Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q3 2015 Earnings Presentation
28 slides from Txnm Energy's earnings presentation, Oct 30, 2015
Slide 1: Q3 2015 Earnings Presentation
Q3 2015 Earnings Presentation October 30, 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation that relate to future events or PNM Resources’ (“PNMR”), Public Service Company of New Mexico’s (“PNM”), or Texas‐New Mexico Power Company’s (“TNMP”) (collectively, the “Company”) expectations, projections, estimates, intentions, goals, targ
Slide 3: Opening Remarks & Overview
Opening Remarks & Overview Pat Vincent‐Collawn Chairman, President and CEO
Slide 4: Q3 2015 Financial Results and Company Updates
Q3 2015 Financial Results and Company Updates Financial Results: Q3 2015 Q3 2014 YTD 2015 YTD 2014 Ongoing EPS $0.76 $0.68 $1.41 $1.25 GAAP EPS $0.76 $0.69 $1.34 $1.21 EPS shown on a diluted basis 2015 Guidance range narrowed to $1.56 ‐ $1.61 Company Updates: PNM received the 2015 ReliabilityOne™
Slide 5: BART Regulatory Process Update
BART Regulatory Process Update Terms of Settlement Regulatory Schedule Approval of an unconditional Hearings Concluded October 20 Additional 132 MW CCN with an initial book value of San Juan Unit 4 of zero plus SNCR and other Hearing Examiner capital investments Recommended Decision November Expecte
Slide 6: Regulatory Update
Regulatory Update Filing Action Timing Docket No. PNM: BART Filing Filed December 20, 2013 Final approval expected Q4 2015 13‐00390‐UT NMPRC 2016 Renewable Plan Filed June 1, 2015 Final approval expected November 2015 15‐00166‐UT Future Test Year Notice of Inquiry Issued July 15, 2015 Closed on Augu
Slide 7: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 8: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales (weather‐normalized) PNM TNMP % of FY Q3 2015 vs. YTD 2015 vs. % of FY Q3 2015 vs. YTD 2015 vs. 2014 Sales Q3 2014 YTD 2014 2014 Sales Q3 2014 YTD 2014 Residential 39% (1.1%) 0.0% Residential 50% 1.7% 3.5% Commercial 47% (2.6%) (2.2%) Commer
Slide 9: Q3 2015 Financial Summary
Q3 2015 Financial Summary Ongoing EPS $0.02 $0.01 $0.76 $0.05 $0.68 TNMP Corporate PNM Q3 2014 Q3 2015 9
Slide 10: PNM and TNMP: Q3 2015 vs Q3 2014 EPS (Ongoing)
PNM and TNMP: Q3 2015 vs Q3 2014 EPS (Ongoing) $0.60 PNM Q3 2015 Key Performance Drivers ∆ EPS AFUDC $0.04 $0.55 Palo Verde Unit 1 leases at half price $0.03 Weather $0.03 Refined coal $0.01 Palo Verde Nuclear Decommissioning Trust gains $0.01 Renewable rate relief $0.01 Other $0.01 Load ($0.03) Out
Slide 11: 2015 Guidance
2015 Guidance (Ongoing) Original 2015 Guidance Range: $1.50 Consolidated EPS $1.62 PNM TNMP Corp/Other $1.14 ‐ $1.21 $0.45 ‐ $0.48 ($0.09) – ($0.07) Narrowed 2015 Guidance Range: $1.56 Consolidated EPS $1.61 PNM TNMP Corp/Other $1.13 ‐ $1.16 $0.51 ‐ $0.52 ($0.08) – ($0.07) 11
Slide 12: 5-Year Capital Forecast
5‐Year Capital Forecast 2015 – 2019 Total Capital Plan: $2.3B PNM 2014‐2019 Rate Base CAGR: 5 ‐ 7%(1) TNMP 2014‐2019 Rate Base CAGR: 7 ‐ 9% $577 $34 $542 (In millions) Palo Verde $34 Unit 3 added to $126 rate base $113 $415 $19 $398 $14 $78 $351 $97 $103 $15 $113 $141 $117 $132 $100 $298 $127 $198 $
Slide 13: 2016 Potential Earnings Power
2016 Potential Earnings Power Allowed 2015 Guidance Mid Point 2016 Earnings Potential Return / Avg Rate Avg Rate Equity Ratio Return EPS Growth EPS Base Base PNM Retail (1) 10% / 50% $2.0 B 7.5% $0.97 $2.4 B $0.52 $1.49 PNM Retail – Timing (2) ($0.38)‐($0.22) ($0.38)‐($0.22) PNM Renewables (3) 10% /
Slide 14: 2017 and 2019 Potential Earnings Power
2017 and 2019 Potential Earnings Power 2017 Earnings Potential 2019 Earnings Potential Avg Rate Base EPS Avg Rate Base EPS PNM Retail (1) $2.4 B $1.49 $2.5 B $1.59 PNM Renewables (2) $95 M $0.06 $85 M $0.05 PNM FERC (3) $185 M $0.08‐$0.10 $275 M $0.12‐$0.15 PV3 (4) ($0.10) Included in PNM Retail Inc
Slide 15: Earnings Growth
Earnings Growth Targeted earnings growth 7% ‐ 9% Earnings Growth continues the progress made to 2015 ‐ 2019 date and seeks to maximize the earnings potential of the business $1.61 $1.49 $1.56 $1.31 $1.41 2012 2013 2014 2015E 2016E 2017E 2018E 2019E Ongoing EPS 2012 – 2014 actual results represent on
Slide 16: Questions & Answers
Questions & Answers
Slide 17: Appendix
Appendix
Slide 18: Weather Impact
Weather Impact PNM Q3 2015 Q3 2014 2015 Normal(1) Heating Degree Days 0 8 16 Cooling Degree Days 1,090 952 1,029 EPS Impact $0.00 ($0.03) compared to normal TNMP Q3 2015 Q3 2014 2015 Normal(1) Heating Degree Days 0 2 25 Cooling Degree Days 1,827 1,689 1,759 EPS Impact $0.00 ($0.01) compared to norma
Slide 19: PNM Plant EAF and Outages
PNM Plant EAF and Outages 2015 ‐ 2017 Outage Schedule Duration Time Unit in Days Period 89.5% 92.1% San Juan 77.0% 4 50 Q4 2015 69.1% 72.2% 67.3% 3 11 Q1 2016 1 28 Q1‐Q2 2017 Four Corners 81 Q1 2016 5 94 Q4 2017 4 20 Q1‐Q2 2016 Palo Verde 29 Q4 2015 2 33 Q2 2017 San Juan Four Corners Palo Verde 1 33
Slide 20: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 21: Liquidity as of October 23, 2015
Liquidity as of October 23, 2015 PNM Corporate/ Resources PNM TNMP Other Consolidated Financing Capacity(1): (In millions) Revolving credit facilities $450.0 $75.0 $300.0 $825.0 As of 10/23/15: Short‐term debt and LOC balances $3.2 $20.1 $6.2 $29.5 Remaining availability 446.8 54.9 293.8 795.5 Inves
Slide 22: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2014 Sep 30, 2015 Long‐Term Debt (incl. current portion) PNM $1,490.7 $1,590.0 TNMP 365.7 365.4 Corporate/Other 118.8 150.0 Consolidated $1,975.1 $2,105.4 Total Debt (incl. short‐term) (1) PNM $1,490.7 $1,590.0 TNMP 370.7 365.4 Corporate/Other
Slide 23: Debt Ratings
Debt Ratings PNMR S&P Moody’s Debt rating BBB(1) Baa3(1) Issuer outlook Positive Stable PNM S&P Moody’s Debt rating BBB(2) Baa2(2) Issuer outlook Positive Stable TNMP S&P Moody’s Debt rating A‐(3) A1(3) Issuer outlook Positive Stable (1) Issuer/Corporate rating (2) Senior unsecured (3) Senior secure
Slide 24: Environmental Compliance
Environmental Compliance
Slide 25: Environmental Control Equipment at Coal Units
Environmental Control Equipment at Coal Units PNM Share Low NOx Activated Coal Unit Capacity Burners/ Carbon SNCR (2) SCR (2) Baghouse (3) Scrubbers (MW) Overfired Air Injection (1) Expected San Juan Unit 1 170 X X X X 2016 San Juan Unit 2 170 X X X X San Juan Unit 3 248 X X X X Expected San Juan Un
Slide 26: Impact of Environmental Regulation- SJGS
Impact of Environmental Regulation‐ SJGS Estimated Compliance Costs San Juan Generating Station Comments (PNM Share) Clean Air Act – Regional Haze(1) $78M SNCR technology on 2 units; Retire 2 units. (State Alternative) – SNCR Balanced draft will assist with NAAQS compliance. On October 1, 2015, EPA
Slide 27: Impact of Environmental Regulation- Four Corners
Impact of Environmental Regulation‐ Four Corners Estimated Compliance Costs Four Corners (Units 4 and 5) Comments (PNM Share) Final BART determination filed with EPA on December 30, 2013. Impact to PNM: Clean Air Act – Regional Haze – SCR $91M SCR controls for NOx on Units 4 & 5. On October 1, 2015,
Slide 28: Clean Power Plan
Clean Power Plan On October 23, 2015, EPA published in the Federal Register the final Clean Power Plan (CPP) under section 111(d) of the Clean Air Act. Projected outcome = 32% reduction in CO2 in the U.S. from 2005 levels by 2030 10 New Mexico Facilities Affected Final guidelines require state