EX-12.2 4 pnm9302011ex122.htm EXHIBIT 12.2

Exhibit 12.2 |
PNM RESOURCES, INC. AND SUBSIDIARIES
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
(In thousands, except ratio)
|  | Nine Months Ended |  | Year Ended December 31,
|  | September 30, 2011 |  | 2010 |  | 2009 |  | 2008 |  | 2007 |  | 2006
Combined fixed charges and preferred stock dividends, as defined by the Securities and |  |  |  |  |  |  |  |  |  |  |  |
Exchange Commission: |  |  |  |  |  |  |  |  |  |  |  |
Interest expensed and capitalized |  | $ | 90,970 |  |  | $ | 123,633 |  |  | $ | 123,833 |  |  | $ | 134,958 |  |  | $ | 124,299 |  |  | $ | 135,819 |
Amortization of debt premium, discount and expenses |  | 2,741 |  |  | 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 |  | 5,130 |  |  | 6,888 |  |  | 7,034 |  |  | 7,894 |  |  | 8,804 |  |  | 7,124 |
Preferred dividend requirements of subsidiary |  | 591 |  |  | 1,075 |  |  | 759 |  |  | 689 |  |  | 556 |  |  | 798 |
Total Fixed Charges |  | 99,432 |  |  | 136,223 |  |  | 138,083 |  |  | 163,685 |  |  | 152,771 |  |  | 160,260 |
Preferred stock dividend requirements |  | 1,783 |  |  | 4,865 |  |  | 3,433 |  |  | 780 |  |  | — |  |  | — |
Total Combined Fixed Charges and Preferred Stock Dividends |  | $ | 101,215 |  |  | $ | 141,088 |  |  | $ | 141,516 |  |  | $ | 164,465 |  |  | $ | 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 |  | $ | 112,732 |  |  | $ | (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 |  | 112,732 |  |  | (48,156 | ) |  | 124,896 |  |  | (358,694 | ) |  | 55,531 |  |  | 164,018 |
Fixed charges as above |  | 99,432 |  |  | 136,223 |  |  | 138,083 |  |  | 163,685 |  |  | 152,771 |  |  | 160,260 |
Interest capitalized |  | (1,886 | ) |  | (3,401 | ) |  | (7,743 | ) |  | (8,849 | ) |  | (10,740 | ) |  | (6,503 | )
Non-controlling interest in earnings of Valencia |  | (10,764 | ) |  | (13,563 | ) |  | (11,890 | ) |  | (7,179 | ) |  | — |  |  | — |
Preferred dividend requirements of subsidiary |  | (591 | ) |  | (1,075 | ) |  | (759 | ) |  | (689 | ) |  | (556 | ) |  | (798 | )
Earnings Available for Combined Fixed Charges and Preferred Stock Dividends |  | $ | 198,923 |  |  | $ | 70,028 |  |  | $ | 242,587 |  |  | $ | (211,726 | ) |  | $ | 197,006 |  |  | $ | 316,977 |
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends |  | 1.97 |  | 1 | 0.50 |  | 2 |  | 1.71 |  |  | N/M |  | 3 |  | 1.29 |  |  | 1.98 |
1 Earnings (loss) from continuing operations before income taxes and non-controlling interest for the nine months ended September 30, 2011 includes a pre-tax loss of $21.4 million due to the write-off of regulatory disallowances at PNM and TNMP. If those losses were excluded, the ratio of earnings to combined fixed charges and preferred stock dividends would have been 2.18.
2 The shortfall in the earnings available for combined fixed charges and preferred stock dividends to achieve a ratio of earnings to combined fixed charges and preferred stock dividends of 1.00 amounted to $71.1 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 combined fixed charges and preferred stock dividends would have been 1.83.
3 The ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2008 is not meaningful since earnings available for combined fixed charges and preferred stock dividends is negative. The shortfall in the earnings available for combined fixed charges and preferred stock dividends to achieve a ratio of earnings to combined fixed charges and preferred stock dividends of 1.00 amounted to $376.2 million for the year ended December 31, 2008.