Fair Value of Derivative and Other Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value of Derivative and Other Financial Instruments [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

Commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges, are summarized as follows:



	Economic Hedges
	December 31,
	2014			2013
	(In thousands)
PNM and PNMR
Current assets	$	11,232		$	4,064
Deferred charges	—			3,002
	11,232			7,066
Current liabilities	(1,209		)	(2,699		)
Long-term liabilities	(477		)	(1,094		)
	(1,686		)	(3,793		)
Net	$	9,546		$	3,273

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following table presents the effect of mark-to-market commodity derivative instruments on earnings, excluding income tax effects. Commodity derivatives had no impact on OCI for the periods presented.



	Economic Hedges
	Year Ended December 31,
	2014		2013		2012
	(In thousands)
PNMR and PNM
Electric operating revenues	$	4,491	$	1,727	$	6,168
Cost of energy	593		1,109		(460		)
Total gain	$	5,084	$	2,836	$	5,708

Schedule of Notional Amounts of Outstanding Derivative Positions

The table below presents PNMR’s and PNM’s net buy (sell) volume positions:



	Economic Hedges
	MMBTU	MWh
December 31, 2014
PNMR and PNM	650,000	(1,919,000	)
December 31, 2013
PNMR and PNM	905,000	(3,343,783	)

Schedule of Collateral Related to Derivative



Contingent Feature – Credit Rating Downgrade	Contractual Liability		Existing Cash Collateral		Net Exposure
	(In thousands)
December 31, 2014
PNMR and PNM	$	1,686	$	—	$	167
December 31, 2013
PNMR and PNM	$	2,398	$	—	$	2,152

Available-for-sale Securities

The fair value and gross unrealized gains of investments in available-for-sale securities are presented in the following table. At December 31, 2014 and 2013, the fair value of available-for-sale securities included $244.6 million and $222.5 million for the NDT and $5.5 million and $4.4 million for the mine reclamation trust.



	December 31, 2014				December 31, 2013
	Unrealized Gains		Fair Value		Unrealized Gains		Fair Value
PNMR and PNM			(In thousands)
Cash and cash equivalents	$	—	$	8,276	$	—	$	3,356
Equity securities:
Domestic value	17,418		45,340		14,523		39,460
Domestic growth	21,354		74,053		25,656		76,292
International and other	156		16,599		1,040		16,633
Fixed income securities:
U.S. Government	903		22,563		158		21,941
Municipals	5,851		68,973		1,018		58,568
Corporate and other	666		14,341		207		10,605
	$	46,348	$	250,145	$	42,602	$	226,855

Schedule of Realized Gain (Loss)

Gross realized losses shown below exclude the change in realized impairment losses of $(0.7) million, $0.6 million, and $5.2 million.



	Year Ended December 31,
	2014			2013			2012
	(In thousands)
Proceeds from sales	$	117,989		$	271,140		$	167,330
Gross realized gains	$	15,162		$	14,308		$	15,907
Gross realized (losses)	$	(3,964	)	$	(4,298	)	$	(8,170	)

Investments Classified by Contractual Maturity Date

At December 31, 2014, the available-for-sale and held-to-maturity debt securities had the following final maturities:



	Fair Value
	Available-for-Sale		Held-to-Maturity
	PNMR and PNM		PNMR		PNM
	(In thousands)
Within 1 year	$	3,946	$	8,019	$	8,019
After 1 year through 5 years	20,275		25,430		24,817
After 5 years through 10 years	13,422		—		—
After 10 years through 15 years	10,367		—		—
After 15 years through 20 years	11,539		—		—
After 20 years	46,328		—		—
	$	105,877	$	33,449	$	32,836

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Items recorded at fair value on the Consolidated Balance Sheets are presented below by level of the fair value hierarchy. There were no Level 3 fair value measurements at December 31, 2014 and 2013 for items recorded at fair value.



				GAAP Fair Value Hierarchy
	Total			Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
December 31, 2014				(In thousands)
PNMR and PNM
Available-for-sale securities
Cash and cash equivalents	$	8,276		$	8,276	$	—
Equity securities:
Domestic value	45,340			45,340		—
Domestic growth	74,053			74,053		—
International and other	16,599			16,599		—
Fixed income securities:
U.S. Government	22,563			20,808		1,755
Municipals	68,973			—		68,973
Corporate and other	14,341			4,843		9,498
	$	250,145		$	169,919	$	80,226

Commodity derivative assets	$	11,232		$	—	$	11,232
Commodity derivative liabilities	(1,686		)	—		(1,686		)
Net	$	9,546		$	—	$	9,546



				GAAP Fair Value Hierarchy
	Total			Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
December 31, 2013				(In thousands)
PNMR and PNM
Available-for-sale securities
Cash and cash equivalents	$	3,356		$	3,356	$	—
Equity securities:
Domestic value	39,460			39,460		—
Domestic growth	76,292			76,292		—
International and other	16,633			16,633		—
Fixed income securities:
U.S. Government	21,941			20,194		1,747
Municipals	58,568			—		58,568
Corporate and other	10,605			2,245		8,360
	$	226,855		$	158,180	$	68,675

Commodity derivative assets	$	7,066		$	—	$	7,066
Commodity derivative liabilities	(3,793		)	—		(3,793		)
Net	$	3,273		$	—	$	3,273

Fair Value, by Balance Sheet Grouping

The carrying amounts and fair values of investments in PVNGS lessor notes, other investments, and long-term debt are presented below:



					GAAP Fair Value Hierarchy
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
December 31, 2014	(In thousands)
PNMR
Long-term debt	$	1,975,090	$	2,173,117	$	—	$	2,173,117	$	—
Investment in PVNGS lessor notes	$	31,232	$	32,836	$	—	$	—	$	32,836
Other investments	$	1,762	$	2,375	$	639	$	—	$	1,736
PNM
Long-term debt	$	1,490,657	$	1,624,222	$	—	$	1,624,222	$	—
Investment in PVNGS lessor notes	$	31,232	$	32,836	$	—	$	—	$	32,836
Other investments	$	397	$	397	$	397	$	—	$	—
TNMP
Long-term debt	$	365,667	$	427,356	$	—	$	427,356	$	—
Other investments	$	242	$	242	$	242	$	—	$	—

December 31, 2013
PNMR
Long-term debt	$	1,745,420	$	1,905,230	$	—	$	1,905,230	$	—
Investment in PVNGS lessor notes	$	52,958	$	57,279	$	—	$	—	$	57,279
Other investments	$	1,835	$	3,196	$	690	$	—	$	2,506
PNM
Long-term debt	$	1,290,618	$	1,382,938	$	—	$	1,382,938	$	—
Investment in PVNGS lessor notes	$	52,958	$	57,279	$	—	$	—	$	57,279
Other investments	$	445	$	445	$	445	$	—	$	—
TNMP
Long-term debt	$	336,036	$	390,814	$	—	$	390,814	$	—
Other investments	$	245	$	245	$	245	$	—	$	—

Fair Value, Assets Measured on Recurring Basis

The fair values of investments held by the employee benefit plans are as follows:



			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2014			(In thousands)
PNM Pension Plan
Participation in PNMR Master Trust Total Plan Investments	$	588,112	$	123,668	$	398,819	$	65,625
TNMP Pension Plan
Participation in PNMR Master Trust Total Plan Investments	$	69,207	$	14,823	$	44,425	$	9,959
PNM OPEB Plan
Cash and cash equivalents	$	1,242	$	1,242	$	—	$	—
Equity securities:
International funds	10,332		—		10,332		—
Domestic value	8,365		8,365		—		—
Domestic growth	5,960		5,960		—		—
Other funds	30,997		—		30,997		—
Fixed income securities:
Mutual funds	22,122		22,122		—		—
	$	79,018	$	37,689	$	41,329	$	—
TNMP OPEB Plan
Cash and cash equivalents	$	168	$	168	$	—	$	—
Equity securities:
International funds	1,277		—		1,277		—
Domestic value	403		403		—		—
Domestic growth	1,024		1,024		—		—
Other funds	3,790		—		3,790		—
Fixed income securities:
Mutual funds	3,549		3,549		—		—
	$	10,211	$	5,144	$	5,067	$	—



			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2013	(In thousands)
PNM Pension Plan
Participation in PNMR Master Trust	$	557,258	$	145,364	$	330,903	$	80,991
TNMP Pension Plan
Participation in PNMR Master Trust	$	66,285	$	18,657	$	32,620	$	15,008
PNM OPEB Plan
Cash and cash equivalents	$	1,152	$	1,152	$	—	$	—
Equity securities:
International funds	11,634		—		11,634		—
Domestic value	6,388		6,388		—		—
Domestic growth	24,135		7,094		17,041		—
Other funds	14,028		—		14,028		—
Fixed income securities:
Mutual funds	16,796		16,796		—		—
	$	74,133	$	31,430	$	42,703	$	—
TNMP OPEB Plan
Cash and cash equivalents	$	302	$	302	$	—	$	—
Equity securities:
International funds	1,334		—		1,334		—
Domestic value	381		381		—		—
Domestic growth	4,171		1,848		2,323		—
Other funds	1,844		—		1,844		—
Fixed income securities:
Mutual funds	1,702		1,702		—		—
	$	9,734	$	4,233	$	5,501	$	—

The fair values of investments in the PNMR Master Trust are as follows:



			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2014	(In thousands)
PNMR Master Trust
Cash and cash equivalents	$	15,645	$	15,645	$	—	$	—
Equity securities:
International	23,282		—		23,282		—
Domestic value	41,778		41,778		—		—
Domestic growth	28,370		28,370		—		—
Other funds	29,719		—		29,719		—
Fixed income securities:
Corporate	242,742		—		242,015		727
U.S. Government	106,634		52,537		54,097		—
Municipals	20,156		—		20,156		—
Other funds	74,136		161		73,975		—
Alternative investments:
Private equity funds	37,220		—		—		37,220
Hedge funds	23,876		—		—		23,876
Real estate funds	13,761		—		—		13,761
	$	657,319	$	138,491	$	443,244	$	75,584
December 31, 2013
PNMR Master Trust
Cash and cash equivalents	$	16,281	$	16,281	$	—	$	—
Equity securities:
International	24,471		24,471		—		—
Domestic value	41,451		41,451		—		—
Domestic growth	36,805		36,805		—		—
Other funds	22,522		—		22,522		—
Fixed income securities:
Corporate	202,897		363		202,358		176
U.S. Government	99,748		44,541		55,207		—
Municipals	17,259		—		17,259		—
Other funds	66,286		109		66,177		—
Alternative investments:
Private equity funds	39,122		—		—		39,122
Hedge funds	34,912		—		—		34,912
Real estate funds	21,789		—		—		21,789
	$	623,543	$	164,021	$	363,523	$	95,999

Schedule of Defined Benefit Plans Disclosures

A reconciliation of the changes in Level 3 fair value measurements is as follows:



	Year Ended December 31,
	2014			2013
Level 3 Fair Value Assets and Liabilities	(In thousands)
PNM Pension	Master Trust			Master Trust
Balance at beginning of period	$	80,991		$	79,017
Actual return on assets sold during the period	10,376			3,303
Actual return on assets still held at period end	(5,731		)	3,361
Purchases	8,832			15,110
Sales	(28,843		)	(19,800		)
Balance at end of period	65,625			80,991
TNMP Pension
Balance at beginning of period	$	15,008		$	14,171
Actual return on assets sold during the period	3,409			1,400
Actual return on assets still held at period end	(1,883		)	1,425
Purchases	2,902			6,408
Sales	(9,477		)	(8,396		)
Balance at end of period	9,959			15,008
Total	$	75,584		$	95,999

Additional information concerning changes in Level 3 fair value measurements for the PNMR Master Trust is as follows:

Level 3 Fair Value Assets and Liabilities



PNMR Master Trust	Private equity funds			Hedge funds			Real estate funds			Fixed income - corporate			Total
				(In thousands)
Balance at December 31, 2012	$	38,212		$	31,277		$	23,699		$	—		$	93,188
Actual return on assets sold during the period	4,677			135			(109		)	1			4,704
Actual return on assets still held at period end	1,162			3,500			123			—			4,785
Purchases	3,117			16,151			2,076			175			21,519
Sales	(8,046		)	(16,151		)	(4,000		)	—			(28,197		)
Balance at December 31, 2013	39,122			34,912			21,789			176			95,999
Actual return on assets sold during the period	5,355			8,667			(236		)	—			13,786
Actual return on assets still held at period end	(296		)	(7,536		)	237			(20		)	(7,615		)
Purchases	3,656			5,500			1,971			608			11,735
Sales	(10,617		)	(17,667		)	(10,000		)	(37		)	(38,321		)
Balance at December 31, 2014	$	37,220		$	23,876		$	13,761		$	727		$	75,584