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Segment Information
 3 Months Ended
Mar. 31, 2023
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, which includes the asset optimization of PNM's jurisdictional capacity, as well as providing transmission services to third parties. 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 March 31, 2023
Electric operating revenues$430,165 $113,912 $— $544,077 
Cost of energy209,853 31,833 — 241,686 
Utility margin220,312 82,079 — 302,391 
Other operating expenses98,722 32,852 (6,348)125,226 
Depreciation and amortization43,686 27,440 6,948 78,074 
Operating income (loss)77,904 21,787 (600)99,091 
Interest income (expense)4,849 114 (120)4,843 
Other income (deductions)7,033 136 (127)7,042 
Interest charges(18,122)(10,425)(12,376)(40,923)
Segment earnings (loss) before income taxes
71,664 11,612 (13,223)70,053 
Income taxes (benefit)11,829 1,579 (3,628)9,780 
Segment earnings (loss)
59,835 10,033 (9,595)60,273 
Valencia non-controlling interest
(5,127)— — (5,127)
Subsidiary preferred stock dividends
(132)— — (132)
Segment earnings (loss) attributable to PNMR
$54,576 $10,033 $(9,595)$55,014 
At March 31, 2023:
Total Assets
$6,306,396 $2,803,168 $243,572 $9,353,136 
Goodwill
$51,632 $226,665 $— $278,297 

Three Months Ended March 31, 2022
Electric operating revenues$338,709 $105,409 $— $444,118 
Cost of energy138,814 29,600 — 168,414 
Utility margin199,895 75,809 — 275,704 
Other operating expenses109,089 27,925 (5,142)131,872 
Depreciation and amortization45,790 23,642 6,332 75,764 
Operating income (loss)45,016 24,242 (1,190)68,068 
Interest income (expense)3,133 1,182 (23)4,292 
Other income (deductions)(25,216)937 (205)(24,484)
Interest charges(14,572)(9,150)(2,498)(26,220)
Segment earnings (loss) before income taxes
8,361 17,211 (3,916)21,656 
Income taxes (benefit)823 2,151 (536)2,438 
Segment earnings (loss)
7,538 15,060 (3,380)19,218 
Valencia non-controlling interest
(3,095)— — (3,095)
Subsidiary preferred stock dividends
(132)— — (132)
Segment earnings (loss) attributable to PNMR
$4,311 $15,060 $(3,380)$15,991 
At March 31, 2022:
Total Assets
$6,040,088 $2,450,081 $237,517 $8,727,686 
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 March 31, 2023
Gross margin$140,381 $46,330 $— $186,711 
Energy production costs22,358 — — 22,358 
Transmission and distribution costs13,887 8,309 — 22,196 
Depreciation and amortization43,686 27,440 — 71,126 
1
Utility margin$220,312 $82,079 $— $302,391 

Three Months Ended March 31, 2022
Gross margin$108,928 $45,312 $— $154,240 
Energy production costs33,566 — — 33,566 
Transmission and distribution costs11,611 6,855 — 18,466 
Depreciation and amortization45,790 23,642 — 69,432 
1
Utility margin$199,895 $75,809 $— $275,704 

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.