Slide 1: 2020 Earnings Guidance
November 1, 2019 2020 Earnings Guidance December 18, 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation for PNM Resources, Inc. (“PNMR”), Public Service Company of New Mexico (“PNM”), or Texas‐New Mexico Power Company (“TNMP”) (collectively, the “Company”) that relate to future events or expectations, projections, estimates, intentions, goals,
Slide 3: Opening Remarks and Overview
Opening Remarks and Overview Pat Vincent-Collawn Chairman, President and CEO
Slide 4: Earnings Guidance and Dividend Increase
Earnings Guidance and Dividend Increase Ongoing Earnings Guidance: • Revised 2019 Ongoing EPS Guidance to $2.13 - $2.16 • 2020 Ongoing EPS Guidance of $2.16 - $2.26 Dividend Increase: • Board increased common dividend by $0.07, a 6% increase, to indicated annual rate of $1.23 per share • 10th consec
Slide 5: Regulatory Agenda
Regulatory Agenda Filing Action Timing Docket No. PNM: PNM filed July 1, 2019; NMPRC bifurcated NMPRC decision on abandonment/ Consolidated Application for San application on July 10, 2019; securitization expected by April 1, 19-00018-UT Juan (Abandonment, Abandonment/Securitization hearings schedul
Slide 6: 2020 Guidance
2020 Guidance Chuck Eldred Executive Vice President and CFO Don Tarry Vice President, Controller and Treasurer
Slide 7: Consolidated Earnings Guidance (Ongoing)
Consolidated Earnings Guidance (Ongoing) 2019 Revised Earnings Guidance $2.13 Consolidated EPS $2.16 PNM TNMP Corp/Other $1.64 – $1.65 $0.70 – $0.71 ($0.21) – ($0.20) 2020 Earnings Guidance $2.16 Consolidated EPS $2.26 PNM TNMP Corp/Other $1.67 – $1.73 $0.72 – $0.74 ($0.23) – ($0.21) 7
Slide 8: Load and Economic Conditions
Load and Economic Conditions PNM Economic indicators continue to be positive Q3 YTD 2019 Customer growth driven by economic development PNM vs. 2019E 2020E Higher data center load partially offset by Commercial Q3 YTD 2018 customer energy efficiency efforts Total Retail Load(1) 0.0% 0.0% – 1.0%
Slide 9: PNM Guidance (Ongoing)
PNM Guidance (Ongoing) PNM Ongoing EPS $1.67 - $1.73 $1.64 - $1.65 $1.54 2018 2019E 2020E • Load growth and increased rate recovery from the retail renewable rider and the FERC formula rate more than offset increased depreciation expense from new investments: • PNM’s first new transmission line cons
Slide 10: TNMP Guidance (Ongoing)
TNMP Guidance (Ongoing) TNMP Ongoing EPS $0.70 - $0.71 $0.72 - $0.74 $0.65 2018 2019E 2020E • 2019 EPS includes $0.04 of weather benefit • Continued TCOS filings to recover transmission investments twice per year; first utilization of annual DCOS filing to recover distribution investments • Continue
Slide 11: 2020 - 2023 Potential Earnings Power
2020 - 2023 Potential Earnings Power Earnings Growth Target 5-6% Equity financing plans continue to be optimized; 2020 impacts within guidance range 2020 Ongoing Earnings 2021 Earnings 2022 Earnings 2023 Earnings Allowed Return / Guidance Midpoint Potential Potential Potential Equity Avg Rate Avg Ra
Slide 12: Dividend Increase
Dividend Increase $2.68 $2.42 $2.54 $2.14 $2.21 $1.94 $2.00 $1.64 $1.65 $1.49 $1.23 $1.16 $1.06 Dec ‘19 $0.88 $0.97 Dec ‘18 $0.80 Dec ‘17 $0.74 Dec ‘15 Dec ‘16 Dec ‘13 Dec ‘14 54% 56% payout payout 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E (1) Ongoing EPS Indicated Annual Dividends • Bo
Slide 13: Questions & Answers
Questions & Answers
Slide 14: Appendix
Appendix
Slide 15: San Juan Abandonment, Securitization and Replacement Power
San Juan Abandonment, Securitization and Replacement Power ● Requests ● $283M undepreciated ● Recommended Abandonment Replacement Power Securitization abandonment of San investment in San Juan, scenario balances Juan coal plant after proceeds available to environment, cost and participation fund rep
Slide 16: NMPRC Commissioners and Districts
NMPRC Commissioners and Districts Term District Name Party NMPRC Districts and Ends PNM Service Areas District 1 Cynthia Hall 2020(1) Democrat District 2 Jefferson Byrd 2022(1) Republican Valerie Espinoza, District 3 2020 Democrat Vice-Chairman Theresa Becenti-Aguilar, District 4 2022(1) Democrat Ch
Slide 17: PNM Guidance (Ongoing)
PNM Guidance (Ongoing) PNM Ongoing EPS $1.63 - $1.65 $1.67 - $1.73 $1.54 2018 2019E 2020E 2019 vs 2020 Key Year-over-Year EPS Performance Drivers Changes Retail load $0.02 – $0.05 2020 leap year impact $0.01 FERC transmission margin $0.03 – $0.05 Renewable rider $0.02 AFUDC $0.00 – $0.01 Outage cost
Slide 18: TNMP Guidance (Ongoing)
TNMP Guidance (Ongoing) TNMP Ongoing EPS $0.70 - $0.71 $0.72 - $0.74 $0.65 2018 2019E 2020E 2019 vs 2020 Key Year-over-Year EPS Performance Drivers Changes Rate relief (TCOS/DCOS) $0.15 – $0.20 Load $0.05 – $0.06 2019 weather ($0.04) O&M increases ($0.04) – ($0.02) Interest expense increases ($0.02)
Slide 19: Corporate and Other Guidance (Ongoing)
Corporate and Other Guidance (Ongoing) Corporate and Other Ongoing EPS ($0.19) ($0.21) – ($0.20) ($0.23) – ($0.21) 2018 2019E 2020E 2019 vs 2020 Key Year-over-Year EPS Performance Drivers Changes Interest expense ($0.02) – ($0.01) 19
Slide 20: 2020 Assumptions
2020 Assumptions amounts shown are before tax 2020E PNM Weather $0 (normal) Retail Load 1% = $0.03 Outage costs $11M - $13M Decommissioning/reclamation trust income, net of fees $15M - $17M Anticipated Ongoing effective tax rate (Statutory rate = 25.4%) 25.3% before amortization of excess deferred i
Slide 21: PNM Scheduled Plant Outages
PNM Scheduled Plant Outages San Juan Four Corners Palo Verde Duration Time Duration Time Duration Time Unit Unit Unit in Days Period in Days Period in Days Period No planned outages in 2020 5 76 Q1-Q2 2020 2 30 Q2 2020 4 12 Q2 2020 1 44 Q3 2020 21
Slide 22: EBITDA and Quarterly Earnings Distribution Guidance (Ongoing)
EBITDA and Quarterly Earnings Distribution Guidance (Ongoing) Ongoing EBITDA (In millions) 2019E Midpoint 2020E Midpoint Consolidated PNM Resources $573 $603 PNM $377 $390 TNMP $176 $189 2020 Quarterly Ongoing Earnings Distribution 58% 21% 14% 7% Q1 Q2 Q3 Q4 22
Slide 23: 2019 – 2023 Investment Plan
2019 – 2023 Investment Plan $3.9B investment plan results in 9.6% rate base growth $991 $21 $818 $177 $27 $27 $771 $25 $48 $694 $68 $22 $641 $109 $268 $21 $37 $72 $128 $53 $94 $77 $60 $82 $176 $182 $202 (in millions) $99 $173 $125 $345 $306 $342 $322 $337 $275 $348 $245 $255 $270 2019 2020 2021 2022
Slide 24: TNMP Investment Plan
TNMP Investment Plan 2020 Key Capital Projects • A group of transmission lines and substations in northern West Texas will be upgraded from 69kv to 138kv to support growth in that region; • In the Gulf Coast, a 138kV transmission line upgrade TNMP Investment Plan by Region will be completed to help
Slide 25: 2020 - 2023 Potential Earnings Power
2020 - 2023 Potential Earnings Power 2020 Ongoing Earnings 2021 Earnings 2022 Earnings 2023 Earnings Allowed Return / Guidance Midpoint Potential Potential Potential Equity Avg Rate Avg Rate Avg Rate Avg Rate Ratio Return EPS EPS EPS EPS Base Base Base Base 9.575% / PNM Retail(1) $2.5 B 9.5% $1.47 $
Slide 26: Liquidity and Debt Maturity Outlook
Liquidity and Debt Maturity Outlook Long-term Debt Maturities Maintain appropriate (in millions) $658 credit metrics $140 $450 $1,003 $35 $350 $346 $57 Remain a solid investment grade 2020 2021 2022 2023 and Beyond PNM TNMP Corporate rated company • Equity issuances of up to $590 million through for