Business Context and Reporting Period
This Form 8-K, filed on October 27, 2003, reports on PNM Resources, Inc. and its principal subsidiary, Public Service Company of New Mexico. The filing incorporates a press release dated October 23, 2003, announcing estimated results of operations for the third quarter and the nine months ended September 30, 2003. PNM Resources is an energy holding company serving approximately 450,000 natural gas and 390,000 electric customers in New Mexico, with additional wholesale power sales in the Western U.S.
Key Financial Metrics
Third Quarter Ended September 30, 2003 (Estimated)
- GAAP Earnings per Diluted Share: $0.41
- Ongoing Earnings per Diluted Share: $0.65 (excludes a one-time charge of $0.24 per share)
- One-Time Charge: Debt retirement costs associated with refinancing $300 million in senior unsecured notes.
Nine Months Ended September 30, 2003 (Estimated)
- GAAP Earnings per Diluted Share: $2.06
- Ongoing Earnings per Diluted Share: $1.63 (excludes one-time gain from accounting change, previously reported charge, and current quarter charge)
The filing text does not provide specific values for total revenue, operating cash flow, total debt, or liquidity ratios.
Material Changes Versus Prior Period
- Q3 Ongoing Earnings: Increased 10% to $0.65 per share compared to $0.59 per share in the same period of 2002.
- Q3 GAAP Earnings: Decreased to $0.41 per share compared to $0.45 per share in the same period of 2002, primarily due to the one-time debt retirement charge.
- YTD Ongoing Earnings: Increased 9.4% to $1.63 per share compared to $1.49 per share in the same period of 2002.
- YTD GAAP Earnings: Increased to $2.06 per share compared to $1.35 per share in the same period of 2002.
Guidance, Outlook, and Risks
Management Commentary and Drivers
Management attributed strong performance to robust retail electric demand and expansion of the wholesale electric long-term contract business, which offset retail electric rate reductions that began in September. The company refinanced $300 million in notes, extending maturities and lowering the interest coupon from 7.1% to 4.4%.
Guidance
Management reaffirmed its 2003 full-year guidance for ongoing earnings of between $1.80 and $2.05 per diluted share.
Risks and Contingencies
Forward-looking statements are subject to risks including interest rates, weather, fuel costs, supply and demand changes, wholesale power prices, market liquidity, competitive environment, performance of generating units, regulatory decisions, legal proceedings, and economic conditions.
Investor Verification Checklist
- Verify final third-quarter results when announced on October 30, 2003.
- Confirm the impact of the $300 million debt refinancing on future interest expense and cash flow.
- Monitor the effect of retail electric rate reductions on future revenue stability.
- Review the reconciliation of non-GAAP "ongoing earnings" to GAAP measures in the final 10-Q filing.
- Assess the sensitivity of earnings to wholesale power price fluctuations and weather conditions.