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| 8-K - FORM 8-K - TEXAS NEW MEXICO POWER CO | earningsrelease8-k.htm |
For Immediate Release
Aug. 5, 2011
PNM Resources Reports 2011 Second Quarter Results
Conference call scheduled for 11 a.m. Eastern today
SECOND QUARTER SUMMARY
• | GAAP (generally accepted accounting principles) losses of $0.14 per diluted share, compared with earnings of $0.25 per diluted share in 2010 |
• | Ongoing earnings of $0.20 per diluted share, compared with $0.21 per diluted share in 2010 |
YEAR-TO-DATE SUMMARY
• | GAAP earnings of $0.04 per diluted share, compared with $0.16 per diluted share in 2010 |
• | Ongoing earnings of $0.24 per diluted share, compared with $0.27 per diluted share in 2010 |
(ALBUQUERQUE, N.M.) - PNM Resources (NYSE: PNM) today reported unaudited 2011 second quarter consolidated GAAP losses of $12.6 million, or $0.14 per diluted share, compared with earnings of $22.9 million, or $0.25 per diluted share, in 2010. GAAP results primarily reflect the impact of regulatory disallowances based on the July 28 oral decision by the N.M. Public Regulation Commission regarding the PNM electric rate case.
Quarterly unaudited, consolidated ongoing earnings were $18.2 million, or $0.20 per diluted share, compared with $19.3 million, or $0.21 per diluted share, in 2010. Ongoing earnings exclude various special items, but include the post-impairment losses of Optim Energy. Reconciliations of GAAP to non-GAAP measures such as ongoing earnings and EBITDA (earnings before interest charges, income taxes, depreciation and amortization) are shown on the attached schedules 1 through 8.
“Although we have an oral decision from the July 28 Commission meeting that grants $72 million in rate relief, we are awaiting the written order regarding PNM's ongoing rate case, and once we have it, we will analyze the order carefully to fully assess its impact on the utility,” said Pat Vincent-Collawn, PNM Resources president and CEO.
“We are disappointed that the Commission modified the stipulated agreement reached with key parties and supported by the hearing examiner and the Commission's own general counsel,” Vincent-Collawn said. “However we will assess the written order in light of our unrelenting focus to earn our allowed regulated returns and we will take the appropriate steps to ensure we reach those goals.
“By contrast, revenues for our other regulated utility, TNMP, now are aligned with transmission and distribution costs, and we expect TNMP to remain on track to earning its allowed return this year.
(MORE)
PNM Resources Reports Q2 Earnings 8-5-11 p. 2 of 5
“As expected, First Choice Power's quarterly earnings were lower this year compared with last year, but the retail electricity provider continues to demonstrate strong results. First Choice continues to make significant strides toward its goal of diversifying its portfolio and increasing commercial sales,” she said.
Quarterly financial materials are available at http://www.pnmresources.com/investors/results.cfm.
YEAR-TO-DATE RESULTS
For the first six months of 2011, PNM Resources reported unaudited consolidated GAAP earnings of $4.0 million, or $0.04 per diluted share, compared with $14.4 million, or $0.16 per diluted share, in 2010. Unaudited, consolidated ongoing earnings for the first half of 2011 were $22.0 million, or $0.24 per diluted share, compared with $24.7 million, or $0.27 per diluted share, in 2010.
SEGMENT REPORTING OF 2011 SECOND QUARTER EARNINGS
Regulated Businesses
PNM - a vertically integrated electric utility in New Mexico with distribution, transmission and generation assets.
• | PNM reported quarterly ongoing earnings of $12.5 million, or $0.14 per diluted share, compared with earnings of $10.7 million, or $0.12 per diluted share, in 2010. GAAP losses were $18.2 million, or $0.20 per diluted share, compared with earnings of $8.8 million, or $0.10 per diluted share, during the same period in 2010. |
• | Lower outage costs, weather-normalized load growth of 1.4 percent and realized gains associated with the Palo Verde Nuclear Decommissioning Trust more than offset the expiration of the wholesale tolling agreement from Palo Verde Nuclear Generating Station Unit 3. PNM experienced a seventh consecutive quarter of load growth following six quarters of load decline. |
• | In addition, GAAP results include pre-tax regulatory disallowances of $45.1 million based on a preliminary analysis of the N.M. PRC oral decision in PNM's electric rate case. These disallowances relate to regulatory assets for which the decision does not provide for recovery. While the company agreed to not seek recovery of rate case expenses and certain fuel costs, the oral decision does not provide for recovery of debt refinancings that occurred in prior years. These disallowances do not impact ongoing earnings. |
TNMP - an electric transmission and distribution utility in Texas.
• | TNMP reported ongoing earnings of $6.9 million, or $0.08 per diluted share, and GAAP earnings of $4.1 million, or $0.04 per diluted share, compared with 2010 quarterly ongoing and GAAP earnings of $4.1 million, or $0.04 per diluted share, in 2010. |
• | Higher retail and transmission rates and the effects of warmer weather improved earnings. Weather-normalized load growth continued a moderate trend and was 1.5 percent during the quarter. GAAP results reflect pre-tax regulatory disallowances of $3.9 million related to the adjustment of the interest rate on the competitive transition charge retroactive to 2006. |
Competitive Businesses
First Choice Power - a competitive retail electric provider in Texas.
• | First Choice Power reported ongoing earnings of $9.0 million, or $0.10 per diluted share, compared with ongoing earnings of $10.7 million, or $0.12 per diluted share, in 2010. GAAP earnings were $6.6 million, or $0.07 per diluted share, compared with $16.6 million, or $0.18 per diluted share, last year. |
• | A 14.8 percent increase in sales volumes as a result of warmer weather, higher per-customer usage and stronger commercial sales, combined with slightly lower bad-debt expense, were more than offset by lower customer prices and higher marketing costs. |
(MORE)
PNM Resources Reports Q2 Earnings 8-5-11 p. 3 of 5
Optim Energy - jointly owned by PNM Resources and a subsidiary of Cascade Investment, L.L.C., Optim Energy owns interests in three electric generating plants in Texas, totaling nearly 1,200 megawatts.
• | PNM Resources' share of Optim Energy net ongoing losses was $5.6 million, or $0.06 per diluted share, compared with 2010 losses of $1.9 million, or $0.02 per diluted share. PNM Resources' share of Optim Energy's ongoing EBITDA was $2.0 million, compared with $8.9 million in 2010. Ongoing EBITDA decreased primarily because of the expired power sales contract associated with Optim Energy's Twin Oaks power facility. |
NOTE: As previously reported, PNM Resources fully impaired its investment in Optim Energy at Dec. 31, 2010, and reduced the carrying value of that investment to zero. In accordance with GAAP, the post-impairment losses of Optim Energy are not reflected in PNM Resources' 2011 GAAP earnings. In the second quarter of 2010, PNM Resources' share of Optim Energy net GAAP losses was $2.3 million, or $0.02 per diluted share.
Corporate/Other - a segment that reflects costs at the PNM Resources holding company, mainly comprised of interest expense related to debt. For the purposes of this news release, the Corporate/Other segment excludes the results of Optim Energy reported above.
• | Corporate/Other reported ongoing losses of $4.5 million, or $0.05 per diluted share, and GAAP losses of $5.2 million, or $0.06 per diluted share, compared with 2010 ongoing and GAAP losses of $4.2 million, or $0.05 per diluted share. |
2011 GUIDANCE RANGE
Assuming the $72 million rate increase is implemented in mid-August, PNM Resources is affirming its 2011 financial outlook. Management expects 2011 consolidated ongoing earnings to be in the range of $0.80 to $0.92 per diluted share and 2011 cash earnings to be in the range of $365 million to $390 million. The range includes the ongoing earnings estimates for the company's regulated businesses of $0.89 to $0.96 per diluted share.
Management also affirmed the 2011 ongoing EBITDA guidance ranges for First Choice Power of $43 million to $53 million and for Optim Energy of $20 million to $30 million, which represents 100 percent of Optim Energy's estimated results. PNM Resources owns a 50-percent interest in Optim Energy.
SECOND QUARTER EARNINGS CALL: 11 AM EASTERN TODAY
PNM Resources will discuss second 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 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 Web site 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 second quarter earnings conference call.” A telephone replay will be available at 2 p.m. Eastern until midnight Aug. 19 by dialing (800) 642-1687 or (706) 645-9291 and using confirmation code 79756117. Supporting material for PNM Resources' earnings announcements can be viewed and downloaded at http://www.pnmresources.com/investors/results.cfm.
(MORE)
PNM Resources Reports Q2 Earnings 8-5-11 p. 4 of 5
E-MAIL ALERTS, RSS FEEDS AVAILABLE
PNM Resources encourages analysts, investors and other interested parties to visit www.PNMResources.com and register to automatically receive company financial information by e-mail or RSS feeds. Once registered, participants can choose from a menu to automatically receive information, including news releases, notices of Web casts and filings with the U.S. Securities and Exchange Commission. Participants can unsubscribe at any time and will not receive information that was not requested.
Background:
PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2010 consolidated operating revenues of $1.7 billion. Through its utility and energy subsidiaries, PNM Resources has approximately 2,630 megawatts of generation capacity and serves electricity to more than 875,300 homes and businesses in New Mexico and Texas. The company also has a 50-percent ownership of Optim Energy, which owns nearly 1,200 megawatts of generation resources in Texas. For more information, visit the company's Web site 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', 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 and PNM Resources, 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, PNM Resources, PNM, and TNMP caution readers not to place undue reliance on these statements. PNM Resources', 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. These factors include: Conditions affecting the Company's ability to access the financial markets and the Company's or Optim Energy LLC's (“Optim Energy”) ability to negotiate new credit facilities for those expiring in 2012, including disruptions in the credit markets and actions by ratings agencies affecting the Company's credit ratings, the potential unavailability of cash from PNM Resources' subsidiaries or Optim Energy due to regulatory, statutory, or contractual restrictions, the impacts of decreases in the values of marketable equity securities on the trust funds maintained to provide nuclear decommissioning funding and pension and other postretirement benefits, including the levels of funding and expense, the recession and its impacts on the electricity usage of the Company's customers, state and federal regulatory, legislative, and judicial decisions and actions, including the outcomes of PNM's pending electric rate case and transmission rate case, and appeals of prior regulatory proceedings, the ability of PNM to successfully defend the utilization of a future test year in its electric rate filings with the New Mexico Public Regulation Commission (“NMPRC”), including PNM's ability to withstand challenges by regulators and intervenors, the ability of the Company to successfully forecast and manage its operating and capital expenditures, particularly in the context of a future test year rate case with respect to PNM, the ability of PNM and TNMP to recover their costs and earn their allowed returns in their regulated jurisdictions, the ability of PNM to meet the renewable energy requirements established by the NMPRC, including the resource diversity requirement, within the specified cost parameters, the risk that replacement power costs incurred by PNM related to not meeting the specified capacity factor for its generating units under its emergency fuel and purchased power adjustment clause will not be approved by the NMPRC, the risk that PNM may not be able to recover the increased costs of rights-of-way renewals on Native American lands through rates charged to customers, the ongoing risks relating to PNM Resources' ownership interest in Optim Energy, uncertainties surrounding PNM Resources' assessments of strategic alternatives for its competitive businesses, FCP Enterprises, Inc. (“First Choice”) and Optim Energy, the risk that Optim Energy requires additional financial sources to expand its generation capacity, or otherwise, but is unable to identify and implement profitable acquisitions or that PNM Resources and ECJV Holdings, LLC will not agree to make additional capital contributions to Optim Energy, state and federal regulation or legislation relating to climate change, reduction of greenhouse gas emissions, coal combustion byproducts, nitrogen oxide, and other power plant emissions, including the risk that the Company and Optim Energy may have to commit to substantial capital investments and additional operating costs to comply with new environmental requirements, including possible future requirements to address regional haze regulations and related Best Available Retrofit Technology requirements and concerns about global climate change, and the resultant impacts on the operations and economic viability of generating plants in which PNM and Optim Energy have interests, the performance of generating units, including the Palo Verde Nuclear Generating Station (“PVNGS”), the San Juan Generating Station, the Four Corners Power Plant, and Optim Energy generating units, transmission systems, and distribution systems, which could be negatively affected by major equipment failures, major weather disruptions, disruptions in fuel supply, and other significant operational issues, financial and operational risks at PVNGS relating to the regulatory review and actions in response to the events at the Fukushima Daiichi Nuclear Power Plant in Japan, the risks associated with completion of generation, transmission, distribution, and other projects, including construction delays and unanticipated cost overruns, uncertainty regarding the requirements and related costs of decommissioning power plants owned or partially owned by PNM and Optim Energy and coal mines supplying certain PNM power plants, as well as the ability to recover decommissioning costs from customers, uncertainty surrounding the status of PNM's participation in jointly-owned generation projects resulting from the scheduled expiration of the operational documents for the projects beginning in 2016 and potential changes in the objectives of the participants in the projects, the risk that recently enacted reliability standards regarding available transmission capacity may reduce certain PNM transmission rights used to transmit its generation resources and provide access to transmission customers resulting in a need to purchase additional transmission capacity, reduce sales of transmission capacity, or operate generation less economically, changes in Electric Reliability Council of Texas (“ERCOT”) protocols, changes in the cost of power acquired by First Choice and changes in the retail price of power in ERCOT, the ability of First Choice to attract and retain customers, collections experience, fluctuations in interest rates, weather, water supply, changes in fuel costs, availability of fuel supplies, the effectiveness of risk management and commodity risk transactions, seasonality and other changes in supply and demand in the market for electric power, the impact of mandatory energy efficiency measures on customer energy usage, variability of wholesale power prices and natural gas prices, volatility and liquidity in the wholesale power markets and the natural gas markets, uncertainty regarding the ongoing validity of government programs for emission allowances, changes in the competitive environment in the electric industry, the outcome of legal proceedings, the extent of insurance coverage available for claims made in litigation, changes in applicable accounting principles, and the performance of state, regional, and national economies.
(MORE)
PNM Resources Reports Q2 Earnings 8-5-11 p. 5 of 5
Non-GAAP Financial Measures
The Company uses ongoing earnings and ongoing earnings per diluted share (or ongoing diluted earnings per share) and EBITDA (earnings before interest charges, income taxes, depreciation and amortization) and ongoing EBITDA 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. In addition, The Company uses forecasts of ongoing EBITDA and cash earnings guidance to provide investors with management's expectations of additional indicators of ongoing financial performance. Since forecasts of EBITDA and cash earnings are derived from forecasted ongoing earnings, management is not able reconcile these items to a GAAP equivalent.
CONTACTS:
Analysts Analysts & Media
Gina Jacobi Frederick Bermudez
Director, Investor Relations (505) 241-4831
(505) 241-2211
(END)
PNM Resources
Schedule 1
Reconciliation of Ongoing to GAAP Earnings
(Preliminary and Unaudited)
Quarter Ended June 30, 2011 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | (18,194 | ) | $ | 4,102 | $ | 6,622 | $ | — | $ | (5,152 | ) | $ | (12,622 | ) | |||||||||
Adjusting items, net of income tax effects* | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | 276 | — | 2,285 | (1,769 | ) | — | 792 | |||||||||||||||||
Net change in unrealized impairments of NDT securities | 1,360 | — | — | — | — | 1,360 | ||||||||||||||||||
Strategic alternatives - competitive businesses | — | — | — | — | 558 | 558 | ||||||||||||||||||
Process improvement initiatives | 1,764 | 286 | 62 | — | 47 | 2,159 | ||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | — | — | (3,839 | ) | — | (3,839 | ) | ||||||||||||||||
Regulatory disallowances** | 27,248 | 2,550 | — | — | — | 29,798 | ||||||||||||||||||
Total Adjustments | 30,648 | 2,836 | 2,347 | (5,608 | ) | 605 | 30,828 | |||||||||||||||||
Ongoing Earnings (Loss) | $ | 12,454 | $ | 6,938 | $ | 8,969 | $ | (5,608 | ) | $ | (4,547 | ) | $ | 18,206 | ||||||||||
Six Months Ended June 30, 2011 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | (14,544 | ) | $ | 8,265 | $ | 20,111 | $ | — | $ | (9,817 | ) | $ | 4,015 | ||||||||||
Adjusting items, net of income tax effects* | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | (877 | ) | — | (3,569 | ) | (794 | ) | — | (5,240 | ) | ||||||||||||||
Net change in unrealized impairments of NDT securities | (355 | ) | — | — | — | — | (355 | ) | ||||||||||||||||
Strategic alternatives - competitive business | — | — | — | — | 907 | 907 | ||||||||||||||||||
Process improvement initiatives | 1,764 | 286 | 62 | — | 47 | 2,159 | ||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | — | — | (9,322 | ) | — | (9,322 | ) | ||||||||||||||||
Regulatory disallowances** | 27,248 | 2,550 | — | — | — | 29,798 | ||||||||||||||||||
Total Adjustments | 27,780 | 2,836 | (3,507 | ) | (10,116 | ) | 954 | 17,947 | ||||||||||||||||
Ongoing Earnings (Loss) | $ | 13,236 | $ | 11,101 | $ | 16,604 | $ | (10,116 | ) | $ | (8,863 | ) | $ | 21,962 | ||||||||||
* Income tax effects calculated using tax rates of 35.65% for First Choice, 35.00% for TNMP and 39.59% for all other segments unless otherwise indicated. | ||||||||||||||||||||||||
** PNM's regulatory disallowances are based on a preliminary analysis of the NMPRC oral decision in PNM's rate case. The analysis is continuing and it is possible that certain items could be reversed. | ||||||||||||||||||||||||
PNM Resources
Schedule 2
Reconciliation of Ongoing to GAAP Earnings
(Preliminary and Unaudited)
Quarter Ended June 30, 2010 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 8,770 | $ | 4,106 | $ | 16,553 | $ | (2,331 | ) | $ | (4,220 | ) | $ | 22,878 | ||||||||||
Adjusting items, net of income tax effects* | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | 191 | — | (5,890 | ) | 386 | — | (5,313 | ) | ||||||||||||||||
Net change in unrealized impairments of NDT securities | 1,422 | — | — | — | — | 1,422 | ||||||||||||||||||
Loss on reacquired debt | 282 | — | — | — | — | 282 | ||||||||||||||||||
Total Adjustments | 1,895 | — | (5,890 | ) | 386 | — | (3,609 | ) | ||||||||||||||||
Ongoing Earnings (Loss) | $ | 10,665 | $ | 4,106 | $ | 10,663 | $ | (1,945 | ) | $ | (4,220 | ) | $ | 19,269 | ||||||||||
Six Months Ended June 30, 2010 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Earnings (Loss) Attributable to PNMR: | $ | 13,085 | $ | 5,750 | $ | 9,100 | $ | (4,960 | ) | $ | (8,546 | ) | $ | 14,429 | ||||||||||
Adjusting items, net of income tax effects* | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | 3,409 | — | 11,979 | (919 | ) | — | 14,469 | |||||||||||||||||
Net change in unrealized impairments of NDT securities | 697 | — | — | — | — | 697 | ||||||||||||||||||
Loss on reacquired debt | 282 | — | — | — | — | 282 | ||||||||||||||||||
Disposition of litigation | (5,141 | ) | — | — | — | — | (5,141 | ) | ||||||||||||||||
Total Adjustments | (753 | ) | — | 11,979 | (919 | ) | — | 10,307 | ||||||||||||||||
Ongoing Earnings (Loss) | $ | 12,332 | $ | 5,750 | $ | 21,079 | $ | (5,879 | ) | $ | (8,546 | ) | $ | 24,736 | ||||||||||
* Income tax effects calculated using tax rates of 35.65% for First Choice and TNMP and 39.59% for all other segments unless otherwise indicated. | ||||||||||||||||||||||||
PNM Resources
Schedule 3
Reconciliation of Ongoing to GAAP Earnings Per Diluted Share
(Preliminary and Unaudited)
Quarter Ended June 30, 2011 | ||||||||||||||||||||||||
(earnings per diluted share) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | (0.20 | ) | $ | 0.04 | $ | 0.07 | $ | — | $ | (0.06 | ) | $ | (0.14 | ) | |||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | — | — | 0.03 | (0.02 | ) | — | 0.01 | |||||||||||||||||
Net change in unrealized impairments of NDT securities | 0.02 | — | — | — | — | 0.02 | ||||||||||||||||||
Strategic alternatives - competitive businesses | — | — | — | — | 0.01 | 0.01 | ||||||||||||||||||
Process improvement initiatives | 0.02 | — | — | — | — | 0.02 | ||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | — | — | (0.04 | ) | — | (0.04 | ) | ||||||||||||||||
Regulatory disallowances* | 0.30 | 0.03 | — | — | — | 0.32 | ||||||||||||||||||
Total Adjustments | 0.34 | 0.03 | 0.03 | (0.06 | ) | 0.01 | 0.34 | |||||||||||||||||
Ongoing Earnings (Loss) | $ | 0.14 | $ | 0.08 | $ | 0.10 | $ | (0.06 | ) | $ | (0.05 | ) | $ | 0.20 | ||||||||||
Average Shares Outstanding (Basic and Diluted): | 91,589,994 | |||||||||||||||||||||||
Six Months Ended June 30, 2011 | ||||||||||||||||||||||||
(earnings per diluted share) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | (0.16 | ) | $ | 0.09 | $ | 0.22 | $ | — | $ | (0.11 | ) | $ | 0.04 | ||||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | (0.01 | ) | — | (0.04 | ) | (0.01 | ) | — | (0.06 | ) | ||||||||||||||
Net change in unrealized impairments of NDT securities | — | — | — | — | — | — | ||||||||||||||||||
Strategic alternatives - competitive businesses | — | — | — | — | 0.01 | 0.01 | ||||||||||||||||||
Process improvement initiatives | 0.02 | — | — | — | — | 0.02 | ||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | — | — | (0.10 | ) | — | (0.10 | ) | ||||||||||||||||
Regulatory disallowances* | 0.30 | 0.03 | — | — | — | 0.32 | ||||||||||||||||||
Total Adjustments | 0.30 | 0.03 | (0.04 | ) | (0.11 | ) | 0.01 | 0.19 | ||||||||||||||||
Ongoing Earnings (Loss) | $ | 0.14 | $ | 0.12 | $ | 0.18 | $ | (0.11 | ) | $ | (0.10 | ) | $ | 0.24 | ||||||||||
Average Shares Outstanding (Diluted): | 92,102,430 | |||||||||||||||||||||||
Tables may not appear visually accurate due to rounding. | ||||||||||||||||||||||||
* PNM's regulatory disallowances are based on a preliminary analysis of the NMPRC oral decision in PNM's rate case. The analysis is continuing and it is possible that certain items could be reversed. | ||||||||||||||||||||||||
PNM Resources
Schedule 4
Reconciliation of Ongoing to GAAP Earnings Per Diluted Share
(Preliminary and Unaudited)
Quarter Ended June 30, 2010 | ||||||||||||||||||||||||
(earnings per diluted share) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 0.10 | $ | 0.04 | $ | 0.18 | $ | (0.02 | ) | $ | (0.05 | ) | $ | 0.25 | ||||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | — | — | (0.06 | ) | — | — | (0.06 | ) | ||||||||||||||||
Net change in unrealized impairments of NDT securities | 0.02 | — | — | — | — | 0.02 | ||||||||||||||||||
Loss on reacquired debt | — | — | — | — | — | — | ||||||||||||||||||
Total Adjustments | 0.02 | — | (0.06 | ) | — | — | (0.04 | ) | ||||||||||||||||
Ongoing Earnings (Loss) | $ | 0.12 | $ | 0.04 | $ | 0.12 | $ | (0.02 | ) | $ | (0.05 | ) | $ | 0.21 | ||||||||||
Average Diluted Shares Outstanding: | 91,832,650 | |||||||||||||||||||||||
Six Months Ended June 30, 2010 | ||||||||||||||||||||||||
(earnings per diluted share) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Earnings (Loss) Attributable to PNMR: | $ | 0.14 | $ | 0.06 | $ | 0.10 | $ | (0.05 | ) | $ | (0.09 | ) | $ | 0.16 | ||||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | 0.04 | — | 0.13 | (0.01 | ) | — | 0.16 | |||||||||||||||||
Net change in unrealized impairments of NDT securities | 0.01 | — | — | — | — | 0.01 | ||||||||||||||||||
Loss on reacquired debt | — | — | — | — | — | — | ||||||||||||||||||
Disposition of litigation | (0.06 | ) | — | — | — | — | (0.06 | ) | ||||||||||||||||
Total Adjustments | (0.01 | ) | — | 0.13 | (0.01 | ) | — | 0.11 | ||||||||||||||||
Ongong Earnings (Loss) | $ | 0.13 | $ | 0.06 | $ | 0.23 | $ | (0.06 | ) | $ | (0.09 | ) | $ | 0.27 | ||||||||||
Average Diluted Shares Outstanding: | 91,694,218 | |||||||||||||||||||||||
Tables may not appear visually accurate due to rounding. | ||||||||||||||||||||||||
PNM Resources
Schedule 5
Segment Reconciliation of GAAP Net Earnings to Ongoing EBITDA
(Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization)
(Preliminary and Unaudited)
(in millions)
Quarter Ended June 30, 2011 | ||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Corporate and Other* | Consolidated | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | (18.2 | ) | $ | 4.1 | $ | 6.6 | $ | (5.2 | ) | $ | (12.6 | ) | |||||||
Interest charges | 18.0 | 7.3 | 0.1 | 5.1 | 30.5 | |||||||||||||||
Income taxes | (11.8 | ) | 2.5 | 3.7 | (3.6 | ) | (9.2 | ) | ||||||||||||
Depreciation and amortization | 22.9 | 10.7 | 0.4 | 4.3 | 38.3 | |||||||||||||||
EBITDA | 10.9 | 24.6 | 10.8 | 0.6 | 47.0 | |||||||||||||||
GAAP to ongoing adjustments (before tax) | 50.0 | 4.4 | 3.7 | (8.4 | ) | 49.7 | ||||||||||||||
Ongoing EBITDA | $ | 60.9 | $ | 29.0 | $ | 14.5 | $ | (7.8 | ) | $ | 96.7 | |||||||||
Six Months Ended June 30, 2011 | ||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Corporate and Other* | Consolidated | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | (14.5 | ) | $ | 8.3 | $ | 20.1 | $ | (9.8 | ) | $ | 4.0 | ||||||||
Interest charges | 36.1 | 14.6 | 0.3 | 10.1 | 61.1 | |||||||||||||||
Income taxes | (9.4 | ) | 5.1 | 11.2 | (6.6 | ) | 0.3 | |||||||||||||
Depreciation and amortization | 46.6 | 21.0 | 0.6 | 8.5 | 76.7 | |||||||||||||||
EBITDA | 58.8 | 49.0 | 32.2 | 2.2 | 142.1 | |||||||||||||||
Ongoing adjustments (before tax) | 44.5 | 4.3 | (5.4 | ) | (15.1 | ) | 28.4 | |||||||||||||
Ongoing EBITDA | $ | 103.3 | $ | 53.3 | $ | 26.8 | $ | (12.9 | ) | $ | 170.5 | |||||||||
* Corporate & Other segment includes equity in net earnings (loss) of Optim Energy. See Schedule 7 for calculation of Optim Energy ongoing EBITDA. | ||||||||||||||||||||
Tables may not appear visually accurate due to rounding. | ||||||||||||||||||||
PNM Resources
Schedule 6
Segment Reconciliation of GAAP Net Earnings to Ongoing EBITDA
(Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization)
(Preliminary and Unaudited)
(in millions)
Quarter Ended June 30, 2010 | ||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Corporate and Other* | Consolidated | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 8.8 | $ | 4.1 | $ | 16.6 | $ | (6.6 | ) | $ | 22.9 | |||||||||
Interest charges | 18.4 | 8.0 | 0.4 | 5.0 | 31.8 | |||||||||||||||
Income taxes | 5.9 | 2.7 | 9.3 | (4.4 | ) | 13.5 | ||||||||||||||
Depreciation and amortization | 22.9 | 10.0 | 0.2 | 4.3 | 37.4 | |||||||||||||||
EBITDA | 56.0 | 24.8 | 26.5 | (1.7 | ) | 105.6 | ||||||||||||||
GAAP to ongoing adjustments (before tax) | 2.4 | — | (9.2 | ) | 0.8 | (6.0 | ) | |||||||||||||
Ongoing EBITDA | $ | 58.4 | $ | 24.8 | $ | 17.3 | $ | (0.9 | ) | $ | 99.6 | |||||||||
Six Months Ended June 30, 2010 | ||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Corporate and Other* | Consolidated | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 13.1 | $ | 5.8 | $ | 9.1 | $ | (13.6 | ) | $ | 14.4 | |||||||||
Interest charges | 36.5 | 15.8 | 0.7 | 10.2 | 63.2 | |||||||||||||||
Income taxes | 8.8 | 3.7 | 5.1 | (9.0 | ) | 8.6 | ||||||||||||||
Depreciation and amortization | 45.8 | 20.1 | 0.5 | 8.3 | 74.7 | |||||||||||||||
EBITDA | 104.2 | 45.4 | 15.4 | (4.1 | ) | 160.9 | ||||||||||||||
GAAP to ongoing adjustments (before tax) | (2.7 | ) | — | 18.6 | (1.5 | ) | 14.4 | |||||||||||||
Ongoing EBITDA | $ | 101.5 | $ | 45.4 | $ | 34.0 | $ | (5.6 | ) | $ | 175.3 | |||||||||
* Corporate & Other segment includes equity in net earnings (loss) of Optim Energy. See Schedule 7 for calculation of Optim Energy ongoing EBITDA. | ||||||||||||||||||||
Tables may not appear visually accurate due to rounding. | ||||||||||||||||||||
PNM Resources
Schedule 7
Calculation of Optim Energy Ongoing EBITDA
(Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization)
(Preliminary and Unaudited)
Quarter Ended | Six Months Ended | |||||||
June 30, 2011 | June 30, 2011 | |||||||
(in millions) | ||||||||
GAAP Net Earnings (Loss) | $ | (12.7 | ) | $ | (30.9 | ) | ||
Interest expense | 4.0 | 8.0 | ||||||
Income tax | 0.1 | 0.1 | ||||||
Depreciation and amortization expense | 13.1 | 24.7 | ||||||
Mark-to-market impact of economic hedges | (5.9 | ) | (2.6 | ) | ||||
Purchase accounting amortizations | 5.3 | 11.5 | ||||||
Ongoing Optim Energy EBITDA | 3.9 | 10.8 | ||||||
50 percent of Ongoing EBITDA (PNMR share) | $ | 2.0 | $ | 5.4 | ||||
Quarter Ended | Six Months Ended | |||||||
June 30, 2010 | June 30, 2010 | |||||||
(in millions) | ||||||||
GAAP Net Earnings (Loss) | $ | (6.5 | ) | $ | (14.4 | ) | ||
Interest expense | 4.7 | 9.3 | ||||||
Income tax | — | 0.1 | ||||||
Depreciation and amortization expense | 12.9 | 24.9 | ||||||
Mark-to-market impact of economic hedges | 1.3 | (3.0 | ) | |||||
Purchase accounting amortizations | 5.4 | 10.7 | ||||||
Ongoing Optim Energy EBITDA | 17.8 | 27.6 | ||||||
50 percent of Ongoing EBITDA (PNMR share) | $ | 8.9 | $ | 13.8 | ||||
PNM Resources
Schedule 8
Reconciliation of Ongoing (non-GAAP) Net Earnings
to GAAP Consolidated Statement of Earnings (Loss)
(Preliminary and Unaudited)
(in thousands, except per share data)
Six Months Ended June 30, | ||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||
GAAP | Adjustments | Ongoing | GAAP | Adjustments | Ongoing | |||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||
Operating revenues | $ | 803,249 | $ | (739 | ) | (a) | $ | 802,510 | $ | 789,212 | $ | 3,273 | (a) | $ | 792,485 | |||||||||||
Cost of energy | 331,961 | 15,777 | (b) | 347,738 | 342,069 | (11,757 | ) | (h) | 330,312 | |||||||||||||||||
Gross margin | 471,288 | (16,516 | ) | 454,772 | 447,143 | 15,030 | 462,173 | |||||||||||||||||||
Other operating expenses | 337,090 | (55,513 | ) | (c) | 281,577 | 288,332 | (1,417 | ) | (d) | 286,915 | ||||||||||||||||
Depreciation and amortization | 76,745 | (1,416 | ) | (d) | 75,329 | 74,655 | (1,415 | ) | (d) | 73,240 | ||||||||||||||||
Operating income (loss) | 57,453 | 40,413 | 97,866 | 84,156 | 17,862 | 102,018 | ||||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | (16,745 | ) | (e) | (16,745 | ) | (8,210 | ) | (1,521 | ) | (a) | (9,731 | ) | |||||||||||||
Net other income (deductions) | 14,909 | (589 | ) | (f) | 14,320 | 16,866 | (6,890 | ) | (i) | 9,976 | ||||||||||||||||
Interest charges | (61,127 | ) | — | (61,127 | ) | (63,171 | ) | — | (63,171 | ) | ||||||||||||||||
Earnings (Loss) before Income Taxes | 11,235 | 23,079 | 34,314 | 29,641 | 9,451 | 39,092 | ||||||||||||||||||||
Income Taxes (Benefit) | 304 | 11,784 | (g) | 12,088 | 8,552 | 5,540 | (g) | 14,092 | ||||||||||||||||||
Net Earnings (Loss) | 10,931 | 11,295 | 22,226 | 21,089 | 3,911 | 25,000 | ||||||||||||||||||||
Earnings Attributable to Valencia Non-controlling Interest | (6,652 | ) | 6,652 | (d) | — | (6,396 | ) | 6,396 | (d) | — | ||||||||||||||||
Preferred Stock Dividend Requirements of Subsidiary | (264 | ) | — | (264 | ) | (264 | ) | — | (264 | ) | ||||||||||||||||
Net Earnings (Loss) Attributable to PNMR | $ | 4,015 | $ | 17,947 | $ | 21,962 | $ | 14,429 | $ | 10,307 | $ | 24,736 | ||||||||||||||
Net Earnings (Loss) Attributable to PNMR per Common Share: | ||||||||||||||||||||||||||
Basic | $ | 0.04 | $ | 0.20 | $ | 0.24 | $ | 0.16 | $ | 0.11 | $ | 0.27 | ||||||||||||||
Diluted | $ | 0.04 | $ | 0.20 | $ | 0.24 | $ | 0.16 | $ | 0.11 | $ | 0.27 | ||||||||||||||
Average common shares outstanding: | ||||||||||||||||||||||||||
Basic | 91,600 | 91,553 | ||||||||||||||||||||||||
Diluted | 92,103 | 91,694 | ||||||||||||||||||||||||
(a) Mark-to-market impact of economic hedges | ||||||||||||||||||||||||||
(b) Mark-to-market impact of economic hedges $6,258; Consolidation of Valencia $9,519 | ||||||||||||||||||||||||||
(c) Consolidation of Valencia $(1,451); Regulatory disallowances $(49,028); Process improvement initiatives $(3,534); Strategic alternatives - competitive business $(1,500) | ||||||||||||||||||||||||||
(d) Consolidation of Valencia | ||||||||||||||||||||||||||
(e) Equity in net earnings (loss) of Optim Energy $(15,431); Mark-to-market impact of economic hedges $(1,314) | ||||||||||||||||||||||||||
(f) Net change in unrealized impairments of NDT securities | ||||||||||||||||||||||||||
(g) Net taxes on adjusting items | ||||||||||||||||||||||||||
(h) Mark-to-market impact of economic hedges $(20,985); Consolidation of Valencia $9,228 | ||||||||||||||||||||||||||
(i) Disposition of litigation $(8,509); Net change in unrealized impairment of NDT securities $1,153; Loss on reaquired debt $466 | ||||||||||||||||||||||||||
PNM RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Electric Operating Revenues | $ | 415,586 | $ | 405,817 | $ | 803,249 | $ | 789,212 | |||||||
Operating Expenses: | |||||||||||||||
Cost of energy | 173,454 | 151,181 | 331,961 | 342,069 | |||||||||||
Administrative and general | 68,795 | 62,420 | 127,260 | 125,205 | |||||||||||
Energy production costs | 47,127 | 51,811 | 95,779 | 105,696 | |||||||||||
Regulatory disallowances | 49,028 | — | 49,028 | — | |||||||||||
Depreciation and amortization | 38,272 | 37,376 | 76,745 | 74,655 | |||||||||||
Transmission and distribution costs | 18,161 | 15,672 | 35,038 | 29,562 | |||||||||||
Taxes other than income taxes | 15,515 | 13,683 | 29,985 | 27,869 | |||||||||||
Total operating expenses | 410,352 | 332,143 | 745,796 | 705,056 | |||||||||||
Operating income | 5,234 | 73,674 | 57,453 | 84,156 | |||||||||||
Other Income and Deductions: | |||||||||||||||
Interest income | 4,234 | 5,083 | 8,261 | 10,110 | |||||||||||
Gains (losses) on investments held by NDT | 5,894 | (1,342 | ) | 11,797 | 400 | ||||||||||
Other income | 809 | 1,171 | 1,804 | 11,370 | |||||||||||
Equity in net earnings (loss) of Optim Energy | — | (3,858 | ) | — | (8,210 | ) | |||||||||
Other deductions | (3,881 | ) | (3,173 | ) | (6,953 | ) | (5,014 | ) | |||||||
Net other income (deductions) | 7,056 | (2,119 | ) | 14,909 | 8,656 | ||||||||||
Interest Charges | 30,512 | 31,761 | 61,127 | 63,171 | |||||||||||
Earnings (Loss) before Income Taxes | (18,222 | ) | 39,794 | 11,235 | 29,641 | ||||||||||
Income Taxes (Benefit) | (9,202 | ) | 13,492 | 304 | 8,552 | ||||||||||
Net Earnings (Loss) | (9,020 | ) | 26,302 | 10,931 | 21,089 | ||||||||||
(Earnings) Attributable to Valencia Non-controlling Interest | (3,470 | ) | (3,292 | ) | (6,652 | ) | (6,396 | ) | |||||||
Preferred Stock Dividend Requirements of Subsidiary | (132 | ) | (132 | ) | (264 | ) | (264 | ) | |||||||
Net Earnings (Loss) Attributable to PNMR | $ | (12,622 | ) | $ | 22,878 | $ | 4,015 | $ | 14,429 | ||||||
Net Earnings (Loss) Attributable to PNMR per Common Share: | |||||||||||||||
Basic | $ | (0.14 | ) | $ | 0.25 | $ | 0.04 | $ | 0.16 | ||||||
Diluted | $ | (0.14 | ) | $ | 0.25 | $ | 0.04 | $ | 0.16 | ||||||
Dividends Declared per Common Share | $ | 0.125 | $ | 0.125 | $ | 0.250 | $ | 0.250 | |||||||
PNM RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2011 | December 31, 2010 | ||||||
(In thousands) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 14,023 | $ | 15,404 | |||
Accounts receivable, net of allowance for uncollectible accounts of $9,275 and $11,178 | 103,824 | 97,245 | |||||
Unbilled revenues | 97,513 | 71,453 | |||||
Other receivables | 46,596 | 58,901 | |||||
Affiliate receivables | 2,392 | 1,661 | |||||
Materials, supplies, and fuel stock | 51,370 | 52,479 | |||||
Regulatory assets | 29,608 | 36,292 | |||||
Commodity derivative instruments | 18,840 | 15,999 | |||||
Income taxes receivable | 102,317 | 97,450 | |||||
Current portion of accumulated deferred income taxes | 886 | 886 | |||||
Other current assets | 99,919 | 96,110 | |||||
Total current assets | 567,288 | 543,880 | |||||
Other Property and Investments: | |||||||
Investment in PVNGS lessor notes | 90,555 | 103,871 | |||||
Investments held by NDT | 168,513 | 156,922 | |||||
Other investments | 15,645 | 18,791 | |||||
Non-utility property, net of accumulated depreciation of $2,333 and $2,307 | 12,317 | 7,333 | |||||
Total other property and investments | 287,030 | 286,917 | |||||
Utility Plant: | |||||||
Plant in service and plant held for future use | 4,959,239 | 4,860,614 | |||||
Less accumulated depreciation and amortization | 1,665,970 | 1,626,693 | |||||
3,293,269 | 3,233,921 | ||||||
Construction work in progress | 139,340 | 137,622 | |||||
Nuclear fuel, net of accumulated amortization of $29,993 and $26,247 | 79,906 | 72,901 | |||||
Net utility plant | 3,512,515 | 3,444,444 | |||||
Deferred Charges and Other Assets: | |||||||
Regulatory assets | 449,639 | 502,467 | |||||
Goodwill | 321,310 | 321,310 | |||||
Other intangible assets, net of accumulated amortization of $5,511 and $5,414 | 26,329 | 26,425 | |||||
Commodity derivative instruments | 7,754 | 5,264 | |||||
Other deferred charges | 100,808 | 94,376 | |||||
Total deferred charges and other assets | 905,840 | 949,842 | |||||
$ | 5,272,673 | $ | 5,225,083 | ||||
PNM RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2011 | December 31, 2010 | ||||||
(In thousands, except share information) | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Short-term debt | $ | 304,000 | $ | 222,000 | |||
Current installments of long-term debt | 2,252 | 2,252 | |||||
Accounts payable | 111,460 | 95,969 | |||||
Accrued interest and taxes | 45,852 | 47,783 | |||||
Regulatory liabilities | 919 | 724 | |||||
Commodity derivative instruments | 27,285 | 31,407 | |||||
Dividends declared | 132 | 11,565 | |||||
Other current liabilities | 97,547 | 108,424 | |||||
Total current liabilities | 589,447 | 520,124 | |||||
Long-term Debt | 1,563,916 | 1,563,595 | |||||
Deferred Credits and Other Liabilities: | |||||||
Accumulated deferred income taxes | 532,107 | 540,106 | |||||
Accumulated deferred investment tax credits | 16,930 | 18,089 | |||||
Regulatory liabilities | 356,807 | 342,465 | |||||
Asset retirement obligations | 75,483 | 76,637 | |||||
Accrued pension liability and postretirement benefit cost | 250,671 | 270,172 | |||||
Commodity derivative instruments | 13,770 | 12,831 | |||||
Other deferred credits | 149,610 | 147,616 | |||||
Total deferred credits and other liabilities | 1,395,378 | 1,407,916 | |||||
Total liabilities | 3,548,741 | 3,491,635 | |||||
Commitments and Contingencies (See Note 9) | |||||||
Cumulative Preferred Stock of Subsidiary | |||||||
without mandatory redemption requirements ($100 stated value, 10,000,000 shares authorized: issued and outstanding 115,293 shares) | 11,529 | 11,529 | |||||
Equity: | |||||||
PNMR Convertible Preferred Stock, Series A without mandatory redemption requirements (no stated value, 10,000,000 shares authorized: issued and outstanding 477,800 shares) | 100,000 | 100,000 | |||||
PNMR common stockholders’ equity: | |||||||
Common stock outstanding (no par value, 120,000,000 shares authorized: issued and outstanding 86,673,174 shares) | 1,290,969 | 1,290,465 | |||||
Accumulated other comprehensive income (loss), net of income taxes | (70,691 | ) | (68,666 | ) | |||
Retained earnings | 307,528 | 314,943 | |||||
Total PNMR common stockholders’ equity | 1,527,806 | 1,536,742 | |||||
Non-controlling interest in Valencia | 84,597 | 85,177 | |||||
Total equity | 1,712,403 | 1,721,919 | |||||
$ | 5,272,673 | $ | 5,225,083 | ||||
PNM RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||
2011 | 2010 | ||||||
(In thousands) | |||||||
Cash Flows From Operating Activities: | |||||||
Net earnings | $ | 10,931 | $ | 21,089 | |||
Adjustments to reconcile net earnings to net cash flows from operating activities: | |||||||
Depreciation and amortization | 97,404 | 89,608 | |||||
PVNGS firm-sales contract revenue | (2,558 | ) | (28,856 | ) | |||
Bad debt expense | 11,732 | 13,035 | |||||
Deferred income tax expense | 7,055 | 15,649 | |||||
Equity in net (earnings) loss of Optim Energy | — | 8,210 | |||||
Net unrealized (gains) losses on derivatives | (6,996 | ) | 24,752 | ||||
Realized (gains) on investments held by NDT | (11,797 | ) | (400 | ) | |||
Stock based compensation expense | 2,867 | 1,962 | |||||
Regulatory disallowances | 49,028 | — | |||||
Other, net | 2,115 | 2,288 | |||||
Changes in certain assets and liabilities: | |||||||
Accounts receivable and unbilled revenues | (44,371 | ) | (23,643 | ) | |||
Materials, supplies, and fuel stock | 1,109 | (1,615 | ) | ||||
Other current assets | 1,679 | (34,909 | ) | ||||
Other assets | (257 | ) | (5,739 | ) | |||
Accounts payable | 6,101 | (476 | ) | ||||
Accrued interest and taxes | (6,798 | ) | 55,024 | ||||
Other current liabilities | (10,532 | ) | (44,694 | ) | |||
Other liabilities | (21,972 | ) | (15,083 | ) | |||
Net cash flows from operating activities | 84,740 | 76,202 | |||||
Cash Flows From Investing Activities: | |||||||
Additions to utility and non-utility plant | (153,168 | ) | (136,296 | ) | |||
Proceeds from sales of investments held by NDT | 94,890 | 36,285 | |||||
Purchases of investments held by NDT | (96,410 | ) | (37,850 | ) | |||
Return of principal on PVNGS lessor notes | 15,374 | 14,216 | |||||
Investments in Optim Energy | — | (16,407 | ) | ||||
Other, net | 760 | 1,416 | |||||
Net cash flows from investing activities | (138,554 | ) | (138,636 | ) | |||
PNM RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||
2011 | 2010 | ||||||
(In thousands) | |||||||
Cash Flows From Financing Activities: | |||||||
Short-term borrowings (repayments), net | 82,000 | 87,000 | |||||
Long-term borrowings | — | 403,845 | |||||
Repayment of long-term debt | — | (403,845 | ) | ||||
Proceeds from stock option exercise | 2,172 | 778 | |||||
Purchases to satisfy awards of common stock | (4,535 | ) | (2,269 | ) | |||
Excess tax (shortfall) from stock-based payment arrangements | — | (114 | ) | ||||
Dividends paid | (23,127 | ) | (23,127 | ) | |||
Equity transactions with Valencia’s owner | (7,232 | ) | (7,019 | ) | |||
Payments received on PVNGS firm-sales contracts | 2,558 | 15,233 | |||||
Proceeds from transmission interconnection agreements | 589 | — | |||||
Debt issuance costs and other | 8 | (3,592 | ) | ||||
Net cash flows from financing activities | 52,433 | 66,890 | |||||
Change in Cash and Cash Equivalents | (1,381 | ) | 4,456 | ||||
Cash and Cash Equivalents at Beginning of Period | 15,404 | 14,641 | |||||
Cash and Cash Equivalents at End of Period | $ | 14,023 | $ | 19,097 | |||
Supplemental Cash Flow Disclosures: | |||||||
Interest paid, net of capitalized interest | $ | 57,930 | $ | 61,188 | |||
Income taxes paid (refunded), net | $ | (1,775 | ) | $ | (63,408 | ) | |
The following table shows PNM Electric operating revenues by customer class, including intersegment revenues and average number of customers:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
(In millions, except customers) | |||||||||||||||||||||||
Residential | $ | 78.5 | $ | 79.2 | $ | (0.7 | ) | $ | 166.7 | $ | 163.6 | $ | 3.1 | ||||||||||
Commercial | 95.1 | 91.7 | 3.4 | 172.0 | 164.6 | 7.4 | |||||||||||||||||
Industrial | 22.6 | 20.7 | 1.9 | 43.3 | 41.0 | 2.3 | |||||||||||||||||
Public authority | 5.6 | 5.0 | 0.6 | 10.4 | 9.4 | 1.0 | |||||||||||||||||
Other retail | 2.4 | 3.0 | (0.6 | ) | 4.5 | 4.9 | (0.4 | ) | |||||||||||||||
Transmission | 10.9 | 9.1 | 1.8 | 21.0 | 18.9 | 2.1 | |||||||||||||||||
Firm requirements wholesale | 7.4 | 6.9 | 0.5 | 17.0 | 15.1 | 1.9 | |||||||||||||||||
Other sales for resale | 17.2 | 28.6 | (11.4 | ) | 37.8 | 59.2 | (21.4 | ) | |||||||||||||||
Mark-to-market activity | (0.5 | ) | (1.1 | ) | 0.6 | 0.8 | (3.1 | ) | 3.9 | ||||||||||||||
$ | 239.2 | $ | 243.1 | $ | (3.8 | ) | $ | 473.5 | $ | 473.6 | $ | (0.1 | ) | ||||||||||
Average retail customers (thousands) | 503.7 | 501.3 | 2.4 | 503.7 | 501.1 | 2.6 | |||||||||||||||||
The following table shows PNM Electric GWh sales by customer class:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||
(Gigawatt hours) | |||||||||||||||||
Residential | 729.4 | 744.3 | (14.9 | ) | 1,581.3 | 1,602.8 | (21.5 | ) | |||||||||
Commercial | 1,038.4 | 1,024.6 | 13.8 | 1,930.3 | 1,905.8 | 24.5 | |||||||||||
Industrial | 397.1 | 363.9 | 33.2 | 758.4 | 713.7 | 44.7 | |||||||||||
Public authority | 72.5 | 63.6 | 8.9 | 130.0 | 117.8 | 12.2 | |||||||||||
Firm requirements wholesale | 143.0 | 163.1 | (20.1 | ) | 326.3 | 340.3 | (14.0 | ) | |||||||||
Other sales for resale | 518.7 | 544.2 | (25.5 | ) | 1,129.4 | 1,085.4 | 44.0 | ||||||||||
2,899.1 | 2,903.7 | (4.6 | ) | 5,855.7 | 5,765.8 | 89.9 | |||||||||||
The following table shows TNMP Electric operating revenues by retail tariff consumer class, including intersegment revenues, and average number of consumers:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
(In millions, except consumers) | |||||||||||||||||||||||
Residential | $ | 23.8 | $ | 20.1 | $ | 3.7 | $ | 43.3 | $ | 39.0 | $ | 4.3 | |||||||||||
Commercial | 20.9 | 19.7 | 1.2 | 40.3 | 37.2 | 3.1 | |||||||||||||||||
Industrial | 3.0 | 3.1 | (0.1 | ) | 6.2 | 6.0 | 0.2 | ||||||||||||||||
Other | 12.3 | 9.7 | 2.6 | 24.0 | 18.5 | 5.5 | |||||||||||||||||
$ | 60.0 | $ | 52.6 | $ | 7.4 | $ | 113.8 | $ | 100.7 | $ | 13.1 | ||||||||||||
Average consumers (thousands) (1) | 231.3 | 229.4 | 1.9 | 230.9 | 229.0 | 1.9 | |||||||||||||||||
(1) | TNMP provides transmission and distribution services to REPs that provide electric service to consumers in TNMP's service territories. The number of consumers above represents the customers of these REPs. Under TECA, consumers in Texas have the ability to choose First Choice or any other REP to provide energy. The average consumers reported above include 67,268 and 76,768 consumers for the three months ended June 30, 2011 and 2010, and 68,187 and 77,981 for the six months ended June 30, 2011 and 2010, who have chosen First Choice as their REP. These consumers are also included as customers in the First Choice segment. |
The following table shows TNMP Electric GWh sales by retail tariff consumer class:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||
(Gigawatt hours(1)) | |||||||||||||||||
Residential | 722.0 | 643.7 | 78.3 | 1,304.3 | 1,255.2 | 49.1 | |||||||||||
Commercial | 615.4 | 588.5 | 26.9 | 1,122.0 | 1,064.9 | 57.1 | |||||||||||
Industrial | 635.4 | 577.0 | 58.4 | 1,255.9 | 1,093.8 | 162.1 | |||||||||||
Other | 28.3 | 25.8 | 2.5 | 53.9 | 50.6 | 3.3 | |||||||||||
2,001.1 | 1,835.0 | 166.1 | 3,736.1 | 3,464.5 | 271.6 | ||||||||||||
(1) | The GWh sales reported above include 241.6 and 246.9 GWhs for the three months ended June 30, 2011 and 2010, and 451.2 and 496.4 GWhs for the six months ended June 30, 2011 and 2010 used by consumers, who have chosen First Choice as their REP. These GWhs are also included below in the First Choice segment. |
The following table shows First Choice operating revenues by customer class, including intersegment revenues, and actual number of customers:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
(In millions, except customers) | |||||||||||||||||||||||
Residential | $ | 74.1 | $ | 75.3 | $ | (1.2 | ) | $ | 137.7 | $ | 150.0 | $ | (12.3 | ) | |||||||||
Commercial | 48.6 | 40.8 | 7.8 | 89.7 | 76.4 | 13.3 | |||||||||||||||||
Other | 3.3 | 3.8 | (0.5 | ) | 7.1 | 7.9 | (0.8 | ) | |||||||||||||||
$ | 126.0 | $ | 119.9 | $ | 6.1 | $ | 234.5 | $ | 234.3 | $ | 0.2 | ||||||||||||
Actual customers (thousands) (1,2) | 216.6 | 216.1 | 0.5 | 216.6 | 216.1 | 0.5 | |||||||||||||||||
(1) | See note above in the TNMP Electric segment discussion about the impact of TECA. |
(2) | Due to the competitive nature of First Choice’s business, actual customer counts are presented in the table above as a more representative business indicator than the average consumers that are shown in the table for TNMP. |
The following table shows First Choice GWh electric sales by customer class:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||
(Gigawatt hours) (1) | |||||||||||||||||
Residential | 570.1 | 549.3 | 20.8 | 1,058.7 | 1,099.4 | (40.7 | ) | ||||||||||
Commercial | 459.1 | 347.5 | 111.6 | 828.3 | 627.3 | 201.0 | |||||||||||
1,029.2 | 896.8 | 132.4 | 1,887.0 | 1,726.7 | 160.3 | ||||||||||||
(1) | See note above in the TNMP Electric segment discussion about the impact of TECA. |