PNM Resources Reports 2014 First Quarter Results

  PNM Resources Reports 2014 First Quarter Results

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

Business Wire

ALBUQUERQUE, N.M. -- May 2, 2014

PNM Resources (NYSE: PNM)

PNM Resources (In millions, except EPS)
                              
                    Q1 2014   Q1 2013
GAAP net earnings    $   12.5  $  10.6
GAAP EPS             $   0.16  $  0.13
Ongoing earnings     $   14.2  $  14.7
Ongoing EPS           $   0.18   $  0.18

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

“In the first quarter, PNM Resources delivered consistent earnings by
efficiently managing operations and successfully navigating a still-sluggish
economy,” said Pat Vincent-Collawn, PNM Resources’ chairman, president and
CEO. “The company is on track financially, and we remain focused on delivering
excellent reliability and responding to the needs of our customers.
Significantly, on April 30 Standard and Poor’s recognized continued
improvements in our business by changing the outlook for PNM Resources, PNM
and TNMP to positive.”

On April 30, the U.S. Environmental Protection Agency (EPA) issued its draft
proposed approval for the Revised State Implementation Plan for PNM’s San Juan
Generating Station. The company anticipates that EPA will issue a final
determination on the plan by the end of September. PNM has also requested
approval from the New Mexico Public Regulation Commission for the two-unit
retirement and the company’s proposals for replacement power.

SEGMENT REPORTING OF 2014 FIRST QUARTER EARNINGS

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

PNM (In millions, except EPS)
                           
                  Q1 2014  Q1 2013
GAAP net earnings  $  7.5   $  11.4
GAAP EPS           $  0.09  $  0.14
Ongoing earnings   $  9.0   $  14.0
Ongoing EPS         $  0.11   $  0.17

  *In the first quarter, PNM’s ongoing earnings benefitted primarily from
    rate relief, higher market prices for Palo Verde unit 3 and nuclear
    decommissioning trust gains. These benefits only partially offset the
    impacts of weather, a decrease in load and an increase in power plant
    outage expenses.

TNMP – an electric transmission and distribution utility in Texas.

TNMP (In millions, except EPS)
                           
                  Q1 2014  Q1 2013
GAAP net earnings  $  6.8   $  3.7
GAAP EPS           $  0.09  $  0.05
Ongoing earnings   $  6.8   $  3.7
Ongoing EPS        $  0.09  $  0.05

  *In the first quarter, TNMP’s ongoing earnings benefitted from additional
    revenue from transmission cost of service rate relief, continued strong
    load growth and weather.

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)
                                   
                         Q1 2014   Q1 2013
GAAP net earnings (loss)  ($1.9  )  ($4.5  )
GAAP EPS                  ($0.02 )  ($0.06 )
Ongoing earnings (loss)   ($1.6  )  ($3.0  )
Ongoing EPS                ($0.02 )   ($0.04 )

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

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

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

PNM Resources will discuss first 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 first quarter conference call.”

A telephone replay will be available at 2 p.m. Eastern until midnight May 16
by dialing (855) 859-2056 or (404) 537-3406 and using the confirmation code
31424826. 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 net earnings, nor
their probable impact on GAAP net earnings; therefore, management is generally
not able to provide a corresponding GAAP equivalent for earnings guidance.

PNM Resources, Inc. and Subsidiaries
Schedule 1
Reconciliation of GAAP to Ongoing Earnings
(Preliminary and Unaudited)
                                                             
                        PNM             TNMP        Corporate     Consolidated
                                                    and Other
                        (in thousands)
Quarter Ended March
31, 2014
GAAP Net Earnings
(Loss) Attributable     $  7,542        $ 6,803     $  (1,877 )   $  12,468
to PNMR:
Adjusting items, net
of income tax
effects
Mark-to-market
impact of economic      1,673           —           —             1,673
hedges^1
Net change in
unrealized
impairments of          (219       )    —           —             (219       )
available-for-sale
securities^2
New Mexico corporate
income tax rate         —              —          240          240        
change^3
Total Adjustments       1,454          —          240          1,694      
Ongoing Earnings        $  8,996       $ 6,803    $  (1,637 )   $  14,162  
(Loss)
                                                                  
Quarter Ended March
31, 2013
GAAP Net Earnings
(Loss) Attributable     $  11,437       $ 3,726     $  (4,537 )   $  10,626
to PNMR:
Adjusting items, net
of income tax
effects
Mark-to-market
impact of economic      2,962           —           —             2,962
hedges^4
Net change in
unrealized
impairments of          (362       )    —           —             (362       )
available-for-sale
securities^2
State tax credit        —              —          1,518        1,518      
impairment^3
Total Adjustments       2,600          —          1,518        4,118      
Ongoing Earnings        $  14,037      $ 3,726    $  (3,019 )   $  14,744  
(Loss)
                                                                  
2014 income tax effects calculated using tax rates of 35.00% for TNMP and
39.42% for other segments.
2013 income tax effects calculated using tax rates of 35.00% for TNMP and
39.59% for other segments.
                                                                  
The impacts of adjusting items are reflected on the GAAP Condensed
Consolidated Statement of Earnings as follows:
^1Pre-tax^5 impacts reflected in "Electric Operating Revenues" ($2,923
thousand reduction) and "Cost of energy" ($161 thousand) reduction)
^2Pre-tax^5 impact reflected in "Gains on available-for-sale securities'"
^3Impact reflected in "Income Taxes"
^4Pre-tax^5 impacts reflected in "Electric Operating Revenues" ($5,920
thousand reduction) and "Cost of energy" ($1,018 thousand reduction)
^5Tax impacts reflected in "Income Taxes"


PNM Resources, Inc. and Subsidiaries
Schedule 2
Reconciliation of GAAP to Ongoing Earnings Per Diluted Share
(Preliminary and Unaudited)
                                                             
                            PNM        TNMP       Corporate and   Consolidated
                                                  Other
                            (per diluted share)
Quarter Ended March 31,
2014
GAAP Net Earnings (Loss)    $ 0.09     $ 0.09     $   (0.02  )    $   0.16
Attributable to PNMR:
Adjusting items
Mark-to-market impact of    0.02       —          —               0.02
economic hedges
Net change in unrealized
impairments of              —          —          —               —
available-for-sale
securities
New Mexico corporate        —         —         —              —         
income tax rate change
Total Adjustments           0.02      —         —              0.02      
Ongoing Earnings (Loss)     $ 0.11    $ 0.09    $   (0.02  )    $   0.18  
Average Diluted Shares
Outstanding: 80,387,297
                                                                  
Quarter Ended March 31,
2013
GAAP Net Earnings (Loss)    $ 0.14     $ 0.05     $   (0.06  )    $   0.13
Attributable to PNMR:
Adjusting items
Mark-to-market impact of    0.04       —          —               0.04
economic hedges
Net change in unrealized
impairments of              (0.01  )   —          —               (0.01     )
available-for-sale
securities
State tax credit            —         —         0.02           0.02      
impairment
Total Adjustments           0.03      —         0.02           0.05      
Ongoing Earnings (Loss)     $ 0.17    $ 0.05    $   (0.04  )    $   0.18  
Average Diluted Shares
Outstanding: 80,580,184
                                                                  

PNM Resources, Inc. and Subsidiaries
Schedule 3
Condensed Consolidated Statement of Earnings
(Preliminary and Unaudited)
                                    
                                      Three Months Ended March 31,
                                      2014                    2013
                                      (In thousands, except per share amounts)
Electric Operating Revenues           $     328,897           $   317,665  
Operating Expenses:
Cost of energy                        112,614                  104,706
Administrative and general            43,859                   44,691
Energy production costs               47,288                   43,573
Depreciation and amortization         41,965                   40,807
Transmission and distribution costs   16,906                   16,295
Taxes other than income taxes         17,512                  16,889       
Total operating expenses              280,144                 266,961      
Operating income                      48,753                  50,704       
Other Income and Deductions:
Interest income                       2,117                    2,634
Gains on available-for-sale           2,573                    1,530
securities
Other income                          1,574                    1,710
Other (deductions)                    (2,931           )       (3,350       )
Net other income and deductions       3,333                   2,524        
Interest Charges                      29,535                  31,297       
Earnings before Income Taxes          22,551                   21,931
Income Taxes                          6,420                   7,969        
Net Earnings                          16,131                   13,962
(Earnings) Attributable to Valencia   (3,531           )       (3,204       )
Non-controlling Interest
Preferred Stock Dividend              (132             )       (132         )
Requirements of Subsidiary
Net Earnings Attributable to PNMR     $     12,468            $   10,626   
Net Earnings Attributable to PNMR
per Common Share:
Basic                                 $     0.16               $   0.13
Diluted                               $     0.16               $   0.13
Dividends Declared per Common Share   $     0.185              $   0.165

Contact:

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