Exhibit 99.1 PNM Reports 2001 Earnings ALBUQUERQUE, N.M., January 23, 2002 - PNM Resources (NYSE:PNM) today reported net earnings for the year ended December 31, 2001, of $150.4 million, or $3.77 per share of common stock (diluted), an increase of 49 percent over 2000 net earnings of $100.9 million, or $2.53 per share (diluted). Operating revenues for the year totaled $2.35 billion, up 46 percent from $1.61 billion in 2000. Earnings in both 2001 and 2000 included certain special gains and charges (see description below). These items decreased 2001 earnings by a net $0.75 per share, compared to a net decrease of $0.05 per share in the previous year. Net earnings from ongoing operations (before special gains and charges) were $180.1 million, or $4.52 per share (diluted) in 2001, a 75 percent increase over the $103.2 million, or $2.58 per share (diluted) in 2000. "This has been an extraordinary year for our industry and for our company," PNM Chairman, President and Chief Executive Officer Jeff Sterba said of 2001. "Our success demonstrates the basic strength of the PNM strategic plan, which balances the stability of our core utility operations with the growth potential of our electric power marketing business. The challenge for 2002 is to continue to build on that success in a difficult market environment." PNM net earnings in the fourth quarter were $4.5 million, or $0.11 per share (diluted), on total operating revenues of $327.6 million, compared to net earnings of $14.1 million, or $0.35 per share (diluted), on total operating revenues of $461.5 million in the prior year. In the fourth quarter 2001 PNM recorded a special charge of $0.09 per share for costs related to the company's terminated transaction with Western Resources. For the final quarter of 2001, PNM reported earnings from ongoing operations of $0.20 per share (diluted) compared to earnings from ongoing operations of $0.58 per share (diluted) in the same period in 2000. Earnings for the most recent quarter were reduced by the lower wholesale prices prevailing during the period, increased operating expenses due to maintenance outages at the company's primary generating plants, and unusually mild weather in October and November 2001. PNM wholesale power sales totaled 12.6 million megawatt-hours (MWh) for the year, up about 1.8 percent from the 12.4 million MWh sold in 2000. Revenues from wholesale power sales nearly doubled in 2001 to $1.41 billion, compared to $750.4 million in the prior year. Wholesale electric sales accounted for 60 percent of total operating revenue in 2001. Retail electric sales increased 2.3 percent in 2001, to 7.3 million MWh. Retail electric revenues increased 2 percent during the year. Gas operating revenues increased 21 percent to $385.4 million in 2001, from $319.9 million in 2000. Gas gross margin (gas operating revenues less gas purchased for resale) increased 8 percent to $134.1 million in 2001, compared to $124.6 million in 2000. 4 Exhibit 99.1 (continued) Special items recorded in 2001 included $18.0 million of costs associated with the Western Resources transaction, the write-off of $13.0 million in non-recoverable coal mine decommissioning costs, the write-off of $13.1 million in energy-related technology investments and a $5.0 million contribution to the not-for-profit PNM Foundation. Because PNM earnings are partially driven by wholesale power prices in the West, 2002 earnings are not expected to reach 2001 levels. "Wholesale prices in the West remain at lower levels than we believe likely to prevail through the remainder of the year," Sterba said. "Depending on the effect of weather, development of new generation, and regional economic conditions, PNM operating earnings are expected to be at the lower end of the previously identified range of $3.00 to $3.50 per share for the year." On Thursday, January 24, 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 1-973-694-6836. A rebroadcast of the call will be available through January 31, 2002, by calling 1-973-709-2089 and entering access code 221135. PNM Resources is an energy holding company based in Albuquerque, New Mexico. Its principal subsidiary is Public Service Company of New Mexico, which provides electric power and natural gas utility services to more than 1.3 million people in New Mexico. The company also sells power on the wholesale market in the Western U.S. PNM Resources stock is traded primarily on the NYSE under the symbol PNM. 5 Exhibit 99.1 (continued) PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS Three Months Ended Twelve Months Ended December 31 December 31 ---------------------------- ------------------------------- 2001 2000 2001 2000 ------------- ------------- --------------- -------------- (Unaudited) (Unaudited) (In thousands except per share amounts) Operating Revenues Electric.................................... $260,752 $345,510 $1,965,142 $ 1,289,192 Gas......................................... 66,748 115,732 385,418 319,924 Unregulated................................. 81 223 1,538 2,158 ------------- ------------- --------------- -------------- Total operating revenues.................. 327,581 461,465 2,352,098 1,611,274 ------------- ------------- --------------- -------------- Operating Expenses Cost of energy sold......................... 175,662 285,245 1,536,566 949,880 Operation and maintenance expenses.......... 101,465 95,792 376,848 347,492 Depreciation and amortization............... 24,594 23,395 96,936 93,059 Taxes, other than income taxes.............. 8,866 9,171 30,302 34,405 Income taxes, net........................... (413) 21,440 88,769 53,964 ------------- ------------- --------------- -------------- Total operating expenses.................. 310,174 435,043 2,129,421 1,478,800 ------------- ------------- --------------- -------------- Operating income.......................... 17,407 26,422 222,677 132,474 ------------- ------------- --------------- -------------- Other Income and Deductions, Net of Tax........ 3,517 4,087 (7,404) 33,914 ------------- ------------- --------------- -------------- Income before interest charges............ 20,924 30,509 215,273 166,388 Net Interest Charges........................... 16,415 16,413 64,840 65,442 ------------- ------------- --------------- -------------- Net Earnings................................... 4,509 14,096 150,433 100,946 Preferred Stock Dividend Requirements.......... 146 146 586 586 ------------- ------------- --------------- -------------- Net Earnings Applicable to Common Stock........ $ 4,363 $ 13,950 $ 149,847 $ 100,360 ============= ============= =============== ============== Earnings Per Share of Common Stock (Basic)..... $ 0.11 $ 0.36 $ 3.83 $ 2.54 ============= ============= =============== ============== Average Shares Outstanding (Basic)............. 39,118 39,083 39,118 39,487 ============= ============= =============== ============== Earnings Per Share of Common Stock (Diluted)... $ 0.11 $ 0.35 $ 3.77 $ 2.53 ============= ============= =============== ============== Average Shares Outstanding (Diluted)........... 39,611 39,598 39,731 39,710 ============= ============= =============== ============== Dividends Paid Per Share of Common Stock....... $ 0.20 $ 0.20 $ 0.80 $ 0.80 ============= ============= =============== ============== 6 Exhibit 99.1 (continued) PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, --------------------------------- 2001 2000 --------------- --------------- (Unaudited) (In thousands) ASSETS Total utility plant..................................................... $2,747,815 $2,621,246 Accumulated depreciation and amortization............................... (1,234,629) (1,153,377) Construction work in progress........................................... 240,831 123,653 Nuclear fuel, net of accumulated amortization........................... 26,940 25,784 --------------- --------------- Net Utility Plant..................................................... 1,780,957 1,617,306 --------------- --------------- Other Property and Investments.......................................... 594,069 483,487 --------------- --------------- Current Assets Cash and cash equivalents............................................... 26,057 107,691 Accounts receivables, net of allowance for uncollectible accounts....... 147,787 242,742 Other receivables....................................................... 52,158 64,857 Inventories............................................................. 36,483 36,091 Other current assets.................................................... 41,902 59,021 --------------- --------------- Total Current Assets.................................................. 304,387 510,402 --------------- --------------- Deferred Charges.......................................................... 237,241 283,038 --------------- --------------- Total Assets.......................................................... $2,916,654 $2,894,233 =============== =============== 7 Exhibit 99.1 (continued) PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, --------------------------------- 2001 2000 --------------- --------------- (Unaudited) (In thousands) CAPITALIZATION AND LIABILIITES Capitalization Common stock................................................... $ 195,589 $ 195,589 Additional paid-in capital..................................... 428,648 432,222 Accumulated other comprehensive income, net of tax............. (32,713) (27) Retained earnings.............................................. 415,389 296,843 Minority interest.............................................. 11,652 12,211 Preferred stock................................................ 12,800 12,800 Long-term debt, less current maturities........................ 953,884 953,823 --------------- --------------- Total Capitalization......................................... 1,985,249 1,903,461 --------------- --------------- Current Liabilities Short-term debt................................................ 35,000 - Accounts payable............................................... 120,542 257,991 Accrued interest and taxes..................................... 34,294 36,889 Other current liabilities...................................... 101,896 67,758 --------------- --------------- Total Current Liabilities.................................... 291,732 362,638 --------------- --------------- Deferred Credits Accumulated deferred income taxes.............................. 166,112 186,945 Accumulated deferred investment tax credits.................... 47,853 47,853 Other deferred credits......................................... 425,708 393,336 --------------- --------------- Total Deferred Credits....................................... 639,673 628,134 --------------- --------------- Total Capitalization and Liabilities......................... $ 2,916,654 $ 2,894,233 =============== =============== 8 Exhibit 99.1 (continued) PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended December 31, --------------------------------- 2001 2000 --------------- --------------- (Unaudited) (In thousands) Cash Flows From Operating Activities: Net earnings....................................................... $ 150,433 $ 100,946 Adjustments to reconcile net earnings to net cash flows from operating activities: Depreciation and amortization.................................. 106,768 103,829 Other, net..................................................... 74,899 33,268 Changes in certain assets and liabilities: Accounts receivables......................................... 94,955 (94,996) Other assets................................................. 29,666 (32,444) Accounts payable............................................. (137,449) 107,346 Other liabilities............................................ 13,643 21,566 --------------- --------------- Net cash flows provided from operating activities...... 332,915 239,515 --------------- --------------- Cash Flows From Investing Activities: Utility plant additions............................................ (264,844) (146,878) Return of PVNGS lease obligation bonds............................. 16,674 16,668 Merger acquisition costs........................................... (17,975) (6,700) Other investing.................................................... (147,277) (20,590) --------------- --------------- Net cash flows used in investing activities............ (413,422) (157,500) --------------- --------------- Cash Flows From Financing Activities: Borrowings......................................................... 35,000 - Repayments......................................................... - (32,800) Exercise of employee stock options................................. (3,691) (1,232) Common stock repurchase............................................ - (27,867) Dividends paid..................................................... (31,876) (32,265) Other Financing.................................................... (560) (559) --------------- --------------- Net cash flows used by financing activities............ (1,127) (94,723) --------------- --------------- Decrease in Cash and Cash Equivalents................................ (81,634) (12,708) Beginning of Period.................................................. 107,691 120,399 --------------- --------------- End of Period........................................................ $ 26,057 $ 107,691 =============== =============== Supplemental cash flow disclosures: Interest paid...................................................... $ 62,216 $ 64,045 =============== =============== Income taxes paid, net of refunds................................. $ 72,146 $ 50,480 =============== =============== 9