#1Investor Meetings August 2019 PNM@Resources Ⓡ PNM® TNMP#2Contact Information and Safe Harbor Statement Lisa Goodman Investor Relations Contact Information Jimmie Blotter, Assistant Treasurer Director, Investor Relations and Shareholder Services U.S. 1-505-241-2227 [email protected] Manager, Investor Relations U.S. 1-505-241-2160 [email protected] Safe Harbor Statement 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 Measures For 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. PNM@Resources 2#3Company Overview#4PNM Resources Overview PNM Resources is a regulated electric utility holding company focused on providing environmentally responsible, affordable and reliable electricity to customers and above industry average earnings and dividend growth to shareholders NYSE Ticker: PNM Market Cap: $4.1B Generation Resources and Service Territories San Juan Generating Station Four Corners Power Plant Red Mesa Wind Farm. Reeves Generating Station - Rio Bravo Generating Station Palo Verde Nuclear Generating Station La Luz Energy Center- Valencia Energy Facility New Mexico Wind Luna Energy Facility Lordsburg Generating Station Dale Burgett Geothermal Generating Station Afton Generating Station PNM Service Area TNMP Service Area Solar Photovoltaic Generation • All Other Generation Energy Center PNM M②Resources • Energy holding company • Based in Albuquerque, New Mexico PNM® • Located in New Mexico • 528,399 customers 15,158 miles transmission and distribution lines • 2,681 MW generation capacity TNMP . Located in Texas . 253,216 end-users • 9,408 miles transmission and distribution lines PNM②Resources 4#5PNM Resources Strategic Direction and Financial Goals Transform to Cleaner Energy Portfolio Meet Customer Expectations Provide Earnings and Dividend Growth • Plans to be coal-free by 2031 • Goal to be emissions-free by 2040 • Retire and replace coal-fired generation with cleaner energy portfolio • Invest to maintain system reliability Provide reliable, affordable energy while enhancing customer experience Integrate technologies and customer insights to new products and services • Enhance grid to facilitate evolving customer needs • Deliver earnings and dividend growth at or above industry-average • Earn allowed returns • Maintain investment grade credit ratings PNM②Resources 5#62019 Consolidated Ongoing Earnings Guidance PNM 2019 Earnings Guidance $2.05 Consolidated EPS $2.11 TNMP $1.59 - $1.62 $0.66 - $0.68 2019 Quarterly Ongoing EPS Distribution 18% 6% 59% 17% Corp/Other - ($0.20) – ($0.19) Q1 Q2 Q3 Q4 PNM②Resources 6#7Earnings Growth 2018-2023: Targeting 5 - 6% Ongoing EPS CAGR - 2014 2018: Achieved 7.6% Ongoing EPS CAGR 2014 - 2023: Reflects 6-7% Ongoing EPS CAGR 5-6% CAGR 2018-2023 --> 7.6% CAGR 2014-2018 $2.53 Target: $2.58-$2.69 $2.39 $2.20 $1.94 $2.00 $2.08 $1.64 $1.65 $1.49 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 I Actual Ongoing EPS I Midpoint Guidance / Earnings Potential PNM@Resources 7#8Dividend Growth Consistent Delivery of Dividend Growth At or Above Industry Average 9% CAGR 2013-2018 9% 9% 10% 10% 8% $0.80 Dec '14 $0.88 Dec' 15 $0.97 Dec '16 $1.06 Dec '17 $1.16 Dec '18 $0.74 Dec '13 Expect future dividend growth to mirror earnings growth (approximately 5-6%) Indicative annual dividend rate Expect dividend growth at or above industry average (~5%) in the future while targeting the middle of a 50% - 60% payout ratio range Next dividend review in December 2019 PNM@Resources 8#9(in millions) 2019-2023 Investment Plan $3.6B investment plan reflects $298M replacement power; $278M generation investment and $20M transmission investment $1,013 $26 $208 $699 $635 $27 $665 $22 $34 $20 $285 $30 $47 $571 $71 $44 $20 $88 $43 $59 $128 $88 $98 $79 $82 $137 $171 $169 $181 $201 $366 $342 $312 $271 $245 $256 $245 $245 $245 $245 TNMP 2019 PNM Existing Generation SJGS Replacement Power Depreciation (¹) 2020 2021 PNM T&D PNM Renewable Additions 50% NMRD Renewable Additions 2022 2023 PV Lease Purchases/Other Replacement Power (3) PNM Transmission Expansion (2) Corporate/Other Targeted 2018-2023 Rate Base CAGR (2018 base): Total 9.3% / PNM 6.6% / TNMP 16.2% (1) Depreciation does not include amounts associated with NMRD PNM Resour (2) Western Spirit acquisition of $285M in 2021 reflects assumed purchase price of $360M, net of $75M customer funding (3) For Palo Verde leases that expire in 2023, investment assumes either the purchase of the leases or replacement of the power through new resources ources 9#10• • 2019-2023 Potential Earnings Power Earnings Growth Target 5-6% Reflects recommended replacement power scenario, adds 2023 Partial year of San Juan rate base in 2022, no remaining rate base in 2023 Interim financing supports replacement power until securitization proceeds received mid-2022 Allowed 2019 Ongoing Earnings 2020 Earnings Potential 2021 Earnings Potential 2022 Earnings Potential 2023 Earnings Potential Return/ Guidance Midpoint Equity Avg Avg Avg Avg Ratio Avg Rate Return EPS Rate EPS Rate EPS Rate EPS Rate EPS Base Base Base Base Base PNM Retail San Juan 9.575%/ 50% 9.575% / $2.4 B 8.9% $1.37 $2.4 B $1.44 $2.5 B $1.52 $2.4 B $1.48 $2.4 B $1.48 $150 M $0.09 $280 M $0.17 Replacement (1) PNM Renewables PNM FERC 50% 9.575%/ 50% 10%/ ~50% $115 M 9.575% $0.07 $150 M $0.09 $145 M $0.09 $140 M $0.08 $130 M $0.07 $275 M 6.9% $0.12 $330 M Items not in Rates $0.04 Total PNM $2.7 B $1.60 $2.9 B $0.15-$0.20 $530 M ($0.04)-($0.02) $1.64-$1.71 TNMP 9.65% / 45% Corporate/Other $1.1 B 9.65% $0.67 $1.3 B ($0.19) Equity Financing Plans Total PNM Resources $3.8 B $2.08 $0.73 ($0.21)-($0.19) ($0.01)-$0.00 $4.1 B | $2.15 - $2.25 Note: 2018-2023 CAGR measured from 2018 Ongoing EPS of $2.00 (1) Assumes mid-year implementation This table is not intended to represent a forward-looking projection of 2020-2023 earnings guidance. Refer to Slide 17 for additional details and disclosures. $3.2 B $1.4 B $0.26-$0.30 $740 M ($0.03)-($0.01) $1.84-$1.90 $0.37-$0.42 $780 M $0.39-$0.44 ($0.03)-($0.01) ($0.03)-($0.01) $0.80 ($0.21)-($0.19) $3.4 B $1.6 B $1.99-$2.06 $3.6 B $2.08-$2.15 $0.84 $1.7 B $0.90 $4.6 B ($0.09)-($0.08) $2.34 - $2.43 | $4.9 B ($0.19) ($0.17) ($0.17) -($0.15) $2.47 - $2.58 ($0.23)-($0.21) ($0.17)-($0.15) $5.3 B $2.58 - $2.69 PNMResour R sources 10#11Generation Portfolio Transformation#12New Mexico Energy Policy Senate Bill 489 (Energy Transition Act): passed in 2019 legislative session and signed by New Mexico Governor Lujan Grisham; effective June 14, 2019 Renewable Portfolio Standards and Carbon-Free Goal • Current: 20% renewables by 2020 Proposed: ● 40% renewables by 2025 ● 50% renewables by 2030 ● 80% renewables by 2040 ● 100% carbon-free by 2045 2025 40% Renewables 2030 50% Renewables 2045 2040 80% Renewables . ● Securitization measure for abandonment of coal-fired generating facilities reduces customer bills Economic development funds provide needed financial assistance to workers and the communities impacted by retirement of coal-fired generating facilities PNM@Resources® 12 100% Carbon-Free#13● Exit from Coal Generation, Emission Reductions The shutdown of Units 2 and 3 at PNM San Juan Generating Station in December 2017 reduced CO2 emissions at this plant by 54% below 2005 levels The 2017 Integrated Resource Plan called for a complete exit from coal generation by the end of 2031 New Mexico's Energy Transaction Act, effective June 14, 2019, calls for 100% carbon-free energy by 2045 PNM has stated a goal to be 100% emissions-free by 2040 Reduction of MW Coal Capacity 22% reduction 983 80% reduction 762 100% 200 coal free 2005 2018 2023 2031 Emissions-Free PNM Generation* 2018 34% Emissions-Free 100% 2032 70% Emissions-Free Emissions-Free by 2040 *Includes PNM generation resources that are owned, leased or under purchase power agreements. Read more in our Climate Change Report at http://www.pnmresources.com/about-us/sustainability-portal.aspx PNMResources 13#14San Juan Generating Station Consolidated Application PNM filed a consolidated application for San Juan Generating Station on July 1, 2019: • Abandonment of remaining capacity in San Juan coal plant (Units 1 and 4) . . Securitization of approximately $361 million includes estimated undepreciated investment of $283 million Approval for replacement power; recommended scenario balances costs, the environment and reliability: Total MW San Juan location provides regional property COST RELIABILITY +280 MW tax benefit; ensures reliability while minimizing new battery technology risks ENVIRONMENT +350 MW +130 MW Competitively-bid solar contracts include one of the largest solar facilities in the nation One of the highest percentages of utility battery storage integration in the nation. Timing: NMPRC decision on abandonment and securitization expected by April 2020; decision on replacement power expected by October 2020 PNMResources 14#15Abandonment and Securitization Details Abandonment: Requests abandonment of San Juan coal plant after participation agreement and coal supply contracts end June 30, 2022 Securitization: Requests securitization treatment of approximately $361 million: undepreciated investment in San Juan Generating Station, $283 million for which proceeds are available to fund replacement power resources $29 million decommissioning and reclamation costs $20 million job training and severance costs $20 million economic development funds $9 million financing costs PNMResour ources® 15#16• • Recommended Replacement Power Scenario Details Competitive RFP processes resulted in a cost-effective mix of resources owned by PNM and third-party providers To manage the risks of integrating new battery storage technology, total storage capacity does not exceed 5% of peak load and the capacity at each location is limited to 40 MW 0 PNM Owned Resources 280 MW Gas Peaking Units at San Juan $191M investment in-service June 2022 40 MW Storage $50M investment in-service June 2022 30 MW Storage $37M investment in-service June 2022 Total 350 MW Third Party Resources 300 MW Solar PPA + 40 MW Storage ESA $20M transmission investment begins June 2022 50 MW Solar PPA + 20 MW Storage ESA begins Jan 2022 Total 410 MW Note: All potential replacement power scenarios incorporated 140 MW wind energy PPA included in June 3, 2019 RPS Filing PNMResources 16#17Replacement Power Scenarios Considered PNM Owned Resources PNM Capex Recommended Scenario 1 - Hybrid • 280 MW gas (1) • 70 MW battery Scenario 2 San Juan Location 476 MW gas (1) $331M $298M . • 350 MW solar Third Party Resources ⚫60 MW battery $4,732M (+$54M) Balancing Cost / Environment / Reliability: Incremental cost (NPV) $4,678M CO₂ emission reduction (2) Reliability Other 62% Managed risk, storage capacity ≤5% of energy usage, each battery location limited to 40 MW Partial San Juan property tax base (1) Designates resources located in the San Juan area school district (2) From 2005 levels in alignment with the Paris Agreement 59% Managed risk, storage capacity ≤5% of energy usage, each battery location limited to 40 MW Maximizes San Juan property tax base Scenario 3 No Fossil Fuel ⚫40 MW battery (1) • 110 MW battery $243M 500 MW solar • 260 MW battery $4,834M (+$156M) 65% Increased risk as higher % of system based on unproven battery technology Limited San Juan property tax base Scenario 4 All Renewable $37M ⚫1,059 MW wind • 975 MW solar $5,452M (+$774M) 67% Heightened reliability risks - does not meet federal reliability standards No San Juan property tax base PNM@Resources Note: A PPA for 140 MW of wind energy was requested separately in a June 1, 2019 RPS Filing and was incorporated into all contemplated scenarios 17#18Integration of Renewable Generation Integration of renewable generation requires T&D investment and addition of supporting backup capacity 2018 Renewable Portfolio By Capacity Growing Solar and Wind Capacity Based on Recommended San Juan Replacement Scenario (MW) 1,955 107 15m purchased geothermal mw owned solar 1306 mw purchased wind 101mW customer-owned solar By Energy 1,183,343mwh Wind 61% Door PNM Solar 22% 1,402 889 854 681 493 521 1,066 356 721 333 137 Geo 1% Thermal Customer 2018 2020 2025 2035 16% % Solar Solar Wind Note: Amounts stated are above and beyond the resources purchased to support the Facebook data center in New Mexico PNMResources 18#19Transmission and Renewable Expansion in New Mexico Third-party renewable development increases demand for transmission capacity across our system Santa Fe Rio Ranchol ⚫ Albuquerque Belen Las Vegas Clayton Broadview Grady El Cabo Cliff Silver City "Bayard Lordsburg "Deming Ruidoso Tularosa "Alamogordo New Mexico added wind capacity at a faster rate than any other state in 2017 1,682 MW installed capacity, 51% increase over 2016 El Cabo Wind Farm (298 MW) and Broadview Wind Facility (324 MW) added in 2017 • 1,251 MW under construction, including 220 MW Grady Wind Facility Source: American Wind Energy Association, Nov. 2018 PNM Service Area New Mexico ranks 2nd in US for solar potential and 6th for land-based wind potential PNM②Resources 19#20PNM#21PNM Load and Economic Conditions Regulated Retail Energy Sales and Customers (weather-normalized) Total PNM Retail Load guidance trended upwards throughout 2018 and Q1 2019 • Q2 2019 YTD 2019 2019 Guidance VS. VS. Q2 2018 YTD 2018 Residential & Commercial 0.3% -0.5% (1.6%) (0.6%) . Total Retail Load 0.5% -1.5% (1.3%) (0.1%) Avg. Customers 0.8% -1.0% 0.7% 0.8% 800 700 600 20-year average 500 400 300 200 100 0 2019 2007 2009 Q2 Cooling Degree Days (Albuquerque) 2015 2003 2005 2008 2004 2017 2016 2010 2001 2011 2014 2000 2002 2006 2013 2018 2012 In Q2, the PNM service territory experienced its mildest second quarter over the last 20 years, resulting in 37% lower cooling degree-days and lower expectations for second quarter ongoing earnings Quantifying the impact of extreme weather on load and revenues is challenging and is further complicated by seasonal, tiered and demand-based rates PNMResourc Resources 21#22NMPRC Commissioners and Districts Term District Name Party Ends NMPRC Districts and PNM Service Areas District 1 Cynthia Hall 2020(1) Democrat ° District 2 Jefferson Byrd 2022(1) Republican Farmington Rio Arriba Raton Taos Colfax San Juan District 3 Union Cleyton Valerie Espinoza, District 3 2020 Democrat Vice-Chairman District 4 McKinley Los Alamos Sandoval Mora Harding Gallup District 4 Theresa Becenti-Aguilar, Chairman Santa Fe Las Vegas Santa Fe San Miguel 2022(1) Democrat Cibola District 5 Stephen Fischmann 2022(1) Democrat Rio Rancho Albuquerque District 1 Quay Bernalillo Guadalupe Valencia Torrance Curry District 2 Clovis DeBaca (1) Eligible for re-election to a second four-year term 2019 Legislative Update - Appointed vs Elected: . • A Senate Joint Resolution was passed in the New Mexico legislature to include a state constitutional amendment on the ballot in the next general election (2020) to move to a 3-member, appointed Commission If the amendment is passed by a simple majority: • The legislature defines the nominating committee and the requirements for Commissioners • The terms for Commissioners elected in Districts 1 and 3 in 2020 will be for a two-year term ending in 2022; the terms for Commissioners in Districts 2, 4 and 5 already expire in 2021 • Three appointed Commissioners would begin terms January 1, 2023 Lordsburg Catron District 5 Silver City Grant Deming Hidalgo Luna Socorro Lincoln Ruidoso Roswell Chaves Sierra Alamogordo Doña Ana Las Cruces Otero Eddy Carlsbad PRC District 1 2 3 4 PNM Service Areas Roosevelt PNMResourc MR ources 22 Lea Hobbs 3-2015#23PNM Regulatory Agenda Filing PNM: Consolidated Application for San Juan (Abandonment, Securitization and Replacement) Appeal of 2015 General Rate Case to New Mexico Supreme Court BB2 Transmission Project Action PNM filed July 1, 2019; NMPRC bifurcated application on July 10, 2019 New Mexico Supreme Court issued opinion May 16, 2019 affirming NMPRC decision but denying the disallowance of future Palo Verde decommissioning costs; full order was remanded back to the NMPRC Final Order issued June 12, 2019 affirming CCN; ratemaking treatment deferred to next rate case PNM filed May 10, 2019 with the NMPRC and FERC for Western Spirit Transmission acquisition approval and FERC approval of incremental Line Solar Direct Program 2020 Renewable Plan 2018 Renewable Plan rate; FERC approved incremental rate July 9, 2019 and acquisition August 8, 2019 PNM filed May 31, 2019 for approval of voluntary renewable program expected to begin March 31, 2021 PNM filed June 3, 2019 New Mexico Supreme Court issued opinion August 8, 2019 affirming NMPRC approval Timing NMPRC decision on abandonment/ securitization expected by April 2020, decision on replacement power expected by October 2020 Docket No. 19-00018-UT 19-00195-UT No statutory timeline; oral arguments on remand held July 17, 2019 15-00261-UT S-1-SC-36115 N/A PNM requested NMPRC acquisition approval by November 6, 2019; FERC process defines 180 days for acquisition approval PNM requested NMPRC approval of 50MW PPA by November 2019 18-00243-UT 19-00129-UT ER19-1824-000 EC19-90-000 19-00158-UT NMPRC decision expected in Q1 2020 19-00159-UT 17-00129-UT N/A S-1-SC-36772 PNM Resour ources® 23#24• PNM New Mexico Supreme Court Appeal September 30, 2016: PNM filed Notice of Appeal with New Mexico Supreme Court May 16, 2019: New Mexico Supreme Court affirmed the disallowance on each of the items below, but did not affirm the disallowance of future Palo Verde Nuclear Decommission Costs Appealed Item Palo Verde Nuclear Generating Station: 64 MW Unit 2 capacity purchase and Units 1 and 2 lease extensions Leasehold Improvements related to previously leased 64MW capacity San Juan Generating Station: Conclusion Purchase and extension deemed imprudent Included in net book value of purchased 64MW capacity Resulting Impact Fair market value disallowed; future responsibility for decommissioning shifted to shareholders Leasehold improvements rate base disallowed Balanced Draft Air permit rejected and investment deemed imprudent Rate base disallowed Note: As of March 31, 2019, the asset value of the Palo Verde and balanced draft investments pending appeal with the New Mexico Supreme Court were reduced by $15.3 million pre-tax to reflect a minimum of 34 months disallowed recovery during appeal. The Supreme Court ruling results in a non- cash write-off for the remaining values of these assets during Q2 2019 totaling $104 million, comprised of $149 million pre-tax and $45 million of income tax impacts. PNMResources 24#25PNM Bills Remain Below National and Regional Averages Customer bill impacts of increased investments are mitigated by: Return of federal tax savings to customers • Load growth reduces per-customer cost of new investments Energy Imbalance Market and renewable investments result in lower costs for fuel Comparison of Average Residential Bills (1) Western Region Average Bills by Utility Arizona Public Service Co (AZ) Salt River Project (AZ) Imperial Irrigation District (CA) Entergy Texas Inc. (TX) Modesto Irrigation District (CA) Southwestern Electric Power Co (TX) PacifiCorp (CA) City of San Antonio - (TX) Nevada Power Co (NV) PacifiCorp (WA) Regional Average Bill Pacific Gas & Electric Co. (CA) PacifiCorp (OR) Tucson Electric Power Co (AZ) Southern California Edison Co (CA) Black Hills Power, Inc. d/b/a (WY) San Diego Gas & Electric Co (CA) Sacramento Municipal Util Dist (CA) Montana-Dakota Utilities Co (WY) Idaho Power Co (ID) US Average Bill Southwestern Public Svc Co (NM) Portland General Electric Co (OR) PacifiCorp (ID) Avista Corp (WA) City of Tacoma - (WA) Avista Corp (ID) PacifiCorp (WY) NorthWestern Energy LLC (MT) City of Colorado Springs (CO) LADWP (CA) El Paso Electric Co (TX) PNM 2019 (NM) - Proposed Montana-Dakota Utilities Co (MT) PacifiCorp (UT) El Paso Electric Co (NM) Public Svc Co of Colorado (CO) City of Seattle (WA) $68.11 $98.24 $77.15 - PNM 2019 - $140.90 $108.07 Current Regional Avg - Current US Avg $50 (1)PNM rates reflect rates approved in the 2018 General Rate Case. All others reflect U.S. Energy Information Administration's Residential Rate increases through August 2018. $100 PNM②Resources $150 25#26TNMP#27TNMP Load and Economic Conditions Regulated Retail Energy Sales and Customers (weather-normalized) Q2 2019 YTD 2019 • VS. YTD 2018 2019 Guidance VS. Q2 2018 Total Volumetric Load (1) 2% -3% (0.9%) Demand-Based Load (2) 6% - 8% 4.1% 3.7% Avg. End Users • 1.5% -2.0% 1.5% 1.5% TNMP Capital Spend by Region (committed projects) (1.3%) Oil and gas customer requests for new service trending ~33% higher than prior year levels; residential and small commercial requests also trending higher In Q2, TNMP revenues are lower partially due to a change in timing of load additions that are still expected in West Texas West Texas ~40% El Paso Amarillo North/Central TX ~25% • TNMP Service Area Dallas Austin Houston 50 San Antonio Gulf Coast ~35% (1) Primarily Residential usage; represents per-kWh billings TNMP Demand Texas ranks #1 in the US for total electricity production and wind energy production (1) ERCOT summer peak demand projected to grow by 17% over next 10 years (2) (1) Source: Energy Information Administration (EIA) (2) Source: ERCOT (2) Commercial and Industrial demand excluding Transmission customers; represents per-kW monthly peak billings PNM@Resources 27#28PUCT Commissioners and TNMP Regulatory Agenda PUCT Commissioners Name Term Began Term Ends Party DeAnn Walker (Chair) Sept. 2017 Aug. 2021 Republican Arthur D'Andrea Nov. 2017 Aug. 2023 Republican Shelly Botkin June 2018 Sept. 2019 Republican Commissioners are appointed by the Governor of Texas and confirmed by the Senate. TNMP Regulatory Agenda Filing Action Timing Docket No. General Rate Review Settlement approved December 2, 2018 Rates implemented January 2019 48401 TCOS Filing Filed January 25, 2019 Rates implemented March 21, 2019 49143 Rates expected to be implemented in TCOS Filing Filed July 23, 2019 49785 September 2019 PNM Resour sources 28#29TNMP General Rate Review Settlement • Settlement approved December 20, 2018 Rates implemented January 2019 Key Components of Approved Settlement Annual revenue increase $10.0M ROE (prior authorized 10.125%) 9.65% Capital structure 45% Equity (prior authorized 45% equity) Cost of debt 6.4% Increase to rate base $73M Return of excess deferred federal income taxes $11.0M PNM②Resources 29#30TNMP Rates Compare Favorably in Texas $60 Residential Total Wires Charge for 1,000 kWh Rates expected to be comparable to other IOUs after upcoming rate filings $50 New Rates¹ $40 Expected to File by Current rate filing pending Current rate filing pending Current rate filing pending Oct 2021 $30 $20 $10 $- Oncor TNMP Centerpoint AEP North AEP Central PNM Resources 30 Source: TDU tariffs for retail delivery service effective March 1, 2019 and PUCT Filings Interchange. 1 Rates effective January 2019#31Appendix#322019-2023 Potential Earnings Power 2019 Ongoing Earnings Allowed Guidance Midpoint 2020 Earnings Potential 2021 Earnings 2022 Earnings 2023 Earnings Potential Potential Potential Return/ Equity Ratio Avg Avg Avg Avg Avg Rate Base Return EPS Rate EPS Rate EPS Rate EPS Rate EPS Base Base Base Base 9.575%/ PNM Retail (1) $2.4 B 8.9% $1.37 $2.4 B $1.44 $2.5 B $1.52 $2.4 B $1.48 $2.4 B $1.48 50% San Juan Replacement (2) 9.575%/ 50% $150 M $0.09 $280 M $0.17 PNM Renewables (3) PNM FERC(4) 9.575%/ 50% 10%/ ~50% $115 M 9.575% $0.07 $150 M $0.09 $145 M $0.09 $140 M $0.08 $130 M $0.07 $275 M 6.9% $0.12 $330 M $0.15-$0.20 $530 M $0.26-$0.30 $740 M $0.37-$0.42 $780 M $0.39-$0.44 Items not in Rates (5) $0.04 ($0.04)-($0.02) Total PNM $2.7 B $1.60 TNMP(6) 9.65%/ 45% $1.1 B 9.65% $0.67 $2.9 B $1.3 B Corporate/Other (7) ($0.19) Equity Financing Plans (8) Total PNM Resources $3.8 B $2.08 $4.1 B ($0.03)-($0.01) $1.64-$1.71 $3.2 B $1.84-$1.90 $0.73 $1.4 B $0.80 ($0.21)-($0.19) ($0.21)-($0.19) ($0.01)-$0.00 ($0.09)-($0.08) $2.15 - $2.25 $4.6 B $2.34 - $2.43 ($0.03)-($0.01) $3.4 B $1.6 B ($0.03)-($0.01) $1.99-$2.06 $3.6 B $2.08-$2.15 $0.84 $1.7 B $0.90 ($0.19)-($0.17) ($0.23)-($0.21) ($0.17)-($0.15) ($0.17)-($0.15) $4.9 B $2.47-$2.58 $5.3 B $2.58 - $2.69 (1) Average rate base has been reduced by approximately $130M to represent ($0.05) of Earnings Potential for the lost equity return on Four Corners investment determined in the 2018 general rate review. 2022 and 2023 rate base also reflects the removal of $283M undepreciated SJGS investment upon its retirement in mid-2022 to be recovered through securitization. (2) Replacement Power includes $298M investment implemented mid-2022; $278M of generation investment and $20M of transmission investment. (3) PNM Renewables reflect assets collected through the Renewable Rate Rider. (4) PNM FERC in 2021-2023 reflects a return of 8%-9% to account for Western Spirit investment recovered through incremental rates. (5) Consists primarily of decommissioning/reclamation trust income (net of fees/taxes), AFUDC, certain incentive compensation, and the 65MW ownership of San Juan Unit 4 (prior to retirement). (6) TNMP earnings include additional recovery for Energy Efficiency, along with items excluded from rates (primarily AFUDC) and interest savings from the refinancing of existing debt. (7) Corporate/Other includes the earnings impacts associated with short and intermediate term bank debt and the 50% equity interest in NMRD. (8) Equity Financing Plans reflect financing alternatives, including ATM Program issuance of up to $150M (dilution impacts assume $50M issued in 2020 and $100M issued in 2021, with a full year dilution impact in 2022), and $300M mandatory convertibles beginning mid-2021. This table is not intended to represent a forward-looking projection of 2020-2023 earnings guidance. PNMResources 32#33Liquidity and Debt Maturity Outlook Maintain appropriate Long-term Debt Maturities (in millions) $658 credit metrics $35 $140 $300 $1,003 Remain a solid $350 $306 $57 2020 2021 2022 2023 and Beyond PNM TNMP Corporate investment grade rated company Target regulatory capital structures at PNM and TNMP • Extended $700M revolving credit facilities through 2023 Refinanced $172 million of 9.5% TNMP First Mortgage Bonds in February 2019 . • At-The-Market equity program of approximately $150 million and mandatory convertibles of $300 million are projected to fund 2020 2023 expenditures • New debt issuances projected at utilities through 2023 of $791 million and $361 million securitization bonds S&P Rating/Outlook PNM Resources PNM TNMP Moody's Rating/Outlook Baa3(1)/ Stable Baa2(2)/ Stable A1(3)/Stable BBB+(1) / Negative BBB+(2) Negative A(3) / Negative (1) Issuer rating (2) Senior unsecured rating (3) Senior secured rating PNM Resources FFO-to-Debt is maintained well within Moody's Baa investment grade target range of 13% to 22% PNMResourc ources® 33#34Liquidity as of July 26, 2019 PNMR PNMR PNM PNM TNMP Financing Capacity (1): ment (In millions) Develop Corporate Resources /Other Consolidated Revolving credit facilities $440.0 $75.0 $40.0 $300.0 $855.0 As of 7/26/19: Short-term debt and LOC balances $56.9 $0.1 $32.9 $72.4 $162.3 Remaining availability 383.1 74.9 7.1 227.6 692.7 Invested cash 13.8 0.9 Total Available Liquidity $383.1 $88.7 $7.1 $228.5 14.7 $707.4 (1) Excludes intercompany debt and term loans PNMResources 34#35San Juan Generating Station Ownership and Participants Unit Total MW PNM PNM Other Participants/Ownership MW Ownership 1 340 170 50% Tucson Electric 50% (170 MW) City of Farmington 8.5% (43 MW) 4 507 392 77.3% Los Alamos County 7.2% (36.5 MW) Utah Associated Municipal Power Systems (UAMPS) 7.0% (35.5 MW) Total 847 562 PNM②Resources 35#36Palo Verde Nuclear Generating Station Ownership and Leases MW Owned vs. Leased Unit 1 Unit 2 Unit 3 Owned Leased 2.3% 30 MW Owned 9.5% 124 MW Owned 10.2% 134 MW 7.9% 104 MW Leased 0.7% 10 MW Leased 0% 0 MW Total 10.2% 134 MW Total 10.2% 134 MW Total 10.2% 134 MW Lease Expiration • Unit 1: January 15, 2015; exercised option to extend leases to 2023 • Unit 2: January 15, 2016; exercised right to purchase 3 leases in 2016 and option to extend one lease to 2024 Yearly Payment Amounts ■ Total PV Unit 1 - $16.5M ■ Total PV Unit 2 - $1.6M PNM@Resources 36