Exhibit 99.1
PNM Earnings Nearly Triple Over Same Quarter Last Year
ALBUQUERQUE, N.M. July 17, 2001 - PNM, Public Service Company of New Mexico
(NYSE:PNM) today reported net earnings for the three months ended June 30, 2001,
of $49.6 million, or $1.24 per share of common stock (diluted). In the
comparable three months in 2000, earnings were $18.0 million, or $0.45 per
diluted share. Operating revenues for the quarter totaled $666.1 million, more
than doubling from the $329.0 million of the previous year.
PNM net earnings for the first six months of 2001 totaled $113.1 million, or
$2.84 per diluted share, up from net earnings of $39.9 million, or $1.00 per
diluted share, in the comparable period last year.
Earnings for the quarter and first six months of 2001 benefited from continued
strong energy demand in the Western U.S., according to PNM Chairman, President
and Chief Executive Officer Jeff Sterba.
"Over the past 18 months, our power marketing people have demonstrated their
ability to adapt successfully to the demands of a rapidly changing market,"
Sterba said. The latest change in market dynamics was initiated by the Federal
Energy Regulatory Commission (FERC) June 19 order capping wholesale power prices
in the region, Sterba noted.
"It is still too early to fully quantify the impact of that order on PNM
revenues and earnings going forward, " Sterba said. "Nevertheless, for the full
year 2001, PNM earnings are expected to be between $4.25 and $4.50 per share. We
continue to believe that, underlying our recent exceptionally strong results,
this company can produce sustainable earnings beginning in 2002 in the range of
$3.50 per share annually."
Included in PNM second quarter results is an unrealized loss of $27.3 million,
or $0.41 per diluted share, reflecting the reduced current market value of
trading contracts held by the company's power marketing business.
Second quarter earnings were also reduced by a charge of $3.6 million, or $0.06
per diluted share, related to the company's proposed transaction with Western
Resources. PNM net earnings excluding those charges were $1.30 per diluted
share. Other non-recurring items affecting second quarter results reduced
earnings by approximately $18.0 million, or $0.27 per diluted share. These
non-recurring charges include the write-off of certain non-recoverable coal mine
decommissioning costs and donations to the PNM Foundation. Ongoing earnings were
$1.57 per diluted share for the second quarter 2001 and $3.21 per diluted share
for the year to date. There were no non-recurring items recorded during the
first and second quarters of 2000.
Retail electric revenues totaled approximately $128.6 million for the quarter
and $254.9 million for the six months ended June 30, compared to $125.4 million
in the second quarter of 2000 and $246.8 million in the first half of 2000. PNM
believes it has adequate generation resources with a sufficient reserve margin
to serve its jurisdictional customers.
Retail electric sales in the first six months of 2001 totaled almost 3.5 million
megawatt hours, up 3.3 percent from the comparable period last year. Wholesale
sales for the six months ended June 30, 2001, totaled 6.3 million megawatt
hours, unchanged from the comparable period in the previous year.
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Gross margin (operating revenues less fuel and purchased power expenses)
increased $83.5 million, or 56.5 percent, in the second quarter compared to the
same period last year. Non-fuel operations and maintenance expenses increased
$7.4 million, or 8.8 percent for the quarter, including increased pension costs
of $5.0 million, relating to lower than expected investment returns.
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.
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Exhibit 99.1 (continued)
PUBLIC SERVICE COMPANY OF NEW MEXICO & SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
Three Months Ended Six Months Ended Twelve Months Ended
June 30 June 30 June 30
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2001 2000 2001 2000 2001 2000
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(In thousands except per share amounts)
Operating Revenues:
Utility ........................................ $223,629 $184,833 $550,087 $405,477 $1,003,999 $780,341
Generation and Trading ......................... 524,758 221,911 1,015,923 398,208 1,692,893 803,601
Unregulated .................................... 1,277 1,343 1,277 1,692 1,743 6,847
Intersegment eliminations ...................... (83,573) (79,046) (164,666) (155,045) (335,072) (317,103)
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Total operating revenues ....................... 666,091 329,041 1,402,621 650,332 2,363,563 1,273,686
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Operating Expenses:
Cost of energy sold ............................ 433,841 180,394 930,939 348,117 1,532,702 661,706
Operation and maintenance expenses ............. 91,726 84,263 181,516 167,382 361,626 349,959
Depreciation and amortization .................. 23,929 22,633 48,148 46,642 94,565 92,877
Taxes, other than income taxes ................. 7,839 8,465 15,056 16,131 33,330 32,046
Income taxes, net .............................. 28,209 5,632 69,115 13,459 109,619 22,733
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Total operating expenses ....................... 585,544 301,387 1,244,774 591,731 2,131,842 1,159,321
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Operating income ............................... 80,547 27,654 157,847 58,601 231,721 114,365
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Other Income and Deductions, Net of Tax ........ (14,588) 6,753 (11,954) 14,258 7,702 32,048
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Income before interest charges ................. 65,959 34,407 145,893 72,859 239,423 146,413
Net Interest Charges ........................... 16,362 16,421 32,744 32,921 65,265 68,163
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Net Earnings ................................... 49,597 17,986 113,149 39,938 174,158 78,250
Preferred Stock Dividend Requirements .......... 147 147 293 293 586 586
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Net Earnings Applicable to Common Stock ........ $49,450 $17,839 $112,856 $39,645 $173,572 $77,664
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Earnings Per Share of Common Stock (Basic) ..... $1.26 $0.45 $2.89 $1.00 $4.43 $1.93
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Average Shares Outstanding (Basic) ............. 39,118 39,536 39,118 39,754 39,171 40,266
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Earnings Per Share of Common Stock (Diluted) ... $1.24 $0.45 $2.84 $1.00 $4.37 $1.93
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Average Shares Outstanding (Diluted) ........... 39,966 39,597 39,782 39,799 39,704 40,321
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Dividends Paid Per Share of Common Stock ....... $0.20 $0.20 $0.40 $0.40 $0.80 $0.80
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