PNM Resources : Q4 2021 Presentation and Appendix

2021 Preliminary Earnings and Earnings Guidance Review

February 3, 2022

Contact Information and Safe Harbor Statement

Investor Relations Contact Information

Lisa Goodman Director, Investor Relations and Shareholder Services

1-505-241-2160 [e-mail]

Preliminary Unaudited Financial Results

The preliminary unaudited financial results for the fiscal year ended December 31, 2021 included in this presentation represent the most current information available to management and are not a comprehensive statement of the financial results for this period. Actual results may differ from these preliminary unaudited results due to the completion of the company's year-end financial closing procedures, including final adjustments, completion of the audit by the company's independent registered public accounting firm, completion of the internal control over financial reporting and other developments that may arise between the date of this presentation and the time that financial results for the fiscal year ended December 31, 2021 are finalized.

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

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, including the preliminary unaudited financial results and earnings guidance, 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 and apply only as of the date of this report. 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. Additionally, there are risks and uncertainties in connection with the proposed acquisition of us by AVANGRID which may adversely affect our business, future opportunities, employees and common stock, including without limitation, (i) the expected timing and likelihood of completion of the pending Merger, including the timing, receipt and terms and conditions of any remaining required governmental and regulatory approvals of the pending Merger that could reduce anticipated benefits or cause the parties to abandon the transaction, (ii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (iii) the risk that the parties may not be able to satisfy the conditions to the proposed Merger in a timely manner or at all, and (iv) the risk that the proposed transaction could have an adverse effect on the ability of PNMR to retain and hire key personnel and maintain relationships with its customers and suppliers, and on its operating results and businesses generally. For a discussion of risk factors and other important factors affecting forward-looking statements, please see the Company's Form 10-K, Form 10-Q filings and the information included in the Company's Forms 8- K 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 at http://www.pnmresources.com/investors/results.cfm. 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.

Overview and Highlights

Financial Results and Company Updates

2021 earnings results

2022 and 2023 earnings

guidance

Dividend increased

PNM clean energy

infrastructure investments to support 100% emissions free energy by 2040

TNMP recovery of critical infrastructure investments

2021 Preliminary Financial Results

		2021	2020
	Clean Energy	$2.28Strong Financial
	Ongoing EPS	$2.45
	GAAP EPS	$2.27	$2.15
	Focus		Profile

Company Focus Pending Merger Appeal

Guidance

• 2022 Guidance of $2.50 - $2.60 per diluted share
• 2023 Guidance of $2.60 - $2.75 per diluted share

Dividend

• Dividend increased 6.1% to indicated annual rate of $1.39

Regulatory Updates

• PNM 2021 Renewable Plan and Transportation Electrification Program approved in Q4 2021
• PNM Four Corners exit plan under appeal with New Mexico Supreme Court
• TNMP Transmission Cost of Service increase filed January 26, 2022 for recovery of transmission investments

Note: EPS is presented on diluted basis. For a reconciliation of GAAP to Ongoing EPS, including a	4
description of adjustments, see earnings release issued February 3, 2022.

Pending Merger Agreement with Avangrid

Merger agreement extended to April 2023

•	Retains benefits of $300 million negotiated in New Mexico
•	Broad community and intervenor support remain in place for merger
	approval	Clean Energy

Strategic Rationale	Focus

• Benefits of scale, regulatory diversity and improved credit profile
• Strong ESG focus with a global and national leader
• Commitment to maintaining local control of utilities, following through on clean energy commitments, support for economic development and community giving

New Mexico Supreme Court Appeal and Process

• Commission rejection of the stipulation agreement is not supported by the evidentiary record - Statement of Issues filed February 2
• Supreme Court appeal is next step in path forward to close the merger
• No statutory timeframe, we expect a ~12- to 18-month process
• Schedule of appeal filings:
• • Supreme Court assignment to general calendar
  • 45 days for PNM/AVANGRID to file brief
  • 45 days for NMPRC to file answer brief
  • 20 days for PNM/AVANGRID to file response brief
  • Oral arguments at court's discretion

Strong Financial

Profile

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