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Equity Method Investment

6 Months Ended

Jun. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investment

Equity Method Investment

As discussed in Note 1 of the Company's 2021 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 June 30, 2022, 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 six months ended June 30, 2022 and 2021, neither PNMR Development nor AEP OnSite Partners made any cash contributions to NMRD for its construction activities. In February 2021, NMRD paid both PNMR Development and AEP OnSite Partners a dividend of $3.0 million. As PNMR Development's cumulative equity in earnings of NMRD as of March 31, 2021 was $2.4 million, an equivalent amount was presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2021 and the remaining portion of the dividend, in excess of PNMR Development's cumulative equity in earnings of NMRD, of $0.6 million was 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 June 30,												Six Months Ended June 30,
			2022						2021						2022						2021
			(In thousands)
Operating revenues			$	4,021					$	3,885					$	6,817					$	6,635
Operating expenses			2,387						2,416						4,791						4,938
Net earnings			$	1,634					$	1,469					$	2,026					$	1,697

			Financial Position
			June 30,						December 31,
			2022						2021
			(In thousands)
Current assets			$	9,065					$	10,729
Net property, plant, and equipment			163,006						166,495
Non-current assets			9,676						2,289
Total assets			181,747						179,513
Current liabilities			1,045						824
Non-current liabilities			380						373
Owners’ equity			$	180,322					$	178,316

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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 https://asc.fasb.org/topic&trid=2196965

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