Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — Q3 2024 Earnings Presentation
26 slides from Txnm Energy's earnings presentation, Nov 1, 2024
Slide 1: Q3 2024 Earnings Review
Q3 2024 Earnings Review November 1, 2024 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Statements made in this news release for TXNM Energy, Inc. (“TXNM”), Public Service Company of New Mexico (“PNM”), or Texas-New Mexico Power Company (“TNMP”) (collectively, the “Company”) that rela
Slide 3: Overview and Highlights
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Slide 4: Financial Results and Company Updates
Financial Results and Company Updates Financial Results and Guidance Q3 2024 Q3 2023 YTD 2024 YTD 2023 Clean Energy Q3 2024 earnings results GAAP EPS $1.45 $0.44 Strong $2.50Financial $1.60 Focus Ongoing EPS $1.43 $1.54 Profile$2.65 $2.44 maintains expectations, guidance narrowed • 2024 Ongoing EPS
Slide 5: Utility Highlights
Utility Highlights
Slide 6: TNMP Highlights
TNMP Highlights Key Highlight: Continued system-wide growth TNMP System Peak • New system peak in October: 2,944 MWs • 16% increase over 2023 peak, 13% CAGR from 2020 2,944 • Interconnection requests nearly double the levels seen 2,545 Peak MW in 2022 2,240 2,030 • Increased requests tied to new hou
Slide 7: TNMP Highlights: On the Horizon
TNMP Highlights: On the Horizon System Resiliency Plan • Filed Aug 2024, decision expected by Feb 2025 • $600 million capital investments 2025-2027, fully incorporated in updated capital plans • Recovery primarily through DCRF West Texas Transmission Planning / ERCOT Permian Basin Reliability Study
Slide 8: PNM Highlights
PNM Highlights Key Highlight: Grid Modernization brings customer benefits Grid Modernization Plan to be implemented • Customers benefit from improved service reliability, advanced metering with data access DOE GRIP funding for Virtual Power Plant Project • Complements grid modernization plan with en
Slide 9: PNM Highlights: On the Horizon
PNM Highlights: On the Horizon 2028 Resource Application • Expect to file in November, resources to ensure reliability and continued clean energy transition • Continued balance of utility-owned and third-party resources 2029 – 2032 Resource RFP • Part of Integrated Resource Planning, planning for ex
Slide 10: Financial Updates
Financial Updates
Slide 11: Q3 2024 Ongoing EPS Financial Summary
Q3 2024 Ongoing EPS Financial Summary Q3 2024 changes in ongoing EPS: Q3 Ongoing EPS Summary • Rate recovery through TNMP TCOS and DCRF rate mechanisms Clean Energy Strong Financial and implementation of new retail rates at PNM Focus Profile • Improved market performance of PNM decommissioning trust
Slide 12: 2024 Earnings Guidance (Ongoing)
2024 Earnings Guidance (Ongoing) 2024 Earnings Guidance $2.70 Consolidated EPS $2.75 2024 earnings guidance range narrowed PNM TNMP Corp/Other $2.07 - $2.10 $1.19 - $1.20 ($0.56) – ($0.55) • Completed 2024 equity needs of ~$100 million through 2024 financing plans ATM program • Issuance of junior su
Slide 13: Investment Plan 2024 – 2028
Investment Plan 2024 – 2028 5-year investment plan of $6.2 billion Additional $150 million added for TNMP System Resiliency Plan $1,323 $1,273 $1,216 $48 $1,253 $44 $1,178 $48 $49 $46 $558 $564 $685 $641 $582 $84 (in millions) $89 $120 $69 $78 $18 $73 $69 $513 $464 $514 $507 $441 $372 $408 $460 $438
Slide 14: 2024 - 2028 Potential Earnings Power
2024 - 2028 Potential Earnings Power 6% - 7% Earnings Growth 2024-2028(1) 2024 2025 Earnings 2026 Earnings 2027 Earnings 2028 Earnings Allowed Guidance Equity Potential Potential Potential Potential Midpoint Return / Avg Avg Avg Avg Avg Ratio Rate EPS Rate EPS Rate EPS Rate EPS Rate EPS Base Base Ba
Slide 15: Appendix
Appendix
Slide 16: TNMP and PNM Key Regulatory Items
TNMP and PNM Key Regulatory Items Filing Action Timing Docket No. Transmission Cost of Filed January 25, 2024 Approved and implemented March 15, 2024 56155 Service (1st 2024 filing) Transmission Cost of Approved and implemented September 20, Filed July 25, 2024 56860 TNMP PUCT Service (2nd 2024 fili
Slide 17: 2024 - 2028 Potential Earnings Power
2024 - 2028 Potential Earnings Power 2024 2025 Earnings 2026 Earnings 2027 Earnings 2028 Earnings Allowed Guidance Equity Potential Potential Potential Potential Midpoint Return / Avg Avg Avg Avg Avg Ratio Rate EPS Rate EPS Rate EPS Rate EPS Rate EPS Base Base Base Base Base 9.26% / PNM Retail 50% $
Slide 18: Earnings Power Considerations – PNM Rate Request
Earnings Power Considerations – PNM Rate Request PNM Rate Request Sensitivities Impact of ROE and Capital Structure Changes(1): Current Authorized Requested Earnings Impact 50% equity layer 52.5% equity layer +/- 1% = $0.03 EPS 9.26% ROE 10.45% ROE +/- 0.1% = $0.02 EPS Impact of Phased-In Rate Path
Slide 19: Q3 2024 Ongoing EPS Details: TNMP
Q3 2024 Ongoing EPS Details: TNMP TNMP • Rate relief from implementation of TCOS and DCRF increases • Dilutive impact of additional shares issued in 2023 • Retail load growth, more than Q3 2024 Key Drivers ∆ EPS offset by lower weather- Transmission rate relief (TCOS) $0.04 related usage (hotter Dis
Slide 20: Q3 2024 Ongoing EPS Details: PNM
Q3 2024 Ongoing EPS Details: PNM • Improved realized PNM decommissioning / reclamation trust performance in Q3 2024 compared to Q3 2023 • New retail rates implemented in January 2024 • Interest expense, offset by refund of a third-party deposit Q3 2024 Key Drivers ∆ EPS • Retail load growth, offset
Slide 21: Q3 2024 Ongoing EPS Details: Corporate
Q3 2024 Ongoing EPS Details: Corporate Corporate • Higher interest rates on Q3 2024 Key Drivers ∆ EPS variable debt, net of hedges Interest expense ($0.01) NMRD income ($0.01) Other/rounding ($0.01) 21
Slide 22: Load Growth
Load Growth TNMP Load Growth YTD Q3 2024 2024E Volumetric Load(1) 2.3% 2% - 3% Data centers add to traditional load growth Demand-Based Load(2) 3.8% 2% - 3% Steady growth across traditional customer classes and Data Center Load(3) 2.5% n/a service territories TNMP Avg. Customers 1.8% 1.5% Curren
Slide 23: Weather Impacts
Weather Impacts Q3 Q3 Q3 Q3 YTD Q3 YTD Q3 YTD TNMP 2024 2023 Normal (1) 2024 2023 Normal(1) Cooling Degree Days 1,718 2,050 1,724 3,059 3,346 2,901 Heating Degree Days 0 2 0 830 758 947 Net EPS Impact compared to Normal $0.00 $0.05 $0.01 $0.05 Q3 Q3 Q3 Q3 YTD Q3 YTD Q3 YTD PNM 2024 2023 Normal (1) 2
Slide 24: Liquidity as of October 25, 2024
Liquidity as of October 25, 2024 Corporate/ TXNM Energy PNM TNMP Other Consolidated Financing Capacity(1): (In millions) Revolving credit facilities $440.0 $200.0 $300.0 $940.0 As of 10/25/24: Short-term debt and 182.0 112.5 176.7 471.2 L/C balances Remaining availability 258.0 87.5 123.3 468.8 Inve
Slide 25: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec. 31, 2023 Sept. 30, 2024 Long-Term Debt (incl. current portion) (1) PNM $2,261.8 $2,459.1 TNMP 1,260.9 1,464.1 Corporate/Other 999.1 999.5 Consolidated $4,521.8 $4,922.7 Total Debt (incl. short-term) (1,2) PNM $2,399.3 $2,639.0 TNMP 1,316.0 1,561.
Slide 26: Credit Ratings
Credit Ratings TXNM Energy Consolidated S&P Moody’s Issuer rating BBB Baa3 Outlook Stable Stable Senior unsecured rating BBB- Baa3 PNM S&P Moody’s Issuer rating BBB Baa2 Outlook Stable Stable Senior unsecured rating BBB Baa2 TNMP S&P Moody’s Issuer rating BBB+ Baa1 Outlook Stable Stable Senior secur