FINANCIAL INFORMATION 16 Selected Financial Data 17 Management’s Discussion and Analysis 43 Consolidated Financial Statements 42 Management’s Responsibility for Financial Statements and Report of Independent Auditors 49 Notes to Consolidated Financial Statements Statements made in this filing that relate to future events or the Company’s 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 are subject to risk and uncertainties. The Company assumes no obligation to update this information. Because actual results may differ materially from expectations, projections, estimates, goals and targets, the Company cautions readers not to place undue reliance on these forward-looking statements. Future financial results will be affected by a number of factors, including interest rates, weather, fuel costs, changes in supply and demand in the market for electric power, wholesale power prices, market liquidity, the competitive environment in the electric and natural gas industries, the performance of generating units and transmission system, state and federal regulatory and legislative decisions and actions, the recoverability of regulatory assets, the outcome of legal proceedings, changes in applicable accounting principles and the performance of state, regional and national economies.  Disclosure Regarding Forward Looking Statements 18 P N M R E S O U R C E S • 2003 Annual Report to Shareholders Effective as of March 1, 2004 * retiring 6.30.04 Melvin J. Christopher, 43,  VP, Energy Supply and Marketing  •  Patrick J. Goodman, 54,  VP, Power Production  •  Sarita P. Loehr, 46,  VP, Operations and Engineering  •  Cindy E. McGill, 47, VP, Customer and Market Services  •  John H. Myers, 46,  VP, Construction and Reliability Jeffry E. Sterba, 49, Chairman,  President and CEO •  Roger J. Flynn, 61,  Executive VP, COO* • Alice A. Cobb, 56,  Senior VP, People Services and Development John R. Loyack, 40,  Senior VP, CFO •  Patrick T. Ortiz, 54,  Senior VP, General Counsel and Secretary •  Eddie Padilla, Jr., 50,  Senior VP, Power Marketing and Development •  William J. Real, 55,  Senior VP, Public Policy •  Barbara L. Barsky, 59,  VP, Investor Relations  •  Ernest T. C'de Baca, 50, VP, Governmental Affairs  •  Terry R. Horn, 51,  VP and Treasurer  •  Thomas G. Sategna, 50,  VP, Corporate Controller  OFFICERS OF PNM  (In addition to above) OFFICERS OF PNM RESOURCES BOARD OF DIRECTORS JEFFRY E. STERBA Chairman, President and  Chief Executive Officer of  PNM Resources, Inc., Age 49, Director since 2000 ROBERT G. ARMSTRONG President of Armstrong Energy Corporation, Age 57, Director since 1991 committees: Governance and Public Policy Audit and Ethics  JULIE A. DOBSON Chairman of TeleBright Inc.,  Age 47, Director since 2002 committees: Audit and Ethics - Chair Finance THEODORE F. PATLOVICH Retired Vice Chairman and Senior VP of Loctite Corporation, Age 76, Director since 2000 committees: Human Resources  and Compensation Finance BONNIE S. REITZ Retired Senior Vice President Sales and Distribution Continental Airlines, Age 51,  Director since 2002 committees: Human Resources and Compensation Governance and Public Policy JOAN B. WOODARD, Ph.D.  Executive Vice President and Deputy Director for Sandia National Laboratories, Age 51, Director since 2003 committees: Governance and Public Policy  Finance  committees: Human Resources  and Compensation - Chair Finance  ROBERT M. PRICE President of PSV, Inc., Age 73, Director since 1992 MANUEL T. PACHECO, Ph.D. President, University of Missouri System, Age 62,  Director since 2001 committees: Governance and  Public Policy - Chair  Human Resources  and Compensation committees: Finance - Chair Audit and Ethics R. MARTIN CHAVEZ, Ph.D.  Chairman and Chief Executive Officer of Kiodex, Inc., Age 40, Director since 2001 ADELMO E. ARCHULETA President and Chief Executive Officer of Molzen-Corbin & Associates Age 53, Director since 2003 committees: Audit and Ethics  Human Resources  and Compensation 14