PNM Resources(PNM) - 2025 Q2 - Quarterly Report

Financial Performance - Electric Operating Revenues for Q2 2025 reached $502.4 million, a 2.7% increase from $488.1 million in Q2 2024[19] - Total Operating Expenses for Q2 2025 were $429.7 million, up 12.3% from $382.4 million in Q2 2024[19] - Net Earnings attributable to TXNM for Q2 2025 were $21.6 million, a decrease of 55.1% compared to $48.0 million in Q2 2024[19] - Basic Earnings per Common Share for Q2 2025 were $0.22, down from $0.53 in Q2 2024, reflecting a 58.5% decline[19] - Comprehensive Income attributable to TXNM for Q2 2025 was $20.8 million, compared to $45.8 million in Q2 2024, a decrease of 54.7%[22] - The company reported a total of $985.2 million in Electric Operating Revenues for the first half of 2025, compared to $925.0 million in the same period of 2024, marking a 6.5% increase[19] - Operating Income for the first half of 2025 was $144.6 million, down 22.4% from $186.3 million in the first half of 2024[19] - Net earnings for the six months ended June 30, 2025, were $38,810,000, a decrease from $102,330,000 in the same period of 2024, representing a decline of approximately 62%[24] - Net earnings for the six months ended June 30, 2025, were $33,618,000, a decrease from $79,798,000 in the same period of 2024, representing a decline of approximately 58.1%[42] - Net earnings for the six months ended June 30, 2025, were $20,968,000, compared to $43,251,000 for the same period in 2024, showing a decrease of approximately 51.5%[65] Expenses and Charges - Total Operating Expenses for Q2 2025 were $301,733,000, up from $275,580,000 in Q2 2024, with year-to-date expenses totaling $603,775,000 compared to $532,745,000[36] - Interest Charges for Q2 2025 were $72.0 million, up 28.9% from $55.8 million in Q2 2024[19] - Interest Charges for Q2 2025 increased to $31,975,000 from $25,880,000 in Q2 2024, with year-to-date interest charges totaling $61,791,000 compared to $50,996,000[36] - Cost of Energy for Q2 2025 was $124,336,000, up from $114,772,000 in Q2 2024, contributing to a year-to-date total of $255,290,000 compared to $212,184,000[36] - Administrative and General Expenses for Q2 2025 were $59,526,000, compared to $54,876,000 in Q2 2024, with year-to-date expenses at $117,136,000 versus $106,612,000[36] Cash Flow and Assets - Cash flows from operating activities totaled $144,795,000 for the first half of 2025, down from $169,524,000 in 2024, indicating a decrease of about 14.6%[24] - Cash flows from operating activities for the six months ended June 30, 2025, amounted to $102,263,000, compared to $92,735,000 in 2024, indicating an increase of 10.5%[58] - Cash and cash equivalents at the end of the period rose to $37,524,000, up from $20,320,000 at the end of 2024, marking an increase of about 84.8%[26] - Total current assets increased to $573,727,000 as of June 30, 2025, compared to $498,836,000 at the end of 2024, reflecting a growth of approximately 15%[29] - Total current assets as of June 30, 2025, were $141,873,000, compared to $100,516,000 at the end of 2024, indicating a growth of 40.9%[60] - Accounts receivable increased to $39,697,000 as of June 30, 2025, from $34,419,000 as of December 31, 2024, reflecting a growth of 15.5%[60] Debt and Liabilities - Long-term borrowings increased to $1,719,300,000 in the first half of 2025, compared to $1,065,000,000 in 2024, representing a significant rise of approximately 61.4%[26] - Total liabilities decreased to $8,446,941,000 as of June 30, 2025, from $8,616,919,000 at the end of 2024, a reduction of approximately 1.97%[32] - Total liabilities increased to $5,371,102,000 as of June 30, 2025, from $5,211,552,000 at the end of 2024, representing a rise of approximately 3.1%[50] - Long-term debt increased from $1,464,079,000 in December 2024 to $1,604,722,000 in June 2025, indicating a rise of approximately 9.8%[62] - TXNM's total liabilities as of June 30, 2025, were $2,264,902,000, a slight decrease from $2,283,936,000 in December 2024[62] Investments and Securities - Gains on investment securities for Q2 2025 amounted to $23.6 million, significantly higher than $0.6 million in Q2 2024[19] - Gains on Investment Securities for Q2 2025 were $23,556,000, significantly higher than $558,000 in Q2 2024, contributing to year-to-date gains of $22,315,000 compared to $18,556,000[36] - The fair value of investment securities held by PNM included $407.0 million for the NDT and $384.6 million as of June 30, 2025[133] - Proceeds from sales of securities amounted to $108,625,000 for the three months ended June 30, 2025, compared to $110,240,000 for the same period in 2024[137] Dividends - The company declared dividends of $0.4075 per common share in Q2 2025, an increase from $0.3875 in Q2 2024[19] - Dividends declared for the second quarter of 2025 were $0.4075 per share, up from $0.3875 per share for the second quarter of 2024, reflecting a 5.8% increase[76] Regulatory and Environmental Factors - The New Mexico Energy Transition Act mandates that investor-owned electric utilities achieve a renewable portfolio of 40% by 2025, increasing to 100% zero-carbon energy by 2045[198] - The EPA adopted regulatory actions in 2024 to replace the Clean Power Plan and the ACE Rule, establishing new source performance standards for natural gas-fired combustion turbines and emission guidelines for existing fossil-fuel-fired electric steam generating units[206] - President Biden's executive order aims to cut U.S. emissions by 50% - 52% from 2005 levels by 2030, with additional goals for a carbon pollution-free power sector by 2035 and a net-zero emissions economy by 2050[209] - PNM is currently assessing the impact of final GHG emission reduction rules on its business and financial condition[210] Legal Proceedings - The company is involved in various legal proceedings, including merger-related litigation, but believes the allegations are without merit and will defend against them vigorously[189]