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Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information Segment Information
The following segment presentation is based on the methodology that management uses for making operating decisions and assessing performance of its various business activities. A reconciliation of the segment presentation to the GAAP financial statements is provided.

PNM

PNM includes the retail electric utility operations of PNM that are subject to traditional rate regulation by the NMPRC. PNM provides integrated electricity services that include the generation, transmission, and distribution of electricity for retail electric customers in New Mexico. PNM also includes the generation and sale of electricity into the wholesale market, as well as providing transmission services to third parties. The sale of electricity includes the asset optimization of PNM’s jurisdictional capacity, as well as the capacity excluded from retail rates. FERC has jurisdiction over wholesale power and transmission rates.

TNMP

TNMP is an electric utility providing services in Texas under the TECA. TNMP’s operations are subject to traditional rate regulation by the PUCT. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service area. TNMP also provides transmission services at regulated rates to other utilities that interconnect with TNMP’s facilities.

Corporate and Other

The Corporate and Other segment includes PNMR holding company activities, primarily related to corporate level debt and PNMR Services Company. The activities of PNMR Development and the equity method investment in NMRD are also included in Corporate and Other. Eliminations of intercompany transactions are reflected in the Corporate and Other segment.

The following tables present summarized financial information for PNMR by segment. PNM and TNMP each operate in only one segment. Therefore, tabular segment information is not presented for PNM and TNMP.
PNMR SEGMENT INFORMATION
PNMTNMPCorporate
and Other		PNMR Consolidated
(In thousands)
Three Months Ended September 30, 2022
Electric operating revenues$597,337 $132,551 $— $729,888 
Cost of energy303,351 30,988 — 334,339 
Utility margin293,986 101,563 — 395,549 
Other operating expenses108,710 32,766 (5,260)136,216 
Depreciation and amortization45,361 24,960 6,249 76,570 
Operating income (loss)139,915 43,837 (989)182,763 
Interest income (expense)3,888 148 (67)3,969 
Other income (deductions)(14,443)2,243 181 (12,019)
Interest charges(15,467)(9,851)(9,208)(34,526)
Segment earnings (loss) before income taxes
113,893 36,377 (10,083)140,187 
Income taxes (benefit)12,121 4,946 (3,617)13,450 
Segment earnings (loss)
101,772 31,431 (6,466)126,737 
Valencia non-controlling interest
(4,172)— — (4,172)
Subsidiary preferred stock dividends
(132)— — (132)
Segment earnings (loss) attributable to PNMR
$97,468 $31,431 $(6,466)$122,433 
Nine Months Ended September 30, 2022
Electric operating revenues$1,312,800 $360,936 $— $1,673,736 
Cost of energy606,129 92,220 — 698,349 
Utility margin706,671 268,716 — 975,387 
Other operating expenses335,173 89,723 (15,835)409,061 
Depreciation and amortization137,132 72,914 19,057 229,103 
Operating income (loss)234,366 106,079 (3,222)337,223 
Interest income (expense)10,288 1,435 (135)11,588 
Other income (deductions)(81,475)4,303 384 (76,788)
Interest charges(44,562)(28,017)(17,384)(89,963)
Segment earnings (loss) before income taxes
118,617 83,800 (20,357)182,060 
Income taxes (benefit)11,762 11,258 (6,038)16,982 
Segment earnings (loss)
106,855 72,542 (14,319)165,078 
Valencia non-controlling interest
(10,897)— — (10,897)
Subsidiary preferred stock dividends
(396)— — (396)
Segment earnings (loss) attributable to PNMR
$95,562 $72,542 $(14,319)$153,785 
At September 30, 2022:
Total Assets
$6,113,416 $2,673,546 $241,928 $9,028,890 
Goodwill
$51,632 $226,665 $— $278,297 
PNMTNMPCorporate
and Other		PNMR Consolidated
(In thousands)
Three Months Ended September 30, 2021
Electric operating revenues$435,523 $119,028 $— $554,551 
Cost of energy170,902 28,478 — 199,380 
Utility margin264,621 90,550 — 355,171 
Other operating expenses107,385 28,677 (4,058)132,004 
Depreciation and amortization42,673 23,031 5,734 71,438 
Operating income (loss)114,563 38,842 (1,676)151,729 
Interest income (expense)3,364 — (35)3,329 
Other income1,358 1,144 34 2,536 
Interest charges(12,509)(8,403)(2,332)(23,244)
Segment earnings (loss) before income taxes
106,776 31,583 (4,009)134,350 
Income taxes (benefit)15,500 3,642 (2,474)16,668 
Segment earnings (loss)
91,276 27,941 (1,535)117,682 
Valencia non-controlling interest
(4,229)— — (4,229)
Subsidiary preferred stock dividends
(132)— — (132)
Segment earnings (loss) attributable to PNMR
$86,915 $27,941 $(1,535)$113,321 
Nine Months Ended September 30, 2021
Electric operating revenues$1,030,685 $315,113 $— $1,345,798 
Cost of energy383,556 83,896 — 467,452 
Utility margin647,129 231,217 — 878,346 
Other operating expenses320,638 82,950 (6,379)397,209 
Depreciation and amortization127,111 67,696 17,232 212,039 
Operating income (loss)199,380 80,571 (10,853)269,098 
Interest income10,376 — 90 10,466 
Other income (deductions)13,705 3,251 (92)16,864 
Interest charges(38,441)(25,155)(9,651)(73,247)
Segment earnings (loss) before income taxes
185,020 58,667 (20,506)223,181 
Income taxes (benefit)26,178 6,341 (5,986)26,533 
Segment earnings (loss)
158,842 52,326 (14,520)196,648 
Valencia non-controlling interest
(11,643)— — (11,643)
Subsidiary preferred stock dividends
(396)— — (396)
Segment earnings (loss) attributable to PNMR
$146,803 $52,326 $(14,520)$184,609 
At September 30, 2021:
Total Assets
$5,723,176 $2,311,559 $221,335 $8,256,070 
Goodwill
$51,632 $226,665 $— $278,297 

Non-GAAP Financial Measures

The Company defines utility margin as electric operating revenues less cost of energy. Cost of energy consists primarily of fuel and purchase power costs for PNM and costs charged by third-party transmission providers for TNMP. The Company believes that utility margin provides a more meaningful basis for evaluating operations than electric operating revenues since substantially all such costs are offset in revenues as fuel and purchase power costs are passed through to customers under PNM’s FPPAC and third-party transmission costs are passed on to consumers through TNMP’s transmission cost recovery factor. Utility margin is not a financial measure required to be presented and is considered a non-GAAP measure. PNM and TNMP do not intend for utility margin to represent any financial measure as defined by GAAP however, the
calculation of utility margin, as presented, most closely compares to gross margin as defined by GAAP. Reconciliations between utility margin and gross margin are presented below.

PNMTNMPCorporate and OtherPNMR Consolidated
(In thousands)
Three Months Ended September 30, 2022
Gross margin$201,607 $67,614 $— $269,221 
Energy production costs34,469 — — 34,469 
Transmission and distribution costs12,549 8,989 — 21,538 
Depreciation and amortization45,361 24,960 — 70,321 
1
Utility margin$293,986 $101,563 $— $395,549 

Nine Months Ended September 30, 2022
Gross margin$421,327 $172,320 $— $593,647 
Energy production costs110,534 — — 110,534 
Transmission and distribution costs37,678 23,482 — 61,160 
Depreciation and amortization137,132 72,914 — 210,046 
1
Utility margin$706,671 $268,716 $— $975,387 

Three Months Ended September 30, 2021
Gross margin$176,730 $60,367 $— $237,097 
Energy production costs32,374 — — 32,374 
Transmission and distribution costs12,844 7,152 — 19,996 
Depreciation and amortization42,673 23,031 — 65,704 
1
Utility margin$264,621 $90,550 $— $355,171 

Nine Months Ended September 30, 2021
Gross margin$378,403 $142,261 $— $520,664 
Energy production costs106,709 — — 106,709 
Transmission and distribution costs34,906 21,260 — 56,166 
Depreciation and amortization127,111 67,696 — 194,807 
1
Utility margin$647,129 $231,217 $— $878,346 
1 Corporate and Other depreciation and amortization represents corporate level activities that are billed at cost and reflected as general and administrative expenses at PNM and TNMP and therefore are not a component of gross margin or utility margin. See Note 1.