Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — EEI Presentation 2011
15 slides from Txnm Energy's conference presentation, Nov 8, 2011
Slide 1: PNM Resources EEI Presentation
PNM Resources EEI Presentation November 8, 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation that relate to future events or PNM Resources’, Public Service Company of New Mexico’s (“PNM”), or Texas-New Mexico Power Company’s (“TNMP”) (collectively, the “Company”) expectations, projections, estimates, intentions, goals, targets, and
Slide 3: New Strategic Direction: Repositioning as Strong Regulated Utility
New Strategic Direction Repositioning as Strong Regulated Utility Strategic Goals Earn Authorized Return on our Regulated Businesses Exit Hybrid Regulated Return to Solid Competitive Utility Utility Investment Grade Business Ratings Provide an attractive total return proposition to our shareholders
Slide 4: PNM Resources Overview
PNM Resources Overview Focus: Earn our allowed returns Achieve solid investment grade credit ratings Located in New Mexico 501,700 customers Provide stable long-term earnings and dividend growth 14,529 miles transmission and distribution lines New Mexico and Texas 2,530MW generation ca
Slide 5: PNM: Recent Accomplishments
PNM: Recent Accomplishments Significant progress has 2008 been made to improve 6% base rate increase PNM’s financial health $33M rate increase Temporary fuel clause • Three rate increases in the past four years • Exited gas operations, 2009 8% base rate increase used 100% of the Permanent Merchant
Slide 6: Electric Affordability by State
Electric Affordability by State 4.0% 3.5% 3.0% Est. 2012 Median Household Income 2.5% US Average Average 2012 Est. Electric Bill 2.0% 1.5% 1.0% 0.5% 0.0% AL WA WI AR FL WY NH IL CA MO GA LA HI NC SC CO PNM-South RI VA NV CT AZ SD ID NJ VT DC IN PA OK TN MN NM PNM-North TX WV IA AK KS ND KY MD UT MI
Slide 7: PNM: Pathway to Continued Success
PNM: Pathway to Continued Success Earn allowed return • Synchronize revenues and expenses • Balance future rate increases for customers while ensuring the appropriate return is earned for our shareholders Continue to get positive regulatory outcomes Continue to strengthen investment grade cred
Slide 8: NM Regulatory Environment
NM Regulatory Environment NM recognized as a challenging regulatory framework Current effort in the state to reform the New Mexico Public Regulation Commission (NMPRC) • An independent results-oriented advocacy group • Has demonstrated success through several policy changes • Advocating legislat
Slide 9: TNMP: Recent Accomplishments
TNMP: Recent Accomplishments Restored earnings potential 2009 working with a constructive 7% rate increase General rate case Texas regulatory framework $13M rate increase • Achieved successful outcomes in four cases over 2010 the past three years 4% base rate increase • On track to achieve its TCO
Slide 10: TNMP: Pathway to Continued Success
TNMP: Pathway to Continued Success Continue to earn allowed rate of return Use transmission cost of service filings to • Reduce regulatory lag • Grow rate base Employ distribution cost of service filings, when available Retain solid credit metrics Invest in the business
Slide 11: Financial Direction
Financial Direction
Slide 12: Exit of Competitive Business
Exit of Competitive Business Strengthens PNM Resources’ financial position Eliminates financial and business risks associated with competitive entities Focuses strategic direction on regulated utilities Sale proceeds of $329 million including working capital used to recapitalize the business
Slide 13: Recent Credit Rating Accomplishments
Recent Credit Rating Accomplishments Utilities at investment grade Strength, stability and predictability recognized Ratings upgraded Sept. 26 and Nov. 1 Moody’s S&P PNMR PNM TNMP PNMR PNM TNMP Debt Ba1(1) Baa3(1) A3(2) Debt BB (1) BBB- (1) BBB (2) rating rating Outlook Stable Stable Stable Ou
Slide 14: Liquidity/Dividend
Liquidity/Dividend Recently refinanced PNMR and PNM revolvers ($700M) Targeting cap structure of • 50/50 at PNM • 55/45 at TNMP Dividend will be reviewed by the Board in February PNMR PNM TNMP Total Financing Capacity as of Nov. 1, 2011 Total Capacity $305 $400 $75 $780 Less LCs (1) (70) (2) (
Slide 15: Key Strategic Goals and Checklist
Key Strategic Goals and Checklist Earn Authorized Return on Our Maximize the Value of Our Regulated Businesses Competitive Businesses Achieve successful outcomes in: Maintain profitability of First Choice Power by PNM retail rate case achieving customer growth and increasing Achieved by mone