f8k_072208pnmr.htm
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UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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FORM
8-K
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CURRENT
REPORT
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PURSUANT
TO SECTION 13 OR 15(d) OF THE
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SECURITIES
EXCHANGE ACT OF 1934
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Date
of Report (Date of earliest event
reported)
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July
22, 2008
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(July
22, 2008)
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Commission
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Name
of Registrants, State of Incorporation,
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I.R.S.
Employer
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File
Number
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Address
and Telephone Number
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Identification
No.
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001-32462
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PNM
Resources, Inc.
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85-0468296
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(A
New Mexico Corporation)
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Alvarado
Square
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Albuquerque,
New Mexico 87158
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(505)
241-2700
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______________________________
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(Former
name, former address and former fiscal year, if changed since last
report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)
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Pre-commencement
communications pursuant to Rule 13e-4 (c) under the Exchange Act
(17 CFR 240.13e-4(c)
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Item
1.02. Termination of a Material
Definitive Agreement.
On
January 12, 2008, Public Service Company of New Mexico (“PNM”), a wholly owned
public utility subsidiary of PNM Resources, Inc. (the “Company”), entered into
an Asset Purchase Agreement (the “Gas Assets Agreement”) with Continental Energy
Systems LLC (“Continental”) and New Mexico Gas Company, Inc. (“NMGC”), a
subsidiary of Continental, for the sale of PNM’s natural gas operations to NMGC
for $620 million in cash, subject to adjustment. In a separate
transaction on January 12, 2008, the Company and PNM Merger Sub LLC, a
subsidiary of the Company, entered into an Agreement and Plan of Merger (the
“Texas Merger Agreement”) with Continental and Cap Rock Holding Corporation
(“CRHC”), a subsidiary of Continental, under which the Company would acquire
100% ownership of CRHC and its subsidiaries, including Cap Rock Energy, for
$202.5 million in cash, subject to adjustment and conditions.
It has
been decided that Continental will retain CRHC and its
subsidiaries. As such, the parties have jointly agreed to the
termination of the Texas Merger Agreement effective July 22, 2008. In
order to retain the Cap Rock business, the sale of which was always dependent on
the closing of the PNM gas sale, Continental has agreed as part of the
termination negotiations to pay PNM Resources $15 million, but only upon the
closing of the PNM gas sale. The parties will focus efforts on the
sale of PNM’s natural gas operations to NMGC. The sale of the natural
gas operations is expected to close by year-end 2008.
There are
no material relationships between the Company and Continental and its
subsidiaries other than in respect of the transactions described
herein.
The
Company issued a press release announcing the termination of the Texas Merger
Agreement on July 22, 2008. The press release is furnished herewith
as Exhibit 99.1.
Item
8.01. Other Events.
On
February 11, 2008, the Company provided annual earnings guidance and identified
several drivers as having a significant impact on the Company’s annual financial
performance. Among those drivers was projected customer growth and strong
performance by the Company’s competitive retail electric provider in Texas,
First Choice Power (“FCP”).
For
the second quarter 2008, compared with the same period in 2007, FCP has
incurred higher purchased power costs, which are expected to result in
significantly lower retail margins per megawatt-hour, and lower-than-expected
customer growth and energy sales.
Preliminary results for
the second quarter this year show FCP’s retail customer count has increased
1.7 percent and megawatt-hour sales were flat, compared with the same period in
2007. Average retail margins for the quarter ended June 30 are expected to be
approximately $3 per megawatt-hour.
While
financial results for the Company in any particular quarter are
affected by many factors inherent to each business segment, it is expected that
FCP’s quarterly performance will impact the Company’s quarter and
year-to-date results.
The
impact of FCP’s performance and other factors will be discussed in the Company’s
second quarter earnings news release and during the analyst and investor
conference call, both scheduled for August 11.
Safe
Harbor Statement under the Private Securities Litigation Reform Act of
1995
Statements
made in this Form 8-K that relate to future events or PNMR’s expectations,
projections, estimates, intentions, goals, targets and strategies, are made
pursuant to the Private Securities Litigation Reform Act of
1995. Readers are cautioned that all forward-looking statements are
based upon current expectations and estimates and PNMR assumes no obligation to
update this information. Because actual results may differ materially from those
expressed or implied by these forward-looking statements, PNMR cautions readers
not to place undue reliance on these statements. PNMR’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
state and federal regulatory and legislative decisions and actions, the ability
of FCP to attract and retain customers, changes in ERCOT protocols, changes in
the cost of power acquired by FCP, collections experience, insurance coverage
available for claims made in litigation, fluctuations in interest rates,
weather, 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 outcome of legal proceedings, changes in applicable accounting
principles, the performance of state, regional, and national economies and the
risk that the closing of the pending sale of the PNM natural gas utility may not
occur due to regulatory or other reasons.
Item
9.01. Financial Statements and
Exhibits.
Exhibit
Number
Description
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99.1
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Press
Release dated July 22, 2008.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on their behalf by the undersigned
thereunto duly authorized.
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PNM
RESOURCES, INC.
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(Registrant)
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Date: July
22, 2008
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/s/
Thomas G. Sategna
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Thomas
G. Sategna
Vice
President and Corporate Controller
(Officer
duly authorized to sign this
report)
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