PNM Resources Reports Strong 2012 Results

  PNM Resources Reports Strong 2012 Results

                        Dividend Increased 14 percent
             Conference call scheduled for 11 a.m. Eastern today

FOURTH QUARTER SUMMARY

  *GAAP (generally accepted accounting principles) earnings of $0.11 per
    diluted share, compared with $1.35 per diluted share in 2011
  *Ongoing earnings of $0.13 per diluted share, compared with $0.22 per
    diluted share in 2011

2012 SUMMARY

  *GAAP earnings of $1.31 per diluted share, compared with $1.96 per diluted
    share in 2011
  *Ongoing earnings of $1.31 per diluted share, compared with $1.08 per
    diluted share in 2011

2013 ONGOING GUIDANCE AFFIRMED

  *Company affirms 2013 consolidated ongoing earnings range of $1.32 and
    $1.42 per diluted share.

Business Wire

ALBUQUERQUE, N.M. -- March 1, 2013

PNM Resources (NYSE: PNM) today reported 2012 consolidated GAAP earnings of
$105.5 million, or $1.31 per diluted share, compared with $176.4 million, or
$1.96 per diluted share, in 2011. Results in 2011 included the $97.0 million
after-tax gain, or $1.08 per diluted share, from the sale of First Choice
Power.

2012 consolidated ongoing earnings were $105.6 million, or $1.31 per diluted
share, compared with $96.6 million, or $1.08 per diluted share, in 2011.
Reconciliations of GAAP to non-GAAP measures such as ongoing earnings are
shown on the attached schedules 1 through 4.

Quarterly and year-to-date consolidated ongoing earnings in 2011 included the
contributions of the company’s former competitive businesses, First Choice
Power and Optim Energy. GAAP earnings in 2011 included First Choice Power, but
Optim Energy had no impact on GAAP results.

“The steady year-over-year improvement in ongoing earnings is a reflection of
our continued focus on running our business well. That has required efforts to
rigorously manage our costs while maintaining high levels of reliability and
expanding services available for our customers. It also has required
consistent follow-through on regulatory strategies to ensure we earn our
authorized returns,” said Pat Vincent-Collawn, PNM Resources chairman,
president and CEO. “Both TNMP and PNM are now earning strong returns for their
retail segments. We are well positioned to invest in our business and to
continue strengthening our credit metrics.”

Quarterly financial materials are available at
http://www.pnmresources.com/investors/results.cfm.

COMMON STOCK DIVIDEND INCREASED

The PNM Resources Board of Directors yesterday unanimously voted to increase
the company’s dividend payment by 14 percent to an indicated annual rate of
$0.66 per share of common stock. As a result, the board has declared the
quarterly common stock dividend of $0.165 per share, payable May 15, 2013, to
shareholders of record at the close of business April 19, 2013.

“The dividend increase reflects the company’s and the board’s long-term
confidence in the regulated businesses and the ability to focus on the basics
of managing the business well,” said Vincent-Collawn. “It’s consistent with
our expectations to deliver above-average dividend growth.”

Instead of the normal review cycle in February, the board plans to review the
dividend again to consider a comparable increase in December to move the
dividend into the company’s targeted payout range of 50 to 60 percent of
ongoing earnings by year-end.

2012 SEGMENT REPORTING

PNM – a vertically integrated electric utility in New Mexico with
distribution, transmission and generation assets.

  *PNM reported ongoing earnings of $91.7 million, or $1.14 per diluted
    share, and GAAP earnings of $91.0 million, or $1.13 per diluted share,
    compared with ongoing earnings of $67.5 million, or $0.76 per diluted
    share, and GAAP earnings of $54.0 million, or $0.60 per diluted share,
    during the same period in 2011.
  *Key drivers for the 2012 improved earnings per diluted share were the
    implementation of higher retail and FERC transmission and generation
    rates, O&M cost savings, and PNM Resources’ 2011 repurchase of outstanding
    equity securities. Primary factors that negatively affected performance
    were lower load compared to 2011, higher plant outage costs, lower market
    prices for Palo Verde Nuclear Generating Station Unit 3 output and higher
    interest expense from the issuance of long-term debt in late 2011.

TNMP – an electric transmission and distribution utility in Texas.

  *TNMP reported ongoing earnings of $26.8 million, or $0.33 per diluted
    share, and GAAP earnings of $26.7 million, or $0.33 per diluted share,
    compared with ongoing earnings of $25.8 million, or $0.29 per diluted
    share, and GAAP earnings of $22.3 million, or $0.25 per diluted share in
    2011.
  *Strong load growth was offset by weather that was cooler than 2011’s
    record-breaking heat. Rate relief provided through implementation of an
    approved transmission cost of service increase also improved annual
    earnings per diluted share at TNMP, as did PNM Resources’ 2011 purchase of
    outstanding equity securities.

Corporate/Other – a segment that reflects costs at the PNM Resources holding
company, mainly comprised of interest expense.

  *Corporate/Other reported ongoing losses of $12.9 million, or $0.16 per
    diluted share, and GAAP losses of $12.2 million, or $0.15 per diluted
    share, compared with 2011 ongoing losses of $12.6 million, or $0.14 per
    diluted share, and GAAP gains of $76.0 million, or $0.85 per diluted
    share, which included the gain from the sale of First Choice Power.

2013 ONGOING EARNINGS GUIDANCE AFFIRMED

PNM Resources today affirmed its 2013 consolidated ongoing earnings range of
$1.32 and $1.42 per diluted share.

FOURTH QUARTER EARNINGS CALL: 11 A.M. EASTERN TODAY

PNM Resources will discuss fourth quarter earnings results, financial
forecasts and other relevant company matters during a live conference call and
Web cast today at 11 a.m. Eastern. Speaking on the call will be Pat
Vincent-Collawn, PNM Resources chairman, president and CEO, and Chuck Eldred,
PNM Resources executive vice president and CFO.

A live Web cast of the call will be archived at
http://www.pnmresources.com/investors/events.cfm. Listeners are encouraged to
visit the website at least 30 minutes before the event to register, download
and install any necessary audio software.

Investors and analysts can participate in the live conference call by dialing
(877) 377-7098 or (631) 291-4547 (international calls) and referencing “the
PNM Resources fourth-quarter earnings conference call.” A telephone replay
will be available at 2 p.m. Eastern until midnight Mar. 14 by dialing (855)
859-2056 or (404) 537-3406 and using conference ID 88752829. Supporting
material for PNM Resources’ earnings announcements can be viewed and
downloaded at http://www.pnmresources.com/investors/results.cfm.

Background:

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque,
N.M., with 2012 consolidated operating revenues of $1.3 billion. Through its
regulated utilities, PNM and TNMP, PNM Resources has approximately 2,538
megawatts of generation capacity and serves electricity to more than 738,000
homes and businesses in New Mexico and Texas. For more information, visit the
company’s website at www.PNMResources.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995

Statements made in this news release that relate to future events or PNM
Resources’ (“PNMR”), Public Service Company of New Mexico’s (“PNM”), or
Texas-New Mexico Power Company’s (“TNMP”) (collectively, the “Company”)
expectations, projections, estimates, intentions, goals, targets, and
strategies are made pursuant to the Private Securities Litigation Reform Act
of 1995. Readers are cautioned that all forward-looking statements are based
upon current expectations and estimates. PNMR, PNM, and TNMP assume no
obligation to update this information. Because actual results may differ
materially from those expressed or implied by these forward-looking
statements, PNMR, PNM, and TNMP caution readers not to place undue reliance on
these statements. PNMR's, PNM's, and TNMP's business, financial condition,
cash flow, and operating results are influenced by many factors, which are
often beyond their control, that can cause actual results to differ from those
expressed or implied by the forward-looking statements. For a discussion of
risk factors and other important factors affecting forward-looking statements,
please see the Company’s Form 10-K and Form 10-Q filings with the Securities
and Exchange Commission, which are specifically incorporated by reference
herein.

Non-GAAP Financial Measures

The Company uses ongoing earnings and ongoing earnings per diluted share (or
ongoing diluted earnings per share) to evaluate the operations of the Company
and to establish goals for management and employees. While the Company
believes these financial measures are appropriate and useful for investors,
they are not measures presented in accordance with generally accepted
accounting principles in the U.S. (GAAP). The Company does not intend for
these measures, or any piece of these measures, to represent any financial
measure as defined by GAAP. Furthermore, the Company’s calculations of these
measures as presented may or may not be comparable to similarly titled
measures used by other companies. The Company uses ongoing earnings guidance
to provide investors with management's expectations of ongoing financial
performance over the period presented. While the Company believes ongoing
earnings guidance is an appropriate measure, it is not a measure presented in
accordance with GAAP. The Company does not intend for ongoing earnings
guidance to represent an expectation of net earnings as defined by GAAP.
Management is generally not able to estimate the impact of the reconciling
items between ongoing earnings guidance and forecasted GAAP earnings, nor
their probable impact on GAAP earnings; therefore, management is generally not
able to provide a corresponding GAAP equivalent for earnings guidance.

PNM Resources

Schedule 1

Reconciliation of Ongoing to GAAP Earnings

(Preliminary and Unaudited)
                                                              
                         PNM              TNMP             Corporate         Consolidated
                         Electric         Electric         and Other
                         (in thousands)
Quarter Ended
December 31,
2012
GAAP Net
Earnings
(Loss)                   $ 5,812          $ 6,634          $ (3,354  )       $  9,092
Attributable
to PNMR:
Adjusting
items, net of
income tax
effects
Building                 4,180            935              —                 5,115
consolidation
Mark-to-market
impact of                (2,823   )       —                —                 (2,823     )
economic
hedges
Net change in
unrealized               135              —                —                 135
impairments of
NDT securities
TNMP 1999/2000
transmission             —               (1,036   )       —                (1,036     )
rate
settlement
Total                    1,492           (101     )       —                1,391      
Adjustments
Ongoing
Earnings                 $ 7,304         $ 6,533         $ (3,354  )       $  10,483  
(Loss)
                                                                             
Year Ended
December 31,
2012
GAAP Net
Earnings
(Loss)                   $ 91,023         $ 26,747         $ (12,223 )       $  105,547
Attributable
to PNMR:
Adjusting
items, net of
income tax
effects
Building                 4,324            976              —                 5,300
consolidation
Gain on sale
of First                 —                —                (651      )       (651       )
Choice ^(1)
Mark-to-market
impact of                (965     )       —                —                 (965       )
economic
hedges
Net change in
unrealized               (3,128   )       —                —                 (3,128     )
impairments of
NDT securities
Process
improvement              427              125              —                 552
initiatives
TNMP 1999/2000
transmission             —               (1,036   )       —                (1,036     )
rate
settlement
Total                    658             65              (651      )       72         
Adjustments
Ongoing
Earnings                 $ 91,681        $ 26,812        $ (12,874 )       $  105,619 
(Loss)
                                                                             
Income tax effects calculated using tax rates of 35.00% for TNMP and 39.59% for all other
segments unless otherwise noted
^(1) Gain on sale of First Choice is net of income taxes of $361


PNM Resources

Schedule 2

Reconciliation of Ongoing to GAAP Earnings

(Preliminary and Unaudited)
                                                                                            
                           PNM              TNMP             First            Corporate
                           Electric         Electric         Choice           and Other        Consolidated
                                                             Power^(3)
                           (in thousands)
Quarter Ended
December 31,
2011
GAAP Net
Earnings
(Loss)                     $ 13,489         $ 5,123          $ 3,395          $ 89,986         $  111,993
Attributable
to PNMR:
Adjusting
items, net of
income tax
effects^(1)
Mark-to-market
impact of                  180              —                (2,022   )       —                (1,842     )
economic
hedges
Net change in
unrealized                 (1,322   )       —                —                —                (1,322     )
impairments of
NDT securities
Process
improvement                1,778            530              11               —                2,319
initiatives
Strategic
alternatives -             —                —                —                438              438
competitive
businesses
2010 energy                (1,542   )       —                —                —                (1,542     )
efficiency
Gain on sale
of First                   —                —                —                (97,003  )       (97,003    )
Choice
Power^(2)
Loss on
reacquired                 —               —               —               5,577           5,577      
debt
Total                      (906     )       530             (2,011   )       (90,988  )       (93,375    )
Adjustments
Ongoing
Earnings                   $ 12,583        $ 5,653         $ 1,384         $ (1,002 )       $  18,618  
(Loss)
                                                                                                                  
                           
                           PNM              TNMP             First            Optim            Corporate
                           Electric         Electric         Choice           Energy           and                Consolidated
                                                             Power^(3)        (50%)^(4)        Other
                           (in thousands)
Year Ended
December 31,
2011
GAAP Net
Earnings
(Loss)                     $ 53,963         $ 22,257         $ 24,116         $ —              $  76,023          $  176,359
Attributable
to PNMR:
Adjusting
items, net of
income tax
effects^(1)
Mark-to-market
impact of                  (2,309   )       —                (3,147   )       (1,078   )       —                  (6,534     )
economic
hedges
Net change in
unrealized                 1,380            —                —                —                —                  1,380
impairments of
NDT securities
Process
improvement                4,025            975              103              —                47                 5,150
initiatives
Regulatory                 10,559           2,550            —                —                —                  13,109
disallowance
Strategic
alternatives -             —                —                —                —                2,805              2,805
competitive
businesses
New Mexico
gross receipts             1,451            —                —                —                —                  1,451
tax
adjustments
2010 energy                (1,542   )       —                —                —                —                  (1,542     )
efficiency
Gain on sale
of First                   —                —                —                —                (97,003    )       (97,003    )
Choice
Power^(2)
Loss on
reacquired                 —                —                —                —                5,577              5,577
debt
Equity in net
earnings                   —               —               —               (4,167   )       —                 (4,167     )
(loss) of
Optim Energy
Total                      13,564          3,525           (3,044   )       (5,245   )       (88,574    )       (79,774    )
Adjustments
Ongoing
Earnings                   $ 67,527        $ 25,782        $ 21,072        $ (5,245 )       $  (12,551 )       $  96,585  
(Loss)
                                                                                                                  
^(1) Income tax effects calculated using tax rates of 35.65% for First Choice Power, 35.00% for TNMP and 39.59% for all other
segments unless otherwise indicated
^(2) Gain on sale of First Choice Power is net of income taxes of $77,922
^(3) First Choice Power included through October 31, 2011
^(4) Optim Energy included through August 31, 2011


PNM Resources

Schedule 3

Reconciliation of Ongoing to GAAP Earnings Per Diluted Share

(Preliminary and Unaudited)
                                                        
                         PNM            TNMP           Corporate       Consolidated
                         Electric       Electric       and Other
                         (per diluted share)
Quarter Ended
December 31,
2012
GAAP Net
Earnings
(Loss)                   $ 0.07         $ 0.08         $ (0.04 )       $   0.11
Attributable
to PNMR:
Adjusting
items
Building                 0.05           0.01           —               0.06
consolidation
Mark-to-market
impact of                (0.04  )       —              —               (0.04     )
economic
hedges
Net change in
unrealized               0.01           —              —               0.01
impairments of
NDT securities
TNMP 1999/2000
transmission             —             (0.01  )       —              (0.01     )
rate
settlement
Total                    0.02          —             —              0.02      
Adjustments
Ongoing
Earnings                 $ 0.09        $ 0.08        $ (0.04 )       $   0.13  
(Loss)
Average
Diluted Shares
Outstanding:
80,435,093
                                                                       
Year Ended
December 31,
2012
GAAP Net
Earnings
(Loss)                   $ 1.13         $ 0.33         $ (0.15 )       $   1.31
Attributable
to PNMR:
Adjusting
items
Building                 0.05           0.01           —               0.06
consolidation
Gain on sale
of First                 —              —              (0.01   )       (0.01     )
Choice
Mark-to-market
impact of                (0.01  )       —              —               (0.01     )
economic
hedges
Net change in
unrealized               (0.04  )       —              —               (0.04     )
impairments of
NDT securities
Process
improvement              0.01           —              —               0.01
initiatives
TNMP 1999/2000
transmission             —             (0.01  )       —              (0.01     )
rate
settlement
Total                    0.01          —             (0.01   )       —         
Adjustments
Ongoing
Earnings                 $ 1.14        $ 0.33        $ (0.16 )       $   1.31  
(Loss)
Average
Diluted Shares
Outstanding:
80,416,633
                                                                       

PNM Resources

Schedule 4

Reconciliation of Ongoing to GAAP Earnings Per Diluted Share

(Preliminary and Unaudited)
                                                                                     
                         PNM            TNMP           First           Corporate
                         Electric       Electric       Choice          and Other       Consolidated
                                                       Power^(1)
                         (earnings per diluted share)
Quarter Ended
December 31,
2011
GAAP Net
Earnings
(Loss)                   $ 0.17         $ 0.06         $  0.04         $ 1.08          $  1.35
Attributable
to PNMR:
Adjusting
items
Mark-to-market
impact of                —              —              (0.02   )       —               (0.02     )
economic
hedges
Net change in
unrealized               (0.02  )       —              —               —               (0.02     )
impairments of
NDT securities
Process
improvement              0.02           0.01           —               —               0.03
initiatives
Strategic
alternatives -           —              —              —               —               —
competitive
businesses
2010 energy              (0.02  )       —              —               —               (0.02     )
efficiency
Gain on sale
of First                 —              —              —               (1.17   )       (1.17     )
Choice Power
Loss on
reacquired               —             —             —              0.07           0.07      
debt
Total                    (0.02  )       0.01          (0.02   )       (1.10   )       (1.13     )
Adjustments
Ongoing
Earnings                 $ 0.15        $ 0.07        $  0.02        $ (0.02 )       $  0.22   
(Loss)
Average
Diluted Shares
Outstanding:
83,160,239
                         
                         PNM            TNMP           First           Optim           Corporate
                         Electric       Electric       Choice          Energy          and                Consolidated
                                                       Power^(1)       (50%)^(2)       Other
                         (earnings per diluted share)
Year Ended
December 31,
2011
GAAP Net
Earnings
(Loss)                   $ 0.60         $ 0.25         $  0.26         $ —             $  0.85            $   1.96
Attributable
to PNMR:
Adjusting
items
Mark-to-market
impact of                (0.02  )       —              (0.03   )       (0.01   )       —                  (0.06     )
economic
hedges
Net change in
unrealized               0.02           —              —               —               —                  0.02
impairments of
NDT securities
Process
improvement              0.04           0.01           —               —               —                  0.05
initiatives
Regulatory               0.12           0.03           —               —               —                  0.15
disallowance
Strategic
alternatives -           —              —              —               —               0.03               0.03
competitive
businesses
New Mexico
gross receipts           0.02           —              —               —               —                  0.02
tax
adjustments
2010 energy              (0.02  )       —              —               —               —                  (0.02     )
efficiency
Gain on sale
of First                 —              —              —               —               (1.08     )        (1.08     )
Choice Power
Loss on
reacquired               —              —              —               —               0.06               0.06
debt
Equity in net
earnings                 —             —             —              (0.05   )       —                 (0.05     )
(loss) of
Optim Energy
Total                    0.16          0.04          (0.03   )       (0.06   )       (0.99     )        (0.88     )
Adjustments
Ongoing
Earnings                 $ 0.76        $ 0.29        $  0.23        $ (0.06 )       $  (0.14  )        $   1.08  
(Loss)
Average
Diluted Shares
Outstanding:
89,757,077
                                                                                                          
^(1) First Choice Power included through October 31, 2011
^(2) Optim Energy included through August 31, 2011

Contact:

PNM Resources
Analysts
Jimmie Blotter, 505-241-2227
or
Media
Valerie Smith, 505-241-2892
 
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