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Fair Value of Derivative and Other Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value of Derivative and Other Financial Instruments [Abstract]

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



	Economic Hedges
	March 31, 2017			December 31, 2016
PNMR and PNM	(In thousands)
Current assets	$	4,586		$	5,224
Current liabilities	(360		)	(2,339		)
Net	$	4,226		$	2,885

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
	March 31,
	2017		2016
PNMR and PNM	(In thousands)
Electric operating revenues	$	3,341	$	2,684
Cost of energy	11		(145		)
Total gain (loss)	$	3,352	$	2,539

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
March 31, 2017	100,000	(1,834,125	)
December 31, 2016	254,100	(2,471,600	)

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.



	March 31, 2017				December 31, 2016
	Unrealized Gains		Fair Value		Unrealized Gains		Fair Value
PNMR and PNM			(In thousands)
Cash and cash equivalents	$	—	$	8,047	$	—	$	23,683
Equity securities:
Domestic value	3,044		70,043		1,135		34,796
Domestic growth	4,438		65,127		3,032		47,595
International and other	3,555		36,442		2,029		27,481
Fixed income securities:
U.S. Government	178		31,410		115		40,962
Municipals	617		33,218		585		43,789
Corporate and other	574		41,812		553		54,671
	$	12,406	$	286,099	$	7,449	$	272,977

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 decrease in realized impairment losses of $1.1 million and $1.6 million for the three months ended March 31, 2017 and 2016.



	Three Months Ended
	March 31,
	2017			2016
PNMR and PNM	(In thousands)
Proceeds from sales	$	266,388		$	124,900
Gross realized gains	$	8,645		$	10,716
Gross realized (losses)	$	(3,085	)	$	(6,116	)

Investments Classified by Contractual Maturity Date

At March 31, 2017, 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	$	3,852	$	—
After 1 year through 5 years	23,629		96,444
After 5 years through 10 years	29,024		—
After 10 years through 15 years	3,963		—
After 15 years through 20 years	8,728		—
After 20 years	37,244		—
	$	106,440	$	96,444

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 March 31, 2017 and December 31, 2016 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)
PNMR and PNM	(In thousands)
March 31, 2017
Available-for-sale securities
Cash and cash equivalents	$	8,047		$	8,047	$	—
Equity securities:
Domestic value	70,043			70,043		—
Domestic growth	65,127			65,127		—
International and other	36,442			33,212		3,230
Fixed income securities:
U.S. Government	31,410			30,179		1,231
Municipals	33,218			—		33,218
Corporate and other	41,812			—		41,812
	$	286,099		$	206,608	$	79,491

Commodity derivative assets	$	4,586		$	—	$	4,586
Commodity derivative liabilities	(360		)	—		(360		)
Net	$	4,226		$	—	$	4,226

December 31, 2016
Available-for-sale securities
Cash and cash equivalents	$	23,683		$	23,683	$	—
Equity securities:
Domestic value	34,796			34,796		—
Domestic growth	47,595			47,595		—
International and other	27,481			27,481		—
Fixed income securities:
U.S. Government	40,962			39,723		1,239
Municipals	43,789			—		43,789
Corporate and other	54,671			23,158		31,513
	$	272,977		$	196,436	$	76,541

Commodity derivative assets	$	5,224		$	—	$	5,224
Commodity derivative liabilities	(2,339		)	—		(2,339		)
Net	$	2,885		$	—	$	2,885

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
March 31, 2017	(In thousands)
PNMR
Long-term debt	$	2,384,160	$	2,525,916	$	—	$	2,525,916	$	—
Westmoreland Loan	$	85,410	$	96,444	$	—	$	—	$	96,444
Other investments	$	419	$	1,051	$	419	$	—	$	632
PNM
Long-term debt	$	1,631,972	$	1,728,276	$	—	$	1,728,276	$	—
Other investments	$	188	$	188	$	188	$	—	$	—
TNMP
Long-term debt	$	420,950	$	464,877	$	—	$	464,877	$	—
Other investments	$	231	$	231	$	231	$	—	$	—

December 31, 2016
PNMR
Long-term debt	$	2,392,712	$	2,540,693	$	—	$	2,540,693	$	—
Westmoreland Loan	$	95,000	$	100,893	$	—	$	—	$	100,893
Other investments	$	547	$	1,164	$	547	$	—	$	617
PNM
Long-term debt	$	1,631,369	$	1,730,157	$	—	$	1,730,157	$	—
Other investments	$	316	$	316	$	316	$	—	$	—
TNMP
Long-term debt	$	420,875	$	468,329	$	—	$	468,329	$	—
Other investments	$	231	$	231	$	231	$	—	$	—

- 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.

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- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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