PNM Resources Reports 2013 Q4 and Year-End Results

  PNM Resources Reports 2013 Q4 and Year-End Results

      2014 Guidance Affirmed, Conference Call Set for 11 a.m. EST Today

Business Wire

ALBUQUERQUE, N.M. -- February 28, 2014

PNM Resources (NYSE: PNM):

PNM Resources (In millions, except EPS)
                                                        
                       Q4 2013    Q4 2012    YE 2013    YE 2012
GAAP net earnings          $7.6          $9.1          $100.5        $105.5
GAAP EPS                $0.10      $0.11      $1.25      $1.31
Ongoing net earnings       $16.7         $10.5         $113.5        $105.6
Ongoing EPS                $0.21         $0.13         $1.41         $1.31
                                                                     

PNM Resources (NYSE: PNM) today released the company’s 2013 fourth quarter and
year-end earnings results. In addition, management affirmed its 2014
consolidated ongoing earnings guidance range of $1.42 to $1.52 per diluted
share.

“2013 was another year of operational and financial success as a result of
running our regulated utilities efficiently and keeping the needs of our
customers a top priority,” said Pat Vincent-Collawn, PNM Resources’ chairman,
president, and CEO. “We delivered continued high levels of reliability in New
Mexico and Texas, achieved strong financial results across the company, and
successfully managed our New Mexico business in an economy that continues to
face challenges. In the year ahead, we will keep our focus on continuing these
successes as well as constructively working through the regulatory process,
particularly as it relates to the San Juan Generating Station.”

Vincent-Collawn also noted that on January 30, Moody’s raised the credit
rating of PNM Resources, PNM and TNMP. “The upgrade is a reflection of Moody’s
more favorable view of the financial strength of utilities in general, but it
is also an important milestone for the company, as all three entities are now
rated investment grade by both Moody’s and Standard and Poor’s,” she added.
Moody’s continues to have the company on positive outlook.

SEGMENT REPORTING OF 2013 FOURTH QUARTER & YEAR-END EARNINGS

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

PNM (In millions, except EPS)
                                                        
                       Q4 2013    Q4 2012    YE 2013    YE 2012
GAAP net earnings          $2.5          $5.8          $87.6         $91.0
GAAP EPS                $0.03      $0.07      $1.09      $1.13
Ongoing net earnings       $11.5         $7.3          $93.5         $91.7
Ongoing EPS                $0.14         $0.09         $1.16         $1.14
                                                                     

  *In the fourth quarter, PNM’s ongoing earnings benefitted primarily from a
    reduction in power plant outages, cost control, weather and AFUDC. These
    were offset primarily by a decrease in load and a contribution to the PNM
    Resources Foundation.

TNMP – an electric transmission and distribution utility in Texas.

TNMP (In millions, except EPS)
                                                        
                       Q4 2013    Q4 2012    YE 2013    YE 2012
GAAP net earnings          $6.9          $6.6          $29.1         $26.7
GAAP EPS                $0.09      $0.08      $0.36      $0.33
Ongoing net earnings       $6.9          $6.5          $29.1         $26.8
Ongoing EPS                $0.09         $0.08         $0.36         $0.33
                                                                     

  *In the fourth quarter, TNMP’s ongoing earnings benefitted from additional
    revenue from rate relief, continued strong load growth, and weather. These
    were partially offset by an increase in operations and maintenance
    expenses and a contribution to the PNM Resources Foundation.

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)
                                                        
                       Q4 2013    Q4 2012    YE 2013    YE 2012
GAAP net earnings          ($1.8)        ($3.4)        ($16.2)       ($12.2)
GAAP EPS                ($0.02)    ($0.04)    ($0.20)    ($0.15)
Ongoing net earnings       ($1.7)        ($3.4)        ($9.1)        ($12.9)
Ongoing EPS                ($0.02)       ($0.04)       ($0.11)       ($0.16)
                                                                     

  *In the fourth quarter, Corporate and Other’s ongoing earnings benefitted
    primarily from lower interest expense.

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

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

PNM Resources will discuss fourth quarter and year-end 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 fourth quarter conference call.”

A telephone replay will be available at 2 p.m. Eastern until midnight March 14
by dialing (855) 859-2056 or (404) 537-3406 and using the confirmation code
51363320. 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 2013 consolidated operating revenues of $1.4 billion. Through its
regulated utilities, PNM and TNMP, PNM Resources has approximately 2,572
megawatts of generation capacity and provides electricity to more than 746,000
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)
Quarter Ended
December 31,
2013
GAAP Net
Earnings
(Loss)               $ 2,507          $ 6,920          $ (1,780  )       $  7,647
Attributable
to PNMR:
Adjusting
items, net of
income tax
effects
Mark-to-market
impact of            2,411            —                —                 2,411
economic
hedges
Net change in
unrealized           226              —                —                 226
impairments of
NDT securities
Loss on
reacquired           —                —                57                57
debt
Regulatory           6,343           —               —                6,343      
disallowance
Total                8,980           —               57               9,037      
Adjustments
Ongoing
Earnings             $ 11,487        $ 6,920         $ (1,723  )       $  16,684  
(Loss)
                                                                         
Year Ended
December 31,
2013
GAAP Net
Earnings
(Loss)               $ 87,627         $ 29,090         $ (16,210 )       $  100,507
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            (1,127   )       —                —                 (1,127     )
economic
hedges
Net change in
unrealized           (380     )       —                —                 (380       )
impairments of
NDT securities
Loss on
reacquired           —                —                1,964             1,964
debt
State tax
credit               —                —                3,880             3,880
impairment
Regulatory           7,391           —               —                7,391      
disallowance
Total                5,884           —               7,078            12,962     
Adjustments
Ongoing
Earnings             $ 93,511        $ 29,090        $ (9,132  )       $  113,469 
(Loss)
                                                                         
Income tax effects calculated using tax rates of 35.00% for TNMP and 39.59% for all
other segments unless otherwise indicated



                                                            
PNM Resources

Schedule 2

Reconciliation of Ongoing to GAAP Earnings

(Preliminary and Unaudited)
                                                                         
                     PNM              TNMP             Corporate         Consolidated
                                                       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
Power^(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 indicated
^(1) Gain on sale of First Choice Power is net of income taxes of $361



                                                      
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)
Quarter Ended
December 31,
2013
GAAP Net
Earnings
(Loss)               $ 0.03         $ 0.09         $ (0.02 )       $   0.10
Attributable
to PNMR:
Adjusting
items
Mark-to-market
impact of            0.03           —              —               0.03
economic
hedges
Net change in
unrealized           —              —              —               —
impairments of
NDT securities
Loss on
reacquired           —              —              —               —
debt
Regulatory           0.08          —             —              0.08      
disallowance
Total                0.11          —             —              0.11      
Adjustments
Ongoing
Earnings             $ 0.14        $ 0.09        $ (0.02 )       $   0.21  
(Loss)
Average
Diluted Shares
Outstanding:
80,355,172
                                                                   
Year Ended
December 31,
2013
GAAP Net
Earnings
(Loss)               $ 1.09         $ 0.36         $ (0.20 )       $   1.25
Attributable
to PNMR:
Adjusting
items
New Mexico
corporate            —              —              0.02            0.02
income tax
rate change
Mark-to-market
impact of            (0.01  )       —              —               (0.01     )
economic
hedges
Net change in
unrealized           —              —              —               —
impairments of
NDT securities
Loss on
reacquired           —              —              0.02            0.02
debt
State tax
credit               —              —              0.05            0.05
impairment
Regulatory           0.09          —             —              0.09      
disallowance
Total                0.08          —             0.09           0.16      
Adjustments
Ongoing
Earnings             $ 1.16        $ 0.36        $ (0.11 )       $   1.41  
(Loss)
Average
Diluted Shares
Outstanding:
80,430,929
                                                                   
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)
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 Power
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

Contact:

PNM Resources
Analysts
Jimmie Blotter, 505-241-2227
Media
Pahl Shipley, 505-241-2782
 
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