Good morning, and welcome to the PNM Resources Fourth Quarter Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please not this event is being recorded. I would now like to turn the conference over to Jimmie Blotter, Investor Relations Director. Please go ahead ma'am.

Thank you, Dan, and thank you, everyone, for joining us this morning for the PNM Resources Fourth Quarter 2014 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 Chuck Eldred, our CFO 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. And with that I will turn the call over to Pat.

Thank you, Jimmie. Good morning, everyone and thank you for joining us on this late February snowy Albuquerque morning. 2014 was a good year for PNM Resources, we continued to make progress in key areas, including reliability and customer satisfaction and we’re pushing forward with important filings including the BART plan for San Juan Generating Station, in PNM’s 2015 future test year rate case. Let’s start this morning on Slide 4 with headlines from the fourth quarter. The company finished the year with a solid fourth quarter with ongoing earnings increasing $0.03 over the fourth quarter in 2013. GAAP earnings were up $0.14 per share compared to the same period in 2013. I often talk about the Company's focus on managing the business well and about our commitment to serving our customers. Our research shows that the most important thing to our customers even more than price is reliability and for three out of the last five years, both PNM and TNMP have ranked in the top quartile nationally for reliability. In 2014, PNM delivered its best reliability performance in the past seven years and TNMP's reliability was its best in a decade. At PNM, we have worked extremely hard to create a culture that top to bottom considers how every decision impacts our customers. That effort is making a difference. According to our research, customers' overall impressions of and trust in PNM are steadily improving. We still want to do even better, but I am pleased with the progress that has been made. We are looking to build on this momentum and we are confident the Company is well-positioned as we move forward in 2015. On that note, we are reaffirming our 2015 consolidated ongoing earnings guidance range of $1.50 to $1.62 per diluted share. Let’s go to Slide…

Thank you, Pat, and good morning to everyone. Let's begin on Slide 9, with the 2014 financial results. Our guidance for 2014 $1.44 to $1.51we came in at a $1.49 which was above the midpoint and above consensus. As we have continued to demonstrate, we were able to deliver solid financial results for the year in spite a facing challenges from a soft load environment at PNM. Looking at the segments, you see that PNM came in at a $1.10 this is $0.01 below the range as a result of an accelerated 2015 planned outage at the Afton generating station in 2014. Offsetting this both TNMP and corporate and other exceed their guidance ranges. TNMP came in at $0.47 driven by strong load, good cost control and their energy efficiency bonus. That business has provided consistent earnings growth over the past several years. Corporate and other was driven by lower interest expense. Now moving the Slide 10. For PNM total retail load was down 1.7% for the year which was a slight improvement compared to our guidance of down 2% to 3% for the year. This improvement was driven largely by the commercial class performing better than anticipated. In the fourth quarter, total retail load was down 0.9% from the same period in 2013. Declines in residential and commercial were partially offset by an increase in industrial load. In the industrial segment, we saw our largest customers have declines in their load, however, in Q4 2014 we did see some smaller industrial customers having increased that more than compensated for the large customers and brought the total to 1.9% increase. We continue to see customer growth at PNM holding steady at about 0.5%. New Mexico’s unemployment rate 6.1% which is above the f 5.6% national rate. While unemployment is high,…

Thanks Chuck. I would like to share a few comments on our efforts to continue to spur New Mexico’s economy. The states legislative session is in progress and there are several initiatives being considered that are designed continue to improve the business climate. The Governor is looking to build on the significantly tax reform that she passed last year as well as increased support for job training and investment in local communities. PNM continues to work with state and local government and the business community to support economic development efforts. In fact, our general rate case filing includes several provisions to both retain and recruit businesses that create economic based jobs. We are proposing an economic development tariff for these types of businesses and we are holding the line on rates for large business customers. We have received a lot of positive feedbacks on that part of the filing and the economic developers say it will definitely help us compete with other states. Before opening up the line for questions, I want to take a moment to thank our employees for all of their hard work and dedication. The company’s success is a result of their efforts. I would also like to thank our valued customers and you our investors who continue to show your support for the company. Now, operator lets please open up the line for questions.

Good morning Pat and Chuck.

Good morning Paul.

Good morning.

Just wondering, I know you are in discussions with the various parties around the 65 megawatts, but what would your appetite be if there is no resolution there for taking that on a merchant basis?

Paul, certainly you pointed out we are in discussions now with the other participants, but I will say that the Company is prepared in the event that we reach to this conclusion to take the 65 megawatts, Because we feel so committed and so certain that the case that we put out to the Commission and our commitment towards meeting the expectations that supported the filing that we had just completed the hearings on was important for the customers and also the shareholders. So that if we did end up taking the 65 megawatts, we would take it potentially at the holding company. We have done some analysis on this and we consider it to be what I would say a minimal impact even though a slight merchant, but given prices where they are today without going into detail, some of our assumptions on fuel prices, that could be as little as a $0.02 to $0.03 impact to the Company. So not material enough for us to not want to support the filing with the Commission and the case that we put out for the BART settlement.

And what would the outlook be at some point in time to get that into rates?

That is a Commission decision. That is not something that we are going to speculate on. We feel that we just need to be prepared if in the event we need to take the megawatts and then we will continue to manage that as a resource for the Company until such time other alternatives or solutions might appear to be better.

Thank you very much.

You bet.

Our next question comes from Anthony Crowdell of Jefferies. Please go ahead.

Good morning. Just a quick question. I guess earlier this week or maybe late last week, the bill proposing that a fuel adjustment clause I guess be terminated in the state was tabled in one of the committees. I was just curious, the parties that are still supporting your BART settlement were they vocal, were they involved in the fuel adjustment clause expiration?

Hi, Anthony, it is Pat. As you did mention, there was a bill that would have terminated the fuel clause, it would have required the Commission to have a hearing before the fuel adjustment. It was tabled 6 to 4 in the Senate Corporations Commission. There was, most of the people leading that were either the environmental groups or the Water Authority and the impetus behind that from the environmental groups was the fact that what goes through the fuel clause are fossil fuels so trying to shut that down. No one from the staff was over there that evening so I think that people realize the negativity that would cause not only to PNM, but to the state in taking a step backwards in regulatory certainty and the governor has really wanted us to be a business friendly state. So I think we had a good outcome on that.

Does that stay in committee or is there a process where how that could advance to the House? And I am just - my understanding of New Mexico politics or the regulatory prospects there. What happens, does that bill just stay there or does it move on?

No, it stays there. Because it was tabled it doesn't get out of committee so it couldn't go on. It would have to go through whatever committees it is assigned to then gets passed by the Senate and then go over to the House and since it didn’t make it out of its first committee, it is effectively dead.

Great. Thanks for taking my question.

Thank you.

Our next question comes from [Paul Fremont of Nexus]. Please go ahead.

Thank you very much. A couple of questions. The first is where do you guys stand in your discussions to purchase the San Juan coal mine and how would those coal costs be treated after the purchase becomes effective - if you end up buying it?

You know, obviously we are in discussions with BHP in the purchase of the mine but it is really a discussion of a third-party purchasing the mine, not PNM Resources or PNM. So we do have without going into any detail, some very capable and strong interest in some miners that are going through a process and bidding on the purchase of the mine and also establishing the fuel supply contract. So we are confident that we are in a very good place at this point and the process continues and hopefully we will have some pretty strong indications in the near future as to the results of this.

Okay. So you would not end up being an owner?

No, no, no. No, it is clearly not our intent nor our interest in being an owner of the mine. We already have a process underway that clearly involves some very established mining companies that have expressed a very strong interest in purchasing the mine and providing long-term fuel supply for San Juan.

And then looking at slide 21 which is I guess your 2019 earnings potential. If I take 75% average FERC rate base [indiscernible] the return that you are currently earning, that alone pretty much gets you to the high end of your $0.08 to $0.10. So does that mean that you are not assuming any type of return on the generation or how should we think about sort of the remaining piece?

Paul, it might be better just to kind of take that off-line to make sure I understand what specifically you are referring to. Are you looking at just the retail or are you breaking the renewable…

I am just looking at PNM FERC.

PNM FERC. Yes its we continue to - part of the earnings drag on that is the wholesale contracts and as you know, we have Navopache and another smaller contract there that continues to be competitively against market prices that are very low given where gas prices are. So I would look at there is some slight under earnings relative to those contracts and how we negotiate even through formula rates that we have with those parties that have some impact on the earnings drag, but when we announce the FERC, we will be able to discuss more clearly what the settlement is and what the ROE expectations are there. But really to break out those two rate bases to get an understanding of what the returns are relative to transmission and also the wholesale contracts. But in total, the drag is really driven by the wholesale contracts that we are serving.

Last question, what was the nuclear decommissioning trust income in 2014 and 2013?

$0.08 in 2014 and what did you say, I'm sorry what was your last question?

In 2013? 2013.

Oh 2013 it was it was on ENDT? Yes, it was $0.06.

And is $0.08 the delta or is $0.08 the total contribution for the year?

Total contribution for the year. And I think I gave guidance too in 2015 it would be zero to $0.02 in 2015, incremental to what we would have in 2014.

Thanks.

Paul, how do you like your new job?

Just getting used to it and so far, it is very different.

You are welcome back Paul. Yes.

Congratulations, glad to see you back.

Thank you.

Our next question comes from Brian Russo of Ladenburg Thalmann. Please go ahead

Hi, good morning.

Hey Brian.

Hi Brian.

Could you just maybe outline some scenarios for the 65 megawatts at San Juan? I mean are you negotiating with the current owners for maybe a pro rata incremental ownership of that 65 megawatts? Are there any other scenarios other than you taking it on as merchant?

You know, I think the safest way to look at it is we have such a short timeframe to work through resolution if there is an interest by the other parties which is probably more likely than not in pursuing the 65, then our view is going to be prepared to step up. And again without going through the actual assumptions on fuel, et cetera, but our analysis would show under today's prices if we did take the 65 at the holding company. And again, this doesn’t take effect until 2018 as you well know, we would anticipate about a $0.02 or $09.03 loss for the company, but there may be other solutions, other ways to serve that incremental power for wholesale contracts if we had those opportunities would certainly and we do get inquiries from time to time. So we would look at ways if we did end up taking the 65 of finding long-term solutions and stabilize the earnings relative to that commitment. But the important point right now is that that is not significant enough for us to not to stand behind the BART filing and the stipulation in our commitment to the Commission and others that have been involved to fulfill the plan that we put in place.

Got it. And can I summarize your comments from earlier that you are fairly confident in the BART settlement and the fact that a few of the parties to the settlement exited the settlement really should have no bearing on an examiner's decision and then an ultimate TC decision?

That is correct, Brian.

Okay, got it. Thank you very much.

Thank you.

Our next question comes from Ali Agha of SunTrust. Please go ahead.

Thank you, good morning.

Hey, Ali.

Hi, Ali.

Good morning. Listen, first question, recently I think about a few weeks ago there was a comment made by one of the New Mexico Commissioners on the BART settlement. I think he was quoted as saying, expect some changes before this thing gets approved. What do you make of that and how should we think about that?

I wouldn’t think much about it. I think the Commissioners first need to see what the hearing proposes and then they would comment on it. So I think we will just wait and see what the hearing examiner says.

Okay, but was there a context in terms of why he made that statement?

Not to my knowledge, Ali.

Okay, okay. Secondly, coming back to the PNM load numbers for the fourth quarter, as I went back and checked, this was one of the more easier comparisons I think fourth quarter of 2013 load was down about 2.9% for PNM. And yet we are again seeing a negative 0.9 in this fourth quarter. So what is it going to take for this to at least stabilize and stop being negative given you have had such easy comparisons and still seeing negative numbers out there?

Well, I think Ali, a couple of things. I think we would say we are cautiously optimistic about the economy turning around. I think as you have seen here at PNM, not at TNMP and at a lot of other utilities, you are seeing residential use per customer being flat to down because of energy efficiency measures and where most utilities are increasing either through customer growth or through the industrial pickup. You started to see our industrial pickup in the last quarter of the year. So we just think that the governor's continued leadership on economic development and our working with the state is going to help slowly build our economy back up.

Ali, do you want to move to New Mexico? You could help start this process here.

Absolutely, Chuck.

Our weather is a lot better.

The miserable weather you have got in New York, this would be great. But no, to Pat's point, the economy is very sluggish and continues to be slow. We don't have a strong allocation of industrial load so it really depends on customer growth to kind of pick up on the residential which eventually as the economy comes back, the commercial starts to pick up. So we were pleased that we did better than what we anticipated last year. And to Pat's point, we are not far enough along to be comfortable with a trend at this point. But we are comfortable that it will take some time but we will address this in the 2016 rate case which is very important for PNM to begin to adjust for the load implications that we have had for the last couple of years. But meanwhile, we will continue to manage this as we work towards the filing for the rate case and get through 2015.

Chuck, now that you have moved your outlook on another year into 2019, just remind us the CapEx budget 2015 through 2019, you are still confident that you can fund that over that time period without the need for new equity?

That’s correct. No additional equity required to execute on the plan that we have outstanding.

And last question. I know you put this out as kind of earnings power more so than anything else, but if you look at TNMP and run through your slide on the 2016 earnings power, when you're talking about a $0.45 base there versus $0.47 that we earned in 2014, so is the expectation a flat to negative growth in TNMP for the next two years?

Well, we obviously did well this last year and exceeded expectations. We are taking on more depreciable property tax and some O&M costs so it begins to become certainly some impact to that earnings growth. But the rate base is going to be driven by the transmission investment which we have continuously been able to pick up $3 million to $4 million a year for twice a year semiannual filings and so the load will really probably be the delta between how that looks year-over-year. And if load continues to be strong, we certainly see there is some upside potential for TNMP but we will just have to wait and see.

Got it. Thank you. End of Q&A

[Operator Instructions]. And at this time I'm seeing no further questions. I would like to turn the conference back over to Pat Vincent-Collawn for any closing remarks.

Thank you. And thank you all, for joining us this morning. We will be out visiting with many of you in the next month or so. So we look forward to seeing you all and I hope you all manage to stay warm. Have a great day.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.