Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q1 2015 Earnings Presentation
29 slides from Txnm Energy's earnings presentation, May 1, 2015
Slide 1: Q1 2015 Earnings Presentation
Q1 2015 Earnings Presentation May 1, 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: Q1 2015 Financial Results and Company Updates
Q1 2015 Financial Results and Company Updates Financial Results: Q1 2015 Q1 2014 Ongoing EPS $0.21 $0.18 GAAP EPS $0.18 $0.16 EPS shown on a diluted basis 2015 Guidance range of $1.50 ‐ $1.62 affirmed Company Updates: BART regulatory process Status of coal supply and participant restructuring
Slide 5: BART Regulatory Process Update
BART Regulatory Process Update Hearing Examiner BART Component Settlement Terms Recommendation Denial of CCN with ability to re‐ Additional 132 MW Approval of CCN at $26M file if coal supply and other of San Juan Unit 4 related participant restructuring agreements are substantially final Approval of
Slide 6: San Juan Agreements Status Update
San Juan Agreements Status Update Coal Supply Participant Restructuring Westmoreland Coal Company will Ownership restructuring take over operations of the mine agreement has been substantially effective January 1, 2016 finalized • Includes acquisition of 65 MW Coal pricing results in significa
Slide 7: PNM 2016 Future Test Year General Rate Case
PNM 2016 Future Test Year General Rate Case 2016 Future Test Year General Rate Case Hearing Examiner Initial Requested revenue increase of $107 million Based on 2016 future test year and 10.5% ROE Recommendation Reflects $585 million increase in rate base from Application for rates should be
Slide 8: Regulatory Update
Regulatory Update Filing Date Filed Timing Docket No. PNM: BART Filing Filed December 20, 2013 Final approval expected Q2/Q3 2015 13‐00390‐UT 2016 Future Test Year Filed December 11, 2014 Rates effective dependent upon NMPRC action 14‐00332‐UT General Rate Case regarding the Hearing Examiner’s Initi
Slide 9: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 10: San Juan Generating Station
San Juan Generating Station Coal Supply Agreement Ownership Restructuring Changes 2018 Agreement with Unit Owner MW Westmoreland Coal 1 PNM 170 Company through 2022 Tucson Electric Power Company 170 with ability to extend 4 PNM 327 City of Farmington 43 Significantly improved Los Alamos County 3
Slide 11: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales (weather‐normalized) PNM % of FY 2014 Q1 2015 vs. TNMP Sales Q1 2014 % of FY 2014 Q1 2015 vs. Residential 39% 2.0% Sales Q1 2014 Commercial 47% (4.0%) Residential 50% 2.1% Industrial 12% (2.9%) Commercial 46% 1.6% Total Retail (1.3%) Total R
Slide 12: Q1 2015 Financial Summary
Q1 2015 Financial Summary Ongoing EPS $0.01 ($0.01) $0.03 $0.21 $0.18 TNMP Corporate PNM Q1 2014 Q1 2015 12
Slide 13: PNM and TNMP: Q1 2015 vs Q1 2014 EPS (Ongoing)
PNM and TNMP: Q1 2015 vs Q1 2014 EPS (Ongoing) PNM Q1 2015 Key Performance Drivers ∆ EPS Palo Verde Unit 1 leases at half price $0.03 $0.14 Palo Verde spent fuel reimbursement $0.01 $0.11 AFUDC $0.01 Refined coal $0.01 Palo Verde Nuclear Decommissioning Trust gains $0.01 Load ($0.01) Depreciation an
Slide 14: 2015 Guidance (Ongoing) Consolidated EPS
2015 Guidance (Ongoing) 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) 14
Slide 15: Questions & Answers
Questions & Answers
Slide 16: Appendix
Appendix
Slide 17: 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 8.4% $1.02 $2.4 B $0.47 $1.49 PNM Renewables 10% / 50% $105 M 10.0% $0.07 $100 M ($0.01) $0.06 PNM FERC (2) 9‐
Slide 18: 2019 Potential Earnings Power
2019 Potential Earnings Power 2016 Earnings Potential 2019 Earnings Potential Avg Rate Base EPS Avg Rate Base Growth EPS PNM Retail (1) $2.4 B $1.49 $2.6 B $0.11 $1.60 PNM Renewables $100 M $0.06 $85 M ($0.01) $0.05 PNM FERC (2) $235 M $0.07‐$0.09 $270 M $0.01 $0.08‐$0.10 PV3 (3) ($0.05) Included in
Slide 19: 5-Year Capital Forecast
5‐Year Capital Forecast 2015 – 2019 Total Capital Plan: $2.2B PNM 2014‐2019 Rate Base CAGR: 5 ‐ 7%(1) $577 TNMP 2014‐2019 Rate Base CAGR: 5 ‐ 7% $33 $515 (In millions) $20 $121 $444 Palo Verde $93 $16 Unit 3 added to rate base $382 $79 $93 $17 $89 $302 $105 $70 $15 $134 $106 $43 $313 $65 $121 $265 $
Slide 20: Weather Impact
Weather Impact PNM Q1 2015 Q1 2014 2015 Normal(1) Heating Degree Days 1,794 1,793 1,962 Cooling Degree Days 0 0 0 EPS Impact ($0.01) ($0.01) compared to normal TNMP Q1 2015 Q1 2014 2015 Normal(1) Heating Degree Days 1,190 1,200 856 Cooling Degree Days 52 44 106 EPS Impact $0.01 $0.01 compared to nor
Slide 21: PNM Plant EAF and Outages
PNM Plant EAF and Outages 2015 ‐ 2016 Outage Schedule Duration Time Unit in Days Period 89.9% 91.8% San Juan 76.3% 73.0% 4 51 Q4 2015 66.8% 68.1% 3 12 Q4 2015 Four Corners 5 75 Q4 2015 5 25 Q1 2016 4 30 Q1‐Q2 2016 Palo Verde 3 30 Q2 2015 2 30 Q4 2015 1 34 Q2 2016 San Juan Four Corners Palo Verde 3 3
Slide 22: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 23: Liquidity as of April 24, 2015
Liquidity as of April 24, 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 4/24/15: Short‐term debt and LOC balances $3.2 $0.1 $7.7 $11.0 Remaining availability 446.8 74.9 292.3 814.0 Invested
Slide 24: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2014 Mar 31, 2015 Long‐Term Debt (incl. current portion) PNM $1,490.7 $1,490.7 TNMP 365.7 365.6 Corporate/Other 118.8 268.8 Consolidated $1,975.1 $2,125.0 Total Debt (incl. short‐term) (1) PNM $1,490.7 $1,490.7 TNMP 370.7 365.6 Corporate/Other
Slide 25: Debt Ratings
Debt Ratings S&P PNMR PNM TNMP Debt rating BBB‐(1) BBB(1) A‐(2) Outlook Positive Positive Positive Moody’s PNMR PNM TNMP Debt rating Baa3(1) Baa2(1) A2(2) Outlook Positive Positive Positive (1) Senior unsecured debt (2) Senior secured debt 25
Slide 26: Environmental Compliance
Environmental Compliance
Slide 27: 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) San Juan Unit 1 170 X X X X X San Juan Unit 2 170 X X X X San Juan Unit 3 248 X X X X Expected San Juan Unit 4 195 X X
Slide 28: Impact of Proposed Environmental Regulation
Impact of Proposed Environmental Regulation Estimated Compliance Costs Comments (PNM Share) San Juan Generating Station Clean Air Act – Regional Haze (State $91M(1) SNCR technology on 2 units; Retire 2 units. Alternative) – SNCR On November 25, 2014, EPA released a proposed rule that would revise th
Slide 29: Impact of Proposed Environmental Regulation
Impact of Proposed Environmental Regulation Estimated Compliance Costs Comments (PNM Share) Four Corners (Units 4 and 5) Final BART determination filed with EPA on December 30, 2013. Impact to Clean Air Act – Regional Haze ‐ SCR $80M PNM: SCR controls for NOx on Units 4 & 5. On November 25, 2014, EP