TXNM Energy Reports Third Quarter 2025 Results

TXNM Energy (In millions, except EPS)

Q3 2025

Q3 2024

YTD 2025

YTD 2024

GAAP net earnings attributable to TXNM Energy

$130.7

$131.2

$161.2

$226.4

GAAP diluted EPS

$1.22

$1.45

$1.63

$2.50

Ongoing net earnings

$142.8

$129.3

$185.5

$220.6

Ongoing diluted EPS

$1.33

$1.43

$1.87

$2.44

ALBUQUERQUE, N.M., Oct. 31, 2025 /PRNewswire/ -- TXNM Energy (NYSE: TXNM) today released its 2025 third quarter results. As previously announced, TXNM Energy is not affirming previously issued earnings guidance for 2025 and does not plan to issue revised earnings guidance during the pending transaction.

"Third quarter results incorporate the implementation of the first phase of approved rates in New Mexico and newly approved transmission recovery in Texas, along with additional equity issued during the quarter," said Don Tarry, President and CEO of TXNM Energy. "We have initiated the regulatory approval process for our transaction with Blackstone Infrastructure with filings that address the key issues raised during our conversations with local stakeholders and community groups. We look forward to continued conversations through the regulatory process and achieving the best path forward to invest in positive outcomes for our customers and communities across New Mexico and Texas."

TRANSACTION UPDATE

On May 19, 2025, TXNM Energy announced an agreement under which affiliates of Blackstone Infrastructure will acquire the outstanding common stock of TXNM Energy for $61.25 per share. Shareholders approved the transaction on August 28, 2025.

The transaction is subject to regulatory approvals from the New Mexico Public Regulation Commission ("NMPRC"), Public Utility Commission of Texas ("PUCT"), Federal Energy Regulatory Commission ("FERC"), Department of Justice (Hart Scott-Rodino Clearance), Nuclear Regulatory Commission and Federal Communications Commission. On August 25, 2025, applications were filed with the NMPRC, PUCT and FERC.

TXNM Energy continues to anticipate that the closing of the acquisition will occur in the second half of 2026, subject to the satisfaction or waiver of the customary closing conditions, including among other things, receipt of required state and federal regulatory approvals.

REGULATORY UPDATE

TNMP's second Transmission Cost of Service (TCOS) filing for 2025 was approved and implemented in the third quarter, providing recovery for $87 million of rate base. On July 31, 2025, TNMP filed its second Distribution Cost Recovery Factor (DCRF) application, seeking recovery for an additional $28 million of rate base to support ongoing investment in distribution infrastructure.

On August 6, 2025, PNM filed an application with the NMPRC for approval of a CCN to construct, own, and operate 30 megawatts of energy storage. The application consists of six megawatt batteries to be constructed at five existing PNM-owned solar facilities at an estimated cost of $78 million. These investments will provide more flexibility to our grid and to assist in serving our summer peak season when operational.

SEGMENT REPORTING OF 2025 THIRD QUARTER EARNINGS

EPS Results by Segment

GAAP Diluted EPS

Ongoing Diluted EPS

Q3 2025

Q3 2024

Q3 2025

Q3 2024

PNM

$0.95

$1.20

$0.98

$1.18

TNMP

$0.38

$0.39

$0.46

$0.39

Corporate and Other

($0.11)

($0.14)

($0.11)

($0.14)

Consolidated TXNM Energy

$1.22

$1.45

$1.33

$1.43

Net changes to GAAP and ongoing earnings in the third quarter of 2025 compared to the third quarter of 2024 include:

GAAP and ongoing earnings per share were reduced in the third quarter of 2025 by shares issued as part of 2024 forward sales agreements of $150 million, as well as shares issued in June and August 2025 for proceeds of $800 million.

In addition, GAAP earnings in the third quarter of 2025 included $2.1 million of net unrealized losses on investment securities compared to $9.5 million of net unrealized gains in the third quarter of 2024. GAAP earnings in the third quarter of 2025 included $14.0 million of costs related to the planned acquisition. GAAP earnings in the third quarter of 2024 included $6.1 million of regulatory disallowances.

Background:

TXNM Energy (NYSE: TXNM), an energy holding company based in Albuquerque, New Mexico, delivers energy to more than 800,000 homes and businesses across Texas and New Mexico through its regulated utilities, TNMP and PNM. For more information, visit the company's website at www.TXNMEnergy.com.

CONTACTS:

Analysts

Media

Lisa Goodman

Corporate Communications

(505) 241-2160

(505) 241-2743

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

Statements made in this press release that relate to future events or expectations, projections, estimates, intentions, goals, targets, and strategies are made pursuant to the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally include statements regarding the potential transaction between TXNM Energy and Blackstone Infrastructure, including any statements regarding the expected timetable for completing the potential transaction, the ability to complete the potential transaction, the expected benefits of the potential transaction, projected financial information, future opportunities, and any other statements regarding TXNM Energy's and Blackstone Infrastructure's future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows, or future events or performance. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates. Neither Blackstone Infrastructure nor TXNM Energy assumes any obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, TXNM Energy caution readers not to place undue reliance on these statements. TXNM Energy's business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond its control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. For a discussion of risk factors and other important factors affecting forward-looking statements, please see TXNM Energy's Form 10-K and Form 10-Q filings and the information filed on TXNM Energy's Forms 8-K with the Securities and Exchange Commission (the "SEC"), which factors are specifically incorporated by reference herein and the risks and uncertainties related to the proposed transaction with Blackstone Infrastructure, including, but not limited to: the expected timing and likelihood of completion of the pending transaction, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the pending transaction that could reduce anticipated benefits or cause the parties to abandon the transaction, the occurrence of any event, change or other circumstances that could give rise to the termination of the transaction agreement, including in circumstances requiring the Company to pay a termination fee, the possibility that TXNM Energy's shareholders may not approve the transaction agreement, the risk that the parties may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all, the outcome of legal proceedings that may be instituted against TXNM Energy, its directors and others related to the proposed transaction, risks related to disruption of management time from ongoing business operations due to the proposed transaction, the risk that the proposed transaction and its announcement could have an adverse effect on the ability of TXNM Energy to retain and hire key personnel and maintain relationships with its customers and suppliers, and on its operating results and businesses generally, the amount of costs, fees, charges or expenses resulting from the proposed transaction, and the risk that the price of TXNM Energy's common stock may fluctuate during the pendency of the proposed transaction and may decline significantly if the proposed transaction is not completed. Other unpredictable or unknown factors not discussed in this communication could also have material adverse effects on forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

Non-GAAP Financial Measures

GAAP refers to generally accepted accounting principles in the U.S. Ongoing earnings is a non-GAAP financial measure that excludes the impact of net unrealized mark-to-market gains and losses on economic hedges, the net change in unrealized gains and losses on investment securities, pension expense related to previously disposed of gas distribution business, and certain non-recurring, infrequent, and other items that are not indicative of fundamental changes in the earnings capacity of the Company's operations. The Company uses ongoing earnings and ongoing earnings per diluted share to evaluate the operations of the Company and to establish goals, including those used for certain aspects of incentive compensation, for management and employees. While the Company believes these financial measures are appropriate and useful for investors, they are not measures presented in accordance with GAAP. The Company does not intend for these measures, or any piece of these measures, to represent any financial measure as defined by GAAP. Furthermore, the Company's calculations of these measures as presented may or may not be comparable to similarly titled measures used by other companies. Reconciliations between GAAP and ongoing earnings are contained in schedules 1-4.

TXNM Energy, Inc. and Subsidiaries

Schedule 1

Reconciliation of GAAP to Ongoing Earnings

(Unaudited)

PNM

TNMP

Corporate

and Other

TXNM

Consolidated

(in thousands)

Three Months Ended September 30, 2025

GAAP Net Earnings (Loss) Attributable to TXNM

$ 102,429

$ 41,130

$ (12,849)

$ 130,710

Adjusting items before income tax effects:

Net change in unrealized (gains) losses on investment securities 2a

2,061

—

2,061

Pension expense related to previously disposed of gas distribution business 2c

784

—

784

Regulatory disallowances 2d

(731)

—

(731)

Process improvement initiatives 2e

132

—

133

Merger related costs 2f

926

10,332

2,729

13,987

Total adjustments before income tax effects

3,172

10,332

2,730

16,234

Income tax impact of above adjustments 1

(805)

(2,170)

(694)

(3,669)

Timing of statutory and effective tax rates on non-recurring items 4

319

(10)

(754)

(445)

Total income tax impacts 3

(486)

(2,180)

(1,448)

(4,114)

Adjusting items, net of income taxes

2,686

8,152

1,282

12,120

Ongoing Earnings (Loss)

$ 105,115

$ 49,282

$ (11,567)

$ 142,830

Nine Months Ended September 30, 2025

GAAP Net Earnings (Loss) Attributable to TXNM

$ 127,736

$ 84,381

$ (50,908)

$ 161,209

Adjusting items before income tax effects:

Net change in unrealized (gains) losses on investment securities 2a

(6,322)

—

(6,322)

Rate Request settlement 2b

1,500

—

1,500

Pension expense related to previously disposed of gas distribution business 2c

2,352

—

2,352

Regulatory disallowances 2d

(731)

—

(731)

Process improvement initiatives 2e

592

—

156

748

Merger related costs 2f

926

17,103

17,093

35,122

Total adjustments before income tax effects

(1,683)

17,103

17,249

32,669

Income tax impact of above adjustments 1

428

(3,592)

(4,381)

(7,545)

Timing of statutory and effective tax rates on non-recurring items 4

(1,349)

460

(874)

Total income tax impacts 3

(921)

(3,577)

(3,921)

(8,419)

Adjusting items, net of income taxes

(2,604)

13,526

13,328

24,250

Ongoing Earnings (Loss)

$ 125,132

$ 97,907

$ (37,580)

$ 185,459

1 Tax effects calculated using a tax rate of 21.0% for TNMP and 25.4% for other segments

2 The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Condensed Consolidated Statements of Earnings as follows:

a Changes in "Gains on investment securities" reflecting non-cash performance relative to market, not indicative of funding requirements

b Increases in "Administrative and general"

c Increases in "Other (deductions)"

d Decreases in "Regulatory disallowances"

e Increases in "Energy production costs" of less than $0.1 million and $0.2 million, in "Transmission and distribution costs" of less than $0.1 million and $0.1 million, and in "Administrative and general" of $0.1 million and $0.2 million for the three and nine months ended September 30, 2025 at PNM and increase of $0.2 million in "Administrative and general" at Corporate and Other for the nine months ended September 30, 2025

f Increases in "Administrative and general" of $0.9 million and $0.9 million at PNM for the three and nine months ended September 30, 2025; Increases in "Administrative and general" of $0.7 million and $0.9 million and increases in "Interest charges" of $9.6 million and $16.2 million at TNMP for the three and nine months ended September 30, 2025; Increases in "Administrative and general" at Corporate and Other of $2.7 million and $17.1 million for the three and nine months ended September 30, 2025

3 Increases (decreases) in "Income Taxes (Benefits)"

4 Income tax timing impacts resulting from differences between the statutory rates of 25.4% for PNM, 21.0% for TNMP and the average expected statutory tax rate of 22.7% for TXNM, and the GAAP anticipated effective tax rates of 9.6% for PNM, 20.4% for TNMP, and 13.0% for TXNM, which will reverse by year end

TXNM Energy, Inc. and Subsidiaries

Schedule 2

Reconciliation of GAAP to Ongoing Earnings

(Unaudited)

PNM

TNMP

Corporate

and Other

TXNM

Consolidated

(in thousands)

Three Months Ended September 30, 2024

GAAP Net Earnings (Loss) Attributable to TXNM

$ 108,666

$ 35,695

$ (13,159)

$ 131,202

Adjusting items before income tax effects:

Net change in unrealized (gains) losses on investment securities 2a

(9,546)

—

(9,546)

Regulatory disallowances 2b

6,142

—

6,142

Pension expense related to previously disposed of gas distribution business 2c

433

—

433

Merger related costs 2d

—

479

Total adjustments before income tax effects

(2,971)

—

479

(2,492)

Income tax impact of above adjustments 1

754

—

(121)

633

Total income tax impacts 4

754

—

(121)

633

Adjusting items, net of income taxes

(2,217)

—

358

(1,859)

Ongoing Earnings (Loss)

$ 106,449

$ 35,695

$ (12,801)

$ 129,343

Nine Months Ended September 30, 2024

GAAP Net Earnings (Loss) Attributable to TXNM

$ 181,373

$ 80,203

$ (35,135)

$ 226,441

Adjusting items before income tax effects:

Net change in unrealized (gains) losses on investment securities 2a

(16,204)

—

(16,204)

Regulatory disallowances 2b

10,847

—

10,847

Pension expense related to previously disposed of gas distribution business 2c

1,299

—

1,299

Merger related costs 2d

134

(22)

2,128

2,240

Sale of NMRD 3

—

15,097

Total adjustments before income tax effects

(3,924)

(22)

17,225

13,279

Income tax impact of above adjustments 1

997

(4,375)

(3,374)

Sale of NMRD 3

—

(15,712)

Total income tax impacts 4

997

(20,087)

(19,086)

Adjusting items, net of income taxes

(2,927)

(18)

(2,862)

(5,807)

Ongoing Earnings (Loss)

$ 178,446

$ 80,185

$ (37,997)

$ 220,634

1Tax effects calculated using a tax rate of 21.0% for TNMP and 25.4% for other segments

2 The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Condensed Consolidated Statement of Earnings as follows:

a Changes in "Gains on investment securities" reflecting non-cash performance relative to market, not indicative of funding requirements

b Increase in "Regulatory disallowances" of $6.1 million and $10.6 million for the three and nine months ended September 30, 2024 and a decrease in "Electric Operating Revenue" of zero and $0.2 million for the three and nine months ended September 30, 2024

c Increases in "Other (deductions)"

d Increases (decreases) in "Administrative and general", including $0.4 million related to rebranding costs in the three and nine months ended September 30, 2024

3 Net gain of $4.4 million on the sale of NMRD: Increase in "Other (deductions)" of $15.1 million, decrease in "Income Taxes (Benefits)" of $3.8 million for federal income tax and a decrease in "Income Taxes (Benefits)" of $15.7 million for investment tax credits

4 Increases (decreases) in "Income Taxes (Benefits)"

TXNM Energy, Inc. and Subsidiaries

Schedule 3

Reconciliation of GAAP to Ongoing Earnings Per Diluted Share

(Unaudited)

PNM

TNMP

Corporate

and Other

TXNM

Consolidated

(per diluted share)

Three Months Ended September 30, 2025

GAAP Net Earnings (Loss) Attributable to TXNM

$ 0.95

$ 0.38

$ (0.11)

$ 1.22

Adjusting items, net of income tax effects:

Net change in unrealized (gains) losses on investment securities

0.02

—

0.02

Pension expense related to previously disposed of gas distribution business

0.01

—

0.01

Regulatory disallowances

(0.01)

—

(0.01)

Merger related costs

0.01

0.08

0.01

0.10

Timing of statutory and effective tax rates on non-recurring items

—

(0.01)

Total Adjustments

0.03

0.08

—

0.11

Ongoing Earnings (Loss)

$ 0.98

$ 0.46

$ (0.11)

$ 1.33

Average Diluted Shares Outstanding: 107,416,661

Nine Months Ended September 30, 2025

GAAP Net Earnings (Loss) Attributable to TXNM

$ 1.29

$ 0.85

$ (0.51)

$ 1.63

Adjusting items, net of income tax effects:

Net change in unrealized (gains) losses on investment securities

(0.05)

—

(0.05)

Rate Request settlement

0.01

—

0.01

Pension expense related to previously disposed of gas distribution business

0.02

—

0.02

Regulatory disallowances

(0.01)

—

(0.01)

Merger related costs

0.01

0.14

0.13

0.28

Timing of statutory and effective tax rates on non-recurring items

(0.01)

—

(0.01)

Total Adjustments

(0.03)

0.14

0.13

0.24

Ongoing Earnings (Loss)

$ 1.26

$ 0.99

$ (0.38)

$ 1.87

Average Diluted Shares Outstanding: 99,041,745

TXNM Energy, Inc. and Subsidiaries

Schedule 4

Reconciliation of GAAP to Ongoing Earnings Per Diluted Share

(Unaudited)

PNM

TNMP

Corporate

and Other

TXNM

Consolidated

(per diluted share)

Three Months Ended September 30, 2024

GAAP Net Earnings (Loss) Attributable to TXNM

$ 1.20

$ 0.39

$ (0.14)

$ 1.45

Adjusting items, net of income tax effects:

Net change in unrealized (gains) losses on investment securities

(0.07)

—

(0.07)

Regulatory disallowances

0.05

—

0.05

Total Adjustments

(0.02)

—

(0.02)

Ongoing Earnings (Loss)

$ 1.18

$ 0.39

$ (0.14)

$ 1.43

Average Diluted Shares Outstanding: 90,605,188

Nine Months Ended September 30, 2024

GAAP Net Earnings (Loss) Attributable to TXNM

$ 2.00

$ 0.89

$ (0.39)

$ 2.50

Adjusting items, net of income tax effects:

Net change in unrealized (gains) losses on investment securities

(0.13)

—

(0.13)

Regulatory disallowances

0.09

—

0.09

Pension expense related to previously disposed of gas distribution business

0.01

—

0.01

Merger related costs

—

0.02

Sale of NMRD

—

(0.05)

Total Adjustments

(0.03)

—

(0.03)

(0.06)

Ongoing Earnings (Loss)

$ 1.97

$ 0.89

$ (0.42)

$ 2.44

Average Diluted Shares Outstanding: 90,551,894

TXNM Energy, Inc. and Subsidiaries

Schedule 5

Condensed Consolidated Statements of Earnings

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

(In thousands, except per share amounts)

Electric Operating Revenues

$ 647,162

$ 569,256

$ 1,632,374

$ 1,494,235

Operating Expenses:

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

Regulatory disallowances

(731)

6,142

(731)

10,601

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

Other Income and Deductions:

Interest income

6,496

8,669

14,615

17,719

Gains on investment securities

11,376

13,770

33,691

32,326

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

Income Taxes

18,949

23,422

21,293

19,822

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)

(396)

Net Earnings Attributable to TXNM

$ 130,710

$ 131,202

$ 161,209

$ 226,441

Net Earnings Attributable to TXNM per Common Share:

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

$ 1.2225

$ 1.1625

SOURCE TXNM Energy, Inc.