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) | February 29, 2012 | |
(February 29, 2012) |
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) |
| 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)) |
PNM RESOURCES, INC. | |
PUBLIC SERVICE COMPANY OF NEW MEXICO | |
TEXAS-NEW MEXICO POWER COMPANY | |
(Registrants) | |
Date: February 29, 2012 | /s/ Thomas G. Sategna |
Thomas G. Sategna | |
Vice President and Corporate Controller | |
(Officer duly authorized to sign this report) |
• | GAAP (generally accepted accounting principles) earnings of $1.96 per diluted share, compared with losses of $0.49 per diluted share in 2010 |
• | Ongoing earnings of $1.08 per diluted share, compared with $0.87 per diluted share in 2010 |
• | GAAP earnings of $1.35 per diluted share, compared with losses of $1.18 per diluted share in 2010 |
• | Ongoing earnings of $0.22 per diluted share, compared with losses of $0.03 per diluted share in 2010 |
• | PNM reported 2011 ongoing earnings of $67.5 million, or $0.76 per diluted share, compared with 2010 earnings of $53.6 million, or $0.58 per diluted share. 2011 GAAP earnings were $54.0 million, or $0.60 per diluted share, compared with 2010 earnings of $56.8 million, or $0.62 per diluted share. |
• | Higher retail rates, primarily associated with the rate case increase that went into effect Aug. 21, 2011, lower power plant outage costs, favorable weather, load growth and lower O&M costs improved earnings. Realized gains related to the Palo Verde Nuclear Decommissioning Trust partially offset the absence of the wholesale tolling agreement from Palo Verde Nuclear Generating Station Unit 3. PNM had load growth of 1.4 percent in 2011. |
• | TNMP reported 2011 ongoing earnings of $25.8 million, or $0.29 per diluted share, and GAAP earnings of $22.3 million, or $0.25 per diluted share, compared with 2010 ongoing and GAAP earnings of $16.0 million, or $0.17 per diluted share. |
• | Higher retail and transmission rates primarily drove improved earnings. Favorable weather and load growth also contributed to earnings. TNMP had load growth of 1.3 percent for 2011. |
• | Corporate/Other reported 2011 ongoing losses of $12.6 million, or $0.14 per diluted share, compared with 2010 losses of $19.2 million, or $0.20 per diluted share. 2011 GAAP earnings were $76.0 million, or $0.85 per diluted share, compared with 2010 losses of $132.8 million, or $1.45 per diluted share. 2011 GAAP earnings include the after-tax gain associated with the First Choice Power sale of $97.0 million, or $1.08 per diluted share. 2010 GAAP losses reflect the after-tax impairment of PNM Resources' investment in Optim Energy of $113.7 million, or $1.24 per diluted share. |
• | Ongoing earnings improved compared with the previous year primarily because of the 2010 impairment of state income wind energy production tax credit carry forwards. These credits were not expected to be utilized prior to their expiration due to the Company's NOL position. Another driver was the reduction in interest expense related to the $50 million debt repurchase in November 2011. |
Quarter Ended December 31, 2011 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice(3) | Corporate and Other | Consolidated | ||||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 13,489 | $ | 5,123 | $ | 3,395 | $ | 89,986 | $ | 111,993 | ||||||||||||||
Adjusting items, net of income tax effects(1) | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | 180 | — | (2,022 | ) | — | (1,842 | ) | |||||||||||||||||
Net change in unrealized impairments of NDT securities | (1,322 | ) | — | — | — | (1,322 | ) | |||||||||||||||||
Process improvement initiatives | 1,778 | 530 | 11 | — | 2,319 | |||||||||||||||||||
Strategic alternatives - competitive businesses | — | — | — | 438 | 438 | |||||||||||||||||||
2010 energy efficiency | (1,542 | ) | — | — | — | (1,542 | ) | |||||||||||||||||
Gain on sale of First Choice(2) | — | — | — | (97,003 | ) | (97,003 | ) | |||||||||||||||||
Loss on reacquired debt | — | — | — | 5,577 | 5,577 | |||||||||||||||||||
Total Adjustments | (906 | ) | 530 | (2,011 | ) | (90,988 | ) | (93,375 | ) | |||||||||||||||
Ongoing Earnings (Loss) | $ | 12,583 | $ | 5,653 | $ | 1,384 | $ | (1,002 | ) | $ | 18,618 | |||||||||||||
Year Ended December 31, 2011 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice(3) | Optim Energy (50%)(4) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 53,963 | $ | 22,257 | $ | 24,116 | $ | — | $ | 76,023 | $ | 176,359 | ||||||||||||
Adjusting items, net of income tax effects(1) | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | (2,309 | ) | — | (3,147 | ) | (1,078 | ) | — | (6,534 | ) | ||||||||||||||
Net change in unrealized impairments of NDT securities | 1,380 | — | — | — | — | 1,380 | ||||||||||||||||||
Process improvement initiatives | 4,025 | 975 | 103 | — | 47 | 5,150 | ||||||||||||||||||
Regulatory disallowance | 10,559 | 2,550 | — | — | — | 13,109 | ||||||||||||||||||
Strategic alternatives - competitive businesses | — | — | — | — | 2,805 | 2,805 | ||||||||||||||||||
New Mexico gross receipts tax adjustments | 1,451 | — | — | — | — | 1,451 | ||||||||||||||||||
2010 energy efficiency | (1,542 | ) | — | — | — | — | (1,542 | ) | ||||||||||||||||
Gain on sale of First Choice(2) | — | — | — | — | (97,003 | ) | (97,003 | ) | ||||||||||||||||
Loss on reacquired debt | — | — | — | — | 5,577 | 5,577 | ||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | — | — | (4,167 | ) | — | (4,167 | ) | ||||||||||||||||
Total Adjustments | 13,564 | 3,525 | (3,044 | ) | (5,245 | ) | (88,574 | ) | (79,774 | ) | ||||||||||||||
Ongoing Earnings (Loss) | $ | 67,527 | $ | 25,782 | $ | 21,072 | $ | (5,245 | ) | $ | (12,551 | ) | $ | 96,585 | ||||||||||
(1) 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 | ||||||||||||||||||||||||
(2) Gain on sale of First Choice is net of income taxes of $77,922 | ||||||||||||||||||||||||
(3) First Choice included through October 31, 2011 | ||||||||||||||||||||||||
(4) Optim Energy included through August 31, 2011 |
Quarter Ended December 31, 2010 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 4,563 | $ | 2,903 | $ | 11,404 | $ | (5,743 | ) | $ | (121,323 | ) | $ | (108,196 | ) | |||||||||
Adjusting items, net of income tax effects* | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | (884 | ) | — | (6,842 | ) | 240 | — | (7,486 | ) | |||||||||||||||
Write-down of emission allowances | — | — | — | 691 | — | 691 | ||||||||||||||||||
Impairment of equity investment in Optim Energy | — | — | — | — | 113,677 | 113,677 | ||||||||||||||||||
Net change in unrealized impairments of NDT securities | (1,345 | ) | — | — | — | — | (1,345 | ) | ||||||||||||||||
Total Adjustments | (2,229 | ) | — | (6,842 | ) | 931 | 113,677 | 105,537 | ||||||||||||||||
Ongoing Earnings (Loss) | $ | 2,334 | $ | 2,903 | $ | 4,562 | $ | (4,812 | ) | $ | (7,646 | ) | $ | (2,659 | ) | |||||||||
Year Ended December 31, 2010 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 56,770 | $ | 15,982 | $ | 24,061 | $ | (9,196 | ) | $ | (132,832 | ) | $ | (45,215 | ) | |||||||||
Adjusting items, net of income tax effects* | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | 3,460 | — | 14,402 | (409 | ) | — | 17,453 | |||||||||||||||||
Write-down of emission allowances | — | — | — | 691 | — | 691 | ||||||||||||||||||
Impairment of equity investment in Optim Energy | — | — | — | — | 113,677 | 113,677 | ||||||||||||||||||
Net change in unrealized impairments of NDT securities | (1,774 | ) | — | — | — | — | (1,774 | ) | ||||||||||||||||
Loss on reacquired debt | 283 | — | — | — | — | 283 | ||||||||||||||||||
Disposition of litigation | (5,141 | ) | — | — | — | — | (5,141 | ) | ||||||||||||||||
Total Adjustments | (3,172 | ) | — | 14,402 | 282 | 113,677 | 125,189 | |||||||||||||||||
Ongoing Earnings (Loss) | $ | 53,598 | $ | 15,982 | $ | 38,463 | $ | (8,914 | ) | $ | (19,155 | ) | $ | 79,974 | ||||||||||
* Income tax effects calculated using tax rates of 35.65% for First Choice and 39.59% for all other segments unless otherwise indicated |
Quarter Ended December 31, 2011 | ||||||||||||||||||||||||
(earnings per diluted share) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice(1) | Corporate and Other | Consolidated | ||||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 0.17 | $ | 0.06 | $ | 0.04 | $ | 1.08 | $ | 1.35 | ||||||||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | — | — | (0.02 | ) | — | (0.02 | ) | |||||||||||||||||
Net change in unrealized impairments of NDT securities | (0.02 | ) | — | — | — | (0.02 | ) | |||||||||||||||||
Process improvement initiatives | 0.02 | 0.01 | — | — | 0.03 | |||||||||||||||||||
Strategic alternatives - competitive businesses | — | — | — | — | — | |||||||||||||||||||
2010 energy efficiency | (0.02 | ) | — | — | — | (0.02 | ) | |||||||||||||||||
Gain on sale of First Choice | — | — | — | (1.17 | ) | (1.17 | ) | |||||||||||||||||
Loss on reacquired debt | — | — | — | 0.07 | 0.07 | |||||||||||||||||||
Total Adjustments | (0.02 | ) | 0.01 | (0.02 | ) | (1.10 | ) | (1.13 | ) | |||||||||||||||
Ongoing Earnings (Loss) | $ | 0.15 | $ | 0.07 | $ | 0.02 | $ | (0.02 | ) | $ | 0.22 | |||||||||||||
Average Diluted Shares Outstanding: 83,160,239 | ||||||||||||||||||||||||
Year Ended December 31, 2011 | ||||||||||||||||||||||||
(earnings per diluted share) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice(1) | Optim Energy (50%)(2) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 0.60 | $ | 0.25 | $ | 0.26 | $ | — | $ | 0.85 | $ | 1.96 | ||||||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | (0.02 | ) | — | (0.03 | ) | (0.01 | ) | — | (0.06 | ) | ||||||||||||||
Net change in unrealized impairments of NDT securities | 0.02 | — | — | — | — | 0.02 | ||||||||||||||||||
Process improvement initiatives | 0.04 | 0.01 | — | — | — | 0.05 | ||||||||||||||||||
Regulatory disallowance | 0.12 | 0.03 | — | — | — | 0.15 | ||||||||||||||||||
Strategic alternatives - competitive businesses | — | — | — | — | 0.03 | 0.03 | ||||||||||||||||||
New Mexico gross receipts tax adjustments | 0.02 | — | — | — | — | 0.02 | ||||||||||||||||||
2010 energy efficiency | (0.02 | ) | — | — | — | — | (0.02 | ) | ||||||||||||||||
Gain on sale of First Choice | — | — | — | — | (1.08 | ) | (1.08 | ) | ||||||||||||||||
Loss on reacquired debt | — | — | — | — | 0.06 | 0.06 | ||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | — | — | (0.05 | ) | — | (0.05 | ) | ||||||||||||||||
Total Adjustments | 0.16 | 0.04 | (0.03 | ) | (0.06 | ) | (0.99 | ) | (0.88 | ) | ||||||||||||||
Ongoing Earnings (Loss) | $ | 0.76 | $ | 0.29 | $ | 0.23 | $ | (0.06 | ) | $ | (0.14 | ) | $ | 1.08 | ||||||||||
Average Diluted Shares Outstanding: 89,757,077 | ||||||||||||||||||||||||
(1) First Choice included through October 31, 2011 | ||||||||||||||||||||||||
(2) Optim Energy included through August 31, 2011 |
Quarter Ended December 31, 2010 | ||||||||||||||||||||||||
(earnings per diluted share) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 0.05 | $ | 0.03 | $ | 0.12 | $ | (0.06 | ) | $ | (1.32 | ) | $ | (1.18 | ) | |||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | (0.01 | ) | — | (0.07 | ) | — | — | (0.08 | ) | |||||||||||||||
Write-down of emission allowances | — | — | — | 0.01 | — | 0.01 | ||||||||||||||||||
Impairment of equity investment in Optim Energy | — | — | — | — | 1.24 | 1.24 | ||||||||||||||||||
Net change in unrealized impairments of NDT securities | (0.01 | ) | — | — | — | — | (0.01 | ) | ||||||||||||||||
Total Adjustments | (0.02 | ) | — | (0.07 | ) | 0.01 | 1.24 | (1.15 | ) | |||||||||||||||
Ongoing Earnings (Loss) | $ | 0.03 | $ | 0.03 | $ | 0.05 | $ | (0.05 | ) | $ | (0.08 | ) | $ | (0.03 | ) | |||||||||
Average Diluted Shares Outstanding: 91,571,920 | ||||||||||||||||||||||||
Year Ended December 31, 2010 | ||||||||||||||||||||||||
(earnings per diluted share) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Earnings (Loss) Attributable to PNMR: | $ | 0.62 | $ | 0.17 | $ | 0.26 | $ | (0.10 | ) | $ | (1.45 | ) | $ | (0.49 | ) | |||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | 0.04 | — | 0.16 | (0.01 | ) | — | 0.19 | |||||||||||||||||
Write-down of emission allowances | — | — | — | 0.01 | — | 0.01 | ||||||||||||||||||
Impairment of equity investment in Optim Energy | — | — | — | — | 1.24 | 1.24 | ||||||||||||||||||
Net change in unrealized impairments of NDT securities | (0.02 | ) | — | — | — | — | (0.02 | ) | ||||||||||||||||
Loss on reacquired debt | — | — | — | — | — | — | ||||||||||||||||||
Disposition of litigation | (0.06 | ) | — | — | — | — | (0.06 | ) | ||||||||||||||||
Total Adjustments | (0.03 | ) | — | 0.16 | — | 1.24 | 1.37 | |||||||||||||||||
Ongoing Earnings (Loss) | $ | 0.58 | $ | 0.17 | $ | 0.42 | $ | (0.10 | ) | $ | (0.20 | ) | $ | 0.87 | ||||||||||
Average Diluted Shares Outstanding: 91,556,579 | ||||||||||||||||||||||||
Tables may not appear visually accurate due to rounding |