Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q2 2014 Earnings Presentation
29 slides from Txnm Energy's earnings presentation, Aug 1, 2014
Slide 1: Q2 2014 Earnings Presentation
Q2 2014 Earnings Presentation August 1, 2014
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: Q2 2014 Financial Results and Company Updates
Q2 2014 Financial Results and Company Updates Q2 2014 Q2 2013 YTD 2014 YTD 2013 Ongoing EPS $0.39 $0.38 $0.57 $0.56 GAAP EPS $0.36 $0.34 $0.52 $0.48 Company narrows 2014 Guidance Range to $1.44 - $1.51 San Juan Generating Station Ownership Progress made toward resolving ownership following two
Slide 5: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales (weather-normalized) PNM % of FY Q2 2014 vs. YTD 2014 vs. TNMP 2013 Sales Q2 2013 YTD 2013 % of FY Q2 2014 vs. YTD 2014 vs. Residential 39% 0.5% (2.0%) 2013 Sales Q2 2013 YTD 2013 Commercial 46% (2.7%) (1.8%) Residential 51% 2.5% 2.5% Indust
Slide 6: BART Agreement Update
BART Agreement Update EPA Review of RSIP RSIP and BART Filing December 17, 2013: Components Application deemed complete April 30, 2014: Retirement of San Juan Units 2 EPA proposed approval and 3 and recovery of expected 12/31/17 undepreciated September 29, 2014: investments ($205M) EPA final
Slide 7: Regulatory Update
Regulatory Update Filing Action Timing Docket No. NMPRC Delta Person CCN (peaking capacity) Filed January 3, 2013 Closed July 17, 2014 13-00004-UT NMPRC La Luz CCN (peaking capacity) Filed May 17, 2013 Approved June 18, 2014 13-00175-UT NMPRC BART Filing Filed December 20, 2013 February 2015 13-0039
Slide 8: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 9: Q2 2014 Financial Summary
Q2 2014 Financial Summary Ongoing EPS $0.02 $0.01 ($0.02) $0.38 $0.39 Corporate PNM TNMP Q2 2013 Q2 2014 9
Slide 10: PNM and TNMP: Q2 2014 vs Q2 2013 EPS (Ongoing)
PNM and TNMP: Q2 2014 vs Q2 2013 EPS (Ongoing) PNM $0.30 $0.28 Q2 2014 Key Performance Drivers ∆ EPS Rate Relief $0.01 PV3 Market Prices $0.01 Outage Costs $0.01 Off System Sales Sharing $0.01 Load ($0.02) Weather ($0.02) 2003-2008 IRS Settlement ($0.02) Q2 2013 Q2 2014 TNMP $0.12 $0.10 Q2 2014 Key
Slide 11: 2014 Guidance (Ongoing)
2014 Guidance (Ongoing) Original 2014 Guidance Range: $1.42 Consolidated EPS $1.52 PNM TNMP Corp/Other $1.15 - $1.21 $0.38 - $0.40 ($0.11) – ($0.09) Narrowed 2014 Guidance Range: $1.44 Consolidated EPS $1.51 PNM TNMP Corp/Other $1.11 - $1.15 $0.43 - $0.45 ($0.10) – ($0.09) 11
Slide 12: Questions & Answers
Questions & Answers
Slide 13: Appendix
Appendix
Slide 14: PNM Plant EAF and Outages
PNM Plant EAF and Outages 90.9% 89.5% 2014 - 2015 Outage Schedule 80.2% Duration Time 77.0% 78.3% Unit in Days Period 67.0% San Juan 1 46 Q1 2015 4 46 Q4 2015 Four Corners 4 13 Q4 2014 5 73 Q1 – Q2 2015 Palo Verde 1 34 Q4 2014 San Juan Four Corners Palo Verde 3 34 Q2 2015 12 months ending 6/30/13 2
Slide 15: 5 Year Capital Forecast
Capital Forecast 2014 – 2018 Total Capital Plan: $2.3B PNM Rate Base CAGR: 6 - 8%(1) TNMP Rate Base CAGR: 5 - 7% 5 Year Capital Forecast $533 (In millions) $509 $14 $18 $489 $76 $14 $443 Palo Verde $88 $14 Unit 3 $130 $78 added to $94 rate base $71 $48 $302 $136 $72 $14 $154 $106 $316 $65 $263 $229
Slide 16: Weather Impact
Weather Impact PNM Q2 2014 Q2 2013 2014 Normal(1) Heating Degree Days 361 281 289 Cooling Degree Days 510 586 490 EPS Impact $0.00 $0.02 compared to normal TNMP Q2 2014 Q2 2013 2014 Normal(1) Heating Degree Days 78 125 42 Cooling Degree Days 990 992 1,111 EPS Impact ($0.005) $0.00 compared to normal
Slide 17: Liquidity as of July 25, 2014
Liquidity as of July 25, 2014 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 7/25/14: Short-term debt and LOC balances $45.4 $0.1 $7.7 $53.2 Remaining availability 404.6 74.9 292.3 771.8 Invested
Slide 18: Regulatory Information
Regulatory Information
Slide 19: NMPRC Commissioners and Districts
NMPRC Commissioners and Districts NMPRC Districts and Term PNM Service Areas Name District Party Ends Karen Montoya District 1 2016 Democrat Patrick Lyons District 2 2014 Republican Valerie Espinoza District 3 2016 Democrat Vice Chair Theresa Becenti-Aguilar District 4 2014 Democrat Chairman Ben Hal
Slide 20: Public Utility Commission of Texas Commissioners
Public Utility Commission of Texas Commissioners Term Term Name Party Began Ends Donna Nelson Aug. 2008 Aug. 2015 Republican Chairman Kenneth Anderson Sept. 2008 Aug. 2017 Republican Brandy Marty(1) Aug. 2013 Aug. 2019 Republican Commissioners are appointed by Governor of Texas. Length of term is de
Slide 21: Elections
Elections NM Governor’s Race TX Governor’s Race Candidate Party Current Office Candidate Party Current Office Susana Martinez Republican Governor (NM) Attorney General Incumbent Greg Abbott Republican (TX) Attorney General Gary King Democrat Wendy Davis Democrat State Senator (TX) (NM) NMPRC Race Di
Slide 22: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 23: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2013 Jun 30, 2014 Long-Term Debt (incl. current portion) PNM $1,290.6 $1,390.6 TNMP 336.0 365.9 Corporate/Other 118.8 118.8 Consolidated $1,745.4 $1,875.3 Total Debt (incl. short-term) (1) PNM $1,339.8 $1,390.6 TNMP 336.0 365.9 Corporate/Other
Slide 24: Credit Ratings
Credit Ratings S&P PNMR PNM TNMP Issuer 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 A-12
Slide 25: Environmental Compliance
Environmental Compliance
Slide 26: San Juan BART Timeline
San Juan BART Timeline Expected Actual Action Item Completion Completion EIB approval of RSIP submitted by NMED September 5, 2013 Submitted RSIP to EPA for approval October 18, 2013 EPA review and approval of RSIP Application deemed complete by EPA December 17, 2013 Preliminary approval by EPA A
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 Expected 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 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(1) (State Alternative) – SNCR $91M SNCR technology on 2 units; Retire 2 units. Included in SNCR and SCR(1) Balanced Draft , which has been included in
Slide 29: EPA’s Proposed Clean Power Plan
EPA’s Proposed Clean Power Plan The goal of the plan is an estimated 30% reduction in CO2 emissions from the U.S. electric power sector in 2030, 10 New Mexico Facilities Affected relative to 2005 levels. Coal Plants o Requires each state to develop and implement a state plan to San Juan (PNM) reduce