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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes [Line Items]

Schedule of Components of Income Tax Expense (Benefit)

PNMR’s income taxes consist of the following components:

	Year Ended December 31,
	2014				2013				2012
	(In thousands)
Current federal income tax	$	(2,015	)		$	—			$	(1,296	)
Current state income tax	(728		)		(917		)		(37		)
Deferred federal income tax	59,814				50,044				51,559
Deferred state income tax	14,831				12,578				6,921
Amortization of accumulated investment tax credits	(2,164		)		(2,192		)		(2,237		)
Total income taxes	$	69,738			$	59,513			$	54,910

Schedule of Effective Income Tax Rate Reconciliation

PNMR’s provision for income taxes differed from the federal income tax computed at the statutory rate for each of the years shown. The differences are attributable to the following factors:

	Year Ended December 31,
	2014				2013				2012
	(In thousands)
Federal income tax at statutory rates	$	70,226			$	61,274			$	61,262
Amortization of accumulated investment tax credits	(2,164		)		(2,192		)		(2,237		)
Flow-through of depreciation items	1,344				1,132				1,284
Earnings attributable to non-controlling interest in Valencia	(4,945		)		(5,082		)		(4,918		)
State income tax, net of federal benefit	5,723				3,818				4,646
Impairment of state net operating loss carryforwards	3,129				—				—
Impairment of state production tax credits, net of federal benefit	894				3,880				718
Other	(4,469		)		(3,317		)		(5,845		)
Total income taxes	$	69,738			$	59,513			$	54,910
Effective tax rate	34.76		%		33.99		%		31.37		%

Schedule of Deferred Tax Assets and Liabilities

The components of PNMR’s net accumulated deferred income tax liability were:

	December 31,
	2014				2013
	(In thousands)
Deferred tax assets:
Net operating loss	$	153,858			$	134,418
Regulatory liabilities related to income taxes	78,858				83,838
Federal tax credit carryforwards	54,748				40,708
Other	68,566				75,832
Total deferred tax assets	356,030				334,796
Deferred tax liabilities:
Depreciation and plant related	(914,926		)		(814,671		)
Investment tax credit	(36,790		)		(25,855		)
Regulatory assets related to income taxes	(67,910		)		(66,352		)
CTC	(19,352		)		(22,262		)
Pension	(66,498		)		(58,780		)
Other	(115,282		)		(115,458		)
Total deferred tax liabilities	(1,220,758		)		(1,103,378		)
Net accumulated deferred income tax liabilities	(864,728		)		(768,582		)
Current accumulated deferred income tax (asset) liability	(26,383		)		(58,681		)
Non-current accumulated deferred income tax liability	$	(891,111	)		$	(827,263	)

Schedule of Deferred Income Tax Components

The following table reconciles the change in PNMR’s net accumulated deferred income tax liability to the deferred income tax benefit included in the Consolidated Statement of Earnings:

	Year Ended
	December 31, 2014
	(In thousands)
Net change in deferred income tax liability per above table	$	96,146
Change in tax effects of income tax related regulatory assets and liabilities	(6,538		)
Tax effect of mark-to-market adjustments	(1,612		)
Tax effect of excess pension liability	3,993
Adjustment for uncertain income tax positions	(4,858		)
Reclassification of unrecognized tax benefits	(15,031		)
Other	381
Deferred income taxes	$	72,481

Summary of Income Tax Contingencies

A reconciliation of unrecognized tax benefits (expenses) is as follows:

	PNMR				PNM				TNMP
	(In thousands)
Balance at December 31, 2011	$	19,580			$	10,752			$	7,701
Additions based on tax positions related to 2012	2,046				1,152				—
Reductions for tax positions of prior years	(2,428		)		(1,522		)		(905		)
Settlement payments	—				—				—
Balance at December 31, 2012	19,198				10,382				6,796
Additions based on tax positions related to 2013	(54		)		(54		)		—
Additions for tax positions of prior years	745				745				—
Settlement payments	—				—				—
Balance at December 31, 2013	19,889				11,073				6,796
Additions based on tax positions related to 2014	623				623				—
Additions (reductions) for tax positions of prior years	(5,481		)		532				(6,796		)
Settlement payments	—				—				—
Balance at December 31, 2014	$	15,031			$	12,228			$	—

Interest Income (Expense) Related to Income Taxes

Interest income (expense) related to income taxes is as follows:

	PNMR				PNM				TNMP
	(In thousands)
2014	$	146			$	148			$	(2	)
2013	$	242			$	251			$	(2	)
2012	$	243			$	244			$	(3	)

Accumulated Accrued Interest Receivable (Payable) Related to Income Taxes

Accumulated accrued interest receivable (payable) related to income taxes is as follows:

	PNMR				PNM				TNMP
	(In thousands)
December 31, 2014:
Accumulated accrued interest receivable	$	3,569			$	3,569			$	—
Accumulated accrued interest payable	$	(1,120	)		$	(24	)		$	(120	)
December 31, 2013:
Accumulated accrued interest receivable	$	4,048			$	4,048			$	—
Accumulated accrued interest payable	$	(1,118	)		$	(24	)		$	(118	)

Public Service Company of New Mexico [Member]

Income Taxes [Line Items]

Schedule of Components of Income Tax Expense (Benefit)

PNM’s income taxes consist of the following components:

	Year Ended December 31,
	2014				2013				2012
	(In thousands)
Current federal income tax	$	(2,175	)		$	(479	)		$	(12,951	)
Current state income tax	(979		)		(760		)		(1,815		)
Deferred federal income tax	45,890				42,806				56,194
Deferred state income tax	12,061				9,429				11,522
Amortization of accumulated investment tax credits	(2,164		)		(2,192		)		(2,237		)
Total income taxes	$	52,633			$	48,804			$	50,713

Schedule of Effective Income Tax Rate Reconciliation

The differences are attributable to the following factors:

	Year Ended December 31,
	2014				2013				2012
	(In thousands)
Federal income tax at statutory rates	$	53,930			$	53,018			$	54,710
Amortization of accumulated investment tax credits	(2,164		)		(2,192		)		(2,237		)
Flow-through of depreciation items	1,325				1,115				1,268
Earnings attributable to non-controlling interest in Valencia	(4,945		)		(5,082		)		(4,918		)
State income tax, net of federal benefit	5,522				6,202				6,500
Impairment of state net operating loss carryforwards	2,145				—				—
Other	(3,180		)		(4,257		)		(4,610		)
Total income taxes	$	52,633			$	48,804			$	50,713
Effective tax rate	34.16		%		32.22		%		32.44		%

Schedule of Deferred Tax Assets and Liabilities

The components of PNM’s net accumulated deferred income tax liability were:

	December 31,
	2014				2013
	(In thousands)
Deferred tax assets:
Net operating loss	$	108,505			$	99,247
Regulatory liabilities related to income taxes	74,293				78,849
Federal tax credit carryforwards	35,259				22,509
Other	35,681				37,008
Total deferred tax assets	253,738				237,613
Deferred tax liabilities:
Depreciation and plant related	(733,519		)		(661,239		)
Investment tax credit	(36,790		)		(25,855		)
Regulatory assets related to income taxes	(57,637		)		(55,844		)
Pension	(58,474		)		(52,104		)
Other	(70,714		)		(75,838		)
Total deferred tax liabilities	(957,134		)		(870,880		)
Net accumulated deferred income tax liabilities	(703,396		)		(633,267		)
Current accumulated deferred income tax (asset) liability	(12,418		)		(43,827		)
Non-current accumulated deferred income tax liability	$	(715,814	)		$	(677,094	)

Schedule of Deferred Income Tax Components

The following table reconciles the change in PNM’s net accumulated deferred income tax liability to the deferred income tax benefit included in the Consolidated Statement of Earnings:

	Year Ended
	December 31, 2014
	(In thousands)
Net change in deferred income tax liability per above table	$	70,129
Change in tax effects of income tax related regulatory assets and liabilities	(6,349		)
Tax effect of mark-to-market adjustments	(1,470		)
Tax effect of excess pension liability	3,993
Adjustment for uncertain income tax positions	1,155
Reclassification of unrecognized tax benefits	(12,228		)
Other	557
Deferred income taxes	$	55,787

Texas-New Mexico Power Company [Member]

Income Taxes [Line Items]

Schedule of Components of Income Tax Expense (Benefit)

TNMP’s income taxes consist of the following components:

	Year Ended December 31,
	2014				2013				2012
	(In thousands)
Current federal income tax	$	35			$	(4,957	)		$	9,152
Current state income tax	1,939				1,916				1,822
Deferred federal income tax	20,577				20,688				4,406
Deferred state income tax	(28		)		(26		)		(28		)
Total income taxes	$	22,523			$	17,621			$	15,352

Schedule of Effective Income Tax Rate Reconciliation

The differences are attributable to the following factors:

	Year Ended December 31,
	2014				2013				2012
	(In thousands)
Federal income tax at statutory rates	$	21,115			$	16,349			$	14,735
State income tax, net of federal benefit	1,257				1,247				1,185
Other	151				25				(568		)
Total income taxes	$	22,523			$	17,621			$	15,352
Effective tax rate	37.33		%		37.72		%		36.47		%

Schedule of Deferred Tax Assets and Liabilities

The components of TNMP’s net accumulated deferred income tax liability at December 31, were:

	December 31,
	2014				2013
	(In thousands)
Deferred tax assets:
Regulatory liabilities related to income taxes	$	4,565			$	4,988
Other	13,429				23,479
Total deferred tax assets	17,994				28,467
Deferred tax liabilities:
Depreciation and plant related	(174,510		)		(151,581		)
CTC	(19,352		)		(22,262		)
Regulatory assets related to income taxes	(10,197		)		(10,509		)
Loss on reacquired debt	(12,846		)		(13,516		)
Other	(12,636		)		(14,295		)
Total deferred tax liabilities	(229,541		)		(212,163		)
Net accumulated deferred income tax liabilities	(211,547		)		(183,696		)
Current accumulated deferred income tax (asset)	(6,398		)		(6,501		)
Non-current accumulated deferred income tax liability	$	(217,945	)		$	(190,197	)

Schedule of Deferred Income Tax Components

The following table reconciles the change in TNMP’s net accumulated deferred income tax liability to the deferred income tax benefit included in the Consolidated Statement of Earnings:

	Year Ended
	December 31, 2014
	(In thousands)
Net change in deferred income tax liability per above table	$	27,851
Change in tax effects of income tax related regulatory assets and liabilities	(111		)
Adjustment for uncertain tax positions	(6,796		)
Other	(395		)
Deferred income taxes	$	20,549

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