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) | November 3, 2011 | |
(November 3, 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) |
| 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: November 3, 2011 | /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 $0.48 per diluted share, compared with $0.53 per diluted share in 2010 |
• | Ongoing earnings of $0.61 per diluted share, compared with $0.63 per diluted share in 2010 |
• | GAAP earnings of $0.70 per diluted share, compared with $0.69 per diluted share in 2010 |
• | Ongoing earnings of $0.85 per diluted share, compared with $0.90 per diluted share in 2010 |
• | PNM reported quarterly ongoing earnings of $41.7 million, or $0.45 per diluted share, compared with earnings of $38.9 million, or $0.42 per diluted share, in 2010. GAAP earnings were $38.3 million, or $0.42 per diluted share, compared with earnings of $39.1 million, or $0.43 per diluted share, during the same period in 2010. |
• | The implementation of higher retail rates, which went into effect on Aug. 21, 2011, warmer weather and lower planned and unplanned outage costs more than offset the expiration of the wholesale tolling agreement from Palo Verde Nuclear Generating Station Unit 3. PNM's quarterly load growth was 0.3 percent. |
• | TNMP reported ongoing earnings of $9.0 million and GAAP earnings of $8.9 million, or $0.10 per diluted share, compared with 2010 quarterly ongoing and GAAP earnings of $7.3 million, or $0.08 per diluted share. |
• | Higher retail rates that went into effect Feb. 1, 2011, combined with the effects of warmer weather, improved earnings. TNMP had load growth of 0.3 percent during the quarter. |
• | First Choice Power reported ongoing earnings of $3.1 million, or $0.03 per diluted share, compared with $12.8 million, or $0.14 per diluted share, in 2010. GAAP earnings were $0.6 million, or $0.01 per diluted share, compared with $3.6 million, or $0.03 per diluted share, during the same period last year. |
• | Significantly higher power-purchase costs and lower customer prices more than offset a 21 percent increase in sales volumes driven by warmer weather, higher per-customer usage and customer growth. |
• | PNM Resources' share of Optim Energy net ongoing earnings in July and August was $4.9 million, or $0.05 per diluted share, compared with $1.8 million, or $0.02 per diluted share, for the full third quarter of 2010. |
• | PNM Resources' share of Optim Energy's ongoing EBITDA in July and August was $14.9 million, compared with $12.7 million for the full third quarter of 2010. |
• | Corporate/Other reported ongoing losses of $2.7 million, or $0.02 per diluted share, and GAAP losses of $4.1 million, or $0.05 per diluted share, compared with 2010 ongoing and GAAP losses of $3.0 million, or $0.03 per diluted share. |
Quarter Ended September 30, 2011 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%)** | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 38,329 | $ | 8,868 | $ | 613 | $ | — | $ | (4,148 | ) | $ | 43,662 | |||||||||||
Adjusting items, net of income tax effects* | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | (1,612 | ) | — | 2,443 | (283 | ) | — | 548 | ||||||||||||||||
Net change in unrealized impairments of NDT securities | 3,058 | — | — | — | — | 3,058 | ||||||||||||||||||
Process improvement initiatives | 463 | 159 | 29 | — | — | 651 | ||||||||||||||||||
Strategic alternatives - competitive business | — | — | — | — | 1,461 | 1,461 | ||||||||||||||||||
New Mexico gross receipts tax adjustments | 1,471 | — | — | — | — | 1,471 | ||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | — | — | 5,154 | — | 5,154 | ||||||||||||||||||
Total Adjustments | 3,380 | 159 | 2,472 | 4,871 | 1,461 | 12,343 | ||||||||||||||||||
Ongoing Earnings (Loss) | $ | 41,709 | $ | 9,027 | $ | 3,085 | $ | 4,871 | $ | (2,687 | ) | $ | 56,005 | |||||||||||
Nine Months Ended September 30, 2011 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%)** | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 40,474 | $ | 17,134 | $ | 20,721 | $ | — | $ | (13,963 | ) | $ | 64,366 | |||||||||||
Adjusting items, net of income tax effects* | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | (2,488 | ) | — | (1,125 | ) | (1,078 | ) | — | (4,691 | ) | ||||||||||||||
Net change in unrealized impairments of NDT securities | 2,702 | — | — | — | — | 2,702 | ||||||||||||||||||
Process improvement initiatives | 2,227 | 445 | 92 | — | 47 | 2,811 | ||||||||||||||||||
Regulatory Disallowance | 10,559 | 2,550 | — | — | — | 13,109 | ||||||||||||||||||
Strategic alternatives - competitive business | — | — | — | — | 2,367 | 2,367 | ||||||||||||||||||
New Mexico gross receipts tax adjustments | 1,471 | — | — | — | — | 1,471 | ||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | — | — | (4,167 | ) | — | (4,167 | ) | ||||||||||||||||
Total Adjustments | 14,471 | 2,995 | (1,033 | ) | (5,245 | ) | 2,414 | 13,602 | ||||||||||||||||
Ongoing Earnings (Loss) | $ | 54,945 | $ | 20,129 | $ | 19,688 | $ | (5,245 | ) | $ | (11,549 | ) | $ | 77,968 | ||||||||||
* Income tax effects calculated using tax rates of 35.65% for First Choice, 35.00% for TNMP and 39.59% for all other segments. | ||||||||||||||||||||||||
** Optim Energy included through August 31, 2011. |
Quarter Ended September 30, 2010 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 39,122 | $ | 7,329 | $ | 3,557 | $ | 1,510 | $ | (2,966 | ) | $ | 48,552 | |||||||||||
Adjusting items, net of income tax effects* | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | 937 | — | 9,265 | 267 | — | 10,469 | ||||||||||||||||||
Net change in unrealized impairments of NDT securities | (1,126 | ) | — | — | — | — | (1,126 | ) | ||||||||||||||||
Total Adjustments | (189 | ) | — | 9,265 | 267 | — | 9,343 | |||||||||||||||||
Ongoing Earnings (Loss) | $ | 38,933 | $ | 7,329 | $ | 12,822 | $ | 1,777 | $ | (2,966 | ) | $ | 57,895 | |||||||||||
Nine Months Ended September 30, 2010 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Earnings (Loss) Attributable to PNMR: | $ | 52,207 | $ | 13,079 | $ | 12,657 | $ | (3,452 | ) | $ | (11,510 | ) | $ | 62,981 | ||||||||||
Adjusting items, net of income tax effects* | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | 4,345 | — | 21,244 | (650 | ) | — | 24,939 | |||||||||||||||||
Net change in unrealized impairments of NDT securities | (429 | ) | — | — | — | — | (429 | ) | ||||||||||||||||
Loss on reacquired debt | 282 | — | — | — | — | 282 | ||||||||||||||||||
Disposition of litigation | (5,141 | ) | — | — | — | — | (5,141 | ) | ||||||||||||||||
Total Adjustments | (943 | ) | — | 21,244 | (650 | ) | — | 19,651 | ||||||||||||||||
Ongoing Earnings (Loss) | $ | 51,264 | $ | 13,079 | $ | 33,901 | $ | (4,102 | ) | $ | (11,510 | ) | $ | 82,632 | ||||||||||
* 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 September 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: | $ | 0.42 | $ | 0.10 | $ | 0.01 | $ | — | $ | (0.05 | ) | $ | 0.48 | |||||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | (0.02 | ) | — | 0.02 | — | — | — | |||||||||||||||||
Net change in unrealized impairments of NDT securities | 0.03 | — | — | — | — | 0.03 | ||||||||||||||||||
Process improvement initiatives | 0.01 | — | — | — | — | 0.01 | ||||||||||||||||||
Strategic alternatives - competitive businesses | — | — | — | — | 0.03 | 0.03 | ||||||||||||||||||
New Mexico gross receipts tax adjustments | 0.01 | — | — | — | — | 0.01 | ||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | — | — | 0.05 | — | 0.05 | ||||||||||||||||||
Total Adjustments | 0.03 | — | 0.02 | 0.05 | 0.03 | 0.13 | ||||||||||||||||||
Ongoing Earnings (Loss) | $ | 0.45 | $ | 0.10 | $ | 0.03 | $ | 0.05 | $ | (0.02 | ) | $ | 0.61 | |||||||||||
Average Diluted Shares Outstanding: | 91,742,267 | |||||||||||||||||||||||
Nine Months Ended September 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: | $ | 0.44 | $ | 0.19 | $ | 0.22 | $ | — | $ | (0.15 | ) | $ | 0.70 | |||||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | (0.03 | ) | — | (0.01 | ) | (0.01 | ) | — | (0.05 | ) | ||||||||||||||
Net change in unrealized impairments of NDT securities | 0.03 | — | — | — | — | 0.03 | ||||||||||||||||||
Process improvement initiatives | 0.03 | — | — | — | — | 0.03 | ||||||||||||||||||
Regulatory Disallowance | 0.12 | 0.03 | — | — | — | 0.15 | ||||||||||||||||||
Strategic alternatives - competitive businesses | — | — | — | — | 0.03 | 0.03 | ||||||||||||||||||
New Mexico gross receipts tax adjustments | 0.01 | — | — | — | — | 0.01 | ||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | — | — | (0.05 | ) | — | (0.05 | ) | ||||||||||||||||
Total Adjustments | 0.16 | 0.03 | (0.01 | ) | (0.06 | ) | 0.03 | 0.15 | ||||||||||||||||
Ongoing Earnings (Loss) | $ | 0.60 | $ | 0.22 | $ | 0.21 | $ | (0.06 | ) | $ | (0.12 | ) | $ | 0.85 | ||||||||||
Average Diluted Shares Outstanding: | 91,980,853 | |||||||||||||||||||||||
* Optim Energy included through August 31, 2011. | ||||||||||||||||||||||||
Quarter Ended September 30, 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: | $ | 0.43 | $ | 0.08 | $ | 0.03 | $ | 0.02 | $ | (0.03 | ) | $ | 0.53 | |||||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | — | — | 0.11 | — | — | 0.11 | ||||||||||||||||||
Net change in unrealized impairments of NDT securities | (0.01 | ) | — | — | — | — | (0.01 | ) | ||||||||||||||||
Total Adjustments | (0.01 | ) | — | 0.11 | — | — | 0.10 | |||||||||||||||||
Ongoing Earnings (Loss) | $ | 0.42 | $ | 0.08 | $ | 0.14 | $ | 0.02 | $ | (0.03 | ) | $ | 0.63 | |||||||||||
Average Diluted Shares Outstanding: | 91,780,931 | |||||||||||||||||||||||
Nine Months Ended September 30, 2010 | ||||||||||||||||||||||||
(earnings per diluted share) | ||||||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Optim Energy (50%) | Corporate and Other | Consolidated | |||||||||||||||||||
GAAP Earnings (Loss) Attributable to PNMR: | $ | 0.57 | $ | 0.14 | $ | 0.14 | $ | (0.04 | ) | $ | (0.12 | ) | $ | 0.69 | ||||||||||
Adjusting items | ||||||||||||||||||||||||
Mark-to-market impact of economic hedges | 0.05 | — | 0.23 | (0.01 | ) | — | 0.27 | |||||||||||||||||
Net change in unrealized impairments of NDT securities | — | — | — | — | — | — | ||||||||||||||||||
Disposition of litigation | (0.06 | ) | — | — | — | — | (0.06 | ) | ||||||||||||||||
Total Adjustments | (0.01 | ) | — | 0.23 | (0.01 | ) | — | 0.21 | ||||||||||||||||
Ongoing Earnings (Loss) | $ | 0.56 | $ | 0.14 | $ | 0.37 | $ | (0.05 | ) | $ | (0.12 | ) | $ | 0.90 | ||||||||||
Average Diluted Shares Outstanding: | 91,813,845 | |||||||||||||||||||||||
Quarter Ended September 30, 2011 | ||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Corporate and Other* | Consolidated | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 38.3 | $ | 8.9 | $ | 0.6 | $ | (4.1 | ) | $ | 43.7 | |||||||||
Interest charges | 18.5 | 7.3 | 0.2 | 5.1 | 31.1 | |||||||||||||||
Income taxes | 25.1 | 5.7 | 0.6 | (5.4 | ) | 26.0 | ||||||||||||||
Depreciation and amortization | 25.1 | 12.7 | 0.3 | 4.3 | 42.4 | |||||||||||||||
EBITDA | 107.0 | 34.6 | 1.7 | (0.1 | ) | 143.2 | ||||||||||||||
GAAP to ongoing adjustments (before tax) | 4.9 | 0.2 | 3.9 | 10.4 | 19.4 | |||||||||||||||
Ongoing EBITDA | $ | 111.9 | $ | 34.8 | $ | 5.6 | $ | 10.3 | $ | 162.6 | ||||||||||
Nine Months Ended September 30, 2011 | ||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Corporate and Other* | Consolidated | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 40.5 | $ | 17.1 | $ | 20.7 | $ | (13.9 | ) | $ | 64.4 | |||||||||
Interest charges | 54.6 | 21.9 | 0.5 | 15.3 | 92.3 | |||||||||||||||
Income taxes | 26.6 | 10.8 | 11.8 | (12.0 | ) | 37.2 | ||||||||||||||
Depreciation and amortization | 71.7 | 33.7 | 1.0 | 12.7 | 119.1 | |||||||||||||||
EBITDA | 193.4 | 83.5 | 34.0 | 2.1 | 313.0 | |||||||||||||||
GAAP to ongoing adjustments (before tax) | 21.8 | 4.6 | (1.5 | ) | (4.8 | ) | 20.1 | |||||||||||||
Ongoing EBITDA | $ | 215.2 | $ | 88.1 | $ | 32.5 | $ | (2.7 | ) | $ | 333.1 | |||||||||
* Corporate & Other segment includes equity in net earnings (loss) of Optim Energy through August 31, 2011. See Schedule 7 for calculation of Optim Energy ongoing EBITDA. | ||||||||||||||||||||
Quarter Ended September 30, 2010 | ||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Corporate and Other* | Consolidated | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 39.1 | $ | 7.3 | $ | 3.6 | $ | (1.4 | ) | $ | 48.6 | |||||||||
Interest charges | 18.0 | 7.7 | 0.4 | 5.2 | 31.3 | |||||||||||||||
Income taxes | 25.9 | 4.7 | 2.2 | (4.0 | ) | 28.8 | ||||||||||||||
Depreciation and amortization | 23.1 | 11.6 | 0.2 | 4.1 | 39.0 | |||||||||||||||
EBITDA | 106.1 | 31.3 | 6.4 | 3.9 | 147.7 | |||||||||||||||
GAAP to ongoing adjustments (before tax) | (1.0 | ) | — | 14.4 | 0.4 | 13.8 | ||||||||||||||
Ongoing EBITDA | $ | 105.1 | $ | 31.3 | $ | 20.8 | $ | 4.3 | $ | 161.5 | ||||||||||
Nine Months Ended September 30, 2010 | ||||||||||||||||||||
PNM Electric | TNMP Electric | First Choice | Corporate and Other* | Consolidated | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 52.2 | $ | 13.1 | $ | 12.7 | $ | (15.0 | ) | $ | 63.0 | |||||||||
Interest charges | 54.5 | 23.5 | 1.1 | 15.4 | 94.5 | |||||||||||||||
Income taxes | 34.7 | 8.5 | 7.4 | (13.2 | ) | 37.4 | ||||||||||||||
Depreciation and amortization | 68.9 | 31.7 | 0.7 | 12.3 | 113.6 | |||||||||||||||
EBITDA | 210.3 | 76.8 | 21.9 | (0.5 | ) | 308.5 | ||||||||||||||
GAAP to ongoing adjustments (before tax) | (3.7 | ) | — | 33.0 | (1.1 | ) | 28.2 | |||||||||||||
Ongoing EBITDA | $ | 206.6 | $ | 76.8 | $ | 54.9 | $ | (1.6 | ) | $ | 336.7 | |||||||||
* Corporate & Other segment includes equity in net earnings (loss) of Optim Energy. See Schedule 7 for calculation of Optim Energy ongoing EBITDA. | ||||||||||||||||||||
Two Months Ended | Eight Months Ended | |||||||
August 31, 2011 | August 31, 2011 | |||||||
(in millions) | ||||||||
GAAP Net Earnings (Loss) | $ | 17.0 | $ | (13.8 | ) | |||
Interest expense | 2.6 | 10.6 | ||||||
Income tax | 0.5 | 0.6 | ||||||
Depreciation and amortization expense | 7.2 | 31.9 | ||||||
Mark-to-market impact of economic hedges | (0.8 | ) | (3.6 | ) | ||||
Purchase accounting amortizations | 3.3 | 14.9 | ||||||
Ongoing Optim Energy EBITDA | 29.8 | 40.6 | ||||||
50 percent of Ongoing EBITDA (PNMR share) | $ | 14.9 | $ | 20.3 | ||||
Quarter Ended | Nine Months Ended | |||||||
September 30, 2010 | September 30, 2010 | |||||||
(in millions) | ||||||||
GAAP Net Earnings (Loss) | $ | 7.6 | $ | (6.8 | ) | |||
Interest expense | 4.7 | 14.0 | ||||||
Income tax | 0.2 | 0.3 | ||||||
Depreciation and amortization expense | 12.4 | 37.3 | ||||||
Mark-to-market impact of economic hedges | 0.9 | (2.2 | ) | |||||
Purchase accounting amortizations | (0.4 | ) | 10.4 | |||||
Ongoing Optim Energy EBITDA | 25.4 | 53.0 | ||||||
50 percent of Ongoing EBITDA (PNMR share) | $ | 12.7 | $ | 26.5 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||
GAAP | Adjustments | Ongoing | GAAP | Adjustments | Ongoing | |||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||
Operating revenues | $ | 1,352,747 | $ | (3,775 | ) | (a) | $ | 1,348,972 | $ | 1,292,865 | $ | 3,646 | (a) | $ | 1,296,511 | |||||||||||
Cost of energy | 582,814 | 17,118 | (b) | 599,932 | 557,238 | (22,058 | ) | (h) | 535,180 | |||||||||||||||||
Gross margin | 769,933 | (20,893 | ) | 749,040 | 735,627 | 25,704 | 761,331 | |||||||||||||||||||
Other operating expenses | 457,454 | (34,481 | ) | (c) | 422,973 | 432,430 | (2,076 | ) | (d) | 430,354 | ||||||||||||||||
Depreciation and amortization | 119,115 | (2,125 | ) | (d) | 116,990 | 113,634 | (2,121 | ) | (d) | 111,513 | ||||||||||||||||
Operating income | 193,364 | 15,713 | 209,077 | 189,563 | 29,901 | 219,464 | ||||||||||||||||||||
Equity in net earnings (loss) of Optim Energy | — | (8,682 | ) | (e) | (8,682 | ) | (5,714 | ) | (1,076 | ) | (a) | (6,790 | ) | |||||||||||||
Net other income (deductions) | 11,619 | 4,473 | (f) | 16,092 | 21,686 | (8,753 | ) | (i) | 12,933 | |||||||||||||||||
Interest charges | (92,251 | ) | — | (92,251 | ) | (94,488 | ) | — | (94,488 | ) | ||||||||||||||||
Earnings before Income Taxes | 112,732 | 11,504 | 124,236 | 111,047 | 20,072 | 131,119 | ||||||||||||||||||||
Income Taxes | 37,206 | 8,666 | (g) | 45,872 | 37,365 | 10,726 | (g) | 48,091 | ||||||||||||||||||
Net Earnings | 75,526 | 2,838 | 78,364 | 73,682 | 9,346 | 83,028 | ||||||||||||||||||||
Earnings Attributable to Valencia Non-controlling Interest | (10,764 | ) | 10,764 | (d) | — | (10,305 | ) | 10,305 | (d) | — | ||||||||||||||||
Preferred Stock Dividend Requirements of Subsidiary | (396 | ) | — | (396 | ) | (396 | ) | — | (396 | ) | ||||||||||||||||
Net Earnings Attributable to PNMR | $ | 64,366 | $ | 13,602 | $ | 77,968 | $ | 62,981 | $ | 19,651 | $ | 82,632 | ||||||||||||||
Net Earnings Attributable to PNMR per Common Share: | ||||||||||||||||||||||||||
Basic | $ | 0.70 | $ | 0.15 | $ | 0.85 | $ | 0.69 | $ | 0.21 | $ | 0.90 | ||||||||||||||
Diluted | $ | 0.70 | $ | 0.15 | $ | 0.85 | $ | 0.69 | $ | 0.21 | $ | 0.90 | ||||||||||||||
Average common shares outstanding: | ||||||||||||||||||||||||||
Basic | 91,465 | 91,556 | ||||||||||||||||||||||||
Diluted | 91,981 | 91,814 | ||||||||||||||||||||||||
(a) Mark-to-market impact of economic hedges | ||||||||||||||||||||||||||
(b) Mark-to-market impact of economic hedges $2,094; Consolidation of Valencia $15,024 | ||||||||||||||||||||||||||
(c) Consolidation of Valencia $(2,137); Regulatory disallowances $(21,402); Strategic alternatives - competitive business $(3,918); Process improvement initiatives $(4,590); New Mexico gross receipts tax adjustments $(2,434) | ||||||||||||||||||||||||||
(d) Consolidation of Valencia | ||||||||||||||||||||||||||
(e) Equity in net earnings (loss) of Optim Energy $(6,898); Mark-to-market impact of economic hedges $(1,784) | ||||||||||||||||||||||||||
(f) Net change in unrealized impairments of NDT securities | ||||||||||||||||||||||||||
(g) Net taxes on adjusting items | ||||||||||||||||||||||||||
(h) Mark-to-market impact of economic hedges $(36,560); Consolidation of Valencia $14,502 | ||||||||||||||||||||||||||
(i) Disposition of litigation $(8,509); Net change in unrealized impairment of NDT securities $(710); Loss on reaquired debt $466. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Electric Operating Revenues | $ | 549,498 | $ | 503,653 | $ | 1,352,747 | $ | 1,292,865 | |||||||
Operating Expenses: | |||||||||||||||
Cost of energy | 250,854 | 215,169 | 582,814 | 557,238 | |||||||||||
Administrative and general | 69,755 | 71,193 | 197,016 | 196,398 | |||||||||||
Energy production costs | 39,730 | 42,306 | 135,510 | 148,002 | |||||||||||
Regulatory disallowances | — | — | 21,402 | — | |||||||||||
Depreciation and amortization | 42,370 | 38,980 | 119,115 | 113,634 | |||||||||||
Transmission and distribution costs | 17,925 | 15,012 | 52,962 | 44,574 | |||||||||||
Taxes other than income taxes | 20,580 | 15,585 | 50,564 | 43,456 | |||||||||||
Total operating expenses | 441,214 | 398,245 | 1,159,383 | 1,103,302 | |||||||||||
Operating income | 108,284 | 105,408 | 193,364 | 189,563 | |||||||||||
Other Income and Deductions: | |||||||||||||||
Interest income | 3,748 | 4,499 | 12,010 | 14,608 | |||||||||||
Gains (losses) on investments held by NDT | (4,109 | ) | 2,206 | 7,688 | 2,606 | ||||||||||
Other income | 1,755 | 1,963 | 3,559 | 13,333 | |||||||||||
Equity in net earnings (loss) of Optim Energy | — | 2,495 | — | (5,714 | ) | ||||||||||
Other deductions | (4,685 | ) | (3,848 | ) | (11,638 | ) | (8,861 | ) | |||||||
Net other income (deductions) | (3,291 | ) | 7,315 | 11,619 | 15,972 | ||||||||||
Interest Charges | 31,124 | 31,317 | 92,251 | 94,488 | |||||||||||
Earnings before Income Taxes | 73,869 | 81,406 | 112,732 | 111,047 | |||||||||||
Income Taxes | 25,964 | 28,813 | 37,206 | 37,365 | |||||||||||
Net Earnings | 47,905 | 52,593 | 75,526 | 73,682 | |||||||||||
(Earnings) Attributable to Valencia Non-controlling Interest | (4,111 | ) | (3,909 | ) | (10,764 | ) | (10,305 | ) | |||||||
Preferred Stock Dividend Requirements of Subsidiary | (132 | ) | (132 | ) | (396 | ) | (396 | ) | |||||||
Net Earnings Attributable to PNMR | $ | 43,662 | $ | 48,552 | $ | 64,366 | $ | 62,981 | |||||||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||||||
Basic | $ | 0.48 | $ | 0.53 | $ | 0.70 | $ | 0.69 | |||||||
Diluted | $ | 0.48 | $ | 0.53 | $ | 0.70 | $ | 0.69 | |||||||
Dividends Declared per Common Share | $ | 0.125 | $ | 0.125 | $ | 0.375 | $ | 0.375 |
September 30, 2011 | December 31, 2010 | ||||||
(In thousands) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 22,298 | $ | 15,404 | |||
Accounts receivable, net of allowance for uncollectible accounts of $1,645 and $11,178 | 107,637 | 97,245 | |||||
Unbilled revenues | 47,793 | 71,453 | |||||
Other receivables | 46,955 | 60,562 | |||||
Materials, supplies, and fuel stock | 53,092 | 52,479 | |||||
Regulatory assets | 28,693 | 36,292 | |||||
Commodity derivative instruments | 3,716 | 15,999 | |||||
Income taxes receivable | 99,506 | 97,450 | |||||
Current portion of accumulated deferred income taxes | 886 | 886 | |||||
Current assets of business unit held for sale | 166,119 | — | |||||
Other current assets | 49,043 | 96,110 | |||||
Total current assets | 625,738 | 543,880 | |||||
Other Property and Investments: | |||||||
Investment in PVNGS lessor notes | 79,390 | 103,871 | |||||
Investments held by NDT | 157,001 | 156,922 | |||||
Other investments | 14,639 | 18,791 | |||||
Non-utility property, net of accumulated depreciation of $125 and $2,307 | 5,139 | 7,333 | |||||
Total other property and investments | 256,169 | 286,917 | |||||
Utility Plant: | |||||||
Plant in service and plant held for future use | 4,998,685 | 4,860,614 | |||||
Less accumulated depreciation and amortization | 1,686,971 | 1,626,693 | |||||
3,311,714 | 3,233,921 | ||||||
Construction work in progress | 159,918 | 137,622 | |||||
Nuclear fuel, net of accumulated amortization of $36,722 and $26,247 | 78,218 | 72,901 | |||||
Net utility plant | 3,549,850 | 3,444,444 | |||||
Deferred Charges and Other Assets: | |||||||
Regulatory assets | 475,937 | 502,467 | |||||
Goodwill | 278,297 | 321,310 | |||||
Other intangible assets, net of accumulated amortization of none and $5,414 | — | 26,425 | |||||
Commodity derivative instruments | 247 | 5,264 | |||||
Non-current assets of business unit held for sale | 101,059 | — | |||||
Other deferred charges | 85,343 | 94,376 | |||||
Total deferred charges and other assets | 940,883 | 949,842 | |||||
$ | 5,372,640 | $ | 5,225,083 |
September 30, 2011 | December 31, 2010 | ||||||
(In thousands, except share information) | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Short-term debt | $ | 289,000 | $ | 222,000 | |||
Current installments of long-term debt | 2,252 | 2,252 | |||||
Accounts payable | 71,949 | 95,969 | |||||
Accrued interest and taxes | 82,636 | 47,783 | |||||
Regulatory liabilities | 429 | 724 | |||||
Commodity derivative instruments | 1,746 | 31,407 | |||||
Dividends declared | 10,966 | 11,565 | |||||
Liability for purchase of Series A Preferred Stock | 73,475 | — | |||||
Current liabilities of business unit held for sale | 103,915 | — | |||||
Other current liabilities | 76,281 | 108,424 | |||||
Total current liabilities | 712,649 | 520,124 | |||||
Long-term Debt | 1,564,077 | 1,563,595 | |||||
Deferred Credits and Other Liabilities: | |||||||
Accumulated deferred income taxes | 582,485 | 540,106 | |||||
Accumulated deferred investment tax credits | 16,350 | 18,089 | |||||
Regulatory liabilities | 363,087 | 342,465 | |||||
Asset retirement obligations | 77,290 | 76,637 | |||||
Accrued pension liability and postretirement benefit cost | 227,401 | 270,172 | |||||
Commodity derivative instruments | 1,913 | 12,831 | |||||
Non-current liabilities of business unit held for sale | 17,596 | — | |||||
Other deferred credits | 123,054 | 147,616 | |||||
Total deferred credits and other liabilities | 1,409,176 | 1,407,916 | |||||
Total liabilities | 3,685,902 | 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 none and 477,800 shares) | — | 100,000 | |||||
PNMR common stockholders’ equity: | |||||||
Common stock outstanding (no par value, 120,000,000 shares authorized: issued and outstanding 86,673,174 shares) | 1,318,539 | 1,290,465 | |||||
Accumulated other comprehensive income (loss), net of income taxes | (72,913 | ) | (68,666 | ) | |||
Retained earnings | 345,614 | 314,943 | |||||
Total PNMR common stockholders’ equity | 1,591,240 | 1,536,742 | |||||
Non-controlling interest in Valencia | 83,969 | 85,177 | |||||
Total equity | 1,675,209 | 1,721,919 | |||||
$ | 5,372,640 | $ | 5,225,083 | ||||
Nine Months Ended September 30, | |||||||
2011 | 2010 | ||||||
(In thousands) | |||||||
Cash Flows From Operating Activities: | |||||||
Net earnings | $ | 75,526 | $ | 73,682 | |||
Adjustments to reconcile net earnings to net cash flows from operating activities: | |||||||
Depreciation and amortization | 151,984 | 138,013 | |||||
PVNGS firm-sales contract revenue | (2,558 | ) | (43,535 | ) | |||
Bad debt expense | 20,120 | 21,023 | |||||
Deferred income tax expense | 43,167 | 23,276 | |||||
Equity in net (earnings) loss of Optim Energy | — | 5,714 | |||||
Net unrealized (gains) losses on derivatives | (5,869 | ) | 41,649 | ||||
Realized (gains) on investments held by NDT | (7,688 | ) | (2,606 | ) | |||
Stock based compensation expense | 4,302 | 2,525 | |||||
Regulatory disallowances | 21,402 | — | |||||
Other, net | 3,549 | 3,820 | |||||
Changes in certain assets and liabilities: | |||||||
Accounts receivable and unbilled revenues | (88,462 | ) | (44,710 | ) | |||
Materials, supplies, and fuel stock | (985 | ) | (2,557 | ) | |||
Other current assets | (2,901 | ) | (54,654 | ) | |||
Other assets | (924 | ) | (4,781 | ) | |||
Accounts payable | 13,781 | (9,380 | ) | ||||
Accrued interest and taxes | 33,049 | 141,478 | |||||
Other current liabilities | (12,919 | ) | (47,201 | ) | |||
Other liabilities | (43,691 | ) | (25,198 | ) | |||
Net cash flows from operating activities | 200,883 | 216,558 | |||||
Cash Flows From Investing Activities: | |||||||
Additions to utility and non-utility plant | (236,275 | ) | (181,340 | ) | |||
Proceeds from sales of investments held by NDT | 121,202 | 57,098 | |||||
Purchases of investments held by NDT | (122,174 | ) | (59,395 | ) | |||
Return of principal on PVNGS lessor notes | 32,274 | 29,851 | |||||
Investments in Optim Energy | — | (17,610 | ) | ||||
Other, net | 145 | 636 | |||||
Net cash flows from investing activities | (204,828 | ) | (170,760 | ) |
Nine Months Ended September 30, | |||||||
2011 | 2010 | ||||||
(In thousands) | |||||||
Cash Flows From Financing Activities: | |||||||
Short-term borrowings (repayments), net | 67,000 | (6,000 | ) | ||||
Long-term borrowings | 50,000 | 403,845 | |||||
Repayment of long-term debt | (50,000 | ) | (403,845 | ) | |||
Proceeds from stock option exercise | 2,570 | 1,117 | |||||
Purchases to satisfy awards of common stock | (5,288 | ) | (2,804 | ) | |||
Excess tax (shortfall) from stock-based payment arrangements | — | (264 | ) | ||||
Dividends paid | (34,690 | ) | (34,691 | ) | |||
Equity transactions with Valencia’s owner | (11,972 | ) | (11,149 | ) | |||
Payments received on PVNGS firm-sales contracts | 2,558 | 22,872 | |||||
Proceeds from transmission interconnection agreements | 1,246 | — | |||||
Repayment of transmission interconnection agreements | (4,637 | ) | — | ||||
Debt issuance costs and other | (2,486 | ) | (4,423 | ) | |||
Net cash flows from financing activities | 14,301 | (35,342 | ) | ||||
Change in Cash and Cash Equivalents | 10,356 | 10,456 | |||||
Cash and Cash Equivalents at Beginning of Period | 15,404 | 14,641 | |||||
Cash and Cash Equivalents at End of Period | $ | 25,760 | $ | 25,097 | |||
Supplemental Cash Flow Disclosures: | |||||||
Interest paid, net of capitalized interest | $ | 64,130 | $ | 67,824 | |||
Income taxes paid (refunded), net | $ | (3,744 | ) | $ | (98,792 | ) | |
Supplemental schedule of noncash financing activities: | |||||||
Liability incurred for purchase of Convertible Preferred Stock, Series A | $ | 73,475 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
(In millions, except customers) | |||||||||||||||||||||||
Residential | $ | 124.8 | $ | 111.7 | $ | 13.1 | $ | 291.4 | $ | 275.3 | $ | 16.1 | |||||||||||
Commercial | 115.7 | 107.8 | 7.9 | 287.8 | 272.4 | 15.4 | |||||||||||||||||
Industrial | 28.0 | 23.7 | 4.3 | 71.3 | 64.7 | 6.6 | |||||||||||||||||
Public authority | 7.4 | 6.8 | 0.6 | 17.8 | 16.2 | 1.6 | |||||||||||||||||
Other retail | 2.7 | 2.4 | 0.3 | 7.3 | 7.4 | (0.1 | ) | ||||||||||||||||
Transmission | 14.3 | 12.2 | 2.1 | 35.3 | 31.0 | 4.3 | |||||||||||||||||
Firm requirements wholesale | 8.1 | 8.3 | (0.2 | ) | 25.1 | 23.4 | 1.7 | ||||||||||||||||
Other sales for resale | 19.8 | 32.5 | (12.7 | ) | 57.4 | 91.7 | (34.3 | ) | |||||||||||||||
Mark-to-market activity | 3.0 | (1.1 | ) | 4.1 | 3.8 | (4.2 | ) | 8.0 | |||||||||||||||
$ | 323.8 | $ | 304.3 | $ | 19.5 | $ | 797.2 | $ | 777.9 | $ | 19.3 | ||||||||||||
Average retail customers (thousands) | 503.8 | 501.8 | 2.0 | 503.7 | 501.4 | 2.3 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||
(Gigawatt hours) | |||||||||||||||||
Residential | 1,006.0 | 967.9 | 38.1 | 2,587.2 | 2,570.6 | 16.6 | |||||||||||
Commercial | 1,130.0 | 1,140.2 | (10.2 | ) | 3,060.2 | 3,045.9 | 14.3 | ||||||||||
Industrial | 429.4 | 371.3 | 58.1 | 1,187.8 | 1,085.1 | 102.7 | |||||||||||
Public authority | 84.1 | 80.5 | 3.6 | 214.1 | 198.3 | 15.8 | |||||||||||
Firm requirements wholesale | 154.6 | 165.7 | (11.1 | ) | 481.0 | 506.0 | (25.0 | ) | |||||||||
Other sales for resale | 580.4 | 546.9 | 33.5 | 1,709.9 | 1,632.3 | 77.6 | |||||||||||
3,384.5 | 3,272.5 | 112.0 | 9,240.2 | 9,038.2 | 202.0 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
(In millions, except consumers) | |||||||||||||||||||||||
Residential | $ | 34.5 | $ | 27.8 | $ | 6.7 | $ | 77.8 | $ | 66.8 | $ | 11.0 | |||||||||||
Commercial | 21.7 | 20.2 | 1.5 | 62.0 | 57.4 | 4.6 | |||||||||||||||||
Industrial | 3.3 | 3.0 | 0.3 | 9.5 | 9.0 | 0.5 | |||||||||||||||||
Other | 7.5 | 10.2 | (2.7 | ) | 31.5 | 28.8 | 2.7 | ||||||||||||||||
$ | 67.0 | $ | 61.2 | $ | 5.8 | $ | 180.8 | $ | 162.0 | $ | 18.8 | ||||||||||||
Average consumers (thousands) (1) | 232.2 | 229.9 | 2.3 | 231.3 | 229.2 | 2.1 |
(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 66,273 and 73,873 consumers for the three months ended September 30, 2011 and 2010, and 67,549 and 76,611 for the nine months ended September 30, 2011 and 2010, who have chosen First Choice as their REP. These consumers are also included as customers in the First Choice segment. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||
(Gigawatt hours(1)) | |||||||||||||||||
Residential | 1,015.0 | 927.6 | 87.4 | 2,319.4 | 2,182.8 | 136.6 | |||||||||||
Commercial | 703.7 | 671.9 | 31.8 | 1,825.7 | 1,736.8 | 88.9 | |||||||||||
Industrial | 675.2 | 580.3 | 94.9 | 1,931.1 | 1,674.2 | 256.9 | |||||||||||
Other | 28.7 | 26.8 | 1.9 | 82.5 | 77.3 | 5.2 | |||||||||||
2,422.6 | 2,206.6 | 216.0 | 6,158.7 | 5,671.1 | 487.6 |
(1) | The GWh sales reported above include 324.1 and 325.9 GWhs for the three months ended September 30, 2011 and 2010, and 775.3 and 822.3 GWhs for the nine months ended September 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. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
(In millions, except customers) | |||||||||||||||||||||||
Residential | $ | 104.2 | $ | 98.4 | $ | 5.8 | $ | 241.9 | $ | 248.4 | $ | (6.5 | ) | ||||||||||
Commercial | 62.5 | 46.1 | 16.4 | 152.2 | 122.5 | 29.7 | |||||||||||||||||
Other | 4.3 | 5.2 | (0.9 | ) | 11.4 | 13.1 | (1.7 | ) | |||||||||||||||
$ | 171.0 | $ | 149.7 | $ | 21.3 | $ | 405.5 | $ | 384.0 | $ | 21.5 | ||||||||||||
Actual customers (thousands) (1,2) | 223.1 | 215.3 | 7.8 | 223.1 | 215.3 | 7.8 |
(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. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||
(Gigawatt hours) (1) | |||||||||||||||||
Residential | 812.8 | 732.0 | 80.8 | 1,871.5 | 1,831.3 | 40.2 | |||||||||||
Commercial | 569.5 | 410.8 | 158.7 | 1,397.8 | 1,038.2 | 359.6 | |||||||||||
1,382.3 | 1,142.8 | 239.5 | 3,269.3 | 2,869.5 | 399.8 |
(1) | See note above in the TNMP Electric segment discussion about the impact of TECA. |