XML 49 R29.htm IDEA: XBRL DOCUMENT v3.5.0.2
Fair Value of Derivative and Other Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2016
Fair Value of Derivative and Other Financial Instruments [Abstract]  
Summary of Derivatives
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,
2016
 
December 31,
2015
PNMR and PNM
(In thousands)
Current assets
$
4,053

 
$
3,813

Deferred charges
1,332

 
2,622

 
5,385

 
6,435

 
 
 
 
Current liabilities
(4,746
)
 
(1,859
)
Long-term liabilities
(1,588
)
 
—

 
(6,334
)
 
(1,859
)
Net
$
(949
)
 
$
4,576
Effect of Mark-to-Market on Earnings, Excluding Tax Effects
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,
 
2016
 
2015
 
2016
 
2015
PNMR and PNM
(In thousands)
Electric operating revenues
$
(4,123
)
 
$
1,003

 
$
(1,439
)
 
$
531

Cost of energy
(967
)
 
(99
)
 
(1,112
)
 
(149
)
   Total gain (loss)
$
(5,090
)
 
$
904

 
$
(2,551
)
 
$
382
Schedule of Net Buy (Sell) Volume Positions
The table below presents PNMR’s and PNM’s net buy (sell) volume positions:
 
 
Economic Hedges
 
 
MMBTU
 
MWh
PNMR and PNM
 
 
 
 
June 30, 2016
 
2,615,000

 
(3,590,045
)
December 31, 2015
 
577,481

 
(3,405,843
)
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 PNM Revolving Credit Facility 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, 2016
 
$
—

 
$
—

 
$
—

December 31, 2015
 
$
839

 
$
—

 
$
839
Schedule of Fair Value and Gross Unrealized Gains in Available-for-sale Securities
The fair value and gross unrealized gains of investments in available-for-sale securities are presented in the following table.
 
June 30, 2016
 
December 31, 2015
 
Unrealized Gains
 
Fair Value
 
Unrealized Gains
 
Fair Value
PNMR and PNM
 
 
(In thousands)
 
 
Cash and cash equivalents
$
—

 
$
3,535

 
$
—

 
$
10,700

Equity securities:
 
 
 
 
 
 
 
   Domestic value
7,517

 
61,672

 
11,610

 
44,505

   Domestic growth
4,977

 
45,484

 
11,163

 
61,078

International and other
1,937

 
26,413

 
1,569

 
27,961

Fixed income securities:
 
 
 
 
 
 
 
   U.S. Government
1,293

 
38,263

 
178

 
27,880

   Municipals
3,843

 
56,078

 
3,672

 
58,576

   Corporate and other
2,421

 
33,224

 
628

 
28,342

 
$
21,988

 
$
264,669

 
$
28,820

 
$
259,042
Schedule of Gross Realized Gains and Losses
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 $(0.7) million and $0.9 million for the three and six months ended June 30, 2016 and $(1.2) million and $(0.8) million for the three and six months ended June 30, 2015.
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2016
 
2015
 
2016
 
2015
 
(In thousands)
Proceeds from sales
$
69,115

 
$
62,670

 
$
194,014

 
$
94,522

Gross realized gains
$
9,531

 
$
8,329

 
$
20,247

 
$
13,465

Gross realized (losses)
$
(4,233
)
 
$
(1,578
)
 
$
(10,349
)
 
$
(3,119
)
Investments Classified by Contractual Maturity Date
At June 30, 2016, 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
 
(In thousands)
Within 1 year
$
2,370

 
$
—

After 1 year through 5 years
39,510

 
134,889

After 5 years through 10 years
21,671

 
—

After 10 years through 15 years
9,784

 
—

After 15 years through 20 years
10,028

 
—

After 20 years
44,202

 
—

 
$
127,565

 
$
134,889
Schedule of Investments
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, 2016 and December 31, 2015 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, 2016
(In thousands)
PNMR and PNM
 
 
 
 
 
Available-for-sale securities
 
 
 
 
 
   Cash and cash equivalents
$
3,535

 
$
3,535

 
$
—

   Equity securities:
 
 
 
 
 
     Domestic value
61,672

 
61,672

 
—

     Domestic growth
45,484

 
45,484

 
—

International and other
26,413

 
26,413

 
—

   Fixed income securities:
 
 
 
 
 
     U.S. Government
38,263

 
36,979

 
1,284

     Municipals
56,078

 
—

 
56,078

     Corporate and other
33,224

 
6,852

 
26,372

          
$
264,669

 
$
180,935

 
$
83,734

 
 
 
 
 
 
Commodity derivative assets
$
5,385

 
$
—

 
$
5,385

Commodity derivative liabilities
(6,334
)
 
—

 
(6,334
)
          Net
$
(949
)
 
$
—

 
$
(949
)
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
PNMR and PNM

 
 
 
 
Available-for-sale securities

 
 
 
 
   Cash and cash equivalents
$
10,700

 
$
10,700

 
$
—

   Equity securities:

 
 
 
 
     Domestic value
44,505

 
44,505

 
—

     Domestic growth
61,078

 
61,078

 
—

     International and other
27,961

 
27,961

 
—

   Fixed income securities:
 
 
 
 
 
     U.S. Government
27,880

 
26,608

 
1,272

     Municipals
58,576

 
—

 
58,576

     Corporate and other
28,342

 
6,500

 
21,842

          
$
259,042

 
$
177,352

 
$
81,690

 

 
 
 
 
Commodity derivative assets
$
6,435

 
$
—

 
$
6,435

Commodity derivative liabilities
(1,859
)
 
—

 
(1,859
)
          Net
$
4,576

 
$
—

 
$
4,576
Schedule of Carrying Amount and Fair Value of Items Not Recorded at Fair Value
The carrying amounts and fair values of investments in the Westmoreland Loan, 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, 2016
(In thousands)
PNMR
 
 
 
 
 
 
 
 
 
Long-term debt
$
2,324,024

 
$
2,546,710

 
$
—

 
$
2,546,710

 
$
—

Westmoreland Loan
$
123,995

 
$
134,889

 
$
—

 
$
—

 
$
134,889

Other investments
$
440

 
$
1,028

 
$
440

 
$
—

 
$
588

PNM
 
 
 
 
 
 
 
 
 
Long-term debt
$
1,631,574

 
$
1,787,656

 
$
—

 
$
1,787,656

 
$
—

Other investments
$
202

 
$
202

 
$
202

 
$
—

 
$
—

TNMP
 
 
 
 
 
 
 
 
 
Long-term debt
$
420,763

 
$
485,210

 
$
—

 
$
485,210

 
$
—

Other investments
$
238

 
$
238

 
$
238

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
PNMR
 
 
 
 
 
 
 
 
 
Long-term debt
$
2,091,948

 
$
2,264,869

 
$
—

 
$
2,264,869

 
$
—

Investment in PVNGS lessor notes
$
8,587

 
$
8,947

 
$
—

 
$
—

 
$
8,947

Other investments
$
604

 
$
1,269

 
$
604

 
$
—

 
$
665

PNM
 
 
 
 
 
 
 
 
 
Long-term debt
$
1,580,677

 
$
1,703,209

 
$
—

 
$
1,703,209

 
$
—

Investment in PVNGS lessor notes
$
8,587

 
$
8,947

 
$
—

 
$
—

 
$
8,947

Other investments
$
366

 
$
366

 
$
366

 
$
—

 
$
—

TNMP
 
 
 
 
 
 
 
 
 
Long-term debt
$
361,411

 
$
411,661

 
$
—

 
$
411,661

 
$
—

Other investments
$
238

 
$
238

 
$
238

 
$
—

 
$
—