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
PNM Resources Reports 2014 First Quarter Results
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