Good day and welcome to the PNM Resources Fourth Quarter 2019 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Lisa Goodman, Director of Investor Relations. Please go ahead.

Thank you, Jason, and thank you everyone for joining us this morning for the PNM Resources Fourth Quarter 2019 Earnings Conference Call. Please note that the presentation for this conference call and other supporting documents are available on our website at pnmresources.com. Joining me today are PNM Resources' Chairman, President and CEO, Pat Vincent-Collawn and Don Tarry, our Senior Vice President and Chief Financial Officer; as well as several other members of our executive management team. Before I turn the call over to Pat, I need to remind you that some of the information provided this morning should be considered forward-looking statements pursuant to the Private Securities Litigation Reform Act of 1995. We caution you that all of the forward-looking statements are based upon current expectations and estimates and that PNM Resources assumes no obligation to update this information. For a detailed discussion of factors affecting PNM Resources' results, please refer to our current and future annual reports on Form 10-K, quarterly reports on Form 10-Q, as well as reports on Form 8-K filed with the SEC. With that I will turn the call over to Pat.

Thank you, Lisa, and good morning, everyone. Thanks for joining us today for our fourth quarter and year-end 2019 earnings call. Importantly today is National Public Sleeping Day, but I'd ask that you please don't observe it during our call because it would really hurt our feelings. With that, I'm going to begin on slide 4. GAAP earnings per share in the fourth quarter of 2019 reflect earnings of $0.40 compared to a loss of $0.69 in the fourth quarter of 2018. Ongoing earnings per share are $0.36 compared to $0.18 in the fourth quarter of last year. For the full year, GAAP earnings are $0.97 in 2019 compared with $1.07 in 2018. And ongoing earnings are $2.16 compared to $2 in 2018. Considering the significant New Mexico weather impacts that we experienced in the second quarter these results demonstrate how well the team adapts our operations to changing business conditions. We are affirming our 2020 guidance of $2.16 to $2.26. Don will provide further details on the financials in a few minutes. As we review our overall results for 2019, we've had some pretty significant highlights. In March, the New Mexico legislature passed the Energy Transition Act and the governor then signed it into law. It established future RPS requirements and a 2045 carbon-free mandate and it allows securitization as a tool to aid in the transition. The final bill was a result of key partnerships and collaborations and the bill and the governor received national attention and accolades. Our team went back and evaluated what it would take to achieve these new requirements. And we followed up on Earth Day with the announcement of our goal to reach emissions free energy by 2040 five years earlier than the state mandate. This made PNM, the first U.S. investor-owned utility…

Thank you Pat, and good morning everyone and thanks for joining us. I'll get started with a recap of our 2019 results on slide 7. As Pat mentioned earlier, after our efforts to mitigate the impacts of mild weather in the second quarter, 2019 ongoing EPS came in at $2.16. PNM increased $0.13 over 2018 and TNMP added an additional $0.05. PNM and TNMP both benefited from rate relief and interest savings. And these were partially offset by higher depreciation and property tax expense from new capital investments. PNM also saw lower plant maintenance costs and increased income from its decommissioning and reclamation trusts. The Corporate and Other segment decreased $0.02, as we saw higher debt balances and 2018 included $0.01 of net income from Westmoreland loan agreement that was paid off in May of 2018. The detailed segment drivers for both the fourth quarter and the full year are available in the appendix. Now turning to slide 8. Let's take a look at the load impacts for 2019. In New Mexico, we continue to see customer growth being partially offset by customers' energy efficiency programs. In 2019 an increase in the fourth quarter brought our annual weather normalized growth to 0.3%, which was in line with our 2019 assumption of flat to 1%. We are expecting increased growth in 2020 in the range of 0.5% to 1.5%. The weather impact in the second quarter was largely offset by above-normal impacts in the third and fourth quarters. We continue to see inquiries and announcements of business openings and expansions in New Mexico, along with groundbreakings and in-service dates for previous announcements. Ben E. Keith broke ground on their new food district -- distribution center that we told you about a year ago, and a couple of hotels that we mentioned…

Thanks, Don. The accomplishments in 2019, especially the passage of the Energy Transition Act and the 2020 confirmed applicability to our San Juan filing have laid critical groundwork for our plans to transition to be emissions-free by 2040. The path to exit coal generation becomes more certain. Our 200-megawatt ownership in the Four Corners Power Plant will be our only remaining coal exposure. We will review our current resources as well as look for future opportunities to replace baseload power with more flexible resources. At the same time, our transmission and distribution grid must evolve to integrate this changing portfolio. We would not have realized the accomplishments of 2019 without our dedicated team members. It was not an easy year in many ways, but our teams recognize the goals we are trying to achieve and have shown tremendous commitment and resilience in working through challenges to reach success together. I can't say it enough, to show how much I appreciate and value the members of our team, but I'll keep saying it. Thank you, I am proud to work alongside you. Jason, with that let's open it up for questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question is from Paul Fremont from Mizuho. Please go ahead.

Yeah. I just wanted to clarify on the earnings power slide, it just looks as if you've put the dilution directly into the business segments as opposed to putting the share dilution into the Corporate and Other line which is why I guess you're showing degradation for PNM retail and also for TNMP. Is that a fair characterization?

Good morning, Pau. Yes, that is. So as it will roll through the accounting when we actually record it it'll dilute each of the segments. And you'll see the offset that we have in Corporate and Other as we pay down debt just to both fund that capital and firm up our balance sheet.

And then on the convert, the amount of the convert has that – that's come down a little bit in terms of what it had been previously? Or is that the same?

We have previously mentioned $300 million I think with our early equity issuance and pulling the equity forward, Paul. We have to have the flexibility to bring that down. So we're looking at $250 million, up to the $300 million. The timing of that would be later in 2021.

Great. And then last question for me, in terms of any update on the timing of when you would likely file a general rate case?

Paul, we're still looking at the same timing.

So early in the second quarter?

Correct.

Okay. Great. Thank you.

Thank you, Paul.

[Operator Instructions] The next question is from Julien Dumoulin-Smith of Bank of America Merrill Lynch. Please go ahead.

Hi, good morning. This is Alex Morgan calling in for Julien.

Hi Alex.

Thanks for taking our questions. I just wanted to double-check on corporate drag on the earnings power slide. I know you mentioned that, the proceeds of the issuance of the new shares are going to reduce debt. I just wanted to check that that's the only thing that's changing this line compared to the December slide deck or if there's anything else we should be accounting for?

Yes. Good morning, Alex. That is correct. So those proceeds would be used to pay down corporate debt. The other line item that would change would be -- from the previous slide, would be the equity financing as now we've moved that up because we've issued into it, so, all that's left in that equity financing would be the mandatory convertibles.

Thank you, very much. And is there any opportunity for maybe longer-term ownership whether it be on solar maybe wind, I know you haven't been looking at wind in the past, but just thinking about your RPS mandates and maybe any potential future opportunities. Thank you.

Yes. Alex, we think there are some ownership opportunities out there. Obviously, the commission will go out to do requests for proposals because they want to make sure they get the lowest-cost resources. But I think, as you've seen in our replacement plan, there are times when it makes sense for us to own some of the solar and the batteries and we will continue to look at that as we go further out in our plans towards an emission-free portfolio.

Okay. Thank you, so much. That’s all from me. have a great day.

Thank you. You too, Alex.

The next question comes from Jonathan Reeder from Wells Fargo. Please go ahead.

Well I didn't fall sleep.

Well thank, you Jonathan. Good morning.

Good morning. How are you all doing?

Good. Chuck's in here sleeping now Jonathan.

That doesn't surprise me. That doesn't surprise me one bit. How are doing Chuck, man?

I'm doing good Jonathan. Thanks.

Good to hear your voice. Two quick questions, both are around the legislative session. The bond funding eligibility for the transmission projects, can you just kind of maybe explain a little more like how does that impact PNM? I'm not -- I wasn't familiar with that bill.

Well, it doesn't impact us, but it allows transmission projects for other than those built by a public utility to potentially qualify for IRB. So, obviously that takes the costs down. We would not necessarily be the developers of these projects obviously, but it's going to help facilitate renewable energy. So, if we would own any of it, it's going to make it easier to build transmission lines. So, it's just kind of -- I'd put it as another piece in the puzzle of helping New Mexico unlock its renewable energy potential Jonathan.

Okay. That makes sense. And then, can you just give us an update -- House Bill 11 that dealt with reorganizing the PRC I mean, it seemed like there was momentum behind that and it looked like it did squeeze by the House on February 17. What kind of transpired there?

Well, I think, what happened is -- and I think that in one of the -- the words of one of the legislators who has actually voted for the constitutional amendment was -- is that we may be putting the cart before the horse and wanted to wait and see if the constitutional amendment passed. So what happened instead though Jonathan which was very positive -- was that there was another bill that passed on the last day House Bill 386. And what it does is set forth the process by which the commissioners will be nominated. So the governor will set up a seven person Nominating Committee. They will make recommendations. So that really helps set up the constitutional amendment because one of the questions, obviously, the voters are going to have is okay if we have an appointed commission how are they going to get appointed? So what the legislature really says is, let's see if we can get this constitutional amendment passed first. If we can't get it passed then we can come back and talk about this other stuff. So I think it was more they thought it was a little too soon on that PRC reorganization.

Okay, okay. Now that helps.

Yes. And the requirement is -- House Bill 386 if you want to take a look at it because it lays out the fact that what kind of a degree they have to have, what kind of experience in the energy sector accounting public business administration how many years as a professional. So that bill I think will help you see what the appointed commission would look like.

Yes. Some of those kind of aspects I guess had been incorporated in House Bill 11 right?

Most of House Bill – yes, there was part of that either -- most of House Bill 11 the focus was really on moving the commission staff. But yes, this took the qualifications part out of 11 and put it into 386. I think the reason people might have missed it is the title of the bill is Public Peace, Health Safety and Welfare Transfer to fire marshal's office out of the PRC. So it's a catchy title I know.

Yes. Just rolls off the tongue so...

It does.

Well congrats on getting the Supreme Court weighing in there. That was a good surprise and appreciate you taking my questions for that.

No problem. Thank you. Have a great one.

Thanks, Jonathan.

There are no more questions in the queue. This concludes our question-and-answer session. I would like to turn the conference back over to Pat Vincent-Collawn for any closing remarks.

Thank you, Jason and thank you everyone. Please be safe and please make sure as we go through this coronavirus that you all protect yourself. And we look forward to seeing many of you very soon. Thanks.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.