Exhibit 99.1
PNM Reports 2001 Third Quarter Earnings of $32.8 Million
ALBUQUERQUE, N.M. October 24, 2001 - PNM, Public Service Company of New Mexico
(NYSE:PNM) today reported net earnings for the three months ended September 30,
2001, of $32.8 million, or $0.82 per share of common stock (diluted). In the
comparable three months in the preceding year, PNM earnings were $46.9 million,
or $1.18 per diluted share.
Ongoing earnings for the quarter were $0.96 per share. Expenses related to PNM's
transaction with Western Resources and the write-off of an investment in a
technology company reduced earnings by $0.14 per share during the third quarter
2001. One-time gains and charges recorded during the third quarter of 2000 added
a net of 17 cents per share to earnings. Before those special items, ongoing
earnings for the third quarter 2000 were $1.01 per share.
Total operating revenues for the quarter were up nearly 25 percent, to $621.9
million, compared to the same quarter last year. Higher purchased power expenses
and increased operating expenses compared to the same period last year offset
the increase in operating revenue. Operating income of $47.4 million was
unchanged from the comparable three months in 2000.
PNM net earnings for the nine months ended September 30, 2001, totaled $145.9
million, or $3.66 per diluted share, on operating revenues of $2.02 billion. In
the first nine months of last year, PNM net earnings totaled $86.9 million, or
$2.17 per diluted share, on total operating revenues of $1.15 billion.
"PNM continues on track for a record year in revenues and earnings," said PNM
Chairman, President and Chief Executive Officer Jeff Sterba. "Our electric
revenues are up more than 80 percent so far this year compared to last year, and
net earnings for the first nine months of the year were 68 percent higher than
the same period last year."
Electric Sales and Revenues
PNM wholesale power revenues totaled $428.5 million in the third quarter, a 45.7
percent increase over the $294.1 million in wholesale revenues reported for the
comparable period in 2000. Wholesale power sales totaled 3.5 million
megawatt-hours (MWh), compared to wholesale sales of 3.3 million MWh in the
third quarter of 2000.
Total retail electric sales increased 2.4 percent during the third quarter, to 2
million MWh. Retail electric revenues totaled $153.7 million, compared to $150.1
million in the same period last year. Electric gross margin (operating revenues
less fuel and purchased power expenses) was $166.4 million in the third quarter
2001, compared to $158.4 million in the third quarter 2000.
Summer temperatures in New Mexico were warmer than average in 2001, but cooler
than during the same months last year. Cooling degree days (a measure of the
variation in daily mean temperature above 65 degrees Fahrenheit) in the most
recent quarter totaled approximately 7.6 percent less than during the comparable
three months in 2000. The company estimates that weather-adjusted retail
electric sales in the third quarter grew at an average annual rate of 2.5 to 3.0
percent.
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Exhibit 99.1 (continued)
"With this strong third quarter, it's clear that PNM will post record-setting
earnings this year," Sterba said. "We estimate the company's ongoing earnings
will be about $4.50 for 2001. Lower expected wholesale prices next year will
reduce ongoing earnings to the range of between $3.00 and $3.50 a share in 2002.
The lower end of that range is likely if a slowdown in the economy continues
through next year and forward power prices remain at current levels."
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 AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30 September 30 September 30
----------------------- ------------------------ ------------------------
2001 2000 2001 2000 2001 2000
----------- ----------- ------------ ----------- ------------ -----------
Operating Revenues:
Electric................................... $ 582,066 $ 444,101 $1,704,390 $ 943,681 $2,049,900 $1,158,585
Gas........................................ 39,649 55,133 318,670 204,193 434,401 269,472
Unregulated................................ 180 243 1,456 1,935 1,680 4,502
----------- ----------- ------------ ----------- ------------ -----------
Total operating revenues................. 621,895 499,477 2,024,516 1,149,809 2,485,981 1,432,559
----------- ----------- ------------ ----------- ------------ -----------
Operating Expenses:
Cost of energy sold........................ 429,965 316,519 1,360,904 664,636 1,646,149 797,495
Operation and maintenance costs............ 93,867 84,317 275,382 251,699 371,174 344,860
Depreciation and amortization.............. 24,194 23,022 72,343 69,664 95,738 92,586
Taxes, other than income taxes............. 6,380 9,103 21,436 25,234 30,607 31,497
Income taxes, net 20,067 19,064 89,182 32,523 110,623 34,579
----------- ----------- ------------ ----------- ------------ -----------
Total operating expenses................. 574,473 452,025 1,819,247 1,043,756 2,254,291 1,301,017
----------- ----------- ------------ ----------- ------------ -----------
Operating income......................... 47,422 47,452 205,269 106,053 231,690 131,542
----------- ----------- ------------ ----------- ------------ -----------
Other Income and Deductions, Net of Tax...... 1,033 15,569 (10,921) 29,827 (6,834) 39,162
----------- ----------- ------------ ----------- ------------ -----------
Income before interest charges........... 48,455 63,021 194,348 135,880 224,856 170,704
Net Interest Charges......................... 15,680 16,108 48,424 49,029 64,837 66,942
----------- ----------- ------------ ----------- ------------ -----------
Net Earnings................................. 32,775 46,913 145,924 86,851 160,019 103,762
Preferred Stock Dividend Requirements........ 147 147 440 440 586 586
----------- ----------- ------------ ----------- ------------ -----------
Net Earnings Applicable to Common Stock...... $ 32,628 $ 46,766 $145,484 $ 86,411 $159,433 $103,176
=========== =========== ============ =========== ============ ===========
Earnings Per Share of Common Stock (Basic) $ 0.83 $ 1.19 $ 3.72 $ 2.18 $ 4.08 $ 2.59
=========== =========== ============ =========== ============ ===========
Average Shares Outstanding (Basic)........... 39,118 39,363 39,118 39,623 39,109 39,912
=========== =========== ============ =========== ============ ===========
Earnings Per Share of Common Stock (Diluted) $ 0.82 $ 1.18 $ 3.66 $ 2.17 $ 4.01 $ 2.58
=========== =========== ============ =========== ============ ===========
Average Shares Outstanding (Diluted)......... 39,748 39,651 39,771 39,749 39,728 40,016
=========== =========== ============ =========== ============ ===========
Dividends Paid Per Share of Common Stock..... $ 0.20 $ 0.20 $ 0.60 $ 0.60 $ 0.80 $ 0.80
=========== =========== ============ =========== ============ ===========
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