content_image/102307.jpg content_image/102308.jpg content_image/102309.jpg content_image/102310.jpg content_image/102311.jpg
## NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003, 2002, 2001 

## Corporate and Other 

The Holding Company performs substantially all of the corporate activities of PNM. These activities are billed to PNM on a cost basis to the extent they are for the corporate management of PNM and are allocated to the operating segments. The Holding Company’s wholly-owned subsidiary, Avistar, was formed in August 1999 as a New Mexico corporation and is currently engaged in certain unregulated and non-utility businesses. In January 2002, Avistar was dividended by PNM to the Holding Company pursuant to an order from the PRC. 

Summarized financial information by business segment for the year ended December 31, 2003 is as follows (In thousands): 

<img src='content_image/102307.jpg'>

<img src='content_image/102308.jpg'>

(a) Reflects EITF 03-11 impact, under which wholesale revenues and the associated cost of energy of $15.0 million are reclassified to a net margin basis in accordance with GAAP. 

(b) Includes $9.5 million write-off of transition costs, net of tax benefit of $7.2 million, due to the repeal of deregulation in New Mexico, and the $10.0 million write- off related to refinancing of long-term debt, net of tax benefit of $6.6 million, reduced consolidated net earnings. 

Summarized financial information by business segment for the year ended December 31, 2002 is as follows (In thousands): 

<img src='content_image/102309.jpg'>

<img src='content_image/102310.jpg'>

(a) Reflects EITF 02-3 impact, under which wholesale revenues and the associated cost of energy of $74.0 million are reclassified to a net margin basis in accordance with GAAP. 

(b) Includes re-alignment costs due to the negative impact on the wholesale market uncertainty of $5.3 million, net of tax benefit of $3.5 million, and severance costs due to a workforce reduction of $0.9 million, net of tax benefit of $0.6 , which reduced consolidated operating income and net earnings. 

(c) The Company recognized a $1.5 million gain, net of tax expense of $1.0 million, from the reversal of a reserve due to the successful resolution of litigation stemming from the terminated Western Resources transaction, which was offset by a $2.7 write-off, net of tax benefit of $1.9 million, of a transmission line project. 

Summarized financial information by business segment for the year ended December 31, 2001 is as follows (In thousands): 

<img src='content_image/102311.jpg'>

## NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003, 2002, 2001 

