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Fair Value of Derivative and Other Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value of Derivative and Other Financial Instruments [Line Items]

The carrying amounts and fair values of investments in 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, 2014	(In thousands)
PNMR
Long-term debt	$	1,875,172	$	2,072,872	$	—	$	2,072,872	$	—
Investment in PVNGS lessor notes	$	31,469	$	32,712	$	—	$	—	$	32,712
Other investments	$	1,667	$	2,406	$	546	$	—	$	1,860
PNM
Long-term debt	$	1,390,647	$	1,525,625	$	—	$	1,525,625	$	—
Investment in PVNGS lessor notes	$	31,469	$	32,712	$	—	$	—	$	32,712
Other investments	$	300	$	300	$	300	$	—	$	—
TNMP
Long-term debt	$	365,759	$	422,583	$	—	$	422,583	$	—
Other investments	$	245	$	245	$	245	$	—	$	—

December 31, 2013
PNMR
Long-term debt	$	1,745,420	$	1,905,230	$	—	$	1,905,230	$	—
Investment in PVNGS lessor notes	$	52,958	$	57,279	$	—	$	—	$	57,279
Other investments	$	1,835	$	3,196	$	690	$	—	$	2,506
PNM
Long-term debt	$	1,290,618	$	1,382,938	$	—	$	1,382,938	$	—
Investment in PVNGS lessor notes	$	52,958	$	57,279	$	—	$	—	$	57,279
Other investments	$	445	$	445	$	445	$	—	$	—
TNMP
Long-term debt	$	336,036	$	390,814	$	—	$	390,814	$	—
Other investments	$	245	$	245	$	245	$	—	$	—

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 nine months ended September 30, 2014 and the year ended December 31, 2013.

PNMR and PNM [Member]

Fair Value of Derivative and Other Financial Instruments [Line Items]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

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, 2014			December 31, 2013
PNMR and PNM	(In thousands)
Current assets	$	4,148		$	4,064
Deferred charges	1,084			3,002
	5,232			7,066

Current liabilities	(1,370		)	(2,699		)
Long-term liabilities	(688		)	(1,094		)
	(2,058		)	(3,793		)
Net	$	3,174		$	3,273

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

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,
	2014			2013			2014			2013
PNMR and PNM	(In thousands)
Electric operating revenues	$	2,352		$	7,077		$	(2,124	)	$	5,743
Cost of energy	(60		)	(72		)	186			421
Total gain (loss)	$	2,292		$	7,005		$	(1,938	)	$	6,164

Schedule of Notional Amounts of Outstanding Derivative Positions

Commodity contract volume positions are presented in MMBTU for gas related contracts and in MWh for power related contracts. The table below presents PNMR’s and PNM’s net buy (sell) volume positions:



	Economic Hedges
	MMBTU	MWh
September 30, 2014
PNMR and PNM	656,000	(2,511,371	)
December 31, 2013
PNMR and PNM	905,000	(3,343,783	)

Schedule of Collateral Related to Derivative

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)
September 30, 2014
PNMR and PNM	$	1,532	$	—	$	1,403
December 31, 2013
PNMR and PNM	$	2,398	$	—	$	2,152

Available-for-sale Securities

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 and reflect impairments.



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
	(In thousands)
Proceeds from sales	$	29,103		$	103,230		$	82,222		$	179,336
Gross realized gains	$	3,134		$	2,719		$	11,616		$	8,962
Gross realized (losses)	$	(2,172	)	$	(531	)	$	(3,382	)	$	(2,027	)

The fair value of and gross unrealized gains on investments in available-for-sale securities are presented in the following table. At September 30, 2014 and December 31, 2013, the fair value of available-for-sale securities included $231.4 million and $222.5 million for the NDT and $4.5 million and $4.4 million for the mine reclamation trust.



	September 30, 2014				December 31, 2013
	Unrealized Gains		Fair Value		Unrealized Gains		Fair Value
PNMR and PNM			(In thousands)
Cash and cash equivalents	$	—	$	3,338	$	—	$	3,356
Equity securities:
Domestic value	15,360		41,917		14,523		39,460
Domestic growth	18,452		74,647		25,656		76,292
International and other	1,339		16,957		1,040		16,633
Fixed income securities:
U.S. Government	520		19,616		158		21,941
Municipals	4,970		67,595		1,018		58,568
Corporate and other	631		11,824		207		10,605
	$	41,272	$	235,894	$	42,602	$	226,855

Investments Classified by Contractual Maturity Date

At September 30, 2014, 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		PNM
	(In thousands)
Within 1 year	$	3,601	$	7,994	$	7,994
After 1 year through 5 years	20,886		25,456		24,718
After 5 years through 10 years	11,561		—		—
After 10 years through 15 years	9,549		—		—
After 15 years through 20 years	11,313		—		—
After 20 years	42,125		—		—
	$	99,035	$	33,450	$	32,712

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

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, 2014 and December 31, 2013 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, 2014	(In thousands)
PNMR and PNM
Available-for-sale securities
Cash and cash equivalents	$	3,338		$	3,338	$	—
Equity securities:
Domestic value	41,917			41,917		—
Domestic growth	74,647			74,647		—
International and other	16,957			16,957		—
Fixed income securities:
U.S. Government	19,616			17,865		1,751
Municipals	67,595			—		67,595
Corporate and other	11,824			2,544		9,280
	$	235,894		$	157,268	$	78,626

Commodity derivative assets	$	5,232		$	—	$	5,232
Commodity derivative liabilities	(2,058		)	—		(2,058		)
Net	$	3,174		$	—	$	3,174

December 31, 2013
PNMR and PNM
Available-for-sale securities
Cash and cash equivalents	$	3,356		$	3,356	$	—
Equity securities:
Domestic value	39,460			39,460		—
Domestic growth	76,292			76,292		—
International and other	16,633			16,633		—
Fixed income securities:
U.S. Government	21,941			20,194		1,747
Municipals	58,568			—		58,568
Corporate and other	10,605			2,245		8,360
	$	226,855		$	158,180	$	68,675

Commodity derivative assets	$	7,066		$	—	$	7,066
Commodity derivative liabilities	(3,793		)	—		(3,793		)
Net	$	3,273		$	—	$	3,273

- 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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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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