TXNM Energy — Third Quarter 2026 Earnings Summary

Financial Performance:

• GAAP net earnings attributable to TXNM Energy were $163.4 million ($1.50 per diluted share) for Q3 2026, compared to $130.7 million ($1.22 per diluted share) in Q3 2025.
• Ongoing net earnings were $184.8 million ($1.62 per diluted share) for Q3 2026, compared to $142.8 million ($1.33 per diluted share) in Q3 2025.
• Year-to-date (YTD) GAAP net earnings were $238.4 million ($2.15 per diluted share) for 2026, compared to $161.2 million ($1.63 per diluted share) in 2025.
• YTD ongoing net earnings were $272.7 million ($2.42 per diluted share) for 2026, compared to $185.5 million ($1.87 per diluted share) in 2025.
• Electric operating revenues were $733.3 million for Q3 2026, up from $647.2 million in Q3 2025.
• YTD electric operating revenues were $1.79 billion for 2026, up from $1.63 billion in 2025.
• GAAP earnings in Q3 2026 included $14.7 million of net unrealized losses on investment securities, compared to $2.1 million in Q3 2025.
• GAAP earnings in Q3 2026 included $9.3 million of costs related to the planned acquisition, compared to $14.0 million in Q3 2025.
• Corporate and Other segment earnings were reduced by higher interest expense due to higher debt balances.

Guidance and Future Outlook:

• TXNM Energy does not plan to issue earnings guidance during the pendency of the proposed transaction with Blackstone Infrastructure.
• The company anticipates the closing of the acquisition will occur in the first half of 2027, subject to satisfaction of remaining closing conditions, including receipt of approval from the New Mexico Public Regulation Commission (NMPRC).

Business Segments and Product Lines:

• PNM: GAAP diluted EPS was $1.17 in Q3 2026 versus $0.95 in Q3 2025; Ongoing diluted EPS was $1.24 versus $0.98. Performance was driven by rate relief from the approved 2025 Rate Request, higher retail load, and higher transmission revenues, partially offset by higher O&M, depreciation, property tax, and lower realized gains on investment securities.
• TNMP: GAAP diluted EPS was $0.50 in Q3 2026 versus $0.38 in Q3 2025; Ongoing diluted EPS was $0.50 versus $0.46. Performance was driven by rate relief from the approved base rate review, rate recovery through DCRF and TCOS mechanisms, and higher revenues under Texas House Bill 5247, partially offset by higher depreciation, property tax, and interest expense associated with new capital investments.
• Corporate and Other: GAAP diluted EPS was $(0.17) in Q3 2026 versus $(0.11) in Q3 2025; Ongoing diluted EPS was $(0.12) versus $(0.11).

Market and Competitive Landscape:

• Both PNM and TNMP reached new system peaks during a prolonged summer of record-breaking heat, demonstrating critical infrastructure role during periods of extreme demand.
• PNM filed its 2026 Integrated Resource Plan (IRP) covering the 2026-2045 planning period to maintain reliability and affordability while meeting New Mexico's clean energy requirements and addressing projected load growth.
• PNM filed its 2026 Distribution System Plan (DSP) to establish a framework for maintaining a safe, reliable, resilient, and affordable distribution system while responding to load growth, electrification, and grid modernization.
• TNMP filed its first single Unified Tracker Mechanism (UTM) application with the PUCT on September 1, 2026, requesting total incremental increases of $77.9 million in DCRF and $27.0 million in TCOS revenue requirements.
• PNM expects to file an application for a Certificate of Convenience and Necessity for a new 345 kV transmission line and station expansions at an estimated cost of $595 million.

Risks and Challenges:

• Completion of the proposed transaction with Blackstone Infrastructure remains subject to regulatory approvals, including pending approval from the NMPRC.
• Risks include potential delays in obtaining approvals, termination of the transaction agreement, legal proceedings related to the transaction, disruption of management time, and adverse effects on retaining key personnel or maintaining customer/supplier relationships.
• Higher depreciation, property tax, and interest expenses associated with new capital investments impacted earnings.
• Fluctuations in investment securities performance and merger-related costs affect GAAP earnings.

Management Commentary and Tone:

• Don Tarry, President and CEO, stated that the company is acutely aware of the impact of higher energy use on customers and remains focused on strengthening reliability while managing costs responsibly.
• Management highlighted the critical role of infrastructure during periods of extreme demand.

Other Key Points:

• On May 19, 2025, TXNM Energy announced an agreement for affiliates of Blackstone Infrastructure to acquire outstanding common stock for $61.25 per share.
• Shareholders approved the transaction on August 28, 2025.
• Regulatory approvals received include the Federal Energy Regulatory Commission, PUCT (unanimous settlement agreement), Federal Communications Commission, Hart-Scott-Rodino Act waiting period expiration, and the Nuclear Regulatory Commission (August 21, 2026).
• On October 16, 2026, the NMPRC accepted an amended application including increased benefits to customers such as rate credits, additional contributions to the PNM Good Neighbor Fund, and workforce development programs.
• NMPRC hearing examiners published a revised procedural schedule on October 27, 2026, with evidentiary hearings scheduled for January 19 through February 1, 2027.
• GAAP and ongoing earnings per share were reduced by shares issued in August 2025 and in March and May 2026.
• Dividends declared per common share were $0.4225 for Q3 2026, compared to $0.4075 in Q3 2025.