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Fair Value of Derivative and Other Financial Instruments (Tables)

9 Months Ended

Sep. 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
	September 30, 2016				December 31, 2015
PNMR and PNM	(In thousands)
Current assets	$	3,949			$	3,813
Deferred charges	747				2,622
	4,696				6,435
Current liabilities	(2,423		)		(1,859		)
Long-term liabilities	(58		)		—
	(2,481		)		(1,859		)
Net	$	2,215			$	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								Nine Months Ended
	September 30,								September 30,
	2016				2015				2016				2015
PNMR and PNM	(In thousands)
Electric operating revenues	$	1,652			$	6,823			$	214			$	7,354
Cost of energy	(1		)		(78		)		(1,113		)		(227		)
Total gain (loss)	$	1,651			$	6,745			$	(899	)		$	7,127

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
September 30, 2016		200,000			(2,924,985	)
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
September 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.

	September 30, 2016								December 31, 2015
	Unrealized Gains				Fair Value				Unrealized Gains				Fair Value
PNMR and PNM					(In thousands)
Cash and cash equivalents	$	—			$	4,831			$	—			$	10,700
Equity securities:
Domestic value	8,345				63,666				11,610				44,505
Domestic growth	5,619				47,996				11,163				61,078
International and other	2,868				28,304				1,569				27,961
Fixed income securities:
U.S. Government	696				37,152				178				27,880
Municipals	2,490				52,459				3,672				58,576
Corporate and other	1,698				36,627				628				28,342
	$	21,716			$	271,035			$	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 $0.1 million and $1.0 million for the three and nine months ended September 30, 2016 and $(2.4) million and $(3.2) million for the three and nine months ended September 30, 2015.

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2016				2015				2016				2015
	(In thousands)
Proceeds from sales	$	86,975			$	71,576			$	280,989			$	166,097
Gross realized gains	$	7,026			$	8,998			$	27,273			$	22,463
Gross realized (losses)	$	(2,565	)		$	(4,014	)		$	(12,913	)		$	(7,133	)

Investments Classified by Contractual Maturity Date

At September 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	$	4,349			$	—
After 1 year through 5 years	36,265				119,987
After 5 years through 10 years	24,512				—
After 10 years through 15 years	10,286				—
After 15 years through 20 years	9,446				—
After 20 years	41,380				—
	$	126,238			$	119,987

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 September 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)
September 30, 2016	(In thousands)
PNMR and PNM
Available-for-sale securities
Cash and cash equivalents	$	4,831			$	4,831			$	—
Equity securities:
Domestic value	63,666				63,666				—
Domestic growth	47,996				47,996				—
International and other	28,304				28,304				—
Fixed income securities:
U.S. Government	37,152				35,879				1,273
Municipals	52,459				—				52,459
Corporate and other	36,627				6,849				29,778
	$	271,035			$	187,525			$	83,510
Commodity derivative assets	$	4,696			$	—			$	4,696
Commodity derivative liabilities	(2,481		)		—				(2,481		)
Net	$	2,215			$	—			$	2,215
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
September 30, 2016	(In thousands)
PNMR
Long-term debt	$	2,308,340			$	2,508,344			$	—			$	2,508,344			$	—
Westmoreland Loan	$	109,783			$	119,987			$	—			$	—			$	119,987
Other investments	$	428			$	1,030			$	428			$	—			$	602
PNM
Long-term debt	$	1,631,587			$	1,768,115			$	—			$	1,768,115			$	—
Other investments	$	197			$	197			$	197			$	—			$	—
TNMP
Long-term debt	$	420,802			$	482,385			$	—			$	482,385			$	—
Other investments	$	231			$	231			$	231			$	—			$	—
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			$	—			$	—

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