Related Party Transactions

12 Months Ended

Dec. 31, 2013

PNMR, PNM, and TNMP are considered related parties as defined under GAAP. TNMP provides transmission and distribution services to First Choice. On November 1, 2011, PNMR sold First Choice (Note 3). TNMP revenues from First Choice through October 31, 2011 are considered related party revenues and included in the table below. PNMR Services Company provides corporate services to PNMR and its subsidiaries in accordance with shared services agreements. These services are billed at cost on a monthly basis to the business units. Optim Energy was a related party prior to September 23, 2011 (Note 20). PNMR Services Company provided corporate services to Optim Energy under a services agreement. There was also a services agreement for Optim Energy to provide services to PNMR.

PNMR files a consolidated federal income tax return with its affiliated companies. A tax allocation agreement exists between PNMR and each of its affiliated companies. These agreements provide that the subsidiary company will compute its taxable income on a stand-alone basis. If the result is a net tax liability, such amount shall be paid to PNMR. If there are net operating losses and/or tax credits, the subsidiary shall receive payment for the tax savings from PNMR to the extent that PNMR is able to utilize those benefits.

See Note 6 for information on intercompany borrowing arrangements. The table below summarizes the nature and amount of related party transactions of PNMR, PNM and TNMP:



	Year Ended December 31,
	2013		2012		2011
			(In thousands)
Electricity, transmission and distribution related services billings:
TNMP to PNMR	$	—	$	—	$	33,813
Services billings:
PNMR to PNM	92,597		99,986		98,914
PNMR to TNMP	28,937		29,110		29,353
PNM to TNMP	562		595		550
TNMP to PNMR	7		15		164
PNMR to Optim Energy	—		—		4,083
Optim Energy to PNMR	—		—		23
Income tax sharing payments:
PNMR to TNMP	—		1,951		—
PNMR to PNM	77,433		63,114		—
TNMP to PNMR	3,643		—		—
Interest payments:
PNM to PNMR	4		1		54
TNMP to PNMR	481		137		40

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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