Slide 1: Q3 2014 Earnings Presentation
Q3 2014 Earnings Presentation October 31, 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation that relate to future events or PNM Resources’ (“PNMR”), Public Service Company of New Mexico’s (“PNM”), or Texas-New Mexico Power Company’s (“TNMP”) (collectively, the “Company”) expectations, projections, estimates, intentions, goals, targ
Slide 3: Opening Remarks & Overview
Opening Remarks & Overview Pat Vincent-Collawn Chairman, President and CEO
Slide 4: Q3 2014 Financial Results and Company Updates
Q3 2014 Financial Results and Company Updates Q3 2014 Q3 2013 YTD 2014 YTD 2013 Ongoing EPS $0.68 $0.64 $1.25 $1.20 GAAP EPS $0.69 $0.68 $1.21 $1.15 2014 Guidance Range of $1.44 - $1.51 affirmed EPA approves San Juan Generating Station RSIP BART Proposed Settlement Filed with NMPRC EPS shown o
Slide 5: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales (weather-normalized) PNM % of FY Q3 2014 vs. YTD 2014 vs. TNMP 2013 Sales Q3 2013 YTD 2013 % of FY Q3 2014 vs. YTD 2014 vs. Residential 39% 1.7% (0.6%) 2013 Sales Q3 2013 YTD 2013 Commercial 46% 0.1% (1.1%) Residential 51% 0.4% 1.6% Industri
Slide 6: BART Settlement Update
BART Settlement Update RSIP and BART Settlement Principle Components NMPRC Review of BART Filing Retirement of San Juan Units 2 and 3 and recovery of half of the December 20, 2013: 12/31/17 undepreciated PNM submitted filing to NMPRC investments (expected to be 2014 - 2015: ~$115M) NMPRC revie
Slide 7: Regulatory Update
Regulatory Update Filing Action Timing Docket No. NMPRC BART Filing Filed December 20, 2013 Proposed settlement filed October 1, 2014 13-00390-UT Final approval expected Q1 2015 NMPRC 2015 Renewable Plan Filed June 2, 2014 Proposed settlement filed September 25, 2014 14-00158-UT Final approval expec
Slide 8: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 9: Q3 2014 Financial Summary
Q3 2014 Financial Summary Ongoing EPS $0.02 $0.01 $0.01 $0.68 $0.64 TNMP PNM Corporate Q3 2013 Q3 2014 9
Slide 10: PNM and TNMP: Q3 2014 vs Q3 2013 EPS (Ongoing)
PNM and TNMP: Q3 2014 vs Q3 2013 EPS (Ongoing) PNM $0.54 $0.55 Q3 2014 Key Performance Drivers ∆ EPS Rio Bravo (Formerly Delta) Purchase $0.01 PV3 Market Prices $0.01 NDT Gains $0.01 Navajo Workforce Training Initiative $0.01 Depreciation & Property Tax ($0.01) Gallup Contract ($0.01) Weather ($0.02
Slide 11: 2014 Guidance (Ongoing)
2014 Guidance (Ongoing) 2014 Guidance Range: $1.44 Consolidated EPS $1.51 PNM TNMP Corp/Other $1.11 - $1.15 $0.43 - $0.45 ($0.10) – ($0.09) 11
Slide 12: Questions & Answers
Questions & Answers
Slide 13: Appendix
Appendix
Slide 14: Potential Earnings Power
Potential Earnings Power Strong potential earnings growth 2014 to 2016 2014 2014 Mid Point of 2016 Allowed Allowed Average Guidance Expected Potential Earnings 2016 Potential Equity Return Rate Average Growth Earnings Power Ratio Return EPS Base Rate Base PNM retail 10% 50% $1.9 B 9% $1.02 $2.2 B $0
Slide 15: PNM Plant EAF and Outages
PNM Plant EAF and Outages 91.3% 89.5% 2014 - 2015 Outage Schedule Duration Time 75.2% 77.0% 77.4% Unit in Days Period 67.3% San Juan 1 46 Q1 2015 4 46 Q4 2015 Four Corners 4 13 Q4 2014 5 73 Q1 – Q2 2015 Palo Verde 1 34 Q4 2014 San Juan Four Corners Palo Verde 3 34 Q2 2015 12 months ending 9/30/13 2
Slide 16: 5 Year Capital Forecast
Capital Forecast 2014 – 2018 Total Capital Plan: $2.3B PNM Rate Base CAGR: 6 - 8%(1) 5 Year Capital Forecast TNMP Rate Base CAGR: 6 - 8% $558 (In millions) $14 $509 $499 $19 $101 $14 $443 Palo Verde $14 Unit 3 $130 $113 added to $78 rate base $94 $48 $71 $302 $136 $72 $14 $153 $106 $301 $65 $263 $22
Slide 17: Weather Impact
Weather Impact PNM Q3 2014 Q3 2013 2014 Normal(1) Heating Degree Days 8 23 14 Cooling Degree Days 952 997 1,050 EPS Impact ($0.03) ($0.01) compared to normal TNMP Q3 2014 Q3 2013 2014 Normal(1) Heating Degree Days 2 1 0 Cooling Degree Days 1,689 1,761 1,747 EPS Impact ($0.01) $0.00 compared to norma
Slide 18: Liquidity as of October 24, 2014
Liquidity as of October 24, 2014 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 10/24/14: Short-term debt and LOC balances $3.2 $0.1 $7.7 $11.0 Remaining availability 446.8 74.9 292.3 814.0 Invest
Slide 19: Regulatory Information
Regulatory Information
Slide 20: NMPRC Commissioners and Districts
NMPRC Commissioners and Districts NMPRC Districts and Term PNM Service Areas Name District Party Ends Karen Montoya District 1 2016 Democrat Patrick Lyons District 2 2014 Republican Valerie Espinoza District 3 2016 Democrat Vice Chair Theresa Becenti-Aguilar District 4 2014 Democrat Chairman Ben Hal
Slide 21: Public Utility Commission of Texas Commissioners
Public Utility Commission of Texas Commissioners Term Term Name Party Began Ends Donna Nelson Aug. 2008 Aug. 2015 Republican Chairman Kenneth Anderson Sept. 2008 Aug. 2017 Republican Brandy Marty(1) Aug. 2013 Aug. 2019 Republican Commissioners are appointed by Governor of Texas. Length of term is de
Slide 22: Elections
Elections NM Governor’s Race TX Governor’s Race Candidate Party Current Office Candidate Party Current Office Susana Martinez Republican Governor (NM) Attorney General Incumbent Greg Abbott Republican (TX) Attorney General Gary King Democrat Wendy Davis Democrat State Senator (TX) (NM) NMPRC Race Di
Slide 23: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 24: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2013 Sept 30, 2014 Long-Term Debt (incl. current portion) PNM $1,290.6 $1,390.6 TNMP 336.0 365.8 Corporate/Other 118.8 118.8 Consolidated $1,745.4 $1,875.2 Total Debt (incl. short-term) (1) PNM $1,339.8 $1,390.6 TNMP 336.0 365.8 Corporate/Othe
Slide 25: Credit Ratings
Credit Ratings S&P PNMR PNM TNMP Issuer debt rating BBB-(1) BBB(1) A-(2) Outlook Positive Positive Positive Moody’s PNMR PNM TNMP Debt rating Baa3(1) Baa2(1) A2(2) Outlook Positive Positive Positive (1) Senior unsecured debt (2) Senior secured debt A-13
Slide 26: Environmental Compliance
Environmental Compliance
Slide 27: San Juan BART Timeline
San Juan BART Timeline Expected Actual Action Item Completion Completion EIB approval of RSIP submitted by NMED September 5, 2013 Submitted RSIP to EPA for approval October 18, 2013 EPA review and approval of RSIP Application deemed complete by EPA December 17, 2013 Preliminary approval by EPA A
Slide 28: Environmental Control Equipment at Coal Units
Environmental Control Equipment at Coal Units PNM Share Low NOx Activated Coal Unit Capacity Burners/ Carbon SNCR (2) SCR (2) Baghouse (3) Scrubbers (MW) Overfired Air Injection (1) San Juan Unit 1 170 X X Expected X X 2016 San Juan Unit 2 170 X X X X San Juan Unit 3 248 X X X X Expected San Juan Un
Slide 29: Impact of Proposed Environmental Regulation
Impact of Proposed Environmental Regulation Estimated Compliance Costs Comments (PNM Share) San Juan Generating Station Clean Air Act – Regional Haze(1) (State Alternative) – SNCR $91M SNCR technology on 2 units; Retire 2 units. Included in SNCR and SCR(1) Balanced Draft , which has been included in
Slide 30: EPA’s Proposed Clean Power Plan
EPA’s Proposed Clean Power Plan The goal of the plan is an estimated 30% reduction in CO2 emissions from the U.S. electric power sector in 2030, 10 New Mexico Facilities Affected relative to 2005 levels. Coal Plants o Requires each state to develop and implement a state plan to San Juan (PNM) reduce