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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

TXNM’s income taxes (benefits) consist of the following components:

			Year Ended December 31,
			2024						2023						2022
			(In thousands)
Current federal income tax			$	—					$	—					$	—
Current state income tax (benefit)			(1,984)						(2,841)						1,597
Deferred federal income tax (benefit)			13,042						(11,503)						18,413
Deferred state income tax (benefit)			10,630						(825)						7,302
Amortization of accumulated investment tax credits			(170)						(1,181)						(1,182)
Total income taxes (benefits)			$	21,518					$	(16,350)					$	26,130

PNM’s income taxes (benefits) consist of the following components:

			Year Ended December 31,
			2024						2023						2022
			(In thousands)
Current federal income tax (benefit)			$	(7,005)					$	9,518					$	(13,533)
Current state income tax (benefit)			(5,681)						(4,304)						3,244
Deferred federal income tax (benefit)			28,183						(22,951)						25,298
Deferred state income tax			13,890						1,150						4,361
Amortization of accumulated investment tax credits			(170)						(171)						(172)
Total income taxes (benefits)			$	29,217					$	(16,758)					$	19,198

TNMP’s income taxes consist of the following components:

			Year Ended December 31,
			2024						2023						2022
			(In thousands)
Current federal income tax			$	(2,549)					$	11,354					$	17,055
Current state income tax			3,300						3,055						2,662
Deferred federal income tax (benefit)			26,363						2,917						(4,527)
Deferred state income tax (benefit)			—						(29)						(29)
Total income taxes			$	27,114					$	17,297					$	15,161

Schedule of Effective Income Tax Rate Reconciliation

TXNM’s provision for income taxes (benefits) 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,
			2024						2023						2022
			(In thousands)
Federal income tax at statutory rates			$	58,850					$	19,011					$	44,375
Amortization of accumulated investment tax credits			(170)						(1,181)						(1,182)
Amortization of excess deferred income tax			(23,362)						(22,859)						(23,599)
Flow-through of depreciation items			1,003						1,281						2,795
(Earnings) attributable to non-controlling interest in Valencia			(3,368)						(3,892)						(3,176)
State income tax (benefit), net of federal (benefit)			6,284						(2,239)						6,826
Allowance for equity funds used during construction			(3,756)						(3,145)						(2,898)
Allocation of tax (benefit) related to stock compensation awards			(17)						(261)						91
Non-deductible compensation			1,332						1,659						1,125
Non-deductible merger related costs			—						(1,959)						74
Sale of NMRD			(15,822)						—						—
R&D credit			(1,500)						(2,050)						(1,320)
Other			2,044						(715)						3,019
Total income taxes (benefits)			$	21,518					$	(16,350)					$	26,130

Effective tax rate 7.68  % (18.06) % 12.37  %

PNM’s provision for income taxes (benefits) 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,
			2024						2023						2022
			(In thousands)
Federal income tax at statutory rates			$	49,868					$	7,972					$	29,026
Amortization of accumulated investment tax credits			(170)						(171)						(172)
Amortization of excess deferred income tax			(20,750)						(14,252)						(14,421)
Flow-through of depreciation items			796						1,114						2,641
(Earnings) attributable to non-controlling interest in Valencia			(3,368)						(3,892)						(3,176)
State income tax (benefit), net of federal (benefit)			6,594						(2,216)						5,694
Allowance for equity funds used during construction			(2,739)						(2,065)						(1,958)
Allocation of tax (benefit) related to stock compensation awards			(10)						(185)						65
Non-deductible compensation			822						1,015						701
Non-deductible merger costs			—						(33)						10
R&D credit			(1,450)						(2,000)						(1,300)
Other			(376)						(2,045)						2,088
Total income taxes (benefits)			$	29,217					$	(16,758)					$	19,198

Effective tax rate 12.30  % (44.15) % 13.89  %

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

			Year Ended December 31,
			2024						2023						2022
			(In thousands)
Federal income tax at statutory rates			$	27,435					$	23,569					$	22,560
Amortization of excess deferred income tax			(2,612)						(8,607)						(9,177)
State income tax, net of federal (benefit)			2,606						2,414						2,103
Allocation of tax (benefit) related to stock compensation awards			(4)						(77)						26
Non-deductible compensation			509						642						422
Transaction costs			—						3						1
Other			(820)						(647)						(774)
Total income taxes			$	27,114					$	17,297					$	15,161

Effective tax rate 20.75  % 15.41  % 14.11  %

Schedule of Components of Net Accumulated Deferred Income Tax Liability

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

			December 31,
			2024						2023
			(In thousands)
Deferred tax assets:
Net operating loss			$	31,592					$	16,833
Regulatory liabilities related to income taxes			82,702						90,461
Federal tax credit carryforwards			126,770						124,510
Regulatory disallowances			42,330						42,330
Regulatory liability SJGS retirement credits			40						28,797
Other			52,955						35,492
Total deferred tax assets			336,389						338,423
Deferred tax liabilities:
Depreciation and plant related			(794,203)						(738,078)
Investment tax credit			(81,068)						(95,046)
Regulatory assets related to income taxes			(84,053)						(80,643)
Pension			(41,383)						(41,141)
Regulatory asset for shutdown of SJGS Units 2 and 3			(20,860)						(22,454)
Regulatory asset SJGS energy transition property			(85,365)						(86,521)
Regulatory asset PVNGS investment			(21,044)						(20,503)
PVNGS trusts			(48,421)						(41,767)
Other			(59,384)						(57,550)
Total deferred tax liabilities			(1,235,781)						(1,183,703)
Net accumulated deferred income tax liabilities			$	(899,392)					$	(845,280)

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

			December 31,
			2024						2023
			(In thousands)
Deferred tax assets:
Net operating loss			$	—					$	—
Regulatory liabilities related to income taxes			64,481						71,546
Federal tax credit carryforwards			93,481						80,586
Regulatory disallowance			42,330						42,330
Regulatory liability SJGS retirement credits			40						28,797
Other			35,650						35,993
Total deferred tax assets			235,982						259,252
Deferred tax liabilities:
Depreciation and plant related			(582,089)						(545,815)
Investment tax credit			(81,068)						(73,844)
Regulatory assets related to income taxes			(75,464)						(71,742)
Pension			(36,678)						(36,483)
Regulatory asset for shutdown of SJGS Units 2 and 3			(20,860)						(22,454)
Regulatory asset SJGS energy transition property			(85,365)						(86,521)
Regulatory asset PVNGS investment			(21,044)						(20,503)
PVNGS Trusts			(48,421)						(41,767)
Other			(41,211)						(44,160)
Total deferred tax liabilities			(992,200)						(943,289)
Net accumulated deferred income tax liabilities			$	(756,218)					$	(684,037)

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

			December 31,
			2024						2023
			(In thousands)
Deferred tax assets:
Regulatory liabilities related to income taxes			$	18,221					$	18,915
Other			4,522						5,534
Total deferred tax assets			22,743						24,449
Deferred tax liabilities:
Depreciation and plant related			(200,709)						(179,483)
Regulatory assets related to income taxes			(8,589)						(8,901)
Loss on reacquired debt			(4,981)						(5,254)
Pension			(4,706)						(4,659)
AMS			(2,709)						(2,613)
Other			(9,156)						(2,287)
Total deferred tax liabilities			(230,850)						(203,197)
Net accumulated deferred income tax liabilities			$	(208,107)					$	(178,748)

Schedule of Change in Net Accumulated Deferred Income Tax Liability to the Deferred Income Tax

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

			Year Ended
			December 31, 2024
			(In thousands)
Net change in deferred income tax liability per above table			$	54,112
Change in tax effects of income tax related regulatory assets and liabilities			(11,629)
Amortization of excess deferred income tax			(23,362)
Tax effect of mark-to-market adjustments			4,802
Tax effect of excess pension liability			(421)
Adjustment for uncertain income tax positions			(135)
Reclassification of unrecognized tax benefits			135
Other			—
Deferred income tax (benefit)			$	23,502

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, 2024
			(In thousands)
Net change in deferred income tax liability per above table			$	72,181
Change in tax effects of income tax related regulatory assets and liabilities			(11,246)
Amortization of excess deferred income tax			(20,750)
Tax effect of mark-to-market adjustments			3,554
Tax effect of excess pension liability			(421)
Adjustment for uncertain income tax positions			(161)
Reclassification of unrecognized tax benefits			(1,254)
Deferred income tax (benefit)			$	41,903

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

			Year Ended
			December 31, 2024
			(In thousands)
Net change in deferred income tax liability per above table			$	29,359
Change in tax effects of income tax related regulatory assets and liabilities			(383)
Amortization of excess deferred income tax			(2,612)
Other			(1)
Deferred income tax			$	26,363

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of unrecognized tax benefits is as follows:

			TXNM						PNM						TNMP
			(In thousands)
Balance at December 31, 2021			$	13,714					$	10,771					$	141
Additions based on tax positions related to 2021			1,444						1,437						7
Additions (reductions) for tax positions of prior years			(4)						(7)						3
Balance at December 31, 2022			15,154						12,201						151
Additions based on tax positions related to 2022			(277)						(294)						17
Additions (reductions) for tax positions of prior years			259						239						20
Balance at December 31, 2023			15,136						12,146						188
Additions (reductions) based on tax positions related to 2023			19						2						17
Additions for tax positions of prior years			(154)						(163)						9
Balance at December 31, 2024			$	15,001					$	11,985					$	214

Schedule of Impairments of Tax Attributes After Reflecting the Expiration of Carryforwards Under Applicable Tax Laws, Net of Federal Tax Benefit

Impairments of tax attributes after reflecting the expiration of carryforwards under applicable tax laws, net of federal tax benefit, for 2022 through 2024 are as follows:

			TXNM						PNM						TNMP
			(In thousands)
December 31, 2024:
Federal tax credit carryforwards			$	131					$	—					$	—
Compensation expense			$	(516)					$	(335)					$	(179)
December 31, 2023:
Federal tax credit carryforwards			$	839					$	(427)					$	—
Compensation expense			$	387					$	246					$	140
December 31, 2022:
Federal tax credit carryforwards			$	187					$	427					$	—
Compensation expense			$	199					$	140					$	59

Schedule of Reserve Balances, After Reflecting Expiration of Carryforwards Under Applicable Tax Laws

The reserve balances, after reflecting expiration of carryforwards under applicable tax laws, at December 31, 2024 and 2023 are as follows:

			TXNM						PNM						TNMP
			(In thousands)
December 31, 2024:
Federal tax credit carryforwards			$	2,186					$	—					$	—
Compensation expense			$	596					$	394					$	202
December 31, 2023:
Federal tax credit carryforwards			$	2,055					$	—					$	—
Compensation expense			$	1,112					$	729					$	381

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