2014 Earnings Guidance Narrowed, Conference
Call Set for 11 a.m. Eastern Today
PNM Resources (NYSE: PNM)
PNM Resources (In millions, except
EPS)
Q2 2014
Q2 2013 YTD 2014
YTD 2013 GAAP net earnings
$29.1 $27.7
$41.6 $38.3
GAAP diluted EPS
$0.36 $0.34
$0.52 $0.48
Ongoing net
earnings $31.5 $30.3 $45.7 $45.1
Ongoing diluted EPS
$0.39 $0.38 $0.57 $0.56
PNM Resources (NYSE: PNM) today released the company’s 2014
second quarter earnings results. In addition, management narrowed
its 2014 consolidated ongoing earnings guidance to a range of $1.44
to $1.51 per diluted share. The midpoint of the 2014 consolidated
ongoing earnings guidance range remains at $1.47.
“The company remained on track in the second quarter,
successfully navigating the challenges caused by lingering economic
headwinds in New Mexico, while benefitting from steady growth in
Texas,” said Pat Vincent-Collawn, PNM Resources’ chairman,
president and CEO. “PNM also filed with the NM Public Regulation
Commission a comprehensive Integrated Resource Plan developed
through a year of research and collaboration with stakeholders. The
IRP incorporates our plan to retire 2 units of the San Juan
Generating Station to meet federal haze regulations, and helps the
company move toward a more balanced fuel portfolio, in part by
adding more renewable energy resources.”
SEGMENT REPORTING OF 2014 SECOND QUARTER AND YEAR TO DATE
EARNINGS
PNM – a vertically
integrated electric utility in New Mexico with distribution,
transmission and generation assets.
PNM (In millions, except EPS)
Q2 2014
Q2 2013 YTD 2014
YTD 2013 GAAP net earnings
$20.2 $26.0
$27.8 $37.4
GAAP diluted EPS
$0.25 $0.32
$0.35 $0.46
Ongoing net
earnings $22.5 $24.3 $31.5 $38.4
Ongoing diluted EPS
$0.28 $0.30 $0.39 $0.48
- PNM’s ongoing earnings benefitted from
rate relief, higher market prices for Palo Verde unit 3, reduced
outage expenses, and off system sales. These gains partially offset
a decline in load, weather, and tax expense for R&D credits
resulting from IRS exam settlements which was offset in Corporate
and Other.
TNMP – an electric
transmission and distribution utility in Texas.
TNMP (In millions, except EPS)
Q2 2014
Q2 2013 YTD 2014
YTD 2013 GAAP net earnings
$9.5 $8.3
$16.3 $12.1
GAAP diluted EPS
$0.12 $0.10
$0.20 $0.15
Ongoing net earnings
$9.6 $8.3 $16.4 $12.1
Ongoing diluted EPS $0.12 $0.10 $0.20
$0.15
- TNMP’s ongoing earnings benefitted from
rate relief and a savings in O & M expenses.
Corporate and Other – a
segment that reflects costs at the PNM Resources holding company,
mainly comprised of interest expense related to debt.
Corporate and Other (In millions,
except EPS)
Q2 2014
Q2 2013 YTD 2014
YTD 2013 GAAP net earnings (loss)
($0.6) ($6.7)
($2.5) ($11.2)
GAAP diluted
EPS ($0.01)
($0.08) ($0.03) ($0.14)
Ongoing net earnings (loss) ($0.6) ($2.4) ($2.2) ($5.4)
Ongoing diluted EPS ($0.01) ($0.02) ($0.02) ($0.07)
- Corporate and Other benefitted from
lower interest expense and the reversal of a tax reserve for
R&D credits resulting from IRS exam settlements, which was
offset in PNM. These benefits at Corporate and Other were offset by
expired tax credit investments at the holding company.
Financial materials are available at
http://www.pnmresources.com/investors/results.cfm.
SECOND QUARTER CONFERENCE CALL: 11 AM EASTERN
TODAY
PNM Resources will discuss second quarter earnings results
during a live conference call and webcast today at 11 a.m.
Eastern. Speaking on the call will be Pat Vincent-Collawn, PNM
Resources chairman, president and CEO, and Chuck Eldred, PNM
Resources executive vice president and CFO.
A live webcast of the call will be archived at
http://www.pnmresources.com/investors/events.cfm. Listeners are
encouraged to visit the website at least 30 minutes before the
event to register, download and install any necessary audio
software. Investors and analysts can participate in the live
conference call by dialing (877) 377-7098 or (631) 291-4547 five to
10 minutes prior to the event and referencing “the PNM Resources
second quarter conference call.”
A telephone replay will be available at 2 p.m. Eastern until
midnight August 15 by dialing (855) 859-2056 or (404) 537-3406 and
using the confirmation code 70452858. Supporting material for PNM
Resources’ earnings announcements can be viewed and downloaded at
http://www.pnmresources.com/investors/results.cfm.
Background:
PNM Resources (NYSE: PNM) is an energy holding company based in
Albuquerque, N.M., with 2013 consolidated operating revenues of
$1.4 billion. Through its regulated utilities, PNM and TNMP, PNM
Resources has approximately 2,572 megawatts of generation capacity
and provides electricity to more than 746,000 homes and businesses
in New Mexico and Texas. For more information, visit the company's
website at www.PNMResources.com
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
Statements made in this news release that relate to future
events or PNM Resources’ (“PNMR”), Public Service Company of New
Mexico’s (“PNM”), or Texas-New Mexico Power Company’s (“TNMP”)
(collectively, the “Company”) expectations, projections, estimates,
intentions, goals, targets, and strategies are made pursuant to the
Private Securities Litigation Reform Act of 1995. Readers are
cautioned that all forward-looking statements are based upon
current expectations and estimates. PNMR, PNM, and TNMP assume no
obligation to update this information. Because actual results may
differ materially from those expressed or implied by these
forward-looking statements, PNMR, PNM, and TNMP caution readers not
to place undue reliance on these statements. PNMR's, PNM's, and
TNMP's business, financial condition, cash flow, and operating
results are influenced by many factors, which are often beyond
their control that can cause actual results to differ from those
expressed or implied by the forward-looking statements. For a
discussion of risk factors and other important factors affecting
forward-looking statements, please see the Company’s Form 10-K and
Form 10-Q filings with the Securities and Exchange Commission,
which factors are specifically incorporated by reference
herein.
Non-GAAP Financial Measures
The Company uses ongoing earnings and ongoing earnings per
diluted share (or ongoing diluted earnings per share) to evaluate
the operations of the Company and to establish goals for management
and employees. While the Company believes these financial measures
are appropriate and useful for investors, they are not measures
presented in accordance with generally accepted accounting
principles in the U.S. (“GAAP”). The Company does not intend for
these measures, or any piece of these measures, to represent any
financial measure as defined by GAAP. Furthermore, the Company’s
calculations of these measures as presented may or may not be
comparable to similarly titled measures used by other companies.
The Company uses ongoing earnings guidance to provide investors
with management's expectations of ongoing financial performance
over the period presented. While the Company believes ongoing
earnings guidance is an appropriate measure, it is not a measure
presented in accordance with GAAP. The Company does not intend for
ongoing earnings guidance to represent an expectation of net
earnings as defined by GAAP. Management is generally not able to
estimate the impact of the reconciling items between ongoing
earnings guidance and forecasted GAAP net earnings, nor their
probable impact on GAAP net earnings; therefore, management is
generally not able to provide a corresponding GAAP equivalent for
earnings guidance.
PNM Resources
Schedule 1
Reconciliation of GAAP to Ongoing
Earnings
(Preliminary and Unaudited)
PNM TNMP
Corporateand Other
Consolidated (in thousands)
Three Months
Ended June 30, 2014
GAAP Net Earnings (Loss) Attributable to PNMR: $
20,214 $ 9,534 $ (607 )
$ 29,141 Adjusting items, net of income tax effects
Mark-to-market impact of economic hedges1 258 — — 258 Net change in
unrealized impairments of available-for-sale securities2 (55 ) — —
(55 ) Process improvement initiatives3 1,115 34 — 1,149 San Juan
Coal Company audit arbitration4 1,015 — —
1,015 Total Adjustments 2,333 34 —
2,367
Ongoing Earnings (Loss) $ 22,547
$ 9,568 $ (607 )
$ 31,508
Six Months Ended
June 30, 2014
GAAP Net Earnings (Loss) Attributable to PNMR: $
27,757 $ 16,336 $ (2,484
) $ 41,609 Adjusting items, net of income tax
effects Mark-to-market impact of economic hedges5 1,931 — — 1,931
Net change in unrealized impairments of available-for-sale
securities2 (274 ) — — (274 ) New Mexico corporate income tax rate
change6 — — 241 241 Process improvement initiatives3 1,115 34 —
1,149 San Juan Coal Company audit arbitration4 1,015 —
— 1,015 Total Adjustments 3,787 34
241 4,062
Ongoing Earnings (Loss)
$ 31,544 $ 16,370
$ (2,243 ) $ 45,671
2014 income tax effects calculated using tax rates of 35.00%
for TNMP and 39.42% for other segments. The impacts of
adjusting items are reflected on the GAAP Condensed Consolidated
Statement of Earnings as follows: 1Pre-tax7 impacts reflected in
"Electric Operating Revenues" ($442 thousand reduction) and "Cost
of energy" ($16 thousand reduction) 2Pre-tax7 impact reflected in
"Gains on available-for-sale securities" 3Pre-tax7 impact reflected
in "Administrative and general" 4Pre-tax7 impact reflected in "Cost
of energy" 5Pre-tax7 impacts reflected in "Electric Operating
Revenues" ($3,365 thousand reduction) and "Cost of energy" ($177
thousand reduction) 6Impact reflected in "Income Taxes" 7Tax
impacts reflected in "Income Taxes"
PNM Resources
Schedule 2
Reconciliation of GAAP to Ongoing
Earnings
(Preliminary and Unaudited)
PNM TNMP
Corporateand Other
Consolidated (in thousands)
Three Months
Ended June 30, 2013
GAAP Net Earnings (Loss) Attributable to PNMR: $
25,992 $ 8,339 $ (6,653 )
$ 27,678 Adjusting items, net of income tax effects
Loss on reacquired debt1 — — 706 706 Mark-to-market impact of
economic hedges2 (1,871 ) — — (1,871 ) Net change in unrealized
impairments of available-for-sale securities3 228 — — 228 New
Mexico corporate income tax rate change4 — — 1,234 1,234 State tax
credit impairment4 — — 2,362 2,362
Total Adjustments (1,643 ) — 4,302 2,659
Ongoing Earnings (Loss) $ 24,349
$ 8,339 $ (2,351 )
$ 30,337
Six Months Ended
June 30, 2013
GAAP Net Earnings (Loss) Attributable to PNMR: $
37,429 $ 12,065 $ (11,190
) $ 38,304 Adjusting items, net of income tax
effects Loss on reacquired debt1 — — 706 706 Mark-to-market impact
of economic hedges5 1,091 — — 1,091 Net change in unrealized
impairments of available-for-sale securities3 (134 ) — — (134 ) New
Mexico corporate income tax rate change4 — — 1,234 1,234 State tax
credit impairment4 — — 3,880 3,880
Total Adjustments 957 — 5,820 6,777
Ongoing Earnings (Loss) $ 38,386
$ 12,065 $ (5,370 )
$ 45,081 2013 income tax effects
calculated using tax rates of 35.00% for TNMP and 39.59% for all
other segments. The impacts of adjusting items are reflected
on the GAAP Condensed Consolidated Statement of Earnings as
follows: 1Pre-tax6 impact reflected in "Other (deductions)"
2Pre-tax6 impacts reflected in "Electric Operating Revenues"
($3,373 thousand increase) and "Cost of energy" ($276 thousand
increase) 3Pre-tax6 impact reflected in "Gains on
available-for-sale securities" 4Impact reflected in "Income Taxes"
5Pre-tax6 impacts reflected in "Electric Operating Revenues"
($2,547 thousand reduction) and "Cost of energy" ($742 thousand
reduction) 6Tax impacts reflected in "Income Taxes"
PNM Resources
Schedule 3
Reconciliation of GAAP to Ongoing
Earnings Per Diluted Share
(Preliminary and Unaudited)
PNM TNMP
Corporateand Other
Consolidated (per diluted share)
Three Months
Ended June 30, 2014
GAAP Net Earnings (Loss) Attributable to PNMR: $
0.25 $ 0.12
$ (0.01 ) $ 0.36 Adjusting items
Mark-to-market impact of economic hedges — — — — Net change in
unrealized impairments of available-for-sale securities — — — —
Process improvement initiatives 0.01 — — 0.01 San Juan Coal Company
audit arbitration 0.01 — — 0.01 Total
Adjustments 0.02 — — 0.02
Ongoing
Earnings (Loss) $ 0.28
$ 0.12 $ (0.01
) $ 0.39 Average Diluted Shares
Outstanding: 80,227,063
Six Months Ended
June 30, 2014
GAAP Net Earnings (Loss) Attributable to PNMR: $
0.35 $ 0.20 $ (0.03 )
$ 0.52 Adjusting items Mark-to-market impact of
economic hedges 0.02 — — 0.02 Net change in unrealized impairments
of available-for-sale securities — — — — New Mexico corporate
income tax rate change — — — — Process improvement initiatives 0.01
— — 0.01 San Juan Coal Company audit arbitration 0.01 —
— 0.01 Total Adjustments 0.04 —
— 0.04
Ongoing Earnings (Loss) $
0.39 $ 0.20
$ (0.02 ) $ 0.57 Average
Diluted Shares Outstanding: 80,307,180 Tables may not appear
visually accurate due to rounding.
PNM Resources
Schedule 4
Reconciliation of GAAP to Ongoing
Earnings Per Diluted Share
(Preliminary and Unaudited)
PNM TNMP
Corporateand Other
Consolidated (per diluted share)
Three Months
Ended June 30, 2013
GAAP Net Earnings (Loss) Attributable to PNMR: $
0.32 $ 0.10
$ (0.08 ) $ 0.34 Adjusting items
Loss on reacquired debt — — 0.01 0.01 Mark-to-market impact of
economic hedges (0.02 ) — — (0.02 ) Net change in unrealized
impairments of NDT securities — — — — New Mexico corporate income
tax rate change — — 0.02 0.02 State tax credit impairment —
— 0.03 0.03 Total Adjustments (0.02 ) —
0.06 0.04
Ongoing Earnings (Loss) $
0.30 $ 0.10
$ (0.02 ) $ 0.38
Average Diluted Shares Outstanding: 80,454,538
Six Months Ended
June 30, 2013
GAAP Net Earnings (Loss) Attributable to PNMR: $
0.46 $ 0.15 $ (0.14 )
$ 0.48 Adjusting items Loss on reacquired debt — —
0.01 0.01 Mark-to-market impact of economic hedges 0.01 — — 0.01
Net change in unrealized impairments of NDT securities — — — — New
Mexico corporate income tax rate change — — 0.02 0.02 State tax
credit impairment — — 0.04 0.04 Total
Adjustments 0.01 — 0.07 0.08
Ongoing
Earnings (Loss) $ 0.48
$ 0.15 $ (0.07
) $ 0.56 Average Diluted Shares
Outstanding: 80,517,361 Tables may not appear visually
accurate due to rounding.
PNM Resources
Schedule 5
Condensed Consolidated Statement of
Earnings
(Preliminary and Unaudited)
Three MonthsEnded June
30,
Six Months EndedJune 30,
2014 2013 2014
2013 (In thousands, except per share amounts)
Electric
Operating Revenues $ 346,160 $ 347,599
$ 675,057 $ 665,263
Operating
Expenses: Cost of energy 109,419 105,659 222,033 210,365
Administrative and general 45,235 43,139 89,093 87,829 Energy
production costs 45,846 46,831 93,134 90,404 Depreciation and
amortization 42,163 41,639 84,130 82,446 Transmission and
distribution costs 16,068 17,148 32,974 33,443 Taxes other than
income taxes 16,133 15,316 33,644 32,205
Total operating expenses 274,864 269,732
555,008 536,692 Operating income 71,296 77,867
120,049 128,571
Other Income and
Deductions: Interest income 2,040 2,833 4,158 5,467 Gains on
available-for-sale securities 4,699 3,217 7,272 4,747 Other income
3,180 2,610 4,754 4,323 Other (deductions) (2,169 ) (4,194 ) (5,102
) (7,546 ) Net other income and deductions 7,750 4,466
11,082 6,991
Interest Charges 29,972
30,616 59,506 61,914
Earnings before
Income Taxes 49,074 51,717 71,625 73,648
Income Taxes
15,893 20,334 22,313 28,303
Net
Earnings 33,181 31,383 49,312 45,345
(Earnings) Attributable
to Valencia Non-controlling Interest (3,908 ) (3,573 ) (7,439 )
(6,777 )
Preferred Stock Dividend Requirements of Subsidiary
(132 ) (132 ) (264 ) (264 )
Net Earnings Attributable to
PNMR $ 29,141 $ 27,678 $
41,609 $ 38,304
Net Earnings Attributable
to PNMR per Common Share: Basic $ 0.37 $ 0.35 $
0.52 $ 0.48 Diluted $ 0.36 $ 0.34 $ 0.52 $ 0.48
Dividends Declared per Common Share $ 0.185 $ 0.165 $ 0.370
$ 0.330
PNM ResourcesAnalystsJimmie Blotter,
505-241-2227MediaPahl Shipley, 505-241-2782
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