Slide 1: Q2 2012 Earnings Presentation
Q2 2012 Earnings Presentation August 3, 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: Q2 2012 Financial Results
Q2 2012 Financial Results Q2 2012 Q2 2011 YTD 2012 YTD 2011 Ongoing EPS $0.33 $0.20 $0.50 $0.24 GAAP EPS $0.27 $0.04 $0.48 $0.22 Increased retail rates implemented in 2011, warmer June weather, and cost control improves PNM Strong TNMP load growth tempered by cooler weather in Texas Progress c
Slide 5: Load Growth and Economic Conditions
Load Growth and Economic Conditions (3) Regulated Retail Energy Sales Growth Unemployment Rate (weather-normalized) Q2 2012 vs. Q2 2011 Q2 YTD 2012 vs. Q2 YTD 2011 8.2% PNM(1) TNMP(2) PNM(1) TNMP(2) 6.7% 7.0% Residential 0.4% 8.5% 0.0% 7.1% Commercial -0.2% 4.2% 0.7% 1.4% NM TX U.S. Industrial 1.3%
Slide 6: Regulatory Update
Regulatory Update Item Action Timing Docket No. FERC transmission case Settlement filed July 3; Awaiting FERC final ER11-1915-002, et. FERC Staff supports approval al settlement FERC generation case Confidential settlement TBD ER11-4535-000 and (Navopache Electric Cooperative, Inc.) in principle rea
Slide 7: San Juan BART Update
San Juan BART Update EPA granted 90-day “stay” • No extension of compliance date N.M. Environment Department process designed to identify potential alternatives to FIP and SIP through: • Series of public comment meetings (July 24 through approximately mid-September) • Working group sessions to b
Slide 8: Financial Overview
Financial Overview Chuck Eldred Executive Vice President and CFO
Slide 9: Q2 2012 Financial Summary
Q2 2012 Financial Summary Ongoing EPS $0.02 ($0.04) $0.02 $0.13 $0.33 Corp/Other (1) TNMP First Choice Power/Optim Energy (2) $0.20 PNM Q2 2011 Q2 2012 (1) $0.01 is added due to rounding (2) After August 31, 2011 Optim Energy’s financial results were not included in PNM Resources’ ongoing earnings r
Slide 10: PNM and TNMP: Q2 2012 vs Q2 2011 EPS (Ongoing)
PNM and TNMP: Q2 2012 vs Q2 2011 EPS (Ongoing) PNM Q2 2012 Key Performance Drivers ∆ EPS Rate relief $0.12 $0.27 Weather $0.03 PNM Resources share repurchase $0.03 O&M reductions $0.01 $0.14 Lower outage costs $0.01 Palo Verde 3 market price ($0.01) Interest expense ($0.01) Palo Verde Nuclear Decomm
Slide 11: Consolidated EPS
Affirming 2012 EPS Guidance (Ongoing) $1.20 Consolidated EPS $1.32 Utilities Corp/Other $1.36 - $1.47 ($0.16) – ($0.15) PNM TNMP $1.08 - $1.15 $0.28 - $0.32 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 91.6% 2012 and 2013 Outage Schedule 82.4% 85.7% 85.6% Duration Time Unit 73.9% 73.1% 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 potential capital spending in Total Capital Plan: $1.3B 2013 – 2016 at PNM for SCRs, renewables and additional peaking capacity (In millions) $286 $286 $24 $12 $255 $251 $11 $12 $219 $92 $98 $12 $83 $89 $60 $63 $64 $58 $63 $52 $107
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(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 20: 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 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 Jun 30, 2012 Long-Term Debt (incl. current portion) PNM $1,215.5 $1,215.6 TNMP 311.0 311.3 PNMR 147.5 147.5 Consolidated $1,674.0 $1,674.3 Total Debt (incl. short-term) (1) PNM $1,281.5 $1,302.0 TNMP 311.0 311.3 PNMR 164.2 268.1 Consolida
Slide 23: Liquidity as of July 27, 2012
Liquidity as of July 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 7/27/12: Short-term debt and LOC balances $126.
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 estimated to cost ~$77M (total plant cost) EPA issued its proposed action on the SIP, including approval of all components of the SIP, except for the SJGS BART determina
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 Clean Air Act – Regional Haze (FIP) – SCR ~$340M - $460M See “San Juan – BART Timeline” slide State of NM submitted with EPA in Clean Air Act – Regional Haze (SIP) – SNCR ~$36M ear