Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Q4 2019 Earnings Presentation
26 slides from Txnm Energy's earnings presentation, Feb 28, 2020
Slide 1: Q4 2019 Earnings Review
Q4 2019 Earnings Review February 28, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation for PNM Resources, Inc. (“PNMR”), Public Service Company of New Mexico (“PNM”), or Texas‐New Mexico Power Company (“TNMP”) (collectively, the “Company”) that relate to future events or expectations, projections, estimates, intentions, goals,
Slide 3: Opening Remarks and Overview
Opening Remarks and Overview Pat Vincent-Collawn Chairman, President and CEO
Slide 4: Financial Results, Key Highlights and Company Updates
Financial Results, Key Highlights and Company Updates Financial Results Q4 2019 Q4 2018 2019 2018 GAAP EPS $0.40 ($0.69) $0.97 $1.07 Ongoing EPS $0.36 $0.18 $2.16 $2.00 • 2020 Ongoing EPS Guidance $2.16 - $2.26 affirmed Key Highlights and Company Updates 2019 Key Highlights • New Mexico’s Energy Tra
Slide 5: PNM and TNMP Regulatory Agenda
PNM and TNMP Regulatory Agenda Filing Action Timing Docket No. PNM: PNM filed July 1, 2019; NMPRC bifurcated case; New Mexico Supreme Court ruled January 29, 2020 that Energy Consolidated Application Transition Act applies to both dockets for San Juan Generating Abandonment/securitization: NMPRC 19-
Slide 6: Financial Overview
Financial Overview Don Tarry Senior Vice President and CFO
Slide 7: FY 2019 Ongoing EPS Financial Summary
FY 2019 Ongoing EPS Financial Summary $0.13 $0.05 ($0.02) $2.16 $2.00 TNMP Corporate PNM FY 2018 FY 2019 7 Note: Segment drivers included in appendix
Slide 8: Load and Economic Conditions
Load and Economic Conditions PNM Continued customer growth partially offset by Year-over-Year 2019 2019 2020 Commercial energy efficiency impacts Growth Actuals Projection Projection Load and weather: Total Retail Load 0.3% 0.0% - 1.0% 0.5% - 1.5% • Positive Q4 growth brings annual results in line A
Slide 9: Consolidated EPS and 2020 Earnings Guidance
2020 Consolidated Ongoing Earnings Guidance 2019 Earnings Guidance / Actuals $2.13 Consolidated EPS Guidance $2.16 Actual EPS: $2.16 PNM TNMP Corp/Other Guidance: $1.64 – $1.65 Guidance: $0.70 – $0.71 Guidance: ($0.21) – ($0.20) Actual: $1.67 Actual: $0.70 Actual: ($0.21) 2020 Earnings Guidance $2.1
Slide 10: 2020 – 2023 Investment Plan
2020 – 2023 Investment Plan $3.3B investment plan results in 8.9% rate base growth $992 $21 $839 $177 $27 $27 $25 $771 $48 $695 $109 $21 $68 $268 $72 $128 $94 $77 $82 $196 $182 $202 (in millions) $174 $345 $337 $306 $342 $322 $348 $275 $270 2020 2021 2022 2023 TNMP PNM T&D PV Lease Purchases/Other R
Slide 11: 2020 - 2023 Potential Earnings Power
2020 - 2023 Potential Earnings Power Earnings Growth Target 5-6% Incorporates impact of January 2020 forward equity offering dilution beginning 2021 2020 Ongoing Earnings 2021 Earnings 2022 Earnings 2023 Earnings Allowed Return / Guidance Midpoint Potential Potential Potential Equity Avg Rate Avg Ra
Slide 12: Questions and Answers
Questions and Answers
Slide 13: Appendix
Appendix
Slide 14: 2020 Quarterly Ongoing Earnings Distribution
2020 Quarterly Ongoing Earnings Distribution 2020 Annual EPS Distribution by Quarter 55% 22% 15% 8% Q1 Q2 Q3 Q4 14
Slide 15: 2020 - 2023 Potential Earnings Power
2020 - 2023 Potential Earnings Power 2020 Ongoing Earnings 2021 Earnings 2022 Earnings 2023 Earnings Allowed Return / Guidance Midpoint Potential Potential Potential Equity Avg Rate Avg Rate Avg Rate Avg Rate Ratio Return EPS EPS EPS EPS Base Base Base Base 9.575% / PNM Retail(1) $2.5 B 9.5% $1.47 $
Slide 16: Q4 and FY 2019 Ongoing EPS Financial Summary
Q4 and FY 2019 Ongoing EPS Financial Summary Q4 EPS Summary Q4 2019 Q4 2018 Change PNM Resources $0.36 $0.18 $0.18 PNM $0.28 $0.10 $0.18 TNMP $0.14 $0.14 $0.00 Corporate/Other ($0.06) ($0.06) $0.00 FY EPS Summary FY 2019 FY 2018 Change PNM Resources $2.16 $2.00 $0.16 PNM $1.67 $1.54 $0.13 TNMP $0.70
Slide 17: Q4 2019 vs Q4 2018 EPS (Ongoing): PNM
Q4 2019 vs Q4 2018 EPS (Ongoing): PNM PNM Q4 2019 Key Performance Drivers ∆ EPS $0.28 Lower plant maintenance costs $0.07 O&M decreases $0.05 Retail rate phase-in, including excess deferred income taxes $0.03 $0.10 Decommissioning/reclamation trust income, net of fees $0.02 Weather and retail load $
Slide 18: Q4 2019 vs Q4 2018 EPS (Ongoing): TNMP
Q4 2019 vs Q4 2018 EPS (Ongoing): TNMP TNMP Q4 2019 Key Performance Drivers ∆ EPS $0.14 $0.14 Weather and retail load $0.01 AFUDC $0.01 Interest expense savings $0.01 Q4 2018 Q4 2019 Depreciation and property tax ($0.03) 18
Slide 19: 2019 vs 2018 EPS (Ongoing): PNM
2019 vs 2018 EPS (Ongoing): PNM PNM 2019 Key Performance Drivers ∆ EPS $1.67 Lower plant maintenance costs $0.08 $1.54 Decommissioning/reclamation trust income, net of fees $0.07 Retail rate phase-in, including excess deferred income taxes $0.07 Interest expense savings $0.04 Renewable rider $0.01 O
Slide 20: 2019 vs 2018 EPS (Ongoing): TNMP and Corporate
2019 vs 2018 EPS (Ongoing): TNMP and Corporate TNMP 2019 Key Performance Drivers ∆ EPS Rate relief, including TCOS $0.06 $0.65 $0.70 Interest expense savings $0.03 Weather and retail load $0.02 O&M decrease $0.01 Depreciation and property tax ($0.07) 2018 2019 Corporate ($0.19) ($0.21) 2019 Key Perf
Slide 21: Weather Impact
Weather Impact PNM Q4 2019 Q4 2018 2019 Normal(1) Heating Degree Days 1,005 1,005 861 Cooling Degree Days 10 18 14 Net EPS Impact $0.02 $0.02 compared to normal TNMP Q4 2019 Q4 2018 2019 Normal(1) Heating Degree Days 668 719 617 Cooling Degree Days 297 246 283 Net EPS Impact $0.00 $0.00 compared to
Slide 22: 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 No planned outages in 2020 5 76 Q1-Q2 2020 2 30 Q2 2020 4 12 Q2 2020 1 44 Q4 2020 22
Slide 23: Appendix Balance Sheet and Credit Metrics
Appendix Balance Sheet and Credit Metrics
Slide 24: Liquidity as of February 21, 2020
Liquidity as of February 21, 2020 PNMR PNMR PNM Develop- Corporate Resources PNM TNMP ment /Other Consolidated Financing Capacity(1): (In millions) Revolving credit facilities $440.0 $75.0 $40.0 $300.0 $855.0 As of 02/21/20: Short-term debt and LOC balances $67.9 $43.2 - $148.5 $259.6 Remaining avai
Slide 25: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec 31, 2018 Dec 31, 2019 Long-Term Debt (incl. current portion) (1) PNM $1,656.5 $1,748.0 TNMP 575.4 670.7 Corporate/Other 438.2 589.0 Consolidated $2,670.1 $3,007.7 Total Debt (incl. short-term) (1,2) PNM $1,698.9 $1,806.0 TNMP 592.9 685.7 Corporate
Slide 26: 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 A- A3 Issuer outlook Negative Stable Senior s