EX-12.1 2 pnm6302018ex121.htm EXHIBIT 12.1

Exhibit 12.1
PNM RESOURCES, INC. AND SUBSIDIARIES
Ratio of Earnings to Fixed Charges
(In thousands, except ratio)
|  | Six Months Ended |  | Year Ended December 31, |
|  | June 30, 2018 |  | 2017 |  | 2016 |  | 2015 |  | 2014 |  | 2013 |
Fixed charges, as defined by the Securities and Exchange Commission: |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expensed and capitalized |  | $ | 67,649 |  |  | $ | 130,024 |  |  | $ | 129,592 |  |  | $ | 117,932 |  |  | $ | 117,337 |  |  | $ | 118,880 |  |
Amortization of debt premium, discount, and expenses |  | 2,344 |  |  | 4,106 |  |  | 3,779 |  |  | 3,575 |  |  | 4,194 |  |  | 3,716 |  |
Estimated interest factor of lease rental charges |  | 1,343 |  |  | 2,567 |  |  | 2,747 |  |  | 3,298 |  |  | 4,686 |  |  | 5,847 |  |
Preferred dividend requirements of subsidiary |  | 290 |  |  | 1,249 |  |  | 781 |  |  | 784 |  |  | 809 |  |  | 800 |  |
Total Fixed Charges |  | $ | 71,626 |  |  | $ | 137,946 |  |  | $ | 136,899 |  |  | $ | 125,589 |  |  | $ | 127,026 |  |  | $ | 129,243 |  |
Earnings, as defined by the Securities and Exchange Commission: |  |  |  |  |  |  |  |  |  |  |  |  |
Earnings before income taxes and non-controlling interest |  | $ | 67,187 |  |  | $ | 225,759 |  |  | $ | 195,174 |  |  | $ | 46,153 |  |  | $ | 200,647 |  |  | $ | 175,069 |  |
Fixed charges as above |  | 71,626 |  |  | 137,946 |  |  | 136,899 |  |  | 125,589 |  |  | 127,026 |  |  | 129,243 |  |
Interest capitalized |  | (4,673 | ) |  | (8,806 | ) |  | (7,964 | ) |  | (9,753 | ) |  | (6,256 | ) |  | (5,209 | ) |
Non-controlling interest in earnings of Valencia |  | (7,786 | ) |  | (15,017 | ) |  | (14,519 | ) |  | (14,910 | ) |  | (14,127 | ) |  | (14,521 | ) |
(Earnings) loss of equity investee |  | (251 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
Preferred dividend requirements of subsidiary |  | (290 | ) |  | (1,249 | ) |  | (781 | ) |  | (784 | ) |  | (809 | ) |  | (800 | ) |
Earnings Available for Fixed Charges |  | $ | 125,813 |  |  | $ | 338,633 |  |  | $ | 308,809 |  |  | $ | 146,295 |  |  | $ | 306,481 |  |  | $ | 283,782 |  |
Ratio of Earnings to Fixed Charges |  | 1.76 |  | 1 | 2.45 |  | 2 | 2.26 |  | 3 | 1.16 |  | 4 | 2.41 |  | 5 | 2.20 |  | 6
1 Earnings before income taxes and non-controlling interest for the six months ended June 30, 2018 includes a pre-tax loss of $1.8 million due to the write-off of regulatory disallowances and restructuring costs at PNM. If that loss was excluded, the Ratio of Earnings to Fixed Charges would have been 1.78.
2 Earnings before income taxes and non-controlling interest for the year ended December 31, 2017 includes a pre-tax loss of $27.0 million due to the write-off of regulatory disallowances and restructuring costs at PNM. If that loss was excluded, the Ratio of Earnings to Fixed Charges would have been 2.65 for 2017.
3 Earnings before income taxes and non-controlling interest for the year ended December 31, 2016 includes a pre-tax loss of $15.0 million due to the write-off of regulatory disallowances and restructuring costs at PNM. If that loss was excluded, the Ratio of Earnings to Fixed Charges would have been 2.37 for 2016.
4 Earnings before income taxes and non-controlling interest for the year ended December 31, 2015 includes a pre-tax loss of $167.5 million due to the write-off of regulatory disallowances and restructuring costs at PNM. If that loss was excluded, the Ratio of Earnings to Fixed Charges would have been 2.50 for 2015.
5 Earnings before income taxes and non-controlling interest for the year ended December 31, 2014 includes a pre-tax loss of $1.1 million due to the write-off of regulatory disallowances at PNM. If that loss was excluded, the Ratio of Earnings to Fixed Charges would have been 2.42 for 2014.
6 Earnings before income taxes and non-controlling interest for the year ended December 31, 2013 includes a pre-tax loss of $12.2 million due to the write-off of regulatory disallowances at PNM. If that loss was excluded, the Ratio of Earnings to Fixed Charges would have been 2.29 for 2013.