Earning Date, Transcript Summary & Report

Strong Earnings Performance: Ongoing earnings for 2024 are $2.74 per share at the high end of guidance, indicating strong performance.

2025 Earnings Guidance: Introduced guidance for 2025 at a range of $2.74 to $2.84 per share, reflecting growth in Texas and an unopposed settlement in New Mexico.

Dividend Increase Announcement: The board increased the dividend by 5%, maintaining a targeted payout ratio of 50% to 60% for 2025.

Stakeholder Engagement Success: Achieved an unopposed stipulation in New Mexico for a pending rate request, showcasing effective stakeholder engagement.

System Peak Records Growth: TNMP set new system peak records, with an 18% increase over the previous year, indicating strong demand growth.

Data Center Demand Surge: Data center demand on TNMP's system totaled over 600 megawatts, reflecting significant growth in this sector.

Customer Growth Projections: Expecting 2% to 4% growth from distribution customers and 4% to 6% from demand-based customers in 2025.

Capital Investment Expansion: Increased capital investments to support a higher level of core projects across service territory, with a total of $4.2 billion planned.

Solar Capacity Expansion: Added 1,500 megawatts of solar and storage to the system in 2024, nearly doubling carbon-free resource capacity.

Grid Modernization Approval: The approval of the grid modernization plan at PNM will enhance customer integration of renewable resources and energy management.

Rate Request Phase-In: The unopposed stipulation for the 2025 rate request will phase in rates starting July 2025, balancing customer affordability with infrastructure needs.

Future Capacity Planning: Forecasted a need for at least 500 megawatts of new capacity by 2030, indicating proactive planning for future demand.

EPS Growth Target Increase: Increased EPS growth target to 7% to 9% through 2029, reflecting confidence in achieving long-term growth objectives.

Earnings Per Share Stability: Earnings per share (EPS) was reported at $0.3, which was in line with expectations but did not show any growth compared to previous quarters.

Weather Impact on Retail Growth: Milder weather year over year negatively impacted retail load growth, which could affect future earnings.

Profit Margin Pressure: Increased depreciation, property tax, and interest expenses associated with new investments year over year could pressure profit margins.

Shareholder Dilution Concerns: Dilution impacts from shares issued in December 2023 lowered the per-share amount of earnings, indicating potential shareholder dilution concerns.

Lower Earned Return Outlook: The company anticipates a lower earned return in 2025 due to the midyear implementation of new rates, which could affect investor confidence.

Capital Investment Concerns: The need for significant capital investments, estimated at $7.8 billion, raises concerns about the company's financial leverage and ability to maintain credit metrics.

Equity Issuance Concerns: The company plans to issue $1.3 billion in equity to fund its capital investment plan, which may dilute existing shareholders and raise concerns about financial stability.