Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — FY2020 Earnings Presentation
25 slides from Txnm Energy's earnings presentation, Feb 26, 2021
Slide 1: 2020 Earnings Review
2020 Earnings Review February 26, 2021
Slide 2: Contact Information and Safe Harbor Statement
Contact Information and Safe Harbor Statement Investor Relations Contact Information Lisa Goodman Beilen Middleton Director, Investor Relations and Shareholder Services Senior Investor Relations Specialist U.S. 1-505-241-2160 U.S. 1-505-241-2135 Lisa.Goodman@pnmresources.com Beilen.Middleton@pnmreso
Slide 3: AVANGRID and PNM Resources Strategic Merger Update
AVANGRID and PNM Resources Strategic Merger Update Merger announced October 21, 2020, expected to close in the second half of 2021 Approvals and expected timeframes: Filing Date Filed Docket No. Approvals/Clearances Proxy filing / Shareholder approval 1/5/2021 N/A Approved 2/12/2021 Department of Ju
Slide 4: Overview and Highlights
Overview and Highlights
Slide 5: 2020 Financial Results and 2021 Company Updates
2020 Financial Results and 2021 Company Updates Financial Results 2020 results in line 2020 2019 with expectations, GAAP EPSClean Energy $2.15 $0.97 Ongoing EPS $2.28 Strong Financial $2.16 2021 guidance Focus affirmed Profile • 2020 Ongoing Earnings in line with expectations • 2021 Ongoing EPS Guid
Slide 6: 2020 ESG Highlights
2020 ESG Highlights Environmental • Progressed toward PNM’s industry leading goal of providing 100% emissions-free energy by 2040 • Established intermediary emissions reduction goals, along with goals to reduce freshwater usage and increase electrification of vehicle fleet • Accelerated full exit of
Slide 7: 2020 ESG Highlights (cont.)
2020 ESG Highlights (cont.) Governance • Executed strategic merger through extensive engagement, experience and understanding of industry risks • Demonstrated Diverse Board leadership (40% women / 20% minorities) Reporting • Redesigned website highlighting ESG Commitment including: • 2019 Sustainabi
Slide 8: Financial Updates
Financial Updates
Slide 9: 2020 Highlights
2020 Highlights Investment and Financial Highlights • Announced strategic merger transaction with AVANGRID • $50.30 share price represents 19.3% premium to 30-day volume weighted average price as of October 20, 2020 • Demonstrated adaptability and resilience during the COVID-19 pandemic, delivering
Slide 10: 2020 Ongoing EPS Financial Summary
2020 Ongoing EPS Financial Summary 2020 Full Year Results reflect: 2020 vs 2019 Earnings Summary • TNMP rate relief $0.04 ($0.01) $2.28 • PNM interest savings from refinancing of debt at lower $2.16 Clean$0.09 Energy Strong Financial Corporate TNMP interest rates Focus PNM Profile • Increased load d
Slide 11: 2020 vs 2019 EPS (Ongoing): PNM
2020 vs 2019 EPS (Ongoing): PNM • Refinancing of debt at lower interest rates PNM $1.67 $1.76 • Increased load due to higher summer temperatures combined with COVID-19 impacts (increased residential usage, decreased commercial usage) • Lower outage costs ahead of San Juan scheduled retirement 2019 2
Slide 12: 2020 vs 2019 EPS (Ongoing): TNMP and Corporate
2020 vs 2019 EPS (Ongoing): TNMP and Corporate • Full-year impact of 2019 TCOS TNMP $0.74 increases and 2020 TCOS $0.70 increases implemented in March and October; DCOS increase implemented in September 2020 2019 2020 • Retail load was reduced by milder temperatures, particularly in Q3; 2020 Key Per
Slide 13: Load and Economic Conditions
Load and Economic Conditions 2020 results in line with COVID-adjusted expectations PNM Continued customer growth in 2020 was offset by COVID impacts PNM 2020 2020E 2021E Increased Residential load was more than offset by Actuals reduced Commercial load; Commercial recovery forecasted in the second
Slide 14: 2021 Consolidated Ongoing Earnings Guidance
2021 Consolidated Ongoing Earnings Guidance Strong Financial 2021 Earnings Guidance Profile $2.27 - $2.37 guidance affirmed $2.27 Consolidated EPS $2.37 2021 EPS reflects the issuance of 6 million PNM TNMP Corp/Other additional shares in $1.63 – $1.69 $0.77 – $0.79 ($0.13) – ($0.11) December 2020 re
Slide 15: 2021 – 2025 Investment Plan
2021 – 2025 Investment Plan $4.0B investment plan focused on T&D infrastructure investments $1,016 $34 $277 $766 $761 $27 $31 $712 $705 $26 $26 $302 $321 $327 $324 $324 (in millions) $320 $342 $348 $298 $362 $299 $376 $291 $317 $338 $83 $76 $55 $64 $56 2021 2022 2023 2024 2025 PNM Generation TNMP PN
Slide 16: Appendix
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Slide 17: PNM and TNMP Regulatory Agenda
PNM and TNMP Regulatory Agenda Filing Action Timing Docket No. Filed Jan. 29, 2021 (2020 filing date Variance to 120-day regulatory timeframe to 2020 Integrated Resource delayed to incorporate San Juan accept or reject plan has been granted, 21-00033-UT Plan replacement power decision) extended time
Slide 18: Exit from Four Corners Power Plant
Exit from Four Corners Power Plant Saves Customer Money Supports Impacted Region • Replacement of baseload coal-fired • Securitization of early exit provides for generation with lower-cost, flexible economic development funds to resources support impacted regional economy • PNM will not seek cost re
Slide 19: Q4 2020 vs Q4 2019 EPS (Ongoing): PNM
Q4 2020 vs Q4 2019 EPS (Ongoing): PNM • Refinancing of debt at lower PNM interest rates $0.28 • Expected increases in operational spending, including vegetation management and preventive $0.09 system maintenance measures • Milder than normal temperatures and reduced Q4 2019 Q4 2020 commercial usage
Slide 20: Q4 2020 vs Q4 2019 EPS (Ongoing): TNMP and Corporate
Q4 2020 vs Q4 2019 EPS (Ongoing): TNMP and Corporate TNMP $0.14 $0.15 • TCOS increases implemented in September 2019 and March 2020; DCOS increase implemented in September 2020 Q4 2019 Q4 2020 • Expected increases in Q4 2020 Key Performance Drivers ∆ EPS operational spending, including Rate relief (
Slide 21: Weather Impacts
Weather Impacts Q4 Q4 2020 PNM 2020 2019 Normal(1) PNM Heating Degree Days Heating Degree Days 915 1,005 882 in Q4 2020 were 4% higher Cooling Degree Days 23 10 14 than Normal Net EPS Impact compared to Normal $0.01 $0.02 Q4 Q4 2020 TNMP 2020 2019 Normal(1) TNMP Cooling Degree Days in Q4 2020 were 1
Slide 22: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 23: Liquidity as of February 19, 2021
Liquidity as of February 19, 2021 PNM Corporate/ Resources PNM TNMP Other Consolidated • Available liquidity Financing Capacity(1): (In millions) strengthened by the issuance of long-term Revolving credit $440.0 $75.0 $340.0 $855.0 facilities debt at PNM and TNMP in Q2 2020 and equity As of 2/19/21:
Slide 24: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2019 Dec 31, 2020 Long-Term Debt (incl. current portion) (1) PNM $1,748.0 $1,696.6 TNMP 670.7 853.7 Corporate/Other 589.0 744.9 Consolidated $3,007.7 $3,295.2 Total Debt (incl. short-term) (1,2) PNM $1,806.0 $1,706.6 TNMP 685.7 853.7 Corporate
Slide 25: Credit Ratings
Credit Ratings Investment grade credit PNMR Consolidated S&P Moody’s ratings at PNM Resources, Issuer rating BBB Baa3 PNM and TNMP Outlook Positive Stable Senior unsecured rating BBB- Baa3 Merger considered credit positive by S&P and PNM S&P Moody’s Moody’s Issuer rating BBB Baa2 • S&P: PNM Resource