(Source: Business Wire)
PNM Resources (NYSE: PNM) today reported unaudited 2009 second-quarter consolidated GAAP losses of $2.1 million, or $0.02 per diluted share, compared with losses of $143.5 million, or $1.76 per diluted share, in 2008. Quarterly GAAP losses in 2009 reflect non-recurring items that had a net negative impact of $21.5 million. In 2008, GAAP losses reflected non-recurring items that had a net negative impact of $135.7 million.
Unaudited, consolidated ongoing earnings were $19.4 million, or $0.21 per diluted share, compared with ongoing losses of $7.8 million, or $0.10 per diluted share, in 2008. Reconciliations of GAAP to non-GAAP measures are shown in the attached schedules 1-8.
The 2008 implementation of new electric rates and a fuel and purchased power cost adjustment clause for PNM Electric, coupled with strong performance at First Choice Power, drove quarterly performance.
"Our utility operations are seeing some signs that the impact of the current recession is lessening," said Jeff Sterba, PNM Resources chairman and CEO. "Retail sales were hurt by unseasonably cool weather in New Mexico, but weather-adjusted load did not deteriorate at the pace we saw last quarter. And in Texas, overall electricity consumption rebounded a bit for TNMP."
Adjusted for weather, PNM retail load decreased 2.6 percent for the quarter, comparing 2009 with 2008. For TNMP, adjusted retail load increased slightly by 0.7 percent for the quarter, compared with the same period last year.
"Our focus on overall costs, as well as the implementation of new rates, allowed us to offset the impact of decreased loads in our regulated businesses," Sterba said.
"For the second straight quarter, First Choice Power delivered strong results that were fueled by lower power prices, increased retail margins and proactive steps taken to refocus operations," he said. "First Choice Power has implemented a number of initiatives to expand its commercial customer portfolio and focus on customer-credit standards to improve bad-debt expense. While progress has been made in addressing bad debt, it remains an unacceptably large cost on our residential sector. It is critical that these trends from the past two quarters continue for First Choice Power to sustain its momentum.
"Regarding our other unregulated business in Texas, Optim Energy recently added Cedar Bayou 4 to its generation fleet and the company is on pace to meet its EBITDA target for the year. Cedar Bayou 4 went online under budget, earlier than expected and increased Optim's portfolio to nearly 1,200 megawatts."
YEAR-TO-DATE RESULTS
For the first six months of 2009, PNM Resources reported unaudited consolidated GAAP earnings of $93.3 million, or $1.02 per diluted share, compared with losses of $192.1 million, or $2.42 per diluted share, in 2008. GAAP results in 2009 reflect various non-recurring items recorded in the first quarter, including the $72.8 million after-tax gain from the sale of the company's natural gas operations.
Unaudited, consolidated ongoing earnings for the first half of the year were $28.7 million, or $0.31 per diluted share, compared with ongoing losses of $4.3 million, or $0.05 per diluted share, in 2008.
QUARTERLY SEGMENT REPORTING OF EARNINGS
Regulated Operations
PNM Electric -- a vertically integrated electric utility in New Mexico with distribution, transmission and generation assets.
Ongoing quarterly earnings were $9.7 million, or $0.11 per diluted share, compared with $4.1 million, or $0.05 per diluted share, in 2008. GAAP quarterly losses were $8.1 million, or $0.09 per diluted share, compared with losses of $47.1 million, or $0.58 per diluted share, in 2008.
Earnings were improved by higher electric base rates and the implementation of a fuel and purchase power cost adjustment clause.
GAAP losses in 2009 reflect an after-tax increase in legal reserves of $7.6 million and $16.1 million in after-tax regulatory disallowances, primarily associated with a regulatory liability from the 2009 PNM electric rate settlement approved in May that required customer refunds for past sales of SO2 emission allowances.
TNMP -- an electric transmission and distribution utility in Texas.
TNMP reported quarterly ongoing earnings of $2.2 million, or $0.02 per diluted share, compared with $5.7 million, or $0.07 per diluted share, in 2008. GAAP earnings were $1.8 million, or $0.02 per diluted share, compared with losses of $28.8 million, or $0.35 per diluted share, in 2008.
Higher interest costs associated with $315.5 million of new debt decreased earnings. These higher costs are reflected in the proposed TNMP rate increase currently pending before the Public Utilities Commission of Texas. Other factors that negatively affected earnings were cooler weather and retiree medical and pension expenses.
Unregulated Operations
First Choice Power -- a competitive retail electric provider in Texas.
First Choice Power reported ongoing earnings of $12.6 million, or $0.14 per diluted share, compared with losses of $13.0 million, or $0.16 per diluted share, in 2008. GAAP earnings were $16.0 million, or $0.17 per diluted share, compared with 2008 losses of $60.4 million, or $0.74 per diluted share.
Lower power prices significantly improved average retail margins during the quarter. Margins are expected to return closer to traditional levels as wholesale markets stabilize.
Bad-debt expense increased $1.1 million to $10.1 million in 2009. Efforts to grow its retail commercial customer portfolio, increase focus on customer credit standards and improve customer service are expected to reduce bad-debt expense for the rest of the year, compared with 2008.
Optim Energy -- jointly owned by PNM Resources and a subsidiary of Cascade Investment, L.L.C. Optim Energy owns three generating assets in Texas, totaling nearly 1,200 megawatts.
PNM Resources' equity in Optim Energy quarterly net ongoing earnings was $0.3 million, compared with $2.7 million, or $0.03 per diluted share, in 2008. PNM Resources' equity in the net GAAP losses of Optim Energy was $4.4 million, or $0.04 per diluted share, compared with losses of $1.5 million, or $0.02 per diluted share, in 2008.
PNM Resources' share of Optim Energy's ongoing quarterly EBITDA was $8.1 million, compared with $11.5 million in 2008. Depressed electricity prices, coupled with costs associated with outages at the Twin Oaks Power facility, reduced results.
Twin Oaks had an equivalent availability factor of 90.9 percent during the quarter. Altura Cogen produced an availability factor of 99.3 percent. Cedar Bayou 4 became commercially operational in ERCOT on June 24 and contributed $3.9 million to margin.
Corporate/Other -- a segment that reflects costs at the PNM Resources holding company, mainly comprised of interest expense related to debt. For the purposes of this news release, the Corporate/Other segment excludes the quarterly contribution of Optim Energy reported above.
Corporate/Other reported ongoing quarterly losses of $5.4 million, or $0.06 per diluted share, compared with losses of $7.1 million, or $0.09 per diluted share, in 2008. GAAP losses were $4.7 million, or $0.05 per diluted share, compared with 2008 losses of $8.4 million, or $0.10 per diluted share.
A decrease in outstanding short- and long-term debt improved earnings.
2009 EARNINGS OUTLOOK
PNM Resources today affirmed its 2009 earnings outlook range of $0.40 to $0.55 per diluted share, which includes the impact of the recent PNM electric rate case settlement and the stipulated TNMP rate increase. Based on year-to-date performance, management expects year-end results to be in the higher end of the range and believes there is a potential to exceed the range.
FIRST QUARTER EARNINGS CALL: 9 AM EDT TODAY
PNM Resources will discuss second-quarter earnings results and the 2009 earnings outlook during a live conference call and Web cast today at 9 a.m. EDT. Speaking on the call will be Jeff Sterba, PNM Resources chairman and CEO; Pat Vincent-Collawn, PNM Resources president and COO; and Chuck Eldred, PNM Resources executive vice president and CFO.
Investors, analysts and other participants can listen to the live conference call by dialing 877-718-5111 (toll free) or 719-325-4836 (toll) five to 10 minutes prior to the event and referencing "the PNM Resources earnings conference call." A telephone replay will be available at noon EDT until midnight Aug. 7 by dialing 888-203-1112 (toll free) or 719-457-0820 and using confirmation code 9709149.
A live webcast of the call will be available and archived at http://www.pnmresources.com/investors/events.cfm. Listeners are encouraged to visit the Web site at least 30 minutes before the event to register, download and install any necessary audio software.
EMAIL ALERTS, RSS FEEDS AVAILABLE
PNM Resources encourages analysts, investors and other interested parties to visit www.PNMResources.com and register to automatically receive company financial information by email. Once registered, participants can choose from a menu to automatically receive requested information, including news releases, notices of webcasts and filings with the U.S. Securities and Exchange Commission. Participants can unsubscribe at any time and will not receive information that was not requested.
Interested parties also can register to receive automatically receive feeds through Really Simple Syndication, or RSS, a format designed for sharing updated web content such as headlines. An RSS feed automatically highlights fresh material from the PNM Resources Web site so registrants don't have to repeatedly check the site for updates.
To sign up for email alerts and RSS feeds, visit www.PNMResources.com, enter the Investor Relations section and click on the icons at the bottom of the page.
Background:
PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2008 consolidated operating revenues from continuing and discontinued operations of $2.5 billion. Through its utility and energy subsidiaries, PNM Resources has more than 2,700 megawatts of generation resources and serves electricity to more than 884,000 homes and businesses in New Mexico and Texas. The company also has a 50-percent ownership of Optim Energy, which owns nearly 1,200 megawatts of generation. For more information, visit the company's Web site 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', PNM's, or TNMP's (collectively, the "Companies") 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 and the Companies assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, the Companies caution readers not to place undue reliance on these statements. The Companies' 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. These factors include conditions affecting the Companies' ability to access the financial markets or Optim Energy's access to additional debt financing following the utilization of its existing credit facility, including actions by ratings agencies affecting the Companies' credit ratings, and the Companies' ability to obtain federal and/or state funding and incentives for the development of alternative or renewable energy; the recession, its consequent extreme disruption in the credit markets, and its impacts on the electricity usage of the Companies' customers; state and federal regulatory and legislative decisions and actions, including the TNMP electric rate case filed in 2008, and appeals of prior regulatory proceedings; the performance of generating units, including the Palo Verde Nuclear Generating Station, the San Juan Generating Station, the Four Corners Plant, and Optim Energy generating units, and transmission systems; the risk that Optim Energy is unable to identify and implement profitable acquisitions, or that PNM Resources and ECJV will not agree to make additional capital contributions to Optim Energy; the potential unavailability of cash from PNM Resources' subsidiaries or Optim Energy due to regulatory, statutory or contractual restrictions; the impacts of the decline in the values of marketable equity securities on the trust funds maintained to provide nuclear decommissioning funding and pension and other postretirement benefits, including the levels of funding and expense; the ability of First Choice Power to attract and retain customers and collect amounts billed; changes in Electric Reliability Council of Texas protocols; changes in the cost of power acquired by First Choice Power; collections experience; insurance coverage available for claims made in litigation; fluctuations in interest rates; weather; water supply; changes in fuel costs; availability of fuel supplies; the risk that replacement power costs incurred by PNM related to not meeting the specified capacity factor for its generating units under its Emergency Fuel and Purchase Power Cost Adjustment Clause will not be approved by the New Mexico Public Regulation Commission; the risk that PNM may not be able to renew rights-of-way on Native American lands or that the costs of rights-of-way are not allowed to be recovered through rates charged to customers; the effectiveness of risk management and commodity risk transactions; seasonality and other changes in supply and demand in the market for electric power; variability of wholesale power prices and natural gas prices; volatility and liquidity in the wholesale power markets and the natural gas markets; uncertainty regarding the ongoing validity of government programs for emission allowances; the risk that the resolution of the bankruptcy of the Lyondell Chemical Company results in significant adverse impacts on the operations of the Altura Cogen facility and Optim Energy; changes in the competitive environment in the electric industry; the risk that the Companies and Optim Energy may have to commit to substantial capital investments and additional operating costs to comply with new environmental control requirements, including possible future requirements to address concerns about global climate change; the risks associated with completion of generation, transmission, distribution, and other projects, including construction delays and unanticipated cost overruns; the outcome of legal proceedings; changes in applicable accounting principles; and the performance of state, regional, and national economies.
Non-GAAP Financial Measures
PNM Resources ("the Company") uses ongoing earnings and ongoing earnings per diluted share (or ongoing diluted earnings per share) and EBITDA (earnings before interest charges, income taxes, depreciation and amortization) 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.
PNM Resources Schedule 1 2009 Reconciliation of Ongoing to GAAP Earnings (Preliminary and Unaudited) Three Months Ended June 30, 2009 (in thousands) Utilities FirstChoice OptimEnergy(50%) Corp/Other PNMR PNMElectric TNMPElectric PNM Gas Ongoing Earnings (Loss) $ 9,673 $ 2,202 $ - $ 12,608 $ 327 $ (5,411 ) $ 19,399 Non-Recurring Items Economic mark-to-market hedges 2,406 - - 3,346 (4,769 ) - 983 FIN 48 interest 2,646 - - - - - 2,646 Gain on reacquired debt - - - - - (76 ) (76 ) Gain on sale of PNM Gas - - (169 ) - - (169 ) Increase in legal reserve (7,612 ) - - - - - (7,612 ) Post sale discontinued operations - - (2,442 ) - - 6 (2,436 ) Regulatory disallowances (16,078 ) (436 ) - - - - (16,514 ) Sale of water rights - - - - - 768 768 Unrealized impairments of NDT securities 1,295 - - - - - 1,295 Work continuance planning (383 ) - - - - - (383 ) Total Non-Recurring Items (17,726 ) (436 ) (2,611 ) 3,346 (4,769 ) 698 (21,498 ) GAAP Earnings (Loss) from Continuing Operations (8,053 ) 1,766 15,954 (4,442 ) (4,713 ) 512 GAAP Earnings from Discontinued Operations (2,611 ) (2,611 ) GAAP Net Earnings (Loss) Attributable to PNMR $ (8,053 ) $ 1,766 $ (2,611 ) $ 15,954 $ (4,442 ) $ (4,713 ) $ (2,099 ) Six Months Ended June 30, 2009 (in thousands) Utilities FirstChoice OptimEnergy(50%) Corp/Other PNMR PNMElectric TNMPElectric PNM Gas Ongoing Earnings (Loss) $ 9,589 $ 3,623 $ 7,621 $ 19,367 $ (1,659 ) $ (9,865 ) $ 28,676 Non-Recurring Items Business improvement plan (320 ) - - - - 350 30 CapRock settlement - - - - - 9,062 9,062 Depreciation associated with sale of gas assets - - 1,112 - - - 1,112 Economic mark-to-market hedges (1,148 ) - - 3,625 (1,940 ) - 537 FIN 48 interest 2,646 - - - - - 2,646 Gain on sale of gas operations - - 72,773 - - 72,773 Gain on reacquired debt - - - - - 4,415 4,415 Increase in legal reserve (7,612 ) - - - - (7,612 ) Post sale discontinued operations - - (2,443 ) - - 6 (2,437 ) Regulatory disallowances (16,078 ) (436 ) - - - - (16,514 ) Sale of water rights - - - - - 768 768 Unrealized impairments of NDT securities 198 - - - - - 198 Work continuance planning (382 ) - - - - - (382 ) Total Non-Recurring Items (22,696 ) (436 ) 71,442 3,625 (1,940 ) 14,601 64,596 GAAP Earnings (Loss) from Continuing Operations (13,107 ) 3,187 22,992 (3,599 ) 4,736 14,209 GAAP Earnings (Loss) from Discontinued Operations 79,063 79,063 GAAP Net Earnings (Loss) Attributable to PNMR $ (13,107 ) $ 3,187 $ 79,063 $ 22,992 $ (3,599 ) $ 4,736 $ 93,272 -------------------------------------------------------------------------------
PNM Resources Schedule 2 2008 Reconciliation of Ongoing to GAAP Earnings (Preliminary and Unaudited) Three Months Ended June 30, 2008 (in thousands) Utilities FirstChoice OptimEnergy(50%) Corp/Other PNMR PNMElectric TNMPElectric PNM Gas Ongoing Earnings (Loss) $ 4,051 $ 5,678 $ (112 ) $ (13,010 ) $ 2,719 $ (7,132 ) $ (7,806 ) Non-Recurring Items Acquisition/Divestiture - - (5 ) - - (293 ) (298 ) Afton write-down (1,199 ) - - - - - (1,199 ) Business improvement plan 46 (4 ) (67 ) (999 ) (1,024 ) Depreciation on gas assets - - 3,247 - - - 3,247 Economic mark-to-market hedges (203 ) - (307 ) 1,776 2,449 - 3,715 FIN 48 interest (1,922 ) 29 6 66 - 12 (1,809 ) Gain on sale of merchant portfolio 3,083 - - - - - 3,083 Impairment of intangible assets (51,143 ) (34,456 ) - (48,001 ) (6,687 ) - (140,287 ) Speculative trading - - - (1,250 ) (5 ) - (1,255 ) Unrealized impairments of NDT securities 147 - - - - - 147 Total Non-Recurring Items (51,191 ) (34,431 ) 2,874 (47,409 ) (4,243 ) (1,280 ) (135,680 ) GAAP Earnings (Loss) from Continuing Operations (47,140 ) (28,753 ) (60,419 ) (1,524 ) (8,412 ) (146,248 ) GAAP Earnings from Discontinued Operations 2,762 2,762 GAAP Net Earnings (Loss) Attributable to PNMR $ (47,140 ) $ (28,753 ) $ 2,762 $ (60,419 ) $ (1,524 ) $ (8,412 ) $ (143,486 ) Six Months Ended June 30, 2008 (in thousands) Utilities FirstChoice OptimEnergy(50%) Corp/Other PNMR PNMElectric TNMPElectric PNM Gas Ongoing Earnings (Loss) $ (10,389 ) $ 9,408 $ 19,178 $ (10,856 ) $ 2,540 $ (14,202 ) $ (4,321 ) Non-Recurring Items Acquisition/Divestiture - - (5 ) - - (293 ) (298 ) Afton write-down (1,199 ) - - - - - (1,199 ) Business improvement plan 287 (4 ) (75 ) (2,468 ) (2,260 ) Depreciation on gas assets - - 6,429 - - - 6,429 Economic mark-to-market hedges 6,362 - (272 ) 5,841 (11,790 ) - 141 FIN 48 interest (1,922 ) 29 6 66 - 12 (1,809 ) Gain on sale of merchant portfolio 3,083 - - - - - 3,083 Impairment of intangible assets (51,143 ) (34,456 ) - (48,001 ) (6,687 ) - (140,287 ) Regulatory disallowances (18,273 ) - - - - - (18,273 ) Speculative trading (31,534 ) (740 ) (32,274 ) Unrealized impairments of NDT securities (1,055 ) (1,055 ) Total Non-Recurring Items (63,860 ) (34,431 ) 6,083 (73,628 ) (19,217 ) (2,749 ) (187,802 ) GAAP Earnings (Loss) from Continuing Operations (74,249 ) (25,023 ) (84,484 ) (16,677 ) (16,951 ) (217,384 ) GAAP Earnings (Loss) from Discontinued Operations 25,261 25,261 GAAP Net Earnings (Loss) Attributable to PNMR $ (74,249 ) $ (25,023 ) $ 25,261 $ (84,484 ) $ (16,677 ) $ (16,951 ) $ (192,123 ) -------------------------------------------------------------------------------
PNM Resources Schedule 3 2009 Reconciliation of Ongoing to GAAP Earnings Per Share (Preliminary and Unaudited) Three Months Ended June 30, 2009 (earnings per diluted share) Utilities FirstChoice OptimEnergy(50%) Corp/Other PNMR PNMElectric TNMPElectric PNM Gas Ongoing Earnings (Loss) $ 0.11 $ 0.02 $ - $ 0.14 $ - $ (0.06 ) $ 0.21 Non-Recurring Items Economic mark-to-market hedges 0.02 - - 0.03 (0.04 ) - 0.01 FIN 48 interest 0.03 - - - - - 0.03 Gain on reacquired debt - - - - - - - Gain on sale of PNM Gas - - - - - - - Increase in legal reserve (0.08 ) - - - - - (0.08 ) Post sale discontinued operations - - (0.03 ) - - - (0.03 ) Regulatory disallowances (0.18 ) - - - - - (0.18 ) Sale of water rights - - - - - 0.01 0.01 Unrealized impairments of NDT securities 0.01 - - - - - 0.01 Work continuance planning - - - - - - - Total Non-Recurring Items (0.20 ) - (0.03 ) 0.03 (0.04 ) 0.01 (0.23 ) GAAP Earnings (Loss) from Continuing Operations (0.09 ) 0.02 0.17 (0.04 ) (0.05 ) 0.01 GAAP Earnings from Discontinued Operations (0.03 ) (0.03 ) GAAP Net Earnings (Loss) Attributable to PNMR $ (0.09 ) $ 0.02 $ (0.03 ) $ 0.17 $ (0.04 ) $ (0.05 ) $ (0.02 ) Average Diluted Shares Outstanding: 91,535,872 Six Months Ended June 30, 2009 (earnings per diluted share) Utilities FirstChoice OptimEnergy(50%) Corp/Other PNMR PNMElectric TNMPElectric PNM Gas Ongoing Earnings (Loss) $ 0.10 $ 0.04 $ 0.08 $ 0.21 $ (0.02 ) $ (0.10 ) $ 0.31 Non-Recurring Items Business improvement plan - - - - - - - CapRock settlement - - - - - 0.10 0.10 Depreciation associated with sale of gas assets - - 0.01 - - - 0.01 Economic mark-to-market hedges (0.01 ) - - 0.04 (0.02 ) - 0.01 FIN 48 interest 0.03 - - - - - 0.03 Gain on sale of gas operations - 0.80 - - - 0.80 Gain on reacquired debt - - - - - 0.05 0.05 Increase in legal reserve (0.08 ) - - - - - (0.08 ) Post sale discontinued operations - - (0.03 ) - - - (0.03 ) Regulatory disallowances (0.18 ) (0.01 ) - - - - (0.19 ) Sale of water rights - - - - - 0.01 0.01 Unrealized impairments of NDT securities - - - - - - - Work continuance planning - - - - - - - Total Non-Recurring Items (0.24 ) (0.01 ) 0.78 0.04 (0.02 ) 0.16 0.71 GAAP Earnings (Loss) from Continuing Operations (0.14 ) 0.03 0.25 (0.04 ) 0.06 0.16 GAAP Earnings (Loss) from Discontinued Operations 0.86 0.86 GAAP Net Earnings (Loss) Attributable to PNMR $ (0.14 ) $ 0.03 $ 0.86 $ 0.25 $ (0.04 ) $ 0.06 $ 1.02 Average Diluted Shares Outstanding: 91,488,112 -------------------------------------------------------------------------------
PNM Resources Schedule 4 2008 Reconciliation of Ongoing to GAAP Earnings Per Share (Preliminary and Unaudited) Three Months Ended June 30, 2008 (earnings per diluted share) Utilities FirstChoice OptimEnergy(50%) Corp/Other PNMR PNMElectric TNMPElectric PNM Gas Ongoing Earnings (Loss) $ 0.05 $ 0.07 $ (0.00 ) $ (0.16 ) $ 0.03 $ (0.09 ) $ (0.10 ) Non-Recurring Items Acquisition/Divestiture - - (0.00 ) - - (0.00 ) (0.00 ) Afton write-down (0.02 ) - - - - - (0.01 ) Business improvement plan 0.00 (0.00 ) (0.00 ) - - (0.01 ) (0.01 ) Depreciation on gas assets - - 0.04 - - - 0.04 Economic mark-to-market hedges (0.00 ) - (0.01 ) 0.02 0.03 - 0.05 FIN 48 interest (0.02 ) 0.00 0.00 0.00 - 0.00 (0.02 ) Gain on sale of merchant portfolio 0.04 - - - - - 0.04 Impairment of intangible assets (0.63 ) (0.42 ) - (0.59 ) (0.08 ) - (1.72 ) Speculative trading - - - (0.01 ) (0.00 ) - (0.02 ) Unrealized impairments of NDT securities 0.00 - - - - - 0.00 Total Non-Recurring Items (0.63 ) (0.42 ) 0.03 (0.58 ) (0.05 ) (0.01 ) (1.66 ) GAAP Earnings (Loss) from Continuing Operations (0.58 ) (0.35 ) (0.74 ) (0.02 ) (0.10 ) (1.79 ) GAAP Earnings from Discontinued Operations 0.03 0.03 GAAP Net Earnings (Loss) Attributable to PNMR $ (0.58 ) $ (0.35 ) $ 0.03 $ (0.74 ) $ (0.02 ) $ (0.10 ) $ (1.76 ) Average Diluted Shares Outstanding: 81,698,164 Six Months Ended June 30, 2008 Utilities FirstChoice OptimEnergy(50%) Corp/Other PNMR PNMElectric TNMPElectric PNM Gas Ongoing Earnings (Loss) $ (0.13 ) $ 0.12 $ 0.24 $ (0.14 ) $ 0.03 $ (0.17 ) $ (0.05 ) Non-Recurring Items Acquisition/Divestiture - - (0.00 ) - - (0.00 ) (0.00 ) Afton write-down (0.02 ) - - - - - (0.02 ) Business improvement plan 0.00 (0.00 ) (0.00 ) - - (0.03 ) (0.03 ) Depreciation on gas assets - - 0.08 - - - 0.08 Economic mark-to-market hedges 0.08 - (0.00 ) 0.07 (0.15 ) - 0.00 FIN 48 interest (0.02 ) 0.00 0.00 0.00 - 0.00 (0.02 ) Gain on sale of merchant portfolio 0.04 - - - - - 0.04 Impairment of intangible assets (0.65 ) (0.44 ) - (0.60 ) (0.08 ) - (1.78 ) Regulatory disallowances (0.23 ) - - - - - (0.23 ) Speculative trading - - - (0.40 ) (0.01 ) - (0.41 ) Unrealized impairments of NDT securities (0.01 ) - - - - - (0.01 ) Total Non-Recurring Items (0.81 ) (0.44 ) 0.08 (0.93 ) (0.24 ) (0.03 ) (2.37 ) GAAP Earnings (Loss) from Continuing Operations (0.94 ) (0.32 ) (1.07 ) (0.21 ) (0.20 ) (2.74 ) GAAP Earnings (Loss) from Discontinued Operations 0.32 0.32 GAAP Net Earnings (Loss) Attributable to PNMR $ (0.94 ) $ (0.32 ) $ 0.32 $ (1.07 ) $ (0.21 ) $ (0.20 ) $ (2.42 ) Average Diluted Shares Outstanding: 79,273,941 -------------------------------------------------------------------------------
Schedule 5 Segment Reconciliation of GAAP Net Earnings to Ongoing EBITDA (Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization) (Preliminary and Unaudited) Three Months Ended June 30, 2009 (in millions) PNM Electric TNMP Electric PNM Gas First Choice Corporate &Other PNMRConsolidated GAAP Net Earnings (Loss) Attributable to PNMR ($8.1 ) $1.8 ($2.6 ) $16.0 ($9.2 ) ($2.1 ) Interest charges 17.4 7.9 0.0 0.8 5.7 31.8 Income taxes (5.1 ) 1.2 (1.9 ) 9.0 (6.2 ) (3.0 ) Depreciation and amortization 22.9 8.9 0.0 0.5 4.6 36.9 EBITDA 27.1 19.8 (4.5 ) 26.3 (5.1 ) 63.6 Ongoing adjustments (before tax) 28.8 0.7 4.5 (5.2 ) 6.7 35.5 Ongoing EBITDA $55.9 $20.5 $0.0 $21.1 $1.6 $99.1 Six Months Ended June 30, 2009 (in millions) PNM Electric TNMP Electric PNM Gas First Choice Corporate &Other PNMRConsolidated GAAP Net Earnings (Loss) Attributable to PNMR ($13.1 ) $3.2 $79.1 $23.0 $1.1 $93.3 Interest charges 34.6 12.0 1.0 1.8 12.3 61.7 Income taxes (8.5 ) 2.2 42.0 12.9 (0.2 ) 48.4 Depreciation and amortization 45.4 17.5 0.0 1.0 9.1 73.0 EBITDA 58.4 34.9 122.1 38.7 22.3 276.4 Ongoing adjustments 36.4 0.7 (106.6 ) (5.6 ) (21.0 ) (96.1 ) Ongoing EBITDA $94.8 $35.6 $15.5 $33.1 $1.3 $180.3 -------------------------------------------------------------------------------
Schedule 6 Segment Reconciliation of GAAP Net Earnings to Ongoing EBITDA (Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization) (Preliminary and Unaudited) Three Months Ended June 30, 2008 (in millions) PNM Electric TNMP Electric PNM Gas First Choice Corporate &Other PNMRConsolidated GAAP Net Earnings (Loss) Attributable to PNMR ($47.1 ) ($28.8 ) $2.8 ($60.4 ) ($10.0 ) ($143.5 ) Interest charges 17.6 4.4 3.6 0.3 9.7 35.6 Income taxes 2.4 3.4 1.8 (8.8 ) (7.5 ) (8.7 ) Depreciation and amortization 20.9 8.8 0.0 0.6 4.4 34.7 EBITDA (6.2 ) (12.2 ) 8.2 (68.3 ) (3.4 ) (81.9 ) Ongoing adjustments (before tax) 51.2 34.4 (4.8 ) 49.7 9.2 139.7 Ongoing EBITDA $45.0 $22.2 $3.4 ($18.6 ) $5.8 $57.8 Six Months Ended June 30, 2008 (in millions) PNM Electric TNMP Electric PNM Gas First Choice Corporate &Other PNMRConsolidated GAAP Net Earnings (Loss) Attributable to PNMR ($74.2 ) ($25.0 ) $25.3 ($84.5 ) ($33.7 ) ($192.1 ) Interest charges 31.7 9.4 6.5 0.6 18.2 66.4 Income taxes (14.6 ) 5.7 15.5 (21.6 ) (22.0 ) (37.0 ) Depreciation and amortization 41.9 17.1 0.0 1.0 8.7 68.7 EBITDA (15.2 ) 7.2 47.3 (104.5 ) (28.8 ) (94.0 ) Ongoing adjustments 72.2 34.4 (10.1 ) 90.4 36.1 223.0 Ongoing EBITDA $57.0 $41.6 $37.2 ($14.1 ) $7.3 $129.0 -------------------------------------------------------------------------------
PNM Resources Schedule 7 Calculation of Optim Energy Ongoing EBITDA (Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization) (Preliminary and Unaudited) A service of YellowBrix, Inc.
