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Fair Value of Derivative and Other Financial Instruments (Tables) | 9 Months Ended
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Sep. 30, 2018
Fair Value of Derivative and Other Financial Instruments [Abstract] |
Summary of 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
| September 30, 2018 |  | December 31, 2017
| (In thousands)
Current assets | $ | 1,083 |  |  | $ | 1,088 |
Deferred charges | 2,741 |  |  | 3,556 |
| 3,824 |  |  | 4,644 |
Current liabilities | (1,092 | ) |  | (1,182 | )
Long-term liabilities | (2,741 | ) |  | (3,556 | )
| (3,833 | ) |  | (4,738 | )
Net | $ | (9 | ) |  | $ | (94 | )
Effect of Mark-to-Market on Earnings, Excluding Tax Effects | 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
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (In thousands)
Electric operating revenues | $ | (93 | ) |  | $ | (2,237 | ) |  | $ | (95 | ) |  | $ | 5,697 |
Cost of energy | 93 |  |  | (14 | ) |  | 97 |  |  | (5,289 | )
Total gain | $ | — |  |  | $ | (2,251 | ) |  | $ | 2 |  |  | $ | 408 |
Schedule of Net Buy (Sell) Volume Positions | The table below presents PNM’s net buy (sell) volume positions:
|  | Economic Hedges
|  | MMBTU |  | MWh
September 30, 2018 |  | 100,000 |  |  | 4,800 |
December 31, 2017 |  | 100,000 |  |  | — |
Schedule of Gross Realized Gains and Losses | The proceeds and gross realized gains and losses on the disposition of securities held in the NDT and coal mine reclamation trusts 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 $(0.8) million and $(4.6) million for the three and nine months ended September 30, 2018 and $0.1 million and $1.1 million for the three and nine months ended September 30, 2017.
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (In thousands)
Proceeds from sales | $ | 117,801 |  |  | $ | 98,532 |  |  | $ | 911,899 |  |  | $ | 456,577 |
Gross realized gains | $ | 3,460 |  |  | $ | 8,128 |  |  | $ | 17,030 |  |  | $ | 24,745 |
Gross realized (losses) | $ | (3,149 | ) |  | $ | (2,829 | ) |  | $ | (14,018 | ) |  | $ | (8,150 | )
Gains and losses recognized on the Condensed Consolidated Statements of Earnings related to investment securities in the NDT and reclamation trusts are presented in the following table.
|  | Three Months Ended September 30, 2018 |  | Nine Months Ended September 30, 2018
|  | (In thousands)
Equity securities: |  |  |  |
Net gains from equity securities sold |  | $ | 113 |  |  | $ | 5,443 |
Net gains from equity securities still held |  | 2,943 |  |  | 2,636 |
Total net gains on equity securities |  | 3,056 |  |  | 8,079 |
Available-for-sale debt securities: |  |  |  |
Net (losses) on debt securities |  | (593 | ) |  | (6,998 | )
Net gains on investment securities |  | $ | 2,463 |  |  | $ | 1,081 |
Investments Classified by Contractual Maturity Date | At September 30, 2018, the available-for-sale debt securities held by PNM, had the following final maturities:
| Fair Value
| (In thousands)
Within 1 year | $ | 9,986 |
After 1 year through 5 years | 59,944 |
After 5 years through 10 years | 67,585 |
After 10 years through 15 years | 10,375 |
After 15 years through 20 years | 11,151 |
After 20 years | 46,887 |
| $ | 205,928 |
Schedule of Investments | Items recorded at fair value by PNM on the Condensed Consolidated Balance Sheets are presented below by level of the fair value hierarchy along with gross unrealized gains on investments in available-for-sale securities. Under ASU 2016-01, PNM does not classify its investments in equity instruments as available-for-sale securities beginning January 1, 2018.
|  |  | 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) |  | Unrealized Gains
| (In thousands)
September 30, 2018 |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 3,527 |  |  | $ | 3,527 |  |  | $ | — |  |  | $ | — |  |  |
Equity securities: |  |  |  |  |  |  |  |  |
Corporate stocks, common | 40,017 |  |  | 40,017 |  |  | — |  |  | — |  |  |
Corporate stocks, preferred | 7,239 |  |  | 1,587 |  |  | 5,652 |  |  | — |  |  |
Mutual funds and other | 75,035 |  |  | 75,035 |  |  | — |  |  | — |  |  |
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |
U.S. Government | 25,689 |  |  | 15,400 |  |  | 10,289 |  |  | — |  |  | $ | 23 |
International Government | 8,460 |  |  | — |  |  | 8,460 |  |  | — |  |  | 90 |
Municipals | 51,280 |  |  | — |  |  | 51,280 |  |  | — |  |  | 78 |
Corporate and other | 120,499 |  |  | — |  |  | 117,445 |  |  | 3,054 |  |  | 1,827 |
| $ | 331,746 |  |  | $ | 135,566 |  |  | $ | 193,126 |  |  | $ | 3,054 |  |  | $ | 2,018 |
Commodity derivative assets | $ | 3,824 |  |  | $ | — |  |  | $ | 3,824 |  |  | $ | — |  |  |
Commodity derivative liabilities | (3,833 | ) |  | — |  |  | (3,833 | ) |  | — |  |  |
Net | $ | (9 | ) |  | $ | — |  |  | $ | (9 | ) |  | $ | — |  |  |
December 31, 2017 |  |  |  |  |  |  |  |  |
Available-for-sale securities |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 52,636 |  |  | $ | 52,636 |  |  | $ | — |  |  | $ | — |  |  |
Equity securities: |  |  |  |  |  |  |  |  |
Domestic value | 40,032 |  |  | 40,032 |  |  | — |  |  | — |  |  | $ | 4,011 |
Domestic growth | 35,456 |  |  | 35,456 |  |  | — |  |  | — |  |  | 3,995 |
International and other | 45,867 |  |  | 42,332 |  |  | 3,535 |  |  | — |  |  | 6,810 |
Fixed income securities: |  |  |  |  |  |  |  |  |
U.S. Government | 34,317 |  |  | 33,645 |  |  | 672 |  |  | — |  |  | 273 |
Municipals | 48,076 |  |  | — |  |  | 48,076 |  |  | — |  |  | 1,225 |
Corporate and other | 67,140 |  |  | — |  |  | 67,140 |  |  | — |  |  | 1,714 |
| $ | 323,524 |  |  | $ | 204,101 |  |  | $ | 119,423 |  |  | $ | — |  |  | $ | 18,028 |
Commodity derivative assets | $ | 4,644 |  |  | $ | — |  |  | $ | 4,644 |  |  | $ | — |  |  |
Commodity derivative liabilities | (4,738 | ) |  | — |  |  | (4,738 | ) |  | — |  |  |
Net | $ | (94 | ) |  | $ | — |  |  | $ | (94 | ) |  | $ | — |  |  |
Summary of Level 3 Measurements | A reconciliation of the changes in Level 3 fair value measurements is as follows:
| Corporate Debt
| (In thousands)
Balance at December 31, 2017 | $ | — |
Actual return on assets sold during the period | (6 | )
Actual return on assets still held at period end | 16 |
Purchases | 5,234 |
Sales | (2,190 | )
Balance at September 30, 2018 | $ | 3,054 |
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, 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, 2018 | (In thousands)
PNMR |  |  |  |  |  |  |  |  |
Long-term debt | $ | 2,614,511 |  |  | $ | 2,642,154 |  |  | $ | — |  |  | $ | 2,642,154 |  |  | $ | — |
Other investments | $ | 348 |  |  | $ | 348 |  |  | $ | 348 |  |  | $ | — |  |  | $ | — |
PNM |  |  |  |  |  |  |  |  |
Long-term debt | $ | 1,656,102 |  |  | $ | 1,665,064 |  |  | $ | — |  |  | $ | 1,665,064 |  |  | $ | — |
Other investments | $ | 142 |  |  | $ | 142 |  |  | $ | 142 |  |  | $ | — |  |  | $ | — |
TNMP |  |  |  |  |  |  |  |  |
Long-term debt | $ | 560,293 |  |  | $ | 580,017 |  |  | $ | — |  |  | $ | 580,017 |  |  | $ | — |
Other investments | $ | 206 |  |  | $ | 206 |  |  | $ | 206 |  |  | $ | — |  |  | $ | — |
December 31, 2017 |  |  |  |  |  |  |  |  |
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 |  |  | $ | — |  |  | $ | — |

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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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19279-110258 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2C -URI http://asc.fasb.org/extlink&oid=99377789&loc=SL7498348-110258 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19190-110258 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bb) -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258 + Details
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