Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q3 2022 Earnings Presentation
25 slides from Txnm Energy's earnings presentation, Nov 4, 2022
Slide 1: Q3 2022 Earnings Review
Q3 2022 Earnings Review November 4, 2022
Slide 2: Contact Information and Safe Harbor Statement
Contact Information and Safe Harbor Statement Investor Relations Contact Information Lisa Goodman Executive Director, Investor Relations and Shareholder Services 1-505-241-2160 Lisa.Goodman@pnmresources.com Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Statements m
Slide 3: Overview and Highlights
Overview and Highlights
Slide 4: Financial Highlights and Key Updates
Financial Highlights and Key Updates Financial Results and Guidance Q3 2022 Q3 2021 YTD 2022 YTD 2021 Q3 2022 earnings results Clean $1.42 GAAP EPS Energy $1.32 Strong $1.78 Financial $2.14 Ongoing EPSFocus $1.46 $1.37 $2.54 $2.25 Profile 2022 guidance raised • 2022 Ongoing EPS Guidance raised to $2
Slide 5: Q3 2022 ESG Highlights
Q3 2022 ESG Highlights Embracing the San Juan Coal PNM Community Power of Plant Retirement Assistance Fair Diversity • PNM retired the last • Largest of state-wide customer • Employee events, including remaining unit of the San assistance events held recognition of Indigenous Juan Generating Station
Slide 6: Operational and Regulatory Updates
Operational and Regulatory Updates
Slide 7: Load and Economic Conditions
Load and Economic Conditions PNM Load growth, weather drives new system peak Q3 YTD Revised Original • Industrial load is less than expected, reducing 2022 Load Growth 2022 vs 2021 2022E 2022E growth with minimal EPS impact • Residential / Commercial growth ahead of Total Retail Load(1) 1.0% 0.5% –
Slide 8: PNM Operational Highlights
PNM Operational Highlights Grid Modernization Application • Six-year, $344 million investment plan with recovery through rate rider • Adds flexible distribution grid architecture providing multi-directional communication • Supports utility-scale and distributed renewable generation, as well as stora
Slide 9: PNM and TNMP Key Regulatory Proceedings
PNM and TNMP Key Regulatory Proceedings PNM • San Juan rate credit: Stay issued on November 1, 2022 by New Mexico Supreme Court Avg Residential Bill(1) $122.68 • Rate review to be filed in December 2022 $117.02 • Recovery of rate base investments since prior test year (2018) National Avg $83.20 Regi
Slide 10: Financial Updates
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Slide 11: Q3 2022 Ongoing EPS Financial Summary
Q3 2022 Ongoing EPS Financial Summary Q3 2022 changes in ongoing Q3 Earnings Summary earnings driven by: $0.12 $0.03 ($0.06) $1.46 • Higher load and weather $1.37 Clean Energy impacts at both PNM and TNMP Strong Financial TNMP Focus PNM Corporate Profile • TNMP TCOS and DCOS rate relief • Higher reg
Slide 12: Investment Plan 2022 – 2025
Investment Plan 2022 – 2025 Investment plan of $3.7b focused on T&D infrastructure, includes PNM grid modernization $993 $896 $42 $912 $892 $36 $40 $38 $424 $381 $325 $435 $59 $51 (in millions) $68 $90 $468 $322 $424 $362 $478 $392 $335 $307 2022 2023 2024 2025 PNM T&D PNM Generation TNMP IT Depreci
Slide 13: Rate Base Growth
Rate Base Growth 8% rate base growth reflects T&D infrastructure investments ~75% rate base growth recovered through existing FERC formula rates or TNMP TCOS/DCOS recovery Average Rate Base Base (in billions) 2020 2021 2022 2023 2024 2025 PNM transition out of coal PNM Retail Investments(1) $2.7 $2.
Slide 14: Financing Plans
Financing Plans Limited refinancing risk in near term Long-term Debt Maturities • Updated rates from utility financings included in in millions(1) upcoming rate cases • Ample liquidity (~$800 million) under existing facilities $988 $850 million of variable rate debt hedged at an $1,000 average rate
Slide 15: Earnings Guidance (Ongoing)
Earnings Guidance (Ongoing) Target 5% EPS CAGR 2020 -2025(1) 2022 Revised Earnings Guidance 2022 ongoing earnings $2.63 Consolidated EPS $2.68 guidance raised Revised Previous 2022 Guidance Revision Guidance Guidance PNM Resources $2.63 - $2.68 $2.50 - $2.60 PNM $1.96 - $1.98 $1.80 - $1.86 TNMP $0.9
Slide 16: Appendix
Appendix
Slide 17: PNM and TNMP Regulatory Proceedings
PNM and TNMP Regulatory Proceedings Filing Action Timing Docket No. PNM/AVANGRID filed NM Supreme Court appeal of No statutory timeframe for appeal or addressing 20-00222-UT Merger transaction approval NMPRC denial on Jan. 3, 2022, briefing scheduled request for oral argument S-1-SC-39152 completed
Slide 18: Q3 2022 Ongoing EPS Details: PNM
Q3 2022 Ongoing EPS Details: PNM PNM $1.17 • Higher transmission margins due $1.05 to higher system demand and the addition of new customers, including the Western Spirit transmission contract Q3 2021 Q3 2022 • Higher market power prices due to regional demand Q3 2022 Key Performance Drivers ∆ EPS •
Slide 19: Q3 2022 Ongoing EPS Details: TNMP
Q3 2022 Ongoing EPS Details: TNMP • Weather-normalized load TNMP growth, largely driven by new customers including $0.33 $0.36 cryptomining customers, and hotter temperatures Q3 2021 Q3 2022 • Rate relief from approved TCOS and DCOS increases Q3 2022 Key Performance Drivers ∆ EPS implemented in 2021
Slide 20: Q3 2022 Ongoing EPS Details: Corporate
Q3 2022 Ongoing EPS Details: Corporate Corporate ($0.01) ($0.07) • Higher interest rates on variable debt Q3 2021 Q3 2022 Q3 2022 Key Performance Drivers ∆ EPS Interest expense ($0.06) 20
Slide 21: Weather Impacts
Weather Impacts Q3 Q3 Q3 Q3 YTD Q3 YTD Q3 YTD PNM: PNM 2022 2021 Normal (1) 2022 2021 Normal(1) • Higher temperatures in Cooling Degree Days 1,037 978 965 1,552 1,494 1,472 Q3 2022 Heating Degree Days 0 0 1 1,293 1,267 1,187 • 2022 cooling degree-days above normal and prior year Net EPS Impact compa
Slide 22: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 23: Liquidity as of October 21, 2022
Liquidity as of October 21, 2022 Corporate/ PNM Resources PNM TNMP Other Consolidated Financing Capacity(1): (In millions) Revolving credit facilities $440.0 $100.0 $300.0 $840.0 As of 10/21/22: Short-term debt and LOC balances - 3.5 58.8 62.3 Remaining availability 440.0 96.5 241.2 777.7 Invested c
Slide 24: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec. 31, 2021 Sept. 30, 2022 Long-Term Debt (incl. current portion) (1) PNM $1,881.1 $2,000.6 TNMP 918.1 1,078.0 Corporate/Other 899.7 999.6 Consolidated $3,698.9 $4,078.2 Total Debt (incl. short-term) (1,2) PNM $1,888.5 $2,000.6 TNMP 918.5 1,081.0 Co
Slide 25: Credit Ratings
Credit Ratings PNMR Consolidated S&P Moody’s Issuer rating BBB Baa3 Outlook Positive Stable Senior unsecured rating BBB- Baa3 PNM S&P Moody’s Issuer rating BBB Baa2 Outlook Positive Stable Senior unsecured rating BBB Baa2 TNMP S&P Moody’s Issuer rating BBB+ Baa1 Outlook Positive Stable Senior secure