PNM Resources Revises 2018 and 2019 Earnings Guidance

ALBUQUERQUE, N.M., Feb. 20, 2018 /PRNewswire/ -- PNM Resources (NYSE: PNM) today revised its 2018 and 2019 consolidated ongoing earnings guidance (a non-GAAP financial measure), primarily to reflect the finalization of Public Service Company of New Mexico's (PNM's) retail rate settlement phase-in, adjusted for tax reform. The revised 2018 consolidated ongoing earnings guidance is $1.82 to $1.92 per diluted share, and the revised 2019 consolidated ongoing earnings guidance is $2.04 to $2.16 per diluted share. Based on the revised midpoint of 2018 ongoing earnings guidance and incorporating the effects of tax reform, PNM Resources reiterates its targeted earnings growth of 6 percent through 2021. The revisions are summarized as follows:

PNM Resources (ongoing earnings per diluted share)



Previous Consolidated Ongoing Earnings Guidance

$1.70 - $1.80

$2.00 - $2.16

PNM retail rate settlement phase-in, adjusted for tax reform



Tax reform impacts, TNMP and Corporate



PNM retail rate settlement modification



Cost realignment subsequent to final order






Revised Consolidated Ongoing Earnings Guidance

$1.82 - $1.92

$2.04 - $2.16

In Texas, the Public Utility Commission of Texas ordered the deferral of tax reform savings beginning January 25, 2018 for return to customers in the next rate case, which Texas-New Mexico Power (TNMP) plans to file in May 2018. The Corporate/Other segment is impacted ($0.02) by tax reform, consistent with the company's previously communicated expectations. Further details on earnings guidance and targeted growth will be made available with the company's earnings presentation materials on Tuesday, February 27, 2018.

"The approval and implementation of new retail rates at PNM earlier this year, reflecting the enactment of tax reform, allows our customers to be among the first in the country to realize tax savings through electric rates," said Pat Vincent-Collawn, PNM Resources' chairman, president and CEO. "The retirement of San Juan Generating Station Units 2 and 3 in December officially marked the beginning of our transformation to a coal-free generation portfolio. The collaborative plan to retire these units moves New Mexico forward by reducing the overall emissions generated in the state below the levels that were previously called for in the Clean Power Plan."

The implementation of retail rates includes the transfer of Palo Verde Nuclear Generating Station Unit 3, a carbon-free resource, to serve PNM's regulated customers. In conjunction with these efforts and the issuance of PNM's July 2017 Integrated Resources Plan (which outlines the exit of all coal-fired generation by 2031 if regulatory approval is granted), PNM Resources published a Climate Change Report (http://www.pnmresources.com/about-us/sustainability-portal/climate-change-report.aspx). The report contains information about the company's ongoing progress towards reducing the environmental impact of delivering power while minimizing the cost to customers and highlights PNM's resource plan that would achieve dramatic reductions in carbon emissions.

The transition from coal-fired generation and the development of third party renewables in New Mexico will require additional investment in gas peaking units on PNM's system along with transmission expansions to support this development while maintaining system reliability, as previously outlined in PNM's capital plans. PNM will seek opportunities to invest in renewable resources, energy storage and other low-cost resources to replace existing coal-fired generation. The company's first priority for capital investments continues to be its regulated utilities and providing customers with reliable, affordable and environmentally sustainable power.

To further prioritize and efficiently use the company's capital, PNM Resources, through its unregulated subsidiary PNMR Development, has partnered with AEP OnSite Partners LLC, a subsidiary of American Electric Power (NYSE: AEP), to invest in additional renewable generation. This unregulated entity allows PNM Resources to provide renewable solutions to new customers and other public power entities surrounding its regulated jurisdictions. The joint venture, NM Renewable Development, LLC (NMRD) is owned 50 percent by each party and will pursue the acquisition, development and ownership of unregulated renewable energy generation projects primarily in the state of New Mexico. PNMR Development contributed its interest in the 30 megawatts of solar planned to serve Facebook to NMRD in December 2017 and AEP OnSite Partners contributed cash equal to 50 percent of the value of the 30 megawatts of solar.

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2016 consolidated operating revenues of $1.4 billion. Through its regulated utilities, PNM and TNMP, PNM Resources has approximately 2,791 megawatts of generation capacity and provides electricity to more than 767,000 homes and businesses in New Mexico and Texas. For more information, visit the company's website at www.PNMResources.com.




Jimmie Blotter

Pahl Shipley

(505) 241-2227

(505) 241-2782

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this news release that relate to future events or PNM Resources, Inc.'s ("PNMR"), Public Service Company of New Mexico's ("PNM"), or Texas-New Mexico Power Company's ("TNMP") (collectively, the "Company") expectations, projections, estimates, intentions, goals, targets, and strategies 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. PNMR, 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, PNMR, PNM, and TNMP caution readers not to place undue reliance on these statements. PNMR'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 and Form 10-Q filings with the Securities and Exchange Commission, which factors are specifically incorporated by reference herein.

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 impairments on available-for-sale securities, 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 (or ongoing diluted earnings per 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.

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SOURCE PNM Resources, Inc.

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