PNM Resources' Ongoing Earnings Per Share Grow 15.4 Percent in 2006.First Choice Power Customer Base Grows 16.7 Percent; Twin Oaks Twin Oaks may refer to any of the following:
ALBUQUERQUE, N.M. -- PNM Resources PNM Resources NYSE: PNM is an energy holding company based in the U.S. state of New Mexico. Headquartered in Albuquerque, PNM Resources supplies electricity to 725,000 homes and businesses in New Mexico and Texas and natural gas to 471,000 customers in New Mexico through its (NYSE NYSE See: New York Stock Exchange : PNM PNM Public Service Company of New Mexico PNM People's National Movement (Trinidad) PNM Perpustakaan Negara Malaysia (National Library, Malaysia) PNM Price Negotiation Memorandum ) 2006 YEAR-END HIGHLIGHTS * 2006 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). (generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ) earnings increased to $122.1 million, or $1.73 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share * Ongoing earnings per diluted share (excluding non-recurring charges) increased 15.4 percent to $1.80 from $1.56 in 2005 * Twin Oaks Power acquisition accounted for 19 percent of ongoing earnings per share * PNM San Juan San Juan, city, Argentina San Juan (săn wän, Span. sän hwän), city (1991 pop. 353,476), capital of San Juan prov., W Argentina. It is a commercial and industrial center in an agricultural region. Generating Station had its second-best year * PNM weather-normalized electric load grew 4.2 percent 4th QUARTER HIGHLIGHTS * GAAP reported earnings increased to $0.49 per diluted share from $0.10 in 2005 * Ongoing earnings increased 26.8 percent to $0.52 per diluted share * PNM weather-normalized electric load grew 3.6 percent * Cold weather boosts gas volumes 7.7 percent; customer growth of 2.4 percent PNM Resources (NYSE: PNM) today reported unaudited 2006 consolidated ongoing earnings per diluted share of $1.80, compared with $1.56 in 2005. The company also reported unaudited 2006 consolidated GAAP earnings per diluted share of $1.73, compared with $1.00 in 2005. Ongoing earnings exclude acquisition-related costs and other non-recurring charges. A reconciliation of ongoing earnings to GAAP earnings is provided on Schedule 1. "2006 marked the fourth year in a row that we surpassed our earnings growth target of 5 percent to 6 percent annually," said Jeff Sterba, PNM Resources chairman, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our 2006 results reflect the addition of Twin Oaks, strong growth from First Choice Power and increased wholesale marketing activity." Sterba said 2006 results also reflect the under-earning performance of the PNM gas and electric utility. In 2006, PNM's gas operations earned a 2.8 percent return on equity, based on a rate base of $409.2 million and a capital structure that consists of 51.8 percent equity, as filed in the recent gas rate case. The electric business earned an estimated 6.4 percent return on equity in 2006, based on an estimated rate base of $1.2 billion and capital structure of 51.4 percent equity. 2006 FULL-YEAR PERFORMANCE SUMMARY Strong PNM weather-normalized electric load growth of 4.2 percent, combined with the addition of Twin Oaks and improved wholesale marketing, helped to increase ongoing net earnings available for common stock by 22.3 percent to $126.9 million, compared with 2005. Customer growth of 16.7 percent at First Choice Power and strong performance from base-load coal plants also contributed to earnings. San Juan's equivalent availability factor The availability factor of a power plant is the amount of time that it is able to produce electricity over a certain period, divided by the amount of the time in the period. Occasions where only partial capacity is available may or may not be deducted. , or EAF EAF - Effort Adjustment Factor , was 89.6 percent in 2006, marking the second-best performance year in the plant's history. The Four Corners Plant also had superior performance, finishing the year with an EAF of 90.5 percent. Performance at the Palo Verde Nuclear Generating Station The Palo Verde Nuclear Generating Station, a nuclear power plant located in Wintersburg, Arizona, about 45 miles (80 km) west of central Phoenix, is currently the largest nuclear generation facility in the United States, producing over 30,000 gigawatt hours of electricity annually , particularly the extended outage out·age n. 1. A quantity or portion of something lacking after delivery or storage. 2. A temporary suspension of operation, especially of electric power. of Unit 1, resulted in an estimated $10.4 million decrease to margin, compared with 2005. For the year, Palo Verde had an EAF of 70.0 percent. Total financing at PNM Resources associated with short-term borrowing and the TNP TNP The New Paper (Singapore newspaper) TNP Tratado de No Proliferación Nuclear (French) TNP Trattato di Non Proliferazione Nucleare (Italian) acquisition impacted earnings by $0.18 per diluted share. Other financing resulted in a decrease of $0.03 per share. Strong retail growth in PNM's gas and electric operations was partially offset by the September 2005 electric rate decrease and reduced natural gas usage. Rate decreases for TNMP-New Mexico also reduced earnings. FOURTH QUARTER SUMMARY Consolidated ongoing earnings for the final three months of 2006 grew 26.8 percent to $0.52 per diluted share, compared with $0.41 per diluted share in 2005. GAAP earnings increased to $0.49 per diluted share for the fourth quarter of 2006, compared with $0.10 per diluted share in 2005. Regulated operations results were flat, quarter-over-quarter, as PNM weather-normalized electric load growth of 3.6 percent and increased PNM gas volumes due to cold weather and customer growth were partially offset by TNMP's electric rate decrease in New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). that took effect January 1, 2006, and higher PNM operating costs operating costs npl → gastos mpl operacionales . Unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing" regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature" 2. operations increased ongoing earnings per share by $0.13, mainly due to the addition of Twin Oaks, which contributed $0.09 earnings per share. SEGMENT REPORTING segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four Regulated Operations PNM - a natural gas and vertically integrated electric utility in New Mexico with distribution, transmission and generation assets. Electric: * PNM electric operations reported 2006 operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of $592.1 million, a 3.2 percent increase from 2005. Gross margin increased slightly to $403.3 million. Weather-normalized load growth of 4.2 percent and strong performance at San Juan and Four Corners was partially offset by reduced performance at Palo Verde and the impact of the September 2005 electric rate decrease. * For the year, Palo Verde outages resulted in higher power Higher power is a term used in a 12-step program, such as Alcoholics Anonymous, to describe "a power greater than yourself." Although many participants equate their higher power with God, a belief in God or in formal religion is not mandatory; the higher power is intended as a purchase costs and reduced margin by $2.2 million. Gas: * PNM gas operations reported 2006 operating revenues of $508.8 million, a slight decrease compared with 2005. Gross margin for the year was relatively flat compared with 2005, ending at $147.0 million. * Customer growth of 2.3 percent was offset by reduced consumption. TNMP TNMP Texas New Mexico Power (Company) Electric - a vertically integrated electric utility in New Mexico and a transmission-distribution company in Texas. * 2006 consolidated results reflect TNMP's contribution for an entire year, compared with the post-acquisition period of June 6 - December 31 in 2005. TNMP reported 2005 post-acquisition operating revenues of $154.3 million and gross margin of $96.3 million. * Comparing full-year results, TNMP reported 2006 operating revenues of $257.0 million, a decrease of 3.8 percent. * Gross margin decreased 6.8 percent to $154.0 million for the year. Reduced usage and rate reductions in Texas and New Mexico more than offset modest customer growth and the collection of competitive transition charge revenues that began in December 2006. Unregulated Operations Wholesale - a business segment consisting of sales into wholesale markets. * Wholesale reported 2006 operating revenues of $705.5 million, an increase of 12.3 percent compared with 2005. * Gross margin increased nearly 125 percent to $191.4 million. The addition of Twin Oaks added $86.3 million to margin, $68.3 million of which is primarily associated with the amortization of an under-market contract. Stronger marketing activities more than offset poor Palo Verde performance, which reduced margin by $8.2 million. First Choice Power - a competitive retail electric provider in Texas. * PNM Resources' 2006 consolidated results reflect First Choice Power's contribution for an entire year, compared with the post-acquisition period of June 6 - December 31 in 2005. First Choice Power reported 2005 post-acquisition operating revenues of $316.3 million and gross margin of $73.3 million. * Comparing full-year results, First Choice Power 2006 operating revenues increased 18.7 percent to $584.9 million and gross margin increased 31.7 percent to $129.8 million. Customer growth and lower gas prices were partially offset by reduced usage. * Total customers increased to 245,674, or 16.7 percent, compared with 2005. 2007 EARNINGS GUIDANCE PNM Resources today also provided earnings guidance for 2007. The company estimates 2007 ongoing earnings will range between $1.80 and $2.00 per diluted share. The guidance range includes a successful outcome of the $20.7 million proposed increase to PNM gas delivery fees. Any potential growth through acquisitions by the newly established joint venture, EnergyCo, is not included in the range. CAPITAL BUDGET AND FORECAST PNM Resources estimates capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. for the period 2007 through 2011 to be approximately $1.95 billion, with budgeted capital spending for 2007 of approximately $353 million. 2006 actual capital spending of $323 million was approximately $35 million less than expected, mainly because of numerous summer rainstorms and subsequent flooding that delayed construction at the Afton Generating Station. However, the project remains on schedule and those funds will be spent in 2007. The capital plan also includes expenditures necessary for utility and generation additions to serve customer and load growth in PNM's and TNMP's service territories, emission-reduction projects at San Juan and Four Corners and the replacement of the Unit 3 steam generators A steam generator is a device used to boil water to create steam. It may refer to:
DIVIDEND INCREASED 4.6 PERCENT FOR 2007 PNM Resources also announced today its Board of Directors approved a 4.6 percent increase in the company's common stock dividend for an indicated annual rate of $0.92 per share. Today's action raises the next quarterly dividend to $0.23 per share, payable May 18 to PNM Resources shareholders of record as of May 1, 2007. Since February 2004, the Board has voted to increase the dividend from an indicated annual rate of $0.64 to $0.92, or 43.8 percent. PNM Resources targets a common stock dividend payout ratio Dividend Payout Ratio The percentage of earnings paid to shareholders in dividends. Calculated as: of 50 to 60 percent of consolidated earnings. COMPANY UPDATES PNM Gas Rate Case: In May 2006, PNM filed for $20.7 million increase to gas delivery fees for the maintenance and expansion of the natural gas transmission and distribution system, even during times of reduced consumption. A recommended decision is expected in March. If approved by the New Mexico Public Regulation Commission, the new fees would take effect during the second quarter. Electric Rate Case: PNM expects to file a proposal to adjust electric rates by the end of February. Details of the rate case will be provided through a news release on the date of filing. Afton Expansion: The conversion and expansion of the Afton facility is scheduled for completion in the summer. Afton is being expanded from 141 megawatts to 235 megawatts and converted from a combustion combustion, rapid chemical reaction of two or more substances with a characteristic liberation of heat and light; it is commonly called burning. The burning of a fuel (e.g., wood, coal, oil, or natural gas) in air is a familiar example of combustion. turbine turbine, rotary engine that uses a continuous stream of fluid (gas or liquid) to turn a shaft that can drive machinery. A water, or hydraulic, turbine is used to drive electric generators in hydroelectric power stations. unit to a combined-cycle facility. 2006 EARNINGS and 2007 EARNINGS GUIDANCE CALL PNM Resources will conduct its 2006 earnings conference call and Web cast for investors and analysts at 9 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy on Wednesday, Feb. 14. Participants in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. call: (866) 356-4441 Participants outside the United States call: (617) 597-5396 Pass code: 79897207 The call will be broadcast live and the presentation available at www.PNMResources.com. A transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record of the call also will be on PNM Resources' Web site as soon as possible. A replay of the conference call will be available through Feb. 21, 2007: Participants in the United States call: (888) 286-8010 Participants outside the United States call: (617) 801-6888 Pass code: 70123333 Background: PNM Resources is an energy holding company based in Albuquerque, N.M., with 2006 consolidated operating revenues of $2.5 billion. Through its utility and energy subsidiaries, PNM Resources serves electricity to nearly 809,000 homes and businesses in New Mexico and Texas and natural gas to 490,000 customers in New Mexico. Its utility subsidiaries are PNM and Texas-New Mexico Power. Other subsidiaries include First Choice Power, a deregulated competitive retail electric provider in Texas, and Avistar, an energy research and development company. With generation resource of more than 2,770 megawatts, PNM Resources and its subsidiaries sell power on the wholesale market throughout the Southwest, Texas and the West. The company also owns a 50-percent share of an energy joint venture with Cascade A connected series of devices or images. It often implies that the second and subsequent device takes over after the previous one is used up. For example, cascading tapes in a dual-tape backup system means the second tape is written after the first one is full. Investment, L.L.C. For more information, visit PNMResources.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 Statements made in this news release that relate to future events or the Company's expectations, projections, estimates, intentions, goals, targets and strategies are made pursuant to the Private Securities Litigation Reform Act of 1995. You are cautioned that all forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. are based upon current expectations and estimates and the Company assumes no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, the Company cautions you not to place undue reliance on these statements. The Company's business, financial condition, cash flow and operating results are influenced by many factors, which are often beyond its control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. These factors include the risk that the new limited liability company in which the Company has a 50% interest, and which temporarily is named "EnergyCo," is unable to identify and implement profitable acquisitions, the potential unavailability of cash from the Company's subsidiaries due to regulatory, statutory and contractual restrictions, the outcome of any appeals of the Public Utility Commission of Texas order in the stranded strand 1 n. The land bordering a body of water; a beach. v. strand·ed, strand·ing, strands v.tr. 1. To drive or run ashore or aground. 2. cost true-up proceeding, the ability of First Choice Power to attract and retain customers, changes in Electric Reliability Council of Texas  The Electric Reliability Council of Texas (ERCOT) formed in 1970, as the successor to the Texas Interconected System (TIS). protocols, changes in the cost of power acquired by First Choice Power,
collections experience, insurance coverage available for claims made in
litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.When a person begins a civil lawsuit, the person enters into a process called litigation. , fluctuations in interest rates, conditions in the financial markets affecting the Company's permanent financing Permanent financing Long-term financing using either debt or equity. permanent financing The long-term financing that supports a long-term asset. for the Twin Oaks power plant acquisition, weather, water supply, changes in fuel costs, availability of fuel supplies, 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, changes in the competitive environment in the electric and natural gas industries, the performance of generating units, including PVNGS PVNGS Palo Verde Nuclear Generating Station , and transmission systems, the market for electrical generating equipment, the ability to secure long-term power sales, the risks associated with completion of the construction of generation, including pollution control equipment at the San Juan Generating Station and the expansion of the Afton Generating Station, transmission, distribution and other projects, including construction delays and unanticipated cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor , state and federal regulatory and legislative decisions and actions, the risk that the Company and its subsidiaries 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 outcome of legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. , changes in applicable accounting principles and the performance of state, regional and national economies. For a detailed discussion of the important factors that affect the Company and that could cause actual results to differ from those expressed or implied by the Company's forward-looking statements, please see "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" in the Company's current and future Annual Reports on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. and the Company's current and future Current Reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. , filed with the SEC. [TABLE OMITTED] [TABLE OMITTED] (a)Diluted shares used to calculate ongoing earnings per share assume that 3,910,000 shares of PNM Resources common stock issued in March 2005 for the TNP acquisition financing instead were issued June 6, 2005, the closing date of the TNP acquisition. [TABLE OMITTED] The following table shows PNM Electric revenues by customer class and average customers: [TABLE OMITTED] The amounts for average customers reflect traditional electric customers only and do not include transmission customers. The following table shows PNM Electric sales by customer class:
PNM Electric Sales > > >
> > >
> > Year >
> > December >
> > 2006 >
2005
Variance
> > (Megawatt >
> > >
Residential > > 2,764,299 >
2,652,475
111,824
Commercial > > 3,635,423 >
3,526,133
109,290
Industrial > > 1,327,287 >
1,277,156
50,131
Other > > 258,294 >
256,202
2,092
Total > > 7,985,303 >
7,711,966
273,337
The megawatt meg·a·watt n. Abbr. MW One million watts. meg  a·watt hours shown above reflect traditional electric
revenues only; transmission does not have associated megawatt hours in a
comparable fashion.The following table shows TNMP Electric revenues by customer class and average customers: [TABLE OMITTED] The following table shows TNMP Electric sales by customer class: [TABLE OMITTED] (1) Under the Texas Electric Choice Act, customers of TNMP in Texas have the ability to choose First Choice or any other Retail Electric Provider ("REP") to provide energy; however, TNMP delivers energy to customers within TNMP's service area regardless of the REP chosen. Therefore TNMP earns revenue for that delivery and First Choice earns revenue on the usage of that energy by its customers. The average customers reported above include 144,866 and 156,617 customers of TNMP at December 31, 2006 and 2005, respectively, who have chosen First Choice as their REP. The megawatt hours reported include 2,332,098 and 2,587,109 megawatt hours used by customers of TNMP during the year ended December 31, 2006 and 2005, respectively, who have chosen First Choice as their REP. These customers and megawatt hours are also included below in the First Choice segment. For PNMR consolidated reporting purposes, these are included only once in the consolidated amounts. The following table shows PNM Gas revenues by customer class and average customers: [TABLE OMITTED] The following table shows PNM Gas throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. by customer class: [TABLE OMITTED] (1) Customer-owned gas. The following table shows Wholesale revenues by customer class:
Wholesale Revenues > > >
> > >
> > Year >
> > December >
> > 2006 >
2005
Variance
> > (In thou- >
> > >
Long-term contracts > > $ 283,411 >
$ 154,692
$ 128,719
Short-term sales (1) > > 422,104 >
473,336
(51,232)
Total > > $ 705,515 >
$ 628,028
$ 77,487
The following table shows Wholesale sales by customer class:
Wholesale Sales > > >
> > >
> > Year Ended >
> > December >
> > 2006 >
2005
Variance
> > (Megawatt >
> > >
Long-term contracts > > 4,331,374 >
2,516,907
1,814,467
Short-term sales > > 7,207,172 >
8,069,751
(862,579)
Total > > 11,538,546 >
10,586,658
951,888
(1) For comparative purposes, wholesale revenues for the year ended December 31, 2006 and 2005 have not been reclassified to a net margin basis in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP. The impact would be to reduce year ended December 31, 2006 and 2005 short-term sales revenues by $48.5 million and $30.9 million, respectively. The following table shows First Choice revenues by customer class and average customers: [TABLE OMITTED] The following table shows First Choice sales by customer class: [TABLE OMITTED] (1) See note above in the TNMP Electric segment discussion. (2) Due to the competitive nature of First Choice's business, actual customer count at December 31 is presented in the table above as a more representative business indicator. First Choice had 224,003 average customers and 215,004 average customers for the year ended December 31, 2006 and 2005, respectively. |
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