Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q1 2014 Earnings Presentation
28 slides from Txnm Energy's earnings presentation, May 2, 2014
Slide 1: Q1 2014 Earnings Presentation
Q1 2014 Earnings Presentation May 2, 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: Q1 2014 Financial Results and Company Updates
Q1 2014 Financial Results and Company Updates Q1 2014 Q1 2013 Ongoing EPS $0.18 $0.18 GAAP EPS $0.16 $0.13 Company affirms 2014 Guidance Range of $1.42 - $1.52 EPA proposes approval of San Juan RSIP Final approval expected later this year S&P raises outlook to positive for all entities EPS s
Slide 5: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales (weather-normalized) PNM TNMP % of FY 2013 Q1 2014 vs. % of FY 2013 Q1 2014 vs. Sales Q1 2013 Sales Q1 2013 Residential 39% (4.1%) Residential 51% 2.5% Commercial 46% (0.9%) Commercial 44% 15.8% Industrial 12% (5.0%) Total Retail 8.1% Total
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 By ~September 29, 2014: investments ($205M) EPA f
Slide 7: Regulatory Update
Regulatory Update Filing Action Timing Docket No. NMPRC Delta Person CCN (peaking capacity) Filed January 3, 2013 Approved June 26, 2013 13-00004-UT Expected closing Q2 2014 NMPRC La Luz CCN (peaking capacity) Filed May 17, 2013 Settlement filed February 20, 2014 13-00175-UT Final Order expected by
Slide 8: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 9: Q1 2014 Financial Summary
Q1 2014 Financial Summary Ongoing EPS $0.02 ($0.06) $0.04 $0.18 Corporate $0.18 TNMP PNM Q1 2013 Q1 2014 9
Slide 10: PNM and TNMP: Q1 2014 vs Q1 2013 EPS (Ongoing)
PNM and TNMP: Q1 2014 vs Q1 2013 EPS (Ongoing) PNM $0.17 Q1 2014 Key Performance Drivers ∆ EPS Rate Relief $0.01 $0.11 PV3 Market Prices $0.01 PV Nuclear Decommissioning Trust $0.01 Depreciation & Property Taxes ($0.01) Outage Costs ($0.02) Weather ($0.02) Load ($0.03) Other ($0.01) Q1 2013 Q1 2014
Slide 11: Consolidated EPS 2014 Guidance (Ongoing)
2014 Guidance (Ongoing) 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) 2014 Quarterly Earnings Distribution(1) 45% 26% 13% 16% Q1 2014E Q2 2014E Q3 2014E Q4 2014E (1) Assumes mid-point of guidance. 11
Slide 12: Questions & Answers
Questions & Answers
Slide 13: Appendix
Appendix
Slide 14: Potential Earnings Power
Potential Earnings Power 2014 2014 Mid Point 2016 Allowed Allowed Average of Guidance Expected Potential Earnings 2016 Potential Equity Return Rate Average Growth Earnings Power Ratio Return EPS Base Rate Base PNM retail 10% 50% $1.9 B 9.5% $1.09 $2.2 B $0.28(1) $1.37 PNM renewables 10% 50% $120 M 1
Slide 15: PNM Plant EAF and Outages
PNM Plant EAF and Outages 2014 - 2015 Outage Schedule Duration Time Unit 91.8% 89.9% in Days Period 80.7% 82.3% San Juan 76.3% 1 46 Q1 2015 66.8% 4 46 Q4 2015 Four Corners 4 13 Q4 2014 5 73 Q1 – Q2 2015 Palo Verde 2 34 Q2 2014 1 34 Q4 2014 3 34 Q2 2015 San Juan Four Corners Palo Verde 2 34 Q4 2015 1
Slide 16: 5 Year Capital Forecast
Capital Forecast 2014 – 2018 Total Capital Plan: $2.2B PNM Rate Base CAGR: 6 - 8% TNMP Rate Base CAGR: 5 - 7% 5 Year Capital Forecast $524 (In millions) $509 $18 $14 $489 $14 $76 $443 $88 $14 $130 $86 $94 $71 $48 $302 $72 $14 $136 $154 $106 $316 $65 $263 $212 $194 $201 $209 $159 $166 $180 $117 2014
Slide 17: Weather Impact
Weather Impact PNM Q1 2014 Q1 2013 2014 Normal(1) Heating Degree Days 1,793 2,079 1,937 Cooling Degree Days 0 0 0 EPS Impact ($0.01) $0.01 compared to normal TNMP Q1 2014 Q1 2013 2014 Normal(1) Heating Degree Days 1,200 916 948 Cooling Degree Days 44 70 103 EPS Impact $0.00 ($0.01) compared to norma
Slide 18: Liquidity as of April 25, 2014
Liquidity as of April 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 4/25/14: Short-term debt and LOC balances $3.2 $6.3 $8.6 $18.1 Remaining availability 446.8 68.7 291.4 806.9 Invested
Slide 19: Regulatory Information
Regulatory Information
Slide 20: 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 21: 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 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 Mar 31, 2014 Long-Term Debt (incl. current portion) PNM $1,290.6 $1,390.6 TNMP 336.0 335.9 Corporate/Other 118.8 118.8 Consolidated $1,745.4 $1,845.3 Total Debt (incl. short-term) (1) PNM $1,339.8 $1,390.6 TNMP 336.0 335.9 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 $82M SNCR technology on 2 units; Retire 2 units Included in SNCR and Balanced Draft , which has been included in the Reg