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Fair Value of Derivative and Other Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value of Derivative and Other Financial Instruments [Line Items]

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
	June 30, 2015			December 31, 2014
PNMR and PNM	(In thousands)
Current assets	$	4,550		$	11,232
	4,550			11,232

Current liabilities	(1,153		)	(1,209		)
Long-term liabilities	—			(477		)
	(1,153		)	(1,686		)
Net	$	3,397		$	9,546

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
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
PNMR and PNM	(In thousands)
Electric operating revenues	$	1,003		$	(324	)	$	531		$	(4,475	)
Cost of energy	(99		)	57			(149		)	245
Total gain (loss)	$	904		$	(267	)	$	382		$	(4,230	)

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
PNMR and PNM
June 30, 2015	865,000	(968,305	)
December 31, 2014	650,000	(1,919,000	)

Schedule of Collateral Related to Derivative

The table below presents information about the Company’s contingent requirements to provide collateral under commodity contracts having an objectively determinable collateral provision that are in net liability positions and are not fully collateralized with cash. Contractual liability represents commodity derivative contracts recorded at fair value on the balance sheet, determined on an individual contract basis without offsetting amounts for individual contracts that are in an asset position and could be offset under master netting agreements with the same counterparty. The table only reflects cash collateral that has been posted under the existing contracts and does not reflect letters of credit under the Company’s revolving credit facilities that have been issued as collateral. Net exposure is the net contractual liability for all contracts, including those designated as normal purchases and normal sales, offset by existing cash collateral and by any offsets available under master netting agreements, including both asset and liability positions.



Contingent Feature – Credit Rating Downgrade	Contractual Liability		Existing Cash Collateral		Net Exposure
	(In thousands)
PNMR and PNM
June 30, 2015	$	1,143	$	—	$	83
December 31, 2014	$	1,686	$	—	$	167

Available-for-sale Securities

At June 30, 2015 and December 31, 2014, the fair value of available-for-sale securities included $247.8 million and $244.6 million for the NDT and $5.7 million and $5.5 million for the mine reclamation trust. The fair value and gross unrealized gains of investments in available-for-sale securities are presented in the following table.



	June 30, 2015				December 31, 2014
	Unrealized Gains		Fair Value		Unrealized Gains		Fair Value
PNMR and PNM			(In thousands)
Cash and cash equivalents	$	—	$	3,940	$	—	$	8,276
Equity securities:
Domestic value	15,015		45,750		17,418		45,340
Domestic growth	19,850		78,515		21,354		74,053
International and other	1,147		17,057		156		16,599
Fixed income securities:
U.S. Government	276		30,421		903		22,563
Municipals	3,098		58,986		5,851		68,973
Corporate and other	411		18,881		666		14,341
	$	39,797	$	253,550	$	46,348	$	250,145

The proceeds and gross realized gains and losses on the disposition of available-for-sale securities for PNMR and PNM are shown in the following table. Realized gains and losses are determined by specific identification of costs of securities sold. Gross realized losses shown below exclude the change in realized impairment losses of $(1.2) million and $(0.8) million for the three and six months ended June 30, 2015 and $0.1 million and $0.6 million for the three and six months ended June 30, 2014.



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(In thousands)
Proceeds from sales	$	62,670		$	30,316		$	94,522		$	53,119
Gross realized gains	$	8,329		$	5,364		$	13,465		$	8,482
Gross realized (losses)	$	(1,578	)	$	(755	)	$	(3,119	)	$	(1,794	)

Investments Classified by Contractual Maturity Date

At June 30, 2015, 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	$	4,656	$	17,230	$	17,230
After 1 year through 5 years	21,533		639		—
After 5 years through 10 years	22,577		—		—
After 10 years through 15 years	10,137		—		—
After 15 years through 20 years	10,727		—		—
After 20 years	38,658		—		—
	$	108,288	$	17,869	$	17,230

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

Items recorded at fair value on the Condensed Consolidated Balance Sheets are presented below by level of the fair value hierarchy. There were no Level 3 fair value measurements at June 30, 2015 and December 31, 2014 for items recorded at fair value.



				GAAP Fair Value Hierarchy
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
June 30, 2015	(In thousands)
PNMR and PNM
Available-for-sale securities
Cash and cash equivalents	$	3,940		$	3,940	$	—
Equity securities:
Domestic value	45,750			45,750		—
Domestic growth	78,515			78,515		—
International and other	17,057			17,057		—
Fixed income securities:
U.S. Government	30,421			29,131		1,290
Municipals	58,986			—		58,986
Corporate and other	18,881			4,119		14,762
	$	253,550		$	178,512	$	75,038

Commodity derivative assets	$	4,550		$	—	$	4,550
Commodity derivative liabilities	(1,153		)	—		(1,153		)
Net	$	3,397		$	—	$	3,397

December 31, 2014
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

Fair Value, by Balance Sheet Grouping

The carrying amounts and fair values of investments in PVNGS lessor notes, other investments, and long-term debt, which are not recorded at fair value on the Condensed Consolidated Balance Sheets are presented below:



					GAAP Fair Value Hierarchy
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
June 30, 2015	(In thousands)
PNMR
Long-term debt	$	2,031,158	$	2,205,847	$	—	$	2,205,847	$	—
Investment in PVNGS lessor notes	$	16,568	$	17,230	$	—	$	—	$	17,230
Other investments	$	507	$	1,146	$	507	$	—	$	639
PNM
Long-term debt	$	1,515,676	$	1,644,887	$	—	$	1,644,887	$	—
Investment in PVNGS lessor notes	$	16,568	$	17,230	$	—	$	—	$	17,230
Other investments	$	265	$	265	$	265	$	—	$	—
TNMP
Long-term debt	$	365,482	$	410,961	$	—	$	410,961	$	—
Other investments	$	242	$	242	$	242	$	—	$	—

December 31, 2014
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	$	—	$	—

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References + Details