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Lease Commitments | 3 Months Ended
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Mar. 31, 2025
Leases [Abstract] |
Lease Commitments | Lease Commitments The Company leases office buildings, vehicles, energy storage facilities, and other equipment. In addition, certain rights-of-way agreements are classified as leases. All of the Company’s leases with terms in excess of one year are recorded on the balance sheet by recording a present value lease liability and a corresponding right-of-use asset. Operating lease expense is recognized within operating expenses according to the use of the asset on a straight-line basis. Financing lease costs, which are comprised primarily of fleet and office equipment leases commencing after January 1, 2019, are recognized by amortizing the right-of-use asset on a straight-line basis and by recording interest expense on the lease liability. Financing lease right-of-use assets amortization is reflected in depreciation and amortization and interest on financing lease liabilities is reflected as interest charges on the Company’s Condensed Consolidated Statements of Earnings. See additional discussion of the Company’s leasing activities in Note 8 of the Notes to Consolidated Financial Statements in the 2024 Annual Reports on Form 10-K. PVNGS In 1985 and 1986, PNM entered into leases for its interest in PVNGS Unit 1 and 2. The leases initially were scheduled to expire in January 2015 for four Unit 1 leases and January 2016 for four Unit 2 leases. Following procedures set forth in the PVNGS leases, PNM notified four of the lessors under the Unit 1 leases and one lessor under the Unit 2 lease that it would elect to renew those leases on the expiration date of the original leases. The four Unit 1 leases expired in January 2023 and the one Unit 2 lease expired in January 2024. PNM has no further lease payments related to PVNGS Unit 1 or 2. On April 5, 2021, PNM and Salt River Project entered into an Asset Purchase and Sale Agreement, pursuant to which PNM agreed to sell to Salt River Project certain PNM-owned assets and nuclear fuel necessary to the ongoing operation and maintenance of leased capacity in PVNGS Unit 1 and Unit 2. In January 2023, the Unit 1 leases expired, and PNM closed on the associated sale to Salt River Project. In January 2024, the Unit 2 leases expired, and PNM closed on the associated sale to Salt River Project, receiving payments totaling $3.4 million, of which $2.8 million was recorded as a reduction to Net utility plant on the Condensed Consolidated Balance Sheets and was presented as cash flows from investing activities on the Condensed Consolidated Statement of Cash Flows. In addition, $0.6 million was recorded as a reduction to Materials, supplies and fuel stock on the Condensed Consolidated Balance Sheets and was presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows. Land Easements and Rights-of-Way Many of PNM’s electric transmission and distribution facilities are located on lands that require the grant of rights-of-way from governmental entities, Native American tribes, or private parties. PNM has completed several renewals of rights-of-way, the largest of which is a renewal with the Navajo Nation. PNM is obligated to pay the Navajo Nation annual payments of $6.0 million, subject to adjustment each year based on the Consumer Price Index, through 2029. PNM’s April 2025 payment for the amount due under the Navajo Nation right-of-way lease was $8.8 million, which included amounts due under the Consumer Price Index adjustment. Changes in the Consumer Price Index subsequent to January 1, 2019 are considered variable lease payments. PNM has other prepaid rights-of-way agreements that are not accounted for as leases or recognized as a component of plant in service. PNM reflects the unamortized balance of these prepayments in other deferred charges on the Condensed Consolidated Balance Sheets and recognizes amortization expense associated with these agreements in the Condensed Consolidated Statement of Earnings over their term. As of March 31, 2025 and December 31, 2024, the unamortized balance of these rights-of-ways was $70.8 million and $67.1 million. PNM recognized amortization expense associated with these agreements of $1.1 million and $1.1 million in the three months ended March 31, 2025 and 2024. Fleet Vehicles and Equipment Fleet vehicle and equipment leases commencing on or after January 1, 2019 are classified as financing leases. Fleet vehicle and equipment leases existing as of December 31, 2018 are classified as operating leases. The Company’s fleet vehicle and equipment lease agreements include non-lease components for insignificant administrative and other costs that are billed over the life of the agreement. At March 31, 2025, residual value guarantees on fleet vehicle and equipment leases are $0.7 million, $0.8 million, and $1.5 million for PNM, TNMP, and TXNM Consolidated. Energy Storage Agreements The Company has ESAs with fixed payments over the life of the agreements, that are accounted for as operating leases, for which Company records the initial lease liabilities and corresponding right-of-use assets. The Company also has ESAs with monthly payments that vary, depending on the available capacity of the energy storage facility, that are also accounted for as operating leases, However due to the variable nature of the consideration, these agreements do not require a lease liability or a right-of-use asset to be recorded upon inception. Expenses for this type of lease are reflected in variable lease expense in the tables below. In addition, the Company has elected to separate lease components from non-lease components for ESAs and accordingly, does not include non-lease components in the measurement of the lease liability or right-of-use asset. The non-lease components, which are not included in the measurement of the lease liability or the corresponding right-of-use asset, comprise 25.5% of the value of the agreements. Information related to the Company’s operating leases recorded on the Condensed Consolidated Balance Sheets is presented below:
| March 31, 2025 |  | December 31, 2024
| PNM |  | TNMP |  | TXNM |  | PNM |  | TNMP |  | TXNM
| (In thousands)
Operating leases: |  |  |  |  |  |  |  |  |  |  |
Operating lease assets, net of amortization | $ | 268,291 |  |  | $ | 581 |  |  | $ | 269,399 |  |  | $ | 271,433 |  |  | $ | 923 |  |  | $ | 272,894 |
Current portion of operating lease liabilities | 13,958 |  |  | 527 |  |  | 14,523 |  |  | 13,542 |  |  | 713 |  |  | 14,293 |
Long-term portion of operating lease liabilities | 252,963 |  |  | 34 |  |  | 253,493 |  |  | 254,702 |  |  | 167 |  |  | 255,376 |
As discussed above, the Company classifies its fleet vehicle and equipment leases and its office equipment leases commencing on or after January 1, 2019 as financing leases. Information related to the Company’s financing leases recorded on the Condensed Consolidated Balance Sheets is presented below:
| March 31, 2025 |  | December 31, 2024
| PNM |  | TNMP |  | TXNM |  | PNM |  | TNMP |  | TXNM
| (In thousands)
Financing leases: |  |  |  |  |  |  |  |  |  |  |
Non-utility property | $ | 24,877 |  |  | $ | 23,938 |  |  | $ | 50,153 |  |  | $ | 24,548 |  |  | $ | 24,420 |  |  | $ | 50,144 |
Accumulated depreciation | (11,165) |  |  | (13,331) |  |  | (24,762) |  |  | (10,997) |  |  | (13,411) |  |  | (24,604) |
Non-utility property, net | 13,712 |  |  | 10,607 |  |  | 25,391 |  |  | 13,551 |  |  | 11,009 |  |  | 25,540 |
Other current liabilities | $ | 4,487 |  |  | $ | 4,498 |  |  | $ | 9,307 |  |  | $ | 4,311 |  |  | $ | 4,527 |  |  | $ | 9,126 |
Other deferred credits | 9,249 |  |  | 6,132 |  |  | 16,153 |  |  | 9,262 |  |  | 6,504 |  |  | 16,470 |
Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities is presented below:
| March 31, 2025 |  | December 31, 2024
| PNM |  | TNMP |  | TXNM |  | PNM |  | TNMP |  | TXNM
Weighted average remaining lease term (years): |  |  |  |  |  |  |  |  |  |  |
Operating leases | 17.25 |  | 0.75 |  | 17.20 |  | 17.52 |  | 1.10 |  | 17.45
Financing leases | 3.39 |  | 2.72 |  | 3.11 |  | 3.51 |  | 2.80 |  | 3.20
Weighted average discount rate: |  |  |  |  |  |  |  |  |  |  |
Operating leases | 5.68 | % |  | 4.43 | % |  | 5.23 | % |  | 5.68 | % |  | 4.41 | % |  | 5.68 | %
Financing leases | 5.19 | % |  | 5.31 | % |  | 5.68 | % |  | 5.08 | % |  | 5.19 | % |  | 5.12 | %
Information for the components of lease expense is as follows:
|  |  | Three Months Ended March 31, 2025
|  |  |  |  |  |  | PNM |  | TNMP |  | TXNM
|  |  |  |  |  |  | (In thousands)
Operating lease cost: |  |  |  |  |  |  |  |  |  |  |
Energy storage leases |  |  |  |  |  |  | $ | 5,083 |  |  | $ | — |  |  | $ | 5,083 |
Other operating leases |  |  |  |  |  |  | 1,863 |  |  | 154 |  |  | 2,036 |
Amounts capitalized |  |  |  |  |  |  | (11) |  |  | (130) |  |  | (141) |
Total operating lease expense |  |  |  |  |  |  | 6,935 |  |  | 24 |  |  | 6,978 |
Financing lease cost: |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  |  |  |  |  |  | 1,201 |  |  | 1,294 |  |  | 2,588 |
Interest on lease liabilities |  |  |  |  |  |  | 180 |  |  | 144 |  |  | 339 |
Amounts capitalized |  |  |  |  |  |  | (880) |  |  | (1,195) |  |  | (2,074) |
Total financing lease expense |  |  |  |  |  |  | 501 |  |  | 243 |  |  | 853 |
Variable lease expense |  |  |  |  |  |  | 6,556 |  |  | — |  |  | 6,556 |
Short-term lease expense |  |  |  |  |  |  | 191 |  |  | 4 |  |  | 225 |
Total lease expense for the period |  |  |  |  |  |  | $ | 14,183 |  |  | $ | 271 |  |  | $ | 14,612 |
|  |  | Three Months Ended March 31, 2024
|  |  |  |  |  |  | PNM |  | TNMP |  | TXNM
|  |  |  |  |  |  | (In thousands)
Operating lease cost: |  |  |  |  |  |  |  |  |  |  |
Energy storage leases |  |  |  |  |  |  | $ | 2,947 |  |  | $ | — |  |  | $ | 2,947 |
Other operating leases |  |  |  |  |  |  | 2,059 |  |  | 270 |  |  | 2,329 |
Amounts capitalized |  |  |  |  |  |  | (35) |  |  | (232) |  |  | (267) |
Total operating lease expense |  |  |  |  |  |  | 4,971 |  |  | 38 |  |  | 5,009 |
Financing lease cost: |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  |  |  |  |  |  | 1,218 |  |  | 1,316 |  |  | 2,542 |
Interest on lease liabilities |  |  |  |  |  |  | 144 |  |  | 152 |  |  | 297 |
Amounts capitalized |  |  |  |  |  |  | (841) |  |  | (1,182) |  |  | (2,023) |
Total financing lease expense |  |  |  |  |  |  | 521 |  |  | 286 |  |  | 816 |
Variable lease expense |  |  |  |  |  |  | 360 |  |  | — |  |  | 360 |
Short-term lease expense |  |  |  |  |  |  | 204 |  |  | 6 |  |  | 216 |
Total lease expense for the period |  |  |  |  |  |  | $ | 6,056 |  |  | $ | 330 |  |  | $ | 6,401 |
Supplemental cash flow information related to the Company’s leases is as follows:
| Three Months Ended |  | Three Months Ended
| March 31, 2025 |  | March 31, 2024
| PNM |  | TNMP |  | TXNM |  | PNM |  | TNMP |  | TXNM
| (In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases | $ | 5,116 |  |  | $ | 13 |  |  | $ | 5,145 |  |  | $ | 3,826 |  |  | $ | 14 |  |  | $ | 3,840 |
Operating cash flows from financing leases | 62 |  |  | 25 |  |  | 102 |  |  | 44 |  |  | 29 |  |  | 74 |
Finance cash flows from financing leases | 436 |  |  | 217 |  |  | 741 |  |  | 464 |  |  | 256 |  |  | 728 |
Non-cash information related to right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |  |  |  |
Operating leases | $ | 49 |  |  | $ | 4 |  |  | $ | 52 |  |  | $ | 27 |  |  | $ | 63 |  |  | $ | 90 |
Financing leases | 1,368 |  |  | 891 |  |  | 2,449 |  |  | 263 |  |  | 1,040 |  |  | 1,398 |
Capitalized lease costs are reflected as investing activities on the Company’s Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024. Future expected lease payments are shown below:
| As of March 31, 2025
| PNM |  | TNMP |  | TXNM
|  |  | Operating |  |  |  |  |  |  |  | Operating
| Financing |  | Energy Storage |  | Other |  | Financing |  | Operating |  | Financing |  | Energy Storage |  | Other
| (In thousands)
Remainder of 2025 | $ | 3,879 |  |  | $ | 15,250 |  |  | $ | 7,060 |  |  | $ | 3,854 |  |  | $ | 547 |  |  | $ | 8,009 |  |  | $ | 15,250 |  |  | $ | 7,657 |
2026 | 4,672 |  |  | 20,333 |  |  | 7,045 |  |  | 3,867 |  |  | 14 |  |  | 8,905 |  |  | 20,333 |  |  | 7,128 |
2027 | 3,372 |  |  | 20,333 |  |  | 7,049 |  |  | 2,395 |  |  | 14 |  |  | 6,111 |  |  | 20,333 |  |  | 7,134 |
2028 | 1,969 |  |  | 20,333 |  |  | 7,052 |  |  | 982 |  |  | 11 |  |  | 3,114 |  |  | 20,333 |  |  | 7,135 |
2029 | 672 |  |  | 20,333 |  |  | 7,039 |  |  | 318 |  |  | — |  |  | 1,024 |  |  | 20,333 |  |  | 7,114 |
Later years | 230 |  |  | 287,100 |  |  | 3,660 |  |  | 4 |  |  | — |  |  | 234 |  |  | 287,100 |  |  | 4,012 |
Total minimum lease payments | 14,794 |  |  | 383,682 |  |  | 38,905 |  |  | 11,420 |  |  | 586 |  |  | 27,397 |  |  | 383,682 |  |  | 40,180 |
Less: Imputed interest | 1,058 |  |  | 151,525 |  |  | 4,141 |  |  | 790 |  |  | 25 |  |  | 1,937 |  |  | 151,525 |  |  | 4,321 |
Lease liabilities | $ | 13,736 |  |  | $ | 232,157 |  |  | $ | 34,764 |  |  | $ | 10,630 |  |  | $ | 561 |  |  | $ | 25,460 |  |  | $ | 232,157 |  |  | $ | 35,859 |
The above table includes $13.2 million, $10.2 million, and $23.6 million for PNM, TNMP, and TXNM at March 31, 2025 for expected future payments on fleet vehicle and equipment leases that could be avoided if the leased assets were returned and the lessor is able to recover estimated market value for the equipment from third parties. At March 31, 2025, the Company has various lease arrangements that have been executed but have not yet commenced, which are primarily related to ESAs. The Company currently expects lease commencement dates in 2025 and 2029, with lease terms expiring in 2045 and 2044, and will recognize lease assets and liabilities upon lease commencement. The expected total fixed consideration to be paid for these arrangements, which includes non-lease payments, is approximately $226.3 million over the 20-year terms of the agreements.
Lease Commitments | Lease Commitments The Company leases office buildings, vehicles, energy storage facilities, and other equipment. In addition, certain rights-of-way agreements are classified as leases. All of the Company’s leases with terms in excess of one year are recorded on the balance sheet by recording a present value lease liability and a corresponding right-of-use asset. Operating lease expense is recognized within operating expenses according to the use of the asset on a straight-line basis. Financing lease costs, which are comprised primarily of fleet and office equipment leases commencing after January 1, 2019, are recognized by amortizing the right-of-use asset on a straight-line basis and by recording interest expense on the lease liability. Financing lease right-of-use assets amortization is reflected in depreciation and amortization and interest on financing lease liabilities is reflected as interest charges on the Company’s Condensed Consolidated Statements of Earnings. See additional discussion of the Company’s leasing activities in Note 8 of the Notes to Consolidated Financial Statements in the 2024 Annual Reports on Form 10-K. PVNGS In 1985 and 1986, PNM entered into leases for its interest in PVNGS Unit 1 and 2. The leases initially were scheduled to expire in January 2015 for four Unit 1 leases and January 2016 for four Unit 2 leases. Following procedures set forth in the PVNGS leases, PNM notified four of the lessors under the Unit 1 leases and one lessor under the Unit 2 lease that it would elect to renew those leases on the expiration date of the original leases. The four Unit 1 leases expired in January 2023 and the one Unit 2 lease expired in January 2024. PNM has no further lease payments related to PVNGS Unit 1 or 2. On April 5, 2021, PNM and Salt River Project entered into an Asset Purchase and Sale Agreement, pursuant to which PNM agreed to sell to Salt River Project certain PNM-owned assets and nuclear fuel necessary to the ongoing operation and maintenance of leased capacity in PVNGS Unit 1 and Unit 2. In January 2023, the Unit 1 leases expired, and PNM closed on the associated sale to Salt River Project. In January 2024, the Unit 2 leases expired, and PNM closed on the associated sale to Salt River Project, receiving payments totaling $3.4 million, of which $2.8 million was recorded as a reduction to Net utility plant on the Condensed Consolidated Balance Sheets and was presented as cash flows from investing activities on the Condensed Consolidated Statement of Cash Flows. In addition, $0.6 million was recorded as a reduction to Materials, supplies and fuel stock on the Condensed Consolidated Balance Sheets and was presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows. Land Easements and Rights-of-Way Many of PNM’s electric transmission and distribution facilities are located on lands that require the grant of rights-of-way from governmental entities, Native American tribes, or private parties. PNM has completed several renewals of rights-of-way, the largest of which is a renewal with the Navajo Nation. PNM is obligated to pay the Navajo Nation annual payments of $6.0 million, subject to adjustment each year based on the Consumer Price Index, through 2029. PNM’s April 2025 payment for the amount due under the Navajo Nation right-of-way lease was $8.8 million, which included amounts due under the Consumer Price Index adjustment. Changes in the Consumer Price Index subsequent to January 1, 2019 are considered variable lease payments. PNM has other prepaid rights-of-way agreements that are not accounted for as leases or recognized as a component of plant in service. PNM reflects the unamortized balance of these prepayments in other deferred charges on the Condensed Consolidated Balance Sheets and recognizes amortization expense associated with these agreements in the Condensed Consolidated Statement of Earnings over their term. As of March 31, 2025 and December 31, 2024, the unamortized balance of these rights-of-ways was $70.8 million and $67.1 million. PNM recognized amortization expense associated with these agreements of $1.1 million and $1.1 million in the three months ended March 31, 2025 and 2024. Fleet Vehicles and Equipment Fleet vehicle and equipment leases commencing on or after January 1, 2019 are classified as financing leases. Fleet vehicle and equipment leases existing as of December 31, 2018 are classified as operating leases. The Company’s fleet vehicle and equipment lease agreements include non-lease components for insignificant administrative and other costs that are billed over the life of the agreement. At March 31, 2025, residual value guarantees on fleet vehicle and equipment leases are $0.7 million, $0.8 million, and $1.5 million for PNM, TNMP, and TXNM Consolidated. Energy Storage Agreements The Company has ESAs with fixed payments over the life of the agreements, that are accounted for as operating leases, for which Company records the initial lease liabilities and corresponding right-of-use assets. The Company also has ESAs with monthly payments that vary, depending on the available capacity of the energy storage facility, that are also accounted for as operating leases, However due to the variable nature of the consideration, these agreements do not require a lease liability or a right-of-use asset to be recorded upon inception. Expenses for this type of lease are reflected in variable lease expense in the tables below. In addition, the Company has elected to separate lease components from non-lease components for ESAs and accordingly, does not include non-lease components in the measurement of the lease liability or right-of-use asset. The non-lease components, which are not included in the measurement of the lease liability or the corresponding right-of-use asset, comprise 25.5% of the value of the agreements. Information related to the Company’s operating leases recorded on the Condensed Consolidated Balance Sheets is presented below:
| March 31, 2025 |  | December 31, 2024
| PNM |  | TNMP |  | TXNM |  | PNM |  | TNMP |  | TXNM
| (In thousands)
Operating leases: |  |  |  |  |  |  |  |  |  |  |
Operating lease assets, net of amortization | $ | 268,291 |  |  | $ | 581 |  |  | $ | 269,399 |  |  | $ | 271,433 |  |  | $ | 923 |  |  | $ | 272,894 |
Current portion of operating lease liabilities | 13,958 |  |  | 527 |  |  | 14,523 |  |  | 13,542 |  |  | 713 |  |  | 14,293 |
Long-term portion of operating lease liabilities | 252,963 |  |  | 34 |  |  | 253,493 |  |  | 254,702 |  |  | 167 |  |  | 255,376 |
As discussed above, the Company classifies its fleet vehicle and equipment leases and its office equipment leases commencing on or after January 1, 2019 as financing leases. Information related to the Company’s financing leases recorded on the Condensed Consolidated Balance Sheets is presented below:
| March 31, 2025 |  | December 31, 2024
| PNM |  | TNMP |  | TXNM |  | PNM |  | TNMP |  | TXNM
| (In thousands)
Financing leases: |  |  |  |  |  |  |  |  |  |  |
Non-utility property | $ | 24,877 |  |  | $ | 23,938 |  |  | $ | 50,153 |  |  | $ | 24,548 |  |  | $ | 24,420 |  |  | $ | 50,144 |
Accumulated depreciation | (11,165) |  |  | (13,331) |  |  | (24,762) |  |  | (10,997) |  |  | (13,411) |  |  | (24,604) |
Non-utility property, net | 13,712 |  |  | 10,607 |  |  | 25,391 |  |  | 13,551 |  |  | 11,009 |  |  | 25,540 |
Other current liabilities | $ | 4,487 |  |  | $ | 4,498 |  |  | $ | 9,307 |  |  | $ | 4,311 |  |  | $ | 4,527 |  |  | $ | 9,126 |
Other deferred credits | 9,249 |  |  | 6,132 |  |  | 16,153 |  |  | 9,262 |  |  | 6,504 |  |  | 16,470 |
Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities is presented below:
| March 31, 2025 |  | December 31, 2024
| PNM |  | TNMP |  | TXNM |  | PNM |  | TNMP |  | TXNM
Weighted average remaining lease term (years): |  |  |  |  |  |  |  |  |  |  |
Operating leases | 17.25 |  | 0.75 |  | 17.20 |  | 17.52 |  | 1.10 |  | 17.45
Financing leases | 3.39 |  | 2.72 |  | 3.11 |  | 3.51 |  | 2.80 |  | 3.20
Weighted average discount rate: |  |  |  |  |  |  |  |  |  |  |
Operating leases | 5.68 | % |  | 4.43 | % |  | 5.23 | % |  | 5.68 | % |  | 4.41 | % |  | 5.68 | %
Financing leases | 5.19 | % |  | 5.31 | % |  | 5.68 | % |  | 5.08 | % |  | 5.19 | % |  | 5.12 | %
Information for the components of lease expense is as follows:
|  |  | Three Months Ended March 31, 2025
|  |  |  |  |  |  | PNM |  | TNMP |  | TXNM
|  |  |  |  |  |  | (In thousands)
Operating lease cost: |  |  |  |  |  |  |  |  |  |  |
Energy storage leases |  |  |  |  |  |  | $ | 5,083 |  |  | $ | — |  |  | $ | 5,083 |
Other operating leases |  |  |  |  |  |  | 1,863 |  |  | 154 |  |  | 2,036 |
Amounts capitalized |  |  |  |  |  |  | (11) |  |  | (130) |  |  | (141) |
Total operating lease expense |  |  |  |  |  |  | 6,935 |  |  | 24 |  |  | 6,978 |
Financing lease cost: |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  |  |  |  |  |  | 1,201 |  |  | 1,294 |  |  | 2,588 |
Interest on lease liabilities |  |  |  |  |  |  | 180 |  |  | 144 |  |  | 339 |
Amounts capitalized |  |  |  |  |  |  | (880) |  |  | (1,195) |  |  | (2,074) |
Total financing lease expense |  |  |  |  |  |  | 501 |  |  | 243 |  |  | 853 |
Variable lease expense |  |  |  |  |  |  | 6,556 |  |  | — |  |  | 6,556 |
Short-term lease expense |  |  |  |  |  |  | 191 |  |  | 4 |  |  | 225 |
Total lease expense for the period |  |  |  |  |  |  | $ | 14,183 |  |  | $ | 271 |  |  | $ | 14,612 |
|  |  | Three Months Ended March 31, 2024
|  |  |  |  |  |  | PNM |  | TNMP |  | TXNM
|  |  |  |  |  |  | (In thousands)
Operating lease cost: |  |  |  |  |  |  |  |  |  |  |
Energy storage leases |  |  |  |  |  |  | $ | 2,947 |  |  | $ | — |  |  | $ | 2,947 |
Other operating leases |  |  |  |  |  |  | 2,059 |  |  | 270 |  |  | 2,329 |
Amounts capitalized |  |  |  |  |  |  | (35) |  |  | (232) |  |  | (267) |
Total operating lease expense |  |  |  |  |  |  | 4,971 |  |  | 38 |  |  | 5,009 |
Financing lease cost: |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  |  |  |  |  |  | 1,218 |  |  | 1,316 |  |  | 2,542 |
Interest on lease liabilities |  |  |  |  |  |  | 144 |  |  | 152 |  |  | 297 |
Amounts capitalized |  |  |  |  |  |  | (841) |  |  | (1,182) |  |  | (2,023) |
Total financing lease expense |  |  |  |  |  |  | 521 |  |  | 286 |  |  | 816 |
Variable lease expense |  |  |  |  |  |  | 360 |  |  | — |  |  | 360 |
Short-term lease expense |  |  |  |  |  |  | 204 |  |  | 6 |  |  | 216 |
Total lease expense for the period |  |  |  |  |  |  | $ | 6,056 |  |  | $ | 330 |  |  | $ | 6,401 |
Supplemental cash flow information related to the Company’s leases is as follows:
| Three Months Ended |  | Three Months Ended
| March 31, 2025 |  | March 31, 2024
| PNM |  | TNMP |  | TXNM |  | PNM |  | TNMP |  | TXNM
| (In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases | $ | 5,116 |  |  | $ | 13 |  |  | $ | 5,145 |  |  | $ | 3,826 |  |  | $ | 14 |  |  | $ | 3,840 |
Operating cash flows from financing leases | 62 |  |  | 25 |  |  | 102 |  |  | 44 |  |  | 29 |  |  | 74 |
Finance cash flows from financing leases | 436 |  |  | 217 |  |  | 741 |  |  | 464 |  |  | 256 |  |  | 728 |
Non-cash information related to right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |  |  |  |
Operating leases | $ | 49 |  |  | $ | 4 |  |  | $ | 52 |  |  | $ | 27 |  |  | $ | 63 |  |  | $ | 90 |
Financing leases | 1,368 |  |  | 891 |  |  | 2,449 |  |  | 263 |  |  | 1,040 |  |  | 1,398 |
Capitalized lease costs are reflected as investing activities on the Company’s Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024. Future expected lease payments are shown below:
| As of March 31, 2025
| PNM |  | TNMP |  | TXNM
|  |  | Operating |  |  |  |  |  |  |  | Operating
| Financing |  | Energy Storage |  | Other |  | Financing |  | Operating |  | Financing |  | Energy Storage |  | Other
| (In thousands)
Remainder of 2025 | $ | 3,879 |  |  | $ | 15,250 |  |  | $ | 7,060 |  |  | $ | 3,854 |  |  | $ | 547 |  |  | $ | 8,009 |  |  | $ | 15,250 |  |  | $ | 7,657 |
2026 | 4,672 |  |  | 20,333 |  |  | 7,045 |  |  | 3,867 |  |  | 14 |  |  | 8,905 |  |  | 20,333 |  |  | 7,128 |
2027 | 3,372 |  |  | 20,333 |  |  | 7,049 |  |  | 2,395 |  |  | 14 |  |  | 6,111 |  |  | 20,333 |  |  | 7,134 |
2028 | 1,969 |  |  | 20,333 |  |  | 7,052 |  |  | 982 |  |  | 11 |  |  | 3,114 |  |  | 20,333 |  |  | 7,135 |
2029 | 672 |  |  | 20,333 |  |  | 7,039 |  |  | 318 |  |  | — |  |  | 1,024 |  |  | 20,333 |  |  | 7,114 |
Later years | 230 |  |  | 287,100 |  |  | 3,660 |  |  | 4 |  |  | — |  |  | 234 |  |  | 287,100 |  |  | 4,012 |
Total minimum lease payments | 14,794 |  |  | 383,682 |  |  | 38,905 |  |  | 11,420 |  |  | 586 |  |  | 27,397 |  |  | 383,682 |  |  | 40,180 |
Less: Imputed interest | 1,058 |  |  | 151,525 |  |  | 4,141 |  |  | 790 |  |  | 25 |  |  | 1,937 |  |  | 151,525 |  |  | 4,321 |
Lease liabilities | $ | 13,736 |  |  | $ | 232,157 |  |  | $ | 34,764 |  |  | $ | 10,630 |  |  | $ | 561 |  |  | $ | 25,460 |  |  | $ | 232,157 |  |  | $ | 35,859 |
The above table includes $13.2 million, $10.2 million, and $23.6 million for PNM, TNMP, and TXNM at March 31, 2025 for expected future payments on fleet vehicle and equipment leases that could be avoided if the leased assets were returned and the lessor is able to recover estimated market value for the equipment from third parties. At March 31, 2025, the Company has various lease arrangements that have been executed but have not yet commenced, which are primarily related to ESAs. The Company currently expects lease commencement dates in 2025 and 2029, with lease terms expiring in 2045 and 2044, and will recognize lease assets and liabilities upon lease commencement. The expected total fixed consideration to be paid for these arrangements, which includes non-lease payments, is approximately $226.3 million over the 20-year terms of the agreements.

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