8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported)	August 6, 2010
	(August 6, 2010)

Commission	Name of Registrants, State of Incorporation,	I.R.S. Employer
File Number	Address and Telephone Number	Identification No.
001-32462	PNM Resources, Inc.	85-0468296
	(A New Mexico Corporation)
	Alvarado Square
	Albuquerque, New Mexico  87158
	(505) 241-2700
001-06986	Public Service Company of New Mexico	85-0019030
	(A New Mexico Corporation)
	Alvarado Square
	Albuquerque, New Mexico  87158
	(505) 241-2700
002-97230	Texas-New Mexico Power Company	75-0204070
	(A Texas Corporation)
	577 N. Garden Ridge Blvd.
	Lewisville, Texas  75067
	(972) 420-4189
______________________________
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02          Results of Operations and Financial Condition.

On August 6, 2010, PNM Resources, Inc. (the “Company”) issued a press release announcing its unaudited results of operations for the three months and six months ended June 30, 2010.  The press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein.

The Company’s press release and other communications from time to time may include certain financial measures that are not determined in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP").  A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements.

Non-GAAP financial measures utilized by the Company include presentations of revenues, operating expenses, operating income, other income and deductions, net earnings (loss), earnings (loss) per share, cash earnings and earnings before interest, taxes, depreciation and amortization (“EBITDA”).  The Company uses ongoing earnings (loss), ongoing earnings (loss) per diluted share (or ongoing diluted earnings (loss) per share), cash earnings, ongoing EBITDA, and EBITDA to evaluate the operations of the Company and to establish goals for management and employees.  Certain non-GAAP financial measures utilized by the Company exclude the impact of net unrealized mark-to-market gains and losses on economic hedges, the net change in unrealized impairments on assets held in trusts for nuclear decommissioning, and certain other non-recurring or infrequent items. The Company’s management believes that these non-GAAP financial measures provide useful information to investors by removing the effect of variances in GAAP reported results of operations that are not indicative of fundamental changes in the earnings capacity of the Company’s operations.  Management also believes that the presentation of the non-GAAP financial measures is largely consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare current non-GAAP measures with non-GAAP measures with respect to prior periods.

As previously announced, on January 30, 2009, PNM successfully completed the sale of its natural gas operations to New Mexico Gas Company.  The gas operations are classified as discontinued operations under GAAP.  Management continued to actively manage the gas operations until closing to fulfill its obligations to its regulated customers.  Therefore, management determined to include discontinued operations in ongoing earnings (loss) prior to closing to reflect these obligations.  Under GAAP, depreciation is not recorded on assets included in discontinued operations.  However, depreciation on these assets was reflected in ongoing earnings.

The non-GAAP financial measures used by the Company should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

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. Management is generally not able to estimate the impact of the reconciling items between ongoing earnings guidance and forecasted GAAP earnings, nor their probable impact on GAAP earnings; therefore, management is generally not able to provide a corresponding GAAP equivalent for earnings guidance.  Reconciling items may include revenues and expenses resulting from transactions that do not occur in the no rmal course of the Company’s business operations, as well as, net unrealized mark-to-market gains and losses on economic hedges and the net change in unrealized impairments on assets held in trusts for nuclear decommissioning, as discussed above. In addition, the Company uses forecasts of ongoing EBITDA and cash earnings guidance to provide investors with management’s expectations of additional indicators of ongoing financial performance. Since forecasts of EBITDA and cash earnings are derived from forecasted ongoing earnings, management is not able reconcile these items to a GAAP equivalent.

The press release furnished herewith has been corrected for certain typographical errors on Schedule 7, Calculation of Optim Energy Ongoing EBITDA. For the three months and six months ended June 30, 2009, the amounts that should have been shown for mark-to-market impact of economic hedges were inadvertently shown on the line for purchase accounting amortizations.  Similarly, the amounts that should have been shown for purchase accounting amortizations were inadvertently shown on the line for mark-to-market impact of economic hedges.  The above had no impact on the total ongoing EBITDA amounts.

2

Limitation on Incorporation by Reference

In accordance with general instruction B.2 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section and not deemed incorporated by reference in any filing under the Securities Act of 1933.

3

Item 9.01          Financial Statements and Exhibits.

(d) Exhibits:

Exhibit Number   Description

99.1                 Press Release dated August 6, 2010, and PNM Resources, Inc. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009, Condensed Consolidated Statements of Earnings (Loss) for the three months and six months ended June 30, 2010 and 2009 and Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009, and other preliminary financial information.

4

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

	PNM RESOURCES, INC.
	PUBLIC SERVICE COMPANY OF NEW MEXICO
	TEXAS-NEW MEXICO POWER COMPANY
	(Registrants)
Date:  August 6, 2010	/s/ Thomas G. Sategna
	Thomas G. Sategna
	Vice President and Corporate Controller
	(Officer duly authorized to sign this report)

5

EX-99.1

Exhibit 99.1

For Immediate Release

Aug. 6, 2010

PNM Resources Reports Second Quarter Results

First Choice Power performance increases 2010 earnings guidance range

Conference call scheduled for 11 a.m. Eastern today

SECOND QUARTER SUMMARY

●   GAAP earnings of $0.25 per diluted share, compared with losses of $0.02 per diluted share in 2009

●   Ongoing earnings of $0.21 per diluted share, equaling 2009 results

(ALBUQUERQUE, N.M.) – PNM Resources (NYSE: PNM) today reported unaudited 2010 second quarter consolidated GAAP earnings of $22.9 million, or $0.25 per diluted share, compared with losses of $2.1 million, or $0.02 per diluted share, during the same period last year.

Quarterly unaudited, consolidated ongoing earnings were $19.3 million, or $0.21 per diluted share, compared with $19.4 million, or $0.21 per diluted share, in 2009. Ongoing earnings exclude various special items. Reconciliations of GAAP to non-GAAP measures such as ongoing earnings and EBITDA (earnings before interest charges, income taxes, depreciation and amortization) are shown on the attached schedules 1 through 8.

“Our utility operations are on track for 2010 and improved year-over-year as a result of modest load growth and newly implemented electric rates in New Mexico and Texas. And, while we continue to keep our utility costs as low as possible, we remain steadfast in our commitment to address multiple regulatory matters to achieve a fair rate of return for both PNM and TNMP,” said Pat Vincent-Collawn, PNM Resources president and CEO.

“Regarding our competitive businesses in Texas, First Choice Power’s ongoing results are lower than a year ago as we expected average retail margins to compress throughout 2010. However, bad debt expense continues to improve as we are beginning to see the results of marketing efforts that have enhanced credit standards and targeted different customer types,” Vincent-Collawn said. “For Optim Energy, low prices in Texas remained challenging for all power producers, but solid performance at Optim’s power plants helped to mitigate that negative impact.”

Quarterly financial materials are available at http://www.pnmresources.com/investors/results.cfm.

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PNM Resources Reports Q2 Earnings                                                        8-6-10p. 2 of 4

YEAR-TO-DATE RESULTS

For the first six months of 2010, PNM Resources reported unaudited consolidated GAAP earnings of $14.4 million, or $0.16 per diluted share, compared with $87.5 million, or $0.96 per diluted share, in 2009. GAAP results in 2009 included the $67.0 million after-tax gain from the sale of the company’s natural gas operations that was recorded in the first quarter.  Unaudited, consolidated ongoing earnings for the first half of 2010 were $24.7 million, or $0.27 per diluted share, compared with $28.7 million, or $0.31 per diluted share, in 2009.

SEGMENT REPORTING OF 2010 SECOND QUARTER EARNINGS

Regulated Operations

PNM – a vertically integrated electric utility in New Mexico with distribution, transmission and generation assets.

● PNM reported ongoing earnings of $10.7 million, or $0.12 per diluted share, compared with $9.7 million, or $0.11 per diluted share, in 2009. GAAP earnings were $8.8 million, or $0.10 per diluted share, compared with losses of $8.1 million, or $0.09 per diluted share, in 2009. GAAP results last year reflected write-offs related to regulatory disallowances and an increase in legal reserves.

● Both phases of the $77 million rate increase approved in 2009 were implemented as of April 1, 2010. This rate increase and weather-normalized load growth of 1.5 percent improved earnings and were partially offset by increased interest expense, higher retiree pension and medical costs, and increased costs at the San Juan Generating Station.

TNMP – an electric transmission and distribution utility in Texas.

● TNMP reported ongoing and GAAP earnings of $4.1 million, or $0.04 per diluted share, compared with 2009 ongoing earnings of $2.2 million, or $0.02 per diluted share, and 2009 GAAP earnings of $1.8 million, or $0.02 per diluted share.

● The positive impact of the September 2009 implementation of new general rates, new transmission cost-of-service rates that went into effect in May 2010 and weather-normalized load growth of 2.5 percent was partially offset by higher depreciation.

Unregulated Operations

First Choice Power – a retail electric provider in Texas.

● First Choice Power reported ongoing earnings of $10.7 million, or $0.12 per diluted share, compared with $12.6 million, or $0.14 per diluted share, in 2009. GAAP earnings were $16.6 million, or $0.18 per diluted share, compared with 2009 earnings of $16.0 million, or $0.17 per diluted share.

● Performance was reduced by lower retail margins and a 6.4 percent drop in sales volumes attributable to lower customer counts. Quarterly bad debt expense was reduced to $6.1 million from $10.0 million in 2009 as a result of fewer customer departures and lower final bills.

Optim Energy – jointly owned by PNM Resources and a subsidiary of Cascade Investment, L.L.C., Optim Energy owns interests in three generating assets in Texas, totaling nearly 1,200 megawatts.

● PNM Resources’ share of Optim Energy quarterly net ongoing losses was $1.9 million, or $0.02 per diluted share, compared with earnings of $0.3 million in 2009. PNM Resources’ share of the net GAAP losses of Optim Energy was $2.3 million, or $0.02 per diluted share, compared with losses of $4.4 million, or $0.04 per diluted share, in 2009.

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PNM Resources Reports Q2 Earnings                                                       8-6-10p. 3 of 4

● PNM Resources' share of Optim Energy's ongoing quarterly EBITDA was $8.9 million, compared with $8.1 million in 2009. EBITDA improved as a result of reduced operational costs, higher ancillary services revenue and the return to more normal operations by the Lyondell Chemical Company plant that is adjacent to and a major customer of Optim’s Altura Cogen facility.

● Twin Oaks had an equivalent availability factor of 94.9 percent during the quarter. Availability factors were 95.3 percent for Altura Cogen and 89.7 percent for Cedar Bayou 4.

Corporate/Other – a segment that reflects costs at the PNM Resources holding company, mainly comprised of interest expense related to debt. For the purposes of this news release, the Corporate/Other segment excludes the results of Optim Energy as reported above.

● Corporate/Other reported ongoing and GAAP losses of $4.2 million, or $0.05 per diluted share, compared with 2009 ongoing losses of $5.4 million, or $0.06 per diluted share, and 2009 GAAP losses of $4.7 million, or $0.05 per diluted share.

2010 GUIDANCE RANGE

PNM Resources updated its 2010 financial projections, primarily as a result of better-than-expected performance by First Choice Power. Management now expects 2010 PNM Resources consolidated ongoing earnings to be in the range of $0.65 to $0.75 per diluted share. The previous range was $0.60 to $0.72 per diluted share. 2010 cash earnings are expected to be in the range of $305 million to $325 million, an increase from the previous range of $290 million to $315 million.

Management today also updated the expected 2010 EBITDA ranges for its competitive Texas operations. First Choice Power’s new range is $40 million to $50 million, up from the previously disclosed range of $25 million to $35 million. Because of the continued low-price energy market in Texas, Optim Energy’s EBITDA range was updated to $60 million to $65 million from the previously disclosed EBITDA range of $60 million to $70 million.

SECOND QUARTER EARNINGS CALL:  11 AM EASTERN TODAY

PNM Resources will discuss second quarter earnings results and the new guidance ranges during a live conference call and Web cast today at 11 a.m. Eastern. Speaking on the call will be Pat Vincent-Collawn, PNM Resources president and CEO, and Chuck Eldred, PNM Resources executive vice president and CFO.

Investors and analysts can participate in the live conference call by dialing (877) 377-7098 or (631) 291-4547 five to 10 minutes prior to the event and referencing “the PNM Resources second quarter earnings conference call.” A telephone replay will be available at 1 p.m. Eastern until midnight Aug. 20 by dialing (800) 642-1687 or (706) 645-9291 and using confirmation code 87042975. Listeners are encouraged to visit the Web site at least 30 minutes before the event to register, download and install any necessary audio software.

Supporting material for PNM Resources’ earnings announcements can be viewed and downloaded at http://www.pnmresources.com/investors/results.cfm.

The Web cast will be archived at http://www.pnmresources.com/investors/events.cfm.

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PNM Resources Reports Q2 Earnings                                                       8-6-10p. 4 of 4

E-MAIL ALERTS, RSS FEEDS AVAILABLE

PNM Resources encourages analysts, investors and other interested parties to visit the company’s Web site at www.PNMResources.com and register to automatically receive company financial information by e-mail or RSS feeds. Once registered, participants can choose from a menu to automatically receive requested information, including news releases, notices of webcasts and filings with the U.S. Securities and Exchange Commission. Participants can unsubscribe at any time and will not receive information that was not requested.

Background:

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2009 consolidated operating revenues from continuing operations of $1.6 billion. Through its utility and energy subsidiaries, PNM Resources has more than 2,710 megawatts of generation resources and serves electricity to more than 875,300 homes and businesses in New Mexico and Texas. The company also has a 50-percent ownership of Optim Energy, which owns nearly 1,200 megawatts of generation resources. For more information, visit the company’s Web site at www.PNMResources.com.

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', PNM's, or TNMP's (collectively, the "Companies") 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 and the Companies assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, the Companies caution readers not to place undue reliance on these statements. The Companies' 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. These factors include conditions affecting the Company’s ability to access the financial markets and negotiate new credit facilities for those expiring in 2011 and 2012, or Optim Energy’s access to additional debt financing following the utilization of its existing credit facility, including actions by ratings agencies affecting the Company’s credit ratings; the recession, its consequent extreme disruption in the credit markets, and its impacts on the electricity usage of the Company’s customers; state and federal regulatory and legislative decisions and actions, including appeals of prior regulatory proceedings, and including provisions relating to climate change, reduction of greenhouse gas emissions, coal combustion byproducts, and other power plant emissions; the ability of PNM to meet the renewable energy requirements established by the NM Public Regulation Commission (“NMPRC”), including the resource diver sity requirement, within the specified cost parameters; the ability of PNM to successfully utilize a future test year in its rate filing with the NMPRC, including PNM’s ability to accurately forecast operating and capital expenditures and withstand challenges by regulators and intervenors; the performance of generating units, including the Palo Verde Nuclear Generating Station, the San Juan Generating Station, the Four Corners Plant, and Optim Energy generating units, and transmission systems; the risk that Optim Energy desires to expand its generation capacity but is unable to identify and implement profitable acquisitions or that PNMR and ECJV will not agree to make additional capital contributions to Optim Energy; the potential unavailability of cash from PNMR’s subsidiaries or Optim Energy due to regulatory, statutory or contractual restrictions; the impacts of the decline in the values of marketable equity securities on the trust funds maintained to provide nuclear decommissioning funding an d pension and other postretirement benefits, including the levels of funding and expense; the ability of First Choice Power to attract and retain customers and collect amounts billed; changes in ERCOT protocols; changes in the cost of power acquired by First Choice Power; collections experience; insurance coverage available for claims made in litigation; fluctuations in interest rates; weather;water supply; changes in fuel costs; availability of fuel supplies; uncertainty regarding the requirements and related costs of decommissioning power plants owned or partially owned by PNM and Optim Energy and coal mines supplying certain PNM power plants, as well as the ability to recover decommissioning costs through charges to customers; the risk that replacement power costs incurred by PNM related to not meeting the specified capacity factor for its generating units under its Emergency Fuel and Purchased Power Adjustment Clause will not be app roved by the NMPRC; the risk that PNM may not be able to renew rights-of-way on Native American lands or that the costs of rights-of-way are not allowed to be recovered through rates charged to customers; the effectiveness of risk management and commodity risk transactions; seasonality and other changes in supply and demand in the market for electric power; the impact of mandatory energy efficiency measures on customer energy usage; variability of wholesale power prices and natural gas prices; volatility and liquidity in the wholesale power markets and the natural gas markets; uncertainty regarding the ongoing validity of government programs for emission allowances; changes in the competitive environment in the electric industry; the risk that the Company and Optim Energy may have to commit to substantial capital investments and additional operating costs to comply with new environmental requirements including possible future requirements to address concerns about global climate change, and the resultant imp acts on the operations and economic viability of generating plants in which PNM and Optim Energy have interests; the risks associated with completion of generation, transmission, distribution, and other projects, including construction delays and unanticipated cost overruns; uncertainty surrounding the status of PNM’s participation in jointly-owned projects resulting from the scheduled expiration of the operational documents for the projects beginning in 2015 and potential changes in the objectives of the participants in the projects; the outcome of legal proceedings; changes in applicable accounting principles; and the performance of state, regional, and national economies.

Non-GAAP Financial Measures

PNM Resources (“the Company”) uses ongoing earnings and ongoing earnings per diluted share (or ongoing diluted earnings per share) and EBITDA (earnings before interest charges, income taxes, depreciation and amortization) and ongoing EBITDA to evaluate the operations of the Company and to establish goals 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 generally accepted accounting principles in the U.S. (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 ot her companies.

CONTACTS:

Analysts                                                                Analysts & Media

Gina Jacobi                                                            Frederick Bermudez

Director, Investor Relations                                 (505) 241-4831

(505) 241-2211                                                      

(END)

PNM Resources

Schedule 1

Reconciliation of Ongoing to GAAP Earnings

(Preliminary and Unaudited)

	Quarter Ended June 30, 2010
	(in thousands)
	Utilities		First	Optim	Corp/
	PNM Electric	TNMP Electric	Choice	Energy (50%)	Other	PNMR
Ongoing Earnings (Loss)	$   10,665	$    4,106	$   10,663	$   (1,945)	$   (4,220)	$  19,269
Adjusting items, net of income tax effects*
Mark-to-market impact of economic hedges	(191)	-	5,890	(386)	-	5,313
Net change in unrealized impairments of NDT securities	(1,422)	-	-	-	-	(1,422)
Loss on reacquired debt	(282)	-	-	-	-	(282)
Total Adjustments	(1,895)	-	5,890	(386)	-	3,609
GAAP Net Earnings (Loss) Attributable to PNMR:	$    8,770	$    4,106	$   16,553	$   (2,331)	$   (4,220)	$  22,878
	Six Months Ended June 30, 2010
	(in thousands)
	Utilities		First	Optim	Corp/
	PNM Electric	TNMP Electric	Choice	Energy (50%)	Other	PNMR
Ongoing Earnings (Loss)	$   12,332	$    5,750	$   21,079	$   (5,879)	$   (8,546)	$  24,736
Adjusting items, net of income tax effects*
Mark-to-market impact of economic hedges	(3,409)	-	(11,979)	919	-	(14,469)
Net change in unrealized impairments of NDT securities	(697)	-	-	-	-	(697)
Loss on reacquired debt	(282)	-	-	-	-	(282)
Disposition of litigation	5,141	-	-	-	-	5,141
Total Adjustments	753	-	(11,979)	919	-	(10,307)
GAAP Earnings (Loss) Attributable to PNMR:	$   13,085	$    5,750	$    9,100	$   (4,960)	$   (8,546)	$  14,429
* Income tax effects calculated using tax rates of 35.65% for First Choice and TNMP and 39.59% for all other segments.

PNM Resources

Schedule 2

Reconciliation of Ongoing to GAAP Earnings

(Preliminary and Unaudited)

	Quarter Ended June 30, 2009
	(in thousands)
	Utilities			First	Optim	Corp/
	PNM Electric	TNMP Electric	PNM Gas	Choice	Energy (50%)	Other	PNMR
Ongoing Earnings (Loss)	$    9,673	$    2,202	$           -	$   12,608	$       327	$   (5,411)	$    19,399
Adjusting items, net of income tax effects*
Mark-to-market impact of economic hedges	2,406	-	-	3,346	(4,769)	-	983
Interest on uncertain tax positions	2,646	-		-	-	-	2,646
Gain on reacquired debt	-	-		-	-	(76)	(76)
Gain on sale of gas operations	-	-	(169)	-	-	-	(169)
Increase in legal reserve	(7,612)	-		-	-	-	(7,612)
Post sale discontinued operations	-	-	(2,442)	-	-	6	(2,436)
Regulatory disallowances	(16,078)	(436)	-	-	-	-	(16,514)
Sale of water rights	-	-	-	-	-	768	768
Net change in unrealized impairments of NDT securities	1,295	-	-	-	-	-	1,295
Work continuance planning	(383)	-	-	-	-	-	(383)
Total Adjustments	(17,726)	(436)	(2,611)	3,346	(4,769)	698	(21,498)
GAAP Earnings (Loss) Attributable to PNMR:
Continuing Operations	(8,053)	1,766		15,954	(4,442)	(4,713)	512
Discontinued Operations			(2,611)				(2,611)
Net Earnings (Loss)	$   (8,053)	$    1,766	$   (2,611)	$   15,954	$   (4,442)	$   (4,713)	$     (2,099)
	Six Months Ended June 30, 2009**
	(in thousands)
	Utilities			First	Optim	Corp/
	PNM Electric	TNMP Electric	PNM Gas	Choice	Energy (50%)	Other	PNMR
Ongoing Earnings (Loss)	$    9,589	$    3,623	$    7,621	$   19,367	$   (1,659)	$   (9,865)	$    28,676
Adjusting items, net of income tax effects*
Business Improvement Plan	(320)	-	-	-	-	350	30
CapRock settlement	-	-	-	-	-	9,062	9,062
Depreciation associated with sale of gas assets	-	-	1,112	-	-	-	1,112
Mark-to-market impact of economic hedges	(1,148)	-	-	3,625	(1,940)	-	537
Interest on uncertain tax positions	2,646	-	-	-	-	-	2,646
Gain on reacquired debt	-	-	-	-	-	4,415	4,415
Gain on sale of gas operations	-	-	66,951	-	-	-	66,951
Increase in legal reserve	(7,612)	-	-	-	-	-	(7,612)
Post sale discontinued operations	-	-	(2,443)	-	-	6	(2,437)
Regulatory disallowances	(16,078)	(436)	-	-	-	-	(16,514)
Sale of water rights	-	-	-	-	-	768	768
Net change in unrealized impairments of NDT securities	198	-	-	-	-	-	198
Work continuance planning	(382)	-	-	-	-	-	(382)
Total Adjustments	(22,696)	(436)	65,620	3,625	(1,940)	14,601	58,774
GAAP Earnings (Loss) Attributable to PNMR:
Continuing Operations	(13,107)	3,187		22,992	(3,599)	4,736	14,209
Discontinued Operations			73,241				73,241
Net Earnings (Loss)	$  (13,107)	$    3,187	$   73,241	$   22,992	$   (3,599)	$    4,736	$    87,450

* Income tax effects calculated using tax rates of 35.65% for TNMP and First Choice and 39.59% for all other segments unless otherwise indicated.

** As restated, see Note 12 of Notes to Consolidated Financial Statements in the 2009 Annual Reports on Form 10-K. The actuarial determination of the projected benefit obligation (PBO) for the PNM pension plan at December 31, 2009 revealed that there had been an increase in the PBO of $9.6 million due to the retirement of employees transferred to New Mexico Gas Company following the sale of PNM Gas in January 2009.  This increase was expensed, similar to a plan curtailment, as required by GAAP and reduced the gain recognized on the sale. Gain on sale of gas operations is net of income taxes (benefit) of $(0.1) million for the quarter ended June 30, 2009 and $34.1 million for the six months ended June 30, 2009.

PNM Resources

Schedule 3

Reconciliation of Ongoing to GAAP Earnings Per Diluted Share

(Preliminary and Unaudited)

	Quarter Ended June 30, 2010
	(earnings per diluted share)
	Utilities		First	Optim	Corp/
	PNM Electric	TNMP Electric	Choice	Energy (50%)	Other	PNMR
Ongoing Earnings (Loss)	$      0.12	$   0.04	$   0.12	$    (0.02)	$  (0.05)	$   0.21
Adjusting items
Mark-to-market impact of economic hedges	-	-	0.06	-	-	0.06
Net change in unrealized impairments of NDT securities	(0.02)	-	-	-	-	(0.02)
Loss on reacquired debt	-	-	-	-	-	-
Total Adjustments	(0.02)	-	0.06	-	-	0.04
GAAP Net Earnings (Loss) Attributable to PNMR:	$      0.10	$   0.04	$   0.18	$    (0.02)	$  (0.05)	$   0.25
Average Diluted Shares Outstanding:    91,832,650
	Six Months Ended June 30, 2010
	(earnings per diluted share)
	Utilities		First	Optim	Corp/
	PNM Electric	TNMP Electric	Choice	Energy (50%)	Other	PNMR
Ongoing Earnings (Loss)	$      0.13	$   0.06	$   0.23	$    (0.06)	$  (0.09)	$   0.27
Adjusting items
Mark-to-market impact of economic hedges	(0.04)	-	(0.13)	0.01	-	(0.16)
Net change in unrealized impairments of NDT securities	(0.01)	-	-	-	-	(0.01)
Loss on reacquired debt	-	-	-	-	-	-
Disposition of litigation	0.06	-	-	-	-	0.06
Total Adjustments	0.01	-	(0.13)	0.01	-	(0.11)
GAAP Earnings (Loss) Attributable to PNMR:	$      0.14	$   0.06	$   0.10	$    (0.05)	$  (0.09)	$   0.16
Average Diluted Shares Outstanding:    91,694,218

PNM Resources

Schedule 4

Reconciliation of Ongoing to GAAP Earnings Per Diluted Share

(Preliminary and Unaudited)

	Quarter Ended June 30, 2009
	(earnings per diluted share)
	Utilities			First	Optim	Corp/
	PNM Electric	TNMP Electric	PNM Gas	Choice	Energy (50%)	Other	PNMR
Ongoing Earnings (Loss)	$      0.11	$   0.02	$        -	$   0.14	$   0.00	$  (0.06)	$   0.21
Adjusting items
Mark-to-market impact of economic hedges	0.02	-	-	0.03	(0.04)	-	0.01
Interest on uncertain tax positions	0.03	-	-	-	-	-	0.03
Gain on reacquired debt	-	-	-	-	-	-	-
Gain on sale of gas operations	-	-	-	-	-	-	-
Increase in legal reserve	(0.08)	-	-	-	-	-	(0.08)
Post sale discontinued operations	-	-	(0.03)	-	-	-	(0.03)
Regulatory disallowances	(0.18)	-	-	-	-	-	(0.18)
Sale of water rights	-	-	-	-	-	0.01	0.01
Net change in unrealized impairments of NDT securities	0.01	-	-	-	-	-	0.01
Work continuance planning	-	-	-	-	-	-	-
Total Adjustments	(0.20)	-	(0.03)	0.03	(0.04)	0.01	(0.23)
GAAP Earnings (Loss) Attributable to PNMR:
Continuing Operations	(0.09)	0.02		0.17	(0.04)	(0.05)	0.01
Discontinued Operations			(0.03)				(0.03)
Net Earnings (Loss)	$     (0.09)	$   0.02	$  (0.03)	$   0.17	$  (0.04)	$  (0.05)	$  (0.02)
Average Diluted Shares Outstanding:    91,535,872
	Six Months Ended June 30, 2009*
	(earnings per diluted share)
	Utilities			First	Optim	Corp/
	PNM Electric	TNMP Electric	PNM Gas	Choice	Energy (50%)	Other	PNMR
Ongoing Earnings (Loss)	$      0.10	$   0.04	$   0.08	$   0.21	$  (0.02)	$  (0.10)	$   0.31
Adjusting items
Business improvement plan	-	-	-	-	-	-	-
CapRock settlement	-	-	-	-	-	0.10	0.10
Depreciation associated with sale of gas assets	-	-	0.01	-	-	-	0.01
Mark-to-market impact of economic hedges	(0.01)	-	-	0.04	(0.02)	-	0.01
Interest on uncertain tax positions	0.03	-	-	-	-	-	0.03
Gain on reacquired debt	-	-	-	-	-	0.05	0.05
Gain on sale of gas operations	-	-	0.74	-	-	-	0.74
Increase in legal reserve	(0.08)	-	-	-	-	-	(0.08)
Post sale discontinued operations	-	-	(0.03)	-	-	-	(0.03)
Regulatory disallowances	(0.18)	(0.01)	-	-	-	-	(0.19)
Sale of water rights	-	-	-	-	-	0.01	0.01
Net change in unrealized impairments of NDT securities	-	-	-	-	-	-	-
Work continuance planning	-	-	-	-	-	-	-
Total Adjustments	(0.24)	(0.01)	0.72	0.04	(0.02)	0.16	0.65
GAAP Earnings (Loss) Attributable to PNMR:
Continuing Operations	(0.14)	0.03		0.25	(0.04)	0.06	0.16
Discontinued Operations			0.80				0.80
Net Earnings (Loss)	$     (0.14)	$   0.03	$   0.80	$   0.25	$  (0.04)	$   0.06	$   0.96
Average Diluted Shares Outstanding:    91,488,112

* As restated, see Note 12 of Notes to Consolidated Financial Statements in the 2009 Annual Reports on Form 10-K. The actuarial determination of the projected benefit obligation (PBO) for the PNM pension plan at December 31, 2009 revealed that there had been an increase in the PBO of $9.6 million due to the retirement of employees transferred to New Mexico Gas Company following the sale of PNM Gas in January 2009.  This increase was expensed, similar to a plan curtailment, as required by GAAP and reduced the gain recognized on the sale.

PNM Resources

Schedule 5

Segment Reconciliation of GAAP Net Earnings to Ongoing EBITDA

(Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization)

(Preliminary and Unaudited)

(in millions)

	Quarter Ended June 30, 2010
	PNM Electric	TNMP Electric	First Choice	Corporate & Other*	PNMR Consolidated
GAAP Net Earnings (Loss) Attributable to PNMR	$8.8	$4.1	$16.6	($6.6)	$22.9
Interest charges	18.4	8.0	0.4	5.0	31.8
Income taxes	5.9	2.7	9.3	(4.4)	13.5
Depreciation and amortization	22.9	10.0	0.2	4.3	37.4
EBITDA	56.0	24.8	26.5	(1.7)	105.6
GAAP to ongoing adjustments (before tax)	2.4	0.0	(9.2)	0.8	(6.0)
Ongoing EBITDA	$58.4	$24.8	$17.3	($0.9)	$99.6
	Six Months Ended June 30, 2010
	PNM Electric	TNMP Electric	First Choice	Corporate & Other*	PNMR Consolidated
GAAP Net Earnings (Loss) Attributable to PNMR	$13.1	$5.8	$9.1	($13.6)	$14.4
Interest charges	36.5	15.8	0.7	10.2	63.2
Income taxes	8.8	3.7	5.1	(9.0)	8.6
Depreciation and amortization	45.8	20.1	0.5	8.3	74.7
EBITDA	104.2	45.4	15.4	(4.1)	160.9
GAAP to ongoing adjustments (before tax)	(2.7)	0.0	18.6	(1.5)	14.4
Ongoing EBITDA	$101.5	$45.4	$34.0	($5.6)	$175.3

* Corporate & Other segment includes equity in net earnings (loss) of Optim Energy. See Schedule 7 for calculation of Optim Energy ongoing EBITDA.

PNM Resources

Schedule 6

Segment Reconciliation of GAAP Net Earnings to Ongoing EBITDA

(Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization)

(Preliminary and Unaudited)

(in millions)

	Three Months Ended June 30, 2009
	PNM Electric	TNMP Electric	PNM Gas	First Choice	Corporate & Other*	PNMR Consolidated
GAAP Net Earnings (Loss) Attributable to PNMR	($8.1)	$1.8	($2.6)	$16.0	($9.2)	($2.1)
Interest charges	17.4	7.9	0.0	0.8	5.7	31.8
Income taxes	(5.1)	1.2	(1.9)	9.0	(6.2)	(3.0)
Depreciation and amortization	22.9	8.9	0.0	0.5	4.6	36.9
EBITDA	27.1	19.8	(4.5)	26.3	(5.1)	63.6
GAAP to ongoing adjustments (before tax)	28.8	0.7	4.5	(5.2)	6.7	35.5
Ongoing EBITDA	$55.9	$20.5	$0.0	$21.1	$1.6	$99.1
	Six Months Ended June 30, 2009
	PNM Electric	TNMP Electric	PNM Gas	First Choice	Corporate & Other*	PNMR Consolidated
GAAP Net Earnings (Loss) Attributable to PNMR	($13.1)	$3.2	$73.2	$23.0	$1.1	$87.4
Interest charges	34.6	12.0	1.0	1.8	12.3	61.7
Income taxes	(8.5)	2.2	38.2	12.9	(0.2)	44.6
Depreciation and amortization	45.4	17.5	0.0	1.0	9.1	73.0
EBITDA	58.4	34.9	112.4	38.7	22.3	266.7
Ongoing adjustments (before tax)	36.4	0.7	(96.9)	(5.6)	(21.0)	(86.4)
Ongoing EBITDA	$94.8	$35.6	$15.5	$33.1	$1.3	$180.3

* Corporate & Other segment includes equity in net earnings (loss) of Optim Energy. See Schedule 7 for calculation of Optim Energy ongoing EBITDA

PNM Resources

Schedule 7

Calculation of Optim Energy Ongoing EBITDA

(Earnings Before Interest Charges, Income Taxes, Depreciation and Amortization)

(Preliminary and Unaudited)

(in millions)

	Three Months Ended			Six Months Ended
	June 30, 2010			June 30, 2010
	(in millions)
GAAP Net Earnings	$	(6.5	)	$	(14.4	)
Interest expense		4.7			9.3
Income tax		0.0			0.1
Depreciation and amortization expense		12.9			24.9
Mark-to-market impact of economic hedges		1.3			(3.0	)
Purchase accounting amortizations		5.4			10.7
Ongoing Optim Energy EBITDA		17.8			27.6
50 percent of Ongoing EBITDA (PNMR share)	$	8.9		$	13.8

	Three Months Ended			Six Months Ended
	June 30, 2009			June 30, 2009
	(in millions)
GAAP Net Earnings	$	(14.1	)	$	(11.0	)
Interest expense		3.0			5.5
Income tax		(0.1	)		0.1
Depreciation and amortization expense		7.4			15.1
Mark-to-market impact of economic hedges		15.8			6.4
Purchase accounting amortizations		4.2			8.7
Ongoing Optim Energy EBITDA		16.2			24.8
50 percent of Ongoing EBITDA (PNMR share)	$	8.1		$	12.4

PNM Resources

Schedule 8

Reconciliation of Ongoing (non-GAAP) Net Earnings

to GAAP Consolidated Statement of Earnings (Loss)

 (Preliminary and Unaudited)

(in thousands, except per share data)

		Six Months Ended June 30,
		2010										2009
		GAAP			Adjustments				Ongoing			GAAP			Adjustments				Ongoing
		(in thousands, except per share data)
Operating revenues		$	789,212		$	3,273		(a)	$	792,485		$	786,974		$	11,280		(f)	$	798,254
Cost of energy			342,069			(11,757	)	(b)		330,312			356,501			10,962		(g)		367,463
Gross margin			447,143			15,030				462,173			430,473			318				430,791
Other operating expenses			288,332			(1,417	)	(c)		286,915			302,675			(29,656	)	(h)		273,019
Depreciation and amortization			74,655			(1,415	)	(c)		73,240			73,017			(1,414	)	(c)		71,603
Operating income (loss)			84,156			17,862				102,018			54,781			31,388				86,169
Equity in net earnings (loss) of Optim Energy			(8,210	)		(1,521	)	(a)		(9,731	)		(5,958	)		3,212		(a)		(2,746	)
Net other income (deductions)			16,866			(6,890	)	(d)		9,976			38,222			(28,301	)	(i)		9,921
Interest charges			(63,171	)		-				(63,171	)		(60,766	)		-				(60,766	)
Earnings (Loss) before Income Taxes			29,641			9,451				39,092			26,279			6,299				32,578
Income Taxes (Benefit)			8,552			5,540		(e)		14,092			6,452			4,807		(e)		11,259
Earnings (Loss) from Continuing Operations			21,089			3,911				25,000			19,827			1,492				21,319
Earnings from Discontinued Operations, net
of Income Taxes			-			-				-			73,241			(65,620	)	(j)		7,621
Net Earnings (Loss)			21,089			3,911				25,000			93,068			(64,128	)			28,940
Earnings Attributable to Valencia Non-controlling
	Interest		(6,396	)		6,396		(c)		-			(5,354	)		5,354		(c)		-
Preferred Stock Dividend Requirements of Subsidiary			(264	)		-				(264	)		(264	)		-				(264	)
Net Earnings (Loss) Attributable to PNMR		$	14,429		$	10,307			$	24,736		$	87,450		$	(58,774	)		$	28,676
Earnings (Loss) from Continuing Operations Attributable to PNMR per Common Share:
	Basic	$	0.16		$	0.11			$	0.27		$	0.16		$	0.07			$	0.23
	Diluted	$	0.16		$	0.11			$	0.27		$	0.16		$	0.07			$	0.23
Net Earnings (Loss) Attributable to PNMR per Common Share:
	Basic	$	0.16		$	0.11			$	0.27		$	0.96		$	(0.65	)		$	0.31
	Diluted	$	0.16		$	0.11			$	0.27		$	0.96		$	(0.65	)		$	0.31
Average common shares outstanding:
	Basic		91,553										91,371
	Diluted		91,694										91,488
(a)	Mark-to-market impact of economic hedges
(b)	Mark-to-market impact of economic hedges $(20,985); Consolidation of Valencia $9,228
(c)	Consolidation of Valencia
(d)	Disposition of litigation $(8,509); Net change in unrealized impairments of NDT securities $1,153; Loss on reacquired debt $466.
(e)	Net taxes on adjusting items
(f)	Mark-to-market impact of economic hedges $(1,320); Addition to legal reserve $12,600
(g)	Mark-to-market impact of economic hedges $2,410; Consolidation of Valencia $8,552
(h)	Business improvement plan $38; Post sale discontinued operations $9; Work continuance planning $(633); Regulatory disallowances $(27,286); Consolidation of Valencia $(1,784)
(i)	Net change in unrealized impairments of NDT securities $(328); Business improvement plan $(10); Gain on reacquired debt $(7,312); Sale of water rights $(1,272); Interest on
	uncertain tax positions $(4,379); CapRock settlement $(15,000)
(j)	Depreciation associated with sale of gas assets $(1,112); Gain on sale of gas operations $(66,951); Post sale discontinued operations $2,443

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
	(In thousands, except per share amounts)
Electric Operating Revenues	$	405,817		$	401,110		$	789,212		$	786,974
Operating Expenses:
Cost of energy		151,181			175,253			342,069			356,501
Administrative and general		62,420			61,550			125,205			123,687
Energy production costs		51,811			47,134			105,696			95,691
Regulatory disallowances		-			27,286			-			27,286
Depreciation and amortization		37,376			36,946			74,655			73,017
Transmission and distribution costs		15,672			16,398			29,562			30,416
Taxes other than income taxes		13,683			11,665			27,869			25,595
Total operating expenses		332,143			376,232			705,056			732,193
Operating income		73,674			24,878			84,156			54,781
Other Income and Deductions:
Interest income		5,083			11,223			10,110			16,446
Gains (losses) on investments held by NDT		(1,342	)		2,469			400			(1,913	)
Other income		1,171			5,157			11,370			28,321
Equity in net earnings (loss) of Optim Energy		(3,858	)		(7,353	)		(8,210	)		(5,958	)
Other deductions		(3,173	)		(2,272	)		(5,014	)		(4,632	)
Net other income (deductions)		(2,119	)		9,224			8,656			32,264
Interest Charges		31,761			31,817			63,171			60,766
Earnings before Income Taxes		39,794			2,285			29,641			26,279
Income Taxes (Benefit)		13,492			(1,134	)		8,552			6,452
Earnings from Continuing Operations		26,302			3,419			21,089			19,827
Earnings (Loss) from Discontinued Operations, net of Income
Taxes (Benefit) of $0,  $(1,861), $0 and $38,166		-			(2,611	)		-			73,241
Net Earnings		26,302			808			21,089			93,068
Earnings Attributable to Valencia Non-controlling Interest		(3,292	)		(2,775	)		(6,396	)		(5,354	)
Preferred Stock Dividend Requirements of Subsidiary		(132	)		(132	)		(264	)		(264	)
Net Earnings (Loss) Attributable to PNMR	$	22,878		$	(2,099	)	$	14,429		$	87,450
Earnings from Continuing Operations Attributable to PNMR per Common Share:
Basic	$	0.25		$	0.01		$	0.16		$	0.16
Diluted	$	0.25		$	0.01		$	0.16		$	0.16
Net Earnings (Loss) Attributable to PNMR per Common Share:
Basic	$	0.25		$	(0.02	)	$	0.16		$	0.96
Diluted	$	0.25		$	(0.02	)	$	0.16		$	0.96
Dividends Declared per Common Share	$	0.125		$	0.125		$	0.250		$	0.250

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30,		December 31,
	2010		2009
	(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	19,097	$	14,641
Accounts receivable, net of allowance for uncollectible accounts of $10,598 and $12,783		106,104		106,593
Unbilled revenues		89,371		78,274
Other receivables		65,212		77,672
Materials, supplies, and fuel stock		52,246		50,631
Regulatory assets		28,589		7,476
Commodity derivative instruments		40,556		50,619
Income taxes receivable		72,637		129,171
Other current assets		92,878		63,128
Total current assets		566,690		578,205
Other Property and Investments:
Investment in PVNGS lessor notes		121,454		137,511
Equity investment in Optim Energy		199,676		195,666
Investments held by NDT		135,496		137,032
Other investments		22,481		25,528
Non-utility property, net of accumulated depreciation of $1,984 and  $3,779		7,668		7,923
Total other property and investments		486,775		503,660
Utility Plant:
Plant in service and plant held for future use		4,747,334		4,693,530
Less accumulated depreciation and amortization		1,621,441		1,611,496
		3,125,893		3,082,034
Construction work in progress		179,652		181,078
Nuclear fuel, net of accumulated amortization of $21,689 and $19,456		78,985		69,337
Net utility plant		3,384,530		3,332,449
Deferred Charges and Other Assets:
Regulatory assets		523,482		524,136
Goodwill		321,310		321,310
Other intangible assets, net of accumulated amortization of $5,357 and $5,272		26,482		26,567
Commodity derivative instruments		3,251		2,413
Other deferred charges		91,002		71,181
Total deferred charges and other assets		965,527		945,607
	$	5,403,522	$	5,359,921

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30,			December 31,
	2010			2009
	(In thousands, except share information)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term debt	$	285,000		$	198,000
Current installments of long-term debt		2,125			2,125
Accounts payable		110,956			111,432
Accrued interest and taxes		42,233			45,341
Regulatory liabilities		1,463			908
Commodity derivative instruments		37,106			24,025
Other current liabilities		112,260			181,442
Total current liabilities		591,143			563,273
Long-term Debt		1,565,527			1,565,206
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes		543,730			531,166
Accumulated deferred investment tax credits		19,304			20,518
Regulatory liabilities		352,364			350,324
Asset retirement obligations		73,903			70,963
Accrued pension liability and postretirement benefit cost		275,519			281,923
Commodity derivative instruments		10,727			4,549
Other deferred credits		127,039			121,394
Total deferred credits and other liabilities		1,402,586			1,380,837
Total liabilities		3,559,256			3,509,316
Commitments and Contingencies (See Note 9)
Cumulative Preferred Stock of Subsidiary
without mandatory redemption requirements ($100 stated value, 10,000,000 shares authorized:
issued and outstanding 115,293 shares)		11,529			11,529
Equity:
PNMR Convertible Preferred Stock, Series A without mandatory redemption requirements
(no stated value, 10,000,000 shares authorized: issued and outstanding 477,800 shares)		100,000			100,000
PNMR common stockholders’ equity:
Common stock outstanding (no par value, 120,000,000 shares authorized: issued
and outstanding 86,673,174 shares)		1,290,247			1,289,890
Accumulated other comprehensive income (loss), net of income taxes		(55,128	)		(46,057	)
Retained earnings		408,882			405,884
Total PNMR common stockholders’ equity		1,644,001			1,649,717
Non-controlling interest in Valencia		88,736			89,359
Total equity		1,832,737			1,839,076
	$	5,403,522		$	5,359,921

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2010			2009
	(In thousands)
Cash Flows From Operating Activities:
Net earnings	$	21,089		$	93,068
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization		89,608			84,843
PVNGS firm sales contract revenue		(28,856	)		(28,152	)
Bad debt expense		13,035			25,672
Deferred income taxes (benefit)		15,649			(55,915	)
Equity in net (earnings) loss of Optim Energy		8,210			5,958
Net unrealized (gains) losses on derivatives		24,752			(2,307	)
Realized (gains) losses on investments held by NDT		(400	)		1,913
Gain on sale of PNM Gas		-			(101,090	)
(Gain) loss on reacquired debt		466			(7,316	)
Stock based compensation expense		1,962			1,520
Regulatory disallowances		-			27,286
Increase in legal reserve		-			12,600
Other, net		1,822			(281	)
Changes in certain assets and liabilities:
Accounts receivable and unbilled revenues		(23,643	)		(37,067	)
Materials, supplies, and fuel stock		(1,615	)		921
Other current assets		(34,909	)		(2,928	)
Other assets		(5,739	)		666
Accounts payable		(476	)		(93,073	)
Accrued interest and taxes		55,024			51,641
Other current liabilities		(44,694	)		(7,218	)
Other liabilities		(15,083	)		(5,111	)
Net cash flows from operating activities		76,202			(34,370	)
Cash Flows From Investing Activities:
Utility plant additions		(136,296	)		(132,045	)
Proceeds from sales of investments held by NDT		36,285			75,850
Purchases of investments held by NDT		(37,850	)		(77,236	)
Proceeds from sale of PNM Gas		-			640,620
Transaction costs for sale of PNM Gas		-			(10,924	)
Return of principal on PVNGS lessor notes		14,216			11,913
Investments in Optim Energy		(16,407	)		-
Other, net		1,416			1,613
Net cash flows from investing activities		(138,636	)		509,791

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2010			2009
	(In thousands)
Cash Flows From Financing Activities:
Short-term borrowings (repayments), net		87,000			(559,667	)
Long-term borrowings		403,845			309,242
Repayment of long-term debt		(403,845	)		(314,079	)
Issuance of common stock		-			1,213
Proceeds from stock option exercise		778			-
Purchase of common stock to satisfy stock awards		(2,269	)		(907	)
Excess tax (shortfall) from stock-based payment arrangements		(114	)		(645	)
Dividends paid		(23,127	)		(23,103	)
Equity transactions with Valencia’s owner		(7,019	)		(6,712	)
Payments received on PVNGS firm-sales contracts		15,233			15,347
Debt issuance costs and other		(3,592	)		(10,732	)
Net cash flows from financing activities		66,890			(590,043	)
Change in Cash and Cash Equivalents		4,456			(114,622	)
Cash and Cash Equivalents at Beginning of Period		14,641			140,644
Cash and Cash Equivalents at End of Period	$	19,097		$	26,022
Supplemental Cash Flow Disclosures:
Interest paid, net of capitalized interest	$	61,188		$	58,937
Income taxes paid (refunded), net	$	(63,408	)	$	49,039

The following table shows PNM Electric operating revenues by customer class, including intersegment revenues and average number of customers:

	Three Months Ended June 30,									Six Months Ended June 30,
	2010			2009			Change			2010			2009		Change
				(In millions, except customers)
Residential	$	79.2		$	69.8		$	9.4		$	163.6		$	143.6	$	20.0
Commercial		91.7			82.7			9.0			164.6			152.6		12.0
Industrial		20.7			19.0			1.7			41.0			38.0		3.0
Public authority		5.0			4.8			0.2			9.4			9.2		0.2
Other retail		3.0			3.7			(0.7	)		4.9			6.7		(1.8	)
Transmission		9.1			7.4			1.7			18.9			15.1		3.8
Firm requirements wholesale		6.9			6.1			0.8			15.1			13.6		1.5
Other sales for resale		28.6			34.9			(6.3	)		59.2			78.4		(19.2	)
Mark-to-market activity		(1.1	)		(1.9	)		0.8			(3.1	)		1.3		(4.4	)
	$	243.1		$	226.5		$	16.6		$	473.6		$	458.5	$	15.1
Average retail customers (thousands)		501.3			498.7			2.6			501.1			498.3		2.8

The following table shows PNM Electric GWh sales by customer class:

	Three Months Ended June 30,							Six Months Ended June 30,
	2010		2009		Change			2010		2009		Change
					(Gigawatt hours)
Residential		744.3		727.2		17.1			1,602.8		1,522.9		79.9
Commercial		1,024.6		976.1		48.5			1,905.8		1,831.7		74.1
Industrial		363.9		362.3		1.6			713.7		717.6		(3.9	)
Public authority		63.6		64.7		(1.1	)		117.8		116.4		1.4
Firm requirements wholesale		163.1		156.3		6.8			340.3		340.0		0.3
Other sales for resale		544.2		1,172.0		(627.8	)		1,085.4		2,232.1		(1,146.7	)
		2,903.7		3,458.6		(554.9	)		5,765.8		6,760.7		(994.9	)

The following table shows TNMP Electric operating revenues by customer class, including intersegment revenues, and average number of customers:

	Three Months Ended June 30,							Six Months Ended June 30,
	2010		2009		Change			2010		2009		Change
			(In millions, except customers)
Residential	$	20.1	$	17.3	$	2.8		$	39.0	$	31.7	$	7.3
Commercial		19.7		19.2		0.5			37.2		35.2		2.0
Industrial		3.1		3.2		(0.1	)		6.0		6.1		(0.1	)
Other		9.7		7.1		2.6			18.5		15.0		3.5
	$	52.6	$	46.8	$	5.8		$	100.7	$	88.0	$	12.7
Average customers (thousands) (1)		229.4		228.5		0.9			229.0		228.3		0.7

     (1)   Under TECA, customers of TNMP Electric in Texas have the ability to choose First Choice or any other REP to provide energy.  The average customers reported above include 76,768 and 87,538 customers of TNMP Electric for the three months ended June 30, 2010 and 2009, and 77,981 and 88,716 for the six months ended June 30, 2010 and 2009, who have chosen First Choice as their REP.  These customers are also included in the First Choice segment.

The following table shows TNMP Electric GWh sales by customer class:

	Three Months Ended June 30,							Six Months Ended June 30,
	2010		2009		Change			2010		2009		Change
					(Gigawatt hours(1))
Residential		643.7		617.9		25.8			1,255.2		1,127.8		127.4
Commercial		588.5		584.4		4.1			1,064.9		1,044.8		20.1
Industrial		577.0		529.6		47.4			1,093.8		953.7		140.1
Other		25.8		26.2		(0.4	)		50.6		52.0		(1.4	)
		1,835.0		1,758.1		76.9			3,464.5		3,178.3		286.2

     (1)   The GWh sales reported above include 246.9 and 281.0 GWhs for the three months ended June 30, 2010 and 2009, and 496.4 and 529.4 GWhs for the six months ended June 30, 2010 and 2009 used by customers of TNMP Electric, who have chosen First Choice as their REP.  These GWhs are also included below in the First Choice segment.

 The following table shows First Choice operating revenues by customer class, including intersegment revenues, and actual number of customers:

	Three Months Ended June 30,								Six Months Ended June 30,
	2010			2009		Change			2010			2009		Change
				(In millions, except customers)
Residential	$	75.3		$	92.8	$	(17.5	)	$	150.0		$	168.7	$	(18.7	)
Mass-market		4.1			6.4		(2.3	)		8.4			14.7		(6.3	)
Mid-market		36.4			33.7		2.7			67.3			65.8		1.5
Trading gains (losses)		(0.1	)		0.1		(0.2	)		(0.1	)		-		(0.1	)
Other		4.2			5.0		(0.8	)		8.7			10.9		(2.2	)
	$	119.9		$	138.0	$	(18.1	)	$	234.3		$	260.1	$	(25.8	)
Actual customers (thousands) (1,2)		216.1			243.3		(27.2	)		216.1			243.3		(27.2	)

          (1)   See note above in the TNMP Electric segment discussion about the impact of TECA.

          (2)   Due to the competitive nature of First Choice’s business, actual customer counts are presented in the table above as a more representative business indicator than the average customers that are shown in the table for TNMP customers.

The following table shows First Choice GWh electric sales by customer class:

	Three Months Ended June 30,							Six Months Ended June 30,
	2010		2009		Change			2010		2009		Change
			(Gigawatt hours) (1)
Residential		549.3		644.1		(94.8	)		1,099.4		1,145.9		(46.5	)
Mass-market		24.9		37.3		(12.4	)		51.4		79.3		(27.9	)
Mid-market		321.2		273.8		47.4			572.4		522.5		49.9
Other		1.4		2.9		(1.5	)		3.5		5.3		(1.8	)
		896.8		958.1		(61.3	)		1,726.7		1,753.0		(26.3	)

(1)  See note above in the TNMP Electric segment discussion about the impact of TECA.