Exhibit 99.1
PNM Resources Earns $25.0 Million in First Quarter
Lower wholesale power prices reduced revenues and earnings
ALBUQUERQUE, N.M. April 23, 2002 -PNM Resources (NYSE:PNM) today reported net
earnings of $25.0 million, or $0.63 per diluted share, for the quarter ended
March 31, 2002, compared to net earnings of $63.6 million, or $1.60 per diluted
share, for the first quarter of 2001. Total operating revenues for the quarter
were $314.0 million, compared to $736.5 million for the same period last year.
There were no one-time items or non-recurring gains or losses included in
earnings for the first quarter 2002. In the comparable quarter last year, the
company recorded non-recurring losses related to the impairment of a technology
investment and transaction costs for the terminated Western Resources
transaction that reduced earnings by $0.18 cents per share; ongoing earnings for
the first quarter 2001 were $1.78 per diluted share.
Power Marketing
Lower wholesale power prices compared to the same period last year were
primarily responsible for the overall decline in revenues and earnings in the
latest quarter. Wholesale revenues averaged $24 per megawatt-hour (MWh) for the
quarter, compared to an average of $135 per MWh in the same period in 2001.
"A weak regional economy and mild weather in the Western US reduced prices for
power below last year's levels," said PNM Resources Chairman, President and
Chief Executive Officer Jeff Sterba. "Although we have seen some recovery in the
wholesale market from the lows reached at the end of last year, margins and
marketing activity are still significantly below the record levels they reached
in the first quarter of 2001."
Forward power prices trended upward through the first quarter, although still
substantially below last year. As the region enters the summer period of peak
power demand, pricing levels and activity in the wholesale market will depend
upon:
- temperatures in the Western states,
- the strength of the economic recovery now underway,
- the availability of generation resources to meet the growing demand for
power, and
- regulatory policy.
Wholesale electric volume for the latest quarter was 2.3 million MWh, down 26
percent from the 3.2 million MWh in wholesale sales during the comparable period
in 2001.
Fuel and purchased power expense for first quarter 2002 was down 74 percent from
the same period last year, primarily due to the reduced trading volume. Total
non-fuel operations and maintenance expense for the quarter was up 3.1 percent,
to $40.6 million, primarily due to increased labor expenses and an increase in
costs associated with the Four Corners Generating Station, in which PNM is a
part owner.
4
Exhibit 99.1 (continued)
Utility Operations
PNM's electric and gas utility, which serves 382,000 electric and 444,000 gas
customers in New Mexico, reported an 0.7 percent increase in electric revenues
for the period, to $135.2 million. Gas revenues, which include the cost of gas
passed through to customers, declined 43.1 percent for the quarter, to $109.2
million, primarily as the result of lower natural gas prices during the first
quarter of 2002 as compared to the same period in the previous year.
Weather for the quarter in PNM's New Mexico service territory was relatively
unchanged from the previous year. Retail electric sales increased 1.2 percent
for the quarter.
Earnings Guidance
Based on first quarter results and management's forecast of wholesale price
trends through the remainder of the year, PNM Resources has revised its 2002
earnings guidance to between $2.60 and $2.85 per diluted share, down from the
previous guidance in the range of $3.00.
Factors that could affect results include: prices prevailing in the wholesale
power market and the cost of natural gas; the level of trading activity in the
market; and relative amount of price movement within the market over the course
of the year.
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 US. PNM Resources stock is traded primarily on the NYSE under the symbol
PNM.
The PNM Resources first quarter conference call with financial analysts and
investors will be broadcast live over the Internet at 9:00 a.m. EDT on
Wednesday, April 24. The webcast can be accessed through the company website at
pnm.com.
5
Exhibit 99.1 (continued)
PNM RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
Three Months Ended
March 31
---------------------------------
2002 2001
--------------- ---------------
(Unaudited)
(In thousands except per share) amounts)
Operating Revenues
Electric..................................... $203,963 $544,594
Gas.......................................... 109,201 191,936
Unregulated.................................. 832 -
--------------- ---------------
Total operating revenues................... 313,996 736,530
--------------- ---------------
Operating Expenses
Cost of energy sold.......................... 155,784 497,098
Operation and maintenance expenses........... 82,896 89,790
Depreciation and amortization................ 24,778 24,219
Taxes, other than income taxes............... 8,484 7,217
Income taxes, net............................ 9,366 40,906
--------------- ---------------
Total operating expenses................... 281,308 659,230
--------------- ---------------
Operating income........................... 32,688 77,300
--------------- ---------------
Other Income and Deductions, Net of Tax......... 7,387 2,634
--------------- ---------------
Income before interest charges............. 40,075 79,934
Net Interest Charges............................ 15,126 16,382
--------------- ---------------
Net Earnings.................................... 24,949 63,552
Preferred Stock Dividend Requirements........... 146 146
--------------- ---------------
Net Earnings Applicable to Common Stock......... $ 24,803 $ 63,406
=============== ===============
Earnings Per Share of Common Stock (Basic)...... $ 0.63 $ 1.62
=============== ===============
Average Shares Outstanding (Basic).............. 39,118 39,118
=============== ===============
Earnings Per Share of Common Stock (Diluted).... $ 0.63 $ 1.60
=============== ===============
Average Shares Outstanding (Diluted)............ 39,649 39,599
=============== ===============
Dividends Paid Per Share of Common Stock........ $ 0.20 $ 0.20
=============== ===============
6
Exhibit 99.1 (continued)
PNM RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
---------------- ------------------
2002 2001
---------------- ------------------
(Unaudited)
(In thousands)
ASSETS
Total utility plant......................................... $2,748,636 $2,738,990
Accumulated depreciation and amortization................... (1,254,787) (1,234,629)
Construction work in progress............................... 301,646 249,656
Nuclear fuel, net of accumulated amortization............... 25,817 26,940
---------------- ------------------
Net Utility Plant......................................... 1,821,312 1,780,957
---------------- ------------------
Other Property and Investments................................ 441,824 554,237
---------------- ------------------
Current Assets
Cash and cash equivalents................................... 9,979 26,057
Accounts receivables, net of allowance for
uncollectible accounts................................... 120,599 147,787
Other receivables........................................... 44,495 52,158
Inventories................................................. 37,259 36,483
Short-term investments...................................... 152,687 45,111
Other current assets........................................ 33,761 41,901
---------------- ------------------
Total Current Assets...................................... 398,780 349,497
---------------- ------------------
Deferred Charges............................................... 268,543 249,947
---------------- ------------------
Total Assets.............................................. $2,930,459 $2,934,638
================ ==================
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Exhibit 99.1 (continued)
PNM RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
---------------- ------------------
2002 2001
---------------- ------------------
(Unaudited)
(In thousands)
CAPITALIZATION AND LIABILIITES
Capitalization
Common stock..................................................... $ 623,149 $ 625,632
Accumulated other comprehensive income, net of tax............... (26,422) (28,996)
Retained earnings................................................ 431,586 415,388
Minority interest................................................ 11,053 11,652
Preferred stock.................................................. 12,800 12,800
Long-term debt, less current maturities.......................... 953,897 953,884
---------------- ------------------
Total Capitalization........................................... 2,006,063 1,990,360
---------------- ------------------
Current Liabilities
Short-term debt.................................................. 77,800 35,000
Accounts payable................................................. 99,592 120,918
Accrued interest and taxes....................................... 53,050 72,022
Other current liabilities........................................ 86,774 101,697
---------------- ------------------
Total Current Liabilities...................................... 317,216 329,637
---------------- ------------------
Deferred Credits
Accumulated deferred income taxes................................ 120,359 120,153
Accumulated deferred investment tax credits...................... 43,931 44,714
Other deferred credits........................................... 442,890 449,774
---------------- ------------------
Total Deferred Credits......................................... 607,180 614,641
---------------- ------------------
Total Capitalization and Liabilities........................... $ 2,930,459 $ 2,934,638
================ ==================
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Exhibit 99.1 (continued)
PNM RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Ended
March 31,
---------------------------------
2002 2001
--------------- ---------------
(Unaudited)
(In thousands)
Cash Flows From Operating Activities:
Net earnings........................................................... $ 24,949 $ 63,552
Adjustments to reconcile net earnings to net cash flows
from operating activities:
Depreciation and amortization...................................... 27,352 25,080
Other, net......................................................... (25,853) 6,462
Changes in certain assets and liabilities:
Accounts receivables............................................. 27,188 (33,388)
Other assets..................................................... (6,279) 23,630
Accounts payable................................................. (21,326) (40,075)
Other liabilities................................................ (31,846) 64,251
--------------- ---------------
Net cash flows (used) provided from operating activities... (5,815) 109,512
--------------- ---------------
Cash Flows From Investing Activities:
Utility plant additions................................................ (69,420) (55,820)
Return of principle of PVNGS lease lessor notes........................ 8,996 8,535
Other investing........................................................ 18,413 109
--------------- ---------------
Net cash flows used in investing activities................ (42,011) (47,176)
--------------- ---------------
Cash Flows From Financing Activities:
Borrowings............................................................. 42,800 -
Dividends paid......................................................... (7,970) (7,965)
Other Financing........................................................ (3,082) (761)
--------------- ---------------
Net cash flows used by financing activities........................ 31,748 (8,726)
--------------- ---------------
Increase (Decrease) in Cash and Cash Equivalents....................... (16,078) 53,610
Beginning of Period.................................................... 26,057 107,691
--------------- ---------------
End of Period.......................................................... $ 9,979 $ 161,301
=============== ===============
Supplemental Cash Flow Disclosures:
Interest paid.......................................................... $ 16,183 $ 17,748
=============== ===============
Income taxes paid, net of refunds...................................... $ 38,283 $ 3,400
=============== ===============
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Exhibit 99.1 (continued)
PNM RESOURCES, INC. AND SUBSIDIARIES
COMPARATIVE OPERATING STATISTICS
The following table shows electric revenues by customer class and average
customers:
Electric Revenues
(Thousands of dollars)
Three Months Ended
March 31,
------------------------------
2002 2001
------------- --------------
Residential................................... $50,722 $49,197
Commercial.................................... 55,005 54,137
Industrial.................................... 19,628 19,837
Other......................................... 10,066 11,352
------------- --------------
------------- --------------
$135,421 $134,523
============= ==============
Average Customers............................. 382,000 375,000
============= ==============
The following table shows electric sales by customer class:
Electric Sales
(Megawatt hours)
Three Months Ended
March 31,
2002 2001
------------ ------------
Residential.................................. 588,996 572,199
Commercial................................... 711,259 713,198
Industrial................................... 392,346 388,135
Other........................................ 46,874 45,033
------------ ------------
1,739,475 1,718,565
============ ============
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Exhibit 99.1 (continued)
PNM RESOURCES, INC. AND SUBSIDIARIES
COMPARATIVE OPERATING STATISTICS
The following table shows gas revenues by customer and average customers:
Gas Revenues
(Thousands of dollars)
Three Months Ended
March 31,
----------------------------
2002 2001
------------- -------------
Residential................................... $72,112 $121,589
Commercial.................................... 22,399 36,797
Industrial.................................... 649 13,537
Transportation*............................... 3,611 4,002
Other......................................... 10,430 16,011
------------- -------------
$109,201 $191,936
============= =============
Average customers............................. 444,000 435,000
============= =============
*Customer-owned gas.
The following table shows gas throughput by customer class:
Gas Throughput
(Thousands of decatherms)
Three Months Ended
March 31,
----------------------------
2002 2001
----------- -----------
Residential.................................. 13,516 12,481
Commercial................................... 4,970 4,207
Industrial................................... 172 1,980
Transportation*.............................. 7,397 9,178
Other........................................ 1,990 1,667
----------- -----------
28,045 29,513
=========== ===========
*Customer-owned gas.
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Exhibit 99.1 (continued)
PNM RESOURCES, INC. AND SUBSIDIARIES
COMPARATIVE OPERATING STATISTICS
The following table shows revenues by customer class:
Generation and Trading Revenues By Market
(Thousands of dollars)
Three Months Ended
March 31,
--------------------------------
2002 2001
-------------- ---------------
Intersegment sales.................... $ 81,950 $ 80,917
Long-term contracts................... 14,337 28,814
Trading *............................. 51,476 378,051
Other................................. 2,907 3,383
-------------- ---------------
$ 150,670 $491,165
============== ===============
*Includes mark-to-market gains/(losses).
The following table shows sales by customer class:
Generation and Trading Sales By Market
(Megawatt hours)
Three Months Ended
March 31,
--------------------------------
2002 2001
-------------- ---------------
Intersegment sales....................... 1,739,475 1,718,565
Long-term contracts...................... 281,153 478,053
Trading.................................. 2,060,242 2,680,078
-------------- ---------------
4,080,870 4,876,696
============== ===============
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