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Fair Value of Derivative and Other Financial Instruments | 12 Months Ended
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Dec. 31, 2017
Fair Value of Derivative and Other Financial Instruments [Abstract] |
Fair Value of Derivative and Other Financial Instruments | Fair Value of Derivative and Other Financial Instruments Fair value is defined under GAAP as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is based on current market quotes as available and is supplemented by modeling techniques and assumptions made by the Company to the extent quoted market prices or volatilities are not available. External pricing input availability varies based on market liquidity, term of the agreement, and, for commodities, location. Valuations of derivative assets and liabilities take into account nonperformance risk, including the effect of counterparties’ and the Company’s credit risk. The Company regularly assesses the validity and availability of pricing data for its derivative transactions. Although the Company uses its best judgment in estimating the fair value of these instruments, there are inherent limitations in any estimation technique. Energy Related Derivative Contracts Overview The primary objective for the use of commodity derivative instruments, including energy contracts, options, swaps, and futures, is to manage price risk associated with forecasted purchases of energy and fuel used to generate electricity, as well as managing anticipated generation capacity in excess of forecasted demand from existing customers. PNM’s energy related derivative contracts manage commodity risk. PNM is required to meet the demand and energy needs of its customers. PNM is exposed to market risk for the needs of its customers not covered under a FPPAC. PNM was exposed to market risk for its share of PVNGS Unit 3 through December 31, 2017, at which time PVNGS Unit 3 became a jurisdictional resource to serve New Mexico retail customers. Beginning January 1, 2018, PNM is exposed to market risk for its 65 MW of SJGS Unit 4 that is held as merchant plant as ordered by the NMPRC (Note 16). PNM has entered into agreements to sell the power from 36 MW of that capacity to a third party at a fixed price for the period January 1, 2018 through June 30, 2022, subject to certain conditions. Under these agreements, PNM is obligated to deliver 36 MW of power only when SJGS Unit 4 is operating. These agreements are not considered derivatives because there is no notional amount due to the unit-contingent nature of the transactions. PNM’s operations are managed primarily through a net asset-backed strategy, whereby PNM’s aggregate net open forward contract position is covered by its forecasted excess generation capabilities or market purchases. PNM could be exposed to market risk if its generation capabilities were to be disrupted or if its load requirements were to be greater than anticipated. If all or a portion of load requirements were required to be covered as a result of such unexpected situations, commitments would have to be met through market purchases. TNMP does not enter into energy related derivative contracts. Commodity Risk Marketing and procurement of energy often involve market risks associated with managing energy commodities and establishing positions in the energy markets, primarily on a short-term basis. PNM routinely enters into various derivative instruments such as forward contracts, option agreements, and price basis swap agreements to economically hedge price and volume risk on power commitments and fuel requirements and to minimize the effect of market fluctuations in wholesale portfolios. PNM monitors the market risk of its commodity contracts to maintain total exposure within management-prescribed limits in accordance with approved risk and credit policies. Accounting for Derivatives Under derivative accounting and related rules for energy contracts, PNM accounts for its various instruments for the purchase and sale of energy, which meet the definition of a derivative, based on PNM’s intent. During the years ended December 31, 2017, 2016, and 2015, PNM was not hedging its exposure to the variability in future cash flows from commodity derivatives through designated cash flows hedges. The derivative contracts recorded at fair value that do not qualify or are not designated for cash flow hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power agreements, used to economically hedge generation assets, purchased power and fuel costs, and customer load requirements. Changes in the fair value of economic hedges are reflected in results of operations and are classified between operating revenues and cost of energy according to the intent of the hedge. PNM has no trading transactions. Commodity Derivatives PNM’s commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges, are summarized as follows:
| Economic Hedges
| December 31,
| 2017 |  | 2016
| (In thousands)
Current assets | $ | 1,088 |  |  | $ | 5,224 |
Deferred charges | 3,556 |  |  | — |
| 4,644 |  |  | 5,224 |
Current liabilities | (1,182 | ) |  | (2,339 | )
Long-term liabilities | (3,556 | ) |  | — |
| (4,738 | ) |  | (2,339 | )
Net | $ | (94 | ) |  | $ | 2,885 |
Included in the above table are $2.7 million of current assets at December 31, 2016 related to contracts for the sale of energy from PVNGS Unit 3 through 2017 at market price plus a premium. As noted above, PVNGS Unit 3 has become a jurisdictional resource to serve New Mexico retail customers beginning January 1, 2018. Certain of PNM’s commodity derivative instruments in the above table are subject to master netting agreements whereby assets and liabilities could be offset in the settlement process. PNM does not offset fair value and cash collateral for derivative instruments under master netting arrangements and the above table reflects the gross amounts of fair value assets and liabilities for commodity derivatives. Included in the above table are equal amounts of assets and liabilities aggregating $4.6 million at December 31, 2017 and $0.5 million at December 31, 2016, resulting from PNM’s hazard sharing arrangements with Tri-State (Note 17). The hazard sharing arrangements are net-settled upon delivery. Other amounts that could be offset under master netting agreements were immaterial. At December 31, 2017 and 2016, PNM had no amounts recognized for the legal right to reclaim cash collateral. However, at December 31, 2017 and 2016, amounts posted as cash collateral under margin arrangements were $0.8 million and $2.6 million. At December 31, 2017 and 2016, obligations to return cash collateral were $0.9 million and $0.1 million. Cash collateral amounts are included in other current assets and other current liabilities on the Consolidated Balance Sheets. PNM has a NMPRC-approved hedging plan to manage fuel and purchased power costs related to customers covered by its FPPAC. There were no amounts hedged under this plan as of December 31, 2017. The table above includes $0.2 million of current assets and $0.1 million of current liabilities at December 31, 2016 related to this plan. The offsets to these amounts are recorded as regulatory assets and liabilities on the Consolidated Balance Sheets. The following table presents the effect of mark-to-market commodity derivative instruments on PNM’s earnings, excluding income tax effects. Commodity derivatives had no impact on OCI for the periods presented.
| Economic Hedges
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Electric operating revenues | $ | 5,151 |  |  | $ | (53 | ) |  | $ | 7,156 |
Cost of energy | (5,386 | ) |  | (1,208 | ) |  | (293 | )
Total gain (loss) | $ | (235 | ) |  | $ | (1,261 | ) |  | $ | 6,863 |
Commodity contract volume positions are presented in MMBTU for gas related contracts and in MWh for power related contracts. The table below presents PNM’s net buy (sell) volume positions:
| Economic Hedges
| MMBTU |  | MWh
December 31, 2017 | 100,000 |  |  | — |
December 31, 2016 | 254,100 |  |  | (2,471,600 | )
PNM has 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. In connection with managing its commodity risks, PNM enters into master agreements with certain counterparties. If PNM is in a net liability position under an agreement, some agreements provide that the counterparties can request collateral if PNM’s credit rating is downgraded; other agreements provide that the counterparty may request collateral to provide it with “adequate assurance” that PNM will perform; and others have no provision for collateral. At December 31, 2017 and 2016, PNM had no such contracts in a net liability position. Non-Derivative Financial Instruments The carrying amounts reflected on the Consolidated Balance Sheets approximate fair value for cash, receivables, and payables due to the short period of maturity. Available-for-sale securities are carried at fair value. Available-for-sale securities consist of PNM assets held in the NDT for its share of decommissioning costs of PVNGS and trusts for PNM’s share of final reclamation costs related to the coal mines serving SJGS and Four Corners (Note 16). At December 31, 2017 and 2016, the fair value of available-for-sale securities included $293.7 million and $253.9 million for the NDT and $29.8 million and $19.1 million for the mine reclamation trusts. The fair value and gross unrealized gains of investments in available-for-sale securities are presented in the following table.
| December 31, 2017 |  | December 31, 2016
| Unrealized Gains |  | Fair Value |  | Unrealized Gains |  | Fair Value
|  |  | (In thousands) |  |
Cash and cash equivalents | $ | — |  |  | $ | 52,636 |  |  | $ | — |  |  | $ | 23,683 |
Equity securities: |  |  |  |  |  |  |
Domestic value | 4,011 |  |  | 40,032 |  |  | 1,135 |  |  | 34,796 |
Domestic growth | 3,995 |  |  | 35,456 |  |  | 3,032 |  |  | 47,595 |
International and other | 6,810 |  |  | 45,867 |  |  | 2,029 |  |  | 27,481 |
Fixed income securities: |  |  |  |  |  |  |
U.S. Government | 273 |  |  | 34,317 |  |  | 115 |  |  | 40,962 |
Municipals | 1,225 |  |  | 48,076 |  |  | 585 |  |  | 43,789 |
Corporate and other | 1,714 |  |  | 67,140 |  |  | 553 |  |  | 54,671 |
| $ | 18,028 |  |  | $ | 323,524 |  |  | $ | 7,449 |  |  | $ | 272,977 |
Due to the funded status of the nuclear decommissioning trust and overall market performance, PNM began to re-balance the decommissioning investment portfolio in late 2017 to increase the percentage of the investments in fixed income (debt) securities to approximately 85%. The portfolio re-balancing was completed in early 2018. The proceeds and gross realized gains and losses on the disposition of available-for-sale securities 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 (increase)/decrease in realized impairment losses of $3.3 million, $(1.2) million, and $(4.3) million for the years ended December 31, 2017, 2016 and 2015. See New Accounting Pronouncements in Note 1.
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Proceeds from sales | $ | 637,492 |  |  | $ | 522,601 |  |  | $ | 252,174 |
Gross realized gains | $ | 36,896 |  |  | $ | 46,116 |  |  | $ | 29,663 |
Gross realized (losses) | $ | (12,993 | ) |  | $ | (25,430 | ) |  | $ | (9,259 | )
Held-to-maturity securities are those investments in debt securities that the Company has the ability and intent to hold until maturity. At December 31, 2017 and 2016, PNMR’s held-to-maturity securities consist of the Westmoreland Loan. The Company has no available-for-sale or held-to-maturity securities for which carrying value exceeds fair value. There are no impairments considered to be “other than temporary” that are included in AOCI and not recognized in earnings. At December 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 | $ | 4,460 |  |  | $ | — |
After 1 year through 5 years | 32,693 |  |  | 66,588 |
After 5 years through 10 years | 48,681 |  |  | — |
After 10 years through 15 years | 5,934 |  |  | — |
After 15 years through 20 years | 11,983 |  |  | — |
After 20 years | 45,782 |  |  | — |
| $ | 149,533 |  |  | $ | 66,588 |
Fair Value Disclosures The Company determines the fair values of its derivative and other financial instruments based on the hierarchy established in GAAP, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. GAAP describes three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs used in determining fair values for the Company consist of internal valuation models. The Company records any transfers between fair value hierarchy levels as of the end of each calendar quarter. There were no transfers between levels during the years ended December 31, 2017 and 2016. For available-for-sale securities, Level 2 fair values are provided by the trustee utilizing a pricing service. The pricing provider predominantly uses the market approach using bid side market value based upon a hierarchy of information for specific securities or securities with similar characteristics. For commodity derivatives, Level 2 fair values are determined based on market observable inputs, which are validated using multiple broker quotes, including forward price, volatility, and interest rate curves to establish expectations of future prices. Credit valuation adjustments are made for estimated credit losses based on the overall exposure to each counterparty. For the Company’s long-term debt, Level 2 fair values are provided by an external pricing service. The pricing service primarily utilizes quoted prices for similar debt in active markets when determining fair value. For investments categorized as Level 3, primarily the Westmoreland Loan, fair values were determined by discounted cash flow models that take into consideration discount rates that are observable for similar types of assets and liabilities. Management of the Company independently verifies the information provided by pricing services. Items recorded at fair value by PNM on the Consolidated Balance Sheets are presented below by level of the fair value hierarchy. There were no Level 3 fair value measurements at December 31, 2017 and 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)
|  |  | (In thousands)
December 31, 2017 |  |  |  |  |
Available-for-sale securities |  |  |  |  |
Cash and cash equivalents | $ | 52,636 |  |  | $ | 52,636 |  |  | $ | — |
Equity securities: |  |  |  |  |
Domestic value | 40,032 |  |  | 40,032 |  |  | — |
Domestic growth | 35,456 |  |  | 35,456 |  |  | — |
International and other | 45,867 |  |  | 42,332 |  |  | 3,535 |
Fixed income securities: |  |  |  |  |
U.S. Government | 34,317 |  |  | 33,645 |  |  | 672 |
Municipals | 48,076 |  |  | — |  |  | 48,076 |
Corporate and other | 67,140 |  |  | — |  |  | 67,140 |
| $ | 323,524 |  |  | $ | 204,101 |  |  | $ | 119,423 |
Commodity derivative assets | $ | 4,644 |  |  | $ | — |  |  | $ | 4,644 |
Commodity derivative liabilities | (4,738 | ) |  | — |  |  | (4,738 | )
Net | $ | (94 | ) |  | $ | — |  |  | $ | (94 | )
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 |
The carrying amounts and fair values of investments in the Westmoreland Loan, other investments, and long-term debt, which are not recorded at fair value on the Consolidated Balance Sheets are presented below:
|  |  |  |  | GAAP Fair Value Hierarchy
| Carrying Amount |  | Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
December 31, 2017 | (In thousands)
PNMR |  |  |  |  |  |  |  |  |
Long-term debt | $ | 2,437,645 |  |  | $ | 2,554,836 |  |  | $ | — |  |  | $ | 2,554,836 |  |  | $ | — |
Westmoreland Loan | $ | 56,640 |  |  | $ | 66,588 |  |  | $ | — |  |  | $ | — |  |  | $ | 66,588 |
Other investments | $ | 503 |  |  | $ | 503 |  |  | $ | 503 |  |  | $ | — |  |  | $ | — |
PNM |  |  |  |  |  |  |  |  |
Long-term debt | $ | 1,657,910 |  |  | $ | 1,727,135 |  |  | $ | — |  |  | $ | 1,727,135 |  |  | $ | — |
Other investments | $ | 283 |  |  | $ | 283 |  |  | $ | 283 |  |  | $ | — |  |  | $ | — |
TNMP |  |  |  |  |  |  |  |  |
Long-term debt | $ | 480,620 |  |  | $ | 527,563 |  |  | $ | — |  |  | $ | 527,563 |  |  | $ | — |
Other investments | $ | 220 |  |  | $ | 220 |  |  | $ | 220 |  |  | $ | — |  |  | $ | — |
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 |  |  | $ | — |  |  | $ | — |
Investments Held by Employee Benefit Plans As discussed in Note 12, PNM and TNMP have trusts that hold investment assets for their pension and other postretirement benefit plans. The fair value of the assets held by the trusts impacts the determination of the funded status of each plan (Note 12), but the assets are not reflected on the Company’s Consolidated Balance Sheets. Both the PNM Pension Plan and the TNMP Pension Plan hold units of participation in the PNM Resources, Inc. Master Trust (the “PNMR Master Trust”), which was established for the investment of assets of the pension plans. The Company is contemplating changing its investment allocation targets by decreasing the fixed income investments used to match pension liabilities from 65% to 50% beginning in 2018. GAAP provides a practical expedient that allows the net asset value per share to be used as fair value for investments in certain entities that do not have readily determinable fair values and are considered to be investment companies. Fair values for alternative investments held by the PNMR Master Trust are valued using this practical expedient. Under GAAP, investments for which fair value is measured using that practical expedient are not required to be categorized within the fair value hierarchy. Level 2 and Level 3 fair values are provided by fund managers utilizing a pricing service. For level 2 fair values, the pricing provider predominately uses the market approach using bid side market value based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value as of year-end. Level 3 investments are comprised of corporate term loans. Alternative investments include private equity funds, hedge funds, and real estate funds. The private equity funds are not voluntarily redeemable. These investments are realized through periodic distributions occurring over a 10 to 15 year term after the initial investment. The real estate funds and hedge funds may be voluntarily redeemed, but are subject to redemption provisions that may result in the funds not being able to be redeemed in the near term. Audited financial statements are received for each fund and are reviewed by the Company annually. The valuation of Level 3 investments and alternative investments requires significant judgment by the pricing provider due to the absence of quoted market values, changes in market conditions, and the long-term nature of the assets. The significant unobservable inputs include the trading multiples of public companies that are considered comparable to the company being valued, company specific issues, estimates of liquidation value, current operating performance and future expectations of performance, changes in market outlook and the financing environment, capitalization rates, discount rates, and cash flows. The fair values of investments held by the employee benefit plans are as follows:
|  |  | GAAP Fair Value Hierarchy
| Total |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
December 31, 2017 |  |  | (In thousands) |  |
PNM Pension Plan |  |  |  |  |  |  |
Participation in PNMR Master Trust Investments: |  |  |  |  |  |  |
Investments categorized within fair value hierarchy | $ | 487,498 |  |  | $ | 140,218 |  |  | $ | 347,089 |  |  | $ | 191 |
Uncategorized investments | 74,768 |  |  |  |  |  |  |
Total Master Trust Investments | $ | 562,266 |  |  |  |  |  |  |
TNMP Pension Plan |  |  |  |  |  |  |
Participation in PNMR Master Trust Investments: |  |  |  |  |  |  |
Investments categorized within fair value hierarchy | $ | 53,273 |  |  | $ | 15,244 |  |  | $ | 38,008 |  |  | $ | 21 |
Uncategorized investments | 10,260 |  |  |  |  |  |  |
Total Master Trust Investments | $ | 63,533 |  |  |  |  |  |  |
PNM OPEB Plan |  |  |  |  |  |  |
Cash and cash equivalents | $ | 437 |  |  | $ | 437 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |
International funds | 10,636 |  |  | — |  |  | 10,636 |  |  | — |
Domestic value | 10,816 |  |  | 10,816 |  |  | — |  |  | — |
Domestic growth | 6,710 |  |  | 6,710 |  |  | — |  |  | — |
Other funds | 31,660 |  |  | — |  |  | 31,660 |  |  | — |
Fixed income securities: |  |  |  |  |  |  |
Mutual funds | 20,918 |  |  | 20,918 |  |  | — |  |  | — |
| $ | 81,177 |  |  | $ | 38,881 |  |  | $ | 42,296 |  |  | $ | — |
TNMP OPEB Plan |  |  |  |  |  |  |
Cash and cash equivalents | $ | 149 |  |  | $ | 149 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |
International funds | 1,597 |  |  | — |  |  | 1,597 |  |  | — |
Domestic value | 293 |  |  | 293 |  |  | — |  |  | — |
Domestic growth | 1,410 |  |  | 1,410 |  |  | — |  |  | — |
Other funds | 4,011 |  |  | — |  |  | 4,011 |  |  | — |
Fixed income securities: |  |  |  |  |  |  |
Mutual funds | 2,685 |  |  | 2,685 |  |  | — |  |  | — |
| $ | 10,145 |  |  | $ | 4,537 |  |  | $ | 5,608 |  |  | $ | — |
|  |  | GAAP Fair Value Hierarchy
| Total |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
December 31, 2016 | (In thousands)
PNM Pension Plan |  |  |  |  |  |  |
Participation in PNMR Master Trust Investments: |  |  |  |  |  |  |
Investments categorized within fair value hierarchy | $ | 467,965 |  |  | $ | 129,624 |  |  | $ | 337,989 |  |  | $ | 352 |
Uncategorized investments | 75,685 |  |  |  |  |  |  |
Total Master Trust Investments | $ | 543,650 |  |  |  |  |  |  |
TNMP Pension Plan |  |  |  |  |  |  |
Participation in PNMR Master Trust Investments: |  |  |  |  |  |  |
Investments categorized within fair value hierarchy | $ | 50,901 |  |  | $ | 14,447 |  |  | $ | 36,416 |  |  | $ | 38 |
Uncategorized investments | 9,729 |  |  |  |  |  |  |
Total Master Trust Investments | $ | 60,630 |  |  |  |  |  |  |
PNM OPEB Plan |  |  |  |  |  |  |
Cash and cash equivalents | $ | 2,567 |  |  | $ | 2,567 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |
International funds | 9,300 |  |  | — |  |  | 9,300 |  |  | — |
Domestic value | 10,260 |  |  | 10,260 |  |  | — |  |  | — |
Domestic growth | 6,338 |  |  | 6,338 |  |  | — |  |  | — |
Other funds | 26,405 |  |  | — |  |  | 26,405 |  |  | — |
Fixed income securities: |  |  |  |  |  |  |
Mutual funds | 18,959 |  |  | 18,959 |  |  | — |  |  | — |
| $ | 73,829 |  |  | $ | 38,124 |  |  | $ | 35,705 |  |  | $ | — |
TNMP OPEB Plan |  |  |  |  |  |  |
Cash and cash equivalents | $ | 308 |  |  | $ | 308 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |
International funds | 1,279 |  |  | — |  |  | 1,279 |  |  | — |
Domestic value | 449 |  |  | 449 |  |  | — |  |  | — |
Domestic growth | 1,089 |  |  | 1,089 |  |  | — |  |  | — |
Other funds | 3,060 |  |  | — |  |  | 3,060 |  |  | — |
Fixed income securities: |  |  |  |  |  |  |
Mutual funds | 2,593 |  |  | 2,593 |  |  | — |  |  | — |
| $ | 8,778 |  |  | $ | 4,439 |  |  | $ | 4,339 |  |  | $ | — |
The fair values of investments in the PNMR Master Trust are as follows:
|  |  | GAAP Fair Value Hierarchy
| Total |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
December 31, 2017 | (In thousands)
PNMR Master Trust |  |  |  |  |  |  |
Cash and cash equivalents | $ | 7,697 |  |  | $ | 7,697 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |
International | 42,048 |  |  | — |  |  | 42,048 |  |  | — |
Domestic value | 37,026 |  |  | 37,026 |  |  | — |  |  | — |
Domestic growth | 19,136 |  |  | 19,136 |  |  | — |  |  | — |
Other funds | 25,099 |  |  | — |  |  | 25,099 |  |  | — |
Fixed income securities: |  |  |  |  |  |  |
Corporate | 215,535 |  |  | — |  |  | 215,323 |  |  | 212 |
U.S. Government | 117,572 |  |  | 91,603 |  |  | 25,969 |  |  | — |
Municipals | 11,438 |  |  | — |  |  | 11,438 |  |  | — |
Other funds | 65,220 |  |  | — |  |  | 65,220 |  |  | — |
Total investments categorized within fair value hierarchy | 540,771 |  |  | $ | 155,462 |  |  | $ | 385,097 |  |  | $ | 212 |
Uncategorized investments: |  |  |  |  |  |  |
Private equity funds | 22,281 |  |  |  |  |  |  |
Hedge funds | 45,615 |  |  |  |  |  |  |
Real estate funds | 17,132 |  |  |  |  |  |  |
| $ | 625,799 |  |  |  |  |  |  |
December 31, 2016 |
PNMR Master Trust |  |  |  |  |  |  |
Cash and cash equivalents | $ | 20,503 |  |  | $ | 20,503 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |
International | 38,401 |  |  | — |  |  | 38,401 |  |  | — |
Domestic value | 36,036 |  |  | 36,036 |  |  | — |  |  | — |
Domestic growth | 18,484 |  |  | 18,484 |  |  | — |  |  | — |
Other funds | 27,532 |  |  | — |  |  | 27,532 |  |  | — |
Fixed income securities: |  |  |  |  |  |  |
Corporate | 205,419 |  |  | — |  |  | 205,029 |  |  | 390 |
U.S. Government | 94,359 |  |  | 69,048 |  |  | 25,311 |  |  | — |
Municipals | 13,970 |  |  | — |  |  | 13,970 |  |  | — |
Other funds | 64,162 |  |  | — |  |  | 64,162 |  |  | — |
Total investments categorized within fair value hierarchy | 518,866 |  |  | $ | 144,071 |  |  | $ | 374,405 |  |  | $ | 390 |
Uncategorized investments: |  |  |  |  |  |  |
Private equity funds | 27,060 |  |  |  |  |  |  |
Hedge funds | 42,070 |  |  |  |  |  |  |
Real estate funds | 16,284 |  |  |  |  |  |  |
| $ | 604,280 |  |  |  |  |  |  |
A reconciliation of the changes in Level 3 fair value measurements is as follows:
| Fixed Income - Corporate
PNMR Master Trust | PNM Pension |  | TNMP Pension |  | Total Master Trust
| (In thousands)
Balance at December 31, 2015 | $ | 719 |  |  | $ | 78 |  |  | $ | 797 |
Actual return on assets sold during the period | 1 |  |  | — |  |  | 1 |
Actual return on assets still held at period end | 19 |  |  | 2 |  |  | 21 |
Purchases | — |  |  | — |  |  | — |
Sales | (387 | ) |  | (42 | ) |  | (429 | )
Balance at December 31, 2016 | 352 |  |  | 38 |  |  | 390 |
Actual return on assets sold during the period | 1 |  |  | — |  |  | 1 |
Actual return on assets still held at period end | (7 | ) |  | (1 | ) |  | (8 | )
Purchases | 92 |  |  | 10 |  |  | 102 |
Sales | (247 | ) |  | (26 | ) |  | (273 | )
Balance at December 31, 2017 | $ | 191 |  |  | $ | 21 |  |  | $ | 212 |

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- Definition The entire disclosure for derivatives and fair value of assets and liabilities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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