Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | | FORM 10-Q | | --- | --- | | (Mark One) | | | ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | For the quarterly period ended March 31, 2023 | | ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | For the transition period from _________ to _________ | | | Name of Registrant, State of Incorporation, Address Of Principal E ...

Part I [Item 1. Business](index=10&type=section&id=Item%201.%20Business) PNMR is a utility holding company serving 815,000 customers, pursuing an emissions-free portfolio by 2040 and a merger with Avangrid - PNMR is an investor-owned holding company with two regulated utilities, PNM and TNMP, serving approximately **815,000 customers** in New Mexico and Texas[24](index=24&type=chunk) - The company is pursuing a merger with Avangrid, Inc., pending approval from the New Mexico Public Regulation Commission (NMPRC) with an extended agreement end date of **April 20, 2023**[29](index=29&type=chunk)[31](index=31&type=chunk) - PNMR's strategy aims for an **emissions-free generating portfolio by 2040** and being coal-free by 2024, subject to regulatory approval[24](index=24&type=chunk)[34](index=34&type=chunk) [Operations and Regulation](index=11&type=section&id=Operations%20and%20Regulation) PNM's retail electric service is regulated by NMPRC, with a pending **$63.8 million rate increase** filed in 2022 - PNM's retail electric service is regulated by the NMPRC, with a **$63.8 million rate increase** filed in December 2022 to recover infrastructure investments[39](index=39&type=chunk)[45](index=45&type=chunk) - PNM is investing approximately **$344 million** over six years in grid modernization to enhance system efficiency and reliability[46](index=46&type=chunk) - TNMP operates as a transmission and distribution utility in Texas, receiving interim rate adjustments to recover capital investments without full rate cases[53](index=53&type=chunk)[61](index=61&type=chunk) PNM Retail Customer System Peak Demands (Megawatts) | Season | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Summer | 2,139 | 1,968 | 1,974 | | Winter | 1,526 | 1,518 | 1,460 | [Sources of Power](index=14&type=section&id=Sources%20of%20Power) PNM is transitioning its power sources by retiring coal plants and increasing its renewable energy portfolio PNM Generation Capacity by Type (as of Dec 31, 2022) | Type | Capacity (MW) | Percent of Total | | :--- | :--- | :--- | | Coal | 200 | 7.5% | | Gas-fired | 1,001 | 37.6% | | Nuclear | 402 | 15.1% | | Renewable | 1,057 | 39.8% | | **Total** | **2,660** | **100.0%** | - PNM is transitioning by retiring coal plants, with San Juan Generating Station (SJGS) fully retired in **September 2022**, and an appeal pending to exit Four Corners Power Plant by **end of 2024**[65](index=65&type=chunk)[66](index=66&type=chunk)[50](index=50&type=chunk) - PNM is increasing its renewable energy portfolio, with NMPRC approval to procure an additional **1,090 MW** from solar-PV and **620 MW** from battery storage[70](index=70&type=chunk)[64](index=64&type=chunk) - PNM's leased capacity in Palo Verde Nuclear Generating Station (PVNGS) Unit 1 expired in **January 2023**, with Unit 2's lease expiring in **January 2024**[69](index=69&type=chunk)[64](index=64&type=chunk) [Fuel Supply](index=17&type=section&id=Fuel%20Supply) PNM manages fuel supply, with coal contracts expiring and nuclear fuel stored on-site, facing DOE non-compliance PNM Generation Fuel Mix and Cost (2022 vs. 2021) | Fuel | 2022 % of Generation | 2022 Avg. Cost ($/MMBTU) | 2021 % of Generation | 2021 Avg. Cost ($/MMBTU) | | :--- | :--- | :--- | :--- | :--- | | Coal | 36.7% | $2.97 | 44.3% | $3.02 | | Nuclear | 35.4% | $0.73 | 34.8% | $0.68 | | Gas | 23.9% | $7.61 | 16.8% | $6.02 | - The coal supply contract for SJGS expired in **September 2022**, while the Four Corners contract runs through **July 2031**, pending PNM's appeal to exit by **end of 2024**[80](index=80&type=chunk) - All spent nuclear fuel from PVNGS is stored on-site with capacity until **2027**, but the DOE has failed to accept spent fuel, leading to legal actions[86](index=86&type=chunk)[84](index=84&type=chunk) [Human Capital Resources](index=19&type=section&id=Human%20Capital%20Resources) PNMR's workforce of **1,537 employees** includes 34% unionized, 28% women, and 53% minorities Employee Count as of December 31, 2022 | Entity | Employee Count | | :--- | :--- | | PNMR (Consolidated) | 1,537 | | PNM | 751 | | TNMP | 367 | - As of **December 31, 2022**, PNMR's workforce of **1,537 employees** includes **34%** represented by a bargaining unit, **28%** women, and **53%** minorities[96](index=96&type=chunk) - Collective bargaining agreements are in place with the IBEW for **325 PNM** and **193 TNMP** employees[98](index=98&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant regulatory, operational, and financial risks, including merger uncertainties and environmental compliance costs - Profitability is highly dependent on recovering costs and earning fair returns through regulated rates, with adverse NMPRC decisions on Four Corners and PVNGS investments posing financial risk[106](index=106&type=chunk)[113](index=113&type=chunk) - The proposed merger with Avangrid is not assured, subject to NMPRC approval, and its pendency could disrupt business and restrict strategic opportunities[164](index=164&type=chunk)[167](index=167&type=chunk) - The company faces significant environmental and climate change compliance costs, particularly for fossil-fueled generation, which constitutes **45.1%** of PNM's electricity[120](index=120&type=chunk)[121](index=121&type=chunk) - The company faces risks of physical and cybersecurity attacks on critical infrastructure, potentially disrupting power, causing data loss, and incurring significant costs[139](index=139&type=chunk)[142](index=142&type=chunk) [Item 2. Properties](index=33&type=section&id=Item%202.%20Properties) PNM and TNMP own extensive electric transmission and distribution infrastructure, including thousands of miles of lines and hundreds of substations - As of **December 31, 2022**, PNM owned **3,428 miles** of transmission lines, **11,824 miles** of distribution lines, and **250 substations**[187](index=187&type=chunk) - As of **December 31, 2022**, TNMP owned **992 miles** of transmission lines, **8,752 miles** of distribution lines, and **128 substations**[188](index=188&type=chunk) [Item 3. Legal Proceedings](index=33&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Notes 16 and 17 of the financial statements - Information regarding legal proceedings is incorporated by reference from **Note 16** and **Note 17** of the financial statements[189](index=189&type=chunk) Part II [Item 5. Market for PNMR's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=34&type=section&id=Item%205.%20Market%20for%20PNMR%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) PNMR's common stock trades on the NYSE, with the Board increasing the quarterly dividend twice in 2022 - PNMR's common stock is traded on the NYSE under the symbol **"PNM"**, with **7,232 holders of record** as of **February 17, 2023**[194](index=194&type=chunk)[196](index=196&type=chunk) - The Board increased the quarterly dividend twice in **2022**, from **$0.3275 to $0.3475** per share in February, and to **$0.3675** per share in December[195](index=195&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) PNMR's 2022 net earnings decreased to **$169.5 million** due to investment performance and higher expenses, offset by transmission margins and customer load PNMR Net Earnings Summary (2022 vs. 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Earnings Attributable to PNMR | $169.5 million | $195.8 million | | Diluted EPS | $1.97 | $2.27 | - The **2022** earnings decrease was driven by poor investment securities performance in NDT, FERC-ordered refunds, and increased operating, depreciation, and interest expenses[279](index=279&type=chunk) - The company projects consolidated capital requirements of **$5.2 billion** for **2023-2027**, primarily for construction expenditures and dividends[281](index=281&type=chunk)[318](index=318&type=chunk) - As of **February 17, 2023**, PNMR had total consolidated liquidity of **$522.4 million** available under its revolving credit facilities[280](index=280&type=chunk)[333](index=333&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) PNM's segment earnings decreased by **$52.1 million**, while TNMP's increased by **$28.4 million** Change in Net Earnings by Segment (2022 vs 2021) | Segment | Change (in millions) | | :--- | :--- | | PNM | $(52.1) | | TNMP | $28.4 | | Corporate and Other | $(2.5) | | **Net Change** | **$(26.3)** | - PNM's segment earnings decreased by **$52.1 million**, primarily due to a **$95.2 million** decline in investment securities performance, partially offset by a **$65.2 million** increase in transmission margin[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) - TNMP's segment earnings increased by **$28.4 million**, driven by rate relief, higher customer demand, and warmer weather[298](index=298&type=chunk)[299](index=299&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and investment-grade credit ratings, supporting projected **$5.2 billion** in capital requirements Consolidated Cash Flow Summary (in millions) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $567.3 | $547.9 | | Net Cash used in Investing Activities | $(950.3) | $(952.3) | | Net Cash from Financing Activities | $386.0 | $357.6 | Projected Capital Requirements (2023-2027, in millions) | Category | Amount | | :--- | :--- | | Construction expenditures | $4,602.1 | | Dividends on PNMR common stock | $630.9 | | Dividends on PNM preferred stock | $2.6 | | **Total capital requirements** | **$5,235.6** | - The company maintains **investment-grade credit ratings** from both Moody's and S&P for PNMR, PNM, and TNMP[330](index=330&type=chunk)[331](index=331&type=chunk) [Other Issues Facing the Company](index=62&type=section&id=Other%20Issues%20Facing%20the%20Company) The company actively manages climate change risks, aiming for a **100% emissions-free portfolio by 2040** - The company actively manages climate change risks, aiming for a **100% emissions-free generating portfolio by 2040**, aligning with a "2 Degree Scenario" pathway[346](index=346&type=chunk)[370](index=370&type=chunk) - The retirement of SJGS in **2022** resulted in a **67% reduction** in GHG emissions from **2021** levels, with a potential **88%** total reduction upon Four Corners exit[350](index=350&type=chunk) - The New Mexico Energy Transition Act (ETA) mandates an **80% renewable portfolio by 2040** and **100% zero-carbon energy by 2045**, significantly impacting PNM's generation portfolio[366](index=366&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risk, including commodity, credit, and interest rate risks, with **$1.2 billion** in variable-rate debt - The company is exposed to interest rate risk on its variable rate debt, totaling approximately **$1.2 billion** as of **February 17, 2023**[407](index=407&type=chunk) - PNM is exposed to credit risk from wholesale counterparties, with a total net exposure of **$53.9 million** as of **December 31, 2022**, and a largest single counterparty exposure of **$44.9 million**[404](index=404&type=chunk) - The company faces equity market risk from trust investments, where a hypothetical **10% decrease** in equity prices would reduce fair value by **$35.6 million** for PNM and **$2.3 million** for TNMP[410](index=410&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=73&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for PNMR, PNM, and TNMP, along with management's and auditor's reports on internal controls - This item includes the audited consolidated financial statements for PNMR, PNM, and TNMP, covering balance sheets, earnings, cash flows, and equity changes[414](index=414&type=chunk) - Management concluded internal controls were effective as of **December 31, 2022**, a conclusion concurred by independent auditor KPMG LLP[416](index=416&type=chunk)[417](index=417&type=chunk) [Item 9A. Controls and Procedures](index=196&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of **December 31, 2022**, with no material changes in internal control - Management for PNMR, PNM, and TNMP concluded their disclosure controls and procedures were effective as of **December 31, 2022**[1058](index=1058&type=chunk)[1062](index=1062&type=chunk)[1066](index=1066&type=chunk) - No material changes in internal control over financial reporting occurred during the **fourth quarter of 2022**[1060](index=1060&type=chunk)[1064](index=1064&type=chunk)[1068](index=1068&type=chunk) Part III [Item 10. Directors, Executive Officers, and Corporate Governance](index=197&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 Proxy Statement - This section incorporates information by reference from the company's **2023 Proxy Statement**[1072](index=1072&type=chunk) [Item 11. Executive Compensation](index=197&type=section&id=Item%2011.%20Executive%20Compensation) Information on director and executive compensation is incorporated by reference from the 2023 Proxy Statement - This section incorporates information by reference from the company's **2023 Proxy Statement**[1073](index=1073&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=197&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and equity compensation plans is incorporated by reference from the 2023 Proxy Statement - This section incorporates information by reference from the company's **2023 Proxy Statement**[1074](index=1074&type=chunk) [Item 13. Certain Relationships and Related Transactions and Director Independence](index=197&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information on related person transactions and director independence is incorporated by reference from the 2023 Proxy Statement - This section incorporates information by reference from the company's **2023 Proxy Statement**[1075](index=1075&type=chunk) [Item 14. Principal Accounting Fees and Services](index=197&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the 2023 Proxy Statement - This section incorporates information by reference from the company's **2023 Proxy Statement**[1076](index=1076&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=198&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K report - This section provides an index of all financial statements, schedules, and exhibits included in or incorporated by reference into the **Form 10-K** filing[1079](index=1079&type=chunk)[1080](index=1080&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Name of Registrant, State of Incorporation, Address Of Principal Executive Offices, Telephone Number, Commission Fil ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | | FORM 10-Q | | --- | --- | | (Mark One) | | | ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | For the quarterly period ended June 30, 2022 | | ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | For the transition period from _________ to _________ | | | Name of Registrant, State of Incorporation, Address Of Principal Ex ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Name of Registrant, State of Incorporation, Address Of Principal Executive Offices, Telephone Number, Commission File No ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Name of Registrant, State of Incorporation, Address Of Principal Executive Offices, Telephone Number, Commission File No., IR ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ☒ For the quarterly period ended September 30, 2021 Name of Registrant, State of Incorporation, Address Of Principal Executive Offices, Telephone Number, Commission File No., IRS Employer Identification No. PNM Resources, Inc. (A New Mexico Corporation) 414 Silver Ave. SW Albuquerque, New Mexico 87102-3289 Telep ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ☒ For the quarterly period ended June 30, 2021 Name of Registrant, State of Incorporation, Address Of Principal Executive Offices, Telephone Number, Commission File No., IRS Employer Identification No. PNM Resources, Inc. (A New Mexico Corporation) 414 Silver Ave. SW Albuquerque, New Mexico 87102-3289 Telephone ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 Name of Registrant, State of Incorporation, Address Of Principal Executive Offices, Telephone Number, Commission File No., IRS Employer Identification No. PNM Resources, Inc. (A New Mexico Corporation) 414 Silver Ave. SW Albuquerque, New Mexico 87102-3289 Telephone ...

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 Name of Registrant, State of Incorporation, Address Of Principal Executive Offices, Telephone Number, Commission File No., IRS Employer Identification No. Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) (A New Mexico Corporation) 414 Silver Ave. SW Albuquerque, New Mexico 87102-3289 Telephone Number - (505) 241-2700 Co ...