EX-12.1 11 pnm12312014ex121.htm EXHIBIT 12.1

| Exhibit 12.1 |  |
PNM RESOURCES, INC. AND SUBSIDIARIES |
Ratio of Earnings to Fixed Charges |
(In thousands, except ratio) |
|  |  | Year Ended December 31, |
|  |  | 2014 |  | 2013 |  | 2012 |  | 2011 |  | 2010 |
| Fixed charges, as defined by the Securities and Exchange Commission: |  |  |  |  |  |  |  |  |  |  |
| Interest expensed and capitalized |  | $ | 117,337 |  |  | $ | 118,880 |  |  | $ | 125,379 |  |  | $ | 122,998 |  |  | $ | 123,633 |  |
| Amortization of debt premium, discount, and expenses |  | 4,194 |  |  | 3,716 |  |  | 4,023 |  |  | 3,695 |  |  | 4,627 |  |
| Estimated interest factor of lease rental charges |  | 4,686 |  |  | 5,847 |  |  | 5,585 |  |  | 6,665 |  |  | 6,888 |  |
| Preferred dividend requirements of subsidiary |  | 809 |  |  | 800 |  |  | 769 |  |  | 864 |  |  | 1,075 |  |
| Total Fixed Charges |  | $ | 127,026 |  |  | $ | 129,243 |  |  | $ | 135,756 |  |  | $ | 134,222 |  |  | $ | 136,223 |  |
| Earnings, as defined by the Securities and Exchange Commission: |  |  |  |  |  |  |  |  |  |  |
| Earnings (loss) from continuing operations before income taxes and non-controlling interest |  | $ | 200,647 |  |  | $ | 175,069 |  |  | $ | 175,035 |  |  | $ | 321,469 |  |  | $ | (63,379 | ) |
| (Earnings) loss of equity investee |  | — |  |  | — |  |  | — |  |  | — |  |  | 15,223 |  |
| Earnings (loss) from continuing operations before income taxes, non-controlling interest, and investee earnings |  | 200,647 |  |  | 175,069 |  |  | 175,035 |  |  | 321,469 |  |  | (48,156 | ) |
| Fixed charges as above |  | 127,026 |  |  | 129,243 |  |  | 135,756 |  |  | 134,222 |  |  | 136,223 |  |
| Interest capitalized |  | (6,256 | ) |  | (5,209 | ) |  | (5,432 | ) |  | (2,697 | ) |  | (3,401 | ) |
| Non-controlling interest in earnings of Valencia |  | (14,127 | ) |  | (14,521 | ) |  | (14,050 | ) |  | (14,047 | ) |  | (13,563 | ) |
| Preferred dividend requirements of subsidiary |  | (809 | ) |  | (800 | ) |  | (769 | ) |  | (864 | ) |  | (1,075 | ) |
| Earnings Available for Fixed Charges |  | $ | 306,481 |  |  | $ | 283,782 |  |  | $ | 290,540 |  |  | $ | 438,083 |  |  | $ | 70,028 |  |
| Ratio of Earnings to Fixed Charges |  | 2.41 |  | 1 | 2.20 |  | 1 | 2.14 |  |  | 3.26 |  | 2 | 0.51 |  | 3
| 1 Earnings (loss) from continuing operations before income taxes and non-controlling interest for the years ended December 31, 2014 and December 31, 2013 include pre-tax losses of $1.1 million and $12.2 million due to the write-off of regulatory disallowances at PNM. If those losses were excluded, the Ratio of Earnings to Fixed Charges would have been 2.42 for 2014 and 2.29 for 2013.
| 2 Earnings (loss) from continuing operations before income taxes and non-controlling interest for the year ended December 31, 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 Fixed Charges would have been 3.42. In addition, 2011 includes a pre-tax gain on the sale of First Choice of $174.9 million. If that gain were also excluded, the Ratio of Earnings to Fixed Charges would have been 1.96.
| 3 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.