Exhibit 99.1
PNM Reports 2001 First Quarter Earnings
ALBUQUERQUE, N.M. April 18, 2001 - PNM, Public Service Company of New Mexico
(NYSE:PNM), today reported net earnings for the quarter ended March 31, 2001, of
$63.6 million, or $1.60 per share of common stock (diluted), on total operating
revenues of $736.5 million, compared to net earnings of $22.0 million, or $0.55
per share of common stock (diluted) on total operating revenues of $321.3
million in the first quarter of the previous year.
Charges related to the proposed Western Resources acquisition recorded during
the first quarter 2001 reduced net earnings for the period by $0.05 per diluted
share. PNM net earnings before those charges were $1.65 per diluted share. There
were no similar items recorded during the comparable quarter of 2000.
The increase in net income for the latest quarter compared to the first quarter
of the preceding year was largely due to increased revenues from PNM wholesale
power marketing. Wholesale power revenues for the latest quarter totaled $410.7
million, a 310 percent increase over the $100.3 million reported in the
comparable period last year. The increase in revenues was primarily due to
higher wholesale power prices prevailing in the western U.S. during the first
three months of 2001 compared to the same period last year.
Retail electric revenues totaled approximately $126.2 million for the quarter,
an increase of 4.0 percent over the comparable period in 2000. The increase was
primarily due to the effect of weather and to continued growth in the PNM retail
electric sales territory. Temperatures in New Mexico were significantly colder
during the first quarter of 2001 compared to the same three-month period in
2000. Heating degree days (a measure of the variation in daily mean temperature
below 65 degrees Fahrenheit) totaled 2,089 in Albuquerque during the first three
months of 2001, approximately 14 percent more than recorded during the
comparable months in 2000.
Gross margin (operating revenues less fuel and purchased power expenses) was
$239.4 million in the latest quarter, an increase of 56.1 percent over the same
period last year. The increase in gross margin was primarily due to increased
margins in the wholesale power market. Based on its current assessment of price
volatility and credit issues in the wholesale power market, the company provided
an additional allowance against revenues of $13.2 million during the first
quarter.
Non-fuel operations and maintenance expenses for the first quarter 2001
increased 8.3 percent compared to the same period last year, primarily as a
result of a $4.7 million increase in pension and benefits expense. Other income
was reduced $4.9 million compared to the same period last year, primarily due to
valuation allowances related to investments in two energy-related technology
companies.
PNM management now expects full year 2001 earnings to be significantly higher
than the company's previous forecast of $2.60 to $2.70 per share. Because of
continuing volatility in the wholesale power market, the company is not
providing specific earnings guidance for the year. The company believes its
sustainable earnings level is now in the range of $3.50 per share and growing.
However, the currently high wholesale prices have the potential to raise
earnings substantially above that level in the near term.
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Exhibit 99.1 (Continued)
PNM is a combined electric and gas utility serving approximately 1.3 million
people in New Mexico. The company also sells power on the wholesale market in
the Western U.S. PNM stock is traded primarily on the NYSE under the symbol PNM.
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended Twelve Months Ended
March 31 March 31
2001 2000 2001 2000
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(In thousands except per share amounts)
Operating Revenues:
Utility....................................... $ 326,459 $ 220,643 $ 965,204 $ 780,929
Generation and Trading........................ 491,165 176,298 1,390,045 736,826
Unregulated businesses........................ - 349 1,809 5,692
Intersegment eliminations..................... (81,094) (75,999) (330,546) (317,431)
------------- ------------- ------------- -------------
Total operating revenues.................... 736,530 321,291 2,026,512 1,206,016
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Operating Expenses:
Cost of energy sold........................... 497,098 167,723 1,279,255 589,266
Operation and maintenance costs............... 89,790 83,118 354,163 351,499
Depreciation and amortization................. 24,219 24,010 93,268 93,589
Taxes, other than income taxes................ 7,217 7,666 33,956 32,429
Income taxes, net............................. 40,906 7,827 87,043 23,274
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Total operating expenses.................... 659,230 290,344 1,847,685 1,090,057
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Operating income............................ 77,300 30,947 178,827 115,959
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Other Income and Deductions, Net of Tax 2,634 7,505 29,043 31,608
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Income before interest charges.............. 79,934 38,452 207,870 147,567
Net Interest Charges............................ 16,382 16,500 65,324 69,130
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Net Earnings.................................... 63,552 21,952 142,546 78,437
Preferred Stock Dividend Requirements........... 146 146 586 586
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Net Earnings Applicable to Common Stock......... $ 63,406 $ 21,806 $ 141,960 $ 77,851
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Earnings Per Share of Common Stock (Basic)...... $ 1.62 $ 0.55 $ 3.61 $ 1.92
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Average Shares Outstanding (Basic).............. 39,118 39,973 39,275 40,594
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Earnings Per Share of Common Stock (Diluted).... $ 1.60 $ 0.55 $ 3.58 $ 1.91
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Average Shares Outstanding (Diluted)............ 39,599 40,001 39,611 40,655
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Dividends Paid Per Share of Common Stock........ $ 0.20 $ 0.20 $ 0.80 $ 0.80
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