0001108426-11-000052.txt : 20110809 0001108426-11-000052.hdr.sgml : 20110809 20110808211057 ACCESSION NUMBER: 0001108426-11-000052 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20110808 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20110809 DATE AS OF CHANGE: 20110808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEXAS NEW MEXICO POWER CO CENTRAL INDEX KEY: 0000022767 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 750204070 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 002-97230 FILM NUMBER: 111018618 BUSINESS ADDRESS: STREET 1: 4100 INTERNATIONAL PLZ STREET 2: PO BOX 2943 CITY: FORT WORTH STATE: TX ZIP: 76113 BUSINESS PHONE: 8177310099 MAIL ADDRESS: STREET 1: 4100 INTERNATIONAL PLAZA STREET 2: PO BOX 2943 CITY: FORT WORTH STATE: TX ZIP: 76113 FORMER COMPANY: FORMER CONFORMED NAME: COMMUNITY PUBLIC SERVICE CO DATE OF NAME CHANGE: 19810617 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC SERVICE CO OF NEW MEXICO CENTRAL INDEX KEY: 0000081023 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 850019030 STATE OF INCORPORATION: NM FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06986 FILM NUMBER: 111018619 BUSINESS ADDRESS: STREET 1: ALVARADO SQUARE CITY: ALBUQUERQUE STATE: NM ZIP: 87158 BUSINESS PHONE: 5058482700 MAIL ADDRESS: STREET 1: ALVARADO SQUARE CITY: ALBUQUERQUE STATE: NM ZIP: 87158 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PNM RESOURCES INC CENTRAL INDEX KEY: 0001108426 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 850019030 STATE OF INCORPORATION: NM FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-32462 FILM NUMBER: 111018617 BUSINESS ADDRESS: STREET 1: ALVARADO SQUARE STREET 2: NEW MEXICO CITY: ALBUQUERQUE STATE: NM ZIP: 87158 BUSINESS PHONE: 5052412700 MAIL ADDRESS: STREET 1: ALVARADO SQUARE CITY: ALBUQUERQUE STATE: NM ZIP: 87158 FORMER COMPANY: FORMER CONFORMED NAME: MANZANO CORP DATE OF NAME CHANGE: 20000303 8-K 1 a201108088kearningsupdate.htm 20110808 8K earnings update


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
CURRENT REPORT
 
 
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 
Date of Report (Date of earliest event reported)
August 8, 2011
 
 
(August 8, 2011)
 
 
Commission
 
Name of Registrants, State of Incorporation,
 
I.R.S. Employer
File Number
 
Address and Telephone Number
 
Identification No.
 
 
 
 
 
001-32462
 
PNM Resources, Inc.
 
85-0468296
 
 
(A New Mexico Corporation)
 
 
 
 
Alvarado Square
 
 
 
 
Albuquerque, New Mexico 87158
 
 
 
 
(505) 241-2700
 
 
 
 
 
 
 
001-06986
 
Public Service Company of New Mexico
 
85-0019030
 
 
(A New Mexico Corporation)
 
 
 
 
Alvarado Square
 
 
 
 
Albuquerque, New Mexico 87158
 
 
 
 
(505) 241-2700
 
 
 
 
 
 
 
002-97230
 
Texas-New Mexico Power Company
 
75-0204070
 
 
(A Texas Corporation)
 
 
 
 
577 N. Garden Ridge Blvd.
 
 
 
 
Lewisville, Texas 75067
 
 
 
 
(972) 420-4189
 
 
______________________________
 
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
    Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))







 
Item 2.02 Results of Operations and Financial Condition.
 
On August 5, 2011, PNM Resources, Inc. (the “Company”) issued a press release (“August 5 Release”) announcing its unaudited results of operations for the three months and six months ended June 30, 2011. The preliminary and unaudited financial results reflected in the August 5 Release were based on the Company's analysis of the July 28, 2011 oral decision by the New Mexico Public Regulation Commission (“NMPRC”) in the pending New Mexico electric rate case of the Company's wholly owned subsidiary, Public Service Company of New Mexico (“PNM”).

On August 8, 2011, a majority of the commissioners of the NMPRC signed a final order that expanded on and clarified the July 28 oral decision. As a result of additional clarity provided by the written order regarding regulatory disallowances, including the recovery of reacquired debt costs from previous years, the Company updated generally accepted accounting principles (“GAAP”) financial results for the Company and PNM in a press release issued on August 8, 2011 (“August 8 Release”). There were no changes in the financial results for Texas-New Mexico Power Company. The August 8 Release is furnished herewith as Exhibit 99.1 and incorporated by reference herein.
 
The Company's press releases and other communications from time to time may include certain financial measures that are not determined in accordance with GAAP. A “non-GAAP financial measure” is defined as a numerical measure of a company's financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company's financial statements.
 
Non-GAAP financial measures utilized by the Company include presentations, on an ongoing basis, of revenues, operating expenses, operating income, other income and deductions, net earnings, earnings per share, cash earnings and earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Company uses ongoing earnings, ongoing earnings per diluted share (or ongoing diluted earnings per share), cash earnings, ongoing EBITDA, and EBITDA to evaluate the operations of the Company and to establish goals for management and employees. Certain non-GAAP financial measures utilized by the Company exclude the impact of net unrealized mark-to-market gains and losses on economic hedges, the net change in unrealized impairments on assets held in trusts for nuclear decommissioning, and certain other non-recurring or infrequent items. The Company's management believes that these non-GAAP financial measures provide useful information to investors by removing the effect of variances in GAAP reported results of operations that are not indicative of fundamental changes in the earnings capacity of the Company's operations. Management also believes that the presentation of the non-GAAP financial measures is largely consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare current non-GAAP measures with non-GAAP measures with respect to prior periods.
 
As previously reported, the Company performed an impairment analysis of its investment in Optim Energy as of December 31, 2010. The Company's analysis indicated that its entire investment in Optim Energy was impaired and the Company reduced the carrying value of its investment in Optim Energy to zero at December 31, 2010. In accordance with GAAP, the Company did not record losses associated with its investment in Optim Energy in 2011 as PNMR has no contractual requirement or agreement to provide Optim Energy with additional financial resources. The Company has included its share of Optim Energy ongoing losses in ongoing earnings in order to reflect the Company's continued involvement in the business.
 
The non-GAAP financial measures used by the Company should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
 

2




Item 7.01 Regulation FD Disclosure.

The disclosures regarding the NMPRC's final order signed on August 8, 2011 appearing above in response to Item 2.02 and contained in Exhibit 99.1 are incorporated herein by reference in this Item 7.01.
 

3



Limitation on Incorporation by Reference
 
In accordance with general instruction B.2 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Items 2.02 and 7.01 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section and not deemed incorporated by reference in any filing under the Securities Act of 1933.



 
 

4


Item 9.01 Financial Statements and Exhibits.
 
(d) Exhibits:
 
Exhibit Number Description
 
99.1 Press Release dated August 8, 2011, and PNM Resources, Inc. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010, Condensed Consolidated Statements of Earnings (Loss) for the three months and six months ended June 30, 2011 and 2010, and Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010, and other preliminary financial information.
 

5


SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.
 
 
PNM RESOURCES, INC.
 
PUBLIC SERVICE COMPANY OF NEW MEXICO
 
TEXAS-NEW MEXICO POWER COMPANY
 
(Registrants)
 
 
 
 
Date: August 8, 2011
/s/ Thomas G. Sategna
 
Thomas G. Sategna
 
Vice President and Corporate Controller
 
(Officer duly authorized to sign this report)


 


6
 EX-99.1 2 exhibit991.htm EXHIBIT 99.1 Exhibit 99.1


For Immediate Release
Aug. 8, 2011

New Mexico Regulators File Order on PNM Rate Case
Commission approves $72.1 million annual revenue increase
(ALBUQUERQUE, N.M.) - State regulators today filed a final order that would grant PNM Resources' (NYSE: PNM) electric utility, Public Service Co. of New Mexico, a $72.1 million increase to annual base revenues. The order from the N.M. Public Regulation Commission modifies terms of a rate case agreement, or stipulation, PNM reached in February with several key parties regarding the utility's request to increase rates.

For the Commission's order to become effective, PNM and the key parties have until Aug. 12 to formally accept the modifications or to indicate they do not oppose or take no position on the changes.

“We are working collaboratively with the key parties to closely examine the Commission's order and the amendments to the original stipulation,” said Pat Vincent-Collawn, PNM Resources president and CEO.

In addition to increasing PNM's revenue, the order would:
•
Provide PNM with the opportunity to file for recovery of costs to comply with any federal or state environmental law or requirement effective after June 30, 2010,
•
Set the utility's capital structure at 48.19 percent long-term debt, 0.53 percent preferred stock and 51.28 percent common equity,
•
Set PNM's return on equity at 10.0 percent on a rate base of $1.8 billion.

If the key parties agree, the order would allow PNM to advance the date on which rates under PNM's next rate case could become effective to July 1, 2013.

Today's order provides clarity to regulatory disallowances reported in the company's second quarter earnings results on Aug. 5. While ongoing earnings are not affected, PNM Resources today updated its second quarter and year-to-date GAAP (generally accepted accounting principles) financial results and reduced PNM's pre-tax regulatory disallowances from $45.1 million to $17.5 million. PNM Resources consolidated GAAP results today are updated to report earnings of $4.1 million, or $0.04 per diluted share for the second quarter, and $20.7 million, or $0.22 per diluted share, for the year through June 30.

Updated schedules reconciling GAAP to non-GAAP results are attached. Updated detailed financial schedules and earnings presentation slides are available on the PNM Resources Web site at http://www.pnmresources.com/investors/results.cfm

(MORE)







NMPRC Files PNM Rate Case Order             8-8-11                    p. 2 of 2


The Commission's written order is available at http://www.pnmresources.com/investors/regulatory.cfm.


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.

CONTACTS:
Analysts                        Financial 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:
 
$
(1,505
)
 
$
4,102

 
$
6,622

 
$
—

 
$
(5,152
)
 
$
4,067

 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
10,559

 
2,550

 
—

 
—

 
—

 
13,109

Total Adjustments
 
13,959

 
2,836

 
2,347

 
(5,608
)
 
605

 
14,139

 
 
 
 
 
 
 
 
 
 
 
 
 
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:
 
$
2,145

 
$
8,265

 
$
20,111

 
$
—

 
$
(9,817
)
 
$
20,704

 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
10,559

 
2,550

 
—

 
—

 
—

 
13,109

Total Adjustments
 
11,091

 
2,836

 
(3,507
)
 
(10,116
)
 
954

 
1,258

 
 
 
 
 
 
 
 
 
 
 
 
 
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.
This Schedule 1 updates Schedule 1 attached to the PNM Resources earnings news release dated Aug. 5, 2011.




PNM Resources
Schedule 2
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:
 
$
(0.02
)
 
$
0.04

 
$
0.07

 
$
—

 
$
(0.06
)
 
$
0.04

 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
0.11

 
0.03

 
—

 
—

 
—

 
0.14

Total Adjustments
 
0.15

 
0.03

 
0.03

 
(0.06
)
 
0.01

 
0.16

 
 
 
 
 
 
 
 
 
 
 
 
 
Ongoing Earnings (Loss)
 
$
0.14

 
$
0.08

 
$
0.10

 
$
(0.06
)
 
$
(0.05
)
 
$
0.20

 
 
 
 
 
 
 
 
 
 
 
 
 
Average Diluted Shares Outstanding
 
92,135,782
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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:
 
$
0.02

 
$
0.09

 
$
0.22

 
$
—

 
$
(0.11
)
 
$
0.22

 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
0.11

 
0.03

 
—

 
—

 
—

 
0.14

Total Adjustments
 
0.12

 
0.03

 
(0.04
)
 
(0.11
)
 
0.01

 
0.01

 
 
 
 
 
 
 
 
 
 
 
 
 
Ongoing Earnings (Loss)
 
$
0.14

 
$
0.12

 
$
0.18

 
$
(0.11
)
 
$
(0.10
)
 
$
0.24

 
 
 
 
 
 
 
 
 
 
 
 
 
Average Diluted Shares Outstanding
 
92,102,430
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tables may not appear visually accurate due to rounding.
This Schedule 2 updates Schedule 3 attached to the PNM Resources earnings news release dated Aug. 5, 2011.




PNM Resources
Schedule 3
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
 
$
(1.5
)
 
$
4.1

 
$
6.6

 
$
(5.2
)
 
$
4.1

 
 
 
 
 
 
 
 
 
 
 
Interest charges
 
18.0

 
7.3

 
0.1

 
5.1

 
30.5

Income taxes
 
(0.9
)
 
2.5

 
3.7

 
(3.6
)
 
1.7

Depreciation and amortization
 
22.9

 
10.7

 
0.4

 
4.3

 
38.3

 
 
 
 
 
 
 
 
 
 
 
EBITDA
 
38.5

 
24.6

 
10.8

 
0.6

 
74.6

 
 
 
 
 
 
 
 
 
 
 
GAAP to ongoing adjustments (before tax)
 
22.4

 
4.4

 
3.7

 
(8.4
)
 
22.1

 
 
 
 
 
 
 
 
 
 
 
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
 
$
2.1

 
$
8.3

 
$
20.1

 
$
(9.8
)
 
$
20.7

 
 
 
 
 
 
 
 
 
 
 
Interest charges
 
36.1

 
14.6

 
0.3

 
10.1

 
61.1

Income taxes
 
1.5

 
5.1

 
11.2

 
(6.6
)
 
11.2

Depreciation and amortization
 
46.6

 
21.0

 
0.6

 
8.5

 
76.7

 
 
 
 
 
 
 
 
 
 
 
EBITDA
 
86.3

 
49.0

 
32.2

 
2.2

 
169.7

 
 
 
 
 
 
 
 
 
 
 
Ongoing adjustments (before tax)
 
17.0

 
4.3

 
(5.4
)
 
(15.1
)
 
0.8

 
 
 
 
 
 
 
 
 
 
 
Ongoing EBITDA
 
$
103.3

 
$
53.3

 
$
26.8

 
$
(12.9
)
 
$
170.5

 
 
 
 
 
 
 
 
 
 
 
* Corporate & Other segment includes equity in net earnings (loss) of Optim Energy.
 
 
 
 
 
 
 
 
 
 
 
Tables may not appear visually accurate due to rounding.
This Schedule 3 updates Schedule 5 attached to the PNM Resources earnings news release dated Aug. 5, 2011.




PNM Resources
Schedule 4
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
 
309,464

 
(27,887
)
 (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)
 
85,079

 
12,787

 
 
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
 
38,861

 
(4,547
)
 
 
34,314

 
29,641

 
9,451

 
 
39,092

Income Taxes (Benefit)
 
11,241

 
847

 (g)
 
12,088

 
8,552

 
5,540

 (g)
 
14,092

Net Earnings (Loss)
 
27,620

 
(5,394
)
 
 
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
 
$
20,704

 
$
1,258

 
 
$
21,962

 
$
14,429

 
$
10,307

 
 
$
24,736

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Earnings (Loss) Attributable to PNMR per Common Share:
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.23

 
$
0.01

 
 
$
0.24

 
$
0.16

 
$
0.11

 
 
$
0.27

Diluted
 
$
0.22

 
$
0.01

 
 
$
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 $(21,402); 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
This Schedule 4 updates Schedule 8 attached to the PNM Resources earnings news release dated Aug. 5, 2011.




PNM RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(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
21,402

 
—

 
21,402

 
—

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
382,726

 
332,143

 
718,170

 
705,056

Operating income
32,860

 
73,674

 
85,079

 
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 before Income Taxes
9,404

 
39,794

 
38,861

 
29,641

Income Taxes
1,735

 
13,492

 
11,241

 
8,552

Net Earnings
7,669

 
26,302

 
27,620

 
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 Attributable to PNMR
$
4,067

 
$
22,878

 
$
20,704

 
$
14,429

Net Earnings Attributable to PNMR per Common Share:
 
 
 
 
 
 
 
Basic
$
0.04

 
$
0.25

 
$
0.23

 
$
0.16

Diluted
$
0.04

 
$
0.25

 
$
0.22

 
$
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
478,599

 
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
934,800

 
949,842

 
$
5,301,633

 
$
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
543,044

 
540,106

Accumulated deferred investment tax credits
16,930

 
18,089

Regulatory liabilities
358,141

 
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
1,407,649

 
1,407,916

Total liabilities
3,561,012

 
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
324,217

 
314,943

Total PNMR common stockholders’ equity
1,544,495

 
1,536,742

Non-controlling interest in Valencia
84,597

 
85,177

Total equity
1,729,092

 
1,721,919

 
$
5,301,633

 
$
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
$
27,620

 
$
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
17,992

 
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
21,402

 
—

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.