EX-12.1 2 dex121.htm RATIO OF EARNINGS TO FIXED CHARGES - PNMR

Exhibit 12.1

PNM RESOURCES, INC. AND SUBSIDIARIES

Ratio of Earnings to Fixed Charges

(In thousands, except ratio)

|  | Year Ended December 31, |
|  | 2010 |  |  | 2009 |  |  | 2008 |  |  | 2007 |  |  | 2006 |
Fixed charges, as defined by the Securities and Exchange Commission: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expensed and capitalized |  | $ | 123,633 |  |  | $ | 123,833 |  |  | $ | 134,958 |  |  | $ | 124,299 |  |  | $ | 135,819 |
Amortization of debt premium, discount and expenses |  |  | 4,627 |  |  |  | 5,430 |  |  |  | 6,386 |  |  |  | 6,566 |  |  |  | 4,729 |
Interest from discontinued operations (including capitalized interest) |  |  | — |  |  |  | 1,027 |  |  |  | 13,758 |  |  |  | 12,546 |  |  |  | 11,790 |
Estimated interest factor of lease rental charges |  |  | 6,888 |  |  |  | 7,034 |  |  |  | 7,894 |  |  |  | 8,804 |  |  |  | 7,124 |
Preferred dividend requirements of subsidiary |  |  | 1,075 |  |  |  | 759 |  |  |  | 689 |  |  |  | 556 |  |  |  | 798 |
Total Fixed Charges |  | $ | 136,223 |  |  | $ | 138,083 |  |  | $ | 163,685 |  |  | $ | 152,771 |  |  | $ | 160,260 |
Earnings, as defined by the Securities and Exchange Commission: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earnings (loss) from continuing operations before income taxes and non-controlling interest |  | $ | (63,379 | ) |  | $ | 94,751 |  |  | $ | (388,381 | ) |  | $ | 63,112 |  |  | $ | 164,018 |
(Earnings) loss of equity investee |  |  | 15,223 |  |  |  | 30,145 |  |  |  | 29,687 |  |  |  | (7,581 | ) |  |  | — |
Earnings (loss) from continuing operations before income taxes, non-controlling interest, and investee earnings |  |  | (48,156 | ) |  |  | 124,896 |  |  |  | (358,694 | ) |  |  | 55,531 |  |  |  | 164,018 |
Fixed charges as above |  |  | 136,223 |  |  |  | 138,083 |  |  |  | 163,685 |  |  |  | 152,771 |  |  |  | 160,260 |
Interest capitalized |  |  | (3,401 | ) |  |  | (7,743 | ) |  |  | (8,849 | ) |  |  | (10,740 | ) |  |  | (6,503 | )
Non-controlling interest in earnings of Valencia |  |  | (13,563 | ) |  |  | (11,890 | ) |  |  | (7,179 | ) |  |  | — |  |  |  | — |
Preferred dividend requirements of subsidiary |  |  | (1,075 | ) |  |  | (759 | ) |  |  | (689 | ) |  |  | (556 | ) |  |  | (798 | )
Earnings Available for Fixed Charges |  | $ | 70,028 |  |  | $ | 242,587 |  |  | $ | (211,726 | ) |  | $ | 197,006 |  |  | $ | 316,977 |
Ratio of Earnings to Fixed Charges |  |  | 0.51 | 1 |  |  | 1.76 |  |  |  | N/M | 2 |  |  | 1.29 |  |  |  | 1.98 |

1 | The shortfall in the earnings available for fixed charges to achieve a ratio of earnings to fixed charges of 1.00 amounted to $66.2 million for the year ended December 31, 2010. Earnings (loss) from continuing operations before income taxes and non-controlling interest includes a pre-tax loss of $188.2 million due to the impairment of PNMR’s investment in an equity investee. If that loss were excluded, the Ratio of Earnings to Fixed Charges would have been 1.90.

2 | The ratio of earnings to fixed charges for the year ended December 31, 2008 is not meaningful since earnings available for fixed charges is negative. The shortfall in the earnings available to achieve a ratio of earnings to fixed charges of 1.00 amounted to $375.4 million for the year ended December 31, 2008.