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Fair Value of Derivative and Other Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2019

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 presented in the following line items on the Condensed Consolidated Balance Sheets:

	Economic Hedges
	September 30, 2019				December 31, 2018
	(In thousands)
Other current assets	$	1,157			$	1,083
Other deferred charges	1,770				2,511
	2,927				3,594
Other current liabilities	(1,097		)		(1,177		)
Other deferred credits	(1,770		)		(2,511		)
	(2,867		)		(3,688		)
Net	$	60			$	(94	)

Schedule of Net Buy (Sell) Volume Positions

The table below presents PNM’s net buy (sell) volume positions:

		Economic Hedges
		MMBTU			MWh
September 30, 2019		100,000			(11,200	)
December 31, 2018		100,000			—

Schedule of Gross Realized Gains and Losses

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								Nine Months Ended
	September 30,								September 30,
	2019				2018				2019				2018
	(In thousands)
Equity securities:
Net gains from equity securities sold	$	514			$	113			$	4,675			$	5,443
Net gains from equity securities still held	1,011				2,943				10,916				2,636
Total net gains on equity securities	1,525				3,056				15,591				8,079
Available-for-sale debt securities:
Net gains (losses) on debt securities	161				(593		)		4,708				(6,998		)
Net gains on investment securities	$	1,686			$	2,463			$	20,299			$	1,081

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 $0.2 million and $2.8 million for the three and nine months ended September 30, 2019 and $(0.8) million and $(4.6) million for the three and nine months ended September 30, 2018.

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2019				2018				2019				2018
	(In thousands)
Proceeds from sales	$	141,371			$	117,801			$	375,382			$	911,899
Gross realized gains	$	6,510			$	3,460			$	21,605			$	17,030
Gross realized (losses)	$	(6,026	)		$	(3,149	)		$	(14,998	)		$	(14,018	)

Investments Classified by Contractual Maturity Date

At September 30, 2019, the available-for-sale debt securities held by PNM, had the following final maturities:

	Fair Value
	(In thousands)
Within 1 year	$	28,015
After 1 year through 5 years	79,195
After 5 years through 10 years	65,492
After 10 years through 15 years	13,960
After 15 years through 20 years	9,598
After 20 years	39,894
	$	236,154

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 debt securities:

					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, 2019
Cash and cash equivalents	$	1,455			$	1,455			$	—			$	—
Equity securities:
Corporate stocks, common	58,820				58,820				—				—
Corporate stocks, preferred	8,877				2,014				6,863				—
Mutual funds and other	63,711				63,694				17				—
Available-for-sale debt securities:
U.S. Government	40,959				15,458				25,501				—				$	832
International Government	12,975				—				12,975				—				819
Municipals	44,706				—				44,706				—				1,896
Corporate and other	137,514				946				133,772				2,796				9,591
	$	369,017			$	142,387			$	223,834			$	2,796			$	13,138
Commodity derivative assets	$	2,927			$	—			$	2,927			$	—
Commodity derivative liabilities	(2,867		)		—				(2,867		)		—
Net	$	60			$	—			$	60			$	—

	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)
December 31, 2018
Cash and cash equivalents	$	11,472			$	11,472			$	—			$	—
Equity securities:
Corporate stocks, common	32,997				32,997				—				—
Corporate stocks, preferred	7,258				1,654				5,604				—
Mutual funds and other	70,777				70,777				—				—
Available-for-sale debt securities:
U.S. Government	29,503				18,662				10,841				—				$	1,098
International Government	8,435				—				8,435				—				90
Municipals	53,642				—				53,642				—				489
Corporate and other	114,158				588				111,414				2,156				923
	$	328,242			$	136,150			$	189,936			$	2,156			$	2,600
Commodity derivative assets	$	3,594			$	—			$	3,594			$	—
Commodity derivative liabilities	(3,688		)		—				(3,688		)		—
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, 2018	$	2,156
Actual return on assets sold during the period	(54		)
Actual return on assets still held at period end	41
Purchases	2,090
Sales	(1,437		)
Balance at September 30, 2019	$	2,796
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 long-term debt, which is 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, 2019	(In thousands)
PNMR	$	2,852,229			$	3,030,720			$	—			$	3,030,720			$	—
PNM	$	1,707,637			$	1,787,761			$	—			$	1,787,761			$	—
TNMP	$	705,756			$	799,425			$	—			$	799,425			$	—
December 31, 2018
PNMR	$	2,670,111			$	2,703,810			$	—			$	2,703,810			$	—
PNM	$	1,656,490			$	1,668,736			$	—			$	1,668,736			$	—
TNMP	$	575,398			$	597,236			$	—			$	597,236			$	—

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