Good day and welcome to the PNM Resources First Quarter 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 Jimmie Blotter, Director of Investor Relations. Please go ahead.

Thank you, Anita. And thank everyone for joining us this morning for the PNM Resources first quarter 2017 earnings conference call. Please note that the presentation for this conference call and other supporting documents are available on our Web site at pnmresources.com. Joining me today are PNM Resources Chairman, President and CEO, Pat Vincent-Collawn and Charles Eldred, our Executive 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. And with that, I will turn the call over to Pat.

Thank you, Jimmie and good morning everyone. Thanks for joining us this morning and Happy Arbor Day. We’ll begin this morning on slide four with the financial results and some key Company highlights. Earnings for the first quarter of 2017 were $0.29 on a GAAP basis and $.28 on an ongoing basis. Both of these numbers are increases over the $0.13 earned in the first quarter of 2016. We continue to affirm our previously announced 2017 consolidated ongoing earning guidance of $1.77 to a $1.87. I am pleased to report that we have reached an agreement on the parameters of a settlement with many of the parties to Mexico general rate case. Yesterday, we asked the commission to extend our time to file the settlement to next Friday as the party’s need to obtain their various approvals in order to officially sign on to the settlement. Once we are able to file this settlement with the commission, we will share the details of what has been proposed but until then, we will not be able to answer questions on it. Last week, we published the first draft of our integrated resource plan in preparation for the filing due by July 3rd. This allows time for public input and comments. The IRP includes the generation resource portfolio that will make PNM coal free after 2031. As have been previously indicated, the most cost effective resource portfolio included in the draft IRP includes the full closure of the San Juan generating station after the current coal supply and participation agreements expire in 2022. Additionally, this portfolio also includes an exit from our 13% position in the fourth quarter generating stations when the coal supply agreement expires in 2031. While this plan is a most cost effective course for our customers, it has…

Thank you, Pat and good morning everyone. Let's begin our review with the low details for PNM and TNMP on slide seven. At PNM, we continued the trend of positive weather normalized growth in the residential class. We were up 1.6% quarter-over-quarter, this is reflective of what we believe is improving economic conditions evidenced by information such as upticks in the number of residential housing sales and prices. Commercial while this quarter was down 2.6%. This is consistent with some of the recent flattening in Albuquerque’s employment growth rate. We are beginning to see some of the previously announced economic development wins starting to bank their hires, reflecting expectations of improvements in the commercial class; industrial down 3.8%. Thinking about 2017, while we have a large industrial customer who continues their declining usage, some of our large customers are expected to increase; therefore, 2017 is planned to be flat compared to last year. In total, this result in weather normalized retail load for the first quarter in 2017 being down 0.8% compared to the same period in 2016. Our low guidance for PNM in 2017 was flat to down 1%. So this is in line with our expectations. TNMP continues to perform well, volume metric load was up 5.4% for the first quarter of 2017 and demand base load was up 6.7%. Keep in mind that last year we saw some abnormal results between Q1 and Q2 with Q1 being lower than expected and Q2 being higher which brought the year-to-date amount back in line with expectations by the end of the second quarter. This year, we’re seeing growth numbers aligning with our expectations but the year-over-year review is being skewed because of the prior year results. I expect that Q2, 2017 year-to-date results from a year-over-year perspective will be…

Thanks, Chuck. As Chuck and I’ve mentioned, we’re pleased that we have reached the final stages of negotiation on the settlement in our PNM general rate case and we look forward to discussing it with you as soon as it is finalized. The IRP process is proceeding on schedule as we gather public comment about our draft plan that calls for an exit from coal and a transition to cleaner energy. In addition, the opportunity to participate in the commission’s workshop for improving the rate making process could pave the way for more efficient rate filings in New Mexico. Our Company’s focus is always to balance the interest of our mini-stakeholders, while maintaining affordable, reliable and environmentally responsive energy for our customers. Thank you again for joining us today. Operator, let’s please open it up for questions.

We will now begin the question-and-answer session [Operator Instructions]. Our first question comes from Insoo Kim with RBC Capital Markets. Please go ahead.

First, congrats on the initial agreement with different parties, I know you can't speak in the detail, but regarding the eight day extension that you've requested to the commission. Is that just more of a formality and they kind of have an understanding that our sentiment is very close to in file, so it shouldn’t be any prospect from that kind of extension of course?

And so hearing that purely delegated to the hearing examiner the ability to approve the extension. And given that the extension is so widely supported, the list of almost all of the interveners are on that extension request. We would hope that it would be approved. We don't know whether or not it will be, but I think it's a pretty widely supported extension.

And then regarding the potential earnings power slide that you guys mentioned, the '18 earnings credentials as it currently expensed, does it incorporate the splitting up of the two step increase in their rates, right?

That does not include any phase in approach if that were actually adopted in the settlement.

And then just finally from me, regarding the Facebook datacenter solar project, what's the latest on that. And I guess the expansions beyond the initial investment, what are the thoughts on how that's going to be structured. Is this still going to be mostly net neutral to you guys in terms of earnings or what's the growth looking like for that type of project?

The expectations on earnings front is still is planned. It's about $40 million investment to Facebook for a solar facility. We mentioned the book earnings on that was about $0.5 million, so it's not material. There is a process now underway for phase two that we will participate for the possibility of adding some additional solar capacity and that process is underway. So we continue to work very well and closer with Facebook, and trying to pursue any opportunities for meeting their needs to serve their low through renewable sources. It's too early to tell anything beyond that because we're -- they’re in a process now of looking at the phase two into.

The next question comes from Ali Agha with SunTrust. Please go ahead.

Pat you mentioned in your comments that you've potentially into settlement with most of the parties on the rate case, any key parties that are not on board to settlement?

Ali, we can't comment on who's on board the settlement and who's not on board to settlement now. All we can comment on is who signed the motion of the extension.

Well, I understand that. I didn’t want a specific party who has not signed. But among, there are presumably I think from your comments, I just want to confirm. There are some folks that have not signed, is that an accurate statement?

There’re some folks that are on board?

I mean, I thought I heard you say a majority, not all. Did I hear that right?

That's correct.

I was just wondering among the folks that have not gotten on board, is there any big picture concern from you in terms of that having any implications in the approval process?

No.

And then separately, you've had a little bit of changes in the commission from the last election, et cetera. But in general we continue to see the commission come in and make rulings that are surprising to say the least. I’m sure you saw the ruling on the excel filing. Any concern that presumably 1% two month is done that there could be any changes, unexpected changes coming from the commission side? Or is the confidence level given the parties on board that there should be a high probability of getting approved assets?

Commission is going to always do what they want to, but that’s why we'd like to settle things, because I think you always, no matter who the commission or what the commission, you have a higher chance of approval when you have a settlement.

And Chuck just to understand the comments you made at the end. So fair to say to really think about the implications once the settlement is out public, think of it over a two year period and not look at one year in isolation. Is that the way we should be thinking about this?

I think that’s fair, Ali. I think if we were to agree to some phasing approach if that was a result of the settlement then 2018 would be more of a transition year and ’19 will focused on the earnings potential of the business as you're well aware of earnings potential slide.

Last question, Pat, any signs that you're seeing locally in New Mexico that giving you any rate of clarity or confidence that the overall load picture in New Mexico starts to stabilize and at least flatten out versus last year?

I think when we look at -- well the unemployment in New Mexico is not great, the unemployment its mostly in the oil and gas areas, the unemployment in the Albuquerque metro area is much lower than it is state wide. We started to see some gross receipts tax and we’re starting to see new construction in both residential and small commercial. So it's not going back great done, but I think we feel much better about the fact that it stabilized.

But you would expect as we exit the year, I know your forecast is flat to down 0.7% or so. You would expect that we reach that zero level by the time we are exiting the year?

I think we’re comfortable with the range that’s in our guidance.

Ali, you remember the five questions -- you've exceeded that number, but…

I appreciate your intelligence. Thank you very much.

The next question comes from Anthony Crowdell with Jefferies. Please go ahead.

One follow-up from Insoo’s question. When should we expect the hearing examiner to approve the eight day extension?

Soon, I wish I could give you a better date, but we think it should be soon. I think all the parties who want to know because if it's not going to get through everybody has got a lot of work to do. So we would hope to hear soon.

What in the -- I didn’t read the entire IRP filing or the tenant or the draft. What is your assumption for load growth in the IRP filing?

Anthony, first I got to say, I am so disappointed that you haven't read all 260 pages.

I printed that out though if that matters.

You’re working on it. So the growth is sound through the very consistent, the same thing we have in our rate case that we filed that’s pending now. So nothing has changed in that regard.

And Anthony in the IRP, there is a wide of variety of assumption around gas prices, load growth, carbon fright. There is a whole bunch of things because we test the scenarios or we test the plan to get to the different scenarios in pretty much in every case; the shutting down of San Juan and the exiting Four Corners is what’s called for.

And just to add to that comment. Anthony, I think you’d have to have load growth through 2022 about 15% or so. And then you’d have to have about 3% average after 2022, and also gas prices of $7 to $8, really to support the San Juan unit station for continued servicing the load.

And lastly I guess from Ali’s question and from your comment at the end, you kind of have us looking at this as a multi-year filing or look at 19, you’re going to give guidance for a longer time. My question is how much in your slide 13 your earnings potential on ’18. How much rate relief is baked into that number then, in the 202 to 210?

On the allowed return that we have in the business, so as you know, the calculation ROE times to rate base 50% it gives you the calculation of the earnings potential. so we don’t bake any assumption in that slide. Now, if we do have a settlement, we’ll go back and update the slide and show you the adjustments that we’re agreed to in a settlement that would reflect what the adjustment would be for a phase in approach in 2018, transitioning to the earnings potential in 2019. So we would update that information for you based on the simple math of what actually occurs in the -- if the settlement is reached. Also on the settlement too that the limited time includes time for the respective parties in the settlement if it were pursued to get approval from their appropriate board, so that the eight days extension is including additional time for those to have that need to get approvals.

But from your comments, so if I take your comments of looking into two year deal and a more phase in approach. Would I be wrong to look at the midpoint in 2017 for total PNM of 133 and slide that over to the 218 column because it looks like that a phase in approach, it’s more going to be a ‘19 story [multiple speakers] I want to do…

I think we just did best thing to do is to wait and see if we have settlement and let us do the update at that point, because any discussions at this stage is really be speculative in trying to make some assumptions that I don’t think are appropriate until we really know what the real math is on the -- if there is a settlement.

And just as is -- are you able to state that the settlement is comprehensive or there is the ability to maybe settle some issues and maybe plunge some down the field for later time? Or do you believe the settlement will address all of the things that were filed on back I guess December?

Anthony, you’re so good about asking questions, I wish we could answer those questions. But there is just so many parties involved in so many different issues and positions that were regarded in discussions on a settlement that I think we just need to leave it, let this thing play out as it may and then we’ll be clear on what the information is for you to understand.

[Operator Instructions] Our next question comes from John Barda with KeyBanc. Please go ahead.

I just want to clarify so in this June is when the Supreme Court is going to rule on the potential $0.09?

No, this June is when the briefings are all one. And then they may or may not be oral arguments based on request and we can request, then they usually do grant them. But there is no statutory timeframe for them to rule, it’s just a briefing schedule is done by June.

And then I guess looking at with San Juan closing. Is that probably next best capacity resources to a peak or then? I’m trying to think back a couple of calls -- I think you went over this?

If you look at the IRP appeal, so it’s a mix of generation, most likely solar some gas, possibly some wind, the issue on wind becomes transmission constraints. So it’s sort of CVD, it won't be coal, and possibly some battery storage. So we'll have to put some RFPs to get some good pricing once we come up with a San Juan -- final San Juan plant, but it will be a mix of stuff.

This concludes our question-and-answer session. I would like to turn the conference back over to Pat Vincent-Collawn for closing comments.

Thank you. And thank you all for joining us this morning. I hope you have a wonderful weekend and please stay safe.