TXNM Energy (TXNM) risk factors, FY2025 10-K

Regulatory Risks

1. 01and other business considerations, could jeopardize the economic viability of certain generating facilities or the ability or willingness of individual participants to continue their participation through the periods currently contemplated in the agreements governing those facilitiesNew
2. 02TXNM, PNM, and TNMP are subject to complex government regulation unrelated to the environment, which may have a negative impact on their businesses, financial position and results of operations

Operational Risks

1. 03Advances in technology could make electric generating facilities less competitive
2. 04Costs of decommissioning, remediation, and restoration of nuclear and fossil-fueled power plants, as well as reclamation of related coal mines, could exceed the estimates of TXNM and PNM as well as the amounts PNM recovers from its ratepayers, which could negatively impact results of operations and liquidity
3. 05The financial performance of TXNM, PNM, and TNMP may be adversely affected if power plants, other generation resources, and transmission and distribution systems do not operate reliably and efficiently
4. 06TXNM, PNM, and TNMP are subject to information security breaches and risks of unauthorized access to their information and operational technology systems as well as physical threats to assets70% rewritten
5. 07frequently and continue to evolve with the use of artificial intelligence and the Company may not be able to protect against all such actionsNew
6. 08There are inherent risks in the ownership and operation of nuclear facilities
7. 09Peak demand for power could exceed forecasted supply capacity, resulting in increased costs for purchasing capacity in the market or building additional generation facilities and/or energy storage facilities
8. 10Difficulties in obtaining permits and rights-of-way could negatively impact PNM’s results of operations

General Economic and Weather Risks

1. 11Changes in interest rates could adversely affect our business
2. 12General economic conditions of the nation and/or specific areas can affect the Company’s customers and suppliers. Economic recession or downturn may result in decreased consumption by customers and increased bad debt expense, and could also negatively impact suppliers, all of which could negatively affect the Company
3. 13The operating results of TXNM and its operating subsidiaries are seasonal and are affected by weather conditions
4. 14The impact of wildfires could negatively affect PNM’s and TNMP’s results of operations

Risks Relating to the Proposed Merger with Blackstone Infrastructure

1. 15There is no assurance when or if the proposed Merger will be completedNew
2. 16Blackstone Infrastructure and TXNM may be unable to obtain the regulatory approvals required to complete the proposed MergerNew
3. 17The announcement and pendency of the proposed Merger, during which TXNM is subject to certain operating restrictions, could have an adverse effect on TXNM’s businesses, results of operations, financial condition, or cash flowsNew
4. 18TXNM will incur substantial transaction fees and costs in connection with the proposed MergerNew
5. 19The termination of the Merger Agreement could negatively impact TXNMNew
6. 20Lawsuits have been, and additional lawsuits may be, filed that challenge the proposed Merger, and adverse judgments in these lawsuits may prevent the proposed Merger from becoming effective within the expected timeframe or at allNew
7. 21The Merger Agreement contains provisions that could discourage a potential alternative acquirer that might be willing to pay more to acquire TXNMNew

Financial Risks

1. 22TXNM has counterparty credit risk in connection with financial support that was provided to facilitate the coal supply arrangement for SJGS. Adverse developments from these factors could have a negative impact on the business, financial condition, results of operations, and cash flows of PNM and TXNM
2. 23TXNM and its subsidiaries’ substantial indebtedness could adversely affect its financial condition
3. 24Servicing TXNM and its subsidiaries’ debt requires a significant amount of cash, and it may not have sufficient cash flow from its business to pay its substantial debt
4. 25Despite TXNM’s current consolidated debt levels, TXNM and its subsidiaries may still incur substantially more debt or take other actions which would intensify the risks discussed above26% rewritten
5. 26The fundamental change repurchase features of the Convertible Notes may delay or prevent an otherwise beneficial attempt to acquire TXNM61% rewritten
6. 27TXNM may be unable to meet its ongoing and future financial obligations and to pay dividends on its common stock if its subsidiaries are unable to pay dividends or distributions to TXNM
7. 28Disruption in the credit and capital markets may impact the Company’s strategy and ability to raise capital
8. 29Reduction in credit ratings or changing rating agency requirements could materially and adversely affect the Company’s growth, strategy, business, financial position, results of operations, and liquidity
9. 30Impairments of goodwill and long-lived assets of TXNM, PNM, and TNMP could adversely affect the Company’s business, financial position, liquidity, and results of operations
10. 31The impacts and implementation of U.S. tax reform legislation may negatively impact TXNM’s, PNM’s, and TNMP’s businesses, financial position, results of operations, and cash flows43% rewritten
11. 32Provisions of TXNM’s organizational documents, as well as several other statutory and regulatory factors, will limit another party’s ability to acquire TXNM and could deprive TXNM’s shareholders of the opportunity to receive a takeover premium for shares of TXNM’s common stock