PNM Resources(PNM) - 2025 Q1 - Quarterly Results

Executive Summary & Highlights This section provides an overview of Q1 2025 financial performance, CEO commentary, and reaffirmed 2025 guidance and long-term targets Q1 2025 Financial Highlights TXNM Energy reported a significant decrease in Q1 2025 GAAP and ongoing net earnings and diluted EPS, partly due to additional shares and unrealized investment losses Q1 2025 Financial Highlights ($ millions, per share) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP net earnings attributable to TXNM Energy | $8.9 | $47.2 | | GAAP diluted EPS | $0.10 | $0.52 | | Ongoing net earnings | $18.1 | $37.0 | | Ongoing diluted EPS | $0.19 | $0.41 | - 2025 first quarter GAAP earnings of $0.10 per diluted share[4] - 2025 first quarter ongoing earnings of $0.19 per diluted share[4] CEO Commentary CEO Pat Collawn stated that Q1 2025 earnings are in line with full-year expectations, highlighting strong growth and capital recovery at TNMP and progress on PNM's rate case - Earnings results in the first quarter are on track with full year expectations[3] - TNMP reflects another quarter of strong growth and capital recovery[3] - PNM's unopposed rate case stipulation continues to move through the regulatory approval process[3] - Company will continue to prioritize customers' needs across Texas and New Mexico as it focuses on executing long-term investment plans[3] 2025 Guidance & Long-Term Targets TXNM Energy affirmed its 2025 consolidated ongoing earnings guidance range and maintained its long-term EPS growth target - Management affirmed its 2025 consolidated ongoing earnings guidance range of $2.74 to $2.84 per diluted share[2] - Maintained its long-term earnings growth target of 7% to 9%[2] - 2025 ongoing earnings guidance range of $2.74 - $2.84 per diluted share affirmed[4] - Long-term earnings per share growth target of 7% to 9%[4] Company Overview This section describes TXNM Energy's business as an energy holding company and details its operating segments: PNM, TNMP, and Corporate and Other Business Description TXNM Energy is an energy holding company based in Albuquerque, New Mexico, providing energy to over 800,000 homes and businesses in Texas and New Mexico through its regulated utilities, TNMP and PNM - TXNM Energy is an energy holding company based in Albuquerque, New Mexico[12] - Delivers energy to more than 800,000 homes and businesses across Texas and New Mexico[12] - Operates through its regulated utilities, TNMP and PNM[12] Operating Segments TXNM Energy operates through three main segments: PNM (a vertically integrated electric utility), TNMP (an electric transmission and distribution utility), and Corporate and Other (holding company and subsidiaries) - PNM is a vertically integrated electric utility in New Mexico with distribution, transmission and generation assets[5] - TNMP is an electric transmission and distribution utility in Texas[5] - Corporate and Other reflects the TXNM Energy holding company and other subsidiaries[5] First Quarter 2025 Financial Performance This section details TXNM Energy's consolidated and segment-specific financial results for Q1 2025, including GAAP and ongoing earnings, and provides reconciliations between these measures Consolidated Earnings Results (GAAP & Ongoing) Consolidated GAAP diluted EPS decreased significantly from $0.52 in Q1 2024 to $0.10 in Q1 2025, while ongoing diluted EPS also declined from $0.41 to $0.19, partly due to additional shares issued and unrealized investment losses Consolidated Diluted EPS (per share) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP diluted EPS | $0.10 | $0.52 | | Ongoing diluted EPS | $0.19 | $0.41 | - GAAP and ongoing earnings per share were reduced in the first quarter of 2025 by additional shares issued in December 2024[7] - GAAP earnings in the first quarter of 2025 included $8.2 million of net unrealized losses on investment securities compared to $12.2 million of net unrealized gains in the first quarter of 2024[8] Segment Performance Analysis PNM's GAAP and ongoing EPS saw a substantial decrease, while TNMP experienced growth in both GAAP and ongoing EPS, and Corporate and Other's loss per share increased Segment Diluted EPS (per share) | | GAAP Diluted EPS | | Ongoing Diluted EPS | | :--- | :--- | :--- | :--- | :--- | | | Q1 2025 | Q1 2024 | Q1 2025 | Q1 2024 | | PNM | $0.01 | $0.46 | $0.09 | $0.38 | | TNMP | $0.24 | $0.16 | $0.24 | $0.16 | | Corporate and Other | ($0.15) | ($0.10) | ($0.14) | ($0.13) | | Consolidated TXNM Energy | $0.10 | $0.52 | $0.19 | $0.41 | PNM Segment Performance PNM's GAAP diluted EPS dropped from $0.46 to $0.01, and ongoing diluted EPS from $0.38 to $0.09, due to lower transmission margins, increased expenses, and higher demand charges, partially offset by higher retail load PNM Segment Diluted EPS (per share) | | GAAP Diluted EPS | | Ongoing Diluted EPS | | :--- | :--- | :--- | :--- | :--- | | | Q1 2025 | Q1 2024 | Q1 2025 | Q1 2024 | | PNM | $0.01 | $0.46 | $0.09 | $0.38 | - Higher retail load, partially offset by lower weather-related usage[11] - Lower transmission margins due to market prices, timing of excess deferred income taxes, increased insurance premiums, timing of plant outages, higher depreciation, property tax and interest expense associated with new capital investments, and increased demand charges from energy storage agreements added in late 2024[11] TNMP Segment Performance TNMP's GAAP and ongoing diluted EPS increased from $0.16 to $0.24, driven by rate recovery mechanisms (DCRF and TCOS) and higher retail load, partially offset by increased expenses from new capital investments TNMP Segment Diluted EPS (per share) | | GAAP Diluted EPS | | Ongoing Diluted EPS | | :--- | :--- | :--- | :--- | :--- | | | Q1 2025 | Q1 2024 | Q1 2025 | Q1 2024 | | TNMP | $0.24 | $0.16 | $0.24 | $0.16 | - Rate recovery through Distribution Cost Recovery Factor (DCRF) and Transmission Cost of Service (TCOS) rate mechanisms[11] - Higher retail load including weather-related usage[11] - Partially offset by depreciation, property tax and interest expense associated with new capital investments[11] Corporate and Other Segment Performance Corporate and Other's GAAP diluted EPS loss increased from ($0.10) to ($0.15), and ongoing diluted EPS loss increased from ($0.13) to ($0.14), primarily due to increased interest expense from holding company debt Corporate and Other Segment Diluted EPS (per share) | | GAAP Diluted EPS | | Ongoing Diluted EPS | | :--- | :--- | :--- | :--- | :--- | | | Q1 2025 | Q1 2024 | Q1 2025 | Q1 2024 | | Corporate and Other | ($0.15) | ($0.10) | ($0.14) | ($0.13) | - Interest expense from holding company debt increased[11] Reconciliation of GAAP to Ongoing Earnings This section provides detailed reconciliations between GAAP and non-GAAP ongoing earnings and EPS, highlighting various adjusting items such as unrealized investment gains/losses, regulatory disallowances, pension expense, merger-related costs, and process improvement initiatives - 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[15] - The Company uses ongoing earnings and ongoing earnings per diluted share to evaluate the operations of the Company and to establish goals[15] Net Earnings Reconciliation For Q1 2025, GAAP Net Earnings Attributable to TXNM were $8,923 thousand, with total adjustments (net of income taxes) of $9,203 thousand, resulting in Ongoing Earnings of $18,126 thousand Net Earnings Reconciliation ($ thousands) | | PNM | TNMP | Corporate and Other | TXNM Consolidated | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended March 31, 2025 | | | | | | GAAP Net Earnings (Loss) Attributable to TXNM | $945 | $22,283 | $(14,305) | $8,923 | | Adjusting items, net of income taxes | $7,973 | $(59) | $1,289 | $9,203 | | Ongoing Earnings (Loss) | $8,918 | $22,224 | $(13,016) | $18,126 | | Three Months Ended March 31, 2024 | | | | | | GAAP Net Earnings (Loss) Attributable to TXNM | $41,920 | $14,583 | $(9,313) | $47,190 | | Adjusting items, net of income taxes | $(7,098) | $86 | $(3,222) | $(10,234) | | Ongoing Earnings (Loss) | $34,822 | $14,669 | $(12,535) | $36,956 | EPS Reconciliation For Q1 2025, GAAP diluted EPS was $0.10, with total adjustments (net of income tax effects) of $0.09, resulting in Ongoing diluted EPS of $0.19 EPS Reconciliation (per share) | | PNM | TNMP | Corporate and Other | TXNM Consolidated | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended March 31, 2025 | | | | | | GAAP Net Earnings (Loss) Attributable to TXNM | $0.01 | $0.24 | $(0.15) | $0.10 | | Total Adjustments | $0.08 | — | $0.01 | $0.09 | | Ongoing Earnings (Loss) | $0.09 | $0.24 | $(0.14) | $0.19 | | Average Diluted Shares Outstanding: 93,179,447 | | | | | | Three Months Ended March 31, 2024 | | | | | | GAAP Net Earnings (Loss) Attributable to TXNM | $0.46 | $0.16 | $(0.10) | $0.52 | | Total Adjustments | $(0.08) | — | $(0.03) | $(0.11) | | Ongoing Earnings (Loss) | $0.38 | $0.16 | $(0.13) | $0.41 | | Average Diluted Shares Outstanding: 90,513,888 | | | | | Condensed Consolidated Statements of Earnings This section presents the condensed consolidated statements of earnings for TXNM Energy, highlighting key revenue, expense, and net earnings figures for Q1 2025 and Q1 2024 Condensed Consolidated Statements of Earnings TXNM Energy reported a significant decrease in Net Earnings Attributable to TXNM, from $47,190 thousand in Q1 2024 to $8,923 thousand in Q1 2025, primarily due to a decrease in operating income and net other income and deductions, coupled with increased interest charges Condensed Consolidated Statements of Earnings ($ thousands, per share) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Electric Operating Revenues | $482,792 | $436,877 | | Total operating expenses | $410,903 | $356,287 | | Operating income | $71,889 | $80,590 | | Net other income and deductions | $5,477 | $10,967 | | Interest Charges | $63,551 | $53,762 | | Earnings before Income Taxes | $13,815 | $37,795 | | Income Taxes (Benefits) | $1,018 | $(12,571) | | Net Earnings | $12,797 | $50,366 | | Net Earnings Attributable to TXNM | $8,923 | $47,190 | | Diluted EPS | $0.10 | $0.52 | | Dividends Declared per Common Share | $0.4075 | $0.3875 | - Gains (losses) on investment securities shifted from a gain of $17,998 thousand in Q1 2024 to a loss of $(1,241) thousand in Q1 2025[20] Additional Information This section provides details on the upcoming conference call, contact information, a safe harbor statement, and definitions of non-GAAP financial measures Conference Call Details TXNM Energy will host a live conference call and webcast on Friday, May 9, at 11 a.m. Eastern to discuss the Q1 2025 results, featuring CEO Pat Collawn, President Don Tarry, and CFO Lisa Eden - First Quarter Conference Call: 11 A.M. Eastern Friday, May 9[9] - Speaking on the call will be Pat Collawn (Chair and Chief Executive Officer), Don Tarry (President and Chief Operating Officer), and Lisa Eden (Senior Vice President and Chief Financial Officer)[9] - The conference call will be simultaneously broadcast and archived on the company's website at https://www.txnmenergy.com/investors/events-and-presentations[9](index=9&type=chunk) Contacts Contact information is provided for analysts (Lisa Goodman) and media (Corporate Communications) - Analysts contact: Lisa Goodman at (505) 241-2160[13] - Media contact: Corporate Communications at (505) 241-2743[13] Safe Harbor Statement This statement cautions readers that forward-looking statements are based on current expectations, and actual results may differ materially due to various factors and risks outlined in SEC filings - Forward-looking statements are based upon current expectations and estimates and apply only as of the date of this report[14] - Readers are cautioned that actual results may differ materially from those expressed or implied by these forward-looking statements[14] - 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[14] Non-GAAP Financial Measures This section defines "Ongoing earnings" as a non-GAAP financial measure used by the company to evaluate operations and set goals, clarifying that these measures are not presented in accordance with GAAP - 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[15] - 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[15] - These financial measures are not measures presented in accordance with GAAP and may not be comparable to similarly titled measures used by other companies[15]