Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Investor Presentation (June 2024)
27 slides from Txnm Energy's investor presentation, Jun 5, 2024
Slide 1: Investor Meetings
Investor Meetings June 5, 2024 1
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: PNM Resources Overview
PNM Resources Overview Energy holding company with two fully regulated electric utilities NYSE: PNM $3.5B market cap • Vertically integrated utility Service Territories and Generation Resources (generation, T&D) in New Mexico • $2.8B Retail rate base • $0.8B FERC Transmission rate base • 550k retail
Slide 4: Strategic Growth Profile
Strategic Growth Profile Sound basis for growth Driven by need for investments supporting grid reliability System Peak Demand and modernization MWs 2,545 12% annual growth in TNMP system peak 2020-2023 2,240 5% growth in PNM system peak 2022-2023 after not 2,030 2,030 2,131 2,008 setting a new
Slide 5: Execution of Financial Plans
Execution of Financial Plans Strong track record of achieving financial targets • Earning authorized return on regulated $2.69 $2.82 $2.28 $2.45 rate base $2.16 • Delivering earnings and dividend growth $1.39 $1.47 $1.23 $1.31 • Maintaining investment grade credit ratings $1.16 Dec ‘19 Dec ‘20 Feb ‘
Slide 6: Investment Plan 2024 – 2028
Investment Plan 2024 – 2028 5-year investment plan of $6.1 billion $1,273 $1,273 $1,176 $48 $1,153 $1,178 $49 $44 $45 $47 $508 $524 $641 $557 $610 $84 (in millions) $89 $120 $69 $78 $18 $73 $69 $506 $441 $372 $513 $407 $460 $437 $452 $463 $514 2024 2025 2026 2027 2028 PNM T&D PNM Battery Storage PNM
Slide 7: Financing Plans
Financing Plans 2023 Financing Activities Long-term Debt Maturities in millions(1) • $200M equity (4.4M shares issued Dec. 2023) • $115M NMRD sales proceeds received in Feb 2024 $1,230 • $343M Securitization bonds issued Nov. 2023, providing low-cost financing for customers • $600M of variable rate
Slide 8: Dividend Increase and Payout Ratio
Dividend Increase and Payout Ratio Annual dividend targets middle of a • Continued dividend 50% - 60% payout ratio range growth targeting 50% - 60% payout ratio $1.47 $1.55 $1.39 $1.31 • Board of Directors $1.23 increased the common dividend by $0.08 to $0.3875 per quarter 54% 53% 52% 52% 57% • Indi
Slide 9: TNMP
TNMP
Slide 10: TNMP Highlights
TNMP Highlights Consistent growth in TNMP service territory TNMP System Peak 2,545 Continued nation-leading economic growth 1,796 2,030 System demand has grown 42% over the last 5 years MWs Entrance of data centers increased load beginning in 2022, primarily in West Texas 2019 2021 2023 Invest
Slide 11: TNMP Continued Growth Potential
TNMP Continued Growth Potential Diverse regions within service territory TNMP Revenues by Region (2023) North/Central TX: residential and commercial growth North/ driven by Dallas-Ft Worth corporate business expansion Central TX ~35% Gulf Coast: greatest portion of residential customers; West Te
Slide 12: TNMP Regulation
TNMP Regulation Recovery Framework Historical test year recover non-capital costs and set the authorized ROE for all rate mechanisms, supplemented by capital recovery mechanisms: Transmission cost of service Distribution cost recovery Resiliency rule permits mechanism (TCOS) allows for mechanism (DC
Slide 13: TNMP Wildfire Preparation and Mitigation Plans
TNMP Wildfire Preparation and Mitigation Plans Coordination with local officials for power shut off consideration TNMP Vegetation 35% of service territory identified Management ($M)(1) and prioritized as high risk $8.7 $8.1 ~70% of transmission poles are steel or concrete $4.4 Diverse TX landscape &
Slide 14: PNM
Laer PNM nana ~~
Slide 15: PNM Highlights
PNM Highlights PNM System Peak 2,131 Increasing system demands 2,030 New system peaks reached in 2022 and 2023 2,008 MWs Reflects need for additional resources and infrastructure Clean energy transition spurring economic development 2013 - 2021 2022 2023 PNM Capital Spending Investment plans f
Slide 16: PNM Transmission Development Potential
PNM Transmission Development Potential New Mexico’s location in the West and concentration of solar and wind resources demonstrates the potential for renewable development and associated transmission needs Predominance of Renewables Resources in Center of Country and Load Centers on Coasts Source: N
Slide 17: PNM Regulation
PNM Regulation PNM FERC PNM Retail Transmission Distribution Generation 55% FERC / 45% Retail 100% Retail 100% Retail • $0.8B rate base • $2.8B rate base regulated by the New Mexico Public Regulation regulated by FERC, Commission with investments recovered primarily through recovered through general
Slide 18: PNM Wildfire Preparation and Mitigation Plans
PNM Wildfire Preparation and Mitigation Plans Public Safety Power Shutoff (PSPS) plan implemented on May 1, 2024 PNM Vegetation 18% of service territory identified Management ($M) and prioritized as high risk $8.0 $6.5 40% of T&D lines underground $4.4 Lower population density and property values $2
Slide 19: Appendix
Appendix
Slide 20: Commitment to ESG Strategy
Commitment to ESG Strategy Environmental Social Governance Industry-leading goals: Hiring, training, retention and 8 of 9 Board members are • Emissions-free by 2040 engagement programs for our independent, 9 years average reflects full elimination of diverse workforce with a focus tenure carbon from
Slide 21: TNMP and PNM 2024 Key Regulatory Items
TNMP and PNM 2024 Key Regulatory Items TNMP Filings with Public Utility Commission of Texas Transmission Cost of Service Distribution Cost Recovery System Resiliency Plan (SRP) (TCOS) Factor (DCRF) March 2024: 1st 2024 Filing April 2024: 1st 2024 Filing Expected to be filed in Q3 approved and im
Slide 22: Load and Economic Conditions
Load and Economic Conditions TNMP Continued growth at TNMP TNMP 2023 2024 YTD Volumetric growth expected to return to 2022 levels, as 2024E 2023 was impacted by extreme weather events Demand-based load increases in 2023 reflect incremental Volumetric Load(1) 0% 2.5% - 3.5% 2.7% crypto-mining cus
Slide 23: PUCT Commissioners
PUCT Commissioners Name Term Began Term Ends Party Thomas Gleeson(1) (Chair) Jan. 19, 2024 Sept. 1, 2029 Republican Kathleen Jackson Aug. 5, 2022 Sept. 1, 2027 Republican Lori Cobos(2) Sept. 1, 2021 Sept. 1, 2027 Republican Jimmy Glotfelty Aug. 6, 2021 Sept. 1, 2025 Republican Vacancy Commissioners
Slide 24: NMPRC Commissioners
NMPRC Commissioners Name Term Began Term Ends Party Patrick O'Connell (Chair) January 1, 2023 December 31, 2028 Democrat Gabriel Aguilera January 1, 2023 December 31, 2026 Democrat James Ellison January 10, 2023 December 31, 2024 Independent Commissioners confirmed by the New Mexico Senate on Feb. 8
Slide 25: PNM Generation Shared Ownership
PNM Generation Shared Ownership Palo Verde Nuclear Generating Station - MW Owned vs Leased Owned Capacity Leased Capacity Unit 1 2.3% 30 MW Unit 1 - (1) - (1) Unit 2 9.4% 124 MW Unit 2 - (2) - (2) Unit 3 10.2% 134 MW Unit 3 - - Total 21.9% 288 MW Total - - (1) 104 MW Unit 1 leases expired Jan. 2023
Slide 26: Liquidity as of April 26, 2024
Liquidity as of April 26, 2024 Corporate/ PNM Resources PNM TNMP Other Consolidated Financing Capacity(1): (In millions) Revolving credit facilities $440.0 $200.0 $300.0 $940.0 As of 04/26/24: Short-term debt and LOC balances 210.2 42.0 43.8 296.0 Remaining availability 229.8 158.0 256.2 644.0 Inves
Slide 27: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec. 31, 2023 Mar. 31, 2024 Long-Term Debt (incl. current portion) (1) PNM $2,261.8 $2,262.3 TNMP 1,260.9 1,377.9 Corporate/Other 999.1 999.3 Consolidated $4,521.8 $4,639.5 Total Debt (incl. short-term) (1,2) PNM $2,399.3 $2,448.5 TNMP 1,316.0 1,396.2