Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q2 2018 Earnings Presentation
22 slides from Txnm Energy's earnings presentation, Jul 31, 2018
Slide 1: Q2 2018 Earnings Review
Q2 2018 Earnings Review July 31, 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation that relate to future events or PNM Resources, Inc.’s (“PNMR”), Public Service Company of New Mexico’s (“PNM”), or Texas‐New Mexico Power Company’s (“TNMP”) (collectively, the “Company”) expectations, projections, estimates, intentions, goal
Slide 3: Opening Remarks and Overview
Opening Remarks and Overview Pat Vincent‐Collawn Chairman, President and CEO
Slide 4: Q2 2018 Financial Results and Regulatory Updates
Q2 2018 Financial Results and Regulatory Updates Financial Results: Q2 2018 Q2 2017 YTD 2018 YTD 2017 GAAP EPS $0.48 $0.47 $0.67 $0.75 Ongoing EPS $0.53 $0.49 $0.73 $0.77 • 2018 Ongoing EPS Guidance raised to $1.91 ‐ $1.98 • 2019 Ongoing EPS Guidance raised to $2.08 ‐ $2.18 Company Updates: • TNMP:
Slide 5: Transformation of PNM Generation Portfolio
Transformation of PNM Generation Portfolio 2018 • June: Integrated Resource Plan hearings completed • December: Compliance filing required by BART settlement outlining extent of further operation of San Juan Generating Station after 2022 2019 • January‐March: Securitization bill may be addressed dur
Slide 6: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 7: Load and Economic Conditions
Load and Economic Conditions Regulated Retail Energy Sales and Customers (weather‐normalized) Q2 2018 YTD 2018 PNM / TNMP vs. vs. 2018E 2019E Q2 2017 YTD 2017 PNM Residential & Commercial 1.1% 0.2% ~0.3% Total PNM Retail Load 1.0% (0.1%) 0% – 0.5% PNM Avg. Customers 0.8% 0.8% ~0.5% per year TNMP Tot
Slide 8: Q2 2018 Financial Summary
Q2 2018 Financial Summary Ongoing EPS $0.04 ($0.02) $0.53 $0.49 $0.02 PNM TNMP Corporate Q2 2017 Q2 2018 8
Slide 9: Consolidated Earnings and Quarterly Earnings Distribution Guidance
Consolidated Earnings and Quarterly Earnings Distribution Guidance (Ongoing) Consolidated Earnings Guidance 2018 Previous Revised Quarterly Ongoing Earnings Distribution 53% Consolidated EPS $1.82 ‐ $1.92 $1.91 ‐ $1.98 27% PNM $1.39 ‐ $1.46 $1.48 ‐ $1.52 11% 9% TNMP $0.54 ‐ $0.56 $0.60 ‐ $0.62 Q1 Q2
Slide 10: Capital Forecast
Capital Forecast Targeted Consolidated 2018‐2021 Rate Base CAGR(1): 6% ‐ 7% 2018–2022 Total Capital Plan: $2.7B $680 Palo Verde $17 Unit 3 added to rate base (In millions) $170 $514 $528 $17 $500 $503 $19 $17 $17 $116 $190 $170 $215 $170 $51 $37 $81 $146 $297 $114 $122 $157 $10 $62 $96 $111 $94 $80
Slide 11: Questions and Answers
Questions and Answers
Slide 12: Appendix
Appendix
Slide 13: PNM and TNMP Regulatory Update
PNM and TNMP Regulatory Update Filing Action Timing Docket No. PNM Appeal of 2015 General Rate Case to New Mexico Oral arguments held October 30, 2017 No statutory timeline S‐1‐SC‐36115 Supreme Court PNM 2017 Integrated Hearings completed in June; post‐hearing Pending hearing examiner 17‐00174‐UT Re
Slide 14: Q2 2018 vs Q2 2017 EPS (Ongoing): PNM
Q2 2018 vs Q2 2017 EPS (Ongoing): PNM PNM Q2 2018 Key Performance Drivers ∆ EPS Tax reform $0.07 Retail rate phase‐in $0.06 (includes federal and accelerated state tax amortization) $0.36 $0.38 Transmission margin $0.04 Weather $0.03 Retail load $0.02 Interest expense savings $0.01 Other $0.01 Q2 20
Slide 15: Q2 2018 vs Q2 2017 EPS (Ongoing): TNMP and Corporate
Q2 2018 vs Q2 2017 EPS (Ongoing): TNMP and Corporate TNMP $0.19 Q2 2018 Key Performance Drivers ∆ EPS $0.15 TCOS rate relief $0.02 Weather $0.01 Load $0.01 Other $0.01 Q2 2017 Q2 2018 Depreciation and property tax ($0.01) Corporate Q2 2018 Key Performance Drivers ∆ EPS Interest expense ($0.01) ($0.0
Slide 16: Potential Earnings Power
Potential Earnings Power 2018 Ongoing Earnings 2019 Ongoing Earnings 2020 Earnings 2021 Earnings Allowed Guidance Midpoint Guidance Midpoint Potential Potential Return / Equity Avg Rate Return EPS Avg Rate Return EPS Avg Rate EPS Avg Rate EPS Ratio Base Base Base Base 9.575% / PNM Retail(1) $2.3 B 9
Slide 17: Weather Impact
Weather Impact PNM Q2 2018 Q2 2017 2018 Normal(1) Heating Degree Days 22 83 70 Cooling Degree Days 674 497 494 Net EPS Impact $0.05 $0.01 compared to normal TNMP Q2 2018 Q2 2017 2018 Normal(1) Heating Degree Days 85 18 45 Cooling Degree Days 1,097 1,017 1,012 Net EPS Impact $0.02 $0.01 compared to n
Slide 18: PNM Scheduled Plant Outages
PNM Scheduled Plant Outages San Juan Four Corners Palo Verde Duration Time Duration Time Duration Time Unit Unit Unit in Days Period in Days Period in Days Period 4 43 Q1‐Q2 2019 4 12 Q2 2019 2 44 Q4 2018 5 12 Q2 2019 1 30 Q2 2019 3 43 Q4 2019 18
Slide 19: Balance Sheet and Credit Ratings
Balance Sheet and Credit Ratings
Slide 20: Liquidity as of July 25, 2018
Liquidity as of July 25, 2018 PNMR PNMR PNM Develop‐ Corporate Resources PNM TNMP ment /Other Consolidated Financing Capacity(1): (In millions) Revolving credit facilities $440.0 $75.0 $24.5 $300.0 $839.5 As of 7/25/18: Short‐term debt and LOC balances $21.3 $6.3 $24.5 $117.5 $169.6 Remaining availa
Slide 21: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2017 June 30, 2018 Long‐Term Debt (incl. current portion) (1) PNM $1,657.9 $1,655.8 TNMP 480.6 540.3 Corporate/Other 299.1 397.9 Consolidated $2,437.6 $2,594.0 Total Debt (incl. short‐term) (2) PNM $1,697.7 $1,689.4 TNMP 480.6 553.8 Corporate/
Slide 22: Credit Ratings
Credit Ratings PNMR Consolidated S&P Moody’s Issuer rating BBB+ Baa3 Outlook Negative Stable Senior unsecured rating BBB Baa3 PNM S&P Moody’s Issuer rating BBB+ Baa2 Outlook Negative Stable Senior unsecured rating BBB+ Baa2 TNMP S&P Moody’s Issuer rating BBB+ A3 Issuer outlook Negative Stable Senior