Exhibit 99.1
PNM Third Quarter Earnings Up on Strong Wholesale Gains
ALBUQUERQUE, N.M. October 18, 2000 - PNM, Public Service Company of New Mexico
(NYSE:PNM) today reported net earnings before one-time gains and special charges
of 97 cents per share (diluted) for the three months ended September 30, 2000,
compared to last year's third quarter earnings of 52 cents per share (diluted).
One-time gains and charges recorded during the third quarter added a net of 21
cents per share to earnings for the latest quarter, for a total of $1.18 per
share (diluted). There were no one-time items recorded during the comparable
quarter of 1999.
PNM net earnings for the latest quarter totaled $46.9 million on operating
revenues of $499.5 million, compared to net earnings of $21.4 million, on
revenues of $340.6 million in the third quarter 1999. For the nine months ended
Sept. 30, 2000, net earnings totaled $86.9 million, or $2.17 per share (diluted)
on total operating revenues of $1.15 billion. In the first nine months of last
year PNM earned $66.2 million, or $1.60 per share, on revenues of $874.8
million.
The increase in earnings for the quarter and the year to date was primarily due
to the company's continued success in the wholesale power market, warmer
temperatures in 2000 compared to 1999, and ongoing efforts to control costs,
according to PNM Chairman, President and Chief Executive Officer Jeff Sterba.
PNM wholesale power revenues totaled $279.5 million in the third quarter, an
increase of nearly 86 percent over the same period last year.
"Strong demand for electricity in the West over the past several months provided
the opportunity," Sterba said. "Our experienced trading staff, backed by the
exceptional performance of our generating units, allowed us to make the most of
that opportunity."
Although total retail electric sales increased 4.2 percent during the third
quarter, to nearly 2 million megawatt-hours (MWh), retail electric revenues fell
slightly, to $144.4 million, compared to $148.8 million in the same period last
year. The 3.0 percent drop in retail electric revenues is mainly due to an
electric rate reduction implemented in the third quarter of 1999.
Electric gross margin (operating revenues less fuel and purchased power
expenses) was $158.4 million in the latest quarter, an increase of 18.6 percent
over the same period last year. The increase in gross margin was primarily due
to increased margins in the wholesale power market.
Operations and maintenance expenses for the third quarter were down 3.3 percent
compared to the same period last year, reflecting the company's continued
success in controlling costs.
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One-time items recorded in the third quarter 2000 include a gain of 21 cents per
share from settlement of a lawsuit and a gain of 7 cents per share for the
reversal of certain reserves associated with the expected resolution of two gas
rate cases now pending before state regulators. The quarter's earnings also
include a one-time charge of 7 cents per share in connection with acquisition of
a new, long-term wholesale customer in July.
PNM operates a combined electric and gas utility serving approximately 1.3
million people in New Mexico and sells power on the wholesale market. Avistar, a
wholly-owned subsidiary of PNM, operates an advanced meter servicing business in
California and Nevada, offers energy and water management solutions for
government and institutional clients in the Southwest, and is assisting
e-commerce provider AMDAX.com in launching an Internet-based energy auction
system. PNM stock is traded primarily on the NYSE under the symbol PNM.
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Exhibit 99.1 (continued)
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30 September 30 September 30
------------------------- ------------------------- -------------------------
2000 1999 2000 1999 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Operating Revenues:
<S> <C> <C> <C> <C> <C> <C>
Electric .................................... $ 444,101 $ 299,767 $ 943,681 $ 697,073 $ 1,158,585 $ 895,460
Gas ......................................... 55,133 38,249 204,193 171,432 269,472 231,580
Unregulated businesses ...................... 243 2,588 1,935 6,288 4,502 6,721
----------- ----------- ----------- ----------- ----------- -----------
Total operating revenues .................. 499,477 340,604 1,149,809 874,793 1,432,559 1,133,761
----------- ----------- ----------- ----------- ----------- -----------
Operating Expenses:
Cost of energy sold ......................... 316,519 180,730 664,636 399,093 797,495 499,803
Operation and maintenance costs ............. 84,317 89,416 251,699 260,596 344,860 356,601
Depreciation and amortization ............... 23,022 23,313 69,664 69,739 92,586 93,348
Taxes, other than income taxes .............. 9,103 9,652 25,234 27,821 31,497 38,260
Income taxes................................. 19,064 7,218 32,523 22,954 34,579 25,624
----------- ----------- ----------- ----------- ----------- -----------
Total operating expenses .................. 452,025 310,329 1,043,756 780,203 1,301,017 1,013,636
----------- ----------- ----------- ----------- ----------- -----------
Operating income .......................... 47,452 30,275 106,053 94,590 131,542 120,125
----------- ----------- ----------- ----------- ----------- -----------
Other Income and Deductions, Net of Tax........ 15,569 8,455 29,827 20,867 39,162 31,395
----------- ----------- ----------- ----------- ----------- -----------
Income before interest charges ............ 63,021 38,730 135,880 115,457 170,704 151,520
Net Interest Charges .......................... 16,108 17,329 49,029 52,754 66,942 70,412
----------- ----------- ----------- ----------- ----------- -----------
Net Earnings from Continuing Operations ....... 46,913 21,401 86,851 62,703 103,762 81,108
Discontinued Operations ....................... -- -- -- -- -- (3,704)
Cumulative Effect of a Change in
Accounting Principle, Net of Tax ............ -- -- -- 3,541 -- 3,541
----------- ----------- ----------- ----------- ----------- -----------
Net Earnings .................................. 46,913 21,401 86,851 66,244 103,762 80,945
Preferred Stock Dividend Requirements ......... 147 147 440 440 586 586
----------- ----------- ----------- ----------- ----------- -----------
Net Earnings Applicable to Common Stock ....... $ 46,766 $ 21,254 $ 86,411 $ 65,804 $ 103,176 $ 80,359
=========== =========== =========== =========== =========== ===========
Earnings (Loss) Per Share of Common
Stock (Basic): Continuing Operations ......... $ 1.19 $ 0.52 $ 2.18 $ 1.51 $ 2.59 $ 1.95
=========== =========== =========== =========== =========== ===========
Net Earnings .................................. $ 1.19 $ 0.52 $ 2.18 $ 1.60 $ 2.59 $ 1.95
=========== =========== =========== =========== =========== ===========
Average Shares Outstanding (Basic) ............ 39,363 40,774 39,623 41,127 39,912 41,290
=========== =========== =========== =========== =========== ===========
Earnings (Loss) Per Share of Common
Stock (Diluted): Continuing Operations ....... $ 1.18 $ 0.52 $ 2.17 $ 1.51 $ 2.58 $ 1.95
=========== =========== =========== =========== =========== ===========
Net Earnings .................................. $ 1.18 $ 0.52 $ 2.17 $ 1.60 $ 2.58 $ 1.94
=========== =========== =========== =========== =========== ===========
Average Shares Outstanding (Diluted) .......... 39,651 40,867 39,749 41,201 40,016 41,378
=========== =========== =========== =========== =========== ===========
Dividends Paid Per Share of Common Stock ...... $ 0.20 $ 0.20 $ 0.60 $ 0.60 $ 0.80 $ 0.80
=========== =========== =========== =========== =========== ===========
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