Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q3 2019 Earnings Presentation
24 slides from Txnm Energy's earnings presentation, Nov 1, 2019
Slide 1: Q3 2019 Earnings Review
Q3 2019 Earnings Review November 1, 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation for PNM Resources, Inc. (“PNMR”), Public Service Company of New Mexico (“PNM”), or Texas‐New Mexico Power Company (“TNMP”) (collectively, the “Company”) that relate to future events or expectations, projections, estimates, intentions, goals,
Slide 3: Opening Remarks and Overview
Opening Remarks and Overview Pat Vincent-Collawn Chairman, President and CEO
Slide 4: Financial Results and Key Highlights
Financial Results and Key Highlights Financial Results Q3 2019 Q3 2018 YTD 2019 YTD 2018 GAAP EPS $1.28 $1.09 $0.57 $1.76 Ongoing EPS $1.29 $1.08 $1.80 $1.82 • 2019 Ongoing EPS Guidance $2.05 - $2.11 affirmed Key Highlights • Higher temperatures resulted in higher load across PNM and TNMP • TNMP rea
Slide 5: Energy Transition Act Applicability - Intervenor Positions
Energy Transition Act Applicability - Intervenor Positions Abandonment/ Replacement Intervenor(s) Briefs Securitization Power Comments (19-00018-UT) (19-00195-UT) Board of County Commissioners for the Contingent upon provision of funds to the San Juan County of San Juan and the City of community
Slide 6: PNM and TNMP Regulatory Agenda
PNM and TNMP Regulatory Agenda Filing Action Timing Docket No. PNM: NMPRC approved acquisition on October 2, 19-00129-UT Western Spirit Transmission Line 2019; FERC approved acquisition on August 8, Acquisition planned for mid-2021 ER19-1824-000 2019 and incremental rate on July 9, 2019 EC19-90-000
Slide 7: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 8: Q3 2019 Ongoing EPS Summary and 2019 Earnings Guidance
Q3 2019 Ongoing EPS Financial Summary and 2019 Consolidated Ongoing Earnings Guidance Q3 EPS Summary Q3 2019 Q3 2018 Change PNM Resources $1.29 $1.08 $0.21 PNM $1.02 $0.95 $0.07 TNMP $0.31 $0.20 $0.11 Corporate/Other ($0.04) ($0.07) $0.03 Note: Segment drivers included in appendix $2.05 2019 Earning
Slide 9: Load and Economic Conditions
Load and Economic Conditions PNM Economic indicators continue to be positive Q3 2019 YTD 2019 PNM vs. vs. 2019E Weather and Load improved Q3 EPS by $0.05 Q3 2018 YTD 2018 • 14% increase in cooling degree days Total PNM Retail Load(1) 0.3% 0.0% 0.0% – 1.0% • Industrial, Residential growth partially o
Slide 10: 2019 - 2023 Investment Plan
2019 – 2023 Investment Plan $3.9B investment plan results in 9.6% rate base growth $317M increase in TNMP investments $991 $21 $818 $177 $27 $27 $771 $25 $48 $694 $68 $22 $641 $109 $268 $21 $37 $72 $128 $53 $94 $77 $60 $82 $176 $182 $202 (in millions) $99 $173 $125 $345 $306 $342 $322 $337 $275 $348
Slide 11: 2019 - 2023 Potential Earnings Power
2019 - 2023 Potential Earnings Power Earnings Growth Target 5-6%; reflects updated investment plan • Additional investments at TNMP strengthen earnings potential • Equity financing plans continue to reflect modeling assumptions that will be optimized 2019 Ongoing 2020 Earnings 2021 Earnings 2022 Ear
Slide 12: Questions and Answers
Questions and Answers
Slide 13: Appendix
Appendix
Slide 14: San Juan Abandonment, Securitization and Replacement Power
San Juan Abandonment, Securitization and Replacement Power ● Requests ● $283M undepreciated ● Recommended Abandonment Replacement Power Securitization abandonment of San investment in San Juan, scenario balances Juan coal plant after proceeds available to environment, cost and participation fund rep
Slide 15: Q3 2019 vs Q3 2018 EPS (Ongoing): PNM
Q3 2019 vs Q3 2018 EPS (Ongoing): PNM PNM $1.02 Q3 2019 Key Performance Drivers ∆ EPS $0.95 Weather and retail load Retail rate phase-in, including excess deferred income taxes $0.05 $0.02 (before impacts resulting from lower sales volumes) O&M decreases $0.02 Transmission margin $0.01 Depreciation
Slide 16: Q3 2019 vs Q3 2018 EPS (Ongoing): TNMP and Corporate
Q3 2019 vs Q3 2018 EPS (Ongoing): TNMP and Corporate $0.31 TNMP Q3 2019 Key Performance Drivers ∆ EPS $0.20 Rate relief, including TCOS $0.07 Weather and retail load $0.02 O&M decreases $0.01 Interest expense $0.01 Other $0.02 Q3 2018 Q3 2019 Depreciation and property tax ($0.02) Corporate Q3 2019 K
Slide 17: 2019 - 2023 Potential Earnings Power
2019 - 2023 Potential Earnings Power 2019 Ongoing Earnings 2020 Earnings 2021 Earnings 2022 Earnings 2023 Earnings Allowed Guidance Midpoint Potential Potential Potential Potential Return / Equity Avg Avg Avg Avg Avg Ratio Rate Return EPS Rate EPS Rate EPS Rate EPS Rate EPS Base Base Base Base Base
Slide 18: EBITDA Guidance (Ongoing)
EBITDA Guidance (Ongoing) Ongoing EBITDA (In millions) 2019E Midpoint Consolidated PNM Resources $568 PNM $372 TNMP $175 18
Slide 19: Weather Impact
Weather Impact PNM Q3 2019 Q3 2018 2019 Normal(1) Heating Degree Days 0 0 0 Cooling Degree Days 1,129 988 940 Net EPS Impact $0.07 $0.02 compared to normal TNMP Q3 2019 Q3 2018 2019 Normal(1) Heating Degree Days 0 0 0 Cooling Degree Days 1,826 1,663 1,641 Net EPS Impact $0.03 $0.00 compared to norma
Slide 20: PNM Scheduled Plant Outages
PNM Scheduled Plant Outages San Juan Four Corners Palo Verde Duration Time Duration Time Duration Time Unit Unit Unit in Days Period in Days Period in Days Period 2019 planned outages completed 5 76 Q1-Q2 2020 3 44 Q4 2019 No planned outages in 2020 4 12 Q2 2020 2 30 Q2 2020 1 44 Q3 2020 20
Slide 21: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 22: Liquidity as of October 25, 2019
Liquidity as of October 25, 2019 PNMR PNMR PNM Develop- Corporate Resources PNM TNMP ment /Other Consolidated Financing Capacity(1): (In millions) Revolving credit facilities $440.0 $75.0 $40.0 $300.0 $855.0 As of 10/25/19: Short-term debt and LOC balances $2.5 $15.4 $38.9 $84.1 $140.9 Remaining ava
Slide 23: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2018 Sep 30, 2019 Long-Term Debt (incl. current portion) (1) PNM $1,656.5 $1,707.6 TNMP 575.4 705.8 Corporate/Other 438.2 438.8 Consolidated $2,670.1 $2,852.2 Total Debt (incl. short-term) (1,2) PNM $1,698.9 $1,707.6 TNMP 592.9 720.8 Corporate
Slide 24: Credit Ratings
Credit Ratings PNMR Consolidated S&P Moody’s Issuer rating BBB+ Baa3 Outlook Negative Stable Senior unsecured rating BBB Baa3 PNM S&P Moody’s Issuer rating BBB+ Baa2 Outlook Negative Stable Senior unsecured rating BBB+ Baa2 TNMP S&P Moody’s Issuer rating BBB+ A3 Issuer outlook Negative Stable Senior