f8k_011708pnmr.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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January 17, 2008
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(January 12, 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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001-06986
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Public
Service Company of New Mexico
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85-0019030
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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
1.01
Entry into 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. (“PNMR”), 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 that is conditioned upon the closing of the transactions
contemplated by the Gas Assets Agreement, on January 12, 2008, PNMR and PNM
Merger Sub LLC, a newly formed subsidiary of PNMR, entered into an Agreement
and
Plan of Merger (the “Texas Merger Agreement”) with Continental and Cap Rock
Holding Corporation (“CRHC”), which is a subsidiary of
Continental. Under the terms of the Texas Merger Agreement, PNMR will
acquire 100% ownership of CRHC and its subsidiaries, including Cap Rock Energy,
which operate an electric distribution and transmission business serving
approximately 36,000 customers in 28 counties in north, west and central
Texas for $202.5
million in cash, subject to adjustment for the changes in certain components
of
working capital , and subject to
the condition that the outstanding indebtedness of CRHC and its subsidiaries
is
eliminated at or prior to closing.
PNMR
expects to use the net proceeds of these transactions to retire debt, fund
future electric capital expenditures and for other corporate
purposes.
The
Gas
Assets Agreement and the Texas Merger Agreement each contain a number of
customary representations and warranties and indemnification provisions as
well
as closing conditions, including regulatory and third party
approvals. The parties may terminate each of the agreements under
certain circumstances and may be obligated to pay a termination fee in
connection therewith. The sale of the natural gas operations is
subject to, among other conditions, receiving approval from the New Mexico
Public Regulation Commission, the Federal Energy Regulatory Commission and
anti-trust review under the Hart-Scott-Rodino Act. PNMR’s acquisition
of the Texas electric operations also requires anti-trust review as well as
approval by the Federal Energy Regulatory Commission and the Public Utility
Commission of Texas. Pending all approvals, the transactions are expected to
close by year-end 2008.
There
are
no material relationships between the PNMR and Continental parties other than
in
respect of the transactions described herein.
Item
8.01
Other Events.
PNMR
issued a press release announcing the above-described transactions on January
14, 2008. The press release is furnished herewith as Exhibit
99.1.
Item
9.01
Financial Statements and Exhibits.
(c)
Exhibits:
Exhibit
Number
Description
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99.1
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Press
Release dated January 14, 2008.
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Safe
Harbor Statement under the Private Securities Litigation Reform Act of
1995
Statements
made in this report and other
documents that PNMR and PNM file with the Securities and Exchange Commission
(“SEC”) that relate to future events or PNMR’s and PNM’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 and PNM assume no
obligation to update this information.
Because
actual results may differ
materially from those expressed or implied by these forward-looking statements,
PNMR and PNM caution readers not to place undue reliance on these
statements. PNMR’s and PNM’s business, financial condition, cash flow
and operating results are influenced by many factors, which are often beyond
their 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 joint venture EnergyCo LLC (“EnergyCo”) is unable to identify and
implement profitable acquisitions, including development of the Cedar Bayou
Generating Station, or that PNMR and ECJV Holdings, L.L.C. will not agree to
make additional capital contributions to EnergyCo, the potential unavailability
of cash from PNMR’s subsidiaries or EnergyCo due to regulatory, statutory or
contractual restrictions, the outcome of any appeals of the Public Utility
Commission of Texas order in the stranded cost true-up proceeding, the ability
of First Choice Power to attract and retain customers, changes in Electric
Reliability Council of Texas protocols, changes in the cost of power acquired
by
First Choice Power, collections experience, insurance coverage available for
claims made in litigation, fluctuations in interest rates, conditions affecting
PNMR’s and PNM’s ability to access the financial markets, including
actions by the ratings agencies affecting the PNMR’s and PNM’s credit ratings,
or EnergyCo’s access to additional
debt financing following the utilization of its existing credit facility,
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 the Palo Verde Nuclear Generating
Station, the San Juan Generating Station, the Four Corners Plant, and EnergyCo
generating units, and transmission systems, the ability to secure long-term
power sales, the risk that PNMR and its subsidiaries and EnergyCo 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 risks
associated with completion of generation, including pollution control equipment
at the San Juan Generating Station, and the EnergyCo Cedar Bayou Generating
Station, transmission, distribution and other projects, including construction
delays and unanticipated cost overruns, state and federal regulatory and
legislative decisions and actions, the outcome of legal proceedings, changes
in
applicable accounting principles and the performance of state, regional and
national economies, and the risk that the closings of the pending sale of
the PNM natural gas utility and pending purchase of certain Continental Energy
Systems subsidiaries may not occur due to regulatory or other
reasons. For a detailed discussion of the important factors that
affect PNMR and PNM and that could cause actual results to differ from those
expressed or implied by their forward-looking statements, please see
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in PNMR’s
and PNM’s current and future Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q and PNMR’s and PNM’s current and future Current Reports on Form
8-K, filed with the SEC.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrants
have
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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PUBLIC
SERVICE COMPANY OF NEW MEXICO
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(Registrants)
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Date: January
17, 2008
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/s/
Thomas G. Sategna
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Thomas
G. Sategna
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Vice
President and Corporate Controller
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(Officer
duly authorized to sign this
report)
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