Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — Q2 2024 Earnings Presentation
26 slides from Txnm Energy's earnings presentation, Jul 31, 2024
Slide 1: Q2 2024 Earnings Review
Q2 2024 Earnings Review July 31, 2024 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Statements made in this news release for PNM Resources, Inc. (“PNMR”), Public Service Company of New Mexico (“PNM”), or Texas-New Mexico Power Company (“TNMP”) (collectively, the “Company”) that re
Slide 3: Overview and Highlights
Overview and Highlights ee. > wae tes ——— a = “y : r+ +—+ t-—-\ am « ¥ \ 4 \ a VED. AER. Wa SEE, TS ED eee," CANE, SA RA, WEE = ee
Slide 4: Financial Results and Company Updates
Financial Results and Company Updates Financial Results and Guidance Q2 2024 Q2 2023 YTD 2024 YTD 2023 Clean Energy Q2 2024 earnings results GAAP EPS $0.53 $0.53 Strong $1.05Financial $1.16 Focus Ongoing EPS $0.60 $0.55 Profile$1.10 $1.01 exceeded expectations 2024 earnings guidance and • 2024 Ongoi
Slide 5: Operational and Regulatory Highlights
Operational and Regulatory Highlights
Slide 6: TNMP and PNM Highlights
TNMP and PNM Highlights TNMP Operational Highlights PNM Operational Highlights • New system peak in May: 2,706 MWs • Implementation of 12 MW battery • 6% increase over 2023 peak storage on distribution system 2,706 • Wildfire restoration 2,545 Peak MW Regulatory Updates 2,240 2,030 • FERC annual tra
Slide 7: TNMP System Resiliency Plan Filing
TNMP System Resiliency Plan Filing • To be filed in August 2024, with 6-month process defined by legislation, incorporating available takeaways from Hurricane Beryl • Data-driven process, supported by benefit-cost analysis, to identify system enhancements designed to improve customer outcomes and re
Slide 8: Advancing our Infrastructure
Advancing our Infrastructure TNMP West Texas Transmission Planning / ERCOT Permian Basin Reliability Study • ERCOT filed 2030 High Voltage and 2038 Extra High Voltage plans with PUCT on July 25 • ERCOT preference for 2038 plan and consideration to integrate ongoing ERCOT-wide study • ~$4 billion com
Slide 9: Financial Updates
Financial Updates
Slide 10: Q2 2024 Ongoing EPS Financial Summary
Q2 2024 Ongoing EPS Financial Summary Q2 2024 changes in ongoing Q2 Earnings Summary earnings: • Rate recovery through TNMP $0.04 ($0.02) TCOS and DCRF rate mechanisms $0.55 Clean Energy $0.03 $0.60 Strong Financial and implementation of new Focus PNM TNMP Corporate Profile retail rates at PNM • Loa
Slide 11: 2024 Earnings Guidance (Ongoing)
2024 Earnings Guidance (Ongoing) 2024 Earnings Guidance $2.65 Consolidated EPS $2.75 2024 earnings guidance range affirmed, quarterly distribution updated PNM TNMP Corp/Other $1.98 – $2.03 $1.17 – $1.20 ($0.50) – ($0.48) Estimated Quarterly Ongoing EPS Distribution 50% 22% 15% 13% Q1 Q2 Q3 Q4 11
Slide 12: Long-Term Targets and Financing Plans
Long-Term Targets and Financing Plans 2024-2028 Avg Rate Base Growth 10% Rate Base Growth 2024 - 2028 TNMP 12.9% • Does not yet include incremental $150M capital investment PNM FERCLong-term targets 8.3% for TNMP System Resiliency Plan PNM Retail affirmed7.9% • Capital to be refreshed at Q3 as addit
Slide 13: Appendix
Appendix
Slide 14: TNMP and PNM Key Regulatory Items
TNMP and PNM Key Regulatory Items Filing Action Timing Docket No. Transmission Cost of Filed January 25, 2024 Approved and implemented March 15, 2024 56155 Service (1st 2024 filing) Transmission Cost of Requested interim rate implementation Filed July 25, 2024 56860 TNMP PUCT Service (2nd 2024 filin
Slide 15: Key Components of PNM 2025 Rate Request
Key Components of PNM 2025 Rate Request • Laying the Foundation for Delivering Reliable, Resilient, and Carbon-Free Energy to Customers • Replacing aging equipment and facilities, improving and expanding the system to accommodate increasing renewable generation resources and respond to changing cust
Slide 16: Key Drivers of PNM 2025 Rate Request
Key Drivers of PNM 2025 Rate Request Requested Increase ($M) Base Fuel Total Rates Clause Revenues Reflects $430M new rate base vs 2024, Rate base investments $73.9 $73.9 including depreciation, property taxes, and (vs 2024 future test year filing) equity return at current authorized return Equity f
Slide 17: Rate Request Considerations
Rate Request Considerations Impact of ROE and Capital Structure Changes(1): Current Authorized Requested Earnings Impact 50% equity layer 52.5% equity layer +/- 1% = $0.03 EPS 9.26% ROE 10.45% ROE +/- 0.1% = $0.02 EPS Impact of Phased-In Rate Path on 2025 EPS(2): Base Rate Request July – Dec 2025 Im
Slide 18: Investment Plan 2024 – 2028
Investment Plan 2024 – 2028 5-year investment plan of $6.1 billion TNMP System Resiliency Plan included at $450 million(1) $1,273 $1,273 $1,216 $48 $1,153 $1,178 $49 $44 $48 $46 $508 $564 $641 $557 $610 $84 (in millions) $89 $120 $69 $78 $18 $73 $69 $507 $441 $372 $513 $408 $460 $438 $452 $464 $514
Slide 19: 2024 - 2028 Potential Earnings Power
2024 - 2028 Potential Earnings Power 6% - 7% Earnings Growth 2024-2028(1) 2024 2025 Earnings 2026 Earnings 2027 Earnings 2028 Earnings Allowed Guidance Equity Potential Potential Potential Potential Midpoint Return / Avg Avg Avg Avg Avg Ratio Rate EPS Rate EPS Rate EPS Rate EPS Rate EPS Base Base Ba
Slide 20: Q2 2024 Ongoing EPS Details: TNMP
Q2 2024 Ongoing EPS Details: TNMP TNMP • Rate relief from $0.33 $0.29 implementation of 2023 and 2024 TCOS and 2023 DCRF increases Q2 2023 Q2 2024 • Timing of O&M expenses compared to 2023, no change Q2 2024 Key Drivers ∆ EPS to annual expectation Transmission rate relief (TCOS) $0.06 • Dilutive imp
Slide 21: Q2 2024 Ongoing EPS Details: PNM
Q2 2024 Ongoing EPS Details: PNM • Retail load growth and hotter PNM temperatures $0.41 • Improved realized decommissioning / reclamation $0.38 trust performance in Q2 2024 compared to Q2 2023 • New retail rates implemented in Q2 2023 Q2 2024 January 2024 Q2 2024 Key Drivers ∆ EPS • Dilutive impact
Slide 22: Q2 2024 Ongoing EPS Details: Corporate
Q2 2024 Ongoing EPS Details: Corporate Corporate ($0.12) ($0.14) Q2 2023 Q2 2024 • Higher interest rates on Q2 2024 Key Drivers ∆ EPS variable debt, net of hedges Interest expense ($0.01) Other ($0.01) 22
Slide 23: Load Growth and Weather Conditions
Load Growth and Weather Conditions TNMP Load Growth YTD Q2 2024 2024E Continued growth across service territory Volumetric Load(1) 0.9% 2.5% - 3.5% Volumetric growth in line with expectations for first Demand-Based Load(2) (2.6)% 1.5% - 2.5% half of year, annual expectations unchanged TNMP Avg. Cu
Slide 24: Liquidity as of July 26, 2024
Liquidity as of July 26, 2024 Corporate/ PNM Resources PNM TNMP Other Consolidated Financing Capacity(1): (In millions) Revolving credit facilities $440.0 $200.0 $300.0 $940.0 As of 07/26/24: Short-term debt and LOC balances 113.2 31.3 153.1 297.6 Remaining availability 326.8 168.7 146.9 642.4 Inves
Slide 25: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec. 31, 2023 June 30, 2024 Long-Term Debt (incl. current portion) (1) PNM $2,261.8 $2,461.3 TNMP 1,260.9 1,376.9 Corporate/Other 999.1 999.6 Consolidated $4,521.8 $4,837.8 Total Debt (incl. short-term) (1,2) PNM $2,399.3 $2,531.9 TNMP 1,316.0 1,477.5
Slide 26: Credit Ratings
Credit Ratings PNMR Consolidated S&P Moody’s Issuer rating BBB Baa3 Outlook Stable Stable Senior unsecured rating BBB- Baa3 PNM S&P Moody’s Issuer rating BBB Baa2 Outlook Stable Stable Senior unsecured rating BBB Baa2 TNMP S&P Moody’s Issuer rating BBB+ Baa1 Outlook Stable Stable Senior secured rati