Slide 1: Q3 2012 Earnings Presentation
Q3 2012 Earnings Presentation November 2, 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: Q3 2012 Financial Results
Q3 2012 Financial Results Q3 2012 Q3 2011 YTD 2012 YTD 2011 Ongoing EPS $0.69 $0.61 $1.18 $0.85 GAAP EPS $0.72 $0.48 $1.20 $0.70 Improved earnings at PNM due to increased retail rates and cost control Renewable energy rider approved and implemented Strong TNMP weather-normalized load growth te
Slide 5: Load Growth and Economic Conditions
Load Growth and Economic Conditions Regulated Retail Energy Sales Growth (weather-normalized) Q3 2012 vs. Q3 2011 Q3 YTD 2012 vs. 12-Month Rolling Q3 YTD 2011 Average PNM(1) TNMP(2) PNM(1) TNMP(2) PNM(1) TNMP(2) Residential 0.0% 4.6% 0.0% 6.0% 0.6% 5.1% Commercial (0.4%) 6.3% 0.3% 3.2% 0.4% 2.2% Ind
Slide 6: PNM Regulatory Update
PNM Regulatory Update Expected Item Action Docket No. Timing PNM renewable energy rider Rider approved; rates August 20 12-00007-UT implemented PNM 2013 renewable energy plan Awaiting NMPRC final November 30 12-00131-UT decision Decoupling rulemaking Two workshops complete; TBD 12-00144-UT rule not
Slide 7: 2012 NM Election
2012 NM Election PRC Candidates • District 1 • Christopher Ocksrider (R) • Karen Montoya (D) • District 3 • Valerie Espinoza (D) Constitutional Amendments • Amendment 2: Establish minimum qualifications regarding education and/or relevant work experience • Amendment 3: Place oversight of corporation
Slide 8: San Juan BART Update
San Juan BART Update PNM is simultaneously moving forward on three paths to resolve BART • Install SCRs • State alternative plan • Litigation State’s alternative proposal • Retire Units 1 and 2 by year-end 2017 • SNCRs installed on Units 3 and 4 by year-end 2017 EPA “stay” extended additional
Slide 9: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 10: Q3 2012 Financial Summary
Q3 2012 Financial Summary Ongoing EPS $0.16 $0.01 ($0.01) ($0.08) TNMP Corp/Other $0.69 $0.61 First Choice PNM Power/Optim Energy (1) Q3 2011 Q3 2012 (1) After August 31, 2011 Optim Energy’s financial results were not included in PNM Resources’ ongoing earnings results. Sale of First Choice Power wa
Slide 11: PNM and TNMP: Q3 2012 vs Q3 2011 EPS (Ongoing)
PNM and TNMP: Q3 2012 vs Q3 2011 EPS (Ongoing) PNM Q3 2012 Key Performance Drivers ∆ EPS Retail rate relief and renewable rider $0.04 O&M reductions $0.03 $0.61 FERC generation rate relief $0.01 $0.45 Palo Verde Nuclear Decommissioning Trust $0.01 AFUDC $0.01 Other $0.02 Palo Verde 3 market price ($
Slide 12: Narrowing 2012 EPS Guidance Range (Ongoing)
Narrowing 2012 EPS Guidance Range (Ongoing) $1.26 Consolidated EPS $1.32 Utilities Corp/Other $1.42 - $1.47 ($0.16) – ($0.15) PNM TNMP $1.12 - $1.15 $0.30 - $0.32 12
Slide 13: Liquidity as of October 26, 2012
Liquidity as of October 26, 2012 PNM PNM Resources Resources PNM TNMP Consolidated Financing Capacity: (In millions) Revolving credit facility $300.0 $400.0 $75.0 $775.0 As of 10/26/12: Short-term debt and LOC balances $117.7 $3.5 $0.3 $121.5 Remaining availability 182.3 396.5 74.7 653.5 Invested ca
Slide 14: 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 15: Questions & Answers
Questions & Answers
Slide 16: Appendix
Appendix
Slide 17: PNM Plant EAF and Outages
PNM Plant EAF and Outages 92.4% 93.4% 2012 and 2013 Outage Schedule 85.7% 86.7% 83.7% 82.6% Duration Time Unit in Days Period San Juan 2 47 Q1 – Q2 2012 3 57 Q3 – Q4 2012 4 54 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 18: PNM Resources 5-Year Capital Plan
PNM Resources 5-Year Capital Plan 2012 - 2016 Amounts do not include potential capital spending in Total Capital Plan: $1.3B 2013 – 2016 at PNM for SCRs, (In millions) 2012 Depreciation: $146M renewables and additional peaking capacity $284 $286 $23 $12 $255 $251 $11 $12 $219 $93 $98 $12 $83 $89 $60
Slide 19: PNM Resources Potential Capital Additions
PNM Resources Potential Capital Additions 2013 - 2016 Total Potential Capital(1): $0.7B (In millions) $198 $210 $22 $152 $48 $59 $50 $102 $21 $150 $129 $102 $81 2013 2014 2015 2016 (2) (3) SCRs Additional peaking capacity Renewables (1) Amounts are representative of high-end of the potential range.
Slide 20: Regulatory Information
Regulatory Information
Slide 21: NMPRC Commissioners and Districts
NMPRC Commissioners and Districts NMPRC Districts and Term PNM Service Areas Name District Party Ends Jason Marks(1) District 1 2012 Democrat Patrick Lyons District 2 2014 Republican Chairman Douglas Howe(2) District 3 2012 Independent Theresa Becenti-Aguilar District 4 2014 Democrat Vice Chair Ben
Slide 22: 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 Rolando Pablos Sept. 2011 Aug. 2013 Republican Commissioners are appointed by Governor of Texas. Length of term is de
Slide 23: Utility Rate Base and Return
Utility Rate Base and Return Projected Allowed Rate Base % of Rate PNM Test Period (1) 2012 Avg. Equity ROE Increase in Filing Base Rate Base Ratio Retail Current Rates June 30, 2010 $1.8B $1.8B 86% 51.28% 10.00% $72.1M Renewables (2) Dec. 31, 2011 $68M $74M 4% 50.61% (2) 10.00% (2) $18.0M (2) FERC
Slide 24: Balance Sheet and Credit Metrics
Balance Sheet and Credit Metrics
Slide 25: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2011 Sep 30, 2012 Long-Term Debt (incl. current portion) PNM $1,215.5 $1,215.6 TNMP 311.0 311.4 PNMR 147.5 147.5 Consolidated $1,674.0 $1,674.5 Total Debt (incl. short-term) (1) PNM $1,281.5 $1,215.6 TNMP 311.0 311.4 PNMR 164.2 260.9 Consolida
Slide 26: 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 27: Environmental Compliance
Environmental Compliance
Slide 28: San Juan Generating Station BART
San Juan Generating Station BART The U.S. Environmental Protection Agency’s (EPA) Clean Air Act requires regional haze reduction at national parks and wilderness areas Compliance should be achieved through Best Available Retrofit Technology (BART) San Juan Generating Station’s alternatives for B
Slide 29: 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 30: 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 (FIP) – SCR ~$385M - $425M See “San Juan – BART Timeline” slide State of NM submitted with EPA in Clean Air Act – Regional Haze (SIP) – SNCR ~$40M - $