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PNM Resources (NYSE:PNM)

Q3 2011 Earnings Call

November 03, 2011 11:00 am ET

Executives

Pat Collawn - Chief Executive Officer, President and Director

Chuck Eldred - Chief Financial Officer and Executive Vice President

Lisa Eden -

Analysts

Jeff Gildersleeve - Millennium Partners

Paul B. Fremont - Jefferies & Company, Inc., Research Division

Ashar Khan - SAC Capital

Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division

Michael Bolte - Wells Fargo Securities, LLC, Research Division

Timothy M. Winter - Gabelli & Company, Inc.

Operator

Good day, ladies and gentlemen, and welcome to the PNM Resources Third Quarter Conference Call. [Operator Instructions] As a reminder, this conference may be recorded. I would now like to turn it over to your host, Lisa Eden, Director of Investor Relations. Please go ahead.

Lisa Eden

Thank you, everyone, for joining us this morning for a discussion of the company's third quarter 2011 earnings. Please note that the presentation and the accompanying materials for this conference call and supporting documents are available on the PNM Resources website at www.pnmresources.com.

Joining me today are PNM Resources' CEO, Pat Collawn; and Chuck Eldred, our CFO; as well as several members of our executive management team.

Before I turn over the call to Pat, I need to remind you that some of the information provided this morning should be considered forward-looking statements pursuant to the Private Securities Litigation Reform Act of 1995. We caution you that all of the forward-looking statements are based upon current expectations and estimates, and that PNM Resources assumes no obligation to update the information.

For a detailed discussion of factors affecting PNM Resources' results, please refer to our current and future annual reports on Form 10-K and the quarterly reports on Form 10-Q, as well as other current and future reports on Form 8-K filed with the SEC.

And with that, I will turn over the call to Pat.

Pat Collawn

Thank you, Lisa, and good morning, everyone. Earlier today, we issued our financial news release reporting quarterly ongoing earnings of $0.61 per diluted share compared with $0.63 during the same period in 2010. While our quarterly results are slightly lower this year compared with 2010, this year's third quarter performance was driven by our utilities, PNM and TNMP, which accounted for more than 90% of our ongoing earnings. Chuck will go into detail on the quarter in his portion of the presentation.

Just want to recap the news from earlier this week. As you know, PNM Resources completed its sale of First Choice Power to Direct Energy, and we are now at the beginning of a new business direction in which PNM Resources will be solely operating regulated utilities. I'd just like to take a minute and say that since 2005, First Choice Power has been a valuable part of our business. Brian Hayduk and his team have done a great job in positioning First Choice Power to produce solid and sustainable results, and I speak on behalf of the entire company in wishing all of the First Choice Power employees the very best.

We remain steadfast in controlling utility cost at both PNM and TNMP, and are making significant strides in improving our earnings and narrowing the gap between earnings and allowed returns. TNMP remains on track to achieve its allowed return of 10.125% in 2011. For PNM, initiatives are underway to reduce cost, so that expenses are synced with the increased revenues recently approved by state regulators. With our efforts to further streamline our operations, we expect PNM to earn its allowed retail rate base return of 10% by the end of 2012.

We have also tightened our 2011 guidance range to $1 to $1.05, and we have decided to provide 2012 guidance in early December. Chuck will provide more detail on both of these items later in the call.

If we turn to Slide 5, I'll take a minute to talk about our load growth. Both the utilities experienced load growth for the quarter, although it was modest. But for the year, PNM and TNMP are seeing relatively good growth at 1.2% and 1.3%, respectively.

For PNM, this is the eighth consecutive quarter of load growth that followed 6 consecutive quarters of load decline. While we didn't put unemployment on the slide here because it's steady, New Mexico is still below the national average at 6.6% and Texas weighs in at 8.5%.

If you turn to Slide 6, since the second quarter earnings call, there have been several developments regarding the Best Available Retrofit Technology or BART determination at San Juan. The EPA issued a final determination regarding BART at San Juan, calling for the installation of SCR technology on the 4 units at San Juan in a 5-year time frame.

While this was a change from the EPA's first draft decision, it calls for installation in a 3-year time frame, this calls for it in a 5-year time frame, they still selected the SCR technology. This installation is estimated to cost at least $750 million with PNM share, at least $345 million. This BART determination at San Juan marks the first final federal implementation plan for a coal plant in the United States, so many eyes are watching this issue to see how it resolved.

Since that final plan from the EPA, PNM has gone back to the EPA and asked them to reconsider its mandate, to stay its decision and to fully consider the New Mexico State Implementation Plan, which calls for less expensive SNCR technology. We believe the EPA did not properly consider the state's plan to address regional haze as required by federal laws and regulation. Modeling by an expert engineering firm shows the 2 plants would achieve similar visibility improvements as perceived by the human eye.

PNM has also filed an appeal in the 10th Circuit Court challenging EPA's final determination. And we are very pleased that on October 21, New Mexico Governor, Susana Martinez, and the New Mexico Environment Department challenged EPA's decision in federal appeals court and petitioned EPA for reconsideration of the state plan.

Because New Mexico consumers have so much at stake here and ultimately, they will pay a higher electric cost as a result, we're very pleased that the governor and MNED (sic) [NMED] took these actions to protect the state's legal authority to determine what is best for New Mexico. It's worth noting that, that state plan is significantly less, with total plant cost of about $77 million.

However, given the short time frame for compliance, PNM must move forward under the FIP framework and we expect to issue a request for proposals for the SCR installation by late this year or early next year. We fully expect that any dollars we spend on installing emission reduction technology will be recovered in rate.

On this slide, we have some estimated cost for early design and construction in the first year, and then those costs rise exponentially when we enter into year 2, following the EPA mandate. When we get feedback from the EPA or the courts regarding our appeal and request for a stay, we will communicate those developments to you.

Before I asked Chuck to discuss the details of our financial performance, I wanted to give you a brief update on New Mexico Public Regulation Commission. District 3 Commissioner Jerome Block, Jr. has resigned and his seat on the PRC remains vacant. Governor Martinez will appoint a new commissioner. She has narrowed the field down from the 87 who applied to 5 candidates, 3 Democrats, one independent and one Republican. All of these finalists are imminently qualified to be a PRC commissioner. There is not a time frame for the governor to name the new commissioner. And she has said, she will take due time in order to make a good decision for New Mexico.

Also on the regulatory reform front, Think New Mexico, which is the statewide think tank with a focus on improving the quality of life in New Mexico, has launched a policy initiative to reform the PRC. Think New Mexico recommends 2 fundamental reforms to the Public Regulation Commission. One, refocus and narrow the scope of the PRC's duties. And second, increase the qualification of PRC commissioners by requiring candidates to either have a 4-year degree or 5 years of relevant professional experience. We are watching this process closely and we'll update you as developments arise.

Now I'll turn the call over to Chuck.

Chuck Eldred

Thank you, Pat, and good morning to everyone. As Pat reported, ongoing earnings were $0.61 per share for the third quarter, down $0.02 from last year. However, a breakdown of EPS by segment shows earnings at PNM increasing by $0.03 and TNMP, up $0.02. Total earnings of the competitive businesses, which included full quarter First Choice and 2 months of Optim were down $0.08 from last year. As you're aware, our exit from Optim was completed in September, and shortly I'll give you the details on the First Choice sale, which closed on November 1.

The individual business segments are on Slide 9. In the third quarter, PNM's ongoing earnings were up $0.03 from last year. The primary driver increasing PNM's performance was a $72.1 million annual rate relief implemented on August 21. This accounted for $0.07. Weather was another factor in New Mexico, with cooling degree days up 10% compared to last year. This contributed $0.03 towards earnings. Outage costs were less than last year reflecting the reduction in the number of plant outages days, impacting EPS positively by $0.01. Negative factors affecting PNM's performance this quarter included the expiration of the Palo Verde Toll 3 on December 31 of last year. For the quarter, the toll's expiration reduced earnings by $0.07.

At TNMP, earnings were up $0.02. The implementation of new transmission rates last year, along with the new general rates that were put into place in February of this year added $0.01. As I mentioned earlier, extreme heat in Texas was a contributor to the quarter results. At TNMP, the weather also accounted for an increase of $0.01 to earnings as cooling degree days in TNMP's territory were up more than 14% compared to last year.

Now moving on to Slide 10. The sale of First Choice Power to Direct Energy closed successfully on November 1 for a total of $329 million in cash. This made up for the $270 million purchase price plus working capital of $59 million. We're very pleased with the value received for the business especially when you compare it to other transactions in this space. As you're aware, we plan to use the proceeds from the sale to recapitalized our business. On October 5, the purchase of the Series A convertible preferred stock for $73.5 million was finalized.

Last week, PNM Resources announced the buyback of $50 million of its 9.25% senior unsecured notes, which is anticipated to close later this month. With the premiums, the total is expected to be approximately $60 million.

We are currently considering various alternatives for additional repurchases of our common stock. Market conditions will obviously be a major factor in the decisions that will be made and we'll announce these plans as we're able to. Any remaining proceeds from the First Choice Power sale would be used for general corporate purposes.

Now turning to Slide 11. With the rate relief, we have received in the First Choice and Optim transactions, both Standard & Poor's and Moody's have issued the credit rating upgrades. In late September, S&P raised all of PNM Resources and its utility ratings one notch and improved their outlooks to positive from stable. Moody's upgraded its ratings for TNMP and PNM Resources one notch on Tuesday of this week. We're pleased with this progress and are encouraged that our efforts have been reflected in the recent upgrades. Both of our utilities are now at investment grade ratings.

Now turning to Slide 12. We have entered into a number of financing transactions recently. The improved credit ratings have enabled us to receive more favorable pricing of our debt than we would have been otherwise able to achieve. TNMP refinanced $50 million term loan in September, reducing the interest rate by approximately 150 basis points to about 3.5%. PNM issued $160 million of 10-year notes in October at 5.35%.

In addition, we received our credit facilities -- we renewed our credit facilities for 5 years, both for PNM and PNM Resources, for total capacity of $700 million. These actions have strengthened the company's liquidity and we are all well positioned to address our future capital expenditures including environmental and renewable mandates.

Now turning to Slide 13. As Pat mentioned earlier, we are tightening our 2011 guidance, which was issued on September 23. Consolidated ongoing earnings are now expected to be between $1 and $1.05 range, with the regulated earnings coming in between $1.00 and $1.05, and the unregulated businesses contributing between $0.16 and $0.18. PNM is expected to contribute between $0.72 and $0.75 to ongoing earnings. This guidance includes the rate increase that was effective on August 21, updates for the warmer weather experienced in the third quarter and the cost control efforts that Pat discussed earlier.

At PNM, our cost control efforts are focused largely in closing the $13 million revenue gap between the stipulated and approved amounts. These savings will be realized across both 2011 and 2012. TNMP is expected to account for $0.28 to $0.30 of our ongoing earnings. The primary driver at TNMP is the warmer weather in Texas during the third quarter. We expect that PNM and TNMP to earn a combined $0.18 to $0.23 for the fourth quarter, which includes the share buyback.

As Pat discussed earlier, we intend to give our 2012 guidance in December, and we're targeting December 9, but we'll confirm the date with a press release as we get closer to that time frame. On the guidance call, we are planning to address the number of drivers for 2012 earnings. Load growth expectations will be covered, as well as the impact that normalizing weather will have when comparing 2012 estimates to 2011. We'll give some additional color on the cost savings initiatives that we have been undertaking.

As I mentioned earlier, we are on track to close the $13 million gap between the stipulated and approved rates at PNM. We'll be discussing how much of that will be incremental for 2012 versus the amounts that have already been saved in 2011. We'll also be discussing the assumptions we have around our pensions in 2012. But keep in mind that our plans are frozen, so there are no new participants.

Projected rate base growth and the capital allocation between PNM and TNMP will be reviewed based on our 5-year plan. We'll also provide some additional detail on the expected rate base returns for PNM retail, FERC and TNMP, as well as the EPS impact of our unregulated generation from Palo Verde 3.

And with that, now I'd like to turn the call back over to Pat for concluding remarks.

Pat Collawn

Thank you, Chuck. As we always do, we'll finish the presentation portion of the call with a review of PNM Resources' key strategic goals and checklist and our progress on those.

Our main focus is operating regulated utilities and earning our allowed returns, and we have made significant strides in accomplishing that goal. We'll continue to make progress by aligning cost with revenues, i.e., controlling our expenses and continuing to seek appropriate regulatory recovery.

As I said earlier, TNMP is on its way to earning its return this year, and we expect to finish 2012 with PNM earning its allowed return on its retail rate base. And you'll remember that not that long ago, PNM's regulated return was in the low single digits.

The exit from the competitive businesses in Texas is now complete and we have unlocked the maximum value from those businesses for our shareholders.

On our third goal, as Chuck mentioned, we have seen progress here also. The journey to returning to a solid investment grade has been a long one. Our hard work over the years has resulted in PNM Resources being a financially healthier company and a good investment for our shareholders. We believe we are very well positioned for providing solid, predictable and sustainable financial results with our 2 utilities. We have ample opportunity to grow our utilities with investments in their infrastructure, while securing appropriate recovery.

With the exit from our competitive businesses, we have a stronger and more stable platform, which leaves us well positioned as we consider our dividend path going forward. The board takes a long-term strategic view of the dividend and strive to manage the dividend in order to ensure a competitive total return position comparable to our peers. As you know, the board addresses the dividend every February, so we won't have definitive guidance and until then, but we expect to grow our dividend over time to reflect our earnings growth.

Operator, we are now ready for the Q&A portion of the call.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Paul Fremont from Jefferies.

Paul B. Fremont - Jefferies & Company, Inc., Research Division

Just a point of clarification on your statement that PSNM will earn its authorized return on retail. That excludes -- that's exclusive of the contribution from Palo Verde 3, right?

Pat Collawn

Yes, that is.

Paul B. Fremont - Jefferies & Company, Inc., Research Division

And of the $0.72 to $0.75 that PNM is going to earn this year, can you give us a sense of what the level of contribution is from Palo Verde 3 in that number?

Chuck Eldred

Yes, Paul, we're going to provide more color around the -- we're looking via Palo Verde 3. But this year, it's more of a breakeven. So it's easily, at this point, given where market prices are. It could be anywhere from a breakeven to maybe a few cents drag on earnings. But we've got that factored into the $0.72 and $0.75. But I'm going to break that out and give you more color on that in December, when we talk about guidance.

Paul B. Fremont - Jefferies & Company, Inc., Research Division

Great. And then real quickly. When I look at the remaining holding company debt, should we expect that the company will try and retire the additional debt that's outstanding, particularly the 9.25% debt and over what time period would we expect that to happen?

Chuck Eldred

Yes. If you -- as you may have -- as we said, we've got the open market, the tender going on at this point for $50 million. And that brings the balance down to roughly about $150 million thereabouts. And then we would look for that debt to be retired in 2015, when it matures.

Paul B. Fremont - Jefferies & Company, Inc., Research Division

So in 2015?

Chuck Eldred

Yes. When the maturity date, yes.

Paul B. Fremont - Jefferies & Company, Inc., Research Division

Okay. And then the last question is on San Juan. Would you contemplate any regulatory filing before, I guess, July of next year, when you're at least eligible to file a general rate case?

Pat Collawn

Paul, we might. We are discussing whether or not we want to file a CCN for that project. And if we did that, we would make the filing for that and we'll just wait to see from there. But we may make a regulatory filing, we just haven't decided yet.

Operator

Our next question comes from Ali Agha from SunTrust.

Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division

One, a near-term question, is the third quarter results particularly at the utilities, where they pretty much in line with your expectations? Particularly, I thought that the weather impact, that just look a little light versus -- given the weather. So overall, did the third quarter pretty much come in line on the utility front as you would have expected?

Pat Collawn

I think, a couple of things, Ali. The rates didn't go into effect in New Mexico until August 21. So that was in line. And then the rate design now is different. So we would -- we expected less in the third quarter because the upper blocks took the bigger portion of the rate increase here in New Mexico. They tend to use more year round. So you didn't see a big as impact in the third quarter because you'll see them contributing more through the other quarters.

Chuck Eldred

So, Ali, it's a past point. I mean, given that, we're well within our expectations of what we expected for the third quarter.

Pat Collawn

And those were the 2 things that really drove the third quarter expectations. With PNM, it was rate designs and when rates went into effect.

Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division

I see. Because relative to the numbers out there, I mean -- the quarter was light. But I guess it was a timing issue, is what you're saying.

Pat Collawn

Yes.

Chuck Eldred

Yes, I mean, third and fourth quarter, if you really go back and look at those that do break it down by quarter. It looks to be more of a timing factor than anything.

Pat Collawn

Because the rate design will really show more into the fourth quarter.

Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division

Understood. And in your '11 guidance for PNM Electric, what is the implied retail ROE for this year?

Chuck Eldred

For PNM?

Pat Collawn

For PNM?

Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division

Yes.

Chuck Eldred

Yes, 8% is what we expect this year for rate base return.

Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division

Okay. And you said that TNMP should earn its authorized 10-point -- was it 10...

Pat Collawn

10.125%, yes.

Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division

10.125% this year. Okay. And then separate question on the share buyback. I guess, if I recall, so $230 million was authorized and $73.5 million were used up for the preferred retirement. So about $158 million or so is left. I mean, are you thinking of an accelerated program? I mean, what are the various options you're looking at? When do you think that program gets completed?

Chuck Eldred

Yes, we will announce our plan just as soon as we have made decisions. But that gives us $156 million to work with, that we have authority to buyback additional shares. And so looking at acceleration of the repurchase programs, tenders, other arrangements that can be made in order to accelerate that, to try to execute as quickly as we possibly can. But at this point, until we have the details firmed up and our plans, I refrain from any announcements beyond that.

Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division

Okay. And is that something you'd have firmed up as part of the December 9 or so meeting?

Chuck Eldred

Well, hopefully, we'll be able to provide some additional insight on that.

Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division

Okay. And then lastly, on the dividend. Going back, just clarifying your remarks, as you said you'd grow it over, with earnings going forward. But to get you to your benchmark, relevant benchmark as a regulated utility, what would you consider to be your peer group payout ratio right now?

Chuck Eldred

Well, as you look at, I know you see the regulated businesses tend to be up to 75% payout ratio. And we're still within the 50% to 60%. We're looking at, as Pat mentioned, total return, a way to complement the dividend along with our earnings growth, and we'll discuss that with the board in September -- excuse me in February of next year to determine what that next step would be, and how we can go about executing that strategy around consistency and that's comparable to our peers over time. So that's our goal.

Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division

Comparable to peers would mean ultimately getting to that 70%-plus range?

Chuck Eldred

At this point, it's a long-term view. And so we want to be comparable to our peers about the regulated businesses. But we see that as several steps in order for the company to really address that and the board's comfort with the long-term view of the business. So at this point, I think that's probably enough that we can talk about.

Operator

[Operator Instructions] Our next question comes from Chris Shelton from Millennium.

Jeff Gildersleeve - Millennium Partners

It's actually Jeff Gildersleeve. Just -- most of the questions were asked. But on the buyback, you said market conditions, what exactly did you mean by that?

Chuck Eldred

Well, I think that's probably a good parameter to think about, trying to determine the balance of proceeds we have and what to expect in the way of using those proceeds to buy back additional shares. So market is probably a good parameter to work with. Certainly, if we can find ways to execute in a more favorable manner, we'll do that. But at this point, I don't really have any details to talk about.

Jeff Gildersleeve - Millennium Partners

Okay. And we'll hear more of that in December as well?

Chuck Eldred

Right.

Pat Collawn

Absolutely.

Jeff Gildersleeve - Millennium Partners

Okay. And then on Palo Verde, when we think of '12 and then into '13, does that -- that should improve? I guess, it's improving for other owners...

Chuck Eldred

Jeff, the way -- yes, the way to look at that is -- you're talking about Palo Verde 3, the unregulated, it's 135 megawatts. So you need to think of it in terms of when we got out of the toll, we're really working with kind of a rolling 12 months at how we look of that generation given where prices are relative to the market being exceptionally low. We're not wanting to lock down that asset for any longer period of time. So I would just look at it as the forward curve relative to a rolling 12 months and how we'll eventually work that into our ability to maximize its value over time.

Pat Collawn

And on the cost and the operational front, Pinnacle West is doing a very nice job managing the cost at Palo Verde in a downward slope, and also keeping the production of that plant up.

Jeff Gildersleeve - Millennium Partners

Right. Yes, I'm sorry, I wasn't clear. I was referring to the cost, that improving over time.

Pat Collawn

Yes, we see -- we haven't got the finals from Pinnacle yet, but we see the trends going in the right direction on the cost at Palo Verde.

Jeff Gildersleeve - Millennium Partners

Okay, great. And then the comment about earnings, the allowed return by the end of 2012. So that will be a process through '12 that by the -- so in other words, by the end of '12, you would be at that level of earned return, allowed return?

Chuck Eldred

Yes, Jeff...

Pat Collawn

That's right, Jeff.

Chuck Eldred

That's correct.

Pat Collawn

And when we go in December, we'll have more details about how we get there in terms of cost cuts and other things.

Operator

Our next question comes from Ashar Khan from Visium Asset Management.

Ashar Khan - SAC Capital

My questions have been answered.

Operator

Our next question comes from Tim Winter from Gabelli.

Timothy M. Winter - Gabelli & Company, Inc.

I was wondering if you could give us an update on how the rule-making procedures are going with trying to get in place a process for forward-looking test here in New Mexico?

Pat Collawn

It haven't gotten started yet, Tim.

Timothy M. Winter - Gabelli & Company, Inc.

Okay. What's hindering that process? Is it the turnover in the Commission or?

Pat Collawn

Yes, the Commission really needs to get fully staffed up. And unfortunately, around the resignation of Jerome Block, there was allegations of a credit card misuse that may have spread to some of the Commission's staff. So they have just been a little distracted. But I think as soon the governor gets the new commissioner onboard, they'll get going.

Timothy M. Winter - Gabelli & Company, Inc.

Okay. And is there any -- can you talk about any ways that you could address the San Juan expenditures? Should they end up at the higher amount? Would you just have to wait until they're spent and then file or?

Chuck Eldred

No. We, in the rate case made sure that there was an opening that we could file for any environmental expenditures that came from regulations. There's multiples ways we could do it. We could file for a CWIP. We could file yearly rate cases. We could file an environmental tracker. We're exploring all those kinds of things with our internal folks and with our legislator, in case we decide we need any legislation for that.

Operator

Our next question comes from Maury May from Power Insights.

Maurice E. May

Just a couple of quick questions. I wanted to get 2012 straight. You are going to be earning your allowed ROE at PNM in 2012? Or are you going to be earning at that rate by the end of 2012, implying that you earn it in 2013?

Pat Collawn

By the end -- go ahead, Chuck.

Chuck Eldred

We'll be earning our allowed return in 2012. And as we talked about, in the guidance in December, we'll give you more clarity around the expectations and how we're looking at earning that return. But it is tied to some cost reductions that Pat mentioned earlier as well.

Pat Collawn

And, Maury, remember, it's on the retail piece. So you got it for Palo Verde and don't forget, there's FERC in there too.

Maurice E. May

Right. Okay. And then on your cash position right now, where are you? Following the close...

Chuck Eldred

We're actually sitting on cash. We got about $166 million of surplus in cash right now. So all...

Pat Collawn

The $329 million that walked in the door the other day was very helpful.

Maurice E. May

So you have $166 million. So you can sleep well at night, Chuck.

Pat Collawn

I sleep very well at night.

Chuck Eldred

In fact, there is a, in the appendix...

Pat Collawn

He can.

Chuck Eldred

If you look at the slide at the end, there's a detail.

Operator

Our next question comes from Mike Bolte from Wells Fargo.

Michael Bolte - Wells Fargo Securities, LLC, Research Division

I guess I just have a follow-up question on the PNM earning, the allowed ROE by the end of 2012. Will that be on, like the authorized $1.8 billion of rate base? Or would it be kind of on an average for the year? Like in other words, you pick up any kind of incremental rate base between kind of like, I guess, the end of the test period, which is I think mid-2010? Can you give me that number?

Chuck Eldred

Yes. It would really be more of an average rate base and our earnings projection for '12 will be based on that calculation. So we'll give you more details of that when we talk about it in December. But that's the way to look at it.

Operator

And I'm showing no further questions at this time. I would like to turn the call back over to management for closing remarks.

Pat Collawn

Well, everyone, thank you for joining us on what in New Mexico is a beautiful fall morning. And we look forward to seeing many of you next week at the EEI Financial Conference.

Operator

Ladies and gentlemen, that does conclude today's conference. You may all disconnect, and have a wonderful day.

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