Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q1 2013 Earnings Presentation
29 slides from Txnm Energy's earnings presentation, May 6, 2013
Slide 1: Q1 2013 Earnings Presentation
Q1 2013 Earnings Presentation May 6, 2013
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: Q1 2013 Financial Results and Company Updates
Q1 2013 Financial Results and Company Updates Q1 2013 Q1 2012 Ongoing EPS(1) $0.18 $0.17 GAAP EPS(1) $0.13 $0.21 S&P credit ratings upgrade PNM Resources has moved to investment grade Affirmed 2013 ongoing earnings guidance at $1.32 - $1.42 (1) On a diluted basis 4
Slide 5: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales Growth Q1 2013 vs Q1 2012 (weather-normalized and leap-year adjusted) PNM(1) TNMP(2) Residential (0.8%) 4.0% Unemployment Rate Commercial (1.8%) 0.8% Industrial (6.2%) 0.3% 7.5% 6.9% 6.4% Total Retail (1.9%) 2.2% NM(3) TX(3) U.S.(4) YTD Aver
Slide 6: Regulatory Update
Regulatory Update Recent Approvals Action Approval Date Docket No. TNMP TCOS filing Approved with rates in place March 19, 2013 41176 FERC generation case Settlement approved April 5, 2013 ER11-4535-000 and (Navopache Electric Cooperative, Inc.) ER12-72-000 Expected Outstanding Items Action Docket N
Slide 7: San Juan BART Timeline and Update
San Juan BART Timeline and Update Revised State Plan Expected Expected Action Item Start Completion PNM submits BART analysis to State Q2 2013 April 1, 2013 EIB approval of new SIP submitted by NMED Q2 2013 Q4 2013 EPA approval of SIP submitted by EIB Q4 2013 Q4 2014 NMPRC approval for retirement
Slide 8: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 9: Q1 2013 Financial Summary
Q1 2013 Financial Summary Ongoing EPS $0.01 $0.01 $0.01 $0.18 $0.17 Corp/Other PNM TNMP Q1 2012 Q1 2013 9
Slide 10: PNM and TNMP: Q1 2013 vs Q1 2012 EPS
PNM and TNMP: Q1 2013 vs Q1 2012 EPS (Ongoing) PNM Q1 2013 Key Performance Drivers ∆ EPS Outage costs $0.02 Rate relief $0.02 $0.18 $0.17 Weather $0.02 PV3 market price $0.01 AFUDC ($0.01) Depreciation ($0.01) Load ($0.04) Other ($0.02) Q1 2012 Q1 2013 TNMP Q1 2013 Key Performance Drivers ∆ EPS Load
Slide 11: Credit Ratings
Credit Ratings S&P PNMR PNM TNMP Issuer debt rating BBB-(1) BBB(1) A-(2) Outlook Stable Stable Stable Moody’s PNMR PNM TNMP Debt rating Ba1(1) Baa3(1) A3(2) Outlook Stable Stable Stable (1) Senior unsecured debt (2) Senior secured debt 11
Slide 12: 2013 Guidance
2013 Guidance (Ongoing) $1.32 Consolidated EPS $1.42 PNM TNMP Corp/Other $1.16 - $1.23 $0.32 - $0.34 ($0.16) – ($0.15) 12
Slide 13: 2013 Checklist
2013 Checklist Continue progress toward: Implementing San Juan BART agreement Improving FERC earnings Optimizing the value of TX TCOS filings Maintain strong electric reliability and power plant availability Control O&M and capital costs Continue execution of plan to achieve top quartile tota
Slide 14: Questions & Answers
Questions & Answers
Slide 15: Appendix
Appendix
Slide 16: PNM Plant EAF and Outages
PNM Plant EAF and Outages 97.2% 2013 - 2014 Outage Schedule 89.6% 92.4% 85.5% 84.8% Duration Time 81.5% Unit in Days Period San Juan 4 54 Q1 – Q2 2013 1 12 Q1 2014 2 28 Q1 2014 Four Corners 4 21 Q2 2013 5 13 Q2 2014 4 13 Q4 2014 San Juan Four Corners Palo Verde Palo Verde 1 30 Q1 – Q2 2013 Q1 2012 Q
Slide 17: Core Capital Spending
Core Capital Spending 2013 – 2017 Core Capital Plan: $1.8B (In millions) PNM Rate Base CAGR: 2% - 3% 2013 Expected Depreciation: $153M TNMP Rate Base CAGR: 7% - 9% $429 $390 $14 $399 $14 $15 $128 $75 $84 $301 $13 $280 $13 $91 $92 $291 $310 $287 $197 $175 2013 2014 2015 2016 2017 PNM TNMP Other $1.3B
Slide 18: Capital Spending Under Revised State Plan
Capital Spending Under Revised State Plan Estimated incremental SIP(1) capital: $344M(2) PNM rate base CAGR with SIP(2): 3% - 5% Revised State Plan (In millions) • Shut down units 2 and 3 $478 By year-end 2017 $462 • Install SNCRs on units 1 and 4 $33 $426 $400 $20 By early 2016 $10 $7 $377 $1
Slide 19: Potential Earnings Power
Potential Earnings Power Minimizing regulatory lag, improving market prices, and reducing Corporate debt could improve current EPS by $0.15 to $0.24 without rate base growth Mid Point Guidance Potential Earnings Power Growth 2013 % of Range Potential Rate Rate Potential Allowed Resulting Achievement
Slide 20: Weather Impact
Weather Impact PNM Q1 2013 Q1 2012 Normal Heating Degree Days 2,079 1,848 1,957 Cooling Degree Days 0 0 0 EPS Impact $0.01 ($0.01) $0.00 TNMP Q1 2013 Q1 2012 Normal Heating Degree Days 916 696 986 Cooling Degree Days 70 182 92 EPS Impact ($0.01) ($0.01) $0.00 A-6
Slide 21: Liquidity as of May 1, 2013
Liquidity as of May 1, 2013 PNM PNM Resources Resources PNM TNMP Consolidated Financing Capacity(1): (In millions) Revolving credit facility $300.0 $400.0 $75.0 $775.0 As of 5/1/13: Short-term debt and LOC balances $71.6 $19.7 $30.3 $121.6 Remaining availability 228.4 380.3 44.7 653.4 Invested cash
Slide 22: Regulatory Information
Regulatory Information
Slide 23: NMPRC Commissioners and Districts
NMPRC Commissioners and Districts NMPRC Districts and Term PNM Service Areas Name District Party Ends Karen Montoya District 1 2016 Democrat Patrick Lyons District 2 2014 Republican Valerie Espinoza District 3 2016 Democrat Vice Chair Theresa Becenti-Aguilar District 4 2014 Democrat Ben Hall Distric
Slide 24: Public Utility Commission of Texas Commissioners
Public Utility Commission of Texas Commissioners Term Term Name Party Began Ends Donna Nelson Aug. 2008 Aug. 2015 Republican Chairman Kenneth Anderson Sept. 2008 Aug. 2017 Republican Awaiting appointment(1) Commissioners are appointed by Governor of Texas. Length of term is determined by the Governo
Slide 25: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 26: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2012 Mar 31, 2013 Long-Term Debt (incl. current portion) PNM $1,215.6 $1,215.6 TNMP 311.6 311.7 PNMR 145.1 145.2 Consolidated $1,672.3 $1,672.5 Total Debt (incl. short-term) (1) PNM $1,236.7 $1,304.5 TNMP 311.6 336.7 PNMR 282.7 274.6 Consolida
Slide 27: Environmental Compliance
Environmental Compliance
Slide 28: 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 San Juan Unit 2 170 X X X X San Juan Unit 3 249 X X X X San Juan Unit 4 195 X X X X Four C
Slide 29: Impact of Proposed Environmental Regulation
Impact of Proposed Environmental Regulation Estimated Compliance Costs Comments (PNM Share) San Juan Generating Station SNCR technology on 2 units; Retire 2 units Clean Air Act – Regional Haze(1) (State Alternative) – SNCR ~$62M - $64M See “Capital Spending Under Revised State Plan” slide Included i