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Financing | 12 Months Ended
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Dec. 31, 2011
Debt Disclosure [Abstract] |
Financing | Financing Financing Activities PNMR In January 2009, PNMR commenced a tender offer to repurchase a portion of its 9.25% senior unsecured notes due 2015. In February 2009, PNMR repurchased and retired $157.4 million of these notes for $146.4 million plus accrued interest. PNMR recognized a pre-tax gain of $7.3 million, net of related transaction costs and write-off of the proportionate amount of the deferred costs of the original issuance of the notes, which is included in other income on the Consolidated Statements of Earnings (Loss). On September 23, 2011, PNMR entered into an agreement to purchase all of its outstanding convertible preferred stock, Series A from Cascade. Cascade owned all of the 477,800 outstanding shares of the preferred stock, which were convertible into 4,778,000 shares of PNMR common stock. Upon signing, the agreement obligated PNMR to purchase the preferred stock at a 2% discount from the arithmetic mean of the daily volume weighted average price per share of PNMR's common stock on each trading day in the period beginning September 19, 2011 and ending on September 30, 2011 times the number of shares of PNMR common stock into which the preferred stock was convertible. The purchase of the preferred stock closed on October 5, 2011 with PNMR paying Cascade an aggregate purchase price of $73.5 million. The difference between the purchase price and the $100.0 million carrying value of the preferred stock is reflected as an addition to common stock in the Consolidated Financial Statements. PNMR utilized a borrowing under its revolving credit facility to fund the purchase of the preferred stock. Such borrowing was repaid on November 1, 2011 with a portion of the proceeds from the sale of First Choice. See Note 2. On October 24, 2011, PNMR commenced a cash tender offer to purchase up to $50.0 million aggregate principal amount of its outstanding 9.25% Senior Unsecured Notes, Series A, due 2015. PNMR offered to pay a premium of up to 17%, depending on when the notes were tendered. The tender offer expired on November 21, 2011 and was oversubscribed. On November 22, 2011, PNMR purchased $50.0 million of the notes for $58.5 million, plus accrued and unpaid interest. PNMR recognized a loss of $9.2 million on the purchase, including transaction costs and write-off of the proportionate amount of the deferred costs of the original issuance of the notes, which is included in other deductions on the Consolidated Statements of Earnings (Loss). PNMR used a portion of the proceeds from the sale of First Choice to fund the purchase. On November 4, 2011, PNMR entered into an agreement to purchase up to 7,019,550 shares of common stock from Cascade. Upon signing, the agreement obligated PNMR to purchase the common stock at a 2% discount from the arithmetic mean of the volume weighted average price on each trading day in the period beginning October 27, 2011 and ending November 9, 2011. The purchase of the common stock closed on November 10, 2011 with PNMR purchasing all 7,019,550 shares of common stock owned by Cascade for an aggregate purchase price of $125.7 million. The shares of common stock repurchased have become authorized but unissued shares, as determined by the Board. PNMR used a portion of the proceeds from the sale of First Choice to fund the purchase. PNMR offers new shares of PNMR common stock through the PNMR Direct Plan. On July 15, 2009, PNMR began utilizing shares of its common stock purchased on the open market, by an independent agent, rather than issuing additional shares to satisfy subscriptions under the PNMR Direct Plan. PNMR had offered new shares of its common stock through an equity distribution agreement, which was terminated in July 2009. In 2009, PNMR issued 93,328 shares under these plans, as well as 48,202 shares under the ESPP. See Note 13. The shares of PNMR common stock through the PNMR Direct Plan are offered under a SEC shelf registration statement that expires in August 2012. For offerings of equity and debt securities registered with the SEC, PNMR has a shelf registration statement expiring in March 2014. This shelf registration statement has unlimited availability and can be amended to include additional securities, subject to certain restrictions and limitations. PNM In 2003, PNM issued $36.0 million of 4.00% PCRBs, which had a scheduled maturity in 2038, but were subject to mandatory repurchase and remarketing on July 1, 2009. PNM repurchased these PCRBs for $36.0 million on July 1, 2009 utilizing available cash balances and borrowings under the PNM Facility. PNM held these PCRBs (without legally canceling them) until December 1, 2009, on which date they were remarketed. The remarketed PCRBs bear interest at 6.25% and mature on January 1, 2038. On June 9, 2010, the City of Farmington, New Mexico and the Maricopa County, Arizona Pollution Control Corporation sold $403.8 million of new PCRBs to refund $403.8 million of callable PCRBs previously issued by the City of Farmington, New Mexico and the Maricopa County, Arizona Pollution Control Corporation. The proceeds from the prior bonds were used to finance a portion of the cost of certain pollution control systems, facilities, and related improvements at SJGS and PVNGS. The new PCRBs are collateralized by PNM senior unsecured notes, similar to PNM's other PCRBs. On October 6, 2011, PNM priced a public offering of $160.0 million aggregate principal amount of its 5.35% Senior Unsecured Notes due 2021. The bonds were offered at 99.857% of face amount and the offering closed on October 12, 2011. Proceeds from the offering were used to repay outstanding borrowings under the PNM Facility. The offering was part of a NMPRC authorization for PNM to issue up to $250.0 million of senior unsecured notes. The authorization remains in effect through March 31, 2012. PNM has not entered into any agreements and has no arrangements or commitments concerning issuing additional senior unsecured notes. PNM has a shelf registration statement for the issuance of up to $440.0 million of senior unsecured notes that will expire in May 2014. TNMP At January 1, 2009, TNMP had a revolving credit agreement, which had a stated maturity of May 13, 2009. This facility provided TNMP with a revolving credit facility for up to $200.0 million. In January 2009, TNMP borrowed $100.0 million under a bridge financing arrangement and used the proceeds and inter-company borrowings from PNMR to repay the entire principal and interest due on $167.7 million principal amount outstanding of 6.25% senior unsecured notes. On March 23, 2009, TNMP issued $265.5 million aggregate principal amount of 9.50% First Mortgage Bonds, due 2019, Series 2009A (the “Series 2009A Bonds”) at a price equal to 97.643% of their face value. The bonds bear interest at the rate of 9.5% per annum of their face value. TNMP may redeem some or all of the bonds at any time at a redemption price that reflects a make-whole provision, plus accrued interest. The Series 2009A Bonds are secured by a first mortgage on substantially all of TNMP's property. On March 25, 2009, TNMP entered into a $50.0 million loan agreement (the “2009 Term Loan Agreement”). TNMP borrowed $50.0 million under this agreement on March 30, 2009. Borrowings under the 2009 Term Loan Agreement were due March 25, 2014 and were secured by $50.0 million aggregate principal amount of TNMP first mortgage bonds (the “Series 2009B Bonds”). Through hedging arrangements, TNMP established fixed interest rates for the 2009 Term Loan Agreement of 6.05% for the first three years and 6.30% thereafter. In January 2010, the hedging relationship was modified to reduce the fixed interest rate to 4.80% through March 25, 2012 and to 5.05% thereafter. The hedging obligations were also secured by the Series 2009B Bonds. The hedge was accounted for as a cash-flow hedge and its December 31, 2010 pre-tax fair value of $1.9 million is included in other current liabilities, except for $0.8 million included in other deferred credits, and in AOCI on the Consolidated Balance Sheets. Amounts reclassified from AOCI are included in interest charges. The fair value determination was made using Level 2 inputs under GAAP and were determined using forward LIBOR curves under the mid-market convention to discount cash flows over the remaining term of the swap agreements. TNMP used the proceeds received from the Series 2009A Bonds and the 2009 Term Loan Agreement to repay the $100.0 million borrowed under the above bridge financing arrangement, which then terminated, and the $150.0 million outstanding under TNMP's credit facility. The remaining proceeds, after offering expenses, were used to reduce intercompany borrowings from PNMR. On September 30, 2011, TNMP entered into and borrowed $50.0 million under a Term Loan Credit Agreement (the "2011 Term Loan Agreement") with JPMorgan Chase Bank, N.A. The 2011 Term Loan Agreement replaces the 2009 Term Loan Agreement. Borrowings under the 2011 Term Loan Agreement must be repaid by June 30, 2014 and are secured by $50.0 million aggregate principal amount of first mortgage bonds of TNMP (the "Series 2011A Bonds"). TNMP entered into hedging agreements whereby it effectively established fixed interest rates for such borrowing of 1.475% through March 30, 2014 and 1.985% thereafter, which is an effective rate of 3.566% over the life of the debt considering the amounts paid to exit the prior arrangements and enter into the new arrangements. The hedging obligations entered into in connection with the 2011 Term Loan Agreement are also secured by the Series 2011A Bonds. This hedge is accounted for as a cash-flow hedge and had a fair value of $0.1 million at December 31, 2011, using Level 2 inputs under GAAP and were determined using forward LIBOR curves under the mid-market convention to discount cash flows over the remaining term of the swap agreements. Borrowing Arrangements Between PNMR and its Subsidiaries PNMR has one-year intercompany loan agreements with its subsidiaries. Individual subsidiary loan agreements vary in amount up to $100.0 million and have either reciprocal or non-reciprocal terms. Interest charged to the subsidiaries is equivalent to interest paid by PNMR on its revolving borrowings. As of December 31, 2011 and 2010, TNMP had outstanding borrowings of $0.7 million and $1.2 million from PNMR. At February 22, 2012, TNMP had borrowings of $4.9 million from PNMR. Short-term Debt On April 30, 2009, TNMP entered into the TNMP Revolving Credit Facility, a new $75.0 million revolving credit facility, and the existing credit facility was terminated. Borrowings under the TNMP Revolving Credit Facility are secured by $75.0 million aggregate principal amount of TNMP first mortgage bonds (the “Series 2009C Bonds”). In December 2010, the TNMP Revolving Credit Facility was amended and restated, which extended its expiration to December 16, 2015. On October 31, 2011, PNMR entered into the PNMR Revolving Credit Facility, which has a financing capacity of $300.0 million, and PNM entered into the PNM Revolving Credit Facility, which has a financing capacity of $400.0 million. These new facilities expire on October 31, 2016, and include two one-year extension options, subject to approval by a majority of the lenders and, with respect to the PNM Revolving Credit Facility, regulatory approval. The new credit facilities replace the PNMR Facility and the PNM Facility, both of which would have expired in August 2012. The PNMR Facility had an original financing capacity of $600.0 million, which had been reduced to $517.0 million, and the PNM Facility had an original financing capacity of $400.0 million, which had been reduced to $368.0 million. The terms and conditions of the new facilities are substantially similar to the prior facilities. Each of the new facilities contains one financial covenant that requires the maintenance of debt-to-capital ratios of less than or equal to 65%. These ratios reflect the present value of payments under the PVNGS and EIP leases as debt. PNMR also has a local line of credit amounting to $5.0 million that expires in August 2012. TNMP has a revolving credit facility for borrowings up to $75.0 million under the TNMP Revolving Credit Facility that expires in December 2015. At December 31, 2011, the weighted average interest rate was 2.05% for the PNMR Facility, and 1.80% for the PNM Facility. The TNMP Revolving Credit Facility had no borrowings outstanding at December 31, 2011. Short-term debt outstanding consists of:
|  | December 31,
Short-term Debt |  | 2011 |  | 2010
|  | (In thousands)
PNM Revolving credit facility |  | $ | 66,000 |  |  | $ | 190,000 |
TNMP Revolving credit facility |  | — |  |  | — |
PNMR |  |  |  |
Revolving credit facility |  | 16,700 |  |  | 32,000 |
Local lines of credit |  | — |  |  | — |
|  | $ | 82,700 |  |  | $ | 222,000 |
In addition to the above borrowings, PNMR, PNM, and TNMP had letters of credit outstanding of $11.1 million, $4.7 million, and $0.3 million at December 31, 2011 that reduce the available capacity under their respective revolving credit facilities. At February 22, 2012, PNMR, PNM, and TNMP had $266.2 million, $244.0 million, and $74.7 million of availability under their respective revolving credit facilities and local lines of credit, including reductions of availability due to outstanding letters of credit. Total availability at February 22, 2012, on a consolidated basis, was $584.9 million for PNMR. At February 22, 2012, PNMR had invested cash of $0.6 million. PNM and TNMP had no invested cash at February 22, 2012. Long-Term Debt Information concerning long-term debt outstanding is as follows:
|  | December 31,
Long-term Debt |  | 2011 |  | 2010
|  | (In thousands)
PNM Debt |  |  |  |
Senior Unsecured Notes, Pollution Control Revenue Bonds: |  |  |  |
4.875% due 2033 |  | $ | 146,000 |  |  | $ | 146,000 |
5.15% due 2037 |  | 20,000 |  |  | 20,000 |
6.25% due 2038 |  | 36,000 |  |  | 36,000 |
4.75% due 2040, mandatory tender at June 1, 2017 |  | 37,000 |  |  | 37,000 |
5.20% due 2040, mandatory tender at June 1, 2020 |  | 40,045 |  |  | 40,045 |
5.90% due 2040 |  | 255,000 |  |  | 255,000 |
6.25% due 2040 |  | 11,500 |  |  | 11,500 |
4.00% due 2043, mandatory tender at June 1, 2015 |  | 39,300 |  |  | 39,300 |
5.20% due 2043, mandatory tender at June 1, 2020 |  | 21,000 |  |  | 21,000 |
Senior Unsecured Notes: |  |  |  |
7.95% due 2018 |  | 350,000 |  |  | 350,000 |
7.50% due 2018 |  | 100,025 |  |  | 100,025 |
5.35% due 2021 |  | 160,000 |  |  | — |
Other, including unamortized discounts |  | (330 | ) |  | (122 | )
|  | 1,215,540 |  |  | 1,055,748 |
Less current maturities |  | — |  |  | — |
|  | 1,215,540 |  |  | 1,055,748 |
TNMP Debt |  |  |  |
First Mortgage Bonds: |  |  |  |
2011 Term Loan Agreement, due 2014 |  | 50,000 |  |  | — |
2009 Term Loan Agreement, due 2014 |  | — |  |  | 50,000 |
9.50% due 2019, Series 2009A |  | 265,500 |  |  | 265,500 |
Other, including unamortized discounts |  | (4,537 | ) |  | (5,163 | )
|  | 310,963 |  |  | 310,337 |
Less current maturities |  | — |  |  | — |
|  | 310,963 |  |  | 310,337 |
PNMR Debt |  |  |  |
Senior unsecured notes, 9.25% due 2015 |  | 142,592 |  |  | 192,592 |
Other |  | 4,918 |  |  | 7,170 |
|  | 147,510 |  |  | 199,762 |
Less current maturities |  | 2,387 |  |  | 2,252 |
|  | 145,123 |  |  | 197,510 |
Total Consolidated PNMR Debt |  | 1,674,013 |  |  | 1,565,847 |
Less current maturities |  | 2,387 |  |  | 2,252 |
|  | $ | 1,671,626 |  |  | $ | 1,563,595 |
Long-term debt matures as follows:
| PNMR |  | PNM |  | TNMP |  | PNMR Consolidated
| (In thousands)
2012 | $ | 2,387 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,387 |
2013 | 2,531 |  |  | — |  |  | — |  |  | 2,531 |
2014 | — |  |  | — |  |  | 50,000 |  |  | 50,000 |
2015 | 142,592 |  |  | 39,300 |  |  | — |  |  | 181,892 |
2016 | — |  |  | — |  |  | — |  |  | — |
Thereafter | — |  |  | 1,176,570 |  |  | 265,500 |  |  | 1,442,070 |
Total | $ | 147,510 |  |  | $ | 1,215,870 |  |  | $ | 315,500 |  |  | $ | 1,678,880 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 + Details
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