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Equity Method Investment

9 Months Ended

Sep. 30, 2021

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investment

Equity Method Investment

As discussed in Note 1 of the Company's 2020 Annual Reports on Form 10-K, PNMR Development and AEP OnSite Partners created NMRD in September 2017 to pursue the acquisition, development, and ownership of renewable energy generation projects, primarily in the state of New Mexico. As of September 30, 2021, NMRD’s renewable energy capacity in operation was 135.1 MW. PNMR Development and AEP OnSite Partners each have a 50% ownership interest in NMRD. The investment in NMRD is accounted for using the equity method of accounting because PNMR’s ownership interest results in significant influence, but not control, over NMRD and its operations.

In the nine months ended September 30, 2021 and 2020, PNMR Development made cash contributions of zero and $23.3 million to NMRD to be used primarily for its construction activities. In February 2021, NMRD paid PNMR Development a dividend of $3.0 million of which, $2.4 million represented PNMR Development's cumulative equity in earnings of NMRD as of March 31, 2021 and is presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2021. The portion of the dividend in excess of PNMR Development's cumulative equity in earnings of NMRD amounting to $0.6 million is presented as cash flows from investing activities.

PNMR presents its share of net earnings from NMRD in other income on the Condensed Consolidated Statements of Earnings. Summarized financial information for NMRD is as follows:

			Results of Operations
			Three Months Ended September 30,												Nine Months Ended September 30,
			2021						2020						2021						2020
			(In thousands)
Operating revenues			$	3,543					$	3,462					$	10,179					$	7,769
Operating expenses			2,422						2,100						7,360						5,152
Net earnings			$	1,121					$	1,362					$	2,819					$	2,617

			Financial Position
			September 30,						December 31,
			2021						2020
			(In thousands)
Current assets			$	9,164					$	8,046
Net property, plant, and equipment			168,053						172,585
Non-current assets			2,448						1,900
Total assets			179,665						182,531
Current liabilities			1,166						841
Non-current liabilities			370						380
Owners’ equity			$	178,129					$	181,310

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- References

No definition available.

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- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-URI http://asc.fasb.org/topic&trid=2196965

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