Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q2 2013 Earnings Presentation
29 slides from Txnm Energy's earnings presentation, Aug 2, 2013
Slide 1: Q2 2013 Earnings Presentation
Q2 2013 Earnings Presentation August 2, 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: Q2 2013 Financial Results and Company Updates
Q2 2013 Financial Results and Company Updates Q2 2013 Q2 2012 YTD 2013 YTD 2012 Ongoing EPS(1) $0.38 $0.33 $0.56 $0.50 GAAP EPS(1) $0.34 $0.27 $0.48 $0.48 Moody’s credit rating outlook upgraded to Positive for all entities 2013 ongoing earnings expected to be solidly in the middle of the $1.32 -
Slide 5: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales Comparison of 2013 vs 2012 (weather-normalized and leap-year adjusted) Q2 2013 vs. Q2 2012 YTD 2013 vs. YTD 2012 PNM(1) TNMP(2) PNM(1) TNMP(2) Residential (2.9%) (8.2%) (1.8%) (2.8%) Commercial 2.0% 12.8% 0.3% 7.5% Industrial (4.1%) N/A (5.1
Slide 6: Regulatory Update
Regulatory Update Filing Action Timing Docket No. NMPRC Delta Person CCN (peaking capacity) Filed January 3, 2013 Approved June 26, 2013 13-00004-UT NMPRC La Luz CCN (peaking capacity) Filed May 17, 2013 2014 13-00175-UT NMPRC 2014 Renewable Plan Filed July 1, 2013 Q4 2013 13-00183-UT TNMP TCOS File
Slide 7: San Juan BART Timeline and Update
San Juan BART Timeline and Update Currently Next Step Awaiting EIB approval of new SIP as submitted by NMED Begin EPA and NMPRC review/approval processes Expected Expected Actual Action Item Start Completion Completion PNM submits BART analysis to NMED April 1, 2013 NMED develops new SIP and submits
Slide 8: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 9: Q2 2013 Financial Summary
Q2 2013 Financial Summary Ongoing EPS $0.02 $0.38 $0.03 $0.33 Corp/Other PNM Q2 2012 Q2 2013 9
Slide 10: PNM and TNMP: Q2 2013 vs Q2 2012 EPS (Ongoing)
PNM and TNMP: Q2 2013 vs Q2 2012 EPS (Ongoing) PNM Q2 2013 Key Performance Drivers ∆ EPS $0.27 $0.30 Cost control $0.02 PV Nuclear Decommissioning Trust $0.02 Rate relief $0.01 PV3 prices $0.01 Load and weather ($0.01) Depreciation ($0.01) Outage costs ($0.01) Q2 2012 Q2 2013 TNMP Q2 2013 Key Perfor
Slide 11: Consolidated EPS 2013 Guidance (Ongoing)
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) 11
Slide 12: 2013 Checklist
2013 Checklist Continue progress toward: Improving FERC earnings Optimizing the timing of TX TCOS filings Implementing San Juan BART agreement Maintain strong electric reliability and power plant availability Control O&M and capital costs Continue execution of plan to achieve top quartile tot
Slide 13: Questions & Answers
Questions & Answers
Slide 14: Appendix
Appendix
Slide 15: PNM Plant EAF and Outages
PNM Plant EAF and Outages 2013 - 2014 Outage Schedule 88.6% 89.5% 90.9% 80.8% 80.2% Duration Time 77.0% 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 12 months
Slide 16: Core Capital Spending
Core Capital Spending 2013 – 2017 Core Capital Plan: $1.8B PNM Rate Base CAGR: 2% - 3% 2013 Expected Depreciation: $154M (In millions) TNMP Rate Base CAGR: 7% - 9% $445 $14 $390 $383 $22 $14 $130 $91 $76 $292 $13 $280 $13 $88 $93 $301 $293 $277 $191 $175 2013 2014 2015 2016 2017 PNM TNMP Other $1.2B
Slide 17: 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 $478 By year-end 2017 $33 • Install SNCRs on units 1 and 4 $400 $411 By early 2016 $10 $20 $7 $368 $1
Slide 18: 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 19: Weather Impact
Weather Impact PNM Q2 2013 Q2 2012 2013 Normal(1) Heating Degree Days 281 175 284 Cooling Degree Days 586 645 482 EPS Impact $0.02 $0.03 compared to normal TNMP Q2 2013 Q2 2012 2013 Normal(1) Heating Degree Days 125 5 44 Cooling Degree Days 992 1,221 1,098 EPS Impact $0.00 $0.01 compared to normal (
Slide 20: Liquidity as of July 26, 2013
Liquidity as of July 26, 2013 PNM Corporate/ Resources PNM TNMP Other Consolidated Financing Capacity(1): (In millions) Revolving credit facility $400.0 $75.0 $300.0 $775.0 As of 7/26/13: Short-term debt and LOC balances $3.2 $22.3 $38.6 $64.1 Remaining availability 396.8 52.7 261.4 710.9 Invested c
Slide 21: Regulatory Information
Regulatory Information
Slide 22: 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 23: 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 24: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 25: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2012 Jun 30, 2013 Long-Term Debt (incl. current portion) PNM $1,215.6 $1,290.6 TNMP 311.6 336.2 Corporate/Other 145.1 136.9 Consolidated $1,672.3 $1,763.7 Total Debt (incl. short-term) (1) PNM $1,236.7 $1,290.6 TNMP 311.6 361.2 Corporate/Other
Slide 26: 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 Positive Positive Positive (1) Senior unsecured debt (2) Senior secured debt A-13
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 ~$63M See “Capital Spending Under Revised State Plan” slide Included in SCR a