PNM Resources Reports Third Quarter Results

  PNM Resources Reports Third Quarter Results

2013 Earnings Guidance Narrowed, Conference Call Set for 11 a.m. Eastern Today

Business Wire

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

PNM Resources (NYSE: PNM):

PNM Resources (In millions except EPS)
                                                     
                      Q3 2013   Q3 2012   YTD 2013   YTD 2012
GAAP net earnings      $  54.6   $  57.9   $  92.9    $  96.5
GAAP EPS               $  0.68   $  0.72   $  1.15    $  1.20
Ongoing net earnings   $  51.7   $  55.1   $  96.8    $  95.1
Ongoing EPS              $  0.64     $  0.69     $  1.20      $  1.18
                                                                 

PNM Resources (NYSE: PNM) today released the company’s unaudited 2013 third
quarter earnings report. Management today narrowed the 2013 consolidated
earnings guidance range to $1.35 to $1.41 per diluted share.

“The company continued its consistent performance in the third quarter and
remains on course for the year,” said Pat Vincent-Collawn, chairman,
president, and CEO of PNM Resources. “TNMP continues to perform well,
benefitting from the strong Texas economy. At PNM, there continue to be
indications that the local economy is stabilizing, and we saw a slight
increase in the residential load during the quarter. We are also pleased to
say that we are on track to obtain the necessary approvals for the revised
state implementation plan related to our coal-fired San Juan Generating
Station.”

SEGMENT REPORTING OF 2013 THIRD QUARTER & YTD EARNINGS

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

PNM (In millions except EPS)
                                                     
                      Q3 2013   Q3 2012   YTD 2013   YTD 2012
GAAP net earnings      $  47.7   $  50.8   $  85.1    $  85.2
GAAP EPS               $  0.59   $  0.63   $  1.06    $  1.06
Ongoing net earnings   $  43.6   $  48.7   $  82.0    $  84.4
Ongoing EPS              $  0.54     $  0.61     $  1.02      $  1.05

  *PNM’s ongoing earnings were boosted by Palo Verde Unit 3 pricing, offset
    primarily by a decrease in weather due to mild temperatures and a decrease
    in industrial load.

TNMP – an electric transmission and distribution utility in Texas.

TNMP (In millions except EPS)
                                                     
                      Q3 2013   Q3 2012   YTD 2013   YTD 2012
GAAP net earnings      $  10.1   $  9.1    $  22.2    $  20.1
GAAP EPS               $  0.13   $  0.11   $  0.28    $  0.25
Ongoing net earnings   $  10.1   $  9.1    $  22.2    $  20.3
Ongoing EPS              $  0.13     $  0.11     $  0.28      $  0.25

  *TNMP’s ongoing earnings benefitted from additional revenue from rate
    relief and continued overall load growth.

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

Corporate and Other (In millions except EPS)
                                                       
                      Q3 2013    Q3 2012    YTD 2013   YTD 2012
GAAP net earnings      ($3.2  )   ($2.0  )   ($14.4 )   ($8.9  )
GAAP EPS               ($0.04 )   ($0.02 )   ($0.18 )   ($0.11 )
Ongoing net earnings   ($2.0  )   ($2.7  )   ($7.4  )   ($9.5  )
Ongoing EPS              ($0.03 )     ($0.03 )     ($0.10 )     ($0.12 )
                                                                

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

THIRD QUARTER CONFERENCE CALL: 11 A.M. EASTERN TODAY

PNM Resources will discuss third quarter earnings results during a live
conference call and webcast 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 webcast 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 five to 10 minutes prior to the event and referencing “the PNM
Resources third quarter conference call.” A telephone replay will be available
at 2 p.m. Eastern until midnight Nov. 15 by dialing (855) 859-2056 or (404)
537-3406 and using the confirmation code 87775008. 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 739,000
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 factors 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
                                                 and Other
                   (in thousands)
Three Months
Ended
September 30,
2013
GAAP Net
Earnings
(Loss)             $ 47,691       $ 10,106       $ (3,242  )      $  54,555
Attributable
to PNMR:
Adjusting
items, net of
income tax
effects
Mark-to-market
impact of          (4,629   )     —              —                (4,629     )
economic
hedges
Net change in
unrealized         (472     )     —              —                (472       )
impairments of
NDT securities
Loss on
reacquired         —              —              1,202            1,202
debt
Regulatory         1,048         —             —               1,048      
disallowance
Total              (4,053   )     —             1,202        1  (2,851     )
Adjustments
Ongoing
Earnings           $ 43,638      $ 10,106      $ (2,040  )      $  51,704  
(Loss)
                                                                  
Nine Months
Ended
September 30,
2013
GAAP Net
Earnings
(Loss)             $ 85,120       $ 22,170       $ (14,431 )      $  92,859
Attributable
to PNMR:
Adjusting
items, net of
income tax
effects
New Mexico
corporate          —              —              1,234            1,234
income tax
rate change
Mark-to-market
impact of          (3,538   )     —              —                (3,538     )
economic
hedges
Net change in
unrealized         (606     )     —              —                (606       )
impairments of
NDT securities
Loss on
reacquired         —              —              1,908            1,908
debt
State tax
credit             —              —              3,880            3,880
impairment
Regulatory         1,048         —             —               1,048      
disallowance
Total              (3,096   )     —             7,022           3,926      
Adjustments
Ongoing
Earnings           $ 82,024      $ 22,170      $ (7,409  )      $  96,785  
(Loss)
                                                                  
Income tax effects calculated using tax rates of 35.00% for TNMP and 39.59%
for all other segments unless otherwise noted


                                                         
PNM Resources
Schedule 2

Reconciliation of Ongoing to GAAP Earnings

(Preliminary and Unaudited)
                                                                  
                     PNM            TNMP           Corporate      Consolidated
                                                   and Other
                     (in thousands)
Three Months
Ended September
30, 2012
GAAP Net
Earnings (Loss)      $ 50,779       $ 9,084        $ (1,999 )     $  57,864
Attributable to
PNMR:
Adjusting
items, net of
income tax
effects
Building             144            42             —              186
consolidation
Gain on sale of      —              —              (651     )     (651       )
First Choice
Mark-to-market
impact of            662            —              —              662
economic hedges
Net change in
unrealized           (2,769   )     —              —              (2,769     )
impairments of
NDT securities
Process
improvement          (145     )     (43      )     —             (188       )
initiatives
Total                (2,108   )     (1       )     (651     )     (2,760     )
Adjustments
Ongoing              $ 48,671      $ 9,083       $ (2,650 )     $  55,104  
Earnings (Loss)

Nine Months
Ended September
30, 2012
GAAP Net
Earnings (Loss)      $ 85,211       $ 20,113       $ (8,868 )     $  96,456
Attributable to
PNMR:
Adjusting
items, net of
income tax
effects
Building             144            42             —              186
consolidation
Gain on sale of      —              —              (651     )     (651       )
First Choice
Mark-to-market
impact of            1,858          —              —              1,858
economic hedges
Net change in
unrealized           (3,263   )     —              —              (3,263     )
impairments of
NDT securities
Process
improvement          427           124           —             551        
initiatives
Total                (834     )     166           (651     )     (1,319     )
Adjustments
Ongoing              $ 84,377      $ 20,279      $ (9,519 )     $  95,137  
Earnings (Loss)
                                                                  
Income tax effects calculated using tax rates of 35.00% for TNMP and 39.59%
for all other segments unless otherwise noted


                                                         
PNM Resources
Schedule 3
Reconciliation of Ongoing to GAAP Earnings Per Diluted Share
(Preliminary and Unaudited)
                                                                  
                          PNM          TNMP         Corporate     Consolidated
                                                    and Other
                          (per diluted share)
Three Months Ended
September 30, 2013
GAAP Net Earnings
(Loss) Attributable       $ 0.59       $ 0.13       $ (0.04 )     $   0.68
to PNMR:
Adjusting items
Mark-to-market impact     (0.05  )     —            —             (0.05     )
of economic hedges
Net change in
unrealized                (0.01  )     —            —             (0.01     )
impairments of NDT
securities
Loss on reacquired        —            —            0.01          0.01
debt
Regulatory                0.01        —           —            0.01      
disallowance
Total Adjustments         (0.05  )     —           0.01         (0.04     )
Ongoing Earnings          $ 0.54      $ 0.13      $ (0.03 )     $   0.64  
(Loss)
Average Diluted
Shares Outstanding:
80,333,822
                                                                  
Nine Months Ended
September 30, 2013
GAAP Net Earnings
(Loss) Attributable       $ 1.06       $ 0.28       $ (0.18 )     $   1.15
to PNMR:
Adjusting items
New Mexico corporate
income tax rate           —            —            0.02          0.02
change
Mark-to-market impact     (0.04  )     —            —             (0.04     )
of economic hedges
Net change in
unrealized                (0.01  )     —            —             (0.01     )
impairments of NDT
securities
Loss on reacquired        —            —            0.02          0.02
debt
State tax credit          —            —            0.05          0.05
impairment
Regulatory                0.01        —           —            0.01      
disallowance
Total Adjustments         (0.04  )     —           0.09         0.05      
Ongoing Earnings          $ 1.02      $ 0.28      $ (0.10 )     $   1.20  
(Loss)
Average Diluted
Shares Outstanding:
80,456,181
                                                                  
Tables may not appear visually accurate due to rounding.
                                                                  

                                                         
PNM Resources

Schedule 4

Reconciliation of Ongoing to GAAP Earnings Per Diluted Share
(Preliminary and Unaudited)
                                                                  
                          PNM          TNMP         Corporate     Consolidated
                                                    and Other
                          (per diluted share)
Three Months Ended
September 30, 2012
GAAP Net Earnings
(Loss) Attributable       $ 0.63       $ 0.11       $ (0.02 )     $   0.72
to PNMR:
Adjusting items
Building                  —            —            —             —
consolidation
Gain on sale of First     —            —            (0.01   )     (0.01     )
Choice
Mark-to-market impact     0.01         —            —             0.01
of economic hedges
Net change in
unrealized                (0.03  )     —            —             (0.03     )
impairments of NDT
securities
Process improvement       —           —           —            —         
initiatives
Total Adjustments         (0.02  )     —           (0.01   )     (0.03     )
Ongoing Earnings          $ 0.61      $ 0.11      $ (0.03 )     $   0.69  
(Loss)
Average Diluted
Shares Outstanding:
80,390,385

Nine Months Ended
September 30, 2012
GAAP Net Earnings
(Loss) Attributable       $ 1.06       $ 0.25       $ (0.11 )     $   1.20
to PNMR:
Adjusting items
Building                  —            —            —             —
consolidation
Gain on sale of First     —            —            (0.01   )     (0.01     )
Choice
Mark-to-market impact     0.02         —            —             0.02
of economic hedges
Net change in
unrealized                (0.04  )     —            —             (0.04     )
impairments of NDT
securities
Process improvement       0.01        —           —            0.01      
initiatives
Total Adjustments         (0.01  )     —           (0.01   )     (0.02     )
Ongoing Earnings          $ 1.05      $ 0.25      $ (0.12 )     $   1.18  
(Loss)
Average Diluted
Shares Outstanding:
80,410,479
                                                                  

Contact:

PNM Resources
Analysts
Jimmie Blotter, 505-241-2227
Media
Pahl Shipley, 505-241-4831
 
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