Public Service Co of New Mexico reports $136.3 million net income

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For the quarterly period ended June September 30, 2025

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As of July 25, October 24, 2025, 105,378,979 108,921,356 shares of common stock, no par value per share, of TXNM were outstanding.

The total number of shares of common stock of PNM, no par value per share, outstanding as of July 25, October 24, 2025, was 39,117,799 all held by TXNM (and none held by non-affiliates).

The total number of shares of common stock of TNMP, $10 par value per share, outstanding as of July 25, October 24, 2025, was 6,358 all held indirectly by TXNM (and none held by non-affiliates).

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Exhibits 7 changes

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ARP Alternative Revenue Program

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Novel coronavirus global pandemic

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Extended Day Ahead Market

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Internal Revenue Code

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Office of Management and Budget

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TXNM 2025 ATM Program

TXNM's distribution agreement pursuant to which the Company issued and sold an aggregate sales price of $200.0 million of its common stock, no par value, through the sales agents

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Financial statements 508 changes

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Three Months Ended June 30, Six Months Ended June 30,

Electric Operating Revenues $ 502,420 $ 488,102 $ 985,212 $ 924,979

Cost of energy 167,622 154,706 336,804 287,010

Administrative and general 75,991 59,581 136,760 115,008

Energy production costs 26,081 24,584 50,627 46,796

Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share amounts)

Electric Operating Revenues $ 647,162 $ 569,256 $ 1,632,374 $ 1,494,235

Cost of energy 195,042 138,909 531,846 425,919

Administrative and general 68,445 64,840 205,205 179,848

Energy production costs 21,172 21,259 71,799 68,055

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Depreciation and amortization 105,235 94,413 209,786 187,600

Transmission and distribution costs 26,461 25,051 51,966 47,815

Taxes other than income taxes 28,329 24,084 54,679 50,018

Total operating expenses 429,719 382,419 840,622 738,706

Operating income 72,701 105,683 144,590 186,273

Depreciation and amortization 105,012 97,400 314,798 285,000

Transmission and distribution costs 27,167 23,660 79,133 71,475

Taxes other than income taxes 28,185 25,966 82,864 75,984

Total operating expenses 444,292 378,176 1,284,914 1,116,882

Operating income 202,870 191,080 347,460 377,353

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Interest income 3,872 4,470 8,119 9,050

Interest income 6,496 8,669 14,615 17,719

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Other income 5,704 7,688 10,433 12,599

Other (deductions) ( 6,481 ) ( 1,636 ) ( 8,739 ) ( 18,158 )

Net other income and deductions 26,651 11,080 32,128 22,047

Interest Charges 72,013 55,828 135,564 109,590

Earnings before Income Taxes 27,339 60,935 41,154 98,730

Income Taxes (Benefits)

Net Earnings 26,013 51,964 38,810 102,330

(Earnings) Attributable to Valencia Non-controlling Interest ( 4,305 ) ( 3,783 ) ( 8,047 ) ( 6,827 )

Other income 7,688 7,953 18,121 20,552

Other (deductions) ( 3,028 ) ( 1,988 ) ( 11,767 ) ( 20,146 )

Net other income and deductions 22,532 28,404 54,660 50,451

Interest Charges 70,149 59,664 205,713 169,254

Earnings before Income Taxes 155,253 159,820 196,407 258,550

Net Earnings 136,304 136,398 175,114 238,728

(Earnings) Attributable to Valencia Non-controlling Interest ( 5,462 ) ( 5,064 ) ( 13,509 ) ( 11,891 )

Preferred Stock Dividend Requirements of Subsidiary ( 132 ) ( 132 ) ( 264 396 ) ( 264 396 )

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Basic $ 0.22 $ 0.53 $ 0.32 $ 1.05

Diluted $ 0.22 $ 0.53 $ 0.32 $ 1.05

Basic $ 1.22 $ 1.45 $ 1.63 $ 2.50

Diluted $ 1.22 $ 1.45 $ 1.63 $ 2.50

Dividends Declared per Common Share $ 0.4075 $ 0.3875 $ 0.8150 1.2225 $ 0.7750 1.1625

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Three Months Ended June 30, Six Months Ended June 30,

Net Earnings $ 26,013 $ 51,964 $ 38,810 $ 102,330

Three Months Ended September 30, Nine Months Ended September 30, (In thousands)

Net Earnings $ 136,304 $ 136,398 $ 175,114 $ 238,728

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Net increase (decrease) in unrealized holding gains arising during the period, net of income tax (expense) benefit of $( 60 36 ), $( 274 241 ), $( 128 164 ), and $( 149 92 )

Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $ 51 69 , $ 421 93 , $ 86 155 , and $ 3,192 3,285 ( 150 204 ) ( 1,235 273 ) ( 252 456 ) ( 9,374 9,647 )

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Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $( 349 ), $( 309 ), $( 698 1,047 ), and $( 618 927 )

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Change in fair market value, net of income tax (expense) of $ 633 , $ 1,111 , $ 633 , and $ 1,094 ( 1,860 ) ( 3,263 ) ( 1,860 ) ( 3,213 )

Total Other Comprehensive Income (Loss) ( 807 ) ( 2,292 ) 315 ( 7,060 )

Comprehensive Income 25,206 49,672 39,125 95,270

Change in fair market value, net of income tax (expense) benefit of $( 242 ), $ 2,383 , $ 391 , and $ 3,477

Reclassification adjustment for gains included in net earnings, net of income tax (expense) benefit of $ 0 , $( 716 735 ), $ 0 , and $( 1,413 2,148 )

Total Other Comprehensive Income (Loss) 1,639 ( 3,499 ) 1,954 ( 10,559 )

Comprehensive Income 137,943 132,899 177,068 228,169

Comprehensive (Income) Attributable to Valencia Non-controlling Interest ( 4,305 5,462 ) ( 3,783 5,064 ) ( 8,047 13,509 ) ( 6,827 11,891 )

Preferred Stock Dividend Requirements of Subsidiary ( 132 ) ( 132 ) ( 264 396 ) ( 264 396 )

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Six Months Ended June 30,

Nine Months Ended September 30,

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Net earnings $ 38,810 $ 102,330

Net earnings $ 175,114 $ 238,728

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Depreciation and amortization 235,245 206,365

Deferred income tax expense 1,796 15,385

Depreciation and amortization 361,095 313,919

Deferred income tax expense 19,901 38,383

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(Gains) losses on investment securities

Stock based compensation expense 5,266 6,676 7,845

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Other, net 1,753 2,039

Allowance for equity funds used during construction ( 5,266 11,319 ) ( 8,130 13,911 )

Other, net 2,735 3,025

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Other current assets ( 20,651 ) ( 19,479 )

Other assets ( 8,211 ) ( 16,382 )

Accounts payable ( 3,669 ) ( 17,502 )

Accrued interest and taxes ( 19,588 ) ( 6,935 )

Other current liabilities ( 17,140 ) ( 28,350 )

Other liabilities ( 6,001 ) ( 20,717 )

Accounts receivable and unbilled revenues ( 30,921 76,923 ) ( 10,120 38,466 )

Materials, supplies, and fuel stock ( 4,313 6,125 ) ( 17,110 22,484 )

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and 428 more changes in the filing

Notes to the financial statements 6 changes

The excess purchase price over the fair value of the assets acquired and the liabilities assumed by TXNM for its 2005 acquisition of TNP Enterprises, Inc. and Subsidiaries ("TNP") was recorded as goodwill and was pushed down to the businesses acquired. In 2007, the TNMP assets that were included in its New Mexico operations, including goodwill, were transferred to PNM. TXNM's reporting units that currently have goodwill are PNM and TNMP.

The Company evaluates its goodwill for impairment annually at the reporting unit level or more frequently if circumstances indicate that the goodwill may be impaired. Application of the impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, and determination of the fair value of each reporting unit.

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TXNM periodically updates its quantitative analysis for both PNM and TNMP. The use of a quantitative approach in a given period is not necessarily an indication that a potential impairment has been identified under a qualitative approach.

When TXNM performs a qualitative or quantitative analysis for PNM or TNMP, TXNM considers market and macroeconomic factors including changes in growth rates, changes in the WACC, and changes in discount rates. TXNM also evaluates its stock price relative to historical performance, industry peers, and to major market indices, including an evaluation of TXNM's market capitalization relative to the carrying value of its reporting units.

TXNM periodically updates its quantitative analysis for both PNM and TNMP. The use of a quantitative approach in a given period is not necessarily an indication that a potential impairment has been identified under a qualitative approach. When TXNM performs a quantitative analysis for PNM or TNMP, a discounted cash flow methodology is primarily used to estimate the fair value of the reporting unit. This analysis requires significant judgments, including estimations of future cash flows, which is dependent on internal forecasts, estimations of long-term growth rates for the business, and determination of appropriate weighted average cost of capital for the reporting unit. Changes in these estimates and assumptions could materially affect the determination of fair value and the conclusion of impairment. When TXNM performs a qualitative or quantitative analysis for PNM or TNMP, TXNM considers market and macroeconomic factors including changes in growth rates, changes in the WACC, and changes in discount rates. TXNM also evaluates its stock price relative to historical performance, industry peers, and to major market indices, including an evaluation of TXNM's market capitalization relative to the carrying value of its reporting units.

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For its annual evaluations performed as of April 1, 2024, TXNM performed a quantitative analysis for the PNM reporting unit and a qualitative analysis for the TNMP reporting unit. The quantitative analysis, discussed above, indicated that the fair value of the PNM reporting unit, which has goodwill of $ 51.6 million, exceeded its carrying value by approximately 54 %. The qualitative analysis, in addition to the typical considerations discussed above, considered changes in the Company's expectations of future financial performance since the April 1, 2020 quantitative analysis and the previous qualitative analyses through April 1, 2023 performed for TNMP. The April 1, 2020 quantitative evaluations indicated the fair value of the TNMP reporting unit, which has goodwill of $ 226.7 million, exceeded its carrying value by approximately 38 %. This analysis considered events specific to TNMP such as the potential impacts of legal and regulatory matters discussed in Note 11 and Note 12. Based on an evaluation of these and other factors, the Company determined it was not more likely than not that the April 1, 2024 carrying values of PNM and TNMP exceeded their fair value. Since the April 1, 2024 annual evaluation, there have been no events, including the Merger, or indications that the fair values of the reporting units with recorded goodwill have decreased below their carrying values.

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MD&A 245 changes

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In June 2024, PNM filed an application with the NMPRC for a general increase in retail electric rates. The application proposed an increase of $174.3 million in retail revenues which is comprised of a $92.2 million increase in base rates and a $82.1 million increase in revenues collected under PNM's FPPAC and reflected an ROE of 10.45%. The proposed base rate changes would be implemented in two phases, with the first phase effective July 1, 2025 and the second phase effective January 1, 2026. The requested changes reflect recovery of needed investments across distribution, transmission, and generation facilities to ensure safe reliable delivery of electricity, increased operations and maintenance expenses to meet operational needs including wildfire risk mitigation, necessary costs to service customers associated with ESAs previously approved by the NMPRC, and adjustments to Four Corners depreciation rates to recover remaining plant investments through July 2031, the expected abandonment date of the facility.

In November 2024, PNM filed its unopposed comprehensive stipulation with the NMPRC. Key components include an increase of $105.0 million in retail revenues with the first phase effective July 1, 2025, and the second phase effective April 1, 2026, reflecting an ROE of 9.45%. On April 8, 2025, the hearing examiners issued a certification of stipulation recommending approval of the unopposed stipulation and on May 15, 2025, the NMPRC issued a final order adopting the unopposed stipulation. This matter is now concluded.

The proposed Merger has been unanimously approved by the Board. However, consummation of the Merger remains subject to the satisfaction or waiver of certain customary conditions, including, without limitation, the approval by at least a majority of the holders of the common stock of TXNM (which occurred at the special meeting held on August 28, 2025), no Legal Restraint, and the receipt of certain required regulatory approvals (including the PUCT, the NMPRC, the FERC, the NRC and under the Hart-Scott-Rodino Antitrust Improvements Act of 1976). TXNM has filed applications for regulatory approval of the Merger with the NMPRC, PUCT, and FERC (Note 12). The Merger Agreement does not contain any financing condition and is currently expected to close in the second half of 2026.

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PNM joined the WRAP in April 2023 to bolster PNM's preparations for times of critical need. WRAP is a first-of-its-kind program in the West that adds a region-wide coordination between power providers for assessing and addressing resource adequacy. This step helps ensure regional resource availability is visible and coordinated in the event PNM customers are critically impacted by a resource emergency. WRAP is currently in the non-binding phases of the program, which is expected to continue through the summer of 2027. PNM has successfully complied with all WRAP requirements to date and fully supports the need to align a resource adequacy program with coordination between power providers. However, on October 28, 2025, PNM notified the Western Power Pool that it has elected to withdraw from WRAP and will not proceed into the binding phase. PNM will seek to align resource adequacy coordination with others in the EDAM regional market to maximize customer benefits.

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Investments at TNMP support the continued high growth across each region of its service territory. Economic growth across Texas continues to push the demands on TNMP's system to new levels, including a new system peak in February 2025. Additionally in 2023, the Texas legislature in 2023 passed a series of bills aimed at encouraging investments to enhance grid reliability and resilience, while the PUCT has developed, and continues to develop rules associated with the support of this new legislation. TNMP will continue to submit filings for investments and recovery of its investments, in accordance with these new rules, in addition to the existing rate recovery mechanisms. In June 2025, HB 5247 added Section 36.216 to PURA, which immediately authorized certain electric utilities, like TNMP to elect to defer costs, including depreciation expenses and carrying costs, for qualifying investments to a regulatory asset until the following year in which they would file a single, annual proceeding upon notification to the PUCT.

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Throughout 2024 and into 2025, PNM continues to hold in-person engagements with residential and business customers through customer advisory councils. These engagements have helped PNM to build and improve customer relationships and have provided PNM with valuable customer insights to gauge customer interest levels towards programs and services to be highly customer centric. Additionally, PNM continues to focus its efforts to enhance the customer experience through customer service improvements, including enhanced digital payment options, strategic customer outreach, and improved communications. In early 2025, PNM introduced a redesigned customer bill to make it easier for customers to understand their bill as a part of a broader commitment improving transparency and usability. While the electric utility industry continues to experience declines in customer satisfaction, as measured by J.D. Power, PNM's ranking in 2025 remains stable, reflecting the Company's sustained efforts to improve the customer journey through a more seamless and customer-friendly experience. PNM continues to focus on addressing energy affordability by promoting participation in utility programs among households with high energy burden to offset high bills. PNM has implemented efforts to increase participation in low-income energy efficiency programs, providing additional aid through the PNM Good Neighbor Fund, partnering with state agencies to make it easier to access funding, improving access to clean energy through expanded outreach and communication, and the implementation of low-income transportation electrification programs. As a result of these communication efforts, 2,859 4,439 families in need have received emergency assistance through the PNM Good Neighbor Fund in the six nine months ended June September 30, 2025.

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PNM's utility-owned solar and energy storage capacity, as well as solar, energy storage, wind, and geothermal procurements in service as of June September 30, 2025, have a total net generation capacity of 2,779 2,969 MW. In addition to PNM's owned and third-party contracted solar facilities, PNM also has a customer distributed solar generation program that represented 320.5 327.9 MW and 5 MW under the Community Solar Act at June September 30, 2025. The NMPRC has approved plans for PNM to procure energy and RECs from additional resources to serve retail customers and a data center located in PNM's service territory. PNM's approved resources have a generation capacity of 1,360 1,165 MW. This includes approximately 310 305 MW of capacity under the Community Solar Act which will allow PNM to provide customers the option of accessing solar energy.

PNM will continue to seek approval to procure renewable resources while balancing the impact to customers' electricity costs in order to meet forecasted peak load requirements to serve its customers and New Mexico's escalating RPS and carbon-free resource requirements.

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The Company utilizes a number of communications channels and strategic content to serve and engage its many stakeholders. PNM's website provides the details of major regulatory filings, including general rate requests, as well as the background on PNM's efforts to maintain reliability, keep prices affordable, and protect the environment. TNMP's website provides information on customized energy efficiency programs and TNMP rates, in addition to other community outreach information. The Company's website is also a resource for information about PNM's operations and community outreach efforts including to customers on various topics such as education, outage alerts, safety, wildfire safety, customer service, community partnerships in philanthropic projects, and plans for building a sustainable energy future for New Mexico and to transition to a carbon-free generating portfolio by 2040. PNM also leverages social media in communications to communicate about some of these topics with certain customers. TNMP's website provides information on various topics such as education, outage alerts, safety, customer service, customized energy efficiency programs and PNM's community partnerships TNMP rates, in philanthropic projects. addition to other community outreach information. As discussed above, TXNM's corporate website includes a dedicated section providing additional information regarding the Company's commitment to sustainability.

Throughout 2025, PNM held in-person community events focused on wildfire safety and educating customers about the PNM's Public Safety Power Shutoff ("PSPS") process and wildfire mitigation efforts to protect the public. These gatherings are designed to share critical information, coordinate with local resources, and listen to feedback from local communities. PNM hosted four events in four High Fire Risk Areas ("HFRA"), across New Mexico, in 2025 and expects to host similar events in 2026. In addition, PNM has included local emergency managers in its periodic meetings referred to as "wildfire tabletops", in 2025. Each of these engagements builds and strengthens our preparedness as a Company, for wildfire prevention and preparedness, should such an event occur.

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Employee volunteers are the lifeblood of a healthy corporate culture. Community giving through volunteers' time and effort is at the heart of employee engagement. Throughout 2024, 2025, the Company held large-scale volunteer events, working alongside nonprofits, schools, and vulnerable communities throughout New Mexico and Texas. More than 600 640 employees in both states participated in the annual "Day of Service," a workday event encouraging employee volunteerism and serving more than 50 approximately 40 organizations. Throughout the year, employees volunteer their time generously through independent volunteer activities and board participation. Employees strengthen have strengthened community resilience by giving more than 6,000 close to 4,000 volunteer hours each year to support the health, safety, and well-being of diverse communities.

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In the 2023 and 2025 Texas Legislative sessions several bills were passed to support utility reliability and resiliency by encouraging and protecting utility infrastructure investments. Amongst the bills passed was DCRF legislation that adds a second filing per year and shortens the regulatory timeframe for the proceedings. Other bills include system resiliency and temporary mobile generation, which provide opportunities for added investment in TNMP's service territory and reduce uncertainty around rate recovery. Another bill directs ERCOT to develop reliability plans for the Permian Basin which could result in the need for additional investments in the West Texas service territory. Additionally, the Damaging Critical Infrastructure Bill helps protect TNMP's investments in response to criminal offenses damaging critical infrastructure facilities. HB 5247 incentivizes utilities who continue to invest in the Permian Basin territory by allowing for the deferral of costs, including depreciation expenses and carrying costs, of for qualifying investments in excess of 300 percent of annual depreciation, that are not currently reflected in rates, to a regulatory asset until such time a single, annual proceeding can be filed to adjust nonfuel rates. These pieces of legislation demonstrate that Texas continues to encourage utility investment and prioritizes timely rate recovery. TNMP will look to prioritize investments aligned with these measures that improve the quality of service for current and future customers.

The regulatory framework in Texas strongly encourages investments into the grid by providing timely recovery through rate mechanisms outside of general rate cases. The PUCT has approved mechanisms that allow TNMP to recover capital invested in transmission and distribution projects without having to file a general rate case. The PUCT also approved rate riders that allow TNMP to recover amounts related to energy efficiency and third-party transmission costs. TNMP also has approximately 280,000 281,000 advanced meters across its service territory, the costs of which are being recovered through base rates.

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The Site Readiness Bill creates a dedicated funding mechanism and a structured process for identifying, assessing, and preparing strategic economic development sites across the state, positioning New Mexico to compete with other states actively investing in site readiness. It appropriates approximately $24 million for the site readiness fund for site-characterization studies of proposed economic development sites and site preparations of strategic economic development sites. The Site Readiness Bill also creates the Strategic Economic Development Site Advisory Committee to advise the New Mexico Economic Development Department ("NMEDD") in selecting sites and awarding funding.

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The passage of the ETA requires amended the REA to require utilities operating in New Mexico to have renewable portfolios equal to 40% by 2025, 50% by 2030, 80% by 2040, and 100% zero-carbon energy by 2045. The ETA Those amendments also allows allow for the recovery of undepreciated investments and decommissioning costs related to qualifying EGUs that the NMPRC has required be removed from retail jurisdictional rates, provided replacement resources to be included in retail rates have lower or zero-carbon emissions. The ETA provides for a transition from fossil-fueled generating resources to renewable and other carbon-free resources by allowing utilities to issue securitized bonds related to the retirement of certain coal-fired generating facilities to qualified investors. ETBC I issued the ETBC I Securitized Bonds in November 2023 under the provisions of the ETA.

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In July 2025, PNM gave notice to the NMPRC of its intent to file its 2026 IRP and requested to initiate its stakeholder engagement process on or about December 1, 2025, while maintaining the required 2026 IRP filing date of September 1, 2026. In its request, PNM states that the additional time would ensure there is a fully interactive and engaging stakeholder process in developing the 20-year planning period. In August 2025, the NMPRC affirmed PNM's filing deadline of September 1, 2026 regardless of the early commencement date for the facilitated stakeholder process.

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On November 22, 2024, PNM filed an application with the NMPRC seeking approval of two 150 MW ESAs, a 167 MW PPA for the Valencia power plant, and a CCN for a 100 MW solar facility and a 30 MW battery, with a proposed additional 20 MW option, to be available to meet summer 2028 customer needs. On March 12, 2025, PNM and intervening parties filed an unopposed comprehensive stipulation with the NMPRC which supports approval of PNM's application, including the proposed option to increase the 30 MW battery by an additional 20 MW. On May 6, 2025, the hearing examiners issued a certification of stipulation recommending approval of the unopposed stipulation and on June 26, 2025, the NMPRC approved the unopposed stipulation. This matter is now concluded.

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The NMPRC has approved PNM recovering fuel costs through the FPPAC, as well as rate riders for renewable energy, energy efficiency, grid modernization, and the TEP. These mechanisms allow for more timely recovery of investments.

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The Board approved the following increases in the indicated annual common stock dividend:

TXNM targets a dividend payout ratio in the 50% to 60% range of its ongoing earnings. The Board will continue to evaluate the dividend on an annual basis, considering sustainability and growth, capital planning, and industry standards. The Board approved the following increases in the indicated annual common stock dividend:

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2024. Data center load, including distribution and transmission, has increased 71.7% and 86.8% in the three and six months ended June 30, 2025 compared to 2024.

TNMP – In the three and six nine months ended June September 30, 2025, TNMP experienced an increase in volumetric weather normalized retail load of 5.1% 3.5% and 3.2% 3.3% compared to 2024. Weather normalized demand-based load, excluding retail transmission and data center consumers, increased 2.6% 4.4% and 6.1% 1.2% in the three and six nine months ended June September 30, 2025 compared to 2024. Data center load, including distribution and retail transmission, has increased 91.9% and 102.7% in the three and nine months ended September 30, 2025 compared to 2024.

PNM – In the three and six nine months ended June September 30, 2025, PNM experienced a decrease an increase of 2.2% 3.1% and 0.6% 0.8% in weather normalized residential load. Weather normalized commercial load experienced a decrease of 2.8% and an increase of 2.9% and 2.3% 0.3% in the three and six nine months ended June September 30, 2025 compared to 2024. In addition, PNM experienced an increase in industrial load of 20.3% 12.9% and 20.4% 17.6% in the three and six nine months ended June September 30, 2025 compared to 2024.

The Company is closely monitoring the impacts on the capital markets of other macroeconomic conditions, including actions by the Federal Reserve to address inflationary concerns or and other market conditions, recently enacted federal legislation, and geopolitical activity, including the potential impacts of tariffs and the duration of the Government shutdown . The Company has not experienced, nor does it expect significant negative impacts to customer usage at PNM and TNMP resulting from these economic impacts. However, if current economic conditions worsen, the Company may be required to implement additional measures such as reducing or delaying operating and maintenance expenses and planned capital expenditures.

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Net earnings attributable to TXNM were $30.5 $161.2 million, or $0.32 $1.63 per diluted share, in the six nine months ended June September 30, 2025 compared to $95.2 $226.4 million, or $1.05 $2.50 per diluted share, in 2024. Among other things, earnings in the six nine months ended June September 30, 2025 benefited from higher transmission and distribution rates at TNMP, higher demand-based load at TNMP, colder weather at TNMP, higher weather normalized retail load at PNM and TNMP, and increased performance by PNM's NDT, coal mine reclamation, revenue at PNM approved in the 2025 Rate Change, and SJGS decommissioning investment securities. higher transmission margin at PNM. These increases were partially more than offset by higher operating expenses at PNM and TNMP, increased depreciation at PNM and TNMP due to increased plant in service, lower transmission margin at PNM, capacity arrangements at PNM, milder weather at PNM, and higher interest charges at PNM TNMP, and Corporate and Other. TNMP. Additional information on factors impacting results of operations for each segment is discussed below under Results of Operations.

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As of June September 30, 2025, TXNM, PNM, and TNMP had revolving credit facilities with capacities of $300.0 million, $440.0 million, and $200.0 million. Total availability for TXNM on a consolidated basis was $565.3 $614.0 million at July 25, October 24, 2025. The Company utilizes these credit facilities and cash flows from operations to provide funds for both construction and operational expenditures. TXNM also has intercompany loan agreements with each of its subsidiaries.

TXNM projects that its consolidated capital requirements, consisting of construction expenditures and dividends, will total $8.6 billion for 2025 - 2029, including amounts expended through June September 30, 2025. These construction expenditures include TNMP's investments to support continued high growth in system demand across TNMP's service territories and growing encouragement for infrastructure investments from the Texas legislature to support grid reliability and resilience. PNM's capital initiatives include investments in transmission and distribution infrastructure to deliver clean energy, enhance customer satisfaction, and increase grid resilience. Construction expenditures also include investments proposed in PNM's Grid Modernization Plan and TNMP's SRP.

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After considering the effects of these financings and the Company's short-term liquidity position as of July 25, October 24, 2025, the Company has consolidated maturities of long-term and short-term debt aggregating approximately $983.7 $825.5 million through July October 2026. In addition to internal cash generation, the Company anticipates that it will be necessary to obtain additional long-term financing in the form of debt refinancing, new debt issuances, and/or new equity, including those provided for under the Merger Agreement, in order to fund its capital requirements during the 2025-2029 period. The Company currently believes that its internal cash generation, existing credit arrangements, and access to public and private capital markets will provide sufficient resources to meet the Company's capital requirements for at least the next twelve months. As of June September 30, 2025 and July 25, October 24, 2025, the Company was in compliance with its debt covenants.

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Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

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June 30, 2025 June 30, 2025

TNMP $ (8.9) $ (1.2)

Corporate and Other (11.1) (16.1)

Net change $ (26.4) $ (64.7)

Three Months Ended Six Nine Months Ended

September 30, 2025 September 30, 2025

Corporate and Other 0.4 (15.8)

Net change $ (0.5) $ (65.2)

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Three Months Ended June 30, Six Months Ended June 30,

Gross margin $ 75.1 $ 73.8 $ 1.3 $ 141.4 $ 128.8 $ 12.6

Transmission and distribution costs 10.7 9.7 1.0 20.4 18.1 2.3

Depreciation and amortization 34.9 31.0 3.9 70.1 61.4 8.7

Utility margin $ 120.8 $ 114.5 $ 6.3 $ 231.9 $ 208.4 $ 23.5

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 Change 2025 2024 Change

Gross margin $ 97.3 $ 85.1 $ 12.2 $ 238.7 $ 213.9 $ 24.8

Transmission and distribution costs 9.0 8.5 0.5 29.4 26.7 2.7

Depreciation and amortization 35.0 31.7 3.3 105.1 93.1 12.0

Utility margin $ 141.3 $ 125.3 $ 16.0 $ 373.2 $ 333.7 $ 39.5

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Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30, (In millions)

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Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

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Operating Results – Three Months Ended June September 30, 2025, compared to 2024

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Depreciation and amortization (see below) (3.9) (3.3)

Higher vegetation management, outside services and employee related expenses, partially offset by lower vegetation management expenses, excluding administrative costs (1.0) (0.3)

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Transmission rate relief/load – Transmission cost of service rate increases in September 2024, and March 2025, more than and September 2025, partially offset by a decrease in ERCOT approved demand

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Volumetric-based consumer usage/load – Weather normalized KWh sales increased 5.1%; 3.5%; the number of volumetric consumers increased 1.8%

Demand-based consumer usage/load – Weather normalized demand-based MW sales for large commercial and industrial consumers excluding retail transmission consumers increased 2.3% 3.7%

Weather – Milder weather in Q2 Q3 2025

Decrease in deferral of excess deferred income tax benefits refunded through base rates (0.3) (1.1)

Rate Riders and other – Impacts of rate riders, including Includes transmission cost recovery factor and energy efficiency rider which are partially offset in operating expenses

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Higher allocated depreciation and amortization expense from Corporate and Other

Higher Lower vegetation management expenses, partially offset by higher outside services and employee related expenses

Higher capitalization of administrative and general expenses due to higher construction expenditures (0.9) (0.3)

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Higher insurance premiums primarily related to wildfire risk (0.3)

Costs related to the Merger

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Higher equity AFUDC $ 0.2 1.4

Interest on Texas Sales and Use Tax refund

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Higher Lower interest on revolving short-term borrowings (0.8)

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Lower Higher segment earnings before income taxes

Lower Higher amortization of excess deferred income taxes

Impacts of higher equity AFUDC

Operating Results – Six Nine Months Ended June September 30, 2025 compared to 2024

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Depreciation and amortization (see below) (8.7) (12.0)

Higher employee related, outside services, and vegetation management expenses, excluding administrative costs (2.1) (2.4)

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Transmission rate relief/load – Transmission cost of service rate increases in March 2024, September 2024, and March 2025, and September 2025, partially offset by a decrease in ERCOT approved demand

Distribution rate relief – Distribution cost of service rate increase increases in July 2024, November 2024, and June 2025

Volumetric-based consumer usage/load – Weather normalized KWh sales increased 3.2%; 3.3%; the number of volumetric consumers increased 1.8%

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and 165 more changes in the filing

Market risk 16 changes

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Information concerning accounting for derivatives and the risks associated with commodity contracts is set forth in Note 7, including a summary of the fair values of mark-to-market energy related derivative contracts included in the Condensed Consolidated Balance Sheets. During the six nine months ended June September 30, 2025, and the year ended December 31, 2024, the Company had no commodity derivative instruments designated as cash flow hedging instruments.

Commodity contracts that meet the definition of a derivative are recorded at fair value on the Condensed Consolidated Balance Sheets. In the six nine months ended June September 30, 2025 and 2024, the effects of mark-to-market commodity derivative instruments had no impact to PNM's net earnings and $3.2 $5.7 million of fair value gains and $4.5 $0.8 million of fair value losses have been recorded as a regulatory asset. All of the fair values as of June September 30, 2025 and December 31, 2024, were determined based on prices provided by external sources other than actively quoted market prices. The net mark-to-market amounts will settle by the end as of September 30, 2025 were zero.

PNM may be exposed to changes in the market prices of electricity and natural gas for the positions in its wholesale portfolio not covered by the FPPAC. The Company manages risks associated with market fluctuations by utilizing various commodity instruments that may qualify as derivatives, including futures, forwards, options, and swaps. PNM uses such instruments to hedge its exposure to changes in the market prices of electricity and natural gas. PNM also uses such instruments under an NMPRC approved hedging plan, from time-to-time, to manage fuel and purchased power costs related to customers covered by its FPPAC.

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Investment grade $ 1,837 1,513 2 $ 1,519 1,755

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Investment grade 230 — —

Investment grade 1,466 — —

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Total $ 2,067 $ 1,519

Total $ 2,979 $ 1,755

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(2) The Credit Risk Exposure is the gross credit exposure, including long-term contracts, forward sales, and short-term sales. The gross exposure captures the amounts from receivables/payables for realized transactions, delivered and unbilled revenues, and mark-to-market gains/losses. Gross exposures can be offset according to legally enforceable netting arrangements but are not reduced by posted credit collateral. At June September 30, 2025, TXNM held no cash collateral to offset its credit exposure.

Net credit risk for the Company's largest counterparty as of June September 30, 2025, was $1.1 $0.9 million.

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At July 25, October 24, 2025, variable rate debt balances and weighted average interest rates were as follows:

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PNM Revolving Credit Facility 5.69 231,800 5.38 122,900 400,000

PNM New Mexico Credit Facility 5.70 5.35 40,000 40,000

TNMP Revolving Credit Facility 5.28 14,300 — — 200,000

The investments held by PNM in trusts for decommissioning and reclamation had an estimated fair value of $487.0 $493.9 million at June September 30, 2025, of which 10.4% 9.1% were fixed-rate debt securities that subject PNM to risk of loss of fair value with increases in market interest rates. If interest rates were to increase by 50 basis points from their levels at June September 30, 2025, the decrease in the fair value of the fixed-rate securities would be 0.3%, 0.2%, or $0.2 $0.1 million.

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The investments held by PNM in trusts for decommissioning and reclamation include certain equity securities at June September 30, 2025. These equity securities expose PNM to losses in fair value should the market values of the underlying securities decline. Equity securities comprised 82.7% 85.0% of the securities held by the trusts as of June September 30, 2025. A hypothetical 10% decrease in equity prices would reduce the fair values of these funds by $40.3 $42.0 million.

Controls and procedures 2 changes

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2025, that have materially affected, or are reasonably likely to materially affect, each of TXNM's, PNM's, and TNMP's internal control over financial reporting.

There have been no changes in each of TXNM's, PNM's, and TNMP's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended June September 30, 2025, that have materially affected, or are reasonably likely to materially affect, each of TXNM's, PNM's, and TNMP's internal control over financial reporting.

Legal proceedings 2 changes

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• PNM – 2024 Rate Change

• TXNM – Merger Related Regulatory Applications

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Risk factors 1 change

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Completion of the proposed Merger is subject to the satisfaction or waiver of a number of conditions as set forth in the Merger Agreement, including approval by the holders of at least a majority of outstanding shares of TXNM common stock entitled to vote thereon, regulatory approvals and other customary closing conditions. There can be no assurance that the conditions to completion of the proposed Merger will be satisfied or waived or that other events will not intervene to delay or result in the failure to close the proposed Merger. In addition, each of Blackstone Infrastructure and TXNM may unilaterally terminate the Merger Agreement under certain circumstances, and Blackstone Infrastructure and TXNM may agree at any time to terminate the Merger Agreement, even if TXNM shareholders have already approved the Merger Agreement and thereby approved the Merger and the other transactions contemplated by the Merger Agreement.

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Other information 6 changes

On July 31, 2025, PNM, entered into the PNM July 2025 Note Purchase Agreement with the institutional investor parties thereto for the sale of $350.0 million aggregate principal amount of senior unsecured notes in the following series and denominations: (i) $200.0 million aggregate principal amount of its 5.47% Senior Unsecured Notes, Series C, due July 31, 2031, and (ii) $150.0 million aggregate principal amount of its 6.03% Senior Unsecured Notes, Series D, due July 31, 2036 (the "PNM July 2025 SUNs"). The PNM July 2025 SUNs were issued on July 31, 2025 in a private placement transaction in reliance on an exemption from registration under the Securities Act. Interest on the PNM July 2025 SUNs is payable semiannually on January 31 and July 31 of each year, commencing on January 31, 2026.

PNM will use the gross proceeds from the PNM July 2025 SUNs for the repayment of existing indebtedness, funding of capital expenditures, and general corporate purposes.

The terms of the PNM July 2025 Note Purchase Agreement, which continue to apply so long as any of the PNM July 2025 SUNs are outstanding, include customary covenants, including a covenant that requires PNM to maintain a debt-to-capitalization ratio of less than or equal to 65%, customary events of default, including a cross-default provision, and covenants regarding parity of financial covenants, liens and guarantees with respect to PNM's material credit facilities. In the event of a change of control (as defined in the PNM July 2025 Note Purchase Agreement), PNM will be required to offer to prepay the PNM July 2025 SUNs at par. The proposed transaction between TXNM and Blackstone Infrastructure would not constitute a change in control under the PNM July 2025 SUNs. PNM has the right to redeem any or all of the PNM July 2025 SUNs prior to their maturities, subject to payment of a customary make-whole premium.

The foregoing description is qualified in its entirety by the PNM July 2025 Note Purchase Agreement, which is filed as Exhibit 10.12 to this Form 10-Q and is incorporated herein by reference.

The PNM July 2025 SUNs are not registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements and applicable state laws. This Form 10-Q does not constitute an offer to sell nor a solicitation of an offer to purchase the PNM July 2025 SUNs or any other securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

During the three months ended June September 30, 2025, no director or officer (as defined by Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.