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.
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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.
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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
============= ============= =============== ==============
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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
=============== ===============
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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
=============== ===============
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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
=============== ===============
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