8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported)	August 2, 2019
	(August 2, 2019)

Commission	Name of Registrants, State of Incorporation,	I.R.S. Employer
File Number	Address Of Principal Executive Offices and Telephone Number	Identification No.

001-32462    PNM Resources, Inc.                                                                                        85-0468296

(A New Mexico Corporation)

414 Silver Ave. SW

Albuquerque, New Mexico 87102-3289

(505) 241-2700

001-06986    Public Service Company of New Mexico                                                        85-0019030

(A New Mexico Corporation)

414 Silver Ave. SW

Albuquerque, New Mexico 87102-3289

(505) 241-2700

002-97230    Texas-New Mexico Power Company                                                                75-0204070

(A Texas Corporation)

577 N. Garden Ridge Blvd.

Lewisville, Texas 75067

(972) 420-4189

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 40.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 40.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Registrant	Title of each class	Trading Symbol(s)	Name of exchange on which registered
PNM Resources, Inc.	Common Stock, no par value	PNM	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02Results of Operations and Financial Condition.

On August 2, 2019, PNM Resources, Inc., Public Service Company of New Mexico, and Texas-New Mexico Power Company (collectively, the “Company”) issued a press release announcing results of operations for the three and six months ended June 30, 2019. The press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein.

The Company's press release and other communications from time to time may include certain financial measures that are not determined in accordance with generally accepted accounting principles in the United States of America ("GAAP"). A “non-GAAP financial measure” is defined as a numerical measure of a company's financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the company's financial statements.

Non-GAAP financial measures utilized by the Company include presentations, on an ongoing basis, of revenues, operating expenses, operating income, other income and deductions, earnings, and earnings per share. The Company uses ongoing earnings and ongoing earnings per diluted share (or ongoing diluted earnings per share) to evaluate the operations of the Company and to establish goals, including those used for certain aspects of incentive compensation, for management and employees. Certain non-GAAP financial measures utilized by the Company exclude the impact of net unrealized mark-to-market gains and losses on economic hedges, the net change in unrealized gains and losses on investment securities, pension expense related to previously disposed of gas distribution business, and certain non-recurring, infrequent, and other items. The Company's management believes that these non-GAAP financial measures provide useful information to investors by removing the effect of variances in GAAP reported results of operations that are not indicative of fundamental changes in the earnings capacity of the Company's operations. Management also believes that the presentation of the non-GAAP financial measures is largely consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare current non-GAAP measures with non-GAAP measures with respect to prior periods.

The non-GAAP financial measures used by the Company should not be considered in isolation from or as a substitute for measures of performance prepared in accordance with GAAP.

The Company uses ongoing earnings guidance to provide investors with management's expectations of ongoing financial performance over the period presented. While the Company believes ongoing earnings guidance is an appropriate measure, it is not a measure presented in accordance with GAAP. The Company does not intend for ongoing earnings guidance to represent an expectation of net earnings as defined by GAAP. Since the future differences between GAAP and ongoing earnings are frequently outside the control of the Company, management is generally not able to estimate the impact of the reconciling items between forecasted GAAP earnings and ongoing earnings guidance, nor their probable impact on GAAP earnings without unreasonable effort; therefore, management is generally not able to provide a corresponding GAAP equivalent for forecasted ongoing earnings guidance. Reconciling items may include revenues and expenses resulting from transactions that do not occur in the normal course of the Company's business operations, as well as net unrealized mark-to-market gains and losses on economic hedges, the net change in unrealized gains and losses on investment securities, and pension expense related to previously disposed of gas distribution business as discussed above.

Limitation on Incorporation by Reference

In accordance with general instruction B.2 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section and not deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits:

Exhibit NumberDescription

99.1        Press Release dated August 2, 2019.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

	PNM RESOURCES, INC.
	PUBLIC SERVICE COMPANY OF NEW MEXICO
	TEXAS-NEW MEXICO POWER COMPANY
	(Registrants)
Date: August 2, 2019	/s/ Joseph D. Tarry
	Joseph D. Tarry
	Vice President, Controller and Treasurer
	(Officer duly authorized to sign this report)

EX-99.1

Exhibit 99.1

For Immediate Release

August 2, 2019

PNM Resources Reports Second Quarter Results

2019 Ongoing Earnings Guidance Affirmed, Conference call set for 11 a.m. Eastern today

PNM Resources (In millions, except EPS)

	Q2 2019	Q2 2018	YTD 2019	YTD 2018
GAAP net earnings (loss) attributable to PNM Resources	($75.9)	$38.2	($57.2)	$53.2
GAAP diluted EPS	($0.95)	$0.48	($0.72)	$0.67
Ongoing net earnings	$29.3	$42.3	$40.0	$58.8
Ongoing diluted EPS	$0.37	$0.53	$0.50	$0.73

(ALBUQUERQUE, N.M.)–PNM Resources (NYSE: PNM) today released the company’s 2019 second quarter results. In addition, management affirmed its 2019 consolidated ongoing earnings guidance of $2.05 to $2.11 per diluted share.

“Temperatures, and financial results, during the quarter reflected New Mexico’s mildest second quarter in 20 years,” said Pat Vincent-Collawn, PNM Resources’ chairman, president and CEO. “On July 1, PNM took its next step toward meeting its goal of 100 percent emissions-free energy by 2040 by filing for the abandonment, securitization and replacement of the San Juan Generating Station. We look forward to working with our stakeholders to implement a plan that achieves sizable emission reductions, saves customers money and meets reliability standards.”

SEGMENT REPORTING OF 2019 SECOND QUARTER EARNINGS

PNM– a vertically integrated electric utility in New Mexico with distribution, transmission and generation assets.

PNM (In millions, except EPS)

	Q2 2019	Q2 2018	YTD 2019	YTD 2018
GAAP net earnings (loss) attributable to PNM Resources	($86.9)	$26.5	($67.9)	$34.2
GAAP diluted EPS	($1.09)	$0.33	($0.85)	$0.43
Ongoing net earnings	$18.1	$30.8	$29.2	$39.9
Ongoing diluted EPS	$0.23	$0.38	$0.37	$0.49

• GAAP earnings during the second quarter of 2019 included the $104 million after tax write-off of assets previously under appeal with the New Mexico Supreme Court following the order confirming disallowance of these assets from retail rate base.

(MORE)

PNM Resources Reports Q2 Earnings            8-2-19                         p. 2 of 4

• Significantly milder temperatures in the second quarter of 2019 compared to higher than normal temperatures in the second quarter of 2018 resulted in lower retail load and additional revenue impacts, including lower than expected impacts of the second phase of revised retail rates implemented in January 2019 resulting from the timing of amortized excess deferred income taxes.

• Earnings were also impacted in the second quarter of 2019 by expected higher plant outage costs,lower transmission margins, and additional depreciation and property tax expenses related to new capital investments. These impacts were offset by the refinancing of debt in 2018 at lower interest rates and higher decommissioning and reclamation trust gains.

TNMP – an electric transmission and distribution utility in Texas.

TNMP (In millions, except EPS)

	Q2 2019	Q2 2018	YTD 2019	YTD 2018
GAAP net earnings attributable to PNM Resources	$15.3	$15.4	$19.4	$24.8
GAAP diluted EPS	$0.19	$0.19	$0.24	$0.31
Ongoing net earnings	$15.4	$15.4	$19.5	$24.8
Ongoing diluted EPS	$0.19	$0.19	$0.24	$0.31

• TNMP’s GAAP and ongoing earnings increased in the second quarter of 2019 due to the combined implementation of new base rates approved in December 2018 and a Transmission Cost of Service (TCOS) rate increase in March 2019.

• These increases were offset by higher depreciation and property tax expenses resulting from additional capital investments and lower customer usage from milder temperatures.

Corporate and Other – a segment that reflects the PNM Resources holding company and other subsidiaries.

Corporate and Other (In millions, except EPS)

	Q2 2019	Q2 2018	YTD 2019	YTD 2018
GAAP net earnings (loss) attributable to PNM Resources	($4.2)	($3.7)	($8.6)	($5.8)
GAAP diluted EPS	($0.05)	($0.04)	($0.11)	($0.07)
Ongoing net earnings (loss)	($4.2)	($3.9)	($8.6)	($5.9)
Ongoing diluted EPS	($0.05)	($0.04)	($0.11)	($0.07)

• Corporate and Other’s GAAP and ongoing losses increased in the second quarter of 2019 due to a lower effective tax rate.

Financial materials are available at http://www.pnmresources.com/investors/results.cfm.

(MORE)

PNM Resources Reports Q2 Earnings            8-2-19                         p. 3 of 4

SECOND QUARTER CONFERENCE CALL: 11 A.M. EASTERN FRIDAY, AUGUST 2

PNM Resources will discuss second quarter earnings results during a live conference call and webcast on Friday, August 2^nd at 11 a.m. Eastern. Speaking on the call will be Pat Vincent-Collawn, PNM Resources chairman, president and CEO, and Chuck Eldred, PNM Resources executive vice president and CFO.

A live webcast of the call will be archived at http://www.pnmresources.com/investors/events.cfm.

Listeners are encouraged to visit the website at least 30 minutes before the event to register, download and install any necessary audio software.

Investors and analysts can participate in the live conference call by pre-registering using the following link to receive a special dial-in number and PIN: http://dpregister.com/10133531. Telephone participants who are unable to pre-register may participate in the live conference call by dialing (877) 276-8648 or (412) 317-5474 fifteen minutes prior to the event and referencing “the PNM Resources second quarter conference call”.

Supporting material for PNM Resources’ earnings announcements can be viewed and downloaded at http://www.pnmresources.com/investors/results.cfm.

Background:

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2018 consolidated operating revenues of $1.4 billion. Through its regulated utilities, PNM and TNMP, PNM Resources has approximately 2,681 megawatts of generation capacity and provides electricity to more than 781,000 homes and businesses in New Mexico and Texas. For more information, visit the company's website at www.PNMResources.com.

CONTACTS:

AnalystsMedia

Lisa GoodmanRay Sandoval

(505) 241-2160(505) 241-2782

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Statements made in this news release 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 Form 10-Q filings with the Securities and Exchange Commission, which factors are specifically incorporated by reference herein.

(MORE)

PNM Resources Reports Q2 Earnings            8-2-19                         p. 4 of 4

Non-GAAP Financial Measures

GAAP refers to generally accepted accounting principles in the U.S. Ongoing earnings is a non-GAAP financial measure that excludes the impact of net unrealized mark-to-market gains and losses on economic hedges, the net change in unrealized gains and losses on investment securities, pension expense related to previously disposed of gas distribution business, and certain non-recurring, infrequent, and other items that are not indicative of fundamental changes in the earnings capacity of the Company's operations. The Company uses ongoing earnings and ongoing earnings per diluted share (or ongoing diluted earnings per share) to evaluate the operations of the Company and to establish goals, including those used for certain aspects of incentive compensation, for management and employees. While the Company believes these financial measures are appropriate and useful for investors, they are not measures presented in accordance with GAAP. The Company does not intend for these measures, or any piece of these measures, to represent any financial measure as defined by GAAP. Furthermore, the Company’s calculations of these measures as presented may or may not be comparable to similarly titled measures used by other companies. The Company uses ongoing earnings guidance to provide investors with management's expectations of ongoing financial performance over the period presented. While the Company believes ongoing earnings guidance is an appropriate measure, it is not a measure presented in accordance with GAAP. The Company does not intend for ongoing earnings guidance to represent an expectation of net earnings as defined by GAAP. Since the future differences between GAAP and ongoing earnings are frequently outside the control of the Company, management is generally not able to estimate the impact of the reconciling items between forecasted GAAP net earnings and ongoing earnings guidance, nor their probable impact on GAAP net earnings without unreasonable effort, therefore, management is generally not able to provide a corresponding GAAP equivalent for ongoing earnings guidance. Reconciliations between GAAP and ongoing earnings are contained in schedules 1-5.

(END)

PNM Resources, Inc. and Subsidiaries

Schedule 1

Reconciliation of GAAP to Ongoing Earnings

(Preliminary and Unaudited)

	PNM			TNMP			Corporate and Other			PNMR Consolidated
	(in thousands)
Three Months Ended June 30, 2019
GAAP Net Earnings (Loss) Attributable to PNMR	$	(86,944	)	$	15,267		$	(4,237	)	$	(75,914	)
Adjusting items before income tax effects:
Mark-to-market impact of economic hedges2a	(28		)	—			—			(28		)
Net change in unrealized gains and losses on investment securities2b	504			—			—			504
Regulatory disallowances and restructuring costs2c	149,254			—			—			149,254
Pension expense related to previously disposed of gas distribution business2d	1,044			—			—			1,044
Process improvement initiatives2e	410			135			—			545
Four Corners coal mine reclamation2f	(284		)	—			—			(284		)
Total adjustments before income tax effects	150,900			135			—			151,035
Income tax impact of above adjustments1	(38,329		)	(28		)	—			(38,357		)
Deferred income tax impact of regulatory disallowances	(7,485		)	—			—			(7,485		)
Total income tax impacts3	(45,814		)	(28		)	—			(45,842		)
Adjusting items, net of income taxes	105,086			107			—			105,193
Ongoing Earnings (Loss)	$	18,142		$	15,374		$	(4,237	)	$	29,279
Six Months Ended June 30, 2019
GAAP Net Earnings (Loss) Attributable to PNMR	$	(67,932	)	$	19,365		$	(8,647	)	$	(57,214	)
Adjusting items before income tax effects:
Mark-to-market impact of economic hedges2a	(56		)	—			—			(56		)
Net change in unrealized gains and losses on investment securities2b	(12,490		)	—			—			(12,490		)
Regulatory disallowances and restructuring costs2c	150,599			—			—			150,599
Pension expense related to previously disposed of gas distribution business2d	2,089			—			—			2,089
Process improvement initiatives2e	410			135			—			545
Four Corners coal mine reclamation2f	(284		)	—			—			(284		)
Total adjustments before income tax effects	140,268			135			—			140,403
Income tax impact of above adjustments1	(35,628		)	(28		)	—			(35,656		)
Deferred income tax impact of regulatory disallowances	(7,485		)	—			—			(7,485		)
Total income tax impacts3	(43,113		)	(28		)	—			(43,141		)
Adjusting items, net of income taxes	97,155			107			—			97,262
Ongoing Earnings (Loss)	$	29,223		$	19,472		$	(8,647	)	$	40,048
1 2019 income tax effects calculated using a tax rate of 25.40% for PNM and 21% for TNMP
2 The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Condensed Consolidated Statements of Earnings as follows:
a (Reductions) in "Electric Operating Revenues" and "Cost of energy" of $235 and $263 in the three months ended June 30, 2019 and $480 and $536 in the six months ended June 30, 2019
b (Increases) decreases in "Gains and losses on investment securities"
c Increases in "Regulatory disallowances and restructuring costs"
d Increases in "Other (deductions)"
e Increases in "Administrative and general"
f (Decreases) in "Cost of energy"
3 Income tax impacts reflected in "Income Taxes"

PNM Resources, Inc. and Subsidiaries

Schedule 2

Reconciliation of GAAP to Ongoing Earnings

(Preliminary and Unaudited)

	PNM			TNMP		Corporate and Other			PNMR Consolidated
	(in thousands)
Three Months Ended June 30, 2018
GAAP Net Earnings (Loss) Attributable to PNMR	$	26,540		$	15,367	$	(3,699	)	$	38,208
Adjusting items before income tax effects:
Mark-to-market impact of economic hedges2a	(28		)	—		—			(28		)
Net change in unrealized gains and losses on investment securities2b	3,027			—		—			3,027
Regulatory disallowances and restructuring costs2c	1,794			—		—			1,794
Pension expense related to previously disposed of gas distribution business2d	869			—		—			869
(Gain) related to previously disposed of activities2e	—			—		(216		)	(216		)
Total adjustments before income tax effects	5,662			—		(216		)	5,446
Income tax impact of above adjustments1,3	(1,438		)	—		55			(1,383		)
Adjusting items, net of income taxes	4,224			—		(161		)	4,063
Ongoing Earnings (Loss)	$	30,764		$	15,367	$	(3,860	)	$	42,271
Six Months Ended June 30, 2018
GAAP Net Earnings (Loss) Attributable to PNMR	$	34,246		$	24,779	$	(5,827	)	$	53,198
Adjusting items before income tax effects:
Mark-to-market impact of economic hedges2a	(56		)	—		—			(56		)
Net change in unrealized gains and losses on investment securities2b	4,083			—		—			4,083
Regulatory disallowances and restructuring costs2c	1,794			—		—			1,794
Pension expense related to previously disposed of gas distribution business2d	1,701			—		—			1,701
(Gain) related to previously disposed of activities2e	—			—		(216		)	(216		)
Total adjustments before income tax effects	7,522			—		(216		)	7,306
Income tax impact of above adjustments1	(1,911		)	—		55			(1,856		)
Impairment of state tax credits	—			—		123			123
Total income tax impacts3	(1,911		)	—		178			(1,733		)
Adjusting items, net of income taxes	5,611			—		(38		)	5,573
Ongoing Earnings (Loss)	$	39,857		$	24,779	$	(5,865	)	$	58,771
1 2018 income tax effects calculated using a tax rate of 25.40%
2 The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Condensed Consolidated Statement of Earnings as follows:
a (Reductions) in "Electric Operating Revenues" and "Cost of energy" of $264 and $292 in the three months ended June 30, 2018 and $545 and $601 in the six months ended June 30, 2018
b (Increases) decreases in "Gains and losses on investment securities"
c Increases in "Regulatory disallowances and restructuring costs"
d Increases in "Other (deductions)"
e (Increases) in "Other income"
3 Income tax impacts reflected in "Income Taxes"

PNM Resources, Inc. and Subsidiaries

Schedule 3

Reconciliation of GAAP to Ongoing Earnings Per Diluted Share

(Preliminary and Unaudited)

	PNM			TNMP		Corporate and Other			PNMR Consolidated
	(per diluted share)
Three Months Ended June 30, 2019
GAAP Net Earnings (Loss) Attributable to PNMR1	$	(1.09	)	$	0.19	$	(0.05	)	$	(0.95	)
Adjusting items, net of income tax effects:
Mark-to-market impact of economic hedges	—			—		—			—
Net change in unrealized gains and losses on investment securities	0.01			—		—			0.01
Regulatory disallowances and restructuring costs	1.39			—		—			1.39
Pension expense related to previously disposed of gas distribution business	0.01			—		—			0.01
Process improvement initiatives	—			—		—			—
Four Corners coal mine reclamation	—			—		—			—
Deferred income tax impact of regulatory disallowances	(0.09		)	—		—			(0.09		)
Total Adjustments	1.32			—		—			1.32
Ongoing Earnings (Loss)	$	0.23		$	0.19	$	(0.05	)	$	0.37
Average Basic and Diluted Shares Outstanding: 79,917,269
Six Months Ended June 30, 2019
GAAP Net Earnings (Loss) Attributable to PNMR1	$	(0.85	)	$	0.24	$	(0.11	)	$	(0.72	)
Adjusting items, net of income tax effects:
Mark-to-market impact of economic hedges	—			—		—			—
Net change in unrealized gains and losses on investment securities	(0.12		)	—		—			(0.12		)
Regulatory disallowances and restructuring costs	1.41			—		—			1.41
Pension expense related to previously disposed of gas distribution business	0.02			—		—			0.02
Process improvement initiatives	—			—		—			—
Four Corners coal mine reclamation	—			—		—			—
Deferred income tax impact of regulatory disallowances	(0.09		)	—		—			(0.09		)
Total Adjustments	1.22			—		—			1.22
Ongoing Earnings (Loss)	$	0.37		$	0.24	$	(0.11	)	$	0.50
Average Basic and Diluted Shares Outstanding: 79,904,858
1 EPS is presented on a non-diluted basis for the three and six months ended June 30, 2019 due to the consolidated GAAP net loss

PNM Resources, Inc. and Subsidiaries

Schedule 4

Reconciliation of GAAP to Ongoing Earnings Per Diluted Share

(Preliminary and Unaudited)

	PNM		TNMP		Corporate and Other			PNMR Consolidated
	(per diluted share)
Three Months Ended June 30, 2018
GAAP Net Earnings (Loss) Attributable to PNMR	$	0.33	$	0.19	$	(0.04	)	$	0.48
Adjusting items, net of income tax effects:
Mark-to-market impact of economic hedges	—		—		—			—
Net change in unrealized gains and losses on investment securities	0.03		—		—			0.03
Regulatory disallowances and restructuring costs	0.02		—		—			0.02
Pension expense related to previously disposed of gas distribution business	—		—		—			—
Total Adjustments	0.05		—		—			0.05
Ongoing Earnings (Loss)	$	0.38	$	0.19	$	(0.04	)	$	0.53
Average Diluted Shares Outstanding: 79,978,605
Six Months Ended June 30, 2018
GAAP Net Earnings (Loss) Attributable to PNMR:	$	0.43	$	0.31	$	(0.07	)	$	0.67
Adjusting items, net of income tax effects:
Mark-to-market impact of economic hedges	—		—		—			—
Net change in unrealized gains and losses on investment securities	0.03		—		—			0.03
Regulatory disallowances and restructuring costs	0.02		—		—			0.02
Pension expense related to previously disposed of gas distribution business	0.01		—		—			0.01
Impairment of state tax credits	—		—		—			—
Total Adjustments	0.06		—		—			0.06
Ongoing Earnings (Loss)	$	0.49	$	0.31	$	(0.07	)	$	0.73
Average Diluted Shares Outstanding: 79,995,926

PNM Resources, Inc. and Subsidiaries

Schedule 5

Condensed Consolidated Statements of Earnings

(Preliminary and Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(In thousands, except per share amounts)
Electric Operating Revenues:
Contracts with customers	$	314,917		$	338,659		$	630,614		$	642,010
Alternative revenue programs	5,844			5,660			6,480			6,584
Other electric operating revenue	9,467			7,994			42,778			21,597
Total electric operating revenues	330,228			352,313			679,872			670,191
Operating Expenses:
Cost of energy	83,782			87,711			205,408			180,267
Administrative and general	42,833			43,355			95,170			91,638
Energy production costs	42,905			41,888			77,977			77,238
Regulatory disallowances and restructuring costs	149,254			1,794			150,599			1,794
Depreciation and amortization	66,065			60,063			131,421			118,785
Transmission and distribution costs	19,195			18,450			35,872			35,406
Taxes other than income taxes	19,809			19,723			40,317			39,602
Total operating expenses	423,843			272,984			736,764			544,730
Operating income (loss)	(93,615		)	79,329			(56,892		)	125,461
Other Income and Deductions:
Interest income	3,460			4,339			7,048			8,462
Gains (losses) on investment securities	4,599			(1,670		)	18,613			(1,382		)
Other income	3,350			4,796			6,795			8,265
Other (deductions)	(3,117		)	(5,868		)	(6,369		)	(7,243		)
Net other income and deductions	8,292			1,597			26,087			8,102
Interest Charges	29,791			33,321			61,425			66,376
Earnings (Loss) before Income Taxes	(115,114		)	47,605			(92,230		)	67,187
Income Taxes (Benefits)	(42,831		)	5,156			(41,608		)	5,939
Net Earnings (Loss)	(72,283		)	42,449			(50,622		)	61,248
(Earnings) Attributable to Valencia Non-controlling Interest	(3,499		)	(4,109		)	(6,328		)	(7,786		)
Preferred Stock Dividend Requirements of Subsidiary	(132		)	(132		)	(264		)	(264		)
Net Earnings (Loss) Attributable to PNMR	$	(75,914	)	$	38,208		$	(57,214	)	$	53,198
Net Earnings (Loss) Attributable to PNMR per Common Share:
Basic	$	(0.95	)	$	0.48		$	(0.72	)	$	0.67
Diluted	$	(0.95	)	$	0.48		$	(0.72	)	$	0.67
Dividends Declared per Common Share	$	0.290		$	0.265		$	0.580		$	0.530