Equity Method Investment

9 Months Ended

Sep. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

As discussed in Note 21 of the Company's 2021 Annual Reports on Form 10-K, PNMR Development and AEP OnSite Partners created NMRD in September 2017 to pursue the acquisition, development, and ownership of renewable energy generation projects, primarily in the state of New Mexico. As of September 30, 2022, NMRD’s renewable energy capacity in operation was 135.1 MW. PNMR Development and AEP OnSite Partners each have a 50% ownership interest in NMRD. The investment in NMRD is accounted for using the equity method of accounting because PNMR’s ownership interest results in significant influence, but not control, over NMRD and its operations.

In the nine months ended September 30, 2022 and 2021, neither PNMR Development nor AEP OnSite Partners made any cash contributions to NMRD for its construction activities. In February 2021, NMRD paid both PNMR Development and AEP OnSite Partners a dividend of $3.0 million. As PNMR Development's cumulative equity in earnings of NMRD as of March 31, 2021 was $2.4 million, an equivalent amount was presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2021 and the remaining portion of the dividend, in excess of PNMR Development's cumulative equity in earnings of NMRD, of $0.6 million was presented as cash flows from investing activities.

PNMR presents its share of net earnings from NMRD in other income on the Condensed Consolidated Statements of Earnings. Summarized financial information for NMRD is as follows:


	Results of Operations
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands)
Operating revenues	$	3,407	$	3,543	$	10,224	$	10,179
Operating expenses	2,381		2,422		7,172		7,360
Net earnings	$	1,026	$	1,121	$	3,052	$	2,819


	Financial Position
	September 30,		December 31,
	2022		2021
	(In thousands)
Current assets	$	6,750	$	10,729
Net property, plant, and equipment	166,229		166,495
Non-current assets	9,749		2,289
Total assets	182,728		179,513
Current liabilities	1,017		824
Non-current liabilities	363		373
Owners’ equity	$	181,348	$	178,316