PNM Reports 2001 First Quarter Earnings

Apr 18, 2001, 01:00 ET from Public Service Company of New Mexico

    ALBUQUERQUE, N.M., April 18 /PRNewswire/ -- PNM, Public Service Company of
 New Mexico (NYSE:   PNM), today reported net earnings for the quarter ended
 March 31, 2001, of $63.6 million, or $1.60 per share of common stock
 (diluted), on total operating revenues of $736.5 million, compared to net
 earnings of $22.0 million, or $0.55 per share of common stock (diluted) on
 total operating revenues of $321.3 million in the first quarter of the
 previous year.
     Charges related to the proposed Western Resources acquisition recorded
 during the first quarter 2001 reduced net earnings for the period by $0.05 per
 diluted share.  PNM net earnings before those charges were $1.65 per diluted
 share.  There were no similar items recorded during the comparable quarter of
 2000.
     The increase in net income for the latest quarter compared to the first
 quarter of the preceding year was largely due to increased revenues from PNM
 wholesale power marketing.  Wholesale power revenues for the latest quarter
 totaled $410.7 million, a 310 percent increase over the $100.3 million
 reported in the comparable period last year.  The increase in revenues was
 primarily due to higher wholesale power prices prevailing in the western U.S.
 during the first three months of 2001 compared to the same period last year.
     Retail electric revenues totaled approximately $126.2 million for the
 quarter, an increase of 4.0 percent over the comparable period in 2000.  The
 increase was primarily due to the effect of weather and to continued growth in
 the PNM retail electric sales territory.  Temperatures in New Mexico were
 significantly colder during the first quarter of 2001 compared to the same
 three-month period in 2000.  Heating degree days (a measure of the variation
 in daily mean temperature below 65 degrees Fahrenheit) totaled 2,089 in
 Albuquerque during the first three months of 2001, approximately 14 percent
 more than recorded during the comparable months in 2000.
     Gross margin (operating revenues less fuel and purchased power expenses)
 was $239.4 million in the latest quarter, an increase of 56.1 percent over the
 same period last year.  The increase in gross margin was primarily due to
 increased margins in the wholesale power market.  Based on its current
 assessment of price volatility and credit issues in the wholesale power
 market, the company provided an additional allowance against revenues of
 $13.2 million during the first quarter.
     Non-fuel operations and maintenance expenses for the first quarter 2001
 increased 8.3 percent compared to the same period last year, primarily as a
 result of a $4.7 million increase in pension and benefits expense.  Other
 income was reduced $4.9 million compared to the same period last year,
 primarily due to valuation allowances related to investments in two
 energy-related technology companies.
     PNM management now expects full year 2001 earnings to be significantly
 higher than the company's previous forecast of $2.60 to $2.70 per share.
 Because of continuing volatility in the wholesale power market, the company is
 not providing specific earnings guidance for the year.  The company believes
 its sustainable earnings level is now in the range of $3.50 per share and
 growing.  However, the currently high wholesale prices have the potential to
 raise earnings substantially above that level in the near term.
     PNM is a combined electric and gas utility serving approximately
 1.3 million people in New Mexico.  The company also sells power on the
 wholesale market in the Western U.S.  PNM stock is traded primarily on the
 NYSE under the symbol PNM.  For more information about PNM, see the company's
 web site at www.pnm.com
 
     Safe Harbor Statement under the Private Securities Litigation Reform Act
 of 1995
     Statements made in this news release that relate to future events are made
 pursuant to the Private Securities Litigation Reform Act of 1995.  These
 forward-looking statements are based upon current expectations and the company
 assumes no obligation to update this information.  Because actual results may
 differ materially from expectations, the company cautions readers not to place
 undue reliance on these statements.  A number of factors, including weather,
 fuel costs, changes in supply and demand in the market for electric power, the
 performance of generating units and transmission system, and state and federal
 regulatory and legislative decisions and actions, including rulings issued by
 the New Mexico Public Regulation Commission pursuant to the Electric Utility
 Industry Restructuring Act of 1999 (as amended), and in other cases now
 pending or which may be brought before the commission, could cause future
 events to differ from those forecast in this press release.  For a detailed
 discussion of the important factors affecting PNM, please see "Management's
 Discussion and Analysis of Financial Condition and Results of Operations" in
 the Company's Form 10-K for the year ended December 31, 2000, Form 10-Q for
 the quarter ended September 30, 2000 and Form 8-K filings with the Securities
 and Exchange Commission.
 
     Additional Information
     In connection with the proposed transaction with Western Resources, PNM
 and Western Resources will file a joint proxy statement / prospectus with the
 Securities and Exchange Commission.  INVESTORS AND SECURITY HOLDERS ARE
 ADVISED TO READ THE JOINT PROXY STATEMENT / PROSPECTUS WHEN IT BECOMES
 AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.  Investors and
 security holders may obtain a free copy of the joint proxy statement /
 prospectus (when available) and other documents filed by PNM and Western
 Resources with the SEC at the SEC's web site at http://www.sec.gov.  Free
 copies of the joint proxy statement / prospectus, when available, and each
 company's other filings with the SEC may also be obtained from the respective
 companies.  Free copies of PNM's filings may be obtained by directing a
 request to PNM, Alvarado Square, Albuquerque, New Mexico.
 
     Participants in Solicitation
     PNM, Western Resources and certain of their respective directors,
 executive officers and other members of their management and employees, each
 of whom may be considered participants in this transaction under applicable
 securities laws, may be soliciting proxies from their respective stockholders
 in favor of the transaction.  Information concerning PNM's directors and
 executive officers participating in the solicitation is set forth or will be
 incorporated in PNM's Annual Report on Form 10-K filed with the SEC on
 February 22,2001, and information concerning Western Resources' directors and
 executive officers participating in the solicitation is set forth in or will
 be incorporated in Western Resources' Annual Report on Form 10-K filed with
 the SEC on April 2, 2001.  Certain directors and executive officers of PNM and
 Western Resources may have direct or indirect interests in the transaction due
 to securities holdings, vesting of options, and rights to severance payments
 if their employment is terminated following the transaction.  In addition,
 directors and officers, after the transaction, will be indemnified by PNM and
 Western Resources, and benefit from insurance coverage for liabilities that
 may arise from their service as directors and officers of PNM or Western
 Resources prior to the transaction.  Additional information regarding PNM's
 and Western Resources' respective participants in the solicitation will be
 contained in the joint proxy statement/prospectus.
 
 

SOURCE Public Service Company of New Mexico
    ALBUQUERQUE, N.M., April 18 /PRNewswire/ -- PNM, Public Service Company of
 New Mexico (NYSE:   PNM), today reported net earnings for the quarter ended
 March 31, 2001, of $63.6 million, or $1.60 per share of common stock
 (diluted), on total operating revenues of $736.5 million, compared to net
 earnings of $22.0 million, or $0.55 per share of common stock (diluted) on
 total operating revenues of $321.3 million in the first quarter of the
 previous year.
     Charges related to the proposed Western Resources acquisition recorded
 during the first quarter 2001 reduced net earnings for the period by $0.05 per
 diluted share.  PNM net earnings before those charges were $1.65 per diluted
 share.  There were no similar items recorded during the comparable quarter of
 2000.
     The increase in net income for the latest quarter compared to the first
 quarter of the preceding year was largely due to increased revenues from PNM
 wholesale power marketing.  Wholesale power revenues for the latest quarter
 totaled $410.7 million, a 310 percent increase over the $100.3 million
 reported in the comparable period last year.  The increase in revenues was
 primarily due to higher wholesale power prices prevailing in the western U.S.
 during the first three months of 2001 compared to the same period last year.
     Retail electric revenues totaled approximately $126.2 million for the
 quarter, an increase of 4.0 percent over the comparable period in 2000.  The
 increase was primarily due to the effect of weather and to continued growth in
 the PNM retail electric sales territory.  Temperatures in New Mexico were
 significantly colder during the first quarter of 2001 compared to the same
 three-month period in 2000.  Heating degree days (a measure of the variation
 in daily mean temperature below 65 degrees Fahrenheit) totaled 2,089 in
 Albuquerque during the first three months of 2001, approximately 14 percent
 more than recorded during the comparable months in 2000.
     Gross margin (operating revenues less fuel and purchased power expenses)
 was $239.4 million in the latest quarter, an increase of 56.1 percent over the
 same period last year.  The increase in gross margin was primarily due to
 increased margins in the wholesale power market.  Based on its current
 assessment of price volatility and credit issues in the wholesale power
 market, the company provided an additional allowance against revenues of
 $13.2 million during the first quarter.
     Non-fuel operations and maintenance expenses for the first quarter 2001
 increased 8.3 percent compared to the same period last year, primarily as a
 result of a $4.7 million increase in pension and benefits expense.  Other
 income was reduced $4.9 million compared to the same period last year,
 primarily due to valuation allowances related to investments in two
 energy-related technology companies.
     PNM management now expects full year 2001 earnings to be significantly
 higher than the company's previous forecast of $2.60 to $2.70 per share.
 Because of continuing volatility in the wholesale power market, the company is
 not providing specific earnings guidance for the year.  The company believes
 its sustainable earnings level is now in the range of $3.50 per share and
 growing.  However, the currently high wholesale prices have the potential to
 raise earnings substantially above that level in the near term.
     PNM is a combined electric and gas utility serving approximately
 1.3 million people in New Mexico.  The company also sells power on the
 wholesale market in the Western U.S.  PNM stock is traded primarily on the
 NYSE under the symbol PNM.  For more information about PNM, see the company's
 web site at www.pnm.com
 
     Safe Harbor Statement under the Private Securities Litigation Reform Act
 of 1995
     Statements made in this news release that relate to future events are made
 pursuant to the Private Securities Litigation Reform Act of 1995.  These
 forward-looking statements are based upon current expectations and the company
 assumes no obligation to update this information.  Because actual results may
 differ materially from expectations, the company cautions readers not to place
 undue reliance on these statements.  A number of factors, including weather,
 fuel costs, changes in supply and demand in the market for electric power, the
 performance of generating units and transmission system, and state and federal
 regulatory and legislative decisions and actions, including rulings issued by
 the New Mexico Public Regulation Commission pursuant to the Electric Utility
 Industry Restructuring Act of 1999 (as amended), and in other cases now
 pending or which may be brought before the commission, could cause future
 events to differ from those forecast in this press release.  For a detailed
 discussion of the important factors affecting PNM, please see "Management's
 Discussion and Analysis of Financial Condition and Results of Operations" in
 the Company's Form 10-K for the year ended December 31, 2000, Form 10-Q for
 the quarter ended September 30, 2000 and Form 8-K filings with the Securities
 and Exchange Commission.
 
     Additional Information
     In connection with the proposed transaction with Western Resources, PNM
 and Western Resources will file a joint proxy statement / prospectus with the
 Securities and Exchange Commission.  INVESTORS AND SECURITY HOLDERS ARE
 ADVISED TO READ THE JOINT PROXY STATEMENT / PROSPECTUS WHEN IT BECOMES
 AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.  Investors and
 security holders may obtain a free copy of the joint proxy statement /
 prospectus (when available) and other documents filed by PNM and Western
 Resources with the SEC at the SEC's web site at http://www.sec.gov.  Free
 copies of the joint proxy statement / prospectus, when available, and each
 company's other filings with the SEC may also be obtained from the respective
 companies.  Free copies of PNM's filings may be obtained by directing a
 request to PNM, Alvarado Square, Albuquerque, New Mexico.
 
     Participants in Solicitation
     PNM, Western Resources and certain of their respective directors,
 executive officers and other members of their management and employees, each
 of whom may be considered participants in this transaction under applicable
 securities laws, may be soliciting proxies from their respective stockholders
 in favor of the transaction.  Information concerning PNM's directors and
 executive officers participating in the solicitation is set forth or will be
 incorporated in PNM's Annual Report on Form 10-K filed with the SEC on
 February 22,2001, and information concerning Western Resources' directors and
 executive officers participating in the solicitation is set forth in or will
 be incorporated in Western Resources' Annual Report on Form 10-K filed with
 the SEC on April 2, 2001.  Certain directors and executive officers of PNM and
 Western Resources may have direct or indirect interests in the transaction due
 to securities holdings, vesting of options, and rights to severance payments
 if their employment is terminated following the transaction.  In addition,
 directors and officers, after the transaction, will be indemnified by PNM and
 Western Resources, and benefit from insurance coverage for liabilities that
 may arise from their service as directors and officers of PNM or Western
 Resources prior to the transaction.  Additional information regarding PNM's
 and Western Resources' respective participants in the solicitation will be
 contained in the joint proxy statement/prospectus.
 
 SOURCE  Public Service Company of New Mexico