UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITES EXCHANGE ACT OF 1934
Date of Report (Date of earliest events reported) July 10, 2002
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(July 9, 2002)
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Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
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333-32170 PNM Resources, Inc. 85-0468296
(A New Mexico Corporation)
Alvarado Square
Albuquerque, New Mexico 87158
(505) 241-2700
Alvarado Square, Albuquerque, New Mexico 87158
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(Address of principal executive offices) (Zip Code)
(505) 241-2700
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Second Quarter 2002 Earnings Estimates
Item 9. Regulation FD Disclosure
The Company is filing in this Form 8-K its press release issued by the Company
on July 9, 2002 and as an exhibit its Second Quarter 2002 Earnings Estimates.
PNM Resources Lowers 2002 Earnings Estimate
ALBUQUERQUE, N.M., July 9, 2002 - Continued weakness in the wholesale power
market has caused PNM Resources (NYSE: PNM) to reduce its 2002 earnings
estimate. The company now expects operating earnings for the full year will be
in the range of $1.90 to $2.10 per share. Second quarter earnings are expected
to be in the range of 25 cents per share.
"Although the PNM electric utility continues to perform well, the depressed
level of wholesale prices in the West, coupled with the significantly decreased
trading activity in that market, has severely limited the potential of our power
marketing arm so far this year," said PNM Resources Chairman, President and
Chief Executive Officer Jeff Sterba. "We are lowering our earnings expectations
because it appears increasingly likely that these adverse conditions will
persist through the end of 2002."
Several factors, including an abundance of available hydropower from the Pacific
Northwest, cooler weather through May and June, low natural gas prices, the
number of new generating plants coming on line, and the lingering slowdown in
the regional economy have all contributed to keeping power prices down in 2002.
Additionally, fewer credit-worthy counterparties and political and regulatory
uncertainty regarding the western marketplace have significantly reduced market
liquidity and trading volume as some companies have curtailed their activity or
exited the business altogether. These factors resulted in a 25% reduction in
wholesale sales compared to the first half of 2001.
Other contributing factors include increased coal costs and lower earnings in
the gas utility business as a result of a mild spring and reduced gas sales for
electric generation in New Mexico.
"Fortunately, PNM Resources has the liquidity and the financial strength to
weather this downturn in the market," Sterba continued. "We have a steady cash
flow from our utility operations, a relatively low level of debt and a healthy
cash position. We intend to maintain this conservative financial posture."
To preserve the company's strong financial position, management will control
expenses and limit capital expenditures. Construction expenditures in 2002,
originally budgeted at $391 million, have been reduced by $111 million to $280
million for the year. Planned construction expenditures through 2003 have been
reduced in total by over $400 million.
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Although the current environment has led the company to scale back its expansion
plans, the company will continue to operate in the wholesale market. Expansion
of the PNM generating portfolio will depend upon acquiring favorably priced
assets at strategic locations and securing long-term commitments for the power
from those new plants.
"PNM has been a participant in the wholesale power market for more than a
decade and this business remains an integral part of our strategic plan," Sterba
said.
A call to discuss this revision to 2002 earnings guidance will be broadcast live
over the Internet at 9:00 a.m. EDT on Wednesday, July 10, 2002. The web cast can
be accessed through the company website at PNM.COM and will be available for
replay through
July 19, 2002.
PNM Resources plans to announce its financial results for second-quarter 2002
after the market closes on Monday, July 22.
PNM Resources is an energy holding company based in Albuquerque, New Mexico. Its
principal subsidiary is Public Service Company of New Mexico, which provides
electric power and natural gas utility services to more than 1.3 million people
in New Mexico. The company also sells power on the wholesale market in the
Western U.S. PNM Resources stock is traded primarily on the NYSE under the
symbol PNM.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
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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, wholesale
power prices, market liquidity, the performance of generating units and
transmission system and uncertainties relating to PNM's litigation with Western
Resources and related costs, and state and federal regulatory and legislative
decisions and actions, including the wholesale electric power pricing mitigation
plan ordered by the Federal Energy Regulatory Commission (FERC) on June 18,
2001, rulings issued by the New Mexico Public Regulation Commission (NMPRC)
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 FERC or NMPRC
could cause PNM operating revenues and earnings to differ from results forecast
in this news release. For a detailed discussion of the important factors
affecting PNM Resources, 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, 2001, Form 10Q for the quarter ended March 31, 2002
and Form 8-K filings with the Securities and Exchange Commission.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PNM RESOURCES, INC.
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(Registrant)
Date: July 10, 2002 /s/ John R. Loyack
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John R. Loyack
Vice President, Corporate Controller
and Chief Accounting Officer
(Officer duly authorized to sign this report)
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