Q4 2018 Earnings ReviewFebruary 27, 2019

Safe Harbor Statement

2

Statements made in this presentation for PNM Resources, Inc. (“PNMR”), Public Service Company of New Mexico (“PNM”), or Texas‐New Mexico Power Company (“TNMP”) (collectively, the “Company”) that relate to future events or expectations, projections, estimates, intentions, goals, targets, and strategies are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward‐looking statements are based upon current expectations and estimates. PNMR, PNM, and TNMP assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward‐looking statements, PNMR, PNM, and TNMP caution readers not to place undue reliance on these statements. PNMR's, PNM's, and TNMP's business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond their control, that can cause actual results to differ from those expressed or implied by the forward‐looking statements. For a discussion of risk factors and other important factors affecting forward‐looking statements, please see the Company’s Form 10‐K and 10‐Q filings with the Securities and Exchange Commission, which factors are specifically incorporated by reference herein.

Non‐GAAP Financial MeasuresFor an explanation of the non‐GAAP financial measures that appear on certain slides in this presentation (ongoing earnings, ongoing earnings per diluted share and ongoing earnings guidance measures), as well as a reconciliation to GAAP measures, please refer to the Company’s website as follows: http://www.pnmresources.com/investors/results.cfm.

Opening Remarks and OverviewPat Vincent‐Collawn

Chairman, President and CEO

Financial Results, Key Highlights and Company Updates

4

• 2019 Ongoing EPS Guidance narrowed to $2.10 ‐ $2.18

Financial Results

Note: EPS is presented on a diluted basis. For a reconciliation of GAAP EPS to Ongoing EPS and a description of adjustments made, please refer to the fourth quarter earnings release issued February 27, 2019.

Q4 2018 Q4 2017 2018 2017GAAP EPS ($0.69) ($0.68) $1.07 $1.00Ongoing EPS $0.18 $0.24 $2.00 $1.94

2018 Key Highlights• TNMP continued growth, load growth at PNM• Return of federal tax savings to customers• Investments in reliability and environmentally sustainable power• 9% dividend increase moves payout ratio to middle of 50‐60% targeted range

2019 Company Updates• New Mexico legislative session: Energy Transition Act• Regulatory Updates: NMPRC actions, TNMP TCOS filing

Key Highlights and Company Updates

PNM and TNMP Regulatory Agenda

5

Filing Action Timing Docket No.

PNMAppeal of 2015 General Rate Case to New Mexico Supreme Court

Oral arguments held October 30, 2017 No statutory timeline S‐1‐SC‐36115

San Juan Generating Station Compliance Filing

Filed December 31, 2018, docket closed; Order issued in new docket to file application in support of abandonment by March 1, 2019

PNM request for reconsideration of Order to be addressed by February 27, 2019 or denied by operation of law

13‐00390‐UT

19‐00018‐UT

Western Energy Imbalance Market Filing

Order governing accounting treatment approved December 19, 2018; Order to vacate previous order and grant rehearing issued February 6, 2019

Procedural schedule or final order pending 18‐00261‐UT

2017 Integrated  Resource Plan

Final Order to accept Plan issued December 19, 2018; notice of appeal to New Mexico Supreme Court received January 18, 2019

No statutory timeline17‐00174‐UT

S‐1‐SC‐37482

2019 Renewable Plan Hearings held September ‐ October 2018 Approved November 29, 2018 18‐00158‐UT

TNMP

General Rate Review Settlement approved December 20, 2018 Rates implemented January 2019 48401

TCOS Filing Filed January 25, 2019 Expected to be approved March 2019 49143

Financial OverviewChuck Eldred

Executive Vice President and CFO

FY 2018 Ongoing EPS Financial Summary

7Note: Segment drivers included in appendix

$0.06 $0.11  ($0.11)

$1.94  $2.00 

FY 2017 FY 2018

PNM TNMP Corporate

Load and Economic Conditions

8

Regulated Retail Energy Sales and Customers (weather‐normalized)

(1) Primarily Residential usage; represents per‐kWh billings(2) Commercial and Industrial usage excluding Transmission customers; represents per‐kW monthly peak billings (3) U.S. Bureau of Labor Statistics, December 2018

1.9%3.1%

1.6%

2015 2016 2017 2018

% Cha

nge

Employment Growth(3)

12‐Month Rolling Average

Albuquerque Dallas U.S.

PNM / TNMPQ4 2018 

vs. Q4 2017

2018vs. 2017

2018E 2019E

PNM Residential & Commercial 1.3% 0.7% ~0.3% 0.3% ‐ 0.5%Total PNM Retail Load 1.3% 0.6% 0% – 0.5% 0.3% – 1.0%PNM Avg. Customers 0.9% 0.8% 0.8% ‐ 1.0% per year

TNMP Total Volumetric Load(1) 3.5% 3.2% 2% – 3% per yearTNMP Demand‐Based Load(2) 7.8% 6.8% 5% – 7% 6% – 8%TNMP Avg. End Users 1.3% 1.3% 1.5% – 2.0% per year

Monthly Employment Growth(3)

2018 vs. 2017 Abq. U.S.January 1.2% 1.4%February 1.6% 1.5%March 1.3% 1.6%April 1.3% 1.6%May 1.3% 1.7%June 1.3% 1.6%July 2.1% 1.6%August 2.1% 1.7%September 2.5% 1.7%October 2.6% 1.7%November 2.4% 1.7%December 2.6% 1.8%

Consolidated Earnings Guidance (Ongoing)

9

2019 Previous CurrentConsolidated EPS $2.08 ‐ $2.18 $2.10 ‐ $2.18

PNM $1.59 ‐ $1.65 $1.61 ‐ $1.65

TNMP $0.67 ‐ $0.69 $0.67 ‐ $0.69

Corporate/Other ($0.18) – ($0.16) ($0.18) – ($0.16)

2019 Earnings Guidance

$2.10          Consolidated EPS           $2.18

PNM$1.61 – $1.65

TNMP$0.67 – $0.69

Corp/Other($0.18) – ($0.16)

$245  $245  $245  $245 

$125  $180  $175  $141 $98 

$97  $79  $82 $61 $49  $79 $27  $25 

$20  $20 

$32  $29 

$350 

$100 

2019 2020 2021 2022TNMP PNM T&D PNM Existing GenerationPNM Renewable Additions PNM Transmission Expansion Corporate/Other50% NMRD Renewable Additions Depreciation

$637Total: $588

Total: $869

$655

Subtotal: $519

10

$2.3B investment plan plus incremental growth opportunities

2019 – 2022 Investment Plan

Amounts may not visually add due to rounding(1) Depreciation does not include amounts associated with NMRD

(1)

Targeted 2018‐2022 Rate Base CAGR (2018 base): Total 7.1%‐9.0% / PNM 3.6%‐6.4% / TNMP 16.2%  Range at PNM reflects potential outcomes from the pending NM Supreme Court general rate review appeal of $0‐$150M and potential growth opportunities

Incremental growth opportunities

Subtotal: $488

Incremental growth opportunities (previously $950M)• $255M moved into T&D capital at PNM and TNMP • $450M supports new transmission and replacement power• $245M awaiting future capital prioritization

2019 ‐ 2022 Potential Earnings Power

11This table is not intended to represent a forward‐looking projection of 2020 ‐ 2022 earnings guidance.  

Refer to Slide 20 for additional details and disclosures. 

Allowed Return / 

Equity Ratio

2019 Ongoing Earnings Guidance Midpoint

2020 Earnings Potential

2021 Earnings Potential

2022 Earnings Potential

Avg Rate  Base Return EPS Avg Rate 

Base EPS Avg Rate Base EPS Avg Rate 

Base EPS

PNM Retail 9.575% / 50% $2.4 B 9.3% $1.41 $2.4 B $1.44 $2.5 B $1.52 $2.5 B $1.47PNM Renewables 9.575% / 50% $115 M 9.575% $0.07 $150 M $0.09 $145 M $0.09 $140 M $0.08PNM FERC 10% / ~50% $285 M 8.0% $0.14 $340 M $0.15‐$0.20 $390 M $0.17‐$0.22 $470 M $0.21‐$0.26Items not in Rates $0.01 ($0.04)‐($0.02) ($0.04)‐($0.02) ($0.04)‐($0.02)

Total PNM $2.7 B $1.63 $2.9 B $1.64‐$1.71 $3.1 B $1.74‐$1.81 $3.1 B $1.72‐$1.79TNMP 9.65% / 45% $1.1 B 9.65% $0.68 $1.3 B $0.73 $1.4 B $0.80 $1.6 B $0.84Corporate/Other ($0.17) ($0.18)‐($0.16) ($0.20)‐($0.18) ($0.22)‐($0.20)ATM Program ($0.02)‐($0.01) ($0.04)‐($0.03) ($0.06)‐($0.04)Subtotal Base PNM Resources  $3.8 B $2.14 $4.1 B $2.17 ‐ $2.27 $4.5 B $2.30 ‐ $2.40 $4.6 B $2.28 ‐ $2.39Incremental items:Supreme Court Appeal up to $150M $0.09 $150M $0.09 $150M $0.09 $150M $0.09Growth Opportunities up to $175M $0.10 $400M $0.24Growth Financing up to ($0.03) ($0.03)Total PNM Resources  up to $3.9 B $2.23 $4.3 B $2.36 $4.8 B $2.56 $5.2 B $2.69

Earnings Growth Target: 5 ‐ 6% • Base plan increases as capital opportunities are realized to support 

growth at PNM and TNMP • Planned San Juan retirement reduces 2022 PNM Retail average rate base• $450M of incremental growth opportunities to be financed with $320M 

of securitization proceeds and $130M of debt and equity 

Note: 2018‐2022 CAGR measured from 2018 Ongoing EPS of $2.00

Questions and Answers

AppendixQ4 and FY 2018 Earnings

Q4 2018 vs Q4 2017 EPS (Ongoing): PNM

$0.16

$0.10

Q4 2017 Q4 2018

14

PNMQ4 2018 Key Performance Drivers ∆ EPS

Outage Costs $0.05

Weather $0.04

Interest expense savings $0.03

Retail load $0.01

Transmission margin $0.01

O&M increases ($0.05)

Decommissioning/reclamation trust income, net of fees ($0.05)

Depreciation and property tax ($0.03)Retail rate phase‐in, including changes in tax rates and retail generation portfolio changes approved in BART settlement ($0.02)

San Juan unregulated 65MW ($0.02)

FERC Generation Navopache contract ($0.01)

Other ($0.02)

Q4 2018 vs Q4 2017 EPS (Ongoing): TNMP and Corporate

15

$0.11 $0.14

Q4 2017 Q4 2018

TNMPQ4 2018 Key Performance Drivers ∆ EPS

Load $0.02

O&M decreases $0.01

Other (TCOS rate relief, AFUDC) $0.01

Other (weather, depreciation and property tax) ($0.01)

($0.03) ($0.06)

Q4 2017 Q4 2018

Corporate

Q4 2018 Key Performance Drivers ∆ EPS

Interest expense ($0.02)

Westmoreland loan agreements ($0.01)

2018 vs 2017 EPS (Ongoing): PNM

$1.48 $1.54

2017 2018

16

PNM2018 Key Performance Drivers ∆ EPS

Retail rate phase‐in, including changes in tax rates and retail generation portfolio changes approved in BART settlement $0.31

Transmission margin $0.11

Weather $0.10

Interest expense savings $0.06

Retail load $0.02

Decommissioning/reclamation trust income, net of fees ($0.14)

O&M increases ($0.12)

Depreciation and property tax ($0.11)

San Juan unregulated 65MW ($0.06)

Outage costs ($0.05)

FERC Generation Navopache contract ($0.02)

AFUDC ($0.01)

Other ($0.03)

2018 vs 2017 EPS (Ongoing): TNMP and Corporate

17

$0.54 $0.65

2017 2018

TNMP2018 Key Performance Drivers ∆ EPS

Load $0.06TCOS rate relief $0.04AFUDC $0.03Weather $0.01Tax reform $0.01Other $0.01

Depreciation and property tax ($0.05)

($0.08) ($0.19)

2017 2018

Corporate2018 Key Performance Drivers ∆ EPS

Interest expense ($0.06)

Westmoreland loan agreements ($0.03)

Tax reform ($0.01)

Other ($0.01)

Weather Impact

18

PNM Q4 2018 Q4 2017 2018 Normal(1)

Heating Degree Days 1,005 608 861

Cooling Degree Days 18 16 13

Net EPS Impact compared to normal

$0.02 ($0.02)

TNMP Q4 2018 Q4 2017 2018 Normal(1)

Heating Degree Days 719 596 617

Cooling Degree Days 246 376 283

Net EPS Impact compared to normal

$0.00 $0.00(1) 2018 normal weather assumption reflects the 20‐year average for the period 1998 ‐ 2017. 

Ongoing Earnings Guidance

Potential Earnings Power

20

(1) Average rate base has been reduced by approximately $130M to represent the ($0.05) of Earnings Potential for the lost equity return on the Four Corners investment resulting from the               2018 general rate review settlement.  2022 rate base is reduced by $160M to reflect the projected average rate base retired at SJGS.

(2) PNM Renewables reflect assets collected through the Renewable Rate Rider.   (3) PNM FERC reflects a return of 7‐9% versus the allowed return of 10%, as FERC formula rate methodology uses prior year average rate base and provides for mid‐year rate increases. (4) Consists primarily of decommissioning/reclamation trust income (net of fees and taxes), AFUDC, certain incentive compensation, and the 65MW ownership of San Juan Unit 4.(5) TNMP reflects a 9.65% return and 45% equity ratio consistent with the filed general rate review settlement.  Earnings also include additional recovery for Competitive Transition Costs (fully 

recovered in 2020) and Energy Efficiency, along with items excluded from rates (primarily AFUDC).  Earnings also include debt savings beginning mid‐2019 from the refinancing of existing debt. (6) Corporate/Other includes earnings associated with short and intermediate term bank debt and 50% equity interest in NMRD.(7) Dilution impact assumes equity issuances up to $50M in 2020, $150M in 2021 and 2022.(8) Reflects a range of outcomes for the New Mexico Supreme Court appeal of the August 2015 General Rate Review final order. A minimum 31‐month appeal timeframe has been used for 

purposes of writing down the value of the assets under appeal. 2019 average rate base presented includes: PV2 64MW Acquisition Adjustment (~$75M), PV2 Leasehold Improvements (~$25M) and Balanced Draft Technology (~$50M).  

(9) Reflects $450M incremental capital opportunities shown on Slide 9.(9) Reflects $320M of securitization proceeds and $130M of debt and equity financing to maintain investment grade credit ratings.

This table is not intended to represent a forward‐looking projection of 2020 ‐ 2022 earnings guidance. 

Allowed Return / 

Equity Ratio

2019 Ongoing Earnings Guidance Midpoint

2020 Earnings Potential

2021 Earnings Potential

2022 Earnings Potential

Avg Rate  Base Return EPS Avg Rate 

Base EPS Avg Rate Base EPS Avg Rate 

Base EPS

PNM Retail(1) 9.575% / 50% $2.4 B 9.3% $1.41 $2.4 B $1.44 $2.5 B $1.52 $2.5 B $1.47PNM Renewables(2) 9.575% / 50% $115 M 9.575% $0.07 $150 M $0.09 $145 M $0.09 $140 M $0.08PNM FERC(3) 10% / ~50% $285 M 8.0% $0.14 $340 M $0.15‐$0.20 $390 M $0.17‐$0.22 $470 M $0.21‐$0.26Items not in Rates(4) $0.01 ($0.04)‐($0.02) ($0.04)‐($0.02) ($0.04)‐($0.02)

Total PNM $2.7 B $1.63 $2.9 B $1.64‐$1.71 $3.1 B $1.74‐$1.81 $3.1 B $1.72‐$1.79TNMP(5) 9.65% / 45% $1.1 B 9.65% $0.68 $1.3 B $0.73 $1.4 B $0.80 $1.6 B $0.84Corporate/Other(6) ($0.17) ($0.18)‐($0.16) ($0.20)‐($0.18) ($0.22)‐($0.20)ATM Program(7) ($0.02)‐($0.01) ($0.04)‐($0.03) ($0.06)‐($0.04)Subtotal Base PNM Resources  $3.8 B $2.14 $4.1 B $2.17 ‐ $2.27 $4.5 B $2.30 ‐ $2.40 $4.6 B $2.28 ‐ $2.39Incremental items:Supreme Court Appeal(8) up to $150M $0.09 $150M $0.09 $150M $0.09 $150M $0.09Growth Opportunities(9) up to $175M $0.10 $400M $0.24

Growth Financing(10) up to ($0.03) ($0.03)

Total PNM Resources  up to $3.9 B $2.23 $4.3 B $2.36 $4.8 B $2.56 $5.2 B $2.69

$1.48  $1.54 

2017 2018 2019E

PNM Guidance (Ongoing)

21

PNM Ongoing EPS$1.61 ‐ $1.65

Key Year‐over‐Year EPS Performance Drivers 2018 vs 2019Changes

Retail rate phase‐in (includes federal and accelerated state tax amortization)(1) $0.07Retail load $0.03 – $0.05Weather ($0.07 in 2018, $0.02 estimated in 2019) ($0.05)Transmission margin $0.00 – $0.02Renewable rider, including tax reform impacts $0.02AFUDC $0.00 – $0.01Interest expense savings $0.03 – $0.04Outage costs ($0.03) – ($0.02)San Juan unregulated 65MW ($0.01)Decommissioning/reclamation trust income, net of fees $0.02 – $0.04O&M decreases $0.02 – $0.04Depreciation and property tax ($0.08) – ($0.06)

(1) See slide 22 for details

PNM Guidance (Ongoing) Additional Details

22

Financial impact under retail rate phase‐in (includes federal and accelerated state tax amortization)

Phase I –February 1, 2018

Phase II –January 1, 2019

(in millions, except EPS)

Revenue increase (net of tax reform give‐back) $4.7  $10.3 Accelerated amortization of excess deferred state taxes(1) 6.9 7.5

Financial impact $11.6 $17.8 Income tax (25.4% statutory rate) (2.9) (4.5)Amortization of excess deferred federal income taxes 11.8 12.9After‐tax financial impact $20.5 $26.2EPS (80M shares outstanding) $0.26  $0.33 

(1) New Mexico phased‐in a lower state corporate income tax rate from 2014 – 2018.  Under the PNM 2018 General Rate Review order, PNM will begin the return of this benefit through customer rates in 2018, over a 3 year period.  This also lowers PNM’s income tax expense in 2018, 2019, and 2020.  

TNMP Guidance (Ongoing)

23

$0.54 $0.65 $0.67 – $0.69

2017 2018 2019E

TNMP Ongoing EPS

Key Year‐over‐Year EPS Performance Drivers 2018 vs 2019Changes

Rate relief, including TCOS $0.07Load $0.05 – $0.062018 weather (0.01)O&M increases ($0.02) – $0.01Interest expense savings $0.02 – $0.03Depreciation and property tax ($0.10) – ($0.09)

Corporate and Other Guidance (Ongoing)

24

($0.08) ($0.19)

2017 2018 2019E

($0.18) – ($0.16)

Corporate and Other Ongoing EPS

Key Year‐over‐Year EPS Performance Drivers 2018 vs 2019Changes

Westmoreland loan agreement paydown ($0.01)

Interest expense ($0.01) – $0.00

O&M and Income tax expense decreases $0.02

EBITDA and Quarterly Earnings Distribution Guidance (Ongoing)

25

Ongoing EBITDA(In millions)

2019E MidpointConsolidated PNM Resources $577

PNM $376

TNMP $180

4%

30%56%

10%

Q1 Q2 Q3 Q4

2019 Quarterly Ongoing Earnings Distribution

2019 Assumptions

26

amounts shown are before tax 2019EPNM

Weather $2MResidential and Commercial Load 1% = $0.04Outage costs $19M – $21MDecommissioning/reclamation trust income, net of fees $11M – $15MAnticipated effective tax rate                                                       before amortization of excess deferred income taxes

24.6%

Amortization of excess deferred income taxes $21.6MTNMP

Weather $0 (normal)Volumetric Load 1% = $0.01Anticipated effective tax rate                                                            before amortization of excess deferred income taxes

23.9%

Amortization of excess deferred income taxes $8.7MCorporate/Other

Anticipated effective tax rate 28.3%

Average PNM Resources diluted shares outstanding 79.9M

PNM Scheduled Plant Outages

27

San Juan

Unit Duration in Days

Time Period

4 44 Q1‐Q2 2019

Palo Verde

Unit Duration in Days

Time Period

1 30 Q2 2019

3 44 Q4 2019

Four Corners

Unit Duration in Days

Time Period

4 21 Q1 2019

5 21 Q1 2019

Balance Sheet and Credit Metrics

Liquidity as of February 22, 2019

29

PNM TNMP

PNMR

PNM Resources 

Consolidated

PNMR Develop‐ment

Corporate/Other

Financing Capacity(1): (In millions)

Revolving credit facilities $440.0 $75.0 $25.0 $300.0 $840.0

As of 2/22/19:

Short‐term debt and LOCbalances  $12.5 $37.6 $10.9 $50.0 $111.0

Remaining availability 427.5 37.4 14.1 250.0 729.0

Invested cash 18.1 ‐ ‐ 0.9 19.0

Total Available Liquidity $445.6 $37.4 $14.1 $250.9 $748.0(1) Excludes intercompany debt and term loans

Selected Balance Sheet Information

30

(1) Net of unamortized debt issuance costs, premiums and discounts(2) Excludes intercompany debtAmounts may not add due to rounding

(In millions) Dec 31, 2017 Dec 31, 2018

Long‐Term Debt (incl. current portion) (1)

PNM $1,657.9 $1,656.5

TNMP         480.6 575.4

Corporate/Other 299.1 438.2

Consolidated $2,437.6 $2,670.1

Total Debt (incl. short‐term) (2)

PNM $1,697.7 $1,698.9

TNMP 480.6 592.9

Corporate/Other 564.7 614.2

Consolidated $2,743.0 $2,906.0

Credit Ratings

31

PNMR Consolidated S&P Moody’s

Issuer rating BBB+ Baa3

Outlook Negative Stable

Senior unsecured rating BBB Baa3

PNM S&P Moody’s

Issuer rating BBB+ Baa2

Outlook Negative Stable

Senior unsecured rating BBB+ Baa2

TNMP S&P Moody’s

Issuer rating BBB+ A3

Issuer outlook Negative Stable

Senior secured rating A A1