PNM Resources Reports 2023 Results and Introduces 2024 Earnings Guidance
Conference call at
-
2023 GAAP earnings
of
$1.02 per diluted share -
2023 ongoing earnings of
$2.82 per diluted share -
2024 ongoing earnings guidance range of
$2.65 -$2.75 per diluted share
ALBUQUERQUE, N.M.,
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2023 |
2022 |
GAAP net earnings attributable to |
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GAAP diluted EPS |
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Ongoing net earnings |
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Ongoing diluted EPS |
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In addition, management announced its 2024 consolidated ongoing earnings guidance of
"Our financial results continue to demonstrate our ability to navigate our environment and deliver an attractive return on investments by increasing the geographic and regulatory diversification of our rate base," said
SEGMENT REPORTING OF 2023 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 |
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GAAP Diluted EPS |
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Ongoing Diluted EPS |
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2023 |
2022 |
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2023 |
2022 |
PNM |
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TNMP |
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Corporate and Other |
( |
( |
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( |
( |
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Consolidated |
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Net changes to GAAP and ongoing earnings in 2023 compared to 2022 include:
- PNM: Lower costs associated with generation portfolio changes, increased customer usage due to hotter temperatures, increased transmission margins due to higher system demand, fewer gas plant outages, and improved market performance of decommissioning and reclamation trusts were partially offset by planned O&M expenses and depreciation and interest expense associated with new capital investments.
- TNMP: Increased rate recovery through the Transmission Cost of Service (TCOS) and Distribution Cost Recovery Factor (DCRF) mechanisms and higher demand-based load growth was partially offset by depreciation, property tax and interest expense associated with new capital investments 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 decreased in 2023 primarily due to
Additional materials with information on quarterly results are available at
http://www.pnmresources.com/investors/results.cfm.
CONFERENCE CALL:
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/10185268/fb4a373624. 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
Supporting material for
Background:
CONTACTS: |
|
Analysts |
Media |
|
Raymond Sandoval |
(505) 241-2160 |
(505) 241-2782 |
Preliminary Unaudited Financial Results
The preliminary unaudited financial results for the fiscal year ended
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this news release for
Non-GAAP Financial Measures
GAAP refers to generally accepted accounting principles in the
Schedule 1 Reconciliation of GAAP to Ongoing Earnings (Preliminary and Unaudited) |
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|
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PNM |
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TNMP |
|
Corporate |
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Consolidated |
|
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(in thousands) |
||||||
Quarter Ended |
|
|
|
|
|
|
|
|
GAAP Net Earnings (Loss) Attributable to PNMR: |
|
$ (58,179) |
|
$ 20,768 |
|
$ (12,815) |
|
$ (50,226) |
Adjusting items before income tax effects |
|
|
|
|
|
|
|
|
Net change in unrealized (gains) and losses on investment securities2a |
|
(26,840) |
|
— |
|
— |
|
(26,840) |
Regulatory disallowances and restructuring costs2b |
|
117,238 |
|
1,173 |
|
— |
|
118,411 |
Pension expense related to previously disposed of gas distribution business2c |
|
678 |
|
— |
|
— |
|
678 |
Merger related costs2d |
|
671 |
|
301 |
|
302 |
|
1,274 |
Total adjustments before income tax effects |
|
91,747 |
|
1,474 |
|
302 |
|
93,523 |
Income tax impact of above adjustments1 |
|
(23,304) |
|
(310) |
|
(76) |
|
(23,690) |
SJGS retirement income tax adjustments3 |
|
(1,199) |
|
— |
|
— |
|
(1,199) |
Income tax impact of non-deductible merger related costs3 |
|
(46) |
|
3 |
|
(2,428) |
|
(2,471) |
Timing of statutory and effective tax rates on non-recurring items4 |
|
(240) |
|
(51) |
|
(144) |
|
(435) |
Total income tax impacts5 |
|
(24,789) |
|
(358) |
|
(2,648) |
|
(27,795) |
Adjusting items, net of income taxes |
|
66,958 |
|
1,116 |
|
(2,346) |
|
65,728 |
Ongoing Earnings (Loss) |
|
$ 8,779 |
|
$ 21,884 |
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$ (15,161) |
|
$ 15,502 |
|
|
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|
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Year Ended |
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|
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GAAP Net Earnings (Loss) Attributable to PNMR: |
|
$ 35,657 |
|
$ 94,937 |
|
$ (42,776) |
|
$ 87,818 |
Adjusting items before income tax effects |
|
|
|
|
|
|
|
|
Net change in unrealized (gains) and losses on investment securities2a |
|
(33,278) |
|
— |
|
— |
|
(33,278) |
Regulatory disallowances and restructuring costs2b |
|
240,840 |
|
1,173 |
|
— |
|
242,013 |
Pension expense related to previously disposed of gas distribution business2c |
|
2,716 |
|
— |
|
— |
|
2,716 |
Merger related costs2d |
|
730 |
|
303 |
|
953 |
|
1,986 |
Total adjustments before income tax effects |
|
211,008 |
|
1,476 |
|
953 |
|
213,437 |
Income tax impact of above adjustments1 |
|
(53,596) |
|
(310) |
|
(242) |
|
(54,148) |
SJGS retirement income tax adjustments3 |
|
(1,199) |
|
— |
|
— |
|
(1,199) |
Income tax impact of non-deductible merger related costs3 |
|
(40) |
|
3 |
|
(2,334) |
|
(2,371) |
Total income tax impacts5 |
|
(54,835) |
|
(307) |
|
(2,576) |
|
(57,718) |
Adjusting items, net of income taxes |
|
156,173 |
|
1,169 |
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(1,623) |
|
155,719 |
Ongoing Earnings (Loss) |
|
$ 191,830 |
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$ 96,106 |
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$ (44,399) |
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$ 243,537 |
1 Tax effects calculated using a tax rate of 21.0% for TNMP and 25.4% for other segments |
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2 The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Consolidated Statement of Earnings as follows: |
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a Changes in "Gains (losses) on investment securities" reflecting non-cash performance relative to market, not indicative of funding requirements |
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b Decreases in "Electric operating revenues" of |
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c Increases in "Other (deductions)" |
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d Increases in "Administrative and general" |
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3 Increases (decreases) in "Income Taxes" |
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4 Income tax timing impacts resulting from differences between the statutory rates of 25.4% for PNM, 21.0% for TNMP and the average expected statutory tax rate of 23.7% for PNMR, and the GAAP anticipated effective tax rates of 18.6% for PNM, 15.0% for TNMP, and 15.6% for PNMR, which reversed by year end |
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5 Income tax impacts reflected in "Income Taxes" |
Schedule 2 Reconciliation of GAAP to Ongoing Earnings (Preliminary and Unaudited) |
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PNM |
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TNMP |
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Corporate |
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Consolidated |
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(in thousands) |
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Quarter Ended |
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GAAP Net Earnings (Loss) Attributable to PNMR: |
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$ 7,808 |
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$ 19,725 |
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$ (11,788) |
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$ 15,745 |
Adjusting items before income tax effects |
|
|
|
|
|
|
|
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Net change in unrealized (gains) and losses on investment securities2a |
|
(17,279) |
|
— |
|
— |
|
(17,279) |
|
|
8,057 |
|
— |
|
— |
|
8,057 |
Pension expense related to previously disposed of gas distribution business2d |
|
614 |
|
— |
|
— |
|
614 |
Merger related costs2e |
|
14 |
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2 |
|
194 |
|
210 |
Total adjustments before income tax effects |
|
(8,594) |
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2 |
|
194 |
|
(8,398) |
Income tax impact of above adjustments1 |
|
2,183 |
|
(1) |
|
(49) |
|
2,133 |
SJGS retirement income tax adjustments3 |
|
3,525 |
|
— |
|
— |
|
3,525 |
Income tax impact of non-deductible merger related costs3 |
|
(239) |
|
(154) |
|
33 |
|
(360) |
Timing of statutory and effective tax rates on non-recurring items4 |
|
(41) |
|
(144) |
|
149 |
|
(36) |
Total income tax impacts5 |
|
5,428 |
|
(299) |
|
133 |
|
5,262 |
Adjusting items, net of income taxes |
|
(3,166) |
|
(297) |
|
327 |
|
(3,136) |
Ongoing Earnings (Loss) |
|
$ 4,642 |
|
$ 19,428 |
|
$ (11,461) |
|
$ 12,609 |
|
|
|
|
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Year Ended |
|
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|
|
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GAAP Net Earnings (Loss) Attributable to PNMR: |
|
$ 103,370 |
|
$ 92,267 |
|
$ (26,107) |
|
$ 169,530 |
Adjusting items before income tax effects |
|
|
|
|
|
|
|
|
Net change in unrealized (gains) and losses on investment securities2a |
|
63,805 |
|
— |
|
— |
|
63,805 |
|
|
8,057 |
|
— |
|
— |
|
8,057 |
Regulatory disallowances and restructuring costs2c |
|
2,025 |
|
— |
|
— |
|
2,025 |
Pension expense related to previously disposed of gas distribution business2d |
|
2,456 |
|
— |
|
— |
|
2,456 |
Merger related costs2e |
|
81 |
|
6 |
|
1,763 |
|
1,850 |
Total adjustments before income tax effects |
|
76,424 |
|
6 |
|
1,763 |
|
78,193 |
Income tax impacts of above adjustments1 |
|
(19,412) |
|
(2) |
|
(447) |
|
(19,861) |
SJGS retirement income tax adjustments3 |
|
3,525 |
|
— |
|
— |
|
3,525 |
Income tax impact of non-deductible merger related costs3 |
|
13 |
|
2 |
|
75 |
|
90 |
Total income tax impacts4 |
|
(15,874) |
|
— |
|
(372) |
|
(16,246) |
Adjusting items, net of income taxes |
|
60,550 |
|
6 |
|
1,391 |
|
61,947 |
Ongoing Earnings (Loss) |
|
$ 163,920 |
|
$ 92,273 |
|
$ (24,716) |
|
$ 231,477 |
|
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1 Tax effects calculated using a tax rate of 21.0% for TNMP and 25.4% for other segments |
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2 The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP 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 Decrease in "Electric operating revenues" |
||||||||
c Increase in "Regulatory disallowances and restructuring costs" |
||||||||
d Increases in "Other (deductions)" |
||||||||
e Increases in "Administrative and general" |
||||||||
3 Increases (decreases) in "Income Taxes" |
|
|
|
|
|
|
|
|
4 Income tax timing impacts resulting from differences between the statutory rates of 25.4% for PNM, 21.0% for TNMP and the average expected statutory tax rate of 23.0% for PNMR, and the GAAP anticipated effective tax rates of 11.0% for PNM, 13.4% for TNMP, and 10.1% for PNMR, which reversed by year end. |
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5 Income tax impacts reflected in "Income Taxes" |
Schedule 3 Reconciliation of GAAP to Ongoing Earnings Per Diluted Share (Preliminary and Unaudited) |
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|
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PNM |
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TNMP |
|
Corporate |
|
Consolidated |
|
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(per diluted share) |
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Quarter Ended |
|
|
|
|
|
|
|
|
GAAP Net Earnings (Loss) Attributable to PNMR: |
|
$ (0.67) |
|
$ 0.24 |
|
$ (0.15) |
|
$ (0.58) |
Adjusting items, net of income tax effects |
|
|
|
|
|
|
|
|
Net change in unrealized (gains) and losses on investment securities |
|
(0.23) |
|
— |
|
— |
|
(0.23) |
Regulatory disallowances and restructuring costs |
|
1.01 |
|
0.01 |
|
— |
|
1.02 |
Merger related costs |
|
— |
|
— |
|
(0.02) |
|
(0.02) |
SJGS retirement income tax adjustments |
|
(0.01) |
|
— |
|
— |
|
(0.01) |
Total Adjustments |
|
0.77 |
|
0.01 |
|
(0.02) |
|
0.76 |
Ongoing Earnings (Loss) |
|
$ 0.10 |
|
$ 0.25 |
|
$ (0.17) |
|
$ 0.18 |
Average Diluted Shares Outstanding: 86,932,542 |
|
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|||
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|
|
|
|
|
|
|
|
Year Ended |
|
|
|
|
|
|
|
|
GAAP Net Earnings (Loss) Attributable to PNMR: |
|
$ 0.41 |
|
$ 1.10 |
|
$ (0.49) |
|
$ 1.02 |
Adjusting items, net of income tax effects |
|
|
|
|
|
|
|
|
Net change in unrealized (gains) and losses on investment securities |
|
(0.29) |
|
— |
|
— |
|
(0.29) |
Regulatory disallowances and restructuring costs |
|
2.08 |
|
0.01 |
|
— |
|
2.09 |
Pension expense related to previously disposed of gas distribution business |
|
0.02 |
|
— |
|
— |
|
0.02 |
Merger related costs |
|
0.01 |
|
— |
|
(0.02) |
|
(0.01) |
SJGS retirement income tax adjustments |
|
(0.01) |
|
— |
|
— |
|
(0.01) |
Total Adjustments |
|
1.81 |
|
0.01 |
|
(0.02) |
|
1.80 |
Ongoing Earnings (Loss) |
|
$ 2.22 |
|
$ 1.11 |
|
$ (0.51) |
|
$ 2.82 |
Average Diluted Shares Outstanding: 86,368,999 |
|
|
|
|
|
Schedule 4 Reconciliation of GAAP to Ongoing Earnings Per Diluted Share (Preliminary and Unaudited) |
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|
|
PNM |
|
TNMP |
|
Corporate |
|
Consolidated |
|
|
(per diluted share) |
||||||
Quarter Ended |
|
|
|
|
|
|
|
|
GAAP Net Earnings (Loss) Attributable to PNMR: |
|
$ 0.09 |
|
$ 0.23 |
|
$ (0.14) |
|
$ 0.18 |
Adjusting items, net of income tax effects |
|
|
|
|
|
|
|
|
Net change in unrealized (gains) and losses on investment securities |
|
(0.15) |
|
— |
|
— |
|
(0.15) |
|
|
0.07 |
|
— |
|
— |
|
0.07 |
Merger related costs |
|
— |
|
— |
|
0.01 |
|
0.01 |
SJGS retirement income tax adjustments |
|
0.04 |
|
— |
|
— |
|
0.04 |
Total Adjustments |
|
(0.04) |
|
— |
|
0.01 |
|
(0.03) |
Ongoing Earnings (Loss) |
|
$ 0.05 |
|
$ 0.23 |
|
$ (0.13) |
|
$ 0.15 |
Average Diluted Shares Outstanding: 86,142,434 |
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
|
|
|
|
|
|
GAAP Net Earnings (Loss) Attributable to PNMR: |
|
$ 1.20 |
|
$ 1.07 |
|
$ (0.30) |
|
$ 1.97 |
Adjusting items, net of income tax effects |
|
|
|
|
|
|
|
|
Net change in unrealized (gains) and losses on investment securities |
|
0.55 |
|
— |
|
— |
|
0.55 |
|
|
0.07 |
|
— |
|
— |
|
0.07 |
Regulatory disallowances and restructuring costs |
|
0.02 |
|
— |
|
— |
|
0.02 |
Pension expense related to previously disposed of gas distribution business |
|
0.02 |
|
— |
|
— |
|
0.02 |
Merger related costs |
|
— |
|
— |
|
0.02 |
|
0.02 |
SJGS retirement income tax adjustments |
|
0.04 |
|
— |
|
— |
|
0.04 |
Total Adjustments |
|
0.70 |
|
— |
|
0.02 |
|
0.72 |
Ongoing Earnings (Loss) |
|
$ 1.90 |
|
$ 1.07 |
|
$ (0.28) |
|
$ 2.69 |
Average Diluted Shares Outstanding: 86,168,751 |
|
|
|
|
|
Schedule 5 Consolidated Statements of Earnings (Preliminary and Unaudited) |
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|||||
|
Year Ended |
||||
|
2023 |
|
2022 |
|
2021 |
|
(In thousands, except per share amounts) |
||||
Electric Operating Revenues |
$ 1,939,198 |
|
$ 2,249,555 |
|
$ 1,779,873 |
Operating Expenses: |
|
|
|
|
|
Cost of energy |
802,261 |
|
987,941 |
|
644,853 |
Administrative and general |
227,900 |
|
227,149 |
|
230,292 |
Energy production costs |
91,610 |
|
147,347 |
|
143,931 |
Regulatory disallowances and restructuring costs |
71,923 |
|
832 |
|
1,194 |
Depreciation and amortization |
319,503 |
|
304,853 |
|
284,107 |
Transmission and distribution costs |
98,721 |
|
94,684 |
|
81,335 |
Taxes other than income taxes |
95,940 |
|
92,989 |
|
86,008 |
Total operating expenses |
1,707,858 |
|
1,855,795 |
|
1,471,720 |
Operating income |
231,340 |
|
393,760 |
|
308,153 |
Other Income and Deductions: |
|
|
|
|
|
Interest income |
21,963 |
|
16,095 |
|
14,662 |
Gains (losses) on investment securities |
19,246 |
|
(78,357) |
|
16,850 |
Other income |
24,204 |
|
21,601 |
|
20,200 |
Other (deductions) |
(15,869) |
|
(13,881) |
|
(18,559) |
Net other income and (deductions) |
49,544 |
|
(54,542) |
|
33,153 |
Interest Charges |
190,355 |
|
127,908 |
|
96,877 |
Earnings before Income Taxes |
90,529 |
|
211,310 |
|
244,429 |
Income Taxes (Benefits) |
(16,350) |
|
26,130 |
|
32,582 |
Net Earnings |
106,879 |
|
185,180 |
|
211,847 |
(Earnings) Attributable to |
(18,533) |
|
(15,122) |
|
(15,490) |
Preferred Stock Dividend Requirements of Subsidiary |
(528) |
|
(528) |
|
(528) |
Net Earnings Attributable to PNMR |
$ 87,818 |
|
$ 169,530 |
|
$ 195,829 |
Net Earnings Attributable to PNMR per Common Share: |
|
|
|
|
|
Basic |
$ 1.02 |
|
$ 1.97 |
|
$ 2.28 |
Diluted |
$ 1.02 |
|
$ 1.97 |
|
$ 2.27 |
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