.8 million in 1999 to $124.6 million
Interest expense was reduced $5.2 million in 2000 compared to 1999, primarily as
the result of the net retirement of about $53 million in debt over the past two
years.
The previously mentioned special items recorded in 2000 included gains of $0.21
per share from settlement of a lawsuit and $0.07 per share from the reversal of
certain reserves associated with the resolution of two gas rate cases, and
charges of $0.16 per share related to the write-off of certain regulatory assets
in the fourth quarter, $0.10 for Western Resources' acquisition related expenses
and $0.07 per share in connection with acquisition of a new, long-term wholesale
customer in July 2000.
Over the past two years, PNM has repurchased 2.7 million shares of common stock
for about $47.4 million. Total number of PNM shares outstanding was reduced from
about 40.7 million at the end of 1999 to 39.1 million at the end of 2000.
PNM is a combined electric and gas utility serving approximately 1.3 million
people in New Mexico. The company's stock is traded primarily on the NYSE under
the symbol PNM. For more information about PNM, see the company's web site at
www.pnm.com
On Thursday, January 25, at 9:00 a.m. (ET), PNM Chairman, President and Chief
Executive Officer Jeff Sterba, together with other members of the PNM management
team, will discuss PNM earnings in a conference call and web cast for analysts
and investors. The call can be accessed by dialing 1-973-694-2225. A rebroadcast
of the call will be available through January 26, 2001 by calling 1-973-709-2089
(enter pass-code 156101).
5
Exhibit 99.1 (continued)
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
2000 1999 2000 1999
------------- ------------- ------------- -------------
(In thousands except per share amounts)
Operating Revenues:
Utility................................................... $ 248,632 $ 188,875 $ 859,389 $ 778,286
Generation................................................ 292,201 164,437 1,075,178 689,981
Unregulated businesses.................................... 223 2,567 2,158 8,855
Intersegment elimination.................................. (79,591) (73,129) (325,451) (319,579)
------------- ------------- ------------- -------------
Total operating revenues................................ 461,465 282,750 1,611,274 1,157,543
------------- ------------- ------------- -------------
Operating Expenses:
Cost of energy sold....................................... 285,245 132,859 949,880 531,952
Operation and maintenance costs........................... 95,792 93,161 347,492 353,757
Depreciation and amortization............................. 23,395 22,922 93,059 92,661
Taxes, other than income taxes............................ 9,171 6,263 34,405 34,084
Income taxes, net......................................... 21,440 2,056 53,964 25,010
------------- ------------- ------------- -------------
Total operating expenses................................ 435,043 257,261 1,478,800 1,037,464
------------- ------------- ------------- -------------
Operating income........................................ 26,422 25,489 132,474 120,079
------------- ------------- ------------- -------------
Other Income and Deductions, Net of Tax 4,087 9,335 33,914 30,202
------------- ------------- ------------- -------------
Income before interest charges.......................... 30,509 34,824 166,388 150,281
Net Interest Charges........................................ 16,413 17,913 65,442 70,667
------------- ------------- ------------- -------------
Net Earnings from Continuing Operations..................... 14,096 16,911 100,946 79,614
Cumulative Effect of a Change in
Accounting Principle, Net of Tax.......................... - - - 3,541
------------- ------------- ------------- -------------
Net Earnings................................................ 14,096 16,911 100,946 83,155
Preferred Stock Dividend Requirements....................... 146 146 586 586
------------- ------------- ------------- -------------
Net Earnings Applicable to Common Stock..................... $ 13,950 $ 16,765 $ 100,360 $ 82,569
============= ============= ============= =============
============= ============= ============= =============
Earnings (Loss) Per Share of Common Stock (Basic):
Cntinuing Operations........................................ $ 0.36 $ 0.41 $ 2.54 $ 1.93
============= ============= ============= =============
============= ============= ============= =============
Net Earnings................................................ $ 0.36 $ 0.41 $ 2.54 $ 2.01
============= ============= ============= =============
============= ============= ============= =============
Average Shares Outstanding (Basic).......................... 39,083 40,772 39,487 41,038
============= ============= ============= =============
Earnings (Loss) Per Share of Common Stock (Diluted):
Continuing Operations....................................... $ 0.35 $ 0.41 $ 2.53 $ 1.93
============= ============= ============= =============
Net Earnings................................................ $ 0.35 $ 0.41 $ 2.53 $ 2.01
============= ============= ============= =============
Average Shares Outstanding (Diluted)........................ 39,598 40,809 39,710 41,103
============= ============= ============= =============
Dividends Paid Per Share of Common Stock.................... $ 0.20 $ 0.20 $ 0.80 $ 0.80
============= ============= ============= =============
6