-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OjInd4P0HBZTtk5nfE+B+K+N0ZsIPqlqteLQ63yC4oPbC3ptLdu8ZKv0RVTx5fuA LJMGo+xTgmG1mgE5rNbf9Q== 0000081023-01-500011.txt : 20010504 0000081023-01-500011.hdr.sgml : 20010504 ACCESSION NUMBER: 0000081023-01-500011 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20010503 SUBJECT COMPANY: 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: 425 SEC ACT: SEC FILE NUMBER: 001-06986 FILM NUMBER: 1620577 BUSINESS ADDRESS: STREET 1: ALVARADO SQUARE, MS2706 CITY: ALBUQUERQUE STATE: NM ZIP: 87158 BUSINESS PHONE: 5058482700 FILED BY: 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: 425 BUSINESS ADDRESS: STREET 1: ALVARADO SQUARE, MS2706 CITY: ALBUQUERQUE STATE: NM ZIP: 87158 BUSINESS PHONE: 5058482700 425 1 f425_0502.txt TEXT TO MAY 2, 2001 FILING Filed by: Public Service Company of New Mexico pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 ------------------------------------------------ of the Securities Exchange Act of 1934 -------------------------------------- Public Service Company of New Mexico Commission File No.: 1-6986 ----------------------------------------------------------------- Western Resources, Inc. Commission File No.: 1-3523 ---------------------------------------------------- Subject Company: Western Resources, Inc. Transforming Ideas Into Results 1. A Knockout Quarter Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000 o Total Operating Revenues increased 129% o Wholesale Revenues increased 310% o EPS (diluted) increased 191% 2. Quarterly (Ongoing) Earnings Per Share 1999 2000 2001 ---- ---- ---- 1st Quarter 0.55 0.55 1.65 2nd Quarter 0.41 0.45 3rd Quarter 0.52 0.97 4th Quarter 0.43 0.52 3. Continuing Gains The Company's Wholesale Revenues and PVNGS On-Peak Pricing Index ($/MWh) Average PVNGS Wholesale Revenues Daily On-Peak (In thousands) Pricing Index ------------------ ------------- July 2000 $84,047 119.74 August 2000 $120,957 183.66 December 2000 $96,867 231.66 January 2001 $121,635 276.88 February 2001 $136,767 207.79 March 2001 $151,847 211.15 4. Wholesale Revenues Wholesale Revenues Year (In thousands) ---- -------------- 1995 $80,949 1996 $121,329 1997 $185,334 1998 $274,979 1999 $365,368 2000 $748,192 Average Annual Growth Rate - 56% 5. The PNM Advantage (Wholesale) o Strategic Location on Western Grid o Experienced Trading Staff o Relationship Marketing o An Innovative Approach to a Commodity Market o Strong Risk Management o Productive Resources 6. Effective Asset Utilization Capacity Factors at San Juan Generating Station: 1998 82% 1999 80% 2000 86% 1st Quarter 2001 93% o Plans to add 300 - 400 MW annually o 400 MWs of turbines on order o 4 Projects in development 7. The PNM Advantage (Retail) o Combined electric and gas utility o 369,000 electric customers and 435,000 gas customers o $519 million electric revenues and $320 million gas revenues o 3-3.5% underlying growth rate o Rate stability through 2002 2 8. The New Mexico Solution to Deregulation A new holding company: PNM Resources with PNM and Avistar as wholly-owned direct subsidiaries o Safeguards Customers o Expedites New Resources o Allows Flexibility for Utilities 9. PNM and Western Resources Equals a Strategic Combination o Extends regional footprint o Strengthens competitive position o Accelerates planned growth of asset base o Expands financial scale o Creates platform to repeat wholesale success in Midwest market 10. Transforming from Traditional Utility to Merchant/Utility o Maximizing Capacity Utilization o Increasing Trading Velocity o Addressing Niche Markets 11. PNM's Historical Capacity Factor and Trading Velocity (1) o Increased utilization of coal units o Increased ratio of sales to generation Capacity Factor % Trading Velocity (1) PNM WSCC PNM WSCC --- ---- --- ---- 1992 65.91 76.03 1.06 1.28 1993 71.59 75.75 1.06 1.32 1994 73.76 79.78 1.10 1.33 1995 71.19 72.12 1.00 1.34 1996 80.43 71.76 1.14 1.41 1997 81.81 74.84 1.37 1.55 1998 82.73 79.32 1.55 1.57 1999 82.30 80.42 2.45 1.85 (1) Ratio of total sales to net generation 3 12. Western Resources Coal Resources Utilization Capacity Factor % Mid Western Resources Continent Average ----------------- ----------------- 1992 49.07 53.77 1993 59.43 57.56 1994 56.09 56.75 1995 55.56 58.84 1996 64.42 62.61 1997 61.25 63.86 1998 58.14 64.65 1999 63.28 65.91 13. Western Resources' Coal Generation Competitive Position o Western Resources' coal units have lower costs than 60% of the coal units in mid-continent, not including SERC (2) o 80% with SERC included (2) South East Reliability Council 14. Trading Velocity of Select Companies 1999 Ratio ---------- Cleco Utility Group 3.25 Conway Corporation 2.08 Kansas City Power & Light Company 1.06 KGE Western Resources Company 0.85 KPL Western Resources Company 1.10 Lubbock Power & Light 2.31 Minneapolis Light, Water & Power 5.01 Southwestern Electric Power Company 1.07 Southwestern Public Service Company 0.99 UtiliCorp United Inc. 1.72 SPP average 1.27 15. Wholesale Trading Opportunities for Western Resources Energy Western Resources generation assets are strategically located in the Southwest Power Pool which is centrally located to several adjacent markets: MAPP - Mid Continent Area Power Pool MAIN - Mid America Interconnected Network, Inc. SERC - South East Reliability Council 4 16. The Path to Closing o Western Resources Rate Case o Shareholder Vote o Kansas/New Mexico Regulatory Approvals o Other Regulatory Filings o Closing 17. Basis for Earnings Projection o Energy conservation efforts o Credit quality concerns o New generation additions o Mix of short- to long-term sales o Federal and state regulatory decisions 18. Upside Potential Price Earnings Market to Ratio Book Ratio -------------- ---------- PNM 9.8% 106% UniSource 15.2% 180% Pinnacle West 12.2% 155% Reliant 16.2% 216% Xcel 20.7% 175% Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Statements made in this filing that relate to future events are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of the business of the Company are based upon current expectations and are subject to risk and uncertainties, as are the forward-looking statements with respect to the benefits of the Company's proposed acquisition of Western Resources and the businesses of the Company and Western Resources. The Company assumes no obligation to update this information. Because actual results may differ materially from expectations, the Company cautions readers not to place undue reliance on these statements. A number of factors, including weather, fuel costs, changes in supply and demand in the market for electric power, the performance of generating units and transmission system, and state and federal regulatory and legislative decisions and actions, including rulings issued by the New Mexico Public Regulation Commission pursuant to the Electric Utility Industry Restructuring Act of 1999, as amended, and in other cases now pending or which may be brought before the commission and any action by the New Mexico Legislature to further amend or repeal that Act, or other actions relating to restructuring or stranded cost recovery, or federal or state regulatory, legislative or legal action connected with the California wholesale power market, could cause the Company's results or outcomes to differ materially from those indicated by such forward-looking statements in this filing. 5 In addition, factors that could cause actual results or outcomes related to the proposed acquisition of Western Resources to differ materially from those indicated by such forward looking statements include, but are not limited to, risks and uncertainties relating to: the possibility that shareholders of the Company and/or Western Resources will not approve the transaction, the risks that the businesses will not be integrated successfully, the risk that the benefits of the transaction may not be fully realized or may take longer to realize than expected, disruption from the transaction making it more difficult to maintain relationships with clients, employees, suppliers or other third parties, conditions in the financial markets relevant to the proposed transaction, the receipt of regulatory and other approvals of the transaction, that future circumstances could cause business decisions or accounting treatment to be decided differently than now intended, changes in laws or regulations, changing governmental policies and regulatory actions with respect to allowed rates of return on equity and equity ratio limits, industry and rate structure, stranded cost recovery, operation of nuclear power facilities, acquisition, disposal, depreciation and amortization of assets and facilities, operation and construction of plant facilities, recovery of fuel and purchased power costs, decommissioning costs, present or prospective wholesale and retail competition (including retail wheeling and transmission costs), political and economic risks, changes in and compliance with environmental and safety laws and policies, weather conditions (including natural disasters such as tornadoes), population growth rates and demographic patterns, competition for retail and wholesale customers, availability, pricing and transportation of fuel and other energy commodities, market demand for energy from plants or facilities, changes in tax rates or policies or in rates of inflation or in accounting standards, unanticipated delays or changes in costs for capital projects, unanticipated changes in operating expenses and capital expenditures, capital market conditions, competition for new energy development opportunities and legal and administrative proceedings (whether civil, such as environmental, or criminal) and settlements, and the impact of Protection One's financial condition on Western Resources' consolidated results. Additional Information In connection with the proposed transaction with Western Resources, PNM and Western Resources will file a joint proxy statement / prospectus with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE JOINT PROXY STATEMENT / PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of the joint proxy statement / prospectus (when available) and other documents filed by PNM and Western Resources with the SEC at the SEC's web site at http://www.sec.gov. Free copies of the joint proxy statement / prospectus, when available, and each company's other filings with the SEC may also be obtained from the respective companies. Free copies of PNM's filings may be obtained by directing a request to PNM, Alvarado Square, Albuquerque, New Mexico. 6 Participants in Solicitation PNM, Western Resources and certain of their respective directors, executive officers and other members of their management and employees, each of whom may be considered participants in this transaction under applicable securities laws, may be soliciting proxies from their respective stockholders in favor of the transaction. Information concerning PNM's directors and executive officers participating in the solicitation is set forth or will be incorporated in PNM's Annual Report on Form 10-K filed with the SEC on February 22, 2001, and information concerning Western Resources' directors and executive officers participating in the solicitation is set forth in or will be incorporated in Western Resources' Annual Report on Form 10-K filed with the SEC on April 2, 2001. Certain directors and executive officers of PNM and Western Resources may have direct or indirect interests in the transaction due to securities holdings, vesting of options, and rights to severance payments if their employment is terminated following the transaction. In addition, directors and officers, after the transaction, will be indemnified by PNM and Western Resources, and benefit from insurance coverage for liabilities that may arise from their service as directors and officers of PNM or Western Resources prior to the transaction. Additional information regarding PNM's and Western Resources' respective participants in the solicitation will be contained in the joint proxy statement/prospectus. 7 -----END PRIVACY-ENHANCED MESSAGE-----