Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q4 2016 Earnings Presentation
23 slides from Txnm Energy's earnings presentation, Feb 28, 2017
Slide 1: Q4 2016 Earnings Review
Q4 2016 Earnings Review February 28, 2017
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation that relate to future events or PNM Resources, Inc.’s (“PNMR”), Public Service Company of New Mexico’s (“PNM”), or Texas-New Mexico Power Company’s (“TNMP”) (collectively, the “Company”) expectations, projections, estimates, intentions, goal
Slide 3: Opening Remarks and Overview
Opening Remarks and Overview Pat Vincent-Collawn Chairman, President and CEO
Slide 4: Q4 2016 Financial Results and Key Highlights
Q4 2016 Financial Results and Key Highlights Financial Results: Q4 2016 Q4 2015 2016 2015 GAAP EPS $0.31 ($1.15) $1.46 $0.20 Ongoing EPS $0.34 $0.23 $1.65 $1.64 • 2017 Ongoing EPS Guidance of $1.77 - $1.87 affirmed 2016 Key Highlights: • Continued achievements in reliability and customer service P
Slide 5: Regulatory Update
Regulatory Update Filing Action Timing Docket No. Settlement agreement PNM 2018 General Rate Filed December 7, (if applicable) to be filed 16-00276-UT Case Filing 2016 March 27, 2017 PNM Advanced Metering Hearings began Decision expected in 15-00312-UT Infrastructure (AMI) February 27, 2017 May 2017
Slide 6: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 7: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales and Customers (weather-normalized, leap-year adjusted) % of 2016 Q4 2016 2016 % of 2016 % of 2016 Q4 2016 2016 PNM Sales vs. vs. TNMP Sales Sales vs. vs. Volumes Q4 2015 2015 Volumes Revenues Q4 2015 2015 Retail Load: Volumetric Load(1): Res
Slide 8: Q4 2016 Financial Summary
Q4 2016 Financial Summary Ongoing EPS $0.01 $0.34 $0.10 TNMP $0.23 PNM Q4 2015 Q4 2016 8
Slide 9: Q4 2016 vs Q4 2015 EPS (Ongoing): PNM and TNMP
Q4 2016 vs Q4 2015 EPS (Ongoing): PNM and TNMP PNM $0.23 Q4 2016 Key Performance Drivers ∆ EPS Retail rate relief, net of renewable rider $0.08 Outage costs $0.05 $0.13 Lower operations and maintenance costs $0.03 Elimination of Palo Verde Unit 2 lease costs, net of depreciation $0.03 Exploration of
Slide 10: Tax Reform Considerations
Tax Reform Considerations PNM Resources well-positioned for tax reform, customers benefit Business Key Tax Reform Considerations Segments Reduced Tax Rate Interest Non-deductibility 100% Bonus Depreciation Decreases the tax In rate base, decreases from expense flowing higher ADIT liability are offse
Slide 11: Earnings and Dividend Growth
Earnings and Dividend Growth • PNM growth achieved through recovery of capital investments: Rates implemented October 2016 bring rates forward from levels set in previous 2010 filing, accounting for significant capital investments 2018 General Rate Case filing aligns rates with lower-carbon reso
Slide 12: Questions and Answers
Questions and Answers
Slide 13: Appendix
Appendix
Slide 14: Consolidated EPS
2017 EPS and Quarterly Distribution Guidance (Ongoing) 2017 Guidance $1.77 Consolidated EPS $1.87 PNM TNMP Corp/Other $1.30 - $1.37 $0.51 - $0.53 ($0.04) – ($0.03) 2017 Quarterly Ongoing Earnings Distribution 47% 24% 16% 13% Q1 2017E Q2 2017E Q3 2017E Q4 2017E 14
Slide 15: Capital Forecast
Capital Forecast 2017 – 2020 Total Capital Plan: $1.7B PNM 2016-2020 Rate Base CAGR: 4 - 6%(1) TNMP 2016-2020 Rate Base CAGR: 8 - 10% (In millions) $517 Expect future Future Palo Verde Unit 3 added refinements refinements $58 to rate base include: $435 $395 $15 $404 $15 • Outcome of $151 $30 Integra
Slide 16: 2017 - 2019 Potential Earnings Power
2017 - 2019 Potential Earnings Power Allowed 2017 Guidance Midpoint 2018 Earnings Potential 2019 Earnings Potential Return / Avg Rate Avg Rate Avg Rate Equity Ratio Return EPS EPS EPS Base Base Base PNM Retail (1) 9.575% / 50% $2.3 B 9.3% $1.33 $2.4 B $1.42 $2.4 B $1.41 Supreme Court Appeal (2) $0 -
Slide 17: PNM and TNMP: 2016 vs 2015 EPS (Ongoing)
PNM and TNMP: 2016 vs 2015 EPS (Ongoing) PNM 2016 Key Performance Drivers ∆ EPS Elimination of Palo Verde Unit 2 lease costs, net of depreciation $0.12 Retail rate relief, net of renewable rider $0.09 $1.18 $1.14 Lower operations and maintenance costs Outage costs $0.07 $0.04 Exploration of alternat
Slide 18: Weather Impact
Weather Impact PNM Q4 2016 Q4 2015 2016 Normal(1) Heating Degree Days 1,354 1,560 1,596 Cooling Degree Days 21 43 15 Net EPS Impact ($0.02) $0.01 compared to normal TNMP Q4 2016 Q4 2015 2016 Normal(1) Heating Degree Days 491 492 694 Cooling Degree Days 405 306 263 Net EPS Impact $0.00 ($0.01) compar
Slide 19: PNM Scheduled Plant Outages and Retirements
PNM Scheduled Plant Outages and Retirements 2017-2018 Planned Outage Schedule San Juan Four Corners Palo Verde Duration Time Duration Time Duration Time Unit Unit Unit in Days Period in Days Period in Days Period 1 29 Q1 2018 4 11 Q2 2017 2 33 Q2 2017 4 29 Q2 2018 5 11 Q2 2017 1 33 Q4 2017 5 95 Q3-Q
Slide 20: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 21: Liquidity as of February 21, 2017
Liquidity as of February 21, 2017 PNM Corporate/ Resources PNM TNMP Other Consolidated Financing Capacity(1): (In millions) Revolving credit facilities $450.0 $75.0 $300.0 $825.0 As of 2/21/17: Short-term debt and LOC balances $58.8 $8.1 $150.5 $217.4 Remaining availability 391.2 66.9 149.5 607.6 In
Slide 22: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2015 Dec 31, 2016 Long-Term Debt (incl. current portion) (1) PNM $1,580.7 $1,631.4 TNMP 361.4 420.9 Corporate/Other 149.9 340.5 Consolidated $2,091.9 $2,392.7 Total Debt (incl. short-term) (2) PNM $1,580.7 $1,692.4 TNMP 420.4 420.9 Corporate/O
Slide 23: Credit Ratings
Credit Ratings PNMR S&P Moody’s Credit rating BBB+(1) Baa3(1) Issuer outlook Stable Stable PNM S&P Moody’s Credit rating BBB+(2) Baa2(2) Issuer outlook Stable Stable TNMP S&P Moody’s Credit rating A(3) A1(3) Issuer outlook Stable Stable (1) Issuer/Corporate rating (2) Senior unsecured (3) Senior sec