PNM Resources Reports Second Quarter 2023 Results
2023 Ongoing Earnings Guidance Affirmed
- 2023 second quarter GAAP earnings of
per diluted share$0.53 - 2023 second quarter ongoing earnings of
per diluted share$0.55 - Affirmed ongoing earnings guidance range of
-$2.65 for 2023$2.75
PNM Resources (In millions, except EPS) | ||||
Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 | |
GAAP net earnings attributable to PNM Resources | ||||
GAAP diluted EPS | ||||
Ongoing net earnings | ||||
Ongoing diluted EPS |
PNM Resources (NYSE: PNM) today released its 2023 second quarter results. In addition, management affirmed its 2023 consolidated ongoing earnings guidance of
"This first half of the year has laid the groundwork for future growth, particularly in
UPDATE ON MERGER
On June 20, 2023, PNM Resources and Avangrid announced an amendment and extension of their merger agreement through December 31, 2023, with an option for three months further extension upon mutual agreement by the companies. The companies' appeal of the New Mexico Public Regulation Commission's (NMPRC) December 2021 merger stipulation denial remains pending with the New Mexico Supreme Court (Court) with oral arguments scheduled for September 15, 2023. There is no statutory deadline for the Court to respond to the appeal.
SEGMENT REPORTING OF 2023 SECOND 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 | ||||
Q2 2023 | Q2 2022 | Q2 2023 | Q2 2022 | ||
PNM | ( | ||||
TNMP | |||||
Corporate and Other | ( | ( | ( | ( | |
Consolidated PNM Resources |
Net changes to GAAP and ongoing earnings in the second quarter of 2023 compared to the second quarter of 2022 include:
- PNM: Increased transmission margins due to higher system demand, lower costs associated with generation portfolio changes and reduced gas plant outages, and improved market performance of decommissioning and reclamation trusts were partially offset by lower customer usage due in part to milder temperatures, depreciation, property tax and interest expense associated with new capital investments and higher planned O&M expenses.
- TNMP: Rate recovery through Transmission Cost of Service (TCOS) and Distribution Cost Recovery Factor (DCRF) increases and weather-normalized load growth was more than offset by depreciation, property tax and interest expense associated with new capital investments, milder temperatures and higher planned O&M expenses.
- Corporate and Other: Higher interest rates on variable rate debt, net of hedges, increased losses.
In addition, GAAP earnings increased in the second quarter of 2023 from net unrealized gains on investment securities for decommissioning and reclamation trusts compared to net unrealized losses in the second quarter of 2022.
Additional materials with information on quarterly results are available at
http://www.pnmresources.com/investors/results.cfm.
SECOND QUARTER CONFERENCE CALL: 11 A.M. EASTERN FRIDAY, AUGUST 4
PNM Resources will discuss these items during a live conference call and webcast on Friday, August 4th at 11 a.m. Eastern. Speaking on the call will be Pat Vincent-Collawn, PNM Resources Chairman and Chief Executive Officer, Don Tarry, PNM Resources President and Chief Operating Officer, and Lisa Eden, PNM Resources Senior Vice President, Chief Financial Officer and Treasurer.
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: https://dpregister.com/sreg/10180845/f9e7ceca57. 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 second 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
CONTACTS: | |||
Analysts | Media | ||
Lisa Goodman | Ray | ||
(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
Non-GAAP Financial Measures
GAAP refers to generally accepted accounting principles in the
PNM Resources, Inc. and Subsidiaries Schedule 1 Reconciliation of GAAP to Ongoing Earnings (Unaudited) | ||||||||
PNM | TNMP | Corporate | PNMR | |||||
(in thousands) | ||||||||
Three Months Ended June 30, 2023 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ 31,184 | $ 24,632 | $ (10,512) | $ 45,304 | ||||
Adjusting items before income tax effects: | ||||||||
Net change in unrealized (gains) and losses on investment securities2a | (2,504) | — | — | (2,504) | ||||
Regulatory disallowances and restructuring costs2b | 3,731 | — | — | 3,731 | ||||
Pension expense related to previously disposed of gas distribution business2c | 679 | — | — | 679 | ||||
Merger related costs2d | 15 | 2 | 233 | 250 | ||||
Total adjustments before income tax effects | 1,921 | 2 | 233 | 2,156 | ||||
Income tax impact of above adjustments1 | (488) | — | (59) | (547) | ||||
Income tax impact of non-deductible merger related costs3 | 4 | — | 31 | 35 | ||||
Timing of statutory and effective tax rates on non-recurring items4 | 275 | 221 | (2) | 494 | ||||
Total income tax impacts5 | (209) | 221 | (30) | (18) | ||||
Adjusting items, net of income taxes | 1,712 | 223 | 203 | 2,138 | ||||
Ongoing Earnings (Loss) | $ 32,896 | $ 24,855 | $ (10,309) | $ 47,442 | ||||
Six Months Ended June 30, 2023 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ 85,760 | $ 34,665 | $ (20,107) | $ 100,318 | ||||
Adjusting items before income tax effects: | ||||||||
Net change in unrealized (gains) and losses on investment securities2a | (11,989) | — | — | (11,989) | ||||
Regulatory disallowances and restructuring costs2b | 3,731 | — | — | 3,731 | ||||
Pension expense related to previously disposed of gas distribution business2c | 1,358 | — | — | 1,358 | ||||
Merger related costs2d | 27 | 2 | 519 | 548 | ||||
Total adjustments before income tax effects | (6,873) | 2 | 519 | (6,352) | ||||
Income tax impact of above adjustments1 | 1,746 | — | (132) | 1,614 | ||||
Income tax impact of non-deductible merger related costs3 | 5 | — | 85 | 90 | ||||
Timing of statutory and effective tax rates on non-recurring items4 | (452) | 157 | (285) | (580) | ||||
Total income tax impacts5 | 1,299 | 157 | (332) | 1,124 | ||||
Adjusting items, net of income taxes | (5,574) | 159 | 187 | (5,228) | ||||
Ongoing Earnings (Loss) | $ 80,186 | $ 34,824 | $ (19,920) | $ 95,090 |
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 Changes in "Gains (losses) on investment securities" reflecting non-cash performance relative to market, not indicative of funding requirements | ||||||||
b Increase in "Regulatory disallowances and restructuring costs" | ||||||||
c Increases in "Other (deductions)" | ||||||||
d 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 impacts reflected in "Income Taxes" |
PNM Resources, Inc. and Subsidiaries Schedule 2 Reconciliation of GAAP to Ongoing Earnings (Unaudited) | ||||||||
PNM | TNMP | Corporate | PNMR | |||||
(in thousands) | ||||||||
Three Months Ended June 30, 2022 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ (6,217) | $ 26,051 | $ (4,473) | $ 15,361 | ||||
Adjusting items before income tax effects: | ||||||||
Net change in unrealized (gains) and losses on investment securities2a | 38,979 | — | — | 38,979 | ||||
Regulatory disallowances and restructuring costs2b | 1,399 | — | — | 1,399 | ||||
Pension expense related to previously disposed of gas distribution business2c | 614 | — | — | 614 | ||||
Merger related costs2d | 23 | 4 | 288 | 315 | ||||
Total adjustments before income tax effects | 41,015 | 4 | 288 | 41,307 | ||||
Income tax impact of above adjustments1 | (10,418) | (1) | (73) | (10,492) | ||||
Income tax impact of non-deductible merger related costs3 | (80) | 61 | (4) | (23) | ||||
Timing of statutory and effective tax rates on non-recurring items4 | 3,326 | 379 | (440) | 3,265 | ||||
Total income tax impacts5 | (7,172) | 439 | (517) | (7,250) | ||||
Adjusting items, net of income taxes | 33,843 | 443 | (229) | 34,057 | ||||
Ongoing Earnings (Loss) | $ 27,626 | $ 26,494 | $ (4,702) | $ 49,418 | ||||
Six Months Ended June 30, 2022 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ (1,906) | $ 41,111 | $ (7,853) | $ 31,352 | ||||
Adjusting items before income tax effects: | ||||||||
Net change in unrealized (gains) and losses on investment securities2a | 69,891 | — | — | 69,891 | ||||
Regulatory disallowances and restructuring costs2b | 1,399 | — | — | 1,399 | ||||
Pension expense related to previously disposed of gas distribution business2c | 1,228 | — | — | 1,228 | ||||
Merger related costs2d | 50 | 4 | 1,232 | 1,286 | ||||
Total adjustments before income tax effects | 72,568 | 4 | 1,232 | 73,804 | ||||
Income tax impact of above adjustments1 | (18,432) | (1) | (313) | (18,746) | ||||
Income tax impact of non-deductible merger related costs3 | (11) | 282 | 34 | 305 | ||||
Timing of statutory and effective tax rates on non-recurring items4 | 5,974 | 194 | (160) | 6,008 | ||||
Total income tax impacts5 | (12,469) | 475 | (439) | (12,433) | ||||
Adjusting items, net of income taxes | 60,099 | 479 | 793 | 61,371 | ||||
Ongoing Earnings (Loss) | $ 58,193 | $ 41,590 | $ (7,060) | $ 92,723 |
1Tax effects calculated using a tax rate of | ||||||||
2 The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Condensed Consolidated Statement of Earnings as follows: | ||||||||
a Changes in "Gains (losses) on investment securities" reflecting non-cash performance relative to market, not indicative of funding requirements | ||||||||
b Increases in "Regulatory disallowances and restructuring costs" | ||||||||
c Increases in "Other (deductions)" | ||||||||
d Increases in "Administrative and general" | ||||||||
3 Increases (decreases) in "Income Tax Expense" | ||||||||
4 Income tax timing impacts resulting from differences between the statutory tax rates of | ||||||||
5 Income tax impacts reflected in "Income Taxes" |
PNM Resources, Inc. and Subsidiaries Schedule 3 Reconciliation of GAAP to Ongoing Earnings Per Diluted Share (Unaudited) | ||||||||
PNM | TNMP | Corporate | PNMR | |||||
(per diluted share) | ||||||||
Three Months Ended June 30, 2023 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ 0.36 | $ 0.29 | $ (0.12) | $ 0.53 | ||||
Adjusting items, net of income tax effects: | ||||||||
Net change in unrealized (gains) and losses on investment securities | (0.02) | — | — | (0.02) | ||||
Regulatory disallowances and restructuring costs | 0.03 | — | — | 0.03 | ||||
Pension expense related to previously disposed of gas distribution business | 0.01 | — | — | 0.01 | ||||
Total Adjustments | 0.02 | — | — | 0.02 | ||||
Ongoing Earnings (Loss) | $ 0.38 | $ 0.29 | $ (0.12) | $ 0.55 | ||||
Average Diluted Shares Outstanding: 86,129,124 | ||||||||
Six Months Ended June 30, 2023 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ 1.00 | $ 0.40 | $ (0.24) | $ 1.16 | ||||
Adjusting items, net of income tax effects: | ||||||||
Net change in unrealized (gains) and losses on investment securities | (0.10) | — | — | (0.10) | ||||
Regulatory disallowances and restructuring costs | 0.03 | — | — | 0.03 | ||||
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 | (0.01) | — | — | (0.01) | ||||
Total Adjustments | (0.07) | — | 0.01 | (0.06) | ||||
Ongoing Earnings (Loss) | $ 0.93 | $ 0.40 | $ (0.23) | $ 1.10 | ||||
Average Diluted Shares Outstanding: 86,133,091 |
PNM Resources, Inc. and Subsidiaries Schedule 4 Reconciliation of GAAP to Ongoing Earnings Per Diluted Share (Unaudited) | ||||||||
PNM | TNMP | Corporate | PNMR | |||||
(per diluted share) | ||||||||
Three Months Ended June 30, 2022 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ (0.07) | $ 0.30 | $ (0.05) | $ 0.18 | ||||
Adjusting items, net of income tax effects: | ||||||||
Net change in unrealized (gains) and losses on investment securities | 0.34 | — | — | 0.34 | ||||
Regulatory disallowances and restructuring costs | 0.01 | — | — | 0.01 | ||||
Timing of statutory and effective tax rates on non-recurring items | 0.04 | 0.01 | (0.01) | 0.04 | ||||
Total Adjustments | 0.39 | 0.01 | (0.01) | 0.39 | ||||
Ongoing Earnings (Loss) | $ 0.32 | $ 0.31 | $ (0.06) | $ 0.57 | ||||
Average Diluted Shares Outstanding: 86,226,318 | ||||||||
Six Months Ended June 30, 2022 | ||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ (0.02) | $ 0.47 | $ (0.09) | $ 0.36 | ||||
Adjusting items, net of income tax effects: | ||||||||
Net change in unrealized (gains) and losses on investment securities | 0.61 | — | — | 0.61 | ||||
Regulatory disallowances and restructuring costs | 0.01 | — | — | 0.01 | ||||
Pension expense related to previously disposed of gas distribution business | 0.01 | — | — | 0.01 | ||||
Merger related costs | — | 0.01 | 0.01 | 0.02 | ||||
Timing of statutory and effective tax rates on non-recurring items | 0.07 | — | — | 0.07 | ||||
Total Adjustments | 0.70 | 0.01 | 0.01 | 0.72 | ||||
Ongoing Earnings (Loss) | $ 0.68 | $ 0.48 | $ (0.08) | $ 1.08 | ||||
Average Diluted Shares Outstanding: 86,198,407 |
PNM Resources, Inc. and Subsidiaries Schedule 5 Condensed Consolidated Statements of Earnings (Unaudited) | |||||||
Three Months Ended | Six Months Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
(In thousands, except per share amounts) | |||||||
Electric Operating Revenues | $ 477,156 | $ 499,730 | $ 1,021,233 | $ 943,848 | |||
Operating Expenses: | |||||||
Cost of energy | 172,452 | 195,596 | 414,138 | 364,010 | |||
Administrative and general | 54,039 | 51,342 | 109,149 | 107,203 | |||
Energy production costs | 25,599 | 42,499 | 47,957 | 76,065 | |||
Regulatory disallowances and restructuring costs | 3,731 | 1,399 | 3,731 | 1,399 | |||
Depreciation and amortization | 79,139 | 76,769 | 157,213 | 152,533 | |||
Transmission and distribution costs | 25,465 | 21,156 | 47,661 | 39,622 | |||
Taxes other than income taxes | 24,401 | 24,577 | 49,963 | 48,556 | |||
Total operating expenses | 384,826 | 413,338 | 829,812 | 789,388 | |||
Operating income | 92,330 | 86,392 | 191,421 | 154,460 | |||
Other Income and Deductions: | |||||||
Interest income | 5,359 | 3,327 | 10,202 | 7,619 | |||
Gains (losses) on investment securities | 3,777 | (41,795) | 10,219 | (68,368) | |||
Other income | 5,600 | 5,151 | 8,693 | 9,481 | |||
Other (deductions) | (3,515) | (3,641) | (6,008) | (5,882) | |||
Net other income and deductions | 11,221 | (36,958) | 23,106 | (57,150) | |||
Interest Charges | 45,899 | 29,217 | 86,822 | 55,437 | |||
Earnings before Income Taxes | 57,652 | 20,217 | 127,705 | 41,873 | |||
Income Taxes | 8,229 | 1,094 | 18,009 | 3,532 | |||
Net Earnings | 49,423 | 19,123 | 109,696 | 38,341 | |||
(Earnings) Attributable to Valencia Non-controlling Interest | (3,987) | (3,630) | (9,114) | (6,725) | |||
Preferred Stock Dividend Requirements of Subsidiary | (132) | (132) | (264) | (264) | |||
Net Earnings Attributable to PNMR | $ 45,304 | $ 15,361 | $ 100,318 | $ 31,352 | |||
Net Earnings Attributable to PNMR per Common Share: | |||||||
Basic | $ 0.53 | $ 0.18 | $ 1.17 | $ 0.36 | |||
Diluted | $ 0.53 | $ 0.18 | $ 1.16 | $ 0.36 | |||
Dividends Declared per Common Share | $ 0.3675 | $ 0.3475 | $ 0.7350 | $ 0.6950 |
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SOURCE PNM Resources, Inc.