Slide 1: Q1 2012 Earnings Presentation
Q1 2012 Earnings Presentation May 4, 2012
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: Q1 2012 Financial Results and Company Updates
Q1 2012 Financial Results and Company Updates Q1 2012 Q1 2011 Ongoing EPS $0.17 $0.04 GAAP EPS $0.21 $0.18 Rate relief and structure, cost control improve PNM results Mild winter offsets benefit of full-quarter rate increase for TNMP S&P upgraded debt ratings for PNM Resources and TNMP • Corpo
Slide 5: Economic Conditions
Economic Conditions Regulated Retail Energy Sales Growth Q1 2012 vs Q1 2011 (3) (weather-normalized) Unemployment Rate Leap Year Included PNM(1) TNMP(2) Residential (0.3%) 5.4% 8.2% Commercial 1.6% (3.5%) 7.2% 7.0% Industrial 2.2% (7.8%) Total Retail 0.8% 0.6% Leap Year Excluded PNM(1) TNMP(2) NM TX
Slide 6: New Mexico Regulatory Update
New Mexico Regulatory Update Item Docket No. Action Timing FERC transmission case ER11-1915-002, et. al Settlement discussions June 1, 2012 FERC generation case ER11-4535-000 and Appearance before FERC May 16, 2012 ER12-72-000 settlement judge 2013 renewable energy plan 12-00131-UT Filing made April
Slide 7: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 8: Q1 2012 Financial Summary
Q1 2012 Financial Summary Ongoing EPS $0.17 ($0.03) ($0.01) $0.17 First Choice Power/ TNMP Optim Energy (1) $0.04 PNM 2011 2012 (1) After August 31, 2011 Optim Energy’s financial results have not been included in PNM Resources’ ongoing earnings results. Sale of First Choice Power was completed on No
Slide 9: PNM and TNMP: Q1 2012 vs Q1 2011 EPS (Ongoing)
PNM and TNMP: Q1 2012 vs Q1 2011 EPS (Ongoing) $0.18 PNM Q1 2012 Key Performance Drivers ∆ EPS Rate relief $0.12 O&M reductions $0.02 PNM Resources share repurchase $0.02 Lower outage costs $0.01 PV3 market price ($0.02) $0.01 Other $0.02 2011 2012 TNMP Q1 2012 Key Performance Drivers ∆ EPS Rate rel
Slide 10: Credit Rating Agency Actions
Credit Rating Agency Actions S&P Upgraded PNM Resources’ corporate credit rating to BBB- from BB on April 13, 2012, outlook stable Upgraded debt ratings one notch for PNM Resources and TNMP, PNM rating remains the same PNMR PNM TNMP Debt rating BB+ (1) BBB- (1) BBB+ (2) Outlook Stable Stable Sta
Slide 11: Consolidated EPS: Affirming 2012 Guidance (Ongoing)
Affirming 2012 Guidance (Ongoing) $1.20 Consolidated EPS $1.32 PNM TNMP Corp/Other $1.08 - $1.15 $0.28 - $0.32 ($0.16) – ($0.15) 11
Slide 12: Key Strategic Goals and 2012 Checklist
Key Strategic Goals and 2012 Checklist 2012 Checklist Strategic Goals Earn Authorized Return on Achieve successful outcomes in: our Regulated Businesses PNM future test year rulemaking PNM FERC transmission rate case Continue to Improve Credit Ratings PNM FERC generation rate case PNM rene
Slide 13: Questions & Answers
Questions & Answers
Slide 14: Appendix
Appendix
Slide 15: PNM Plant EAF and Outages
PNM Plant EAF and Outages 97.0% 2012 and 2013 Outage Schedule 90.7% 92.4% 89.6% 83.2% 85.5% Duration Time Unit in Days Period San Juan 2 47 Q1 – Q2 2012 3 54 Q3 – Q4 2012 4 47 Q1 – Q2 2013 1 40 Q4 2013 Four Corners 5 17 Q2 2012 4 21 Q2 2013 San Juan Four Corners Palo Verde Palo Verde 3 32 Q1 - Q2 20
Slide 16: PNM Resources 5-Year Capital Plan
PNM Resources 5-Year Capital Plan 2012 - 2016 Amounts do not include Total Capital Plan: $1.3B potential capital spending at PNM including SCRs, renewables and additional peaking capacity (In millions) $283 $286 $23 $12 $255 $251 $11 $12 $219 $89 $98 $12 $83 $89 $60 $64 $64 $58 $63 $52 $107 $99 $111
Slide 17: PNM Resources 5-Year Potential Capital Additions
PNM Resources 5-Year Potential Capital Additions 2012 – 2016 Total Potential Capital(1): $0.7B (In millions) $237 $27 $193 $166 $45 $15 $16 $22 $46 $53 $166 $80 $3 $104 $103 $27 $27 $4 $49 $23 2012 2013 2014 2015 2016 (2) (3) SCRs Additional peaking capacity Renewables Other environmental compliance
Slide 18: Regulatory Information
Regulatory Information
Slide 19: NMPRC Commissioners and Districts
NMPRC Commissioners and Districts NMPRC Districts and Term PNM Service Areas Name District Party Ends Jason Marks District 1 2012 Democrat Patrick Lyons District 2 2014 Republican Chairman Douglas Howe District 3 2012 Independent Theresa Becenti-Aguilar District 4 2014 Democrat Vice Chair Ben Hall D
Slide 20: Utility Rate Base and Return
Utility Rate Base and Return Rate Projected Allowed % of Rate PNM Test Period (1) Base in 2012 Avg. Equity ROE Increase Base Filing Rate Base Ratio Retail Current Rates June 30, 2010 $1.8B $1.8B 86% 51.28% 10.00% $72.1M Renewables Dec. 31, 2011 $68M $74M 4% 50.61% 10.00% $18.0M FERC Transmission Cur
Slide 21: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 22: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2011 Mar 31, 2012 Long-Term Debt (incl. current portion) PNM $1,215.5 1,215.6 TNMP 311.0 311.1 PNMR 147.5 147.5 Consolidated $1,674.0 $1,674.2 Total Debt (incl. short-term) (1) PNM $1,281.5 $1,259.7 TNMP 311.0 311.1 PNMR 164.2 253.2 Consolidat
Slide 23: Liquidity as of April 27, 2012
Liquidity as of April 27, 2012 PNM PNM Resources Resources PNM TNMP Consolidated Financing Capacity: (In millions) Revolving credit facility $300.0 $400.0 $75.0 $775.0 Bi-lateral line of credit 5.0 - - 5.0 Total Capacity $305.0 $400.0 $75.0 $780.0 As of 4/27/12: Short-term debt and LOC balances $123
Slide 24: Credit Ratings
Credit Ratings Moody’s PNMR PNM TNMP Debt rating Ba1(1) Baa3(1) A3(2) Outlook Stable Stable Stable S&P PNMR PNM TNMP Debt rating BB+ (1) BBB- (1) BBB+ (2) Outlook Stable Stable Stable (1) Senior unsecured debt (2) Senior secured debt A-11
Slide 25: Environmental Compliance
Environmental Compliance
Slide 26: San Juan – BART Timeline
San Juan – BART Timeline Proposed State Implementation Plan revisions filed with EPA in July 2011 Called for SNCR technology PNM estimate of costs @ ~$77M (total plant costs) Final BART determination issued Aug. 5, 2011 Calls for installation of SCR technology on all four units within five
Slide 27: 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 X X San Juan Unit 2 170 X X X X San Juan Unit 3 249 X X X X San Juan Unit 4 194 X X X X Four C
Slide 28: Impact of Proposed Environmental Regulation
Impact of Proposed Environmental Regulation Estimated Compliance Costs Comments (PNM Share) San Juan Generating Station See “San Juan – BART Timeline” Clean Air Act – Regional Haze (FIP) – SCR ~$340M - $460M slide State of NM submitted with EPA in Clean Air Act – Regional Haze (SIP) – SNCR ~$36M ear
Slide 29: Investor Relations Contacts
Investor Relations Contacts Jimmie Blotter, Investor Relations Manager • 505-241-2227; Jimmie.Blotter@pnmresources.com Terry Horn, Vice President and Treasurer • 505-241-2119; Terry.Horn@pnmresources.com A-16