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Financing | 12 Months Ended
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Dec. 31, 2015
Debt Disclosure [Abstract] |
Financing | Financing The Company’s financing strategy includes both short-term and long-term borrowings. The Company utilizes short-term revolving credit facilities, as well as cash flows from operations, to provide funds for both construction and operating expenditures. Depending on market and other conditions, the Company will periodically sell long-term debt or enter into term loan arrangements and use the proceeds to reduce borrowings under the revolving credit facilities. Each of the revolving credit facilities and the Company’s term loans contains one financial covenant that requires the maintenance of debt-to-capital ratios of less than or equal to 65% (for PNMR and PNM, these ratios reflect the present value of payments under the PVNGS leases as debt) and generally include customary covenants, events of default, cross default provisions and change of control provisions. PNM must obtain NMPRC approval for any financing transaction having a maturity of more than 18 months. In addition, PNM files its annual short-term financing plan with the NMPRC. Financing Activities PNMR On December 14, 2012, PNMR entered into a $100.0 million Term Loan Agreement (as amended and restated, the “PNMR Term Loan Agreement”) among PNMR, the lenders identified therein, and JPMorgan Chase Bank, N.A., as Administrative Agent. On December 27, 2012, PNMR borrowed $100.0 million under the agreement and used the funds to repay $100.0 million in borrowings made under the PNMR Revolving Credit Facility. On December 27, 2013, PNMR entered into an agreement that amended and restated the PNMR Term Loan Agreement extending the maturity date to December 26, 2014 from December 27, 2013. On December 22, 2014, PNMR entered into another agreement that amended and restated the PNMR Term Loan Agreement extending the maturity date to December 21, 2015. On December 21, 2015, PNMR entered into the Third Amended and Restated PNMR Term Loan Agreement that increased the amount of the PNMR Term Loan Agreement to $150.0 million and extended the maturity date to December 21, 2016. On March 9, 2015, PNMR entered into a $150.0 million Term Loan Agreement (“PNMR 2015 Term Loan Agreement”) between PNMR, the lenders identified therein, and Wells Fargo Bank, National Association, as Lender and Administrative Agent. The PNMR 2015 Term Loan Agreement bears interest at a variable rate, which was 1.22% at December 31, 2015, and must be repaid on or before March 9, 2018. In September 2015, PNMR entered into a hedging agreement whereby it effectively established a fixed interest rate of 1.927% for borrowings under the PNMR 2015 Term Loan Agreement for the period from January 11, 2016 through March 9, 2018. This hedge is accounted for as a cash-flow hedge and had a fair value gain of $0.1 million at December 31, 2015, using Level 2 inputs under GAAP determined using forward LIBOR curves under the mid-market convention to discount cash flows over the remaining term of the swap agreements. In the year ended December 31, 2013, PNMR purchased $23.8 million aggregate principal amount of its outstanding 9.25% Senior Unsecured Notes, Series A, due 2015, through several open-market purchases, for $26.9 million plus accrued and unpaid interest. PNMR recognized losses of $3.3 million on these purchases, including transaction costs and write-off of the proportionate amount of the deferred costs of the original issuance of the notes, which are included in Other deductions on the Consolidated Statements of Earnings. At December 31, 2014, PNMR had an aggregate outstanding principal amount of $118.8 million of its 9.25% Senior Unsecured Notes, Series A, which were due on May 15, 2015. PNMR repaid all of the 9.25% Senior Unsecured Notes, Series A at the scheduled maturity, utilizing proceeds from the PNMR 2015 Term Loan Agreement and borrowings under the PNMR Revolving Credit Facility. As discussed in Note 16, NM Capital, a wholly owned subsidiary of PNMR, entered into a $125.0 million term loan agreement (the “BTMU Term Loan Agreement”), among NM Capital, The Bank of Tokyo-Mitsubishi UFJ, Ltd. (“BTMU”), as lender, and BTMU, as Administrative Agent, as of February 1, 2016. The BTMU Term Loan Agreement has a maturity date of February 1, 2021 and bears interest at a rate based on LIBOR plus a customary spread. PNMR, as parent company of NM Capital, has guaranteed NM Capital’s obligations. The BTMU Term Loan Agreement and the guarantee include customary covenants, including requirements for PNMR to not exceed a maximum debt-to-capital ratio and customary events of default consistent with PNMR’s other term loan agreements. In addition, the BTMU Term Loan Agreement has a cross default provision and a change of control provision. NM Capital utilized the proceeds of the BTMU Term Loan Agreement to provide funding of $125.0 million to a ring-fenced, bankruptcy-remote, special-purpose entity that is a subsidiary of Westmoreland Coal Company to finance the purchase price of the stock of SJCC. PNM On April 22, 2013, PNM entered into a $75.0 million Term Loan Agreement (the “PNM 2013 Term Loan Agreement”) among PNM, the lenders identified therein, and Union Bank, N.A., as Administrative Agent. Funding of the PNM 2013 Term Loan Agreement occurred on April 22, 2013, at which time the funds were used to repay $75.0 million in borrowings made under the PNM Revolving Credit Facility. On March 5, 2014, PNM entered into a $175.0 million Term Loan Agreement (the “PNM 2014 Term Loan Agreement”) among PNM and BTMU, as Lender and Administrative Agent. On March 5, 2014, PNM used a portion of the funds borrowed under the PNM 2014 Term Loan Agreement to repay all amounts outstanding under the PNM 2013 Term Loan Agreement and other short-term amounts outstanding. The PNM 2014 Term Loan Agreement was repaid on August 12, 2015. On December 22, 2014, PNM entered into a multi-draw term loan facility (the “PNM Multi-draw Term Loan”) with JPMorgan Chase Bank, N.A., as Lender and Administrative Agent. The $125.0 million facility has a maturity date of June 21, 2016. At December 31, 2014, outstanding borrowings under the PNM Multi-draw Term Loan were $100.0 million. PNM drew the remaining capacity of $25.0 million on May 8, 2015 resulting in outstanding borrowings at December 31, 2015 of $125.0 million, which are included in current maturities of long-term debt on the Consolidated Balance Sheet. The PNM Multi-draw Term Loan bears interest at a variable rate, which was 0.99% at December 31, 2015. At December 31, 2014, PNM had a $39.3 million series of outstanding Senior Unsecured Notes, Pollution Control Revenue Bonds, which have a final maturity of June 1, 2043. These PCRBs were subject to mandatory tender for remarketing on June 1, 2015 and were successfully remarketed on that date. The notes now bear interest at 2.40%, continue to have an outstanding amount of $39.3 million, and are subject to mandatory tender for remarketing on June 1, 2020. On August 11, 2015, PNM issued $250.0 million aggregate principal amount of its 3.850% Senior Unsecured Notes due 2025. The notes will mature on August 1, 2025. Portions of the proceeds from the offering were used to repay the existing $175.0 million PNM 2014 Term Loan Agreement and to repay outstanding borrowings under the PNM Revolving Credit Facility, the PNM New Mexico Credit Facility, and PNM’s intercompany loan from PNMR. PNM has a shelf registration statement, which will expire in May 2017, with capacity for the issuance of up to $250.0 million of senior unsecured notes. TNMP On September 30, 2011, TNMP entered into the TNMP 2011 Term Loan Agreement and borrowed $50.0 million under it. Borrowings under the TNMP 2011 Term Loan Agreement were due by June 30, 2014. The debt was repaid from the proceeds of the TNMP 2013 Bond Purchase Agreement. TNMP entered into hedging agreements whereby it effectively established fixed interest rates for such borrowing over the life of the debt. On March 6, 2013, TNMP commenced an offer to exchange any and all of TNMP’s $265.5 million aggregate principal amount outstanding 9.50% First Mortgage Bonds, due 2019, Series 2009A, for a new series of 6.95% First Mortgage Bonds, due 2043, Series 2013A, and up to $140 in cash for each $1,000 of bonds exchanged. Settlement of the exchange offer occurred on April 3, 2013. Upon settlement, TNMP issued $93.2 million of 6.95% First Mortgage Bonds and paid an aggregate of $13.0 million in cash in exchange for $93.2 million of 9.50% First Mortgage Bonds, in addition to payment of accrued and unpaid interest on the exchanged bonds. The exchange resulted in a premium on the 6.95% First Mortgage Bonds reflecting the contractual interest rate being in excess of the market rate of interest on the date of the exchange. The premium amounted to $23.2 million, after reduction for the cash paid in the exchange. A regulatory asset was recorded offsetting the premium, including the cash consideration paid in the exchange. On December 9, 2013, TNMP entered into an agreement (the “TNMP 2013 Bond Purchase Agreement”), which provided that TNMP would issue $80.0 million aggregate principal amount of 4.03% first mortgage bonds, due 2024 (the “Series 2014A Bonds”) on or about June 27, 2014, subject to satisfaction of certain conditions. TNMP issued the Series 2014A Bonds on June 27, 2014. TNMP used $50.0 million of the proceeds to repay the full outstanding amount of a term loan and used the remaining $30.0 million of proceeds to reduce short-term debt. On December 17, 2015, TNMP entered into an agreement (the “TNMP 2015 Bond Purchase Agreement”), which provided that TNMP would issue $60.0 million aggregate principal amount of 3.53% first mortgage bonds, due 2026 (the “Series 2016A Bonds”) on or about February 10, 2016, subject to satisfaction of certain conditions. TNMP issued the Series 2016A Bonds on February 10, 2016 and used the proceeds to reduce short-term debt and intercompany debt. 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 short-term borrowings or the money-market interest rate if PNMR does not have any short-term borrowings outstanding. As of December 31, 2015 and 2014, TNMP had outstanding borrowings of $11.8 million and $22.7 million from PNMR. At February 19, 2016, TNMP had borrowings of $15.1 million from PNMR. PNM had no outstanding borrowings from PNMR at December 31, 2015 or February 19, 2016. Short-term Debt The PNMR Revolving Credit Facility has a financing capacity of $300.0 million and the PNM Revolving Credit Facility has a financing capacity of $400.0 million. In October 2015, the maturity of both of these facilities was extended from October 31, 2019 to October 31, 2020. The TNMP Revolving Credit Facility is a $75.0 million revolving credit facility secured by $75.0 million aggregate principal amount of TNMP first mortgage bonds. The TNMP Revolving Credit Facility matures on September 18, 2018. On January 8, 2014, PNM entered into a $50.0 million unsecured revolving credit facility (the “PNM New Mexico Credit Facility”) by and among PNM, the lenders identified therein, U.S. Bank National Association, as Administrative Agent, and BOKF, NA dba Bank of Albuquerque, as Syndication Agent. The nine participating lenders are all banks that have a significant presence in New Mexico and PNM’s service territory or are headquartered in New Mexico. The PNM New Mexico Credit Facility expires on January 8, 2018 and contains covenants and conditions similar to those in the PNM Revolving Credit Facility. At December 31, 2015, interest rates on outstanding borrowings were 1.26% for the PNMR Term Loan Agreement (discussed under Financing Activities above), 1.67% for the PNMR Revolving Credit Facility, and 1.29% for the TNMP Revolving Credit Facility. The PNM Revolving Credit Facility and the PNM New Mexico Credit Facility had no borrowings outstanding at December 31, 2015. Short-term debt outstanding consists of:
|  | December 31,
Short-term Debt |  | 2015 |  | 2014
|  | (In thousands)
PNM: |  |  |  |
PNM Revolving Credit Facility |  | $ | — |  |  | $ | — |
PNM New Mexico Credit Facility |  | — |  |  | — |
TNMP Revolving Credit Facility |  | 59,000 |  |  | 5,000 |
PNMR |  |  |  |
PNMR Revolving Credit Facility |  | 41,600 |  |  | 600 |
PNMR Term Loan Agreement |  | 150,000 |  |  | 100,000 |
|  | $ | 250,600 |  |  | $ | 105,600 |
In addition to the above borrowings, PNMR, PNM, and TNMP had letters of credit outstanding of $6.2 million, $3.2 million, and $0.1 million at December 31, 2015 that reduce the available capacity under their respective revolving credit facilities. At February 19, 2016, PNMR, PNM, and TNMP had $187.7 million, $350.6 million, and $59.9 million of availability under their respective revolving credit facilities, including reductions of availability due to outstanding letters of credit, and PNM had no availability under the PNM New Mexico Credit Facility. Total availability at February 19, 2016, on a consolidated basis, was $598.2 million for PNMR. At February 19, 2016, PNMR had invested cash of $1.9 million. PNM and TNMP had no invested cash at February 19, 2016. Long-Term Debt Information concerning long-term debt outstanding and unamortized (premiums), discounts, and debt issuance costs is as follows:
|  | December 31, 2015 |  | December 31, 2014
|  | Principal |  | Unamortized Discounts, (Premiums), and Issuance Costs, net |  | Principal |  | Unamortized Discounts, (Premiums), and Issuance Costs, net
|  | (In thousands)
PNM Debt |  |  |  |  |  |  |  |
Senior Unsecured Notes, Pollution Control Revenue Bonds: |  |  |  |  |  |  |  |
4.875% due 2033 |  | $ | 146,000 |  |  | $ | 721 |  |  | $ | 146,000 |  |  | $ | 807 |
6.25% due 2038 |  | 36,000 |  |  | 251 |  |  | 36,000 |  |  | 262 |
4.75% due 2040, mandatory tender at June 1, 2017 |  | 37,000 |  |  | 82 |  |  | 37,000 |  |  | 138 |
5.20% due 2040, mandatory tender at June 1, 2020 |  | 40,045 |  |  | 190 |  |  | 40,045 |  |  | 233 |
5.90% due 2040 |  | 255,000 |  |  | 2,222 |  |  | 255,000 |  |  | 2,313 |
6.25% due 2040 |  | 11,500 |  |  | 100 |  |  | 11,500 |  |  | 104 |
2.54% due 2042, mandatory tender at June 1, 2017 |  | 20,000 |  |  | 199 |  |  | 20,000 |  |  | 331 |
4.00% due 2043, mandatory tender at June 1, 2015 |  | — |  |  | — |  |  | 39,300 |  |  | 36 |
2.40% due 2043, mandatory tender at June 1, 2020 |  | 39,300 |  |  | 456 |  |  | — |  |  | — |
5.20% due 2043, mandatory tender at June 1, 2020 |  | 21,000 |  |  | 96 |  |  | 21,000 |  |  | 118 |
Senior Unsecured Notes: |  |  |  |  |  |  |  |
7.95% due 2018 |  | 350,000 |  |  | 1,718 |  |  | 350,000 |  |  | 2,441 |
7.50% due 2018 |  | 100,025 |  |  | 320 |  |  | 100,025 |  |  | 444 |
5.35% due 2021 |  | 160,000 |  |  | 943 |  |  | 160,000 |  |  | 1,106 |
3.85% due 2025 |  | 250,000 |  |  | 2,874 |  |  | — |  |  | — |
PNM Term Loan Agreement due 2015 |  | — |  |  | — |  |  | 175,000 |  |  | — |
PNM Multi-draw Term Loan due 2016 |  | 125,000 |  |  | 21 |  |  | 100,000 |  |  | — |
|  | 1,590,870 |  |  | 10,193 |  |  | 1,490,870 |  |  | 8,333 |
Less current maturities |  | 125,000 |  |  | 21 |  |  | 214,300 |  |  | 36 |
|  | 1,465,870 |  |  | 10,172 |  |  | 1,276,570 |  |  | 8,297 |
TNMP Debt |  |  |  |  |  |  |  |
First Mortgage Bonds: |  |  |  |  |  |  |  |
9.50% due 2019, Series 2009A |  | 172,302 |  |  | 2,682 |  |  | 172,302 |  |  | 3,508 |
6.95% due 2043, Series 2013A |  | 93,198 |  |  | (19,490 | ) |  | 93,198 |  |  | (20,208 | )
4.03% due 2024, Series 2014A |  | 80,000 |  |  | 897 |  |  | 80,000 |  |  | 959 |
|  | 345,500 |  |  | (15,911 | ) |  | 345,500 |  |  | (15,741 | )
Less current maturities |  | — |  |  | — |  |  | — |  |  | — |
|  | 345,500 |  |  | (15,911 | ) |  | 345,500 |  |  | (15,741 | )
PNMR Debt |  |  |  |  |  |  |  |
PNMR 2015 Term Loan Agreement due 2018 |  | 150,000 |  |  | 140 |  |  | — |  |  | — |
Senior unsecured notes, 9.25% due 2015 |  | — |  |  | — |  |  | 118,766 |  |  | 159 |
|  | 150,000 |  |  | 140 |  |  | 118,766 |  |  | 159 |
Less current maturities |  | — |  |  | — |  |  | 118,766 |  |  | 159 |
|  | 150,000 |  |  | 140 |  |  | — |  |  | — |
Total Consolidated PNMR Debt |  | 2,086,370 |  |  | (5,578 | ) |  | 1,955,136 |  |  | (7,249 | )
Less current maturities |  | 125,000 |  |  | 21 |  |  | 333,066 |  |  | 195 |
|  | $ | 1,961,370 |  |  | $ | (5,599 | ) |  | $ | 1,622,070 |  |  | $ | (7,444 | )
In April 2015, the FASB issued Accounting Standards Update 2015-03 – Interest – Imputation of Interest (Subtopic 835-30) , which, as subsequently amended, requires that debt issuance costs be reflected as a direct reduction of the related debt liability, except for arrangements such as the Company’s revolving credit facilities. As permitted under the ASU, the Company adopted it as of December 31, 2015. The ASU requires that upon adoption it is to be applied retrospectively to prior years. Accordingly, amounts for 2014 that previously were included in other deferred charges are now reflected as reductions of the related debt in the above table and on the Consolidated Balance Sheets. The 2014 amounts reclassified were none for PNMR, less than $0.1 million for PNM, and none for TNMP that reduce current installments of long-term debt and $0.2 million for PNMR, $8.1 million for PNM, and $4.4 million for TNMP that reduce long-term debt. Reflecting mandatory tender dates, long-term debt matures as follows:
| PNMR |  | PNM |  | TNMP |  | PNMR Consolidated
| (In thousands)
2016 | $ | — |  |  | $ | 125,000 |  |  | $ | — |  |  | $ | 125,000 |
2017 | — |  |  | 57,000 |  |  | — |  |  | 57,000 |
2018 | 150,000 |  |  | 450,025 |  |  | — |  |  | 600,025 |
2019 | — |  |  | — |  |  | 172,302 |  |  | 172,302 |
2020 | — |  |  | 100,345 |  |  | — |  |  | 100,345 |
Thereafter | — |  |  | 858,500 |  |  | 173,198 |  |  | 1,031,698 |
Total | $ | 150,000 |  |  | $ | 1,590,870 |  |  | $ | 345,500 |  |  | $ | 2,086,370 |

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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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: 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 + Details
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