Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — Investor Conference Call (September 2011)
16 slides from Txnm Energy's conference presentation, Sep 23, 2011
Slide 1: Investor Conference Call
Investor Conference Call Sept. 23, 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Statements made in this presentation that relate to future events or PNM Resources’, Public Service Company of New Mexico’s (“PNM”), or Texas-New Mexico Power Company’s (“TNMP”) (collectively, the
Slide 3: Overview
Overview Pat Vincent-Collawn President and CEO
Slide 4: PNM Resources Strategic Goals
PNM Resources Strategic Goals Earn Authorized Return on Our Regulated Businesses Maximize the Value of Our Competitive Businesses Return to Solid Investment Grade Credit Ratings Reposition PNM Resources as a pure-play electric utility 4
Slide 5: Progress of Regulated Businesses
Progress of Regulated Businesses Recent Successes 2009 Received multiple rate increases at both utilities $77M rate increase at Permanent fuel clause at $13M rate increase at PNM PNM TNMP Reinstated permanent fuel clause at PNM Sold PNM gas operations and used proceeds for 2011 debt reduction
Slide 6: Exit of Competitive Businesses
Exit of Competitive Businesses Strategic Benefits Repositions PNM Resources as a pure-play electric utility • Focuses strategic direction on regulated utilities • Dramatically reduces exposure to the energy commodity markets and competitive businesses Financial Benefits Strengthens PNM Resources
Slide 7: Transaction Details
Transaction Details Chuck Eldred Executive Vice President and CFO
Slide 8: First Choice Power Sale Details
First Choice Power Sale Details Summary Purchaser Direct Energy Purchase Price $270M + working capital Form of Transaction Sale of PNM Resources’ 100% equity interest Financing Contingency None Required Approvals Hart-Scott-Rodino / PUCT notification Target Closing Date Nov. 1, 2011 8
Slide 9: Optim Energy Exit
Optim Energy Exit Summary Previous Structure 50% Cascade 50% PNM Resources • Impaired investment in Optim to $0 in 2010 New Structure 99% Cascade 1% PNM Resources Financial Obligations None Required Approvals None Closing Date Sept. 23, 2011 Ongoing Earnings PNM Resources will no longer include Opti
Slide 10: Use of Proceeds—First Choice Power Sale
Use of Proceeds—First Choice Power Sale Business is being recapitalized by repurchasing debt and equity Source of proceeds: Purchase price $270M + working capital Use of proceeds: Retire up to $75M of PNM Resources 9.25% SUNs Repurchase up to $230M of PNM Resources equity • Repurchase Series A
Slide 11: Updated 2011 Guidance
Updated 2011 Guidance (ongoing) $0.80 Prior Consolidated EPS(1) $0.92 Regulated Corp/Other Competitive $0.89 - $0.96 ($0.17 - $0.15) $0.06 - $0.16 Assumptions & Drivers: Preferred Share Repurchase Optim Energy excluded from ongoing results beginning Sept. 1 Weather Close of First Choice Power
Slide 12: Key Strategic Goals and Checklist
Key Strategic Goals and Checklist Earn Authorized Return on Our Maximize the Value of Our Regulated Businesses Competitive Businesses Achieve successful outcomes in: Maintain profitability of First Choice Power by PNM retail rate case achieving customer growth and increasing Achieved by mone
Slide 13: Questions & Answers
Questions & Answers
Slide 14: Appendix
Appendix
Slide 15: Guidance (ongoing): First Choice Power & Optim Energy
Guidance (ongoing): First Choice Power & Optim Energy First Choice Power Optim Energy Prior Guidance (Jan – Dec 2011) (Jan – Dec 2011) Earnings (Loss) per Share $0.28 – $0.35 $(0.22)-$(0.19) EBITDA $43M-$53M $20M-$30M (1) First Choice Power Optim Energy Current Guidance (Jan – Oct 2011) (Jan – Aug 2
Slide 16: PNM Resources
PNM(O Resources’
PNM Resources — Investor Conference Call (September 2011) on 6ix