TXNM Energy Reports 2025 Results, Transaction and Regulatory Updates

TXNM Energy (In millions, except EPS)

2025

2024

GAAP net earnings attributable to TXNM Energy

$151.4

$242.2

GAAP diluted EPS

$1.48

$2.67

Ongoing net earnings

$238.9

$247.8

Ongoing diluted EPS

$2.33

$2.74

ALBUQUERQUE, N.M., Feb. 27, 2026 /PRNewswire/ -- TXNM Energy (NYSE: TXNM) today reported 2025 earnings results. As previously announced, TXNM Energy does not plan to issue 2026 earnings guidance during pendency of the proposed transaction with Blackstone Infrastructure.

"PNM and TNMP continue to grow and we remain focused on meeting our customer needs across New Mexico and Texas, with TNMP supporting a 28% increase in system peak demand and PNM delivering 80% carbon free energy in 2025," said Don Tarry, President and CEO of TXNM Energy. "Our proposed transaction with Blackstone Infrastructure will provide the necessary capital to support this growth and New Mexico's transition to clean energy. We look forward to bringing the benefits of this transaction to our customers and communities."

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 proposed transaction on August 28, 2025. In February 2026, approval was received from the Federal Energy Regulatory Commission and the Public Utility Commission of Texas ("PUCT") approved a unanimous settlement agreement on the proposed transaction. Clearance has been received from the Federal Communications Commission and the waiting period under the Hart-Scott-Rodino Act has expired without any objections or concerns having been raised. Approvals continue to be pursued from the Nuclear Regulatory Commission and New Mexico Public Regulation Commission ("NMPRC").

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 remaining customary closing conditions, including among other things, receipt of other required state and federal regulatory approvals.

REGULATORY UPDATE

On November 14, 2025, Texas New Mexico Power ("TNMP") filed a general rate proceeding with the PUCT requesting recovery of $2.8 billion of rate base as of June 30, 2025, a requested return on equity of 10.4%, and a 47.54% equity ratio. The TNMP base rate review also includes increases in operations and maintenance expenses that are not recovered through semi-annual Transmission Cost of Service ("TCOS") and Distribution Cost Recovery Factor ("DCRF") filings, excludes increases in interest expense resulting from refinancing of debt associated with the proposed Blackstone Infrastructure transaction, and requests recovery of $20.5 million associated with Hurricane Beryl restoration costs over a five-year period. If approved by the PUCT, the new rates are expected to become effective in mid-2026.

On December 29, 2025, Public Service Company of New Mexico ("PNM") filed an application with the NMPRC for approval of two economic development projects related to New Mexico Senate Bill 170 at an estimated cost of $165.5 million. Senate Bill 170 allows a utility to defer costs of economic development projects that serve sites certified by the New Mexico Economic Development Department.

On February 25, 2026, PNM filed an application with the NMPRC for approval of a Certificate of Convenience and Necessity for a new 345 kV transmission line, existing station expansions, and a new substation at an estimated cost of $247 million. This project aims to enhance reliability and resilience in the Albuquerque area, facilitate the integration of renewable energy, and support economic development.

In the fourth quarter of 2025, PNM initiated its 2026 Integrated Resource Plan ("IRP") process which will cover the 20-year planning period from 2026 through 2046. Consistent with historical practice, PNM is receiving public input from interested parties as part of this process. PNM expects to file its 2026 IRP with the NMPRC on or before September 1, 2026.

TNMP's second DCRF filing for 2025 was approved and implemented in the fourth quarter, providing recovery for $19 million of rate base.

SEGMENT REPORTING OF 2025 EARNINGS

EPS Results by Segment

GAAP Diluted EPS

Ongoing Diluted EPS

2025

2024

2025

2024

PNM

$0.85

$2.12

$1.35

$2.16

TNMP

$1.21

$1.14

$1.42

$1.15

Corporate and Other

($0.58)

($0.59)

($0.44)

($0.57)

Consolidated TXNM Energy

$1.48

$2.67

$2.33

$2.74

Net changes to earnings in 2025 compared to 2024 include:

GAAP and ongoing earnings per share were reduced in 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 2025 included $3.4 million of net unrealized losses on investment securities compared to $2.7 million of net unrealized gains in 2024. GAAP earnings in 2025 also included a $58.8 million pension settlement charge related to a previously disposed of gas distribution business and $43.1 million of costs related to the planned transaction. GAAP earnings in 2024 included $9.2 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 news release for TXNM Energy, PNM, or TNMP (collectively, the "Company") that relate to future events or expectations, projections, estimates, intentions, goals, targets, and strategies, including the unaudited financial results, earnings guidance, 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 and the expected benefits of the potential transaction, rate proceeding outcomes, anticipated benefits of the new transmission line project, and the expected timing of the IRP filing, are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates and apply only as of the date of this report. TXNM, PNM, and TNMP assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, TXNM, PNM, and TNMP caution readers not to place undue reliance on these statements. TXNM's, PNM's, and TNMP's business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond their control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. For a discussion of risk factors and other important factors affecting forward-looking statements, please see the Company's Form 10-K, Form 10-Q filings and the information included in the Company's Form 8-K's with the Securities and Exchange Commission, 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 TXNM Energy to pay a termination fee, 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.

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. The Company uses ongoing earnings guidance to provide investors with management's expectations of ongoing financial performance over the period presented. While the Company believes ongoing earnings guidance is an appropriate measure, it is not a measure presented in accordance with GAAP. The Company does not intend for ongoing earnings guidance to represent an expectation of net earnings as defined by GAAP. Since the future differences between GAAP and ongoing earnings are frequently outside the control of the Company, management is generally not able to estimate the impact of the reconciling items between forecasted GAAP net earnings and ongoing earnings guidance, nor their probable impact on GAAP net earnings without unreasonable effort, therefore, management is generally not able to provide a corresponding GAAP equivalent for ongoing earnings guidance. 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

PNM

TNMP

Corporate

and Other

Consolidated

(in thousands)

Quarter Ended December 31, 2025

GAAP Net Earnings (Loss) Attributable to TXNM:

$ (40,659)

$ 39,909

$ (9,097)

$ (9,847)

Adjusting items before income tax effects

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

9,757

—

9,757

Regulatory settlements 2b

—

3,500

—

3,500

Pension expense and settlement charge related to previously disposed of

gas distribution business 2c

59,552

—

59,552

Process improvement initiatives 2e

363

—

364

Merger related costs 2f

676

6,038

1,295

8,009

Total adjustments before income tax effects

70,348

9,538

1,296

81,182

Income tax impact of above adjustments 1

(17,868)

(2,003)

(329)

(20,200)

Income tax valuation allowance 3

193

—

1,270

1,463

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

1,349

(15)

(460)

874

Total income tax impacts 3

(16,326)

(2,018)

481

(17,863)

Adjusting items, net of income taxes

54,022

7,520

1,777

63,319

Ongoing Earnings (Loss)

$ 13,363

$ 47,429

$ (7,320)

$ 53,472

Year Ended December 31, 2025

GAAP Net Earnings (Loss) Attributable to TXNM:

$ 87,077

$ 124,290

$ (60,005)

$ 151,362

Adjusting items before income tax effects

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

3,435

—

3,435

Regulatory settlements 2b

1,500

3,500

—

5,000

Pension expense and settlement charge related to previously disposed of gas

distribution business 2c

61,904

—

61,904

Regulatory disallowances 2d

(731)

—

(731)

Process improvement initiatives 2e

955

—

157

1,112

Merger related costs 2f

1,602

23,141

18,388

43,131

Total adjustments before income tax effects

68,665

26,641

18,545

113,851

Income tax impact of above adjustments 1

(17,440)

(5,595)

(4,711)

(27,746)

Income tax valuation allowance 3

193

—

1,270

1,463

Total income tax impacts 3

(17,247)

(5,595)

(3,441)

(26,283)

Adjusting items, net of income taxes

51,418

21,046

15,104

87,568

Ongoing Earnings (Loss)

$ 138,495

$ 145,336

$ (44,901)

$ 238,930

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 Consolidated Statement of Earnings as follows:

a Changes in "Gains (losses) 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 zero 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 $0.4 million and $0.6 million for the three and twelve months ended December 31, 2025 at PNM and increase

of zero and $0.2 million in "Administrative and general" at Corporate and Other for the three and twelve months ended December 31, 2025

f Increases in "Administrative and general" of $0.7 million and $1.6 million at PNM for the three and twelve months ended December 31, 2025;

Increases in "Administrative and general" of $2.3 million and $3.2 million and increases in "Interest charges" of $3.7 million and $20.0 million at

TNMP for the three and twelve months ended December 31, 2025; Increases in "Administrative and general" at Corporate and Other of $1.2 million

and $18.1 million for the three and twelve months ended December 31, 2025

3 Increases (decreases) in "Income Taxes"

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 22.6% for TXNM, and the GAAP anticipated effective tax rates of 7.5% for PNM, 20.4% for TNMP, and 10.8% for TXNM, which

have reversed by year end

TXNM Energy, Inc. and Subsidiaries

Schedule 2

Reconciliation of GAAP to Ongoing Earnings

PNM

TNMP

Corporate

and Other

Consolidated

(in thousands)

Quarter Ended December 31, 2024

GAAP Net Earnings (Loss) Attributable to TXNM:

$ 10,311

$ 23,325

$ (17,922)

$ 15,714

Adjusting items before income tax effects

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

13,486

—

13,486

Regulatory disallowances 2b

(1,621)

—

(1,621)

FERC refunds 2c

(4,037)

—

(4,037)

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

433

—

433

Process improvement initiatives 2e

523

1,046

2,137

3,706

Merger related costs 2f

860

913

Total adjustments before income tax effects

8,824

1,059

2,997

12,880

Income tax impact of above adjustments 1

(2,241)

(222)

(761)

(3,224)

Income tax valuation allowance 3

—

1,346

Income tax impact of non-deductible merger related costs 3

289

179

—

468

Total income tax impacts 5

(1,952)

(43)

585

(1,410)

Adjusting items, net of income taxes

6,872

1,016

3,582

11,470

Ongoing Earnings (Loss)

$ 17,183

$ 24,341

$ (14,340)

$ 27,184

Year Ended December 31, 2024

GAAP Net Earnings (Loss) Attributable to TXNM:

$ 191,684

$ 103,528

$ (53,058)

$ 242,154

Adjusting items before income tax effects

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

(2,718)

—

(2,718)

Regulatory disallowances 2b

9,226

—

9,226

FERC refunds 2c

(4,037)

—

(4,037)

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

1,732

—

1,732

Process improvement initiatives 2e

523

1,046

2,137

3,706

Merger related costs 2f

174

(8)

2,988

3,154

Sale of NMRD 4

—

15,097

Total adjustments before income tax effects

4,900

1,038

20,222

26,160

Income tax impacts of above adjustments 1

(1,244)

(218)

(5,135)

(6,597)

Sale of NMRD 4

—

(15,712)

Income tax valuation allowance 3

—

1,346

Income tax impact of non-deductible merger related costs 3

289

179

—

468

Total income tax impacts 5

(955)

(39)

(19,501)

(20,495)

Adjusting items, net of income taxes

3,945

999

721

5,665

Ongoing Earnings (Loss)

$ 195,629

$ 104,527

$ (52,337)

$ 247,819

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 Consolidated Statement of Earnings as follows:

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

b Decreases in "Regulatory disallowances" of $1.6 million for the three months ended December 31, 2024, increases in "Regulatory disallowances"

of $9.0 million for the twelve months ended December 31, 2024, and decreases in "Electric Operating Revenues" of $0.2 million for the twelve

months ended December 31, 2024

c Decreases in "Cost of energy" of $3.8 million and increases in "Interest income" of $0.2 million for the three and twelve months ended December 31, 2024

d Increases in "Other (deductions)"

e Increases in "Administrative and general" of $5.0 million for the three and twelve months ended December 31, 2024 and decreases in "Energy

production costs" of $1.3 million for the three and twelve months ended December 31, 2024

f Increases in "Administrative and general"

3 Increases (decreases) in "Income Taxes"

4 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

5 Income tax impacts reflected in "Income Taxes"

TXNM Energy, Inc. and Subsidiaries

Schedule 3

Reconciliation of GAAP to Ongoing Earnings Per Diluted Share

PNM

TNMP

Corporate

and Other

Consolidated

(per diluted share)

Quarter Ended December 31, 2025

GAAP Net Earnings (Loss) Attributable to TXNM:

$ (0.36)

$ 0.36

$ (0.08)

Adjusting items, net of income tax effects

Net change in unrealized (gains) losses on investment securities

0.07

—

0.07

Regulatory settlements

—

0.02

—

0.02

Pension expense and settlement charge related to previously disposed of gas

distribution business

0.40

—

0.40

Income tax valuation allowance

—

0.01

Merger related costs

—

0.04

0.01

0.05

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

0.01

—

0.01

Total Adjustments

0.48

0.06

0.02

0.56

Ongoing Earnings (Loss)

$ 0.12

$ 0.42

$ (0.06)

$ 0.48

Average Diluted Shares Outstanding: 112,357,639

Year Ended December 31, 2025

GAAP Net Earnings (Loss) Attributable to TXNM:

$ 0.85

$ 1.21

$ (0.58)

$ 1.48

Adjusting items, net of income tax effects

Net change in unrealized (gains) losses on investment securities

0.03

—

0.03

Regulatory settlements

0.01

0.03

—

0.04

Regulatory disallowances

(0.01)

—

(0.01)

Pension expense and settlement charge related to previously disposed of gas

distribution business

0.45

—

0.45

Process improvement initiatives

0.01

—

0.01

Income tax valuation allowance

—

0.01

Merger related costs

0.01

0.18

0.13

0.32

Total Adjustments

0.50

0.21

0.14

0.85

Ongoing Earnings (Loss)

$ 1.35

$ 1.42

$ (0.44)

$ 2.33

Average Diluted Shares Outstanding: 102,392,046

TXNM Energy, Inc. and Subsidiaries

Schedule 4

Reconciliation of GAAP to Ongoing Earnings Per Diluted Share

PNM

TNMP

Corporate

and Other

Consolidated

(per diluted share)

Quarter Ended December 31, 2024

GAAP Net Earnings (Loss) Attributable to TXNM:

$ 0.11

$ 0.26

$ (0.20)

$ 0.17

Adjusting items, net of income tax effects

Net change in unrealized (gains) losses on investment securities

0.12

—

0.12

Regulatory disallowances

(0.01)

—

(0.01)

FERC refunds

(0.03)

—

(0.03)

Process improvement initiatives

—

0.01

0.02

0.03

Income tax valuation allowance

—

0.01

Merger related costs

—

0.01

Total Adjustments

0.08

0.01

0.04

0.13

Ongoing Earnings (Loss)

$ 0.19

$ 0.27

$ (0.16)

$ 0.30

Average Diluted Shares Outstanding: 90,998,879

Year Ended December 31, 2024

GAAP Net Earnings (Loss) Attributable to TXNM:

$ 2.12

$ 1.14

$ (0.59)

$ 2.67

Adjusting items, net of income tax effects

Net change in unrealized (gains) losses on investment securities

(0.02)

—

(0.02)

Regulatory disallowances

0.08

—

0.08

FERC refunds

(0.03)

—

(0.03)

Pension expense related to previously disposed of gas distribution business

0.01

—

0.01

Process improvement initiatives

—

0.01

0.02

0.03

Income tax valuation allowance

—

0.02

Merger related costs

—

0.03

Sale of NMRD

—

(0.05)

Total Adjustments

0.04

0.01

0.02

0.07

Ongoing Earnings (Loss)

$ 2.16

$ 1.15

$ (0.57)

$ 2.74

Average Diluted Shares Outstanding: 90,590,573

TXNM Energy, Inc. and Subsidiaries

Schedule 5

Consolidated Statements of Earnings

Year Ended December 31,

2025

2024

2023

(In thousands, except per share amounts)

Electric Operating Revenues

$ 2,165,606

$ 1,971,199

$ 1,939,198

Operating Expenses:

Cost of energy

716,005

583,984

802,261

Administrative and general

274,453

247,116

227,900

Energy production costs

98,371

93,748

91,610

Regulatory disallowances

(731)

8,980

71,923

Depreciation and amortization

425,641

384,925

319,503

Transmission and distribution costs

100,794

98,380

98,721

Taxes other than income taxes

109,894

100,580

95,940

Total operating expenses

1,724,427

1,517,713

1,707,858

Operating income

441,179

453,486

231,340

Other Income and Deductions:

Interest income

20,065

23,537

21,963

Gains on investment securities

34,750

26,851

19,246

Other income

29,087

28,621

24,204

Other (deductions)

(73,546)

(24,189)

(15,869)

Net other income and (deductions)

10,356

54,820

49,544

Interest Charges

271,522

228,066

190,355

Earnings before Income Taxes

180,013

280,240

90,529

Income Taxes (Benefits)

10,187

21,518

(16,350)

Net Earnings

169,826

258,722

106,879

(Earnings) Attributable to Valencia Non-controlling Interest

(17,936)

(16,040)

(18,533)

Preferred Stock Dividend Requirements of Subsidiary

(528)

Net Earnings Attributable to TXNM

$ 151,362

$ 242,154

$ 87,818

Net Earnings Attributable to TXNM per Common Share:

Basic

$ 1.49

$ 2.67

$ 1.02

Diluted

$ 1.48

$ 2.67

$ 1.02

SOURCE TXNM Energy, Inc.