Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — FY2021 Earnings Presentation
22 slides from Txnm Energy's earnings presentation, Dec 17, 2020
Slide 1: 2021 Earnings Guidance
2021 Earnings Guidance December 17, 2020
Slide 2: Additional Information
Additional Information Additional Information The proposed business combination transaction between PNMR and Avangrid will be submitted to the shareholders of PNMR for their consideration. PNMR will file a proxy statement and other documents with the SEC regarding the proposed business combination t
Slide 3: 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 4: Overview
Overview Pat Vincent-Collawn Chairman, President and CEO
Slide 5: Earnings Guidance and Dividend Increase
Earnings Guidance and Dividend Increase Ongoing Earnings Guidance: • 2020 Ongoing EPS Guidance affirmed at $2.23 - $2.31, targeting midpoint of $2.27 • 2021 Ongoing EPS Guidance of $2.27 - $2.37 • Reflects the issuance of 6 million additional shares in December 2020 resulting from the January 2020 f
Slide 6: 2021 PNM and TNMP Regulatory Agenda
2021 PNM and TNMP Regulatory Agenda Merger transaction approval filed with NMPRC November 23, 2020; Docket #20-00222-UT, 8 - 14 months expected for approval Merger transaction approval filed with FERC November 23, 2020; Docket #EC21-25-000, 3 - 6 months expected for approval Integrated Resource Plan
Slide 7: ESG Highlights
ESG Highlights Merger Values Accelerated ESG Efforts Customers, Receive Employees and Full Exit of Recognition Communities Coal to 2024 • Announced plans to exit • Newsweek’s 2021 list of • Under the merger America’s Most agreements, local jobs 200MW ownership in the Four Corners Power Plant Respons
Slide 8: 2021 Guidance
2021 Guidance Don Tarry Senior Vice President and CFO
Slide 9: Consolidated Earnings Guidance (Ongoing)
Consolidated Earnings Guidance (Ongoing) PNM Resources Consolidated Earnings Guidance Clean Energy 2020 Strong Financial 2021 Focus $2.23 - $2.31 $2.27 - $2.37 Profile Continued growth at regulated utilities through $0.15 $0.06 ($0.16) $2.27 $2.32 load growth and recovery Corporate Dilutive Utility
Slide 10: Consolidated Earnings Guidance by Segment (Ongoing)
Consolidated Earnings Guidance by Segment (Ongoing) Growth at regulated utilities PNM and TNMP 2020 Earnings Guidance • Retail load growth from new $2.23 Consolidated EPS $2.31 customers and the gradual decline of COVID-19 impacts in the 2nd half of 2021 are PNM TNMP Corp/Other partially offset by a
Slide 11: Load and Economic Conditions
Load and Economic Conditions PNM Continued impacts of COVID-19, with Q3 YTD commercial recovery in the 2nd half of 2021 PNM 2020E 2021E 2020 vs. 2019 Residential load growth reflects customer growth and continued increase in customer usage during COVID-19 Total Retail Load(1) (0.8%) ~(0.5%) 0.5% –
Slide 12: 2020 – 2024 Investment Plan
2020 – 2024 Investment Plan $4.1B investment plan focused on T&D infrastructure investments $1,016 $34 $807 $277 $766 $30 $762 $27 $27 $31 $712 $26 $123 $302 $321 $327 $197 $324 (in millions) $337 $320 $342 $348 $298 $316 $337 $361 $273 $289 $93 $83 $76 $55 $64 2020 2021 2022 2023 2024 PNM Generatio
Slide 13: Financing Plans
Financing Plans 2020 equity issuance strengthens balance sheet and credit metrics Long-term Debt Maturities (in millions) Corporate financing to be addressed through merger transaction $843 • Corporate maturities will be converted to $450 more flexible obligations to allow for early $970 repayment w
Slide 14: Dividend Increase
Dividend Increase Annual dividend targets middle of • Board of Directors a 50% - 60% payout ratio range increased the common dividend by $0.08 to $0.3275 per quarter $2.27 $2.32 (indicated annual rate of $2.16 $1.94 $2.00 $1.31 per share) • Represents 6.5% increase $1.31 $1.16 $1.23 $1.06 Dec ‘19 De
Slide 15: Appendix
Appendix
Slide 16: AVANGRID and PNM Resources Strategic Merger Transaction: Shareholder and Regulatory Approvals
AVANGRID and PNM Resources Strategic Merger Transaction: Shareholder and Regulatory Approvals Approvals expected to be completed in the second half of 2021 Shareholder Approval • Preliminary proxy expected to be filed in December 2020 • Meeting/vote expected February 2021 Regulatory Approvals and Es
Slide 17: PNM Guidance (Ongoing)
PNM Guidance (Ongoing) PNM Ongoing EPS $1.72 - $1.77 $1.63 - $1.69 2020E 2021E 2020 vs 2021 Key Year-over-Year EPS Performance Drivers Changes Retail load / COVID impacts $0.03 - $0.09 2020 weather (return to normal) ($0.07) FERC transmission margin $0.05 - $0.08 Coal mine decommissioning $0.03 Outa
Slide 18: TNMP Guidance (Ongoing)
TNMP Guidance (Ongoing) TNMP Ongoing EPS $0.72 - $0.74 $0.77 - $0.79 2020E 2021E 2020 vs 2021 Key Year-over-Year EPS Performance Drivers Changes Transmission rate relief (TCOS) $0.14 - $0.16 Distribution rate relief (DCOS) $0.13 - $0.15 Retail load / COVID impacts $0.03 - $0.05 2020 weather (return
Slide 19: Corporate and Other Guidance (Ongoing)
Corporate and Other Guidance (Ongoing) Corporate and Other Ongoing EPS ($0.21) – ($0.20) ($0.13) – ($0.11) 2020E 2021E 2020 vs 2021 Key Year-over-Year EPS Performance Drivers Changes Interest savings $0.05 - $0.08 NMRD income $0.01 Dilution from additional shares $0.01 19
Slide 20: 2021 Assumptions
2021 Assumptions Amounts shown are before tax, unless otherwise noted 2021E(1) PNM Weather $0 (normal) Retail Load 1% = $0.06 EPS Outage costs $13M - $15M Decommissioning/reclamation trust income, net of fees $15M - $17M Anticipated Ongoing effective tax rate (Statutory rate = 25.4%) 24.0% before am
Slide 21: Quarterly Earnings Distribution Guidance (Ongoing)
Quarterly Earnings Distribution Guidance (Ongoing) 2021 Quarterly Ongoing Earnings Distribution 55% 20% 16% 9% Q1 Q2 Q3 Q4 21
Slide 22: 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 PNM S&P Moody’s Issuer rating BBB Baa2 Outlook Positive Stable Senior unsecured rating BBB Baa2 Short-term issu