Slide 1: 2013 Earnings Presentation
2013 Earnings Presentation February 28, 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: 2013 Financial Results and Company Updates
2013 Financial Results and Company Updates Q4 2013 Q4 2012 YE 2013 YE 2012 Ongoing EPS $0.21 $0.13 $1.41 $1.31 GAAP EPS $0.10 $0.11 $1.25 $1.31 Credit ratings upgraded by Moody’s; positive outlook PNM Resources now rated investment grade by Moody’s and S&P Company affirms 2014 Guidance Range o
Slide 5: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales (weather-normalized and leap-year adjusted) PNM(1) TNMP(2) % of Q4 2013 vs. YE 2013 vs. % of Q4 2013 vs. YE 2013 vs. Sales Q4 2012 YE 2012 Sales Q4 2012 YE 2012 Residential ~35% (1.8%) (0.7%) Residential ~50% 5.3% 1.3% Commercial ~45% (0.4%)
Slide 6: Regulatory Update
Regulatory Update Filing Action Timing Docket No. NMPRC Delta Person CCN (peaking capacity) Filed January 3, 2013 Approved June 26, 2013 13-00004-UT NMPRC La Luz CCN (peaking capacity) Filed May 17, 2013 Settlement filed February 20, 2014 13-00175-UT Final Order expected Q2 – Q3 2014 NMPRC Fuel Clau
Slide 7: BART Agreement Update
BART Agreement Update EPA Review of RSIP RSIP and BART Filing December 17, 2013: Components Application deemed complete By May 1, 2014: Retirement of San Juan Units 2 EPA proposed action expected and 3 and recovery of expected 12/31/17 undepreciated By September 29, 2014: investments ($205M)
Slide 8: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 9: Q4 2013 Financial Summary
Q4 2013 Financial Summary Ongoing EPS $0.02 $0.21 $0.01 $0.05 Corporate TNMP $0.13 PNM Q4 2012 Q4 2013 9
Slide 10: PNM and TNMP: Q4 2013 vs Q4 2012 EPS
PNM and TNMP: Q4 2013 vs Q4 2012 EPS (Ongoing) PNM Q4 2013 Key Performance Drivers ∆ EPS $0.14 Outage Costs $0.07 Cost Control $0.01 $0.09 AFUDC $0.01 Weather $0.01 Transmission ($0.01) Load ($0.02) PNM Resources Foundation Contribution ($0.02) Q4 2012 Q4 2013 TNMP $0.08 $0.09 Q4 2013 Key Performanc
Slide 11: 2014 Guidance (Ongoing)
2014 Guidance (Ongoing) 2014 Guidance Range: $1.42 Consolidated EPS $1.52 PNM TNMP Corp/Other $1.15 - $1.21 $0.38 - $0.40 ($0.11) – ($0.09) 11
Slide 12: Potential Earnings Power
Potential Earnings Power 2014 2014 Mid Point 2016 Allowed Allowed Average of 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 9.5% $1.09 $2.2 B $0.27(1) $1.36 PNM renewables 10% 50% $120 M 1
Slide 13: 2013 Checklist
2013 Checklist Continue progress toward: Improving FERC earnings Optimizing the timing of TX TCOS filings Implementing San Juan BART agreement Maintain strong electric reliability and power plant availability Control O&M and capital costs Continue execution of plan to achieve top quartile tot
Slide 14: Questions & Answers
Questions & Answers
Slide 15: Appendix
Appendix
Slide 16: PNM Plant EAF and Outages
PNM Plant EAF and Outages 2014 - 2015 Outage Schedule 89.4% 91.4% Duration Time 84.2% Unit 80.5% in Days Period 77.6% 72.9% San Juan 2 29 Q1 2014 1 46 Q1 2015 4 46 Q4 2015 Four Corners 5 66 Q4 2013 – Q1 2014 4 13 Q4 2014 5 73 Q1 – Q2 2015 Palo Verde San Juan Four Corners Palo Verde 2 34 Q2 2014 2013
Slide 17: 5 Year Capital Forecast
Capital Forecast 2014 – 2018 Total Capital Plan: $2.2B PNM Rate Base CAGR: 6 - 8% TNMP Rate Base CAGR: 5 - 7% 5 Year Capital Forecast $509 $524 (In millions) $18 $14 $489 $14 $76 $443 $88 $14 $130 $86 $94 $71 $48 $302 $72 $14 $136 $154 $106 $316 $65 $263 $212 $194 $201 $209 $159 $166 $180 $117 2014
Slide 18: 2013 Financial Summary
2013 Financial Summary Ongoing EPS $0.03 $0.05 $1.41 $1.31 $0.02 TNMP Corporate PNM 2012 2013 A-4
Slide 19: PNM and TNMP: YE 2013 vs YE 2012 EPS
PNM and TNMP: YE 2013 vs YE 2012 EPS (Ongoing) PNM YE 2013 Key Performance Drivers ∆ EPS Outage Costs $0.08 Rate Relief $0.03 $1.16 PV3 Market Prices $0.03 $1.14 Cost Control Nuclear Decommissioning Trust $0.03 $0.02 Weather ($0.01) Transmission ($0.02) Depreciation ($0.02) PNM Resources Foundation
Slide 20: Weather Impact
Weather Impact PNM Q4 2013 Q4 2012 2013 Normal(1) Heating Degree Days 1,744 1,472 1,597 Cooling Degree Days 2 27 17 EPS Impact $0.01 $0.00 compared to normal TNMP Q4 2013 Q4 2012 2013 Normal(1) Heating Degree Days 876 592 651 Cooling Degree Days 225 295 279 EPS Impact $0.01 $0.00 compared to normal
Slide 21: Liquidity as of February 21, 2014
Liquidity as of February 21, 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 2/21/14: Short-term debt and LOC balances $97.6 $0.3 $8.6 $106.5 Remaining availability 352.4 74.7 291.4 718.5 Inve
Slide 22: Regulatory Information
Regulatory Information
Slide 23: 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 24: 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 25: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 26: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2012 Dec 31, 2013 Long-Term Debt (incl. current portion) PNM $1,215.6 $1,290.6 TNMP 311.6 336.0 Corporate/Other 145.1 118.8 Consolidated $1,672.3 $1,745.4 Total Debt (incl. short-term) (1) PNM $1,236.7 $1,339.8 TNMP 311.6 336.0 Corporate/Other
Slide 27: Credit Ratings
Credit Ratings S&P PNMR PNM TNMP Issuer debt rating BBB-(1) BBB(1) A-(2) Outlook Stable Stable Stable 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 28: Environmental Compliance
Environmental Compliance
Slide 29: 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 Draft decision by EPA expecte
Slide 30: 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 31: 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 $82M SNCR technology on 2 units; Retire 2 units Included in SNCR and Balanced Draft , which has been included in the Reg