PNM Resources Reports First Quarter 2022 Results
PNM Resources reported its Q1 2022 results, showing a GAAP diluted EPS of $0.19, down from $0.20 in Q1 2021, while ongoing diluted EPS increased to $0.50 from $0.32. The company affirmed its ongoing earnings guidance for 2022 at $2.50 - $2.60 per diluted share and $2.60 - $2.75 for 2023. Key factors influencing earnings included higher transmission margins and colder temperatures, though these were offset by increased depreciation and property tax expenses. The ongoing merger with AVANGRID has been extended, with legal proceedings continuing.
- Ongoing diluted EPS rose to $0.50 from $0.32 year-over-year.
- Affirmed ongoing earnings guidance for 2022 ($2.50 - $2.60) and 2023 ($2.60 - $2.75).
- Higher transmission margins and retail sales driven by colder temperatures.
- GAAP diluted EPS decreased to $0.19 from $0.20 year-over-year.
- Higher depreciation and property tax expenses due to new capital investments.
2022 and 2023 Ongoing Earnings Guidance Affirmed
- 2022 First Quarter GAAP earnings of
$0.19 per diluted share - 2022 First Quarter ongoing earnings of
$0.50 per diluted share - Affirmed ongoing earnings guidance ranges of
$2.50 -$2.60 for 2022 and$2.60 -$2.75 for 2023
ALBUQUERQUE, N.M., April 28, 2022 /PRNewswire/ --
PNM Resources (In millions, except EPS) | ||
Q1 2022 | Q1 2021 | |
GAAP net earnings attributable | ||
GAAP diluted EPS | ||
Ongoing net earnings | ||
Ongoing diluted EPS | ||
PNM Resources (NYSE: PNM) today released its 2022 first quarter results. In addition, management affirmed its 2022 consolidated ongoing earnings guidance of
"First quarter results reflect a strong start to the year as we execute our business plan to invest in critical infrastructure and deliver clean energy," said Pat Vincent-Collawn, PNM Resources chairman, president and CEO. "Our customers and communities remain at the heart of our plans and we will continue to move forward on our clean energy transition and investment plans to provide safe, reliable, sustainable energy for generations to come."
UPDATE ON MERGER
On January 3, 2022, PNM Resources and AVANGRID announced an amendment and extension of their merger agreement through April 20, 2023, and an appeal of the NMPRC decision with the New Mexico Supreme Court. On February 2, 2022, the companies filed their Statement of Issues in the appeal.
On April 7, 2022, the companies filed a Brief-in-Chief, providing the legal arguments on these issues. The briefing schedule also includes an answer brief from the New Mexico Public Regulation Commission, followed by the companies' response brief. There is no statutory deadline for the Court to act.
SEGMENT REPORTING OF 2022 FIRST QUARTER EARNINGS
- PNM – a vertically integrated electric utility in New Mexico with distribution, transmission and generation assets.
- TNMP – an electric transmission and distribution utility in Texas.
- Corporate and Other – reflects the PNM Resources holding company and other subsidiaries.
EPS Results by Segment | |||||
GAAP Diluted EPS | Ongoing Diluted EPS | ||||
Q1 2022 | Q1 2021 | Q1 2022 | Q1 2021 | ||
PNM | |||||
TNMP | |||||
Corporate and Other | ( | ( | ( | ( | |
Consolidated PNM Resources | |||||
Net changes to GAAP and ongoing earnings in the first quarter of 2022 compared to the first quarter of 2021 include:
- PNM: Higher transmission margins due to higher system demand and new customers, including the Western Spirit transmission contract, and increased retail sales volumes driven by colder temperatures increased earnings. These increases were partially offset by lower market performance of decommissioning and reclamation trusts, higher depreciation and property tax expense associated with new capital investments.
- TNMP: Rate recovery through Transmission Cost of Service (TCOS) and Distribution Cost of Service (DCOS) increases, load growth and colder temperatures throughout the quarter were partially offset by higher depreciation and property tax expense associated with new capital investments.
- Corporate and Other: Interest savings from the refinancing of debt in May 2021 reduced losses.
In addition, GAAP earnings decreased in the first quarter of 2022 when compared to the first quarter of 2021 resulting from a net increase in unrealized losses on investment securities for decommissioning and reclamation trusts, partially offset by lower merger related expenditures.
Additional materials with information on quarterly results are available at
http://www.pnmresources.com/investors/results.cfm.
FIRST QUARTER CONFERENCE CALL: 11 A.M. EASTERN THURSDAY, APRIL 28
PNM Resources will discuss these items during a live conference call and webcast on Thursday, April 28th at 11 a.m. Eastern. Speaking on the call will be Pat Vincent-Collawn, PNM Resources chairman, president and CEO, and Don Tarry, PNM Resources senior vice president and CFO.
The conference call will be simultaneously broadcast and archived on our website at http://www.pnmresources.com/investors/events-and-presentations. Listeners are encouraged to visit the website at least 30 minutes before the event to register, download and install any necessary audio software.
Investors and analysts can participate in the live conference call by pre-registering using the following link to receive a special dial-in number and PIN: http://dpregister.com/10165440. Telephone participants who are unable to pre-register may participate in the live conference call by dialing (877) 276-8648 or (412) 317-5474 fifteen minutes prior to the event and referencing "the PNM Resources first quarter earnings call".
Supporting material for PNM Resources' earnings announcements can be viewed and downloaded at http://www.pnmresources.com/investors/results.cfm.
Background:
PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2021 consolidated operating revenues of
CONTACTS: | |
Analysts | Media |
Lisa Goodman | Ray Sandoval |
(505) 241-2160 | (505) 241-2782 |
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this news release 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, targets, and strategies, including the unaudited financial results and earnings guidance, are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates and apply only as of the date of this report. PNMR, PNM, and TNMP assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, PNMR, PNM, and TNMP caution readers not to place undue reliance on these statements. PNMR's, PNM's, and TNMP's business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond their control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. Additionally, there are risks and uncertainties in connection with the proposed acquisition of us by AVANGRID which may adversely affect our business, future opportunities, employees and common stock, including without limitation, (i) the expected timing and likelihood of completion of the pending Merger, including the timing, receipt and terms and conditions of any remaining required governmental and regulatory approvals of the pending Merger that could reduce anticipated benefits or cause the parties to abandon the transaction, (ii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (iii) the risk that the parties may not be able to satisfy the conditions to the proposed Merger in a timely manner or at all, and (iv) the risk that the proposed transaction could have an adverse effect on the ability of PNMR to retain and hire key personnel and maintain relationships with its customers and suppliers, and on its operating results and businesses generally. For a discussion of risk factors and other important factors affecting forward-looking statements, please see the Company's Form 10-K, Form 10-Q filings and the information included in the Company's Forms 8-K with the Securities and Exchange Commission, which factors are specifically incorporated by reference herein.
Non-GAAP Financial Measures
GAAP refers to generally accepted accounting principles in the U.S. Ongoing earnings is a non-GAAP financial measure that excludes the impact of net unrealized mark-to-market gains and losses on economic hedges, the net change in unrealized gains and losses on investment securities, pension expense related to previously disposed of gas distribution business, and certain non-recurring, infrequent, and other items that are not indicative of fundamental changes in the earnings capacity of the Company's operations. The Company uses ongoing earnings and ongoing earnings per diluted share to evaluate the operations of the Company and to establish goals, including those used for certain aspects of incentive compensation, for management and employees. While the Company believes these financial measures are appropriate and useful for investors, they are not measures presented in accordance with GAAP. The Company does not intend for these measures, or any piece of these measures, to represent any financial measure as defined by GAAP. Furthermore, the Company's calculations of these measures as presented may or may not be comparable to similarly titled measures used by other companies. The Company uses ongoing earnings guidance to provide investors with management's expectations of ongoing financial performance over the period presented. While the Company believes ongoing earnings guidance is an appropriate measure, it is not a measure presented in accordance with GAAP. The Company does not intend for ongoing earnings guidance to represent an expectation of net earnings as defined by GAAP. Since the future differences between GAAP and ongoing earnings are frequently outside the control of the Company, management is generally not able to estimate the impact of the reconciling items between forecasted GAAP net earnings and ongoing earnings guidance, nor their probable impact on GAAP net earnings without unreasonable effort, therefore, management is generally not able to provide a corresponding GAAP equivalent for ongoing earnings guidance. Reconciliations between GAAP and ongoing earnings are contained in schedules 1-2.
PNM Resources, Inc. and Subsidiaries | ||||||||
Schedule 1 | ||||||||
Reconciliation of GAAP to Ongoing Earnings | ||||||||
(Preliminary and Unaudited) | ||||||||
PNM | TNMP | Corporate | PNMR | |||||
(in thousands) | ||||||||
Three Months Ended March 31, 2022 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ 4,311 | $ 15,060 | $ (3,380) | $ 15,991 | ||||
Adjusting items before income tax effects: | ||||||||
Net change in unrealized gains and losses on investment securities2a | 30,912 | — | — | 30,912 | ||||
Pension expense related to previously disposed of gas distribution business2b | 614 | — | — | 614 | ||||
Merger related costs2c | 27 | — | 944 | 971 | ||||
Total adjustments before income tax effects | 31,553 | — | 944 | 32,497 | ||||
Income tax impact of above adjustments1 | (8,014) | — | (240) | (8,254) | ||||
Income tax impact of non-deductible merger related costs3 | 69 | 221 | 39 | 329 | ||||
Timing of statutory and effective tax rates on non-recurring items4 | 2,647 | (185) | 280 | 2,742 | ||||
Total income tax impacts6 | (5,298) | 36 | 79 | (5,183) | ||||
Adjusting items, net of income taxes | 26,255 | 36 | 1,023 | 27,314 | ||||
Ongoing Earnings (Loss) | $ 30,566 | $ 15,096 | $ (2,357) | $ 43,305 | ||||
Three Months Ended March 31, 2021 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ 18,536 | $ 8,735 | $ (9,692) | $ 17,579 | ||||
Adjusting items before income tax effects: | ||||||||
Net change in unrealized gains and losses on investment securities2a | 4,281 | — | — | 4,281 | ||||
Pension expense related to previously disposed of gas distribution business2b | 849 | — | — | 849 | ||||
Merger related costs2c | 203 | 216 | 6,670 | 7,089 | ||||
Total adjustments before income tax effects | 5,333 | 216 | 6,670 | 12,219 | ||||
Income tax impact of above adjustments1 | (1,354) | (46) | (1,694) | (3,094) | ||||
Income tax impact of non-deductible merger related costs3 | — | 22 | 540 | 562 | ||||
Timing of statutory and effective tax rates on non-recurring items5 | 434 | — | 94 | 528 | ||||
Total income tax impacts6 | (920) | (24) | (1,060) | (2,004) | ||||
Adjusting items, net of income taxes | 4,413 | 192 | 5,610 | 10,215 | ||||
Ongoing Earnings (Loss) | $ 22,949 | $ 8,927 | $ (4,082) | $ 27,794 | ||||
1 Tax effects calculated using a tax rate of | ||||||||
2 The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Condensed Consolidated Statements of Earnings as follows: | ||||||||
a Decreases in "Gains (losses) on investment securities" reflecting non-cash performance relative to market, not indicative of funding requirements | ||||||||
b Increases in "Other (deductions)" | ||||||||
c Increases in "Administrative and general" | ||||||||
3 Increases in "Income Taxes" | ||||||||
4 Income tax timing impacts resulting from differences between the statutory rates of | ||||||||
5 Income tax timing impacts resulting from differences between the statutory rate of | ||||||||
6 Income tax impacts reflected in "Income Taxes" | ||||||||
PNM Resources, Inc. and Subsidiaries | ||||||||
Schedule 2 | ||||||||
Reconciliation of GAAP to Ongoing Earnings Per Diluted Share | ||||||||
(Preliminary and Unaudited) | ||||||||
PNM | TNMP | Corporate | PNMR | |||||
(per diluted share) | ||||||||
Three Months Ended March 31, 2022 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ 0.05 | $ 0.18 | $ (0.04) | $ 0.19 | ||||
Adjusting items, net of income tax effects: | ||||||||
Net change in unrealized gains and losses on investment securities | 0.26 | — | — | 0.26 | ||||
Pension expense related to previously disposed of gas distribution business | 0.01 | — | — | 0.01 | ||||
Merger related costs | — | — | 0.01 | 0.01 | ||||
Timing of statutory and effective tax rates on non-recurring items | 0.03 | — | — | 0.03 | ||||
Total Adjustments | 0.30 | — | 0.01 | 0.31 | ||||
Ongoing Earnings (Loss) | $ 0.35 | $ 0.18 | $ (0.03) | $ 0.50 | ||||
Average Diluted Shares Outstanding: 86,170,495 | ||||||||
Three Months Ended March 31, 2021 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ 0.22 | $ 0.10 | $ (0.12) | $ 0.20 | ||||
Adjusting items, net of income tax effects: | ||||||||
Net change in unrealized gains and losses on investment securities | 0.04 | — | — | 0.04 | ||||
Pension expense related to previously disposed of gas distribution business | 0.01 | — | — | 0.01 | ||||
Merger related costs | — | — | 0.07 | 0.07 | ||||
Total Adjustments | 0.05 | — | 0.07 | 0.12 | ||||
Ongoing Earnings (Loss) | $ 0.27 | $ 0.10 | $ (0.05) | $ 0.32 | ||||
Average Diluted Shares Outstanding: 86,054,703 | ||||||||
PNM Resources, Inc. and Subsidiaries | |||
Schedule 3 | |||
Condensed Consolidated Statements of Earnings | |||
(Preliminary and Unaudited) | |||
Three Months Ended | |||
2022 | 2021 | ||
(In thousands, except | |||
Electric Operating Revenues: | |||
Contracts with customers | $ 384,493 | $ 346,585 | |
Alternative revenue programs | (5,505) | (909) | |
Other electric operating revenue | 65,130 | 19,031 | |
Total electric operating revenues | 444,118 | 364,707 | |
Operating Expenses: | |||
Cost of energy | 168,414 | 115,396 | |
Administrative and general | 55,861 | 59,465 | |
Energy production costs | 33,566 | 36,896 | |
Depreciation and amortization | 75,764 | 69,874 | |
Transmission and distribution costs | 18,466 | 17,317 | |
Taxes other than income taxes | 23,979 | 22,593 | |
Total operating expenses | 376,050 | 321,541 | |
Operating income | 68,068 | 43,166 | |
Other Income and Deductions: | |||
Interest income | 4,292 | 3,559 | |
Gains (losses) on investment securities | (26,573) | 968 | |
Other income | 4,330 | 4,252 | |
Other (deductions) | (2,241) | (3,290) | |
Net other income and deductions | (20,192) | 5,489 | |
Interest Charges | 26,220 | 25,884 | |
Earnings before Income Taxes | 21,656 | 22,771 | |
Income Taxes | 2,438 | 1,566 | |
Net Earnings | 19,218 | 21,205 | |
(Earnings) Attributable to Valencia Non-controlling Interest | (3,095) | (3,494) | |
Preferred Stock Dividend Requirements of Subsidiary | (132) | (132) | |
Net Earnings Attributable to PNMR | $ 15,991 | $ 17,579 | |
Net Earnings Attributable to PNMR per Common Share: | |||
Basic | $ 0.19 | $ 0.20 | |
Diluted | $ 0.19 | $ 0.20 | |
Dividends Declared per Common Share | $ 0.3475 | $ 0.3275 | |
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SOURCE PNM Resources, Inc.
FAQ
What were PNM's Q1 2022 earnings per share (EPS)?
What is PNM's ongoing earnings guidance for 2022 and 2023?
What factors contributed to PNM's earnings in Q1 2022?
How did the merger with AVANGRID progress according to the latest PNM PR?
