EX-99.1 2 exh99-1pnmr.htm EXHIBIT 99.1 exh99-1pnmr.htm
Exhibit 99.1
 

For Immediate Release
Feb. 6, 2009


PNM Resources Announces 2008 Earnings Results
Focus remains on key initiatives to restore long-term value
First Choice Power performance below expectations
 
 
 
2008 FOURTH-QUARTER SUMMARY
 
·  
Quarterly GAAP (generally accepted accounting principles) losses of $0.36 per diluted share, compared with earnings of $0.21 per diluted share in 2007
 
·  
Ongoing losses of $0.12 per diluted share, compared with earnings of $0.08 per diluted share in 2007
 
 
2008 YEAR-END SUMMARY
 
·  
2008 GAAP losses of $2.75 per diluted share, compared with earnings of $0.96 per diluted share in 2007
 
·  
Ongoing earnings of $0.12 per diluted share, compared with $1.11 diluted EPS in 2007
 

(ALBUQUERQUE, N.M.) – PNM Resources (NYSE: PNM) today reported unaudited 2008 consolidated GAAP losses of $229.7 million, or $2.75 per diluted share, compared with earnings of $74.9 million, or $0.96 per diluted share, in 2007. Unaudited, consolidated 2008 ongoing earnings were $9.9 million, or $0.12 per diluted share, compared with earnings of $86.7 million, or $1.11 per diluted share in 2007. Reconciliations of GAAP to non-GAAP measures are shown in the attached schedules 1-8.

“2008 was the beginning of a transitional period during which we implemented a series of key initiatives designed to restore long-term value for our shareholders,” said Jeff Sterba, PNM Resources chairman and CEO. “While our financial results do not show improvement year-over-year, we have begun to build a new foundation necessary to provide sustainable returns in the future. We made significant strides on key regulatory issues that will impact the PNM utility for years to come.

“A week ago PNM closed the sale of its gas operations and those proceeds will be used to reduce debt and strengthen our company. And, we will continue to execute our four-pronged strategy of focusing on the core electric businesses, obtaining appropriate regulatory treatment, simplifying the PNM electric business and managing costs.”

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PNM Resources Reports 2008 Earnings                                                                                                2-6-09               p. 2 of 6

“In early 2008, we provided our shareholders with a checklist of objectives for the year. We achieved all but one of these, which dealt with First Choice Power’s financial performance,” Sterba said. “In our November earnings call we expressed continuing concern on increasing First Choice Power bad debt expense given the market’s price volatility and the various market rules. Unfortunately, year-end results reflect the continuance of this concern. We are taking more aggressive steps to address this performance shortfall.”
 
YEAR-TO-DATE PERFORMANCE SUMMARY
 
2008 GAAP losses include various non-recurring charges that significantly affected results. Non-cash charges related to impairments of intangible assets were taken in the second and third quarters totaling $147.9 million. In addition, GAAP losses recorded in the fourth quarter reflect a $25.0 million after-tax impairment charge on intangible assets, exclusive of goodwill, for First Choice Power. Because of the complexity of the calculations required in the second step of the impairment analysis, the company is in the process of determining whether additional impairment charges related to goodwill at First Choice Power will be recorded. The impairment charges will be finalized when the company files its 2008 Form 10-K with the Securities and Exchange Commission.

For the year, PNM Electric had an after-tax write-off of $18.3 million related to regulatory disallowances resulting from its rate case filed in 2007. Optim Energy, formerly known as EnergyCo, had a write-off related to its inventory balance of emission allowances under the Clean Air Interstate Rule, which was invalidated by a federal appeals court in July. PNM Resources’ share of Optim Energy’s write-off was $9.6 million.

Consolidated ongoing earnings reflect First Choice Power’s 2008 losses of $22.1 million compared with earnings of $29.1 million in 2007. For the year, First Choice Power’s bad debt expense increased to $49.2 million in 2008 from $15.1 million in 2007. The increase in bad debt expense is a result of a higher number of customer departures, average higher bill amounts and an increase in default rates.  Higher call volumes and aggressive marketing campaigns designed to switch month-to-month customers to long-term contracts increased First Choice Power’s annual customer-service and marketing costs to $42.5 million from $31.5 million.

Year-end earnings also reflect weak PNM Electric performance prior to the May implementation of new base rates and the fuel and purchase power adjustment clause one month later.
 
FOURTH QUARTER PERFORMANCE SUMMARY
 
PNM Resources unaudited consolidated quarterly GAAP losses were $32.1 million, or $0.36 per diluted share, compared with earnings of $16.6 million, or $0.21 per diluted share, in 2007. Unaudited, consolidated 2008 ongoing losses were $10.8 million, or $0.12 per diluted share, compared with earnings of $6.6 million, or $0.08 per diluted share, in 2007.

Reduced consolidated earnings were driven by First Choice Power, which sustained significantly higher bad debt expense, marketing costs and customer-service expenses compared with the same period in 2007. First Choice Power bad debt expense for the quarter increased to $26.4 million in 2008 from $3.3 million in 2007.
 
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PNM Resources Reports 2008 Earnings                                                                                                2-6-09               p. 3 of 6
 
YEAR-END SEGMENT REPORTING OF EARNINGS
 
Regulated Operations
 
 
PNM Electric – a vertically integrated electric utility in New Mexico with distribution, transmission and generation assets.
 
·  
For the year, PNM Electric reported ongoing earnings of $15.7 million, or $0.19 per diluted share, compared with 2007 earnings of $35.9 million, or $0.46 per diluted share. GAAP losses were $67.0 million, or $0.82 per diluted share, compared with earnings of $22.9 million, or $0.29 per diluted share, in 2007.
 
·  
Costs incurred early in the year related to power plant availability and higher coal prices negatively affected results. The benefit of higher base rates partially offset the absence of sales of SO2 credits and realized losses related to assets held in the Nuclear Decommissioning Trust.
 
·  
GAAP losses include after-tax, non-cash charges related to impairment of intangible assets of $51.1 million and a write-off of $18.3 million related to regulatory disallowances.
 
TNMP – a transmission and distribution company in Texas.
 
·  
For the year, TNMP reported ongoing earnings of $23.2 million, or $0.28 per diluted share, compared with $18.9 million, or $0.24 per diluted share, in 2007. GAAP losses were $8.8 million, or $0.11 per diluted share, compared with 2007 earnings of $18.4 million, or $0.23 per diluted share.
 
·  
Customer growth and higher usage, combined with reduced debt expense, improved ongoing earnings year-over-year.
 
·  
GAAP losses include after-tax, non-cash charges related to impairment of intangible assets of $34.5 million.
 
Unregulated Operations
 
First Choice Power – a competitive retail electric provider in the Electric Reliability Council of Texas.
 
·  
For the year, First Choice Power reported negative ongoing EBITDA of $26.8 million, compared with 2007 ongoing EBITDA of $47.8 million.
 
·  
First Choice Power reported 2008 ongoing losses of $22.1 million, or $0.26 per diluted share, compared with 2007 earnings of $29.1 million, or $0.37 per diluted share. GAAP losses were $136.6 million, or $1.64 per diluted share, compared with 2007 earnings of $27.2 million, or $0.35 per diluted share.
 
·  
Ongoing losses mainly are associated with $49.2 million of bad debt expense, increasing from $15.1 million in 2007, and higher marketing and customer service costs that increased to $42.5 million from $31.5 million in 2007.
 
·  
Average retail margins decreased to approximately $18 per megawatt-hour from approximately $24 per megawatt-hour in 2007.
 
·  
GAAP losses include after-tax, non-cash charges related to impairment of intangible assets of $80.3 million.
 
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PNM Resources Reports 2008 Earnings                                                                                                2-6-09               p. 4 of 6
 
Optim Energy – formerly known as EnergyCo, Optim Energy is jointly owned by PNM Resources and a subsidiary of Cascade Investment, L.L.C. Optim Energy owns two generating assets – the coal-fired Twin Oaks Power facility and the natural gas-fired Altura Cogen facility – and is one of two developers of a fourth unit at the Cedar Bayou Generating Station.
 
 
·  
For the year, PNM Resources' share of Optim Energy's ongoing EBITDA was $24.5 million, compared with $4.6 million in 2007.
 
·  
For the year, PNM Resources' after-tax equity in ongoing net losses of Optim Energy was $2.5 million, or $0.03 per diluted share, compared with net earnings of $4.3 million, or $0.06 per diluted share, in 2007. PNM Resources' after-tax equity in GAAP net losses of Optim Energy was $17.9 million, or $0.21 per diluted share, compared with net earnings of $4.6 million, or $0.06 per diluted share, in 2007.
 
·  
For the year, Twin Oaks had an equivalent availability factor of 98.1 percent, compared with 89.8 percent in 2007, and Altura Cogen produced an availability factor of 91.9 percent, compared with 94.4 percent in 2007.
 
·  
PNM Resources’ share of GAAP losses includes after-tax, non-cash charges related to impairment of intangible assets of $7.0 million and a write-off of $9.6 million related to emission allowances.
 
Corporate/Other – a business segment that reflects costs at the PNM Resources holding company, comprised mainly of interest expense related to certain short- and long-term debt and hybrid securities.
 
 
·  
Corporate/Other reported 2008 ongoing losses of $26.4 million, or $0.32 per diluted share, compared with 2007 losses of $25.2 million, or $0.32 per diluted share. GAAP losses were $34.0 million, or $0.39 per diluted share, compared with 2007 losses of $18.9 million or $0.23 per diluted share.
 
·  
Savings from lower short-term interest rates and borrowings were more than offset by the higher interest rates associated with remarketed and additional long-term debt and higher short-term bank fees associated with credit downgrades.
 
Discontinued Operations
 
 
PNM Gas – a natural gas utility with distribution and transmission assets. As previously announced, PNM completed the sale of the gas operations on Jan. 30.
 
·  
PNM Gas reported 2008 ongoing earnings of $21.9 million, or $0.26 per diluted share, compared with 2007 earnings of $16.4 million, or $0.21 per diluted share. GAAP earnings were $34.6 million, or $0.42 per diluted share, compared with 2007 earnings of $15.5 million, or $0.20 per diluted share.
 
·  
Lower operational costs and a full-year impact of higher natural gas delivery fees improved earnings.
 
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PNM Resources Reports 2008 Earnings                                                                                                2-6-09               p. 5 of 6
 
2008 FOURTH QUARTER AND YEAR-END EARNINGS CALL:  TODAY – 9 AM Eastern
 
PNM Resources will discuss fourth-quarter and year-end earnings results during a live conference call and Web cast today, Feb. 6, at 9 a.m. Eastern. Management also will discuss the earnings outlook for 2009.

Speaking on the call will be Jeff Sterba, PNM Resources chairman and CEO; Pat Vincent-Collawn, president and chief operating officer; and Chuck Eldred, executive vice president and CFO.

Investors, analysts and other participants can listen to the live conference call by dialing 877-741-4248 (toll free) or 719-325-4800 (toll) and referencing “the PNM Resources earnings call.” A telephone replay will be available at noon Eastern until midnight Feb. 13 by dialing 888-203-1112 (toll free) or 719-457-0820 and using confirmation code 4812506. A live Web cast of the call will be available at http://www.pnmresources.com/investors/events.cfm.

 
Background:
 
PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2008 consolidated operating revenues from continuing and discontinued operations of $2.5 billion. Through its utility and energy subsidiaries, PNM Resources has more than 2,700 megawatts of generation resources and serves electricity to more than 859,000 homes and businesses in New Mexico and Texas. The company also has a 50-percent ownership of Optim Energy, formerly known as EnergyCo, which owns approximately 920 megawatts of generation. 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 PNMR’s, PNM’s, or TNMP’s (collectively, the “Companies”) 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 the Companies assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, the Companies caution readers not to place undue reliance on these statements. The Companies’ 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 Companies’ ability to access the financial markets, or Optim Energy’s access to additional debt financing following the utilization of its existing credit facility, including actions by ratings agencies affecting the Companies’ credit ratings; the recession and its consequent extreme disruption in the credit markets; state and federal regulatory and legislative decisions and actions, including the PNM and TNMP electric rate cases filed in 2008; the performance of generating units, including the Palo Verde Nuclear Generating Station, the San Juan Generating Station, the Four Corners Plant and Optim Energy generating units, and transmission systems; the risk that Optim Energy is unable to identify and implement profitable acquisitions, including development of the Cedar Bayou Generating Station Unit 4, or that PNMR and ECJV will not agree to make additional capital contributions to Optim Energy; the potential unavailability of cash from PNMR’s subsidiaries or Optim Energy due to regulatory, statutory or contractual restrictions; the impacts of the decline 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 outcome of any appeals of the PUCT order in the stranded cost true-up proceeding; the ability of First Choice Power to attract and retain customers; changes in ERCOT protocols; changes in the cost of power acquired by First Choice Power; the completion of the impairment analysis related to goodwill at First Choice Power; collections experience; insurance coverage available for claims made in litigation; fluctuations in interest rates; weather; water supply; changes in fuel costs; the risk that PNM Electric may incur fuel and purchased power costs that exceed the cap allowed under its Emergency Fuel and Purchase Power Adjustment Clause; 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; 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 and natural gas industries; the ability to secure long-term power sales; the risk that the Companies and Optim Energy may have to commit to substantial capital investments and additional operating costs to comply with new environmental control requirements, including possible future requirements to address concerns about global climate change; the risks associated with completion of generation, including the Cedar Bayou Generating Station Unit 4,  transmission, distribution and other projects, including construction delays and unanticipated cost overruns; the outcome of legal proceedings, including pending appeal of PNM’s electric rate case and the Emergency FPPAC; changes in applicable accounting principles; and the performance of state, regional, and national economies.

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PNM Resources Reports 2008 Earnings                                                                                                2-6-09               p. 6 of 6



Non-GAAP Financial Measures
PNM Resources (“the Company”) uses ongoing earnings, ongoing earnings per diluted share (or ongoing diluted earnings per share), EBITDA 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.



CONTACTS:
Analysts                                                                Analysts & Media
Gina Jacobi, (505) 241-2211                                 Frederick Bermudez, (505) 241-4831


(END)

                                          
 
 
 

PNM Resources
Schedule 1
2008 Reconciliation of Ongoing to GAAP Earnings
(Preliminary and Unaudited)

 
   
Three Months Ended December 31, 2008
    
   
(in thousands)
    
   
 
   Utilities  
First Choice
Optim Energy
(50%)
Corp/
Other
PNMR
   
PNM Electric
TNMP Electric
   PNM Gas
 
        
Ongoing Earnings (Loss)
  
 $    (3,699)
 $    5,581
 $   6,952
 $    (8,248)
 $   (5,508)
 $    (5,872)
  
 $    (10,794)
                   
Non-Recurring Items
                  
Acquisition/Divestiture
  
          (686)
            -
           (4)
              -
             -
          (748)
  
       (1,438)
Business improvement plan
  
          (358)
            62
       (169)
              -
             -
       (2,092)
  
       (2,557)
Economic mark-to-market hedges
  
          (455)
            -
         (72)
       (1,690)
        5,148
              -
  
         2,931
Depreciation on gas assets
  
               -
            -
      3,299
              -
             -
              -
  
         3,299
Impairment of intangible assets
  
               -
            -
            -
     (24,953)
             -
              -
  
     (24,953)
Speculative trading
  
               -
            -
            -
          (680)
               0
              -
  
          (680)
Texas deferred tax adjustments
  
               -
       2,494
            -
              -
             -
        3,000
  
         5,494
Unrealized impairments of NDT securities
  
       (3,356)
            -
            -
              -
             -
              -
  
       (3,356)
Total Non-Recurring Items
  
       (4,855)
       2,556
      3,054
     (27,323)
        5,148
           160
  
     (21,260)
                   
                   
GAAP Earnings (Loss) from Continuing Operations
  
       (8,554)
       8,137
  
     (35,571)
         (360)
       (5,712)
  
     (42,060)
GAAP Earnings (Loss) from Discontinued Operations
 
  
    10,006
        
       10,006
GAAP Net Earnings (Loss)
  
 $    (8,554)
 $    8,137
 $ 10,006
 $  (35,571)
 $      (360)
 $    (5,712)
  
 $  (32,054)
                   
                   
               
 
Twelve Months Ended December 31, 2008
    
   
(in thousands)
    
      Utilities  
First Choice
Optim Energy
(50%)
Corp/
Other
PNMR
   
PNM Electric
TNMP Electric
 PNM Gas
 
        
Ongoing Earnings (Loss)
  
 $    15,684
 $  23,224
 $ 21,944
 $  (22,110)
 $   (2,531)
 $  (26,359)
  
 $    9,852
                   
Non-Recurring Items
                  
Acquisition/Divestiture
  
       (2,170)
            -
         (13)
              -
             -
       (4,096)
  
       (6,279)
Afton writedown
  
       (1,199)
            -
            -
              -
             -
              -
  
       (1,199)
Business improvement plan
  
          (165)
          (84)
       (312)
              -
             -
       (6,526)
  
       (7,087)
Depreciation on gas assets
  
               -
            -
    13,004
              -
             -
              -
  
       13,004
Economic mark-to-market hedges
  
       (3,471)
            -
           (1)
       (2,136)
        1,901
              -
  
       (3,707)
FIN 48 interest
  
       (1,922)
            29
             6
              66
             -
             12
  
       (1,809)
Gain on sale of merchant portfolio
  
         3,083
            -
            -
              -
             -
              -
  
         3,083
Impairment of intangible assets
  
     (51,143)
   (34,456)
            -
     (80,280)
      (6,978)
              -
  
   (172,857)
Regulatory disallowances
  
     (18,273)
            -
            -
              -
             -
              -
  
     (18,273)
Speculative trading
  
               -
            -
            -
     (32,131)
         (739)
              -
  
     (32,870)
Texas deferred tax adjustments
  
               -
       2,494
            -
              -
             -
        3,000
  
         5,494
Unrealized impairments of NDT securities
  
       (7,426)
            -
            -
                -
               -
              -
  
       (7,426)
Write-off of emissions allowances
  
               -
            -
            -
              -
      (9,587)
              -
  
       (9,587)
Total Non-Recurring Items
  
     (82,686)
   (32,017)
    12,684
   (114,481)
    (15,403)
       (7,610)
  
   (239,513)
                   
                   
GAAP Earnings (Loss) from Continuing Operations
  
     (67,002)
     (8,793)
  
   (136,591)
    (17,934)
     (33,969)
  
   (264,289)
GAAP Earnings (Loss) from Discontinued Operations
  
    34,628
        
       34,628
GAAP Net Earnings (Loss)
  
 $  (67,002)
 $  (8,793)
 $ 34,628
 $(136,591)
 $ (17,934)
 $  (33,969)
  
 $(229,661)

Ongoing earnings include earnings from discontinued operations and exclude the impact of non-recurring items and net unrealized mark-to-market gains and losses on economic hedges. Ongoing earnings also exclude gains and losses from speculative trading activity and unrealized losses recorded as impairments of assets held in the Nuclear Decommissioning Trust.

                                                
 
 
 


PNM Resources
Schedule 2
2007 Reconciliation of Ongoing to GAAP Earnings
(Preliminary and Unaudited)


   
Three Months Ended December 31, 2007
    
   
(in thousands)
    
   
Utilities
  
Altura
First Choice
Optim Energy
(50%)
Corp/ Other
  
PNMR
   
PNM Electric
TNMP Electric
PNM Gas
            
Ongoing Earnings (Loss)
  
 $     (4,325)
 $   3,339
 $   6,969
 $          -
 $  9,915
 $    (2,782)
 $        (6,563)
  
 $   6,553
                     
Non-Recurring Items
                    
Business improvement plan
  
          1,910
        (331)
        (859)
           -
           -
               -
           (2,195)
  
    (1,475)
Economic mark-to-market hedges
  
          4,204
            -
        (158)
           -
       (149)
          (241)
                  -
  
      3,656
Favorable tax decisions
  
          4,708
            -
            -
           -
           -
               -
                  -
  
      4,708
Loss on contribution of Altura
  
               -
            -
            -
           -
           -
               -
              (380)
  
       (380)
JV formation costs
  
               -
            -
            -
           -
           -
               -
               840
  
         840
Sale of turbine
  
             804
            -
            -
           -
           -
               -
                  -
  
         804
Speculative trading
  
               -
            -
            -
           -
     2,426
            253
                  -
  
      2,679
Unrealized impairments of NDT securities
  
           (789)
            -
            -
           -
           -
               -
                  -
  
       (789)
Total Non-Recurring Items
  
        10,837
        (331)
     (1,017)
           -
     2,277
              12
           (1,735)
  
    10,043
                     
                     
GAAP Earnings (Loss) from Continuing Operations
  
          6,512
      3,008
  
           -
   12,192
       (2,770)
           (8,298)
  
    10,644
GAAP Earnings (Loss) from Discontinued Operations
    
      5,952
          
      5,952
GAAP Net Earnings (Loss)
  
 $       6,512
 $   3,008
 $   5,952
 $          -
 $12,192
 $    (2,770)
 $        (8,298)
  
 $ 16,596
                     
                     
                     
   
Twelve Months Ended December 31, 2007
    
   
(in thousands)
    
   
 
   Utilities  
Altura
First Choice
Optim Energy
(50%)
Corp/
Other
  
PNMR
   
PNM Electric
TNMP Electric
PNM Gas
            
Ongoing Earnings (Loss)
  
 $     35,918
 $ 18,932
 $ 16,374
 $  7,259
 $29,134
 $      4,343
 $      (25,236)
  
 $ 86,724
                     
Non-Recurring Items
                    
Afton write-down
  
      (11,780)
            -
            -
           -
           -
               -
                  -
  
  (11,780)
Business improvement plan
  
        (2,277)
        (524)
        (859)
           -
           -
               -
           (5,417)
  
    (9,077)
Economic mark-to-market hedges
  
        (5,107)
            -
             1
           -
        341
            (83)
                  -
  
    (4,848)
Favorable tax decision
  
          4,709
            -
            -
           -
           -
               -
          16,037
  
    20,746
JV formation costs
  
               -
            -
            -
           -
           -
               -
           (1,702)
  
    (1,702)
Loss on contribution of Altura
  
               -
            -
            -
           -
           -
               -
           (2,577)
  
    (2,577)
Sale of turbine
  
          2,482
            -
            -
           -
           -
               -
                  -
  
      2,482
Speculative trading
  
               -
            -
            -
           -
    (2,289)
            319
                  -
  
    (1,970)
Twin Oaks III impairment
  
               -
            -
            -
   (2,042)
           -
               -
                  -
  
    (2,042)
Unrealized impairments of NDT securities
  
        (1,082)
            -
            -
           -
           -
               -
                  -
  
    (1,082)
Total Non-Recurring Items
  
      (13,055)
        (524)
        (858)
   (2,042)
    (1,948)
            236
            6,341
  
  (11,850)
                     
                     
GAAP Earnings (Loss) from Continuing Operations
  
        22,863
    18,408
  
     5,217
   27,186
         4,579
         (18,895)
  
    59,358
GAAP Earnings (Loss) from Discontinued Operations
    
    15,516
          
    15,516
GAAP Net Earnings (Loss)
  
 $     22,863
 $ 18,408
 $ 15,516
 $  5,217
 $27,186
 $      4,579
 $      (18,895)
  
 $ 74,874

Ongoing earnings include earnings from discontinued operations and exclude the impact of non-recurring items and net unrealized mark-to-market gains and losses on economic hedges. Ongoing earnings also exclude gains and losses from speculative trading activity and unrealized losses recorded as impairments of assets held in the Nuclear Decommissioning Trust.

                                                  
 
 
 

PNM Resources
Schedule 3:
2008 Reconciliation of Ongoing to GAAP Earnings Per Share
(Preliminary and Unaudited)

 
     
Three Months Ended December 31, 2008
    
                     
       
Utilities
  
First Choice
Optim Energy
(50%)
Corp/
Other
PNMR
     
PNM Electric
TNMP Electric
  
PNM Gas
 
        
Ongoing Earnings (Loss)
    
 $  (0.04)
 $   0.06
 $    0.08
 $  (0.09)
 $     (0.06)
 $    (0.07)
  
 $(0.12)
                     
Non-Recurring Items
                    
Acquisition/Divestiture
    
     (0.01)
          -
       0.00
          -
             -
       (0.01)
  
   (0.02)
Business improvement plan
    
       0.00
      0.00
       0.00
          -
             -
       (0.02)
  
   (0.02)
Economic mark-to-market hedges
    
     (0.01)
          -
       0.00
     (0.02)
         0.06
            -
  
     0.03
Depreciation on gas assets
    
          -
          -
       0.04
          -
             -
            -
  
     0.04
Impairment of intangible assets
    
          -
          -
          -
     (0.28)
             -
            -
  
   (0.28)
Speculative trading
    
          -
          -
          -
     (0.01)
         0.00
            -
  
   (0.01)
Texas deferred tax adjustments
    
          -
      0.03
          -
          -
             -
         0.03
  
     0.06
Unrealized impairments of NDT securities
    
     (0.04)
          -
          -
          -
             -
            -
  
   (0.04)
Total Non-Recurring Items
    
(0.06)
0.03
0.04
(0.31)
0.06
0.00
  
(0.24)
                     
                     
GAAP Earnings (Loss) from Continuing Operations
  
(0.10)
0.09
  
(0.40)
0.00
(0.07)
  
(0.48)
GAAP Earnings (Loss) from Discontinued Operations
      
0.12
        
0.12
GAAP Net Earnings (Loss)
    
 $  (0.10)
 $   0.09
 $    0.12
 $  (0.40)
 $      0.00
 $    (0.07)
  
 $(0.36)
Average Shares Outstanding (Basic and Diluted):
88,823,719
                  
                     
                     
     
Twelve Months Ended December 31, 2008
    
                     
     
 
  
Utilities
  
First Choice
Optim Energy
(50%)
Corp/ Other
PNMR
     
PNM Electric
TNMP Electric
  
PNM Gas
        
Ongoing Earnings (Loss)
    
 $    0.19
 $   0.28
 $    0.26
 $  (0.26)
 $     (0.03)
 $    (0.32)
  
 $  0.12
                     
Non-Recurring Items
                    
Acquisition/Divestiture
    
     (0.03)
          -
       0.00
          -
             -
       (0.04)
  
   (0.07)
Afton writedown
    
     (0.02)
          -
          -
          -
             -
            -
  
   (0.02)
Business improvement plan
    
       0.00
      0.00
       0.00
          -
             -
       (0.07)
  
   (0.07)
Depreciation on gas assets
    
          -
          -
       0.16
          -
             -
            -
  
     0.16
Economic mark-to-market hedges
    
     (0.04)
          -
       0.00
     (0.03)
         0.02
            -
  
   (0.05)
FIN 48 interest
    
     (0.03)
      0.00
       0.00
       0.00
             -
         0.00
  
   (0.03)
Gain on sale of merchant portfolio
    
       0.03
          -
          -
          -
             -
            -
  
     0.03
Impairment of intangible assets
    
     (0.61)
    (0.42)
          -
     (0.96)
        (0.08)
            -
  
   (2.07)
Regulatory disallowances
    
     (0.22)
          -
          -
          -
             -
            -
  
   (0.22)
Speculative trading
    
          -
          -
          -
     (0.39)
        (0.01)
            -
  
   (0.40)
Texas deferred tax adjustments
    
          -
      0.03
          -
          -
             -
         0.04
  
     0.07
Unrealized impairments of NDT securities
    
     (0.09)
          -
          -
          -
             -
            -
  
   (0.09)
Write-off of emissions allowances
    
          -
          -
          -
          -
        (0.11)
            -
  
   (0.11)
Total Non-Recurring Items
    
(1.01)
(0.39)
0.16
(1.38)
(0.18)
(0.07)
  
(2.87)
                     
                     
GAAP Earnings (Loss) from Continuing Operations
  
(0.82)
(0.11)
  
(1.64)
(0.21)
(0.39)
  
(3.17)
GAAP Earnings (Loss) from Discontinued Operations
      
0.42
        
0.42
GAAP Net Earnings (Loss)
    
 $  (0.82)
 $ (0.11)
 $    0.42
 $  (1.64)
 $     (0.21)
 $    (0.39)
  
 $(2.75)
Average Shares Outstanding (Basic and Diluted):
83,467,701
                  

Ongoing earnings include earnings from discontinued operations and exclude the impact of non-recurring items and net unrealized mark-to-market gains and losses on economic hedges. Ongoing earnings also exclude gains and losses from speculative trading activity and unrealized losses recorded as impairments of assets held in the Nuclear Decommissioning Trust.

                      
 
 
 


PNM Resources
Schedule 4:
2007 Reconciliation of Ongoing to GAAP Earnings Per Share
(Preliminary and Unaudited)

 
     
Three Months Ended December 31, 2007
    
                       
       
Utilities
  
Altura
First Choice
Optim Energy
(50%)
Corp/
Other
PNMR
     
PNM Electric
TNMP Electric
  
PNM Gas
 
          
Ongoing Earnings (Loss)
    
 $       (0.06)
 $   0.04
 $  0.09
 $     -
 $   0.13
 $     (0.04)
 $ (0.08)
  
 $  0.08
                       
Non-Recurring Items
                      
Business improvement plan
    
           0.03
      0.00
    (0.01)
        -
          -
              -
    (0.03)
  
   (0.01)
Economic mark-to-market hedges
    
           0.05
          -
     0.00
        -
      0.00
          0.00
          -
  
     0.05
Favorable tax decisions
    
           0.06
          -
         -
        -
          -
              -
          -
  
     0.06
Loss on contribution of Altura
    
               -
          -
         -
        -
          -
              -
    (0.01)
  
   (0.01)
JV formation costs
    
               -
          -
         -
        -
          -
              -
      0.01
  
     0.01
Sale of turbine
    
           0.01
          -
         -
        -
          -
              -
          -
  
     0.01
Speculative trading
    
               -
          -
         -
        -
      0.03
          0.00
          -
  
     0.03
Unrealized impairments of NDT securities
  
          (0.01)
          -
         -
        -
          -
              -
          -
  
   (0.01)
Total Non-Recurring Items
    
0.14
0.00
(0.01)
        -
0.03
0.00
(0.03)
  
0.13
                       
                       
GAAP Earnings (Loss) from Continuing Operations
  
0.08
0.04
  
        -
0.16
(0.04)
(0.11)
  
0.13
GAAP Earnings (Loss) from Discontinued Operations
  
0.08
          
0.08
GAAP Net Earnings (Loss)
    
 $        0.08
 $   0.04
 $  0.08
 $     -
 $   0.16
 $     (0.04)
 $ (0.11)
  
 $  0.21
Average Diluted Shares Outstanding:
77,256,702
                    
                       
                       
     
Twelve Months Ended December 31, 2007
        
                       
     
 
  
Utilities
  
Altura
First Choice
Optim Energy
(50%)
Corp/
Other
PNMR
     
PNM Electric
TNMP Electric
   PNM Gas
 
          
Ongoing Earnings (Loss)
    
 $        0.46
 $   0.24
 $  0.21
 $ 0.09
 $   0.37
 $       0.06
 $ (0.32)
  
 $  1.11
                       
Non-Recurring Items
                      
Afton write-down
    
          (0.15)
          -
         -
        -
          -
              -
          -
  
   (0.15)
Business improvement plan
    
          (0.03)
     (0.01)
    (0.01)
        -
          -
              -
    (0.07)
  
   (0.12)
Economic mark-to-market hedges
    
          (0.07)
          -
              0.00
        -
      0.01
          0.00
          -
  
   (0.06)
Favorable tax decision
    
           0.06
          -
         -
        -
          -
              -
      0.21
  
     0.27
JV formation costs
    
               -
          -
         -
        -
          -
              -
    (0.02)
  
   (0.02)
Loss on contribution of Altura
    
               -
          -
         -
        -
          -
              -
    (0.03)
  
   (0.03)
Sale of turbine
    
           0.03
          -
         -
        -
          -
              -
          -
  
     0.03
Speculative trading
    
               -
          -
         -
        -
     (0.03)
          0.00
          -
  
   (0.03)
Twin Oaks III impairment
    
               -
          -
         -
  (0.03)
          -
              -
          -
  
   (0.03)
Unrealized impairments of NDT securities
  
          (0.01)
          -
         -
        -
          -
              -
          -
  
   (0.01)
Total Non-Recurring Items
    
         (0.17)
(0.01)
(0.01)
  (0.03)
(0.02)
0.00
0.09
  
(0.15)
                       
                       
GAAP Earnings (Loss) from Continuing Operations
  
0.29
0.23
  
0.06
0.35
0.06
(0.23)
  
0.76
GAAP Earnings (Loss) from Discontinued Operations
  
0.20
          
0.20
GAAP Net Earnings (Loss)
    
 $        0.29
 $   0.23
 $  0.20
 $ 0.06
 $   0.35
 $       0.06
 $ (0.23)
  
 $  0.96
Average Diluted Shares Outstanding:
77,927,851
                    

 
Ongoing earnings include earnings from discontinued operations and exclude the impact of non-recurring items and net unrealized mark-to-market gains and losses on economic hedges. Ongoing earnings also exclude gains and losses from speculative trading activity and unrealized losses recorded as impairments of assets held in the Nuclear Decommissioning Trust.

                                            
 
 
 

PNM Resources
Schedule 5:
Reconciliation of Optim Energy GAAP Net Income to Ongoing EBITDA
(Preliminary and Unaudited)


Calculation of Optim Energy Ongoing EBITDA
  
December 31, 2008
   
 Three Months Ended
  
Year Ended
   
(in millions)
         
GAAP Net Income (Loss)
  
 $                     (1.6)
  
 $                (60.5)
         
Interest expense
  
4.2
  
19.2
Income tax
  
0.1
  
(0.1)
Depreciation and amortization expense
  
7.7
  
30.6
Purchase accounting contract amortizations
  
6.6
  
8.9
Losses on forward mark on economic hedges
  
(17.1)
  
(6.3)
Speculative trading
  
0.0
  
2.4
Write-off of emissions allowances
  
0.0
  
31.7
Impairment of intangible assets
  
0.0
  
23.0
         
Ongoing Optim Energy EBITDA
  
(0.1)
  
48.9
         
50 percent of Ongoing EBITDA (PNMR share)
  
 $                       -
  
 $                 24.5



Calculation of Optim Energy Ongoing EBITDA
  
December 31, 2007
   
 Three Months Ended 
  
Year Ended
   
(in millions)
         
GAAP Net Income (Loss)
  
 $                   (10.7)
  
 $                 10.2
         
Interest expense
  
10.1
  
17.9
Income tax
  
0.0
  
0.4
Depreciation and amortization expense
  
8.3
  
15.7
Purchase accounting contract amortizations
  
(36.5)
  
(34.2)
Losses on forward mark on economic hedges
  
0.8
  
0.3
Speculative trading
  
(0.7)
  
(1.1)
         
Ongoing Optim Energy EBITDA
  
(28.7)
  
9.2
         
50 percent of Ongoing EBITDA (PNMR share)
  
 $                   (14.4)
  
 $                   4.6


                                       
 
 
 

PNM Resources
Schedule 6:
2008 Reconciliation of GAAP Net Earnings to Ongoing EBITDA by Segment
(Preliminary and Unaudited)
(in millions)

 
   
Three Months Ended December 31, 2008
     
PNM Electric
 
TNMP Electric
  
PNM Gas
    
First Choice
 
  
Corporate & Other
 
PNMR Consolidated
GAAP Net Earnings (Loss)
  
($8.6)
  
$8.1
  
$10.0
  
($35.6)
  
($6.0)
  
($32.1)
                         
Interest charges
  
17.8
  
4.8
  
3.3
  
1.5
  
9.8
  
37.2
Income taxes
  
(4.9)
  
0.5
  
6.7
  
(18.2)
  
(11.7)
  
(27.6)
Depreciation and amortization
  
21.5
  
11.7
  
0.0
  
0.7
  
4.3
  
38.2
                         
EBITDA
  
25.8
  
25.1
  
20.0
  
(51.6)
  
(3.6)
  
15.7
                         
Ongoing adjustments
  
7.1
  
(0.1)
  
0.4
  
42.0
  
(3.8)
  
45.6
                         
Ongoing EBITDA
  
$32.9
  
$25.0
  
$20.4
  
$(9.6)
  
($7.4)
  
$61.3
                         
                         
                         
   
Year Ended December 31, 2008
     
PNM Electric
 
TNMP Electric
  
PNM Gas
    
First Choice
 
 Corporate & Other
 
PNMR Consolidated
GAAP Net Earnings (Loss)
  
($67.0)
  
($8.8)
  
$34.6
  
($136.6)
  
($51.9)
  
($229.7)
                         
Interest charges
  
69.9
  
18.3
  
13.2
  
4.0
  
40.8
  
146.2
Income taxes
  
(10.0)
  
11.1
  
23.0
  
(46.6)
  
(44.4)
  
(66.9)
Depreciation and amortization
  
85.7
  
38.7
  
0.0
  
2.4
  
17.6
  
144.4
                         
EBITDA
  
78.6
  
59.3
  
70.8
  
(176.8)
  
(37.8)
  
(6.0)
                         
Ongoing adjustments
  
98.6
  
34.6
  
0.5
  
150.0
  
42.1
  
325.8
                         
Ongoing EBITDA
  
$177.2
  
$93.9
  
$71.3
  
$(26.8)
  
$4.3
  
$319.8

 
 
 
 

PNM Resources
Schedule 7:
2007 Reconciliation of GAAP Net Earnings to Ongoing EBITDA by Segment
(Preliminary and Unaudited)
(in millions)

 
   
Three Months Ended December 31, 2007
     
PNM Electric
 
TNMP Electric
  
PNM Gas
  
Altura
    
First Choice
 
 Corporate & Other
 
PNMR Consolidated
GAAP Net Earnings (Loss)
  
$6.5
  
$3.0
  
$6.0
  
$0.0
  
$12.2
  
($11.1)
  
$16.6
                             
Interest charges
  
13.8
  
5.5
  
2.5
  
0.0
  
(1.1)
  
8.7
  
29.4
Income taxes
  
1.8
  
2.8
  
3.9
  
0.0
  
5.8
  
(5.7)
  
8.6
Depreciation and amortization
  
21.0
  
9.3
  
5.3
  
0.0
  
0.5
  
4.4
  
40.5
                             
EBITDA
  
43.1
  
20.6
  
17.7
  
0.0
  
17.4
  
(3.7)
  
95.1
                             
Ongoing adjustments
  
(17.8)
  
0.5
  
1.6
  
0.0
  
(3.5)
  
1.7
  
(17.5)
                             
Ongoing EBITDA
  
$25.3
  
$21.1
  
$19.3
  
$0.0
  
$13.9
  
$(2.0)
  
$77.6
                             
                             
                             
   
Year Ended December 31, 2007
     
PNM Electric
 
TNMP Electric
  
PNM Gas
  
Altura
    
First Choice
 
  Corporate & Other
 
PNMR Consolidated
GAAP Net Earnings (Loss)
  
$22.9
  
$18.4
  
$15.5
  
$5.2
  
$27.2
  
($14.3)
  
$74.9
                             
Interest charges
  
52.7
  
25.2
  
12.2
  
8.5
  
0.8
  
33.0
  
132.4
Income taxes
  
11.2
  
10.6
  
10.4
  
3.4
  
14.9
  
(36.9)
  
13.6
Depreciation and amortization
  
83.2
  
30.4
  
21.6
  
7.7
  
1.9
  
12.5
  
157.3
                             
EBITDA
  
170.0
  
84.6
  
59.7
  
24.8
  
44.8
  
(5.7)
  
378.2
                             
Ongoing adjustments
  
22.2
  
0.8
  
1.5
  
3.4
  
3.0
  
14.4
  
45.3
                             
Ongoing EBITDA
  
$192.2
  
$85.4
  
$61.2
  
$28.2
  
$47.8
  
$8.7
  
$423.5

 
 
 
 

PNM Resources
Schedule 8:
Reconciliation of Ongoing (non-GAAP) Net Earnings (Loss) to GAAP Consolidated Statements of Earnings (Loss)
(Preliminary and Unaudited)
(in thousands, except per share data)

 
   
Year Ended December 31, 2008
  
Year Ended December 31, 2007
   
GAAP
  
Adjustments
  
Ongoing
  
GAAP
  
Adjustments
  
Ongoing
                             
Operating revenues
$   1,959,522
  
$        (7,497)
(a),(b),(c)
  
$   1,952,025
  
$    1,914,029
  
$          50,121
(a),(b)
  
$   1,876,326
Cost of energy
1,239,854
  
(61,299)
(a)
  
1,178,555
  
1,121,525
  
38,638
(a)
  
1,135,017
Gross margin
719,668
  
53,802
    
773,470
  
792,504
  
11,483
    
803,987
         
(d),(e),(f),
            
(d),(g),(n),
    
Operating expenses
763,203
  
(231,619)
(g),(h)
  
531,584
  
531,767
  
(38,249)
(o),(p),(q)
  
439,551
Depreciation and amortization
144,362
  
                     -
    
144,362
  
135,695
  
                     -
    
135,695
Operating income (loss)
(187,897)
  
285,421
    
97,524
  
125,042
  
49,732
    
174,774
Equity in net earnings of Optim Energy
(29,687)
  
25,497
(a),(b),(e),(j)
  
(4,190)
  
7,581
  
(391)
    
7,190
Net other income and deductions
(3,104)
  
15,533
(g),(k),(l)
  
12,430
  
50,644
  
(6,031)
(g),(k),(m)
  
32,305
Interest charges
132,955
  
(4,533)
(h)
  
128,422
  
120,155
  
                     -
    
120,155
Earnings (Loss) before Income Taxes
(353,643)
  
330,984
    
(22,659)
  
63,112
  
43,311
    
106,423
Income Taxes (Benefit)
(89,882)
  
78,787
(r),(s)
  
(11,095)
  
3,226
  
32,319
(m),(s)
  
35,545
Preferred Stock Dividend Requirements of Subsidiary
528
  
                     -
    
528
  
528
  
                     -
    
528
Earnings (Loss) from Continuing Operations
(264,289)
  
252,197
    
(12,092)
  
59,358
  
10,992
    
70,350
Earnings from Discontinued Operations, net
      
(a),(g),(h),
                  
of Income Taxes
34,628
  
(12,684)
(i),(l)
  
21,944
  
15,516
  
858
(a),(g)
  
16,374
Net Earnings (Loss)
$   (229,661)
  
$      239,514
    
$       9,853
  
$        74,874
  
$          11,850
    
$        86,724
                             
                             
Net Earnings (Loss) from Continuing Operations per Common Share:
                      
 
Basic
 $           (3.17)
  
 $            3.02
    
 $           (0.14)
  
 $            0.77
  
 $             0.14
    
 $            0.92
 
Diluted
 $           (3.17)
  
 $            3.02
    
 $           (0.14)
  
 $            0.76
  
 $             0.14
    
 $            0.90
                             
Net Earnings (Loss) per Common Share:
                          
 
Basic
 $           (2.75)
  
 $            2.87
    
 $             0.12
  
 $            0.98
  
 $             0.15
    
 $            1.13
 
Diluted
 $           (2.75)
  
 $            2.87
    
 $             0.12
  
 $            0.96
  
 $             0.15
    
 $            1.11
                             
Average common shares outstanding:
                          
 
Basic
83,468
            
76,719
          
 
Diluted
83,468
            
77,928
          
                             
(a) Economic mark-to-market hedges
                          
(b) Speculative trading
                          
(c) Gain on sale of merchant portfolio
                          
(d) Afton write-down
                          
(e) Impairment of intangible assets
                          
(f) Regulatory disallowances
                          
(g) Business improvement plan
                          
(h) Acquisition/Divestiture
                          
(i) Depreciation on gas assets
                          
(j) Write-off of emissions allowances
                          
(k) Unrealized impairments of NDT securities
                          
(l) FIN 48 interest
                          
(m) Favorable tax decision
                          
(n) JV formation costs
                          
(o) Loss on contribution of Altura
                          
(p) Sale of turbine
                          
(q) Twin Oaks III impairment
                          
(r) Texas deferred tax adjustments
                          
(s) Tax impact of pretax adjustments
                          


 
 
 

PNM RESOURCES, INC. AND SUBSIDIARIES
PRELIMINARY CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(Unaudited)

 
Three Months Ended
  
Year Ended
 
December 31,
  
December 31,
 
2008
  
2007
  
2008
  
2007
 
(In thousands, except per share amounts)
Operating Revenues:
              
Electric
$  407,573
  
$  401,011
  
$1,959,241
  
$1,912,824
Other
60
  
496
  
281
  
1,205
Total operating revenues
407,633
  
401,507
  
1,959,522
  
1,914,029
               
Operating Expenses:
              
Cost of energy sold
213,152
  
218,241
  
1,239,854
  
1,121,525
Administrative and general
82,936
  
49,155
  
250,688
  
214,588
Energy production costs
50,668
  
45,203
  
193,899
  
201,483
Impairment of goodwill and other intangible assets
38,389
  
-
  
182,473
  
-
Regulatory disallowances
-
  
-
  
30,248
  
-
Depreciation and amortization
38,924
  
35,191
  
144,362
  
135,695
Transmission and distribution costs
15,235
  
13,820
  
58,702
  
57,774
Taxes other than income taxes
8,159
  
12,438
  
47,192
  
57,922
Total operating expenses
447,363
  
374,048
  
2,147,419
  
1,788,987
Operating income (loss)
(39,830)
  
27,459
  
(187,897)
  
125,042
               
Other Income and Deductions:
              
Interest income (losses)
6,906
  
15,634
  
24,096
  
43,154
Gains (losses) on investments held by NDT
(5,154)
  
4,701
  
(15,233)
  
11,599
Other income
1,528
  
2,148
  
6,478
  
7,443
Equity in net earnings (loss) of Optim Energy
(596)
  
(4,585)
  
(29,687)
  
7,581
Minority interest in earnings of Valencia
(2,727)
  
-
  
(7,179)
  
-
Other deductions
(2,400)
  
(3,017)
  
(11,266)
  
(11,552)
Net other income and deductions
(2,443)
  
14,881
  
(32,791)
  
58,225
               
Interest Charges:
              
Interest on long-term debt
25,069
  
16,946
  
97,691
  
81,638
Other interest charges
8,880
  
9,930
  
35,264
  
38,517
Total interest charges
33,949
  
26,876
  
132,955
  
120,155
               
Earnings (Loss) before Income Taxes
(76,222)
  
15,464
  
(353,643)
  
63,112
               
Income Taxes (Benefit)
(34,294)
  
4,688
  
(89,882)
  
3,226
               
Preferred Stock Dividend Requirements of Subsidiary
132
  
132
  
528
  
528
               
Earnings (Loss) from Continuing Operations
(42,060)
  
10,644
  
(264,289)
  
59,358
               
Earnings from Discontinued Operations, net of income
              
taxes of $6,658, $3,889, $22,957 and $10,395
10,006
  
5,952
  
34,628
  
15,516
               
Net Earnings (Loss)
$    (32,054)
  
$     16,596
  
$ (229,661)
  
$      74,874
               
Earnings (Loss) from Continuing Operations per Common Share:
              
Basic
$    (0.48)
  
$     0.14
  
  $    (3.17)
  
$    0.77
Diluted
$    (0.48)
  
$     0.13
  
$    (3.17)
  
$    0.76
Net Earnings (Loss) per Common Share:
              
Basic
$    (0.36)
  
$     0.22
  
$    (2.75)
  
$    0.98
Diluted
$    (0.36)
  
$     0.21
  
$    (2.75)
  
$    0.96
               
Dividends Declared per Common Share
$    0.125
  
$   0.230
  
$     0.605
  
$  0.920

The following table shows PNM Electric operating revenues by customer class, including intersegment revenues and average number of customers:

 
   
Year Ended December 31,
   
2008
  
2007
  
Change
   
(In millions, except customers)
Residential
  
$  296.1
  
$  265.4
  
$   30.7
Commercial
  
326.3
  
294.7
  
31.6
Industrial
  
100.7
  
100.0
  
0.7
Transmission
  
26.0
  
26.0
  
-
Other retail
  
35.6
  
30.7
  
4.9
Wholesale long-term sales
  
158.2
  
146.3
  
11.9
Wholesale short-term sales
  
300.0
  
273.9
  
26.1
   
$1,242.9
  
$1,137.0
  
$   105.9
Average customers (thousands)
  
495.3
  
489.4
  
5.9


The following table shows PNM Electric GWh sales by customer class:

   
Year Ended December 31,
   
2008
  
2007
  
Change
   
(Gigawatt hours)
Residential
  
3,221.9
  
3,208.6
  
13.3
Commercial
  
4,028.7
  
4,005.2
  
23.5
Industrial
  
1,657.6
  
1,920.1
  
(262.5)
Other retail
  
281.1
  
266.0
  
15.1
Wholesale long-term sales
  
2,721.0
  
2,697.2
  
23.8
Wholesale short-term sales
  
3,497.7
  
5,321.8
  
(1,824.1)
   
15,408.0
  
17,418.9
  
(2,010.9)

 
 
 

The following table shows TNMP Electric operating revenues by customer class, including intersegment revenues, and average number of customers:


   
Year Ended December 31,
   
2008
  
2007
  
Change
   
(In millions, except customers)
Residential
  
$  71.7
  
$    69.5
  
$   2.2
Commercial
  
72.8
  
70.1
  
2.7
Industrial
  
13.8
  
7.9
  
5.9
Other
  
32.0
  
32.9
  
(0.9)
   
$  190.3
  
$  180.4
  
$   9.9
Average customers (thousands)
  
229.5
  
226.2
  
3.3

(1)  
Under TECA, customers of TNMP Electric in Texas have the ability to choose First Choice or any other REP to provide energy.  The average customers reported above include (in thousands) 112.6 and 137.0 customers of TNMP Electric for the twelve months ended December 31, 2008 and 2007 who have chosen First Choice as their REP.  These customers are also included in the First Choice segment.

The following table shows TNMP Electric GWh sales by customer class:

   
Year Ended December 31,
   
2008
  
2007
  
Change
   
(Gigawatt hours)
Residential
  
2,533.0
  
2,520.6
  
12.4
Commercial
  
2,206.2
  
2,196.0
  
10.2
Industrial
  
2,094.8
  
1,927.9
  
166.9
Other
  
107.5
  
100.6
  
6.9
   
6,941.5
  
6,745.1
  
196.4

(1)  
The GWh sales reported above include 1,563.3 and 2,018.1 GWhs for the twelve months ended December 31, 2008 and 2007 and used by customers of TNMP Electric respectively, who have chosen First Choice as their REP.  These GWhs are also included below in the First Choice segment.


 
 
 

The following table shows PNM Gas operating revenues by customer class included in earnings from discontinued operations within the presentation of Preliminary Consolidated Statements of Earnings (Loss) and average number of customers:

   
Year Ended December 31,
   
2008
  
2007
  
Change
   
(In millions, except customers)
Residential
  
$  342.5
  
$    338.5
  
$   4.0
Commercial
  
103.9
  
102.3
  
1.6
Industrial
  
3.9
  
2.7
  
1.2
Transportation(1)
  
16.2
  
15.1
  
1.1
Other
  
40.5
  
49.9
  
(9.4)
   
$  507.0
  
$  508.5
  
$   (1.5)
Average customers (thousands)
  
496.5
  
491.6
  
4.9

(1)  
Customer-owned gas.


The following table shows PNM Gas throughput by customer class:

   
Year Ended December 31,
   
2008
  
2007
  
Change
   
(Thousands of Decatherms)
Residential
  
31,981.0
  
29,468.1
  
2,512.9
Commercial
  
11,302.1
  
10,655.6
  
646.5
Industrial
  
417.3
  
313.1
  
104.2
Transportation(1)
  
37,073.2
  
40,299.3
  
(3,226.1)
Other
  
3,107.4
  
5,356.8
  
(2,249.4)
   
83,881.0
  
86,092.9
  
(2,211.9)

(1)  
Customer-owned gas.


 
 
 

The following table shows First Choice operating revenues by customer class, including intersegment revenues, and actual number of customers:

   
Year Ended December 31,
   
2008
  
2007
  
Change
   
(In millions, except customers)
Residential
  
$  407.3
  
$    390.3
  
$   17.0
Mass-market
  
52.7
  
61.0
  
(8.3)
Mid-market
  
149.3
  
141.6
  
7.7
Trading gains (losses)
  
(49.9)
  
(3.6)
  
(46.3)
Other
  
22.8
  
11.4
  
11.4
   
$  582.2
  
$  600.7
  
$   (18.5)
Actual customers (thousands)(1,2)
  
237.4
  
258.4
  
(21.0)

(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 count at December 31 is presented in the table above as a more representative business indicator than average customers.

The following table shows First Choice GWh electric sales by customer class:

   
Year Ended December 31,
   
2008
  
2007
  
Change
   
(Gigawatt hours) (1)
Residential
  
2,547.5
  
2,796.9
  
(249.4)
Mass-market
  
278.3
  
371.8
  
(93.5)
Mid-market
  
1,176.8
  
1,197.3
  
(20.5)
Other
  
16.3
  
21.1
  
(4.8)
   
4,018.9
  
4,387.1
  
(368.2)

(1)  
See note above in the TNMP Electric segment discussion about the impact of TECA.