Core Viewpoint - PNM, a subsidiary of TXNM Energy, has filed an unopposed comprehensive stipulation with the New Mexico Public Regulation Commission to approve a resource portfolio that includes significant investments in solar and battery storage capacity to meet zero-carbon requirements [1][2]. Group 1: Resource Portfolio and Investment - The proposed resource portfolio includes the addition of 450 megawatts (MW) of new solar and battery storage capacity by 2028, reflecting a capital investment of $252 million from PNM between 2026 and 2028 [2]. - The stipulation also includes the extension of a Valencia Purchase Power Agreement (PPA) for 167 MW through 2039, and the addition of 300 MW capacity through Energy Storage Agreements (ESAs) for two 150 MW battery stand-alone storage facilities [8]. Group 2: Stakeholders and Approval Process - The stipulation is supported by various parties, including the Utility Division Staff of the New Mexico Public Regulation Commission, Coalition for Clean Affordable Energy, and others, with Central Consolidated School District also expressing support [3]. - The stipulation is subject to approval by the NMPRC, with hearings scheduled to begin on April 2, 2025 [3].

[GLOSSARY](index=4&type=section&id=GLOSSARY) Provides definitions for key terms used throughout the report [PART I](index=9&type=section&id=PART%20I) Covers the company's business operations, risk factors, and property details [Business Overview](index=9&type=section&id=ITEM%201.%20BUSINESS) TXNM Energy, Inc. operates two regulated electric utilities, PNM and TNMP, serving 834,000 customers in New Mexico and Texas, aiming for a clean energy future - TXNM Energy, Inc. (formerly PNMR) is a holding company with two regulated electric utilities, PNM and TNMP, serving approximately **834,000** residential, commercial, and industrial customers in New Mexico and Texas[24](index=24&type=chunk) - TXNM's vision is to create a clean and bright energy future, fulfilling its purpose to meet energy needs with customers and communities, underpinned by core values of Safety, Caring, and Integrity[25](index=25&type=chunk) - The Company is committed to earning authorized returns on regulated businesses, delivering at or above industry-average long-term earnings growth (with a dividend payout ratio between **50-60%**), and maintaining investment-grade credit ratings[31](index=31&type=chunk) - PNM plans to be coal-free no later than **2031** and to achieve a carbon-free generating portfolio by **2040**[33](index=33&type=chunk) [The Company](index=9&type=section&id=THE%20COMPANY) TXNM Energy, Inc. is a holding company for two regulated electric utilities, PNM and TNMP, serving approximately 834,000 customers [Websites](index=9&type=section&id=WEBSITES) Provides information on the company's official online presence [Operations and Regulation](index=10&type=section&id=OPERATIONS%20AND%20REGULATION) Company operations are seasonal, with PNM and TNMP regulated by NMPRC and PUCT respectively, showing load increases in 2024 - Electric power demand is seasonal, peaking in summer, which impacts quarterly operating results and plant maintenance timing[37](index=37&type=chunk) - TNMP's weather normalized retail load increased by **1.8%** in 2024 compared to 2023, and data center load increased by **13.7%** in 2024 compared to 2023[41](index=41&type=chunk) - PNM's weather-normalized residential load increased by **1.5%** and industrial load increased by **12.5%** in 2024 compared to 2023, while commercial load remained flat[46](index=46&type=chunk) PNM System Peak Demands (Megawatts) | | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Summer | 2,147 | 2,162 | 2,139 | | Winter | 1,643 | 1,545 | 1,526 | [Regulated Operations](index=10&type=section&id=Regulated%20Operations) Details the regulatory frameworks governing PNM and TNMP's utility operations [TNMP](index=10&type=section&id=TNMP) TNMP provides transmission and distribution services in Texas under PUCT jurisdiction, experiencing load growth [PNM](index=11&type=section&id=PNM) PNM provides generation, transmission, and distribution in New Mexico under NMPRC jurisdiction, with increased residential and industrial load [Corporate and Other](index=12&type=section&id=CORPORATE%20AND%20OTHER) Covers corporate-level activities and other non-utility operations [Sources of Power](index=13&type=section&id=SOURCES%20OF%20POWER) PNM's 4,268 MW generation capacity is 50.3% renewable, 14.8% energy storage, with plans for additional clean energy procurement PNM Generation Capacity as of December 31, 2024 | Type | Generation Capacity (MW) | Percent of Generation Capacity | | :--- | :--- | :--- | | Renewable resources | 2,147 | 50.3 % | | Energy storage resources | 632 | 14.8 % | | Gas-fired resources | 1,001 | 23.5 % | | Nuclear | 288 | 6.7 % | | Coal | 200 | 4.7 % | | **Total** | **4,268** | **100.0 %** | - PNM has NMPRC-approved plans to procure an additional **600 MW** of solar and energy storage resources by summer **2026**, and **597 MW** are pending approval for the **2028** summer peak, supporting its carbon-free generating portfolio goals[59](index=59&type=chunk)[60](index=60&type=chunk) PNM Plant Operating Statistics (Equivalent Availability) | Plant | 2024 | 2023 | | :--- | :--- | :--- | | Four Corners | 78.1% | 61.2% | | PVNGS | 91.8% | 91.4% | [TNMP](index=13&type=section&id=TNMP) TNMP's power sources are detailed within the broader company overview [PNM](index=13&type=section&id=PNM) PNM's generation mix includes renewables, energy storage, gas, nuclear, and coal, with a focus on carbon-free goals [Fuel](index=15&type=section&id=FUEL) PNM's 2024 generation was primarily nuclear (43.3%), gas (41.2%), and coal (8.2%), with fuel costs largely recovered via FPPAC PNM Electricity Generation Fuel Mix and Average Costs | Fuel Type | Percent of Generation (2024) | Average Cost/MMBTU (2024) | Percent of Generation (2023) | Average Cost/MMBTU (2023) | | :--- | :--- | :--- | :--- | :--- | | Coal | 8.2 % | $8.81 | 12.8 % | $4.19 | | Nuclear | 43.3 % | $0.86 | 32.3 % | $0.73 | | Gas | 41.2 % | $0.97 | 49.9 % | $3.42 | | Utility-owned solar | 7.3 % | No fuel cost | 5.0 % | No fuel cost | - PNM recovers substantially all of its fuel and purchased power costs through the Fuel and Purchased Power Adjustment Clause (FPPAC)[71](index=71&type=chunk) - PVNGS has sufficient on-site capacity to store spent nuclear fuel for initial operating license periods (through December **2027**) and a portion of extended license periods (through November **2047**)[77](index=77&type=chunk) [PNM](index=15&type=section&id=PNM) PNM's fuel mix and costs, including nuclear, gas, and coal, are detailed, with most costs recovered through FPPAC [Environmental Matters](index=16&type=section&id=ENVIRONMENTAL%20MATTERS) Electric utilities face stringent environmental regulations, with potential material liabilities, and PVNGS is under NRC jurisdiction - Electric utilities are subject to stringent environmental laws and regulations from local, state, federal, and tribal authorities, which can result in material liabilities, including those imposed without regard to fault or for past acts[79](index=79&type=chunk) - PVNGS is subject to NRC jurisdiction, which regulates nuclear facilities to protect public health and safety from radioactive hazards and conducts environmental reviews[79](index=79&type=chunk) - Detailed information on environmental matters such as PVNGS decommissioning, nuclear spent fuel disposal, the Energy Transition Act, Clean Air Act, cooling water intake structures, effluent limitation guidelines, Santa Fe Generating Station, and coal combustion residuals waste disposal is incorporated by reference from Note 16[79](index=79&type=chunk) [Competition](index=16&type=section&id=COMPETITION) Regulated utilities face competition from customer conservation, energy efficiency, alternative sources, and wholesale markets - Regulated utilities like PNM and TNMP generally do not face direct competition from other utilities in their state-regulated service areas[81](index=81&type=chunk) - Both PNM and TNMP are subject to competition from customer conservation, energy efficiency activities, and initiatives to utilize alternative energy sources, including self-generation[81](index=81&type=chunk) - PNM faces competition in the wholesale electricity market from regional utilities and merchant power suppliers[82](index=82&type=chunk) [Human Capital Resources](index=17&type=section&id=HUMAN%20CAPITAL%20RESOURCES) TXNM employs over 1,600 individuals, fostering a culture of safety, caring, and integrity, with a diverse and union-represented workforce - TXNM depends on over **1,600** dedicated employees, with a culture fostering safety, caring, and integrity[84](index=84&type=chunk)[85](index=85&type=chunk) TXNM Employee Diversity Statistics (as of December 31, 2024) | Category | Percentage | | :--- | :--- | | Bargaining unit | 35% | | Women | 27% | | Minorities | 56% | | Disabled | 15% | | Veterans | 9% | - The Board's Compensation and Human Capital Committee oversees human capital management, including corporate culture, diversity and inclusion, employee development, and compensation and benefits[88](index=88&type=chunk) Number of Employees as of December 31, 2024 | Entity | Employees | | :--- | :--- | | TXNM (Corporate) | 444 | | PNM | 868 | | TNMP | 383 | | **Total** | **1,695** | [Culture](index=17&type=section&id=Culture) The company fosters a culture emphasizing safety, caring, and integrity among its employees [Talent Management and Total Rewards](index=17&type=section&id=Talent%20Management%20and%20Total%20Rewards) Outlines the company's strategies for attracting, developing, and compensating its workforce [Diversity and Inclusion](index=17&type=section&id=Diversity%20and%20Inclusion) Highlights the company's commitment to a diverse and inclusive workforce [Governance](index=17&type=section&id=Governance) Describes the Board's oversight of human capital management, including talent and compensation [Employees](index=17&type=section&id=Employees) Provides statistics on the company's workforce, including total numbers and diversity metrics [Disclosure Regarding Forward Looking Statements](index=17&type=section&id=DISCLOSURE%20REGARDING%20FORWARD%20LOOKING%20STATEMENTS) Provides cautionary statements regarding forward-looking information contained in the report [Securities Act Disclaimer](index=19&type=section&id=SECURITIES%20ACT%20DISCLAIMER) States the legal disclaimer concerning the Securities Act for certain statements [Risk Factors](index=19&type=section&id=ITEM%201A.%20RISK%20FACTORS) The Company faces significant risks across regulatory, operational, economic, weather, financial, and governance domains - Profitability depends on timely cost recovery and fair returns on invested capital, with significant capital expenditures (**$7.8 billion** for 2025-2029) creating upward pressure on rates while energy efficiency and other factors reduce customer usage[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) - Operational risks include potential underutilization of PNM's generating capacity and transmission/distribution systems due to increased prices, energy efficiency, or alternative power sources[111](index=111&type=chunk)[113](index=113&type=chunk) - Advances in technology (renewable energy, energy storage, distributed generation) could make existing electric generating facilities less competitive, eroding sales and regulated returns[117](index=117&type=chunk)[118](index=118&type=chunk) - The Company faces significant financial risks due to substantial indebtedness, including Convertible Notes, which could limit access to financing and increase vulnerability to adverse economic conditions[148](index=148&type=chunk)[149](index=149&type=chunk) - Extreme weather conditions, including high winds, drought, flooding, ice storms, and hurricanes, can damage facilities, disrupt service, increase costs, and lead to liabilities from wildfires[143](index=143&type=chunk)[144](index=144&type=chunk) [Regulatory Risks](index=19&type=section&id=Regulatory%20Risks) Challenges in cost recovery and earning fair returns due to capital investments and demand pressures [Operational Risks](index=21&type=section&id=Operational%20Risks) Potential underutilization of facilities, technological advancements, and inherent risks of nuclear operations [General Economic and Weather Risks](index=24&type=section&id=General%20Economic%20and%20Weather%20Risks) Interest rate fluctuations, supply chain issues, inflation, and extreme weather events like wildfires [Financial Risks](index=26&type=section&id=Financial%20Risks) Substantial indebtedness, counterparty credit risk, and potential asset impairments pose significant financial challenges [Governance Risks](index=29&type=section&id=Governance%20Risks) Organizational documents and regulatory factors could limit acquisitions and impact corporate governance [Unresolved Staff Comments](index=29&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) There are no unresolved staff comments to report [Cybersecurity](index=29&type=section&id=ITEM%201C.%20CYBERSECURITY) Cybersecurity is a top-tier risk managed by an enterprise-wide program adhering to NIST and NERC standards, overseen by the Board - Cybersecurity is a 'tier 1' risk for the Company, managed by a robust, enterprise-wide, risk-based program adhering to NIST Cybersecurity Framework and NERC Critical Infrastructure Protection Standards[170](index=170&type=chunk)[171](index=171&type=chunk) - The Cybersecurity Program includes processes to identify, assess, and manage material risks, with regular third-party audits, penetration tests, and internal assessments to continuously improve cyber protections[170](index=170&type=chunk)[172](index=172&type=chunk) - The CIO oversees the Cybersecurity Program, reporting to the President and COO, and regularly briefs the Audit and Ethics Committee and the Board on cybersecurity posture[176](index=176&type=chunk)[177](index=177&type=chunk) - As of December 31, **2024**, cybersecurity threats have not materially affected the Company's financial condition, results of operations, or business strategy[175](index=175&type=chunk) [Cybersecurity Risk Management and Strategy](index=29&type=section&id=Cybersecurity%20Risk%20Management%20and%20Strategy) The company employs a robust, risk-based cybersecurity program aligned with NIST and NERC standards [Cybersecurity Governance](index=30&type=section&id=Cybersecurity%20Governance) The CIO oversees the cybersecurity program, reporting to the Audit and Ethics Committee and the Board [Properties](index=30&type=section&id=ITEM%202.%20PROPERTIES) TXNM's significant properties are held by PNM and TNMP, including extensive transmission and distribution lines and substations - TXNM's significant properties are owned by its subsidiaries, PNM and TNMP[178](index=178&type=chunk) PNM Properties as of December 31, 2024 | Asset Type | Quantity | | :--- | :--- | | Electric transmission lines | 3,444 miles | | Distribution overhead lines | 5,776 miles | | Underground distribution lines | 6,179 miles | | Substations | 232 | TNMP Properties as of December 31, 2024 | Asset Type | Quantity | | :--- | :--- | | Overhead electric transmission lines | 1,022 miles | | Overhead distribution lines | 7,348 miles | | Underground distribution lines | 1,576 miles | | Substations | 107 | - Substantially all of TNMP's property is pledged to secure its first mortgage bonds[180](index=180&type=chunk) [TXNM](index=30&type=section&id=TXNM) TXNM's properties are primarily held through its regulated utility subsidiaries, PNM and TNMP [PNM](index=30&type=section&id=PNM) PNM owns 3,444 miles of transmission lines, 11,955 miles of distribution lines, and 232 substations [TNMP](index=31&type=section&id=TNMP) TNMP owns 1,022 miles of transmission lines, 8,924 miles of distribution lines, and 107 substations [Legal Proceedings](index=31&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) Information on legal proceedings for TXNM, PNM, and TNMP is incorporated by reference from Notes 16 and 17 - Information on legal proceedings for TXNM, PNM, and TNMP is incorporated by reference from Note 16 (Commitments and Contingencies) and Note 17 (Regulatory and Rate Matters)[181](index=181&type=chunk)[182](index=182&type=chunk) [Mine Safety Disclosures](index=31&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the Company [Executive Officers Information](index=31&type=section&id=SUPPLEMENTAL%20ITEM%20%E2%80%93%20INFORMATION%20ABOUT%20EXECUTIVE%20OFFICERS%20OF%20TXNM%20ENERGY%2C%20INC.) Lists TXNM Energy, Inc.'s executive officers, their ages, and current and recent offices held TXNM Energy, Inc. Executive Officers (as of February 14, 2025) | Name | Age | Office | Initial Effective Date | | :--- | :--- | :--- | :--- | | P. K. Collawn | 66 | Chairman and Chief Executive Officer | May 2022 | | J. D. Tarry | 54 | President and Chief Operating Officer | May 2022 | | E. A. Eden | 59 | Senior Vice President and Chief Financial Officer | April 2024 | | B. G. Iverson | 62 | General Counsel, Senior Vice President Regulatory and Public Policy, and Corporate Secretary | September 2024 | [PART II](index=32&type=section&id=PART%20II) Details the company's common equity market, financial performance, and internal controls [Common Equity Market and Stockholder Matters](index=32&type=section&id=ITEM%205.%20MARKET%20FOR%20TXNM%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%2C%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) TXNM common stock trades on NYSE, with quarterly dividends increased to $0.4075 per share, targeting a 50-60% payout ratio - TXNM's common stock is traded on the New York Stock Exchange under the symbol **\"TXNM\"**[186](index=186&type=chunk) - The Board increased the quarterly dividend from **$0.3875** to **$0.4075** per share in December **2024**, targeting a long-term dividend payout ratio of **50-60%** of ongoing earnings[187](index=187&type=chunk) TXNM Common Stock Information | Metric | Value | | :--- | :--- | | Shares outstanding (as of Feb 14, 2025) | 92,659,335 | | Holders of record (as of Feb 14, 2025) | 6,662 | | Authorized shares (increased Aug 2, 2024) | 200,000,000 | - PNM has **115,293** shares of **4.58%** cumulative preferred stock outstanding, with quarterly cash dividends paid in **2024** and **2023**. TXNM and TNMP have no preferred stock outstanding[191](index=191&type=chunk) [Preferred Stock](index=32&type=section&id=Preferred%20Stock) Details the outstanding preferred stock, primarily held by PNM, and associated dividend payments [Sales of Unregistered Securities](index=32&type=section&id=Sales%20of%20Unregistered%20Securities) Reports on any sales of securities not registered under the Securities Act [Reserved Item](index=32&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved and contains no information [Management's Discussion and Analysis](index=32&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) TXNM's net earnings significantly increased in 2024, driven by rate relief and load growth, with $8.6 billion projected capital for 2025-2029 Net Earnings Attributable to TXNM | Metric | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | Change (2024/2023) | | :--- | :--- | :--- | :--- | | Net earnings attributable to TXNM (millions) | $242.2 | $87.8 | $154.5 | | Net earnings per diluted share | $2.67 | $1.02 | $1.65 | - Earnings in **2024** benefited from PNM's **2024** Rate Change, higher TNMP transmission and distribution rates, increased volumetric load at TNMP, higher weather-normalized retail load at PNM, and improved performance of investment securities[258](index=258&type=chunk) - TXNM projects consolidated capital requirements of **$8.6 billion** for **2025-2029**, primarily for transmission and distribution infrastructure, clean energy delivery, and grid resilience[260](index=260&type=chunk)[302](index=302&type=chunk) - As of February 14, **2025**, TXNM had **$460.7 million** in total consolidated availability under its revolving credit facilities, with all entities maintaining investment-grade credit ratings[259](index=259&type=chunk)[315](index=315&type=chunk)[317](index=317&type=chunk) [MD&A for TXNM](index=32&type=section&id=MD%26A%20FOR%20TXNM) Provides a comprehensive discussion and analysis of TXNM's financial condition and operational results [Executive Summary](index=32&type=section&id=EXECUTIVE%20SUMMARY) TXNM, a holding company for PNM and TNMP, focuses on safe, reliable, and affordable power, clean energy, and financial strength - TNMP filed its first System Resiliency Plan (SRP) with the PUCT, proposing **$565.8 million** in capital investments (**94%** of proposed) and **$128.2 million** in O&M expenses for **2025-2027**, focused on distribution system resiliency, wildfire mitigation, and operational technologies[196](index=196&type=chunk)[197](index=197&type=chunk) - PNM's **2025** Rate Request seeks a **$105.0 million** increase in retail revenues (unopposed stipulation), with a **9.45%** ROE, implemented in two phases starting July 1, **2025**, to recover investments and operational costs[198](index=198&type=chunk)[199](index=199&type=chunk) - PNM aims for a **100%** carbon-free generating portfolio by **2040**, supported by grid modernization, renewable energy procurements, and energy efficiency programs[217](index=217&type=chunk)[229](index=229&type=chunk) TXNM Board Approved Annual Common Stock Dividend Increases | Approval Date | Percent Increase | | :--- | :--- | | December 2023 | 5.4 % | | December 2024 | 5.2 % | - S&P revised TXNM, PNM, and TNMP's outlook to stable from positive on January 15, **2024**, with all entities maintaining investment-grade issuer credit ratings from Moody's and S&P[254](index=254&type=chunk) [Overview](index=32&type=section&id=Overview) Provides a high-level introduction to TXNM's business and strategic position [Recent Developments](index=33&type=section&id=Recent%20Developments) Highlights recent operational and regulatory milestones, including TNMP's SRP and PNM's 2025 Rate Request [Vision, Values and Business Objectives](index=33&type=section&id=Vision%2C%20Values%20and%20Business%20Objectives) Outlines the company's core vision, values, and strategic business objectives [Business Focus](index=33&type=section&id=Business%20Focus) Details the company's strategic priorities, including utility plant investments and customer experience [Financial Focus](index=38&type=section&id=Financial%20Focus) Describes the company's financial objectives, including authorized returns and earnings growth [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Summarizes the financial performance and key drivers of the company's operations [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's cash flow, capital requirements, and available financing [Results of Operations](index=42&type=section&id=RESULTS%20OF%20OPERATIONS) TXNM's net earnings increased by $154.5 million in 2024, driven by PNM and TNMP segment growth Net Earnings Attributable to TXNM by Segment (Change 2024/2023) | Segment | Change (In millions) | | :--- | :--- | | TNMP | $8.6 | | PNM | $156.0 | | Corporate and Other | $(10.3) | | **Net change** | **$154.3** | - TNMP's segment earnings increased by **$8.6 million** to **$103.5 million** in **2024**, driven by transmission and distribution rate relief, increased volumetric load, and the deferral of excess deferred income tax benefits[271](index=271&type=chunk)[272](index=272&type=chunk) - PNM's segment earnings increased by **$156.0 million** to **$191.7 million** in **2024**, primarily due to rate relief from the **2024** Rate Change, higher retail customer usage, SJGS abandonment settlement rate credits, and increased performance on investment securities[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk) - Corporate and Other segment earnings decreased by **$10.3 million** to a loss of **$53.1 million** in **2024**, mainly due to the sale of NMRD equity method investment and lower equity method investment income[282](index=282&type=chunk)[283](index=283&type=chunk) [Segment Information](index=42&type=section&id=Segment%20Information) Provides a breakdown of financial performance by the company's operating segments [TNMP](index=42&type=section&id=TNMP) TNMP's segment earnings increased by $8.6 million in 2024 due to rate relief and increased load [PNM](index=46&type=section&id=PNM) PNM's segment earnings increased by $156.0 million in 2024, driven by rate relief and higher customer usage [Corporate and Other](index=51&type=section&id=Corporate%20and%20Other) Corporate and Other segment earnings decreased by $10.3 million in 2024, mainly due to investment changes [Liquidity and Capital Resources](index=52&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Cash flows from operations decreased in 2024, while financing activities increased, with $8.6 billion projected capital for 2025-2029 TXNM Consolidated Cash Flows (In millions) | Cash Flows From: | 2024 | 2023 | Change (2024/2023) | | :--- | :--- | :--- | :--- | | Operating activities | $508.2 | $551.2 | $(43.0) | | Investing activities | $(1,174.4) | $(1,088.4) | $(86.0) | | Financing activities | $684.4 | $537.1 | $147.3 | | Net change in cash and cash equivalents | $18.1 | $(0.1) | $18.3 | - TXNM projects total consolidated capital requirements of **$8.6 billion** for **2025-2029**, including **$7.8 billion** for construction expenditures and **$762.3 million** for common stock dividends[302](index=302&type=chunk) - In **2024**, TXNM issued **$550.0 million** in Junior Subordinated Convertible Notes, used proceeds to prepay **$539.0 million** in term loans, and physically settled **2.5 million** shares under its **2024** ATM Program for **$99.4 million** in net proceeds[297](index=297&type=chunk)[613](index=613&type=chunk)[609](index=609&type=chunk) TXNM Consolidated Liquidity Arrangements (as of Feb 14, 2025, In millions) | Metric | TXNM Separate | PNM | TNMP | TXNM Consolidated | | :--- | :--- | :--- | :--- | :--- | | Total financing capacity | $300.0 | $440.0 | $200.0 | $940.0 | | Amounts outstanding | $144.7 | $219.3 | $112.2 | $479.3 | | Remaining availability | $152.2 | $220.7 | $87.8 | $460.7 | [Statements of Cash Flows](index=52&type=section&id=Statements%20of%20Cash%20Flows) Analyzes changes in cash flows from operating, investing, and financing activities [Financing Activities](index=54&type=section&id=Financing%20Activities) Details the company's debt issuances, borrowings, and other financing transactions [Capital Requirements](index=55&type=section&id=Capital%20Requirements) Outlines projected capital expenditures and funding needs for future periods [Other Material Cash Requirements](index=56&type=section&id=Other%20Material%20Cash%20Requirements) Identifies additional significant cash outflows beyond capital expenditures [Liquidity](index=56&type=section&id=Liquidity) Assesses the company's ability to meet short-term and long-term financial obligations [Off-Balance Sheet Arrangements](index=58&type=section&id=Off-Balance%20Sheet%20Arrangements) Describes financial arrangements not recognized on the balance sheet but impacting financial condition [Contingent Provisions of Certain Obligations](index=58&type=section&id=Contingent%20Provisions%20of%20Certain%20Obligations) Details conditions that could alter the terms or accelerate repayment of financial obligations [Capital Structure](index=59&type=section&id=Capital%20Structure) Analyzes the composition of the company's debt and equity financing [Other Issues Facing the Company](index=59&type=section&id=OTHER%20ISSUES%20FACING%20THE%20COMPANY) Climate change is a significant risk with Board oversight, impacting emissions, water usage, and regulatory compliance - Climate change is a significant risk, with Board oversight on financial consequences, mitigation plans, and strategy, including the impacts of severe weather, environmental regulation, and fuel/water availability[327](index=327&type=chunk) - PNM's GHG emissions in **2024** were approximately **1.5 million metric tons of CO2**, with **28%** of its generating capacity from coal or gas-fired generation[331](index=331&type=chunk) - PNM is committed to a **100%** carbon-free generating portfolio by **2040**, having already achieved significant GHG reductions from SJGS retirement and planning further reductions from Four Corners exit by **2031**[332](index=332&type=chunk)[353](index=353&type=chunk) - New Mexico's ETA requires utilities to achieve **100%** zero-carbon energy by **2045** and sets specific renewable portfolio percentages, significantly impacting PNM's generation portfolio[349](index=349&type=chunk) - The future of federal climate change regulations, including EPA's proposed rules and the Inflation Reduction Act, is uncertain under the new Trump Administration, which has directed agencies to review and potentially rescind regulations imposing undue burdens on domestic energy resources[345](index=345&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk) [Climate Change Issues](index=59&type=section&id=Climate%20Change%20Issues) Discusses the financial consequences, mitigation plans, and strategic responses to climate change risks [Transmission Issues](index=63&type=section&id=Transmission%20Issues) Addresses challenges and developments related to the company's electricity transmission infrastructure [Other Matters](index=64&type=section&id=Other%20Matters) Covers additional regulatory and operational matters not specifically categorized [Critical Accounting Policies and Estimates](index=64&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Financial statements rely on critical estimates for regulatory accounting, impairments, decommissioning, benefits, contingencies, and income taxes - The Company applies GAAP for rate-regulated enterprises, recording regulatory assets and liabilities based on the probability of future cost recovery or refunds through rates, with continuous evaluation of these assumptions[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk) - Goodwill and long-lived assets are evaluated for impairment annually or more frequently, using qualitative and quantitative analyses that involve significant judgments on future cash flows, growth rates, and market conditions[364](index=364&type=chunk)[365](index=365&type=chunk)[366](index=366&type=chunk)[367](index=367&type=chunk) - Decommissioning and reclamation costs (e.g., PVNGS, SJGS coal mine) are based on periodic site-specific estimates, involving assumptions about future costs, inflation, and discount rates, with potential for material impact from changes in these estimates[369](index=369&type=chunk)[370](index=370&type=chunk) - Pension and other postretirement benefit costs, as well as income taxes, involve actuarial assumptions and estimates that, if varied, could significantly affect the Company's financial position and results of operations[371](index=371&type=chunk)[373](index=373&type=chunk) [Regulatory Accounting](index=64&type=section&id=Regulatory%20Accounting) Details the application of GAAP for rate-regulated enterprises, including deferral of costs and recognition of liabilities [Impairments](index=64&type=section&id=Impairments) Explains the evaluation process for goodwill and long-lived asset impairments, involving significant judgments [Decommissioning and Reclamation Costs](index=65&type=section&id=Decommissioning%20and%20Reclamation%20Costs) Describes the estimation of costs for decommissioning and reclamation, based on site-specific assumptions [Pension and Other Postretirement Benefits](index=65&type=section&id=Pension%20and%20Other%20Postretirement%20Benefits) Covers the accounting for pension and postretirement benefits, which rely on actuarial assumptions [Accounting for Contingencies](index=65&type=section&id=Accounting%20for%20Contingencies) Explains the accounting treatment for potential liabilities arising from uncertain future events [Income Taxes](index=65&type=section&id=Income%20Taxes) Details the accounting for income taxes, involving estimates and assumptions that can impact financial results [MD&A for PNM](index=66&type=section&id=MD%26A%20FOR%20PNM) PNM operates as a single reportable segment, with its financial results integrated into the TXNM MD&A - PNM operates in only one reportable segment, with its results of operations presented within the MD&A for TXNM[375](index=375&type=chunk) [MD&A for TNMP](index=66&type=section&id=MD%26A%20FOR%20TNMP) TNMP operates as a single reportable segment, with its financial results integrated into the TXNM MD&A - TNMP operates in only one reportable segment, with its results of operations presented within the MD&A for TXNM[377](index=377&type=chunk) [Market Risk Disclosures](index=66&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The Company manages commodity, credit, interest rate, equity, and alternative investment risks through policies and Board oversight - The Company manages market risks (commodity, credit, interest rate, equity, and alternative investments) through policies and procedures with oversight by the Risk Management Committee (RMC) and the Board's Finance Committee[378](index=378&type=chunk)[379](index=379&type=chunk) - PNM uses commodity derivative instruments to hedge price and volume risk, with no impact on net earnings from mark-to-market adjustments in **2024** and **2023**, and fair value changes recorded as regulatory assets/liabilities[382](index=382&type=chunk)[381](index=381&type=chunk)[679](index=679&type=chunk) Variable Rate Debt Balances and Weighted Average Interest Rates (as of Feb 14, 2025) | Variable Rate Debt | Weighted Average Interest Rate | Balance Outstanding (In thousands) | | :--- | :--- | :--- | | **Short-term Debt:** | | | | TXNM Revolving Credit Facility | 5.91 % | $144,700 | | PNM Revolving Credit Facility | 5.67 % | $184,300 | | PNM New Mexico Credit Facility | 5.66 % | $35,000 | | TNMP Revolving Credit Facility | 5.29 % | $112,200 | | **Long-term Debt:** | | | | TXNM 2021 Delayed-Draw Term Loan | 5.36 % | $51,000 | | TXNM 2023 Term Loan | 5.76 % | $410,000 | | PNM 2024 Term Loan | 5.31 % | $200,000 | | PNM 2025 Term Loan | 5.30 % | $195,000 | - A hypothetical **10%** decrease in equity prices would reduce the fair values of PNM's investment trusts by **$51.2 million** and TNMP's by **$1.6 million**[391](index=391&type=chunk) [Commodity Risk](index=66&type=section&id=Commodity%20Risk) PNM uses commodity derivatives to hedge price and volume risk, with fair value changes recorded as regulatory assets/liabilities [Credit Risk](index=66&type=section&id=Credit%20Risk) Addresses the risk of financial loss due to a counterparty's failure to meet its obligations [Interest Rate Risk](index=67&type=section&id=Interest%20Rate%20Risk) Examines the impact of interest rate fluctuations on the company's variable-rate debt and earnings [Equity Market Risk](index=68&type=section&id=Equity%20Market%20Risk) Assesses the exposure of investment trusts to fluctuations in equity market prices [Alternatives Investment Risk](index=68&type=section&id=Alternatives%20Investment%20Risk) Evaluates the risks associated with investments in alternative asset classes [Financial Statements and Supplementary Data](index=69&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) Presents audited consolidated financial statements for TXNM, PNM, and TNMP, with extensive notes and unqualified audit opinions - Management concluded that TXNM's internal control over financial reporting was effective as of December 31, **2024**, and KPMG LLP issued an unqualified audit opinion on its effectiveness[397](index=397&type=chunk)[398](index=398&type=chunk)[405](index=405&type=chunk) - KPMG LLP issued unqualified opinions on the consolidated financial statements of TXNM, PNM, and TNMP for the three-year period ended December 31, **2024**, confirming fair presentation in conformity with U.S. GAAP[405](index=405&type=chunk)[419](index=419&type=chunk)[430](index=430&type=chunk) - The evaluation of regulatory assets and liabilities was identified as a critical audit matter due to the extensive audit effort required across relevant jurisdictions[413](index=413&type=chunk)[414](index=414&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk)[435](index=435&type=chunk)[436](index=436&type=chunk) TXNM Energy, Inc. and Subsidiaries Consolidated Statements of Earnings (In thousands) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Electric Operating Revenues | $1,971,199 | $1,939,198 | $2,249,555 | | Total operating expenses | $1,517,713 | $1,707,858 | $1,855,795 | | Operating income | $453,486 | $231,340 | $393,760 | | Net Earnings Attributable to TXNM | $242,154 | $87,818 | $169,530 | | Net Earnings Attributable to TXNM per Diluted Share | $2.67 | $1.02 | $1.97 | TXNM Energy, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands) | Asset/Liability | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total current assets | $498,836 | $475,543 | | Net utility plant | $8,437,008 | $7,609,862 | | Total assets | $11,211,733 | $10,252,605 | | Total current liabilities | $1,775,098 | $1,230,760 | | Long-term Debt, net | $4,311,765 | $4,241,642 | | Total liabilities | $8,616,919 | $7,842,025 | | Total equity | $2,583,285 | $2,399,051 | [Management's Annual Reports on Internal Control Over Financial Reporting](index=70&type=section&id=Management%27s%20Annual%20Reports%20on%20Internal%20Control%20Over%20Financial%20Reporting) Management's assessment of the effectiveness of internal control over financial reporting [Reports of Independent Registered Public Accounting Firm](index=73&type=section&id=Reports%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Independent auditor's opinions on the consolidated financial statements and internal control over financial reporting [Financial Statements:](index=79&type=section&id=Financial%20Statements%3A) Includes the consolidated statements of earnings, comprehensive income, cash flows, balance sheets, and changes in equity [TXNM Energy, Inc. and Subsidiaries](index=79&type=section&id=TXNM%20Energy%2C%20Inc.%20and%20Subsidiaries) Presents the consolidated financial statements for TXNM Energy, Inc. and its subsidiaries [Public Service Company of New Mexico and Subsidiaries](index=86&type=section&id=Public%20Service%20Company%20of%20New%20Mexico%20and%20Subsidiaries) Presents the consolidated financial statements for Public Service Company of New Mexico and its subsidiaries [Texas-New Mexico Power Company and Subsidiaries](index=93&type=section&id=Texas-New%20Mexico%20Power%20Company%20and%20Subsidiaries) Presents the consolidated financial statements for Texas-New Mexico Power Company and its subsidiaries [Notes to Consolidated Financial Statements](index=99&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed disclosures on TXNM's business, accounting policies, financial performance, and risks, including segment and financing information - TXNM is an investor-owned holding company with two regulated utilities, PNM and TNMP, providing electricity and electric services in New Mexico and Texas[498](index=498&type=chunk) - The Company applies GAAP for rate-regulated enterprises, deferring costs as regulatory assets when probable of future recovery and recognizing regulatory liabilities for probable future refunds or unspent collected revenue[505](index=505&type=chunk)[507](index=507&type=chunk) - PNM's provision for depreciation and amortization of utility plant is based on straight-line rates approved by NMPRC and FERC, while TNMP's rates are approved by PUCT[513](index=513&type=chunk) - The Company's financing strategy includes short-term revolving credit facilities and long-term debt, with all entities maintaining investment-grade credit ratings and compliance with debt-to-capitalization ratio covenants[599](index=599&type=chunk) - PNM consolidates Valencia (a natural gas-fired power plant) and ETBC I (a special purpose entity for energy transition bonds) as Variable Interest Entities (VIEs) due to its power to direct their economic performance and absorb variability in cash flows[502](index=502&type=chunk)[709](index=709&type=chunk)[719](index=719&type=chunk) [(1) Summary of the Business and Significant Accounting Policies](index=99&type=section&id=(1)%20Summary%20of%20the%20Business%20and%20Significant%20Accounting%20Policies) Outlines TXNM's business as a regulated utility holding company and its key accounting policies [(2) Segment Information](index=104&type=section&id=(2)%20Segment%20Information) Provides financial data broken down by the company's operating segments, PNM and TNMP [(3) Accumulated Other Comprehensive Income (Loss)](index=108&type=section&id=(3)%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Details the components of accumulated other comprehensive income or loss [(4) Electric Operating Revenues](index=108&type=section&id=(4)%20Electric%20Operating%20Revenues) Provides a breakdown and analysis of the company's electric operating revenues [(5) Earnings and Dividends Per Share](index=112&type=section&id=(5)%20Earnings%20and%20Dividends%20Per%20Share) Details the calculation of earnings per share and dividend payments [(6) Stockholders' Equity](index=113&type=section&id=(6)%20Stockholders%27%20Equity) Provides information on the components and changes in stockholders' equity [(7) Financing](index=114&type=section&id=(7)%20Financing) Details the company's debt, credit facilities, and other financing arrangements [(8) Lease Commitments](index=124&type=section&id=(8)%20Lease%20Commitments) Outlines the company's obligations under various lease agreements [(9) Fair Value of Derivative and Other Financial Instruments](index=129&type=section&id=(9)%20Fair%20Value%20of%20Derivative%20and%20Other%20Financial%20Instruments) Discloses the fair value measurements of derivative and other financial instruments [(10) Variable Interest Entities](index=136&type=section&id=(10)%20Variable%20Interest%20Entities) Identifies and describes the company's involvement with variable interest entities [(11) Pension and Other Postretirement Benefits](index=140&type=section&id=(11)%20Pension%20and%20Other%20Postretirement%20Benefits) Provides detailed information on the company's pension and postretirement benefit plans [(12) Stock-Based Compensation](index=147&type=section&id=(12)%20Stock-Based%20Compensation) Details the accounting for stock-based compensation plans and related expenses [(13) Regulatory Assets and Liabilities](index=150&type=section&id=(13)%20Regulatory%20Assets%20and%20Liabilities) Explains the nature and amounts of regulatory assets and liabilities recognized [(14) Construction Program and Jointly-Owned Electric Generating Plants](index=151&type=section&id=(14)%20Construction%20Program%20and%20Jointly-Owned%20Electric%20Generating%20Plants) Details the company's construction projects and interests in jointly-owned power plants [(15) Asset Retirement Obligations](index=152&type=section&id=(15)%20Asset%20Retirement%20Obligations) Describes the accounting for obligations associated with the retirement of long-lived assets [(16) Commitments and Contingencies](index=153&type=section&id=(16)%20Commitments%20and%20Contingencies) Discloses significant commitments and potential liabilities arising from various contingencies [(17) Regulatory and Rate Matters](index=163&type=section&id=(17)%20Regulatory%20and%20Rate%20Matters) Provides detailed information on ongoing regulatory proceedings and rate case developments [(18) Income Taxes](index=172&type=section&id=(18)%20Income%20Taxes) Details the company's income tax provisions, deferred taxes, and effective tax rates [(19) Goodwill](index=180&type=section&id=(19)%20Goodwill) Provides information on the company's goodwill balance and impairment testing [(20) Related Party Transactions](index=182&type=section&id=(20)%20Related%20Party%20Transactions) Discloses transactions with related parties, including affiliates and management [(21) Equity Method Investment](index=182&type=section&id=(21)%20Equity%20Method%20Investment) Details the company's investments accounted for using the equity method [Supplementary Data:](index=184&type=section&id=Supplementary%20Data%3A) Includes condensed financial information for the parent company and valuation and qualifying accounts [Schedule I - Condensed Financial Information of Parent Company](index=184&type=section&id=Schedule%20I%20-%20Condensed%20Financial%20Information%20of%20Parent%20Company) Presents condensed financial statements for the parent company, TXNM Energy, Inc. [Schedule II - Valuation and Qualifying Accounts](index=187&type=section&id=Schedule%20II%20-%20Valuation%20and%20Qualifying%20Accounts) Provides details on valuation and qualifying accounts, such as allowances for doubtful accounts [Changes and Disagreements with Accountants](index=190&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) There are no changes in or disagreements with accountants on accounting and financial disclosure to report [Controls and Procedures](index=190&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) TXNM, PNM, and TNMP concluded their disclosure controls and procedures were effective as of December 31, 2024 - TXNM, PNM, and TNMP's management, including their CEOs and CFOs, concluded that their disclosure controls and procedures were effective as of December 31, **2024**[995](index=995&type=chunk)[999](index=999&type=chunk)[1003](index=1003&type=chunk) - No material changes in internal control over financial reporting occurred for TXNM, PNM, or TNMP during the quarter ended December 31, **2024**[997](index=997&type=chunk)[1001](index=1001&type=chunk)[1005](index=1005&type=chunk) [TXNM](index=190&type=section&id=TXNM) TXNM's management concluded its disclosure controls and procedures were effective as of December 31, 2024 [PNM](index=190&type=section&id=PNM) PNM's management concluded its disclosure controls and procedures were effective as of December 31, 2024 [TNMP](index=191&type=section&id=TNMP) TNMP's management concluded its disclosure controls and procedures were effective as of December 31, 2024 [Other Information](index=191&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) There is no other information to report under this item [Foreign Jurisdictions Disclosure](index=191&type=section&id=ITEM%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) This item is not applicable to the Company [PART III](index=191&type=section&id=PART%20III) Covers corporate governance, executive compensation, security ownership, and related party transactions [Directors, Executive Officers, and Governance](index=191&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%2C%20AND%20CORPORATE%20GOVERNANCE) Information on directors, executive officers, corporate governance, and the Code of Ethics is incorporated by reference from the 2025 Proxy Statement - Information on directors, executive officers, and corporate governance is incorporated by reference from TXNM's **2025** Proxy Statement[1009](index=1009&type=chunk) - The Company has an Insider Trading Policy to promote compliance with insider trading laws, rules, and regulations, filed as Exhibit **19.1**[1010](index=1010&type=chunk) [Executive Compensation](index=191&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Information on director and executive compensation, including CD&A and Pay Versus Performance, is incorporated by reference from the 2025 Proxy Statement - Information on executive compensation, including Director Compensation and Executive Compensation, is incorporated by reference from the **2025** Proxy Statement[1011](index=1011&type=chunk) [Security Ownership and Stockholder Matters](index=191&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information on common stock ownership by largest shareholders, directors, and executive officers, and equity compensation plans, is incorporated by reference from the 2025 Proxy Statement - Information on security ownership of certain beneficial owners and management, and equity compensation plan information, is incorporated by reference from the **2025** Proxy Statement[1012](index=1012&type=chunk) [Related Transactions and Director Independence](index=191&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%20AND%20DIRECTOR%20INDEPENDENCE) Information on director independence and the policy on related person transactions is incorporated by reference from the 2025 Proxy Statement - Information on director independence and the Related Person Transaction Policy is incorporated by reference from the **2025** Proxy Statement[1013](index=1013&type=chunk) [Principal Accounting Fees and Services](index=191&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Information on principal accounting fees and services, including the Audit and Ethics Committee Report, is incorporated by reference from the 2025 Proxy Statement - Information on principal accounting fees and services, including the Audit and Ethics Committee Report and Independent Auditor Fees, is incorporated by reference from the **2025** Proxy Statement[1014](index=1014&type=chunk) - All independent auditor fees are fees of TXNM, with an allocation charged to PNM and TNMP as part of management fees[1014](index=1014&type=chunk) [PART IV](index=192&type=section&id=PART%20IV) Lists exhibits and financial statement schedules, and includes required signatures for the Form 10-K [Exhibits and Financial Statement Schedules](index=192&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) Lists all exhibits and financial statement schedules filed with the 10-K report, including corporate documents and material contracts - This section lists all exhibits and financial statement schedules, including articles of incorporation, bylaws, securities instruments, and material contracts[1017](index=1017&type=chunk)[1018](index=1018&type=chunk) - Financial statement schedules for **2024**, **2023**, and **2022** are omitted because they are not required or the information is otherwise supplied under Part II, Item 8[1017](index=1017&type=chunk) - Key exhibits include the Restated Articles of Incorporation and Bylaws for TXNM, PNM, and TNMP, various indentures for debt securities, and material contracts such as distribution agreements and term loan agreements[1018](index=1018&type=chunk) [Form 10-K Summary](index=203&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) This item indicates that no Form 10-K Summary is provided [Signatures](index=204&type=section&id=SIGNATURES) Contains the required signatures for TXNM Energy, Inc., PNM, and TNMP, certifying the Form 10-K filing - The report is signed by the Chairman and Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, and Directors of TXNM Energy, Inc. on February 28, **2025**[1033](index=1033&type=chunk) - The report is also signed by the Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, and Directors of Public Service Company of New Mexico on February 28, **2025**[1036](index=1036&type=chunk) - The report is further signed by the Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, and Directors of Texas-New Mexico Power Company on February 28, **2025**[1038](index=1038&type=chunk)

Financial Performance - TXNM Energy reported 2024 GAAP earnings of $2.67 per diluted share, with ongoing earnings of $2.74 per diluted share, achieving the high end of original guidance[6]. - GAAP net earnings attributable to TXNM Energy for 2024 were $242.2 million, compared to $87.8 million in 2023[8]. - Ongoing net earnings for 2024 were $247.8 million, slightly up from $243.5 million in 2023[8]. - PNM's GAAP diluted EPS for 2024 was $2.12, significantly up from $0.41 in 2023[11]. - TNMP's ongoing diluted EPS for 2024 was $1.15, compared to $1.11 in 2023[11]. - GAAP Net Earnings for the quarter ended December 31, 2024, were $15,714 thousand, compared to a loss of $50,226 thousand for the same quarter in 2023[22]. - Ongoing Earnings for the year ended December 31, 2024, reached $247,819 thousand, an increase from $243,537 thousand in 2023[24]. - GAAP Net Earnings attributable to TXNM for Q4 2024 was $0.17, compared to a loss of $0.58 in Q4 2023[27]. - Ongoing Earnings for Q4 2024 were $0.30 per diluted share, compared to $0.18 per diluted share in Q4 2023[27]. - Net Earnings Attributable to TXNM for the year ended December 31, 2024, were $242,154,000, compared to $87,818,000 in 2023[31]. Revenue and Investment - The company increased its long-term earnings growth target to 7% to 9%[2]. - TXNM Energy's 5-year capital investment plan increased to $7.8 billion, a 26% increase over the prior plan, with a regulated rate base growth of 12% compared to 2025 levels[4]. - 2025 ongoing earnings guidance was introduced at a range of $2.74 to $2.84 per diluted share, reflecting strong growth at TNMP and a mid-year implementation of PNM's rate increase[5]. - Total Electric Operating Revenues for the year ended December 31, 2024, were $1,971,199,000, a slight increase from $1,939,198,000 in 2023[31]. - The company experienced a decrease in Electric Operating Revenues of $169.8 million for the year ended December 31, 2023[24]. - Operating income for the year ended December 31, 2024, was $453,486,000, significantly higher than $231,340,000 in 2023[31]. - Interest income for the year ended December 31, 2024, was $23,537,000, up from $21,963,000 in 2023[31]. - The cost of energy for the year ended December 31, 2024, decreased to $583,984,000 from $802,261,000 in 2023[31]. Adjustments and Regulatory Issues - Regulatory disallowances increased by $118,411 thousand for the quarter ended December 31, 2023, contributing significantly to the adjustments[24]. - The total adjustments before income tax effects for the year ended December 31, 2024, amounted to $26,160 thousand, compared to $213,437 thousand in 2023[24]. - The income tax impact of the adjustments for the year ended December 31, 2024, was $(20,495) thousand, reflecting a significant tax burden[22]. - Merger-related costs totaled $3,154 thousand for the year ended December 31, 2024, compared to $1,986 thousand in 2023[24]. - The net change in unrealized gains and losses on investment securities was $(2,718) thousand for the year ended December 31, 2024, compared to $(33,278) thousand in 2023[24]. - Total Adjustments for GAAP to Ongoing Earnings in Q4 2024 amounted to $0.13, while in Q4 2023 it was $0.76[27]. - Regulatory disallowances contributed $1.02 to GAAP Net Earnings in Q4 2023, a significant factor in the earnings report[29]. Future Plans and Events - The company plans to prioritize investments for a more reliable and resilient grid in Texas and New Mexico[3]. - TXNM Energy's conference call to discuss these results is scheduled for February 21, 2025[16]. - Average Diluted Shares Outstanding for Q4 2024 were 90,998,879, an increase from 86,932,542 in Q4 2023[27].

Core Points - PNM, a subsidiary of TXNM Energy, filed an unopposed comprehensive stipulation with the New Mexico Public Regulation Commission for a phased-in increase in customer rates to support grid investments [1][2] - The stipulation includes a $105.0 million increase in revenue requirements based on a 9.45% return on equity and a 51% equity capitalization structure on a $3.0 billion rate base [2][4] - The agreement maintains previously approved depreciation rates for Four Corners Power Plant and modifies the amortization period for unprotected Excess Deferred Federal Income Tax regulatory liabilities [3] - Customer rates will increase in two phases: 50% effective July 1, 2025, and the remaining increase effective April 1, 2026 [4] - Various parties, including regulatory staff and community organizations, support the stipulation, while some intervening parties do not oppose it [5] Financial Details - The stipulation allows for a regulatory asset or liability for differences in Energy Storage Agreement costs until PNM's next filing [2] - A reduction in operating expenses is included to achieve the stipulated $105.0 million increase [3] - The previously authorized rates were based on a 9.26% return on equity and a 50% equity capitalization structure [4] Regulatory Process - The stipulation is subject to approval by the New Mexico Public Regulation Commission, with a scheduling conference planned for December 4 [7] - Hearings are expected to begin in mid-February [7] Company Background - TXNM Energy is an energy holding company serving over 800,000 homes and businesses across Texas and New Mexico through its regulated utilities [8]

Company Overview - TXNM Energy is an energy holding company based in Albuquerque, New Mexico, delivering energy to over 800,000 homes and businesses across Texas and New Mexico through its regulated utilities, TNMP and PNM [5] Proposed Energy Resource Portfolio - PNM, a subsidiary of TXNM Energy, filed an application with the New Mexico Public Regulation Commission (NMPRC) to add new energy resources by summer 2028 [1] - The proposed portfolio includes 430 MW of new solar and battery storage to meet forecasted peak load requirements in 2028 and support New Mexico's zero-carbon goals [2] - The portfolio involves: - Extension of a 167 MW Valencia Purchase Power Agreement (PPA) through 2039 [3] - Addition of 300 MW capacity through Energy Storage Agreements (ESAs) for two 150 MW battery storage facilities [3] - Addition of a 130 MW solar and battery storage facility (100 MW solar, 30 MW battery storage) with an option for an additional 20 MW of battery storage [3] - The 130 MW/150 MW facility is proposed to be located in New Mexico's Central Consolidated School District, where the San Juan Generating Station was retired in 2022 [4] Capital Investment - The proposed portfolio reflects a capital investment of $220 million from PNM, which could increase to $252 million if the additional 20 MW of storage option is selected [4] Regulatory Approval - The filing is subject to approval by the NMPRC, with PNM requesting approval within nine months [4]

Core Points - PNM, a subsidiary of TXNM Energy, has filed a joint notice with the New Mexico Public Regulation Commission indicating a Settlement in Principle regarding its 2025 Rate Request application [1] - An unopposed joint motion has been filed to modify the procedural schedule, specifically to vacate the testimony deadline set for November 26, 2024, and to hold a scheduling conference in the week of December 2, 2024 [2] - The parties involved in the joint notice and motion include the New Mexico Department of Justice, Albuquerque Bernalillo Water Utility Authority, Utility Division Staff, Bernalillo County, NM AREA, and Walmart, with any stipulation subject to NMPRC approval [3] Company Background - TXNM Energy is an energy holding company based in Albuquerque, New Mexico, serving over 800,000 homes and businesses across Texas and New Mexico through its regulated utilities, TNMP and PNM [4]

Core Insights - Public Service Company of New Mexico (PNM) plans to join the California Independent System Operator (CAISO) Extended Day-Ahead Market (EDAM) to enhance reliability and economic benefits for customers [1][3] - EDAM is a voluntary day-ahead regional market that builds on the existing Western Energy Imbalance Market (WEIM), which PNM has participated in since 2021 [2][4] - PNM anticipates that participation in EDAM will yield approximately $20 million in annual benefits for New Mexico customers [3][4] Economic Benefits - Since joining WEIM in 2021, PNM has provided nearly $125 million in benefits to New Mexico customers [3] - The coordination with other regional utilities through EDAM is expected to deliver substantial efficiencies and cost benefits [3][4] Regulatory Context - The decision to join EDAM follows a statement of policy and guiding market principles issued by the New Mexico Public Regulation Commission (NMPRC) [5] - The NMPRC's guidance was based on inquiries and workshops discussing potential participation in a day-ahead regional market [5] Future Plans - EDAM is scheduled to launch in 2026, with PNM aiming to begin participation as early as 2027 [4]

Financial Performance - Electric Operating Revenues for the three months ended September 30, 2024, were $569,256 thousand, an increase from $505,851 thousand in the same period last year, representing a growth of 12.4%[20] - Operating income for the three months ended September 30, 2024, was $191,080 thousand, compared to $86,652 thousand for the same period in 2023, marking a significant increase of 120.5%[20] - Net earnings attributable to TXNM for the three months ended September 30, 2024, were $131,202 thousand, up from $37,726 thousand in the prior year, reflecting a growth of 248.5%[20] - Basic and diluted earnings per common share for the three months ended September 30, 2024, were both $1.45, compared to $0.44 for the same period last year, an increase of 229.5%[20] - Comprehensive income attributable to TXNM for the three months ended September 30, 2024, was $127,703 thousand, compared to $34,541 thousand in the same period last year, an increase of 269.5%[22] - Net earnings for the three months ended September 30, 2024, were $113,862 thousand, compared to $13,266 thousand in the same period of 2023, reflecting a substantial increase of approximately 859%[34] - Net earnings for the nine months ended September 30, 2024, increased to $80,203,000, compared to $74,169,000 for the same period in 2023, representing an increase of approximately 8.7%[54] Revenue and Expenses - Total operating expenses decreased to $378,176 thousand for the three months ended September 30, 2024, from $419,199 thousand in the same period last year, a reduction of 9.8%[20] - Total operating expenses for the nine months ended September 30, 2024, were $307,407 thousand, an increase of 5.4% from $291,675 thousand in the same period of 2023[51] - The cost of energy for the three months ended September 30, 2024, was $101,495 thousand, down from $174,362 thousand in the same period of 2023, a decrease of approximately 42%[34] - Total current liabilities increased to $900,237 thousand as of September 30, 2024, from $839,194 thousand at the end of 2023, representing a rise of 7.3%[45] Cash Flow and Investments - Cash flows from operating activities for the nine months ended September 30, 2024, were $349,521 thousand, compared to $412,604 thousand in the same period last year, a decrease of 15.3%[24] - Net cash flows used in investing activities for the nine months ended September 30, 2024, were $(805,858) thousand, slightly lower than $(811,877) thousand in the same period last year[24] - Cash and cash equivalents at the end of the period increased to $16,436 thousand from $7,768 thousand, representing a significant rise of 111.5%[27] - The company reported utility plant additions of $493,381 thousand for the nine months ended September 30, 2024, compared to $424,292 thousand in the previous year[38] Debt and Financing - PNM issued $200 million in Senior Unsecured Notes on April 28, 2023[14] - PNM's $400 million Unsecured Revolving Credit Facility is currently in place[14] - TXNM's $1 billion Unsecured Delayed-Draw Term Loan matures on May 18, 2025[17] - Long-term borrowings increased to $1,233,000 thousand from $1,015,000 thousand, reflecting a growth of approximately 21.5%[27] - TXNM issued $500.0 million of junior subordinated convertible notes due 2054, with a 5.75% interest rate, to prepay existing borrowings[165] Equity and Dividends - The company paid dividends totaling $105,254 thousand, compared to $95,029 thousand in the previous period, representing an increase of about 10.5%[27] - Dividends declared per common share increased to $0.3875 for the three months ended September 30, 2024, compared to $0.3675 in the same period last year, a rise of 3.6%[20] - The balance of total equity at September 30, 2024, was $2,508,048 thousand, an increase from $2,399,051 thousand at December 31, 2023[33] Assets and Liabilities - Total current assets rose to $495,694 thousand, up from $475,543 thousand, indicating an increase of about 4.8%[29] - Total liabilities increased to $8,323,904 thousand from $7,842,025 thousand, reflecting an increase of about 6.1%[31] - The net utility plant value increased to $8,211,382 thousand from $7,609,862 thousand, representing a growth of approximately 7.9%[29] Regulatory and Compliance - PNM's Public Safety Power Shutoff Plan was filed with the NMPRC on May 1, 2024[17] - PNM's Wildfire Mitigation Plan was filed with the NMPRC on May 1, 2024[18] - The Energy Transition Act requires utilities in New Mexico to achieve renewable portfolios of 40% by 2025, 50% by 2030, 80% by 2040, and 100% zero-carbon energy by 2045[201] Strategic Initiatives - PNM's application for grid modernization investments amounts to approximately $344 million for the first six years of an 11-year strategy[14] - The merger agreement with TXNM was terminated on December 31, 2023[14] - The company is actively involved in energy transition initiatives, consolidating ETBC I in its financial statements due to its role as the primary beneficiary[114]

Earnings Performance - Q3 2024 GAAP earnings were $1.45 per diluted share, compared to $0.44 in Q3 2023, representing a 229.5% increase[1] - Ongoing earnings for Q3 2024 were $1.43 per diluted share, down from $1.54 in Q3 2023, a decrease of 7.1%[1] - GAAP net earnings attributable to TXNM Energy for Q3 2024 were $131.2 million, up from $37.7 million in Q3 2023, a growth of 248.5%[1] - Ongoing net earnings for Q3 2024 were $129.3 million, slightly down from $132.9 million in Q3 2023, a decrease of 2.7%[1] - PNM segment reported GAAP earnings of $1.20 per share in Q3 2024, compared to $0.09 in Q3 2023, a significant increase[4] - TNMP segment reported GAAP earnings of $0.39 per share in Q3 2024, down from $0.46 in Q3 2023, a decrease of 15.2%[4] - The diluted earnings per share for Q3 2024 were $1.45, compared to $0.44 in Q3 2023, reflecting an increase of 229.5%[24] Revenue and Operating Income - Electric Operating Revenues for Q3 2024 were $569.256 million, compared to $505.851 million in Q3 2023, reflecting an increase of 12.5%[24] - Operating income for Q3 2024 was $191.080 million, up from $86.652 million in Q3 2023, representing a growth of 120.5%[24] Expenses and Costs - Total operating expenses decreased to $378.176 million in Q3 2024 from $419.199 million in Q3 2023, a reduction of 9.8%[24] - The company reported a decrease in the cost of energy to $138.909 million in Q3 2024 from $210.313 million in Q3 2023, a decline of 34.0%[24] - Interest charges increased to $59.664 million in Q3 2024 from $49.838 million in Q3 2023, an increase of 19.5%[24] Regulatory and Market Factors - The company experienced lower transmission margins due to market prices and new depreciation rates, impacting overall earnings[5] - Regulatory disallowances increased to $6.142 million in Q3 2024 from $2.315 million in Q3 2023, a rise of 165.5%[24] Guidance and Future Expectations - The company narrowed its 2024 ongoing earnings guidance to a range of $2.70 to $2.75 per diluted share[1] - The company anticipates reversing the differences in statutory and effective tax rates by year-end, with expected rates of 25.4% for PNM and 21.0% for TNMP[20] Company Overview - TXNM Energy serves over 800,000 homes and businesses across Texas and New Mexico through its regulated utilities[13] - Q3 2024 GAAP earnings included $9.5 million of net unrealized gains on investment securities, compared to $5.6 million of net unrealized losses in Q3 2023[8] - The average diluted shares outstanding for ongoing earnings were 90,605,188[22]

Core Points - The New Mexico Public Regulation Commission (NMPRC) approved Public Service Company of New Mexico's (PNM) application for grid modernization, focusing on resilience, reliability, efficiency, and decarbonization [1][2] - The plan includes a six-year investment of $344 million, aimed at enhancing customer service through smart meters and enabling a clean energy transition in New Mexico [2] Investment and Implementation - The approved plan is part of a longer-term strategy for grid modernization, which will facilitate two-way communication on the grid, providing customers with insights into their energy usage [1] - The deployment of smart meters and upgrades will prioritize low-income and underserved communities, ensuring equitable access to clean energy opportunities [2] Regulatory Context - The investments are supported by a cost-benefit analysis and align with New Mexico's grid modernization legislation passed in 2020, with costs to be recovered through an annually reviewed tariff rider [2]