TXNM Energy Reports Third Quarter 2024 Results
2024 Ongoing Earnings Guidance Narrowed
-
2024 third quarter GAAP earnings of
$1.45 per diluted share -
2024 third quarter ongoing earnings of
$1.43 per diluted share -
Narrowed 2024 ongoing earnings guidance range to
$2.70 -$2.75
ALBUQUERQUE, N.M.,
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Q3 2024 |
Q3 2023 |
YTD 2024 |
YTD 2023 |
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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"We're pleased with our third quarter results," said
SEGMENT REPORTING OF 2024 THIRD 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
TXNM Energy 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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Q3 2024 |
Q3 2023 |
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Q3 2024 |
Q3 2023 |
PNM |
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TNMP |
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Corporate and Other |
( |
( |
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( |
( |
Consolidated |
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Net changes to GAAP and ongoing earnings in the third quarter of 2024 compared to the third quarter of 2023 include:
- PNM: The implementation of new retail rates, improved performance by the decommissioning and reclamation trusts and interest expense net of refunds were more than offset by lower transmission margins due to market prices, new depreciation rates implemented as part of new retail rates as well as depreciation expense associated with new capital investments. Load growth was offset by lower weather impacts.
- TNMP: Rate recovery through Transmission Cost of Service (TCOS) and Distribution Cost Recovery Factor (DCRF) increases were more than offset by lower weather impacts along with depreciation, property tax and interest expense associated with new capital investments.
- Corporate and Other: Lower NMRD income following the February sale and higher interest rates on variable rate debt, net of hedges, increased losses.
GAAP and ongoing earnings per share were reduced in the third quarter of 2024 by additional shares issued in
In addition, GAAP earnings in the third quarter of 2024 included
Additional materials with information on quarterly results are available at
https://www.txnmenergy.com/investors/financial-information/quarterly-reports/2024.aspx.
THIRD QUARTER CONFERENCE CALL:
The conference call will be simultaneously broadcast and archived on our website at https://www.txnmenergy.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: https://dpregister.com/sreg/10193346/fda929e300. 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 asking to join the
Background:
CONTACTS: |
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Analysts |
Media |
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Corporate Communications |
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(505) 241-2160 |
(505) 241-2743 |
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
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PNM |
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TNMP |
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Corporate |
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TXNM |
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(in thousands) |
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Three Months Ended |
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GAAP Net Earnings (Loss) Attributable to TXNM |
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$ 108,666 |
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$ 35,695 |
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$ (13,159) |
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$ 131,202 |
Adjusting items before income tax effects: |
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Net change in unrealized (gains) and losses on investment securities2a |
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(9,546) |
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— |
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— |
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(9,546) |
Regulatory disallowances2b |
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6,142 |
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— |
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— |
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6,142 |
Pension expense related to previously disposed of gas distribution business2c |
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433 |
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— |
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— |
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433 |
Merger related costs2d |
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— |
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— |
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479 |
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479 |
Total adjustments before income tax effects |
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(2,971) |
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— |
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479 |
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(2,492) |
Income tax impact of above adjustments1 |
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754 |
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— |
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(121) |
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633 |
Total income tax impacts4 |
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754 |
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— |
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(121) |
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633 |
Adjusting items, net of income taxes |
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(2,217) |
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— |
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358 |
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(1,859) |
Ongoing Earnings (Loss) |
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$ 106,449 |
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$ 35,695 |
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$ (12,801) |
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$ 129,343 |
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Nine Months Ended |
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GAAP Net Earnings (Loss) Attributable to TXNM |
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$ 181,373 |
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$ 80,203 |
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$ (35,135) |
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$ 226,441 |
Adjusting items before income tax effects: |
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Net change in unrealized (gains) and losses on investment securities2a |
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(16,204) |
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— |
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— |
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(16,204) |
Regulatory disallowances2b |
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10,847 |
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— |
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— |
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10,847 |
Pension expense related to previously disposed of gas distribution business2c |
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1,299 |
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— |
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— |
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1,299 |
Merger related costs2d |
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134 |
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(22) |
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2,128 |
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2,240 |
Sale of NMRD3 |
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— |
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— |
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15,097 |
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15,097 |
Total adjustments before income tax effects |
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(3,924) |
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(22) |
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17,225 |
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13,279 |
Income tax impact of above adjustments1 |
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997 |
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4 |
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(4,375) |
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(3,374) |
Sale of NMRD3 |
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— |
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— |
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(15,712) |
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(15,712) |
Total income tax impacts4 |
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997 |
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4 |
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(20,087) |
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(19,086) |
Adjusting items, net of income taxes |
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(2,927) |
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(18) |
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(2,862) |
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(5,807) |
Ongoing Earnings (Loss) |
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$ 178,446 |
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$ 80,185 |
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$ (37,997) |
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$ 220,634 |
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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 Condensed Consolidated Statements 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 Increase in "Regulatory disallowances" of |
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c Increases in "Other (deductions)" |
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d Increases (decreases) in "Administrative and general", including |
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3 Net gain of |
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4 Increases (decreases) in "Income Taxes (Benefits)" |
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PNM |
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TNMP |
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Corporate |
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TXNM |
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(in thousands) |
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Three Months Ended |
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GAAP Net Earnings (Loss) Attributable to TXNM |
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$ 8,076 |
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$ 39,504 |
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$ (9,854) |
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$ 37,726 |
Adjusting items before income tax effects: |
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Net change in unrealized (gains) and losses on investment securities2a |
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5,551 |
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— |
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— |
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5,551 |
Regulatory disallowances2b |
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119,872 |
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— |
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— |
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119,872 |
Pension expense related to previously disposed of gas distribution business2c |
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679 |
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— |
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— |
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679 |
Merger related costs2d |
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32 |
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— |
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132 |
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164 |
Total adjustments before income tax effects |
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126,134 |
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— |
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132 |
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126,266 |
Income tax impact of above adjustments1 |
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(32,038) |
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— |
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(34) |
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(32,072) |
Income tax impact of non-deductible merger related costs3 |
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1 |
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— |
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9 |
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10 |
Timing of statutory and effective tax rates on non-recurring items4 |
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692 |
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(106) |
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429 |
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1,015 |
Total income tax impacts5 |
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(31,345) |
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(106) |
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404 |
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(31,047) |
Adjusting items, net of income taxes |
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94,789 |
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(106) |
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536 |
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95,219 |
Ongoing Earnings (Loss) |
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$ 102,865 |
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$ 39,398 |
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$ (9,318) |
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$ 132,945 |
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Nine Months Ended |
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GAAP Net Earnings (Loss) Attributable to TXNM |
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$ 93,836 |
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$ 74,169 |
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$ (29,960) |
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$ 138,045 |
Adjusting items before income tax effects: |
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Net change in unrealized (gains) and losses on investment securities2a |
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(6,438) |
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— |
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— |
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(6,438) |
Regulatory disallowances2b |
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123,602 |
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— |
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— |
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123,602 |
Pension expense related to previously disposed of gas distribution business2c |
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2,037 |
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— |
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— |
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2,037 |
Merger related costs2d |
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59 |
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2 |
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651 |
|
712 |
Total adjustments before income tax effects |
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119,260 |
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2 |
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651 |
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119,913 |
Income tax impact of above adjustments1 |
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(30,292) |
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— |
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(166) |
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(30,458) |
Income tax impact of non-deductible merger related costs3 |
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6 |
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— |
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94 |
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100 |
Timing of statutory and effective tax rates on non-recurring items4 |
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240 |
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51 |
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144 |
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435 |
Total income tax impacts5 |
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(30,046) |
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51 |
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72 |
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(29,923) |
Adjusting items, net of income taxes |
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89,214 |
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53 |
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723 |
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89,990 |
Ongoing Earnings (Loss) |
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$ 183,050 |
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$ 74,222 |
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$ (29,237) |
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$ 228,035 |
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1Tax 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 Condensed 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 Revenue" 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 in "Income Taxes (Benefits)" |
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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 23.8% for TXNM, and the GAAP anticipated effective tax rates of 18.9% for PNM, 15.1% for TNMP, and 16.1% for TXNM, which will reverse by year end |
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5 Income tax impacts reflected in "Income Taxes (Benefits)" |
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PNM |
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TNMP |
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Corporate |
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TXNM |
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(per diluted share) |
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Three Months Ended |
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GAAP Net Earnings (Loss) Attributable to TXNM |
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$ 1.20 |
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$ 0.39 |
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$ (0.14) |
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$ 1.45 |
Adjusting items, net of income tax effects: |
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Net change in unrealized (gains) and losses on investment securities |
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(0.07) |
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— |
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— |
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(0.07) |
Regulatory disallowances |
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0.05 |
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— |
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— |
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0.05 |
Total Adjustments |
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(0.02) |
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— |
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— |
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(0.02) |
Ongoing Earnings (Loss) |
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$ 1.18 |
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$ 0.39 |
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$ (0.14) |
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$ 1.43 |
Average Diluted Shares Outstanding: 90,605,188 |
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Nine Months Ended |
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GAAP Net Earnings (Loss) Attributable to TXNM |
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$ 2.00 |
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$ 0.89 |
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$ (0.39) |
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$ 2.50 |
Adjusting items, net of income tax effects: |
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Net change in unrealized (gains) and losses on investment securities |
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(0.13) |
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— |
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— |
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(0.13) |
Sale of NMRD |
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— |
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— |
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(0.05) |
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(0.05) |
Regulatory disallowances |
|
0.09 |
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— |
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— |
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0.09 |
Pension expense related to previously disposed of gas distribution business |
|
0.01 |
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— |
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— |
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0.01 |
Merger related costs |
|
— |
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— |
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0.02 |
|
0.02 |
Total Adjustments |
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(0.03) |
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— |
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(0.03) |
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(0.06) |
Ongoing Earnings (Loss) |
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$ 1.97 |
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$ 0.89 |
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$ (0.42) |
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$ 2.44 |
Average Diluted Shares Outstanding: 90,551,894 |
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PNM |
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TNMP |
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Corporate |
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TXNM |
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(per diluted share) |
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Three Months Ended |
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GAAP Net Earnings (Loss) Attributable to TXNM |
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$ 0.09 |
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$ 0.46 |
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$ (0.11) |
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$ 0.44 |
Adjusting items, net of income tax effects: |
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Net change in unrealized (gains) and losses on investment securities |
|
0.04 |
|
— |
|
— |
|
0.04 |
Regulatory disallowances |
|
1.04 |
|
— |
|
— |
|
1.04 |
Pension expense related to previously disposed of gas distribution business |
|
0.01 |
|
— |
|
— |
|
0.01 |
Timing of statutory and effective tax rates on non-recurring items |
|
0.01 |
|
— |
|
— |
|
0.01 |
Total Adjustments |
|
1.10 |
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— |
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— |
|
1.10 |
Ongoing Earnings (Loss) |
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$ 1.19 |
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$ 0.46 |
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$ (0.11) |
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$ 1.54 |
Average Diluted Shares Outstanding: 86,129,744 |
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Nine Months Ended |
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GAAP Net Earnings (Loss) Attributable to TXNM |
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$ 1.09 |
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$ 0.86 |
|
$ (0.35) |
|
$ 1.60 |
Adjusting items, net of income tax effects: |
|
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Net change in unrealized (gains) and losses on investment securities |
|
(0.05) |
|
— |
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— |
|
(0.05) |
Regulatory disallowances |
|
1.07 |
|
— |
|
— |
|
1.07 |
Pension expense related to previously disposed of gas distribution business |
|
0.02 |
|
— |
|
— |
|
0.02 |
Merger related costs |
|
— |
|
— |
|
0.01 |
|
0.01 |
Total Adjustments |
|
1.04 |
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— |
|
0.01 |
|
1.05 |
Ongoing Earnings (Loss) |
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$ 2.13 |
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$ 0.86 |
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$ (0.34) |
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$ 2.65 |
Average Diluted Shares Outstanding: 86,150,508 |
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Three Months Ended |
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Nine Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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(In thousands, except per share amounts) |
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Electric Operating Revenues |
$ 569,256 |
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$ 505,851 |
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$ 1,494,235 |
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$ 1,527,084 |
Operating Expenses: |
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Cost of energy |
138,909 |
|
210,313 |
|
425,919 |
|
624,451 |
Administrative and general |
64,840 |
|
58,481 |
|
179,848 |
|
167,630 |
Energy production costs |
21,259 |
|
20,388 |
|
68,055 |
|
68,345 |
Regulatory disallowances |
6,142 |
|
2,315 |
|
10,601 |
|
6,046 |
Depreciation and amortization |
97,400 |
|
80,192 |
|
285,000 |
|
237,405 |
Transmission and distribution costs |
23,660 |
|
25,078 |
|
71,475 |
|
72,739 |
Taxes other than income taxes |
25,966 |
|
22,432 |
|
75,984 |
|
72,395 |
Total operating expenses |
378,176 |
|
419,199 |
|
1,116,882 |
|
1,249,011 |
Operating income |
191,080 |
|
86,652 |
|
377,353 |
|
278,073 |
Other Income and Deductions: |
|
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Interest income |
8,669 |
|
5,366 |
|
17,719 |
|
15,568 |
Gains (losses) on investment securities |
13,770 |
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(8,404) |
|
32,326 |
|
1,815 |
Other income |
7,953 |
|
8,428 |
|
20,552 |
|
17,121 |
Other (deductions) |
(1,988) |
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(4,555) |
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(20,146) |
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(10,562) |
Net other income and deductions |
28,404 |
|
835 |
|
50,451 |
|
23,942 |
Interest Charges |
59,664 |
|
49,838 |
|
169,254 |
|
136,660 |
Earnings before Income Taxes |
159,820 |
|
37,649 |
|
258,550 |
|
165,355 |
Income Taxes (Benefits) |
23,422 |
|
(5,267) |
|
19,822 |
|
12,742 |
Net Earnings |
136,398 |
|
42,916 |
|
238,728 |
|
152,613 |
(Earnings) Attributable to |
(5,064) |
|
(5,058) |
|
(11,891) |
|
(14,172) |
Preferred Stock Dividend Requirements of Subsidiary |
(132) |
|
(132) |
|
(396) |
|
(396) |
Net Earnings Attributable to TXNM |
$ 131,202 |
|
$ 37,726 |
|
$ 226,441 |
|
$ 138,045 |
Net Earnings Attributable to TXNM per Common Share: |
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Basic |
$ 1.45 |
|
$ 0.44 |
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$ 2.50 |
|
$ 1.60 |
Diluted |
$ 1.45 |
|
$ 0.44 |
|
$ 2.50 |
|
$ 1.60 |
Dividends Declared per Common Share |
$ 0.3875 |
|
$ 0.3675 |
|
$ 1.1625 |
|
$ 1.1025 |
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