Slide 1: Q3 2017 Earnings Review
Q3 2017 Earnings Review October 27, 2017
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation that relate to future events or PNM Resources, Inc.’s (“PNMR”), Public Service Company of New Mexico’s (“PNM”), or Texas-New Mexico Power Company’s (“TNMP”) (collectively, the “Company”) expectations, projections, estimates, intentions, goal
Slide 3: Opening Remarks and Overview
Opening Remarks and Overview Pat Vincent-Collawn Chairman, President and CEO
Slide 4: Q3 2017 Financial Results
Q3 2017 Financial Results Financial Results: Q3 2017 Q3 2016 YTD 2017 YTD 2016 GAAP EPS $0.92 $0.68(1) $1.67 $1.15 Ongoing EPS $0.93 $0.78 $1.70 $1.31 • 2017 Ongoing EPS Guidance of $1.77 - $1.87 affirmed Note: EPS shown on a diluted basis (1) GAAP earnings reflect $11.3 million of pre-tax regulator
Slide 5: Regulatory Update
Regulatory Update Filing Action Timing Docket No. Suspension period currently ends Hearings held August 7–18, PNM 2018 General Rate Case January 6, 2018; NMPRC has ability 16-00276-UT 2017 to extend to March 6, 2018 Briefings and responses on scope of Procedural order issued proceeding due Q4 2017;
Slide 6: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 7: Q3 2017 Financial Summary
Q3 2017 Financial Summary Ongoing EPS $0.17 ($0.02) $0.93 $0.78 Corporate PNM Q3 2016 Q3 2017 7
Slide 8: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales and Customers (weather-normalized, leap-year adjusted) % of 2016 Q3 2017 YTD 2017 % of 2016 Q3 2017 YTD 2017 PNM Sales vs. vs. TNMP Sales vs. vs. Volumes Q3 2016 YTD 2016 Revenues Q3 2016 YTD 2016 Retail Load: Volumetric Load(1): Residential
Slide 9: Q3 2017 vs Q3 2016 EPS (Ongoing): PNM
Q3 2017 vs Q3 2016 EPS (Ongoing): PNM PNM Q3 2017 Key Performance Drivers ∆ EPS $0.77 Retail rate relief $0.11 $0.60 Transmission $0.03 Restructuring cost savings $0.02 AFUDC $0.02 Weather $0.01 Palo Verde Unit 3 market prices $0.01 Palo Verde Nuclear Decommissioning Trust gains $0.01 Interest expen
Slide 10: Q3 2017 vs Q3 2016 EPS (Ongoing): TNMP and Corporate
Q3 2017 vs Q3 2016 EPS (Ongoing): TNMP and Corporate TNMP Q3 2017 Key Performance Drivers ∆ EPS $0.18 $0.18 Load $0.02 TCOS rate relief $0.01 Weather ($0.01) Depreciation and property tax ($0.01) Q3 2016 Q3 2017 Other ($0.01) Corporate Q3 2017 Key Performance Drivers ∆ EPS $0.00 ($0.02) Interest exp
Slide 11: 2017 EPS Guidance (Ongoing)
2017 EPS Guidance (Ongoing) 2017 Guidance $1.77 Consolidated EPS $1.87 PNM TNMP Corp/Other $1.30 - $1.37 $0.51 - $0.53 ($0.04) – ($0.03) 11
Slide 12: Capital Forecast
Capital Forecast Targeted Consolidated 2017-2021 Rate Base CAGR: 4.5-5.5% 2018–2022 Total Capital Plan: $2.7B $681 Palo Verde $17 Unit 3 added to (In millions) rate base $170 $527 $515 $527 $58 $17 $500 $504 $34 $17 $17 $170 $116 $158 $186 $170 $170 $192 $146 $297 $173 $164 $238 $285 $281 $277 $20 $
Slide 13: Liquidity and Debt Maturity Outlook
Liquidity and Debt Maturity Outlook Long-term Debt Maturities(1) (in millions) $293 Maintain appropriate $1,060 credit metrics $172 Remain a solid $250 $200 $100 $306 investment grade 2018 2019 2020 2021 2022 and rated company Beyond PNM TNMP Corporate Target regulatory • Extended TNMP’s $75M revolv
Slide 14: Questions and Answers
Questions and Answers
Slide 15: Appendix
Appendix
Slide 16: 2017 - 2019 Potential Earnings Power
2017 - 2019 Potential Earnings Power Last updated May 23, 2017 Allowed 2017 Guidance Midpoint 2018 Earnings Potential 2019 Earnings Potential Return / Avg Rate Avg Rate Avg Rate Equity Ratio Return EPS EPS EPS Base Base Base PNM Retail (1) 9.575% / 50% $2.3 B 9.3% $1.33 $2.3 B $1.38 $2.3 B $1.37 PNM
Slide 17: Weather Impact
Weather Impact PNM Q3 2017 Q3 2016 2017 Normal(1) Heating Degree Days 21 13 14 Cooling Degree Days 1,029 991 1,010 Net EPS Impact $0.01 $0.00 compared to normal TNMP Q3 2017 Q3 2016 2017 Normal(1) Heating Degree Days 1 0 0 Cooling Degree Days 1,657 1,795 1,746 Net EPS Impact ($0.01) $0.00 compared t
Slide 18: PNM Scheduled Plant Outages and Retirements
PNM Scheduled Plant Outages and Retirements 2017-2018 Planned Outage Schedule San Juan(1) Four Corners Palo Verde Duration Time Duration Time Duration Time Unit Unit Unit in Days Period in Days Period in Days Period 1 45 Q4 2018 5 95 Q3-Q4 2017 1 33 Q4 2017 4 95 Q1-Q2 2018 3 33 Q2 2018 2 44 Q4 2018
Slide 19: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 20: Liquidity as of October 20, 2017
Liquidity as of October 20, 2017 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 10/20/17: Short-term debt and LOC balances $2.5 $6.0 $181.5 $190.0 Remaining availability 447.5 69.0 118.5 635.0 Inv
Slide 21: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2016 Sept 30, 2017 Long-Term Debt (incl. current portion) (1) PNM $1,631.4 $1,657.4 TNMP 420.9 480.6 Corporate/Other 340.5 309.7 Consolidated $2,392.7 $2,447.7 Total Debt (incl. short-term) (2) PNM $1,692.4 $1,657.4 TNMP 420.9 480.6 Corporate/
Slide 22: Credit Ratings
Credit Ratings PNMR S&P Moody’s Credit rating BBB+(1) Baa3(1) Issuer outlook Stable Positive PNM S&P Moody’s Credit rating BBB+(2) Baa2(2) Issuer outlook Stable Positive TNMP S&P Moody’s Credit rating A(3) A1(3) Issuer outlook Stable Stable (1) Issuer/Corporate rating (2) Senior unsecured (3) Senior