Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q2 2015 Earnings Presentation
27 slides from Txnm Energy's earnings presentation, Jul 31, 2015
Slide 1: Q2 2015 Earnings Presentation
Q2 2015 Earnings Presentation July 31, 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: Q2 2015 Financial Results and Company Updates
Q2 2015 Financial Results and Company Updates Financial Results: Q2 2015 Q2 2014 YTD 2015 YTD 2014 Ongoing EPS $0.44 $0.39 $0.65 $0.57 GAAP EPS $0.40 $0.36 $0.57 $0.52 EPS shown on a diluted basis 2015 Guidance range of $1.50 ‐ $1.62 affirmed Company Updates: BART status Future Test Year appea
Slide 5: BART Regulatory Process Update
BART Regulatory Process Update • July 14: Procedural schedule set BART Procedural Schedule July 31: PNM files restructuring agreements with remaining July 31 PNM supplemental testimony due signatures and supplemental testimony September 3 Staff and Intervenor testimony due September 18 Rebuttal test
Slide 6: Future Test Year
Future Test Year Recent events: Hearing Future TestExaminer Year • May 13: NMPRC dismisses PNM rate case filing Recommendation Defined by New Mexico statute and NMPRC Rule as: twelve‐month period beginning no later than the date a • May 27: NMPRC adopts order defining Future proposed rate change i
Slide 7: Regulatory Update
Regulatory Update Filing Action Timing Docket No. PNM: BART Filing Filed December 20, 2013 Final approval expected Q4 2015 13‐00390‐UT NMPRC 2016 Renewable Plan Filed June 1, 2015 Final approval expected Q4 2015 15‐00166‐UT San Juan Generating Station Filed June 30, 2015 Hearing Examiner assigned on
Slide 8: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 9: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales (weather‐normalized) PNM % of FY Q2 2015 vs. YTD 2015 vs. TNMP 2014 Sales Q2 2014 YTD 2014 % of FY Q2 2015 vs. YTD 2015 vs. Residential 39% (0.8%) 0.7% 2014 Sales Q2 2014 YTD 2014 Commercial 47% (0.3%) (2.0%) Residential 50% 7.6% 4.9% Indust
Slide 10: Q2 2015 Financial Summary
Q2 2015 Financial Summary Ongoing EPS $0.03 ($0.01) $0.44 $0.03 $0.39 TNMP Corporate PNM Q2 2014 Q2 2015 10
Slide 11: PNM and TNMP: Q2 2015 vs Q2 2014 EPS (Ongoing)
PNM and TNMP: Q2 2015 vs Q2 2014 EPS (Ongoing) PNM Q2 2015 Key Performance Drivers ∆ EPS Palo Verde Unit 1 leases at half price $0.03 $0.31 El Paso Natural Gas FERC tariff refund $0.03 $0.28 Refined coal $0.01 Palo Verde Nuclear Decommissioning Trust gains $0.01 Rio Bravo purchase $0.01 AFUDC $0.01
Slide 12: Consolidated EPS 2015 Guidance (Ongoing)
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) 12
Slide 13: Questions & Answers
Questions & Answers
Slide 14: Appendix
Appendix
Slide 15: Earnings Growth: 2016 Potential Earnings Power
Earnings Growth: 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 10% / 50% $2.0 B 8.4% $1.02 $2.4 B $0.47 $1.49 PNM Retail‐Timing (1) ($0.35)‐($0.21) ($0.35)‐($0.21) PNM Renewable
Slide 16: Earnings Growth: 2019 Potential Earnings Power
Earnings Growth: 2019 Potential Earnings Power 2016 Earnings Potential 2019 Earnings Potential Avg Rate Base EPS Avg Rate Base Growth EPS PNM Retail $2.4 B $1.49 $2.6 B $0.11 $1.60 PNM Retail‐Timing (1) ($0.35)‐($0.21) $0.35 ‐ $0.21 $0.00 PNM Renewables $100 M $0.06 $85 M ($0.01) $0.05 PNM FERC (2)
Slide 17: 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% $34 $527 (In millions) $32 $121 $448 Palo Verde $93 $19 Unit 3 added to rate base $382 $79 $93 $17 $72 $302 $105 $15 $144 $126 $106 $43 $330 $121 $68 $198
Slide 18: Weather Impact
Weather Impact PNM Q2 2015 Q2 2014 2015 Normal(1) Heating Degree Days 354 361 288 Cooling Degree Days 417 510 502 EPS Impact ($0.03) $0.00 compared to normal TNMP Q2 2015 Q2 2014 2015 Normal(1) Heating Degree Days 45 78 147 Cooling Degree Days 983 990 1,101 EPS Impact ($0.01) ($0.01) compared to nor
Slide 19: PNM Plant EAF and Outages
PNM Plant EAF and Outages 2015 ‐ 2016 Outage Schedule Duration Time Unit in Days Period 89.5% 92.0% San Juan 78.3% 4 51 Q4 2015 70.5% 72.3% 67.0% 3 12 Q4 2015 Four Corners 5 81 Q1 2016 4 22 Q1‐Q2 2016 Palo Verde 2 30 Q4 2015 1 34 Q2 2016 3 34 Q4 2016 San Juan Four Corners Palo Verde 12 months ending
Slide 20: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 21: Liquidity as of July 24, 2015
Liquidity as of July 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 7/24/15: Short‐term debt and LOC balances $66.4 $32.1 $6.8 $105.3 Remaining availability 383.6 42.9 293.2 719.7 Investe
Slide 22: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2014 Jun 30, 2015 Long‐Term Debt (incl. current portion) PNM $1,490.7 $1,515.7 TNMP 365.7 365.5 Corporate/Other 118.8 150.0 Consolidated $1,975.1 $2,031.2 Total Debt (incl. short‐term) (1) PNM $1,490.7 $1,566.8 TNMP 370.7 394.5 Corporate/Other
Slide 23: Debt Ratings
Debt Ratings S&P PNMR PNM TNMP Debt rating BBB(1) BBB(2) A‐(3) Outlook Positive Positive Positive Moody’s PNMR PNM TNMP Debt rating Baa3(1) Baa2(2) A1(3) Outlook Stable Stable Stable (1) Issuer/Corporate rating (2) Senior unsecured (3) Senior secured 23
Slide 24: Environmental Compliance
Environmental Compliance
Slide 25: 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 26: 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 $78M SNCR technology on 2 units; Retire 2 units. Alternative) – SNCR On November 25, 2014, EPA released a proposed rule that would revise th
Slide 27: 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 $92M PNM: SCR controls for NOx on Units 4 & 5. On November 25, 2014, EP