PNM Resources Reports Third Quarter Results

2015 Earnings Guidance Narrowed, Conference call set for 11 a.m. Eastern today

Oct 30, 2015, 06:30 ET from PNM Resources

ALBUQUERQUE, N.M., Oct. 30, 2015 /PRNewswire/ --  


PNM Resources (In millions, except EPS)


Q3 2015

Q3 2014


YTD 2015

YTD 2014

GAAP net earnings

$61.0

$55.7


$107.1

$97.3

GAAP diluted EPS

$0.76

$0.69


$1.34

$1.21

Ongoing net earnings

$60.9

$54.5


$112.8

$100.1

Ongoing diluted EPS

$0.76

$0.68


$1.41

$1.25

PNM Resources (NYSE: PNM) today released the company's 2015 third quarter earnings results. The Company also today narrowed the 2015 consolidated earnings guidance range to $1.56 to $1.61 per diluted share from the previously stated range of $1.50 to $1.62.

"Based on the solid financial results from the third quarter, we are narrowing our guidance range for the year," said Pat Vincent-Collawn, PNM Resources' chairman, president and CEO.  "While making progress on key regulatory matters, we remain focused on meeting our customers' day-to-day electricity demands with reliable, affordable and environmentally responsible power both today and in the future."

SEGMENT REPORTING OF 2015 THIRD 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)  

Q3 2015

Q3 2014

YTD 2015

YTD 2014

GAAP net earnings

$49.2

$45.2

$80.6

$73.0

GAAP diluted EPS

$0.61

$0.56

$1.01

$0.91

Ongoing net earnings

$48.0

$44.0

$84.2

$75.6

Ongoing diluted EPS

$0.60

$0.55

$1.05

$0.94

  • In the third quarter, PNM's ongoing earnings benefitted from AFUDC, warmer weather, the half-priced Palo Verde Unit 1 leases, renewable rate relief, income from refined coal, and gains from the Palo Verde Nuclear Decommissioning Trust. These were partially offset by decreased load, plant outage costs, employee medical cost increases, depreciation and property tax expenses and higher interest expense.

TNMPan electric transmission and distribution utility in Texas.

TNMP (In millions, except EPS)

Q3 2015

Q3 2014

YTD 2015

YTD 2014

GAAP net earnings

$13.7

$12.4

$33.2

$28.7

GAAP diluted EPS

$0.17

$0.15

$0.41

$0.36

Ongoing net earnings

$13.7

$12.4

$33.2

$28.7

Ongoing diluted EPS

$0.17

$0.15

$0.41

$0.36

  • In the third quarter, TNMP's ongoing earnings benefitted from transmission rate relief, increased load, and warmer weather, which were partially offset by higher depreciation and property tax expenses resulting from additional capital investments.

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)

Q3 2015

Q3 2014

YTD 2015

YTD 2014

GAAP net earnings (loss)

($1.9)

($1.9)

($6.8)

($4.4)

GAAP diluted EPS

($0.02)

($0.02)

($0.08)

($0.05)

Ongoing net earnings (loss)

($0.7)

($1.9)

($4.6)

($4.2)

Ongoing diluted EPS

($0.01)

($0.02)

($0.05)

($0.05)

  • Corporate and Other benefitted from a net improvement in interest expense related to the retirement of long-term debt in May 2015.

Financial materials are available at http://www.pnmresources.com/investors/results.cfm.

THIRD QUARTER CONFERENCE CALL: 11 AM EASTERN TODAY

PNM Resources will discuss third 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 pre-registering using the following link to receive a special dial-in number and PIN: http://dpregister.com/10074419. Telephone participants who are unable to pre-register may participate in the live conference call by dialing (877) 276-8648 or (412) 317-5474 fifteen minutes prior to the event and referencing "the PNM Resources third quarter conference call."

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 2014 consolidated operating revenues of $1.4 billion. Through its regulated utilities, PNM and TNMP, PNM Resources has approximately 2,707 megawatts of generation capacity and provides electricity to more than 753,000 homes and businesses in New Mexico and Texas. For more information, visit the company's website at www.PNMResources.com.

CONTACTS:

     Analysts

Media

     Jimmie Blotter

Pahl Shipley

     (505) 241-2227    

(505) 241-2782

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, Inc. and Subsidiaries Schedule 1 Reconciliation of GAAP to Ongoing Earnings (Preliminary and Unaudited)

PNM

TNMP

Corporate and Other

Consolidated

(in thousands)

Three Months Ended September 30, 2015

GAAP Net Earnings (Loss) Attributable to PNMR:

$

49,246

$

13,689

$

(1,890)

$

61,045

Adjusting items, net of income tax effects

  Mark-to-market impact of economic hedges1

(2,964)

(2,964)

  Net change in unrealized impairments of available-for-sale securities2

1,488

1,488

  State tax credit and NOL impairment5

233

1,143

1,376

  Total Adjustments

(1,243)

1,143

(100)

Ongoing Earnings (Loss)

$

48,003

$

13,689

$

(747)

$

60,945

Nine Months Ended September 30, 2015

GAAP Net Earnings (Loss) Attributable to PNMR:

$

80,618

$

33,248

$

(6,808)

$

107,058

Adjusting items, net of income tax effects

    Mark-to-market impact of economic hedges3

760

760

    Net change in unrealized impairments of available-for-sale securities2

1,954

1,954

    New Mexico corporate income tax rate change5

(470)

(203)

(673)

    Regulatory disallowances4

1,061

1,061

  State tax credit and NOL impairment5

891

1,486

2,377

    (Gain) loss related to previously disposed of activities6

(660)

905

245

  Total Adjustments

3,536

2,188

5,724

Ongoing Earnings (Loss)

$

84,154

$

33,248

$

(4,620)

$

112,782

2015 income tax effects calculated using tax rates of 35.00% for TNMP and 39.19% for other segments.

The impacts of adjusting items are reflected on the GAAP Condensed Consolidated Statement of Earnings as follows:

1Pre-tax7 impacts reflected as $4,719 thousand increase in "Electric Operating Revenues" and $158 thousand reduction in "Cost of energy"

2Pre-tax7 impact reflected in "Gains on available-for-sale securities"

3Pre-tax7 impacts reflected as $1,300 thousand reduction in "Electric Operating Revenues" and $49 thousand reduction in "Cost of energy"

4Pre-tax7 impact reflected in "Regulatory disallowances"

5Impact reflected in "Income Taxes"

6Pre-tax7 impacts reflected as $1,086 thousand increase in "Other income", $291 thousand increase in "Taxes other than income taxes", $74 thousand increase in "Interest charges", and $1,122 thousand increase in "Other deductions"

7Tax impacts reflected in "Income Taxes"

 

PNM Resources, Inc. and Subsidiaries

Schedule 2

Reconciliation of GAAP to Ongoing Earnings

(Preliminary and Unaudited)

PNM

TNMP

Corporate and Other

Consolidated

(in thousands)

Three Months Ended September 30, 2014

GAAP Net Earnings (Loss) Attributable to PNMR:

$

45,219

$

12,355

$

(1,921)

$

55,653

Adjusting items, net of income tax effects

  Mark-to-market impact of economic hedges1

(1,972)

(1,972)

  Net change in unrealized impairments of available-for-sale securities2

791

791

Total Adjustments

(1,181)

(1,181)

Ongoing Earnings (Loss)

$

44,038

$

12,355

$

(1,921)

$

54,472

Nine Months Ended September 30, 2014

GAAP Net Earnings (Loss) Attributable to PNMR:

$

72,976

$

28,691

$

(4,405)

$

97,262

Adjusting items, net of income tax effects

  Mark-to-market impact of economic hedges5

(41)

(41)

  Net change in unrealized impairments of available-for-sale securities2

517

517

  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

2,606

34

241

2,881

Ongoing Earnings (Loss)

$

75,582

$

28,725

$

(4,164)

$

100,143

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 as $3,227 thousand increase in "Electric Operating Revenues" and $28 thousand reduction in "Cost of energy"

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 as $138 thousand reduction in "Electric Operating Revenues" and $205 thousand reduction in "Cost of energy"

6Impact reflected in "Income Taxes"

7Tax impacts reflected in "Income Taxes"

 

PNM Resources, Inc. and Subsidiaries

Schedule 3

Reconciliation of GAAP to Ongoing Earnings Per Diluted Share

(Preliminary and Unaudited)

PNM

TNMP

Corporate and Other

Consolidated

(per diluted share)

Three Months Ended September 30, 2015

GAAP Net Earnings (Loss) Attributable to PNMR:

$

0.61

$

0.17

$

(0.02)

$

0.76

Adjusting items

  Mark-to-market impact of economic hedges

(0.04)

(0.04)

  Net change in unrealized impairments of available-for-sale securities

0.02

0.02

  State tax credit and NOL impairment

0.01

0.01

0.02

  Total Adjustments

(0.01)

0.01

Ongoing Earnings (Loss)

$

0.60

$

0.17

$

(0.01)

$

0.76

Average Diluted Shares Outstanding: 80,115,665

Nine Months Ended September 30, 2015

GAAP Net Earnings (Loss) Attributable to PNMR:

$

1.01

$

0.41

$

(0.08)

$

1.34

Adjusting items

  Mark-to-market impact of economic hedges

0.01

0.01

  Net change in unrealized impairments of available-for-sale securities

0.02

0.02

  New Mexico corporate income tax rate change

  Regulatory disallowances

0.01

0.01

  State tax credit and NOL impairment

0.01

0.02

0.03

  (Gain) loss related to previously disposed of activities

(0.01)

0.01

  Total Adjustments

0.04

0.03

0.07

Ongoing Earnings (Loss)

$

1.05

$

0.41

$

(0.05)

$

1.41

Average Diluted Shares Outstanding: 80,133,925

 

PNM Resources, Inc. and Subsidiaries

Schedule 4

Reconciliation of GAAP to Ongoing Earnings Per Diluted Share

(Preliminary and Unaudited)

PNM

TNMP

Corporate and Other

Consolidated

(per diluted share)

Three Months Ended September 30, 2014

GAAP Net Earnings (Loss) Attributable to PNMR:

$

0.56

$

0.15

$

(0.02)

$

0.69

Adjusting items

  Mark-to-market impact of economic hedges

(0.02)

(0.02)

  Net change in unrealized impairments of available-for-sale securities

0.01

0.01

  Total Adjustments

(0.01)

(0.01)

Ongoing Earnings (Loss)

$

0.55

$

0.15

$

(0.02)

$

0.68

Average Diluted Shares Outstanding: 80,223,101

Nine Months Ended September 30, 2014

GAAP Net Earnings (Loss) Attributable to PNMR:

$

0.91

$

0.36

$

(0.05)

$

1.21

Adjusting items

  Mark-to-market impact of economic hedges

  Net change in unrealized impairments of available-for-sale securities

0.01

0.01

  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

0.03

0.03

Ongoing Earnings (Loss)

$

0.94

$

0.36

$

(0.05)

$

1.25

Average Diluted Shares Outstanding: 80,279,154

Tables may not appear visually accurate due to rounding.

 

PNM Resources, Inc. and Subsidiaries

Schedule 5

Condensed Consolidated Statement of Earnings

(Preliminary and Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2015

2014

2015

2014

(In thousands, except per share amounts)

Electric Operating Revenues

$

417,433

$

413,951

$

1,103,187

$

1,089,008

Operating Expenses:

Cost of energy

124,255

132,499

353,939

354,532

Administrative and general

46,375

42,190

130,161

131,283

Energy production costs

42,168

43,287

129,627

136,422

Regulatory disallowances

1,744

Depreciation and amortization

47,503

44,295

139,013

128,424

Transmission and distribution costs

16,768

16,884

50,123

49,857

Taxes other than income taxes

18,859

17,997

55,093

51,641

  Total operating expenses

295,928

297,152

859,700

852,159

  Operating income

121,505

116,799

243,487

236,849

Other Income and Deductions:

Interest income

1,151

2,084

4,842

6,241

Gains on available-for-sale securities

2,536

962

12,116

8,234

Other income

6,165

2,895

16,844

7,648

Other (deductions)

(3,222)

(2,084)

(10,591)

(7,185)

  Net other income and deductions

6,630

3,857

23,211

14,938

Interest Charges

27,528

30,115

86,714

89,621

Earnings before Income Taxes

100,607

90,541

179,984

162,166

Income Taxes

35,752

31,055

61,621

53,368

Net Earnings

64,855

59,486

118,363

108,798

(Earnings) Attributable to Valencia Non-controlling Interest

(3,678)

(3,701)

(10,909)

(11,140)

Preferred Stock Dividend Requirements of Subsidiary

(132)

(132)

(396)

(396)

Net Earnings Attributable to PNMR

$

61,045

$

55,653

$

107,058

$

97,262

Net Earnings Attributable to PNMR per Common Share:

  Basic

$

0.77

$

0.70

$

1.34

$

1.22

  Diluted

$

0.76

$

0.69

$

1.34

$

1.21

Dividends Declared per Common Share

$

0.200

$

0.185

$

0.600

$

0.555

 

SOURCE PNM Resources



RELATED LINKS

http://www.pnmresources.com