Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q1 2016 Earnings Presentation
26 slides from Txnm Energy's earnings presentation, Apr 29, 2016
Slide 1: Q1 2016 Earnings Review
Q1 2016 Earnings Review April 29, 2016
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 & Overview
Opening Remarks & Overview Pat Vincent-Collawn Chairman, President and CEO
Slide 4: Q1 2016 Financial Results and Company Updates
Q1 2016 Financial Results and Company Updates Financial Results: Q1 2016 Q1 2015 Ongoing EPS $0.13 $0.21 GAAP EPS $0.13 $0.18 EPS shown on a diluted basis 2016 Guidance of $1.55 - $1.76 affirmed Company Updates: PNM customer satisfaction score achieves new record TNMP energy efficiency recogni
Slide 5: Regulatory Update
Regulatory Update Filing Action Timing Docket No. NMPRC: General Rate Case Filing Filed August 27, 2015 Rates expected to be implemented Q3 15-00261-UT 2016 San Juan Generating Station Filed April 26, 2016 Decision requested by December 1, 2016 15-00205-UT Natural Gas Plant CCN Application (80 MW) A
Slide 6: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 7: Consolidated EPS: 2016 Guidance and Quarterly Distribution
2016 Guidance and Quarterly Distribution (Ongoing) 2016 Guidance $1.55 Consolidated EPS $1.76 PNM TNMP Corp/Other $1.12 - $1.30 $0.49 - $0.51 ($0.06) – ($0.05) 2016 Quarterly Ongoing Earnings Distribution Q1 8% - 9% Actual: $0.13 Q2 20% - 22% Q3 45% - 49% Q4 22% - 24% 7
Slide 8: Load and Economic Conditions - PNM
Load and Economic Conditions - PNM Regulated Retail Energy Sales and Customers (weather-normalized, leap-year adjusted) Load forecast remains in line with % of 2015 Q1 2016 vs. guidance PNM Sales Volumes Q1 2015 Albuquerque employment growth Residential 39% (2.5%) continues to improve; March yea
Slide 9: Load and Economic Conditions - TNMP
Load and Economic Conditions - TNMP Regulated Retail Energy Sales and End Users (weather-normalized, leap-year adjusted) % of 2015 % of 2015 Q1 2016 vs. TNMP Volumes Revenues Q1 2015 Load forecast remains in line with Volumetric Load(1): guidance Residential 51% (2.7%) Strong, diverse Texas econ
Slide 10: Q1 2016 vs Q1 2015 EPS (Ongoing): PNM
Q1 2016 vs Q1 2015 EPS (Ongoing): PNM PNM Q1 2016 Key Performance Drivers ∆ EPS Elimination of Palo Verde Unit 2 lease costs $0.03 $0.14 Outage costs ($0.02) Depreciation and property tax ($0.02) $0.05 Palo Verde Unit 3 market prices ($0.02) Interest expense ($0.02) Load ($0.01) AFUDC ($0.01) Q1 201
Slide 11: Q1 2016 vs Q1 2015 EPS (Ongoing): TNMP and Corporate
Q1 2016 vs Q1 2015 EPS (Ongoing): TNMP and Corporate TNMP $0.10 $0.09 Q1 2016 Key Performance Drivers ∆ EPS TCOS rate relief $0.01 Weather ($0.01) Depreciation and property tax ($0.01) Q1 2015 Q1 2016 Corporate Q1 2016 Key Performance Drivers ∆ EPS ($0.03) ($0.01) Interest savings on repayment of 9.
Slide 12: Questions & Answers
Questions & Answers
Slide 13: Appendix
Appendix
Slide 14: 2017 - 2019 Potential Earnings Power
2017 - 2019 Potential Earnings Power Allowed 2017 Earnings Potential 2018 Earnings Potential 2019 Earnings Potential Return / Equity Ratio Avg Rate EPS Avg Rate EPS Avg Rate EPS Base Base Base PNM Retail (1) 10% / 50% $2.4 B $1.50 $2.6 B $1.59 $2.5 B $1.58 PNM Renewables (2) 10% / 50% $95 M $0.06 $9
Slide 15: Capital Forecast
Capital Forecast 2016 – 2019 Total Capital Plan: $1.7B PNM 2015-2019 Rate Base CAGR: 5 - 7%(1) TNMP 2015-2019 Rate Base CAGR: 7 - 9% (In millions) $547 $36 Palo Verde Unit 3 added to rate base $115 $415 $398 $19 $14 $353 $107 $101 $15 $114 $117 $132 $102 $289 $127 $213 $239 $238 $232 $163 $167 $94 2
Slide 16: Weather Impact
Weather Impact PNM Q1 2016 Q1 2015 2016 Normal(1) Heating Degree Days 1,837 1,794 1,971 Cooling Degree Days 0 0 0 EPS Impact ($0.01) ($0.01) compared to normal TNMP Q1 2016 Q1 2015 2016 Normal(1) Heating Degree Days 859 1,190 974 Cooling Degree Days 82 52 96 EPS Impact $0.00 $0.01 compared to normal
Slide 17: PNM Plant EAF and Outages
PNM Plant EAF and Outages 2016 - 2017 Outage Schedule Duration Time Unit in Days Period 91.8% 92.5% San Juan 4 15 Q2 2016 72.9% 69.8% 72.3% 68.1% Four Corners 91 Q1-Q2 2016 5 95 Q3-Q4 2017 4 42 Q1-Q2 2016 Palo Verde 34 Q2 2016 1 34 Q4 2017 3 34 Q4 2016 2 34 Q2 2017 San Juan Four Corners Palo Verde 1
Slide 18: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 19: Liquidity as of April 22, 2016
Liquidity as of April 22, 2016 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 4/22/16: Short-term debt and LOC balances $141.5 $24.1 $113.8 $279.4 Remaining availability 308.5 50.9 186.2 545.6 Inv
Slide 20: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2015 Mar 31, 2016 Long-Term Debt (incl. current portion) PNM $1,580.7 $1,581.1 TNMP 361.4 420.7 Corporate/Other 149.9 272.7 Consolidated $2,091.9 $2,274.5 Total Debt (incl. short-term) (2) PNM $1,580.7 $1,699.9 TNMP 420.4 435.7 Corporate/Other
Slide 21: Credit Ratings
Credit Ratings PNMR S&P Moody’s Credit rating BBB+(1) Baa3(1) Issuer outlook Stable Stable PNM S&P Moody’s Credit rating BBB+(2) Baa2(2) Issuer outlook Stable Stable TNMP S&P Moody’s Credit rating A(3) A1(3) Issuer outlook Stable Stable (1) Issuer/Corporate rating (2) Senior unsecured (3) Senior sec
Slide 22: Environmental Compliance
Environmental Compliance
Slide 23: Environmental Control Equipment at Coal Units
Environmental Control Equipment at Coal Units PNM Share Low NOx Activated Coal Unit Capacity Burners/ Carbon SNCR (3) SCR (3) Baghouse (4) Scrubbers (MW) Overfired Air Injection (2) San Juan Unit 1 170 X X X X X San Juan Unit 2 (1) 170 X X X X San Juan Unit 3 (1) 248 X X X X San Juan Unit 4 195 X X
Slide 24: Impact of Environmental Regulation- SJGS
Impact of Environmental Regulation- SJGS Estimated Compliance Costs San Juan Generating Station Comments (PNM Share) Clean Air Act – Regional Haze (State Installation of SNCR technology on Units 1 and 4 completed in 2016; retirement of Minimal remaining costs Alternative) – SNCR Units 2 and 3 schedu
Slide 25: Impact of Environmental Regulation- Four Corners
Impact of Environmental Regulation- Four Corners Estimated Compliance Costs Four Corners (Units 4 and 5) Comments (PNM Share) Final BART determination filed with EPA on December 30, 2013. Impact to PNM: Clean Air Act – Regional Haze – SCR $94M SCR controls for NOx on Units 4 & 5 by July 31, 2018. On
Slide 26: Clean Power Plan
Clean Power Plan Summary of Clean Power Plan • On October 23, 2015, EPA published in the Federal Register the final Clean Power Plan (CPP) under section 111(d) of the Clean Air Act to regulate GHGs from fossil fuel generation. • Projected outcome = 32% reduction in CO2 in the U.S. from 2005 levels