-----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, RZpXvG3RwuT1UW+Vl3l9uKZWm+CxU7/0xeCKxjcxeGDU40LlBfnJR8ttKCcCQbsj 3C5YoF58mSgCaIaG+mWpxA== 0001108426-03-000036.txt : 20031031 0001108426-03-000036.hdr.sgml : 20031031 20031031164624 ACCESSION NUMBER: 0001108426-03-000036 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20031031 ITEM INFORMATION: FILED AS OF DATE: 20031031 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: 03970347 BUSINESS ADDRESS: STREET 1: ALVARADO SQUARE, MS2706 CITY: ALBUQUERQUE STATE: NM ZIP: 87158 BUSINESS PHONE: 5058482700 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: 333-32170 FILM NUMBER: 03970348 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 f8k_10312003pnmr.txt PNM RESOURCES REPORTS 3RD QTR EARNINGS 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 events reported) October 31, 2003 ---------------------- (October 30, 2003) ---------------------- Commission Name of Registrants, State of Incorporation, I.R.S. Employer File Number Address and Telephone Number Identification No. - ----------- -------------------------------------------- ------------------ 333-32170 PNM Resources, Inc. 85-0468296 (A New Mexico Corporation) Alvarado Square Albuquerque, New Mexico 87158 (505) 241-2700 1-6986 Public Service Company of New Mexico 85-0019030 (A New Mexico Corporation) Alvarado Square Albuquerque, New Mexico 87158 (505) 241-2700 ------------------------------ (Former name, former address and former fiscal year, if changed since last report) Item 12. Results of Operations and Financial Condition On October 30, 2003, PNM Resources, Inc. (the "Company") issued a press release announcing its unaudited results of operations for the three and nine months ended September 30, 2003. The press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein. The Company's press release and other communications from time to time may include certain non-GAAP financial measures. 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 of revenues, operating expenses, operating income, other income and deductions, net income, earnings per share and other GAAP measures of operating performance that exclude or include the effect of litigation settlements, accounting or regulatory changes, the restructuring of selected operations, certain merger activities and other similar events. The Company's management believes 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 measure is 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 presented in prior periods. 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. Limitation on Incorporation by Reference In accordance with general instruction B.6 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Item 12 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. EXHIBIT INDEX Exhibit Number Description 99.1 Press Release dated October 30, 2003, PNM Resources, Inc. and Subsidiaries Consolidated Statements of Earnings for the three and nine months ended September 30, 2003 and 2002 and other select financial information. 2 EXHIBIT 99.1 PNM Resources Reports Third Quarter Earnings Highlights: o Third Quarter 2003 GAAP earnings of $0.41 per diluted share, compared to $0.45 per diluted share in the third quarter of 2002. o Latest quarter includes a one-time charge of $0.24 per share due to cost associated with early retirement of debt. o Ongoing earnings for third quarter 2003 were $0.65 per share, up 10 percent or $0.06 per share over the comparable three months in 2002. o Gas utility operations lost $0.12 per share in the most recent quarter, compared to a loss of $0.10 in the third quarter of 2002. A proposed settlement of PNM's pending gas rate case is awaiting decision from the New Mexico Public Regulation Commission. o Total operating revenues rose $110.5 million, or 40 percent, to $385.2 million for the latest quarter. o Wholesale power revenues increased $73.0 million, or 72.1 percent, in the most recent quarter. o Gross operating margin improved $13.9 million or 8.9 percent, to $170.7 million for third quarter 2003, compared to $156.8 million in the third quarter 2002. o Gross margin on wholesale power sales increased 47.2 percent, to $27.1 million in the latest quarter, primarily due to additional long term power sales. o Gross margin on PNM utility operations rose $5.6 million or 4.1 percent over the comparable period last year, to $143.7 million in the latest quarter. ALBUQUERQUE, N.M., October 30, 2003 - PNM Resources (NYSE: PNM) today reported ongoing earnings (before including one-time gains or charges) of $0.65 per share in the third quarter 2003, compared to $0.59 per share in the same period last year. Consolidated GAAP earnings were $16.6 million, or $0.41 per share (diluted), for the three months ended September 30, 2003. In the comparable period in 2002, the company reported consolidated net earnings of $17.7 million, or $0.45 per diluted share. A one-time charge of $0.24 per share was recorded in the latest quarter. In the comparable period last year, PNM Resources reported a one-time charge of $0.14 per share. 3 EXHIBIT 99.1 (Continued) GAAP net earnings of $2.06 per diluted common share for the nine months ended September 30, 2003, included a one-time gain of $0.94 per share (the cumulative effect of a change in accounting principle) and one-time charges of $0.51 per share, increasing earnings by a net of $0.43 per share. Ongoing earnings for the first three quarters of 2003 were $1.63 per diluted share, compared to ongoing earnings of $1.49 per diluted share in the first nine months of 2002. PNM Resources, Inc. Reconciliation of GAAP Reported to Ongoing Earnings Per Share September 30, 2003
Three Months Nine Months Twelve Months Q3 2003 Q3 2002 9/30/03 9/30/02 9/30/03 9/30/02 ------- ------- ------- -------- ------- ------- GAAP Reported EPS $0.41 $0.45 $2.06 $1.35 $2.33 $1.46 One-time charges 0.24 0.14 0.51 0.14 0.74 0.27 Change in Accounting (1) -- -- (0.94) -- (0.99) -- ------- ------- ------- -------- ------- ------- Ongoing earnings $0.65 $0.59 $1.63 $1.49 $2.08 $1.73 Average diluted shares (000s) 40,706 39,325 39,936 39,484 39,795 39,502
"Our success in expanding our long-term wholesale contract business over the past year has been an important factor in improving PNM earnings in 2003," said PNM Resources Chairman, President and Chief Executive Officer Jeff Sterba. "Electric utility earnings were also up for the quarter, but our gas utility continues to underperform. Losses in our gas utility increased 20 percent in this latest quarter compared to last year. The company is awaiting commission action on the negotiated settlement of our pending rate increase." PERFORMANCE SUMMARY Consolidated gross margin (operating revenues less cost of energy) for the quarter increased $13.9 million, or about 8.9 percent, to $170.7 million in the most recent quarter, compared to $156.8 million in the third quarter of 2002. Retail electric gross margin increased $4.3 million, or 4.2 percent, to $104.8 million for the quarter, compared to $100.5 million in the third quarter last year. An increase in operating revenues due to growth in the PNM service territory and warmer weather in the third quarter 2003 compared to the same period last year was partially offset by the transfer of a large retail customer to wholesale status, and by a reduction in retail electric rates implemented in September 2003. Gross margin on wholesale electric sales increased $8.7 million, or 47.2 percent, to $27.1 million for the third quarter 2003, compared to $18.4 million in the third quarter 2002. Long-term contract sales revenues increased by $28.7 million, to $41.3 million for the quarter, primarily due to the addition of several new contracts in 2003. Short-term and forward contract wholesale revenues increased from $88.5 million in the third quarter of 2002 to $132.8 million in the latest quarter, primarily due to higher average prices and increased sales volume in 2003. 4 EXHIBIT 99.1 (Continued) ONE-TIME AND NON-RECURRING GAINS AND CHARGES Third quarter 2003 results included a one time charge of $16.6 million, or $0.24 per share, reflecting the cost of refinancing long-term debt. OTHER RECENT SIGNIFICANT DEVELOPMENTS AFFECTING PNM RESOURCES: o In October, PNM announced an agreement to sell 50MW of energy, together with renewable energy credits, in the third quarter of each year from 2004-2008 to Salt River Project in Arizona. o In September, PNM entered into a contract to supply from 15 to 25 MW of power to Overton Power District Number 5 in Nevada. o Also in September, PNM issued $300 million in Senior Unsecured Notes to replace $268 million in existing debt in a transaction expected to save about $5 million annually in interest expense. o In October, the company proposed deferring the residential portion of a $22 million increase in gas revenues (including $20 million in gas service rates and $1.6 million in a tariff for miscellaneous charges) until the spring and summer of 2004. The increase, part of a negotiated settlement of PNM's pending gas rate case, was originally planned to take effect in November 2003. Details of these announcements and other PNM Resources news are available at the company's website, pnm.com. EARNINGS GUIDANCE UNCHANGED FOR 2003 Based on results for the first three quarters of 2003 and its financial and operating forecasts for the remainder of the year, the company today reaffirmed existing earnings guidance for 2003. The company expects 2003 ongoing earnings (not including one-time gains and charges) will be between $1.80 and $2.05 per diluted share. EARNINGS TELECONFERENCE SCHEDULED PNM Resources has scheduled a teleconference for 9:00 a.m. Eastern Time on October 31, 2003, to discuss Third Quarter 2003 earnings and other issues of interest to shareholders and investors. The public is invited to listen to the teleconference by calling 1- 800-915-4836 after 8:45 a.m. ET. A webcast of the teleconference can be accessed through a link on the company's website at pnm.com. A presentation that will accompany the teleconference is also available at pnm.com. PNM Resources is an energy holding company based in Albuquerque, New Mexico. PNM, the principal subsidiary of PNM Resources, serves about 450,000 natural gas customers and 390,000 electric customers in New Mexico. The company also sells power on the wholesale market in the Western U.S. PNM Resources stock is traded primarily on the NYSE under the symbol PNM. For more information about our company, see our web site at www.pnm.com. 5 EXHIBIT 99.1 (Continued) Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 - -------------------------------------------------------------------------------- Statements made in this filing and documents the Company files with the SEC that relate to future events or the Company expectations, projections, estimates, intentions, goals, targets and strategies are made pursuant to the Private Securities Litigation Reform Act of 1995. You are cautioned that all forward-looking statements are based upon current expectations and estimates and we assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by the forward-looking statements, the Company cautions you not to place undue reliance on these statements. Many factors could cause actual results to differ, and will affect the Company's future financial condition, cash flow and operating results. These factors include interest rates, weather, fuel costs, changes in supply and demand in the market for electric power, wholesale power prices, market liquidity, the competitive environment in the electric and natural gas industries, the performance of generating units and transmission system, state and federal regulatory and legislative decisions and actions, the outcome of legal proceedings and the performance of state, regional and national economies. For a detailed discussion of the important factors that affect the Company and that could cause actual results to differ from those expressed or implied by our forward-looking statements, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's current and future Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and the Company's current and future Current Reports on Form 8-K, filed with the SEC. 6 EXHIBIT 99.1 (Continued) PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, --------------------------- -------------------------- 2003 2002 2003 2002 ------------ ------------ ------------ ------------ (In thousands, except per share amounts) Operating Revenues: Electric..................................... $337,198 $238,096 $844,726 $636,017 Gas.......................................... 47,938 36,244 268,200 189,413 Unregulated businesses....................... 25 335 137 1,252 ------------ ------------ ------------ ------------ Total operating revenues................... 385,161 274,675 1,113,063 826,682 ------------ ------------ ------------ ------------ Operating Expenses: Cost of energy sold.......................... 214,416 117,899 615,685 369,887 Administrative and general................... 38,599 38,787 113,241 106,494 Energy production costs...................... 34,217 35,238 103,826 104,411 Depreciation and amortization................ 29,260 25,780 86,484 75,776 Transmission and distribution costs.......... 15,150 15,949 46,503 47,937 Taxes, other than income taxes............... 7,439 7,077 21,945 24,589 Income taxes................................. 10,199 4,810 26,158 16,317 ------------ ------------ ------------ ------------ Total operating expenses................... 349,280 245,540 1,013,842 745,411 ------------ ------------ ------------ ------------ Operating income........................... 35,881 29,135 99,221 81,271 ------------ ------------ ------------ ------------ Other Income and Deductions: Other income................................. 15,455 13,801 39,406 39,252 Other deductions............................. (18,761) (6,842) (40,693) (10,234) Income tax expense........................... 1,193 (2,541) 468 (10,815) ------------ ------------ ------------ ------------ Net other income and deductions............ (2,113) 4,418 (819) 18,203 ------------ ------------ ------------ ------------ Income before interest charges............. 33,768 33,553 98,402 99,474 Interest Charges............................... 17,053 15,756 53,050 45,571 Preferred Stock Dividend Requirements of Subsidiary............................... 147 147 440 440 ------------ ------------ ------------ ------------ Net Earnings from Operations................... 16,568 17,650 44,912 53,463 ------------ ------------ ------------ ------------ Cumulative Effect of a Change in Accounting Principle, Net of Tax of $24,524............ - - 37,422 - ------------ ------------ ------------ ------------ Net Earnings................................... $ 16,568 $ 17,650 $ 82,334 $ 53,463 ============ ============ ============ ============ Net Earnings per Common Share: Basic........................................ $ 0.41 $ 0.45 $ 2.08 $ 1.37 ============ ============ ============ ============ Diluted...................................... $ 0.41 $ 0.45 $ 2.06 $ 1.35 ============ ============ ============ ============ Dividends Paid per Share of Common Stock....... $ 0.23 $ 0.22 $ 0.68 $ 0.64 ============ ============ ============ ============
7 EXHIBIT 99.1 (Continued) PNM RESOURCES, INC. AND SUBSIDIARIES COMPARATIVE OPERATING STATISTICS The following tables show electric revenues by customer class and average customers: Electric Retail Revenues Three Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (In thousands) Residential.............. $58,301 $53,213 $5,088 Commercial............... 73,918 69,800 4,118 Industrial............... 16,689 21,819 (5,130) Other.................... 5,838 5,838 - ------------- ------------- -------------- $154,746 $150,670 $4,076 ============= ============= ============== Average customers........ 397,489 385,468 12,021 ============= ============= ============== Nine Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (In thousands) Residential............. $156,135 $149,631 $6,504 Commercial.............. 192,008 187,382 4,626 Industrial.............. 51,791 62,239 (10,448) Other................... 14,947 15,174 (227) ------------- ------------- -------------- $414,881 $414,426 $ 455 ============= ============= ============== Average customers....... 394,878 383,572 11,306 ============= ============= ============== 8 EXHIBIT 99.1 (Continued) PNM RESOURCES, INC. AND SUBSIDIARIES COMPARATIVE OPERATING STATISTICS The following tables show electric sales by customer class: Electric Sales Three Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (Megawatt hours) Residential............ 688,617 620,299 68,318 Commercial............. 995,470 928,250 67,220 Industrial............. 332,747 427,481 (94,734) Other.................. 76,305 80,711 (4,406) ------------- ------------- -------------- 2,093,139 2,056,741 36,398 ============= ============= ============== Nine Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (Megawatt hours) Residential............ 1,827,897 1,743,712 84,185 Commercial............. 2,546,486 2,462,727 83,759 Industrial............. 1,029,625 1,225,398 (195,773) Other.................. 189,612 203,736 (14,124) ------------- ------------- -------------- 5,593,620 5,635,573 (41,953) ============= ============= ============== 9 EXHIBIT 99.1 (Continued) PNM RESOURCES, INC. AND SUBSIDIARIES COMPARATIVE OPERATING STATISTICS The following tables show gas revenues by customer and average customers: Gas Revenues Three Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (In thousands) Residential............ $25,852 $20,550 $5,302 Commercial............. 9,281 6,249 3,032 Industrial............. 391 348 43 Transportation*........ 5,584 4,941 643 Other.................. 6,830 4,156 2,674 ------------- ------------- -------------- $47,938 $36,244 $11,694 ============= ============= ============== Average customers...... 450,378 439,638 10,740 ============= ============= ============== Nine Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (In thousands) Residential............ $168,525 $118,274 $50,251 Commercial............. 54,844 36,839 18,005 Industrial............. 1,856 1,412 444 Transportation*........ 15,339 13,686 1,653 Other.................. 27,636 19,202 8,434 ------------- ------------- -------------- $268,200 $189,413 $78,787 ============= ============= ============== Average customers...... 451,164 442,360 8,804 ============= ============= ============== *Customer-owned gas. 10 EXHIBIT 99.1 (Continued) PNM RESOURCES, INC. AND SUBSIDIARIES COMPARATIVE OPERATING STATISTICS The following tables show gas throughput by customer class: Gas Throughput Three Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (Thousands of decatherms) Residential............. 2,212 2,291 (79) Commercial.............. 1,306 1,263 43 Industrial.............. 62 94 (32) Transportation*......... 17,613 13,753 3,860 Other................... 955 800 155 ------------- ------------- -------------- 22,148 18,201 3,947 ============= ============= ============== Nine Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (Thousands of decatherms) Residential............. 18,069 18,791 (722) Commercial.............. 7,281 7,827 (546) Industrial.............. 318 390 (72) Transportation*......... 42,703 35,226 7,477 Other................... 3,924 3,904 20 ------------- ------------- -------------- 72,295 66,138 6,157 ============= ============= ============== *Customer-owned gas. Electric Transmission Revenues Three Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (In thousands) External customers....... $ 8,920 $ 5,693 $ 3,227 ============= ============= ============== Nine Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (In thousands) External customers....... $ 15,794 $ 17,504 $(1,710) ============= ============= ============== 11 EXHIBIT 99.1 (Continued) PNM RESOURCES, INC. AND SUBSIDIARIES COMPARATIVE OPERATING STATISTICS The following tables show revenues by customer class: Wholesale Revenues Three Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (In thousands) Long-term contracts.... $40,702 $12,682 $28,020 Forward sales*......... 58,708 18,792 39,916 Short-term sales....... 74,122 69,722 4,400 ------------- ------------- -------------- $173,532 $101,196 $72,336 ============= ============= ============== Nine Months Ended June 30, 2003 2002 Variance ------------- ------------- -------------- (In thousands) Long-term contracts.... $100,488 $45,742 $54,746 Forward sales*......... 125,656 56,942 68,714 Short-term sales....... 187,907 156,298 31,609 ------------- ------------- -------------- $414,051 $258,982 $155,069 ============= ============= ============== *Includes mark-to-market gains/(losses). Note: For comparative purposes, wholesale revenues for the three months and nine months ended September 30, 2002 included in these comparative operating statistics have not been reclassified to a net margin basis in accordance with GAAP. The impact would be to reduce 2002 forward sales revenue by $19.5 million and $54.9 million, respectively. These GAAP adjustments are included in the statement of earnings. 12 EXHIBIT 99.1 (Continued) PNM RESOURCES, INC. AND SUBSIDIARIES COMPARATIVE OPERATING STATISTICS The following tables show sales by customer class: Wholesale Sales Three Months Ended September 30, 2003 2002 Variance ------------- ------------- -------------- (Megawatt hours) Long-term contracts..... 730,536 160,947 569,589 Forward sales........... 1,063,000 292,640 770,360 Short-term sales........ 1,514,924 2,013,673 (498,749) ------------- ------------- -------------- 3,308,460 2,467,260 841,200 ============= ============= ============== Nine Months Ended September 30, 2003 2002 Variance ------------- ------------- --------------- (Megawatt hours) Long-term contracts..... 1,792,653 669,100 1,123,553 Forward sales........... 2,580,380 945,620 1,634,760 Short-term sales........ 4,323,668 5,623,388 (1,299,720) ------------- ------------- --------------- 8,696,701 7,238,108 1,458,593 ============= ============= =============== 13 SIGNATURES - ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PNM RESOURCES, INC. AND PUBLIC SERVICE COMPANY OF NEW MEXICO -------------------------------------------- (Registrant) Date: October 31, 2003 /s/ Robin A. Lumney -------------------------------------------- Robin A. Lumney Vice President, Controller and Chief Accounting Officer (Officer duly authorized to sign this report) 14 -----END PRIVACY-ENHANCED MESSAGE-----